Exhibit 2.1
AGREEMENT OF PURCHASE AND SALE OF ASSETS
This Agreement of Purchase and Sale of Assets (the "AGREEMENT") is
entered into this the 23rd day of June, 2003 but effective as of February 1,
2003 (the "EFFECTIVE DATE"), by and among CHRISTIAN SPEAKERS & ARTISTS AGENCY,
INC., a Nevada corporation (the "BUYER"), CHRISTIAN SPEAKERS & ARTISTS AGENCY,
INC., a Tennessee corporation (the "SELLER"), and wholly owned subsidiary of
REGALWORKS, INC., a Delaware corporation ("RWI"). Buyer, Seller and RWI may be
hereinafter sometimes referred to collectively as the "PARTIES" or singularly as
a "PARTY."
W I T N E S S E T H :
WHEREAS, the Seller is the owner of certain assets associated with the
Business (as hereinafter defined);
WHEREAS, RWI owns all of the issued and outstanding capital stock of
the Seller;
WHEREAS, the Buyer desires to purchase substantially all of the Assets
(as hereinafter defined) owned by the Seller and used in the Business, and the
Seller desires to sell such Assets to the Buyer;
WHEREAS, in connection with the purchase and sale of such Assets, the
Parties desire to provide for certain terms and conditions with respect to the
transfer of such assets;
NOW, THEREFORE, for and in consideration of the mutual covenants,
agreements, representations and warranties contained in this Agreement, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged and confessed, the Parties hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
As used herein, the following terms shall have the following meanings:
1.1 ACCOUNTS RECEIVABLE. The term "Accounts Receivable" shall mean all
accounts receivable and other rights to payment of money and all rights in and
to any returned, reclaimed and repossessed goods, together with all rights,
claims, counterclaims, titles, securities, security interests, liens and
guaranties evidencing, securing, guaranteeing payment of, relating to or
otherwise with respect to such accounts receivable and all rights, including any
rights to recoupment, recovery, reclamation and resale to the extent they exist
prior to the Closing.
1.2 AFFILIATE. The term "Affiliate" of a person shall mean, with
respect to that person, a person who directly, or indirectly through one or more
intermediaries, controls, or is controlled
by, or is under common control with, or is acting as agent on behalf of, or as
an officer or director of that person. As used in the definition of Affiliate,
the term "control" (including the terms "controlling," "controlled by," or
"under common control with") means the possession of the right of ability,
directly or indirectly, to direct the management and policies of a person
whether through the ownership of voting securities, by contract, through the
holding of a position as a director or officer of such person, or otherwise. As
used in this Section, the term "person" means an individual, a corporation, a
partnership, an association, a joint stock company, a trust, an unincorporated
organization, or a government or political subdivision thereof.
1.3 ASSETS. The term "Assets" shall have the meaning set forth in
Section 2.1.
1.4 ASSUMED LIABILITIES. The term "Assumed Liabilities" shall have the
meaning set forth in Section 2.4.
1.5 ▇▇▇▇ OF SALE. The term "▇▇▇▇ of Sale" shall have the meaning set
forth in Section 5.2(a).
1.6 BOOKS AND RECORDS. The term "Books and Records shall have the
meaning contained in Section 2.1(c).
1.7 BUSINESS. The term "Business" shall mean the operating of an agency
for the booking and scheduling of Christian speakers and/or artists and includes
specifically all business activities of the Christian Speakers & Artists Agency
division of the Seller.
1.8 BUYER INDEMNIFIED PARTIES. The term "Buyer Indemnified Parties"
shall have the meaning set forth in Section 6.1A.
1.9 CLOSING. The term "Closing" shall mean the consummation of the
events and transactions to take place on the Closing Date.
1.10 CLOSING DATE. The term "Closing Date" shall mean 12:01 a.m. on
June 30, 2003 or such earlier date as the Parties mutually agree.
1.11 CONTRACTS. The term "Contracts" shall have the meaning as
contained in Section 2.1(d).
1.12 EFFECTIVE DATE. The term "Effective Date" shall have the meaning
contained in the introductory paragraph hereof.
1.13 EMPLOYEE. The term "Employee" shall mean any employee of the
Seller who, as of the Closing Date, is employed or otherwise performs work or
provides services in connection with the operation of the Business, including
those, if any, on disability, sick leave, layoff or leave of absence, who, in
accordance with the Seller's applicable policies, are eligible to return to
active status.
1.14 EMPLOYMENT AGREEMENTS. The term "Employment Agreements" shall
mean, collectively, each of those certain employment agreements to be entered
into as of the Closing Date by and between the Buyer and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and by
and between the Buyer and ▇▇▇▇▇ ▇▇▇▇▇.
1.14 EQUIPMENT. The term "Equipment" shall have the meaning as
contained in Section 2.1(a).
1.15 EXCLUDED ASSETS. The term "Excluded Assets" shall have the meaning
as contained in Section 2.2.
1.16 FINANCIAL STATEMENTS. The term "Financial Statements" shall have
the meaning as contained in Section 3.16.
1.18 INTELLECTUAL PROPERTY. The term "Intellectual Property" shall have
the meaning as contained in Section 2.1(g).
1.19 INVESTOR REPRESENTATION AGREEMENT. The term "Investor
Representation Agreement" shall have the meaning set forth in Section 5.11.
1.20 KINGDOM VENTURES. The term "Kingdom Ventures" shall mean Kingdom
Ventures, Inc., a Nevada corporation.
1.21 KINGDOM VENTURES STOCK. The term "Kingdom Ventures Stock" shall
mean restricted common stock of Kingdom Ventures, par value $.001 per share.
1.22 LANDLORD. The term "Landlord" shall mean Lot 7 Associates, LLC,
the lessor of the Real Property leased by Seller, as lessee.
1.23 MATERIAL AGREEMENTS. The term "Material Agreements" shall have the
meaning set forth in Section 3.3.
1.24 NON-COMPETITION AGREEMENTS. The term "Non-Competition Agreements"
shall have the meaning set forth in Section 5.12.
1.25 NOTICE OF ACTION. The term "Notice of Action" shall have the
meaning set forth in Section 6.1C.
1.26 NOTICE OF ELECTION. The term "Notice of Election" shall have the
meaning set forth in Section 6.1C.
1.27 OFFERED EMPLOYEE. The term "Offered Employee" shall have the
meaning set forth in Section 5.6.
1.28 PURCHASE PRICE. The term "Purchase Price" shall mean the
consideration payable to the Seller for the Assets as set forth or contemplated
in Section 2.3.
1.29 REAL PROPERTY. The term "Real Property" shall mean the real
property located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ where
the Business is located.
1.30 RETAINED EMPLOYEE. The term "Retained Employee" shall mean any
Employees who are not Offered Employees.
1.31 RETAINED LIABILITIES. The term "Retained Liabilities" shall have
the meaning as contained in Section 2.4.
1.32 SELLER INDEMNIFIED PARTIES. The term "Seller Indemnified Parties"
shall have the meaning set forth in Section 6.1B.
1.33 TANGIBLE ASSETS. The term "Tangible Assets" shall have the meaning
as contained in Section 2.1(a).
1.34 SELLER'S KNOWLEDGE, BEST OF SELLER'S KNOWLEDGE, OR KNOWN TO
SELLER. The term shall mean the actual knowledge of Seller's President,
Secretary and Treasurer and the knowledge that would have been discovered by a
reasonable inquiry.
1.35 STOCK. The term "Stock" shall mean those certain 200,000 shares of
Kingdom Venture Stock.
1.36 TRADE PAYABLES. The term "Trade Payables" shall mean all accounts
payable of Seller generated in connection with the ordinary operation of the
Business prior to the Closing Date as specified on SCHEDULE 3.26.
