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Exhibit 2.1
ASSET EXCHANGE AGREEMENT
By and among
GENRAS, INC.
as Seller,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
as Selling Shareholder,
VINCULUM INCORPORATED,
as Purchaser,
and
AZTORE HOLDINGS, INC.,
as Purchaser Shareholder
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Exhibit 2.1
TABLE OF CONTENTS
Article 1 Exchange ............................................................................... 1
Section 1.1 Properties and Assets to be Exchanged................................. 1
Section 1.2 Excluded Assets....................................................... 3
Section 1.3 Purchase Price........................................................ 3
Section 1.4 Closing Date.......................................................... 3
Section 1.5 No-Competition Covenants.............................................. 4
Section 1.6 Reorganization Status................................................. 4
Article 2 Representations, Warranties and
Agreements of Seller and Selling Shareholder ............................................ 4
Section 2.1 Authority ............................................................ 4
Section 2.2 Organization and Good Standing........................................ 4
Section 2.3 Condition of Acquired Assets; Damages to the Business................. 4
Section 2.4 Condemnation.......................................................... 5
Section 2.5 Title to Properties................................................... 5
Section 2.6 No Violation.......................................................... 5
Section 2.7 Licenses, Permits and Approvals....................................... 5
Section 2.8 Taxes................................................................. 6
Section 2.9 Contracts............................................................. 6
Section 2.10 Employment Matters.................................................... 6
Section 2.11 Conduct of Business................................................... 6
Section 2.12 Conduct of Business Pending Closing................................... 7
Section 2.13 Insurance............................................................. 7
Section 2.14 Litigation............................................................ 7
Section 2.15 Primary Suppliers..................................................... 7
Section 2.16 Copyrights, Trademarks, Etc........................................... 7
Section 2.17 Utilities............................................................. 8
Section 2.18 Financial Statements.................................................. 8
Section 2.19 Disclosure............................................................ 8
Section 2.20 Investment Intent..................................................... 8
Section 2.21 Updating of Schedules................................................. 9
Section 2.22 Basis for Representations and Warranties.............................. 9
Article 3 Representation and Warranties of the
Purchaser and Purchaser Shareholder...................................................... 9
Section 3.1 Authority and Title................................................... 9
Section 3.2 Organization and Good Standing........................................ 9
Section 3.3 Capitalization........................................................ 10
(a) Authorized Capital Stock......................................... 10
(b) Warrants Outstanding............................................. 10
(c) Duly Issued...................................................... 10
(d) No Pre-Emptive Rights............................................ 10
(e) Modified Capital Structure....................................... 10
Section 3.4 Valid Issue........................................................... 10
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Section 3.5 Taxes................................................................ 10
Section 3.6 Litigation........................................................... 11
Section 3.8 Disclosure........................................................... 11
Section 3.9 Updating of Schedules................................................ 11
Section 3.10 Basis for Representation and Warranties.............................. 11
Article 4 Additional Agreements.................................................................. 12
Section 4.1 Access to Records and Property....................................... 12
Section 4.2 Bulk Sales Laws...................................................... 12
Section 4.3 Reorganization of Capital Structure and Change of
Domicile............................................................. 12
(a) Authorized Capital Stock........................................ 12
(b) Outstanding Stock, Warrants and Liability....................... 12
(c) Warrant Units................................................... 12
(d) Reverse Stock Split............................................. 13
(e) Change of Domicile.............................................. 13
(f) Agreements...................................................... 13
(g) Advisory Fee.................................................... 13
Article 5 Conditions Precedent................................................................... 13
Section 5.1 Conditions Precedent to the Obligations of Purchaser................. 13
(a) Representations, Warranties and Covenants....................... 13
(b) Licenses, Permits, Approvals, Etc............................... 14
(c) Due Diligence of Purchase....................................... 14
(e) Consents........................................................ 14
(f) No Adverse Changes.............................................. 14
(g) Legal Matters................................................... 14
(h) Receipt of Closing Documents.................................... 14
Section 5.2 Conditions Precedent to the Obligation of Seller..................... 15
(a) Representations, Warranties and Covenants....................... 15
(b) Due Diligence of Seller......................................... 15
(c) No Adverse Changes.............................................. 15
(d) Legal Matters................................................... 15
(e) Officers and Directors.......................................... 15
(f) Exercise of Warrants............................................ 16
(g) Receipt of Closing Documents.................................... 16
Article 6 Closing Documents...................................................................... 16
Section 6.1 Documents to Be Delivered by Seller.................................. 16
(a) Bills of Sale, Assignments and Transfers........................ 16
(b) Certificates.................................................... 16
(c) Good Standing Certificate for Seller............................ 16
(d) Consents to Assignments......................................... 16
(e) Certificate of Secretarial Officer of Seller.................... 16
(f) Other Documents................................................. 16
Section 6.2 Documents to Be Delivered by Purchaser............................... 16
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(a) Certificate..................................................... 16
(b) Good Standing Certificate for Purchaser......................... 17
(c) Opinions........................................................ 17
(d) Certificate of Secretarial Officer of Purchaser................. 17
(e) Other Documents................................................. 17
Article 8 Termination, Amendments, Waiver and Assignment......................................... 17
Section 8.1 Termination.......................................................... 17
Section 8.2 Effect of Termination................................................ 18
Section 8.3 Amendment............................................................ 18
Section 8.4 Waiver............................................................... 18
Section 8.5 Assignment........................................................... 18
Article 9 General Provisions..................................................................... 18
Section 9.1 Survival of Representations and Warranties........................... 18
Section 9.2 Indemnification...................................................... 18
(a) Seller's Indemnification........................................ 18
(b) Purchaser's Indemnification..................................... 19
Section 9.3 Brokerage Commission................................................. 19
Section 9.4 Notices.............................................................. 20
Section 9.5 Expenses............................................................. 20
Section 9.6 Legal Representation................................................. 20
Section 9.7 Further Assurances................................................... 21
Section 9.8 Miscellaneous........................................................ 21
Section 9.9 Gender............................................................... 21
Section 9.10 Illegality........................................................... 21
Section 9.11 Effect of Attachments................................................ 21
Schedules
Schedule 1.1(a) - Inventories
Schedule 1.1(b) - Furniture, Fixtures and Equipment
Schedule 1.1(d) - Accounts Receivable and Cash
Schedule 1.1(e) - Leases
Schedule 1.1(f) - Equipment Leases
Schedule 1.1(g) - Pre-paid Expenses and Deposits
Schedule 1.1(h) - Contracts
Schedule 1.1(j) - Permits and Licenses Transferable
Schedule 1.3 - Assumed Obligations
Schedule 2.7 - Permits and Licenses
Schedule 2.10 - Employees Not At-Will
Schedule 2.11 - Conduct of Business
Schedule 2.13 - Insurance
Schedule 2.14 - Litigation - Seller
Schedule 2.15 - Vendors and Suppliers
Schedule 2.16 - Copyrights and Trademarks
Schedule 2.18 - Financial Statements - Seller
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Schedule 3.6 - Litigation - Purchaser
Schedule 3.7 - Financial Statements - Purchaser
Exhibits
Exhibit 4.3(e) - Purchaser's Pre-Closing Balance Sheet
Exhibit 4.3(f)(i) - Consulting Agreement
Exhibit 4.3(f)(ii) - Promissory Note
Exhibit 4.3(f)(iii) - Lock-Up, Anti-Dilution and Governance Agreement
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Exhibit 2.1
ASSET EXCHANGE AGREEMENT
THIS ASSET EXCHANGE AGREEMENT ("Agreement") is entered into as of May
18, 1998, by and among GENRAS, INC. ("Seller"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Selling
Shareholder"), VINCULUM INCORPORATED ("Purchaser") and AZTORE HOLDINGS, INC.
