STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is entered into in
Broward County, Florida as of August 29, 2001, among Xxxxxxxx Xxxxxx (the
"Buyer"), and Xxxxx Xxxxxx ("Xxxxxx") and Xxxxx Xxxxxxx ("Xxxxxxx")(Xxxxxx and
Xxxxxxx shall sometimes be referred to individually as the "Seller" and
collectively, as the "Sellers.")
Preliminary Statements
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A. The Sellers collectively own 2,000,000 shares (the "Shares") of
common stock of Xelos, Inc., a Florida corporation ("Xelos").
B. The Sellers wishes to sell 1,904,000 shares of the Company's common
stock to the Buyer.
C. The Buyer desires to acquire from the Sellers, and the Sellers
desires to sell to the Buyer 1,904,000 Shares of the Company's common stock (the
"Shares") on the terms and subject to the conditions set forth in this
Agreement.
Agreement
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In consideration of the preliminary statements and the respective
covenants, representations and warranties contained in this Agreement, the
parties agree as set forth below.
ARTICLE I
Definitions
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Each term which is defined on Schedule 1 to this Agreement shall have
the meaning ascribed thereto on Schedule 1.
ARTICLE II
Purchase of Shares; Consideration
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2.1 Shares to be Purchased. On the terms and subject o the conditions
set forth herein, on the Closing Date, the Sellers shall sell, transfer, assign,
convey and deliver to the Buyer, all of Sellers' right, title and interest in
and to 1,904,000 Shares.
2.2 Consideration. The aggregate purchase price for the 1,904,000
Shares shall be Twenty-Two Thousand Dollars ($22,000.00) (the "Purchase Price").
The Purchase Price shall be paid at the closing by bank check or certified
check, with Eleven Thousand Dollars ($11,000.00) payable to Xxxxx Xxxxxx and
Eleven Thousand Dollars ($11,000.00) payable to Xxxxx Xxxxxxx.
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ARTICLE III
Representations and Warranties of the Buyer
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In order to induce the Sellers to enter into this Agreement and to
consummate the transactions contemplated hereby, the Buyer makes the
representations and warranties set forth below to the Company and the Sellers.
3.1 Organization. Buyer has all requisite right, power and authority to
execute, deliver and perform this Agreement and to consummate the transactions
contemplated hereby.
3.2 Authorization; Enforceability. The execution, delivery and
performance of this Agreement by the Buyer and the consummation by the Buyer of
the transactions contemplated hereby are duly authorized. This Agreement and all
other documents to be executed by the Buyer pursuant to this Agreement have been
and will be duly authorized, executed and delivered by it, and constitute, and
upon execution will constitute, the legal, valid and binding obligations of the
Buyer, as applicable, enforceable against it in accordance with their respective
terms, except to the extent that their enforcement is limited by bankruptcy,
insolvency, reorganization or other laws relating to or affecting the
enforcement of creditors' rights generally and by general principles of equity.
3.3 No Violation or Conflict. The execution, delivery and performance
of this Agreement by the Buyer and the consummation by the Buyer of the
transactions contemplated hereby: (a) do not and will not violate or conflict
with any provision of law or regulation, or any writ, order, judgment or decree
of any court or governmental or regulatory authority and (b) do not and will
not, with or without the passage of time or the giving of notice, result in the
breach of, or constitute a default, cause the acceleration of performance, or
require any consent under, or result in the creation of any lien, charge or
encumbrance upon any property or assets of the Buyer pursuant to any material
instrument or agreement to which the Buyer is a party or by which the Buyer or
any of their respective properties may be bound or affected.
3.4 Brokers. The Buyer has not employed any financial advisor, broker
or finder and has not incurred and will not incur any broker's, finder's,
investment banking or similar fees, commissions or expenses, in connection with
the transactions contemplated by this Agreement.
3.5 Consents and Approvals. No consent, approval, waiver or
authorization of, or registration, qualification or filing with or notice to any
federal, state or local governmental or regulatory authority is required to be
made by the Buyer in connection with the execution, delivery or performance of
this Agreement by the Buyer or the consummation by them of the transactions
contemplated hereby.
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ARTICLE IV
Representations and Warranties of the Sellers
---------------------------------------------
In order to induce the Buyer to enter into this Agreement and to
consummate the transactions contemplated hereby, the Sellers, jointly and
severally, makes the representations and warranties set forth below to the
Buyer.
4.1 Ownership of Shares. Each Seller represents and warrants that it is
the record and beneficial owner of 1,000,000 Shares of the Company's common
stock, free and clear of any and all security interests, encumbrances, and
rights of any kind or nature whatsoever (collectively, the "Encumbrances"), and
upon delivery of the Shares hereunder, the Buyer will acquire title thereto,
free and clear of any and all Encumbrances. The Sellers represents and warrant
that there exist no Securities Rights (as defined herein) with respect to the
Shares. All rights and powers to vote the Shares are held exclusively by the
Sellers. All of the Shares are validly issued, fully paid and non- assessable,
were not issued in violation of the terms of any agreement or other
understanding, and were issued in compliance with all applicable federal and
state securities or "blue sky" laws and regulations. The certificates
representing the Shares to be delivered by the Sellers at the Closing are, and
the signatures and endorsements thereof or stock powers relating thereto will
be, valid and genuine. For the purposes of this section, "Securities Rights"
means with respect to the Company's securities, any options, warrants,
subscription rights, other rights, proxies, puts, calls demands, plans,
commitments, agreements, understandings or arrangements of any kind relating to
such securities (whether issued or unissued) or any other securities convertible
into or exchangeable for an issuer's securities, and includes all written or
unwritten contractual rights relating to the issuance, sale, assignment,
transfer, purchase, redemption, conversion, exchange, registration or voting of
such securities and all rights conferred by the Company's governing documents
and by any applicable agreements.
