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AGREEMENT OF SALE
This Agreement is entered into this 13th day of November,
1996, by and between Applied Cellular Technology, Inc., a
Missouri corporation ("Buyer"), Xxxx Xxxxxxx ("Seller") and
Universal Commodities Corp., a New Jersey corporation
("Acquiree").
Whereas, Seller owns 1,000 shares, no par value (the
"Acquiree Shares"), of the issued and outstanding common
stock of Acquiree (representing 100% of the currently issued
and outstanding common stock of Acquiree). Seller desires
to sell and Buyer desires to purchase 80% of the Acquiree
Shares (the "Sale Shares") such that said acquisition
qualifies as a tax free reorganization under Section 368 of
the Internal Revenue Code.
Now, Therefore, for the mutual consideration set out herein,
the parties agree as follows:
1. PURCHASE AND SALE OF SALE SHARES.
1.1 Seller shall sell to Buyer and Buyer shall
purchase from Seller the Sale Shares at a closing of such
sale (the "Closing") to be held at the place and on the date
provided in Section 5 hereof (the "Closing Date").
The purchase price (the "Price") for the Sale Shares shall
be such amount of shares of common stock of Buyer (which
will be registered by Buyer pursuant to Sections 1.3 and
Section 9 hereof) which have a value of $4,000,000 based on
the average closing bid price for such shares on November 7
and November 8, 1996 (the "Valuation Dates"). The Price
shall be payable to Seller as follows:
(a) At the Closing, Seller shall receive 581,818
shares of restricted common stock of Buyer (which will be
registered by Buyer pursuant to Section 1.3 hereof) which
has a value of $3,200,000 as of the Valuation Dates based on
the average closing bid price for such shares on the
Valuation Date; and
(b) Upon the first anniversary of the date of this
Agreement, Seller shall receive such amount of shares of
restricted common stock of Buyer (which are subject to the
registration rights pursuant to Section 9 hereof) which have
a value of $800,000 as of the Valuation Dates based on the
average closing bid price for such shares on the Valuation
Dates plus 5% interest on such amount accruing from the
Valuation Dates until the first anniversary of this
Agreement, if Acquiree's financial statements reflect that
Acquiree has earnings before income tax ("EBIT") equal to at
least $800,000 for such period. If, upon such first
anniversary of the date of this Agreement, EBIT of Acquiree
is less than $800,000, Buyer shall not be obligated to pay
Seller pursuant to this Section 1.2(b). Any earnings
attributable to entities obtained through acquisitions made
by Acquiree or by Buyer on behalf of or for the benefit of
Acquiree between the date of this Agreement and the first
anniversary of such date shall be used to calculate the EBIT
of Acquiree for purposes of this Section 1.2(b).
Intercompany charges or management fees (except reasonable
charges for working capital infusions) shall not be factored
into the calculation of EBIT of Acquiree for purposes of
this Section 1.2(b).
(c) If, on the effective date of the Registration
Statement (as defined herein) for the shares of Buyer's
common stock described in Section 1.2(a), the average
closing bid price of such shares decreased by more than 5%
from the closing bid price on the Valuation Dates, Buyer
agrees to issue additional common shares to Seller to equal
the $3,200,000 value as of the Valuation Dates.
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1.3
(a) Buyer agrees that it will prepare and file with the
Securities and Exchange Commission (the "Commission"), within
ten days after the date of this Agreement, a registration
statement with respect to the 581,818 shares of Buyer's common
stock issuable to Seller pursuant to Section 1.2(a) hereof
(the "Registration Statement"). Buyer shall use its
reasonable efforts to cause the Registration Statement to
become effective within ninety days after the date of this
Agreement. Buyer shall prepare and file with the Commission
such amendments and supplements to the Registration Statement,
including post-effective amendments, and the prospectus used
in connection therewith that may be necessary to keep such
Registration Statement effective for a period of not less than
nine months and to comply with the provisions of the
Securities Act of 1933, as amended, and the regulations
promulgated pursuant thereto (the "Act").
(b) Buyer shall use its reasonable efforts to cause all
securities registered pursuant to the Registration Statement
and Section 9 hereof to be listed on the NASDAQ National
Market system.
(c) In the event of the issuance of any stop order
suspending the effectiveness of the Registration Statement, or
any order suspending or preventing the use of any related
prospectus or suspending the qualification of any common stock
included in the Registration Statement, the Buyer will use its
reasonable best efforts to promptly obtain the withdrawal of
such order.
