STOCK PURCHASE AGREEMENT
MADE AS OF
NOVEMBER 5, 1998,
BETWEEN
SCOTT A. SCHUSTER,
BUYER,
AND
SCANLAN MUSIC, INC.
SELLER
TABLE OF CONTENTS
Page
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1. DEFINITIONS. 1
1.1. "APPLICABLE CONTRACT" 1
1.2. "BEST EFFORTS" 1
1.3. "BREACH" 1
1.4. "BUYER" 1
1.5. "CLOSING" 1
1.6. "CLOSING DATE" 1
1.7. "CONSENT" 2
1.8. "CONTEMPLATED TRANSACTIONS" 2
1.9. "CONTRACT" 2
1.10. "DAMAGES" 2
1.11. "DISCLOSURE SCHEDULE" 2
1.12. "ENCUMBRANCE" 2
1.13. "ENVIRONMENTAL REQUIREMENTS" 2
1.14. "ERISA" 2
1.15. "FACILITIES" 3
1.16. "GAAP" 3
1.17. "GOVERNMENTAL AUTHORIZATION" 3
1.18. "GOVERNMENTAL BODY" 3
1.19. "IRC" 3
1.20. "IRS" 3
1.21. "KNOWLEDGE" 3
1.22. "LEGAL REQUIREMENT" 4
1.23. "OPERATING INCOME" 4
1.24. "ORDER" 4
1.25. "ORDINARY COURSE OF BUSINESS" 4
1.26. "ORGANIZATIONAL DOCUMENTS" 4
1.27. "PERSON" 5
1.28. "PLAN" 5
1.29. "PROCEEDING" 5
1.30. "RELATED PERSON" 5
1.31. "REPRESENTATIVE" 6
1.32. "SECURITIES ACT" 6
1.33. "SELLER" 6
1.34. "SHARES" 6
1.35. "SUBSIDIARY" 6
1.36. "TAX RETURN" 6
1.37. "THREATENED" 6
2. TRANSFER OF SHARES; REIMBURSEMENT AMOUNT; CLOSING. 6
2.1. SHARES. 6
2.2. CLOSING. 6
2.3. CLOSING OBLIGATIONS. 7
3. REPRESENTATIONS AND WARRANTIES OF SELLER. 7
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3.1. ORGANIZATION AND GOOD STANDING. 7
3.2. AUTHORITY; NO CONFLICT. 8
3.3. CAPITALIZATION. 9
3.4. FINANCIAL STATEMENTS. 9
3.5. BOOKS AND RECORDS. 9
3.6. TITLE TO PROPERTIES; ENCUMBRANCES. 10
3.7. NO UNDISCLOSED LIABILITIES. 10
3.8. TAXES. 10
3.9. NO MATERIAL ADVERSE CHANGE. 11
3.10. EMPLOYEE BENEFITS MATTERS. 11
3.11. COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS. 12
3.12. LEGAL PROCEEDINGS; ORDERS. 13
3.13. ABSENCE OF CERTAIN CHANGES AND EVENTS. 14
3.14. CONTRACTS; NO DEFAULTS. 15
3.15. INSURANCE. 16
3.16. ENVIRONMENTAL MATTERS. 17
3.17. EMPLOYEE MATTERS. 17
3.18. INTELLECTUAL PROPERTY RIGHTS OF SELLER. 18
3.19. CERTAIN PAYMENTS. 18
3.20. DISCLOSURE. 18
3.21. BROKERS OR FINDERS. 18
3.22. FAIRNESS OPINION. 19
4. REPRESENTATIONS AND WARRANTIES OF BUYER. 19
4.1. ORGANIZATION AND GOOD STANDING. 19
4.2. AUTHORITY. 19
4.3. INVESTMENT INTENT. 19
4.4. CERTAIN PROCEEDINGS. 19
4.5. BROKERS OR FINDERS. 19
5. COVENANTS OF SELLER PRIOR TO CLOSING DATE. 19
5.1. ACCESS AND INVESTIGATION. 19
5.2. OPERATION OF THE BUSINESS OF SELLER. 20
5.3. NEGATIVE COVENANT. 20
5.4. REQUIRED APPROVALS. 20
5.5. NOTIFICATION. 20
5.6. NO NEGOTIATION. 21
5.7. CLOSING OF BANK ACCOUNTS. 21
6. COVENANTS OF BUYER PRIOR TO CLOSING DATE. 21
6.1. APPROVALS OF GOVERNMENTAL BODIES/THIRD PARTY CONSENTS. 21
7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE. 21
7.1. ACCURACY OF REPRESENTATIONS. 21
7.2. SELLER'S PERFORMANCE. 22
7.3. CONSENTS. 22
7.4. ADDITIONAL DOCUMENTS. 22
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7.5. NO PROCEEDINGS. 22
7.6. NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS. 22
7.7. NO PROHIBITION. 22
7.8. EMPLOYMENT AGREEMENT. 23
8. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE. 23
8.1. ACCURACY OF REPRESENTATIONS. 23
8.2. BUYER'S PERFORMANCE. 23
8.3. CONSENTS. 23
8.4. ADDITIONAL DOCUMENTS. 23
8.5. NO INJUNCTION. 23
9. TERMINATION. 23
9.1. TERMINATION EVENTS. 23
9.2. EFFECT OF TERMINATION. 24
10. INDEMNIFICATION; REMEDIES. 24
10.1. AGREEMENT BY SELLER TO INDEMNIFY. 24
10.2. AGREEMENTS BY BUYER TO INDEMNIFY. 25
10.3. MATTERS INVOLVING THIRD PARTIES. 26
11. POST-CLOSING AGREEMENTS. 27
11.1. CONSISTENCY IN REPORTING. 27
12. GENERAL PROVISIONS. 27
12.1. EXPENSES. 27
12.2. PUBLIC ANNOUNCEMENTS. 28
12.3. CONFIDENTIALITY. 28
12.4. NOTICES. 28
12.5. JURISDICTION; SERVICE OF PROCESS. 29
12.6. FURTHER ASSURANCES. 29
12.7. WAIVER. 29
12.8. ENTIRE AGREEMENT AND MODIFICATION. 30
12.9. DISCLOSURE SCHEDULE. 30
12.10. ASSIGNMENTS, SUCCESSORS AND NO THIRD-PARTY RIGHTS. 30
12.11. SEVERABILITY. 30
12.12. SECTION HEADINGS; CONSTRUCTION. 31
12.13. TIME OF ESSENCE. 31
12.14. GOVERNING LAW. 31
12.15. COUNTERPARTS. 31
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made as of November 5,
1998, by Scott Schuster, an individual, ("Buyer"), and Scanlan Music, Inc., a
Michigan company ("Seller").
RECITALS:
Seller desire to sell, and Buyer desires to purchase, all of the issued
and outstanding shares (the "Shares") of capital stock of Seller, for the
consideration and on the terms set forth in this Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS.
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1.:
1.1. "Applicable Contract" - any Contract (i) under which Seller has or
may acquire any rights; (ii) under which Seller has or may become subject to
any obligation or liability or (iii) by which Seller or any of the assets owned
or used by it is or may become bound.
1.2. "Best Efforts" - the efforts that a prudent Person desirous of
achieving a result would reasonably use in similar circumstances to ensure that
such result is achieved as expeditiously as possible; provided, however, that an
obligation to use Best Efforts under this Agreement does not require the Person
subject to that obligation to take actions that would result in a materially
adverse change in the benefits to such Person of this Agreement and the
Contemplated Transactions.
1.3. "Breach" - a "Breach" of a representation, warranty, covenant,
obligation, or other provision of this Agreement or any instrument delivered
pursuant to this Agreement will be deemed to have occurred if there is or has
been (i) any inaccuracy in or breach of, or any failure to perform or comply
with, such representation, warranty, covenant, obligation, or other provision or
(ii) any claim (by any Person) or other occurrence or circumstance that is or
was inconsistent with such representation, warranty, covenant, obligation, or
other provision, and the term "Breach" means any such inaccuracy, breach,
failure, claim, occurrence or circumstance.
1.4. "Buyer" - as defined in the first paragraph of this Agreement.
1.5. "Closing" - as defined in Section 2.4.
1.6. "Closing Date" - the date and time as of which the Closing actually
takes place.
1.7. "Consent" - any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
1.8. "Contemplated Transactions" - all of the transactions contemplated by
this Agreement, including:
A. The transfer of the Shares by Seller to Buyer;
B. The execution, delivery, and performance of the Closing Obligations set
forth in Section 2.5;
C. The performance by Buyer and Seller of their respective covenants and
obligations under this Agreement;
D. Buyer's acquisition and ownership of the Shares and exercise of control
over the Seller; and
E. The transfer of Buyer's Stock to Seller; and
F. Payment by Buyer to Seller of the Reimbursement Amount.
1.9. "Contract" - any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied) that is
legally binding.
