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EXHIBIT 2.5
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement is made on April 19, 1999, among Halo Holdings of
Nevada, Inc., a Nevada corporation ("Buyer"), and all of the Shareholders of
NetWorld of Ohio, Inc., an Ohio Corporation (the "Company").
Buyer desires to purchase from each of the Shareholders, and each of the
Shareholders, desires to sell to buyer, all of the shares of Common Stock of the
company owned by him, her, or it, all upon the terms and conditions set forth
below.
Now, Therefore, in consideration of, and in reliance upon, the covenants,
representations and warranties contained in this Agreement, the parties agree
as follows:
1. PURCHASE AND SALE OF STOCK. Upon the terms and provisions of this
Agreement, Buyer agrees to purchase and accept delivery from each Shareholder
of, and each Shareholder agrees to sell, assign, transfer and deliver to Buyer,
at the Closing provided for in Section 3, the number of shares of Common Stock
set forth opposite such Shareholder's name on the attached Schedule A, free and
clear of all liens, claims, charges, restrictions, equities or encumbrances of
any kind.
2. CONSIDERATION. The total consideration to be paid by the Buyer for the
Common Stock shall be paid as follows:
(a) Cash Payment. A cash payment of ninety thousand dollars ($90,000)(the
"Cash Payment").
(b) Purchase Note. Buyer shall deliver to the Shareholders' representative
at Closing a promissory note (the "Purchase Note"), in the principled amount of
$180,000 bearing no interest and requiring Buyer to make payments in accordance
with the schedule set forth on the annexed to the promissory note, total
payments to be made by December 15, 1999.
(c) Stock Payout. Buyer shall deliver to the Shareholders' Representative
at Closing 37,000 shares of Halo Holdings restricted Common Stock.
(d) Other Consideration. Buyer shall provide Shareholders with free dialup
access, web site hosting, and domain names services for five years.
Shareholders shall pay any third party verifiable costs.
3. ASSUMPTION AND RETENTION OF LIABILITIES.
(a) Closing Balance Sheet. The Company shall prepare a closing balance
sheet (the "Closing Balance Sheet") for the Company dated at least three (3)
days prior to the Closing. The Closing Balance Sheet shall be prepared in
accordance with Generally Accepted Accounting Principles ("GAAP") and shall
fairly represent the assets and liabilities of the Company as of the date of
such Closing Balance Sheet.
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(b) Buyer's Assumption of Liabilities. Buyer will assume liabilities, set
forth on the Closing Balance Sheet, up to a maximum of $270,000. If the closing
balance sheet contains liabilities in excess of $270,000, Buyer will identify
sufficient Balance Sheet liabilities that Buyer will not assume.
(c) Liabilities in Excess of $270.000. Buyer shall have the right to
choose which liabilities on the Closing Balance Sheet it shall assume. Any
additional liabilities shall be assumed by the prior shareholders.
(d) Liabilities under Existing Leases. Buyer shall not assume any
liabilities under the presently existing lease between the Company and or
______________ space that the Company leases. A list of all leased property or
space is listed on Schedule 2(d).
4. CLOSING. The closing of the purchase and sale of the Stock (the
"Closing") shall take place at the office of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC., ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, (or at such other place as the
parties may mutually agree) on April 19, 1999, (or on such other date upon
which the parties shall mutually agree), contemporaneously with the execution
of this Agreement. If the Closing is postponed, all references to the Closing
Date in this Agreement shall refer to the postponed date.
4.1 DOCUMENTS TO BE DELIVERED BY SHAREHOLDERS AT CLOSING. At the Closing
the Shareholders' representative will:
(a) Deliver to Buyer an Assumption of Liabilities for ▇▇. ▇▇▇▇▇▇▇ for any
liabilities on the Closing Balance Sheet that cause the Company to have
liabilities in excess of $270,000;
(b) Deliver to Buyer a certified copy of the Company's Certificate of
Incorporation and all amendments thereto as in effect on the Closing Date and
of the Company's Bylaws as amended to the Closing Date, and all ancillary
documents;
(c) Deliver to Buyer a certificate of the President or a Vice President of
the Company, dated the Closing Date, certifying the accuracy of the Company's
and Shareholders' representations and warranties hereunder and that the Company
and the Shareholders have performed and complied with all agreements and
conditions required by this Agreement to be performed and complied with by the
Company and the Shareholders prior to or at the Closing;
(d) Deliver to Buyer all consents, authorizations, waivers and similar
approvals of Governmental Bodies and other Persons, if any, which are required
to be obtained by the Company or the Shareholders in order to enable or permit
the Shareholders to transfer ownership of all of the common stock to Buyer.