("Purchaser Shareholder").
RECITALS:
A. Seller is an Arizona corporation that operates a computer
and consumer electronics liquidation and assembly business located in
Scottsdale, Arizona (hereinafter referred to as the "Business").
B. Selling Shareholder owns 100% of the outstanding capital
stock of Seller.
C. Purchaser is a Colorado corporation with approximately 300
shareholders of record.
D. Purchaser Shareholder owns approximately 81% of the
outstanding capital stock of Purchaser.
E. Purchaser desires to acquire the assets comprising the
Business and Seller and Selling Shareholder desire to transfer such assets to
Purchaser in exchange for capital stock of Purchaser under the terms and
conditions set forth herein.
AGREEMENT:
Now, THEREFORE, in consideration of the mutual promises and covenants
herein contained, Seller, Selling Shareholder, Purchaser and Purchaser
Shareholder hereby agree as follows:
ARTICLE 1
EXCHANGE
Section 1.1 Properties and Assets to be Exchanged. On the Closing Date
(as defined herein) Seller shall assign and deliver to Purchaser, and Purchaser
shall acquire from Seller, all of the properties and assets comprising the
Business, of every kind and description, real, personal and mixed, tangible and
intangible, wheresoever located, and whether or not carried on the books of
Seller, all as the same shall exist at 12:01 a.m. on June 1, 1998 (the
"Effective Time"), excepting only the Excluded Assets in Section 1.2 hereof
(the "Acquired Assets"). Without limiting the foregoing, but to identify more
particularly certain of the properties and assets to be exchanged hereunder, the
Acquired Assets shall include:
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(a) All inventories at or otherwise relating to the Business listed in
SCHEDULE 1.1(a) attached hereto;
(b) All furniture, fixtures, equipment, shelving, office supplies and
miscellaneous items listed in SCHEDULE 1.1(b) attached hereto;
(c) All interest in and to the trade names and trademarks and all other
right of Seller related to the use of the name "CPUMicroMart" or any combination
or variation thereof;
(d) All accounts receivable, cash on hand, bank checking and savings
accounts and certificates of deposit as listed on SCHEDULE 1.1(d) attached
hereto;
(e) All leasehold interests of Seller in the real estate (the
"Premises") as set forth in the lease agreements listed in SCHEDULE 1.1(e)
attached hereto (the "Leases") and all easements, rights of way, licenses,
permits, rights, tenements, appurtenances and privileges owned or used by Seller
in connection with the Business;
(f) All leasehold interests of Seller in personal property as set forth
in the lease agreements listed in SCHEDULE 1.1(f) attached hereto;
(g) All prepaid expenses, insurance premiums and utility and other
deposits listed in SCHEDULE 1.1(g) attached hereto;
(h) All benefits and rights under all contracts, leases, commitments
and agreements, oral or written, to which Seller is a party and which are
described in SCHEDULE 1.1(h) attached hereto;
(i) All transferable permits, certifications, authorizations, licenses,
consents and approvals relating to the Business listed in SCHEDULE 1.1(i)
attached hereto;
(j) All engineering plans, designs and drawings, system maps,
abstracts, blueprints, surveys and reproducible drawings of the facilities and
improvements on the Premises as listed in SCHEDULE 1.1(j) attached hereto;
(k) All warranties and guarantees of manufacturers, contractors,
sellers or suppliers which pertain to the Acquired Assets, the Business or the
Premises;
(l) All interest in and to the telephone numbers and listings of Seller
pertaining to the Business in all telephone books, directories and other
publications;
(m) All computer software and licenses with respect to the Business;
and
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(n) The business of Seller as a going concern, including the goodwill,
and all vendor, employee, payroll and other records, files, data, information
and documents relating to the Business.
Section 1.2 Excluded Assets. Seller shall retain all returns and
records relating to local, state and federal income taxes and may retain copies
of all financial records as related to the Business as necessary for the purpose
of winding-up and liquidating the Seller and distributing its assets after the
Closing Date.
Section 1.3 Purchase Price. In consideration for the Acquired Assets,
Purchaser shall issue to Seller 50,000,000 shares of its common stock and
Purchaser shall assume as of the Effective Time the executory commitments and
obligations related to the Leases set forth in SCHEDULE 1.1(e), the lease
agreements set forth in SCHEDULE 1.1(f), the contracts, leases, commitments and
agreements set forth in SCHEDULE 1.1(h), and the liabilities as listed and in
the amounts set forth on SCHEDULE 1.3 hereto (collectively, the "Assumed
Obligations"). Purchaser shall not assume nor be liable for and Seller expressly
agrees to remain liable for and to pay, perform and discharge all debts,
liabilities and obligations of Seller except for the Assumed Obligations as
existing on or accruing prior to, upon or after the Effective Time (the
"Excluded Obligations"), including, without limitation:
(a) All federal, state and local income taxes which have
accrued or may accrue or become due and payable as a result of income,
gains or revenues received, realized or accrued by Seller or its
shareholders after the Effective Time, together with all interest,
penalties and other charges and fees in connection therewith;
(b) All liabilities, obligations and claims based on or
arising from occurrences, circumstances or events, or exposure to
conditions, existing or occurring prior to or on the Effective Time
arising in connection with the negligence or misconduct of Seller or
any of its directors, officers, employees, contractors, subcontractors
or agents;
(c) All other debts, liabilities, obligations, contracts and
commitments (whether known or unknown, contingent or fixed, liquidated
or unliquidated) arising out of or related to the ownership, operation
or use of any of the Acquired Assets and the Business on or prior to
the Effective Time or the conduct of the business of Seller, whether
incurred before, on or after the Effective Time.
Section 1.4 Closing Date. The sale and purchase provided for herein
shall be consummated and closed (the "Closing") at the offices of ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, at 1:00
P.M., local time, on June l, 1998, or such time and date as the parties hereto
may agree upon (herein referred to as the "Closing Date"). All Acquired Assets
and the Business
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shall be deemed transferred as of the Effective Time and all documents delivered
on the Closing Date shall reflect the transfer as occurring at the Effective
Time.
