STOCK PURCHASE AND RECAPITALIZATION AGREEMENT
This
Agreement this 31st day of March, 2009 by and among One Up Acquisition, Inc., a
Georgia corporation and wholly owned subsidiary of Parent ("Buyer"); Remark Enterprises, Inc., a
Nevada corporation ("Parent"); and One Up Innovations, Inc. a
Georgia corporation (the "Company") and ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇, majority shareholder of the Company (“Seller”).
RECITALS
A. The
respective Boards of Directors of each of the Company, Buyer and Parent, and
Seller, has approved and declared advisable the merger of the Company with and
into Buyer (the "Merger") and approved
the Merger upon the terms and subject to the conditions set forth in this
Agreement, whereby each issued and outstanding share of the common stock of the
Company (a "Company
Common Share" or, collectively, the "Company Common
Shares"), will be converted into 4.3845546753968 shares of common stock,
$0.0001 par value, of Parent ("Parent Common Stock")
which, after giving effect to the Merger, shall equal, in the aggregate, 90% of
the total issued and outstanding common stock of Parent. Each Series
A Preferred Share of the Company (a “Company Preferred
Share” or, collectively, the “Company Preferred
Shares”) will be converted into 4.3 shares of preferred stock of Parent
with the provisions, rights and designations set forth herein. The
Company Common Shares and the Company Preferred shares are referred to herein,
collectively, as the “Company
Shares”.
B. The
respective Boards of Directors of the Company, Buyer and Parent have determined
that the Merger is in furtherance of and consistent with their respective
long-term business strategies and is fair to and in the best interests of their
respective stockholders.
C. It
is intended that, for federal income tax purposes, the Merger shall qualify as a
reorganization under the provisions of Section 368(a) of the Internal Revenue
Code of 1986, as amended, and the rules and regulations promulgated thereunder
(the "Code");
D. For
financial accounting purposes, it is intended that the Merger will be accounted
for as a "purchase";
NOW, THEREFORE, in
consideration of the premises, and of the representations, warranties, covenants
and agreements contained herein, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
THE MERGER; CLOSING; EFFECT OF
MERGER
SECTION
1.1 The
Merger. Upon the terms and subject to the conditions set forth
in this Agreement and in accordance with the laws of the state of Georgia
("Georgia Law")
at the Effective Time, the Buyer shall be merged with and into the Company and
the separate corporate existence of the Buyer shall thereupon
cease. The Company shall be the surviving corporation in the Merger
(sometimes hereinafter referred to as the "Surviving
Corporation"), and the separate corporate existence of the Company with
all its rights, privileges, immunities, powers and franchises shall continue
unaffected by the merger, except as set forth herein. The Merger
shall have the effects specified in the Georgia Law.
SECTION
1.2 Closing. Subject
to the terms and conditions of this Agreement, the closing of the Merger and the
consummation of the other transactions contemplated hereby (the "Closing") shall take
place at the offices of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ not later than June 20, 2009 and at such other date, time and
place as the parties hereto shall agree.
SECTION
1.3 Effective
Time. On the date of Closing, the Company and Buyer will cause
a Certificate of Merger (the "Georgia Certificate of
Merger") to be executed, acknowledged and filed with the Secretary of
State of the State of Georgia. The Merger shall become effective at the time
when the Georgia Certificate of Merger has been filed with the Secretary of
State of the State of Georgia, or, as otherwise agreed by the Company and Buyer
(the "Effective
Time").
SECTION
1.4 Certificate
of Incorporation. The certificate of incorporation of the
Company as in effect immediately prior to the Effective Time shall be the
certificate of incorporation of the Surviving Corporation (the "Certificate of
Incorporation"), until duly amended as provided therein or by applicable
law.
SECTION
1.5 By-Laws. The
by-laws of the Company in effect immediately prior to the Effective Time shall
be the by-laws of the Surviving Corporation (the "By-Laws"), until
thereafter amended as provided therein or by applicable law.
SECTION
1.6 Directors. The
director of the Company shall, from and after the Effective Time, be ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ until his successor have been duly elected or appointed and qualified
or until their earlier death, resignation or removal in accordance with the
Certificate of Incorporation and the By-Laws. As of the Effective Time, the
authorized number of directors comprising the Board of Directors of Parent shall
consist of not less than 3 and not more than 5 individuals. The
following individuals shall be elected to the Board Directors of Parent at the
Effective Time: (i) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (Chairman of the Board); (ii) ▇▇▇ ▇▇▇▇▇;
and (iii) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
SECTION
1.7 Officers. The
officer of the Company shall, from and after the Effective Time, be ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ (Chief Executive Officer and President), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, (Chief
Financial Officer and Secretary), and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Treasurer), until their
successors have been duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the Certificate of
Incorporation and the By-Laws. As of the Effective Time, the officers
of Parent shall be appointed as follows: (i) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (CEO, President),
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (Chief Financial Officer and Secretary) and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(Treasurer).
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SECTION
1.8 Effect on
Capital Stock. At the Effective Time, as a result of the
Merger and without any action on the part of the holder of any capital stock of
Buyer:
(a) Merger
Consideration.
(i) Each
Company Common Share issued and outstanding immediately prior to the Effective
Time shall be converted into, and become exchangeable for 4.3845546753968
validly issued, fully paid and nonassessable shares of Parent Common Stock (the
"Parent Common
Shares").
(ii) Each
Company Preferred Share issued and outstanding immediately prior to the
Effective Time shall be converted into and become exchangeable for one (1) share
of preferred stock of stock of Parent (“Parent Preferred
Stock”) with characteristics, rights and designations substantially
identical to the Company Preferred Shares except that each holder of record of
Parent Preferred Stock shall be entitled to vote at all meetings of common
stockholders and shall have ten (10) votes per share of Parent Preferred
Stock.
(iii) The
Parent Common Shares and the Parent Preferred Shares, collectively, are referred
to herein as the “Parent Merger Stock”,
and the conversion of the Company Shares into Parent Merger Stock is referred to
as the "Merger Purchase
Price");
(b) At
the Effective Time, all Company Shares shall be canceled and the Company shall
cease to exist, and each certificate (a "Certificate")
formerly representing:
(i)
any Company Common Shares shall thereafter represent only the right to receive
the shares of Parent Common Stock into which such Company Common Shares have
been converted; and
(ii) any
Company Preferred Shares shall thereafter represent only the right to
receive the shares of Parent Preferred Stock into which such Company
Preferred Shares have been converted.
SECTION 1.9 Exchange of
Certificates for Shares.
(a) Exchange. At
Closing, Parent shall deliver or cause to be delivered to each respective owner
of Company Shares and in each of their respective names certificates
representing Parent Merger Stock into which the Company Shares that such
shareholders owns are to be converted as set forth on Schedule 1 attached
hereto.
(b) Fractional
Shares. No certificates or scrip representing fractional
shares of Parent Common Stock or Parent Preferred Stock shall be issued upon the
surrender for exchange of Certificates pursuant to this Article I; no dividend
or other distribution by Parent and no stock split, combination or
reclassification shall relate to any such fractional share; and no such
fractional share shall entitle the record or beneficial owner thereof to vote or
to any other rights of a stockholder of Parent. In lieu of any such factional
share, each holder of Company Shares who would otherwise have been entitled
thereto upon the surrender of Certificate(s) for exchange pursuant to this
Article I will be paid an additional share of Parent Common Stock or Parent
Preferred Stock.
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(c) Adjustments of Conversion
Number. In the event that Parent changes the number of shares
of Parent Common Stock or Parent Preferred Stock , issued and outstanding prior
to the Effective Time as a result of a reclassification, stock split (including
a reverse split), dividend or distribution, recapitalization, merger (other than
the Merger, Stock Purchase or the cancellation of options previously granted by
the Company), subdivision, or other similar transaction with a dilutive effect,
or if a record date with respect to any of the foregoing shall occur prior to
the Effective Time, the conversion number shall be equitably
adjusted.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY AND SELLER
Each of
the Company and Seller represents, warrants and covenants to Buyer and Parent as
follows and acknowledges that Buyer and Parent are relying upon such
representations and warranties in connection with the Contemplated Transactions
(as hereinafter defined):
SECTION
2.1 Capitalization. The
outstanding and issued capital stock of the Company consists of 10,263,300
shares of common stock and 1,000,000 shares of Series A Preferred
Shares. Schedule 1 sets
forth the name of each record and beneficial shareholder of the Company (each a
"Shareholder"
and collectively the "Shareholders") and
the number of Company Shares held by each such person. Foam Labs,
Inc., a Georgia corporation (the “Subsidiary”), is
wholly owned by the Company and is its only subsidiary. The Company
and Subsidiary does not and, at the Closing, the Company and Subsidiary will
not, have outstanding any capital stock or other securities or any rights,
warrants or options to acquire securities of the Company or the Subsidiary, or
any convertible or exchangeable securities and, other than Buyer pursuant to
this Agreement, no person has or, at Closing will have, any right to purchase or
otherwise acquire any securities of the Company or the
Subsidiary. There are, and at Closing there will be, no outstanding
obligations of the Company or the Subsidiary to repurchase, redeem or otherwise
acquire any securities of the Company or the Subsidiary. All of the
Company Shares are, and at Closing will be, duly authorized, duly and validly
issued, fully paid and non-assessable, and none were issued in violation of any
preemptive rights, rights of first refusal or any other contractual or legal
restrictions of any kind except as set forth on Schedule 2.1.
