PRIVATE STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of March __, 2004 (this "Agreement"),
by and among the persons identified on Exhibit "A" to this Agreement as
Buyers (each a "Buyer" and collectively, the "Buyers") and the
controlling shareholders of Galaxy Championship Wrestling, Inc., a
Nevada Corporation (the "Company") identified on Exhibit "B" to this
Agreement as "Sellers" (each a "Seller" and collectively, the
"Sellers"). The Buyers and the Sellers are referred to collectively
herein as the "Parties".
BACKGROUND
The Sellers own 5,750,000 of the 9,149,188 issued and outstanding shares
of capital stock of the Company (the "Shares").
The Buyers desire to purchase from the Sellers, and the Sellers desire
to sell to the Buyers, the Shares in consideration of the payment of
$143,750.00 US (the Purchase Price), on the terms as set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties intending to be legally
bound, hereby agree as follows.
1. Definitions. Capitalized terms used, but not otherwise defined,
herein have the meanings ascribed to such terms in Appendix A hereto.
2. Purchase and Sale of Shares and Appointment of Representatives.
(a) Basic Transaction. On and subject to the terms and conditions of
this Agreement, the Buyers shall purchase from the Sellers, and the
Sellers shall sell to the Buyers, the Shares of the issued and
outstanding capital stock of the Company for the Purchase Price above
specified. Buyers and Sellers each acknowledge and accept that the
trading price of the Company Shares may increase or decrease subsequent
to the date of execution of this Agreement and after the Closing of the
sale of the Company Shares. Buyers and Sellers each waive any claims to
any losses as a result of such price changes in the Company Shares.
(b) Escrow of Shares. The Sellers shall deposit the Shares with Harold
Gewerter, Esq., attorney for the Sellers ("Escrow Agent"), within 3 days
of the signing of this Agreement.
The escrowed Shares shall be held for the benefit of the Sellers and
shall be distributed as defined below. If this Agreement is terminated,
if the Buyers fail to satisfy a condition precedent to the Sellers'
obligation to close or if for any other reason the Closing does not
occur (other than due to the Sellers breach of any material provision of
this Agreement), then the escrowed Shares shall be immediately returned
to the Sellers (as defined below) or to an account designated in writing
by the Sellers. If this Agreement is terminated as the result of the
Sellers breach of a material provision of this Agreement, then the
escrowed Shares may be released to the Buyer in satisfaction of any
claims that the Buyers may have against the Sellers for such material
breach.
(c) Escrow of Purchase Price.. Within 3 business days following the
escrow of the Shares by the Sellers, the Buyers shall deposit in the
account of the Escrow Agent, the amount of US $93,750.00, this being the
Purchase Price of $143,750.00 less the previously deposited amount of
$50,000.00, which deposit is hereby acknowledged by the Sellers and
Escrow Agent.
The escrow of the Purchase Price shall be held for the benefit of the
Buyers. The Purchase Price shall be disbursed as defined below. If
this Agreement is terminated, if the Sellers fail to satisfy a condition
precedent to the Buyers obligation to close or if for any other reason
the Closing does not occur (other than due to the Buyers breach of any
material provision of this Agreement), then the Purchase Price shall be
immediately returned to the Buyer Representative (as defined below) or
to an account designated in writing by the Buyer Representative. If
this Agreement is terminated as the result of the Buyer's breach of a
material provision of this Agreement, then the Purchase Price may be
released to the Sellers or Sellers' Authorized Representative in
satisfaction of any claims that the Sellers may have against the Buyers
for such material breach.
(d) The Closing. The closing of the transaction contemplated by this
Agreement (the "Closing") shall take place at the offices of the Escrow
Agent in Las Vegas, Nevada, within 3 business days of the satisfaction
or waiver of all conditions to the obligations of the Parties to
consummate the transactions contemplated hereby (other than conditions
with respect to actions the respective Parties will take at the Closing
itself) or such other date as the Buyer Representative and the Sellers
or Sellers' Representative may mutually determine (the "Closing Date").
(e) Disbursement of Purchase Funds. Prior to the disbursement of the
Purchase Price, the Sellers shall deliver to the Escrow Agent, for the
benefit of the Buyers, all of the stock certificates representing the
defined Shares, endorsed in blank or accompanied by duly executed
assignment documents and including a Medallion Guarantee or such other
assignments required by the Company transfer agent, including third
party releases. In addition to the Shares, a current accounts payable of
the Company certified by two directors of the Company, working paper
files for the various Form 10-KSBs and 10-QSBs for examination and
review by the Buyers' auditors, confirmation by the Company's auditors
that they are prepared to act for the Company, certified list of
shareholders issued by the registered Transfer Agent for the Company,
and all other documents referred to in this Agreement shall be delivered
to the Escrow Agent.
(f) Distribution of Shares. Prior to the distribution of the Shares to
the Buyers, the Sellers shall have delivered to the Escrow Agent, the
instructions for the disbursement of the Purchase Price to the Sellers
and have delivered the various instruments, and documents referred to in
Schedule II to this Agreement.
(g) Resignations and Appointments: Sellers shall deliver or cause to
be delivered to the Escrow Agent, resignations of the current officers
and directors of the Company, and Buyers shall deliver to the Escrow
Agent, letters from the new officers and directors of the Company,
agreeing to serve in their appropriate capacity.
(h) Appointment of Representatives.
(i) The Sellers, by executing this Agreement, will be deemed to have
irrevocably constituted and appointed, effective as of the date of this
Agreement, (together with his permitted successors, the
"Seller Representative"), as their true and lawful agent and attorney-
in-fact to enter into any agreement on their behalf in connection with
the transactions contemplated by this Agreement and to enter into any
amendments, modifications or supplements hereto, to exercise all or any
of the powers, authority and discretion conferred on him under this
agreement, to waive any terms and conditions of this agreement (other
than the obligation to pay, and the amount of, the Purchase Price), to
give and receive notices on their behalf and to be their exclusive
representative with respect to any matter, suit, claim, action or
proceeding arising with respect to any transaction contemplated by any
this Agreement and the Seller Representative agrees to act as, and to
undertake the duties and responsibilities of, such agent and attorney-
in-fact. This power of attorney is coupled with an interest and
irrevocable. The Seller Representative shall not be liable for any
action taken or not taken by him in connection with his obligations
under this Agreement (i) with the consent of stockholders who, as of the
date of this Agreement owned more than fifty percent (50%) in interest
of the outstanding Company Shares (not including Company Shares held by
the Seller Representative) or (ii) in the absence of his own gross
negligence or willful misconduct.