(e) Deliver to Buyer stock certificates for the shares of Common Stock to
be sold by the Shareholders, or cause the transfer to Buyer by electronic book
transfer of the shares of Common Stock to be sold by the Shareholders, in each
case free and clear of all liens,
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claims, charges, restrictions, equities or encumbrances of any kind, and with
any necessary stock transfer stamps, along with duly executed stock powers in
form satisfactory to Buyer; and
(f) Deliver to Buyer an opinion, dated as of the Closing Date, of ▇▇▇▇▇▇▇
Openinsky, Esq., counsel for the Company, in form and substance satisfactory to
▇▇▇▇▇ & Taubman, LLC., counsel for Buyer, to the effect that:
(i) To the best of the knowledge of Company's counsel, each Shareholder
has good and valid title to the shares of Common Stock set forth opposite his,
her, or its name in the attached Schedule A, free and clear of all liens,
claims, charges, restrictions, equities or encumbrances of any kind, and has
full power and the legal right to sell those shares of Common Stock to Buyer
pursuant to this Agreement;
(ii) Each Shareholder has all necessary corporate or other power and
authority to execute and deliver this Agreement;
(iii) This Agreement has been duly executed and delivered by or on behalf of
each Shareholder and is a legal, valid and binding obligation of each
Shareholder enforceable against each Shareholder in accordance with its terms,
except (a) as this Agreement may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance or other laws or equitable principles
relating to or affecting the enforcement of creditors' rights and (b) that the
granting of specific performance is subject to the discretion of a court of
equity;
(iii) The execution and delivery of this Agreement by each Shareholder and
the consummation of the transactions provided for in this Agreement will not
result in any breach of any contract or agreement which is known to Company's
counsel and to which that Shareholder is a party or by which that Shareholder
is bound;
(v) Each Shareholder has duly executed and delivered the stock power of
that Shareholder referred to in Section 3.1(A) and, assuming Buyer is
purchasing the shares of Common Stock pursuant to this Agreement in good faith
and without notice of adverse claims within the meaning of the Uniform
Commercial Code of the State of New York, the sale by each Shareholder of the
shares of Common Stock owned by him, her, or it pursuant to this Agreement will
transfer to Buyer good title to those shares of Common Stock, free and clear of
all liens, claims, charges, restrictions, equities or encumbrances of any kind;
and
(vi) Company's counsel knows of no litigation, proceeding or investigation
pending or threatened against any of the Shareholders which questions the
validity of this Agreement or any action taken or to be taken by any of the
Shareholders under this Agreement.
4.2 DOCUMENTS AND FUNDS TO BE DELIVERED BY BUYER AT CLOSING. At the
Closing, Buyer will deliver to the Shareholders' representative:
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(a) a certified or bank cashier's check or wire transfer payable to the
order of the Shareholders' representative in the amount of the Cash Payment;
and
(b) the Purchase Note in substantially the same form as annexed hereto,
(c) the certificate or certificates representing the stock payment, and
attached hereto on Schedule 2(b)
(d) an opinion, dated as of the Closing Date, of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC.,
counsel for Buyer, in form and substance satisfactory to ▇▇▇▇▇▇▇ Openinski,
Esq., counsel for the Company, to the effect that:
(i) Buyer has all necessary corporate power and authority to execute and
deliver this Agreement;
(ii) This Agreement has been duly authorized, executed and delivered by
Buyer and is a valid and binding obligation of Buyer enforceable against Buyer
in accordance with its terms, except (a) as the Agreement may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance or other laws or
equitable principles relating to or affecting the enforcement of creditors'
rights and (b) that the granting of specific performance is subject to the
discretion of a court of equity;
(iii) The execution and delivery of this Agreement and the consummation of
the transactions provided for in this Agreement will not violate the
Certificate of Incorporation or Bylaws of Buyer or result in any breach of any
contract or agreement known to Buyer's counsel to which Buyer is a party or by
which Buyer is bound; and
(iv) Buyer's counsel knows of no litigation, proceeding or investigation
pending or threatened against Buyer which questions the validity of this
Agreement or any action taken or to be taken by Buyer under this Agreement.
4.3 FORM AND SUBSTANCE OF DOCUMENTS. The documents and instruments
referred to in Sections 4.1 and 4.2 shall be in form and substance satisfactory
to counsel for the party to whom they are delivered.
5. REPRESENTATIONS AND WARRANTIES BY THE COMPANY AND THE SHAREHOLDERS.
The Company and the Shareholders jointly and severally represent and warrant to
Buyer as follows:
5.1 Organization, Existence and Authority. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Ohio. The Company has all requisite corporate power and authority to
own or lease its properties and assets, to conduct its business as currently
conducted and to enter into and perform this Agreement and all other agreements
entered into in connection with the transactions contemplated hereby. Copies of
the Company's Articles of Incorporation, as amended to
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date, and Bylaws, as amended to date, have been delivered to the Buyer and are
complete and correct. The Company is not required to be qualified or licensed
to do business as a foreign corporation in any jurisdiction. The Company has
all authorizations, approvals, orders, licenses, certificates and permits of
and from all governmental or regulatory bodies necessary to own or lease its
properties and assets and to conduct its business as currently conducted.
