EXHIBIT 2.1
SHARE EXCHANGE AGREEMENT BETWEEN GOLDEN HOLE, INC.
AND INTERNATIONAL PLASTICS AND EQUIPMENT CORP. DATED
JANUARY 14, 2002
SHARE EXCHANGE AGREEMENT
by and between
GOLDEN HOLE, INC., A NEVADA CORPORATION
and
INTERNATIONAL PLASTICS AND EQUIPMENT CORP., A PENNSYLVANIA CORPORATION
Dated as of January 14, 2002
TABLE OF CONTENTS
PAGE
THE SHARE EXCHANGE.........................................................................................4
1.1 THE SHARE EXCHANGE.................................................................4
1.2 NUMBER OF SHARES OF GHI COMMON STOCK...............................................4
1.3 CONVERSION OF IPEC COMMON STOCK....................................................4
1.4 [INTENTIONALLY LEFT BLANK].........................................................5
1.5 EFFECTIVE TIME.....................................................................5
1.6 FRACTIONAL SHARES..................................................................5
1.7 RESERVATION OF SHARES..............................................................5
1.8 ADJUSTMENTS TO EXCHANGE RATIO......................................................5
1.9 DISSENTING SHARES..................................................................5
1.10 EXCHANGE OF CERTIFICATES...........................................................6
1.11 NO FURTHER OWNERSHIP RIGHTS IN IPEC COMMON STOCK...................................6
1.12 LOST, STOLEN OR DESTROYED CERTIFICATES.............................................6
1.13 EXEMPTION FROM REGISTRATION........................................................6
1.14 REPORTING OF SHARE EXCHANGE........................................................6
1.15 BOARD OF DIRECTORS OF GHI..........................................................6
1.16 TAKING OF NECESSARY ACTION; FURTHER ACTION.........................................6
THE CLOSING................................................................................................7
2.1 TIME AND PLACE OF CLOSING..........................................................7
2.2 OBLIGATIONS OF IPEC AND THE IPEC SHAREHOLDERS AT OR PRIOR TO THE CLOSING...........7
2.3 OBLIGATIONS OF GHI AT OR PRIOR TO THE CLOSING......................................7
REPRESENTATIONS AND WARRANTIES OF IPEC.....................................................................8
3.1 ORGANIZATION AND QUALIFICATION.....................................................8
3.2 CAPITALIZATION.....................................................................8
3.3 SUBSIDIARIES AND AFFILIATES........................................................8
3.4 OPTIONS OR OTHER RIGHTS............................................................8
3.5 OWNERSHIP OF SHARES................................................................9
3.6 VALIDITY AND EXECUTION OF AGREEMENT................................................9
3.7 NO CONFLICT........................................................................9
3.8 CONSENTS AND APPROVALS.............................................................9
3.9 VIOLATION OF LAWS, PERMITS, ETC....................................................9
3.10 BOOKS AND RECORDS.................................................................10
3.11 IPEC FINANCIAL STATEMENTS.........................................................10
3.12 UNDISCLOSED LIABILITIES...........................................................10
3.13 TITLE TO PROPERTY; ENCUMBRANCES...................................................10
3.14 TAXES.............................................................................10
3.15 LITIGATION........................................................................11
3.16 CONTRACTS AND OTHER AGREEMENTS....................................................11
3.17 ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE..........................................12
3.18 COMPENSATION ARRANGEMENTS; OFFICERS AND DIRECTORS.................................12
3.19 ERISA.............................................................................12
3.20 OPERATIONS........................................................................12
3.21 INTANGIBLE PROPERTY AND INTELLECTUAL PROPERTY.....................................14
3.22 EMPLOYEE RELATIONS................................................................14
3.23 INSURANCE.........................................................................14
3.24 LICENSES AND PERMITS..............................................................15
3.25 BROKERS...........................................................................15
3.26 DISCLOSURE........................................................................15
REPRESENTATIONS AND WARRANTIES OF GHI.....................................................................15
4.1 ORGANIZATION AND QUALIFICATION....................................................15
4.2 CAPITALIZATION....................................................................15
4.3 SUBSIDIARIES AND AFFILIATES.......................................................15
4.4 OPTIONS OR OTHER RIGHTS...........................................................15
4.5 VALIDITY AND EXECUTION OF AGREEMENT...............................................16
4.6 NO CONFLICT.......................................................................16
4.7 CONSENTS AND APPROVALS............................................................16
4.8 VIOLATION OF LAWS, PERMITS, ETC...................................................16
4.9 BOOKS AND RECORDS.................................................................16
4.10 GHI FINANCIAL STATEMENTS..........................................................17
4.11 UNDISCLOSED LIABILITIES...........................................................17
4.12 TITLE TO PROPERTY; ENCUMBRANCES...................................................17
4.13 TAXES.............................................................................17
4.14 LITIGATION........................................................................18
4.15 CONTRACTS AND OTHER AGREEMENTS....................................................18
4.16 COMPENSATION ARRANGEMENTS; OFFICERS, DIRECTORS AND EMPLOYEES......................18
4.17 ERISA.............................................................................18
4.18 OPERATIONS........................................................................18
4.19 INTANGIBLE PROPERTY AND INTELLECTUAL PROPERTY.....................................20
4.20 INSURANCE.........................................................................21
4.21 LICENSES AND PERMITS..............................................................21
4.22 BROKERS...........................................................................21
4.23 APPROVAL OF SHARE EXCHANGE........................................................21
4.24 SEC REPORTING STATUS..............................................................21
4.25 INVESTMENT COMPANY................................................................21
4.26 TRADING STATUS....................................................................21
4.27 DISCLOSURE........................................................................21
ACTIONS PRIOR TO CLOSING..................................................................................21
5.1 CORPORATE EXAMINATIONS AND INVESTIGATIONS.........................................21
5.2 CONDUCT AND PRESERVATION OF BUSINESS OF GHI.......................................22
5.3 CONDUCT AND PRESERVATION OF BUSINESS OF IPEC......................................22
5.4 ADVICE OF CHANGES.................................................................22
5.5 NQB PINK SHEETS..................................................................23
5.6 SEC REPORTS.......................................................................23
5.7 SHAREHOLDER APPROVALS.............................................................23
5.8 OTHER AGREEMENTS..................................................................23
CONDITIONS PRECEDENT TO CLOSING...........................................................................23
6.1 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF GHI TO COMPLETE THE CLOSING............23
6.2 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF IPEC TO COMPLETE THE CLOSING...........25
POST-CLOSING COVENANTS....................................................................................26
7.1 FURTHER INFORMATION...............................................................26
7.2 RECORD RETENTION..................................................................26
7.3 POST-CLOSING ASSISTANCE...........................................................27
7.4 SEC REPORTING.....................................................................27
SURVIVAL; INDEMNIFICATION.................................................................................27
8.1 SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND WARRANTIES............................27
TERMINATION OF AGREEMENT..................................................................................28
9.1 TERMINATION.......................................................................28
9.2 SURVIVAL AFTER TERMINATION........................................................28
MISCELLANEOUS.............................................................................................28
10.1 EXPENSES..........................................................................28
10.2 FURTHER ASSURANCES................................................................28
10.3 NOTICES...........................................................................29
10.4 MEDIATION.........................................................................30
10.5 ARBITRATION.......................................................................30
10.6 PUBLICITY.........................................................................31
10.7 ENTIRE AGREEMENT..................................................................31
10.8 WAIVERS AND AMENDMENTS............................................................31
10.9 GOVERNING LAW.....................................................................31
10.10 BINDING EFFECT, NO ASSIGNMENT.................................................31
10.11 COUNTERPARTS..................................................................31
10.12 EXHIBITS AND SCHEDULES........................................................31
10.13 EFFECT OF DISCLOSURE ON SCHEDULES.............................................31
10.14 HEADINGS......................................................................31
10.15 SEVERABILITY OF PROVISIONS....................................................31
THIS SHARE EXCHANGE AGREEMENT is entered into as of January 14, 2002, by and
between GOLDEN HOLE, INC., a Nevada corporation ("GHI"), and INTERNATIONAL
PLASTICS AND EQUIPMENT CORP., a Pennsylvania corporation ("IPEC").
RECITALS
A. The Boards of Directors of each of GHI and IPEC have determined that it is
in the best interests of GHI and IPEC (as applicable) and their respective
shareholders that GHI acquire IPEC through a statutory share exchange
under the laws of Nevada (the "SHARE EXCHANGE") and, in furtherance
thereof, have approved the Share Exchange, this Agreement and the
transactions contemplated hereby.
B. Pursuant to the Share Exchange, among other things, and subject to the
terms and conditions of this Agreement, all of the shares of capital stock
of IPEC which are issued and outstanding immediately prior to the
Effective Time (as defined below) shall be converted into the right to
receive shares of common stock, $0.001 par value per share, of GHI ("GHI
COMMON STOCK") on the terms and subject to the conditions set forth
herein.
C. GHI and IPEC desire to make certain representations, warranties, covenants
and agreements in connection with the Share Exchange.
AGREEMENT
NOW, THEREFORE, for and in consideration of the premises and the mutual
agreements hereinafter set forth, in accordance with the provisions of
applicable law, the parties hereby agree as follows:
ARTICLE I
THE SHARE EXCHANGE
1.1 THE SHARE EXCHANGE. At the Effective Time and upon the terms and subject
to the conditions of this Agreement and the applicable provisions of the
Nevada General Corporation Law and all amendments and additions thereto
(the "NEVADA LAW") and the Pennsylvania Corporation Law and all amendments
and additions thereto (the "PENNSYLVANIA LAW"), by virtue of the Share
Exchange and without any action on the part of GHI or the holder of any
shares of IPEC Common Stock or IPEC Options, the following shall occur:
1.2 NUMBER OF SHARES OF GHI COMMON STOCK. The stockholders of IPEC named on
SCHEDULE A attached to this Agreement (the "IPEC SHAREHOLDERS") shall
receive an aggregate of 9,489,796 shares of GHI Common Stock on a pro rata
basis based on their percentage shareholdings in IPEC at the Effective
Date, and IPEC shall become a wholly-owned subsidiary of GHI.