(ii) The Buyers, by executing this Agreement, will be deemed to have
irrevocably constituted and appointed, effective as of the date of this
Agreement, Nolan Moss (together with his permitted successors, the
"Buyer Representative"), as their true and lawful agent and attorney-in-
fact to enter into any agreement on their behalf in connection with the
transactions contemplated by this Agreement and to enter into any
amendments, modifications or supplements hereto, to exercise all or any
of the powers, authority and discretion conferred on it under this
agreement, to waive any terms and conditions of this agreement (other
than the obligation to deliver the Company Shares for the Purchase Price
specified herein), to give and receive notices on their behalf and to be
their exclusive representative with respect to any matter, suit, claim,
action or proceeding arising with respect to any transaction
contemplated by this Agreement and the Buyer Representative agrees to
act as, and to undertake the duties and responsibilities of, such agent
and attorney-in-fact. This power of attorney is coupled with an
interest and irrevocable. The Buyer Representative shall not be liable
for any action taken or not taken by him in connection with his
obligations under this Agreement (i) with the consent of Buyers who are
purchasing more than fifty percent (50%) in interest of the outstanding
Company Shares or (ii) in the absence of its own gross negligence or
willful misconduct. If the Buyer Representative shall be unable or
unwilling to serve in such capacity, its successor shall be named by
those persons purchasing more than fifty percent (50%) in interest of
the Company Shares who shall serve and exercise the powers of Buyer
Representative hereunder.
3. Representations and Warranties Concerning the Transaction.
(a) Representations and Warranties of the Sellers. Each of the Sellers
represents and warrants to the Buyers that the statements contained in
this Section 3(a) are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the
date of this Agreement throughout this Section 3(a)) with respect to
himself.
(i) Authorization of Transaction. Each of the Sellers has full power
and authority to execute and deliver this Agreement and to perform his,
her or its respective obligations hereunder. This Agreement constitutes
the valid and legally binding obligation of each Seller, enforceable in
accordance with its terms and conditions. No Seller need give any
notice to, make any filing with, or obtain any authorization, consent,
or approval of any Governmental Authority in order to consummate the
transactions contemplated by this Agreement.
(ii) Non-contravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby,
will (A) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other
restriction of any Governmental Authority to which any of the Sellers
are subject, or (B) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other
arrangement to which any Seller is a party or by which he, she or it is
bound or to which any of his, her or its assets is subject.
(iii) Brokers' Fees. No Seller has any Liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement for which any Buyer
could become liable or obligated.
(iv) Company Shares. The Sellers hold of record and own beneficially
the number of Company Shares set forth next to their respective names in
Schedule I, free and clear of any restrictions on transfer (other than
any restrictions under the Securities Act and state securities laws),
Taxes, Security Interests, options, warrants, purchase rights,
contracts, commitments, equities, claims, and demands. No Seller is a
party to any option, warrant, purchase right, or other contract or
commitment that could require the Seller to sell, transfer, or otherwise
dispose of any capital stock of the Company (other than this Agreement).
No Seller is a party to any voting trust, proxy, or other agreement or
understanding with respect to the voting of any capital stock of the
Company. The Company Shares were duly and validly issued and are fully-
paid and non-assessable. Upon delivery of the Company Shares to the
Buyers pursuant to this Agreement, the Buyers will acquire valid title
thereto, free and clear of any Security Interests.
(v) Employees. Neither the Company nor any of its Subsidiaries is a
party to any collective bargaining agreement, arrangement or labor
contract with a labor union or labor organization, whether formal or
otherwise. To the Company's knowledge, each of the Company and its
Subsidiaries is in compliance with all applicable laws (including,
without limitation, all applicable extension orders) respecting
employment and employment practices, terms and conditions of employment,
equal opportunity, anti-discrimination laws, and wages and hours, except
where such noncompliance has not had and would not, individually or in
the aggregate, reasonably be expected to have, a Company Material
Adverse Effect. There is no labor strike, slowdown or stoppage pending
(or, to the Knowledge of the Company or any of its Subsidiaries, any
unfair labor practice complaints, labor disturbances or other
controversies respecting employment which are pending or threatened
which, if they actually occurred, would reasonably be expected to have a
Company Material Adverse Effect) against the Company or any of its
Subsidiaries
(vi) Opinion of Counsel. The Buyers shall have received an opinion of
counsel from Harold Gewerter, Esq., in form and substance satisfactory
to counsel to the Buyers Representative relating to the status of the
Company, the validity of the transaction, the validity of the shares
being delivered, and the compliance of the Company and its Controlling
Shareholders with the terms and conditions of this Agreement.
(vii) Non-Disclosure: Each of the Sellers for himself, his heirs,
executors and assigns covenants and agrees not to disclose any of the
matters contained in this Agreement absent a valid and binding order or
court decree ordering such disclosure.
(b) Representations and Warranties of the Buyers. The Buyers represent
and warrant to the Sellers that the statements contained in this
paragraph 3(b) are correct and complete as of the date of this Agreement
and will be correct and complete as of the Closing Date (as though made
then and as though the Closing Date were substituted for the date of
this Agreement throughout this 3(b)).
(i) Authorization of Transaction. Each of the Buyers has full power
and authority to execute and deliver this Agreement and to perform his,
her or its respective obligations hereunder. This Agreement constitutes
the valid and legally binding obligation of each Buyer, enforceable in
accordance with its terms and conditions. No Buyer need give any notice
to, make any filing with, or obtain any authorization, consent, or
approval of any Governmental Authority in order to consummate the
transactions contemplated by this Agreement.
(ii) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby,
will (A) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other
restriction of any Governmental Authority to which any of the Buyers are
subject, or (B) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other
arrangement to which any Buyer is a party or by which he, she or it is
bound or to which any of his, her or its assets is subject.
(iii) Brokers' Fees. No Buyer has any Liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement for which any Seller
could become liable or obligated.
