MERGER AND RECAPITALIZATION
AGREEMENT
This Agreement made and entered into as of this
19 th
day of October, 2009 (the “
Agreement ”), by and among WES Consulting, Inc., a
Florida corporation with its principal place of business located at
2745 Bankers Industrial Drive, Doraville, Georgia 30360 (“
WES ”); the undersigned shareholder of WES which
represents a majority of the issued and outstanding common stock of
WES (the “ WES Shareholder ”); Liberator, Inc.,
a Nevada Corporation, with its registered office at 2745 Bankers
Industrial Drive, Doraville, Georgia 30360 (“
Liberator ”) and the undersigned shareholders of
Liberator which represents a majority vote of the issued and
outstanding equity of Liberator (the “ Liberator
Shareholders ”).
RECITALS
A. The
respective Boards of Directors and shareholders representing a
majority of the issued and outstanding common stock of each of
Liberator and WES have approved and declared advisable the merger
of Liberator with and into WES (the “ Merger ”)
and approved the Merger upon the terms and subject to the
conditions set forth in this Agreement, whereby each issued and
outstanding share of the common stock of Liberator (a “
Liberator Common Share ” or, collectively, the “
Liberator Common Shares” ), will be converted into one
share of common stock, $0.01 par value, of WES (“ WES
Common Stock ”) which, after giving effect to the Merger,
shall equal, in the aggregate, 98.4% of the total issued and
outstanding common stock of WES. At the Approval Time
(as defined herein), each Series A Preferred Share of Liberator (a
“ Liberator Preferred Share ” or, collectively,
the “ Liberator Preferred Shares ”) will be
converted into one share of preferred stock of WES (the “
WES Preferred Stock ”). Liberator Common
Shares and Liberator Preferred Shares are referred to herein,
collectively, as the “ Liberator Shares.
” The WES Common Stock owned by Liberator will be
cancelled upon the consummation of the transactions contemplated by
this Agreement.
B. The
respective Boards of Directors and shareholders representing a
majority of the issued and outstanding common stock of each of
Liberator and WES have determined that the Merger is in furtherance
of and consistent with their respective long-term business
strategies and is fair to and in the best interests of their
respective stockholders.
C. It
is intended that, for federal income tax purposes, the Merger shall
qualify as a reorganization under the provisions of Section 368(a)
of the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder (the “ Code
”);
D. For
financial accounting purposes, it is intended that the Merger will
be accounted for as a “ purchase ”;
NOW, THEREFORE , in consideration of the premises, and of the
representations, warranties, covenants and agreements contained
herein, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
THE MERGER; CLOSING; EFFECT OF
MERGER
SECTION 1.1 The
Merger . Upon the terms and subject to the
conditions set forth in this Agreement and in accordance with the
laws of the state of Florida (“ Florida Law ”)
and the laws of the State of Nevada (“ Nevada Law
”) at the Effective Time, Liberator shall be
merged with and into WES and the separate corporate existence of
Liberator shall thereupon cease. WES shall be the
surviving corporation in the Merger (sometimes hereinafter referred
to as the “ Surviving Corporation ”), and the
separate corporate existence of WES with all its rights,
privileges, immunities, powers and franchises shall continue
unaffected by the merger, except as set forth
herein. The Merger shall have the effects specified in
the Florida Law.
SECTION 1.2
Closing . Subject to the terms and
conditions of this Agreement, the closing of the Merger and the
consummation of the other transactions contemplated hereby (the
“ Closing ”) shall take place at the offices of
Anslow & Jaclin LLP, 195 Route 9 South, Manalapan, NJ 07726 not
later than October 19, 2009 and at such other date, time and place
as the parties hereto shall agree.
SECTION 1.3
Effective Time . On the date of Closing,
Liberator and WES will cause a Certificate of Merger (the “
Florida Certificate of Merger ”) to be executed,
acknowledged and filed with the Secretary of State of the State of
Florida. On the date of Closing, Liberator and WES will cause a
Certificate of Merger (the "“ Nevada Certificate of
Merger ”) to be executed, acknowledged and filed with the
Secretary of State of the State of Nevada. The Merger shall become
effective at the time when the Florida Certificate of Merger has
been filed with the Secretary of State of the State of Florida, or,
as otherwise agreed by Liberator and WES (the “ Effective
Time ”).
