COMMON STOCK PURCHASE AGREEMENT
Exhibit
No 10.1
THIS
COMMON STOCK PURCHASE AGREEMENT with Liberty Capital Asset Management,
Shareholders (this "Agreement") is made and entered into as of November 03,
2008, by and among Corporate Outfitters, Inc. a Delaware corporation, (the
“Company”); and Liberty Capital Asset Management, a Nevada Corporation
(“Liberty”), (Liberty, and the Company are collectively referred to herein as
the "Parties"), with reference to the following facts:
RECITALS
WHEREAS,
the Company is a publicly traded corporation. A development stage company that
is looking to enter into the promotional branding industry with the objective of
adding value to a wide variety of products by endorsing them with the corporate
logos of a company for use by the company’s employees or as gifts or promotional
items. Liberty is a privately held corporation engaged in the business of
acquiring loan pools of non performing loans and has a platform which then
re-perform those loans by restructuring the financial parameters.
WHEREAS,
Liberty consists of 20,000,000 shares authorized of which Liberty owns 100
percent of the shares of the common stock at par value of $0.001 of Liberty (the
“Liberty Shares”) which constitutes all of the issued and outstanding shares of
common stock of Liberty.
WHEREAS,
the Company desires to purchase 100 percent of the outstanding Liberty Shares
from Liberty and Liberty desires to sell, transfer and assign 100 percent of the
Liberty Shares for consideration.
WHEREAS,
the Parties have determined it to be in their best interest for Liberty to
surrender and transfer 100 percent of the shares of its Common Stock to the
Company under the exemption made available pursuant to Section 4 of the
Securities Act of 1933, as amended (the "Securities
Act");
NOW,
THEREFORE, in consideration of the covenants, representations, warranties and
agreements contained herein, and intending to be legally bound hereby, the
Parties agree as follows:
PURCHASE
OF THE SHARES AND CONSIDERATION
Shares
Being Purchased. The total consideration for the purchase (the “Purchase Price”) shall consist
of an exchange of 100 percent of the shares and other valuable consideration
described herein.
Consideration. Subject
to the terms and conditions of this Agreement and upon consideration of the
purchase of such shares to Liberty, at the Closing Liberty shall sell, transfer,
assign and deliver to the Company 100 percent of shares of Liberty common stock
(the shares of Liberty’s common stock issued, sold and delivered to the Company
hereunder are hereinafter referred to as the “Liberty Shares”) and shall also
deliver to the Company duly executed stock powers for sale, transfer and
assignment of the Liberty Shares.
Promptly
after its receipt from the Company of the Liberty shares, Liberty hereby agrees
to cancel the shares and issue new shares of like amount in the name of the
Company.
Additionally,
Liberty shall represent its financial position of which Company will be
purchasing 100 percent of said financial statements at time of closing as per
attached (Exhibit A).
CLOSING
Time and
Place. Subject to the provisions of this Agreement, the
closing of the transactions contemplated by this Agreement (the "Closing") shall
take place at the offices of Liberty Capital Asset Management, 0000 Xx. Xxxx
Xxxxxxx., Xxxxx 000, Xxxxxxxxx, Xxxxxx 00000, on November 03, 2008 (the "Closing
Date") or at such other place and on such other date as is mutually agreeable to
the Parties.
CLOSING
DELIVERIES
Closing
Deliveries. At the Closing, each of the Parties shall make the
Closing deliveries required of it pursuant to Article IX of this
Agreement.
REPRESENTATIONS AND
WARRANTIES OF COMPANY
Except as
set forth in the written disclosure schedule attached hereto
as (Exhibit A) dated as of the date hereof prepared by the Company,
signed by the President and Chief Financial Officer of the Company and delivered
to Liberty simultaneously with the execution hereof (the “Company Disclosure
Schedule”), the Company represents and warrants to Liberty that all of
the statements contained in this Article IV are true and correct as of the date
of this Agreement (or, if made as of a specified date, as of such date) and will
be true, complete and correct as of the Closing Date (or if made as of a
specified date, as of such date). Each exception set forth in the
Disclosure Schedule and each other response to this Agreement set forth in the
Disclosure Schedule is identified by reference to, or has been grouped under a
heading referring to, a specific individual section of this Agreement and
relates only to such section except to the extent that one portion of the
Disclosure Schedule specifically refers to another portion thereof, identifying
such other portion by section reference or similar specific
cross-reference.
Organization and
Qualification.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the state of Delaware and has the requisite corporate power
and authority to carry on its business as it is now being
conducted. There is no pending or threatened proceeding for the
dissolution or liquidation of the Company.
The
Company (i) does not, directly or indirectly, own any interest in any
corporation, partnership, joint venture, limited liability Company, or other
Person and (ii) is not subject to any obligation or requirement to provide funds
to or to make any investment (in the form of a loan, capital contribution or
otherwise) in or to any Person. For purposes of this Agreement,
"Person" shall
mean any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, institution, government,
entity or any group comprised of one or more of the foregoing.
The
Company is duly qualified or licensed to do business and is in good standing in
each jurisdiction in which the nature of its business or the properties owned or
leased by it makes such qualification or licensing necessary, except for any
such jurisdiction where the failure to so qualify or be licensed, individually
and in the aggregate for all such jurisdictions, would not reasonably be
expected to have a Material Adverse Effect. For purposes of this Agreement,
"Material Adverse
Effect" means an action, event or occurrence if it has, or could
reasonably be expected to have, a material adverse effect on the capitalization,
financial condition or results of operations of the person or entity in
question. Any item or event susceptible of measurement in monetary
terms which, when considered together with similar items or events, does not
exceed the amount of $25,000, shall not be considered a Material Adverse
Effect.
The
Company has provided or will, promptly following the date of this Agreement,
provide to Liberty complete and accurate copies of the Articles of Incorporation
and Bylaws of the Company, as currently in effect, and minutes and other records
of the meetings and other proceedings of the Board of Directors of the
Company. The Company is not in violation of any provisions of its
Articles of Incorporation or Bylaws.
Capitalization.
The
authorized capital stock of the Company consists of 75,000,000 shares of Common
Stock, $0.0001 par value per share, of which 7,806,350 shares are issued or to
be issued and outstanding. All issued and outstanding shares of
Company Common Stock are validly issued and outstanding, fully paid and
nonassessable and free of preemptive rights. With respect to other
shares of Company Common Stock, i) there are no shares of capital stock or other
equity securities of the Company outstanding. (ii) There are outstanding 0
options, 0 warrants, to which the Company is a party or is bound, requiring or
which could require the issuance, sale or transfer by the Company of any shares
of capital stock of the Company or any securities convertible into or
exchangeable or exercisable for, or rights to purchase or otherwise acquire, any
shares of capital stock of the Company. There are no stock
appreciation, phantom stock or similar rights relating to the
Company.
All of
the shares of Company Common Stock issued and outstanding immediately prior to
the Closing have been issued in compliance with applicable federal and state
securities laws in reliance on exemptions from registration or qualification
thereunder.
Authority. The
Company has the requisite corporate power and authority to enter into this
Agreement, to perform its obligations hereunder, and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby, have been duly authorized by all necessary corporate action
on the part of the Company. This Agreement has been duly executed and
delivered by the Company and constitutes a legal, valid and binding obligation
of the Company, enforceable against it in accordance with its
terms.
No Conflict, Required
Filings and Consents.
The
execution and delivery of this Agreement and any instrument required hereby to
be executed and delivered by the Company at the Closing does not, and the
performance of this Agreement by the Company will not, (i) conflict with or
violate the Articles of Incorporation or Bylaws of the Company; or (ii) conflict
with or violate any law, rule, regulation, order, judgment or decree applicable
to the Company or by which it or any of its properties is bound or affected; or
(iii) result in any breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default), or impair in any
material respect the Company's rights or materially alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of any note, bond,
mortgage, indenture, deed of trust, lease, permit, concession, franchise,
license, agreement or other instrument or obligation to which the Company is a
party or to which the properties or assets of the Company are subject, or (iv)
result in the creation of any security interest, lien, claim, pledge, agreement,
limitation on voting rights, charge or other encumbrance of any material nature
(collectively, “Liens”) on any of the
properties or assets of the Company pursuant to any Company Agreement (as
defined in Section 4.11 below).
The
execution and delivery of this Agreement and any instrument required hereby to
be executed and delivered by the Company at the Closing does not, and the
performance of this Agreement by the Company will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
court, administrative or regulatory agency or commission or other governmental
authority or instrumentality (whether domestic or foreign, a “Governmental
Entity”).
The
consent of, or the delivery of notice to or filing with, any party to a Company
Agreement (as defined in Section 4.11 below) is not required for the execution
and delivery by the Company of this Agreement or the consummation of the
transactions contemplated by this Agreement.
Compliance;
Permits.
The
Company is not in conflict with, or in default or violation of (and has not
received any notices of violation. with respect to), any law, rule, regulation,
order, judgment or decree applicable to the Company or by which it or any of its
properties is bound or affected, and the Company has no knowledge of any such
conflict, default or violation thereunder, except in each case for any such
conflicts, defaults or violations that is not currently having or would not have
a Material Adverse Effect on the Company.
The
Company holds all permits, licenses, easements, variances, exemptions, consents,
certificates, authorizations, registrations, orders and other approvals from
Governmental Entities that are material to the operation of the business of the
Company as it is now being conducted (collectively, the “Company
Permits”). The Company Permits are in full force and effect,
have not been violated in any respect that is currently having or would have a
Material Adverse Effect on the Company, and no suspension, revocation or
cancellation thereof has been threatened and there is no action, proceeding or
investigation pending or, to the Company's knowledge, threatened regarding
suspension, revocation or cancellation of any Company Permits, except where the
suspension, revocation or cancellation of such Company Permits would not have a
Material Adverse Effect on the Company.
Litigation. There
is no legal actions pending or, threatened against the Company, its assets, or
(b) pending, threatened against an officer or director of the
Company.
Taxes. The
Company has timely filed all tax returns and reports required to be filed by it
(after giving effect to any filing extension properly granted by a governmental
entity having authority to do so) ("Company Tax Return"). Each such
Company Tax Return is true, correct and complete in all material
respects. Company has paid, within the time and manner prescribed by
law, all material taxes that are due and payable. No Company Tax Return is
the subject of any investigation, audit or other proceeding by any federal,
state or local tax authority.
Labor
Matters.