4. Representations and Warranties Concerning the Company. The
Controlling Stockholder(s), represent and warrant to the Buyers that the
statements contained in this Section 4 are correct and complete as of
the date of this Agreement and will be correct and complete as of the
Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section 4),
except as set forth in the disclosure schedule attached hereto (the
"Disclosure Schedule"). The Disclosure Schedule will be arranged in
paragraphs corresponding to the lettered and numbered paragraphs
contained in this '4.
(a) SEC Reports. The Company has filed or will file, prior to
closing, all reports, registration statements, definitive proxy
statements and other documents and all amendments thereto and
supplements thereof required to be filed by it with the U.S. Securities
and Exchange Commission as required (the "SEC Reports"), all of which
have or will comply in all material respects with the applicable
requirements of the Securities Act of 1933, as amended (the "Securities
Act"), the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and the rules and regulations promulgated thereunder. As of the
respective dates of filing in final or definitive form (or, if amended
or superseded by a subsequent filing, then on the date of such
subsequent filing), none of the Company's SEC Reports contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances in which they were
made, not misleading.
(b) Organization of Company; No Subsidiaries. The Company is a
corporation duly organized, validly existing, and in good standing under
the laws of the State of Nevada. The Company is duly authorized to
conduct business and is in good standing under the laws of each
jurisdiction where such qualification is required. The Company has full
corporate power and authority and all licenses, permits, and
authorizations necessary to carry on its business. The Company has no
subsidiaries and does not control, directly or indirectly, or have any
direct or indirect equity participation in any entity. The Sellers have
delivered to the Buyers true, correct and complete copies of the
Certificate of Incorporation and Bylaws of the Company, as amended
through the date hereof.
(c) Capitalization; No Restrictive Agreements. The Company's
authorized capital stock, as of the date of this Agreement, consists of
20,000,000 shares of Common Stock, $0.001 par value per share, of which
9,149,188 shares are issued and outstanding and 5,000,000 shares of
Preferred Stock, of which none is issued and outstanding. There is no
other form of equity authorized, issued or outstanding. The Company has
not reserved any shares of its Common Stock for issuance upon the
exercise of options, warrants or any other securities that are
exercisable or exchangeable for, or convertible into, Common Stock. All
of the issued and outstanding shares of Common Stock are validly issued,
fully paid and non-assessable and have been issued in compliance with
applicable laws, including, without limitation, applicable federal and
state securities laws. There are no outstanding options, warrants or
other rights of any kind to acquire any additional shares of capital
stock of the Company or securities exercisable or exchangeable for, or
convertible into, capital stock of the Company, nor is the Company
committed to issue any such option, warrant, right or security. There
are no agreements relating to the voting, purchase or sale of capital
stock (i) between or among the Company and any of its stockholders, (ii)
between or among the Sellers and any third party, or (iii) to the best
knowledge of the Controlling Stockholder between or among any of the
Company's stockholders. The Company is not a party to any agreement
granting any stockholder of the Company the right to cause the Company
to register shares of the capital stock of the Company held by such
stockholder under the Securities Act.
(d) Financial Statements. The Sellers have or will, prior to
closing, provide to the Purchaser the audited balance sheet and
statements of income, changes in stockholders' equity and cash flows as
of and for the year ended December 31, 2003, (collectively, the
financial statements described in (i) and (ii) are referred to as the
"Financial Statements"). The Financial Statements have been prepared in
accordance with United States generally accepted accounting principles
applied on a consistent basis, fairly present the financial condition,
results of operations and cash flows of the Company as of the respective
dates thereof and for the periods referred to therein and are consistent
with the books and records of the Company. The Company does not have
any liability (whether known or unknown, whether asserted or unasserted,
whether absolute or contingent, whether accrued or un-accrued, whether
liquidated or un-liquidated, and whether due or to become due),
including any liability for taxes, except for liabilities expressly
specified in the Financial Statements which are approved in writing by
Buyers (none of which results from, arises out of, relates to, is in the
nature of, or was caused by any breach of contract, breach of warranty,
tort, infringement, or violation of law).
(e) Absence of Certain Changes. At the time of the execution of
the Agreement and at the time of Closing, there will not be and will not
have been any event or condition of any character which has adversely
affected, or may be expected to adversely affect, the Company's business
or prospects, including, but not limited to any adverse change in the
condition, assets, liabilities (existing or contingent) or business of
the Company from that shown in the Financial Statements.
(f) Legal Proceedings. Except as disclosed in the SEC Reports, as
of the date of this Agreement, and continuing through the Closing, there
is no, nor will there be, any legal, administrative, investigatory,
regulatory or similar action, suit, claim or proceeding which is pending
or, to the Controlling Stockholder's knowledge, threatened against the
Company which, if determined adversely to the Company, could have,
individually or in the aggregate, a material adverse effect on the
business, assets, or prospects of the Company or which in any manner
challenges or seeks to prevent, enjoin, alter or delay the transactions
contemplated by this Agreement.
(g) Legal Compliance. The Company has complied in all material
respects with all applicable laws (including rules, regulations, codes,
plans, injunctions, judgments, orders, decrees, rulings, and charges
thereunder) of all governmental authorities, and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand, or
notice has been filed or commenced against the Company alleging any
failure so to comply. To the Controlling Stockholder's knowledge,
neither the Company, nor any officer, director, employee, consultant or
agent of the Company has made, directly or indirectly, any payment or
promise to pay, or gift or promise to give or authorized such a promise
or gift, of any money or anything of value, directly or indirectly, to
any governmental official, customer or supplier for the purpose of
influencing any official act or decision of such official, customer or
supplier or inducing him, her or it to use his, her or its influence to
affect any act or decision of a governmental authority or customer,
under circumstances which could subject the Company or any officers,
directors, employees or consultants of the Company to administrative or
criminal penalties or sanctions.
(h) Tax Matters.
(i) The Company has filed all Tax Returns that it was required to file.
All such Tax Returns were correct and complete in all respects. All
Taxes owed by the Company has been paid. The Company is currently the
beneficiary of any extension of time within which to file any Tax
Return. No claim has ever been made by an authority in a jurisdiction
that the Company does not file Tax Returns that it is or may be subject
to taxation by that jurisdiction. There are no Security Interests on
any of the assets of the Company that arose in connection with any
failure (or alleged failure) to pay any Tax.
(ii) The Company has withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder, or other third
party.
