EXHIBIT 99.1 - Stock Purchase Agreement
STOCK PURCHASE AGREEMENT
among
MIDWEST MERGER MANAGEMENT, LLC,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ AND ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, PANGEA PACIFIC, LLC
and
▇▇▇▇▇ ▇▇▇▇▇▇.▇▇▇, INC.
Dated as of April 29, 2002
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
1.1 Definitions
ARTICLE II
SALE AND PURCHASE OF SHARES
2.1 Sale and Purchase
2.2 Payment of Purchase Price
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
3.1 Due Incorporation; No Subsidiaries
3.2 Due Authorization
3.3 Consents and Approvals; Authority Relative to
this Agreement
3.4 Capitalization
3.5 Financial Statements; Undisclosed Liabilities;
Other Documents
3.6 No Adverse Effects or Changes
3.7 Properties Transferred Pursuant to the ADA
3.8 Employee Benefits
3.9 Employment and Labor Matters
3.10 Taxes
3.11 No Defaults or Violations
3.12 Environmental Matters
3.13 Litigation
3.14 No Conflict of Interest
3.15 Bank Accounts
3.16 Claims Against Officers and Directors
3.17 Due Diligence Materials
3.18 Improper and Other Payments
3.19 Brokers
3.20 Accuracy of Statements
3.21 Investigation
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
4.1 Due Incorporation
4.2 Due Authorization
4.3 Consents and Approvals; Authority Relative to
This Agreement
ARTICLE V
COVENANTS
5.1 Implementing Agreement
5.2 Access to Information and Facilities
5.3 Preservation of Business
5.4 Consents and Approvals
5.5 Maintenance of Insurance
5.6 Resignation of Officers and Directors
5.7 Supplemental Information
5.8 Exclusivity
5.9 Tax Indemnity
5.10 Termination of Certain Agreements
5.11 Required Information for Internal Revenue Service
Form 8820
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
6.1 Warranties True as of Both Present Date and
Closing Date
6.2 Compliance with Agreements and Covenants
6.3 Consents and Approvals
6.4 Documents
6.5 Due Diligence Review
6.6 Delivery of Exhibits
6.7 No Material Adverse Change
6.8 Actions or Proceedings
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS
7.1 Warranties True as of Both Present Date and
Closing Date
7.2 Compliance with Agreements and Covenants
7.3 Documents
7.4 Actions or Proceedings
7.5 Consents and Approvals
7.6 Reporting Status
7.7 Listing Requirement
ARTICLE VIII
CLOSING
8.1 Closing
8.2 Deliveries by Sellers
8.3 Deliveries by Buyer
ARTICLE IX
TERMINATION
9.1 Prior to or at Closing
9.2 Notice
9.3 No Liability for Proper Termination
ARTICLE X
INDEMNIFICATION
10.1 Survival of Representations
10.2 Agreement to Indemnify
10.3 Notice
ARTICLE XI
MISCELLANEOUS
11.1 Expenses
11.2 Amendment
11.3 Notices
11.4 Effect of Investigation
11.5 Waivers
11.6 Counterparts
11.7 Interpretation
11.8 Applicable Law
11.9 Assignment
11.10 No Third-Party Beneficiaries
11.11 Publicity
11.12 Further Assurances
11.13 Severability
11.14 Remedies Cumulative
11.15 Entire Understanding
11.16 Jurisdiction of Disputes; Waiver of Jury Trial
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of March , 2002, among MIDWEST MERGER
MANAGEMENT, LLC, a Kentucky limited liability company ("Buyer"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ AND ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and PANGEA
PACIFIC LLC, (referred to herein individually as "Seller" and collectively as
"Sellers"), and ▇▇▇▇▇ ▇▇▇▇▇▇.▇▇▇, INC. (the "Company").
P R E A M B L E:
WHEREAS, Buyer wishes to purchase from Sellers and Sellers wish to sell
to Buyer certain of their outstanding Shares of the Company totaling an
aggregate of 6,837,615 shares of the Company's common stock.
NOW, THEREFORE, for good valuable, consideration, the sufficiency and
receipt of which are hereby acknowledged, and for the foregoing and the mutual
covenants, agreements and warranties herein contained, the parties agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. The following terms shall have the following meanings
for the purposes of this Agreement:
"ADA" means asset disposition agreement negotiated between the Company
and Newco (as defined herein), which contemplates transfer of Designated Assets
and Designated Liabilities from the Company to Newco.
"Affiliate" means, with respect to any specified Person, (1) any other
Person which, directly or indirectly, owns or controls, is under common
ownership or control with, or is owned or controlled by, such specified Person,
(2) any other Person which is a director, officer or partner or is, directly or
indirectly, the beneficial owner of 10 percent or more of any class of equity
securities of the specified Person or a Person described in clause (1) of this
paragraph, (3) another Person of which the specified Person is a director,
officer or partner or is, directly or indirectly, the beneficial owner of 10
percent or more of any class of equity securities, or (4) any relative or spouse
of the specified Person or any of the foregoing Persons.
"Business Day" means any day of the year other than (i) any Saturday or
Sunday or (ii) any other day on which commercial banks located in New York City
are generally closed for business.
"Buyer Confidential Information" means all confidential information
concerning Buyer or its Affiliates that (i) is not and has not become
ascertainable or obtainable from public or published information, (ii) is not
received from a third party or is received from a third party pursuant to the
authorization of Buyer, (iii) was not in the Company's or either or both of
Sellers' possession prior to disclosure thereof to Sellers or the Company in
connection with the transactions contemplated herein, and (iv) was not
independently developed by the Company or either or both of Sellers.
"Buyer Indemnified Parties" means Buyer and each of its Affiliates
(including, after the Closing, the Company) and their respective officers,
directors, employees, agents and representatives, provided that in no event
shall Sellers be deemed a Buyer Indemnified Party.
"Cash Amounts" has the meaning set forth in Section 2.2.
"Closing" means the consummation of the transactions contemplated
herein.
"Closing Date" means the date on which the Closing occurs.
"Closing Date Escrow Fund Balance" means the aggregate value of the
Escrow Fund as of the Closing Date.
"Code" means the United States Internal Revenue Code of 1986, as
amended.
"Company Confidential Information" means all confidential information
concerning the Company or its Affiliates that (i) is not and has not become
ascertainable or obtainable from public or published information, (ii) is not
received from a third party or is received from a third party pursuant to the
authorization of the Company or either or both of Sellers in connection with
Buyer's due diligence review of the Company, (iii) was not in Buyer's possession
prior to disclosure thereof to Buyer in connection with the transactions
contemplated herein, and (iv) was not independently developed by Buyer.
"Company Material Adverse Change" means a change (or circumstance
involving a prospective change) in the business, operations, assets,
liabilities, results of operations, cash flows, condition (financial or
otherwise) or prospects of the Company which is materially adverse.
-2-
"Company Material Adverse Effect" means an effect (or circumstance
involving a prospective effect) on the business, operations, assets,
liabilities, results of operations, cash flows, condition (financial or
otherwise) or prospects of the Company which is materially adverse.
"Contract" means any contract, lease, commitment, understanding, sales
order, purchase order, agreement, indenture, mortgage, note, bond, right,
warrant, instrument, plan, permit or license, whether written or oral, which is
intended or purports to be binding and enforceable.
"Designated Assets" means all of the assets of the Company appearing on
the Company's unaudited financial statements for the quarter ending forty five
(45) days from the Closing Date.
"Designated Liabilities" means all of the liabilities of the Company
appearing on the Company's unaudited financial statement for the quarter ending
forty five (45) days from the Closing.
"Dollars" or numbers preceded by the symbol "$" means amounts in United
States Dollars.
"Environmental Law" means any law which relates to or otherwise imposes
liability or standards of conduct concerning mining or reclamation of mined
land, discharges, emissions, releases or threatened releases of noises, odors or
any pollutants, contaminants or hazardous or toxic wastes, substances or
materials, whether as matter or energy, into ambient air, water, or land, or
otherwise relating to the manufacture, processing, generation, distribution,
use, treatment, storage, disposal, cleanup, transport or handling of pollutants,
contaminants, or hazardous or toxic wastes, substances or materials, including
the Comprehensive Environmental Response, Compensation and Liability Act of 1980
and the Superfund Amendments and Reauthorization Act of 1986 (together, as
amended, "CERCLA"), the Resource Conservation and Recovery Act of 1976, as
amended, the Toxic Substances Control Act of 1976, as amended, the Federal Water
Pollution Control Act Amendments of 1972, the Clean Water Act of 1977, as
amended, any so-called "Superlien" law, and any other similar federal, state or
local Law.
"Environmental Permit" means any permit, license, approval, consent or
other authorization required by or pursuant to any applicable Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Existing Borrowings" means all borrowings from lending institutions,
vendors or agencies of federal, state or local governments or their political
subdivisions, as set forth on the Financial Statements or in the books and
records of the Company.
-3-
"Financial Statements" means all of the following:
(a) the audited financial statements of the Company as of
December 31, 2000 (including all schedules and notes thereto),
consisting of the balance sheet at such date and the related statements
of income and expenses, retained earnings, changes in financial
position and cash flows for the twelve-month period then ended; and
(b) the audited financial statements of the Company as of
December 31, 2001 (including all schedules and notes thereto)
consisting of the balance sheet at such date and the related statements
of income and expenses, retained earnings, changes in financial
position and cash flows for the twelve-month period then ended.
In addition to (a) and (b) above, after the date of this Agreement, the term
"Financial Statements" shall include any and all Interim Financial Statements
thereafter issued and all audited financial statements filed with or required to
be filed with the Securities and Exchange Commission.
"GAAP" means U.S. generally accepted accounting principles at the time
in effect.
