STOCK PURCHASE AGREEMENT BY AND AMONG FLUID MEDIA NETWORKS, INC. (“BUYER”), TRUSONIC, INC., (THE “COMPANY”), AND CERTAIN STOCKHOLDERS OF TRUSONIC, INC. (“SELLERS”) OCTOBER 17, 2007
Exhibit
10.1
BY
AND AMONG
(“BUYER”),
TRUSONIC,
INC.,
(THE
“COMPANY”),
AND
CERTAIN
STOCKHOLDERS OF TRUSONIC, INC.
(“SELLERS”)
OCTOBER
17, 2007
TABLE
OF CONTENTS
TABLE
OF
CONTENTS
I.
DEFINITIONS.
|
1
|
|
1.01
|
Certain
Definitions
|
1
|
1.02
|
Interpretation
|
10
|
II.
SALE
AND TRANSFER OF SHARES; CLOSING
|
10
|
|
2.01
|
Sale
and Transfer of Shares
|
10
|
2.02
|
Purchase
Price
|
10
|
2.03
|
Closing
|
12
|
2.04
|
Closing
Deliveries
|
12
|
2.05
|
Option
holders
|
13
|
III.
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY AND SELLERS
|
14
|
|
3.01
|
Due
Organization; Subsidiaries; Etc.
|
14
|
3.02
|
Capitalization
|
14
|
3.03
|
Authorization;
Good Title Conveyed
|
15
|
3.04
|
Financial
Statements
|
15
|
3.05
|
No
Undisclosed Liabilities
|
16
|
3.06
|
Compliance
with Law; Licenses
|
16
|
3.07
|
No
Conflicts
|
17
|
3.08
|
Contracts
|
18
|
3.09
|
Legal
Proceedings; Orders
|
20
|
3.10
|
Taxes
|
20
|
3.11
|
Absence
of Certain Changes
|
21
|
3.12
|
Employee
Benefit Plans
|
23
|
3.13
|
Intellectual
Property
|
25
|
3.14
|
Environmental
Matters
|
28
|
3.15
|
Labor
Matters
|
29
|
3.16
|
Brokers
and Finders
|
31
|
3.17
|
Condition
and Sufficiency of Assets
|
31
|
3.18
|
Books
and Records
|
31
|
3.19
|
Real
Properties
|
31
|
3.20
|
Tangible
Property
|
32
|
3.21
|
Employees
|
33
|
3.22
|
Insurance
|
33
|
3.23
|
Banking
Relationships
|
33
|
3.24
|
Insolvency
Proceedings
|
33
|
3.25
|
Territorial
Restrictions
|
33
|
3.26
|
Customers
|
34
|
3.27
|
Suppliers
|
34
|
3.28
|
Distributors
|
34
|
3.29
|
Accounts
Receivable
|
34
|
3.30
|
Inventory
|
34
|
i
3.31
|
Transactions
with Certain Persons
|
35
|
IV.
REPRESENTATIONS
AND WARRANTIES OF BUYER
|
36
|
|
4.01
|
Organization
of Buyer; Authorization
|
36
|
4.02
|
No
Conflicts
|
36
|
4.03
|
Legal
Proceedings; Orders
|
36
|
4.04
|
Brokers
and Finders
|
37
|
4.05
|
Investment
Intent, etc
|
37
|
V. COVENANTS AND AGREEMENTS OF SELLERS AND THE COMPANY |
37
|
|
5.01
|
Release
|
37
|
5.02
|
Landmark
Loans
|
38
|
5.03
|
Xxxxxxxx
Bonus
|
38
|
5.04
|
Access
to Information
|
38
|
VI.
INDEMNIFICATION;
REMEDIES
|
38
|
|
6.01
|
Survival
of Representations and Warranties
|
38
|
6.02
|
Indemnification
by Sellers
|
38
|
6.03
|
Indemnification
by Buyer
|
39
|
6.04
|
Procedures
for Indemnification
|
39
|
6.05
|
Indemnification
Limitations
|
41
|
6.06
|
Subrogation
|
41
|
6.07
|
No
Double Recovery
|
41
|
6.08
|
Treatment
of Indemnity Payments Between the Parties
|
41
|
6.09
|
Reduction
of Losses
|
41
|
VII.
CERTAIN
TAX MATTERS
|
42
|
|
7.01
|
Filing
of Tax Returns
|
42
|
7.02
|
Tax
Contests
|
42
|
VIII.
MISCELLANEOUS
|
43
|
|
8.01
|
Expenses
|
43
|
8.02
|
Public
Announcements
|
43
|
8.03
|
Appointment
of Seller Representative as Attorney-in-Fact
|
43
|
8.04
|
Successors
|
43
|
8.05
|
Further
Assurances
|
44
|
8.06
|
Waiver
|
44
|
8.07
|
Entire
Agreement; Amendment
|
44
|
8.08
|
Governing
Law
|
44
|
8.09
|
Consent
to Jurisdiction
|
44
|
8.10
|
Assignment
|
44
|
8.11
|
Notices
|
44
|
8.12
|
Headings
|
45
|
8.13
|
Counterparts
|
45
|
8.14
|
Schedules
|
45
|
ii
8.15
|
Severability
|
45
|
8.16
|
Advice
of Counsel
|
45
|
8.17
|
No
Third?Party Beneficiaries
|
46
|
Exhibits
Exhibit
A Form
of Promissory Note
Exhibit
B Form
of Security Agreement
Exhibit
C Form
of Employment Agreement
Exhibit
D Form
of Consulting Agreement
Exhibit
E Known
Liabilities
iii
SCHEDULES
[TO
BE INSERTED]
iv
This
STOCK PURCHASE AGREEMENT (this “Agreement”) is made as of October 17,
2007 by and among Fluid Media Networks, Inc., a Nevada corporation
(“Buyer”), Trusonic Inc., a Delaware corporation (the “Company”),
Xxxxxx X. Xxxx and the other Stockholders whose names appear on Schedule
2.01
attached to and made a part of this Agreement (each a “Seller” and
collectively, “Sellers”).
RECITALS
WHEREAS,
the Company owns and operates
the Business (as defined in Section 1.01 below) with its principal place
of
business in California;
WHEREAS,
Sellers own 2,744,269.70
shares of Common Stock, constituting one hundred percent (100%) of all of
the
issued and outstanding capital stock of the Company, and each of the Sellers
has
approved, and deems it advisable and in the best interests of such Seller,
to
consummate, the sale of 2,744,269.70 shares of Common Stock of the Company,
constituting One Hundred Percent (100%) of the issued and outstanding capital
stock of the Company, calculated on a fully diluted basis (collectively,
the
“Shares”) to Buyer;
WHEREAS,
each of the Boards of
Directors of Buyer and the Company has approved, and deems it advisable and
in
the best interests of its respective stockholders to consummate, the acquisition
of the Shares by Buyer upon the terms and subject to the conditions set forth
herein.
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing and the mutual representations,
warranties, covenants and agreements set forth herein, intending to be legally
bound hereby, the parties hereto agree as follows:
I.
DEFINITIONS.
1.01 Certain
Definitions. For
purposes of this Agreement, the following terms shall have the following
meanings:
“Accounts
Receivable” shall have the meaning set forth in Section 3.29.
“Affiliate”
of any Person shall mean a Person which directly or indirectly through one
or
more intermediaries, controls, or is controlled by, or is under common control
with, such Person (whether by voting securities, contract or
otherwise).
“Agreement”
shall have the meaning set forth in the Preamble.
“Artists
Guild” means any guild, union, or collective bargaining entity representing
artists, performers, or other talent, including, without limitation, American
Federation of Musicians, Songwriters Guild, American Federation of Television
and Radio Artists, American Society of Media Photographers, Graphic Artists
Guild, Writers Guild of America, and Screen Actors Guild.
1
“Benefit
Plans” shall have the meaning set forth in
Section 3.12(a).
“Business”
means the business conducted by the Company of providing background music
service for business locations worldwide.
“Business
Day” shall mean any day that is not a Saturday, Sunday or statutory holiday
in the State of California.
“Buyer”
shall have the meaning set forth in the Preamble.
“Buyer
Indemnified Party” shall have the meaning set forth in Section 6.02.
“CERCLA”
shall mean the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. § 9601 et seq., as amended and in effect as of the
Closing Date.
“Cleanup”
shall mean all actions required by applicable Environmental Laws to investigate,
remove, remediate, xxxxx, neutralize, treat, dispose, prevent Releases or
threatened Releases of Hazardous Substances, implement institutional or
engineering controls, or conduct post-remedial monitoring and care in connection
with the remediation of Hazardous Substances on real property.
“Closing”
shall have the meaning set forth in Section 2.03.
“Closing
Cash Consideration” shall have the meaning set forth in Section
2.02(a)(ii).
“Closing
Date” shall mean the date and time as of which the Closing actually takes
place.
“Closing
Date Net Working Capital” shall have the meaning set forth in Section
2.02(c).
“Closing
Date Net Working Capital Statement” shall have the meaning set forth in
Section 2.02(c).
“COBRA”
shall have the meaning set forth in Section 3.12(d).
“Code”
shall mean the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.
“Company”
shall have the meaning set forth in the Preamble.
“Common
Stock” shall have the meaning set forth in Section 3.02(a).
“Consulting
Agreement” shall have the meaning set forth in Section 2.04(a)(v).
2
“Contingent
Employment Term” shall have the meaning set forth in Section
2.02(d).
“Contract”
shall mean any agreement, arrangement, commitment, indemnity, indenture,
instrument or lease, including any and all amendments, supplements, and
modifications (whether oral or written) thereto, whether or not in
writing.
“Copyrights”
means all (i) all copyrights, whether or not published, protected or
registered under the Copyright Act of 1909 or the Copyright Act of 1976 (as
either shall be amended from time to time, and any predecessor or successor
statute thereto), applications for registration of copyrights, all works
of
authorship, and all secondary and subsidiary rights therein; (ii) art,
audiovisual works, animations, compilations, collective works, computer software
and programs, data, databases, designs, emblems, films, film clips, graphics,
images, illustrations, likenesses, literary works, logos, motion pictures,
musical compositions, music videos, performances, photographs, pictorial
works,
song lyrics, sound clips, sound
recordings, scripts, screenplays, video
recordings, and all other copyrightable subject matter; (iii) all renewals,
derivative works, enhancements, improvements, modifications, updates, new
releases or other revisions thereof; and (iv) publication rights, display
rights, attribution rights, integrity rights, performance rights (including
digital performance rights), mechanical rights, synchronization rights,
publishing rights, approval rights, reproduction rights, rights to create
derivative works, distribution rights, or moral rights.
“Xxxxxxxx
Bonus” shall mean that certain bonus due and owing to Xxx Xxxxxxxx in the
amount of Eighty Thousand Dollars ($80,000).
“Employment
Agreement” shall have the meaning set forth in Section 2.04(a)(v).
“Environment”
shall have the meaning assigned to that term under CERCLA.
“Environmental
Claim” means any claim, action, cause of action, investigation or written
notice by any Person alleging potential liability (including, without
limitation, potential liability for investigatory costs, Cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries, or penalties) arising out of, based on or resulting from
the
presence or Release of any Hazardous Substances at any location currently
or
formerly owned, operated or leased by the Company or to which Hazardous
Substances generated by the Company have migrated or been sent for
disposal.
“Environmental
Condition” shall refer to any contamination or damage to the environment
caused by or relating to the actual or threatened Release of Hazardous
Substances by the Company or any other Person into the
environment. With respect to claims by employees, independent
contractors or other third parties, Environmental Condition shall also include
the exposure of persons to Hazardous Substances.
“Environmental
Laws” shall mean any state, federal or local laws, ordinances, codes,
regulations, statutes, orders, judgments, decrees, permits or licenses relating
to pollution, natural resources, protection of human health or the Environment,
including, without limitation, laws and regulations relating to the use,
treatment, storage, release, disposal or transportation of Hazardous Substances
or the handling and disposal of medical and biological waste.
3
“Environmental
Noncompliance” means material violation of an Environmental
Law.
“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as
amended.
“ERISA
Affiliate” shall mean with respect to any Person (i) any corporation
which is a member of a controlled group of corporations, within the meaning
of
Section 414(b) of the Code, of which that Person is a member, (ii) any
trade or business (whether or not incorporated) which is a member of a group
of
trades or businesses under common control, within the meaning of
Section 414(c) of the Code, of which that Person is a member and
(iii) any member of an affiliated service group, within the meaning of
Section 414(m) and (o) of the Code, of which that Person or any entity
described in clause (i) or (ii) is a member.
“Final
Note Maturity Date” shall mean the final maturity date of each Note, which
date shall be two (2) years from the date each Note is issued.
“Financial
Statements” shall have the meaning set forth in Section
3.04(a).
“GAAP”
shall mean United States generally accepted accounting principles.
“Governmental
Authority” shall mean any United States or foreign government or any agency,
bureau, board, commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government, whether federal, state
or
local, domestic or foreign.
“Hazardous
Substances” shall mean (i) any hazardous or toxic waste, substance or
material defined in any Environmental Law, (ii) asbestos-containing
material, (iii) medical and biological waste, (iv) polychlorinated
biphenyls, (v) petroleum products, including gasoline, fuel oil, crude oil
and constituents of such petroleum products and (vi) any other chemicals,
materials or substances, exposure to which is prohibited, limited, or regulated
by any Environmental Laws.
“Indebtedness”
means (i) all indebtedness for borrowed money or for the deferred purchase
price
of property or services (other than current trade liabilities incurred in
the
ordinary course of business and payable in accordance with customary practices),
and (ii) any other indebtedness that is evidenced by a note, bond, indenture,
debenture or similar instrument.
“Indemnified
Party” shall have the meaning set forth in Section 6.04(a).
“Indemnifying
Party” shall have the meaning set forth in Section 6.04
(a).
“Intellectual
Property” shall have the meaning set forth in
Section 3.13(a).
“Intellectual
Property” shall mean any Marks, Patents, Copyrights, Trade Secrets, Net
Properties, methods, processes, proprietary information, protocols, schematics,
specifications, software, software code (in any form, including source code
and
executable or object code), algorithms, databases, diagrams, drawings, formulae,
techniques, user interfaces, and other forms of technology (whether or not
embodied in any tangible form and including all tangible embodiments of the
foregoing, such as instruction manuals, laboratory notebooks, prototypes,
samples, studies and summaries), owned or used by the Company in the
Business.
4
“Intellectual
Property Rights” shall mean all past, present, and future rights
of the following types, which may exist or be created under the laws of any
jurisdiction in the world: (A) Marks, Patents, Copyrights, Trade Secrets,
Net
Properties; and (B) all rights in or relating to registrations, renewals,
extensions, combinations, divisions, and reissues of, and applications for,
any
of the rights referred to in clause (A), owned, used or held by the Company
in
the Business.
“Interim
Balance Sheet” shall have the meaning set forth in
Section 3.04(a)(iii).
“Inventory”
shall mean all quantities of inventory, including raw materials,
work-in-process, finished goods (whether or not in the possession of the
Company
or Sellers), consigned inventory, replacement and component parts, materials,
supplies and packaging items.
“Knowledge,”
shall mean the knowledge of each Seller and each of the officers and directors
of the Company after diligent inquiry.
“Known
Liabilities” shall mean the matters set forth on Exhibit E
hereto.
“Landmark
Loans” shall mean all Indebtedness arising from that certain: (i) Business
Loan Agreement dated as of January 25, 2006, by and between the Company as
borrower and Landmark National Bank as lender, in the original principal
amount
of One Hundred Fifty Thousand Dollars ($150,000), and (ii) that certain Business
Loan Agreement dated as of June 21, 2004, by and between the Company as borrower
and Landmark National Bank as lender, in the original principal amount of
Two
Hundred Fifty Thousand Dollars ($250,000).