Section 1.5 No-Competition Covenants. Upon the Closing, Selling
Shareholder shall become officers and directors of Purchaser and its successor
as contemplated in Section 5.2(e) and Article 7 hereof. For the period of five
years from the Closing Date or three years from termination of service as an
officer and director of Purchaser or its successor, whichever is longer, Seller
and Selling Shareholder agree that they will not be an officer, director,
partner, member, employee, agent, representative, consultant or an owner of any
equity interest in any entity, or directly or indirectly provide any assistance,
financial or otherwise, to, any entity, or an owner of any interest in, or
employee, agent or representative of any other form of business which competes
directly or indirectly with the Business or any component thereof in any
geographic area where the Business is then conducted.
Section 1.6 Reorganization Status. The parties intend that the
transactions contemplated under this Agreement qualify as a "reorganization" as
defined in I. R. C. Section 368(a)(1)(C) and shall file all required elections
and returns to report this transaction consistent with such intent.
ARTICLE 2
REPRESENTATIONS, WARRANTIES AND
AGREEMENTS OF SELLER AND SELLING SHAREHOLDER
As an inducement to Purchaser and Purchaser Shareholder to enter into
and perform this Agreement, Seller and Selling Shareholder covenant, represent
and warrant to, and agree with, Purchaser and Purchaser Shareholder as follows:
Section 2.1 Authority. Seller has the full legal power and authority to
enter into and perform this Agreement, and the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby will not
violate any provision of law, Seller's Articles of Incorporation or bylaws.
Seller has taken all necessary action (including action of Seller's board of
directors and shareholders, as required) to authorize and approve the execution
and delivery of this Agreement and the performance of the transactions
contemplated hereby.
Section 2.2 Organization and Good Standing. Seller is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Arizona, and has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted.
Section 2.3 Condition of Acquired Assets; Damages to the Business. To
the best knowledge and belief of Seller and Selling Shareholder, the Premises
and the Acquired Assets are in good condition and free from defects. At the
Effective Time, the inventories set forth on SCHEDULE 1.1(a) had the book value
as determined under generally accepted accounting principles as set forth in
such schedule and the
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accounts receivable set forth on SCHEDULE 1.1(d) are in the amount as set forth
in such schedule and are collectible to the extent thereof, with allowance for
doubtful accounts as set forth in such schedule. At the Closing Date, the
Premises and the Acquired Assets shall be in substantially the same condition as
on the date of this Agreement, excepting ordinary wear and tear. In the event
that prior to the Closing Date any improvements on the Premises or any of the
Acquired Assets shall be destroyed or damaged and provided such improvements or
Acquired Assets are material to the operation of the Business, Purchaser shall
have the option to terminate this Agreement. If Purchaser does not so elect to
terminate this Agreement and proceed to close hereunder, Purchaser shall be
entitled to settle any loss with insurance carriers and to receive from such
carriers the proceeds of all insurance applicable to such loss. Seller shall
execute and deliver any and all such documents and take all such action as may
be necessary or appropriate to comply with the terms of this Section 2.3.
Section 2.4 Condemnation. If, prior to the Closing Date, any part of
the Premises shall be taken by eminent domain or if any proceeding in the nature
of eminent domain is filed against or affecting the Premises, Purchaser shall
become entitled to the award of compensation in any such taking, and Seller
shall thereafter deliver or cause to be delivered all instruments reasonably
required to assign such award to Purchaser.
Section 2.5 Title to Properties. Seller has good title to all Acquired
Assets, free and clear of any mortgages, liens, pledges, charges or other
encumbrances except for the liabilities and liens listed in SCHEDULE 1.3 hereto
and expressly assumed or taken subject to by Purchaser.
Section 2.6 No Violation. Seller has not received notice of any
violation of any applicable zoning regulation, ordinance or other law, order,
regulation or requirement relating to their operations or properties; to the
best knowledge and belief of Seller, no such violation presently exists; and all
buildings, improvements and other structures owned or used by Seller in the
Business conform to all applicable laws, ordinances, codes and regulations,
including, without limitation, the Americans With Disabilities Act ("ADA"). To
the best knowledge and belief of Seller, Seller and its services, practices,
▇▇▇▇▇▇▇▇, properties, equipment, machinery, buildings and operations relating to
the Business are in full compliance with all applicable federal, state and local
laws, statutes, ordinances, codes, regulations, rules, orders, restrictions and
requirements, governmental, administrative, judicial and otherwise, including,
without limitation, those relating to wages, prices, equal opportunity,
environmental protection, safety, health, building and zoning, and the ADA, and
to the best knowledge and belief of Seller, no changes in any such laws,
statutes, ordinances, codes, regulations, rules, orders, restrictions or
requirements have been proposed or are in prospect with which Purchaser could
not comply after the Closing Date without materially adversely affecting the
Business, and the Acquired Assets or their operation or profitability.
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Section 2.7 Licenses, Permits and Approvals. Seller holds all licenses,
permits, franchises, authorizations, approvals, consents and rights from all
appropriate federal, state, local or other public governmental or administrative
or judicial authorities necessary in connection with the operation of the
Business by Seller, all of which are listed and described in SCHEDULE 2.7
attached hereto and, between the date hereof and the Closing Date, Seller will
maintain all such licenses, permits, franchises, authorizations, approvals,
consents and rights, none of which will be adversely affected by the
transactions contemplated by this Agreement except for those which cannot be
legally transferred to Purchaser under the terms hereof as specifically
described in SCHEDULE 2.7.
Section 2.8 Taxes. Seller has filed with appropriate federal, state and
local governmental agencies all tax returns and reports required to be filed by
Seller and, to the best knowledge of Seller and Selling Shareholder, has paid
all taxes and assessments which became due prior to the date hereof.
Section 2.9 Contracts.
(a) Except as set forth on SCHEDULE 1.1(h) attached hereto, Seller is
not a party to or bound by any contracts, agreements or instruments which relate
to or affect the Business. Seller has provided Purchaser with a true, accurate
and complete copy of each document listed in SCHEDULE 1.1(h).
(b) Seller has, to the best knowledge of Seller and Selling
Shareholder, performed all obligations required to be performed by it to date
and is not in default under, and no event has occurred which, with the lapse of
time or action by a third party, could result in a default under, any
outstanding indenture, mortgage, deed of trust, contract, agreement, lease or
other commitment to which it is a party or by which it is bound and relates to
the Business or under any provision of Seller's Articles of Incorporation or
by-laws.
Section 2.10 Employment Matters. Except as set forth on SCHEDULE 2.10
hereto, all full or part-time employees employed in connection with the
operation of the Business are terminable by Seller at will at any time without
any obligation for severance pay, vacation pay or other liability.