"Governmental Authority" means the government of the United States or
any foreign country or any state or political subdivision thereof and any
entity, body or authority exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
"Group" shall collectively mean all affiliated groups of corporations
of which the Company is or has been a member that have filed any consolidated
Tax Returns for any period ending on or before the Closing Date for which the
statute of limitations has not yet expired.
"Indemnified Person" means the Person or Persons entitled to, or
claiming a right to, indemnification.
"Indemnifying Person" means the Person or Persons claimed by the
Indemnified Person to be obligated to provide indemnification.
"Intellectual Property" means any and all trademarks, tradenames,
service marks, patents, copyrights (including any registrations, applications,
licenses or rights relating to any of the foregoing), technology, trade secrets,
inventions, know-how, designs, computer programs, processes, and all other
intangible assets, properties and rights. The "Company's Intellectual Property"
means any and all Intellectual Property used by the Company in the conduct of
its business.
"Interim Financial Statements" means any financial statements delivered
to Buyer pursuant to Section 5.11.
"Joint Auditors" means (i) certified public accounting firm chosen by
Buyer, and (ii) any certified public accounting firm chosen by Sellers (acting
together).
-4-
"Latest Balance Sheet" means the audited comparative balance sheet of
the Company dated as of December 31, 2001, set forth in Exhibit 3.5.
"Law" means any law, statute, regulation, ordinance, rule, order,
decree, judgment, consent decree, settlement agreement or governmental
requirement enacted, promulgated, entered into, agreed or imposed by any
Governmental Authority.
"Lien" means any mortgage, lien (except for any lien for Taxes not yet
due and payable), charge, restriction, pledge, security interest, option, lease
or sublease, claim, right of any third party, easement, encroachment or
encumbrance.
"Loss" or "Losses" means any and all liabilities, losses, costs,
claims, damages (including consequential damages), penalties and expenses
(including attorneys' fees and expenses and costs of investigation and
litigation). In the event any of the foregoing are indemnifiable hereunder, the
terms "Loss" and "Losses" shall include any and all attorneys' fees and expenses
and costs of investigation and litigation incurred by the Indemnified Person in
enforcing such indemnity. No Loss shall be reduced by reason of tax benefits
allegedly enjoyed as a result of such Loss by any Indemnified Party. Without
limitation, "Loss" and "Losses" shall include fees and disbursements of counsel
incurred by any Indemnified Party in an action or proceeding between the
Indemnifying Party and the Indemnified Party or between the Indemnified Party
and any third party or otherwise.
"Newco" means an entity to be created by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to which it
shall continue the operations of the Company by assigning all of the Company's
assets to Newco in return for Newco's assumption of all the Company's
liabilities.
"Person" means any individual, corporation, proprietorship, firm,
partnership, limited partnership, trust, association or other entity, including
a government or government department, agency or instrumentality.
"Pre-Tax Earnings" has the meaning set forth in Section 2.3(b).
"Real Property Leases" has the meaning set forth in Section 3.9.
"Related Agreement" means any Contract which is or is to be entered
into at the Closing or otherwise pursuant to this Agreement. The Related
Agreements executed by a specified Person shall be referred to as "such Person's
Related Agreements," "its Related Agreements" or another similar expression.
"Shares" means the 6,837,615 shares of Common Stock, par value $.001
per share, of the Company held of record by Sellers, 5,093,996 of which shares
are held of record by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇,▇▇▇ shares are held of record by ▇▇▇
▇▇▇▇▇, 449,970 shares are held of record by ▇▇▇▇▇▇▇ ▇▇▇▇▇, 142,500 shares are
held of record by ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇, 5,000 shares are held of record by
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and 254,700 shares are held of record by Pangea Pacific LLC.
-5-
"Subsidiaries" means any Person 50.1% or more of the voting power of
which is controlled by another Person.
"Taxes" means all taxes, charges, fees, duties, levies or other
assessments, including income, gross receipts, net proceeds, ad valorem,
turnover, real and personal property (tangible and intangible), sales, use,
franchise, excise, value added, stamp, leasing, lease, user, transfer, fuel,
excess profits, occupational, interest equalization, windfall profits,
severance, employee's income withholding, other withholding, unemployment and
Social Security taxes, which are imposed by any Governmental Authority, and such
term shall include any interest, penalties or additions to tax attributable
thereto.
"Tax Return" means any report, return or other information required to
be supplied to a Governmental Authority in connection with any Taxes.
"Tax Statute of Limitations Date" means the close of business on the
30th day after the expiration of the applicable statute of limitations with
respect to Taxes, including any extensions thereof (or if such date is not a
Business Day, the next Business Day).
"Tax Warranty" means a representation or warranty in Sections 3.17 or
3.19.
"Title and Authorization Warranty" means a representation or warranty
in Sections 3.2, 3.4 or 3.7.
"Two Times Prime Rate" means two times the weighted average prime rate
(as the prime rate as from time to time announced by Citibank, N.A. in New York
City).
ARTICLE II
SALE AND PURCHASE OF SHARES
2.1 Sale and Purchase. Each Seller hereby agrees to sell to Buyer that
number of Shares set forth on Exhibit 2.1 opposite the name of such Seller,
which Shares in the aggregate represent 100% of the issued and outstanding
shares of capital stock of each Seller, free and clear of all Liens, and Buyer
hereby agrees to purchase all such Shares.
2.2 Payment of Purchase Price.
(a) Buyer, in consideration for the Shares, shall pay to Sellers Two
Hundred Ten Thousand Dollars ($210,000) in the following manner: (i) certified
check in the amount of One Hundred Five Thousand Dollars ($105,000) to be
delivered at Closing; (ii) a promissory note in the amount of One Hundred
Thousand Dollars ($100,000) with interest at the rate of five percent (5%) per
annum, payable within one (1) year, with a payment in the amount of Twenty Five
Thousand Dollars ($25,000) to be made within six (6) months of Closing to be
applied toward principal only; and (iii) payment to NevWest Securities Corp.
("NevWest") in the amount of $5,000 to be delivered at closing, for its services
on behalf of the Sellers as a broker and finder pertaining to this transaction.
-6-
(b) Buyer, as additional consideration, shall transfer to the Sellers,
on a pro rata basis: (1) 325,000 newly issued shares of the Company's Common
Stock, restricted pursuant to Rule 144 of the Securities Act of 1933, as amended
(the "Securities Act"); and (ii) 25,000 shares of free-trading common stock of
Certified Services, Inc., a Nevada corporation ("CSRV").
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS AND THE COMPANY
The Company and the Sellers jointly and severally, represent and
warrant to Buyer, as of the date of this Agreement and as of the Closing Date
(as if such representations and warranties were remade on the Closing Date), as
follows:
3.1 Due Incorporation; No Subsidiaries. The Company is duly organized,
validly existing and in good standing under the laws of the State of Nevada,
with all requisite power and authority to own, lease and operate its properties
and to carry on its business as they are now being owned, leased, operated and
conducted. The Company is licensed or qualified to do business and is in good
standing (where the concept of "good standing" is applicable) as a foreign
corporation in each jurisdiction where the nature of the properties owned,
leased or operated by it and the business transacted by it require such
licensing or qualification. The jurisdictions in which the Company is
incorporated and licensed or qualified to do business as a foreign corporation
are set forth on Schedule 3.1. The Company has no direct or indirect
Subsidiaries, either wholly or partially owned, and the Company does not hold
any direct or indirect economic, voting or management interest in any Person or
directly or indirectly own any security issued by any Person. True, correct and
complete copies of the Certificate of Incorporation and Bylaws, as amended, and
all minutes of all meetings (or written consents in lieu of meetings) of the
Board of Directors (and all committees thereof) and stockholders of the Company
have been delivered to Buyer.
3.2 Due Authorization. Each of Sellers and the Company has full power
and authority to enter into this Agreement and each of Sellers and the Company
has full power and authority to enter into their respective Related Agreements
and to consummate the transactions contemplated hereby and thereby. Each of
Sellers and the Company has duly and validly executed and delivered this
Agreement and each of Sellers and the Company has duly and validly executed and
delivered (or prior to or at the Closing will duly and validly execute and
deliver) their respective Related Agreements. This Agreement constitutes legal,
valid and binding obligations of each of Sellers and the Company and each
respective Related Agreement upon execution and delivery by either or both of
Sellers or by the Company will constitute legal, valid and binding obligations
of such party, in each case, enforceable in accordance with their respective
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws in effect which affect
the enforcement of creditors' rights generally and by equitable limitations on
the availability of specific remedies.
-7-
3.3 Consents and Approvals; Authority Relative to this Agreement.
(a) No consent, authorization or approval of, filing or registration
with, or cooperation from, any Governmental Authority or any other Person not a
party to this Agreement is necessary in connection with the execution, delivery
and performance by either or both of Sellers or by the Company of this
Agreement, their respective Related Agreements or the consummation of the
transactions contemplated hereby or thereby.
(b) The execution, delivery and performance by Sellers and the Company
of this Agreement and their respective Related Agreements do not and will not,
and the consummation of the transactions contemplated hereby and thereby does
not and will not: (i) violate any Law; (ii) violate or conflict with, result in
a breach or termination of, constitute a default or give any third party any
additional right (including a termination right) under, permit cancellation of,
result in the creation of any Lien upon any of the assets or properties of
either or both of Sellers, the Company under, or result in or constitute a
circumstance which, with or without notice or lapse of time or both, would
constitute any of the foregoing under, any Contract to which either or both of
Sellers or the Company is a party or by which either or both of Sellers or the
Company or any of their respective assets or properties are bound; (iii) permit
the acceleration of the maturity of any indebtedness of either of Sellers or the
Company or indebtedness secured by their respective assets or properties; or
(iv) violate or conflict with any provision of any of the certificate of
incorporation, charter, bylaws or similar organizational instruments of the
Company.
