STOCK PURCHASE AGREEMENT
(MPI of Colorado, Inc.)
This STOCK PURCHASE AGREEMENT is made as of February 1, 2000, by VENTURI
TECHNOLOGIES, INC., a Nevada corporation ("Buyer"), and XXXXXXXX X. XXXXXX
("Xxxxxx") and XXXXX X. XXXXXXXX ("Xxxxxxxx") (Xxxxxx and Xxxxxxxx are
collectively referred to as "Sellers").
RECITALS
A. Sellers equally own all of the issued and outstanding capital stock (the
"Corporate Shares" or "Shares") of MPI of Colorado, Inc., a Colorado
corporation, formerly known as Xxxxxx & Xxxxxxxx, Inc. (hereinafter referred to
as either "MPI/Colorado" or the "Company").
X. Xxxxxxx desire to sell, and Buyer desires to purchase, all of the
Corporate Shares (hereinafter "Shares") for the consideration and on the terms
set forth in this Agreement.
X. Xxxxxxx also desire to sell, and Buyer desires to purchase, the sales
and installation operation as a part of the Company, subject to the right of
Sellers to repurchase 49% of such sales and installation portion of the
business.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. SALE AND TRANSFER OF SHARES; CLOSING
1.1 PURCHASE AND SALE OF SHARES. Subject to the terms and conditions
of this Agreement, at the Closing, Sellers will sell and transfer the Shares to
Buyer, and Buyer will purchase the Shares from Sellers.
1.2 SALES AND INSTALLATION BUSINESS. A portion of the business
conducted by the Company consists of the sale and installation of carpet.
Although the Buyer is acquiring all of the sales and installation portion of the
Company's business, the parties intend that the Sellers be allowed to repurchase
a total of 49% of the sale and installation portion of the Company's business if
that portion of the business achieves "gross revenues" of $2,500,00.00 in any
calendar year within four (4) years from the date of Closing. For the purposes
hereof, "gross revenues" shall refer to any receipt, income, revenues or cash
fees without deduction or offset.
To carry out this expressed interest, the parties have agreed that the
sales and installation portion of the Company's business shall be spun off or
otherwise transferred to a separate entity ("Newco"). Buyer shall own 100% of
the total outstanding ownership interest in Newco, subject
to the right of Seller to acquire for $10.00 an interest in Newco equal to a
total of 49% of the then outstanding ownership interest of Newco as heretofore
delineated. Upon creation of Newco, which Buyer agrees shall be accomplished
within ninety (90) days from the date of closing, Buyer shall deliver to Sellers
a warrant agreement containing the terms set forth above, and the Global Escrow
Instructions will be amended for the escrow of 49% of the Newco shares as herein
provided.
1.3 PURCHASE PRICE.
1.3.1 CASH AND PROMISSORY NOTE. At the Closing, Buyer will pay or
deliver to Sellers the following as partial consideration for the Shares of MPI
of Colorado, Inc.:
(a) One Hundred Fifty-Seven Thousand dollars ($157,000.00) cash at
closing;
(b) A promissory note duly executed by Buyer in the principal amount
of One Million Eight Hundred Eighty Thousand and no/100 Dollars
($1,880,000.00), in the form and pursuant to the terms of Exhibit
K, attached hereto ("Installment Promissory Note").
(c) A companion sixty (60) day promissory note of even date ("Balloon
Note") executed by Buyer in the principal amount of $1,348,836.63,
comprised of $386,933.34 allocated to reimburse Sellers for funds drawn
from the down payment and applied toward operating expenses and debt
service by Buyer. Of the balance $883,000.00 has been allocated toward the
cost of MPI Shares. The form of the Balloon Note is attached as Exhibit O.
1.3.2 VENTURI STOCK. As additional consideration for the Shares, Buyer
shall issue to Sellers Four Hundred Eighty-Two Thousand Five Hundred (482,500)
shares of Buyer's authorized but unissued $0.001 par value common stock. Said
shares shall be evidenced by two (2) separate certificates in an equal amount
issued to each of the Sellers individually.
1.3.3 ESCROW AND CERTIFICATES. The Venturi Shares shall be subject to
forfeiture if Sellers breach certain of the representations or warranties in
this Agreement, or if certain of the representations made by Sellers in this
Agreement turn out to be untrue, as shall be more fully set forth in the
Restated Global Escrow Agreement, as amended. The Venturi Shares shall be held
by Escrow Agent pursuant to the terms of the Restated Global Escrow Agreement,
as amended. The certificates representing the Venturi Shares shall contain, for
so long as the Venturi Shares are held in escrow, a legend in substantially the
following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
FORFEITURE AND ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER, INCLUDING
AN AGREEMENT BETWEEN THE COMPANY AND THE ORIGINAL HOLDER OF THE SHARES
REPRESENTED BY THIS CERTIFICATE THAT THE SHARES MAY NOT BE OFFERED OR SOLD
FOR A CERTAIN PERIOD OF TIME AFTER THE DATE OF ISSUANCE.
