Exhibit 10.1
STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE
by and among
SEALANT SOLUTIONS, INC.
a Delaware Corporation
and
POWER CHANNEL, INC.
a Delaware Corporation
effective as of July 1, 2003
STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE
THIS STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE, made and entered into
this 1st day of July, 2003, by and among Sealant Solutions, Inc., a Delaware
corporation with its principal place of business located at ▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Sealant"); PowerChannel, Inc., a Delaware
corporation with its principal place of business at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("PowerChannel") and the shareholders of
PowerChannel ("Shareholders") as set forth on Exhibit A attached hereto
(collectively PowerChannel and the shareholders of PowerChannel shall be known
as the "PoweChannel Group").
Premises
A. This Agreement provides for the acquisition of PowerChannel whereby
PowerChannel shall become a wholly owned subsidiary of Sealant and in connection
therewith, the issuance of an amount of shares equal to eighty-five (85%)
percent of the fully diluted outstanding shares of Sealant to the PowerChannel
shareholders or their assignees.
B. The and boards of directors of PowerChannel and Sealant 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 stockholders, respectively. This Agreement is being entered into for
the purpose of setting forth the terms and conditions of the proposed
acquisition.
Agreement
NOW, THEREFORE, on the stated premises and for and in consideration of
the mutual covenants and agreements hereinafter set forth and the mutual
benefits to the parties to be derived here from, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS AND WARRANTIES OF
SEALANT SOLUTIONS, INC.
As an inducement to and to obtain the reliance of PowerChannel, Sealant
represents and warrants as follows:
Section 1.1 Organization. Sealant is a corporation duly organized,
validly existing, and in good standing under the laws of Delaware and has the
corporate power and is duly authorized, qualified, franchised and licensed under
all applicable laws, regulations, ordinances and orders of public authorities to
own all of its properties and assets and to carry on its business in all
material respects as it is now being conducted, including qualification to do
business as a foreign corporation in the jurisdiction in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification. Included in the Schedules attached hereto
(hereinafter defined) are complete and correct copies of the articles of
incorporation, bylaws and amendments thereto as in effect on the date hereof.
The execution and delivery of this Agreement does not and the consummation of
the transactions contemplated by this Agreement in accordance with the terms
hereof will not violate any provision of Sealant's articles of incorporation or
bylaws. Sealant has full power, authority and legal right
and has taken all action required by law, its articles of incorporation, its
bylaws or otherwise to authorize the execution and delivery of this Agreement.
Section 1.2 Capitalization. The authorized capitalization of Sealant
consists of 20,000,000 Common Shares, $0.01 par value per share, and no
Preferred Shares. As of the date hereof, Sealant has 1,074,155 common shares
issued and outstanding. Sealant is presently a 1934 Exchange Act reporting
company and has filed all necessary reports, quarterly, annual and special with
the Securities and Exchange Commission of the United States on a timely basis.
All issued and outstanding shares are legally issued, fully paid and
nonassessable and are not issued in violation of the preemptive or other rights
of any person. Sealant has no securities, warrants or options authorized or
issued.
Section 1.3 Subsidiaries. Sealant has no subsidiaries.
Section 1.4 Tax Matters: Books and Records.
(a) The books and records, financial and others, of Sealant are in
all material respects complete and correct and have been
maintained in accordance with good business accounting
practices; and
(b) Sealant has no liabilities with respect to the payment of any
country, federal, state, county, or local taxes (including any
deficiencies, interest or penalties).
(c) Sealant currently has approximately $20,000 in outstanding
liabilities as set forth on Schedule 1.4 . PowerChannel has
agreed to be responsible for such outstanding liabilities.
Section 1.5 Litigation and Proceedings. There are no actions, suits,
proceedings or investigations pending or threatened by or against or affecting
Sealant or its properties, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign or before any
arbitrator of any kind that would have a material adverse affect on the
business, operations, financial condition or income of Sealant. Sealant is not
in default with respect to any judgment, order, writ, injunction, decree, award,
rule or regulation of any court, arbitrator or governmental agency or
instrumentality or of any circumstances which, after reasonable investigation,
would result in the discovery of such a default.
Section 1.6 Material Contract Defaults. Sealant 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 Sealant, and there is no event of default in
any material respect under any such contract, agreement, lease or other
commitment in respect of which Sealant has not taken adequate steps to prevent
such a default from occurring.
