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EXHIBIT 6.9
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT ("Agreement") entered into as of March 31, 2001,
by and among InterGlobal Waste Management, Inc., a California corporation, with
its principal office at 000 Xxxxx Xxxxx, Xxxxxxxxx, XX 00000 ("Buyer"),
Hydra-Static Systems Inc., an Ontario corporation, (the "Company" or
"Hydra-Static"), with its principal office at 000 Xxxxxxxx Xxxx, Xxxxxx,
Xxxxxxx, Xxxxxx X0X0X0, and Xxxxxxx Xxxxxx ("Xxxxxx") and Xxxxxx X. Xxxxxxxx
("Xxxxxxxx"), Xxxxxx X. Xxxxxxx ("Xxxxxxx"), Xxxxxx X. Xxxxxx ("X.X. Xxxxxx")
and Xxxxxxx Xxxxxx ("X. Xxxxxx") may be referred to collectively herein as
"Shareholders").
RECITALS
1. Shareholders have made oral representations to Buyer that they are the
owners, free and clear of all adverse claims, of all of the outstanding shares
of capital stock (the "Shares") of Hydra-Static.
2. Buyer has agreed to loan the sum of Three Hundred Thousand ($300,000)
dollars to Hydra-Static, on the terms and conditions as set forth on a
Promissory Note dated February 1, 2001, heretofore executed in favor of Buyer
by Hydra-Static.
3. Shareholders are willing to transfer to Buyer all of the Shares upon
the terms and conditions and for the consideration set forth below.
4. Buyer is willing, subject to those terms and conditions and for that
consideration, to acquire all of the Shares.
AGREEMENT
The parties agree:
1. Transfer of the Shares.
Subject to the terms and conditions set forth and upon the
representations and warranties made in this Agreement, at the date of closing
(as that term is defined in Section 6):
(a) Shareholders will transfer to Buyer all of the Shares, the exact
number of Shares to be transferred by each Shareholder to be as follows:
SHAREHOLDER NO. OF SHARES
Xxxxxxx Xxxxxx 35 common
Xxxxxx X. Xxxxxxxx 35 common
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Xxxxxx X. Xxxxxxx 15 common
Xxxxxx X. Xxxxxx 8 common
Xxxxxxx Xxxxxx 7 common
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Total 100 common
(b) The parties agree that for the purpose of this Agreement, the 100
issued shares of Hydra-Static have been given a total value of
US$2,000,000.00 and the common shares of the Buyer have been given
a value of US$6.50 per share;
(c) On closing the Buyer shall pay to the Shareholders, or as they may
direct, the total sum of US$200,000.00 by certified cheque;
(d) Also on closing, the Buyer shall issue and deliver to the
Shareholders 276,923 common shares in the capital stock of the
Buyer which at US$6.50 per share equals consideration of
US$1,799,999.50;
(e) In the event that the average closing price of the shares of the
Buyer during the first 10 days that the shares of the Buyer are
traded on a recognized stock exchange (including Over the Counter
Bulletin Board) is less than US$6.50 per share, then the Buyer will
issue and deliver to the Shareholders additional shares of common
stock of the Buyer so that the value of the number of shares of
common stock of the Buyer issued and delivered to the Shareholders
hereunder will be computed pursuant to the said average closing
price to equal US$1,799,999.50;
(f) IWM will effective upon the Closing issue options to purchase One
million (1,000,000) shares of common stock of IWM. The option shall
be exercisable at the strike price of US$6.50 per share for a
period of five (5) years from the date of the Closing. In the event
that the average closing price for the shares of Buyer during the
first ten (10) days that the shares of Buyer are traded on a
recognized stock exchange (including (Over the Counter Bulletin
Board) is less than US$6.50 per share, then the strike price for the
Options shall be adjusted to said average closing price. Options
shall be exercised by providing notice of exercise in writing to
IWM at the address prescribed below and concurrently tendering the
consideration for the Shares subject to the Option;
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(g) Upon closing of this transaction, the Buyer shall cause Hydra-Static
to repay Xxxxxx X. Xxxxxxx'x shareholder loan in the amount of
US$30,000.00;
(h) Upon closing of this transaction, the entire promissory note
referenced in Recital 2 above shall be deemed an investment by Buyer
in Hydra-Static, and the note shall be deemed paid.
2. Representations and Warranties of Shareholders
Shareholders represent and warrant to, and agree with Buyer that, except
as set forth in Exhibit 2:
(a) The Company and each corporation named in Exhibit 1 (corporations
whose capital stock is wholly or majority owned by Hydra-Static and which are
sometimes collectively referred to in this Agreement as the Company) is and
will be at the date of closing a private corporation duly incorporated and
validly existing under the laws of Canada; is and will be at the date of closing
in good standing under the laws of Canada and of any other country, state or
jurisdiction where it does intrastate business; has and will have at the date of
closing all requisite corporate power and authority to own its properties and
carry on its business as now conducted; and has and will have at the date of
closing obtained all licenses, permits, or other authorizations, and taken all
actions, required by applicable law or governmental regulations in connection
with its business as now conducted.
