STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE
by and among
LIQUIDIX, INC.
a Florida Corporation
and
ANSCOTT INDUSTRIES, INC.
A New Jersey Corporation
effective as of April 15, 2003
STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE
THIS STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE, made and entered into
this day of March, 2003, by and among Liquidix, Inc., a Florida corporation with
its principal place of business located at 00000 X. Xxxxx Xxxxx, Xxxxx 0,
Xxxxxxxx Xxxxx, Xxxxxxx 00000 ("Liquidix"); principal shareholders of Liquidix
("Liquidix Shareholders"); AFS Seals, Inc. a corporation with its principal
place of business located at 00000 X. Xxxxx Xxxxx, Xxxxx 0, Xxxxxxxx Xxxxx,
Xxxxxxx 00000 ("AFS") ; Anscott Industries, Inc., a New Jersey corporation with
its principal place of business at 00 Xxxxxx Xxxxx, Xxxxx, Xxx Xxxxxx 00000
("Anscott") and the shareholders of Anscott ("Shareholders") as set forth on
Exhibit A attached hereto (collectively Anscott and the shareholders of Anscott
shall be known as the "Anscott Group").
PREMISES
A. This Agreement provides for the acquisition of Anscott whereby
Anscott shall become a wholly owned subsidiary of Liquidix and in connection
therewith, the issuance of a total of 45,000,000 shares of Liquidix to the
Anscott shareholders and the transfer of all of the current assets and
liabilities of Liquidix to AFS.
B. The board of directors of Anscott and Liquidix have determined,
subject to the terms and conditions set forth in this Agreement, that the
transaction contemplated hereby is desirable and in the best interests of their
stockholders, respectively. This Agreement is being entered into for the purpose
of setting forth the terms and conditions of the proposed acquisition.
AGREEMENT
NOW, THEREFORE, on the stated premises and for and in consideration of
the mutual covenants and agreements hereinafter set forth and the mutual
benefits to the parties to be derived here from, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS AND WARRANTIES OF
LIQUIDIX, INC.
As an inducement to and to obtain the reliance of Anscott, Liquidix and
the Liquidix Shareholders represent and warrant as follows:
SECTION 1.1 ORGANIZATION. Liquidix is a corporation duly organized,
validly existing, and in good standing under the laws of Florida and has the
corporate power and is duly authorized, qualified, franchised and licensed under
all applicable laws, regulations, ordinances and orders of public authorities to
own all of its properties and assets and to carry on its business in all
material respects as it is now being conducted, including qualification to do
business as a foreign corporation in the jurisdiction in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification. Included in the Schedules attached hereto
(hereinafter defined) are complete and correct copies of the articles of
incorporation, bylaws and amendments thereto as in effect on the date hereof.
The execution and delivery of this Agreement does not and the consummation of
the transactions contemplated by this Agreement in accordance with the terms
hereof will not violate any provision of Liquidix's articles of incorporation or
bylaws. Liquidix has full power, authority and legal right and has taken all
action required by law, its articles of incorporation, its bylaws or otherwise
to authorize the execution and delivery of this Agreement.
SECTION 1.2 CAPITALIZATION. The authorized capitalization of
Liquidix consists of 75,000,000 Common Shares, $0.001 par value per
share and no Preferred Shares authorized or issued and outstanding. As
of the date hereof, Liquidix has 684,069 common shares issued and
outstanding. Upon execution of this agreement, Liquidix will file the
necessary documents to undertake a 1-20 reverse split of its issued and
outstanding shares. An additional share shall be issued to all holders
of a fractional share .50 or greater and no additional shares shall be
issued to a holder of a fractional share less than .50. Liquidix is
presently a 1934 Exchange Act reporting company and has filed all
necessary reports, quarterly, annual and special with the Securities
and Exchange Commission of the United States on a timely basis. The
Liquidix common stock trades on the OTC Electronic Bulletin Board under
the symbol "LQDX".
All issued and outstanding shares are legally issued, fully paid and
nonassessable and are not issued in violation of the preemptive or other rights
of any person. Liquidix has no securities, warrants or options authorized or
issued.
SECTION 1.3 SUBSIDIARIES. Liquidix has one subsidiary, Advanced Fluid
Systems, Ltd.
SECTION 1.4 TAX MATTERS: BOOKS AND RECORDS.
(a) The books and records, financial and others, of Liquidix are in all
material respects complete and correct and have been maintained in
accordance with good business accounting practices; and
(b) Liquidix has no liabilities with respect to the payment of any
country, federal, state, county, or local taxes (including any
deficiencies, interest or penalties).
SECTION 1.5 LITIGATION AND PROCEEDINGS. There are no actions, suits,
proceedings or investigations pending or threatened by or against or affecting
Liquidix or its properties, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign or before any
arbitrator of any kind that would have, individually or in the aggregate, a
material adverse affect on the business, operations, financial condition or
income of Liquidix. Liquidix is not in default with respect to any judgment,
order, writ, injunction, decree, award, rule or regulation of any court,
arbitrator or governmental agency or instrumentality or of any circumstances
which, after reasonable investigation, would result in the discovery of such a
default.
SECTION 1.6 MATERIAL CONTRACT DEFAULTS. Liquidix is not in default in
any material respect under the terms of any outstanding contract, agreement,
lease or other commitment which is material to the business, operations,
properties, assets or condition of Liquidix, and there is no event of default in
any material respect under any such contract, agreement, lease or other
commitment in respect of which Liquidix has not taken adequate steps to prevent
such a default from occurring.
