STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and entered into as of
the 1st day of September 2009 by United Capitalists, Inc. dba: Leverage
Alternative Solutions ("UCI") a California Corporation (UCI/LAS) mailing address
of 00000 Xxxxxx Xxxxx, Xxxxxxxxxxx, XX 00000xxx Xxxxx Xxxxx (MP) an Individual
who owns 100% of UCI (Seller of LAS) and Environmental Service Professionals,
Inc., a Nevada corporation (the "Buyer" or "Company"), with respect to the
following facts:
R E C I T A L S
A. Seller's own 100% of the total issued and outstanding capital
stock of UCI and LAS.
B. LAS are owned by United Capitalists, Inc. (UCI), as to 100% of
the outstanding shares. LAS. UCI is currently listed as a
California Corporation and Leverage core initiatives are to
bring about economic development through green industries and
be advocates for energy efficiency and environmental
responsibility. Leverage provides strategies and the full
implementation of workforce development training centers for
green jobs to come, understanding that without a local trained
workforce economic development for the region is not possible.
Leverage proactively works to promote job creation by bringing
together private and public stakeholders and collaborating to
develop methodologies for utilizing local resources and
attracting outside green businesses for the ultimate purpose
of green job creation. UCI is a unique business as to the
relationship with local Cities and County Governments and
strong relationships with National Unions. ("UCI Business").
MP is hereafter referenced as the "UCI/LAS Shareholder"
C. The Company desires to acquire from Seller and Seller desires
to sell to the Company 100% of the total issued and
outstanding stock of UCI in exchange for 1,000,000 shares of
the Company's common stock plus $ 300,000.00 in cash, payable
on the Closing of the purchase under this Agreement, as
defined in Section 2.1 of this Agreement.
D. This Stock Purchase Agreement (SPA) shall replace and
supersede the Term Sheet dated August 1, 2009 between the
Seller (UCI, LAS and MP) and the Buyer (ESP).
NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged by the parties to this Agreement,
and in light of the above recital to this Agreement, the parties to this
Agreement hereby agree as follows:
1. SALE AND PURCHASE
1.1 SALE AND PURCHASE OF STOCK. In consideration for the Purchase Price
(as defined in Section 1.2 of this Agreement) and the other covenants of the
Company in this Agreement, Seller agrees to sell to the Buyer, and the Buyer
agrees to purchase from Seller, on the Closing Date (as defined in Section 4.1
of this Agreement) and agrees to purchase from the Seller (UCI and MP) 200
shares of the common stock of UCI.
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1.2 PURCHASE PRICE. As consideration for the sale by Seller of the
shares of UCI Stock to the Company on the Closing Date, the Company will pay to
Seller the following (the "Purchase Price"): (i) $300,000 dollars in cash (the
"Cash Payment"), payable as provided in Section 1.2(a) of this Agreement, and
(ii) 1,000,000 shares (the "Shares") of the Company's common stock (the "Stock
Payment"), issuable as provided in Section 1.2(b) of this Agreement and As
consideration for the sale by Seller(s) of the shares of UCI Stock to the
Company on the Closing Date, the Company will pay to Seller(s) the following
(the "Purchase Price"): (i) $300,000 dollars in cash (the "Cash Payment"),
payable as provided in Section 1.2(a) of this Agreement, and (ii) 1,000,000
shares (the "Shares") of the Company's common stock (the "Stock Payment"),
issuable as provided in Section 1.2(b) of this Agreement The certificates
evidencing the Shares will bear the following legend:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED
UNDER THAT ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE."
(a) CASH PAYMENT. The Buyer will pay to the Seller(s) a total cash
payment of $300,000 payable subject to the terms and
conditions of this Agreement. The Cash Payment will be made to
MP.
i. $300,000 upon Closing to MP
(b) COMPANY SHARES. Seller will be issued a total of 1,000,000
Shares of the Company's common stock as part of the Purchase
Price, subject to the terms and conditions of this Agreement.
The Stock Payment will be made out to Xxxxx Xxxxx.
i. 1,000,000 shares upon Closing issued to MP
(c) COMPANY WARRANTS. Seller(s) will be issued a total of
1,000,000 Warrants of the Company's warrants at $ 0.25 per
share as part of the Purchase Price, subject to the terms and
conditions of this Agreement. The warrants Payment will be
made in the name of Xxxxx Xxxxx
i. 1,000,000 Warrants at $0.25 per share upon Closing
issued to MP
(c) HOLDING PERIOD AND PIGGYBACK REGISTRATION RIGHTS. All Shares
of the Company's common stock issued to Seller by the Company
under this Agreement shall be held by Seller for a period of
at least one year from the date of Closing and the warrants
will have piggyback registration rights with respect to the
Shares and warrants, subject to potential adjustment by the
underwriter for such registration statement, if any.
Accordingly, the Company agrees to notify the Seller in
writing at least ten days prior to the filing of any
registration statement by it under Section 5 of the Securities
Act of 1933, as amended, on Form X-0, XX-0 or S-3, and to
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include all of Seller's Shares that are requested by them in
writing for inclusion in the registration statement, subject
to the underwriter's (if any) reasonable approval.
(d) REPURCHASE OF SHARES. There is no provision made in this
Agreement for the right to cause a sale of any portion of the
Shares back to Buyer.