SECTION
2.2 Title to the
Shares. Seller is the beneficial owner and holds good and
valid title to its Company Shares free and clear of any Lien. Upon
consummation of the Contemplated Transactions and the satisfaction of the
conditions to Closing set forth herein, Buyer will own all of the issued and
outstanding shares of capital stock of the Company, free and clear of any
Lien. At the Closing, Seller and each Shareholder of the Company will
deliver the Company Shares to Buyer free and clear of any Lien, other than
restrictions imposed by the Securities Act of 1933, as amended, (the "Securities
Act") and applicable securities Laws including the laws of the State
of Georgia.
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SECTION
2.3 Authority
Relative to this Agreement. At the Closing, the Company will
have full power, capacity and authority to execute and deliver each Transaction
Document to which it is or, at Closing, will be, a party and to consummate the
transactions contemplated hereby and thereby (the "Contemplated
Transactions"). The execution, delivery and performance by the
Company and Seller of each Transaction Document and the consummation of the
Contemplated Transactions to which the Company and/or Seller are, or at Closing,
will be, a party will have been duly and validly authorized by the Company and
Seller and no other acts by or on behalf of the Company or Seller will be
necessary or required to authorize the execution, delivery and performance by
each of the Company and Seller of each Transaction Document and the consummation
of the Contemplated Transactions to which it, he or she, is or, at Closing, will
be, a party. This Agreement and the other Transaction Documents to
which the Company or Seller is a party have been duly and validly executed and
delivered by the Company or Seller, respectively, and (assuming the valid
execution and delivery thereof by the other parties thereto) will constitute the
legal, valid and binding agreements of the Company and Seller, respectively,
enforceable against the Company and Seller in accordance with their respective
terms, except as such obligations and their enforceability may be limited by
applicable bankruptcy and other similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of equitable
remedies is subject to the discretion of the court before which any proceeding
therefor may be brought (whether at law or in equity).
SECTION
2.4 No
Conflicts; Consents. The execution, delivery and performance
by the Company of each Transaction Document to which it is a party and the
consummation of the Contemplated Transactions to which the Company is a party,
upon approval of the Shareholders will not: (i) violate any provision of
the certificate of incorporation or memorandum of association of the Company;
(ii) require the Company to obtain any consent, approval or action of or
waiver from, or make any filing with, or give any notice to, any Governmental
Body or any other person, except as set forth on Schedule 2.4
(the "Company Required
Consents"); (iii) violate, conflict with or result in a breach or default
under (with or without the giving of notice or the passage of time or both), or
permit the suspension or termination of, any material Contract (including any
Real Property Lease) to which the Company is a party or by which it or any of
its assets is bound or subject, or to the best of Company’s knowledge and
information result in the creation of any Lien upon any of the Company Shares or
upon any of the Assets of the Company; (iv) violate any Order, any Law, of
any Governmental Body against, or binding upon, the Company or upon any of their
respective assets or the Business; or (v) violate or result in the
revocation or suspension of any Permit.
SECTION
2.5 Corporate
Existence and Power. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Georgia, and has all requisite powers, authority and all Permits required to own
and/or operate its Assets and to carry on the Business as now conducted,
including all qualifications under any statute in effect in any state or foreign
jurisdiction in which the Company operates its Business. The Company
is duly qualified to do business and is in good standing in each state of the
United States and in each other jurisdiction where the character of the property
owned or leased by it or the nature of its activities makes such qualification
necessary.
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SECTION
2.6 Charter
Documents and Corporate Records. The Company has heretofore
delivered to Parent true and complete copies of the Articles of Incorporation,
By-Laws and minute books, or comparable instruments, of the Company as in effect
on the date hereof. The stock transfer books of the Company have been
made available to Parent for its inspection and are true and complete in all
respects.
SECTION
2.7 Financial
Statements.
(a) Schedule 2.7A
sets forth true, complete and correct copies of: (i) the Company's audited
financial statements as of and for the fiscal years ended June 30, 2008 and June
30, 2007 (the "Annual Statements"); (ii) the Company's and the Subsidiary’s
financial statements as of and for the six months ended December 31, 2008 (the
"Interim
Statements"); and (iii) all management letters, management
representation letters and attorney response letters issued in connection with
the Annual Statements and the Interim Statements. Each of the Annual Statements
and the Interim Statements present fairly and accurately in all material
respects the financial position of the Company and the Subsidiary as of its
date, and the earnings, changes in stockholders' equity and cash flows thereof
for the periods then ended in accordance with GAAP, consistently
applied. Each balance sheet contained therein or delivered pursuant
hereto fully sets forth all consolidated Assets and Liabilities of the Company
existing as of its date which, under GAAP, should be set forth therein, and each
statement of earnings contained therein or delivered pursuant hereto sets forth
the items of income and expense of the Company which should be set forth therein
in accordance with GAAP. The audit of the Annual Statements has been
completed and delivered by an independent auditing firm registered with the
Public Company Accounting Oversight Board.
(b) All
financial, business and accounting books, ledgers, accounts and official and
other records relating to the Company have been properly and accurately kept and
completed, and the Company has no knowledge, notice belief or information there
are any material inaccuracies or discrepancies contained or reflected
therein.
SECTION
2.8 Liabilities.
The Company has not incurred any Liabilities since December 31, 2008(the "Latest Balance Sheet
Date") except (i) current Liabilities for trade or business
obligations incurred in connection with the purchase of goods or services in the
ordinary course of the Business and consistent with past practice, and
(ii) Liabilities reflected on any balance sheet referred to in
Section 2.7(a).
SECTION
2.9 Company
Receivables. Except to the extent of the amount of the
allowance for doubtful accounts reflected in the Annual Statements and the
Interim Statements, all the Receivables of the Company reflected therein, and
all Receivables that have arisen since the Latest Balance Sheet Date (except
Receivables that have been collected since such date), are valid and enforceable
Claims subject to no known defenses, offsets, returns, allowances or credits of
any kind, and constitute bona fide Receivables collectible in the ordinary
course of the Business except as enforceability may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance or
similar laws or principles of equity affecting the enforcement of creditors
rights generally.
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SECTION
2.10 Absence of
Certain Changes. a) Since July 1, 2008, the Company has
conducted the Business in the ordinary course consistent with past practice,
except as disclosed on Schedule 2.10 hereof,
and there has not been:
(i) Any
material adverse change in the Condition of the Business;
(ii) Any
material damage, destruction or other casualty loss (whether or not covered by
insurance), condemnation or other taking affecting the Business or the Assets of
the Company;
(iii) Any
change in any method of accounting or accounting practice by the
Company;
(iv) Except
for normal increases granted in the ordinary course of business, any increase in
the compensation, commission, bonus or other direct or indirect remuneration
paid, payable or to become payable to any officer, stockholder, director,
consultant, agent or employee of the Company, or any alteration in the benefits
payable or provided to any thereof;
(v) Any
material adverse change in the relationship of the Company with its employees,
customers, suppliers or vendors;
(vi) Except
for any changes made in the ordinary course of Business, any material change in
any of the Company's business policies, including advertising, marketing,
selling, pricing, purchasing, personnel, returns or budget
policies;
(vii) Any
agreement or arrangement whether written or oral to do any of the
foregoing.
(viii) The
Company has no Liability that is past due and which, individually or in the
aggregate, exceeds $25,000, except as shown on the Annual Statements or the
Interim Statements.
SECTION
2.11 Leased Real
Property. b) The Company has no fee interest, purchase
options or rights of first refusal in any real property and the Company has no
leasehold or other interest in any real property, except as set forth on Schedule 2.11
(the "Leased Real
Property"), and all leases including all amendments, modifications,
extensions, renewals and/or supplements thereto (collectively, "Real Property
Leases") are described on Schedule 2.11.
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SECTION
2.12 Personal
Property; Assets. The Company has good and valid title to (or
valid leasehold interest in) all of its personal property and Assets, free and
clear of all Liens, except the Permitted Liens and as indicated on Schedule 2.12. The
machinery, equipment, computer software and other tangible personal property
constituting part of the Assets and all other Assets (whether owned or leased)
are in good condition and repair (subject to normal wear and tear) and are
reasonably sufficient and adequate in quantity and quality for the operation of
the Business as previously and presently conducted. Schedule 2.12
contains a list and description of all tangible personal property owned or
leased by the Company with a book value (before depreciation) of $25,000 or
more. The Assets constitute all of the assets, which are necessary to
operate the Business of the Company as currently conducted.
SECTION
2.13 Contracts. i) Schedule 2.13
sets forth an accurate and complete list of all Contracts to which the Company
is a party or by which it or its Assets are bound or subject that: (i) cannot be
canceled upon 30 days' notice without the payment or penalty of less than One
Thousand Dollars ($1,000); or (ii) involve aggregate annual future payments by
or to any person of more than Five Thousand Dollars ($5,000). True and complete
copies of all written Contracts (including all amendments thereto and waivers in
respect thereof) and summaries of the material provisions of all oral Contracts
so listed have been made available to Buyer.
