Exhibit 10.1
SHARE PURCHASE AGREEMENT
by and between
XX XXXXXXXXX AND XXXXX XXXXXXX,
collectively, as Seller,
AS SOLE SHAREHOLDERS OF
INDEPENDENT METAL SALES, INC.,
and,
IMS PROCESSING, INC.,
and
INSEQ CORPORATION,
as Purchaser,
Dated as of August 7, 2005
V.8.6.05
SHARE PURCHASE AGREEMENT
THIS AGREEMENT is made as of the 7th day of August, 2005
AMONG:
INSEQ CORPORATION, a company formed pursuant to the laws of
the State of Delaware and having an office for business
located at 000 Xxxxxx Xxxx., Xxxxx 000, Xxxxx Xxxxxxxxx,
Xxx Xxxxxx 00000 (referred to herein individually as
"Inseq" or as the "Purchaser")
AND:
XX XXXXXXXXX AND XXXXX XXXXXXX, AS SOLE SHAREHOLDERS OF
INDEPENDENT METAL SALES, INC., AND IMS PROCESSING, INC.,
both of which companies were formed pursuant to the laws of
the State of New Jersey and have an office for business
located at 0000 Xxxx Xxxx Xxxxxx, Xxxxxxxxxx Industrial
Park, Hainesport, New Jersey 08036 (referred to herein
individually respectively as "IMS" or "IMS Processing" and
collectively as "IMSP") (Xxxxxx Xxxxxxxxx and Xxxxx Xxxxxxx
are collectively referred to herein as the "Seller" or "Sellers")
WHEREAS:
A. The Purchaser's mission is to facilitate the efficient
utilization of primary and secondary commodities including
metals, chemicals, fuels and plastics, and the Purchaser offers
certain manufacturing and distribution capabilities to its
clients in fulfillment of this mission;
B. IMSP provides value-added metals processing services and
distributes a full line of metal products out of its facility in
Hainesport, New Jersey (the "Business") incidental to which it
has certain assets including but not limited to the following:
(a) Accounts receivable, inventories, prepaid expenses and
other miscellaneous assets;
(b) Certain equipment and vehicles;
(c) Certain computer equipment and fixtures, furniture and the
like;
(d) Certain telephone and facsimile numbers; and,
C. The Purchaser desires to purchase and acquire and Seller, as sole
shareholders of IMS and IMS Processing, desires to sell, convey,
assign and transfer, or cause to be sold, conveyed, assigned and
transferred, to the Purchaser, all of the Sellers' shares in IMS
and IMS Processing and the Board of Directors of Purchaser deems
it advisable that IMS and IMS Processing become wholly-owned
subsidiaries of INSEQ (the "Acquisition") pursuant to this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the
premises and the mutual covenants, agreements, representations and
warranties contained herein, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
As used herein, the terms below shall have the following meanings:
(a) "Acquisition" means the Acquisition, at the Closing, of
Sellers' shares of IMS and IMS Processing by Purchaser pursuant to this
Agreement;
(b) "Acquisition Shares" means 100%, or 1,000 shares, of IMS'
issued and outstanding capital stock, and 100%, or 1,000 shares, of IMS
Processing's issued and outstanding capital stock, to be transferred to
Purchaser at Closing pursuant to the terms of this Agreement;
(c) "Agreement" means this Share Purchase Agreement between
Purchaser and Seller;
(d) "Closing" means the completion, on the Closing Date, of the
transactions contemplated hereby in accordance with Article 3 hereof;
(e) "Closing Date" means the day on which all conditions
precedent to the completion of the transaction as contemplated hereby
have been satisfied or waived;
(f) "Seller Accounts Payable and Liabilities" means all
accounts payable and liabilities of IMSP due and owing or otherwise
constituting a binding obligation of IMSP (other than a IMSP Material
Contract) as of June 30, 2005 (as attached hereto in Schedule 1(f));
(g) "Seller Accounts Receivable" means all accounts receivable
and other debts owing to IMSP, as of June 30, 2005 (as attached hereto
in Schedule 1(g));
(h) "Seller Assets" means all the property and assets of IMSP
of every kind and description wheresoever situated including, without
limitation, IMSP's Equipment, IMSP's Inventory, IMSP's Material
Contracts, IMSP's Accounts Receivable, IMSP's Cash, IMSP's Intangible
Assets and IMSP's Goodwill, and all credit cards, charge cards and
banking cards issued to IMSP;
(i) "Business" means all aspects of the business conducted by
IMSP;
(j) "Seller Cash" means all cash on hand or on deposit to the
credit of IMSP on June 30, 2005;
(k) "Seller Debt to Related Parties" means debts owed by Seller
to IMS and/or IMS Processing or to any family member thereof, or to any
director or officer of IMS and/or IMS Processing;
(l) "Seller Equipment" means all machinery, equipment,
furniture, and furnishings used in the IMSP Business (as attached
hereto in Schedule 1(l));
(m) "Seller Financial Statements" means, collectively, the
unaudited consolidated financial statements of IMSP for the three
fiscal years ended December 31, 2004, 2003 and 2002, and the unaudited
consolidated financial statements of IMSP for the six month period
ended June 30, 2005 (as attached hereto in Schedule 1(m));
(n) "Seller Goodwill" means the goodwill of the Business
together with the exclusive right of Purchaser to represent itself as
carrying on the Business in succession of IMSP subject to the terms
hereof, and the right to use any words indicating that the Business is
so carried on including the right to use the name "Independent Metal
Sales, Inc." or "IMS Processing, Inc.," or any variation thereof as
part of the name of or in connection with the IMSP's Business or any
part thereof carried on or to be carried on by IMSP, the right to all
corporate, operating and trade names associated with the Business, or
any variations of such names as part of or in connection with the
Business, all telephone listings and telephone advertising contracts,
all lists of customers, books and records and other information relating
to the Business, all necessary licenses and authorizations and any other
rights used in connection with the Business;
(o) "Seller Insurance Policies" means the public liability
insurance and insurance against loss or damage to the Seller Assets and
the Business as described in Schedule 1(o) hereto;
(p) "Seller Intangible Assets" means all of the intangible
assets of IMSP, including, without limitation, IMSP's Goodwill, all
trademarks, logos, copyrights, designs, and other intellectual and
industrial property of IMSP (as attached hereto in Schedule 1(p));
(q) "Seller Inventory" means all inventory and supplies of the
Business as of the Closing Date (as attached hereto in Schedule 1(q));
(r) "Seller Material Contracts" means the burden and benefit of
and the right, title and interest of IMSP in, to and under all trade
and non-trade contracts, engagements or commitments, whether written or
oral, to which IMSP are entitled in connection with the Business
whereunder IMSP is obligated to pay or entitled to receive the sum of
$10,000 or more including, without limitation, any pension plans,
profit sharing plans, bonus plans, loan agreements, security agreements,
indemnities and guarantees, any agreements with employees, lessees,
licensees, managers, accountants, suppliers, agents, distributors,
officers, directors, attorneys or others which cannot be terminated
without liability on not more than one month's notice, each as set
forth on Schedule 1(r));
(s) "Seller Real Property" means a complete list of (i) all
real property and interests in real property owned in fee by IMSP
(individually, a "IMS Owned Property" or "IMS Processing Owned
Property" and collectively, the "IMSP Owned Properties"), and (ii) all
real property and interests in real property leased by IMS and/or IMS
Processing as lessee or lessor, set forth on Schedule 1(s);
(t) "Seller Related Party Debts" means the debts owed by Xxxxxx
Xxxxxxxxx or Xxxxx Xxxxxxx or by any family member thereof, or by any
affiliate, director or officer of IMS or IMS Processing; and
(u) "Seller Shares" means all of the issued and outstanding
shares of IMS and IMS Processing capital stock.