(iii) The Controlling Stockholders do not expect any authority to assess
any additional Taxes for any period for which Tax Returns have been
filed. There is no dispute or claim concerning any Liability with
respect to any Taxes (a "Tax Liability") of the Company (A) claimed or
raised by any authority in writing or (B) as to which the Controlling
Stockholder has Knowledge based upon personal contact with any agent of
such authority. No tax returns of the Company have ever been audited or
are currently the subject of an audit. The Sellers have delivered to
the Buyers correct and complete copies of all federal and state income
and other material Tax Returns, examination reports, and statements of
deficiencies assessed against or agreed to by the Company since
inception.
(iv) The Company has not waived any statute of limitations in respect of
Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
(v) The Company has not filed consent under Code Section 341(f)
concerning collapsible corporations. The Company has not made any
payments, is obligated to make any payments, or is a party to any
agreement that under certain circumstances could obligate it to make any
payments that will not be deductible under Code Section 280G. The
Company is not a party to any Tax allocation or sharing agreement. The
Company (A) is and has been a member of an Affiliated Group filing a
consolidated federal income Tax Return (other than a group the common
parent of which was the Company) and (B) has any Liability for the Taxes
of any Person under Reg. Provision 1.1502-6 (or any similar provision of
state, local, or foreign law), as a transferee or successor, by
contract, or otherwise.
(i) Status of Company Shares under Securities Act. There are
currently 9,149,188 shares of the Company's Common Stock outstanding.
Of those Company Shares, _______________ shares constitute "restricted
stock" under the Securities Act.
(j) Disclosure. No representation or warranty by the Sellers
contained in this Agreement, and no statement contained in the any
document, certificate or other instrument delivered or to be delivered
by or on behalf of the Sellers pursuant to this Agreement, contains or
will contain any untrue statement of a material fact or omit or will
omit to state any material fact necessary, in light of the circumstances
under which it was or will be made, in order to make the statements
herein or therein not misleading. Sellers are aware of no fact or
circumstance which is not disclosed on the Company securities filings
which might have a material adverse effect on the Company or the Sellers
ability to complete this transaction as contemplated.
5. Pre-Closing Covenants. The Parties agree as follows with respect to
the period between the execution of this Agreement and the Closing.
(a) General. Each of the Parties will use his or its best efforts to
take all action and to do all things necessary, proper, or advisable in
order to consummate and make effective the transactions contemplated by
this Agreement (including satisfaction, but not waiver, of the closing
conditions).
(b) Notices and Consents. If and when applicable, the Sellers will
cause the Company to give any notices to third parties, and will cause
the Company to use its best efforts to obtain any third party consents,
that the Buyers may request. Each of the Parties will (and the Sellers
will cause the Company to) give any notices to, make any filings with,
and use its best efforts to obtain any authorizations, consents, and
approvals of Governmental Authorities necessary in order to consummate
the transactions contemplated hereby.
(c) Operation of Business. The Sellers will not cause or permit the
Company to engage in any practice, take any action, or enter into any
transaction outside the Ordinary Course of Business. Without limiting
the generality of the foregoing, the Sellers will not cause or permit
the Company to (i) declare, set aside, or pay any dividend or make any
distribution with respect to its capital stock or redeem, purchase, or
otherwise acquire any of its capital stock except as otherwise expressly
specified herein, (ii) issue, sell, or otherwise dispose of any of its
capital stock, or grant any options, warrants, preemptive or other
rights to purchase or obtain (including upon conversion, exchange, or
exercise) any of its capital stock, (iii) make any capital expenditures,
loans, or incur any other obligations or liabilities, (iv) enter into
any agreements involving expenditures individually, or in the aggregate,
of more than $1,000 (other than agreements for professional services
which will be paid in full at or prior to the Closing) or (ii) otherwise
engage in any practice, take any action, or enter into any transaction
out of the ordinary course of business.
(d) Preservation of Business. The Sellers will cause the Company to
keep its business and properties substantially intact, including the
filing of all required reports to be filed with the Securities and
Exchange Commission in order to maintain the Company's status as a
reporting company
(e) Full Access. Each of the Sellers will permit, and the Sellers
will cause the Company to permit, representatives of the Buyers
to have full access at all reasonable times, to all premises,
properties, personnel, accountants, customers, suppliers, third
party lenders and other third parties whose consent is required
in order to consummate the transactions contemplated hereby,
books, records (including Tax records), contracts, and documents
of or pertaining to the Company including access to the Company
transfer agent and the Company accountant and auditors.
(f) Notice of Developments. The Sellers will give prompt written
notice to the Buyers of any material adverse development causing a
breach of any of the representations and warranties in Section 4 above.
Each Party will give prompt written notice to the others of any
material adverse development causing a breach of any of his own
representations and warranties in Section 3 or 4 above.
(g) Exclusivity. None of the Sellers will (and the Sellers will not
cause or permit the Company to) (i) solicit, initiate, or encourage the
submission of any proposal or offer from any Person relating to the
acquisition of any capital stock or other voting securities, or any
assets (other than dispositions of inventory or other assets in the
Ordinary Course of Business) (including any acquisition structured as a
merger, consolidation, or share exchange) or (ii) participate in any
discussions or negotiations regarding, furnish any information with
respect to, assist or participate in, or facilitate in any other manner
any effort or attempt by any Person to do or seek any of the foregoing.
None of the Sellers will vote their Company Shares in favor of any such
acquisition structured as a merger, consolidation, or share exchange.
The Sellers will notify the Buyers immediately if any Person makes any
proposal, offer, inquiry, or contact with respect to any of the
foregoing.
6. Post-Closing Covenants. The Parties agree as follows with respect
to the period following the Closing.
(a) General. In case at any time after the Closing any further action
is necessary or desirable to carry out the purposes of this Agreement,
each of the Parties will take such further action (including the
execution and delivery of such further instruments and documents) as any
other Party may request, all at the sole cost and expense of the
requesting Party (unless the requesting Party is entitled to
indemnification). The Sellers acknowledge and agree that from and after
the Closing the Buyers designated management will be entitled to
possession of all documents, books, records (including Tax records),
agreements, and financial data of any sort relating to the Company and
Sellers agree to fully cooperate in the delivery of any and all books,
accounts, records, corporate documents and all similar such items,
including delivery of accountants notes and the consent of the
accountants for a change in accounting firms at no additional cost to
the Buyers herein.
