EX-10.1
STOCK PURCHASE AGREEMENT
SALE OF MILITARY RESALE GROUP, INC.
SELLERS:
The Shareholders of Military Resale Group, Inc.
Named Herein
PURCHASER:
Bactrol Technologies, Inc.
DATED as of October 10, 2001
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (the "Agreement"), executed and dated on
October 10, 2001, by and between THE SHAREHOLDERS OF MILITARY RESALE GROUP,
INC., a Maryland corporation ("MRG"), WHO EXECUTE A SELLER SIGNATURE PAGE TO
THIS AGREEMENT IN THE FORM OF EXHIBIT A ATTACHED HERETO (individually, a
"Seller" and collectively, the "Sellers"), BACTROL TECHNOLOGIES, INC., a New
York corporation or assigns ("Purchaser"), and ▇▇▇ ▇▇▇▇▇▇▇▇, an individual and
officer of Purchaser ("Gallucio"), for the purposes of Articles V and VI only,
and MRG, for the purposes of Articles III and IV only.
W I T N E S S E T H :
WHEREAS, the Sellers own One Hundred Percent (100%) of the total number
of shares of common stock of MRG issued and outstanding (the "MRG Stock"); and
WHEREAS, Purchaser is a non-operating public corporation shell, without
substantial current assets; and
WHEREAS, the Sellers wish to sell the MRG Stock to Purchaser, and
Purchaser wishes to purchase such MRG Stock from the Sellers, upon the terms and
conditions herein set forth, and the parties deem it advisable that this sale
and purchase should occur; and
NOW, THEREFORE, in consideration of the premises, mutual covenants,
terms, conditions, representations and warranties set forth herein, the parties,
intending to be legally bound, hereby agree as follows:
ARTICLE I
TRANSFER OF STOCK
SECTION 1.1 TRANSFER OF STOCK. On the terms and subject to the
conditions contained in this Agreement, including Purchaser's agreement to pay
the Purchase Price for the MRG Stock, at the closing under this Agreement
("Closing"), the Sellers shall sell, convey, assign, transfer, contribute and
deliver to Purchaser, and Purchaser shall purchase, receive, accept and acquire
from the Sellers, the MRG Stock.
SECTION 1.2 PURCHASE PRICE. As consideration for the purchase of the
MRG Stock, Purchaser shall issue to the Sellers one share of common stock,
$0.0001 par value, of Purchaser ("Purchaser Stock") for each share of MRG Stock
delivered to Purchaser in accordance with Section 1.3 hereof (the "Purchase
Price").
SECTION 1.3 PAYMENT OF PURCHASE PRICE. At the Closing (defined in
Section 2.1 below), the Sellers shall deliver each share of the MRG Stock
(properly endorsed) to the Settlement Attorney
(as defined in Section 2.1 below), and in exchange therefor the Purchaser shall
issue to the Sellers one share of Purchaser Stock for each share of the MRG
Stock delivered to Settlement Attorney.
ARTICLE II
CLOSING
SECTION 2.1 CLOSING DATE. The Closing shall be held at the offices of
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇ ("Settlement Attorney"), at 10:00 a.m. local time, on October 24, 2001
(the "Closing Date"), or such later date which is not later than 2 business days
after the Purchaser obtains shareholder approval to file the Restated
Certificate of Incorporation of Purchaser in the form proposed by Purchaser's
board of directors.
SECTION 2.2 DELIVERIES BY PURCHASER.
2.2.1 TRANSFER PRICE. At Closing, Purchaser shall deliver
to Settlement Attorney stock certificates for Purchaser Stock properly endorsed
for transfer and assignment to the Sellers, in accordance with Section 1.3.
above.
SECTION 2.3 DELIVERIES BY THE SELLERS.
2.3.1 STOCK CERTIFICATES; POSSESSION AND CONTROL OF PURCHASER.
At Closing, the Sellers shall deliver to Purchaser stock certificates for the
MRG Stock properly endorsed for transfer and assignment to Purchaser, and
simultaneously with such delivery, Sellers shall take such steps as are
necessary to put Purchaser in actual possession and operating control of MRG,
including but not limited to providing Purchaser with all original books and
records of MRG.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF MRG
To induce Purchaser to acquire the MRG Stock and to tender the Purchase
Price and other consideration to the Sellers pursuant to this Agreement, MRG
hereby represents and warrants to Purchaser, as of the date hereof and as of the
Closing Date, as follows:
SECTION 3.1 ORGANIZATION AND GOOD STANDING. MRG is a corporation, duly
organized, validly existing and in good standing under the laws of the State of
Maryland. MRG has no subsidiary or affiliated companies. MRG has the power to
carry on its business as and where conducted and is entitled to own, lease or
operate its business assets. MRG does not own any property or assets or carry on
any business in any jurisdiction such as to require it to qualify as a foreign
corporation in such jurisdiction except those states, if any, in which MRG has
so registered. MRG has delivered to Purchaser complete and correct copies of its
Articles of Incorporation, as amended, and Bylaws, as amended, and in effect on
the date of this Agreement. As of the Closing Date the entire issued and
outstanding capital stock of MRG shall consist of the shares of common stock
referred to in Schedule 3.1 held by the Sellers, and MRG shall not, as of such
date, have any
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outstanding stock options, warrants, or other obligations to issue its capital
stock, except as listed on Schedule 3.1.