The
Company is in compliance in all material respects with all applicable laws
respecting employment and employment practices, terms and conditions of
employment and wages and laws, and is not engaged in any unfair labor
practices;
There are
no controversies pending or, to the knowledge of the Company, threatened,
between the Company and any of its respective employees, consultants or
independent contractors, which controversies have had or could reasonably be
expected to have a Material Adverse Effect on the Company;
The
Company is not a party to any collective bargaining agreement or other labor
union contract applicable to persons employed by the Company, nor does the
Company know of any activities or proceedings of any labor union to organize any
such employees; and
The
Company has no knowledge of any labor disputes, strikes, slowdowns, work
stoppages, lockouts, or threats thereof, by or with respect to any employees of,
or consultants or independent contractors to, the Company.
Benefit
Plans. The Company has not adopted and is not a party to any
bonus, pension, profit sharing, deferred compensation, incentive compensation,
stock ownership, stock purchase, stock option, phantom stock, retirement,
vacation, severance, disability, death benefit, hospitalization, medical or
other employee benefit plan, arrangement or understanding (whether or not
legally binding) providing benefits to any current or former employee, officer
or director of the Company or any person affiliated with the
Company.
Financial
Statements. Attached to the Company Disclosure Schedule are
(i) the audited balance sheet of the Company as of December 31, 2007 (the
“Audited Company Balance Sheet”), together with the related statements of income
and cash flows for the fiscal year of the Company then ended and for the
cumulative period from the date of inception through December 31, 2007 (the
“Audited Financial
Statements”), all certified by Xxxxxxx-Xxxxx whose audit reports thereon
are included therewith. The Audited Financial Statements (including,
in each case, any related notes thereto) (i) were prepared in accordance with
generally accepted accounting principles (“GAAP”) applied on a
consistent basis throughout the period involved, (ii) are complete and correct,
and (iii) fairly presents the financial position of the Company as of the date
thereof and the results of its operations and cash flows and stockholder equity
for the period indicated. Except as noted in the opinions contained
in the Audited Financial Statements, such Audited Financial Statements and
opinions were rendered without qualification or exception and were not subject
to any contingency.
Contracts and
Commitments.
Except
for the contracts, commitments, leases, licenses and agreements listed on
Section 4.11 of the Company Disclosure Schedule (the "Company Agreements"),
the Company is not party to or subject to:
any
agreement (or group of related agreements) which requires future expenditures by
the Company in excess of $25,000 or is otherwise material to the Company's
business;
any
material contract or agreement for the purchase or sale of any commodity,
product, material, supplies, equipment or other personal property, other than
purchase or sale orders entered into in the ordinary course of business
consistent with past practices;
any
employment, consulting or independent contractor agreements;
any
distributor, sales representative, sales agent, commission or similar agreement,
whether or not in writing;
any
material license agreement (whether as licensor or licensee) or royalty
agreement;
any
agreement with any current or former stockholder, officer or director of the
Company, or any “affiliate” or “associate” of such persons (as such terms are
defined in the rules and regulations promulgated under the Securities Act),
including without limitation any agreement or other arrangement providing for
the furnishing of services by, rental of real or personal property from, or
otherwise requiring payments to, any such person;
any
agreement or other commitment with any person or entity containing covenants
limiting the freedom of the Company or any of the Company’s affiliates,
employees, directors, officers, consultants or agents to compete in any line of
business or with any person or entity or in any geographical location or to use
or disclose any information in their possession;
any loan
agreement, indenture, note, bond, debenture, guarantee or any other document or
agreement evidencing a capitalized lease obligation or indebtedness to any
person or any agreement of guaranty, indemnification or other similar commitment
with respect to the obligations or liabilities of any other Person;
any
agreement for the disposition of Company assets other than in the ordinary
course of business consistent with past practices;
any
agreement for the acquisition of the business or shares of another
party;
any
contract or agreement concerning a partnership or joint venture with one or more
Person;
any lease
of real property;
any
agreement which contains a fixed penalty or liquidated damages clause for late
performance or other default by the Company to the extent that such late
performance or default would have a Material Adverse Effect on the Company;
or
any other
agreement or contract (or group of related agreements or contracts) to the
extent not otherwise disclosed in the Company Disclosure Schedule, the
performance of which involves consideration paid by the Company in excess of
$100,000.00 in any one year period.
Correct
and complete copies of all Company Agreements, including all amendments thereto,
have been delivered to Liberty. The Company has not breached, is not
in default under, and has not received written notice of any breach of or
default under, any agreement required to be disclosed in Section 4.11 of the
Company Disclosure Schedule (each, a “Material
Contract”). To the Company’s knowledge, no other party to any
Material Contract has breached or is in default of any of its obligations
thereunder to the extent that such breach or default would have a Material
Adverse Effect on the Company. Each Material Contract is in full
force and effect, except in any such case for breaches, defaults or failures to
be in full force and effect that do not currently have or would not have a
Material Adverse Effect on the Company. Each Material Contract is a legal, valid
and binding obligation of the Company and each of the other parties thereto,
enforceable in accordance with its terms, except that the enforcement thereof
may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity.
The
consent of, or the delivery of notice to or filing with, any party to a Material
Contract is not required for the execution and delivery by the Company of this
Agreement or the consummation of the transactions contemplated under the
Agreement.
Absence of Certain Changes
and Events. Since the date of the Audited Company Balance
Sheet, the Company has conducted its business in the ordinary course consistent
with past practice and, since such date, there has not occurred:
any
event, damage, destruction or loss, whether covered by insurance or not, which
has had or reasonably is expected to have a Material Adverse Effect on the
Company or its assets;
any entry
by the Company into a commitment or transaction material to the Company, which
is not in the ordinary course of business consistent with past
practice;
any
change by the Company in accounting principles, methods or practices, except
insofar as may have been required by a change in GAAP;
any
declaration, payment or setting aside for payment of any dividends or
distributions in respect to shares of Company Common Stock, or any redemption,
purchase or other acquisition of any shares of Company Common
Stock;
any
cancellation of any debts or waiver or release of any right or claim of the
Company individually or in the aggregate material to the Company, whether or not
in the ordinary course of business;
any
revaluations by the Company of any of its assets or liabilities, including
without limitation, writing-off notes or accounts receivable;
any
material increase in the rate or terms of compensation payable or to become
payable by the Company to any of its personnel or consultants; any bonus,
incentive compensation, service award or other benefit granted, made or accrued,
contingently or otherwise, for or to the credit of any Company personnel;
employee welfare, pension, retirement, profit-sharing or similar payment or
arrangement made or agreed to by the Company for any Company personnel except
for contributions in accordance with prior practice made to, and payments made
to employees under, plans and arrangements existing on the date of the Audited
Company Balance Sheet;
any
adoption of a plan of liquidation or resolutions providing for the liquidation,
dissolution, merger, consolidation or other reorganization of the Company, other
than in connection with the transactions contemplated hereby;
any
purchase, acquisition or sale by the Company of any assets, other than in the
ordinary course of business;
any
amendment, cancellation or termination of any Material Contract, including,
without limitation, license or sublicense, or other instrument to which the
Company is a party or to which the Company or any of the assets of the Company
is bound;
any
failure to pay when due any material obligation of the Company;
any
failure to operate the business of the Company in the ordinary course with an
effort to preserve the business intact, to keep available to the Company the
services of its personnel, and to preserve for the Company the goodwill of its
customers and others having business relations with the Company except for such
failures that would not have a Material Adverse Effect on the
Company;
any
commitment to borrow money entered into by the Company, or any loans made or
agreed to be made by the Company, involving more than $100,000 individually or
$500,000 in the aggregate (other than credit provided by suppliers or
manufacturers in the ordinary course of the Company's business consistent with
past practices);
any
liabilities incurred by the Company involving $10,000 or more individually
and $25,000 or more in the aggregate, other than liabilities incurred in the
ordinary course of business consistent with past practices;
any
payment, discharge or satisfaction of any material liabilities of the Company or
any material capital expenditure of the Company, other than (i) the payment,
discharge or satisfaction in the ordinary course of business consistent
with prior practice of liabilities reflected or reserved against in the
Audited Financial Statements or incurred in the ordinary course of business
consistent with prior practice since the date of the Audited Company Balance
Sheet, and (ii) any capital expenditures involving $10,000 or less
individually and $25,000 or less in the aggregate;
any
amendment of the Company's Articles of Incorporation or Company Bylaws;
or
any
agreement by the Company to do any of the things described in the preceding
clauses (a) through (p) of this Section 4.12, other than as expressly
contemplated or provided for in this Agreement.
Properties, Assets,
Encumbrances; No Undisclosed Liabilities.
The
Company has good, valid and marketable title to, a valid leasehold interest in,
or valid license rights to, all the properties and assets which it purports to
own, lease or license (real, personal and mixed, tangible and intangible),
including, without, limitation, all the properties and assets reflected in the
Company Balance Sheet (except for personal property sold since the date of the
Company Balance Sheet in the ordinary course of business consistent with past
practice), except as would not have a Material Adverse Effect on the Company,
and such properties and assets are all of the assets (whether tangible or
intangible) that are used or required for use in the operation of its business
as currently or proposed to be conducted. All properties and assets
reflected in the Company Balance Sheet are free and clear of all Liens, except
for Liens reflected on the Company Balance Sheet and Liens for current taxes not
yet due and other Liens that do not, individually or in the aggregate,
materially detract from the value or impair the use of the property or assets
subject thereto. Section 4.13 of the Company Disclosure Schedule
contains a complete and accurate list of all leases pursuant to which the
Company leases from others material amounts of real or personal
property. Each such lease is in good standing, valid and effective in
accordance with its terms, and there is not under any such lease, any existing
material default or event of default (or event which with the giving of notice
or lapse of time, or both, would constitute a material default).
There are
no liabilities of the Company, other than (i) liabilities disclosed or provided
for in the Company Balance Sheet, or (ii) liabilities incurred in the ordinary
course of business since the date of the Company Balance Sheet and which, if
existing, would not have a Material Adverse Effect on the
Company. There is no probable or reasonably possible loss contingency
(within the meaning of Statement of Financial Accounting Standards No. 5) known
to the Company, which is not reflected in the Financial Statements (including
the notes thereto).
Environmental
Matters.
The
Company is in compliance in all-material respects with all applicable
Environmental Laws (as defined below). The Company has not received
any communication from a Governmental Entity, citizens group, employee or other
person that alleges that the Company is not in full compliance with all
applicable Environmental Laws.
There is
no Environmental Claim (as defined below) pending against the Company or, to the
Company's knowledge, threatened against any person whose liability for any
Environmental Claim the Company has or may have retained or assumed either
contractually or by operation of law.