SECTION 1.7 INFORMATION. The information concerning Liquidix as set
forth in this Agreement and in the attached Schedules is complete and accurate
in all material respects and does not contain any untrue statement of a material
fact or omit to state a material fact required to make the statements made in
light of the circumstances under which they were made, not misleading.
Liquidix's filings with the SEC are complete and accurate in all material
respects and do not contain any untrue statement of a material fact or omit to
state a material fact required to make the statements made in light of the
circumstances under which they were made, not misleading.
SECTION 1.8 TITLE AND RELATED MATTERS. Liquidix has good and
marketable title to and is the sole and exclusive owner of all of its
properties, inventory, interest in properties and assets, real and personal
(collectively, the "Assets") free and clear of all liens, pledges, charges or
encumbrances. Liquidix owns free and clear of any liens, claims, encumbrances,
royalty interests or other restrictions or limitations of any nature whatsoever
and all procedures, techniques, marketing plans, business plans, methods of
management or other information utilized in connection with Liquidix's business.
No third party has any right to, and Liquidix has not received any notice of
infringement of or conflict with asserted rights of other with respect to any
product, technology, data, trade secrets, know-how, proprietary techniques,
trademarks, service marks, trade names or copyrights which, singly on in the
aggregate, if the subject of an unfavorable decision ruling or finding, would
have a materially adverse affect on the business, operations, financial
conditions or income of Liquidix or any material portion of its properties,
assets or rights.
SECTION 1.9 CONTRACTS On the closing date:
(a) There are no material contracts, agreements franchises, license
agreements, or other commitments to which Liquidix is a party or by
which it or any of its properties are bound;
(b) Liquidix is not a party to any contract, agreement, commitment or
instrument or subject to any charter or other corporate restriction or
any judgment, order, writ, injunction, decree or award materially and
adversely affects, or in the future may (as far as Liquidix can now
foresee) materially and adversely affect , the business, operations,
properties, assets or conditions of Liquidix; and
(c) Liquidix is not a party to any material oral or written: (I)
contract for the employment of any officer or employee; (ii) profit
sharing, bonus, deferred compensation, stock option, severance pay,
pension benefit or retirement plan, agreement or arrangement covered by
Title IV of the Employee Retirement Income Security Act, as amended;
(iii) agreement, contract or indenture relating to the borrowing of
money; (iv) guaranty of any obligation for the borrowing of money or
otherwise, excluding endorsements made for collection and other
guaranties, of obligations, which, in the aggregate exceeds $1,000; (v)
consulting or other contract with an unexpired term of more than one
year or providing for payments in excess of $5,000 in the aggregate;
(vi) collective bargaining agreement; (vii) contract, agreement or
other commitment involving payments by it for more than $10,000 in the
aggregate.
SECTION 1.10 COMPLIANCE WITH LAWS AND REGULATIONS. Liquidix has
complied with all applicable statutes and regulations of any federal, state or
other governmental entity or agency thereof, except to the extent that
noncompliance would not materially and adversely affect the business,
operations, properties, assets or condition of Liquidix or would not result in
Liquidix incurring material liability.
SECTION 1.11 INSURANCE. All of the insurable properties of Liquidix are
insured for Liquidix `s benefit under valid and enforceable policy or policies
containing substantially equivalent coverage and will be outstanding and in full
force at the Closing Date.
SECTION 1.12 APPROVAL OF AGREEMENT. The directors of Liquidix have
authorized the execution and delivery of the Agreement by and have approved the
transactions contemplated hereby.
SECTION 1.13 MATERIAL TRANSACTIONS OR AFFILIATIONS. There are no
material contracts or agreements of arrangement between Liquidix and any person,
who was at the time of such contract, agreement or arrangement an officer,
director or person owning of record, or known to beneficially own ten percent
(10%) or more of the issued and outstanding Common Shares of Liquidix and which
is to be performed in whole or in part after the date hereof. Liquidix has no
commitment, whether written or oral, to lend any funds to, borrow any money from
or enter into material transactions with any such affiliated person.
SECTION 1.14 NO CONFLICT WITH OTHER INSTRUMENTS. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to which Liquidix is a
party or to which any of its properties or operations are subject.
SECTION 1.15 GOVERNMENTAL AUTHORIZATIONS. Liquidix has all licenses,
franchises, permits or other governmental authorizations legally required to
enable it to conduct its business in all material respects as conducted on the
date hereof. Except for compliance with federal and state securities and
corporation laws, as hereinafter provided, no authorization, approval, consent
or order of, or registration, declaration or filing with, any court or other
governmental body is required in connection with the execution and delivery by
Liquidix of this Agreement and the consummation of the transactions contemplated
hereby.
SECTION 1.16 TITLE TO THE SHARES. At Closing, Liquidix shall deliver
the Shares, with legal and valid title thereto, free and clear of all liens,
charges, pledges, claims and encumbrances of any kind or nature whatsoever,
other than those created by this Agreement.
SECTION 1.17 FULL DISCLOSURE. No representation or warranty made by
Liquidix in this Agreement and no certificate or document furnished or to be
furnished to Anscott pursuant to this Agreement contains or will contain any
untrue statement of a material fact, or omits or will omit to state a material
fact necessary to make the statements contained herein or therein not
misleading.
SECTION 1.18 REGISTERED STOCK. Liquidix has 5,370,370 shares of common
stock registered pursuant to the Securities Act of 1933 as amended (the
"Securities Act") pursuant to Form SB-2, Commission File Number 333-100284 (the
"Registered Stock").
