STOCK PURCHASE AGREEMENT

 

Exhibit 10.90

EXECUTION COPY

 

 

 

STOCK PURCHASE AGREEMENT

by and among

NATIONAL INVESTMENT MANAGERS INC.,

PENSION TECHNICAL SERVICES, INC.,

RALPH W. SHAW, individually,

and

EILEEN A. BALDWIN-SHAW, individually

 

Dated as of September 25, 2008

 

			Page
I.	DEFINITIONS		1
II.	PURCHASE AND SALE		10
	2.1.	Purchase and Sale of the Shares	10
	2.2.	Retained Assets	10
	2.3.	Purchase Price	10
	2.4.	Calculation of the Number of Purchaser Shares	11
	2.5.	Payment of the Purchase Price	11
	2.6.	Adjustments to the Notes	11
III.	CLOSING, DELIVERIES AND OTHER ACTIONS		13
	3.1.	Time and Place of Closing	13
	3.2.	Deliveries by the Sellers	13
	3.3.	Deliveries by the Purchaser	14
IV.	REPRESENTATIONS AND WARRANTIES OF THE SELLERS		15
	4.1.	Authority, Validity and Effect	15
	4.2.	Title to Shares	15
	4.3.	No Conflict	15
	4.4.	Consents	15
	4.5.	Litigation	15
	4.6.	Brokers	16
	4.7.	Purchaser Shares Legend	16
	4.8.	Rule144	16
	4.9.	Investment Representations	16
V.	REPRESENTATION AND WARRANTIES RELATING TO THE COMPANY		17
	5.1.	Existence and Good Standing	17
	5.2.	Power	17
	5.3.	Capitalization of the Company	17
	5.4.	Property	17
	5.5.	Litigation	18
	5.6.	Compliance with Laws	18
	5.7.	Necessary Property	19

 

 

 

LIST OF EXHIBITS AND DISCLOSURE SCHEDULES

Exhibits

 

ExhibitA	Form of Notes
ExhibitB	Form of E. Shaw Employment Agreement
ExhibitC	Form of R. Shaw Employment Agreement
ExhibitD	Form of Release

 

Disclosure Schedules

 

Schedule1.1(a)	Adjusted EBITDA Principles
Schedule1.1(b)	Bonus Amounts
Schedule1.1(c)	Permitted Exceptions
Schedule2.5	Wire Accounts
Schedule4.4	Consents
Schedule5.1	Foreign Qualifications
Schedule5.3	Capitalization
Schedule5.4(b)	Leased Real Property
Schedule5.4(c)	Tangible Personal Property
Schedule5.4(d)	Violations
Schedule5.5	Litigation
Schedule5.8	Conduct of Business
Schedule5.9(a)	Union and Employee Contracts
Schedule5.9(b)	List of Employees, Etc.
Schedule5.10(a)	Employee Benefit Plans
Schedule5.11	Environmental
Schedule5.12	Contracts
Schedule5.13	Permits
Schedule5.14	Intellectual Property
Schedule5.15	Insurance
Schedule5.16(a)	Financial Statements
Schedule5.17	Liabilities
Schedule5.19	Bank Accounts
Schedule5.20	Terms and Conditions
Schedule5.21	Indebtedness
Schedule5.22(j)	Tax Jurisdictions
Schedule5.23	Material Customers
Schedule5.25	Related Party Transactions
Schedule8.1(e)	Excluded Assets

 

 

STOCK PURCHASE AGREEMENT

This STOCK PURCHASE AGREEMENT, dated as of September 25, 2008 (this “ Agreement ”), is by and among National Investment Managers Inc., a Florida corporation (the “ Purchaser ”), Pension Technical Services, Inc. d/b/a REPTECH Corp., a Colorado corporation (the “ Company ”), Ralph W. Shaw, an individual resident of the State of Colorado (“ R. Shaw ”), and Eileen A. Baldwin-Shaw, an individual resident of the State of Colorado (“ E. Shaw ”, and together with R. Shaw, the “ Sellers ”). The Purchaser, the Sellers and the Company are sometimes referred to in this Agreement collectively as the “ Parties ” or individually as a “ Party ”.

BACKGROUND

A.   The Sellers are the registered and beneficial owners of all of the issued and outstanding shares of capital stock of the Company (the “ Shares ”).

B.   The Sellers desire to sell to the Purchaser, and the Purchaser desires to purchase from the Sellers, all of the Shares, subject to the terms and conditions contemplated by this Agreement.

C.   The respective Boards of Directors of the Purchaser and the Company have each determined that the transactions contemplated by this Agreement are advisable, fair to and in the best interests of their respective companies and shareholders and accordingly have approved such transactions.

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, intending to be legally bound, hereby agree as follows:

I. DEFINITIONS

“ Actions ” means any claim, demand, charge, complaint, action, suit, proceeding, hearing, audit, investigation, interference, opposition, re-examination, concurrent use, cancellation or other dispute resolution or proceeding, whether judicial, administrative or arbitrative, of any Person or Governmental Authority.

“ Adjusted EBITDA ” means EBITDA, as adjusted in accordance with the principles set forth in Schedule 1.1(a) .

