EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") dated as of and having an
effective date of January 31, 1997, between Advantage Marketing Systems, Inc.,
an Oklahoma corporation ("AMS"), Chambre International, Inc., a Texas
corporation ("CII"), Xxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxxxx Xxxxxxx, Xxxxx Xxxxx,
Xxxxxxxx Xxxxx, Xxxx Xxxxxx, Xxx Xxxxx, Xxxxxx Xxxxxxxx, Xxxxx Xxxxxxxx, Xxx
Xxxxx, Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxx Xxxxxxx, Xxxxxx Xxxxxxx, Xxxxx Xxxxxxx,
Xxxxx Xxx Xxxxxxxxxx, Xxxx Klockentegger, Xxxx Xxxxxxxxx, Xxxxx Xxxxxxxxx, Xxxxx
Xxxxxxx, each an individual and shareholder of CII and collectively the owners
of all of the issued and outstanding capital stock of CII (collectively referred
to as the "CII Shareholders"), and Xxxxx Xxxxx, an individual and executive
officer of CII.
RECITALS
1. The CII Shareholders desire to sell and AMS desires to purchase, all of
the issued and outstanding capital stock of CII (the "CII Stock").
2. The Board of Directors of AMS has approved and adopted, and through its
duly authorized officers, AMS has executed, this Agreement, and CII Shareholders
have approved and executed this Agreement, pursuant to which AMS is to purchase
the CII Stock.
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements contained in this
Agreement AMS, CII, the CII Shareholders, and Xxxxx Xxxxx hereby agree as
follows:
ARTICLE I
SALE AND PURCHASE OF STOCK
1.1 Sale and Purchase of Stock. Subject to the terms and conditions of this
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Agreement and in reliance upon the representations, warranties, covenants and
agreements contained in this Agreement, CII Shareholders hereby agrees to sell
and AMS hereby agrees to purchase, the CII Stock, on the Closing Date (as
defined in Section 1.4 hereof).
1.2 Consideration for Purchase of CII Stock. The consideration to be paid for
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the purchase of the CII Stock shall be 14,000 shares of AMS Common Stock (the
"AMS Stock"), which shall be delivered as follows:
1.2.1 Delivery of AMS Shares. At Closing (as defined in Section 1.4).
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AMS shall deliver to the CII Shareholders a total of 6,484 shares of AMS
Stock issued in such number of stock certificates and in such denominations
as CII shall designate in writing not less than 48 hours prior to the
Closing.
1.2.2 Adjustment for Liabilities. 7,516 shares of AMS Stock shall be
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delivered to Xxxxx Xxxxx 120 days after Closing; provided, however, in the
event it is determined that the total liabilities of CII accrued or accruable
in accordance with Generally Accepted Accounting Principles at the date of
Closing shall exceed a sum equal to $140,000, excluding any amounts owed to
AMS, then the number of AMS Shares to be delivered to Xxxxx Xxxxx at the end
of the 120 day period shall be decreased by one share for every
$6.00 in liability in excess of $140,000.
1.3 Deliveries of CII Stock. At the Closing the CII Shareholders shall
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deliver to AMS the CII Stock which shall represent all of the outstanding shares
of the capital stock of CII (free and clear of any lien, charge, claim, pledge,
security interest or other encumbrance of any type or kind whatsoever). The
transfer of the shares of CII Stock shall be effected by the delivery to AMS of
certificates representing the transferred shares endorsed in blank or
accompanied by stock powers executed in blank and with all necessary transfer
tax and other revenue stamps, acquired at the expense of CII Shareholders,
affixed.
1.4 The Closing and Closing Date. Subject to the terms and conditions of
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this Agreement, the transactions contemplated under this Agreement shall be
closed (the "Closing") at the offices of Xxxx, Swan & Xxxxxxxxxx, Oklahoma City,
Oklahoma, on the Closing Date, or at such other place and time as the parties
hereto shall agree. The date on which the transactions contemplated in this
Agreement shall be closed (the "Closing Date") shall occur on January 31, 1997,
to be effective as of January 31, 1997, or such other date as mutually agreed by
AMS and the CII Shareholders.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF CII SHAREHOLDERS
CII, CII Shareholders and Xxxxx Xxxxx, as the case may be, represent and
warrant unto AMS as follows:
2.1 Organization, Good Standing, Power, Etc. Xxxxx Xxxxx and Xxxxx Xxxxx
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represent and warrant that CII is a corporation duly organized, validly existing
and in good standing under the laws of the State of Texas and has the corporate
power and is entitled to own or lease its properties and to carry on its
business as, and in the places where, such properties are now owned or leased
and such business is now conducted. CII is duly qualified to do business and is
in good standing as a foreign corporation in each jurisdiction in which the
ownership, operation or leasing of its properties or assets or the nature of its
business requires such qualification as a foreign corporation or the failure to
qualify to do business and obtain good standing as a foreign corporation in any
other state would have any adverse material effect upon CII.
2.2 Delivery of Corporate Charter and Bylaws. Xxxxx Xxxxx and Xxxxx Xxxxx
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have delivered to AMS copies of the Articles of Incorporation and the Bylaws of
CII, and represent and warrant that such Articles of Incorporation and Bylaws
are complete and correct as in effect on the date hereof.
2.3 Capitalization. The authorized capital stock of CII consists of 500,000
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shares of common stock, $.01 par value per share, of which 129,250 shares are
issued and outstanding (including 17,500 shares of common stock that are held by
Xxxx Xxxxxxxx and that are subject to the Investor Put Option), fully paid and
non-assessable. Xxxxx Xxxxx and Xxxxx Xxxxx represent that the CII Shareholders
and Xxxxxxxx own all of the issued and outstanding shares of the CII Stock.
Each of the CII Shareholders represents and warrants that there are no
outstanding subscriptions, options, warrants or other agreements or commitments
obligating the CII
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Shareholder to transfer, deliver, assign, pledge, encumber or reissue the CII
Stock held by such CII Shareholder to any person, or any option, right or
interest, beneficial or otherwise, in such CII Stock. CII, Xxxxx Xxxxx and Xxxxx
Xxxxx represents and warrants that as of the date of this Agreement and
immediately prior to the Closing, there are no and will not be any (i) other
authorized or outstanding equity securities of CII of any class, kind or
character and (ii) outstanding subscriptions, options, warrants or other
agreements or commitments obligating CII to issue any additional shares of its
capital stock of any class, or any option or right with respect thereto, or any
securities convertible into shares of stock of any class of CII. All shares of
CII Stock that are outstanding at the date of this Agreement, and will be
outstanding at the time of Closing, are or will be duly and validly authorized
and issued, fully paid and non-assessable, and are not or will not be subject to
or issued in violation of any preemptive right of any shareholder.
2.4 Equity Interest. CII, Xxxxx Xxxxx and Xxxxx Xxxxx represents and warrants
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that CII does not own any stock or other equity or ownership interest
(controlling or otherwise) in any corporation, association, partnership, tax
partnership, joint venture or other entity.
