STOCK EXCHANGE AGREEMENT
Agreement dated as of September 8, 1999 between Ballynagee
Acquisition Corporation, a Delaware corporation
("Ballynagee"), and Talk Stock with Me, Inc., a Nevada
corporation ("Talk Stock").
The parties agree as follows:
1. THE ACQUISITION
1.1 Purchase and Sale Subject to the terms and
conditions of this Agreement. At the Closing to be held
as provided in Section 2, Ballynagee shall sell the
Ballynagee Shares (defined below) to the shareholders of
Talk Stock, and the shareholders of Talk Stock shall
purchase the Ballynagee Shares from Ballynagee, free and
clear of all Encumbrances other than restrictions imposed
by Federal and State securities laws.
1.2 Purchase Price. Ballynagee will exchange
10,000,000 shares of its restricted common stock (the
"Ballynagee Shares") for all of the outstanding common
shares and preferred shares of Talk Stock (the "Talk Stock
Shares"). The Ballynagee Shares shall be issued and
delivered to the Shareholders of Talk Stock and others as
set forth in Exhibit "A" hereto.
2. THE CLOSING.
2.1 Place and Time. The closing of the sale and
exchange of the Ballynagee Shares for the Talk Stock
Shares (the "Closing") shall take place at the Law Offices
of M. Richard Cutler, 610 Newport Center Drive, Suite 800,
Newport Beach, CA 92660 on September 13, 1999, or at such
other place, date and time as the parties may agree in
writing.
2.2 Deliveries by Talk Stock. At the Closing, Talk
Stock shall deliver the following to Ballynagee:
a. Certificates representing the Talk Stock Shares, duly
endorsed for transfer to Ballynagee and accompanied by any
applicable stock transfer tax stamps; Talk Stock shall
immediately change those certificates for, and to deliver
to Ballynagee at the Closing, a certificate representing
the Talk Stock Shares registered in the name of Ballynagee
(without any legend or other reference to any Encumbrance).
b. The documents contemplated by Section 3.
c. All other documents, instruments and writings required
by this Agreement to be delivered by Talk Stock at the
Closing and any other documents or records relating to
Talk Stock's business reasonably requested by Ballynagee
in connection with this Agreement.
2.3 Deliveries by Ballynagee. At the Closing,
Ballynagee shall deliver the following to Talk Stock:
a. The Ballynagee Shares for further delivery to the Talk
Stock shareholders as contemplated by section 1.
b. The documents contemplated by Section 4.
c. All other documents, instruments and writings required
by this Agreement to be delivered by Ballynagee at the
Closing.
3. CONDITIONS TO BALLYNAGEE'S OBLIGATIONS.
The obligations of Ballynagee to effect the Closing shall
be subject to the satisfaction at or prior to the Closing
of the following conditions, any one or more of which may
be waived by Ballynagee:
3.1 No Injunction. There shall not be in effect any
injunction, order or decree of a court of competent
jurisdiction that prevents the consummation of the
transactions contemplated by this Agreement, that
prohibits Ballynagee's acquisition of the Talk Stock
Shares or the Ballynagee Shares or that will require any
divestiture as a result of Ballynagee's acquisition of the
Talk Stock Shares or that will require all or any part of
the business of Ballynagee to be held separate and no
litigation or proceedings seeking the issuance of such an
injunction, order or decree or seeking to impose
substantial penalties on Ballynagee or Talk Stock if this
Agreement is consummated shall be pending.
3.2 Representations, Warranties and Agreements. (a)
The representations and warranties of Talk Stock set forth
in this Agreement shall be true and complete in all
material respects as of the Closing Date as though made at
such time, (b) Talk Stock shall have performed and
complied in all material respects with the agreements
contained in this Agreement required to be performed and
complied with by it at or prior to the Closing and (c)
Ballynagee shall have received a certificate to that
effect signed by an authorized representative of Talk Stock.
3.3 Regulatory Approvals. All licenses,
authorizations, consents, orders and regulatory approvals
of Governmental Bodies necessary for the consummation of
Ballynagee's acquisition of the Talk Stock Shares shall
have been obtained and shall be in full force and effect.
4. CONDITIONS TO TALK STOCK'S OBLIGATIONS.
The obligations of Talk Stock to effect the Closing shall
be subject to the satisfaction at or prior to the Closing
of the following conditions, any one or more of which may
be waived by Talk Stock:
4.1 No Injunction. There shall not be in effect any
injunction, order or decree of a court of competent
jurisdiction that prevents the consummation of the
transactions contemplated by this Agreement, that
prohibits Ballynagee's acquisition of the Talk Stock
Shares or Talk Stock's acquisition of the Ballynagee
Shares or that will require any divestiture as a result of
Ballynagee's acquisition of the Shares or Talk Stock's
acquisition of the Ballynagee Shares or that will require
all or any part of the business of Ballynagee or Talk
Stock to be held separate and no litigation or proceedings
seeking the issuance of such an injunction, order or
decree or seeking to impose substantial penalties on
Ballynagee or Talk Stock if this Agreement is consummated
shall be pending.
4.2 Representations, Warranties and Agreements. (a)
The representations and warranties of Ballynagee set forth
in this Agreement shall be true and complete in all
material respects as of the Closing Date as though made at
such time, (b) Ballynagee shall have performed and
complied in all material respects with the agreements
contained in this Agreement required to be performed and
complied with by it at or prior to the Closing and (c)
Talk Stock shall have received a certificate to that
effect signed by an authorized representative of Ballynagee.
4.3 Regulatory Approvals. All licenses,
authorizations, consents, orders and regulatory approvals
of Governmental Bodies necessary for the consummation of
Ballynagee's acquisition of the Talk Stock Shares and Talk
Stock's acquisition of the Ballynagee Shares shall have
been obtained and shall be in full force and effect.
4.4 Resignations of Director. All directors of
Ballynagee whose resignations shall have been requested by
Talk Stock shall have submitted their resignations or been
removed effective as of the Closing Date.
5. REPRESENTATIONS AND WARRANTIES OF TALK STOCK.
Talk Stock represents and warrants to Ballynagee that, to
the Knowledge of Talk Stock (which limitation shall not
apply to Section 5.3), and except as set forth in the Talk
Stock Disclosure Letter:
5.1 Organization of Talk Stock; Authorization. Talk
Stock is a corporation duly organized, validly existing
and in good standing under the laws of Nevada with full
corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder. The
execution, delivery and performance of this Agreement have
been duly authorized by all necessary corporate action of
Talk Stock and this Agreement constitutes a valid and
binding obligation of Talk Stock; enforceable against it
in accordance with its terms.
5.2 Capitalization. The authorized capital stock of
Talk Stock consists of 100,000 authorized shares,
consisting of 100,000 common stock, par value $.01 per
share, and no preferred shares, of which 1,000 common
shares are presently issued and outstanding. No shares
have been registered under state or federal securities
laws. As of the Closing Date, all of the issued and
outstanding shares of common stock of Talk Stock are
validly issued, fully paid and non-assessable. There are
not outstanding any warrants, options or other agreements
on the part of Talk Stock obligating Talk Stock to issue
any additional shares of common or preferred stock or any
of its securities of any kind. Except as otherwise set
forth herein, Talk Stock will not issue any shares of
capital stock from the date of this Agreement through the
Closing Date.
5.3 No Conflict as to Talk Stock. Neither the
execution and delivery of this Agreement nor the
consummation of the sale of the Talk Stock Shares to
Ballynagee will (a) violate any provision of the
certificate of incorporation or by-laws of Talk Stock or
(b) violate, be in conflict with, or constitute a default
(or an event which, with notice or lapse of time or both,
would constitute a default) under any agreement to which
Talk Stock is a party or (c) violate any statute or law or
any judgment, decree, order, regulation or rule of any
court or other Governmental Body applicable to Talk Stock.
5.4 Ownership of Talk Stock Shares. The delivery of
certificates to Ballynagee provided in Section 2.2 and the
payment to Talk Stock provided in Section 2.3 will result
in Ballynagee's immediate acquisition of record and
beneficial ownership of the Talk Stock Shares, free and
clear of all Encumbrances subject to applicable State and
Federal securities laws. There are no outstanding options,
rights, conversion rights, agreements or commitments of
any kind relating to the issuance,
sale or transfer of any Equity Securities or other securities
of Talk Stock.