(b) Hydra-Static has an authorized capital stock consisting solely of an
unlimited number of common shares without par value, of which 100 are presently
and no more are presently issued and outstanding.
(c) The Company does not own, directly or indirectly, a majority or
controlling interest in any corporation, business trust, joint stock company,
or other business organization or association, except the corporations named in
Exhibit 1 to this Agreement, each of which has an authorized capital stock,
outstanding shares of stock, and [a] Shareholder[s] as set forth in Exhibit 1.
There are no outstanding rights, warrants, options, subscriptions, agreements,
or commitments giving anyone any right to require the Company to issue, sell or
transfer any capital stock or other securities. The Company is not a general
partner of any partnership or a party to any joint venture.
(d) The shares of stock referred to in Exhibit 1 to this Agreement as
owned by the Company or a subsidiary of the Company are owned free and clear of
all liens, encumbrances, charges, and assessments.
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(e) Financial statements of the Company consisting of unaudited balance
sheets as of December 31, 2000 (the "Balance Sheet"). Unaudited statement of
operations have been delivered to the Buyer. The Financial Statements fully and
fairly set forth the financial condition of the Company as of the dates and the
results of its operations for the periods indicated in accordance with
generally accepted accounting principles consistently applied and the Company
did not have at December 31, 2000 and shall not have at closing:
(i) Any obligations, commitments, or liabilities, contingent or
otherwise, whether for taxes or otherwise, which are not shown or provided
for in the Financial Statements, except obligations to perform, after that
date, existing employment contracts, sales contracts, supply contracts,
purchase orders, and other commitments in each case in amounts incurred
only in the ordinary course of business;
(ii) Any continuing contract for the future purchase of materials,
supplies, or equipment (except for any such contract which can be
terminated without payment of any amount as a penalty or bonus) or any
contract or commitment for capital expenditures in excess of CAN$10,000 in
the aggregate or any contract continuing over a period of more than one
year from its date;
(iii) Any pension, retirement, deferred compensation, profit sharing,
bonus, retainer, consulting, welfare, or incentive compensation plan or
arrangement, or any contract, or any fringe or other benefits or
arrangements, of, with, or for any officer, director, employee, or any
other person which cannot be terminated within a period of 30 days and
without payment of any amount as a penalty, bonus, premium, or other
compensation for such a termination;
(iv) Any written or oral contract with or commitment or liabilities
to, any labor organization or association of employees (and no negotiation
with any such organization or association and no attempt, plan, or threat
to organize the employees of the Company is pending or, to the best of
Shareholders' knowledge, after reasonable investigation, threatened or
contemplated);
(v) Any litigation, legal action, arbitration, proceeding, demand,
claim, or investigation pending, or to the best of Shareholders' present
knowledge (after reasonable investigation), threatened or planned against
the Company which might adversely and materially affect its business or
property or this Agreement;
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(vi) Any notes or accounts receivable which are not current and
collectible except for uncollectible items, counterclaims, or setoffs not
in excess of the reserves provided for such contingencies in the Financial
Statements as adjusted in the ordinary course of business to date; other
than any such items with a value of less than CAN$5,000;
(vii) Any shortages existing in (A) any inventory or raw materials
owned by customers or others and stored upon the premises of the Company
for use in future orders of such customers or for other purposes except
for shortages, if any, not exceeding the normal allowance for scrap,
production losses, and materials consumed in process, or (B) any other
items of personal property owned by another for which the Company is
accountable to another; other than any such items with a collective value
of less than CAN$5,000.
(f) The Balance Sheet contains adequate provision for all income, value
added, accumulated earnings, or other Canadian taxes and all provincial or local
income, franchise, real property, personal property, sales, withholding, and all
other taxes imposed on the Company, or its property or rights or payable by it
or a lien on any of its property, including interest and penalties, if any, in
respect to such taxes, for the period ended on that date and all fiscal periods
prior to that date. The Company has timely filed or will file all required
Canadian, provincial, and local tax returns or Business Activity Statements
(collectively, the "Tax Returns") and has paid all Canadian, provincial, and
local taxes (collectively, the "Taxes") reflected as due for all periods ending
on or before June 30, 2000.
