SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (hereinafter referred to as this "Agreement")
is entered into as of this 13th day of May 1997, by and between OXFORD CAPITAL
CORP., a Nevada corporation (hereinafter referred to as "OXFORD"), and A.P., JR.
IRREVOCABLE TRUST AGREEMENT NUMBER ONE (1) (hereinafter referred to as the
"Trust") and XXXXX X. XXXXX (hereinafter referred to as "Focke") and the Trust
and Focke are collectively referred to as the "SHAREHOLDERS", being all of the
shareholders of PRC ENTERPRISES, INC. (hereinafter referred to as "PRC") upon
the following premises:
Premises
WHEREAS, OXFORD is a publicly held corporation organized under the laws of
the State of Nevada and engaged in the ownership and operation of administrative
staffing;
WHEREAS, PRC is a privately held corporation organized under the laws of
the State of Texas and is also engaged in the ownership and operation of
administrative staffing; and
WHEREAS, pursuant to negotiations amongst management of the constituent
corporations, OXFORD, and the SHAREHOLDERS desire to transfer shares
representing one hundred and no/100 percent (100.00%) of the issued and
outstanding stock of PRC in exchange for a note in the principal amount of
$4,500,000 (hereinafter referred to as the "Note"),
Agreement
NOW THEREFORE, on the stated premises and for and in consideration of the
mutual covenants and agreements hereinafter set forth and the mutual benefits to
the parties to be derived herefrom, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS, AND WARRANTIES
OF THE SHAREHOLDERS
As an inducement to, and to obtain the reliance of OXFORD, except as set
forth on the PRC Schedules (as hereinafter defined), the SHAREHOLDERS represent
and warrant as follows:
Section 1.01 Organization. PRC is a corporation duly organized, validly
existing, and in good standing under the laws of Texas and has the corporate
power and is duly authorized, qualified, franchised, and licensed under all
applicable laws, regulations, ordinances, and orders of public authorities to
own all of its properties and assets and to carry on its business in all
material respects as it is now being conducted, including qualification to do
business as a foreign corporation in the states or countries in which the
character and location of the assets owned by it or the nature of the business
transacted by it requires qualification, except where failure to be so qualified
would not have a material adverse effect on its business. Included in the PRC
Schedules are complete and correct copies of the organizational documents of PRC
and each of its subsidiaries as in effect on the date hereof. The execution and
delivery of this Agreement does not, and the consummation of the transactions
contemplated hereby will not, violate any provision of PRC's Articles of
Incorporation, By-Laws or other organizational documents. PRC has taken all
actions required by law, its organization documents, or otherwise to authorize
the execution and delivery of this Agreement. PRC has full power, authority, and
legal right and has taken all action required by law, its Articles of
Incorporation, and otherwise to consummate the transactions herein contemplated.
Section 1.02 Capitalization. The authorized capitalization of PRC consists
of 10,000 shares of common stock, $1.00 par value, of which 1000 shares are
currently issued and outstanding. All issued and outstanding shares are legally
issued, fully paid, and non-assessable and not issued in violation of the
preemptive or other rights of any person.
Section 1.03 Subsidiaries and Predecessor Corporations. PRC does not have
any predecessor corporation(s) or subsidiaries, and does not own, beneficially
or of record, any shares of any other corporation, except as disclosed in the
PRC Schedules. For purposes hereinafter, the term "PRC" also includes those
subsidiaries, if any, set forth on the PRC Schedules.
Section 1.04 Financial Statements.
(a) Included in the PRC Schedules are the audited balance sheets of
PRC as of December 31, 1996 and December 31, 1995, and the related audited
statements of operations, stockholders' equity and cash flows for the two
fiscal years ended December 31, 1996 and December 31, 1995, together with
the notes to such statements and the opinion of Xxxxxx Xxxxx and Company,
independent certified public accountants, with respect thereto.
(b) All such financial statements have been prepared in accordance
with generally accepted accounting principles. The PRC balance sheets
present a true and fair view as of the dates of such balance sheets of the
financial condition of PRC. PRC did not have, as of the dates of such
balance sheets, except as and to the extent reflected or reserved against
therein, any liabilities or obligations (absolute or contingent) which
should be reflected in the balance sheets or the notes thereto, prepared in
accordance with generally accepted accounting principles, and all assets
reflected therein are properly reported and present fairly the financial
condition of the assets of PRC in accordance with generally accepted
accounting principles.
(c) PRC has no liabilities with respect to the payment of any federal,
state, county, local or other taxes (including any deficiencies, interest
or penalties), except for taxes accrued but not yet due and payable.
(d) PRC has filed all state, federal or local income and/or franchise
tax returns required to be filed by it from inception to the date hereof.
Each of such income tax returns reflects the taxes due for the period
covered thereby, except for amounts which, in the aggregate, are
immaterial.
(e) The books and records, financial and otherwise, of PRC are in all
material respects complete and correct and have been maintained in
accordance with good business and accounting practices.
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(f) All of PRC's assets are reflected on its financial statements,
and, except as set forth in the PRC Schedules or the financial statements
of PRC or the notes thereto, PRC has no material liabilities, direct or
indirect, matured or unmatured, contingent or otherwise.
Section 1.05 Information. The information concerning PRC set forth in this
Agreement and in the PRC Schedules is complete and accurate in all material
respects and does not contain any untrue statement of a material fact or omit to
state a material fact required to make the statements made, in light of the
circumstances under which they were made, not misleading. In addition, PRC has
fully disclosed in writing to OXFORD (through this Agreement or the PRC
Schedules) all information relating to matters involving PRC or its assets or
its present or past operations or activities which (i) indicated or may
indicate, in the aggregate, the existence of a greater than $10,000 liability or
diminution in value, (ii) have led or may lead to a competitive disadvantage on
the part of PRC or (iii) either alone or in aggregation with other information
covered by this Section, otherwise have led or may lead to a material adverse
effect on the transactions contemplated herein or on PRC, its assets, or its
operations or activities as presently conducted or as contemplated to be
conducted after the Closing Date, including, but not limited to, information
relating to governmental, employee, environmental, litigation and securities
matters and transactions with affiliates.
Section 1.06 Options or Warrants. Except as set forth in the PRC Schedules,
there are no existing options, warrants, calls, or commitments of any character
relating to the authorized and unissued PRC common stock, except options,
warrants, calls or commitments, if any, to which PRC is not a party and by which
it is not bound.
Section 1.07 Absence of Certain Changes or Events. Except as set forth in
this Agreement or the PRC Schedules, since December 31, 1996:
(a) there has not been (i) any material adverse change in the
business, operations, properties, assets, or condition of PRC or (ii) any
damage, destruction, or loss to PRC (whether or not covered by insurance)
materially and adversely affecting the business, operations, properties,
assets, or condition of PRC;
(b) PRC has not (i) amended its Articles of Incorporation or By-Laws;
(ii) declared or made, or agreed to declare or make, any payment of
dividends or distributions of any assets of any kind whatsoever to
stockholders or purchased or redeemed, or agreed to purchase or redeem, any
of its capital stock; (iii) waived any rights of value which in the
aggregate are outside of the ordinary course of business or material
considering the business of PRC; (iv) made any material change in its
method of management, operation or accounting; (v) entered into any other
material transaction other than sales in the ordinary course of its
business; (vi) made any accrual or arrangement for payment of bonuses or
special compensation of any kind or any severance or termination pay to any
present or former officer or employee; (vii) increased the rate of
compensation payable or to become payable by it to any of its officers or
directors or any of its salaried employees whose monthly compensation
exceeds $1,000; or (viii) made any increase in any profit sharing, bonus,
deferred compensation, insurance, pension, retirement, or other employee
benefit plan, payment, or arrangement made to, for, or with its officers,
directors, or employees;
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(c) PRC has not (i) borrowed or agreed to borrow any funds or
incurred, or become subject to, any material obligation or liability
(absolute or contingent) except as disclosed herein and except liabilities
incurred in the ordinary course of business; (ii) paid or agreed to pay any
material obligations or liability (absolute or contingent) other than
current liabilities reflected in or shown on the most recent PRC balance
sheet, and current liabilities incurred since that date in the ordinary
course of business and professional and other fees and expenses in
connection with the preparation of this Agreement and the consummation of
the transactions contemplated hereby; (iii) sold or transferred, or agreed
to sell or transfer, any of its assets, properties, or rights (except
assets, properties, or rights not used or useful in its business which, in
the aggregate have a value of less than $1,000), or canceled, or agreed to
cancel, any debts or claims (except debts or claims which in the aggregate
are of a value of less than $1,000); (iv) made or permitted any amendment
or termination of any contract, agreement, or license to which it is a
party if such amendment or termination is material, considering the
business of PRC; or (v) issued, delivered, or agreed to issue or deliver
any stock, bonds or other corporate securities including debentures
(whether authorized and unissued or held as treasury stock); and
(d) to the best knowledge of PRC, PRC has not become subject to any
law or regulation which materially and adversely affects, or in the future
may adversely affect the business, operations, properties, assets, or
condition of PRC.