1.10. "Damages" - any loss, liability, claim, damages (including, without
limitation, incidental and consequential damages), expense (including, without
limitation, costs of investigation and defense and reasonable attorneys' fees)
or diminution of value, whether or not involving a third party.
1.11. "Disclosure Schedule" - the disclosure schedule delivered by Seller
to Buyer concurrently with the execution and delivery of this Agreement.
1.12. "Encumbrance" - any charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right of
first refusal, or restriction of any kind, including any restriction on use,
voting, transfer, receipt of income, or exercise of any other attribute of
ownership.
1.13. "Environmental Requirements" - means federal, state and local laws
relating to pollution or protection of the environment, including laws or
provisions relating to emissions, discharges, releases or threatened releases of
pollutants, contaminants, or hazardous or toxic materials, substances, or wastes
into air, surface water, groundwater, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants or hazardous or toxic
materials, substances, or wastes.
1.14. "ERISA" - the Employee Retirement Income Security Act of 1974 or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law.
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1.15. "Facilities" - any real property, leaseholds, or other interests
currently or formerly owned or operated by Seller and any buildings, plants,
structures, or equipment (including motor vehicles) currently or formerly owned
or operated by Seller.
1.16. "GAAP" - generally accepted United States accounting principles,
applied on a basis consistent with the basis on which the financial statements
referred to in Section 3.4. were prepared.
1.17. "Governmental Authorization" - any approval, consent, license,
permit, waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement.
1.18. "Governmental Body" - any:
A. Nation, state, county, city, town, village, district, or other
jurisdiction of any nature;
B. Federal, state, local, municipal, foreign, or other government;
C. Governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity and
any court or other tribunal);
D. Multi-national organization or body; or
E. Body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority or
power of any nature.
1.19. "IRC" - the Internal Revenue Code of 1986 or any successor law, and
regulations issued by the IRS pursuant to the Internal Revenue Code or any
successor law.
1.20. "IRS" - the United States Internal Revenue Service or any successor
agency, and, to the extent relevant, the United States Department of the
Treasury.
1.21. "Knowledge" - an individual will be deemed to have "Knowledge" of a
particular fact or other matter if:
A. Such individual is actually aware of such fact or other matter; or
B. A prudent individual given his position with Seller could be expected
to discover or otherwise become aware of such fact or other matter.
C. A Person (other than an individual) will be deemed to have "Knowledge"
of a particular fact or other matter if any individual who is serving, or who
has at any time served, as a director, officer within the last five (5) years,
partner, executor, or trustee of such Person (or in any similar capacity) has,
or at any time had, Knowledge of such fact or other matter.
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1.22. "Legal Requirement" - any federal, state, local, municipal, foreign,
international, multinational, or other administrative order, constitution, law,
ordinance, principle of common law, regulation, statute, or treaty.
1.23. "Operating Income" - means the net income of Seller determined in
accordance with GAAP before income taxes and after all other charges except:
A. Unless otherwise approved by Buyer, any general and administrative
expense (i.e., allocation of Seller's general corporate overhead) attributable
to the Seller and all subsidiaries of Seller that is not directly related to the
operation of Seller in the Ordinary Course of Business; provided, however,
Operating Income shall include reimbursement by Seller of expenses at a fair
market price mutually agreed to by Buyer and Seller for expenses previously
incurred by Seller, but that have for administrative convenience or efficiency
reasons been centralized with Buyer; and
B. Any amortization of goodwill of Seller and all Subsidiaries of Seller.
C. In the event that certain expenses incurred by the Seller are for the
principal or partial benefit of Seller or other subsidiaries of Seller, then the
parties hereto shall endeavor to track and determine in a fair and equitable
manner that portion of such expenses that should fairly and reasonably be
allocated to Seller or such other subsidiaries of Seller, and therefore not
included in arriving at Operating Income for purposes of this Agreement.
1.24. "Order" - any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
1.25. "Ordinary Course of Business" - an action taken by a Person will be
deemed to have been taken in the "Ordinary Course of Business" only if:
A. Such action is consistent with the past practices of such Person and is
taken in the ordinary course of the normal day-to-day operations of such Person;
B. Such action is not required to be authorized by the board of directors
of such Person (or by any Person or group of Persons exercising similar
authority); and
C. Such action is similar in nature and magnitude to actions customarily
taken, without any authorization by the board of directors (or by any Person or
group of Persons exercising similar authority), in the ordinary course of the
normal day-to-day operations of other Persons that are in the same line of
business as such Person.
1.26. "Organizational Documents" - (i) the Articles or Certificate of
Incorporation and the Bylaws of a corporation; (ii) any charter or similar
document adopted or filed in connection with the creation, formation, or
organization of a Person and (iii) any amendment to any of the foregoing.
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1.27. "Person" - any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other entity
or Governmental Body.
1.28. "Plan" - as defined in Section 3.10.1.
1.29. "Proceeding" - any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal, administrative,
investigative, or informal) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Body or arbitrator.
1.30. "Related Person" - with respect to a particular individual:
A. Each other member of such individual's Family;
B. Any Person that is directly or indirectly controlled by such individual
or one (1) or more members of such individual's Family;
C. Any Person in which such individual or members of such individual's
Family hold (individually or in the aggregate) a Material Interest; and
D. Any Person with respect to which such individual or one (1) or more
members of such individual's Family serves as a director, officer, partner,
executor, or trustee (or in a similar capacity).
With respect to a specified Person other than an individual:
A. Any Person that directly or indirectly controls, is directly or
indirectly controlled by, or is directly or indirectly under common control with
such specified Person;
B. Any Person that holds a Material Interest in such specified Person;
C. Each Person that serves as a director, officer, partner, executor, or
trustee of such specified Person (or in a similar capacity);
D. Any Person in which such specified Person holds a Material Interest;
E. Any Person with respect to which such specified Person serves as a
general partner or a trustee (or in a similar capacity); and
Any Related Person of any individual described in clause B. or C.
For purposes of this definition, (i) the "Family" of an individual
includes (1) the individual; (2) the individual's spouse and former spouses; (3)
any other natural person who is related to the individual or the individual's
spouse within the second degree and (4) any other natural person who resides
with such individual and (2) "Material Interest" means direct or indirect
beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of voting securities or other voting interests representing at least
[five percent (5%)] of the
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outstanding voting power of a Person or equity securities or other equity
interests representing at least [five percent (5%)] of the outstanding equity
securities or equity interests in a Person.
1.31. "Representative" - with respect to a particular Person, any
director, officer, employee, agent, consultant, advisor, or other representative
of such Person, including legal counsel, accountants, and financial advisors.
1.32. "Securities Act" - the Securities Act of 1933 or any successor law,
and regulations and rules issued pursuant to that Act or any successor law.
1.33. "Seller" - as defined in the first paragraph of this Agreement.
1.34. "Shares" - as defined in the Recitals of this Agreement.
1.35. "Subsidiary" - with respect to any Person (the "Owner"), any
corporation or other Person of which securities or other interests having the
power to elect a majority of that corporation's or other Person's board of
directors or similar governing body, or otherwise having the power to direct the
business and policies of that corporation or other Person (other than securities
or other interests having such power only upon the happening of a contingency
that has not occurred) are held by the Owner or one (1) or more of its
Subsidiaries; [when used without reference to a particular Person, "Subsidiary"
means a Subsidiary of Seller].
1.36. "Tax Return" - any return (including any information return),
report, statement, schedule, notice, form, or other document or information
filed with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection,
or payment of any Tax or in connection with the administration, implementation,
or enforcement of or compliance with any Legal Requirement relating to any Tax.
1.37. "Threatened" - a claim, Proceeding, dispute, action, or other matter
will be deemed to have been "Threatened" if any demand or statement has been
made (orally or in writing) or any notice has been given (orally or in writing),
or if any other event has occurred or any other circumstances exist, that would
lead a prudent Person to conclude that such a claim, Proceeding, dispute,
action, or other matter is likely to be asserted, commenced, taken, or otherwise
pursued in the future.
2. TRANSFER OF SHARES; REIMBURSEMENT AMOUNT; CLOSING.
2.1. Shares. In exchange for the execution of a Promissory Note, as set
forth in Section 2.2, and subject to the terms and conditions of this Agreement,
at the Closing, Seller will transfer the Shares of Seller to Buyer.
2.2. Closing. The purchase and sale (the "Closing") provided for in this
Agreement will take place at the offices of Morris, Manning & Martin, L.L.P., at
1600 Atlanta Financial Center, 3343 Peachtree Road, N.E., Atlanta, Georgia
30326, at 10:00 a.m. (local time) on November 15, 1998, or at such other time
and place as the parties may agree. Except as otherwise provided in Section 9.,
failure to consummate the purchase and sale provided for in
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this Agreement on the date and time and at the place determined pursuant to this
Section 2.3. will not result in the termination of this Agreement and will not
relieve any party of any obligation under this Agreement.