1.3 CONVERSION OF IPEC COMMON STOCK. Each share of IPEC Common Stock issued
and outstanding immediately prior to the Effective Time (other than any
Dissenting Shares, as
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such term is defined in SECTION 1.9) will be automatically cancelled and
extinguished and each share of IPEC Common Stock that is issued and
outstanding immediately prior to the Effective Time shall be converted
automatically into the right to receive 2.7652975 shares of GHI Common
Stock (the "EXCHANGE RATIO"), rounded to the nearest whole share of GHI
Common Stock.
1.4 [INTENTIONALLY LEFT BLANK.]
1.5 EFFECTIVE TIME. The Share Exchange will become effective upon the proper
filing of Articles of Exchange with the Department of State of the
Commonwealth of Pennsylvania, or such other jurisdictions as required (the
"EFFECTIVE TIME").
1.6 FRACTIONAL SHARES. No fraction of a share of GHI Common Stock will be
issued upon such exchange of shares of IPEC Common Stock. Instead amounts
of shares will be rounded to the nearest whole number.
1.7 RESERVATION OF SHARES. GHI will reserve sufficient shares of GHI Common
Stock for issuance pursuant to SECTION 1.3.
1.8 ADJUSTMENTS TO EXCHANGE RATIO. The Exchange Ratio shall be equitably
adjusted to reflect fully the effect of any stock split, reverse split,
stock combination, stock dividend (including any dividend or distribution
of securities convertible into GHI Common Stock or IPEC Common Stock),
reorganization, reclassification, recapitalization or other like change
with respect to GHI Common Stock or IPEC Common Stock, the effective date
of which occurs after the date hereof and prior to the Effective Time.
1.9 DISSENTING SHARES.
(a) Notwithstanding any provision of this Agreement to the contrary, any
shares of IPEC Common Stock held by a holder who has demanded and
perfected appraisal rights for such shares in accordance with the
Pennsylvania Law and who, as of the Effective Time, has not
effectively withdrawn or lost such appraisal or dissenters' rights
("DISSENTING SHARES") shall not be converted into or represent a
right to receive GHI Common Stock pursuant to SECTIONS 1.2 and 1.3,
but the holder thereof shall only be entitled to such rights as are
granted by the Pennsylvania Law.
(b) Notwithstanding the provisions of SECTION 1.9(A), if any holder of
shares of IPEC Common Stock who demands appraisal of such shares
under the Pennsylvania Law shall effectively withdraw or lose
(through failure to perfect or otherwise) the right to appraisal,
then, as of the later of (i) the Effective Time or (ii) the
occurrence of such event, such holder's shares shall automatically be
converted into and represent only the right to receive GHI Common
Stock as provided in SECTIONS 1.2 and 1.3, without interest thereon,
in accordance with SECTIONS 1.2 and 1.3.
(c) IPEC shall give GHI (i) prompt notice of its receipt of any written
demands for appraisal of any shares of GHI Common Stock, withdrawals
of such demands, and any other instruments relating to the Share
Exchange received by IPEC and (ii) the
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opportunity to participate in all negotiations and proceedings with
respect to demands for appraisal under the Pennsylvania Law.
1.10 EXCHANGE OF CERTIFICATES. At Closing, or as soon as practicable
thereafter, GHI shall have its transfer agent issue a letter of
transmittal to each IPEC Shareholder listed on SCHEDULE A hereto. After
having received a completed letter of transmittal and certificates
representing such IPEC Shareholder's IPEC Common Stock, the transfer agent
shall deliver certificates representing the whole number of shares of GHI
Common Stock into which such IPEC Shareholder's shares of IPEC Common
Stock shall have been exchanged as set forth herein.
1.11 NO FURTHER OWNERSHIP RIGHTS IN IPEC COMMON STOCK. All shares of GHI Common
Stock issued upon the surrender for exchange of shares of IPEC Common
Stock in accordance with the terms hereof shall be deemed to have been
issued in full satisfaction of all rights pertaining to such shares of
IPEC Common Stock, and there shall be no further registration of transfers
on the records of the Company of shares of IPEC Common Stock which were
outstanding immediately prior to the Effective Time. If, after the
Effective Time, certificates are presented to the GHI for any reason, they
shall be canceled and exchanged as provided in this Article 1.
1.12 LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any certificates
evidencing shares of IPEC Common Stock shall have been lost, stolen or
destroyed, the transfer agent for GHI shall issue certificates
representing such shares of GHI Common Stock in exchange for such lost,
stolen or destroyed certificates, upon the making of an affidavit of that
fact by the holder thereof.
1.13 EXEMPTION FROM REGISTRATION. The shares of GHI Common Stock to be issued
pursuant to SECTIONS 1.2 and 1.3 in connection with the Share Exchange
will be issued in a transaction exempt from registration under the
Securities Act of 1933, as amended (including the rules and regulations
promulgated thereunder, the "SECURITIES ACT").
1.14 REPORTING OF SHARE EXCHANGE. For federal, state, and local income tax
return reporting purposes, all parties agree to treat the Share Exchange
as a nontaxable exchange under Section 368 of the Internal Revenue Code.
1.15 BOARD OF DIRECTORS OF GHI. Simultaneously at Closing, the number of
directors of GHI shall be increased to three (3). All of the existing
officers and directors of GHI shall resign from their positions and the
following persons shall be appointed to fill the vacancies: Xxxxxx
Xxxxxxxx, Xx., Xxxxxx X. Xxxxxxxx, and Xxxxxxx X. Xxxx, Xx.
1.16 TAKING OF NECESSARY ACTION; FURTHER ACTION. If, at any time after the
Effective Time, any such further action is necessary or desirable to carry
out the purposes of this Agreement, the officers and directors of GHI are
fully authorized to take, and will use their reasonable efforts to take,
all such lawful and necessary action.
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ARTICLE II
THE CLOSING
2.1 TIME AND PLACE OF CLOSING. The closing of the Share Exchange (the
"CLOSING") shall, unless otherwise agreed to in writing by the parties,
take place at the law offices of Xxxx Xxxx Xxxx Xxxxxxxxxx & Xxxxxxxxx,
P.C., 000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000, at 2:00 p.m.,
local time, on or prior to February 14, 2002.
2.2 OBLIGATIONS OF IPEC AND THE IPEC SHAREHOLDERS AT OR PRIOR TO THE CLOSING.
At or prior to Closing, and subject to the satisfaction by GHI of its
obligations hereunder, IPEC and the IPEC Shareholders shall deliver to GHI
the following:
(a) A copy of the Articles of Incorporation of IPEC certified as of a
date within ten days of the Closing by the Department of State of the
Commonwealth of Pennsylvania and certified by the corporate secretary
of IPEC as to the absence of any amendments between the date of
certification by the Department of State and the Closing;
(b) A certificate from the Department of State of the Commonwealth of
Pennsylvania as to the existence and good standing of IPEC as of a
date within ten days of the Closing;
(c) A certificate of the corporate secretary of IPEC attaching thereto
true and correct copies of the bylaws of IPEC;
(d) The certificate of IPEC referred to in SECTION 6.1 hereof;
(e) Such other documents as are required pursuant to this Agreement or as
may reasonably be requested from IPEC by GHI or its counsel;
(f) The certificates evidencing the shares of IPEC Common Stock owned by
the IPEC Shareholders, duly endorsed for transfer to GHI; and
(g) A legal opinion in the form required pursuant to SECTION 6.1 hereof.
2.3 OBLIGATIONS OF GHI AT OR PRIOR TO THE CLOSING. At or prior to
Closing, and subject to the satisfaction by IPEC of its obligations
hereunder, GHI shall deliver to IPEC and the IPEC Shareholders the
following:
(a) A copy of the Articles of Incorporation of GHI certified as of a date
within ten days of the Closing by the Secretary of State of the State
of Nevada and certified by the corporate secretary of GHI as to the
absence of any amendments between the date of certification by the
Secretary of State and the Closing;
(b) A certificate from the Secretary of State of the State of Nevada as
to the existence and good standing of GHI as of a date within ten
days of the Closing;
Share Exchange Agreement - Page 7
(c) A certificate of the corporate secretary of GHI attaching thereto
true and correct copies of the bylaws of GHI and the corporate
resolutions duly adopted by the board of directors of GHI authorizing
the consummation of the transactions contemplated hereby;
(d) The certificate of GHI referred to in SECTION 6.2 hereof;
(e) Such other documents as are required pursuant to this Agreement or as
may reasonably be requested from GHI by IPEC or its counsel;
(f) Certificates evidencing the GHI Common Stock to be issued to the IPEC
Shareholders pursuant to ARTICLE I hereof; and
(g) A legal opinion in the form required pursuant to SECTION 6.2 hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF IPEC
Except as expressly set forth and specifically identified by the section number
of this Agreement in the schedule delivered by IPEC to GHI contemporaneously
with the execution of this Agreement (the "IPEC DISCLOSURE SCHEDULE"), IPEC
represents, warrants, and covenants to GHI as follows:
3.1 ORGANIZATION AND QUALIFICATION. IPEC is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth
of Pennsylvania and has all requisite corporate power and authority to (a)
own, lease and operate its properties and assets as they are now owned,
leased and operated and (b) carry on its business as currently conducted
and as proposed to be conducted. IPEC is duly qualified or licensed to do
business in each jurisdiction in which the failure to be so qualified or
licensed could have a material adverse effect in the business, operations,
properties, assets, liabilities, prospects, or condition (financial or
otherwise) of IPEC (hereinafter a "MATERIAL Effect").
3.2 CAPITALIZATION. The issued and outstanding capital stock of IPEC consists
of 3,431,745 shares of common stock. All of the issued and outstanding
shares of capital stock of IPEC are validly issued, fully paid, and
nonassessable, and none of such shares has been issued in violation of the
preemptive rights of any person.
3.3 SUBSIDIARIES AND AFFILIATES. Except as set forth in SECTION 3.3 of the
IPEC Disclosure Schedule, IPEC does not own or hold, directly or
indirectly, any equity, debt, or other interest in any entity or business
or any option to acquire any such interest.