1.37 WARRANTS. The term "Warrants" shall mean warrants executed by
Kingdom Ventures which provide the option to purchase 350,000 shares of Kingdom
Venture Stock at a purchase price of $1.00 per share. Said warrants will expire
18 months from the date of closing.
ARTICLE II
PURCHASE OF ASSETS AND PURCHASE PRICE
2.1 SALE OF ASSETS. Subject to the terms and conditions set forth in
this Agreement, the Seller agrees to sell, convey, transfer, assign and deliver
to the Buyer, and the Buyer agrees to purchase from the Seller as of the
Effective Date, the following assets of Seller (such assets to be collectively
referred to herein as the "ASSETS"):
(a) All computer hardware, computer software, fixtures,
furniture, office supplies, other supplies and all other tangible
personal property owned or used in connection with the Business
including but not limited to that described on SCHEDULE 2.1(A);
provided, however, that Buyer shall unilaterally have the right to
reject taking title and possession of any of the foregoing as it
determines in its sole discretion (collectively, the "TANGIBLE
Assets");
(b) All right, title and interest in the maintenance and use
of the Domain name/URL "▇▇▇▇▇▇.▇▇▇".
(c) Copies of all customer and supplier files and lists,
accounting and financial records, sales records, maintenance and
production records, and other books and records relating principally to
the Business (the "BOOKS AND RECORDS");
(d) All right, title and interest of Seller in, to and under
all contracts, leases, documents, instruments, agreements, and other
written or oral arrangements, all relating principally to the Business
to which the Seller is a party or by which the Seller or the Assets may
be bound and all of the Material Agreements as more fully described on
SCHEDULE 2.1(D), which Schedule shall be provided to the Buyer by the
Seller no later than the Closing, as well as all rights, privileges,
deposits, letters of credit, claims, causes of action and options
relating or pertaining to the foregoing (the "CONTRACTS");
(e) All technical data, written specifications, work
standards, confidential information, price lists and know-how used in
connection with the Business;
(f) Copies of all Employee files for those Offered Employees
actually hired by Buyer;
(g) All right, title and interest of Seller, in, to and under
all service marks, trademarks, trade and assumed names, principally
related to the Business including the name "Christian Speakers &
Artists," and "Christian ▇▇▇▇▇▇▇▇.▇▇▇" as more fully described on
SCHEDULE 2.1(G) (collectively, the "INTELLECTUAL PROPERTY"), together
with whatever rights Seller may have to recover for infringement
thereon, if any;
(h) All advertising materials and all other printed or written
materials related to the conduct of the Business;
(i) All of the Seller's general intangibles, claims, rights of
set off, rights of recoupment, goodwill, patents, inventions, trade
secrets and royalty rights and other proprietary intangibles, all
telephone numbers, telefax numbers, domain names, urls, and email
addresses utilized in the Business, licenses and sublicenses granted
and obtained with respect thereto, and rights thereunder, which are
used in the Business, and remedies against infringements thereof, and
rights to protection of interests therein under the laws of all
jurisdictions, as more fully described on SCHEDULE 2.1(I)
(collectively, the "GENERAL Intangibles");
(j) All goodwill and going concern value and all other
intangible properties related to the Business;
(k) All right, title and interest of Seller in and to all
prepaid fees, bonds, and deposits for services yet to be performed and
relating to any of the Assets or the Business; and
(l) All of the Accounts Receivable.
2.2 EXCLUDED ASSETS. Notwithstanding anything to the contrary in
Section 2.1, Assets shall not include: (i) cash and cash equivalents including,
any savings, checking or bank accounts, stocks, bonds, notes, cash surrender
value of life insurance policies, and life insurance policies of Seller; (ii)
investments; (iii) any right or interest in any employee benefit plan of the
Seller; (iv) the consideration delivered to Seller pursuant to this Agreement;
(v) any and all automobiles currently owned by Seller or used by Seller in the
Business, (vi) computer programs and software that are not assignable, and (vii)
any and all other real or personal property, tangible or intangible, not
described in Section 2.1 (collectively, the "EXCLUDED ASSETS").
2.3 PURCHASE PRICE. Upon the terms and subject to the conditions
contained herein, the total consideration to be paid by Buyer to the Seller for
the Assets is $503,000 Dollars (Five Hundred Three Thousand) ("PURCHASE PRICE").
The Purchase Price shall be paid by Buyer to Seller at the Closing as follows:
2.3.1 Buyer shall execute and deliver to Seller the ▇▇▇▇ of
Sale providing for Buyer's assumption and timely payment and
performance of the Assumed Liabilities;
2.3.2 Buyer's delivery to the Seller the Stock, which shall be
valued for the purposes of the Purchase Price at $.50/share regardless
of the market price;
2.3.3 Buyer's delivery to the Seller the Warrants which shall
be valued for the purposes of the Purchase Price at $.01/share; and
2.3.4 Buyer's delivery of the sum of Ninety Thousand and
No/100 Dollars ($90,000.00) to the Seller as payment of the balance of
the Purchase Price (the "CASH PURCHASE PRICE").
2.4 ASSUMPTION OF LIABILITIES. Subject to the exceptions and exclusions
of this Section 2.4, the Buyer agrees that on the Closing Date, it will assume
and agree to perform and pay when due (i) all unperformed and unfulfilled
obligations of the Business under the Contracts for which the Seller is not in
default on or prior to the Closing Date, (ii) the Trade Payables, (iii) the
liabilities pertaining to customer deposits (collectively, the "ASSUMED
LIABILITIES"). Except as otherwise specifically provided herein, the Assumed
Liabilities shall not include any other debts, liabilities or obligations,
whether accrued, absolute, contingent or otherwise, in contract or in tort, of
the Business or the Seller, including but not limited to: (i) accrued income
taxes; (ii) deferred income taxes; (iii) accrued franchise taxes; (iv) any tax
imposed on the Seller because
of the operation of its Business or otherwise, except sales and use assumed by
Buyer pursuant to this Agreement; (v) any of the liabilities or expenses of the
Seller incurred in negotiating and carrying out their obligations under this
Agreement and the documents contemplated to be executed hereunder; (vi) any
obligations of the Seller under any of its employee benefit plans or agreements;
(vii) any obligations incurred by the Seller before the Effective Date except as
otherwise specifically assumed by Buyer pursuant to this Section 2.4; (viii) any
liabilities or obligations incurred by the Seller in violation of, or as a
result of the Seller's violation of, this Agreement; (ix) liabilities (other
than the obligations assumed under this Section 2.4) arising from the sales of
products or services on or before the Effective Date; (x) liabilities, costs,
and expenses associated with the litigation described in SCHEDULE 3.9 hereto;
and (xi) environmental liabilities and obligations pertaining to the Real
Property other than the obligation to make payments under any lease relating to
the Real Property from and after the Closing Date (all of the foregoing being
hereinafter collectively referred to as the "RETAINED LIABILITIES").
2.5 ALLOCATION OF PURCHASE PRICE. Each of the Parties agrees to report
this transaction for federal income tax purposes in accordance with the manner
agreed upon as set forth in SCHEDULE 2.5.
2.6 TAXES. Seller shall be liable for the payment of all federal and
state income taxes incurred by Seller and arising out of the sale, transfer or
removal of the Assets, if any, and the assumption of the Liabilities. Buyer
shall not be responsible for any business, occupation, withholding or similar
tax, or any taxes of any kind of the Seller, related to any period before the
Closing Date. If sales taxes are imposed on the sale of the Assets, the Seller
shall be obligated to pay the whole amount thereof. Buyer shall reimburse Seller
for 1/2 of any such taxes upon receipt of proof of payment.
2.7 TITLE TO ASSETS AND RISK OF LOSS. Title to the Assets and risk of
loss or damage to the Assets by casualty (whether or not covered by insurance)
will pass to the Buyer immediately upon completion of the Closing on the Closing
Date.