“Environmental Claim”
means any claim, action, cause of action, investigation or notice by any person
alleging potential liability arising out of, based on or resulting from (i) the
presence, or release into the environment, of any Material of Environmental
Concern at any location, whether or not owned by the Company, or (ii)
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law.
“Environmental Laws”
means all federal, state, local and foreign laws and regulations relating to
pollution or protection or preservation of human health or the environment
including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata and natural resources, and including, without
limitation, all laws and regulations relating to emissions, discharges, releases
or threatened releases of Materials of Environmental Concern, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
containment (whether above ground or underground), disposal, transport or
handling of Materials of Environmental Concern, or the preservation of the
environment or mitigation of adverse effects thereon and all laws and
regulations with regard to recordkeeping, notification, disclosure and reporting
requirements respecting Materials of Environmental Concern.
“Materials of Environmental
Concern” means all pollutants, containments, toxic or hazardous
substances, materials and wastes, petroleum and petroleum products, asbestos and
asbestos-containing materials, polychlorinated biphenyls, radon or lead-based
paints and materials.
Intellectual
Property.
“Intellectual
Property” is defined as all intellectual property in which Company has
any right, title, or interest (including a licensed right other than rights to
licensed software that is generally commercially available) or which has been,
is being, or is expected to be used, exploited, or commercialized by Company in
the conduct of its business, including but not limited to all “Patents”
(hereinafter defined), all “Marks” (hereinafter defined), all “Copyrights”
(hereinafter defined), and all “Confidential Information” (hereinafter
defined).
(1) “Patents” is defined
to include all concepts, ideas, designs, formulas, inventions (whether
patentable or not), techniques, all U.S. and foreign patent applications, and
all U.S. and foreign patents.
(2) “Marks” is defined to
include all words, names, logos, symbols, trade names, source indicating
indicia, trade dress, trademarks, marks, U.S. and foreign applications to
register marks, and U.S. and foreign registrations.
(3) “Copyrights” is
defined to include all copyrights, U.S. and foreign, whether registered or not,
all copyright applications, all copyright registrations, including but not
limited to the copyrights in Company's business documents and files, customer
documents and files, software, product designs and packaging, advertising,
promotional material, and software products (whether developed or in
development).
(4) “Confidential
Information” is defined to include, but not limited to, confidential
information, financial information, business trade secrets, marketing
information, financial and technical trade secrets, techniques, processes, and
know-how.
Section
4.15(b) of the Company Disclosure Schedule contains a complete and accurate list
and description of (i) Intellectual Property which is material to the
business of the Company; (ii) all patent applications, issued patents,
trademark applications, trademark registrations, copyright applications, and
copyright registrations, (iii) all licenses of Intellectual Property to the
Company (other than licensed software that is generally commercially available)
which are material to the business of Company; and (iv) all licenses and other
agreements, written or not, from the Company to any third party granting any
rights or interests in the Intellectual Property.
Except as
set forth in Section 4.15(c) of the Company Disclosure Schedule:
(1) Company
is the sole owner, free and clear of any Lien or encumbrance, and without the
payment of any monies or royalty except with respect to off-the-shelf software,
of the Intellectual Property;
(2) Company
has taken, and will continue to take, all actions which are necessary or
advisable to acquire and protect the Intellectual Property, consistent with
prudent commercial practices;
(3) Company's
rights in the Intellectual Property are valid and enforceable;
(4) Company
has received no demand, claim, notice or inquiry from any person in respect of
the Intellectual Property which challenges, threatens to challenge or inquires
as to whether there is any basis to challenge, the validity of, the rights of
the Company in, or the right of the Company to use, any such Intellectual
Property, and the Company knows of no basis for any such
challenge;
(5) Company
is not in violation or infringement of, and has not violated or infringed, any
proprietary rights of any other person;
(6) no
person has or is infringing, misappropriating, or making unauthorized use of any
Intellectual Property;
(7) except
on an arm's-length basis for value and other commercially reasonable terms, the
Company has not licensed, consented or acquiesced to the taking or use of any
Intellectual Property by any person;
(8) all
Marks and Copyrights which are material to the business of the Company were
either (a) authored by regular employees of Company within the scope of their
employment and Company was thus the original author pursuant to the work made
for hire doctrine, or (b) authored by independent contractors subject to
enforceable non-disclosure and assignment agreements;
(9) the
execution and consummation of this Agreement will not adversely impair or impact
the value of or the Company’s future enjoyment and exploitation of the
Intellectual Property;
(10) all
current or former Company personnel, including partners, directors, officers,
employees, agents, consultants and contractors, who have contributed to or
participated in the conception, creation, or development of any Intellectual
Property have executed effective and proper agreements containing non-disclosure
and assignment provisions for the benefit of Company. True and
complete copies of these agreements have been delivered to
Liberty. After giving effect to the transactions contemplated herein,
no current or former personnel of Company will possess any right, title or
interest in the Intellectual Property; and
(11) Company
is not in breach or violation of any agreement relating to any Intellectual
Property which would materially impair Company's rights, title, or interest in
the Intellectual Property or agreement.
Insurance. Section
4.16 of the Company Disclosure Schedule contains a true, accurate and complete
list of all policies or binders of fire, liability, title, workers' compensation
and other forms of insurance (showing as to each policy or binder the carrier,
policy number, coverage limits, expiration dates, annual premiums and a general
description of the type of coverage provided) maintained by the Company on the
business, assets or personnel of the Company. All of such
policies are sufficient for compliance with all requirements of all contracts to
which the Company is a party and all state, federal, local or foreign laws,
rules and regulations applicable to the Company. The Company has paid
all premiums due on such insurance policies and is in compliance with and not in
default under any of such policies or binders. The Company has not
failed to give any notice or to present any claim under any such policy or
binder in a due and timely fashion when the effect of such default or such
failure would be to render a material claim uninsured. The Company
has not received any notice from any insurer advising of reduced coverage or
increased premiums on existing policies or binders. There are no
outstanding unpaid claims under any such policies or binders. Such
policies and binders are in full force and effect, and the Company has delivered
true and correct copies of such policies and binders to
Shareholder.
Equipment. All
of the tangible personal property of the Company that is material, either
individually or in the aggregate, to the operation of the Company's business is
in good working order, operating condition and state of repair, ordinary wear
and tear excepted.
Interested Party
Transactions. No stockholder, officer or director of the
Company, or any person with whom any such stockholder, officer or director has
any direct or indirect relation by blood, marriage or adoption, or any entity in
which any such person owns any beneficial interest (other than a publicly-held
corporation whose stock is traded on a national securities exchange or in the
over-the-counter market and less than 1% of the stock of which is beneficially
owned by all of such persons), has any interest in (i) to the Company’s
knowledge, any contract, arrangement or understanding with, or relating to, the
business or operations of the Company that could reasonably be expected to
result in a liability or obligation of the Company, (ii) any loan, arrangement,
understanding, agreement or contract for or relating to indebtedness with the
Company, (iii) any material property (real, personal or mixed), tangible or
intangible, used or currently intended to be used in the business or operations
of the Company, (iv) to the Company’s knowledge, any business or entity that
competes with the Company, or (v) to the Company’s knowledge, any other
transaction that would be required to be reported as a Certain Relationship or
Related Transaction, pursuant to Item 404, or any other provisions of,
Regulation S-B promulgated by the SEC, if the Company filed such
reports.
Change of Control
Agreements. The Company has no plans, programs or agreements
to which it is a party, or to which it is subject, pursuant to which payments
(or acceleration of benefits) may be required upon, or may become payable
directly or indirectly as a result of, any change of control of the
Company.
Books and
Records. The books of account, minute books (including,
without limitation, all actions of the shareholders of the Company, the board of
directors of the Company and all committees of the board of directors of the
Company) stock record books and other records of the Company are complete and
correct in all material respects and have been maintained in accordance with
sound business practices, including an adequate system of internal controls,
except for such failures with respect thereto as do not have a Material Adverse
Effect on the Company.
Brokers. Except
as described in Section 4.21 of the Company Disclosure Schedule, no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company.
Disclosure. The
representations and warranties of the Company herein, or in any document,
exhibit, statement, certificate or schedule furnished by or on behalf of the
Company as required by this Agreement, do not contain and will not contain any
untrue statement of a material fact and do not omit and will not omit to state
any material fact necessary in order to make the statements herein or therein,
in light of the circumstances under which they were made, not
misleading. There are no material facts or circumstances relating to
the Company which have not been disclosed herein.
REPRESENTATIONS AND
WARRANTIES OF LIBERTY
Except as
set forth in the financial statements attached hereto as Exhibit
A Liberty, by virtue of signing this Agreement, represents and
warrants to the Company that the statements contained in this Article V are
true, correct and complete as of the date of this Agreement (or, if made as of a
specified date, as of such date) and will be true, correct and complete as of
the Closing Date (or, if made as of a specified date, as of such
date).
Organization and
Qualification.
Liberty
is a corporation duly organized, validly existing and in good standing under the
laws of the state of Nevada and has the requisite corporate power and authority
to carry on its business as it is now being conducted. There is no
pending or threatened proceeding for the dissolution or liquidation of
Liberty.
Liberty
(i) does not, directly or indirectly, own any interest in any corporation,
partnership, joint venture, limited liability company, or other Person and (ii)
is not subject to any obligation or requirement to provide funds to or to make
any investment (in the form of a loan, capital contribution or otherwise) in or
to any Person. For purposes of this Agreement, "Person" shall mean
any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, institution, government,
entity or any group comprised of one or more of the foregoing.
Liberty
is duly qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the properties owned or
leased by it makes such qualification or licensing necessary, except for any
such jurisdiction where the failure to so qualify or be licensed, individually
and in the aggregate for all such jurisdictions, would not reasonably be
expected to have a Material Adverse Effect. For purposes of this Agreement,
"Material Adverse
Effect" means an action, event or occurrence if it has, or could
reasonably be expected to have, a material adverse effect on the capitalization,
financial condition or results of operations of the person or entity in
question. Any item or event susceptible of measurement in monetary
terms which, when considered together with similar items or events, does not
exceed the amount of $25,000, shall not be considered a Material Adverse
Effect.
Liberty
has provided or will, promptly following the date of this Agreement, provide to
the Company complete and accurate copies of the Articles of Incorporation and
Bylaws of Liberty, as currently in effect, and minutes and other records of the
meetings and other proceedings of the Board of Directors
Liberty. Liberty is not in violation of any provisions of its
Articles of Incorporation or Bylaws.
Compliance;
Permits.