5.5 No Conflict as to Talk Stock and Subsidiaries.
Neither the execution and delivery of this Agreement nor
the consummation of the sale of the Talk Stock Shares to
Ballynagee will (a) violate any provision of the
certificate of incorporation or by-laws (or other
governing instrument) of Talk Stock or any of its
Subsidiaries or (b) violate, or be in conflict with, or
constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under,
or result in the termination of, or accelerate the
performance required by, or excuse performance by any
Person of any of its obligations under, or cause the
acceleration of the maturity of any debt or obligation
pursuant to, or result in the creation or imposition of
any Encumbrance upon any property or assets of Talk Stock
or any of its Subsidiaries under, any material agreement
or commitment to which Talk Stock or any of its
Subsidiaries is a party or by which any of their
respective property or assets is bound, or to which any of
the property or assets of Talk Stock or any of its
Subsidiaries is subject, or (c) violate any statute or law
or any judgment, decree, order, regulation or rule of any
court or other Governmental Body applicable to Talk Stock
or any of its Subsidiaries except, in the case of
violations, conflicts, defaults, terminations,
accelerations or Encumbrances described in clause (b) of
this Section 5.5, for such matters which are not likely to
have a material adverse effect on the business or
financial condition of Talk Stock and its Subsidiaries,
taken as a whole.
5.6 Consents and Approvals of Governmental
Authorities. Except with respect to applicable State and
Federal securities laws, no consent, approval or
authorization of, or declaration, filing or registration
with, any Governmental Body is required to be made or
obtained by Talk Stock or Ballynagee or any of its
Subsidiaries in connection with the execution, delivery
and performance of this Agreement by Talk Stock or the
consummation of the sale of the Talk Stock Shares to
Ballynagee.
5.7 Other Consents. No consent of any Person is
required to be obtained by Talk Stock or Ballynagee to the
execution, delivery and performance of this Agreement or
the consummation of the sale of the Talk Stock Shares to
Ballynagee, including, but not limited to, consents from
parties to leases or other agreements or commitments,
except for any consent which the failure to obtain would
not be likely to have a material adverse effect on the
business and financial condition of Talk Stock or Ballynagee.
5.8 Financial Statements. Talk Stock has delivered
to Ballynagee consolidated balance sheets of Talk Stock
and its Subsidiaries as at December 31, 1998, and
statements of income and changes in financial position for
the period from inception to the period then ended,
together
with the report thereon of Talk Stock's
independent accountant (the "Talk Stock Financial
Statements"). Such Talk Stock Financial Statements are
internally prepared and unaudited but fairly present the
consolidated financial condition and results of operations
of Talk Stock and its Subsidiaries as at the respective
dates thereof and for the periods therein referred to, all
in accordance with generally accepted United States
accounting principles consistently applied throughout the
periods involved, except as set forth in the notes thereto.
5.9 Title to Properties. Either Talk Stock or one
of its Subsidiaries owns all the material properties and
assets that they purport to own (real, personal and mixed,
tangible and intangible), including, without limitation,
all the material properties and assets reflected in the
Talk Stock Financial Statements (except for property sold
since the date of the Talk Stock Financial Statements in
the ordinary course of business or leased under
capitalized leases), and all the material properties and
assets purchased or otherwise acquired by Talk Stock or
any of its Subsidiaries since the date of the Talk Stock
Financial Statements. All properties and assets reflected
in the Talk Stock Financial Statements are free and clear
of all material Encumbrances and are not, in the case of
real property, subject to any material rights of way,
building use restrictions, exceptions, variances,
reservations or limitations of any nature whatsoever
except, with respect to all such properties and assets,
(a) mortgages or security interests shown on the Talk
Stock Financial Statements as securing specified
liabilities or obligations, with respect to which no
default (or event which, with notice or lapse of time or
both, would constitute a default) exists, and all of which
are listed in the Talk Stock Disclosure Letter, (b)
mortgages or security interests incurred in connection
with the purchase of property or assets after the date of
the Talk Stock Financial Statements (such mortgages and
security interests being limited to the property or assets
so acquired), with respect to which no default (or event
which, with notice or lapse of time or both, would
constitute a default) exists, (c) as to real property, (i)
imperfections of title, if any, none of which materially
detracts from the value or impairs the use of the property
subject thereto, or impairs the operations of Talk Stock
or any of its Subsidiaries and (ii) zoning laws that do
not impair the present or anticipated use of the property
subject thereto, and (d) liens for current taxes not yet
due. The properties and assets of Talk Stock and its
Subsidiaries include all rights, properties and other
assets necessary to permit Talk Stock and its
Subsidiaries to conduct Talk Stock's business in all
material respects in the same manner as it is conducted on
the date of this Agreement.
5.10 Buildings, Plants and Equipment. The buildings,
plants, structures and material items of equipment and
other personal property owned or leased by Talk Stock or
its Subsidiaries are, in all respects material to the
business or financial condition of Talk Stock and its
Subsidiaries, taken as a whole, in good operating
condition and repair (ordinary wear and tear excepted) and
are adequate in all such respects for the purposes for
which they are being used. Talk Stock has not received
notification that it or any of its Subsidiaries is in
violation of any applicable building, zoning,
anti-pollution, health, safety or other law, ordinance or
regulation in respect of its buildings, plants or
structures or their operations, which violation is likely
to have a material adverse effect on the business or
financial condition of Talk Stock and its Subsidiaries,
taken as a whole or which would require a payment by Talk
Stock or Ballynagee or any of their subsidiaries in excess
of $2,000 in the aggregate, and which has not been cured.
5.11 No Condemnation or Expropriation. Neither the
whole nor any portion of the property or leaseholds owned
or held by Talk Stock or any of its Subsidiaries is
subject to any governmental decree or order to be sold or
is being condemned, expropriated or otherwise taken by any
Governmental Body or other Person with or without payment
of compensation therefor, which action is likely to have a
material adverse effect on the business or financial
condition of Ballynagee and its Subsidiaries, taken as a
whole.
5.12 Litigation. There is no action, suit, inquiry,
proceeding or investigation by or before any court or
Governmental Body pending or threatened in writing against
or involving Talk Stock or any of its Subsidiaries which
is likely to have a material adverse effect on the
business or financial condition of Talk Stock, Ballynagee
and any of their Subsidiaries, taken as whole, or which
would require a payment by Talk Stock or its subsidiaries
in excess of $2,000 in the aggregate or which questions
or challenges the validity of this Agreement. Neither
Talk Stock nor any or its Subsidiaries is subject to any
judgment, order or decree that is likely to have a
material adverse effect on the business or financial
condition of Talk Stock, Ballynagee or any of their
Subsidiaries, taken as a whole, or which would require a
payment by Talk Stock or its subsidiaries in excess of
$2,000 in the aggregate.
5.13 Absence of Certain Changes. Since the date of
the Talk Stock Financial Statements, neither Talk Stock
nor any of its Subsidiaries has:
a. suffered the damage or destruction of any of its
properties or assets (whether or not covered by insurance)
which is materially
adverse to the business or financial
condition of Talk Stock and its Subsidiaries, taken as a
whole, or made any disposition of any of its material
properties or assets other than in the ordinary course of
business;
b. made any change or amendment in its certificate of
incorporation or by-laws, or other governing instruments;
c. issued or sold any Equity Securities or other
securities, acquired, directly or indirectly, by
redemption or otherwise, any such Equity Securities,
reclassified, split-up or otherwise changed any such
Equity Security, or granted or entered into any options,
warrants, calls or commitments of any kind with respect
thereto;
d. organized any new Subsidiary or acquired any Equity
Securities of any Person or any equity or ownership
interest in any business;
e. borrowed any funds or incurred, or assumed or become
subject to, whether directly or by way of guarantee or
otherwise, any obligation or liability with respect to any
such indebtedness for borrowed money;
f. paid, discharged or satisfied any material claim,
liability or obligation (absolute, accrued, contingent or
otherwise), other than in the ordinary course of business;
g. prepaid any material obligation having a maturity of
more than 90 days from the date such obligation was issued
or incurred;
h. canceled any material debts or waived any material
claims or rights, except in the ordinary course of
business;
i. disposed of or permitted to lapse any rights to the
use of any material patent or registered trademark or
copyright or other intellectual property owned or used by
it;
j. granted any general increase in the compensation of
officers or employees (including any such increase
pursuant to any employee benefit plan);
k. purchased or entered into any contract or commitment
to purchase any material quantity of raw materials or
supplies, or sold or entered into any contract or
commitment to sell any material quantity of property or
assets, except (i) normal contracts or commitments for the
purchase of, and normal purchases of, raw
materials or supplies, made in the ordinary course business,
(ii) normal contracts or commitments for the sale of, and
normal sales of, inventory in the ordinary course of
business, and (iii) other contracts, commitments,
purchases or sales in the ordinary course of business;
l. made any capital expenditures or additions to
property, plant or equipment or acquired any other
property or assets (other than raw materials and supplies)
at a cost in excess of $100,000 in the aggregate;
m. written off or been required to write off any notes
or accounts receivable in an aggregate amount in excess of
$2,000;
n. written down or been required to write down any
inventory in an aggregate amount in excess of $ 2,000;
o. entered into any collective bargaining or union
contract or agreement; or
p. other than the ordinary course of business, incurred
any liability required by generally accepted accounting
principles to be reflected on a balance sheet and material
to the business or financial condition of Talk Stock and
its subsidiaries taken as a whole.
