EXHIBIT 99.1
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STOCK AND PROMISSORY NOTE PURCHASE AGREEMENT
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THIS STOCK AND PROMISSORY NOTE PURCHASE AGREEMENT (the "AGREEMENT") is
entered into this 23rd day of February, 2004, by and between Xxxx Investments,
LLC, a Florida limited liability company (the "BUYER"), Huntington Chase
Financial Group, LLC ("HUNTINGTON"), Xxxxxx X. Xxxxxxx III ("XXXXXXX"), Xxxxxx
X. Xxxxxxxxxx ("XXXXXXXXXX") and Xxxxx X. Xxxxxx ("XXXXXX"). At times,
Huntington, Withrow, Xxxxxxxxxx and Xxxxxx are collectively referred to as the
"SELLERS".
RECITALS:
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A. Huntington owns 23,000,000 shares of common stock, par value $0.001
(the "SHARES"), of Reward Enterprises, Inc., a Nevada corporation (the
"COMPANY").
X. Xxxxxx is the holder of $81,500 in promissory notes issued by the
Company (collectively the "NOTES").
X. Xxxxxxxxxx and Xxxxxx desire to sell the Shares and the Notes,
respectively, and the Buyer desires to purchase the Shares and the Notes on the
terms and conditions contained within this Agreement.
AGREEMENT:
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NOW, THEREFORE, in consideration of the mutual premises herein set forth
and certain other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
1. PURCHASE OF SHARES AND NOTES
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1.1. PURCHASE OF SHARES AND NOTES. At Closing (as defined below),
subject to the terms, restrictions and conditions of this Agreement, the Buyer
shall purchase, and Huntington shall sell and deliver to the Buyer, the Shares
which represent a total of at least a majority of the Company's authorized and
outstanding capital stock. At Closing (as defined below), subject to the terms,
restrictions and conditions of this Agreement, the Buyer shall purchase, and
Xxxxxx shall sell and deliver to the Buyer, the Notes. All of the Shares and the
Notes shall be free and clear of all liens, claims, pledges, mortgages,
restrictions, obligations, security interests and encumbrances of any kind,
nature and description (collectively, "Encumbrances").
1.2. PURCHASE PRICE AND PAYMENT.
(a) PURCHASE PRICE. The purchase price (the "PURCHASE PRICE") for
the Shares and the Notes to be purchased by the Buyer pursuant to SECTION 1.1
hereof shall be equal to $325,000, which shall be paid as set forth in this
SECTION 1.2 hereof. Huntington acknowledges and represents that the Shares of
the Company to be purchased by the Buyer on the date hereof have been validly
issued, fully paid and non-assessable.
(b) MANNER OF PAYMENT.
(i) The Buyer shall place the Purchase Price in escrow with
Xxxxxxxxxxx & Xxxxxxxx LLP, as escrow agent (the "ESCROW AGENT") on the date of
this Agreement.
(ii) At the Closing (as defined below in SECTION 1.3) the
Escrow Agent shall deliver via wire transfer the Purchase Price to Xxxxxx, who
shall distribute the Purchase Price among Huntington and any other appropriate
party. The wire instructions for Xxxxxx are set forth on EXHIBIT A hereto. None
of the Sellers shall have any recourse or claim against the Escrow Agent or
Buyer relating to the Purchase Price once the Purchase Price has been delivered
to Xxxxxx.
1.3. CLOSING. The parties to this Agreement shall consummate the
transactions contemplated by this Agreement at a closing (the "CLOSING") to be
held no later than February 24, 2004; provided, in no event shall the Closing
occur prior to the satisfaction of the conditions precedent set forth in
SECTIONS 6, 7 AND 8 hereof. The date of Closing is referred to herein as the
"CLOSING DATE." The Closing shall take place at the offices of counsel to the
Buyer, or at such other place as may be mutually agreed upon by the Buyer and
the Sellers. At the Closing, the Escrow Agent shall deliver to the Buyer the
original stock certificate representing the Shares with executed original stock
powers and the original Notes purchased hereby, and the Escrow Agent shall
deliver the Purchase Price in accordance with Section 1.2(b)(ii).
2. ADDITIONAL AGREEMENTS.
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2.1. BOARD MEETING. Prior to the Closing, the Board of Directors of the
Company shall hold a meeting to elect Xxxx Xxxxxxxxxx to the office of President
and vote to expand the size of the Board from two to three members. Prior to the
conduct of any other business at the meeting, all members of the Board shall
appoint Xxxx Xxxxxxxxxx to the position of Director of the Board and then
resign.
2.2. ACCESS AND INSPECTION, ETC. The Sellers shall allow the Buyer and
its authorized representatives full access to the Company during normal business
hours from and after the date hereof and prior to the Closing Date to all of the
properties, books, contracts, commitments and records of the Company for the
purpose of making such investigations as the Buyer may reasonably request in
connection with the transactions contemplated hereby, and shall cause the
Company to furnish Buyer such information concerning its affairs as Buyer may
reasonably request. The Sellers shall cause the Company's personnel to assist
the Buyer in making such investigation and shall use their best efforts to cause
the counsel, accountants, engineers and other non-employee representatives of
the Company to be reasonably available to Buyer for such purposes.
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2.3. CONFIDENTIAL TREATMENT OF INFORMATION. From and after the date
hereof, the parties hereto shall and shall cause their representatives to hold
in confidence this Agreement (including the Schedules hereto), all matters
relating hereto and all data and information obtained with respect to the other
parties or their business, except such data or information as is published or is
a matter of public record, or as compelled by legal process. In the event this
Agreement is terminated pursuant to SECTION 10 hereof, each party shall promptly
return to the other any statements, documents, schedules, exhibits or other
written information obtained from them in connection with this Agreement, and
shall not retain any copies thereof.
2.4. PUBLIC ANNOUNCEMENTS. Until after the Closing Date, the parties
will consult with each other before issuing any press releases or otherwise
making any public statement with respect to this Agreement or any of the
transactions contemplated hereby and no party will issue any such press release
or make any such public statement without the prior written consent of the other
parties, except as may be required by law or by the rules and regulations of any
governmental authority or securities exchange.
2.5. BEST EFFORTS. Subject to the terms and conditions provided in this
Agreement, each of the parties shall use its best efforts in good faith to take
or cause to be taken as promptly as practicable all reasonable actions that are
within its power to cause to be fulfilled those conditions precedent to its
obligations or the obligations of the other parties to consummate the
transactions contemplated by this Agreement that are dependent upon its actions.
2.6. FURTHER ASSURANCES. The parties shall deliver any and all other
instruments or documents required to be delivered pursuant to, or necessary or
proper in order to give effect to, the provisions of this Agreement, including,
without limitation, all necessary stock powers and such other instruments of
transfer as may be necessary or desirable to issue the shares of the Company's
Common Stock and to consummate the transactions contemplated by this Agreement.
3. REPRESENTATIONS, COVENANTS AND WARRANTIES OF THE COMPANY.
To induce Buyer to enter into this Agreement and to consummate the
transactions contemplated hereby, Sellers represent and warrant to and covenant
with the Buyer as follows, provided, however, Xxxxxxxxxx is not providing the
representations and warranties made in Section 3.28:
3.1. ORGANIZATION; COMPLIANCE. The Company is a corporation duly
organized, validly existing and in good standing under the laws of Nevada. The
Company is: (a) entitled to own or lease its properties and to carry on its
business as and in the places where such business is now conducted, and (b) duly
licensed and qualified in all jurisdictions where the character of the property
owned by it or the nature of the business transacted by it makes such license or
qualification necessary, except where the failure to do so would not result in a
material adverse effect on the Company. SCHEDULE 3.1 lists all locations where
the Company has an office or place of business and the nature of the ownership
interest in such property (fee, lease, or other).