Section 2.11 Conduct of Business. Except as set forth on SCHEDULE 2.11
hereto, Seller
(a) experienced any material adverse change in the assets, liabilities
or business relating to the Business or the Acquired Assets;
(b) suffered the filing, or learned of any basis for the institution
of, any action, suit, proceeding or governmental investigation, with respect to
the business, properties, assets or goodwill relating to the Business or the
Acquired Assets;
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(c) entered into any contract to provide or reserve any future use of
the Business or the Acquired Assets by any persons;
(d) led any accounts relating to the Business in advance or collected
any advance payment or deposit under any contract relating to the future use of
the Business; or
(e) entered into any other transaction relating to the sale, lease or
other disposition of the Business or the Acquired Assets.
Section 2.12 Conduct of Business Pending Closing. From and after the
date hereof and until the Effective Time, with respect to the Business or the
Acquired Assets, Seller will: (a) maintain the Acquired Assets in their present
state of repair, order and condition, reasonable wear and tear excepted; (b)
comply with all laws applicable to the Business; (c) not sell, mortgage, subject
to lien, pledge or encumber or otherwise dispose of any of the Acquired Assets;
(d) not enter into any written or oral contract, lease, plan, commitment or
agreement relating to the Business without the prior consent of Purchaser; and
(e) continue to operate the Business in its normal course.
Section 2.13 Insurance. Seller has in effect the insurance coverage
with respect to the Business described in SCHEDULE 2.13 attached hereto, which
description includes the name of the insurer, the policy number, the name of the
insured, the type and amount of coverage and risks insured, and Seller has
delivered to Purchaser complete and accurate copies of all such insurance
policies. Such insurance coverage, as to amounts and types of coverage and risks
insured, is adequate for the Business as presently conducted.
Section 2.14 Litigation. Except as set forth in SCHEDULE 2.14, Seller
is not engaged in or threatened with any claim, action, litigation,
investigation, audit, arbitration, dispute or proceeding relating to the
Business or the Acquired Assets, and Seller are not now subject to any order,
decree or other governmental restriction adversely affecting the business or
assets of the Business or the Acquired Assets or which would prevent or hamper
the consummation of the transactions contemplated by this Agreement or
Purchaser's intended use or operation of the Acquired Assets.
Section 2.15 Primary Suppliers. SCHEDULE 2.15 ATTACHED hereto contains
a list of all vendors and suppliers of services or goods to the Business.
Section 2.16 Copyrights, Trademarks, Etc. SCHEDULE 2.16 attached hereto
lists and describes all copyrights, trademarks, service marks and trade names
owned or applied for by Seller or used in connection with the operation of the
Business. To the best knowledge of Seller and Selling Shareholder, there are no
claims or demands of any person, firm or corporation pertaining to the
copyrights, trademarks, service marks, trademark or service ▇▇▇▇ registrations,
trademark or service ▇▇▇▇ registration applications, label filings or trade
names, or, as the case may be, the
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rights of Seller under trademarks, service marks, label filings or trade names
listed in such SCHEDULE 2.16 as owned by Seller, and no proceedings have been
instituted, or are pending or threatened which challenge the rights of Seller in
respect thereof, and none of the issued trademarks, service marks, trademark
registrations, label filings or trade names or, as the case may be, the rights
granted to Seller in respect thereof and listed in SCHEDULE 2.16 as owned by
Seller, is subject to any outstanding order, decree, judgment, stipulation,
injunction, restriction or agreement restricting the scope of the use of such
patents, copyrights, trademarks, service marks, trademark registrations, label
filings or trade names. To the best knowledge of Seller and Selling Shareholder,
Seller is not infringing or violating, and during the past five years has not
infringed or violated, any adversely held copyright, trademark, service ▇▇▇▇ or
trade name, nor engaged in any kind of unfair or unlawful competition nor
wrongfully used any confidential information or trade secretes or patentable
inventions of any former employee of Seller or any other person, firm or
corporation. Seller is not wrongfully using any such information nor has any
knowledge of any patented device or application thereof which would materially
and adversely affect any aspect of the Business or its operations.
Section 2.17 Utilities. All utilities necessary for the present use and
operation of the Acquired Assets are available to the Business, including,
without limitation, electric power, natural gas, storm sewer, water, sanitary
sewer and telephone over public rights of way.
Section 2.18 Financial Statements. SCHEDULE 2.18 attached hereto sets
forth the financial statements delivered to Purchaser by Seller. To the best
knowledge of Seller and Selling Shareholder, all such financial statements are
true, accurate and complete and present fairly the financial position of Seller
as of the dates stated and results of operations of Seller for the periods
depicted.
Section 2.19 Disclosure. No representation or warranty made herein by
Seller or Selling Shareholder and no written statement, certificate, schedule or
document, including without limitation any projection, report or summary given
or to be given to Purchaser or Purchaser Shareholder pursuant to this Agreement,
or with respect to the transactions contemplated hereunder, contains or will
contain any untrue statement of a material fact, or will omit to state a
material fact necessary to make the statements contained herein or therein under
the circumstances under which they were made not misleading, and Seller and
Selling Shareholder have made, and will make in good faith through the Closing
Date, full disclosure of all material facts with respect to the Business and the
Acquired Assets, including, without limitation, the operations, assets and
prospects which a prudent purchaser would deem relevant.
Section 2.20 Investment Intent. The shares of Purchaser's common stock
transferred to Seller in exchange for the Acquired Assets and to be distributed
to Selling Shareholder upon the liquidation of Seller are being acquired by
Selling Shareholder for its own account, with the intention of holding for
investment and with no present intention of dividing or allowing others to
participate in this
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investment or of reselling or otherwise participating directly or indirectly in
a distribution of such shares. Selling Shareholder understands that such shares
are "restricted securities" as defined under Rule 144 as promulgated under the
Securities Act of 1933, as amended ("Securities Act") and will bear an
appropriate legend indicating that such shares can not be sold or transferred
without registration under the Securities Act or pursuant to applicable
exemption from such registration. The foregoing shall not apply to the transfer
of shares to persons holding rights to acquire equity interests in Seller
directly or from the Selling Shareholder prior to liquidation but such persons
shall acknowledge a similar investment intent and applicable restrictions on
transfer.
Section 2.21 Updating of Schedules. There has been no material adverse
change in any of the matters reflected in any Schedule made a part of this
Agreement from the respective dates thereof to and including the date of this
Agreement, nor will there be any material adverse change in such matters from
the date hereof to and including the Closing Date. All Schedules attached hereto
are true, accurate and complete in all material respects and will be updated by
Seller to include information as of such date as may be requested by Purchaser
and delivered to Purchaser prior to or on the Closing Date with any and all
changes marked so that all such Schedules are true, accurate and complete in all
respects.
