STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is entered
into as of this 10th day of April, 2007 between and among
Aquacell Water, Inc., a Delaware corporation with principal
offices at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
("Aquacell" or "Purchaser"), McPhee Environmental Supply, L.L.C.,
an Arizona corporation with offices at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("McPhee" or the
"Company"), and its Unit Holders (the "Unit Holders").
R E C I T A L S
WHEREAS, the Unit Holders own all of the issued and
outstanding capital stock of the Company (the "Shares"); and
WHEREAS, the Unit Holders desire to sell to the Purchaser
and the Purchaser desires to purchase from the Unit Holders the
Shares in accordance with and subject to the terms and conditions
of this Agreement.
NOW, THEREFORE, in consideration of the preceding recitals
and the mutual representations, warranties, covenants and
agreements set forth herein, and for other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
I. SALE AND PURCHASE OF STOCK
1.1 Agreement to Sell and Purchase Stock. For the
consideration hereinafter provided and subject to the terms and
conditions of this Agreement, at the Closing (as defined in
Section 1.3 below) the Unit Holders shall sell, assign, transfer,
convey and deliver to the Purchaser, free and clear of all liens,
charges, claims or encumbrances, and the Purchaser shall purchase
and acquire from the Unit Holders their Shares. At the Closing,
the Unit Holders shall cause to be delivered to the Purchaser a
certificate representing the Shares, together with accompanying
signed stock power or instrument of assignment, duly endorsed in
blank for the transfer of the Shares to the Purchaser with all
necessary transfer taxes paid or other revenue stamps affixed
thereto.
1.2 Purchase Price. At the Closing, subject to the terms
and conditions of this Agreement, the Purchaser agrees
to pay to the Unit Holders, the aggregate purchase
price for the Shares, the components of which are as
follows:
(a) One million Five Hundred Thousand (1,500,000)
Shares of Aquacell Common Stock;
(b) Forty Thousand Dollars ($40,000) Cash;
(c) An additional Two-hundred Thousand Dollars
($200,000) Cash in an earn out to be paid
quarterly over a 12 month period from the date
of Closing, subject to adjustment as set forth
on "Exhibit A";
(d) An additional One Million Five Hundred Thousand
(1,500,000) Shares of Aquacell Common Stock to
be paid quarterly over a 12 month period from
the date of Closing, subject to adjustment as
set forth on "Exhibit A".
1.3 Closing. The closing of the sale and purchase of the
Shares under and in accordance with this Agreement (the
"Closing") shall take place at a mutually agreed upon location on
or before April 18, 2007, or such later date as may be mutually
agreed to in writing by the parties hereto (the "Closing Date").
Each party shall be responsible for its own attorneys' fees,
accountants' and other advisory fees associated with the Closing.
II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
AND THE UNIT HOLDERS
As an inducement to the Purchaser to enter into this
Agreement and to purchase the Shares, the Unit Holders solely
with respect to the matters set forth in Sections 2.1, 2.5, and
2.14 through 2.17 and the Company jointly and severally represent
and warrant to the Purchaser as set forth in this Article II.
The representations and warranties provided in Sections 2.1, 2.5
and 2.14 through 2.17 which are made without limitation, shall be
limited to the knowledge of the Unit Holders after reasonable
inquiry.
2.1 Ownership of Company Shares. The Unit Holders are the
owners of all right, title and interest (legal, record and
beneficial) in and to the Shares described in Schedule 2.1 of the
disclosure schedules attached to this Agreement (the "Disclosure
Schedules"), free and clear of any and all liens, charges,
claims, encumbrances or restrictions of any nature whatsoever
(except for any restrictions on transfer imposed by any federal
securities laws or state blue sky laws). The delivery to the
Purchaser of the Shares pursuant to and in accordance with the
provisions of this Agreement will transfer to the Purchaser good
and marketable title in and to all such Shares free and clear of
any and all liens, charges, claims encumbrances or restrictions
of any kind or nature whatsoever. Except as specifically
contemplated in this Agreement, no person or entity has any
interest, agreement, option, right, participation or privilege
(whether preemptive or contractual) capable of becoming an
agreement or option for the purchase of any of the Shares, or any
interest therein, from the Unit Holders. The Shares have been
legally and validly issued and are fully paid and nonassessable,
and were issued pursuant to a valid exemption from registration
under (i) the Securities Act of 1933, as amended, and (ii) all
applicable state securities laws. The Shares represent all of
the issued and outstanding shares of capital stock of the
Company. No shares of the Company's common stock are owned by
the Company in treasury. None of the Shares have been issued or
disposed of in violation of any preemptive rights, rights of
first refusal or similar rights of the Unit Holders. Other than
the Shares, the Company has no securities, bonds, debentures,
notes or other obligations the holders of which have the right to
vote (or are convertible into or exercisable for securities
having the right to vote) with the Unit Holders on any matter.
2.2 Transactions in Capital Stock. The Company has no
obligation (contingent or otherwise) to purchase, redeem or
otherwise acquire any of its equity securities or any interests
therein or to pay any dividend or make any distribution in
respect thereof.
2.3 Organization and Good Standing: Qualification. The
Company is a corporation duly organized, validly existing and in
good standing under the laws of its state of incorporation, with
all requisite corporate power and authority to own, operate and
lease its assets and properties and to carry on its business as
currently conducted. The Company is in good standing in each
jurisdiction where the character of the property owned or leased
by it or the nature of its activities makes such qualification
necessary. Copies of the Articles of Organization of the
Company, as amended or restated, and the Bylaws of the Company,
as amended or restated, and copies of the corporate minutes of
the Company, all of which have been or will be made available to
the Purchaser for review, are true and complete as in effect on
the date of this Agreement and the Closing Date, and in the case
of the corporate minutes, accurately reflect all material
proceedings of the Unit Holders and Directors of the Company (and
all committees thereof). The stock record books of the Company,
which have been or will be made available to the Purchaser for
review, contain true, complete and accurate records of the stock
ownership of record of the Company and the transfer record for
all of its capital stock.
2.4 Authorization and Validity. The Company and the Unit
Holders have all requisite power and authority to enter into this
Agreement and all other agreements entered into in connection
with the transactions contemplated hereby and to consummate the
transactions contemplated hereby and thereby. The execution,
delivery and performance by the Company of this Agreement and the
transactions contemplated herein are within the Company's
respective corporate powers and have been duly authorized by all
necessary action on the part of the Company's Board of Directors.
This Agreement has been duly executed by the Company and the Unit
Holders, and this Agreement and all other agreements and
obligations entered into and undertaken in connection with the
transactions contemplated hereby to which the Company or the Unit
Holders is a party constitute, or upon execution will constitute,
valid and binding agreements of such parties, enforceable against
such parties in accordance with their respective terms, except as
enforceability may be limited by bankruptcy or other laws
affecting the enforcement of creditors' rights generally, or by
general equity principles, or by public policy.