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3.2. CAPITALIZATION AND RELATED MATTERS.
(a) The Company has an authorized capital consisting of
200,000,000 shares of Common Stock, no shares of Preferred Stock, of which
45,765,000 shares of Common Stock are issued and outstanding at the date hereof.
All shares of Common Stock are duly and validly issued, fully paid and
nonassessable. No shares of Common Stock (i) were issued in violation of the
preemptive rights of any shareholder, or (ii) are held as treasury stock.
(b) Except for the Notes, there are no outstanding securities
convertible into capital stock of the Company nor any rights to subscribe for or
to purchase, or any options or warrants for the purchase of, or any agreements
providing for the issuance (contingent or otherwise) of, or any calls,
commitments or claims of any character relating to, such capital stock or
securities convertible into such capital stock (collectively, "SECURITIES
RIGHTS"). The Company: (i) is not subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any of its capital
stock; or (ii) has no liability for dividends or other distributions declared or
accrued, but unpaid, with respect to any capital stock.
(c) Attached hereto as SCHEDULE 3.2(C) is a shareholder list (the
"SHAREHOLDER LIST") of a recent date. Each shareholder identified on the
Shareholder List is the record and beneficial owner of the number of shares of
the Company's Common Stock shown opposite his name. The Company is not a party
to any agreement, understanding or arrangement, direct or indirect, relating to
any class or series of the Company's capital stock, including, without
limitation, any voting agreement, restriction on resale, shareholder agreement
or registration rights agreement.
3.3. SUBSIDIARIES AND INVESTMENTS.
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(a) SCHEDULE 3.3 discloses with respect to each Subsidiary (as
defined below) (i) its name, (ii) the jurisdiction of its organization, (iii)
the number of its authorized shares or other equity interests, (iv) the number
of its outstanding shares or other equity interests of each class or series, and
(v) the name of the owner and the number and percentage of outstanding shares or
other equity interests of each class or series of such Subsidiary owned of
record and, if different, owned beneficially by the Company and any other
person. All of the outstanding capital stock and other equity interests of each
of the Subsidiaries is validly issued, fully paid and nonassessable and was
issued in compliance with all applicable federal and state securities or "blue
sky" laws and regulations. There are no Securities Rights relating to any shares
of capital stock, other equity interests or other securities of any of the
Subsidiaries. The Company and the Subsidiaries have good, marketable and
exclusive title to the shares or other equity interests disclosed on SCHEDULE
3.3 as being owned by each of them, free and clear of all Encumbrances. All
rights and powers to vote such shares or other equity interests are held
exclusively by the Company, directly or indirectly through one or more of the
Subsidiaries, as the case may be. Each Subsidiary is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization, and has the corporate power and authority to own
or lease its properties and to carry on its business as now conducted. For the
purposes hereof, a "SUBSIDIARY" means any corporation, limited liability
company, partnership, joint venture or other entity in which the Company owns,
directly or indirectly, more than 20% of the outstanding voting securities or
equity interests.
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(b) Except as disclosed in SCHEDULE 3.3, the Company does not own,
nor has it ever owned, any equity interest in any corporation, limited liability
company, partnership, joint venture or other entity.
3.4. EXECUTION; NO INCONSISTENT AGREEMENTS; ETC.
(a) This Agreement is a valid and binding agreement of the
Sellers, enforceable in accordance with its terms, except as such enforcement
may be limited by bankruptcy or similar laws affecting the enforcement of
creditors' rights generally, and the availability of equitable remedies.
(b) The execution and delivery of this Agreement by the Sellers
does not, and the consummation of the transactions contemplated hereby will not,
constitute a breach or violation of the charter or bylaws of the Company, or a
default under any of the terms, conditions or provisions of (or an act or
omission that would give rise to any right of termination, cancellation or
acceleration under) any note, bond, mortgage, lease, indenture, agreement or
obligation to which the each of the Sellers is a party, pursuant to which any of
the Sellers otherwise receives benefits, or to which any of the properties of
the Company is subject.
3.5. CORPORATE RECORDS. The statutory records, including the stock
register and minute books of the Company, a copy of which is attached as
SCHEDULE 3.5, fully reflect all issuances, transfers and redemptions of its
capital stock, correctly show and will correctly show the total number of shares
of its capital stock issued and outstanding on the date hereof and on the
Closing Date, the charter or other organizational documents and all amendments
thereto, and bylaws as amended and currently in force.
3.6. FINANCIAL STATEMENTS.
(a) The Sellers will deliver to the Buyer by the Closing Date the
consolidated unaudited balance sheet of the Company as of December 31, 2003, the
consolidated unaudited consolidated statement of operations of the Company for
the fiscal year ended December 31, 2003 the Company's unaudited consolidated
statement of cash flows for the fiscal year ended December 31, 2003 and the
Company's unaudited statements of stockholders' equity for the fiscal year ended
December 31, 2003. All the foregoing financial statements, and any financial
statements delivered pursuant to subsection (c) below, are referred to herein
collectively as the "COMPANY FINANCIAL STATEMENTS."
(b) The Company Financial Statements have been and will be
prepared in accordance with GAAP, applied on a consistent basis (except that the
unaudited statements do not contain all the disclosures required by GAAP), and
fairly reflect and will reflect in all material respects the financial condition
of the Company as at the dates thereof and the results of the operations of the
Company for the periods then ended.
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(c) Until Closing, the Sellers will furnish to Buyer consolidated
unaudited interim financial statements of the Company for each month subsequent
to December 31, 2003 as soon as practicable but in any event within thirty (30)
days after the close of any such month.
3.7. LIABILITIES. The Company has no material debt, liability or
obligation of any kind, whether accrued, absolute, contingent or otherwise.
3.8. ABSENCE OF CHANGES. Except as described in SCHEDULE 3.8 and in the
other Schedules to this Agreement, from December 31, 2003 to the date of this
Agreement:
(a) there has not been any adverse change in the business, assets,
liabilities, results of operations or financial condition of the Company or in
its relationships with suppliers, customers, employees, lessors or others other
than changes in the ordinary course of business, none of which, singularly or in
the aggregate, have had or will have a material adverse effect on the business,
properties or financial condition of the Company; and
(b) the Company has complied with the covenants and restrictions
set forth in SECTION 5 to the same extent as if this Agreement had been executed
on, and had been in effect since, December 31, 2003.
3.9. TITLE TO PROPERTIES. The Company has good and marketable title to
all of its properties and assets, real and personal, including, but not limited
to, those reflected in the 2003 Company Balance Sheet (except as since sold or
otherwise disposed of in the ordinary course of business, or as expressly
provided for in this Agreement), free and clear of all Encumbrances of any kind
or character.
3.10. COMPLIANCE WITH LAW. The business and activities of the Company
has at all times been conducted in accordance with its articles of incorporation
and bylaws and any applicable law, regulation, ordinance, order, License
(defined below), permit, rule, injunction or other restriction or ruling of any
court or administrative or governmental agency, ministry, or body, except where
the failure to do so would not result in a material adverse effect on the
Company.