1.4 In connection with the Registration Statement
filed by Buyer pursuant to Section 1.3 hereof, Buyer shall
prepare and file documents under the laws of the State of
New Jersey as may be reasonably required to qualify the
shares of common stock of Buyer to be delivered to Seller
pursuant to this Agreement included in the Registration
Statement for offer and sale in said jurisdictions.
1.5 After the Closing Date, Buyer shall pay, or cause
to be paid, to Xxxxxxx Xxxxxxx and Xxxxxxx Xxxxxxx,
collectively, $1,500 per week until such time as both are
deceased. Upon the death of either such person, the full
payment shall be made to the survivor.
1.6 Buyer shall bear all costs, fees and expenses
involved in the preparation and filing of Registration
Statement, including without limitation, accounting and
auditing fees and expenses, expenses in connection with the
state qualifications specified above, filing fees, legal
counsel fees and expenses and printing expenses. Seller,
however, shall pay all applicable transfer taxes and
brokerage commissions as a result of any sale by Seller.
1.7 (a) In the event that any of the shares of common
stock of Buyer delivered hereunder are issued by means of
the Registration Statement, Buyer agrees to indemnify and
hold harmless Seller and his heirs, executors,
representatives and assigns, (an "Indemnified Person") (from
and against any and all claims, demands, actions, causes of
action, losses, costs, damages, liabilities and expenses,
including, without limitation, reasonable legal fees
(hereinafter referred to in the singular as a "claim" and in
the plural as "claims") based upon, arising out of or
resulting from any untrue statement of a material fact
contained in the Registration Statement, or any omission to
state therein a material fact necessary in order to make the
statements made therein, in light of the circumstances under
which they were made, not misleading, except insofar as such
claim is based upon, arises
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out of or results from information furnished to Buyer in
writing by Seller for use in connection with the
Registration Statement. Also, in that connection, Seller
agrees to indemnify and hold harmless Buyer, each of its
officers and directors (Buyer, its officers and directors
and any such other persons being referred to collectively as
"Indemnified Person") from and against any and all claims
based upon, arising out of or resulting from any untrue
statement of a material fact contained in the Registration
Statement or any omission to state therein a material fact
necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not
misleading to the extent that such claim is based upon,
arises out of or results from information furnished to Buyer
in writing by Seller for use in connection with the
Registration Statement. The indemnification set forth
herein shall be in addition to any liability which Buyer or
Seller, respectively, may otherwise have to the Indemnified
Person.
(b) Within five (5) days after receiving written
notice of any claim in respect of which an Indemnified
Person may seek indemnification under subsection 1.7(a)
above, such Indemnified Person shall submit notice thereof
to Buyer or Seller, as the case may be (sometimes referred
to as an "Indemnifying Person"). The omission of the
Indemnified Person so to notify the Indemnifying Person of
any such claim shall not relieve the Indemnifying Person
from any liability it may have hereunder except to the
extent that (i) such liability was caused or increased by
such omission, or (ii) the ability of the Indemnifying
Person to reduce such liability was adversely affected by
such omission. The Indemnified Person and the Indemnifying
Person shall cooperate with, and assist, one another in the
defense of any claim and any action, suit or proceeding
arising in connection therewith; provided, however, that the
Indemnifying Person shall have the right to investigate and
defend any claim as the Indemnified Person shall have the
right to employ separate counsel and to participate in the
defense of any claim, but the fees and expenses of such
counsel shall not be at the expense of the Indemnifying
Person. No settlement of any claim for indemnification
under this Section 1.7 shall be made without the consent of
the Indemnifying Person.
1.8 At the Closing, Seller will deliver a certificate
or certificates representing the Sale Shares duly endorsed
so as to transfer title to the Sale Shares to Buyer, free
and clear of all claims and encumbrances. The Sale Shares
are not registered under the Act. The certificate or
certificates representing the Sale Shares delivered to Buyer
shall bear on its face the following restrictive legend:
"No sale, offer to sell or transfer
of the shares represented by this
certificate shall be made unless a
registration statement under the
Securities Act of 1933, as amended, with
respect to such shares is then in effect
or an exemption from the registration
requirements of such Act is then in fact
applicable to such shares."