2.5 Ownership of CII Stock. Each of the CII Shareholders represents that he
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or she is on the date of this Agreement and at Closing will be, (i) the lawful
owner of all of the issued and outstanding shares of the CII Stock held by such
CII Shareholder, and such shares are and will be at the time of Closing, free
and clear of all liens, claims, encumbrances and restrictions of every kind, and
(ii) has full legal right, power and authority to sell, assign and transfer the
CII Stock and (iii) the delivery of the shares of CII Stock pursuant to the
provisions of this Agreement will transfer valid title thereto, free and clear
of all liens, encumbrances, claims, and restrictions of every kind. From the
date of this Agreement through the Closing, (i) the CII Shareholders shall not
transfer, assign, encumber, pledge, or grant any person an interest in each
outstanding share of the CII Stock, (ii) each outstanding share of the capital
stock of CII shall remain unchanged and shall be an outstanding, fully paid and
non-assessable share at the Closing, and (iii) the certificate or certificates
evidencing ownership of the CII Stock (representing all of the outstanding
capital stock of CII) by CII Shareholders shall continue to evidence ownership
of all of the issued and outstanding capital stock of CII.
2.6 Authorization of Agreement. CII, Xxxxx Xxxxx and Xxxxx Xxxxx represent
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and warrant that CII has all requisite corporate power and authority to enter
into and perform all of its obligations under this Agreement. The execution and
delivery of this Agreement by CII and consummation by CII of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of CII. This Agreement has been duly executed and delivered by CII
and constitutes the legal, valid and binding obligation of CII, enforceable
against CII in accordance with its terms, except as enforceability may be
limited by (a) any applicable bankruptcy, insolvency, reorganization or other
law relating to or affecting creditors' rights generally, and (b) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law). CII Shareholders represent that they have
approved this Agreement and the transactions contemplated hereby as evidenced by
their execution of this Agreement. CII Shareholders represent that they have
full power, authority and legal right to enter into this Agreement and to
consummate the transactions contemplated hereby.
2.7 No Conflicting Agreements. CII, Xxxxx Xxxxx and Xxxxx Xxxxx represent
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and warrant that, to their actual knowledge, neither the execution nor the
delivery of this Agreement, nor the
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consummation of the transactions as contemplated in this Agreement in accordance
with the terms of this Agreement, will conflict with, or result in a breach of,
any term of, or constitute a default under, (i) the Articles of Incorporation or
Bylaws of CII, or (ii) any material agreement or instrument to which CII is a
party, or (iii) any material judgment, decree, order, statute, rule or
regulation to which CII is subject. CII, Xxxxx Xxxxx and Xxxxx Xxxxx represents
that, to their actual acknowledge, neither the execution nor the delivery of
this Agreement, nor the consummation of the transactions as contemplated in this
Agreement in accordance with the terms of this Agreement, will conflict with, or
result in a breach of, any term of, or constitute a default under (i) any
material agreement or instrument to which any of the CII Shareholders is a
party, (ii) any material judgment, decree, order, statute, rule or regulation to
which any of the CII Shareholders are subject, or (iii) result in the creation
of a material lien, charge or encumbrance on the shares of the CII Stock held by
any of the CII Shareholders. To the actual acknowledge of CII, Xxxxx Xxxxx and
Xxxxx Brit, CII is not and CII Shareholders are not in default or would be in
default with lapse of time or notice or both, in respect to any such term.
2.8 Financial Statements and Customer List. CII, Xxxxx Xxxxx and Xxxxx Xxxxx
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have furnished to AMS the following financial statements (hereinafter
collectively called the "CII Financial Statements"): (i) the unaudited Balance
Sheet of CII as of August 31, 1996 (the "CII Balance Sheet"), together with
statement of operations for the nine months ended August 31, 1996. CII, Xxxxx
Xxxxx and Xxxxx Xxxxx have also provided to AMS a Schedule setting forth the
names and addressed of all of the CII customers, a copy of which is attached
hereto as Schedule 2.8.
2.9 Absence of Undisclosed Liabilities. To the actual knowledge of CII,
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Xxxxx Xxxxx and Xxxxx Xxxxx, all obligations and liabilities, contingent or
otherwise, of CII whether or not required to be reserved or accrued on the CII
Balance Sheet, under the method of accounting used by CII or in accordance with
generally accepted accounting methods have been disclosed to AMS.
2.10 Title to Properties; Absence of Liens and Encumbrances. To the actual
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knowledge of CII, Xxxxx Xxxxx and Xxxxx Xxxxx, CII has good and marketable title
to the properties and assets reflected on the CII Balance Sheet as being owned
by CII, and all properties and assets thereafter acquired by it, except to the
extent such properties and assets are or were thereafter disposed of for fair
value in the ordinary course of business; all such properties and assets are
free and clear of all liens, charges and encumbrances. To the actual knowledge
of CII, Xxxxx Xxxxx and Xxxxx Xxxxx, the operation of the properties and
business of CII in the manner in which they are now operated does not violate
any zoning ordinances or municipal regulations in such a way as could, if such
ordinances or regulations were enforced, result in any material impairment of
the uses of the respective properties for the purposes for which they are now
operated. Attached hereto as Schedule 2.10 is a Schedule of all real and
personal property leased by CII.
2.11 Tax Matters. CII, Xxxxx Xxxxx and Xxxxx Xxxxx represent and warrant
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that CII has timely filed all federal, state, local and foreign tax returns
required to be filed by it, all taxes, assessments, fees, and other governmental
charges levied or assessed against the property or the business of CII have been
paid in full, other than taxes or charges, the payment of which is not yet due.
2.12 Compliance with Laws. CII, Xxxxx Xxxxx and Xxxxx Xxxxx represent and
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warrant that
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to their actual knowledge, CII has complied with all laws, regulations,
licensing requirements and orders applicable to its business the breach or
violation of which could have a material adverse effect on said business and has
filed with the proper authorities, all statements and reports required by the
laws, regulations, licensing requirements and orders to which it or any of its
employees (because of such employee's activities on behalf of CII) is subject,
and, to the actual knowledge of CII, Xxxxx Xxxxx and Xxxxx Xxxxx, CII possesses
all necessary licenses, franchises and permits to conduct its business in the
manner in which and in the jurisdictions and places where such businesses are
now conducted.
2.13 Litigation. CII, Xxxxx Xxxxx and Xxxxx Xxxxx represent and warrant that
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to their actual knowledge (i) there are no actions, suits, proceedings or
investigations pending or, threatened, against or affecting CII or any property
or rights of CII at law or in equity or before or by any federal, state,
municipal, or other governmental department, commission, board, bureau, agency,
or instrumentality, domestic or foreign, (ii) there are no actions or
proceedings at law or in equity pending, threatened against or affecting CII
before or by any federal, state, municipal, or other governmental department,
commission, board, bureau, agency, or instrumentality, domestic or foreign,
(iii) there is no action, suit or proceeding that will result in any material
adverse change in the business, operations, properties or assets, or in the
condition, financial or otherwise, of CII, and (iv) CII is not in default with
respect to any order, writ, injunction, judgment or decree of any court or
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign or of any arbitrator.