2.5 Absence of Conflicting Agreements or Required Consents.
Except as set forth on Schedule 2.5, the execution, delivery and
performance of this Agreement by the Company and the Unit Holders
and any other documents contemplated hereby (with or without the
giving of notice, the lapse of time, or both): (i) does not
require the consent of any governmental or regulatory body or
authority or any other third party; (ii) will not conflict with
any provision of the Company's Articles of Organization, as
amended or restated, or Bylaws, as amended or restated; (iii)
will not conflict with result in a violation of, or constitute a
default under any law, ordinance, regulation, ruling, judgment,
order or injunction of any court or governmental instrumentality
to which the Company or the Unit Holders is a party or by which
the Company or the Unit Holders or any of their properties are
subject or bound; (iv) will not conflict with, constitute grounds
for termination of, result in a breach of, constitute a default
under, require any notice under, or accelerate or permit the
acceleration of any performance required by the terms of any
agreement, instrument, license or permit, material to this
transaction, to which the Company or the Unit Holders are a party
or by which the Company or the Unit Holders or any of their
properties are bound; and (v) will not create any encumbrance or
restriction upon any of the assets or properties of the Company
or the Unit Holders.
2.6 Absence of Changes. Except as permitted or
contemplated by this Agreement, the Company has conducted its
business only in the ordinary course and has not:
(a) suffered any changes in its working capital,
condition (financial or otherwise), assets, liabilities,
reserves, business or operations (whether or not covered by
insurance) that individually or in the aggregate has had or could
reasonably be expected to have a material adverse effect on the
Company's business, prospects or results of operations ("Material
Adverse Effect");
(b) paid, discharged or satisfied any material
liability, other than the payment, discharge or satisfaction of
liabilities in the ordinary course of business;
(c) written off as uncollectible any receivable,
except for write-offs in the ordinary course of business;
(d) except in the ordinary course of business and
consistent with past practice, canceled or compromised any debts
or waived or permitted to lapse any claims or rights or sold,
transferred or otherwise disposed of any of its properties or
assets;
(e) entered into any commitment or transaction not in
the ordinary course of business that is material to the Company,
taken as a whole, or made any capital expenditure or commitment
in excess of $25,000;
(f) made any material changes in any method of
accounting or accounting practice, credit practices, collection
policies, or payment policies;
(g) except in the ordinary course of business
consistent with past practice, incurred any liabilities or
obligations (absolute, accrued or contingent) in excess of
$25,000;
(h) mortgaged, pledged, subjected or agreed to
subject, any of its assets, tangible or intangible, to any claim
or encumbrance, except for liens for current personal property
taxes not yet due and payable for mechanics, landlords,
materialmen, and other statutory liens, purchase money security
interests, sale-leaseback interests granted and all other
encumbrances granted in similar transactions;
(i) sold, redeemed, acquired or otherwise transferred
any equity or other interest in itself;
(j) increased any salaries, wages or any employee
benefits for any employee of the Company, except in the ordinary
course of business and consistent with past practice;
(k) hired, committed to hire or terminated any
employee except in the ordinary course of business;
(l) declared, set aside or made any payments,
dividends or other distributions to any Unit Holders, employee,
independent contractor or any other holder of capital stock of
the Company other than in accordance with customary and past
practices pursuant to existing agreements; or
(m) agreed, whether in writing or otherwise, to take
any action described in this Section.
2.7 Litigation and Claims. There are no claims, lawsuits,
actions, arbitrations, administrative or other proceedings,
governmental investigations or inquiries pending or, to the
knowledge of the Company or the Unit Holders, threatened against,
or affecting the Company, the Unit Holders, any Company employee
or any other individual affiliated with the Company affecting or
that would reasonably be likely to affect the Company, the value
of the Shares of the operations, business condition, (financial
or otherwise), results of operations or prospects of the Company.
2.8 Environmental Matters. Except as set forth on Schedule
2.8:
(a) the Company has not within the five years
preceding the date hereof, through the Closing Date, received
from any federal, state or local governmental body, agency,
authority or entity, or any other person, any written notice,
demand, citation, summons, complaint or order or any notice of
any penalty, lien or assessment, and to the knowledge of the
Company or the Unit Holders no investigation or review is pending
by any governmental entity, with respect to any (i) alleged
violation by the Company of any Environmental Law (as defined
below); (ii) alleged failure by the Company to have any
environmental permit, certificate, license, approval,
registration or authorization required pursuant to any
Environmental Law in connection with the conduct of its business,
or (iii) alleged illegal Regulated Activity (as defined below) by
the Company;
(b) the Company has not engaged in any activity or
failed to undertake any activity which action or failure to act
has given, or would reasonably be likely to give, rise to any
Environmental Liabilities or enforcement action by any federal,
state or local regulatory agency or authority, or has resulted,
or would reasonably be likely to result, in any fine or penalty
imposed pursuant to any Environmental Law;
(c) to the knowledge of the Company or the Unit
Holders, there is no friable asbestos in or on the Company's
owned or leased premises;
(d) to the knowledge of the Company or the Unit
Holders, no soil or water in or under any assets currently or
formerly held for use or sale by the Company is or has been
contaminated by any Hazardous Substance (as defined below) while
such assets or premises were owned, leased or operated, directly
or indirectly by the Company, where such contamination had, or
would be reasonably likely to have, a Material Adverse Effect;
and
(e) there have been no environmental audits and other
similar reports which have been prepared by, for or, to the
knowledge of the Company or the Unit Holders, concerning the
Company within the five years preceding the date hereof through
the Closing Date with respect to any real property now or
previously owned or leased by the Company or any of its
predecessors.
For the purpose of this Section 2.8 the following terms
have the following meanings:
"Environmental Laws" shall mean any federal, state or local
laws, ordinances, codes, regulations, rules, policies and orders
that are intended to assure the protection of the environment, or
that classify, regulate, call for the remediation of, require
reporting with respect to, or list or define air, water,
groundwater, solid waste, hazardous, toxic, or radioactive
substances, materials, wastes, pollutants or contaminants, or
which are intended to assure the safety of employees, workers or
other persons, including the public in each case as in effect on
the date hereof;
"Environmental Liabilities" shall mean all liabilities of
the Company, whether contingent or fixed, which (i) have arisen,
or would reasonably be likely to arise, under Environmental Laws
and (ii) relate to actions occurring or conditions existing on or
prior to the date hereof or the Closing Date;
"Hazardous Substances" shall mean any toxic or hazardous
substances, material or waste or any pollutant or contaminant, or
infectious or radioactive substance or material, including
without limitation, those substances, materials and wastes
defined in or regulated under any Environmental Laws; and
"Regulated Activity" shall mean any generation, treatment,
storage, recycling, transportation, disposal or release of any
Hazardous Substances.