Section 1.08 Title and Related Matters. PRC has good and marketable title
to all of its properties, inventory, interests in properties, and assets, real
and personal, which are reflected in the most recent PRC balance sheet or
acquired after that date (except properties, inventory, interests in properties,
and assets sold or otherwise disposed of since such date in the ordinary course
of business) free and clear of all liens, pledges, charges, or encumbrances
except (a) statutory liens or claims not yet delinquent; (b) such imperfections
of title and easements as do not and will not materially detract from or
interfere with the present or proposed use of the properties subject thereto or
affected thereby or otherwise materially impair present business operations on
such properties; and (c) as described in the PRC Schedules. Except as set forth
in the PRC Schedules, PRC owns, free and clear of any liens, claims,
encumbrances, royalty interests, or other restrictions or limitations of any
nature whatsoever, any and all products it is currently manufacturing, including
the underlying technology and data, and all procedures, techniques, marketing
plans, business plans, methods of management, or other information utilized in
connection with PRC's business. Except as set forth in the PRC Schedules, no
third party has any right to, and PRC has not received any notice of
infringement of or conflict with asserted rights of others with respect to any
product, technology, data, trade secrets, know-how, propriety techniques,
trademarks, service marks, trade names, or copyrights which, individually or in
the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a materially adverse effect on the business, operations, financial
condition, income, or business prospects of PRC or any material portion of its
properties, assets, or rights.
Section 1.09 Litigation and Proceedings. Except as set forth in the PRC
Schedules, there are no actions, suits, proceedings, or investigations pending
or, to the knowledge of PRC after reasonable investigation, threatened by or
against PRC or affecting PRC or its properties, at law or in equity, before any
court or other governmental agency or instrumentality, domestic or foreign, or
before any arbitrator of any kind. PRC does not have any knowledge of any
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material default on its part with respect to any judgment, order, injunction,
decree, award, rule, or regulation of any court, arbitrator, or governmental
agency or instrumentality or of any circumstances which, after reasonable
investigation, would result in the discovery of such a default.
Section 1.10 Contracts.
(a) Except as included or described in the PRC Schedules, there are no
"material" contracts, agreements, franchises, license agreements, debt
instruments or other commitments to which PRC is a party or by which it or
any of its assets, products, technology, or properties are bound other than
those incurred in the ordinary course of business (as used in this
Agreement, a "material" contract, agreement, franchise, license agreement,
debt instrument or commitment is one which (i) will remain in effect for
more than six (6) months after the date of this Agreement or (ii) involves
aggregate obligations of at least ten thousand dollars ($10,000));
(b) All contracts, agreements, franchises, license agreements, and
other commitments to which PRC is a party or by which its properties are
bound and which are material to the operations of PRC taken as a whole are
valid and enforceable by PRC in all respects, except as limited by
bankruptcy and insolvency laws and by other laws affecting the rights of
creditors generally;
(c) PRC is not a party to or bound by, and the properties of PRC are
not subject to any contract, agreement, other commitment or instrument; any
charter or other corporate restriction; or any judgment, order, writ,
injunction, decree, or award which materially and adversely affects, the
business operations, properties, assets, or condition of PRC; and
(d) Except as included or described in the PRC Schedules or reflected
in the most recent PRC balance sheet, PRC is not a party to any oral or
written (i) contract for the employment of any officer or employee which is
not terminable on 30 days, or less notice; (ii) profit sharing, bonus,
deferred compensation, stock option, severance pay, pension benefit or
retirement plan, (iii) agreement, contract, or indenture relating to the
borrowing of money, (iv) guaranty of any obligation, other than one on
which PRC is a primary obligor, for the borrowing of money or otherwise,
excluding endorsements made for collection and other guaranties of
obligations which, in the aggregate do not exceed more than one year or
providing for payments in excess of $10,000 in the aggregate; (v)
collective bargaining agreement; or (vi) agreement with any present or
former officer or director of PRC.
Section 1.11 Material Contract Defaults. PRC is not in default in any
material respect under the terms of any outstanding contract, agreement, lease,
or other commitment which is material to the business, operations, properties,
assets or condition of PRC and there is no event of default in any material
respect under any such contract, agreement, lease, or other commitment in
respect of which PRC has not taken adequate steps to prevent such a default from
occurring.
Section 1.12 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, constitute
an event of default under, or terminate, accelerate or modify the terms of any
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material indenture, mortgage, deed of trust, or other material contract,
agreement, or instrument to which PRC is a party or to which any of its
properties or operations are subject.
Section 1.13 Governmental Authorizations. Except as set forth in the PRC
Schedules, PRC has all licenses, franchises, permits, and other governmental
authorizations that are legally required to enable it to conduct its business in
all material respects as conducted on the date hereof.
Section 1.14 Compliance With Laws and Regulations. Except as set forth in
the PRC Schedules, to the best of their knowledge PRC has complied with all
applicable statutes and regulations of any federal, state, or other governmental
entity or agency thereof, except to the extent that noncompliance would not
materially and adversely affect the business, operations, properties, assets, or
condition of PRC or except to the extent that noncompliance would not result in
the occurrence of any material liability for PRC.
Section 1.15 Insurance. PRC will maintain all of its current policies of
insurance (liability and casualty) during the term of this Agreement.
Section 1.16 Approval of Agreement. The board of directors of PRC has
approved this Agreement and by their signatures hereto, the SHAREHOLDERS
acknowledge that their consent and agreement hereto.
Section 1.17 Material Transactions or Affiliations. Set forth in the PRC
Schedules is a description of every contract, agreement, or arrangement between
PRC and any predecessor and any person who was at the time of such contract,
agreement, or arrangement an officer, director, or person owning of record, or
known by PRC to own beneficially, 5% or more of the issued and outstanding
common stock of PRC and which is to be performed in whole or in part after the
date hereof or which was entered into not more than three years prior to the
date hereof. Except as disclosed in the PRC Schedules or otherwise disclosed
herein, no officer, director, or 5% shareholder of PRC has, or has had since
inception of PRC, any known interest, direct or indirect, in any transaction
with PRC which was material to the business of PRC. There are no commitments by
PRC, whether written or oral, to lend any funds, or to borrow any money from, or
enter into any other transaction with, any such affiliated person.
Section 1.18 Labor Relations. PRC has not had work stoppage resulting from
labor problems. To the knowledge of the SHAREHOLDERS, no union or other
collective bargaining organization is organizing or attempting to organize any
employee of PRC.
Section 1.19 PRC Schedules. The SHAREHOLDERS have delivered to OXFORD the
following schedules, which are collectively referred to as the "PRC Schedules"
and which consist of separate schedules dated as of the date of execution of
this Agreement, all certified by the chief executive officer of PRC as complete,
true, and correct as of the date of this Agreement in all material respects:
(a) Schedule 1.01 through Schedule 1.18 setting forth any exceptions,
information and copies of documents required to be disclosed in the PRC
Schedules by Sections 1.01 through 1.18.
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(b) a Schedule 1.19(b) containing a list indicating the name and
address of each shareholder of PRC together with the number of shares owned
by him, her or it;
(c) a Schedule 1.19(c) containing a description of all real property
owned by PRC, together with a description of every mortgage, deed of trust,
pledge, lien, agreement, encumbrance, claim, or equity interest of any
nature whatsoever in such real property;
(d) a Schedule 1.19(d) including copies of all licenses, permits, and
other governmental authorizations (or requests or applications therefor)
pursuant to which PRC carries on or proposes to carry on its business
(except those which, in the aggregate, are immaterial to the present or
proposed business of PRC);
(e) a Schedule 1.19(e) listing the accounts receivable and notes and
other obligations receivable of PRC as of December 31, 1996, or thereafter
other than in the ordinary course of business of PRC, indicating the debtor
and amount, and classifying the accounts to show in reasonable detail the
length of time, if any, overdue, and stating the nature and amount of any
refunds, set offs, reimbursements, discounts, or other adjustments, which
are in the aggregate material and due to or claimed by such debtor; and
(f) a Schedule 1.19(f) listing the accounts payable and notes and
other obligations payable of PRC as of December 31, 1996, or that arose
thereafter other than in the ordinary course of the business of PRC,
indicating the creditor and amount, classifying the accounts to show in
reasonable detail the length of time, if any, overdue, and stating the
nature and amount of any refunds, set offs, reimbursements, discounts, or
other adjustments, which in the aggregate are material and due to or
claimed by PRC respecting such obligations.