(b) All
Contracts to which the Company is a party are valid, subsisting, in full force
and effect and binding upon the Company and the other parties thereto, in
accordance with their terms, except that no representation or warranty is given
as to the enforceability of any oral Contracts. Except as set forth
on Schedule
2.13, the Company is not in default (or alleged default) under any such
Contract.
SECTION
2.14 Patents and
Intellectual Property Rights. ii) Schedule 2.14 sets
forth a list of each patent, trademark, trade name, service ▇▇▇▇, brand ▇▇▇▇,
brand name, and registered copyright as well as all registrations thereof and
pending applications therefor, and each license or other contract relating
thereto (collectively, the "Intellectual
Property") owned or used in connection with the Business by the Company
and indicates, with respect to each item of Company's Intellectual Property that
is licensed by the Company, the name of the licensor thereof and, with respect
to oral Contracts, the terms of such license relating thereto. The
use of the foregoing by the Company does not conflict with, infringe upon,
violate or interfere with or constitute an appropriation of any right, title,
interest or goodwill, including, without limitation, any intellectual property
right, patent, trademark, trade name, service ▇▇▇▇, brand name, computer
program, database, industrial design, trade secret, copyright or any pending
application thereto of any other person and there have been no claims made and
the Company has not received any notice or otherwise know that any of the
foregoing is invalid or conflicts with the asserted rights of other Persons or
have not been used or enforced or have been failed to be used or enforced in a
manner that would result in the abandonment, cancellation or unenforceability of
the Intellectual Property, except as set forth on Schedule
2.14A.
(b) The
Company owns or has rights to use all Intellectual Property, know-how, formulae
and other proprietary and trade rights necessary to conduct the Business as it
is now conducted. The Company has not forfeited or otherwise
relinquished any such Intellectual Property, know-how, formulae or other
proprietary right used in the conduct of the Business as now
conducted.
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(c) To
the extent used in the conduct of the Business by the Company, each of the
licenses or other contracts relating to the Company's Intellectual Property
(collectively, the "Intellectual Property
Licenses") is in full force and effect and is valid and enforceable 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), and there is no notice or claim of default under any Intellectual
Property License either by the Company or, to the Company's knowledge, by any
other party thereto, and to the Company’s knowledge, no event has occurred that
with the lapse of time or the giving of notice or both would constitute a
default by the Company thereunder.
SECTION
2.15 Claims and
Proceedings. There are no outstanding Orders of any Governmental Body
against or involving the Company, its Assets, the Business, or the Company
Shares. There are no actions, suits, claims or counterclaims, examinations,
Company Required Consents or legal, administrative, governmental or arbitral
proceedings or investigations (collectively, "Claims") (whether or
not the defense thereof or Liabilities in respect thereof are covered by
insurance), pending or, to the best of the Company's knowledge, threatened on
the date hereof, against or involving the Company, its Assets, the Business or
the Company Shares.
SECTION
2.16 Taxes. iii)
Except as set forth in Schedule 2.16:
(i) The
Company has timely filed or, if not yet due but due before Closing, will timely
file all Tax Returns required to be filed by it for all taxable periods ending
on or before the date of Closing and all such Tax Returns are or, if not yet
filed, will be, upon filing, true, correct and complete in all material
respects;
(ii) the
Company has paid, or if payment is not yet due but due before Closing, will
promptly pay when due to each appropriate Tax Authority, all Taxes of the
Company shown as due on the Tax Returns required to be filed by it for all
taxable periods ending on or before the date of Closing;
(iii) the
accruals for Taxes currently payable as well as for deferred Taxes shown on the
financial statements of the Company as of the date of the Annual Statements, the
Interim Statements or the date of any financial statements delivered hereunder:
(A) adequately provide for all contingent Tax Liabilities of the Company as
of the date thereof; and (B) accurately reflect, as of the date thereof,
all unpaid Taxes of the Company whether or not disputed, in each case as
required to be reflected thereon in order for such statements to be in
accordance with GAAP;
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(iv) no
extension of time has been requested or granted for the Company to file any Tax
Return that has not yet been filed or to pay any Tax that has not yet been paid
and the Company has not granted a power of attorney that remains outstanding
with regard to any Tax matter;
(v) the
Company has not received notice of a determination by a Tax Authority that Taxes
are currently owed by the Company (such determination to be referred to as a
"Tax
Deficiency") and, to the Company's knowledge, no Tax Deficiency is
proposed or threatened;
(vi) all
Tax Deficiencies have been paid or finally settled and all amounts determined by
settlement to be owed have been paid;
(vii) there
are no Tax Liens on or pending against the Company or any of the Assets, other
than those which constitute Permitted Liens;
(viii)
there are no presently outstanding waivers or extensions or requests for a
waiver or extension of the time within which a Tax Deficiency may be asserted or
assessed;
(ix) no
issue has been raised in any examination, investigation, Company Required
Consents, suit, action, claim or proceeding relating to Taxes (a "Tax Company Required
Consents") which, by application of similar principles to any past,
present or future period, would result in a Tax Deficiency for such
period;
(x) there
are no pending or threatened Tax audits of the Company;
(xi) the
Company has no deferred intercompany gains or losses that have not been fully
taken into income for income Tax purposes;
(xii) there
are no transfer or other taxes (other than income taxes) imposed by any state on
the Company by virtue of the Contemplated Transactions; and
(xiii) no
claim has been made by any Tax Authority that the Company is subject to Tax in a
jurisdiction in which the Company is not then paying Tax of the type
asserted.
Each
reference to a provision of the Code in this Section 2.16 shall be treated
for state and local Tax purposes as a reference to analogous or similar
provisions of state and local law.
(b) To
the Company’s knowledge, the Company has collected and remitted to the
appropriate Tax Authority all sales and use or similar Taxes required to be
collected on or prior to the date of Closing and has been furnished properly
completed exemption certificates for all exempt transactions and has no
information otherwise or notice of any claim by any government or jurisdiction
with regards thereto. The Company has maintained and has in its
possession all records, supporting documents and exemption certificates required
by applicable sales and use Tax statutes and regulations to be retained in
connection with the collection and remittance of sales and use Taxes for all
periods up to and including the date of Closing. With respect to
sales made by the Company prior to the date of Closing for which sales and use
Taxes are not yet due as of the date of Closing, all applicable sales and use
Taxes payable with respect to such sales will have been collected or billed by
the Company and will be included in the Assets of the Company as of the date of
Closing.
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SECTION
2.17 Compliance
with Laws. The Company is not in violation of any order,
judgment, injunction, award, citation, decree, consent decree or writ
(collectively, "Orders") and to the
best of the Company’s knowledge, belief and information, any Laws of
any Governmental Bodies affecting the Company, the Company Shares or the
Business.
SECTION
2.18 Permits. The
Company has obtained all licenses, permits, certificates, certificates of
occupancy, orders, authorizations and approvals (collectively, "Permits"), and has
made all required registrations and filings with all Governmental Bodies, that
are necessary to the ownership of the Assets, the use and occupancy of the
Leased Real Property, as presently used and operated, and the conduct of the
Business or otherwise required to be obtained by the Company. All
Permits required to be obtained or maintained by the Company are listed on Schedule 2.18
and are in full force and effect; no violations are or have been recorded, nor
have any notices or violations thereof been received, in respect of any Permit;
and no proceeding is pending or threatened to revoke or limit any Permit; and
the consummation of the Contemplated Transactions will not (or with the giving
of notice or the passage of time or both will not) cause any Permit to be
revoked or limited.
SECTION
2.19 Environmental
Matters. To the best of the Company’s knowledge, belief and
information, the Company is, and at all times has been, in full compliance with,
and has not been and is not in violation of or liable under, any Environmental
Law.
SECTION
2.20 Finders
Fees. Except as set forth on Schedule 2.20, there
is no investment banker, broker, finder or other intermediary which has been
retained by or is authorized to act on behalf of the Company who might be
entitled to any fee or commission from the Company in connection with the
consummation of the Contemplated Transactions.
SECTION
2.21 Disclosure. Neither
this Agreement, the Schedules hereto, nor any reviewed or unaudited financial
statements, documents or certificates furnished or to be furnished to Buyer or
Parent by or on behalf of the Company or Seller pursuant to this Agreement
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary in order to make the statements
contained herein or therein not misleading. Except for general
current economic conditions effecting the entire economy or the Company’s entire
industry and not specific to the Business, there are no events, transactions or
other facts known by the Company, which, either individually or in the
aggregate, may give rise to circumstances or conditions which would have a
material adverse effect on the general affairs or Condition of the
Business.