Section 2.22 Basis for Representations and Warranties. Prior to
executing this Agreement, Seller and Selling Shareholder have made such
affirmative and thorough reviews, searches, inspections and inquiries relating
to Seller, the Business and the Acquired Assets, and have consulted with such
third parties, which a prudent person might deem necessary or advisable in order
to gain knowledge concerning the matters to which the representations and
warranties relate. Seller's and Selling Shareholder' best knowledge and belief
with respect to the subject matter of any representation and warranty which is
subject to the "best knowledge and belief' shall be deemed to include matters
which Seller or Selling Shareholder should have known with respect to the
subject matter of such representations and warranties.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE
PURCHASER AND PURCHASER SHAREHOLDER
As an inducement to Seller and Selling Shareholder to enter into and
perform this Agreement, Purchaser, and Purchaser Shareholder covenant, represent
and warrant to, and agrees with, Seller and Selling Shareholder as follows:
Section 3.1 Authority and Title. Purchaser has the full legal power
and authority to enter into and perform this Agreement, and the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby will not violate any provision of law, Purchaser's Articles of
Incorporation or bylaws. Purchaser has taken all necessary action (including
action of Purchaser's board of directors, as required but excluding consent of
Purchaser's shareholders) to authorize
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and approve the execution and delivery of this Agreement and the performance of
the transactions contemplated hereby.
Section 3.2 Organization and Good Standing. Purchaser is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Colorado, is duly registered as a foreign corporation doing business in
Arizona and has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being conducted.
Section 3.3 Capitalization.
(a) Authorized Capital Stock. As of the date hereof (i) the authorized
capital stock of Purchaser consists of 130,000,000 shares, of which 50,000,000
shares are designated as preferred stock with a par value of $.001 per share,
30,000,000 shares are designated Class A Common Stock with one vote and a par
value of $.005 per share and 50,000,000 shares are designated as Class B Common
Stock with five votes and a par value of $.001 per shares, and (ii) Purchaser
has issued and outstanding a total of 8,345,385 shares of Class A Common Stock,
no shares of Class B Common Stock and no shares of preferred stock.
(b) Warrants Outstanding. As of the date hereof, Purchaser has
outstanding a total of 295,690 A Warrants which entitle the holder thereof to
purchase one share of Purchaser's Class A Common Stock at $0.50 per share and
which expire on June 15, 1998, 1,857,790 B Warrants which entitle the holder
thereof to purchase one share of Purchaser's Class A Common Stock at $1.00 per
share and which expire on June 15, 1998, 1,857,790 C Warrants which entitle the
holder thereof to purchase one share of Purchaser's Class A Common Stock at
$1.50 per share and which expire on June 15, 1999 and 1,561,220 D Warrants which
entitle the holder thereof to purchase one share of Purchaser's Class A Common
Stock at $0.50 per share and which expire on June 15, 1999.
(c) Duly Issued. All of the outstanding shares of capital stock of
Purchaser are duly and validly authorized and issued, fully paid and
non-assessable and all outstanding warrants representing binding obligations of
Purchaser to issue additional shares in accordance with the terms thereof.
(d) No Pre-Emptive Rights. Except for the Warrants, Purchaser has no
outstanding obligations for the issuance of or conversion into any shares of its
capital stock and there are no pre-emptive or other rights held by any current
or former shareholder of Purchaser with respect to the issuance of any shares of
its capital stock.
(e) Modified Capital Structure. Upon the Closing, the capital structure
and outstanding shares of capital stock and warrants shall be modified as
provided in Section 4.3 below.
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Section 3.4 Valid Issue. Upon issuance the 50,000,000 shares of capital
stock of Purchaser issued in exchange for the Acquired Assets shall be duly and
validly authorized and issued, fully paid and non-assessable.
Section 3.5 Taxes. Purchaser has filed with appropriate federal, state
and local governmental agencies all tax returns and reports required to be filed
by Purchaser and has paid all taxes and assessments which became due prior to
the date hereof and shall pay all such taxes and assessments which become due on
or prior to the Effective Time.
Section 3.6 Litigation. Except as set forth in SCHEDULE 3.6, PURCHASER
is not engaged in or threatened with any claim, action, litigation,
investigation, audit, arbitration, dispute or proceeding, and Purchaser is not
now subject to any order, decree or other governmental restriction adversely
affecting its business or assets or which would prevent or hamper the
consummation of the transactions contemplated by this Agreement or Purchaser's
intended use or operation of the Acquired Assets.
Section 3.7 Financial Statements. SCHEDULE 3.7 attached hereto sets
forth the financial statements delivered to Seller by Purchaser. All such
financial statements are true, accurate and complete and present fairly the
financial position of Purchaser as of the dates stated and results of operations
of Seller for the periods depicted.
Section 3.8 Disclosure. No representation or warranty made herein by
Purchaser or Purchasing Shareholder and no written statement, certificate,
schedule or document, including without limitation any projection, report or
summary given or to be given to Seller or Selling Shareholder pursuant to this
Agreement, or with respect to the transactions contemplated hereunder, contains
or will contain any untrue statement of a material fact, or will omit to state a
material fact necessary to make the statements contained herein or therein under
the circumstances under which they were made not misleading, and Purchaser and
Purchasing Shareholder have made, and will make in good faith through the
Closing Date, full disclosure of all material facts with respect to its
operations, assets and prospects which a prudent purchaser would deem relevant.
Section 3.9 Updating of Schedules. There has been no material adverse
change in any of the matters reflected in any Schedule made a part of this
Agreement from the respective dates thereof to and including the date of this
Agreement, nor will there be any material adverse change in such matters from
the date hereof to and including the Closing Date. All Schedules attached hereto
are true, accurate and complete in all material respects and will be updated by
Purchaser to include information as of such date as may be requested by Seller
and delivered to Seller prior to Closing Date with any and all changes marked so
that all such Schedules are true, accurate and complete in all respects.
Section 3.10 Basis for Representations and Warranties. Prior to
executing this Agreement, Purchaser and Purchasing Shareholders have made such
affirmative
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and thorough reviews, searches, inspections and inquiries relating to Purchaser,
and have consulted with such third parties, which a prudent person might deem
necessary or advisable in order to gain knowledge concerning the matters to
which the representations and warranties relate. Purchaser's and Purchasing
Shareholder's best knowledge and belief with respect to the subject matter of
any representation and warranty which is subject to the "best knowledge and
belief" shall be deemed to include matters which Purchaser or Purchasing
Shareholder should have known with respect to the subject matter of such
representations and warranties.
ARTICLE 4
ADDITIONAL AGREEMENTS
Section 4.1 Access to Records and Properties. Upon execution of this
Agreement and through the Closing Date, Purchaser and Seller, and their
respective accountants, counsel and other representatives, shall have full
access to all of the properties, assets, books, records, tax returns, leases,
contracts and agreements, and all information concerning the business and
properties of the other as each may request. Each party shall provide reasonable
assistance to the other in connection with the conduct of the due diligence
review of the business, properties and financial condition of the other.