Liberty
is not in conflict with, or in default or violation of (and has not received any
notices of violation. with respect to), any law, rule, regulation, order,
judgment or decree applicable to Liberty or by which it or any of its properties
is bound or affected, and Liberty has no knowledge of any such conflict, default
or violation thereunder, except in each case for any such conflicts, defaults or
violations that is not currently having or would not have a Material Adverse
Effect on Liberty.
Liberty
holds all permits, licenses, easements, variances, exemptions, consents,
certificates, authorizations, registrations, orders and other approvals from
Governmental Entities that are material to the operation of the business of
Liberty as it is now being conducted (collectively, the “Liberty
Permits”). Liberty Permits are in full force and effect, have
not been violated in any respect that is currently having or would have a
Material Adverse Effect on Liberty, and no suspension, revocation or
cancellation thereof has been threatened and there is no action, proceeding or
investigation pending or, to Liberty's knowledge, threatened regarding
suspension, revocation or cancellation of any Liberty Permits, except where the
suspension, revocation or cancellation of such Liberty Permits would not have a
Material Adverse Effect on Liberty.
Litigation. There
are no other legal actions, pending or threatened against Liberty.
Taxes. Liberty
has timely filed all tax returns and reports required to be filed by it (after
giving effect to any filing extension properly granted by a governmental entity
having authority to do so) ("Liberty Tax Return"). Each such Liberty
Tax Return is true, correct and complete in all material
respects. Company has paid, within the time and manner prescribed by
law, all material taxes that are due and payable. No Liberty Tax
Return is the subject of any investigation, audit or other proceeding by any
federal, state or local tax authority. All tax liability disclosed or otherwise
incurred prior to Closing shall remain the sole responsibility of Liberty and
not of the Company.
Labor
Matters.
Liberty
is in compliance in all material respects with all applicable laws respecting
employment and employment practices, terms and conditions of employment and
wages and laws, and is not engaged in any unfair labor practices;
There are
no controversies pending or, to the knowledge of Liberty, threatened, between
Liberty and any of its respective employees, consultants or independent
contractors, which controversies have had or could reasonably be expected to
have a Material Adverse Effect on Liberty;
Liberty
is not a party to any collective bargaining agreement or other labor union
contract applicable to persons employed by Liberty, nor does Liberty know of any
activities or proceedings of any labor union to organize any such employees;
and
Liberty
has no knowledge of any labor disputes, strikes, slowdowns, work stoppages,
lockouts, or threats thereof, by or with respect to any employees of, or
consultants or independent contractors to, Liberty.
Benefit
Plans. Liberty has not adopted and is not a party to any
bonus, pension, profit sharing, deferred compensation, incentive compensation,
stock ownership, stock purchase, stock option, phantom stock, retirement,
vacation, severance, disability, death benefit, hospitalization, medical or
other employee benefit plan, arrangement or understanding (whether or not
legally binding) providing benefits to any current or former employee, officer
or director of Liberty or any person affiliated with Liberty.
Financial
Statements. As represented in Exhibit A are (i) the audited
balance sheet of Liberty as of December 31,2007 (the “Audited Liberty Balance
Sheet”), together with the related statements of income and cash flows for each
of the two fiscal years of Liberty then ended and for the cumulative period from
the date of inception through December 31,2007 (the “Audited Financial
Statements”), all certified by a certified accounting firm whose audit
reports thereon are included therewith. The Audited Financial
Statements (including, in each case, any related notes thereto) (i) were
prepared in accordance with generally accepted accounting principles (“GAAP”) applied on a
consistent basis throughout the period involved, (ii) are complete and correct,
and (iii) fairly presents the financial position of Liberty as of the date
thereof and the results of its operations and cash flows and stockholder equity
for the period indicated. Except as noted in the opinions contained
in the Audited Financial Statements, such Audited Financial Statements and
opinions were rendered without qualification or exception and were not subject
to any contingency.
Except
for the contracts, commitments, leases, licenses and agreements listed on
Liberty Disclosure Schedule (the "Liberty Agreements"),
Liberty is not party to or subject to:
any
agreement (or group of related agreements) which requires future expenditures by
the Company in excess of $25,000 or is otherwise material to the Company's
business;
any
material contract or agreement for the purchase or sale of any commodity,
product, material, supplies, equipment or other personal property, other than
purchase or sale orders entered into in the ordinary course of business
consistent with past practices;
any
employment, consulting or independent contractor agreements;
any
distributor, sales representative, sales agent, commission or similar agreement,
whether or not in writing;
any
material license agreement (whether as licensor or licensee) or royalty
agreement;
any
agreement with any current or former stockholder, officer or director of
Liberty, or any “affiliate” or “associate” of such persons (as such terms are
defined in the rules and regulations promulgated under the Securities Act),
including without limitation any agreement or other arrangement providing for
the furnishing of services by, rental of real or personal property from, or
otherwise requiring payments to, any such person;
any
agreement or other commitment with any person or entity containing covenants
limiting the freedom of Liberty or any of the Liberty’s affiliates, employees,
directors, officers, consultants or agents to compete in any line of business or
with any person or entity or in any geographical location or to use or disclose
any information in their possession;
any loan
agreement, indenture, note, bond, debenture, guarantee or any other document or
agreement evidencing a capitalized lease obligation or indebtedness to any
person or any agreement of guaranty, indemnification or other similar commitment
with respect to the obligations or liabilities of any other Person;
any
agreement for the disposition of Company assets other than in the ordinary
course of business consistent with past practices;
any
agreement for the acquisition of the business or shares of another
party;
any
contract or agreement concerning a partnership or joint venture with one or more
Person;
any lease
of real property;
any
agreement which contains a fixed penalty or liquidated damages clause for late
performance or other default by Liberty to the extent that such late performance
or default would have a Material Adverse Effect on Liberty; or
any other
agreement or contract (or group of related agreements or contracts) to the
extent not otherwise disclosed in the Liberty Disclosure Schedule, the
performance of which involves consideration paid by Liberty in excess of
$100,000.00 in any one year period.
Correct
and complete copies of all Liberty Agreements, including all amendments thereto,
have been delivered to the Company. Liberty has not breached, is not
in default under, and has not received written notice of any breach of or
default under, any agreement required to be disclosed in the Liberty Disclosure
Schedule (each, a “Material
Contract”). To Liberty’s knowledge, no other party to any
Material Contract has breached or is in default of any of its obligations
thereunder to the extent that such breach or default would have a Material
Adverse Effect on Liberty. Each Material Contract is in full force
and effect, except in any such case for breaches, defaults or failures to be in
full force and effect that do not currently have or would not have a Material
Adverse Effect on Liberty. Each Material Contract is a legal, valid and binding
obligation of Liberty and each of the other parties thereto, enforceable in
accordance with its terms, except that the enforcement thereof may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally and (ii) general
principles of equity.
The
consent of, or the delivery of notice to or filing with, any party to a Material
Contract is not required for the execution and delivery by Liberty of this
Agreement or the consummation of the transactions contemplated under the
Agreement.
Absence of Certain Changes
and Events. Since the date of the Audited Liberty Balance
Sheet, the Company has conducted its business in the ordinary course consistent
with past practice and, since such date, there has not occurred:
any
event, damage, destruction or loss, whether covered by insurance or not, which
has had or reasonably is expected to have a Material Adverse Effect on Liberty
or its assets;
any entry
by Liberty into a commitment or transaction material to the Company, which is
not in the ordinary course of business consistent with past
practice;
any
change by Liberty in accounting principles, methods or practices, except insofar
as may have been required by a change in GAAP;
any
declaration, payment or setting aside for payment of any dividends or
distributions in respect to shares of Liberty Common Stock, or any redemption,
purchase or other acquisition of any shares of Liberty Common
Stock;
any
cancellation of any debts or waiver or release of any right or claim of Liberty
individually or in the aggregate material to Liberty, whether or not in the
ordinary course of business;
any
revaluations by Liberty of any of its assets or liabilities, including without
limitation, writing-off notes or accounts receivable;
any
material increase in the rate or terms of compensation payable or to become
payable by Liberty to any of its personnel or consultants; any bonus, incentive
compensation, service award or other benefit granted, made or accrued,
contingently or otherwise, for or to the credit of any Liberty personnel;
employee welfare, pension, retirement, profit-sharing or similar payment or
arrangement made or agreed to by Liberty for any Company personnel except for
contributions in accordance with prior practice made to, and payments made to
employees under, plans and arrangements existing on the date of the Audited
Liberty Balance Sheet;
any
adoption of a plan of liquidation or resolutions providing for the liquidation,
dissolution, merger, consolidation or other reorganization of Liberty, other
than in connection with the transactions contemplated hereby;
any
purchase, acquisition or sale by Liberty of any assets, other than in the
ordinary course of business;
any
amendment, cancellation or termination of any Material Contract, including,
without limitation, license or sublicense, or other instrument to which Liberty
is a party or to which Liberty or any of the assets of Liberty is
bound;
any
failure to pay when due any material obligation of Liberty;
any
failure to operate the business of Liberty in the ordinary course with an effort
to preserve the business intact, to keep available to Liberty the services of
its personnel, and to preserve for Liberty the goodwill of its customers and
others having business relations with Liberty except for such failures that
would not have a Material Adverse Effect on Liberty;
any
commitment to borrow money entered into by Liberty, or any loans made or agreed
to be made by Liberty, involving more than $100,000 individually or $500,000 in
the aggregate (other than credit provided by suppliers or manufacturers in the
ordinary course of the Liberty 's business consistent with past
practices);
any
liabilities incurred by Liberty involving $10,000 or more individually and
$25,000 or more in the aggregate, other than liabilities incurred in the
ordinary course of business consistent with past practices;
any
payment, discharge or satisfaction of any material liabilities of Liberty or any
material capital expenditure of Liberty, other than (i) the payment, discharge
or satisfaction in the ordinary course of business consistent with prior
practice of liabilities reflected or reserved against in the Audited
Financial Statements or incurred in the ordinary course of business consistent
with prior practice since the date of the Audited Liberty Balance Sheet,
and (ii) any capital expenditures involving $10,000 or less individually
and $25,000 or less in the aggregate;
any
amendment of Liberty’s Articles of Incorporation or Liberty Bylaws;
or
any
agreement by Liberty to do any of the things described in the preceding clauses
(a) through (p) of this Section, other than as expressly contemplated or
provided for in this Agreement.
Properties, Assets,
Encumbrances; No Undisclosed Liabilities.