5.14 No Material Adverse Change. Since the date of the
Talk Stock Financial Statements, there has not been any
material adverse change in the business or financial
condition of Talk Stock and its Subsidiaries taken as a
whole, other than changes resulting from economic
conditions prevailing in the United States precious coins,
collectibles and metals industry.
5.15 Contracts and Commitments. Neither Talk Stock nor
any of its Subsidiaries is a party to any:
a. Contract or agreement (other than purchase or sales
orders entered into in the ordinary course of business)
involving any liability on the part of Talk Stock or one
of its Subsidiaries of more than $25,000 and not
cancelable by Talk Stock or the relevant Subsidiary
(without liability to Talk Stock or such Subsidiary)
within 60 days;
b. Except with respect to the lease on its business
location, lease of personal property involving annual
rental payments in excess of $25,000 and not cancelable
by Talk Stock or the relevant
Subsidiary (without liability to Talk Stock or such Subsidiary)
within 90 days;
c. Except with respect to the options referenced
above, Employee bonus, stock option or stock purchase,
performance unit, profit-sharing, pension, savings,
retirement, health, deferred or incentive compensation,
insurance or other material employee benefit plan (as
defined in Section 2(3) of ERISA) or program for any of
the employees, former employees or retired employees of
Talk Stock or any of its Subsidiaries;
d. Commitment, contract or agreement that is currently
expected by the management of Talk Stock to result in any
material loss upon completion or performance thereof;
e. Contract, agreement or commitment that is material
to the business of Talk Stock and its Subsidiaries, taken
as a whole, with any officer, employee, agent, consultant,
advisor, salesman, sales representative, value added
reseller, distributor or dealer; or
f. Employment agreement or other similar agreement
that contains any severance or termination pay,
liabilities or obligations.
All such contracts and agreements are in full force and
effect. Neither Talk Stock nor any or its Subsidiaries is
in breach of, in violation of or in default under, any
agreement, instrument, indenture, deed of trust,
commitment, contract or other obligation of any type to
which Talk Stock or any of its Subsidiaries is a party or
is or may be bound that relates to the business of Talk
Stock or any of its Subsidiaries or to which any of the
assets or properties of Talk Stock or any of its
Subsidiaries is subject, the effect of which breach,
violation or default is likely to materially and adversely
affect the business or financial condition of Talk Stock
and its Subsidiaries, taken as a whole. Ballynagee has not
guaranteed or assumed and specifically does not guarantee
or assume any obligations of Talk Stock or any of its
Subsidiaries.
5.16 Labor Relations. Neither Talk Stock nor any of
its Subsidiaries is a party to any collective bargaining
agreement. Except for any matter which is not likely to
have a material adverse effect on the business or
financial condition of Talk Stock and its Subsidiaries,
taken as a whole, (a) Talk Stock and each of its
Subsidiaries is in compliance with all applicable laws
respecting employment and employment practices, terms and
conditions of employment and wages and hours, and is not
engaged in any unfair labor practice, (b) there is no
unfair labor practice complaint against Talk Stock or any
of its Subsidiaries pending before the National Labor
Relations Board, (c) there is no labor strike, dispute,
slowdown or
stoppage actually pending or threatened
against Talk Stock or any of its Subsidiaries, (d) no
representation question exists respecting the employees of
Talk Stock or any of its Subsidiaries, (e) neither Talk
Stock nor any of its Subsidiaries has experienced any
strike, work stoppage or other labor difficulty, and (f)
no collective bargaining agreement relating to employees
of Talk Stock or any of its Subsidiaries is currently
being negotiated.
5.17 Employee Benefit Plans. No material employee
pension and welfare benefit plans covering employees of
Talk Stock is (1) a multi-employer plan as defined in
Section 3(37) of ERISA, or (2) a defined benefit plan as
defined in Section 3(35) of ERISA, any listed individual
account pension plan is duly qualified as tax exempt under
the applicable sections of the Code, each listed benefit
plan and related funding arrangement, if any, has been
maintained in all material respects in compliance with its
terms and the provisions of ERISA and the Code.
5.18 Compliance with Law. The operations of Talk Stock
and its Subsidiaries have been conducted in accordance
with all applicable laws and regulations of all
Governmental Bodies having jurisdiction over them, except
for violations thereof which are not likely to have a
material adverse effect on the business or financial
condition of Talk Stock and its Subsidiaries, taken as a
whole, or which would not require a payment by Talk Stock
or its Subsidiaries in excess of $2,000 in the aggregate,
or which have been cured. Neither Talk Stock nor any of
its Subsidiaries has received any notification of any
asserted present or past failure by it to comply with any
such applicable laws or regulations. Talk Stock and its
Subsidiaries have all material licenses, permits, orders
or approvals from the Governmental Bodies required for the
conduct of their businesses, and are not in material
violation of any such licenses, permits, orders and
approvals. All such licenses, permits, orders and
approvals are in full force and effect, and no suspension
or cancellation of any thereof has been threatened.
5.19 Tax Matters.
a.Talk Stock and each of its Subsidiaries (1) except
with respect to returns due on or before September 1, 1998
and August 31, 1999, have filed all nonconsolidated and
noncombined Tax Returns and all consolidated or combined
Tax Returns that include only Talk Stock and/or its
Subsidiaries and not Seller or its other Affiliates (for
the purposes of this Section 5.19, such tax Returns shall
be considered nonconsolidated and noncombined Tax Returns)
required to be filed through the date hereof and has paid
any Tax due through the date hereof with respect to the
time periods
covered by such nonconsolidated and noncombined
Tax Returns and shall timely pay any such
Taxes required to be paid by it after the date hereof with
respect to such Tax Returns and (2) shall prepare and
timely file all such nonconsolidated and noncombined Tax
Returns required to be filed after the date hereof and
through the Closing Date and pay all Taxes required to be
paid by it with respect to the periods covered by such Tax
Returns; (B) all such Tax Returns filed pursuant to clause
(A) after the date hereof shall, in each case, be prepared
and filed in a manner consistent in all material respects
(including elections and accounting methods and
conventions) with such Tax Return most recently filed in
the relevant jurisdiction prior to the date hereof, except
as otherwise required by law or regulation. Any such Tax
Return filed or required to be filed after the date hereof
shall not reflect any new elections or the adoption of any
new accounting methods or conventions or other similar
items, except to the extent such particular reflection or
adoption is required to comply with any law or regulation.
b. All consolidated or combined Tax Returns (except
those described in subparagraph (a) above) required to be
filed by any person through the date hereof that are
required or permitted to include the income, or reflect
the activities, operations and transactions, of Talk
Stock or any of its Subsidiaries for any taxable period
have been timely filed, and the income, activities,
operations and transactions of Talk Stock and
Subsidiaries have been properly included and reflected
thereon. Talk Stock shall prepare and file, or cause to be
prepared and filed, all such consolidated or combined Tax
Returns that are required or permitted to include the
income, or reflect the activities, operations and
transactions, of Talk Stock or any Subsidiary, with
respect to any taxable year or the portion thereof ending
on or prior to the Closing Date, including, without
limitation, Talk Stock's consolidated federal income tax
return for such taxable years. Talk Stock will timely file
a consolidated federal income tax return for the taxable
year ended December 31, 1998 and such return shall include
and reflect the income, activities, operations and
transactions of Talk Stock and Subsidiaries for the
taxable period then ended, and hereby expressly covenants
and agrees to file a consolidated federal income tax
return, and to include and reflect thereon the income,
activities, operations and transactions of Talk Stock and
Subsidiaries for the taxable period through the Closing
Date. All Tax Returns filed pursuant to this subparagraph
(b) after the date hereof shall, in each case, to the
extent that such Tax Returns specifically relate to Talk
Stock or any of its Subsidiaries and do
not generally relate to matters affecting other members of
Talk Stock's consolidated group, be prepared and filed in a
manner consistent in all material respects (including elections
and accounting methods and conventions) with the Tax
Return most recently filed in the relevant jurisdictions
prior to the date hereof, except as otherwise required by
law or regulation. Talk Stock has paid or will pay all
Taxes that may now or hereafter be due with respect to the
taxable periods covered by such consolidated or combined
Tax Returns.