4.2 Power and Authority: Enforceability. Each Seller has all requisite
right, power and authority to enter into this Agreement and each ancillary
document to be entered into by them pursuant hereto and to sell, transfer and
deliver the Shares owned by them to the Buyer and perform his obligations
hereunder and thereunder, and this Agreement and each such ancillary document
constitutes or, will upon execution thereof constitute, the legal, valid and
binding obligation of the Seller, enforceable against it in accordance with its
terms, except to the extent that enforcement is limited by bankruptcy,
insolvency, reorganization or other laws relating to or affecting the
enforcement of creditors' rights generally and by general principles of equity.
4.3 Organization of the Company. The Company is a corporation duly
organized, validly existing and in good standing under the laws of Florida. To
the knowledge of the Company and the Sellers, neither the ownership nor the
leasing of the Company's properties nor the conduct of its businesses requires
the Company to qualify to transact business as a foreign corporation in any
jurisdiction. The Company has all requisite right, power and authority to (a)
own or lease and operate its properties and assets, (b) conduct its business as
presently conducted, and (c) engage in and consummate the transactions
contemplated hereby.
4.4 Authorization; Enforceability. This Agreement and all other
documents to be executed and delivered by the Company or the Sellers pursuant to
this Agreement have been and will be duly authorized, executed and delivered by
them, as applicable, and constitute, and upon execution will constitute, the
legal, valid and binding obligations of the Company and the Sellers, enforceable
against them, as applicable, in accordance with their respective terms, except
to the
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extent that their enforcement is limited by bankruptcy, insolvency,
reorganization or other laws relating to or affecting the enforcement of
creditors' rights generally and by general principles of equity.
4.5 No Violation or Conflict. The execution, delivery and performance
of this Agreement by the Company and the Sellers and the consummation by the
Company and the Sellers of the transactions contemplated hereby: (a) do not and
will not violate or conflict with any provision of law or regulation, or any
writ, order, judgment or decree of any court or governmental or regulatory
authority, or any provision of the Company's Articles of Incorporation or
Bylaws, or other organizational documents or any license, franchise or permit to
which the Sellers or the Company is a party or by which it or they are bound;
and (b) do not and will not, with or without the passage of time or the giving
of notice, result in the breach of, or constitute a default, cause the
acceleration of performance or require any consent under, or result in the
creation of any lien, charge or encumbrance upon any property or assets of
Sellers or of the Company pursuant to any instrument or agreement to which the
Sellers or the Company is a party or by which the Sellers or the Company or
their respective properties or assets may be bound or affected.
4.6 Consents and Approvals. No consent, approval, waiver or
authorization of, or registration, qualification or filing with or notice to any
federal, state or local governmental or regulatory authority, or any other
Person, is required to be made by the Sellers or the Company in connection with
the execution, delivery or performance of this Agreement by the Company or by
the Sellers or the consummation by the Company or the Sellers of the
transactions contemplated hereby, except as required by the Securities Act of
1933 and the Securities and Exchange Act of 1934, and the Rules and Regulations
promulgated thereunder.
4.7 Brokers. There are no financial advisors, brokers, finders,
investment banking or similar fees, commissions or expenses relating to this
transaction.
4.8 Capitalization. As of the date of this Agreement, the authorized
capital stock of the Company consists solely of 50 million shares of common
stock, of which 2,000,000 are issued and outstanding (the "Issued Shares"),
stock. All of the Issued Shares are free and clear of any and all Encumbrances
(as defined in Section 4.1). The Sellers represents and warrants that there
exist no Securities Rights (as defined in Section 4.1) with respect to the
Issued Shares. All of the Issued Shares are validly issued, fully paid and
non-assessable, were not issued in violation of the terms of any agreement or
other understanding, and were issued in compliance with all applicable federal
and state securities or "blue sky" laws and regulations.
4.9 Absence of Undisclosed Liabilities. The Company has no debt,
obligation or liability, absolute, fixed, contingent or otherwise, of any nature
whatsoever, whether due or to become due, including any unasserted claim,
whether incurred directly or by any predecessor thereto and whether arising out
of any act, omission, transaction, circumstance, sale of goods or services,
state of factors or other condition which could have a material adverse effect
on the Company's financial condition or results of operations, except those
reflected or reserved against on the Company's unaudited financial statements
for the six months ended May 31, 2001 or the audited financial statements for
the fiscal year ended November 30, 2000.
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4.10 Subsidiaries and Investments. The Company has no Investments. The
Company does not have any subsidiaries.
4.11 Financial Statements. True and complete copies of the Company's
audited financial statements for the fiscal year ended November 30 2000 and the
reviewed unaudited financial statements for the quarter ended May 31, 2001
(collectively, the "Financial Statements") which were included in the Company's
filings with the Securities and Exchange Commission. The Financial Statements
(i) were prepared in accordance with the books of account and other financial
records of the Company, (ii) present fairly the financial condition and results
of operations of the Company as of the dates thereof or for the periods covered
thereby, (iii) have been prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a basis consistent with the past
practices of the Company and (iv) include all adjustments (consisting only of
normal recurring accruals) that are necessary for a fair presentation of the
financial condition of the Company and the results of the operations of the
Company, as of the dates thereof or the periods covered thereby (subject to
normal recurring year end adjustments).