SECTION 3.2 AUTHORIZATION OF AGREEMENT. This Agreement and all other
agreements and instruments to be executed by MRG in connection herewith have
been authorized by all requisite corporate action on the part of MRG, have been
duly executed and delivered by MRG and constitute the legal, valid and binding
obligation of MRG enforceable in accordance with their respective terms, except
as the enforceability thereof may be limited by bankruptcy or other laws
relating to or affecting creditors' rights generally or by equitable principles.
SECTION 3.3 OWNERSHIP OF SHARES. The capitalization of MRG is set forth
on Schedule 3.1. The shareholders listed on Schedule 3.1 are the lawful owners
of all issued and outstanding shares of capital stock of MRG in the
denominations therein set forth. Each issued share is validly issued, fully
paid, nonassessable and each outstanding share is entitled to one vote. No
shares were issued in violation of pre-emptive rights. Such shares are owned
free and clear of all liens, mortgages, pledges, security interests,
restrictions, prior assignments, spouses' rights, encumbrances and claims of any
kind or nature whatsoever, except as set forth on Schedule 3.1. As of the
Closing Date, MRG shall not have any outstanding stock options, warrants, or
other obligations to issue its capital stock, except as listed Schedule 3.1.
SECTION 3.4 FINANCIAL STATEMENTS. MRG has delivered to Purchaser the
following audited financial statements for the years ending December 31, 1999
and December 31, 2000:
(a) Balance Sheet
(b) Statement of Operations
(c) Statement of Shareholders' Equity
All such financial reports are true and complete as of their respective dates,
and have been prepared in accordance with generally accepted accounting
principles and practices consistently applied, except as otherwise indicated in
the footnotes thereto. Such reports sets forth fairly and accurately as of its
date MRG's financial condition, results in operations and assets and liabilities
for the period then ended. Except as set forth on Schedule 3.4, on the date
hereof and as of the Closing Date, there is and will have been no material
adverse change in the condition of MRG since December 31, 2000.
SECTION 3.5 LITIGATION. Except as listed on Schedule 3.5, there is no
claim, action, investigation, suit or proceeding of any nature pending before
any court or governmental agency, authority or body and, to the best of the
knowledge of MRG, there is no such claim, action, investigation, suit or
proceeding threatened or contemplated by any third party which, if it were to
result in a decision adverse to MRG, would materially and adversely affect the
business operations, properties, assets or conditions of MRG. Neither MRG nor
its business and assets are subject to or directly affected by any order,
judgment, decree or ruling of any court or governmental agency, except any of
the foregoing as they may be of general application to businesses similar to
that conducted by MRG.
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SECTION 3.6 NO CONFLICT WITH OTHER INSTRUMENTS. As of the Closing Date,
the consummation of the transactions contemplated by this Agreement will not
result in the breach of any term or provision of or constitute a default under
any indenture, mortgage, deed of trust, or other material agreement or
instrument to which MRG is a party.
SECTION 3.7 INSURANCE. MRG maintains in full force and effect valid
policies of fire and extended coverage casualty insurance with respect to its
assets, as well as valid policies of public liability and unemployment
compensation with respect to its business.
SECTION 3.8 LICENSES AND PERMITS; GOVERNMENTAL AUTHORIZATIONS. MRG has
all licenses, franchises, permits, approvals and other governmental
authorizations necessary for the conduct of its business operations.
SECTION 3.9 SUBSIDIARIES; INTERESTS IN OTHER COMPANIES. MRG does not
own, directly or indirectly, voting stock or other interests in any corporation,
partnership, joint venture, business trust or other business entity.
SECTION 3.10 ABSENCE OF UNDISCLOSED LIABILITIES. To the best of MRG's
knowledge, except as set forth on Schedule 3.10 or otherwise disclosed herein or
in the Schedules hereto (including under the contracts listed on Schedule 1.1
hereof), (a) MRG has no liabilities of any nature, whether accrued, absolute,
contingent or otherwise arising out of transactions entered into, or any state
of facts existing prior hereto, (b) neither MRG nor the Sellers know of any
basis for the assertion against MRG, as of Closing hereunder, of any liability
of any nature or in any amount not herein disclosed in writing to Purchaser and
(c) the books and records of MRG provided by MRG to Purchaser are true, correct
and accurate records of the operations of MRG, it being understood by the
parties hereto that any conclusions drawn from same shall be Purchaser's sole
responsibility and that neither MRG nor the Sellers shall have no liability with
regard to such conclusions.
SECTION 3.11 TAXES/GOOD STANDING. MRG has filed or will file all
federal, state, local, foreign and other tax returns and reports required to be
filed by it prior to the date of Closing hereof, and, to the best of Sellers'
knowledge, such returns are true and correct. MRG has paid all taxes shown to be
due and payable on such returns and reports and any additional assessments
relating thereto, which have been made prior to the date hereof. MRG has no
federal, state, local or foreign income tax or other liabilities outstanding for
any year with respect to which a tax return was due (taking into account all
extensions of time to file said returns) prior to the date of Closing hereof,
and has no reason to anticipate any material adjustment in its taxable income
for any year.