2.14 Contracts. CII, Xxxxx Xxxxx and Xxxxx Xxxxx represent and warrant that
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to their actual knowledge, CII is not a party to or is its property bound or
affected by or receives benefits under any written or oral, express or implied,
(i) contract for the employment of any officer or employee which is not
terminable on 30 days (or less) notice without payment of any amount on account
of such termination, (ii) bonus, deferred compensation, savings, stock option,
retirement, pension, profit-sharing or severance pay agreement, plan or
arrangement, (iii) agreement, contract or indenture relating to the borrowing of
money by CII, (iv) guaranty of any obligation for the borrowing of money or
otherwise, excluding endorsements made for collection and guaranties made in the
ordinary course of business, (v) management, consulting or other similar
contract or arrangement, (vi) collective bargaining agreement, (vii) agreement
with any current or former officer, director or shareholder of CII, (viii)
material licenses, whether as licensor or licensee, (ix) material contract or
commitment for the purchase of materials or supplies or for the performance of
services over a period of over 60 days, (x) contract, agreement or other
commitment not made in the ordinary course of business, (xi) contingent
liabilities, including letter of credit of all types, (xii) contract to purchase
or sell securities of all types, (xiii) contract or commitment for capital
expenditures in excess of $1,000, (xiv) contract or option to purchase or sell
any real property or any material personal property, other than in the ordinary
course of business, (xv) other contract, agreement or commitment which is
material to the business, operations, properties or assets or to the condition,
financial or otherwise, of CII, or (xvi) contract or other arrangement which is
not in the ordinary course of business consistent with the past practice of CII,
or in which a material interest is held by any person or entity which is an
Affiliate of CII which is not substantially on the same terms (including without
limitation, in the case of lending transactions, interest rates and collateral)
as those prevailing at the time of comparable transactions with unrelated
parties or which involves more than the normal risk of collectability or which
involves more than the normal risk of collectability or which involves other
unfavorable features. For purposes of this
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Agreement, "Affiliate" when used with respect to CII and the CII Shareholders
shall refer to and mean any "affiliate" within the meaning of Rule 145 of the
Securities and Exchange Commission (the "Commission") under the Securities Act,
any officer or director of CII or of any "affiliate" of CII or any "associate"
of any such officer or director as that term is defined in Rule 14a-1 of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
Between the date hereof and the Closing, CII, without the prior written
consent of AMS, shall not allow or permit to enter into, amend, extend or renew
any agreement, contract or plan specified above in this Section 2.14.
2.15 Defaults. CII, Xxxxx Xxxxx and Xxxxx Xxxxx represent and warrant that to
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their actual knowledge, CII is not in default in any material respect under any
of the contracts, leases, or other instruments, to which CII is a party or by
which CII or its property may be bound or affected or under which CII or its
property receives benefits, and with respect to such contracts, lease or other
instruments, (i) there has not occurred any event which with the lapse of time
or giving of notice or both would constitute such default to CII, (ii) such
contracts, leases or other instruments are binding obligations of the respective
parties thereto in accordance with their terms, (iii) there are no defenses,
offsets or counterclaims thereto which may be made by any party thereto other
than CII, and (iv) CII has not waived any substantial rights thereunder.
2.16 Employee Matters. (a) Employee Welfare Benefit Plans. CII, Xxxxx Xxxxx
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and Xxxxx Xxxxx represent and warrant that to their actual knowledge (i) CII is
not, and has not ever been, a party to or subject to any "employee welfare
benefit plan" (as defined in Section 3(1) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) to which CII contributes, is
required to contribute or has contributed, (ii) CII is not and has never been a
party to or subject to any "employee pension benefit plan" (as defined in
Section 3(2) of ERISA) to which CII contributes, is required to contribute or
has contributed. To the actual knowledge of CII, Xxxxx Xxxxx and Xxxxx Xxxxx,
all employee welfare benefit plans and employee pension benefit plans of CII
("CII Employee Welfare Benefit Plans") and any related trust agreements and any
other documents relating to the funding of CII Employee Welfare Benefit Plans
(i) in all material respects comply and have complied in the past, with the
provisions of ERISA, the Code, and any predecessor to the Code and any other
applicable laws, rules and regulations, (ii) have been administered consistent
with and in compliance in all material respect with applicable requirements of
the Code, ERISA and any other applicable law, including without limitation
compliance on a timely basis with all requirements for reporting and disclosure
concerning each of the CII Employee Welfare Benefit Plans. To the actual
knowledge of CII, Xxxxx Xxxxx and Xxxxx Xxxxx, neither CII nor any plan
fiduciary of any CII Employee Welfare Benefit Plan has (i) engaged in any
transaction or acted or failed to act in a manner which violates Section 404 or
406 of ERISA for which there exits neither a statutory nor regulatory exemption
and which results in material liability, or (ii) has acted or failed to act in
any manner which violates Section 404 of ERISA and results in material
liability.
(b) Other Employee Benefit Arrangements. CII, Xxxxx Xxxxx and Xxxxx Xxxxx
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represent and warrant that to their actual knowledge, CII has delivered to AMS
true and correct copies of each CII Employee Welfare Benefit Plan and each and
every other personnel policy, stock option plan, employment, bonus, incentive
award, vacation pay, severance pay, consulting and
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employment agreement and any other employee or fringe benefit plan, agreement,
arrangement, practice or understanding, whether formal or informal, which CII
maintains or to or under which CII contributes or is required to contribute.
(c) Claims and Litigation. CII, Xxxxx Xxxxx and Xxxxx Xxxxx represent and
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warrant that to their actual knowledge, (i) there are no threatened or pending
claims, suits or other proceedings by any of CII's employees, former employees,
plan participants, beneficiaries or spouses of any of the above involving any
employee benefit plan or arrangement described in this Section 2.16 or any
rights or benefits under any such employee benefit plan or arrangement other
than ordinary and usual claims for benefits by participants or beneficiaries;
(ii) neither CII nor any of its directors, officers, employees or any other
"fiduciary" (as such term is defined in Section 3(21) of ERISA) has any
liability for an act or for a failure to act in connection with either
administration or investment of assets of such plans or the transactions
contemplated by this Agreement; and (iii) there is no pending or threatened
legal action or proceeding or investigation against or involving any employee
benefit plan or arrangement described in this Section 2.16 and there is no basis
for any such legal action, proceeding or investigation.
(d) Union Contracts. CII, Xxxxx Xxxxx and Xxxxx Xxxxx represent and warrant
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that to their actual knowledge, CII is not or has never been a party to or
subject to any agreement with any union or collective bargaining unit, and there
is no pending union activity involving CII employees.
2.17 Contractual Commitments.. Schedule 2.17 contains a list of all written
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agreements, contracts, guarantees, and commitments to which CII is a party.
CII, Xxxxx Xxxxx and Xxxxx Xxxxx represent and warrant that to their actual
knowledge, true and correct copies of all written agreements, contracts,
guarantees and commitments to which CII is a party have been provided to AMS.
To the actual knowledge of CII, Xxxxx Xxxxx and Xxxxx Xxxxx, CII and the other
parties to such agreements, contracts, guarantees and commitments have performed
all obligations required to be performed by them to the date of this Agreement
and are not in default thereunder in any material respect.
2.18 Insurance. Schedule 2.18 contains a list of all insurance coverage
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carried by CII. CII, Xxxxx Xxxxx and Xxxxx Xxxxx represent and warrant that to
their actual knowledge true and correct copies of all policies relating to
insurance carried by CII have been delivered to AMS. CII, Xxxxx Xxxxx and Xxxxx
Xxxxx represent and warrant that to their actual knowledge, all such insurance
policies are in full force and effect, all premiums due thereon have been paid,
no notice of cancellation or termination has been received with respect to any
such policy, and CII has complied with the provisions of all such policies.
2.19 Finder's Fees. CII, Xxxxx Xxxxx and Xxxxx Xxxxx represent and warrant
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that to their actual knowledge no director, officer or employee of CII has
incurred or will incur any brokerage, finder's or similar fee in connection with
the transactions contemplated by this Agreement.