2.9 Licenses and Authorizations. The Company and each of
its employees or independent contractors is the holder of all
valid licenses, approvals, orders, consents, permits,
registrations, qualifications and other rights and authorizations
required by law, ordinance, regulation or ruling of any
governmental regulatory authority necessary to operate
its/his/her business. A true, correct and complete list of such
licenses, permits and other authorizations (if any), is set forth
on Schedule 2.9, true, complete and correct copies of which have
been provided to the Purchaser. No violation, default, order or
deficiency exists with respect to any of the items listed on
Schedule 2.9.
2.10 Proprietary Rights and Information.
(a) Set forth on Schedule 2.10 is a complete and
accurate list and summary description of the following: (i) all
trademarks (registered and unregistered), trade-names, service
marks and other trade designations, including common law rights,
registrations and applications therefor, currently owned in whole
or part, or used by the Company, (ii) all patents and
applications therefor and inventions and discoveries that may be
patentable currently owned, in whole or in part, or used by the
Company, (iii) all licenses, royalties, and assignments thereof
to which the Company is a party (iv) all copyrights (for
published and unpublished works) currently owned in whole or
part, or used by the Company and (v) other similar agreements
relating to the foregoing to which the Company is a party
(including expiration date if applicable) (collectively, the
"Proprietary Rights").
(b) Set forth on Schedule 2.10 is a complete and
accurate list and summary description of all agreements relating
to technology, trade secrets, know-how or processes that the
Company is licensed or authorized to use by others (other than
technology, know-how or processes that are generally available)
or which it licenses or authorizes others to use, true, correct
and complete copies of which have been provided to the Purchaser.
Except as set forth on Schedule 2.10, there are no outstanding
and, to the Company's knowledge or knowledge of the Unit Holders,
any threatened disputes or disagreements with respect to any such
agreement.
(c) Except as set forth on Schedule 2.10 (i) the
Company owns or has the legal right to use the Proprietary Rights
without conflicting with, infringing or violating the rights of
any other person; (ii) no consent of any person will be required
for the use thereof by the Purchaser upon consummation of the
transactions contemplated hereby and the Proprietary Rights are
freely transferable; (iii) to the knowledge of the Company or the
Unit Holders, no claim has been asserted by any person to the
ownership of or for infringement by the Company of any
Proprietary Right of any other person and neither the Company nor
the Unit Holders is aware of any valid basis for any such claim;
(iv) to the knowledge of the Company or the Unit Holders, no
proceedings have been threatened which challenge the Proprietary
Rights of the Company; and (v) the Company has the right to use,
free and clear of any adverse claims or rights of others, all
trade secrets, customer lists and proprietary information
required for the performance and marketing of its business.
2.11 Agreements in Full Force and Effect. All
contracts, agreements, plans, leases, policies and licenses
referred to, or required to be referred to, in the Disclosure
Schedules are valid and binding, and are in full force and effect
and are enforceable in accordance with their terms, except to the
extent that the validity or enforceability thereof may be limited
by bankruptcy or other laws affecting the enforcement of
creditors' rights generally, or by general equity principles, or
by public policy. Except as set forth on Schedule 2.11, there is
no pending or, to the knowledge of the Company and the Unit
Holders, threatened bankruptcy, insolvency or similar proceeding
with respect to any other party to such agreements, and no event
has occurred which (whether with or without notice, lapse of time
or the happening or occurrence of any other event) would
constitute a default thereunder by the Company or any other party
thereto. The premises occupied by the Company under its current
lease are owned by the Unit Holders. The Purchaser agrees to
enter into a new five (5) year lease agreement with the Unit
Holders. (See Section 6.5)
2.12 Financial Statements. Attached hereto as part of
the Disclosure Schedules are the Company's financial statements.
The Company's financial statements have been prepared in
accordance with generally accepted accounting principles
consistently applied (except as may be indicated therein or in
the notes thereto), present fairly the financial position of
Company as of the dates indicated and present fairly the results
of the Company's operations for the period then ended, and are in
accordance with the books and records of the Company, which have
been properly maintained and are complete and correct in all
material respects. The Company's financial statements present
fairly the financial position of the Company and its subsidiaries
as at the dates thereof and the results of its operations and
changes in financial position for the periods then ended other
than as provided on Schedule 2.12.
2.13 Backlog. Set forth on Schedule 2.13 is the
backlog of orders that the Company is to ship or contract work to
be performed as of the date hereof (the "Backlog"). The Company
either possesses sufficient inventory of parts, materials and
personnel to produce the same within their scheduled delivery
dates or such parts or materials have lead times such that the
Company can acquire such parts and materials in time to produce
and ship or perform such backlog in accordance with the scheduled
performance dates.
2.14 Purchase for Investment. The Unit Holders
acknowledge that they are acquiring the Purchaser Shares for
their own account and not with a view to, or present intention
of, distribution thereof in violation of the Securities Act of
1933, as amended (the "1933 Act") or any state securities laws,
and the Purchaser Shares will not be disposed of in contravention
of the 1933 Act or state securities laws.
2.15 Purchaser's Stock Not Registered. The Unit
Holders acknowledge that the Purchaser Shares being acquired
hereunder have not been registered under the 1933 Act or any
state securities laws and, therefore, cannot be sold, and must be
held indefinitely, unless subsequently registered under the 1933
Act and state securities laws or unless an exemption from such
registration is available, including without limitation an
exemption pursuant to Rule 144 under the 1933 Act. Certificates
for the Purchaser Shares shall bear the following legends:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS. THE SHARES
REPRESENTED HEREBY CANNOT BE SOLD, TRANSFERRED,
ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE
WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS AND WILL NOT BE TRANSFERRED OF RECORD EXCEPT IN
COMPLIANCE WITH SUCH ACT AND LAWS.
2.16 Economic Risk. The Unit Holders acknowledge that
their investment in the Purchase Shares involves a high degree of
risk and represents that he is able to bear the economic risk of
such investment in the Purchaser Shares for an indefinite period
of time.
2.17 Access to Information. The Unit Holders
acknowledge that they have made such investigations and inquiries
as he has deemed necessary for the purpose of informing himself
about the Purchaser and its business prior to entering into this
Agreement.
2.18 No Undisclosed Liabilities. The Company does not
have any liabilities or obligations of any nature, whether
accrued, absolute, contingent or otherwise, asserted or
unasserted, except for liabilities or obligations reflected or
reserved against in the Company's current balance sheet.
III. REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to the Company and the Unit Holders to
enter into this Agreement and to sell the Shares, the Purchaser
hereby represents and warrants as follows:
3.1 Organization and Good Standing: Qualification. The
Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of the state of Delaware, with
all requisite corporate power and authority to own, operate and
lease its assets and properties and to carry on its business as
currently conducted. The Purchaser is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction where the character of the property owned or leased
by it or the nature of its activities makes such qualification
necessary, except where such failure to be so qualified or in
good standing would not have a Material Adverse Effect on the
Purchaser. Copies of the Purchaser's Certificate of
Incorporation and Bylaws, as amended or restated, and copies of
the Purchaser's corporate minutes regarding this Agreement and
the transactions contemplated hereby, all of which have been or
will be made available to the Company for review, are true,
correct and complete as in effect on the date of this Agreement
and accurately reflect all material proceedings of the
stockholders and directors of the Purchaser (and all committees
thereof) regarding this Agreement and the transactions
contemplated hereby. The Purchaser is a fully reporting public
company, delinquent in its Exchange Act filings.