SECTION 1.19 FINANCIAL REPORTS, SEC DOCUMENTS NO LIABILITIES.
(i) Liquidix's Registration Statement dated October 2, 2002, Liquidix's
Annual Report on Form 10-KSB for the fiscal year ended March 31, 2002, its
Quarterly Reports on Form 10-QSB for the periods ended December 31, 2002,
September 30, 2002 and June 30,2002 and all other reports or registration
statements filed by it subsequent to December 31, 2002 under the Securities Act,
or under Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act, in the form
filed with the SEC, (collectively, the "Liquidix SEC Documents"), with the SEC,
as of the date filed: (A) complied in all material respects as to form with the
applicable requirements under the Securities Act, the Exchange Act and the
Xxxxxxxx-Xxxxx Act of 2002, as amended ("SOA"), as the case may be; (B) did not
contain any untrue statement or a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; and (C)
each of the balance sheets contained in or incorporated by reference into any
such Liquidix SEC Document (including the related notes and schedules thereto)
fairly presented the financial position of Liquidix as of its date, and each of
the statements of income and changes in stockholders' equity and cash flows or
equivalent statements in such Liquidix SEC Documents (including any related
notes and schedules thereto) fairly presents and will fairly present the results
of operations, changes in stockholders' equity and changes in cash flows, as the
case may be, of Liquidix for the periods to which they relate, in each case in
accordance with United States generally accepted accounting principles ("U.S.
GAAP") consistently applied during the periods involved, except in each case as
may be noted therein, subject to normal year-end audit adjustments in the case
of unaudited statements. Liquidix is in full compliance with all of its
obligations under the Securities Act, Exchange Act, SOA and OTCBB including but
not limited to, all rules, regulations and the like promulgated under the
Securities Act, Exchange Act, SOA and OTCBB. The books and records of Liquidix
have been, and are being, maintained in all material respects in accordance with
U.S. GAAP and any other applicable legal and accounting requirements and reflect
only actual transaction.
(ii) Except as expressly set forth in the Section 3.7(ii) Liquidix does
not have any debt, obligation or liability of any kind, whether known or
unknown, contingent, absolute, or otherwise. Without limiting the foregoing, the
Surviving Corporation shall not assume, undertake or accept, and shall have no
responsibility with respect to, liabilities and obligations related to Liquidix
or operation of Liquidix prior to the Effective Time.
SECTION 1.20 NO BROKERS. No action has been taken by it that would give
rise to any valid claim against any party hereto for a brokerage commission,
finder's fee or other like payment with respect to the transactions contemplated
by this Agreement, excluding fees to be paid to the Liquidix Financial Advisor.
SECTION 1.21 ABSENCE OF CHANGES. Since the date of Liquidix's most
recent financial statements included in the 10QSB dated December 31, 2002 until
the date hereof there have been and shall be no changes in its financial
condition or operations, except for changes in the ordinary course of business.
SECTION 1.22 REORGANIZATION. Liquidix has no reason to believe that any
conditions exist that might prevent or impede the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code.
SECTION 1.23 OTCBB, SYMBOL AND BLUE SKY. Liquidix's restricted and
issued common stock (when eligible for resale) and Registered Stock is
authorized to trade on the over the counter bulletin board ("OTCBB") and
currently trades under the symbol LQDX. The Company's securities are approved
for trading in all fifty (50) states of the United States.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
OF ANSCOTT INDUSTRIES, INC.
As an inducement to, and to obtain the reliance of Liquidix, Anscott
represents and warrants as follows:
SECTION 2.1 ORGANIZATION. Anscott is a corporation duly organized,
validly existing and in good standing under the laws of the New Jersey and has
the corporate power and is duly authorized, qualified, franchised and licensed
under all applicable laws, regulations, ordinances and orders of public
authorities to own all of its properties and assets and to carry on its business
in all material respects as it is now being conducted, including qualification
to do business as a foreign entity in the country or states in which the
character and location of the assets owned by it or the nature of the business
transacted by it requires qualification. Included in the Attached Schedules (as
hereinafter defined) are complete and correct copies of the articles of
incorporation, bylaws and amendments thereto as in effect on the date hereof.
The execution and delivery of this Agreement does not and the consummation of
the transactions contemplated by this Agreement in accordance with the terms
hereof will not, violate any provision of Anscott's certificate of incorporation
or bylaws. Anscott has full power, authority and legal right and has taken all
action required by law, its articles of incorporation, bylaws or otherwise to
authorize the execution and delivery of this Agreement.
SECTION 2.2 CAPITALIZATION. The authorized capitalization of Anscott
consists of 1,000,000 shares, $.001 par value. As of the date hereof, there are
1,000,000 shares issued and outstanding.
All issued and outstanding common shares have been legally issued,
fully paid, are nonassessable and not issued in violation of the preemptive
rights of any other person. Anscott has no other securities, warrants or options
authorized or issued.
SECTION 2.3 SUBSIDIARIES. Anscott has no subsidiaries.
SECTION 2.4 TAX MATTERS; BOOKS & RECORDS
(a) The books and records, financial and others, of Anscott are in all
material respects complete and correct and have been maintained in
accordance with good business accounting practices; and
(b) Anscott has no liabilities with respect to the payment of any
country, federal, state, county, local or other taxes (including any
deficiencies, interest or penalties).
SECTION 2.5 INFORMATION. The information concerning Anscott as set
forth in this Agreement and in the attached Schedules is complete and accurate
in all material respects and does not contain any untrue statement of a material
fact or omit to state a material fact required to make the statements made, in
light of the circumstances under which they were made, not misleading.
