|
WITNESSETH
|
(a)
|
“Affiliates" shall mean,
with respect to any Person, any and all other Persons that control, are
controlled by, or are under common control with, such Person. For purposes
of the foregoing, "control" of a Person shall mean direct or indirect
ownership of 50% or more of the securities or other interests of such
Person having by their terms ordinary voting power to elect or appoint a
majority of the board of directors or others performing similar functions
with respect to such Person.
|
(b)
|
“Acquisition” means the
Acquisition, at the Closing, of the Company by Purchaser pursuant to this
Agreement;
|
(c)
|
“Acquisition Shares”
means the 1,063,636 shares of common stock of the Purchaser to be issued
to the Sellers at Closing pursuant to the terms of the
Acquisition;
|
(d)
|
"Business Day" shall
mean any day other than Saturday, Sunday and any day on which banking
institutions in the United States are authorized by law or other
governmental action to close;
|
(e)
|
“Closing Date” means the
day on which all conditions precedent to the completion of the
transactions contemplated hereby have been satisfied or
waived;
|
(f)
|
"Claim Notice" means
written notification pursuant to Section 9.3 of a Third Party Claim as to
which indemnity under Section 9.1 is sought by an Indemnified
Party.
|
(g)
|
"Code" means the
Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder.
|
(h)
|
"Contract" shall mean an
agreement, written or oral, between the Company and any other Person which
obligates either the Company or such other Person to do or not to do a
particular thing.
|
(i)
|
"Election Notice" means
a written notice provided by the Sellers or Purchaser, as the case may be,
in respect of a Tax Claim to the effect that it elects to contest, and to
control the defense or prosecution of, such Tax Claim as provided in this
Agreement.
|
(j)
|
"ERISA" shall mean the
Employee Retirement Income Security Act of 1974, as
amended.
|
(k)
|
"ERISA Affiliate" shall
mean any entity that would be deemed to be a "single employer" with the
Company under Section 414(b), (c), (m) or (o) of the Code or Section 4001
of ERISA.
|
(l)
|
"Environmental
Liabilities" means any cost, damages, expense, liability,
obligation, or other responsibility arising from or under (a) any
Environmental Law and consisting of or relating to (i) any environmental
matters or conditions (including on-site or off-site contamination and
environmental regulation of chemical substances or products); (ii) fines,
penalties, judgments, awards, settlements, legal or administrative
proceedings, out-of-pocket damages and necessary and required response,
investigative, remedial, or inspection costs and expenses arising under
Environmental Law; (iii) financial responsibility under Environmental Law
for clean-up costs or corrective action, including any necessary and
required investigation, clean-up, removal, containment, or other
remediation or response actions required by Environmental Law and for any
natural resource damages; or (iv) any other compliance, corrective,
investigative, or remedial measures required under Environmental Law; or
(b) any common law causes of action, including, but not limited to,
negligence, trespass or nuisance, based on violation by the Company of
Environmental Laws, releases by the Company of Hazardous Materials or
actions or omissions by the Company that expose others to Hazardous
Materials. The terms "removal," "remedial," "response action", and
"release" shall have the meanings provided for such terms under, and shall
include the types of activities covered by, the United States
Comprehensive Environmental Response, Compensation, and Liability Act, 42
U.S.C. Section 9601 et seq., as amended
("CERCLA").
|
(m)
|
"Environmental Laws"
shall mean all federal, state and local Laws relating to public health, or
to pollution or protection of the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) including, without limitation, the Clean Air Act, as
amended, CERCLA, the Resource Conservation and Recovery Act of 1976, as
amended ("RCRA"), the Toxic Substances Control Act, the Federal Water
Pollution Control Act, as amended, the Safe Drinking Water Act, as
amended, the Hazardous Materials Transportation Act, as amended, the Oil
Pollution Act of 1990, any state Laws implementing the foregoing federal
Laws, and all other Laws relating to or regulating (i) emissions,
discharges, releases, or cleanup of pollutants, contaminants, chemicals,
polychlorinated biphenyls (PCB's), oil and gas exploration and production
wastes, brine, solid wastes, or toxic or Hazardous Materials or wastes
(collectively, the "Polluting Substances"), (ii) the generation,
processing, distribution, use, treatment, handling, storage, disposal, or
transportation of Polluting Substances, or (iii) environmental
conservation or protection. References in this Agreement to Environmental
Laws existing or in effect as of a particular date shall include written
administrative interpretations and policies then existing or in
effect.
|
(n)
|
"Environmental Permit"
means any federal, state, local, provincial, or foreign permits, licenses,
approvals, consent or authorizations required by any Governmental or
Regulatory Authority under or in connection with any Environmental Law and
includes any and all orders, consent orders or binding agreements issued
or entered into by a Governmental or Regulatory Authority under any
applicable Environmental Law.
|
(o)
|
"Governmental or Regulatory
Authority" shall mean any federal, state, regional, municipal or
local court, legislative, executive, Native American or regulatory
authority or agency, board, commission, department or subdivision
thereof.
|
(p)
|
"Hazardous Activity"
means the distribution, generation, handling, importing, management,
manufacturing, processing, production, refinement, release, storage,
transfer, transportation, treatment, or use (including any withdrawal or
other use of groundwater) of Hazardous Materials in, on, under, about, or
from the Company’s facilities or any part thereof into the
environment.
|
(q)
|
"Hazardous Materials"
means (i) any petroleum or petroleum products, radioactive materials,
asbestos in any form that is, or that is likely to become, friable, urea
formaldehyde foam insulation and transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls
(PCBs), or (ii) any chemicals, materials, substances or wastes which are
now or hereafter become defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous wastes," "restricted hazardous wastes," "toxic
substances," "toxic pollutants" or words of similar import, under any
applicable Environmental Law.
|
(r)
|
"Indemnified Party"
means any Person entitled to indemnification under any provision of
Article 9.
|
(s)
|
"Indemnifying Party"
means any Person obligated to provide indemnification under any provision
of Article 9.