2. PUT OPTION.
(a) The Buyer hereby grants to Seller a put option
(the "Put") for the consideration of $10.00 to require the
Buyer to purchase the remaining issued and outstanding
Acquiree Shares (representing 20% of the currently
outstanding common shares). The Put shall be exercisable
by Seller at any time after the fifth anniversary of the
Closing Date.
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Within forty-five (45) days after Seller exercises the
Put, Buyer shall purchase the remaining 20% of the Acquired
Shares for a purchase price equal to five times 20% of the
average EBIT of the Acquiree for the calendar years 2000 and
2001 (the "Put Price"). Notwithstanding the preceding
sentence to the contrary, the Put Price shall be at least
$1,000,000. The Put Price shall be payable to Seller, at
the election of Seller in his sole discretion, in cash
and/or shares of common stock of Buyer which shall be
subject to the registration rights set forth in Section 9
hereof. Buyer shall use its best efforts to register such
shares within a reasonable period of time after the exercise
of the Put.
(b) After the Closing Date, Buyer shall operate
Acquiree as a wholly-owned subsidiary and any earnings
attributable to entities obtained through acquisitions made
by Acquiree or by Buyer on behalf of or for the benefit of
Acquiree after the Closing Date shall be used to calculate
the EBIT of Acquiree for purposes of calculating the Put
Price. Intercompany charges or management fees (except
reasonable charges for working capital infusions) shall not
be factored into the calculation of EBIT of Acquiree for
purposes of calculating the Put Price.
3. REPRESENTATIONS OF SELLER.
Seller hereby represents and warrants, to the extent of the
facts known to Seller and Acquiree, that, effective this
date and the Closing Date, the representations listed below
are true and correct.
3.1 Seller is the sole owner of the Acquiree Shares
which constitute all of the issued and outstanding shares of
capital stock of Acquiree; such Acquiree Shares are free
from claims, liens or other encumbrances; and Seller has the
unqualified right to transfer and dispose of the Acquiree
Shares.
3.2 The Sale Shares constitute validly issued shares
of Acquiree fully-paid and nonassessable.
3.3 Annexed hereto as Exhibit 3.3 is the unaudited
financial statements dated September 30, 1996 of the
Acquiree. The financial statements in Exhibit 3.3 are
substantially correct and complete. The financial
statements present fairly the financial condition of
Acquiree as of the respective dates of said balance sheets
and the results of operations for the respective periods
indicated in said statements of income and retained earnings
and, in the case of each such interim statement, is subject
to year-end adjustments consistent with past practice.
3.4 To the best of Seller's and Acquiree's knowledge,
there are no actions, suits, proceedings or investigations
(whether or not purportedly on behalf of Acquiree) pending
or, threatened against or affecting Acquiree, at law, or in
equity or admiralty, or before or by any federal, state,
municipal or other governmental department, commission,
board, bureau agency or instrumentality, domestic or
foreign, which involve the likelihood of any adverse
judgment of liability, not fully covered by insurance, in
excess of $5,000 in any one case or $10,000 in the
aggregate, or which may result in any material adverse
change (aside from a monetary adverse judgment or liability)
in the business, operations, properties or assets or in the
condition, financial or otherwise), of Acquiree, except as
listed and described in Exhibit 3.4 annexed hereto. To the
best of Seller's and Acquiree's knowledge, Acquiree is not
in default with respect to any order, writ, injunction or
decree of any court or federal, state, municipal or other
governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign.
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3.5 Acquiree has, to its best knowledge, complied in
all material respects with all laws, regulations and
judicial or administrative tribunal orders applicable to its
business of which it is aware, except where the failure to
comply would not cause a material adverse effect to the
business and operations of Acquiree.
3.6 All federal, state and local tax returns required
to be filed by Acquiree have been duly filed. Federal
income tax returns of Acquiree have been submitted to the
Internal Revenue Service ("IRS") for all past fiscal years
through the calendar year ended in 1995. All deficiencies
proposed by any taxing authority have either been paid or
settled or are included in the amounts for accrued taxes
shown on the respective balance sheet (part of Exhibit 3.3
annexed hereto).
3.7 Acquiree and Seller agree that any and all tax
deficiencies disclosed on the balance sheet of Acquiree will
be paid or settled prior to the Closing Date.