SECTION 1.4
Certificate of Incorporation . The
certificate of incorporation of WES as in effect immediately prior
to the Effective Time shall be the certificate of incorporation of
the Surviving Corporation (the “ Certificate of
Incorporation ”), until duly amended as provided therein
or by applicable law.
SECTION 1.5
By-Laws . The by-laws of WES in effect
immediately prior to the Effective Time shall be the by-laws of the
Surviving Corporation (the “By-Laws”), until thereafter
amended as provided therein or by applicable law.
SECTION 1.6
Directors . As of the Effective Time, the
authorized number of directors comprising the Board of Directors of
WES shall consist of not less than two (2) and not more than five
(5) individuals. The following individuals shall be
elected to the Board Directors of WES at the Effective Time: (i)
Louis S. Friedman (Chairman of the Board); and (ii) Ronald P.
Scott.
SECTION 1.7
Officers . As of the Effective Time, the
officers of WES shall be (i) Louis S. Friedman (Chief Executive
Officer, President), (ii) Ronald P. Scott (Chief Financial Officer
and Secretary) and (iii) Leslie Vogelman (Treasurer), until their
successors have been duly elected or appointed and qualified or
until their earlier death, resignation or removal in accordance
with the Certificate of Incorporation and the By-Laws.
SECTION 1.8
Effect on Capital Stock . As a result of
the Merger and without any action on the part of the holder of any
capital stock of WES:
(a) Merger
Consideration .
(i) At
the Effective Time, each Liberator Common Share issued and
outstanding immediately prior to the Effective Time shall be
converted into, and become exchangeable for one (1) validly issued,
fully paid and non-assessable share of WES Common Stock (the
“ WES Common Shares ”).
(ii) At
the Approval Time, each Liberator Preferred Share issued and
outstanding immediately prior to the Effective Time shall be
converted into and become exchangeable for one (1) share of WES
Preferred Stock.
(iii) WES
Common Shares and WES Preferred Stock, collectively, are referred
to herein as the “ WES Merger Stock, ” and the
conversion of Liberator Shares into WES Merger Stock is referred to
as the “ Merger Purchase Price ”);
(b) At the Effective
Time, all Liberator Shares shall be canceled and Liberator shall
cease to exist, and each certificate (a “ Certificate
”) formerly representing:
(i)
any Liberator
Common Shares shall thereafter represent only the right to receive
the shares of WES Common Stock into which such Liberator Common
Shares have been converted; and
(ii) any
Liberator Preferred Shares shall thereafter represent only the
right to receive, at the Approval Time, the shares of WES Preferred
Stock into which such Liberator Preferred Shares have been
converted.
(c) At the Effective
Time, all WES Common Stock owned by Liberator shall be immediately
cancelled and returned to the treasury of WES.
SECTION 1.9 Exchange
of Certificates for Shares.
(i) At
the Effective Time, WES shall deliver or cause to be delivered to
each respective owner of the Liberator Common Shares and in each of
their respective names certificates representing WES Common Stock
into which Liberator Common Shares that such shareholders owns are
to be converted as set forth on Schedule 1 attached
hereto.
(ii) At
the Approval Time, WES shall deliver or cause to be delivered to
each respective owner of the Liberator Preferred Shares and in each
of their respective names certificates representing WES Preferred
Stock into which Liberator Preferred Shares that such shareholders
owns are to be converted as set forth on Schedule 1 attached
hereto.
(b) Fractional
Shares . No certificates or scrip representing
fractional shares of WES Common Stock or WES Preferred Stock shall
be issued upon the surrender for exchange of Certificates pursuant
to this Article I; no dividend or other distribution by WES and no
stock split, combination or reclassification shall relate to any
such fractional share; and no such fractional share shall entitle
the record or beneficial owner thereof to vote or to any other
rights of a stockholder of WES. In lieu of any such factional
share, each holder of Liberator Shares who would otherwise have
been entitled thereto upon the surrender of Certificate(s) for
exchange pursuant to this Article I will be paid an additional
share of WES Common Stock or WES Preferred Stock.