11
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
AND PARENT
Buyer and
Parent jointly and severally represent, warrant and covenant to the Company as
follows and acknowledge that the Company and Seller are relying upon such
representations and warranties in connection with the Contemplated
Transactions:
SECTION
3.1 Authority
Relative to this Agreement. Buyer and Parent have full power
and authority to execute and deliver each Transaction Document to which they are
or, at Closing, will be, a party and to consummate the Contemplated
Transactions. Following the approval of the boards of directors of
Parent and Buyer and the shareholders of the Buyer with respect to the
Contemplated Transactions, the execution, delivery and performance by Buyer and
Parent of each Transaction Document and the consummation of the Contemplated
Transactions to which they are or, at Closing, will be, a party have been duly
and validly authorized and approved by Buyer and Parent and no other acts by or
on behalf of Buyer or Parent are necessary or required to authorize the
execution, delivery and performance by Buyer and Parent of each Transaction
Document and the consummation of the Contemplated Transactions to which they are
or, at Closing, will be a party. This Agreement and the other
Transaction Documents to which Buyer and Parent are a party have been, duly and
validly executed and delivered by Buyer and Parent and (assuming the valid
execution and delivery thereof by the other parties thereto) constitutes, or
will, at the Closing, constitute, as the case may be, the legal, valid and
binding agreements of Buyer and Parent enforceable against each of them in
accordance with their respective terms, except as such obligations and their
enforceability may be limited by applicable bankruptcy and other similar Laws
affecting the enforcement of creditors' rights generally and except that the
availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefor may be brought (whether at law or in
equity).
SECTION
3.2 No
Conflicts; Consents. The execution, delivery and performance
by Buyer and Parent of each Transaction Document to which they are a party and
the consummation of the Contemplated Transactions to which Buyer and Parent are
a party does not and will not: (i) violate any provision of the certificate
of incorporation or by-laws of Buyer or Parent, as the case may be;
(ii) require Buyer or Parent to obtain any consent, approval or action of
or waiver from, or make any filing with, or give any notice to, any Governmental
Body or any other person, except as set forth on Schedule 3.2
(the "Buyer Required
Consents"); (iii) except as set forth in Schedule 3.2,
violate, conflict with or result in the breach or default under (with or without
the giving of notice or the passage of time), or permit the suspension or
termination of, any material Contract to which Buyer or Parent are a party or
any of them or any of their assets is bound or subject or result in the creation
or any Lien upon any of Parent Merger Stock or upon any assets of Buyer or
Parent; or (iv) violate any Order or, to Buyer’s knowledge, any Law of any
Governmental Body against, or binding upon, Buyer or Parent, or upon any of
their respective assets or businesses.
12
SECTION
3.3 Corporate
Existence and Power of Buyer. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Georgia, and has all requisite corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted. Other than the execution of this
Agreement, Buyer has not conducted any business of any nature.
SECTION
3.4 Corporate
Existence and Power of Parent. Parent is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada, and
has all requisite corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.
SECTION
3.5 The Parent
Merger
Stock. At the closing, the Parent Merger Stock will have been
duly authorized by Parent and, when issued to Shareholders pursuant to this
Agreement, will be duly issued, fully paid and non-assessable shares of Parent
Merger Stock. The Parent Merger Stock, when issued pursuant hereto:
(i) will not be issued in violation of or subject to any preemptive rights,
rights of first refusal or, other than as set forth in this Agreement,
contractual restrictions of any kind; and (ii) will vest in Shareholders,
respectively, good title to Parent Merger Stock free and clear of all
Liens.
SECTION
3.6 Capitalization. The
authorized capital stock of Parent consists of: (i) 250,000,000 shares of common
stock, $0.0001 par value; and (ii) 10,000,000 shares of preferred stock, $0.0001
par value. Parent has: (i) 5,000,001 shares of common stock; and (ii) no shares
of preferred stock; issued and outstanding and at the Closing. Except as set
forth on Schedule
3.6, Parent will not have outstanding any capital stock or other
securities or any rights, warrants or options to acquire securities of Parent or
any convertible or exchangeable securities and, other than Buyer pursuant to
this Agreement, no person has or at Closing will have, any right to purchase or
otherwise acquire any securities of Parent. There are, and at Closing
there will be, no outstanding obligations of Parent to repurchase, redeem or
otherwise acquire any securities of Parent. All of Parent Merger
Stock is, and at Closing will be, duly authorized, duly and validly issued,
fully paid and non-assessable, and none were issued in violation of any
preemptive rights, rights of first refusal or any other contractual or legal
restrictions of any kind.
SECTION
3.7 Disclosure
of Information. Parent has been given the opportunity: (i) to
ask questions of, and to receive answers from, persons acting on behalf of the
Company concerning the terms and conditions of the Contemplated Transactions and
the business, properties, prospects and financial conditions of the Company; and
(ii) to obtain any additional information (to the extent the Company or any of
the Shareholders possesses such information or is able to acquire it without
unreasonable effort or expense and without breach of confidentiality
obligations) necessary to verify the accuracy of information provided about the
Company.
SECTION
3.8 SEC
Filings. Parent has filed with the SEC all forms, reports,
schedules, and statements that were required to be filed by it with the SEC
within the period beginning on the date of inception of Parent and ending on the
Effective Time, and previously has furnished or made available to the Company
accurate and complete copies of all the SEC Documents. As of their
respective dates, the SEC Documents were prepared in accordance with the
Exchange Act of 1934, as amended, (the “Exchange Act”) and the Securities Act
and did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated in those documents or necessary to make the
statements in those documents not misleading, in light of the circumstances
under which they were made. As of their respective dates, these
reports and statements will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated in them or necessary to
make the statements in them not misleading, in light of the circumstances under
which they are made and these reports and statements will comply in all material
respects with all applicable requirements of the Exchange Act and the Securities
Act.
13
SECTION
3.9 Financial
Statements. The audited financial statements of Parent that are included
or incorporated in the SEC Documents were prepared in accordance with GAAP
applied on a consistent basis during the periods involved (except as otherwise
indicated in the notes to them) and fairly present the financial position,
results of operations, and cash flows from operating, investing, and financing
activities of Parent as of the dates and for the periods
indicated. The financial statements of Parent that are included or
incorporated in any subsequent report or statement that Parent mails to its
shareholders generally or files with the SEC during the period after the date of
this Agreement and before the Closing Date will be prepared in accordance with
GAAP applied on a consistent basis during the periods involved (except as
otherwise indicated in them, the notes to them, or any related report of
Parent’s independent accountants) and will fairly present the financial
information that they purport to present, except that the unaudited,
consolidated interim financial statements will be subject to normal year-end
adjustments and will omit or condense certain footnotes and other information
normally included in financial statements prepared in accordance with
GAAP.
SECTION
3.10 Charter
Documents and Corporate Records. Each of Parent and Buyer has heretofore
delivered to the Company true and complete copies of the certificate of
incorporation, by-laws and minute books, or comparable instruments, of Parent
and Buyer as in effect on the date hereof. The stock transfer books
of Parent and Buyer have been made available to the Company for its inspection
and are true and complete in all respects.
SECTION
3.11 Liabilities.
Except as set forth on Schedule 3.11, Parent
has not incurred any Liabilities since December 31, 2008 except those incurred
in the ordinary course of business which have been discharged.
SECTION
3.12 Absence of
Certain Changes. Since January 1, 2009, Parent has conducted
its business in the ordinary course consistent with past practice and except as
disclosed on Schedule
3.12 hereto there has not been:
(a) Any
change in any method of accounting or accounting practice by
Parent;
(b) Any
increase in the compensation, commission, bonus or other direct or indirect
remuneration paid, payable or to become payable to any officer, stockholder,
director, consultant, agent or employee of Parent, or any alteration in the
benefits payable or provided to any thereof;
14
(c) Any
material adverse change in the relationship of Parent with its employees,
customers, suppliers or vendors;
(d) Except
for any changes made in the ordinary course of business, any material change in
any of Parent's business policies, including advertising, marketing, selling,
pricing, purchasing, personnel, returns or budget policies;
(e) Any
agreement or arrangement whether written or oral to do any of the foregoing;
and
(f) Parent
has no Liability that is past due.
SECTION
3.13 Contracts.
(a) Schedule 3.13
sets forth an accurate and complete list of all Contracts to which Parent is a
party or by which it or its assets are bound or subject that: (i) cannot be
canceled upon 30 days' notice without the payment or penalty of less than One
Thousand Dollars ($1,000); or (ii) involve aggregate annual future payments by
or to any person of more than Five Thousand Dollars ($5,000). True and complete
copies of all written Contracts (including all amendments thereto and waivers in
respect thereof) and summaries of the material provisions of all oral Contracts
so listed have been made available to the Company.
(b) All
Contracts to which Parent is a party are valid, subsisting, in full force and
effect and binding upon Parent and the other parties thereto, in accordance with
their terms, except that no representation or warranty is given as to the
enforceability of any oral Contracts. To the best of Parent’s
knowledge and belief, Parent is not in default (or alleged default) under any
such Contract.
SECTION
3.14 Claims and
Proceedings. There are no outstanding Orders of any Governmental Body
against or involving Parent, its assets or its business. There are no Claims
(whether or not the defense thereof or Liabilities in respect thereof are
covered by insurance), pending or, to the best of Parent's knowledge, threatened
on the date hereof, against or involving Parent, its assets or its
business.