3.8 Since the date of the balance sheet, dated
September 30, 1996, there has not occurred:
(i) any material and adverse change in the
financial condition or operations of
Acquiree;
(ii) any damage, destruction or loss to or of
any of the material assets or properties
owned or leased by Acquiree;
(iii) the creation or attachment of any
lien against any of the currently issued and
distributed common stock of Acquiree;
(iv) any waiver, release, discharge,
transfer, or cancellation by Acquiree of any
rights or claims of material value;
(v) any issuance by Acquiree of any
securities, or any merger or consolidation of
Acquiree with any other person, or any
acquisition by Acquiree of the business of
any other person;
(vi) any incurrence, assumption or guarantee
by Acquiree of any indebtedness or liability
other than a $150,000 loan or similar
distribution to Seller or in the ordinary
course of business;
(vii) any declaration, setting aside or
payment by Acquiree of any dividends on, or
any other distribution with respect to, any
capital stock of Acquiree or any repurchase,
redemption, or other acquisition of any
capital stock of Acquiree; or
(viii) (A) any payment of any bonus,
profit sharing, pension or similar payment or
arrangement or special compensation to any
employee of Acquiree, except in the ordinary
course of the business of Acquiree, and
except for certain weekly payments to Xxxxxxx
Xxxxxxx and Xxxxxxx Xxxxxxx or (B) any
increase in the compensation payable or to
become payable to any employee of Acquiree;
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3.9 Except as set forth in Exhibit 3.9 annexed hereto,
the execution and carrying out of this Agreement will not
conflict with, or result in any breach of any of the terms
of any contract, or create a charge or encumbrance upon any
of the properties or assets, or outstanding stock of
Acquiree or violate the corporate charter, by-law,
indenture, mortgage or lease to which Acquiree or any of its
stockholders is a party or by which it is bound. The
execution and carrying out of this Agreement by Seller or
Acquiree will not violate any provision of law.
3.10 To the best knowledge of Seller and Acquiree, none
of the written information and documents which have been or
will be furnished by Acquiree or by any representatives of
Acquiree to Buyer or any of the representatives of Buyer in
connection with the transactions contemplated by this
Agreement contains or will contain, as the case may be, any
untrue statement of a material fact, or omits or will omit
to state a material fact necessary in order to make the
statements therein not misleading in light of the
circumstances in which made.
3.11 The representations and warranties made
hereinabove in this Section 3 will be correct in all
material respects on and as of the Closing Date with the
same force and effect as though such representations and
warranties had been made on the Closing Date.
3.12 The Acquiree is authorized to issue 2,500 shares
of common stock, no par value, of which 1,000 shares are
issued and outstanding. Acquiree has only one class of
capital stock and all outstanding shares have been duly
authorized, validly issued and are fully paid and
nonassessable with no personal liability attaching to the
ownership thereof. There are no outstanding convertible
securities, warrants, options or commitments of any nature
which may cause authorized but unissued shares to be issued
to any person.
3.13 Acquiree shall maintain $150,000 of inventory as
of the Closing Date. From the date of this Agreement
through the Closing Date, Acquiree may dispose of any
inventory, in its sole discretion, which is in excess of
$150,000.
4. REPRESENTATIONS BY BUYER.
Buyer warrants and represents, to the extent of the facts
known to Buyer, that, effective this date and the Closing
Date, the representations listed below are true and correct.
4.1 Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Missouri.
4.2 The Board of Directors of Buyer have duly approved
this Agreement and Buyer has the full power and authority to
make, execute, deliver and perform this Agreement and any
other instruments and documents required or contemplated
hereby and thereby, including but not limited to the
issuance of the shares of Buyer's common stock to Seller.
Such execution, performance and consummation have been duly
authorized by all necessary corporate action on the part of
the Buyer.
4.3 The shares of Buyer's common stock deliverable to
Seller pursuant to this Agreement shall be validly issued
and outstanding, fully paid and nonassessable.
4.4 The authorized capital stock of Buyer consists of
Twenty Million (20,000,000) shares of Common Stock, $.001
par value, 4,901,866 of which have been validly issued and
are outstanding. Annexed hereto as Exhibit 4.4 is a true,
complete and
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accurate description of all outstanding convertible
securities, warrants, options or commitments of any nature
for the issuance of any capital stock of Buyer issued to any
person by Buyer. At the Closing, Buyer shall issue certain
stock options to acquire Buyer's common stock to the persons
listed on Exhibit 3.12 of this Agreement. Such options may
be exercised at the average closing bid price of the
Valuation Dates.
