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STOCK AND MEMBERSHIP INTEREST PURCHASE AGREEMENT

LLC Membership Agreement

STOCK AND MEMBERSHIP INTEREST PURCHASE AGREEMENT | Document Parties: BROOKSIDE TECHNOLOGY HOLDINGS, CORP. | Standard Tel Acquisition, Inc | Standard Tel Acquisition, LLC | Standard Tel Networks, LLC | Trans-West Network Solutions, Inc You are currently viewing:
This LLC Membership Agreement involves

BROOKSIDE TECHNOLOGY HOLDINGS, CORP. | Standard Tel Acquisition, Inc | Standard Tel Acquisition, LLC | Standard Tel Networks, LLC | Trans-West Network Solutions, Inc

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Title: STOCK AND MEMBERSHIP INTEREST PURCHASE AGREEMENT
Governing Law: Florida     Date: 9/29/2008
Law Firm: Sheppard Mullin    

STOCK AND MEMBERSHIP INTEREST PURCHASE AGREEMENT, Parties: brookside technology holdings  corp. , standard tel acquisition  inc , standard tel acquisition  llc , standard tel networks  llc , trans-west network solutions  inc
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Exhibit 2.01

STOCK AND MEMBERSHIP INTEREST PURCHASE AGREEMENT

by and among

Standard Tel Acquisitions, LLC

and

Trans-West Network Solutions, ProLogic Communications, Inc.,
Michael Promotico, Craig Scarborough, Keith Askew,
Herbert C. Rosen, Sam Standridge, and Peggy Standridge

 


 

STOCK PURCHASE AGREEMENT

     THIS STOCK AND MEMBERSHIP INTEREST PURCHASE AGREEMENT (this “ Agreement ”), dated as of this 17th day of July, 2008, is by and among Standard Tel Acquisitions, LLC (the “ Purchaser ”), and Trans-West Network Solutions, Inc., d/b/a Standard Tel, a California corporation (“ Trans-West ”), ProLogic Communications, Inc., a Nevada corporation (“ ProLogic ”), Michael Promotico, Herbert C. Rosen, Sam Standridge, and Peggy Standridge (each a “ Trans-West Shareholder ” and collectively “ Trans-West Shareholders ”), and Keith Askew and Craig Scarborough (each a “ ProLogic Shareholder ” and collectively the “ ProLogic Shareholders ”).

RECITALS

     A. The Trans-West Shareholders are the only owners of all of the issued and outstanding shares (the “ Shares ”) of common stock of Trans-West;

     B. The ProLogic Shareholders are the registered and beneficial owners of all of the issued and outstanding shares of common stock of ProLogic;

     C. On June 1, 2006, Trans-West and ProLogic formed Standard Tel Networks, LLC (the “ Company ”), entered into an operating agreement for the operation of the Company (the “ Operating Agreement ”) and contributed all their assets to the Company, and since such time, the Company business has been operated through the Company;

     D. Trans-West and ProLogic (collectively the “ Members ”) are the only owners of all of the issued and outstanding membership interests (the “ Interests ”) of the Company;

     E. The Company is in the business of selling, designing, analyzing and implementing converged Voice over IP (VoIP), data and wireless business communications systems and solutions for commercial organizations of all types and sizes in the United States (collectively, such business activities conducted by the Company together with related activities and business conducted by the Company shall be referred to herein as the “ Company Business ”);

     F. The Trans-West Shareholders desire to sell to the Purchaser, and the Purchaser desires to purchase from the Trans-West Shareholders, all of the Shares, subject to the terms and conditions set forth in this Agreement; and

     G. ProLogic desires to sell to Purchaser, and the Purchaser desires to purchase from ProLogic, all of ProLogic’s Interest in the Company, subject to the terms and conditions set forth in this Agreement.

      NOW, THEREFORE , in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

 


 

ARTICLE I DEFINITIONS

      “Actual Adjusted EBITDA” has the meaning set forth in Section 2.4 .

      “Adjusted EBITDA” means the Company’s earnings before interest, depreciation and amortization for the twelve-month period ending May 31, 2008, as historically calculated by the Company and consistent with the Financial Statements, adjusted, however, as indicated in Schedule 2.3(a) . The parties hereto agree that the line item on Schedule 2.3(a) entitled “pro-rated payroll addbacks” is to remain fixed at $769,789, regardless of the Purchaser’s post-closing audit of the twelve-month period ending May 31, 2008, but that all other components of the addbacks listed on the schedule are subject to confirmation and adjustment per the post-closing adjustment process contemplated by Section 2.4 .

     “ Affiliate ” of any Person means any person directly or indirectly controlling, controlled by, or under common control with, any such Person and any officer, director or controlling person of such Person.

     “ Agreement ” has the meaning set forth in the preamble to this Agreement.

     “ Ancillary Agreements ” means the Escrow Agreement, the Restrictive Covenant Agreement to be signed by each Seller Party, and the Release and each agreement, document, instrument or certificate contemplated by this Agreement or to be executed by the Purchaser or any Seller Party in connection with the consummation of the transactions contemplated by this Agreement, in each case only as applicable to the relevant party or parties to such Ancillary Agreement, as indicated by the context in which such term is used.

      “Baseline Net Asset Value” means the greater of (i) $500,000 or (ii) the amount by which the Company’s assets exceed its liabilities as of May 31, 2008 as reported on the balance sheet included within the Interim Financial Statements submitted on Schedule 4.20 ; provided, however, that the inventory reflected in such balance sheet shall be adjusted to reflect the actual quantity of the Company’s inventory on May 31, 2008 with the value of such actual inventory being determined using the Company’s historical method of accounting as consistently applied.

      “Brookside” means Brookside Technology Holdings Corp., a Florida corporation.

      “Cash Component” has the meaning set forth in Section 2.2(a) .

      “Cash Hold-back” has the meaning set forth in Section 2.3(d) .

     “ Cash Shortfall ” has the meaning set forth in Section 2.4(b) .

     “ Claims Notice ” has the meaning set forth in Section 7.2(a) .

     “ Closing ” has the meaning set forth in Section 3.1 .

 


 

     “ Closing Date ” has the meaning set forth in Section 3.1 .

     “ Code ” means the Internal Revenue Code of 1986, as amended.

     “ Company ” has the meaning set forth in the Recitals.

     “ Contracts ” means all contracts, agreements (including, without limitation, employment and restrictive covenant agreements), leases (whether real or personal property), commitments, instruments, guarantees, bids, orders and proposals and all oral understandings.

