UNIT PURCHASE AND EXCHANGE AGREEMENT by and among and PAK-IT, LLC and PAK-IT, LLCUNITHOLDERS Dated as of September 30, 2009
Exhibit 10.1
by
and among
and
PAK-IT,
LLC
and
PAK-IT,
LLCUNITHOLDERS
Dated
as of September 30, 2009
1
THIS UNIT
PURCHASE AND EXCHANGE AGREEMENT, dated as of the 30th day of September, 2009
(the “Agreement”), by and
among 310 Holdings, Inc., a Nevada corporation (the “Company”); ▇▇▇▇
▇▇▇▇▇▇▇▇▇, an individual; PAK-IT, LLC, a Florida limited liability company
(“Pak-It”); and
the selling unitholders of Pak-It as identified in Exhibit A to this
Agreement (individually, the “Pak-It Unitholder,”
and collectively, the “Pak-It Unitholders”).
The Company, Pak-It and the Pak-It Unitholders are collectively referred to
herein as the “Parties”.
WITNESSETH:
WHEREAS,
the Company is a publicly held corporation organized under the laws of the State
of Nevada;
WHEREAS,
the Company desires to acquire from the Pak-It Unitholders 100% of the issued
and outstanding membership units of Pak-It (the “Units”), and the
Pak-It Unitholders desire to sell to the Company the Units in exchange for the
issuance by the Company of an aggregate of 625,000 shares (the “Company Shares”) of
the common stock of the Company (the “Common Stock”) to the
Pak-It Unitholders as set forth in Exhibit A, on the terms and conditions set
forth herein (the “Share Exchange”),
whereby Pak-It shall become a wholly owned subsidiary of the
Company.
WHEREAS,
as additional consideration for the Units, the Company will issue a secured
promissory note in the amount of One Million Two Hundred Thousand
($1,200,000.00) dollars to the Pak-It Unitholders and assume certain liabilities
of Pak-It by issuing an additional secured promissory note, as set forth
herein.
WHEREAS,
the Pak-It Unitholders and the directors of the Company have determined, subject
to the terms and conditions set forth in this Agreement, that the transaction
contemplated hereby is desirable and in the best interests of their
shareholders, respectively. This Agreement is being entered into for
the purpose of setting forth the terms and conditions of the proposed
acquisition.
NOW,
THEREFORE, in consideration, of the promises and of the mutual representations,
warranties and agreements set forth herein, the parties hereto agree as
follows:
ARTICLE
I
THE
SHARE EXCHANGE
1.1 The Share
Exchange. Subject to the terms and conditions of this Agreement, on
the Closing Date (as hereinafter defined):
(a) the
Company shall issue and deliver to the Pak-It Unitholders 625,000 authorized but
unissued shares of Common Stock as set forth on Exhibit A hereto,
and
2
(b) the
Company shall deliver on the Closing Date the sum of One Million Two Hundred
Thousand Dollars ($1,200,000.00) in the form of a 10% secured promissory note
due on December 29, 2009 (the “Note”).
(c) the
Pak-It Unitholders shall transfer the Units as set forth on Exhibit A hereto to
the Company, such that Pak-It shall become a wholly owned subsidiary of the
Company.
(d) the
Company will assume or satisfy certain liabilities of Pak-It as set forth below
by issuing a 10% secured promissory note in the sum of Two Million
Six Hundred Sixty Five Thousand ($2,665,000.00) Dollars (the “Liability
Note”)(collectively the Note and Liability Note, the “Notes”) due on or
before December 29, 2009. Both the Note and the Liability Note shall
be secured by 10,000,000 shares of the Company’s common stock issued to the
Company’s president ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (the “Escrow Shares”) to be
held in escrow by ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP as escrow agent, pursuant to the
terms of a pledge and escrow agreement (the “Pledge Agreement”) and by a
collateral pledge of all of the membership interests and assets of Pak-It
pursuant to a loan agreement (“Loan Agreement”) and security agreement
(“Security Agreement”). Upon payment of the Note and Liability Note
the following shall occur:
1. The
notes issued to USAmeribank shall be immediately paid by the holder of the Note
and Liability Note in the total amount of $1,800,000 (the current outstanding
balance is approximately $200,000 plus “off balance sheet” L/C’s outstanding as
listed below);
2. The
$1,250,000 note issued to Private Equity Fund of West Florida, LLC (“PEF”) shall
be immediately paid, by the holder of the Note and Liability Note, including
interest accrued thereon through December 29, 2009 (estimated to be about
$50,000).
3. The
$750,000 note (the “PEF Note”) issued to Private Equity Fund of West Florida,
LLC (“PEF”) and any interest accrued thereon (estimated to be approximately
$250,000) shall be immediately assumed by the Company. As a condition
of PEF agreeing to transfer its membership units of Pak-It to the Company, if
the Company undertakes a private offering (“Offering”) of the Company’s equity
securities (the “Offering Securities”) within one year from the Closing Date,
the Company hereby agrees that PEF shall have the option during the Offering
period, to convert the PEF note and any applicable interest into the Offering
Securities, and purchase an additional amount of Offering Securities so that the
total number of Offering Securities received by PEF is 1,250,000 shares of
common stock. Upon conversion of the PEF Note into the Offering
Securities, PEF shall receive the same rights and preferences as the other
investors in the Offering.