Section 4.2 Bulk Sales Laws. Purchaser shall assume all trade payables
in connection with the acquisition of the Acquired Assets and shall waive
compliance by Seller with any bulk transfer or other advance notice provisions
to trade creditors as may be required under the applicable bulk transfer laws.
Section 4.3 Reorganization of Capital Structure and Change of Domicile.
Prior to the Closing Date, Purchaser shall take such corporate actions as
necessary, including the calling and holding of special board of directors' and
shareholders' meetings, to cause the following:
(a) Authorized Capital Stock. The authorized capital of the
corporation shall consist of 70,000,000 shares of common stock, $.001
par value, and 5,000,000 shares of "blank check" preferred stock, $.001
par value.
(b) Outstanding Stock, Warrants and Liabilities. At the
Closing and effective immediately prior to the Effective Time,
Purchaser Shareholder shall (i) cancel 2,720,385 (pre-reverse split) of
the outstanding common stock of Purchaser held by Purchaser Shareholder
such that the outstanding capital stock of Purchaser shall consist of
5,625,000 shares (pre-reverse split) prior to issuance of shares as
contemplated under this Agreement or pursuant to the exercise of any
outstanding warrants, (ii) cancel and cause to be cancelled a total of
4,356,954 outstanding warrants (pre-reverse split) of Purchaser such
that there shall be outstanding a total of 1,215,536 warrants
(pre-reverse split) outstanding at the conclusion of the Closing (or
such lesser amount resulting from the exercise of A Units or B Units
modified as contemplated under
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Section 4.3(c) below) and (iii) cancel approximately $13,000 of the
liabilities owed by Purchaser to Purchaser Shareholder. As a result of
the foregoing and such other actions as contemplated, the
capitalization, outstanding warrants and balance sheet of the Purchaser
shall be as set forth on EXHIBIT 4.3(e) hereto.
(c) Warrant Units. The outstanding warrants of the Purchaser
shall be organized into units designated as "A Units" and "B Units."
Each A Unit will consist of one each of its outstanding D Warrants, B
Warrants and C Warrants, each of which will be modified to be
exercisable as a Unit prior to June 15, 1998 at $1.00 per share each
($3.00 per A Unit). Each B Unit will consist of one each of its
outstanding A Warrants, B Warrants and C Warrants, each of which will
be modified to be exercisable as a unit prior to June 15, 1998 at $2.00
per share ($6.00 per B Unit). Any shares acquired by exercise of the A
Unit or B Unit warrants prior to June 15, 1998 shall not be subject to
adjustment under the "reverse split" as contemplated in Section 4.3(d)
below. After June 15, 1998, only the C Warrants and D Warrants shall be
valid (the A Warrants and B Warrants having expired on June 15, 1998)
and shall be exercisable solely under their original terms and subject
to the "reverse split" as contemplated under Section 4.3(d) below.
(d) Reverse Stock Split. The outstanding shares of common
stock of the corporation shall be "reverse split" on a 1 to 10 ratio
immediately following the Closing.
(e) Change of Domicile. The corporation shall be authorized at
a time after the Closing Date to merger into a newly-created wholly
owned subsidiary corporation organized under the laws of the State of
Nevada solely for the purpose of changing the domicile of Purchaser.
(f) Agreements. At the Closing, Purchaser shall (i) enter into
the Consulting Agreement with Purchaser Shareholder in form attached
hereto as EXHIBIT 4.3(f)(i) hereto and (ii) subject to the exercise of
at least 100,000 A Unit warrants (3 warrants per unit), loan Purchaser
Shareholder $50,000 upon delivery of the Promissory Note in form
attached hereto as EXHIBIT 4.3(f)(ii) and (iii) enter into the Lock-Up,
Anti-Dilution and Governance Agreement with Purchaser Shareholder and
Selling Shareholder in form as attached hereto as EXHIBIT 4.3(f)(iii).
(g) Advisory Fee. At the Closing, Purchaser shall issue
1,875,000 shares (prereverse split) of its common stock to Fox &
Company Investments, Inc. as compensation for its advisory services
rendered in connection with the transactions contemplated in this
Agreement.
ARTICLE 5
CONDITIONS PRECEDENT
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Section 5.1 Conditions Precedent to the Obligations of Purchaser.
Notwithstanding any other provision of this Agreement, the obligation of
Purchaser to consummate the transactions hereunder shall be subject to the
satisfaction on the Closing Date of the following conditions precedent, unless
waived in writing by Purchaser:
(a) Representations, Warranties and Covenants. The
representations and warranties of Seller and Selling Shareholder
contained in Article 2 hereof shall be true and correct as of the date
when made and as of the Effective Time and the Closing Date, except to
the extent necessary to reflect the consummation of the transactions
provided for herein and except as otherwise contemplated by this
Agreement. Seller and Selling Shareholder shall have duly performed and
complied with all agreements, covenants and conditions required by this
Agreement to be performed or complied with by them prior to or on the
Closing Date. Seller and Selling Shareholder shall have delivered to
Purchaser a certificate dated the day of the Closing Date to the effect
set forth in this Section 5.1(a).
(b) Licenses, Permits, Approvals, Etc. Purchaser shall have
applied for and obtained all governmental, administrative and other
licenses, permits, approvals, consents and authorizations, which, in
the opinion of Purchaser, are required or desirable in connection with
Purchaser's purchase of the Acquired Assets, and its intended use and
operation of the Acquired Assets and the Business and which could not
be transferred directly from Seller to Purchaser, all of which shall be
in full force and effect and not subject to appeal. Additionally,
Seller shall have delivered to Purchaser all governmental,
administrative and other licenses, permits, approvals, consents and
authorizations which Seller is permitted by applicable law to transfer
directly to Purchaser.
(c) Due Diligence of Purchaser. Purchaser shall have conducted
the due diligence checks as contemplated under Section 1.4 above and
shall have affirmatively elected to proceed with the transactions
contemplated under this Agreement.
(d) Shareholder Consents. The shareholders of Purchaser shall
have consented to this Agreement and approved all corporate actions of
Purchaser as required under applicable law.
(e) Consents. All required consents, authorizations and
approvals of third parties to the consummation of the transactions
contemplated hereby, and the ownership and operation of the Acquired
Assets by Purchaser, shall have been obtained by Seller in form and
substance satisfactory to Purchaser.
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(f) No Adverse Changes. There shall have been no adverse
changes in the operations, conditions (financial or otherwise),
properties, assets, business or prospects of the Business. Seller shall
have delivered to Purchaser a certificate dated the day of the Closing
Date to the effect set forth in this Section 5.1(f).
(g) Legal Matters. There shall have been furnished to counsel
for Purchaser certified copies of such corporate records of Seller and
copies of such other documents as such counsel may reasonably have
requested. All legal matters and proceedings in connection with this
Agreement and the transactions contemplated hereby shall have been
approved by such counsel.