Section 1.7 Information. The information concerning Sealant as set
forth in this Agreement and in the attached Schedules is complete and accurate
in all material respects and does not contain any untrue statement of a material
fact or omit to state a material fact required to make the statements made in
light of the circumstances under which they were made, not misleading. Sealant's
filings with the SEC are complete and accurate in all material respects and do
not contain any untrue statement of a material fact or omit to state a material
fact required to make the statements made in light of the circumstances under
which they were made, not misleading.
Section 1.8 Title and Related Matters. Sealant 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. Sealant 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 Sealant's business.
No third party has any right to, and Sealant 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 Sealant or any material portion of its properties,
assets or rights.
Section 1.9 Contracts On the closing date:
(a) There are no material contracts, agreements franchises,
license agreements, or other commitments to which Sealant is a
party or by which it or any of its properties are bound:
(b) Sealant is not a party to any contract, agreement, commitment
or instrument or subject to any charter or other corporate
restriction or any judgment, order, writ, injunction, decree
or award materially and adversely affects, or in the future
may (as far as Sealant can now foresee) materially and
adversely affect, the business, operations, properties, assets
or conditions of Sealant; and
(c) Sealant s not a party to any material oral or written: (I)
contract for the employment of any officer or employee; (ii)
profit sharing, bonus, deferred compensation, stock option,
severance pay, pension benefit or retirement plan, agreement
or arrangement covered by Title IV of the Employee Retirement
Income Security Act, as amended; (iii) agreement, contract or
indenture relating to the borrowing of money; (iv) guaranty of
any obligation for the borrowing of money or otherwise,
excluding endorsements made for collection and other
guaranties, of obligations, which, in the aggregate exceeds
$1,000; (v) consulting or other contract with an unexpired
term of more than one year or providing for payments in excess
of $10,000 in the aggregate; (vi) collective bargaining
agreement; (vii) contract, agreement or other commitment
involving payments by it for more than $10,000 in the
aggregate.
Section 1.10 Compliance With Laws and Regulations. To the best of
Sealant's knowledge and belief, Sealant has complied with all applicable
statutes and regulations of any federal, state or other governmental entity or
agency thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets or condition of
Sealant or would not result in Sealant incurring material liability.
Section 1.11 Insurance. All of the insurable properties of Sealant are
insured for Sealant`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.
Section 1.12 Approval of Agreement. The directors of Sealant have
authorized the execution and delivery of the Agreement by and have approved the
transactions contemplated hereby.
Section 1.13 Material Transactions or Affiliations. There are no
material contracts or agreements of arrangement between Sealant and any person,
who was at the time of such contract, agreement or arrangement an officer,
director or person owning of record, or known to beneficially own ten percent
(10%) or more of the issued and outstanding Common Shares of Sealant and which
is to be performed in whole or in part after the date hereof. Sealant has no
commitment, whether written or oral, to lend any funds to, borrow any money from
or enter into material transactions with any such affiliated person.
Section 1.14 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to which Sealant is a
party or to which any of its properties or operations are subject.
Section 1.15 Governmental Authorizations. Sealant 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
Sealant of this Agreement and the consummation of the transactions contemplated
hereby.
Section 1.16 Exchange Act Registration. As of the date hereof, (a) the
Sealant Common Stock is registered under Section 12(g) of the Exchange Act, and
(b) Sealant is in full compliance with all reporting requirements of the
Exchange Act.
Section 1.17 SEC Documents and Financial Statements. Sealant has filed
on a timely basis all documents required to be filed by it with the SEC since
January 1, 2002 (all such documents filed since January 1, 2002 and prior to the
date hereof are referred to as the "Sealant SEC Documents"). Complete and
correct copies of the Sealant SEC Documents have been made available to
PowerChannel. As of their respective dates, or if amended as of the date of the
last such amendment, the Sealant SEC Documents complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as the case may
be, and none of the Sealant SEC Documents as of the date thereof contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. Complete
and accurate copies of the unaudited consolidated balance sheet, consolidated
statements of operations, consolidated statements of stockholders' equity and
consolidated statements of cash flows (together with any supplementary
information thereto) of Sealant have been provided to PowerChannel. The Sealant
Financial Statements fairly present, in all material respects, the consolidated
financial position of Sealant, as of and for the respective dates thereof, and
the consolidated results of its operations and its consolidated cash flows for
the respective periods then ended (subject, in the case of the Sealant Interim
Financial Information, to normal year-end audit adjustments and to any other
adjustments described therein) in conformity with GAAP during the periods
involved (except as may be indicated therein or in the notes thereto and the
Sealant Interim Financial Information do not contain the footnotes required by
GAAP). Since March 31, 2003, Sealant has not made any change in the accounting
practices or policies applied in the preparation of its financial statements,
except as may be required by GAAP.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
OF ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC. AND
▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC. SHAREHOLDERS
As an inducement to, and to obtain the reliance of Sealant,
PowerChannel and the PowerChannel Shareholders represent and warrant as follows:
Section 2.1 Organization. PowerChannel is a corporation duly organized,
validly existing and in good standing under the laws of Delaware and has the
corporate power and is duly authorized, qualified, franchised and licensed under
all applicable laws, regulations, ordinances and orders of public authorities to
own all of its properties and assets and to carry on its business in all
material respects as it is now being conducted, including qualification to do
business as a foreign entity in the country or states in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification. Included in the Attached Schedules (as hereinafter
defined) are complete and correct copies of the articles of incorporation,
bylaws and amendments thereto as in effect on the date hereof. The execution and
delivery of this Agreement does not and the consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof will not,
violate any provision of PowerChannel's certificate of incorporation or bylaws.