4. The
Company shall, prior to the expiration of the Letters of Credit currently
outstanding, provide substituted collateral for the Letters of Credit (“L/C’s)
issued by USAmeribank to secure obligations of Pak-It or its subsidiary to
secure certain obligations owed to ▇▇▇▇▇ ▇▇▇▇▇▇▇ (Such L/Cs currently issued and
outstanding are presently in the amounts of $559,372 and $120,000 which must be
renewed annually in amounts equal to amounts then owed to ▇▇▇▇▇ ▇▇▇▇▇▇▇ pursuant
to the promissory note and employment agreement.) The obligation to the Company
arising under this paragraph may mature prior to the due date of the Note and
Liability Note.
3
5. The
following amounts, which are either on the Pak-It balance sheet or are
specifically related to closing this transaction and will be invoiced to Pak-It,
will be paid at or around the Closing Date but not later than December 29, 2009,
by the holder of the Note and Liability Note either from cash on hand in Pak-It,
LLC accounts or from the first payments of the Company on the Liability
Note.
|
Non
Trade AP, current debt, and fees related to sale
|
||
|
Member
Loans
|
175,000
|
|
|
Member
fees related to closing
|
125,000
|
|
|
LD
(current portion of debt)
|
116,530
|
|
|
LD
interest through 10-31-09
|
33,470
|
|
|
Other
Due Diligence Expenses
|
50,000
|
|
|
Total
|
500,000
|
|
1.2 Time and Place of
Closing. The closing (“Closing”) of the transactions contemplated by
this Agreement shall occur upon the exchange of the stock of the Company and
Pak-It Unitholders and upon the execution of the Notes, Pledge Agreement,
Security Agreement and other ancillary closing documents (collectively, the
“Transaction Documents”) as described in Section 1.1 herein. Such
Closing shall take place at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP ▇▇▇ ▇▇▇▇▇ ▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ on September 30, 2009 (the “Closing
Date”)..
1.3 Closing
Events
. At the
Closing, the Company, Pak-It, and the Pak-It Unitholders shall execute,
acknowledge, and deliver (or shall ensure to be executed, acknowledged, and
delivered), any and all certificates, opinions, financial statements, schedules,
agreements, resolutions, rulings or other instruments required by this Agreement
to be so delivered at or prior to the Closing, together with such other items as
may be reasonably requested by the parties hereto and their respective legal
counsel in order to effectuate or evidence the transactions contemplated
hereby.
4
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
The
Company represents and warrants to Pak-It and the Pak-It Unitholders that as of
the Closing Date:
2.1 Due Organization and
Qualification; Due Authorization.
(a) The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Nevada, with full corporate power and
authority to own, lease and operate its respective business and properties and
to carry on its business in the places and in the manner as presently conducted
or proposed to be conducted. The Company is in good standing as a foreign
corporation in each jurisdiction in which the properties owned, leased or
operated, or the business conducted, by it requires such qualification except
for any such failure, which when taken together with all other failures, is not
likely to have a material adverse effect on the business of the
Company.
(b) The
Company has all requisite corporate power and authority to execute and deliver
this Agreement, and to consummate the transactions contemplated hereby and
thereby. The Company has taken all corporate action necessary for the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby, and this Agreement constitutes the valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except as may be affected by bankruptcy, insolvency, moratoria or
other similar laws affecting the enforcement of creditors’ rights generally and
subject to the qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefore may
be brought, equitable remedies is subject to the discretion of the court before
which any proceeding therefore may be brought.
2.2 No Conflicts or
Defaults. The execution and delivery of this Agreement by the
Company and the consummation of the transactions contemplated hereby do not and
shall not (a) contravene the Certificate of Incorporation or By-laws of the
Company or (b) with or without the giving of notice or the passage of time (i)
violate, conflict with, or result in a breach of, or a default or loss of rights
under, any material covenant, agreement, mortgage, indenture, lease, instrument,
permit or license to which the Company is a party or by which the Company is
bound, or any judgment, order or decree, or any law, rule or regulation to which
the Company is subject, (ii) result in the creation of, or give any party the
right to create, any lien, charge, encumbrance or any other right or adverse
interest (“Liens”) upon any of
the assets of the Company, (iii) terminate or give any party the right to
terminate, amend, abandon or refuse to perform, any material agreement,
arrangement or commitment to which the Company is a party or by which the
Company’s assets are bound, or (iv) accelerate or modify, or give any party the
right to accelerate or modify, the time within which, or the terms under which,
the Company is to perform any duties or obligations or receive any rights or
benefits under any material agreement, arrangement or commitment to which it is
a party.