SECTION 2.6 TITLE AND RELATED MATTERS. Except as set forth in Section
2.6, Anscott has good and marketable title to and is the sole and exclusive
owner of all of its properties, inventory, interests in properties and assets,
real and personal (collectively, the "Assets") free and clear of all liens,
pledges, charges or encumbrances. Except as set forth in the Schedules attached
hereto, Anscott owns free and clear of any liens, claims, encumbrances, royalty
interests or other restrictions or limitations of any nature whatsoever and all
procedures, techniques, marketing plans, business plans, methods of management
or other information utilized in connection with Anscott's business. Except as
set forth in the attached Schedules, no third party has any right to, and
Anscott has not received any notice of infringement of or conflict with asserted
rights of others with respect to any product, technology, data, trade secrets,
know-how, proprietary techniques, trademarks, service marks, trade names or
copyrights which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a materially adverse affect on the
business, operations, financial conditions or income of Anscott or any material
portion of its properties, assets or rights.
SECTION 2.7 LITIGATION AND PROCEEDINGS. There are no actions, suits or
proceedings pending or threatened by or against or affecting Anscott, at law or
in equity, before any court or other governmental agency or instrumentality,
domestic or foreign or before any arbitrator of any kind that would have a
material adverse effect on the business, operations, financial condition, income
or business prospects of Anscott. Anscott does not have any knowledge of any
default on its part with respect to any judgement, order, writ, injunction,
decree, award, rule or regulation of any court, arbitrator or governmental
agency or instrumentality.
SECTION 2.8 NO CONFLICT WITH OTHER INSTRUMENTS.The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to which Anscott is a
party or to which any of its properties or operations are subject.
SECTION 2.9 MATERIAL CONTRACT DEFAULTS. To the best of Anscott's
knowledge and belief, it is not in default in any material respect under the
terms of any outstanding contract, agreement, lease or other commitment which is
material to the business, operations, properties, assets or condition of
Anscott, and there is no event of default in any material respect under any such
contract, agreement, lease or other commitment in respect of which Anscott has
not taken adequate steps to prevent such a default from occurring.
SECTION 2.10 GOVERNMENTAL AUTHORIZATIONS. To the best of Anscott's
knowledge, Anscott has all licenses, franchises, permits and other governmental
authorizations that are legally required to enable it to conduct its business
operations in all material respects as conducted on the date hereof. Except for
compliance with federal and state securities or corporation laws, no
authorization, approval, consent or order of, or registration, declaration or
filing with, any court or other governmental body is required in connection with
the execution and delivery by Anscott of the transactions contemplated hereby.
SECTION 2.11 COMPLIANCE WITH LAWS AND REGULATIONS. To the best of
Anscott's knowledge and belief, Anscott has complied with all applicable
statutes and regulations of any federal, state or other governmental entity or
agency thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets or condition of
Anscott or would not result in Anscott 's incurring any material liability.
SECTION 2.12 INSURANCE. All of the insurable properties of Anscott are
insured for Anscott`s benefit under valid and enforceable policy or policies
containing substantially equivalent coverage and will be outstanding and in full
force at the Closing Date.
SECTION 2.13 APPROVAL OF AGREEMENT. The directors of Anscott have
authorized the execution and delivery of the Agreement and have approved the
transactions contemplated hereby.
SECTION 2.14 MATERIAL TRANSACTIONS OR AFFILIATIONS. As of the Closing
Date, there will exist no material contract, agreement or arrangement between
Anscott and any person who was at the time of such contract, agreement or
arrangement an officer, director or person owning of record, or known by Anscott
to own beneficially, ten percent (10%) or more of the issued and outstanding
Common Shares of Anscott and which is to be performed in whole or in part after
the date hereof except with regard to an agreement with the Anscott shareholders
providing for the distribution of cash to provide for payment of federal and
state taxes on Subchapter S income. Anscott has no commitment, whether written
or oral, to lend any funds to, borrow any money from or enter into any other
material transactions with, any such affiliated person.
SECTION 2.15 FILINGS. Anscott covenants that it will assist Liquidix in
the preparation of all filings required by the Securities Exchange Act in a
timely manner, including but not limited to, the filing of a Form 8K within
fifteen (15) days after the execution of this Agreement and the delivery of the
audited financial statements for Anscott in sufficient time to allow for the
filing of an amended 8K with the audited financial statements within sixty (60)
days thereafter.
ARTICLE III
EXCHANGE PROCEDURE AND OTHER CONSIDERATION
SECTION 3.1 SHARE EXCHANGE/DELIVERY OF ANSCOTT SECURITIES. On the
Closing Date, the holders of all of the Anscott Common Shares shall deliver to
Liquidix (i) certificates or other documents evidencing all of the issued and
outstanding Anscott Common Shares, duly endorsed in blank or with executed power
attached thereto in transferrable form. On the Closing Date, all previously
issued and outstanding Common Shares of Anscott shall be transferred to
Liquidix, so that Anscott shall become a wholly owned subsidiary of Liquidix.
SECTION 3.2 ISSUANCE OF LIQUIDIX COMMON SHARES. In exchange for all of
the Anscott Common Shares tendered pursuant to Section 3.1, Liquidix shall issue
to the Anscott shareholders a total of 45,000,000Liquidix common shares which
are restricted in accordance with Rule 144 of the 1933 Securities Act. The
45,000,000 common shares shall be transferred to the Anscott shareholders.