3.4 Capitalization.
(a) The authorized capital stock of the Company consists of 20,000,000
shares of Common Stock, par value $.001 per share, of which 7,686,125 shares are
currently issued and outstanding. All of such Shares (i) are validly issued,
fully paid and nonassessable and (ii) are, and when issued were, free of
preemptive rights. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ owns, legally and beneficially, 5,093,996 of
such Shares, ▇▇▇ ▇▇▇▇▇ owns, legally and beneficially, 891,449 of such Shares ,
▇▇▇▇▇▇▇ ▇▇▇▇▇ owns, legally and beneficially, 449,970 of such Shares, ▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇▇ own, legally and beneficially, 142,500 of such Shares, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ owns, legally and beneficially, 5,000 of such Shares and Pangea Pacific
LLC owns, legally and beneficially, 254,700 of such Shares, free and clear of
any and all Liens. There are no shares of capital stock of the Company held in
the treasury of the Company and no shares of capital stock of the Company are
currently reserved for issuance for any purpose or upon the occurrence of any
event or condition.
(b) There are no shares of capital stock or other securities of the
Company issued or outstanding or any subscriptions, options, warrants, calls,
rights, convertible securities or other agreements or commitments of any
character obligating either or both of Sellers or the Company, or obligating
either or both of Sellers or any of their Affiliates to cause the Company, to
issue, transfer or sell, or cause the issuance, transfer or sale of, any shares
-8-
of capital stock or other securities whether or not such securities have voting
rights of the Company. There are no outstanding contractual obligations of
either or both of Sellers or the Company which relate to the purchase, sale,
issuance, repurchase, redemption, acquisition, transfer, disposition, holding or
voting of any shares of capital stock or other securities of the Company or the
management or operation of the Company. No Person has any right to participate
in, or receive any payment based on any amount relating to, the revenue, income,
value or net worth of the Company or any component or portion thereof, or any
increase or decrease in any of the foregoing.
(c) The assignments, endorsements, stock powers and other instruments
of transfer delivered by each Seller to Buyer at the Closing will be sufficient
to transfer such Seller's entire interest, legal and beneficial, in the Shares.
Each Seller has, and on the Closing Date will have, full power and authority to
convey good and marketable title to all of the Shares, and upon transfer to
Buyer of the certificates representing such Shares, Buyer will receive good and
marketable title to such Shares, free and clear of all Liens.
3.5 Financial Statements; Undisclosed Liabilities; Other Documents.
(a) The Financial Statements have been prepared in accordance with GAAP
consistently applied and present fairly the financial position, assets,
liabilities and retained earnings of the Company as of the dates thereof and the
revenues, expenses, results of operations, changes in financial position and
cash flows of the Company for the periods covered thereby. The Financial
Statements are in accordance with the books and records of the Company, do not
reflect any transactions which are not bona fide transactions and do not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements contained therein, in light of the
circumstances in which they were made, not misleading.
(b) Except as set forth in the Latest Balance Sheet, the Company has no
liabilities, debts, claims or obligations, whether accrued, absolute, contingent
or otherwise, whether due or to become due, other than trade payables and
accrued expenses incurred in the ordinary course of business since the date of
the Latest Balance Sheet.
3.6 No Adverse Effects or Changes. Since December 31 2001, the Company
has not:
(i) suffered any Company Material Adverse Effect;
(ii) suffered any damage, destruction or Loss to any of its
assets or properties (whether or not covered by insurance);
(iii) incurred any obligation or entered into any Contract which
required a payment by any party in excess of, or a series
of payments which in the aggregate exceed, $5,000 or
provides for the delivery of goods or performance of
services, or any combination thereof, having a value in
excess of $5,000, except for purchases of raw materials and
supplies in the ordinary course of business of the Company;
-9-
(iv) taken any action, or entered into or authorized any
Contract or transaction other than in the ordinary course
of business and consistent with past practice;
(v) sold, transferred, conveyed, assigned or otherwise disposed
of any of its assets or properties, except sales of
inventory in the ordinary course of business and consistent
with past practice;
(vi) waived, released or cancelled any claims against third
parties or debts owing to it, or any rights which have any
material value;
(vii) made any changes in its accounting systems, policies,
principles or practices;
(viii) entered into, authorized, or permitted any transaction with
either or both of Sellers or any Affiliate of either or
both of Sellers;
(ix) authorized for issuance, issued, sold, delivered or agreed
or committed to issue, sell or deliver (whether through the
issuance or granting of options, warrants, convertible or
exchangeable securities, commitments, subscriptions, rights
to purchase or otherwise) any shares of its capital stock
or any other securities, or amended any of the terms of any
such securities;
(x) split, combined, or reclassified any shares of its capital
stock, declared, set aside or paid any dividend or other
distribution (whether in cash, stock or property or any
combination thereof) in respect of its capital stock, or
redeemed or otherwise acquired any securities of the
Company;
(xi) made any borrowings, incurred any debt (other than trade
payables in the ordinary course of business and consistent
with past practice), or assumed, guaranteed, endorsed
(except for the negotiation or collection of negotiable
instruments in transactions in the ordinary course of
business and consistent with past practice) or otherwise
become liable (whether directly, contingently or otherwise)
for the obligations of any other Person, or made any
payment or repayment in respect of any indebtedness (other
than trade payables and accrued expenses in the ordinary
course of business and consistent with past practice), in
each case, in excess of $5,000;
(xii) made any loans, advances or capital contributions to, or
investments in, any other Person, in each case, in excess
of $5,000;
(xiii) entered into, adopted, amended or terminated any bonus,
profit sharing, compensation, termination, stock option,
stock appreciation right, restricted stock, performance
unit, pension, retirement, deferred compensation,
employment, severance or other
-10-
employee benefit agreements, trusts, plans, funds or other
arrangements for the benefit or welfare of any director,
officer or employee, or increased in any manner the
compensation or fringe benefits of any director or officer,
or paid any benefit not required by any existing plan and
arrangement or entered into any contract, agreement,
commitment or arrangement to do any of the foregoing;
(xiv) except for capital expenditures contemplated by (xv) below,
acquired, leased or encumbered any assets outside the
ordinary course of business or any assets which are
material to the Company;
(xv) authorized or made any capital expenditure which
individually is in excess of $5,000;
(xvi) made any Tax election or settled or compromised any
federal, state, local or foreign Tax liability, or waived
or extended the statute of limitations in respect of any
such Taxes;
(xvii) paid any amount, performed any obligation or agreed to pay
any amount or perform any obligation, in settlement or
compromise of any suits against the Company or any of its
directors, officers, employees or agents;
(xviii) paid in excess of $5,000, performed any obligation or
agreed to pay in excess of $5,000 or perform any
obligation, in settlement or compromise of any claims of
liability against the Company or any of its directors,
officers, employees or agents; or
(xix) terminated, modified, amended or otherwise altered or
changed any of the terms or provisions of any Contract, or
paid any amount not required by law or by any Contract,
other than in the ordinary course of business and
consistent with past practices.
3.7 Properties Transferred Pursuant to the ADA. Pursuant to the terms
of the ADA between the Company and Newco, the following assets shall be assigned
to Newco in Exchange for an assumption by Newco of all of the Company's
liabilities.
(a) Leased Real Property. Exhibit 3.7 lists all leases pursuant to
which the Company holds, occupies or uses any real property (the "Real Property
Leases") and Exhibit 3.7 includes complete and accurate legal descriptions of
such leased real property. The Company does not hold, occupy or use any real
property except for the real property subject to the Real Property Leases (the
"Leased Real Property"). True and complete copies of the Real Property Leases
have been provided to Buyer. The activities carried on in all buildings, plants,
facilities, installations, fixtures and other structures or improvements
included as part of, or located on or at, the Leased Real Property, and the
buildings, plants, facilities, installations, fixtures and other structures or
-11-
improvements themselves, are not in violation of, or in conflict with, any
applicable zoning, Environmental Law, health regulations or ordinance or any
other similar Law. All covenants or other restrictions (if any) to which any of
the Leased Real Property is subject are being in all respects properly performed
and observed and, except for covenants contained in the Real Property Leases, do
not provide for forfeiture or reversion of title if violated, and neither the
Company nor the owners of any of the Leased Real Property has received any
notice of violation (or claimed violation) thereof. Sellers have delivered to
Buyer true and complete copies of the most recent title insurance policies and
surveys (if any) for the Leased Real Property and copies of any recorded
documents referred to in such policies or surveys, together with copies of all
reports (if any) of any engineers, environmental consultants or other
consultants in its possession relating to any of the Leased Real Property.
(b) Personal Property. Exhibit 3.10 sets forth a true and complete list
of all of the tangible personal property (other than inventories included in
Exhibit 3.11) used by the Company in its business having an original acquisition
cost of $5,000 or more. Exhibit 3.10 also sets forth all leases of personal
property binding upon the Company, or any of its assets or properties, and all
items of personal property covered thereby. All of such tangible personal
property is presently utilized by the Company in the ordinary course of its
business. Sellers have delivered to Buyer true and complete copies of all such
personal property leases.
(c) Inventories. Exhibit 3.11 contains a true and accurate schedule of
all inventories of the Company as of December 31, 2001, with a complete listing
of all items that have remained in inventory for over twelve months. Except as
described on Exhibit 3.11, each item of the inventory owned by the Company is of
merchantable quality, is not obsolete and is usable and saleable in the ordinary
course of its business, and none of such items is held on assignment or
consignment. Such inventories are fairly reflected in the inventory accounts on
the balance sheets included in the Financial Statements in accordance with GAAP,
including all appropriate reserves, and are valued at the lower of cost or
market.
