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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into this 4th of
June, 1998, by and among ROSE INTERNATIONAL, INC., a Delaware corporation
(hereinafter referred to as "Buyer"); and XXXXXXX XXXXXX II, XXXXXX XXXXXXX and
J. XXXXXX XXXXXXX (hereinafter collectively referred to as "Seller"), being all
of the shareholders of THE ACCORD GROUP, INC., a Delaware corporation (hereafter
referred to as "Company").
WHEREAS, Seller is the owner of record and beneficially owns Eight
Million (8,000,000) shares of the issued and outstanding shares of Common Stock
of the Company (the "Shares"); and
WHEREAS, Seller desires to sell all of the Shares to Buyer, and Buyer
desires to purchase the Shares, upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, and subject to the
accuracy of the representations and warranties of the parties, the parties
hereto agree as follows:
I.
SALE AND PURCHASE OF THE SHARES
1.1 SALE AND PURCHASE. Subject to the terms and conditions hereof, at
the Closing (as defined in paragraph 1.2 below), Seller agrees to sell, assign,
transfer, convey and deliver to Buyer, and Buyer agrees to purchase from Seller,
the Shares listed in Exhibit "A", attached hereto, which together constitute
82.01% of the issued and outstanding Shares of Common Stock of the Company.
1.2 CLOSING. The purchase shall be consummated at a closing ("Closing")
to take place at 10:00 o'clock a.m., at the offices of Buyer's counsel on June
3, 1998 ("Closing Date").
1.3 PURCHASE PRICE. The aggregate purchase price ("Purchase Price") for
the Shares shall be Eight Million, (8,000,000) shares of Common Stock of the
Buyer ("Buyer's Shares"). This portion of the Purchase Price shall be paid at
Closing, by issuance and delivery of Buyer's Shares to Seller against receipt of
certificates representing the Shares, duly endorsed for transfer to Buyer.
1.4 ALLOCATION OF SHARES. All shares of stock of Buyer to be issued to
Seller pursuant to this Agreement shall be issued to the respective Sellers in
proportion to their respective ownership of stock of the Company as described in
Exhibit "A" hereto.
1.5 OTHER AGREEMENTS. At the Closing, the indicated parties shall
execute and deliver the following additional agreements in substantially the
form attached hereto:
(a) Stock certificates representing all of the Shares, duly
endorsed to Buyer and in blank or assignments separate from the
certificates, transferring the Shares from Seller to Buyer.
(b) Indemnity Agreement between Buyer and Xxxxxxx X. Xxxxx and
Xxxx X. Xxxx attached hereto as Exhibit "B".
1.6 BASIC AGREEMENTS AND TRANSACTIONS DEFINED. This Agreement and other
agreements listed in paragraph 1.5, are sometimes referred to as the "Basic
Agreement". The transactions contemplated by the Basic Agreement are sometimes
referred to as the "Transactions".
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II.
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represent and
warrant to Buyer as follows:
(a) TITLE TO THE SHARES. At Closing, Seller shall own of
record and beneficially the number of the Shares listed in Exhibit "A",
of the Company, free and clear of all liens, encumbrances, pledges,
claims, options, charges and assessments of any nature whatsoever, with
full right and lawful authority to transfer the Shares to Buyer. No
person has any preemptive rights or rights of first refusal with
respect to any of the Shares. There exists no voting agreement, voting
trust, or outstanding proxy with respect to any of the Shares. There
are no outstanding rights, options, warrants, calls, commitments, or
any other agreements of any character, whether oral or written, with
respect to the Shares.
(b) ORGANIZATION. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of
the state of Delaware. The Company has all requisite corporate power
and authority to own, lease and operate its properties and to carry on
its business. The Company is duly qualified and in good standing as a
foreign corporation in each jurisdiction where its ownership of
property or operation of its business requires qualification.
(c) AUTHORIZED CAPITALIZATION. The authorized capitalization
of the Company consists of Two Million (2,000,000) shares of Common
Stock, of which Nine Million Seven Hundred Fifty-Five Thousand
(9,755,000) shares have been issued and are outstanding. The Shares
have been duly authorized, validly issued, are fully paid and
nonassessable with no personal liability attaching to the ownership
thereof and were offered, issued, sold and delivered by the Company in
compliance with all applicable state and federal laws. Except as set
forth in Exhibit "C" attached hereto, the Company does not have any
outstanding rights, options, warrants, calls, commitments, conversion
or any other agreements of any character, whether oral or written,
obligating it to issue any shares of its capital stock, whether
authorized or not. Except as set forth in Exhibit "E" attached hereto,
the Company is not a party to and are not bound by any agreement,
contract, arrangement or understanding, whether oral or written, giving
any person or entity any interest in, or any right to share,
participate in or receive any portion of, the Company's income, profits
or assets, or obligating the Company to distribute any portion of its
income, profits or assets.
(d) AUTHORITY. Seller has full power and lawful authority to
execute and deliver the Basic Agreements and to consummate and perform
the Transactions contemplated thereby. The Basic Agreements constitute
(or shall, upon execution, constitute) valid and legally binding
obligations upon Seller, enforceable in accordance with their terms.