     “ Controlled Group ” has the meaning set forth in Section 4.14(e) .

     “ Copyright ” means all copyrights, copyrightable works, mask work rights, rights in databases, data collections, copyright registrations and applications for copyright registration and equivalents and counterparts of the foregoing.

     “ Domain Names ” means all Internet electronic addresses, uniform resource locators and alphanumeric designations associated therewith and all registrations for any of the foregoing, including, without limitation, any and all rights to the following names and domain names: www.standtel.com.

     “ Due Diligence Investigation ” has the meaning set forth in Section 10.1(a) .

     “ Due Diligence Period ” has the meaning set forth in Section 10.1(a) .

     “ EBITDA Dispute Notice ” has the meaning set for in Section 2.4(a)

     “ Employee Plan ” or collectively, “ Employee Plans ” has the meaning set forth in Section 4.14(a) .

     “ Environment ” means soil, surface waters, groundwater, land, stream sediments, surface or subsurface strata, ambient air, indoor air or indoor air quality, including, without limitation, any material or substance used in the physical structure of any building or improvement.

     “ Environmental Condition ” means any condition of the Environment with respect to the Real Property, with respect to any property previously owned, leased or operated by the Company to the extent such condition of the Environment existed at the time of such ownership, lease or operation, or with respect to any other real property at which any Hazardous Material generated by the operation of the business of the Company prior to the Closing Date has been treated, stored or disposed of, which violates any Environmental Law, or even though not violative of any Environmental Law, nevertheless results, or could possibly result, in any Hazardous Material Release, or Threat of Hazardous Material Release, damage, loss, cost, expense, claim, demand, order or liability.

 


 

     “ Environmental Law ” means any federal, state or local law, regulation, rule, ordinance, common law, policy or guideline relating to the health, safety or protection of the Environment, Hazardous Material Releases into the Environment, workplace safety or injury to persons relating to Hazardous Material Releases of into the Environment.

     “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

     “ Escrow Agent ” has the meaning set forth in Section 2.3(d) .

     “ Escrow Agreement ” means that certain escrow agreement, dated as of the Closing Date, by and among the Purchaser, the Seller Parties and Escrow Agent in the form attached hereto as Exhibit A .

      “Estimated Adjusted EBITDA has the meaning set forth in Section 2.3(a) .

      “Estimated Net Assets” has the meaning set forth in Section 2.5 .

     “ Expiration Date ” has the meaning set forth in Section 7.3(a) .

      " Excluded Representations has the meaning set forth in Section 7.3(a) .

     “ Family Affiliate ” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive relationships, of any Person.

     “ Financial Statements ” has the meaning set forth in Section 4.20(a) .

     “ GAAP ” means United Stated Generally Accepted Accounting Principles.

     “ Governmental Authority ” means any government or political subdivision or regulatory authority, whether federal, state, local or foreign, or any agency or instrumentality of any such government or political subdivision or regulatory authority, or any federal state, local or foreign court or arbitrator.

     “ Guarantee ” by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing or otherwise supporting in whole or in part the payment of any Indebtedness or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation of such other Person (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay or to maintain financial statement conditions or otherwise) or (b) entered into for the purpose of assuring in any other manner the obligee of such Indebtedness or other obligations of the payment of such Indebtedness or to protect such obligee against loss in respect of such Indebtedness (in whole or in part); provided ,

 


 

however , that the term Guarantee shall not include endorsements for deposit or collection in the Ordinary Course of Business. The term “ Guarantee ” used as a verb has a correlative meaning.

     “ Hazardous Material ” means any pollutant, toxic substance, including asbestos and asbestos-containing materials, hazardous waste, hazardous material, hazardous substance, contaminant, petroleum or petroleum-containing materials, radiation and radioactive materials, leaded paints, toxic mold and other harmful biological agents, and polychlorinated biphenyls as defined in, the subject of, or which could give rise to, liability under any Environmental Law.

     “ Hazardous Materials Release ” means any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migrating, disposing or dumping of a Hazardous Material into the Environment (including, without limitation, the abandonment or discarding of barrels, containers and other closed receptacles containing any Hazardous Materials) and any condition that results in the exposure of a Person to a Hazardous Material.

     “ Indebtedness ” of any Person means: either (a) any liability of any Person (i) for borrowed money (including the current portion thereof), or (ii) under any reimbursement obligation relating to a letter of credit, bankers’ acceptance or note purchase facility, or (iii) evidenced by a bond, note, debenture or similar instrument (including a purchase money obligation), or (iv) for the payment of money relating to leases that are required to be classified as capitalized lease obligations in accordance with GAAP, or (v) for all or any part of the deferred purchase price of property or services (other than trade payables), including any “earnout” or similar payments or any non-compete payments, or (vi) under interest rate swap, hedging or similar agreements or (b) any liability of others described in the preceding clause (a) that such Person has Guaranteed, that is recourse to such Person or any of its assets or that is otherwise its legal liability or that is secured in whole or in part by the assets of such Person. For purposes of this Agreement, Indebtedness includes (A) any and all accrued interest, success fees, prepayment premiums, make-whole premiums or penalties and fees or expenses actually incurred (including attorneys’ fees) associated with the prepayment of any Indebtedness, (B) any and all amounts owed by the Company to any of their Affiliates, including, without limitation, the Seller Parties, and (C) any and all bonuses or incentive payments owed by the Company to any of their employees.

     “ Indemnified Party ” has the meaning set forth in Section 7.2(a) .

     “ Indemnifying Party ” has the meaning set forth in Section 7.2(a) .

     “ Indemnity Threshold ” has the meaning set forth in Section 7.2(a) .

      “Independent Accountant” means a nationally or internationally recognized accounting firm (other than a firm which has provided services to Purchaser or Seller Parties) mutually agreed upon by Purchaser and Seller Representative; provided, however, that should the parties be unable to agree on such accounting firm within thirty days after the determination of need for such Independent Accountant pursuant to Section 2 hereof, such firm shall be determined in Purchaser’s reasonable discretion (it being agreed that such firm selected by Purchaser shall not have provided services to Purchaser or Seller Parties).

 


 

     “ Intellectual Property ” means Copyrights, Domain Names, Patents, Software, Trademarks and Trade Secrets.

      “Interest” has the meaning set forth in the Recitals.