2.3. Closing Obligations. At the Closing:
A. Seller will deliver to Buyer:
(i) Certificates. Certificates representing the Shares, duly
endorsed (or accompanied by duly executed stock powers) for transfer to Buyer;
(ii) Good Standing Certificate. Seller shall have delivered to
Buyer a certificate evidencing the good standing of Seller as of a recent
practicable date;
(iii) Certificate. A certificate substantially in the form of
Exhibit B hereto, executed by Seller representing and warranting to Buyer that
each of Seller's representations and warranties in this Agreement was accurate
in all respects as of the date of this Agreement and is accurate in all respects
as of the Closing Date as if made on the Closing Date (giving full effect to any
supplements to the Disclosure Schedule that were delivered by Seller to Buyer
prior to the Closing Date in accordance with Section 5.5.); and
(v) Mutual Release. Seller shall have delivered to Buyer a
mutual release, executed by Seller, substantially in the form of Exhibit C
B. Buyer will deliver to Seller:
(i) Note. A Promissory Note in an amount equal to thirty five
thousand dollars ($35,000.00), due on the first date each month. The monthly
payment of said note shall be in the amount of Two Thousand Nine Hundred Sixteen
& 66/100 Dollars ($2,916.66).
(ii) Certificate. A certificate in the form of Exhibit D
hereto executed by Buyer to the effect that, except as otherwise stated in such
certificate, each of Buyer's representations and warranties in this Agreement
was accurate in all respects as of the date of this Agreement and is accurate in
all respects as of the Closing Date as if made on the Closing Date; and
(iii) Mutual Release. Buyer shall have delivered to Seller a
Mutual Release, executed by Buyer, substantially in the form of Exhibit C.
3. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller represents and warrants to Buyer as follows:
3.1. Organization and Good Standing.
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A. Schedule 3.1 of the Disclosure Schedule contains a complete and
accurate list of Seller's name, its jurisdiction of incorporation, other
jurisdictions in which it is authorized to do business, and its capitalization
(including the identity of each stockholder and the number of shares held by
each).
Seller is a corporation duly organized, validly existing, and in
good standing under the laws of Michigan, with full corporate power and
authority to conduct its business as it is now being conducted, to own or use
the properties and assets that it purports to own or use, and to perform all its
obligations under Applicable Contracts.
B. Seller has delivered to Buyer copies of the Organizational
Documents of Seller, as currently in effect.
3.2. Authority; No Conflict.
A. This Agreement constitutes the legal, valid, and binding
obligation of Seller, enforceable against Seller in accordance with its terms.
Upon the execution and delivery by Seller of the closing documents set forth in
Section 2.4A (collectively, the "Seller's Closing Documents"), the Seller's
Closing Documents will constitute the legal, valid, and binding obligations of
Seller, enforceable against Seller in accordance with their respective terms.
Seller has the absolute and unrestricted right, power, authority,
and capacity to execute and deliver this Agreement and the Seller's Closing
Documents and to perform his obligations under this Agreement and the Seller's
Closing Documents.
B. Except as set forth in Schedule 3.2 of the Disclosure Schedule,
neither the execution and delivery of this Agreement nor the consummation or
performance of any of the Contemplated Transactions will, directly or indirectly
(with or without notice or lapse of time):
(i) Contravene, conflict with, or result in a violation of (1)
any provision of the Organizational Documents of Seller or (2) any resolution
adopted by the board of directors or the stockholders of Seller;
(ii) Contravene, conflict with, or result in a violation of,
or give any Governmental Body or other Person the right to challenge any of the
Contemplated Transactions or to exercise any remedy or obtain any relief under,
any Legal Requirement or any Order to which Seller or Seller, or any of the
assets owned or used by Seller, may be subject;
(iii) Contravene, conflict with, or result in a violation of
any of the terms or requirements of, or give any Governmental Body the right to
revoke, withdraw, suspend, cancel, terminate, or modify, any Governmental
Authorization that is held by Seller or that otherwise relates to the business
of, or any of the assets owned or used by, Seller;
(iv) Cause Buyer or Seller to become subject to, or to become
liable for the payment of, any Tax;
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(v) Cause any of the assets owned by Seller to be reassessed
or revalued by any taxing authority or other Governmental Body;
(vi) Contravene, conflict with, or result in a violation or
breach of any provision of, or give any Person the right to declare a default or
exercise any remedy under, or to accelerate the maturity or performance of, or
to cancel, terminate, or modify, any Applicable Contract; or
(vii) Result in the imposition or creation of any Encumbrance
upon or with respect to any of the assets owned or used by Seller.
Except as set forth in Schedule 3.2 of the Disclosure Schedule, Seller nor
Seller is or will be required to give any notice to or obtain any Consent from
any Person in connection with the execution and delivery of this Agreement or
the consummation or performance of any of the Contemplated Transactions.
3.3. Capitalization. The authorized equity securities of Seller consist of
50,000 shares of common stock, $1.00 par value per share, of which 50,000 shares
are issued and outstanding and constitute the Shares.
Seller is and will be on the Closing Date the record and beneficial owners
and holders of the Shares, free and clear of all Encumbrances.
With the exception of the Shares (which are owned by Seller), all of the
outstanding equity securities and other securities of Seller are owned of record
and beneficially by Seller, free and clear of all Encumbrances. No legend or
other reference to any purported Encumbrance appears upon any certificate
representing equity securities of Seller.
All of the outstanding equity securities of Seller have been duly
authorized and validly issued and are fully paid and nonassessable. There are no
Contracts relating to the issuance, sale, or transfer of any equity securities
or other securities of Seller, including, but not limited to, stock options,
warrants, convertible securities, redemption rights, registration rights and the
like.
None of the outstanding equity securities or other securities of Seller
was issued in violation of the Securities Act or any other Legal Requirement.
Seller does not own, nor does it have any Contract to acquire, any equity
securities or other securities of any Person (other than Seller) or any direct
or indirect equity or ownership interest in any other business.
3.4. Financial Statements. Seller has delivered to Buyer, as set forth on
Schedule 3.4:
A. In lieu of finanical statements of the Seller, Buyer shall accept tax
returns for fiscal year end June 30, 1998.
3.5. Books and Records. The books of account, minute books, stock record
books, and other records of Seller, all of which have been made available to
Buyer, are complete and correct and have been maintained in accordance with
sound business practices.
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The minute books of Seller contain accurate and complete records of all
meetings held of, and corporate action taken by, the stockholders, the Boards of
Directors, and committees of the Boards of Directors of Seller, and no meeting
of any such stockholders, Board of Directors, or committee has been held for and
no material action has been taken at any meeting for which minutes have not been
prepared and are not contained in such minute books. At the Closing, all of
those books and records will be in the possession of Seller.
3.6. Title to Properties; Encumbrances. Seller owns (with good and
marketable title in the case of real property, subject only to the Encumbrances
permitted by this Section) all the properties and assets (whether real,
personal, or mixed and whether tangible or intangible) that they purport to own
located in the facilities owned or operated by Seller or reflected as owned in
the books and records of Seller, including all of the properties and assets
reflected in the Closing Date Financial Statements (except for assets held under
capitalized leases disclosed or not required to be disclosed in Schedule 3.6 of
the Disclosure Schedule).
A. Mortgage is current and not in default
B. Liens for current taxes not yet due; and
C. With respect to real property:
(i) Minor imperfections of title, if any, none of which is
substantial in amount, materially detracts from the value or impairs the use of
the property subject thereto, or impairs the operations of Seller; and
(ii) Zoning laws and other land use restrictions that do not
impair the present or anticipated use of the property subject thereto.
All property and assets of the Seller shall be in the possession and
control of Seller at Closing, including but not limited to, all Facilities owned
and not leased.
3.7. No Undisclosed Liabilities. Except as set forth in Schedule 3.7 of
the Disclosure Schedule, Seller has no liabilities or obligations of any nature
(whether known or unknown and whether absolute, accrued, contingent, or
otherwise) except for liabilities or obligations reflected or reserved against
in the Closing Date Financial Statements and current liabilities incurred in the
Ordinary Course of Business since the respective dates thereof.
3.8. Taxes. Except as set forth on Schedule 3.8 to the Disclosure
Schedule, Seller has timely filed all tax returns and reports required to be
filed by it, including, without limitation, all federal, state and local tax
returns, and has paid in full or made adequate provision by the establishment of
reserves for all taxes and other charges which have become due or which are
attributable to the conduct of Seller's business prior to Closing. Seller will
continue to make adequate provision for all such taxes and other charges for all
periods through the Closing Date.
Except as set forth on Schedule 3.8 to the Disclosure Schedule, Seller
have no Knowledge of any tax deficiency proposed or threatened against Seller.
There are no tax liens upon any property or assets of Seller.
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Except as set forth on Schedule 3.8 to the Disclosure Schedule, Seller has
made all payments of estimated taxes when due in amounts sufficient to avoid the
imposition of any penalty.
Except as set forth on Schedule 3.8 to the Disclosure Schedule, all taxes
and other assessments and levies which Seller was required by law to withhold or
to collect have been duly withheld and collected, and have been paid over to the
proper governmental entity.