SECTION 3.12 COMPLIANCE WITH LAW, ETC. MRG is in material compliance
with its Articles of Incorporation and By-Laws and, is not in breach of any
material provision of any contract or agreement with any third party. MRG, to
best of its knowledge, has complied in all material respects, and is in
compliance in all material respects with all statutes, laws, ordinances,
regulations and other requirements applicable to it. The execution and delivery
of this Agreement and the consummation of the transactions contemplated herein
will not conflict with, or result in any breach
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or violation of or constitute a default under MRG's Articles of Incorporation or
By-Laws, or, to the best of MRG's knowledge, any agreement or, instrument to
which it is a party or by which it is bound, or to the best of MRG's and
Seller's knowledge, violate or conflict with, any statute, law, ordinance,
regulation or other requirement applicable to MRG.
SECTION 3.13 PENSION PLANS, EMPLOYEES, ETC. There are no pension,
profit sharing, bonus, deferred compensation, retirement, stock option or stock
purchase plans covering any of MRG's employees, and there are no current
employees of MRG which Purchaser shall be required to employ or otherwise be
responsible for in any way.
SECTION 3.14 INFORMATION. To the best knowledge, information and belief
of MRG, the representations, warranties and statements contained in this
Agreement or attached hereto as a Schedule with respect to MRG and the
transactions contemplated herein contain no untrue statement of a material fact
and do not omit to state a material fact necessary in order to make the
statements contained herein not misleading. MRG does not know of any fact not
known to the general public that will result in a material change in the
business, operations, properties or assets of MRG, that has not been set forth
in this Agreement or in the written information provided by MRG or the Sellers
to Purchaser in connection with this Agreement.
ARTICLE IIIA
REPRESENTATIONS AND WARRANTIES OF SELLERS
The Sellers, severally but not jointly, hereby represent and warrant to
Purchaser, as of the date hereof and as of the Closing Date, as follows:
SECTION 3.1A TITLE TO MRG STOCK. The MRG Stock is owned of record and
beneficially by such Seller, and Seller holds good, valid and marketable title
to its MRG Stocks. Such Seller possesses full authority and legal right to sell,
transfer and assign the entire legal and beneficial ownership of its MRG Stock,
free and clear of all liens, encumbrances, pledges, charges, claims,
restrictions, or other interests of any nature of any person or entity.
SECTION 3.2A INVESTOR REPRESENTATIONS. Seller is acquiring the
Purchaser Stock for investment in his own account and not with the view to the
distribution or resale thereof. Seller has carefully and independently evaluated
the merits of the transactions contemplated by this Agreement and is entering
into this Agreement based upon such Seller's own independent assessment of the
merits of the transactions contemplated by this Agreement, with and upon advice
of independent counsel.
SECTION 3.3A AUTHORIZATION OF AGREEMENT. Seller has all requisite
power, authority and capacity to enter into this Agreement and to perform his or
her obligations hereunder. This Agreement constitutes a valid and legally
binding obligation of such Seller enforceable in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy or other laws
relating to or affecting creditors' rights generally or by equitable principles.
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ARTICLE IV
ADDITIONAL COVENANTS AND AGREEMENTS OF MRG
MRG hereby covenants and agrees to the following, the fulfillment of
each of which shall constitute, at and as of the Closing Date, a condition
precedent to the obligations of Purchaser hereunder:
SECTION 4.1 EXISTENCE, RIGHTS AND FRANCHISES. From and after the date of
this Agreement and until the Closing Date, MRG shall comply with all applicable
laws and regulations, take all necessary actions to keep in full force and
effect its existence, rights and franchises, and shall not amend its articles of
incorporation or bylaws except as may be necessary to carry out the provisions
of this Agreement.
SECTION 4.2 CONDUCT OF BUSINESS BEFORE THE CLOSING. From and after
the date of this Agreement and until the Closing Date:
(a) DILIGENT CONDUCT. Except as consented to by Purchaser, MRG
shall conduct its business diligently in the ordinary course. MRG shall use its
best efforts to preserve its business organization intact, to keep available to
Purchaser the services of MRG's present officers and to preserve for the benefit
of Purchaser the goodwill of MRG's suppliers, customers and others having
business relations with MRG.
(b) PROPERTIES AND ASSETS. MRG shall not, without the prior
written consent of Purchaser, sell or transfer any of its assets, other than in
the ordinary course of business or subject any of its assets to any mortgage,
pledge, lien, charge or encumbrance of any kind.
(c) CONTRACTS; LIABILITIES. MRG shall not, without the prior
written consent of Purchaser: (i) amend, alter or terminate any contract to
which it is a part except in the ordinary course of business, (ii) enter into or
become a party to any plan, contract or agreement except in the ordinary course
of business; (iii) borrow or agree to borrow any funds, or otherwise become
subject to, by way of guarantee or otherwise, any obligations or liability
except in the ordinary course of business and consistent with past practice; or
(iv) pay or discharge any claim, liability or obligation, except in the ordinary
course of business and consistent with past practice.
