Dated as of September 1,
2005
AMS HEALTH SCIENCES,
INC.
CERTAIN SHAREHOLDERS OF THE
COMPANY
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ARTICLE II. PURCHASE AND SALE OF
SHARES
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2.1 Agreement to Purchase and Sell
Shares
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2.2 Purchase Price for the Shares
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2.3 Manner of Payment of the Purchase Price
Consideration
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2.4 Manner of Delivery of Shares
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3.2 Deliveries at Closing
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ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND THE PRINCIPAL SHAREHOLDER
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4.1 Organization and Good Standing
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4.2 Authority; No Conflict
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4.6 Title to Properties; Encumbrances
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4.7 Condition and Sufficiency of
Assets
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4.10 No Undisclosed Liabilities
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4.12 Compliance with Legal Requirements;
Governmental Authorizations
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4.13 Legal Proceedings; Orders
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4.14 Contracts; No Defaults
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4.16 Environmental Matters
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4.17 Labor Relations; Compliance;
Employees
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4.18 Intellectual Property Rights
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4.19 No Other Agreements to Sell Assets or
Capital Stock of the Company
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4.20 Relationships with Related
Persons
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4.21 Customers and Suppliers
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4.23 Affiliate Indebtedness
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ARTICLE V. REPRESENTATIONS AND WARRANTIES OF
THE SHAREHOLDERS
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5.1 Ownership of the Shares
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5.2 Shareholder Authority
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ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF
THE BUYER
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6.1 Organization of Buyer
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6.2 Authorization; No Conflict
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ARTICLE VII. POST-CLOSING COVENANTS OF THE
BUYER
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7.1 Principal Shareholder Guarantees
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ARTICLE VIII. INDEMNIFICATION;
REMEDIES
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8.1 Survival of Representations, Etc.
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8.2 Indemnification by Principal
Shareholder
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ARTICLE IX. MISCELLANEOUS
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9.4 Entire Agreement; Amendments and
Waivers
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9.5 Multiple Counterparts
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9.10 Consent to Jurisdiction
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9.12 No Interpretation Against
Drafter
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ii
THIS STOCK
PURCHASE AGREEMENT is dated as of September 1
st , 2005 (this “Agreement”), is by and
among AMS Manufacturing, Inc., an Oklahoma corporation
(“Buyer”), AMS Health Sciences, Inc., an Oklahoma
corporation (the “Parent”), Heartland Cup, Inc., an
Oklahoma corporation (the “Company”), Truett McCarty,
(the “Principal Shareholder”) and the shareholders
listed on the signature pages attached hereto (collectively with
the Principal Shareholder, the
“Shareholders”).
A. The
Shareholders own the issued and outstanding shares of capital stock
(the “Shares”) of the Company owned by each
Shareholder, as set forth in Exhibit A
hereto.
B. Buyer
desires to acquire, and the Shareholders desire to transfer, all of
the Shares of the Company on the terms and subject to the
conditions herein contained.
NOW, THEREFORE, in
consideration of the mutual covenants and promises contained herein
and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
DEFINITIONS
1.1 Defined
Terms . As used herein, capitalized terms below shall have the
meanings set forth on Appendix A . Any of such terms,
unless the context otherwise requires, may be used in the singular
or plural, depending upon the reference.
1.2 Other
Terms . Other terms may be defined elsewhere in the text of
this Agreement and, unless otherwise indicated, shall have such
meaning indicated throughout this Agreement.
PURCHASE AND SALE OF
SHARES
2.1 Agreement
to Purchase and Sell Shares . On the terms and subject to the
conditions contained in this Agreement, at the Closing, Buyer shall
purchase from the Shareholders, and the Shareholders shall sell to
Buyer (the “Share Purchase”), the Shares free and clear
of all options, proxies, voting trusts, voting agreements,
judgments, pledges, charges, escrows, rights of first refusal and
first offer, mortgages, indentures, claims, transfer restrictions,
liens, security interests and other encumbrances (collectively,
“Claims”); together with all rights now and hereafter
attaching or accruing thereto.
2.2 Purchase
Price for the Shares . The purchase price (the “Purchase
Price Consideration”) for each Share shall be 1/10 of a
validly issued, fully paid and nonassessable share of the
Parent’s common stock (the “Parent Common
Stock”).