Neither the execution and delivery of the Basic Agreements by Seller,
nor the consummation and performance of the Transactions contemplated
thereby, conflicts with, requires the consent, waiver or approval of,
results in a breach of or default under, or gives to others any
interest or right of termination, cancellation or acceleration in or
with respect to, any agreement by which Seller or the Company is a
party or by which Seller or the Company or any of their respective
properties or assets are bound or affected.
(e) COMPANY FINANCIAL STATEMENTS. The Company Financial
Statements are complete, were prepared in accordance with generally
accepted accounting principles applied on a basis consistent with prior
periods and fairly present the financial position of the Company as of
March 31, 1998.
(f) NO UNDISCLOSED LIABILITIES. Except as set forth in the
Company Financial Statements previously delivered to Buyer and as set
forth on Exhibit "D", Seller is not aware of any liabilities for which
the Company is liable or will become liable in the future.
(g) TAXES. The Company has filed all federal, state, local tax
and other returns and reports which were required to be filed with
respect to all taxes, levies, imposts, duties, licenses and
registration
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fees, charges or withholdings of every nature whatsoever ("Taxes"), and
their exists a substantial basis in law and fact for all positions
taken in such reports. No waivers of periods of limitation are in
effect with respect to any taxes arising from and attributable to the
ownership of properties or operations of the business of the Company.
(h) PROPERTIES. The Company has good and marketable title to
all its personal property, equipment, processes, patents, copyrights,
trademarks, franchises, licenses and other properties and assets
(except for items leased or licensed to the Company), including all
property reflected in the Company Financial Statements (except for
assets reflected therein which have been sold in the normal course of
its business where the proceeds from such sale or other disposition
have been properly accounted for in the financial statements of the
Company), in each case free and clear of all liens, claims and
encumbrances of every kind and character, except as set forth in
Exhibit "E". The Company has no ownership interest in any real
property. The assets and properties owned, operated or leased by the
Company and used in its business are in good operating condition,
reasonable wear and tear excepted, and suitable for the uses for which
intended.
(i) BOOKS AND RECORDS. The books and records of the Company
are complete and correct in all material respects, have been maintained
in accordance with good business practices and accurately reflect in
all material respects the business, financial condition and results of
operations of the Company as set forth in the Company Financial
Statements.
(j) INSURANCE. Exhibit "F" contains an accurate and complete
list and brief description of all performance bonds and policies of
insurance, including fire and extended coverage, general liability,
workers compensation, products liability, property, and other forms of
insurance or indemnity bonds held by the Company. The Company is not in
default with respect to any provisions of any such policy or indemnity
bond and has not failed to give any notice or present any claim
thereunder in due and timely fashion. All policies of insurance and
bonds are: (1) in full force and effect; (2) are sufficient for
compliance by the Company with all requirements of law and of all
agreements and instruments to which the Company is a party; (3) are
valid, outstanding and enforceable; (4) provide adequate insurance
coverage for the assets, business and operations of the Company in
amounts at least equal to customary coverage in the Company's industry;
(5) will remain in full force and effect through the Closing; and (6)
will not be affected by, and will not terminate or lapse by reason of,
the transactions contemplated by this Agreement.
(k) TRANSACTIONS WITH CERTAIN PERSONS. Except as disclosed in
Exhibit "G", the Company has no outstanding agreement, understanding,
contract, lease, commitment, loan or other arrangement with any
officer, director or shareholder of the Company or any relative of any
such person, or any corporation or other entity in which such person
owns a beneficial interest.
(l) MATERIAL CONTRACTS. Except as set forth in Exhibit "H",
the Company has no purchase, sale, commitment, or other contract, the
breach or termination of which would have a materially adverse effect
on the business, financial condition, results of operations, assets,
liabilities, or prospects of the Company.
(m) EMPLOYMENT MATTERS. Exhibit "I" contains a list of all
officers, their base salaries, accrued vacation pay, sick pay, and
severance pay through May 31, 1998. Except as set forth in Exhibit "J",
the Company is not a party to any employment agreement, or any pension,
profit sharing, retirement or other deferred compensation plan or
agreement. The Company has not incurred any unfunded deficiency or
liability within the meaning of the Employee Retirement Income Security
Act of 1974 ("ERISA"), has not incurred any liability to the Pension
Benefit Guaranty Corporation established under ERISA in connection with
any employee benefit plan and has no outstanding obligations or
liabilities under any employee benefit plan. The Company has not been a
party to a "prohibited transaction," which would subject the Company to
any tax or penalty. There is no collective bargaining agreement or
negotiations therefor, labor grievance
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or arbitration proceeding against the Company pending or threatened,
and to the knowledge of the Seller, there are no union organizing
activities currently pending or threatened against or involving the
Company.