The SHAREHOLDERS shall cause the PRC Schedules and the instruments and data
delivered to OXFORD hereunder to be promptly updated after the date hereof up to
and including the Closing Date.
It is understood and agreed that not all of the schedules referred to above
have been completed or are available to be furnished by the SHAREHOLDERS. The
SHAREHOLDERS shall have 20 days from the date of execution hereof to provide
such schedules. If the SHAREHOLDERS cannot or fail to do so, or if OXFORD acting
reasonably finds any such schedules or updates provided after the date hereof to
be unacceptable, OXFORD may terminate this Agreement by giving written notice to
PRC within ten (10) days after the schedules or updates were due to be produced
or were provided.
Section 1.20 Reserved.
Section 1.21 Bank Accounts; Power of Attorney. Set forth in Schedule 1.21
is a true and complete list of (a) all accounts with banks, money market mutual
funds or securities or other financial institutions maintained by PRC within the
past twelve (12) months, the account numbers thereof, and all persons authorized
to sign or act on behalf of PRC, (b) all safe deposit boxes and other similar
custodial arrangements maintained by PRC within the past twelve (12) months, and
(c) the names of all persons holding powers of attorney from PRC or who are
otherwise authorized to act on behalf of PRC with respect to any matter, other
than its officers and directors, and a summary of the terms of such powers or
authorizations.
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Section 1.22 Valid Obligation. This Agreement and all agreements and other
documents executed by the SHAREHOLDERS in connection herewith constitute the
valid and binding obligation of the SHAREHOLDERS, enforceable in accordance with
its or their terms, except as may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and subject to the qualification that the availability of equitable
remedies is subject to the discretion of the court before which any proceeding
therefor may be brought.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF OXFORD
As an inducement to, and to obtain the reliance of the SHAREHOLDERS, except
as set forth in the OXFORD Schedules (as hereinafter defined), OXFORD represents
and warrants as follows:
Section 2.01 Organization. OXFORD is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Nevada and has the
corporate power and is duly authorized, qualified, franchised, and licensed
under all applicable laws, regulations, ordinances, and orders of public
authorities to own all of its properties and assets, to carry on its business in
all material respects as it is now being conducted, and except where failure to
be so qualified would not have a material adverse effect on its business, there
is no jurisdiction in which it is not qualified in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification. Included in the OXFORD Schedules are complete and
correct copies of the Articles of Incorporation and By-Laws of OXFORD as in
effect on the date hereof. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby will not,
violate any provision of OXFORD's Articles of Incorporation or ByLaws. OXFORD
has taken all action required by law, its Articles of Incorporation, By-Laws, or
otherwise to authorize the execution and delivery of this Agreement, and OXFORD
has full power, authority, and legal right and has taken all action required by
law, their Articles of Incorporation, ByLaws, or otherwise to consummate the
transactions herein contemplated.
Section 2.02 Capitalization. OXFORD's authorized capitalization consists of
50,000,000 shares of common stock, par value $.001 of which 33,064,248 shares
are issued and outstanding and 1,000,000 shares of Preferred Stock, par value
$.001, of which 100,000 may be issued pursuant to an already existing contract.
All issued and outstanding shares are, and all shares issuable by OXFORD
hereunder will be, legally issued, fully paid, and non-assessable and not issued
in violation of the preemptive or other rights of any person.
Section 2.03 Subsidiaries and Predecessor Corporations. OXFORD does not
have any predecessor corporation(s) or subsidiaries, and does not own,
beneficially or of record, any shares of any other corporation, except as
disclosed in the OXFORD Schedules. For purposes hereinafter, the term "OXFORD"
also includes those subsidiaries, if any, set forth in the OXFORD Schedules.
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Section 2.04 Securities Filings; Financial Statements.
(a) Since December 31, 1993, OXFORD has timely filed all forms,
reports and documents required to be filed with the Securities and Exchange
Commission, and has heretofore delivered to PRC, in the form filed with the
Commission, (i) all quarterly and annual reports on Forms 10-QSB and 10-KSB
filed since December 31, 1995, (ii) all other reports filed by OXFORD with
the Securities and Exchange Commission since December 31, 1995
(collectively, the "SEC Reports") and (iii) all comment letters from the
Securities and Exchange Commission with respect to the SEC Reports. The SEC
Reports (i) were prepared in accordance with the requirements of the
Securities Exchange Act of 1934 or the Securities Act of 1933, as
appropriate, and (ii) did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) Included in the OXFORD Schedules are (i) the unaudited balance
sheets of OXFORD and the related statements of operations and cash flows as
of and for the three months ended December 31,, 1996 and (ii) the audited
balance sheets of OXFORD as of June 30, 1996 and June 30, 1995, and the
related audited statements of operations, stockholders' equity and cash
flows for the two fiscal years ended June 30, 1996 and June 30, 1995,
together with the notes to such statements and the opinion of Xxxxxx Xxxxx
and Company, independent certified public accountants, with respect
thereto, all as set forth in the SEC Reports.
(c) All such financial statements have been prepared in accordance
with generally accepted accounting principles consistently applied
throughout the periods involved. The OXFORD balance sheets present fairly
as of their respective dates the financial condition of OXFORD. As of the
date of such balance sheets, except as and to the extent reflected or
reserved against therein, OXFORD had no liabilities or obligations
(absolute or contingent) which should be reflected in the balance sheets or
the notes thereto prepared in accordance with generally accepted accounting
principles, and all assets reflected therein are properly reported and
present fairly the financial condition of the assets of OXFORD, in
accordance with generally accepted accounting principles. The statements of
operations, stockholders' equity and cash flows reflect fairly the
information required to be set forth therein by generally accepted
accounting principles.
(d) OXFORD has no liabilities with respect to the payment of any
federal, state, county, local or other taxes (including any deficiencies,
interest or penalties), except for taxes accrued but not yet due and
payable.
(e) OXFORD has timely filed all state, federal or local income and/or
franchise tax returns required to be filed by it from inception to the date
hereof. Each of such income tax returns reflects the taxes due for the
period covered thereby, except for amounts which, in the aggregate, are
immaterial.
(f) The books and records, financial and otherwise, of OXFORD are in
all material aspects complete and correct and have been maintained in
accordance with good business and accounting practices.
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(g) All of OXFORD's assets are reflected on its financial statements,
and, except as set forth in the OXFORD Schedules or the financial
statements of OXFORD or the notes thereto, OXFORD has no material
liabilities, direct or indirect, matured or unmatured, contingent or
otherwise.
Section 2.05 Information. The information concerning OXFORD set forth in
this Agreement and the OXFORD Schedules is complete and accurate in all material
respects and does not contain any untrue statements of a material fact or omit
to state a material fact required to make the statements made, in light of the
circumstances under which they were made, not misleading. In addition, OXFORD
has fully disclosed in writing to the SHAREHOLDERS (through this Agreement or
the OXFORD Schedules) all information relating to matters involving OXFORD or
its assets or its present or past operations or activities which (i) indicated
or may indicate, in the aggregate, the existence of a greater than $50,000
liability or diminution in value, (ii) have led or may lead to a competitive
disadvantage on the part of OXFORD or (iii) either alone or in aggregation with
other information covered by this Section, otherwise have led or may lead to a
material adverse effect on the transactions contemplated herein or on OXFORD,
its assets, or its operations or activities as presently conducted or as
contemplated to be conducted after the Closing Date, including, but not limited
to, information relating to governmental, employee, environmental, litigation
and securities matters and transactions with affiliates.
Section 2.06 Options or Warrants. Except as set forth in the OXFORD
Schedules, there are no existing options, warrants, calls, or commitments of any
character relating to the authorized and unissued stock of OXFORD (the "Existing
Rights").