(g) Since the date of the Balance Sheet there has been no material adverse
change, or prospective change known to Shareholders (after reasonable
investigation) to be probable, in the business, capitalization, financial
condition, or properties of the Company and the only material changes in the
business, capitalization, financial condition, or properties of the Company
since that date are those arising from the normal and regular conduct of its
business, and no material loss, damage, or destruction of its properties or
business (whether or not covered by insurance) has occurred since that date or
is threatened or known to Shareholders (after reasonable investigation) to be
probable. The term "business," as used here and elsewhere in this Agreement to
refer to the business of the Company shall mean any one or more significant
aspects of its business, including, by way of example and not limitation, costs
(of labor or other services, materials, or sales), backlog, manufacturing
processes, products and rights to manufacture and sell products, sales volume,
sales mix, sales pricings, profit margins, customers, or continuing ability to
effect sales as in the past.
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(h) Except as noted on Exhibit 2(h), the Company has not since the date of
the Balance Sheet, and will not on or prior to the date of closing, declare or
pay or make any payment of a dividend or other distribution to its shareholders
or purchase, redeem, or otherwise acquire or dispose of any share of its stock;
the Company will not, except in the ordinary course of business, pay or
discharge any outstanding indebtedness.
(i) To the best of the Company's or Shareholders' knowledge, the Company
is not in material default under any contract to which it is a party or by which
it is bound, nor has any event occurred which, after the giving of notice or the
passage of time or both, would constitute a default under any such contract; and
the Company is not a party to or bound by any mortgage, lien, lease, agreement,
instrument, order, or judgment or decree which would prohibit the execution of
this Agreement or prohibit or make unduly burdensome the consummation of any of
the transactions provided for in this Agreement.
(j) Except for changes in the ordinary course of business, the Company has
good and marketable title to all of its properties and assets (including the
properties and assets reflected in the Balance Sheet but except any property or
assets since disposed of for value in the ordinary course of business) and none
of such properties or assets is subject to a contract of sale (except inventory
held for sale in the ordinary course of business) or subject to security
interests, mortgages, encumbrances, liens, or charges of any kind or character;
substantially all inventory now on hand is in good condition, is not obsolete,
and is presently usable or salable in the ordinary course of business of the
respective corporations; substantially all fixed assets, plant, and equipment of
the Company reflected in the Balance Sheet are in good operating condition and
repair and their use in their business is in compliance with all applicable laws
or governmental regulations, including (without limitation) zoning, use, or air
pollution laws or regulations.
(k) The Company or its respective indicated subsidiary owns the patents,
patent applications, inventions, disclosures, copyrights, trademarks, trade
names, and licenses described in Exhibit 3 to this Agreement. Except to the
extent, if any, set forth in Exhibit 3, those patents, patent applications,
inventions, disclosures, copyrights, trademarks, trade names, and licenses are
valid and in good standing, are subject to no liens or charges (other than, in
the case of licenses or rights acquired from others, payments of royalties or
license fees as set forth or referred to in Exhibit 3) and to the best of
Company's knowledge are adequate and sufficient to permit the Company, to
conduct its businesses as presently being conducted. No rights under any other
patents, inventions, copyrights, trademarks, trade names, or licenses are
currently required by the Company in connection with its present conduct of
business. The Company has full right to use its corporate name in
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Canada and any other place where it does business. The Company has not received
any notice of or knows of any conflict or claimed conflict with respect to the
rights of others to the use of its corporate name or, except to the extent, if
any, set forth in Exhibit 3, any such patent applications, inventions,
disclosures, copyrights, trademarks, trade names or licenses or know-how trade
secrets or techniques it uses. All manufacturing and engineering drawings or
prints and all process sheets, parts lists, and other data which pertain to the
products manufactured or sold by the Company are in reproducible form and of
such quality that Buyer can produce, manufacture, and assemble these products
so that they meet the specifications applicable to them. All experimental
processes and experimental procedures, if any, used by the Company are
understandably described in writings or drawings belonging to and in the
possession of the Company. To the best of Company's knowledge, substantially
all trade secrets owned or used by the Company are owned by it free of any
adverse claims, rights, or encumbrances as to the Company's exclusive rights to
them. The Company will take such steps as requested by Buyer at or after the
closing to insure disclosure of such trade secrets to and only to persons
designated by Buyer.
(l) The officers and directors of the Company are and except to the
extent; if any, that Buyer shall be notified of changes, will be at the closing
date, as set forth in Exhibit 4 to this Agreement.
Exhibits 2 and 4 together also show: the names of all persons whose
compensation from the Company for the fiscal year ending December 31, 2000, (at
their present or presently anticipated rates, including bonuses) will equal or
exceed US$80,000, together with a statement of the full amount paid or payable
to each such person and the basis of payment (e.g., salary, bonus, stock
appreciation rights, commissions, etc.); the name of each bank, trust company,
or savings institution in which the Company has an account or safe deposit box
and the names and identification of all persons authorized to draw on or to
have access to any such account or safety deposit box; the names of all
persons, if any, holding powers of attorney from the Company and a summary
statement of the terms of each; and a list of all insurance policies owned by
the Company, with a brief statement of the coverage of each.
