STOCK PURCHASE AGREEMENT by and among DIVERSIFIED PRIVATE EQUITY CORPORATION and MERCARI COMMUNICATIONS GROUP, LTD. and KANOUFF, LLC and
Exhibit
10.1
by
and among
DIVERSIFIED
PRIVATE EQUITY CORPORATION
and
MERCARI
COMMUNICATIONS GROUP, LTD.
and
▇▇▇▇▇▇▇,
LLC
and
▇▇▇▇▇▇▇▇▇
FAMILY PARTNERS, LTD.
DATED
AS OF NOVEMBER 9, 2009
This
Stock Purchase Agreement (“Agreement”) dated as of November 9, 2009, by and
among Diversified Private
Equity Corporation, a Delaware corporation (“DPEC”), and Mercari Communications Group, Ltd.,
a Colorado corporation (“Mercari”), and ▇▇▇▇▇▇▇, LLC, a Colorado
limited liability company (“▇▇▇▇▇▇▇”), and ▇▇▇▇▇▇▇▇▇ Family Partners, Ltd.,
a Colorado corporation (“▇▇▇▇▇▇▇▇▇”) (▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ to be
referred to as “Selling Stockholders”).
WHEREAS,
DPEC desires to acquire certain shares of Common Stock of Mercari from Mercari
(“Issued Stock”) and certain outstanding shares of Common Stock of Mercari from
the Selling Stockholders (“Purchased Stock”); and
WHEREAS,
Mercari desires to issue and sell the Issued Stock to DPEC and Selling
Stockholders desire to sell the Purchased Stock to DPEC upon the terms and
conditions of this Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants, representations,
warranties, and agreements contained herein, and intending to be legally bound
hereby, the parties agree as follows:
ARTICLE
I
AGREEMENT TO PURCHASE AND
SELL STOCK
1.1 Agreement Relating to Issued
Stock. At the Closing (as defined below), Mercari will issue
43,822,001 shares (“Issued Stock”) of its Common Stock par value $0.00001 a
share (“Mercari Common Stock”) to DPEC and DPEC will purchase the Issued Stock
from Mercari for a purchase price of $0.001 per share (“Issued Stock Price”) of
the Issued Stock.
1.2 Agreement Relating to
Purchased Stock. At the Closing, each Selling Stockholder,
severally and not jointly, shall sell and deliver to DPEC and DPEC shall
purchase from each Selling Stockholder 200 shares of Mercari Common Stock held
by each Selling Stockholder (“Purchased Stock”), for a total purchase price from
each Selling Stockholder of $180,000 (“Purchased Stock
Price”). Mercari, DPEC, and Selling Stockholders are parties to a
Letter of Intent dated November 26, 2008, as subsequently modified and
extended (“Letter of Intent”). Pursuant to the Letter of Intent, DPEC
has deposited a total of $75,000.00 (“Stock Deposit”) with each Selling
Stockholder. At the Closing, the Stock Deposit will be retained by
Selling Stockholders and applied to the Purchased Stock Price for each Selling
Stockholder and the balance of the Purchased Stock Price of $105,000.00
(“Purchased Stock Balance”) will be payable to each Selling
Stockholder.
ARTICLE
II
CLOSING
The
closing of the transactions contemplated by this Agreement (“Closing”) will take
place contemporaneously with the execution of this Agreement in accordance with
arrangements reasonably satisfactory to Mercari and DPEC. At the
Closing, DPEC will wire transfer the Issued Stock Price to Berenbaum Weinshienk
PC’s trust account to be held by it for the benefit of Mercari, and Mercari will
issue the Issued Stock and instruct its transfer agent to deliver to DPEC an
electronic copy of the stock certificate(s) for the Issued Stock with the actual
certificate(s) to be delivered to DPEC on the day after the
Closing. At the Closing, DPEC will pay the Purchased Stock Balance to
each of the Selling Stockholders by certified or bank cashier’s check or by wire
transfer into an account or accounts designated by each Selling Stockholder and
each Selling Stockholder will deliver to DPEC a certificate or certificates
representing at least the number of shares of Purchased Stock being sold by each
Selling Stockholder, together with an assignment executed by each Selling
Stockholder assigning to DPEC the number of shares of Purchased Stock being sold
by each Selling Stockholder to DPEC.
ARTICLE
III
REPRESENTATIONS AND
WARRANTIES OF DPEC
Except
as disclosed on the schedules prepared by DPEC (the “DPEC Schedules”), DPEC
hereby represents and warrants to, and covenants with Mercari and the Selling
Stockholders, as follows:
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3.1 Organization and
Qualification. DPEC is a corporation duly incorporated, validly
existing, and in good standing under the laws of the State of Delaware and has
the requisite corporate power and authority to own, lease, and operate its
assets and properties and to carry on its business as it is now being or
currently planned by DPEC to be conducted. DPEC is in possession of
all franchises, grants, authorizations, licenses, permits, easements, consents,
certificates, approvals, and orders (“Approvals”) necessary to own, lease, and
operate the properties it purports to own, operate, or lease and to carry on its
business as it is now being or currently planned by DPEC to be conducted, except
where the failure to have such Approvals could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect (as defined
in Section 11.2(b)) on DPEC. DPEC is duly qualified or licensed
to do business as a foreign corporation and is in good standing in each
jurisdiction where the character of the properties owned, leased, or operated by
it or the nature of its activities makes such qualification or licensing
necessary, except for such failure to be so duly qualified or licensed and in
good standing that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on DPEC.
3.2 Subsidiaries and
Affiliate. Set forth in Schedule 3.2
hereto is a true and complete list of all Subsidiaries of DPEC, stating, with
respect to each Subsidiary, its jurisdiction of incorporation or organization,
date of incorporation or organization, capitalization and equity
ownership. Each Subsidiary and InvestProperty Group, LLC, a Delaware
limited liability company (“Affiliate”), is duly incorporated or organized,
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation or organization, has all requisite corporate power and authority
to own, lease, and operate its properties and to carry on its businesses as they
are now being conducted, and each Subsidiary and Affiliate is qualified to do
business as a foreign corporation in any other jurisdiction in which it is so
required to be qualified, except for such failures to be so duly qualified or
licensed and in good standing that could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on DPEC, a Subsidiary,
or the Affiliate.
For
purposes of this Agreement, (i) the term “Subsidiary” shall
mean any Person in which DPEC or any Subsidiary or Affiliate, directly or
indirectly, owns beneficially securities or interests representing more than 50%
of (x) the aggregate equity or profit interests, or (y) the combined voting
power of voting interests ordinarily entitled to vote for management or
otherwise, and (ii) the term “Person” shall mean
and include an individual, a corporation, a partnership (general or limited), a
joint venture, an association, a limited liability company, a trust, or any
other organization or entity, including a government or political subdivision or
an agency or instrumentality thereof.
3.3 Authority Relative to this
Agreement. DPEC has all necessary corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder and, to consummate the transactions contemplated hereby
(“Transactions”). The execution and delivery of this Agreement and
the consummation by DPEC of the transactions contemplated hereby have been duly
and validly authorized by all necessary corporate action on the part of DPEC
(including the approval by its Board of Directors in conformance with the
directors’ fiduciary duties), and no other corporate proceedings on the part of
DPEC is necessary to authorize this Agreement or to consummate the transactions
contemplated hereby (other than the transactions referred to in
Section 10.1(b)). This Agreement has been duly and validly
executed and delivered by DPEC and, assuming the due authorization, execution,
and delivery thereof by the other parties hereto, constitutes the legal and
binding obligation of DPEC, enforceable against DPEC in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization, or
other similar laws affecting the enforcement of creditors’ rights generally and
by general principles of equity and public policy.
3.4 No Conflict; Required
Filings and Consents.
(a) The
execution and delivery of this Agreement by DPEC does not, and the performance
of this Agreement by DPEC shall not: (i) conflict with or
violate DPEC’s Certificate of Incorporation or Bylaws; (ii) conflict with
or violate any Legal Requirements; or (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or materially impair DPEC’s rights or alter the
rights or obligations of any third party under, or give to others any rights of
termination, amendment, acceleration, or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of DPEC
pursuant to, any material contract of DPEC.
(b) The
execution and delivery of this Agreement by DPEC does not, and the performance
of its obligations hereunder will not, require any consent, approval,
authorization, or permit of, or filing with or notification to, any court,
administrative agency, commission, governmental or regulatory authority,
domestic or foreign (a “Governmental
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Entity”),
except (i) for applicable requirements, if any, of the Securities Act of 1933,
as amended (“Securities Act”), the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), state securities laws (“Blue Sky Laws”), and the rules and
regulations thereunder, and appropriate documents with the relevant authorities
of other jurisdictions in which DPEC is qualified to do business, and (ii) where
the failure to obtain such consents, approvals, authorizations, or permits, or
to make such filings or notifications, would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on DPEC or,
after the Closing, Mercari, or prevent consummation of the Transactions or
otherwise prevent the parties hereto from performing their obligations under
this Agreement.