2.8 ADJUSTMENT TO THE PURCHASE PRICE. If the dollar amount of the
assumed liabilities as of May 31, 2003 exceeds $310,000 (defined as the
difference between accounts receivable and speaker accounts payable on that
date), the total Purchase Price shall remain $503,000 but the amount of the Cash
Purchase Price shall be reduced by the amount of any such excess.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller and RWI, jointly and severally, hereby represent and warrant
that:
3.1 TITLE TO ASSETS. Except as otherwise provided in SCHEDULE 3.1, the
Seller has good, marketable and indefeasible title to the Assets free and clear
of restrictions or conditions to transfer or assignment, mortgages, liens,
pledges, charges, encumbrances, equities, claims, easements, rights-of-way,
covenants, conditions or restrictions. The Seller is in possession of all
property leased to it from others. Except for the Excluded Assets, the Assets
constitute all of the
material property, whether real, personal, mixed, tangible or intangible, that
are used in the Business by the Seller.
3.2 TAX RETURNS. Within the times and in the manner prescribed by law,
including extensions permitted thereunder, the Seller has filed and will file
all federal, state and local tax returns required by law and has paid and will
pay all taxes, assessments and penalties due and payable in connection with the
Business through and including the Closing Date. There are no present disputes
as to taxes of any nature payable by the Seller.
3.3 CONTRACTS. Except as otherwise provided therein SCHEDULE 2.1(D)
lists all of the material contracts, agreements, and other written or oral
arrangements, all relating principally to the Business, to which the Seller is a
party or by which the Seller or the Assets are bound ("MATERIAL AGREEMENTS").
Such Material Agreements as are included in the list of Payables which represent
the Speaker Contracts do not include transactions involving less than $40,000
individually or the total speaker payables in the aggregate as a class. Seller
has previously made available to Buyer true and correct copies of all Material
Agreements Except as otherwise provided in SCHEDULE 2.1(D), each of the Material
Agreements is valid and in full force and effect, and there has not been any
default in any respect by the Seller or any other party thereto, nor has there
occurred any event that with notice or lapse of time or both, would constitute a
default in any respect by the Seller or any other party thereto, which might
reasonably be expected to have a material adverse effect on the financial
condition or operations of the Business. Except as disclosed in SCHEDULE 2.1(D),
each of the Material Agreements is assignable to the Buyer without the consent
of any other party. The Seller will obtain and deliver at Closing all of the
requisite consents relating to the items set forth on SCHEDULE 2.1(D). Seller
has not received notice that any party to any of the Material Agreements intends
to cancel or terminate any of the Material Agreements or exercise or not
exercise any options that they might have under any of the Material Agreements.
In the event any of the Material Agreements is, or is later determined to be,
non-assignable, and the other party to any such Material Agreements refuses to
consent to the assignment of same, then to the extent legally permissible, the
Seller shall subcontract to the Buyer, or its designee, if the Buyer so desires,
the remaining work on such Material Agreements, and the Seller shall forward to
the Buyer, or its designee, all proceeds of such Material Agreements received by
the Seller; provided, however, that Seller shall be reimbursed for any
reasonable out-of-pocket expenses incurred by it.
3.4 EQUIPMENT. All of the Tangible Assets owned by the Seller and used
in the Business are described on SCHEDULE 2.1(A) attached hereto. Except as
disclosed on SCHEDULE 2.1(A), none of the Tangible Assets will be, at the
Closing Date, held under any security agreement, conditional sales contract, or
other title retention or security arrangement, or be located other than in the
possession of the Seller on the Real Property.
3.5 LICENSES. SCHEDULE 3.5 is a schedule of all licenses and permits
owned by the Seller or in which Seller has any rights or licenses in connection
with the Business. The Seller has not infringed, nor is it now infringing, on
any license belonging to any other person, firm, or corporation. The Seller owns
or holds adequate licenses or other rights to use all licenses and
permits necessary for the Business as now conducted by the Seller, and that use
does not, and will not, conflict with, infringe on or otherwise violate any
rights of others.
3.6 EMPLOYMENT CONTRACT. The Seller does not have any written or oral
employment contracts, collective bargaining agreements, pension, bonus, or
profit sharing plans providing for employee remuneration or benefits with
respect to Offered Employees that by their terms or by law will become binding
upon or the obligations of Buyer. The Seller is in compliance with, and upon the
Closing will remain in compliance with, all of its material obligations under
such agreements or other arrangements to the extent that any violation of such
obligations or agreements will not result in a materially adverse affect on the
Business or Assets.
3.7 COMPLIANCE WITH LAWS. The Seller has complied with, and is not in
violation of, applicable federal, state or local statutes, laws, and regulations
(including, without limitation, any applicable building or other law, ordinance
or regulation) the violation of which would cause a material adverse affect on
the Assets of the Business. As of the Effective Date, there exist no uncured
violations of federal, state or municipal laws, ordinances, orders, regulations
or requirements the violation of which would cause a material adverse affect on
any portion of the Assets or the Business.
3.8 LITIGATION. Except as disclosed in SCHEDULE 3.8, there is no suit,
action, arbitration or legal, administrative or other proceeding or governmental
investigation pending, or to the best of Seller's knowledge, threatened against
or affecting the Seller, the Assets, or the Business.
3.9 NO BREACH OR VIOLATION. The consummation of the transactions
contemplated by this Agreement will not result in or constitute any of the
following: (i) a default or an event that, with notice or lapse of time or both,
would be a default, breach or violation of any material term (except for third
party consents described in this Agreement or any schedule prepared and
delivered in connection herewith) of any lease, license, promissory note,
conditional sales contract, commitment, indenture, mortgage, deed of trust,
security agreement or other agreement, instrument or arrangement by which the
Assets, the Business or the Seller may be materially adversely affected, or to
which the Assets, the Business or the Seller may be bound (the violation of
which would materially adversely affect the Assets, Business and Assets); (ii)
an event that would permit any party to terminate any Contract (the termination
of which will materially adversely affect the Business); (iii) the creation or
imposition of any lien, charge, or encumbrance on any of the Assets or the
Business; or (iv) a breach of any term or provision of this Agreement.
3.10 DUE ORGANIZATION; AUTHORITY.
(a) The Seller is a corporation duly organized, validly existing and in
good standing under the laws of the state of its incorporation, and is duly
qualified to do business and is in good standing under the laws of each
jurisdiction where such qualification is required, except where the failure to
be so qualified would not have a material adverse effect on the business,
operations, affairs, prospects, properties, assets or condition (financial or
otherwise), of the Company.
(b) The Seller has the full corporate right, power, legal capacity and
authority to enter into and perform its obligations under this Agreement, and
except as otherwise provided in SCHEDULE 3.10 to this Agreement no approvals or
consents of any persons other than the Seller are necessary in connection
herewith.
3.11 PERSONNEL. SCHEDULE 3.11 is a complete and accurate list of all
Employees who principally work for the Business. Prior to, at or after Closing,
the Seller shall deliver such additional information as the Buyer shall
reasonably request with respect to the Offered Employees.
3.12 VALID AND BINDING OBLIGATIONS. Upon execution and delivery, this
Agreement and each document, instrument and agreement to be executed by the
Seller in connection herewith, will constitute the legal, valid, and binding
obligations of the Seller, enforceable in accordance with each such agreement's,
document's, or instrument's respective terms, except as may be limited by
applicable bankruptcy laws, insolvency laws, and other similar laws affecting
the rights of creditors generally.