(n) AUTHORIZATIONS. The Company has no licenses, permits,
approvals and other authorizations from any governmental agencies and
any other entities that are necessary for the conduct of its business,
except as set forth in Exhibit "K" which contains a list of all
licenses, permits, approvals, and other authorizations, as well as a
list of all copyrights, patents, trademarks, tradenames, servicemarks,
franchises, licenses and other permits, each of which is valid and in
full force and effect.
(o) NO POWERS OF ATTORNEY. The Company has no powers of
attorney or similar authorizations outstanding.
(p) COMPLIANCE WITH LAWS. The Company is not in violation of
any federal, state, local or other law, ordinance, rule or regulation
applicable to its business, and have not received any actual or
threatened complaint, citation or notice of violation or investigation
from any governmental authority.
(q) COMPLIANCE WITH ENVIRONMENTAL LAWS. The Company is in
compliance with all applicable pollution control and environmental
laws, rules and regulations. The Company has no environmental licenses,
permits and other authorizations held by the Company relative to
compliance with environmental laws, rules and regulations.
(r) NO LITIGATION. There are no actions, suits, claims,
complaints or proceedings pending or threatened against the Company, at
law or in equity, or before or by any governmental department,
commission, court, board, bureau, agency or instrumentality; and there
are no facts which would provide a valid basis for any such action,
suit or proceeding. There are no orders, judgments or decrees of any
governmental authority outstanding which specifically apply to the
Company or any of its assets.
(s) VALIDITY. All contracts, agreements, leases and licenses
to which the Company is a party or by which it or any of its properties
or assets are bound or affected, are valid and in full force and
effect; and no breach or default exists, or upon the giving of notice
or lapse of time, or both, would exist, on the part of the Company or
by any other party thereto.
(t) NO ADVERSE CHANGES. Since May 31, 1998, there have been no
actual or threatened developments of a nature that is materially
adverse to or involves any materially adverse effect upon the business,
financial condition, results of operations, assets, liabilities, or
prospects of the Company.
(u) FEES. All negotiations relating to the Basic Agreements
and the Transactions have been conducted by the Seller in such a manner
as not to give rise to any valid claim for any finder's fees, brokerage
commission, financial advisory fee or related expense or other like
payment for which the Company or Buyer are or may be liable.
(v) FULL DISCLOSURE. All statements of Seller contained in the
Basic Agreements and in any other written documents delivered by or on
behalf of the Company or Seller to Buyer are true and correct in all
material respects and do not omit any material fact necessary to make
the statements contained therein not misleading in light of the
circumstances under which they were made. There are no facts known to
Seller which could have a materially adversely affect upon the
business, financial condition, results of operations, assets,
liabilities, or prospects of the Company, which have not been disclosed
to Buyer in the Basic Agreements.
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2.2 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Seller as follows:
(a) ORGANIZATION. Buyer is a corporation duly incorporated,
validly existing and in good standing under the laws of the state of
Delaware. Buyer has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business. Buyer is
duly qualified and in good standing as a foreign corporation in each
jurisdiction where its ownership of property or operation of its
business requires qualification.
(b) AUTHORIZED CAPITALIZATION. The authorized capitalization
of the Company consists of Twenty-Five Million (25,000,000) shares of
Common Stock, of which Seven Million Five Hundred Twenty-Five Thousand
(7,525,000) shares have been issued and are outstanding. The Shares
have been duly authorized, validly issued, are fully paid and
nonassessable with no personal liability attaching to the ownership
thereof and were offered, issued, sold and delivered by the Company in
compliance with all applicable state and federal laws. Except as set
forth in Exhibit "L" attached hereto, the Company does not have any
outstanding rights, options, warrants, calls, commitments, conversion
or any other agreements of any character, whether oral or written,
obligating it to issue any shares of its capital stock, whether
authorized or not.
(c) AUTHORITY. Buyer has full power and lawful authority to
execute and deliver the Basic Agreements and to consummate and perform
the Transactions contemplated thereby. The Basic Agreements constitute
(or shall, upon execution, constitute) valid and legally binding
obligations upon Buyer, enforceable in accordance with their terms.
Neither the execution and delivery of the Basic Agreements by Buyer,
nor the consummation and performance of the Transactions contemplated
thereby, conflicts with, requires the consent, waiver or approval of,
results in a breach of or default under, or gives to others any
interest or right of termination, cancellation or acceleration in or
with respect to, any agreement by which Buyer is a party or by which
Buyer or any of its properties or assets are bound or affected.
(d) COMPANY FINANCIAL STATEMENTS. The Company Financial
Statements are complete, were prepared in accordance with generally
accepted accounting principles applied on a basis consistent with prior
periods and fairly present the financial position of the Company as of
March 31, 1998.
(e) NO UNDISCLOSED LIABILITIES. Except as set forth in the
Company Financial Statements previously delivered to Buyer and as set
forth on Exhibit "M", Seller is not aware of any liabilities for which
the Company is liable or will become liable in the future.
(f) BOOKS AND RECORDS. The books and records of the Company
are complete and correct in all material respects, have been maintained
in accordance with good business practices and accurately reflect in
all material respects the business, financial condition and results of
operations of the Company as set forth in the Company Financial
Statements.
