SHARE EXCHANGE AGREEMENT
SHARE EXCHANGE AGREEMENT, dated as of July 29, 2005 (the "Agreement"), by
and among BONGIOVI ENTERTAINMENT, INC., a Nevada corporation ("Purchaser") and
REFUEL AMERICA, INC., a Delaware corporation, (the "Company"), and each of the
shareholders of the Company set forth on the signature page hereof
(collectively, the "Sellers").
WITNESSETH
WHEREAS, the Company is in possession of certain intellectual property
related to the treatment of fuel to create clean burning, high performance fuel,
and
WHEREAS, the Sellers desire to sell to Purchaser and the Purchaser desires
to purchase from the Sellers, the Shares in exchange for 28,135,033 shares of
common stock of the Purchaser and upon the terms and conditions hereinafter set
forth; and
WHEREAS, certain terms used in this Agreement are defined in Article 1;
and
WHEREAS, it is intended that the Acquisition shall qualify for United
States federal income tax purposes as a reorganization within the meaning of
Section 368 of the Internal Revenue Code of 1986, as amended.
NOW THEREFORE in consideration of the premises and the mutual covenants,
agreements, representations and warranties contained herein, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1.
DEFINITIONS AND INTERPRETATION
1.1 Definitions. As used in this Agreement, the following terms when capitalized
in this Agreement shall have the following meanings:
(a) "Affiliates" shall mean, with respect to any Person, any and all other
Persons that control, are controlled by, or are under common control with,
such Person. For purposes of the foregoing, "control" of a Person shall
mean direct or indirect ownership of 50% or more of the securities or
other interests of such Person having by their terms ordinary voting power
to elect or appoint a majority of the board of directors or others
performing similar functions with respect to such Person.
(b) "Acquisition" means the Acquisition, at the Closing, of the Company by
Purchaser pursuant to this Agreement;
(c) "Acquisition Shares" means the 28,135,033 Purchaser Common Shares to be
issued to the Sellers at Closing pursuant to the terms of the Acquisition;
(d) "Business Day" shall mean any day other than Saturday, Sunday and any day
on which banking institutions in the United States are authorized by law
or other governmental action to close;
(e) "Closing Date" means the day on which all conditions precedent to the
completion of the transactions contemplated hereby have been satisfied or
waived;
(f) "Claim Notice" means written notification pursuant to Section 9.3 of a
Third Party Claim as to which indemnity under Section 9.1 is sought by an
Indemnified Party.
(g) "Code" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
(h) "Contract" shall mean an agreement, written or oral, between the Company
and any other Person which obligates either the Company or such other
Person to do or not to do a particular thing.
(i) "Election Notice" means a written notice provided by the Sellers or
Purchaser, as the case may be, in respect of a Tax Claim to the effect
that it elects to contest, and to control the defense or prosecution of,
such Tax Claim as provided in this Agreement.
(j) "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
(k) "ERISA Affiliate" shall mean any entity that would be deemed to be a
"single employer" with the Company under Section 414(b), (c), (m) or (o)
of the Code or Section 4001 of ERISA.
(l) "Environmental Liabilities" means any cost, damages, expense, liability,
obligation, or other responsibility arising from or under (a) any
Environmental Law and consisting of or relating to (i) any environmental
matters or conditions (including on-site or off-site contamination and
environmental regulation of chemical substances or products); (ii) fines,
penalties, judgments, awards, settlements, legal or administrative
proceedings, out-of-pocket damages and necessary and required response,
investigative, remedial, or inspection costs and expenses arising under
Environmental Law; (iii) financial responsibility under Environmental Law
for clean-up costs or corrective action, including any necessary and
required investigation, clean-up, removal, containment, or other
remediation or response actions required by Environmental Law and for any
natural resource damages; or (iv) any other compliance, corrective,
investigative, or remedial measures required under Environmental Law; or
(b) any common law causes of action, including, but not limited to,
negligence, trespass or nuisance, based on violation by the Company of
Environmental Laws, releases by the Company of Hazardous Materials or
actions or omissions by the Company that expose others to Hazardous
Materials. The terms "removal," "remedial," "response action", and
"release" shall have the meanings provided for such terms under, and shall
include the types of activities covered by, the United States
Comprehensive Environmental Response, Compensation, and Liability Act, 42
U.S.C. Section 9601 et seq., as amended ("CERCLA").
(m) "Environmental Laws" shall mean all federal, state and local Laws relating
to public health, or to pollution or protection of the environment
(including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata) including, without limitation, the
Clean Air Act, as amended, CERCLA, the Resource Conservation and Recovery
Act of 1976, as amended ("RCRA"), the Toxic Substances Control Act, the
Federal Water Pollution Control Act, as amended, the Safe Drinking Water
Act, as amended, the Hazardous Materials Transportation Act, as amended,
the Oil Pollution Act of 1990, any state Laws implementing the foregoing
federal Laws, and all other Laws relating to or regulating (i) emissions,
discharges, releases, or cleanup of pollutants, contaminants, chemicals,
polychlorinated biphenyls (PCB's), oil and gas exploration and production
wastes, brine, solid wastes, or toxic or Hazardous Materials or wastes
(collectively, the "Polluting Substances"), (ii) the generation,
processing, distribution, use, treatment, handling, storage, disposal, or
transportation of Polluting Substances, or (iii) environmental
conservation or protection. References in this Agreement to Environmental
Laws existing or in effect as of a particular date shall include written
administrative interpretations and policies then existing or in effect.
2
(n) "Environmental Permit" means any federal, state, local, provincial, or
foreign permits, licenses, approvals, consent or authorizations required
by any Governmental or Regulatory Authority under or in connection with
any Environmental Law and includes any and all orders, consent orders or
binding agreements issued or entered into by a Governmental or Regulatory
Authority under any applicable Environmental Law.
(o) "Governmental or Regulatory Authority" shall mean any federal, state,
regional, municipal or local court, legislative, executive, Native
American or regulatory authority or agency, board, commission, department
or subdivision thereof.
(p) "Hazardous Activity" means the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,
release, storage, transfer, transportation, treatment, or use (including
any withdrawal or other use of groundwater) of Hazardous Materials in, on,
under, about, or from the Company's facilities or any part thereof into
the environment.
(q) "Hazardous Materials" means (i) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is, or that is likely to
become, friable, urea formaldehyde foam insulation and transformers or
other equipment that contain dielectric fluid containing levels of
polychlorinated biphenyls (PCBs), or (ii) any chemicals, materials,
substances or wastes which are now or hereafter become defined as or
included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes," "restricted hazardous
wastes," "toxic substances," "toxic pollutants" or words of similar
import, under any applicable Environmental Law.
(r) "Indemnified Party" means any Person entitled to indemnification under any
provision of Article 9.
(s) "Indemnifying Party" means any Person obligated to provide indemnification
under any provision of Article 9.
(t) "Law" shall mean any federal, state, county, or local laws, statutes,
regulations, rules, codes, ordinances, orders, decrees, judgments or
injunctions enacted, adopted, issued or promulgated by any Governmental or
Regulatory Authority, from time to time.
3
(u) "Lien" shall mean any mortgage, deed of trust, pledge, lien, claim,
security interest, covenant, restriction, easement, preemptive right, or
any other encumbrance or charge of any kind.
(v) "Material Contract" shall have the meaning set forth in Section 3.14.
(w) "Material Adverse Effect" shall mean any material adverse effect on the
business or financial condition of the Company;
(x) "Order" shall mean any writ, judgment, decree, injunction or similar order
of any Governmental or Regulatory Authority (in each such case whether
preliminary or final).
(y) "Patent Royalty Agreement" shall mean that certain Royalty Agreement
between the Company and Ian Williamson and Clifford Hazel, dated as of the
date hereof, the form of which is included on Schedule 3.13.
(z) "Place of Closing" means the offices of Sichenzia Ross Friedman Ference
LLP, or such other place as Purchaser and the Sellers may mutually agree
upon;
(aa) "Permitted Lien" shall mean: (a) liens created under any Lease, except any
lien arising as a result of any failure to timely make any payment or
failure to perform any other obligation or other default under such Lease;
(b) liens for Taxes that are not yet due and payable or that are being
contested in good faith by appropriate proceedings; (c) mechanics,
materialmen's, landlords', carriers', warehousemen's, and other liens
imposed by law incurred in the ordinary course of business; (d) zoning
restrictions, land use regulations, declarations, reservations,
provisions, covenants, conditions, waivers, restrictions on the use of
property and third party easements, rights of way, leases or similar
matters that are recorded in the county records where the effected
property is located and do not prohibit the use of the property as
currently used; (e) the absence of executed rights of way or easements, or
a defect in any executed right of way or easement, where such rights have
been or can be otherwise obtained through a proceeding under prescription
or other operation of law; (f) deposits or pledges to secure obligations
under worker's compensation, social security or similar laws, or under
unemployment insurance; (g) deposits or pledges to secure bids, tenders,
contracts (other than contracts for the payment of money), leases,
statutory obligations, surety and appeal bonds, performance bonds and
other obligations of like nature arising in the ordinary course of the
Company's business and made, created or arising prior to the Closing Date;
(h) leases or subleases granted by or to others; and (i) precautionary
Uniform Commercial Code financing statements regarding operating leases
which leases are either disclosed pursuant to Article 3 hereof or no
longer in effect.
(bb) "Person" shall mean an individual, partnership, joint venture, trust,
corporation, limited liability company or other legal entity or
Governmental or Regulatory Authority.
4
(cc) "Post-Closing Period" means any taxable period or portion thereof
beginning after the Closing Date. If a taxable period begins on or before
the Closing Date and ends after the Closing Date, then the portion of the
taxable period that begins on the day following the Closing Date shall
constitute a Post-Closing Period.
(dd) "Pre-Closing Period" means any taxable period or portion thereof that is
not a Post-Closing Period.
(ee) "Purchaser Material Adverse Effect" shall mean any material adverse effect
on the business or financial condition of the Purchaser;
(ff) "Remedial Action" shall mean any removal, remediation, response, clean up
or other corrective action to respond to, remove or otherwise address any
Environmental Liability
(gg) "Shares" means all of the issued and outstanding shares of common stock
and Membership Interests of the Company as defined in Section 3.3.
(hh) "Subscription Agreements" means each of the agreements between the Company
and the Sellers, pursuant to which the Company issued Shares to the
Sellers.
(ii) "Taxes" shall mean any and all taxes, charges, fees, levies or other
assessments, including, without limitation, all net income, gross income,
gross receipts, excise, stamp, real or personal property, ad valorem,
withholding, estimated, social security, unemployment, occupation, use,
sales, service, service use, license, net worth, payroll, franchise,
severance, transfer, recording or other taxes, assessments or charges
imposed by any Governmental or Regulatory Authority, whether computed on a
separate, consolidated, unitary, combined or other basis, and in each case
such term shall include any interest, penalties, or additions to tax
attributable thereto.
(jj) "Tax Return" shall mean any return, report or similar statement required
to be filed with respect to any Tax (including any attached schedules),
including, without limitation, any information return, claim for refund,
amended return or declaration of estimated Tax and including any return of
an affiliated, combined or unitary group.
Any other terms defined within the text of this Agreement will have the meanings
so ascribed to them.
1.2 Captions and Section Numbers. The headings and section references in
this Agreement are for convenience of reference only and do not form a
part of this Agreement and are not intended to interpret, define or limit
the scope, extent or intent of this Agreement or any provision thereof.
1.3 Section References and Schedules. Any reference to a particular
"Article", "Section", "paragraph", "clause" or other subdivision is to the
particular Article, section, clause or other subdivision of this Agreement
and any reference to a Schedule by number will mean the appropriate
Schedule attached to this Agreement and by such reference the appropriate
Schedule is incorporated into and made part of this Agreement.
1.4 Severability of Clauses. If any part of this Agreement is declared or
held to be invalid for any reason, such invalidity will not affect the
validity of the remainder which will continue in full force and effect and
be construed as if this Agreement had been executed without the invalid
portion, and it is hereby declared the intention of the parties that this
Agreement would have been executed without reference to any portion which
may, for any reason, be hereafter declared or held to be invalid.
5
ARTICLE 2.