4.12 Conduct of Business. The Company has conducted its businesses only
in the ordinary and usual course consistent with past practices and there has
not occurred any material adverse change in its condition (financial or
otherwise), results of operations, properties, assets, liabilities, business or
prospects. Without limiting the generality of the foregoing, except as disclosed
on Schedule 4.12, since May 31, 2001, the Company has not:
(a) declared or paid any dividends or other distribution
(whether in cash, stock or other property) with respect to its capital stock, or
otherwise transferred or agreed to transfer any assets to any of its
shareholders or Affiliates;
(b) suffered any damage, destruction or loss, whether or
not covered by insurance, which has had or could have an adverse effect on any
of its properties, assets, business or prospects;
(c) voluntarily or involuntarily sold, transferred,
surrendered, abandoned or disposed of any of its assets or property rights
(tangible or intangible), other than inventory and minor amounts of personal
property, in the ordinary course of business consistent with past practices at a
price equal to the greater of fair market value or book value;
(d) disclosed any proprietary or confidential information to
any third party;
(e) granted or made any mortgage or pledge or subjected itself
or any of its properties or assets to any Encumbrance, except Permitted
Encumbrances,
(f) created, incurred or assumed any liability or
indebtedness, for borrowed money or entered into any capitalized lease
obligations;
(g) made or committed to make any capital expenditures;
(h) applied any of its assets to the direct or indirect
payment, discharge, satisfaction or reduction of any amount payable directly or
indirectly to or for the benefit of Seller
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or any Affiliate thereof or to the prepayment of any such amounts, or otherwise
entered into or modified any arrangement with any Affiliate of the Company or
the Seller;
(i) written off the value of any inventory or any accounts
receivable or increased the reserves for obsolete, damaged, spoiled or otherwise
not usable inventory or doubtful or uncollectible receivables;
(j) granted any increase in the compensation payable or to
become payable to directors, officers or employees (including, without
limitation, any such increase pursuant to any bonus, pension, profit-sharing or
other plan or commitment or otherwise), other than merit increases to officers
and employees (other than the Seller and their Affiliates) in the ordinary
course of business and consistent with past practices;
(k) altered the manner of keeping its books, accounts or
records, or changed in any manner the accounting practices therein reflected;
(l) accelerated or delayed collection of notes or accounts
receivable in advance of or beyond their regular dates or the dates when the
same could have been collected in the ordinary course of business consistent
with past practices;
(m) allowed its levels of inventory to vary in any material
respect from the levels customarily maintained;
(n) experienced any other event or condition of any character
which has had or could have, individually or in the aggregate, a material
adverse effect on the condition (financial or otherwise), results of operations,
assets, liabilities. properties, business or prospects of the Company, or on
employee, customer or supplier relations;
(o) agreed, whether in writing or otherwise, to do any of the
foregoing.
4.13 Compliance with Laws. The Company has conducted its business in
compliance with all federal, state, local and foreign laws, ordinances,
regulations, judgments, rulings, orders and other requirements applicable to it,
including without limitation those relating to (a) employment, safety and
health, and (b) environmental protection, building, zoning and land use and (c)
federal and state securities laws. No governmental authority or any other Person
has asserted that the Company is not in compliance with any such laws,
ordinances, regulations, judgments, rulings, orders and other requirements. The
Company is not subject to any order, judgment or decree of any court or
governmental authority. There has been no inspection of the Company's businesses
and properties conducted by insurance companies, consultants, or any other
Persons. Each of the Company's filings with the Securities and Exchange
Commission (the "SEC'), as found on the SEC's web site, comply with the
requirements of the Securities Exchange Act of 1934 and do not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading.
4.14 Litigation. The Sellers and the Company represent and warrant that
there are no actions, suits, investigations, claims or proceedings pending or,
to the knowledge of the Company
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or the Sellers, threatened before any court, governmental or regulatory
authority or arbitrator: (a) affecting the Company (as plaintiff or defendant)
which: (i) could, individually or in the aggregate, have a material adverse
effect on the condition (financial or otherwise), results of operations,
properties, assets, liabilities, business or prospects of the Company; or (ii)
without limiting the generality of the foregoing (A) threatens to revoke, vary,
modify or terminate any of the Governmental Authorizations or to declare any of
them invalid in any respect; (B) involves any claim against the Company for
injury to persons, animals or property; or (C) involves a claim for specific
performance, injunctive relief or other equitable remedies; or (b) which
questions the legality or propriety of the transactions contemplated by this
Agreement; and there exist no facts or circumstances known to the Company or the
Sellers creating a reasonable basis for the institution of any such action,
suit, investigation, claim or proceeding described in clauses (a) or (b) above.
No action, suit, investigation, claim or proceeding of the kind described in
clauses (a) and (b) above have been pending, settled or adjudicated during the
three years preceding the date of this Agreement.
4.15 Title to and Condition of Personal Property. The Company has, and
will have at at the Closing, good, valid and marketable title to all of its
Assets, including, without limitation, each item of equipment and other personal
property, tangible and intangible (other than inventory disposed of in the
ordinary course of business consistent with past practices to Persons other than
the Seller or Affiliates of the Company or the Seller) and to each item of
equipment and other personal property, tangible and intangible, acquired is free
and clear of any Encumbrances whatsoever except for Permitted Encumbrances.
Schedule 4.15 will contain a detailed list as of the Closing Date of all
machinery, equipment, vehicles, furniture and other personal property owned by
the Company or used by the Company in the operation of its business.
4.16 Real Property and Intangible Property. The Company does not own
any Real Property or have any obligation to lease any office space or other
facilities. The Company does not own any Intangible Property.