(m) Exhibit 5 to this Agreement contains a list of all real property
owned by the Company or in which the Company has a leasehold or other interest.
Exhibit 5 also contains a substantially accurate legal description of all real
property.
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(n) To the best of the knowledge of the Shareholders (after reasonable
investigation) there is no development or threatened development (relating
particularly to the business of the Company as contrasted with matters relating
to its industry or of a regional or national or international character) of a
nature that would be materially adverse to its business.
(o) To the best of Company's knowledge, no representation or warranty by
Shareholders in this Section 2 or in any other section of this Agreement, or in
any certificate or other document furnished or to be furnished by Shareholders
pursuant to this Agreement, contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements that are made not misleading or necessary in order to provide
Buyer with complete and accurate information as to the Company.
(p) The Shares referred to in subparagraph (a) of Section 1 are owned by
Shareholders free and clear of all liens, encumbrances, charges, and assessments
and such shares are subject to no restrictions with respect to transferability
to Buyer in accordance with the terms of this Agreement.
(q) Upon transfer of the Shares to Buyer by Shareholders, Buyer will, as a
result, receive good and marketable title, free and clear of all liens,
encumbrances, claims, charges, assessments, and restrictions, to all of the
Shares.
(r) The Company has not incurred any accumulated funding deficiency within
the meaning of the Employee Retirement Income Security Act of 1974 ["ERISA"] or
any liability to the Pension Benefit Guaranty Corporation established under
ERISA in connection with any employee benefit plan established or maintained by
the Company, or any equivalent law under the laws of Canada.
3. Representations, Warranties and Agreements of Buyer.
(a) Buyer is a California corporation that has been validly incorporated
and is now and at the closing date will be validly existing, in good standing
under the laws of the State of California with an authorized capital stock of
250 million shares of common stock, without par value.
(b) The execution, delivery, and performance of this Agreement by Buyer
will be duly authorized by all requisite corporate action prior to closing;
(c) The parties agree that it is the intention of Company and Buyer to
retain existing bank lines of credit and other financial relationships; and
Buyer shall indemnify all individuals who have personally guaranteed loans, or
other such obligations, of Company.
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4. Access of Properties.
Shareholders agree to insure that Buyer, by representatives designated by
Buyer, shall have the right to examine the properties, books, and accounts of
the Company at any time prior to the date of closing during business hours and
that Buyer shall have the right at any time on or before the date of closing to
terminate this Agreement without liability to Buyer if Buyer determines that
the condition of the Company as of the date of the Balance Sheet and its
results of operations for the five (5) years and three (3) months then ended
were not substantially as represented in the Financial Statements referred to
above, or if any of the representations or warranties of Shareholders contained
in this Agreement are incorrect in any material respect.
5. The Closing.
(a) The transfer of the Company Stock and the transfer (or issuance) of
the common stock of Buyer by Buyer shall be effected as provided in this
Agreement on the date of closing specified below (the "closing"). Time shall be
of the essence and delivery of certificates for all of the Shares at the time
and place provided in this Agreement is a condition of Buyer's obligation, and
delivery of the certificates for all of the shares of Buyer Stock to be issued
under this Agreement at the closing at such time and place is a condition of
Shareholders' obligations.
(b) At the closing Shareholders shall deliver or cause to be delivered
to Buyer certificates evidencing the Shares. The certificates evidencing the
Shares so delivered shall be properly endorsed for transfer or accompanied by
duly executed stock powers, in either case executed in blank or in favor of
Buyer as Buyer may have directed prior to the closing. Concurrently with the
delivery of the Shares, Buyer shall deliver certificates to Shareholders
evidencing the shares of Buyer Stock to be issued under this Agreement duly
registered in the name of the respective Shareholders. Shareholders agree to
pay any taxes payable in connection with the transfer by Shareholders to Buyer
of the Shares, and all costs and expenses of the performance of and compliance
with all agreements and conditions contained in this Agreement to be performed
or complied with by Shareholders. Save and except for the Shareholder's legal
costs in connection with this transaction shall be paid by the Company.
(c) At closing the Buyer shall deliver to the Shareholders a legal
opinion from counsel for the Buyer, in form and substance satisfactory to the
Shareholders, dated the date of closing to the effect that all shares of the
Buyer issued and delivered to the Shareholders have been duly and validly
authorized and issued and are fully paid, non-assessable.
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(d) The closing shall take place at a place and on a date mutually agreed
by Buyer and the Shareholders not later than April 20, 2001. The place of the
closing may be changed by mutual agreement between Buyer and Shareholders. The
date and hour of closing is sometimes referred in this Agreement to as the
"date of closing" or the "closing."