2. COVENANT NOT TO COMPETE.
As an inducement to Buyer to enter into and to perform its obligations
under this Agreement, MP and UCI covenant to enter into a non-compete agreement
with the Buyer on or before the Closing Date pursuant to which MP will agree
that for a period of the longer of (i) 12 months from the Closing Date or (ii)
12 months from the date of termination of respective employment with the Company
referenced in Section 3 of this Agreement, and in any event while MP and UCI are
employees, officers, directors, or consultants of the Buyer or any of its
affiliates, they will not directly or indirectly, whether (a) as employees,
agents, consultants, employers, principal, partners, officers or directors; (b)
holders of more than five percent of any class of equity securities or more than
five percent of the aggregate principal amount of any class of equity securities
or more than five percent of the aggregate principal amount of any class of
debt, notes or bonds of a company with publicly traded equity securities; or (c)
in any other individual or representative capacities whatsoever, in each case
for their own account or the account of any other person or entity, engage in
any business or trade competing with the then business or trade of the Buyer or
its affiliates in the United States (the "Non-Compete Agreement"). MP and UCI
acknowledge that the restrictions set forth in this Section 2 are fair and
reasonable with respect to their duration, scope and area. If, at the time of
enforcement of this Section 2, a court holds that the duration, scope or area
restrictions stated herein are unreasonable under circumstances then existing,
the parties agree that the maximum duration, scope or area reasonable under such
circumstances will be substituted for the stated duration, scope or area. In the
event of any breach of any provisions of this Section 2, Buyer will have the
right, in addition to any other rights and remedies existing in its favor
hereunder, to enforce its rights and the obligations MP under this Section 2 not
only by an action or actions for damages but also by an action or actions for
specific performance and/or injunctive or other equitable relief in order to
enforce or prevent any violations of the provisions of this Section 2.
3. EMPLOYMENT.
3.1. TRANSITION PERIOD. MP shall be hired as the Chief Operations
Officer of ESP, Inc. with the following conditions:
3.1.1. MP shall report to the CEO of ESP for all directions and
instructions.
3.1.2. MP shall be paid a salary of $ 10,000.00 per month and shall
(beginning September 1, 2009) l be identified on the ESP
payroll. The payroll cycles are based on semi-monthly basis
and will be paid through the TriNet Human Resources system.
3.1.3. All staff for UCI shall be housed at the corporate offices of
ESP located in Palm Springs California.
3.1.4. The employment shall be an "at will" bases and will be
reviewed on an annual basis for increases and bonuses.
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4. UCI CLOSING AND FURTHER ACTS.
4.1 TIME AND PLACE OF CLOSING. Upon satisfaction or waiver of the
conditions set forth in Section 8 of this Agreement, the closing of the
transactions contemplated by this Agreement (the "Closing") will take place at
000 X. Xxxxxxx Xxxxx, Xxxx Xxxxxxx, Xxxxxxxxxx 00000 at 11:00 a.m. (local time)
on the date that the parties may mutually agree in writing, but in no event
later than September 30, 2009 (the "Closing Date"), unless extended by mutual
written agreement of the parties.
4.2 ACTIONS AT CLOSING. At the Closing, the following actions will take
place:
(a) Buyer will pay to Seller the Cash Payment and Stock
Payment of the Purchase Price pursuant to the distribution described in
Section 1.2 of this Agreement by delivery of (i) the appropriate amount
of cash or cash equivalent which will be deposited in a single account
designated by Seller in a writing delivered to the Buyer prior to the
Closing, and (ii) stock certificates evidencing the Stock Payment.
(b) Seller will tender to the Company certificates and any
other documents (Including ALL historical records- up to the closing
date) evidencing the UCI Stock.
(c) UCI will deliver to Buyer copies of necessary resolutions
of the Board of Directors of UCI authorizing the execution, delivery,
and performance of this Agreement and the other agreements contemplated
by this Agreement for UCI execution, and consummation of the
transactions contemplated by this Agreement, which resolutions have
been certified by an officer of UCI as being valid and in full force
and effect.
(d) Buyer will deliver to UCI copies of corporate resolutions
of the Board of Directors of Buyer authorizing the execution, delivery
and performance of this Agreement and the other agreements contemplated
by this Agreement for Buyer's execution, if any, and consummation of
the transactions contemplateD by this Agreement, which resolutions have
been certified by an officer of Buyer as being valid and in full force
and effect.
(e) UCI will deliver to the Buyer true and complete copies of
UCI' Certificate of Incorporation and a Certificate of Good Standing
from the appropriate official of UCI' jurisdiction of incorporation,
which certificates and certificates of good standing are dated not more
than 30 days prior to the Closing Date.
(g) Any additional documents or instruments as a party may
reasonably request or as may be necessary to evidence and affect the
sale, assignment, transfer and delivery of the UCI Stock to the Buyer.
4.3 ACTIONS POST CLOSING. Post Closing Buyer will perform the following
actions:
(a) All management oversight of UCI.
(b) All UCI funding requirements, including but not limited to
supplying short-term capital needs should cash flow shortages
arise.
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(c) All legal issues.
(d) Receive all records and Documents for review by the Buyer.
(e) Indemnify and hold UCI and its shareholders harmless
therefore.
5. REPRESENTATIONS AND WARRANTIES OF UCI, AND MP.
UCI and MP represent and warrant to Buyer as follows:
5.1 POWER AND AUTHORITY; BINDING NATURE OF AGREEMENT. UCI and MP have
full power and authority to enter into this Agreement and to perform their
obligations hereunder. The execution, delivery, and performance of this
Agreement by UCI have been duly authorized by all necessary action on its part.
Assuming that this Agreement is a valid and binding obligation of each of the
other parties hereto, this Agreement is a valid and binding obligation of UCI,
and MP.
5.2 SUBSIDIARIES. There is no corporation, general partnership limited
partnership, joint venture, association, trust or other entity or organization
that UCI directly or indirectly control or in which UCI directly or indirectly
owns any equity or other interest.
5.3 GOOD STANDING. UCI (i) is duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it is incorporated,
(ii) has all necessary power and authority to own its assets and to conduct its
business as it is currently being conducted, and (iii) is duly qualified or
licensed to do business and is in good standing in every jurisdiction (both
domestic and foreign) where such qualification or licensing is required.