“Law”
shall mean any constitutional provision or any statute or other law, rule
or
regulation of any Governmental Authority and any decree, injunction, judgment,
order, ruling, assessment or writ.
“Leased
Real Property” shall have the meaning set forth in Section 3.19.
“Leased
Tangible Property” shall have the meaning set forth in Section 3.20(b).
“Leases”
shall have the meaning set forth in Section 3.19.
“Legal
Proceeding” shall mean any action, suit, litigation, arbitration, proceeding
(including any civil, criminal, administrative, investigative or appellate
proceeding), hearing, inquiry, audit, examination or investigation commenced,
brought, conducted or heard by or before any court or other Governmental
Authority or any arbitrator or arbitration panel.
“Licenses”
shall mean all licenses, permits, authorizations, approvals, consents and
waivers issued, granted, given or otherwise made available by or under the
authority of any Governmental Authority or pursuant to any Law.
5
“Lien”
shall mean any lien, pledge, mortgage, deed of trust, security interest,
claim,
lease, charge, option, adverse claim, right of first refusal, easement,
servitude, encroachment or other survey defect, transfer restriction or other
encumbrance of any nature whatsoever (including without limitation, any claims
of spouses under applicable community property laws).
“Loss”
or “Losses” means any claim, liability, shortage, damage, diminution in
value, settlement, deficiency, expense (including reasonable attorneys' and
accountants' fees), assessment, Tax, or loss of any kind.
“Marks”
means all names, all assumed fictional business names, trade names, registered
and unregistered trademarks and service marks, logos, brand names, product
names, slogans, and any trademark or service xxxx application therefore and
all
associated goodwill.
“Material
Adverse Effect” shall mean, with respect to any entity or group of entities,
any event, circumstance, condition, change, occurrence, fact or effect that,
individually or in the aggregate, is reasonably expected to be materially
adverse to the condition (financial or otherwise), properties, assets,
liabilities, business, operations, or results of operations of such
entity.
“Material
Contract” shall mean any Contract required to be listed in
Schedule 3.08(a).
“Minimum
Net Working Capital” shall mean One Hundred Eighty Thousand Dollars
($180,000).
“Music
Contracts” shall have the meaning set forth in Section
3.08(a)(i).
“Music
Rights Holder” means any record label, music publisher, songwriter, artist,
photographer, or any other holder of any rights in any sound recording, musical
composition, artwork (including album art, liner notes, and other collateral
works), chart, music database or other Copyright.
“Net
Properties” means all internet web sites, URLs and internet domain
names.
“Net
Working Capital” shall mean the excess of the Company’s current assets over
the Company’s current liabilities, where the Company’s “current assets” are
comprised of all of the Company’s cash, accounts receivable, inventory, current
portion of notes receivable and prepaid expenses, and the Company’s “current
liabilities” are comprised of trade payables, current portion of bank loans and
current portion of accrued trade expenses (each determined in the same manner
and using the same accounting methods, methodologies and principles applied
in
preparing the audited financial statements of the Company for the twelve
(12)
month period ended December 31, 2006).
“Non-Competition
Agreements” shall have the meaning set forth in Section
2.04(a)(vii).
“Note”
and “Notes” shall have the meaning set forth in Section
2.06(e).
6
“X’Xxxxx”
shall have the meaning set forth in Section 2.02(d).
“Option”
or “Options” shall have the meaning set forth in Section 2.05(a)
hereof.
“Option
Holder” or “Option Holders” shall have the meaning set forth in
Section 2.05(a)
“Order”
shall mean any award, decision, injunction, judgment, order, decree, ruling,
writ, subpoena or verdict entered, issued, made or rendered by any Governmental
Authority or by any arbitrator.
“OSHA
Laws” shall mean the Occupational Safety and Health Act, 29 U.S.C. §651 et
seq., each state law corresponding thereto and all applicable laws, now or
hereafter in effect relating thereto.
“Owned
Real Properties” shall have the meaning set forth in Section 3.19.
“Owned
Tangible Property” shall have the meaning set forth in Section 3.20(a).
“Patents”
means all patents, patent applications and extensions, continuations and
renewals thereof and inventions and discoveries that may be
patentable.
“Performance
Rights Society” means any performance rights society or clearinghouse
concerning the performance, reproduction, display, or distribution of
Copyrights, including, without limitation, American Society of Composers,
Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI), Recording Industry
Association of America (RIAA), The Society of European Stage Authors and
Composers (SESAC), SoundExchange, Inc. and The Xxxxx Xxx Agency
(HFA).
“Permanent
Disability” means that such person is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has lasted,
or can
be expected to last, for a continuous period of not less than nine
months.
“Permitted
Liens” shall mean:
(i) mechanics’,
processor’s, materialmen’s, carriers’, warehousemen’s, repairmen’s, landlord’s
and similar Liens arising by operation of Law or arising in the ordinary
course
of business and securing obligations of the Company that are not overdue
for a
period of more than sixty (60) days or are being contested in good faith by
appropriate proceedings diligently pursued, provided that, in the case of
Liens being contested, provision for the payment of such Liens has been made
on
the books of the Company;
(ii) Taxes
which are not yet due or payable or are being contested in good
faith.
“Person”
shall mean any individual, corporation, limited liability company, partnership,
firm, joint venture, association, joint-stock company, trust, unincorporated
organization, or other organization, whether or not a legal entity, and any
Governmental Authority.
7
“Preferred
Stock” shall have the meaning set forth in Section 3.02(a).
“Proprietary
Rights Agreement” shall have the meaning set forth in Section 3.21.
“Publicity
Rights” shall mean all publicity rights or privacy rights (or waivers or
quitclaims thereof) of any person or entity related thereto.
“Purchase
Price” shall have the meaning set forth in
Section 2.02(a).
“Related
Person” shall mean with respect to a particular individual:
(a) each
other member of such individual’s Family;
(b) any
Person that is directly or indirectly controlled by such individual or one
or
more members of such individual’s Family;
(c) any
Person in which such individual or members of such individual’s Family hold
(individually or in the aggregate) a Material Interest; and
(d) any
Person with respect to which such individual or one or more members of such
individual’s Family serves as a director, officer, partner, executor, or trustee
(or in a similar capacity).
With
respect to a specified Person other than an individual:
(a) any
Affiliate of such specified Person;
(b) any
Person that holds a Material Interest in such specified Person;
(c) each
Person that serves as a director, officer, partner, executor, or trustee
of such
specified Person (or in a similar capacity);
(d) any
Person in which such specified Person holds a Material Interest;
(e) any
Person with respect to which such specified Person serves as a general partner
or a trustee (or in a similar capacity); and
(f) any
Related Person of any individual described in clause (b) or (c).
For
purposes of this definition, (a) the “Family” of an individual
includes (i) the individual, (ii) the individual’s spouse and former
spouses, (iii) any other natural person who is related to the individual or
the individual’s spouse within the second degree, and (iv) any other
natural person who resides with such individual, and (b) “Material
Interest” means direct or indirect beneficial ownership (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934) of voting securities
or other voting interests representing at least fifty percent (50%) of the
outstanding voting power of a Person or equity securities or other equity
interests representing at least 50% of the outstanding equity securities
or
equity interests in a Person.
8
“Release”
and “Releases” shall have the meaning assigned to that term under
CERCLA.
“Releasee”
and “Releasees” shall have the meaning set forth in Section 5.01.
“Reports”
shall have the meaning set forth in Section 3.14(g).
“Representative”
means, as to any Person, such Person’s Affiliates and its and their directors,
officers, employees, agents, advisors (including without limitation, financial
advisors, counsel and accountants) and direct and indirect controlling
persons.
“Requirement
of Law” shall mean, as to any Person, the certificate or articles of
incorporation and by-laws, partnership agreements, articles or certificate
of
formation or organization, limited liability company or operating agreement,
or
other organizational or governing documents of such Person, and any applicable
law, treaty, ordinance, order, judgment, rule, decree, regulation, or
determination of an arbitrator, court, or other Governmental Authority,
including, without limitation, rules, regulations, orders, and requirements
for
permits, licenses, registrations, approvals, or authorizations, in each case
as
such now exist or may be hereafter amended and are applicable to or binding
upon
such Person or any of its property or to which such Person or any of its
property is subject.
“Returns”
shall have the meaning set forth in Section 3.29.
“Security
Agreement” shall have the meaning set forth in Section
2.02(a)(ii)
“Seller
Indemnified Party” shall have the meaning set forth in Section 6.03.
“Seller
Representative” shall have the meaning set forth in Section 8.03(a).
“Sellers”
shall have the meaning set forth in the Preamble.
“Stockholders”
shall mean the Sellers and all of the other holders of capital stock of the
Company.
“Shares”
shall have the meaning set forth in the Recitals.
“Straddle
Period Taxes” shall have the meaning set forth in Section 6.02(b).
“Tangible
Property” shall have the meaning set forth in Section 3.20(d).
“Tangible
Property Leases” shall have the meaning set forth in Section 3.20(b).
“Tax”
or “Taxes” shall mean any and all taxes (whether Federal, state, local or
foreign), including, without limitation, income, profits, franchise, gross
receipts, payroll, sales, employment, use, property, withholding, excise,
occupation, value added, ad valorem, transfer and other taxes, duties or
assessments of any nature whatsoever, together with any interest, penalties
or
additions to tax imposed with respect thereto, imposed, assessed or collected
by
or under the authority of any Governmental Authority or payable pursuant
to any
tax-sharing agreement or any other contract relating to the sharing or payment
of any such tax.
9
“Tax
Audits” shall have the meaning set forth in Section 7.02(a).
“Tax
Returns” shall mean any returns, (including any information returns),
reports, statements, notices, claims for refund, forms or other documents
or
information (including any schedule or attachment thereto, and including
any
amendment thereto) filed with or submitted to, or required to be filed with
or
submitted to, any Governmental Authority in connection with the determination,
assessment, collection or payment of any Tax or in connection with the
administration, implementation or enforcement of, or compliance with, any
legal
requirement relating to any Tax.
“Xxxx”
shall have the meaning set forth in Section 2.04(b)(vi).
“Termination
Event” shall have the meaning set forth in Section 2.02(d).
“Transaction
Documents” shall mean this Agreement, the Employment Agreements, the Note,
the Security Agreement, and other documents related to the transactions
contemplated by this Agreement.
“Trade
Secrets” means all know-how, trade secrets, confidential or proprietary
information, data, customer lists, software, technical information, data,
process technology, plans, drawings and blue prints and, including without
limitation, any other information entitled to protection under Requirements
of
Law as a trade secret.
“WARN
Act” shall have the meaning set forth in Section 3.15(j).
“Withholding
Deficiency” shall have the meaning set forth in Section
2.05(c).
1.02 Interpretation. The
words “hereof,” “herein,” “hereby” and “hereunder,” and words of like import,
refer to this Agreement as a whole and not to any particular
Section hereof. References herein to any Section or Schedule
refer to such Section of, or such Schedule to, this Agreement, unless the
context otherwise requires. All pronouns and any variations thereof
refer to the masculine, feminine or neuter gender, singular or plural, as
the
context may require.
II.
SALE
AND TRANSFER OF SHARES; CLOSING.
2.01 Sale
and Transfer of Shares. Subject
to the terms and conditions of this Agreement, at the Closing, Sellers will
cause the Stockholders to sell, convey, assign, transfer and deliver to Buyer,
and Buyer will purchase from each Stockholder, the number of Shares set forth
opposite such Stockholder’s name on Schedule 2.01, which in the aggregate
shall constitute One Hundred Percent (100%) of the issued and outstanding
capital stock of the Company, calculated on a fully diluted basis, free and
clear of all Liens.
2.02 Purchase
Price.
10
(a) The
purchase price for the Shares (the “Purchase Price”) shall be payable as
follows:
(i) An
aggregate of Four Million Dollars ($4,000,000), of which Five Hundred Thousand
Dollars ($500,000) has been deposited by Buyer into an escrow account (the
“Escrowed Funds” and together with the balance of the foregoing cash
payment, the “Closing Cash Consideration”), payable by Buyer to each
Stockholder in such amounts and in accordance with Schedule 2.02(b);
plus
(ii) Two
Million Dollars ($2,000,000) payable by delivery of one or more promissory
notes, in substantially the form attached hereto as Exhibit A (each, a
“Note,” and collectively, the “Notes”), to each of the
Stockholders in the amounts specified in Schedule 2.02(a), such Notes to
be secured by Buyer’s assets pursuant to the security agreement (the “
Security Agreement”), substantially in the form attached hereto at
Exhibit B.
(b) At
the Closing, the Closing Cash Consideration shall be paid by Buyer to each
Stockholder or the Company, as applicable, by wire transfer of immediately
available funds to the accounts specified by the Stockholders or the Company
in
Schedule 2.02(b). The parties acknowledge and agree that, as
set forth more fully in Section 2.05 hereof, the Closing Cash Consideration
otherwise payable to certain of the Stockholders will be paid directly to
the
Company in repayment of the Option Notes with any portion of the Closing
Cash
Consideration remaining after payment in full of the applicable Option Note,
less any required withholdings, to be wired by the Company to the applicable
Stockholder within three (3) business days of the Closing Date.
(c) Net
Working Capital Purchase Price Adjustment. On the Closing Date,
Seller Representative shall deliver to Buyer a statement (the “Closing Date
Net Working Capital Statement”) prepared on a basis consistent with the
Company's Interim Balance Sheet (as hereinafter defined), setting forth the
Net
Working Capital of Company as of the Closing Date (the “Closing Date Net
Working Capital”), including the amount of cash (net of checks paid but
uncleared), if any, to be delivered to the Company at Closing. If the
Closing Date Net Working Capital is less than the Minimum Net Working Capital,
then the Closing Cash Consideration shall be decreased dollar-for-dollar
by the
amount, if any, by which the Closing Date Net Working Capital is less than
the
Minimum Net Working Capital.
(d)
Additional
Purchase Price
Adjustment. In the event that subsequent to the execution of the
Employment Agreement but prior to the one (1) year anniversary of the date
hereof (the “Contingent Employment Term”), Xxxxxx X. X’Xxxxx (“X’Xxxxx”) either
resigns as an employee of the Company (other than a resignation pursuant
to
Section 2.04(a)(ii)) or is terminated for Cause (as such term is defined
in the
Employment Agreement) (either, a “Termination Event”), then the principal amount
under the Note issued to X’Xxxxx shall be reduced as follows: (i) if any such
Termination Event occurs on or prior to the six (6) month anniversary of
the
Closing Date, the first installment under the Note issued to X’Xxxxx shall be
deemed forfeited by X’Xxxxx, and X’Xxxxx shall have no right to receive the
first installment under the Note issued to X’Xxxxx; or (ii) if any such
Termination Event occurs after the six (6) month anniversary of the Closing
Date
(but during the Contingent Employment Term), then the first installment under
the Note issued to X’Xxxxx shall be reduced to an amount equal to the product
determined by multiplying the amount of the first installment otherwise payable
to X’Xxxxx under his Note (subject to any reductions pursuant to Article VI
hereof) by a fraction, the numerator of which is the number of calendar days
lapsed since the Closing Date and the date of the Termination Event and the
denominator of which is three hundred sixty-five (365).
11
2.03 Closing. The
purchase and sale (the “Closing”) provided for in this Agreement will
take place at the offices of Buyer’s counsel, Xxxxx Xxxxxxx, LLP, at The Gas
Company Tower, 000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx,
Xxx
Xxxxxxx, Xxxxxxxxxx 00000, on the date hereof or at such other time or on
such
other date or at such other place as may be mutually agreed by the
parties.