THE ACQUISITION
2.1 The Acquisition. Subject to the terms and conditions set forth in this
Agreement and in reliance on the representations, warranties, covenants
and conditions herein contained, the Sellers hereby agree to sell, assign
and deliver to Purchaser the Shares in exchange for the Acquisition Shares
on the Closing Date and to transfer to Purchaser on the Closing Date a
100% undivided interest in and to the Shares free from all liens,
mortgages, charges, pledges, encumbrances or other burdens (other than
those that may arise under federal or state securities laws restricting
the right to sell or transfer the Shares) with all rights now or
thereafter attached thereto.
2.2 Purchase Price; Allocation. The purchase price for the purchase of the
Shares shall be an aggregate of 28,135,033 Acquisition Shares allocated on
the basis of one Acquisition Share for each one Share held by Sellers.
2.3 Adherence with Applicable Securities Laws. Each of the Sellers agrees
that he is acquiring the Acquisition Shares for investment purposes and
will not offer, sell or otherwise transfer, pledge or hypothecate any of
the Acquisition Shares issued to him (other than pursuant to an effective
Registration Statement under the Securities Act of 1933, as amended (the
"Securities Act") directly or indirectly unless:
(a) the sale is to Purchaser;
(b) the sale is made pursuant to the exemption from registration under
the Securities Act, provided by Rule 144 thereunder; or
(c) the Acquisition Shares are sold in a transaction that does not
require registration under the Securities Act or any applicable
United States state laws and regulations governing the offer and
sale of securities, and the vendor has furnished to Purchaser an
opinion of counsel to that effect or such other written opinion as
may be reasonably required by Purchaser.
The Sellers acknowledge that the certificates representing the Acquisition
Shares shall bear the following legend:
NO SALE, OFFER TO SELL, OR TRANSFER OF THE SHARES REPRESENTED
BY THIS CERTIFICATE SHALL BE MADE UNLESS A REGISTRATION
STATEMENT UNDER THE FEDERAL SECURITIES ACT OF 1933, AS
AMENDED, IN RESPECT OF SUCH SHARES IS THEN IN EFFECT OR AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SAID ACT IS
THEN IN FACT APPLICABLE TO SAID SHARES.
6
2.4 Closing. The parties hereto shall use their best efforts to close the
transactions contemplated by this Agreement (the "Closing"), by July 31,
2005, but in no event shall the Closing be later than August 15, 2005. In
the event the Closing has not occurred by August 15, 2005, either party
may cancel this Agreement; provided that the delay in Closing shall not be
due to the actions or inactions of the party seeking such cancellation.
ARTICLE 3.
REPESENTATIONS AND WARRANTIES OF THE COMPANY AND SELLERS
The Company and Sellers hereby jointly and severally represent and
warrant to Purchaser, that:
3.1 Organization, Standing and Power. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware, with full corporate power and corporate authority to
(i) own, lease and operate its properties, (ii) carry on the business as
currently conducted by it. There are no states or jurisdictions in which
the character and location of any of the properties owned or leased by the
Company, or the conduct of the Company's business makes it necessary for
the Company to qualify to do business as a foreign corporation, except for
those jurisdictions in which the failure to so qualify would not have a
Material Adverse Effect on the business or operations of the Company.
3.2 Authorization of Agreement. Each Seller has all requisite power,
authority and legal capacity to execute and deliver this Agreement, and
each other agreement, document, or instrument or certificate contemplated
by this Agreement or to be executed by such Seller in connection with the
consummation of the transactions contemplated by this Agreement (together
with this Agreement, the "Seller Documents"), and to consummate the
transactions contemplated hereby and thereby. This Agreement has been, and
each of the Seller Documents will be at or prior to the Closing, duly and
validly executed and delivered by each Seller and (assuming the due
authorization, execution and delivery by the other parties hereto and
thereto) this Agreement constitutes, and each of the Seller Documents when
so executed and delivered will constitute, legal, valid and binding
obligations of each Seller, enforceable against each Seller in accordance
with their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights
and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought
in a proceeding at law or in equity).
3.3 Capitalization. The authorized capital stock of the Company consists
of 100,000,000 shares of common stock, $.0001 par value, 28,135,033 shares
of which are issued and outstanding (the "Shares"). All of the Shares are
duly authorized, validly issued, fully paid and nonassessable. Schedule
3.3 sets forth a true and complete list of the holders of all outstanding
shares of the Company, and the holders of all outstanding options and
warrants issued by the Company, which shares, options and warrants are
held by them in the amounts set forth on Schedule 3.3. It is agreed and
understood that such options and warrants shall become exercisable upon
the Closing to purchase shares of common stock of the Purchaser on the
same terms and conditions as currently set forth therein. Except as
contemplated by this Agreement and except as set forth on Schedule 3.3,
there are no options, warrants or other rights, agreements, arrangements
or commitments of any character relating to the issued or unissued capital
stock of the Company or obligating the Company to issue or sell any shares
of capital stock of or other equity interests in the Company. There is no
personal liability, and there are no preemptive rights with regard to the
capital stock of the Company, and no right-of-first refusal or similar
catch-up rights with regard to such capital stock. Except as set forth on
Schedule 3.3 and except for the transactions contemplated by this
Agreement, there are no outstanding contractual obligations or other
commitments or arrangements of the Company to (A) repurchase, redeem or
otherwise acquire any shares of the Shares (or any interest therein) or
(B) to provide funds to or make any investment (in the form of a loan,
capital contribution or otherwise) in any other entity, or (C) issue or
distribute to any person any capital stock of the Company, or (D) issue or
distribute to holders of any of the capital stock of the Company any
evidences of indebtedness or assets of the Company. All of the outstanding
securities of the Company have been issued and sold by the Company in full
compliance with applicable federal and state securities laws.
7
3.4 Subsidiaries. The Company has no subsidiaries.
3.5 Corporate Records.
(a) The Sellers have delivered to the Purchaser true, correct and
complete copies of the certificate of incorporation (certified by
the Secretary of State or other appropriate official of the
applicable jurisdiction of organization) and by-laws (certified by
the secretary, assistant secretary or other appropriate officer) or
comparable organizational documents of the Company.
(b) The minute books of the Company previously made available to the
Purchaser contain complete and accurate records of all meetings and
accurately reflect all other corporate action of the stockholders
and board of directors (including committees thereof) of the
Company. The stock certificate books and stock transfer ledgers of
the Company previously made available to the Purchaser are true,
correct and complete. All stock transfer taxes levied or payable
with respect to all transfers of shares of the Company prior to the
date hereof have been paid and appropriate transfer tax stamps
affixed.
3.6 Conflicts; Consents of Third Parties.
(a) None of the execution and delivery by any Seller of this Agreement
and the Seller Documents, the consummation of the transactions
contemplated hereby or thereby, or compliance by any Seller with any
of the provisions hereof or thereof will (i) conflict with, or
result in the breach of, any provision of the articles of
incorporation or by-laws or comparable organizational documents of
the Company; (ii) conflict with, violate, result in the breach or
termination of, or constitute a default under any note, bond,
mortgage, indenture, license, agreement or other instrument or
obligation to which the Company is a party or by which any of them
or any of their respective properties or assets is bound; (iii)
violate any statute, rule, regulation, order or decree of any
governmental body or authority by which the Company is bound; or
(iv) result in the creation of any Lien upon the properties or
assets of the Company or any Subsidiary except, in case of clauses
(ii), (iii) and (iv), for such violations, breaches or defaults as
would not, individually or in the aggregate, have a Material Adverse
Effect.
8
(b) No consent, waiver, approval, Order, permit or authorization of, or
declaration or filing with, or notification to, any Person or
Governmental or Regulatory Authority is required on the part of any
Seller, the Company in connection with the execution and delivery of
this Agreement or the Seller Documents, or the compliance by each
Seller or the Company as the case may be, with any of the provisions
hereof or thereof.
3.7 Ownership and Transfer of Shares. Each Seller is the record and
beneficial owner of the Shares indicated as being owned by such
Seller on Exhibit A, free and clear of any and all Liens. Each
Seller has the power and authority to sell, transfer, assign and
deliver such Shares as provided in this Agreement, and such delivery
will convey to the Purchaser good and marketable title to such
Shares, free and clear of any and all Liens.
3.8 Financial Statements. The Company has delivered to the Purchaser
copies of its unaudited balance sheet of the Company as of June 30,
2005, and the related statements of income and cash flows of the
Seller for the period ended June 30, 2005 (the "Company Financial
Statements"). Each of the Company Financial Statements are
materially correct and accurate.
3.9 . No Undisclosed Liabilities. Except as set forth on Schedule 3.9,
the Company has no indebtedness, obligations or liabilities of any
kind (whether accrued, absolute, contingent or otherwise, and
whether due or to become due).
3.10 Taxes. The Company has not filed Tax Returns.
3.11 Real Property.
(a) The Company does not own any real property.
(b) Schedule 3.11(b) sets forth all real property and interests in
real property leased by the Company (individually, a "Real
Property Lease" and the real properties specified in such
leases) as lessee or lessor. The Company has a valid and
enforceable leasehold interest under each of the Real Property
Leases, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in
equity), and Company has not received any written notice of
any default or event that with notice or lapse of time, or
both, would constitute a default by the Company under any of
the Real Property Leases.
3.12 Tangible Personal Property.
(a) Schedule 3.12(a) sets forth all leases of personal property
("Personal Property Leases") involving annual payments in
excess of $25,000 relating to personal property used in the
business of the Company or to which the Company is a party or
by which the properties or assets of the Company is bound. The
Sellers have delivered or otherwise made available to the
Purchaser true, correct and complete copies of the Personal
Property Leases, together with all amendments, modifications
or supplements thereto.
9
(b) The Company has a valid leasehold interest under each of the
Personal Property Leases under which it is a lessee, subject
to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to
general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity),
and there is no default under any Personal Property Lease by
the Company or, to the best knowledge of the Sellers, by any
other party thereto, and no event has occurred that with the
lapse of time or the giving of notice or both would constitute
a default thereunder.
(c) All of the items of tangible personal property used by the
Company under the Personal Property Leases are in good
condition and repair (ordinary wear and tear excepted) and are
suitable for the purposes used.
3.13 Intangible Property.
Schedule 3.13 contains a complete and correct list of each patent,
trademark, trade name, service mark and copyright owned or used by Company
as well as all registrations thereof and pending applications therefor,
and each license or other agreement relating thereto. Except as set forth
on Schedule 3.13, each of the foregoing is owned by the party shown on
such Schedule as owning the same, free and clear of all mortgages, claims,
liens, security interests, charges and encumbrances and is in good
standing and not the subject of any challenge. There have been no claims
made and neither the Sellers nor the Company has received any notice or
otherwise knows or has reason to believe that any of the foregoing is
invalid or conflicts with the asserted rights of others. The Company
possess all patents, patent licenses, trade names, trademarks, service
marks, brand marks, brand names, copyrights, know-how, formulate and other
proprietary and trade rights necessary for the conduct of its business as
now conducted, not subject to any restrictions and without any known
conflict with the rights of others and the Company has not forfeited or
otherwise relinquished any such patent, patent license, trade name,
trademark, service mark, brand mark, brand name, copyright, know-how,
formulate or other proprietary right necessary for the conduct of its
business as conducted on the date hereof. Except as defined in the Patent
Royalty Agreement included in Schedule 3.13, the Company is not under any
obligation to pay any royalties or similar payments in connection with any
license to any Seller or any affiliate thereof.
3.14 Material Contracts.
Schedule 3.14 sets forth all of the following Contracts to which the
Company or any of its Subsidiaries is a party or by which it is bound
(collectively, the "Material Contracts"): (i) Contracts with any the
Seller or any current officer or director of the Company or any of its
Subsidiaries; (ii) Contracts with any labor union or association
representing any employee of the Company or any of its Subsidiaries; (iii)
Contracts pursuant to which any party is required to purchase or sell a
stated portion of its requirements or output from or to another party;
(iv) Contracts for the sale of any of the assets of the Company or any of
its Subsidiaries other than in the ordinary course of business or for the
grant to any person of any preferential rights to purchase any of its
assets; (v) joint venture agreements; (vi) Material Contracts containing
covenants of the Company or any of its Subsidiaries not to compete in any
line of business or with any person in any geographical area or covenants
of any other person not to compete with the Company or any of its
Subsidiaries in any line of business or in any geographical area; (vii)
Contracts relating to the acquisition by the Company or any of its
Subsidiaries of any operating business or the capital stock of any other
person; (viii) Contracts relating to the borrowing of money; or (ix) any
other Contracts, other than Real Property Leases, which involve the
expenditure of more than $100,000 in the aggregate or $25,000 annually or
require performance by any party more than one year from the date hereof.