3.13 GENERAL INTANGIBLES. SCHEDULE 2.1(G) and SCHEDULE 2.1(I) contain a
description of all of the Intellectual Property and General Intangibles owned by
the Seller and used in the conduct of the Business. Except as provided therein,
the Seller is the sole owner of all of the Intellectual Property and General
Intangibles, free and clear of any liens, encumbrances, restrictions, or legal
or equitable claims of others. The Intellectual Property and the General
Intangibles constitute all of the intellectual property held by Seller in the
conduct of the Business and no adverse claims have been asserted against the
Intellectual Property or the General Intangibles, or the Seller, or the Business
with respect thereto. None of such Intellectual Property or the General
Intangibles infringe upon any patents, trade or assumed names, trademarks,
service marks, or copyrights belonging to any other person, firm, or
corporation. Except as provided in SCHEDULE 2.1(G) OR SCHEDULE 2.1(I), the
Seller is not a party to any license, agreement, or arrangement, whether as
licensor, licensee, or otherwise, with respect to any of the Intellectual
Property or the General Intangibles.
3.14 LEASED ASSETS. SCHEDULE 3.14 contains an accurate description of
all of the personal property leased or licensed pursuant to the Contracts, which
are the only personal property assets used in the conduct of the Business which
are not owned by the Seller. The Seller is not in default in any material
respect of any lease or any Contract. Seller is a party to the lease of the Real
Property.
3.15 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the Effective Date
there has been no:
(i) material adverse change in the condition, financial or
otherwise, of the Seller, the Assets or the Business;
(ii) knowing waiver of any material rights or claims held by
the Seller;
(iii) material loss, destruction or damage to any property of
the Seller, whether or not insured;
(iv) material change in the personnel of the Seller or the
terms or conditions of their compensation or employment;
(v) except pursuant to this Agreement, the acquisition or
disposition of any assets (or any contract or arrangement therefor)
other than in the ordinary course of business, nor any other
transaction by the Seller otherwise than for value and in the ordinary
course of business;
(vi) transaction by the Seller (other than pursuant to this
Agreement), except in the ordinary course of business;
(vii) capital expenditure by the Seller exceeding $10,000,
except in the ordinary course of business;
(viii) change in accounting methods or practices (including,
without limitation, any change in depreciation or amortization policies
or rates) by the Seller;
(ix) re-evaluation by the Seller of any of its assets;
(x) amendment or termination of any contract, agreement or
license to which the Seller is a party (except in the ordinary course
of business) the amendment or termination of which will have a material
adverse affect on the Business or the Assets;
(xi) mortgage, pledge or other encumbrance of any asset of
Seller;
(xii) other event or condition of any character that has or
might reasonably be expected to have a material adverse effect on the
financial condition, Business, Assets or prospects of the Seller; or
(xiii) agreement by the Seller to do any of the things
described in the preceding clauses (i) through (xii).
3.16 FINANCIAL STATEMENTS AND OTHER INFORMATION; FINANCIAL CONDITION.
The Seller has heretofore furnished to Buyer copies of: (a) the audited balance
sheets of the Company at August 31, 2002 and the related statements of income
and cash flow for the period then ended and (b) the Company's unaudited balance
sheet at May 31, 2003, and the related statements of income and cash flow for
the period then ended. All financial statements referred to in this Section 3.16
(the "FINANCIAL STATEMENTS") are true, complete and correct, have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis during
the respective periods, and fairly present the financial condition of the Seller
as at the respective dates thereof and the results of operations of the Seller
for the respective periods covered by the statements of income contained
therein. The Seller does not have any material obligations or liabilities,
contingent or otherwise, not fully disclosed by the Financial Statements.
3.17 CONSENTS AND APPROVALS. No consent, approval or authorization of,
or filing or registration with, any governmental or regulatory authority, or any
other person or entity, is required to be made or obtained by the Seller in
connection with the execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby.
3.18 BROKERS. Neither the Seller, nor any of its respective officers,
directors, or employees, has employed any broker, agent, or finder, or incurred
any liability for any brokerage fees, agent's fees, commission or finder's fees
in connection with the transaction contemplated herein.
3.19 SALE OF ASSETS. For purposes of determining whether a sales and
use tax charge is applicable, the sale of the Assets constitutes: (i) the sale
of substantially all of the entire operating assets of a business or of a
separate division, branch, or identifiable segment of a business, and (ii) a
sale outside the ordinary course of Seller's business. The income and expenses
of the Business can be separately established from the books of account or
records in the same manner as previously provided to Buyer. Except for the
Excluded Assets, the sale contemplated hereby is the sale of substantially all
of the operating assets of the Business.
3.20 ADVERSE INFORMATION. Neither the Seller, Regal Works, nor any of
the Shareholders has any information or knowledge of any change contemplated in
any applicable laws, ordinances or restrictions, or any judicial or
administrative action, which might reasonably be expected to have a material
adverse effect upon the Business or the Assets, or their respective values.
3.21 CUSTOMERS. On the Closing Date, Seller shall have furnished Buyer
a true and correct list of all customers of the Business including customers of
Seller since the Effective Date. Except as indicated in SCHEDULE 3.22, the
Seller has no information, nor is the Seller aware of any facts, indicating that
any of the top 25 customers (based on gross sales) intend to cease or materially
reduce doing business with the Seller.
3.22 INSURANCE POLICIES. SCHEDULE 3.23 to this Agreement is a
description of all insurance policies held by the Seller concerning the Business
and Assets. The Seller has maintained and now maintains (i) insurance on all its
Assets and businesses of a type customarily insured, covering property damage
and loss of income by fire or other casualty, and (ii) insurance protection
against all liabilities, claims and risks against which it is customary to
insure.
3.23 INTEREST IN CUSTOMERS, SUPPLIERS AND COMPETITORS. Neither the
Seller or RWI has any direct or indirect interest in any competitor, supplier or
customer of the Seller, or in any
person from whom or to whom the Seller leases any real or personal property, or
in any other person with whom the Seller is doing business.
3.24 ABSENCE OF CERTAIN BUSINESS PRACTICES. Neither the Seller nor any
officer, employee or agent of the Seller, nor any other person acting on their
behalf, has, directly or indirectly, within the past five years, given or agreed
to give any gift or similar benefit to any customer, supplier, government
employee of the United States or any state or foreign government, or other
person who is or may be in a position to help or hinder the business of the
Seller which (i) might subject the Seller to any damage or penalty in any civil,
criminal or governmental litigation or proceeding which will have a material
adverse affect on the Business and Assets, (ii) if not given in the past, might
have a material adverse effect on the Assets or Business of the Seller, or (iii)
if not continued in the future, might materially adversely effect the Assets,
the operations of the Business or prospects of any of the Seller or which might
subject the Seller to suit or penalty in a private or governmental litigation or
proceeding the loss of which will have a material adverse affect on the Business
and the Assets.
3.25 ABSENCE OF CREDITOR AND THIRD PARTY CLAIMS. The Seller represents
and warrants to the Buyer that (i) the Trade Payables represent legitimate
obligations incurred during the ordinary course of Seller's business and such
Trade Payables are due and owing to the creditors of the Business in the amounts
as set forth on SCHEDULE 3.26, (ii) no creditor or third party claims exist
against the Business except as disclosed on SCHEDULE 3.26 as Trade Payables, and
(iii) no creditor or third party has any basis to bring any claims against the
Buyer except as set forth on SCHEDULE 3.26.
3.26 ACCOUNTS RECEIVABLE. Attached hereto as SCHEDULE 3.27 is a true
and complete list of all Accounts Receivable owed to the Company as of the date
of this Agreement. All Accounts Receivable are and will be, (a) valid bona fide
claims against debtors for sales or other charges, (b) subject to no defenses,
set-offs, or counterclaims, and (c) collectible in accordance with their terms.
No material additional loss reserves are required with respect to the Accounts
Receivable.
3.27 DISCLOSURE. The Seller has made available to the Buyer true,
complete and correct copies of all Contracts and documents concerning all
litigation and administrative proceedings, licenses, insurance policies, lists
of suppliers and customers, and records relating to the Assets and the Business,
and such information covers all material commitments and material liabilities of
the Seller relating to the Business or Assets referred to herein.