3.4 OPTIONS OR OTHER RIGHTS. Except as set forth in SECTION 3.4 of the IPEC
Disclosure Schedule, no options, warrants, calls, commitments or other
rights to acquire, sell or issue shares of capital stock or other equity
interests of IPEC, whether upon conversion of other securities or
otherwise, are issued or outstanding, and there is no agreement or
understanding with respect to the voting of such capital stock or other
equity interests.
Share Exchange Agreement - Page 8
3.5 OWNERSHIP OF SHARES. The shares of IPEC Common Stock are owned of record
and beneficially by the IPEC Shareholders as set forth on Schedule A. To
the knowledge of IPEC, the IPEC Shareholders possess full authority and
legal right to sell, transfer, and assign the entire legal and beneficial
ownership of the shares of IPEC common stock, free from all liens, claims,
and encumbrances of any kind.
3.6 VALIDITY AND EXECUTION OF AGREEMENT. IPEC has the full legal right,
capacity and power required to enter into, execute and deliver this
Agreement and to carry out the transactions contemplated, subject to
approval of the shareholders of IPEC and the terms set forth in this
Agreement. This Agreement has been duly executed and delivered by IPEC and
constitutes the valid and binding obligation of IPEC, enforceable in
accordance with its terms, subject to the qualification that enforcement
of the rights and remedies created hereby is subject to (a) bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and (b) general
principles of equity (regardless of whether such enforcement is considered
in a proceeding in equity or at law).
3.7 NO CONFLICT. Except as set forth in SECTION 3.7 of the IPEC Disclosure
Schedule and to the knowledge of IPEC, none of the execution, delivery, or
performance of this Agreement does or will: (a) result in any violation or
be in conflict with or constitute a default under any term or provision of
the Articles of Incorporation or bylaws of IPEC or any term or provision
of any judgment, decree, order, statute, injunction, rule, or regulation
applicable to IPEC that would cause a Material Effect, or of any material
note, bond, mortgage, indenture, lease, license, franchise, agreement, or
other instrument or obligation to which IPEC or is bound that would cause
a Material Effect; (b) result in the creation of any material option,
pledge, security interest, lien, charge, encumbrance, or restriction,
whether imposed by agreement, understanding, law or otherwise, except
those arising under applicable federal or state securities laws
(hereinafter an "ENCUMBRANCE") upon any of the properties or assets of
IPEC pursuant to any such term or provision that would cause a Material
Effect; or (c) constitute a default under, terminate, accelerate, amend or
modify, or give any party the right to terminate, accelerate, amend,
modify, abandon, or refuse to perform or comply with, any material
contract, agreement, arrangement, commitment, or plan to which IPEC is a
party, or by which IPEC or any of its properties or assets may be subject
or bound that would cause a Material Effect.
3.8 CONSENTS AND APPROVALS. No federal, state, or other regulatory approvals
are required to be obtained, nor any regulatory requirements complied
with, by IPEC in connection with the Share Exchange.
3.9 VIOLATION OF LAWS, PERMITS, ETC.
(a) IPEC is not in violation of any term or provision of its Articles of
Incorporation or bylaws, or of any material term or provision of any
judgment, decree, order, statute, law, injunction, rule, ordinance,
or governmental regulation that is applicable to it and where the
failure to comply with which would have a Material Effect.
Share Exchange Agreement - Page 9
(b) IPEC has maintained in full force and effect all certificates,
licenses, and permits material to the conduct of its business, and
has not received any notification that any revocation or limitation
thereof is threatened or pending.
3.10 BOOKS AND RECORDS. The books and records of IPEC (including, without
limitation, the books of account, minute books, and stock record books)
are complete and correct in all material respects and have been maintained
in accordance with sound business practices. The minute books of IPEC are
complete and current in all material respects and, as applicable,
accurately reflect all actions taken by the shareholders and the board of
directors of IPEC since the date of inception of IPEC, and all signatures
contained therein are the true signatures of the persons whose signatures
they purport to be.
3.11 IPEC FINANCIAL STATEMENTS. The unaudited balance sheet of IPEC as of
September 30, 2001, and the related unaudited statement of income and
statement of cash flows for the nine months then ended, together with the
audited balance sheets of IPEC as of December 31, 2000 and 1999, and the
related audited statements of income and statements of cash flow for the
years then ended (the "IPEC FINANCIAL STATEMENTS"), true and complete
copies of which have been delivered to GHI, present fairly, in all
material respects, the financial position of IPEC as at such dates and the
results of operations of IPEC for the periods then ended, in accordance
with generally accepted accounting principles ("GAAP") consistently
applied for the periods covered thereby.
3.12 UNDISCLOSED LIABILITIES. To the knowledge of IPEC, IPEC does not have any
material direct or indirect indebtedness, liability, claim, loss, damage,
deficiency, obligation or responsibility, fixed or unfixed, xxxxxx or
inchoate, liquidated or unliquidated, secured or unsecured, accrued,
absolute, contingent or otherwise (all of the foregoing being collectively
referred to as "LIABILITIES" and individually as a "LIABILITY"), of a kind
required by GAAP to be set forth on a financial statement that is not
fully and adequately reflected or reserved against on the IPEC Financial
Statements. IPEC does not have any Liabilities, whether or not of a kind
required by GAAP to be set forth on a financial statement, other than (a)
Liabilities incurred in the ordinary course of business since the date of
the latest balance sheet included in the IPEC Financial Statements that
are consistent with past practice and are included in the latest IPEC
Financial Statements, (b) Liabilities that are fully reflected on or
reserved against on the latest balance sheet included in the IPEC
Financial Statements, or (c) as specifically disclosed in the IPEC
Financial Statements.
3.13 TITLE TO PROPERTY; ENCUMBRANCES. IPEC has good and indefeasible title to
and other legal right to use all properties and assets, real, personal and
mixed, tangible and intangible, reflected as owned on the latest balance
sheet included in the IPEC Financial Statements or acquired after the date
of such balance sheet, except for properties and assets disposed of in
accordance with customary practice in the business or disposed of for full
and fair value since the date of such balance sheet in the ordinary course
of business consistent with past practice and except for matters that
would not have a Material Effect.
3.14 TAXES. All returns, reports, information returns, or other documents
(including any related or supporting information) filed or required to be
filed with any federal, state, local, or
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foreign governmental entity or others authority in connection with the
determination, assessment or collection of any Tax (whether or not such
Tax is imposed on IPEC) or the administration of any laws, regulations or
administrative requirements relating to any Tax (hereinafter "TAX
RETURNS"), reports and declarations of estimated tax or estimated tax
deposit forms required to be filed by IPEC have been duly and timely
filed; IPEC has paid all taxes, charges, fees, levies or other assessments
imposed by any federal, state, local or foreign taxing authority, whether
disputed or not, including, without limitation, income, capital,
estimated, excise, property, sales, transfer, withholding, employment,
payroll, and franchise taxes and such terms shall include any interest,
penalties or additions attributable to or imposed on or with respect to
such assessments and any expenses incurred in connection with the
settlement of any tax liability (hereinafter "TAXES") which have become
due whether pursuant to such returns or any assessment received by it or
otherwise, and has paid all installments of estimated Taxes due; and all
Taxes which IPEC is required by law to withhold or to collect have been
duly withheld and collected, and have been paid over to the proper court,
tribunal, arbitrator or any government or political subdivision thereof,
whether federal, state, county, local or foreign, or any agency,
authority, official or instrumentality of any such government or political
subdivision (hereinafter "GOVERNMENTAL OR REGULATORY BODY"). There are no
tax liens upon any of the assets or properties of IPEC except for any
lien, pledge, hypothecation, mortgage, security interest, claim, lease,
charge, option, right of first refusal, easement, servitude, transfer
restriction under any member or similar agreement, encumbrance or any
other restriction or limitation whatsoever, other than (i) materialmen's,
mechanics', repairmen's or other like liens arising in the ordinary course
of business for amounts either not yet due or being contested in good
faith and by appropriate proceedings so long as such proceedings shall not
involve any material danger of sale, forfeiture or loss of any part of the
assets and shall have been disclosed to GHI hereunder, or (ii) any lien
arising as a result of any act or omission of GHI (hereinafter "LIENS")
for Taxes not yet due. IPEC is not a party to any express tax settlement
agreement, arrangement, policy or guideline, formal or informal (a
"SETTLEMENT AGREEMENT"), and IPEC does not have any obligation to make
payments under any Settlement Agreement.
3.15 LITIGATION.
(a) There is no action, proceeding, investigation, or inquiry pending or,
to the best of IPEC's knowledge, threatened (i) against or affecting
any of IPEC's assets or business that, if determined adversely to
IPEC, would result in a Material Effect or (ii) that questions this
Agreement or any action contemplated by this Agreement or in
connection with the Share Exchange.
(b) IPEC has no knowledge of any state of facts or of the occurrence or
nonoccurrence of any event or group of related events, that should
reasonably cause IPEC to determine that there exists any basis for
any material claim against IPEC for any of the matters described in
paragraph (a) above.
3.16 CONTRACTS AND OTHER AGREEMENTS. IPEC has made available to GHI complete
and correct copies of all material written agreements, contracts, and
commitments, together with all amendments thereto, and accurate (in all
material respects) descriptions of all material oral
Share Exchange Agreement - Page 11
agreements. Such agreements, contracts, and commitments are in full force
and effect, and, to the best of IPEC's knowledge, all other parties to
such agreements, contracts, and commitments have performed all obligations
required to be performed by them to date thereunder in all material
respects and are not in default thereunder in any material respect.
3.17 ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE. All accounts receivable
reflected on the latest balance sheet of IPEC included in the IPEC
Financial Statements, and all accounts receivable arising subsequent to
September 30, 2001, (a) have arisen from BONA FIDE sales transactions in
the ordinary course of business on ordinary trade terms and (b) have been
collected or are collectible in the ordinary course of business in the
aggregate recorded amounts thereof in accordance with their terms without
valid set-off or counterclaim. IPEC has made payments on accounts payable
and other current obligations arising subsequent to September 30, 2001, in
accordance with past practice of the business of IPEC.