“ Affiliate ” means with respect to any Person, a Person that directly or indirectly controls, is controlled by, or is under common control with, any such Person. The term “control” (including the terms “controlled by” or “under common control with”) means, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through ownership of voting securities, membership interests, by contract or otherwise. The term “ Affiliate ” also includes 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 such Person.

“ Agreement ” has the meaning set forth in the Preamble.

“ Ancillary Agreements ” means each other agreement, document, instrument or certificate contemplated by this Agreement or to be executed by the Purchaser or any of the Sellers 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.

“ Bonus Amounts ” means any and all bonus and incentive compensation amounts payable to the officers, directors, employees and consultants of the Company (including the employer portion of any employment, payroll or unemployment taxes related to such Bonus Amounts), which amounts and employees are set forth on Schedule 1.1(b) . The certificate referenced in Section 3.2(l) sets forth the entire amount of the Bonus Amounts (indicating the amount and the Person to whom such Bonus Amount has been paid or is owed).

“ Bonus Payment ” has the meaning set forth in Section 8.2(c) .

“ Cash Proceeds ” has the meaning set forth in Section 2.3(a) .

“ Cash Purchase Price ” has the meaning set forth in Section 2.3(a) .

“ Claims ” has the meaning set forth in Section 10.2(b) .

“ Claims Notice ” has the meaning set forth in Section 10.2(a) .

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

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

“ Closing Date Balance Sheet ” has the meaning set forth in Section 8.2(d) .

“ Code ” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

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

“ Company’s Knowledge ” means the knowledge obtained or obtainable after due inquiry by either Seller or any officer or director of the Company.

“ Consent ” means any consent, approval, authorization, qualification, waiver, registration or notification required to be obtained from, filed with or delivered to a Governmental Authority or any other Person in connection with the consummation of the transactions provided for herein.

“ Contracts ” means all written and oral contracts, agreements (including, without limitation, employment agreements and non-competition agreements), leases (whether real or personal property), licenses, commitments, arrangements, instruments, guarantees, bids, orders and proposals.

“ Controlled Group ” means any trade or business (whether or not incorporated) (a) under common control within the meaning of Section 4001(b)(1) of ERISA with the Company or (b) which together with the Company is treated as a single employer under Section 414(t) of the Code.

“ Conversion Transaction ” means a merger, consolidation, recapitalization or other transaction to which the Purchaser is a party that results in the Purchaser Shares being converted into the right to receive cash or other securities.

“ E. Shaw ” has the meaning set forth in the Preamble.

“ E. Shaw Employment Agreement ” has the meaning set forth in Section 3.2(c) .

“ EBITDA ” means the earnings of the Company before deduction for interest, taxes, depreciation and amortization, determined in accordance with GAAP.

“ EBITDA Shortfall ” has the meaning set forth in Section 2.6(b)(i) .

“ Employee Plan ” and “ Employee Plans ” have the meaning set forth in Section 5.10(a) .

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

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

“ Environmental Condition ” shall mean 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 has been handled, treated, stored or disposed of, which violates any Environmental Law, or even though not violative of any Environmental Law, nevertheless results in any Release, or Threat of Release, damage, loss, cost, expense, claim, demand, order or liability.

“ Environmental Law ” shall mean any Law relating to health or safety or protection of the Environment, Releases of Hazardous Materials or injury to persons relating to exposure to any Hazardous Materials.

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

“ Excess EBITDA ” has the meaning set forth in Section 2.6(b)(iii) .

“ Excluded Assets ” has the meaning set forth in Section 8.1(e) .

“ Expiration Date ” has the meaning set forth in Section 10.3(a) .

“ Extension ” has the meaning set forth in Section 5.22(a) .

“ Fair Market Value ” means the average closing price of Purchaser Common Stock as quoted on the OTC Bulletin Board (or other exchange in which Purchaser Common Stock may then be quoted) over a period of 5 consecutive trading days, the latest of which will be the trading day immediately preceding the Closing Date.

“ Final EBITDA ” has the meaning set forth in Section 2.6(b)(i) .

“ Financial Statements ” has the meaning set forth in Section 5.16(a) .

“ First Measurement Period ” has the meaning set forth in Section 2.6(a) .

“ Foreign Plan ” has the meaning set forth in Section 5.10(k) .

“ GAAP ” means accounting principles generally accepted in the United States of America as in effect on the Closing Date.

“ General Enforceability Exceptions ” has the meaning set forth in Section 4.1 .

“ 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.

“ Gross Proceeds ” has the meaning set forth in Section 2.3(a) .

“ 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). The term “ Guarantee ” used as a verb has a correlative meaning.

“ Hazardous Material ” shall mean any pollutant, toxic substance including asbestos and asbestos-containing materials, hazardous waste, hazardous material, hazardous substance, contaminant, petroleum or petroleum-containing materials, infectious or medical wastes, 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.

“ Holdback Amount ” means $150,000.