3.28 FULL DISCLOSURE. This Agreement, the Schedules and Exhibits
hereto, and all other documents and written information furnished by the Seller
to the Buyer pursuant hereto or in connection herewith, are true, complete and
correct, and do not include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements made herein and therein
not misleading. There are no facts or circumstances relating to the Assets or
the Business which materially adversely affect or might reasonably be expected
to materially adversely affect the Assets, the Business (including the prospects
or operations thereof), or the ability of the Seller to perform this Agreement
or any of their obligations hereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants that:
4.1 DUE ORGANIZATION; AUTHORITY.
(a) The Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada and has all the necessary
corporate powers to own its properties and to carry on its business as now owned
and operated by it.
(b) Buyer has the right, power, legal capacity, and authority to
execute, deliver and perform this Agreement, and no approvals or consents of any
persons or other entities are necessary in connection herewith. The execution,
delivery and performance of this Agreement by Buyer have been duly authorized.
4.2 VALID AND BINDING OBLIGATIONS. Upon execution and delivery hereof,
this Agreement will constitute the legal, valid, and binding obligation of
Buyer, enforceable in accordance with its terms, except as limited by bankruptcy
laws, insolvency laws, and other similar laws affecting the rights of creditors
generally.
4.3 CONSENTS AND APPROVALS. No consent, approval or authorization of,
or filing or registration with, any governmental or regulatory authority, or any
other person or entity, is required to be made or obtained by the Buyer in
connection with the execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby.
4.4 BROKERS. Neither Buyer nor any of its respective officers,
directors, or employees, has employed any broker, agent, or finder, or incurred
any liability for any brokerage fees, agent's fees, commissions or finder's fees
in connection with the transactions contemplated herein.
4.5 CERTAIN PROCEEDINGS. No suit, action, or other proceeding is
pending or, to Buyer's knowledge, threatened against Buyer before any
governmental authority in which it is sought to restrain or prohibit or to
obtain damages or relief in connection with this Agreement or the consummation
of the transaction contemplated hereby.
4.6 LIABILITIES AND DEFAULTS. To the best of Buyer's knowledge, Buyer
is not in default under, or in breach or violation of, and no reason exists and
no event has occurred which, without notice or lapse of time or action by a
third party, could result in a default under, breach or violation of, any
agreement or instrument to which the Buyer (or any Affiliate of Buyer) is a
party which relates to or arises from the acquisition of all or substantially
all of the assets (or capital stock) of a corporation, limited liability
company, sole proprietor or any other person or entity.
4.7 UNTRUE STATEMENTS. To the best of Buyer's knowledge, this Agreement
does not include any untrue statement of material fact by Buyer or omit to state
any material fact necessary to make the statements made herein by Buyer are not
misleading.
ARTICLE V
THE CLOSING
5.a) CLOSING. Payment of the Purchase Price required to be made by the
Buyer to the Seller and the transfer of the Assets by the Seller and the other
transactions contemplated hereby shall take place on the Closing Date. Buyer
shall provide at least $30,000 of the Purchase Price on or before July 20, 2003
and the balance on or before August 31, 2003.
5.b) SELLER'S DELIVERIES. The Seller shall deliver or cause to be
delivered to the Buyer at the Closing, the following:
(a) Two (2) duly authorized and executed originals of a ▇▇▇▇ of Sale,
Assignment and Assumption Agreement executed by Seller, together with such other
instruments of assignment and transfer or bills of sale or otherwise as the
Buyer shall reasonably request (the "▇▇▇▇ OF SALE");
(b) Two (2) duly authorized and executed originals of that certain
Non-Competition Agreement executed by Seller and RWI.
(c) Such consents, waivers, estoppel letters or similar documentation
as the Buyer shall reasonably request, in the Buyer's sole discretion, in
connection with the transfer of the Assets;
(d) The list of customers specified in Section 3.22;
(e) Two (2) duly executed originals of the Employment Agreements
executed by each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇, as applicable;
(f) Certified resolutions of the Board of Directors and shareholders of
the Seller granting to the Chairman of the Board or President of Seller the
authority to sell the Assets;
(g) Certified resolutions of the Board of Directors of RWI approving
the sale of the Assets and authorizing to Chairman of the Board or President of
RWI to sign this Agreement and the Guaranty Agreement; and
(h) All other items required to be delivered hereunder or as may be
requested which are necessary or would reasonably facilitate consummation of the
transactions contemplated hereby.
In addition, the Seller will put the Buyer into full possession and enjoyment of
all Assets immediately upon the occurrence of the Closing.
5.3 BUYER'S OBLIGATIONS. The Buyer will deliver or cause to be
delivered to the Seller at or before the Closing, the following:
(a) Check in the amount of the Cash Purchase Price to the Seller;
(b) A stock certificate evidencing all of the Stock issued in the name
of the Seller;
(c) A warrant certificate evidencing the Warrants issued in the name of
the Seller;
(d) Two (2) duly authorized and executed originals of the ▇▇▇▇ of Sale
executed by Buyer;
(e) Two (2) duly authorized and executed originals of each Employment
Agreement executed by the Buyer;
(f) Certified resolutions of the Board of Directors of the Buyer;
(g) The list of Offered Employees specified in Section 5.7; and
(h) All other items required to be delivered hereunder or as may be
requested or which are necessary or would reasonably facilitate consummation of
the transactions contemplated hereby.
5.4 INSURANCE, AD VALOREM TAXES, INCOME TAXES. The Buyer shall be
obligated to procure its own insurance on the Business commencing on the Closing
Date. Seller shall be solely responsible for receiving a refund of any insurance
premium payments that have been prepaid. With regard to ad valorem taxes on the
Assets for the 2003 tax year, the Seller and the Buyer agree that the taxes to
be paid shall be prorated as of the Closing Date. The Parties for themselves and
for their respective successors and assigns covenant and agree that they will
file coordinating Form 8594's in accordance with Section 1060 of the Internal
Revenue Code of 1986, as amended, with their respective income tax returns for
the taxable year that includes the Effective Date. The Seller shall pay or cause
to be paid all federal and state income, franchise, and net worth tax returns
with respect to the Business allocable to the time period immediately prior to
the Effective Date.
5.5 FURTHER ASSURANCES. At and after the Closing, each of the Parties
shall take all appropriate action and execute all documents of any kind which
may be reasonably necessary or desirable to carry out the transactions
contemplated hereby. The Seller, at any time at or after the Closing, will
execute, acknowledge and deliver any further bills of sale, assignments and
other assurances, documents and instruments of transfer, reasonably requested by
the Buyer, and will take any other action consistent with the terms of this
Agreement that may reasonably be requested by the Buyer, for the purpose of
assigning and confirming to the Buyer, all of the Assets. The Buyer shall notify
the Seller promptly, and in no event more than ten (10) business
days after the Buyer's receipt, of any tax inquiries or notifications thereof
which relate to any period prior to the Effective Date, and the Seller shall
prepare and deliver responses to such inquiries as the Seller deems necessary or
appropriate. In addition, the Seller shall make available the books and records
of the Business during reasonable business hours. Following the Effective Date,
and without additional consideration, Buyer shall make available to Seller the
books and records of the Business (as they existed on the Effective Date) for a
period of five (5) years following the Effective Date.
5.6 TERMINATION OF EMPLOYMENT OF CERTAIN OF SELLER'S EMPLOYEES. At the
Closing, Buyer shall furnish to Seller a list of Employees that Buyer desires to
offer employment to (the "OFFERRED EMPLOYEES"). The Seller agrees to use
commercially reasonable efforts to make available to the Buyer the Offered
Employees that Buyer desires to hire for the purpose of operating the Business.
Nothing shall prohibit Buyer from terminating any of the Offered Employees
subsequent to their employment by Buyer. Seller shall pay all wages, benefits,
accrued vacation taken, sick pay and any other benefits of the Employees are
entitled to receive on or before the Closing. If compliance with applicable
federal, state or local law is required to close this transaction, Buyer and
Seller shall cooperate in complying with such laws in order to close the
transaction as soon after such compliance as reasonably practicable.