3.5 Litigation. There
are no claims, suits, actions, or proceedings pending or, to the knowledge of
DPEC, threatened against DPEC or any Subsidiary or Affiliate, before any court,
governmental department, commission, agency, instrumentality, or authority, or
any arbitrator.
3.6 Brokers; Third Party
Expenses. DPEC and the Subsidiaries and Affiliate have not
incurred, nor will they incur, directly or indirectly, any liability for
brokerage, finders’ fees, agent’s commissions, or any similar charges in
connection with this Agreement or any transactions contemplated hereby, nor will
DPEC, the Subsidiaries, the Affiliate, or Mercari be required to make any
payment or issue any shares of common stock, options, warrants, or other
securities of DPEC, the Subsidiaries, the Affiliate, or Mercari to any third
party as result of the Transactions due to the provisions of any agreement
entered into by DPEC, the Subsidiaries, or the Affiliate relating to brokerage,
finders’ fees, agent’s commissions, or similar agreements.
3.7 Purchase for DPEC’s Own
Account. DPEC is acquiring the Issued Stock and Purchased
Stock (“Securities”) and, in the future, will purchase any securities it has a
right or obligation to purchase hereunder (“Additional Securities”) for its own
account, for investment, and not with a view to, or for sale in connection with,
any distribution thereof, and with no present intention of disposing of any
thereof. DPEC acknowledges that the Securities and Additional
Securities have not been registered under the Securities Act or qualified under
applicable state securities laws and confirms to Mercari and the Selling
Stockholders that it understands the restrictions on re-sale of the Securities
and Additional Securities imposed by such laws, including Rule 144
promulgated under the Securities Act and that the Securities may only be sold in
limited circumstances.
3.8 Legend. DPEC
acknowledges that Mercari will place a legend substantially the same as the
following and any other legend required by law on the Issued Stock, Purchased
Stock, and any Additional Securities:
THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE LAW, AND NO INTEREST
THEREIN MAY BE SOLD OR OTHERWISE TRANSFERRED, PLEDGED, OR HYPOTHECATED IN THE
ABSENCE OF SUCH REGISTRATION AND QUALIFICATION WITHOUT AN OPINION OF LEGAL
COUNSEL THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
Mercari
shall, upon request of the holder of a certificate bearing the foregoing legend
and the surrender of such certificate, issue a new certificate without the
foregoing legend if: (i) the stock evidenced by such certificate
has been effectively registered under the Securities Act and sold in accordance
with such registration; or (ii) the holder shall have delivered to Mercari
a written legal opinion reasonably acceptable to Mercari to the effect that the
restrictions set forth herein are no longer required or necessary under any
federal or state law or regulation.
3.9 Accredited
Investor. DPEC is an “Accredited Investor” under the
Securities Act. DPEC has such knowledge and experience in financial
and business matters that it is capable of evaluating the risks of its
investment in the Securities of Mercari and is able to bear the economic risks
of such investment. DPEC believes that it has received all
information it considers necessary or appropriate for deciding whether to
acquire the Securities. DPEC has had an opportunity to ask questions
and receive answers from the Selling Stockholders regarding this investment and
believes it has made an informed judgment with respect to its investment in the
Securities of Mercari.
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ARTICLE
IV
REPRESENTATIONS AND
WARRANTIES OF MERCARI
Except
as disclosed on the schedules prepared by Mercari (the “Mercari Schedules”),
Mercari represents and warrants to, and covenants with, DPEC as
follows:
4.1 Organization and
Qualification.
(a) Mercari
is a corporation duly incorporated, validly existing, and in good standing under
the laws of the State of Colorado and has the requisite corporate power and
authority to own, lease, and operate its assets and properties and to carry on
its business as it is now being or currently planned by Mercari to be
conducted. Mercari is in possession of all Approvals necessary to
own, lease, and operate the properties it purports to own, operate, or lease and
to carry on its business as it is now being or currently planned by Mercari to
be conducted, except where the failure to have such Approvals could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Mercari. Complete and correct copies of Mercari’s
Articles of Incorporation and Bylaws, as amended and currently in effect
(“Mercari Charter Documents”), have been made available to
DPEC. Mercari is not in violation of any of the provisions of the
Mercari Charter Documents.
(b) Mercari
is duly qualified or licensed to do business as a foreign corporation and is in
good standing, in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary, except for such failures to be so duly
qualified or licensed and in good standing that could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on
Mercari.
4.2 Subsidiaries. Mercari
has no Subsidiaries and does not own, directly or indirectly, any ownership,
equity, profits, or voting interest in any Person or have any agreement or
commitment to purchase any such interest, and Mercari has not agreed and is not
obligated to make nor is bound by any written, oral, or other agreement,
contract, subcontract, lease, binding understanding, instrument, note, option,
warranty, purchase order, license, sublicense, insurance policy, benefit plan,
commitment, or undertaking of any nature, as of the date hereof or as may
hereafter be in effect under which it may become obligated to make, any future
investment in or capital contribution to any other entity.
4.3 Capitalization.
(a) The
authorized capital stock of Mercari consists of: (i) 950,000,000 shares of
common stock, par value $0.00001 per share and (ii) 20,000,000 shares of
preferred stock, par value $0.001 per share (“Mercari Preferred
Stock”). As of the close of business on the business day immediately
prior to the date hereof, Mercari has: (i) 1,589,399 shares of
Mercari Common Stock issued and outstanding, (ii) no shares of Mercari Preferred
Stock were issued and outstanding; (iii) no shares of Mercari Common Stock were
reserved for issuance upon the exercise of outstanding options and warrants to
purchase Mercari Common Stock (“Mercari Warrants”); (iv) no shares of Mercari
Preferred Stock were reserved for issuance to any party; and (v) no shares of
Mercari Common Stock were reserved for issuance upon the conversion of Mercari
Preferred Stock or any outstanding convertible notes, debentures or securities
(“Convertible Securities”). To the knowledge of Mercari, all
outstanding shares of Mercari Common Stock have been issued and granted in
compliance with (i) all applicable securities laws and (in all material
respects) other applicable laws and regulations, and (ii) all requirements set
forth in any applicable Mercari Contracts.
(b) Except
as contemplated by this Agreement, or as described on Schedule 4.3, as of
the date hereof, there is no commitment by Mercari to issue any shares of
capital stock, subscriptions, warrants, options, convertible securities, or
other similar rights to purchase or receive Mercari securities or to distribute
to the holders of any of its equity securities any evidence of indebtedness,
cash, or other assets. Mercari is under no obligation (contingent or
otherwise) to purchase, redeem, or otherwise acquire any of its equity or debt
securities or any interest therein, and to Mercari’s knowledge, there are no
voting trusts or similar agreements, stockholders’ agreements, pledge
agreements, buy-sell agreements, rights of first refusal, preemptive rights, or
proxies relating to any securities of Mercari or obligating Mercari to grant,
extend, accelerate the vesting of or enter into any such subscription, option,
warrant, equity security, call, right, commitment or
agreement. Except as contemplated by this Agreement and except as set
forth in Schedule 4.3
hereto, there are no registration rights, and there is no voting trust, proxy,
rights plan, anti-takeover plan or other agreement or
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understanding
to which Mercari is a party or by which it is bound with respect to any equity
security of any class of Mercari.
4.4 Authority Relative to this
Agreement. Mercari has full corporate power and authority to:
(i) execute, deliver, and perform this Agreement, and each ancillary
document which Mercari has executed or delivered or is to execute or deliver
pursuant to this Agreement, and (ii) carry out Mercari’s obligations hereunder
and thereunder and, to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the
consummation by Mercari of the transactions contemplated hereby (including the
Transactions) have been duly and validly authorized by all necessary corporate
action on the part of Mercari (including the approval by its Board of Directors
in conformance with the directors’ fiduciary duties), and no other corporate
proceedings on the part of Mercari are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by Mercari and, assuming the
due authorization, execution and delivery thereof by the other parties hereto,
constitutes the legal and binding obligation of Mercari, enforceable against
Mercari in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, or other similar laws affecting the enforcement of
creditors’ rights generally and by general principles of equity and public
policy.
4.5 No Conflict; Required
Filings and Consents.
(a) To
the knowledge of Mercari, the execution and delivery of this Agreement by
Mercari does not, and the performance of this Agreement by Mercari shall not:
(i) conflict with or violate Mercari Charter Documents, (ii) conflict with or
violate any Legal Requirements, or (iii) result in any breach of or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or materially impair Mercari’s rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of Mercari
pursuant to, any Mercari Contracts.
(b) The
execution and delivery of this Agreement by Mercari does not, and the
performance of its obligations hereunder will not, require any consent,
approval, authorization, or permit of, or filing with or notification to, any
Governmental Entity, except: (i) for applicable requirements, if
any, of the Securities Act, the Exchange Act, Blue Sky Laws, and the rules and
regulations thereunder, and the filing of appropriate documents with the
relevant authorities of other jurisdictions in which Mercari is qualified to do
business, and (ii) where the failure to obtain such consents, approvals,
authorizations, or permits, or to make such filings or notifications, would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Mercari, or prevent consummation of the Transactions or
otherwise prevent the parties hereto from performing their obligations under
this Agreement.
