Exhibit 2
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STOCK PURCHASE AGREEMENT
AND
PLAN OF REORGANIZATION
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This Stock Purchase Agreement and Plan of Reorganization (the "Agreement") is
entered into as of this ____ day of ________, 1996 by and among Xxxx Engineering
and Sales, Inc., a Tennessee corporation ("Xxxx"); Monogenesis Corporation, a
Delaware corporation ("Monogenesis"); Xxxxxx Xxxxxx & Sons, Inc., a Delaware
corporation ("JWSI"); and Xxxxxxx X. Xxxx, the sole shareholder of Xxxx (the
"Shareholder").
WHEREAS, Monogenesis is a closed-end investment company with approximately
1,200 institutional shareholders which was formed to provide a mechanism for
companies to become reporting companies under the Securities Act of 1934 through
distributions to its shareholders;
WHEREAS, Xxxx desires to form a holding company which will have a class of
shares for which a public trading market exists to facilitate access to equity
capital and future acquisitions and to provide liquidity for employee stock
incentive programs and its shareholders;
WHEREAS, a Delaware corporation (the "Holding Company") will be created which
will acquire all of the issued and outstanding shares of stock of Xxxx in a
stock for stock exchange;
WHEREAS, the Holding Company will have four classes of stock authorized:
Common Shares, Class B Common Shares, Class D Common Shares and Preferred Shares
as well as common stock purchase warrants as described below;
WHEREAS, Xxxx has authorized 2,000 shares of common stock, 750 of which are
issued and outstanding and has outstanding warrants to purchase 30 shares of
common stock of Xxxx;
WHEREAS, the Shareholder owns all of the issued and outstanding stock of Xxxx
and desires to exchange his stock in Xxxx for stock in the Holding Company, in
the ratio of 1,000 Class B Common Shares and 6,949 Common Shares of the Holding
Company for each share of common stock of Xxxx;
WHEREAS, JWSI has received warrants to purchase 30 shares of common stock of
Xxxx which will entitle JWSI to purchase 238,470 Common Shares of the Holding
Company (JWSI will agree to convert the 1,000 Class B Common Shares which are
part of the exchange to Common Shares;
WHEREAS, the Holding Company will authorize Common Stock Purchase Warrants
(the "Warrants") to purchase Common Shares of the Holding Company (which
Warrants will be exercisable for 24 months and have an exercise price of $8.00
per share);
WHEREAS, prior to the Closing Date (as hereinafter defined), Monogenesis will
purchase, and the Holding Company will issue to Monogenesis, 300,000 of its
Common Shares at a purchase price of $0.01 per share together with 1,000,000
Warrants at a purchase price of $0.01 per Warrant;
WHEREAS, prior to the stock for stock exchange, the Holding Company (and Xxxx)
will file a registration statement (the "Registration Statement") registering
1,302,937 of the Common Shares to be issued to the Shareholder, all of the
Common Shares and all of the Warrants to be issued to Monogenesis and JWSI and
all of the Common Shares underlying the Warrants pursuant to the Securities Act
of 1933, as amended (the "1933 Act"); and
WHEREAS, on the Closing Date, Monogenesis will authorize its transfer agent to
distribute to Monogenesis shareholders 125 Common Shares of the Holding Company
and 400 Warrants of the Holding Company for each share of stock of Monogenesis
held;
NOW THEREFORE, in consideration of the mutual covenants and conditions
hereinafter set forth, the parties agree as follows:
ARTICLE I
SECURITIES
1.1 EXCHANGE OF SECURITIES. Subject to the terms and conditions hereinafter
set forth, on the Closing Date (as defined below), the Holding Company shall
cause to be issued and delivered to the Shareholder and JWSI (upon exercise of
its warrants) the class and the number of shares of stock of the Holding Company
(the "Shares") set forth opposite their names on Schedule 1.1, which is attached
hereto and made a part hereof, in exchange for which the Shareholder and JWSI
shall deliver to the Holding Company all of the issued and outstanding stock and
warrants of Xxxx.
1.2 JWSI WARRANTS. In connection with the proposed transactions, Xxxx has
issued to JWSI warrants to purchase 30 of its shares of common stock which will
be exercised to purchase 238,470 Common Shares of the Holding Company which
shares will be registered. JWSI agrees to convert all Class B Common Shares
which it is eligible to receive in the exchange upon exercise of its warrants to
Common Shares.
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1.3 ISSUANCE OF SECURITIES TO MONOGENESIS. Prior to the exchange of
securities described in Section 1.1 above, the Holding Company shall issue to
Monogenesis 300,000 Common Shares upon receipt of the purchase price of $0.01
per share and 1,000,000 Warrants (in substantially the form attached hereto as
Exhibit 1.3) upon receipt of the purchase price of $0.01 per Warrant.
1.4 REGISTRATION STATEMENT. The Holding Company and Xxxx shall prepare and
file the Registration Statement pursuant to the 1933 Act registering a total of
2,984,717 Common Shares and 1,000,000 Warrants, which constitute 1,302,937 of
the 5,211,750 Common Shares to be issued to the Shareholder, the 300,000 Common
Shares and 1,000,000 Warrants to be issued to Monogenesis, the 238,470 Common
Shares to be issued to JWSI, 88,560 Common Shares to be issued to certain
noteholders of Xxxx, the 1,000,000 Common Shares underlying the Warrants and
54,750 Common Shares underlying certain stock options to be issued to certain
employees of Xxxx. The Shareholder shall receive the registered shares as
indicated on Schedule 1.1.
1.5 DISPOSITIONS OF SHARES BY THE SHAREHOLDER. The parties desire that this
transaction qualify as a tax free reorganization under Section 368(a)(1)(B) of
the Internal Revenue Code of 1986, as amended. In furtherance thereof, the
Shareholder shall not dispose of any shares of the Holding Company stock
received in the exchange within five years of the exchange if such disposition
would reduce the aggregate fair value of the Holding Company stock (measured as
of the date of the exchange) retained by the Shareholder to an amount less than
50% of the aggregate fair value of all of Xxxx'x issued and outstanding stock
immediately before the exchange, unless he obtains an opinion of counsel
reasonably satisfactory to the Holding Company that such transfer will not
violate the continuity of shareholder interest requirement set forth in Treas.
Reg. (S) 1.368-1. The Shareholder shall provide written notice to the Holding
Company, not less than five business days prior to the intended date of
disposition, specifying the number of shares of which the Shareholder proposes
to dispose.
ARTICLE II
CLOSING
2.1 TIME AND PLACE. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the place and on such date and at
such time within ten business days after the date on which all of the conditions
set forth in Articles IX and X to each party's obligations hereunder have been
satisfied or waived, as set forth in a written notice from Monogenesis at least
five business days prior thereto; or on such
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other date and at such other time and place as Xxxx and Monogenesis may mutually
agree. The date on which the Closing actually occurs is herein referred to as
the "Closing Date".