5.7 ACCOUNTS RECEIVABLE. From and after the Effective Date, Seller
shall forward to Buyer on a weekly basis all payments that it receives on
Accounts Receivable together with providing an accounting therefore. The Seller
agrees to notify and instruct each account debtor to make payments on the
Accounts Receivable to Buyer. Seller shall not compromise or otherwise settle
any of the Accounts Receivable for less than the full amount of such Accounts
Receivable without the prior written consent of Buyer specifically directing
such compromise or settlement.
5.8 CONFIDENTIALITY AGREEMENT. After the Closing and except as
otherwise specifically permitted in this Agreement, Seller agrees, on behalf of
itself and its Affiliates, to use its best efforts not to divulge, communicate,
use to the detriment of Buyer or its Affiliates or for the benefit of any other
person or persons, any confidential information or trade secrets of Seller with
respect to the Assets or the Business, including personnel information, secret
processes, know-how, customer lists, the identity of service providers,
formulae, or other technical data; provided, however, if Seller or any of its
Affiliates are compelled to disclose such information to any tribunal,
regulatory or governmental authority or agency or else stand liable for contempt
or suffer other censure and penalty, Seller or its Affiliates may so disclose
such information without any liability hereunder, upon furnishing Buyer at least
ten (10) days prior written notice, if possible under the circumstances. As used
in this Agreement, "CONFIDENTIAL INFORMATION" and "TRADE SECRETS" shall not
include any information that is generally available to the public.
5.9 ASSIGNMENT OF CONTRACTS. On or before the Closing Date, Seller
shall have executed and delivered to Buyer assignments of all the Contracts that
are assignable as may be determined necessary by either party. With respect to
any Contract in which the consent of a governmental authority or third party is
required, Seller shall, with Buyer's reasonable
cooperation, use commercially reasonable efforts to procure the assignment of
all such Contracts to Buyer. Prior to the successful procurement of any such
consent or approval to the assignment of any Contracts in which same is
required, Seller agrees that it shall perform all commercially reasonably acts
and execute any and all documents as may be requested by Buyer so that Buyer may
realize the benefits of such Contracts as Buyer deems reasonably necessary or
desirable, until such time as such Contracts are successfully assigned to Buyer.
To the extent any such Contract cannot be subcontracted, Buyer agrees to
cooperate with Seller and enter into such other commercially reasonable
arrangements as will enable Seller to fulfill its remaining obligations under
said Contracts. Buyer agrees to indemnify, defend and hold harmless Seller and
its Affiliates from all Damages incurred by Seller or Seller's Affiliates in
connection with Buyer's performance of its obligations under this Section 5.9;
provided, that such Damages are not the result of Seller's default hereunder.
5.10 CHANGE OF SELLER'S NAMES. Within ten (10) days after the Closing,
Seller shall file appropriate documents with the Secretary of State of Tennessee
to change its trade names and to transfer its interests in its trade names
described in SCHEDULE 2.1(G) and coordinate with Buyer to allow Buyer to
simultaneously file such corporate documents as may be reasonably necessary for
Buyer to acquire the rights to the trade names.
5.11 INVESTOR REPRESENTATIONS. The Seller and RWI acknowledge that the
Stock and the Warrants were acquired by the Buyer in a transaction directly with
Kingdom Ventures, have not been registered under the Securities Act of 1933 or
any state securities laws. Upon the execution hereof an Investor Representation
Agreement in the form attached as Exhibit A (each an "INVESTOR REPRESENTATION
AGREEMENT") shall be executed by the Seller and RWI.
5.12 NON-COMPETE. The Seller and RWI agree not to engage in any
activity, or to own any interest in or provide any services to any person whose
activities, directly or indirectly compete with the Business for a period of
[two] years from the Closing Date. Upon execution hereof a Non-Compete Agreement
in the form attached as Exhibit B shall be executed by the Seller and RWI.
ARTICLE VI
INDEMNIFICATION
6.1 INDEMNIFICATION.
A. BY THE SELLER. The Seller and RWI, jointly and severally, shall
indemnify, save, defend and hold harmless the Buyer and Buyer's shareholders,
directors, officers, partners, agents and employees (and in the event the Buyer
assigns its right, title and interest hereunder to a corporation, which shall be
permitted hereunder, such assignee's shareholders, directors, officers, agents
and employees) (collectively, the "BUYER INDEMNIFIED PARTIES") from and against
any and all costs, lawsuits, losses, liabilities, deficiencies, claims and
expenses, including interest, penalties, attorneys' fees and all amounts paid in
investigation, defense or settlement of any of the foregoing (collectively
referred to herein as "DAMAGES"), (i) incurred in connection
with or arising out of or resulting from or incident to any breach of any
covenant or warranty, or the inaccuracy of any representation, made by the
Seller or RWI in or pursuant to this Agreement or any other agreement
contemplated hereby or in any schedule, certificate, exhibit, or other
instrument furnished or to be furnished by the Seller or its Affiliates under
this Agreement, or (ii) based upon, arising out of, or otherwise in respect of
any liability or obligation of the Business or relating to the Assets (a)
relating to any period prior to the Closing Date, other than those Damages based
upon or arising out of the Assumed Liabilities, (b) arising out of facts or
circumstances existing prior to the Closing Date, other than those Damages based
upon or arising out of the Assumed Liabilities or relating to any period on and
after the Closing Date or arising out of facts or circumstances existing on and
after the Closing Date; provided, however, that neither the Seller, Regal Works,
nor the Shareholders shall be liable for any such Damages to the extent, if any,
such Damages result from or arise out of a breach or violation of this Agreement
by any Buyer Indemnified Parties, (c) relating to any violation of applicable
law respecting the Real Property including such violations as may have been
unknown at the Closing Date, (d) the matters specifically described in Section
5.9, or (e) the Retained Liabilities. Notwithstanding anything to the contrary
in the Agreement, including this Paragragh A, in no event shall any
indemnification, payment or obligation of Seller to Buyer, to the Buyer
Indemnified Parties, or to any third party arising from or relating to this
Agreement or the documents, instruments and/or transactions contemplated by this
Agreement exceed the amount of the Purchase Price.
B. BY THE BUYER. The Buyer shall indemnify, save, defend and hold
harmless the Seller and its shareholders, directors, officers, partners, agents
and employees (collectively, the "SELLER INDEMNIFIED PARTIES") from and against
any and all Damages (i) incurred in connection with or arising out of or
resulting from or incident to any breach of any covenant or warranty, or the
inaccuracy of any representation, made by the Buyer in or pursuant to this
Agreement or any other agreement contemplated hereby or in any schedule,
certificate, exhibit, or other instrument furnished or to be furnished by the
Buyer under this Agreement, or (ii) based upon, arising out of or otherwise in
respect of any liability or obligation of the Business or relating to the Assets
(a) relating to any period on and after the Closing Date, or (b) arising out of
facts or circumstances existing on and after the Effective Date relating to the
Assumed Liabilities; provided, however, that the Buyer shall not be liable for
any such Damages if such Damages result from or arise out of a breach or
violation of this Agreement by any Seller Indemnified Parties, (c) the matters
specifically described in Section 5.9, or (d) the Assumed Liabilities.
Notwithstanding anything to the contrary in the Agreement, including this
Paragragh B, in no event shall any indemnification, payment or obligation of
Buyer to Seller, to the Seller Indemnified Parties, or to any third party
arising from or relating to this Agreement or the documents, instruments and/or
transactions contemplated by this Agreement exceed the amount of the Purchase
Price.
