ACQUISITION AGREEMENT
ACQUISITION AGREEMENT dated July 23, 2004 between Valcor Resources,
Inc., a Delaware corporation ("Acquiror"), and Valcor S.A. Nicaragua, a
corporation organized and existing under the laws of the Republic of Nicaragua
(the "Company").
This Agreement sets forth the terms and conditions upon which Valcor
S.A. Nicaragua will sell and convey to Valcor Resources, Inc., and Valcor
Resources, Inc. will purchase from Valcor S.A. Nicaragua, the certain property
and assets of Valcor S.A. Nicaragua described on Schedule A hereto as
hereinafter set forth. As used in this Agreement, capitalized terms have the
meanings ascribed to them in Article II.
In consideration of the mutual agreements contained herein, intending
to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
SALE OF ASSETS
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1.01. Assets To Be Sold. Subject to the terms and conditions of this
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Agreement, at the Closing, the Company, by ▇▇▇▇ of Sale and Assignment in the
form of Exhibit A hereto sells,,assigns and conveys all of it's rights including
the timber , hydro-carbon and mineral rights described in Exhibit B hereto and
other instruments of conveyance and transfer conveying the other property
described in Exhibit C hereto, will sell to Acquiror and assign, transfer and
deliver to Acquiror or other entities designated by Acquiror, the properties,
assets, goodwill and business as a going concern described in such exhibits (the
"Assets").
1.02. Consideration. Subject to the terms and conditions of this
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Agreement, in reliance on the representations, warranties and agreements of the
Company contained herein, and in consideration of the sale, assignment, transfer
and delivery of Assets, Acquiror shall deliver to the Company: twelve million
shares of it's $0.001Common Stock
1.03. Closing. The Closing of the transactions contemplated by this
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Agreement will take place at the offices of Ruffa & Ruffa, P.C. on July 23 ,
2004 at 9;00A.M., except that any party hereto may, by giving two days' written
notice to all other parties hereto, defer the
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Closing to a date not later than July 31,2004, in order that such party may
satisfy any of the conditions required to be satisfied at or prior to the
Closing.
(a) At the Closing, the Company will deliver to Acquiror (i) a
duly executed ▇▇▇▇ of Sale and Assignment in the form annexed hereto as Exhibit
A; (ii) all documents of title necessary to transfer ownership to Acquiror of
the Assets; (iii) assignments of all trademarks, trade names and assumed names
and all applications therefor which are included in Section 3.14 of the
Disclosure Schedule; (iv) executed copies of the consents referred to in Section
8.11 hereof; (v) the opinion of counsel referred to in Section 8.09 hereof; (vi)
all such other deeds, endorsements, assignments and other instruments as, in the
opinion of Acquiror's counsel, are necessary to vest in Acquiror good and
marketable title to the Assets; and (vii) all other previously undelivered
documents required to be delivered by the Company to Acquiror at or prior to the
Closing in connection with the transactions contemplated by this Agreement.
(b) At the Closing, there will be delivered to the Company by
Acquiror (i) the consideration referred to in Section 1.02 hereof, and (ii) all
previously undelivered documents required to be delivered by Acquiror to the
Company at or prior to the Closing.
1.04. Further Assurances. After the Closing, the Company shall from
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time to time, at the request of Acquiror and without further cost or expense to
Acquiror, execute and deliver such other instruments of conveyance and transfer
and take such other actions as Acquiror may reasonably request, in order to more
effectively consummate the transactions contemplated hereby and to vest in
Acquiror good and marketable title to the assets being transferred hereunder
(including, without limitation, assistance in the collection or reduction to
possession of any of such assets).
ARTICLE II
RELATED MATTERS
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2.01. Change of Name. In connection with enabling Acquiror, at or
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as soon as practicable after the Closing, to be named "Valcor Resources, Inc.,"
the Company will at Acquiror's expense, at or prior to the Closing, execute and
deliver to Acquiror all consents
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related to such change of name as may be reasonably requested by Acquiror, and
will otherwise reasonably cooperate with Acquiror.
2.02. Confidentiality. Each party hereto will hold and will cause
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its consultants and advisors to hold in strict confidence, unless compelled to
disclose by judicial or administrative process or, in the opinion of its
counsel, by other requirements of law, all documents and information concerning
the other party furnished it by such other party or its representatives in
connection with the transactions contemplated by this Agreement (except to the
extent that such information can be shown to have been (i) previously known by
the party to which it was furnished, (ii) in the public domain through no fault
of such party, or (iii) later lawfully acquired from other sources by the party
to which it was furnished), and each party will not release or disclose such
information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors in connection with this
Agreement. If the transactions contemplated by this Agreement are not
consummated, such confidence shall be maintained except to the extent such
information comes into the public domain through no fault of the party required
to hold it in confidence, and such information shall not be used to the
detriment of, or in relation to any investment in, the other party and all such
documents (including copies thereof) shall be returned to the other party
immediately upon the written request of such other party. Each party shall be
deemed to have satisfied its obligation to hold confidential information
concerning or supplied by the other party if it exercises the same care as it
takes to preserve confidentiality for its own similar information.