|
(t)
|
"Law" shall mean any
federal, state, county, or local laws, statutes, regulations, rules,
codes, ordinances, orders, decrees, judgments or injunctions enacted,
adopted, issued or promulgated by any Governmental or Regulatory
Authority, from time to time.
|
(u)
|
"Lien" shall mean any
mortgage, deed of trust, pledge, lien, claim, security interest, covenant,
restriction, easement, preemptive right, or any other encumbrance or
charge of any kind.
|
(v)
|
"Material Contract"
shall have the meaning set forth in Section
4.14.
|
(w)
|
“Material Adverse
Effect” shall mean any material adverse effect on the business or
financial condition of the Company;
|
(x)
|
“Order” shall mean
any writ, judgment, decree, injunction or similar order of any
Governmental or Regulatory Authority (in each such case whether
preliminary or final).
|
(y)
|
“Place of Closing” means
the offices of the Law Offices of Stephen M. Fleming, or such
other place as Purchaser and the Sellers may mutually agree
upon;
|
(z)
|
"Permitted Lien" shall
mean: (a) liens created under any Lease, except any lien arising as a
result of any failure to timely make any payment or failure to perform any
other obligation or other default under such Lease; (b) liens for Taxes
that are not yet due and payable or that are being contested in good faith
by appropriate proceedings; (c) mechanics, materialmen's, landlords',
carriers', warehousemen's, and other liens imposed by law incurred in the
ordinary course of business; (d) zoning restrictions, land use
regulations, declarations, reservations, provisions, covenants,
conditions, waivers, restrictions on the use of property and third party
easements, rights of way, leases or similar matters that are recorded in
the county records where the effected property is located and do not
prohibit the use of the property as currently used; (e) the absence of
executed rights of way or easements, or a defect in any executed right of
way or easement, where such rights have been or can be otherwise obtained
through a proceeding under prescription or other operation of law; (f)
deposits or pledges to secure obligations under worker's compensation,
social security or similar laws, or under unemployment insurance; (g)
deposits or pledges to secure bids, tenders, contracts (other than
contracts for the payment of money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of like nature
arising in the ordinary course of the Company's business and made, created
or arising prior to the Closing Date; (h) leases or subleases granted by
or to others; and (i) precautionary Uniform Commercial Code financing
statements regarding operating leases which leases are either disclosed
pursuant to Article 3 hereof or no longer in
effect.
|
(aa)
|
"Person" shall mean an
individual, partnership, joint venture, trust, corporation, limited
liability company or other legal entity or Governmental or Regulatory
Authority.
|
(bb)
|
“Post-Closing Period”
means any taxable period or portion thereof beginning after the Closing
Date. If a taxable period begins on or before the Closing Date and ends
after the Closing Date, then the portion of the taxable period that begins
on the day following the Closing Date shall constitute a Post-Closing
Period.
|
(cc)
|
"Pre-Closing Period"
means any taxable period or portion thereof that is not a Post-Closing
Period.
|
(dd)
|
“Purchaser Material Adverse
Effect” shall mean any material adverse effect on the business or
financial condition of the
Purchaser;
|
(ee)
|
“Remedial Action” shall
mean any removal,
remediation, response, clean up or other corrective action to respond to,
remove or otherwise address any Environmental
Liability.
|
(ff)
|
“Shares” means all of the
issued and outstanding shares of common stock of the Company as defined in
Section 3.3.
|
(gg)
|
"Taxes" shall mean any
and all taxes, charges, fees, levies or other assessments, including,
without limitation, all net income, gross income, gross receipts, excise,
stamp, real or personal property, ad valorem, withholding, estimated,
social security, unemployment, occupation, use, sales, service, service
use, license, net worth, payroll, franchise, severance, transfer,
recording or other taxes, assessments or charges imposed by any
Governmental or Regulatory Authority, whether computed on a separate,
consolidated, unitary, combined or other basis, and in each case such term
shall include any interest, penalties, or additions to tax attributable
thereto.
|
(hh)
|
"Tax Return" shall mean
any return, report or similar statement required to be filed with respect
to any Tax (including any attached schedules), including, without
limitation, any information return, claim for refund, amended return or
declaration of estimated Tax and including any return of an affiliated,
combined or unitary group.
|
(a)
|
the
sale is to Purchaser;
|
(b)
|
the
sale is made pursuant to the exemption from registration under the
Securities Act,
provided by Rule 144 thereunder; or
|
(c)
|
the
Acquisition Shares are sold in a transaction that does not require
registration under the Securities Act or any applicable United States
state laws and regulations governing the offer and sale of securities, and
the vendor has furnished to Purchaser an opinion of counsel to that effect
or such other written opinion as may be reasonably required by
Purchaser.
|
THESE
SECURITIES HAVE NOT BEEN REGISTERED
UNDER
THE SECURITIES ACT OF 1933. THEY MAY NOT
BE
SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED
OR OTHERWISE TRANSFERRED IN
THE
ABSENCE OF A REGISTRATION STATEMENT WITH
RESPECT
TO THE SECURITIES UNDER SUCH ACT AND
THE
OPINION OF COUNSEL REASONABLY
SATISFACTORY
TO THE COMPANY THAT SUCH
REGISTRATION
IS NOT REQUIRED OR UNLESS SOLD
PURSUANT
TO RULE 144 OR RULE 144A OF
SUCH
ACT.
|
||
(a)
|
The
Majority Stokholder and the Company have delivered to the Purchaser true,
correct and complete copies of the certificate of incorporation (certified
by the Secretary of State or other appropriate official of the applicable
jurisdiction of organization) and by-laws (certified by the secretary,
assistant secretary or other appropriate officer) or comparable
organizational documents of the
Company.
|
(b)
|
The
minute books of the Company previously made available to the Purchaser
contain complete and accurate records of all meetings and accurately
reflect all other corporate action of the stockholders and board of
directors (including committees thereof) of the Company. The
stock certificate books and stock transfer ledgers of the Company
previously made available to the Purchaser are true, correct and
complete. All stock transfer taxes levied or payable with
respect to all transfers of shares of the Company prior to the date hereof
have been paid and appropriate transfer tax stamps
affixed.