PowerChannel has full power, authority and legal right and has taken all action
required by law, its articles of incorporation, bylaws or otherwise to authorize
the execution and delivery of this Agreement.
Section 2.2 Capitalization. The authorized capitalization of
PowerChannel consists of 100,000,000 shares, $.001 par value and no preferred
shares. As of the date hereof, there are 24,456,430 shares issued and
outstanding.
All issued and outstanding common shares have been legally issued,
fully paid, are nonassessable and not issued in violation of the preemptive
rights of any other person. PowerChannel has no other securities, warrants or
options authorized or issued.
Section 2.3 Subsidiaries. PowerChannel has no subsidiaries.
Section 2.4 Tax Matters; Books & Records
(a) The books and records, financial and others, of PowerChannel
are in all material respects complete and correct and have
been maintained in accordance with good business accounting
practices; and
(b) PowerChannel has no liabilities with respect to the payment of
any country, federal, state, county, local or other taxes
(including any deficiencies, interest or penalties).
(c) PowerChannel shall remain responsible for all debts incurred
prior to the closing.
Section 2.5 Information. The information concerning PowerChannel as set
forth in this Agreement and in the attached Schedules is complete and accurate
in all material respects and does not contain any untrue statement of a material
fact or omit to state a material fact required to make the
statements made, in light of the circumstances under which they were made, not
misleading.
Section 2.6 Title and Related Matters. PowerChannel has good and
marketable title to and is the sole and exclusive owner of all of its
properties, inventory, interests in properties and assets, real and personal
(collectively, the "Assets") free and clear of all liens, pledges, charges or
encumbrances. Except as set forth in the Schedules attached hereto, PowerChannel
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 PowerChannel's business. Except as set
forth in the attached Schedules, no third party has any right to, and
PowerChannel has not received any notice of infringement of or conflict with
asserted rights of others with respect to any product, technology, data, trade
secrets, know-how, proprietary techniques, trademarks, service marks, trade
names or copyrights which, singly or 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 PowerChannel or
any material portion of its properties, assets or rights.
Section 2.7 Litigation and Proceedings. There are no actions, suits or
proceedings pending or threatened by or against or affecting PowerChannel, at
law or in equity, before any court or other governmental agency or
instrumentality, domestic or foreign or before any arbitrator of any kind that
would have a material adverse effect on the business, operations, financial
condition, income or business prospects of PowerChannel. PowerChannel does not
have any knowledge of any default on its part with respect to any judgement,
order, writ, injunction, decree, award, rule or regulation of any court,
arbitrator or governmental agency or instrumentality.
Section 2.8 Contracts. On the Closing Date:
(a) There are no material contracts, agreements, franchises,
license agreements, or other commitments to which PowerChannel
is a party or by which it or any of its properties are bound;
(b) PowerChannel is not a party to any contract, agreement,
commitment or instrument or subject to any charter or other
corporate restriction or any judgment, order, writ,
injunction, decree or award which materially and adversely
affects, or in the future may (as far as PowerChannel can now
foresee) materially and adversely affect, the business,
operations, properties, assets or conditions of PowerChannel;
and
(c) PowerChannel is not a party to any material oral or written:
(i) contract for the employment of any officer or employee;
(ii) profit sharing, bonus, deferred compensation, stock
option, severance pay, pension, benefit or retirement plan,
agreement or arrangement covered by Title IV of the Employee
Retirement Income Security Act, as amended; (iii) agreement,
contract or indenture relating to the borrowing of money; (iv)
guaranty of any obligation for the borrowing of money or
otherwise, excluding endorsements made for collection and
other guaranties of obligations, which, in the aggregate
exceeds $1,000; (v) consulting or other contract with an
unexpired term of more than one year or providing for payments
in excess of $10,000 in the aggregate; (vi) collective
bargaining agreement; (vii) contract, agreement, or other
commitment involving payments by it for more than $10,000 in
the aggregate.