     “ Interim Financial Statements ” has the meaning set forth in Section 4.20(a) .

     “ Investment ” means any equity interest, directly or indirectly, in any Person.

     “ IRS ” means the Internal Revenue Service.

      To the knowledge of the Seller Parties and similar phrases mean that none of the Seller Parties, nor the directors, shareholders, officers or managers of the Company, has any actual knowledge, implied knowledge or belief that the statement made is incorrect. For this purpose, “implied knowledge” means all information available in the books, records and files of the Company or Trans-West and all information that any of such Persons should have known in the course of operating and managing the business and affairs of the Company or Trans-West.

     “ Law ” means any law, statute, code, ordinance, regulation, interpretation, ruling or other requirement of any Governmental Authority.

      Lease has the meaning set forth in Section .

     “ Leased Real Property ” has the meaning set forth in Section 4.7(b) .

     “ Liability Claim ” has the meaning set forth in Section 7.2(a) .

     “ Liens ” has the meaning set forth in Section 2.1(a) .

     “ Litigation Conditions ” has the meaning set forth in Section 7.2(b) .

     “ Losses ” has the meaning set forth in Section 7.1(a) .

      " Material Adverse Effect shall mean any change, event, violation, inaccuracy, circumstance, or effect that is, or could reasonably expected to be, materially adverse to the business, assets (including intangible assets), liabilities, financial condition, results of operations or business prospects of the Company or Trans-West taken as whole or on the ability of the Seller Parties to consummate timely the transactions contemplated herein; provided, however, any change or circumstance resulting primarily from generally applicable economic conditions shall not constitute a Material Adverse Effect.

     “ Material Customers ” has the meaning set forth in Section 4.27(a) .

     “ Material Suppliers ” has the meaning set forth in Section 4.27(b) .

 


 

     “ Net Asset Value ” has the meaning set forth in Section 2.5(a) .

     “ Net Asset Value Excess ” has the meaning set forth in Section 2.5(c) .

     “ Net Asset Value Shortfall ” has the meaning set forth in Section 2.5(b) .

     “ Net Asset Value Dispute Notice ” has the meaning set forth in Section 2.5(a) .

      “Operating Agreement” has the meaning set forth in the Recitals.

     “ Order ” means any order, judgment, injunction, award, decree, ruling, charge or writ of any Governmental Authority.

     “ Ordinary Course of Business ” means the ordinary course of business of the Company consistent with past custom and practice (including with respect to quantity and frequency).

     “ Owned Real Property ” has the meaning set forth in Section 4.7(a) .

     “ Patents ” means all patents, industrial and utility models, industrial designs, certificates of invention and other indicia of invention ownership issued or granted by any Governmental Authority, and all applications, provisionals, reissues, re-examinations, extensions, divisions, continuations (in whole or in part) and equivalents and counterparts of the foregoing.

     “ Permit ” means any environmental permit, license, approval, consent or authorization issued by a federal, state or local governmental authority.

      “Permitted Leases and Notes” mean the capital equipment and automobile leases and promissory notes set forth in Schedule 10.2(g), in an amount not to exceed the amounts set forth on such schedules.

      “Per Share Price” has the meaning set forth in Section 2.2(b) .

     “ Permitted Liens ” means Liens for current Taxes, assessments, fees and other charges by Governmental Authorities that are not due and payable as of the Closing Date.

     “ Person ” means any individual, sole proprietorship, partnership, corporation, limited liability company, unincorporated society or association, trust or other entity.

     “ Post-Closing Tax Period ” means any Tax period beginning after the Closing Date.

     “ Pre-Closing Tax Period ” means any Tax period ending on or before the Closing Date.

      “ProLogic” has the meaning set forth in the preamble to this Agreement.

 


 

      “ProLogic Shareholders” has the meaning set forth in the preamble to this Agreement.

     “ Promotico Employment Agreement ” has the meaning set forth in Section 3.2(d) .

     “ Purchase Price ” has the meaning set forth in Section 2.2 .

     “ Purchaser ” has the meaning set forth in the preamble to this Agreement.

     “ Purchaser’s Confidential Information ” has the meaning set forth in Section 8.1(a) .

     “ Restrictive Covenant Agreement ” has the meaning set forth in Section 2.2(a) .

     “ Real Property ” means any and all real property and interests in real property of the Company, including the Owned Real Property and the Leased Real Property, any real property leaseholds and subleaseholds, purchase options, easements, licenses, rights to access and rights of way and any other real property otherwise owned, occupied or used by the Company.

     “ Real Property Leases ” has the meaning set forth in Section 4.7(b) .

     “ Returns ” means all Tax returns, statements, reports and forms (including estimated Tax or information returns and reports).

     “ Release ” has the meaning set forth in Section 3.2(e) .

     “ Seller Parties ” means Trans-West, ProLogic, the Trans-West Shareholders and the ProLogic Shareholders.

      Seller Representative means Michael Promotico.

     “ Shares ” has the meaning set forth in the Recitals.

     “ Software ” means all computer software and code, including assemblers, applets, compilers, source code, object code, development tools, design tools, user interfaces and data, in any form or format, however fixed.

     “ Stock Component ” has the meaning set forth in Section 2.2(b) .

      “Stock Holdback” has the meaning set forth in Section 2.3(c) .

     “ Stock Shortfall ” has the meaning set forth in Section 2.4(b)(ii) .

     “ Tangible Personal Property ” has the meaning set forth in Section 4.7(c) .

 


 

     “ Tax ” means (a) any net income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, value added, transfer, franchise, profits, license, withholding on amounts paid to or by the Company, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental or windfall profit tax, GST, custom, duty or other tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest, penalty, addition to tax or additional amount imposed by any Taxing Authority, whether disputed or not, (b) any liability of the Company for the payment of any amounts of any of the foregoing types as a result of being a member of an affiliated, consolidated, combined or unitary group or being a party to any agreement or arrangement whereby liability of the Company for payment of such amounts was determined or taken into account with reference to the liability of any other Person and (c) any liability of the Company for the payment of any amounts as a result of being a party to any tax sharing agreements or arrangements (whether or not written) binding on the Company or with respect to the payment of any amounts of any of the foregoing types as a result of any express or implied obligation to indemnify any other Person.

     “ Tax Matter ” has the meaning set forth in Section 6.3 .

     “ Taxing Authority ” means any Governmental Authority responsible for the administration or the imposition of any Tax.