(b) Litigation Support. In the event and for so long as any Party
actively is contesting or defending against any action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand
in connection with (i) any transaction contemplated under this Agreement
or (ii) any fact, situation, circumstance, status, condition, activity,
practice, plan, occurrence, event, incident, action, failure to act, or
transaction on or prior to the Closing Date involving the Company, each
of the other Parties will cooperate with him or it and his or its
counsel in the contest or defense, make available their personnel, and
provide such testimony and access to their books and records as shall be
necessary in connection with the contest or defense, all at the sole
cost and expense of the contesting or defending Party (unless the
contesting or defending Party is entitled to indemnification).
(c) Transition. None of the Sellers will take any action that is
designed or intended to have the effect of inhibiting this transaction.
7. Remedies for Breaches of This Agreement.
(a) Survival of Representations and Warranties.
All of the representations and warranties of the Parties, above, shall
survive the Closing hereunder (even if the Buyers knew or had reason to
know of any misrepresentation or breach of warranty at the time of
Closing) and continue in full force and effect for a period of three
years thereafter. The representations and warranties of the Sellers
contained in Sections 3(a)(i), 3(a)(ii), 3(a)(iv), 4(c) and 4(h) above
shall survive the Closing (even if the damaged Party knew or had reason
to know of any misrepresentation or breach of warranty at the time of
Closing) and continue in full force and effect forever thereafter
(subject to any applicable statutes of limitations).
(b) Indemnification Provisions for Benefit of the Buyers.
(i) In the event any of the Sellers breach (or in the event any third
party alleges facts that, if true, would mean any of the Sellers has
breached) any of their representations, warranties, and covenants
contained herein, and, if there is an applicable survival period
provided that the Buyers make a written claim for indemnification
against any of the Sellers pursuant to Section 9(h) below within such
survival period, then the Controlling Stockholder shall indemnify the
Buyers from and against the entirety of any Adverse Consequences the
Buyers may suffer through and after the date of the claim for
indemnification (including any Adverse Consequences the Buyers may
suffer after the end of any applicable survival period) resulting from,
arising out of, relating to, in the nature of, or caused by the breach
(or the alleged breach).
(ii) The Controlling Stockholders shall indemnify the Buyers from and
against the entirety of any Adverse Consequences the Buyers may suffer
resulting from, arising out of, relating to, in the nature of, or caused
by any Liability of the Company (whether or not accrued or otherwise
disclosed) (x) for any Taxes of the Company with respect to any Tax year
or portion thereof ending on or before the Closing Date (or for any Tax
year beginning before and ending after the Closing Date to the extent
allocable to the portion of such period beginning before and ending on
the Closing Date) and (y) for the unpaid Taxes of any Person (other than
the Company) under Reg. Provision 1.1502-6 (or any similar provision of
state, local, or foreign law), as a transferee or successor, by
contract, or otherwise.
(iii) The Controlling Stockholders shall indemnify the Buyers from and
against the entirety of any Adverse Consequences the Buyers may suffer
resulting from, arising out of, relating to, in the nature of, or caused
by (A) any Liabilities arising out of the ownership of the capital stock
of, or the use or operation of the business of the Company prior to the
Closing and (B) any other business or operations (other than of the
Company) owned in whole or in part by any of the Sellers.
(iv) The Controlling Stockholders shall indemnify the Buyers from and
against the entirety of any Adverse Consequences the Buyers may suffer
resulting from, arising out of, relating to, in the nature of, or caused
by any Indebtedness of the Company or any Subsidiary existing as of the
Closing Date.
(c) Indemnification Provisions for Benefit of the Sellers. In
the event the Buyers breach (or in the event any third party alleges
facts that, if true, would mean the Buyers have breached) any of its
representations, warranties, and covenants contained herein, and, if
there is an applicable survival period, provided that any of the Sellers
makes a written claim for indemnification against the Buyers pursuant to
Section 9(h) below within such survival period, then the Buyers shall
indemnify each of the Sellers from and against the entirety of any
Adverse Consequences the Sellers may suffer through and after the date
of the claim for indemnification (including any Adverse Consequences the
Sellers may suffer after the end of any applicable survival period)
resulting from, arising out of, relating to, in the nature of, or caused
by the breach (or the alleged breach).
(d) Matters Involving Third Parties.
(i) If any third party shall notify any Party (the "Indemnified Party")
with respect to any matter (a "Third Party Claim") which may give rise
to a claim for indemnification against any other Party (the
"Indemnifying Party") under this Section 7, then the Indemnified Party
shall promptly notify each Indemnifying Party thereof in writing;
provided, however, that no delay on the part of the Indemnified Party in
notifying any Indemnifying Party shall relieve the Indemnifying Party
from any obligation hereunder unless (and then solely to the extent) the
Indemnifying Party thereby is prejudiced.
(ii) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its
choice reasonably satisfactory to the Indemnified Party so long as (A)
the Indemnifying Party notifies the Indemnified Party in writing within
10 days after the Indemnified Party has given notice of the Third Party
Claim that the Indemnifying Party will indemnify the Indemnified Party
from and against the entirety of any Adverse Consequences the
Indemnified Party may suffer resulting from, arising out of, relating
to, in the nature of, or caused by the Third Party Claim, (B) the
Indemnifying Party provides the Indemnified Party with evidence
reasonably acceptable to the Indemnified Party that the Indemnifying
Party will have the financial resources to defend against the Third
Party Claim and fulfill its indemnification obligations hereunder, (C)
the Third Party Claim involves only money damages and does not seek an
injunction or other equitable relief, (D) settlement of, or an adverse
judgment with respect to, the Third Party Claim is not, in the good
faith judgment of the Indemnified Party, likely to establish a precedent
or practice adverse to the continuing business interests of the
Indemnified Party, and (E) the Indemnifying Party conducts the defense
of the Third Party Claim actively and diligently.
(iii) So long as the Indemnifying Party is conducting the defense of
the Third Party Claim in accordance with Section 7(d)(ii) above, (A) the
Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Third Party Claim, (B) the
Indemnified Party will not consent to the entry of any judgment or enter
into any settlement with respect to the Third Party Claim without the
prior written consent of the Indemnifying Party (not to be withheld
unreasonably), and (C) the Indemnifying Party will not consent to the
entry of any judgment or enter into any settlement with respect to the
Third Party Claim without the prior written consent of the Indemnified
Party (not to be withheld unreasonably).