3.18 COMPENSATION ARRANGEMENTS; OFFICERS AND DIRECTORS. SECTION 3.18 to the
IPEC Disclosure Schedule sets forth: (a) the names of all present officers
and directors of IPEC and current annual salary, including any promised,
expected or customary bonus or such other amount, and (b) the names and
titles of all directors and officers of IPEC. IPEC has not made a
commitment or agreement (verbally or in writing) to increase the
compensation or to modify the conditions or terms of employment of any
person listed in SECTION 3.18 to the IPEC Disclosure Schedule. To the
knowledge of IPEC, none of such persons has made a threat to IPEC to
terminate such person's relationship with IPEC.
3.19 ERISA. Except as set forth in SECTION 3.19 to the IPEC Disclosure
Schedule, there are no employee benefit plans as defined in ERISA
("PLANS") maintained for the benefit of, or covering, any employee, former
employee, independent contractor or former independent contractor of IPEC,
or their dependents or their beneficiaries, or otherwise, now or
heretofore contributed to by IPEC, and no such Plan is or has ever been
subject to ERISA.
3.20 OPERATIONS. Except as expressly authorized by this Agreement, and except
as set forth in SECTION 3.20 to the IPEC Disclosure Schedule, since the
date of the latest IPEC Financial Statements, IPEC has not:
(a) amended its Articles of Incorporation or By-Laws or merged with or
into or consolidated with any other entity, or changed or agreed to
rearrange in any manner the character of the business of IPEC;
(b) issued, sold or purchased options or rights to subscribe to, or
entered into any contracts or commitments to issue, sell or purchase,
any shares of its capital stock or other equity interests except in
the ordinary course of business and consistent with past practices;
(c) issued any note, bond or other debt security, created, incurred or
assumed any indebtedness for borrowed money other than in the
ordinary course of business in connection with trade payables, or
guaranteed any indebtedness for borrowed money or any capitalized
lease obligation;
Share Exchange Agreement - Page 12
(d) declared, set aside or paid any dividends or declared or made any
other distributions of any kind to the shareholders, or made any
direct or indirect redemption, retirement, purchase or other
acquisition of any shares of its capital stock or other equity
interests;
(e) knowingly waived any right of material value to the business of IPEC;
(f) made any change in its accounting methods or practices or made any
changes in depreciation or amortization policies or rates adopted by
it or made any material write-down of inventory or material write-off
as uncorrectable of accounts receivable;
(g) made any wage or salary increase or other compensation payable or to
become payable or bonus, or increase in any other direct or indirect
compensation, for or to any of its officers, directors, employees,
consultants, agents or other representatives, or any accrual for or
commitment or agreement to make or pay the same, other than increases
made in the ordinary course consistent with past practice;
(h) entered into any transactions with any of its affiliates,
shareholders, officers, directors, employees, consultants, agents or
other representatives (other than employment arrangements made in the
ordinary course of business consistent with past practice), or any
affiliate of any shareholder, officer, director, consultant,
employee, agent or other representative;
(i) made any payment or commitment to pay any severance or termination
pay to any person or any of its officers, directors, employees,
consultants, agents or other representatives, other than payments or
commitments to pay such persons or their officers, directors,
employees in the ordinary course of business;
(j) except in the ordinary course of business, incurred or assumed any
debt, obligation or liability (whether absolute or contingent and
whether or not currently due and payable);
(k) except in the ordinary course of business, made any acquisition of
all or any part of the assets, properties, capital stock or business
of any other person;
(l) except in the ordinary course of business, paid, directly or
indirectly, any of its Liabilities before the same became due in
accordance with their terms or otherwise than in the ordinary course
of business, except to obtain the benefit of discounts available for
early payment;
(m) except in the ordinary course of business, created, incurred or
assumed any indebtedness for borrowed money, or guaranteed any
indebtedness for borrowed money or any capitalized lease obligation,
in each case in excess of $50,000 individually or in the aggregate;
Share Exchange Agreement - Page 13
(n) except in the ordinary course of business, made any capital
expenditures or commitments for capital expenditures in aggregate
amount exceeding $50,000; or
(o) except in the ordinary course of business, terminated, failed to
renew, amended or entered into any contract or other agreement of a
type required to be disclosed pursuant to SECTION 3.16.
3.21 INTANGIBLE PROPERTY AND INTELLECTUAL PROPERTY. IPEC possesses all of the
necessary licenses, trademarks, trade names, domain names, patents
(hereinafter "INTELLECTUAL PROPERTY RIGHTS") necessary to conduct its
business in the manner that is currently being conducted and anticipates
conducting in the future. All of such Intellectual Property Rights are
held in the name of IPEC. To the knowledge of IPEC, none of the Intangible
Property of IPEC infringes upon the rights of any other person in any
material respect or, to the knowledge of IPEC, is so infringed upon by any
other person or its property. IPEC has not received any notice of any
claim of any other person relating to any of the Intangible Property or
any process or confidential information of IPEC and does not know of any
basis for any such charge or claim. Except for the Intangible Property, no
other material intellectual property or intangible property rights are
required for IPEC to conduct the business of IPEC in the ordinary course
consistent with past practice. Except as separately identified in SECTION
3.21 of the IPEC Disclosure Schedule, no approval or consent of any person
is needed so that the interest of IPEC in the Intangible Property shall
continue to be in full force and effect and enforceable by IPEC following
the transactions contemplated by this Agreement.
3.22 EMPLOYEE RELATIONS. IPEC is not a party any agreement with any labor
organization, collective bargaining or similar agreement with respect to
its employees. There are no material complaints, grievances or
arbitrations, employment-related litigation, administrative proceedings or
controversies either pending or, to the knowledge of IPEC, threatened,
involving any employee, applicant for employment, or former employee of
IPEC against IPEC. During the past five years, IPEC has not suffered or
sustained any labor dispute resulting in any work stoppage and no such
work stoppage is, to the knowledge of IPEC, threatened. To the knowledge
of IPEC, there are no attempts presently being made to organize any
employees employed by IPEC.
3.23 INSURANCE. IPEC has adequate policies of insurance for its operations.
IPEC is not in default with respect to any material provision contained in
any policy or binder of insurance and has not failed to give any notice or
present any claim under any such policy or binder in due and timely
fashion. There are no outstanding unpaid claims under any such policy or
binder which have gone unpaid for more than 45 days or as to which the
carrier has disclaimed liability. IPEC has not received any notice of
cancellation or non-renewal of any such policy or binder. IPEC has not
received any notice from any of its insurance carriers that any insurance
premiums will be materially increased in the future or that any existing
insurance coverage will not be available in the future on substantially
the same terms as now in effect.
Share Exchange Agreement - Page 14
3.24 LICENSES AND PERMITS. Except as set forth in SECTION 3.24 of the IPEC
Disclosure Schedule, IPEC has obtained all material government permits,
licenses, domain name and other registrations, and other consents and
authorizations (federal, state, local and foreign) of any Governmental or
Regulatory Body (collectively, "PERMITS") are required to be obtained by
IPEC in connection with its properties or the business of IPEC. IPEC has
not received any notice of any claim of revocation of any such Permit and
has no knowledge of any event which would be likely to give rise to such a
claim.
3.25 BROKERS. All negotiations relating to this Agreement and the transactions
contemplated hereby have been carried out by IPEC directly with GHI
without the intervention of any other person on behalf of IPEC in such
manner as to give rise to any valid claim by any person against IPEC or
GHI for a finder's fee, brokerage commission or similar payment.
3.26 DISCLOSURE. To the knowledge of IPEC, neither this Agreement, nor any
Schedule or Exhibit to this Agreement, contains an untrue statement of a
material fact or omits a material fact necessary to make the statements
contained herein or therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF GHI
Except as expressly set forth and specifically identified by the section number
of this Agreement in the schedule delivered by GHI to IPEC contemporaneously
with the execution of this Agreement (the "GHI DISCLOSURE SCHEDULE"), GHI
represents, warrants, and covenants to IPEC as follows:
4.1 ORGANIZATION AND QUALIFICATION. GHI is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Nevada and has all requisite corporate power and authority to (a) own,
lease and operate its properties and assets as they are now owned, leased
and operated and (b) carry on its business as currently conducted and as
proposed to be conducted. GHI is duly qualified or licensed to do business
in each jurisdiction in which the failure to be so qualified or licensed
could have a Material Effect.
4.2 CAPITALIZATION. The issued and outstanding capital stock of GHI consists
of 465,000 shares of common stock, $0.001 par value per share. All of the
issued and outstanding shares of capital stock of GHI are validly issued,
fully paid, and nonassessable, and none of such shares have been issued in
violation of the preemptive rights of any person. The GHI Common Stock
shall be validly issued, fully paid, and nonassessable.
4.3 SUBSIDIARIES AND AFFILIATES. Except as set forth in SECTION 4.3 of the GHI
Disclosure Schedule, GHI does not own or hold, directly or indirectly, any
equity, debt, or other interest in any entity or business or any option to
acquire any such interest.
4.4 OPTIONS OR OTHER RIGHTS. Except as set forth in SECTION 4.4 of the GHI
Disclosure Schedule, no options, warrants, calls, commitments or other
rights to acquire, sell or issue shares of capital stock or other equity
interests of GHI whether upon conversion of other securities or otherwise,
are issued or outstanding except as set forth in the GHI Disclosure
Share Exchange Agreement - Page 15
Schedule, and there is no agreement or understanding with respect to the
voting of such capital stock or other equity interests.
4.5 VALIDITY AND EXECUTION OF AGREEMENT. GHI has the full legal right,
capacity, and power required to enter into, execute, and deliver this
Agreement and to carry out the transactions contemplated, subject to
approval of the shareholders of GHI and the terms set forth in this
Agreement. This Agreement has been duly and validly executed on behalf of
GHI and is a valid and binding obligation of GHI, enforceable in
accordance with its terms, subject to the qualification that enforcement
of the rights and remedies created hereby is subject to (a) bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and (b) general
principles of equity (regardless of whether such enforcement is considered
in a proceeding in equity or at law).