2.20 Ordinary Course of Business. The term "ordinary course of business," as
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used in this Agreement shall be construed to mean the conduct of business
consistent with good corporate practices and policies.
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2.21 Patents, Trademarks, Formulations, Etc. CII, Xxxxx Xxxxx and Xxxxx
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Xxxxx represent and warrant that to their actual knowledge CII owns or holds
licenses under such patents, trademarks, trade names, product formulations and
copyrights as it deems necessary for the conduct of its business as being
conducted on the date of this Agreement as set forth on Schedule 2.21, and CII
is not, as of the date of this Agreement, in receipt of any notice of
infringement or notice of conflict with the asserted rights of others in such
patents, trademarks, trade names and copyrights and are not otherwise aware of
such infringement or conflict, or of any infringement by, or conflict on the
part of, others of CII's patents, trademarks, trade names or copyrights. CII
also owns the rights to all of the formulations used in its products.
2.22 Full Disclosure. CII, Xxxxx Xxxxx and Xxxxx Xxxxx represent and warrant
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that to their actual knowledge (i) all written information regarding CII
previously delivered to AMS, including all financial information and statements
provided to AMS, is true and correct, (ii) all additional information regarding
CII delivered to AMS pursuant to this Agreement is or will be true and correct,
and (iii) other than the properties shown on the CII Balance Sheet, and
previously disclosed to AMS pursuant to this Agreement, there are no properties,
tangible or intangible, which are used in and material to the normal day-to-day
operations of CII as conducted by CII prior to the date of this Agreement.
2.23 Investment Intent. The CII Shareholders represents and warrants to AMS
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and its officers and directors that the AMS Common Stock to be issued to the CII
Shareholders pursuant to this Agreement, will be acquired by each of the CII
Shareholders for investment purposes only without the intent to resell such
stock and will not be transferred except pursuant to registration under the
Securities Act and the applicable state securities acts unless pursuant to
exemption from registration under such acts. The CII Shareholders hereby
acknowledges that the AMS Common Stock that may be issued to CII Shareholders
pursuant to this Agreement, will be issued pursuant to exception from
registration under the Securities Act and the applicable state securities acts
and the certificates evidencing the AMS Common Stock will bear appropriate
restrictive transfer legends as required pursuant to the Securities Act and the
applicable state securities acts.
2.24 Accuracy of Representations, Covenants and Warranties. No
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representation, covenant or warranty by the CII Shareholders in this Agreement
and, to the actual acknowledge of the CII Shareholders, no written information,
agreements or documents furnished to AMS by the CII Shareholders in connection
with the transactions contemplated in this Agreement, contain or will contain
any untrue statement of a material fact or omits or will omit to contain a
material fact necessary in order to make the statements or information contained
herein or therein, in light of the circumstances under which they were made, not
misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF AMS
AMS hereby represents and warrants to the CII Shareholders as follows:
3.1 Organization, Good Standing, Power, Etc. AMS is a corporation duly
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organized, validly existing and in good standing under the laws of the State of
Oklahoma and has the corporate power and is entitled to own or lease its
properties and to carry on its business as, and
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in the places where, such properties are now owned or leased and such business
is now conducted.
3.2 Delivery of Certificate of Incorporation and Bylaws. AMS has delivered
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to the CII Shareholders complete and correct copies of Certificate of
Incorporation and Bylaws of AMS.
3.3 Capitalization. Pursuant to its Certificate of Incorporation, AMS is
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currently authorized to issue up to 495,000,000 shares of Common Stock, $.0001
par value ("Common Stock"), and 5,000,000 shares of Preferred Stock, $.0001 par
value ("Preferred Stock"). The outstanding capital stock of AMS currently
consists of 2,143,191 shares of Common Stock. In addition, there are currently
issued and outstanding 524,610 Class A Common Stock Purchase Warrants and
525,860 Class B Common Stock Purchase Warrants. Each of the outstanding
Warrants entitles its holder to the right to purchase one share of AMS Common
Stock. AMS intends to redeem the Class A Warrants and Class B Warrants on March
17, 1997 (unless extended but not beyond April 30, 1997), and in connection
therewith modify the terms of the Class A Warrants and the Class B Warrants to
reduce the exercise price of the Class B Warrants to $6.00 and upon exercise of
the Class A Warrants and the Class B Warrants provide for delivery of a unit
(consisting of one share of AMS Common Stock and one 1997-A Warrant). AMS has
also granted stock options and other warrants to purchase 1,540,177 shares of
Common Stock during various periods, which expire February 1997 through July
2005, at exercise prices of $1.60 to $6.48 per share. Furthermore, AMS intends
to distribute 2,143,191 non-transferrable rights ("Rights") to its shareholders
of record on January 31, 1997. Each Right will allow the holder to purchase a
Unit (consisting of one share of AMS Common Stock and one 1997-A Warrant) from
AMS for $6.80 on or before March 17, 1997 (extendable to not later than April
30, 1997). Each 1997-A Warrant entitles the holder to purchase one share of AMS
Common Stock for $12.00 on or before January 31, 1999.
3.4 Authorization of Agreement. The Board of Directors of AMS has duly
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approved this Agreement and the transactions contemplated hereby, and has
authorized the execution and delivery of this Agreement by AMS. AMS has full
power, authority and legal right to enter into this Agreement and to consummate
the transactions contemplated hereunder.
3.5 No Conflicting Agreements. Neither the execution nor the delivery of
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this Agreement, nor the consummation of the transactions contemplated hereby in
accordance with the terms of this Agreement, will conflict with, or result in a
breach of, any term of, or constitute a default under, (i) the Certificate of
Incorporation or Bylaws of AMS or (ii) to the actual knowledge of AMS, any
material agreement or instrument to which AMS is a party, or (iii) to the actual
knowledge of AMS, any material judgment, decree, order, statute, rule or
regulation to which AMS is subject, or result in the creation of material lien,
charge or encumbrance on any of the properties of AMS. AMS, to its actual
knowledge, is not in default or would be in default with lapse of time or notice
or both, in respect to any such term.
3.6 Financial Statements. AMS has furnished to the CII Shareholders the
--------------------
following financial statements (hereinafter collectively called the "AMS
Financial Statements"): (i) the balance sheet as of December 31, 1995, and the
related statements of stockholders' equity, income, and cash flows for the
fiscal year ended December 31, 1995, and (ii) the unaudited balance sheet of AMS
as of September 30, 1996 (the "AMS Balance Sheet"), and related
-9-
statements of income and cash flows for the nine months ended September 30,
1996.
3.7 Securities and Exchange Commission Reports. AMS has filed in a timely
------------------------------------------
manner any and all reports required to be filed pursuant to Sections 13, 14 and
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
At the respective times of filing thereof, none of such reports contained any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements made therein, in the light of the
circumstance under which they were made, not misleading. Each audited and
unaudited financial statement (and the notes relating thereto) contained in such
reports was prepared in accordance with generally accepted accounting principles
consistently applied (except as otherwise indicated therein) and fairly presents
the financial condition of AMS as of the date thereof and the related results of
operations, stockholders' equity, and cash flows and changes in financial
position, as applicable, of AMS for and during the period covered thereby. Each
unaudited financial statement (and the notes relating thereto) contained in such
reports was prepared on the same basis as the audited financial statements and
included all necessary adjustments, consisting only of normal recurring
accruals, and fairly presents the financial condition of AMS as of the date
thereof and the related results of operations, stockholders' equity, and cash
flows or changes in financial position, as applicable, of AMS for and during the
period covered thereby. AMS has delivered to each of the CII Shareholders true
and correct copies of AMS's annual report on Form 10-KSB for the fiscal year
ended December 31, 1995, and AMS's quarterly reports on Form 10-QSB for the
three months ended March 31, 1996, six months ended June 30, 1996, and nine
months ended September 30, 1996.