2.04 Closing
Deliveries. At
the Closing:
(a) Sellers
will deliver to Buyer:
(i) certificates
representing the Shares, duly and validly endorsed (or accompanied by duly
and
validly executed stock powers) for transfer to Buyer;
(ii) the
written resignations of each of the officers and directors of the Company
set
forth on Schedule 2.04(a)(ii), effective as of the Closing
Date;
(iii) (A)
a certificate of good standing issued by the Secretary of State of Delaware,
and
(B) a certificate of good standing issued by the Secretary of State of each
of
the jurisdictions where the Company is qualified or licensed to transact
business as a foreign entity, as set forth on Schedule
2.04(a)(iii)(B);
(iv) written
evidence reasonably satisfactory to Buyer that all fees, commissions, and
charges of any broker, finder or investment banker engaged by the Company
and
any Seller in connection with the transactions contemplated by this Agreement
have been or at the Closing will be paid in full, and the Company and Sellers
have been released from any further obligations related thereto;
(v) the
employment agreement (“Employment Agreement”), in substantially the form
set forth on Exhibit C between the Company and X’Xxxxx, duly and
validly executed by X’Xxxxx;
(vi) the
consulting agreement (“Consulting Agreement”), in substantially the form
set forth on Exhibit D between the Company and TEBOGROUP, Inc., duly and
validly executed by the TEBOGROUP, Inc.
(vii) written
evidence that all of the Known Liabilities have been resolved to the
satisfaction of Buyer in its sole and absolute discretion, provided, however,
that if, notwithstanding the best efforts of Sellers and the Company, the
Company and Sellers are unable to resolve any of the Known Liabilities prior
to
the Closing, Sellers shall fully cooperate with Buyer in resolving such Known
Liabilities following the Closing Date, provided, however, that the Buyer
shall
consult with the Seller Representative regarding the continuing defense and
settlement of each of the Known Liabilities, and that subsequent to the Closing,
the Known Liabilities may not be settled without the joint written approval
of
the Buyer and the Seller’s Representative (provided, however, the consent of
Seller’s Representative shall not be unreasonably withheld);
12
(viii) written
consents of the parties set forth on Schedule 3.07, provided, however,
that Buyer may proceed with the Closing without receipt of such written consents
and without written waiver, the failure to provide such consents not being
considered a breach by the Company or Stockholders of this
Agreement. After the Closing, Company and Stockholders will continue
to use reasonable best efforts to obtain any consents not delivered at
Closing.
(ix) the
Closing Date Net Working Capital Statement pursuant to Section
2.02(c);
(x) written
evidence reasonably satisfactory to Buyer that any Related Party Agreements
have
been terminated and that the Company and Sellers have been released from
any
further obligations related thereto; and
(xi) all
other previously undelivered documents required to be delivered by Sellers
or
the Company to Buyer at or prior to the Closing in connection with the
consummation of the transactions completed by this Agreement.
(b) Buyer
will deliver:
(i) to
each Seller and the Company, as applicable, the Closing Cash Consideration
pursuant to Section 2.02(a)(i);
(ii) to
each Seller, the Notes pursuant to Section 2.02(a)(ii), duly and validly
executed by the Buyer;
(iii) to
Sellers, the Security Agreement pursuant to Section 2.02(a)(ii), duly and
validly executed by the buyer;
(iv) to
X’Xxxxx, the Employment Agreement pursuant to Section 2.04(a)(v), duly and
validly executed by the Company;
(v) to
TEBOGROUP, Inc., the Consulting Agreement pursuant to Section 2.04(a)(vi),
duly
and validly executed by the Company; and
(vi) to
Sellers and/or the Company, as applicable, all other previously undelivered
documents required to be delivered by Buyer to Sellers or the Company at
or
prior to the Closing in connection with the consummation of the transactions
completed by this Agreement.
2.05 Option
holders. Immediately prior to the Closing Date, the Company had
options outstanding representing Two Hundred Eight Thousand (208,000) shares
of
the Company’s Common Stock (each, an “Option” and collectively, the
“Options”). On or before the Closing Date, each holder of an
Option (each, an “Option Holder” and collectively, the “Option
Holders”), has exercised his/her/its respective Option by delivering to the
Company the exercise price for such Options or delivering to the Company
a
promissory note in an amount equal to the exercise price for the Common Stock
subject to such Option (each, an “Option Note”). Each Option
Holder whose Option was exercised by executing and delivering an Option Note
to
the Company has authorized the repayment of such Option Note by instructing
the
Buyer to deliver to the Company at the Closing the Closing Cash Consideration
otherwise payable to such Option Holder pursuant to Section 2.01
hereof. Upon receipt of such Closing Cash Consideration, the Company
shall retain from such Closing Cash Consideration an amount equal to the
principal amount of each Option Note in satisfaction of such Option Note
and
remit any portion of the Closing Cash Consideration remaining after payment
of
the Option Note to the respective Option Holder, less any required
withholdings.
13
III.
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY AND SELLERS.
Except
as
set forth in the Disclosure Schedules to this Article III, the Company and
Sellers hereby represent and warrant, as of the Closing Date, severally and
not
jointly, to Buyer as follows:
3.01 Due
Organization; Subsidiaries; Etc.
(a) The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all necessary corporate or
other
power and authority: (i) to conduct its Business in the manner
in which it is currently being conducted and as proposed to be conducted;
and
(ii) to own and use its assets.
(b) The
Company is qualified or licensed to do business as a foreign entity, and
is in
good standing under the laws of all jurisdictions where the nature of its
business requires such qualification.
(c) The
Company has no subsidiaries. The Company does not directly or
indirectly own and has not owned any securities or other interest of any
other
Person. The Company is not and has not been a general partner of any
general partnership, limited partnership or other Person or a participant
in any
joint venture or other similar arrangement.
3.02 Capitalization.
(a) The
authorized capital stock of the Company consists of (i) nine million (9,000,000)
shares of common stock, $0.00001 par value per share (“Common Stock”), of
which 2,774,670 shares are issued and outstanding and (ii) one million
(1,000,000) shares of preferred stock, $0.00001 par value per share
(“Preferred Stock”), none of which are issued and
outstanding. The Shares comprise all of the issued and outstanding
capital stock of the Company. Sellers are the record and beneficial
owners and holders of all of the Shares.
(b) Each
Seller represents, severally and not jointly, that at the Closing such Seller’s
Shares shall be free and clear of all Liens other than transfer restrictions
under federal and state securities laws. No Seller owns any
securities issued by, or other obligations of, the Company other than those
listed on Schedule 2.01 or contemplated by this Agreement or another
Transaction Document. No legend or other reference to any purported
Lien appears upon any certificate representing capital stock or other equity
securities of the Company other than transfer restrictions under federal
and
state securities laws.
14
(c) The
Shares have been duly authorized and validly issued, are fully paid and
nonassessable, and were issued in compliance with all applicable federal
and
state securities laws, and upon transfer to Buyer, shall be free of restrictions
on transfer other than restrictions imposed by applicable federal or state
securities laws or by any other Transaction Documents. Except as set
forth on Schedule 3.02(c), there are no outstanding options, warrants,
restricted stock agreements, rights (including conversion, exchange or
preemptive rights), or agreements of any kind for the purchase or acquisition
from the Company of any of its capital stock or other securities, or proxy
or
stockholder agreements or other agreements with respect to the voting of
any of
the Company’s capital stock or other securities, and the Company is under no
obligation, nor has it granted any rights, to register any class of its capital
stock or other securities.
(d) On
or before the Closing Date, all of the Company’s outstanding Options will have
been exercised or terminated. As such, on the Closing Date there
shall be no outstanding Options to purchase any securities of the
Company.
3.03 Authorization;
Good Title Conveyed.
(a) The
Company and each Seller has all requisite power and authority to execute
and
deliver this Agreement, and any other Transaction Document to which it is
a
party, and to consummate the transactions contemplated hereby and thereby,
and
has taken all necessary corporate or other action to authorize the execution,
delivery and performance of this Agreement and the other Transaction Documents
to which it is a party. This Agreement and the Transaction Documents
have been duly and validly executed and delivered by the Company and each
Seller
party thereto and constitute the legal, valid and binding agreements of the
Company and such Seller, enforceable against the Company and such Seller
in
accordance with their terms, except as such enforceability may be limited
by
applicable bankruptcy, moratorium, insolvency, reorganization, fraudulent
conveyance or other Laws affecting the enforcement of creditors’ rights
generally, by general equitable principles, including, without limitation,
those
limiting the availability of specific performance, injunctive relief and
other
equitable remedies.
(b) The
stock certificates and stock powers to be executed and delivered by Sellers
to
Buyer at the Closing will be valid and binding obligations of Sellers,
enforceable in accordance with their respective terms, and will effectively
vest
in Buyer good, valid and marketable title to all the Shares to be transferred
to
Buyer pursuant to and as contemplated by this Agreement free and clear of
any
and all Liens other than transfer restrictions under state and federal
securities laws.
3.04 Financial
Statements.
(a) Schedule
3.04 contains the following financial statements of the Company
(collectively, the “Financial Statements”):
15
(i) The
audited balance sheet of the Company as of December 31, 2006, and the related
[audited] statements of operations, stockholders’ equity and cash flows for the
fiscal year then ended (together with accompanying notes thereto);
(ii) The
audited balance sheet of the Company as of December 31, 2004 and 2005, and
the
related [audited] statements of operations, stockholders’ equity and cash flows
for the fiscal years then ended (together with accompanying notes thereto);
and
(iii) The
internally prepared balance sheet of the Company as of August 31, 2007 (the
“Interim Balance Sheet”) and the related statements of operations,
stockholders’ equity and cash flows for the period from January 1, 2007 through
August 31, 2007.
(b) The
Financial Statements are consistent with the books and records of the Company,
and fairly present in all material respects the financial condition, assets
and
liabilities of the Company as of the dates and periods indicated (subject
to, in
the case of interim financial statements, normal and customary year-end
adjustments), and were prepared in accordance with GAAP (except as otherwise
indicated therein or in the notes thereto). The books and records of
the Company, all of which have been made available to Buyer, are complete
and
correct and have been properly kept and maintained.
3.05 No
Undisclosed Liabilities. The
Company does not have any obligation or liability of any nature (whether
known
or unknown, matured or unmatured, fixed or contingent) which is required
by GAAP
to be listed as a liability or reserved for on its balance sheet in excess
of
Five Thousand Dollars ($5,000) other than those set forth in the Financial
Statements or those that will be taken into account in the Closing Date Net
Working Capital calculation. All Indebtedness owed to the Company by
any Seller or any Related Person of any Seller will be paid in full on or
before
the Closing Date.
3.06 Compliance
with Law; Licenses.
(a) Except
as set forth in Schedule 3.06(a):
(i) the
Company is in compliance in with, and immediately following the consummation
of
the transactions contemplated herein and in the Transaction Documents, will
be
in compliance with, each Law applicable to it and/or to the conduct or operation
of its Business and its ownership and use of any of its assets, except where
failure to so comply would not be reasonably expected to have a Material
Adverse
Effect;
(ii) to
the Knowledge of the Company and Sellers, no event has occurred or circumstance
exists that (with or without notice or lapse of time) (A) would reasonably
be expected to constitute or result in a violation by the Company of, or
a
failure on the part of the Company to comply with, any Law, or (B) would
reasonably be expected to give rise to any obligation on the part of the
Company
to undertake, or to bear all or any portion of the cost of, any remedial
action
of any nature in any such case; and
(iii) the
Company has not received any written notice from any Governmental Authority
or
any other Person regarding (A) any actual, alleged, possible, or potential
violation of, or failure to comply with, any Law, or (B) any actual,
alleged, possible, or potential obligation on the part of the Company to
undertake, or to bear all or any portion of the cost of, any remedial action
of
any nature.
16
(b) Schedule
3.06(b) contains a complete and accurate list of each material License that
is held by the Company. Each License listed in Schedule
3.06(b) is valid and in full force and effect, and the Company has delivered
true, correct and complete copies of all such Licenses to
Buyer. Except as set forth in Schedule 3.06(b):
(i) the
Company is in compliance in all material respects with the terms and
requirements of the Licenses identified in Schedule 3.06(b);
(ii) no
event has occurred or circumstance exists that may (with or without notice
or
lapse of time or both) (A) constitute or result directly or indirectly in a
violation of or a failure to comply with any term or requirement of any License
listed in Schedule 3.06(b), or (B) result, directly or
indirectly, in the revocation, withdrawal, suspension, cancellation or
termination of, or any material modification to, any License listed in
Schedule 3.06(b); and
(iii) the
Company has not received any written notice from any Governmental Authority
or
any other Person regarding (A) any violation of, or failure to comply with,
any term or requirement of any License listed on Schedule 3.06(b), or
(B) any revocation, withdrawal, suspension, cancellation or termination of,
or material modification to, any License listed on Schedule
3.06(b).
The
Licenses listed in Schedule 3.06(b) collectively constitute all of the
Licenses necessary to permit the Company to lawfully conduct and operate
its
Business in the manner it currently conducts and operates such Business and
to
permit the Company to own and use its assets in the manner in which it currently
owns and uses such assets.
3.07 No
Conflicts.
(a) Except
for the consents set forth on Schedule 3.07, no filing or registration
with, or permit, authorization, consent or approval of, or notification to,
any
Governmental Authority or any third party is required by any Seller or the
Company in connection with the execution, delivery and performance by the
Company and Sellers of this Agreement or the consummation by Sellers and
the
Company of the transactions contemplated hereby.
(b) The
execution and delivery of this Agreement and the consummation by Sellers
and the
Company of any of the transactions contemplated hereby or in the Transaction
Documents do not and will not directly or indirectly (with notice or without
notice or lapse of time or both):
(i) contravene,
conflict with, or result in a violation of (A) any provision of the
Certificate of Incorporation or bylaws of the Company, or (B) any resolution
adopted by the board of directors or the stockholders of the
Company;
17
(ii) contravene,
conflict with, or result in a violation or an event which with notice or
lapse
of time or both would constitute a default under or give any Governmental
Authority or other Person the right to challenge any of the transactions
contemplated hereby or to exercise any remedy or obtain any relief under,
any
Law or any Order to which the Company or any Seller, or any of the assets
owned
or used by the Company, may be subject;
(iii) contravene,
conflict with, or result in a violation or event which with notice or lapse
of
time or both would constitute a default of any of the terms or requirements
of,
or give any Governmental Authority or any other Person the right to revoke,
withdraw, suspend, cancel, terminate, or modify, any License that is listed
on
Schedule 3.06(b);
(iv) contravene,
conflict with, or result in a violation, breach or an event which with notice
or
lapse of time or both would constitute a default of any provision of, or
give
any Person the right to declare a default or exercise any remedy under, or
to
accelerate the maturity or performance of, or to cancel, terminate or modify,
any Material Contract; or
(v) result
in the imposition or creation of any Lien (other than a Permitted Lien) upon
or
with respect to any of the assets owned or used by the Company.