Section 1.2 Captions and Section Numbers
The headings and section references in this Agreement are for
convenience of reference only and do not form a part of this Agreement
and are not intended to interpret, define or limit the scope, extent or
intent of this Agreement or any provision thereof.
Section 1.3 Section References and Schedules
Any reference to a particular "Article", "section", "paragraph",
"clause" or other subdivision is to the particular Article, section,
clause or other subdivision of this Agreement and any reference to a
Schedule by letter will mean the appropriate Schedule attached to this
Agreement and by such reference the appropriate Schedule is incorporated
into and made part of this Agreement.
Section 1.4 Severability of Clauses
If any part of this Agreement is declared or held to be invalid for any
reason, such invalidity will not affect the validity of the remainder
which will continue in full force and effect and be construed as if
this Agreement had been executed without the invalid portion, and it is
hereby declared the intention of the parties that this Agreement would
have been executed without reference to any portion which may, for any
reason, be hereafter declared or held to be invalid.
ARTICLE II
THE ACQUISITION
Section 2.1 Purchase and Sale of Stock
Sellers hereby agree to sell to Purchaser the Acquisition Shares in
exchange for the Purchase Price hereunder on the Closing Date and to
transfer to Purchaser on the Closing Date a 100% undivided interest in
and to the Acquisition Shares free from all liens, mortgages, charges,
pledges, encumbrances or other burdens with all rights now or
thereafter attached thereto.
Section 2.2 Purchase Price
In consideration for the Acquisition Shares, the Purchaser shall pay to
Seller a Purchase Price based on a multiple of FIVE (5) (the "Multiple")
times Seller's Adjusted EBITDA (the "Purchase Price") (which is currently
estimated to be about $1.5 million per year (the "Estimated EBITDA"). The
Purchase Price shall be paid to Seller as follows:
(a) TWO MILLION FIVE HUNDRED THOUSAND DOLLARS
($2,500,000) in cash at closing by wire transfer of immediately
available funds;
(b) ONE MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS
($1,250,000) in cash on the first anniversary of closing by wire
transfer of immediately available funds;
(c) An earn-out of ONE MILLION FIVE HUNDRED THOUSAND
DOLLARS ($1,500,000) paid quarterly in the form of THIRTY PERCENT (30%)
of Seller's consolidated quarterly EBITDA, provided that such EBITDA
exceeds ONE MILLION TWO HUNDRED THOUSAND DOLLARS ($1,200,000) on an
annualized basis; provided, however, that payment of any unpaid portion
of this ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000) earn-out
that may be due will become mandatory in the event that the Purchaser
is sold or acquired prior to the expiration of three years; and,
(d) the balance of the Purchase Price (about TWO MILLION
FIVE HUNDRED THOUSAND DOLLARS ($2,500,000)) in the form of convertible
term notes (the "Notes"), bearing a term of THREE (3) years and
interest at the annual simple rate of 6.5%, paid monthly. Prepayment
of the Notes will become mandatory in the event that the Purchaser is
sold or acquired prior to the end of the loan term. These Notes shall
be convertible at Sellers' sole option into INSEQ common stock. These
Notes shall be payable as follows:
(i) ONE MILLION ($1,000,000) of the principal of
the Notes shall be payable on the SECOND (2nd) anniversary of the
Closing; provided, however, that such funds shall be payable on the
THIRD (3rd) anniversary of the Closing in the event that the average of
IMSP's trailing TWO (2) years' EBITDA, as measured on the SECOND (2nd)
anniversary of Closing, is equal to or less than ONE MILLION DOLLARS
($1,000,000); and, in such event, interest shall only be payable to
Seller as provided for herein on a principal balance of ONE MILLION
DOLLARS ($1,000,000) and interest shall cease to be payable on the
remaining ONE MILLION FIVE HUNDRED THOUSAND ($1,500,000) of the Notes
but shall continue to accrue as provided for herein.
(ii) The remaining ONE MILLION FIVE HUNDRED THOUSAND
($1,500,000) of the principal of the above described convertible term
notes shall be payable on the THIRD (3rd) anniversary of the closing but
shall be reduced in the event that the average of IMSP's trailing THREE
(3) years' EBITDA, as measured on the THIRD (3rd) anniversary of closing
(the "Adjusted EBITDA"), is less than the Estimated EBITDA on the basis
of the following formula:
"Principal Reduction" = (Estimated EBITDA - Adjusted EBITDA) x (Multiple)
"Interest Reduction" = (Principal Reduction) x (1.065)3
"Total Reduction" = (Principal Reduction) + (Interest Reduction)
The Total Reduction shall only apply to the amount payable to Sellers
under this Section 2.5(d)(ii), or ONE MILLION FIVE HUNDRED THOUSAND
DOLLARS ($1,500,000) including all interest paid and/or accrued on such
amount.
(e) For purposes of this Section 2.2, Seller's Adjusted
EBITDA shall be computed in a manner consistent with generally accepted
accounting principles consistently applied such that the EBITDA
calculations for IMSP prior to the Closing are consistent with the
EBITDA calculations subsequent to Closing and such that no material
changes to IMSP's EBITDA calculation will arise as a result of this
Agreement and the new ownership.
ARTICLE III
THE CLOSING
Section 3.1 Closing
The consummation of the transactions contemplated by this Agreement
(the "Closing") shall take place on or before August 15, 2005 at (i)
the offices of Purchaser's attorney or, (ii) if requested by the
Purchaser at least two (2) business days prior to the Closing, at the
Purchaser's place of business (the date of the Closing being herein
referred to as the "Closing Date").
Section 3.2 Deliveries at Closing
(a) At the Closing, the Seller shall deliver to the Purchaser:
(i) duly executed instruments or other evidence
sufficient to transfer to Purchaser the Acquisition Shares;
(ii) the Acquisition Shares free and clear of all
mortgages, liens, charges, pledges, security interests, encumbrances or
other claims whatsoever;
(iii) employment agreements, substantially in the form of
Exhibit B attached hereto, duly executed by Xxxxxx Xxxxxxxxx, Xxxxx
Xxxxxxx and Xxxxx Xxxxxxxxx;
(iv) all opinions, certificates and other instruments and
documents required by the terms of this Agreement to be delivered by
Seller at or prior to Closing or otherwise required in connection with
the Acquisition.
(b) At the Closing, the Purchaser shall deliver to the Seller:
(i) the cash portion of the Purchase Price by wire
transfer in immediately available funds paid directly to the Seller's
Bank in accordance with the Purchase Price provisions hereof;
(ii) all documents required to be delivered by Purchaser
to Seller at or prior to the Closing Date in connection with this
Agreement.