Section 2.07 Absence of Certain Changes or Events. Except as otherwise
described herein or in the OXFORD Schedules, or permitted in writing by the
SHAREHOLDERS, since the date of the most recent OXFORD balance sheet:
(a) there has not been (i) any material adverse change in the
business, operations, properties, assets or condition of OXFORD or (ii) any
damage, destruction or loss to OXFORD (whether or not covered by insurance)
materially and adversely affecting the business, operations, properties,
assets or condition of OXFORD;
(b) OXFORD has not (i) amended its Articles of Incorporation or
By-Laws; (ii) declared or made, or agreed to declare or make any payment of
dividends or distributions of any assets of any kind whatsoever to
stockholders or purchased or redeemed, or agreed to purchase or redeem, any
of its capital stock; (iii) waived any rights of value which in the
aggregate are outside of the ordinary course of business or material
considering the business of OXFORD; (iv) made any material change in its
method of management, operation, or accounting; (v) entered into any
transactions or agreements other than in the ordinary course of business;
(vi) made any accrual or arrangement for or payment of bonuses or special
compensation of any kind or any severance or termination pay to any present
or former officer or employee; (vii) increased the rate of compensation
payable or to become payable by it to any of its officers or directors or
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any of its salaried employees whose monthly compensation exceed $1,000; or
(viii) made any increase in any profit sharing, bonus, deferred
compensation, insurance, pension, retirement, or other employee benefit
plan, payment, or arrangement, made to, for or with its officers,
directors, or employees;
(c) OXFORD has not (i) granted or agreed to grant any options,
warrants, or other rights for its stock, bonds, or other corporate
securities calling for the issuance thereof; (ii) borrowed or agreed to
borrow any funds or incurred, or become subject to, any material obligation
or liability (absolute or contingent) except liabilities incurred in the
ordinary course of business; (iii) paid or agreed to pay any material
obligations or liabilities (absolute or contingent) other than current
liabilities reflected in or shown on the most recent OXFORD balance sheet
and current liabilities incurred since that date in the ordinary course of
business and professional and other fees and expenses in connection with
the preparation of this Agreement and the consummation of the transaction
contemplated hereby; (iv) sold or transferred, or agreed to sell or
transfer, any of its assets, properties, or rights (except assets,
properties, or rights not used or useful in its business which, in the
aggregate have a value of less than $1000), or canceled, or agreed to
cancel, any debts or claims (except debts or claims which in the aggregate
are of a value less than $1000); (v) made or permitted any amendment or
termination of any contract, agreement, or license to which it is a party
if such amendment or termination is material, considering the business of
OXFORD or (vi) issued, delivered or agreed to issue or deliver, any stock,
bonds, or other corporate securities including debentures (whether
authorized and unissued or held as treasury stock), except in connection
with this Agreement; and
(d) to the best knowledge of OXFORD, it has not become subject to any
law or regulation which materially and adversely affects, or in the future,
may adversely affect, the business, operations, properties, assets or
condition of OXFORD.
Section 2.08 Title and Related Matters. OXFORD has good and marketable
title to all of its properties, inventory, interest in properties, and assets,
real and personal, which are reflected in the most recent OXFORD balance sheet
or acquired after that date (except properties, inventory, interest in
properties, and assets sold or otherwise disposed of since such date in the
ordinary course of business), free and clear of all liens, pledges, charges, or
encumbrances except (a) statutory liens or claims not yet delinquent; (b) such
imperfections of title and easements as do not and will not materially detract
from or interfere with the present or proposed use of the properties subject
thereto or affected thereby or otherwise materially impair present business
operations on such properties; and (c) as described in the OXFORD Schedules.
Except as set forth in the OXFORD Schedules, OXFORD owns, free and clear of any
liens, claims, encumbrances, royalty interests, or other restrictions or
limitations of any nature whatsoever, any and all products it is currently
manufacturing, including the underlying technology and data, and all procedures,
techniques, marketing plans, business plans, methods of management, or other
information utilized in connection with OXFORD's business. Except as set forth
in the OXFORD Schedules, no third party has any right to, and OXFORD has not
received any notice of infringement of or conflict with asserted rights of
others with respect to any product, technology, data, trade secrets, know-how,
propriety techniques, trademarks, service marks, trade names, or copyrights
which, individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a materially adverse effect on the
business, operations, financial condition, income, or business prospects of
OXFORD or any material portion of its properties, assets, or rights.
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Section 2.09 Litigation and Proceedings. Except as set forth in the PRC
Schedules, there are no actions, suits, proceedings or investigations pending
or, to the knowledge OXFORD after reasonable investigation, threatened by or
against OXFORD or affecting OXFORD or its properties, at law or in equity,
before any court or other governmental agency or instrumentality, domestic or
foreign, or before any arbitrator of any kind. OXFORD has no knowledge of any
default on its part with respect to any judgement, order, writ, injunction,
decree, award, rule or regulation of any court, arbitrator, or governmental
agency or instrumentality or any circumstance which after reasonable
investigation would result in the discovery of such default.
Section 2.10 Contracts.
(a) OXFORD is not a party to, and its assets, products, technology and
properties are not bound by, any material contract, franchise, license
agreement, agreement, debt instrument or other commitments whether such
agreement is in writing or oral, except as disclosed in the SEC Reports or
the OXFORD Schedules.
(b) All contracts, agreements, franchises, license agreements, and
other commitments to which OXFORD is a party or by which its properties are
bound and which are material to the operations of OXFORD taken as a whole
are valid and enforceable by OXFORD in all respects, except as limited by
bankruptcy and insolvency laws and by other laws affecting the rights of
creditors generally;
(c) OXFORD is not a party to or bound by, and the properties of OXFORD
are not subject to any contract, agreement, other commitment or instrument;
any charter or other corporate restriction; or any judgment, order, writ,
injunction, decree, or award which materially and adversely affects, the
business operations, properties, assets, or condition of OXFORD; and
(d) Except as included or described in the OXFORD Schedules or
reflected in the most recent OXFORD balance sheet, OXFORD is not a party to
any oral or written (i) contract for the employment of any officer or
employee which is not terminable on 30 days, or less notice; (ii) profit
sharing, bonus, deferred compensation, stock option, severance pay, pension
benefit or retirement plan, (iii) agreement, contract, or indenture
relating to the borrowing of money, (iv) guaranty of any obligation, other
than one on which OXFORD is a primary obligor, for the borrowing of money
or otherwise, excluding endorsements made for collection and other
guaranties of obligations which, in the aggregate do not exceed more than
one year or providing for payments in excess of $25,000 in the aggregate;
(vi) collective bargaining agreement; or (vii) agreement with any present
or former officer or director of OXFORD.
Section 2.11 Material Contract Defaults. OXFORD is not in default in any
material respect under the terms of any outstanding contract, agreement, lease,
or other commitment which is material to the business, operations, properties,
assets or condition of OXFORD and there is no event of default in any material
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respect under any such contract, agreement, lease, or other commitment in
respect of which OXFORD has not taken adequate steps to prevent such a default
from occurring.
Section 2.12 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, constitute
a default under, or terminate, accelerate or modify the terms of, any indenture,
mortgage, deed of trust, or other material agreement or instrument to which
OXFORD is a party or to which any of its assets or operations are subject.
Section 2.13 Governmental Authorizations. OXFORD has all licenses,
franchises, permits, and other governmental authorizations, that are legally
required to enable it to conduct its business operations in all material
respects as conducted on the date hereof. Except for compliance with federal and
state securities or corporation laws, as hereinafter provided, no authorization,
approval, consent or order of, of registration, declaration or filing with, any
court or other governmental body is required in connection with the execution
and delivery by OXFORD of this Agreement and the consummation by OXFORD of the
transactions contemplated hereby.
Section 2.14 Compliance With Laws and Regulations. To the best of its
knowledge, OXFORD has complied with all applicable statutes and regulations of
any federal, state, or other applicable governmental entity or agency thereof,
except to the extent that noncompliance would not materially and adversely
affect the business, operations, properties, assets or condition of OXFORD or
except to the extent that noncompliance would not result in the occurrence of
any material liability. This compliance includes, but is not limited to, the
filing of all reports to date with federal and state securities authorities.
Section 2.15 Insurance. OXFORD owns no insurable properties and carries no
casualty or liability insurance.
Section 2.16 Approval of Agreement. The board of directors of OXFORD has
authorized the execution and delivery of this Agreement by OXFORD and has
approved this Agreement and the transactions contemplated hereby.