Liberty
has good, valid and marketable title to, a valid leasehold interest in, or valid
license rights to, all the properties and assets which it purports to own, lease
or license (real, personal and mixed, tangible and intangible), including,
without, limitation, all the properties and assets reflected in Liberty Balance
Sheet (except for personal property sold since the date of Liberty Balance Sheet
in the ordinary course of business consistent with past practice), except as
would not have a Material Adverse Effect on Liberty, and such properties and
assets are all of the assets (whether tangible or intangible) that are used or
required for use in the operation of its business as currently or proposed to be
conducted. All properties and assets reflected in the Liberty Balance
Sheet are free and clear of all Liens, except for Liens reflected on the Company
Balance Sheet and Liens for current taxes not yet due and other Liens that do
not, individually or in the aggregate, materially detract from the value or
impair the use of the property or assets subject thereto. Liberty
Disclosure Schedule contains a complete and accurate list of all leases pursuant
to which Liberty leases from others material amounts of real or personal
property. Each such lease is in good standing, valid and effective in
accordance with its terms, and there is not under any such lease, any existing
material default or event of default (or event which with the giving of notice
or lapse of time, or both, would constitute a material default).
There are
no liabilities of Liberty, other than (i) liabilities disclosed or provided for
in Liberty Balance Sheet, or (ii) liabilities incurred in the ordinary course of
business since the date of the Liberty Balance Sheet and which, if existing,
would not have a Material Adverse Effect on Liberty. There is no
probable or reasonably possible loss contingency (within the meaning of
Statement of Financial Accounting Standards No. 5) known to Liberty, which is
not reflected in the Financial Statements (including the notes
thereto).
Environmental
Matters.
Liberty
is in compliance in all-material respects with all applicable Environmental Laws
(as defined below). Liberty has not received any communication from a
Governmental Entity, citizens group, employee or other person that alleges that
Liberty is not in full compliance with all applicable Environmental
Laws.
There is
no Environmental Claim (as defined below) pending against Liberty or, to
Liberty’s knowledge, threatened against any person whose liability for any
Environmental Claim Liberty has or may have retained or assumed either
contractually or by operation of law.
“Environmental Claim”
means any claim, action, cause of action, investigation or notice by any person
alleging potential liability arising out of, based on or resulting from (i) the
presence, or release into the environment, of any Material of Environmental
Concern at any location, whether or not owned by Liberty, or (ii) circumstances
forming the basis of any violation, or alleged violation, of any Environmental
Law.
“Environmental Laws”
means all federal, state, local and foreign laws and regulations relating to
pollution or protection or preservation of human health or the environment
including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata and natural resources, and including, without
limitation, all laws and regulations relating to emissions, discharges, releases
or threatened releases of Materials of Environmental Concern, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
containment (whether above ground or underground), disposal, transport or
handling of Materials of Environmental Concern, or the preservation of the
environment or mitigation of adverse effects thereon and all laws and
regulations with regard to recordkeeping, notification, disclosure and reporting
requirements respecting Materials of Environmental Concern.
“Materials of Environmental
Concern” means all pollutants, containments, toxic or hazardous
substances, materials and wastes, petroleum and petroleum products, asbestos and
asbestos-containing materials, polychlorinated biphenyls, radon or lead-based
paints and materials.
Intellectual
Property.
“Intellectual
Property” is defined as all intellectual property in which Liberty has
any right, title, or interest (including a licensed right other than rights to
licensed software that is generally commercially available) or which has been,
is being, or is expected to be used, exploited, or commercialized by Liberty in
the conduct of its business, including but not limited to all “Patents”
(hereinafter defined), all “Marks” (hereinafter defined), all “Copyrights”
(hereinafter defined), and all “Confidential Information” (hereinafter
defined).
(1) “Patents” is defined
to include all concepts, ideas, designs, formulas, inventions (whether
patentable or not), techniques, all U.S. and foreign patent applications, and
all U.S. and foreign patents.
(2) “Marks” is defined to
include all words, names, logos, symbols, trade names, source indicating
indicia, trade dress, trademarks, marks, U.S. and foreign applications to
register marks, and U.S. and foreign registrations.
(3) “Copyrights” is
defined to include all copyrights, U.S. and foreign, whether registered or not,
all copyright applications, all copyright registrations, including but not
limited to the copyrights in Liberty's business documents and files, customer
documents and files, software, product designs and packaging, advertising,
promotional material, and software products (whether developed or in
development).
(4) “Confidential
Information” is defined to include, but not limited to, confidential
information, financial information, business trade secrets, marketing
information, financial and technical trade secrets, techniques, processes, and
know-how.
Liberty
Disclosure Schedule contains a complete and accurate list and description of
(i) Intellectual Property which is material to the business of Liberty;
(ii) all patent applications, issued patents, trademark applications,
trademark registrations, copyright applications, and copyright registrations,
(iii) all licenses of Intellectual Property to Liberty (other than licensed
software that is generally commercially available) which are material to the
business of Liberty; and (iv) all licenses and other agreements, written or not,
from Liberty to any third party granting any rights or interests in the
Intellectual Property.
Except as
set forth in Liberty Disclosure Schedule:
(1) Liberty
is the sole owner, free and clear of any Lien or encumbrance, and without the
payment of any monies or royalty except with respect to off-the-shelf software,
of the Intellectual Property;
(2) Liberty
has taken, and will continue to take, all actions which are necessary or
advisable to acquire and protect the Intellectual Property, consistent with
prudent commercial practices;
(3) Liberty’s
rights in the Intellectual Property are valid and enforceable;
(4) Liberty
has received no demand, claim, notice or inquiry from any person in respect of
the Intellectual Property which challenges, threatens to challenge or inquires
as to whether there is any basis to challenge, the validity of, the rights of
Liberty in, or the right of Liberty to use, any such Intellectual Property, and
Liberty knows of no basis for any such challenge;
(5) Liberty
is not in violation or infringement of, and has not violated or infringed, any
proprietary rights of any other person;
(6) no
person has or is infringing, misappropriating, or making unauthorized use of any
Intellectual Property;
(7) except
on an arm's-length basis for value and other commercially reasonable terms,
Liberty has not licensed, consented or acquiesced to the taking or use of any
Intellectual Property by any person;
(8) all
Marks and Copyrights which are material to the business of Liberty were either
(a) authored by regular employees of Liberty within the scope of their
employment and Liberty was thus the original author pursuant to the work made
for hire doctrine, or (b) authored by independent contractors subject to
enforceable non-disclosure and assignment agreements;
(9) the
execution and consummation of this Agreement will not adversely impair or impact
the value of or the Liberty’s future enjoyment and exploitation of the
Intellectual Property;
(10) all
current or former Liberty personnel, including partners, directors, officers,
employees, agents, consultants and contractors, who have contributed to or
participated in the conception, creation, or development of any Intellectual
Property have executed effective and proper agreements containing non-disclosure
and assignment provisions for the benefit of Liberty. True and
complete copies of these agreements have been delivered to
Liberty. After giving effect to the transactions contemplated herein,
no current or former personnel of Liberty will possess any right, title or
interest in the Intellectual Property; and
(11) Liberty
is not in breach or violation of any agreement relating to any Intellectual
Property which would materially impair Company's rights, title, or interest in
the Intellectual Property or agreement.
Insurance. Liberty
Disclosure Schedule contains a true, accurate and complete list of all policies
or binders of fire, liability, title, workers' compensation and other forms of
insurance (showing as to each policy or binder the carrier, policy number,
coverage limits, expiration dates, annual premiums and a general description of
the type of coverage provided) maintained by Liberty on the business, assets or
personnel of Liberty. All of such policies are sufficient for
compliance with all requirements of all contracts to which Liberty is a party
and all state, federal, local or foreign laws, rules and regulations applicable
to Liberty. Liberty has paid all premiums due on such insurance
policies and is in compliance with and not in default under any of such policies
or binders. Liberty has not failed to give any notice or to present
any claim under any such policy or binder in a due and timely fashion when the
effect of such default or such failure would be to render a material claim
uninsured. Liberty has not received any notice from any insurer
advising of reduced coverage or increased premiums on existing policies or
binders. There are no outstanding unpaid claims under any such
policies or binders. Such policies and binders are in full force and
effect, and Liberty has delivered true and correct copies of such policies and
binders to the Company.
Equipment. All
of the tangible personal property of Liberty that is material, either
individually or in the aggregate, to the operation of Liberty’s business is in
good working order, operating condition and state of repair, ordinary wear and
tear excepted.
Interested Party
Transactions. No stockholder, officer or director of Liberty,
or any person with whom any such stockholder, officer or director has any direct
or indirect relation by blood, marriage or adoption, or any entity in which any
such person owns any beneficial interest (other than a publicly-held corporation
whose stock is traded on a national securities exchange or in the
over-the-counter market and less than 1% of the stock of which is beneficially
owned by all of such persons), has any interest in (i) to Liberty’s knowledge,
any contract, arrangement or understanding with, or relating to, the business or
operations of Liberty that could reasonably be expected to result in a liability
or obligation of Liberty, (ii) any loan, arrangement, understanding, agreement
or contract for or relating to indebtedness with Liberty, (iii) any material
property (real, personal or mixed), tangible or intangible, used or currently
intended to be used in the business or operations of Liberty, (iv) to Liberty’s
knowledge, any business or entity that competes with Liberty, or (v) to
Liberty’s knowledge, any other transaction that would be required to be reported
as a Certain Relationship or Related Transaction, pursuant to Item 404, or any
other provisions of, Regulation S-B promulgated by the SEC, if Liberty filed
such reports.
Change of Control
Agreements. Liberty has no plans, programs or agreements to
which it is a party, or to which it is subject, pursuant to which payments (or
acceleration of benefits) may be required upon, or may become payable directly
or indirectly as a result of, any change of control of Liberty that have not
been disclosed.
Books and
Records. The books of account, minute books (including,
without limitation, all actions of the shareholders of Liberty, the board of
directors of the Company and all committees of the board of directors of
Liberty) stock record books and other records of Liberty are complete and
correct in all material respects and have been maintained in accordance with
sound business practices, including an adequate system of internal controls,
except for such failures with respect thereto as do not have a Material Adverse
Effect on Liberty.
Brokers. Except
as described in Liberty Disclosure Schedule, no broker, finder or investment
banker is entitled to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Liberty.
Disclosure. The
representations and warranties of Liberty herein, or in any document, exhibit,
statement, certificate or schedule furnished by or on behalf of Liberty as
required by this Agreement, do not contain and will not contain any untrue
statement of a material fact and do not omit and will not omit to state any
material fact necessary in order to make the statements herein or therein, in
light of the circumstances under which they were made, not
misleading. There are no material facts or circumstances relating to
Liberty which have not been disclosed herein.
