Exhibit 99.3
STOCK PURCHASE
AGREEMENT
dated as of October 3, 2008
entered into by
Rotate Black, Inc.
and
Rotate Black Gaming
Inc.
And
Rotate Black, LLC
STOCK PURCHASE
AGREEMENT
This Stock Purchase Agreement
(“Agreement”) is entered into as of October 3, 2008 by
and among Rotate Black, Inc. , a Nevada Corporation (“
Rotate Black”) (“ Purchaser ”), and
Rotate Black, LLC a Michigan Limited Liability Company
(“ Seller ”).
Recital
A.
Rotate Black Gaming Inc., a wholly owned
subsidiary of Rotate Black, LLC (the “Company”)
is engaged in the business of developing and managing casino
resorts (the “Business”).
B.
Seller desires to sell, and Purchaser
desires to
C.
purchase, Seventy Five Percent (75%) of
all the issued and outstanding capital stock held by Seller in
Rotate Black Gaming, Inc. for the issuance of 26,560,000 shares of
Rotate Black, Inc. common stock valued at $0.50 per share and upon
the terms and subject to the conditions of this
Agreement.
Article 1
Definitions
Certain capitalized terms used in this
Agreement are defined in Annex I .
Article 2
The Transaction
2.1.
Purchase and Sale of
Securities. Subject to the
terms and conditions of this Agreement, Purchaser agrees to
purchase at the Closing (as defined below), and Seller agrees to
sell and issue to Purchaser at the Closing, Seventy Five Percent
(75%) of all the issued and outstanding shares of the capital stock
of the Company, consisting of 37,942,857 shares of common stock,
.01 par value per share (the “Shares”), free and clear
of any Liens.
2.2.
Commitment Fee. Pursuant to this
agreem ent and upon the
execution of this agreement Purchaser shall deliver 4,890,000
shares of common stock in Rotate Black, Inc. to Seller.
Article 3
Closing
3.1.
Closing . The closing (“ Closing ”) of the
Contemplated Transaction shall take place on November 11, 2008 at
10:00 a.m., at the offices of Rotate Black, Inc., 932 Spring
Street, Petoskey, Michigan 49770 or on such earlier date or at
such other time and place as the Parties may agree in writing
(the date of Closing shall be referred to as the “ Closing
Date ”). The Parties agree that the delivery of executed
documents at Closing may be made by facsimile with delivery of the
originals the next two Business Days by overnight courier
service.
3.2.
Closing Events . At Closing, the following events shall take place,
all of which shall be considered to take place
concurrently:
(a)
Deliveries by Seller.
Seller shall make the following
deliveries:
(i)
Seller shall deliver to Purchaser stock
certificates representing Seventy Five Percent (75%) of all the
Shares, together with assignments to Purchaser separate from
certificate, dated the Closing Date and duly executed by Seller and
including stamps or other proper evidence of the payment of any
stock transfer or similar Taxes due as a result of the transfer of
the Shares.