(d) INSURANCE. MRG shall continue in force its existing
insurance policies as set forth on Schedule 4.2(d), subject only to variations
in coverage amounts required by the ordinary operation of its business.
(e) DISTRIBUTIONS. Except as set forth on Schedule 4.2(e)
hereto, MRG shall not make any distributions with respect to or in redemption or
partial redemption of any of its shares of capital stock, or any payment of any
indebtedness to shareholders or any bonus or other increases
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in compensation to
employees, including without limitation employees who are shareholders, except
compensation in the ordinary course of business.
SECTION 4.3 ACCESS AND INFORMATION. MRG will afford to Purchaser and
its counsel, accountants and other representatives reasonable access to the
books, records and assets of MRG and shall furnish to Purchaser and its counsel,
accountants and other representatives all information which Purchaser may
reasonably request.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser and Gallucio, jointly and severally represent and warrant
to the Sellers as follows:
SECTION 5.1 ORGANIZATION AND GOOD STANDING; CAPITAL. Purchaser is a
corporation duly organized and validly existing and in good standing under the
laws of the State of New York. Purchaser has no subsidiary or affiliated
companies. Purchaser has the power to carry on its business as and where
conducted, and is entitled to own, lease or operate its business assets.
Purchaser has delivered to MRG complete and correct copies of the articles of
incorporation, as amended, and bylaws of Purchaser as in effect on the date of
this Agreement. As of the Closing Date, the entire issued and outstanding
capital stock of Purchaser shall consist of the shares of common stock referred
to in Schedule 5.1 held by the shareholders of Purchaser, and Purchaser shall
not, as of such date, have any outstanding stock options, warrants or other
obligations to issue its capital stock except as listed on Schedule 5.1.
SECTION 5.2 AUTHORIZATION OF AGREEMENT. This Agreement and all other
agreements and instruments to be executed in connection herewith have been duly
authorized by all requisite corporate and shareholder action on the part of
Purchaser, have been duly executed and delivered by Purchaser and constitute the
legal, valid and binding obligations of Purchaser, enforceable in accordance
with their respective terms, except as the enforceability thereof may be limited
by bankruptcy or other laws relating to or affecting creditors' rights generally
or by equitable principles.
SECTION 5.3 ISSUANCE OF PURCHASER STOCK. Purchaser has full power and
authority to issue the Purchaser Stock to the Sellers under this Agreement. When
issued, the Purchaser Stock will be fully paid, nonassessable, each share
entitled to one (1) vote, free and clear of all liens, mortgages, pledges,
security interests, restrictions, prior assignments, encumbrances and claims of
any kind or nature whatsoever.
SECTION 5.4 SEC DOCUMENTS; ABSENCE OF CERTAIN CHANGES. Purchaser has
made available to MRG a true and complete copy of each report, schedule,
registration statement and definitive proxy statement filed by Purchaser with
the Securities Exchange Commission ("SEC") since January 10, 2001 (as such
documents have since the time of their filing been amended, the
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"SEC Documents") which are all the documents (other than preliminary material)
that Purchaser was required to file with the SEC since such date. As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Securities Act of 1933 or the Securities Exchange Act of
1934, as the case may be, and the rules and regulations of the SEC thereunder
applicable to such SEC Documents and none of the SEC Documents contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. The financial
statements of Purchaser included in the SEC Documents (the "Financial
Statements") comply as to form in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto, have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
(except as may be indicated in the note thereto or, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC) and fairly present (subject,
in the case of unaudited statements, to normal recurring audit adjustments) the
consolidated financial position of Purchaser as at the dates thereof and the
consolidated results of the operations and cash flows for the periods then
ended. Except as disclosed in the SEC Document filed prior to the date of this
Agreement or on Schedule 5.4 attached hereto, the Purchaser has conducted its
business only in the ordinary and usual course, and, as of the date of this
Agreement and the Closing, there has not been any transaction, commitment,
dispute or other event or condition (financial or otherwise) of any character
individually or in the aggregate having (or which, insofar as reasonably can be
foreseen in the future, is reasonably likely to have) a material adverse effect
on Purchaser.
SECTION 5.5 LITIGATION. Except as set forth on Schedule 5.5, as of the
Closing Date there are no claims, actions, investigations, suits or proceedings
pending before any court or governmental agency, authority or body and, to the
best of the knowledge of Purchaser, there are no such actions, suits or
proceedings threatened or contemplated by any third party which would materially
and adversely affect the business operations, properties, assets or conditions
of Purchaser. Neither Purchaser nor its business and assets are subject to or
directly affected by any order, judgment, decree or ruling of any court or
governmental agency, except any of the foregoing as they may be of general
application to businesses similar to that conducted by Purchaser.
SECTION 5.6 NO CONFLICT WITH OTHER INSTRUMENTS. As of the Closing Date,
the consummation of the transactions contemplated by this Agreement will not
result in the breach of any term or provision of or constitute a default under
any indenture, mortgage, deed of trust, or other material agreement or
instrument to which Purchaser is a party.