5.2 NO SUBSIDIARIES. The Company does not own, directly or indirectly, any
capital stock or other equity securities of any corporation or have any direct
or indirect equity or ownership interest in any business upon the Closing. The
Company is not subject to any obligation or requirement to provide funds for or
to make any investment (in the form of a loan, capital contribution or
otherwise) in any entity.
5.3 CAPITALIZATION; OWNERSHIP. The authorized capital stock of the Company
consists of 500 shares of Common Stock, par value $.01 per share, of which 500
shares of the Common Stock are issued and outstanding on the date hereof. All
such 500 issued and outstanding shares of Common Stock of the Company are owned
by the Shareholders. All of such Common Stock are duly authorized, validly
issued, fully paid and non-assessable and there are no liens, encumbrances,
security interests, charges or restrictions with respect to such stock. All
such Common Stock has been issued in compliance with applicable federal and
state securities laws. Except as set forth on Schedule 5.3, there are no
outstanding subscriptions, options, warrants, contracts, calls, rights or
commitments of any character relating to the issuance of or granting of rights
in or to acquire any security of the Company, nor are any outstanding
securities convertible into or exchangeable for other securities of the
Company. The Company has no outstanding obligation to repurchase, redeem, or
otherwise acquire any of its capital stock.
5.4 STOCK OWNERSHIP. Each Shareholder owns all of the shares of Common
Stock set forth opposite that Shareholder's name on the attached Schedule A,
which constitute all of the outstanding shares of capital stock of the Company
owned by that Shareholder, free and clear of all liens, claims, charges,
restrictions, equities and encumbrances of any kind. The Shareholders have full
power and the legal right to sell, assign, transfer and deliver to Buyer the
stock described in this paragraph.
5.5 AUTHORIZATION OF AGREEMENT; NO VIOLATION. Each Shareholder has all
necessary corporate or other power and authority to execute, deliver and
perform this Agreement and to consummate the sale of the shares of Common Stock
owned by that Shareholder and the other transactions contemplated by this
Agreement. This Agreement has been duly executed by or on behalf of the
Shareholders and constitutes the legal, valid and binding obligation of the
Shareholders, enforceable against each of the Shareholders in accordance with
its terms. Neither the execution, delivery or performance of this Agreement nor
the consummation of any of the transactions provided for in this Agreement (i)
will violate the Certificate of Incorporation or Bylaws, if any, of the Company
or any law, rule or regulation applicable to the Company or any Shareholder,
(ii) will result in any breach of or default under any provision of any
contract or
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agreement of any kind to which any Shareholder is a party or by which any
Shareholder is bound or to which any property or asset of any Shareholder is
subject, (iii) is prohibited by or requires any Shareholder obtain or make any
consent, authorization, approval, registration or filing under any statute,
law, ordinance, regulation, rule, judgment, decree or order of any court or
governmental agency, board, bureau, body, department or authority, or of any
other person, (iv) will cause any acceleration of maturity of any note,
instrument or other obligation to which any Shareholder is a party or by which
any Shareholder is bound or with respect to which any Shareholder is an obligor
or guarantor or (v) will result in the creation or imposition of any lien,
claim, charge, restriction, equity or encumbrance of any kind whatever upon or
give to any other person any interest or right (including any right of
termination or cancellation) in or with respect to any of the properties,
assets, business, agreements or contracts of any Shareholder.
5.6 REQUIRED CONSENTS. The Shareholders have obtained all Required
Consents, each of which either (i) has been obtained on or prior to the date
hereof, (ii) shall have been obtained on or prior to the Closing Date, or (iii)
to the extent legally permissible, shall be obtained by Shareholders as
promptly as practical following the Closing Date. Schedule 5.6 hereto indicates
with respect to each Required Consent listed therein whether such Required
Consent has been obtained as of the date hereof and, if not, when Company
reasonably expects that such Required Consent will have been obtained pursuant
to clauses (ii) or (iii) above. If any Required Consent hereto is not obtained
in accordance with this Section 5, then Shareholders shall cooperate with
Buyer, in all respects, to provide to Buyer the benefits that would have been
available to Buyer had such Required Consent been obtained.
5.7 INTELLECTUAL PROPERTY RIGHTS. The Company owns, is licensed or
otherwise would have the rights to use all of the Intellectual Property Rights
used in the conduct of the Business as currently conducted, all of which
Intellectual Property Rights are, to the Shareholders' knowledge, valid and
enforceable against third parties.
5.8 TAX AND OTHER RETURNS AND REPORTS. To Shareholders' knowledge and
belief, except as disclosed on the Closing Balance Sheet, (a) all federal,
state and local tax returns, reports and statements required to be filed by
Company in connection with the Business have been filed with the appropriate
governmental agencies in all jurisdictions in which such returns, reports and
statements are required to be filed, and all such returns, reports and
statements properly reflect the tax liabilities of Company in relation to the
Business for the periods, properties or events covered thereby; (b) all
federal, state and local taxes, assessments, interest, penalties, deficiencies,
fees and other governmental charges or impositions have been properly accrued
or paid; (c) The Company has not received any notice of assessment or proposed
assessment by the Internal Revenue Service or any other taxing authority in
connection with any Tax Returns and there are no pending tax examinations of or
tax claims asserted against Company or any of its assets or properties; (d)
there are no tax liens on any of the Assets; and (e) the Shareholders have no
knowledge of any basis for any additional assessment of any Taxes in relation
to the Business.