Section 2.17 Continuity of Business Enterprises. Until such time (herein
called the "Conversion Date") as the remaining unpaid principal balance of the
Note is equal to or less than $1,000,000, OXFORD will maintain PRC in its
present corporate form and operate PRC as a separate and distinct subsidiary,
including without limitation, maintaining PRC's current books and records, bank
accounts, and state and federal taxpayer identification numbers. Furthermore,
until the Conversion Date, Oxford will not (i) sell or otherwise dispose of any
material portion of PRC's business or assets (ii) commingle any funds belonging
to or held by PRC with the funds of OXFORD or any OXFORD subsidiary, and (iii)
enter into any agreement or do any act to cause PRC to become liable for the
obligation of Oxford or any other OXFORD subsidiary. The above restrictions will
not be construed to prohibit limited consolidation of repetitive and routine
office/payroll functions with other Oxford subsidiaries so long as such
consolidations do not materially affect the independent operations of PRC and
will increase the annual earnings of PRC. Furthermore, OXFORD shall allocate
PRC's tax liability in accordance with PRC's net income.
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Section 2.18 Material Transactions or Affiliations. Except as disclosed
herein and in the OXFORD Schedules, there exists no contract, agreement or
arrangement between OXFORD and any predecessor and any person who was at the
time of such contract, agreement or arrangement an officer, director, or person
owning of record or known by OXFORD to own beneficially, 5% or more of the
issued and outstanding common stock of OXFORD and which is to be performed in
whole or in part after the date hereof or was entered into not more than three
years prior to the date hereof. Neither any officer, director, nor 5%
shareholder of OXFORD has, or has had since inception of OXFORD, any known
interest, direct or indirect, in any such transaction with OXFORD which was
material to the business of OXFORD. OXFORD has no commitment, whether written or
oral, to lend any funds to, borrow any money from, or enter into any other
transaction with, any such affiliated person.
Section 2.19 Labor Relations. OXFORD has not had work stoppage resulting
from labor problems. To the knowledge of OXFORD, no union or other collective
bargaining organization is organizing or attempting to organize any employee of
OXFORD.
Section 2.20 OXFORD Schedules. OXFORD has delivered to PRC the following
schedules, which are collectively referred to as the "OXFORD Schedules" and
which consist of separate schedules, which are dated the date of this Agreement,
all certified by the chief executive officer of OXFORD to be complete, true, and
accurate in all material respects as of the date of this Agreement:
(a) Schedule 2.01 through Schedule 2.18 setting forth any exceptions,
information and copies of documents required to be disclosed in the OXFORD
Schedules by Sections 2.01 through 2.18.
(b) a Schedule 2.20(b) containing a description of all real property
owned by OXFORD, together with a description of every mortgage, deed of
trust, pledge, lien, agreement, encumbrance, claim, or equity interest of
any nature whatsoever in such real property;
(c) a Schedule 2.20(cd) including copies of all licenses, permits, and
other governmental authorizations (or requests or applications therefor)
pursuant to which OXFORD carries on or proposes to carry on its business
(except those which, in the aggregate, are immaterial to the present or
proposed business of OXFORD);
(d) a Schedule 2.20(d) listing the accounts receivable and notes and
other obligations receivable of OXFORD as of December 31, 1996, or
thereafter other than in the ordinary course of business of OXFORD,
indicating the debtor and amount, and classifying the accounts to show in
reasonable detail the length of time, if any, overdue, and stating the
nature and amount of any refunds, set offs, reimbursements, discounts, or
other adjustments, which are in the aggregate material and due to or
claimed by such debtor; and
(e) a Schedule 2.20(e) listing the accounts payable and notes and
other obligations payable of OXFORD as of December 31, 1996, or that arose
thereafter other than in the ordinary course of the business of OXFORD,
indicating the creditor and amount, classifying the accounts to show in
14
reasonable detail the length of time, if any, overdue, and stating the
nature and amount of any refunds, set offs, reimbursements, discounts, or
other adjustments, which in the aggregate are material and due to or
claimed by OXFORD respecting such obligations.
OXFORD shall cause the OXFORD Schedules and the instruments and data
delivered to PRC hereunder to be promptly updated after the date hereof up to
and including the Closing Date.
It is understood and agreed that not all of the schedules referred to above
have been completed or are available to be furnished by OXFORD. OXFORD shall
have until 20 days from the date of execution hereof to provide such schedules.
If OXFORD cannot or fails to do so, or if the SHAREHOLDERS, find any such
schedules or updates provided after the date hereof to be unacceptable, the
SHAREHOLDERS may terminate this Agreement by giving written notice to OXFORD
within ten (10) days after the schedules or updates were due to be produced or
were provided.
Section 2.21 Reserved.
Section 2.23 Valid Obligation. This Agreement and all agreements and other
documents executed by OXFORD in connection herewith constitute the valid and
binding obligation of OXFORD, enforceable in accordance with its or their terms,
except as may be limited by bankruptcy, insolvency, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and subject to the
qualification that the availability of equitable remedies is subject to the
discretion of the court before which any proceeding therefor may be brought.
ARTICLE III
PURCHASE AND SALE
Section 3.01 Purchase and Sale. On the terms and subject to the conditions
set forth in this Agreement, on the Closing Date (as defined in Section 3.03),
the SHAREHOLDERS shall assign, transfer and deliver to OXFORD, free of all
liens, pledges, encumbrances, charges, restrictions or known claims of any kind,
nature, or description, 10,000 shares of PRC common stock (the "Purchased
Shares") set forth in Schedule 3.01 attached hereto, in the aggregate
constituting not less than one hundred and no/100 percent (100.00%) of the
issued and outstanding shares of common stock of PRC immediately following the
Closing. In exchange for the transfer of the Purchased Shares by the
SHAREHOLDERS, OXFORD shall execute in favor of the SHAREHOLDERS, at Closing, a
Promissory Note in the principal sum of $4,500,000, ( the "Purchase Price"), in
a form substantially similar to that attached as Exhibit A. The Note shall be
secured by OXFORD's Pledge of the Purchased Shares, and OXFORD shall execute a
Pledge Agreement in substantially the same form as that attached as Exhibit B.
The Parties shall also execute an Irrevocable Voting Trust in substantially the
same form as that attached as Exhibit C.
It is hereby acknowledged and agreed that both the Purchased Shares to be
transferred by the SHAREHOLDERS and any OXFORD shares issued to the SHAREHOLDERS
in accordance with the terms of the Note ("OXFORD Shares") shall be "restricted
stock" as that term is defined under Rule 144 of the Securities Act of 1993. The
15
SHAREHOLDERS and OXFORD represent and agree that the Purchased Shares and the
OXFORD Shares being acquired by each are being acquired for investment purposes
without intent to resell such shares and that the subsequent sale or transfer of
such shares may only be made in accordance with registration or a valid
exemption from registration pursuant to U.S. securities laws, to the extent such
laws govern any such sale or transfer. Further, it is understood and agreed that
all certificates evidencing the Purchased Shares and the OXFORD Shares shall
bear the following legend and shall be subject to stop-transfer orders with the
respective transfer agents for such shares:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF EITHER AN EFFECTIVE REGISTRATION STATEMENT FOR THESE SHARES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT.
Section 3.02 Anti-Dilution. The number of Purchased Shares issuable upon
pursuant to Section 3.01 shall be appropriately adjusted to take into account
any stock split, stock dividend, reverse stock split, recapitalization, or
similar change in the common stock of PRC which may occur between the date of
the execution of this Agreement and the Closing Date.
Section 3.03 Closing. The closing ("Closing") of the transactions
contemplated by this Agreement shall be on a date and at such time as the
parties may agree ("Closing Date") but not later than July 1, 1997, subject to
the right of OXFORD or the SHAREHOLDERS to extend such Closing Date by up to an
additional thirty (30) days. Such Closing shall take place at a mutually
agreeable time and place.
Section 3.04 Closing Events. At the Closing, OXFORD and the SHAREHOLDERS
shall execute, acknowledge, and deliver (or shall ensure to be executed,
acknowledged, and delivered) any and all certificates, opinions, financial
statements, schedules, agreements, resolutions, rulings or other instruments
required by this Agreement to be so delivered at or prior to the Closing,
together with such other items as may be reasonably requested by the parties
hereto and their respective legal counsel in order to effectuate or evidence the
transactions contemplated hereby.
Section 3.05 Termination.