4.5 Annexed hereto as Exhibit 4.5 is the unaudited
financial statements dated September 30, 1996. The
financial statements in Exhibit 4.5 are substantially
correct and complete and have been prepared in conformity
with generally accepted accounting principles applied on a
consistent basis. The financial statements present fairly
the financial condition of Buyer as of the respective dates
of said balance sheets and the results of operations for the
respective periods indicated in said statements of income
and retained earnings and, in the case of each such interim
statement, is subject to year-end adjustments consistent
with past practice.
4.6 To the best of Buyer's knowledge, there are no
actions, suits, proceedings or investigations (whether or
not purportedly on behalf of Buyer) pending or, threatened
against or affecting Buyer, at law, or in equity or
admiralty, or before or by any federal, state, municipal or
other governmental department, commission, board, bureau
agency or instrumentality, domestic or foreign, which
involve the likelihood of any adverse judgment of liability,
not fully covered by insurance, in excess of $5,000 in any
one case or $10,000 in the aggregate, or which may result in
any material adverse change aside from a monetary adverse
judgment or liability) in the business, operations,
properties or assets or in the condition, financial or
otherwise, of Buyer, except in each as listed and described
in Exhibit 4.6 annexed hereto. To the best of Buyer's
knowledge, Buyer is not in default with respect to any
order, writ, injunction or decree of any court or federal,
state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality,
domestic or foreign.
4.7 Buyer has complied in all material respects with
all laws, regulations and judicial or administrative
tribunal orders applicable to its business of which it is
aware except where the failure to comply would not cause a
material adverse effect to the business and operations of
Buyer.
4.8 All federal, state and local tax returns required
to be filed by Buyer have been duly filed. Federal income
tax returns of Buyer have been submitted to the IRS for all
past fiscal years through the fiscal year ended in 1995.
All deficiencies proposed by any taxing authority have
either been paid or settled or are included in the amounts
for accrued taxes shown on the respective balance (part of
Exhibit 4.5 annexed hereto).
4.9 Since the date of the balance sheet, dated
September 30, 1996, there has not occurred:
(i) any material and adverse change in the
financial condition or operations of Buyer;
(ii) any damage, destruction or loss to or of
any of the material assets or properties
owned or leased by Buyer;
(iii) the creation or attachment of any
lien against the issued and outstanding
common stock of Buyer;
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(iv) any waiver, release, discharge,
transfer, or cancellation by Buyer of any
rights or claims of material value;
(v) any issuance by Buyer of any securities,
or any merger or consolidation of Buyer with
any other person, or any acquisition by Buyer
of the business of any other person;
(vi) any incurrence, assumption or guarantee
by Buyer of any indebtedness or liability,
except in the ordinary course of business;
(vii) any declaration, setting aside or
payment by Buyer of any dividends on, or any
other distribution with respect to, any
capital stock of Buyer or any repurchase,
redemption, or other acquisition of any
capital stock of Buyer;
(viii) (A) any payment of any bonus,
profit sharing, pension or similar payment or
arrangement or special compensation to any
employee of Buyer, except in the ordinary
course of the administration of Buyer, or (B)
any increase in the compensation payable or
to become payable to any employee of Buyer;
or
4.10 Except as set forth in the documents listed or
referred to in Exhibits hereto, the execution and carrying
out of this Agreement will not conflict with, or result in
any breach of any of the terms of any contract, or create a
charge or encumbrance upon any of the properties or assets,
or outstanding stock of Buyer or violate the corporate
charter, by-law, indenture, mortgage or lease to which Buyer
or any of its stockholders is a party or by which it is
bound. The execution and carrying out of this Agreement by
Buyer will not violate any provision of law.
4.11 None of the written information and documents
which have been or will be furnished by Buyer or by any
representatives of Buyer to Seller or any of the
representatives of Seller in connection with the
transactions contemplated by this Agreement contains or will
contain, as the case may be, any untrue statement of a
material fact, or omits or will omit to state a material
fact necessary in order to make the statements therein not
misleading in light of the circumstances in which made..
4.12 The representations and warranties made
hereinabove in this Section 4 will be correct in all
material respects on and as of the Closing Date with the
same force and effect as though such representations and
warranties had been made on the Closing Date.