Section 2.9 No Conflict With Other Instruments.The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to which PowerChannel
is a party or to which any of its properties or operations are subject.
Section 2.10 Material Contract Defaults. To the best of PowerChannel's
knowledge and belief, 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
PowerChannel, and there is no event of default in any material respect under any
such contract, agreement, lease or other commitment in respect of which
PowerChannel has not taken adequate steps to prevent such a default from
occurring.
Section 2.11 Governmental Authorizations. To the best of PowerChannel's
knowledge, PowerChannel has all licenses, franchises, permits and other
governmental authorizations that are legally required to enable it to conduct
its business operations in all material respects as conducted on the date
hereof. Except for compliance with federal and state securities or corporation
laws, 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 PowerChannel of the transactions
contemplated hereby.
Section 2.12 Compliance With Laws and Regulations. To the best of
PowerChannel's knowledge and belief, PowerChannel has complied with all
applicable statutes and regulations of any federal, state or other governmental
entity or agency thereof, except to the extent that noncompliance would not
materially and adversely affect the business, operations, properties, assets or
condition of PowerChannel or would not result in PowerChannel 's incurring any
material liability.
Section 2.13 Insurance. All of the insurable properties of PowerChannel
are insured for PowerChannel`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.
Section 2.14 Approval of Agreement. The directors of PowerChannel have
authorized the execution and delivery of the Agreement and have approved the
transactions contemplated hereby.
Section 2.15 Material Transactions or Affiliations. As of the Closing
Date, there will exist no material contract, agreement or arrangement between
PowerChannel and any person who was at the time of such contract, agreement or
arrangement an officer, director or person owning of record, or known by
PowerChannel to own beneficially, ten percent (10%) or more of the issued and
outstanding Common Shares of PowerChannel and which is to be performed in whole
or in part after the date hereof except with regard to an agreement with the
PowerChannel shareholders providing for the distribution of cash to provide for
payment of federal and state taxes on Subchapter S income. PowerChannel has no
commitment, whether written or oral, to lend any funds to, borrow any money from
or enter into any other material transactions with, any such affiliated person.
Section 2.16 Filings. PowerChannel covenants that it will assist
Sealant in the preparation of all filings required by the Securities Exchange
Act in a timely manner, including but not limited to, the filing of a Form 8K
within fifteen (15) days after the execution of this Agreement and the delivery
of the audited financial statements for PowerChannel in sufficient time to allow
for the filing of an amended 8K with the audited financial statements within
sixty (60) days thereafter.
Section 2.17 Investment Intent. Each of the PowerChannel shareholders
is entering into this Agreement for its own account and not with a view to any
distribution of the Sealant Shares acquired by it, and it has no present
arrangement to sell any of its Sealant Shares to or through any Person, provided
that this representation shall not be construed as an undertaking to hold any
Sealant Shares for any minimum or other specific term, and each of the
PowerChannel shareholders reserves the right to dispose of its Sealant Shares at
any time in accordance with Applicable Law.
Section 2.18 Sophistication. Each of the PowerChannel Shareholders is a
sophisticated investor, as described in Rule 506(b)(2)(ii) under the Securities
Act and has such experience in business and financial matters that it is capable
of evaluating the merits and risks of an investment in the Sealant Common Stock.
The Transferors acknowledge that an investment in the Sealant Common Stock is
speculative and involves a high degree of risk.
Section 2.19 Access to Information. Each of the PowerChannel
shareholders has received or had access to all documents, records and other
information pertaining to its investment in the Sealant Common Stock that it has
requested, including documents filed by Sealant under the Exchange Act, and has
been given the opportunity to meet or have telephonic discussions with the
Sealant Representatives, to ask questions of them, to receive answers concerning
the terms and conditions of this investment and to obtain information that
Sealant possesses or can acquire without unreasonable effort or expense that is
necessary to verify the accuracy of the information provided to the PowerChannel
shareholders.
Section 2.20 Manner of Sale. At no time were the PowerChannel
shareholders presented with or solicited by or through any leaflet, public
promotional meeting, television advertisement or any other form of general
solicitation or advertising relating to Sealant or any investment in the Sealant
Common Stock.