Section 3.3 Post-Closing Matters
Forthwith after the Closing, the parties, as the case may be, agree to
use all their best efforts to:
(a) issue a news release reporting the Closing;
(b) file a Form 8K with the Securities and Exchange Commission
disclosing the terms of this Agreement within 4 days of the Closing
and, not more than 60 days following the filing of the Form 8K, file
and amended Form 8K which includes the financial statements of Seller
as well as pro forma financial information of Purchaser and Seller as
required by Item 310 of Regulation SB as promulgated by the Securities
and Exchange Commission.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER
Seller hereby represents and warrant in all material respects to
Purchaser, with the intent that it will rely thereon in entering into
this Agreement and in approving and completing the transactions
contemplated hereby, that:
Section 4.1 Company Status and Capacity
(a) Formation. IMS and IMS Processing are companies duly formed
and validly subsisting under the laws of the State of New Jersey.
(b) Carrying on Business. IMS and IMS Processing are duly
authorized to carry on such business, in good standing in New Jersey
and such other jurisdictions where the nature of its business requires
it to be so authorized (such certificates of authority and good
standing are included herewith in Exhibit J), except where the failure
to be so authorized would not have a Material Adverse Effect. The
nature of the Business does not require IMS and IMS Processing to
register or otherwise be qualified to carry on business in any other
jurisdictions.
(c) Legal Capacity. IMS and IMS Processing have the legal
power, capacity and authority to own the Seller Assets and to carry on
the Business. IMS and IMS Processing have the legal capacity to carry
on their business and operations. Sellers have the legal power,
capacity and authority to enter into and complete this Agreement.
(d) Subsidiaries. Neither IMS and IMS Processing has any
subsidiaries.
Section 4.2 Capitalization
(a) Authorized Capital. The authorized capital of IMS and IMS
Processing consists of 1,000 and 1,000 shares of capital stock,
respectively.
(b) Ownership. The issued and outstanding shares capital of IMS
and IMS Processing will on Closing consist of 1,000 and 1,000 shares of
capital stock, respectively (being the Seller Shares), which shares on
Closing shall be validly issued and outstanding as fully paid and non-
assessable shares. Sellers will be at Closing the registered and
beneficial owner of the Seller Shares. The Seller Shares will on
Closing be free and clear of any and all liens, charges, pledges,
encumbrances, restrictions on transfer and adverse claims whatsoever.
(c) No Option, Warrant or Other Right. No person, firm or
corporation has any agreement, option, warrant, preemptive right or any
other right capable of becoming an agreement, option, warrant or right
for the acquisition of Seller Shares held by Sellers or for the
purchase, subscription or issuance of any of the unissued shares in the
capital of IMS and IMS Processing.
(d) No Restrictions. There are no restrictions on the transfer,
sale or other disposition of Seller Shares contained in the charter
documents of IMS and IMS Processing or under any agreement;
Section 4.3 Records and Financial Statements
(a) Charter Documents. The charter documents of IMS and IMS
Processing have not been altered since its formation date, except as
filed in the record books of IMS and IMS Processing;
(b) Minute Books. The minute books of IMS and IMS Processing
are complete and each of the minutes contained therein accurately
reflect the actions that were taken at a duly called and held meeting
or by consent without a meeting. All actions by IMS and IMS Processing
which require director or shareholder approval are reflected on the
corporate minute books of IMS and IMS Processing. Neither of IMS and/or
IMS Processing are in violation or breach of, or in default with
respect to, any term of its Certificate of Incorporation (or other
charter documents) or by-laws.
(c) Financial Statements. The Seller Financial Statements
present fairly and accurately the assets and liabilities (whether
accrued, absolute, contingent or otherwise) of IMS and IMS Processing
as of the date thereof, and the sales and earnings of the Business
during the periods covered thereby and have been prepared in
substantial accordance with generally accepted accounting principles
consistently applied;
(d) Accounts Payable and Liabilities. There are no material
liabilities, contingent or otherwise, of IMS and IMS Processing which
will not be reflected in the Seller Financial Statements, except those
incurred in the ordinary course of business since the date of the
Seller Financial Statements, and IMS and IMS Processing have not
guaranteed or agreed to guarantee any debt, liability or other
obligation of any person, firm or corporation;
(e) Accounts Receivable. All the Seller Accounts Receivable
result from bona fide business transactions and services actually
rendered without, to the knowledge and belief of Sellers any claim by
the obligor for set-off or counterclaim;
(f) No Debt to Related Parties. Except as disclosed in the
Seller Financial Statements, IMS and IMS Processing are not and on
Closing will not be, indebted to Sellers, nor to any director or
officer of IMS and IMS Processing except accounts payable on account of
bona fide business transactions of IMS and IMS Processing incurred in
normal course of the Business, including employment agreements with IMS
and IMS Processing, none of which are more than 60 days in arrears;
(g) No Related Party Debt to IMS and IMS Processing. Except as
set forth in the Seller Financial Statements, no IMS and IMS Processing
Shareholder nor any director or officer of IMS and/or IMS Processing is
now, or will upon Closing be, indebted to or under any financial
obligation to IMS and/or IMS Processing on any account whatsoever,
except for advances on account of travel and other expenses;
(h) No Dividends. No dividends or other distributions on any
shares in the capital of IMS and IMS Processing have been made,
declared or authorized since the date of the Seller Financial
Statements;
(i) No Payments. No payments of any kind have been made or
authorized since the date of the Seller Financial Statements to or on
behalf of Sellers or to or on behalf of officers, directors,
shareholders or employees of IMS and IMS Processing or under any
management agreements with IMS and IMS Processing, except payments made
in the ordinary course of the Business and at the regular rates of
salary or other remuneration payable to them;
(j) No Pension Plans. There are no pension, profit sharing,
group insurance or similar plans or other deferred compensation plans
affecting IMS and IMS Processing, except as set forth in the Seller
Financial Statements;
(k) No Adverse Events. Since the date of the Seller Financial
Statements:
(i) there has not been any material adverse change in the
consolidated financial position or condition of IMS and/or IMS
Processing, their liabilities or the Seller Assets or any damage, loss
or other change in circumstances materially affecting the Business or
the Seller Assets or IMS' and/or IMS Processing's right to carry on the
Business, other than changes in the ordinary course of the Business,
(ii) there has not been any damage, destruction, loss or
other event (whether or not covered by insurance) materially and
adversely affecting the Business or the Seller Assets,
(iii) there has not been any material increase in the
compensation payable or to become payable by IMS and/or IMS Processing
to Sellers, to any director, officer, or agent of IMS and/or IMS
Processing or any bonus or payment made to or with any of them;
(iv) the Business has been and continues to be carried on
in the ordinary course,
(v) Neither IMS nor IMS Processing have waived or
surrendered any right of material value,
(vi) IMS and/or IMS Processing has not discharged or
satisfied or paid any lien or encumbrance or obligation or liability
other than current liabilities in the ordinary course of business.