(d) Accounts Receivable and Advances. Exhibit 3.12 contains a true and
accurate schedule of all accounts receivable of the Company in excess of $5,000
and originating on or prior to December 31, 2001, and all loans and advances to
third parties ("Advances").
(e) Intellectual Property. Exhibit 3.13 is a true and complete list of
all of the trademarks, tradenames, service marks, patents and copyrights
(including any registrations of or pending applications for any of the
foregoing) used by the Company in the conduct of its business. Except as
disclosed on Exhibit 3.13:
(i) all of the Company's Intellectual Property is owned by the
Company free and clear of all Liens, and is not subject to
any license, royalty or other agreement, and the Company
has not granted any license or agreed to pay or receive any
royalty in respect of any Intellectual Property;
-12-
(ii) none of the Company's Intellectual Property has been or is
the subject of any pending or threatened litigation or
claim of infringement;
(iii) no license or royalty agreement to which the Company is a
party is in breach or default by any party thereto or the
subject of any notice of termination given or threatened;
(iv) the products manufactured or sold by the Company and any
process, method, part, design, material or other
Intellectual Property they employ, and the marketing and
use by the Company of any such product, service or other
Intellectual Property, do not infringe any Intellectual
Property or confidential or proprietary rights of another,
and the Company has not received any notice contesting its
right to use any Intellectual Property; and
(v) the Company owns or possesses adequate rights in perpetuity
in and to all Intellectual Property necessary to conduct
its business as presently conducted.
(f) Contracts. Exhibit 3.14 lists all the Contracts and arrangements of
the following types to which the Company is a party or by which it is bound, or
to which any of its assets or properties is subject:
(i) any collective bargaining agreement and a summary of the
collective bargaining unit's position with respect to any
such agreement currently the subject of negotiations;
(ii) any Contract or arrangement of any kind with any employee,
officer or director of the Company or any of the respective
Affiliates of such individuals, or any Contract or other
arrangement of any kind with either or both of Sellers or
any Affiliate of either or both of Sellers other than any
such Contract or arrangement described in Section 3.17(a);
(iii) any Contract or arrangement with a sales representative,
manufacturer's representative, distributor, dealer, broker,
sales agency, advertising agency or other Person engaged in
sales, distributing or promotional activities, or any
Contract to act as one of the foregoing on behalf of any
Person;
(iv) any Contract or arrangement of any nature which involves
the payment or receipt of cash or other property, an
unperformed commitment, or goods or services, (i) having a
value in excess of $5,000 if such Contract or arrangement
is not for the purchase by the Company of raw materials, or
(ii) having a value in excess of $5,000 if such Contract or
arrangement is for the purchase by the Company of raw
materials;
-13-
(v) any Contract or arrangement pursuant to which the Company
has made or will make loans or advances, or has or will
have incurred debts or become a guarantor or surety or
pledged its credit on or otherwise become responsible with
respect to any undertaking of another (except for the
negotiation or collection of negotiable instruments in
transactions in the ordinary course of business);
(vi) any indenture, credit agreement, loan agreement, note,
mortgage, security agreement, lease of real property or
personal property, loan commitment or other Contract or
arrangement relating to the borrowing of funds, an
extension of credit or financing;
(vii) any Contract or arrangement involving a partnership, joint
venture or other cooperative undertaking;
(viii) any Contract or arrangement involving any restrictions with
respect to the geographical area of operations or scope or
type of business of the Company;
(ix) any power of attorney or agency agreement or arrangement
with any Person pursuant to which such Person is granted
the authority to act for or on behalf of the Company, or
the Company is granted the authority to act for or on
behalf of any Person;
(x) any Contract not made in the ordinary course of business
which is to be performed in whole or in part at or after
the date of this Agreement;
(xi) any Contract, whether or not fully performed, relating to
any acquisition or disposition of the Company or any
predecessor in interest of the Company, or any acquisition
or disposition of any subsidiary, division, line of
business, or real property; and
(xii) any Contract not specified above that is material to the
Company.
(g) Permits. Exhibit 3.15 is a true and accurate list of all licenses,
certificates, permits, franchises, rights, code approvals and private product
approvals (collectively, "Permits") held by the Company. Except for the Permits
listed on Exhibit 3.15, there are no Permits, whether federal, state, local or
foreign, which are necessary for the lawful operation of the business of the
Company.
(h) Insurance. Exhibit 3.16 contains an accurate and complete list of
all policies of fire, liability, workers' compensation, title and other forms of
insurance owned, held by or applicable to the Company (or its assets or
business). All such policies are in full force and effect, all premiums with
respect thereto covering all periods up to and including the Closing Date have
been paid, and no notice of cancellation or termination has been received with
respect to any such policy. Such policies are sufficient for compliance with (i)
-14-
all requirements of Law and (ii) all Contracts to which the Company is a party,
and are valid, outstanding and enforceable policies. Such insurance policies
provide types and amounts of insurance customarily obtained by businesses
similar to the business of the Company. The Company has not been refused any
insurance with respect to its assets or operations, and its coverage has not
been limited by any insurance carrier to which it has applied for any such
insurance or with which it has carried insurance, during the last three (3)
years.
3.8 Employee Benefits.
(a) General. The Company is not a party to and does not participate in
or have any liability or contingent liability with respect to:
(i) any "employee welfare benefit plan" or "employee
pension benefit plan" as those terms are respectively
defined in sections 3(1) and 3(2) of ERISA, other
than a "multiemployer plan" (as defined in section
3(37) of ERISA) (referred to collectively hereinafter
in this Section as "plans");
(ii) any retirement or deferred compensation plan,
incentive compensation plan, stock plan, unemployment
compensation plan, vacation pay, severance pay, bonus
or benefit arrangement, insurance or hospitalization
program or any other fringe benefit arrangements for
any current or former employee, director, consultant
or agent, whether pursuant to contract, arrangement,
custom or informal understanding, which does not
constitute an "employee benefit plan" (as defined in
section 3(3) of ERISA) (referred to collectively
hereinafter in this Section as "arrangements"); or
(iii) any employment, consulting or agency agreement
(referred to collectively hereinafter in this Section
as "agreements").
(d) Multiemployer Plans. The Company has no employee pension benefit
plan which is a multiemployer plan with respect to which the Company may have
any liability (including any liability attributable to a current or former
member of the Company's "controlled group" as defined in section 4001(a)(14) of
ERISA).
3.9 Employment and Labor Matters. Exhibit 3.18 contains a true,
complete and accurate list of the names, titles, annual compensation (including
all bonuses and similar payments made with respect to each such individual for
the current and preceding fiscal years) of all directors, officers and employees
of the Company who have an annual aggregate remuneration of $40,000 or more. The
Company has and currently is conducting its business in full compliance with all
Laws relating to employment and employment practices, terms and conditions of
employment, wages and hours, affirmative action, and nondiscrimination in
employment. The relationships of the Company with its employees are good; there
-15-
is, and during the past five years there has been, no labor strike, dispute,
slow-down, work stoppage or other labor difficulty actually pending or
threatened against or involving the Company and no attempt is currently being
made or during the past three years has been made to organize any employees of
the Company to form or enter a labor union or similar organization. Exhibit 3.18
contains a list of all grievances by employees during the past three years which
have resulted in a significant change in work practices or contract
interpretation or terms or resulted in arbitration.
3.10 Taxes.
(a) The amounts provided as a liability on the Financial Statements for
all Taxes are adequate to cover all unpaid liabilities for all Taxes, whether or
not disputed, that have accrued with respect to or are applicable to the period
ended on and including the Closing Date or to any years and periods prior
thereto and for which the Company may be directly or contingently liable in its
own right or as a transferee of the assets of, or successor to, any Person,
including, without limitation, any liability arising under Treas. Reg. ?
1.1502-6. The Company has not incurred any Tax liabilities other than in the
ordinary course of business for any taxable year for which the applicable
statute of limitations has not expired; there are no Tax Liens (other than Liens
for current Taxes not yet due and payable) upon the properties or assets of the
Company. Except as set forth on Exhibit 3.10, the Company has not granted or
been requested to grant any waiver of any statutes of limitations applicable to
any claim for Taxes.
(b) All federal, state, local and foreign income, corporation and other
Tax Returns have been filed for the Company and the Group, and all other filings
in respect of Taxes have been made for the Company and the Group, for all
periods through and including the Closing Date as required by applicable Law.
All Taxes shown as due on all such Tax Returns and other filings have been paid.
Each such Tax Return and filing is true and correct and neither the Company nor
the Group has or will have any additional liability for Taxes with respect to
any Tax Return or other filing heretofore filed or which was required by Law to
be filed, other than as reflected as liabilities on the Financial Statements
(which shall not include any amount reflected as a liability for deferred
taxes). Except as set forth in Exhibit 3.19, none of the Tax Returns or other
filings that include the operations of the Company or the Group has ever been
audited or investigated by any Governmental Authority, and no facts exist which
would constitute grounds for the assessment of any additional Taxes by any
Governmental Authority with respect to the taxable years covered in such Tax
Returns and filings. No material issues have been raised in any examination by
any Governmental Authority with respect to the business and operations of the
Company or the Group which, by application of similar principles, reasonably
could be expected to result in a proposed adjustment to the liability for Taxes
for any other period not so examined. All Taxes which the Company and the Group
are required by Law to withhold or collect, including without limitation, sales
and use taxes, and amounts required to be withheld for Taxes of employees and
other withholding taxes, have been duly withheld or collected and, to the extent
required, have been paid over to the proper Governmental Authorities or are held
-16-
in separate bank accounts for such purpose. All information returns required to
be filed by the Company and the Group, or either of them, prior to the Closing
Date have been (or will be) filed, and all statements required to be furnished
to payees by the Company or the Group prior to the Closing Date have been
furnished to such payees, and the information set forth on such information
returns and statements is true, complete and correct.