(c) Adjustments of
Conversion Number . In the event that WES changes
the number of shares of WES Common Stock or WES Preferred Stock ,
issued and outstanding prior to the Effective Time as a result of a
reclassification, stock split (including a reverse split), dividend
or distribution, recapitalization, merger (other than the Merger,
Stock Purchase or the cancellation of options previously granted by
Liberator), subdivision, or other similar transaction with a
dilutive effect, or if a record date with respect to any of the
foregoing shall occur prior to the Effective Time, the conversion
number shall be equitably adjusted.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF
LIBERATOR
Liberator represents, warrants and covenants to
WES as follows and acknowledges that WES is relying upon such
representations and warranties in connection with the Contemplated
Transactions (as hereinafter defined):
SECTION 2.1
Capitalization . The outstanding and
issued capital stock of Liberator consists of 60,932,981 shares of
common stock and 4,300,000 shares of Series A Preferred
Shares. Schedule 1 sets forth the name of
each record and beneficial shareholder of Liberator (each a “
Shareholder ” and collectively the “
Shareholders ”) and the number of Liberator Shares
held by each such person. One Up Innovations, Inc., a Georgia
corporation is wholly owned by Liberator (“ OneUp
”); Foam Labs, Inc., a Georgia corporation is wholly owned by
OneUp (together with OneUp, jointly and severally, the “
Subsidiaries ”), is wholly owned by Liberator and are
its only subsidiaries. Except as set forth on
Schedule 1 , Liberator and Subsidiaries do not and, at the
Closing, Liberator and Subsidiaries will not, have outstanding any
capital stock or other securities or any rights, warrants or
options to acquire securities of Liberator or the Subsidiaries, or
any convertible or exchangeable securities and, other than WES
pursuant to this Agreement, no person has or, at Closing will have,
any right to purchase or otherwise acquire any securities of
Liberator or the Subsidiaries. There are, and at Closing
there will be, no outstanding obligations of Liberator or the
Subsidiaries to repurchase, redeem or otherwise acquire any
securities of Liberator or the Subsidiaries. All of
Liberator Shares are, and at Closing will be, duly authorized, duly
and validly issued, fully paid and non-assessable, and none were
issued in violation of any preemptive rights, rights of first
refusal or any other contractual or legal restrictions of any kind
except as otherwise disclosed.
SECTION 2.2
Title to the Shares . The Shareholders are the beneficial
owner and holds good and valid title to its Liberator Shares free
and clear of any Lien. At the Closing, each Shareholder
of Liberator will deliver Liberator Shares to WES free and clear of
any Lien, other than restrictions imposed by the Securities
Act and applicable securities Laws including the laws of the
State of Florida.
SECTION 2.3
Authority Relative to this Agreement .
At the Closing,
Liberator will have full power, capacity and authority to execute
and deliver each Transaction Document to which it is or, at
Closing, will be, a party and to consummate the transactions
contemplated hereby and thereby (the “ Contemplated
Transactions ”). The execution, delivery and
performance by Liberator of each Transaction Document and the
consummation of the Contemplated Transactions to which Liberator
is, or at Closing, will be, a party will have been duly and validly
authorized by Liberator and no other acts by or on behalf of
Liberator will be necessary or required to authorize the execution,
delivery and performance by each of Liberator of each Transaction
Document and the consummation of the Contemplated Transactions to
which it is or, at Closing, will be, a party. This
Agreement and the other Transaction Documents to which Liberator is
a party have been duly and validly executed and delivered by
Liberator and (assuming the valid execution and delivery thereof by
the other parties thereto) will constitute the legal, valid and
binding agreements of Liberator enforceable against Liberator in
accordance with their respective terms, except as such obligations
and their enforceability may be limited by applicable bankruptcy
and other similar Laws affecting the enforcement of creditors'
rights generally and except that the availability of equitable
remedies is subject to the discretion of the court before which any
proceeding therefor may be brought (whether at law or in
equity).