(h) Receipt of Closing Documents. Purchaser shall have
received all of the closing documents referred to in Section 6.1
hereof.
Section 5.2 Conditions Precedent to the Obligation of Seller.
Notwithstanding any other provision of this Agreement, the obligation of Seller
to consummate the transactions contemplated hereby shall be subject to the
satisfaction on the Closing Date of the following conditions precedent, unless
waived in writing by Seller:
(a) Representations, Warranties and Covenants. The
representations and warranties of Purchaser and Purchaser Shareholder
contained in Article 3 hereof shall be true and correct in all material
respects as of the date when made and as of the Closing Date, except to
the extent necessary to reflect the consummation of the transactions
provided for herein and except as otherwise contemplated by this
Agreement. Purchaser shall have duly performed and complied with all
agreements, covenants and conditions required by this Agreement to be
performed or complied with by Purchaser prior to or on the Closing
Date. Purchaser shall have delivered to Seller a certificate dated the
day of the Closing Date to the effect set forth in this Section 5.2(a).
(b) Due Diligence of Seller. Seller shall have conducted the
due diligence checks as contemplated under Section 1.4 above and shall
have affirmatively elected to proceed with the transactions
contemplated under this Agreement.
(c) No Adverse Changes. There shall have been no adverse
changes in the operations, conditions (financial or otherwise),
properties, assets, business or prospects of the Purchaser. Purchaser
shall have delivered to Seller a certificate dated the day of the
Closing Date to the effect set forth in this Section 5.2(c).
(d) Legal Matters. There shall have been furnished to counsel
for Seller certified copies of such corporate records of Seller and
copies of such other documents as such counsel may reasonably have
requested. All legal
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matters and proceedings in connection with this Agreement and the
transactions contemplated hereby shall have been approved by such
counsel.
(e) Officers and Directors. Purchaser Shareholder shall cause
▇▇▇▇▇ ▇. ▇▇▇▇ to tender his resignation as an officer and director of
the Purchaser and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ as an officer of the Purchaser.
At the conclusion of the Closing, the following persons shall be
members of the Board of Directors and the officers of the corporation:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Chief Executive Officer, Director
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ President, Director
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Secretary
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Director
(f) Exercise of Warrants. At least 166,667 A Units, or such
lesser amount as deemed sufficient by Seller, shall have been acquired
and exercised by such persons as Seller deems appropriate.
(g) Receipt of Closing Documents. Seller shall have received
all of the closing documents referred to in Section 6.2 hereof.
ARTICLE 6
CLOSING DOCUMENTS
Section 6.1 Documents to Be Delivered by Seller. Seller agrees to
deliver to Purchaser on the Closing Date the following:
(a) Bills of Sale, Assignments and Transfers. Good and
sufficient bills of sale, certificates of title, assignments and other
instruments of transfer with covenants of warranty and good title and
in form and substance satisfactory to Purchaser as shall be necessary
or appropriate to assign and transfer to and vest in Purchaser or their
nominee or nominees good and marketable title to all the Acquired
Assets free and clear of any and all liabilities, liens, claims,
restrictions on transfer or encumbrances.
(b) Certificates. A certificate of Seller dated the Closing
Date certifying as to the matters set forth in Sections 5.1(a) and
5.1(f) hereof.
(c) Good Standing Certificate for Seller. A certificate of
good standing of Seller issued by the Corporation Commission of the
State of Arizona, dated not more than 60 days prior to the Closing
Date.
(d) Consents to Assignments. All consents of third parties
which are necessary, in the opinion of Purchaser, to effectively
transfer the Acquired
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Assets in the manner provided for herein, free and clear of all liens,
claims and encumbrances and in form and substance satisfactory to such
counsel.
(e) Certificate of Secretarial Officer of Seller. Certificate
of the Secretary of Seller dated the Closing Date with respect to
corporate proceedings authorizing this Agreement and the transactions
contemplated thereunder.
(f) Other Documents. Such other documents and showings as
shall reasonably be requested by Purchaser.
Section 6.2 Documents to Be Delivered by Purchaser. Purchaser agrees to
deliver to Seller on the Closing Date the following:
(a) Certificate. A certificate of Purchaser dated the Closing
Date certifying as to matters set forth in Section 5.2(a) hereof.
(b) Good Standing Certificate for Purchaser. A certificate of
good standing of Purchaser issued by the appropriate authority of the
State of Colorado and a certificate of authority to transact business
in the State of Arizona issued by the Arizona Corporation Commission,
dated not more than 60 days prior to the Closing Date.
(c) Opinions. An opinion of counsel to Purchaser regarding the
valid issue of the shares exchanged for the Acquired Assets and the
tradability of the shares issued upon exercise of the outstanding
warrants of Purchaser.
(d) Certificate of Secretarial Officer of Purchaser.
Certificate of the Secretary of Purchaser dated the Closing Date with
respect to corporate proceedings authorizing this Agreement and the
transactions contemplated thereunder.
(e) Other Documents. Such other documents and showings as
shall reasonably be requested by Seller.
ARTICLE 7
POST-CLOSING
Seller, Selling Shareholder, Purchaser and Purchaser Shareholder each
agree that after the occurrence of the Closing, Purchaser shall (a) within 15
days from the Closing Date merge with and into its wholly-owned subsidiary
solely to domesticate Purchaser as a Nevada corporation as contemplated under
Section 4.3(e) above and (b) on or before September 30, 1998, take such actions
as are necessary to cause the common stock of Purchaser to be registered under
the Securities Exchange Act of 1934, as amended.
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ARTICLE 8
TERMINATION, AMENDMENTS, WAIVER AND ASSIGNMENT
Section 8.1 Termination. This Agreement may be terminated at any time
prior to the Closing Date:
(a) By mutual consent of Purchaser and Seller;
(b) By Purchaser (i) if in good faith opinion of Purchaser,
upon written notice with reasonable rights to cure within a minimum of
five days from such notice, Seller has breached any of the
representations, warranties or covenants of this Agreement or (ii) if
any of the conditions precedent as set forth in Section 5.1 above have
not been performed by the Closing Date;
(c) By Seller (i) if in good faith opinion of Seller, upon
written notice with reasonable rights to cure within a minimum of five
days from such notice, Purchaser has breached any of the
representations, warranties or covenants of this Agreement or (ii) if
any of the conditions precedent as set forth in Section 5.2 above have
not been performed by the Closing Date; or
(d) By Seller in its discretion upon payment of $10,000 to
Purchaser.
Section 8.2 Effect of Termination. In the event of termination of this
Agreement pursuant to Section 8.1 hereof, there shall be no liability on the
part of either party to the other, provided, however, that (a) this Section 8.2
shall not preclude liability attaching to a party who has caused the termination
hereof by willful act or willful failure to act in violation of the terms and
provisions of this Agreement, and (b) termination of this Agreement shall not
terminate or affect the agreements of the parties hereto set forth in Sections
9.3 or 9.5 hereof.