ARTICLE III
EXCHANGE PROCEDURE AND OTHER CONSIDERATION
Section 3.1 Share Exchange/Delivery of PowerChannel Securities. On the
Closing Date, the holders of all of the PowerChannel Common Shares shall deliver
to Sealant (i) certificates or other documents evidencing all of the issued and
outstanding PowerChannel Common Shares, duly
endorsed in blank or with executed power attached thereto in transferrable form.
On the Closing Date, all previously issued and outstanding Common Shares of
PowerChannel shall be transferred to Sealant , so that PowerChannel shall become
a wholly owned subsidiary of Sealant.
Section 3.2 Issuance of Sealant Common Shares. In exchange for all of
the PowerChannel Common Shares tendered pursuant to Section 3.1, Sealant shall
issue to the PowerChannel shareholders a total of Sealant common shares equal to
eighty five (85%) percent of the fully diluted outstanding shares of Sealand.
Such shares are restricted in accordance with Rule 144 of the Securities Act of
1933.
Section 3.3 Additional Consideration. Upon the Closing Date, Sealant
will enter into a consulting agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇, the current Chief
Executive Officer of Sealant. Pursuant to such consulting agreement, ▇▇. ▇▇▇▇▇
be paid $500 per month for twelve months and shall received restricted common
stock of Sealant equal to ten (10%) percent of the fully diluted outstanding
shares of Sealant. Such shares are restricted in accordance with Rule 144 of the
Securities Act of 1933. ▇▇. ▇▇▇▇▇ shall provide PowerChannel with a right of
first refusal with regard to the sale of any portion of his Sealant shares. This
right shall be evidenced by an option agreement to purchase his current Sealant
shares and the Sealant shares issued to him pursuant to this section. Such
agreement shall be upon terms and conditions mutually agreeable to the parties.
During the term of the option agreement, ▇▇. ▇▇▇▇▇ shall not encumber his shares
in any manner.
Section 3.4 Events Prior to Closing. Upon execution hereof or as soon
thereafter as practical, management of Sealant and PowerChannel shall execute,
acknowledge and deliver (or shall cause 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, 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, subject only to the
conditions to Closing referenced herein below.
Section 3.5 Closing. The closing ("Closing") of the transactions
contemplated by this Agreement shall be on or about July 1, 2003 ("Closing
Date").
Section 3.6 Termination.
(a) This Agreement may be terminated by the board of directors or
majority interest of Shareholders of either Sealant or
PowerChannel, respectively, at any time prior to the Closing
Date if:
(i) there shall be any action or proceeding before any
court or any governmental body which shall seek to
restrain, prohibit or invalidate the transactions
contemplated by this Agreement and which, in the
judgement of such board of directors, made in good
faith and based on the advice of its legal counsel,
makes it inadvisable to proceed with the exchange
contemplated by this Agreement; or
(ii) any of the transactions contemplated hereby are
disapproved by any regulatory authority whose
approval is required to consummate such transactions.
In the event of termination pursuant to this paragraph (a) of this
Section 3.5, no obligation, right, or liability shall arise hereunder and each
party shall bear all of the expenses incurred by it in connection with the
negotiation, drafting and execution of this Agreement and the transactions
herein contemplated.
(b) This Agreement may be terminated at any time prior to the
Closing Date by action of the board of directors of Sealant if
PowerChannel shall fail to comply in any material respect with
any of its covenants or agreements contained in this Agreement
or if any of the representations or warranties of PowerChannel
contained herein shall be inaccurate in any material respect,
which noncompliance or inaccuracy is not cured after 20 days
written notice thereof is given to PowerChannel. If this
Agreement is terminated pursuant to this paragraph (b) of this
Section 3.5, this Agreement shall be of no further force or
effect and no obligation, right or liability shall arise
hereunder.
(c) This Agreement may be terminated at any time prior to the
Closing Date by action of the board of directors of
PowerChannel if Sealant shall fail to comply in any material
respect with any of its covenants or agreements contained in
this Agreement or if any of the representations or warranties
of Sealant contained herein shall be inaccurate in any
material respect, which noncompliance or inaccuracy is not
cured after 20 days written notice thereof is given to
Sealant. If this Agreement is terminated pursuant to this
paragraph (d) of this Section 3.5, this Agreement shall be of
no further force or effect and no obligation, right or
liability shall arise hereunder.
In the event of termination pursuant to paragraph (b) and (c) of this
Section 3.5, the breaching party shall bear all of the expenses incurred by the
other party in connection with the negotiation, drafting and execution of this
Agreement and the transactions herein contemplated.