(c) No Seller is a "foreign person" as defined in Section 1445(f)(3) of
the Code.
(d) Neither the Company nor the Group is a party to or is otherwise
subject to any arrangement having the effect of or giving rise to the
recognition of a deduction or loss in a taxable period ending on or before the
Closing Date, and a corresponding recognition of taxable income or gain in a
taxable period ending after the Closing Date, or any other arrangement that
would have the effect of or give rise to the recognition of taxable income or
gain in a taxable period ending after the Closing Date without the receipt of or
entitlement to a corresponding amount of cash.
(e) Neither the Company nor the Group is subject to any joint venture,
partnership or other arrangement or contract which is treated as a partnership
for federal income tax purposes. Except for any tax-sharing agreement which is
attached to Exhibit 3.19 as an exhibit, neither the Company nor the Group is a
party to any tax-sharing agreement.
(f) None of the assets of the Company constitutes tax-exempt bond
financed property or tax-exempt use property within the meaning of Section 168
of the Code, and none of the assets reflected on the Financial Statements is
subject to a lease, safe harbor lease or other arrangement as a result of which
the Company is not treated as the owner for federal income tax purposes.
(g) The Company has not made or become obligated to make, and will not
as a result of any event connected with any transaction contemplated herein
become obligated to make, any "excess parachute payment" as defined in Section
280G of the Code (without regard to subsection (b)(4) thereof).
(h) The basis of all depreciable or amortizable assets, and the methods
used in determining allowable depreciation or amortization (including cost
recovery) deductions of the Company, are correct and in compliance with the Code
and the regulations thereunder.
3.11 No Defaults or Violations.
(a) The Company has not breached any provision of, nor is it in default
under the terms of, any Contract to which it is a party or under which it has
any rights or by which it is bound, and no other party to any such Contract has
breached such Contract or is in default thereunder.
(b) The Company is in compliance with, and no violation exists under,
any and all Laws applicable to the Company.
-17-
(c) No notice from any Governmental Authority has been received by the
Company claiming any violation of any Law (including any building, zoning or
other ordinance) or requiring any work, construction or expenditure, or
asserting any Tax, assessment or penalty.
3.12 Environmental Matters.
(a) The business, operations and facilities (whether owned or leased)
of the Company, and all existing uses of and activities on or at any of the
properties or facilities (whether owned or leased) of the Company, are in
material compliance with all Environmental Laws in effect as of the date hereof,
and no condition exists or event has occurred which, with or without notice or
the passage of time or both, would constitute a violation of or give rise to any
Lien under any Environmental Law;
(b) The Company has not received any notice from any Governmental
Authority or any other Person that any past or present aspect of the business,
operations or facilities (whether owned or leased) of the Company is in
violation of any Environmental Law or Environmental Permit, or that the Company
is responsible or liable (or potentially responsible or liable) for the
investigation, cleanup or remediation of any Hazardous Materials at any
location; and
(c) The Company is not the subject of any litigation or proceedings in
any forum, judicial or administrative, involving a demand for damages,
injunctive relief, penalties, or other potential liability with respect to
violations of or liability under any Environmental Law;
(d) No condition exists or has existed or event has occurred with
respect to (i) any property that was at any time owned or leased, or any direct
or indirect subsidiary that was at any time owned, by the Company, any
predecessor to the Company or any Person that is or was an Affiliate of the
Company, which property or subsidiary has been sold, transferred or disposed or
for which any lease has terminated or (ii) any predecessor to the Company, that
could (in the case of either of the foregoing clauses (i) or (ii)), with or
without notice, passage of time or both, give rise to any present or future
liability of the Company pursuant to any Environmental Law.
3.13 Litigation.
----------
(a) There are no actions, suits, arbitrations, regulatory proceedings
or other litigation, proceedings or governmental investigations pending or
threatened against or affecting the Company or any of its officers, directors,
employees, agents or stockholders thereof in their capacity as such, or any of
the Company's properties or businesses, and neither of Sellers is aware of any
facts or circumstances which may give rise to any of the foregoing. All of the
proceedings pending or threatened against the Company are fully covered by
-18-
insurance policies (or other indemnification agreements with third parties) and
are being defended by the insurers (or such third parties), subject to such
deductibles as are set forth in such Schedule. The Company is not subject to any
order, judgment, decree, injunction, stipulation or consent order of or with any
court or other Governmental Authority. The Company has not entered into any
agreement to settle or compromise any proceeding pending or threatened against
it which has involved any obligation other than the payment of money or for
which the Company has any continuing obligation.
(b) There are no claims, actions, suits, proceedings or investigations
pending or threatened by or against the Company or either or both of Sellers
with respect to this Agreement or the Related Agreements, or in connection with
the transactions contemplated hereby or thereby, and neither of Sellers has any
reason to believe there is a valid basis for any such claim, action, suit,
proceeding, or investigation.
3.14 No Conflict of Interest. Neither of Sellers nor any of their
Affiliates have or claim to have any direct or indirect interest in any tangible
or intangible property used in the business of the Company, except as a holder
of Shares. Neither of Sellers nor any of their Affiliates have any direct or
indirect interest in any other Person which conducts a business similar to, has
any Contract or arrangement with, or does business or is involved in any way
with, the Company, except for the ownership of less than 2% of any class of
securities of any publicly held corporation.
3.15 Bank Accounts. Exhibit 3.24 sets forth the names and locations of
each bank or other financial institution at which the Company has an account
(giving the account numbers) or safe deposit box and the names of all Persons
authorized to draw thereon or have access thereto, and the names of all Persons,
if any, now holding powers of attorney or comparable delegation of authority
from the Company and a summary statement thereof.
3.16 Claims Against Officers and Directors. There are no pending or
threatened claims against any director, officer, employee or agent of the
Company or any other Person which could give rise to any claim for
indemnification against the Company.
3.17 Due Diligence Materials. Sellers shall have provided to Buyer or
its representatives, in accordance with the terms of Section 5.2, all documents
of the character and type requested by Buyer in connection with its "due
diligence" investigation of the Company, and there are no documents in the
possession of Sellers, the Company or any of their respective agents or
representatives of a character or type described in such requests which have not
been so provided to Buyer or its representatives.
3.18 Improper and Other Payments. To the best of Sellers' knowledge,
except as set forth herein (a) neither the Company, any director, officer,
employee, agent or representative of the Company, nor any Person acting on
behalf of any of them, has made, paid or received any bribes, kickbacks or other
similar payments to or from any Person, whether lawful or unlawful, (b) no
contributions have been made, directly or indirectly, to a domestic or foreign
political party or candidate and (c) no improper foreign payment (as defined in
the Foreign Corrupt Practices Act) has been made.
-19-
3.19 Brokers. Except for Midwest Securities Corporation, none of
Sellers or the Company has used any broker or finder in connection with the
transactions contemplated hereby, and neither Buyer nor any Affiliate of Buyer
has or shall have any liability or otherwise suffer or incur any Loss as a
result of or in connection with any brokerage or finder's fee or other
commission of any Person retained by either or both of Sellers or by the Company
in connection with any of the transactions contemplated by this Agreement.
3.20 Accuracy of Statements. Neither this Agreement nor any schedule,
exhibit, statement, list, document, certificate or other information furnished
or to be furnished by or on behalf of the Company or either or both of Sellers
to Buyer or any representative or Affiliate of Buyer in connection with this
Agreement or any of the transactions contemplated hereby contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statements contained herein or therein, in
light of the circumstances in which they are made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to each of Sellers, as of the date of
this Agreement and as of the Closing Date, as if such representations and
warranties were remade on the Closing Date, as follows:
4.1 Due Incorporation. Buyer is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Kentucky , with all requisite power and authority to own, lease and operate its
properties and to carry on its business as they are now being owned, leased,
operated and conducted.
4.2 Due Authorization. Buyer has full power and authority to enter into
this Agreement and the Related Agreements and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by
Buyer of this Agreement and Related Agreements have been duly and validly
approved by the board of directors of Buyer and no other actions or proceedings
on the part of Buyer are necessary to authorize this Agreement, the Related
Agreements and the transactions contemplated hereby and thereby. Buyer has duly
and validly executed and delivered this Agreement and has duly and validly
executed and delivered the Related Agreements. This Agreement and the Related
Agreements constitute legal, valid and binding obligations of Buyer, in each
case enforceable in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws in effect which affect the enforcement of
creditors' rights generally and by equitable limitations on the availability of
specific remedies.
-20-
4.3 Consents and Approvals; Authority Relative to This Agreement.
(a) No consent, authorization or approval of, filing or registration
with, or cooperation from, any Governmental Authority or any other Person not a
party to this Agreement is necessary in connection with the execution, delivery
and performance by Buyer of this Agreement and the Related Agreements and the
consummation of the transactions contemplated hereby and thereby.
(b) The execution, delivery and performance by Buyer of this Agreement
and its Related Agreements do not and will not, and the consummation of the
transactions contemplated hereby and thereby does not and will not, (i) violate
any Law; or (ii) violate or conflict with any provision of the certificate of
incorporation, charter, bylaws or similar organizational instruments of Buyer.
ARTICLE V
COVENANTS
5.1 Implementing Agreement. Subject to the terms and conditions hereof,
each party hereto shall use its reasonable best efforts to take all action
required of it to fulfill its obligations under the terms of this Agreement and
to facilitate the consummation of the transactions contemplated hereby. Each
Seller agrees that unless this Agreement is terminated in accordance with the
provisions of Section 9.1, each Seller will not encumber the Shares, will not
sell the Shares to any Person other than Buyer (or an Affiliate of Buyer) and
will not take any other action which would have the effect of preventing or
disabling each Seller's respective performance of its obligations under this
Agreement.