3.08 Contracts.
(a) Schedule 3.08(a)
contains a complete and accurate list, and Sellers have delivered or made
available to Buyer true, correct and complete copies of the following Contracts
to which the Company is a party which will remain in effect after the Closing
(each, a “Material Contract”) (for the avoidance of doubt, equipment or
bank leases or loans and the agreements and documents evidencing such which
are
to be paid off in full at Closing shall not be Material Contracts
hereunder):
(i) Each
Contract relating to the use, performance, reproduction, distribution, or
other
exploitation of sound recordings, musical compositions or works or the
manufacture, advertisements, distribution and lease of programs embodying
any of
the foregoing (collectively, the “Music Contracts”);
(ii) each
Contract that is executory in whole or in part and involves the delivery of
goods or materials by the Company, or the performance of services by the
Company, the remaining unpaid balance of which is in excess of
$5,000;
(iii) each
Contract that is executory in whole or in part and involves the delivery of
goods or materials to the Company or the performance of services for the
Company, the remaining unpaid balance of which is in excess of
$5,000;
(iv) each
Contract that is executory in whole or in part and was not entered into in
the
ordinary course of business and that involves future expenditures or receipts
by
the Company in excess of $5,000;
(v) each
lease, rental or occupancy agreement, license agreement, installment and
conditional sale agreement, and any other similar Contract, in each case,
affecting the ownership of, leasing of, title to, use of, or any leasehold
or
other similar interest in, any real or personal property;
18
(vi) except
for standard “shrink wrapped, off the shelf,” commercially available third-party
software used by the Company, each licensing agreement or any other Contract
with respect to the ownership or use of any Intellectual Property, including
Contracts with current or former employees, consultants or contractors regarding
the appropriation or the non-disclosure of any Intellectual
Property;
(vii) each
collective bargaining agreement and any other Contract to or with any labor
union or other similar employee representative of a group of employees of
the
Company;
(viii) each
joint venture or partnership agreement and any other similar Contract (however
named) involving a sharing of profits or losses by the Company with any other
Person;
(ix) each
Contract providing for payments to or by the Company based on a percentage
of
sales, purchases or profits, other than payments for goods and
services;
(x) each
note, bond, indenture and other instrument and agreement evidencing, creating
or
otherwise relating to obligations for borrowed money and each guarantee of
obligations for borrowed money;
(xi) as
of August 31, 2007, each purchase order exceeding $5,000 between the Company
and
any Person which will not be fulfilled prior to the Closing;
(xii) each
Contract that is executory in whole or in part and requires capital expenditures
in excess of $5,000 by the Company;
(xiii) all
agreements containing covenants not to compete on the part of a Seller or the
Company or otherwise restricting the ability of the Company or any Seller
to
engage in any aspect of the Business;
(xiv) each
Contract with any current or former employee, consultant, director or officer
of
the Company, or pursuant to which the Company has any liability to any current
or former employee, consultant, officer or director, other than employee
benefit
plans and policies; and
(xv) each
Contract between the Company and any of its Affiliates.
(b) Except
as set forth in Schedule 3.08(b), each Material Contract is in full
force and effect and is enforceable against the Company and, to the Knowledge
of
the Company and Sellers, the other party thereto in accordance with its terms
(subject to bankruptcy, insolvency and other proceedings at law or in equity
relating to the rights of creditors generally and by general equitable
principles, including, without limitation, those limiting the availability
of
specific performance, injunctive relief and other equitable remedies and
those
providing for equitable defenses).
19
(c) The
Company, and, to the Knowledge of the Company and Sellers, each other party
to a
Material Contract, is in material compliance with the terms and conditions
of
each Material Contract. Except as set forth in
Schedule 3.08(c), neither the Company nor any Seller has received
any written notice of, and has no Knowledge of, any actual or alleged breach
or
violation of, or default under, any Material Contract, and no event has occurred
which, with the giving of notice or the lapse of time or both, would constitute
a breach or violation of, or default under, any Material Contract on the
part of
the Company or, to the Knowledge of the Company and Sellers, on the part
of any
other party thereto. Except as set forth on Schedule 3.08(c),
the Company has made all Artists Guild, Performance Rights Society, Music
Rights
Holder, union, public performance and all other payments due under the Music
Contracts.
(d) To
the Knowledge of the Company and Sellers, there are no renegotiations of
or
attempts to renegotiate any material amounts paid or payable to the Company
under current or completed Material Contracts with any Person.
(e) Except
as set forth in Schedule 3.08(e), the Company has not been assessed or
asked to pay any liquidated damages or any other type of damages, fines or
penalties under any Material Contract since December 31, 2004.
3.09 Legal
Proceedings; Orders. Except
for the Known Liabilities and those matters set forth on Schedule 3.09,
there are no Legal Proceedings (including, without limitation, any Legal
Proceeding by any Governmental Authority) pending or, to the Knowledge of
the
Company and the Sellers, threatened against the Company or the properties
or
assets of the Company. Except for the Known Liabilities, there are no
Legal Proceedings (including, without limitation, any Legal Proceeding by
any
Governmental Authority) pending or, to the Knowledge of the Company and the
Sellers, threatened against the Company or any Seller that challenge the
validity or propriety of any of the transactions contemplated by this Agreement
or any of the Transaction Documents or that challenge or question the legal
right of the Company to conduct the operations of the Business as presently
or
previously conducted. There are no other orders, decrees or
settlement agreements to which the Company is a party except for the Known
Liabilities. Except for the Known Liabilities, there is no agreement
(non-compete or otherwise), commitment, judgment, injunction, order or decree
to
which the Company or any Seller is a party or that otherwise would reasonably
be
expected to be binding upon any Seller, the Company, its assets or the Business
which has or would reasonably be expected to have the effect of materially
prohibiting or impairing the use of any of its assets or the operation of
the
Business by Buyer. The Company and Sellers have not entered into any
agreement under which the operations of the Business are restricted from
selling, licensing or otherwise distributing any of its products to, or
providing services to, customers or potential customers or any class of
customers, in any geographic area, during any period of time or in any segment
of the market.
3.10 Taxes. Except
as set forth on Schedule 3.10: (i) the Company has timely and duly filed
all Tax Returns required to have been filed by it; (ii) all such Tax Returns
are
true, accurate and complete; (iii) Sellers have delivered or made available
to
Buyer copies of, and Schedule 3.10 contains a complete and accurate list
of, all such Tax Returns relating to income or franchise taxes filed since
December 31, 2004; (iv) the Company has paid, or made provision in
20
the
Financial Statements for the payment of all Taxes that have or may
have become
due pursuant to those Tax Returns or otherwise, or pursuant to any assessment
received by Sellers or the Company, except such Taxes, if any, as are listed
in
Schedule 3.10 and are being contested in good faith by appropriate
proceedings; (v) the Company is currently not the beneficiary of any extension
of time within which to file any Tax Return; (vi) to the Knowledge of the
Company and the Sellers, no claim has been threatened by a Governmental
Authority in a jurisdiction where the Company does not file Tax Returns that
either the Company is or may be subject to taxation by that jurisdiction;
(vii)
there are no Liens on any of the assets of the Company that arose in connection
with any failure (or alleged failure) to pay any Tax; (viii) no unpaid Tax
deficiency has been asserted or is pending against or with respect to the
Company by any Tax authority; (ix) the Company has collected or withheld
all
amounts currently required to be collected or withheld by it for any Taxes,
and
all such amounts have been paid to the appropriate Governmental Authority
or set
aside in appropriate accounts for future payment when due; (x) the Company
is in
compliance with, and its records contain all information and documents currently
necessary to comply with, all applicable information reporting and Tax
withholding requirements; (xi) the balance sheets contained in the Financial
Statements described in Section 3.04(a)(i) fully and properly reflect, as
of the
dates thereof, the liabilities of the Company for all accrued Taxes; (xii)
for
periods ending after the date of the most recent Financial Statements provided
to Buyer, the books and records of the Company fully and properly reflect
its
liabilities for all accrued Taxes; (xiii) the Company has not granted and
is not
subject to, any waiver of the period of limitations for the assessment of
Tax
for any currently open taxable period; (xiv) the Company is not required
to
include in income any amount for an adjustment pursuant to Section 481 of
the
Code or the Regulations thereunder or any similar provision of Law; (xv)
the
Company is not a party to any Tax allocation or sharing agreement; (xvi)
the
Company (A) has not been a member of an affiliated group of corporations
(within
the meaning of Section 1504(a) of the Code) filing a consolidated federal
income
Tax Return and (B) has no any liability for the Taxes of any Person under
Regulations Section 1.1502-6 (or any similar provision of state, local or
foreign law), as a transferee or successor, by contract or otherwise; (xvii)
the
Company is not and has not been during the last five (5)-year period, a U.S.
real property holding corporation within the meaning of Section 897 of the
Code,
and none of the Shares is a U.S. real property interest within the meaning
of
Section 897(c)(1) of the Code; (xviii) the United States federal and state
Tax
Returns of the Company have been audited by the relevant Governmental Authority
or are closed by applicable statute of limitations for all taxable years
through
December, 31, 2006; (xix) the Company is not a party to any agreement, plan
or
arrangement, whether written or unwritten, that could result in the payment
of
any “excess parachute payments” within the meaning of Section 280G of the Code
(or any corresponding provision of state, local or foreign tax law) as a
result
of the transactions contemplated by this Agreement; and (xx) the Company
has not
constituted either a “distributing corporation” or a “controlled corporation” in
a distribution of stock qualifying for tax-free treatment under Section 355
of
the Code in the two years prior to the date of this Agreement or in a
distribution which could otherwise constitute part of a “plan” or “series of
related transactions” (within the meaning of Section 355(e) of the
Code).
3.11 Absence
of Certain Changes. Except
as set forth in Schedule 3.11, since August 31, 2007, the Company
has conducted its Business only in the ordinary course of business consistent
with past practice, and there has not been any:
21
(a) change
in the Company’s authorized or issued capital stock or other equity securities;
grant of any stock option or restricted shares or right to purchase shares
of
capital stock or other equity securities of the Company; issuance of any
security convertible into such capital stock or other equity security; grant
of
any registration rights; purchase, redemption, retirement, or other acquisition
by the Company of any shares of any such capital stock or other equity
securities; or declaration or payment of any dividend or other distribution
or
payment in respect of shares of capital stock or other equity
securities;
(b) Material
Adverse Effect, and to the Knowledge of the Company and Sellers no event,
fact
or circumstance has occurred that, individually or in the aggregate, would
reasonably be expected to result in a Material Adverse Effect;
(c) revaluation
by the Company or any Seller of any of the Company’s assets, including without
limitation, any write-offs, increases or decreases in any reserves or any
write-up or write-down of the value of inventory, property, plant, equipment
or
any other property or any change in any assumptions underlying, or facts
relating to, or methods of calculating, any bad debt, contingency or other
reserves, except for normal depreciation in the ordinary course of business
and
consistent with past practice;
(d) amendment
to the Certificate of Incorporation or bylaws, or other organizational document,
of the Company;
(e) grant,
payment or increase by the Company of any bonuses, salaries, or other
compensation to any stockholder, director, officer, employee or independent
contractor or entry into any engagement, employment, severance, change of
control or similar Contract with any director, officer, employee or independent
contractor other than any of the foregoing which is granted consistent with
past
practice or to a Contract in existence prior to December 31, 2006;
(f) adoption
of changes in the payments to or benefits under, any profit sharing, bonus,
deferred compensation, savings, insurance, pension, retirement, or other
employee benefit plan for or with any current or former employees, consultants
or directors of the Company;
(g) material
delay or failure to pay or perform any current liability (including accounts
payable) of the Company when due;
(h) termination,
amendment, modification or waiver of, or any breach, violation or default
by any
party that would reasonably be expected to have a Material Adverse Effect
under,
any Material Contract outside the ordinary course of business and consistent
with past practice;
(i) change
in the conduct of the Business, including, without limitation, billing and
collection practices, deferral of payment of liabilities, or any other activity,
which may result in any current asset or current liability being reflected
on
the Company’s balance sheet in a manner either (A) inconsistent with the
Company’s past practices and or (B) not otherwise in the ordinary course of
business;
22
(j) forgiveness,
waiver or agreement to extend repayment of any Indebtedness or other obligation
owed by or to the Company;
(k) disposition
or lapse of any rights to use any proprietary right of the Company;
(l) entry
into, termination of, or receipt of notice of termination of (i) any
license, distributorship, dealer, sales representative, joint venture, credit,
or similar agreement, or (ii) any Contract or transaction involving a total
remaining commitment by or to the Company of at least $10,000;
(m) sale
(other than sales of inventory in the ordinary course of business consistent
with past practice), lease, or other disposition of any asset or property
of the
Company (including, without limitation, any Intellectual Property), other
than
in the ordinary course of business consistent with past practice, or mortgage,
pledge, or imposition of any Lien (other than a Permitted Lien) on any asset
or
property of the Company;
(n) cancellation
or waiver of any claims or rights that would reasonably be expected to result
in
a Material Adverse Effect;
(o) any
change (other than any required change) in the accounting methods (including
any
change in depreciation or amortization policies or rates) by the Company
or any
revaluation by the Company or any of its assets;
(p) material
change in the federal, state or local Tax liability of the Company, other
than
as a result of this Agreement, the other Transaction Documents or the
transactions contemplated hereby or thereby; or
(q) agreement,
whether oral or written, by the Company to do any of the foregoing (other
than
negotiations with Buyer and its representatives regarding the transactions
contemplated by this Agreement).
3.12 Employee
Benefit Plans.
(a) Schedule
3.12(a) contains a true and complete list and summary of all employee
benefit plans, programs, agreements, arrangements or payroll practices,
including, without limitation, any “employee benefit plans” within the meaning
of Section 3(3) of ERISA, any deferred compensation arrangements and bonus
compensation plans or policies, all retirement, pension, profit sharing,
bonus,
severance pay, disability, health, vacation and sick leave benefits plans,
stock-based incentive plans, employment or severance agreements, in any case,
maintained or sponsored by or entered into by the Company or under which
the
Company may have any current or future liability (collectively, “Benefit
Plans”). With respect to any Benefit Plan, (i) no actions, suits
or claims (other than routine claims for benefits in the ordinary course)
are
pending or, to the Knowledge of the Company and the Sellers, threatened,
(ii) to
the Knowledge of the Company and the Sellers, no facts or circumstances exist
that would reasonably be expected to give rise to any such actions, suits
or
claims, (iii) no administrative investigation, audit or other administrative
proceeding by the Department of Labor, the Pension Benefit Guaranty Corporation,
the Internal Revenue Service or other Governmental Authorities are pending
or,
to the Knowledge of the Company and the Sellers, threatened, and (iv) all
contributions and premiums required by law or by the terms of any Benefit
Plan
or any agreement relating thereto have been timely made. Each of the
Benefit Plans has been maintained, in all material respects, in accordance
with
its terms and all provisions of all applicable laws and regulations, and
each
Benefit Plan which is intended to be qualified within the meaning of Code
section 401(a) is so qualified and is entitled to rely on an opinion letter
issued by the Internal Revenue Service as to its qualification, and nothing
has
occurred, whether by action or failure to act, that would reasonably be expected
to cause the loss of such qualification.
23
(b) With
respect to each of the Benefit Plans, the Company has made available to Buyer
true and complete copies of each of the following documents, as applicable
and
to the extent each exists:
(i) a
copy of the plan document (including all amendments thereto) for each written
Benefit Plan or a written description of any Benefit Plan that is not otherwise
in writing;
(ii) a
copy of the summary plan descriptions (including all summaries of material
modifications to date) and other material communications to
employees
(iii) a
copy of the most recent financial statement, actuarial report and annual
Form
5500 (including all accompanying schedules and attachments);
(iv) if
the Benefit Plan is funded through a trust or any other funding vehicle,
a copy
of the trust or other funding agreement (including all amendments thereto)
and
the latest financial statements thereof, if any;
(v) all
contracts relating to the Benefit Plans with respect to which the Company
may
have any liability, including insurance contracts, investment management
agreements, subscription and participation agreements and record keeping
agreements; and
(vi) the
most recent opinion letter received from the Internal Revenue Service with
respect to each Benefit Plan that is intended to be qualified under Section
401(a) of the Code.
(c) Neither
the Company nor any current or former ERISA Affiliate has ever maintained,
sponsored or contributed to any Benefit Plan which is subject to Title IV
of
ERISA or Section 412 of the Code, and no event or fact exists which could
give
rise to any liability to the Company or any ERISA Affiliate under Title IV
of
ERISA or Section 412 of the Code.