(e) The shares of Buyer stock to be transferred to Shareholders pursuant
to this agreement have not been approved or disapproved by the securities and
exchange commission or any state or federal governmental agency, nor has any
such agency passed upon the accuracy of any representation made in connection
with the sale of such securities.
(f) The Certificate of the Buyer Stock to be issued to the Shareholders
hereunder shall bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR THE
PURCHASER'S OWN ACCOUNT AND NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION
WITH, ANY DISTRIBUTION THEREOF. NO SALE OR OTHER DISPOSITION OF SUCH SECURITIES
MAY BE EFFECTED WITHOUT THE (1) REGISTRATION OF SUCH SALE OR DISPOSITION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND (2) QUALIFICATION OF SUCH SALE OR
DISPOSITION UNDER THE CALIFORNIA CORPORATE SECURITIES LAW OF 1968, AS AMENDED,
OR AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED."
6. Conditions of Buyer's Obligations.
(a) Buyer's obligations under this Agreement are subject to the accuracy
in all material respects at and as if made at the date of closing of the
representations and warranties made by the Company in this Agreement and
fulfillment to the date of closing of its agreements contained in this
Agreement and to the following additional conditions:
Buyer shall have the right at Buyer's election and expense to
instruct accountants of its choice to make a limited review and/or a full
examination as of a reasonable date prior to the closing of the financial
statements of the Company and/or to restate those financial statements through
the latest practicable date on the basis of a fiscal year ending December 31,
2000. If Buyer elects to request a full examination, it shall be carried out in
accordance with generally accepted auditing standards and Buyer's obligations
under this Agreement are further expressly conditioned upon the report of such
accountants being delivered to Buyer stating in substance that in their opinion
the audited financial statements examined by them fairly set forth in all
material respects the financial condition, results of operations, and changes
in shareholders' equity and changes in financial position or cash flow of the
Company as of the dates of those audited financial statements
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and the periods they cover in accordance with generally accepted accounting
principles consistently applied. Buyer's obligations under this Agreement are
also expressly conditioned upon Buyer's not obtaining as a result of any such
limited review or full examination or restatement of financial statements or
from the monthly financial statements to be supplied to Buyer as provided in
this Agreement or from other sources deemed by Buyer to be reliable any
information which Buyer interprets as: casting doubt in a material respect upon
the accuracy or fairness of presentation of the Financial Statements; or
indicating the occurrence of a material adverse change since the date of the
Financial Statements in the financial condition, business or affairs of the
Company; or indicating a significant variance since December 31, 1999 from
previous trends or conditions in the period ended that date as to costs (or
labor or other services, material or sales), backlog, sales volume, sales mix,
sales pricing, profit margins, products and rights to manufacture and sell
products, customers, continuing ability to affect sales as in the past or any
other significant aspect of the business of the Company; or indicating that such
restated financial statements of the Company do not present a financial
condition as of the closest practicable date to the date of closing and results
of operations through that date at least as good as those presented by the
Financial Statements.
(b) Buyer shall have received from Xxxxx X. Xxxxx, Q.C., counsel for
Shareholders in rendering the opinion, an opinion in form and substance
satisfactory to Buyer dated the date of closing to the effect that (i) the
Company has been duly incorporated and is validly existing, in good standing,
under the laws of its country of incorporation and of any other jurisdiction
where it does business, and as of such date, has all requisite corporate power
and authority to own its properties and carry on its business as conducted on
the date of the closing; (ii) the Company has an authorized and outstanding
capital stock as set forth in subparagraph (b) of Section 2 of this Agreement
and all shares of its outstanding capital stock have been duly and validly
authorized and issued and are fully paid and nonassessable; (iii) each
Shareholder is the registered owner of the respective Shares to be sold by that
Shareholder under this Agreement and when certificates representing the Shares
shall have been duly delivered to Buyer by Shareholders, as provided in this
Agreement, that delivery will transfer to Buyer good title to the Shares free
and clear of all liens, encumbrances, and claims whatsoever (in rendering the
opinion counsel may assume that Buyer will not have, at the date of closing,
notice of any adverse claim respecting the Shares), and these shares constitute
all the outstanding capital stock of the Company; (iv) this Agreement has been
duly executed by Shareholders and is valid and validly executed as to
Shareholders; the execution and consummation of the Agreement will not violate
or result in a breach of or the laws of Canada, the Articles of Incorporation
or Bylaws of the Company or any of the terms of any indenture, mortgage, deed
of trust, or other agreement,
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instrument, or understanding to which the Company or any Shareholder is a party
or by which it or any Shareholder is or may be bound, or constitute a default
under any of those agreements, instruments, or understandings, or result in the
creation or imposition of any lien, charge, or encumbrance, or give to others
any interest or right in any of the properties or other assets of the Company
or in the Shares; (v) except as may be set forth in Exhibit 2 to this Agreement
counsel for Shareholders does not know (after reasonable investigation) of any
litigation, proceedings, or governmental investigation or labor dispute pending
or threatened against or relating to the Company or its properties or businesses
or the transactions contemplated by this Agreement. Counsel for Shareholders may
rely as to matters of fact upon certificates of responsible officers of the
Company if such facts fall within the area of responsibility of the certifying
officer, or of the Shareholders.