2.2 ACTIONS AT THE CLOSING. (a) At the Closing, the Shareholder shall
deliver to the Holding Company and the Holding Company shall deliver to the
Shareholder the shares to be exchanged in accordance with Sections 1.1 and 1.2
of this Agreement. The Shareholder shall deliver the certificates and
agreements representing all of the issued and outstanding shares of stock of
Xxxx to the Holding Company in negotiable form or together with completed and
executed stock powers transferring such shares and warrants to the Holding
Company. Upon receipt of such shares and warrants, the Holding Company shall
instruct the transfer agent to prepare and deliver certificates representing the
Shares.
(b) After the share exchange, JWSI will exercise the warrants, convert the
Class B Common Shares to Common Shares and receive a total of 238,470 Common
Shares of the Holding Company.
2.3 HOLDING COMPANY DIRECTORS. The Board of Directors of the Holding Company
shall have the number of directors designated by Xxxx and shall consist of the
individuals designated by Xxxx.
2.4 SIMULTANEOUS ACTIONS. All proceedings to be taken and all documents to be
executed and delivered by the parties at the Closing shall be deemed to have
been taken and executed simultaneously and no proceedings shall be deemed taken
nor any documents executed or delivered until all have been taken, executed and
delivered.
ARTICLE III
REPRESENTATIONS AND WARRANTS OF XXXX
Xxxx represents and warrants to Monogenesis, all of which representations and
warranties shall be true on the Closing Date and shall survive the Closing,
that:
3.1 ORGANIZATION. Xxxx is a corporation duly organized, validly existing and
in good standing under the laws of the State of Tennessee and has the corporate
power to own its property and carry on its business as it is now being
conducted. Xxxx is duly qualified and in good standing to do business in every
jurisdiction in which such qualification is necessary and each of such
jurisdictions is listed on Schedule 3.1 attached hereto. Copies of the
Certificate of Incorporation and the Bylaws of Xxxx, which have been furnished
by Xxxx to Monogenesis, are true and correct copies
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of said documents including all amendments to the date hereof. The offices and
directors of Xxxx are listed on Schedule 3.1.
3.2 CAPITALIZATION. Xxxx has authorized 2,000 shares of Common Stock which
have no par value. Of such shares, 750 are issued and outstanding and have been
and will be duly authorized, validly issued, fully paid and nonassessable.
Except for the warrants issued to JWSI and as set forth on Schedule 3.2 hereto
and as described herein, there is no: (i) outstanding security convertible into
or exchangeable for Common Stock; (ii) option, warrant, put, call or other right
to purchase or subscribe to Common Stock; or (iii) contract, commitment,
agreement, understanding or arrangement of any kind relating to the issuance or
disposition of Common Stock or the issuance or disposition of any security
convertible into Common Stock. Xxxx'x records reflect the ownership of all
issued and outstanding shares of its stock by the Shareholder.
3.3 SUBSIDIARIES. Xxxx has no subsidiaries and owns no stock, partnership or
other equity interest in any other entity.
3.4 AUTHORITY. Xxxx has full power to execute and perform this Agreement.
The execution and delivery of this Agreement has been duly authorized by all
necessary corporate and other actions. Neither the execution nor delivery of
this Agreement nor the performance, observation or compliance with its terms and
conditions will violate any provision of law, any order of court or other
governmental agency, the Certificate of Incorporation or Bylaws of Xxxx, or any
indenture, agreement or other instrument to which Xxxx is a party, or by which
it is bound or by which any of its property is bound. No consent to the
performance, observation or compliance with the terms and conditions of this
Agreement by Xxxx is required from any third party.
3.5 FINANCIAL STATEMENTS. Schedule 3.5 attached hereto contains true and
complete copies of the following (collectively, the "Financial Statements"):
(a) the audited balance sheets of Xxxx as of March 31, 1994, 1995 and 1996,
and the related audited statements of earnings and retained earnings and cash
flow for the fiscal years then ended, and notes related thereto; and
(b) the unaudited balance sheet (the "Balance Sheet") of Xxxx as of
September 30, 1996 (the "Balance Sheet Date") and the related unaudited
statement of earnings for the six months then ended, prepared by Xxxx and
accompanied by a certificate in the
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form of Exhibit 3.5 hereto executed by the persons indicated on said Exhibit.
The Financial Statements either eliminate or clearly disclose all transactions
between Xxxx, the Shareholder and their affiliates. Except as otherwise noted in
the Financial Statements, the Financial Statements are complete and present
fairly the financial position of Xxxx and the results of its operations as of
the dates thereof and for the periods covered thereby in conformity with
generally accepted accounting principles applied on a consistent basis.
3.6 ABSENCE OF UNDISCLOSED LIABILITIES. To the Best Knowledge (as defined in
Section 3.20 below) of Xxxx, at the Balance Sheet Date (i) Xxxx had no
liabilities or obligations of any nature (matured or unmatured, fixed or
contingent) which were not provided for or disclosed on the Balance Sheet, (ii)
all reserves and allowances provided on the Balance Sheet were adequate for the
purposes indicated therein and (iii) there were no loss contingencies (as such
term is used in Statement of Financial Accounting Standards No. 5 issued by the
Financial Accounting Standards Board ("FASB")) which were not adequately
provided for in the Balance Sheet.
3.7 ABSENCE OF CHANGES. Since the Balance Sheet Date, Xxxx'x business has
operated in the ordinary course and there has not been (i) any adverse change in
its condition (financial or otherwise), assets, liabilities, earnings or
business; (ii) any obligation or liability (whether absolute, accrued,
contingent or otherwise and whether due or to become due) incurred, or any
transaction, contract or commitment entered into, other than items incurred or
entered into (as the case may be) in the ordinary course of the business; (iii)
any amendment or termination of a material contract, license, lease, commitment
or other agreement to which Xxxx is a party, except in the ordinary course of
business and consistent with past practice; (iv) any license, sale, transfer,
pledge, mortgage or other disposition of any tangible or intangible asset or
Intellectual Property (as defined in Section 3.13 below) except sales of
inventory in the ordinary course of business and consistent with past practice;
(v) any failure to operate its business in the ordinary course consistent with
past practice, including, but not limited to, any failure to make capital
expenditures or investments necessary to continue business in the ordinary
course or any failure to pay trade accounts payable when due; or (vi) any
dividend or other distribution declared or paid or any change in its Common
Stock outstanding.
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3.8 TITLE TO ASSETS. Xxxx has good and marketable title to all of its
assets, free and clear of all mortgages, liens, pledges, charges, security
interests, rights of way, options, rights of first refusal, conditions,
restrictions or encumbrances of any kind or character, whether or not relating
to the extension of credit or the borrowing of money (collectively,
"Encumbrances"), except for (i) the Encumbrances disclosed in the Financial
Statements and (ii) liens for taxes and governmental charges not yet payable
without penalty. There is no asset used or required by Xxxx in the conduct of
its business which is not either owned by it or licensed or leased to it.