3.11. TAXES. The Company has duly filed all material federal, state,
local and foreign tax returns and reports, and all returns and reports of all
other governmental units having jurisdiction with respect to taxes imposed on it
or on its income, properties, sales, franchises, operations or employee benefit
plans or trusts, all such returns were complete and accurate when filed, and all
taxes and assessments payable by the Company have been paid to the extent that
such taxes have become due. All taxes accrued or payable by the Company for all
periods through December 31, 2003 have been accrued or paid in full, whether or
not due and payable and whether or not disputed. The Company has withheld proper
and accurate amounts from its employees for all periods in full compliance with
the tax withholding provisions of applicable foreign, federal, state and local
tax laws. There are no waivers or agreements by the Company for the extension of
time for the assessment of any taxes. The tax returns of the Company have never
been examined by any authority or other administrative body or court of any
state or country. There are not now any examinations of the income tax returns
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of the Company pending, or any proposed deficiencies or assessments against the
Company of additional taxes of any kind. The Company shall duly and timely
prepare and file all material federal, state, local and foreign tax returns and
reports, and all returns and reports of all other governmental units having
jurisdiction with respect to taxes imposed on the Company or on its income,
properties, sales, franchises, operations or employee benefit plans or trusts,
which become due prior to the Closing Date and all such returns will be complete
and accurate when filed.
3.12. REAL PROPERTIES. The Company does not have an interest in any
real property, except for the Leases (as defined below).
3.13. LEASES OF REAL PROPERTY. All leases pursuant to which the Company
is lessee or lessor of any real property (the "LEASES") are listed in SCHEDULE
3.13 and are valid and enforceable in accordance with their terms. There is not
under any of such leases (a) any material default or any claimed material
default by the Company or any event of default or event which with notice or
lapse of time, or both, would constitute a material default by the Company and
in respect to which the Company has not taken adequate steps to prevent a
default on its part from occurring, or (b) to the knowledge of the Company, any
material default by any lessee of the Company or any event of default or event
which with notice or lapse of time, or both, would constitute a material default
by any lessee. The copies of the Leases heretofore furnished to Buyer are true,
correct and complete, and such Leases have not been modified in any respect
since the date they were so furnished, and are in full force and effect in
accordance with their terms. The Company is lawfully in possession of all real
properties of which they are a lessee (the "LEASED PROPERTIES").
3.14. CONTINGENCIES. There are no actions, suits, claims or proceedings
pending, or to the knowledge of the Company threatened against, by or affecting,
the Company in any court or before any arbitrator or governmental agency that
may have a material adverse effect on the Company or which could materially and
adversely affect the right or ability of the Company to consummate the
transactions contemplated hereby. To the knowledge of the Company, there is no
valid basis upon which any such action, suit, claim, or proceeding may be
commenced or asserted against it. There are no unsatisfied judgments against the
Company and no consent decrees or similar agreements to which the Company is
subject and which could have a material adverse effect on the Company.
3.15. PRODUCTS LIABILITY; WARRANTIES; INSURANCE. The Company will have
not loss, damage, liability, fine, penalty, cost and expense (each, a
"Liability") that is not fully covered by insurance relating to any product
manufactured, distributed or sold by the Company prior to the Closing, whether
or not such Liability is related to products that are defective or improperly
designed or manufactured or are in breach of any express or implied product
warranty. SCHEDULE 3.15 discloses and describes the terms of all express product
warranties under which the Company may have Liability after the Closing Date.
3.16. INTELLECTUAL PROPERTY RIGHTS.
(a) The Company owns and possesses all right, title and interest
in and to, or has a valid license to use, all of the Proprietary Rights (as
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defined below) necessary for the operation of its business as presently
conducted and none of such Proprietary Rights have been abandoned;
(b) no claim by any third party contesting the validity,
enforceability, use or ownership of any such Proprietary Rights has been made,
is currently outstanding or, to the knowledge of the Company, is threatened, and
to the knowledge of the Company there is no reasonable basis for any such claim;
(c) neither the Company nor any registered agent of any of the
foregoing has received any notice of, nor is the Company aware of any reasonable
basis for an allegation of, any infringement or misappropriation by, or conflict
with, any third party with respect to such Proprietary Rights, nor has the
Company, or any registered agent of any of them received any claim of
infringement or misappropriation of or other conflict with any Proprietary
Rights of any third party;
(d) the Company has not infringed, misappropriated or otherwise
violated any Proprietary Rights of any third parties, and the Company is not
aware of any infringement, misappropriation or conflict which will occur as a
result of the continued operation of the Company as presently operated and as
contemplated to be operated or as a result of the consummation of the
transactions contemplated hereby; and
(e) all employees who have contributed to or participated in the
conception and/or development of all or any part of the Proprietary Rights which
are not licensed to the Company from a third party either (i) have been party to
a "work-for-hire" arrangement or agreement with the Company, in accordance with
applicable federal and state law, that has accorded the Company full, effective,
exclusive, and original ownership of all tangible and intangible property
thereby arising, or (ii) have executed appropriate instruments of assignment in
favor of the Company as assignee that have conveyed to the Company full,
effective and exclusive ownership of all tangible and intangible property
thereby arising.
(f) As used herein, the term "PROPRIETARY RIGHTS" means all
proprietary information of the Company, as the case may be, including all
patents, patent applications, patent disclosures and inventions (whether or not
patentable and whether or not reduced to practice), all trademarks, service
marks, trade dress, trade names, corporate names, domain names, copyrights, all
trade secrets, confidential information, ideas, formulae, compositions,
know-how, processes and techniques, drawings, specifications, designs, logos,
plans, improvements, proposals, technical and computer data, documentation and
software, financial, business and marketing plans, and related information and
all other proprietary, industrial or intellectual property rights relating to
the business of the Company, including those proprietary, industrial or
intellectual property rights found at the Company's websites listed on SCHEDULE
3.16.
(g) The consummation of the transactions contemplated by this
Agreement will not adversely affect the right of the Company to continue to use
the Proprietary Rights. To the extent that the registration of any Proprietary
Right is required by law, such Proprietary Right has been duly and validly
registered or filed, and any fees that are necessary to maintain in force any
Proprietary Rights or registrations thereof have been paid. SCHEDULE 3.16 sets
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forth a list and description of the copyrights, trademarks, service marks, trade
dress, trade names and domain names used or held by the Company and, where
appropriate, the date, serial or registration number, and place of any
registration thereof.
3.17. MATERIAL CONTRACTS. SCHEDULE 3.17 contains a complete list of all
contracts of the Company, which involve consideration in excess of the
equivalent of $5,000 or have a term of one year or more (the "MATERIAL
CONTRACTS"). The Sellers will deliver to Buyer by the Closing Date a true,
correct and complete copy of each of the written contracts, and a summary of
each oral contract, listed on SCHEDULE 3.17. The Company has (a) performed all
material obligations to be performed by them under all such contracts, and is
not in material default thereof, and (b) no condition exists or has occurred
which with the giving of notice or the lapse of time, or both, would constitute
a material default by the Company or accelerate the maturity of, or otherwise
modify, any such contract, and (c) all such contracts are in full force and
effect. No material default by any other party to any of such contracts is known
or claimed by the Company to exist.
3.18. INSURANCE. SCHEDULE 3.17 contains a complete list of all policies
of insurance presently maintained by the Company all of which are, and will be
maintained through the Closing Date, in full force and effect; and all premiums
due thereon have been paid and the Company has not received any notice of
cancellation with respect thereto. The Sellers have heretofore delivered to
Buyer or its representatives a true, correct and complete copy of each such
insurance policy.
3.19. EMPLOYMENT AND LABOR MATTERS. SCHEDULE 3.19 sets forth the name,
position, employment date, and 2003 and 2004 compensation (base and bonus) of
each employee of the Company who earned any compensation in 2003 or 2004. The
Company is not a party to any collective bargaining agreement (whether industry
wide or on a company level) or agreement of any kind with any union or labor
organization. There has not been any attempt by any union or other labor
organization to organize the employees of the Company at any time in the past
five (5) years. The Company has no employment agreements or consulting
agreements in effect with any person.