(c) There shall have been no material adverse change since the date of
the Balance Sheet in the financial condition of affairs of the Company and it
shall not have suffered any loss (whether or not insured) by reason of physical
damage caused by fire, earthquake, accident, or other calamity which
substantially affects the value of its properties or business, and Buyer shall
have received certificates of the President and the Secretary of the Company
dated the date of closing to that effect.
7. Conditions of Shareholders' Obligations.
The Company's obligations and the Shareholders' obligations under this
Agreement are subject to the accuracy in all material respects at and as if
made at the date of closing of the representations and warranties contained in
this Agreement on the part of Buyer and the fulfillment to date of closing of
Buyer's agreements contained in this Agreement.
8. Satisfaction of Conditions Precedent.
Each party agrees to use its best efforts to cause the conditions to its
obligations set forth above to be satisfied at or prior to the closing.
9. Additional Agreements of Shareholders.
Upon the closing of this Agreement, each Shareholder agrees to refrain
anywhere in the world from carrying on directly or indirectly (either as a
proprietor, partner, Shareholders, officer, director, agent, employee,
consultant, trustee, affiliate, or otherwise) a business of the type conducted
by the Company on the date of closing or the business of manufacturing or
selling products that are or would be competitive with products presently
manufactured or sold or offered for sale by the Company, including the business
of manufacturing and distributing an integrated weather station, test
equipment, monitoring and control instrumentation; except as
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officers, employees, or representatives of Buyer or a subsidiary or affiliate
of Buyer, for a period of two (2) years from the date such Shareholder ceases
to be employed by Buyer or a subsidiary or affiliate thereof. Each Shareholder
agrees that the business of Buyer and the Company is worldwide in scope and the
foregoing limitation is reasonable as to scope in light of the business of
Buyer and the Company. Notwithstanding the foregoing, it shall not be a breach
of the provisions of this paragraph for any Shareholder to own, as a passive
investment, not more than 5 percent of the outstanding stock of a publicly held
company engaged in any of the above activities.
Each Shareholder covenants and represents that such Shareholder has no
interest in, or claim to any of the inventions, formulae, methods, processes,
or technical information used in the business or operations or in the current
possession of the Company, and all knowledge or information of a confidential
nature acquired at or before the date of this Agreement with respect to the
business and operations of the Company or any of its predecessors and all
knowledge or information of a confidential nature acquired after the date of
this Agreement about the business and operations of the Company or its
successors, will be held in confidence by the Shareholder, and will not be
disclosed or made public or made use of by or through Shareholder, directly or
indirectly.
10. Conduct of Business Pending Closing.
From and after the date of this Agreement, and prior to the date of
closing, the business of the Company shall be conducted in the ordinary course
of business, and none of the assets or properties of the Company shall be sold
or disposed of except in the ordinary course of business or except with the
written consent of Buyer; and no commitments, bids, or binding offers shall be
made, and no contract shall be entered into, which would require the
expenditure of money or the acquisition of assets or the performance of
services over a period of more than one year or otherwise than in the ordinary
course of business except with the consent of Buyer; it being understood that
any agreement or series of agreements with an obligation of less than
CAN$10,000 shall be considered to be in the ordinary course of business for the
purpose of this paragraph. Promptly after the execution of this Agreement,
Shareholders shall deliver to Buyer a balance sheet and a statement of income
of the Company for each month ended since the date of the latest balance sheet
in the Financial Statements and for the same month(s) in the prior year, in
each case in reasonable detail, showing its financial condition at the end of
those months and the results of its operations for those months. After the
execution of this Agreement until and including the date of closing
Shareholders shall deliver to Buyer on or before the tenth of each month a
similar balance sheet
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and statement of income for the Company for the previous month and the same
month in the prior year.