In the event Anscott or Liquidix changes (or establishes a record date
for changing) the number of shares of Anscott or Liquidix Common Stock issued
and outstanding prior to the Effective Time as a result of a stock split, stock
dividend, recapitlaization, subdivision, reclassification, combination, exchange
of shares, or similar transaction with respect to the outstanding Anscott or
Liquidix Common Stock, then if the record and payment dates therefore shall be
prior to the Effective Time, the Shares Exchange shall be proportionately
adjusted to reflect such stock split, stock dividend, recapitalization,
subdivision, reclassification, combination, exchange or shares, or similar
transaction. Notwithstanding same, the Anscott shareholders will receive a total
of 45,000,000 shares after the reverse split set forth in Section 1.2.
SECTION 3.3 TRANSFER OF ASSETS. On the Closing Date, Liquidix will
transfer all of its current assets and current liabilities to AFS.
SECTION 3.4 ESCROW OF SHARES. For a period of not less than ninety (90)
days or more than one hundred and eighty days (180) days from the date of the
execution of this Agreement, the 45,000,000 Liquidix shares issued to the
Anscott shareholders shall be held in escrow. At the end of the 90 day period,
the stock held in escrow shall be either returned or released to certain parties
in accordance with the terms of that certain Escrow Agreement between Liquidix,
Anscott and Xxxxxx & Jaclin, LLP, as escrow agents ("Escrow Agreement"). If
there is a default in the Escrow Agreement, then this transaction shall become
null and void and the common stock of Liquidix held by Xxxxxx & Xxxxxx shall be
distributed in accordance with the decision of Xxxxx Xxxxxx, in his sole
discretion and the Anscott shares shall be returned to the Anscott shareholders.
The Liquidix shares will be held in escrow pending the receipt of the Anscott
business plan satisfactory to Xxxxx Xxxxxx and the timely filing of all
necessary documents with the Securities and Exchange Commission, including, but
not limited to the 8K with audited financial statements.
SECTION 3.5 EVENTS PRIOR TO CLOSING. Upon execution hereof or as soon
thereafter as practical, management of Liquidix and Anscott shall execute,
acknowledge and deliver (or shall cause to be executed, acknowledged and
delivered) any and all certificates, opinions, financial statements, schedules,
agreements, resolutions rulings or other instruments required by this Agreement
to be so delivered, together with such other items as may be reasonably
requested by the parties hereto and their respective legal counsel in order to
effectuate or evidence the transactions contemplated hereby, subject only to the
conditions to Closing referenced herein below.
SECTION 3.6 CLOSING. The closing ("Closing") of the transactions
contemplated by this Agreement shall be on March , 2003, time is of the
essence.("Closing Date").
SECTION 3.7 TERMINATION.
(a) This Agreement may be terminated by the board of directors or
majority interest of Shareholders of either Liquidix or Anscott,
respectively, at any time prior to the Closing Date if:
(i) there shall be any action or proceeding before any court
or any governmental body which shall seek to restrain,
prohibit or invalidate the transactions contemplated by this
Agreement and which, in the judgement of such board of
directors, made in good faith and based on the advice of its
legal counsel, makes it inadvisable to proceed with the
exchange contemplated by this Agreement; or
(ii) any of the transactions contemplated hereby are
disapproved by any regulatory authority whose approval is
required to consummate such transactions.
(b) This Agreement may be terminated at any time prior to the Closing
Date by action of the board of directors of Liquidix if Anscott shall
fail to comply in any material respect with any of its covenants or
agreements contained in this Agreement or if any of the representations
or warranties of Anscott contained herein shall be inaccurate in any
material respect, which noncompliance or inaccuracy is not cured after
20 days written notice thereof is given to Anscott. If this Agreement
is terminated pursuant to this paragraph (b) of this Section 3.5, this
Agreement shall be of no further force or effect and no obligation,
right or liability shall arise hereunder.
(c) This Agreement may be terminated at any time prior to the Closing
Date by action of the board of directors of Anscott if Liquidix shall
fail to comply in any material respect with any of its covenants or
agreements contained in this Agreement or if any of the representations
or warranties of Liquidix contained herein shall be inaccurate in any
material respect, which noncompliance or inaccuracy is not cured after
20 days written notice thereof is given to Liquidix. If this Agreement
is terminated pursuant to this paragraph (d) of this Section 3.5, this
Agreement shall be of no further force or effect and no obligation,
right or liability shall arise hereunder.
SECTION 3.8 DIRECTORS OF LIQUIDIX AFTER ACQUISITION. After the Closing
Date, Xxxx Xxxxxxxxx and____________________ shall become the directors of
Liquidix and Xxxxx Xxxxxx and Xxxxxxx Xxx will resign as Directors of Liquidix.
Each director shall hold office until his successor shall have been duly elected
and shall have qualified or until his earlier death, resignation or removal.
SECTION 3.9 OFFICERS OF LIQUIDIX . Upon the closing, the following
persons shall be elected as officers of Liquidix in accordance with procedures
set forth in the Liquidix bylaws:
NAME OFFICE
---- ------
Xxxx Xxxxxxxxx
Chief Executive Officer, Chief
Financial Officer and Secretary
ARTICLE IV
SPECIAL COVENANTS
SECTION 4.1 ACCESS TO PROPERTIES AND RECORDS. Prior to closing,
Liquidix and Anscott will each afford to the officers and authorized
representatives of the other full access to the properties, books and records of
each other, in order that each may have full opportunity to make such reasonable
investigation as it shall desire to make of the affairs of the other and each
will furnish the other with such additional financial and operating data and
other information as to the business and properties of each other, as the other
shall from time to time reasonably request.