4.13 Buyer is fully aware of the condition and
prospects, financial and otherwise, of the Acquiree, having
been supplied with such financial and other data relating to
the Acquiree as Buyer considered necessary and advisable to
enable it to form a decision concerning the purchase herein
provided.
4.14 Buyer is fully aware that the Sale Shares, when
delivered, will not have been registered under the Act; that
accordingly no sale, offer to sell or transfer of the Sale
Shares shall be made unless a registration statement under
the Act with respect to the Sale Shares is then in effect or
an exemption from the registration requirements of the Act
is then in fact applicable to the Sale Shares or, in the
opinion of Acquiree's counsel, registration is not required.
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4.15 Buyer has been fully advised by Seller that Seller
will sell the Sale Shares to Buyer without registration
under the Act on the basis of the statutory exemption in
Section 4(2) of the Act relating to transactions not
involving a public offering and that Seller's reliance upon
the statutory exemption is based in large part upon Buyers
representations made in this Agreement.
4.16 Buyer is acquiring the Sale Shares for investment
for its own account and not with a view to resell or
otherwise distribute the Sale Shares. In making the
foregoing representations, Buyer understands that, in the
view of the Securities and Exchange Commission, the
statutory exemption under Section 4(2) would not be
available if, notwithstanding Buyer's representations, it
had in mind merely acquiring the Sale Shares for resale upon
the occurrence or nonoccurrence of some predetermined event.
4.17 Buyer has the full right, power and authority to
purchase the Sale Shares in accordance with the terms of
this Agreement and otherwise to consummate and close the
transaction provided for in this Agreement in the manner and
upon the terms herein specified.
4.18 Buyer is acquiring the Sale Shares for the purpose
of controlling Acquiree.
4.19 Buyer is subject to the reporting requirements
of Section 13 or 15(d) of the Securities Exchange Act of
0000 (xxx "Xxxxxxxx Xxx"). Buyer has filed or will file
all reports required to be filed under the Exchange Act
during the twelve months preceding the Closing Date and for
such period that Seller holds such restricted common stock
of Buyer. Buyer has provided copies of all such documents
to Seller and all statements contained in such documents
were true and correct at the time each such documents was
filed with the Commission.
4.20 After the Closing Date, Buyer shall cause the
Board of Directors of Acquiree to consist of Seller, Xxxxxx
Xxxxxxxx and Xxxxxxx Xxxxxxxx until such time as Seller
exercises the Put.
4.21 After the Closing Date, Buyer shall use its best
efforts to cause Seller to be named to the Board of
Directors of Buyer.
5. CLOSING DATE.
The Closing Date herein referred to shall occur on
November 13, 1996 and the Closing shall take place at such
place as the parties hereto may mutually agree upon. At
the Closing, Buyer will be provided with and accept delivery
of the Sale Shares, and in connection therewith, will make
payment to Seller of the Price in accordance with Section
1.2. Certain closing documents may be delivered subsequent
to the Closing Date upon the mutual agreement of the parties
hereto.
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6. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER.
All obligations of Seller under this Agreement are subject
to the fulfillment, prior to or as of the Closing Date, of
each of the following conditions:
6.1 The negotiation and execution of employment
agreements with Seller and Xxxxxx Xxxxxxxx on terms and
conditions agreeable to the parties thereto providing for a
base salary, benefits and mutually agreed incentive
compensation based on performance measures.
6.2 The representations and warranties by Buyer
contained in this Agreement or in any certificate or
document delivered to Seller pursuant to the provisions
hereof shall be true in all material respects at and as of
the time of Closing as though such representations and
warranties were made at and as of such time and Buyer shall
deliver to Seller at Closing a certificate signed by an
executive officer of Buyer certifying to such matters.
6.3 Buyer shall have performed and complied with all
covenants, agreements, and conditions required by this
Agreement to be performed or complied with by him prior to
or at the Closing including the payment of the Price in
accordance with the terms hereof.
6.4 Seller shall have obtained the resignations of all
present officers and directors except Seller and Xxxxxx
Xxxxxxxx.
.
6.5 All instruments and documents delivered to Seller
pursuant to the provisions hereof shall be reasonably
satisfactory to legal counsel for Seller.