11. Fees or Commissions of Brokers.
Each Shareholder represents to Buyer that such Shareholder has not dealt
with any broker or finder in this transaction and agrees to indemnify Buyer
against any loss, cost, or expense, including attorneys' fees, as a result of
any claim for a fee or commission asserted by any broker or finder claiming
against or through Shareholder with respect to this Agreement or its
consummation. Buyer represents to each Shareholder that Buyer has not dealt
with any broker or finder in this transaction and agrees to indemnify each
Shareholder against any loss, cost, or expense, including attorneys' fees, as a
result of any claim for a fee or commission asserted by any broker or finder
claiming against or through Buyer with respect to this Agreement or its
consummation. Save and except for Xxxxxxx Toll who is entitled to 10,000 common
shares of the Buyer with 5,000 common shares coming from the Shareholders and
5,000 common shares coming from the Buyer.
12. Assignment of Patents, etc.
Each Shareholder agrees to assign to Buyer or its designee all patents,
patent applications, inventions, disclosures, written technical data,
copyrights, formulae, manufacturing methods, trade secrets and trademarks and
trade names, if any, owned by that Shareholder or under which Shareholder
claims any rights and relating to any products of or processes used by the
Company or relating to its business. If and to the extent any corporation,
firm, or person controlled by or affiliated with that Shareholder owns or has
rights in any of the foregoing, that Shareholder agrees to cause such
corporations or persons to assign all such rights to Buyer or the Company
without additional consideration being paid for those rights by Buyer or
Company.
13. Indemnification by Shareholders.
Shareholders jointly and severally agree to indemnify and hold Buyer and
the Company harmless against, and will reimburse Buyer (or the Company if Buyer
so requests) on demand for any payment (and any expenses, including attorneys'
fees and costs of investigation, incurred in defending against such payment or
any claim for such payment) made by the Company at any time after the date of
the Balance Sheet or by Buyer at any time after the date of closing, in respect
of:
(a) Any and all liabilities of the Company of any nature,
whether accrued, absolute, contingent, or otherwise existing at the
date of the Financial Statements, to the extent not reflected or
reserved against
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in the Financial Statements, or disclosed on Exhibits to this
Agreement.
(b) Any and all liabilities of or claims against the Company
arising out of (i) the conduct of the business of the Company between
the date of the Financial Statements and the date of closing,
otherwise than in the ordinary course of business of the Company or
as disclosed in any Exhibit to this Agreement; (ii) any presently
existing obligation, commitment, or liability of the character
described in clause (ii) of Section 2(e) of this agreement and not
listed in one or more exhibits to this Agreement; and (iii) any
contract or commitment entered into or made or any obligation or
liability incurred by the Company between the date of this Agreement
and the date of closing.
(c) Any and all damage or deficiency resulting from any
misrepresentations, breach of warranty, or nonfulfillment of any
agreement on the part of a Shareholder under this Agreement, or from
any misrepresentation in, or omission from, any certificate or other
instrument furnished or to be furnished to Buyer pursuant to the
Agreement.
14. Notices.
Any notices under this Agreement shall be deemed sufficiently given by one
party to another if in writing and if and when delivered or tendered either in
person or by depositing it in the United States or Canadian mail in a sealed
envelope registered or certified, with postage and postal charges prepaid,
addressed as follows:
If to Buyer:
InterGlobal Waste Management, Inc.
000 Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
If to Shareholders:
c/o XXXXX X. XXXXX, Q.C.
00 Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxx XXXXXX X0X 0X0
Attention: Xxxxx X. Xxxxx, Q.C.
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If to Hydra-Static:
000 Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxx, Xxxxxx X0X0X0
or to such other address as the party addressed shall have previously
designated by notice to the serving party, given in accordance with this
paragraph; provided, that a notice not given as above shall, if it is in
writing, be deemed given if and when actually received by the party to whom it
is required or permitted to be given.
15. Miscellaneous.
(a) This Agreement shall be binding upon and shall inure to the benefit of
Shareholders and their respective heirs, executors, administrators, and assigns
and of the Buyer and its successors and assigns.
(b) This Agreement shall be governed by and construed in accordance with
the laws of the State of California, except that the provisions of Section 9 of
this Agreement shall be governed as to any conduct prohibited by Section 9 by
the laws of the country or state in which such prohibited conduct occurs.
(c) All of the terms, conditions, warranties, and representations contained
in this Agreement shall survive delivery by Buyer of the consideration to be
given by it under this Agreement and delivery by Shareholders of the
consideration to be given by them under the Agreement, shall survive the date of
closing, and shall survive and continue notwithstanding any investigations by or
on behalf of Buyer at any time.
(d) This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same instrument.