“ Indebtedness ” of any Person means: either (a) any liability of such Person (i) for borrowed money (including the current portion thereof), (ii) under any reimbursement obligation relating to a letter of credit, bankers’ acceptance or note purchase facility, (iii) evidenced by a bond, note, debenture or similar instrument (including a purchase money obligation), (iv) for the payment of money relating to any lease that is required to be classified as a capitalized lease obligation in accordance with GAAP, (v) for all or any part of the deferred purchase price of property or services (including, without limitation, accounts and trade payables (whether or not invoiced)), including any “earnout” or similar payments or any non-compete payments, (vi) under interest rate swap, hedging or similar agreements, (vii) for income Taxes payable (other than VAT taxes incurred in the Ordinary Course of Business), (viii) for any deferred compensation or accrued incentive compensation, or (ix) for any severance payable to individuals or organizations; 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) all “cut” but uncashed checks issued by the Company that are outstanding as of the Closing Date, (C) cash, book or bank account overdrafts and (D) any and all amounts owed by the Company to any of its Affiliates, including, without limitation, any of the Sellers or any of their Affiliates.

“ Indemnified Party ” has the meaning set forth in Section 10.2(a) .

“ Indemnifying Party ” has the meaning set forth in Section 10.2(a) .

“ Independent Arbitrator ” has the meaning set forth in Section 2.6(a) .

“ Information Systems ” means all computer hardware, databases and data storage systems, computer, data, database and communications networks (other than the Internet), architecture interfaces and firewalls (whether for data, voice, video or other media access, transmission or reception) and other apparatus used to create, store, transmit, exchange or receive information in any form.

“ Intellectual Property ” means all of the following that is used in the business of the Company, along with all income, royalties, damages and payments due or payable on the Closing Date or thereafter, including, without limitation, damages and payments for past or future infringements or misappropriations thereof, the right to sue and recover for past infringements or misappropriations thereof and any and all corresponding rights that, now or hereafter, may be secured throughout the world: (a) patents, patent applications, patent disclosures and inventions (whether or not patentable and whether or not reduced to practice) and any reissue, continuation, continuation in part, revision, extension or reexamination thereof; (b) trademarks, service marks, trade dress, logos, Internet domain names, trade names and corporate names together with all goodwill associated therewith, including, without limitation, the use of the current corporate name and all translations, adaptations, derivations and combinations of the foregoing; (c) copyrights and copyrightable works; (d) all registrations, applications and renewals for any of the foregoing; (e) trade secrets and confidential business information (including, without limitation, ideas, formulae, compositions, know how, manufacturing and production processes and techniques, research and development information, drawings, specifications, designs, plans, proposals, technical data, financial, business and marketing plans, sales and promotional literature, and customer and supplier   lists and related information); (f) computer software and websites (including, without limitation, source code and object code and any data and related documentation); (g) other intellectual property rights; and (h) all copies and tangible embodiments of the foregoing (in whatever form or medium), in each case including, without limitation, the items set forth on Schedule 5.14 .

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

“ IRCA ” has the meaning set forth in Section 5.9(d) .

“ IRS ” means the Internal Revenue Service.

“ Law ” means any law, common law, statute, code, ordinance, regulation or other requirement of any Governmental Authority as well as foreign collective bargaining agreements and regulations of the employers’ liability insurance association.

“ Leased Real Property ” has the meaning set forth in Section 5.4(b) .

“ Liability Claim ” has the meaning set forth in Section 10.2(a) .

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

“ Litigation Conditions ” has the meaning set forth in Section 10.2(b) .

“ Loss ” and “ Losses ” means all losses, liabilities, claims, damages, penalties, fines, judgments, awards, settlements, Taxes, costs, fees, expenses (including but not limited to reasonable attorneys’ fees) and disbursements and, with respect to any Liability Claim asserted by a Purchaser Indemnified Party related to any inaccuracy or misrepresentation regarding the Company’s pre-Closing Adjusted EBITDA, diminution in value of the Company determined using the multiple of Adjusted EBITDA relied upon by the Purchaser to determine the Gross Proceeds.

“ Measurement Periods ” has the meaning set forth in Section 2.6(a) .

“ Non-Compete Period ” means the 2-year period immediately following the Closing Date.

“ Note ” and “ Notes ” have the meaning set forth in Section 2.3(a) .

“ Objections Statement ” has the meaning set forth in Section 2.6(a) .

“ 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 consistent with past custom and practice (including with respect to quantity and frequency).

“ OTC Bulletin Board ” means the regulated electronic quotation service offered by the National Association of Securities Dealers that displays real-time quotes, last-sale prices, and volume information in over-the-counter equity securities.

“ Party ” and “ Parties ” have the meaning set forth in the Preamble.

“ Permits ” means any license, permit, authorization, certificate of authority, accreditation, qualification or similar document or authority that has been issued or granted by any Governmental Authority.

“ Permitted Exceptions ” means (a) Liens for current Taxes, assessments, fees and other charges by Governmental Authorities that are not due and payable as of the Closing Date and (b) those matters that are set forth on Schedule 1.1(c) .

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

“ Post-Closing Straddle Period ” has the meaning set forth in Section 7.2(b) .

“ Pre-Closing Straddle Period ” has the meaning set forth in Section 7.2(b) .

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

“ Privilege Period ” has the meaning set forth in Section 7.2(c)(iv) .

“ Purchase Price ” has the meaning set forth in Section 2.3(a) .

“ Purchaser ” has the meaning set forth in the Preamble.

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

“ Purchaser Common Stock ” means the common stock, par value $0.001 per share, of Purchaser.

“ Purchaser Indemnified Party ” has the meaning set forth in Section 10.1(a) .