3.2 Authorization and Validity. The Purchaser has all
requisite corporate power to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The
execution, delivery and performance by the Purchaser of this
Agreement and the agreements provided for herein, and the
consummation by the Purchaser of the transactions contemplated
hereby are within the Purchaser's corporate powers and have been
duly authorized by all necessary action on the part of the
Purchaser's Board of Directors.
IV. COVENANTS OF THE COMPANY AND THE UNIT HOLDERSS
4.1 Conduct of the Company. The Company and the Unit
Holders shall, in all material respects, conduct the business of
the Company in the ordinary and usual course consistent with past
practices and shall use reasonable efforts to; (i) preserve
intact its business and its relationships, including without
limitation referral sources, customers, suppliers, employees and
others having business relations with it; (ii) maintain and keep
its properties and assets in good repair and condition consistent
with past practice as is material to the conduct of the business
of the Company; and (iii) continuously maintain insurance
coverage substantially equivalent to the insurance coverage in
existence on the date hereof.
In addition, without the written consent of the
Purchaser, neither the Company nor the Unit Holders shall:
(a) amend its Articles of Organization or Bylaws, as
amended or restated, or other charter documents;
(b) issue, sell or authorize for issuance or sale,
shares of any class of the Company's securities (including, but
not limited to, by way of stock split, dividend, recapitalization
or other reclassification) or any subscriptions, options,
warrants, rights or convertible securities, or enter into any
agreements or commitments of any character obligating the Company
or the Unit Holders to issue or sell any such securities;
(c) redeem, purchase or otherwise acquire, directly or
indirectly, any shares of the Company's capital stock or any
option, warrant or other right to purchase or acquire any such
shares;
(d) declare or pay any dividend or other distribution
(whether in cash, stock or other property) with respect to the
Company's capital stock (except as expressly contemplated
herein);
(e) voluntarily sell, transfer, surrender, abandon or
dispose of any of its assets or property rights (tangible or
intangible) other than in the ordinary course of business
consistent with past practices;
(f) grant or make any mortgage or pledge or subject
the Company or any of its properties or assets to any lien,
charge or encumbrance of any kind, except liens for taxes not
currently due and except for liens which arise by operation of
law;
(g) voluntarily incur or assume any liability or
indebtedness (contingent or otherwise) with respect to the
Company, except in the ordinary course of business or which is
reasonably necessary for the conduct of the Company's business;
(h) make or commit to make any capital expenditures by
the Company which are not reasonably necessary for the conduct of
the Company business;
(i) grant any increase in the compensation payable or
to become payable to directors, officers, consultants or
employees of the Company other than merit increases to employees
of the Company who are not directors or officers of the Company,
except in the ordinary course of business and consistent with
past practices;
(j) change in any manner any accounting principles or
methods of the Company other than changes which are consistent
with generally accepted accounting principles;
(k) enter into any material commitment or transaction
by or on behalf of the Company other than in the ordinary course
of business;
(l) take any action which could reasonably be expected
to have a Material Adverse Effect on the Company;
(m) apply any of the Company's assets to the direct or
indirect payment, discharge, satisfaction or reduction of any
amount payable directly or indirectly to or for the benefit of
any affiliate of the Company, other than in the ordinary course
and consistent with past practices;
(n) take any action at the Board of Director or
Shareholder level to (in any way) amend, revise or otherwise
affect the prior corporate approval and effectiveness of this
Agreement, any of the agreement attached as exhibits hereto or
the transactions contemplated hereby, other than as required to
discharge its or their fiduciary duties; or
(o) agree, whether in writing or otherwise, to do any
of the foregoing.
4.2 Title of Assets: Indebtedness. From and as of the date
of this Agreement, the Company shall (i) except for sales of
assets held as inventory, if any, in the ordinary course of
business and except as otherwise specifically described in the
Disclosure Schedules to this Agreement, have good and valid title
to all of its assets free and clear of all encumbrances of any
nature whatsoever, except for current year ad valorem taxes and
liens which arise by operation of law, and (ii) have no direct or
indirect indebtedness except for indebtedness disclosed in the
Company's financial statements, the Disclosure Schedules or
normal and recurring accrued obligations of the Company arising
in connection with its business operations in the ordinary course
of business and which arise from the purchase of merchandise,
supplies, inventory and services used in connection with the
provision of services. Notwithstanding any other provision in
this Agreement to the contrary, from and as of the date of this
Agreement, the Company shall not incur any single expense or
indebtedness in excess of $50,000 without the prior written
consent of the Purchaser, except for expenses or indebtedness
incurred in the ordinary course of business consistent with
historic practices of the Company.
4.3 Access. At all times prior to the Closing Date, the
Purchaser's employees, attorneys, accountants, agents and other
authorized and designated representatives will be allowed full
access upon reasonable prior notice and during regular business
hours (and at such other times as the parties may reasonably
agree) to the properties, books and records of the Company,
including, without limitation, deeds, title documents, leases,
customer lists, insurance policies, minute books, share
certificate books, share registers, accounts, tax returns,
financial statements and all other data that, in the reasonable
opinion of the Purchaser, are required for the Purchaser to make
such investigation as it may desire of the properties and
business of the Company. The Purchaser shall also be allowed
full access upon reasonable prior notice and during regular
business hours (and at such other times as the parties may
reasonably agree) to consult with the officers, employees (after
announcement by the Company of this Agreement to its employees),
accountants, counsel and agents of the Company in connection with
such investigation of the properties and business of the Company.
No investigation by the Purchaser shall diminish or otherwise
affect any of the representations, warranties, covenants or
agreements of the Company or the Unit Holders under this
Agreement. Any access or investigation referred to in this
Section 4.3 shall be conducted in such a manner as to minimize
the disruption to the Company's ongoing business operations.
4.4 Compliance with Obligations. Prior to the Closing
Date, the Company shall comply in all material respects with (i)
all applicable federal, state, local and foreign laws, rules and
regulations; (ii) all material agreements and obligations,
including without limitation, its Articles of Organization,
Bylaws or other charter documents, as amended or restated, by
which it or its properties or its assets (real, personal or
mixed, tangible or intangible) may be bound; and (iii) all
decrees, orders, writs, injunctions and judgments applicable to
the Company, and its respective properties or assets.
