AGREEMENT OF SALE
Exhibit
2.1 Agreement of Sale dated March 12, 2010, by and among
Global Dynamics Corp and Xxxxxx X. Xxxxxx
AGREEMENT OF SALE, made as of
March 12, 2010, between Xxxxxx X. Xxxxxx, having an address at 00 Xxxxx Xxxx.,
Xxxx Xxxx, XX 00000 (“Seller” or “CPS”), and Global Dynamics Corp., a Delaware
corporation, having an address at x/x Xxxxxxxx Xxxxx, 00 Xxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxx 93874 (“Purchaser” or “Global”).
WITNESSETH:
WHEREAS, Purchaser desires to
acquire, and Seller desires to sell, the membership interests of Consumer
Product Services, LLC, upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in
consideration of the covenants and agreements hereafter set forth, and other
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereto agree as follows:
1. Agreement
to Sell. Seller agrees to sell, transfer and deliver to
Purchaser, and Purchaser agrees to purchase, upon the terms and conditions
hereinafter set forth, all of the membership interests (the “Membership
Interests”) of Consumer Product Services, LLC, a limited liability company
organized under the laws of New York (the “Company”).
2. The
Assets of the Company. It is the understanding of the parties
that the Company is the owner of the following assets (the
“Assets”):
(a) the
inventory of merchandise, finished goods, raw materials, work-in-progress,
packaging, parts and supplies of the business (the “Merchandise”);
(b) the
machinery and equipment described in Exhibit A-1 hereto (the
“Equipment”);
(c) the
vehicles described in Exhibit A-2 hereto (the “Vehicles”);
(d) the
furniture, fixtures and improvements described in Exhibit A-3 hereto (the
“Improvements”);
(e) the
leases described in Exhibit A-4 hereto (the “Leases”);
(f) the
accounts receivable of the business outstanding on the closing date (the
“Accounts Receivable”);
(g) the
contracts and agreement described in Exhibit A-5 hereto (the
“Contracts”);
(h) the
books and records of the business;
(i) all
right, title and interest of Seller in the name Consumer Product Services, LLC
and any variants thereof (the “Name”); and
(j) the
goodwill of the business (the “Goodwill”).
3. Purchase
Price. The purchase price to be paid by Purchaser is the
issuance by GLOBAL to the members of CPS, as designated by the members, of a
total of TWENTY-SEVEN MILLION TWO THOUSAND SEVEN HUNDRED (27,002,700) shares of
common stock of the Purchaser (GLOBAL common stock). This amount will
be equal to sixty (60%) percent of the total issued and outstanding shares of
common stock, after effectiveness of a reverse split of the common shares of
common stock GLOBAL, which is to be done at a ratio of 11.11 to 1, which shall
result in a total of FORTY-FIVE MILLION FOUR THOUSAND FIVE HUNDRED (45,004,500)
shares of GLOBAL Common Stock being issued and outstanding at the conclusion of
the transaction and acquisition of CPS by GLOBAL. In addition, GLOBAL
shall amend its Certificate of Incorporation to amend the name to reflect the
acquisition of CPS, and shall amend its Certificate of Incorporation to
authorize up to ten million (10,000,000) shares of preferred stock of
GLOBAL.
4. Conditions
to Closing. GLOBAL will raise no less than three million
($3,000,000) dollars in a Rule 506 offering, or some other raise, to accredited
investors by selling shares of GLOBAL common stock (after the 11.11 for 1
reverse split) or some other offering type, basing the total valuation of the
closed transaction at a value of twelve million ($12,000,000)
dollars.
The
actual number of shares to be issued for all of the outstanding membership
interests of CPS will be such amount that will equal sixty (60%) percent of the
shares issued and outstanding after the completion of this transaction assuming
all three million ($3,000,000) dollars is raised.
It is
agreed by the parties that an escrow account shall be
established. Said escrow shall be for twenty-five (25%) percent of
the issued and outstanding shares of common stock (the
“Escrow”). Said Escrow shall be held by escrow agent, Law Office of
Xxxxxxx X. Xxxxx, Esq., pursuant to a separate written agreement, to be sold for
the raising of the funds with the proceeds thereof remitted to the
company. TEN (10%) of the issued and outstanding shares of common
stock shall be issued to the Keystone Capital Resources LLC group. An
additional five (5%) percent shall be held in Escrow and will be issued upon the
completion of the capital raise of three million ($3,000,000)
dollars. In the event of a shortfall in the raise of capital of less
than three million ($3,000,000) dollars, the additional five (5%) percent will
not be delivered to Keystone Capital Resources LLC group and will be returned to
the new management of the Company.