1.3.4 RESTRICTED STOCK. The Venturi Shares have not been registered
with the Securities and Exchange Commission, nor have the Venturi Shares been
qualified under the securities laws of any state. The Sellers acknowledge that
the Venturi Shares are subject to the following restriction which will be
printed in the following form on the certificates representing the Shares:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR QUALIFIED UNDER
THE SECURITIES LAWS OF ANY STATE (THE "LAW"). SUCH SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND NEITHER SAID SHARES NOR ANY INTEREST THEREIN
MAY BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SHARES UNDER THE ACT AND QUALIFICATION UNDER THE LAW OR
AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH
REGISTRATION AND QUALIFICATION ARE NOT REQUIRED AS TO SAID SALE OR OFFER.
Sellers represent the following to Purchaser in order to establish exemptions
from registration under Federal and state securities laws. Sellers are acquiring
the Shares for their own account, for investment, and not for resale in
connection with any distribution thereof. Sellers have such knowledge and
experience in business and financial matters that they are capable of evaluating
the risks of obtaining the Shares. Sellers understand the speculative nature of
the Shares. Sellers have adequate net worth and means to provide for their
current needs and to sustain a complete loss of their investment. Sellers have
no need of liquidity of their investment. Sellers understand that at present
only a limited public market exists, and that a more general public market may
never exist, for the Shares and that the Purchaser is under no obligation to
provide a market for the Shares.
1.4 CONSENT TO DILUTION. Sellers understand that Purchaser plans to acquire
other businesses and assets by issuing stock, and that Purchaser may issue
shares of its stock for other reasons in the future. Sellers understand and
consent that future issuance of stock will dilute Sellers' proportionate
ownership of Purchaser.
1.5 CLOSING. The purchase and sale (the "Closing") provided for in this
Agreement will take place at a time, place and date agreed to mutually by the
Parties.
1.6 CLOSING DELIVERIES.
1.6.1 SELLERS' DOCUMENTS. At the Closing, Sellers will deliver to
Escrow Agent:
(a) original certificates representing the Corporate Shares duly
endorsed (or accompanied by duly executed stock powers);
(b) Restated Global Escrow Agreement, as amended, executed by
Sellers, Buyer and the Escrow Agent;
(c) a certificate executed by Sellers representing and warranting
to Buyer that each of Sellers' representations and warranties in this
Agreement was accurate in all respects as of the date of this
Agreement and is accurate in all respects as of the Closing Date as if
made on the Closing Date.
1.6.2 BUYER'S DOCUMENTS. At the Closing, Buyer will deliver to Escrow
Agent:
(a) cash in the amount of $157,000.00;
(b) a promissory note payable to Sellers in the principal amount
of $1,880,000.00 (the "Installment Promissory Note");
(c) a promissory note payable to Sellers in the principal amount
of $1,348,836.63 (the "Balloon Note");
(d) two certificates representing 241,250 shares each of Buyer's
$0.001 par value common stock in the name of each respective
shareholder; and
(e) a certificate executed by Buyer to the effect that each of
Buyer's representations and warranties in this Agreement was accurate
in all respects as of the date of this Agreement and is accurate in
all respects as of the Closing Date as if made on the Closing Date.
2. REPRESENTATIONS AND WARRANTIES OF SELLERS
To the best of their individual and collective knowledge and belief,
Sellers represent and warrant to Buyer as follows:
2.1 ORGANIZATION AND GOOD STANDING. (a) the Company is a corporation
duly
organized, validly existing, and in good standing under the laws of the State of
Colorado, with full corporate power and authority to conduct its business as it
is now being conducted, to own or use the properties and assets that it purports
to own or use, and to perform all its obligations under applicable contracts.
the Company is duly qualified to do business as a foreign corporation and is in
good standing under the laws of each state or other jurisdiction in which either
the ownership or use of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification.
2.2 AUTHORITY. This Agreement constitutes the legal, valid, and
binding obligation of Sellers, enforceable against Sellers in accordance with
its terms. Sellers have the absolute and unrestricted right, power, authority,
and capacity to execute, deliver and perform their obligations under this
Agreement.
2.3 NO CONFLICT. Neither the execution and delivery of this Agreement
nor the consummation or performance of any of the contemplated transactions by
Sellers will violate or constitute a default under any mortgage, indenture, deed
of trust, lease, contract, agreement, license or other instrument or any order,
judgement or ruling of any governmental authority to which either Seller is
subject, or to the best knowledge of Sellers, any of the property of the Company
is bound, or result in the creation of any mortgage, pledge, lien, charge or
encumbrance upon any of the assets of the Company or the loss of any license or
other contractual right with respect thereto, except in each case for any of the
foregoing which is not, individually or in the aggregate, material to the
Company.
Except as may be set forth in Exhibit A, no Seller or the Company is or
will be required to give any notice to or obtain any consent from any person in
connection with the execution and delivery of this Agreement or the consummation
or performance of the transaction contemplated hereby.
Sellers are acquiring the Promissory Notes and the shares of Buyer's common
stock for their own account and not with a view to their distribution within the
meaning of Section 2(11) of the Securities Act. Each Seller is an "accredited
investor" as such term is defined in Rule 501(a) under the Securities Act of
1933, as amended, (the "Securities Act") and the rules and regulations
promulgated thereunder.