4.6 NO CONFLICT. Except as set forth in SECTION 4.6 of the GHI Disclosure
Schedule and to the knowledge of GHI, none of the execution, delivery, or
performance of this Agreement does or will: (a) result in any violation or
be in conflict with or constitute a default under any term or provision of
the Articles of Incorporation or bylaws of GHI or any term or provision of
any judgment, decree, order, statute, injunction, rule, or regulation
applicable to GHI that would cause a Material Effect, or of any material
note, bond, mortgage, indenture, lease, license, franchise, agreement, or
other instrument or obligation to which GHI is bound that would cause a
Material Effect; (b) result in the creation of any Encumbrance upon any of
the properties or assets of GHI pursuant to any such term or provision
that would cause a Material Effect; or (c) constitute a default under,
terminate, accelerate, amend or modify, or give any party the right to
terminate, accelerate, amend, modify, abandon, or refuse to perform or
comply with, any material contract, agreement, arrangement, commitment, or
plan to which GHI is a party, or by which GHI or any of its properties or
assets may be subject or bound that would cause a Material Effect.
4.7 CONSENTS AND APPROVALS. No federal, state, or other regulatory approvals
are required to be obtained, nor any regulatory requirements complied
with, by GHI in connection with the Share Exchange.
4.8 VIOLATION OF LAWS, PERMITS, ETC.
(a) GHI is not in violation of any term or provision of its Articles of
Incorporation or bylaws, or of any material term or provision of any
judgment, decree, order, statute, law, injunction, rule, ordinance,
or governmental regulation that is applicable to it and where the
failure to comply with which would have a Material Effect.
(b) GHI has maintained in full force and effect all certificates,
licenses, and permits material to the conduct of its business, and
has not received any notification that any revocation or limitation
thereof is threatened or pending.
4.9 BOOKS AND RECORDS. The books and records of GHI (including, without
limitation, the books of account, minute books, and stock record books)
are complete and correct in all material respects and have been maintained
in accordance with sound business practices.
Share Exchange Agreement - Page 16
The minute books of GHI are complete and current in all material respects
and, as applicable, accurately reflect all actions taken by the
shareholders and the board of directors of GHI since the date of inception
of GHI, and all signatures contained therein are the true signatures of
the persons whose signatures they purport to be.
4.10 GHI FINANCIAL STATEMENTS. The unaudited balance sheet of GHI as of
September 30, 2001, and the related unaudited statement of operations and
statement of cash flows for the nine months then ended, together with the
audited balance sheets of GHI as of December 31, 2000 and 1999, and the
related audited statements of operations, statements of cash flow and
statements of shareholders equity for the years then ended (the "GHI
FINANCIAL STATEMENTS"), true and complete copies of which have been
delivered to IPEC, present fairly, in all material respects, the financial
position of GHI as at such dates and the results of operations of GHI for
the periods then ended, in accordance with GAAP consistently applied for
the periods covered thereby.
4.11 UNDISCLOSED LIABILITIES. To the knowledge of GHI, GHI does not have any
Liabilities of a kind required by GAAP to be set forth on a financial
statement that is not fully and adequately reflected or reserved against
on the GHI Financial Statements. GHI does not have any Liabilities,
whether or not of a kind required by GAAP to be set forth on a financial
statement, other than (a) Liabilities incurred in the ordinary course of
business since the date of the latest balance sheet included in the GHI
Financial Statements that are consistent with past practice and are
included in the latest GHI Financial Statements, (b) Liabilities that are
fully reflected on or reserved against on the latest balance sheet
included in the GHI Financial Statements, or (c) as specifically disclosed
in the GHI Financial Statements.
4.12 TITLE TO PROPERTY; ENCUMBRANCES. GHI has good and indefeasible title to
and other legal right to use all properties and assets, real, personal and
mixed, tangible and intangible, reflected as owned on the latest balance
sheet included in the GHI Financial Statements or acquired after the date
of such balance sheet, except for properties and assets disposed of in
accordance with customary practice in the business or disposed of for full
and fair value since the date of such balance sheet in the ordinary course
of business consistent with past practice and except for matters that
would not have a Material Effect.
4.13 TAXES. All Tax Returns, reports and declarations of estimated tax or
estimated tax deposit forms required to be filed by GHI have been duly and
timely filed; GHI has paid all Taxes which have become due whether
pursuant to such returns or any assessment received by it or otherwise,
and has paid all installments of estimated Taxes due; and all Taxes which
GHI is required by law to withhold or to collect have been duly withheld
and collected, and have been paid over to the proper Governmental or
Regulatory Body. There are no tax liens upon any of the assets or
properties of GHI except for Liens for Taxes not yet due. GHI is not a
party to any Settlement Agreement, and GHI does not have any obligation to
make payments under any Settlement Agreement.
Share Exchange Agreement - Page 17
4.14 LITIGATION.
(a) There is no action, proceeding, investigation, or inquiry pending or,
to the best of GHI's knowledge, threatened (i) against or affecting
any of GHI's assets or business that, if determined adversely to GHI,
would result in a Material Effect or (ii) that questions this
Agreement or any action contemplated by this Agreement or in
connection with the Share Exchange.
(b) GHI has no knowledge of any state of facts or of the occurrence or
nonoccurrence of any event or group of related events, that should
reasonably cause GHI to determine that there exists any basis for any
material claim against GHI for any of the matters described in
paragraph (a) above.
4.15 CONTRACTS AND OTHER AGREEMENTS. SECTION 4.15 to the GHI Disclosure
Schedule contains a complete and correct list as of the date hereof of all
material agreements, contracts, and commitments (and all amendments
thereto), written or oral, to which GHI is a party or by which any of its
properties is bound. GHI has made available to IPEC complete and correct
copies of all material written agreements, contracts, and commitments,
together with all amendments thereto, and accurate (in all material
respects) descriptions of all material oral agreements. Such agreements,
contracts, and commitments are in full force and effect, and, to the best
of GHI's knowledge, all other parties to such agreements, contracts, and
commitments have performed all obligations required to be performed by
them to date thereunder in all material respects and are not in default
thereunder in any material respect.
4.16 COMPENSATION ARRANGEMENTS; OFFICERS, DIRECTORS AND EMPLOYEES. GHI does not
pay any compensation to any of its officers and directors and has no
employees. GHI has not made a commitment or agreement (verbally or in
writing) to pay any compensation to such persons.
4.17 ERISA. There are no Plans maintained for the benefit of, or covering, any
employee, former employee, independent contractor or former independent
contractor of GHI or their dependents or their beneficiaries, or
otherwise, now or heretofore contributed to by GHI and no such Plan is or
has ever been subject to ERISA.
4.18 OPERATIONS. Except as expressly authorized by this Agreement, or except as
set forth in SECTION 4.18 to the GHI Disclosure Schedule, since the date
of the latest GHI Financial Statements, GHI has not:
(a) amended its Articles of Incorporation or By-Laws or merged with or
into or consolidated with any other entity, or changed or agreed to
rearrange in any manner the character of the business of GHI;
(b) issued, sold or purchased options or rights to subscribe to, or
entered into any contracts or commitments to issue, sell or purchase,
any shares of its capital stock or other equity interests;
Share Exchange Agreement - Page 18
(c) entered into, amended or terminated any (i) employment agreement or
collective bargaining agreement, (ii) adopted, entered into or
amended any arrangement which is, or would be, a Plan or (iii) made
any change in any actuarial methods or assumptions used in funding
any Plan or in the assumptions or factors used in determining benefit
equivalencies thereunder;
(d) issued any note, bond or other debt security, created, incurred or
assumed any indebtedness for borrowed money other than in the
ordinary course of business in connection with trade payables, or
guaranteed any indebtedness for borrowed money or any capitalized
lease obligation;
(e) declared, set aside or paid any dividends or declared or made any
other distributions of any kind to the shareholders, or made any
direct or indirect redemption, retirement, purchase or other
acquisition of any shares of its capital stock or other equity
interests;
(f) knowingly waived any right of material value to the business of GHI;
(g) made any change in its accounting methods or practices or made any
changes in depreciation or amortization policies or rates adopted by
it or made any material write-down of inventory or material write-off
as uncorrectable of accounts receivable;
(h) made any wage or salary increase or other compensation payable or to
become payable or bonus, or increase in any other direct or indirect
compensation, for or to any of its officers, directors, employees,
consultants, agents or other representatives, or any accrual for or
commitment or agreement to make or pay the same, other than increases
made in the ordinary course consistent with past practice;
(i) entered into any transactions with any of its affiliates,
shareholders, officers, directors, employees, consultants, agents or
other representatives (other than employment arrangements made in the
ordinary course of business consistent with past practice), or any
affiliate of any shareholder, officer, director, consultant,
employee, agent or other representative;
(j) made any payment or commitment to pay any severance or termination
pay to any person or any of its officers, directors, employees,
consultants, agents or other representatives, other than payments or
commitments to pay such persons or their officers, directors,
employees in the ordinary course of business;
(k) except in the ordinary course of business and subject to the
provisions of SECTION 5.2 hereof, (i) entered into any lease (as
lessor or lessee), (ii) sold, abandoned or made any other disposition
of any of its assets or properties other than in the ordinary course
of business consistent with past practice, (iii) granted or suffered
any Lien on any of its assets or properties other than sales of
inventory in the ordinary course of business, or (iv) entered into or
amended any material contract or other agreement to
Share Exchange Agreement - Page 19
which it is a party, or by or to which it or its assets or properties
are bound or subject, or pursuant to which it agrees to indemnify any
person or to refrain from competing with any person, in each case or
type required to be disclosed pursuant to SECTION 4.15 hereof;
(l) except in the ordinary course of business, incurred or assumed any
debt, obligation or liability (whether absolute or contingent and
whether or not currently due and payable);
(m) except for inventory or equipment acquired in the ordinary course of
business, made any acquisition of all or any part of the assets,
properties, capital stock or business of any other person;
(n) except in the ordinary course of business, paid, directly or
indirectly, any of its Liabilities before the same became due in
accordance with their terms or otherwise than in the ordinary course
of business, except to obtain the benefit of discounts available for
early payment;
(o) except in the ordinary course of business, created, incurred or
assumed any indebtedness for borrowed money, or guaranteed any
indebtedness for borrowed money or any capitalized lease obligation,
in each case in excess of $5,000 individually or in the aggregate;
(p) except in the ordinary course of business, made any capital
expenditures or commitments for capital expenditures in aggregate
amount exceeding $5,000; or
(q) except in the ordinary course of business and subject to the
provisions of SECTION 5.2 hereof, terminated, failed to renew,
amended or entered into any contract or other agreement of a type
required to be disclosed pursuant to SECTION 4.15.