2.3 Manner of
Payment of the Purchase Price Consideration . At the Closing,
Parent shall pay the Purchase Price Consideration on behalf of
Buyer to each Shareholder for each Share delivered by such
Shareholder for purchase at Closing.
1
2.4 Manner of
Delivery of Shares . At the Closing, the Shareholders shall
deliver to Buyer certificates evidencing the Shares (together with
all rights then or thereafter attaching thereto) duly endorsed in
blank, or accompanied by valid stock powers duly executed in blank,
in proper form for transfer.
2.5 Restrictive
Legend . The Shareholders understand and acknowledge that there
will be placed on the certificates for the shares of Parent Common
Stock issued as Purchase Price Consideration, or any substitution
therefore, in addition to any other legend which may be required, a
legend stating in substance:
“THE
SALE, TRANSFER OR OTHER DISTRIBUTION OF THE SHARES EVIDENCED BY
THIS CERTIFICATE BY THE HOLDER HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THESE SHARES MAY NOT BE PUBLICLY SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF IN ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION UNDER SAID ACT.”
CLOSING
3.1 Closing
. Upon the terms and subject to the conditions set forth herein,
the closing of the Transactions (the “Closing”) shall
occur immediately upon execution of this Agreement at the offices
of McAfee & Taft, Two Leadership Square, 211 N. Robinson,
Oklahoma City, OK 73102 or such other place as the parties may
otherwise agree.
3.2 Deliveries
at Closing.
(a)
Deliveries Made by the Buyer or the Parent . At the Closing,
the Buyer will deliver to the Company and the Shareholders the
following: (i) the Purchase Price Consideration; (ii) a
certificate executed by the Secretary or an Assistant Secretary of
the Buyer certifying as of the Closing Date (A) a true and
complete copy of the Organizational Documents of the Buyer, (B) a
true and complete copy of the resolutions of the board of directors
of the Buyer authorizing the execution, delivery and performance of
this Agreement and the consummation of the Transactions, and
(C) incumbency matters; and (iii) such other certificates
or documents as shall be reasonably requested by the Company in
accordance with the provisions of this Agreement and to consummate
the Transactions.
(b)
Deliveries Made by the Company. At the Closing, the Company
will deliver to the Buyer the following: (i) a certificate
executed by the Secretary or an Assistant Secretary of the Company
certifying as of the Closing Date (A) a true and complete copy
of the Organizational Documents of the Company, (B) a true and
complete copy of the resolutions of the board of directors and
shareholders of the Company authorizing the execution, delivery and
performance of this Agreement and the consummation of the
Transactions, and (C) incumbency matters; (ii) a
certificate of each appropriate Secretary of State certifying the
good standing of the Company in its state of incorporation and all
states in which it is qualified to do business; (iii) an
unconditional resignation from each member of the board of
directors and each officer of the Company from his or her office or
from the board of directors of the Company, as applicable, in form
and substance satisfactory to the Buyer and (iv) such other
certificates or documents as shall be reasonably requested by the
Buyer in accordance with the provisions of this Agreement and to
consummate the Transactions.
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(c)
Deliveries Made by the Shareholders. At the Closing, each
Shareholder will deliver to the Buyer the following:
(i) certificates evidencing all of the issued and outstanding
shares of capital stock of the Company owned by the Shareholders as
set forth on Exhibit A , duly endorsed in blank for
surrender and cancellation; and (ii) a shareholder release in
substantially the form attached hereto as Exhibit B
.
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND THE PRINCIPAL SHAREHOLDER
The Company and
the Principal Shareholder, jointly and severally, hereby represent
and warrant as follows:
4.1
Organization and Good Standing . The Company is duly
organized, validly existing, and in good standing under the laws of
its jurisdiction of incorporation, 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 all its obligations under Contracts to which it
is a party. The Company is duly qualified to do business and is in
good standing under the laws of each state or other jurisdiction in
which either the ownership or use of the properties owned or used
by it, or the nature of the activities conducted by it, requires
such qualification. The Company has delivered to the Buyer true and
complete copies of the Organizational Documents of the Company, as
currently in effect.
4.2 Authority;
No Conflict.