There have been made available to the Purchaser, its affiliates and their
representatives true and complete copies of all of the Material Contracts.
Except as set forth on Schedule 3.14, all of the Material Contracts and
other agreements are in full force and effect and are the legal, valid and
binding obligation of the Company and/or its Subsidiaries, enforceable
against them in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity). Except as set
forth on Schedule 3.14, neither the Company nor any Subsidiary is in
default in any material respect under any Material Contracts, nor, to the
knowledge of any Seller, is any other party to any Material Contract in
default thereunder in any material respect.
10
3.15 Employee Benefits. The Company maintains no "employee benefit plans",
as defined in Section 3(3) ERISA, or other pension plans or employee
benefit arrangements, programs or payroll practices (including, without
limitation, severance pay, vacation pay, company awards, salary
continuation for disability, sick leave, retirement, deferred
compensation, bonus or other incentive compensation, stock purchase
arrangements or policies, hospitalization, medical insurance, life
insurance and scholarship programs)
3.16 Labor. The Company is not a party to any labor or collective
bargaining agreement and there are no labor or collective bargaining
agreements which pertain to employees of the Company.
3.17 Litigation. There is no suit, action, proceeding, investigation,
claim or order pending or, to the knowledge of the Sellers or the Company,
overtly threatened against the Company (or to the knowledge of the Sellers
or the Company, pending or threatened, against any of the officers,
directors or key employees of the Company with respect to their business
activities on behalf of the Company), or to which the Sellers or the
Company is otherwise a party, which, if adversely determined, would have a
Material Adverse Effect, before any court, or before any governmental
department, commission, board, agency, or instrumentality; nor to the
knowledge of the Sellers nor the Company is there any reasonable basis for
any such action, proceeding, or investigation. The Company is not subject
to any judgment, order or decree of any court or governmental agency
except to the extent the same are not reasonably likely to have a Material
Adverse Effect and the Company is not engaged in any legal action to
recover monies due it or for damages sustained by it.
3.18 Compliance with Laws; Permits. The Company is in compliance with all
Laws applicable to the Company or to the conduct of the business or
operations of the Company or the use of its properties (including any
leased properties) and assets, except for such non-compliances as would
not, individually or in the aggregate, have a Material Adverse Effect. The
Company has all governmental permits and approvals from state, federal or
local authorities which are required for the Company to operate its
business, except for those the absence of which would not, individually or
in the aggregate, have a Material Adverse Effect.
3.19 Related Party Transactions. Except as set forth on Schedule 3.19,
neither the Sellers nor any of their respective Affiliates has borrowed
any moneys from or has outstanding any indebtedness or other similar
obligations to the Company. Except as set forth in Schedule 3.19, neither
the Sellers, the Company, any Affiliate of the Company or the Sellers nor
any officer or employee of any of them (i) owns any direct or indirect
interest of any kind in, or controls or is a director, officer, employee
or partner of, or consultant to, or lender to or borrower from or has the
right to participate in the profits of, any Person which is (A) a
competitor, supplier, customer, landlord, tenant, creditor or debtor of
the Company, (B) engaged in a business related to the business of the
Company, or (C) a participant in any transaction to which the Company is a
party or (ii) is a party to any Contract with the Company.
11
3.20 Banks. Schedule 3.20 contains a complete and correct list of the
names and locations of all banks in which Company has accounts or safe
deposit boxes and the names of all persons authorized to draw thereon or
to have access thereto. Except as set forth on Schedule 3.20, no person
holds a power of attorney to act on behalf of the Company.
3.21 No Misrepresentation. No representation or warranty of any Seller
contained in this Agreement or in any schedule hereto or in any
certificate or other instrument furnished by any Seller to the Purchaser
pursuant to the terms hereof, contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
contained herein or therein not misleading.
3.22 Financial Advisors. No Person has acted, directly or indirectly, as a
broker, finder or financial advisor for the Sellers or the Company in
connection with the transactions contemplated by this Agreement and no
Person is entitled to any fee or commission or like payment in respect
thereof.
3.23 Patriot Act. The Sellers certify that, to the best of the Sellers'
knowledge, the Company has not been designated, and is not owned or
controlled, by a "suspected terrorist" as defined in Executive Order
13224. The Sellers hereby acknowledge that the Purchaser seeks to comply
with all applicable Laws concerning money laundering and related
activities. In furtherance of those efforts, the Sellers hereby represent,
warrant and agree that: (i) none of the cash or property owned by the
Company has been or shall be derived from, or related to, any activity
that is deemed criminal under United States law; and (ii) no contribution
or payment by the Company has, and this Agreement will not, cause the
Company or the Purchaser to be in violation of the United States Bank
Secrecy Act, the United States International Money Laundering Control Act
of 1986 or the United States International Money Laundering Abatement and
Anti-Terrorist Financing Act of 2001.
3.24 Accredited Investors. Each of the Sellers represents and warrants to
Purchaser that he or she is an "accredited investor" as such term is
defined under the Securities Act of 1933, as amended.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Sellers, that:
4.1 Organization and Good Standing.
The Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of the State of Nevada, with full
corporate power and corporate authority to (i) own, lease and operate its
properties, (ii) carry on the business as currently conducted by it. There
are no states or jurisdictions in which the character and location of any
of the properties owned or leased by the Purchaser, or the conduct of the
Purchaser's business makes it necessary for the Purchaser to qualify to do
business as a foreign corporation, except for those jurisdictions in which
the failure to so qualify would not have a Material Adverse Effect on the
business or operations of the Purchaser.
12
4.2 Authorization of Agreement.
The Purchaser has full corporate power and authority to execute and
deliver this Agreement and each other agreement, document, instrument or
certificate contemplated by this Agreement or to be executed by the
Purchaser in connection with the consummation of the transactions
contemplated hereby and thereby (the "Purchaser Documents"), and to
consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance by the Purchaser of this Agreement and
each Purchaser Document have been duly authorized by all necessary
corporate action on behalf of the Purchaser. This Agreement has been, and
each Purchaser Document will be at or prior to the Closing, duly executed
and delivered by the Purchaser and (assuming the due authorization,
execution and delivery by the other parties hereto and thereto) this
Agreement constitutes, and each Purchaser Document when so executed and
delivered will constitute, legal, valid and binding obligations of the
Purchaser, enforceable against the Purchaser in accordance with their
respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights
and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought
in a proceeding at law or in equity).
4.3 Capitalization.
The authorized capital stock of the Purchaser consists of:
100,000,000 shares of common stock, $0.001 par value per share, 3,333,469
shares of which are issued and outstanding (the "Shares"), and 10,000,000
shares of preferred stock, $0.001 par value per share, none of which are
issued and outstanding. All of the Shares are duly authorized, validly
issued, fully paid and nonassessable. Schedule 4.3 sets forth a true and
complete list of the holders of all outstanding shares of the Shares as of
May 6, 2005, and the holders of all outstanding options and warrants
issued by the Purchaser, which shares, options and warrants are held by
them in the amounts set forth on Schedule 4.3. Except as contemplated by
this Agreement and except as set forth on Schedule 4.3, there are no
options, warrants or other rights, agreements, arrangements or commitments
of any character relating to the issued or unissued capital stock of the
Purchaser or obligating the Purchaser to issue or sell any shares of
capital stock of or other equity interests in the Purchaser. There is no
personal liability, and there are no preemptive rights with regard to the
capital stock of the Purchaser, and no right-of-first refusal or similar
catch-up rights with regard to such capital stock. Except as set forth on
Schedule 4.3 and except for the transactions contemplated by this
Agreement, there are no outstanding contractual obligations or other
commitments or arrangements of the Purchaser to (A) repurchase, redeem or
otherwise acquire any shares of the Shares (or any interest therein) or
(B) to provide funds to or make any investment (in the form of a loan,
capital contribution or otherwise) in any other entity, or (C) issue or
distribute to any person any capital stock of the Purchaser, or (D) issue
or distribute to holders of any of the capital stock of the Purchaser any
evidences of indebtedness or assets of the Purchaser. All of the
outstanding securities of the Purchaser have been issued and sold by the
Purchaser in full compliance in all material respects with applicable
federal and state securities laws.
4.4 Subsidiaries. Purchaser has no subsidiaries.
13
4.5 Corporate Records.
(a) The Purchaser has delivered to the Sellers true, correct and
complete copies of the articles of incorporation (each
certified by the Secretary of State or other appropriate
official of the applicable jurisdiction of organization) and
by-laws (each certified by the secretary, assistant secretary
or other appropriate officer) or comparable organizational
documents of the Purchaser.
(b) The minute books of the Purchaser previously made available to
the Sellers contain complete and accurate records of all
meetings and accurately reflect all other corporate action of
the stockholders and board of directors (including committees
thereof) of the Purchaser to the best of the Purchaser's
knowledge. The stock certificate books and stock transfer
ledgers of the Purchaser previously made available to the
Sellers are true, correct and complete. All stock transfer
taxes levied or payable with respect to all transfers of
shares of the Purchaser prior to the date hereof have been
paid and appropriate transfer tax stamps affixed to the best
of the Purchaser's knowledge.
4.6 Conflicts; Consents of Third Parties.
(a) None of the execution and delivery by Purchaser of this
Agreement and the Purchaser Documents, the consummation of the
transactions contemplated hereby or thereby, or compliance by
Purchaser with any of the provisions hereof or thereof will
(i) conflict with, or result in the breach of, any provision
of the articles of incorporation or by-laws or comparable
organizational documents of the Purchaser; (ii) conflict with,
violate, result in the breach or termination of, or constitute
a default under any note, bond, mortgage, indenture, license,
agreement or other instrument or obligation to which the
Purchaser is a party or by which any of them or any of their
respective properties or assets is bound; (iii) violate any
statute, rule, regulation, order or decree of any governmental
body or authority by which the Purchaser is bound; or (iv)
result in the creation of any Lien upon the properties or
assets of the Purchaser except, in case of clauses (ii), (iii)
and (iv), for such violations, breaches or defaults as would
not, individually or in the aggregate, have a Material Adverse
Effect.
(b) No consent, waiver, approval, Order, permit or authorization
of, or declaration or filing with, or notification to, any
Person or Governmental or Regulatory Authority is required on
the part of Purchaser in connection with the execution and
delivery of this Agreement or the Purchaser Documents, or the
compliance by Purchaser with any of the provisions hereof or
thereof.
4.7 Financial Statements.
(a) The Purchaser has delivered to Sellers copies of (i) the
audited balance sheets of the Purchaser as at December 31,
2004, 2003 and 2002 and the related audited statements of
income and of cash flows of the Purchaser for the years then
ended and (ii) the unaudited balance sheet of the Purchaser as
at March 31, 2005 and the related statements of income and
cash flows of the Purchaser for the three month period then
ended (such audited and unaudited statements, including the
related notes and schedules thereto, are referred to herein as
the "Financial Statements"). Each of the Financial Statements
is complete and correct in all material respects, has been
prepared in accordance with GAAP (subject to normal year-end
adjustments in the case of the unaudited statements) and in
conformity with the practices consistently applied by the
Purchaser without modification of the accounting principles
used in the preparation thereof and presents fairly the
financial position, results of operations and cash flows of
the Purchaser as at the dates and for the periods indicated.
14
(b) For the purposes hereof, the audited balance sheet of the
Purchaser as at December 31, 2004 is referred to as the
"Balance Sheet" and December 31, 2004 is referred to as the
"Balance Sheet Date".
4.8 . No Undisclosed Liabilities. Purchaser has no indebtedness,
obligations or liabilities of any kind (whether accrued, absolute,
contingent or otherwise, and whether due or to become due) that would have
been required to be reflected in, reserved against or otherwise described
on the Balance Sheet or in the notes thereto in accordance with GAAP which
was not fully reflected in, reserved against or otherwise described in the
Balance Sheet or the notes thereto or was not incurred in the ordinary
course of business consistent with past practice since the Balance Sheet
Date.