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5.9 LITIGATION. There are no actions, suits, proceedings or
investigations, either at law or in equity, or before any commission or other
administrative authority in any United States or foreign jurisdiction, of any
kind now pending or, to the best of Shareholders' knowledge, threatened against
the Company or the Shareholders that (i) would have a materially adverse effect
on the business of the company, (ii) question the validity of this Agreement,
or (iii) seek to delay, prohibit or restrict in any manner any action taken or
to be taken by the Company or any Shareholder under this Agreement.
5.10 BROKERS. All negotiations relative to this Agreement and the
transactions contemplated by it have been carried on by the Shareholders
directly with the Buyer and without the intervention of any other person and in
a manner as not to give rise to any valid claim against any of the parties for
any finder's fee, brokerage commission or like payment.
5.11 NO UNTRUE STATEMENTS. No statement by any Shareholder contained in
this Agreement and no written statement contained in any certificate, schedule
or other document required to be furnished by the Shareholders to Buyer
pursuant to this Agreement contains or will contain any untrue statement of a
material fact, or omits or will omit to state a material fact necessary in
order to make the statements not misleading.
5.12 ACKNOWLEDGMENTS BY SHAREHOLDERS. Each Shareholder acknowledges that
he, she, or it has, and has had, access to all information pertinent to the
business, financial condition, operations, affairs and prospects of the Buyer
and its subsidiaries that he, she, or it requires or that any reasonably
prudent seller of the shares of the Common Stock set forth opposite that
Shareholder's name on Schedule A would require. That Shareholder further
acknowledges that the Shareholder has had the benefit of financial and legal
advisors with respect to this Agreement and that the Shareholder is not relying
on Buyer or any person on behalf of or retained by Buyer for any disclosure of
information with respect to the Buyer and its subsidiaries.
5.13 COMPLIANCE WITH EMPLOYMENT LAWS; EMPLOYEE RELATIONS. The Company is in
material compliance with all federal, state and municipal laws and regulations
respecting employment, employment practices, terms and conditions of employment
and wages and hours, and is not engaged in any unfair labor practice and is not
in arrears in the payment of wages or withholding taxes or any other employee
benefit taxes or imposts. None of Company's employees is represented by any
labor union and there is no labor strike, dispute, grievance or other labor
trouble pending or, to the knowledge of the Company or the knowledge of the
Shareholders, threatened with respect to The Company.
5.14 NO UNDISCLOSED LIABILITIES. Except as set forth on Schedule 5.14, the
Company has no liabilities or obligations, fixed, accrued, contingent, assumed
or otherwise and whether due or to become due, which are not fully reflected or
provided for on the Closing Balance Sheet other than liabilities and
obligations incurred in or as a result of the ordinary course of business since
the Balance Sheet Date, none of which individually or in the aggregate has been
or is materially adverse to the business or condition of the
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Company. For purposes of this Section 5.14, Amaterially adverse means any
individual liabilities in excess of $5,000 or liabilities in excess of $10,000
in the aggregate.
5.15 DEBT INSTRUMENTS. Schedule 5.15 lists and briefly describes the
material terms and conditions of all mortgages, indentures, notes and other
obligations for or relating to borrowed money or commitments therefor
(including conditional sales contracts and chattel mortgages) to which the
Company is a party or which have been assumed by the Company or to which any of
its material properties or assets are subject. The material terms and
conditions shall include the principal amount, interest rate, original and
maturity dates, sinking fund installments, prepayment premiums, restrictive
covenants and any other material provisions. The Company is not in default in
any respect under any of the foregoing and there has not occurred any event
which with the passage of time or the giving of notice would constitute such a
default or allow any party to accelerate the performance of the Company's
obligations thereunder.
5.16 TITLE TO ASSETS; ABSENCE OF LIENS AND ENCUMBRANCES.
(a) Schedule 5.16(a) sets forth a true, correct and complete list of all
items of tangible personal property owned by the Company as of the date of the
Closing Balance Sheet having either a net book value per unit or an estimated
fair market value per unit in excess of $10,000.
(b) The Company has good and clear record and marketable title to, or a
valid leasehold interest in, all of its material assets and property reflected
in the Closing Balance Sheet, except assets and property disposed of in the
ordinary course of business and consistent with past practice, and, except as
set forth on 5.16(b), none of such assets or properties is subject to any
material defects of title, mortgage, pledge, lien, security interest, lease,
charge, encumbrance, objection or joint ownership (collectively, the
"Encumbrances").
(c) Except as set forth on Schedule 5.16(c), the facilities, machinery,
furniture, office and other equipment of the Company that are used in its
business are sufficient for the operations of Company are in good operating
condition and repair, subject only to the ordinary wear and tear. Company is
not in material default in any respect under any Encumbrances to which it or
its properties and assets are subject.