3.9 LITIGATION. There are no (i) audits, inspections, actions, suits, claims,
investigations or legal, administrative or arbitration proceedings pending or
threatened against Xxxx, whether at law or in equity, whether civil or criminal
in nature or whether before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, nor, to the Best Knowledge of Xxxx, does any basis exist
therefor or (ii) judgments, decrees, injunctions or orders of any court,
governmental department, commission, agency, instrumentality or arbitrator
against Xxxx.
3.10 COMPLIANCE; GOVERNMENTAL AUTHORIZATION. (a) Xxxx has complied with all
federal, state, territorial, local or foreign laws, ordinances, regulations or
orders applicable to its business or assets, including, by way of description,
and not limitation, matters relating to the environment, anti-competitive
practices, discrimination, employment, health and safety, taxes, issuance of
securities, customs duties and requirements and foreign practices. Xxxx has all
federal, state, territorial, local and foreign governmental licenses and permits
necessary in the conduct of its business as presently conducted, which licenses
and permits are in full force and effect, and no violations are outstanding or
uncured with respect to any such licenses or permits and no proceeding is
pending or threatened to revoke or limit any of them. Such licenses, consents
and permits shall not be affected in any respect by the transactions
contemplated hereby.
(b) As used in this Agreement, "Hazardous Substance" shall mean and include
all hazardous or toxic substances, wastes or materials, any pollutants or
contaminants (including, without limitation, all oil and petroleum of any kind
and in any form, asbestos and raw materials which include hazardous
constituents), or any other similar substances, or materials which are included
under or regulated by any applicable local, state, federal or foreign law, rule
or regulation pertaining to environmental regulation, contamination, clean-up or
disclosure, including,
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without limitation, the Clean Air Act, the Federal Water Pollution Control Act,
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, the Superfund Amendments and Reauthorization Act of 1986, the Resource
Conservation and Recovery Act of 1976, the Toxic Substances Control Act, the
Federal Insecticide, Fungicide and Rodenticide Act, the Occupational Safety and
Health Act, the Emergency Planning and Community Right-to-Know Act of 1986, and
all comparable applicable state or local laws, orders and regulations, as any of
the foregoing has heretofore been amended.
(c) Xxxx hereby warrants to Monogenesis that Xxxx and the supervisory
employees, officers and directors of Xxxx have no knowledge of the presence,
storage, disposition, generation, treatment, release or discharge of any
Hazardous Substance on, under or about the assets owned by Xxxx or the land and
buildings on and in which Xxxx currently conducts or previously conducted its
operations.
3.11 LABOR RELATIONS; EMPLOYEES. Xxxx is in compliance with all applicable
federal, state, territorial, local and foreign laws and regulations respecting
labor, employment and employment practices, terms and conditions of employment
and wages and hours. There is no unfair labor practice complaint against Xxxx
pending before any state, local or foreign agency. There is no labor strike,
dispute, slowdown, stoppage or organizational effort or similar activity
actually pending or, to the Best Knowledge of Xxxx, threatened involving Xxxx;
no representation question exists respecting the employees of Xxxx; and no
collective bargaining agreement presently covers any employees of Xxxx, nor is
any currently being negotiated.
3.12 EMPLOYEE BENEFIT PLANS. (a)Schedule 3.12 attached hereto lists all
"employee pension benefit" plans (as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")), all "employee
welfare benefit" plans (as defined in Section 3(1) of ERISA) and any other
qualified or non-qualified plans, programs or letters of commitment promising
current or future benefits or deferred compensation (individually, a "Plan" and,
collectively, the "Plans") maintained by Xxxx. All Plans which are "employee
pension benefit" plans are so indicated on Schedule 3.12. All reports,
statements, returns and other information required to be furnished or filed with
respect to the Plans have been furnished or filed, or both, and all required
records have been maintained. There are no actions, suits or claims pending, or
to the Best Knowledge of Xxxx, threatened against, involving, or affecting any
Plan. Xxxx has no material liability, civil or criminal, under any provision of
ERISA or any other applicable statute or rule of law with respect to the Plans.
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(b) There are no violations of the health care continuation coverage
requirements of the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended ("COBRA") with respect to employees of Xxxx or any qualified
beneficiaries of such employees.
3.13 INTELLECTUAL PROPERTY. Set forth on Schedule 3.13 is a list and a brief
description or identification of all intellectual property rights owned, leased
or licensed by Xxxx or used in connection with its business, including without
limitation all patents, patent applications, trade names, fictitious or assumed
names, trademarks, trademark applications, service marks, service xxxx
applications, copyrights, copyright applications, patterns, inventions, trade
secrets, proprietary processes and formulae, license agreements, and all other
similar proprietary rights, whether patentable or unpatentable (collectively,
the "Intellectual Property"). Except only as set forth on Schedule 3.13, Xxxx is
not a licensor or licensee in respect of any Intellectual Property. Xxxx owns or
possesses adequate licenses or other rights to use all Intellectual Property
necessary to conduct its business as now operated and all of such Intellectual
Property is owned outright by Xxxx except as is otherwise specifically noted on
Schedule 3.13. To the Best Knowledge of Xxxx, there is no infringement,
misappropriation or other misuse being made by any other party of the
Intellectual Property. No claim is pending or threatened to the effect that the
present or past operations of Xxxx infringe or conflict with the asserted rights
of others in respect of any Intellectual Property, and no claim is pending or
threatened to the effect that any of such Intellectual Property is invalid or
unenforceable.
3.14 ACCOUNTS AND NOTES RECEIVABLE. All unpaid accounts and notes receivable
outstanding at the date hereof constitute, and those outstanding at the Closing
Date will constitute, valid and enforceable claims arising in bona fide
transactions in the ordinary course of business, except as enforceability is
limited by applicable bankruptcy, reorganization, insolvency, moratorium,
fraudulent conveyance or similar laws affecting the enforcement of creditors
rights generally. There is (i) no account or note debtor who has refused or
threatened to refuse to pay its obligations or who has or threatened to set-off
such obligations for any reason, (ii) no account or note debtor who is to Xxxx'x
Best Knowledge insolvent or bankrupt and (iii) no account or note receivable
pledged to any third party. The reserves and allowances provided for on the
Balance Sheet have been established on the basis of historical experience in
accordance with generally accepted accounting principles. To the Best Knowledge
of Xxxx, no material
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customer of Xxxx is currently a debtor in any proceeding under the Federal
Bankruptcy Code or other similar law.
3.15 INVENTORIES. The inventories of Xxxx are, and at the Closing Date will
be, (i) of a quantity which is reasonable in the circumstances of Xxxx; and (ii)
of a quality which is substantially similar to the historical quality of Xxxx'x
inventory.