(g) NO LITIGATION. Except as set forth in Exhibit "N", there
are no actions, suits, claims, complaints or proceedings pending or
threatened against the Company, at law or in equity, or before or by
any governmental department, commission, court, board, bureau, agency
or instrumentality; and there are no facts which would provide a valid
basis for any such action, suit or proceeding. There are no orders,
judgments or decrees of any governmental authority outstanding which
specifically apply to the Company or any of its assets.
(h) FEES. All negotiations relating to the Basic Agreements
and the Transactions have been conducted by the Seller in such a manner
as not to give rise to any valid claim for any finder's fees, brokerage
commission, financial advisory fee or related expense or other like
payment for which the Company or Buyer are or may be liable.
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(i) INVESTMENT INTENT. Buyer is acquiring the Shares for its
own account, for investment purposes only, and not with a view to the
sale or distribution of any part thereof, and Buyer has no present
intention of selling, granting participation in, or otherwise
distributing the same. Buyer understands the specific risks related to
an investment in the Shares, especially as it relates to the financial
performance of the Company.
III.
COVENANTS
3.1 COVENANTS OF SELLER. Seller covenants and agrees that from the date
hereof to the Closing without the prior written consent of Buyer:
(a) ORDINARY COURSE OF BUSINESS. Seller will operate the
business of the Company only in the ordinary course and will use their
best efforts to preserve the Company's business, organization, goodwill
and relationships with persons having business dealings with them.
(b) MAINTAIN PROPERTIES. Seller will maintain all of the
Company's properties in good working order, repair and condition
(reasonable wear and use excepted) and cause the Company to take all
steps reasonably necessary to maintain in full force and effect its
patents, trademarks, servicemarks, trade names, brand names, copyrights
and other intangible assets.
(c) COMPENSATION. Seller will not permit the Company to (1)
enter into or alter any employment agreements; (2) grant any increase
in compensation other than normal merit increases consistent with the
Company's general prevailing practices to any officer or employee; or
(3) enter into or alter any labor or collective bargaining agreement or
any bonus or other employee fringe benefit.
(d) NO INDEBTEDNESS. Seller will not permit the Company to
create, incur, assume, guarantee or otherwise become liable with
respect to any obligation for borrowed money, indebtedness, capitalized
lease or similar obligation, except in the ordinary course of business
consistent with past practices where the entire net proceeds thereof
are deposited with and used by and in connection with the business of
the Company.
(e) MAINTAIN BOOKS. Seller will cause the Company to maintain
its books, accounts and records in the usual, regular ordinary and
sound business manner and in accordance with generally accepted
accounting principles applied on a basis consistent with past
practices.
(f) NO AMENDMENTS. Seller will not permit the Company to amend
its corporate charter or bylaws (or similar documents) without prior
consent of Buyer and will cause the Company to maintain their corporate
existence, licenses, permits, powers and rights in full force and
effect.
(g) TAXES AND ACCOUNTING MATTERS. Seller will cause the
Company to file when due all federal, state and local tax returns and
reports which shall be accurate and complete, including but not limited
to income, franchise, excise, ad valorem, and other taxes with respect
to its business and properties, and to pay as they become due all taxes
or assessments, except for taxes for which adequate reserves are
established and which are being contested in good faith by appropriate
proceedings. Seller will not permit the Company to change their
accounting methods or practices or any depreciation, amortization or
inventory valuation policies or practices.
(h) NO DISPOSITION OR ENCUMBRANCE. Except in the ordinary
course of business consistent with past practice, Seller will not
permit the Company to (1) dispose of or encumber any of its properties
and assets, (2) discharge or satisfy any lien or encumbrance or pay any
obligation or liability (fixed or
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contingent) except for previously scheduled repayment of debt, (3)
cancel or compromise any debt or claim, (4) transfer or grant any
rights under any concessions, leases, licenses, agreements, patents,
inventions, proprietary technology or process, trademarks, servicemarks
or copyrights, or with respect to any know-how, or (5) enter into or
modify in any material respect or terminate any existing license,
lease, or contract.
(i) INSURANCE. Seller will cause the Company to maintain in
effect all its current insurance policies.
(j) NO SECURITIES ISSUANCES. Seller will not permit the
Company to issue any shares of any class of capital stock, or enter
into any contract, option, warrant or right calling for the issuance of
any such shares of capital stock, or create or issue any securities
convertible into any securities of the Company except for the
transactions contemplated herein.
(k) NO DIVIDENDS. Seller will not permit the Company to
declare, set aside or pay any dividends or other distributions of any
nature whatsoever.
(l) CONTRACTS. Seller will not permit the Company to enter
into or assume any contract, agreement, obligation, lease, license, or
commitment except in the ordinary course of business consistent with
past practice or as contemplated by this Agreement.
(m) NO BREACH. Seller will not permit the Company to do any
act or omit to do any act which would cause a breach of any contract,
commitment or obligation of the Company.
(n) DUE COMPLIANCE. Seller will cause the Company to comply
with all laws, regulations, rules and ordinances applicable to it and
to the conduct of its business.