4.6 Compliance. To
Mercari’s knowledge, Mercari has complied with, and is not in violation of, any
Legal Requirements with respect to the conduct of its business, or the ownership
or operation of its business, except for failures to comply or violations which,
individually or in the aggregate, have not had and are not reasonably likely to
have a Material Adverse Effect on Mercari. To Mercari’s knowledge,
the businesses and activities of Mercari have not been and are not being
conducted in violation of any Legal Requirements. Mercari is not in
default or violation of any term, condition or provision of Mercari Charter
Documents. Except as set forth on Schedule 4.6, to
Mercari’s knowledge, no written notice of non-compliance with any Legal
Requirements has been received by Mercari (and Mercari has no knowledge of any
such notice delivered to any other Person). Mercari is not in
violation of any term of any contract or covenant relating to employment,
patents, proprietary information disclosure, non-competition, or
non-solicitation.
4.7 SEC Filings; Financial
Statements.
(a) Mercari
has made available to DPEC each report, registration statement, and definitive
proxy statement filed by Mercari with the SEC for the thirty-six (36) months
prior to the date of this Agreement (the “Mercari SEC Reports”), which are all
the forms, reports, statements, and documents required to be filed by Mercari
with the SEC for the thirty-six (36) months prior to the date of this
Agreement. As of their respective dates, the Mercari SEC
Reports: (i) were prepared in accordance and complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, and the rules and regulations of the SEC thereunder applicable to
such Mercari SEC Reports, and (ii) did not at the time they were filed (and if
amended or superseded by a filing prior to the date of this Agreement, then also
on the date of such subsequent filing and as so amended or superseded) contain
any untrue statement
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of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Except to
the extent set forth in the preceding sentence, Mercari makes no representation
or warranty whatsoever concerning the Mercari SEC Reports as of any time other
than the time they were filed.
(b) Each
set of financial statements (including, in each case, any related notes thereto)
contained in Mercari SEC Reports, complied as to form in all material respects
with the published rules and regulations of the SEC with respect thereto, was
prepared in accordance with generally accepted accounting principles of the
United States (“U.S. GAAP”) applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited statements, do not contain footnotes as permitted by Form
10-QSB of the Exchange Act) and each fairly presents in all material respects
the financial position of Mercari at the respective dates thereof and the
results of its operations and cash flows for the periods indicated, except that
the unaudited interim financial statements were or are subject to normal
adjustments which were not or are not expected to have a Material Adverse Effect
on Mercari taken as a whole.
(c) Mercari
has previously furnished to DPEC a complete and correct copy of any amendments
or modifications, which have not yet been filed with the SEC but which are
required to be filed, to agreements, documents, or other instruments which
previously had been filed by Mercari with the SEC pursuant to the Securities Act
or the Exchange Act, each of which are listed on the Mercari
Schedules.
4.8 No Undisclosed
Liabilities. Except as set forth in Schedule 4.8
hereto, Mercari has no liabilities (absolute, accrued, contingent, or otherwise)
of a nature required to be disclosed on a balance sheet or in the related notes
to the financial statements prepared in accordance with U.S. GAAP which
are, individually or in the aggregate, material to the business, results of
operations, or financial condition of Mercari, except (i) liabilities provided
for in or otherwise disclosed in the most recent financial statements in the
Mercari SEC Reports filed prior to the date hereof, (ii) liabilities incurred
since June 1, 2009, in the ordinary course of business, none of which would
have a Material Adverse Effect on Mercari, and (iii) those liabilities and
obligations specifically set forth in Section 6.6.
4.9 Absence of Certain Changes
or Events. Except as set forth in Schedule 4.9 hereto,
and except as contemplated by this Agreement, since the date of the most recent
financial statements filed by Mercari with the SEC, there has not
been: (i) any Material Adverse Effect on Mercari; (ii) any
declaration, setting aside, or payment of any dividend on, or other distribution
(whether in cash, stock, or property) in respect of, any of Mercari’s capital
stock, or any purchase, redemption, or other acquisition by Mercari of any of
Mercari’s capital stock or any other securities of Mercari or any options,
warrants, calls, or rights to acquire any such shares or other securities;
(iii) any granting by Mercari of any increase in compensation or fringe
benefits, except for normal increases of cash compensation in the ordinary
course of business consistent with past practice, or any payment by Mercari of
any bonus, except for bonuses made in the ordinary course of business consistent
with past practice, or any granting by Mercari of any increase in severance or
termination pay or any entry by Mercari into any currently effective employment,
severance, termination, or indemnification agreement or any agreement the
benefits of which are contingent or the terms of which are materially altered
upon the occurrence of a transaction involving Mercari of the nature
contemplated hereby, (iv) entry by Mercari into any licensing or other agreement
with regard to the acquisition or disposition of any Intellectual Property other
than licenses in the ordinary course of business consistent with past practice
or any amendment or consent with respect to any licensing agreement filed or
required to be filed by Mercari with respect to any Governmental Entity, (v) any
material change by Mercari in its accounting methods, principles, or practices,
except as required by concurrent changes in U.S. GAAP; (vi) any change in
the auditors of Mercari; (vii) any issuance of, or agreement to issue, capital
stock of Mercari or any other securities of Mercari or any options, warrants,
calls, or rights to acquire any such shares or other securities, or (viii) any
revaluation by Mercari of any of its assets, including, without limitation,
writing down the value of capitalized inventory or writing off notes or accounts
receivable or any sale of assets of Mercari other than in the ordinary course of
business.
4.10 Litigation. Except
as set forth on Schedule 4.10
hereto, there are no claims, suits, actions, or proceedings pending or to
Mercari’s knowledge, threatened against Mercari, before any court, governmental
department, commission, agency, instrumentality, or authority, or any
arbitrator.
4.11 Employee Benefit
Plans. Except as disclosed on Schedule 4.11
hereto, Mercari does not maintain, and has no liability under, any Benefit Plan,
and neither the execution and delivery of this Agreement nor the consummation
of
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the
transactions contemplated hereby will (i) result in any payment (including
severance, unemployment compensation, golden parachute, bonus, or otherwise)
becoming due to any stockholder, director, or employee of Mercari, or (ii)
result in the acceleration of the time of payment or vesting of any such
benefits.
4.12 Labor
Matters. Mercari is not a party to any collective bargaining
agreement or other labor union contract applicable to persons employed by
Mercari, nor does Mercari know of any activities or proceedings of any labor
union to organize any such employees.
4.13 Restrictions on Business
Activities. To Mercari’s knowledge, there is no agreement,
commitment, judgment, injunction, order, or decree binding upon Mercari or to
which Mercari is a party which has or could reasonably be expected to have the
effect of prohibiting or materially impairing any business practice of Mercari,
any acquisition of property by Mercari or the conduct of business by Mercari as
currently conducted other than such effects, individually or in the aggregate,
which have not had and could not reasonably be expected to have, a Material
Adverse Effect on Mercari.
4.14 Title to
Property. Mercari does not own or lease any Real Property or
Personal Property. There are no options or other contracts under
which Mercari has a right or obligation to acquire or lease any interest in Real
Property or Personal Property.
4.15 Taxes. Except as set forth in
Schedule 4.15
hereto, to Mercari’s knowledge:
(a) Mercari
has timely filed all Returns required to be filed by Mercari with any Tax
authority prior to the date hereof, except such Returns which are not material
to Mercari. All such Returns are true, correct, and complete in all
material respects. Mercari has paid all Taxes shown to be due on such
Returns.
(b) All
Taxes that Mercari is required by law to withhold or collect have been duly
withheld or collected, and have been timely paid over to the proper governmental
authorities to the extent due and payable.
(c) Mercari
has not been delinquent in the payment of any material Tax nor is there any
material Tax deficiency outstanding, proposed or assessed against Mercari, nor
has Mercari executed any unexpired waiver of any statute of limitations on or
extending the period for the assessment or collection of any Tax.
(d) No
audit or other examination of any Return of Mercari by any Tax authority is
presently in progress, nor has Mercari been notified of any request for such an
audit or other examination.
(e) No
adjustment relating to any Returns filed by Mercari has been proposed in
writing, formally or informally, by any Tax authority to Mercari or any
representative thereof.
(f) Mercari
has no liability for any material unpaid Taxes which have not been accrued for
or reserved on Mercari’s balance sheets included in the audited financial
statements for the most recent fiscal year ended, whether asserted or
unasserted, contingent, or otherwise, which is material to Mercari, other than
any liability for unpaid Taxes that may have accrued since the end of the most
recent fiscal year in connection with the operation of the business of Mercari
in the ordinary course of business, none of which is material to the business,
results of operations or financial condition of Mercari.
4.16
Environmental
Matters.