|
(a)
|
None
of the execution and delivery by the Company or any Seller of this
Agreement and the Seller Documents, the consummation of the transactions
contemplated hereby or thereby, or compliance by the Company or any Seller
with any of the provisions hereof or thereof will (i) conflict with, or
result in the breach of, any provision of the articles of incorporation or
by-laws or comparable organizational documents of the Company; (ii)
conflict with, violate, result in the breach or termination of, or
constitute a default under any note, bond, mortgage, indenture, license,
agreement or other instrument or obligation to which the Company is a
party or by which any of them or any of their respective properties or
assets is bound; (iii) violate any statute, rule, regulation, order or
decree of any governmental body or authority by which the Company is
bound; or (iv) result in the creation of any Lien upon the properties or
assets of the Company or any subsidiary of the Company except, in case of
clauses (ii), (iii) and (iv), for such violations, breaches or defaults as
would not, individually or in the aggregate, have a Material Adverse
Effect.
|
(b)
|
No
consent, waiver, approval, Order, permit or authorization of, or
declaration or filing with, or notification to, any Person or Governmental
or Regulatory Authority is required on the
part of any Seller, the Company in connection with the execution and
delivery of this Agreement or the Seller Documents, or the compliance by
each Seller or the Company as the case may be, with any of the provisions
hereof or thereof.
|
(a)
|
The
Purchaser has delivered to the Company true, correct and complete copies
of the articles of incorporation (each certified by the Secretary of State
or other appropriate official of the applicable jurisdiction of
organization) and by-laws (each certified by the secretary, assistant
secretary or other appropriate officer) or comparable organizational
documents of the Purchaser.
|
(b)
|
The
minute books of the Purchaser previously made available to the Sellers
contain complete and accurate records of all meetings and accurately
reflect all other corporate action of the stockholders and board of
directors (including committees thereof) of the Purchaser to the best of
the Purchaser’s knowledge. The stock certificate books and
stock transfer ledgers of the Purchaser previously made available to the
Sellers are true, correct and complete. All stock transfer
taxes levied or payable with respect to all transfers of shares of the
Purchaser prior to the date hereof have been paid and appropriate transfer
tax stamps affixed to the best of the Purchaser’s
knowledge.
|
(a)
|
None
of the execution and delivery by Purchaser of this Agreement and the
Purchaser Documents, the consummation of the transactions contemplated
hereby or thereby, or compliance by Purchaser with any of the provisions
hereof or thereof will (i) conflict with, or result in the breach of, any
provision of the articles of incorporation or by-laws or comparable
organizational documents of the Purchaser; (ii) conflict with, violate,
result in the breach or termination of, or constitute a default under any
note, bond, mortgage, indenture, license, agreement or other instrument or
obligation to which the Purchaser is a party or by which any of them or
any of their respective properties or assets is bound; (iii) violate any
statute, rule, regulation, order or decree of any governmental body or
authority by which the Purchaser is bound; or (iv) result in the creation
of any Lien upon the properties or assets of the Purchaser except, in case
of clauses (ii), (iii) and (iv), for such violations, breaches or defaults
as would not, individually or in the aggregate, have a Material Adverse
Effect.
|
(b)
|
No
consent, waiver, approval, Order, permit or authorization of, or
declaration or filing with, or notification to, any Person or Governmental
or Regulatory Authority is required on the
part of Purchaser in connection with the execution and delivery of this
Agreement or the Purchaser Documents, or the compliance by Purchaser with
any of the provisions hereof or thereof, other than the filing of a
Current Report on Form 8-K, a Schedule 14f-1 and any applicable Schedule
13D amendments and Forms 4.
|
(a)
|
The
Sellers have reviewed copies of the audited balance sheets of the
Purchaser as at December 31, 2008 and 2007 and the related audited
statements of income and of cash flows of the Purchaser for the years then
ended and the copies of the unaudited balance sheets of the Purchaser as
at September 30, 2009 and the related unaudited statements of income and
of cash flows of the Purchaser for the years then ended (the “Financial
Statements”). Each of the Financial Statements is complete and
correct in all material respects, has been prepared in accordance with
GAAP (subject to normal year-end adjustments in the case of the unaudited
statements) and in conformity with the practices consistently applied by
the Purchaser without modification of the accounting principles used in
the preparation thereof and presents fairly the financial position,
results of operations and cash flows of the Purchaser as at the dates and
for the periods indicated.
|
(b)
|
For
the purposes hereof, the audited balance sheet of the Purchaser as at
December 31, 2008 is referred to as the "Balance Sheet" and December 31,
2008 is referred to as the “Balance Sheet
Date”.