3.20. EMPLOYEE BENEFIT MATTERS.
(a) The Company does not currently provide, nor is it obligated to
provide, directly or indirectly, any benefits for employees.
(b) Each employee benefit plan previously maintained by or on
behalf of the Company or any other party (including any terminated pension
plans) which covers or covered any employees or former employees of the Company
(collectively, the "EMPLOYEE BENEFIT PLAN") is listed in SCHEDULE 3.20. The
Sellers will deliver to Buyer by the Closing Date true and complete copies of
all such plans and any related documents. With respect to each such plan: (a) no
litigation, administrative or other proceeding or claim is pending, or to the
knowledge of any of the Sellers, threatened or anticipated involving such plan;
(b) there are no outstanding requests for information by participants or
beneficiaries of such plan; and (c) such plan has been administered in
compliance in all material respects with all applicable laws and regulations.
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Any prior Employee Benefit Plan, including stock option plans, are no longer in
effect.
(c) The Company has timely made payment in full of all
contributions to all of the Employee Benefit Plans which the Company was
obligated to make prior to the date hereof; and there are no contributions
declared or payable by the Company to any Employee Benefit Plan which, as of the
date hereof, has not been paid in full.
3.21. POSSESSION OF FRANCHISES, LICENSES, ETC. The Company: (a)
possesses all material franchises, certificates, licenses, permits and other
authorizations (collectively, the "LICENSES") from governmental authorities,
political subdivisions or regulatory authorities that are necessary for the
ownership, maintenance and operation of its business in the manner presently
conducted; (b) are not in violation of any provisions thereof; and (c) have
maintained and amended, as necessary, all Licenses and duly completed all
filings and notifications in connection therewith.
3.22. ENVIRONMENTAL MATTERS. Since the date of its incorporation, (i)
the Company is not and has not been in violation, in any material respect, of
any Environmental Law (as defined below); (ii) the Company has received all
permits and approvals with respect to emissions into the environment and the
proper collection, storage, transport, distribution or disposal of Wastes (as
defined below) and other materials required for the operation of its business at
present operating levels; and (iii) the Company is not liable or responsible for
any material clean up, fines, liability or expense arising under any
Environmental Law, as a result of the disposal of Wastes or other materials in
or on the property of the Company (whether owned or leased), or in or on any
other property, including property no longer owned, leased or used by the
Company. As used herein, (a) "ENVIRONMENTAL LAWS" means, collectively, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, the Superfund Amendments and Reauthorization Act of 1986, the Resource
Conservation and Recovery Act, the Toxic Substances Control Act, as amended, the
Clean Air Act, as amended, the Clean Water Act, as amended, any other
"Superfund" or "Superlien" law or any other federal, or applicable state or
local statute, law, ordinance, code, rule, regulation, order or decree (foreign
or domestic) regulating, relating to, or imposing liability or standards of
conduct concerning, Wastes, or the environment; and (b) "WASTES" means and
includes any hazardous, toxic or dangerous waste, liquid, substance or material
(including petroleum products and derivatives), the generation, handling,
storage, disposal, treatment or emission of which is subject to any
Environmental Law.
3.23. AGREEMENTS AND TRANSACTIONS WITH RELATED PARTIES. Except as
disclosed on SCHEDULE 3.23, the Company is not, and since the date of its
incorporation, has not been, a party to any contract, agreement, lease or
transaction with, or any other commitment to, (a) a shareholder, (b) any person
related by blood, adoption or marriage to shareholder, (c) any director or
officer of the Company, (d) any corporation or other entity in which any of the
foregoing parties has, directly or indirectly, at least five percent (5.0%)
beneficial interest in the capital stock or other type of equity interest in
such corporation or other entity, or (e) any partnership in which any such party
is a general partner or a limited partner having a five percent (5%) or more
interest therein (any or all of the foregoing being herein referred to as a
"RELATED PARTY" and collectively as the "RELATED PARTIES"). Without limiting the
generality of the foregoing, no Related Party, directly or indirectly, owns or
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controls any assets or properties which are or have since the date of the
Company's incorporation been used in the business of the Company.
3.24. BUSINESS PRACTICES. The Company has not, at any time, directly or
indirectly, made any contributions or payment, or provided any compensation or
benefit of any kind, to any municipal, county, state, federal or foreign
governmental officer or official, or any other person charged with similar
public or quasi-public duties, or any candidate for political office. The
Company's books, accounts and records (including, without limitation, customer
files, product packaging and invoices) accurately describe and reflect, in all
material respects, the nature and amount of the Company's products, purchases,
sales and other transactions. Without limiting the generality of the foregoing,
the Company has not engaged, directly or indirectly, in: (a) the practice known
as "double-invoicing" or the use or issuance of pro-forma or dummy invoices; or
(b) the incorrect or misleading labeling, marketing or sale of refurbished goods
as new goods.
3.25. REPORTS. The Company has filed all required forms, reports and
documents with the SEC for the three years ended December 31, 2003 and required
to be filed prior to the Closing Date, including a Schedule 14f-1 which was
mailed to all shareholders of record on February 13, 2004, (the "SEC REPORTS"),
all of which, when filed, complied in all material respects with all applicable
requirements of the Securities Exchange Act of 1934, as amended, and the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder. The Company is a reporting company under Section 12(g)
of the Securities Act of 1933. None of the SEC Reports, when made, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading.
Each of the balance sheets (including related notes) included in the SEC Reports
fairly presents the consolidated financial position of the Company and the
Company's Subsidiaries as of the respective dates thereof, and the other related
statements (including the related notes) included therein fairly present the
consolidated results of operations and the changes in consolidated financial
position of the Company and the Company's Subsidiaries for the respective
periods indicated therein, except, in the case of interim financial statements,
for the year-end audit adjustments, consisting only of a normal recurring
accruals which individually and in the aggregate are not material. Each of the
financial statements (including the related notes) included in the SEC Reports
has been prepared in accordance with generally accepted accounting principles
consistently applied during the periods involved, except as otherwise noted
therein.
3.26. SHAREHOLDER MATTERS. None of the matters set forth in this
Agreement require the approval of the Company's shareholders, including, without
limitation, the election of the Buyer's directors.
3.27. FULL DISCLOSURE. No representation or warranty of the Company
contained in this Agreement, and none of the statements or information
concerning the Company contained in this Agreement and the Schedules, contains
or will contain any untrue statement of a material fact nor will such
representations, warranties, covenants or statements taken as a whole omit a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
11
3.28. ORGANIZATION OF HUNTINGTON. Huntington is a limited liability
company duly organized, validly existing and in good standing under the laws of
Nevada. The Company is: (a) entitled to own or lease its properties, including
the Shares and to carry on its business as and in the places where such business
is now conducted, and (b) duly licensed and qualified in all jurisdictions where
the character of the property owned by it or the nature of the business
transacted by it makes such license or qualification necessary, except where the
failure to do so would not result in a material adverse effect on the Company.
The Company has been duly authorized to sell the Shares pursuant to this
Agreement.
4. REPRESENTATIONS AND WARRANTIES OF BUYER.
----------------------------------------
To induce the Sellers to enter into this Agreement and to consummate the
transactions contemplated hereby, the Buyer represents and warrants to and
covenants with the Buyer as follows:
4.1. ORGANIZATION. Buyer is a limited liability company duly organized,
validly existing and in good standing under the laws of Florida. The Buyer has
all requisite power and authority to execute, deliver and carry out the terms of
this Agreement and the consummation of the transactions contemplated herein.