(iv) In the event any of the conditions in Section 7(d)(ii) above is or
becomes unsatisfied, however, (A) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any
settlement with respect to, the Third Party Claim in any manner it
reasonably may deem appropriate (and the Indemnified Party need not
consult with, or obtain any consent from, any Indemnifying Party in
connection therewith), (B) the Indemnifying Parties will reimburse the
Indemnified Party promptly and periodically for the costs of defending
against the Third Party Claim (including attorneys' fees and expenses),
and (C) the Indemnifying Parties will remain responsible for any Adverse
Consequences the Indemnified Party may suffer resulting from, arising
out of, relating to, in the nature of, or caused by the Third Party
Claim to the fullest extent provided in this Section 7.
(e) Other Indemnification Provisions. Each of the Sellers hereby
agrees that he or it will not make any claim for indemnification against
the Company by reason of the fact that he or it was a director, officer,
employee, or agent of any such entity or was serving at the request of
any such entity as a partner, trustee, director, officer, employee, or
agent of another entity (whether such claim is for judgments, damages,
penalties, fines, costs, amounts paid in settlement, losses, expenses,
or otherwise and whether such claim is pursuant to any statute, charter
document, bylaw, agreement, or otherwise) with respect to any action,
suit, proceeding, complaint, claim, or demand brought by the Buyers
against such Seller (whether such action, suit, proceeding, complaint,
claim, or demand is pursuant to this Agreement, applicable law, or
otherwise).
8. Tax Matters. The following provisions shall govern the allocation
of responsibility as between Buyers and Sellers for certain tax matters
following the Closing Date:
(a) Tax Periods Ending on or Before the Closing Date. Buyers shall
prepare or cause to be prepared and file or cause to be filed all Tax
Returns for the Company for all periods ending on or prior to the
Closing Date, which are filed after the Closing Date. The Buyers shall
permit the Sellers to review and comment on each such Tax Return
described in the preceding sentence prior to filing.
(b) Tax Periods Beginning Before and Ending After the Closing Date.
Buyers shall prepare or cause to be prepared and file or cause to be
filed any Tax Returns of the Company for Tax periods that begin before
the Closing Date and end after the Closing Date. Buyers shall permit
the Sellers to review and comment on each such Tax Return described in
the preceding sentence prior to filing. Sellers shall pay to Buyers
within fifteen (15) days after the date on which Taxes are paid with
respect to such periods an amount equal to the portion of such Taxes
that relate to the portion of such Taxable period ending on the Closing
Date. For purposes of this Section, in the case of any Taxes that are
imposed on a periodic basis and are payable for a Taxable period that
includes (but does not end on) the Closing Date, the portion of such Tax
which relates to the portion of such Taxable period ending on the
Closing Date shall (x) in the case of any Taxes other than Taxes based
upon or related to income or receipts, be deemed to be the amount of
such Tax for the entire Taxable period multiplied by a fraction the
numerator of which is the number of days in the Taxable period ending on
the Closing Date and the denominator of which is the number of days in
the entire Taxable period, and (y) in the case of any Tax based upon or
related to income or receipts, be deemed equal to the amount which would
be payable if the relevant Taxable period ended on the Closing Date.
Any credits relating to a Taxable period that begins before and ends
after the Closing Date shall be taken into account as though the
relevant Taxable period ended on the Closing Date. All determinations
necessary to give effect to the foregoing allocations shall be made in a
manner consistent with prior practice of the Company.
(c) Cooperation on Tax Matters.
(i) The Buyers, the Company and Sellers shall cooperate fully, as and
to the extent reasonably requested by the other party, in connection
with the filing of Tax Returns pursuant to this Section and any audit,
litigation or other proceeding with respect to Taxes. Such cooperation
shall include the retention and (upon the other party's request) the
provision of records and information which are reasonably relevant to
any such audit, litigation or other proceeding and making employees
available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. The
Company and the Sellers agree (A) to retain all books and records with
respect to Tax matters pertinent to the Company relating to any taxable
period beginning before the Closing Date until the expiration of the
statute of limitations (and, to the extent notified by Buyers or
Sellers, any extensions thereof) of the respective taxable periods, and
to abide by all record retention agreements entered into with any taxing
authority, and (B) to give the other party reasonable written notice
prior to transferring, destroying or discarding any such books and
records and, if the other party so requests, the Company or the Sellers,
as the case may be, shall allow the other party to take possession of
such books and records.
(ii) The Buyers and Sellers further agree, upon request, to use their
best efforts to obtain any certificate or other document from any
Governmental Authority or any other Person as may be necessary to
mitigate, reduce or eliminate any Tax that could be imposed (including,
but not limited to, with respect to the transactions contemplated
hereby) without the imposition of a countervailing Tax or loss of Tax
attributes on or by the Party to whom such request is directed.
(d) Tax Sharing Agreements. All tax sharing agreements or similar
agreements with respect to or involving the Company shall be terminated
as of the Closing Date and, after the Closing Date, the Company shall
not be bound thereby or have any liability thereunder.
(e) Certain Taxes. All transfer, documentary, sales, use, stamp,
registration and other such Taxes and fees (including any penalties and
interest) incurred in connection with this Agreement shall be paid by
Sellers when due, and Sellers will, at their own expense, file all
necessary Tax Returns and other documentation with respect to all such
transfer, documentary, sales, use, stamp, registration and other Taxes
and fees, and, if required by applicable law, the Buyers will, and will
cause its affiliates to, join in the execution of any such Tax Returns
and other documentation.
9. Miscellaneous.
(a) Release. Each Seller hereby acknowledges that the Indemnified
Party (as defined below) are expressly relying on this release provision
in consummating the transactions contemplated by this Agreement, and
would not consummate such transactions but for this release provision.
Each Seller hereby acknowledges, confirms and agrees that such Seller
(a) is the exclusive owner of the Company Shares being sold by such
Seller to the Buyers hereunder, (b) does not have any equity interest in
the Company other than the Company Shares being sold to the Buyers
hereunder, and (c) does not have any rights to any additional shares of
the capital stock or any other securities of the Company, including any
options, warrants, conversion privileges, preemptive rights or other
rights or agreements.