3.16 TAX MATTERS. For purposes of this Agreement, the term "Taxes" means all
taxes of any kind or nature, including but not limited to federal, state, local
and foreign income taxes, withholding taxes, branch profit taxes, gross receipts
taxes, franchise taxes, sales and use taxes, business and occupation taxes,
property taxes, VAT, custom duties or imposts, stamp taxes, excise taxes,
payroll taxes, intangible taxes and capital taxes and any penalties or interest
thereon. Xxxx has filed within the time and in the manner prescribed by law all
tax returns and reports required to be filed by it under the laws of the United
States and each state or other jurisdiction in which it conducts business
activities requiring the filing of tax returns or reports. Xxxx has paid or set
up adequate reserves in the Balance Sheet in respect of all Taxes. There are no
tax liens, whether imposed by the United States, any state, local, foreign or
other taxing authority, outstanding against Xxxx or its assets. All Taxes and
assessments that Xxxx is required to withhold or to collect have been duly
withheld or collected and all withholdings and collections have either been duly
and timely paid over to the appropriate governmental authorities or are,
together with the payments due or to become due in connection therewith, duly
reflected on the Balance Sheet in accordance with generally accepted accounting
principles.
3.17 BOOKS AND RECORDS. The books of account and other corporate financial
records of Xxxx are in all material respects complete and correct, have been
maintained in accordance with good business practices and matters contained
therein are appropriately and accurately reflected in the Financial Statements.
The corporate record book of Xxxx contains true and complete copies of all
meetings of its shareholders and directors.
3.18 DISPOSITION OF HOLDING COMPANY STOCK. Xxxx is not aware of any present
plan, intention or arrangement of the Shareholder to dispose of the Holding
Company stock to be received hereunder which would reduce the aggregate fair
value of the Holding Company stock (as measured as of the date of the exchange)
retained by the Shareholder to an amount less than 50% of the aggregate value of
all Xxxx stock immediately prior to the exchange.
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3.19 DISCLOSURE. Neither this Agreement (including the Schedules and Exhibits
attached hereto) nor any other document, certificate or statement furnished to
Monogenesis by or on behalf of Xxxx in connection with the transactions
contemplated hereby, when considered in the aggregate with all other such
documents, certificates or statements, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein not misleading.
3.20 BEST KNOWLEDGE OF XXXX. Xxxx represents and warrants that each time a
representation and warranty is based on "Best Knowledge" that Xxxx has made a
duly diligent investigation and inquiry.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER
The Shareholder represents and warrants, all of which representations and
warranties shall be true on the Closing Date and shall survive the Closing,
that:
4.1 AUTHORITY. The Shareholder has full power and authority to execute and
perform this Agreement and to exchange the shares of stock of Xxxx upon the
terms provided in this Agreement. The execution and delivery of this Agreement
has been duly authorized by the Shareholder. Neither the execution nor delivery
of this Agreement nor the performance, observation or compliance with its terms
and provisions will violate any provision of law, any order of court or other
governmental agency, or any indenture, agreement or other instrument to which
the Shareholder is a party, or by which he is bound or by which his property is
bound. No consent to the performance, observation or compliance with the terms
and conditions of this Agreement by the Shareholder is required from any third
party.
4.2 STOCK OWNERSHIP. All of the Common Stock of Xxxx is directly owned by the
Shareholder, as indicated herein, free and clear of all liens, encumbrances,
security interests, charges, pledges, options, restrictions on transfer, rights
of refusal or other adverse claims of any kind except as set forth on Schedule
4.2 attached hereto. No person owns or has any beneficial interest in any Common
Stock except the Shareholder. The Shareholder has good and marketable title to
the shares being. The Shareholder has not transferred or assigned, or entered
into any agreement or understanding to transfer or assign, any of the Common
Stock of Xxxx or any of the voting rights pertaining to the shares except as
described herein.
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4.3 DISPOSITION OF HOLDING COMPANY STOCK. The Shareholder does not have any
present plan, intention or arrangement to dispose of the Holding Company stock
to be received hereunder which would reduce the aggregate fair value of the
Holding Company stock (as measured as of the date of the exchange) retained by
the Shareholder to an amount less than 50% of the aggregate value of all Xxxx
stock immediately prior to the exchange.
4.4 INVESTMENT REPRESENTATIONS. (a) The Shareholder has received such material
information as has been requested for purposes of becoming fully familiar with
the financial condition of Xxxx and the expected condition of the Holding
Company, the administration of their business affairs, and their prospects for
future business.
(b) The Shareholder is fully aware and has been advised that the securities
received pursuant to this Agreement are speculative in nature and that neither
Xxxx nor the Holding Company make any assurance whatever concerning the present
or prospective value of the securities.
(c) The Shareholder understands that, with the exception of the 1,302,397
Common Shares which will be registered pursuant to the 1933 Act, the Common
Shares to be received by the Shareholder pursuant to this Agreement will not be
registered under the 1933 Act, on the ground that the securities are being
issued and sold in a transaction not involving any public offering and that,
consequently, the transaction is exempt from registration under the 1933 Act by
virtue of the provisions of Section 4(2) thereof; nor are the securities to be
registered under the securities laws of any state on the ground that the sale is
exempt, or registration of securities is not required, under the securities laws
of Tennessee in which state the Shareholder resides.
(d) The Shareholder understands that the reliance of Xxxx and the Holding
Company upon the above exemptions is predicated in part on the representation of
the Shareholder that such unregistered securities are being acquired for the
account of the Shareholder with no present intention of reselling or otherwise
distributing the same.
(e) The Shareholder understands that he will not be able to dispose of any
shares acquired pursuant to this Agreement, except such shares as are registered
as described in Article I, or any interest therein unless and until such shares
or interests have been registered under the 1933 Act and applicable state
securities laws or the Holding Company has received an opinion from counsel
satisfactory to it that registration is not required in connection
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with such disposition. The Shareholder understands that the Holding Company
will prohibit transfers of the shares which are not registered as described in
Article I in the absence of registration or the mentioned opinion of counsel and
a restrictive legend will be placed on the Class B Common Shares and on the
Common Shares received by the Shareholder which are not registered as described
in Article I reflecting these restrictions.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF MONOGENESIS
Monogenesis represents and warrants, all of which representations and
warranties shall be true on the Closing Date and shall survive the Closing,
that:
5.1 ORGANIZATION. Monogenesis is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the corporate power to carry on its business as it is now being conducted.
5.2 AUTHORITY. Monogenesis has the full power to execute and perform this
Agreement. The execution and delivery of this Agreement has been duly
authorized by all necessary corporate and other actions. Neither the execution
nor delivery of this Agreement nor the performance, observance or compliance
with its terms and conditions will violate any provision of law, any order of
court or other governmental agency, the Certificate of Incorporation or Bylaws
of Monogenesis or any indenture, agreement or other instrument to which
Monogenesis is a party, or by which it is bound. No consent to the performance,
observation or compliance with the terms and conditions of this Agreement by
Monogenesis is required from any third party.