(a) This
Agreement and the other Transaction Documents to which the Company
is a party (the “ Company Closing Documents ”)
have been or will be prior to Closing duly executed and delivered
by the Company, and constitute the legal, valid and binding
obligations of the Company enforceable against the Company in
accordance with their respective terms, in each case except as such
enforceability may be limited by (i) bankruptcy, insolvency,
moratorium, reorganization and other similar laws affecting
creditors’ rights generally and (ii) the general
principles of equity, regardless of whether asserted in a
proceeding in equity or at law. The Company has all requisite power
and authority to execute and deliver this Agreement and the Company
Closing Documents and to perform its respective obligations under
this Agreement and the Company Closing Documents.
(b) Neither
the execution and delivery of this Agreement and the Company
Closing Documents nor the consummation or performance of any of the
Transactions will, directly or indirectly (with or without notice
or lapse of time):
(i) contravene,
conflict with or result in a violation of (A) any provision of
the Organizational Documents of the Company or (B) any
resolution or other action adopted or taken by the board of
directors or the shareholders of the Company;
(ii) contravene,
conflict with or result in a violation of, or give any Governmental
Body or other Person the right to challenge any of the Transactions
or to exercise any remedy or obtain any relief under, any Legal
Requirement or any Order to which the Company or any of the assets
owned or used by any Acquired Company may be subject;
(iii) contravene,
conflict with or result in a violation of any of the terms or
requirements of, or give any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate or modify, any Governmental
Authorization that is held by the Company or that otherwise relates
to the business of, or any of the assets owned or used by, the
Company;
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(iv) contravene,
conflict with or result in a violation or breach of any provision
of, or give any Person the right to declare a default or exercise
any remedy under, or to accelerate the maturity or performance of,
or to cancel, terminate or modify, any Contract; or
(v) result
in the imposition or creation of any Encumbrance upon or with
respect to any of the assets owned or used by the
Company.
The Company is not
and will not be required to give any notice to or obtain any
Consent from any Person in connection with the execution and
delivery of this Agreement or the consummation or performance of
any of the Transactions.
4.3
Capitalization . The authorized equity securities of the
Company consist solely of 5,000,000 shares of common stock, of
which 2,415,000 shares are issued and outstanding. All of the
outstanding shares of the Company’s capital stock are duly
authorized, validly issued, fully paid and non-assessable. The
number Shares owned by each of the Shareholders as of the date of
this Agreement and immediately prior to the Closing are set forth
on Exhibit A . No legend or other reference to any
purported Encumbrance appears upon any certificate evidencing the
Shares. There are no contracts, agreements or understandings
relating to the issuance, sale or transfer of any shares of capital
stock or other securities of the Company. There are no outstanding
subscriptions, calls, commitments, warrants or options for the
purchase of shares of any capital stock or other securities of the
Company or any securities convertible into or exchangeable for
shares of capital stock or other securities issued by the Company,
or any other commitments of any kind for the issuance of additional
shares of capital stock or other securities issued by the Company.
None of the outstanding capital stock or equity interests or other
securities of the Company was issued in violation of the Securities
Act or any other Legal Requirement. The Company does not own, nor
has any Contract to acquire, any equity securities or other
securities of any Person or any direct or indirect equity or
ownership interest in any other business.
4.4 Financial
Statements . The Company has delivered to Buyer: (i) an
unaudited balance sheet of the Company as of July 31, 2005
(the “Balance Sheet”), and the related profit and loss
statements for the period from January 1, 2005 through
July 31, 2005 (referred to, collectively with the Balance
Sheet, as the “Financial Statements”). The Financial
Statements fairly present the financial condition and the results
of operations of the Company as of the respective dates of, and for
the periods referred to in, the Financial Statements, all in
accordance with the books and records of the Company.
4.5 Books and
Records . The books of account and stock record books of the
Company, all of which have been provided to the Buyer, are complete
and correct in all respects and have been maintained in accordance
with sound business practices, including the maintenance of an
adequate system of internal controls, and, with respect to the
books of account, fairly and accurately reflect the income,
expenses, assets and liabilities of the Company. The minute books
of the Company contain, accurate records of all meetings held of,
and corporate actions taken by, the shareholders, the boards of
directors, and committees of the boards of directors of the
Company. At the Closing, all of those books and records will be in
the possession of the Company.