SECTION 5.7 EMPLOYEE RELATIONS. Except as set forth in Schedule 5.7,
Purchaser has no written employment agreements, collective bargaining
agreements, retirement, welfare, pension, profit sharing, compensation, bonus,
hospitalization, vacation or other employee benefit plan, practice, agreement or
undertaking, and no oral employment contracts obligating Purchaser beyond the
minimum requirements imposed on an employer under applicable state or federal
law. Except as set forth on Schedule 5.7, Purchaser has not ceased operation at
any facility or withdrawn from
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or terminated any pension plan or other employee benefit plan in a manner which
could subject it to liability under the Employee Retirement Income Security Act
of 1974, as amended ("ERISA").
SECTION 5.8 LIABILITIES AND CONTRACTUAL COMMITMENTS. Except as
reflected on the financial statements listed in Section 5.4 or in any other
schedule or exhibit to, or provisions of this Agreement, Purchaser has no
undisclosed or contingent liabilities or contractual commitments, whether
accrued, absolute, contingent or otherwise, to any third party or any
shareholder, director or employee of Purchaser, other than those set forth on
Schedule 5.8.
SECTION 5.9 TAX PAYMENTS. Purchaser has timely filed all federal, state
and local tax returns required to be filed as of the date of this Agreement and
shall timely file all of such returns as of the Closing Date, and has fully paid
or shall pay all taxes, penalties and interest reflect on such returns or
otherwise owing for the period covered thereby, except as set forth in Schedule
5.9. At the Closing Date there shall be no federal, state or local taxes due and
payable with respect to the business and assets of Purchaser with respect to any
tax reporting period ending on or before the Closing Date. Adequate accruals
shall have been established on the books of Purchaser prior to the Closing Date
for all federal, state and local taxes (including taxes, if any, incurred by
Purchaser in connection with the transactions contemplated in this Plan and
Agreement of Merger) accrued prior to the Closing Date but unpaid. No extension
of time for the assessment of taxes by any taxing authority having jurisdiction
over Purchaser is in effect, and Purchaser has no knowledge of any unassessed
tax deficiency proposed or threatened against it.
SECTION 5.10 INSURANCE; CLAIMS. Purchaser has maintained and now
maintains in full force and effect valid policies of fire and extended coverage
casualty insurance with respect to its assets, as well as valid policies of
public liability and unemployment compensation insurance with respect to its
business, in the amounts as is usually carried by companies engaged in similar
businesses and owning or operating similar properties, all such policies being
set forth on Schedule 5.10. All claims filed by Purchaser under any such
policies, including without limitation workers' compensation, automobile, and
general and product liability claims, are set forth on Schedule 5.10.
SECTION 5.11 EQUIPMENT LEASES; TITLE TO PROPERTIES. Purchaser has and
on the Closing Date will have leases for all personal property of which it is
the lessee. All such personal property leases are listed on Schedule 5.11.
Furthermore, Purchaser has and on the Closing Date will have to the best of its
knowledge good and marketable title to all of the equipment, merchandise,
inventory, materials, supplies, assets and other property of every kind,
tangible or intangible, used in its business and/or contained in its offices,
plants and other facilities or shown as assets in its records and books of
account, free and clear of all material liens, encumbrances and charges except
as set forth on Schedule 5.11.
SECTION 5.12 REAL PROPERTY; LEASES AND CONTINGENT OBLIGATIONS. As of
the Closing Date, Purchaser does not own (and, except as set forth on Schedule
5.12, never has owned) any land or buildings, and is not subject to any liens,
claims or encumbrances with regard to any land or buildings. Purchaser has no
leases under which it is entitled to occupy and use in its business. All
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real property leases and contracts to which Purchaser is a party or by which it
is bound are set forth on Schedule 5.12.
SECTION 5.13 LICENSES AND PERMITS; GOVERNMENT APPROVALS. To the extent
required by the laws, rules and regulations of any applicable jurisdiction with
which it is required to comply in connection with its business operations,
Purchaser has or will have as of the Closing Date all governmental licenses,
permits, approvals and permissions, necessary to conduct such business
operations as they are now conducted or will be conducted under this Agreement.
All such licenses, permits, approvals and permissions are listed on Schedule
5.13. Purchaser has no knowledge of any violations of law, governmental rules or
regulations, applicable to the operation or Purchaser business, and has not
received any notice that the licenses, permits and approvals under which it
operates its business are insufficient to permit such business to continue after
the Closing Date in the same manner and form as it operates on the Closing Date.
SECTION 5.14 HAZARDOUS SUBSTANCES AND HAZARDOUS WASTES. Except as
set forth on Schedule 5.14:
(a) HAZARDOUS MATERIALS DISPOSAL OR RELEASE. Purchaser does
not have knowledge of any presence, disposal, releases, or threatened releases
of any hazardous or toxic substance, material or waste which is regulated by any
local, state or federal governmental authority (collectively, "Hazardous
Materials") on, from or under any of the leased properties of Purchaser in
violation of any applicable law. The terms "disposal", "release" and "threatened
release" shall have the definitions assigned to them by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.,
Section 9601, et seq., as amended.