|
(i)
|
there
has not been any material adverse change nor has there occurred any event
which is reasonably likely to result in a material adverse
change;
|
(ii)
|
there
has not been any damage, destruction or loss, whether or not covered by
insurance, with respect to the property and assets of the Purchaser having
a replacement cost of more than $25,000 for any single loss or $100,000
for all such losses;
|
(iii)
|
there
has not been any declaration, setting aside or payment of any dividend or
other distribution in respect of any shares of capital stock of the
Purchaser or any repurchase, redemption or other acquisition by the
Purchaser of any outstanding shares of capital stock or other securities
of, or other ownership interest in, the
Purchaser;
|
(iv)
|
the
Purchaser has not awarded or paid any bonuses to employees of the
Purchaser except to the extent accrued on the Balance Sheet or entered
into any employment, deferred compensation, severance or similar agreement
(nor amended any such agreement) or agreed to increase the compensation
payable or to become payable by it to any of the Purchaser's directors,
officers, employees, agents or representatives or agreed to increase the
coverage or benefits available under any severance pay, termination pay,
vacation pay, company awards, salary continuation for disability, sick
leave, deferred compensation, bonus or other incentive compensation,
insurance, pension or other employee benefit plan, payment or arrangement
made to, for or with such directors, officers, employees, agents or
representatives (other than normal increases in the ordinary course of
business consistent with past practice and that in the aggregate have not
resulted in a material increase in the benefits or compensation expense of
the Purchaser);
|
(v)
|
there
has not been any change by the Purchaser in accounting or Tax reporting
principles, methods or policies;
|
(vi)
|
the
Purchaser has not entered into any transaction or Contract or conducted
its business other than in the ordinary course consistent with past
practice;
|
(vii)
|
the
Purchaser has not made any loans, advances or capital contributions to, or
investments in, any Person or paid any fees or expenses to any Seller or
any Affiliate of any Seller;
|
(viii)
|
the
Purchaser has not mortgaged, pledged or subjected to any Lien, any of its
assets, or acquired any assets or sold, assigned, transferred, conveyed,
leased or otherwise disposed of any assets of the Purchaser, except for
assets acquired or sold, assigned, transferred, conveyed, leased or
otherwise disposed of in the ordinary course of business consistent with
past practice;
|
(ix)
|
the
Purchaser has not discharged or satisfied any Lien, or paid any obligation
or liability (fixed or contingent), except in the ordinary course of
business consistent with past practice and which, in the aggregate, would
not be material to the Purchaser;
|
(x)
|
the
Purchaser has not canceled or compromised any debt or claim or amended,
canceled, terminated, relinquished, waived or released any Contract or
right except in the ordinary course of business consistent with past
practice and which, in the aggregate, would not be material to the
Purchaser;
|
(xi)
|
the
Purchaser has not made or committed to make any capital expenditures or
capital additions or betterments in excess of $25,000 individually or
$100,000 in the aggregate;
|
(xii)
|
the
Purchaser has not instituted or settled any material legal proceeding;
and
|
(xiii)
|
the
Purchaser has not agreed to do anything set forth in this Section
4.9.
|
(a)
|
(A)
all Tax Returns required to be filed by or on behalf of the Purchaser have
been filed with the appropriate taxing authorities in all jurisdictions in
which such Tax Returns are required to be filed (after giving effect to
any valid extensions of time in which to make such filings), and all such
Tax Returns were true, complete and correct in all material respects; (B)
all Taxes payable by or on behalf of the Purchaser or in respect of its
income, assets or operations have been fully and timely paid, and (C) the
Purchaser has not executed or filed with the IRS or any other taxing
authority any agreement, waiver or other document or arrangement extending
or having the effect of extending the period for assessment or collection
of Taxes (including, but not limited to, any applicable statute of
limitation), and no power of attorney with respect to any Tax matter is
currently in force.
|
(b)
|
The
Purchaser has complied in all material respects with all applicable laws,
rules and regulations relating to the payment and withholding of Taxes and
has duly and timely withheld from employee salaries, wages and other
compensation and has paid over to the appropriate taxing authorities all
amounts required to be so withheld and paid over for all periods under all
applicable laws.
|
(c)
|
The
Sellers have received complete copies of (A) all federal, state, local and
foreign income or franchise Tax Returns of the Purchaser relating to the
taxable periods since 2004 and (B) any audit report issued within the last
three years relating to Taxes due from or with respect to the Purchaser
its income, assets or operations.
|
(d)
|
All
material types of Taxes paid and material types of Tax Returns filed by or
on behalf of the Purchaser have been paid and filed. No claim
has been made by a taxing authority in a jurisdiction where the Purchaser
does not file Tax Returns such that it is or may be subject to taxation by
that jurisdiction.
|
(e)
|
All
deficiencies asserted or assessments made as a result of any examinations
by the IRS or any other taxing authority of the Tax Returns of or covering
or including the Purchaser have been fully paid, and there are no other
audits or investigations by any taxing authority in progress, nor have the
Sellers or the Purchaser received any notice from any taxing authority
that it intends to conduct such an audit or investigation. No
issue has been raised by a federal, state, local or foreign taxing
authority in any current or prior examination which, by application of the
same or similar principles, could reasonably be expected to result in a
proposed deficiency for any subsequent taxable
period.
|
(f)
|
Neither
the Purchaser nor any other Person (including any of the Sellers) on
behalf of the Purchaser has (A) filed a consent pursuant to Section 341(f)
of the Code or agreed to have Section 341(f)(2) of the Code apply to any
disposition of a subsection (f) asset (as such term is defined in Section
341(f)(4) of the Code) owned by the Purchaser, (B) agreed to or is
required to make any adjustments pursuant to Section 481(a) of the Code or
any similar provision of state, local or foreign law by reason of a change
in accounting method initiated by the Purchaser or has any knowledge that
the Internal Revenue Service has proposed any such adjustment or change in
accounting method, or has any application pending with any taxing
authority requesting permission for any changes in accounting methods that
relate to the business or operations of the Purchaser, (C) executed or
entered into a closing agreement pursuant to Section 7121 of the Code or
any predecessor provision thereof or any similar provision of state, local
or foreign law with respect to the Purchaser, or (D) requested any
extension of time within which to file any Tax Return, which Tax Return
has since not been filed.
|
(g)
|
No
property owned by the Purchaser is (i) property required to be treated as
being owned by another Person pursuant to the provisions of Section
168(f)(8) of the Internal Revenue Code of 1954, as amended and in effect
immediately prior to the enactment of the Tax Reform Act of 1986, (ii)
constitutes "tax-exempt use property" within the meaning of Section
168(h)(1) of the Code or (iii) is "tax-exempt bond financed property"
within the meaning of Section 168(g) of the
Code.
|
(h)
|
The
Purchaser is not a foreign person within the meaning of Section 1445 of
the Code.
|
(i)
|
The
Purchaser is not a party to any tax sharing or similar agreement or
arrangement (whether or not written) pursuant to which it will have any
obligation to make any payments after the
Closing.
|
(j)
|
There
is no contract, agreement, plan or arrangement covering any person that,
individually or collectively, could give rise to the payment of any amount
that would not be deductible by the Company, its Affiliates or their
respective affiliates by reason of Section 280G of the Code, or would
constitute compensation in excess of the limitation set forth in Section
162(m) of the Code.