     “ Threat of Hazardous Material Release ” means a substantial likelihood of a Release that requires action to prevent or mitigate damage or injury to health, safety or the Environment that might result from such Release.

     “ Trademarks ” means all trademarks, trade names, fictitious business names, service marks, certification marks, collective marks and other proprietary rights to words, names, slogans, symbols, logos, devices, sounds, other things or combination thereof used to identify, distinguish and indicate the source or origin of goods or services, and all registrations, renewals and applications for registration, equivalents and counterparts of the foregoing, and the goodwill of the Company associated with each of the foregoing.

     “ Trade Secrets ” means all inventions, discoveries, ideas, processes, designs, models, formulae, patterns, compilations, programs, devices, methods, techniques, processes, know-how, proprietary information, customer lists, software code, technical information, data and databases, drawings and blueprints, and all other information and materials that would constitute a trade secret under applicable law.

      “Trans-West” has the meaning set forth in the preamble to this Agreement.

      “Trans-West Shareholder” has the meaning set forth in the preamble to this Agreement.

ARTICLE II PURCHASE AND SALE

      2.1 Purchase and Sale .

 


 

          (a) Purchase and Sale of Shares . Subject to the terms and conditions of this Agreement, at the Closing, the Purchaser shall purchase from the Trans-West Shareholders and the Trans-West Shareholders shall sell, transfer, assign, convey and deliver to the Purchaser, all of the Shares, free and clear of any mortgage, pledge, hypothecation, rights of others, claim, security interest, encumbrance, title defect, title retention agreement, voting trust agreement, interest, option, lien, charge or similar restrictions or limitations, including any restriction on the right to vote, sell or otherwise dispose of the Shares (collectively, the “ Liens ”).

          (b) Purchase and Sale of Interest . Subject to the terms and conditions of this Agreement, at the Closing, the Purchaser shall purchase from ProLogic and the ProLogic shall sell, transfer, assign, convey and deliver to the Purchaser, all of ProLogic’s Interests in the Company, free and clear of all Liens.

      2.2 Purchase Price . In full consideration for the transfer of the Shares and the Interests, and the Seller Parties entering into the form of restrictive covenant agreement attached as Exhibit B hereto (the “Restrictive Covenant Agreement ”), the Purchaser shall pay or cause to be paid to the Trans-West Shareholders and ProLogic, subject to the adjustments and payable in the manner set forth below, and less any and all outstanding Indebtedness (other than the Permitted Leases and Notes) of the Company as of the Closing Date, the following (the “ Purchase Price ”):

          (a) a payment of immediately available funds in an amount equal to three times the Actual Adjusted EBITDA minus Three Hundred Thousand Dollars ($300,000.00) (the “ Cash Component ”); and

          (b) such number of shares of the common stock of Brookside as shall be determined by dividing the Actual Adjusted EBITDA by the weighted average closing stock price of Brookside (“ Per Share Price ”) during the thirty (30) days prior to Closing Date (the “ Stock Component ”).

      2.3 Closing Payment . An estimate of the Purchase Price shall be paid at Closing as follows:

          (a) No later than five days before Closing, the Company shall prepare and deliver to Purchaser a schedule setting forth the calculation of the Adjusted EBITDA for the Company for the twelve-month period ending May 31, 2008 (the “Estimated Adjusted EBITDA”).

          (b) At Closing, Purchaser shall pay to the Seller Parties an amount equal to three times the Estimated Adjusted EBITDA minus Eight Hundred Thousand and No/Dollars ($800,000.00).

          (c) At Closing, Purchaser shall pay the Seller Parties one-half of such number of shares of Brookside as shall be determined by dividing the Estimated Adjusted EBITDA by the Per Share Price.

          (d) At Closing, the Purchaser shall deposit with Shumaker, Loop & Kendrick, LLP (the “ Escrow Agent ”) (i) Five Hundred Thousand Dollars ($500,000.00) (the “ Cash

 


 

Holdback ”) and (ii) one-half of such number of shares of Brookside as shall be determined by dividing the Estimated Adjusted EBITDA by the Per Share Price ( “Stock Holdback” ), which shall be held, administered and distributed by Escrow Agent in accordance with the terms of the Escrow Agreement and Sections 2.4 and 2.5 and Article VII of this Agreement.

      2.4 EBITDA Adjustment

          (a) Within ninety (90) days after the Closing Date, Purchaser shall deliver to Seller Representative a schedule setting forth its calculation of the Adjusted EBITDA for the Company for the twelve month period ending on May 31, 2008 (the “ Actual Adjusted EBITDA ”). The Seller Representative shall have a thirty (30) day period to review the Purchaser’s calculation of the Actual Adjusted EBITDA. If Seller Representative disputes Purchaser’s calculation of the Actual Adjusted EBITDA, Seller Representative shall deliver a written notice (“ EBITDA Dispute Notice ”) to Purchaser within thirty (30) days of delivery of Purchaser’s calculation. Seller Representative shall set forth in detail in the EBITDA Dispute Notice the basis for its disagreement with the Purchaser’s calculation of the Actual Adjusted EBITDA. If Seller Representative fails to deliver the EBITDA Dispute Notice within the allotted time period, Seller Representative shall be deemed to have agreed to the given calculation delivered by Purchaser, which calculation shall be final, conclusive and binding upon all of the parties hereto. If Seller Representative disputes the calculation of the Actual Adjusted EBITDA within the allotted time period, the parties in good faith will attempt to jointly resolve any dispute during the thirty day period following the delivery of the EBITDA Dispute Notice. If Purchaser and Seller Representative can resolve their dispute and agree upon the calculation of the Actual Adjusted EBITDA, they shall memorialize their agreement in writing and such mutually agreed upon figure shall be final, conclusive and binding upon all of the parties. If Purchaser and Seller Representative cannot resolve the dispute to their mutual satisfaction, Purchaser and Seller Representative shall engage the Independent Accountant to determine the appropriate amount of Actual Adjusted EBITDA consistent with this Agreement. The fees and expenses of the Independent Accountant shall be shared equally by Purchaser, on the one hand, and Seller Parties, on the other hand, with each being severally, but not jointly, responsible for one half of such fees and expenses. Each of Purchaser and Seller Parties shall provide the Independent Accountant such of their respective work papers as may be requested by the Independent Accountant. The Independent Accountant shall be requested to complete its engagement within forty-five (45) days of being retained by Purchaser and Seller Parties. The determination of the Independent Accountant shall be final, binding and conclusive upon the parties.