Subject
to verification during the audit of CPS, the amount of monies due to Xxxxxx X.
Xxxxxx, expected to be approximately ONE MILLION DOLLARS ($1,000,000), shall be
converted into a preferred series of stock of GLOBAL. Said preferred
stock, shall be designated and issued by the Board of Directors at the closing
of the transaction to be redeemable and pay an interest rate of
5%. This preferred stock shall be redeemable at the option of the
successor corporation at 25% per year for cash, including interest, or
convertible into shares of common stock of Global. The preferred
shares shall also carry a super-voting right of 100 to 1 per share of the Global
Common Stock.
At the
closing, the current shareholders of GLOBAL who own 300,000,000 shares, which
represents 60% of the total issued and outstanding shares of common stock Global
will be tendered for cancellation as consideration for the transfer to them of
all rights to the patent and related technology owned by GLOBAL. This
will be completed as part of the acquisition of the ownership interest of
CPS.
At the
Closing, the present GLOBAL officers and directors shall deliver their
respective letters of resignation, along with minutes of the GLOBAL Board of
Directors accepting such resignations and appointing Xxxxxx X. Xxxxxx, Xxxxx
X’Xxxxx, and Xxxx Xxxxxxxx to the GLOBAL Board of Directors and naming
Xxxxxx X. Xxxxxx as Chairman and CEO of Global.
Upon
Closing, the Board of Directors shall adopt a Performance Bonus Compensation
Plan (“Bonus Plan”) for the new Management of GLOBAL. The Bonus Plan
shall provide as follows:
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a)
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After
the first four (4) fiscal quarters after the closing and funding of
GLOBAL, if the gross revenue reaches a level of a minimum of fifteen
million ($15,000,000) and with an EBITDA of eight (8%) percent, the new
Management shall be issued additional shares of common stock equal to ten
(10%) percent of the total issued and outstanding GLOBAL Common Stock at
the date of award;
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b)
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After
the next four (4) fiscal quarters (or eight fiscal quarters) after the
closing and funding of GLOBAL, if the gross revenue reaches a level of a
minimum of twenty-two million ($22,000,000) dollars, and with an EBITDA of
eight (8%) percent, the new Management shall be issued additional shares
of common stock equal to ten (10%) percent (thus, totaling twenty (20%)
percent) of the total issued and outstanding GLOBAL Common Stock at the
date of award;
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c)
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After
the next four (4) fiscal quarters (or twelve fiscal quarters) after the
closing and funding of GLOBAL, if the gross revenue reaches a level of a
minimum of thirty million ($30,000,000) dollars, and with an EBITDA of
eight (8%) percent, the management shall be issued additional shares of
common stock equal to ten (10%) percent (thus, totaling thirty (30%)
percent) of the total issued and outstanding GLOBAL Common Stock at the
date of award;
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For the
purposes of the Bonus Plan, the gross revenue used above shall have a margin of
error of twenty (20%) percent of the stated amount to qualify for the Bonus
Plan. In addition, an increase of the percentage of EBITDA can be
used to offset lower gross revenue at 1% per $500,000 of revenue.
5. The
Closing. The “closing” means the settlement of the obligations
of Seller and Purchaser to each other under this agreement, including the
payment of the purchase price to Seller as provided in Article 1 hereof and the
delivery of the closing documents provided for in Article 6
hereof. The closing shall be held at the offices of Consumer Products
Services, LLC, 00 Xxxxx Xxxx., Xxxx Xxxx, XX 00000 on or about March
12, 2010 (the “closing date”).
6. Closing
Documents. At the closing Seller shall execute and deliver to
Purchaser:
(a) an
Assignment of the Membership Interests;
(b) the
Operating Agreement or other organizational documents of the Company, the
Leases; any bills, vouchers, records showing the ownership of the furniture,
furnishings, equipment, other property used in the operation of the Company; and
all other books of account, records and contracts of the Company;
and
(c) such
other instruments as may be necessary or proper to transfer to Purchaser all
other ownership interests in the Company to be transferred under this
Agreement.
7. Representations
and Warranties of Seller. Seller represents and warrants to
Purchaser as follows:
(a) Seller
has full power and authority to carry out and perform his undertakings and
obligations as provided herein.
(b) No
action, approval, consent or authorization of any governmental authority is
necessary for Seller to consummate the transactions contemplated
hereby.
(c) The
Company is a limited liability company duly organized on March
26, 2002, under the laws of the State of New York, and the Company is
validly existing and has not been dissolved.