(b) HAZARDOUS MATERIALS USE OR STORAGE. During the time that
Purchaser has leased its properties, to the best of Purchaser's knowledge,
neither Purchaser nor any third party has used, generated, manufactured, or
stored on, under, or about, the properties or transported to or from such
properties, any Hazardous Materials in violation of any applicable law or
regulation.
SECTION 5.15 BROKERAGE AND FINDER'S FEES. There is no broker,
investment banker or finder involved on behalf of or by Purchaser or any of its
officers or directors, in connection with the transaction contemplated under
this Agreement. To the extent of any such claims contrary to this
representation, Purchaser shall be responsible for same.
SECTION 5.16 INFORMATION. To the best knowledge, information and belief
of Purchaser and Gallucio, the representations, warranties and statements
contained in this Agreement or attached hereto as a Schedule with respect to
Purchaser and the transactions contemplated herein contain no untrue statement
of a material fact and do not omit to state a material fact necessary in order
to make the statements contained herein not misleading. Purchaser and Gallucio
do not know of any fact not known to the general public that will result in a
material change in the business, operations, properties or assets of Purchaser,
that has not been set forth in this Agreement or in the written information
provided by Purchaser to MRG or the Sellers in connection with this Agreement.
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ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The Closing shall not take place unless all of the following conditions
not waived by Purchaser have been fulfilled before, or will be fulfilled on, the
Closing Date.
SECTION 6.1 CORRECTNESS OF REPRESENTATIONS AND WARRANTIES. All the
representations and warranties of MRG and the Sellers contained in this
Agreement shall be true and accurate in all material respects on the Closing
Date with the same material effect as if made on the Closing Date.
SECTION 6.2 PERFORMANCE OF COVENANTS AND AGREEMENTS. All of the
covenants and agreements of MRG and the Sellers contained in this Agreement and
required to be performed before the Closing Date shall have been performed in
all material respects.
SECTION 6.3 APPROVALS.
THIRD PARTIES; REGULATORY BODIES. All notices to, declarations
of filing with and authorizations, consents, orders, registrations, or approvals
("Approvals") from, third parties and governmental agencies (copies of which
shall be provided to the other parties) required to complete the transactions
contemplated or planned pursuant to this Agreement or necessary to maintain in
full force and effect all agreements under which MRG operates or is bound shall
have been delivered, made or obtained.
SECTION 6.4 DELIVERY OF DOCUMENTS BY MRG. Purchaser shall have received
on or prior to the Closing Date copies of all stock books, minute books, tax
returns, financial records, and all material agreements, records and documents
pertaining to the business and organization of MRG.
SECTION 6.5 ADVERSE CHANGES. No material adverse changes shall have
occurred in the financial condition, working capital, assets, liabilities,
reserves, business, sales, customer list, operations, or prospects or MRG since
the date of the financial statements contained in Schedule 3.4.
SECTION 6.6 NO GOVERNMENTAL PROCEEDING OR LITIGATION. No suit, action,
investigation, inquiry or other proceeding by any governmental body has been
instituted or threatened which questions the validity or legality of the
transactions planned under this Agreement or which, if successfully asserted,
would otherwise have a material adverse effect on the conduct of MRG's business
assets or on its properties, or would impose any material imitation on the
ability of Purchaser effectively to exercise full rights of ownership of MRG or
the assets or business of MRG.
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ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLERS
The Closing shall not take place unless all of the following conditions
not waived by the Sellers have been fulfilled before, or will be fulfilled on,
the Closing Date:
SECTION 7.1 CORRECTIVENESS OF REPRESENTATIONS AND WARRANTIES. All the
representations and warranties of Purchaser and Gallucio contained in this
Agreement shall be true and accurate in all material respects on the Closing
Date with the same material effect as if made on the Closing Date, and MRG shall
have received a certificate to that effect dated the Closing Date and executed
by the President of Purchaser and Gallucio.
SECTION 7.2 PERFORMANCE OF COVENANTS AND AGREEMENTS. All of the
covenants and agreements of Purchaser contained in this Agreement and required
to be performed before the Closing Date shall have been performed in all
material respects, and the Sellers shall have received a certificate to that
effect dated the Closing Date executed by the President of Purchaser.
SECTION 7.3 RESOLUTIONS OF PURCHASER. All action required to be taken
by the Board of Directors of Purchaser to authorize the execution, delivery and
performance of this Agreement and the completion of the transactions planned
under this Agreement have been duly and validly taken by the Board of Directors
and shareholders of Purchaser.
SECTION 7.4 APPROVALS. The requisite approval of the Shareholders of
Purchaser has been obtained, and the other notices, declarations, filings,
authorizations, consents, orders, and approvals referred to in Section 7.3
(copies of which shall be provided to the other parties) have been delivered,
made or obtained.
SECTION 7.5 ADVERSE CHANGES. No material adverse changes shall have
occurred in the financial condition, working capital, assets, liabilities,
reserves, business, operations, or prospects of Purchaser taken as a whole since
the date of Purchaser's financial statements listed in Schedule 5.4.