5.3 SHAREHOLDERS. Monogenesis has in excess of 1,000 shareholders.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF JWSI
JWSI represents and warrants, all of which representations and warranties
shall be true on the Closing Date and shall survive the Closing, that:
6.1 ORGANIZATION. JWSI is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has the corporate
power to carry on its business as it is now being conducted.
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6.2 AUTHORITY. JWSI has the full power to execute and perform this Agreement.
The execution and delivery of this Agreement has been duly authorized by all
necessary corporate and other actions. Neither the execution nor delivery of
this Agreement nor the performance, observance or compliance with its terms and
conditions will violate any provision of law, any order of court or other
governmental agency, the Certificate of Incorporation or Bylaws of JWSI or any
indenture, agreement or other instrument to which JWSI is a party, or by which
it is bound. No consent to the performance, observation or compliance with the
terms and conditions of this Agreement by JWSI is required from any third party.
6.3 OWNERSHIP OF WARRANTS. JWSI owns the warrants of Xxxx to be exchanged
hereunder free and clear of all liens, encumbrances, security interests,
charges, pledges, options, restrictions on transfer, rights of refusal or other
adverse claims of any kind. JWSI has good and marketable title to the warrants
being transferred. JWSI has not transferred or assigned, or entered into any
agreement or understanding to transfer or assign, any of the warrants.
ARTICLE VII
COVENANTS OF XXXX
Xxxx hereby covenants and agrees with Monogenesis as follows:
7.1 CONDUCT OF BUSINESS UNTIL CLOSING DATE. Except as permitted or required
hereby or as Monogenesis may otherwise consent in writing, between the date
hereof and the Closing Date, Xxxx shall:
(a) operate its business only in the usual, regular and ordinary manner as
such business was conducted prior to the Balance Sheet Date and, to the extent
consistent with such operation, use its best efforts to (i) preserve the present
business organization intact, (ii) keep available the services of the present
employees, and (iii) preserve the present business relationship with customers,
suppliers and others having business dealings with it;
(b) maintain all properties necessary for the conduct of the business,
whether owned or leased, in substantially the same condition as they now are
(reasonable wear and tear which are not such as to materially adversely affect
operations and damage due to unavoidable casualty excepted);
(c) neither (i) encumber, mortgage or voluntarily subject to lien, except
for liens created pursuant to existing loan
14
agreements, any of the properties or assets, (ii) convey, transfer or acquire
any material asset or property other than in the ordinary course of business,
nor (iii) except in the ordinary course of business, incur any material fixed or
contingent obligation or enter into any material agreement, commitment or other
transaction or arrangement; and
(d) neither declare, set aside, pay or make any dividend or other
distribution or payment on or in respect of shares of its stock, nor directly or
indirectly redeem, retire, purchase or otherwise acquire any of its stock.
7.2 ACCESS TO PROPERTIES AND RECORDS. Xxxx shall give to Monogenesis and its
representatives reasonable access during normal business hours to Xxxx'x
properties, personnel, books, tax returns, contracts, commitments and records
and the right to make copies thereof. Xxxx shall furnish to Monogenesis and such
representatives all such additional documents and financial and other
information as Monogenesis or its representatives may from time to time
reasonably request and permit Monogenesis and such representatives to examine
all records and working papers relating to the preparation, review and audits of
Xxxx'x financial statements and tax returns.
7.3 ADVICE OF CHANGES. Between the date hereof and the Closing Date, Xxxx
shall advise Monogenesis promptly in writing of any fact of which any Xxxx
becomes aware, which, if known at the date hereof, would have been required to
be set forth or disclosed in or pursuant to this Agreement.
7.4 CONDUCT. Except as permitted or required hereby or as Xxxx may notify
Monogenesis in writing, Xxxx shall not enter into any transaction, take any
action, or fail to take any action, which would result in any of the
representations and warranties of Xxxx contained in this Agreement or in any
Schedule or Exhibit hereto not being true and correct at and as of the time
immediately after such transaction has been entered into or such event has
occurred and on the Closing Date.
7.5 APPROVALS, CONSENTS. Xxxx shall obtain in writing prior to the Closing
Date all approvals, consents and waivers, required to be obtained by Xxxx in
order to effectuate the transactions contemplated hereby, and shall deliver to
Monogenesis copies thereof, reasonably satisfactory in form and substance to
Monogenesis.
15
ARTICLE VIII
COVENANTS OF MONOGENESIS
Monogenesis hereby covenants and agrees with Xxxx as follows:
8.1 CONFIDENTIALITY; RETURN OF DOCUMENTS. Unless and until the transactions
contemplated by this Agreement are consummated, Monogenesis shall keep in
confidence all proprietary and financial information of Xxxx, and shall not,
except to the extent required by law or to the extent any such information is
otherwise publicly available, without the prior written consent of Xxxx, reveal
any such financial or proprietary information to any third party other than
securities regulatory authorities in connection with the Registration Statement
or counsel, accountants or experts retained by Monogenesis who shall be bound by
the same restrictions. If the transactions contemplated by this Agreement are
not consummated, Monogenesis shall return to Xxxx, at Xxxx'x request, all
documents supplied to Monogenesis by Xxxx pursuant to the provisions of this
Agreement.
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF MONOGENESIS
The obligation of Monogenesis to perform as provided in this Agreement is
subject to the satisfaction at or prior to the Closing Date of the following
conditions unless waived by Monogenesis in its sole discretion:
9.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Xxxx and the Shareholder contained in this Agreement and in any
Schedule or Exhibit hereto shall be true and accurate in all material respects
on and as of the Closing Date, with the same force and effect as if made on the
Closing Date, except as affected by transactions required or permitted hereby,
and except that any such representation or warranty made as of a specified date
(other than the date of this Agreement) shall have been true and accurate in all
material respects on and as of such date.
9.2 PERFORMANCE OF AGREEMENTS. Xxxx and the Shareholder shall have performed
and complied with all covenants, obligations and agreements to be performed or
complied with, on or before the Closing Date pursuant to this Agreement or any
Schedule or Exhibit hereto, including, but not limited to, the transfer of the
Shares to the Holding Company.
9.3 XXXX'X CERTIFICATE. Monogenesis shall have received an accurate
certificate, dated the Closing Date, of Xxxx, satisfactory
16
in form and substance to Monogenesis, certifying as to the fulfillment of the
matters specified in Sections 9.1 and 9.2.
9.4 SECRETARY'S CERTIFICATE. Monogenesis shall have received an accurate
certificate, dated the Closing Date, of the Secretary or Assistant Secretary of
Xxxx, satisfactory in form and substance to Monogenesis, with respect to the
resolutions adopted by the Board of Directors of Xxxx approving this Agreement
and the transactions contemplated hereby.