2.4 CAPITALIZATION. The authorized capital stock of the Company
consists of 50,000 authorized shares of common stock, par value $0.00 per share,
of which 2,000 shares are issued and outstanding and constitute the Shares.
Sellers are and will be on the Closing Date the record and beneficial owners and
holders of the Shares, free and clear of all Encumbrances. Xxxxxx owns 1,000 of
the Shares and Xxxxxxxx owns 1,000 of the Shares. No legend or other reference
to any purported Encumbrance appears upon any certificate representing equity
securities of the Company. All of the outstanding equity securities of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable. There are no Contracts relating to the issuance, sale, or
transfer of any equity securities or
other securities of the Company. None of the outstanding equity securities or
other securities of the Company was issued in violation of the Securities Act or
any state law regulating the sale and issuance of securities. the Company does
not own, nor does it have any Contract to acquire, any equity securities or
other securities of any other business or any direct or indirect equity or
ownership interest in any other business.
2.5 FINANCIAL STATEMENTS. Sellers have delivered to Buyer unaudited
balance sheet of MPI of Colorado, Inc. as of January 31, 2000 (the "Balance
Sheet"), and the related unaudited statements of income, changes in
stockholders' equity, and cash flow for each of the period then ended. Such
financial statements and notes were prepared in accordance with GAAP, subject,
in the case of interim financial statements, to normal recurring year-end
adjustments (the effect of which will not, individually or in the aggregate, be
materially adverse) and the absence of notes (that, if presented, would not
differ materially from those included in the balance sheet); the financial
statements referred to in this Section reflect the consistent application of
such accounting principles throughout the periods involved, except as disclosed
in the notes to such financial statements. No financial statements of any person
or entity other than the Company are required by GAAP to be included in the
consolidated financial statements of the Company. See Exhibit J.
2.6 BOOKS AND RECORDS. The books of account, minute books, stock
record books, and other records of the Company, all of which have been made
available to Buyer, are complete and correct and have been maintained in
accordance with sound business practices. The minute books of the Company
contain accurate and complete records of all meetings held of, and corporate
action taken by, the stockholders, the Boards of Directors, and committees of
the Boards of Directors of the Company. At the Closing, all of those books and
records will be in the possession of the Company.
2.7 TITLE TO PROPERTIES; ENCUMBRANCES. Sellers have delivered to Buyer
a complete and accurate list of all real and personal property interests owned
by the Company. the Company owns all the properties and assets that have been
disclosed to Buyer. All material properties disclosed as being owned by the
Company are owned free and clear of all liens and encumbrances except as
previously disclosed in writing to Buyer.
2.8 CONDITION AND SUFFICIENCY OF ASSETS. To the best of Sellers'
knowledge, except as set forth in Exhibit B, the Company' property and assets
are in good operating condition and repair, and are adequate for the uses to
which they are being put, and none of such property and assets are in need of
maintenance or repairs except for ordinary, routine maintenance and repairs that
are not material in nature or cost. The property and assets of the Company are
sufficient for the continued conduct of the Company' business after the Closing
in substantially the same manner as conducted prior to the Closing.
2.9 ACCOUNTS RECEIVABLE. All accounts receivable of the Company that
are reflected in the accounting records of the Company as of the Closing Date
(collectively, the "
Accounts Receivable") represent valid obligations arising from sales actually
made or services actually performed in the ordinary course of business. To the
best of Sellers' knowledge, unless paid prior to the Closing Date, the Accounts
Receivable are or will be as of the Closing Date current and collectible. Absent
any unforeseen events, each of the Accounts Receivable historically has been
collected in full within ninety days after the day on which it first becomes due
and payable. Except as may be set forth on Exhibit C referred to below, there is
not any pending, or to Sellers' knowledge threatened, contest or claim
challenging the validity of any of the Accounts Receivable.
2.10 NO UNDISCLOSED LIABILITIES. Except as may be set forth in Exhibit
D, the Company has no liabilities or obligations of any nature (whether known or
unknown and whether absolute, accrued, contingent, or otherwise) except for
liabilities or obligations reflected or reserved against in the Balance Sheet
and current liabilities incurred in the ordinary course of business.
2.11 TAXES. To the best of Sellers' knowledge the Company has filed
or caused to be filed within the past five (5) years all tax returns that are
or were required to be filed by or with respect to the Company, pursuant to
applicable laws and regulations (except use tax returns). Sellers have
delivered or made available to Buyer copies of all such tax returns filed
since 1997. To the best of Sellers' knowledge, all tax returns filed by the
Company are true, correct, and complete. The Parties agree to use the book
value of the inventory of the corporation per the financial information
provided under Section 2.5 as the fair market value of the inventory and to
use the amount determined by Seller as the fair market value of the fixed
assets of the Corporation on the effective date for all tax purposes.
Xxxxxxxx, Xxxxxx & Xxxxxxxx, P.C. will prepare said corporate return for the
fiscal year ending 1/31/00.
2.12 NO MATERIAL ADVERSE CHANGE. To the best of Sellers' knowledge,
since the date of the Balance Sheet, there has not been any material adverse
change in the business, operations, properties, prospects, assets, or condition
of the Company, and no event has occurred or circumstance exists that may result
in such a material adverse change.