6.6 All guarantees of Seller for the benefit of
Acquiree with respect to certain corporate indebtedness of
Acquiree shall be released or if not released within a
reasonable amount of time after the Closing, Buyer shall
indemnify and hold harmless Seller in against any and all
liabilities in connection with such guarantees.
7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER.
All obligations of Buyer under this Agreement are subject to
the fulfillment, prior to the or at the Closing on the
Closing Date, of each of the following conditions:
7.1 Buyer shall be afforded the opportunity to have
discussion with suppliers and customers of the Acquiree,
with the understanding that all discussions and
communications with such suppliers and customers will be
with the consent and cooperation of the Acquiree.
7.2 The representations and warranties by Seller
contained in this Agreement or in any certificate or
document delivered to Buyer pursuant to the provisions
hereof shall be true at and as of the time of Closing as
though such representations and warranties were made at and
as of such time.
7.3 Acquiree shall have prepared and filed all
governmental, tax or related returns and reports due or
required to be filed and have arranged for payment of all
taxes or assessments which have become due as of Closing.
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7.4 Acquiree and Seller shall have performed and
complied with all other covenants, agreement and conditions
required by this Agreement to be performed or complied with
by them prior to or at the Closing.
8. DOCUMENTS AT CLOSING.
At the Closing, the following transactions shall occur, all
of such transaction being deemed to occur simultaneously:
8.1 Seller and Acquiree, as the case may be, will
deliver, or cause to be delivered, to Buyer the following:
a. stock certificates for the Sale Shares, duly
endorsed in blank.
b. all records of Acquiree, including without
limitation such books and records, charter documents, stock
transfer book and New Jersey certificate of good standing,
as may reasonably be available to Seller and requested by
Buyer.
c. such other instruments, documents and
certificates, if any, as are required to be delivered
pursuant to the provisions of this Agreement or which may be
reasonably requested in furtherance of the provisions of
this Agreement;
8.2 Buyer will deliver, or cause to be delivered to
Seller the following:
(a) Stock certificates representing Buyer's common
stock issuable to the Seller pursuant to Section 1.2(a)
hereof.
(b) Executed employment agreements between Buyer and
each of Seller and Xxxxxx Xxxxxxxx.
(c) A certificate of good standing from the State of
Missouri and a Secretary's Certificate of Buyer certifying
as true and correct a copy of Board of Directors resolutions
authorizing the execution, delivery and performance of this
Agreement and the related transactions.
(d) Such other instruments and documents as are
required to be delivered pursuant to the provisions of this
Agreement or which may be reasonably requested in
furtherance of the provisions of this Agreement.
9. REGISTRATION RIGHTS
9.1 Whenever the Buyer proposes to register any of its
securities under the Act and the registration form to be
used may be used for the registration of the securities
issued to Seller pursuant to Section 1.2(b) and 2(a) (the
"Registerable Securities"), the Buyer will give prompt
written notice (in any event within three business days
after receipt of notice of any exercise of demand
registration rights from any other person) to the Seller of
its intention to effect such a registration and will include
in such registration all Registerable Securities with
respect to which the Buyer has received written request for
inclusion within fifteen days after the receipt of the
Buyer's notice.
9.2 All costs and expenses associated with the
registration of the Registerable Securities will be paid by
the Buyer.
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9.3 If the registration described in this Section 9 is
an underwritten primary registration on behalf of the Buyer,
and the managing underwriters advise the Buyer in writing
that in their opinion the number of securities requested to
be included in such registration exceeds the number which
can be sold in an orderly manner in such offering within a
price range that is acceptable to the Buyer, the Buyer will
include in such registration (a) first, on a prorata basis,
the securities the Buyer proposes to sell and the
Registerable Securities requested to be included in such
registration, and (b) secondly, other securities requested
to be included in such registration.
9.4 If the registration described in this Section 9 is
an underwritten secondary registration on behalf of holders
of the Buyer's securities, and the managing underwriters
advise the company in writing that in their opinion the
number of securities requested to be included in such
registration exceeds the number which can be sold in an
orderly manner in such offering within a price range
acceptable to the holders initially requesting such
registration, the company will include in such registration
(a) first, the securities requested to be included therein
by the holders requesting such registration and the
Registerable Securities requested to be included in such
registration, and (b) second, other securities requested to
be included in such registration.