(d) Neither
the Company nor any ERISA Affiliate maintains retiree life or retiree health
insurance plans that provide for continuing benefits or coverage for any
participant or any beneficiary of a participant except as may be required
under
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”) or at the sole expense of the participant or any participant's
beneficiary. Each of the Company and any ERISA Affiliate that
maintains a “group health plan” within the meaning of Section 5000(b)(1) of the
Code has complied in all material respects with the notice and continuation
requirements of Section 4980B of the Code, COBRA, Part 6 of Subtitle I of
ERISA
and the regulations thereunder.
24
(e) Except
as set forth on Schedule 3.12(e), no Benefit Plan exists that, as a
result of the transaction contemplated by this Agreement (either alone or
in
connection with another event), could result in the payment to any current
or
former employee or director of the Company of any money or other property
or
could result in the acceleration or provision of any other rights or benefits
to
any current or former employee or director of the Company. No amounts
payable under any Benefit Plan could fail to be deductible for federal income
tax purposes by virtue of Code Section 280G.
(f) The
Company has at all times properly classified all individuals providing services
to the Company as employees or independent contractors, as
applicable.
3.13 Intellectual
Property.
(a) Schedule
3.13(a) contains a complete and accurate list and summary description,
including any royalties and other consideration paid or received by the Company,
and the Company has delivered or made available to Buyer accurate and complete
copies, of all contracts or agreements relating to the Intellectual Property
or
the Intellectual Property Rights, except for any license implied by the sale
of
a product and perpetual, paid-up licenses for commonly available software
programs with a value of less than Five Hundred Dollars ($500) under which
the
Company is the licensee. There are no outstanding and, to the Company’s
Knowledge of Sellers and the Company, no threatened disputes or disagreements
with respect to any such contract or agreement.
(b) The
Intellectual Property and Intellectual Property Rights include all those
necessary or reasonably appropriate for the operation of the Company’s Business
as it is currently conducted or anticipated to be conducted by the
parties. The Company is the owner or valid licensee of all right,
title and interest in and to each of the Intellectual Property and Intellectual
Property Rights, free and clear of all Liens, and has the right to use without
payment to any Person all of the Intellectual Property and Intellectual Property
Rights, other than in respect of licenses listed on Schedule 3.13(b)
without payment to any third party (including, without limitation, any
Performance Rights Society, Artists Guild, or other Music Rights
Holder). Except for the Known Liabilities, no Intellectual Property
or Intellectual Property Rights have been or are now involved in any dispute,
opposition, invalidation, arbitration, cancellation or Legal Proceeding and,
to
the Company’s Knowledge of Sellers and the Company, no such action is threatened
with respect to any Intellectual Property or Intellectual Property Rights
of the
Company. None of the Intellectual Property or Intellectual Property
Rights of the Company is infringed or, to the Company’s Knowledge of Seller and
the Company, has been challenged, interfered with or threatened in any
way.
(c) All
former and current independent contractors, employees, directors and officers
of
the Company have executed valid and binding contracts with the Company that
assign to the Company all rights to any inventions, improvements, discoveries,
works of authorship or information or Intellectual Property or Intellectual
Property Rights created or discovered by such independent contractors,
employees, directors and officers of the Company in the course of engagement
or
employment or otherwise relating to or used in the Business of the
Company. No such independent contractor, employee, officer or
director of the Company has entered into any contract, obligation, promise,
commitment, undertaking or understanding (whether oral, written, express
or
implied) that restricts or limits in any way the scope or type of work in
which
such independent contractor, employee, officer, or director may be engaged
or
requires such independent contractor, employee, officer, or director to
transfer, assign, or disclose information concerning his or her work to any
party other than the Company.
25
(d) Schedule
3.13(d) contains a complete and accurate list and summary description of all
Patents (including identifying numbers and dates of filing and issuance)
owned
or used by the Company in the Business (the “Company
Patents”). All of the issued Company Patents are currently in
compliance with formal legal requirements (including payment of filing,
examination and maintenance fees and proofs of working or use), are valid
and
enforceable, and are not subject to any maintenance fees or taxes or actions
falling due within one hundred eighty (180) days after the Closing
Date. Except as set forth on Schedule 3.13(d), no Company
Patent has been or is now involved in any interference, reissue, reexamination,
opposition or Legal Proceeding. No Company Patent is infringed or, to
the Company’s Knowledge of Sellers and the Company, has been challenged or
threatened in any way and none of the products manufactured or sold, services
provided nor any process or know-how used, by the Company infringes or is
alleged to infringe any patent or other proprietary right of any other
Person.
(e) Schedule
3.13(e) contains a complete and accurate list and summary description of all
Marks (including, without limitation, identifying registration numbers,
registration dates, application numbers, and filing dates) owned or used
by the
Company in the Business (the “Company Marks”). All of the
Company Marks that have been registered with the United States Patent and
Trademark Office or any other Governmental Authority, are currently in material
compliance with all formal Requirements of Law (including the timely
post-registration filing of affidavits of use and incontestability and renewal
applications), are valid and enforceable and are not subject to any maintenance
fees or Taxes or actions falling due within one hundred eighty (180) days
after
the Closing Date. No Company Xxxx has been or is now involved in any
opposition, invalidation, cancellation or Legal Proceeding and, to the Company’s
Knowledge, no such action is threatened with respect to any of the Company
Marks. No Company Xxxx is infringed or, to the Company’s Knowledge of Sellers
and the Company, has been challenged or threatened in any way. None of the
Company Marks infringe or is alleged to infringe any trade name, trademark
or
service xxxx of any other Person.
(f) Schedule
3.13(f) contains a complete and accurate list and summary description of all
Copyrights owned or used in the Business (the “Company
Copyrights”). All of the registered Company Copyrights are
currently in compliance with formal Requirements of Law, are valid and
enforceable, and are not subject to any maintenance fees or taxes or actions
falling due within one hundred eighty (180) days after the date of
Closing. No Company Copyright has been or is now involved in any
Legal Proceeding. No Company Copyright is infringed or, to the
Seller’s Knowledge, has been challenged or threatened in any
way. None of the subject matter of any of the Company Copyrights
infringes or is alleged to infringe any copyright of any Person or is a
derivative work based upon the work of any other Person.
26
(g) Schedule
3.13(g) contains a complete and accurate list of all Publicity
Rights.
(h) Schedule
3.13(h) contains a brief description of (1) any Trade Secret owned or used
in the Business (the “Company Trade Secrets”), (2) any policies,
procedures for recording Company Trade Secrets or intellectual property
development, and (3) any Company Trade Secret that has been deposited into
escrow for the benefit of another party, and if so, a description of the
deposit. With respect to each Company Trade Secret, the documentation
relating to such Company Trade Secret is current, accurate and sufficient
in
detail and content to identify and explain it and to allow its full and proper
use without reliance on the knowledge or memory of any
individual. The Company has taken all reasonable precautions to
protect the secrecy, confidentiality and value of all the Company Trade Secrets
(including the enforcement by the Company of a policy requiring each employee
or
contractor to execute proprietary information and confidentiality agreements
substantially in the Company’s standard form, and all current and former
employees and contractors of the Company have executed such an
agreement). The Company has good title to and an absolute right to
use the Company Trade Secrets. The Company Trade Secrets are not part
of the public knowledge or literature and, to the Company’s Knowledge of Sellers
and the Company, have not been used, divulged or appropriated either for
the
benefit of any Person (other than the Company) or to the detriment of the
Company. No Company Trade Secret has been or is now involved in any
Legal Proceeding. No Company Trade Secret is subject to any adverse
claim or has been challenged or threatened in any way or infringes any
intellectual property right of any other Person.
(i) Schedule
3.13(i) contains a complete and accurate list and summary description of all
Net Properties owned or used in the Business (the “Company Net
Properties”). All Company Net Properties have been registered in
the name of the Company and are in material compliance with all formal
Requirements of Law. No Company Net Properties have been or are now
involved in any dispute, opposition, invalidation, arbitration, cancellation
or
Legal Proceeding and, to Company’s Knowledge of Sellers and the Company, no such
action is threatened with respect to any Company Net Property. None
of the Company Net Properties is infringed or, to the Company’s Knowledge of
Seller and the Company, have been challenged, interfered with or threatened
in
any way. None of the Company Net Properties infringe, interferes with or
is
alleged to interfere with or infringe the trademark, copyright, domain name
or
other intellectual property of any other Person.
(j) The
Company has designed, engineered, installed, and operated the Company’s Host
Systems and instituted and enforced such policies and procedures with respect
to
the Company’s Host Systems, so that they are secure and to prevent unauthorized
use or access. To the Company’s Knowledge of Sellers and the Company,
the Company’s Host Systems have not been compromised through unauthorized use or
access. The Company has delivered to Buyer true, complete and current copies
of
any privacy policies that the Company has established for its Business or
customers. The Company is in material compliance with its privacy
policies, as well as any other privacy requirements imposed on the Company
or
its Business by Governmental Authorities or Requirements of Law.
27
(k) The
Company has used commercially reasonable methods to ensure that the Company’s
Host Systems do not contain any malicious or surreptitious code or device,
such
as a virus, worm, time or logic bomb, disabling device, Trojan horse or other
malicious or surreptitious code.
(l) The
Company has not used any third party software or work that is subject to
an open
source license (including the GNU Public License) or any “copyleft”, “freeware”
or similar license, the terms of which impose any restrictions on the Company’s
use of any computer software owned or used by the Seller in the Business,
or
which in any way limit the Company’s ownership of and freedom to act regarding
any Intellectual Property or Intellectual Property Right associated with
such
software or work that the Company has developed using or incorporating such
third-party software or work.
(m) The
Company (a) complies with all applicable privacy laws and regulations regarding
the collection, retention, use and disclosure of personal information, and
(b) takes all appropriate and industry standard measures to protect and
maintain the confidential nature of the personal information provided to
the
Company by individuals. The Company has adequate technological and
procedural measures in place to protect personal information collected from
individuals against loss, theft and unauthorized access or
disclosure. The Company does not collect information from or target
children under the age of thirteen. The Company does not sell, rent
or otherwise make available to third parties any personal information submitted
by individuals. Other than as constrained by applicable laws and
regulations, the Company is not restricted in its use and/or distribution
of
personal information collected by the Company.
3.14 Environmental
Matters. Except
as set forth on Schedule 3.14:
(a) The
Company and each Leased Property is now and at all times during the past
five
(5) years has been in material compliance with all applicable Environmental
Laws. None of the Sellers or the Company has received any written or
oral communication, whether from a Governmental Authority alleging that the
Company is not in compliance or otherwise relating to any potential liability
or
violation under such Environmental Laws.
(b) The
Company has obtained all permits required under Environmental Laws that are
required in connection with the conduct of the Business, all of which are
sufficient in scope for the conduct of the Business as currently conducted,
and
are valid, subsisting and in full force and effect. The Company is in
material compliance with all terms and conditions of such environmental permits,
and no action, suit or other proceeding which would reasonably be expected
to
result in the revocation or suspension or limitation of any such environmental
permits is pending or threatened, and the Company has not engaged in any
conduct
which would reasonably be expected to cause the revocation or suspension
or
limitation of any such environmental permits.
(c) There
are no Environmental Claims pending or to the Knowledge of the Company and
the
Sellers threatened against the Company or, to the Knowledge of Sellers and
the
Company, against any Person whose liability for any Environmental Claim the
Company has or may have retained either contractually or by operation of
Law,
under or relating to Environmental Laws, including, without limitation, those
that involve or relate to Environmental Conditions, Environmental Noncompliance
or Releases, of any Hazardous Substances on or from any real property
constituting the Owned Real Properties, the Leased Real Property or any other
real property or facility formerly owned, leased or used by the
Company.
28
(d) To
the Knowledge of the Company and Sellers, there are no past or present
Environmental Conditions or Releases of any Hazardous Substances which are
reasonably likely to form the basis of any Environmental Claim against the
Company, or to the Knowledge of the Company and Sellers, against any Person
whose liability for any Environmental Claim the Company has or may have retained
or assumed either contractually or by operation of law.
(e) The
Company has not, and to the Knowledge of the Company and Sellers, no other
Person has placed, stored, deposited, discharged, buried, dumped or disposed
of
Hazardous Substances in a manner that caused or is reasonably likely to have
caused contamination requiring remediation pursuant to Environmental Law
or
damage to the environment or otherwise placed, stored, deposited, discharged,
buried, dumped or disposed of any other wastes in violation of applicable
Environmental Laws on any property currently or formerly owned, operated
or
leased by the Company, except for inventories of such substances to be used,
and
wastes generated therefrom, in the ordinary course of business of the Company
(which inventories and wastes, if any, were and are stored or disposed of in
compliance with all applicable Environmental Laws).
(f) The
Company has not assumed, contractually or, to the Knowledge of the Company
and
Sellers, by operation of law, any liabilities or obligations under any
Environmental Laws.
(g) The
Company has delivered or otherwise made available for inspection to Buyer,
true,
complete and correct copies and results of any reports, studies, analyses,
tests
or monitoring (“Reports”) possessed or initiated by the Company
pertaining to Hazardous Substances in, on, beneath or adjacent to any property
currently or formerly owned, operated or leased by the Company, or regarding
the
Company's compliance with applicable Environmental Laws. A list of
all such Reports can be found in Schedule 3.14(g).
(h) To
the Knowledge of the Company and the Sellers, all properties owned, operated
or
leased by the Company do not contain any: underground storage tanks; asbestos;
polychlorinated biphenyls; underground injection xxxxx; radioactive materials;
or septic tanks or waste disposal pits in which process wastewater or any
Hazardous Substances may have been discharged or disposed.
3.15 Labor
Matters. Except
as set forth in Schedule 3.15:
(a) Schedule
3.15 sets forth the following information for all employees of the Company
immediately prior to the Closing: name, identifying code, job title,
rate of pay, and date of hire, together with a description of each License,
if
any, held by each such Person that is material to the Business, as
applicable. To the extent any employee is on a leave of absence,
Schedule 3.15 indicates the nature of such leave of absence and such employee’s
anticipated date of return to active employment. To the Knowledge of
the Company, none of the employees listed on Schedule 3.15 has any plans
or
intends to terminate his or their employment or engagement, except as may
be
required pursuant to this Agreement or any of the Transaction
Documents. Upon termination of the employment of any employee of the
Company, none of the Company or the Buyer will by reason of any action taken
or
not taken prior to the Closing be liable to any of such employees for severance
pay or any other payments, except as may be required pursuant to this Agreement
or the Transaction Documents;
29
(b) The
Company is conducting and has for the past five (5) years conducted its Business
in compliance in all material respects with all applicable Laws relating
to
employment or labor, including, without limitation, those Laws relating to
wages, hours, collective bargaining, unemployment insurance, workers’
compensation, equal employment opportunity, OSHA Laws and the payment and
withholding of Taxes. Schedule 3.15 sets forth all expenses,
obligations and liabilities relating to any claims by employees and former
employees (including dependents and spouses) of the Company against the Company
made since December 31, 2004, and the extent of any specific accrual on or
reserve therefore set forth on the Financial Statements, for (i) costs, expenses
and other liabilities under any workers compensation laws, requirements or
programs and (ii) any other medical costs and expenses, other than under
benefit
plans provided by the Company. Except as set forth on Schedule
3.15, in the past 12 months, to the Knowledge of the Company and Sellers,
no
event has occurred and no claim or injury exists, which would reasonably
be
expected to give rise to a material claim by employees or former employees
(including the dependents and spouses thereof) of the Company under any workers
compensation laws, requirements or programs or for any other material medical
costs and expenses.
(c) There
is no labor strike, slowdown, work stoppage or lockout in effect, or, to
the
Knowledge of the Company and the Seller, threatened against the Company,
and the
Company has not experienced any such labor controversy within the past three
(3)
years. There is no union representation or organizing effort pending
or threatened against the Company.
(d) There
is no charge or complaint pending against the Company before the Equal
Employment Opportunity Commission, the Office of Federal Contract Compliance
Programs or any similar state, local or foreign agency responsible for the
prevention of unlawful employment practices.