4.6 Title to
Properties; Encumbrances.
(a) The
Company has delivered to Buyer copies of the deeds and other
instruments (as recorded) by which the Company acquired such real
property and interests, and copies of all title insurance policies,
opinions, abstracts, and surveys in the possession of the Company
and relating to such property or interests.
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(b) The
Company has delivered a true and accurate copy of all such leases
or other documents creating such real property interests to the
Buyer and all such leases or documents are in full force and effect
and are legal, valid, binding and enforceable against the Company
and, the other parties thereto. Following the Closing, such leases
or documents will continue to be in full force and effect and
legal, valid, binding and enforceable against the Company and
against all other parties thereto. There are no disputes, oral
agreements or forbearances in effect as to any such
leases.
(c) The
Company owns (with good and marketable title in the case of real
property, subject only to the matters permitted by the following
sentence) all the properties and assets (whether real, personal, or
mixed and whether tangible or intangible) that it purports to own
located in the Facilities owned or operated by the Company or
reflected as owned in the books and records of the Company,
including all of the properties and assets reflected in the Balance
Sheet (except for personal property sold since the date of the
Balance Sheet in the Ordinary Course of Business), and all of the
properties and assets purchased or otherwise acquired by the
Company since the date of the Balance Sheet (except for personal
property acquired and sold since the date of the Balance Sheet in
the Ordinary Course of Business and consistent with past practice).
All properties and assets reflected in the Balance Sheet are free
and clear of all Encumbrances and are not, in the case of real
property, subject to any rights of way, building use restrictions,
exceptions, variances, reservations, or limitations of any nature
except, with respect to all such properties and assets,
(i) mortgages or security interests reflected in the Balance
Sheet as securing specified liabilities or obligations or, with
respect to which no default exists, (ii) mortgages or security
interests incurred in connection with the purchase of property or
assets after the date of the Balance Sheet (such mortgages and
security interests being limited to the property or assets so
acquired), (iii) liens for current taxes not yet due for which
there are adequate reserves in the Financial Statements, and
(iv) with respect to real property, (A) minor
imperfections of title, if any, none of which is substantial in
amount, materially detracts from the value or impairs the use of
the property subject thereto, or impairs the operations of the
Company, and (B) zoning laws and other land use restrictions
that do not impair the present or anticipated use of the property
subject thereto. All buildings, plants, and structures owned by the
Company lie wholly within the boundaries of the real property owned
by the Company and do not encroach upon the property of, or
otherwise conflict with the property rights of, any other
Person.
4.7 Condition
and Sufficiency of Assets . The buildings, plants, structures,
motor vehicles and equipment of the Company are in good operating
condition and repair, ordinary wear and tear excepted, and none of
such buildings, plants, structures motor vehicles and equipment of
the Company are in need of maintenance or repairs except for
ordinary, routine maintenance and repairs. The buildings, plants,
structures, motor vehicles and equipment of the Company are
sufficient for the continued operation of the business of the
Company after the Closing in substantially the same manner as
conducted prior to the Closing.
4.8 Accounts
Receivable . All accounts receivable of the Company that are
reflected on the Balance Sheet (collectively, the “Accounts
Receivable”) represent valid obligations arising from sales
actually made or services actually performed in the Ordinary Course
of Business. There is no contest, claim or right of setoff, other
than returns in the Ordinary Course of Business, with any obligor
of any Accounts Receivable relating to the amount or validity of
such Accounts Receivable.
4.9
Inventory . The inventory as set forth on the Balance Sheet
or arising since the date of the Balance Sheet was acquired and has
been maintained in accordance with the regular business practices
of the Company, consists of new and unused items, substantially all
of which is commercially usable or saleable in the Ordinary Course
of Business.
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4.10 No
Undisclosed Liabilities . The Company has no liabilities except
for (a) liabilities, to the extent reflected or reserved against in
the Balance Sheet, and (b) liabilities which have arisen in
the Ordinary Course of Business since the date thereof.
(a) The
Company has filed all Tax Returns that it is required to file. All
such Tax Returns were correct and complete in all material
respects. All taxes due and owing by any of the Company (whether or
not shown on any Tax Return) have been paid. The Company is not
currently the beneficiary of any extension of time within which to
file any Tax Return.