(d) Seller
is the owner of the Membership Interests, and the Membership Interests are all
of the issued and outstanding shares of stock of the Company. All of
the Membership Interests are fully paid and non-assessable, have not been
assigned, pledged or hypothecated, and are free of all liens, claims and
encumbrances.
(e) The
Company is the owner of all of the Assets enumerated in Article 2 hereof, free
of all liens, claims and encumbrances, except as may be set forth
herein.
(f) There
are no violations of any law or governmental rule or regulation pending against
Seller, the Membership Interests or the Company.
(g) There
are no judgments, liens, suits, actions or proceedings pending against Seller,
the Membership Interests or the Company that have not otherwise been
disclosed.
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(h)
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The
Company has not entered into, and is not subject to, any: (i)
written contract or agreement for the employment of any employee of the
business; (ii) contract with any labor union or guild; (iii) pension,
profit-sharing, retirement, bonus, insurance, or similar plan with respect
to any employee of the business;
or
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(iv)
similar contract or agreement affecting or relating to the Company.
(i) The
Leases are in full force and effect and without any default by the Company
thereunder. All copies of the Leases provided by Seller to Purchaser
are true and complete copies of the original Leases.
(j) The
Contracts are in full force and effect and without any default by the Company
thereunder. All copies of the Contracts provided by Seller to
Purchaser are true and complete copies of the original Contracts.
(k) The
Company has filed each tax return, including without limitation all income,
excise, property, gain, sales, franchise and license tax returns, required to be
filed by the Company prior to the date hereof. Each such return is
true, complete and correct, and the Company has paid all taxes, assessments and
charges of any governmental authority required to be paid by it and has created
reserves or made provision for all taxes accrued but not yet
payable. No government is now asserting, or to Seller's knowledge
threatening to assert, any deficiency or assessment for additional taxes or any
interest, penalties or fines with respect to the Company.
(l) The
financial statements, balance sheets and other information pertaining to the
Company set forth in Exhibit B hereto are true, correct and complete as of the
dates and for the periods set forth therein; have been prepared in accordance
with generally accepted accounting principles consistently applied; and fairly
represent the financial position of the Company at such dates and for such
periods. The Company had at said dates no liabilities or obligations
of any kind, contingent or otherwise, not reflected in Exhibit
B. Except as shown in Exhibit B, the Company owns outright each asset
or item of property reflected therein, free of all liens, claims and
encumbrances. Since said dates and periods, there has been no
material adverse change in the financial condition, assets or liabilities of the
Company.
(m) The
financial statements, balance sheets and other information pertaining to Seller
set forth in Exhibit C hereto are true, correct and complete as of the dates and
for the periods set forth therein; have been prepared in accordance with
generally accepted accounting principles consistently applied; and fairly
represent the financial position of Seller at such dates and for such
periods. Seller had at said dates no liabilities or obligations of
any kind, contingent or otherwise, not reflected in Exhibit C. Except
as shown in Exhibit C, Seller owns outright each asset or item of property
reflected therein, free of all liens, claims and encumbrances. Since
said dates and periods, there has been no material adverse change in the
financial condition, assets or liabilities of Seller.
8. Representations
and Warranties of Purchaser. Purchaser represents and warrants
to Seller as follows:
(a) Purchaser
is a corporation duly organized and validly existing under the laws of Delaware,
and is duly qualified to do business in the State of New
York. Purchaser has full power and authority to carry out and perform
its undertakings and obligations as provided herein. The execution
and delivery by Purchaser of this agreement and the consummation of the
transactions contemplated herein have been duly authorized by the Board of
Directors of Purchaser and will not conflict with or breach any provision of the
Certificate of Incorporation or Bylaws of Purchaser.
(b) No
action, approval, consent or authorization of any governmental authority is
necessary for Purchaser to consummate the transactions contemplated
hereby.
(c)
Purchaser qualifies as an operating company and is not a “shell company” as
defined in RULE 12b-2 of the EXCHANGE ACT and will provide legal opinion at time
of closing to confirm this fact.
9. No Other
Representations. Purchaser acknowledges that neither Seller
nor any representative or agent of Seller has made any representation or
warranty (expressed or implied) regarding the Company, or any matter or thing
affecting or relating to this Agreement, except as specifically set forth in
this Agreement. Seller shall not be liable or bound in any manner by
any oral or written statement, representation, warranty, agreement or
information pertaining to the Company or this agreement furnished by any broker,
agent or other person, unless specifically set forth in this
Agreement.
10. Conduct
of the Business. Seller, until the closing,
shall:
(a) conduct
the business in the normal, useful and regular manner;
(b) use
his best efforts to preserve the business and the goodwill of the customers and
suppliers of the business and others having relations with Seller;
and
(c) give
Purchaser and its duly designated representatives reasonable access to the
premises of the Company and the books and records of the Company, and furnish to
Purchaser such data and information pertaining to the Company as Purchaser from
time to time reasonably may request.