4.17 Governmental Authorizations. Except for its occupational license
to conduct business in Coconut Creek, the Company does not need any other
authorizations, consents, approvals, franchises, licenses and permits required
under applicable law or regulation for the operation of the business of the
Company as presently operated (the "Governmental Authorizations"). To the
knowledge of the Company and the Sellers, all the Governmental Authorizations
have been duly issued or obtained and are in full force and effect, and the
Company is in compliance with the terms of all the Governmental Authorizations.
Neither the Company nor the Sellers has any knowledge of any facts which could
be expected to cause them to believe that the Governmental Authorizations will
not be renewed by the appropriate governmental authorities in the ordinary
course. To the knowledge of the Company and the Sellers, each of the
Governmental Authorizations except as disclosed in Schedule 4.17 may be assigned
and transferred to the Buyer in accordance with this Agreement and will continue
in full force and effect thereafter, in each case without (i) the occurrence of
any breach, default or forfeiture of rights thereunder, or (ii) the consent,
approval, or act of, or the making of any filings with, any Person.
4.18 Other Person Authorizations. Except for its occupational license
in Coconut Creek, the Company does not need any authorizations, consents,
approvals, franchises, licenses and permits
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required by any Person for the operation of the business of the Company as
presently operated (the "Other Person Authorizations").
4.19 Insurance and Employment Matters. The Company does not have any
insurance policies or any employees. There are no employment, consulting,
severance or indemnification arrangements, agreements, or understandings between
the Company and any officer, director, consultant or employee ("Employment
Agreements"). The Company has no material unaccrued liability for any arrears of
wages, bonuses or other employee benefits (including, without limitation,
termination or severance pay, sick pay, personal days and holiday pay) for any
of its employees. The Company does not have any employment benefit plans.
4.20 Tax Matters.
(a) All federal, state, local and foreign Tax Returns and
reports required to be filed with respect to the Company or its businesses or
assets, including, without limitation, any consolidated federal income tax
returns filed on behalf of the affiliated group (as defined in Section 1504(a)
of the Code) of which the Company is a member, and any combined income tax
return filed on behalf of a group of corporations of which the Company is a
member, have been duly and timely filed as required, are true, correct and
complete as filed, and reflect accurately all liability for Taxes for the
periods to which such returns and documents relate, and all amounts showing as
owing thereon have been paid. All Taxes upon the Company or upon its properties,
assets, income or franchises which are due and payable, and all assessments and
taxes upon any group of corporations of which the Company is a member or upon
such group's properties, assets or income, through the Closing Date have been
paid, except as reflected by accruals on the Closing Date balance sheet.
(b) All Taxes collectible or payable by the Company or
relating to or chargeable against any of its assets, revenues or income through
the date of this Agreement were fully collected and paid by such date and all
similar items collectible or payable through the Closing Date will have been
fully collected and paid by that date. No taxation authority has audited the
records of the Company or given notice of its intention to audit the records of
the Company. No claims or deficiencies have been asserted against the Company
with respect to any Taxes which have not been paid or otherwise satisfied and
there exists no reasonable basis for the making of any such claims. The Company
has not waived any restrictions on assessment or collection of Taxes or
consented to the extension of any statute of limitations relating to taxation.
All state sales taxes due and owing to the State of Florida have been paid.
4.21 Agreements and Related Party Transactions. The Company does not
have any verbal or written contracts, agreements or any other types of
understandings with any Person or third parties. Neither any employee, officer,
director of shareholder of the Company or member of his or her immediate family
is indebted to the Company, nor is the Company indebted (or committed to make
loans or extend or guarantee credit) to any of them.
4.22 Absence of Certain Business Practices. Neither the Sellers, any
Affiliate of the Sellers, any agent of the Company, nor any other Person acting
on behalf of or associated with the Company, acting alone or together, has: (a)
received, directly or indirectly, any rebates, payments, commissions,
promotional allowances or any other economic benefits, regardless of their
nature or
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type, from any customer, supplier, employee or agent of any customer or
supplier, official or employee of any government (domestic or foreign) or other
Person; or (b) directly or indirectly, given or agreed to give any money, gift
or similar benefit to any customer, supplier, employee or agent of any customer
or supplier, official or employee of any government (domestic or foreign), or
any political party or candidate for office (domestic or foreign) or other
Person who was, is or may be in a position to help or hinder the business of the
Company (or assist the Company in connection with any actual or proposed
transaction) which (i) may subject the Company to any damage or penalty in any
civil, criminal or governmental litigation or proceeding, (ii) if not given in
the past, may have had an adverse effect on the assets, business, operations or
prospects of the Company or (iii) if not continued in the future, may adversely
affect the assets, business, operations or prospects of the Company.
4.23 Environmental Matters. The Company and the Sellers represent and
warrant that no property owned, leased, used or occupied by the Company
currently or in the past has been used by the Company or any other Person to
manufacture, treat, store, or dispose of any hazardous substance or any other
regulated material, and such property is free of all such substances and
materials. Without limiting the generality of Section 4.23, the Sellers and the
Company, are in compliance with all laws, regulations and other federal, state
or local governmental requirements, and all applicable judgments, orders, writs,
notices, decrees, permits, licenses, approvals, consents or injunctions relating
to the generation, management, handling, transportation, treatment, disposal,
storage, delivery, discharge, release or emission of any waste, pollutant or
toxic, hazardous or other regulated substance (including, without limitation,
asbestos, radioactive material and pesticides and the keeping and posting of all
Material Safety Data Sheets and waste manifests) or to any other actions,
omissions or conditions affecting the environment (the "Environmental Laws").