5
2.3 Capitalization. The
authorized capital stock of the Company immediately prior to giving effect to
the transactions contemplated hereby consists of 75,000,000 shares of which
70,000,000 are common stock at par value $.001 per share and 5,000,000 shares
are preferred stock at par value $.001 per share (“Preferred Stock”). As
of the date hereof, there are 58,100,106 shares of Common Stock issued and
outstanding and no shares of Preferred Stock outstanding. All of the outstanding
shares of common stock are, and the Common Stock when issued in accordance with
the terms hereof, will be, duly authorized, validly issued, fully paid and
nonassessable, and have not been or, with respect to the Company Shares will not
be issued in violation of any preemptive right of stockholders. There is no
outstanding voting trust agreement or other contract, agreement, arrangement,
option, warrant, call, commitment or other right of any character obligating or
entitling the Company to issue, sell, redeem or repurchase any of its
securities, and there is no outstanding security of any kind convertible into or
exchangeable for Company Common Stock. The Company has not granted registration
rights to any person.
2.4 Taxes. The
Company has filed all United States federal, state, county and local returns and
reports which were required to be filed on or prior to the date hereof in
respect of all income, withholding, franchise, payroll, excise, property, sales,
use, value-added or other taxes or levies, imposts, duties, license and
registration fees, charges, assessments or withholdings of any nature whatsoever
(together, “Taxes”), and has paid
all Taxes (and any related penalties, fines and interest) which have become due
pursuant to such returns or reports or pursuant to any assessment which has
become payable, or, to the extent its liability for any Taxes (and any related
penalties, fines and interest) has not been fully discharged, the same have been
properly reflected as a liability on the books and records of the Company and
adequate reserves therefore have been established.
2.5 Compliance with
Law. The Company is in compliance with all applicable federal,
state, local and foreign laws and regulations relating to the protection of the
environment and human health. There are no claims, notices, actions, suits,
hearings, investigations, inquiries or proceedings pending or, to the knowledge
of the Company, threatened against the Company that are based on or related to
any environmental matters or the failure to have any required environmental
permits, and there are no past or present conditions that the Company has reason
to believe are likely to give rise to any material liability or other
obligations of the Company under any environmental laws.
2.6 Permits and
Licenses. The Company has all certificates of occupancy, rights,
permits, certificates, licenses, franchises, approvals and other authorizations
as are reasonably necessary to conduct its respective business and to own,
lease, use, operate and occupy its assets, at the places and in the manner now
conducted and operated, except those the absence of which would not materially
adversely affect its respective business.
6
2.7 Litigation. To
the Company’s knowledge, there is no claim, dispute, action, suit, proceeding or
investigation pending or, to the knowledge of the Company, threatened, against
or affecting the business of the Company, or challenging the validity or
propriety of the transactions contemplated by this Agreement, at law or in
equity or admiralty or before any federal, state, local, foreign or other
governmental authority, board, agency, commission or instrumentality, nor to the
knowledge of the Company, has any such claim, dispute, action, suit, proceeding
or investigation been pending or threatened, during the twelve month period
preceding the date hereof. There is no outstanding judgment, order, writ,
ruling, injunction, stipulation or decree of any court, arbitrator or federal,
state, local, foreign or other governmental authority, board, agency, commission
or instrumentality, against or materially affecting the business of the Company.
The Company has not received any written or verbal inquiry from any federal,
state, local, foreign or other governmental authority, board, agency, commission
or instrumentality concerning the possible violation of any law, rule or
regulation or any matter disclosed in respect of its
business.
2.8 SEC
Filings; Financial
Statements.
(a) The
Company has made available to Pak-It and the Pak-It Unitholders a correct and
complete copy, or there has been available on ▇▇▇▇▇, copies of each report,
registration statement and definitive proxy statement filed by the Company with
the SEC for the 24 months prior to the date of this Agreement (the “Company SEC
Reports”), which, to the Company’s knowledge, are all the forms, reports
and documents filed by the Company with the SEC for the 24 months prior to the
date of this Agreement. As of their respective dates, to the Company’s
knowledge, the Company SEC Reports: (i) were prepared in accordance and complied
in all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such Company SEC Reports, and (ii) did not at the time
they were filed (and if amended or superseded by a filing prior to the date of
this Agreement then on the date of such filing and as so amended or superceded)
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(b) To
the Company’s knowledge, each set of financial statements (including, in each
case, any related notes thereto) contained in the Company SEC Reports comply as
to form in all material respects with the published rules and regulations of the
SEC with respect thereto, were prepared in accordance with U.S. GAAP applied on
a consistent basis throughout the periods involved (except as may be indicated
in the notes thereto) and each fairly presents in all material respects the
financial position of the Company at the respective dates thereof and the
results of its operations and cash flows for the periods indicated, except that
the unaudited interim financial statements were or are subject to normal
adjustments which were not or are not expected to have a Material Adverse Effect
on the Company taken as a whole.
2.9 Over-the-Counter Bulletin
Board Quotation.
The Company’s Common Stock is quoted on the FINRA Over-the-Counter Electronic
Bulletin Board (“OTC
BB”). There is no action or proceeding pending or, to the Company’s
knowledge, threatened against the Company by NASDAQ or The Financial Industry
Regulatory Authority, Inc. (“FINRA”) with respect to any intention by such
entities to prohibit or terminate the quotation of the Company’s Common Stock on
the OTC BB.