“ Purchaser Shares ” has the meaning set forth in Section 2.3(a) .

“ R. Shaw ” has the meaning set forth in the Preamble.

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

“ Real Property ” means any and all real property and interests in real property of the Company, including 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 5.4(b) .

“ Release ” shall mean 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.

“ Restricted Territory ” means: (a) the State of Colorado, each State contiguous thereto, and each State or Commonwealth in which the Company’s customers are located on the Closing Date; and (b) all of the specific customer accounts of the Company, whether within or outside of the geographic area described in clause (a) above, with which any of the Sellers had any contact or for which any of the Sellers had any responsibility (either direct or supervisory) immediately prior to the Closing, at any time during the 2-year period prior to the Closing, or at any time during the Non-Compete Period.

“ Retained Accounts Receivable ”   means all accounts receivable and other receivables generated in the Ordinary Course of the Company’s business, including, without limitation, notes receivables of the Company existing as of the Closing Date. The certificate referenced in Section 3.2(l) sets forth a true and complete list of all Retained Accounts Receivable as of the Closing Date.

“ Returns ” means all returns, declarations, statements, reports, claims for refund, information returns and forms relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“ Second Measurement Period ” has the meaning set forth in Section 2.6(a) .

“ Securities Act ” means the Securities Act of 1933, as amended.

“ Sellers ” has the meaning set forth in the Preamble.

“ Selling Expenses ” means all (a) unpaid costs, fees and expenses of outside professionals incurred by the Company (including expenses incurred by the Company on behalf of the Sellers) relating to the process of selling the Company whether incurred in connection with this Agreement or otherwise, including, without limitation, all legal, accounting, consulting, tax and investment banking fees and expenses, and (b) severance obligations, retention bonuses, “stay” bonuses and sale bonuses owed by the Company triggered prior to or in connection with the transactions contemplated by this Agreement (including the employer portion of any payroll, social security, unemployment or similar Taxes). The certificate referenced in Section 3.2(l) sets forth the entire amount of the Selling Expenses (indicating the amount and the Person to whom such Selling Expense has been paid or is owed).

“ Shares ” has the meaning set forth in Background Paragraph A.

“ Special Representations ” means the representations and warranties listed in clauses (i), (ii) and (iii) of Section 10.3(a) .

“ Statement of Operations ” has the meaning set forth in Section 2.6(a) .

“ Straddle Period ” has the meaning set forth in Section 7.2(b) .

“ Subsidiary ” or “ Subsidiaries ” means any Person of which at least 20% of the outstanding shares or other equity interests having ordinary voting power for the election of directors or comparable managers of such Person are at the time owned by the Company, by one or more directly or indirectly wholly or partially owned subsidiaries of the Company or by the Company and one or more such subsidiaries, whether or not at the time the shares of any other class or classes or other equity interests of such Person shall have or might have voting power by reason of the happening of any contingency.

“ Tangible Personal Property ” has the meaning set forth in Section 5.4(c) .

“ Target EBITDA ” means (a) with respect to the First Measurement Period, $761,585, and (b) with respect to the Second Measurement Period, $811,088.

“ Tax ” means any (a) foreign, United States federal, state, or local net income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, value added, transfer, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental or windfall profit tax, 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 Law or Taxing Authority, whether disputed or not, (b) any liability 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 for payment of such amounts was determined or taken into account with reference to the liability of any other Person and (c) any liability for the payment of any amounts of any of the foregoing types as a result of being a party to any agreements or arrangements (whether or not written) 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 ” means any inquiries, claims, assessments, audits or similar events with respect to Taxes of the Company.

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

“ Third Party Claim ” has the meaning set forth in Section 10.2(b) .

“ Threat of Release ” shall mean 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.

“ Transfer Taxes ” has the meaning set forth in Section 7.2(e) .

II. PURCHASE AND SALE

2.1.   Purchase and Sale of the Shares . At the Closing, the Purchaser shall purchase (or cause to be purchased) from the Sellers, and the Sellers 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 (collectively, “ Liens ”).

2.2.   Retained Assets . The Parties agree that the Company shall have the right, at or prior to the Closing, to distribute (a) all of the cash of the Company (other than customer deposits or advances for services not yet completed), (b) the Retained Accounts Receivable and (c) the Excluded Assets in accordance with Section 8.1(e) , without adjustment to the Purchase Price.