Section 3.6 Directors of Sealant After Acquisition. After the Closing
Date, ▇▇▇▇▇▇▇ ▇▇▇▇▇ shall remain on the Board of Directors of Sealant and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ will be appointed to serve on the Board of Directors of Sealant. Each
director shall hold office until his successor shall have been duly elected and
shall have qualified or until his earlier death, resignation or removal.
Section 3.7 Officers of Sealant. Upon the closing, ▇▇▇▇▇▇▇ ▇▇▇▇▇ shall
resign from Sealant in all of his current capacities except as set forth in
Section 3.6 and there shall be no further compensation due him under his
employment agreement. The following persons shall be elected as officers of
Sealant in accordance with procedures set forth in the Sealant bylaws:
NAME OFFICE
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ President, Chief
Executive Officer, Chief Financial Officer
and Secretary
ARTICLE IV
SPECIAL COVENANTS
Section 4.1 Access to Properties and Records. Prior to closing, Sealant
and PowerChannel will each afford to the officers and authorized representatives
of the other full access to the properties, books and records of each other, in
order that each may have full opportunity to make
such reasonable investigation as it shall desire to make of the affairs of the
other and each will furnish the other with such additional financial and
operating data and other information as to the business and properties of each
other, as the other shall from time to time reasonably request.
Section 4.2 Availability of Rule 144. Sealant and PowerChannel
shareholders holding "restricted securities, " as that term is defined in Rule
144 promulgated pursuant to the Securities Act will remain as "restricted
securities". Sealant is under no obligation to register such shares under the
Securities Act, or otherwise. The stockholders of Sealant and PowerChannel
holding restricted securities of Sealant and PowerChannel as of the date of this
Agreement and their respective heirs, administrators, personal representatives,
successors and assigns, are intended third party beneficiaries of the provisions
set forth herein. The covenants set forth in this Section 4.2 shall survive the
Closing and the consummation of the transactions herein contemplated.
Section 4.3 Special Covenants and Representations Regarding the Sealant
Common Shares to be Issued in the Exchange. The consummation of this Agreement,
including the issuance of the Sealant Common Shares to the Shareholders of
PowerChannel as contemplated hereby, constitutes the offer and sale of
securities under the Securities Act, and applicable state statutes. Such
transaction shall be consummated in reliance on exemptions from the registration
and prospectus delivery requirements of such statutes which depend, inter alia,
upon the circumstances under which the PowerChannel Shareholders acquire such
securities.
Section 4.4 Third Party Consents. Sealant and PowerChannel agree to
cooperate with each other in order to obtain any required third party consents
to this Agreement and the transactions herein contemplated.
Section 4.5 Actions Prior and Subsequent to Closing.
(a) From and after the date of this Agreement until the Closing Date,
except as permitted or contemplated by this Agreement, Sealant and PowerChannel
will each use its best efforts to:
(i) maintain and keep its properties in states of good repair
and condition as at present, except for depreciation due to ordinary
wear and tear and damage due to casualty;
(ii) maintain in full force and effect insurance comparable in
amount and in scope of coverage to that now maintained by it;
(iii) perform in all material respects all of its obligations
under material contracts, leases and instruments relating to or
affecting its assets, properties and business;
(b) From and after the date of this Agreement until the Closing Date,
Sealant will not, without the prior consent of PowerChannel:
(i) except as otherwise specifically set forth herein, make
any change in its articles of incorporation or bylaws;
(ii) declare or pay any dividend on its outstanding Common
Shares, except as may otherwise be required by law, or effect any stock
split or otherwise change its capitalization, except as provided
herein;
(iii) enter into or amend any employment, severance or
agreements or arrangements with any directors or officers;
(iv) grant, confer or award any options, warrants, conversion
rights or other rights not existing on the date hereof to acquire any
Common Shares; or
(v) purchase or redeem any Common Shares.
Section 4.6 Indemnification.
(a) Sealant hereby agrees to indemnify PowerChannel, each of the
officers, agents and directors and current shareholders of
PowerChannel 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) PowerChannel hereby agrees to indemnify Sealant, each of the
officers, agents, directors and current shareholders of
Sealant 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.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF SEALANT
The obligations of PowerChannel under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 5.1 Accuracy of Representations. The representations and
warranties made by Sealant in this Agreement were true when made and shall be
true at the Closing Date with the same force and effect as if such
representations and warranties were made at the Closing Date (except for changes
therein permitted by this Agreement), and Sealant shall have performed or
compiled with all covenants and conditions required by this Agreement to be
performed or complied with by Sealant prior to or at the Closing. PowerChannel
shall be furnished with a certificate, signed by a duly authorized officer of
Sealant and dated the Closing Date, to the foregoing effect.