(a) This Agreement may be terminated by the board of directors of
OXFORD or by the SHAREHOLDERS at any time prior to the Closing Date if:
(i) there shall be any actual or threatened action or proceeding
before any court or any governmental body which shall seek to
restrain, prohibit, or invalidate the transactions contemplated by
this Agreement and which, in the judgement of such board of directors,
made in good faith and based upon the advice of its legal counsel,
makes it inadvisable to proceed with the purchase and sale
contemplated hereby; or
16
(ii) any of the transactions contemplated hereby are disapproved
by any regulatory authority whose approval is required to consummate
such transactions (which does not include the Securities and Exchange
Commission) or in the judgement of such board of directors, made in
good faith and based on the advice of counsel, there is substantial
likelihood that any such approval will not be obtained or will be
obtained only on a condition or conditions which would be unduly
burdensome, making it inadvisable to proceed with the purchase and
sale.
(b) This Agreement may be terminated by the board of directors of
OXFORD at any time prior to the Closing Date if:
(i) there shall have been any change after the date of the latest
balance sheet of PRC in the assets, properties, business, or financial
condition of PRC, which could have a materially adverse effect on the
financial statements of PRC listed in Section 1.04(a) taken as a
whole, except any changes disclosed in the PRC Schedules;
(ii) the board of directors of OXFORD determines in good faith
that one or more of OXFORD's conditions to Closing has not occurred,
through no fault of OXFORD.
(iii) OXFORD takes the termination action specified in Section
1.19 as a result of PRC Schedules or updates thereto which OXFORD
finds unacceptable;
(c) This Agreement may be terminated by the SHAREHOLDERS at any time
prior to the Closing Date if:
(i) there shall have been any change after the date of the latest
balance sheet of OXFORD in the assets, properties, business or
financial condition of OXFORD, which could have a material adverse
effect on the financial statements of OXFORD listed in Section 2.04(b)
taken as a whole, except any changes disclosed in the OXFORD
Schedules;
(ii) the SHAREHOLDERS determine in good faith that one or more of
PRC's conditions to Closing has not occurred, through no fault of the
SHAREHOLDERS;
In the event of termination pursuant to paragraphs (a), (b) or (c) of
Section 3.05, or Sections 1.19 or 2.20 herein, no obligation, right or
liability shall arise hereunder, and each party shall bear all of the
expenses incurred by it in connection with the negotiation, drafting, and
execution of this Agreement and the transactions herein.
(d) This Agreement may be terminated by the board of directors of
OXFORD at any time prior to the Closing Date if:
(i) The SHAREHOLDERS shall fail to comply in any material respect
with any of its covenants or agreements contained in this Agreement or
17
if any of the representations or warranties of the SHAREHOLDERS
contained herein shall be inaccurate in any material respect, where
such noncompliance or inaccuracy has not been cured within ten (10)
days after written notice thereof.
If this Agreement is terminated pursuant to this paragraph (d) of Section
3.05, this Agreement shall be of no further force or effect, and no
obligation, right or liability shall arise hereunder, except that the
SHAREHOLDERS shall bear their own costs as well as the reasonable costs of
OXFORD in connection with the negotiation, preparation, and execution of
this Agreement.
(e) This Agreement may be terminated by the SHAREHOLDERS at any time
prior to the Closing Date if:
(i) OXFORD shall fail to comply in any material respect with any
of its covenants or agreements contained in this Agreement or if any
of the representations or warranties of OXFORD contained herein shall
be inaccurate in any material respect, where such noncompliance or
inaccuracy has not been cured within ten (10) days after written
notice thereof.
If this Agreement is terminated pursuant to this paragraph (e) of Section
3.05, this Agreement shall be of no further force or effect, and no
obligation, right or liability shall arise hereunder, except that OXFORD
shall bear its own costs as well as the reasonable costs of the
SHAREHOLDERS incurred in connection with the negotiation, preparation and
execution of this Agreement.
ARTICLE IV
SPECIAL COVENANTS
Section 4.01 Access to Properties and Records. OXFORD and the SHAREHOLDERS
will each afford to the officers and authorized representatives of the other
full access to the properties, books and records of OXFORD or PRC, as the case
may be, in order that each may have a full opportunity to make such reasonable
investigation as it shall desire to make of the affairs of the other, and each
will furnish the other with such additional financial and operating data and
other information as to the business and properties of OXFORD or PRC, as the
case may be, as the other shall from time to time reasonably request. Without
limiting the foregoing, as soon as practicable after the end of each fiscal
quarter (and in any event through the last fiscal quarter prior to the Closing
Date), each party shall provide the other with quarterly internally prepared and
unaudited financial statements.
Section 4.02 Delivery of Books and Records. At the Closing, the
SHAREHOLDERS shall deliver to OXFORD the originals of the corporate minute
books, books of account, contracts, records, and all other books or documents of
PRC now in the possession of PRC or its representatives.
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Section 4.03 Third Party Consents and Certificates. OXFORD and the
SHAREHOLDERS agree to cooperate with each other in order to obtain any required
third party consents to this Agreement and the transactions herein contemplated.
Section 4.04 Exclusive Dealing Rights. Until 5:00 P.M. New York City Time
on July 1, 1997, in recognition of the substantial time and effort which OXFORD
has spent and will continue to spend in investigating PRC and its business and
in addressing the matters related to the transactions contemplated herein, each
of which may preempt or delay other management activities, neither the
SHAREHOLDERS, nor any of their representatives or agents will directly or
indirectly solicit or initiate any discussions or negotiations with, or, except
where required by fiduciary obligations under applicable law as advised by
counsel, participate in any negotiations with or provide any information to or
otherwise cooperate in any other way with, or facilitate or encourage any effort
or attempt by, any corporation, partnership, person or other entity or group
(other than OXFORD and its directors, officers, employees, representatives and
agents) concerning any merger, sale of substantial assets, sale of shares of
capital stock, (including without limitation, any public or private offering of
the common stock of PRC) or similar transactions involving PRC (all such
transactions being referred to as "PRC Acquisition Transactions"). If PRC
receives any proposal with respect to a PRC Acquisition Transaction, the
SHAREHOLDERS will immediately communicate to OXFORD the fact that it has
received such proposal and the principal terms thereof.
Section 4.05 Actions Prior to Closing.
(a) From and after the date of this Agreement until the Closing Date
and except as set forth in the OXFORD Schedules or PRC Schedules or as
permitted or contemplated by this Agreement, OXFORD (subject to paragraph
(d) below) and the SHAREHOLDERS will cause PRC to:
(i) carry on its business in substantially the same manner as it
has heretofore;
(ii) maintain and keep its properties in states of good repair
and condition as at present, except for depreciation due to ordinary
wear and tear and damage due to casualty;
(iii) maintain in full force and effect insurance comparable in
amount and in scope of coverage to that now maintained by it;
(iv) perform in all material respects all of its obligations
under material contracts, leases, and instruments relating to or
affecting its assets, properties, and business;
(v) use its best efforts to maintain and preserve its business
organization intact, to retain its key employees, and to maintain its
relationship with its material suppliers and customers; and
(vi) fully comply with and perform in all material respects all
obligations and duties imposed on it by all federal and state laws and
19
all rules, regulations, and orders imposed by federal or state
governmental authorities.
(b) From and after the date of this Agreement until the Closing Date,
OXFORD will not, and the SHAREHOLDERS will not allow PRC to:
(i) make any changes in their articles or certificate of
incorporation or bylaws;
(ii) take any action described in Section 1.07 in the case of the
SHAREHOLDERS, or in Section 2.07, in the case of OXFORD (all except as
permitted therein or as disclosed in the applicable party's
schedules);
(iii) enter into or amend any contract, agreement, or other
instrument of any of the types described in such party's schedules,
except that a party may enter into or amend any contract, agreement,
or other instrument in the ordinary course of business involving the
sale of goods or services; or
(iv) sell any assets or discontinue any operations, sell any
shares of capital stock (other than the sale of securities underlying
existing warrants or options of OXFORD) or conduct any similar
transactions other than in the ordinary course of business (other than
transactions contemplated herein or in the PRC Schedules or OXFORD
Schedules).
Section 4.06 Sales Under Rule 144 or 145,If Applicable.
(a) OXFORD will use its best efforts to at all times comply with the
reporting requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), including timely filing of all periodic reports
required under the provisions of the Exchange Act and the rules and
regulations promulgated thereunder.