SECTION 2.4
No Conflicts; Consents . The execution, delivery and
performance by Liberator of each Transaction Document to which it
is a party and the consummation of the Contemplated Transactions to
which Liberator is a party, upon approval of the Shareholders will
not: (i) violate any provision of the certificate of
incorporation or by-laws of Liberator; (ii) require Liberator
to obtain any consent, approval or action of or waiver from, or
make any filing with, or give any notice to, any Governmental Body
or any other person, except as otherwise disclosed (the “
Liberator Required Consents ”); (iii) violate,
conflict with or result in a breach or default under (with or
without the giving of notice or the passage of time or both), or
permit the suspension or termination of, any material Contract
(including any Real Property Lease) to which Liberator is a party
or by which it or any of its assets is bound or subject, or to the
best of Liberator’s knowledge and information result in the
creation of any Lien upon any of Liberator Shares or upon any of
the Assets of Liberator; (iv) violate any Order, any Law, of
any Governmental Body against, or binding upon, Liberator or upon
any of their respective assets or the Business; or (v) violate
or result in the revocation or suspension of any Permit.
SECTION 2.5
Corporate Existence and Power . Liberator is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Nevada, and has all requisite powers, authority and
all Permits required to own and/or operate its Assets and to carry
on the Business as now conducted, including all qualifications
under any statute in effect in any state or foreign jurisdiction in
which Liberator operates its Business. Liberator is duly
qualified to do business and is in good standing in each state of
the United States and in each other jurisdiction where the
character of the property owned or leased by it or the nature of
its activities makes such qualification necessary.
SECTION 2.6
Charter Documents and Corporate Records .
Liberator has heretofore
delivered to WES true and complete copies of the Articles of
Incorporation, By-Laws and minute books, or comparable instruments,
of Liberator as in effect on the date hereof. The stock
transfer books of Liberator have been made available to WES for its
inspection and are true and complete in all respects.
SECTION 2.7
Financial Statements .
(a) Schedule 2.7A sets
forth true, complete and correct copies of: Liberator's audited
financial statements as of and for the fiscal years ended June 30,
2009 and June 30, 2008 (the “ Annual Statements
”) and all management letters, management representation
letters and attorney response letters issued in connection with the
Annual Statements. The Annual Statements present fairly and
accurately in all material respects the financial position of
Liberator and the Subsidiaries as of its date, and the earnings,
changes in stockholders' equity and cash flows thereof for the
periods then ended in accordance with GAAP, consistently
applied. Each balance sheet contained therein or
delivered pursuant hereto fully sets forth all consolidated Assets
and Liabilities of Liberator existing as of its date which, under
GAAP, should be set forth therein, and each statement of earnings
contained therein or delivered pursuant hereto sets forth the items
of income and expense of Liberator which should be set forth
therein in accordance with GAAP.
(b) All financial, business and
accounting books, ledgers, accounts and official and other records
relating to Liberator have been properly and accurately kept and
completed, and Liberator has no knowledge, notice belief or
information there are any material inaccuracies or discrepancies
contained or reflected therein.
SECTION 2.8
Liabilities . Liberator has not incurred any Liabilities since
June 30, 2009 (the “ Latest Balance Sheet Date
”) except (i) current Liabilities for trade or business
obligations incurred in connection with the purchase of goods or
services in the ordinary course of the Business and consistent with
past practice, and (ii) Liabilities reflected on any balance
sheet referred to in Section 2.7(a).
SECTION 2.9
Liberator Receivables . Except to the extent of the amount
of the allowance for doubtful accounts reflected in the Annual
Statements and the Interim Statements, all the Receivables of
Liberator reflected therein, and all Receivables that have arisen
since the Latest Balance Sheet Date (except Receivables that have
been collected since such date), are valid and enforceable Claims
subject to no known defenses, offsets, returns, allowances or
credits of any kind, and constitute bona fide Receivables
collectible in the ordinary course of the Business except as
enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance or
similar laws or principles of equity affecting the enforcement of
creditors rights generally.