Except as set forth in Schedule 3.8 to the Disclosure Schedule, the
federal and state income tax returns and local returns, if any, of Seller have
never been audited by the income tax authorities, nor are any such audits in
process. Except as set forth in Schedule 3.8, to the Disclosure Schedule there
are no outstanding agreements or waivers extending the statute of limitations
applicable to any federal or state income tax returns of Seller for any period.
3.9. No Material Adverse Change. Since December 27, 1993, there has not
been any material adverse change in the business, operations, properties,
prospects, assets, or condition of Seller, and no event has occurred or
circumstance exists that may result in such a material adverse change.
3.10. Employee Benefits Matters.
3.10.1 Schedule 3.10.1 lists all plans, programs, and similar
agreements, commitments or arrangements, whether oral or written, maintained by
or on behalf of Seller or any other party that provide benefits or compensation
to, or for the benefit of, current or former employees of Seller ("Plan" or
"Plans"). Except as set forth on Schedule 3.10.1 to the Disclosure Schedule only
current and former employees of Seller participate in the Plans. Copies of all
Plans and, to the extent applicable, all related trust agreements, actuarial
reports, and valuations for the most recent year, all summary plan descriptions,
prospectuses, Annual Report Form 5500s or similar forms (and attachments
thereto) for the most recent year, all Internal Revenue Service determination
letters, and any related documents requested by Buyer, including all amendments,
modifications and supplements thereto, have been delivered to Buyer, and all of
the same are or will be true, correct and complete.
3.10.2 With respect to each Plan to the extent applicable:
A. No litigation or administrative or other proceeding is
pending or threatened involving such Plan;
B. To the Knowledge of Seller, such Plan has been administered
and operated in substantial compliance with, and has been amended to comply with
all applicable laws, rules, and regulations, including, without limitation,
ERISA, the Internal Revenue Code, and the regulations issued under ERISA and the
Internal Revenue Code;
C. Seller and its predecessors, if any, have made and as of
the Closing Date will have made or accrued, all payments and contributions
required, or reasonably expected to be required, to be made under the provisions
of such Plan or required to be made under
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applicable laws, rules and regulations, with respect to any period following,
such amounts to be determined using the ongoing actuarial and funding
assumptions of the Plan;
D. Such Plan is fully funded in an amount sufficient to pay
all liabilities accrued (including liabilities and obligations for health care,
life insurance and other benefits after termination of employment) and claims
incurred to the date hereof;
E. On the Closing Date such Plan will be fully funded in an
amount sufficient to pay all liabilities accrued (including liabilities and
obligations for health care, life insurance and other benefits after termination
of employment) and claims incurred to the Closing Date, or adequate reserves
will be set up on Seller's books and records, or paid-up insurance will be
provided, therefor; and
F. Such Plan has been administrated and operated only in the
ordinary and usual course and in accordance with its terms, and there has not
been in the year prior hereto any increase in the liabilities of such Plan
beyond increases typically experienced by employers similar to Seller.
3.11. Compliance With Legal Requirements; Governmental Authorizations.
A. Except as set forth in Schedule 3.11 of the Disclosure Schedule:
(i) Seller is, and at all times since December 27, 1993, has
been, in full compliance with each Legal Requirement that is or was applicable
to it or to the conduct or operation of its business or the ownership or use of
any of its assets;
(ii) No event has occurred or circumstance exists that (with
or without notice or lapse of time) (1) may constitute or result in a violation
by Seller of, or a failure on the part of Seller to comply with, any Legal
Requirement or (2) may give rise to any obligation on the part of Seller to
undertake, or to bear all or any portion of the cost of, any remedial action of
any nature; and
(iii) Seller has not received, at any time since December 27,
1993, any notice or other communication (whether oral or written) from any
Governmental Body or any other Person regarding (1) any actual, alleged,
possible, or potential violation of, or failure to comply with, any Legal
Requirement or (2) any actual, alleged, possible, or potential obligation on the
part of Seller to undertake, or to bear all or any portion of the cost of, any
remedial action of any nature.
B. Schedule 3.11 Except as set forth in Schedule 3.11 of the
Disclosure Schedule:
(i) Seller is, and at all times since December 27, 1993, has
been, in full compliance with all of the terms and requirements of any
applicable Governmental Authorization;
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(ii) No event has occurred or circumstance exists that may
(with or without notice or lapse of time) (1) constitute or result directly or
indirectly in a violation of or a failure to comply with any tern or requirement
of any applicable Governmental Authorization or (2) result directly or
indirectly in the revocation, withdrawal, suspension, cancellation, or
termination of, or any modification to, any applicable Governmental
Authorization;
(iii) Seller has not received, at any time since December 27,
1993, any notice or other communication (whether oral or written) from any
Governmental Body or any other Person regarding (1) any actual, alleged,
possible, or potential violation of or failure to comply with any term or
requirement of any Governmental Authorization or (2) any actual, proposed,
possible, or potential revocation, withdrawal, suspension, cancellation,
termination of, or modification to any Governmental Authorization; and
(iv) All applications required to have been filed for the
renewal of the Governmental Authorizations have been duly filed on a timely
basis with the appropriate Governmental Bodies, and all other filings required
to have been made with respect to such Governmental Authorizations have been
duly made on a timely basis with the appropriate Governmental Bodies.
The Seller has obtained any Governmental Authorizations necessary to
permit Seller to lawfully conduct and operate their businesses in the manner
they currently conduct and operate such businesses and to permit Seller to own
and use their assets in the manner in which they currently own and use such
assets.
3.12. Legal Proceedings; Orders.
A. Except as set forth in Schedule 3.12 of the Disclosure Schedule,
there is no pending Proceeding:
(i) That has been commenced by or against Seller or that
otherwise relates to or may affect the business of, or any of the assets owned
or used by, Seller; or
(ii) That challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions.
To the Knowledge of Seller, (i) no such Proceeding has been Threatened and
(ii) no event has occurred or circumstance exists that may give rise to or serve
as a basis for the commencement of any such Proceeding. Seller have delivered to
Buyer copies of all pleadings, correspondence, and other documents relating to
each Proceeding listed in Schedule 3.12 of the Disclosure Schedule. The
Proceedings listed in Schedule 3.12 of the Disclosure Schedule will not have a
material adverse effect on the business, operations, assets, condition, or
prospects of Seller.
B. Except as set forth in Schedule 3.12 of the Disclosure Schedule:
(i) There is no Order to which any of Seller, or any of the
assets owned or used by Seller, is subject;
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(ii) Seller is not subject to any Order that relates to the
business of, or any of the assets owned or used by, Seller; and
(iii) No officer, director, agent, or employee of Seller is
subject to any Order that prohibits such officer, director, agent, or employee
from engaging in or continuing any conduct, activity, or practice relating to
the business of Seller.
C. Except as set forth in Schedule 3.12 of the Disclosure Schedule:
(i) Seller is, and at all times since December 27, 1993, has
been, in full compliance with all of the terms and requirements of each Order to
which it, or any of the assets owned or used by it, is or has been subject;
(ii) No event has occurred or circumstance exists that may
constitute or result in (with or without notice or lapse of time) a violation of
or failure to comply with any term or requirement of any Order to which Seller,
or any of the assets owned or used by Seller, is subject; and
(iii) Seller has not received, at any time since December 27,
1993, any notice or other communication (whether oral or written) from any
Governmental Body or any other Person regarding any actual, alleged, possible,
or potential violation of, or failure to comply with, any term or requirement of
any Order to which Seller, or any of the assets owned or used by Seller, is or
has been subject.
3.13. Absence of Certain Changes and Events. Except as set forth in
Schedule 3.13 of the Disclosure Schedule, since December 27, 1993, Seller has
conducted its business only in the Ordinary Course of Business and there has not
been any:
A. Change in Seller's authorized or issued capital stock; grant of
any stock option or right to purchase shares of capital stock of Seller;
issuance of any security convertible into such capital stock; grant of any
registration rights; purchase, redemption, retirement, or other acquisition by
Seller of any shares of any such capital stock; or declaration or payment of any
dividend or other distribution or payment in respect of shares of capital stock;
B. Amendment to the Organizational Documents of Seller;
C. Payment or increase by Seller of any bonuses, salaries, or other
compensation to any stockholder, director, officer, or (except in the Ordinary
Course of Business) employee or entry into any employment, severance, or similar
Contract with any director, officer, or employee;
D. Adoption of, or increase in the payments to or benefits under,
any profit sharing, bonus, deferred compensation, savings, insurance, pension,
retirement, or other employee benefit plan for or with any employees of Seller;
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E. Damage to or destruction or loss of any asset or property of
Seller, whether or not covered by insurance, materially and adversely affecting
the properties, assets, business, financial condition, or prospects of Seller,
taken as a whole;
F. Entry into, termination of, or receipt of notice of termination
of (i) any license, distributorship, dealer, sales representative, joint
venture, credit, or similar agreement or (ii) any Contract or transaction
involving a total remaining commitment by or to Seller of at least Five Thousand
and No/l00 Dollars ($5,000.00);
G. Sale (other than sales of inventory in the Ordinary Course of
Business), lease, or other disposition of any asset or property of Seller or
mortgage, pledge, or imposition of any lien or other encumbrance on any material
asset or property of Seller, including the sale, lease, or other disposition of
any of the Software and Intangibles;
H. Cancellation or waiver of any claims or rights with a value to
Seller in excess of Five Thousand and No/100 Dollars ($5,000.00);
I. Material change in the accounting methods used by Seller; or
J. Agreement, whether oral or written, by Seller to do any of the
foregoing.