          (b) Upon the final, conclusive and binding determination of the Actual Adjusted EBITDA in accordance with Section 2.4(b) , if such amount is less than the Estimated Adjusted EBITDA:

               (i) The difference between the Cash Component determined using the Estimated Adjusted EBITDA and the Cash Component determined using the Actual Adjusted EBITDA (the “ Cash Shortfall ”) shall be deducted from the Cash Holdback. If, after such deduction, any cash remains, such remainder shall promptly be paid to Seller Parties, subject to any further adjustments as contemplated by Section 2.5 below. If the Cash Shortfall exceeds the Cash Holdback, Seller Parties shall promptly (and in any event within five (5) days) jointly and severally pay the amount of such excess to Purchaser in cash.

 


 

               (ii) The difference between the Stock Component determined using the Estimated Adjusted EBITDA and the Stock Component determined using the Actual Adjusted EBITDA shall hereinafter be referred to as the (“ Stock Shortfall ”). One-half of the Stock Shortfall shall be deducted from the Stock Holdback and Seller Parties shall promptly (and in any event within five (5) days) return to Purchaser shares of common stock of Brookside paid at Closing in an amount equal to the other half of the Stock Shortfall. Subject to the adjustment contemplated by Sections 2.5 below and Purchaser’s rights of set-off, pursuant to Section 7.3(b) , any remaining shares in the Stock Holdback, as adjusted pursuant to this Section, shall be paid to Seller Parties on the first anniversary of the Closing Date.

          (c) Upon the final, conclusive and binding determination of the Actual Adjusted EBITDA in accordance with Section 2.4 , if such amount is more than the Estimated Adjusted EBITDA:

               (i) Purchaser shall promptly pay Seller Parties, in immediately available funds, an amount equal to the difference between the Cash Component determined using the Estimated Adjusted EBITDA and the Cash Component determined using the Actual Adjusted EBITDA; and

               (ii) Purchaser shall promptly cause Brookside to issue to Seller Parties, such number of shares of common stock of Brookside equal to (A) the amount equal to the difference between the Stock Component determined using the Estimated Adjusted EBITDA and the Stock Component determined using the Actual Adjusted EBITDA divided by (B) the Per Share Price.

      2.5 Net Assets Purchase Price Adjustment.

          (a) Within ninety (90) days after the Closing Date, Purchaser shall deliver to Seller Representative a schedule setting forth its calculation of the Net Asset Value. “Net Asset Value” means the amount by which the Company’s assets exceed the Company’s liabilities on the Closing Date determined on the basis of the Company’s historical method of accounting as consistently applied, as reflected in the calculation of the Baseline Net Asset Value. The parties acknowledge and agree that the Company’s inventory will be restated at the Closing by a physical inventory, and the results of such inventory will be reflected in the Net Asset Value at Closing. The Seller Representative shall have a thirty (30) day period to review the Purchaser’s calculation of the Net Asset Value. If Seller Representative disputes Purchaser’s calculation of the Net Asset Value, Seller Representative shall deliver a written notice (“Net Asset Value Dispute Notice”) to Purchaser within thirty (30) days of delivery of Purchaser’s calculation. Seller Representative shall set forth in detail in the Net Asset Value Dispute Notice the basis for its disagreement with the Purchaser’s calculation of the Net Asset Value. If Seller Representative fails to deliver the Net Asset Value Dispute Notice within the allotted time period, Seller Representative shall be deemed to have agreed to the given calculation delivered by Purchaser, which calculation shall be final, conclusive and binding upon the parties. If Seller Representative disputes the calculation of the Net Asset Value within the allotted time period, the parties in good faith will attempt to jointly resolve any dispute during the thirty day period following the delivery of the Net Asset Value Dispute Notice. If Purchaser and Seller Representative can resolve their dispute and agree upon the calculation of the Net Asset Value, they shall memorialize their agreement in writing and such mutually agreed upon figure shall be final, conclusive and binding upon all of the parties. If Purchaser and Seller Representative cannot resolve the dispute to their mutual satisfaction, Purchaser and Seller Representative shall engage the Independent Accountant to determine the appropriate amount of Net

 


 

Asset Value consistent with this Agreement. The fees and expenses of the Independent Accountant shall be shared equally by Purchaser, on the one hand, and Seller Parties, on the other, with each being severally, but not jointly, responsible for one half of such fees and expenses. Each of Purchaser and Seller Parties shall provide the Independent Accountant such of their respective work papers as may be requested by the Independent Accountant. The Independent Accountant shall be requested to complete its engagement within forty-five (45) days of being retained by Purchaser and Seller Representative. The determination of the Independent Accountant shall be final, binding and conclusive upon the parties.

          (b) Upon the final, conclusive and binding determination of the Net Asset Value in accordance with Section 2.5 , if such amount is less than the Baseline Net Asset Value (the amount of such shortfall being hereinafter referred to as the “ Net Asset Value Shortfall ”):

               (i) Seventy-five percent (75%) of the Net Asset Value Shortfall shall be deducted from the Cash Holdback and such amount shall promptly be released from escrow and returned to Purchaser. If, after such deduction, any cash remains, such remainder shall promptly be paid to the Seller Parties, subject to any further adjustments as contemplated by Section 2.4 above. If the Cash Shortfall exceeds the Cash Holdback, Seller Parties shall promptly (and in any event within five (5) days) jointly and severally pay the amount of such excess to Purchaser in cash.

               (ii) An amount of shares of Brookside common stock in the amount of twenty-five percent (25%) of the Net Asset Value Shortfall divided by the Per Share Price, shall be deducted from the Stock Holdback and such shares shall promptly be released from escrow and returned to Purchaser for cancellation. Subject to the adjustment contemplated by Sections 2.4 above and Purchaser’s rights of set-off, pursuant to Article VII , the remaining Stock Holdback, as adjusted pursuant to this Section, shall be paid to Seller Parties on the first anniversary of the Closing Date.

          (c) Upon the final, conclusive and binding determination of the Net Asset Value in accordance with Section 2.5 , if such amount is more than the Baseline Net Asset Value (the amount of such excess being hereinafter referred to as the “ Net Asset Value Excess ”):

               (i) Purchaser shall promptly pay to Seller Parties, in immediately available funds, cash in the amount of seventy five percent (75%) of the Net Asset Value Excess; and

               (ii) Purchaser shall promptly cause Brookside to issue to Seller Parties, such number of shares of common stock of Brookside equal to twenty five percent (25%) of the Net Asset Value Excess divided by the Per Share Price.