(o) NO WAIVERS OF RIGHTS. Seller will not permit the Company
to amend, terminate or waive any material right whether or not in the
ordinary course of business.
(p) CAPITAL COMMITMENTS. Seller will not permit the Company to
make or commit to make any capital expenditure, capital addition or
capital improvement.
(q) NO RELATED PARTY TRANSACTIONS. Seller will not permit the
Company to make any loans to, or enter into any transaction, agreement,
arrangement or understanding or any other nature with, any officer,
director or employee of the Company.
(r) NOTICE OF CHANGE. Seller will promptly advise Buyer in
writing of any material adverse change, or the occurrence of any event
which involves any substantial possibility of a material adverse
change, in the business, financial condition, results of operations,
assets, liabilities or prospects of the Company.
(s) CONSENTS. Seller will use their, and will cause the
Company to use its, best good faith efforts to obtain the consent or
approval of each person or entity whose consent or approval is required
for the consummation of the Transactions contemplated hereby and to do
all things necessary to consummate the Transactions contemplated by the
Basic Agreements.
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IV.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF BUYER TO CLOSE
The obligation of Buyer to close the Transactions contemplated hereby
is subject to the fulfillment by Seller prior to Closing of each of the
following conditions, which may be waived in whole or in part by Buyer:
4.1 COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of Seller contained in this Agreement shall have
been true and correct when made and shall be true and correct as of the Closing
with the same force and effect as if made at the Closing. Seller shall have
performed all agreements, covenants and conditions required to be performed by
Seller prior to the Closing.
4.2 NO ADVERSE CHANGE. There shall have been no event which has had or
may have a material adverse effect upon the business, financial condition,
results of operation, assets, liabilities or prospects of the Company.
4.3 NO LEGAL PROCEEDINGS. No suit, action or other legal or
administrative proceeding before any court or other governmental agency shall be
pending or threatened seeking to enjoin the consummation of the Transactions
contemplated hereby.
4.4 DOCUMENTS TO BE DELIVERED BY SELLER. Seller shall have delivered
the following documents:
(a) Stock certificates representing all of the Shares, duly
endorsed to Buyer and in blank or accompanied by duly executed stock
powers, copies of which are attached as Exhibit "O".
(b) A copy of (i) the Certificate of Incorporation of the
Company, certified as correct by the Company; and (ii) the Bylaws of
the Company certified as correct by the Company; and (iii) a
certificate of the Delaware Tax Commission, Franchise Tax Division, to
the effect that the Company is in good standing and has paid all
franchise taxes in such state, all as attached hereto as Exhibit "P";
(c) All agreements referred to in paragraph 1.5 above,
executed by all parties thereto other than Buyer.
(d) All corporate and other records of or applicable to the
Company included but not limited to, current and up-to-date minute
books, stock transfer books and registers, books of accounts, leases
and material contracts.
(e) Such other documents or certificates as shall be
reasonably required by Buyer or its counsel in order to close and
consummate this Agreement.
V.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF SELLER TO CLOSE
The obligation of Seller to close the Transactions is subject to the
fulfillment prior to Closing of each of the following conditions, any of which
may be waived in whole or in part by Seller:
5.1 COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties made by Buyer in this Agreement shall have been
true and correct when made and shall be true and correct in all material
respects at the Closing with the same force and effect as if made at the
Closing, and Buyer shall have performed all agreements, covenants and conditions
required to be performed by Buyer prior to the Closing.
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5.2 NO LEGAL PROCEEDINGS. No suit, action or other legal or
administrative proceedings before any court or other governmental agency shall
be pending or threatened seeking to enjoin the consummation of the Transactions
contemplated hereby.
5.3 OTHER AGREEMENTS. All parties other than Seller and the Company
shall have executed and delivered the Basic Agreements.
5.4 PAYMENTS. Seller shall have received from Buyer all Common Stock to
be issued at the Closing by Buyer pursuant to all the Basic Agreements.
VI.
MODIFICATION, WAIVERS, TERMINATION
AND EXPENSES
6.1 MODIFICATION. Buyer and Seller may amend, modify or supplement this
Agreement in any manner as they may mutually agree in writing.
6.2 WAIVERS. Buyer and Seller may in writing extend the time for or
waive compliance by the other with any of the covenants or conditions of the
other contained herein.
6.3 TERMINATION AND ABANDONMENT. This Agreement may be terminated and
the purchase of the Shares may be abandoned before the Closing:
(a) By the mutual consent of Seller and Buyer;
(b) By Buyer, if the representations and warranties of Seller
set forth herein shall not be accurate, or the conditions precedent set
forth in Article V shall have not have been satisfied, in all material
respects; or
(c) By Seller, if the representations and warranties of Buyer
set forth herein shall not be accurate, or the conditions precedent set
forth in Article V shall not have been satisfied in all material
respects.
Termination shall be effective on the date of receipt of written notice
specifying the reasons therefor.
VII.