3.14. Contracts; No Defaults.
A. Except as set forth in Schedule 3.17(A) of the Disclosure
Schedule:
(i) Seller (and no Related Person of Seller) has not or may
not acquire any rights under, and Seller has not or may not become subject to
any obligation or liability under, any Contract that relates to the business of,
or any of the assets owned or used by, Seller; and
(ii) To the Knowledge of Seller, no officer, director, agent,
employee, consultant, or contractor of Seller is bound by any Contract that
purports to limit the ability of such officer, director, agent, employee,
consultant, or contractor to (1) engage in or continue any conduct, activity, or
practice relating to the business of Seller or (2) assign to Seller or to any
other Person any rights to any invention, improvement, or discovery.
B. Except as set forth in Schedule 3.17(B) of the Disclosure
Schedule, each material Contract is in full force and effect and is valid and
enforceable in accordance with its terms.
C. Except as set forth in Schedule 3.17(C) of the Disclosure
Schedule:
(i) Seller is, and at all times since December 27, 1993, has
been, in full compliance with all applicable terms and requirements of each
Contract under which such Seller has or had any obligation or liability or by
which such Seller or any of the assets owned or used by such Seller is or was
bound;
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(ii) Each other Person that has or had any obligation or
liability under any Contract under which Seller has or had any rights is, and at
all times since December 27, 1993, has been, in full compliance with all
applicable terms and requirements of such Contract;
(iii) No event has occurred or circumstance exists that (with
or without notice or lapse of time) may contravene, conflict with, or result in
a violation or breach of, or give Seller or other Person the right to declare a
default or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, any Applicable Contract; and
(iv) Seller has not given to or received from any other
Person, at any time since December 27, 1993, any notice or other communication
(whether oral or written) regarding any actual, alleged, possible, or potential
violation or breach of, or default under, any Contract.
F. There are no renegotiations of, attempts to renegotiate, or
outstanding rights to renegotiate any material amounts paid or payable to Seller
under current or completed Contracts with any Person and no such Person has made
written demand for such renegotiation.
G. The Contracts relating to the sale, design, manufacture, or
provision of products or services by Seller have been entered into in the
Ordinary Course of Business and have been entered into without the commission of
any act alone or in concert with any other Person, or any consideration having
been paid or promised, that is or would be in violation of any Legal
Requirement.
3.15. Insurance.
A. Seller have delivered to Buyer:
(i) True and complete copies of all policies of insurance to
which Seller is a party or under which Seller, or any director of Seller, is or
has been covered at any time within the two (2) years preceding the date of this
Agreement;
(ii) True and complete copies of all pending applications for
policies of insurance; and
(iii) Any statement by the auditor of Seller's financial
statements with regard to the adequacy of such entity's coverage or of the
reserves for claims.
B. Except as set forth on Schedule 3.15(B) of the Disclosure
Schedule:
(i) All policies to which Seller is a party or that provide
coverage to Seller, Seller, or any director or officer of an Seller:
(1) Are valid, outstanding, and enforceable;
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(2) Taken together in the reasonable judgment of Seller,
provide adequate insurance coverage for the assets and the operations of Seller
for all risks to which Seller are normally exposed;
(3) Are sufficient for compliance with all Legal
Requirements and Contracts to which Seller is a party or by which it is bound;
(4) Will continue in full force and effect following the
consummation of the Contemplated Transactions; and
(5) Do not provide for any retrospective premium
adjustment or other experienced-based liability on the part of Seller.
(ii) Neither Seller nor Seller has received (1) any refusal of
coverage or any notice that a defense will be afforded with reservation of
rights or (2) any notice of cancellation or any other indication that any
insurance policy is no longer in full force or effect or will not be renewed or
that the issuer of any policy is not willing or able to perform its obligations
thereunder.
(iii) Seller has paid all premiums due, and have otherwise
performed all of their respective obligations, under each policy to which Seller
is a party or that provides coverage to Seller or director thereof.
(iv) Seller has given notice to the insurer of all claims that
may be insured thereby.
3.16. Environmental Matters. Except as set forth in Schedule 3.16 of the
Disclosure Schedule, at all times since December 27, 1993, Seller has obtained
and is in compliance with all permits, licenses and other authorizations
required to do business by Environmental Requirements. To each Seller's
Knowledge, there are no conditions, circumstances, activities, practices,
incidents, or actions (collectively, "Conditions") resulting from the conduct of
its business which Conditions may reasonably form the basis of any claim or suit
against Seller based on or related to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling by Seller, or the
emission, discharge, release or threatened release by Seller into the
environment, of any pollutant, contaminant, or hazardous or toxic materials,
substances or wastes.
3.17. Employee Matters.
Except as set forth on Schedule 3.17, at all times since December 27,
1993, Seller has complied in all respects with all Legal Requirements relating
to employment, equal employment opportunity, nondiscrimination, immigration,
wages, hours, benefits, collective bargaining, the payment of social security
and similar taxes, occupational safety and health and plant closing.
Except as set forth on Schedule 3.17, Seller is not liable for the payment
of any compensation, Damages, taxes, fines, penalties. or other amounts,
however, designated, for failure to comply with any of the foregoing Legal
Requirements.
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3.18. Intellectual Property Rights of Seller.
A. Seller does not hold any trademarks, patents, copyrights or other
intellectual property.
B. Ownership and Right to License.
(i) Seller warrants that the name Scanlan Music, Inc., was
purchased from Jim Victor in December, 1993, and Seller further warrants that no
encomerbrances or disputes exist with regard to the rights of ownership, use, or
right to license said name.
3.19. Certain Payments. Since December 27, 1993,, neither Seller nor any
director, officer, agent, or employee of Seller, nor to Seller's Knowledge any
other Person associated with or acting for or on behalf of Seller, has directly
or indirectly:
A. Made any contribution, gift, bribe, rebate, payoff, influence
payment, kickback, or other payment to any Person, private or public, regardless
of form, whether in money, property, or services (i) to obtain favorable
treatment in securing business; (ii) to pay for favorable treatment for business
secured; (iii) to obtain special concessions or for special concessions already
obtained, for or in respect of Seller or any affiliate of Seller or (iv) in
violation of any Legal Requirement.
B. Established or maintained any fund or asset that has not been
recorded in the books and records of Seller.
3.20. Disclosure,
A. No representation or warranty of Seller in this Agreement and no
statement in the Disclosure Schedule omits to state a material fact necessary to
make the statements herein or therein, in light of the circumstances in which
they were made, not misleading.
B. No notice given pursuant to Section 5.5. will contain any untrue
statement or omit to state a material fact necessary to make the statements
therein or in this Agreement, in light of the circumstances in which they were
made, not misleading.
C. There is no fact known to Seller that has specific application to
Seller or Seller (other than general economic or industry conditions) and that
materially adversely affects or, as far as Seller can reasonably foresee,
materially threatens, the assets, business, prospects, financial condition, or
results of operations of Seller (on a consolidated basis) that has not been set
forth in this Agreement or the Disclosure Schedule.
3.21. Brokers or Finders. Seller and its agents have incurred no
obligation or liability, contingent or otherwise, for brokerage or finders' fees
or agents' commissions or other similar payment in connection with this
Agreement.
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3.22. Fairness Opinion. Buyer waives the request for a fairness opinion
from Seller's counsel.
4. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents and warrants to Seller as follows:
4.1. Organization and Good Standing. Buyer is an individual.
4.2. Authority. This Agreement constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
Upon the execution and delivery by Buyer of the closing documents set forth in
Section 2.5.B (collectively, the "Buyer's Closing Documents"), the Buyer's
Closing Documents will constitute the legal, valid, and binding obligations of
Buyer, enforceable against Buyer in accordance with their respective terms.
Buyer has the absolute and unrestricted right, power, and authority to execute
and deliver this Agreement and the Buyer's Closing Documents and to perform its
obligations under this Agreement and the Buyer's Closing Documents.
4.3. Investment Intent. Buyer is acquiring the Shares for its own account
and not with a view to their distribution within the meaning of Section 2(11) of
the Securities Act.
4.4. Certain Proceedings. There is no pending Proceeding that has been
commenced against Buyer and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions. To Buyer's Knowledge, no such Proceeding has been
Threatened.