Each Seller, on behalf of such Seller and each of such Seller's
respective Affiliates (if any), hereby releases and forever discharges
each Buyer, the Company and their respective Affiliates, officers,
directors, employees and agents (collectively, the "Indemnified Party")
from any and all claims, demands, judgments, proceedings, causes of
action, orders, obligations, contracts, agreements, liens, accounts,
costs and expenses (including attorney's fees and court costs), debts
and liabilities whatsoever, whether known or unknown, suspected or
unsuspected, matured or un-matured, both at law (including federal and
state securities laws) and in equity, which such Seller or any of such
Seller's respective Affiliates now have, have ever had or may hereafter
have against the Indemnified Party arising contemporaneously with or
prior to the date of this Agreement or on account of or arising out of
any matter, cause, event or omission occurring contemporaneously with or
prior to the date of this Agreement, including, but not limited to, any
rights to indemnification or reimbursement from the Company, whether
pursuant to the Company's articles of organization, resolution, contract
or otherwise and whether or not relating to claims pending on, or
asserted after, the date of this Release; provided, however, that
nothing contained herein shall operate to release any obligations of the
Buyer to the Sellers arising exclusively as a result of this Agreement.
Each Seller hereby irrevocably covenants to refrain from, directly or
indirectly, asserting any claim or demand, or commencing, instituting or
causing to be commenced, any proceeding of any kind against any
Indemnified Party, based upon any matter purported to be released
hereby.
Without in any way limiting any of the rights and remedies otherwise
available to any Indemnified Party, each Seller shall indemnify and hold
harmless each Indemnified Party from and against all actions, suits,
proceedings, hearings, investigations, charges, complaints, claims,
demands, injunctions, judgments, orders, decrees, rulings, damages,
dues, penalties, fines, costs, amounts paid in settlement, liabilities,
obligations, security interests, taxes, liens, losses, lost value,
expenses and fees arising directly or indirectly from or in connection
with (i) the assertion by or on behalf of such Seller or such Seller's
Affiliates of any claim or other matter purported to be released
pursuant to this provision and (ii) the assertion by any third party of
any claim or demand against any Indemnified Party which claim or demand
arises directly or indirectly from, or in connection with, any assertion
by or on behalf of such Seller, or any of such Seller's Affiliates
against any third party of any claims or other matters purported to be
released pursuant to this provision.
(b) Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject
matter of this Agreement without the prior written approval of the Buyer
Representative; provided, however, that any Party may make any public
disclosure it believes in good faith is required by applicable law or
any listing or trading agreement concerning its publicly-traded
securities (in which case the disclosing Party will use its best efforts
to advise the other Parties prior to making the disclosure).
(c) No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
(d) Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by
or among the Parties, written or oral, to the extent they related in any
way to the subject matter hereof.
(e) Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their
respective successors and permitted assigns. No Party may assign either
this Agreement or any of his or its rights, interests, or obligations
hereunder without the prior written approval of the Buyer Representative
and the Seller Representative; provided, however, that the Buyers may
(i) assign any or all of its rights and interests hereunder to one or
more of its Affiliates or to any other designee, and (ii) designate one
or more of its Affiliates or any other designee to perform its
obligations hereunder (in any or all of which cases the Buyers
nonetheless shall remain responsible for the performance of all of their
obligations hereunder).
(f) Counterparts; Facsimile Execution. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original
but all of which together will constitute one and the same instrument.
Facsimile execution of this Agreement shall be legal, valid and binding
for all purposes.
(g) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
(h) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request,
demand, claim, or other communication hereunder shall be deemed duly
given if (and then two business days after) it is sent by registered or
certified mail, return receipt requested, postage prepaid, and addressed
to the intended recipient as set forth below:
If to the Sellers: To those Sellers Listed in Exhibit "B"
If to the Buyers: Ms. Camila Maz
506 Gerona Avenue
Coral Gables, FL 33146
With a Copy to: Thomas F. Pierson, P.C.
1140 Highway 287 Suite 400-274
Broomfield, Co. 80020
thomaspiersonpc@yahoo.com
954-489-1210 Phone
240-266-5659 Facsimile
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set
forth above using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, or
electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until
it actually is received by the intended recipient. Any Party may change
the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.
(i) Governing Law. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of Nevada without
giving effect to any choice or conflict of law provision or rule
(whether of the State of Nevada or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the
State of Nevada.
(j) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed
by the Buyer Representative and the Seller Representative. No waiver by
any Party of any default, misrepresentation, or breach of warranty or
covenant hereunder, whether intentional or not, shall be deemed to
extend to any prior or subsequent default, misrepresentation, or breach
of warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent such occurrence.
(k) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the offending
term or provision in any other situation or in any other jurisdiction.
(l) Expenses. Each of the Parties will bear his or its own costs and
expenses (including legal fees and expenses) incurred in connection with
this Agreement and the transactions contemplated hereby. The Sellers
agree that the Company has not borne or will bear any of the Sellers'
costs and expenses (including any of their legal fees and expenses) in
connection with this Agreement or any of the transactions contemplated
hereby, including, without limitation, the declaration and payment by
the Company of a dividend of the shares of capital stock of its only
subsidiary.
(m) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity
or question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the Parties and no presumption or
burden of proof shall arise favoring or disfavoring any Party by virtue
of the authorship of any of the provisions of this Agreement. Any
reference to any federal, state or local statute or law shall be deemed
also to refer to all rules and regulations promulgated thereunder,
unless the context requires otherwise. The word "including" shall mean
including without limitation. The Parties intend that each
representation, warranty, and covenant contained herein shall have
independent significance. If any Party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that
there exists another representation, warranty, or covenant relating to
the same subject matter (regardless of the relative levels of
specificity) which the Party has not breached shall not detract from or
mitigate the fact that the Party is in breach of the first
representation, warranty, or covenant. Nothing in the Disclosure
Schedule shall be deemed adequate to disclose an exception to a
representation or warranty made herein, however, unless the Disclosure
Schedule identifies the exception with particularity and describes the
relevant facts in detail. Without limiting the generality of the
foregoing, the mere listing (or inclusion of a copy) of a document or
other item shall not be deemed adequate to disclose an exception to a
representation or warranty made herein (unless the representation or
warranty has to do with the existence of the document or other item
itself).