(ii)
Seller shall deliver to Purchaser a
certificate executed by Seller certifying to Purchaser and Rotate
Black that:
(A)
the representations and warranties of
Seller in Article 5, as qualified or limited by any exceptions in
the Schedules to Article 5, were true and correct in all material
respects as of the date of this Agreement;
(B)
the representations and warranties of
Seller in Article 5, as qualified or limited by any exceptions in
the Schedules to Article 5, are true and correct in all material
respects on the Closing Date as if made at and as of
Closing;
(C)
Seller has performed, complied with or
satisfied in all material respects all the obligations, agreements
and conditions under this Agreement that it is required to perform,
comply with or satisfy prior to or at Closing; and
(iii)
Seller shall deliver to Purchaser a
certified copy of the Company’s certificate of incorporation
and by-laws;
(iv)
Seller shall deliver to Purchaser a
certificate of good standing of the Company issued not earlier than
10 days prior to the Closing Date by the State of Nevada and by
each other jurisdiction in which it is qualified or registered to
do business as a foreign corporation;
(v)
Seller shall deliver to Purchaser a
certified copy of the resolutions of the board of directors of the
Company authorizing the execution, deliver and performance of this
Agreement;
(vi)
Seller shall deliver to Purchaser the
resignations of each officer and each member of the board of
directors of the Company effective as of the Closing;
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(vii)
Seller shall deliver to Purchaser a
General Release of the Company, dated as of the Closing Date, duly
executed by Seller and each of the directors and officers of the
Company;
(viii)
Seller shall deliver to Purchaser the
stock records and corporate minute books of the Company;
(ix)
Seller shall deliver to Purchaser all
instruments or documents necessary to change the names of the
individuals who have access to or are authorized to make
withdrawals from or dispositions of all bank accounts, other
accounts, certificates of deposits, marketable securities, other
investments, safe deposit boxes, lock boxes and safes of the
Company; and
(x)
Seller shall deliver to Purchaser any
other documents and instruments that Purchaser, Rotate Black or
their counsel reasonably requests.
(b)
Deliveries by
Purchaser.
Purchaser shall make the following
deliveries:
(i)
Purchaser shall deliver to Seller an
Officer’s Certificate, joined in by Rotate Black, certifying
to Seller that:
(A)
the representations and warranties of
Purchaser and Rotate Black in Article 6 were true and correct in
all material respects as of the date of this Agreement;
(B)
the representations and warranties of
Purchaser and Rotate Black in Article 6 are true and correct in all
material respects on the Closing Date as if made at and as of
Closing;
(C)
Purchaser and Rotate Black have
performed, complied with or satisfied in all material respects all
the obligations, agreements and conditions under this Agreement
that each is required to perform, comply with or satisfy prior to
or at Closing; and
(D)
resolutions in the form attached to the
Officer’s Certificate were duly adopted by the board of
directors of Purchaser and Rotate Black, respectively, to authorize
the execution, delivery and performance of this
Agreement;
(ii)
Purchaser shall deliver to Seller a
certified copy of Purchaser’s certificate of incorporation
and by-laws;
(iii)
Purchaser shall deliver to Seller a
certificate of good standing of Purchaser issued not earlier than
10 days prior to the Closing Date by the Secretary of State of
Delaware;
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(iv)
Purchaser shall deliver to Seller a
certified copy of the resolutions of Rotate Black’s board of
directors authorizing the execution, delivery and performance of
this Agreement; and
(v)
Purchaser shall deliver to Seller any
other documents and instruments that Seller or their counsel
reasonably requests.
(c)
Closing Documents.
All Closing Documents delivered at
Closing pursuant to Sections 4.2(a), (b) and (c) shall be in form
and substance reasonably satisfactory to both the delivering and
receiving Parties and their respective counsel.
(d)
Future Deliveries
. Seller agrees to deliver to Purchaser
following the Closing any additional documents or instruments that
Purchaser reasonably requests in order to evidence and confirm the
sale and transfer of the Shares and the other transactions under or
pursuant to this Agreement. Purchaser and Rotate Black agree to
deliver to Seller following the Closing any additional documents or
instruments that Seller reasonably requests in order to evidence
and confirm the sale and transfer of the Shares and the other
transactions under or pursuant to this Agreement.
Article 4
Representations and Warranties
of Seller
In order to induce Purchaser and Rotate
Black to enter into this Agreement, Seller represents and warrants
to Purchaser and Rotate Black that the statements in this Article 5
are true and correct as of the date of this Agreement, and will be
true and correct on the Closing Date as if made at and as of
Closing, except to the extent that any statement in this Article 5
is qualified or limited by an exception in a Schedule:
4.1.
Authorization .