4.9 Absence of Certain Developments. Except as expressly contemplated by
this Agreement or as set forth on Schedule 4.9, since the Balance Sheet
Date:
(i) there has not been any material adverse change nor has there
occurred any event which is reasonably likely to result in a
material adverse change;
(ii) there has not been any damage, destruction or loss, whether or
not covered by insurance, with respect to the property and
assets of the Purchaser having a replacement cost of more than
$25,000 for any single loss or $100,000 for all such losses;
(iii) there has not been any declaration, setting aside or payment
of any dividend or other distribution in respect of any shares
of capital stock of the Purchaser or any repurchase,
redemption or other acquisition by the Purchaser of any
outstanding shares of capital stock or other securities of, or
other ownership interest in, the Purchaser;
(iv) the Purchaser has not awarded or paid any bonuses to employees
of the Purchaser with respect to the fiscal year ended
December 31, 2004, except to the extent accrued on the Balance
Sheet or entered into any employment, deferred compensation,
severance or similar agreement (nor amended any such
agreement) or agreed to increase the compensation payable or
to become payable by it to any of the Purchaser's directors,
officers, employees, agents or representatives or agreed to
increase the coverage or benefits available under any
severance pay, termination pay, vacation pay, company awards,
salary continuation for disability, sick leave, deferred
compensation, bonus or other incentive compensation,
insurance, pension or other employee benefit plan, payment or
arrangement made to, for or with such directors, officers,
employees, agents or representatives (other than normal
increases in the ordinary course of business consistent with
past practice and that in the aggregate have not resulted in a
material increase in the benefits or compensation expense of
the Purchaser);
15
(v) there has not been any change by the Purchaser in accounting
or Tax reporting principles, methods or policies;
(vi) the Purchaser has not entered into any transaction or Contract
or conducted its business other than in the ordinary course
consistent with past practice;
(vii) the Purchaser has not made any loans, advances or capital
contributions to, or investments in, any Person or paid any
fees or expenses to any Seller or any Affiliate of any Seller;
(viii) the Purchaser has not mortgaged, pledged or subjected to any
Lien, any of its assets, or acquired any assets or sold,
assigned, transferred, conveyed, leased or otherwise disposed
of any assets of the Purchaser, except for assets acquired or
sold, assigned, transferred, conveyed, leased or otherwise
disposed of in the ordinary course of business consistent with
past practice;
(ix) the Purchaser has not discharged or satisfied any Lien, or
paid any obligation or liability (fixed or contingent), except
in the ordinary course of business consistent with past
practice and which, in the aggregate, would not be material to
the Purchaser;
(x) the Purchaser has not canceled or compromised any debt or
claim or amended, canceled, terminated, relinquished, waived
or released any Contract or right except in the ordinary
course of business consistent with past practice and which, in
the aggregate, would not be material to the Purchaser;
(xi) the Purchaser has not made or committed to make any capital
expenditures or capital additions or betterments in excess of
$25,000 individually or $100,000 in the aggregate;
(xii) the Purchaser has not instituted or settled any material legal
proceeding; and
(xiii) the Purchaser has not agreed to do anything set forth in this
Section 4.9.
4.10 Taxes.
(a) Except as set forth on Schedule 4.10, (A) all Tax Returns
required to be filed by or on behalf of the Purchaser have
been filed with the appropriate taxing authorities in all
jurisdictions in which such Tax Returns are required to be
filed (after giving effect to any valid extensions of time in
which to make such filings), and all such Tax Returns were
true, complete and correct in all material respects; (B) all
Taxes payable by or on behalf of the Purchaser or in respect
of its income, assets or operations have been fully and timely
paid, and (C) the Purchaser has not executed or filed with the
IRS or any other taxing authority any agreement, waiver or
other document or arrangement extending or having the effect
of extending the period for assessment or collection of Taxes
(including, but not limited to, any applicable statute of
limitation), and no power of attorney with respect to any Tax
matter is currently in force.
16
(b) The Purchaser has complied in all material respects with all
applicable laws, rules and regulations relating to the payment
and withholding of Taxes and has duly and timely withheld from
employee salaries, wages and other compensation and has paid
over to the appropriate taxing authorities all amounts
required to be so withheld and paid over for all periods under
all applicable laws.
(c) The Sellers have received complete copies of (A) all federal,
state, local and foreign income or franchise Tax Returns of
the Purchaser relating to the taxable periods since 2001 and
(B) any audit report issued within the last three years
relating to Taxes due from or with respect to the Purchaser
its income, assets or operations.
(d) Schedule 4.10 lists all material types of Taxes paid and
material types of Tax Returns filed by or on behalf of the
Purchaser. Except as set forth on Schedule 4.10 and to the
best of the Purchaser's knowledge, no claim has been made by a
taxing authority in a jurisdiction where the Purchaser does
not file Tax Returns such that it is or may be subject to
taxation by that jurisdiction.
(e) Except as set forth on Schedule 4.10, all deficiencies
asserted or assessments made as a result of any examinations
by the IRS or any other taxing authority of the Tax Returns of
or covering or including the Purchaser have been fully paid,
and there are no other audits or investigations by any taxing
authority in progress, nor have the Sellers or the Purchaser
received any notice from any taxing authority that it intends
to conduct such an audit or investigation. No issue has been
raised by a federal, state, local or foreign taxing authority
in any current or prior examination which, by application of
the same or similar principles, could reasonably be expected
to result in a proposed deficiency for any subsequent taxable
period.
(f) Except as set forth on Schedule 4.10, neither the Purchaser
nor any other Person (including any of the Sellers) on behalf
of the Purchaser has (A) filed a consent pursuant to Section
341(f) of the Code or agreed to have Section 341(f)(2) of the
Code apply to any disposition of a subsection (f) asset (as
such term is defined in Section 341(f)(4) of the Code) owned
by the Purchaser, (B) agreed to or is required to make any
adjustments pursuant to Section 481(a) of the Code or any
similar provision of state, local or foreign law by reason of
a change in accounting method initiated by the Purchaser or
has any knowledge that the Internal Revenue Service has
proposed any such adjustment or change in accounting method,
or has any application pending with any taxing authority
requesting permission for any changes in accounting methods
that relate to the business or operations of the Purchaser,
(C) executed or entered into a closing agreement pursuant to
Section 7121 of the Code or any predecessor provision thereof
or any similar provision of state, local or foreign law with
respect to the Purchaser, or (D) requested any extension of
time within which to file any Tax Return, which Tax Return has
since not been filed.
(g) No property owned by the Purchaser is (i) property required to
be treated as being owned by another Person pursuant to the
provisions of Section 168(f)(8) of the Internal Revenue Code
of 1954, as amended and in effect immediately prior to the
enactment of the Tax Reform Act of 1986, (ii) constitutes
"tax-exempt use property" within the meaning of Section
168(h)(1) of the Code or (iii) is "tax-exempt bond financed
property" within the meaning of Section 168(g) of the Code.
(h) The Purchaser is not a foreign person within the meaning of
Section 1445 of the Code.
17
(i) The Purchaser is not a party to any tax sharing or similar
agreement or arrangement (whether or not written) pursuant to
which it will have any obligation to make any payments after
the Closing.
(j) There is no contract, agreement, plan or arrangement covering
any person that, individually or collectively, could give rise
to the payment of any amount that would not be deductible by
the Company, its Affiliates or their respective affiliates by
reason of Section 280G of the Code, or would constitute
compensation in excess of the limitation set forth in Section
162(m) of the Code.
(k) The Purchaser is not subject to any private letter ruling of
the IRS or comparable rulings of other taxing authorities.
(l) Except as set forth on Schedule 4.10, there are no liens as a
result of any unpaid Taxes upon any of the assets of the
Purchaser.
(m) Except as set forth on Schedule 4.10, the Purchaser has no
elections in effect for federal income tax purposes under
Sections 108, 168, 338, 441, 463, 472, 1017, 1033 or 4977 of
the code.
4.11 Real Property.
(a) Schedule 4.11(a) sets forth a complete list of (i) all real
property and interests in real property owned in fee by the
Purchaser (individually, an "Owned Property" and collectively,
the "Owned Properties"), and (ii) all real property and
interests in real property leased by the Purchaser
(individually, a "Real Property Lease" and the real properties
specified in such leases, together with the Owned Properties,
being referred to herein individually as a "Purchaser
Property" and collectively as the "Purchaser Properties") as
lessee or lessor. The Purchaser has good and marketable fee
title to all Owned Property, free and clear of all Liens of
any nature whatsoever except (A) Liens set forth on Schedule
4.11(a) and (B) Permitted Liens. The Purchaser Property
constitutes all interests in real property currently used or
currently held for use in connection with the business of the
Purchaser and which are necessary for the continued operation
of the business of the Purchaser as the business is currently
conducted. The Purchaser has a valid and enforceable leasehold
interest under each of the Real Property Leases, subject to
applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors' rights and remedies
generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity), and the Purchaser
has not received any written notice of any default or event
that with notice or lapse of time, or both, would constitute a
default by the Purchaser under any of the Real Property
Leases. All of the Purchaser Property, buildings, fixtures and
improvements thereon owned or leased by the Purchaser are in
good operating condition and repair (subject to normal wear
and tear). The Purchaser has delivered or otherwise made
available to the Sellers, correct and complete copies of (i)
all deeds, title reports and surveys for the Owned Properties
and (ii) the Real Property Leases, together with all
amendments, modifications or supplements, if any, thereto.
18
(b) The Purchaser has all material certificates of occupancy and
permits of any Governmental or Regulatory Authority necessary
or useful for the current use and operation of each Purchaser
Property, and the Purchaser has fully complied with all
material conditions of the permits applicable to them. No
default or violation, or event that with the lapse of time or
giving of notice or both would become a default or violation,
has occurred in the due observance of any permit.
(c) There does not exist any actual or, to the best knowledge of
the Purchaser, threatened or contemplated condemnation or
eminent domain proceedings that affect any Purchaser Property
or any part thereof, and Purchaser has not received any
notice, oral or written, of the intention of any Governmental
or Regulatory Authority or other Person to take or use all or
any part thereof.
(d) The Purchaser has not received any written notice from any
insurance company that has issued a policy with respect to any
Purchaser Property requiring performance of any structural or
other repairs or alterations to such Purchaser Property.
(e) The Purchaser does not own or hold, and is not obligated under
or a party to, any option, right of first refusal or other
Contractual right to purchase, acquire, sell, assign or
dispose of any real estate or any portion thereof or interest
therein.
4.12 Tangible Personal Property.
(a) Schedule 4.12(a) sets forth all leases of personal property
("Personal Property Leases") involving annual payments in
excess of $25,000 relating to personal property used in the
business of the Purchaser or to which the Purchaser is a party
or by which the properties or assets of the Purchaser is
bound. The Purchaser has delivered or otherwise made available
to the Sellers true, correct and complete copies of the
Personal Property Leases, together with all amendments,
modifications or supplements thereto.
(b) The Purchaser has a valid leasehold interest under each of the
Personal Property Leases under which it is a lessee, subject
to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to
general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity),
and there is no default under any Personal Property Lease by
the Purchaser or, to the best knowledge of the Purchaser, by
any other party thereto, and no event has occurred that with
the lapse of time or the giving of notice or both would
constitute a default thereunder.
(c) The Purchaser has good and marketable title to all of the
items of tangible personal property reflected in the Balance
Sheet (except as sold or disposed of subsequent to the date
thereof in the ordinary course of business consistent with
past practice), free and clear of any and all Liens other than
the Permitted Liens. All such items of tangible personal
property which, individually or in the aggregate, are material
to the operation of the business of the Purchaser are in good
condition and in a state of good maintenance and repair
(ordinary wear and tear excepted) and are suitable for the
purposes used.
19
(d) All of the items of tangible personal property used by the
Purchaser under the Personal Property Leases are in good
condition and repair (ordinary wear and tear excepted) and are
suitable for the purposes used.