(b) There is
no material dispute or claim concerning any Tax liability of the
Company either (A) claimed or raised by any authority in
writing or (B) as to which the Company or its directors or
officers has knowledge based upon personal contact with an agent of
such authority. No waiver of any statute of limitations with
respect to any Tax Return has been given by the Company. All
deficiencies asserted or assessments made as a result of any
examinations have been fully paid.
(c) There are
no liens for Taxes upon any of the assets of the Company (other
than liens for taxes not yet due and payable).
(d) The
Company is not a party to, is not bound by and has no obligation
under any Tax sharing allocation or indemnity agreement or similar
Contract or arrangement.
(e) The
Company has never been a member of an affiliated group of
corporations, within the meaning of IRC § 1504, except for a
consolidated group of which the Company is the common
parent.
(f) The
Company has never filed a consent pursuant to the collapsible
corporation provisions of IRC § 341(f) (or any corresponding
provision of state, local or foreign income Tax law) or agreed to
have IRC § 341(f)(2) (or any corresponding provision of state,
local or foreign income Tax law) apply to any disposition of any
asset owned by it.
(g) None of
the assets of the Company is property that the Company is required
to treat as being owned by any other Person pursuant to the
“safe harbor lease” provisions of former IRC §
168(f)(8).
(h) None of
the assets of the Company directly or indirectly secures any debt
the interest on which is Tax-exempt under IRC §
103(a).
(i) None of
the assets of the Company is “tax-exempt use property”
within the meaning of IRC § 168(h).
(j) The
Company will not be required to include any item of income in, or
exclude any item of deduction from, taxable income for any taxable
period (or portion thereof) ending after the Closing Date as a
result of any change in method of accounting for a taxable period
ending on or prior to the Closing Date.
(k) The
Company has never participated in nor is participating in an
international boycott within the meaning of IRC §
999.
(l) The
Company has complied with the withholding, reporting and remittance
requirements of IRC §§ 1441-1464, IRC §§
3101-3102, IRC §§ 3401-3406, IRC § 6041 and IRC
§ 6049.
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(m) The
unpaid Taxes of the Company (A) do not, as of the date of the
Balance Sheet, exceed the reserve for Tax liability (rather than
any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) set forth on the face of
the Balance Sheet (rather than in any notes thereto) and
(B) will not exceed that reserve as adjusted for operations
and transactions through the Closing Date in accordance with the
past custom and practices of the Acquired Company in filing its Tax
returns.
(n) The
Company uses the accrual method of accounting for income tax
purposes and, since its inception, has not made any change in
accounting methods, received a ruling from any taxing authority (or
other Governmental Authority) or signed an agreement with any
taxing authority (or other Governmental Authority) relating to the
Company’s method of accounting for income tax
purposes.
(o) No power
of attorney granted by the Company with respect to any Taxes is
currently in force.
(p) No
Shareholder of the Company is a Person other than a United States
Person within the meaning of the IRC.
(q) The
Company is not subject to any joint venture, partnership or other
arrangement or contract that could be treated as a partnership for
federal or applicable state income tax purposes or for any other
Tax purposes.
(r) The
Company has provided to the Buyer a listing of each state, local
and foreign jurisdiction in which the Company is required to file
or be included in a Tax Return. No written claim has ever been
received by the Company from a taxing authority or other
Governmental Body in a jurisdiction where the Acquired Company does
not pay Taxes or file Tax Returns that the Company is or may be
subject to Taxes assessed by such jurisdiction, no such claim has
been or is Threatened by a taxing authority or other Governmental
Body.
(s) The
Company neither has nor has had a permanent establishment in any
foreign country, as defined in any applicable Tax treaty or
convention between the United States and such foreign
jurisdiction.
(t) The
Company has not participated in a transaction that has been
specifically identified by the IRS as a tax avoidance transaction
or that is subject to either the disclosure list maintenance or
registration requirements of IRC §§ 6011, 6111 or 6112
and the regulations thereunder, and has not disclosed any
transactions to the IRS under any penalty amnesty
program.
4.12 Compliance
with Legal Requirements; Governmental Authorizations
.