7
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF PAK-IT
PAK-IT
represents and warrants to the Company as of the Closing:
3.1 Due Organization and
Qualification; Subsidiaries, Due Authorization.
(a) Pak-It
is a limited liability company duly formed, validly existing and in good
standing under the laws of Florida, with full corporate power and authority to
own, lease and operate its business and properties and to the best of its
knowledge, to carry on its business in the places and in the manner as presently
conducted or proposed to be conducted. To the best of its knowledge, Pak-It is
in good standing as a foreign corporation in each jurisdiction in which the
properties owned, leased or operated, or the business conducted, by it requires
such qualification except for any such failure, which when taken together with
all other failures, is not likely to have a material adverse effect on the
business of Pak-It.
(b) Pak-It
does not own, directly or indirectly, any capital stock, equity or interest in
any corporation, firm, partnership, joint venture or other entity, other than
▇▇▇▇▇▇▇ Chemical Laboratories,
Inc., a Florida Corporation (the “Subsidiary”). The
Subsidiary is the wholly owned subsidiary of Pak-It, free and clear of all
liens. There is no contract, agreement, arrangement, option, warrant, call,
commitment or other right of any character obligating or entitling Pak-It to
issue, sell, redeem or repurchase any of its securities, and there is no
outstanding security of any kind convertible into or exchangeable for securities
of Pak-It or the Subsidiary.
(c) Pak-It
has all requisite power and authority to execute and deliver this Agreement, and
to consummate the transactions contemplated hereby and thereby. Pak-It has taken
all corporate action necessary for the execution and delivery of this Agreement
and at or prior to closing will have taken all corporate action necessary for
the consummation of the transactions contemplated hereby, and this Agreement
constitutes the valid and binding obligation of Pak-It, enforceable against
Pak-It in accordance with its terms, except as may be affected by bankruptcy,
insolvency, moratoria or other similar laws affecting the enforcement of
creditors’ rights generally and subject to the qualification that the
availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefore may be brought.
3.2 No Conflicts or
Defaults. To the best of its knowledge, the execution and delivery of
this Agreement by Pak-It and the consummation of the transactions contemplated
hereby do not and shall not (a) contravene the governing documents
of Pak-It or the Subsidiary, or (b) with or without the giving of
notice or the passage of time, (i) violate, conflict with, or result in a breach
of, or a default or loss of rights under, any material covenant, agreement,
mortgage, indenture, lease, instrument, permit or license to which Pak-It or the
Subsidiary is a party or by which Pak-It or the Subsidiary or any of their
respective assets are bound, or any judgment, order or decree, or any law, rule
or regulation to which their assets are subject, (ii) result in the creation of,
or give any party the right to create, any lien upon any of the assets of Pak-It
or the Subsidiary, (iii) terminate or give any parry the right to terminate,
amend, abandon or refuse to perform any material agreement, arrangement or
commitment to which Pak-It is a party or by which Pak-It or any of its assets
are bound, or (iv) accelerate or modify, or give any party the right to
accelerate or modify, the time within which, or the terms under which Pak-It is
to perform any duties or obligations or receive any rights or benefits under any
material agreement, arrangement or commitment to which it is a
party.
8
3.3 Capitalization. The
authorized capitalization of Pak-It consists of 1000 non-certificated membership
units. As of the date hereof, Pak-It has 100 membership units issued
and outstanding. All issued and outstanding membership units are legally issued,
fully paid and non-assessable and are not issued in violation of the preemptive
or other rights of any person.
3.4 Taxes. To the
best of its knowledge, Pak-It has filed all returns and reports which were
required to be filed on or prior to the date hereof, and has paid all Taxes (and
any related penalties, fines and interest) which have become due pursuant to
such returns or reports or pursuant to any assessment which has become payable,
or, to the extent its liability for any Taxes (and any related penalties, fines
and interest) has not been fully discharged, the same have been properly
reflected as a liability on the books and records of Pak-It and adequate
reserves therefore have been established. To the best of its knowledge, all such
returns and reports filed on or prior to the date hereof have been properly
prepared and are true, correct (and to the extent such returns reflect judgments
made by Pak-It such judgments were reasonable under the circumstances) and
complete in all material respects.
3.5 Title and Related
Matters. To the best
of its knowledge and
except as disclosed in the due diligence information provided to
Company, Pak-It has good and marketable title to and is the sole and
exclusive owner of all of its properties, inventory, interest in properties and
assets, real and personal (collectively, the “Assets”) free and
clear of all liens, pledges, charges or encumbrances. To the best of
its knowledge and except as disclosed in the due diligence information provided
to Company, Pak-It owns free and clear of any liens, claims, encumbrances,
royalty interests or other restrictions or limitations of any nature whatsoever
and all procedures, techniques, marketing plans, business plans, methods of
management or other information utilized in connection with Pak-It’s
business. No third party has any right to, and Pak-It has not
received any notice of infringement of or conflict with asserted rights of other
with respect to any product, technology, data, trade secrets, know-how,
proprietary techniques, trademarks, service marks, trade names or copyrights
which, singly on in the aggregate, if the subject of an unfavorable decision
ruling or finding, would have a materially adverse affect on the business,
operations, financial conditions or income of Pak-It or any material portion of
its properties, assets or rights.