(a)
This Agreement constitutes, and upon
Seller’s execution and delivery of its Closing Documents (and
assuming execution and delivery by the other party or parties, if
any), Seller’s Closing Documents will constitute, a legal,
valid and binding obligation of Seller enforceable against it in
accordance with its terms, except as enforceability may be limited
by (i) applicable bankruptcy, insolvency, reorganization,
moratorium or other similar Laws affecting the enforcement of
creditors’ rights generally and (ii) general principles of
equity (regardless of whether enforceability is considered in a
proceeding in equity or at law).
4.2.
Organization and
Ownership
(a)
The Company is a corporation duly
organized, validly existing and in good standing under the Laws of
the State of Nevada, with full corporate power and authority to
conduct its Business as it is now being conducted, to own or use
the properties and assets that it purports to own or use, and to
perform its obligations under all Contracts.
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(b)
Seller has delivered copies to Purchaser
of the Company’s Organizational Documents.
(c)
The Company does not own, directly or
indirectly, or have the right to acquire, any share of capital
stock, partnership interest, joint venture interest or other
security or equity interest in any corporation, limited liability
company, partnership, joint venture or other entity.
4.3.
Capital Structure.
(a)
The authorized capital stock of the
Company solely consists of 100,000,000 shares of common stock, $.01
par value, of which 37,942,857 shares are issued and outstanding as
set forth on Schedule II .
(b)
Seller is the sole record and beneficial
owner of the Shares as set forth on Schedule II, and has good and
marketable title to the Shares, free and clear of any
Liens.
(c)
The Company has never authorized, sold or
issued any securities other than the Shares. Except for Seller,
there are no other record or beneficial owners of any shares of
Shares or other securities of the Company. All offerings, sales and
issuances by the Company of any shares of capital stock were
conducted in material compliance with all applicable federal and
state securities Laws and all applicable state corporation Laws.
All outstanding shares of Shares are validly issued, fully paid,
nonassessable and not subject to any preemptive rights, or to any
agreement to which the Company is a party or by which the Company
may be bound. There are no options, warrants, calls, conversion
rights, commitments, agreements, contracts, understandings,
restrictions, arrangements or rights of any character to which the
Company is a party or by which the Company may be bound obligating
the Company to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of its capital stock. the
Company does not have outstanding any bonds, debentures, notes or
other indebtedness the holders of which (i) have the right to vote
(or which are convertible or exercisable into securities having the
right to vote) with holders of shares of common stock on any matter
or (ii) are or will become entitled to receive any payment as a
result of the execution of this Agreement or the completion of the
transactions contemplated hereby.
4.4.
No Violation . Except as disclosed on Schedule 5.4 , the
Seller’s execution, delivery and performance of this
Agreement, and the consummation the Contemplated Transaction, will
not, either directly or indirectly (and with or without Notice or
the passage of time or both):
(a)
violate or conflict with any of the
Company’s Organizational Documents or any resolution adopted
by the Company’s board of directors or by Seller;
(b)
result in a Default under any Customer
Contract or other Contract to which it is a party or by which it is
bound;
(c)
result in the imposition or creation of a
Lien upon any of the assets that it owns or uses;
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(d)
violate or conflict with, or give any
Governmental Authority or other Person the right to challenge the
Contemplated Transaction or to obtain any other relief under, any
Law or Order to which it is subject;
(e)
violate or conflict with, or give any
Governmental Body the right to revoke, withdraw, suspend, cancel,
terminate or modify, any Permit that it holds; or
(f)
cause it to become subject to or liable
for the payment of any Tax.
4.5.
Consents . Except as disclosed on Schedule 5.5 , the
Seller’s execution, delivery and performance of this
Agreement and each of its Closing Documents does not require any
Notice to, filing with, Permit from or other Consent of any
Governmental Authority or other Person.
4.6.
Financial Statements.
(a)
Except as disclosed on Schedule
5.6(a) , the Financial Statements fairly present in all
material respects the financial position and results of operations
of the Company as of the dates indicated and for the periods then
ended, in conformity with GAAP applied on a consistent
basis.