SECTION 4.2 AVAILABILITY OF RULE 144. Liquidix and Anscott shareholders
holding "restricted securities, " as that term is defined in Rule 144
promulgated pursuant to the Securities Act will remain as "restricted
securities". Liquidix is under no obligation to register such shares under the
Securities Act, or otherwise. The stockholders of Liquidix and Anscott holding
restricted securities of Liquidix and Anscott as of the date of this Agreement
and their respective heirs, administrators, personal representatives, successors
and assigns, are intended third party beneficiaries of the provisions set forth
herein. The covenants set forth in this Section 4.2 shall survive the Closing
and the consummation of the transactions herein contemplated.
SECTION 4.3 SPECIAL COVENANTS AND REPRESENTATIONS REGARDING THE
LIQUIDIX COMMON SHARES TO BE ISSUED IN THE EXCHANGE. The consummation of this
Agreement, including the issuance of the Liquidix Common Shares to the
Shareholders of Anscott as contemplated hereby, constitutes the offer and sale
of securities under the Securities Act, and applicable state statutes. Such
transaction shall be consummated in reliance on exemptions from the registration
and prospectus delivery requirements of such statutes which depend, inter alia,
upon the circumstances under which the Anscott Shareholders acquire such
securities.
SECTION 4.4 THIRD PARTY CONSENTS. Liquidix and Anscott agree to
cooperate with each other in order to obtain any required third party consents
to this Agreement and the transactions herein contemplated.
SECTION 4.5 ACTIONS PRIOR AND SUBSEQUENT TO CLOSING.
(a) From and after the date of this Agreement until the Closing Date,
except as permitted or contemplated by this Agreement, Liquidix and Anscott will
each use its best efforts to:
(i) maintain and keep its properties in states of
good repair and condition as at present, except for
depreciation due to ordinary wear and tear and damage due to
casualty;
(ii) maintain in full force and effect insurance
comparable in amount and in scope of coverage to that now
maintained by it;
(iii) perform in all material respects all of its
obligations under material contracts, leases and instruments
relating to or affecting its assets, properties and business;
(b) From and after the date of this Agreement until the Closing Date,
Liquidix will not, without the prior consent of Anscott:
(i) except as otherwise specifically set forth
herein, make any change in its articles of incorporation or
bylaws;
(ii) declare or pay any dividend on its outstanding
Common Shares, except as may otherwise be required by law, or
effect any stock split or otherwise change its capitalization,
except as provided herein;
(iii) enter into or amend any employment, severance
or agreements or arrangements with any directors or officers;
(iv) grant, confer or award any options, warrants,
conversion rights or other rights not existing on the date
hereof to acquire any Common Shares; or (v) purchase or redeem
any Common Shares.
(vi) enter into any contracts or assume any
additional liability
SECTION 4.6 INDEMNIFICATION.
(a) Liquidix and the Liquidix shareholders hereby agrees to indemnify
Anscott, each of the officers, agents and directors and current
shareholders of Anscott as of the Closing Date against any loss,
liability, claim, damage or expense (including, but not limited to, any
and all expense whatsoever reasonably incurred in investigating,
preparing or defending against any litigation, commenced or threatened
or any claim whatsoever), to which it or they may become subject to or
rising out of or based on any inaccuracy appearing in or
misrepresentation made in this Agreement, breach of this Agreement and
a failure to perform the representations and covenants set forth in
this Agreement. The indemnification provided for in this paragraph
shall survive the Closing and consummation of the transactions
contemplated hereby and termination of this Agreement; and
(b) Anscott hereby agrees to indemnify Liquidix, each of the officers,
agents, directors and current shareholders of Liquidix as of the
Closing Date against any loss, liability, claim, damage or expense
(including, but not limited to, any and all expense whatsoever
reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened or any claim whatsoever), to
which it or they may become subject arising out of or based on any
inaccuracy appearing in or misrepresentation made in this Agreement,
breach of this Agreement and a failure to perform the representations
and covenants set forth in this Agreement. The indemnification provided
for in this paragraph shall survive the Closing and consummation of the
transactions contemplated hereby and termination of this Agreement.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF LIQUIDIX
The obligations of Liquidix under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
SECTION 5.1 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by Liquidix in this Agreement were true when made and shall be
true at the Closing Date with the same force and effect as if such
representations and warranties were made at the Closing Date (except for changes
therein permitted by this Agreement), and Liquidix shall have performed or
compiled with all covenants and conditions required by this Agreement to be
performed or complied with by Liquidix prior to or at the Closing. Anscott shall
be furnished with a certificate, signed by a duly authorized officer of Liquidix
and dated the Closing Date, to the foregoing effect.
SECTION 5.2 DIRECTOR AND SHAREHOLDER APPROVAL. The Board of Directors
and Shareholders of Liquidix shall have approved this Agreement and the
transactions contemplated herein.
SECTION 5.3 OFFICER'S CERTIFICATE. Anscott shall have been furnished
with a certificate dated the Closing Date and signed by a duly authorized
officer of Liquidix to the effect that: (a) the representations and warranties
of Liquidix set forth in the Agreement and in all Exhibits, Schedules and other
documents furnished in connection herewith are in all material respects true and
correct as if made on the Effective Date; (b) Liquidix has performed all
covenants, satisfied all conditions, and complied with all other terms and
provisions of this Agreement to be performed, satisfied or complied with by it
as of the Effective Date; (c) since such date and other than as previously
disclosed to Anscott, Liquidix has not entered into any material transaction
other than transactions which are usual and in the ordinary course if its
business; and (d) no litigation, proceeding, investigation or inquiry is pending
or, to the best knowledge of Liquidix, threatened, which might result in an
action to enjoin or prevent the consummation of the transactions contemplated by
this Agreement or, to the extent not disclosed in the Liquidix Schedules, by or
against Liquidix which might result in any material adverse change in any of the
assets, properties, business or operations of Liquidix.