SECTION 7.6 NO GOVERNMENTAL PROCEEDING OR LITIGATION. No suit, action,
investigation, inquiry or other proceeding by any governmental body has been
instituted or threatened which questions the validity or legality of the
transactions planned under this Agreement or which, if successfully asserted,
would otherwise have a material adverse effect on the conduct of Purchaser's
business assets or on its properties.
SECTION 7.7 AFFIRMATIVE ACTION BY PURCHASER; COVENANTS.
(a) On or prior to closing Purchaser shall have completed the
following:
(1) Be in full compliance with all SEC requirements;
(2) Obtained the resignations of each of the officers and
directors of Purchaser and elected the following individuals in their stead:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Chief Executive Officer, Vice President,
Secretary, Treasurer and Chairman of the
Board of Directors
▇▇▇▇▇ ▇. ▇▇▇▇▇ President, Chief Operating Officer and Director
(3) Filed with the State of New York such documents necessary
to effect the change of Purchaser's name to "Military Resale Group, Inc." and
obtained requisite board and shareholder approval in connection therewith.
(b) Purchaser hereby acknowledges that MRG has delivered to
Purchaser a true and correct copy of that certain Option Agreement dated August
1, 2001 by and between MRG and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, a consultant to MRG, pursuant
to which MRG granted to ▇▇. ▇▇▇▇▇▇▇▇▇▇▇ an option to purchase 1,000,000 shares
of MRG's common stock, $0.01 par value, exercisable, in whole or in part, for 1
year at an exercise price of $0.50 per share (the "Option Agreement"). Purchaser
hereby expressly agrees to assume the rights and obligations of MRG under the
Option Agreement and, to issue shares of Purchaser Stock in substitution for
shares of MRG's common stock in accordance with the terms of the Option
Agreement.
ARTICLE VIII
TERMINATION
In the event that either Purchaser or the Sellers shall refuse to close
the transactions contemplated in this Agreement by reason of the failure of any
condition precedent to closing set forth in Articles VI and VII (absent waiver
by the applicable party thereunder), then this Agreement shall terminate and
neither party shall have any obligation or liability to the other hereunder by
reason of any provision hereof or any actions taken in contemplation or
anticipation of the Closing.
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 INDEMNIFICATION BY PURCHASER AND GALLUCIO. Purchaser and
Gallucio, jointly and severally, agree to indemnify, defend and hold harmless
the Sellers, MRG and their respective directors, officers, employees, agents,
counsel, successors and assigns from and against losses, liabilities,
obligations, damages (whether actual, punitive or consequential), deficiencies,
costs or expenses, including without limitation interest, penalties and
reasonable attorneys' fees and disbursements of any of the foregoing persons or
entities, arising from, asserted against or associated with:
(a) a breach of any representation or warranty made by
Purchaser or Gallucio herein;
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(b) failure by Purchaser to perform any covenant, obligation
or agreement made herein; or
(c) the conduct of Purchaser's business prior to the Closing,
including but not limited to, the failure to pay any property or other tax owing
by Purchaser due to Purchaser's prior operations.
SECTION 9.2 TERMINATION OF INDEMNIFICATION. An Indemnified Party shall
not be entitled to indemnification for any loss, damage or expense unless the
right to such indemnification is asserted on or before the fifth (5th)
anniversary of the date of the Closing, except that if there then shall be
pending any such assertion, dispute, claim, proceeding or action under this
Agreement, the Indemnified Party shall continue to have the right to
indemnification with respect to such pending assertion, dispute, claim,
proceeding or action.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 CONSTRUCTION.
10.1.1 WORDS. All references in this Agreement to the singular
shall include the plural where applicable, and all references to gender shall
include the masculine, feminine and neuter gender.
10.1.2 CROSS-REFERENCES. References in this Agreement to any
Article shall include all Sections, Subsections, and Paragraphs in such Article;
references in this Agreement to any Section shall include all Subsections and
Paragraphs in such Section; and references in this Agreement to any Subsection
shall include all Paragraphs in such Subsection.
SECTION 10.2 SEVERABILITY. If any part of this Agreement for any reason
shall be declared invalid, such invalidity shall not affect the validity of any
remaining portion, which shall remain in full force and effect.
SECTION 10.3 FURTHER ASSURANCES. Each party shall, at the expense of
the other party, furnish, execute and deliver such documents, instruments,
certificates, notices or other further assurances as the other party may
reasonably require as necessary or appropriate to effect the purposes of this
Agreement or to confirm the rights declared or arising hereunder.
SECTION 10.4 REPRESENTATIONS, WARRANTIES, COVENANTS AND OBLIGATIONS.
The representations and warranties (all of which are made as of the Closing
Date), and the covenants, agreements and obligations of the parties contained in
this Agreement shall be true and correct in all material respects and have
effect as of the Closing Date. The statements contained in any
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certificate or other instrument delivered by or on behalf of any party at
Closing shall be deemed representations and warranties or covenants and
agreements, as the case may be, hereunder.
SECTION 10.5 EXPENSES. Each party hereto will pay its own expenses
incident to this Agreement and the transactions contemplated hereby.