(a) (i) The
Company is, and at all times has been, in compliance with each
material Legal Requirement that is or was applicable to it or to
the conduct or operation of the Company’s business or the
ownership or use of any of its assets; (ii) no event has
occurred or circumstance exists that (with or without notice or
lapse of time) (A) could reasonably be expected to constitute
or result in a violation by the Company, or a failure on the part
of the Company to comply with, any Legal Requirement or
(B) could reasonably be expected to give rise to any
obligation on the part of the Company to undertake, or to bear all
or any portion of the cost of, any remedial action of any nature;
and (iii) the Company has not received any written or other
notice or communication from any Governmental Body or any other
Person regarding (A) any actual, alleged, possible or
potential violation of, or failure to comply with, any Legal
Requirement by the Company or (B) any actual, alleged,
possible or potential obligation on the part of the Company to
undertake, or to bear all or any portion of the cost of, any
remedial action of any nature.
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(b) (i) The
Company is, and at all times has been, in full compliance with all
of the terms and requirements of each Governmental Authorization;
(ii) no event has occurred or circumstance exists that may
(with or without notice or lapse of time) (A) constitute or
result directly or indirectly in a violation of or a failure to
comply with any term or requirement of any Governmental
Authorization or (B) result directly or indirectly in the
revocation, withdrawal, suspension, cancellation or termination of,
or any modification to, any Governmental Authorization;
(iii) the Company has not received, any written or, other
notice or communication from any Governmental Body or any other
Person regarding (A) any actual, alleged, possible or
potential violation of or failure to comply with any term or
requirement of any Governmental Authorization or (B) any
actual, proposed, possible or potential revocation, withdrawal,
suspension, cancellation, termination of or modification to any
Governmental Authorization; and (iv) all applications required
to have been filed for the renewal of the Governmental
Authorizations have been duly filed on a timely basis with the
appropriate Governmental Bodies, and all other material filings
required to have been made with respect to such Governmental
Authorizations have been duly made on a timely basis with the
appropriate Governmental Bodies.
4.13 Legal
Proceedings; Orders .
(a) There is
no pending Proceeding: (i) that has been commenced by or
against the Company, or that otherwise relates to or may affect the
business of, or any of the assets owned or used by, the Company; or
(ii) that challenges, or that may have the effect of
preventing, delaying, making illegal or otherwise interfering with,
any of the Transactions. No such Proceeding has been Threatened. No
event has occurred or circumstance exists that could reasonably be
expected to give rise to or serve as a basis for the commencement
of any such Proceeding. The Company has delivered to the Buyer
copies of all pleadings, correspondence, and other documents
relating to any Proceeding.
(b) There is
no Order: (i) to which the Company or any of the assets owned
or used by the Company is subject; (ii) to which the Company
is subject that relates to the business of, or any of the assets
owned or used by, the Company; and (iii) to which any officer,
director or key employee of the Company is subject that prohibits
such officer, director, agent or employee from engaging in or
continuing any conduct, activity or practice relating to the
business of the Company or otherwise.
(c) The
Company is not in violation of any Order to which it is subject. No
event has occurred or circumstance exists that may constitute or
result in (with or without notice or lapse of time) a violation of
or failure to comply with any term or requirement of any Order to
which the Company or any of the assets owned or used by the Company
is subject. The Company has not received, any written or other
notice or communication from any Governmental Body or any other
Person regarding any actual, alleged, possible or potential
violation of, or failure to comply with, any term or requirement of
any Order to which the Company or any of the assets owned or used
by the Company, is or has been subject.
4.14 Contracts;
No Defaults.