Section 4.4 Income Tax Matters
(a) Tax Returns. All tax returns and reports of IMS and IMS
Processing required by law to be filed have been filed and are true,
complete and correct, and any taxes payable in accordance with any
return filed by IMS and/or IMS Processing or in accordance with any
notice of assessment or reassessment issued by any taxing authority
have been so paid.
(b) Current Taxes. Adequate provisions have been made for
taxes payable for the current period for which tax returns are not yet
required to be filed and there are no agreements, waivers, or other
arrangements providing for an extension of time with respect to the
filing of any tax return by, or payment of, any tax, governmental
charge or deficiency by IMS and/or IMS Processing. Sellers are not
aware of any contingent tax liabilities or any grounds which would
prompt a reassessment including aggressive treatment of income and
expenses in filing earlier tax returns.
Section 4.5 Applicable Laws and Legal Matters
(a) Licenses. IMS and IMS Processing hold all licenses and
permits as may be requisite for carrying on the Business in the manner
in which it has heretofore been carried on, which licenses and permits
have been maintained and continue to be in good standing except where
the failure to obtain or maintain such licenses or permits would not
have a material adverse effect on the Business.
(b) Applicable Laws. IMS and IMS Processing have not been
charged with or received notice of breach of any laws, ordinances,
statutes, regulations, by-laws, orders or decrees to which they are
subject or which applies to them the violation of which would have a
material adverse effect on the Business, and, to the knowledge of
Seller, IMS and IMS Processing is not in breach of any laws, ordinances,
statutes, regulations, by-laws, orders or decrees the contravention of
which would result in a material adverse impact on the Business.
(c) Pending or Threatened Litigation. There is no material
litigation or administrative or governmental proceeding pending or
threatened against or relating to the Business, or any of the Seller
Assets, nor does Seller have any knowledge of any deliberate act or
omission of IMS and IMS Processing that would form any material basis
for any such action or proceeding.
(d) No Bankruptcy. IMS and IMS Processing have not made any
voluntary assignment or proposal under applicable laws relating to
insolvency and bankruptcy and no bankruptcy petition has been filed or
presented against IMS and/or IMS Processing and no order has been made
or a resolution passed for the winding-up, dissolution or liquidation
of IMS and/or IMS Processing.
(e) Labor Matters. IMS and IMS Processing are not party to any
collective agreement relating to the Business with any labor union or
other association of employees and no part of the Business has been
certified as a unit appropriate for collective bargaining or, to the
knowledge of Seller, has made any attempt in that regard.
Section 4.6 Execution and Performance of Agreement
(a) Authorization and Enforceability. The Sellers have the sole
legal right to execute and deliver this Agreement, and to complete the
transactions contemplated hereby and no consent of any other party or
parties is necessary to complete said transactions.
(b) No Violation or Breach. The execution and performance of
this Agreement will not:
(i) violate the charter documents of IMS and/or IMS
Processing or result in any breach of, or default under, any loan
agreement, mortgage, deed of trust, or any other agreement to which IMS
and/or IMS Processing is a party,
(ii) give any person any right to terminate or cancel
any agreement including, without limitation, Seller Material Contracts, or
any right or rights enjoyed by IMS and/or IMS Processing,
(iii) result in any alteration of IMS and/or IMS
Processing's obligations under any agreement to which IMS and/or IMS
Processing is a party including, without limitation, the Seller
Material Contracts,
(iv) result in the creation or imposition of any lien,
encumbrance or restriction of any nature whatsoever in favor of a third
party upon or against the Seller Assets,
(v) result in the imposition of any tax liability to IMS
and/or IMS Processing relating to the Seller Assets, the Seller
Shares, or
(vi) violate any court order or decree to which either IMS
and/or IMS Processing is subject.
Section 4.7 Ownership and Condition
(a) Business Assets. The Seller Assets, comprise all of the
property and assets of the Business, and neither Sellers nor any other
person, firm or corporation owns any assets used by IMS and/or IMS
Processing in operating the Business, whether under a lease, rental
agreement or other arrangement except as disclosed to Purchaser.
(b) Title. IMS and/or IMS Processing are the legal and
beneficial owner of the Seller Assets, free and clear of all mortgages,
liens, charges, pledges, security interests, encumbrances or other
claims whatsoever.
(c) No Option. No person, firm or corporation has any agreement
or option or a right capable of becoming an agreement for the purchase
of any of the Seller Assets.
(d) Material Contracts. The Seller Material Contracts listed
in Schedule 1(r) constitute all of the material contracts of IMS and/or
IMS Processing.
(e) No Default. There has not been any default in any material
obligation of IMS and/or IMS Processing or any other party to be
performed under any of Seller Material Contracts, each of which is in
good standing and in full force and effect and unamended (except as
disclosed in Schedule 4.7(e)), and neither Sellers nor IMS nor IMS
Processing are not aware of any default in the obligations of any other
party to any of the Seller Material Contracts.
(f) Insurance Policies. IMS and/or IMS Processing maintain the
public liability insurance and insurance against loss or damage to the
Seller Assets and the Business as described in Schedule 1(o) hereto.
(g) Real Property. Schedule 1(s) sets forth a complete list of
(i) all real property and interests in real property owned in fee by
IMS and/or IMS Processing (individually, a "IMS Owned Property" and
"IMS Processing Owned Property" and collectively, the "IMS and IMS
Processing Owned Properties"), and (ii) all real property and interests
in real property leased by IMS and/or IMS Processing as lessee or
lessor (individually, a "IMS Real Property Lease" and "IMS Processing
Real Property Lease" and collectively, the "IMS and IMS Processing Real
Property Leases"; and, collectively with the IMS and IMS Processing
Owned Properties, the "IMS and IMS Processing Property"). IMS and/or
IMS Processing have good and marketable fee title to all IMS and/or IMS
Processing Owned Property, free and clear of all Liens, except Liens
set forth on Schedule 1(s). The IMS andIMS Processing Property
constitute all interests in real property currently used or currently
held for use in connection with the Business. IMS and/or IMS
Processing have valid and enforceable leasehold interest under each of
the IMS and/or IMS Processing Real Property Leases, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and
subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or
in equity), and neither IMS nor IMS Processing have received any
written notice of any default or event that with notice or lapse of
time, or both, would constitute a default by IMS and/or IMS Processing
under any of the IMS and/or IMS Processing Real Property Leases. All
of the IMS and IMS Processing Property, buildings, fixtures and
improvements thereon owned or leased by IMS and/or IMS Processing are
in good operating condition and repair (subject to normal wear and
tear).
(h) Environmental Matters. The operations of IMS and IMS
Processing are in compliance with all applicable environmental laws.
IMS and IMS Processing have obtained all permits required under all
applicable environmental laws necessary to operate their business. IMS
and/or IMS Processing are not the subject of any outstanding written
order or agreement with any governmental authority or person respecting
environmental laws or any remedial action relating to environmental
laws. IMS and/or IMS Processing have not received any written
communication alleging that IMS and/or IMS Processing may be in
violation of any environmental law. There is not located at any of the
properties of IMS and/or IMS Processing any underground storage tanks
or hazardous materials, except as used in the ordinary course of
business.