MISCELLANEOUS
7.1 REPRESENTATIONS AND WARRANTIES TO SURVIVE. Unless otherwise
provided, all of the representations and warranties contained in this Agreement
and in any certificate, exhibit or other document delivered pursuant to this
Agreement shall survive the Closing for a period of two (2) years. No
investigation made by any party hereto or their representatives shall constitute
a waiver of any representation or warranty, and no such representation or
warranty shall be merged into the Closing.
7.2 BINDING EFFECT OF THE BASIC AGREEMENTS. The Basic Agreements and
the certificates and other instruments delivered by or on behalf of the parties
pursuant thereto, constitute the entire agreement between the parties. The terms
and conditions of the Basic Agreements shall inure to the benefit of and be
binding upon the respective heirs, legal representatives, successor and assigns
of the parties hereto. Nothing in the Basic Agreements,
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expressed or implied, confers any rights or remedies upon any party other than
the parties hereto and their respective heirs, legal representatives and
assigns.
7.3 APPLICABLE LAW. The Basic Agreements are made pursuant to, and will
be construed under, the laws of the State of Delaware.
7.4 NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and will be deemed to have been duly given when
delivered or mailed, first class postage prepaid:
(a) If to Seller, to:
Xxxxxxx Xxxxxx II
THE ACCORD GROUP
00 Xxxxxxx Xxxx.
Xxxx Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
(b) If to Buyer, to:
G. Xxxxx Xxxxxx
G. XXXXX XXXXXX & ASSOCIATES, P.C.
0000 Xxxx 00xx Xxxxx, Xxxxx 000
Xxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
These addresses may be changed from time to time by written notice to
the other parties.
7.5 HEADINGS. The headings contained in this Agreement are for
reference only and will not affect in any way the meaning or interpretation of
this Agreement.
7.6 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which will be deemed an original and all of which together will constitute
one instrument.
7.7 SEVERABILITY. If any one or more of the provisions of this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
under applicable law this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein. The
remaining provisions of this Agreement shall be given effect to the maximum
extent then permitted by law.
7.8 FORBEARANCE; WAIVER. Failure to pursue any legal or equitable
remedy or right available to a party shall not constitute a waiver of such
right, nor shall any such forbearance, failure or actual waiver imply or
constitute waiver of subsequent default or breach.
7.9 ATTORNEYS' FEES AND EXPENSES. The prevailing party in any legal
proceeding based upon this Agreement shall be entitled to reasonable attorneys'
fees and expenses and court costs.
7.10 EXPENSES. Each party shall pay all fees and expenses incurred by
it incident to this Agreement and in connection with the consummation of all
transactions contemplated by this Agreement.
7.11 EXHIBITS. All Exhibits to this Agreement are incorporated herein
in the places referenced in this Agreement:
-10-
11
7.12 INTEGRATION. This Agreement and all documents and instruments
executed pursuant hereto merge and integrate all prior agreements and
representations respecting the Transactions, whether written or oral, and
constitute the sole agreement of the parties in connection therewith. This
Agreement has been negotiated by and submitted to the scrutiny of both Seller
and Buyer and their counsel and shall be given a fair and reasonable
interpretation in accordance with the words hereof, without consideration or
weight being given to its having been drafted by either party hereto or its
counsel.
IN WITNESS WHEREOF, the undersigned parties hereto have duly executed
this Agreement on the date first written above.
"BUYER"
ROSE INTERNATIONAL LTD.
A DELAWARE CORPORATION
BY: /s/ G. XXXXX XXXXXX
G. XXXXX XXXXXX, PRESIDENT
"COMPANY"
THE ACCORD GROUP, INC.
A DELAWARE CORPORATION
BY: /s/ XXXXXXX XXXXXX, II
XXXXXXX XXXXXX II, PRESIDENT
"SELLER"
/s/ XXXXXXX XXXXXX, II
XXXXXXX XXXXXX, II
/s/ XXXXXX XXXXXXX
XXXXXX XXXXXXX
/s/ J. XXXXXX XXXXXXX
J. XXXXXX XXXXXXX
-11-
12
EXHIBIT "A"
-00-
00
X X X X X X X X E D
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT
REGISTRATION UNDER SAID ACT OR AN EXEMPTION THEREFROM.
NUMBER SHARES
AGR 01018 *6,500,000*
THE ACCORD GROUP, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
SEE REVERSE FOR
CERTAIN DEFINITIONS
CUSIP 00435N 20 3
COMMON STOCK
THIS CERTIFIES THAT:
XXXXXXX X. XXXXXX, XX
is owner of *SIX MILLION FIVE HUNDRED THOUSAND*
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK OF PAR $.001 VALUE EACH OF
THE ACCORD GROUP, INC.
transferable on the books of the Corporation in person or by attorney upon
surrender of this certificate duly endorsed or assigned. This certificate and
the shares represented hereby are subject to the laws of the State of Delaware,
and to the Certificate of Incorporation and By-laws of the Corporation, as now
or hereafter amended. This certificate is not valid until countersigned by the
Transfer Agent.
WITNESS the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.