5.17 PRODUCT WARRANTIES.
(a) Except as set forth in Schedule 5.17, the Company does not have any
(i) unexpired expressed or implied product warranty with respect to any product
that it manufactures or sells or that it (or its predecessor) has heretofore
manufactured or sold; (ii) the Company has not received any notice of any claim
based on any product warranty; and (iii) neither the Company or the
Shareholders knows or has any reasonable ground to know of any claim (actual or
threatened) based on any product warranty.
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5.18 FULL DISCLOSURE All documents furnished by the Company and the
Shareholders to the Buyer pursuant to or in connection with this Agreement are
true and correct copies and there are no amendments or modifications to those
documents. The books and records of the Company are accurate and complete in
all material respects, and have been maintained in accordance with good
business practice.
5.19 TRANSACTIONS WITH AFFILIATES. There is no transaction, and no
transaction now proposed, to which the Company was or is to be a party and in
which any director or officer of the Company or any person owning of record or
beneficially more than 5% of the outstanding capital stock of any class of the
Company or any associate of any such person had or has a direct or indirect
material interest, other than obligations of the Company to the Shareholders
disclosed pursuant to Schedule 5.19.
5.20 BANK ACCOUNTS; POWERS OF ATTORNEY; ETC. Except as listed in Schedule
5.20, the Company does not have (a) any bank account, safe deposit box or
assets on deposit with any bank, or (b) any power of attorney or other
authorization outstanding, except for powers of attorney or authorizations
issued in the ordinary course of business with respect to patents, customs,
insurance and tax matters.
5.21 COMPLIANCE AND WITH ENVIRONMENTAL LAWS. Except as set forth in
Schedule 5.21, the Company has complied and is in compliance in all material
respects with all applicable Environmental Laws pertaining to any premises
which it owns, leases, subleases or otherwise occupies in connection with the
conduct of the day to day operations of its business (collectively the
"Premises"). To the knowledge of Shareholders, no violation by Company or
Shareholders is being alleged of any applicable Environmental Law relating to
the Premises, or the use or ownership thereof, or to the operation of the
Business.
6. REPRESENTATIONS AND WARRANTIES BY BUYER. Buyer represents and warrants
to each of the Shareholders as follows:
6.1 CORPORATE POWER. Buyer is a corporation validly existing and in good
standing under the laws of the State of Nevada and has the corporate power to
carry on its business as now being conducted and to acquire the shares of
Common Stock set forth on the attached Schedule A.
6.2 AUTHORIZATION OF AGREEMENT; NO VIOLATION. Buyer has all necessary
corporate power and authority to execute, deliver and perform this Agreement.
Buyer's Board of Directors has duly authorized the execution, delivery and
performance of this Agreement and the consummation of the purchase of the
shares of Common Stock to be purchased by it under this Agreement and the other
transactions contemplated by this Agreement. This Agreement has been duly
executed by or on behalf of Buyer and constitutes the legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
Neither the execution, delivery or performance of this Agreement nor the
consummation of any of the transactions provided for in this Agreement (i) will
violate or conflict with any provision of Buyer's Certificate of Incorporation
or Bylaws or any law,
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rule or regulation applicable to Buyer, (ii) will result in any breach of or
default under any provision of any contract or agreement of any kind to which
Buyer is a party or by which Buyer is bound or to which any property or asset
of Buyer is subject, (iii) is prohibited by or, except for the filing of a Form
10-D with the SEC, requires Buyer to obtain or make any consent,
authorization, approval, registration or filing under any statute, law,
ordinance, regulation, rule, judgment, decree or order of any court or
governmental agency, board, bureau, body, department or authority, or of any
other person, (iv) will cause any acceleration of maturity of any note,
instrument or other obligation to which Buyer is a party or by which Buyer is
bound or with respect to which Buyer is an obligor or guarantor or (v) will
result in the creation or imposition of any lien, claim, charge, restriction,
equity or encumbrance of any kind whatever upon or give to any other person any
interest or right (including any right of termination or cancellation) in or
with respect to any of the properties, assets, business, agreements or
contracts of Buyer.
6.3 LITIGATION. There are no actions, suits, proceedings or
investigations, either at law or in equity, or before any commission or other
administrative authority in any United States or foreign jurisdiction, of any
kind now pending or, to the best of Buyer's knowledge, threatened against
Buyer, that (i) question the validity of this Agreement or (ii) seek to delay,
prohibit or restrict in any manner any action taken or to be taken by Buyer
under this Agreement.
6.4 BROKERS. All negotiations relative to this Agreement and the
transactions contemplated by it have been carried on by Buyer directly with
each Shareholder or Shareholders' representative and without the intervention
of any other person and in a manner as not to give rise to any valid claim
against any of the parties for any finder's fee, brokerage commission or like
payment.