SECTION
3.15 Taxes. Each
reference to a provision of the Code in this Section 3.15 shall be treated for
state and local Tax purposes as a reference to analogous or similar provisions
of state and local law.
(a) Parent
has filed or, if not yet due but due before Closing, will timely file all Tax
Returns required to be filed by it for all taxable periods ending on or before
the date of Closing and all such Tax Returns are or, if not yet filed, will be,
upon filing, true, correct and complete in all material respects;
15
(b) Parent
has paid, or if payment is not yet due but due before Closing, will promptly pay
when due to each appropriate Tax Authority, all Taxes of Parent shown as due on
the Tax Returns required to be filed by it for all taxable periods ending on or
before the date of Closing;
(c) The
accruals for Taxes currently payable as well as for deferred Taxes shown on the
financial statements of Parent as of the date of the Interim Statements or the
date of any financial statements delivered hereunder: (A) adequately
provide for all contingent Tax Liabilities of Parent as of the date thereof; and
(B) accurately reflect, as of the date thereof, all unpaid Taxes of Parent
whether or not disputed, in each case as required to be reflected thereon in
order for such statements to be in accordance with GAAP;
(d) No
extension of time has been requested or granted for Parent to file any Tax
Return that has not yet been filed or to pay any Tax that has not yet been paid
and Parent has not granted a power of attorney that remains outstanding with
regard to any Tax matter;
(e) Parent
has not received notice of a Tax Deficiency and, to Parent's knowledge, no Tax
Deficiency is proposed or threatened;
(f) All
Tax Deficiencies have been paid or finally settled and all amounts determined by
settlement to be owed have been paid;
(g) There
are no Tax Liens on or pending against Parent or any of the assets, other than
those which constitute Permitted Liens;
(h) There
are no presently outstanding waivers or extensions or requests for a waiver or
extension of the time within which a Tax Deficiency may be asserted or
assessed;
(i) No
issue has been raised in any examination, investigation, suit, action, claim or
proceeding relating to Taxes which, by application of similar principles to any
past, present or future period, would result in a Tax Deficiency for such
period;
(j) There
are no pending or threatened Tax audits of Parent;
(k) Parent
has no deferred intercompany gains or losses that have not been fully taken into
income for income Tax purposes;
(l) There
are no transfer or other taxes (other than income taxes) imposed by any state on
Parent by virtue of the Contemplated Transactions; and
16
(m) No
claim has been made by any Tax Authority that Parent is subject to Tax in a
jurisdiction in which Parent is not then paying Tax of the type
asserted.
(n) To
Parent’s knowledge, Parent has collected and remitted to the appropriate Tax
Authority all sales and use or similar Taxes required to be collected on or
prior to the date of Closing and has been furnished properly completed exemption
certificates for all exempt transactions and has no information otherwise or
notice of any claim by any government or jurisdiction with regards
thereto. Parent has maintained and has in its possession all records,
supporting documents and exemption certificates required by applicable sales and
use Tax statutes and regulations to be retained in connection with the
collection and remittance of sales and use Taxes for all periods up to and
including the date of Closing. With respect to sales made by Parent
prior to the date of Closing for which sales and use Taxes are not yet due as of
the date of Closing, all applicable sales and use Taxes payable with respect to
such sales will have been collected or billed by Parent and will be included in
the assets of Parent as of the date of Closing.
SECTION
3.16 Compliance
with Laws. Neither Parent nor Company is in violation of any
Orders or any Laws related to or promulgated under the Securities Act or the
Exchange Act (15 USC § 78a et
seq.) and to the best of Parent’s knowledge, belief and information, any
Laws of any Governmental Bodies affecting Parent or the Parent Merger
Stock.
SECTION
3.17 Environmental
Matters. To the best of Parent’s knowledge, belief and
information, Parent is, and at all times has been, in full compliance with, and
has not been and is not in violation of or liable under, any Environmental
Law.
SECTION
3.18 Finders
Fees. Other than as set forth in Schedule 3.18, there
is no investment banker, broker, finder or other intermediary which has been
retained by or is authorized to act on behalf of Parent who might be entitled to
any fee or commission from Parent in connection with the consummation of the
Contemplated Transactions.
SECTION
3.19 Initial
Financing. Neither Parent nor Buyer nor any Affiliate or agent
of Parent or Buyer has disclosed or will disclose any information regarding the
Company or has made or will make any representation regarding the Company to any
potential investor in the Initial Financing (as such term is defined in Section 5.1(c)
herein) except for written information or representations provided by Company or
Seller to Parent and specifically authorized in writing by Company or Seller for
disclosure to a potential investor in the Initial Financing.
ARTICLE IV
COVENANTS AND
AGREEMENTS
The
Company and Seller, jointly and severally, covenant to Buyer and Parent, and
Buyer and Parent, jointly and severally, covenant to the Company and Seller
that:
17
SECTION
4.1 Filings and
Authorizations. The parties hereto shall cooperate and use
their respective best efforts to make, or cause to be made, all registrations,
filings, applications and submissions, to give all notices and to obtain all
governmental or other third party consents, transfers, approvals, Orders and
waivers necessary or desirable for the consummation of the Contemplated
Transactions in accordance with the terms of this Agreement including without
limitation the preparation of any SEC Documents required to be filed with the
SEC in connection with the transactions contemplated by this Agreement; and
shall furnish copies thereof to each other party prior to such filing and shall
not make any such registration, filing, application or submission to which Buyer
or the Company, as the case may be, reasonably objects in
writing. All such filings shall comply in form and content in all
material respects with applicable Law. The parties hereto also agree
to furnish each other with copies of such filings and any correspondence
received from any Governmental Body in connection therewith.
SECTION
4.2 Confidentiality. Each
Party (the “Receiving
Party”) shall, and shall cause its respective Affiliates and
Representatives to (each such Affiliate or Representative of either the Company,
Parent, Seller or Buyer, as the case may be, a “Receiving Party
Representative”) to, maintain in confidence all information received from
the other Party or a Company (the “Disclosing Party”)
(other than disclosure to that Person’s Representatives in connection with the
evaluation and consummation of the Transactions), and such Disclosing Party’s
Affiliates or Representatives (as the case may be, a “Disclosing Party
Representative”) in connection with this Agreement or the transactions
contemplated by the Transaction Documents (including the existence and terms of
this Agreement and the such transactions) and use such information solely to
evaluate such transactions, unless i) such information can be shown to be
already known to the Receiving Party or a Receiving Party Representative before
the time of disclosure to such Person, ii) such information can be shown to be
subsequently disclosed to the Receiving Party or a Receiving Party
Representative by a third party that, to the knowledge of the Receiving Party or
such Receiving Party Representative, is not bound by a duty of confidentiality
to the Disclosing Party or any Disclosing Party Representative, iii) such
information is or becomes publicly available through no breach of this Agreement
by, or other fault of, the Receiving Party or any Receiving Party Representative
or iv) the Receiving Party or Receiving Party Representative in good faith
believes that the furnishing or use of such information is required by, or
necessary in connection with, any proceeding, Law or any listing or trading
agreement concerning its publicly traded securities (in which case the Receiving
Party or such Receiving Party Representative shall, as promptly as practicable,
advise the Disclosing Party in writing before making the disclosure and
cooperate with the Disclosing Party to limit the scope of such
disclosure).
SECTION
4.3 Expenses. Buyer,
Parent, the Company and Seller shall bear their respective expenses, in each
case, incurred in connection with the preparation, execution and performance of
the Transaction Documents and the Contemplated Transactions, including, without
limitation, all fees and expenses of their respective Representatives, and the
Company shall bear all the fees and expenses of any Company's
Representatives.
SECTION
4.4 Tax
Matters. The Company and Buyer shall reasonably cooperate, and shall
cause their respective Representatives reasonably to cooperate, in preparing and
filing all Tax Returns, including maintaining and making available to each other
all records necessary in connection with the preparation and filing of Tax
Returns, the payment of Taxes and the resolution of Tax audits and Tax
Deficiencies with respect to all taxable periods. Refunds or credits
of Taxes that were paid by the Company with respect to any periods shall be for
the account of the Company.
18
SECTION
4.5 Further
Assurances. At any time and from time to time after the date
of Closing, upon the reasonable request of any party hereto, the other
party(ies), shall do, execute, acknowledge and deliver, or cause to be done,
executed, acknowledged or delivered, all such further documents, instruments or
assurances, as may be necessary, desirable or proper to carry out the intent and
accomplish the purposes of this Agreement.
SECTION
4.6 Restricted
Securities. The parties acknowledge and agree that the Company
Shares and Parent Merger Stock being issued or transferred pursuant to the
Contemplated Transactions are being issued or transferred pursuant to the
exemption from the registration requirements of the Securities Act and
constitute "restricted securities" within the meaning of the Securities
Act. Such securities may not be transferred absent compliance with
the provisions of the Securities Act, other applicable Laws, and all stock
certificates evidencing such securities shall bear a legend to such effect and
to the effect that such shares are subject to the terms and provisions of this
Agreement; provided, however, that it is anticipated that for purposes of Rule
144 of the Securities Act, that the holding period of Parent Merger Stock for
each shareholder of the Company shall be determined to commence on the date of
acquisition of the Company Shares (as converted pursuant to this Agreement) for
each such respective holder.