4.5 Notice of Certain Events. The Company and the Unit
Holders shall promptly notify the Purchaser of:
(a) any notice or other communication from any person
or entity alleging that the consent of such person or entity is
or may be required in connection with the transactions
contemplated by this Agreement;
(b) any employment of any new non-hourly employee by
the Company who is expected to receive any annualized
compensation in 2007 of $50,000 or more:
(c) any termination of employment by, or threat to
terminate employment received from, any salaried or non-hourly
employee of the Company;
(d) any notice or other communication from any
governmental or regulatory agency or authority in connection with
the transactions contemplated by this Agreement;
(e) any actions, suits, claims, investigations or
proceedings commenced or threatened against, relating to or
involving or otherwise affecting the Company which, if pending on
the date of this Agreement, would have been required to have been
disclosed to the Purchaser hereunder or which relate to the
consummation of the transaction contemplated by this Agreement;
(f) any material adverse change in the operation of
the Company's business; and
(g) any notice or other communication indicating a
material deterioration in any material relationship of the
Company, including without limitation any relationship with any
customer, supplier or key employee of the Company.
4.6 Obligations of Company and the Unit Holders. The
Company and the Unit Holders will take all action reasonably
necessary to cause the Company and the Unit Holders to perform
their obligations under this Agreement and all related agreements
and to consummate the transactions contemplated hereby on the
terms and conditions set forth in this Agreement and such
agreements.
4.7 Funding of Accrued Employee Benefits. The Company
hereby covenants and agrees that it will take whatever steps are
necessary to pay for or fund completely any accrued benefits,
where applicable, or vested accrued benefits for which the
Company or any entity might have any liability whatsoever arising
from any tax-qualified plan as required under applicable law.
The Company acknowledges that the purpose and intent of this
covenant is to assure that the Purchaser shall have no liability
whatsoever at any time after the Closing Date with respect to any
such tax-qualified plan, unless such plan is merged with a plan
sponsored by the Purchaser.
4.8 Accounting and Tax Matters. The Company will not
change in any material respect the accounting methods or
practices followed by the Company (including any material change
in any assumption underlying, or any method of calculating, any
bad debt, contingency or other reserve), except as may be
required by generally accepted accounting principles. The
Company will not make any material tax election except in the
ordinary course of business consistent with past practice, change
any material tax election already made, adopt any tax accounting
method exception the ordinary course of business consistent with
past practice, change any tax accounting method, enter into any
closing agreement, settle any tax claim or assessment or consent
to any tax claim or assessment or any waiver of the statute of
limitations for any such claim or assessment. The Company will
duly, accurately and timely (without regard to any extensions of
time) file all returns, information statements and other
documents relating to taxes of the Company required to be filed
by it, and pay all taxes required to be paid by it, on or before
the Closing Date.
V. COVENANTS OF PURCHASER
The Purchaser agrees that between the date hereof and the
Closing:
5.1 Consummation of Agreement. The Purchaser will take all
action reasonably necessary to perform its obligations under this
Agreement and all related agreements and to consummate the
transactions contemplated hereby on the terms and conditions set
forth in this Agreement and such agreements.
5.2 Access. The Purchaser shall, at reasonable times
during normal business hours and on reasonable notice, permit the
Company, the authorized representatives of the Company and the
Unit Holders reasonably access to, and make available for
inspection, all of the assets and business of the Purchaser, and
permit the Company, its authorized representatives and the Unit
Holders to inspect and, make copies of all documents, records and
information with respect to the affairs of the Purchaser as the
Company, its representatives or the Unit Holders may reasonably
request, all for the sole purpose of permitting the Company or
the Unit Holders to become familiar with the business and assets
and liabilities of the Purchaser. No investigation by the
Company or the Unit Holders shall diminish or otherwise affect
any of the representations, warranties, covenants or agreements
of the Purchaser under this Agreement.
5.3 Notice of Certain Events. The Purchaser will promptly
inform the Company and the Unit Holders in writing of (i) any
notice of, or other communication relating to, a default or event
that, with notice or lapse of time or both, would become a
default, received by the Purchaser subsequent to the date of this
Agreement and on or prior to the Closing Date under any contract,
agreement or investment material to the Purchaser's condition
(financial or otherwise), operations, assets, liabilities or
business and to which it is subject; or (iii) any material
adverse change in the Purchaser's condition (financial or
otherwise), operations, assets, liabilities or business.
VI. CONDITIONS TO OBLIGATIONS OF THE COMPANY
AND THE UNIT HOLDERS
The Obligations of the Unit Holders to sell the Shares and
of the Company to transfer the Shares on its books and records
pursuant to this Agreement are subject to the satisfaction, at or
prior to Closing, of each of the following conditions, any one or
more of which may be waived at the sole option of the Unit
Holders or the Company with regard to their respective
obligations to close pursuant to this Agreement:
6.1 Representations and Warranties. The representations
and warranties of the Purchaser contained in this Agreement shall
be true and correct in all material respects when initially made
and as of the Closing Date.
6.2 Covenants. The Purchaser shall have performed and
complied in all material respects with all covenants required by
this Agreement to be performed and complied with by the Purchaser
prior to the Closing Date.
6.3 Proceedings. No action, proceeding or order by any
court or other governmental agency or body shall have been
instituted, threatened whether orally or in writing, or entered
concerning the Purchaser or its business or restraining any of
the transactions contemplated by this agreement.
6.4 Government Approvals and Required Consents. All
necessary consents of and filings with any governmental authority
or agency or other person required to be made or obtained by the
Purchaser relating to the consummation of the transactions
contemplated in this Agreement shall have been obtained or made
and no action or proceeding shall have been instituted or
threatened which could materially affect, restrain or prohibit
any of the transactions contemplated by this Agreement.
6.5 Closing Deliveries. The Unit Holders and the Company
shall have received all schedules, documents, certificates,
instruments, assignments and agreements referred to in Section
8.2 hereof, duly executed and delivered in form reasonably
satisfactory to the Unit Holders and the Company.
6.6 Other Documents. The Unit Holders and the Company
shall have received all such other certificates, instruments or
documents that are reasonably requested by the Unit Holders, the
Company or their counsel in order to consummate the transactions
contemplated herein.
VII. CONDITIONS TO OBLIGATIONS OF THE PURCHASER
The obligation of the Purchaser to acquire the Shares
pursuant to this Agreement is subject to the satisfaction, at or
prior to Closing, of each of the following conditions, any one or
more of which may be waived at the sole options of the Purchaser:
7.1 Representations and Warranties. The representations
and warranties of the Company and the Unit Holders contained in
this Agreement shall be true and correct in all material respects
when initially made and as of the Closing Date.
7.2 Covenants. The Company and the Unit Holders shall have
performed and complied in all material respects with all
covenants required by this Agreement to be performed and complied
with by the Company or the Unit Holders, respectively, prior to
the Closing date.
7.3 Proceedings. No action, proceeding or order by any
court or other governmental agency or body shall have been
instituted, threatened whether orally or in writing, or entered
concerning the Company or its business or restraining any of the
transactions contemplated in this Agreement.