(i) No Compensation on Termination. There are no agreements,
commitments or understandings relating to severance pay or separation
allowances on termination of employment of any employee of IMS and/or
IMS Processing. Neither IMS nor IMS Processing are not obliged to pay
benefits or share profits with any employee after termination of
employment except as required by law.
Section 4.8 Seller Assets - Equipment
The Seller Equipment has been maintained in a manner consistent with
that of a reasonably prudent owner and such equipment is in good
working condition.
Section 4.9 Seller Assets - Infringement
Seller does not have any knowledge of any infringement by eIMS and/or
IMS Processing of any patent, trademark, copyright or trade secret.
Section 4.10 The Business
Since the date of the Seller Financial Statements, the Business has
been carried on in the ordinary course and neither IMS nor IMS
Processing have entered into any material agreement or commitment
except in the ordinary course.
Section 4.11 No Misrepresentation
No representation or warranty of Seller in regards to IMS and/or IMS
Processing contained in this Agreement or in any schedule hereto or in
any certificate or other instrument furnished by Seller to Purchaser
pursuant to the terms hereof, contains any untrue statement of a
material fact or omits to state a material fact necessary to make the
statements contained herein or therein not misleading.
Section 4.12 Non-Merger and Survival
The representations and warranties of Seller regarding IMS and/or IMS
Processing or otherwise contained herein will be true at and as of
Closing in all material respects as though such representations and
warranties were made as of such time. Notwithstanding the completion
of the transactions contemplated hereby, the waiver of any condition
contained herein (unless such waiver expressly releases a party from
any such representation or warranty) or any investigation made by
Purchaser, the representations and warranties of Seller shall survive
the Closing.
Section 4.13 Indemnity
Seller agrees to indemnify and save harmless Purchaser from and against
any and all claims, demands, actions, suits, proceedings, assessments,
judgments, damages, costs, losses and expenses, including any payment
made in good faith in settlement of any claim (subject to the right of
Seller to defend any such claim), resulting from the breach by him of
any representation or warranty made under this Agreement or from any
misrepresentation in or omission from any certificate or other
instrument furnished or to be furnished by Seller to Purchaser
hereunder.
Section 4.14 Broker
Seller agrees to name Xxxxxxx as the broker of record in this Stock
Purchase Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Purchaser represents and warrants that as of the date hereof and as of
the Closing Date, the following representations shall be true and
correct and in full force and effect:
Section 5.1 Organization and Good Standing
Inseq is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has the corporate
power and authority to operate and to carry on its business as now
being conducted. Purchaser is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction where
qualification as a foreign corporation or otherwise is required to
conduct the Business.
Section 5.2 Authority, Approvals and Consents
Purchaser has the corporate power and authority to enter into this
Agreement and to perform their obligations hereunder. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized and validly
approved by the Board of Directors of Purchaser and by their respective
stockholders and no other corporate or other proceedings on the part
of Purchaser are necessary to authorize and approve this Agreement and
the transactions contemplated hereby. Purchaser hereby expressly
represents that they have fully and properly complied with all aspects
of applicable Delaware corporate law in entering into this Agreement
and for consummating the transactions contemplated hereunder. This
Agreement has been duly executed and delivered by, and constitutes a
valid and binding obligation of Purchaser , enforceable against
Purchaser in accordance with its terms.
Section 5.3 Consents and Approvals
No consent, approval, or authorization of, or declaration, filing, or
registration with, any Governmental Entity will be required to be made
or obtained by Purchaser in connection with the execution, delivery,
and performance of this Agreement and the consummation of the
transactions contemplated hereby.
Section 5.4 Binding Nature
This Agreement shall be, when duly executed and delivered, a legally
binding obligation of the Seller enforceable in accordance with its
terms.
Section 5.5 Non-Merger and Survival
The representations and warranties of Purchaser contained herein will
be true at and as of Closing in all material respects as though such
representations and warranties were made as of such time.
Notwithstanding the completion of the transactions contemplated hereby,
the waiver of any condition contained herein (unless such waiver
expressly releases a party from any such representation or warranty) or
any investigation made by Seller, the representations and warranties of
Purchaser shall survive the Closing.
Section 5.6 Indemnity
Purchaser agrees to indemnify and save harmless Seller from and against
any and all claims, demands, actions, suits, proceedings, assessments,
judgments, damages, costs, losses and expenses, including any payment
made in good faith in settlement of any claim (subject to the right of
Purchaser to defend any such claim), resulting from the breach by it of
any representation or warranty made under this Agreement or from any
misrepresentation in or omission from any certificate or other
instrument furnished or to be furnished by Purchaser to Seller
hereunder.
ARTICLE VI
COVENANTS
Section 6.1 Conduct of Business Pending the Closing.
The Seller hereby covenants, represents and warrants to the Purchaser
that pending completion of the Closing unless otherwise agreed to in
writing by the Purchaser:
(a) IMS and IMS Processing shall not engage in any sale, enter
into any transaction, contract or commitment, incur liability or
obligation or make any disbursement not in the ordinary course of the
Business, including, without limitation, the payment, of any kind and
in any amount, to the Seller's shareholders (or their affiliates), and
the declaration and/or payment of any dividends, purchase, redemption
or other distributions with respect to the Seller's capital stock;
(b) IMS and IMS Processing shall carry and continue in force
through the Closing, all existing insurance coverages including without
limitation to theft, liability and other insurance as set forth in
Schedule 6.1(b). For any loss occurring between the date of this
Agreement and the Closing Date, the parties rights and liabilities
thereunder shall be determined as follows:
(i) Casualty Prior to Closing. The risk of any loss,
destruction or other damage, other than ordinary wear and tear, between
the date of execution hereof and the completion of the Closing, shall
be solely that of the Seller. If before the completion of the Closing,
any of the Seller's machinery or equipment which is the subject of this
Agreement is damaged by fire, casualty or any other cause: (A) if the
replacement or repair cost is $10,000 or more, the Purchaser may
either: (x) terminate this Agreement without liability or (y) complete
the Closing hereunder in which event the Purchaser shall be entitled to
a credit to the insurance proceeds arising with respect to such damage,
and (B) if such replacement or repair cost, as the case may be, is less
than $10,000, the Purchaser shall be obligated to complete the Closing
hereunder and shall be entitled to the insurance proceeds arising with
respect to such damage.
(c) the Seller shall not amend, modify or terminate any
agreement related to the Business to which it is a party except in the
ordinary course of business;
(d) the Seller shall use its best efforts to preserve the
Business and maintain all of its equipment and records in good order
and keeping the same available for the Purchaser and further to
preserve for the Purchaser the goodwill of suppliers, customers and
others having business relationships with the Seller; and,
(e) the Seller shall give the Purchaser prompt notice of all
events prior to Closing which may materially relate to any term of this
Agreement.
Section 6.2 Access and Information
The Seller shall afford to the Purchaser and to the Purchaser's
financial advisors, legal counsel, accountants, consultants, financing
sources and other authorized representatives reasonable access during
normal business hours throughout the period prior to the Closing Date
to the books, records, properties and personnel of the Seller, the
Selling Subsidiaries and the Transferred Subsidiaries relating to the
Business and, during such period, shall furnish reasonably promptly to
the Purchaser such information as the Purchaser reasonably may request.