5.4 CHARTER DOCUMENTS AND CORPORATE RECORDS. UCI has delivered to Buyer
complete and correct copies or provided Buyer with the right to inspect true and
complete copies of all (i) the articles of incorporation, bylaws and other
charter or organizational documents of UCI, including all amendments thereto,
(ii) the stock records of UCI, and (iii) the minutes and other records of the
meetings and other proceedings of the shareholders and directors of UCI. UCI is
not in violation or breach of (i) any of the provisions of its articles of
incorporation, bylaws or other charter or organizational documents, or (ii) any
resolution adopted by its shareholders or directors. There have been no meetings
or other proceedings of the shareholders or directors of UCI that are not fully
reflected in the appropriate minute books or other written records of UCI.
5.5 FINANCIAL STATEMENTS. UCI has delivered to Buyer the following
financial statements relating to UCI prior to the Closing (the " UCI Financial
Statements"): (i) the unaudited balance sheet of UCI as of December 31, 2008 ,
2007and 2006 and the unaudited balance sheet of August 30, 2009, and (ii) the
unaudited statements of income for the years ended December 31, 2008 and 2007
and the unaudited statements of income for the three months ended August 30,
2009 and the unaudited statements of retained earnings and shareholders' equity
as of August 30, 2009. Except as stated therein or in the notes thereto, the UCI
Financial Statements: (a) present fairly the financial position of UCI as of the
respective dates thereof and the results of operations and changes in financial
position of UCI for the respective periods covered thereby; and (b) have been
prepared in accordance with UCI' normal business practices applied on a
consistent basis throughout the periods covered.
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5.6 CAPITALIZATION. The authorized capital stock of UCI consists of 200
shares of common stock for UCI, no par value per share, of which 200shares for
200 shares for UCI are issued and outstanding, and no shares of preferred stock.
All of the outstanding shares of the capital stock of UCI are validly issued,
fully paid and nonassessable, and have been issued in full compliance with all
applicable federal, state, local and foreign securities laws and other laws.
5.7 ABSENCE OF CHANGES. Except as otherwise set forth on Schedule 5.7
hereto or otherwise disclosed to Buyer in writing prior to the Closing, since
September 30, 2009:
(a) There has not been any material adverse change in the
business, condition, assets, operations or prospects of UCI and no
event has occurred or, to UCI' knowledge, is expected to occur after
the Closing that might have a material adverse effect on the business,
condition, assets, operations or prospects of UCI.
(b) UCI has not (i) declared, set aside or paid any dividend
or made any other contribution in respect of any shares of capital
stock, nor (ii) repurchased, redeemed or otherwise reacquired any
shares of capital stock or other securities.
(c) UCI has not sold or otherwise issued any shares of capital
stock or any other securities.
(d) UCI has not amended its articles of incorporation, bylaws
or other charter or organizational documents, nor has it effected or
been a party to any merger, recapitalization, reclassification of
shares, stock split, reverse stock split, reorganization or similar
transaction.
(e) UCI has not formed any subsidiary or contributed any funds
or other assets to any subsidiary.
(f) UCI has not purchased or otherwise acquired any assets,
nor has it leased any assets from any other person, except in the
ordinary course of business consistent with past practice.
(g) UCI has not made any capital expenditure outside the
ordinary course of business or inconsistent with past practice, or in
an amount exceeding five thousand dollars ($5,000) singly or in excess
often thousand dollars ($10,000) in the aggregate, without Buyer's
consent.
(h) UCI has not sold or otherwise transferred any assets to
any other person, except in the ordinary course of business consistent
with past practice and at a price equal to the fair market value of the
assets transferred.
(i) There has not been any loss, damage or destruction to any
of the properties or assets of UCI (whether or not covered by
insurance).
(j) UCI has not written off as uncollectible any indebtedness
or accounts receivable, except for write offs that were made in the
ordinary course of business consistent with past practice and that
involved less than $5,000 singly and less than $10,000 in the
aggregate.
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(k) UCI has not leased any assets to any other person except
in the ordinary course of business consistent with past practice and at
a rental rate equal to the fair rental value of the leased assets.
(l) UCI has not mortgaged, pledged, hypothecated or otherwise
encumbered any assets, except in the ordinary course of business
consistent with past practice.
(m) UCI has not entered into any contract, or incurred any
debt, liability or other obligation (whether absolute, accrued,
contingent or otherwise), except for (i) contracts that were entered
into in the ordinary course of business consistent with past practice
and that have terms of less than six months and do not contemplate
payments by or to UCI which will exceed, over the term of the contract,
ten thousand dollars ($10,000) in the aggregate, and (ii) current
liabilities incurred in the ordinary course of business consistent with
the past practice.
(n) UCI has not made any loan or advance to any other person,
except for advances that have been made to customers in the ordinary
course of business consistent with past practice and that have been
properly reflected as "accounts receivables."
(o) Other than annual raises or bonuses paid or provided
consistent with past business practices, UCI has not paid any bonus to,
or increased the amount of the salary, fringe benefits or other
compensation or remuneration payable to, any of the directors, officers
or employees of UCI.
(p) No contract or other instrument to which UCI is or was a
party or by which UCI or any of its assets are or were bound has been
amended or terminated, except in the ordinary course of business
consistent with past practice.
(q) UCI has not discharged any lien or discharged or paid any
indebtedness, liability or other obligation, except for current
liabilities that (i) are reflected in the UCI Financial Statements as
of August 30, 2009 or have been incurred since August 30, 2009 in the
ordinary course of business consistent with past practice, and (ii)
have been discharged or paid in the ordinary course of business
consistent with past practice.
(r) UCI has not forgiven any debt or otherwise released or
waived any right or claim, except in the ordinary course of business
consistent with past practice.
(s) UCI has not changed its methods of accounting or its
accounting practices in any respect.
(t) UCI has not entered into any transaction outside the
ordinary course of business or inconsistent with past practice.
(u) UCI has not agreed or committed (orally or in writing) to
do any of the things described in clauses (b) through (t) of this
Section 5.7.