7.4 No Material Adverse Effect. No material adverse change
in the results of operations, assets, properties, financial
condition, business or prospects of the Company shall have
occurred, and the Company shall not have suffered any material
loss or damages to any of its properties or assets, whether or
not covered by insurance and whether or not such change shall
have been caused by the deliberate act or omission of the Company
or the Unit Holders, since December 31, 2006, which change, loss
or damage materially affects or impairs the ability of the
company to conduct its business.
7.5 Government Approvals and Required Consents. All
necessary consents of any filings with any governmental authority
or agency or other person required to be made or obtained by the
Company or the Unit Holders relating to the consummation of the
transactions contemplated in this Agreement shall have been
obtained and made and no action or proceeding shall have been
instituted or threatened which could materially affect, restrain
or prohibit any of the transactions contemplated in this
Agreement.
7.6 Closing Deliveries. The Purchaser shall have received
all schedules, documents, certificates, instruments, assignments
and agreements referred to in Section 8.1 hereof, duly executed
and delivered in form reasonably satisfactory to the Purchaser.
7.7 Other Documents. The Purchaser shall have received all
such other certificates, instruments or documents that are
reasonably required by the Purchaser or its counsel in order to
consummate the transactions contemplated in this Agreement.
VIII. CLOSING DELIVERIES BY THE PARTIES
8.1 Unit Holders and Company Deliveries. At or prior to
the Closing Date, the Unit Holders and the Company shall deliver
to the Purchaser the following, all of which shall be in a form
reasonably satisfactory to the Purchaser:
(a) a copy of resolutions of the Board of Directors of
the Company authorizing the execution, delivery and performance
of this Agreement and the transactions contemplated in this
Agreement to which the Company is a party, and all related
documents and agreements, each certified by the Secretary of the
Company as being true and correct copies of the originals thereof
subject to no modifications or amendments;
(b) Articles of Organization of the Company certified
by the Secretary of State of Arizona;
(c) Bylaws of the Company certified by the Secretary
of the Company;
(d) unit certificates representing the Units, together
with accompanying signed unit power or instrument of assignment,
duly endorsed in blank for the transfer of the Units to the
Purchaser with all necessary transfer taxes paid or other revenue
stamps affixed thereto, which certificates shall then be canceled
and a new stock certificate for the total number of the Units
shall be issued in the name of the Purchaser.
(e) a certificate of the President of the Company
dated the Closing Date, certifying that the representations and
warranties of the Company contained in this Agreement are true
and correct on and as of the Closing Date;
(f) a certificate of the Unit Holders dated the
Closing Date, certifying that the representations and warranties
of the Unit Holders contained in this Agreement are true and
correct on and as of the Closing Date;
(g) a certificate of the President of the Company
dated the Closing Date, (i) as to the performance of and
compliance in all material respects by the Company with all
covenants contained in this Agreement on and as of the Closing
Date and (ii) certifying that all conditions precedent required
to be satisfied by the Company have been satisfied;
(h) a certificate of the Unit Holders dated the
Closing Date, (i) as to the performance of and compliance in all
material aspects by the Unit Holders with all covenants contained
in this Agreement on and as of the Closing Date and (ii)
certifying that all conditions precedent required by the Unit
Holders to be satisfied shall have been satisfied;
(i) a certificate of the Secretary of the Company
certifying the incumbency of the directors and officers of the
Company and as to the signatures of such directors and officers
who have executed documents delivered at the Closing on behalf of
the Company;
(j) a certificate, dated within ten days prior to the
Closing Date, of the Arizona Secretary of State establishing that
the Company is in existence, has paid all franchise or similar
taxes, if any, and is in good standing to transact business in
the State of Arizona;
(k) certificates, dated within ten days prior to the
Closing Date, of the Secretaries of States in which the Company
is qualified to do business, to the effect that the Company is
qualified to do business and is in good standing as a foreign
corporation in each of such states;
(l) all authorizations, consent, approvals, permits
and licenses referenced in Section 7.5 of this Agreement;
(m) such other instruments as shall be necessary or
appropriate, as the Purchaser or its counsel shall reasonably
request, to carry out and effect the purpose and intent of this
Agreement and the transactions contemplated by this Agreement.
8.2 Purchaser Deliveries. At or prior to the Closing Date,
the Purchaser shall deliver to the Unit Holders and the Company
the following, all of which shall be in a form reasonably
satisfactory to the Unit Holders and the Company:
(a) a copy of resolutions of the Board of Directors of
the Purchaser authorizing the execution, delivery and performance
of this Agreement and the transactions contemplated by this
Agreement to which the Purchaser is a party, and all related
documents and agreements, each certified by the Secretary of the
Purchaser as being true and correct copies of the originals
thereof subject to no modifications or amendments;
(b) Certificate of Incorporation of the Purchaser,
certified by the Delaware Secretary;
(c) Bylaws of the Purchaser certified by the Secretary
of the Purchaser;
(d) a certificate of the Chief Executive Officer of
the Purchaser dated the Closing Date, certifying that the
representations and warranties of the Purchaser contained in this
Agreement are true and correct on and as of the Closing Date;
(e) a certificate of the Chief Executive Officer of
the Purchaser dated the Closing Date, (i) as to the performance
of and compliance in all material respects by the Purchaser with
all covenants contained in this Agreement on and as of the
Closing Date and (ii) certifying that all conditions precedent
required to be satisfied by the Purchaser shall have been
satisfied;
(f) a certificate of the Secretary of the Purchaser
certifying the incumbency of the directors and officers of the
Purchaser and as to the signature of such directors and officers
who have executed documents delivered at the Closing on behalf of
the Purchaser;
(g) a certificate, dated within ten days prior to the
Closing Date, of the Delaware Secretary of State establishing
that the Purchaser is in existence, has paid all franchise or
similar taxes, if any, and is in good standing to transact
business in the State of Delaware;
(h) the Purchaser Shares duly authorized and issued in
the amount to the Unit Holders as set forth in Schedule 1.1; and
(i) such other instruments as shall be necessary or
appropriate, as the Unit Holders, the Company or their counsel
shall reasonably request, to carry out and effect the purpose and
intent of this Agreement and the transactions contemplated in
this Agreement.
IX. POST-CLOSING AND CERTAIN OTHER MATTERS
9.1 Further Instruments of Transfer. Following the
Closing, at the request of the Purchaser, the Unit Holders and
the Company shall deliver any further instruments of transfer and
take all reasonable action as may be necessary or appropriate to
carry out the purpose and intent of this Agreement. Following
the closing, at the request of the Unit Holders, the Purchaser
shall deliver any further instruments of transfer and take all
reasonable action as may be necessary or appropriate to carry out
the purpose and intent of this Agreement.
