AMENDMENT NO. 1 TO AMENDED AND RESTATED SALES/PURCHASE AGREEMENT
EXHIBIT
10.18
AMENDMENT
NO. 1
TO
AMENDED
AND RESTATED SALES/PURCHASE AGREEMENT
AMENDMENT
No. 1 dated June 26, 2007, to the Amended and Restated Sales/Purchase Agreement,
dated March 26, 2007 (the “Agreement”), among Xxxxxx Xxxxx (“Seller”), EMTA
Production Holdings , Inc. (“Purchaser”), a Nevada corporation and a wholly
owned subsidiary of EMTA Holdings, Inc., a Nevada corporation
(“EMTA”).
WHEREAS,
Seller and ATME Acquisitions, Inc, (“ATME”) a Nevada Corporation and a wholly
owned subsidiary of EMTA Holdings, Inc. entered into the Agreement referred to
above and ATME has assigned all of its rights and interest in that Agreement by
execution of this Amendment below;
WHEREAS,
Seller and Purchaser entered into the Agreement providing for the sale by Seller
to Purchaser of all issued and outstanding shares of common stock of Dyson
Properties, Inc., an Arkansas corporation, d/b/a Synergyn (the “Company”) and
authorized to do business in the state of Oklahoma; and
WHEREAS,
the parties wish to amend the Agreement as herein set forth.
NOW
THEREFORE, for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties to the Agreement agree to amend the Agreement as
follows:
|
I.
|
The
section named “Reps and Warranties of the Seller” is hereby amended in its
entirety to read as follows:
|
“Seller
hereby represents and warrants as follows:
|
1.
|
The
Company is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation as set
forth above and has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as now
conducted. The Seller is duly qualified or authorized to do
business as a foreign corporation and is in good standing under the laws
of each jurisdiction in which it owns or leases real property and each
other jurisdiction in which the conduct of its business or the ownership
of its properties requires such qualification or authorization, except
where failure to be so qualified would not have a material adverse effect
on the business, assets or financial condition of the Company taken as a
whole (“Material Adverse Effect”).
|
|
2.
|
Seller
has all requisite power, authority and legal capacity to execute and
deliver the Agreement, and each other agreement, document, or instrument
or certificate contemplated by the Agreement or to be executed by the
Seller in connection with the consummation of the transactions
contemplated by the Agreement (together with this Agreement, the “Seller
Documents”), and to consummate the transactions contemplated hereby and
thereby. This Agreement has been, and each of the Seller
Documents will be at or prior to the closing of the transactions
contemplated by this agreement (the “Closing”), duly and validly executed
and delivered by the Seller and (assuming the due authorization, execution
and delivery by the other parties hereto and thereto) this Agreement
constitutes, and each of the Seller Documents when so executed and
delivered will constitute, legal, valid and binding obligations of the
Seller, enforceable against the Seller in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors’ rights and remedies
generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and
fair dealing (regardless of whether enforcement is sought in a proceeding
at law or in equity).
|
|
3.
|
Seller
owns the shares to be sold to Purchaser hereunder, free and clear of any
and all liens, charges or encumbrances or any kind or
nature.
|
|
4.
|
The
authorized capital stock of the Company consists of 1,000 shares of common
stock, 1,000 shares of which are issued and outstanding all of which are
owned by Seller. All of the shares to be sold to the Purchaser
are duly authorized, validly issued, fully paid and
nonassessable. There are no options, warrants or other rights,
agreements, arrangements or commitments of any character relating to the
issued or unissued capital stock of the Company or obligating the Company
to issue or sell any shares of capital stock of or other equity interests
in the Company. There is no personal liability, and there are
no preemptive rights with regard to the capital stock of the Company, and
no right-of-first refusal or similar catch-up rights with regard to such
capital stock. Except for the transactions contemplated by this Agreement,
there are no outstanding contractual obligations or other commitments or
arrangements of the Company to (A) repurchase, redeem or otherwise acquire
any shares (or any interest therein) or (B) to provide funds to or make
any investment (in the form of a loan, capital contribution or otherwise)
in any other entity, or (C) issue or distribute to any person any capital
stock of the Company, or (D) issue or distribute to holders of any of the
capital stock of the Company any evidences of indebtedness or assets of
the Company. All of the outstanding securities of the Company
have been issued and sold by the Company in full compliance with
applicable federal and state securities laws or an exemption available
thereunder.
|
2
|
5.
|
None
of the execution and delivery by the Seller of this Agreement and the
Seller Documents, the consummation of the transactions contemplated hereby
or thereby, or compliance by the Seller with any of the provisions hereof
or thereof will (i) conflict with, violate, result in the breach or
termination of, or constitute a default under any note, bond, mortgage,
indenture, license, agreement or other instrument or obligation to which
Seller is a party or by which Seller or any of Seller’s properties or
assets is bound; (ii) violate any statute, rule, regulation, order or
decree of any governmental body or authority by which the Seller is bound;
or (iii) result in the creation of any Lien upon the properties or assets
of the Company except, in case of clauses (ii) and (iii) for such
violations, breaches or defaults as would not, individually or in the
aggregate, have a Material Adverse Effect. No consent, waiver,
approval, order, permit or authorization of, or declaration or filing
with, or notification to, any person or governmental body is required on
the part of the Seller in connection with the execution and delivery of
this Agreement or the Seller Documents, or the compliance by the Seller as
the case may be, with any of the provisions hereof or
thereof.