c. Neither Talk Stock nor any of its Subsidiaries has
agreed, or is required, to make any adjustment (x) under
Section 481(a) of the Code by reason of a change in
accounting method or otherwise or (y) pursuant to any
provision of the Tax Reform Act of 1986, the Revenue Act
of 1987 or the Technical and Miscellaneous Revenue Act of
1988.
d. Neither Talk Stock nor any of its Subsidiaries or
any predecessor or Affiliate of the foregoing has, at any
time, filed a consent under Section 341(f)(1) of the Code,
or agreed under Section 341(f)(3) of the Code, to have the
provisions of Section 341(f)(2) of the Code apply to any
sale of its stock.
e. There is no (nor has there been any request for an)
agreement, waiver or consent providing for an extension of
time with respect to the assessment of any Taxes
attributable to Talk Stock or its Subsidiaries, or their
assets or operations and no power of attorney granted by
Talk Stock or any of its Subsidiaries with respect to any
Tax matter is currently in force.
f. There is no action, suit, proceeding,
investigation, audit, claim, demand, deficiency or
additional assessment in progress, pending or threatened
against or with respect to any Tax attributable to Talk
Stock, its Subsidiaries or their assets or operations.
g. All amounts required to be withheld as of the
Closing Date for Taxes or otherwise have been withheld and
paid when due to the appropriate agency or authority.
h. No property of Talk Stock is "tax-exempt use
property " within the meaning of Section 168(h) of the
Code nor property that Talk Stock and/or its Subsidiaries
will be required to treat as being owned by another person
pursuant to Section 168(f)(8) of the Internal Revenue Code
of 1954, as amended and in effect immediately prior to
the enactment of the Tax Reform Act of
1986.
i. There have been delivered or made available to
Ballynagee true and complete copies of all income Tax
Returns (or with respect to consolidated or combined
returns, the portion thereof) and any other Tax Returns
requested by Ballynagee as may be relevant to Talk Stock,
its Subsidiaries, or their assets or operations for any
and all periods ending after December 31, 1998, or for
any Tax years which are subject to audit or investigation
by any taxing authority or entity.
j. There is no contract, agreement, plan or
arrangement, including but not limited to the provisions
of this Agreement, covering any employee or former
employee of Talk Stock or its Subsidiaries that,
individually or collectively, could give rise to the
payment of any amount that would not be deductible
pursuant to Section 280G or 162 of the Code.
5.20 Environmental Matters.
a. At all times prior to the date hereof, Talk Stock
and its Subsidiaries have complied in all material
respects with applicable environmental laws, orders,
regulations, rules and ordinances relating to the
Properties (as hereinafter defined), the violation of
which would have a material adverse effect on the business
or financial condition of Talk Stock and its
Subsidiaries, taken as a whole, or which would require a
payment by Talk Stock or its Subsidiaries in excess of
$2,000 in the aggregate, and which have been duly adopted,
imposed or promulgated by any legislative, executive,
administrative or judicial body or officer of any
Governmental Body.
b. The environmental licenses, permits and
authorizations that are material to the operations of Talk
Stock and its Subsidiaries, taken as a whole, are in full
force and effect.
c. Neither Talk Stock nor any of its Subsidiaries has
released or caused to be released on or about the
properties currently owned or leased by Talk Stock or any
of its Subsidiaries (the "Properties") any (i) pollutants,
(ii) contaminants, (iii) "Hazardous Substances," as that
term is defined in Section 101(14) of the Comprehensive
Environmental Response Act, as amended or (iv) "Regulated
Substances," as that term in defined in Section 9001 of
the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq., as amended, which would be required
to be
remediated by any governmental agency with
jurisdiction over the Properties under the authority of
laws, regulations and ordinances as in effect and
currently interpreted on the date hereof, which
remediation would have a material adverse effect on the
business or financial condition of Talk Stock and its
Subsidiaries, taken as a whole.
5.21 Brokers or Finders. Except for John Coleridge,
Talk Stock has not employed any broker or finder or
incurred any liability for any brokerage or finder's fees
or commissions or similar payments in connection with the
sale of the Talk Stock Shares to Ballynagee.
5.22 Absence of Certain Commercial Practices. Neither
Talk Stock nor any of its Subsidiaries has, directly or
indirectly, paid or delivered any fee, commission or other
sum of money or item of property, however characterized,
to any finder, agent, government official or other party,
in the United States or any other country, which is in any
manner related to the business or operations of Talk
Stock or its Subsidiaries, which Talk Stock or one of its
Subsidiaries knows or has reason to believe to have been
illegal under any federal, state or local laws of the
United States or any other country having jurisdiction;
and neither Talk Stock nor any of its Subsidiaries has
participated, directly or indirectly, in any boycotts or
other similar practices affecting any of its actual or
potential customers in violation of any applicable law or
regulation.
5.23 Transactions with Directors and Officers. Talk
Stock and its Subsidiaries do not engage in business with
any Person in which any of Talk Stock's directors or
officers has a material equity interest. No director or
officer of Talk Stock owns any property, asset or right
which is material to the business of Talk Stock and its
Subsidiaries, taken as a whole.
5.24 Borrowing and Guarantees. Talk Stock and its
Subsidiaries (a) do not have any indebtedness for borrowed
money, (b) are not lending or committed to lend any money
(except for advances to employees in the ordinary course
of business), and (c) are not guarantors or sureties with
respect to the obligations of any Person.
6. REPRESENTATIONS AND WARRANTIES OF BALLYNAGEE.
Ballynagee represents and warrants to Talk Stock that, to
the Knowledge of Ballynagee (which limitation shall not
apply to Section 6.3), and except as set forth in the
Ballynagee Disclosure Letter:
6.1 Organization of Talk Stock; Authorization.
Ballynagee is a corporation duly organized, validly
existing and in good standing under the laws of
Delaware with full corporate power and authority to execute
and deliver this Agreement and to perform its obligations
hereunder. The execution, delivery and performance of this
Agreement have been duly authorized by all necessary
corporate action of Ballynagee and this Agreement
constitutes a valid and binding obligation of Ballynagee;
enforceable against it in accordance with its terms.
6.2 Capitalization. The authorized capital stock of
Ballynagee consists of 20,000,000 shares of common
stock, par value $.001 per share, and 10,000,000 shares
of preferred stock, par value $.001 per share. As of
the date of this Agreement, Ballynagee has 500,000
shares of common stock issued and outstanding and no
shares of preferred stock. No shares have been
registered under state or federal securities laws. As
of the Closing Date, all of the issued and outstanding
shares of common stock of Ballynagee are validly
issued, fully paid and non-assessable and they are not
and as of the Closing Date there will not be
outstanding any other warrants, options or other
agreements on the part of Ballynagee obligating
Ballynagee to issue any additional shares of common or
preferred stock or any of its securities of any kind.
Ballynagee will not issue any shares of capital stock
from the date of this Agreement through the Closing
Date. The Common Stock of Ballynagee is presently
listed and trading on the Nasdaq Over-the-Counter
Bulletin Board under the symbol "BYNG." Ballynagee has
filed all reports required by the Securities and
Exchange Commission under the Securities Exchange Act
of 1934, as amended, required to make Ballynagee a
"reporting company" in accordance with Section 12(g) of
the Exchange Act, and has received a letter from the
Securities and Exchange Commission advising that they
have no comments on the filings.
6.3 No Conflict. Neither the execution and delivery
of this Agreement nor the consummation of the sale of the
Ballynagee Shares to Talk Stock will (a) violate any
provision of the certificate of incorporation or by-laws
of Ballynagee, or (b) violate, be in conflict with, or
constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under
any agreement to which Ballynagee is a party or (c)
violate any statute or law or any judgment, decree, order,
regulation or rule of any court or other Governmental Body
applicable to Ballynagee.
6.4 Ownership of Ballynagee Shares. The delivery of
certificates to Talk Stock provided in Section 2.3 will
result in the Shareholders' of Talk Stock immediate
acquisition of record and beneficial ownership of the
Ballynagee Shares, free and clear of all Encumbrances
other than as required by Federal and State securities
laws. Except with respect to the transactions contemplated
by this Agreement, there are no outstanding options,
rights, conversion rights, agreements or commitments of
any kind
relating to the issuance, sale or transfer of any
Equity Securities or other securities of Ballynagee.