3.6 Material Contract
Defaults. To the best of its knowledge and except as disclosed
in the due diligence information provided to Company, Pak-It is not in default
in any material respect under the terms of any outstanding contract, agreement,
lease or other commitment which is material to the business, operations,
properties, assets or condition of Pak-It, and there is no event of default in
any material respect under any such contract, agreement, lease or other
commitment in respect of which Pak-It has not taken adequate steps to prevent
such a default from occurring.
9
3.7 Insurance. To the best of its
knowledge, all of the insurable properties of Pak-It are insured for Pak-It‘s
benefit under valid and enforceable policy or policies containing substantially
equivalent coverage and will be outstanding and in full force at the Closing
Date.
3.8 Governmental
Authorizations. To the best of its knowledge, Pak-It has all
licenses, franchises, permits or other governmental authorizations legally
required to enable it to conduct its business in all material respects as
conducted on the date hereof. Except for compliance with federal and
state securities and corporation laws, as hereinafter provided, no
authorization, approval, consent or order of, or registration, declaration or
filing with, any court or other governmental body is required in connection with
the execution and delivery by Pak-It of this Agreement and the consummation of
the transactions contemplated hereby.
3.9 Compliance with
Law. To the best of its knowledge, Pak-It and the Subsidiary are
conducting their respective businesses in material compliance with all
applicable law, ordinance, rule, regulation, court or administrative order,
decree or process, or any requirement of insurance carriers material to its
business. Neither Pak-It nor the Subsidiary has received any notice of violation
or claimed violation of any such law, ordinance, rule, regulation, order,
decree, process or requirement except for OSHA violations which were satisfied
and such information is included in the due diligence information.
3.10 Litigation. To
the best of its knowledge:
(a) There
is no claim, dispute, action, suit, proceeding or investigation pending or
threatened, against or affecting Pak-It or the Subsidiary or
challenging the validity or propriety of the transactions contemplated by this
Agreement, at law or in equity or admiralty or before any federal, state, local,
foreign or other governmental authority, board, agency, commission or
instrumentality, has any such claim, dispute, action, suit, proceeding or
investigation been pending or threatened, during the 12-month period preceding
the date hereof;
(b) There
is no outstanding judgment, order, writ, ruling, injunction, stipulation or
decree of any court, arbitrator or federal, state, local, foreign or other
governmental authority, board, agency, commission or instrumentality, against or
materially affecting Pak-It or the Subsidiary; and
(c) Neither Pak-It nor the
Subsidiary has received any written or verbal inquiry from any federal, state,
local, foreign or other governmental authority, board, agency, commission or
instrumentality concerning the possible violation of any law, rule or regulation
or any matter disclosed in respect of its business except for OSHA violations
which were satisfied and such information is included in the due diligence
information.
10
ARTICLE
IV
REPRESENTATION
AND WARRANTIES OF THE PAK-IT UNITHOLDERS
Each
Pak-It Unitholder hereby represents and warrants, severally and not
jointly, to the
Company that as of the Closing:
4.1 Title to
Shares. The Pak-It Unitholders are the legal and beneficial owner of
the membership units to be transferred to the Company, and upon consummation of
the exchange contemplated herein, the Company will acquire from the Pak-It
Unitholders good and marketable title to the membership units, free and clear of
all liens excepting only such restrictions hereunder upon future transfers by
the Company, if any, as maybe imposed by applicable law.
4.2 Due
Authorization. The Pak-It Unitholders have all requisite power and
authority to execute and deliver this Agreement, and to consummate the
transactions contemplated hereby and thereby. This Agreement constitutes the
valid and binding obligation of the Pak-It Unitholder, enforceable against him
in accordance with its terms, except as may be affected by bankruptcy,
insolvency, moratoria or other similar laws affecting the enforcement of
creditors’ rights generally and subject to the qualification that the
availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefore may be brought.
4.3 Purchase for
Investment.
(a) The
Pak-It Unitholders are acquiring the Common Stock for investment for their own
account and not as nominees or agents, and not with a view to the resale or
distribution of any part thereof, and each Pak-It Unitholder has no present
intention of selling, granting any participation in, or otherwise distributing
the same. The Pak-It Unitholders further represent that they do not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participation to such person or to any third person, with
respect to any of the Common Stock.
(b) The
Pak-It Unitholders understand that the Common Stock is not registered under the
Securities Exchange Act of 1933, as amended (the “Act”) on the ground
that the sale and the issuance of securities hereunder is exempt from
registration under the Act pursuant to Section 4(2) thereof, and that the
Company’s reliance on such exemption is predicated on the Pak-It Unitholders
representations set forth herein. The Pak-It Unitholders are an “accredited
investor” as that term is defined in Rule 501(a) of Regulation D under the
Act.