(b) Upon being informed in writing by any such person holding
restricted stock of OXFORD that such person intends to sell any shares
under Rule 144, Rule 145 or Regulation S promulgated under the Securities
Act (including any rule adopted in substitution or replacement thereof),
OXFORD will certify in writing to such person that it has filed all of the
reports required to be filed by it under the Exchange Act to enable such
person to sell such person's restricted stock under Rule 144, 145 or
Regulation S, as may be applicable in the circumstances, or will inform
such person in writing that it has not filed any such report or reports.
(c) If any certificate representing any such restricted stock is
presented to OXFORD's transfer agent for registration of transfer in
connection with any sale theretofore made under Rule 144, 145 or Regulation
S, provided such certificate is duly endorsed for transfer by the
appropriate person(s) or accompanied by a separate stock power duly
executed by the appropriate person(s) in each case with reasonable
assurances that such endorsements are genuine and effective, and is
accompanied by an opinion of counsel satisfactory to OXFORD and its counsel
20
that the stock transfer has complied with the requirements of Rule 144, 145
or Regulation S, as the case may be, OXFORD will promptly instruct its
transfer agent to register such shares and to issue one or more new
certificates representing such shares to the transferee and, if appropriate
under the provisions of Rule 144, 145 or Regulation S, as the case may be,
free of any stop transfer order or restrictive legend. The provisions of
this Section 4.09 shall survive the Closing and the consummation of the
transactions contemplated by this Agreement.
Section 4.07 Indemnification.
(a) The SHAREHOLDERS hereby agree to indemnify OXFORD and each of the
officers, agents and directors of OXFORD as of the date of execution of
this Agreement against any loss, liability, claim, damage, or expense
(including, but not limited to, any and all expense whatsoever reasonably
incurred in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever), to which it or they may
become subject arising out of or based on any substantial or material
inaccuracy appearing in or misrepresentations made under Article I of this
Agreement. The indemnification provided for in this paragraph shall survive
the Closing and consummation of the transactions contemplated hereby and
termination of this Agreement.
(b) OXFORD hereby agrees to indemnify the SHAREHOLDERS and each of the
officers, agents, and directors of PRC as of the date of execution of this
Agreement against any loss, liability, claim, damage, or expense
(including, but not limited to, any and all expense whatsoever reasonably
incurred in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever), to which it or they may
become subject arising out of or based on any inaccuracy appearing in or
misrepresentation made under Article II of this Agreement. The
indemnification provided for in this paragraph shall survive the Closing
and consummation of the transactions contemplated hereby and termination of
this Agreement.
(c) No indemnity obligation shall arise under this Section 4.07 in
relation to any matters to which disclosure was made, if such disclosure
gave the other party sufficient information and warning to investigate in
greater detail, the matter so disclosed.
4.08 Management of PRC. Xxxxxx Xxxxxx Xx., Xxxxxx Xxxxxx, Xx., Xxxxx Xxxxx
and Xxxxx Board (collectively the "Employees") shall be afforded employment
contracts to continue work at their respective current locations, for a period
of two years commencing on the date of the final payment or conversion under the
terms of the Note. The prevailing terms of employment shall be determined by the
compensation and benefits that existed for each respective Employee's previous
twelve month period.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF OXFORD
The obligations of OXFORD under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
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Section 5.01 Accuracy of Representations and Performance of Covenants. The
representations and warranties made by the SHAREHOLDERS in this Agreement were
true when made and shall be true at the Closing Date with the same force and
effect as if such representations and warranties were made at and as of the
Closing Date (except for changes therein permitted by this Agreement).
Additionally, the SHAREHOLDERS shall have performed and complied with all
covenants and conditions required by this Agreement to be performed or complied
with by the SHAREHOLDERS. OXFORD shall have been furnished with certificates,
signed by duly authorized executive officers of PRC and the SHAREHOLDERS and
dated the Closing Date, to the foregoing effect.
Section 5.02 Officer's Certificate. OXFORD shall have been furnished with a
certificate dated the Closing Date and signed by a duly authorized officer of
PRC to the effect that no litigation, proceeding, investigation, or inquiry is
pending, or to the best knowledge of PRC threatened, which might result in an
action to enjoin or prevent the consummation of the transactions contemplated by
this Agreement, or, to the extent not disclosed in the PRC Schedules, by or
against PRC, which might result in any material adverse change in any of the
assets, properties, business, or operations of PRC.
Section 5.03 No Material Adverse Change. Prior to the Closing Date, there
shall not have occurred any change in the financial condition, business, or
operations of PRC nor shall any event have occurred which, with the lapse of
time or the giving of notice, is determined to be unacceptable in accordance
with Section 1.19.
Section 5.04 Good Standing. OXFORD shall have received a certificate of
good standing from the Secretary of the State of Texas, dated as of a date
within ten days prior to the Closing Date certifying that PRC is in good
standing as a corporation in Texas.
Section 5.05 No Governmental Prohibition. No order, statute, rule,
regulation, executive order, injunction, stay, decree, judgment or restraining
order shall have been enacted, entered, promulgated or enforced by any court or
governmental or regulatory authority or instrumentality which prohibits the
consummation of the transactions contemplated hereby.
Section 5.06 Consents. All consents, approvals, waivers or amendments
pursuant to all contracts, licenses, permits, trademarks and other intangibles
in connection with the transactions contemplated herein, or for the continued
operation of OXFORD and PRC after the Closing Date on the basis as presently
operated shall have been obtained.
Section 5.07 Other Items. OXFORD shall have received such further opinions,
documents, certificates or instruments relating to the transactions contemplated
hereby as OXFORD may reasonably request.
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ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SHAREHOLDERS
The obligations of the SHAREHOLDERS under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 6.01 Accuracy of Representations and Performance of Covenants. The
representations and warranties made by OXFORD in this Agreement were true when
made and shall be true as of the Closing Date (except for changes therein
permitted by this Agreement) with the same force and effect as if such
representations and warranties were made at and as of the Closing Date.
Additionally, OXFORD shall have performed and complied with all covenants and
conditions required by this Agreement to be performed or complied with by OXFORD
prior to or at the Closing. The SHAREHOLDERS shall have been furnished with
certificates, signed by duly authorized executive officers of OXFORD and dated
the Closing Date, to the foregoing effect.
Section 6.02 Officer's Certificate. The SHAREHOLDERS shall have been
furnished with certificates dated the Closing Date and signed by duly authorized
executive officers of OXFORD, to the effect that no litigation, proceeding,
investigation or inquiry is pending, or to the best knowledge of OXFORD
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement or, to the
extent not disclosed in the OXFORD Schedules, by or against OXFORD, which might
result in any material adverse change in any of the assets, properties or
operations of OXFORD.
Section 6.03 No Material Adverse Change. Prior to the Closing Date, there
shall not have occurred any change in the financial condition, business or
operations of OXFORD nor shall any event have occurred which, with the lapse of
time or the giving of notice.
Section 6.04 Good Standing. The SHAREHOLDERS shall have received a
certificate of good standing from the Secretary of State of the State of Nevada
or other appropriate office, dated as of a date within ten days prior to the
Closing Date certifying that OXFORD is in good standing as a corporation in the
State of Nevada and has filed all tax returns required to have been filed by it
to date and has paid all taxes reported as due thereon.
Section 6.05 No Governmental Prohibition. No order, statute, rule,
regulation, executive order, injunction, stay, decree, judgment or restraining
order shall have been enacted, entered, promulgated or enforced by any court or
governmental or regulatory authority or instrumentality which prohibits the
consummation of the transactions contemplated hereby.
Section 6.06 Consents. All consents, approvals, waivers or amendments
pursuant to all contracts, licenses, permits, trademarks and other intangibles
in connection with the transactions contemplated herein, or for the continued
operation of OXFORD and PRC after the Closing Date on the basis as presently
operated shall have been obtained.
Section 6.07 Other Items. The SHAREHOLDERS shall have received further
opinions, documents, certificates, or instruments relating to the transactions
contemplated hereby as they may reasonably request.
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ARTICLE VII
MISCELLANEOUS
Section 7.01 Brokers. OXFORD and the SHAREHOLDERS agree that, except as set
out on Schedule 7.01 attached hereto, there were no finders or brokers involved
in bringing the parties together or who were instrumental in the negotiation,
execution or consummation of this Agreement. OXFORD and the SHAREHOLDERS agree
to indemnify the other against any claim by any third person other than those
described above for any commission, brokerage, or finder's fee arising from the
transactions contemplated hereby based on any alleged agreement or understanding
between the indemnifying party and such third person, whether express or implied
from the actions of the indemnifying party.