5.2. Access to Information and Facilities.
(a) From and after the date of this Agreement or such earlier time as
Buyer and Sellers shall have mutually agreed, Sellers shall, and shall cause the
Company to, give Buyer and Buyer's representatives unrestricted access during
normal business hours to all of the facilities, properties, books, Contracts,
commitments and records of the Company and shall make the officers and employees
of the Company available to Buyer and its representatives as Buyer and its
representatives shall from time to time request; provided, however, that access
to Company Confidential Information shall be provided not later than ten
Business Days prior to the Closing. Buyer and its representatives will be
furnished with any and all information concerning the Company which Buyer or its
representatives reasonably request.
(b) Except as may be reasonably necessary to carry out this Agreement
and the transactions contemplated hereby, Buyer will not, will cause its
Affiliates not to, and will instruct its and its Affiliates' agents and
financing sources not to disclose Company Confidential Information to any Person
other than Buyer's employees, agents and financing sources on a "need to know"
basis without the prior consent of the Company, unless compelled to disclose any
such Company Confidential Information by judicial or administrative process or,
in the opinion of Buyer's counsel, by other requirements of law.
-21-
(c) Except as may be reasonably necessary to carry out this Agreement
and the transactions contemplated hereby, Sellers will not, will cause their
Affiliates to not, and will instruct their and their Affiliates' agents and
financing sources to not disclose any Buyer Confidential Information to any
Person other than Sellers' or the Company's employees, agents and financing
sources without the prior consent of Buyer, unless compelled to disclose any
such Buyer Confidential Information by judicial or administrative process or, in
the opinion of Sellers' counsel, by other requirements of law.
5.3 Preservation of Business. From the date of this Agreement until the
Closing Date, Sellers shall cause the Company to operate only in the ordinary
and usual course of business and consistent with past practice and not permit
any action or omission which would cause any of the representations or
warranties of Sellers contained herein to become inaccurate or any of the
covenants of Sellers to be breached.
5.4 Consents and Approvals. Sellers shall use their best efforts, and
shall cause the Company to use its best efforts, to obtain all consents,
approvals, certificates and other documents required in connection with the
performance by any such parties of this Agreement and their respective Related
Agreements and the consummation of the transactions contemplated hereby and
thereby. Sellers shall, and shall cause the Company to, make all filings,
applications, statements and reports to all Governmental Authorities and other
Persons which are required to be made prior to the Closing Date by or on behalf
of either or both of Sellers, the Company or any of their respective Affiliates
pursuant to any applicable Law or Contract in connection with this Agreement or
any of their respective Related Agreements and the transactions contemplated
hereby and thereby. Buyer shall make all filings, applications, statements and
reports to all Governmental Authorities and other Persons which are required to
be made prior to the Closing Date by or on behalf of Buyer or any of its
Affiliates pursuant to any applicable Law or Contract in connection with this
Agreement or any Related Agreement and the transactions contemplated hereby and
thereby.
5.5 Maintenance of Insurance. Sellers shall cause the Company to
continue to carry its existing insurance through the Closing Date, and shall not
allow any breach, default, termination or cancellation of such insurance
policies or agreements to occur or exist.
5.6 Resignation of Officers and Directors. Sellers shall cause each
officer and member of the Board of Directors of, and each trustee or fiduciary
of any plan or arrangement involving employee benefits of, the Company, if so
requested by Buyer, to tender his or her resignation from such position
effective as of the Closing. Prior to resignation, Sellers shall cause
appointment of the designees of the Buyer to hold positions as Officers and
Directors.
-22-
5.7 Supplemental Information.
(a) From time to time prior to the Closing, Sellers will promptly
disclose in writing to Buyer any matter hereafter arising which, if existing,
occurring or known at the date of this Agreement would have been required to be
disclosed to Buyer or which would render inaccurate any of the representations,
warranties or statements set forth herein. No information provided to a party
pursuant to this Section shall be deemed to cure any breach of any
representation, warranty or covenant made in this Agreement.
(b) From time to time prior to the Closing, Buyer will promptly
disclose in writing to Sellers any matter hereafter arising which, if existing,
occurring or known at the date of this Agreement would have been required to be
disclosed to Sellers or which would render inaccurate any of the
representations, warranties or statements set forth in Article IV hereof. No
information provided to a party pursuant to this Section shall be deemed to cure
any breach of any representation, warranty or covenant made in this Agreement.
5.8 Exclusivity.
Neither of Sellers and none of the Company or any of their respective
directors, officers, employees, representatives, agents or Affiliates shall,
directly or indirectly, solicit, initiate, encourage, respond favorably to,
permit or condone inquiries or proposals from, or provide any confidential
information to, or participate in any discussions or negotiations with, any
Person (other than Buyer, and the respective directors, officers, employees,
representatives and agents) concerning (i) any merger, sale of assets not in the
ordinary course of business, acquisition, business combination, change of
control or other similar transaction involving the Company, or (ii) any purchase
or other acquisition by any Person of the Shares, or (iii) any sale or issuance
by the Company of any shares of its capital stock. Sellers will promptly advise
Buyer of, and communicate to Buyer the terms and conditions of (and the identity
of the Person making), any such inquiry or proposal received.
5.9 Tax Indemnity.
(a) For purposes of this Agreement, "Tax Indemnification Period" means
the period, (including all prior taxable years) ending on and including the
Closing Date. For any taxable year of the Company that does not end on, and
would otherwise extend beyond, the Closing Date, there shall be a deemed short
taxable year ending on and including such date and a second deemed short taxable
year beginning on and including the day after such date. For purposes of
allocating gross income and deductions between deemed short taxable years, the
books of the Company shall be closed as of the close of business of the Closing
Date, and all amounts of income, gain, loss and deduction shall be reflected in
the period in which such items accrued under the Company's normal tax accounting
methods.
-23-
(b) Sellers agree to jointly and severally indemnify Buyer against, and
agree to hold it harmless from, any and all Losses incurred or suffered by it
relating to or arising out of or in connection with any and all Taxes that have
become due and payable during, or which have accrued with respect to the Company
for, any period included in the Tax Indemnification Period and that have not
been paid prior to the Closing Date or reserved on the Financial Statements
(which reserves shall not take into account any liability for deferred taxes).
Any Taxes attributable to the operations of the Company payable as a result of
an audit of any Tax Return shall be deemed to have accrued in the period to
which such Taxes are attributable.
5.10 Termination of Certain Agreements. Each Seller shall, and each
Seller agrees that it shall cause the Company to, and the Company shall,
effective as of the Closing, without any cost to the Company, terminate,
rescind, cancel and render void and of no effect all of the Contracts between
the Company on the one hand and such Seller or any of its Affiliates, as the
case may be (other than the Company) on the other hand, and those Contracts
entered into pursuant to this Agreement.
5.11 Required Information for Internal Revenue Service Form 8820.
Sellers shall provide Buyer or the Company with all information requested by
Buyer or the Company for purposes of completing Internal Revenue Service Form
8820 with respect to the transactions described in this Agreement. Such
information shall be provided in writing within 15 days of the receipt by
Sellers of a request for such information.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The obligations of Buyer under Article II of this Agreement are subject
to the satisfaction or waiver by Buyer of the following conditions precedent on
or before the Closing Date:
6.1 Warranties True as of Both Present Date and Closing Date. The
representations and warranties of Sellers contained herein shall have been
accurate, true and correct on and as of the date of this Agreement, and shall
also be accurate, true and correct on and as of the Closing Date with the same
force and effect as though made by Sellers on and as of the Closing Date,
unless, in each case, any such inaccuracy, untruth or incorrectness with respect
thereto shall not (i) have been willful on the part of either Seller and (ii) be
reasonably likely to result in a Company Material Adverse Effect.
6.2 Compliance with Agreements and Covenants. Sellers and the Company
shall have performed and complied with all of their respective covenants,
obligations and agreements contained in this Agreement to be performed and
complied with by them on or prior to the Closing Date.
6.3 Consents and Approvals. Buyer shall have received written evidence
satisfactory to Buyer that all consents and approvals required for the
consummation of the transactions contemplated hereby or the ownership and
operation by Buyer of the Company and its business have been obtained, and all
required filings have been made, including those set forth on Exhibit 3.3, and
excluding those excluded as set forth on Exhibit 3.3.
6.4 Documents. Buyer shall have received all of the agreements,
documents and items specified in Section 8.2.
-24-
6.5 Due Diligence Review. Buyer shall have been satisfied with (i) the
results of its investigation and review of the business, operations, assets,
liabilities, results of operations, cash flows, condition and prospects of, and
other matters relating to, the Company and (ii) the results of its investigation
and review that there is no material adverse misstatement with respect to
Sellers' representations set forth herein.
6.6 Delivery of Exhibits. All exhibits respecting the Company and/or
Sellers or either of them have been delivered in final form at least five
Business Days prior to the Closing Date (not counting the Closing Date as one of
such Days) and no such exhibit contains or reflects a Material Adverse Change
from the last previous draft of such exhibit or, if none, the last oral
discussion or written memorandum respecting such exhibit or schedule.
6.7 No Material Adverse Change. No Company Material Adverse Change
shall have occurred and no event shall have occurred which, in the reasonable
judgment of Buyer, is reasonably likely to have a Company Material Adverse
Effect.