SECTION
4.7 Due
Diligence. Prior to the Closing Date, Parent and Buyer agree
that the Company shall be entitled, through its Representatives, to make
such investigation of the properties, businesses and operations of Parent and
Buyer, and such examination of the books, records and financial condition of
Parent and Buyer, as the Company reasonably deems necessary. Any such
investigation and examination shall be conducted at reasonable times, under
reasonable circumstances and upon reasonable notice. No investigation
by Buyer shall diminish or obviate any of the representations, warranties,
covenants or agreements of Parent or Buyer contained in this
Agreement.
SECTION
4.8 Registration
Statement. Within thirty (30) days following the Closing,
Parent will undertake to begin the preparation and ultimate filing of a “shelf”
registration statement with the SEC in order to register shares of its common
stock pursuant to the Securities Act: (i) as may be necessary to raise an
additional Three Million Dollars (US$3,000,000); and (ii) which were issued
pursuant to the Initial Financing as hereinafter defined. Parent, the
Company, Seller and Buyer shall use its best efforts to cause such registration
statement to become effective with the SEC.
SECTION
4.9 Reverse Stock
Split Restriction. Each of Parties agrees that the Parent
shall not effect a “reverse split" of its common stock for a period of two years
from the date of Closing.
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ARTICLE V
CONDITIONS TO
CLOSING
SECTION
5.1 Conditions
to the Obligations of the Parties. The obligations of the
Parties to consummate the Contemplated Transactions are subject to the
satisfaction of the following conditions:
(a) No
Injunction. No provision of any applicable Law and no Order
shall prohibit the consummation of the Contemplated Transactions.
(b) No Proceedings or
Litigation. No Claim instituted by any person (other than
Buyer, the Company, Shareholders or their respective Affiliates) shall have been
commenced or pending against any Shareholder, the Company, Buyer or any of their
respective Affiliates, officers or directors, which Claim seeks to restrain,
prevent, change or delay in any respect the Contemplated Transactions or seeks
to challenge any of the terms or provisions of this Agreement or seeks damages
in connection with any of such transactions.
(c) Initial
Financing. The Parent shall have received fully executed
subscription agreements with respect to a common stock offering pursuant to Rule
506 of the Securities Act in the aggregate amount of at least Two Million Five
Hundred Thousand Dollars (US$2,500,000)(the “Proceeds”) at $0.25
per share of common stock of the Parent (the “Initial
Financing”). The Proceeds (less expenses incurred in the
Initial Financing) shall be in an escrow account pending release to the Parent
upon the Closing. All such subscription agreements shall be with
Accredited Investors only (as such term is defined under the Securities
Act).
SECTION
5.2 Conditions
to the Obligations of the Company and Seller . The obligations
of the Company and Seller hereunder to consummate the Contemplated Transactions
are subject, at the option of the Company, to the fulfillment prior to or at the
Closing of each of the following further conditions:
(a) Performance. Buyer
and Parent shall have performed and complied in all material respects with all
agreements, obligations and covenants required by this Agreement to be performed
or complied with by it at or prior to the Closing Date.
(b) Representations and
Warranties. The representations and warranties of Buyer and
Parent contained in this Agreement and in any certificate or other writing
delivered by Buyer and Parent pursuant hereto shall be true in all material
respects at and as of the Closing Date as if made at and as of such time (except
for those representations and warranties made as of a specific date which shall
be true in all material respects as of the date made).
(c) No Material Adverse
Change. From the date hereof through the Closing, there shall
not have occurred any event or condition that has had or could have a material
adverse effect on Parent.
20
(d) Documentation. There
shall have been delivered to the Company the following:
(i) A
certificate, dated the Closing Date, of the Chairman of the Board and the
President of Buyer and Parent confirming the matters set forth in
Section 5.2(a) (b) and (c) hereof;
(ii) Parent
Merger Stock certificates, registered in the name of each Shareholder as set
forth on Schedule
1 attached hereto, (with the appropriate restrictive legends as
applicable), evidencing satisfaction of the Merger Purchase Price in accordance
with Section 1.8; and
(iii) Georgia
Certificate of Merger.
SECTION
5.3 Conditions
to the Obligations of Buyer and Parent. All obligations of
Buyer and/or Parent to consummate the Contemplated Transactions hereunder are
subject, at the option of Buyer and/or Parent, to the fulfillment prior to or at
the Closing of each of the following further conditions:
(a) Performance. Each
of the Company and Seller shall have performed and complied in all material
respects with all agreements, obligations and covenants required by this
Agreement to be performed or complied with by them at or prior to the Closing
Date.
(b) Representations and
Warranties. The representations and warranties of the Company
and Seller, contained in this Agreement and in any certificate or other writing
delivered by the Company and Seller pursuant hereto shall be true in all
material respects at and as of the Closing Date as if made at and as of such
time (except for those representations and warranties made as of a specific date
which shall be true in all material respects as of the date made).
(c) No Material Adverse
Change. From the date hereof through the Closing, there shall
not have occurred any event or condition that has had or could have a material
adverse effect on the Company.
(d) Documentation. There
shall have been delivered to Parent and Buyer the following:
(i) A
certificate, dated the Closing Date, of the Chairman of the Board, the President
or Chief Financial Officer of the Company confirming the matters set forth in
Section 5.3(a) (b) and (c) hereof;
(ii) A
certificate, dated the Closing Date, of the Secretary of the Company certifying,
among other things, that attached or appended to such certificate: (i) is a
true and correct copy of the Company's certificate of incorporation and all
amendments thereto, if any, as of the date thereof certified by the Secretary of
State of the State of Georgia; and (ii) is a true and correct copy of the
Company's memorandum of association as of the date thereof;
21
(iii) Georgia
Certificate of Merger;
(iv) Company
Share certificates representing the number of Company Shares duly endorsed in
blank or accompanied by stock powers duly endorsed in blank and in suitable form
for transfer to Buyer by delivery;
(v) Fully
executed copies of restrictive covenant agreements for each of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, in a form reasonably acceptable to Buyer and the
Company.
ARTICLE VI
INDEMNIFICATION
SECTION
6.1 Survival of
Representations, Warranties and Covenants. Notwithstanding any
right of Buyer and Parent fully to investigate the affairs of the Company and
the rights of the Company and Seller to fully investigate the affairs of Buyer
and Parent, and notwithstanding any knowledge of facts determined or
determinable by Buyer, Parent, the Company or Seller, pursuant to such
investigation or right of investigation, Buyer, Parent, the Company and Seller,
have the right to rely fully upon the representations, warranties, covenants and
agreements of the Company and Seller, and Buyer and Parent respectively,
contained in this Agreement, or listed or disclosed on any Schedule hereto or in
any instrument delivered in connection with or pursuant to any of the
foregoing. All such representations, warranties, covenants and
agreements shall survive the execution and delivery of this Agreement and the
Closing hereunder. Notwithstanding the foregoing, all representations
and warranties of the Company and Seller, and, Buyer and Parent respectively,
contained in this Agreement, on any Schedule hereto or in any instrument
delivered in connection with or pursuant to this Agreement shall terminate and
expire twenty-four (24) months after the date of Closing; provided, however,
that liability any party shall not terminate as to any specific claim or claims
which arise or result from or are related to a Claim for fraud.
SECTION
6.2 Obligation
of the Company to Indemnify. The Company and Seller agrees to
indemnify, defend and hold harmless Buyer and Parent (and their respective
directors, officers, employees, Affiliates, successors and assigns) from
and against all Claims, losses, Liabilities, Regulatory Actions, damages,
deficiencies, judgments, settlements, costs of investigation or other expenses
(including Taxes, interest, penalties and reasonable attorneys' fees and fees of
other experts and disbursements and expenses incurred in enforcing this
indemnification) (collectively, the "Losses") suffered
or incurred by Buyer and/or Parent, the Company, or any of the foregoing persons
arising out of any breach of the representations and warranties of the Company
or Seller contained in this Agreement, or of the covenants and agreements of the
Company or Seller contained in this Agreement or in the Schedules or any other
Transaction Document.
22
SECTION
6.3 Obligation
of Buyer and Parent to Indemnify. Buyer and Parent jointly and
severally agree to indemnify, defend and hold harmless the Company and each
Shareholder (and their respective directors, officers, employees, Affiliates,
successors, heirs and assigns) from and against any Losses suffered or
incurred by the Company or any Shareholder or any of the foregoing persons
arising out of any breach of the representations and warranties of Buyer or
Parent, or of the covenants and agreements of Buyer or Parent contained in this
Agreement or in the Schedules or any other Transaction Document.
SECTION
6.4 Notice and
Opportunity to Defend Third Party Claims.