X. INDEMNIFICATION
10.1 Indemnification by the Company. Subject to the
terms and conditions of this Article X, the Company agrees to
indemnify, defend and hold harmless the Purchaser and its
directors, officers, Unit Holders, employees, agents, attorneys,
consultants and affiliates from and against all losses, claims,
obligations, demands, assessments, penalties, liabilities, costs,
damages, reasonable attorneys' fees and expenses (including
without limitation, all costs of experts and all costs incidental
to or in connection with any appellate process) (collectively,
"Damages") asserted against or incurred by such individuals or
entities arising out of, in connection with or resulting from a
breach by the Company or the Unit Holders of any representation,
warranty or covenant of the Company or the Unit Holders contained
in this Agreement or in any schedule, exhibit, certificate or
other instrument delivered pursuant to or as a part of this
Agreement.
10.2 Indemnification by the Unit Holders. Subject to
the terms and conditions of this Article X, the Unit Holders
agree to indemnify, defend and hold harmless the Purchaser and
its directors, officers, Unit Holders, employees, agents,
attorneys, consultants and affiliates from and against any
Damages exceeding in the aggregate $100,000 asserted or incurred
by such individuals or entities rising out of, in connection with
or resulting from one or more breach or breaches by the Unit
Holders of any representation, warranty or covenant of the Unit
Holders contained in this Agreement or in any schedule, exhibit,
certificate or other instrument delivered pursuant to or as a
party of this Agreement.
10.3 Indemnification by the Purchaser. Subject to the
terms and conditions of this Article X, the Purchaser agrees to
indemnify, defend and hold harmless the Company and the Unit
Holders and, as applicable, their respective directors, officers,
Unit Holders, employees, agents, attorneys, consultants and
affiliates from and against all Damages asserted against or
incurred by such individuals and/or entities arising out of, in
connection with or resulting from a breach by the Purchaser of
any representation or warranty or covenant of the Purchaser
contained in this Agreement or in any schedule, exhibit,
certificate or other instrument delivered pursuant to or as a
part of this Agreement.
10.4 Costs, Expenses and Legal Fees. Each party hereto
shall bear its own costs and expenses (including attorneys' fees)
in connection with the transactions contemplated in this
Agreement, except that each party hereto agrees to pay the costs
and expenses (including reasonable attorneys' fees and expenses)
incurred by the other parties in successfully (i) enforcing any
of the terms of this Agreement or (ii) proving that another party
breached any of the terms of this Agreement.
10.5 Tax Benefits: Insurance Proceeds. The total
amount of any indemnity payments owed by one party to another
party to this Agreement shall be reduced by any correlative tax
benefits received by the party to be indemnified or the net
proceeds received by the party to be indemnified with respect to
recovery from third parties or insurance proceeds, and such
correlative insurance benefit shall be net of the insurance
premium, if any, that becomes due as a result of such claim.
XI. NON-COMPETE, NON-SOLICITATION AND NON-DISCLOSURE
11.1 Non-Competition Covenant. The Unit Holders covenant
and agree that during the term of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇'▇ employment
and for a period ending two (2) years following the date of his
termination of employment, he will not without the prior written
consent of the Purchaser and the Company (i) directly or
indirectly engage in, (ii) assist or have an active interest in
(whether as proprietor, partner, investor, stockholder, officer,
director or any type of principal whatsoever, provided that
ownership of not more than one percent (1%) of the outstanding
stock of a corporation traded on a national securities exchange
or on the Nasdaq Stock Market shall not of itself be viewed as
assisting or having an active interest in the below described
business), or (iii) enter the employment of or act as an agent
for or advisor or consultant to any person, firm, partnership,
association, corporation or business organization, entity or
enterprise that is, or is about to become, directly or indirectly
engaged in, any business that competes with or is substantially
similar to the business of the Company or the Purchaser as
conducted on the Closing Date.
11.2 Non-Solicitation Covenant. The Unit Holders
covenant and agree that for a period of five (5) years commencing
on the closing Date, the Unit Holders will not, (i) directly or
indirectly, induce or attempt to induce any employee of the
Company or the Purchaser to discontinue employment with the
Company or the Purchaser and will not, (ii) directly or
indirectly, solicit or entice any of the Company's or the
Purchaser's customers or suppliers to do business with any person
or business entity in competition with the Company or the
Purchaser.
11.3 Non-Disclosure Covenant. The Company and the Unit
Holders recognize and acknowledge that each has in the past,
currently has, and in the future may possibly have, access to
certain Confidential Information of the Purchaser that is
valuable, special and a unique asset of such entity's business.
The Purchaser acknowledges that it has in the past, currently
has, and in the future may possibly have, access to certain
Confidential Information of the Company and the Unit Holders that
is valuable, special and a unique asset of each such business.
The Company, the Unit Holders, and the Purchaser severally agree
that they will not disclose such Confidential Information to any
person, firm, corporation, association or other entity for any
purpose or reason whatsoever, except (a) to authorized
representatives of the Purchaser, the Unit Holders and the
Company; and (b) to counsel and other advisers to the Purchaser,
the Unit Holders and the Company provided that such advisers
(other than counsel) agree to the confidentiality provisions of
this Section 11.3, unless (i) such information becomes available
to or known by the public generally through no fault of the
Company, the Unit Holders or the Purchaser, as the case may be,
(ii) disclosure is required by law or the order of any
governmental authority under color of law, provided, that prior
to disclosing any information pursuant to this clause (ii) the
Company, the Unit Holders or the Purchaser, as the case may be,
shall, if possible, give prior written notice thereof to the
Company, the Unit Holders or the Purchaser, as the case may be,
and provide such party with the opportunity to contest such
disclosure, (iii) the disclosing party reasonably believes that
such disclosure is required in connection with the defense of a
lawsuit against the disclosing party, or (iv) the disclosing
party is the sole and exclusive owner of such Confidential
Information as a result of the purchase and sale of the Shares or
otherwise.
11.4 Injunctive Relief. In the event of a breach or
threatened breach by any party to this Agreement of the
provisions to this Article XI, each party to this Agreement
hereby agrees any such breach or threatened breach will result in
irreparable harm to the non-breaching parties and that each non-
breaching party to this Agreement shall be entitled, without
posting of a bond, to an injunction restraining the party or
parties involved in the breach or threatened breach from any such
conduct. Nothing herein shall be construed as prohibiting the
exercise of any other available remedy for such breach or
threatened breach, including the recovery of damages.
11.5 Survival. The obligations of the parties under
Section 11.3 shall survive the termination of this Agreement.
XII. MISCELLANEOUS
12.1 Amendment; Waivers. This Agreement may be
amended, modified or supplemented only by an instrument in
writing executed by all the parties hereto. Any waiver of any
terms and conditions hereof must be in writing, and signed by the
parties hereto. The waiver of any of the terms and conditions of
this Agreement shall not be construed as a waiver of any other
terms and conditions hereof.