SECTION 10.6 BENEFIT. Except as otherwise expressly set forth herein ,
no person who is not a party to this Agreement shall have any rights or derive
any benefit hereunder.
SECTION 10.7 SCOPE AND MODIFICATION. This Agreement, constitutes the
entire agreement between the parties and supersede all prior oral or written
agreements or understandings of the parties with regard to the subject matter
hereof, including but not limited to that certain Plan and Agreement of Merger
dated as of October 15, 1999 by and among MRG and the Purchaser. No
interpretation, change, termination or waiver of any provision hereof shall be
binding upon a party unless in writing and executed by the other party. No
modification, waiver, termination, rescission, discharge or cancellation of any
right or claim under this Agreement shall affect the right of any party hereto
to enforce any other claim or right hereunder.
SECTION 10.8 DELAYS OR OMISSIONS. Except as expressly provided in this
Agreement, no delay or omission to exercise any right, power or remedy accruing
to a party hereunder, upon any breach or default of any party under this
Agreement, shall impair any such right, power or remedy, nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or a waiver of or acquiescence in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring.
SECTION 10.9 SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall inure to the benefit of, and be binding upon, the successors, assigns,
executors and administrators of the parties hereto. It is contemplated that
Purchaser may assign this Agreement to a subsidiary corporation yet to be
formed.
SECTION 10.10 HEADINGS. Article, Section, and Subsection headings of
this Agreement are for convenience only and are not to be construed as part of
this Agreement or as defining or limiting in any way the scope or intent of the
provisions hereof.
SECTION 10.11 GOVERNING LAW. The terms and provisions of this Agreement
shall be interpreted in accordance with and governed by the laws of New York and
the United States, without giving effect to the doctrine of conflict of laws.
SECTION 10.12 NOTICES. Any notice under this Agreement shall be in
writing and shall be delivered by personal service or by United States certified
or registered mail, with postage prepaid, addressed to a party at the address
set forth beneath its name, below, or at such other address as one party may
give notice of to the other party.
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SECTION 10.13 DUPLICATES. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original document.
SECTION 10.14 FINDERS' FEES.
10.14.1 SELLER. The Sellers, jointly but not severally,
represent and warrant to Purchaser that they have not retained a finder or
broker in connection with the transactions contemplated by this Agreement, and
hereby agree to indemnify and to hold Purchaser harmless of and from any
liability for commission or compensation in the nature of a finder's fee to any
broker or other person or firm (and the costs and expenses of defending against
such liability or asserted liability) for which the Sellers, or any of their
representatives, are responsible.
10.14.2 PURCHASER. Purchaser represents and warrants to the
Sellers that it has not retained a finder or broker in connection with the
transactions contemplated by this Agreement, and hereby agrees to indemnify and
to hold the Sellers harmless of and from any liability for commission or
compensation in the nature of a finder's fee to any broker or other person or
firm (and the costs and expenses of defending against such liability or asserted
liability) for which Purchaser, or any of its representatives, is responsible.
SECTION 10.15 SURVIVAL. All representations, warranties and covenants
(except Purchaser's and Gallucio's indemnification under Sections 9.1 and 9.2
which shall survive in accordance with the terms therein) made in this Agreement
or pursuant hereto, and the right to claim Indemnifications provided herein with
respect thereto shall survive for one (1) year after the closing of the
transactions contemplated by this Agreement. Purchaser's indemnification under
Sections 9.1 and 9.2 shall survive any assignment by Purchaser of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date and year first-above written.
PURCHASER:
BACTROL TECHNOLOGIES, INC.
By:
----------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
----------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇, personally but solely with
respect to Articles V and VI
MILITARY RESALE GROUP, INC., SOLELY WITH
RESPECT TO ARTICLES III AND IV.
By:
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
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EXHIBIT A
(SEE ATTACHED)
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SELLER SIGNATURE PAGE
This Seller Signature Page constitutes (i) a signature page to, and part of,
that certain Stock Purchase Agreement, dated and effective as of October 10,
2001 (the "Agreement"), by and among THE SHAREHOLDERS OF MILITARY RESALE GROUP,
INC., a Maryland corporation ("MRG"), WHO EXECUTE A SELLER SIGNATURE PAGE TO THE
AGREEMENT IN THE FORM OF EXHIBIT A THERETO (each a "Seller"), BACTROL
TECHNOLOGIES, INC., a New York corporation or assigns ("Purchaser"), and ▇▇▇
▇▇▇▇▇▇▇▇, an individual and officer of Purchaser, for the purposes of Articles V
and VI only, and MRG, for the purposes of Articles III and IV only, and (ii) the
agreement of the undersigned to become a party to, and be bound by the terms and
provisions of the Agreement.
FOR INDIVIDUALS ONLY:
SELLER: Name:
------------------------------------
-----------------------------------------
(Please sign above)
No. of shares sold:
----------------------
Address:
---------------------------------
-----------------------------------------
Social Security No.:
---------------------
FOR BUSINESS ENTITIES ONLY:
SELLER: Name:
------------------------------------
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
No. of shares sold:
----------------------
Address:
---------------------------------
Tax Identification No.:
------------------