2.13 CONTRACTS AND EMPLOYEE BENEFITS. Except as may be set forth in
Exhibit E, the Company is not a party to any contract or agreement that involves
annual payments by the Company in excess of $25,000, other than in the ordinary
course of business. The consummation of the transaction contemplated herein will
not result in the termination of any material agreement or contract to which the
Company is a party, nor give any party thereto the right to cancel or terminate
any such contract or agreement. A list of Employees and benefits are contained
in Exhibit N.
2.14 ERISA MATTERS. See Special Provisions, Exhibit F.
2.15 COMPLIANCE WITH LEGAL REQUIREMENTS. Except as may be set forth on
Exhibit G, the Company has not received any notice of any violation of any laws
or
regulations that are or were applicable to it or to the conduct or operation of
its business or the ownership or use of any of its assets, which violation has
not been cured as of the Closing Date, and to the best knowledge of Sellers, the
Company is in full compliance with all such laws or regulations.
2.16 GOVERNMENTAL AUTHORIZATIONS. The Company has obtained all
governmental authorizations and permits that are necessary to permit the Company
to lawfully conduct and operate its business in the manner currently conducted.
2.17 LEGAL PROCEEDINGS. Except as disclosed in Exhibit H, there is no
material lawsuit or legal or administrative or regulatory proceeding or
investigation pending against the Company, or, to the best knowledge of Sellers,
threatened against the Company.
2.18 ABSENCE OF CERTAIN CHANGES AND EVENTS. Except as may be set forth
in Exhibit I, since the date of the Balance Sheet, the Company has conducted its
business only in the ordinary course of business and there has not been any:
(a) change in the Company' authorized or issued capital stock; grant
of any stock option or right to purchase shares of capital stock of the
Company; issuance of any security convertible into such capital stock;
grant of any registration rights; purchase, redemption, retirement, or
other acquisition by the Company of any shares of any such capital stock;
or declaration or payment of any dividend or other distribution or payment
in respect of shares of capital stock;
(b) amendment to the organizational documents of the Company;
(c) payment or increase by the Company of any extraordinary bonuses,
salaries, or other compensation to any stockholder, director, officer, or
(except in the ordinary course of business) employee or entry into any
employment, severance, or similar contract with any director, officer, or
employee;
(d) adoption of, or increase in the payments to or benefits under, any
profit sharing, bonus, deferred compensation, savings, insurance, pension,
retirement, or other employee benefit plan for or with any employees of the
Company;
(e) material damage to or destruction or loss of any asset or property
of the Company, whether or not covered by insurance, materially and
adversely affecting the properties, assets, business, financial condition,
or prospects of the Company, taken as a whole;
(f) entry into, termination of, or receipt of notice of termination of
(i) any license, distributorship, dealer, sales representative, joint
venture, credit, or similar agreement, or (ii) any contract or transaction
involving a total remaining commitment by or to the Company of at least
$25,000;
(g) sale (other than sales of inventory in the ordinary course of
business), lease, or other disposition of any asset or property of the
Company or mortgage, pledge, or imposition of any lien or other encumbrance
on any material asset or property of the Company;
(h) cancellation or waiver of any claims or rights with a value to the
Company in excess of $25,000; or
(i) material change in the accounting methods used by the Company.
2.19 INSURANCE. the Company maintains policies of insurance in such
amounts, with such deductibles and against such risks and losses as are, in its
judgment, reasonable for the business and assets of the Company, and Sellers
will deliver to Buyer on the Closing Date certificates of insurance setting
forth the name of the insurance company, policy number and type of coverage of
all insurance policies maintained as of the date hereof with respect to the
Company' business operations, property, plant and equipment. See Exhibit M.
2.20 ENVIRONMENTAL MATTERS. There are no pending or, to the knowledge
of Sellers and the Company, threatened claims, encumbrances, or other
restrictions of any nature, resulting from any environmental, health, and safety
liabilities or arising under or pursuant to any environmental law, with respect
to or affecting any of the operations, properties and assets (whether real,
personal, or mixed) in which Sellers or the Company has or had an interest.
2.21 DISCLOSURE. No representation or warranty of Sellers in this
Agreement and no statement in the Exhibits attached to this Agreement omits to
state a material fact necessary to make the statements herein or therein, in
light of the circumstances in which they were made, not misleading. There is no
fact known to either Seller that has specific application to either Seller or
the Company (other than general economic or industry conditions) and that
materially adversely affects or, as far as either Seller can reasonably foresee,
materially threatens, the assets, business, prospects, financial condition, or
results of operations of the Company (on a consolidated basis) that has not been
set forth in this Agreement or the Exhibits attached hereto.
2.22 BROKERS OR FINDERS. Sellers and their agents have incurred no
obligation or liability, contingent or otherwise, for brokerage or finders' fees
or agents' commissions or other similar payment in connection with this
Agreement.
3. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows:
3.1 ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Nevada.