6.5 NO UNTRUE STATEMENTS. No statement by Buyer contained in this
Agreement and no written statement contained in any certificate, Schedule or
other document required to be furnished by Buyer to any Shareholder pursuant to
this Agreement contains or will contain any untrue statement of a material
fact, or omits or will omit to state a material fact necessary in order to make
the statements not misleading.
7. CONDITIONS OF SALE: ABANDONMENT OF SALE.
7.1. CONDITIONS TO OBLIGATIONS OF THE BUYER. The obligations of the Buyer
to purchase the Common Stock shall be subject to the following conditions:
(a) Representations and Warranties of Company and the Warranting
Shareholders to be True; Performance of Obligations; Compliance with Covenants
and Conditions. The representations and warranties of the Company and the
Shareholders herein shall be true in all material respects on the Closing Date
with the same effect as though made at such time, except to the extent waived
hereunder. The Company and the Shareholders shall have performed or caused to
be performed all obligations and complied with all
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covenants and conditions required by this Agreement to be performed or complied
with by it or them at or prior to the Closing Date.
(b) Statutory Requirements; Governmental Approvals. All statutory
requirements imposed on the Company and the Shareholders for the valid
consummation by the Company, the Shareholders and the Buyer of the transactions
contemplated by this Agreement shall have been fulfilled by the Company and the
Shareholders. All federal and state governmental agencies and authorities, the
consent, authorization or approval of which is necessary or desirable under any
applicable law, rule, order or regulation to permit consummation by Company,
the Shareholders and the Buyer of the transactions contemplated by this
Agreement, shall have consented to, authorized, or approved such transactions.
(c) Opinion of Counsel to Company and the Shareholders. The Buyer shall
have received from ▇▇▇▇▇▇▇ Openinski Esq.,, counsel to the Company and the
Shareholders, the opinion required by Section 4.1(e) in form and substance
mutually agreed to by Company and the Buyer.
(d) Adverse Proceedings. No action or proceeding by or before any court or
other governmental body shall have been instituted or threatened by any
governmental body or other person or entity which seeks to restrain, prohibit
or invalidate the transactions contemplated by this Agreement or which might
materially adversely affect the right of the Buyer to own the Common Stock or
to own, operate or control the Company, or which might subject the Company to
any material liability after the Closing.
(e) Resignations. The Buyer shall have received written resignations,
effective as of the Closing Date of ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Achim ▇▇▇▇▇ ▇▇▇▇▇▇▇, in their capacity as directors of Company
(f) Employment Agreement of ▇▇▇▇▇ ▇▇▇▇▇. At closing, ▇▇▇▇▇ ▇▇▇▇▇ will have
entered into an employment agreement in substantially the same form as annexed
hereto with the Buyer.
(g) Assumption of Liabilities by ▇▇▇ ▇▇▇▇▇▇▇. At closing, Buyer shall have
received an Assumption of Liabilities from ▇▇. ▇▇▇▇▇▇▇ reasonably acceptable
to the Company for any liabilities on the Closing Balance Sheet in excess of
$270,000.
(h) Tender of Common Stock. The Shareholders shall have tendered all of
the Common Stock, in the manner contemplated by Section 4.1.
(i) Property Leases. The Buyer shall have received an assignment,
cancellation, or such other document, reasonably acceptable to counsel for the
Buyer, that releases Buyer from any obligation or liability under any lease for
property or space between the Company and ▇. ▇▇▇▇▇▇▇ Trust.
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7.2. CONDITIONS TO OBLIGATIONS OF THE SHAREHOLDERS. The obligations of the
Shareholders to transfer the Common Stock pursuant to the terms of this
Agreement shall be subject to the following conditions:
(a) Representations and Warranties of the Buyer to be True. The
representations and warranties of the Buyer herein contained shall be true in
all material respects at the Closing Date with the same effect as though made
at such time, except to the extent waived under this Agreement. The Buyer shall
have performed all obligations and complied with all covenants and conditions
required by this Agreement to be performed or complied with by it prior to the
Closing Date.
(b) Statutory Requirements. All statutory requirements imposed on the
Buyer for the valid consummation by the Company, the Shareholders and the Buyer
of the transactions contemplated by this Agreement shall have been fulfilled by
the Buyer, and all authorizations, consents and approvals of any governmental
agencies and authorities required to be obtained by the Buyer in order to
permit consummation by the Company, the Shareholders and the Buyer of the
transactions contemplated by this Agreement shall have been obtained.
(c) Opinion of Counsel to the Buyer. The Shareholders shall have received
from ▇▇▇▇▇ & Taubman, LLC, counsel to the Buyer, the opinion required by
Section 4.2(d), in form and substance mutually agreed to by the Shareholders
and the Buyer.
7.3. TERMINATION OF AGREEMENT AND ABANDONMENT OF TRANSFER. Anything herein
to the contrary notwithstanding, this Agreement and the transfer of Common
Stock contemplated hereby may be terminated at any time before the Closing
Date, as follows, and in no other manner:
(a) Mutual Consent. By mutual written consent of the Shareholders, Company
and the Buyer.