(b)
Except as disclosed on Schedule 5.6
(b ), the Interim Financial Statements fairly present in all
material respects the financial position and results of operations
of the Company as of August 15, 2008, in conformity with GAAP
applied on a basis consistent with the Financial Statements,
subject to normal year-end adjustments and to the lack of footnotes
and other presentation items (none of which, either individually or
in the aggregate, could reasonably be expected to have a Material
Adverse Effect).
(c)
Seller has delivered copies to Purchaser
of the Company’s Financial Statements and Interim Financial
Statements.
4.7.
Books and Records
. The Company’s Books and Records
are complete and correct in all material respects and have been
maintained in accordance with sound business practices.
4.8.
Title to Assets.
(a)
The Company owns or has a license or a
leasehold interest in all the tangible and intangible assets of any
type or kind that it purports to own, license or lease.
(b)
Except as disclosed on Schedule
5.8(b) , the Company has good and marketable title to all its
assets, free and clear of any Liens other than Permitted
Liens.
(c)
The Company’s assets constitute,
collectively, all the tangible and intangible assets relating to or
used, held for use or useful in the conduct of the Business and are
sufficient to enable the Business to be operated in the same manner
that it is currently operated.
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4.9.
Accounts Receivable and Account
Payable . Except as disclosed
in Schedule 5.9.a , the Company’s Accounts Receivable
represent valid obligations and have arisen solely out of bona fide
sales and deliveries of goods, performance of services and other
business transactions in the Ordinary Course of Business, are not
subject to valid defenses, set-off or counterclaims, and are
collectible in full at their recorded amounts. Purchaser shall
assign these receivables as of October 3, 2008, to the
Purchaser.
4.10.
Equipment and Vehicles.
(a)
Schedule 5.10(a
) consists of two subsche dules containi ng
complete and accurate lists of the following assets owned by the
Company as of the date of this Agreement:
(i)
all Equipment, identifying each piece of
Equipment by description and location ( Schedule 5.10 (a)(1)
); and
(ii)
all Vehicles, identifying each Vehicle by
make, year, model and location ( Schedule 5.10 (a)(2)
).
(b)
Except as disclosed in Schedule 5.10
(b) , each piece of Equipment or Vehicle listed on Schedule
5.10 (a) , (i) has been maintained in accordance with
normal industry practice, (ii) is in good operating condition
and repair (except for normal wear and tear), (iii) is free from
patent defects other than minor defects that do not interfere with
its continued use and (iv) is suitable for the purposes for which
it is currently used.
4.11.
Inventory . Except as disclosed in Schedule 5.11 , the
Company’s Inventory is fit for the purpose for which it was
purchased and is not obsolete, damaged or defective.
4.12.
Real Property . The Company does not own any Real
Property.
4.13.
Contracts.
(a)
Schedule 5.13(a)
consists of 15 subschedules containing
complete and accurate lists of the following Contracts of the
Company as of the date of this Agreement:
(i)
all Customer Contracts ( Schedule 5.13
(a)(1) );
(ii)
all Facility Leases ( Schedule 5.13
(a)(2) );
(iii)
all Equipment Leases ( Schedule 5.13
(a)(3) );
(iv)
all Vehicle Leases ( Schedule 5.13
(a)(4) );
(v)
all Contracts (or series of related
Contracts) for the purchase or sale of raw materials, parts,
supplies, products or other personal property, or for the
furnishing or receipt of services other than the Company’s
providing services to customers, the performance of which will
extend over a period of more than
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one year or involve payments in an amount
exceeding $10,000 ( Schedule 5.13 (a)(5)
);
(vi)
all Contracts with lenders evidencing or
securing any loan or other Liability ( Schedule 5.13 (a)(6)
);
(vii)
all Contracts with any Related Party (
Schedule 5.13 (a)(7) );
(viii)
all Contracts by which the Company has
guaranteed the contractual performance of or any payment by another
Person ( Schedule 5.13 (a)(8) ;
(ix)
all powers of attorney and other
Contracts by which the Company has authorized another Person to act
as its attorney-in-fact or agent ( Schedule 5.13
(a)(9) );
(x)
all Contracts creating a partnership or
joint venture with another Person or involving a sharing of
profits, losses, costs or Liabilities with another Person (
Schedule 5.13 (a)(10) );
(xi)
all Contracts that restrict or purport to
restrict the geographical area or scope of the Company’s
business activities or that restrict the geographical area or scope
of business activities of another Person for the Company’s
benefit ( Schedule 5.13 (a)(11) );
(xii)
all Contracts granting a right of first
refusal or first negotiation ( Schedule 5.13 (a)(12)
);
(xiii)
all Contracts relating to employment,
employee compensation, termination of employment or consulting
services that are not terminable at will by the Company (
Schedule 5.13 (a)(13) );
(xiv)
all Contracts relating to the license of,
or the payment of a royalty for the use of, any Software or
Intangible ( Schedule 5.13 (a)(14) ); and
(xv)
all Contracts (or series of related
Contracts) entered into outside of the Ordinary Course of Business
and involving the expenditure or receipt by any party of an amount
exceeding $10,000 ( Schedule 5.13 (a)(15) ).