6.5 No Conflict as to Ballynagee and Subsidiaries.
Neither the execution and delivery of this Agreement nor
the consummation of the sale of the Ballynagee Shares to
Talk Stock will (a) violate any provision of the
certificate of incorporation or by-laws (or other
governing instrument) of Ballynagee or any of its
Subsidiaries or (b) violate, or be in conflict with, or
constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under,
or result in the termination of, or accelerate the
performance required by, or excuse performance by any
Person of any of its obligations under, or cause the
acceleration of the maturity of any debt or obligation
pursuant to, or result in the creation or imposition of
any Encumbrance upon any property or assets of Ballynagee
or any of its Subsidiaries under, any material agreement
or commitment to which Ballynagee or any of its
Subsidiaries is a party or by which any of their
respective property or assets is bound, or to which any of
the property or assets of Ballynagee or any of its
Subsidiaries is subject, or (c) violate any statute or law
or any judgment, decree, order, regulation or rule of any
court or other Governmental Body applicable to Ballynagee
or any of its Subsidiaries except, in the case of
violations, conflicts, defaults, terminations,
accelerations or Encumbrances described in clause (b) of
this Section 6.5, for such matters which are not likely to
have a material adverse effect on the business or
financial condition of Ballynagee and its Subsidiaries,
taken as a whole.
6.6 Consents and Approvals of Governmental
Authorities. No consent, approval or authorization of, or
declaration, filing or registration with, any Governmental
Body is required to be made or obtained by Ballynagee or
Talk Stock or any of either of their Subsidiaries in
connection with the execution, delivery and performance of
this Agreement by Ballynagee or the consummation of the
sale of the Ballynagee Shares to Talk Stock.
6.7 Other Consents. No consent of any Person is
required to be obtained by Talk Stock or Ballynagee to the
execution, delivery and performance of this Agreement or
the consummation of the sale of the Ballynagee Shares to
Talk Stock, including, but not limited to, consents from
parties to leases or other agreements or commitments,
except for any consent which the failure to obtain would
not be likely to have a material adverse effect on the
business and financial condition of Talk Stock or Ballynagee.
6.8 Financial Statements. Ballynagee has delivered to
Talk Stock consolidated balance sheets of Ballynagee and
its Subsidiaries as at December 31, 1997 and December 31,
1998, and statements of income and changes in financial
position for each of the years in the two-year period then
ended,
together with the report thereon of Ballynagee's
independent accountant (the "Ballynagee Financial
Statements"). Such Ballynagee Financial Statements and
notes fairly present the consolidated financial condition
and results of operations of Ballynagee and its
Subsidiaries as at the respective dates thereof and for
the periods therein referred to, all in accordance with
generally accepted United States accounting principles
consistently applied throughout the periods involved,
except as set forth in the notes thereto, and shall be
utilizable in any SEC filing in compliance with Rule 310
of Regulation S-B promulgated under the Securities Act.
6.9 Title to Properties. Either Ballynagee or one of
its Subsidiaries owns all the material properties and
assets that they purport to own (real, personal and mixed,
tangible and intangible), including, without limitation,
all the material properties and assets reflected in the
Ballynagee Financial Statements and all the material
properties and assets purchased or otherwise acquired by
Ballynagee or any of its Subsidiaries since the date of
the Ballynagee Financial Statements. All properties and
assets reflected in the Ballynagee Financial Statements
are free and clear of all material Encumbrances and are
not, in the case of real property, subject to any material
rights of way, building use restrictions, exceptions,
variances, reservations or limitations of any nature
whatsoever except, with respect to all such properties and
assets, (a) mortgages or security interests shown on the
Ballynagee Financial Statements as securing specified
liabilities or obligations, with respect to which no
default (or event which, with notice or lapse of time or
both, would constitute a default) exists, and all of which
are listed in the Ballynagee Disclosure Letter, (b)
mortgages or security interests incurred in connection
with the purchase of property or assets after the date of
the Ballynagee Financial Statements (such mortgages and
security interests being limited to the property or assets
so acquired), with respect to which no default (or event
which, with notice or lapse of time or both, would
constitute a default) exists, (c) as to real property, (i)
imperfections of title, if any, none of which materially
detracts from the value or impairs the use of the property
subject thereto, or impairs the operations of Ballynagee
or any of its Subsidiaries and (ii) zoning laws that do
not impair the present or anticipated use of the property
subject thereto, and (d) liens for current taxes not yet
due. The properties and assets of Ballynagee and its
Subsidiaries include all rights, properties and other
assets necessary to permit Ballynagee and its
Subsidiaries to conduct Ballynagee's business in all
material respects in the same manner as it is conducted on
the date of this Agreement.
6.10 Buildings, Plants and Equipment. The buildings,
plants, structures and material items of equipment and
other personal property owned or leased by Ballynagee or
its Subsidiaries are, in all respects material to the
business or financial condition of Ballynagee and its
Subsidiaries, taken
as a whole, in good operating condition and repair (ordinary
wear and tear excepted) and are adequate in all such respects
for the purposes for which they are being used. Ballynagee has
not received notification that it or any of its Subsidiaries is in
violation of any applicable building, zoning,
anti-pollution, health, safety or other law, ordinance or
regulation in respect of its buildings, plants or
structures or their operations, which violation is likely
to have a material adverse effect on the business or
financial condition of Ballynagee and its Subsidiaries,
taken as a whole or which would require a payment by Talk
Stock or Ballynagee or any of their subsidiaries in excess
of $2,000 in the aggregate, and which has not been cured.
6.11 No Condemnation or Expropriation. Neither the
whole nor any portion of the property or leaseholds owned
or held by Ballynagee or any of its Subsidiaries is
subject to any governmental decree or order to be sold or
is being condemned, expropriated or otherwise taken by any
Governmental Body or other Person with or without payment
of compensation therefor, which action is likely to have a
material adverse effect on the business or financial
condition of Talk Stock and its Subsidiaries, taken as a
whole.
6.12 Litigation. There is no action, suit, inquiry,
proceeding or investigation by or before any court or
Governmental Body pending or threatened in writing against
or involving Ballynagee or any of its Subsidiaries which
is likely to have a material adverse effect on the
business or financial condition of Talk Stock, Ballynagee
and any of their Subsidiaries, taken as whole, or which
would require a payment by Ballynagee or its subsidiaries
in excess of $2,000 in the aggregate or which questions
or challenges the validity of this Agreement. Neither
Ballynagee nor any or its Subsidiaries is subject to any
judgment, order or decree that is likely to have a
material adverse effect on the business or financial
condition of Talk Stock, Ballynagee or any of their
Subsidiaries, taken as a whole, or which would require a
payment by Ballynagee or its subsidiaries in excess of
$2,000 in the aggregate.
6.13 Absence of Certain Changes. Since the date of the
Ballynagee Financial Statements, neither Ballynagee nor
any of its Subsidiaries has:
a. suffered the damage or destruction of any of its
properties or assets (whether or not covered by insurance)
which is materially adverse to the business or financial
condition of Ballynagee and its Subsidiaries, taken as a
whole, or made any disposition of any of its material
properties or assets other than in the ordinary course of
business;
b. made any change or amendment in its certificate of
incorporation
or by-laws, or other governing instruments;
c. issued or sold any Equity Securities or other
securities, acquired, directly or indirectly, by
redemption or otherwise, any such Equity Securities,
reclassified, split-up or otherwise changed any such
Equity Security, or granted or entered into any options,
warrants, calls or commitments of any kind with respect
thereto;
d. organized any new Subsidiary or acquired any Equity
Securities of any Person or any equity or ownership
interest in any business;
e. borrowed any funds or incurred, or assumed or become
subject to, whether directly or by way of guarantee or
otherwise, any obligation or liability with respect to any
such indebtedness for borrowed money;
f. paid, discharged or satisfied any material claim,
liability or obligation (absolute, accrued, contingent or
otherwise), other than in the ordinary course of business;
g. prepaid any material obligation having a maturity of
more than 90 days from the date such obligation was issued
or incurred;
h. canceled any material debts or waived any material
claims or rights, except in the ordinary course of
business;
i. disposed of or permitted to lapse any rights to the
use of any material patent or registered trademark or
copyright or other intellectual property owned or used by
it;
j. granted any general increase in the compensation of
officers or employees (including any such increase
pursuant to any employee benefit plan);
k. purchased or entered into any contract or commitment
to purchase any material quantity of raw materials or
supplies, or sold or entered into any contract or
commitment to sell any material quantity of property or
assets, except (i) normal contracts or commitments for the
purchase of, and normal purchases of, raw materials or
supplies, made in the ordinary course business, (ii)
normal contracts or commitments for the sale of, and
normal sales of, inventory in the ordinary course of
business, and (iii) other contracts, commitments,
purchases or sales in the ordinary course of business;
l. made any capital expenditures or additions to
property, plant or equipment or acquired any other
property or assets (other than raw materials and supplies)
at a cost in excess of $2,000 in the aggregate;
m. written off or been required to write off any notes
or accounts receivable in an aggregate amount in excess of
$2,000;
n. written down or been required to write down any
inventory in an aggregate amount in excess of $ 2,000;
o. entered into any collective bargaining or union
contract or agreement; or
p. other than the ordinary course of business, incurred
any liability required by generally accepted accounting
principles to be reflected on a balance sheet and material
to the business or financial condition of Ballynagee and
its subsidiaries taken as a whole.