Ownership of
Shares. Liberty are the sole record and beneficial owners of
the Liberty Shares, which constitute all of the issued and outstanding shares of
the Liberty’s Common Stock and the Liberty Shares are not subject to any
encumbrance, any rights of first refusal of any kind, options, preemptive
rights, voting arrangements or other rights of third parties to acquire any of
such shares. Liberty has good and valid title to, and has the
unrestricted (except for restrictions imposed generally under applicable federal
and state securities laws) right to transfer and sell such Liberty’s shares of
Liberty Common Stock to Company in accordance with the terms of this
Agreement.
Authority. Liberty
each have the power and authority to enter into and to perform their respective
obligations under this Agreement and each of the agreements, certificates and
documents required to be delivered by Liberty pursuant to the terms of this
Agreement. The execution, delivery and performance of this Agreement,
and the consummation of the transactions contemplated hereby, have been duly
authorized by all necessary action on the part of Liberty. The
Agreement constitutes the legal, valid and binding obligation of Liberty,
enforceable against Liberty in accordance with its terms, subject to the effect,
if any, of (a) applicable bankruptcy and other similar laws affecting the rights
of creditors generally and (b) rules of law and equity governing specific
performance, injunctive relief and other equitable remedies.
Conflicts. Neither
the execution and delivery by Liberty of this Agreement nor the performance by
Liberty of its obligations hereunder will conflict with any contract, agreement
or arrangement (whether or not in writing) to which Liberty is a party or any
law, rule, regulation, order or injunction applicable to Liberty. There are no
legal proceedings pending or, to the best knowledge of Liberty, threatened
against Liberty that would prevent the consummation of the transactions
contemplated by this Agreement. No consent, notice or approval is
required of any person in connection with Liberty’s execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby.
PRE-CLOSING
COVENANTS
Operation
of Liberty.
Except as
specifically provided in this Agreement, as of the date of this Agreement and
post the Closing Date, Liberty shall appoint Company as manager and company will
assume the responsibilities to:
maintain
its books of account and records in the usual and ordinary manner, and in
conformity with its past practices;
pay
accounts payable and other obligations when they become due and payable in the
ordinary course of business consistent with past practices except to the extent
disputed in good faith;
maintain
all insurances, fidelity bonds, surety bonds, and officer liability policies
necessary to conduct business and maintain licenses.
maintain and increase the relationships
with loan originating teams and branch locations as well warehouse lines and
investor relations.
conduct
its business, if any, in the ordinary course consistent with past practices, or
as required by this Agreement;
pay all
taxes when due and file all required Tax Returns on or before the due date
therefore except to the extent disputed in good faith;
make
appropriate provisions in its books of account and records for taxes relating to
its operations during such period (regardless of whether such taxes are required
to be reflected in a tax return having a due date on or prior to the Closing
Date); and
withhold
all taxes required to be withheld and remitted by or on behalf of Liberty in
connection with amounts paid or owing to any Liberty personnel or other person,
and pay such taxes to the proper governmental authority or set aside such taxes
in accounts for such purpose.
without the
prior written consent of Company and Liberty, between the date of this Agreement
and the Closing Date (or termination of this Agreement), Liberty neither
shall:
issue or
promise to issue any capital stock or any options, warrants or other rights to
subscribe for or purchase any capital stock or any securities convertible into
or exchangeable or exercisable for, or rights to purchase or otherwise acquire,
any shares of the capital stock of Liberty;
declare
or pay any dividends on or make any other distributions (whether in cash, stock
or property) in respect of any of its capital stock, or split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock, or repurchase or otherwise acquire, directly or indirectly, any
shares of its capital stock;
enter
into any material contract or commitment, or amend or otherwise modify or waive
any of the terms of any of its material contracts, other than in the ordinary
course of business consistent with past practice, or violate or terminate any
such material contracts;
transfer,
assign or license to any person or entity any rights to its intellectual
property other than in the ordinary course of business consistent with past
practice;
enter
into or amend any agreements pursuant to which any other party is granted
exclusive marketing or other exclusive rights of any type or scope with respect
to any of its products or intellectual property;
adopt or
amend any employee benefit or stock purchase or option plan;
except as
may be required or reasonably necessary in order to complete the transactions
contemplated by this Agreement, agree to borrow any funds, incur any
indebtedness or directly or indirectly guarantee or agree to guarantee the
obligations of others, or draw or borrow on any lines of credit that may be
available to Liberty;
place or
allow to be placed a lien or encumbrance on any of the assets of the
Company;
pay,
discharge or satisfy in an amount in excess of $5,000 in any one case or $30,000
in the aggregate, any claim, liability or obligation (absolute, accrued,
asserted or unasserted, contingent or otherwise) arising other than in the
ordinary course of business, other than the payment, discharge or satisfaction
of liabilities reflected or reserved against in the Company's financial
statements;
make any
capital expenditures, capital additions or capital improvements except in the
ordinary course of business and consistent with past practice;
materially
reduce the amount of any material insurance coverage provided by existing
insurance policies;
terminate
or waive any right of substantial value;
commence
a lawsuit other than (1) for the routine collection of bills, (2) in such cases
where it in good faith determines that failure to commence suit would result in
the material impairment of a valuable aspect of its business, provided that it
consults with Company prior to the filing of such a suit, or (3) for a breach of
this Agreement;
sell,
lease, license or otherwise dispose of or encumber any of its properties or
assets which are material, individually or in the aggregate, to its business,
except in the ordinary course of business consistent with past
practice;
commit
any act or omit to do any act which will cause a breach of this Agreement or any
other material agreement, contract, lease or commitment to which the Company is
party;
violate
any law or governmental approval, including, without limitation any federal or
state securities laws;
make any
loan, advance, distribution or payment of any type or to any Person other than
as contemplated by this Agreement;
amend its
Articles of Incorporation or Bylaws;
except as
contemplated by this Agreement, consolidate with, or agree to merge or
consolidate with, or purchase substantially all of the assets of, or otherwise
acquire any business or any Person or division thereof;
make any
tax election or settle or compromise any tax liability other than in the
ordinary course of business consistent with past practices;
lease or
purchase or agree to lease or purchase any assets or properties; or
take, or
agree in writing or otherwise to take, any action which would make any of its
representations or warranties contained in this Agreement untrue or incorrect in
any material respect or prevent it from performing or cause it not to perform
its covenants hereunder in any material respect.
ADDITIONAL
AGREEMENTS
Access to
Information.
From the
date hereof to the Closing Date, Liberty shall afford, and shall cause its
officers, directors, employees, representatives and agents to afford, to the
Company and to the officers, employees and agents of the Company reasonable
access during normal business hours to Liberty's officers, employees, agents,
representatives, properties, books, records and contracts, and shall furnish to
the Company all financial, operating and other data and information as the
Company, through its agents, officers, employees or other representatives, may
reasonably request. To facilitate this Liberty shall appoint Company as
manager
No
investigation pursuant to Section 8.1(a) shall affect any representations or
warranties of the Parties herein or the conditions to the obligations of the
Parties.
Expenses and
Taxes. Each of the Parties shall pay their respective costs
incurred in connection with the preparation, negotiation, execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby,
including, without limitation, the fees of the attorneys, accountants and
advisors.
News
Releases. Except as otherwise required by law or the rules of
the SEC or NASD, so long as this Agreement is in effect, Company will not permit
any of their respective affiliates or representatives to, issue or cause the
publication of any press release or make any other public announcement with
respect to the transactions contemplated by this Agreement without the consent
of the other party, which consent shall not be unreasonably withheld or
delayed. Subject to the foregoing, the Company and Liberty will
cooperate with each other in the development and distribution of all press
releases and other public announcements with respect to this Agreement and the
transactions contemplated hereby, and will furnish the other with drafts of any
such releases and announcements as far in advance as reasonably
possible.
Additional
Agreements. Subject to the terms and conditions of this
Agreement, each Party agrees to use all reasonable efforts to take, or cause to
be taken, all action and to do, or cause to be done, all things necessary,
proper or advisable under applicable law to consummate and make effective the
transactions contemplated by this Agreement. If at any time after the
Closing Date any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and directors of each such
corporation shall take all such necessary or desirable action.
Notification of Certain
Matters.
Liberty
shall give prompt notice to the Company of any material inaccuracy in any
representation or warranty made by it herein, or any material failure of Liberty
to comply with or satisfy any covenant, condition or agreement to be complied
with or satisfied by it under this Agreement; provided, however, that no such
notification shall affect the representations or warranties or covenants or
agreements of Liberty or the conditions to the obligations of Liberty
hereunder.
The
Company and Liberty shall each promptly advise the other orally and in writing
of any change or event having, or which, insofar as can reasonably be foreseen,
in the future would have, a Material Adverse Effect or any adverse effect on the
right or ability of any Party to enter into and complete the transactions
contemplated hereby.
Confidentiality.
Each
Party shall hold, and shall cause its officers, employees, agents and
representatives, including, without limitation, attorneys, accountants,
consultants and financial advisors who obtain such information to hold, in
confidence, and not use for any purpose other than evaluating the transactions
contemplated by this Agreement, any confidential information of another Party
obtained through the investigations permitted hereunder, which for the purposes
hereof shall not include any information which (i) is or becomes generally
available to the public other than as a result of disclosure by a Party or one
of its affiliates in violation of its obligations under this subsection, (ii)
becomes available to a Party on a nonconfidential basis from a source, other
than the Party which alleges the information is confidential or its affiliates,
which has represented that such source is entitled to disclose it, or (iii) was
known to a Party on a nonconfidential basis prior to its disclosure to such
Party hereunder. If this Agreement is terminated, at the request of a
Party, the other Party shall deliver, and cause its officers, employees, agents,
and representatives, including, without limitation, attorneys, accountants,
consultants and financial advisors who obtain confidential information of the
requesting Party pursuant to investigations permitted hereunder, to deliver to
the requesting Party all such confidential information that is written
(including copies or extracts thereof).
If a
Party or a Person to whom a Party transmits confidential information of another
Party is requested or becomes legally compelled (by oral questions,
interrogatories, requests for information or documents, subpoena, criminal or
civil investigative demand or similar process) to disclose any of such
confidential information, such Party or other Person will provide the other
Party with prompt written notice so that such Party may seek a protective order
or other appropriate remedy or waive compliance with Section
8.6(a). If such protective order or other remedy is not obtained, or
if the applicable Party waives compliance with Section 8.6(a), the Party or
Person subject to the request will furnish only that portion of such
confidential information which is legally required and will exercise reasonable
efforts to obtain reliable assurance that confidential treatment will be
accorded such confidential information.