(b)
Except as disclosed in Schedule 5.13
(b) , each Contract listed on Schedule 5.13 (a)
is legal, valid, binding and enforceable in accordance with its
terms by the Company, (ii) is in full force and effect, (iii) may
be assigned to Purchaser by the Company and (iv) when so assigned
at Closing, will remain in full force and effect on identical terms
and will be enforceable by Purchaser in accordance with its
terms.
(c)
Except as disclosed in Schedule 5.13
(c) , and, in the case of a Facility Lease, except for any
landlord’s or other statutory lien incidental to the Ordinary
Course
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of Business, the Company’s interest
in each Contract listed on Schedule 5.13 (a) is free and
clear of any Liens.
(d)
Except as disclosed in Schedule 5.13
(d) :
(i)
(i) neither the Company nor, to the
Knowledge of the Seller, no other party to a Contract listed on
Schedule 5.13 (a) is in Default in a material respect under
the Contract, and (ii) no event has occurred or circumstance exists
(other than a provision in a Contract that permits a party to
terminate the Contract solely by giving Notice) that (with or
without Notice or the passage of time or both) could result in a
Default in a material respect under a Contract listed on
Schedule 5.13 (a) or could give any party to a
Contract listed on Schedule 5.13 (a) the right to
exercise any remedy under the Contract or to cancel, terminate or
modify the Contract;
(ii)
the Company has not given Notice to or
received Notice from any other Person relating to an alleged,
possible or potential Default under any Contract listed on
Schedule 5.13 (a) ;
(iii)
each Customer Contract listed on
Schedule 5.13 (a)(1) has been entered into by the
Company in the Ordinary Course of Business and without the
commission of any act, either alone or in concert with any other
Person, and without any consideration having been paid or promised,
that is or would be in violation of any Law or Order;
and
(iv)
each piece of Equipment leased under an
Equipment Lease listed on Schedule 5.13 (a)(3) and each
Vehicle leased under a Vehicle Lease listed on Schedule 5.13
(a)(4) (i) has been maintained in accordance with normal
industry practice, (ii) is in good operating condition and repair
(except for normal wear and tear), (iii) is free from patent
defects other than minor defects that do not interfere with its
continued use and (iv) is suitable for the purposes for which it is
currently used.
(e)
Seller has delivered to Purchaser (i)
copies of all written Contracts listed on Schedule 5.13 (a),
(ii) a written description of all oral Contracts, if any, listed on
Schedule 5.13 (a) , (iii) copies of all written amendments
or modifications of or supplements to the Contracts listed on
Schedule 5.13 (a) and (iv) a written description of all oral
amendments or modifications of or supplements to the Contracts
listed on Schedule 5.13 (a) , if any.
4.14.
Other Intangibles.