2.3.   Purchase Price .

(a)   In full consideration for the transfer of the Shares, at the Closing, the Purchaser shall pay (or cause to be paid) to the Sellers an aggregate amount equal to $3,575,520 (in aggregate, the “ Gross Proceeds ”) (or such lesser amount resulting from deductions, if any, pursuant to this Section 2.3(a) ) consisting of: (i) $1,937,760 in cash (the “ Cash Proceeds ”) minus (A) any and all outstanding Indebtedness of the Company as of the Closing Date, (B) any and all Selling Expenses, (C) any and all Bonus Amounts, and (D) the Holdback Amount (such amount resulting from the deductions, if any, to the Cash Proceeds is referred to herein as the “ Cash Purchase Price ”); (ii) $922,656 payable under two promissory notes (one payable 14 months after the Closing and one payable 26 months after the Closing, subject to extension as provided therein), each in the amount of $461,328 and substantially in the form attached hereto as Exhibit A (each, a “ Note ” and collectively, the “ Notes ”); and (iii) $715,104 payable in shares of Purchaser Common Stock, which number of shares shall be calculated pursuant to Section 2.4 (such number of shares resulting from the calculation, the “ Purchaser Shares ”, and together with the Cash Purchase Price and the Notes, the “ Purchase Price ”). Subject to the terms of Article X , on the 3-month anniversary of the Closing Date (but in no event before January 2, 2009), the Purchaser shall pay or cause to be paid to the Sellers the Holdback Amount, minus the amount required to satisfy any unresolved Claims made by the Purchaser or any Purchaser Indemnified Party in accordance with the terms of Article X . Simple interest shall accrue on the Holdback Amount, as the same may be reduced from time to time, at the rate of 6.00% computed on the basis of a 360-day year for the actual number of days from the Closing Date to the date paid. The Purchaser shall pay or cause to be paid to the Sellers all accrued but unpaid interest on the portion of the Holdback Amount actually paid to the Sellers concurrently with payment of such portion of the Holdback Amount. The Holdback Amount (or any portion thereof and including any interest thereon) shall be paid when due by bank wire transfer of immediately available funds to the account(s) designated pursuant to Section 2.5 .

(b)   At the Closing, the Purchaser shall pay (or cause to be paid) (i) to the Persons entitled thereto, all of the Indebtedness of the Company to the extent it is to be repaid in connection therewith as determined by the Purchaser, (ii) to the Persons entitled thereto, all of the Selling Expenses to the extent unpaid, and (iii) to the Persons entitled thereto, when due and payable and as reduced by applicable employment or withholding Taxes, the Bonus Amounts. The Purchaser may, at its option, pay the Bonus Amounts to the Company, which in turn shall pay such amounts to the Persons entitled thereto (less applicable employment or withholding Tax).

2.4.   Calculation of the Number of Purchaser Shares . The number of the Purchaser Shares shall equal the quotient of (a) $715,104 divided by (b) the Fair Market Value of one share of Purchaser Common Stock as of the Closing Date.

2.5.   Payment of the Purchase Price . On the Closing Date, the Purchaser shall (a) pay to the Sellers the Cash Purchase Price by bank wire transfer of immediately available funds to the account(s) listed on Schedule 2.5 , and (b) deliver to the Sellers the Notes. As soon as is reasonably practicable after the Closing, the Purchaser shall deliver to the Sellers the Purchaser Shares. In no event will the Purchaser or the Company have any responsibility or liability for the allocation of the Purchase Price (including any payments for adjustments made thereto) between the Sellers or the distribution of the Purchase Price (including any payments for adjustments made thereto) between the Sellers.

2.6.   Adjustments to the Notes .

(a)   Statement of Operations Calculation . Within 60 days after each of (i) the period beginning on the first day of the first full calendar month following the Closing and ending on the day immediately preceding the one-year anniversary of such date (the “ First Measurement Period ”) and (ii) the period beginning on the day after expiration of the First Measurement Period and ending on the day immediately preceding the one-year anniversary of such date (the “ Second Measurement Period ”, and together with the First Measurement Period, the “ Measurement Periods ”), the Purchaser shall cause to be prepared and delivered to the Sellers a statement of operations of the Company (the “ Statement of Operations ”) for the applicable Measurement Period, determined in accordance with GAAP. Each Statement of Operations shall include a (A) calculation of the Company’s Adjusted EBITDA for the applicable Measurement Period, and (B) written determination of whether the Company achieved the Target EBITDA for such Measurement Period. If the Sellers have any objections to the Statement of Operations for the applicable Measurement Period, the Sellers shall deliver to the Purchaser a statement setting forth their objections thereto, including supporting calculations and documentation (an “ Objections Statement ”). If an Objections Statement is not delivered to the Purchaser within 30 days after delivery of the Statement of Operations for such Measurement Period, the Statement of Operations shall be final, binding and non-appealable by the Parties. The Sellers, on the one hand, and the Purchaser, on the other hand, shall negotiate in good faith to resolve any such objections, but if they do not reach a final resolution within 30 days after the delivery of an Objections Statement, then the Sellers and the Purchaser shall submit such dispute for resolution to an independent accounting firm (the “ Independent Arbitrator ”) mutually appointed by the Sellers, on the one hand, and the Purchaser, on the other hand. If the Sellers, on the one hand, and the Purchaser, on the other hand, cannot agree on the identity of the Independent Arbitrator, then they shall select the Independent Arbitrator from a list of regional accounting firms that maintain offices in the Columbus, Ohio area; provided , however , no firm selected shall have (or have had) a material relationship with the Sellers, the Purchaser or their respective Affiliates. If either the Sellers, on the one hand, or the Purchaser, on the other hand, fail to cooperate in selecting the Independent Arbitrator, the cooperating Party may apply to the American Arbitration Association office located in Columbus, Ohio, which office shall have the power to designate the Independent Arbitrator. The Sellers and the Purchaser shall use their commercially reasonably efforts to cause the Independent Arbitrator to resolve all disagreements as soon as practicable. The resolution of the dispute by the Independent Arbitrator, or any written agreement of the Sellers and the Purchaser as to the resolution of such dispute, shall be final and binding on, and non-appealable by, the Parties. The costs and expenses of the Independent Arbitrator shall be allocated between the Purchaser, on the one hand, and the Sellers, on the other hand, based upon the percentage that the portion of the contested amount not awarded to each Party bears to the amount actually contested by such Party. For example, if the Sellers claim Adjusted EBITDA for the applicable Measurement Period is $1,000 greater than the amount determined by the Purchaser, and the Purchaser contests only $500 of the amount claimed by the Sellers, and if the Independent Arbitrator ultimately resolves the dispute by awarding the Sellers $300 of the $500 contested, then the costs and expenses of arbitration will be allocated 60% (i.e., 300 ÷ 500) to the Purchaser and 40% (i.e., 200 ÷ 500) to the Sellers.