SECTION 5.4 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date,
there shall not have occurred any material adverse change in the financial
condition, business or operations of nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business or operations of Liquidix.
SECTION 5.5 OTHER ITEMS. Anscott shall have received such further
documents, certificates or instruments relating to the transactions contemplated
hereby as Anscott may reasonably request.
SECTION 5.6 TRANSFER OF ASSETS. Immediately prior to the Closing, all
of the assets and liabilities of Liquidix shall be transferred to AFS. In no way
shall this provision affect the assets or liabilities of Anscott either before
or after the Closing. The assets and liabilities of Anscott shall become the
assets and liabilities of Liquidix after the Closing Date. In the event the
transactions contemplated by this Agreement are cancelled or terminated pursuant
to Section 3.4, all of the assets and liabilities of Anscott shall be
transferred back to Anscott as if the transactions contemplated by this
Agreement never occurred.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF ANSCOTT
The obligations of Anscott under this Agreement are subject to the
satisfaction, at or before the Closing date (unless otherwise indicated herein),
of the following conditions:
SECTION 6.1 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by Anscott in this Agreement were true when made and shall be
true as of the Closing Date (except for changes therein permitted by this
Agreement) with the same force and effect as if such representations and
warranties were made at and as of the Closing Date, and Anscott shall have
performed and complied with all covenants and conditions required by this
Agreement to be performed or complied with by Anscott prior to or at the
Closing. Liquidix shall have been furnished with a certificate, signed by a duly
authorized executive officer of Anscott and dated the Closing Date, to the
foregoing effect.
SECTION 6.2 DIRECTOR AND SHAREHOLDER APPROVAL. The Board of Directors
and Shareholders of Anscott shall have approved this Agreement and the
transactions contemplated herein.
SECTION 6.3 OFFICER'S CERTIFICATE. Liquidix shall be furnished with a
certificate dated the Closing date and signed by a duly authorized officer of
Anscott to the effect that: (a) the representations and warranties of Anscott
set forth in the Agreement and in all Exhibits, Schedules and other documents
furnished in connection herewith are in all material respects true and correct
as if made on the Effective Date; and (b) Anscott had performed all covenants,
satisfied all conditions, and complied with all other terms and provisions of
the Agreement to be performed, satisfied or complied with by it as of the
Effective Date.
SECTION 6.4 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date,
there shall not have occurred any material adverse change in the financial
condition, business or operations of nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business or operations of Anscott.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 BROKERS AND FINDERS. Each party hereto hereby represents
and warrants that it is under no obligation, express or implied, to pay certain
finders in connection with the bringing of the parties together in the
negotiation, execution, or consummation of this Agreement. The parties each
agree to indemnify the other against any claim by any third person for any
commission, brokerage or finder's fee or other payment with respect to this
Agreement or the transactions contemplated hereby based on any alleged agreement
or understanding between the indemnifying party and such third person, whether
express or implied from the actions of the indemnifying party.
SECTION 7.2 LAW, FORUM AND JURISDICTION. This Agreement shall be
construed and interpreted in accordance with the laws of the State of Florida,
United States of America.
SECTION 7.3 NOTICES. Any notices or other communications required or
permitted hereunder shall be sufficiently given if personally delivered to it or
sent by registered mail or certified mail, postage prepaid, or by prepaid
telegram addressed as follows:
If to Liquidix : 00000 X. Xxxxx Xxxxx, Xxxxx 0
Xxxxxxxx Xxxxx, Xxxxxxx 00000
If to Anscott: 00 Xxxxxx Xxxxx
Xxxxx, Xxx Xxxxxx 00000
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given as of the date so delivered, mailed or telegraphed.
SECTION 7.4 ATTORNEYS' FEES. In the event that any party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the breaching party or parties shall reimburse the
non-breaching party or parties for all costs, including reasonable attorneys'
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
SECTION 7.5 CONFIDENTIALITY. Each party hereto agrees with the other
party that, unless and until the transactions contemplated by this Agreement
have been consummated, they and their representatives will hold in strict
confidence all data and information obtained with respect to another party or
any subsidiary thereof from any representative, officer, director or employee,
or from any books or records or from personal inspection, of such other party,
and shall not use such data or information or disclose the same to others,
except: (i) to the extent such data is a matter of public knowledge or is
required by law to be published; and (ii) to the extent that such data or
information must be used or disclosed in order to consummate the transactions
contemplated by this Agreement.
SECTION 7.6 SCHEDULES; KNOWLEDGE. Each party is presumed to have full
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement.
SECTION 7.7 THIRD PARTY BENEFICIARIES.This contract is solely between
Liquidix and Anscott and except as specifically provided, no director, officer,
stockholder, employee, agent, independent contractor or any other person or
entity shall be deemed to be a third party beneficiary of this Agreement.
SECTION 7.8 ENTIRE AGREEMENT.This Agreement represents the entire
agreement between the parties relating to the subject matter hereof. This
Agreement alone fully and completely expresses the agreement of the parties
relating to the subject matter hereof. There are no other courses of dealing,
understanding, agreements, representations or warranties, written or oral,
except as set forth herein. This Agreement may not be amended or modified,
except by a written agreement signed by all parties hereto.
SECTION 7.9 SURVIVAL; TERMINATION. The representations, warranties and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for 18 months.