9.5 CONSENTS, AUTHORIZATIONS. All consents, authorizations, orders or
approvals of, and filings or registrations with and the expiration of all
waiting periods imposed by, any third party, including, without limitation, any
federal, state or local commission, board or other regulatory body, lender,
lessor, licensor or supplier which are required for or in connection with the
execution and delivery of this Agreement by Xxxx and the Shareholder and the
consummation of the transactions contemplated hereby shall have been duly
obtained or made and shall be in full force and effect.
9.6 LEGISLATION. No federal, state or local statute, rule or regulation shall
have been enacted after the date of this Agreement which prohibits, restricts,
delays or materially adversely affects the business of Xxxx or the consummation
of the transactions contemplated by this Agreement or any of the conditions to
the consummation of such transactions. No temporary restraining order or
injunction shall be in effect, or threatened by a governmental agency,
restraining the consummation of the transactions contemplated hereby.
9.7 JWSI WARRANTS. Xxxx shall have sold to JWSI warrants to purchase 30 of
its shares of common stock.
9.8 ISSUANCE, REGISTRATION AND DISTRIBUTION OF SHARES AND WARRANTS. The
Holding Company shall have been formed and shall have taken all steps necessary
to issue the Shares and Warrants in accordance with this Agreement. Monogenesis
shall have resolved to distribute to each of its shareholders 125 Common Shares
and 400 Warrants of the Holding Company to be issued to Monogenesis for each
share of stock of Monogenesis held by such shareholder. The Registration
Statement shall have been filed registering 1,302,937 of the Common Shares to be
issued to the Shareholder, all of the Common Shares to be issued to Monogenesis
and JWSI, all of the Warrants and all of the Common Shares underlying the
Warrants, and such Registration Statement shall have become effective.
17
9.9 GOOD STANDING CERTIFICATES. Monogenesis shall have received certificates
acceptable to it from the Secretary of State of (i) the jurisdiction in which
Xxxx is incorporated, certifying that Xxxx is in good standing under the laws of
such jurisdiction and a certified copy of the Certificate of Incorporation of
Xxxx and all amendments, and (ii) each jurisdiction in which Xxxx is qualified
to do business as a foreign corporation, certifying that Xxxx is so qualified
and in good standing.
9.10 INTERIM FINANCIAL STATEMENTS. Monogenesis shall have received the
unaudited balance sheet of Xxxx as of the month-end immediately preceding the
Closing Date (or the prior month-end if the Closing occurs prior to the tenth
business day of a month), and the related unaudited statements of earnings,
retained earnings and cash flows for the portion then ended of the fiscal year
commencing April 1, 1996, presented on a comparative basis with financial
statements of the same portion of the preceding fiscal year, prepared by Xxxx
and accompanied by a certificate in the form of Exhibit 3.5 attached hereto
executed by the persons indicated on said Exhibit. Such statements for the
fiscal year commencing April 1, 1996 shall not differ from those for the
comparable period of the preceding fiscal year in any materially adverse
respect.
9.11 CASUALTY. There shall have not occurred any fire, flood, earthquake or
other casualty to assets of Xxxx resulting in a cost of repair or replacement of
more than $25,000 in excess of applicable insurance coverage.
ARTICLE X
CONDITIONS TO OBLIGATIONS OF XXXX, THE SHAREHOLDER AND JWSI
The obligation of Xxxx, the Shareholder and JWSI to perform their obligations
under this Agreement is subject to the satisfaction at or prior to the Closing
Date of the following conditions unless waived by Xxxx, the Shareholder and JWSI
in their sole discretion:
10.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Monogenesis contained in this Agreement or in any Schedule or
Exhibit hereto shall be true and accurate in all material respects on and as of
the Closing Date, with the same force and effect as if made on the Closing Date,
except as affected by transactions required or permitted hereby, and except that
any such representation or warranty made as of a specified date (other than the
date of this Agreement), shall have been true and accurate in all material
respects on and as of such date.
18
10.2 PERFORMANCE OF AGREEMENTS. Monogenesis shall have performed and complied
in all material respects with all covenants, obligations and agreements to be
performed or complied with by it on or before the Closing Date pursuant to this
Agreement or any Schedule or Exhibit hereto.
10.3 OFFICER'S CERTIFICATION. Xxxx and the Shareholder shall have received an
accurate certificate, dated the Closing Date, of a duly authorized officer of
Monogenesis, satisfactory in form and substance to Xxxx and the Shareholder,
certifying as to the fulfillment of the matters specified in Sections 10.1 and
10.2.
10.4 SECRETARY'S CERTIFICATE. Xxxx and the Shareholder shall have received an
accurate certificate, dated the Closing Date, of the Secretary or Assistant
Secretary of Monogenesis, satisfactory in form and substance to Xxxx and the
Shareholder, with respect to the resolutions adopted by the Board of Directors
of Monogenesis approving this Agreement and the transactions contemplated
hereby.
10.5 CONSENTS, AUTHORIZATIONS. All consents, authorizations, orders or
approvals of, and filings or registrations with, and the expiration of all
waiting periods imposed by any third party, including without limitation, any
federal, state or local commission, board or other regulatory body which are
required for or in connection with the execution and delivery by Monogenesis of
this Agreement and the consummation by Monogenesis of the transactions
contemplated hereby shall have been obtained or made and shall be in full force
and effect.
10.6 LEGISLATION. No federal, state or local statute, rule or regulation
shall have been enacted after the date of this Agreement which prohibits,
restricts, delays or materially adversely affects the consummation of the
transactions contemplated by this Agreement or any of the conditions to the
consummation of such transactions. No temporary restraining order or injunction
shall be in effect, or threatened by a governmental agency, restraining the
consummation of the transactions contemplated hereby.
10.7 JWSI WARRANTS. Xxxx shall have sold to JWSI warrants to purchase 30 of
its shares of common stock.
10.8 ISSUANCE, REGISTRATION AND DISTRIBUTION OF SHARES AND WARRANTS. The
Holding Company shall have been formed and shall have taken all steps necessary
to issue the Shares in accordance with this Agreement. Monogenesis shall have
resolved to distribute to each of its shareholders 125 Common Shares and 400
Warrants of the Holding Company to be issued to Monogenesis for each share of
19
stock of Monogenesis held by such shareholder. The Registration Statement shall
have been filed registering 1,302,937 of the Common Shares to be issued to the
Shareholder, all of the Common Shares to be issued to Monogenesis and JWSI, all
of the Warrants and all of the Common Shares underlying the Warrants, and such
Registration Statement shall have be become effective.