(b)   Adjustments .

(i)   If Adjusted EBITDA as finally determined pursuant to Section 2.6(a) (“ Final EBITDA ”) for the First Measurement Period is less than the Target EBITDA for the First Measurement Period, then the principal amount of the Note payable 14 months after the Closing (subject to extension as provided therein) shall decrease in an amount equal to the difference of (A) Target EBITDA minus (B) Final EBITDA, for the First Measurement Period (the “ EBITDA Shortfall ”).

(ii)   If Final EBITDA for the Second Measurement Period is less than the Target EBITDA for the Second Measurement Period, then the principal amount of the Note payable 26 months after the Closing (subject to extension as provided therein) shall decrease in an amount equal to the difference of (A) Target EBITDA minus (B) Final EBITDA, for the Second Measurement Period.

(iii)   If a reduction is made to the Note payable 14 months after the Closing (subject to extension as provided therein) pursuant to Section 2.6(b)(i) and Final EBITDA for the Second Measurement Period is greater than Target EBITDA for the Second Measurement Period, then the principal amount of the Note payable 26 months after the Closing (subject to extension as provided therein) shall increase in an amount equal to the lesser of (A) the difference of (x) Final EBITDA minus (y) Target EBITDA, for the Second Measurement Period (“ Excess EBITDA ”), or (B) the EBITDA Shortfall. For the avoidance of doubt, in no event shall the Notes exceed their aggregate value on the Closing Date.

(c)   Access . After delivery of the Statement of Operations, and solely in connection therewith, the Purchaser shall permit the Sellers and their representatives to have reasonable access to the books, records and other documents (including work papers) pertaining to or used in connection with preparation of the Statement of Operations, and shall provide the Sellers with copies thereof as reasonably requested by the Sellers. The Sellers and their representatives may make inquiries of the Purchaser and the Company and their respective employees, accountants and representatives regarding the Statement of Operations arising in the course of their review thereof, and the Purchaser shall use, and shall cause the Company to use, their commercially reasonable efforts to cause any such employees, accountants and representatives to cooperate with and respond to such inquiries.

III.   CLOSING, DELIVERIES AND OTHER ACTIONS

3.1.   Time and Place of Closing .  The closing of the transactions contemplated hereby (the “ Closing ”) shall take place remotely via the exchange of documents and signatures on the second business day after satisfaction or waiver of the conditions (excluding conditions that, by their terms, cannot be satisfied until the Closing Date but subject to the satisfaction or waiver of those conditions) set forth in Article IX , or in such other manner and such other time as the Purchaser and the Sellers shall agree in writing. The date on which the Closing occurs is referred to herein as the “ Closing Date ”.

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

(a)   (i) stock certificates representing all of the Shares with duly executed stock powers attached in proper form for transfer to the Purchaser and (ii) any other documents that are necessary to transfer to the Purchaser good and valid title to the Shares free and clear of any Liens, with any necessary transfer tax stamps affixed or accompanied by evidence that all stock transfer taxes have been paid;

(b)   a receipt, duly executed by the Sellers, evidencing receipt by the Sellers of the Purchase Price;

(c)   an employment agreement, in the form attached hereto as Exhibit B , by and between the Company and E. Shaw (the “ E. Shaw Employment Agreement ”), duly executed by E. Shaw;

(d)   an employment agreement, in the form attached hereto as Exhibit C , by and between the Company and R. Shaw (the “ R. Shaw Employment Agreement ”, and together with the E. Shaw Employment Agreement, the “ Employment Agreements ”), duly executed by R. Shaw;

(e)   releases, each in the form of Exhibit D , duly executed by each Seller;

(f)   reasonably current good standing certificates (or equivalent document) for the Company issued by the appropriate Governmental Authority in the Company’s jurisdiction of incorporation and in each jurisdiction where the Company is qualified to do business as a foreign corporation;

(g)   copies of the Certificate of Incorporation (or equivalent document) of the Company, certified by the secretary of state of its jurisdiction of incorporation, and copies of the Bylaws (or equivalent document) of the Company, certified by an officer of the Company;

(h)   the original corporate record books and stock record books of the Company, and all books and records (including data stored on discs, tapes or other media) related to the Company’s business, including, to the extent available, all current and historical financial, accounting and Tax records);

(i)   all of the Consents listed on Schedules 4.4 and 5.4(b) ;

(j)   certificates of the Sellers required pursuant to Sections 9.1(c) and (f) ;