4.5. Brokers or Finders. Buyer and its agents have incurred no obligation
or liability, contingent or otherwise, for brokerage or finders' fees or agents'
commissions or other similar payment in connection with this Agreement and will
indemnify and hold Seller harmless from any such payment alleged to be due by or
through Buyer as a result of the action of Buyer or its officers or agents.
5. COVENANTS OF SELLER PRIOR TO CLOSING DATE.
5.1. Access and Investigation. Between the date of this Agreement and the
Closing Date, Seller will, and will cause Seller and its Representatives to:
A. Afford Buyer and its Representatives and prospective lenders and
their Representatives (collectively, "Buyer's Advisors") full and free access to
Seller's personnel, properties (including subsurface testing), contracts, books
and records, and other documents and data;
B. Furnish Buyer and Buyer's Advisors with copies of all such
contracts, books and records, and other existing documents and data as Buyer may
reasonably request; and
C. Furnish Buyer and Buyer's Advisors with such additional
financial, operating, and other data and information as Buyer may reasonably
request.
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5.2. Operation of the Business of Seller. Between the date of this
Agreement and the Closing Date, Seller will:
A. Conduct the business of Seller only in the Ordinary Course of
Business;
B. Use its Best Efforts to preserve intact the current business
organization of Seller, keep available the services of the current officers,
employees, and agents of Seller, and maintain the relations and good will with
suppliers, customers, landlords, creditors, employees, agents, and others having
business relationships with Seller;
C. Confer with Buyer concerning operational matters of a material
nature; and
D. Otherwise report periodically to Buyer concerning the status of
the business, operations, and finances of Seller.
5.3. Negative Covenant. Except as otherwise expressly permitted by this
Agreement, between the date of this Agreement and the Closing Date, Seller will
not without the prior consent of Buyer, take any affirmative action, or fail to
take any reasonable action within their or its control, as a result of which any
of the changes or events listed in Section 3.13. is likely to occur.
5.4. Required Approvals. As promptly as practicable after the date of this
Agreement, Seller will, and will cause Seller to, make all filings required by
Legal Requirements to be made by them in order to consummate the Contemplated
Transactions. Between the date of this Agreement and the Closing Date, Seller
will, and will cause Seller to:
A. Cooperate with Buyer with respect to all filings that Buyer
reasonably elects to make or is required by Legal Requirements to make in
connection with the Contemplated Transactions; and
B. Cooperate with Buyer in obtaining all required Consents.
5.5. Notification. Between the date of this Agreement and the Closing
Date, Seller will promptly notify Buyer in writing if Seller becomes aware of
any fact or condition that causes or constitutes a Breach of any of Seller's
representations and warranties as of the date of this Agreement, or if Seller
becomes aware of the occurrence after the date of this Agreement of any fact or
condition that would (except as expressly contemplated by this Agreement) cause
or constitute a Breach of any such representation or warranty had such
representation or warranty been made as of the time of occurrence or discovery
of such fact or condition.
Should any such fact or condition require any change in the Disclosure
Schedule if the Disclosure Schedule were dated the date of the occurrence or
discovery of any such fact or condition, Seller will promptly deliver to Buyer a
supplement to the Disclosure Schedule specifying such change. During the same
period, each Seller will promptly notify Buyer of the occurrence of any Breach
of any covenant of Seller in this Section 5. or of the occurrence of any event
that may make the satisfaction of the conditions in Section 7. impossible or
unlikely.
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5.6. No Negotiation. Until such time, if any, as this Agreement is
terminated pursuant to Section 9., Seller will not, and will cause its
Representatives not to, directly or indirectly solicit, initiate, or encourage
any inquiries or proposals from, discuss or negotiate with, provide any
non-public information to, or consider the merits of any unsolicited inquiries
or proposals from, any Person (other than Buyer) relating to any transaction
involving the sale of the business or assets (other than in the Ordinary Course
of Business) of Seller, or any of the capital stock of Seller, or any merger,
consolidation, business combination, or similar transaction involving Seller.
5.7. Closing of Bank Accounts. Seller shall cause the removal of Seller
from the banks of Seller, without causing the closing of said accounts. Seller
shall cause the closing of savings accounts of Seller
6. COVENANTS OF BUYER PRIOR TO CLOSING DATE.
6.1. Approvals of Governmental Bodies/Third Party Consents. As promptly as
practicable after the date of this Agreement, Buyer will, and will cause each of
its Related Persons to, make all filings required by Legal Requirements to be
made by them to consummate the Contemplated Transactions.
Between the date of this Agreement and the Closing Date, Buyer will, and
will cause each Related Person to:
A. Cooperate with Seller with respect to all filings that Seller is
required by Legal Requirements to make in connection with the Contemplated
Transactions; and
B. Cooperate with Seller in obtaining all consents identified in
Schedule 3.2 of the Disclosure Schedule; provided that this Agreement will not
require Buyer to dispose of or make any change in any portion of its business or
to incur any other burden to obtain a Governmental Authorization.
7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE.
Buyer's obligation to purchase the Shares and to take the other actions
required to be taken by Buyer at the Closing is subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (any of which may
be waived by Buyer, in whole or in part):
7.1. Accuracy of Representations,
A. All of Seller's representations and warranties in this Agreement
(considered collectively), and each of these representations and warranties
(considered individually), must have been accurate in all material respects as
of the date of this Agreement, and must be accurate in all material respects as
of the Closing Date as if made on the Closing Date, without giving effect to any
supplement to the Disclosure Schedule.
B. Each of Seller's representations and warranties in Article 3.
must have been accurate in all respects as of the date of this Agreement, and
must be accurate in all respects
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as of the Closing Date as if made on the Closing Date, without giving effect to
any supplement to the Disclosure Schedule.
7.2. Seller's Performance.
A. All of the covenants and obligations that Seller is required to
perform or to comply with pursuant to this Agreement at or prior to the Closing
(considered collectively), and each of these covenants and obligations
(considered individually), must have been duly performed and complied with in
all material respects.
B. Each document required to be delivered pursuant to Section 2.4.
must have been delivered, and each of the other covenants and obligations in
Section 5. must have been performed and complied with in all respects.
C. The results of any investigation performed by Buyer in connection
with Section 5.1. shall be satisfactory to Buyer in its sole discretion.
7.3. Consents. Each of the Consents identified in Schedule 3.2 of the
Disclosure Schedule must have been obtained and must be in full force and
effect.
7.4. Additional Documents. Seller shall deliver such other documents as
Buyer may reasonably request for the purpose of (i) evidencing the accuracy of
any of Seller's representations and warranties; (ii) evidencing the performance
by Seller of, or the compliance by Seller with, any covenant or obligation
required to be performed or complied with by such Seller; (iii) evidencing the
satisfaction of any condition referred to in this Section 7. or (iv) otherwise
facilitating the consummation or performance of any of the Contemplated
Transactions.
7.5. No Proceedings. Since the date of this Agreement, there must not have
been commenced or Threatened against Buyer, or against any Person affiliated
with Buyer, any Proceeding (i) involving any challenge to, or seeking Damages or
other relief in connection with, any of the Contemplated Transactions or (ii)
that may have the effect of preventing, delaying, making illegal, or otherwise
interfering with any of the Contemplated Transactions.
7.6. No Claim Regarding Stock Ownership or Sale Proceeds. There must not
have been made or Threatened by any Person any claim asserting that such Person
(i) is the holder or the beneficial owner of, or has the right to acquire or to
obtain beneficial ownership of, any stock of, or any other voting, equity, or
ownership interest in, any of Seller or (ii) is entitled to all or any portion
of the Purchase Price payable for the Shares.
7.7. No Prohibition. Neither the consummation nor the performance of any
of the Contemplated Transactions will, directly or indirectly (with or without
notice or lapse of time), materially contravene, or conflict with, or result in
a material violation of, or cause Buyer or any Person affiliated with Buyer to
suffer any material adverse consequence under, (i) any applicable Legal
Requirement or Order or (ii) any Legal Requirement or Order that has been
published, introduced, or otherwise proposed by or before any Governmental Body.
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7.8. Employment Agreement. On or before the Closing Date, Richard Criag
shall have entered into an employment agreement with Seller.
8. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE.
Seller's obligation to sell the Shares and to take the other actions
required to be taken by Seller at the Closing is subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (any of which may
be waived by Seller, in whole or in part):
8.1. Accuracy of Representations. All of Buyer's representations and
warranties in this Agreement (considered collectively), and each of these
representations and warranties (considered individually), must have been
accurate in all material respects as of the date of this Agreement and must be
accurate in all material respects as of the Closing Date as if made on the
Closing Date.
8.2. Buyer's Performance.
A. All of the covenants and obligations that Buyer is required to
perform or to comply with pursuant to this Agreement at or prior to the Closing
(considered collectively), and each of these covenants and obligations
(considered individually), must have been performed and complied with in all
material respects.