4.4 Investment
Experience. The Pak-It Unitholders acknowledge that they can bear
the economic risk of this investment, and has such knowledge and experience in
financial and business matters that he is capable of evaluating the merits and
risks of the investment in the Common Stock.
4.5 Information. The
Pak-It Unitholders have carefully reviewed such information as such he deemed
necessary to evaluate an investment in the Common Stock. To the full
satisfaction of the Pak-It Unitholders, he has been furnished all materials that
he has requested relating to the Company and the issuance of the Common Stock
hereunder, and the Pak-It Unitholders have been afforded the opportunity to ask
questions of representatives of the Company to obtain any information necessary
to verify the accuracy of any representations or information made or given to
him. Notwithstanding the foregoing, nothing herein shall derogate from or
otherwise modify the representations and warranties of the Company set forth in
this Agreement, on which the Pak-It Unitholders have relied in making an
exchange of the membership units for the Common Stock.
11
4.6 Restricted
Securities. The Pak-It Unitholders understand that the Common Stock
may not be sold, transferred, or otherwise disposed of without registration
under the Act or an exemption there from, and that in the absence of an
effective registration statement covering the Common Stock or any available
exemption from registration under the Act, the Common Stock must be held
indefinitely. The Pak-It Unitholders are aware that the Common Stock may not be
sold pursuant to Rule 144 promulgated under the Act unless all of the conditions
of that Rule are met. Among the conditions for use of Rule 144 may be the
availability of current information to the public about the
Company.
ARTICLE
V
DELIVERIES
5.1 Items
to be delivered to Pak-It and the Pak-It Unitholders prior to or at Closing by
the Company.
(a) certificates
representing 625,000 shares of the Common Stock issued in the name of the Pak-It
Unitholders;
(b) the
Note, the Liability Note, Security Agreement, Loan Agreement and Pledge
Agreement;
(c) any other
document reasonably requested by the Pak-It Unitholders that he deems necessary
for the consummation of this transaction.
5.2 Items
to be delivered to the Company prior to or at Closing by Pak-It and the Pak-It
Unitholders.
(a) all
previously issued and outstanding membership units held by the Pak-It
Unitholders shall be transferred to the Company such that Pak-It shall become a
wholly owned subsidiary of the Company;
(b) any
other document reasonably requested by the Company that it deems necessary for
the consummation of this transaction.
ARTICLE
VI
CONDITIONS PRECEDENT TO CLOSING
6.1 Conditions Precedent to
Closing. The obligations of the Parties under this Agreement shall
be and are subject to fulfillment, prior to or at the Closing, of each of the
following conditions:
(a) That
each of the representations and warranties of the Parties contained herein shall
be true and correct at the time of the Closing date as if such representations
and warranties were made at such time except for changes permitted or
contemplated by this Agreement.
12
(b) That
the Parties shall have performed or complied with all agreements, terms and
conditions required by this Agreement to be performed or complied with by them
prior to or at the time of the Closing;
6.2 Conditions to Obligations of
Pak-It Unitholders. The obligations of Pak-It Unitholders shall be
subject to fulfillment prior to or at the Closing, of each of the following
conditions:
(a) The
Company shall have received all of the regulatory, shareholder and other third
party consents, permits, approvals and authorizations necessary to consummate
the transactions contemplated by this Agreement;
(b)
The Company shall have delivered a resolution from the Company’s Board approving
this transaction and authorizing the issuances of the Company
Shares;
(c) The
Escrow Shares shall have been delivered to the Escrow Agent, along with duly
executed stock powers.
(d) Deliveries. The
deliveries specified in Section 5.1 shall have been made by the
Company.
6.3 Conditions to Obligations of
the Company. The obligations of the Company shall be subject to
fulfillment at or prior to or at the Closing, of each of the following
conditions:
(a) Pak-It
and the Pak-It Unitholders shall have received all of the regulatory, membership
unit and other third party consents, permits, approvals and authorizations
necessary to consummate the transactions contemplated by this Agreement;
and
(b) The
Pak-It Unitholders shall have delivered to the Company the Units and duly
executed stock powers from the Pak-It Unitholders transferring the membership
units to the Company.
ARTICLE
VII
COVENANTS
7.1 Further
Assurances. Each of the Parties shall use its reasonable commercial
efforts to proceed promptly with the transactions contemplated herein, to
fulfill the conditions precedent for such party’s benefit or to cause the same
to be fulfilled and to execute such further documents and other papers and
perform such further acts as may be reasonably required or desirable to carry
out the provisions of this Agreement and to consummate the transactions
contemplated herein.
13
7.2 Blue Sky
Laws.
The
Company shall take any action (other than qualifying to do business in any
jurisdiction in which it is not now so qualified) required to be taken under any
applicable state securities laws in connection with the issuance of the Company
Stock in connection with this Agreement.
7.3 Fees and
Expenses.
All fees
and expenses incurred in connection with this Agreement shall be paid by the
Party incurring such fees or expenses, whether or not this Agreement is
consummated.
7.4 Indemnification and
Insurance.