|
|
6.
|
The
Company has good and marketable title to all of its assets free and clear
of all mortgages, pledges, security interests, charges, liens,
restrictions and encumbrances of any kind whatsoever, except for the
Xxxxxx Brothers mortgage on the real property of the Company
and the two Landmark Bank loans as detailed in Item 10
below. Such assets include all of the assets and properties
held for use by the Company to conduct its business as presently
conducted. All of the Company’s tangible assets are in good
repair, have been well maintained and are in good operating condition, do
not require any material modifications or repairs, and comply in all
material respects with applicable laws, ordinances and regulations,
ordinary wear and tear excepted.
|
|
7.
|
Unaudited
financial statements of the Company for the nine months ended December 31,
2006, are attached hereto as Annex A (collectively, the “Company Financial
Statements”). The Company Financial Statements were prepared in
accordance with GAAP consistently applied and fairly present the financial
position and results of operations of the Company as of the respective
dates thereof and for the periods covered thereby, all in accordance with
GAAP. The balance sheets contained in the Company Financial
Statements fairly reflect all liabilities of the Company of the types
normally reflected in balance sheets as of the dates thereof. The Company
has elected to eliminate the footnotes that would normally accompany a
full set of financial statements.
|
|
8.
|
(A)
Except for tax returns for the fiscal year ended March 31, 2007 (which
return is in the process of being prepared and filed), all tax returns
required to be filed by or on behalf of the Company have been properly
prepared and duly and timely filed with the appropriate taxing authorities
in all jurisdictions in which such Tax returns are required to be filed
(after giving effect to any valid extensions of time in which to make such
filings), and all such tax returns were true, complete and correct in all
material respects; (B) all Taxes payable by or on behalf of the Company or
in respect of its income, assets or operations have been fully and timely
paid, and adequate reserves or accruals for taxes have been provided with
respect to any period for which tax returns have not yet been filed or for
which taxes are not yet due and owing; and (C) neither Seller nor the
Company has executed or filed with the Internal Revenue Service (the
“IRS”) or any other taxing authority any agreement, waiver or other
document or arrangement extending or having the effect of extending the
period for assessment or collection of taxes (including, but not limited
to, any applicable statute of limitation), and no power of attorney with
respect to any Tax matter is currently in force. “tax or taxes”
means all federal, state, local, payroll, excise, income or other taxes or
similar governmental charges, fees, levies or
assessments.
|
3
|
9.
|
The
Company has complied in all material respects with all applicable laws,
rules and regulations relating to the payment and withholding of taxes and
has duly and timely withheld from employee salaries, wages and other
compensation and has paid over to the appropriate taxing authorities all
amounts required to be so withheld and paid over for all periods under all
laws. There are no liens as a result of any unpaid taxes upon
any of the assets of the Company.
|
|
10.
|
Except
as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, the Company has (or will have, at
Closing) good and marketable title to that certain real
property (the "Property") situated in the City of Calera, County of
Xxxxx,
State of Oklahoma, free and clear of all Liens of any nature
whatsoever, except (i) statutory liens securing payments not yet due (or
being conducted in good faith and for which adequate reserves have been
established), (ii) liens for real property taxes not yet due and payable,
(iii) easements, rights of way, and other similar encumbrances that do not
materially affect the use of the properties or assets subject thereto or
affected thereby or otherwise materially impair business operations at
such properties, (iv) such imperfections or irregularities of title or
liens as do not materially affect the use of the properties or assets
subject thereto or affected thereby or otherwise materially impair
business operations at such properties and (v) a mortgage held by Xxxxxx Brothers
Small Balance Commercial Mortgage Pass-Through Certificates, Series 2005-1
as mortgagee.
|
|
11.
|
There
is no suit, action, proceeding, investigation, claim or order pending or,
to the knowledge of the Seller, overtly threatened against the Company (or
to the knowledge of the Seller, pending or threatened, against any of the
officers, directors or key employees of the Company with respect to their
business activities on behalf of the Company, or to which the Company is
otherwise a party, which, if adversely determined, would have a Material
Adverse Effect, before any court, or before any governmental department,
commission, board, agency, or instrumentality; nor to the knowledge of the
Seller is there any reasonable basis for any such action, proceeding, or
investigation.
|
4
|
12.
|
The
Company is in compliance with all federal, state and local statutes, laws,
rules, regulations, orders and ordinances applicable to it or to the
conduct of its business or operations or the use of its properties
(including any leased properties) and assets, except for such
non-compliances as would not, individually or in the aggregate, have a
Material Adverse Effect. The Company has all governmental
permits and approvals from state, federal or local authorities which are
required for it to operate its business, except for those the absence of
which would not, individually or in the aggregate, have a Material Adverse
Effect.
|
|
13.