      2.6 Allocation of Purchase Price . The Purchase Price, as adjusted, shall be allocated and paid to the Seller Parties in the percentages set forth in Schedule 2.6 . The portion of the Purchase Price allocated to ProLogic’s Interests in the Company shall be re-allocated among the underlying assets of the Company for purposes of Sections 741 and 751, 754 and 755 of the Code as follows: (i) the fair market value of those assets included in the Interim Financial Statements of the Company shall be deemed to be equal to the values shown on such statements (adjusted as appropriate to the Closing Date); and (ii) the fair market value of the good will and going concern value of the Company shall be deemed to equal any residual amount of the Purchase Price so allocated.

 


 

ARTICLE III CLOSING AND DELIVERIES

      3.1 Closing . Unless this Agreement is terminated prior to the Closing Date (as defined below), the closing of the transactions contemplated hereby (the Closing ) shall take place on or before August 31, 2008, provided that the conditions precedent to Closing which have not been waived by Purchaser or Seller Parties have been fulfilled (the Closing Date ), at the offices of the Purchaser, unless another date or place is agreed to in writing by the parties hereto.

      3.2 Deliveries by the Seller Parties . At the Closing, the Seller Parties shall deliver, or cause to be delivered, to the Purchaser the following items:

          (a) a receipt evidencing receipt by the Seller Parties of the Cash Component of the Purchase Price;

          (b) a copy of the Escrow Agreement, duly executed by each Seller Party;

          (c) a copy of the Restrictive Covenant Agreement, duly executed by each Seller Party;

          (d) a copy of an employment agreement, by and between Michael Promotico and the Company, duly executed by Michael Promotico, in the form mutually acceptable to Michael Promotico and the Purchaser (the “ Promotico Employment Agreement ”);

          (e) a copy of a release, in the form attached hereto as Exhibit C , duly executed by each Seller Party (the “ Release ”);

          (f) a legal opinion of counsel to the Seller Parties in form attached hereto as Exhibit “D” , (the “ Opinion ”) ;

          (g) (i) a stock certificate or certificates representing all of the Shares with duly executed stock power(s) attached in proper form for transfer to the Purchaser; (ii) a certificate or certificates representing all of the Interests with duly executed power(s) attached in proper form for transfer to the Purchaser; and (iii) any other documents that are necessary to transfer to the Purchaser good and valid title to the Shares and Interests, with any necessary transfer tax stamps affixed or accompanied by evidence that all transfer Taxes have been paid;

          (h) a reasonably current good standing certificate for:

               (i) the Company issued by the Secretary of State of the State of California and by the secretary of state in each state in which the Company is qualified to do business as a foreign corporation; and

               (ii) Trans-West issued by the Secretary of State of the State of California and by the secretary of state in each state in which Trans-West is qualified to do business as a foreign corporation.

 


 

          (i) copies of the Articles of Organization of the Company, certified by the Secretary of State of the State of California, and copies of the Operating Agreement of the Company, certified by an officer of the Company;

          (j) copies of the Articles of Incorporation of Trans-West, certified by the Secretary of State of the State of California, and copies of their Bylaws of the, certified by an officer of Trans-West;

          (k) the original corporate record books and member record books of the Company and Trans-West, respectively;

          (l) a certificate of an officer of the Company and Trans-West, dated as of the Closing Date, setting forth in sufficient detail acceptable to the Purchaser the aggregate amount of each of their Indebtedness as of the Closing Date;

          (m) appropriate termination statements under the Uniform Commercial Code and other instruments as may be requested by the Purchaser to extinguish all Indebtedness of the Company and Trans-West and all security interests related thereto, to the extent directed by the Purchaser;

          (n) all of the consents listed on Schedule 4.6 ;

          (o) written resignations of each director and officer of the Company and Trans-West;

          (p) copies of resolutions of the Board of Directors of ProLogic approving the execution and delivery of this Agreement and the Ancillary Agreements, and the consummation of the transactions contemplated hereby and thereby, certified by an officer of ProLogic; and

          (q) such other documents and instruments as the Purchaser shall reasonably request to consummate the transactions contemplated by this Agreement.

      3.3 Deliveries by the Purchaser . At Closing, the Purchaser shall deliver, or cause to be delivered, to the Seller Parties the following items:

          (a) the Purchase Price payable as set forth in Section 2.2 ;

          (b) a copy of the Escrow Agreement, duly executed by the Purchaser;

          (c) a copy of the Promotico Employment Agreement, duly executed by the Company; and

          (d) such other documents and instruments as the Seller Parties shall reasonably request to consummate the transactions contemplated by this Agreement.

 


 

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLER PARTIES

     The Seller Parties represent and warrant to the Purchaser as follows:

      4.1 Existence and Good Standing . Trans-West and the Company are companies duly incorporated, validly existing and in good standing under the laws of the State of California and are duly authorized, qualified or licensed to do business as foreign corporations in each of the jurisdictions set forth on Schedule 4.1 . Neither Trans-West nor the Company is qualified to do business in any jurisdiction other than as set forth on Schedule 4.1 and the nature of the business conducted by Trans-West and the Company, nor the property owned, licensed or operated by Trans-West and the Company, requires them to qualify to do business as a foreign corporation in any other jurisdiction.

      4.2 Power . Each of Trans-West and the Company has the requisite corporate or other power and authority to (a) own or lease and to operate its respective properties and assets as and where currently owned, operated and leased and (b) carry on its respective business as currently conducted.

      4.3 Validity and Enforceability . The Seller Parties have the requisite corporate or other power, authority and capacity to execute, deliver and perform the Seller Parties’ obligations under this Agreement and the Ancillary Agreements. This Agreement and each of the Ancillary Agreements have been duly authorized, executed and delivered by the Seller Parties and, assuming due authorization, execution and delivery by the Purchaser, represent the legal, valid and binding obligations of the Seller Parties, enforceable against the Seller Parties in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, fraudulent conveyance and other similar Laws and principles of equity affecting creditors’ rights and remedies generally. No further action on the part of the Seller Parties is or will be required in connection with the transactions contemplated by this Agreement or the Ancillary Agreements.