(a)
Schedule 5.14 (a)
(i)
a complete and accurate list of all
licenses, sublicenses and other Contracts covering or relating to
any of the Company’s Intangibles ( Schedule 5.14 (a)
.
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(b)
The Company has
adequately maintained all Copyrights and
trade secrets and other Proprietary Information in respect of the
Company’s Intangibles.
(c)
Except as disclosed on Schedule 5.14
(b) , in respect of each license, sublicense or other Contract
listed on Schedule 5.14 (a) :
(i)
(i) the Contract is legal, valid, binding
and enforceable in accordance with its terms by and against the
Company, (ii) the Contract is in full force and effect, (iii) the
Company’s interest in the Contract may be assigned to
Purchaser and (iv), when so assigned at Closing, the Contract will
remain in full force and effect on identical terms and will be
enforceable by Purchaser in accordance with its terms;
(ii)
neither the Company nor, to the Knowledge
of the Company, no other party to the Contract is in Default in a
material respect under the Contract, and no event has occurred or
circumstance exists (other than a provision in the Contract that
permits a party to terminate the Contract solely by giving Notice)
that (with or without Notice or the passage of time or both) could
result in a Default in a material respect under the Contract or
could give any party to the Contract the right to exercise any
remedy under the Contract or to cancel, terminate or modify the
Contract; and
(iii)
the Company has not given Notice to or
received Notice from any other Person relating to an alleged,
possible or potential Default under the Contract.
(d)
No Suit is pending or is being or has
been Threatened that challenges the legality, validity,
enforceability or ownership of any license, sublicense or other
Contract covering or relating to any of the Company’s
Intangibles.
(e)
There is no Law or Order prohibiting or
restricting the use of any of the Company’s Intangibles in
any jurisdiction or on the export or import of any of the
Company’s Intangibles from or to any jurisdiction.
(f)
The Company has delivered to Purchaser
(i) copies of all written Contracts listed on Schedule 5.14
(a) and (ii) copies of all written amendments or modifications
of or supplements to the Contracts listed on Schedule 5.14
(a).
4.15.
Permits.
(a)
Schedule 5.15(a
) contains a complete and accurate list
of all Permits held by the Company as of the date of this
Agreement.
(b)
Except as disclosed in Schedule 5.15
(b) :
(i)
all Permits listed on Schedule 5.15
(a) are valid and in full force and effect, and no other
Permits are required for the lawful conduct of the Business as it
is currently conducted;
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(ii)
the Company has conducted the Business in
all material respects in compliance with the applicable Permits
listed on Schedule 5.15 (a) ;
(iii)
no event has occurred or, to the
Knowledge of the Company, circumstance exists that (with or without
Notice or the passage of time or both) could (i) constitute or
result in a violation of or failure to comply with any Permit
listed on Schedule 5.15 (a) or (ii) result in the
revocation, withdrawal, suspension, cancellation, termination
(other than on the normal termination or expiration date) or
material modification of any Permit listed;
(iv)
the Company has not received Notice from
any Governmental Authority or other Person regarding (i) any
actual, alleged or potential violation of or failure to comply with
any applicable Permit listed on Schedule 5.15 (a) or (ii)
any actual, proposed or potential revocation, withdrawal,
suspension, cancellation, termination or modification of any Permit
listed; and
(v)
the Company has duly filed on a timely
basis all applications that were required to be filed for the
renewal of the applicable Permits listed on Schedule 5.15
(a) , and has duly made on a timely basis all other filings
required to have been made in respect of the applicable Permits
listed.
(c)
the Company has delivered copies to
Purchaser of all Permits listed on Schedule 5.15 (a)
.
4.16.
Undisclosed Liabilities
. Except as disclosed on Schedule
5.16 , as of the date of this Agreement, the Company does not
have, and as of the Closing Date, the Company will not have, any
Liabilities except for (i) Liabilities reflected on the balance
sheet contained in the Interim Financial Statements and (ii)
Liabilities that have arisen since December 31, 2003 in the
Ordinary Course of Business.
4.17.