(n) Incorporation of Exhibits, Annexes, and Schedules. The Exhibits,
Annexes, and Schedules identified in this Agreement are incorporated
herein by reference and made a part hereof.
(o) Specific Performance. Each of the Parties acknowledges and agrees
that the other Parties would be damaged irreparably in the event any of
the provisions of this Agreement are not performed in accordance with
their specific terms or otherwise are breached. Accordingly, each of
the Parties agrees that the other Parties shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any action instituted in any court of the United
States or any state thereof having jurisdiction over the Parties and the
matter (subject to the provisions set forth in paragraph 9(p) below), in
addition to any other remedy to which they may be entitled, at law or in
equity.
(p) Submission to Jurisdiction. Each of the Parties submits to the
jurisdiction of any state or federal court sitting in Nevada, in any
action or proceeding arising out of or relating to this Agreement and
agrees that all claims in respect of the action or proceeding may be
heard and determined in any such court. Each of the Parties waives any
defense of inconvenient forum to the maintenance of any action or
proceeding so brought and waives any bond, surety, or other security
that might be required of any other Party with respect thereto. Any
Party may make service on any other Party by sending or delivering a
copy of the process to the Party to be served at the address and in the
manner provided for the giving of notices in '9(h) above. Nothing in
this '9(p), however, shall affect the right of any Party to bring any
action or proceeding arising out of or relating to this Agreement in any
other court or to serve legal process in any other manner permitted by
law or at equity. Each Party agrees that a final judgment in any action
or proceeding so brought shall be conclusive and may be enforced by suit
on the judgment or in any other manner provided by law or at equity.
[Signature page follows]
[Buyers Signature Page]
IN WITNESS WHEREOF, the undersigned Buyer has executed this Agreement as
of the date first above written.
BUYERS:
By: /s/Maria Camila Maz
----------------------
Maria Camila Maz, Buyers' Agent
[Seller Signature Page]
IN WITNESS WHEREOF, the undersigned Seller has executed this Agreement
as of the date first above written.
SELLERS:
/s/Jerome Jolly
- -----------------------
Jerome Jolly
/s/Grady Johnson
- -----------------------
Grady Johnson
EXHIBIT "A"
BUYERS
BUYER: Maria Camile Maz
ADDRESS: 506 Gerona Avenue
Coral Gables, FL 33146
BUYER:
ADDRESS
EXHIBIT "B"
SELLERS
SELLER: JEROME JOLLY
ADDRESS:
SELLER: GRADY JOHNSON
ADDRESS:
APPENDIX A
DEFINITIONS
As used herein, the following terms have the respective meanings set
forth below:
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings, damages, dues, penalties, fines,
costs, amounts paid in settlement, Liabilities, obligations, Taxes,
liens, losses, lost value, expenses, and fees, including court costs and
attorneys' fees and expenses.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Affiliated Group" means any affiliated group within the meaning of Code
Section 1504(a) or any similar group defined under a similar provision
of state or local law.
"Buyer(s)" has the meaning set forth in the preface above.
"Closing" has the meaning set forth in Section 2(d) above.
"Closing Date" has the meaning set forth in Section 2(d) above.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" has the meaning set forth in the recitals above.
"Company Share" means any share of the Common Stock, par value $0.001
per share, of the Company.
"Confidential Information" means any information concerning the
businesses and affairs of the Company and the Buyers and its Affiliates
that is not already generally available to the public and shall include
any and all information relating to the price and terms of this
Agreement.
"Disclosure Schedule" has the meaning set forth in Section 4 above.
Section
"Financial Statements" has the meaning set forth in Section 4(d) above.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"Governmental Authority" means any federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, or any court of the United States of America or any
political subdivision thereof, or of any other country.
"Indebtedness" of any Person means, in each case whether or not accrued
on the books of such Person, (a) all indebtedness of such Person for
borrowed money or for the deferred purchase price of property or
services, (b) all obligations of such Person upon which interest charges
are customarily paid or which are evidenced by notes, bonds, debentures,
credit agreements or similar agreements or investments, (c) all
obligations of such Person under conditional sale or other title
retention agreements relating to property or assets purchased by such
Person, (d) all obligations of such Person under capitalized leases, (e)
all obligations of such Person in respect of acceptances, letters of
credit or letters of guaranty issued or created for the account of such
Person, and (f) all liabilities secured by any Security Interest on any
property owned by such Person, whether or not such Person has assumed or
otherwise become liable for the payment thereof.
Section
"Indemnified Party" has the meaning set forth in paragraph 7(d)(i)
above.
"Indemnifying Party" has the meaning set forth in paragraph 7(d)(i)
above.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued
or un-accrued, whether liquidated or un-liquidated, and whether due or
to become due), including any liability for Taxes.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to
quantity and frequency).
"Parties" has the meaning set forth in the preface above.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization, or a governmental entity
(or any department, agency, or political subdivision thereof).
"Purchase Price" has the meaning set forth in paragraph 2(c) above.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Interest" means any adverse claim, mortgage, pledge, lien,
encumbrance, option, restriction on transfer, easement, right of way,
matter of survey, charge, or other security interest.
"Sellers" has the meaning set forth in the preface above.
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or
has the power to vote or direct the voting of sufficient securities to
elect a majority of the directors.
"Tax" means any federal, state or local income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Code '59A),
customs duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative
or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed
or not.
"Tax Liability" has the meaning set forth in paragraph 4(h)(iii) above.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Third Party Claim" has the meaning set forth in paragraph 7(d)(i)
above.
SCHEDULE I
PURCHASE AND SALE OF COMPANY SHARES
AND
DISBURSEMENT OF FUNDS
SELLERS:
Name of Seller Address of Seller Number of Company Shares
Jerome Jolly 4,312,500
Name of Seller Address of Seller Number of Company Shares
Grady Johnson 1,437,500
BUYERS: As designated by Buyers' Representative.
DISBURSEMENT OF ESCROW FUNDS: As designated in Escrow Agreement.
SCHEDULE II
ESCROW INSTRUCTIONS
SCHEDULE III
DISCLOSURE SCHEDULE
4
20