4.13 Intangible Property.
Schedule 4.13 contains a complete and correct list of each patent,
trademark, trade name, service mark and copyright owned or used by
Purchaser as well as all registrations thereof and pending applications
therefor, and each license or other agreement relating thereto. Except as
set forth on Schedule 4.13, each of the foregoing is owned by the party
shown on such Schedule as owning the same, free and clear of all
mortgages, claims, liens, security interests, charges and encumbrances and
is in good standing and not the subject of any challenge. There have been
no claims made and the Purchaser has not received any notice or otherwise
knows or has reason to believe that any of the foregoing is invalid or
conflicts with the asserted rights of others. The Purchaser possesses all
patents, patent licenses, trade names, trademarks, service marks, brand
marks, brand names, copyrights, know-how, formulate and other proprietary
and trade rights necessary for the conduct of its business as now
conducted, not subject to any restrictions and without any known conflict
with the rights of others and the Purchaser has not forfeited or otherwise
relinquished any such patent, patent license, trade name, trademark,
service mark, brand mark, brand name, copyright, know-how, formulate or
other proprietary right necessary for the conduct of its business as
conducted on the date hereof. The Purchaser is not under any obligation to
pay any royalties or similar payments in connection with any license to
any Seller or any affiliate thereof.
4.14 Material Contracts.
Schedule 4.14 sets forth all of the following Contracts to which the
Purchaser is a party or by which it is bound (collectively, the "Material
Contracts"): (i) Contracts with any the Seller or any current officer or
director of the Purchaser; (ii) Contracts with any labor union or
association representing any employee of the Purchaser; (iii) Contracts
pursuant to which any party is required to purchase or sell a stated
portion of its requirements or output from or to another party; (iv)
Contracts for the sale of any of the assets of the Purchaser other than in
the ordinary course of business or for the grant to any person of any
preferential rights to purchase any of its assets; (v) joint venture
agreements; (vi) Material Contracts containing covenants of the Purchaser
not to compete in any line of business or with any person in any
geographical area or covenants of any other person not to compete with the
Purchaser in any line of business or in any geographical area; (vii)
Contracts relating to the acquisition by the Purchaser of any operating
business or the capital stock of any other person; (viii) Contracts
relating to the borrowing of money; or (ix) any other Contracts, other
than Real Property Leases, which involve the expenditure of more than
$100,000 in the aggregate or $25,000 annually or require performance by
any party more than one year from the date hereof. There have been made
available to the Sellers and their representatives true and complete
copies of all of the Material Contracts. Except as set forth on Schedule
4.14, all of the Material Contracts and other agreements are in full force
and effect and are the legal, valid and binding obligation of the
Purchaser, enforceable against them in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and
subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding at law or in equity).
Except as set forth on Schedule 4.14, the Purchaser is not in default in
any material respect under any Material Contracts, nor, to the knowledge
of Purchaser, is any other party to any Material Contract in default
thereunder in any material respect.
20
4.15 Employee Benefits.
(a) Schedule 4.15(a) sets forth a complete and correct list of (i)
all "employee benefit plans", as defined in Section 3(3)
ERISA, and any other pension plans or employee benefit
arrangements, programs or payroll practices (including,
without limitation, severance pay, vacation pay, company
awards, salary continuation for disability, sick leave,
retirement, deferred compensation, bonus or other incentive
compensation, stock purchase arrangements or policies,
hospitalization, medical insurance, life insurance and
scholarship programs) maintained by the Purchaser or to which
the Purchaser contributes or is obligated to contribute
thereunder with respect to employees of the Purchaser
("Employee Benefit Plans") and (ii) all "employee pension
plans", as defined in Section 3(2) of ERISA, maintained by the
Purchaser or any trade or business (whether or not
incorporated) which are under control, or which are treated as
a single employer, with Purchaser as an ERISA Affiliate or to
which the Purchaser or any ERISA Affiliate contributed or is
obligated to contribute thereunder ("Pension Plans"). Schedule
4.15(a) clearly identifies, in separate categories, Employee
Benefit Plans or Pension Plans that are (i) subject to Section
4063 and 4064 of ERISA ("Multiple Employer Plans"), (ii)
multiemployer plans (as defined in Section 4001(a)(3) of
ERISA) ("Multiemployer Plans") or (iii) "benefit plans",
within the meaning of Section 5000(b)(1) of the Code providing
continuing benefits after the termination of employment (other
than as required by Section 4980B of the Code or Part 6 of
Title I of ERISA and at the former employee's or his
beneficiary's sole expense).
(b) Each of the Employee Benefit Plans and Pension Plans intended
to qualify under Section 401 of the Code ("Qualified Plans")
so qualify and the trusts maintained thereto are exempt from
federal income taxation under Section 501 of the Code, and,
except as disclosed on Schedule 4.15(b), nothing has occurred
with respect to the operation of any such plan which could
cause the loss of such qualification or exemption or the
imposition of any liability, penalty or tax under ERISA or the
Code.
(c) All contributions and premiums required by law or by the terms
of any Employee Benefit Plan or Pension Plan which are defined
benefit plans or money purchase plans or any agreement
relating thereto have been timely made (without regard to any
waivers granted with respect thereto) to any funds or trusts
established thereunder or in connection therewith, and no
accumulated funding deficiencies exist in any of such plans
subject to Section 412 of the Code.
(d) The benefit liabilities, as defined in Section 4001(a)(16) of
ERISA, of each of the Employee Benefit Plans and Pension Plans
subject to Title IV of ERISA using the actuarial assumptions
that would be used by the Pension Benefit Guaranty Corporation
(the "PBGC") in the event it terminated each such plan do not
exceed the fair market value of the assets of each such plan.
The liabilities of each Employee Benefit Plan that has been
terminated or otherwise wound up, have been fully discharged
in full compliance with applicable Law.
21
(e) There has been no "reportable event" as that term is defined
in Section 4043 of ERISA and the regulations thereunder with
respect to any of the Employee Benefit Plans or Pension Plans
subject to Title IV of ERISA which would require the giving of
notice, or any event requiring notice to be provided under
Section 4041(c)(3)(C) or 4063(a) of ERISA.
(f) There has been no violation of ERISA with respect to the
filing of applicable returns, reports, documents and notices
regarding any of the Employee Benefit Plans or Pension Plans
with the Secretary of Labor or the Secretary of the Treasury
or the furnishing of such notices or documents to the
participants or beneficiaries of the Employee Benefit Plans or
Pension Plans.
(g) True, correct and complete copies of the following documents,
with respect to each of the Employee Benefit Plans and Pension
Plans (as applicable), have been delivered to the Sellers (A)
any plans and related trust documents, and all amendments
thereto, (B) the most recent Forms 5500 for the past three
years and schedules thereto, (C) the most recent financial
statements and actuarial valuations for the past three years,
(D) the most recent Internal Revenue Service determination
letter, (E) the most recent summary plan descriptions
(including letters or other documents updating such
descriptions) and (F) written descriptions of all non-written
agreements relating to the Employee Benefit Plans and Pension
Plans.
(h) There are no pending legal proceedings which have been
asserted or instituted against any of the Employee Benefit
Plans or Pension Plans, the assets of any such plans or the
Purchaser, or the plan administrator or any fiduciary of the
Employee Benefit Plans or Pension Plans with respect to the
operation of such plans (other than routine, uncontested
benefit claims), and there are no facts or circumstances which
could form the basis for any such legal proceeding.
(i) Each of the Employee Benefit Plans and Pension Plans has been
maintained, in all material respects, in accordance with its
terms and all provisions of applicable Law. All amendments and
actions required to bring each of the Employee Benefit Plans
and Pension Plans into conformity in all material respects
with all of the applicable provisions of ERISA and other
applicable Laws have been made or taken except to the extent
that such amendments or actions are not required by law to be
made or taken until a date after the Closing Date and are
disclosed on Schedule 4.15(i).
(j) The Purchaser and any ERISA Affiliate which maintains a
"benefits plan" within the meaning of Section 5000(b)(1) of
ERISA, have complied with the notice and continuation
requirements of Section 4980B of the Code or Part 6 of Title I
of ERISA and the applicable regulations thereunder.
(k) None of the Purchaser, any ERISA Affiliate or any organization
to which any is a successor or parent corporation, has
divested any business or entity maintaining or sponsoring a
defined benefit pension plan having unfunded benefit
liabilities (within the meaning of Section 4001(a)(18) of
ERISA) or transferred any such plan to any person other than
the Purchaser or any ERISA Affiliate during the five-year
period ending on the Closing Date.
(l) The Purchaser is not a "party in interest" or "disqualified
person" with respect to the Employee Benefit Plans or Pension
Plans has engaged in a "prohibited transaction" within the
meaning of Section 4975 of the Code or Section 406 of ERISA.
22
(m) None of the Purchaser or any ERISA Affiliate has terminated
any Employee Benefit Plan or Pension Plan subject to Title IV
of ERISA, or incurred any outstanding liability under Section
4062 of ERISA to the Pension Benefit Guaranty Corporation or
to a trustee appointed under Section 4042 of ERISA.
(n) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i)
result in any payment becoming due to any employee of
Purchaser; (ii) increase any benefits otherwise payable under
any Employee Benefit Plan or Pension Plan; or (iii) result in
the acceleration of the time of payment or vesting of any such
benefits.
(o) No stock or other security issued by Purchaser forms or has
formed a material part of the assets of any Employee Benefit
Plan or Pension Plan.
4.16 Labor.
(a) The Purchaser is not a party to any labor or collective
bargaining agreement and there are no labor or collective
bargaining agreements which pertain to employees of the
Purchaser.
(b) No employees of the Purchaser are represented by any labor
organization. No labor organization or group of employees of
the Purchaser has made a pending demand for recognition, and
there are no representation proceedings or petitions seeking a
representation proceeding presently pending or, to the best
knowledge of the Purchaser, threatened to be brought or filed,
with the National Labor Relations Board or other labor
relations tribunal. There is no organizing activity involving
the Purchaser pending or, to the best knowledge of the
Purchaser, threatened by any labor organization or group of
employees of the Purchaser.
(c) There are no (i) strikes, work stoppages, slowdowns, lockouts
or arbitrations or (ii) material grievances or other labor
disputes pending or, to the best knowledge of any Purchaser,
threatened against or involving the Purchaser. There are no
unfair labor practice charges, grievances or complaints
pending or, to the best knowledge of Purchaser, threatened by
or on behalf of any employee or group of employees of the
Purchaser.
4.17 Litigation.
There is no suit, action, proceeding, investigation, claim or order
pending or, to the knowledge of the Purchaser, overtly threatened against
the Purchaser (or to the knowledge of the Purchaser, pending or
threatened, against any of the officers, directors or key employees of the
Purchaser with respect to their business activities on behalf of the
Purchaser), or to which the Purchaser is otherwise a party, which, if
adversely determined, would have a Material Adverse Effect, before any
court, or before any governmental department, commission, board, agency,
or instrumentality; nor to the knowledge of the Purchaser is there any
reasonable basis for any such action, proceeding, or investigation. The
Purchaser is not subject to any judgment, order or decree of any court or
governmental agency except to the extent the same are not reasonably
likely to have a Material Adverse Effect and the Purchaser is not engaged
in any legal action to recover monies due it or for damages sustained by
it.
23
4.18 Compliance with Laws; Permits. The Purchaser is in compliance with
all Laws applicable to the Purchaser or to the conduct of the business or
operations of the Purchaser or the use of its properties (including any
leased properties) and assets, except for such non-compliances as would
not, individually or in the aggregate, have a Material Adverse Effect. The
Purchaser has all governmental permits and approvals from state, federal
or local authorities which are required for the Purchaser to operate its
business, except for those the absence of which would not, individually or
in the aggregate, have a Material Adverse Effect.
4.19 Environmental Matters. Except as set forth on Schedule 4.19 hereto:
(a) the operations of the Purchaser are in compliance with all
applicable Environmental Laws and all Environmental Permits;
(b) the Purchaser has obtained all permits required under all
applicable Environmental Laws necessary to operate its
business;
(c) the Purchaser is not the subject of any outstanding written
order or Contract with any Governmental or Regulatory
Authority or Person respecting (i) Environmental Laws, (ii)
Remedial Action, (iii) any release or threatened release of a
Hazardous Material or (iv) any Hazardous Activity;
(d) the Purchaser has not received any written communication
alleging that the Purchaser may be in violation of any
Environmental Law, or any Environmental Permit, or may have
any liability under any Environmental Law;
(e) the Purchaser has no current contingent liability in
connection with any Hazardous Activity or release of any
Hazardous Materials into the indoor or outdoor environment
(whether on-site or off-site);
(f) to the Purchaser's knowledge, there are no investigations of
the business, operations, or currently or previously owned,
operated or leased property of the Purchaser pending or
threatened which could lead to the imposition of any liability
pursuant to Environmental Law;
(g) there is not located at any of the properties of the Purchaser
any (i) underground storage tanks, (ii) asbestos-containing
material or (iii) equipment containing polychlorinated
biphenyls; and,
(h) the Purchaser has provided to the Sellers all environmentally
related audits, studies, reports, analyses, and results of
investigations that have been performed with respect to the
currently or previously owned, leased or operated properties
of the Purchaser.