Section 8.3 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
Section 8.4 Waiver. Any terms or provisions of this Agreement may be
waived in writing at any time by the party which is entitled to the benefits
thereof. The failure of any party at any time or times to require performance of
any provision hereof shall in no manner affect such party's right at a later
time to enforce the same. No waiver by any party of a condition or of the breach
of any term, covenant, representation or warranty contained in this Agreement,
whether by conduct or otherwise, in any one or more instances shall be deemed to
be or construed as a further or continuing waiver of any such condition or
breach or a waiver of any other condition or of the breach of any other term,
covenant, representation or warranty of this Agreement.
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Section 8.5 Assignment. This Agreement shall not be assigned by either
party without the prior written consent of the other party and any attempted
assignment without such written consent shall be null, void and without legal
effect.
ARTICLE 9
GENERAL PROVISIONS
Section 9.1 Survival of Representations and Warranties. All
representations and warranties herein made by Seller in Article 2 hereof or by
Purchaser under Article 3 hereof, shall be deemed to be remade at and survive
the Closing Date.
Section 9.2 Indemnification.
(a) Seller's Indemnification. Seller and Selling Shareholder
agree to indemnify and hold harmless Purchaser, from and against any
claim, loss, damage, cost or expense whatsoever, including attorneys'
fees and expenses of litigation, which Purchaser may incur or suffer by
reason, either directly or indirectly, of any of the following:
(i) The inaccuracy of any representation or warranty
made by Seller and Selling Shareholder hereunder;
(ii) The breach of any of the agreements or covenants
of Seller contained herein or in any certificate or other
document delivered by Seller to Purchaser in accordance with
the terms hereof
(iii) The failure of Seller to satisfy and discharge
all of the Excluded Obligations; and
(iv) All litigation, suits, claims, demands,
proceedings or matters relating, to the ownership of the
Acquired Assets or the operation of the Business on or prior
to the Closing Date. Purchaser may contest any claim or
liability which, if established, would be the subject of
indemnification hereunder, and in such event all legal fees,
disbursements and other costs and expenses of such contest
shall also be an item of indemnification by Seller and Selling
Shareholder hereunder.
(b) Purchaser's Indemnification. Purchaser and Purchaser
Shareholder agree to indemnify and hold harmless Seller from and
against, any claim, loss, damage, cost or expense whatsoever, including
attorneys' fees and expenses of litigation, which Seller may incur or
suffer by reason, either directly or indirectly of the following:
(i) The inaccuracy of any representation or warranty
made by Purchaser hereunder;
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(ii) The breach of any of the agreements or covenants
of Purchaser contained herein or in any certificate or other
document delivered by Purchaser to Seller in accordance with
the terms hereof, and
(iii) The failure of Purchaser to satisfy and
discharge the Assumed Obligations.
Seller may contest any claim or liability which, if established, would
be the subject of indemnification hereunder, and in such event all
legal fees, disbursements and other costs and expenses of such contest
shall also be an item of indemnification by Purchaser hereunder.
Section 9.3 Brokerage Commission. Except for the transfer of shares to
Fox & Company Investments, Inc. in accordance with Section 4.3(g) hereof, each
party hereto represents and warrants that it has not had any negotiations or
dealings with any advisors, brokers or finders, and that no obligation or
liability, contingent or otherwise, for advisory, brokerage or finder's
commissions or fees has been incurred in connection with the transactions
contemplated hereunder. The parties each further agree to indemnify and hold the
other harmless from and against the claims of any person, firm or corporation
claiming any brokerage commission, finder's fee or similar compensation based on
any alleged negotiations or dealings with the indemnity contrary to the
foregoing representations.
Section 9.4 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally or mailed
by registered or certified mail (return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be specified
by such party by like notice):
If to Seller or Selling Shareholder:
Genras, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
If to Purchaser:
Vinculum, Incorporated
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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If to Purchaser Shareholder:
Aztore Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Written notice given by any other method shall be deemed effective only when
actually received by the party to whom given.
Section 9.5 Expenses. Except as set forth below, the parties shall bear
their own respective legal, accounting, title and other related expenses in
connection with this Agreement and the sale and purchase provided for hereunder.
In the event of termination of this Agreement under Section 8.1(a) or (b),
Seller agrees to reimburse Purchaser $10,000 for legal fees incurred in
connection with preparation of this Agreement and the transactions and corporate
actions contemplated hereunder.
Section 9.6 Legal Representation. The parties hereto acknowledge that
the law firm of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A. has represented Purchaser in
connection with the negotiation and consummation of this Agreement and the
transactions contemplated herein. Each party has been advised to, and has to the
extent deemed necessary, seek independent legal and accounting advice in
connection with this Agreement and the transactions contemplated herein.
Section 9.7 Further Assurances. After the Closing Date, Seller, at its
own expense, shall do, execute, acknowledge and deliver all further acts,
conveyances, transfers, documents and assurances necessary or proper to vest in
Purchaser good title to the Acquired Assets, free and clear of any liens,
claims, charges or encumbrances whatsoever, and otherwise to effect such sale in
accordance with the provisions of this Agreement.
Section 9.8 Miscellaneous. This Agreement (a) constitutes the entire
agreement and supersedes all other prior agreements and undertakings, both
written and oral, between the parties, with respect to the subject matter
hereof; (b) is not intended to confer upon any other person any rights or
remedies hereunder; (c) shall be binding upon and inure to the benefit of
Purchaser and Seller, and their respective successors and assigns; and (d) shall
be governed in all respects, including validity, interpretation and effect, by
the laws of the State of Arizona as applied without regard to conflict of law
principles. This Agreement may be executed in counterparts which together shall
constitute a single agreement. Article headings and Section headings as
contained in this Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of this Agreement.
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Section 9.9 Gender. Where in this Agreement masculine pronouns are
used, such words shall be considered feminine or neuter pronouns where the
context indicates the propriety of such use.
Section 9.10 Illegality. In the event that any provision of this
Agreement shall be held to be invalid, illegal or unenforceable, such provision
shall be deemed modified to the least extent necessary to cause such provision
to be valid, legal or enforceable, and the validity, legality and enforceability
of the other provisions of the Agreement shall not be affected or impaired
thereby.
Section 9.11 Effect of Attachments. Each Schedule and Exhibit referred
to herein shall be deemed a part of this Agreement to the same extent as if each
such Schedule and Exhibit was set forth herein in its entirety.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, all as of
the date first written above.
SELLER:
GENRAS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Executive Officer
Attest:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary
SELLING SHAREHOLDER:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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PURCHASER:
VINCULUM INCORPORATED
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
Attest:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇, Secretary
PURCHASER SHAREHOLDER:
AZTORE HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
Attest:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇, Secretary
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