5.8 ABSENCE OF UNDISCLOSED LIABILITIES. UCI has no debt, liability or
other obligation of any nature (whether due or to become due and whether
absolute, accrued, contingent or otherwise) that is not reflected or reserved
against in the UCI Financial Statements as of August 30, 2009, except for
obligations incurred since August 30, 2009 in the ordinary and usual course of
business consistent with past practice.
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5.9 UCI ASSETS.
(a) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not result in
a breach of the terms and conditions of, or result in a loss of rights
under, or result in the creation of any lien, charge or encumbrance
upon, any of the assets of the Business.
(b) UCI has good and marketable title to all of its assets,
free and clear of all mortgages, liens, leases, pledges, charges,
encumbrances, equities or claims, except as expressly disclosed in
writing by UCI to Buyer prior to the Closing Date.
(c) UCI' assets are not subject to any material liability,
absolute or contingent, which has not been disclosed by UCI to Buyer in
writing prior to the Closing Date nor is UCI subject to any liability,
absolute or contingent, which has not been disclosed to and
acknowledged by Buyer in writing prior to the Closing Date.
(d) UCI has provided to Buyer in writing an accurate
description of all of the assets of UCI or used in the business of UCI.
(e) UCI has provided to Buyer in writing a list of all
contracts, agreements, licenses, leases, arrangements, commitments and
other undertakings to which UCI is a party or by which it or its
property is bound. Except as specified by UCI to Buyer in writing prior
to the Closing Date, all of such contracts, agreements, leases,
licenses and commitments are valid, binding and in full force and
effect.
5.10 COMPLIANCE WITH LAWS; LICENSES AND PERMITS. UCI is not in
violation of, nor has it failed to conduct its business in full compliance with,
any applicable federal, state, local or foreign laws, regulations, rules,
treaties, rulings, orders, directives or decrees. UCI has delivered to Buyer a
complete and accurate list and provided Buyer with the right to inspect true and
complete copies of all of the licenses, permits, authorizations and franchises
to which UCI is subject and all said licenses, permits, authorizations and
franchises are valid and in full force and effect. Said licenses, permits,
authorizations and franchises constitute all of the licenses, permits,
authorizations and franchises necessary to permit UCI to conduct its business in
the manner in which it is now being conducted, and UCI is not in violation or
breach of any of the terms, requirements or conditions of any of said licenses,
permits, authorizations or franchises.
5.11 TAXES. Except as disclosed herein, UCI has accurately and
completely filed with the appropriate United States state, local and foreign
governmental agencies all tax returns and reports required to be filed (subject
to permitted extensions applicable to such filings), and has paid or accrued in
full all taxes, duties, charges, withholding obligations and other governmental
liabilities as well as any interest, penalties, assessments or deficiencies, if
any, due to, or claimed to be due by, any governmental authority (including
taxes on properties, income, franchises, licenses, sales and payroll). (All such
items are collectively referred to herein as "Taxes"). The UCI Financial
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Statements fully accrue or reserve all current and deferred taxes. UCI is not a
party to any pending action or proceeding, nor is any such action or proceeding
threatened by any governmental authority for the assessment or collection of
Taxes. No liability for taxes has been incurred other than in the ordinary
course of business. There are no liens for Taxes except for liens for property
taxes not yet delinquent. UCI is not a party to any Tax sharing, Tax allocation,
Tax indemnity or statute of limitations extension or waiver agreement and in the
past year has not been included on any consolidated combined or unitary return
with any entity other than UCI. UCI has duly withheld from each payment made to
each person from whom such withholding is required by law the amount of all
Taxes or other sums (including but not limited to United States federal income
taxes, any applicable state or municipal income tax, disability tax,
unemployment insurance contribution and Federal Insurance Contribution Act
taxes) required to be withheld therefore and has paid the same to the proper tax
authorities prior to the due date thereof. To the extent any Taxes withheld by
UCI have not been paid as of the Closing Date because such Taxes were not yet
due, such Taxes will be paid to the proper tax authorities in a timely manner.
All Tax returns filed by the UCI are accurate and comply with and were prepared
in accordance with applicable statutes and regulations.
5.12 ENVIRONMENTAL COMPLIANCE MATTERS. To the best of the knowledge of
UCI, without conducting any study or independent investigation, UCI has at all
relevant times with respect to the Business been in material compliance with all
environmental laws, and has received no potentially responsible party notices or
similar notices from any governmental agencies or private parties concerning
releases or threatened releases of any "hazardous substance" as that term is
defined under 42 U.S.C. 960(1) (14).
5.13 COMPENSATION. Since December 31, 2008, UCI has not paid or
committed to pay to or for the benefit of any of its officers or directors any
compensation of any kind other than wages, salaries and benefits at times and
rates in effect on December 31, 2008. UCI does not have any bonus plan or
obligations with respect to any bonus plan. UCI has provided Buyer with a full
and complete list of all officers, directors, employees and consultants of UCI
as of the date hereof, specifying their names and job designations, their dates
of hire, the total amount paid or payable as wages, salaries or other forms of
direct compensation, and the basis of such compensation, whether fixed or
commission or a combination thereof.
5.14 NO DEFAULT.
(a) Each of the contracts, agreements or other instruments of
UCI and each of the standard Customer Agreements or contracts of UCI is
a legal, binding and enforceable obligation by or against UCI, subject
to the effect of applicable bankruptcy, insolvency, reorganization,
moratorium or other similar federal or state laws affecting the rights
of creditors and the effect or availability of rules of law governing
specific performance, injunctive relief or other equitable remedies
(regardless of whether any such remedy is considered in a proceeding at
law or in equity). No party with whom UCI has an agreement or contract
is in default there under or has breached any terms or provisions
thereof which is material to the conduct of UCI' business.