Section 5.2 Director Approval. The Board of Directors of Sealant shall
have approved this Agreement and the transactions contemplated herein.
Section 5.3 Officer's Certificate. PowerChannel shall have been
furnished with a certificate dated the Closing Date and signed by a duly
authorized officer of Sealant to the effect that: (a) the representations and
warranties of Sealant set forth in the Agreement and in all Exhibits, Schedules
and other documents furnished in connection herewith are in all material
respects true and correct as if made on the Effective Date; (b) Sealant has
performed all covenants, satisfied all conditions, and complied
with all other terms and provisions of this Agreement to be performed, satisfied
or complied with by it as of the Effective Date; (c) since such date and other
than as previously disclosed to PowerChannel, Sealant has not entered into any
material transaction other than transactions which are usual and in the ordinary
course if its business; and (d) no litigation, proceeding, investigation or
inquiry is pending or, to the best knowledge of Sealant, threatened, which might
result in an action to enjoin or prevent the consummation of the transactions
contemplated by this Agreement or, to the extent not disclosed in the Sealant
Schedules, by or against Sealant which might result in any material adverse
change in any of the assets, properties, business or operations of Sealant.
Section 5.4 Shareholder Vote. ▇▇▇▇▇▇▇ ▇▇▇▇▇, a holder of the majority
of the issued and outstanding shares of Sealant agrees to vote in favor of this
Agreement.
Section 5.5 Amend to Articles of Incorporation and Capitalization.
Prior to the Closing Date, Sealant will amend its Articles of Incorporation to
change its corporate name and capitalization in a manner satisfactory to
PowerChannel.
Section 5.6 No Material Adverse Change. Prior to the Closing Date,
there shall not have occurred any material adverse change in the financial
condition, business or operations of nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business or operations of Sealant .
Section 5.7 Other Items. PowerChannel shall have received such further
documents, certificates or instruments relating to the transactions contemplated
hereby as PowerChannel may reasonably request.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF SEALANT
The obligations of Sealant under this Agreement are subject to the
satisfaction, at or before the Closing date (unless otherwise indicated herein),
of the following conditions:
Section 6.1 Accuracy of Representations. The representations and
warranties made by PowerChannel in this Agreement were true when made and shall
be true as of the Closing Date (except for changes therein permitted by this
Agreement) with the same force and effect as if such representations and
warranties were made at and as of the Closing Date, and PowerChannel shall have
performed and complied with all covenants and conditions required by this
Agreement to be performed or complied with by PowerChannel prior to or at the
Closing. Sealant shall have been furnished with a certificate, signed by a duly
authorized executive officer of PowerChannel and dated the Closing Date, to the
foregoing effect.
Section 6.2 Director Approval. The Board of Directors of PowerChannel
shall have approved this Agreement and the transactions contemplated herein.
Section 6.3 Officer's Certificate. Sealant shall be furnished with a
certificate dated the Closing date and signed by a duly authorized officer of
PowerChannel to the effect that: (a) the representations and warranties of
PowerChannel set forth in the Agreement and in all Exhibits, Schedules and other
documents furnished in connection herewith are in all material respects true and
correct as if made on the Effective Date; and (b) PowerChannel had performed all
covenants, satisfied
all conditions, and complied with all other terms and provisions of the
Agreement to be performed, satisfied or complied with by it as of the Effective
Date.
Section 6.4 No Material Adverse Change. Prior to the Closing Date,
there shall not have occurred any material adverse change in the financial
condition, business or operations of nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business or operations of
PowerChannel.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Brokers and Finders. Each party hereto hereby represents
and warrants that it is under no obligation, express or implied, to pay certain
finders in connection with the bringing of the parties together in the
negotiation, execution, or consummation of this Agreement. The parties each
agree to indemnify the other against any claim by any third person for any
commission, brokerage or finder's fee or other payment with respect to this
Agreement or the transactions contemplated hereby based on any alleged agreement
or understanding between the indemnifying party and such third person, whether
express or implied from the actions of the indemnifying party.
Section 7.2 Law, Forum and Jurisdiction. This Agreement shall be
construed and interpreted in accordance with the laws of the State of Florida,
United States of America.
Section 7.3 Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if personally delivered to it or
sent by registered mail or certified mail, postage prepaid, or by prepaid
telegram addressed as follows:
If to Sealant: ▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to PowerChannel: ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given as of the date so delivered, mailed or telegraphed.