10. ADJUSTMENTS TO THE PRICE AND PUT PRICE.
In case at anytime prior to the effective date of the
Registration Statement, Buyer shall in any manner issue
stock or grant (whether directly or by assumption in a
merger or otherwise) any warrants or other rights to
subscribe for or to purchase, or any options for the
purchase of, common stock of the Buyer or any stock or
security convertible into or exchangeable for common stock
of the Buyer (such warrants, rights or options being called
"Options" and such convertible or exchangeable stock or
securities being called "Convertible Securities") whether or
not such Options or the right to convert or exchange any
such Convertible Securities are immediately exercisable, and
the price per share for which the Buyer's common stock is
sold, issuable upon the exercise of such Options or upon the
conversion or exchange or such Convertible Securities shall
be less than the public offering price of the Buyer's common
stock issuable to Seller pursuant to the Registration
Statement then the total number of shares of Buyer's common
stock issuable to the Seller pursuant to Section 1.2(a) in
the Registration Statement shall be increased to an amount
equal to (i) $3,200,000 divided by (ii) the lowest price per
share of Buyer's common stock offered to third parties which
are sold, issuable upon the exercise of such Options or upon
the conversion or exchange of such Convertible Securities.
11. MISCELLANEOUS
11.1 The respective representations of Seller and Buyer
contained herein or in any certificates delivered prior to
or at Closing shall survive for a period of one year from
the Closing Date except that this Section 11.1 shall not
affect the validity of Section 2 hereof in any way.
11.2 Further Assurances. At any time, and from time
to time, after the effective date of this Agreement, each
party will execute such additional instruments and take such
action as may be reasonably requested by the other party to
confirm or perfect title to any property transferred
hereunder or otherwise to carry out the intent and purposes
of this Agreement.
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11.3 Waiver. Any failure on the part of any party
hereto to comply with any of its obligations, agreements or
conditions hereunder may be waived in writing by the party
to whom such compliance is owed.
11.4 Arbitration. Any and all disputes and
differences between or among the parties with respect to the
construction or performance of the terms of this Agreement
which cannot be resolved amicably shall be resolved by
arbitration before the American Arbitration Association in
accordance with its rules then obtaining sitting in New
Jersey.
11.5 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have
been given if delivered in person or if sent by prepaid
first class registered or certified mail, return receipt
requested, fax or recognized courier then upon receipt
thereof to the following addresses:
To Seller:
Xxxx Xxxxxxx
c/o Universal Commodities Corp.
0000 Xxxxx 000 Xxxxx
Xxxxxxxxxx, XX 00000
with copies to:
Xxxxx X. Xxxxxx, Esquire
Saul, Ewing, Xxxxxx and Xxxx
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxxxx 00000
To Acquiree:
Universal Commodities Corp.
0000 Xxxxx 000 Xxxxx
Xxxxxxxxxx, XX 00000
To Buyer:
Applied Cellular Technology, Inc.
Nixa Professional Center
Xxx 000 & XX
Xxxxx 0
Xxxx, Xxxxxxxx 00000
with copies to:
Xxxx X. Xxxxxx
Attorney At Law
0000 Xxxxx Xxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxx 00000
11.6 Headings. The section and subsection headings in
this Agreement are inserted for convenience only and shall
not affect in any way the meaning or interpretation of this
Agreement.
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11.7 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which
shall be deemed an original, but all of which together shall
constitute one and the same instrument.
11.8 Governing Law. This Agreement shall be governed
by the laws of the State of New Jersey.
11.9 Binding Effect. This Agreement shall be binding
upon the parties hereto and inure to the benefit of the
parties, their respective heirs, administrators, executors,
successors and assigns.
11.10 Entire Agreement. This Agreement is the
entire agreement of the parties covering everything agreed
upon or understood in the transaction. There are no oral
promises, conditions, representations, understandings,
interpretations or terms of any kind as conditions or
inducements to the execution hereof.
11.11 Severability. If any part of this Agreement
is deemed to be unenforceable the balance of this Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement
the day and year first above written.
SELLER:
/s/ Xxxx Xxxxxxx
------------------------------
Xxxx Xxxxxxx
ACQUIREE:
Universal Commodities Corp.
/s/ Xxxx Xxxxxxx
------------------------------
By: President
BUYER:
Applied Cellular Technology, Inc.
/s/ Xxxxxxx X. Xxxxxxxx
------------------------------
By:
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