(a) Except
as disclosed in Schedule 4.16 hereto
and except for such matters that, individually or in the aggregate, are not
reasonably likely to have a Material Adverse Effect, to Mercari’s
knowledge: (i) Mercari has complied with all applicable Environmental
Laws; (ii) the properties currently owned or operated by Mercari (including
soils, groundwater, surface water, buildings, or other structures) are not
contaminated with any Hazardous Substances; (iii) the properties formerly
owned or operated by Mercari were not contaminated with Hazardous Substances
during the period of ownership or operation by Mercari; (iv) Mercari is not
subject to liability for any Hazardous Substance disposal or contamination on
any third party property; (v) Mercari has not been associated with any
release or threat of release of any Hazardous Substance; (vi) Mercari has
not received any notice, demand, letter, claim, or request for information
alleging that Mercari may be in violation of or liable under any Environmental
Law; and (vii) Mercari is not subject to any
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orders,
decrees, injunctions, or other arrangements with any Governmental Entity or
subject to any indemnity or other agreement with any third party relating to
liability under any Environmental Law or relating to Hazardous
Substances.
(b) As
used in this Agreement, the term “Environmental Law” means any federal, state,
local, or foreign law, regulation, order, decree, permit, authorization,
opinion, common law, or agency requirement relating to: (A) the protection,
investigation, or restoration of the environment, health and safety, or natural
resources; (B) the handling, use, presence, disposal, release, or threatened
release of any Hazardous Substance; or (C) noise, odor, wetlands, pollution,
contamination, or any injury or threat of injury to persons or
property.
(c) As
used in this Agreement, the term “Hazardous Substance” means any substance that
is: (i) listed, classified, or regulated pursuant to any Environmental Law; (ii)
any petroleum product or by-product, asbestos-containing material,
lead-containing paint or plumbing, polychlorinated biphenyls, radioactive
materials or radon; or (iii) any other substance which is the subject of
regulatory action by any Governmental Entity pursuant to any Environmental
Law.
4.17 Brokers. Mercari
has not incurred, nor will it incur, directly or indirectly, any liability for
brokerage, finders’ fees, agent’s commissions, or any similar charges in
connection with this Agreement or any transactions contemplated hereby, nor will
DPEC, the Subsidiaries, the Affiliate, or Mercari be required to make any
payment or issue any shares of common stock, options, warrants, or other
securities of DPEC, the Subsidiaries, the Affiliate, or Mercari to any third
party as result of the Transactions due to the provisions of any agreement
entered into by Mercari or the Selling Stockholders relating to brokerage,
finders’ fees, agent’s commissions, or similar agreements.
4.18 Intellectual
Property. For the purposes of this Agreement, the following
terms have the following definitions:
“Intellectual
Property” shall mean any or all of the following and all worldwide common
law and statutory rights in, arising out of, or associated
therewith: (i) patents and applications therefor and all reissues,
divisions, renewals, extensions, provisionals, continuations, and
continuations-in-part thereof (“Patents”); (ii) inventions (whether
patentable or not), invention disclosures, formulations, delivery methods,
improvements, trade secrets, proprietary information, know how, technology,
technical data, and customer lists, and all documentation relating to any of the
foregoing; (iii) copyrights, copyrights registrations, and applications
therefor, and all other rights corresponding thereto throughout the world; (iv)
domain names, uniform resource locators (“URLs”), and other names and locators
associated with the Internet (“Domain Names”); (v) formulations and delivery
methods and any registrations, approvals, and applications therefor; (vi) trade
names, logos, common law trademarks and service marks, trademark and service
▇▇▇▇ registrations, and applications therefor (collectively, “Trademarks”);
(vii) all databases and data collections and all rights therein; (viii) all
moral and economic rights of authors and inventors, however denominated, and
(ix) any similar or equivalent rights to any of the foregoing (as
applicable).
“Registered Intellectual
Property” means all Intellectual Property that is the subject of an
application, certificate, filing, registration or other document issued, filed
with, or recorded by any private, state, government or other legal
authority.
Mercari does not own, license or
otherwise have any right, title or interest in any Intellectual Property or
Registered Intellectual Property. To the knowledge of Mercari,
Mercari has not, does not, and will not infringe or misappropriate the
Intellectual Property of any third party or engage in activities constituting
unfair competition or trade practices under the laws of any
jurisdiction.
4.19 Agreements, Contracts, and
Commitments.
(a) Except
for the agreements with Computershare Trust Company, Inc. (“Transfer Agent”),
and except as set forth on Schedule 4.19,
there are no contracts, agreements, leases, mortgages, indentures, notes, bonds,
liens, licenses, permits, franchises, purchase orders, sales orders, arbitration
awards, judgments, decrees, orders, documents, instruments, understandings, and
commitments, or other instrument or obligation (including without limitation
outstanding offers or proposals) of any kind, whether written or oral, to which
Mercari is a party or by or to which any of the properties or assets of Mercari
may be bound, subject or affected, which either (a) creates or imposes a
liability greater than $5,000, or
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(b)
may not be cancelled without penalty or further obligation or liability by
Mercari on less than 30 days’ or less prior notice (“Mercari
Contracts”).
(b) Except
as set forth on Schedule 4.19,
each Mercari Contract was entered into at arms’ length and in the ordinary
course, is in full force and effect and is valid and binding upon and
enforceable against each of the parties thereto. True, correct, and
complete copies of all Mercari Contracts (or written summaries in the case of
oral Mercari Contracts) and of all outstanding offers or proposals of Mercari
have been heretofore delivered to DPEC.
(c) Neither
Mercari nor, to the knowledge of Mercari, any other party thereto is in breach
of or in default under, and no event has occurred which with notice or lapse of
time or both would become a breach of or default under, any Mercari Contract,
and no party to any Mercari Contract has given any written notice of any claim
of any such breach, default or event, which, individually or in the aggregate,
are reasonably likely to have a Material Adverse Effect on
Mercari. Each agreement, contract or commitment to which Mercari is a
party or by which it is bound that has not expired by its terms is in full force
and effect, except where such failure to be in full force and effect is not
reasonably likely to have a Material Adverse Effect on Mercari.
4.20 Insurance. Mercari
does not maintain any the insurance policies or fidelity bonds covering any
assets, business, equipment, properties, operations, employees, officers, or
directors.
4.21 Governmental
Actions/Filings. Mercari has been granted and holds, and has
made, all Governmental Actions/Filings necessary to the conduct by Mercari of
its businesses (as presently conducted) or used or held for use by Mercari, all
of which are listed in Schedule 4.21
hereto, and true, complete, and correct copies of which have heretofore been
made available to DPEC. Each such Governmental Action/Filing is in
full force and effect and, except as disclosed in Schedule 4.21
hereto, is not subject to expiration, and Mercari is in compliance with all of
its obligations with respect thereto. No event has occurred and is
continuing which requires or permits, or after notice or lapse of time or both
would require or permit, and consummation of the transactions contemplated by
this Agreement or the ancillary documents will not require or permit (with or
without notice or lapse of time, or both), any modification or termination of
any such Governmental Actions/Filings. Except as set forth in Schedule 4.21, to
Mercari’s knowledge, no Governmental Action/Filing is necessary to be obtained,
secured or made by Mercari to enable it to continue to conduct its businesses
and operations and use its properties after the Closing in a manner which is
consistent with current practice.
4.22 Interested Party
Transactions. Except as set forth in Schedule 4.19 and
Schedule 4.22
hereto or in Mercari’s most recent report on Form 10-K or the Mercari SEC
Reports subsequent thereto, no employee, officer, director or 5% or more
stockholder of Mercari or a member of his or her immediate family is indebted to
Mercari, nor is Mercari indebted (or committed to make loans or extend or
guarantee credit) to any of them. Except as set forth in Schedule 4.19
and
Schedule 4.22, to Mercari’s knowledge, none of such individuals has
any direct or indirect ownership interest in any Person with whom Mercari is
affiliated or with whom Mercari has a material contractual relationship, or any
Person that competes with Mercari, except that each employee, 5% or more
stockholder, officer or director of Mercari and members of their respective
immediate families may own less than 5% of the outstanding stock in publicly
traded companies that may compete with Mercari. Except as set forth
in Schedule
4.19 and
Schedule 4.22, to Mercari’s knowledge, no officer, director or
stockholder or any member of their immediate families is, directly or
indirectly, interested in any material contract with Mercari (other than such
contracts as relate to any such individual ownership of capital stock or other
securities of Mercari).
4.23 Indebtedness; Mercari
Assets. Except as set forth on Schedule 4.23,
Mercari has no indebtedness for borrowed money. Immediately prior to the
Closing, Mercari will have no assets, except for cash reserves earmarked for the
payment of certain accounts payable and accrued expenses of Mercari with respect
to the period prior to Closing which remain unpaid, which Mercari shall be
responsible for payment following the Closing pursuant to Section 6.6
hereof (“Cash Reserve”).