B. Buyer must have delivered each of the documents required to be
delivered by Buyer pursuant to Section 2.5.
8.3. Consents. Each of the Consents identified in Schedule 3.2 of the
Disclosure Schedule must have been obtained and must be in full force and
effect.
8.4. Additional Documents, Buyer must have caused the following documents
to be delivered to Seller such other documents as Seller may reasonably request
for the purpose of (i) enabling their counsel to provide the opinion referred to
in Section 2.5.A.(iii); (ii) evidencing the accuracy of any representation or
warranty of Buyer; (iii) evidencing the performance by Buyer of, or the
compliance by Buyer with, any covenant or obligation required to be performed or
complied with by Buyer; (iv) evidencing the satisfaction of any condition
referred to in this Section 8. or (v) otherwise facilitating the consummation of
any of the Contemplated Transactions.
8.5. No Injunction. There must not be in effect any Legal Requirement or
any injunction or other Order that (i) prohibits the sale of the Shares by
Seller to Buyer and (ii) has been adopted or issued, or has otherwise become
effective, since the date of this Agreement.
9. TERMINATION.
9.1. Termination Events.
This Agreement may, by notice given prior to or at the Closing, be
terminated:
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A. By either Buyer or Seller if a material Breach of any provision
of this Agreement has been committed by the other party and such Breach has not
been waived;
B. (i) By Buyer if any of the conditions in Section 7. have not been
satisfied as of the Closing Date or if satisfaction of such a condition is or
becomes impossible (other than through the failure of Buyer to comply with its
obligations under this Agreement) and Buyer has not waived such condition on or
before the Closing Date;
(ii) By Seller, if any of the conditions in Section 8. have
not been satisfied of the Closing Date or if satisfaction of such a condition is
or becomes impossible (other than through the failure of Seller to comply with
their obligations under this Agreement) and Seller has not waived such condition
on or before the Closing Date; or
C. By mutual consent of Buyer and Seller; or
D. By either Buyer or Seller if the Closing has not occurred (other
than through the failure of any party seeking to terminate this Agreement to
comply fully with its obligations under this Agreement) on or before November
15, 1998, or such later date as the parties may agree upon.
9.2. Effect of Termination. Each party's right of termination under
Section 9.1. is in addition to any other rights it may have under this Agreement
or otherwise, and the exercise of a right of termination will not be an election
of remedies. If this Agreement is terminated pursuant to Section 9.1., all
further obligations of the parties under this Agreement will terminate, except
that the obligations in Sections 12.1. and 12.3. will survive; provided,
however, that if this Agreement is terminated by a party because of the Breach
of the Agreement by the other party or because one (1) or more of the conditions
to the terminating party's obligations under this Agreement is not satisfied as
a result of the other party's failure to comply with its obligations under this
Agreement, the terminating party's right to pursue all legal remedies will
survive such termination unimpaired.
10. INDEMNIFICATION; REMEDIES.
10.1. Agreement by Seller to Indemnify. Seller (the "Seller Indemnifying
Party"), agrees that they will indemnify and hold Buyer harmless in respect of
the aggregate of all indemnifiable Damages of Buyer.
For this purpose, "indemnifiable Damages" of Buyer means the aggregate of
all Damages incurred or suffered by Buyer resulting from:
A. Any inaccurate representation or warranty made by Seller in or
pursuant to this Agreement;
B. Any default in the performance of any of the covenants or
agreements made by Seller in this Agreement; or
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C. The failure of any Seller to pay, discharge or perform any
liability or obligation of Seller or of Seller resulting from the operation of
Seller's business prior to the Closing Date.
Without limiting the generality of the foregoing, with respect to the
measurement of "indemnifiable Damages". Buyer shall have the right to be put in
the same financial position as it would have been had each of the
representations and warranties of Seller been true and correct and had each of
the covenants of Seller been performed in full.
The amount of any indemnifiable Damages otherwise payable to Buyer
hereunder shall be reduced if the indemnifiable Damages incurred by Buyer will
provide Buyer with income tax deductions or credits. The amount of the reduction
shall be the amount of the actual cash tax savings realized by Buyer as a result
of such deductions or credits, discounted to its present value as of the date of
the payment of the indemnifiable Damages from the date such indemnifiable
Damages were incurred by Buyer at the rate of interest charged on such date by
the Internal Revenue Service on underpayment of taxes.
The foregoing obligation of Seller Indemnifying Party to indemnify Buyer
shall be subject to each of the following principles or qualifications:
1. Each of the representations and warranties made by Seller in this
Agreement or pursuant hereto, shall survive for a period of one (1) year after
the Closing; provided, however, that the representations and warranties made by
Seller to the extent they relate to Seller's title to the Shares shall survive
forever and that the representations and warranties made by Seller and
Shareholder in Section 3.8. hereof ("Taxes") shall in each case survive until
the first (1st) anniversary of the later of:
A. The date on which applicable period of limitation on
assessment or refund of tax has expired; or
B. The date on which the applicable taxable year (or portion
thereof) has been closed.
No claim for the recovery of indemnifiable Damages may be asserted by
Buyer against Seller Indemnifying Party or their successors in interest after
such representations and warranties shall be thus extinguished; provided,
however, that claims first asserted in writing within the applicable period
shall not thereafter be barred.
10.2. Agreements by Buyer to Indemnify. Buyer (the "Buyer Indemnifying
Party"), agrees to indemnify and hold Seller (the "Seller Indemnified Party")
harmless in respect of the aggregate of all indemnifiable Damages of any of
Seller Indemnified Parties.
For this purpose, "indemnifiable Damages" of the of Seller Indemnified
Party means the aggregate of all Damages incurred or suffered by the Seller
Indemnified Party resulting from:
A. Any inaccurate representation or warranty made by Buyer or
pursuant to this Agreement; or
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B. Any default in the performance of any of the covenants or
agreements made by Buyer in this Agreement.
Without limiting the generality of the foregoing, with respect to the
measurement of "indemnifiable Damages", the Seller Indemnified Party shall have
the right to be put in the same financial position as they would have been had
each of the representations and warranties of Buyer Indemnifying Party been true
and correct and had each of the covenants of Buyer Indemnifying Party been
performed in full.
The amount of any indemnifiable Damages otherwise payable to any Seller
Indemnified Party hereunder shall be reduced if the indemnifiable Damages
incurred by Seller Indemnified Party will provide such Party with income tax
deductions or credits. The amount of the reduction shall be the amount of the
actual cash tax savings realized by Seller Indemnified Party as a result of such
deductions or credits discounted to its present value as of the date of the
payment of the indemnifiable Damages from the date such indemnifiable Damages
were incurred by Seller Indemnified Party at the rate of interest charged on
such date by the Internal Revenue Service on underpayment of taxes.
The foregoing obligation of Buyer Indemnifying Party to indemnify Seller
Indemnified Party shall be subject to each of the following principles or
qualifications:
10.2.1 Each of the representations and warranties made by Buyer in
Article 4 of this Agreement shall survive for a period of one (1) year after the
Closing Date, and thereafter all such representations and warranties shall be
extinguished.
No claim for the recovery of indemnifiable Damages pursuant to clause (i)
of Section 10.2. may be asserted by Seller Indemnified Party against Buyer
Indemnifying Party or its successors in interest after such representations and
warranties shall be thus extinguished; provided, however, that claims first
asserted in writing within the applicable period shall not thereafter be barred.
10.3. Matters Involving Third Parties. If any third party shall notify
Buyer or Seller (the "Indemnified Party") with respect to any matter which may
give rise to a claim for indemnification against any other Party (the
"Indemnifying Party") under this Section 10., then the Indemnified Party shall
notify each Indemnifying Party thereof promptly; provided, however, that no
delay on the part of the Indemnified Party in notifying any Indemnifying Party
shall relieve the Indemnifying Party from any liability or obligation hereunder
unless (and then solely to the extent that) the Indemnifying Party thereby is
Damaged.
If any Indemnifying Party notifies the Indemnified Party within fifteen
(15) days after the Indemnified Party has given notice of the matter that the
Indemnifying Party is assuming the defense thereof, then:
A. The Indemnifying Party will defend the Indemnified Party against
the matter with counsel of its choice satisfactory to the Indemnified Party;
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B. The Indemnified Party may retain separate co-counsel at its sole
cost and expense (except that the Indemnifying Party will be responsible for the
fees and expenses of the separate co-counsel to the extent the Indemnified Party
concludes that the counsel the Indemnifying Party has selected has a conflict of
interest);
C. The Indemnified Party will not consent to the entry of any
judgment or enter into any settlement with respect to the matter without the
written consent of the Indemnifying Party (not to be withheld or delayed
unreasonably); and
D. The Indemnifying Party will not consent to the entry of any
judgment with respect to the matter, or enter into any settlement which does not
include a provision whereby the plaintiff or claimant in the matter releases the
Indemnified Party from all liability with respect thereto, without the written
consent of the Indemnified Party (not to be withheld or delayed unreasonably).