Without limiting the generality of Section 4.23, the Company has not received
any complaint, notice, order, or citation of any actual or alleged noncompliance
with any Environmental Law, and there is no proceeding, suit or investigation
pending or, to the Company's and the Seller's knowledge, threatened against the
Company with respect to any violation or alleged violation of the Environmental
Laws, and there is no reasonable basis for the institution of any such
proceeding, suit or investigation.
4.24 List of Accounts. Set forth on Schedule 4.24 is: (a) the name and
address of each bank or other institution in which the Company maintains an
account (cash, securities or other) or safe deposit box; (b) the name and phone
number of the Company's contact person at such bank or institution; (c) the
account number of the relevant account and a description of the type of account;
and (d) the persons authorized to transact business in such accounts.
4.25 Certain Claims; Business Generally. There are no claims existing
or, to the best of the Company's and the Sellers' knowledge, threatened under or
pursuant to any warranty, whether express or implied, on products or services
sold by the Company. To the knowledge of the Company and the Sellers, there are
no claims existing and there is no basis for any claim against the Company for
injury to persons, animals or property as a result of the sale, distribution or
manufacture of any product or performance of any service by the Company
including, but not limited to claims arising out of the defective or unsafe
nature of its products or services.
4.26 Disclosure. No representation or warranty of the Company or the
Sellers contained in this Agreement, and no statement, notice, certificate or
other document furnished by or on behalf
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of the Sellers or the Company, the Buyer or their agents pursuant hereto or in
connection with the transactions contemplated hereby, to the knowledge of the
Company and the Sellers, contains or will contain any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein or therein not misleading or omits or will omit to
state a material fact necessary in order to provide a prospective purchaser of
the Company with full and proper information as to the business, assets,
prospects, financial condition or results of operations of the Company.
Documents provided as part of the Company's due diligence include, but are not
limited, to the letter dated December 27, 2000 from the Securities and Exchange
Commission to Xelos, Inc. pertaining to no review of the Company's registration
statement and the documents provided pursuant to the due diligence request dated
August 28, 2001. The Sellers have obtained legal advice from their counsel that
the Company was not required to file an Annual Report on Form 10-KSB for the
year ended November 30, 2000.
4.27 Securities Exchange Commission Filings. The Company has, and
currently is, a Reporting Company as defined under the Securities Exchange Act
of 1934. All required reports have been filed and are current, and all
statements made within the reports are true and correct as of the date made,
with any and all such changes subsequently filed in such a manner as required by
the Securities and Exchange Commission.
4.28 No Material Adverse Change. Since the date of the Balance Sheet,
there has not been any material adverse change in the business, operations,
properties, prospects, assets, or condition of any Acquired Company, and no
event has occurred or circumstance exists that may result in such a material
adverse change.
ARTICLE V
Additional Agreements
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5.1 Certain Tax Returns and Indemnity. Any Tax (including, without
limitation income tax, a sales Tax, use Tax or documentary stamp Tax) directly
attributable to the sale or transfer of the Shares shall be paid by the Sellers.
The Buyer, the Sellers and the Company agree to sign and deliver in a timely
fashion such certificates or forms as may be necessary or appropriate to
establish an exemption from (or otherwise reduce), or make a report with respect
to, such Taxes.
5.2 Survival. The representations and warranties of the parties hereto
contained in this Agreement or in any exhibit or schedule to this Agreement
shall survive the Closing Date for the latter of five (5) years or the
expiration of the applicable statute of limitation on an action.
5.3 Indemnification.
(a) The Sellers, jointly and severally, agree to indemnify and
hold harmless the Buyer and any of its Successors (as defined in Section 7.3)
from, against and in respect of, the full amount of any and all liabilities,
damages, claims, deficiencies, fines, assessments, losses, taxes, penalties,
interest, costs and expenses, including, without limitation, reasonable fees and
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disbursements of counsel (collectively, the "Losses"), arising from, relating
to, caused from (whether in whole or in part), in connection with, or incident
to:
(i) any breach, inaccuracy or violation of any of the
representations, warranties, covenants or agreements of the Company or the
Sellers contained in this Agreement, in any schedule or exhibit to this
Agreement or in any document or certificate delivered by them at or prior to the
Closing;
(ii) any and all Taxes, due or claimed to be due
(including, without limitation, Taxes on properties, income, franchises,
licenses, sales, services and payrolls) by any federal, state, local and foreign
authority applicable to the Company and/or the Shares in respect of or
attributable to any and all periods ending on or before the Closing Date; and
(iii) any and all actions, suits, proceedings,
demands, assessments or judgments, costs and expenses incidental to any of the
foregoing.
(b) Indemnity Procedure. The Buyer or its Successor shall,
with respect to claims asserted against such party by any third party, give
written notice to the Sellers of any liability which might give rise to a claim
for indemnity under this Agreement within 60 business days of the receipt of any
written claim from any such third party, and with respect to other matters for
which the Buyer may seek indemnification, give prompt written notice to the
Sellers of any liability which might give rise to a claim for indemnity.
As to any claim, action, suit or proceeding by a third party,
the Sellers shall be entitled, together with the Buyer, to participate in the
defense, compromise or settlement of any such matter through the Sellers' own
attorneys and at their own expense. The Buyer shall provide such cooperation and
such access to its books, records and properties as the Sellers shall reasonably
request with respect to such matter; and the parties hereto agree to cooperate
with each other in order to ensure the proper and adequate defense thereof, it
being understood that the Sellers shall control any such defense.