Section 7.4 Attorneys' Fees. In the event that any party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the breaching party or parties shall reimburse the
non-breaching party or parties for all costs, including reasonable attorneys'
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
Section 7.5 Confidentiality. Each party hereto agrees with the other
party that, unless and until the transactions contemplated by this Agreement
have been consummated, they and their representatives will hold in strict
confidence all data and information obtained with respect to another party or
any subsidiary thereof from any representative, officer, director or employee,
or from any books
or records or from personal inspection, of such other party, and shall not use
such data or information or disclose the same to others, except: (i) to the
extent such data is a matter of public knowledge or is required by law to be
published; and (ii) to the extent that such data or information must be used or
disclosed in order to consummate the transactions contemplated by this
Agreement.
Section 7.6 Schedules; Knowledge. Each party is presumed to have full
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement.
Section 7.7 Third Party Beneficiaries.This contract is solely between
Sealant and PowerChannel and except as specifically provided, no director,
officer, stockholder, employee, agent, independent contractor or any other
person or entity shall be deemed to be a third party beneficiary of this
Agreement.
Section 7.8 Entire Agreement.This Agreement represents the entire
agreement between the parties relating to the subject matter hereof. This
Agreement alone fully and completely expresses the agreement of the parties
relating to the subject matter hereof. There are no other courses of dealing,
understanding, agreements, representations or warranties, written or oral,
except as set forth herein. This Agreement may not be amended or modified,
except by a written agreement signed by all parties hereto.
Section 7.9 Survival; Termination. The representations, warranties and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for 18 months.
Section 7.10 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
Section 7.11 Amendment or Waiver. Every right and remedy provided
herein shall be cumulative with every other right and remedy, whether conferred
herein, at law, or in equity, and may be enforced concurrently herewith, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may be amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance hereof may be extended by a
writing signed by the party or parties for whose benefit the provision is
intended.
Section 7.12 Expenses. Each party herein shall bear all of their
respective cost s and expenses incurred in connection with the negotiation of
this Agreement and in the consummation of the transactions provided for herein
and the preparation thereof.
Section 7.13 Headings; Context. The headings of the sections and
paragraphs contained in this Agreement are for convenience of reference only and
do not form a part hereof and in no way modify, interpret or construe the
meaning of this Agreement.
Section 7.14 Benefit. This Agreement shall be binding upon and shall
inure only to the benefit of the parties hereto, and their permitted assigns
hereunder. This Agreement shall not be assigned by any party without the prior
written consent of the other party.
Section 7.15 Public Announcements. Except as may be required by law,
neither party shall make any public announcement or filing with respect to the
transactions provided for herein without the prior consent of the other party
hereto.
Section 7.16 Severability. In the event that any particular provision
or provisions of this Agreement or the other agreements contained herein shall
for any reason hereafter be determined to be unenforceable, or in violation of
any law, governmental order or regulation, such unenforceability or violation
shall not affect the remaining provisions of such agreements, which shall
continue in full force and effect and be binding upon the respective parties
hereto.
Section 7.17 Failure of Conditions; ▇▇▇▇▇▇▇▇▇▇▇.▇▇ the event of any of
the conditions specified in this Agreement shall not be fulfilled on or before
the Closing Date, either of the parties have the right either to proceed or,
upon prompt written notice to the other, to terminate and rescind this
Agreement. In such event, the party that has failed to fulfill the conditions
specified in this Agreement will liable for the other parties legal fees. The
election to proceed shall not affect the right of such electing party reasonably
to require the other party to continue to use its efforts to fulfill the unmet
conditions.
Section 7.18 No Strict Construction. The language of this Agreement
shall be construed as a whole, according to its fair meaning and intendment, and
not strictly for or against either party hereto, regardless of who drafted or
was principally responsible for drafting the Agreement or terms or conditions
hereof.
Section 7.19 Execution Knowing and Voluntary. In executing this
Agreement, the parties severally acknowledge and represent that each: (a) has
fully and carefully read and considered this Agreement; (b) has been or has had
the opportunity to be fully apprized by its attorneys of the legal effect and
meaning of this document and all terms and conditions hereof; (c) is executing
this Agreement voluntarily, free from any influence, coercion or duress of any
kind.
Section 7.20 Amendment. At any time after the Closing Date, this
Agreement may be amended by a writing signed by both parties, with respect to
any of the terms contained herein, and any term or condition of this Agreement
may be waived or the time for performance hereof may be extended by a writing
signed by the party or parties for whose benefit the provision is intended.
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:
SEALANT SOLUTIONS, INC.
______________________________ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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ATTEST: ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
_________________________ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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