ARTICLE XI
TERMINATION
11.1 TERMINATION. This Agreement may be terminated at any time prior to
the Closing Date:
(a) by Xxxx or Monogenesis at any time after ________, 1996; provided,
however, that if the Registration Statement has not become effective and
Monogenesis is diligently pursuing the registration of the Shares then
Monogenesis may extend such date beyond _________, 1996 to a date within ten
business days of the effective date, but not later than ___________, 199 ;
(b) by Monogenesis, if the after tax earnings of Xxxx do not equal an
average of $________ per month for the period beginning immediately after the
end of the last fiscal year and ending on the day prior to the effective date of
the Registration Statement;
(c) by Monogenesis, if there has been a violation or breach by Xxxx or
the Shareholder of any material agreement, representation or warranty of any of
them contained in this Agreement and such violation or breach has not been
waived by Monogenesis, or, with respect to a violation or breach of an
agreement, cured within ten business days after the receipt of written notice
thereof; or
(d) by Xxxx, if there has been a violation or breach by Monogenesis of
any material agreement, representation or warranty of Monogenesis contained in
this Agreement and such violation or breach has not been waived by Xxxx or, with
respect to a violation or breach of an agreement, cured within ten business days
after the receipt of written notice thereof.
In the event of termination of this Agreement and abandonment of the
transactions contemplated hereby pursuant to this Section 11.1, written notice
thereof shall forthwith be given to the other party and this Agreement shall
terminate and the transactions contemplated hereby shall be abandoned, without
further action by any of the parties hereto. The provisions of Sections 8.1,
13.1 and 13.2 shall survive any such termination.
20
ARTICLE XII
INDEMNIFICATION
12.1 INDEMNIFICATION. (a) Xxxx and the Shareholder shall, jointly and
severally, indemnify, defend and save Monogenesis harmless from, against, for
and in respect of the following: (i) any damages, losses, obligations,
liabilities, claims, actions or causes of action sustained or suffered by
Monogenesis and arising from a breach of any representation, warranty, covenant
or agreement of Xxxx or the Shareholder contained in or made pursuant to this
Agreement (including the Schedules and Exhibits attached hereto), or in any
certificate, instrument or agreement delivered by Xxxx or the Shareholder
pursuant hereto or in connection with the transactions contemplated hereby; and
(ii) all reasonable costs and expenses (including, without limitation,
reasonable attorneys', accountants', and other professional fees and expenses)
incurred by Monogenesis in connection with any action, suit, proceeding, demand,
investigation, assessment or judgment incident to any of the matters indemnified
against under this Section 12.1(a). No claim, demand, suit or cause of action
shall be brought against Xxxx under or pursuant to this Section 12.1(a) with
respect to the representations and warranties set forth in Articles III and IV
hereof unless Monogenesis gives Xxxx and the Shareholder written notice, with
reasonable specificity, of the existence of any such claim, demand, suit or
cause of action under this Agreement. Upon the giving of such written notice as
aforesaid, Monogenesis shall have the right, in addition to all other remedies
available to it, to commence legal proceedings for the enforcement of its rights
under this Agreement. Monogenesis, at its option and with at least two days
advance notice to the affected party, may recover any such liability by set off
against payments otherwise required to be made by Monogenesis to such party
pursuant to any agreement between Monogenesis and such party.
(b) Monogenesis shall indemnify, defend and save Xxxx and the
Shareholder harmless from, against, for and in respect of the following: (i)
any damages, losses, obligations, liabilities, claims, actions or causes of
action sustained or suffered by Xxxx or the Shareholder and arising from a
breach of any representation, warranty, covenant or agreement of Monogenesis
contained in or made pursuant to this Agreement or in any certificate,
instrument or agreement delivered by it pursuant hereto or in connection with
the transactions contemplated hereby; and (ii) all reasonable costs and expenses
(including, without limitation, reasonable attorneys', accountants', and other
professional fees and expenses) incurred by Xxxx or the Shareholder in
connection with any action, suit, proceeding, demand, investigation, assessment
or judgment incident to any of the matters indemnified against under this
Section
21
12.1(b). No claim, demand, suit or cause of action shall be brought against
Monogenesis under or pursuant to this Section 12.1(b) unless such party gives
Monogenesis written notice, with reasonable specificity, of the existence of any
such claim, demand, suit or cause of action under this Agreement. Upon the
giving of such written notice as aforesaid, such party shall have the right, in
addition to all other remedies available to it, to commence legal proceedings
for the enforcement of its rights under this Agreement.
12.2 THIRD PARTY CLAIMS. With respect to claims resulting from the
assertion of liability by third parties, the obligations and liabilities of the
party responsible for indemnification (the "Indemnifying Party") hereunder with
respect to indemnification claims by the party entitled to indemnity (the
"Indemnified Party") shall be subject to the following terms and conditions: (i)
the Indemnified Party shall give prompt written notice to the Indemnifying Party
of any assertion of liability by a third party which might give rise to a claim
by the Indemnified Party against the Indemnifying Party based on the indemnity
agreements contained in Section 11.1 hereof, stating the nature and basis of
said assertion and the amount thereof, to the extent known; and (ii) the
Indemnifying Party shall not make any settlement of any claims without the
written consent of the Indemnified Party; provided, however, that if an
Indemnified Party does not consent to a settlement proposed by the Indemnifying
Party and accepted by the adverse third party, the liability of the Indemnifying
Party shall be limited to the amount that would have been paid in such
settlement.
12.3 REMEDIES CUMULATIVE. The remedies provided for in this Article XII
shall be cumulative and shall not preclude assertion by the Indemnified Party of
any other rights or the seeking of any other remedies against the Indemnifying
Party.
12.4 RECOVERIES. In the event an Indemnified Party subsequently receives
payment (including without limitation proceeds of insurance and payments on
accounts receivable) with respect to a matter for which it has been fully
indemnified by the Indemnifying Party, the Indemnified Party shall promptly pay
the amount of such payment up to the indemnification received, to the
Indemnifying Party.
ARTICLE XIII
MISCELLANEOUS
13.1 EXPENSES; TRANSFER TAXES. All fees, costs and expenses incurred by
Xxxx, the Shareholder or Monogenesis in connection
22
with, relating to or arising out of the preparation, execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby, including, without limitation, organizational costs of the
Holding Company, fees of the transfer agent and legal and accounting fees and
expenses, shall be borne by Xxxx.
13.2 BINDING EFFECT. This Agreement shall become binding and effective when
executed by the parties hereto. This Agreement shall not be assignable by any
party without the prior written consent of the other parties, except that
without relieving Monogenesis of any of its obligations under this Agreement,
Monogenesis may assign this Agreement to any of its affiliates. Subject to the
foregoing, this Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the respective successors, heirs, legal representatives, and
assigns of the parties hereto. This Agreement constitutes an agreement among the
parties hereto and none of the agreements, covenants, representations or
warranties contained herein shall be for the benefit of any third party not a
party to this Agreement.
13.3 ENTIRE AGREEMENT; AMENDMENTS. This Agreement (including the Schedules and
Exhibits attached hereto) contains the entire understanding of the parties with
respect to its subject matter. This Agreement supersedes all prior agreements
and understandings between the parties with respect to the subject matter
hereof. This Agreement may be amended only by a written instrument duly executed
by the parties, and any condition to a party's obligations hereunder may only be
waived in writing by such party.