      4.4 Capitalization .

          (a) The authorized capital stock of Trans-West consists of 1,000,000 shares of common stock, of which 120,000 shares are issued, and all of which have been duly authorized and validly issued and are fully paid and non-assessable. The Shares represent the only issued and outstanding shares of the capital stock of Trans-West. Except as set forth on Schedule 4.4(a) , there are no outstanding options, warrants, rights, calls, subscriptions, claims of any character, agreements, obligations, convertible or exchangeable securities, or other commitments, contingent or otherwise, of any kind obligating Trans-West to issue, directly or indirectly, any additional shares of its capital stock or other equity securities. Except as set forth on Schedule 4.4(a) there are no agreements, commitments or contracts relating to the issuance, sale, transfer or voting of any equity securities or other securities of Trans-West. Schedule 4.4(a) lists all of the Subsidiaries of Trans-West and except as listed on Schedule 4.4(a) , Trans-West has no Subsidiaries or other Investments.

          (b) The Interests constitute all of the outstanding membership interests of the Company, all of which have been duly authorized and validly issued and are fully paid and non-

 


 

assessable, and there no other equity interests in the Company. Trans-West owns 80% of the Interest, free and clear of all Liens, and ProLogic owns the other 20% of the Interest, free and clear of all Liens. Except as set forth on Schedule 4.4(b) , there are no outstanding options, warrants, rights, calls, subscriptions, claims of any character, agreements, obligations, convertible or exchangeable securities, or other commitments, contingent or otherwise, of any kind obligating the Company to issue, directly or indirectly, any additional membership interest or other equity securities. Except as set forth on Schedule 4.4(b) there are no agreements, commitments or contracts relating to the issuance, sale, transfer or voting of any equity securities or other securities of the Company. Except as listed on Schedule 4.4(b) , the Company has no Subsidiaries or other Investments.

      4.5 No Conflict . Neither the execution of this Agreement or the Ancillary Agreements to which the Seller Parties are a party nor the performance by the Seller Parties of their obligations hereunder or thereunder will (a) violate or conflict with the Articles of Incorporation or Bylaws of Trans-West or, to the knowledge of the Seller Parties, any Law or Order, (b) violate or conflict with the Articles of Organization or Operating Agreement of the Company or any Law or Order (c) violate, conflict with or result in a breach or termination of, or otherwise give any Person additional rights or compensation under, or the right to terminate or accelerate, or constitute (with notice or lapse of time, or both) a default under the terms of any Contract to which Trans-West or the Company are a party or by which any of the assets or the properties of Trans-West or the Company are bound or (c) result in the creation or imposition of any Lien with respect to any of the assets or properties of Trans-West or the Company.

      4.6 Consents . Except as set forth on Schedule 4.6 , no consent, approval or authorization of any Person, including any Governmental Authority, is required to be made or obtained by any of the Seller Parties or the Company in connection with the execution and delivery by the Seller Parties of this Agreement or the Ancillary Agreements or the consummation of the transactions contemplated hereby or thereby.

      4.7 Property .

          (a) Title .

               (i) ProLogic has good and marketable title to its Interests, free and clear of all Liens. Upon the consummation of the transactions contemplated by this Agreement, the Purchaser will acquire good and valid title to ProLogic’s Interest, free and clear of all Liens.

               (ii) Trans-West Shareholders have good and marketable title to the Shares, free and clear of all Liens. Upon the consummation of the transactions contemplated by this Agreement, the Purchaser will acquire good and valid title to the Shares free and clear of all Liens.

               (iii) Other than the Permitted Liens, the Company has (i) good and marketable indefeasible fee simple title to the real property, together with all of the improvements thereon, to those properties set forth on Schedule 4.7(a)(i) (the “ Owned Real Property ”) and (ii) good and marketable title to, valid and enforceable leasehold interests in, or a valid and enforceable license to, all of its other tangible assets and properties (including, without limitation, the Leased Real Property).

 


 

          (b) Real Property Leases . Schedule 4.7(b) sets forth a true and complete description of all real property leased, licensed to or otherwise used or occupied (but not owned) by Trans-West or the Company (collectively, the “ Leased Real Property ”) including the address thereof, the annual fixed rental, the expiration of the term, any extension options and any security deposits. A true and correct copy of each such lease, license or occupancy agreement, and any amendments thereto, with respect to the Leased Real Property (collectively, the “ Real Property Leases ”) has been delivered to the Purchaser, and no changes have been made to any Real Property Leases since the date of delivery. All of the Leased Real Property is used or occupied by the Company or Trans-West pursuant to a Real Property Lease. Each Real Property Lease is in full force and effect and is valid, binding and enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, fraudulent conveyance and other similar Laws and principles of equity affecting creditors’ rights and remedies generally. There are no existing defaults by Trans-West or the Company or, to the knowledge of the Seller Parties, the lessor under any of the Real Property Leases, and, to the knowledge of the Seller Parties, no event has occurred which (with notice, lapse of time or both) could reasonably be expected to constitute a breach or default under any of the Real Property Leases by any party or give any party the right to terminate, accelerate or modify any Real Property Lease. Except as set forth on Schedule 4.7(b) , (i) no consent is required from the lessor under any of the Real Property Leases in order to consummate the transactions contemplated by this Agreement and the Ancillary Agreements and (ii) no Affiliate or Family Affiliate of Trans-West, the Company or any Seller Parties is the owner or lessor of any Leased Real Property.

          (c) Tangible Personal Property . Schedule 4.7(c) sets forth a true and complete list, by category, of all equipment, machinery and other similar tangible personal property, with an individual original cost of $5,000 or more, that is owned or leased by the Company (the “ Tangible Personal Property ”).

          (d) Absence of Violations . Except as set forth on Schedule 4.7(d) :

               (i) None of the Real Property, nor the leasing, occupancy or use of the Real Property, is in violation of any Law, including, without limitation, any building, zoning, environmental or other ordinance, code, rule or regulation, and there are no work orders, notices of deficiency or notices of violation issued by any Governmental Authority affecting the Real Property.

               (ii) The condition and use of the Real Property conforms to each applicable certificate of occupancy and all other permits required to be issued in connection with the Real Property. Trans-West and the Company have obtained all permits necessary for the operation of the business of Trans-West and the Company at the Real Property, and each is zoned to permit the current use of the Real Property.

               (iii) All utilities and services enter the Real Property from adjoining public streets.