4.24 Over-the-Counter Bulletin
Board and Pink Sheets Quotation. Mercari Common Stock is
approved for quotation on the Over-the-Counter Bulletin Board (“OTC BB”) and the
Pink Sheets. There is no action or proceeding pending or, to
Mercari’s knowledge, threatened against Mercari by NASDAQ or NASD, Inc. (“NASD”)
with respect to any intention by such entities to prohibit or terminate such
approval for the quotation of Mercari Common Stock on the OTC BB and the Pink
Sheets.
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4.25 Board
Approval. The Board of Directors of Mercari (including any
required committee or subgroup of the Board of Directors of Mercari) has, as of
the date of this Agreement, approved this Agreement and the transactions
contemplated hereby. No vote or consent of stockholders of Mercari is
necessary to authorize this Agreement or the transactions contemplated hereby,
including, but not limited to, the issuance of the Issued Stock.
4.26 Issued
Stock. The Issued Stock has been duly and validly authorized
and, when issued at the Closing, will be validly issued, fully paid and
non-assessable and subject to no preemptive rights or rights of first
refusal.
4.27 Representations and
Warranties Complete. The representations and warranties of
Mercari included in this Agreement and any list, statement, document, or
information set forth in, or attached to, any Schedule provided pursuant to this
Agreement or delivered hereunder, are true and complete in all material respects
and do not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
contained therein not misleading, under the circumstance under which they were
made.
ARTICLE
V
REPRESENTATIONS AND
WARRANTIES OF SELLING STOCKHOLDERS
Except
as disclosed on any schedules prepared by the Selling Stockholders (the “Selling
Stockholder Schedules”), each Selling Stockholder, severally and not jointly,
hereby represents and warrants to, and covenants with, DPEC as
follows:
5.1 Organization and
Qualification. Each Selling Stockholder is duly organized,
validly existing, and in good standing under the laws of the state of its
formation and has the requisite limited liability company or partnership power
and authority to own, lease, and operate its assets and properties and to own,
manage, and dispose of its interest as a stockholder in Mercari. Each
Selling Stockholder is in possession of all franchises, grants, authorizations,
licenses, permits, easements, consents, certificates, approvals, and orders
(“Approvals”) necessary to own, manage, and dispose of its interest in Mercari,
except where the failure to have such Approvals could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on such
Selling Stockholder.
5.2 Authority Relative to this
Agreement. Each Selling Stockholder has the necessary limited
liability company or partnership power and authority to execute and deliver this
Agreement and to perform its obligations hereunder and to consummate the
Transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation by such Selling Stockholder of the Transactions
contemplated hereby have been duly and validly authorized by all necessary
limited liability company or partnership action on the part of such Selling
Stockholder and no other limited liability company or partnership proceedings on
the part of such Selling Stockholder are necessary to authorize this Agreement
or consummate the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by such Selling Stockholder
and, assuming the due authorization, execution, and delivery thereof by the
other parties hereto, constitutes the legal and binding obligation of such
Selling Stockholder, enforceable against such Selling Stockholder in accordance
with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of creditors’
rights generally and by applicable principles of equity and public
policy.
5.3 No Conflict; Required
Filings and Consents.
(a) The
execution and delivery of this Agreement by such Selling Stockholder does not,
and the performance of this Agreement by such Selling Stockholder shall
not: (i) conflict with or violate such Selling Stockholder’s
Articles of Organization, Certificate of Partnership, Operating Agreement,
Partnership Agreement, or similar organizational document; (ii) conflict
with or violate any Legal Requirement; or (iii) result in a breach or
constitute a default (or an event which, with notice or lapse of time or both,
would become a default) under, or materially impair such Selling Stockholder’s
rights or alter the rights or obligations of any third party under, or give to
others any right of termination, amendment, acceleration, or cancellation of, or
result in the creation of a lien or encumbrance on any of the properties or
assets of such Selling Stockholder, pursuant to any material contract of such
Selling Stockholder.
(b) The
execution and delivery of this Agreement by such Selling Stockholder does not,
and the performance of its obligations hereunder will not, require any consent,
approval, authorization, or permit of, or filing with
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or
notification to, any court, administrative agency, commission, governmental or
regulatory authority, domestic or foreign, except where the failure to obtain
such consents, approvals, authorizations, or permits, or to make such filings or
notifications, would not, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect on such Selling Stockholder, DPEC, or
Mercari on or after the Closing or prevent consummation of the Transactions or
otherwise prevent the parties hereto from performing their obligations under
this Agreement.
5.4 Litigation. There
are no claims, suits, actions, or proceedings pending, or to the knowledge of
such Selling Stockholder, threatened against such Selling Stockholder before any
court, governmental department, commission, agency, instrumentality, authority,
or any arbitrator.
5.5 Brokers; Third Party
Expenses. Such Selling Stockholder has not incurred, nor will
it incur, directly or indirectly, any liability for brokerage, finders’ fees,
agents’ commissions, or any similar charges in connection with this Agreement or
any of the Transactions contemplated hereby, nor will any other party to this
Agreement be required to make any payment or issue any securities to any third
party as a result of the Transactions due to any provisions of any agreement
entered into by such Selling Stockholder related to brokerage, finders’ fees,
agents’ commissions, or similar agreements.
5.6 Owner. Such
Selling Stockholder is the record and beneficial owner and holder of the
Purchased Stock which is duly and validly issued, fully paid, and non-assessable
and free and clear of all liens, encumbrances, charges, and claims of any kind
whatsoever. Except for applicable requirements of the Securities Act,
the Exchange Act, Blue Sky Laws, and the rules and regulations thereunder, the
Purchased Stock is not subject to any restrictions with respect to
transferability. Each Selling Stockholder has full power and
authority to assign and transfer the Purchased Stock to DPEC in accordance with
the terms of this Agreement without obtaining the consent or approval of any
other Person or Governmental Entity and, upon the transfer of the Purchased
Stock to DPEC pursuant to this Agreement, DPEC will be the record and beneficial
owner of the Purchased Stock, free of all liens, encumbrances, charges,
assessments, preemptive rights, rights of first refusal, or other claims of any
kind whatsoever.
ARTICLE
VI
ADDITIONAL
AGREEMENTS
6.1 Board of Directors of
Mercari. Prior to the Closing, the current Board of Directors
of Mercari shall deliver duly adopted resolutions to: (a) set
the size of Mercari’s Board of Directors at five (5) members, effective
immediately prior to the Closing; (b) appoint the following persons to
Mercari’s Board of Directors, effective as of the
Closing: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇; and
(c) accept the resignations of the current officers and directors of
Mercari effective after the actions described in (a) and (b) above
(“Resolutions”). Immediately prior to the Closing, the current
officers and directors of Mercari shall deliver their resignations, as
appropriate, as officers and directors of Mercari to be effective after the
actions described in (a) and (b) above (the “Resignations”).
6.2 Other
Actions.
(a) At
least fifteen (15) days prior to Closing, DPEC will prepare the information
statement required by Rule 14f-1 promulgated under the Exchange Act (“14f-1
Information Statement”), and, after providing Mercari with a reasonable time to
review and comment on the 14f-1 Information Statement, Mercari will file the
14f-1 Information Statement with the SEC and will cause the same to be mailed to
each of Mercari’s stockholders at least eleven (11) days prior to the
Closing.
(b) At
least three (3) days prior to Closing, DPEC shall prepare the Form 8-K
announcing the Closing in conformance with regulations, which shall include all
information required by such form (“Transaction Form 8-K”), which shall be in a
form reasonably acceptable to Mercari and in a format acceptable for ▇▇▇▇▇
filing. Mercari shall file the Transaction Form 8-K with the SEC
within the statutory time frame following the Closing.
Each
of DPEC and Mercari shall cooperate with each other and use their respective
commercially reasonable efforts to take or cause to be taken all actions, and do
or cause to be done all things, necessary, proper or advisable on its part under
this Agreement and applicable laws to consummate the Transactions and the other
transactions contemplated hereby as soon as practicable, including preparing and
filing as soon as practicable all documentation to effect all necessary notices,
reports, and other filings and to obtain as soon as practicable all consents,
registrations, approvals, permits, and
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authorizations
necessary or advisable to be obtained from any third party and/or any
Governmental Entity in order to consummate the Transactions or any of the other
transactions contemplated hereby. Subject to applicable laws relating
to the exchange of information and the preservation of any applicable
attorney-client privilege, work-product doctrine, self-audit privilege, or other
similar privilege, each of DPEC and Mercari shall have the right to review and
comment on in advance, and to the extent practicable each will consult the other
on, all the information relating to such party, that appear in any filing made
with, or written materials submitted to, any third party and/or any Governmental
Entity in connection with the Transactions and the other transactions
contemplated hereby. In exercising the foregoing right, each of DPEC and Mercari
shall act reasonably and as promptly as practicable.