12.2 Termination Prior to Closing. This Agreement and
the transactions contemplated hereby may be terminated (i) at any
time prior to the Closing by mutual agreement of all parties;
(ii) by any party hereto if the Closing of this Agreement shall
not have occurred on or before the Closing Date, unless such date
is mutually extended by the written Agreement of all parties;
(iii) by the Purchaser in the event of any material breach of the
representations, warranties or covenants of the Company or the
Unit Holders; (iv) by the Company or the Unit Holders in the
event of any breach of the representations, warranties or
covenants of the Purchaser; or (v) by the Purchaser or the
Company or the Unit Holders in the event of the other party's
failure to provide the deliveries set forth in Article VIII.
12.3 Assignment. Neither this Agreement nor any right
created hereby or in any agreement entered into in connection
with the transactions contemplated hereby shall be assignable by
any party hereto, except an assignment by the Purchaser to a
wholly owned subsidiary of the Purchaser; provided that any such
assignment shall not relieve the Purchaser of its obligations
hereunder. Notwithstanding the foregoing provision or any other
provision in this Agreement, the Purchaser's right to assign,
transfer, convey, hypothecate or otherwise dispose of the Shares
immediately after the closing and at any time thereafter shall be
unrestricted other than as required by federal and state
securities laws for compliance therewith.
12.4 Parties in Interest; No Third Party Beneficiaries.
Except as otherwise provided herein, the terms and conditions of
this Agreement shall inure to the benefit of any be binding upon
the respective heirs, legal representatives, successors and
assigns of the parties hereto. Except as otherwise expressly
provided herein, neither this Agreement nor the transactions
contemplated hereby shall be deemed to confer upon any person not
a party hereto any rights or remedies hereunder.
12.5 Entire Agreement. This Agreement and transactions
contemplated hereby constitute the entire agreement of the
parties regarding the subject matter hereof, and supersede all
prior agreements and understandings, both written and oral, among
the parties, or any of them with respect to the subject matter
hereof.
12.6 Severability. If any provision of this Agreement
is held to be illegal, invalid or unenforceable under present or
future laws effective during the term hereof, such provision
shall be fully severable and this Agreement shall be construed
and enforced as if such illegal, invalid or unenforceable
provision never comprised a part hereof; and the remaining
provisions hereof shall remain in full force and effect and shall
not be affected by the illegal, invalid or unenforceable
provision or by its severance therefrom. Furthermore, in lieu of
such illegal, invalid or unenforceable provision, there shall be
added automatically as part of this Agreement a provision as
similar in its terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.
12.7 Survival of Representations. Warranties and
Covenants. The representations, warranties and covenants
contained herein shall survive the Closing and all statements
contained in any certificate, exhibit or other instrument
delivered by or on behalf of the Company, the Unit Holders or the
Purchaser pursuant to this Agreement shall be deemed to have been
representations and warranties by the Company, the Unit Holders
or the Purchaser, respectively. Notwithstanding any provision in
this Agreement to the contrary, the representations and
warranties contained herein shall survive the Closing until the
fifth (5th) anniversary of the Closing Date except that the
representations and warranties with respect to tax matters shall
survive until such time as the limitations period has run for all
tax periods ended prior to the Closing Date.
12.8 Governing Law. This agreement and the rights and
obligations of the parties hereto shall be governed by and
construed and enforced in accordance with the laws (but not the
rules governing conflicts of laws) of the state of Delaware.
12.9 Captions. The captions in this Agreement are for
convenience of reference only and shall not limit or otherwise
affect any of the terms or provisions hereof.
12.10 Gender and Number. When the context requires, the
gender of all words used herein shall include the masculine,
feminine and neuter and the number of all words shall include
singular and plural.
12.11 Confidentiality; Publicity and Disclosures. Each
party shall keep this Agreement and its terms confidential, and
shall make no press release or public disclosure, either written
or oral, regarding the transactions contemplated by this
Agreement without the prior knowledge and consent of the other
parties hereto; provided that the foregoing shall not prohibit
any disclosure (a) by press release, filing or otherwise that the
Purchaser has determined in its good faith judgment and after
advice of legal counsel to be required by federal securities
laws, (b) to attorneys, accountants, investment bankers or other
agents of the parties assisting the parties in connection with
the transactions contemplated by this Agreement and (c) by the
Purchaser in connection with the conduct of any public offering
of its securities or an examination of the operations and assets
of the Company in connection with some or with future
acquisitions by the Company; provided that the Purchaser shall
reasonably promptly provide notice of any release. In the event
that the transactions contemplated hereby are not consummated for
any reason whatsoever, the parties hereto agree not to disclose
or use any Confidential Information they may have concerning the
affairs of the other parties, except for information that is
required by law to be disclosed; provided that should the
transactions contemplated hereby not be consummated, nothing
contained in this Section 12.11 shall be construed to prohibit
the parties hereto from operating business in competition with
each other.
12.12 Notice. Whenever this Agreement requires or
permits any notice, request, or demand from one party to another,
the notice, request or demand must be in writing to be effective
and shall be deemed to be delivered and received (i) if
personally delivered or if delivered by telex, telegram or
courier service, when delivered to the party to whom notice is
sent, (ii) if delivered by facsimile transmission, when so sent
and receipt acknowledged by receipt or (iii) if delivered by mail
(whether actually received or not), at the close of business on
the third business day next following the day when placed in the
mail, postage prepaid, certified or registered, addressed to the
appropriate party or parties, at the address of such party set
forth below (or at such other address as such party may designate
by written notice to all other parties in accordance herewith):
If to the Purchaser:
Aquacell Water, Inc.
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
If to the Company
or the Unit Holders:
McPhee Environmental Supply, L.L.C.
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Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
with a copy to:
12.13 No Waiver. No party hereto shall by any act
(except by written instrument pursuant to Section 12.1 hereof),
delay, indulgence, omission or otherwise be deemed to have waived
any right or remedy hereunder or to have acquiesce in any default
in or breach of any of the terms and conditions hereof. No
failure to exercise, nor any delay in exercising, on the part of
any party hereto, any right, power or privilege hereunder shall
operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other
or further exercise thereof or the exercise of any other right,
power or privilege. No remedy set forth in this Agreement or
otherwise conferred upon or reserved to any party shall be
considered exclusive of any other remedy available to any arty,
but the same shall be distinct, separate and cumulative and may
be exercised from time to time as often as occasion may arise or
as may be deemed expedient.
This Agreement and the Transactions may be terminated (a) at
any time prior to the Closing Date by mutual agreement of all
parties, or (b) if the Closing of this Agreement and the
consummation of the transactions shall not have occurred on or
before the Closing Date unless such date is mutually extended by
all parties.
12.14 Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original,
and all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Stock Purchase Agreement as of the date first written above.
Purchaser:
By: ▇▇▇▇▇ ▇▇▇▇▇▇, President
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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The Company:
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Unit Holder:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Unit Holder
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Unit Holder
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇, Unit Holder
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Unit Holder
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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