C. DEFENSE OF CLAIMS. If any lawsuit or enforcement action is filed
against any Party entitled to the benefit of indemnity hereunder, written notice
thereof describing such lawsuit or enforcement action in reasonable detail and
indicating the amount (estimated, if necessary) or good faith estimate of the
reasonably foreseeable estimated amount of Damages (which estimate shall in no
way limit the amount of indemnification the indemnified Party is
entitled to receive hereunder), shall be given to the indemnifying Party as
promptly as practicable (and in any event within ten (10) days, after the
service of the citation or summons) ("NOTICE OF ACTION"); provided that the
failure of any indemnified Party to give timely notice shall not affect its
rights to indemnification hereunder to the extent that the indemnified Party
demonstrates that the amount the indemnified Party is entitled to recover
exceeds the actual damages to the indemnifying Party caused by such failure to
so notify within ten (10) days. The indemnifying Party may elect to compromise
or defend any such asserted liability and to assume all obligations contained in
this Section 6.1 to indemnify the indemnified Party by a delivery of notice of
such election ("NOTICE OF ELECTION") within ten (10) days after delivery of the
Notice of Action. Upon delivery of the Notice of Election, the indemnifying
Party shall be entitled to take control of the defense and investigation of such
lawsuit or action and to employ and engage attorneys of its own choice to handle
and defend the same, at the indemnifying Party's sole cost, risk and expense,
and such indemnified Party shall cooperate in all reasonable respects, at the
indemnifying Party's sole cost, risk and expense, with the indemnifying Party
and such attorneys in the investigation, trial, and defense of such lawsuit or
action and any appeal arising therefrom; provided, however, that the indemnified
Party may, at its own cost, risk and expense, participate in such investigation,
trial and defense of such lawsuit or action and any appeal arising therefrom. If
the Notice of Election is delivered to the indemnified Party, the indemnified
Party shall not pay, settle or compromise such claim without the indemnifying
Party's consent, which consent shall not be unreasonably withheld. If the
indemnifying Party elects not to defend the claim of the indemnified Party or
does not deliver to the indemnified Party a Notice of Election within ten (10)
days after delivery of the Notice of Action, the indemnified Party may, but
shall not be obligated to defend, or the indemnified Party may compromise or
settle (exercising reasonable business judgment) the claim or other matter on
behalf, for the account, and at the risk, of the indemnifying Party.
D. THIRD PARTY CLAIMS. The provisions of this Section 6.1 are not
limited to matters asserted by the Parties, but cover costs, losses,
liabilities, damages, lawsuits, claims and expenses incurred in connection with
third party claims. The indemnity hereunder is in addition to any and all rights
and remedies of the Parties in connection herewith.
6.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations, warranties, covenants and agreements contained in this
Agreement shall survive the Closing of the transaction contemplated herein and
the execution and delivery of the documents, instruments and agreements
described in Article V hereof, notwithstanding any investigation made by or on
behalf of the Seller or the Buyer.
6.3 LIMITATION ON INDEMNIFICATION. No claim for indemnification shall
be effective unless such claim is made in writing and delivered to the
indemnifying Party hereunder within two (2) years of the Closing Date. Buyer and
Seller shall each take all commercially reasonable actions as may be necessary
to mitigate their Damages and possible indemnified claims, which cost of
mitigation shall be covered by the indemnity set forth herein. Neither Party
hereto shall be permitted to recover punitive, consequential or indirect Damages
from the other party hereto whether by way of indemnification or under any other
legal doctrine, cause of action, or theory of recovery.
ARTICLE VII
CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE
Section 7.1 CONDITIONS. The obligations of Buyer to purchase the Assets
under this Agreement are subject to the satisfaction, at or before the Closing
Date, of all of the conditions set out below in this Article VII. Buyer may
waive any or all of these conditions in whole or in part without prior notice;
provided, however, that no such waiver of a condition shall constitute a waiver
by Buyer of any of its other rights or remedies, at law or in equity, if the
Seller or any Shareholder shall be in default of any of its representations,
warranties or covenants under this Agreement.
Section 7.2 ACCURACY OF REPRESENTATIONS AND WARRANTIES. Except as
specifically permitted by this Agreement, all representations and warranties
made by the Seller and RWI in this Agreement the Investor Representation
Agreement or in any written Schedule or statement delivered to Buyer by the
Seller or RWI under this Agreement shall be true on and as of the Closing Date
as though made on and as of that date.
Section 7.3 PERFORMANCE OF THE SELLER AND THE SHAREHOLDERS. The Seller
and RWI shall have performed, satisfied and complied with all covenants,
agreements and conditions required by this Agreement the Guaranty Agreement, or
the Non-compete Agreement to be performed or complied with by them on or before
the Closing Date.
Section 7.4 OFFICER'S CERTIFICATE. Buyer shall have received
certificates, dated the Closing Date, signed and verified by the Seller's
President and RWI's President certifying, in such detail as the Buyer and its
counsel may reasonably request, that the conditions specified in Sections 7.2
and 7.3 have been fulfilled.
Section 7.5 ABSENCE OF LITIGATION. No action, suit or proceeding before
any court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened on or before the Closing Date.
Section 7.6 CONSENTS. All necessary agreements and consents of any
parties to the consummation of the transactions contemplated by this Agreement,
or otherwise pertaining to the matters covered by it, shall have been obtained
by the Seller and delivered to the Buyer.
Section 7.7 APPROVAL OF DOCUMENTS. The form and substance of all
certificates, instruments, opinions and other documents delivered to the Buyer
under this Agreement shall be satisfactory in all respects to the Buyer and its
counsel.
Section 7.8 APPROVAL OF THE BUYER'S BOARD OF DIRECTORS. The board of
directors of the Buyer shall have authorized and approved the consummation of
the transactions contemplated hereunder.
Section 7.9 ABSENCE OF MATERIAL ADVERSE CHANGE. The Buyer shall not
have discovered any materially adverse discrepancy in the financial information
relating to the Seller, the Assets or the Business which heretofore has been or
is hereafter furnished to the Buyer, and no material adverse change shall have
occurred in the Seller's financial condition, Assets, liabilities or prospects
since the Effective Date.
Section 7.10 DELIVERY OF CORPORATE DOCUMENTS. There shall be delivered
to the Buyer copies (certified by the Secretary of the Company) of the minutes
of the meetings of the Board of Directors of the Seller, the Board of Directors
of Regal Works of each at which the transactions hereunder were authorized. The
Seller shall have delivered to the Buyer certified copies of the Company's
Articles of Incorporation and Bylaws and a Good Standing Certificate issued by
the Tennessee Secretary of State.
Section 7.11 NO CASUALTY. There shall not have occurred any damage,
destruction or loss which has (whether or not covered by insurance) materially
and adversely affected any of the Assets.
ARTICLE VIII
CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE
Section 8.1 CONDITIONS. The obligations of the Seller to sell to the
Buyer the Assets under this Agreement are subject to the satisfaction, at or
before the Closing Date, of all the following conditions of this Article VIII.
The Seller may waive any or all of these conditions in whole or in part without
prior notice; provided, however, that no such waiver of a condition shall
constitute a waiver by the Seller of any of their other rights or remedies, at
law or in equity, the Buyer shall be in default in any of its representations,
warranties or covenants under this Agreement.
Section 8.2 ACCURACY OF BUYER'S REPRESENTATIONS AND WARRANTIES. Except
as otherwise permitted by this Agreement, all representations and warranties by
the Buyer contained in this Agreement or in any written statement delivered by
the Buyer under this Agreement shall be true on and as of the Closing Date as
though made on and as of that date.
Section 8.3 ACCURACY OF PERFORMANCE OF BUYER. The Buyer shall have
performed, satisfied and complied with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by it on
or before the Closing Date.
Section 8.4 BUYER'S OFFICER'S CERTIFICATE. The Seller shall have
received a certificate, dated the Closing Date, signed and verified by the
Buyer's President and certifying, in such detail as the Seller and its counsel
may reasonably request, that the conditions specified in Sections 8.2 and 8.3
relating to Purchaser have been fulfilled.