The Sellers shall not make any settlement of any claims
without the written consent of the Buyer, which consent shall not be
unreasonably withheld. Without limiting the generality of the foregoing, it
shall not be deemed unreasonable to withhold consent to a settlement involving
injunctive or other equitable relief against the Buyer or its assets, employees
or business.
With regard to claims of third parties for which
indemnification is payable hereunder, such indemnification shall be paid by the
Sellers upon the earliest to occur of: (i) the entry of a judgment against the
Buyer and the expiration of any applicable appeal period, or if earlier, five
days prior to the date that the judgment creditor has the right to execute the
judgment or if earlier the date that the Buyer must post any bond with respect
to any judgment or other judicial ruling; (ii) the entry of an unappealable
judgment or final appellate decision against the Buyer; (iii) a settlement of
the claim; or (iv) with respect to indemnities for Tax Liabilities, upon the
issuance of any resolution by a taxation authority. Notwithstanding the
foregoing, expenses of counsel to the Buyer shall be reimbursed on a current
basis by the Sellers. With regard to other claims for which indemnification
11
is payable hereunder, such indemnification shall be paid within ten (10)
business days after demand by the Buyer.
(c) Indemnification Payments Net of Taxes. All sums payable by
the Sellers as indemnification under this Section 6.3 shall be paid free and
clear of all deductions or withholdings (including any taxes or governmental
charges of any nature) unless the deduction or withholding is required by law,
in which event or in the event the Buyer shall incur any liability for tax
chargeable or assessable in respect of any such payment, the Sellers shall pay
such additional amounts as shall be required to cause the net amount received by
the Buyer to equal the full amount which would otherwise have been received by
it had no such deduction or withholding been made or no such liability for taxes
been incurred.
(d) Set-Off. The Buyer shall be entitled, at their discretion
and in addition to any other rights and remedies they may have in law and in
equity, to set off at any time and from time to time, the amount of any losses
against any obligations of the Buyer to the Company or Seller under this
Agreement or under any of the agreements entered into pursuant hereto.
5.4 Confidential Treatment of Information. From and after the date
hereof, the parties hereto shall and shall cause their representatives to hold
in confidence this Agreement (including the Exhibits and Schedules hereto), all
matters relating hereto and all data and information obtained with respect to
the other parties or their business, except such data or information as is
published or is a matter of public record, or as compelled by legal process. In
the event this Agreement is terminated pursuant to the terms contained herein,
each party shall promptly return to the other(s) any statements, documents,
schedules, exhibits or other written information obtained from them in
connection with this Agreement, and shall not retain any copies thereof.
5.5 Publicity. The parties agree to cooperate reasonably in issuing any
press release or other public announcement or making any governmental filing
concerning this Agreement or the transactions contemplated hereby. Nothing
contained herein shall prevent any party from at any time furnishing any
information to any governmental authority which it is by law or otherwise so
obligated to disclose or from making any disclosure which its counsel deems
necessary or advisable in order to fulfill such party's disclosure obligations
under applicable law.
ARTICLE VI
Closing Conditions Precedent; Termination
-----------------------------------------
6.1 Closing. The consummation of the sale and purchase and the
transfers and deliveries to be made pursuant to this Agreement (the "Closing")
shall take place at 5:00 p.m. local time at the offices of _____________________
at the date that this Agreement is signed (the "Closing Date"), or at such other
place, time or date as may be agreed to by the parties. All proceedings to be
taken and all documents to be executed at the Closing shall be deemed to have
been taken, delivered and executed simultaneously, and no proceeding shall be
deemed taken nor documents deemed executed or delivered until all have been
taken, delivered and executed.
(a) At the Closing, the Company and the Seller shall deliver
to the Buyer:
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(i) Stock certificates for of the shares of capital
stock of the Company being surrendered hereunder, duly endorsed or with stock
powers attached in blank.
(ii) All corporate records of the Company, including
without limitation corporate minute books, stock books, stock transfer books,
corporate seals, financial statements, financial records (including the general
ledger) and such other corporate books and records as may reasonably be
requested by the Buyer and its counsel.
(iii) Copy of the Articles of Incorporation of the
Company and a copy of the by-laws of the Company certified on the Closing Date
by the secretary or an assistant secretary of the Company;
(iv) Certificate of good standing of the Company
issued as of a recent date by the Secretary of State of Florida;
(v) Incumbency certificates, duly executed and dated
the Closing Date, with respect to the officers of the Company executing this
Agreement;
(vi) Copies of the resolutions of the Board of
Directors of the Company authorizing the execution, delivery and performance of
this Agreement and the transactions contemplated hereby, certified by the
secretary or an assistant secretary of the Company as of the Closing Date;
(vii) Executed Resignations of the officers and
directors of the Company as of the Closing Date;
(viii) Such other assignments and other instruments
of transfer or conveyance as the Buyer may reasonably request or as may be
otherwise necessary to evidence and effect the sale, assignment, transfer,
conveyance and delivery of the Shares to the Buyer; and
(ix) All accounting work papers, tax returns and all
other relevant documents relating to the Company.
In addition to the above deliveries, the Company and the
Sellers shall take all steps and actions as the Buyer may reasonably request or
as may otherwise be necessary to put the Buyer in actual possession or control
of the Shares.
(b) At the Closing, the Buyer shall deliver to the Company
and/or the Seller:
(i) A bank or cashier's check for the amount of the
Purchase Price.
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ARTICLE VII
Miscellaneous
-------------
7.1 Notices. Any notice, request, demand or other communication
required or permitted under this Agreement shall be in writing and shall be
delivered personally or sent by prepaid overnight courier for next business day
delivery to the parties at the addresses set forth below their names below (or
at such other addresses as shall be specified by the parties by like notice).