3.2 AUTHORITY; NO CONFLICT. This Agreement constitutes the legal,
valid, and binding obligation of Buyer, enforceable against Buyer in accordance
with its terms. Upon the execution and delivery by Buyer of the Employment
Agreements, and the Promissory Notes (collectively, the "Buyer's Closing
Documents"), the Buyer's Closing Documents will constitute the legal, valid, and
binding obligations of Buyer, enforceable against Buyer in accordance with their
respective terms. Buyer has the absolute and unrestricted right, power, and
authority to execute and deliver this Agreement and the Buyer's Closing
Documents and to perform its obligations under this Agreement and the Buyer's
Closing Documents. Except as set forth in Exhibit G, neither the execution and
delivery of this Agreement nor the consummation or performance of any of the
transactions contemplated hereby will give any person the right to prevent,
delay, or otherwise interfere with any of the transactions contemplated hereby
pursuant to:
(i) any provision of Buyer's Organizational Documents;
(ii) any resolution adopted by the board of directors or the
stockholders of Buyer;
(iii) any legal requirement or order to which Buyer may be
subject; or
(iv) any contract to which Buyer is a party or by which Buyer may
be bound.
Except as set forth in Exhibit G, Buyer is not and will not be required to
obtain any Consent from any person in connection with the execution and delivery
of this Agreement or the consummation or performance of any of the transactions
contemplated hereby.
3.3 INVESTMENT INTENT. Buyer is acquiring the Shares for its own
account and not with a view to their distribution within the meaning of Section
2(11) of the Securities Act.
3.4 CERTAIN PROCEEDINGS. There is no pending legal proceeding that has
been commenced against Buyer and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions. To Buyer's knowledge, there exist no grounds for such
proceeding, nor has any such proceeding been threatened.
3.5 BROKERS OR FINDERS. Buyer and its officers and agents have
incurred no obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other similar payment in connection with
this Agreement and will indemnify and hold Sellers harmless from any such
payment alleged to be due by or through Buyer as a
result of the action of Buyer or its officers or agents.
4. COVENANTS OF SELLERS PRIOR TO CLOSING DATE
4.1 ACCESS AND INVESTIGATION. Between the date of this Agreement and
the Closing Date, Sellers will, and will cause the Company and its
representatives to, (a) afford Buyer and its representatives and prospective
lenders and their representatives (collectively, "Buyer's Advisors") full and
free access to the Company' personnel, properties, contracts, books and records,
and other documents and data, (b) furnish Buyer and Buyer's Advisors with copies
of all such contracts, books and records, and other existing documents and data
as Buyer may reasonably request, and (c) furnish Buyer and Buyer's Advisors with
such additional financial, operating, and other data and information as Buyer
may reasonably request.
4.2 OPERATION OF THE BUSINESSES OF THE ACQUIRED COMPANIES. Between the
date of this Agreement and the Closing Date, Sellers will, and will cause the
Company to:
(a) conduct the business of the Company only in the ordinary
course of business;
(b) use their best efforts to preserve intact the current
business organization of the Company, keep available the services of
the current officers, employees, and agents of such the Company, and
maintain the relations and good will with suppliers, customers,
landlords, creditors, employees, agents, and others having business
relationships with such the Company;
(c) confer with Buyer concerning operational matters of a
material nature; and
(d) otherwise report periodically to Buyer concerning the status
of the business, operations, and finances of the Company.
4.3 NEGATIVE COVENANT. Except as otherwise expressly permitted by this
Agreement, between the date of this Agreement and the Closing Date, Sellers will
not, and will cause the Company not to, without the prior consent of Buyer, take
any affirmative action, or fail to take any reasonable action within their or
its control, as a result of which any material change in the business of the
Company is likely to occur.
4.4 REQUIRED APPROVALS. As promptly as practicable after the date of
this Agreement, Sellers will, and will cause the Company to, make all reports
and filings required by applicable laws and regulations to be made by them in
order to consummate the transactions contemplated hereby. Between the date of
this Agreement and the Closing Date, Sellers will, and will cause the Company
to, (a) cooperate with Buyer with respect to all
filings that Buyer elects to make or is required by applicable laws and
regulations to make in connection with the transactions contemplated hereby, and
(b) cooperate with Buyer in obtaining all consents necessary or appropriate to
consummate the transactions contemplated hereby.
4.5 NOTIFICATION. Between the date of this Agreement and the Closing
Date, each Seller will promptly notify Buyer in writing if such Seller or the
Company becomes aware of any fact or condition that causes or constitutes a
Breach of any of Sellers' representations and warranties as of the date of this
Agreement, or if such Seller or the Company becomes aware of the occurrence
after the date of this Agreement of any fact or condition that would (except as
expressly contemplated by this Agreement) cause or constitute a Breach of any
such representation or warranty had such representation or warranty been made as
of the time of occurrence or discovery of such fact or condition. Should any
such fact or condition require any change in this Agreement or the Exhibits
attached to this Agreement, Sellers will promptly deliver to Buyer a supplement
to this Agreement or the Exhibits attached hereto specifying such change. During
the same period, each Seller will promptly notify Buyer of the occurrence of any
Breach of any covenant of Sellers in this Section or of the occurrence of any
event that may make the satisfaction of the conditions to closing set forth in
this Agreement impossible or unlikely.