4.2. EXECUTION; NO INCONSISTENT AGREEMENTS; ETC.
(a) The execution and delivery of this Agreement and the
performance of the transactions contemplated hereby have been duly and validly
authorized and approved by Buyer and this Agreement is a valid and binding
agreement of Buyer, enforceable against Buyer in accordance with its terms,
except as such enforcement may be limited by bankruptcy or similar laws
affecting the enforcement of creditors' rights generally, and the availability
of equitable remedies.
(b) The execution and delivery of this Agreement by Buyer does
not, and the consummation of the transactions contemplated hereby will not,
constitute a breach or violation of the articles of organization or operating
agreements of Buyer, or a default under any of the terms, conditions or
provisions of (or an act or omission that would give rise to any right of
termination, cancellation or acceleration under) any material note, bond,
mortgage, lease, indenture, agreement or obligation to which Buyer is a party,
pursuant to which any of them otherwise receive benefits, or by which any of
their properties may be bound.
4.3. SECURITIES LAWS.
(a) The Buyer is purchasing the Shares and the Notes for
investment purposes and not with a view to the sale or distribution, by public
or private sale or other disposition, and the Buyer has no present intention of
selling, granting any participation in or otherwise distributing or disposing of
any of the Shares or the Notes.
(b) The Buyer is an "accredited investor," as such term is defined
in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as
amended (the "SECURITIES ACT").
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(c) The Buyer is a sophisticated investor familiar with the type
of risks inherent in the acquisition of securities such as the Shares and the
Notes of the Company and the Buyer's financial position is such that the Buyer
can afford to retain the Shares for an indefinite period of time without
realizing any direct or indirect cash return on its investment.
5. CONDUCT OF BUSINESS OF THE COMPANY PENDING CLOSING.
---------------------------------------------------
The Sellers covenant and agree that between the date hereof and the
Closing Date the Company shall:
5.1. BUSINESS IN THE ORDINARY COURSE. The business of the Company shall
be conducted only in the ordinary course, and consistent with past practice.
Without limiting the generality of the foregoing, or as otherwise approved by
Buyer:
(a) the Company shall not enter into any contract, agreement or
other arrangement which would constitute a Material Contract, except for
contracts to sell or supply goods or services to customers in the ordinary
course of business at prices and on terms substantially consistent with the
prior operating practices of the Company;
(b) the Company shall not sell, assign, transfer, mortgage,
convey, encumber or otherwise dispose of, or cause the sale, assignment,
transfer, mortgage, conveyance, encumbrance or other disposition of any of the
assets or properties of the Company or any interest therein;
(c) the Company shall not acquire any material assets;
(d) the Company shall maintain in full force and effect all
insurance policies referred to in SECTION 3.18 hereof or other insurance
equivalent thereto;
(e) the books, records and accounts of the Company shall be
maintained in the usual, regular and ordinary course of business on a basis
consistent with prior practices and in accordance with GAAP;
(f) the Company shall use its best efforts to preserve its
business organization;
(g) except as it may terminate in accordance with the terms of
this Agreement, the Company shall keep in full force and effect, and not cause a
default of any of its obligations under, each of their contracts and
commitments;
(h) the Company shall duly comply in all material respects with
all laws applicable to it and to the conduct of its business;
(i) the Company shall not create, incur or assume any liability or
indebtedness;
13
(j) the Company shall not make or commit to make any capital
expenditures in excess of one thousand dollars ($1,000) in the aggregate;
(k) the Company shall not apply any of its assets to the direct or
indirect payment, discharge, satisfaction or reduction of any amount payable
directly or indirectly to or for the benefit of any shareholder or any Related
Party; and
(l) the Company shall not take or omit to take any action which
would render any of the representations or warranties untrue or misleading, or
which would be a breach of any of the covenants.
5.2. NO MATERIAL CHANGES. Except as contemplated in this Agreement, the
Company shall not materially alter its organization, capitalization, or
financial structure, practices or operations. Without limiting the generality of
the foregoing:
(a) no change shall be made in the articles of incorporation or
bylaws of the Company;
(b) no change shall be made in the authorized or issued capital
stock of the Company;
(c) the Company shall not issue or grant shares of the Company or
any right or option to purchase or otherwise acquire any of its capital stock or
other securities; and
(d) no dividend or other distribution or payment shall be declared
or made with respect to any of the capital stock of the Company.
5.3. COMPENSATION. No compensation shall be paid or become payable to
any director, officer, employee or agent of the Company, and no bonus or
profit-share payment or other arrangement (whether current or deferred) shall be
made to or with any such director, officer, employee or agent.
5.4. NOTIFICATION. Each party to this Agreement shall promptly notify
the other parties in writing of the occurrence, or threatened occurrence, of any
event that would constitute a breach or violation of this Agreement by any party
or that would cause any representation or warranty made by the notifying party
in this Agreement to be false or misleading in any respect. The Sellers will
promptly notify the Buyer of any event that could have a material adverse effect
on the business, assets, financial condition or prospects of the Company. The
Sellers shall have the right to update the Schedules to this Agreement
immediately prior to Closing; provided, if such update discloses any breach of a
representation, warranty, covenant or obligation of the Sellers, the Buyer shall
have the right to then exercise its available rights and remedies hereunder.
6. CONDITIONS TO OBLIGATIONS OF ALL PARTIES.
-----------------------------------------
The obligation of Buyer and the Sellers to consummate the transactions
contemplated by this Agreement are subject to the satisfaction, on or before the
14
Closing, of each of the following conditions; any or all of which may be waived
in whole or in part by the joint agreement of Buyer and the Sellers:
6.1. ABSENCE OF ACTIONS. No action or proceeding shall have been
brought or threatened before any court or administrative agency to prevent the
consummation or to seek damages in any amount by reason of the transactions
contemplated hereby, and no governmental authority shall have asserted that the
within transactions (or any other pending transaction involving Buyer or the
Sellers or the Company when considered in light of the effect of the within
transactions) shall constitute a violation of law or give rise to material
liability on the part of the Sellers, the Company or the Buyer.
6.2. CONSENTS. The parties shall have received from any suppliers,
lessors, lenders, lien holders or governmental authorities, bodies or agencies
having jurisdiction over the transactions contemplated by this Agreement, or any
part hereof, such consents, authorizations and approvals as are necessary for
the consummation hereof, including, without limitation, the consents listed on
SCHEDULE 6.2.
7. CONDITIONS TO OBLIGATIONS OF THE BUYER.
---------------------------------------
All obligations of the Buyer to consummate the transactions contemplated
by this Agreement are subject to the fulfillment and satisfaction of each and
every of the following conditions on or prior to the Closing, any or all of
which may be waived in whole or in part by Buyer:
7.1. REPRESENTATIONS AND WARRANTIES. The representations and warranties
contained in SECTION 3 of this Agreement and in any certificate, instrument,
schedule, agreement or other writing delivered by or on behalf of the Sellers in
connection with the transactions contemplated by this Agreement shall be true,
correct and complete in all material respects (except for representations and
warranties which are by their terms qualified by materiality, which shall be
true, correct and complete in all respects) as of the date when made and shall
be deemed to be made again at and as of the Closing Date and shall be true,
correct and complete at and as of such time in all material respects (except for
representations and warranties which are by their terms qualified by
materiality, which shall be true, correct and complete in all respects).
7.2. COMPLIANCE WITH AGREEMENTS AND CONDITIONS. The Sellers shall have
performed and complied with all material agreements and conditions required by
this Agreement to be performed or complied with by it prior to or on the Closing
Date.
7.3. ABSENCE OF MATERIAL ADVERSE CHANGES. No material adverse change in
the business, assets, financial condition, or prospects of the Company shall
have occurred, no substantial part of the assets of the Company not
substantially covered by insurance shall have been destroyed due to fire or
other casualty, and no event shall have occurred which has had or will have a
material adverse effect on the business, assets, financial condition or
prospects of the Company.