(a) The
Company has made available to the Buyer true and complete copies,
of each of the following Contracts to which the Company is a party
or by which any of their respective assets and properties is
bound:
(i)
each Contract (other than routine purchase orders) that involves or
will involve performance of services or delivery of goods by the
Company;
(ii)
each lease, rental or occupancy agreement, license, installment and
conditional sale agreement of the Company and each other Contract
affecting the ownership, leasing or use of, title to, or any
leasehold or other interest in, any real or personal
property;
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(iii)
each licensing or royalty agreement or similar with respect to
patents, trademarks, copyrights or other Employed Intellectual
Property, including all agreements with current or former
employees, consultants or contractors regarding the appropriation
or the non-disclosure orally of the Employed Intellectual Property,
and perpetual, paid-up licenses for commonly available software
programs;
(iv)
each collective bargaining agreement or other Contract with any
labor union or other employee representative of a group of
employees and each other written employment or consulting agreement
with any employees or consultants;
(v)
each joint venture or partnership Contract (however named) or
similar Contracts involving a sharing of profits, losses, costs or
liabilities by the Company with any other Person;
(vi)
each Contract containing covenants that in any way purport to
restrict the business activity of the Company or any of its
Affiliates or limit the freedom of the Company or any of its
Affiliates to engage in any line of business or to compete with any
Person;
(vii)
each Contract providing for payments to or by any Person based on
sales, purchases or profits, other than direct payments for goods
and salesman commission agreements;
(viii)
each power of attorney granted by or to the Company that is
currently, or will be at the Closing, effective and
outstanding;
(ix)
each Contract for capital expenditures;
(x)
each Contract between the Company and its former or current
shareholders, directors, officers and employees or other Contract
providing for a commitment of employment, consulting or management
services;
(xi)
each written warranty, guaranty, and or other similar undertaking
with respect to contractual performance extended by the Company,
other than in the Ordinary Course of Business;
(xii)
each Contract, the termination of or default under which could
reasonably be expected to have a Material Adverse Effect on the
Company;
(xiii)
each Contract (other than this Agreement) that (A) limits or
restricts the ability of the Company to declare or pay dividends
on, to make any other distribution in respect of or to issue or
purchase, redeem or otherwise acquire its capital stock, to incur
indebtedness, to incur or suffer to exist any Encumbrance, to
purchase or sell any assets and properties, to change the lines of
business in which it participates or engages or to engage in any
merger or other business combination or (B) requires the
Company to maintain specified financial ratios or levels of net
worth or other indicia of financial condition;
(xiv)
each Contract under which the Company has advanced or loaned any
funds;
(xv)
each Contract under which the Company subcontracts work to third
parties outside of the Ordinary Course of Business;
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(xvi)
each Contract between or among the Company, on the one hand, and
any Shareholder or any of their affiliates, on the other
hand;
(xvii)
each Contract (other than routine purchase orders) that
(A) involves the obligation to make a payment, pursuant to the
terms of any such Contract, by or to the Company and
(B) cannot be terminated within 30 days after giving
notice of termination without resulting in any cost or penalty to
any Acquired Company; and
(xviii)
each amendment, supplement, and modification (whether oral or
written) in respect of any of the foregoing.
(b) Each
Contract is in full force and effect and binding upon the Company
and constitutes a legal, valid and binding agreement of each other
party thereto, enforceable in accordance with its terms, except as
limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other similar creditor’s rights laws. The
Company has performed (and has no present expectations of not fully
performing) all obligations required to be performed by it in
connection with the Contracts and the Company is not in material
violation of or material default under any such Contract (or with
notice or lapse of time or both, would be in violation of or
default under any such Contract) and no Contract has been canceled
by any party thereto.
(c) The
Company has not given to or received from any other Person any
written or other notice or communication regarding any actual,
alleged, possible or potential violation or breach of, or default
under, any Contract.
(d) There are
no renegotiations of, attempts to renegotiate, or outstanding
rights to renegotiate any amounts paid or payable to the Company
under any Contract and no Party to any Contract has made written
demand for such renegotiation. No current customer has informed the
Company that it shall stop or decrease its rate of business with
the Company or that it desires to renegotiate any
Contract.
4.15
Insurance . The Company has delivered to the Buyer a true
and correct list of all insurance policies that are currently held
by the Company. All insurance policies are in the name of the
Company, are outstanding and in full force and effect, and all
premiums due for such polices are currently paid. Since
December 31, 2004, the Company has not received notice of
cancellation or termination of any such policy, nor has it been
denied or had revoked or rescinded any policy of insurance, nor has
it borrowed against any such policies. The Company carries, or is
covered by, insurance with companies that as of the date of this
Agreement are financially sound and reputable in such amounts with
such deductibles and against such risks and losses as are
reasonable for the business and assets of the Company.
4.16
Environmental Matters .
(a) The
Facilities for which the Company is legally responsible
(i) are in compliance with Environmental Laws and
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