6.3 Required
Information. In connection with the preparation of the
Transaction Form 8-K and 14f-1 Information Statement, and for such other
reasonable purposes, each of DPEC and Mercari shall, upon request by the other,
furnish the other with all information concerning themselves, their respective
subsidiaries, directors, officers, managers, managing members, stockholders, and
members (including the directors of Mercari to be elected effective as of the
Closing pursuant to Section 6.1 hereof) and such other matters as may be
reasonably necessary or advisable in connection with the Transactions, or any
other statement, filing, notice or application made by or on behalf of each of
DPEC and Mercari to any third party and/or any Governmental Entity in connection
with the Transactions and the other transactions contemplated
hereby. Each party warrants and represents to the other parties that
all such information shall be true and correct in all material respects and will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading.
6.4 Confidentiality; Access to
Information. To the extent the provisions of this Agreement
provide greater protection against the disclosure of confidential information by
the parties than any confidentiality agreement or letter of intent previously
executed by the parties, such provisions of such prior confidentiality agreement
or letter of intent shall be superseded by the provisions of this
Agreement. Each party agrees to maintain in confidence any non-public
information received from the other parties, and to use such non-public
information only for purposes of consummating the transactions contemplated by
this Agreement. Such confidentiality obligations will not apply
to: (i) information which was known to a party or their
respective agents prior to receipt from the other party; (ii) information
which is or becomes generally known; (iii) information acquired by a party
or their respective agents from a third party who was not bound to an obligation
of confidentiality; and (iv) disclosure required by law. In the
event this Agreement is terminated, each party will return or cause to be
returned to each other party providing documents and other material, all such
documents and other material obtained from such other party in connection with
the Transactions contemplated hereby.
6.5 Public
Disclosure. Except to the extent previously disclosed or to
the extent the parties believe that they are required by applicable law or
regulation to make disclosure, prior to Closing, no party shall issue any
statement or communication to the public regarding the Transactions without the
consent of the other parties, which consent shall not be unreasonably
withheld. To the extent a party hereto believes it is required by law
or regulation to make disclosure regarding the Transactions, it shall, if
possible, immediately notify the other party prior to such
disclosure.
6.6 Absence of Material
Liabilities. Immediately prior to the Closing, Mercari agrees
that it shall have no liabilities or obligations requiring the payment of
monies, other than obligations under or with respect
to: (i) Mercari Contracts disclosed under Section 4.19
hereof; and (ii) unpaid accounts payable and accrued expenses of Mercari as
of the Closing (“Accounts Payable”). Mercari shall establish a Cash
Reserve in an amount equal to the Accounts Payable minus all fees, costs, and
expenses included in such Accounts Payable which are required to be paid by DPEC
under this Agreement, including Section 9.1 hereof (“Adjusted Accounts
Payable”). Following the Closing, to the extent not satisfied by
Mercari or DPEC prior to the Closing, the Adjusted Accounts Payable shall be
paid in full from the Cash Reserve. To the extent that any Cash
Reserve remains after payment of the Adjusted Accounts Payable, the remaining
balance of the Cash Reserve shall be paid to Selling Stockholders. To
the extent the Cash Reserve is not sufficient to pay and satisfy the Adjusted
Accounts Payable in full, the Selling Stockholders agree to pay such unpaid
Adjusted Accounts Payable and indemnify and hold Mercari harmless from such
unpaid Adjusted Accounts Payable for a period of one (1) year following the
Closing. Following the Closing, DPEC shall pay and satisfy, or cause
Mercari to pay and satisfy, all of Mercari’s obligations which DPEC has agreed
to pay and satisfy under this Agreement, including under Section 9.1
hereof.
6.7 Business
Records. At Closing, Mercari shall cause to be delivered to
DPEC all records and documents relating to Mercari, which Mercari possesses,
including, without limitation, books, records, government filings, Returns,
-▇▇-
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ Records, Stock Records, consent decrees, orders, and
correspondence, director and stockholder minutes and resolutions, stock
ownership records, financial information and records, electronic files
containing any financial information and records, and other documents used in or
associated with Mercari (“Business Records”). DPEC agrees to retain
all such records and documents for at least five (5) years after the Closing;
provided that if DPEC wants to dispose of any prior to such time, it will
deliver the same to Selling Stockholders.
ARTICLE
VII
CONDITIONS TO THE
TRANSACTIONS
7.1 Conditions to Obligations of
Each Party to Effect the Transactions. The respective
obligations of each party to this Agreement to effect the Transactions shall be
subject to the satisfaction at or prior to the Closing Date of the following
conditions, any of which may be waived, in writing, signed by DPEC, Mercari, and
the Selling Stockholders:
(a) No
Order. No Governmental Entity shall have enacted, issued,
promulgated, enforced, or entered any statute, rule, regulation, executive
order, decree, injunction, or other order (whether temporary, preliminary, or
permanent) which is in effect and which has the effect of making the
Transactions illegal or otherwise prohibiting consummation of the Transactions,
substantially on the terms contemplated by this Agreement. All
waiting periods, if any, under any law in any jurisdiction in which DPEC or
Mercari has material operations relating to the transactions contemplated hereby
has expired or terminated early and all material approvals required to be
obtained prior to the Transactions in connection with the transactions
contemplated hereby shall have been obtained.
(b) Debt Holder
Consents. The lenders under any credit facilities, secured
loans, mortgages, and other indebtedness of DPEC for borrowed money shall have
consented in writing to the Transactions (if such consent is required in
connection with the Transactions).
(c) Required
Approvals. This Agreement and the Transactions have been duly
approved and adopted, by the requisite vote, if any, of DPEC’s stockholders and
by the requisite actions of the Board of Directors of DPEC under the laws of the
State of Delaware and DPEC’s Charter Documents, and by the requisite actions of
the Board of Directors of Mercari under the laws of the State of Colorado and
the Mercari Charter Documents.
(d) 14f-1 Information
Statement. At least eleven (11) days prior to Closing, Mercari
shall have filed the 14f-1 Information Statement with the SEC, and Mercari shall
have caused the 14f-1 Information Statement to be mailed to each of the
stockholders of Mercari, and Mercari shall have otherwise complied with all of
the provisions under Rule 14f-1 under the Exchange Act.
(e) Transaction
Form 8-K. DPEC shall have delivered to Mercari the
Transaction Form 8-K, in a form acceptable to Mercari, which acceptance shall
not be unreasonably withheld.
(f) Blue Sky
Laws. The issuance and sale of Mercari Common Stock to be
issued and sold under this Agreement shall be exempt from, or has been qualified
under, the Blue Sky Laws of each appropriate jurisdiction to the satisfaction of
Mercari, DPEC, and their respective counsels.
7.2 Additional Conditions to
Obligations of DPEC. The obligations of DPEC to consummate and
effect the Transactions shall be subject to the satisfaction at or prior to the
Closing Date of each of the following conditions, any of which may be waived, in
writing, exclusively by DPEC:
(a) Representations and
Warranties. The representations and warranties of Mercari in
this Agreement shall be true and correct in all respects on and as of the date
of this Agreement and at and as of the Closing as though such representations
and warranties were made on and as of such time (except for such representations
and warranties that speak specifically as of the date hereof or as of another
date, which shall be true and correct as of such date), disregarding for the
purposes of such determination any “Material Adverse Effect” or other
materiality qualifiers set forth in
such representations and warranties, except for such failures of such
representations and warranties to be so true and correct as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Mercari.
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(b) Agreements and
Covenants. Mercari shall have performed or complied in all
material respects with all agreements and covenants required by this Agreement
to be performed or complied with by it on or prior to the Closing Date, except
to the extent that any failure to perform or comply (other than a willful
failure to perform or comply or failure to perform or comply with an agreement
or covenant reasonably within the control of Mercari) does not, or will not,
constitute a Material Adverse Effect with respect to Mercari.
(c) Resignations and
Resolutions. Mercari shall have delivered to DPEC the
Resignations and Resolutions, in a form reasonably satisfactory to DPEC,
effective immediately prior to the Closing. Mercari shall also have
delivered to DPEC evidence satisfactory to DPEC of the appointment of new
directors of Mercari in accordance with Section 6.1
hereof.
(d) Consents. Mercari
shall have obtained all consents, waivers, and approvals required in connection
with the consummation of the transactions contemplated hereby, other than
consents, waivers, and approvals the absence of which, either alone or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect on
Mercari.
(e) Material Adverse
Effect. No Material Adverse Effect with respect to Mercari
shall have occurred since the date of this Agreement.
(f) SEC Compliance.
Immediately prior to Closing, Mercari shall be in compliance with the reporting
requirements under the Exchange Act.
(g) Business
Records. Immediately prior to the Closing, Mercari shall have
delivered to DPEC the Business Records.
(h) OTC
Quotation. The Mercari Common Stock at the Closing will be
approved for quotation on the OTC BB and the Pink Sheets.
(i) Other
Deliveries. At or prior to Closing, Mercari shall have
delivered to DPEC: (i) copies of resolutions and actions taken
by Mercari’s board of directors in connection with the approval of this
Agreement and the transactions contemplated hereunder, and (ii) such other
documents or certificates as shall reasonably be requested by DPEC and its
counsel in order to consummate the transactions contemplated
hereunder.
(j) Cash
Reserve. Mercari shall have established the Cash Reserve
required by Section 6.6.