13.4 HEADINGS. The article and section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13.5 NOTICES. All notices, claims, certificates, requests, demands and other
communications hereunder shall be in writing and shall be deemed given if
delivered personally, if mailed (by registered or certified mail, return receipt
requested and postage prepaid), if sent by reputable overnight courier service
for next business day delivery, or if sent by facsimile transmission, as
follows:
23
if to Xxxx, to: Xxxxxxx X. Xxxx, President
Xxxx Engineering and Sales, Inc.
0000 Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxxx X. Xxxxxxxxx, Esq.
Xxxxxxxxx & Xxxxxxx
Suite 200, Main Place
P. O. Box 2149
Xxxxxxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
if to Monogenesis or Xxxx X. Xxxxxx, President
JWSI, to: Monogenesis Corporation
Drawer 00, Xxxxxx Xxxxx Xxxx
Xxxxxx, Xxxx Xxxxxxxx 00000-0000
Telephone: (000)000-0000
Facsimile: (000)000-0000
with a copy to: Xxxx X. Xxxxxxxx, Esq.
Xxxxx Xxxxxx & Xxxxx
0000 Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
if to the Shareholder, to: his address set forth on the
books of Xxxx.
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. Any such
communication shall be effective on the date of receipt (or, if received on a
non-business day, on the first business day after the date of receipt).
13.6 PUBLICITY. The parties agree that, except as otherwise required by law,
the issuance of any reports, statements or releases pertaining to this Agreement
or the transactions contemplated hereby is subject to mutual consent.
13.7 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware (without giving
effect to its laws regarding conflicts of law).
24
13.8 WAIVERS. Any provision of this Agreement may be waived only by a written
instrument executed by the party to be charged with such waiver. The waiver by
any party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach.
13.9 DEFINED TERMS. Throughout this Agreement various terms have been
defined by being enclosed in quotation marks, usually in parentheses, and used
with their initial letters capitalized. Unless the context otherwise requires,
such defined terms shall have their designated meaning whenever used in this
Agreement or any attached schedules.
13.10 FEES. If there is any litigation between the parties related to this
Agreement or the transactions contemplated by this Agreement, the prevailing
party shall be entitled to recover all reasonable costs and expenses (including,
without limitation, reasonable attorneys', accountants' and other professional
fees and expenses).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered on the date first above written.
XXXX ENGINEERING AND SALES, INC.
By: ______________________________
Title: ______________________________
MONOGENESIS CORPORATION
By: ______________________________
Xxxx X. Xxxxxx, President
XXXXXX XXXXXX AND SONS, INC.
By: ______________________________
Title: ______________________________
THE SHAREHOLDER
______________________________
Xxxxxxx X. Xxxx
25
SCHEDULE 1.1
HOLDING COMPANY STOCK TO BE
----------------------------
ISSUED TO THE SHAREHOLDER AND JWSI
----------------------------------
RESTRICTED REGISTERED CLASS B
NAME COMMON SHARES COMMON SHARES COMMON SHARES
-------------------------------------------------------------------
Xxxxxxx X. Xxxx 3,908,813 1,302,937 750,000
-------------------------------------------------------------------
Xxxxxx Xxxxxx &
Sons, Inc. -0- 238,470 -0-
-------------------------------------------------------------------
-------------------------------------------------------------------
TOTAL 3,908,813 1,541,407 750,000
-------------------------------------------------------------------
SCHEDULE 3.1
JURISDICTIONS IN WHICH XXXX IS QUALIFIED TO DO BUSINESS
-------------------------------------------------------
Tennessee
OFFICERS AND DIRECTORS OF XXXX
-------------------------------
Name Office
---- ------
Xxxxxxx X. Xxxx President, Chairman of
the Board, Director
Xxxxx Xxx Xxxxxx Vice President, Secretary/
Treasurer, Director
Xxxxx X. Xxxxxxxxx Director
M. Xxxxx Xxxxxx Director
Xxxxxx Xxx Xxxxxxx Director
SCHEDULE 3.2
CONVERTIBLE SECURITIES, OPTIONS,
WARRANTS, AGREEMENTS RELATING TO STOCK OF XXXX
----------------------------------------------
1. Xxxxxx Xxxxxx & Sons, Inc. Warrants to purchase 30 shares of Common Stock.
SCHEDULE 3.5
FINANCIAL STATEMENTS
---------------------
See financial statements included in Registration Statement.
SCHEDULE 3.12
EMPLOYEE BENEFIT PLANS
-----------------------
1. 401(k) plan established November, 1996, first payment due December,
1996.
SCHEDULE 3.13
INTELLECTUAL PROPERTY
----------------------
1. Patent No. 4,270,474 issued 6/2/81 for dual position needle positioner
for stitching machine.
2. Patent No. 4,271,775 issued 6/9/81 for needle positioner for high
speed stitching machine.
3. Patent No. 4,677,923 issued on 7/7/87 for card feeding apparatus.
4. Patent No. 4,859,260 issued on 8/22/89 for apparatus and method for
cutting and sealing belt loop ends and belt loop construction.
5. Patent No. 4,979,934 issued on 12/25/90 for card feeding and holding
apparatus.
6. Patent No. 5,303,910 issued on 4/19/94 for pick-up means for use with
limp sheet material.
7. Patent No. 5,313,892 issued on 5/24/94 for table with height and tilt
adjustment.
8. Patent No. 5,458,075 issued on 10/17/95 for electronically geared
sewing machine (subject to certain royalty rights under Joint
Development Agreement).
9. Trademark Reg. No. 1,142,004, registered 12/2/80, "xxxx" for presser
foot lifts for stitching machines, needle positioners for stitching
machines in Class 7.
EXHIBIT 1.3
FORM OF COMMON STOCK PURCHASE WARRANTS
See exhibit to Registration Statement.
EXHIBIT 3.5
CERTIFICATE RELATING TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS CERTIFICATE
--------------------------------
The undersigned, President of Xxxx Engineering and Sales, Inc. (the
"Corporation"), certifies that:
1. The balance sheet of the Corporation as of September 30, 1996 and the
income statement of the Corporation for the period beginning on April 1, 1996
and ending on September 30, 1996 (collectively, the "Financial Statements"), all
as attached hereto and provided in connection with the Stock Purchase Agreement
and Plan of Reorganization among the Corporation, its shareholders, Xxxxxx
Xxxxxx & Sons, Inc. and Monogenesis Corporation dated _____________, 1996, are
complete and present fairly the financial position of the Corporation.
2. The undersigned is not aware of any matters which are not reflected on
such Financial Statements or which would make such Financial Statements
misleading in any manner.
Witness the signature of the undersigned as of this ____ day of
______________, 1996.
--------------------------------
Xxxxxxx X. Xxxx, President
Xxxx Engineering and Sales, Inc.