(b) UCI has performed, or is now performing, the obligations
of, and UCI is not in material default (or would by the late of time
and/or the giving of notice be in material default) in respect of, any
contract, agreement or commitment binding upon it or its assets or
properties and material to the conduct of its Business. No third party
has raised any claim, dispute or controversy with respect to any of the
executed contracts of UCI, nor has UCI received notice of warning of
alleged nonperformance, delay in delivery or other noncompliance by UCI
with respect to its obligations under any of those contracts, nor are
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there any facts which exist indicating that any of those contracts may
be totally or partially terminated or suspended by the other parties
thereto.
5.15 PRODUCT WARRANTIES. Except as otherwise disclosed in writing to
Buyer prior to the Closing and for warranties under applicable law, (a) there
are no warranties, express or implied, written or oral, with respect to the
products of UCI, (b) there are no pending or threatened claims with respect to
any such warranty, and (c) UCI has no, and after the Closing Date, will have no,
liability with respect to any such warranty, whether known or unknown, absolute,
accrued, contingent, or otherwise and whether due or to become due, other than
customary returns in the ordinary course of business that are fully reserved
against in the UCI Financial Statements.
5.16 PROPRIETARY RIGHTS. The Buyer acknowledges that is a lecturer and
publicist, has published numerous books and articles on home inspecting and
plans to continue such activities, and that created numerous portions of the
master library and forms utilized in the UCI Business. Buyer acknowledges that
much of the language is personal and idiosyncratic. Buyer also acknowledges that
has provided notice that at the conclusion of the Non-Compete period set forth
in Section 2 hereto and any related non-compete agreement, may, and reserves the
right to, author, develop, promote, sell, and market home inspection forms,
guides, manual, software, lectures, and related material which would by its or
their nature be similar to or derivative of the subject matter of the master
library and forms utilized in the UCI Business. Buyer reserves all rights to
defend itself if exact quotes or material portions of the UCI Business are
utilized to directly compete with Buyer.
i.
(a) UCI has provided Buyer in writing a complete and accurate list
and provided Buyer with the right to inspect true and complete
copies of all software, patents and applications for patents,
trademarks, trade names, service marks, and copyrights, and
applications therefore, owned or used by UCI or in which it
has any rights or licenses, except for software used by UCI
and generally available on the commercial market. UCI has
provided Buyer with a complete and accurate description of all
agreements or provided Buyer with the right to inspect true
and complete copies of all agreements of UCI with each
officer, employee or consultant of UCI providing UCI with
title and ownership to patents, patent applications, trade
secrets and inventions developed or used by UCI in its
business. To UCI' knowledge, all of such agreements are valid,
enforceable and legally binding, subject to the effect or
availability of rules of law governing specific performance,
injunctive relief or other equitable remedies (regardless of
whether any such remedy is considered in a proceeding at law
or in equity).
(b) UCI owns or possesses licenses or other rights to use all
computer software, software programs, patents, patent
applications, trademarks, trademark applications, trade
secrets, service marks, trade names, copyrights, inventions,
drawings, designs, customer lists, propriety know-how or
information, or other rights with respect thereto
(collectively referred to as "Proprietary Rights"), used in
the business of UCI, and the same are sufficient to conduct
UCI' business as it has been and is now being conducted.
(c) To UCI' knowledge, the operations of UCI do not conflict with
or infringe, and no one has asserted to UCI that such
operations conflict with or infringe on any Proprietary Rights
owned, possessed or used by any third party. There are no
claims, disputes, actions, proceedings, suits or appeal
pending against UCI with respect to any Proprietary Rights,
and to the knowledge of the management of UCI none has been
threatened against UCI. To the best knowledge of the
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management of UCI there are no facts or alleged fact which
would reasonably serve as a basis for any claim that UCI does
not have the right to use, free of any rights or claims of
others, all Proprietary Rights in the development,
manufacture, use, sale or other disposition of any or all
products or services presently being used, furnished or sold
in the conduct of the business of UCI as it has been and is
now being conducted.
(e) No employee of UCI is in violation of any term of any
employment contract, proprietary information and inventions
agreement, non-competition agreement, or any other contract or
agreement relating to the relationship of any such employee
with UCI or any previous employer.
5.17 INSURANCE. UCI has provided Buyer with a complete and accurate
list of all policies of insurance and provided Buyer with the right to inspect
true and complete copies of all policies of insurance to which UCI is a party or
is a beneficiary or named insured as of the Closing Date. UCI has in full force
and effect, with all premiums due thereon paid the policies of insurance set
forth therein. All the insurable properties of UCI are insured in amounts and
coverage and against risks and losses which are adequate and usually insured
against by persons holding or operating similar properties in similar
businesses. There were no claims in excess of $10,000 asserted or currently
outstanding under any of the insurance policies of UCI in respect of all motor
vehicle, general liability, errors and omissions, workers compensation, and
medical claims during the calendar year ending on December 31, 2008 or the four
months ending August 30, 2009.
5.18 LABOR RELATIONS. None of the employees of UCI are represented by
any union or are parties to any collective bargaining arrangement, and no
attempts are being made to organize or unionize any of UCI' employees. Except as
disclosed in writing to Buyer prior to the Closing, there is not presently
pending or existing, and there is not presently threatened, any (a) strike,
slowdown, picketing, work stoppage or employee grievance process, or (b) action,
arbitration, audit, hearing, investigation, litigation, or suit (whether civil,
criminal, administrative, investigative, or informal) against or affecting UCI
relating to the alleged violation of any legal requirement pertaining to labor
relations or employment matters. UCI is in compliance with all applicable laws
respecting employment and employment practices, terms and conditions of
employment, wages and hours, occupational safety and health and is not engaged
in any unfair labor practices. UCI is in compliance with the Immigration Reform
and Control Act of 1986.
5.19 CORPORATION STATUS. UCI is identified as a "C" corporation prior
to Closing.
5.20 CONDITION OF PREMISES. All real property leased by UCI is in good
condition and repair, ordinary wear and tear excepted.
5.21 NO DISTRIBUTOR AGREEMENTS. Except as disclosed in writing to Buyer
prior to the Closing, UCI is not a party to, nor is the property of UCI bound
by, any distributors' or manufacturer's representative or agency agreement.