3.8 Absence of Undisclosed Liabilities. To the actual knowledge of AMS, all
----------------------------------
obligations and liabilities, contingent or otherwise, of AMS arising from events
that occurred on or before the date of the AMS Balance Sheet, whether or not
required to be accrued or reserved, have been fully accrued or reserved in the
AMS Balance Sheet in accordance with and to the extent required by generally
accepted accounting principles. AMS has not incurred any such obligation or
liability, contingent or otherwise, subsequent to the date of the AMS Balance
Sheet, except for obligations and liabilities incurred in the ordinary course of
business. The reserves reflected in the AMS Balance Sheet are adequate,
appropriate and reasonable.
3.9 Compliance with Laws. To the actual knowledge of AMS, AMS has complied
--------------------
with all laws, regulations, licensing requirements and orders applicable to its
business the breach or violation of which could have a material adverse effect
on said business and has filed with the proper authorities, all statements and
reports required by the laws, regulations, licensing requirements and orders to
which it or any of its employees (because of such employee's activities on
behalf of AMS) is subject, and, to the actual acknowledge of AMS, AMS possesses
all necessary licenses, franchises and permits to conduct its business in the
manner in which and in the jurisdictions and places where such business is
conducted.
3.10 Accuracy of Representations, Covenants and Warranties. No
-----------------------------------------------------
representation, covenant or warranty by AMS in this Agreement and, to the actual
knowledge of AMS, no written information, agreements or documents furnished to
the CII Shareholders by AMS in connection with the transactions contemplated in
this Agreement, contain or will contain any untrue statement of a material fact
or omits or will omit to contain a material fact necessary in order to make the
statements or information contained herein or therein, in light of the
circumstances under
-10-
which they were made, not misleading.
ARTICLE IV
COVENANTS OF THE CII SHAREHOLDERS
The CII Shareholders covenant and agree with AMS that, at all times between
the date hereof and the Closing, the CII Shareholders will cause CII to comply
with all covenants and provisions of this Article IV, except to the extent AMS
may otherwise consent in writing or to the extent otherwise expressly required
or permitted by this Agreement.
4.1 Due Diligence Investigation by AMS. CII and the CII Shareholders shall
----------------------------------
cause CII to afford to the officers and authorized representatives of AMS
reasonable access to the offices, properties, books and records of CII and will
furnish AMS with such additional financial and operating data and other
information as to the business and properties of CII as may be reasonably
necessary for AMS to thoroughly evaluate, prior to the Closing, the business
assets, operations and financial condition of CII, including, without
limitation, tax returns filed and those in preparation of CII. If, for any
reason, the transactions contemplated by this Agreement are not consummated, AMS
will cause all confidential information obtained by it from the CII Shareholders
related to CII to be treated as such and will not use such information in a
manner detrimental to CII and the CII Shareholders. The CII Shareholders shall
cause CII to provide to AMS timely notice of and access to minutes of all
meetings (and all actions by written consent in lieu thereof) of the Board of
Directors and shareholders of CII.
4.2 Conduct of Business. The CII Shareholders shall cause CII to conduct its
-------------------
business only in the ordinary course and consistent with past practice and shall
use its commercially reasonable efforts to preserve intact the present business
organization, keep available the services of its present officers and employees,
maintain its properties and business and to preserve the goodwill of employees,
customers and others having business dealings with CII. Without the prior
written consent of AMS, the CII Shareholders shall cause CII to not engage in
any activity or enter into any transaction that would cause any of the
representations or warranties set forth in this Agreement to be inaccurate if
made as of a date subsequent to such activity or transaction.
4.3 No Dividends or Distributions. The CII Shareholders shall not permit or
-----------------------------
cause CII to (i) make any distributions of property or assets, including cash or
cash equivalents, to its shareholders, other than as contemplated in this
Agreement or (ii) declare, set aside or pay any dividend or other distribution
in respect of CII's capital stock or other equity securities, or redeem,
purchase or otherwise acquire any shares of CII's capital stock or other equity
securities, or any interest in or right to acquire any such shares or other
equity securities.
4.4 No Disposal of Property. Except as contemplated in this Agreement, the
-----------------------
CII Shareholders shall not permit or cause CII to (i) dispose of or assign any
of its assets or properties or permit any of CII's assets or properties to be
subjected to any liens, except to the extent any such disposition or lien is
made or incurred in the ordinary course of business consistent with past
practice, or (ii) sell any part of its operations or business to any third
party.
-11-
4.5 No Acquisitions. Except as contemplated in this Agreement, the CII
---------------
Shareholders shall not permit or cause CII to (i) merge, consolidate or
otherwise combine or agree to merge, consolidate or otherwise combine with any
other person, (ii) acquire all or substantially all or a material portion of the
assets, capital stock or other equity securities of any other person, or any
business division of any other person, or (iii) otherwise acquire control or
ownership of any other person.
4.6 Contracts. The CII Shareholders shall not permit or cause CII to enter
---------
into any contract involving consideration in excess of $1,000, individually, or
$2,000, in the aggregate, except contracts entered into in the ordinary course
of business consistent with past practice.
4.7 Notice and Cure. The CII Shareholders will notify AMS promptly in
---------------
writing of, and contemporaneously will provide AMS true, complete and correct
copies of, any and all information or documents relating to, and will use all
reasonable efforts to cure prior to the Closing, any event, transaction or
circumstance occurring after the date of this Agreement that results in or will
result in any covenant or agreement of the CII Shareholders being breached under
this Agreement, or that renders or will render untrue any representation or
warranty of the CII Shareholders contained in this Agreement as if the same were
made on or as of the date of such event, transaction or circumstance. The CII
Shareholders also will use all commercially reasonable efforts to cure, at the
earliest practicable date and before the Closing, any violation or breach of any
representation, warranty, covenant or agreement made by the CII Shareholders in
this Agreement.
4.8 Agreements and Covenants. CII will not make any commitment, either in
------------------------
writing or orally, which would violate any of the provisions set forth in this
Article IV.
4.9 Finder's Fees. The CII Shareholders shall be responsible for payment of
-------------
any and all claims or demands for any commission, fee or other compensation by
any broker, finder, agent or similar intermediary claiming to have been employed
by or on behalf of CII and/or the CII Shareholders with respect to the
transactions contemplated in this Agreement, or any other possible transaction
involving the sale, transfer, assignment, conveyance or other disposition of the
capital stock and/or assets of CII, or any merger, consolidation or any other
acquisition transaction.
4.10 No Amendments. The CII Shareholders shall not permit or cause CII to
-------------
amend or propose to amend CII's Articles of Incorporation or Bylaws or take any
action with respect to any such amendment.