Section 8.5 AUTHORITY OF PURCHASER. The Seller shall have received
certified copies of all resolutions of the Buyer's board of directors pertaining
to the due authorization, execution, delivery and performance by the Buyer of
this Agreement.
Section 8.6 APPROVAL OF DOCUMENTS. The form and substance of all
certificates, instruments and other documents delivered to the Seller under this
Agreement shall be satisfactory in all respects to the Seller and its counsel.
ARTICLE IX
TERMINATION PRIOR TO CLOSING
Section 9.1 TERMINATION. This Agreement and the transactions
contemplated herein may be terminated at any time prior to the Closing:
(1) By the mutual written consent of the Buyer and the Seller;
(2) By either the Buyer or the Seller in writing, without liability to
the Party terminating this Agreement on account of such termination, if the
Seller or RWI on the one hand, or the Buyer on the other, as the case may be,
shall (i) fail to perform in any material respect its agreements contained
herein required to be performed prior to the Closing Date, or (ii) materially
breach any of its representations, warranties or covenants contained herein.
Section 9.2 EFFECT OF OBLIGATIONS. Termination of this Agreement
pursuant to this Article IX shall terminate all obligations of the Parties and
this Agreement shall become void and have no effect without any liability on the
part of any Party or the shareholders, directors or officers of the Seller or
the Buyer in respect thereof, except for the obligations under Sections 5.8, and
10.1; provided, however, that termination pursuant to clause (b) of Section 9.1
shall not relieve the defaulting or breaching party from any liability to the
other party hereto.
ARTICLE X
MISCELLANEOUS
10.1 FEES. Except as expressly set forth herein to the contrary, each
Party shall be responsible for all costs, fees and expenses (including attorney
and accountant fees and expenses) paid or incurred by such Party in connection
with the preparation, negotiation, execution, delivery and performance of this
Agreement, or otherwise in connection with the transaction contemplated hereby.
10.2 MODIFICATION OF AGREEMENT. This Agreement may be amended or
modified only in writing signed by both of the Parties, and by the individuals
joining in the execution hereof.
10.3 NOTICES. All notices, consents, demands or other communications
required or permitted to be given pursuant to this Agreement shall be deemed
sufficiently given when delivered personally or telefaxed during regular
business hours during a business day to the
appropriate location described below, or three (3) business days after posting
thereof by United States first-class, registered or certified mail, return
receipt requested, with postage and fees prepaid and addressed as follows:
If to Seller: Christian Speakers & Artists Agency, Inc.
Attn: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Presiden
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to: RegalWorks, Inc.
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇, President
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
If to Buyer: Christian Speakers & Artists Agency, Inc.
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇, President
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, PC
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any Party at any time by furnishing notice to the other Party in the manner
described above may designate additional or different addresses for subsequent
notices or communications.
10.4 SEVERABILITY. The invalidity or unenforceability of any provision
of this Agreement shall not invalidate or affect the enforceability of any other
provision of this Agreement.
10.5 ENTIRE AGREEMENT; BINDING EFFECT. This Agreement sets forth the
entire agreement among the Parties with respect to the subject matter hereof.
This Agreement shall be binding upon and shall inure to the benefit of the
Parties and their respective successors and assigns.
10.6 WAIVER. No delay in the exercise of any right under this Agreement
shall waive such rights. Any waiver, to be enforceable, must be in writing.
10.7 GOVERNING LAW AND CHOICE OF FORUM. This Agreement has been
negotiated and executed in the State of Nevada. This Agreement shall be governed
by and interpreted in accordance with the laws of the State of Nevada, including
all matters of construction, validity,
performance and enforcement, but without giving effect to principles of conflict
of laws. The parties hereby consent, in any dispute, action, litigation, or
other proceeding concerning this Agreement to the jurisdiction of the courts in
Reno, Nevada.
10.8 ASSIGNMENT. The Seller shall not assign this Agreement or any
interest herein without the prior written consent of the Buyer. Any attempted
assignment by the Seller of its rights or obligations without such consent shall
be null and void. The Buyer may assign its rights, duties, and obligations under
this Agreement to an affiliated corporation of the Buyer, in which event such
corporation shall be entitled to enforce all of the Buyer's rights, titles and
interests herein. Reference to any of the Parties in this Agreement shall be
deemed to include the successors and assigns of such Party.
10.9 HEADINGS. Headings in this Agreement are for convenience only and
shall not affect the interpretation of this Agreement.
10.10 SCHEDULES AND EXHIBITS. All Schedules and Exhibits attached to
this Agreement are and shall be hereby incorporated in and made a part of this
Agreement.
10.11 REMEDIES. If any legal action or other proceeding is brought for
the enforcement of this Agreement, the Non-Competition Agreements, the Guaranty
Agreements, or any document, instrument, or agreement executed in connection
herewith, or because of an alleged dispute, breach, default or misrepresentation
in connection with any of the provisions of this Agreement, the Non-Competition
Agreements, the Guaranty Agreements, or any document, instrument, or agreement
executed in connection herewith, the successful or prevailing Party or Parties
shall be entitled to recover reasonable attorneys' fees and other costs incurred
in that action or proceeding in addition to any other remedies to which it or
they may be entitled at law or equity. Except as limited by the provisions of
Section 6.3 herein, the rights and remedies granted herein are cumulative and
not exclusive of any other right or remedy granted herein or provided by law.
10.l2 RIGHTS AND LIABILITIES OF PARTIES. Nothing in this Agreement,
whether express or implied, is intended to confer any rights or remedies under
or by reason of this Agreement on any persons other than the Parties and their
respective successors and assigns, nor is anything in this Agreement intended to
relieve or discharge the obligation or liability of any third persons to any
Party to this Agreement, nor shall any provision give any third person any right
of subrogation or action over against any Party to this Agreement.
10.13 SURVIVAL. This Agreement, including but not limited to all
covenants, warranties, representations and indemnities contained herein, shall
survive the Closing and the ▇▇▇▇ of Sale, and all other documents, instruments
or agreements relating to the Assets and the transactions contemplated herein,
and shall not be deemed merged therein.
10.14 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall have the force and effect of an original, and
all of which shall constitute one and the same agreement.
10.15 ATTORNEYS' FEES. If any litigation is instituted to enforce or
interpret the provisions of this Agreement or the transactions described herein,
the prevailing Party in such action shall be entitled to recover its reasonable
attorneys' fees from the other Party hereto.
10.16 DRAFTING. The Parties acknowledge that each Party was actively
involved in the negotiation and drafting of this Agreement and that no law or
rule of construction shall be raised or used in which the provisions of this
Agreement shall be construed in favor or against any Party hereto because one is
deemed to be the author thereof.
[SIGNATURE PAGE FOLLOWS]
EXECUTED AND DELIVERED EFFECTIVE in multiple counterparts effective as
of the date first written above.
BUYER:
CHRISTIAN SPEAKERS & ARTISTS AGENCY, INC.,
a Nevada corporation
By:
------------------------------
_________________, President
SELLER:
CHRISTIAN SPEAKERS AND ARTISTS AGENCY, INC.,
a Tennessee corporation
By:
------------------------------
_________________, President
REGALWORKS:
REGALWORKS, INC,
a Delaware corporation
By:
------------------------------
_________________, President
SCHEDULES
2.1(a) Tangible Assets
2.1(d) Contracts
2.1(g) Intellectual Property
2.1(i) General Intangibles
3.1 Liens, mortgages, encumbrances
3.8 Litigation
3.11 Employees
3.14 Leased Assets
3.22 Customers
3.23 Insurance Policies
3.26 Trade Payables
3.27 Accounts Receivable
EXHIBITS
A Investor Representation Agreement
B Non-compete Agreement