7.4. BOARD APPROVAL. The Company's Board of Directors shall have taken
the action required by them pursuant to SECTION 2.1 hereof.
15
7.5. SHARES AND NOTES. Nothing shall have occurred to effect the
Sellers unencumbered ownership of the Shares and the Notes, respectively.
7.6. EMPLOYMENT MATTERS.
(a) All officers and directors of the Company shall have resigned
from their positions with the Company and shall deliver to the Buyer by the
Closing Date a general release in the form attached hereto as EXHIBIT B.
Further, Sellers, through execution of this Agreement, shall release the Company
from any claims, including claims relating to their employment (including,
without limitation, any claims for past or future compensation, performance
bonus or other compensation).
(b) All employees of the Company and each Subsidiary shall have
resigned from the Company.
7.7. CORPORATE DOCUMENTS. The Sellers shall have delivered to the Buyer
the articles of incorporation of the Company and each Subsidiary certified by an
appropriate official of its respective jurisdiction of incorporation as being in
effect as of a recent date, the bylaws of the Company and each Subsidiary
certified by an appropriate officer as in effect at the Closing, the minute
books and corporate records of the Company and each Subsidiary and the stock
ledger of the Company and each Subsidiary.
7.8. OTHER DOCUMENTS. The Sellers shall have delivered to the Buyer
such other documents and instruments as the Buyer deems reasonably necessary or
desirable to consummate the transactions contemplated hereby.
7.9. CERTIFICATE OF THE COMPANY. The Sellers shall have executed and
delivered, or caused to be executed and delivered, to the Buyer one or more
certificates, dated the Closing Date, certifying in such detail as the Buyer may
reasonably request to the fulfillment and satisfaction of the conditions
specified in SECTIONS 7.1 THROUGH 7.8 above.
All documents delivered to the Buyer shall be in form and substance
reasonably satisfactory to the Buyer.
8. CONDITIONS TO OBLIGATIONS OF THE COMPANY.
-----------------------------------------
All of the obligations of the Sellers to consummate the transactions
contemplated by this Agreement are subject to the fulfillment and satisfaction
of each and every of the following conditions on or prior to the Closing, any or
all of which may be waived in whole or in part by the Sellers:
8.1. REPRESENTATIONS AND WARRANTIES. The representations and warranties
contained in SECTION 4 of this Agreement and in any certificate, instrument,
schedule, agreement or other writing delivered by or on behalf of Buyer in
connection with the transactions contemplated by this Agreement shall be true
and correct in all material respects (except for representations and warranties
which are by their terms qualified by materiality, which shall be true, correct
and complete in all respects) when made and shall be deemed to be made again at
and as of the Closing Date and shall be true at and as of such time in all
material respects (except for representations and warranties which are by their
16
terms qualified by materiality, which shall be true, correct and complete in all
respects).
8.2. COMPLIANCE WITH AGREEMENTS AND CONDITIONS. Buyer shall have
performed and complied with all material agreements and conditions required by
this Agreement to be performed or complied with by Buyer prior to or on the
Closing Date.
8.3. CERTIFICATE OF BUYER. The Buyer shall have delivered to the
Company a certificate, executed by an executive officer and dated the Closing
Date, certifying in such detail as counsel for the Company may reasonably
request to the fulfillment and satisfaction of the conditions specified in
SECTIONS 8.1 THROUGH 8.2 above.
9. INDEMNITY.
----------
9.1. INDEMNIFICATION BY THE SELLERS. The Sellers, jointly and
severally, shall defend, indemnify and hold harmless the Buyer, its direct and
indirect parent corporations, subsidiaries and affiliates, their officers,
members, directors, employees and agents (hereinafter collectively called "BUYER
INDEMNITEES") against and in respect of any and all loss, damage, liability,
fine, penalty, cost and expense, including reasonable attorneys' fees and
amounts paid in settlement (collectively, "BUYER LOSSES"), suffered or incurred
by any Buyer Indemnitee by reason of, or arising out of:
(a) any misrepresentation, breach of warranty or breach or
nonfulfillment of any covenant, obligation or agreement of the Sellers contained
in this Agreement or in any certificate, schedule, instrument or document
delivered to Buyer by or on behalf of the Sellers pursuant to the provisions of
this Agreement (without regard to materiality thresholds contained therein); and
(b) any liabilities of the Company of any nature whatsoever
(including tax liability, penalties and interest), whether accrued, absolute,
contingent or otherwise, (i) existing as of the date of the 2003 Company Balance
Sheet, and required to be shown therein in accordance with GAAP, to the extent
not reflected or reserved against in full in the 2003 Company Balance Sheet; or
(ii) arising or occurring between December 31, 2003 and the Closing Date.
9.2. INDEMNIFICATION BY BUYER. The Buyer shall defend, indemnify and
hold harmless the Sellers against and in respect of any and all loss, damage,
liability, cost and expense, including reasonable attorneys' fees and amounts
paid in settlement (collectively, "SELLERS LOSSES"), suffered or incurred by
Sellers by reason of or arising out of:
(a) any misrepresentation, breach of warranty or breach or
non-fulfillment of any material covenant, obligation or agreement of Buyer
contained in this Agreement or in any other certificate, schedule, instrument or
document delivered to the Sellers by or on behalf of Buyer pursuant to the
provisions of this Agreement (without regard to materiality thresholds contained
therein); and
(b) any liabilities of the Sellers of any nature whatsoever
(including tax liability, penalties and interest), whether accrued, absolute,
contingent or otherwise, arising from the Buyer's ownership or operation of the
17
Company after Closing, but only so long as such liability is not the result of
an act or omission of the Company occurring prior to Closing. Buyer Losses and
Sellers Losses are sometimes collectively referred to as "INDEMNIFIABLE Losses."
9.3. DEFENSE OF CLAIMS.
------------------
(a) Each party seeking indemnification hereunder (an
"INDEMNITEE"): (i) shall provide the other party or parties (the "INDEMNITOR")
written notice of any claim or action by a third party arising after the Closing
Date for which an Indemnitor may be liable under the terms of this Agreement,
within ten (10) days after such claim or action arises and is known to
Indemnitee, and (ii) shall give the Indemnitor a reasonable opportunity to
participate in any proceedings and to settle or defend any such claim or action.
The expenses of all proceedings, contests or lawsuits with respect to such
claims or actions shall be borne by the Indemnitor. If the Indemnitor wishes to
assume the defense of such claim or action, the Indemnitor shall give written
notice to the Indemnitee within ten (10) days after notice from the Indemnitee
of such claim or action, and the Indemnitor shall thereafter assume the defense
of any such claim or liability, through counsel reasonably satisfactory to the
Indemnitee, provided that Indemnitee may participate in such defense at their
own expense, and the Indemnitor shall, in any event, have the right to control
the defense of the claim or action. The failure of an Indemnitee to give any
notice required by this Section shall not affect any of such party's rights
under this Section or otherwise, except and to the extent that such failure is
actually prejudicial to the rights or obligations of the Indemnitor.
(b) If the Indemnitor shall not assume the defense of, or if after
so assuming it shall fail to defend, any such claim or action, the Indemnitee
may defend against any such claim or action in such manner as they may deem
appropriate and the Indemnitees may settle such claim or litigation on such
terms as they may deem appropriate but subject to the Indemnitor's approval,
such approval not to be unreasonably withheld; provided, however, that any such
settlement shall be deemed approved by the Indemnitor if the Indemnitor fails to
object thereto, by written notice to the Indemnitee, within fifteen (15) days
after the Indemnitor's receipt of a written summary of such settlement. The
Indemnitor shall promptly reimburse the Indemnitee for the amount of all
expenses, legal and otherwise, incurred by the Indemnitee in connection with the
defense and settlement of such claim or action.