If no Indemnifying Party notifies the Indemnified Party within fifteen
(15) days after the Indemnified Party has given notice of the matter that the
Indemnifying Party is assuming the defense thereof, then the Indemnified Party
may defend against, or enter into any settlement with respect to, the matter in
any manner it may deem appropriate.
11. POST-CLOSING AGREEMENTS.
11.1. Consistency in Reporting. Each party hereto agrees that: (i) the
transaction is intended to qualify as a tax-free transaction under the I.R.C.;
(ii) the transaction shall be reported for Federal income tax purposes as a
tax-free transaction; (iii) for purposes of all financial statements, tax
returns and reports, and communications with third parties, the transactions
contemplated in this agreement and ancillary or collateral transactions will be
treated as a tax-free transaction; and (iv) if the characterization of any
transaction contemplated in this agreement or any ancillary or collateral
transaction is challenged, each party hereto will testify, affirm and ratify
that the characterization contemplated in such agreement was with the
characterization intended by the party; provided, however, that nothing herein
shall be construed as giving rise to any obligation if the reporting position is
determined to be incorrect by final decision of a court of competent
jurisdiction.
12. GENERAL PROVISIONS.
12.1. Expenses. Except as otherwise expressly provided in this Agreement,
each party to this Agreement will bear its respective expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the Contemplated Transactions, including all fees and expenses of agents,
representatives, counsel, and accountants.
Seller will cause Seller not to incur any out-of-pocket expenses in
connection with the Contemplated Transactions. In the event of termination of
this Agreement, the obligation of each party to pay its own expenses will be
subject to any rights of such party arising from a breach of this Agreement by
another party.
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12.2. Public Announcements. Any public announcement or similar publicity
with respect to this Agreement or the Contemplated Transactions will be issued,
if at all, at such time and in such manner as Buyer determines. Unless consented
to by Buyer in advance or required by Legal Requirements, prior to the Closing
Seller shall, and shall cause Seller to, keep this Agreement strictly
confidential and may not make any disclosure of this Agreement to any Person.
Seller and Buyer will consult with each other concerning the means by
which Seller's employees, customers, and suppliers and others having dealings
with Seller will be informed of the Contemplated Transactions, and Buyer will
have the right to be present for any such communication.
12.3. Confidentiality. Between the date of this Agreement and the Closing
Date, Buyer and Seller will maintain in confidence, and will cause the
directors, officers, employees, agents, and advisors of Buyer and Seller to
maintain in confidence, and not use to the detriment of another party or an
Seller any written, oral, or other information obtained in confidence from
another party or an Seller in connection with this Agreement or the Contemplated
Transactions, unless:
A. Such information is already known to such party or to others not
bound by a duty of confidentiality or such information becomes publicly
available through no fault of such party;
B. The use of such information is necessary or appropriate in making
any filing or obtaining any consent or approval required for the consummation of
the Contemplated Transactions; or
C. The furnishing or use of such information is required by or
necessary or appropriate in connection with legal proceedings.
If the Contemplated Transactions are not consummated, each party will
return or destroy as much of such written information as the other party may
reasonably request. Whether or not the Closing takes place, Seller waives, and
will upon Buyer's request cause Seller to waive an cause of action, right, or
claim arising out of the access of Buyer or its representatives to any trade
secrets or other confidential information of Seller.
12.4. Notices. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (i) delivered by hand (with written confirmation of receipt); (ii)
sent by telecopier (with written confirmation of receipt), provided that a copy
is mailed by registered mail, return receipt requested or (iii) when received by
the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
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Seller: Glenda Illes
6821 Boston Hill Lane
Canton, MI 48187
With a copy to:
Richard Craig
15856 Centralia
Redford, MI 48239
Buyer: Scott Schuster
3700 Crestwood Parkway
Suite 1000
Duluth, GA 30096
With a copy to: Morris, Manning & Martin, L.L.P.
1600 Atlanta Financial Center
3343 Peachtree Road, N.E.
Atlanta, Georgia 30326-1044
Attention; Bryan G. Harrison, Esq.
Telecopy No.: (404) 365-9532
12.5. Jurisdiction; Service of Process. Any action or proceeding seeking
to enforce any provision of, or based on any right arising out of, this
Agreement may be brought against any of the parties in the courts of the State
of Georgia, County of DeKalb, or, if it has or can acquire jurisdiction, in the
United States District Court for the Northern District of Georgia, and each of
the parties consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world.
12.6. Further Assurances. The parties agree (i) to furnish upon request to
each other such further information; (ii) to execute and deliver to each other
such other documents and (iii) to do such other acts arid things, all as the
other party may reasonably request for the purpose of carrying out the intent of
this Agreement and the documents referred to in this Agreement.
12.7. Waiver. The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege.
To the maximum extent permitted by applicable law:
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A. No claim or right arising out of this Agreement or the documents
referred to in this Agreement can be discharged by one (1) party, in whole or in
part, by a waiver or renunciation of the claim or right unless in writing signed
by the other party;
B. No waiver that may be given by a party will be applicable except
in the specific instance for which it is given; and
C. No notice to or demand on one (1) party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
12.8. Entire Agreement and Modification. This Agreement supersedes all
prior agreements between the parties with respect to its subject matter
(including the Letter of Intent between Buyer and Seller dated October 31, 1998)
and constitutes (along with the documents referred to in this Agreement) a
complete and exclusive statement of the terms of the agreement between the
parties with respect to its subject matter. This Agreement may not be amended
except by a written agreement executed by the party to be charged with the
amendment.
12.9. Disclosure Schedule.
A. The disclosures in the Disclosure Schedule, and those in any
Supplement thereto, must relate only to the representations and warranties in
the Section of the Agreement to which they expressly relate and not to any other
representation or warranty in this Agreement.
B. In the event of any inconsistency between the statements in the
body of this Agreement and those in the Disclosure Schedule (other than an
exception expressly set forth as such in the Disclosure Schedule with respect to
a specifically identified representation or warranty), the statements in the
body of this Agreement will control.
12.10. Assignments, Successors and No Third-Party Rights. Neither party
may assign any of its rights under this Agreement without the prior consent of
the other parties, which will not be unreasonably withheld, except that Buyer
may assign any of its rights under this Agreement to any Subsidiary of Buyer.
Subject to the preceding sentence, this Agreement will apply to, be binding in
all respects upon, and inure to the benefit of the successors and permitted
assigns of the parties.
Nothing expressed or referred to in this Agreement will be construed to
give any Person other than the parties to this Agreement any legal or equitable
right, remedy, or claim under or with respect to this Agreement or any provision
of this Agreement. This Agreement and all of its provisions and conditions are
for the sole and exclusive benefit of the parties to this Agreement and their
successors and assigns.
12.11. Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
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12.12. Section Headings; Construction. The headings of Sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation. All references to "Section" or "Sections" refer to the
corresponding Section or Sections of this Agreement. All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word "including" does not
limit the preceding words or terms.
12.13. Time of Essence. With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.
12.14. Governing Law. This Agreement will be governed by the laws of the
State of Georgia without regard to conflicts of laws principles.
12.15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first written above.
BUYER: SELLER:
By: /s/ Scott Schuster /s/ Rick Craig /s/ Glenda Illes
------------------------- ----------------------------------
Title: Title: Pres. Vice President
---------------------- ---------------------------
Date: 11/8/98 Date: 11-5-98
----------------------- ----------------------------
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SCHEDULES
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EXHIBITS
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
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We, the undersigned, hereby certify that all representations and warranties as
stated in the Stock Purchase Agreement, incorporated hereto, are true and
accurate.
/s/ Scott Schuster
- -----------------------------
Scott Schuster
We, the undersigned, hereby certify that all representations and warranties as
stated in the Stock Purchase Agreement, incorporated hereto, are true and
accurate.
/s/ Rick Craig
- -----------------------------
Rick Craig, President
/s/ Glenda Illes
- -----------------------------
Glenda Illes, Vice President
We, the undersigned, hereby state the Corporation, Scanlan Music Corporation,
Inc., is in good standing with the State of Michigan
/s/ Rick Craig
- -----------------------------
Rick Craig, President
/s/ Glenda Illes
- -----------------------------
Glenda Illes, Vice President
Amendment of Disclosure Schedule
to Stock Purchase Agreement Dated November 5, 1998
3.1 Name: Scanlan Music, Inc.
Incorporated in Michigan
Capitalization:
3.2 None
3.3 N/A
3.4 N/A
3.5 N/A
3.6 With the exception of inventory, all items are owned outright.
3.7 Back Gross Wages to Nicole Craig totaling Three Thousand Two Hundred
Forty Dollars ($3,240.00)
3.8 All Taxes are Current
3.9 N/A
3.10.1 Only health insurance through Health Alliance Plan which is current in
payment.
3.17(A) Past due balances to vendors as listed in attached exhibit
3.17 Back Gross wages to Nicole Craig totaling Three Thousand Two Hundred
Forty Dollars ($3,240.00)