Unless
and until the closing shall take place, Purchaser shall hold in confidence all
information obtained in connection with this agreement, and, if for any reason
the closing shall not take place, Purchaser shall return to Seller all documents
received hereunder.
11. Conditions
to Closing. The obligations of the parties to close hereunder
are subject to the following conditions:
(a) All
of the terms, covenants and conditions to be complied with or performed by the
other party under this agreement on or before the closing shall have been
complied with or performed in all material respects.
(b) All
representations or warranties of the other party herein are true in
all
material
respects as of the closing date.
(c) On
the closing date, there shall be no liens or encumbrances against the Company,
except as may be provided for herein.
If
Purchaser shall be entitled to decline to close the transactions contemplated by
this agreement, but Purchaser nevertheless shall elect to close, Purchaser shall
be deemed to have waived all claims of any nature arising from the failure of
Seller to comply with the conditions or other provisions of this agreement of
which Purchaser shall have actual knowledge at the closing.
12. Brokerage. The
parties hereto represent and warrant to each other that they have not dealt with
any broker or finder in connection with this agreement or the transactions
contemplated hereby, with the exception of Keystone Capital Resources, LLC, and
no broker or any other person is entitled to receive any brokerage commission,
finder's fee or similar compensation in connection with this agreement or the
transactions contemplated hereby. Each of the parties shall indemnify
and hold the other harmless from and against all liability, claim, loss, damage
or expense, including reasonable attorneys' fees, pertaining to any broker,
finder or other person with whom such party has dealt.
13. Notices. All
notices, demands and other communications required or permitted to be given
hereunder shall be in writing and shall be deemed to have been properly given if
delivered by hand or by Federal Express courier or by registered or certified
mail, return receipt requested, with postage prepaid, to Seller or Purchaser, as
the case may be, at their addresses first above written, or at such other
addresses as they may designate by notice given hereunder.
14. Survival. The
representations, warranties and covenant contained herein shall survive the
delivery of the Xxxx of Sale and shall continue in full force and effect after
the closing, except to the extent waived in writing.
15. Further
Assurances. In connection with the transactions contemplated
by this agreement, the parties agree to execute and deliver such further
instruments, and to take such further actions, as may be reasonably necessary or
proper to effectuate and carry out the transactions contemplated in this
agreement.
16. Entire
Agreement. This agreement contains all of the terms agreed
upon between Seller and Purchaser with respect to the subject matter
hereof. This agreement has been entered into after full
investigation. All prior oral or written statements, representations,
promises, understandings and agreements of Seller and Purchaser are merged into
and superseded by this agreement, which alone fully and completely expresses
their agreement.
17. Changes
Must Be In Writing. No delay or omission by either Seller or
Purchaser in exercising any right shall operate as a waiver of such right or any
other right. This agreement may not be altered, amended, changed,
modified, waived or terminated in any respect or particular unless the same
shall be in writing signed by the party to be bound. No waiver by any
party of any breach hereunder shall be deemed a waiver of any other or
subsequent breach.
18. Captions
And Exhibits. The captions in this agreement are for
convenience only and are not to be considered in construing this
agreement. The Exhibits annexed to this agreement are an integral
part of this agreement, and where there is any reference to this agreement it
shall be deemed to include said Exhibits.
19. Governing
Law. This agreement shall be governed by and construed in
accordance with the laws of the State of New York. If any provisions
of this agreement shall be unenforceable or invalid, such unenforceability or
invalidity shall not affect the remaining provisions of this
agreement.
20. Binding
Effect. This agreement shall not be considered an offer or an
acceptance of an offer by Seller, and shall not be binding upon Seller until
executed and delivered by both Seller and Purchaser. Upon such
execution and delivery, this agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, successors and permitted assigns. This agreement may
be executed in counterparts.
IN WITNESS WHEREOF, the
parties have executed this agreement as of the date first above
written.
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Xxxxxx
X. Xxxxxx, Sole Member,
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Consumer
Products Services, LLC
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GLOBAL
DYNAMICS CORP.
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By
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Xxxxxxxx
Xxxxx, President
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EXHIBIT
A-1
Equipment
EXHIBIT
A-2
Vehicles
EXHIBIT
A-3
Improvements
EXHIBIT
A-4
The
Leases
EXHIBIT
A-5
Contracts
EXHIBIT
B
Financial Statements Of The
Company
EXHIBIT
C
Financial Statements Of
Seller