All such information disclosed to the Purchaser shall remain subject to
the Confidentiality Agreement. Without limitation of the other provisions
of this Section 6.2, the Seller shall permit the Purchaser or its
consultant, in accordance with a mutually acceptable confidentiality
agreement entered into by the Purchaser, the Seller and, if relevant,
the Purchaser's consultant, to migrate any data concerning the Business
which the Purchaser shall deem appropriate onto a server maintained by
the Purchaser or its consultant but using the Purchaser's software
programs. It is the Purchaser's intent that if the Closing shall occur,
the Purchaser shall have immediate access to such migrated data in order
to operate the Business and comply with the Purchaser's reporting
obligations for the combined operations of the Purchaser and the
Business under applicable securities laws. If the Closing shall not
occur, such consultant shall destroy all of such migrated data in
compliance with such confidentiality agreement.
Section 6.3 Additional Matters
Subject to the terms and conditions herein provided, each of the
parties hereto agrees to use all reasonable best efforts to take, or
cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions
contemplated by this Agreement.
Section 6.4 Additional Financial Information
On or prior to the Closing Date, the Purchaser shall have received the
Seller Financial Statements. The Seller will provide the Purchaser with
monthly Financial Statements and income statements for the Business as
prepared in the ordinary course and consistent with past practice by
the finance and accounting staff of the Business for each month after
June 30, 2005 until the Closing for which the Seller has closed the
accounting books of the Business, which statements shall be delivered
within forty-five (45) days after each such closing.
Section 6.5 Indemnification
The Parties shall indemnify each other as set forth below:
(i) Seller shall indemnify and hold harmless
Purchaser and each of its affiliates or other related entities from
and against any and all losses, damages, liabilities and claims
(including legal fees and costs) arising out of, based upon or
resulting from any inaccuracy as of the date hereof or as of the
Closing Date of any representation or warranty of Seller which are
contained in or made pursuant to this Agreement or any breach by
Seller of any obligations contained in or made pursuant to this
Agreement including, without limitation, with respect to all
liabilities, commitments and obligations of Seller.
(ii) Purchaser shall indemnify and hold harmless
Seller from any and all losses, damages, liabilities and claims
arising out of, based upon or resulting from any inaccuracy as of the
date hereof or as of the Closing Date of any representation or warranty
of Purchaser which is contained in or made pursuant to this Agreement
or any breach by Purchaser of any of its obligations contained in or
made pursuant to this Agreement.
(iii) As a material inducement to Purchaser entering
into and consummating the transaction contemplated hereunder, Seller
does hereby agree to hold Purchaser completely free and harmless and
indemnify Purchaser from and against any and all claims which Seller
has or may have against any stockholder, member, director, officer,
agent or other Person related to Seller whatsoever. Purchaser shall
have no obligation whatsoever to participate in any litigation or other
action between Seller and any stockholder, member, director, officer,
agent or other Person related to Seller , and if Purchaser is forced
to participate in any such action, Seller shall be solely responsible
for any and all costs incurred by Purchaser in connection therewith,
including, without limitation, all economic costs incurred by
Purchaser and payment of reasonable attorneys fees and costs.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 Conditions Precedent in Favor of the Seller
The obligation of Seller to effect the transactions contemplated by
this Agreement shall be subject to the satisfaction or waiver at or
prior to the Closing Date of the following additional conditions:
(a) the Purchaser shall have performed in all material respects
its obligations under this Agreement required to be performed by the
Purchaser at or prior to the Closing Date; and,
(b) each of the representations and warranties of the Purchaser
contained in this Agreement shall be true and correct as of the Closing
Date as if made at and as of such date, except where the failure of
such representation and warranty to be true and correct would not have
a material adverse effect on the Purchaser or the transactions
contemplated by this Agreement.
The conditions precedent set out in this section are inserted for the
exclusive benefit of Seller and any such condition may be waived in
whole or in part by Seller at or prior to the Closing by delivering to
Purchaser a written waiver to that effect signed by Seller. In the
event that the conditions precedent set out in this section are not
satisfied on or before the Closing, Seller shall be released from all
obligations under this Agreement.
Section 7.2 Conditions Precedent in Favor of the Purchaser
The obligation of the Purchaser to effect the transactions contemplated
by this Agreement shall be subject to the satisfaction or waiver at or
prior to the Closing Date of the following additional conditions:
(a) the Seller shall have performed in all material respects
its obligations under this Agreement required to be performed by the
Seller at or prior to the Closing Date;
(b) each of the representations and warranties of the Seller
contained in this Agreement shall be true and correct as of the Closing
Date as if made at and as of such date;
(c) the Purchaser and Xxxxxx Xxxxxxxxx, Xxxxx Xxxxxxx and Xxxxx
Xxxxxxxxx shall have entered into a mutually satisfactory employment
agreement (attached hereto as Exhibit B);
(d) the successful completion by the Purchaser of that level of
due diligence the Purchaser deems reasonably required;
(g) the Sellers' Assets are fee and clear of all perfected,
filed and recorded liens, charges and encumbrances except those noted
in Schedule 2.2. The instruments of assignment and transfer of the
Acquisition Shares to the Purchaser will comply in all respects with
the terms of this Agreement and are sufficient to vest in the Purchaser
all of the Sellers' right, title and interest in respect to the
Acquisition Shares being sold and/or transferred hereunder; and,
(h) Opinion of Sellers' Counsel. Purchaser shall have been
furnished with the opinion of Xxxxx Xxxxxxx, Esq., attorneys at law,
counsel for Seller, dated the Closing Date, in form and substance
satisfactory to Purchaser and Purchasers' counsel, as to the following
(i) the good standing and authority of Seller to carry on the Business
and own the Assets, (ii) that all appropriate corporate or business
entity actions necessary to complete the transactions contemplated
hereunder have been taken, (iii) Seller's proper execution and
delivery of this Agreement, the schedules hereto and any other
documents required or necessary hereunder and the validity and binding
legal effect thereof and of Seller's obligations hereunder, (iv)
Seller's good and marketable title to the Assets, (v) disclosure of
litigation, proceedings or investigations pending or threatened against
Seller or which Seller's counsel is aware, (vi) that this Agreement
does not violate any other agreement of which Seller's counsel is
aware, and (vii) that the documents conveying title to Seller's
interest in the Assets are valid and legally binding. In rendering the
foregoing opinions, such counsel may rely as to factual matters upon
certificates or other documents furnished by officers and directors of
Purchaser and by government officials and upon such other documents
and data as such counsel deems appropriate as a basis for their
opinions. Such counsel may specify the jurisdiction or jurisdictions
in which they are admitted to practice, that they are not admitted to
the Bar in any other jurisdiction or experts in the law of any other
jurisdiction and that such opinions are limited accordingly. If such
counsel is not authorized to practice law in the New Jersey, Purchaser
may require Seller's counsel to obtain an opinion from counsel
authorized to practice law in such jurisdiction(s).