(a) For a
period of one year following the Closing Date, Pak-It and Pak-It Unitholders
hereby agree as to their respective Representations and Warranties as set forth
in Articles III and IV hereof to indemnify the Company, each of the officers,
agents and directors of the Company as of the Closing Date against any loss,
liability, claim, damage or expense (including, but not limited to, any and all
expense whatsoever reasonably incurred in investigating, preparing or defending
against any litigation, commenced or threatened or any claim whatsoever), to
which it or they may become subject to or rising out of or based on any
inaccuracy appearing in or misrepresentation made in this
Agreement. The indemnification provided for in this paragraph shall
survive the Closing and consummation of the transactions contemplated hereby and
termination of this Agreement; and
(b) The
Company hereby agrees to indemnify Pak-It, each of the agents, and the Pak-It
Unitholders as of the Closing Date against any loss, liability, claim, damage or
expense (including, but not limited to, any and all expense whatsoever
reasonably incurred in investigating, preparing or defending against any
litigation, commenced or threatened or any claim whatsoever), to which it or
they may become subject arising out of or based on any inaccuracy appearing in
or misrepresentation made in this Agreement. The indemnification provided for in
this paragraph shall survive the Closing and consummation of the transactions
contemplated hereby and termination of this Agreement.
7.5 Filing Requirements.
For a period of two (2) years from the Closing Date, the Company will (A) cause
its Common Stock to continue to be registered under Section 12(b) or 12(g) of
the 1934 Act, (B) comply in all respects with its reporting and filing
obligations under the 1934 Act, and (C) comply with all requirements related to
any registration statement filed pursuant to this Agreement. The
Company will use its best efforts not to take any action or file any document
(whether or not permitted by the 1933 Act or the 1934 Act or the rules
thereunder) to terminate or suspend such registration or to terminate or suspend
its reporting and filing obligations under said acts. The Company
will continue the quotation of the Common Stock on the OTCBB and will comply in
all respects with the Company’s reporting, filing and other obligations under
the bylaws or rules of the OTCBB.
7.6 Rule 144 Opinion
Letters. For a period of two (2) years from the Closing Date,
the Company hereby agrees to pay any attorneys fees related to the issuance of
Rule 144 opinion letters drafted by Company’s counsel on behalf of the Pak-It
Unitholders pursuant to the sale of the Company Shares.
14
ARTICLE
VIII
MISCELLANEOUS
8.1 Survival of Representations,
Warranties and Agreements. Each of the Parties hereto is executing
and carrying out the provisions of this Agreement in reliance upon the
representations, warranties and covenants and agreements contained in this
agreement or at the closing of the transactions herein provided for and not upon
any investigation which it might have made or any representations, warranty,
agreement, promise or information, written or oral, made by the other party or
any other person other than as specifically set forth herein. Except as
specifically set forth in this Agreement, representations and warranties and
statements made by a party to in this Agreement or in any document or
certificate delivered pursuant hereto shall not survive the Closing Date, and no
claims made by virtue of such representations, warranties, agreements and
covenants shall be made or commenced by any party hereto from and after the
Closing Date.
8.2 Access to Books and
Records. During the course of this transaction through Closing, each
Party agrees to make available for inspection all corporate books, records and
assets, and otherwise afford to each other and their respective representatives,
reasonable access to all documentation and other information concerning the
business, financial and legal conditions of each other for the purpose of
conducting a due diligence investigation thereof. Such due diligence
investigation shall be for the purpose of satisfying each party as to the
business, financial and legal condition of each other for the purpose of
determining the desirability of consummating the proposed transaction. The
Parties further agree to keep confidential and not use for their own benefit,
except in accordance with this Agreement any information or documentation
obtained in connection with any such investigation.
8.3 Notice. All
communications, notices, requests, consents or demands given or required under
this Agreement shall be in writing and shall be deemed to have been duly given
when delivered to, or received by prepaid registered or certified mail or
recognized overnight courier addressed to, or upon receipt of a facsimile sent
to, the party for whom intended, as follows, or to such other address or
facsimile number as may be furnished by such party by notice in the manner
provided herein:
If to the
Company:
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Tel:
(▇▇▇) ▇▇▇-▇▇▇▇
With a
copy (which shall not constitute a notice) to:
▇▇▇▇▇▇
& ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
Attn:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Tel.:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
15
If to
Pak-It or the Pak-It Unitholders:
Pak-It,
LLC
Attn:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Tel.:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
With a
copy (which shall not constitute a notice) to:
Macfarlane,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn: J.
▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Tel:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
8.4 Entire
Agreement. This Agreement, and any instruments and agreements to be
executed pursuant to this Agreement, sets forth the entire understanding of the
parties hereto with respect to its subject matter, merges and supersedes all
prior and contemporaneous understandings with respect to its subject matter and
may not be waived or modified, in whole or in part, except by a writing signed
by each of the parties hereto. No waiver of any provision of this Agreement in
any instance shall be deemed to be a waiver of the same or any other provision
in any other instance. Failure of any party to enforce any provision of this
Agreement shall not be construed as a waiver of its rights under such
provision.