4.19 INTANGIBLE PROPERTY AND INTELLECTUAL PROPERTY. GHI possesses all of
the necessary Intellectual Property Rights necessary to conduct its
business in the manner that is currently being conducted and
anticipates conducting in the future. All of such Intellectual
Property Rights are held in the name of GHI. To the knowledge of
GHI, none of the Intangible Property of GHI infringes upon the
rights of any other person in any material respect or, to the
knowledge of GHI, is so infringed upon by any other person or its
property. GHI has not received any notice of any claim of any other
person relating to any of the Intangible Property or any process or
confidential information of GHI and does not know of any basis for
any such charge or claim. Except for the Intangible Property, no
other material intellectual property or intangible property rights
are required for GHI to conduct the business of GHI in the ordinary
course consistent with past practice. Except as separately
identified in SECTION 4.19 of the GHI Disclosure Schedule, no
approval or consent of any person is needed so that the interest of
GHI in the Intangible Property shall continue to be in full force
and effect and enforceable by GHI following the transactions
contemplated by this Agreement.
Share Exchange Agreement - Page 20
4.20 INSURANCE. GHI has not maintained any policies of insurance for its
operations
4.21 LICENSES AND PERMITS. Except as set forth in SECTION 4.21 of the GHI
Disclosure Schedule, no Permits are required to be obtained by GHI in
connection with its properties or the business of GHI. GHI has not
received any notice of any claim of revocation of any such Permit and has
no knowledge of any event which would be likely to give rise to such a
claim.
4.22 BROKERS. All negotiations relating to this Agreement and the transactions
contemplated hereby have been carried out by IPEC directly with GHI
without the intervention of any other person on behalf of GHI in such
manner as to give rise to any valid claim by any person against IPEC or
GHI for a finder's fee, brokerage commission or similar payment.
4.23 APPROVAL OF SHARE EXCHANGE. The board of directors of GHI has approved the
Share Exchange without reservation or qualification.
4.24 SEC REPORTING STATUS. GHI filed a registration statement under Section
12(g) of the Securities Exchange Act of 1934 (the "EXCHANGE ACT") which
was declared effective on July 29, 2000. Since that date, GHI has filed
with the Securities and Exchange Commission ("SEC") all reports required
to be filed pursuant to Section 13 of the Exchange Act. It has not filed a
certification on Form 15 pursuant to Rule 12h-3 of the Exchange Act.
4.25 INVESTMENT COMPANY. GHI is not an investment company within the meaning of
Section 3 of the Investment Company Act.
4.26 TRADING STATUS. The GHI Common Stock was approved for unpriced quotation
on the NQB Pink Sheets under the symbol "GLHL".
4.27 DISCLOSURE. To the knowledge of GHI, neither this Agreement, nor any
Schedule or Exhibit to this Agreement, contains an untrue statement of a
material fact or omits a material fact necessary to make the statements
contained herein or therein not misleading.
ARTICLE V
ACTIONS PRIOR TO CLOSING
5.1 CORPORATE EXAMINATIONS AND INVESTIGATIONS. At or prior to the Closing
Date, each of GHI and IPEC shall be entitled to make such investigation of
the assets, properties, business and operations of the other and such
examination of the books, records, Tax Returns, financial condition and
operations of the other as each may wish. Any such investigation and
examination shall be conducted at reasonable times and under reasonable
circumstances and GHI and IPEC shall cooperate fully therein. In order
that each of GHI and IPEC may have full opportunity to make such a
business, accounting and legal review, examination or investigation as it
may wish of the business and affairs of the other, GHI or IPEC, as the
case may be, shall furnish to the other during such period all such
information and copies of such documents concerning its affairs as GHI or
IPEC may reasonably request and cause its
Share Exchange Agreement - Page 21
officers, employees, consultants, agents, accountants and attorneys to
cooperate fully and provide all material facts affecting its financial
condition and business operations. Until the Closing and if the Closing
shall not occur, thereafter, GHI, IPEC, and its respective affiliates
shall keep confidential and shall not use in any manner inconsistent with
the transactions contemplated by this Agreement and after termination of
this Agreement, GHI, IPEC, and its respective affiliates shall not
disclose, nor use for their own benefit, any information or documents
obtained from the other concerning its assets, properties, business and
operations, unless (a) readily ascertainable from public or published
information, or trade sources, (b) received from a third party not under
an obligation to GHI or IPEC, as the case may be, to keep such information
confidential or (c) required by any Law or Order. If this transaction does
not close for any reason, GHI, IPEC, and its respective affiliates shall
return or destroy all such confidential information and compilations
thereof as is practicable, and shall certify such destruction or return to
GHI or IPEC, as the case may be.
5.2 CONDUCT AND PRESERVATION OF BUSINESS OF GHI. From the date hereof through
the Closing Date, GHI shall cause its corporate existence and status as a
reporting issuer with the SEC to be continued in the ordinary course in
the same manner as it has been conducted since it inception. GHI covenants
that, except with the prior written consent of IPEC, which consent shall
not be unreasonably withheld, GHI will not:
(a) Do any of the restricted acts set forth in SECTION 4.18 hereof, or
enter into any agreement of a nature set forth in SECTION 4.15
hereof; or
(b) Enter into any transaction other than in the ordinary course of
business.
5.3 CONDUCT AND PRESERVATION OF BUSINESS OF IPEC. From the date hereof through
the Closing Date, IPEC shall cause its business to be conducted in the
ordinary course and in the same manner as it has been conducted since its
inception. IPEC covenants that, except with the prior written consent of
GHI, which consent shall not be unreasonably withheld, IPEC will not:
(a) Do any of the restricted acts set forth in SECTION 3.20 hereof, or
enter into any agreement of a nature set forth in SECTION 3.16
hereof; or
(b) Enter into any transaction other than in the ordinary course of
business.
Further, IPEC shall use commercially reasonable efforts to (i) preserve
intact its business, assets, properties and organizations, (ii) keep
available the services of its present officers, employees, consultants and
agents; and (iii) maintain its present suppliers and customers and
preserve its goodwill.
5.4 ADVICE OF CHANGES. IPEC will promptly advise GHI in writing from time to
time prior to the Closing with respect to any matter hereafter arising and
known to them that, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described in the
IPEC Disclosure Schedule or would have resulted in any representation of
IPEC in this Agreement being untrue. GHI will promptly advise IPEC in
writing from time
Share Exchange Agreement - Page 22
to time prior to the Closing with respect to any matter hereafter arising
and known to it that, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described in the
GHI Disclosure Schedule or would have resulted in any representation of
GHI in this Agreement being untrue in any material respect.
5.5 NQB PINK SHEETS. GHI will use its best efforts to maintain the listing on
the NQB Pink Sheets of the GHI Common Stock. GHI shall take the necessary
action to notify NASD Regulation of the Share Exchange in a timely manner.
5.6 SEC REPORTS. GHI shall file with the SEC all reports and other documents
that are required by the Exchange Act and the rules and regulations
promulgated thereunder to be filed in connection with this transactions
contemplated by this Agreement.
5.7 SHAREHOLDER APPROVAL. IPEC shall, as expeditiously as possible, take all
actions necessary to obtain the approval of its shareholders of the
transactions contemplated by this Agreement as required by the laws of
Pennsylvania.
5.8 OTHER AGREEMENTS. IPEC and GHI agree to take, or cause to be taken, all
actions and to do, or cause to be done, all things reasonably necessary,
proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement, including,
without limitation, the obtaining of all necessary waivers, consents and
approvals and the effecting of all necessary registrations and filings,
including, but not limited to, submissions of information requested by
Governmental or Regulatory Bodies and any other persons required to be
obtained by them for the consummation of the closing and the continuance
in full force and effect of the permits, contracts and other agreements
set forth on the Schedules to this Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO CLOSING
6.1 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF GHI TO COMPLETE THE CLOSING.
The obligations of GHI to enter into and complete the Closing are subject
to the fulfillment of the following conditions, any one or more of which
may be waived by GHI:
(a) (i) All of the terms, covenants, and conditions of this Agreement to
be complied with or performed by IPEC at or before the Closing shall
have been duly complied with and performed in all material respects,
(ii) the representations and warranties of IPEC set forth in Article
III shall be true in all material respects on and as of the Closing
Date with the same force and effect as if such representations and
warranties had been made on and as of the Closing, and (iii) GHI
shall have received a certificate to such effect from IPEC,
specifically referencing SECTIONS 3.7 AND 3.8. IPEC shall provide a
certificate from its transfer agent as to the representations
contained in SECTION 3.2.
Share Exchange Agreement - Page 23
(b) All consents, waivers, approvals, licenses, authorizations of, or
filings or declarations with third parties or Governmental or
Regulatory Bodies required to be obtained by IPEC in order to permit
the transactions contemplated by this Agreement to be consummated in
accordance with agreements and court orders applicable to IPEC and
applicable governmental laws, rules, regulations and agreements shall
have been obtained and any waiting period thereunder shall have
expired or been terminated, and GHI shall have received a certificate
from IPEC to such effect.
(c) All actions, proceedings, instruments, and documents in connection
with the consummation of the transactions contemplated by this
Agreement, including the forms of all documents, legal matters,
opinions, and procedures in connection therewith, shall have been
approved in form and substance by counsel for GHI, which approval
shall not be unreasonably withheld.
(d) IPEC shall have furnished such certificates to evidence compliance
with the conditions set forth in this Article, as may be reasonably
requested by GHI or its counsel.
(e) IPEC shall not have suffered any Material Effect.
(f) No material information or data provided or made available to GHI by
or on behalf of IPEC shall be incorrect in any material respect.