6.14 No Material Adverse Change. Since the date of the
Ballynagee Financial Statements, there has not been any
material adverse change in the business or financial
condition of Ballynagee and its Subsidiaries taken as a
whole, other than changes resulting from economic
conditions prevailing in the United States precious coins,
collectibles and metals industry.
6.15 Contracts and Commitments. Neither Ballynagee nor
any of its Subsidiaries is a party to any:
a. Contract or agreement (other than purchase or sales
orders entered into in the ordinary course of business)
involving any liability on the part of Ballynagee or one
of its Subsidiaries of more than $2,000 and not
cancelable by Ballynagee or the relevant Subsidiary
(without liability to Ballynagee or such Subsidiary)
within 60 days;
b. Lease of personal property involving annual rental
payments in excess of $2,000 and not cancelable by
Ballynagee or the relevant Subsidiary (without liability
to Ballynagee or such Subsidiary) within 90 days;
c. Employee bonus, stock option or stock purchase,
performance unit, profit-sharing, pension, savings,
retirement, health, deferred or incentive compensation,
insurance or other material employee
benefit plan (as defined in Section 2(3) of ERISA) or program
for any of the employees, former employees or retired employees of
Ballynagee or any of its Subsidiaries;
d. Commitment, contract or agreement that is currently
expected by the management of Ballynagee to result in any
material loss upon completion or performance thereof;
e. Contract, agreement or commitment that is material
to the business of Ballynagee and its Subsidiaries, taken
as a whole, with any officer, employee, agent, consultant,
advisor, salesman, sales representative, value added
reseller, distributor or dealer; or
f. Employment agreement or other similar agreement
that contains any severance or termination pay,
liabilities or obligations.
All such contracts and agreements are in full force and
effect. Neither Ballynagee nor any or its Subsidiaries is
in breach of, in violation of or in default under, any
agreement, instrument, indenture, deed of trust,
commitment, contract or other obligation of any type to
which Ballynagee or any of its Subsidiaries is a party or
is or may be bound that relates to the business of
Ballynagee or any of its Subsidiaries or to which any of
the assets or properties of Ballynagee or any of its
Subsidiaries is subject, the effect of which breach,
violation or default is likely to materially and adversely
affect the business or financial condition of Ballynagee
and its Subsidiaries, taken as a whole.
6.16 Labor Relations. Neither Ballynagee nor any of
its Subsidiaries is a party to any collective bargaining
agreement. Except for any matter which is not likely to
have a material adverse effect on the business or
financial condition of Ballynagee and its Subsidiaries,
taken as a whole, (a) Ballynagee and each of its
Subsidiaries is in compliance with all applicable laws
respecting employment and employment practices, terms and
conditions of employment and wages and hours, and is not
engaged in any unfair labor practice, (b) there is no
unfair labor practice complaint against Ballynagee or any
of its Subsidiaries pending before the National Labor
Relations Board, (c) there is no labor strike, dispute,
slowdown or stoppage actually pending or threatened
against Ballynagee or any of its Subsidiaries, (d) no
representation question exists respecting the employees of
Ballynagee or any of its Subsidiaries, (e) neither
Ballynagee nor any of its Subsidiaries has experienced any
strike, work stoppage or other labor difficulty, and (f)
no collective bargaining agreement relating to employees
of Ballynagee or any of its Subsidiaries is currently
being negotiated.
6.17 Employee Benefit Plans. No material employee
pension and welfare benefit plans covering employees of
Ballynagee and its Subsidiaries is (1) a multi-employer
plan as defined in Section 3(37) of ERISA, or (2) a
defined benefit plan as defined in Section 3(35) of ERISA,
any listed individual account pension plan is duly
qualified as tax exempt under the applicable sections of
the Code, each listed benefit plan and related funding
arrangement, if any, has been maintained in all material
respects in compliance with its terms and the provisions
of ERISA and the Code.
6.18 Compliance with Law. The operations of Ballynagee
and its Subsidiaries have been conducted in accordance
with all applicable laws and regulations of all
Governmental Bodies having jurisdiction over them, except
for violations thereof which are not likely to have a
material adverse effect on the business or financial
condition of Ballynagee and its Subsidiaries, taken as a
whole, or which would not require a payment by Ballynagee
or its Subsidiaries in excess of $2,000 in the aggregate,
or which have been cured. Neither Ballynagee nor any of
its Subsidiaries has received any notification of any
asserted present or past failure by it to comply with any
such applicable laws or regulations. Ballynagee and its
Subsidiaries have all material licenses, permits, orders
or approvals from the Governmental Bodies required for the
conduct of their businesses, and are not in material
violation of any such licenses, permits, orders and
approvals. All such licenses, permits, orders and
approvals are in full force and effect, and no suspension
or cancellation of any thereof has been threatened.
6.19 Tax Matters.
a. Ballynagee and each of its Subsidiaries (1) has
filed all nonconsolidated and noncombined Tax Returns and
all consolidated or combined Tax Returns that include only
Ballynagee and/or its Subsidiaries and not Seller or its
other Affiliates (for the purposes of this Section 6.19,
such tax Returns shall be considered nonconsolidated and
noncombined Tax Returns) required to be filed through the
date hereof and has paid any Tax due through the date
hereof with respect to the time periods covered by such
nonconsolidated and noncombined Tax Returns and shall
timely pay any such Taxes required to be paid by it after
the date hereof with respect to such Tax Returns and (2)
shall prepare and timely file all such nonconsolidated and
noncombined Tax Returns required to be filed after the
date hereof and through the Closing Date and pay all Taxes
required to be paid by it with respect to the periods
covered by such Tax Returns; (B) all such Tax Returns
filed pursuant to clause (A) after the date hereof shall,
in each case, be prepared and filed in a manner
consistent in all material respects (including elections and
accounting methods and conventions) with such Tax Return
most recently filed in the relevant jurisdiction prior to
the date hereof, except as otherwise required by law or
regulation. Any such Tax Return filed or required to be
filed after the date hereof shall not reflect any new
elections or the adoption of any new accounting methods or
conventions or other similar items, except to the extent
such particular reflection or adoption is required to
comply with any law or regulation.
b. All consolidated or combined Tax Returns (except
those described in subparagraph (a) above) required to be
filed by any person through the date hereof that are
required or permitted to include the income, or reflect
the activities, operations and transactions, of
Ballynagee or any of its Subsidiaries for any taxable
period have been timely filed, and the income, activities,
operations and transactions of Ballynagee and
Subsidiaries have been properly included and reflected
thereon. Ballynagee shall prepare and file, or cause to be
prepared and filed, all such consolidated or combined Tax
Returns that are required or permitted to include the
income, or reflect the activities, operations and
transactions, of Ballynagee or any Subsidiary, with
respect to any taxable year or the portion thereof ending
on or prior to the Closing Date, including, without
limitation, Ballynagee's consolidated federal income tax
return for such taxable years. Ballynagee will timely file
a consolidated federal income tax return for the taxable
year ended December 31, 1998 and such return shall include
and reflect the income, activities, operations and
transactions of Ballynagee and Subsidiaries for the
taxable period then ended, and hereby expressly covenants
and agrees to file a consolidated federal income tax
return, and to include and reflect thereon the income,
activities, operations and transactions of Ballynagee and
Subsidiaries for the taxable period through the Closing
Date. All Tax Returns filed pursuant to this subparagraph
(b) after the date hereof shall, in each case, to the
extent that such Tax Returns specifically relate to
Ballynagee or any of its Subsidiaries and do not generally
relate to matters affecting other members of Ballynagee's
consolidated group, be prepared and filed in a manner
consistent in all material respects (including elections
and accounting methods and conventions) with the Tax
Return most recently filed in the relevant jurisdictions
prior to the date hereof, except as otherwise required by
law or regulation. Ballynagee has paid or will pay all
Taxes that may now or hereafter be due with respect to the
taxable periods covered by such consolidated or combined
Tax Returns.
c. Neither Ballynagee nor any of its Subsidiaries has
agreed, or is required, to make any adjustment (x) under
Section 481(a) of the Code by reason of a change in
accounting method or otherwise or (y) pursuant to any
provision of the Tax Reform Act of 1986, the Revenue Act
of 1987 or the Technical and Miscellaneous Revenue Act of
1988.