(e) The
Company is not a party to, or otherwise bound by, any consent decree with,
or
citation by, any Governmental Authority relating to employees or employment
practices.
(f) Except
as set forth in Schedule 3.15(f), the Company has paid in full all wages,
salaries, commissions, bonuses and other direct compensation for all services
performed by its employees and independent contractors, other than amounts
that
have not yet become payable in accordance with the Company’s customary
practices.
(g) Except
as set forth in Schedule 3.15(g), no union or other collective bargaining
unit has been certified as representing any of the employees of the Company,
nor
has the Company agreed to recognize any union or other collective bargaining
unit.
30
(h) The
Company has complied with the applicable provision of the Immigrations Reform
and Control Act of 1986, Pub. L. 99-603, which makes it unlawful to hire,
recruit or refer for a fee for employment, unauthorized aliens in the United
States, and which requires employees to verify an employee’s identity and right
to work in the United States through completion of Immigration and
Naturalization Service Form I-9. The Company has undertaken
reasonable precautions as required by Law to ensure that its employees and
independent contractors have complied will all applicable immigration
laws.
(i) Subject
to Buyer’s compliance with Section 5.10, the Company is in material compliance
with its obligations pursuant to the Worker, Adjustment and Retraining
Notification Act of 1988 (“WARN Act”), and in compliance with all other
notification and bargaining obligations arising under any collective bargaining
agreement, statute or otherwise. The Company has not received written
notice of, and has no reason to believe that it may receive such notice,
the
intent of any federal, state, local or foreign agency responsible for the
enforcement of employment laws to conduct an investigation of or relating
to the
Company with respect to the employment of its employees and no such
investigation is in progress.
3.16 Brokers
and Finders. Except
as set forth in Schedule 3.16, no broker, finder, agent or similar
intermediary has acted on behalf of the Company or and Seller in connection
with
this Agreement or any of the transactions contemplated hereby, and there
are no
brokerage commissions, finders’ fees or similar fees or commissions payable in
connection therewith based on any Contract with Sellers or the Company or
any
action taken by Sellers or the Company.
3.17 Condition
and Sufficiency of Assets.
The
buildings, plants and equipment of the Company (including Leased Real Property)
are in all respects in normal usable condition and repair, normal wear and
tear
excepted, and are suitable and adequate for the uses to which they are currently
being put. The buildings, plants and equipment of the Company are
sufficient for the continued conduct of the Company’s Business after the Closing
in substantially the same manner as conducted prior to the Closing.
3.18 Books
and Records. The
books of account, minute books, stock record books and other records of the
Company are true, correct and complete and have been maintained in accordance
with sound business practices, including the maintenance of an adequate system
of internal controls. The minute books of the Company contain true,
correct and complete records of all meetings of, and corporate action taken
by,
the stockholders of the Company and the Company Board of Directors, and no
meeting of any of the stockholders or the Company Board of Directors has
been
held for which minutes have not been prepared and are not contained in such
minute books. True, correct and complete copies of all minute books
and all stock record books of the Company have heretofore been delivered
to
Buyer.
3.19 Real
Properties. The Company does not own any real property (“Owned
Real Property”) and has no option, right or other agreement to acquire any
interests in any real property. Schedule 3.19 contains a
complete and correct list of all real property leases, warehouse leases,
subleases, licenses and occupancy agreements pursuant to which the Company
31
is
a
lessor, lessee, sublessor, sublessee, licensor or licensee of real property,
setting forth the address, landlord and tenant for each (the “Leased Real
Property”). The Company has delivered to Buyer correct and
complete copies of each of the agreements set forth in Schedule
3.19, including all amendments thereto and all nondisturbance
agreements in connection therewith. Each lease, sublease, license or
other agreement set forth in Schedule 3.19 (the “Leases”) is
legal, valid, binding, enforceable in accordance with its terms (subject
to
bankruptcy, insolvency and other proceedings at law or in equity relating
to the
rights of creditors generally) and in full force and effect. No party
is in default, violation or breach in any material respect under any of the
same, and to the Knowledge of Sellers and the Company, no event has occurred
and
is continuing thereunder that constitutes or, with notice or the passage
of time
or both, would constitute a default, violation or breach in any material
respect
thereunder. All lessors under the Leases have consented to the
consummation of the transactions contemplated hereby, to the extent that
the
applicable Lease requires such consent, without requiring any modification
of
any of the rights or obligations of the tenant under such Leases. The
Company has good and valid title to the leasehold estate under each lease,
sublease, license or other agreement set forth in Schedule 3.19,
free and clear of all Liens (other than Permitted Liens). The Company
or Sellers enjoys peaceful and undisturbed possession under the
same.
3.20 Tangible
Property.
(a) Schedule 3.20(a)
contains the Company’s depreciation ledger of all material machinery, equipment,
fixtures, motor vehicles and other tangible personal property owned by the
Company (collectively, the “Owned Tangible Property”). Except
as set forth in Schedule 3.20(a),
the Company has good title to all Owned Tangible Property free and clear
of all
Liens (other than Permitted Liens).
(b) Schedule 3.20(b)
contains a list of (i) all material machinery, equipment, fixtures and
other tangible personal property owned by a third party subject to any capital
lease or rental agreement to which the Company is a party (collectively,
the
“Leased Tangible Property”) and (ii) the leases of the Leased
Tangible Property (the “Tangible Property Leases”). Each of
the Tangible Property Leases is in full force and effect and constitutes
a valid
and binding obligation of the Company and, to the Knowledge of Sellers and
the
Company, the other party thereto, enforceable in accordance with its terms
(subject to bankruptcy, insolvency and other proceedings at law or in equity
relating to the rights of creditors generally).
(c) The
Company has not received notice of, and no event has occurred and the Company
and Sellers have no Knowledge of any facts or circumstances which (with the
giving of notice or lapse of time or both) would constitute, a violation
or
breach of, or default under (beyond any applicable grace or cure period),
any of
the Tangible Property Leases on the part of the Company or, to the Knowledge
of
Sellers and the Company, on the part of any other party thereto.
(d) All
Owned Tangible Property and all Leased Tangible Property (collectively, the
“Tangible Property”) is in normal and usable working condition, normal
wear and tear excepted, and is suitable for the purposes for which it is
used or
is being replaced with suitable and appropriate tangible personal property
in
normal and usable working condition.
32
3.21 Employees. Schedule
3.15 set forth a true, correct and complete list of the names and current
salaries of all of the employees of the Company. No director or
officer, or to the Knowledge of the Company and Sellers, no employee or
independent contractor of the Company is a party to, or is otherwise bound
by,
any agreement or arrangement, including any confidentiality, noncompetition,
or
proprietary rights agreement, between such employee, independent contractor,
officer or director and any other Person (“Proprietary Rights
Agreement”), that in any way adversely affects (a) the performance of
his or her duties as an employee, independent contractor, officer or director
of
the Company or (b) the ability of the Company to conduct its Business,
including any Proprietary Rights Agreement with any Seller. Except as
set forth in Schedule 3.21 no Seller, and to the Knowledge of Sellers and
the Company, no director, officer or other key employee or independent
contractor of the Company currently intends to terminate his or her employment
or relationship with the Company. Except as set forth in Schedule
3.21, the Company is not party to any employment agreement.
3.22 Insurance. There
is in full force and effect one or more policies of insurance insuring the
Company, the Owned Real Properties and the Leased Real Properties and the
Business against such losses and risks and in such amounts as are usual and
customary in the Business in relation to similarly sized companies engaging
in
the Business in the Company’s geographic
location. Schedule 3.22 contains a complete list of all
of the Company’s policies of insurance in effect as of the date
hereof. All of such policies are in full force and effect and there
is no default (beyond any applicable grace or cure period) with respect to
any
provision contained in any such policy, nor has there been any failure to
give
any notice or present any material claim under any liability policy in a
timely
fashion or in the manner or detail required by such liability
policy. The Company maintains, and for the last five (5) years, has
maintained, workers compensation insurance, and, except as set forth in
Schedule 3.22, such workers compensation has been sufficient for the
conduct of the Company’s Business. The Company has delivered or made
available copies of all such policies to Buyer. Except as set forth
in Schedule 3.22, there are no outstanding unpaid premiums or
claims, and no retroactive or retrospective premium adjustments with respect
to
such policies, and no notice of cancellation or nonrenewal or refusal of
coverage has been received by the Company or any Seller with respect to,
any
such policy.
3.23 Banking
Relationships. Schedule 3.23
sets forth the names, account numbers and locations of all banks, trust
companies, savings and loan associations and other financial institutions
at
which the Company has a banking relationship.
3.24 Insolvency
Proceedings. Neither
the Company, any of the Shares nor any of the Company’s assets is the subject of
any pending, rendered or, to the Knowledge of the Company, threatened insolvency
proceedings of any character. The Company has not made an assignment
for the benefit of creditors or taken any action with a view to or that would
constitute a valid basis for the institution of any such insolvency
proceedings.
3.25 Territorial
Restrictions. The
Company is not restricted by any written agreement or understanding with
any
other Person from carrying on the Business anywhere in the world, except
for
such restrictions of Governmental Authorities as are generally applicable
to the
industry in which the Company currently operates.
33
3.26 Customers. Schedule 3.26
sets forth the names and addresses of the ten (10) largest (based upon revenues)
customers, contractors and other Persons from whom the Company derived revenues
for the twelve (12) month periods ended December 31, 2006 and December 31,
2005,
and the amount for which each such customer, contractor or other Person was
invoiced during such periods. The Company has not received any
written notice that any such customer, contractor or other Person set forth
in
Schedule 3.27 has ceased, or will cease, to purchase or use products or
services of the Company, or has substantially reduced, or will substantially
reduce, the purchase or use of the products or services of the Company on
or
after the Closing Date. The Company is current and in substantial
compliance with respect to all of its obligations to all of its customers,
contractors and each other Person from whom it derives revenues.
3.27 Suppliers. Schedule
3.27 sets forth the name and address of each supplier, vendor or other
provider of services to the Company from which the Company ordered raw
materials, supplies and other goods and services in the aggregate amount
of
$15,000 or more in each of the twelve (12) month periods ended December 31,
2006
and 2005. Neither the Company nor any Seller has received any written
notice that any such supplier, vendor or other provider of services has
ceased, or will cease, to supply such raw materials, supplies or other goods
or
services to the Company on or after the Closing Date, or has substantially
reduced, or will substantially reduce, the supply of such items or services
to
the Company on or after the Closing Date. The Company is current and
in substantial compliance with respect to all of its obligations to its
suppliers, vendors and other providers of services.
3.28 Distributors. No
distributor, contractor, broker, dealer, agent or representative, other than
employees of the Company, has an oral or written agreement or understanding
to
sell or otherwise provide products or services of the Company.
3.29 Accounts
Receivable. A
complete and correct list of all accounts receivable of the Company as of
August
31, 2007 (“Accounts Receivable”) has been delivered to Buyer and sets
forth the aging of such Accounts Receivable, a complete and correct copy
of
which is attached hereto as Schedule 3.29. The Accounts
Receivable and all accounts receivable since December 31, 2006 represent
bona
fide sales actually made or services actually performed on or prior to such
date
in the ordinary course of business of the Company and consistent with past
practices. Except as set forth in Schedule 3.29, to the
Knowledge of the Company and the Sellers, there is no contest, claim or right
of
set-off contained in any oral or written agreement with any account debtor
relating to the amount or validity of any Account Receivable, or any other
account receivable created after December 31, 2006, other than returns, refunds
or similar concessions granted in the ordinary course of business consistent
with past practice (“Returns”), none of which, individually or in the
aggregate, are material. The Accounts Receivable and all accounts
receivable since December 31, 2006 are valid and, to the Knowledge of Sellers
and the Company, collectible at the recorded amounts thereof in the ordinary
course of business of the Company, subject to Returns and reserves made in
the
ordinary course of business of the Company, none of which, individually or
in
the aggregate, are material.
3.30 Inventory. All
Inventory reflected on the Financial Statements is of good, usable and
merchantable quality. Inventory maintained by the Company as of the
Closing Date is or shall be (a) adequate for the conduct of the Business
in the
Company’s ordinary course, and (b) consistent with the Inventory levels and
Inventory balance maintained by the Company as of
34
December
31, 2005 and 2006. All Inventory is of such quality as to meet
applicable governmental quality control standards and is recorded on the
books
of the Company at the lower of cost or market value determined in accordance
with GAAP consistent with past practices. All Inventory is located at
either the principal place of business of the Company or at such other locations
at which the Company is conducting business in the ordinary course consistent
with past practice and all Inventory located at such other locations is
reasonably expected to be sold in connection with the conducting of such
business. All finished goods Inventory is saleable in the ordinary
course of business. Purchase commitments for raw materials and parts
are not in excess of normal requirements and are consistent with past practice
and none were at a price materially in excess of market prices existing on
the
date such commitments were made.
3.31 Transactions
with Certain Persons.
(a) Except
as set forth on Schedule 3.31(a), no officer or director of the Company
nor any Related Person of such individual is presently, or within the past
three
(3) years has been, a party to any transaction with the Company, including
without limitation, any Contract, Lease or other arrangement (i) providing
for
the furnishing of services by (other than as officers, directors or employees
of
the Company); (ii) providing for the rental of real or personal property
from;
or (iii) otherwise requiring payments to (other than for services or expenses
as
directors, officers or employees of the Company in the ordinary course of
business consistent with past practice) any such individual or any corporation,
partnership, trust or other entity in which any such individual has an interest
as a stockholder, officer, director, trustee or partner (excepting holdings
solely for passive investment purposes of securities of publicly held and
traded
entities constituting less than five percent (5%) of the equity of any such
entity) (“Related Party Agreements”). The Company does not
have outstanding any Contract or other arrangement or commitment with any
Seller
or any director or officer of the Company or with any Seller.
(b) Except
as set forth on Schedule 3.31(b) or pursuant to or under ay Transaction
Document: no Seller nor any officer or director of the Company owns
or holds, directly or indirectly, any interest in (excepting holdings solely
for
passive investment purposes of securities of publicly held and traded entities
constituting less than five percent (5%) of the equity of any such entity),
or
is an officer, director, employee or consultant of any Person that is, a
competitor, lessor, lessee, customer or landlord of the Company or which
conducts a business similar to the Business conducted by the
Company. No Seller nor any officer, member of management or director
of the Company (i) owns or holds, directly or indirectly, in whole or in
part,
any the Intellectual Property used in the Business, (ii) has any Claim against
the Company, except for claims for accrued payroll or vacation pay or accrued
benefits under any Benefit Plan existing on the date hereof, (iii) owes any
money to the Company or (iv) has any material interest in any property, real
or
personal, tangible or intangible, used in the Business.
35
IV.
REPRESENTATIONS
AND WARRANTIES OF BUYER.
Buyer
hereby represents and warrants to the Company and Sellers as
follows:
4.01 Organization
of Buyer; Authorization.
(a) Buyer
is a corporation duly organized, validly existing and in good standing under
the
Laws of the State of Delaware and has all necessary corporate or other power
and
authority to conduct its business in the manner in which it is currently
being
conducted.
(b) Buyer
has full corporate power and authority to execute, deliver and perform this
Agreement and the other Transaction Documents to which it is a party, and
to
consummate the transactions contemplated hereby and thereby. The
execution and delivery by Buyer of this Agreement and the other Transaction
Documents to which it is a party, and the performance by Buyer of its
obligations hereunder and thereunder, have been duly and validly authorized
by
all necessary corporate action on the part of Buyer. This Agreement
and the other Transaction Documents to which it is a party have been duly
and
validly executed and delivered by Buyer and constitute the legal, valid and
binding agreements of Buyer, enforceable against Buyer in accordance with
their
terms, except as such enforceability may be limited by bankruptcy, moratorium,
insolvency, reorganization, fraudulent conveyance or other Laws affecting
the
enforcement of creditors’ rights generally, by general equitable principles,
including, without limitation, those limiting the availability of specific
performance, injunctive relief and other equitable remedies and those providing
for equitable defenses or by applicable federal and state securities laws
as
they relate to the indemnification provisions set forth herein.