|
(k)
|
The
Purchaser is not subject to any private letter ruling of the IRS or
comparable rulings of other taxing
authorities.
|
(l)
|
Except
as set forth on Schedule 4.10, there are no liens as a result of any
unpaid Taxes upon any of the assets of the
Purchaser.
|
(m)
|
The
Purchaser has no elections in effect for federal income tax purposes under
Sections 108, 168, 338, 441, 463, 472, 1017, 1033 or 4977 of the
code.
|
(a)
|
The
Purchaser is not a party to any labor or collective bargaining agreement
and there are no labor or collective bargaining agreements which pertain
to employees of the Purchaser.
|
(b)
|
No
employees of the Purchaser are represented by any labor
organization. No labor organization or group of employees of
the Purchaser has made a pending demand for recognition, and there are no
representation proceedings or petitions seeking a representation
proceeding presently pending or, to the best knowledge of the Purchaser,
threatened to be brought or filed, with the National Labor Relations Board
or other labor relations tribunal. There is no organizing
activity involving the Purchaser pending or, to the best knowledge of the
Purchaser, threatened by any labor organization or group of employees of
the Purchaser.
|
(c)
|
There
are no (i) strikes, work stoppages, slowdowns, lockouts or arbitrations or
(ii) material grievances or other labor disputes pending or, to the best
knowledge of any Purchaser, threatened against or involving the
Purchaser. There are no unfair labor practice charges,
grievances or complaints pending or, to the best knowledge of Purchaser,
threatened by or on behalf of any employee or group of employees of the
Purchaser.
|
(a)
|
the
operations of the Purchaser are in compliance with all applicable
Environmental Laws and all Environmental
Permits;
|
(b)
|
the
Purchaser has obtained all permits required under all applicable
Environmental Laws necessary to operate its
business;
|
(c)
|
the
Purchaser is not the subject of any outstanding written order or Contract
with any Governmental or Regulatory Authority or Person respecting (i)
Environmental Laws, (ii) Remedial Action, (iii) any release or threatened
release of a Hazardous Material or (iv) any Hazardous
Activity;
|
(d)
|
the
Purchaser has not received any written communication alleging that the
Purchaser may be in violation of any Environmental Law, or any
Environmental Permit, or may have any liability under any Environmental
Law;
|
(e)
|
the
Purchaser has no current contingent liability in connection with any
Hazardous Activity or release of any Hazardous Materials into the indoor
or outdoor environment (whether on-site or
off-site);
|
(f)
|
to
the Purchaser’s knowledge, there are no investigations of the business,
operations, or currently or previously owned, operated or leased property
of the Purchaser pending or threatened which could lead to the imposition
of any liability pursuant to Environmental
Law;
|
(g)
|
there
is not located at any of the properties of the Purchaser any (i)
underground storage tanks, (ii) asbestos-containing material or (iii)
equipment containing polychlorinated biphenyls;
and,
|
(h)
|
the
Purchaser has provided to the Sellers all environmentally related audits,
studies, reports, analyses, and results of investigations that have been
performed with respect to the currently or previously owned, leased or
operated properties of the
Purchaser.
|
(a)
|
The
inventories of the Purchaser are in good and marketable condition, and are
saleable in the ordinary course of business. Adequate reserves
have been reflected in the Balance Sheet for obsolete or otherwise
unusable inventory, which reserves were calculated in a manner consistent
with past practice and in accordance with GAAP consistently
applied.
|
(b)
|
All
accounts receivable of the Purchaser have arisen from bona fide
transactions in the ordinary course of business consistent with past
practice. All accounts receivable of the Purchaser reflected on
the Balance Sheet are good and collectible at the aggregate recorded
amounts thereof, net of any applicable reserve for returns or doubtful
accounts reflected thereon, which reserves are adequate and were
calculated in a manner consistent with past practice and in accordance
with GAAP consistently applied. All accounts receivable arising
after the Balance Sheet Date are good and collectible at the aggregate
recorded amounts thereof, net of any applicable reserve for returns or
doubtful accounts, which reserves are adequate and were calculated in a
manner consistent with past practice and in accordance with GAAP
consistently applied.
|
(c)
|
All
accounts payable of the Purchaser reflected in the Balance Sheet or
arising after the date thereof are the result of bona fide transactions in
the ordinary course of business and have been paid or are not yet due and
payable.
|
(a)
|
Except
as otherwise expressly contemplated by this Agreement or with the prior
written consent of the Purchaser, the Majority Stockholder shall, and
shall cause the Company to:
|
(i)
|
conduct
the businesses of the Company only in the ordinary course consistent with
past practice;
|
(ii)
|
use
its best efforts to (A) preserve its present business operations,
organization (including, without limitation, management and the sales
force) and goodwill of the Company and (B) preserve its present
relationship with Persons having business dealings with the
Company;
|
(iii)
|
maintain
(A) all of the assets and properties of the Company in their current
condition, ordinary wear and tear excepted and (B) insurance upon all of
the properties and assets of the Company in such amounts and of such kinds
comparable to that in effect on the date of this
Agreement;
|
(iv)
|
(A)
maintain the books, accounts and records of the Company in the ordinary
course of business consistent with past practices, (B) continue to collect
accounts receivable and pay accounts payable utilizing normal procedures
and without discounting or accelerating payment of such accounts, and (C)
comply with all contractual and other obligations applicable to the
operation of the Company; and
|
(v)
|
comply
in all material respects with applicable laws, including, without
limitation, Environmental Laws.