4.11 No Issuance or Disposition of Securities. Without the express written
----------------------------------------
consent of AMS the CII Shareholders shall not permit or cause CII to (i)
authorize or issue any shares of its capital stock or other equity securities or
enter into any contract granting any option, warrant or right calling for the
authorization or issuance of any such shares or other equity securities, (ii)
create or issue any securities directly or indirectly convertible into or
exchangeable for any such shares or other equity securities, or (iii) create or
issue any options, warrants or rights to purchase any such convertible
securities. The CII Shareholders will not pledge, assign, transfer or otherwise
dispose of or encumber any shares of or any options, warrants or rights to
purchase the CII Stock. The CII Shareholders shall not permit or cause CII to
split, combine, or reclassify any
-12-
capital stock or other equity securities of CII. The CII Shareholders shall not
permit or cause CII to (i) authorize or issue any equity securities or enter
into any contract granting any option, warrant or right calling for the
authorization or issuance of any such equity securities, (ii) create or issue
any securities directly or indirectly convertible into or exchangeable for any
such equity securities, or (iii) create or issue any options, warrants or rights
to purchase any such convertible securities.
4.12 Securities and Exchange Commission Matters. The CII Shareholders will
------------------------------------------
furnish AMS as soon as practicable all information (that is readily available to
CII as of the date of this Agreement and that may become available to CII
without additional cost and expense in excess, in the aggregate, of $500)
concerning CII as may be required for inclusion in any report required to be
prepared and filed by AMS with the U.S. Securities and Exchange Commission under
and pursuant to the Exchange Act or the Securities Act, or otherwise, or any
other governmental or regulatory body in connection with the transactions
contemplated by this Agreement. The CII Shareholders represent and warrant that
all information so furnished for such reports and filings shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
4.13 Public Announcements. Without prior consultation with AMS, the CII
--------------------
Shareholders shall not, and the CII Shareholders shall not permit CII to, make
any announcement to the public or any statement to its employees generally
concerning the transactions contemplated in this Agreement.
4.14 Shareholders Approval. Each of the CII Shareholders hereby specifically
---------------------
covenants and agrees that he has read and has been fully advised by legal
counsel as to the meaning and effect of this Agreement and the transactions to
be effected by this Agreement, and that he or she hereby approves this Agreement
and the transactions contemplated in this Agreement. By execution of this
Agreement, (i) the CII Shareholders hereby votes all of the issued and
outstanding shares of the CII Common Stock in favor of approval of this
Agreement and the transactions contemplated in this Agreement and (ii) each of
the CII Shareholders hereby consents to all corporate action required to
consummate the transactions contemplated in this Agreement without the necessity
for a meeting of the shareholders of CII, to the extent and in the event
shareholder approval shall be required for approval of this Agreement and the
transactions contemplated in and to be effect by this Agreement.
4.15 Resignation of Officers and Directors. The execution of this Agreement
--------------------------------------
shall constitute the resignation of all of the CII Shareholders who currently
serve as executive officers and directors of CII, such resignations to be
effective immediately following the Closing. Each such resignation shall
constitute a voluntary termination of any employment agreement that any such
executive officer or director may have with CII, and all such CII Shareholders
hereby waive and release CII of any and all obligations that CII may have under
such employment agreement. Further, the execution of this Agreement shall
constitute the release of all liabilities of whatever nature of CII to any of
the Shareholders.
-13-
ARTICLE V
CONTINUING OBLIGATIONS OF THE CII
SHAREHOLDERS AND AMS AFTER CLOSING
Following Closing and consummation of the transactions contemplated in this
Agreement, the CII Shareholders covenant and agree (except to the extent AMS may
otherwise consent in writing or to the extent otherwise expressly required or
permitted by this Agreement), and AMS covenants and agrees (except to the extent
the CII Shareholders otherwise consent in writing or to the extent otherwise
expressly required or permitted by this Agreement), as follows:
5.1 Indemnifications by CII Shareholders. Subject to the provisions of this
------------------------------------
Article V, each of the CII Shareholders agree severally (and not jointly) to
indemnify fully in respect of, hold harmless and defend AMS, its Affiliates and
its officers, directors and employees against any and all damages, liabilities,
costs, claims, proceedings, investigations, penalties, judgments, deficiencies,
losses, including taxes, expenses (including interest, penalties, and fees and
disbursements of attorneys, accountants and experts) ("Loss" or "Losses")
incurred or suffered by any of them arising out of or relating to (i) any
misrepresentation or breach of warranty on the part of the CII Shareholders
under this Agreement and (ii) any nonfulfillment or failure to perform any
covenant or agreement on the part of any of the CII Shareholders under this
Agreement.
5.2 Indemnifications by AMS. Subject to the provisions of this Article V, AMS
-----------------------
agrees to indemnify fully in respect of, hold harmless and defend the CII
Shareholders against, any and all Losses arising out of or relating to (i) any
misrepresentation, or breach of warranty on the part of AMS under this
Agreement, (ii) nonfulfillment or failure to perform any covenant or agreement
on the part of AMS under this Agreement, or (iii) related and attributable to,
or asserted against, CII with respect to any event or condition occurring or
arising after the Closing Date upon which the Losses are based.
5.3 Survival of Representations and Warranties. Each representation,
------------------------------------------
warranty, or covenant given or made by under Articles I, II, III, and IV this
Agreement shall survive the date of Closing; provided, however, that the rights
of the parties hereto to initiate any action for breach of any such
representation, warranty, or covenant shall survive only until the close of
business on January 31, 1999.
5.4 Non-Competition. (a) In order to induce AMS to enter into this
---------------
Agreement, each of Xxxxx Xxxxx and Xxxxx Xxxxx covenants and agrees that from
the Closing until January 1, 2001, he or she shall not, and shall not permit any
of his or her Affiliates, (i) to engage in any business similar to, or in any
way competitive with, that carried on by CII as constituted on the date of this
Agreement within any county in any state in which CII is engaged in any such
similar or competitive business ("Competitive Business") (except pursuant to
agreements with AMS or its Affiliates), (ii) to acquire any legal or beneficial
interest in, or otherwise participate in the ownership of any person, firm,
corporation, partnership or other entity or association which is or becomes
engaged in a Competitive Business, except ownership of less than one percent of
a publicly traded company shall be permissible, (iii) directly or indirectly
solicit, canvass or otherwise contact or accept any business or transaction from
any present or former customers or distributors of CII, or take any action which
shall cause the termination or curtailment of the
-14-
business relationship between CII (and/or its successor or successors) and any
of its present or former customers or distributors relating to a Competitive
Business, (iv) directly or indirectly, without the prior written consent of AMS,
solicit, entice, raid, persuade or induce any individual who as of the date of
this Agreement is, or at any time during such period shall be, an employee or
independent contractor of AMS or CII or their Affiliates, or any of their
respective successors, to terminate or refrain from renewing or extending his or
her employment or independent contractor status with AMS, CII or their
Affiliates, or any of their respective successors. This covenant and agreement
is included herein in order to protect the value of the business of CII being
acquired by AMS pursuant to this Agreement and to assure that AMS and CII shall
have the full benefit of the value thereof.
(b) If any part of the restrictions set forth in (a) should, for any reason
whatsoever, be declared invalid by a court of competent jurisdiction, the
validity or enforceability of the remainder of such restrictions shall not
thereby be adversely affected and shall be enforced to the fullest extent
permitted by law. If any of such restrictions are deemed to be unreasonable by a
court of competent jurisdiction, then the CII Shareholders shall submit to the
reduction or modification thereof as said court deems reasonable.