(e) Consent to Jurisdiction. Each of the Shareholders and the Buyer, by its
or his execution hereof, (i) hereby irrevocably submits to the exclusive
jurisdiction of the state and Federal courts located within Los Angeles County,
State of California for the purpose of any claim or action arising out of or
based upon this Agreement or relating to the subject matter hereof, (ii) hereby
waives, to the extent not prohibited by applicable law, and agrees not to assert
by way of motion, as a defense or otherwise, in any such claim or action, any
claim that is not subject personally to the jurisdiction of the above-named
courts, that its or his property is exempt or immune from attachment or
execution, that any such proceeding brought in the above-named court is
improper, or that this Agreement or the subject matter hereof may not be
enforced in or by such court, and (iii) hereby agrees not to
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commence any claim or action arising out of or based upon this Agreement or
relating to the subject matter hereof other than before the above-named courts
nor to make any motion or take any other action seeking or intending to cause
the transfer or removal of any such claim or action to any court other than the
above-named courts whether on the grounds of inconvenient forum or
otherwise. Each of the Shareholders and the Buyer hereby consents to service of
process in any such proceeding in any manner permitted by California law, and
agrees that service of process by registered or certified mail, return receipt
requested, at its address specified pursuant to Paragraph 14 hereof is
reasonably calculated to give actual notice.
(f) WAIVER OF RIGHT TO JURY TRIAL. EACH OF THE SHAREHOLDERS AND THE BUYER,
BY ITS OR HIS EXECUTION HEREOF, WAIVES ITS OR HIS RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
TRANSACTION AND THE RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT,
INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE SHAREHOLDERS AND THE
BUYER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING
INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR
RELATED FUTURE DEALINGS. THE SHAREHOLDERS AND THE BUYER FURTHER WARRANT AND
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS OR HIS, AS THE CASE MAY
BE, LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS OR HIS, AS
THE CASE MAY BE, JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
THIS WAIVER IS IRREVOCABLE, MEANING THAT IT SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTION CONTEMPLATED HEREBY.
IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO
A TRIAL BY THE COURT.
(g) Arbitration of Disputes. Any dispute between the parties hereto,
whether arising out of contract, tort or otherwise, or law, equity or
otherwise, shall be submitted to binding arbitration before the American
Arbitration Association in the State of California, under the rules relating to
commercial arbitrations. Each party to any such dispute shall be entitled to
serve one set of pre-arbitration requests for
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production of documents, containing not more than ten categories of documents to
be produced, which shall be described with particularity therein, and shall be
entitled to notice and take no more than two pre-arbitration depositions. Any
disputes relating to such pre-arbitration discovery shall be submitted to the
arbitrator.
INTERGLOBAL WASTE MANAGEMENT, INC.
By:
----------------------------------------
HYDRA-STATIC SYSTEMS INC.
By:
----------------------------------------
Xxxxxx X. Xxxxxx, Chairman & C.E.O.
---------------------------------- ---------------------------------
XXXXXX X. XXXXXXXX XXXXXXX XXXXXX
/s/ XXXXXX XXXXXXX
---------------------------------- ---------------------------------
XXXXXX XXXXXXX XXXXXX X. XXXXXX
----------------------------------
XXXXXXX XXXXXX
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INDEX TO EXHIBITS
Exhibit 1 Corporations whose capital Stock is wholly
or majority owned by Hydra-Static
Exhibit 2 Exceptions to Exhibit 1 and representations
and warranties contained in Section 2
Exhibit 3 Patents, patent applications, inventions,
disclosures, copyrights, trademarks, trade
names, and licenses owned by the
Company and exceptions thereto
Exhibit 4 Officers and Directors of the Company, and
employees with certain levels of
compensation
Exhibit 5 Description of real property leased or
owned by the Company
Exhibit 6 Form of employment agreements with
_________, _________, ________.
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EXHIBIT 1
WHOLLY OR PARTIALLY OWNED SUBSIDIARY CORPORATIONS
NONE
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EXHIBIT 2
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EXHIBIT 3
PATENTS
Patent US application N. 09/584,365 as supplied during due diligence
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EXHIBIT 4
OFFICERS AND DIRECTORS
OFFICERS
Xxxxxx X. Xxxxxx - Chairman & C.E.O.
Xxxxxx X. Xxxxxxxx - President & C.O.O.
Xxxxxxx Xxxxxx - Secretary/Treasurer
DIRECTORS
Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxxxx Xxxxxx
Xxxxxx X. Xxxxxxx
COMPENSATION (ANNUAL)
Xxxxxx X. Xxxxxx $120,000.00 (Canadian funds) plus expenses
Xxxxxx X. Xxxxxxxx $100,000.00 (Canadian funds) plus expenses
M. A. Xxxxxxx $75,000.00 (Canadian funds) plus expenses
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EXHIBIT 5
REAL PROPERTY
Sub-Lease at 000 Xxxxxxxx Xxxx, Xxxxxx, Xxxxxxx as supplied in due
diligence documents.
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EXHIBIT 6
EMPLOYMENT AGREEMENTS
Employment agreements and or contracts as supplied in due diligence
documents.
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