(g) No investigation and no suit, action, or proceeding before any court
or any governmental or regulatory authority shall be pending or
threatened by any state or federal governmental or regulatory
authority, against IPEC or any of its affiliates, associates,
officers, or directors seeking to restrain, prevent, or change in any
material respect the transactions contemplated hereby or seeking
damages in connection with such transactions that are material to
IPEC.
(h) Counsel to IPEC shall have delivered to GHI on and as of the Closing
Date an opinion to GHI substantially as to the matters set forth in
SECTIONS 3.1 AND 3.6., all subject to customary limitations
reasonably acceptable to counsel to GHI.
(i) All of the IPEC Shareholders approving the Share Exchange shall have
acknowledged that the shares of GHI Common Stock are restricted
securities under the Securities Act and represent that such IPEC
Shareholder (i) is acquiring the GHI Common Stock for his own account
without a view to distribution within the meaning of the Securities
Act; (ii) has received from GHI its filings with the Securities and
Exchange Commission and all other information that he has deemed
necessary to make an informed investment decision with respect to an
investment in GHI in general and the GHI Common Stock in particular;
(iii) is financially able to bear the economic risks of an investment
in GHI; and (iv) has such knowledge and experience in financial and
business matters in general and with respect to investments of a
nature similar to the GHI Common Stock so as to be capable, by reason
of such knowledge and experience, of evaluating the merits and risks
of, and
Share Exchange Agreement - Page 24
making an informed business decision with regard to, the acquisition
of the GHI Common Stock. Such acknowledgment shall also indicate that
each IPEC Shareholder understands and agrees that the certificates
evidencing the GHI Common Stock shall bear the usual restrictive
legend pertaining to Rule 144 under the Securities Act and that the
GHI Common Stock will not be transferable except under an effective
registration statement under the Securities Act or in accordance with
available exemptions from registration under the Securities Act. Such
acknowledgment shall be substantially in the form attached hereto as
EXHIBIT A.
(j) IPEC shall have received the necessary approvals from at least 90% of
its shareholders to proceed with the transactions contemplated
herein.
6.2 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF IPEC TO COMPLETE THE CLOSING.
The obligations of IPEC to enter into and complete the Closing are subject
to the fulfillment on or prior to the Closing Date, of the following
conditions, any one or more of which may be waived by IPEC:
(a) (i) All of the terms, covenants, and conditions of this Agreement to
be complied with or performed by GHI at or before the Closing shall
have been duly complied with and performed in all material respects,
(ii) the representations and warranties of GHI set forth in Article
IV shall be true in all material respects on and as of the Closing
Date with the same force and effect as if such representations and
warranties had been made on and as of the Closing, and (iii) IPEC
shall have received a certificate to such effect from GHI.
(b) All consents, waivers, approvals, licenses, authorizations of, or
filings or declarations with third parties or Governmental or
Regulatory Bodies required to be obtained by GHI in order to permit
the transactions contemplated by this Agreement to be consummated in
accordance with agreements and court orders applicable to GHI and
applicable governmental laws, rules, regulations and agreements shall
have been obtained and any waiting period thereunder shall have
expired or been terminated, and IPEC shall have received a
certificate from GHI to such effect.
(c) All actions, proceedings, instruments, and documents in connection
with the consummation of the transactions contemplated by this
Agreement, including the forms of all documents, legal matters,
opinions, and procedures in connection therewith, shall have been
approved in form and substance by counsel for IPEC, which approval
shall not be unreasonably withheld.
(d) GHI shall have furnished such certificates to evidence compliance
with the conditions set forth in this Article, as may be reasonably
requested by IPEC or its counsel.
(e) GHI shall not have suffered any Material Effect.
Share Exchange Agreement - Page 25
(f) No material information or data provided or made available to IPEC by
or on behalf of GHI shall be incorrect in any material respect.
(g) No investigation and no suit, action, or proceeding before any court
or any governmental or regulatory authority shall be pending or
threatened by any state or federal governmental or regulatory
authority, against GHI or any of its affiliates, associates,
officers, or directors seeking to restrain, prevent, or change in any
material respect the transactions contemplated hereby or seeking
damages in connection with such transactions that are material to
GHI.
(h) Counsel to GHI shall have delivered to IPEC on and as of the Closing
Date an opinion to IPEC substantially as to the matters set forth in
SECTIONS 4.1, 4.2, 4.3, 4.4, 4.5, 4.6., AND 4.7, all subject to
customary limitations reasonably acceptable to counsel to IPEC.
(i) The GHI Common Stock shall be approved for listing on the Pink
Sheets.
(j) GHI shall satisfy (i) the filing requirements set forth in Section 13
of the Exchange Act and (ii) the requirements of Rule 15c2-11 as
promulgated by the SEC under the Exchange Act.
(k) IPEC Shareholders holding no more than 10% of the issued and
outstanding IPEC common stock shall have perfected appraisal rights
for their shares in accordance with the Pennsylvania Law.
ARTICLE VII
POST-CLOSING COVENANTS
The parties covenant to take the following actions after the Closing Date:
7.1 FURTHER INFORMATION. Following the Closing, each party will afford to the
other party, its counsel and its accountants, during normal business
hours, reasonable access to the books, records and other data of IPEC or
GHI, as the case may be, relating to the business of IPEC or GHI in their
possession with respect to periods prior to the Closing and the right to
make copies and extracts therefrom, to the extent that such access may be
reasonably required by the requesting party (a) to facilitate the
investigation, litigation and final disposition of any claims which may
have been or may be made against any party or its affiliates and (b) for
any other reasonable business purpose.
7.2 RECORD RETENTION. Each party agrees that for a period of not less than
five years following the Closing Date, such party shall not destroy or
otherwise dispose of any of the Books and Records of IPEC or GHI relating
to the business of IPEC or GHI in his or its possession with respect to
periods prior to the Closing Date. Each party shall have the right to
destroy all or part of such Books and Records after the fifth anniversary
of the Closing Date or, at an earlier time by giving each other party
hereto 30 days prior written notice of such intended
Share Exchange Agreement - Page 26
disposition and by offering to deliver to the other party or parties, at
the other party's or parties' expense, custody of such Books and Records
as such party may intend to destroy.
7.3 POST-CLOSING ASSISTANCE. IPEC and GHI will provide each other with such
assistance as may reasonably be requested in connection with the
preparation of any Tax Return, any audit or other examination by any
taxing authority, or any judicial or administrative proceedings relating
to liability for Taxes, and each will retain and provide the requesting
party with any records or information that may be reasonably relevant to
such return, audit or examination, proceedings or determination. The party
requesting assistance shall reimburse the other party for reasonable
out-of-pocket expenses incurred in providing such assistance. Any
information obtained pursuant to this SECTION 7.3 or pursuant to any other
Section hereof providing for the sharing of information or the review of
any Tax Return or other schedule relating to Taxes shall be kept
confidential by the parties hereto.
7.4 SEC REPORTING. With a view to making available the benefits of certain
rules and regulations of the SEC which may at any time permit the sale of
the GHI Common Stock to the public without registration, from and after
the Closing, the new management of GHI will:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all
times;
(b) file with the SEC in a timely manner all reports and other documents
required of GHI under the Exchange Act; and
(c) continue a listing with a recognized securities manual for a period
of at least three years after the Closing.
ARTICLE VIII
SURVIVAL
8.1 SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND WARRANTIES. Notwithstanding
any investigation conducted or notice or knowledge obtained by or on
behalf of any party hereto, each agreement in this Agreement shall survive
the Closing without limitation as to time until fully performed and each
representation and warranty in this Agreement or in the Exhibits,
Schedules or certificates delivered pursuant to this Agreement shall
survive the Closing for a period of two years (other than the
representations and warranties contained in SECTION 3.5 which shall
survive the Closing without limitation as to time, and other than the
representations and warranties contained in SECTION 3.14, which shall
survive the Closing until the earlier of (i) three and one-half years from
the Closing Date and (ii) three years following the date on which GHI
files the Tax Return relating to the taxable period from January 1, 2002
through the Closing Date). Notice must be given to the party from whom
indemnification is sought of any claim for indemnification under Article
VIII prior to the termination of the relevant survival period.
Share Exchange Agreement - Page 27
ARTICLE IX
TERMINATION OF AGREEMENT
9.1 TERMINATION. This Agreement may be terminated at any time prior to the
Closing as follows:
(a) by mutual written consent of GHI and IPEC;
(b) by GHI or IPEC by written notice to the other party hereto, if the
Closing shall not have occurred on or prior to the close of business
on February 14, 2002 (unless such event has been caused by a breach
of this Agreement by the party seeking such termination);
(c) by GHI or by IPEC if a Governmental or Regulatory Body has
permanently enjoined or prohibited consummation of the Share Exchange
and such court or government action is final and nonappealable;
(d) by GHI if IPEC has failed to comply in any material respect with any
of its covenants or agreements under this Agreement that are required
to be complied with prior to the date of such termination; or
(e) by IPEC if GHI has failed to comply in any material respect with any
of its covenants or agreements under this Agreement that are required
to be complied with prior to the date of such termination.
Should IPEC terminate this Agreement for any reason other than a default
by GHI as described in SECTION 9.1(E) hereof, IPEC shall be liable for all
damages caused by the failure to close. Similarly, if GHI should terminate
this Agreement for any reason other than a default by IPEC as described in
SECTION 9.1(D) hereof, GHI shall be liable for all damages caused by the
failure to close.
9.2 SURVIVAL AFTER TERMINATION. If this Agreement is terminated pursuant to
SECTION 9.1, (a) this Agreement shall become null and void and of no
further force and effect, except for the provisions of SECTION 5.1
relating to the obligation to keep confidential certain information and
(b) there shall be no liability on the part of IPEC or GHI or their
respective affiliates.
ARTICLE X
MISCELLANEOUS
10.1 EXPENSES. IPEC shall be responsible for the reasonable legal and
accounting fees in connection with the Share Exchange.