(b) Termination by Buyer. Buyer may, without liability to Company or the
Shareholders, terminate this Agreement by notice to the Company at any time
prior to the Closing if default shall be made by Company or the Shareholders in
the observance or in the due and timely performance of any of the terms hereof
to be performed by the Company or the Shareholders that cannot be cured at or
prior to the Closing.
(c) Termination by the Shareholders. The Shareholders may, without
liability to the Buyer, terminate this Agreement by notice to the Buyer at any
time prior to the Closing if default shall be made by the Buyer in the
observance or in the due and timely performance of any of the terms hereof to
be performed by Buyer that cannot be cured at or prior to the Closing.
(d) Expiration Date. By either the Buyer or the Shareholders if the
transfer of the Common Stock shall not have become effective by May 15, 1999
(which date may be extended by mutual agreement of the Buyer and the
Shareholders) unless such failure is
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due to the failure of the party seeking to terminate this Agreement to perform
or observe the covenants, agreements and conditions hereof to be performed or
observed by such party at or before the Closing Date.
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.
8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties contained in this Agreement, any Schedule and any certificate
delivered at the Closing of the Company, the Shareholders, or the Buyer shall
be deemed to have been relied upon in spite of any investigation that has been
or will be made or omitted by any party to this Agreement and shall survive the
Closing to the extent provided in this Section 8.
8.2 SHAREHOLDER'S INDEMNIFICATION THE OBLIGATIONS. Subject to the terms
and conditions of this Section 8, each of the Shareholders jointly and
severally agrees to indemnify and hold Buyer harmless against and in respect
of:
(a) any and all losses, liabilities, damages or expenses (including legal
fees and expenses) relating to or arising out of any misrepresentation or
breach of warranty of the Company or the Shareholders contained in this
Agreement or in any statement or certificate delivered by the Company or the
Shareholders or Shareholders' representatives; and
(b) any and all losses, liabilities, damages or expenses (including legal
fees and expenses) relating to or arising out of any breach of any covenant of
the Company or the Shareholders contained in this Agreement.
8.3 BUYER'S INDEMNIFICATION OBLIGATIONS. Subject to the terms and
conditions of this Section 8, Buyer agrees to indemnify and hold each of the
Shareholders harmless against and in respect of:
(a) any and all losses, liabilities, damages or expenses (including legal
fees and expenses) relating to or arising out of any misrepresentation or
breach of warranty of the Buyer contained in this Agreement or in any statement
or certificate delivered by the Buyer;
(b) any and all losses, liabilities, damages or expenses (including legal
fees and expenses) relating to or arising out of any breach of any covenant of
the Buyer contained in this Agreement; and
(c) any and all losses, liabilities, damages or expenses (including legal
fees and expenses) relating to or arising out of the purchase by the Buyer from
the Shareholders of the shares of Common Stock set forth on the attached
Schedule A (it being understood that in no event shall Buyer indemnify any
Shareholder for any losses suffered or taxes payable in respect of profits
realized upon the sale by such Shareholder of his, her, or its shares of Common
Stock).
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8.4 PROCEDURE FOR INDEMNIFICATION CLAIMS. The respective indemnification
obligations of each of the Shareholders and the Buyer pursuant to Sections 8.2
and 8.3 shall be conditioned upon compliance by the Shareholders and the Buyer
with the following procedures for indemnification claims based upon or arising
out of any claim, action or proceeding by any person not a party to this
Agreement:
(a) If at any time a claim shall be made, or an action or proceeding shall
be commenced, against a party to this Agreement (the "Aggrieved Party") which
could result in liability of the other party (the "Indemnifying Party") under
its indemnification obligations under this Agreement, the Aggrieved Party shall
give to the Indemnifying Party notice of that claim, action or proceeding
within 15 days following its commencement (except that failure to give that
notice shall not excuse the Indemnifying Party except to the extent that it is
materially prejudiced by that failure). The notice shall state the basis for
the claim, action or proceeding and the amount claimed, (to the extent that
amount is determinable at the time when the notice is given) and shall permit
the Indemnifying Party to assume the defense of any such claim, action or
proceeding (including any action or proceeding resulting from any such claim)
with counsel which is reasonably acceptable to the Aggrieved Party. Failure by
the Indemnifying Party to notify the Aggrieved Party of his, her, or its
election to defend the claim, action or proceeding within a reasonable time,
but in no event more than 15 days after the notice shall have been given to the
Indemnifying Party, shall be deemed a waiver by the Indemnifying Party of his,
her, or its right to defend the claim, action or proceeding; provided, however,
that the Indemnifying Party shall not be deemed to have waived the right to
contest and defend against any claim of the Aggrieved Party for indemnification
under this Agreement based upon or arising out of that claim, action or
proceeding;
(b) If the Indemnifying Party assumes the defense of any such claim,
action or proceeding, the obligation of the Indemnifying Party as to that
claim, action or proceeding shall be limited to taking all steps necessary in
the defense or settlement of it and, provided the Indemnifying Party is held to
be liable for indemnification under this Agreement, to holding the Aggrieved
Party harmless from and against any and all losses, damages and liabilities
caused by or arising out of any settlement approved by the Indemnifying Party
or any judgment or award rendered in connection with that claim, action or
proceeding. The Aggrieved Party may participate, at his, her, or its expense,
in the defense of that claim, action or proceeding provided that the
Indemnifying Party shall direct and control the defense of that claim, action
or proceeding. The Aggrieved Party agrees to cooperate and make available to
the Indemnifying Party all books and records and such officers, employees and
agents as are reasonably necessary and useful in connection with the defense.