SECTION 2.10 Absence
of Certain Changes . (a) Since June 30, 2009,
Liberator has conducted the Business in the ordinary course
consistent with past practice, except as otherwise disclosed
hereof, and there has not been:
(i) Any
material adverse change in the Condition of the
Business;
(ii) Any
material damage, destruction or other casualty loss (whether or not
covered by insurance), condemnation or other taking affecting the
Business or the Assets of Liberator;
(iii) Any
change in any method of accounting or accounting practice by
Liberator;
(iv) Except
for normal increases granted in the ordinary course of business,
any increase in the compensation, commission, bonus or other direct
or indirect remuneration paid, payable or to become payable to any
officer, stockholder, director, consultant, agent or employee of
Liberator, or any alteration in the benefits payable or provided to
any thereof;
(v)
Any material adverse change in the
relationship of Liberator with its employees, customers, suppliers
or vendors;
(vi)
Except for
any changes made in the ordinary course of Business, any material
change in any of Liberator's business policies, including
advertising, marketing, selling, pricing, purchasing, personnel,
returns or budget policies;
(vii)
Any agreement
or arrangement whether written or oral to do any of the
foregoing.
SECTION 2.11 Leased
Real Property . (a) Liberator has no fee
interest, purchase options or rights of first refusal in any real
property and Liberator has no leasehold or other interest in any
real property, except for the real property lease between Bedford
Realty Company, LLC and OneUp Innovations, Inc. dated September 26,
2005 covering approximately 140,000 square feet of floor space
known as 2745 Bankers Industrial Drive, Doraville, GA 30360 (the
“ Leased Real Property ”), and all leases
including all amendments, modifications, extensions, renewals
and/or supplements thereto (collectively, “ Real Property
Leases ”).
SECTION 2.12 Personal
Property; Assets . Liberator has good and valid title
to (or valid leasehold interest in) all of its personal property
and Assets, free and clear of all Liens, except the Liabilities
reflected on any balance sheet referred to in
Section 2.7(a). The machinery, equipment, computer
software and other tangible personal property constituting part of
the Assets and all other Assets (whether owned or leased) are in
good condition and repair (subject to normal wear and tear) and are
reasonably sufficient and adequate in quantity and quality for the
operation of the Business as previously and presently conducted.
The Assets constitute all of the assets, which are necessary to
operate the Business of Liberator as currently
conducted.
SECTION 2.13
Contracts . (a) Except as disclosed
in the financial statements referred to in Section 2.7(a),
Liberator is not a party or by which it or its Assets are bound or
subject to Contracts that: (i) cannot be canceled upon thirty (30)
days' notice without the payment or penalty of less than one
thousand dollars ($1,000); or (ii) involve aggregate annual future
payments by or to any person of more than five thousand dollars
($5,000). True and complete copies of all written Contracts
(including all amendments thereto and waivers in respect thereof)
and summaries of the material provisions of all oral Contracts so
listed have been made available to WES.
(b) All Contracts to
which Liberator is a party are valid, subsisting, in full force and
effect and binding upon Liberator and the other parties thereto, in
accordance with their terms, except that no representation or
warranty is given as to the enforceability of any oral
Contracts. Liberator is not in default (or alleged
default) under any such Contract.
SECTION 2.14 Patents
and Intellectual Property Rights . (a) The disclosures in the SEC
Documents sets forth each patent, trademark, trade name, service
mark, brand mark, brand name, and registered copyright as well as
all registrations thereof and pending applications therefor, and
each license or other contract relating thereto (collectively, the
“ Intellectual Property ”) owned or used in
connection with the Business by Liberator and indicates, with
respect to each item of Liberator's Intellectual Property that is
licensed by Liberator, the name of the licensor thereof and, with
respect to oral Contracts, the terms of such license relating
thereto. The use of the foregoing by Liberator does not
conflict with, infringe upon, violate or interfere with or
constitute an appropriation of any right, title, interest or
goodwill, including, without limitation, any intellectual property
right, patent, trademark, trade name, service mark, brand name,
computer program, database, industrial design, trade secret,
copyright or any pending application thereto of any other person
and there have been no claims made and Liberator has not received
any notice or otherwise know that any of the foregoing is invalid
or conflicts with the asserted rights of other Persons or have not
been used or enforced or have been failed to be used or enforced in
a manner that would result in the abandonment, cancellation or
unenforceability of the Intellectual Property, except as otherwise
disclosed.