d. Neither Ballynagee nor any of its Subsidiaries or
any predecessor or Affiliate of the foregoing has, at any
time, filed a consent under Section 341(f)(1) of the Code,
or agreed under Section 341(f)(3) of the Code, to have the
provisions of Section 341(f)(2) of the Code apply to any
sale of its stock.
e. There is no (nor has there been any request for an)
agreement, waiver or consent providing for an extension of
time with respect to the assessment of any Taxes
attributable to Ballynagee or its Subsidiaries, or their
assets or operations and no power of attorney granted by
Ballynagee or any of its Subsidiaries with respect to any
Tax matter is currently in force.
f. There is no action, suit, proceeding,
investigation, audit, claim, demand, deficiency or
additional assessment in progress, pending or threatened
against or with respect to any Tax attributable to
Ballynagee, its Subsidiaries or their assets or operations.
g. All amounts required to be withheld as of the
Closing Date for Taxes or otherwise have been withheld and
paid when due to the appropriate agency or authority.
h. No property of Ballynagee is "tax-exempt use
property " within the meaning of Section 168(h) of the
Code nor property that Ballynagee and/or its Subsidiaries
will be required to treat as being owned by another person
pursuant to Section 168(f)(8) of the Internal Revenue Code
of 1954, as amended and in effect immediately prior to
the enactment of the Tax Reform Act of 1986.
i. There have been delivered or made available to Talk
Stock true and complete copies of all income Tax Returns
(or with respect to consolidated or combined returns, the
portion thereof) and any other Tax Returns requested by
Talk Stock as may be relevant to Ballynagee, its
Subsidiaries, or their assets or operations for any and
all periods ending after December 31, 1998, or for any
Tax years which are subject to audit or investigation by
any taxing authority or entity.
j. There is no contract, agreement, plan or
arrangement, including but not limited to the provisions
of this Agreement, covering any employee or former
employee of Ballynagee or its Subsidiaries that,
individually or collectively, could give rise to the
payment of any amount that would not be deductible
pursuant to Section 280G or 162 of the Code.
6.20 Environmental Matters.
a. At all times prior to the date hereof, Ballynagee
and its Subsidiaries have complied in all material
respects with applicable environmental laws, orders,
regulations, rules and ordinances relating to the
Properties (as hereinafter defined), the violation of
which would have a material adverse effect on the business
or financial condition of Ballynagee and its
Subsidiaries, taken as a whole, or which would require a
payment by Ballynagee or its Subsidiaries in excess of
$2,000 in the aggregate, and which have been duly adopted,
imposed or promulgated by any legislative, executive,
administrative or judicial body or officer of any
Governmental Body.
b. The environmental licenses, permits and
authorizations that are material to the operations of
Ballynagee and its Subsidiaries, taken as a whole, are in
full force and effect.
c. Neither Ballynagee nor any of its Subsidiaries has
released or caused to be released on or about the
properties currently owned or leased by Ballynagee or any
of its Subsidiaries (the "Properties") any (i) pollutants,
(ii) contaminants, (iii) "Hazardous Substances," as that
term is defined in Section 101(14) of the Comprehensive
Environmental Response Act, as amended or (iv) "Regulated
Substances," as that term in defined in Section 9001 of
the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq., as amended, which would be required
to be remediated by any governmental agency with
jurisdiction over the
Properties under the authority of laws, regulations and
ordinances as in effect and currently interpreted on the date
hereof, which remediation would have a material adverse effect
on the business or financial condition of Ballynagee and its
Subsidiaries, taken as a whole.
6.21 Brokers or Finders. Except for James Stubler,
Ballynagee has not employed any broker or finder or
incurred any liability for any brokerage or finder's fees
or commissions or similar payments in connection with the
sale of the Ballynagee Shares to Talk Stock.
6.22 Absence of Certain Commercial Practices. Neither
Ballynagee nor any of its Subsidiaries has, directly or
indirectly, paid or delivered any fee, commission or other
sum of money or item of property, however characterized,
to any finder, agent, government official or other party,
in the United States or any other country, which is in any
manner related to the business or operations of
Ballynagee or its Subsidiaries, which Ballynagee or one of
its Subsidiaries knows or has reason to believe to have
been illegal under any federal, state or local laws of the
United States or any other country having jurisdiction;
and neither Ballynagee nor any of its Subsidiaries has
participated, directly or indirectly, in any boycotts or
other similar practices affecting any of its actual or
potential customers in violation of any applicable law or
regulation.
6.23 Transactions with Directors and Officers.
Ballynagee and its Subsidiaries do not engage in business
with any Person in which any of Ballynagee's directors or
officers has a material equity interest. No director or
officer of Ballynagee owns any property, asset or right
which is material to the business of Ballynagee and its
Subsidiaries, taken as a whole.
6.24 Borrowing and Guarantees. Ballynagee and its
Subsidiaries (a) do not have any indebtedness for borrowed
money, (b) are not lending or committed to lend any money
(except for advances to employees in the ordinary course
of business), and (c) are not guarantors or sureties with
respect to the obligations of any Person.
6.25 Purchase for Investment. Ballynagee is purchasing
the Talk Stock Shares solely for its own account for the
purpose of investment and not with a view to, or for sale
in connection with, any distribution of any portion
thereof in violation of any applicable securities law.
7.ACCESS AND REPORTING; FILINGS WITH GOVERNMENTAL
AUTHORITIES; OTHER COVENANTS.
7.1 Access Between the date of this Agreement and the
Closing Date. Each of Talk Stock and Ballynagee shall (a)
give to the other and its authorized representatives
reasonable access to all plants, offices, warehouse and
other facilities and properties of Talk Stock or
Ballynagee, as the case may be, and to its books and
records, (b) permit the other to make inspections thereof,
and (c) cause its officers and its advisors to furnish the
other with such financial and operating data and other
information with respect to the business and properties of
such party and its Subsidiaries and to discuss with such
and its authorized representatives its affairs and those
of its Subsidiaries, all as the other may from time to
time reasonably request.
7.3 Exclusivity. From the date hereof until the
earlier of the Closing or the termination of this
Agreement, Ballynagee shall not solicit or negotiate or
enter into any agreement with any other Person with
respect to or in furtherance of any proposal for a merger
or business combination involving, or acquisition of any
interest in, or (except in the ordinary course of
business) sale of assets by, Ballynagee, except for the
exchange of the Ballynagee Shares for the Talk Stock
Shares from Talk Stock's shareholders.
7.4 Publicity. Between the date of this Agreement and
the Closing Date, Ballynagee and Talk Stock shall discuss
and coordinate with respect to any public filing or
announcement or any internal or private announcement
(including any general announcement to employees)
concerning the contemplated transaction.
7.5 Regulatory Matters. Talk Stock and Ballynagee
shall (a) file with applicable regulatory authorities any
applications and related documents required to be filed by
them in order to consummate the contemplated transaction
and (b) cooperate with each other as they may reasonably
request in connection with the foregoing.
7.6 Confidentiality. Prior to the Closing Date (or at
any time if the Closing does not occur) each of Talk Stock
and Ballynagee shall keep confidential and not disclose to
any Person (other than its employees, attorneys,
accountants and advisors) or use (except in connection
with the transactions contemplated hereby) all non-public
information obtained pursuant to Section 7.1. Following
the Closing, each of Talk Stock and Ballynagee shall keep
confidential and not disclose to any Person (other than
its employees, attorneys, accountants and advisors) or use
(except in connection with preparing Tax Returns and
conducting proceeds relating
to Taxes) any nonpublic information relating to the other.
This Section 7.6 shall not be violated by disclosure pursuant to
court order or as otherwise required by law, on condition that
notice of the requirement for such disclosure is given the
other party prior to making any disclosure and the party
subject to such requirement cooperates as the other may
reasonably request in resisting it. If the Closing does
not occur, each of Talk Stock and Ballynagee shall return
to the other, or destroy, all information it shall have
received from the other in connection with this Agreement
and the transactions contemplated hereby, together with
any copies or summaries thereof or extracts therefrom.
Each of Talk Stock and Ballynagee shall use their best
efforts to cause their respective representatives,
employees, attorneys, accountants and advisors to whom
information is disclosed pursuant to Section 7.1 to comply
with the provisions of this Section 7.6.
8. CONDUCT OF BALLYNAGEE'S BUSINESS PRIOR TO THE CLOSING.
8.1 Operation in Ordinary Course. Between the date of
this Agreement and the Closing Date, Ballynagee shall
cause conduct its businesses in all material respects in
the ordinary course.