Consents and
Filings. The Parties shall, promptly after execution of this
Agreement, make all required filings and submissions with respect to the
transactions contemplated by this Agreement. Each Party will take all
reasonable actions to obtain any other consent, authorization, order or approval
of, or any exemption by, any Person required to be obtained or made in
connection with the transactions contemplated by this Agreement. Each
Party will cooperate with and promptly furnish information to the other Party in
connection with obtaining such consents or making any such filings and will
promptly furnish to the other Party a copy of all filings made with a
governmental authority.
Company SEC
Filings. Between the date hereof and the Closing Date, Liberty
shall cooperate with the Company in connection with the preparation and filing
of, and provide to the Company for inclusion or incorporation by reference in,
any reports or filings to be filed by Company with the Commission (the "Company
Filings"). Without limiting the foregoing, Liberty shall take all
commercially reasonable actions requested by Company to enable Company to
include or incorporate by reference in the Company Filings any Financial
Statement of Company, including, without limitation, any auditors' report
thereon. Liberty agrees that (i) at least three (3) business days
prior to filing, Liberty shall furnish the Company copies of all proposed
Company Filings relating to, disclosing or describing the transactions
contemplated by this Agreement, and (ii) it shall not make any Company Filing
described in the immediately preceding clause (i) without the prior consent of
Liberty, which shall not be unreasonably withheld, conditioned or
delayed.
Tax-Free
Reorganization. The Parties intend that the transaction will
qualify as a reorganization within the meaning of Section 368(a) of the
Code. The Company and Liberty shall each use its reasonable best
efforts to cause the transactions to so qualify. Neither the Company
nor Liberty shall knowingly take any action, or knowingly fail to take any
action that would be reasonably likely to jeopardize the qualification of the
transaction as a reorganization within the meaning of Section 368(a) of the
Code. The Company and Liberty acknowledge, however, that no Party
hereto has made any representation or warranty to the other with respect to the
treatment of such transaction or the effect thereof under the applicable tax
laws, regulations or interpretations; and that no attorney’s opinion or private
revenue ruling has been obtained with respect to the effects thereof under the
Code.
CLOSING DELIVERIES AND
CONDITIONS TO CLOSING
Documents to be Delivered by
Company. At the Closing, Company shall deliver to Liberty the
following:
A
certificate of the Secretary of Company dated the Closing Date as to (i) the
corporate actions taken by Company and its board of directors to authorize the
transactions contemplated hereby, and (ii) the incumbency and signatures of the
officers of Company executing this Agreement and the other agreements,
instruments and other documents executed by or on behalf of Company pursuant to
this Agreement or otherwise in connection with the transactions contemplated
hereby;
A copy of
the resolutions adopted by the Board of Directors of Company (i) authorizing the
execution and delivery of this Agreement,
Such other customary certificates or
documents as may be reasonably required by Liberty.
Documents to be Delivered by
Liberty. At the Closing, Liberty shall deliver to the Company
the following:
A
certificate of the Secretary and President of Liberty, dated the Closing Date,
in form and substance reasonably satisfactory to the Company as to (i) the
corporate actions taken by Liberty and its board of directors to authorize the
transactions contemplated hereby, and (ii) the incumbency and signatures of the
officers of Liberty executing this Agreement and the other agreements,
instruments and other documents executed by or on behalf of Liberty pursuant to
this Agreement or otherwise in connection with the transactions contemplated
hereby;
A
certificate, executed by the President and Chief Financial Officer of the
Liberty, in such detail as the Company shall reasonably request, certifying that
all representations, warranties and covenants herein are true and correct as of
the Closing Date. The delivery of such certificate shall constitute a
representation and warranty of Liberty as to the statements set forth
therein;
A copy of
the resolutions adopted by the Board of Directors of Liberty authorizing the
execution and delivery of this Agreement and the performance by Liberty of its
obligations hereunder, certified by the Secretary and President of Liberty;
and
(d) A
certificate of good standing of Liberty from the Secretary of State of Nevada
dated as of the most recent practicable date;
(e)
Such other customary certificates or documents as may be reasonably required by
the Company.
Documents to be Delivered by
each Party. At the Closing, Liberty Stockholder shall deliver
to the Company a stock certificate representing the Liberty Shares, together
with such letters of transmittal, stock powers duly endorsed and other documents
as are necessary to effect the transfer thereof to the Company.
Conditions to Obligations of
Each Party. Each Party's obligations to consummate the
transactions contemplated by this Agreement is subject to the satisfaction or
waiver at or prior to the Closing, of each of the following
conditions:
No
temporary restraining order, preliminary or permanent injunction or other order
issued by any governmental authority or other material legal restraint or
prohibition issued or promulgated by a governmental authority preventing the
consummation of the transactions contemplated by this Agreement shall be in
effect or shall be threatened, and there shall not be any law or regulation
enacted or deemed applicable to the transactions contemplated by this Agreement
that makes consummation of such transactions illegal.
Conditions to Obligations of
the Company. The obligation of the Company to consummate the
transactions contemplated by this Agreement are subject to the satisfaction or
waiver, at or prior to the Closing, of each of the following
conditions:
Each of
the representations and warranties of the Liberty set forth in this Agreement
(i) that are not qualified by materiality must have been true and correct in all
material respects as of the Closing Date, and (ii) that are qualified by
materiality must have been true and correct as of the Closing Date; except, in
each case, for inaccuracies that would not individually or in the aggregate have
a Material Adverse Effect on either party.
All of
the obligations, covenants and agreements with which Liberty are required to
comply or that the Company is required to perform under this Agreement at or
prior to the Closing shall have been complied with and performed in all material
respects.
The
documents required to be delivered by the Liberty pursuant to this Agreement
shall have been delivered simultaneously with the Closing.
Conditions to Obligations of
Liberty. The obligation of Liberty to consummate the
transactions contemplated by this Agreement are subject to the satisfaction or
waiver, at or prior to the Closing, of each of the following
conditions:
Each of
the representations and warranties of Company set forth in this Agreement (i)
that are not qualified by materiality must have been true and correct in all
material respects as of the Closing Date, and (ii) that are qualified by
materiality must have been true and correct as of the Closing Date; except, in
each case, for inaccuracies that would not individually or in the aggregate have
a Material Adverse Effect on either Party.
All of
the obligations, covenants and agreements with which Company is required to
comply or that Company is required to perform under this Agreement at or prior
to the Closing shall have been complied with and performed in all material
respects.
The
documents required to be delivered by Company pursuant to this
Agreement shall have been delivered simultaneously with the
Closing.
TERMINATION
Termination. This
Agreement may be terminated at any time prior to the Closing Date:
by mutual
written consent of the Parties at any time prior to the Closing;
by the
Company in the event of a material breach by Liberty of any provision of this
Agreement for which written notice has been given to the Liberty and which
breach has not been cured prior to the earlier of (i) the Termination Date or
(ii) thirty (30) days following notice of such breach; provided, however that
the right to terminate this Agreement under this Section shall not be available
to Company if Company has materially breached any provision of this Agreement
and such breach remains uncured;
by
Liberty in the event of a material breach by Company of any provision of this
Agreement which breach has not been cured prior to the Termination Date;
provided, however, that the right to terminate this Agreement under this Section
shall not be available to the Liberty if Liberty has materially breached any
provision of this Agreement and such breach remains uncured;
by
Liberty if the Closing shall not have occurred by November 05, 2008 (the "Termination Date");
provided, however, the right to terminate this Agreement under this Section
shall not be available to any Party whose failure to fulfill any obligation
hereunder has been the cause of, or results in, the failure of the Closing to
have occurred on or before the Termination Date;
Effect of
Termination. Except for the provisions of the Termination
section and the provisions hereof, each of which shall survive any termination
of this Agreement, in the event of termination of this Agreement pursuant to
this Agreement, this Agreement shall forthwith become void and of no further
force and effect and the Parties shall be released from any and all obligations
hereunder; provided, however, that termination of this Agreement shall not
relieve any Party from liability for the breach of any of its obligations
hereunder.
INDEMNIFICATION
Survival of Representations
and Warranties. All representations and warranties of the
Company and Liberty contained herein or in any document, certificate or other
instrument required to be delivered hereunder in connection with the
transactions contemplated hereby shall survive the Closing for the period ending
on the date that is (12) months after the Closing Date. No claim for
indemnification for breach of a representation or warranty may be commenced
after the period of survival of such representation or warranty, provided,
however, that claims made within the applicable time period shall survive to the
extent of such claim until such claim is finally determined and, if applicable,
paid.
Indemnification.
(a) Company
agrees to indemnify, defend and hold harmless Liberty from and against any and
all demands, claims, actions or causes of action, assessments, losses, damages,
liabilities, costs and expenses, including interest, penalties and reasonable
attorneys’ fees and expenses (collectively “Damages”) asserted against,
resulting to, imposed upon or incurred by Liberty, directly or indirectly, by
reason of or resulting from (i) any breach by the Company of this Agreement, or
(ii) any inaccuracy in or breach of any of the representations, warranties,
covenants or agreements made by the Company in this Agreement.
(b) Liberty
each agree to indemnify, defend and hold harmless Company from and against any
and all demands, claims, actions or causes of action, assessments, losses,
damages, liabilities, costs and expenses, including interest, penalties and
reasonable attorneys’ fees and expenses (collectively “Damages”) asserted
against, resulting to, imposed upon or incurred by the Company , directly or
indirectly, by reason of or resulting from (i) any breach by Liberty of this
Agreement, or (ii) any inaccuracy in or breach of any of the representations,
warranties, covenants or agreements made by Liberty in this
Agreement.
Claims. Whenever
any claim shall arise for indemnification hereunder (a “Claim”), the party
entitled to indemnification (the “Indemnified Party”) shall promptly give
written notice to the party obligated to provide indemnity (the “Indemnifying
Party”) of the nature and extent of such Claim and the Damages incurred by
it. If the Damages are liquidated in amount, the notice shall so
state, and such amount shall be deemed the amount of such Claim of the
Indemnified Party against the Indemnifying Party. If the amount is
not liquidated, the notice shall so state and, in such event, such Claim shall
be deemed asserted against the Indemnifying Party but no payment or satisfaction
shall be made on account thereof until the amount of such claim is
liquidated.