(k) Capital
Contribution. The Selling Stockholders shall have contributed
to the capital of Mercari the principal ($31,000) and accrued interest under all
loans they have made to Mercari.
7.3 Additional Conditions to the
Obligations of Mercari. The obligation of Mercari to
consummate and effect the Transactions shall be subject to the satisfaction at
or prior to the Closing Date of each of the following conditions, any of which
may be waived, in writing, exclusively by Mercari:
(a) Representations and
Warranties. The representations and warranties of DPEC in this
Agreement shall be true and correct in all respects on and as of the date of
this Agreement and at and as of the Closing as though such representations and
warranties were made on and as of such time (except for such representations and
warranties that speak specifically as of the date hereof or as of another date,
which shall be true and correct as of such date).
(b) Agreements and
Covenants. DPEC shall have performed or complied in all
material respects with all agreements and covenants required by this Agreement
to be performed or complied with by it at or prior to the Closing Date except to
the extent that any failure to perform or comply (other than a willful failure
to perform or comply or failure to perform or comply with an agreement or
covenant reasonably within the control of DPEC) does not, or will not,
constitute a Material Adverse Effect on DPEC.
-14-
(c) Consents. DPEC
shall have obtained all consents, waivers, permits, and approvals required in
connection with the consummation of the transactions contemplated hereby, other
than consents, waivers, and approvals the absence of which, either alone or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect on DPEC.
(d) Other
Deliveries. At or prior to Closing, DPEC shall have delivered
to Mercari: (i) copies of resolutions and actions taken DPEC’s
Board of Directors in connection with the approval of this Agreement and the
transactions contemplated hereunder, and (ii) such other documents or
certificates as shall reasonably be required by Mercari and its counsel in order
to consummate the transactions contemplated hereunder.
ARTICLE
VIII
SURVIVAL;
INDEMNIFICATION
Except
as specifically set forth in Sections 6.6, 6.7, and 10.1, and such other
provisions contained herein which specifically contemplate the performance of
any agreement or covenant by any party hereto after the Closing, all
representations, warranties, agreements, and covenants contained in or made
pursuant to this Agreement by any party hereto or contained in any Schedule
hereto shall survive the Closing for a period of two (2) years.
ARTICLE
IX
FEES, AMENDMENT, AND
WAIVER
9.1 Fees and
Expenses. All fees and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expenses. The parties further agree that each
party shall be responsible for any and all costs and expenses incurred by them
in connection with the preparation of the Transaction Form 8-K and the 14f-1
Information Statement. Notwithstanding the foregoing, and whether or
not the Transactions are consummated, DPEC will pay, or reimburse Mercari if
Mercari has paid, all obligations which DPEC has agreed to pay under this
Agreement, including all fees, costs, and expenses of filing documents relating
to the Transactions with any authority; and all costs and expenses of filing,
reproducing, and mailing the 14f-1 Information Statement. In
addition, at the expense of DPEC, DPEC will cause its counsel to prepare initial
drafts of: (i) resolutions implementing the provisions of Section
6.1; and (ii) any 8-K, 14f-1, and Blue Sky filings for Mercari in
connection with the Transactions. DPEC’s counsel will prepare the
foregoing documents based upon information provided to it by Mercari and DPEC
and will provide the same to Mercari for its review and
revision. Mercari acknowledges and agrees that DPEC’s counsel will
prepare initial drafts of the documents described above as an accommodation to
Mercari, is not representing them as counsel in any respect in connection with
this transaction, and that all such documents will be reviewed, revised, and
approved by Mercari.
9.2 Amendment. This
Agreement may be amended by the parties hereto at any time by execution of an
instrument in writing signed on behalf of each of the parties
hereto.
ARTICLE
X
POST-CLOSING
COVENANTS
10.1 Post-Closing
Covenants. DPEC acknowledges that the agreements contained in
this Section 10.1 are an integral part of the transactions contemplated by
this Agreement and that, without these agreements, Mercari and the Selling
Stockholders would not enter into this Agreement. The parties hereto
acknowledge and agree that the failure by Mercari or DPEC to satisfy, perform,
and comply with the covenants set forth in this Section 10.1 (“Post-Closing
Covenants”) following the Closing will have a material adverse effect on Mercari
and the investment of the Selling Stockholders in Mercari. Mercari
agrees to utilize its commercially reasonable efforts to, and, after the
Closing, DPEC agrees to utilize its commercially reasonable efforts to cause
Mercari to, satisfy the following agreements and covenants:
(a) Remain
a Section 12(g) reporting company in compliance with and current in its
reporting requirements under the Exchange Act.
(b) Cause
all of the assets and business or equity interest of DPEC, the Subsidiaries, and
the Affiliate to be transferred to Mercari and, in connection with such
transactions, cause Mercari’s stock to be distributed by
-15-
DPEC
to DPEC’s stockholders and the holders of equity interests in the Affiliate
(“Reorganization Transaction”). After consummation of the
Reorganization Transaction, obtain at least $10 million in gross proceeds
from a financing (“Mercari Financing”) for Mercari; provided that the gross
proceeds from any financing obtained by Mercari, DPEC, any Subsidiary, Affiliate
or successor after September 8, 2009 shall be deemed to be part of the gross
proceeds from the Mercari Financing. If the gross proceeds from the
Mercari Financing exceed $15 million at the time of the last closing of
such financing, Mercari agrees to issue additional shares of Mercari Common
Stock to DPEC at a purchase price of $.001 per share as
follows: (i) 18,164,560 shares of Mercari Common Stock if the
amount of the financing is at least $15 million and less than
$20 million; or (ii) 34,058,550 shares of Mercari Common Stock if the
amount of the financing is $20 million or more. After
consummation of the Mercari Financing, cause Mercari to seek to register for
resale all of the shares issued in the Mercari Financing and shares of Common
Stock issued by Mercari from and after December 1, 2001 and prior to the date
hereof that are currently outstanding (“Founders Shares”). Mercari
will use its commercially reasonable efforts to file a registration statement
within 60 days after consummation of the Reorganization Transaction (“Filing
Date”) and to have the registration statement become effective within 180 days
after the Filing Date. If the SEC requires Mercari to reduce the
number of shares included under such registration statement, any such reduction
will first be made from the shares issued in the Financing. The
obligations of DPEC and Mercari under this subsection (b) are contingent
upon DPEC’s good faith determination after taking commercially reasonable
efforts that the transactions are feasible. Such determination shall
take into account all relevant material factors, including without limitation,
then current economic, financial and market conditions.
10.2 Indemnification.
(a) DPEC
shall indemnify and hold harmless the Selling Stockholders, from and against any
and all loss, diminution in value, damage, cost, expense (including court costs
and attorneys’ fees and expenses and costs of investigation), fine, penalty,
suit, action, claim, deficiency, liability, or obligation caused by or arising
from (i) any misrepresentation, breach of warranty, or failure to fulfill any
covenant or agreement of DPEC contained herein, and (ii) any and all claims of
third parties made based upon facts alleged that, if true, would have
constituted such a misrepresentation, breach or failure.
(b) The
Selling Stockholders shall, severally and not jointly, indemnify and hold
harmless DPEC and Mercari, from and against any and all loss, diminution in
value, damage, cost, expense (including court costs and attorneys’ fees and
expenses and costs of investigation), fine, penalty, suit, action, claim,
deficiency, liability, or obligation caused by or arising from: (i)
any misrepresentation, breach of warranty or failure to fulfill any covenant or
agreement of the Selling Stockholders contained herein; and (ii) any and all
claims of third parties made based upon facts alleged that, if true, would
constitute such a misrepresentation, breach or failure.
(c) The
representations, warranties, covenants, and agreements contained in this
Agreement shall not be affected by any party hereto or by anyone on behalf of
any such party: (i) investigating, verifying, or examining any matters with
respect to Mercari, DPEC, this Agreement or the transactions contemplated
hereby; (ii) having the opportunity to investigate, verify or examine any
matters related to Mercari, DPEC, this Agreement or the transactions
contemplated hereby;
or (iii) failing to determine or discover any facts which were determinable or
discoverable by any such party. All rights contained in this Section
are cumulative and are in addition to all other rights and remedies which are
otherwise available, pursuant to the terms of this Agreement or applicable law.
All indemnification rights shall be deemed to apply in favor of the indemnified
party’s officers, directors, representatives, subsidiaries, affiliates,
successors, and assigns.
ARTICLE
XI
GENERAL
PROVISIONS
11.1 Notices. All
notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally or by commercial delivery service, or sent
via telecopy (receipt confirmed) to the parties at the following addresses or
telecopy numbers (or at such other address or telecopy numbers for a party as
shall be specified by like notice):
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(a) if
to Mercari (prior to Closing), to:
Mercari Communications Group,
Ltd.
Attn: ▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Secretary
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
(b) if
to Selling Stockholders:
▇▇▇▇▇▇▇, LLC and
▇▇▇▇▇▇▇▇▇
Family Partners, Ltd.