5.22 CONFLICT OF INTEREST TRANSACTIONS. No past or present shareholder,
director, officer or employee of UCI or any of their affiliates (i) is indebted
to, or has any financial, business or contractual relationship or arrangement
with UCI, or (ii) has any direct or indirect interest in any property, asset or
right which is owned or used by UCI or pertains to the business of UCI with the
exception of outstanding shareholder loans which will be satisfied upon closing.
5.23 LITIGATION. There is no action, suit, proceeding, dispute,
litigation, claim, complaint or investigation by or before any court, tribunal,
governmental body, governmental agency or arbitrator pending or threatened
11
against or with respect to UCI which (i) if adversely determined would have an
adverse effect on the business, condition, assets, operations or prospects of
UCI, or (ii) challenges or would challenge any of the actions required to be
taken by UCI under this Agreement. There exists no basis for any such action,
suit, proceeding, dispute, litigation, claim, complaint or investigation.
5.24 NON-CONTRAVENTION. Neither (a) the execution and delivery of this
Agreement, nor (b) the performance of this Agreement will: (i) contravene or
result in a violation of any of the provisions of the organizational documents
of UCI; (ii) contravene or result in a violation of any resolution adopted by
the shareholders or directors of UCI; (iii) result in a violation or breach of,
or give any person the right to declare (whether with or without notice or lapse
of time) a default under or to terminate, any agreement or other instrument to
which UCI is a party or by which UCI or any of its assets are bound; (iv) give
any person the right to accelerate the maturity of any indebtedness or other
obligation of UCI; (v) result in the loss of any license or other contractual
right of UCI; (vi) result in the loss of, or in a violation of any of the terms,
provisions or conditions of, any governmental license, permit, authorization or
franchise of UCI; (vii) result in the creation or imposition of any lien,
charge, encumbrance or restriction on any of the assets of UCI; (viii) result in
the reassessment or revaluation of any property of UCI; by any taxing authority
or other governmental authority; (ix) result in the imposition of, or subject
UCI; to any liability for, any conveyance or transfer tax or any similar tax; or
(x) result in a violation of any law, rule, regulation, treaty, ruling,
directive, order, arbitration award, judgment or decree to which UCI or any of
its assets or any limited liability interests are subject.
5.25 APPROVALS. UCI has provided Buyer with a complete and accurate
list of all jurisdictions in which UCI is authorized to do business. No
authorization, consent or approval of, or registration or filing with, any
governmental authority is required to be obtained or made by UCI in connection
with the execution, delivery or performance of this Agreement, including the
conveyance to Buyer of the Business.
5.26 BROKERS. UCI has not agreed to pay any brokerage fees, finder's
fees or other fees or commissions with respect to the transactions contemplated
by this Agreement, and, to UCI' knowledge, no person is entitled, or intends to
claim that it is entitled, to receive any such fees or commissions in connection
with such transaction.
5.27 SPECIAL GOVERNMENT LIABILITIES. UCI has no existing or pending
liabilities, obligations or deferred payments due to any federal, state or local
government agency or entity in connection with its business or with any program
sponsored or funded in whole or in part by any federal, state or local
government agency or entity, nor is UCI or MP aware of any threatened action or
claim or any condition that could support an action or claim against UCI, the
Business for any of said liabilities, obligations or deferred payments.
5.28 FULL DISCLOSURE. Neither this Agreement (including the exhibits
hereto) nor any statement, certificate or other document delivered to Buyer by
or on behalf of UCI contains any untrue statement of a material fact or omits to
state a material fact necessary to make the representations and other statements
contained herein and therein not misleading.
5.29 REPRESENTATIONS TRUE ON CLOSING DATE. The representations and
warranties of UCI set forth in this Agreement are true and correct on the date
hereof, and will be true and correct on the Closing Date as though such
representations and warranties were made as of the Closing Date. Buyer's
knowledge will not act as a waiver of any breach of the representations and
warranties contained herein by UCI, or MP.
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5.30 TAX ADVICE. UCI and MP hereby represent and warrant that they have
sought their own independent tax advice regarding the transactions contemplated
by this Agreement and neither UCI nor MP have relied on any representation or
statement made by Buyer, the Company, or their representatives regarding the tax
implications of such transactions.
6. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents and warrants to UCI as follows:
6.1 POWER AND AUTHORITY; BINDING NATURE OF AGREEMENT. Buyer has full
power and authority to enter into this Agreement and to perform its obligations
hereunder. The execution, delivery and performance of this Agreement by Buyer
have been duly authorized by all necessary action on its part. Assuming that
this Agreement is a valid and binding obligation of the other party hereto, this
Agreement is a valid and binding obligation of Buyer.
6.2 APPROVALS. To Buyer's knowledge, no authorization, consent or
approval of, or registration or filing with, any governmental authority or any
other person is required to be obtained or made by Buyer in connection with the
execution, delivery or performance of this Agreement.
6.3 REPRESENTATIONS TRUE ON CLOSING DATE. To the Buyer's knowledge, the
representations and warranties of Buyer set forth in this Agreement are true and
correct on the date hereof, and will be true and correct on the Closing Date as
though such representations and warranties were made as of the Closing Date.
6.4 NON-DISTRIBUTIVE INTENT. The shares of UCI Stock being purchased by
the Company pursuant to this Agreement are not being acquired by the Company
with a view to the public distribution of them.
6.5 NON CONTRAVENTION. To the Company's knowledge neither the execution
nor delivery of this Agreement, nor the performance of this Agreement will
contravene or result in a material violation of any of the provisions of any
other agreement or obligation of the Company.
7. CONDITIONS TO CLOSING.
7.1 CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE. Buyer's
obligation to close the stock purchase as contemplated in this Agreement is
conditioned upon the occurrence or waiver by Buyer of the following:
(a) UCI shall have delivered to the Company all certificates
evidencing the UCI Stock and ownership of 100% of the capital stock of
UCI.