4.20 Insurance. Schedule 4.20 sets forth a complete and accurate list of
all policies of insurance of any kind or nature covering the Purchaser or
any of its employees, properties or assets, including, without limitation,
policies of life, disability, fire, theft, workers compensation, employee
fidelity and other casualty and liability insurance. All such policies are
in full force and effect, and, to the Purchaser's knowledge, the Purchaser
is not in default of any provision thereof, except for such defaults as
would not, individually or in the aggregate, have a Material Adverse
Effect.
4.21 Inventories; Receivables; Payables.
24
(a) The inventories of the Purchaser are in good and marketable
condition, and are saleable in the ordinary course of
business. Adequate reserves have been reflected in the Balance
Sheet for obsolete or otherwise unusable inventory, which
reserves were calculated in a manner consistent with past
practice and in accordance with GAAP consistently applied.
(b) All accounts receivable of the Purchaser have arisen from bona
fide transactions in the ordinary course of business
consistent with past practice. All accounts receivable of the
Purchaser reflected on the Balance Sheet are good and
collectible at the aggregate recorded amounts thereof, net of
any applicable reserve for returns or doubtful accounts
reflected thereon, which reserves are adequate and were
calculated in a manner consistent with past practice and in
accordance with GAAP consistently applied. All accounts
receivable arising after the Balance Sheet Date are good and
collectible at the aggregate recorded amounts thereof, net of
any applicable reserve for returns or doubtful accounts, which
reserves are adequate and were calculated in a manner
consistent with past practice and in accordance with GAAP
consistently applied.
(c) All accounts payable of the Purchaser reflected in the Balance
Sheet or arising after the date thereof are the result of bona
fide transactions in the ordinary course of business and have
been paid or are not yet due and payable.
4.22 Related Party Transactions. Except as set forth on Schedule 4.22,
neither the Purchaser nor any Affiliates of Purchaser has borrowed any
moneys from or has outstanding any indebtedness or other similar
obligations to the Purchaser. Except as set forth in Schedule 4.22,
neither the Purchaser, any Affiliate of the Purchaser nor any officer or
employee of any of them (i) owns any direct or indirect interest of any
kind in, or controls or is a director, officer, employee or partner of, or
consultant to, or lender to or borrower from or has the right to
participate in the profits of, any Person which is (A) a competitor,
supplier, customer, landlord, tenant, creditor or debtor of the Purchaser,
(B) engaged in a business related to the business of the Purchaser, or (C)
a participant in any transaction to which the Purchaser is a party or (ii)
is a party to any Contract with the Purchaser.
4.23 No Misrepresentation. No representation or warranty of Purchaser
contained in this Agreement or in any schedule hereto or in any
certificate or other instrument furnished by the Purchaser to Sellers
pursuant to the terms hereof, contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
contained herein or therein not misleading.
4.24 Financial Advisors. Except as set forth on Schedule 4.24, no Person
has acted, directly or indirectly, as a broker or finder for the Purchaser
in connection with the transactions contemplated by this Agreement and no
Person is entitled to any fee or commission or like payment in respect
thereof.
4.25 Guarantees. Schedule 4.25 hereto is a complete and accurate list and
summary description of all written guarantees currently in effect
heretofore issued by the Purchaser to any bank or other lender in
connection with any credit facilities extended by such creditors to the
Purchaser in connection with any other contracts or agreements
(collectively, the "Guarantees"), including the name of such creditor and
the amount of the indebtedness, together with any interest and fees
currently owing and expected to be outstanding as of the Closing.
25
4.26 Patriot Act. The Purchaser certifies that it has not been designated,
and is not owned or controlled, by a "suspected terrorist" as defined in
Executive Order 13224. The Purchaser hereby acknowledges that the Sellers
seek to comply with all applicable Laws concerning money laundering and
related activities. In furtherance of those efforts, the Purchaser hereby
represents, warrants and agrees that: (i) none of the cash or property
owned by the Purchaser has been or shall be derived from, or related to,
any activity that is deemed criminal under United States law; and (ii) no
contribution or payment by the Purchaser has, and this Agreement will not,
cause the Purchaser to be in violation of the United States Bank Secrecy
Act, the United States International Money Laundering Control Act of 1986
or the United States International Money Laundering Abatement and
Anti-Terrorist Financing Act of 2001.
4.27 Trading Status. Purchaser's common stock is traded on the OTC
Bulletin Board, under the trading symbol "BGVE." Purchaser has at least
two market makers. As of the Closing, Purchaser's Common Stock will be
listed for trading on the OTCBB with at least two market makers.
4.28 Reporting Status. Purchaser is a reporting issuer under Section 15(d)
of the Securities Exchange Act of 1934 (the "'34 Act"). Purchaser is now,
and as of the Closing will be, current in its filings and will have filed
all of the filings required to have been made in the previous twelve
months.
4.29 Investment Intention. Purchaser is acquiring the Shares for its own
account, for investment purposes only and not with a view to the
distribution (as such term is used in Section 2(11) of the Securities Act
of 1933, as amended (the "Securities Act") thereof. Purchaser understands
that the Shares have not been registered under the Securities Act and
cannot be sold unless subsequently registered under the Securities Act or
an exemption from such registration is available.
4.30 Acquisition Shares. The Acquisition Shares issuable pursuant to the
purchase price, when issued, will be duly authorized and validly issued,
fully paid and non-assessable, will be delivered hereunder free and clear
of any Liens, except that such Acquisition Shares will be "restricted
securities", as such term is defined in the rules and regulations of the
SEC promulgated under the Securities Act, and will be subject to
restrictions on transfers pursuant to such rules and regulations.
ARTICLE 5.
COVENANTS
5.1 Access to Information.
The Sellers agree that, prior to the Closing Date, the Purchaser
shall be entitled, through its officers, employees and representatives
(including, without limitation, its legal advisors and accountants), to
make such investigation of the properties, businesses and operations of
the Company and its Subsidiaries and such examination of the books,
records and financial condition of the Company and its Subsidiaries as it
reasonably requests and to make extracts and copies of such books and
records. Any such investigation and examination shall be conducted during
regular business hours and under reasonable circumstances, and the Sellers
shall cooperate, and shall cause the Company and its Subsidiaries to
cooperate, fully therein. No investigation by the Purchaser prior to or
after the date of this Agreement shall diminish or obviate any of the
representations, warranties, covenants or agreements of the Sellers
contained in this Agreement or the Seller Documents. In order that the
Purchaser may have full opportunity to make such physical, business,
accounting and legal review, examination or investigation as it may
reasonably request of the affairs of the Company and its Subsidiaries, the
Sellers shall cause the officers, employees, consultants, agents,
accountants, attorneys and other representatives of the Company and its
Subsidiaries to cooperate fully with such representatives in connection
with such review and examination.
26
5.2 Conduct of the Business Pending the Closing.
(a) Except as otherwise expressly contemplated by this Agreement
or with the prior written consent of the Purchaser, the
Sellers shall, and shall cause the Company to:
(i) conduct the businesses of the Company only in the
ordinary course consistent with past practice;
(ii) use its best efforts to (A) preserve its present
business operations, organization (including, without
limitation, management and the sales force) and goodwill
of the Company and (B) preserve its present relationship
with Persons having business dealings with the Company;
(iii) maintain (A) all of the assets and properties of the
Company in their current condition, ordinary wear and
tear excepted and (B) insurance upon all of the
properties and assets of the Company in such amounts and
of such kinds comparable to that in effect on the date
of this Agreement;
(iv) (A) maintain the books, accounts and records of the
Company in the ordinary course of business consistent
with past practices, (B) continue to collect accounts
receivable and pay accounts payable utilizing normal
procedures and without discounting or accelerating
payment of such accounts, and (C) comply with all
contractual and other obligations applicable to the
operation of the Company; and
(v) comply in all material respects with applicable laws,
including, without limitation, Environmental Laws.
(b) Except as otherwise expressly contemplated by this Agreement
or with the prior written consent of the Purchaser, the
Sellers shall not, and shall cause the Company not to:
(i) declare, set aside, make or pay any dividend or other
distribution in respect of the capital stock of the
Company or repurchase, redeem or otherwise acquire any
outstanding shares of the capital stock or other
securities of, or other ownership interests in, the
Company;
(ii) transfer, issue, sell or dispose of any shares of
capital stock or other securities of the Company or
grant options, warrants, calls or other rights to
purchase or otherwise acquire shares of the capital
stock or other securities of the Company;
27
(iii) effect any recapitalization, reclassification, stock
split or like change in the capitalization of the
Company;
(iv) amend the certificate of incorporation or by-laws of the
Company;
(v) (A) materially increase the annual level of compensation
of any employee of the Company, (B) increase the annual
level of compensation payable or to become payable by
the Company to any of its executive officers, (C) grant
any unusual or extraordinary bonus, benefit or other
direct or indirect compensation to any employee,
director or consultant, (D) increase the coverage or
benefits available under any (or create any new)
severance pay, termination pay, vacation pay, company
awards, salary continuation for disability, sick leave,
deferred compensation, bonus or other incentive
compensation, insurance, pension or other employee
benefit plan or arrangement made to, for, or with any of
the directors, officers, employees, agents or
representatives of the Company or otherwise modify or
amend or terminate any such plan or arrangement or (E)
enter into any employment, deferred compensation,
severance, consulting, non-competition or similar
agreement (or amend any such agreement) to which the
Company is a party or involving a director, officer or
employee of the Company in his or her capacity as a
director, officer or employee of the Company;
(vi) subject to any Lien (except for leases that do not
materially impair the use of the property subject
thereto in their respective businesses as presently
conducted), any of the properties or assets (whether
tangible or intangible) of the Company;
(vii) acquire any material properties or assets or sell,
assign, transfer, convey, lease or otherwise dispose of
any of the material properties or assets (except for
fair consideration in the ordinary course of business
consistent with past practice) of the Company except,
with respect to the items listed on Schedule 5.2(b)(vii)
hereto, as previously consented to by the Purchaser;
(viii) cancel or compromise any debt or claim or waive or
release any material right of the Company except in the
ordinary course of business;
(ix) enter into any commitment for capital expenditures of
the Company in excess of $25,000 for any individual
commitment and $100,000 for all commitments in the
aggregate;
(x) enter into, modify or terminate any labor or collective
bargaining agreement of the Company or, through
negotiation or otherwise, make any commitment or incur
any liability to any labor organization with respect to
the Company;
(xi) permit the Company to enter into any transaction or to
make or enter into any Contract which by reason of its
size or otherwise is not in the ordinary course of
business consistent with past practice;
(xii) permit the Company to enter into or agree to enter into
any merger or consolidation with, any corporation or
other entity, and not engage in any new business or
invest in, make a loan, advance or capital contribution
to, or otherwise acquire the securities of any other
Person;
28
(xiii) except for transfers of cash pursuant to normal cash
management practices, permit the Company to make any
investments in or loans to, or pay any fees or expenses
to, or enter into or modify any Contract with, any
Seller or any Affiliate of any Seller; or
(xiv) agree to do anything prohibited by this Section 6.2 or
anything which would make any of the representations and
warranties of the Sellers in this Agreement or the
Seller Documents untrue or incorrect in any material
respect as of any time through and including the
Effective Time.
5.3 Consents. The Sellers shall use their best efforts, and the Purchaser
shall cooperate with the Sellers, to obtain at the earliest practicable
date all consents and approvals required to consummate the transactions
contemplated by this Agreement, including, without limitation, the
consents and approvals referred to in Section 3.6(b) hereof; provided,
however, that neither the Sellers nor the Purchaser shall be obligated to
pay any consideration therefor to any third party from whom consent or
approval is requested.