(b) Liberator owns or has
rights to use all Intellectual Property, know-how, formulae and
other proprietary and trade rights necessary to conduct the
Business as it is now conducted. Liberator has not
forfeited or otherwise relinquished any such Intellectual Property,
know-how, formulae or other proprietary right used in the conduct
of the Business as now conducted.
(c) To the extent used in
the conduct of the Business by Liberator, each of the licenses or
other contracts relating to Liberator's Intellectual Property
(collectively, the “ Intellectual Property
Licenses” ) is in full force and effect and is valid and
enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors’ rights and remedies generally, and
subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law
or in equity), and there is no notice or claim of default under any
Intellectual Property License either by Liberator or, to
Liberator's knowledge, by any other party thereto, and to
Liberator’s knowledge, no event has occurred that with the
lapse of time or the giving of notice or both would constitute a
default by Liberator thereunder.
SECTION 2.15 Claims
and Proceedings . There are no outstanding Orders of any
Governmental Body against or involving Liberator, its Assets, the
Business, or Liberator Shares. There are no actions, suits, claims
or counterclaims, examinations, Liberator Required Consents or
legal, administrative, governmental or arbitral proceedings or
investigations (collectively, “ Claims ”)
(whether or not the defense thereof or Liabilities in respect
thereof are covered by insurance), pending or, to the best of
Liberator's knowledge, threatened on the date hereof, against or
involving Liberator, its Assets, the Business or Liberator
Shares.
SECTION 2.16
Taxes . (a) Except as otherwise
disclosed in the SEC Documents:
(i) Liberator
has timely filed or, if not yet due but due before Closing, will
timely file all Tax Returns required to be filed by it for all
taxable periods ending on or before the date of Closing and all
such Tax Returns are or, if not yet filed, will be, upon filing,
true, correct and complete in all material respects;
(ii) Liberator
has paid, or if payment is not yet due but due before Closing, will
promptly pay when due to each appropriate Tax Authority, all Taxes
of Liberator shown as due on the Tax Returns required to be filed
by it for all taxable periods ending on or before the date of
Closing;
(iii) the
accruals for Taxes currently payable as well as for deferred Taxes
shown on the financial statements of Liberator as of the date of
the Annual Statements, the Interim Statements or the date of any
financial statements delivered hereunder: (A) adequately
provide for all contingent Tax Liabilities of Liberator as of the
date thereof; and (B) accurately reflect, as of the date
thereof, all unpaid Taxes of Liberator whether or not disputed, in
each case as required to be reflected thereon in order for such
statements to be in accordance with GAAP;
(iv) no
extension of time has been requested or granted for Liberator to
file any Tax Return that has not yet been filed or to pay any Tax
that has not yet been paid and Liberator has not granted a power of
attorney that remains outstanding with regard to any Tax
matter;
(v) Liberator
has not received notice of a determination by a Tax Authority that
Taxes are currently owed by Liberator (such determination to be
referred to as a “ Tax Deficiency” ) and, to
Liberator's knowledge, no Tax Deficiency is proposed or
threatened;
(vi) all
Tax Deficiencies have been paid or finally settled and all amounts
determined by settlement to be owed have been paid;
(vii) there
are no Tax Liens on or pending against Liberator or any of the
Assets, other than those which constitute Permitted
Liens;
(viii) there
are no presently outstanding waivers or extensions or requests for
a waiver or extension of the time within which a Tax Deficiency may
be asserted or assessed;
(ix) no
issue has been raised in any examination, investigation, Liberator
Required Consents, suit, action, claim or proceeding relating to
Taxes (a “ Tax Liberator Required Consents ”)
which, by application of similar principles to any past, present or
future period, would result in a Tax Deficiency for such
period;
(x) there
are no pending or threatened Tax audits of Liberator;
(xi) Liberator
has no deferred inter-company gains or losses that have not been
fully taken into income for income Tax purposes;
(xii)
there are no transfer or other
taxes (other than income taxes) imposed by any state on Liberator
by virtue of the Contemplated Transactions; and
(xiii) no
claim has been made by any Tax Authority that Liberator is subject
to Tax in a jurisdiction in which Liberator is not then paying Tax
of the type asserted.