(b) All representations and warranties of UCI and MP made in
this Agreement or in any exhibit or schedule hereto delivered by UCI
and MP must be true and correct as of the Closing Date with the same
force and effect as if made on and as of that date.
(c) UCI must have performed and complied with all agreements,
covenants and conditions required by this Agreement to be performed or
complied with by UCI prior to or at the Closing Date.
(d). UCI covenants to extinguish all long term loans and pay
off all debt prior to the Closing. The agreement to indemnify and hold harmless
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includes all claims which may be brought by the designated credit card companies
and includes attorneys fees and costs and all claims, liability, losses, or
damages which Sellers may suffer as a result of any and all claims, demands,
costs, attorneys fees, and/or judgments against them arising out of any
violation of this provision of this Agreement taken by said credit card
companies. This paragraph shall cover the period beginning upon the date of the
execution of this agreement and continue through and including the last date
upon which any statute of limitations effecting Sellers' right(s) to pursue
damages of any kind against Buyer shall have ceased to exist. Paragraph 9.3
shall govern the Procedure for Indemnification Claims under this paragraph.
7.2 CONDITIONS PRECEDENT TO UCI' OBLIGATION TO CLOSE. UCI' obligation
to close the stock purchase as contemplated in this Agreement is conditioned
upon the occurrence or waiver by UCI of the following:
(a) All representations and warranties of Buyer made in this
Agreement or in any exhibit hereto delivered by Buyer must be true and
correct on and as of the Closing Date with the same force and effect as
if made on and as of that date.
(b) Buyer must have performed and complied with all agreements
and conditions required by this Agreement to be performed or complied
with by Buyer prior to or at the Closing Date.
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made by each of the parties hereto
will survive the Closing for a period of three years after the Closing Date.
9. INDEMNIFICATION.
9.1 INDEMNIFICATION BY UCI, AND MP UCI and MP agree to indemnify,
defend and hold harmless Buyer and its affiliates against any and all claims,
demands, losses, costs, expenses, obligations, liabilities and damages,
including interest, penalties and attorney's fees and costs, incurred by Buyer
or any of its affiliates arising, resulting from, or relating to any and all
liabilities of UCI accrued prior to the Closing or relating to the UCI Stock,
any misrepresentation of a material fact or omission to disclose a material fact
made by UCI, or MP in this Agreement, in any exhibits to this Agreement or in
any other document furnished or to be furnished by UCI, or MP under this
Agreement, or any breach of, or failure by UCI, or MP to perform, any of their
representations, warranties, covenants or agreements in this Agreement or in any
exhibit or other document furnished or to be furnished by UCI, or MP under this
Agreement.
9.2 INDEMNIFICATION BY BUYER. Buyer agrees to indemnify, defend and
hold harmless UCI, and MP against any and all claims, demands, losses, costs,
expenses, obligations, liabilities and damages, including interest, penalties
and attorneys' fees and costs incurred by UCI arising, resulting from or
relating to any breach of, or failure by Buyer to perform, any of its
representations, warranties, covenants or agreements in this Agreement or in any
exhibit or other document furnished or to be furnished by Buyer under this
Agreement.
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9.3 PROCEDURE FOR INDEMNIFICATION CLAIMS.
(a) Whenever any parties become aware that a claim (an
"Underlying Claim") has arisen entitling them to seek indemnification under this
Section 7 of the Agreement, such parties (the "Indemnified Parties") shall
promptly send a notice ("Notice") to the parties liable for such indemnification
(the "Indemnifying Parties") of the right to indemnification (the "Indemnity
Claim"); provided, however, that the failure to so notify the Indemnifying
Parties will relieve the Indemnifying Parties from liability under this
Agreement with respect to such Indemnity Claim only if, and only to the extent
that, such failure to notify the Indemnifying Parties results in the forfeiture
by the Indemnifying Parties of rights and defenses otherwise available to the
Indemnifying Parties with respect to the Underlying Claim. Any Notice pursuant
to this Section 7.3(a) shall set forth in reasonable detail, to the extent then
available, the basis for such Indemnity Claim and an estimate of the amount of
damages arising therefore.
(b) If an Indemnity Claim does NOT result from or arise in
connection with any Underlying Claim or legal proceedings by a third party, the
Indemnifying Parties will have thirty (30) calendar days following receipt of
the Notice to issue a written response to the Indemnified Parties, indicating
the Indemnifying Parties' intention to either (i) contest the Indemnity Claim or
(ii) accept the Indemnity Claim as valid. The Indemnifying Parties' failure to
provide such a written response within such thirty (30) day period shall be
deemed to be an acceptance of the Indemnity Claim as valid. In the event that an
Indemnity Claim is accepted as valid, the Indemnifying Parties shall, within
fifteen (15) Business Days thereafter, pay the damages incurred by the
Indemnified Parties in respect of the Underlying Claim in cash by wire transfer
of immediately available funds to the account or accounts specified by the
Indemnified Parties. To the extent appropriate, payments for indemnifiable
damages made pursuant to Section 7 of the Agreement will be treated as
adjustments to the Purchase Price.
(c) In the event an Indemnity Claim results from or arises in
connection with any Underlying Claim or legal proceedings by a third party, the
Indemnifying Parties shall have fifteen (15) calendar days following receipt of
the Notice to send a Notice to the Indemnified Parties of their election to, at
their sole cost and expense, assume the defense of any such Underlying Claim or
legal proceeding; provided that such Notice of election shall contain a
confirmation by the Indemnifying Parties of their obligation to hold harmless
the Indemnified Parties with respect to damages arising from such Underlying
Claim. The failure by the Indemnifying Parties to elect to assume the defense of
any such Underlying Claim within such fifteen (15) day period shall entitle the
Indemnified Parties to undertake control of the defense of the Underlying Claim
on behalf of and for the account and risk of the Indemnifying Parties in such
manner as the Indemnified Parties may deem appropriate, including, but not
limited to, settling the Underlying Claim. However, the parties controlling the
defense of the Underlying Claim shall not settle or compromise such Underlying
Claim without the prior written consent of the other parties, which consent
shall not be unreasonably withheld or delayed. The non-controlling parties shall
be entitled to participate in (but not control) the defense of any such action,
with their own counsel and at their own expense.