(k)   non-foreign person affidavits that comply with the requirements of Section 1445 of the Code, duly executed by each Seller and reasonably satisfactory to the Purchaser;

(l)   a certificate of the Sellers, dated as of the Closing Date, setting forth in sufficient detail acceptable to the Purchaser (i) all Indebtedness of the Company (other than accounts and trade payables not yet invoiced as of the Closing Date, which accounts and trade payables shall be a liability of the Sellers as Indebtedness), (ii) all Selling Expenses, (iii) all Bonus Amounts, and (iv) all Retained Accounts Receivable, in each case as of the Closing Date;

(m)   [intentionally omitted];

(n)   appropriate termination statements under the Uniform Commercial Code and other instruments as may be reasonably requested by the Purchaser to evidence the release of any and all Liens (other than Permitted Encumbrances) on any of the assets or properties of the Company;

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

(p)   joinder agreements, guarantees, security pledges, subordination agreements, certificates, and any other documents requested by the Purchaser’s lenders in connection with any required consent of such lenders to the transactions contemplated by this Agreement and the Ancillary Agreements, each to be effective only as of the Closing Date and in form and substance satisfactory to the Purchaser and its lenders; and

(q)   such other documents and instruments as the Purchaser reasonably requests to consummate the transactions contemplated hereby.

3.3.   Deliveries by the Purchaser . At the Closing, the Purchaser shall deliver, or cause to be delivered, to the Sellers (unless otherwise indicated herein) the following items:

(a)   the Purchase Price (comprised of the Cash Purchase Price and the Notes) payable as set forth in Section 2.5 ;

(b)   the Employment Agreements, duly executed by the Company;

(c)   a certificate of the Purchaser required pursuant to Sections 9.2(c) ; and

(d)   such other documents and instruments as the Sellers reasonably request to consummate the transactions contemplated hereby.

IV. REPRESENTATIONS AND WARRANTIES OF THE SELLERS

The Sellers hereby severally represent and warrant to the Purchaser as follows:

4.1.   Authority, Validity and Effect . Each Seller has all requisite authority and full legal capacity to enter into and perform his or her obligations under this Agreement and any Ancillary Agreement to which such Seller is a party and to consummate the transactions contemplated herein and therein. This Agreement and such Ancillary Agreements have been duly executed and delivered by each Seller pursuant to all necessary authorization and are the legal, valid and binding obligation of each Seller, enforceable against each Seller in accordance with their 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 (the “ General Enforceability Exceptions ”). No further action on the part of any Seller is or will be required in connection with the transactions contemplated by this Agreement or the Ancillary Agreements.

4.2.   Title to Shares . The Sellers (a) are the record and beneficial owners of the Shares as set forth on Schedule 5.3 , (b) have full power, right and authority, and any approval required by Law, to make and enter into this Agreement and to sell, assign, transfer and deliver the Shares to the Purchaser, and (c) have good and valid title to the Shares free and clear of all Liens. Upon the consummation of the transactions contemplated by this Agreement in accordance with the terms hereof, at the Closing, the Purchaser will acquire good and valid title to the Shares, free and clear of all Liens, other than Liens created by the Purchaser.

4.3.   No Conflict . Neither the execution of this Agreement or the Ancillary Agreements, nor the performance by the Sellers of their respective obligations hereunder or thereunder will (a) violate or conflict with the Certificate of Incorporation (or equivalent document) or the Bylaws (or equivalent document) of the Company, or any Law or Order, (b) 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 note, deed, mortgage, or Contract or oral understanding to which the Company, or any Seller is a party or by which any of their respective assets or properties are bound, (c)  result in the creation or imposition of any Lien with respect to, or otherwise have an adverse effect upon, the Shares or any of the assets or properties of the Company or any Seller, or (d) invalidate or adversely affect any Permit required for the conduct of the businesses of the Company, including, without limitation, any business license.

4.4.   Consents . Except as set forth on Schedule 4.4 , no Consent of any third party or Governmental Authority is required in connection with the execution and delivery by the Sellers of this Agreement or the Ancillary Agreements to which such Seller is a party, or the consummation of the transactions contemplated hereby or thereby.

4.5.   Litigation . There is no Order and no Action pending, or to the Company’s Knowledge, threatened against any Seller that would give any Person the right to enjoin or rescind the transactions contemplated by this Agreement or otherwise prevent any Seller from complying with the terms of this Agreement.

4.6.   Brokers . No Person has acted directly or indirectly as a broker, finder or financial advisor for the Company or any Seller in connection with the negotiations relating to the transactions contemplated by this Agreement for which the Purchaser or the Company will become obligated to pay a fee or commission.

4.7.   Purchaser Shares Legend . The Sellers acknowledge and accept that until such time as the Purchaser Shares have been registered under the Securities Act or otherwise may be sold pursuant to Rule 144 under the Securities Act without any restriction as to the amount of shares that may be immediately sold as of a particular date, the certificates representing the Purchaser Shares shall be issued with restrictive legends substantially similar to the following form (and a stop-transfer order may be placed against any transfer):

4.8.   Rule 144 . The Sellers acknowledge and accept that until such time as the Purchaser Shares have been registered under the Securities Act or a Conversion Transaction occurs, if any Seller desires to sell any of his or her respective shares of the Purchaser Shares, then such Seller must comply with the terms and conditions of Rule 144 under the Securities Act, which terms and conditions include, among other things, mandatory holding periods.