|
The
operations of the Company are in compliance with all applicable laws
promulgated by any governmental entity which prohibit, regulate or control
any hazardous material or hazardous material activity (“Environmental
Laws”) and all permits issued pursuant to Environmental Laws or otherwise
and the Company has obtained all permits required under all applicable
Environmental Laws necessary to operate its business. The
Company has not received any written communication alleging either or both
that it may be in violation of any Environmental Law, or any permit issued
pursuant to Environmental Law, or may have any liability under any
Environmental Law, and there are no investigations of the business,
operations, or currently or previously owned, operated or leased property
of the Company pending or, to the Seller’s knowledge, threatened which
could lead to the imposition of any liability pursuant to Environmental
Law. To the Seller’s knowledge, there is not located at any of
the properties of the Company any (i) underground storage tanks, (ii)
asbestos-containing material or (iii) equipment containing polychlorinated
biphenyls.
|
|
14.
|
No
representation or warranty of the Seller contained in this Agreement or in
any schedule hereto or in any certificate or other instrument furnished by
the Seller to the Purchaser pursuant to the terms hereof, taken as a
whole, contains any untrue statement of a material fact or omits to state
a material fact necessary to make the statements contained herein or
therein not misleading.”
|
|
II.
|
There
is hereby added to the Agreement a new section entitled “Survival of Reps
and Warranties and Indemnification” which shall read as
follows:
|
|
“1.
|
All
representations and warranties made herein shall survive the Closing for a
period of 18 months.”
|
|
III.
|
There
is hereby added to the Agreement a new section entitled “Warrants to the
Seller” which shal read as
follows:
|
5
“In
conjunction with the Amended and Restated Sales/Purchase Agreement dated March
26, 2007 EMTA grants the Seller 1,400,000 warrants to acquire 1,400,000 shares
of common stock of EMTA at an exercise price of $0.75 per share. Such
warrants may be exercised at any time prior to the third anniversary of the
Closing.”
|
IV.
|
The
second sentence in the fourth paragraph under the section entitled
“Payment of Purchase Price” is hereby amended to read as
follows:
|
“Until
the first anniversary of the Closing, if EMTA files a registration statement,
EMTA will include 10% of the shares issued hereunder in such registration
statement.”
|
V.
|
The
section entitled “Royalty Payments” is hereby amended in its entirety to
read as follows:
|
“Until
the fifth anniversary of the Closing, Purchaser will make to Seller royalty
payments for all products sold by the Company to the extent that such products
use as an ingredient any of the Synergyn formulas listed on Annex B to this
Agreement. Such royalty payments shall equal $0.20 per (i) gallon of
product sold if in liquid form and (ii) pound of product sold if in solid form;
provided that such payments shall be reduced to $0.10 per gallon or per pound,
as the case may be, once the aggregate amount of royalties payable hereunder
shall have reached $600,000. All royalty payment hereunder shall be
due and payable with respect to sales revenues actually collected by the Company
within 25 days after the end of each calendar quarter.”
|
VI.
|
There
is hereby added to the Agreement a new section entitled “Other Agreements”
which shall read as follows:
|
|
1.
|
“At
the Closing, the Company shall enter into an employment agreement with
Xxxx Xxxxx.
|
|
2.
|
EMTA
will pay the Company’s credit card balance within 10 days after the
Closing. Seller hereby represents and warrants that such
balance does not exceed $125,000.
|
|
3.
|
Upon
completion of the audit, any adjustment to the inventory value at December
31, 2006 will be adjusted in the purchase price being paid
hereunder.
|
|
4.
|
EMTA
will use commercially reasonable efforts to refinance the existing
mortgage on the Company’s real estate and to have Seller released from any
personal liability under such mortgage as
refinanced.
|
|
5.
|
EMTA
will use commercially reasonable efforts to have Seller removed as a
guarantor from those certain lending facilities with Landmark
Bank.”
|
6
|
VII.
|
The
second paragraph under the section entitled “Payment of Purchase Price” is
hereby amended in its entirety to read as
follows:
|
“Closing
Date: July 15, 2007 or earlier as agreed between the parties.
|
VIII.
|
Except
as specifically amended herewith, the Agreement is ratified and confirmed
in all respects.
|
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed by their respective authorized signatories as of the date first
indicated above.
Assignment
by ATME Acquisitions, Inc. to EMTA Production Holdings, Inc.
| ATME ACQUISITIONS, INC. | ||
|
By:
|
/s/ Xxxxxx X. Xxxxxxxx | |
|
|
||
| Xxxxxx X. Xxxxxxxx, President | ||
| EMTA PRODUCTION HOLDINGS, INC. | ||
|
By:
|
/s/ Xxxxxx X. Xxxxxxxx | |
|
|
||
| Xxxxxx X. Xxxxxxxx, President | ||
| EMTA HOLDINGS, INC. | ||
|
By:
|
/s/ Xxxxxx X. Xxxxxxxx | |
|
|
||
| Xxxxxx X. Xxxxxxxx, President | ||
|
/s/
Xxxxxx Xxxxx
|
|
|||
|
|
||||
|
Xxxxxx
Xxxxx - Seller
|
|
7