|
(b)
|
Except
as otherwise expressly contemplated by this Agreement or with the prior
written consent of the Company, the Purchaser shall
not:
|
(i)
|
declare,
set aside, make or pay any dividend or other distribution in respect of
the capital stock of the Purchaser or repurchase, redeem or otherwise
acquire any outstanding shares of the capital stock or other securities
of, or other ownership interests in, the
Purchaser;
|
(ii)
|
transfer,
issue, sell or dispose of any shares of capital stock or other securities
of the Purchaser or grant options, warrants, calls or other rights to
purchase or otherwise acquire shares of the capital stock or other
securities of the Purchaser;
|
(iii)
|
effect
any recapitalization, reclassification, stock split or like change in the
capitalization of the Purchaser;
|
(iv)
|
amend
the certificate of incorporation or by-laws of the
Purchaser;
|
(v)
|
(A)
materially increase the annual level of compensation of any employee of
the Purchaser, (B) increase the annual level of compensation payable or to
become payable by the Purchaser to any of its executive officers, (C)
grant any unusual or extraordinary bonus, benefit or other direct or
indirect compensation to any employee, director or consultant, (D)
increase the coverage or benefits available under any (or create any new)
severance pay, termination pay, vacation pay, company awards, salary
continuation for disability, sick leave, deferred compensation, bonus or
other incentive compensation, insurance, pension or other employee benefit
plan or arrangement made to, for, or with any of the directors, officers,
employees, agents or representatives of the Purchaser or otherwise modify
or amend or terminate any such plan or arrangement or (E) enter into any
employment, deferred compensation, severance, consulting, non-competition
or similar agreement (or amend any such agreement) to which the Purchaser
is a party or involving a director, officer or employee of the Purchaser
in his or her capacity as a director, officer or employee of the
Purchaser;
|
(vi)
|
subject
to any Lien (except for leases that do not materially impair the use of
the property subject thereto in their respective businesses as presently
conducted), any of the properties or assets (whether tangible or
intangible) of the Purchaser;
|
(vii)
|
acquire
any material properties or assets or sell, assign, transfer, convey, lease
or otherwise dispose of any of the material properties or assets (except
for fair consideration in the ordinary course of business consistent with
past practice) of the Purchaser;
|
(viii)
|
cancel
or compromise any debt or claim or waive or release any material right of
the Purchaser except in the ordinary course of
business;
|
(ix)
|
enter
into any commitment for capital expenditures of the
Purchaser;
|
(x)
|
enter
into, modify or terminate any labor or collective bargaining agreement of
the Purchaser or, through negotiation or otherwise, make any commitment or
incur any liability to any labor organization with respect to the
Purchaser;
|
(xi)
|
permit
the Purchaser to enter into any transaction or to make or enter into any
Contract;
|
(xii)
|
permit
the Purchaser to enter into or agree to enter into any merger or
consolidation with, any corporation or other entity, and not engage in any
new business or invest in, make a loan, advance or capital contribution
to, or otherwise acquire the securities of any other
Person;
|
(xiii)
|
permit
the Purchaser to make any investments in or loans to, or pay any fees or
expenses to, or enter into or modify any Contract with any Affiliate;
or
|
(xiv)
|
agree
to do anything prohibited by this Section 6.2 or anything which would make
any of the representations and warranties of the Purchaser and the
Majority Stockholder in this Agreement untrue or incorrect in any material
respect.
|
(a)
|
all
representations and warranties of the Company, the Majority Shareholder
and the Sellers contained herein shall be true and correct as of the date
hereof and as of the Closing Date;
|
(b)
|
all
representations and warranties of the Company, the Majority Shareholder
and the Sellers contained herein qualified as to materiality
shall be true and correct, and the representations and warranties of the
Sellers contained herein not qualified as to materiality shall be true and
correct in all material respects, at and as of the Closing Date with the
same effect as though those representations and warranties had been made
again at and as of that time;
|
(c)
|
the
Company, the Majority Shareholder and the Sellers shall have performed and
complied in all material respects with all obligations and covenants
required by this Agreement to be performed or complied with by them on or
prior to the Closing Date;
|
(d)
|
the
Purchaser shall have been furnished with certificates (dated the Closing
Date and in form and substance reasonably satisfactory to the Purchaser)
executed by the Chief Executive Officer and Chief Financial Officer of the
Company certifying as to the fulfillment of the conditions specified in
Sections 6.1(a), 6.2(b) and 6.2(c)
hereof;
|
(e)
|
there
shall not have been or occurred any material adverse change in the
business or operations of the
Company;
|
(f)
|
the
Sellers shall have obtained all consents and waivers referred to in
Section 3.5(b) there are none hereof, in a form reasonably satisfactory to
the Purchaser, with respect to the transactions contemplated by this
Agreement and the Seller Documents;
and
|
(g)
|
no
legal proceedings shall have been instituted or threatened or claim or
demand made against the Sellers, the Company or any of its Subsidiaries,
or the Purchaser seeking to restrain or prohibit or to obtain substantial
damages with respect to the consummation of the transactions contemplated
hereby, and there shall not be in effect any Order by a Governmental or
Regulatory Authority of competent jurisdiction restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated
hereby.
|
(a)
|
all
representations and warranties of the Purchaser and the Majority
Stockholder contained herein shall be true and correct as of the date
hereof and as of the Closing Date;
|
(b)
|
all
representations and warranties of the Purchaser contained herein qualified
as to materiality shall be true and correct, and all representations and
warranties of the Purchaser contained herein not qualified as to
materiality shall be true and correct in all material respects, at and as
of the Closing Date with the same effect as though those representations
and warranties had been made again at and as of that
date;
|
(c)
|
the
Purchaser shall have performed and complied in all material respects with
all obligations and covenants required by this Agreement to be performed
or complied with by Purchaser on or prior to the Closing
Date;
|
(d)
|
the
Sellers shall have been furnished with certificates (dated the Closing
Date and in form and substance reasonably satisfactory to the Sellers)
executed by the Chief Executive Officer and Chief Financial Officer of the
Purchaser certifying as to the fulfillment of the conditions specified in
Sections 6.2(a), 6.2(b) and 6.2(c)
hereof;
|
(e)
|
there
shall not be in effect any Order by a Governmental or Regulatory Authority
of competent jurisdiction restraining, enjoining or otherwise prohibiting
the consummation of the transactions contemplated
hereby;
|
(f)
|
the
Sellers shall have obtained all consents and waivers referred to in
Section 4.6(b) hereof, in a form reasonably satisfactory to the Purchaser,
with respect to the transactions contemplated by this Agreement and the
Seller Documents; and
|
(g)
|
all
officers and members of the Board of Directors of the Purchaser shall have
provided an undated resignation and shall have appointed the designees of
the Sellers as members of the Board of
Directors.