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
(c) if
to DPEC or Mercari (after Closing):
Diversified Private Equity
Corporation
Attn:
______________________
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)
▇▇▇-▇▇▇▇
With
a copy to:
Berenbaum Weinshienk PC
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇,
Esq.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy:
▇▇▇-▇▇▇-▇▇▇▇
11.2 Interpretation.
(a) When
a reference is made in this Agreement to Exhibits or Schedules, such reference
shall be to an Exhibit or Schedule to this Agreement unless otherwise
indicated. When a reference is made in this Agreement to Sections,
such reference shall be to a Section of this Agreement. Unless
otherwise indicated the words “include,” “includes” and “including” when used
herein shall be deemed in each case to be followed by the words “without
limitation.” The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. When reference is made herein to
“the business of” an entity, such reference shall be deemed to include the
business of all direct and indirect Subsidiaries of such entity.
Reference
to the Subsidiaries of an entity shall be deemed to include all direct and
indirect Subsidiaries of such entity. When the same term is defined
in more than one Article and is assigned different meanings in different
Articles, each such definition shall be applicable only within the Article in
which it is defined.
(b) For
purposes of this Agreement, the term “Material Adverse Effect” when used in
connection with an entity means any change, event, violation, inaccuracy,
circumstance or effect, individually or when aggregated with other changes,
events, violations, inaccuracies, circumstances or effects, that is materially
adverse to the business, assets (including intangible assets), revenues,
financial condition or results of operations of such entity (it being understood
that none of the following alone or in combination shall be deemed, in and of
itself, to constitute a Material Adverse Effect: (a) changes attributable to the
public announcement or pendency of the transactions contemplated hereby, (b)
changes in general national or regional economic conditions, (c) changes
affecting the industry generally in which DPEC or Mercari operate, or (d) any
SEC rulemaking requiring enhanced disclosure of reverse merger transactions with
a public shell.
-17-
(c) For
purposes of this Agreement, the term “Legal Requirements” means any federal,
state, local, municipal, foreign, or other law, statute, constitution, principle
of common law, resolution, ordinance, code, edict, decree, rule, regulation,
ruling, or requirement issued, enacted, adopted, promulgated, implemented, or
otherwise put into effect by or under the authority of any Governmental Entity
(as defined in Section 3.4(b)), and all requirements set forth in any DPEC
or Mercari Contracts, as applicable.
(d) For
purposes of this Agreement, the term “Subsidiary” shall mean any Person in which
DPEC or Mercari or any subsidiary thereof directly or indirectly, owns
beneficially securities or interests representing 50% or more of (x) the
aggregate equity or profit interests, or (y) the combined voting power of voting
interests ordinarily entitled to vote for management or otherwise.
(e) For
purposes of this Agreement, the term “Person” shall mean any individual,
corporation (including any non-profit corporation), general partnership, limited
partnership, limited liability partnership, joint venture, estate, trust,
company (including any limited liability company or joint stock company), firm,
or other enterprise, association, organization, entity, or Governmental
Entity.
(f) For
purposes of this Agreement, all monetary amounts set forth herein are referenced
in United States dollars, unless otherwise noted.
11.3 Counterparts. This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other parties, it being understood that all parties need not sign the same
counterpart. Signatures by facsimile or in electronic form shall be
treated the same as if such signatures were original signatures of the
parties.
11.4 Entire Agreement; Third
Party Beneficiaries. This Agreement and the documents and
instruments and other agreements among the parties hereto as contemplated by or
referred to herein, including the Schedules hereto (a) constitute the
entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof, it being understood that
upon consummation of the Closing as described in Article II, the letter of
intent between Mercari and DPEC dated November 24, 2008, as subsequently amended
and extended, is hereby terminated in its entirety and shall be of no further
force and effect, and (b) are not intended to confer upon any other person any
rights or remedies hereunder (except as specifically provided in this
Agreement).
11.5 Severability. In
the event that any provision of this Agreement, or the application thereof,
becomes or is declared by a court of competent jurisdiction to be illegal, void,
or unenforceable, the remainder of this Agreement will continue in full force
and effect and the application of such provision to other persons or
circumstances will be interpreted so as reasonably to effect the intent of the
parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business, and other
purposes of such void or unenforceable provision.
11.6 Other Remedies; Specific
Performance. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to seek an injunction or injunctions to prevent breaches of this Agreement and
to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.
11.7 Governing
Law. Except for matters that are required to be governed by
the provisions of the Delaware General Corporation Law, this Agreement shall be
governed by and construed in accordance with the laws of the State of Colorado,
USA, regardless of the laws that might otherwise govern under applicable
principles of conflicts of law thereof.
-18-
11.8 Rules of
Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding, or rule
of construction providing that ambiguities in an agreement or other document
will be construed against the party drafting such agreement or
document.
11.9 Assignment. No
party may assign either this Agreement or any of its rights, interests, or
obligations hereunder without the prior written approval of the other
parties. Subject to the first sentence of this Section 11.9,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted
assigns.
11.10 Arbitration. Any
disputes or claims arising under or in connection with this Agreement or the
transactions contemplated hereunder shall be resolved by binding
arbitration. Notice of a demand to arbitrate a dispute by a party
shall be given in writing to the other parties at their last known
address. Arbitration shall be commenced by the filing by a party of
an arbitration demand with the American Arbitration Association
(“AAA”). The arbitration and resolution of the dispute shall be
resolved by a single arbitrator appointed by the AAA pursuant to AAA
rules. The arbitration shall in all respects be governed and
conducted by applicable AAA rules, and any award and/or decision shall be
conclusive and binding on the parties. The arbitration shall be
conducted in Denver, Colorado. The arbitrator shall supply a written
opinion supporting any award, and judgment may be entered on the award in any
court of competent jurisdiction. Each party shall pay its own fees
and expenses for the arbitration, except that any costs and charges imposed by
the AAA and any fees of the arbitrator for his services shall be assessed
against the losing parties by the arbitrator. In the event that preliminary or
permanent injunctive relief is necessary or desirable in order to prevent a
party from acting contrary to this Agreement or to prevent irreparable harm
prior to a confirmation of an arbitration award, then a party is authorized and
entitled to commence a lawsuit solely to obtain equitable relief against the
other parties pending the completion of the arbitration in a court having
jurisdiction over the parties. All rights and remedies of the parties
shall be cumulative and in addition to any other rights and remedies obtainable
from arbitration.
-19-
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as
of the date first written above.
|
MERCARI
COMMUNICATIONS GROUP, LTD.
|
||
|
By:
|
/s/
L. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
|
|
|
L.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President
|
||
|
DIVERSIFIED
PRIVATE EQUITY CORPORATION
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
|
|
▇▇▇▇▇
▇. ▇▇▇▇▇▇, President
|
||
The undersigned agree to the provisions
of Sections 1.2, the Accounts Payable, Cash Reserve, and Adjusted Accounts
Payable provisions of Section 6.6, 7.1(f), 7.2(k), and 10.2 and Articles
II, V, VIII, X, and XI of the foregoing Stock Purchase Agreement.
|
▇▇▇▇▇▇▇,
LLC.
|
||
|
By:
|
/s/
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|
|
▇▇▇▇
▇. ▇▇▇▇▇▇▇, Manager
|
||
|
▇▇▇▇▇▇▇▇▇
FAMILY PARTNERS, LTD.
|
||
|
By:
|
/s/
L. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
|
|
|
L. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, General Partner
|
||
-20-
INDEX OF EXHIBITS AND
SCHEDULES
Schedules
DPEC
Schedules
Mercari
Schedules
Selling
Stockholders Schedules-None
-21-
MERCARI
SCHEDULES
Schedule
4.3
None
Schedule 4.6
None
Schedule 4.9
None, except as disclosed on
Schedule 4.19
Schedule 4.10
None
Schedule 4.11
None
Schedule 4.15
None
Schedule 4.16
None
Schedule 4.19
None, except that the Selling
Stockholders loaned Mercari $11,000, on May 19, 2008; $10,000 on
November 18, 2008; $6,000 on May 29, 2009; and $4,000 on
October 13, 2009. These loans are represented by demand
promissory notes and bear interest at 5% per annum.
Schedule 4.21
None, except Mercari is incorporated
under the laws of the State of Colorado. Mercari is required to file
an annual report with the Colorado Secretary of State each year on or before
October 31. Mercari filed its most recent annual report with the
Colorado Secretary of State on September 1, 2009.
Schedule 4.22
None, except as disclosed on
Schedule 4.19.
-22-
DPEC
SCHEDULES
Schedule
3.2
|
Subsidiaries:
|
InvestBio,
Inc., a Delaware corporation and
|
DPEC
Capital, Inc., a Delaware corporation.
|
|
|
Incorporated
6/22/01
|
Incorporated
2/9/01
|
||
|
All
capital stock held by DPEC
|
All
capital stock held by DPEC
|
Schedule 3.5
Litigation: See
“Legal Proceedings” section of 14f-1 Information Statement.
-23-