10.2 FURTHER ASSURANCES. At any time and from time to time after the Closing
Date at the request of GHI, and without further consideration, IPEC will
execute and deliver such other instruments of sale, transfer, conveyance,
assignment and confirmation and take such other
Share Exchange Agreement - Page 28
action as GHI may reasonably deem necessary or desirable in order to
transfer, convey and assign the Shares to GHI and to assist GHI in
exercising all rights with respect thereto. The parties shall use their
best efforts to fulfill or obtain the fulfillment of the conditions to the
Closing, including, without limitation, the execution and delivery of any
document or other papers, the execution and delivery of which are
conditions precedent to the Closing.
10.3 NOTICES. All notices, requests, demands and other communications required
or permitted to be given hereunder shall be in writing and shall be given
personally, sent by facsimile transmission or sent by prepaid air courier
or certified or express mail, postage prepaid. Any such notice shall be
deemed to have been given (a) when received, if delivered in person, sent
by facsimile transmission and confirmed in writing within three (3)
business days thereafter or sent by prepaid air courier or (b) three (3)
business days following the mailing thereof, if mailed by certified first
class mail, postage prepaid, return receipt requested, in any such case as
follows (or to such other address or addresses as a party may have advised
the other in the manner provided in this SECTION 10.3):
If to IPEC:
International Plastics and Equipment Corp.
RD #3, Box 0-X
Xxxxxxxxx Xxxxxxxxxx Xxxx
Xxx Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx Xx., President
with a copy to:
Xxxxx X. Xxxxxxxx, General Counsel
International Plastics and Equipment Corp.
RD #3, Box 0-X
Xxxxxxxxx Xxxxxxxxxx Xxxx
Xxx Xxxxxx, XX 00000
If to GHI:
Golden Hole, Inc.
00000 Xxxxx Xxxxx
Xxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx, President
with a copy to:
Xxxx Xxxx Xxxx Xxxxxxxxxx & Xxxxxxxxx, P.C.
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxx X. Xxxxxxxxx, Esq.
Share Exchange Agreement - Page 29
10.4 MEDIATION. The parties hereto encourage the prompt and equitable
settlement of all controversies or claims (a "DISPUTE") between or among
the parties and their affiliates including but not limited to those
arising out of or relating to this Agreement or the transactions
contemplated hereby. At any time, either party can give the other written
notice that it desires to settle a Dispute. Within 10 days of delivery of
such notice, the parties agree to cause their officers having authority to
resolve such differences to meet for two out of four continuous days (the
"NEGOTIATION PERIOD"), the parties agree to submit their Dispute to a
mediator to work with them to resolve their differences. Such mediator
shall be selected by mutual agreement of the parties. The parties shall
participate in the mediation proceeding in good faith with the intention
to settle. The mediation shall be conducted pursuant to the rules
generally used by the mediator in the mediator's practice, which rules may
be modified or amended with the written consent of the parties. No later
than three business days prior to the mediation, each party shall deliver
to the mediator all information reasonably required for the mediator to
understand the Dispute and the issues presented. The mediation shall be
determined upon the first to occur of the following: (i) by the execution
of a settlement agreement resolving the Dispute by the parties; (ii) by a
written declaration of the mediator to the effect that further efforts at
mediation are no longer worthwhile; or (iii) after the completion of two
full days of mediation effect that mediation proceedings are terminated.
No party shall xxx any other party hereto in connection with any Dispute,
except for enforcement of the negotiation and mediation process set forth
herein, and the arbitration provisions set forth in SECTION 10.5 hereof
shall not be applicable, in each case, prior to termination of the
Negotiation Period and of the mediation as provided above.
10.5 ARBITRATION. Any dispute, controversy, or claim arising out of, relating
to, or in connection with, this Agreement or the agreements or
transactions contemplated by this Agreement shall be finally settled by
binding arbitration. The arbitration shall be conducted and the arbitrator
chosen in accordance with the rule of the American Arbitration Association
in effect at the time of the arbitration, except as they may be modified
herein or by mutual agreement of GHI and IPEC. In connection with any such
arbitration, each party shall be afforded the opportunity to conduct
discovery in accordance with the Federal Rules of Civil Procedure.
(a) The seat of the arbitration shall be in Pittsburgh, Pennsylvania.
Each of IPEC and GHI hereby irrevocably submits to the jurisdiction
of the arbitrator in Pittsburgh, Pennsylvania, and waives any defense
in an arbitration based upon any claim that such party is not subject
personally to the jurisdiction of such arbitrator, that such
arbitration is brought in an inconvenient format, or that such venue
is improper.
(b) The arbitral award shall be in writing and shall be final and binding
on each of the parties to this Agreement. The award may include an
award of costs, including reasonable attorneys' fees and
disbursements. Judgment upon the award may be entered by any court
having jurisdiction thereof or having jurisdiction over the parties
or their assets. IPEC and GHI acknowledge and agree that by agreeing
to these arbitration provisions each of the parties hereto is waiving
any right that such party may have to a jury trial with respect to
the resolution of any dispute under this Agreement or the agreements
or transactions contemplated hereby.
Share Exchange Agreement - Page 30
10.6 PUBLICITY. No publicity release or announcement concerning this Agreement
or the transactions contemplated hereby shall be made without advance
approval thereof by GHI and IPEC except as may be required by applicable
law or the rules and regulations of the applicable regulatory authorities.
10.7 ENTIRE AGREEMENT. This Agreement (including the Exhibits and Schedules)
and the agreements, certificates and other documents delivered pursuant to
this Agreement contain the entire agreement among the parties with respect
to the transactions described herein, and supersede all prior agreements,
written or oral, with respect thereto.
10.8 WAIVERS AND AMENDMENTS. This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by
a written instrument signed by the parties or, in the case of a waiver, by
the party waiving compliance. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a
waiver thereof
10.9 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada without regard to
principles of conflicts of law.
10.10 BINDING EFFECT, NO ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns. This Agreement is not assignable by any party hereto
without the prior written consent of the other parties hereto except by
operation of law and any other purported assignment shall be null and
void.
10.11 COUNTERPARTS. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall
be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of
copies hereof each signed by less than all, but together signed by all of
the parties hereto.
10.12 EXHIBITS AND SCHEDULES. The Exhibits and Schedules are a part of this
Agreement as if fully set forth herein. All references herein to Sections,
subsections, clauses, Exhibits and Schedules shall be deemed references to
such parts of this Agreement, unless the context shall otherwise require.
10.13 EFFECT OF DISCLOSURE ON SCHEDULES. Any item disclosed on any Schedule to
this Agreement shall only be deemed to be disclosed in connection with (a)
the specific representation and warranty to which such Schedule is
expressly referenced, (b) any specific representation and warranty which
expressly cross-references such Schedule and (c) any specific
representation and warranty to which any other Schedule to this Agreement
is expressly referenced if such other Schedule expressly cross-references
such Schedule.
10.14 HEADINGS. The headings in this Agreement are for reference only, and shall
not affect the interpretation of this Agreement.
10.15 SEVERABILITY OF PROVISIONS. If any provision or any portion of any
provision of this Agreement or the application of such provision or any
portion thereof to any person or circumstance, shall be held invalid or
unenforceable, the remaining portion of such provision and the remaining
provisions of this Agreement, or the application of such provision or
Share Exchange Agreement - Page 31
portion of such provision as is held invalid or unenforceable to persons
or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
GHI:
GOLDEN HOLE, INC.
By: /s/ XXXXXXX XXXXXXX
-------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: President
IPEC:
INTERNATIONAL PLASTICS AND
EQUIPMENT CORP.
By: /s/ XXXXXX XXXXXXXX XX.
-------------------------------------
Name: Xxxxxx Xxxxxxxx Xx.
Title: President
Share Exchange Agreement - Page 32
SCHEDULE A
IPEC SHAREHOLDERS
IPEC SHAREHOLDER IPEC SHARES OWNED GHI SHARES TO BE
ISSUED
Xxxx, Xxxxxxx 16,670 46,098
Xxxxxx, Xxxx 3,333 9,217
Xxxxxx, Xxxxxxx 16,667 46,089
Xxxxxx, Xxxxx X. 16,667 46,089
Xxxxx, Xxxxx 16,667 46,089
XxXxxx, Xxxxx Xx. 6,667 18,436
XxXxxx, Xxxxx III 3,333 9,217
Xxxxxx, Xxxxxx 3,333 9,217
Xxxxxxxx, Xxxxx 6,667 18,436
Xxxxxxxx, Xxx 1,500,000 4,147,946
Xxxxxxxx, Xxxxxx X. 33,334 92,178
Xxxxxxxx, Xxx 16,667 46,089
Xxxxx, Xxxxxx X. 16,667 46,089
Knock, Xxxxxx X. 16,667 46,089
Knock, Xxxxxxx 16,667 46,089
Xxxxx, Xxxxxx X. 8,333 23,043
Xxxx, Xxxxx 1,500,000 4,147,946
Xxxx, Xxxxxxx, J. Sr. 7,000 19,357
Long, Xxxxxx X. 3,333 9,217
Xxxxxxxxx, Xxxxxx 16,667 46,089
Xxxxxx, Xxx 5,000 13,826
Xxxxxx, Xxx 6,667 18,436
Share Exchange Agreement - Page 33
Xxxxxx, Xxx 6,536 18,074
Xxxxxxx, Xxxxx 3,334 9,220
Phymouth Partners 50,000 138,265
Xxxxxxx, Xxxxx X. 8,334 23,046
Xxxxxx, Xxxxx X. 3,333 9,217
Xxxxxxx, Xxxx 8,333 23,043
Xxxxxxx, Xxxxxx 6,536 18,074
Xxxxxxx, X. Xxx 8,333 23,043
Xxxxxx, Xxxxxxx Xx. 8,333 23,043
Xxxxxx, Xxxxxxx XXX 3,333 9,217
Xxxxxxxxxx, Xxxx 13,334 36,872
Xxxxxxxxxx, Xxxxx 16,667 46,089
Xxxxxxxxxx, Xxxxx 16,667 46,089
Xxxxxxx, Xxxx 8,333 23,043
Xxxx, Xxxxxx 33,333 92,176
TOTAL 3,431,745 9,489,796
Share Exchange Agreement - Page 34