4.02 No
Conflicts.
(a) Except
for filings required to effect or arising in connection with consummating
the
transactions contemplated herein (including without limitation, filings required
pursuant to federal and state securities laws), no filing or registration
with,
or permit, authorization, consent or approval of, or notification to, any
Governmental Authority is required by Buyer in connection with the execution
and
delivery by Buyer of this Agreement and the other Transaction Documents to
which
it is a party and the consummation by Buyer of the transactions contemplated
hereby and thereby.
(b) The
execution and delivery by Buyer of this Agreement and the consummation of
any of
the transactions contemplated hereby and thereby do not and will not, directly
or indirectly (with or without notice or lapse of time or
both): (i) violate any provision of the Certificate of
Incorporation or bylaws of Buyer, (ii) violate, or be in conflict with, or
constitute a default (or an event which, with notice or lapse of time or
both,
would constitute a default) under, any material Contract to which Buyer is
a
party, except for such material Contracts wherein the other party thereto
has
consented to the consummation of the transactions contemplated hereby or
thereby, or (iii) violate any Law applicable to Buyer.
4.03 Legal
Proceedings; Orders. There
are no Legal Proceedings (including, without limitation, any Legal Proceeding
by
any Governmental Authority) pending or threatened against Buyer or its
properties or assets, that challenge, or may have the effect of preventing,
making illegal or otherwise interfering with, any of the transactions
contemplated hereby. Neither Buyer nor any of the assets owned or
used by it is subject to any Order that could prevent, enjoin, alter or
materially delay any of the transactions contemplated hereby.
36
4.04 Brokers
and Finders. Except
as set forth on Schedule 4.04, no broker, finder, agent or similar
intermediary has acted on Buyer’s behalf in connection with this Agreement or
any of the transactions contemplated hereby, and there are no brokerage
commissions, finders’ fees or similar fees or commissions payable in connection
therewith based on any Contract with Buyer or any action taken by
Buyer.
4.05 Investment
Intent, etc. Buyer
is acquiring the Shares for its own account and not with a view to their
distribution within the meaning of Section 2(11) of the Securities Act of
1933, as amended. Buyer understands that the Shares have not been
registered for sale under any federal or state securities Laws and that the
Shares are being sold to Buyer pursuant to an exemption from registration
provided under such Laws; acknowledges that the representations and warranties
set forth in this Section 4.05 are given with the intention that Sellers
rely on
them for purposes of claiming such exemption; understands that it must bear
the
economic risk of the Shares for an indefinite period of time as they cannot
be
sold unless subsequently registered under applicable federal and state
securities Laws or unless an exemption from registration is available
therefrom.
Buyer
has
acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Shares pursuant to this Agreement;
has
sufficient knowledge and experience in financial and business matters so
as to
be capable of evaluating the merits and risks of acquiring the Shares; and
is
capable of bearing the economic risks of such investment.
V.
COVENANTS
AND AGREEMENTS OF SELLERS AND THE COMPANY
5.01 Release. Each
Seller, on behalf of himself, herself or itself, and each of his, her or
its
Related Persons, hereby releases and forever discharges Buyer and the Company,
and each of their respective individual, joint or mutual, past, present and
future Representatives, Affiliates, stockholders, controlling persons,
subsidiaries, successors and assigns (individually, a “Releasee” and
collectively, “Releasees” ) from any and all claims, demands, Legal
Proceedings, causes of action, Orders, Contracts, debts and liabilities,
both at
law and in equity, which such Seller, or any of his, her or its Related Persons,
now has or has previously had against the respective Releasees arising
contemporaneously with or prior to the Closing Date or on account of or arising
out of any matter, cause or event occurring contemporaneously with or prior
to
the Closing Date; provided, however, that nothing contained herein shall
operate
to release any obligations of Buyer or the Company (a) arising on or after
the
Closing Date; (b) arising under this Agreement, under any other Transaction
Document or under any other agreement, document, instrument or arrangement
entered into on or after the Closing Date; (c) which are accrued payroll
or
employment compensation which are to be paid in normal intervals; (d) under
any
employee benefit plans provided in the ordinary course of business consistent
with past practice; (e) under any indemnification provisions of the Company’s
Certificate of Incorporation, bylaws, or director and officer insurance
policies; or (f) which is a counter-claim or contribution claim in response
to a
claim asserted against a Seller under Article VI.
37
5.02 Landmark
Loans. The
Buyer, the Company, X’Xxxxx and Xxxx shall use good faith efforts and endeavor
to cause each of X’Xxxxx and Xxxx to be released as guarantors under the
Landmark Loans, and all documents entered into in connection therewith, on
the
Closing Date or as soon as reasonably practicable thereafter. In the
event the parties are unable to cause X’Xxxxx and/or Xxxx to be released as
guarantors under the Landmark Loans on or prior to fifteen (15)
calendar days after Closing Date, Buyer shall cause the Landmark Loans to
be
paid and satisfied in full. Buyer hereby agrees to indemnify, defend
and hold harmless each of Xxxx and/or X’Xxxxx pursuant to the provisions of
Article VI from and against, and pay to X’Xxxxx and/or Xxxx, as applicable, any
and all Losses (as such term is defined herein) of Xxxx and/or X’Xxxxx arising
out of, relating to, or caused by any liability of Xxxx and/or X’Xxxxx under the
Landmark Loans relating to any period after the Closing Date.
5.03 Xxxxxxxx
Bonus. On or before the Closing Date, the Company shall cause the
Xxxxxxxx Bonus to be paid to Xxx Xxxxxxxx.
5.04 Access
to Information. In order to facilitate the resolution of any
claims made against or by Sellers or for any other reasonable purpose, Buyer
shall (i) retain the records relating to the Company and the Business
corresponding to periods prior to the Closing in a manner reasonably consistent
with the prior practice of the Company and (ii) upon reasonable notice, afford
the officers, employees, agents and representatives of Seller reasonable
access
during normal business hours to such books and records.
VI.
INDEMNIFICATION;
REMEDIES.
6.01 Survival
of Representations and Warranties. Sellers’,
the Company’s and Buyer’s representations and warranties shall survive for a
period of twelve (12) months following the Closing Date; provided, however,
that
the representations and warranties contained in Sections 3.05, 3.07, 3.09,
3.13
and 4.03 shall survive for a period of eighteen (18) months; provided, further,
that the representations and warranties contained in Section 3.10 shall survive
for the applicable statute of limitations, plus an additional sixty (60)
days;
and provided further, that the representations and warranties contained in
Sections 3.01, 3.02, 3.03 and 4.01 shall survive
indefinitely. Notwithstanding anything to the contrary contained
herein, an Indemnified Party (as hereinafter defined) shall preserve his,
her or
its rights to bring any action with respect to a claim for indemnification
hereunder by providing notice to the Indemnifying Party (as hereinafter defined)
of such claim on or prior to the expiration of the survival period.
6.02 Indemnification
by Sellers. Subject
to the provisions of Section 6.05 hereof, Sellers shall severally and not
jointly, pro rata in accordance with each Seller’s percentage interests in the
aggregate principal amount of the Notes, indemnify, defend and hold harmless
Buyer and each of its Affiliates (which, following the Closing, shall include
the Company), and its and their respective directors, officers, employees,
stockholders, partners, members, managers, agents and representatives (each,
a
“Buyer Indemnified Party”) from and against, and pay to the Buyer
Indemnified Parties:
(a) any
and all Losses, whether or not involving a third party claim, incurred by
such
Buyer Indemnified Party, in connection with, based upon, attributable to,
arising from or as a result of: (i)
the failure of any representation or
warranty of the Sellers and or the Company contained in
this Agreementto be true and correct as of the Closing Date (or as
38
of
an
earlier date if a representation or warranty expressly states that it is
being
made as of an earlier date) (provided, however, that each Seller’s
obligation to indemnify Buyer Indemnified Parties and pay their reasonable
costs
and expenses for a breach such Seller of his, her or its representations
and
warranties contained in Section 3.02(b) shall be several to such Seller and
shall not be offset pro rata against the Notes of the other Sellers); and
(ii)
any breach by any Seller or the Company of, or failure by any Seller or the
Company to perform, any of its covenants or obligations contained in this
Agreement; and (iii) any Known
Liabilities; and
(b) Any
and all Losses arising out of, relating to (i) any Tax year beginning before
and
ending after the Closing Date (“Straddle Period Taxes”) to the extent
allocable to the Sellers as provided for below, and (ii) any transfer, gains,
documentary, sales, use, registration, stamp, value added or other similar
Taxes
payable by reason of the transactions contemplated by this Agreement (with
respect to item (ii), to the extent any such Taxes arise from any tax treatment
of the transaction inconsistent with a stock purchase
transaction). Straddle Period Taxes allocable to the Sellers shall be
deemed to be (A) in the case of Taxes imposed on a periodic basis (such as
real
or personal property Taxes), the amount of such Taxes for the entire period
(or,
in the case of such Taxes determined on an arrears basis, the amount of such
Taxes for the immediately preceding period) multiplied by a fraction, the
numerator of which is the number of calendar days in the straddle period
ending
on and including the Closing Date and the denominator of which is the number
of
calendar days in the entire relevant straddle period and (B) in the case
of
Taxes not described in (A) above (such as franchise Taxes, Taxes that are
based
upon or related to income or receipts, based upon occupancy or imposed in
connection with any sale or other transfer or assignment of property (real
or
personal, tangible or intangible)), the amount of any such Taxes shall be
determined based on an actual or hypothetical “closing of the books” as of the
close of business on the Closing Date.
6.03 Indemnification
by Buyer. Buyer
shall indemnify, defend and hold harmless Sellers and each of their Affiliates
and their respective directors, officers, employees, stockholders, partners,
members, managers, agents and representatives (each, a “Seller
Indemnified Party”) from and against, and pay to the Seller Indemnified
Parties:
(a) any
and all Losses, whether or not involving a third party claim, incurred by
such
Seller Indemnified Party, in connection with, based upon, attributable to,
arising from or as a result of: (i) the failure of any representation or
warranty of the Buyer contained in this Agreement to be true and correct
as of
the Closing Date (or as of an earlier date if a representation and warranty
expressly states that it is being made as of an earlier date); and (ii) any
breach by Buyer of, or failure by Buyer to perform, any of its covenants
or
obligations contained in this Agreement; and
(b) Any
and all Losses arising out of, relating to, or caused by any liability of
the
Company for any Taxes of the Company with respect to (i) any Tax year or
portion
thereof beginning after the Closing Date (“Post-Closing Period Taxes”),
and (ii) the portion of Straddle Period Taxes not allocable to Sellers pursuant
to Section 6.02(b).
6.04 Procedures
for Indemnification. Except
as provided in Section 7.02,
the procedures for indemnification shall be as follows:
39
(a) The
party claiming the indemnification (the “Indemnified Party”) shall
promptly give notice to the party from whom the indemnification is claimed
(the
“Indemnifying Party”) of any claim whether between the parties or brought
by a third party against the Indemnified Party, specifying in reasonable
detail
(i) the factual basis for such claim and (ii) the amount of the
claim. If a claim relates to an action, suit, or proceeding filed by
a third party against the Indemnified Party, such notice shall be given by
the
Indemnified Party to the Indemnifying Party promptly but in any event within
five (5) Business Days after written notice of such action, suit, or proceeding
shall have been given to the Indemnified Party. Failure to give
prompt notice shall not affect the indemnification obligations hereunder
in the
absence of actual prejudice.
(b) Following
receipt of notice from the Indemnified Party of a claim, the Indemnifying
Party
shall have thirty (30) days in which to make such investigation of the claim
as
the Indemnifying Party shall deem necessary or desirable. For the
purposes of such investigation, the Indemnified Party agrees to make available
to the Indemnifying Party and or its authorized representative(s) the
information relied upon by the Indemnified Party to substantiate the
claim. If the Indemnified Party and the Indemnifying Party agree at
or prior to the expiration of said thirty (30) day period (or any agreed
upon
extension thereof) to the validity and amount of such claim, or if the
Indemnifying Party does not respond to such notice, the Indemnifying Party
shall
immediately pay to the Indemnified Party the full amount of the claim, or,
in
the case of a Buyer Indemnified Party, may offset the amount of such claim,
pro
rata against the Notes, pursuant to the provisions set forth in Section
6.05.
(c) With
respect to any third party claim as to which the Indemnified Party is seeking
indemnification hereunder, the Indemnifying Party shall have the right at
its
own expense to participate in or, if it so elects, to assume control of the
defense of such claim, and the Indemnified Party shall cooperate fully with
the
Indemnifying Party, subject to reimbursement for reasonable actual out-of-pocket
expense (other than legal or other professional expenses) incurred by the
Indemnified Party as the result of a request by the Indemnifying Party to
so
cooperate. If the Indemnifying Party elects to assume control of the
defense of any third-party claim, the Indemnified Party shall have the right
to
participate in (but not control) the defense of such claim at its own
expense. The Indemnifying Party shall not, without the prior written
consent of the Indemnified Party (such consent not to be unreasonably delayed,
withheld or conditioned), settle, compromise or offer to settle or compromise
any such claim or demand on a basis which would result in the imposition
of a
consent order, injunction or decree which would restrict the future activity
or
conduct of the Indemnified Party or any subsidiary or Affiliate thereof or
if
such settlement or compromise does not include an unconditional release of
the
Indemnified Party for any liability arising out of such claim or demand or
any
related claim or demand.
(d) If
a claim, whether between the parties or by a third party, requires immediate
action, the parties will make all reasonable efforts to reach a decision
with
respect thereto as expeditiously as possible.
(e) If
the Indemnifying Party does not elect to assume control or otherwise participate
in the defense of any third-party claim, the Indemnifying Party shall be
bound
by the results obtained in good faith by the Indemnified Party with respect
to
such claim.
40
6.05 Indemnification
Limitations. Except for any fraud or willful misrepresentation,
as to which claims may be brought without limitation as to time or
amount, the
sole recourse of each Buyer Indemnified Parties under this Article VI for
indemnification shall be to offset against any amounts due to Sellers under
the
Notes, pro rata in accordance with their percentage interests in the aggregate
principal amount of the Notes, the amount of any claim for indemnification
made
in good faith by Buyer Indemnified Parties. Notwithstanding the
foregoing, each Buyer Indemnified Party shall be entitled to indemnification
under this Article VI: (i) with respect to a Known Liability or Known
Liabilities, only to the extent the amount of such Known Liability or Known
Liabilities in the aggregate exceeds One Million Three Hundred Thousand Dollars
($1,300,000); and (ii) with respect to a breach of any representation, warranty,
covenant or obligation of Sellers and/or the Company herein, to the extent
the
Losses from such breach individually or in the aggregate exceed Two Hundred
Thousand Dollars ($200,000).
6.06 Subrogation. Upon
making an indemnity payment pursuant to this Agreement, the Indemnifying
Party
will, to the extent of such payment, be subrogated to all rights of the
Indemnified Party against any third party in respect of the damages to which
the
payment related. Without limiting the generality of any other
provision hereof, each such Indemnified Party and Indemnifying Party will
duly
execute upon request all instruments reasonably necessary to evidence and
perfect the above described subrogation rights.
6.07 No
Double Recovery. Notwithstanding
anything herein to the contrary, no party shall be entitled to indemnification
or reimbursement under any provision of this Agreement for any amount to
the
extent such party or its Affiliate has been indemnified or reimbursed for
such
amount under any other provision of this Agreement or the Schedules attached
hereto, or any document executed in connection with this Agreement or
otherwise.