(c) If the CII Shareholders shall be in violation of the aforementioned
restrictive covenant in this Section 5.4, then in addition to AMS's other
remedies, the time limitation thereof shall be extended for a period of time
equal to the period of time during which such violation occurred.
(d) The CII Shareholders and AMS agree that $20,000 of the Stock Purchase
Price is attributable to the restrictive covenant and agreement as set forth in
this Section 5.4.
(e) The terms and provisions of this Section 5.4 are for the benefit of AMS
and may be waived in whole or in part by AMS.
5.5 Injunctive Relief. Each of Xxxxx Xxxxx and Xxxxx Xxxxx acknowledge that
-----------------
AMS, CII and its Affiliates would be irreparable damaged and that money damages
and any other remedy available at law would be inadequate to redress or remedy
any loss in the event that the provisions of Section 5.4 were not fully
performed in accordance with their specific terms or are otherwise breached, and
each of Xxxxx Xxxxx and Xxxxx Xxxxx therefore, agrees that AMS and its assigns,
in addition to recovering any claim for damages or obtaining any other remedy
available at law, also may enforce the terms of Section 5.4 by injunction or
specific performance and may obtain any other appropriate remedy available in
equity, and that each of Xxxxx Xxxxx and Xxxxx Xxxxx hereby waives his or her
right to assert and will not assert in defense against such equitable claims
that an adequate legal remedy is available.
5.6 Additional Post-Closing Performances of Xxxxx Xxxxx and Xxxxx Xxxxx.
-------------------------------------------------------------------
After Closing, if not paid at Closing, Xxxxx Xxxxx and Xxxxx Xxxxx shall assume
and pay and hold CII harmless from and with respect to (i) any and all
commissions, fees and other compensation payable to any broker, finder, agent or
similar intermediary claiming to have been employed by or on behalf of CII
and/or the CII Shareholders with respect to the transactions contemplated in
this Agreement, or any other possible transaction involving the sale, transfer,
assignment, conveyance or other disposition of the capital stock and/or assets
of CII, or any merger, consolidation, or any other acquisition transactions, and
(ii) any and all of their costs and expenses incurred in connection
-15-
with this Agreement and the transactions contemplated in this Agreement,
including without limitation fees and expenses of counsel, irrespective of when
incurred.
ARTICLE VI
TERMINATION AND AMENDMENT
6.1 Termination. This Agreement may be terminated and the transactions
-----------
contemplated in this Agreement abandoned at any time prior to the Closing (i) by
mutual agreement of the CII Shareholders and AMS, (ii) at the option of the CII
Shareholders in the event the Closing shall not have been completed on or before
January 31, 1997, (iii) by AMS in the event there shall have been entered or
rendered against the CII Shareholders or CII, AMS, or any of their respective
directors or officers in any action or proceeding referred to in Section 2.13 of
this Agreement an injunction or a final judgment having the effect of limiting
the ability of AMS to effectively exercise full rights of ownership of the
business, assets, or shares of CII. In the event of termination by AMS or the
CII Shareholders, as provided in this Section 6.1, written notice shall
forthwith be given to the other parties.
6.2 Effective of Termination. In the event of termination by AMS or the CII
------------------------
Shareholders, as provided in Section 6.1 of this Agreement, (i) this Agreement
shall forthwith become wholly void and of no effect, and there shall be no
obligation or liability on the part of the CII Shareholders and CII, AMS, or
their respective officers, directors or shareholders, except as provided in
Section 7.7; provided, however, that such limitation shall not apply in the
event of a willful breach by the CII Shareholders, Xxxxxxxx, Xxxxx Xxxxx, or AMS
of any of their respective material covenants contained herein in which case the
non-breaching party shall be entitled to recover from the breaching party all
out-of-pocket costs (including without limitation reasonable attorney fees and
expenses) which the non-breaching party has incurred in connection with this
Agreement.
6.3 Amendment. This Agreement may be amended by the parties thereto, at any
---------
time prior to the Closing. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
ARTICLE VII
MISCELLANEOUS
7.1 Expenses. Except as otherwise provided herein, AMS hereby covenants and
--------
agrees to pay its own costs and expenses, and the CII Shareholders and Xxxxx
Xxxxx hereby covenant and agree to pay their costs and expenses and the costs
and expenses, incurred in connection with this Agreement and the transactions
contemplated in this Agreement, including without limitation fees and expenses
of counsel, irrespective of when incurred and regardless of whether the
transactions contemplated under this Agreement are consummated.
7.2 Notices. All notices and other communications required or permitted
-------
hereunder shall be in writing and shall be deemed to have been given when
delivered personally, or on the next day after being sent by facsimile
transmission or a nationally recognized overnight delivery
-16-
service, or on the third (3rd) day after being sent by registered or certified
mail (return receipt requested), postage prepaid to the parties to this
Agreement at the following addresses or at such other address for a party as
shall be specified by like notice:
If to Xxxxx Xxxxx: Xxxxx Xxxxx
000 Xxxxx Xxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
If to Xxxxx and/or Xxxxxx Xxxxxxx: Xxxxx Xxxxxxx and/or
Xxxxxx Xxxxxxx
000 Xxxxxxxxxxx Xxxxx
Xxxxxxxxx Xxxx, Xxxxxxx 00000
If to Xxxxx and/or Xxxxxxxx Xxxxx: Xxxxx Xxxxx and/or
Xxxxxxxx Xxxxx
0000 Xxxxxxxxxxxxxx Xxxxx
Xxxxx Xxxxxxxx, Xxxxxxx 00000
If to Xxxx Xxxxxx: Xxxx Xxxxxx
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
If to Xxx Xxxxx: Xxx Xxxxx
0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx 00000
If to Xxxxxx and/or Xxxxx Xxxxxxxx: Xxxxxx Xxxxxxxx and/or
Xxxxx Xxxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
If to Don and/or Xxxxxx Xxxxx: Xxx Xxxxx and/or
Xxxxxx Xxxxx
0000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000
If to Xxxxx Xxxxx: Xxxxx Xxxxx
000 Xxxxxxxxx Xxxx
Xxxxxx, Xxxx 00000
If to Xxxx Xxxxxxx: Xxxx Xxxxxxx
00000 Xxxxxx
Xxx Xxxxxxx, Xxxxx 00000
If to Xxxxxx and/or Xxxxx Xxxxxxx: Xxxxxx Xxxxxxx and/or
Xxxxx Xxxxxxx
0000 Xxxxxxxxxx Xxxx
-00-
Xxxxx, Xxxxx Xxxxxxxx 00000
If to Xxxxx Xxx Xxxxxxxxxx and/or: Xxxx Xxx Xxxxxxxxxx and/or
Xxxx Klockentegger Xxxx Klockentegger
00000 Xxxxx Xxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
If to Rose and/or Xxxxx Xxxxxxxxx: Xxxx Xxxxxxxxx and/or
Xxxxx Xxxxxxxxx
0000 Xxxxx Xxxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxx 00000
If to Xxxxx Xxxxxxx: Xxxxx Xxxxxxx
0000 Xxxxx 0000 Xxxx
Xxxxx Xxxx, Xxxx 00000
If to AMS: Advantage Marketing Systems, Inc.
Suite 1210 West
0000 X. X. Xxxxxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
With copies to: Xxxxxxx X. Xxxx, Esq.