DATED: 1/21/98 COUNTERSIGNED
OLDE MONMOUTH STOCK TRANSFER CO, INC.
00 XXXXXXXX XXXXXXX, XXXXX 000, XXXXXXXX XXXXXXXXX, XX 00000
TRANSFER AGENT
BY: [SIGNATURE ILLEGIBLE]
AUTHORIZED SIGNATURE
[THE ACCORD GROUP, INC. CORPORATE SEAL 1997 DELAWARE]
/s/ J. Xxxxxx Xxxxxxx /s/ Xxxxxxx Xxxxxx II
SECRETARY CHAIRMAN
14
NUMBER SHARES
AGR01019 *1,000,000*
THE ACCORD GROUP, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
SEE REVERSE FOR
CERTAIN DEFINITIONS
COMMON STOCK CUSIP 00435N 20 3
THIS CERTIFIES THAT:
J. XXXXXX XXXXXXX
is owner of
*ONE MILLION*
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK OF PAR $.001 VALUE EACH OF
THE ACCORD GROUP, INC.
transferable on the books of the Corporation in person or by attorney upon
surrender of this certificate duly endorsed or assigned. This certificate and
the shares represented hereby are subject to the laws of the State of Delaware,
and to the Certificate of Incorporation and By-laws of the Corporation, as now
or hereafter amended. This certificate is not valid until countersigned by the
Transfer Agent.
WITNESS the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.
DATED: 1/21/98 COUNTERSIGNED
OLDE MONMOUTH STOCK TRANSFER CO, INC.
00 XXXXXXXX XXXXXXX, XXXXX 000, XXXXXXXX XXXXXXXXX, XX 00000
TRANSFER AGENT
BY: /s/ [SIGNATURE ILLEGIBLE]
AUTHORIZED SIGNATURE
[THE ACCORD GROUP, INC. CORPORATE SEAL 1997 DELAWARE]
/s/ J. Xxxxxx Xxxxxxx /s/ Xxxxxxx Xxxxxx II
SECRETARY CHAIRMAN
RESTRICTED
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT
REGISTRATION UNDER SAID ACT OR AN EXEMPTION THEREFROM.
15
RESTRICTED
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT
REGISTRATION UNDER SAID ACT OR AN EXEMPTION THEREFROM.
NUMBER SHARES
------ ------
AGR 01020 * 500,000 *
THE ACCORD GROUP, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
SEE REVERSE FOR
CERTAIN DEFINITIONS
CUSIP 00435N 20 3
COMMON STOCK
THIS CERTIFIES THAT:
XXXXXX XXXXXXX
is owner of * FIVE HUNDRED THOUSAND *
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK OF PAR $.001 VALUE EACH OF
THE ACCORD GROUP, INC.
transferable on the books of the Corporation in person or by attorney upon
surrender of this certificate duly endorsed or assigned. This certificate and
the shares represented hereby are subject to the laws of the State of Delaware,
and to the Certificate of Incorporation and By-laws of the Corporation, as now
or hereafter amended. This certificate is not valid until countersigned by the
Transfer Agent.
WITNESS the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.
DATED: 1/21/98 COUNTERSIGNED
OLDE MONMOUTH STOCK TRANSFER CO, INC.
00 XXXXXXXX XXXXXXX, XXXXX 000, XXXXXXXX XXXXXXXXX, XX 00000
THE ACCORD GROUP, INC.
CORPORATE SEAL 1997 DELAWARE
BY: /s/ [SIGNATURE ILLEGIBLE]
----------------------------
AUTHORIZED SIGNATURE
/s/ J. Xxxxxx Xxxxxxx /s/ Xxxxxxx Xxxxxx II
---------------------------- ----------------------------
SECRETARY CHAIRMAN
16
EXHIBIT "B"
-13-
17
INDEMNITY AGREEMENT
THIS AGREEMENT is entered into this _____ day by and among XXXXXXX X.
XXXXX and XXXX X. XXXX (collectively the "Shareholders"), XXXXXXX XXXXXX II
("Seller"), and ROSE INTERNATIONAL LTD. a Delaware corporation ("Corporation").
WHEREAS, the Shareholders have been the majority shareholders of the
Corporation since September, 1997;
WHEREAS, the Corporation this date has acquired 81% of the outstanding
common shares of The Accord Group ("Shares") from Seller pursuant to a Stock
Purchase Agreement entered into June ____, 1998 ("Stock Purchase Agreement");
WHEREAS, the Corporation is subject to the threat of liability because of
the following litigation: Xxxxxxxxx Industries, Inc. v. Nextech Enterprises
International, Inc. et al filed on May 26, 1998 in the United States Bankruptcy
Court for the Northern District of Oklahoma ("Xxxxxxxxx Lawsuit").; and
WHEREAS, the purchase price for the Shares was determined based upon the
assumption that the Corporation is not, and will not be, liable for any claim
made in the Xxxxxxxxx Lawsuit.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, and subject to the
accuracy of the representations and warranties of the parties, the parties
hereto agree as follows:
I. INDEMNIFICATION
1.1 INDEMNITY. To the extent permitted by law, the Shareholders jointly
and severally do hereby agree to indemnify and hold the Corporation and the
Seller harmless from and against any and all losses, claims, damages,
liabilities and obligations of any kind and description, including any
reasonable attorney fees incurred by the Corporation in investigating, defending
or settling such losses, damages, liabilities and obligations, arising out of
the Xxxxxxxxx Lawsuit and matters directly related thereto. Under no
circumstances, however, shall such indemnification obligations exceed $50,000 at
which time Shareholders shall have the right to rescind the Stock Purchase
Agreement.