6.08 Treatment
of Indemnity Payments Between the Parties. Unless
otherwise required by applicable Law, all indemnification payments shall
constitute adjustments to the Purchase Price for all Tax purposes, and no
party
shall take any position inconsistent with such characterization on any Tax
Return, in any Tax Audit or judicial or administrative proceeding or
otherwise.
6.09 Reduction
of Losses. Each
of the parties shall use its commercially reasonable efforts to collect the
proceeds of any insurance that would have the effect of reducing any Losses
for
which it may seek indemnification under this Article VI (in which case such
proceeds shall reduce such Losses). To the extent any Losses of an
Indemnified Party for which it may seek indemnification under this Article
VI
are reduced by its receipt of payment under insurance policies or from third
parties (collectively, “Proceeds”), such Proceeds (net of the expenses of
the recovery thereof) shall be credited against such Losses. However,
if indemnification payments under this Agreement shall have been made by
an
Indemnifying Party to an Indemnified Party prior to the receipt of such
Proceeds, then the Indemnified Party shall remit to the Indemnifying Party
the
amount of such Proceeds (net of the expenses of the recovery thereof) to
the
extent of indemnification payments received in respect of such
Losses. Nothing in this Section 6.09
shall impose upon any party any obligation to obtain insurance coverage for
any
Losses, whether occurring before or after the Closing Date. All
Losses for which indemnification is sought under Article VI shall be determined
net of any Tax effects relating thereto.
41
VII.
CERTAIN
TAX MATTERS.
7.01 Filing
of Tax Returns.
(a) Periods
Ending on or Before the Closing Date. Sellers shall prepare or
cause to be prepared and filed or cause to be filed on a timely basis all
Tax
Returns for the Company for all periods ending on or prior to the Closing
Date
which are required to be filed before the Closing Date. Each such Tax
Return shall be true, correct and complete when filed. Sellers shall
cause the Company to pay all Taxes shown as due on such Tax
Returns. Buyer shall prepare or cause to be prepared and file or
cause to be filed all Tax Returns for the Company for all periods ending
on or
prior to the Closing Date which are required to be filed after the Closing
Date. Buyer shall permit Seller Representative to review
and comment on each such Tax Return described in the preceding sentence at
least
ten (10) days prior to filing and shall consider such revisions to such Tax
Returns as are reasonably suggested by Seller Representative.
(b) Periods
Beginning Before and Ending After the Closing Date. To the extent
that any Tax Returns of the Company relate to any Tax periods which begin
before
the Closing Date and end after the Closing Date, Buyer shall prepare or cause
to
be prepared and file or cause to be filed any such Tax Returns. Buyer
shall permit Sellers to review and reasonably comment on each such Tax Return
described in the preceding sentence, for which Sellers may have Tax liability,
at least ten (10) days prior to filing such Tax Returns. Any Taxes of
the Company with respect to the portion of such period ending on the Closing
Date shall be borne by the Sellers (consistent with the method for allocating
Straddle Period Taxes in Section 6.02(b)). Any
credits relating to a taxable period that begins before and ends after the
Closing Date shall be allocated to the pre- and post-Closing portions of
such
taxable period in a manner consistent with the method for allocating Straddle
Period Taxes in Section 6.02(b). All
determinations necessary to give effect to the foregoing allocations shall
be
made in a manner consistent with prior practice of the Company.
7.02 Tax
Contests.
(a) Notification
of Contests. Buyer shall notify Sellers in writing within fifteen
(15) days of receipt by Buyer or the Company of written notice of any pending
or
threatened U.S. federal, state, local or non-U.S. audits, examinations,
investigations or other administrative proceedings (such audits, examinations,
investigations and other administrative proceedings referred to collectively
as
“Tax Audits”) or assessments, which may affect the liability for Taxes of
Sellers. Sellers shall notify Buyer in writing within fifteen (15)
days of receipt by any Seller of written notice of any pending or threatened
Tax
Audits or assessments, which may affect the liability for Taxes (including,
without limitation, under this Agreement) of Buyer or the Company. If
Sellers, on the one hand, or Buyer, on the other hand, fails to give such
prompt
notice to the other Party it shall not be entitled to indemnification for
any
Taxes arising in connection with such Tax Audit or assessment if such failure
to
give notice materially adversely affects the other Party's right to participate
in the Audit or assessment.
(b) Which
Party Controls.
42
(i) Sellers’
Items. If such Tax Audit relates to any period ending prior to
the Closing Date or for any Taxes for which Sellers, either individually
or
collectively, are liable in full hereunder, Sellers shall at their expense
control the defense and settlement of such Tax Audit.
(ii) Buyer's
Items. Buyer shall at its expense control the defense and
settlement of all other Tax Audits related to the Company.
(iii) Participation
Rights. Notwithstanding the provisions set forth above, any Party
whose liability for Taxes may be affected by a Tax Audit shall be entitled
to
participate at its expense in such defense and to employ counsel of its choice
at its expense.
VIII.
MISCELLANEOUS.
8.01 Expenses. Sellers
shall bear their own expenses incurred in connection with the preparation,
execution and performance of this Agreement and the transactions contemplated
hereby, including all fees and expenses of agents, representatives, counsel,
accountants and investment banks.
8.02 Public
Announcements. Subject
to any requirement of applicable Law, all public announcements or similar
publicity with respect to this Agreement or the transactions contemplated
hereby
shall be made or issued only with the prior written consent of
Buyer.
8.03 Appointment
of Seller Representative as Attorney-in-Fact.
(a) Any
action to be taken by the Sellers hereunder shall be taken for the Sellers
by
Xxxxxx X. Xxxx who shall serve as their representative (the “Seller
Representative”). In the event of the death or Permanent Disability of
Seller Representative, Sellers holding a majority of the Shares immediately
prior to the Closing may appoint a substitute therefor. Each Seller, by his,
her
or its execution of this Agreement, hereby irrevocably appoints Seller
Representative as his, her or its agent, proxy and attorney-in-fact for all
purposes of this Agreement, the other Transaction Documents and any ancillary
agreements. Any person or entity not a party to this Agreement shall
be entitled to rely for all purposes on all acts, notices, instructions and
communications of Seller Representative as the acts, notices, instructions
and
communications of the Sellers and the delivery, in accordance with this
Agreement, of any notices or communications to Seller Representative shall
be in
all respects equivalent to delivery to the Sellers. In performing its
duties as such, Seller Representative shall not incur any liability to any
Seller except for its willful misconduct.
(b) Each
of the Sellers appointing Seller Representative hereunder hereby expressly
acknowledges and agrees that Seller Representative is authorized to act on
behalf of such Seller notwithstanding any dispute or disagreement among such
Sellers, and that any Person shall be entitled to rely on any and all action
taken by Seller Representative under this Agreement without liability to,
or
obligation to inquire of, any of such Sellers.
8.04 Successors. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
43
8.05 Further
Assurances. Each
of the parties hereto agrees that it will, from time to time after the date
of
this Agreement, execute and deliver such other certificates, documents and
instruments and take such other action as may be reasonably requested by
the
other party to carry out the actions and transactions contemplated by this
Agreement.
8.06 Waiver.
(a) No
failure on the part of any party to exercise any power, right, privilege
or
remedy under this Agreement, and no delay on the part of any party in exercising
any power, right, privilege or remedy under this Agreement, shall operate
as a
waiver of such power, right, privilege or remedy; and no single or partial
exercise of any such power, right, privilege or remedy shall preclude any
other
or further exercise thereof or of any other power, right, privilege or
remedy.
(b) No
party shall be deemed to have waived any claim arising out of this Agreement,
or
any power, right, privilege or remedy under this Agreement, unless the waiver
of
such claim, power, right, privilege or remedy is expressly set forth in a
written instrument duly executed and delivered on behalf of such party; and
any
such waiver shall not be applicable or have any effect except in the specific
instance in which it is given.
8.07 Entire
Agreement; Amendment. This
Agreement (together with the other Transaction Documents, certificates,
agreements, Schedules, exhibits, instruments and other documents referred
to
herein) constitutes the entire agreement among the parties with respect to
the
subject matter hereof and thereof and supersedes all prior agreements, both
written and oral, with respect to such subject matter. This Agreement
may not be amended except by a written agreement executed by the party charged
with the amendment.
8.08 Governing
Law. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE
STATE OF CALIFORNIA WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
8.09 Consent
to Jurisdiction. Any
controversy, dispute or claim of any nature whatsoever arising out of, in
connection with or in relation to this Term Sheet or the transaction
contemplated herein will be resolved by final and binding arbitration in
accordance with the Streamlined Rules of and by a retired judge at JAMS,
Inc. in
Los Angeles and all parties hereto consent to the personal jurisdiction of
the
State of California for such arbitration and enforcement of any award by
JAMS. The prevailing party in any dispute will be entitled to recover
all reasonable attorney’s fees, costs and expenses in addition to other
allowable costs.
8.10 Assignment. No
party may assign this Agreement, or any of its rights or obligations hereunder,
to any other Person without the prior written consent of the other parties
hereto, except that Buyer may make such an assignment to an Affiliate without
prior consent.
8.11 Notices. All
notices and other communications hereunder shall be in writing and shall
be
deemed to have been duly given (a) when delivered personally, (b) when
transmitted by facsimile (transmission confirmed), (c) on the fifth
Business Day following mailing by registered or certified mail (return receipt
requested), or (d) on the next Business Day following deposit with an
overnight delivery service of national reputation, to the parties at the
following addresses and facsimile numbers (or at such other address or facsimile
number for a party as may be specified by like notice):
44
If
to Buyer:
0000-X
Xxxxxxxx Xxx
Xxxxxx
Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx
Xxxxxxx
Facsimile:
(000) 000-0000
|
with
a copy to:
Xxxxx
Xxxxxxx, LLP
The
Gas Company Tower
000
Xxxx Xxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxxxxx, XX 00000
Attention: Xxxxx
Xxxx-Xxxxx, Esq.
Facsimile: (000)
000-0000
|
If
to Sellers:
See
addresses as set forth on the signature pages hereto
|
with
copy to:
Xxxxx
& Larder LLP
000
X. Xxxxxxxx, Xxxxx 0000
Xxx
Xxxxx, XX 00000
Attention:
Xxxxxxx X. Xxxxx, Esq.
Facsimile: (000)
000-0000
|
If
to the Company:
Trusonic
Inc.
0000
Xxx Xxx.
Xxxxx
XX-X
Xx
Xxxxx, Xxxxxxxxxx 00000
Facsimile: (000)
000-0000
|
with
copy to:
Xxxxx
& Larder LLP
000
X. Xxxxxxxx, Xxxxx 0000
Xxx
Xxxxx, XX 00000
Attention:
Xxxxxxx X. Xxxxx, Esq.
Facsimile: (000)
000-0000
|
8.12 Headings. The
headings contained in this Agreement are for reference purposes only and
shall
not affect in any way the meaning or interpretation of this
Agreement.
8.13 Counterparts. This
Agreement may be executed in multiple counterparts, all of which shall be
considered one and the same agreement. This Agreement may also be
executed via facsimile or via image or pdf file sent by electronic mail,
which
shall be deemed an original.
8.14 Schedules. The
Schedules to this Agreement are incorporated by reference herein and are
made a
part hereof as if they were fully set forth herein.
8.15 Severability. The
invalidity of any term or terms of this Agreement shall not affect any other
term of this Agreement, which shall remain in full force and
effect.
8.16 Advice
of Counsel. Each
party to this Agreement has consulted with legal counsel of its own choosing,
or
has had the opportunity to consult with legal counsel, and has read and
understood all of the terms and provisions of this Agreement. This
Agreement shall not be construed against any party by reason of the drafting
or
preparation hereof.
45
8.17 No
Third-Party Beneficiaries. There
are no third party beneficiaries of this Agreement or of the transactions
contemplated hereby and nothing contained herein shall be deemed to confer
upon
any Person other than the parties hereto (and their permitted successors
and
assigns) any right to insist upon or to enforce the performance of any of
the
obligations contained herein.
[The
remainder of the page is intentionally left blank.]
46
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date
first
above written.
BUYER
a
Nevada corporation
By: /s/
Xxxxxx Xxxxxxx
Xxxxxx
X. Xxxxxxx
Chief
Executive Officer
|
THE
COMPANY AND SELLERS
|
||
TRUSONIC
INC.,
a
Delaware corporation
By:
/s/ Xxxxxx X. Xxxx
Xxxxxx
X. Xxxx
Chief
Executive Officer and President
|
||
ALCOY
INVESTMENTS, LLC, a
California
limited liability company
By:
/s/ Xxxxxx Vilplana
Name:
Xxxxxx Vilplana
Its: Managing
Member
Address:
|
/s/
Xxxxxxxxx Xxxxx
XXXXXXXXX
XXXXX
Address:
|
|
/s/
Xxxxxxx X. X'Xxxxx
XXXXXXX
X. X’XXXXX, Trustee of the X’Xxxxx Family Trust dated July 4,
1995
Address:
|
/s/
Xxxxxx X. X'Xxxxx
XXXXXX
X. X’XXXXX, Trustee of the Xxxxxx X. X’Xxxxx Trust dated May 1,
1995
Address:
|
47
/s/
Xxxx Xxxxxx
XXXX
XXXXXX
Address:
|
/s/
Xxxxxxx Xxxxxxxx
XXXXXXX
XXXXXXXX
Address:
|
|
XXXXXXX,
LLC
By: /s/
Xxxxxx X. Xxxxxxx
Name: Xxxxxx
X. Xxxxxxx
Its: President
Address:
|
/s/
Xxxxx X. Xxxx
XXXXX
X. XXXX
Address:
|
|
/s/
Xxxx Xxxx
XXXX
XXXX
/s/
Xxxxx Xxxx
XXXXX
XXXX
Address:
|
/s/
Xxxxxx X. Xxxx
XXXXXX
X. XXXX, Trustee of the Xxxx Family Trust dated September 30,
1994
Address:
|
|
/s/
Xxxxx XxXxxxxx
XXXXX
XxXXXXXX
Address:
|
/s/
Xxxxxxxxx Xxxxxxxx
XXXXXXXXX
XXXXXXXX
Address:
|
|
/s/
Xxxxxxx Xxxx
XXXXXXX
XXXX
Address:
|
/s/
Xxxxxx Xxxxx
XXXXXX
XXXXX
Address:
|
48
|
||
/s/
Xxxx X. Xxxxxxxx
XXXX
X. XXXXXXXX, Co-Trustee of the Xxxx X. Xxxxxxxx & Xxxxxxxx X. Xxxxxxx
Trust U/A/D 8/25/98
/s/
Xxxxxxxx X. Xxxxxxx
XXXXXXXX
X. XXXXXXX, Co-Trustee of the Xxxx X. Xxxxxxxx & Xxxxxxxx X. Xxxxxxx
Trust U/A/D 8/25/98
Address:
|
/s/
Xxxxxx X. Xxxxx
XXXXXX
X. XXXXX, Trustee of the Xxxxxx and Xxxx Xxxxx Trust dated
2/25/98
Address:
|
|
/s/
Xxxxx Xxxxxx
XXXXX
XXXXXX
Address:
|
/s/
Xxxxx Xxxxxx
XXXXX
XXXXXX
Address:
|
|
/s/
Xxxxxxxx Xxxxxxx
XXXXXXX
XXXXXXX
/s/
Xxxx Xxxxxxx
XXXX
XXXXXXX
Address:
|
/s/
Xxxxx Xxxxxx
XXXXX
XXXXXX
Address:
|
|
/s/
Xxx Xxxx
XXXXXXX
XXXX
Address:
|
/s/
Xxxx Wennas
XXXX
WENNAS
Address:
|
|
/s/
Xxxx Xxxxxxxx
XXXX
XXXXXXXX
Address:
|
49