5.4 Other Actions. Each of the Sellers and the Purchaser shall use its
best efforts to (i) take all actions necessary or appropriate to
consummate the transactions contemplated by this Agreement and (ii) cause
the fulfillment at the earliest practicable date of all of the conditions
to their respective obligations to consummate the transactions
contemplated by this Agreement.
5.5 No Solicitation. The Sellers will not, and will not cause or permit
the Company or any of the Company's directors, officers, employees,
representatives or agents (collectively, the "Representatives") to,
directly or indirectly, (i) discuss, negotiate, undertake, authorize,
recommend, propose or enter into, either as the proposed surviving,
merged, acquiring or acquired corporation, any transaction involving a
merger, consolidation, business combination, purchase or disposition of
any amount of the assets or capital stock or other equity interest in the
Company or any of its Subsidiaries other than the transactions
contemplated by this Agreement (an "Acquisition Transaction"), (ii)
facilitate, encourage, solicit or initiate discussions, negotiations or
submissions of proposals or offers in respect of an Acquisition
Transaction, (iii) furnish or cause to be furnished, to any Person, any
information concerning the business, operations, properties or assets of
the Company or any of its Subsidiaries in connection with an Acquisition
Transaction, or (iv) otherwise cooperate in any way with, or assist or
participate in, facilitate or encourage, any effort or attempt by any
other Person to do or seek any of the foregoing. The Sellers will inform
the Purchaser in writing immediately following the receipt by any Seller,
the Company or any Representative of any proposal or inquiry in respect of
any Acquisition Transaction.
5.6 Publicity. None of the Sellers nor the Purchaser shall issue any press
release or public announcement concerning this Agreement or the
transactions contemplated hereby without obtaining the prior written
approval of the other party hereto, which approval will not be
unreasonably withheld or delayed, unless, in the sole judgment of the
Purchaser, disclosure is otherwise required by applicable Law or by the
applicable rules of any stock exchange on which the Purchaser lists
securities, provided that, to the extent required by applicable law, the
party intending to make such release shall use its best efforts consistent
with such applicable law to consult with the other party with respect to
the text thereof.
29
5.7 Use of Name. The Sellers hereby agree that upon the consummation of
the transactions contemplated hereby, the Purchaser and the Company shall
have the sole right to the use of the name "Refuel America, Inc." and the
Sellers shall not, and shall not cause or permit any Affiliate to, use
such name or any variation or simulation thereof in any business involving
the Company business or any related business. If, after the Closing Date,
the Company changes its name and the Company and its Affiliates cease to
use such name or any variation thereof in any of their businesses for a
period of twelve consecutive months, then the foregoing restriction with
respect to the use of the Company's name shall cease and the Sellers may
use such name in the conduct of any business.
5.8 Reverse Splits. The Sellers and the Company agree not to effectuate
any reverse splits of the Purchaser's common stock for a period of six (6)
months following the Closing Date.
5.9 Registration of Shares of Form S-8. The Sellers and the Company agree
not to issue any shares of the Purchaser's common stock registered on the
registration statement on Form S-8 for a period of six (6) months
following the Closing Date, to the Company's consultants.
ARTICLE 6.
CONDITIONS TO CLOSING
6.1 Conditions Precedent to Obligations of Purchaser.
The obligation of the Purchaser to consummate the transactions
contemplated by this Agreement is subject to the fulfillment, on or prior
to the Closing Date, of each of the following conditions (any or all of
which may be waived by the Purchaser in whole or in part to the extent
permitted by applicable law):
(a) all representations and warranties of the Sellers contained
herein shall be true and correct as of the date hereof and as
of the Closing Date;
(b) all representations and warranties of the Sellers contained
herein qualified as to materiality shall be true and correct,
and the representations and warranties of the Sellers
contained herein not qualified as to materiality shall be true
and correct in all material respects, at and as of the Closing
Date with the same effect as though those representations and
warranties had been made again at and as of that time;
(c) the Sellers shall have performed and complied in all material
respects with all obligations and covenants required by this
Agreement to be performed or complied with by them on or prior
to the Closing Date;
(d) the Purchaser shall have been furnished with certificates
(dated the Closing Date and in form and substance reasonably
satisfactory to the Purchaser) executed by each Seller
certifying as to the fulfillment of the conditions specified
in Sections 6.1(a), 6.1(b) and 6.1(c) hereof;
(e) Certificates representing 100% of the Shares shall have been,
or shall at the Closing be, validly delivered and transferred
to the Purchaser, free and clear of any and all Liens;
30
(f) there shall not have been or occurred any material adverse
change in the business or operations of the Company;
(g) the Sellers shall have obtained all consents and waivers
referred to in Section 3.6(b) hereof, in a form reasonably
satisfactory to the Purchaser, with respect to the
transactions contemplated by this Agreement and the Seller
Documents;
(h) no legal proceedings shall have been instituted or threatened
or claim or demand made against the Sellers, the Company or
any of its Subsidiaries, or the Purchaser seeking to restrain
or prohibit or to obtain substantial damages with respect to
the consummation of the transactions contemplated hereby, and
there shall not be in effect any Order by a Governmental or
Regulatory Authority of competent jurisdiction restraining,
enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby;
(i) each of the Sellers shall have provided the Purchaser with an
affidavit of non-foreign status that complies with Section
1445 of the Code (a "FIRPTA Affidavit");
(j) all Affiliate Loans shall have been repaid to the Company
prior to the Closing Date; and
(k) the services agreement in the form attached hereto as Exhibit
C shall be executed by the Purchaser and the other parties
thereto.
6.2 Conditions Precedent to Obligations of the Sellers.
The obligations of the Sellers to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, prior to or
on the Closing Date, of each of the following conditions (any or all of
which may be waived by the Sellers in whole or in part to the extent
permitted by applicable law):
(a) all representations and warranties of the Purchaser contained
herein shall be true and correct as of the date hereof and as
of the Closing Date;
(b) all representations and warranties of the Purchaser contained
herein qualified as to materiality shall be true and correct,
and all representations and warranties of the Purchaser
contained herein not qualified as to materiality shall be true
and correct in all material respects, at and as of the Closing
Date with the same effect as though those representations and
warranties had been made again at and as of that date;
(c) the Purchaser shall have performed and complied in all
material respects with all obligations and covenants required
by this Agreement to be performed or complied with by
Purchaser on or prior to the Closing Date;
(d) the Sellers shall have been furnished with certificates (dated
the Closing Date and in form and substance reasonably
satisfactory to the Sellers) executed by the Chief Executive
Officer and Chief Financial Officer of the Purchaser
certifying as to the fulfillment of the conditions specified
in Sections 6.2(a), 6.2(b) and 6.2(c) hereof;
31
(e) there shall not be in effect any Order by a Governmental or
Regulatory Authority of competent jurisdiction restraining,
enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby;
(f) the Sellers shall have obtained all consents and waivers
referred to in Section 4.6(b) hereof, in a form reasonably
satisfactory to the Purchaser, with respect to the
transactions contemplated by this Agreement and the Seller
Documents;
(g) all officers and members of the Board of Directors of the
Purchaser shall have resigned and shall have appointed the
designees of the Sellers as members of the Board of Directors;
and
(h) the services agreement in the form attached hereto as Exhibit
C shall be executed by the Purchaser and the other parties
thereto.
ARTICLE 7.
TERMINATION
7.1 Material Change in the Business of Company. If any material loss or
damage to the Company Business occurs prior to Closing and such loss or
damage, in Purchaser' reasonable opinion, cannot be substantially repaired
or replaced within sixty (60) days, Purchaser shall, within two (2) days
following any such loss or damage, by notice in writing to Company, at its
option, either:
(a) terminate this Agreement, in which case no party will be under
any further obligation to any other party; or
(b) elect to complete the Acquisition and the other transactions
contemplated hereby, in which case the proceeds and the rights
to receive the proceeds of all insurance covering such loss or
damage will, as a condition precedent to Purchaser'
obligations to carry out the transactions contemplated hereby,
be vested in Company or otherwise adequately secured to the
satisfaction of Purchaser on or before the Closing Date.
7.2 Material Change in the Purchaser Business. If any material loss or damage to
the Purchaser Business occurs prior to Closing and such loss or damage, in
Company's reasonable opinion, cannot be substantially repaired or replaced
within sixty (60) days, Company shall, within two (2) days following any such
loss or damage, by notice in writing to Purchaser, at its option, either:
(a) terminate this Agreement, in which case no party will be under
any further obligation to any other party; or
(b) elect to complete the Acquisition and the other transactions
contemplated hereby, in which case the proceeds and the rights
to receive the proceeds of all insurance covering such loss or
damage will, as a condition precedent to Company's obligations
to carry out the transactions contemplated hereby, be vested
in Purchaser or otherwise adequately secured to the
satisfaction of Company on or before the Closing Date.
32
ARTICLE 8.
DOCUMENTS TO BE DELIVERED
8.1 Documents to be Delivered by the Sellers.
At the Closing, the Sellers shall deliver, or cause to be delivered,
to the Purchaser the following:
(a) stock certificates representing the Shares, duly endorsed in
blank or accompanied by stock transfer powers and with all
requisite stock transfer tax stamps attached;
(b) the certificates referred to in Section 6.1(d) and 6.1(e)
hereof;
(c) copies of all consents and waivers referred to in Section
6.1(g) hereof;
(d) certificates of good standing with respect to the Company
issued by the Secretary of State of the Delaware and for each
state in which the Company is qualified to do business as a
foreign corporation;
(e) duly executed Patent Royalty Agreement; and
(f) such other documents as the Purchaser shall reasonably
request.
8.2 Documents to be Delivered by the Purchaser.
At the Closing, the Purchaser shall deliver to the Sellers the
following:
(a) the Acquisition Shares;
(b) the certificates referred to in Section 6.2(d) hereof;
(c) copies of all consents and waivers referred to in Section
6.1(g) hereof;
(d) certificates of good standing with respect to the Company
issued by the Secretary of State of the Nevada and for each
state in which the Company is qualified to do business as a
foreign corporation;
(e) resignations of the officers and members of the Board of
Directors of Purchaser; and
(d) such other documents as the Sellers shall reasonably request.
33
ARTICLE 9.
INDEMNIFICATION
9.1 Indemnification.
(a) Subject to Section 9.2 hereof, the Sellers hereby agree to
jointly and severally indemnify and hold the Purchaser, the
Company, and their respective directors, officers, employees,
Affiliates, agents, successors and assigns (collectively, the
"Purchaser Indemnified Parties") harmless from and against:
(i) any and all losses, liabilities, obligations, damages,
costs and expenses based upon, attributable to or
resulting from the failure of any representation or
warranty of the Sellers set forth in Article 3 hereof,
or any representation or warranty contained in any
certificate delivered by or on behalf of the Sellers
pursuant to this Agreement, to be true and correct in
all respects as of the date made;
(ii) any and all losses, liabilities, obligations, damages,
costs and expenses based upon, attributable to or
resulting from the breach of any covenant or other
agreement on the part of the Sellers under this
Agreement;
(iii) any and all Expenses incident to the foregoing.
(b) Subject to Section 9.2, Purchaser hereby agrees to indemnify
and hold the Sellers and their respective Affiliates, agents,
successors and assigns (collectively, the "Seller Indemnified
Parties") harmless from and against:
(i) any and all losses, liabilities, obligations, damages,
costs and expenses based upon, attributable to or
resulting from the failure of any representation or
warranty of the Purchaser set forth in Section 4 hereof,
or any representation or warranty contained in any
certificate delivered by or on behalf of the Purchaser
pursuant to this Agreement, to be true and correct as of
the date made;
(ii) any and all losses, liabilities, obligations, damages,
costs and expenses based upon, attributable to or
resulting from the breach of any covenant or other
agreement on the part of the Purchaser under this
Agreement; and
(iii) any and all Expenses incident to the foregoing.
9.2 Limitations on Indemnification for Breaches of Representations and
Warranties.