The Indemnifying Party shall not, in the defense of the claim, action or
proceeding, enter into any settlement without the prior written consent of the
Aggrieved Party, which consent shall not be unreasonably withheld;
(c) If the Indemnifying Party does not assume or proceed with the vigorous
defense of any such claim, action or proceeding, the Aggrieved Party may, at
the risk, cost and expense of the Indemnifying Party, defend against the claim,
action or proceeding in a
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manner as he, she, or it may deem appropriate. The Indemnifying Party agrees to
cooperate and make available to the Aggrieved Party all books and records and
such officers, employees and agents as are reasonably necessary and useful in
connection with the defense. The Aggrieved Party shall not, in the defense of
any such claim, action or proceeding, enter into any settlement without the
prior written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld.
9. COVENANT NOT TO COMPETE.
Except as contemplated herein, the Shareholders hereby agree that for a period
of five years, beginning April 19, 1999, the Shareholders shall not, without
Buyer's prior written consent, directly or indirectly, own, manage, operate,
join, control, or participate in the ownership, management, operation, or
control of, or be connected as a partner, consultant, or otherwise with, any
profit or non-profit business or organization that, directly or indirectly
competes with, or is about to compete with, the Buyer.
10. MISCELLANEOUS.
10.1 ASSURANCE OF FURTHER ACTION. From time to time after the Closing and
without further consideration, each of the parties to this Agreement shall
execute and deliver, or cause to be executed and delivered, such further
instruments and agreements, and shall take such other actions, as any other
party may reasonably request in order to more effectively effectuate the
transactions contemplated by this Agreement.
10.2 EXPENSES. Whether or not the Closing is consummated, each of the
parties will pay all of his, her, or its own legal and accounting fees and
other expenses incurred in the preparation of this Agreement and the
performance of the terms and provisions of this Agreement.
10.3 WAIVER. The parties to this Agreement may by written agreement (i)
extend the time for or waive or modify the performance of any of the
obligations or other acts of the parties to this Agreement or (ii) waive any
inaccuracies in the representations and warranties contained in this Agreement
or in any document delivered pursuant to this Agreement.
10.4 NOTICES. All notices, requests or other communications under this
Agreement shall be in writing and shall be deemed to have been duly given if
delivered by hand or mailed by overnight courier or by first class certified
mail, postage prepaid, addressed as follows: if to Buyer, to Halo Holdings,
Inc., Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ (with a copy to ▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC., ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇; if to any of the Shareholders or the Shareholders'
representative at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or to
some other address as may have been furnished in writing to the party giving
the notice by the party to whom notice is to be given.
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10.5 ENTIRE AGREEMENT. This Agreement embodies the entire agreement among
the parties and there have been and are no agreements, representations or
warranties, oral or written, among the parties other than those set forth or
provided for in this Agreement. This Agreement may not be modified or changed,
in whole or in part, except by a supplemental agreement signed by each of the
parties.
10.6 RIGHTS UNDER THIS AGREEMENT; NONASSIGNABILITY. This Agreement shall
bind and inure to the benefit of the parties to this Agreement and their
respective heirs, legal representatives, successors and permitted assigns, but
shall not be assignable by any party without the prior written consent of the
other parties. Nothing contained in this Agreement is intended to confer upon
any person, other than the parties to this Agreement and their respective
heirs, legal representatives, successors and permitted assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
10.7 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without reference to the
conflicts of laws principles of that State.
10.8 ARBITRATION. Any dispute arising under or involving any provision
under this Agreement or any issue regarding the Buyer's purchase of
Shareholders' stock, as listed on the attached Schedule A, the issue shall be
submitted to the American Arbitration Association and resolved by final and
binding arbitration under its rules.
10.9 HEADINGS; REFERENCES TO SECTIONS AND SCHEDULES. The headings of the
Sections, paragraphs and subparagraphs of this Agreement are solely for
convenience of reference and shall not limit or otherwise affect the meaning of
any of the terms or provisions of this Agreement. The references in this
Agreement to Sections and Schedules, unless otherwise indicated, are references
to sections of and schedules to this Agreement.
10.10 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be an original, but which together constitute one and the same
instrument. In Witness, the parties have duly executed this Agreement on April
19, 1999, as of the date first above written.
Halo Holdings of Nevada, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, CEO
NetWorld of Ohio, Inc.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇, President
Shareholders
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