Each reference to a provision of the Code in
this Section 2.16 shall be treated for state and local Tax
purposes as a reference to analogous or similar provisions of state
and local law.
(b) To Liberator’s
knowledge, Liberator has collected and remitted to the appropriate
Tax Authority all sales and use or similar Taxes required to be
collected on or prior to the date of Closing and has been furnished
properly completed exemption certificates for all exempt
transactions and has no information otherwise or notice of any
claim by any government or jurisdiction with regards
thereto. Liberator has maintained and has in its
possession all records, supporting documents and exemption
certificates required by applicable sales and use Tax statutes and
regulations to be retained in connection with the collection and
remittance of sales and use Taxes for all periods up to and
including the date of Closing. With respect to sales
made by Liberator prior to the date of Closing for which sales and
use Taxes are not yet due as of the date of Closing, all applicable
sales and use Taxes payable with respect to such sales will have
been collected or billed by Liberator and will be included in the
Assets of Liberator as of the date of Closing.
SECTION 2.17 Compliance
with Laws . Liberator is not in violation of any
order, judgment, injunction, award, citation, decree, consent
decree or writ (collectively, “ Orders ”) and to
the best of Liberator’s knowledge, belief and information,
any Laws of any Governmental Bodies affecting Liberator, Liberator
Shares or the Business.
SECTION 2.18
Permits . Liberator has obtained all
licenses, permits, certificates, certificates of occupancy, orders,
authorizations and approvals (collectively, “ Permits
”), and has made all required registrations and filings with
all Governmental Bodies, that are necessary to the ownership of the
Assets, the use and occupancy of the Leased Real Property, as
presently used and operated, and the conduct of the Business or
otherwise required to be obtained by Liberator. All
Permits required to be obtained or maintained by Liberator have
been provided and disclosed and are in full force and effect; no
violations are or have been recorded, nor have any notices or
violations thereof been received, in respect of any Permit; and no
proceeding is pending or threatened to revoke or limit any Permit;
and the consummation of the Contemplated Transactions will not (or
with the giving of notice or the passage of time or both will not)
cause any Permit to be revoked or limited.
SECTION 2.19 Environmental
Matters . To the best
of Liberator’s knowledge, belief and information,
Liberator is, and at all times has been, in full compliance with,
and has not been and is not in violation of or liable under, any
Environmental Law.
SECTION 2.20 SEC
Filings . As of their respective dates, the
SEC Documents were prepared in accordance with the Exchange Act and
the Securities Act and did not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated in those documents or necessary to make the statements in
those documents not misleading, in light of the circumstances under
which they were made. As of their respective
dates, these reports and statements will not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated in them or necessary to make the statements
in them not misleading, in light of the circumstances under which
they are made and these reports and statements will comply in all
material respects with all applicable requirements of the Exchange
Act and the Securities Act.
SECTION 2.21
Finders’
Fees .
There is no investment
banker, broker, finder or other intermediary which has been
retained by or is authorized to act on behalf of Liberator who
might be entitled to any fee or commission from Liberator in
connection with the consummation of the Contemplated
Transactions.
SECTION 2.22 Disclosure
. Neither
this Agreement, the Schedules hereto, nor any reviewed or unaudited
financial statements, documents or certificates furnished or to be
furnished to WES or by or on behalf of Liberator o pursuant to this
Agreement contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact
necessary in order to make the stat
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