4.6 PAYMENT OF INDEBTEDNESS BY RELATED PERSONS. Except as expressly
provided in this Agreement, Sellers will cause all indebtedness owed to the
Company by either Seller or any related person of either Seller to be paid in
full prior to Closing.
4.7 NO NEGOTIATION. Until such time, if any, as this Agreement is
terminated, Sellers will not, and will cause the Company and each of their
representatives not to, directly or indirectly solicit, initiate, or encourage
any inquiries or proposals from, discuss or negotiate with, provide any
non-public information to, or consider the merits of any unsolicited inquiries
or proposals from, any person (other than Buyer) relating to any transaction
involving the sale of the business or assets (other than in the ordinary course
of business) of the Company, or any of the capital stock of the Company, or any
merger, consolidation, business combination, or similar transaction involving
the Company.
4.8 BEST EFFORTS. Between the date of this Agreement and the Closing
Date, Sellers will use their best efforts to cause the conditions to closing set
forth in this Agreement to be satisfied.
5. COVENANTS OF BUYER PRIOR TO CLOSING DATE
5.1 APPROVALS OF GOVERNMENTAL AUTHORITIES. As promptly as practicable
after the date of this Agreement, Buyer will make all filings and obtain all
consents required by applicable laws and regulations in order to consummate the
transactions contemplated hereby.
5.2 BEST EFFORTS. Between the date of this Agreement and the Closing
Date, Buyer will use its best efforts to cause the conditions in Sections 6 and
7 to be satisfied.
6. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Shares and to take the other actions
required to be taken by Buyer at the Closing is subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (any of which may
be waived by Buyer, in whole or in part):
6.1 ACCURACY OF REPRESENTATIONS. All of Sellers' representations and
warranties in this Agreement (considered collectively), and each of these
representations and warranties (considered individually), must have been
accurate in all material respects as of the date of this Agreement, and must be
accurate in all material respects as of the Closing Date as if made on the
Closing Date.
6.2 SELLERS' PERFORMANCE. All of the covenants and obligations that
Sellers are required to perform or to comply with pursuant to this Agreement at
or prior to the Closing (considered collectively), and each of these covenants
and obligations (considered individually), must have been duly performed and
complied with in all material respects. Seller must have delivered each of the
documents required to be delivered by Seller pursuant to Section 1.5.1.
6.3 CONSENTS. Each of the consents required to consummate the
transactions contemplated hereby must have been obtained and must be in full
force and effect.
6.4 NO PROCEEDINGS. Since the date of this Agreement, there must not
have been commenced or threatened against Buyer, or against any person
affiliated with Buyer, any proceeding (a) involving any challenge to, or seeking
damages or other relief in connection with, any of the transactions contemplated
hereby, or (b) that may have the effect of preventing, delaying, making illegal,
or otherwise interfering with any of the transactions contemplated hereby.
6.5 NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS. There must
not have been made or threatened by any person any claim asserting that such
person (a) is the holder or the beneficial owner of, or has the right to acquire
or to obtain beneficial ownership of, any stock of, or any other voting, equity,
or ownership interest in the Company, or (b) is entitled to all or any portion
of the purchase price payable for the Shares.
6.6 NO PROHIBITION. Neither the consummation nor the performance of
any of the transactions contemplated hereby will, directly or indirectly (with
or without notice or lapse of time), materially contravene, or conflict with, or
result in a material violation of, or cause Buyer or any person affiliated with
Buyer to suffer any material adverse consequence
under, any applicable laws or regulations.
7. CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE
Sellers' obligation to sell the Shares and to take the other actions
required to be taken by Sellers at the Closing is subject to the satisfaction,
at or prior to the Closing, of each of the following conditions (any of which
may be waived by Sellers, in whole or in part):
7.1 ACCURACY OF REPRESENTATIONS. All of Buyer's representations and
warranties in this Agreement (considered collectively), and each of these
representations and warranties (considered individually), must have been
accurate in all material respects as of the date of this Agreement and must be
accurate in all material respects as of the Closing Date as if made on the
Closing Date.
7.2 BUYER'S PERFORMANCE. All of the covenants and obligations that
Buyer is required to perform or to comply with pursuant to this Agreement at or
prior to the Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been performed and complied
with in all material respects. Buyer must have delivered each of the documents
required to be delivered by Buyer pursuant to Section 1.5.2 and must have made
the cash payments required to be made by Buyer pursuant to Section 1.5.2.
7.3 CONSENTS. All of the consents required to be obtained from Buyer
must have been obtained and must be in full force and effect.
7.4 NO PROHIBITION. Neither the consummation nor the performance of
any of the transactions contemplated hereby will, directly or indirectly (with
or without notice or lapse of time), materially contravene, or conflict with, or
result in a material violation of, or cause Seller or any person affiliated with
Seller to suffer any material adverse consequence under, any applicable laws or
regulations.