If to the Buyer:
---------------
Xxxxxxxx Xxxxxx
Xxxxxx Investments, Inc.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, XX 00000
Tel: (000) 000-0000
If to the Sellers:
-----------------
Xxxxx Xxxxxx
Xxxxx Xxxxxxx
0000 Xxxxx Xxxx Xxxxxx, #000
Xxxxxxx Xxxxx, XX 00000
Tel:
Such notices, demands, claims and other communications shall be deemed given
when actually received or in the case of delivery by overnight service with
guaranteed next business day delivery, the next business day or the day
designated for delivery.
7.2 Entire Agreement. This Agreement and the exhibits and schedules to
this Agreement contain every obligation and understanding among the parties
relating to the subject matter hereof and merge all prior discussions,
negotiations and agreements, if any, among them, and none of the parties shall
be bound by any representations, warranties, covenants, or other understandings,
other than as expressly provided or referred to herein.
7.3 Assignment. This Buyer may assign this Agreement to another
individual or business entity (the "Successor") and it is contemplated that the
Buyer will assign this Agreement. The Sellers and the Company agree that any
Successor of the Buyer shall have all rights, obligations and duties of the
Buyer under this Agreement, including but not limited to all rights of
indemnification as described in this Agreement, and is an intended third-party
beneficiary of this Agreement. This Agreement, however, may not be assigned by
Sellers, without the written consent of each Buyer because the Buyer views the
property under this Agreement as unique and there is no comparable investment
alternative that may compensate the Buyer. Subject to the preceding sentence,
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors, heirs, personal representatives, legal
representatives, and permitted assigns.
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7.4 Waiver and Amendment. Any representation, warranty, covenant, term
or condition of this Agreement which may legally be waived, may be waived, or
the time of performance thereof extended, at any time by the party hereto
entitled to the benefit thereof, and any term, condition or covenant hereof may
be amended by the parties hereto at any time. Any such waiver, extension or
amendment shall be evidenced by an instrument in writing executed on behalf of
the appropriate party by a person who has been authorized by such party to
execute waivers, extensions or amendments on its behalf. No waiver by any party
hereto, whether express or implied, of its rights under any provision of this
Agreement shall constitute a waiver of such party's rights under such Provisions
at any other time or a waiver of such party's rights under any other provision
of this Agreement. No failure by any party hereto to take any action against any
breach of this Agreement or default by another party shall constitute a waiver
of the former party's right to enforce any provision of this Agreement or to
take action against such breach or default or any subsequent breach or default
by such other party.
7.5 Severability. In the event that any one or more of the provisions
contained in this Agreement shall be declared invalid, void or unenforceable,
the remainder of the provisions of this Agreement shall remain in full force and
effect, and such invalid, void or unenforceable provision shall be interpreted
as closely as possible to the manner in which it was written.
7.6 Expenses. Each party agrees to pay, without right of reimbursement
from any other party, the costs incurred by it incident to the performance of
its obligations under this Agreement and the consummation of the transactions
contemplated hereby, including, without limitation, costs incident to the
preparation of this Agreement, and the fees and disbursements of counsel,
accountants and consultants employed by such party in connection herewith.
7.7 Headings. Article titles and headings to sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement. The schedules and
exhibits referred to herein shall be construed with and as an integral part of
this Agreement to the same extent as if they were set forth verbatim herein. The
specification of any dollar amount in the representations or warranties
contained in this Agreement or the inclusion of any specific item in any
schedule hereto is not intended to imply that such amounts, or higher or lower
amounts, or the items so included or other items, are or are not material, and
neither party shall use the fact of the setting of such amounts or the inclusion
of any such item in any dispute or controversy between the parties as to whether
any obligation, item or matter not described herein or included in a Schedule is
or is not material for purposes of this Agreement.
7.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Any facsimile copy of a
manually executed original shall be deemed a manually executed original.
7.9 Litigation; Prevailing Party. In the event of any litigation with
regard to this Agreement, the prevailing party shall be entitled to receive from
the non-prevailing party and the non-prevailing party shall pay upon demand all
reasonable attorneys fees and legal expenses for the prevailing party.
15
7.10 Injunctive Relief. It is possible that remedies at law may be
inadequate and, therefore, the parties hereto shall be entitled to equitable
relief including, without limitation, injunctive relief, specific performance or
other equitable remedies in addition to all other remedies provided hereunder or
available to the parties hereto at law or in equity.
7.11 Governing Law and Venue. This Agreement has been entered into and
shall be construed and enforced in accordance with the laws of the State of
Florida without reference to the choice of law principles thereof. This
Agreement shall be subject to the exclusive jurisdiction of the courts of the
State of Florida located in Broward County, Florida or the United States
District Court for the Southern District of Florida. The parties to this
Agreement agree that any breach of any term or condition of this Agreement shall
be deemed to be a breach occurring in the State of Florida by virtue of a
failure to perform an act required to be performed in the State of Florida and
irrevocably and expressly agree to submit to the jurisdiction of the courts of
the State of Florida for the purpose of resolving any disputes among the parties
relating to this Agreement or the transactions contemplated hereby. The parties
irrevocably waive, to the fullest extent permitted by law, any objection which
they may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement, or any judgment entered
by any court in respect hereof brought in Broward County, Florida, and further
irrevocably waive any claim that any suit, action or proceeding brought in
Broward County, Florida, has been brought in an inconvenient forum.