An Indemnifying Party shall not have any liability under Section
9.1(a)(ii) or Section 9.1(b) hereof unless the aggregate amount of Losses
and Expenses to the indemnified parties finally determined to arise
thereunder based upon, attributable to or resulting from the failure of
any representation or warranty to be true and correct, other than the
representations and warranties set forth in Sections 3.7, 3.10 and 3.15
hereof, exceeds $5,000 (the "Basket") and, in such event, the Indemnifying
Party shall be required to pay the entire amount of such Losses and
Expenses.
9.3 Indemnification Procedures.
34
(a) In the event that any legal proceedings shall be instituted or
that any claim or demand ("Claim") shall be asserted by any
Person in respect of which payment may be sought under Section
9.1 hereof (regardless of the Basket referred to above), the
Indemnified Party shall reasonably and promptly cause written
notice of the assertion of any Claim of which it has knowledge
which is covered by this indemnity to be forwarded to the
Indemnifying Party. The Indemnifying Party shall have the
right, at its sole option and expense, to be represented by
counsel of its choice, which must be reasonably satisfactory
to the Indemnified Party, and to defend against, negotiate,
settle or otherwise deal with any Claim which relates to any
Losses indemnified against hereunder. If the Indemnifying
Party elects to defend against, negotiate, settle or otherwise
deal with any Claim which relates to any Losses indemnified
against hereunder, it shall within five (5) days (or sooner,
if the nature of the Claim so requires) notify the Indemnified
Party of its intent to do so. If the Indemnifying Party elects
not to defend against, negotiate, settle or otherwise deal
with any Claim which relates to any Losses indemnified against
hereunder, fails to notify the Indemnified Party of its
election as herein provided or contests its obligation to
indemnify the Indemnified Party for such Losses under this
Agreement, the Indemnified Party may defend against,
negotiate, settle or otherwise deal with such Claim. If the
Indemnified Party defends any Claim, then the Indemnifying
Party shall reimburse the Indemnified Party for the Expenses
of defending such Claim upon submission of periodic bills. If
the Indemnifying Party shall assume the defense of any Claim,
the Indemnified Party may participate, at his or its own
expense, in the defense of such Claim; provided, however, that
such Indemnified Party shall be entitled to participate in any
such defense with separate counsel at the expense of the
Indemnifying Party if, (i) so requested by the Indemnifying
Party to participate or (ii) in the reasonable opinion of
counsel to the Indemnified Party, a conflict or potential
conflict exists between the Indemnified Party and the
Indemnifying Party that would make such separate
representation advisable; and provided, further, that the
Indemnifying Party shall not be required to pay for more than
one such counsel for all indemnified parties in connection
with any Claim. The parties hereto agree to cooperate fully
with each other in connection with the defense, negotiation or
settlement of any such Claim.
(b) After any final judgment or award shall have been rendered by
a court, arbitration board or administrative agency of
competent jurisdiction and the expiration of the time in which
to appeal therefrom, or a settlement shall have been
consummated, or the Indemnified Party and the Indemnifying
Party shall have arrived at a mutually binding agreement with
respect to a Claim hereunder, the Indemnified Party shall
forward to the Indemnifying Party notice of any sums due and
owing by the Indemnifying Party pursuant to this Agreement
with respect to such matter and the Indemnifying Party shall
be required to pay all of the sums so due and owing to the
Indemnified Party by wire transfer of immediately available
funds within 10 business days after the date of such notice.
(c) The failure of the Indemnified Party to give reasonably prompt
notice of any Claim shall not release, waive or otherwise
affect the Indemnifying Party's obligations with respect
thereto except to the extent that the Indemnifying Party can
demonstrate actual loss and prejudice as a result of such
failure.
ARTICLE 10.
POST-CLOSING MATTERS
35
10.1 Forthwith after the Closing, Purchaser, Company and the Sellers agree
to use all their best efforts to:
(a) issue a news release reporting the Closing;
(b) take all necessary corporate action to change the name of the
Purchaser to Newgen Fuel Technologies, Inc.; and
(c) file a Form 8-K with the Securities and Exchange Commission
disclosing the terms of this Agreement with audited financial
statements of Company as well as any required pro forma
financial information or other information of Company and
Purchaser as required by the rules and regulations of the
Securities and Exchange Commission;
ARTICLE 11.
GENERAL PROVISIONS
11.1 Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed given when delivered personally or
mailed by certified mail, return receipt requested, to the parties (and
shall also be transmitted by facsimile to the Persons receiving copies
thereof) at the following addresses (or to such other address as a party
may have specified by notice given to the other party pursuant to this
provision):
If to Purchaser to:
Bongiovi Entertainment, Inc.
39 Hansen Farm Road
North Haven, CT 06473
with a copies to:
Iwona J. Alami, Esq.
Law Offices of Iwona J. Alami
620 Newport Center Dr., Suite 1100
Newport Beach, CA 92660
If to Company or Sellers to:
Refuel America, Inc.
12th Floor, 6000 Fairview Ave.
Charlotte, NC 28210
with a copy to:
Thomas A. Rose, Esq.
Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas
New York, New York 10018
Phone: (212) 930-9700
Facsimile: (212) 930-9725
36
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given
upon delivery, (ii) if delivered by mail in the manner described above to
the address as provided in this Section, be deemed given upon receipt, and
(iii) if delivered by courier to the address as provided for in this
Section, be deemed given on the earlier of the second Business Day
following the date sent by such courier or upon receipt. Any party from
time to time may change its address or other information for the purpose
of notices to that party by giving notice specifying such change to the
other party hereto.
11.2 Payment of Sales, Use or Similar Taxes. All sales, use, transfer,
intangible, recordation, documentary stamp or similar Taxes or charges, of
any nature whatsoever, applicable to, or resulting from, the transactions
contemplated by this Agreement shall be borne by the Sellers.
11.3 Expenses. Except as otherwise provided in this Agreement, the Sellers
and the Purchaser shall each bear its own expenses incurred in connection
with the negotiation and execution of this Agreement and each other
agreement, document and instrument contemplated by this Agreement and the
consummation of the transactions contemplated hereby and thereby, it being
understood that in no event shall the Company bear any of such costs and
expenses.
11.4 Specific Performance. The Sellers acknowledge and agree that the
breach of this Agreement would cause irreparable damage to the Purchaser
and that the Purchaser will not have an adequate remedy at law. Therefore,
the obligations of the Sellers under this Agreement, including, without
limitation, the Sellers' obligation to sell the Shares to the Purchaser,
shall be enforceable by a decree of specific performance issued by any
court of competent jurisdiction, and appropriate injunctive relief may be
applied for and granted in connection therewith. Such remedies shall,
however, be cumulative and not exclusive and shall be in addition to any
other remedies which any party may have under this Agreement or otherwise.
11.5 Further Assurances. The Sellers and the Purchaser each agrees to
execute and deliver such other documents or agreements and to take such
other action as may be reasonably necessary or desirable for the
implementation of this Agreement and the consummation of the transactions
contemplated hereby.
11.6 Submission to Jurisdiction; Consent to Service of Process.
(a) The parties hereto hereby irrevocably submit to the
non-exclusive jurisdiction of any federal or state court
located within the State of New York over any dispute arising
out of or relating to this Agreement or any of the
transactions contemplated hereby and each party hereby
irrevocably agrees that all claims in respect of such dispute
or any suit, action proceeding related thereto may be heard
and determined in such courts. The parties hereby irrevocably
waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying
of venue of any such dispute brought in such court or any
defense of inconvenient forum for the maintenance of such
dispute. Each of the parties hereto agrees that a judgment in
any such dispute may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
37
(b) Each of the parties hereto hereby consents to process being
served by any party to this Agreement in any suit, action or
proceeding by the mailing of a copy thereof in accordance with
the provisions of Section 11.1.
11.7 Entire Agreement; Amendments and Waivers. This Agreement (including
the schedules and exhibits hereto) represents the entire understanding and
agreement between the parties hereto with respect to the subject matter
hereof and can be amended, supplemented or changed, and any provision
hereof can be waived, only by written instrument making specific reference
to this Agreement signed by the party against whom enforcement of any such
amendment, supplement, modification or waiver is sought. No action taken
pursuant to this Agreement, including without limitation, any
investigation by or on behalf of any party, shall be deemed to constitute
a waiver by the party taking such action of compliance with any
representation, warranty, covenant or agreement contained herein. The
waiver by any party hereto of a breach of any provision of this Agreement
shall not operate or be construed as a further or continuing waiver of
such breach or as a waiver of any other or subsequent breach. No failure
on the part of any party to exercise, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of such right, power or remedy by
such party preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. All remedies hereunder are cumulative
and are not exclusive of any other remedies provided by law.
11.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada.
11.9 Headings. Section headings of this Agreement are for reference
purposes only and are to be given no effect in the construction or
interpretation of this Agreement.
11.10 Severability. If any provision of this Agreement is invalid or
unenforceable, the balance of this Agreement shall remain in effect.
11.11 Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns. Nothing in this Agreement shall create or be deemed to
create any third party beneficiary rights in any person or entity not a
party to this Agreement except as provided below. No assignment of this
Agreement or of any rights or obligations hereunder may be made by either
the Sellers or the Purchaser (by operation of law or otherwise) without
the prior written consent of the other parties hereto and any attempted
assignment without the required consents shall be void; provided, however,
that the Purchaser may assign this Agreement and any or all rights or
obligations hereunder (including, without limitation, the Purchaser's
rights to purchase the Shares and the Purchaser's rights to seek
indemnification hereunder) to any Affiliate of the Purchaser. Upon any
such permitted assignment, the references in this Agreement to the
Purchaser shall also apply to any such assignee unless the context
otherwise requires.
11.12 Counterparts. This Agreement may be executed in counterparts, each
of which when executed by any party will be deemed to be an original and
all of which counterparts will together constitute one and the same
Agreement. Delivery of executed copies of this Agreement by telecopier
will constitute proper delivery, provided that originally executed
counterparts are delivered to the parties within a reasonable time
thereafter.
38
[Remainder of page intentionally left blank.]
39
IN WITNESS WHEREOF the parties have executed this Agreement effective as of the
day and year first above written.
BONGIOVI ENTERTAINMENT, INC.
By: /s/ Larry Shatsoff
----------------------------
Name: Larry Shatsoff
Title: President/Director
REFUEL AMERICA, INC.
By: /s/ Bruce Wunner
----------------------------
Name: Bruce Wunner
Title: Chairman
SHAREHOLDER SIGNATURE PAGE FOLLOWS:
40
SHAREHOLDERS
/s/ Ian Williamson
- ----------------------------------------
Ian Williamson
/s/ Cliff Hazel
- ----------------------------------------
Cliff Hazel
/s/ Frank Crivello
- ----------------------------------------
Frank Crivello, SEP IRA
/s/ Frank Crivello
- ----------------------------------------
Frank Crivello
/s/ David Marks
- ----------------------------------------
David Marks
/s/ Clifford Rhee
- ----------------------------------------
Clifford Rhee
/s/ Luigi Lo Basso
- ----------------------------------------
Luigi Lo Basso
/s/ Guy Crawford
- ----------------------------------------
Guy Crawford
/s/ Henry Hackel
- ----------------------------------------
Henry Hackel
Underwood Family Partners
By: /s/
- ----------------------------------------
Battersea Capital, Inc.
41
By: /s/
- ----------------------------------------
Sichenzia Ross Friedman Ference LLP
By:/s/ Thomas A. Rose
- ----------------------------------------
/s/ John King
- ----------------------------------------
John King
/s/ John King
- ----------------------------------------
John King IRA, c/o Ch. Schwab
/s/ Jill King
- ----------------------------------------
Jill King
/s/ Jill King
- ----------------------------------------
Jill King IRA, c/o Ch. Schwab
FEA, LLC
By: /s/ Bruce Wunner
- ----------------------------------------
/s/ Michael D'Onofrio
- ----------------------------------------
Michael D'Onofrio
42
/s/ Mike Woods
- ----------------------------------------
Mike Woods
/s/ Marie C. D'Onofrio
- ----------------------------------------
Marie C. D'Onofrio
/s/ Thomas M. D'Onofrio
- ----------------------------------------
Thomas M. D'Onofrio
The Blues'
By:/s/ Ian Jack
- ----------------------------------------
/s/ Winifred M. D'Onofrio
- ----------------------------------------
Winifred Jack
/s/ Desmond Morrow
- ----------------------------------------
Desmond Morrow
43