|
(a)
|
terminate
this Agreement, in which case no party will be under any further
obligation to any other party; or
|
(b)
|
elect
to complete the Acquisition and the other transactions contemplated
hereby, in which case the proceeds and the rights to receive the proceeds
of all insurance covering such loss or damage will, as a condition
precedent to Purchaser' obligations to carry out the transactions
contemplated hereby, be vested in Company or otherwise adequately secured
to the satisfaction of Purchaser on or before the Closing
Date.
|
(a)
|
terminate
this Agreement, in which case no party will be under any further
obligation to any other party; or
|
(b)
|
elect
to complete the Acquisition and the other transactions contemplated
hereby, in which case the proceeds and the rights to receive the proceeds
of all insurance covering such loss or damage will, as a condition
precedent to Company's obligations to carry out the transactions
contemplated hereby, be vested in Purchaser or otherwise adequately
secured to the satisfaction of Company on or before the Closing
Date.
|
(a)
|
copies
of all consents and waivers referred to in Section 6.1(f)
hereof;
|
(b)
|
certificates
of good standing with respect to the Company issued by the Secretary
of the State of the Ohio;
and
|
(c)
|
such
other documents as the Purchaser shall reasonably
request.
|
(a)
|
the
Acquisition Shares;
|
|
(d) certificates
of good standing with respect to the Purchaser issued by the Secretary
of the State of the
Nevada;
|
(e)
|
resignation
of the officers of the Company effective as of the Closing Date and
resignation of the sole member of the Board of Directors of Purchaser, to
be effective 10 days after the mailing of the Schedule 14f-1 to the
shareholders of Purchaser;
|
(f)
|
resolution
of the Board of Directors appointing Stephen Burns as a director of the
Purchaser, Kelvin D. Moore and Maggie M. Moran as directors of the
Company, subject to Schedule 14f1 and Stephen Burns as Chief Executive
Officer, Chief Financial Officer, Treasurer and Secretary of the
Corporation;
|
(g)
|
a
legal opinion acceptable to the Company;
and
|
(a)
|
Subject
to Section 9.2 hereof, the Majority Stockholder hereby agree to j
indemnify and hold the Purchaser and their respective directors, officers,
employees, Affiliates, agents, representatives, heirs, successors and
assigns (collectively, the "Purchaser Indemnified Parties") harmless from
and against:
|
(i)
|
any
and all losses, liabilities, obligations, damages, costs and expenses
based upon, attributable to or resulting from the failure of any
representation or warranty of the the Majority Stockholder set forth in
Article 3 hereof, or any representation or warranty contained in any
certificate delivered by or on behalf of the the Majority Stockholder
pursuant to this Agreement, to be true and correct in all respects as of
the date made;
|
(ii)
|
any
and all losses, liabilities, obligations, damages, costs and expenses
based upon, attributable to or resulting from the breach of any covenant
or other agreement on the part of the the Majority Stockholder under this
Agreement or any Seller Document;
|
(iii)
|
any
and all losses, liabilities, obligations, damages, costs and expenses
based upon, attributable to or resulting from any act or omission of the
Company or the Majority Stockholder;
and
|
(iv)
|
any
and all expenses incident to the
foregoing.
|
(b)
|
Subject
to Section 9.2, Purchaser and the Majority Stockholder hereby agrees to
indemnify and hold the Sellers and their respective Affiliates, agents,
successors and assigns (collectively, the "Seller Indemnified Parties")
harmless from and against:
|
(i)
|
any
and all losses, liabilities, obligations, damages, costs and expenses
based upon, attributable to or resulting from the failure of any
representation or warranty of the Purchaser set forth in Section 4 hereof,
or any representation or warranty contained in any certificate delivered
by or on behalf of the Purchaser pursuant to this Agreement, to be true
and correct as of the date made;
|
(ii)
|
any
and all losses, liabilities, obligations, damages, costs and expenses
based upon, attributable to or resulting from the breach of any covenant
or other agreement on the part of the Purchaser under this Agreement;
and
|
(iii)
|
any
and all Expenses incident to the
foregoing.
|
(a)
|
In
the event that any legal proceedings shall be instituted or that any claim
or demand ("Claim") shall be asserted by any Person in respect of which
payment may be sought under Section 9.1 hereof, the Indemnified Party
shall reasonably and promptly cause written notice of the assertion of any
Claim of which it has knowledge which is covered by this indemnity to be
forwarded to the Indemnifying Party. The Indemnifying Party
shall have the right, at its sole option and expense, to be represented by
counsel of its choice, which must be reasonably satisfactory to the
Indemnified Party, and to defend against, negotiate, settle or otherwise
deal with any Claim which relates to any Losses indemnified against
hereunder. If the Indemnifying Party elects to defend against,
negotiate, settle or otherwise deal with any Claim which relates to any
losses indemnified against hereunder, it shall within five (5) days (or
sooner, if the nature of the Claim so requires) notify the Indemnified
Party of its intent to do so. If the Indemnifying Party elects
not to defend against, negotiate, settle or otherwise deal with any Claim
which relates to any Losses indemnified against hereunder, fails to notify
the Indemnified Party of its election as herein provided or contests its
obligation to indemnify the Indemnified Party for such Losses under this
Agreement, the Indemnified Party may defend against, negotiate, settle or
otherwise deal with such Claim. If the Indemnified Party
defends any Claim, then the Indemnifying Party shall reimburse the
Indemnified Party for the Expenses of defending such Claim upon submission
of periodic bills. If the Indemnifying Party shall assume the
defense of any Claim, the Indemnified Party may participate, at his or its
own expense, in the defense of such Claim; provided, however, that such
Indemnified Party shall be entitled to participate in any such defense
with separate counsel at the expense of the Indemnifying Party if, (i) so
requested by the Indemnifying Party to participate or (ii) in the
reasonable opinion of counsel to the Indemnified Party, a conflict or
potential conflict exists between the Indemnified Party and the
Indemnifying Party that would make such separate representation advisable;
and provided, further, that the Indemnifying Party shall not be required
to pay for more than one such counsel for all indemnified parties in
connection with any Claim. The parties hereto agree to
cooperate fully with each other in connection with the defense,
negotiation or settlement of any such
Claim.