6.8 Actions or Proceedings. No action or proceeding by any Governmental
Authority or other Person shall have been instituted or threatened which (a)
might have a Company Material Adverse Effect, or (b) could enjoin, restrain or
prohibit, or could result in substantial damages in respect of, any provision of
this Agreement or any of the Related Agreements or the consummation of the
transactions contemplated hereby or thereby or any integration of any operations
of the Company with those of Buyer and its Affiliates.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS
The obligations of Sellers under Article II of this Agreement are
subject to the satisfaction or waiver by Sellers of the following conditions
precedent on or before the Closing Date:
7.1 Warranties True as of Both Present Date and Closing Date. The
representations and warranties of Buyer contained herein shall have been
accurate, true and correct on and as of the date of this Agreement, and shall
also be accurate, true and correct on and as of the Closing Date with the same
force and effect as though made by Buyer on and as of the Closing Date.
7.2 Compliance with Agreements and Covenants. Buyer shall have
performed and complied with all of its respective covenants, obligations and
agreements contained in this Agreement to be performed and complied with by it
on or prior to the Closing Date.
7.3 Documents. Seller shall have received all of the agreements,
documents and items specified in Section 8.3.
-25-
7.4 Actions or Proceedings. No action or proceeding by any Governmental
Authority or other Person shall have been instituted or threatened which could
enjoin, restrain or prohibit, or could result in substantial damages in respect
of, any provision of this Agreement or any of the Related Agreements or the
consummation of the transactions contemplated hereby or thereby or any
integration of any operations of the Company with those of Buyer and its
Affiliates, including its Subsidiaries.
7.5 Consents and Approvals. Sellers shall have received written
evidence satisfactory to Sellers that all consents and approvals required for
the consummation of the transactions contemplated hereby have been obtained, and
all required filings have been made, including those set forth in Exhibit 4.3.
7.6 Reporting Status. The Company shall continue to submit current
reports required to be filed with the Securities and Exchange Commission and
shall provide copies of any reports filed to Buyer..
7.7 Listing Requirement. The Company shall take whatever action
required to not incur a cessation of the listing of its shares of common stock
on the Over the Counter Bulletin Board.
ARTICLE VIII
CLOSING
8.1 Closing. The Closing shall be scheduled to occur at the offices of
NevWest Securities Corp., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇-▇, ▇▇▇▇▇▇▇▇▇,
Nevada, at 10:00 a.m. on the earlier of: (i) April 30, 2002, or (ii) such later
date as the parties hereto shall mutually agree. The Closing, and all
transactions to occur at the Closing, shall be deemed to have taken place at,
and shall be effective as of, the close of business on the Closing Date.
8.2 Deliveries by Sellers. At the Closing, in addition to any other
documents or agreements required under this Agreement, Sellers shall deliver to
Buyer the following:
(a) Certificates evidencing all of the Shares, which certificates shall
be duly endorsed in blank or accompanied by duly executed stock powers;
(b) Appointment of directors and officers of the Company to be selected
by Buyer.
(c ) The resignations of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as director and officer and the
resignation of Volkner ▇▇▇▇▇▇ as officer of the Company;
(d) Evidence, in form satisfactory to Buyer, that all consents and
approvals have been obtained;
-26-
(e) A written statement from each Person holding a Lien upon any of the
assets of the Company, or upon any Shares, confirming the repayment of the
indebtedness secured thereby and the release as of the Closing Date of (i) such
Lien and (ii) all obligations under any and all Contracts relating thereto;
(f) The Certificates of Incorporation or similar instruments of the
Company certified by the Secretary of State or equivalent Person of the
jurisdiction of incorporation of the Company, and Bylaws or similar instruments
of the Company, certified by the Secretary of the Company;
(g) Certificates of Good Standing for the Company from the State of
Nevada;
(h) An opinion, dated the Closing Date, of counsel for Sellers and the
Company;
(i) A certificate of the Company's Secretary certifying resolutions of
the Board of Directors of the Company approving this Agreement, the Company's
Related Agreements and the transactions contemplated hereby and thereby
(together with an incumbency and signature certificate regarding the officer(s)
signing on behalf of the Company).
8.3 Deliveries by Buyer. At the Closing, Buyer shall deliver to Sellers
the following:
(a) The respective aggregate amounts payable to each Seller at the
Closing pursuant to Section 2.2;
(b) A certificate, dated the Closing Date, of an executive officer of
Buyer, certifying as to compliance by Buyer as the case may be, with Sections
7.1 and 7.2;
(c) Certificates of Buyer's secretary certifying resolutions of the
board of directors of parties approving this Agreement and its Related
Agreements and the transactions contemplated hereby and thereby (together with
an incumbency and signature certificate regarding the officer(s) signing on
behalf of Buyer);
(d) Evidence, in form satisfactory to Sellers, that all consents and
approvals referred to in Exhibit 4.3 have been obtained or are not required; and
(e) An opinion, dated the Closing Date, of counsel for Buyer.
ARTICLE IX
TERMINATION
9.1. Prior to or at Closing.
9.1.1 This Agreement may be terminated at any time prior to or at the
Closing by the mutual written consent of all parties to this Agreement.
-27-
9.1.2. This Agreement may be terminated by the Company and the Sellers
if the conditions precedent set forth in Article VII shall have not been
complied with, waived or performed and such noncompliance or nonperformance
shall not have been cured or eliminated (or by its nature cannot be cured or
eliminated) by Buyer on or before Midnight, Eastern Time on April 30, 2002 (the
"Termination Date").
9.1.3. This Agreement may be terminated by Buyer if the conditions
precedent set forth in Article VI shall have not been complied with, waived or
performed and such noncompliance or nonperformance shall not have been cured or
eliminated by the Company and/or the Sellers on or before April 30, 2002.
9.1.4. The Company may terminate this Agreement at any time prior to or
at the Closing if any of the representations and warranties of Buyer in Article
IV of this Agreement were incorrect, untrue or false in any material respect as
of the Agreement date or are incorrect, untrue or false in any material respect
as of the proposed Closing date or Buyer has breached any of their respective
covenants of this Agreement, but in any case, only to the extent that such
incorrectness, untruth, falsity or breach shall cause the condition contained
herein to have failed, and the responsible party has not cured such breach prior
to the earlier of (i) the Closing, or (ii) thirty (30) days after the Company
has given such party a written notice of its intention to terminate this
Agreement pursuant to this subsection.
9.1.6. Buyer may terminate this Agreement at any time prior to or at
the Closing if any of the representations and warranties of the Company and/or
the Seller in Article III of this Agreement were incorrect, untrue or false in
any material respect as of the Agreement date or are incorrect, untrue or false
in any material respect as of the proposed Closing date or any of such parties
has breached any of its covenants under this Agreement, and it has not cured
such breach prior to the earlier of (i) the Closing, or (ii) thirty (30) days
after Buyer has given a written notice of his intention to terminate this
Agreement to the breaching party pursuant to this subsection. Notwithstanding
the foregoing, Buyer may terminate this Agreement at any time prior to or at the
Closing if the Company shall have breached its covenants contained in herein.
9.2. Notice. Any termination of this Agreement under this Article IX
will be effective by the delivery of notice of the terminating party to the
other parties hereto.
9.3. No Liability for Proper Termination. Any termination of this
Agreement in accordance with this Article IX will be without further obligation
or liability upon any party in favor of the other party hereto or to its
stockholders. In the event of the termination of this Agreement pursuant to this
Article IX, this Agreement shall thereafter become void and have no effect and
each party shall be responsible for its own expenses incurred in connection
herewith.
-28-
ARTICLE X
INDEMNIFICATION
10.1. Survival of Representations. All representations, warranties and
covenants of Buyer, The Company and Newco contained in this Agreement will
remain operative and in full force and effect, regardless of any investigation
made by other parties to this Agreement until that date which is the earlier of
(i) the termination of this Agreement or (ii) twelve (12) months after the
Closing Date.
10.2. Agreement to Indemnify.
10.2.1. Buyer agrees to indemnify and hold harmless The Company and the
Sellers, their officers, directors, agents, shareholders and employees, and each
person, if any, who controls or may control those parties within the meaning of
the 1933 Act or the 1934 Act (each hereinafter referred to individually as an
"Indemnified Person" and collectively as "Indemnified Persons") from and against
any and all claims, demands, suits, actions, causes of actions, losses, costs,
damages, liabilities and expenses including, without limitation, reasonable
attorneys' fees, other professionals' and experts' reasonable fees and court or
arbitration costs (hereinafter collectively referred to as "Damages") incurred
and arising out of any inaccuracy, misrepresentation, breach of, or default in,
any of the representations, warranties or covenants given or made by Buyer in
this Agreement or in any certificate delivered by or on behalf of Buyer pursuant
hereto (if such inaccuracy, misrepresentation, breach or default existed at the
Closing Date). Any claim of indemnity made by an Indemnified Person under this
section must be asserted in a writing delivered to Buyer by no later than thirty
notice of such claim.
10.2.2. The Company agrees to indemnify and hold harmless Buyer and
their officers, directors, agents, shareholders and employees, and each person,
if any, who controls or may control those parties within the meaning of the 1933
Act or the 1934 Act (each hereinafter referred to individually as an
"Indemnified Person" and collectively as "Indemnified Persons") from and against
any and all claims, demands, suits, actions, causes of actions, losses, costs,
damages, liabilities and expenses including, without limitation, reasonable
attorneys' fees, other professionals' and experts' reasonable fees and court or
arbitration costs (hereinafter collectively referred to as "Damages") incurred
and arising out of any inaccuracy, misrepresentation, breach of, or default in,
any of the representations, warranties or covenants given or made by The Company
in this Agreement or in any certificate delivered by or on behalf of The Company
pursuant hereto (if such inaccuracy, misrepresentation, breach or default
existed at the Closing Date). Any claim of indemnity made by an Indemnified
Person under this section must be asserted in a writing delivered to Buyer
notice of such claim.