          (e) Reassessments . To the knowledge of Seller Parties, there is not now pending nor contemplated any reassessment of any parcel included in the Real Property that could result in a change in the rent, additional rent or other sums and charges payable by Trans-West or the Company under any agreement relating to the Real Property.

 


 

          (f) No Condemnation . There is no pending condemnation, expropriation, eminent domain or similar proceeding affecting all or any portion of the Real Property. The Seller Parties have not received any written notice or oral notice of any such proceeding, and the Seller Parties have no knowledge that any such proceeding is contemplated.

          (g) Condition of Property . There are no material defects in, mechanical failure of, or damage to, the Real Property. The mechanical, electrical and HVAC systems serving the Real Property are in good working condition.

      4.8 Necessary Property and Condition of Property . The assets and properties owned, leased or licensed by the Company are in good condition and repair (subject to normal wear and tear consistent with the age of the assets and properties) and constitute all of the properties necessary to conduct the Company Business as it is currently conducted.

      4.9 Company Business . On June 1, 2006, Trans-West and ProLogic formed the Company, entered into the Operating Agreement and contributed all of their assets and operations to the Company. Except as set forth on Schedule 4.9 , since such time, all business of Trans-West and ProLogic, including the Company Business, has been conducted solely by the Company. Except as set forth on Schedule 4.9 , neither Trans-West nor ProLogic have any assets or operations, other than their respective Interests in the Company. Except as set forth on Schedule 4.9 , Trans-West has no liabilities (whether accrued, absolute, contingent, unliquidated or otherwise, whether due or to become due, whether known or unknown, regardless of when asserted), obligations, Indebtedness, Contracts or employees and is not a party to any agreements or Contracts other than the Operating Agreement, all of which will be terminated prior to Closing.

      4.10 Litigation . Except as set forth on Schedule 4.10 , there is no instance in which Trans-West or the Company is or has been within the three-year period prior to the Closing Date (a) subject to any unsatisfied Order or (b) a party or, to the knowledge of the Seller Parties, is threatened to be made a party to any complaint, action, suit, proceeding, hearing or investigation of any Person or Governmental Authority. No event has occurred or circumstances exist that could give rise to or serve as a basis for the commencement of any complaint, action, suit, proceeding, hearing or investigation of any Person or Governmental Authority. There are no judicial or administrative actions, proceedings or investigations pending or, to the knowledge of any of the Seller Parties, threatened that question the validity of this Agreement, the Ancillary Agreements or any of the transactions contemplated hereby or thereby. Without limiting the generality of the foregoing, there are no pending or, to the knowledge of any of the Seller Parties, threatened actions by any Governmental Authority to modify the zoning classification of, or to condemn or take by power of eminent domain (or purchase in lieu thereof), or to classify as a landmark, or otherwise to take or restrict in any way the right to use, develop or alter, all or any part of the Real Property.

      4.11 Compliance with Laws . To the knowledge of the Seller Parties, Trans-West and the Company are now, and have been within the past three years, in compliance with all Laws and Orders, including, without limitation, those respecting (a) labor and employment Laws, standards and practices (including, without limitation, all payroll and payroll withholding practices associated therewith), (b) zoning, and (c) Intellectual Property. None of the Seller Parties have knowledge of any proposed Law or Order that would be applicable to Trans-West or the Company and that would

 


 

reasonably be expected to adversely affect any assets, properties, liabilities, operations or prospects of Trans-West or the Company.

      4.12 Conduct of Business . Except as set forth on Schedule 4.12 , since March 31, 2008, the business and operations of the Company have been conducted in the Ordinary Course of Business and there has not been any adverse change in the operation of the business or the performance or financial condition of the Company. Without limiting the generality of the foregoing, since December 31, 2007, and except as set forth on Schedule 4.12 , the Company has not:

          (a) borrowed any amount or incurred or become subject to any liability except (i) current liabilities incurred in the Ordinary Course of Business, (ii) liabilities under Contracts entered into in the Ordinary Course of Business and (iii) borrowings under lines of credit existing on such date;

          (b) sold, assigned, licensed, leased or transferred (including, without limitation, transfers with employees, Affiliates, the Seller Parties or their respective Family Affiliates) any assets or properties except in the Ordinary Course of Business, or cancelled any debts or claims;

          (c) waived any rights of value or suffered any losses in the Ordinary Course of Business;

          (d) declared or paid any dividends or other distributions with respect to any shares of its capital stock or redeemed or purchased, directly or indirectly, any shares of its capital stock or any options;

          (e) taken any other action or entered into any other transaction (including any transactions with employees, Affiliates, shareholders or their respective Family Affiliates) other than in the Ordinary Course of Business or the transactions contemplated by this Agreement and the Ancillary Agreements;

          (f) (i) increased the salary, wages or other compensation rates of any officer, employee, director or consultant except in the Ordinary Course of Business, (ii) made or granted any increase in any Employee Plan, or amended or terminated any existing Employee Plan, or adopted any new Employee Plan or (iii) made any commitment or incurred any liability to any labor organization;

          (g) made any capital expenditures or commitments therefor;

          (h) made any material change in accounting or Tax principles, practices or policies from those utilized in the preparation of the Financial Statements, except as may be required under applicable Law;

          (i) made any write-off or write-down of or made any determination to write-off or write-down any of its assets and properties;

 


 

          (j) made any change in its general pricing practices or policies or any change in its credit or allowance practices or policies;

          (k) entered into any amendment, modification, termination (partial or complete) or granted any waiver under or given any consent with respect to any Contract that is required to be disclosed in the schedules to this Agreement;

          (l) commenced or terminated any line of business; or

          (m) received written notice from any customer or supplier that such customer or supplier has ceased, may cease or will cease to do business with it.

      4.13 Labor Matters .

          (a) Union and Employee Contracts . Except as set forth on Schedule 4.13(a) , (i) neither the Company nor Trans-West is a party to, bound by or currently negotiating any written or oral employment, services, fee, union, collective bargaining, agency, management, independent contractor, consulting or similar type of agreements, contracts or arrangements, including, without limitation, any change of control, termination or severance, employee compensation or benefits, bonus, retention bonus, profit-sharing, stock or stock option, unusual or special employment compensation arrangements, (ii) neither the Company nor Trans-West have agreed to recognize any union or other collective bargaining unit and (iii) no union or collective bargaining unit has been certified as representing the employees of Trans-West or the Company and no organizational attempt has been made or, to the knowledge of any of the Seller Parties, threatened by or on behalf of any labor u


 
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