Section 7.02 Alternate Dispute Resolution. The parties agree and contract
that any and all claims, disputes, or controversies arising out of or in any way
relating to this Agreement, any provision hereof, any contract related hereto,
any benefits hereunder, or the claimed breach of termination of any provision of
any of same, whether based on the Constitution, statutes, Code(s) or at common
law of the United States or of any State, including the arbitability of any
claim, dispute or controversy, shall be exclusively resolved by the parties
first trying to settle the dispute in mediation under the Mediation Rules
administered by and conducted by the Neutrals of the National Association for
Dispute resolution, Inc., failing which, settlement of hte dispute shall be by
binding arbitration conducted under the Arbitration Rules of, and before an
Arbitration tribunal of the National Association for Dispute resolution, Inc.
The arbitrator(s) shall have full and complete discretion and authority to do
substantial justice for the parties to the dispute. In the event that the
National Association for Dispute resolution, Inc. is not available or is no
longer in business, the arbitration provided hereunder shall be conducted by the
American Arbitration Association under their rules and procedures.
Section 7.03 Governing Law. This Agreement shall be governed by, enforced,
and construed under and in accordance with the laws of the United States of
America and, with respect to the matters of state law, with the laws of the
State of Texas, without giving effect to principles of conflicts of law
thereunder.
Section 7.04 Notices. Any notice or other communications required or
permitted hereunder shall be in writing and shall be sufficiently given if
personally delivered to it or sent by telecopy, overnight courier or registered
mail or certified mail, postage prepaid, addressed as follows:
If to OXFORD, to: OXFORD CAPITAL CORP.
0000 X. Xxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx Xxxxxx
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With copies to: Xxxx Xxxxxxxxx, Esq.
Vanderkam & Xxxxxxx
000 Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
If the Shareholders: A.P. Jr., Trust Agreement Number One (1),
c/o Xxxxxx Xxxxxx, Xx.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Xxxxx X. Xxxxx
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
With copies to: Xxxx Xxxxxx
Xxxxxxx & Keller, LLP
000 Xxxxx Xxxx Xxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given (i) upon receipt, if personally delivered, (ii) on
the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if
transmitted by telecopy and receipt is confirmed by telephone and (iv) three (3)
days after mailing, if sent by registered or certified mail.
Section 7.05 Attorney's Fees. In the event that either party institutes any
action or suit (including any alternate dispute resolution commenced in
accordance with section 7.02) to enforce this Agreement or to secure relief from
any default hereunder or breach hereof, the prevailing party shall be reimbursed
by the losing party for all costs, including reasonable attorney's fees,
incurred in connection therewith and in enforcing or collecting any judgement
rendered therein.
Section 7.06 Confidentiality.
(a) Each party hereto agrees with the other that, unless and until the
transactions contemplated by this Agreement have been consummated, it and
its representatives will hold in strict confidence all data and information
obtained with respect to another party or any subsidiary thereof from any
representative, officer, director or employee, or from any books or records
or from personal inspection, of such other party, and shall not use such
data or information or disclose the same to others, except (i) to the
extent such data or information is published, is a matter of public
knowledge, or is required by law to be published; or (ii) to the extent
that such data or information must be used or disclosed in order to
consummate the transactions contemplated by this Agreement. In the event of
the termination of this Agreement, each party shall return to the other
party all documents and other materials obtained by it or on its behalf and
shall destroy all copies, digests, work papers, abstracts or other
materials relating thereto, and each party will continue to comply with the
confidentiality provisions set forth herein.
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(b) Each party hereto agrees with the other that, until the Conversion
Date, it and its representatives will hold in strict confidence all data
and information obtained with respect to another party or any subsidiary
thereof from any representative, officer, director or employee, or from any
books or records or from personal inspection, of such other party, which
relates to either party's internal operations, processes or clients,
(collectively called the "Proprietary Information") and shall not use such
Proprietary Information or disclose the same to others, except (i) to the
extent such data or information is published, is a matter of public
knowledge, or is required by law to be published; or (ii) to the extent
that such data or information must be used or disclosed in the ordinary
coarse of business or to further any of the party's business needs.
(c) In the event that OXFORD defaults on the Note and such default is
not cured and thereby results in the Shareholders regaining ownership of
PRC via the exercise of their remedies under the Security Documents, OXFORD
agrees that neither it nor any of its Affiliate Companies shall (i)
contact, communicate with or otherwise solicit any of PRC's clients as such
clients existed on the date of Oxford's default, for a period of two years
from the date the SHAREHOLDERS regain ownership of PRC. Additionally upon
the SHAREHOLDERS regaining ownership of PRC, the parties shall, upon
written request, return to the other party all Proprietary Information and
each party will continue to comply with the confidentiality provisions set
forth herein. Nothing in this section shall be interpreted so as to
preclude OXFORD'S disclosure of such information relating to PRC as is
necessary for any reporting requirement imposed by the Securities and
Exchange Commission, or the Securities Acts of 1933 or 1934.
Section 7.07 Public Announcements and Filings. Unless required by
applicable law or regulatory authority, none of the parties will issue any
report, statement or press release to the general public, to the trade, to the
general trade or trade press, or to any third party (other than its advisors and
representatives in connection with the transactions contemplated hereby) or file
any document, relating to this Agreement and the transactions contemplated
hereby, except as may be mutually agreed by the parties. Copies of any such
filings, public announcements or disclosures, including any announcements or
disclosures mandated by law or regulatory authorities, shall be delivered to
each party at least one (1) business day prior to the release thereof.
Section 7.08 Schedules; Knowledge. Each party is presumed to have full
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement.
Section 7.09 Third Party Beneficiaries. This contract is strictly between
OXFORD and the SHAREHOLDERS, and, except as specifically provided, no director,
officer, stockholder, employee, agent, independent contractor or any other
person or entity shall be deemed to be a third party beneficiary of this
Agreement.
Section 7.10 Expenses. Subject to Sections 3.05 and 7.05 above, whether or
not the purchase and sale is consummated, OXFORD and the SHAREHOLDERS will bear
their own respective expenses, including legal, accounting and professional
fees, incurred in connection with the purchase and sale or any of the other
transactions contemplated hereby.
Section 7.11 Entire Agreement. This Agreement represents the entire
agreement between the parties relating to the subject matter thereof and
supersedes all prior agreements, understandings and negotiations, written or
oral, with respect to such subject matter.
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Section 7.12 Survival; Termination. The representations, warranties, and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for a period of two years.
Section 7.13 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
Section 7.14 Amendment or Waiver. Every right and remedy provided herein
shall be cumulative with every other right and remedy, whether conferred herein,
at law, or in equity, and may be enforced concurrently herewith, and no waiver
by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may by amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance may be extended by a writing
signed by the party or parties for whose benefit the provision is intended.
Section 7.15 Legal Representation. Each party hereto, including the
SHAREHOLDERS of PRC who are signing this Agreement, hereby acknowledges that he
or it has been provided an opportunity to consult with legal counsel of his or
its choice to seek counsel with respect to the transactions contemplated herein
and that each such party has secured such advice as he or it deems necessary to
understand the terms of this Agreement.
Section 7.16 Best Efforts. Subject to the terms and conditions herein
provided, each party shall use its best efforts to perform or fulfill all
conditions and obligations to be performed or fulfilled by it under this
Agreement so that the transactions contemplated hereby shall be consummated as
soon as practicable. Each party also agrees that it shall use its best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective this Agreement and the transactions contemplated
herein.
Section 7.17 Facsimiles. For purposes of this Agreement only, facsimile
signatures shall be considered original signatures.
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IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement
to be executed by their respective officers, hereunto duly authorized, as of the
date first-above written.
ATTEST: OXFORD CAPITAL CORP.
/s/ Xxxx Xxxxxxxxx By: /s/ Xxxxxx Xxxxxx
--------------------------------- ------------------------------------
Xxxx Xxxxxxxxx Xxxxxx Xxxxxx
Secretary or Assistant Secretary Chairman and Chief Executive Officer
SHAREHOLDERS
A.P., Jr. Irrevocable Trust Agreement
Number One (1)
By: /s/ illegible
-------------------------------------
Xxxxxx Xxxxxx, Xx.
Trustee
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Xxxxx X. Xxxxx
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