CLOSING
MEMORANDUM
The
Stock Purchase Agreement (“Agreement”) between Republic Resources,
Inc., and Xxxxx X. Xxxxxx, dated April 16, 2002, as amended through the date
hereof, shall be completed in accordance with the following.
1.
Satisfaction of Conditions. The conditions and
obligations of the Seller set forth in Section 6.01 of the Agreement shall be
satisfied or deemed satisfied as follows:
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(1)
Seller, by signing in the space indicated below,
confirms that the representations, warranties and covenants in the Agreement, as
supplemented by Seller”s Disclosure Schedule, are true and correct as of
the date hereof.
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(2)
Seller confirmed that it has completed all due diligence
reviews to its own satisfaction.
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(3)
Seller has received from Purchaser proof of completion
of the sale of all of Republic”s oil and gas reserves, which was effective
April 4, 2002.
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(4)
Seller and Purchaser agreed to reduce the minimum amount
which was required to be raised from the sale of common stock by Purchaser prior
to closing to $500,000. Seller has received satisfactory evidence that Purchaser
completed the sale of at least $500,000 of its common stock prior to the date of
closing.
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(5)
Seller has received satisfactory confirmation that
substantially all of Purchaser”s outstanding 11% Convertible Debentures
were converted into common stock of Republic and other securities effective on
or about April 4, 2002.
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(6)
All outstanding shares of Republic”s Series C
Preferred Stock were converted into 3.4 million shares of Republic common stock
effective as of February 11, 2002.
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(7)
Seller received copies of resolutions adopted by the
Board of Directors of Republic approving the transaction and other related
transactions.
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(8)
The Officers of Republic prior to the closing of this
transaction are as follows:
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President
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Xxxxxxx X. Xxxxxx |
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Treasurer & CFO
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Xxxxxxx X. Xxxxxx |
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Secretary
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Xxxxxxx X. Xxxxx |
Immediately
following the completion of this transaction the officers shall be:
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President
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Xxxxx X. Xxxxxx |
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Secretary
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Xxxxx X. Xxxxxx |
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Treasurer &
CFO |
Xxxxxxx X. Xxxxxx |
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Assistant
Secretary |
Xxxxxxx X. Xxxxx |
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(9)
Seller has confirmed the legal existence and good
standing of the Purchaser.
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(10)
The following directors of Republic have resigned
effective as of the time of closing of this transaction:
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J. Xxxxx Xxxxxx
Xxxxx X. Xxxxxxx
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From
and after the completion of this transaction, the directors of Republic shall
be:
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Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Xx. Xxxxx X. Xxxxx, Ph.D.
Xxxxxxx X. Xxxxxx
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2.
Satisfaction of Conditions Applicable to Purchaser. The
conditions and obligations of the Purchaser set forth in Section 6.02 of the
Agreement shall be satisfied or deemed satisfied as follows:
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(1)
The representations, warranties and covenants of the Seller are confirmed to be
true and correct as of the date of the closing and shall continue following the
closing as set forth in the Stock Purchase Agreement.
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(2)
There is no litigation commenced or threatened against
the Seller, the Company or the Purchaser regarding this transaction.
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(3)
Legal Letter. The Seller has received from Seller”s
patent counsel a letter of advice dated March 29, 2002, directed to Seller, a
copy of which is attached hereto as Exhibit A, and Seller has confirmed
to the Purchaser that the Company (EnviroWall, Inc.) has the exclusive right to
use the Owned Intellectual Property and the Licensed Intellectual Property, as
identified in the Stock Purchase Agreement, and that Seller”s patents,
identified in the Stock Purchase Agreement, are owned as follows:
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Xxxxx X. Xxxxxx |
89% undivided interest |
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Four members
of the Xxxxxxx family |
10% undivided interest |
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EnviroWall, Inc. |
1% undivided interest |
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Seller
represents and warrants that all of the Moffetts” interest in and to the
patents have been exclusively licensed to the Seller. In addition, Seller
represents and warrants that the shares to be issued to the Xxxxxxx”s
pursuant to paragraph 3 of this Memorandum, will fully satisfy the conditions of
that certain Mutual Agreement effective December 28, 2001, by and between Seller
and the Moffetts. Should any dispute ever be asserted by the Moffetts regarding
the number of Republic shares issued or issuable to enforce and/or maintain the
aforementioned Mutual Agreement after closing, it will be the Seller”s sole
responsibility to satisfactorily resolve such matters and in doing so the Seller
will indemnify and hold harmless the Company, Republic, its officers, employees
and directors. Seller has exclusively licensed to the Company the right to use
and practice the inventions described in the patents such that the Company is
the sole person or entity authorized to practice the inventions described in the
patents. Seller”s license to EnviroWall, Inc. is the Amended License
Agreement dated effective May 1, 2002, a copy of which is attached hereto as
Exhibit B. The foregoing is satisfactory to Purchaser. |
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(4)
Purchaser has received, reviewed and finds acceptable
the financial statements for EnviroWall, Inc., including the audit report and
financial statement footnotes, to fulfill the obligations set forth in Section
6.02(d) of the Stock Purchase Agreement.