The conditions precedent set out in this section are inserted for the
exclusive benefit of Purchaser and any such condition may be waived in
whole or in part by Purchaser at or prior to the Closing by delivering
to Seller a written waiver to that effect signed by Purchaser. In the
event that the conditions precedent set out in this section are not
satisfied on or before the Closing, Purchaser shall be released from
all obligations under this Agreement.
Section 7.3 Nature of Conditions Precedent
The conditions precedent set forth in this Article are conditions of
completion of the transactions contemplated by this Agreement and are
not conditions precedent to the existence of a binding agreement. Each
party acknowledges receipt of the sum of $1.00 and other good and
valuable consideration as separate and distinct consideration for
agreeing to the conditions of precedent in favor of the other party or
parties set forth in this Article.
ARTICLE VIII
TERMINATION, AMENDMENT, AND WAIVER
Section 8.1 Termination Events
This Agreement may be terminated at any time prior to the Closing Date
as follows:
(a) by mutual written agreement of the Purchaser and the
Seller;
(b) by the Seller (provided that the Seller is not then in
material breach of any representation, warranty, covenant or other
agreement contained herein for which the Purchaser shall have
previously notified the Seller), if there has been a breach by the
Purchaser of any of its representations, warranties, covenants or
agreements contained in this Agreement, or any such representation and
warranty shall have become untrue, and such breach or condition has not
been promptly cured within 30 days following receipt by the Purchaser
of written notice of such breach;
(c) by the Purchaser (provided that the Purchaser is not then
in material breach of any representation, warranty, covenant or other
agreement contained herein for which the Seller shall have previously
notified the Purchaser), if there has been a breach by the Seller of
any of its representations, warranties, covenants or agreements
contained in this Agreement, or any such representation and warranty
shall have become untrue, and such breach or condition has not been
promptly cured within 30 days following receipt by the Seller of
written notice of such breach; and,
(d) by the Purchaser (provided that the Purchaser is not then
in material breach of any representation, warranty, covenant or other
agreement contained herein) at or prior to the Closing Date, if the
Purchaser is not satisfied with its due diligence review of the Business.
Section 8.2 Effect of Termination and Abandonment
In the event of termination of this Agreement pursuant to this Article
VIII, written notice thereof shall be given as promptly as practicable
to the other party to this Agreement and this Agreement shall terminate
and the transactions contemplated hereby shall be abandoned, without
further action by any of the parties hereto. If this Agreement is
terminated as provided herein (a) there shall be no liability or
obligation on the part of the Seller, the Purchaser, or their
respective officers, directors and Affiliates, and all obligations of
the parties shall terminate, except for (i) the obligations of the
parties pursuant to the Confidentiality Agreement, and (ii) that a
party that is in material breach of its representations, warranties,
covenants, or agreements set forth in this Agreement shall be liable
for damages occasioned by such breach, including without limitation any
expenses, including the reasonable fees and expenses of attorneys,
accountants and other agents, incurred by the other party in connection
with this Agreement and the transactions contemplated hereby; provided,
however, that the Purchaser shall not be deemed to be in material
breach of this Agreement solely by reason of its inability to satisfy
one or more of the conditions set forth in Section 7.2 if the Purchaser
is attempting to satisfy such conditions in good faith.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Expenses
Each of the Parties hereto shall pay its own fees and expenses
(including the fees of any attorneys, accountants, or others engaged by
such Party) in connection with this Agreement and the transactions
contemplated hereby whether or not the transactions contemplated hereby
are consummated.
Section 9.2 Paragraph Headings and Language Interpretations
The paragraph headings contained herein are for reference only and
shall not be considered substantive provisions of this Agreement. The
use of a singular or plural form shall include the other form, and the
use of a masculine, feminine or neuter gender shall include the other
genders, as applicable.
Section 9.3 Notices
All notices, claims, demands, and other communications hereunder shall
be in writing and shall be deemed given upon (a) confirmation of
receipt of a facsimile transmission, (b) confirmed delivery by a
standard overnight carrier or when delivered by hand, or (c) the
expiration of five (5) business days after the day when mailed by
registered or certified mail (postage prepaid, return receipt
requested), addressed to the respective parties at the following
addresses (or such other address for a party as shall be specified by
like notice):
(a) If to the Purchaser, to:
INSEQ Corporation
000 Xxxxxx Xxxx., Xxxxx 000
Xxxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx Xxxxxxx, President and Chief Financial Officer
with a copy to:
Xxxxx Xxxxxxxx, Esq.
Sonageri & Fallon, PC
000 Xxxxxxxxxx Xxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
and,
(b) If to the Seller, to:
Independent Metal Sales, Inc.
0000 Xxxx Xxxx Xxxxxx
Hainesport Industrial Park
Hainesport, New Jersey 08036
Attn: Xxxxxx Xxxxxxxxx, President
with a copy to:
Xxxxx X. Xxxxxxx, Esq.
000X Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Section 9.4 Assignments
This Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the Parties hereto and their respective
successors and permitted assigns; provided, however, that neither this
Agreement nor any of the rights, interests, or obligations hereunder
may be assigned by any of the Parties hereto without the prior written
consent of the other Party, except that this Agreement and such rights,
interests and obligations may be assigned by Purchaser to one (1) or
more Affiliates. Purchaser agrees that any such assignment shall not
relieve Purchaser of its obligations hereunder.
Section 9.5 Entire Agreement
This Agreement (including the Schedules and any Exhibits hereto)
embodies the entire agreement and understanding of the Parties with
respect to the transactions contemplated hereby and supersedes all
prior written or oral commitments, arrangements, understandings and
agreements with respect thereto. There are no restrictions,
agreements, promises, warranties, covenants or undertakings with
respect to the transactions contemplated hereby other than those
expressly sat forth herein.
Section 9.6 Modifications, Amendments and Waivers
At any time prior to the Closing, to the extent permitted by law, (i)
Purchaser and Seller may, by written agreement, modify, amend or
supplement any term or provision of this Agreement and (ii) any term or
provision of this Agreement may be waived in writing by the Party which
is entitled to the benefits thereof.
Section 9.7 Counterparts
This Agreement may be executed in two (2) or more counterparts, all of
which shall be considered one (1) and the same agreement and each of
which shall be deemed an original. Each Party shall receive a fully
signed copy of this Agreement.
Section 9.8 Governing Law
This Agreement shall be governed by the laws of the State of New Jersey
and the United States of America (regardless of the laws that might be
applicable under principles of conflicts of law or international law)
as to all matters including, but not limited to, matters of validity,
construction, effect and performance.
Section 9.9 Accounting Terms
All accounting terms used herein which are not expressly defined in
this Agreement shall have the respective meanings given to them in
accordance with generally accepted accounting principles on the date
hereof.
Section 9.10 Severability
If any one (1) or more of provisions of this Agreement shall be held to
be invalid, illegal or unenforceable, the validity, legality or
enforceability of the remaining provisions of this Agreement shall not
be affected thereby. To the extent permitted by applicable law, each
party waives any provision of law which renders any provision of this
Agreement invalid, illegal or unenforceable in any respect.