(c) If a non-appealable judgment is rendered against any
Indemnitee in any action covered by the indemnification hereunder, or any lien
attaches to any of the assets of any of the Indemnitee, the Indemnitor shall
immediately upon such entry or attachment pay such judgment in full or discharge
such lien unless, at the expense and direction of the Indemnitor, an appeal is
taken under which the execution of the judgment or satisfaction of the lien is
stayed. If and when a final judgment is rendered in any such action, the
Indemnitor shall forthwith pay such judgment or discharge such lien before any
Indemnitee is compelled to do so.
18
9.4. WAIVER. The failure of any Indemnitee to give any notice or to
take any action hereunder shall not be deemed a waiver of any of the rights of
such Indemnitee hereunder, except to the extent that Indemnitor is actually
prejudiced by such failure.
10. TERMINATION.
------------
10.1. TERMINATION. This Agreement may be terminated at any time on or
prior to the Closing:
(a) By mutual consent of Buyer and the Sellers; or
(b) At the election of Buyer if: (i) the Sellers have breached or
failed to perform or comply with any of their representations, warranties,
covenants or obligations under this Agreement; or (ii) any of the conditions
precedent set forth in SECTION 6 OR 7 is not satisfied as and when required by
this Agreement; or (iii) the Closing has not been consummated by January 30,
2003; or
(c) At the election of the Sellers only if Buyer has received the
return of all funds forwarded to the Escrow Agent and if: (i) Buyer has breached
or failed to perform or comply with any of its representations, warranties,
covenants or obligations under this Agreement; or (ii) any of the conditions
precedent set forth in SECTION 6 OR 8 is not satisfied as and when required by
this Agreement; or (iii) if the Closing has not been consummated by January 30,
2004.
10.2. MANNER AND EFFECT OF TERMINATION. Written notice of any
termination ("TERMINATION NOTICE") pursuant to this SECTION 10 shall be given by
the party electing termination of this Agreement ("TERMINATING PARTY") to the
other party or parties (collectively, the "TERMINATED PARTY"), and such notice
shall state the reason for termination. The party or parties receiving
Termination Notice shall have a period of ten (10) days after receipt of
Termination Notice to cure the matters giving rise to such termination to the
reasonable satisfaction of the Terminating Party. If the matters giving rise to
termination are not cured as required hereby, this Agreement shall be terminated
effective as of the close of business on the tenth (10th) day following the
Terminated Party's receipt of Termination Notice. Upon termination of this
Agreement prior to the consummation of the Closing and in accordance with the
terms hereof, this Agreement shall become void and of no effect, and none of the
parties shall have any liability to the others, except that nothing contained
herein shall relieve any party from: (a) its obligations under SECTIONS 2.3 AND
2.4; (b) liability for its intentional breach of any representation, warranty or
covenant contained herein, or its intentional failure to comply with the terms
and conditions of this Agreement or to perform its obligations hereunder, or (c)
the return of all funds received by the Escrow Agent to Buyer.
11. MISCELLANEOUS.
-------------
11.1. NOTICES.
(a) All notices, requests, demands, or other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given upon receipt if delivered in person, or upon the expiration of
19
two (2) days after the date sent, if sent by federal express (or similar
overnight courier service) to the parties at the following addresses:
(i) If to Buyer: Xxxx Investments, LLC
0000 Xxxx Xxxxxx Xxxxx 000 Xxxxxxxx,
Xxxxxxx 00000
With a copy to: Xxxxxx X. Xxxxxxx, Esq.
Xxxxxxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxxxx Xxxx.
Xxxxx 0000, Xxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
(ii) If to the Sellers: Xxx Xxxxxx, Esq.
00 Xxxx Xxxxxxxx Xxxxx 000, Bank Xxx
Xxxxx Xxxx Xxxx Xxxx, Xxxx 00000-0000
(b) Notices may also be given in any other manner permitted by
law, effective upon actual receipt. Any party may change the address to which
notices, requests, demands or other communications to such party shall be
delivered or mailed by giving notice thereof to the other parties hereto in the
manner provided herein.
11.2. SURVIVAL. The representations, warranties, agreements and
indemnifications of the parties contained in this Agreement or in any writing
delivered pursuant to the provisions of this Agreement shall survive any
investigation heretofore or hereafter made by the parties and the consummation
of the transactions contemplated herein and shall continue in full force and
effect after the Closing.
11.3. COUNTERPARTS; INTERPRETATION. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an original, and all
of which shall constitute one and the same instrument. This Agreement supersedes
all prior discussions and agreements between the parties with respect to the
subject matter hereof, and this Agreement contains the sole and entire agreement
among the parties with respect to the matters covered hereby. All Schedules
hereto shall be deemed a part of this Agreement. This Agreement shall not be
altered or amended except by an instrument in writing signed by or on behalf of
all of the parties hereto. No ambiguity in any provision hereof shall be
construed against a party by reason of the fact it was drafted by such party or
its counsel. For purposes of this Agreement: "herein", "hereby", "hereunder",
"herewith", "hereafter" and "hereinafter" refer to this Agreement in its
entirety, and not to any particular subsection or paragraph. References to
"including" means including without limiting the generality of any description
preceding such term. Nothing expressed or implied in this Agreement is intended,
or shall be construed, to confer upon or give any person other than the parties
hereto any rights or remedies under or by reason of this Agreement.
20
11.4. GOVERNING LAW. The validity and effect of this Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of Florida, without regard to principles of conflicts of laws thereof. Any
dispute, controversy or question of interpretation arising under, out of, in
connection with or in relation to this Agreement or any amendments hereof, or
any breach or default hereunder, shall be litigated in the state or federal
courts in Dade County, Florida, U.S.A. Each of the parties hereby irrevocably
submits to the jurisdiction of any state or federal court sitting in Dade
County, Florida. Each party hereby irrevocably waives, to the fullest extent it
may effectively do so, the defense of an inconvenient forum to the maintenance
of any such action in Dade County, Florida.
11.5. SUCCESSORS AND ASSIGNS; ASSIGNMENT. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, executors, legal representatives, and successors; provided,
however, that the Sellers may not assign this Agreement or any rights hereunder,
in whole or in part.
11.6. PARTIAL INVALIDITY AND SEVERABILITY. All rights and restrictions
contained herein may be exercised and shall be applicable and binding only to
the extent that they do not violate any applicable laws and are intended to be
limited to the extent necessary to render this Agreement legal, valid and
enforceable. If any terms of this Agreement not essential to the commercial
purpose of this Agreement shall be held to be illegal, invalid or unenforceable
by a court of competent jurisdiction, it is the intention of the parties that
the remaining terms hereof shall constitute their agreement with respect to the
subject matter hereof and all such remaining terms shall remain in full force
and effect. To the extent legally permissible, any illegal, invalid or
unenforceable provision of this Agreement not essential to the commercial
purpose of this Agreement shall be replaced by a valid provision which will
implement the commercial purpose of the illegal, invalid or unenforceable
provision.
11.7. WAIVER. Any term or condition of this Agreement may be waived at
any time by the party which is entitled to the benefit thereof, but only if such
waiver is evidenced by a writing signed by such party. No failure on the part of
a party hereto to exercise, and no delay in exercising, any right, power or
remedy created hereunder, shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or remedy by any such party
preclude any other future exercise thereof or the exercise of any other right,
power or remedy. No waiver by any party hereto to any breach of or default in
any term or condition of this Agreement shall constitute a waiver of or assent
to any succeeding breach of or default in the same or any other term or
condition hereof.