8. TERMINATION
8.1 TERMINATION EVENTS. This Agreement may, by notice given prior to
or at the Closing, be terminated:
(a) by either Buyer or Sellers if a material breach of any
provision of this Agreement has been committed by the other party and
such breach has not been waived;
(b) (i) by Buyer if any of the conditions in Section 6 has not
been satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure of
Buyer to comply with its obligations under
this Agreement) and Buyer has not waived such condition on or before
the Closing Date; or (ii) by Sellers, if any of the conditions in
Section 7 has not been satisfied as of the Closing Date or if
satisfaction of such a condition is or becomes impossible (other than
through the failure of Sellers to comply with their obligations under
this Agreement) and Sellers have not waived such condition on or
before the Closing Date; or
(c) by mutual consent of Buyer and Sellers.
8.2 EFFECT OF TERMINATION. Each party's right of termination under
Section 8.1 is in addition to any other rights it may have under this Agreement
or otherwise, and the exercise of a right of termination will not be an election
of remedies. If this Agreement is terminated pursuant to Section 8.1, all
further obligations of the parties under this Agreement will terminate, except
that the obligations in Sections 10.1 and 10.3 will survive; provided, however,
that if this Agreement is terminated by a party because of the breach of the
Agreement by the other party or because one or more of the conditions to the
terminating party's obligations under this Agreement is not satisfied as a
result of the other party's failure to comply with its obligations under this
Agreement, the terminating party's right to pursue all legal remedies will
survive such termination unimpaired.
9. INDEMNIFICATION; REMEDIES
9.1 SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY Knowledge. All
representations, warranties, covenants, and obligations in this Agreement and
the Exhibits attached hereto, will survive the Closing. The right to
indemnification, payment of damages or other remedy based on such
representations, warranties, covenants, and obligations will not be affected by
any investigation conducted with respect to, or any knowledge acquired (or
capable of being acquired) at any time, whether before or after the execution
and delivery of this Agreement or the Closing Date, with respect to the accuracy
or inaccuracy of or compliance with, any such representation, warranty,
covenant, or obligation. The waiver of any condition based on the accuracy of
any representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification, payment of
damages, or other remedy based on such representations, warranties, covenants,
and obligations.
9.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS. Sellers,
jointly and severally, will indemnify and hold harmless Buyer, the Company, and
their respective representatives, stockholders, controlling persons, and
affiliates (collectively, the "Indemnified Persons") for, and will pay to the
Indemnified Persons the amount of, any loss, liability, claim, damage (including
incidental and consequential damages), expense (including costs of investigation
and defense and reasonable attorneys' fees) or diminution of value, whether or
not involving a third-party claim (collectively, "Damages"), arising, directly
or indirectly, from or in connection with:
(a) any and all loss, liability or damage suffered or incurred by
Buyer in respect of any debt, obligation or liability of the Company or of
Seller not disclosed in this Agreement, any of the Exhibits attached
hereto, or in writing to Buyer prior to the Closing Date;
(b) any breach of any representation or warranty made by Sellers in
this Agreement, the Exhibits attached hereto, or any other certificate or
document delivered by Sellers pursuant to this Agreement;
(c) any breach of any representation or warranty made by Sellers in
this Agreement as if such representation or warranty were made on and as of
the Closing Date;
(d) any Breach by either Seller of any covenant or obligation of such
Seller in this Agreement;
(e) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by any such Person with either Seller or the
Company (or any person acting on their behalf) in connection with any of
the transactions contemplated hereby.
The remedies provided in this Section 9.2 will not be exclusive of or limit
any other remedies that may be available to Buyer or the other Indemnified
Persons.
9.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER. Buyer will
indemnify and hold harmless Sellers, and will pay to Sellers the amount of any
damages arising, directly or indirectly, from or in connection with (a) any
breach of any representation or warranty made by Buyer in this Agreement or in
any certificate delivered by Buyer pursuant to this Agreement, (b) any breach by
Buyer of any covenant or obligation of Buyer in this Agreement, or (c) any claim
by any person for brokerage or finder's fees or commissions or similar payments
based upon any agreement or understanding alleged to have been made by such
person with Buyer (or any person acting on its behalf) in connection with any of
the transactions contemplated hereby.
10. GENERAL PROVISIONS
10.1 EXPENSES. Except as otherwise expressly provided in this
Agreement, each party to this Agreement will bear its respective expenses
incurred in connection with the preparation, execution, and performance of this
Agreement and the transactions contemplated hereby, including all fees and
expenses of agents, representatives, counsel, and accountants. In the event of
termination of this Agreement, the obligation of each party to pay its own
expenses will be subject to any rights of such party arising from a breach of
this Agreement by
another party.
10.2 PUBLIC ANNOUNCEMENTS. Any public announcement or similar
publicity with respect to this Agreement or the Contemplated Transactions will
be issued, if at all, at such time and in such manner as the parties mutually
agree. Sellers and Buyer will consult with each other concerning the means by
which the Company' employees, customers, and suppliers and others having
dealings with the Company will be informed of the transactions contemplated
hereby.