8.5 Successors and
Assigns. This Agreement shall be binding upon, enforceable against
and inure to the benefit of, the parties hereto and their respective heirs,
administrators, executors, personal representatives, successors and assigns, and
nothing herein is intended to confer any right, remedy or benefit upon any other
person. This Agreement may not be assigned by any party hereto except with the
prior written consent of the other parties, which consent shall not be
unreasonably withheld.
8.6 Governing
Law. This Agreement shall in all respects be governed by and
construed in accordance with the laws of the State of Nevada are applicable to
agreements made and fully to be performed in such state, without giving effect
to conflicts of law principles.
8.7 Counterparts. This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
16
8.8 Construction. Headings
contained in this Agreement are for convenience only and shall not be used in
the interpretation of this Agreement. References herein to Articles, Sections
and Exhibits are to the articles, sections and exhibits, respectively, of this
Agreement. The Disclosure Schedule is hereby incorporated herein by reference
and made a part of this Agreement. As used herein, the singular includes the
plural, and the masculine, feminine and neuter gender each includes the others
where the context so indicates.
8.9 Severability. If
any provision of this Agreement is held to be invalid or unenforceable by a
court of competent jurisdiction, this Agreement shall be interpreted and
enforceable as if such provision were severed or limited, but only to the extent
necessary to render such provision and this Agreement enforceable.
8.10 Registration Rights.
If the Company at any time proposes to register any of its securities under the
1933 Act for sale to the public, whether for its own account or for the account
of other security holders or both, except with respect to registration
statements on Forms ▇-▇, ▇-▇ or another form not available for registering the
Company Shares for sale to the public, each such time it will give at least ten
(10) days' prior written notice to the record holder of the Company Shares of
its intention so to do. Upon the written request of the Pak-It Unitholders,
received by the Company within ten (10) days after the giving of any such notice
by the Company, to register any of the Company Shares, the Company will cause
such Company Shares as to which registration shall have been so requested to be
included with the securities to be covered by the registration statement
proposed to be filed by the Company, all to the extent required to permit the
sale or other disposition of the Company Shares so registered by the holder of
such Company Shares. In the event that any registration pursuant to this Section
8.10 shall be, in whole or in part, an underwritten public offering of common
stock of the Company, the number of shares of Company Shares to be included in
such an underwriting may be reduced by the managing underwriter if and to the
extent that the Company and the underwriter shall reasonably be of the opinion
that such inclusion would adversely affect the marketing of the securities to be
sold by the Company therein. The Company will not be obligated to register the
Company Shares in that certain registration statement if the selling security
holders object to the inclusion of the Company Shares in such registration
statement.
[SIGNATURE PAGE FOLLOWS]
17
IN WITNESS WHEREOF, the
corporate parties hereto have caused this Agreement to be executed by their
respective officers, hereunto duly authorized, and entered into as of the date
first above written.
|
ATTEST:
|
By:
|
/s/ ▇▇▇▇
▇▇▇▇▇▇▇▇▇
|
|
Name: ▇▇▇▇
▇▇▇▇▇▇▇▇▇
|
||
|
Title:
Managing Member
|
||
|
ATTEST:
|
By:
|
PAK-IT,
LLC
/s/ ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇
|
|
Name:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
|
||
|
Title: Managing
Member
|
||
|
PAK-IT,
LLC UNITHOLDERS
|
||
|
▇▇▇▇▇▇▇
▇.
Seneca 24.25%
|
||
|
▇▇▇▇▇▇▇▇
▇.
▇▇▇▇▇
24.25%
|
||
|
▇▇▇▇▇▇▇
▇.
▇▇▇▇▇
2.5%
|
||
|
▇▇▇▇▇▇
▇.
▇▇▇▇
15%
|
||
|
▇▇▇▇
▇▇▇▇▇ 15%
|
||
|
Mainstreet
Equity Fund, LLC
|
||
|
By:
|
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |
|
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Manager 9%
|
||
|
Private
Equity Fund of West Florida, LLC
|
||
|
By:
|
/s/ ▇▇▇▇▇▇ Worth | |
|
▇▇▇▇▇▇ Worth,
Manager 10%
|
||
|
ATTEST:
|
▇▇▇▇
BORDVNUIK
|
|
|
By:
|
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | |
|
▇▇▇▇
▇▇▇▇▇▇▇▇▇, as an individual
|
18
EXHIBIT
A
|
Unitholder
|
Percentage
of membership units
|
Number
of
Company
Shares
|
|
Private
Equity Fund of West Florida, LLC
|
10%
|
62,500
|
|
▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
|
24.25%
|
151,563
|
|
▇▇▇▇▇▇
▇. ▇▇▇▇
|
15%
|
93,750
|
|
▇▇▇▇
▇▇▇▇▇
|
15%
|
93,750
|
|
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
|
2.5%
|
15,625
|
|
Mainstreet
Equity Fund, LLC
|
9%
|
56,250
|
|
▇▇▇▇▇▇▇
▇. Seneca
|
24.25%
|
151,563
|
19