Section 9.11 Specific Performance
Purchaser and Seller recognize that any breach of the terms this
Agreement may give rise to irreparable harm for which money damages
would not be an adequate remedy, and accordingly agree that any non-
breaching party shall be entitled to enforce the terms of this
Agreement by a decree of specific performance without the necessity of
proving the inadequacy as a remedy of money damages. If specific
performance is elected as a remedy hereunder, the electing Party shall
be deemed to have waive any claim for other damages, except reasonable
attorneys fees, costs of suit and expenses related to the enforcement
of specific performance.
Section 9.12 Consent to Jurisdiction
Seller and Purchaser hereby submit and consent to the exclusive venue
and jurisdiction of the Superior Court of the State of New Jersey, , in
respect of the interpretation and enforcement of the provisions of this
Agreement, and hereby waive and agree not to assert as a defense in any
action, suit or proceeding for the interpretation or enforcement of
this Agreement, that it is not subject thereto or that such action,
suit or proceeding may not be brought or is not maintainable in said
courts or that this Agreement may not be enforced in or by said courts
or that its property is exempt or immune from execution, that the suit,
action or proceeding is brought in an inconvenient forum, or that the
venue of the suit, action or proceeding is improper. Seller and
Purchaser agree that service of process may be made in any manner
permitted by the laws of the State of New Jersey or the federal laws of
the United States in any such action, suit or proceeding against Seller
or Purchaser with respect to this Agreement, and Seller and Purchaser
hereby irrevocably designate and appoint Xxxxx X. Xxxxxxx, Esq., and
Xxxxx Xxxxxxxx, Esq., as their respective authorized agents upon which
process may be served in any such action, suit or proceeding, it being
understood that such appointment and designation shall become effective
without any further action on the part of Seller or Purchaser. Service
of process upon such authorized agent shall be deemed, in every
respect, effective service of process upon Seller or Purchaser and
shall remain effective until Seller or Purchaser shall appoint another
agent for service or process acceptable to the other Party. Seller
and Purchaser agree that final judgment (with all right of appeal
having expired or been waived) against it in any such action, suit or
proceeding shall be conclusive and that the other Party is entitled to
enforce such judgment in any other jurisdiction by suit on the
judgment, a certified copy of which shall be conclusive evidence of the
fact and amount of indebtedness arising from such judgment.
Section 9.13 U.S. Currency
All payments made under this Agreement at any time shall be made in the
lawful currency of the United States of America.
Section 9.14 Risk of Loss
(i) The risk of loss or damage to the Assets
to be sold to Purchaser hereunder shall be borne by Seller until title or
right to possession shall have passed to Purchaser on the Closing Date.
(ii) If, prior to the Closing Date, any of the
Assets shall be damaged or destroyed, the Purchase Price shall be
adjusted for the value of the Assets so damages or destroyed and in
such case Seller shall be solely entitled to any insurance proceeds
paid or payable thereon.
(iii) If, prior to the Closing Date, any of
the Assets shall be damaged or destroyed or taken in condemnation
proceedings or if the Business is materially affected to an extent
which will materially adversely affect operations similar to those
heretofore carried on by Seller, Purchaser, at its option, may (A)
elect to become entitled to any proceeds of condemnation or insurance
with respect to such loss or (B) cancel this Agreement. If so canceled,
this Agreement will be of no force and effect, and in such event no Party
hereto, or any of its officers, directors, employees, agents, consultants,
stockholders or principals shall have any further liability obligation
hereunder with respect thereto other than as specified herein.
Section 9.15 Transfer Documents
Seller agrees that the sale and transfer hereunder of the Assets shall
be made on the Closing Date, as of the Closing Date, by bills of sale,
assignments or other instruments of transfer as shall be appropriate to
vest in Purchaser good, clear and marketable title to the Assets
subject to liabilities expressly assumed by Purchaser pursuant to
Section 2.3. From and after the Closing Date, upon the request of
Purchaser, Seller shall do, execute, acknowledge and deliver all such
further acts, assignments, transfers, instruments and conveyances as
may reasonably be required to convey to and vest in Purchaser and
protect its right, title and interest in and enjoyment of any of the
Assets, and as may be appropriate to otherwise carry out the
transactions contemplated by this Agreement. To the extent that the
assignment of any of the Assets shall require the consent of other
parties, this Agreement shall not constitute an assignment or agreement
to assign the same if such action would constitute a breach of any
contract or agreement relating to any of the Assets. Each of Seller
and Purchaser agree to use its Best Efforts to obtain the consents of
other parties to the sale and assignment hereunder to Purchaser. If
any such consent is not obtained, Seller and Purchaser shall cooperate
with each other in a reasonable arrangement designed to provide for
Purchaser the benefits thereof and to permit the performance of
remaining unfulfilled obligations thereunder by Purchaser. Failure of
a Party to cooperate shall be actionable to the extent that said Party
is responsible for act or omission complained of by the other Party.
Section 9.16 Allocation of Purchase Price
The Parties shall allocate the Purchase Price as their respective
accountants shall mutually determine and shall execute and file
identical IRS Forms 8594, Asset Acquisition Statement under Section
1060, of the Internal Revenue Code of 1986, as amended.
Section 9.17 THE PARTIES ACKNOWLEDGE THAT THEY HAVE EACH RECEIVED
A COPY OF THIS AGREEMENT, THAT THEY HAVE READ AND FULLY UNDERSTAND THIS
AGREEMENT, AND THAT THEY HAVE BEEN ADVISED TO SEEK AND HAVE EITHER
SOUGHT OR WAIVED INDEPENDENT LEGAL COUNSEL OF THEIR CHOICE TO AID IN
THEIR UNDERSTANDING HEREOF.
Section 9.18 Binding Effect
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, successors, legal
representatives and assigns.
Section 9.19 Parties in Interest
Nothing in this Agreement, express or implied, is intended to confer
upon any Person not a Party to this Agreement any rights or remedies of
any nature whatsoever under or by reason of this Agreement.
Section 9.20 Furnishing Information; Announcements
Sellers shall not issue any press releases or otherwise make any
statement, public or otherwise, to any third party with respect to the
transactions contemplated hereby without the prior written consent of
Purchaser. Any notification of Sellers' employees of the
transactions contemplated hereby shall be subject to prior approval by
Purchaser. Any notices or other information to be disseminated shall
be submitted to Purchaser prior to distribution or dissemination.
Section 9.21 Force Majeure
Neither Party hereto shall be liable for failure to perform any
obligation under this Agreement if such failure to perform is caused by
the occurrence of any contingency beyond the reasonable control of such
Party, including, without limitation, fire, flood, strike or other
industrial disturbance, failure of transport, accident, war, riot,
insurrection, act of God or order of governmental agency or act of
terrorism. Performance shall be resumed as soon as is possible after
cessation of such cause. However, if such inability to perform
continues for more than Ninety (90) days, the other Party may terminate
this Agreement without penalty and without further notice.
[THIS SPACE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF the parties have executed this Agreement effective
as of the day and year first above written.
INSEQ CORPORATION
By: /S/ Xxxxx Xxxxxxxx
-------------------
Xxxxx Xxxxxxxx
Chairman
SELLERS
By: /S/ Xx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx
Individually
By: /S/ Xxx Xxxxxxx
-------------------
Xxxxx Xxxxxxx
Individually