4.9.   Investment Representations .

(a)   The Purchaser Shares acquired by the Sellers are being acquired for investment only and not with a view of any distribution thereof that would violate the Securities Act or any applicable state securities laws.

(b)   The Sellers (i) are financially able to hold the Purchaser Shares for long-term investment, (ii) understand that the nature and amount of the Purchaser Shares being purchased is consistent with their overall investment program and financial position and (iii) recognize that there are substantial risks involved in the acquisition of the Purchaser Shares, including risk of loss of the entire amount of such investment.

(c)   The Sellers confirm that they (i) are familiar with the Purchaser, (ii) have been given the opportunity to ask questions of the officers and directors of the Purchaser and to obtain (and have received to their satisfaction) such information about the business and financial condition of the Purchaser as they have reasonably requested and (iii) have such knowledge and experience in financial and business matters that they are capable of evaluating the merits and risks of the investment in the Purchaser Shares.

(d)   Each Seller is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act.

V. REPRESENTATION AND WARRANTIES RELATING TO THE COMPANY

Each Seller hereby, jointly and severally, represents and warrants to the Purchaser as follows:

5.1.   Existence and Good Standing . The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Colorado and is duly authorized, qualified or licensed to do business as a foreign corporation in each of the jurisdictions set forth on `Schedule 5.1 , which are the only jurisdictions in which the Company is required to be so qualified.

5.2.   Power . The Company has the necessary power and authority to (a) own, operate and lease its properties and assets as and where currently owned, operated and leased and (b) carry on its business as currently conducted.

5.3.   Capitalization of the Company . The authorized capital stock of the Company consists of 50,000 shares of common stock, without par value, of which 1,818 shares are issued and outstanding all of which have been (a) duly authorized and validly issued and are fully paid and non assessable and (b) issued in compliance with all securities laws and all applicable agreements. All of the Shares are owned beneficially and of record by the Sellers in each case free and clear of any Liens. 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 shares of its capital stock or other equity securities. The Shares represent the only issued and outstanding shares of capital stock of the Company. No former equity owner of the Company or any of its respective predecessors, and no former holder of any right to acquire any interest in the Company or any of its respective predecessors (whether by warrant, option, convertible instrument or otherwise) has any claim or rights against the Company. There are no Contracts relating to the issuance, sale, transfer or voting of any equity securities or other securities of the Company. Schedule 5.3 sets forth a true and complete statement of the capitalization of the Company. The Company has no Subsidiaries or Investments.

5.4.   Property .

(a)   Title . Other than the Permitted Exceptions, the Company has good and marketable title to, valid and enforceable leasehold interests in, or a valid and enforceable license to, all of its tangible assets and properties (including, without limitation, the Leased Property) free and clear of any Liens. 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 are sufficient for the operation of the business of the Company as it is currently conducted and proposed to be conducted. The Company owns no real property.

(b)   Real Property Leases . Schedule 5.4(b) sets forth a true and complete description of all real property leased, licensed to or otherwise used or occupied (but not owned) by 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 pursuant to a Real Property Lease. Each Real Property Lease is valid, binding and enforceable in accordance with its terms and is in full force and effect. There are no existing defaults by the Company or the lessor under any of the Real Property Leases, and 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 5.4(b) , (i) no Consent is required from the lessor under any of the Real Property Leases to consummate the transactions contemplated by this Agreement and the Ancillary Agreements and (ii) no Affiliate of the Company or any Seller is the owner or lessor of any Leased Real Property. The Company has not leased or sublet as lessor or sublessor, and no third party is in possession of, any of the Real Property.

(c)   Tangible Personal Property . Schedule 5.4(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 $1,000 or more, that is owned or leased by the Company (the “ Tangible Personal Property ”). The Company is in full possession of all of its Tangible Personal Property.

(d)   Absence of Violations . Except as set forth on Schedule 5.4(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 (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. The Company has obtained all Permits necessary for the operation of its business at the Real Property.

5.5.   Litigation . Except as set forth on Schedule 5.5 , there is no instance in which the Company is or has been within the previous five years (a) subject to any unsatisfied Order, or (b) a party or is threatened to be made a party to any Action. Except as set forth on Schedule 5.5 , no event has occurred or circumstances exist that could give rise to or serve as a basis for the commencement of any Action. There are no Actions pending or threatened that question the validity of this Agreement, the Ancillary Agreements or any of the transactions contemplated hereby or thereby.

5.6.   Compliance with Laws . The Company is now, and has been at all times during the previous five years, in compliance with all Laws and Orders, including, without limitation, those respecting (a) pension administration, (b) labor relations or employment matters and related foreign social security laws, (c) zoning, (d) delivery practices and procedures, and (e) intellectual property. To the Company’s Knowledge, no proposed Law or Order exists that would be applicable to the Company and that would adversely affect any assets, properties, liabilities, operations or prospects of the Company. Neither the Company nor any Seller has received any notification or communication from any Governmental Authority threatening to revoke any Permit owned or held by the Company.

5.7.   Necessary Property . The Company is the only operation through which the business of the Compan