(a) Within
ten (10) days following receipt by any party hereto (the "Indemnitee") of
notice of any demand, claim, circumstance or Tax audit which would or might give
rise to a claim, or the commencement (or threatened commencement) of any action,
proceeding or investigation that may result in a Loss (an "Asserted Liability"),
the Indemnitee shall give notice thereof (the "Claims Notice") to
the party or parties obligated to provide indemnification pursuant to Sections
6.2, or 6.3 (collectively, the "Indemnifying
Party"). The Claims Notice shall describe the Asserted
Liability in reasonable detail and shall indicate the amount (estimated, if
necessary, and to the extent feasible) of the Loss that has been or may be
suffered by the Indemnitee.
(b) The
Indemnifying Party may elect to defend, at its own expense and with its own
counsel, any Asserted Liability unless: (i) the Asserted Liability includes
a Claim seeking an Order for injunction or other equitable or declaratory relief
against the Indemnitee, in which case the Indemnitee may at its own cost and
expense and at its option defend the portion of the Asserted Liability seeking
equitable or declaratory relief against the Indemnitee, or (ii) the
Indemnitee shall have reasonably, and in good faith, after consultation with the
Indemnifying Party, concluded that: (x) there is a conflict of interest
between the Indemnitee and the Indemnifying Party which could prevent or
negatively influence the Indemnifying Party from impartially or adequately
conducting such defense; or (y) the Indemnitee shall have one or more
defenses not available to the Indemnifying Party but only to the extent such
defense cannot legally be asserted by the Indemnifying Party on behalf of the
Indemnitee. If the Indemnifying Party elects to defend such Asserted
Liability, it shall within ten (10) days (or sooner, if the nature of the
Asserted Liability so requires) notify the Indemnitee of its intent to do
so, and the Indemnitee shall cooperate, at the expense of the Indemnifying
Party, in the defense of such Asserted Liability. If the Indemnifying
Party elects not to defend the Asserted Liability, is not permitted to defend
the Asserted Liability by reason of the first sentence of this
Section 6.4(b), fails to notify the Indemnitee of its election as herein
provided or contests its obligation to indemnify under this Agreement with
respect to such Asserted Liability, the Indemnitee may pay, compromise or defend
such Asserted Liability at the sole cost and expense of the Indemnifying
Party. Notwithstanding the foregoing, neither the Indemnifying Party
nor the Indemnitee may settle or compromise any claim over the reasonable
written objection of the other, provided that the Indemnitee may settle or
compromise any claim as to which the Indemnifying Party has failed to notify the
Indemnitee of its election under this Section 6.4(b) or as to which
the Indemnifying Party is contesting its indemnification obligations
hereunder. If the Indemnifying Party desires to accept a reasonable,
final and complete settlement of an Asserted Liability so that such Indemnitee’s
Loss is paid in full and the Indemnitee refuses to consent to such settlement,
then the Indemnifying Party’s liability to the Indemnitee shall be limited to
the amount offered in the settlement. The Indemnifying Party will
exercise good faith in accepting any reasonable, final and complete settlement
of an Asserted Liability. In the event the Indemnifying Party elects
to defend any Asserted Liability, the Indemnitee may participate, at its own
expense, in the defense of such Asserted Liability. In the event the
Indemnifying Party is not permitted by the Indemnitee to defend the Asserted
Liability, it may nevertheless participate at its own expense in the defense of
such Asserted Liability. If the Indemnifying Party chooses to defend
any Asserted Liability, the Indemnitee shall make available to the Indemnifying
Party any books, records or other documents within its control that are
necessary or appropriate for such defense. Any Losses of any
Indemnitee for which an Indemnifying Party is liable for indemnification
hereunder shall be paid upon written demand therefor.
23
SECTION
6.5 Limits on
Indemnification.
(a) Notwithstanding
the foregoing or the limitations set forth in Section 6.5(b) below, in the event
such Losses arise out of any fraud related matter on the part of any
Indemnifying Party, then such Indemnifying Party shall be obligated to indemnify
the Indemnitee in respect of all such Losses.
(b) The
Company and Seller shall not be liable to indemnify Buyer and
Parent pursuant to Section 6.2 above and Buyer and Parent shall
not be liable to indemnify the Company and Shareholders pursuant to
Section 6.3 above: (i) unless a Claims Notice describing the loss is
delivered to the Indemnifying Party within 24 months after the Closing (except
for Losses arising out of an Indemnifying Party’s fraud); (ii) with respect to
special, consequential or punitive damages; and (iii) in respect of any
individual Loss of less than $25,000. Notwithstanding anything
contained herein to the contrary, Seller shall only be liable to indemnify Buyer
and Parent for Losses arising out of Seller’s fraud.
SECTION
6.6 Exclusive
Remedy. The parties agree that the indemnification provisions
of this Article VI shall constitute the sole or exclusive remedy of any party in
seeking damages or other monetary relief with respect to this Agreement and the
Contemplated Transactions, provided that, nothing herein shall be construed to
limit the right of any party to seek: (i) injunctive relief for a breach of
this Agreement; (ii) legal or equitable relief for a Claim for fraud; or
(iii) indemnity under the bylaws of Parent if they are or have been a director
or officer of Parent or Buyer.
24
ARTICLE VII
SPECIFIC PERFORMANCE;
TERMINATION
SECTION
7.1 Specific
Performance. The Company, Seller, Parent, and Buyer
acknowledges and agrees that, if any of the Company, Parent, or Buyer fails to
proceed with the Closing in any circumstance other than those described in
clauses (a), (b), (c) or (d) of Section 7.2 below, the
others will not have adequate remedies at law with respect to such
breach. In such event, and in addition to each party's right to
terminate this Agreement, each party shall be entitled, without the necessity or
obligation of posting a bond or other security, to seek injunctive relief, by
commencing a suit in equity to obtain specific performance of the obligations
under this Agreement or to ▇▇▇ for damages, in each case, without first
terminating this Agreement. The Company, Parent or Buyer specifically affirms
the appropriateness of such injunctive, other equitable relief or damages in any
such action.
SECTION
7.2 Termination. This
Agreement may be terminated and the Contemplated Transactions may be abandoned
at any time prior to the Closing:
(a) By
mutual written consent of the Company and Buyer;
(b) By
the Company or Seller if: (i) there has been a misrepresentation or breach
of warranty on the part of Buyer or Parent in the representations and warranties
contained herein and such misrepresentation or breach of warranty, if curable,
is not cured within thirty days after written notice thereof from the Company or
Seller, respectively; (ii) Buyer or Parent has committed a breach of any
covenant imposed upon it hereunder and fails to cure such breach within thirty
days after written notice thereof from the Company or Seller, respectively; or
(iii) any condition to the Company's or Seller’s obligations under
Section 5.2 becomes incapable of fulfillment through no fault of the
Company or Seller, respectively, and is not waived by Buyer;
(c) By
Parent or Buyer, if: (i) there has been a misrepresentation or breach of
warranty on the part of the Company or Seller in the representations and
warranties contained herein and such misrepresentation or breach of warranty, if
curable, is not cured within thirty days after written notice thereof from
Parent or Buyer, respectively; (ii) the Company or the Seller has committed a
breach of any covenant imposed upon it hereunder and fails to cure such breach
within thirty days after written notice thereof from Parent or Buyer,
respectively; or (iii) any condition to Parent’s or Buyer's obligations
under Section 5.3 becomes incapable of fulfillment through no fault of
Parent or Buyer and is not waived by the Company and Seller; and
(d) By
the Company, Seller, Parent or Buyer, if any condition under Section 5.1
becomes incapable of fulfillment through no fault of the party seeking
termination and is not waived by the party seeking termination.
25
SECTION
7.3 Effect of
Termination; Right to Proceed. Subject to the provisions of
Section 7.1 hereof, in the event that this Agreement shall be terminated
pursuant to Section 7.2, all further obligations of the parties under this
Agreement shall terminate without further liability of any party hereunder
except that: (i) the agreements contained in Section 4.2 shall survive the
termination hereof; and (ii) termination shall not preclude any party from
seeking relief against any other party for breach of Section 4.2. In
the event that a condition precedent to its obligation is not met, nothing
contained herein shall be deemed to require any party to terminate this
Agreement, rather than to waive such condition precedent and proceed with the
Contemplated Transactions.
ARTICLE VIII
MISCELLANEOUS
SECTION
8.1 Representations
and Warranties for Purposes of this Agreement Only. The
representations and warranties in this Agreement were made for the purposes of
allocated contractual risk between the parties and not as a means of
establishing facts. This Agreement may have different standards of
materiality than standards of materiality under applicable securities
laws. Only parties to this Agreement and specified third-party
beneficiaries (if any) have a right to enforce this Agreement
SECTION
8.2 Notices. v)
Any notice or other communication required or permitted hereunder shall be
in writing and shall be delivered personally by hand or by recognized overnight
courier, or mailed (by registered or certified mail, postage prepaid return
receipt requested) as follows:
If to
Buyer or Parent, one copy to:
Remark
Enterprises, Inc.
▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
President
With a
copy to:
▇▇▇▇▇
& ▇▇▇▇▇▇▇ LLC
▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
26
If to the
Company, one copy to:
OneUp
Innovations, Inc.
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chief
Executive Officer, President
With a
copy to:
▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Liss LLC
▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention: H.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇, Esq.