11.8. HEADINGS. The headings as to contents of particular paragraphs of
this Agreement are inserted for convenience only and shall not be construed as a
part of this Agreement or as a limitation on the scope of any terms or
provisions of this Agreement.
11.9. EXPENSES. Except as otherwise expressly provided herein, all
legal and other costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the Buyer or the
Sellers as each incurs such expenses.
21
11.10. FINDER'S FEES. The Buyer represents to the Sellers that no
broker, agent, finder or other party has been retained by it in connection with
the transactions contemplated hereby and that no other fee or commission has
been agreed by the Buyer to be paid for or on account of the transactions
contemplated hereby. The Sellers represent to the Buyer that a broker, agent,
finder or other party may have been retained by the Sellers in connection with
the transactions contemplated hereby and that any fee or commission that has
been agreed to by the Sellers or the Company to be paid for or on account of the
transactions contemplated hereby shall be paid by the Sellers, with no recourse
to the Company or the Buyer.
11.11. GENDER. Where the context requires, the use of the singular form
herein shall include the plural, the use of the plural shall include the
singular, and the use of any gender shall include any and all genders.
11.12. CURRENCY. All foreign currency amounts required to be converted
to U.S. Dollars for purposes of this Agreement shall be converted in accordance
with GAAP.
11.13. ACCEPTANCE BY FAX. This Agreement shall be accepted, effective
and binding, for all purposes, when the parties shall have signed and
transmitted to each other, by telecopier or otherwise, copies of the signature
pages hereto.
11.14. ATTORNEYS FEES. If any legal action or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach, default or misrepresentation in connection with any provision of this
Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees, court costs and all expenses (including, without limitation,
all such fees, costs and expenses incident to appellate, bankruptcy,
post-judgment and alternative dispute resolution proceedings), incurred in that
action or proceeding, in addition to any other relief to which such party may be
entitled.
11.15. NO JURY TRIAL. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT AND ANY DOCUMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION
HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PARTIES' ACCEPTANCE OF THIS AGREEMENT.
22
IN WITNESS WHEREOF, the parties have executed this Stock and Note Purchase
Agreement or caused this Stock and Note Purchase Agreement to be duly executed
by their duly authorized officers as of the day and year first above written.
SELLERS: BUYER:
HUNTINGTON CHASE FINANCIAL GROUP, LLC XXXX INVESTMENTS, LLC
By: /s/ Xxxxxx X. Xxxxxxxx, III By: /s/ Xxxx Xxxxxxxxxx
-------------------------------- --------------------------------
Its: Manager Its: Manager
------------------------------- --------------------------------
/s/ Xxxxxx X. Xxxxxxxx, XX
------------------------------------
Xxxxxx X. Xxxxxxx, III
/s/ Xxxxxx X. Xxxxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxxxx
/s/ Xxxxx X. Xxxxxx
------------------------------------
Xxxxx X. Xxxxxx
23
OFFICES
SCHEDULE 3.1
------------
0000 Xxxxx Xxxxxx, Xxxxx X
Xxxxx Xxxxxx, XX 00000
1
SHAREHOLDER LIST
SCHEDULE 3.2(C)
---------------
Attached.
2
SUBSIDIARIES & INVESTMENTS
SCHEDULE 3.3
------------
None.
3
CORPORATE RECORDS
SCHEDULE 3.5
------------
Public filings provided.
4
ABSENCE OF CHANGES
SCHEDULE 3.8
------------
None.
5
LEASES OF REAL PROPERTY
SCHEDULE 3.13
-------------
None.
6
PRODUCTS LIABILITY; WARRANTIES; INSURANCE
SCHEDULE 3.15
-------------
None.
7
INTELLECTUAL PROPERTY RIGHTS
SCHEDULE 3.16
-------------
None.
8
MATERIAL CONTRACTS
SCHEDULE 3.17
-------------
None.
9
EMPLOYMENT & LABOR MATTERS
SCHEDULE 3.19
-------------
None.
10
EMPLOYEE BENEFIT MATTERS
SCHEDULE 3.20
-------------
None.
11
AGREEMENTS & TRANSACTIONS WITH
RELATED PARTIES
SCHEDULE 3.23
-------------
None.
12
CONSENTS
SCHEDULE 6.2
------------
None.
13
EXHIBIT A
WIRE INSTRUCTIONS
-----------------
Xxxxx X. Xxxxxx
Attorney Trust Account
Bank One Utah, NA
Broadway/West Temple Branch
00 Xxxx Xxxxxxxx
Xxxx Xxxx Xxxx, XX 00000
Account No. 912651273
ABA Routing No. 000000000
14
EXHIBIT B
GENERAL RELEASE
KNOW ALL MEN BY THESE PRESENTS:
THAT XXX XXXXXX, FIRST PARTY, FOR AND IN CONSIDERATION OF THE SUM OF TEN AND
NO/100 ($10.00) DOLLARS, OR OTHER VALUABLE CONSIDERATIONS, RECEIVED FROM OR ON
BEHALF OF XXXX INVESTMENTS, LLC AND REWARD ENTERPRISES, INC., COLLECTIVELY
SECOND PARTY, THE RECEIPT WHEREOF IS HEREBY ACKNOWLEDGED,
(Wherever used herein the terms "first party" and "second party" shall
include singular and plural, heirs, legal representatives, and assigns, of
individuals, officers, directors, shareholders, agents, employees and
successors and assigns of corporations, wherever the context so admits or
requires.)
HEREBY REMISE, RELEASE, ACQUIT, SATISFY, AND FOREVER DISCHARGE THE SAID
SECOND PARTY, OF AND FROM ALL, AND ALL MANNER OF ACTION AND ACTIONS, CAUSE AND
CAUSES OF ACTION, SUITS, DEBTS, DUES, SUMS OF MONEY, ACCOUNTS, RECKONINGS,
BONDS, BILLS, SPECIALTIES, COVENANTS, CONTRACTS AND CONTROVERSIES, AGREEMENTS
PROMISES, VARIANCES, TRESPASSES, DAMAGES, JUDGMENTS, EXECUTIONS, CLAIMS AND
DEMANDS WHATSOEVER, IN LAW OR IN EQUITY, WHICH SAID FIRST PARTY EVER HAD, NOW
HAS, OR WHICH ANY PERSONAL REPRESENTATIVE, SUCCESSOR, HEIR OR ASSIGN OF SAID
FIRST PARTY, HEREAFTER CAN, SHALL OR MAY HAVE, AGAINST SAID SECOND PARTY, FOR,
UPON OR BY REASON OF ANY MATTER, CAUSE OR THING WHATSOEVER, FROM THE BEGINNING
OF THE WORLD TO THE DAY OF THESE PRESENTS.
IN WITNESS WHEREOF, WE HAVE HEREUNTO SET OUR HAND AND SEAL THIS ___ DAY OF
JANUARY, 2004.
SIGNED, SEALED AND DELIVERED IN THE PRESENCE OF:
Signature Xxx Xxxxxx
Printed Name
Signature
Printed Name
STATE OF __________)
COUNTY OF ________)
I hereby certify that on this day, before me, an officer duly authorized
to administer oaths and take acknowledgments, personally appeared Xxx Xxxxxx,
known to me to be the person described in and who executed the foregoing
instrument on behalf of said corporation and, who acknowledged before me that
he/she executed the same on behalf of said corporation, that I relied upon the
following form of identification ________________ of the above named person/that
he/she is personally known to me, and that an oath (was)(was not) taken.
Witness my hand and official seal in the County and State last aforesaid
this ____ day of January, 2004.
--------------------------------------
Notary Public
State of ___________
[NOTARY STAMP SEAL]
15