If the
Indemnifying Party shall not, within thirty (30) days after the giving of such
notice by the Indemnified Party, notify the Indemnified Party in accordance
herewith that the Indemnifying Party disputes the right of the Indemnified Party
to indemnity in respect of such Claim, then any such Claim shall be paid or
satisfied as follows: (i) if said Claim is liquidated, then payment
of such Claim to the Indemnified Party shall be made by the Indemnifying Party
at the end of such period; or (ii) if the amount of such Claim is unliquidated
at the time notice is originally given to the Indemnifying Party, the
Indemnified Party shall give a second notice to the Indemnifying Party when the
liquidated amount of such Claim is known and, unless the Indemnifying Party
shall object in writing to such amount (as opposed to the Claim itself, as to
which the right to dispute had expired) within twenty (20) days after the giving
of said second notice, payment of such Claim to the Indemnified Party shall be
made by the Indemnifying Party.
If the
Indemnifying Party shall not have made payment to the Indemnified Party of any
Claim when said payment is due, then the Indemnified Party shall have the right
to take any and all actions required to collect from the Indemnifying Party the
amount of such Claim.
Any
portion of the amount of Damages asserted by the Indemnified Party in connection
with a Claim shall, if not objected to by the Indemnifying Party in accordance
with the procedures established herein, be considered to be subject to
satisfaction without further objection, as may be appropriate.
If the
Indemnifying Party shall notify the Indemnified Party that he disputes any Claim
or the amount thereof (which notice shall only be given if the Indemnifying
Party has a good faith belief that the Indemnified Party is not entitled to
indemnity or the full amount of indemnity as claimed) then the parties hereto
shall endeavor to settle and compromise such Claim, or may agree to submit the
same to arbitration, and, if unable to agree on any settlement or compromise or
on submission to arbitration, such claim shall be settled by appropriate
litigation, and any liability and the amount of the Damages established by
reason of such settlement, compromise, arbitration or litigation, or incurred as
a result thereof, shall be paid and satisfied as provided herein.
Conditions of
Indemnification with Respect to Third Party Claims. The
Indemnified Party shall promptly give notice to the Indemnifying Party of any
claim of a third party which may reasonably be expected to result in a Claim by
the Indemnified Party. The Indemnifying Party shall have the right to
participate in and, with respect to a third party Claim as to which he is
“wholly at risk,” direct the defense, compromise or settlement of such claim
with counsel selected by him, provided the Indemnifying Party gives written
notice to the Indemnified Party of his election to do so within thirty (30) days
after receipt of notice in accordance with the preceding
sentence. For the purposes of this Section, the Indemnifying Party
shall be deemed to be “wholly at risk” except as to (i) Claims as to which the
Indemnified Party may have any direct monetary risk for which it is not fully
indemnified by the terms hereof or (ii) Claims as to which the Indemnified Party
in its reasonable judgment has any risk or liability for which compensation by
monetary damages would not be adequate. If the Indemnifying Party
fails to so notify the Indemnified Party of his election to defend any such
third party claim, the Indemnified Party will (upon further notice to the
Indemnifying Party) have the right to undertake the defense, compromise or
settlement of such claim on behalf of and for the account and expense of the
Indemnifying Party, subject to the right of the Indemnifying Party to assume the
defense of such claim at any time prior to settlement, compromise or final
determination thereof.
If the
proceeding involves matters as to which the Indemnifying Party is not “wholly at
risk,” then the defense, compromise or settlement of the Claim shall be the
responsibility of the Indemnified Party, but such defense, compromise and
settlement by the Indemnified Party shall be for the expense and account of the
Indemnifying Party. Counsel for the Indemnifying Party shall consult
and cooperate at all times with counsel for the Indemnified Party in defending
against any such third party claim.
The
Indemnifying Party shall not under any circumstances, without the written
consent of the Indemnified Party, settle or compromise any claim or consent to
the entry of any judgment which does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the Indemnified Party a
release from all liability in respect of such claim.
Limitations. Notwithstanding
any of the provisions of this Article:
None of
the Parties to this Agreement nor any of their affiliates shall be entitled to
indemnification under this Article until the aggregate amount of all Claims
exceeds $25,000.00 at which time all Claims shall be subject to
indemnification;
In no
event will any indemnifying party be liable for consequential damages under this
Article.
GENERAL
PROVISIONS
Amendment. This
Agreement may not be amended except by an instrument in writing signed by each
of the Parties.
Waiver. At
any time prior to the Closing Date, any Party may (a) extend the time for the
performance of any of the obligations or other acts of any other Party hereto or
(b) waive compliance with any of the agreements of any other Party or with any
conditions to its own obligations. Any such extension or waiver shall
be valid only if set forth in an instrument in writing signed on behalf of the
Party making the waiver or granting the extension by a duly authorized
officer. No waiver of any of the provisions of this Agreement shall
be deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
Assignment and Binding
Effect. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by Company without the prior written
consent of Liberty or assigned by Liberty without the prior written consent of
Company. Subject to the foregoing, this Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors,
transferees and assigns, and no other Person shall have any right, benefit or
obligation hereunder.
Governing
Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of State of Nevada, without regard to the
conflict of law provisions thereof.
Entire
Agreement. This Agreement constitutes the entire agreement
between the Parties pertaining to the subject matter hereof and supersedes all
prior agreements, understandings, negotiations and discussions, whether oral or
written, of the Parties with respect to the subject matter hereof.
Severability. In
the event that any one or more of the provisions contained in this Agreement or
in any other instrument referred to herein, shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, then to the maximum extent
permitted by law, such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement or any other such
instrument.
Construction and
Titles. The titles, captions or headings of the Articles and
Sections herein are for convenience of reference only and are not intended to be
a part of or to affect the meaning or interpretation of this Agreement. This
Agreement has been negotiated between the parties hereto, and the language
hereof shall not be construed for or against any party. A reference
herein to any section shall be deemed to include a reference to every subsection
thereof. All pronouns contained herein, and any variations thereof,
shall be deemed to refer to the masculine, feminine or neuter, singular or
plural, as to the identity of the parties hereto may require.
Arbitration. Any
dispute arising out of this Agreement, or its performance or breach, shall be
resolved by binding arbitration in Las Vegas, Nevada under the Commercial
Arbitration Rules (the "AAA Rules") of the American Arbitration Association (the
"AAA"). This arbitration provision is expressly made pursuant to and
shall be governed by the Federal Arbitration Act, 9 U. S. C. Sections 1-14 as
well as the AAA Rules. The Parties agree that pursuant to Section 9
of the Federal Arbitration Act, a judgment of a United States District Court of
competent jurisdiction shall be entered upon the award made pursuant to the
arbitration. A single arbitrator, who shall have the authority to
allocate the costs of any arbitration initiated under this paragraph, shall be
selected according to the AAA Rules within ten (10) days of the submission to
the AAA of the response to the statement of claim or the date on which any such
response is due, whichever is earlier. The arbitrator shall be
required to furnish to the parties to the arbitration a preliminary statement of
the arbitrator's decision that includes the legal rationale for the arbitrator's
conclusion and the calculations pertinent to any damage award being made by the
arbitrator. The arbitrator shall then furnish each of the parties to
the arbitration the opportunity to comment upon and/or contest the arbitrator's
preliminary statement of decision either, in the discretion of the arbitrator,
through briefs or at a hearing. The arbitrator shall render a final
decision following any such briefing or hearing. The arbitrator shall
conduct the arbitration in accordance with the Federal Rules of Evidence and the
AAA Rules. The arbitrator shall decide the amount and extent of the
pre-hearing discovery which is appropriate. The arbitrator shall have
the power to enter any award of monetary and/or injunctive relief (including the
power to issue permanent injunctive relief and also the power to reconsider any
prior request for immediate injunctive relief by any Party and any order as to
immediate injunctive relief previously granted or denied by a court in response
to a request therefor by any Party), including the power to render an award as
provided in Rule 43 of the AAA Rules. The arbitrator shall have the
power to award the prevailing party its costs and reasonable attorney's fees;
provided, however, that the arbitrator shall not award attorneys' fees to a
prevailing party if the prevailing party received a settlement offer unless the
arbitrator's award to the prevailing party is greater than such settlement offer
without taking into account attorneys' fees in the case of the settlement offer
or the arbitrator's award. In addition to the above courts, the
arbitration award may be enforced in any court having jurisdiction over the
Parties and the subject matter of the arbitration.
Attorneys'
Fees. Should any Party institute any action or proceeding to
enforce any provision of this Agreement, including, without limitation, an
action or proceeding for declaratory relief, damages by reason of an alleged
breach of any provision of this Agreement, equitable relief or otherwise in
connection with this Agreement, or any provision hereof, the prevailing Party
shall be entitled to recover from the losing Party or Parties reasonable
attorneys' fees and costs for services rendered to the prevailing Party in such
action or proceeding.
Multiple
Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
Notices. Unless
applicable law requires a different method of giving notice, any and all
notices, demands or other communications required or desired to be given
hereunder by any Party shall be in writing. Assuming that the
contents of a notice meet the requirements of the specific Section of this
Agreement which mandates the giving of that notice, a notice shall be validly
given or made to another Party if served either personally or if deposited in
the United States mail, certified or registered, postage prepaid, or if
transmitted by telegraph, telecopy or other electronic written transmission
device or if sent by overnight courier service, and if addressed to the
applicable Party as set forth below. If such notice, demand or other
communication is served personally, service shall be conclusively deemed given
at the time of such personal service. If such notice, demand or other
communication is given by mail, service shall be conclusively deemed given
seventy-two (72) hours after the deposit thereof in the United States
mail. If such notice, demand or other communication is given by
overnight courier, or electronic transmission, service shall be conclusively
deemed given at the time of confirmation of delivery. The addresses
for the Parties are as follows:
If
to Company:
|
0000
Xxxx Xxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx,
XX 00000
|
If
to Liberty:
|
Liberty
Asset Management
Attn:
Xxxxxxx X. Xxxxxx
0000
Xxxxx Xxxx Xxxxxxx Xxx. 000
Xxxxxxxxx,
XX 00000
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Any Party may change such Party's
address for the purpose of receiving notices, demands and other communications
as herein provided, by a written notice given in the aforesaid manner to the
other Parties.
Incorporation by
Reference. All Exhibits and Schedules attached hereto or to be
delivered in connection herewith are incorporated herein by this
reference.
[SIGNATURES
CONTINUED ON NEXT PAGE]
IN
WITNESS WHEREOF, this Agreement has been duly executed by the parties as of the
date first written above.
Liberty
Capital Asset Management
By:/s/ Xxxxxxx X.
Xxxxxx
Chief
Executive Officer
|
By:/s/ Xxxxx
Krunkel
Secretary
|