Taxes
(a)
The Company has filed all Tax Returns
that it was required to file prior to the date of this Agreement
and will timely file all Tax Returns that it may be required to
file on or after the date of this Agreement and prior to the
Closing Date as set forth in Schedule 5.17(a) . All Tax
Returns that the Company filed prior to the date of this Agreement
were correct and complete in all material respects, and all Taxes
due in connection with these returns have been paid. All Tax
Returns that the Company files on or after the date of this
Agreement and prior to the Closing Date will be correct and
complete in all material respects, and all Taxes due in connection
with these returns will be paid when due.
(b)
To the Knowledge of the Company, no Tax
Return that the Company filed prior to the date of this Agreement
is currently under audit or examination, and neither the Company
has received Notice from any Governmental Authority that (i) any
Tax Return that the Company filed will be audited or examined or
(ii) the Company is or may be liable for additional Taxes in
respect of any Tax Return or for the payment of Taxes in
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respect of a Tax Return that it did not
file (because, for example, it believed that it was not subject to
taxation by the jurisdiction in question).
(c)
The Company has withheld and paid to the
proper Governmental Authority all Taxes that it was required to
withhold and pay in respect of compensation or other amounts paid
to any employee or independent contractor.
(d)
Except as disclosed on Schedule
5.17(d) , the Company has not extended the time in which to
file any Tax Return, waived the statute of limitations for any Tax
or agreed to any extension of time for a Tax assessment or
deficiency.
(e)
The Company has not filed a consent under
§ 341(f) of the Internal Revenue Code (relating to collapsible
corporations) or made any payments, or is or could become obligated
under an existing Contract to make any payments, that are not
deductible under §280G of the Internal Revenue Code (relating
to “golden parachute” payments).
(f)
Except as disclosed on Schedule
5.17(f ), the Company is not a party to any agreement providing
for the allocation or sharing of Taxes, and the Company has no
liability under Treasury Regulation § 1.1502-6 or any similar
provision of Law for U.S. federal income Taxes or any other Tax of
any Person other than itself.
4.18.
No Material Adverse Change
. Since October 6, 2008, there has not
been any material adverse change in the Business or in the
Company’s financial position, results of operations or
assets.
4.19.
Employee Benefits
(a)
Schedule 5.19(a)
contains a complete and accurate list of
all Employee Benefit Plans under which the Company has any
Liability or obligation, whether contingent or
otherwise.
(b)
Except as disclosed on Schedule
5.19(b) , in the case of each Employee Benefit Plan listed on
Schedule 5.19(a) :
(i)
the plan (and each related trust or
insurance policy) complies in form and in operation in all material
respects with the applicable requirements of ERISA and the Internal
Revenue Code, as the case may be (or complied in form and operation
while Seller maintained or contributed to or was bound by the plan
or its employees participated in the plan);
(ii)
all required contributions to or premiums
or other payments in respect of the plan have been timely paid, and
all required reports and descriptions have been filed with the
proper Governmental Authority or distributed to participants as
appropriate;
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(iii)
there have been no “reportable
events” (as defined in § 4043 of ERISA) or
“prohibited transactions” (as defined in § 406 of
ERISA and § 4975 of the Internal Revenue Code) in respect of
the plan; and
(iv)
no Suit in respect of the administration
of the plan or the investment of plan assets is pending or, to the
Knowledge of the Company, Threatened, and there is no basis for any
such Suit.
(c)
Except as disclosed on Schedule
5.19(c) or to the extent required by § 4980B of the
Internal Revenue Code, the Company provides no health or other
welfare benefits to any retired or former employee and is not
obligated to provide health or other welfare benefits to any active
employee following his or her retirement or other termination of
service.
(d)
Except as disclosed on Schedule
5.19(d) , the Company does not maintain and has never
maintained an Employee Benefit Plan that is or was subject to the
“minimum funding standards” under § 302 of ERISA
or that is or was subject to Title IV of ERISA.