(b) Each
such notice or other communication shall be effective when delivered at the
address specified in Section 8.1(a). Any party by notice given
in accordance with this Section 8.1 to the other parties may designate
another address or person for receipt of notices hereunder. Notices
by a party may be given by counsel to such party.
SECTION
8.3 Entire
Agreement. This Agreement (including the Schedules and
Exhibits hereto) and the collateral agreements executed in connection with
the consummation of the Contemplated Transactions contain the entire agreement
among the parties with respect to the subject matter hereof and related
transactions and supersede all prior agreements, written or oral, with respect
thereto.
SECTION
8.4 Waivers and
Amendments; Non-Contractual Remedies; Preservation of
Remedies. This Agreement may be amended, superseded,
cancelled, renewed or extended only by a written instrument signed by the
Company, Parent and Buyer. The provisions hereof may be waived in
writing by the Company Parent or Buyer, as the case may be. Any such
waiver shall be effective only to the extent specifically set forth in such
writing. No failure or delay on the part of any party in exercising
any right, power or privilege hereunder shall operate as a waiver
thereof. Nor shall any waiver on the part of any party of any such
right, power or privilege, nor any single or partial exercise of any such right,
power or privilege, preclude any other or further exercise thereof or the
exercise of any other such right, power or privilege. Except as
otherwise provided herein, the rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies that any party may
otherwise have at law or in equity.
SECTION
8.5 Governing
Law. This Agreement shall be governed and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely within such State without regard to the conflict of
laws rules thereof.
SECTION
8.6 Binding
Effect; No Assignment. This Agreement and all of its
provisions, rights and obligations shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors, heirs and legal
representatives. This Agreement may not be assigned (including by
operation of Law) by any party hereto without the express written consent of
Buyer (in the case of assignment by the Company) or the Company (in the case of
assignment by Buyer or Parent) and any purported assignment, unless so consented
to, shall be void and without effect.
27
SECTION
8.7 Exhibits. All
Exhibits and Schedules attached hereto are hereby incorporated by reference
into, and made a part of, this Agreement.
SECTION
8.8 Severability. If
any provision of this Agreement for any reason shall be held to be illegal,
invalid or unenforceable, such illegality shall not affect any other provision
of this Agreement, this Agreement shall be amended so as to enforce the illegal,
invalid or unenforceable provision to the maximum extent permitted by applicable
law, and the parties shall cooperate in good faith to further modify this
Agreement so as to preserve to the maximum extent possible the intended benefits
to be received by the parties.
SECTION
8.9 Counterparts. The
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original as against any party whose signature appears thereon,
and all of which shall together constitute one and the same
instrument. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the signatures
of all of the parties reflected hereon as the signatories.
SECTION
8.10 Third
Parties. Except as specifically set forth or referred to
herein, nothing herein express or implied is intended or shall be construed to
confer upon or give to any person other than the parties hereto and their
permitted heirs, successors, assigns and legal representatives, any rights or
remedies under or by reason of this Agreement or the Contemplated
Transactions.
ARTICLE IX
DEFINITIONS
SECTION
9.1 Definitions. The
following terms, as used herein, have the following meanings:
"Affiliate" of any
person means any other person directly or indirectly through one or more
intermediary persons, controlling, controlled by or under common control with
such person.
"Agreement" or "this Agreement" shall
mean, and the words "herein", "hereof" and "hereunder" and words
of similar import shall refer to, this agreement as it from time to time may be
amended.
"Assets" shall mean
all cash, instruments, properties, rights, interests and assets of every kind,
real, personal or mixed, tangible and intangible, used or usable in the
Business.
The term
"audit" or
"audited" when
used in regard to financial statements shall mean an examination of the
financial statements by a firm of independent certified public accountants in
accordance with generally accepted auditing standards for the purpose of
expressing an opinion thereon.
28
"Business" shall mean
the ownership and operation of the business of the Company.
"Condition of the
Business" shall mean the financial condition, prospects or the results of
operations of the Business, the Assets or the Company.
"Contract" shall mean
any contract, agreement, indenture, note, bond, lease, conditional sale
contract, mortgage, license, franchise, instrument, commitment or other binding
arrangement, whether written or oral.
The term
"control", with
respect to any person, shall mean the power to direct the management and
policies of such person, directly or indirectly, by or through stock ownership,
agency or otherwise, or pursuant to or in connection with an agreement,
arrangement or understanding (written or oral) with one or more other
persons by or through stock ownership, agency or otherwise; and the terms "controlling" and
"controlled"
shall have meanings correlative to the foregoing.
"GAAP" shall mean
generally accepted accounting principles in effect on the date
hereof (or, in the case of any opinion rendered in connection with an
audit, as of the date of the opinion) as set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
may be approved by a significant segment of the accounting profession of the
United States.
"Governmental Bodies"
shall mean any government, municipality or political subdivision thereof,
whether federal, state, local or foreign, or any governmental or
quasi-governmental agency, authority, board, bureau, commission, department,
instrumentality or public body, or any court, arbitrator, administrative
tribunal or public utility.
"knowledge" with
respect to: (a) any individual shall mean actual knowledge of such
individual; and (b) any corporation shall mean the actual knowledge of the
directors and executive officers of such corporation; and "knows" and “known” has a
correlative meaning. The terms "any Shareholder's knowledge," and
"Shareholder's knowledge," including any correlative meanings, shall mean the
knowledge of any Shareholder.
"Laws" shall mean any
law, statute, code, ordinance, rule, regulation or other requirement of any
Governmental Bodies.
"Liability" shall mean
any direct or indirect indebtedness, liability, assessment, claim, loss, damage,
deficiency, obligation or responsibility, fixed or unfixed, ▇▇▇▇▇▇ or inchoate,
liquidated or unliquidated, secured or unsecured, accrued, absolute, actual or
potential, contingent or otherwise (including any liability under any
guaranties, letters of credit, performance credits or with respect to insurance
loss accruals).
29
"Lien" shall mean any
mortgage, lien (including mechanics, warehousemen, laborers and landlords
liens), claim, pledge, charge, security interest, preemptive right, right of
first refusal, option, judgment, title defect, covenant, restriction, easement
or encumbrance of any kind.
"person" shall mean an
individual, corporation, partnership, joint venture, limited liability company,
association, trust, unincorporated organization or other entity, including a
government or political subdivision or an agency or instrumentality
thereof.
"Receivables" shall
mean as of any date any trade accounts receivable, notes receivable, sales
representative advances and other miscellaneous receivables of the
Company.
“Representative”
means, with respect to a particular Person, any director, officer, employee,
agent, consultant, advisor or other representative of such Person, including
legal counsel, accountants and financial advisors.
"SEC" means the United
States Securities and Exchange Commission.
"SEC Documents" means
all forms, notices, reports, schedules, statements, and other documents filed by
Parent with the SEC, whether or not constituting a "filed" document, and
includes all proxy statements, registration statements, amendments to
registration statements, periodic reports on Forms 10-KSB, 10-QSB, and 8-K, and
annual and quarterly reports to shareholders.
"Tax" (including, with
correlative meaning, the terms "Taxes" and "Taxable") shall
mean: (i)(A) any net income, gross income, gross receipts, sales, use, ad
valorem, transfer, transfer gains, franchise, profits, license, withholding,
payroll, employment, excise, severance, stamp, rent, recording, occupation,
premium, real or personal property, intangibles, environmental or windfall
profits tax, alternative or add-on minimum tax, customs duty or other tax, fee,
duty, levy, impost, assessment or charge of any kind whatsoever (including but
not limited to taxes assessed to real property and water and sewer rents
relating thereto), together with; (B) any interest and any penalty,
addition to tax or additional amount imposed by any Governmental Body (domestic
or foreign) (a "Tax
Authority") responsible for the imposition of any such tax and
interest on such penalties, additions to tax, fines or additional amounts, in
each case, with respect to any party hereto, the Business or the Assets (or the
transfer thereof); (ii) any liability for the payment of any amount of the
type described in the immediately preceding clause (i) as a result of a
party hereto being a member of an affiliated or combined group with any other
person at any time on or prior to the date of Closing; and (iii) any
liability of a party hereto for the payment of any amounts of the type described
in the immediately preceding clause (i) as a result of a contractual
obligation to indemnify any other person.
"Tax Return" shall
mean any return or report (including elections, declarations, disclosures,
schedules, estimates and information returns) required to be supplied to
any Tax Authority.
"Transaction
Documents" shall mean, collectively, this Agreement, and each of the
other agreements and instruments to be executed and delivered by all or some of
the parties hereto in connection with the consummation of the transactions
contemplated hereby.
30
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REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
31
IN WITNESS WHEREOF, the
undersigned have executed this Stock Purchase and Recapitalization Agreement as
of the date set forth above.
BUYER:
ONE UP
ACQUISITION, INC.
By:
/s/ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
President
PARENT:
REMARK
ENTERPRISES, INC.
By:
/s/ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
President
THE
COMPANY:
ONE UP
INNOVATIONS, INC.
By:
/s/ ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chief Executive Officer,
President
SELLER:
/s/
▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇
32