7.12 Duty of Cooperation. The parties agree to execute and deliver all
such further documents, agreements, and instruments and take such other and
further action as may be necessary or appropriate to carry out the purposes and
intent of this Agreement.
7.13 Confidentiality. Between the date of this Agreement and the
Closing Date, Buyer and Sellers will maintain in confidence, and will cause the
directors, officers, employees, agents, and advisors of Buyer and the Acquired
Companies to maintain in confidence, and not use to the detriment of another
party or an Acquired Company, any written, oral, or other information obtained
in confidence from or written information stamped "confidential" when originally
furnished by another party or an Acquired Company in connection with this
Agreement or the Contemplated Transactions, unless (a) such information is
already known to such party or to others not bound by a duty of confidentiality
or such information becomes publicly available through no fault of such party,
(b) the use of such information is necessary or appropriate in making any filing
or obtaining any consent or approval required for the consummation of the
Contemplated Transactions, or (c) the furnishing or use of such information is
required by or necessary or appropriate in connection with legal proceedings.
If the Contemplated Transactions are not consummated, each party will return or
destroy as much of such written information as the other party may reasonably
request. Whether or not the Closing takes place, Sellers waive, and will upon
Buyer's request cause the Acquired Companies to waive, any cause of action,
right, or claim arising out of the access of Buyer or its representatives to any
trade secrets or other confidential information of the Acquired Companies except
for the intentional competitive misuse by Buyer of such trade secrets or
confidential information.
7.14 Remedies Cumulative. No remedy made available by any of the
provisions of this Agreement is intended to be exclusive of any other remedy,
and each and every remedy shall be
16
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity.
7.15 Participation of Parties; Construction. The parties hereto
acknowledge that this Agreement and all matters contemplated herein, have been
negotiated among all parties hereto and their respective legal counsel and that
all such parties have participated in the drafting and preparation of this
Agreement from the commencement of negotiations at all times through the
execution hereof. This Agreement shall be construed and interpreted without
regard to any presumption or other rule or interpretation against the party who
may have had primary responsibility for drafting this Agreement.
IN WITNESS WHEREOF, the parties hereto have each executed and delivered
this Agreement as of the day and year first above written.
BUYER:
/s/ Xxxxxxxx Xxxxxx
----------------------------------------------
Xxxxxxxx Xxxxxx
SELLERS:
/s/ Xxxxx Xxxxxx
----------------------------------------------
Xxxxx Xxxxxx
/s/ Xxxxx Xxxxxxx
----------------------------------------------
Xxxxx Xxxxxxx
COMPANY:
XELOS, INC.
By: /s/ Xxxxx Xxxxxx
-------------------------------------------
Xxxxx Xxxxxx, President
17
SCHEDULE 1
----------
DEFINITIONS
-----------
In addition to terms defined elsewhere in this Agreement, the following
terms when used in this Agreement shall have the meanings indicated below:
"Agreement" means this Stock Purchase Agreement together with all
exhibits and schedules referred to herein.
"Closing" has the meaning specified in Section 7.1.
"Closing Date" has the meaning specified in Section 7.1.
"Encumbrance" means any lien, claim, charge, security interest,
mortgage, pledge, easement, conditional sale or other title retention agreement,
defect in title, covenant or other encumbrance or restriction of any kind.
"Environmental Laws" has the meaning specified in Section 4.28.
"Governmental Authorizations" has the meaning specified in Section
4.19.
"Intangible Property" has the meaning specified in Section 4.18.
"Investment" means, with respect to any Person, any advances, loans or
extensions of credit to any other Person, any purchases or commitments to
purchase any stock, bonds, notes, debentures or other securities of any other
Person, and any other investment in any other Person, including partnerships,
joint ventures or other similar arrangement with any Person.
"Knowledge"or "known" means, with respect to any representation or
warranty or other statement in this Agreement qualified by the knowledge of any
party, that such party has made a due and diligent investigation as to the
matters that are the subject of such representation, warranty or other
statement. Where reference is made to the knowledge of the Sellers or the
Company, such reference shall be deemed to include the directors, officers and
managerial employees of the Company, all of whom shall be deemed to have
conducted the investigation required by this definition.
"Losses" has the meaning specified in Section 6.3(a).
"Material Agreements" has the meaning specified in Section 4.25.
"Other Person Authorizations" has the meaning specified in Section
4.20.
"Permitted Encumbrances" means liens for taxes which are not yet due
and payable.
"Person" means any natural person, corporation, unincorporated
organization, partnership, association, joint stock company, joint venture,
trust or government, or any agency or political subdivision of any government,
or any other entity.
"Purchase Price" has the meaning specified in Section 2.2.
18
"Related Party" has the meaning specified in Section 4.26.
"Rights" has the meaning specified in Section 4.18.
"Subsidiary" of any Person means any Person, whether or not
capitalized, in which such Person owns, directly or indirectly, an equity
interest of 50% or more, or any Person which may be controlled, directly or
indirectly, by such Person, whether through the ownership of voting securities,
by contract, or otherwise.
"Tax" means any federal, state, local or foreign income, gross
receipts, property, sales, use, transfer, gains, license, excise, employment,
payroll, withholding or minimum tax, or any other tax custom, duty, governmental
fee or other like assessment or charge of any kind whatsoever, together with any
interest or any penalty, addition to tax or additional amount imposed by any
foreign, federal, state, local or other governmental authority or regulatory
body.
"Tax Return" means any return, report or similar statement required to
be filed with respect to any Taxes (including any attached schedules),
including, without limitation, any information return, claim for refund, amended
return and declaration of estimated Tax.
19