(e)
Except as disclosed on Schedule
5.19(e) , the Company is not a member of a group of trades or
businesses under common control or treated as a single employer for
purposes of §§ 414(b), (c) or (m) of the Internal Revenue
Code.
(f)
Except as disclosed on Schedule
5.19(f) , the Company does not contribute to and has never been
required to contribute to any “multiemployer plan” (as
defined in § 3(37) of ERISA), or has incurred any
“withdrawal liability” (as defined in § 4021 of
ERISA) in respect of any multiemployer plan, or withdrawn from any
multiemployer plan in a “complete withdrawal” or a
“partial withdrawal” (as respectively defined in
§§ 4203 and 4205 of ERISA).
(g)
Except as disclosed on Schedule
5.19(g) , neither the execution of this Agreement nor the
consummation of the Contemplated Transaction will result in an
increase in benefits under any Employee Benefit Plan listed on
Schedule 5.19(a) or any Contract with any current, former or
retired employee of the Company or an acceleration of the time of
payment or vesting of any benefits.
(h)
The Company has delivered to Purchaser
copies of all written Employee Benefit Plans listed on Schedule
5.19(a) (including the plan documents and all related trust
agreements, insurance policies and other Contracts) and a written
description of all oral Employee Benefit Plans listed. The Company
has also delivered copies to Purchaser of the most recent summary
plan description, annual report (IRS Form 5500 series), summary
annual report, financial statements, actuarial report and IRS
favorable determination letter for each plan listed (to the extent
applicable).
4.20.
Insurance
(a)
Schedule 5.20(a)
consists of four subschedules containing
complete and accurate lists of:
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(i)
all insurance policies under which the
Company or any director or officer of the Company (in his or her
capacity as a director or officer) is insured or covered (
Schedule 5.20 (a)(1) );
(ii)
all Contracts and arrangements, other
than insurance policies and self-insurance arrangements, for the
transfer or sharing of any risk by the Company ( Schedule 5.20
(a)(3) ); and
(iii)
all obligations of the Company to provide
insurance coverage to any Person other than an employee of the
Company ( Schedule 5.20 (a)(4) ).
(b)
Schedule 5.20 (b)
consists of two subschedules containing
complete and accurate lists of or providing:
(i)
the amount and a brief description of
each claim in excess of $25,000 under each insurance policy listed
on Schedule 5.20 (a)(1) ( Schedule 4.19(b)(1) );
and
(ii)
a summary of the loss experience for all
claims under each self-insurance arrangement listed on Schedule
5.20 (a)(2) , including the number and aggregate cost of the
claims ( Schedule 5.20 (b)(2) ).
(c)
Except as disclosed on Schedule 5.20
(c) , with respect to each current insurance policy listed on
Schedule 5.20 (a)(1) under which the Company is insured, the
Company has not received any refusal of coverage, any Notice that a
defense will be afforded with a reservation of rights, or any
Notice of cancellation or any other indication that the policy is
no longer in full force or effect or will not be renewed or that
the insurance company is unwilling or unable to perform its
obligations.
(d)
the Company has delivered to Purchaser
(i) copies of all insurance policies listed on Schedule 5.20
(a)(1) and all Contracts listed on Schedule 5.20 (a)(3)
and (ii) a written description of all self-insurance arrangements
listed on Schedule 5.20 (a)(2) .
4.21.
Compliance . Except as disclosed on Schedule 5.21
:
(a)
the Company is conducting the Business,
and has conducted the Business since January 1, 2000, in compliance
in all material respects with each Law and Order that is or was
applicable to the Company or to the conduct of the
Business.
(b)
no event has occurred or circumstance
exists that (with or without Notice or the passage of time or both)
could, to the Knowledge of the Company, (i) constitute or result in
a violation by the Company of, or its failure to comply with, any
applicable Law or Order or (ii) give rise to any legal obligation
of the Company to undertake or bear all or any portion of the cost
of any remedial action of any kind; and
(c)
since Octo