10.3 CONFIDENTIALITY. Between the date of this Agreement and the
Closing Date, Buyer and Sellers will maintain in confidence, and will cause the
directors, officers, employees, agents, and advisors of Buyer and the Company to
maintain in confidence, any written, oral, or other information obtained in
confidence from another party or the Company in connection with this Agreement
or the transactions contemplated hereby, unless (a) such information is already
known to such party or to others not bound by a duty of confidentiality or such
information becomes publicly available through no fault of such party, (b) the
use of such information is necessary or appropriate in making any filing or
obtaining any consent or approval required for the consummation of the
transactions contemplated hereby, or (c) the furnishing or use of such
information is required by or necessary or appropriate in connection with legal
proceedings. If the transactions contemplated hereby are not consummated, each
party will return or destroy as much of such written information as the other
party may reasonably request.
10.4 NOTICES. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by telecopier (with written confirmation of receipt), provided that a copy
is mailed by registered mail, return receipt requested, or (c) when received by
the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
Sellers:
Xxxxxxxx X. Xxxxxx
X.X. Xxx 00000
Xxxxxx, Xxxxxxxx 00000-0000
Phone: (303)
Fax: (303)
Xxxxx X. Xxxxxxxx
X.X. Xxx 00000
Xxxxxx, Xxxxxxxx 00000-0000
Phone: (303)
Fax: (303)
with a copy to:
Xxxxxx X. Xxxx, P.C.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Buyer:
Venturi Technologies, Inc.
000 Xxxxx 000 Xxxx
Xxxx, Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Chairman and CEO
Phone: (000) 000-0000
Fax: (000) 000-0000
(With a copy to Xxxxx X. Xxxxxxx, Esq., Chief Counsel)
10.5 JURISDICTION; SERVICE OF PROCESS. Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of, this
Agreement may be brought against any of the parties in the courts of the State
of Utah, County of Salt Lake, or, if it has or can acquire jurisdiction, in the
United States District Court for the Central District of Utah, and each of the
parties consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world.
10.6 FURTHER ASSURANCES. The parties agree (a) to furnish upon request
to each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
10.7 WAIVER. The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor any delay by any
party in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the
specific instance for which it is given; and (c) no notice to or demand on one
party will be deemed to be a waiver of any obligation of such party or of the
right of the party giving such notice or demand to take further action without
notice or demand as provided in this Agreement or the documents referred to in
this Agreement.
10.8 ENTIRE AGREEMENT AND MODIFICATION. This Agreement supersedes all
prior agreements between the parties with respect to its subject matter
(including the Letter of Intent between Buyer and Sellers dated August 4, 1999)
and constitutes (along with the documents referred to in this Agreement) a
complete and exclusive statement of the terms of the agreement between the
parties with respect to its subject matter. This Agreement may not be amended
except by a written agreement executed by the party to be charged with the
amendment.
10.9 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS. Neither party
may assign any of its rights under this Agreement without the prior consent of
the other parties, except that Buyer may assign any of its rights under this
Agreement to any Subsidiary of Buyer. Subject to the preceding sentence, this
Agreement will apply to, be binding in all respects upon, and inure to the
benefit of the successors and permitted assigns of the parties. Nothing
expressed or referred to in this Agreement will be construed to give any person
other than the parties to this Agreement any legal or equitable right, remedy,
or claim under or with respect to this Agreement or any provision of this
Agreement. This Agreement and all of its provisions and conditions are for the
sole and exclusive benefit of the parties to this Agreement and their successors
and assigns.
10.10 SEVERABILITY. If any provision of this Agreement is held invalid
or unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
10.11 SECTION HEADINGS, CONSTRUCTION. The headings of Sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation. All references to "Section" or "Sections" refer to the
corresponding Section or Sections of this Agreement. All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word "including" does not
limit the preceding words or terms.
10.12 TIME OF ESSENCE. With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.
10.13 GOVERNING LAW. This Agreement will be governed by the laws of
the State of Utah without regard to conflicts of laws principles.
10.14 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
10.15 ESCROW DISBURSEMENTS AND REPORTS The Parties agree that with
each disbursement or release from Escrow that upon instructions all payments on
the Note may be made directly to the constituent parties comprising the Seller
Entities. VTI further agrees to forward a photocopy of all checks or wire
transfer debits made to the Escrow Agent.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first written above.
BUYER:
VENTURI TECHNOLOGIES, INC.
By:
----------------------------------------
Its:
-----------------------------------
SELLERS:
--------------------------------------------
Xxxxxxxx X. Xxxxxx
--------------------------------------------
Xxxxx X. Xxxxxxxx
EXHIBIT A
(Notice)
EXHIBIT B
(Property and assets in need of maintenance or repairs)
All Assets show normal usage and wear.
EXHIBIT C
(Pending or threatened, contest or claim challenging the validity of any of the
Accounts Receivable)
All uncollectable receivables were written off as bad debts at year-end. If
received, will be considered income.
EXHIBIT D
(Liabilities and Obligations)
EXHIBIT E
(Contracts or Agreement that involve annual payments by the Company in excess of
$25,000)
EXHIBIT F
EXHIBIT F
(ERISA matters)
NONE
EXHIBIT G
(Violation of any laws or regulations)
EXHIBIT H
(Pending lawsuits or proceedings)
EXHIBIT I
(Changes in stock, amendments to organizational documents, changes in financial
condition of the Company)