SECTION 7.10 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
SECTION 7.11 AMENDMENT OR WAIVER. Every right and remedy provided
herein shall be cumulative with every other right and remedy, whether conferred
herein, at law, or in equity, and may be enforced concurrently herewith, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may be amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance hereof may be extended by a
writing signed by the party or parties for whose benefit the provision is
intended.
SECTION 7.12 EXPENSES. Each party herein shall bear all of their
respective cost s and expenses incurred in connection with the negotiation of
this Agreement and in the consummation of the transactions provided for herein
and the preparation thereof.
SECTION 7.13 HEADINGS; CONTEXT. The headings of the sections and
paragraphs contained in this Agreement are for convenience of reference only and
do not form a part hereof and in no way modify, interpret or construe the
meaning of this Agreement.
SECTION 7.14 BENEFIT. This Agreement shall be binding upon and shall
inure only to the benefit of the parties hereto, and their permitted assigns
hereunder. This Agreement shall not be assigned by any party without the prior
written consent of the other party.
SECTION 7.15 PUBLIC ANNOUNCEMENTS. Except as may be required by law,
neither party shall make any public announcement or filing with respect to the
transactions provided for herein without the prior consent of the other party
hereto.
SECTION 7.16 SEVERABILITY. In the event that any particular provision
or provisions of this Agreement or the other agreements contained herein shall
for any reason hereafter be determined to be unenforceable, or in violation of
any law, governmental order or regulation, such unenforceability or violation
shall not affect the remaining provisions of such agreements, which shall
continue in full force and effect and be binding upon the respective parties
hereto.
SECTION 7.17 FAILURE OF CONDITIONS; XXXXXXXXXXX.Xx the event of any of
the conditions specified in this Agreement shall not be fulfilled on or before
the Closing Date, either of the parties have the right either to proceed or,
upon prompt written notice to the other, to terminate and rescind this
Agreement. In such event, the party that has failed to fulfill the conditions
specified in this Agreement will liable for the other parties legal fees. The
election to proceed shall not affect the right of such electing party reasonably
to require the other party to continue to use its efforts to fulfill the unmet
conditions.
SECTION 7.18 NO STRICT CONSTRUCTION. The language of this Agreement
shall be construed as a whole, according to its fair meaning and intendment, and
not strictly for or against either party hereto, regardless of who drafted or
was principally responsible for drafting the Agreement or terms or conditions
hereof.
SECTION 7.19 EXECUTION KNOWING AND VOLUNTARY. In executing this
Agreement, the parties severally acknowledge and represent that each: (a) has
fully and carefully read and considered this Agreement; (b) has been or has had
the opportunity to be fully apprized by its attorneys of the legal effect and
meaning of this document and all terms and conditions hereof; (c) is executing
this Agreement voluntarily, free from any influence, coercion or duress of any
kind.
SECTION 7.20 AMENDMENT. At any time after the Closing Date, this
Agreement may be amended by a writing signed by both parties, with respect to
any of the terms contained herein, and any term or condition of this Agreement
may be waived or the time for performance hereof may be extended by a writing
signed by the party or parties for whose benefit the provision is intended.
SECTION 7.21 BINDING EFFECT; ASSIGNMENT. This agreement shall inure to
the benefit of and be binding upon the parties hereto, their respective legal
representatives and successors. This agreement may not be assigned.
SECTION 7.22 FURTHER ASSURANCES, COOPERATION. Each party shall, upon
reasonable request by the other party, execute and deliver any additional
documents necessary or desirable to complete the merger pursuant to and in the
manner contemplated by this agreement. The parties hereto agree to cooperate and
use their respective best efforts to consummate the transactions contemplated by
this agreement. Liquidix shall use its reasonable efforts to have its officers
and directors remain with Liquidix after the closing if requested by Anscott to
the new management of Liquidix for the purposes of complying with the Sarbanes
Oxley Act.
SECTION 7.23 GOVERNING LAW. This Agreement shall be construed (both as
to validity and performance) and enforced in accordance with and governed by the
laws of the State of New York applicable to agreements made and to be performed
wholly within such jurisdiction and without regard to conflicts of laws.
IN WITNESS WHEREOF, the corporate parties hereto have caused this
Agreement to be executed by their respective officers, hereunto duly authorized,
and entered into as of the date first above written.
ATTEST:
LIQUIDIX, INC.
/S/ XXXXXXX XXX By: /S/ XXXXX XXXXXX
------------------------- ----------------------------
Xxxxxxx Xxx Xxxxx Xxxxxx, President
ATTEST: AFS SEALS, INC.
/S/ XXXXX XXXXXX By: /S/ XXXXXXX XXX
------------------------- ----------------------------
Xxxxx Xxxxxx Xxxxxxx Xxx, Vice President
ATTEST: ANSCOTT INDUSTRIES, INC.
/S/ XXXX XXXXXXX /S/ XXXX XXXXXXXXX
------------------------- -------------------------------------
Xxxx Xxxxxxx Xxxx Xxxxxxxxx, President
ANSCOTT INDUSTRIES, INC. SHAREHOLDERS
/S/ XXXX XXXXXXX /S/ XXXX XXXXXXXXX
------------------------- -------------------------------------
Xxxx Xxxxxxx Xxxx Xxxxxxxxx
/S/ XXXXXX X. XXXXXXXX /S/ XXXX XXXXXXXXX, XX.
------------------------- -------------------------------
Xxxxxx X. Xxxxxxxx Xxxx Xxxxxxxxx, Xx.