1.2. ALLOCATION OF INDEMNITY AMONG SELLERS. The indemnification
obligations of each Seller shall be determined pro rata, on the basis of such
Seller's percentage ownership interest of the Corporation immediately prior to
the Closing in relation to other Sellers.
1.3. PARTICIPATION IN DEFENSE. The Seller and the Corporation agree to
give prompt notice to the Shareholders once the Seller and/or the Corporation
have actual knowledge of any claims as to which indemnity shall be sought, and
shall permit the Shareholders (at their expense) to assume the defense of any
such claim or any litigation resulting therefrom; provided that counsel for the
18
Shareholders, who shall conduct the defense of said claim or litigation, shall
be reasonably satisfactory to the Seller and the Corporation, and the Seller and
the Corporation may participate in such defense at their expense; provided,
further, that the failure by the Seller and/or the Corporation to give notice as
provided herein shall not relieve the Shareholders of their obligations under
Section 1 herein except to the extent that the failure results in an omission of
actual notice to the Shareholders and such person is damaged solely as a result
of the failure to give notice. Neither the Seller nor the Corporation, in the
defense of any such claim or litigation, shall, except with the consent of the
Shareholders, consent to the entry of any judgment or enter into any settlement
that does not include as an unconditional term which releases the Shareholders
from all liability to the claimant or plaintiff with respect to such claim or
litigation.
II. MISCELLANEOUS
2.1 APPLICABLE LAW. The Basic Agreements are made pursuant to, and will be
construed under, the laws of the State of Delaware.
2.2 HEADINGS. The headings contained in this Agreement are for reference
only and will not affect in any way the meaning or interpretation of this
Agreement.
2.3 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which will be deemed an original and all of which together will constitute one
instrument.
2.4 SEVERABILITY. If any one or more of the provisions of this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable under
applicable law, this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. The remaining
provisions of this Agreement shall be given effect to the maximum extent then
permitted by law.
2.5 ATTORNEY FEES. The prevailing party shall pay all fees and expenses
incurred by it incident to this Agreement and in connection with the
consummation of all transactions contemplated by this Agreement.
IN WITNESS WHEREOF, the undersigned parties hereto have duly executed this
Agreement on the date first above written above.
"SHAREHOLDERS"
/s/ Xxxxxxx X. Xxxxx
---------------------------
XXXXXXX X. XXXXX
/s/ Xxxx X. Xxxx
---------------------------
XXXX X. XXXX
19
"SELLER"
___________________________
XXXXXXX XXXXXX II
"CORPORATION"
ROSE INTERNATIONAL LTD.
BY: /s/ G. Xxxxx Xxxxxx
________________________
G. XXXXX XXXXXX, PRESIDENT
20
"SELLER"
/s/ Xxxxxxx Xxxxxx II
___________________________
XXXXXXX XXXXXX II
"CORPORATION"
ROSE INTERNATIONAL LTD.
BY: /s/ G. Xxxxx Xxxxxx
________________________
G. XXXXX XXXXXX, PRESIDENT
00
XXXXXXX "X"
XXXX
-14-
22
EXHIBIT "D"
NONE
-15-
23
EXHIBIT "E"
NONE
-16-
24
EXHIBIT "F"
NONE
-17-
25
EXHIBIT "G"
NONE
-18-
26
EXHIBIT "H"
NONE
-19-
27
EXHIBIT "I"
XXXXXXX XXXXXX, II = $72,000
J. XXXXXX XXXXXXX = $72,000
XXXXXX XXXXXXX = $72,000
-20-
28
EXHIBIT "J"
NONE
-21-
29
EXHIBIT "K"
NONE
-22-
30
EXHIBIT "L"
OUTSTANDING OPTIONS
NAME OPTION SHARES EXERCISE PRICE
G. Xxxxx Xxxxxx 100,000 $1.00
Xxx Xxxxxx 100,000 $1.00
31
EXHIBIT "M"
ACCOUNTS PAYABLE
Corporate Financials Online $ 600.00
Depository Trust Company $ 255.00
Guest & Company $ 27,482.00
CDR Stock Transfer $ 750.00
Xxxxxx & Associates $ 776.00
32
EXHIBIT "N"
LITIGATION
XXXXXXXXX INDUSTRIES, INC.
v. Case No. 98-00882-R
NEXTECH ENTERPRISES US Bankruptcy Court
INTERNATIONAL INC., et al. Northern District of Oklahoma