(d) The Indemnifying Parties and the Indemnified Parties will
cooperate reasonably, fully and in good faith with each other, at the sole
expense of the Indemnifying Parties, in connection with the defense, compromise
or settlement of any Underlying Claim including, without limitation, by making
available to the other parties all pertinent information and witnesses within
their reasonable control.
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10. INJUNCTIVE RELIEF.
10.1 DAMAGES INADEQUATE. Each party acknowledges that it would be
impossible to measure in money the damages to the other party if there is a
failure to comply with any covenants and provisions of this Agreement, and
agrees that in the event of any breach of any covenant or provision, the other
party to this Agreement will not have an adequate remedy at law.
10.2 INJUNCTIVE RELIEF. It is therefore agreed that the other party to
this Agreement who is entitled to the benefit of the covenants and provisions of
this Agreement which have been breached, in addition to any other rights or
remedies which they may have, will be entitled to immediate injunctive relief to
enforce such covenants and provisions, and that in the event that any such
action or proceeding is brought in equity to enforce them, the defaulting or
breaching party will not urge a defense that there is an adequate remedy at law.
11. FURTHER ASSURANCES.
Following the Closing, UCI shall furnish to Buyer such instruments and
other documents as Buyer may reasonably request for the purpose of carrying out
or evidencing the transactions contemplated hereby.
12. FEES AND EXPENSES.
Each party hereto shall pay all fees, costs and expenses that it incurs
in connection with the negotiation and preparation of this Agreement and in
carrying out the transactions contemplated hereby (including, without
limitation, all fees and expenses of its counsel and accountant).
13. WAIVERS.
If any party at any time waives any rights hereunder resulting from any
breach by the other party of any of the provisions of this Agreement, such
waiver is not to be construed as a continuing waiver of other breaches of the
same or other provisions of this Agreement. Resort to any remedies referred to
herein will not be construed as a waiver of any other rights and remedies to
which such party is entitled under this Agreement or otherwise.
14. SUCCESSORS AND ASSIGNS.
Each covenant and representation of this Agreement will inure to the
benefit of and be binding upon each of the parties, their personal
representatives, assigns and other successors in interest.
15. ENTIRE AND SOLE AGREEMENT.
This Agreement constitutes the entire agreement between the parties and
supersedes all other agreements, representations, warranties, statements,
promises and undertakings, whether oral or written, with respect to the subject
matter of this Agreement. This Agreement may be modified or amended only by a
written agreement signed by the parties against whom the amendment is sought to
be enforced. The parties acknowledge that as of the date of the execution of
this Agreement, that any and all other agreements either written or verbal will
be terminated and be of no further force or effect.
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16. GOVERNING LAW.
This Agreement will be governed by the laws of California without
giving effect to applicable conflict of law provisions. With respect to any
litigation arising out of or relating to this Agreement, each party agrees that
it will be filed in and heard by the state or federal courts with jurisdiction
to hear such suits located in Los Angeles County, California.
17. COUNTERPARTS.
This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts will be deemed to be an original, and
such counterparts will constitute but one and the same instrument.
18. ASSIGNMENT.
Except in the case of an affiliate of the Buyer, this Agreement may not
be assignable by any party without prior written consent of the other parties.
19. REMEDIES.
Except as otherwise expressly provided herein, none of the remedies set
forth in this Agreement are intended to be exclusive, and each party will have
all other remedies now or hereafter existing at law, in equity, by statute or
otherwise. The election of any one or more remedies will not constitute a waiver
of the right to pursue other available remedies.
20. SECTION HEADINGS.
The section headings in this Agreement are included for convenience
only, are not a part of this Agreement and will not be used in construing it.
21. SEVERABILITY.
In the event that any provision or any part of this Agreement is held
to be illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability will not affect the validity or enforceability of any other
provision or part of this Agreement.
22. NOTICES.
Each notice or other communication hereunder must be in writing and
will be deemed to have been duly given on the earlier of (i) the date on which
such notice or other communication is actually received by the intended
recipient thereof, or (ii) the date five (5) days after the date such notice or
other communication is mailed by registered or certified mail (postage prepaid)
to the intended recipient at the following address (or at such other address as
the intended recipient will have specified in a written notice given to the
other parties hereto):
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UCI AND XXXXX XXXXX
UCI
00000 Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile:
IF TO BUYER:
Environmental Service Professionals, Inc.
000 X. Xxxxxxx Xxxxx
Xxxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xx Xxxxxx, Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
23. PUBLICITY.
Except as may be required in order for a party to comply with
applicable laws, rules, or regulations or to enable a party to comply with this
Agreement, or necessary for the Buyer to prepare and disseminate any private or
public placements of its securities or to communicate with its shareholders, no
press release, notice to any third party or other publicity concerning the
transactions contemplated by this Agreement will be issued, given or otherwise
disseminated without the prior approval of each of the parties hereto; provided,
however, that such approval will not be unreasonably withheld.
IN WITNESS WHEREOF, this Agreement has been entered into as of the date
first above written.
UCI: United Capitalists, Inc., a California Corporation
By:/s/ Xxxxx Xxxxx
----------------------------------------------------
Xxxxx Xxxxx, President and Director
MP: /s/ Xxxxx Xxxxx
---------------------------------------------------
Xxxxx Xxxxx, Individually
COMPANY/BUYER: ENVIRONMENTAL SERVICE PROFESSIONARLS, INC.,
a Nevada corporation
By:/s/ Xxxxxx Xxxxxx
----------------------------------------------------
Xxxxxx Xxxxxx, Chief Executive Officer
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