|
(b)
|
After
any final judgment or award shall have been rendered by a court,
arbitration board or administrative agency of competent jurisdiction and
the expiration of the time in which to appeal therefrom, or a settlement
shall have been consummated, or the Indemnified Party and the Indemnifying
Party shall have arrived at a mutually binding agreement with respect to a
Claim hereunder, the Indemnified Party shall forward to the Indemnifying
Party notice of any sums due and owing by the Indemnifying Party pursuant
to this Agreement with respect to such matter and the Indemnifying Party
shall be required to pay all of the sums so due and owing to the
Indemnified Party by wire transfer of immediately available funds within
10 business days after the date of such
notice.
|
(c)
|
The
failure of the Indemnified Party to give reasonably prompt notice of any
Claim shall not release, waive or otherwise affect the Indemnifying
Party's obligations with respect thereto except to the extent that the
Indemnifying Party can demonstrate actual loss and prejudice as a result
of such failure.
|
(a)
|
issue
a news release reporting the
Closing;
|
(b)
|
file
a Form 8-K with the Securities and Exchange Commission disclosing the
terms of this Agreement with audited financial statements of Company as
well as any required pro forma financial information or other information
of Company and Purchaser as required by the rules and regulations of the
Securities and Exchange Commission;
and
|
(c)
|
file
with the Securities and Exchange Commission a report on Form 14f1
disclosing the change in control of Purchaser and, 10 days after such
filing, date the resolutions appointing to the board of directors of
Purchaser Maggie M. Moran and Kelvin D. Moore, and forthwith date and
accept the resignation of Mark DeFoor as a director of
Purchaser.
|
(a)
|
The
parties hereto hereby irrevocably submit to the non-exclusive jurisdiction
of any federal or state court located within the State of New York over
any dispute arising out of or relating to this Agreement or any of the
transactions contemplated hereby and each party hereby irrevocably agrees
that all claims in respect of such dispute or any suit, action proceeding
related thereto may be heard and determined in such courts. The
parties hereby irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the
laying of venue of any such dispute brought in such court or any defense
of inconvenient forum for the maintenance of such dispute. Each
of the parties hereto agrees that a judgment in any such dispute may be
enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
|
(b)
|
Each
of the parties hereto hereby consents to process being served by any party
to this Agreement in any suit, action or proceeding by the mailing of a
copy thereof in accordance with the provisions of Section
11.1.
|
/s/
Stephen S. Burns
|
/s/
John J. Kuntz
|
|||
Stephen
S. Burns
|
John
J. Kuntz
|
|||
|
|
|||
H. Kimberly Lukens, Trustee of the H. Kimberly Lukens Advanced Mechanical Products, Inc. Subchapter S. Trust | ||||
/s/
Mickey W. Kowitz
|
/s/
H. Kimberly Lukens
|
|||
Mickey
W. Kowitz
|
Name:
H. Kimberly Lukens
|
|||
|
Title:
Trustee
|
/s/
Gerald Wolken
|
/s/
Charles E. Allen, Jr.
|
|||
Gerald
Wolken
|
Charles
E. Allen, Jr.
|
|||
|
|
/s/
Thaddeus M. Bort, M.D.
|
/s/
Daniel Zito
|
|||
Thaddeus
M. Bort, M.D.
|
Daniel
Zito
|
|||
|
|
/s/
Thomas H. Siemers
|
/s/
James K. Phillips
|
|||
Thomas
H. Siemers
|
James
K. Phillips
|
|||
|
|
/s/
Buster Stewart
|
/s/
William L. Murphree
|
|||
Buster
Stewart
|
William
L. Murphree
|
|||
|
|
/s/
Mike Dektas
|
/s/
Anthony Milone
|
|||
Mike
Dektas
|
Anthony
Milone
|
|||
|
|
/s/
Gavin Scotti, Sr.
|
/s/
Tim Wieck
|
|||
Gavin
Scotti, Sr.
|
Tim
Wieck
|
|||
|
|
/s/
Richard East
|
|
|||
Richard
East
|
|
|||
|
|
Shares
|
Acquisition
Shares
|
|||||||
Stephen
S. Burns
|
2,500 | 324,398 | ||||||
John
J. Kuntz
|
1,485 | 192,692 | ||||||
Mickey
W. Kowitz
|
1,035 | 134,301 | ||||||
H.
Kimberly Lukens, Trustee of the H. Kimberly Lukens Advanced Mechanical
Products, Inc. Subchapter S. Trust
|
810 | 105,105 | ||||||
Gerald
Wolken
|
810 | 105,105 | ||||||
Charles
E. Allen, Jr.
|
705 | 91,480 | ||||||
Thaddeus
M. Bort
|
100 | 12,976 | ||||||
Daniel
Zito
|
50 | 6,488 | ||||||
Thomas
H. Siemers
|
100 | 12,976 | ||||||
James
K. Phillips
|
100 | 12,976 | ||||||
Buster
Stewart
|
100 | 12,976 | ||||||
William
L. Murphree
|
100 | 12,976 | ||||||
Mike
Dektas
|
100 | 12,976 | ||||||
Anthony
Milone
|
50 | 6,488 | ||||||
Gavin
Scotti
|
50 | 6,488 | ||||||
Tim
Wieck
|
51 | 6,618 | ||||||
Richard
East
|
51 | 6,618 | ||||||
8,197 | 1,063,636 |