Xxxx Swan & Xxxxxxxxxx
2800 Oklahoma Tower
000 Xxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
7.3 Entire Agreement. This Agreement (including the Exhibits and Schedules
----------------
hereto and the documents and instruments referred to herein) constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all prior agreements and undertakings, written and oral.
7.4 Binding Effect; Benefits. This Agreement shall be binding upon and inure
------------------------
to the benefit of the parties to this Agreement and their respective successors
and permitted assigns. Prior to Closing, neither this Agreement nor any right,
remedy, obligation or liability hereunder or by reason hereof shall be
assignable by any of the parties to this Agreement without the prior written
consent of the others. Nothing expressed or implied in this Agreement is
intended to or shall be construed to give any person other than the parties to
this Agreement or their respective successors or permitted assigns any legal or
equitable right, remedy or claim under or in respect of this Agreement, it being
the intention of the parties to this Agreement that this Agreement shall be for
the sole and exclusive benefit of the parties hereto or such successors or
assigns and for the benefit of no other person.
7.5 Waiver. Any term or provision of this Agreement may be waived in writing
------
at any
-18-
time by the CII Shareholders, if they are entitled to the benefits thereof, or
by AMS, if it is entitled to the benefits thereof. No such waiver shall, unless
explicitly stated, be a continuing waiver. No failure to exercise or delay in
exercising any right hereunder shall constitute a waiver thereof.
7.6 Applicable Law. This Agreement shall be governed by and construed in
--------------
accordance with the laws of the State of Oklahoma applicable to contracts made
and to be performed within that State.
7.7 Confidentiality. Prior to consummation of the transactions contemplated
---------------
in this Agreement, AMS and its representatives and the CII Shareholders, Xxxxx
Xxxxx and their representatives will each keep confidential, and not disclose to
any third party, information and data obtained as a result of such access;
provided, however, that this restriction shall not apply to information and data
which (i) are now in or may hereafter enter the public domain without breach of
this covenant, (ii) were already in the possession of AMS, the CII Shareholders
and/or Xxxxx Xxxxx, as the case may be, prior to receipt from the other, (iii)
are lawfully received by AMS, the CII Shareholders and/or Xxxxx Xxxxx, as the
case may be, from an unrelated third party after receipt of the same from the
other, (iv)AMS, the CII Shareholders and/or Xxxxx Xxxxx or CII, as the case may
be, is required by law to disclose, or (v)AMS, the CII Shareholders and/or Xxxxx
Xxxxx, as the case may be, discloses to joint venture partners, independent
consultants, financial institutions, investment bankers or broker-dealers,
provided there are restrictions prohibiting further dissemination of such
information by any such joint venture partners, consultant, financial
institution investment bankers or broker-dealers. If the transactions
contemplated in this Agreement are not consummated, each of the CII
Shareholders, Xxxxx Xxxxx and AMS shall return to the other all information and
data obtained pursuant to this Agreement.
If AMS or any of its officers, directors, employees, agents or representatives
is required to disclose any information supplied to AMS by CII, the CII
Shareholders and/or Xxxxx Xxxxx pursuant to this Agreement, or if any of the CII
Shareholders or any of his or her agents or representatives is required to
disclose any information supplied to the CII Shareholders by AMS pursuant to
this Agreement, the parties hereto agree that AMS will provide the CII
Shareholders with prompt notice, or the CII Shareholders and/or Xxxxx Xxxxx will
provide AMS prompt notice, of such request(s) so that AMS, the CII Shareholders
or Xxxxx Xxxxx, as the case may be, may seek an appropriate protective order
and/or waive compliance with the provisions of this Section 7.7. It is further
agreed that, if in the absence of a protective order or the receipt of a waiver
hereunder, AMS or any of the CII Shareholders or Xxxxx Xxxxx, as the case may
be, is nonetheless, in the opinion of its, his or her legal counsel, compelled
to disclose information and data concerning AMS or the CII Shareholders, Xxxxx
Xxxxx or CII to any tribunal or else stand liable for contempt or suffer other
censure or penalty, AMS or any of the CII Shareholders or Xxxxx Xxxxx, as the
case may be, may disclose such information to such tribunal without liability
hereunder.
7.8 Publicity. All press releases and other publicity concerning the
---------
transactions contemplated in this Agreement shall be jointly planned and
coordinated by and between AMS, Xxxxx Xxxxx and Xxxxx Xxxxx.
7.9 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each
-19-
of which shall be deemed to be an original and all of which together shall be
deemed to be a single agreement.
7.10 Headings and Captions. The headings contained in this Agreement are for
---------------------
convenience of reference only, are not to be considered a part hereof and shall
not limit or otherwise affect in any way the meaning or interpretation of this
Agreement.
7.11 Effect of Invalid Provisions. In the event any provision of this
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Agreement or any other agreement entered into pursuant hereto is contrary to,
prohibited by or deemed invalid under applicable law or regulation, such
provision shall be inapplicable and deemed omitted to the extent so contrary,
prohibited or invalid, but the remainder thereof shall not be invalidated
thereby and shall be given full force and effect so far as possible. In the
event any provision of this Agreement may be construed in two or more ways, one
of which would render the provision invalid or otherwise voidable or
unenforceable and another of which would render the provision valid and
enforceable, such provision shall have the meaning which renders it valid and
enforceable.
7.12 Waiver of Performance. The failure or delay of any party at any time to
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require performance by another party of any provision of this Agreement, even if
known, shall not affect the right of such party to require performance of that
provision or to exercise any right, power or remedy hereunder. Any waiver by
any party of any breach of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of any continuing or succeeding breach of such right, power or remedy
under this Agreement. No notice to or demand on any party in any case shall, of
itself, entitle such party to any other or further notice or demand in similar
or other circumstances.
IN WITNESS WHEREOF, each of the Boards of Directors of AMS and CII has duly
authorized and caused this Agreement to be signed by the respective officers of
AMS or CII, and the CII Shareholders and Xxxxx Xxxxx have executed this
Agreement in their individual capacities, as of the date first above written.
"CII Shareholders"
/s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
/s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
/s/ Xxxxxxxx Xxxxx
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Xxxxxxxx Xxxxx
-20-
/s/ Xxxx Xxxxxx
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Xxxx Xxxxxx
/s/ Xxx Xxxxx
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Xxx Xxxxx
/s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx
/s/ Xxxxx Xxxxxxxx
----------------------------------------
Xxxxx Xxxxxxxx
/s/ Xxx Xxxxx
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Xxx Xxxxx
/s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
/s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
/s/ Xxxx Xxxxxxx
----------------------------------------
Xxxx Xxxxxxx
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
/s/ Xxxxx Xxx Xxxxxxxxxx
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Xxxxx Xxx Xxxxxxxxxx
/s/ Xxxx Klockentegger
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Xxxx Klockentegger
/s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx
/s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
"Xxxxx Xxxxx" /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
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"CII" CHAMBRE INTERNATIONAL, INC.
By: /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx, CEO
"AMS" ADVANTAGE MARKETING SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx, President
-22-
LIST OF SCHEDULES
Schedule 2.8 CII Customer List.
Schedule 2.10 Schedule of Leases.
Schedule 2.17 Schedule of Contracts.
Schedule 2.18 List of CII insurance policies in force.
Schedule 2.21 Schedule of Patents, Trademarks, Formulations, Etc.
-23-