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(5)
Work in Progress. Purchaser accepts and is satisfied
with EnviroWall, Inc.“s progress towards generating revenue producing
contracts or other work and waives any right to require additional revenue
contracts.
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(6)
Seller Royalty. Seller’s right to receive royalty
on the revenue from the Owned Intellectual Property or Licensed Intellectual
Property has been satisfactorily modified and set forth in Exhibit B
attached hereto.
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(7)
Conversion of Melman Note. The note of EnviroWall, Inc.
and/or Xxxxx X. Xxxxxx to Xxxxx X. Xxxxxx for $250,000 plus accrued interest is
being converted into 1,700,000 shares of the common stock of Purchaser effective
on the closing date of the Stock Purchase Agreement.
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(8)
Purchaser has completed the sale of at least $500,000 of
common stock to Accredited Investors, and Seller waives any right to require
additional proceeds from such sale.
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(9)
Purchaser and Seller are aware of no circumstance,
change in, or affect on, the business since the date of the signing of the Stock
Purchase Agreement which has, or will have, a Material Adverse Affect (as
defined in the Agreement) on EnviroWall, Inc.
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(10)
Purchaser has received all certificates and documents
that it requires in order to complete this transaction.
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(11)
From and after the date of the completion of this
transaction, the directors of EnviroWall, Inc. shall be as follows:
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Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
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From
and after the date of completion of the transaction, the officers of EnviroWall,
Inc. shall be:
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President |
Xxxxx X. Xxxxxx |
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Secretary |
Xxxxx X. Xxxxxx |
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Treasurer |
Xxxxxxx X. Xxxxxx |
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(12)
As stated above, Xxxxx X. Xxxxxx and EnviroWall, Inc.
have completed and signed the Amended License Agreement, a copy of which is
attached as Exhibit B, which agreement is acceptable to Purchaser.
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(13)
Disclosure Schedule. Seller’s Disclosure Schedule,
as described in the Agreement, has been completed and delivered to Purchaser.
The Disclosure Schedule is complete and accurate and does not omit any
information necessary to make information included in the Disclosure Schedule
not misleading.
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3.
Delivery of Purchaser’s Securities. Within ten
(10) days after the date of this Closing Memorandum, Republic Resources, Inc.
shall cause to be delivered the following certificates representing its
restricted common stock in full satisfaction of its obligations to Seller and
others under this Stock Purchase Agreement:
Name
Number of Shares
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Xxxxx X. Xxxxxx |
7,208,000 |
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Xxxxx Xxxxxx Xxxxxxx |
160,000 |
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Xxxxx Xxxxxxx Xxxxxxx |
160,000 |
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Xxxxx Xxxxxxx Xxxxxx |
160,000 |
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Xxxxx X. Xxxxxx |
1,700,000 |
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4.
Completion of Transaction. The foregoing matters are
understood, agreed and accepted by each of the undersigned and constitute a
waiver or approval of the foregoing matters in connection with completion of the
acquisition of 100% of the outstanding voting securities of EnviroWall, Inc. by
Republic Resources, Inc. in accordance with the Stock Purchase Agreement dated
April 16, 2002, as subsequently amended or revised. By signing below, each of
the parties represents to each of the other parties that the matters stated are
true and complete and that the Stock Purchase Agreement shall be completed and
closed as of June 24, 2002.
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PURCHASER:
REPUBLIC RESOURCES, INC.
By /s/ Xxxxxxx X.
Xxxxxx
Xxxxxxx X. Xxxxxx, President
SELLER:
XXXXX X. XXXXXX
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
ENVIROWALL, INC.
By /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx, President
XXXXX X. XXXXXX
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
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