8.2 Business Organization. Between the date of this
Agreement and the Closing Date, Ballynagee shall (a)
preserve substantially intact the business organization of
Ballynagee; and (b) preserve in all material respects the
present business relationships and good will of Ballynagee
and each of its Subsidiaries.
8.3 Corporate Organization. Between the date of this
Agreement and the Closing Date, Ballynagee shall not cause
or permit any amendment of its certificate of
incorporation or by-laws (or other governing instrument)
and shall not:
a. issue, sell or otherwise dispose of any of its
Equity Securities, or create, sell or otherwise dispose of
any options, rights, conversion rights or other agreements
or commitments of any kind relating to the issuance, sale
or disposition of any of its Equity Securities;
b. create or suffer to be created any Encumbrance
thereon, or create, sell or otherwise dispose of any
options, rights, conversion rights or other agreements or
commitments of any kind relating to the sale or
disposition of any Equity Securities;
c. reclassify, split up or otherwise change any of its
Equity Securities;
d. be party to any merger, consolidation or other
business combination;
e. sell, lease, license or otherwise dispose of any of
its properties or assets (including, but not limited to
rights with respect to patents and registered trademarks
and copyrights or other proprietary rights), in an amount
which is material to the business or financial condition
of Ballynagee and its Subsidiaries, taken as a whole,
except in the ordinary course of business; or
f. organize any new Subsidiary or acquire any Equity
Securities of any Person or any equity or ownership
interest in any business.
8.4 Other Restrictions. Between the date of this
Agreement and the Closing Date, Ballynagee shall not:
a. borrow any funds or otherwise become subject to,
whether directly or by way of guarantee or otherwise, any
indebtedness for borrowed money;
b. create any material Encumbrance on any of its
material properties or assets;
c. except in the ordinary course of business, increase
in any manner the compensation of any director or officer
or increase in any manner the compensation of any class of
employees;
d. create or materially modify any material bonus,
deferred compensation, pension, profit sharing,
retirement, insurance, stock purchase, stock option, or
other fringe benefit plan, arrangement or practice or any
other employee benefit plan (as defined in section 3(3) of
ERISA);
e. make any capital expenditure or acquire any property
or assets;
f. enter into any agreement that materially restricts
Ballynagee, Talk Stock or any of their Subsidiaries from
carrying on business;
g. pay, discharge or satisfy any material claim,
liability or obligation, absolute, accrued, contingent or
otherwise, other than the payment, discharge or
satisfaction in the ordinary course of business of
liabilities or obligations reflected in the Ballynagee
Financial Statements or incurred in the ordinary course of
business and consistent with past practice since the date
of the Ballynagee Financial Statements; or
h. cancel any material debts or waive any material
claims or rights.
9. DEFINITIONS.
As used in this Agreement, the following terms have the
meanings specified or referred to in this Section 9.
9.1 "Business Day" Any day that is not a Saturday or
Sunday or a day on which banks located in the City of New
York are authorized or required to be closed.
9.2 "Code" The Internal Revenue Code of 1986, as
amended.
9.3 "Disclosure Letter" A letter dated the date of
this Agreement, executed by either Talk Stock and
Ballynagee, addressed and delivered to the other and
containing information required by this Agreement and
exceptions to the representations and warranties under
this Agreement.
9.4 "Encumbrances" Any security interest, mortgage,
lien, charge, adverse claim or restriction of any kind,
including, but not limited to, any restriction on the use,
voting, transfer, receipt of income or other exercise of
any attributes of ownership, other than a restriction on
transfer arising under Federal or state securities laws.
9.5 "Equity Securities" See Rule 3a 11 1 under the
Securities Exchange Act of 1934.
9.6 "ERISA" The Employee Retirement Income Security
Act of 1974, as amended.
9.7 "Governmental Body" Any domestic or foreign
national, state or municipal or other local government or
multi-national body (including, but not limited to, the
European Economic Community), any subdivision, agency,
commission or authority thereof.
9.8 "Knowledge" Actual knowledge, after reasonable
investigation.
9.9 "Person" Any individual, corporation,
partnership, joint venture, trust, association,
unincorporated organization, other entity, or Governmental
Body.
9.10 "Subsidiary" With respect to any Person, any
corporation of which securities having the power to elect
a majority of that corporation's Board of Directors (other
than securities having that power only upon the happening
of a contingency that has not occurred) are held by such
Person or one or more of its Subsidiaries.
10. TERMINATION.
10.1 Termination. This Agreement may be terminated
before the Closing occurs only as follows:
a. By written agreement of Talk Stock and Ballynagee
at any time.
b. By Ballynagee, by notice to Talk Stock at any time,
if one or more of the conditions specified in Section 4 is
not satisfied at the time at which the Closing (as it may
be deferred pursuant to Section 2.1) would otherwise occur
or if satisfaction of such a condition is or becomes
impossible.
c. By Talk Stock, by notice to Ballynagee at any time,
if one or more of the conditions specified in Section 3 is
not satisfied at the time at which the Closing (as it may
be deferred pursuant to Section 2.1), would otherwise
occur of if satisfaction of such a condition is or becomes
impossible.
10.2 Effect of Termination. If this Agreement is
terminated pursuant to Section 10.1, this Agreement shall
terminate without any liability or further obligation of
any party to another.
13. NOTICES. All notices, consents, assignments and other
communications under this Agreement shall be in writing
and shall be deemed to have been duly given when (a)
delivered by hand, (b) sent by telex or facsimile (with
receipt confirmed), provided that a copy is mailed by
registered mail, return receipt requested, or (c) received
by the delivery service (receipt requested), in each case
to the appropriate addresses, telex numbers and facsimile
numbers set forth below (or to such other addresses, telex
numbers and facsimile numbers as a party may designate as
to itself by notice to the other parties).
(a) If to Ballynagee:
2600 Michelson Drive, Suite 490
Irvine, CA 92612
Facsimile No.: (949) 475-9601
Attention: Danilo Cacciamatta
(b) If to Talk Stock:
Talk Stock with Me, Inc.
1875 Century Park East, Suite 150
Century City, CA 90067
with a copy to:
Cutler Law Group
610 Newport Center Drive, Suite 800
Newport Beach, CA 92660
Facsimile No.: (949) 719-1988
Attention: M. Richard Cutler
14. MISCELLANEOUS.
14.2 Expenses. Each party shall bear its own expenses
incident to the preparation, negotiation, execution and
delivery of this Agreement and the performance of its
obligations hereunder.
14.3 Captions. The captions in this Agreement are for
convenience of reference only and shall not be given any
effect in the interpretation of this agreement.
14.4 No Waiver. The failure of a party to insist upon
strict adherence to any term of this Agreement on any
occasion shall not be considered a waiver or deprive that
party of the right thereafter to insist upon strict
adherence to that term or any other term of this
Agreement. Any waiver must be in writing.
14.5 Exclusive Agreement; Amendment. This Agreement
supersedes all prior agreements among the parties with
respect to its subject matter with respect thereto and
cannot be changed or terminated orally.
14.6 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be
considered an original, but all of which together shall
constitute the same instrument.
14.7 Governing Law. This Agreement and (unless
otherwise provided) all amendments hereof and waivers and
consents hereunder shall be governed by the internal law
of the State of California, without regard to the
conflicts of law principles thereof.
14.8 Binding Effect. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and
their respective successors and assigns, provided that
neither party may assign its rights hereunder without the
consent of the other, provided that, after the Closing, no
consent of Talk Stock shall be needed in connection with
any merger or consolidation of Ballynagee with or into
another entity.
14.9 Entire Agreement. This Agreement sets forth the
entire agreement and understanding of the Parties hereto
with respect to the transactions contemplated hereby, and
supersedes all prior agreements, arrangements and
understandings related to the subject matter hereof. No
understanding, promise, inducement, statement of
intention, representation, warranty, covenant or
condition, written or oral, express or implied, whether by
statute or otherwise, has been made by any Party hereto
which is not embodied in this Agreement or the written
statements, certificates, or other documents delivered
pursuant hereto or in
connection with the transactions contemplated hereby, and
no party hereto shall be bound by or liable for any alleged
understanding, promise, inducement, statement, representation,
warranty, covenant or condition not so set forth.
IN WITNESS WHEREOF, the corporate parties hereto have
caused this Agreement to be executed by their respective
officers, hereunto duly authorized, and entered into as of
the date first above written.
ATTEST: BALLYNAGEE ACQUISITION CORP.
By: /s/Danilo Cacciamatta
Secretary Danilo Cacciamatta, President
ATTEST: TALK STOCK WITH ME, INC.
By:/s/XXXX
Secretary President
EXHIBIT A
TALK STOCK SHAREHOLDERS
Name Ballynagee Shares to be Issued