-29-
10.2.3. Sellers agree to indemnify and hold harmless The Company and
Buyer their officers, directors, agents, shareholders and employees, and each
person, if any, who controls or may control those parties within the meaning of
the 1933 Act or the 1934 Act (each hereinafter referred to individually as an
"Indemnified Person" and collectively as "Indemnified Persons") from and against
any and all claims, demands, suits, actions, causes of actions, losses, costs,
damages, liabilities and expenses including, without limitation, reasonable
attorneys' fees, other professionals' and experts' reasonable fees and court or
arbitration costs (hereinafter collectively referred to as "Damages") incurred
and arising out of any inaccuracy, misrepresentation, breach of, or default in,
any of the representations, warranties or covenants given or made by Newco in
this Agreement or in any certificate delivered by or on behalf of the Seller
pursuant hereto (if such inaccuracy, misrepresentation, breach or default
existed at the Closing Date). Any claim of indemnity made by an Indemnified
Person under this section must be asserted in a writing delivered to the Sellers
by no later than thirty (30) days notice of such claim.
10.3. Notice. A party entitled to indemnification hereunder (an
"Indemnified Party") agrees to notify each party required to indemnify hereunder
(an "Indemnifying Party") with reasonable promptness of any claim asserted
against it in respect to which any Indemnifying Party may be liable under this
Agreement, which notification shall be accompanied by a written statement
setting forth the basis of such claim and the manner of calculation thereof. An
Indemnifying Party shall have the right to defend any such claim at its or his
own expense and with counsel of its or his choice; provided, however, that such
counsel shall have been approved by the Indemnified Party prior to engagement,
which approval shall not be unreasonably withheld or delayed; and provided
further, that the Indemnified Party may participate in such defense, if it so
chooses, with its own counsel and at its own expense.
ARTICLE XI
MISCELLANEOUS
11.1 Expenses. Sellers shall pay all expenses of Sellers and the
Company (including attorneys' fees and expenses) and Buyer shall pay all
expenses of Buyer (including attorneys' fees and expenses), in each case
incurred in connection with this Agreement and the transactions contemplated
hereby. Sellers shall pay all sales, use, stamp, transfer, service, recording,
real estate and like taxes or fees, if any, imposed by any Governmental
Authority in connection with the transfer and assignment of the Shares.
11.2 Amendment. This Agreement may be amended, modified or supplemented
but only in writing signed by each of the parties hereto.
11.3 Notices. Any notice, request, instruction or other document to be
given hereunder by a party hereto shall be in writing and shall be deemed to
have been given, (a) when received if given in person or by courier or a courier
-30-
service, (b) on the date of transmission if sent by telex, facsimile or other
wire transmission or (c) six Business Days after being deposited in the U.S. or
Canadian mail, certified or registered mail, postage prepaid:
(a) If to Sellers, addressed as follows:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
and Pangea Pacific, LLC
c/o ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ - ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
(b) If to Buyer, addressed as follows:
Midwest Merger Management, LLC.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
Levy, Boonshoft & ▇▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
(c) If to the Company, addressed as follows:
▇▇▇▇▇ ▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ - ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ Gerwerter, Esq.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
or to such other individual or address as a party hereto may designate for
itself by notice given as herein provided.
11.4 Effect of Investigation.
-----------------------
(a) Any due diligence review, audit or other investigation or inquiry
undertaken or performed by or on behalf of Buyer shall not limit, qualify,
modify or amend the representations, warranties or covenants of, or indemnities
by, Sellers or the Company made or undertaken pursuant to this Agreement,
irrespective of the knowledge and information received (or which should have
been received) therefrom by Buyer.
-31-
(b) Any due diligence review, audit or other investigation or inquiry
undertaken or performed by or on behalf of Sellers or the Company shall not
limit, qualify, modify or amend the representations, warranties and covenants
of, or indemnities by, Buyer made or undertaken pursuant to this Agreement,
irrespective of the knowledge and information received (or which should have
been received) therefrom by Sellers or the Company.
11.5 Waivers. The failure of a party hereto at any time or times to
require performance of any provision hereof shall in no manner affect its right
at a later time to enforce the same. No waiver by a party of any condition or of
any breach of any term, covenant, representation or warranty contained in this
Agreement shall be effective unless in writing, and no waiver in any one or more
instances shall be deemed to be a further or continuing waiver of any such
condition or breach in other instances or a waiver of any other condition or
breach of any other term, covenant, representation or warranty.
11.6 Counterparts. This Agreement may be executed in one or more
counterparts, and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed an original, but all of which together
shall constitute one and the same instrument.
11.7 Interpretation. The headings preceding the text of Articles and
Sections included in this Agreement and the headings to Exhibits attached to
this Agreement are for convenience only and shall not be deemed part of this
Agreement or be given any effect in interpreting this Agreement. The use of the
masculine, feminine or neuter gender herein shall not limit any provision of
this Agreement. The use of the terms "including" or "include" shall in all cases
herein mean "including, without limitation" or "include, without limitation,"
respectively. Underscored references to Articles, Sections, Subsections or
Exhibits shall refer to those portions of this Agreement. Consummation of the
transactions contemplated herein shall not be deemed a waiver of a breach of or
inaccuracy in any representation, warranty or covenant or of any party's rights
and remedies with regard thereto. No specific representation, warranty or
covenant contained herein shall limit the generality or applicability of a more
general representation, warranty or covenant contained herein. A breach of or
inaccuracy in any representation, warranty or covenant shall not be affected by
the fact that any more general or less general representation, warranty or
covenant was not also breached or inaccurate.
11.8 Applicable Law. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York
without giving effect to the principles of conflicts of law thereof.
11.9 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective estates, heirs, legal
representatives, successors and assigns; provided, however, that no assignment
of any rights or obligations shall be made by any party hereto without the
written consent of each other party hereto, except that Buyer may assign its
rights hereunder, but not its obligations, without such consent to any Affiliate
of Buyer.
-32-
11.10 No Third-Party Beneficiaries. This Agreement is solely for the
benefit of the parties hereto and, to the extent provided herein, their
respective estates, heirs, successors, Affiliates, directors, officers,
employees, agents and representatives, and no provision of this Agreement shall
be deemed to confer upon other third parties any remedy, claim, liability,
reimbursement, cause of action or other right.
11.11 Publicity. Prior to the Closing Date, except as required by Law
or the rules of any stock exchange, no public announcement or other publicity
regarding the transactions referred to herein shall be made by Buyer, Sellers,
the Company or any of their respective Affiliates, officers, directors,
employees, representatives or agents, without the prior written agreement of
Buyer and Sellers, in any case, as to form, content, timing and manner of
distribution or publication; provided, however, that nothing in this Section
shall prevent such parties from discussing such transactions with those Persons
whose approval, agreement or opinion, as the case may be, is required for
consummation of such particular transaction or transactions.
11.12 Further Assurances. Upon the reasonable request of Buyer, each
Seller will on and after the Closing Date execute and deliver to Buyer such
other documents, releases, assignments and other instruments as may be required
to effectuate completely the transfer and assignment to Buyer of, and to vest
fully in Buyer title to, the Shares, and to otherwise carry out the purposes of
this Agreement.
11.13 Severability. If any provision of this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality or enforceability of
the other provisions hereof shall not be affected thereby, and there shall be
deemed substituted for the provision at issue a valid, legal and enforceable
provision as similar as possible to the provision at issue.
11.14 Remedies Cumulative. Unless otherwise specified, the remedies
provided in this Agreement shall be cumulative and shall not preclude the
assertion or exercise of any other rights or remedies available by law, in
equity or otherwise.
-33-
11.15 Entire Understanding. This Agreement and the Related Agreements
set forth the entire agreement and understanding of the parties hereto and
supersede any and all prior agreements, arrangements and understandings among
the parties.
11.16 Jurisdiction of Disputes; Waiver of Jury Trial. In the event any
party to this Agreement commences any litigation, proceeding or other legal
action in connection with or relating to this Agreement, any Related Agreement
or any matters described or contemplated herein or therein, with respect to any
of the matters described or contemplated herein or therein, the parties to this
Agreement hereby (a) agree under all circumstances absolutely and irrevocably to
institute any litigation, proceeding or other legal action in a court of
competent jurisdiction located within the County of New York, State of New York,
whether a state or federal court; (b) agree that in the event of any such
litigation, proceeding or action, such parties will consent and submit to
personal jurisdiction in any such court described in clause (a) of this Section
and to service of process upon them in accordance with the rules and statutes
governing service of process (it being understood that nothing in this Section
shall be deemed to prevent any party from seeking to remove any action to a
federal court in New York, New York); (c) agree to waive to the full extent
permitted by law any objection that they may now or hereafter have to the venue
of any such litigation, proceeding or action in any such court or that any such
litigation, proceeding or action was brought in an inconvenient forum; (d) agree
that nothing herein shall affect the rights of any party to effect service of
process in any other manner permitted by Law. EACH PARTY HERETO WAIVES THE RIGHT
TO A TRIAL BY JURY IN ANY DISPUTE IN CONNECTION WITH OR RELATING TO THIS
-34-
AGREEMENT, ANY RELATED AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN
OR THEREIN, AND AGREE TO TAKE ANY AND ALL ACTION NECESSARY OR APPROPRIATE TO
EFFECT SUCH WAIVER.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first above written.
MIDWEST MERGER MANAGEMENT, LLC
By:_____________________________
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, SECRETARY
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇,
--------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
PANGEA PACIFIC, LLC
--------------------------------
BY:
▇▇▇▇▇ ▇▇▇▇▇▇.▇▇▇, INC.
-------------------------------
BY: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
-▇▇-