2.03. Mail Received After Closing. Following the Closing, the Company
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promptly shall forward to Acquiror all mail addressed to the Company or any
Company Subsidiary relating to the Assets in any way.
2.04. Definitions. For all purposes of this Agreement, except as
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otherwise expressly provided or unless the context otherwise requires:
"Acquiror" means Valcor Resources, Inc, a corporation formed under the
laws of the State of Delaware.
The terms "Affiliate" and "Associate" have the meanings prescribed by
Rule 12b-2 of the regulations promulgated pursuant to the Securities Exchange
Act.
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"Balance Sheet" means the unaudited consolidated balance sheet of the
Company referred to in Section 3.07(ii) of this Agreement.
"▇▇▇▇ of Sale" means the ▇▇▇▇ of sale delivered by the Company
pursuant to Section 1.03(a)(i).
"Closing" means the closing referred to in Section 1.03 of this
Agreement.
"Closing Date" means the date on which the Closing occurs.
"Code" means the Internal Revenue Code of 1954, as amended.
"Company" means Valcor S.A. Nicaragua, a corporation formed under the
laws of the Republic of Nicaragua.
"Company Affiliate" means each Affiliate of the Company.
"Company Subsidiary" means any corporation of which the Company (a)
directly or indirectly owns or controls at the time outstanding shares of stock
which have in ordinary circumstances (not dependent upon the happening of a
contingency) voting power to elect a majority of the board of directors of said
corporation, or (b) of which shares of stock of the character described in the
foregoing clause (a) shall at the time be owned or controlled directly or
indirectly by the Company and one or more Company Subsidiaries as defined in the
foregoing clause (a) or by one or more such Company Subsidiaries.
"Disclosure Schedule" means the document delivered by the Company to
the Acquiror simultaneously with the execution hereof containing the information
required to be included therein pursuant to this Agreement.
"Exchange Act" means Securities Exchange Act of 1934, as amended.
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"Financing" means the financing described in Exhibit E hereto to be
obtained by Acquiror in connection with the consummation of the transactions
contemplated by this Agreement.
"Organizational Documents" means the Articles of Incorporation and
By-Laws of the Company and such other documents filed with any national or local
governing body of Nicaragua evidencing the incorporation and good standing of
the Company.
"Prospectus" means the prospectus included in the Registration
Statement.
"Registration Schedule" means a list setting forth the name of each
Company Affiliate and the amount of company stock owned by each Company
Affiliate.
"Registration Statement" means the registration statement referred to
in Section 6.03 of this Agreement.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
Certain terms used principally in Section 3.31 of this Agreement are
defined in that section. The plural of any defined term shall have a meaning
correlative to such defined term.
2.05 Access to Books and Records.
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(a). The Company agrees that on and after the Closing, during
normal business hours, it will permit Acquiror and their auditors, through their
authorized representatives, to have access to and examine and take copies of all
books and records of the Company relating to the Assets which are not delivered
to Acquiror pursuant hereto (including but not limited to correspondence,
memoranda, books of account and the like) and relating to events occurring prior
to the date hereof and to transactions or events occurring subsequent to the
date hereof which are related to or arise out of transactions or events
occurring prior to the date hereof.
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(b). Acquiror agrees to cooperate with the Company, at the
Company's expense, and to make available to the Company such documents, books,
records or information relating to the Assets or to the Company prior to the
Closing as the Company may reasonably require after the Closing in connection
with any tax determination or contractual obligations to third parties or to
defend or prepare for the defense of any claim against the Company or to
prosecute or prepare for the prosecution of claims against third parties by the
Company [relating to the conduct by the Company of the business which the Assets
comprise] or in connection with any governmental investigation of the Company or
any of its affiliates.
(c). Each party will direct its employees to render any
assistance which the other party may reasonably request in examining or
utilizing records referred to in this Section 2.05, provided that each party
shall be reimbursed by the other for any out-of-pocket expenses which it may
incur in rendering the services provided for in this Section 2.05. Each party
agrees not to destroy any files or records which are subject to this Section
2.05 without giving reasonable notice to the other, and within 15 days of
receipt of such notice, such other party may cause to be delivered to it the
records intended to be destroyed, at such other party's expense.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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The Company and each of ValdemiroPacheco, ▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ hereby, jointly and severally, represent, covenant and warrant to
Acquiror as follows:
3.01. Corporate Organization; Etc. The Company is a corporation duly
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organized, validly existing and in good standing under the laws of the Republic
of Nicaragua and has full corporate power and authority to carry on its business
as it is now being conducted and to own the properties and assets it now owns;
is duly qualified or licensed to do business as a
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foreign corporation in good standing in the jurisdictions listed in Section 3.01
of the Disclosure Schedule, which are all the jurisdictions in which such
qualification is required. The copies of the Organizational Documents heretofore
delivered to Acquiror are complete and correct copies of such instruments as
presently in effect.
3.02. Subsidiaries and Affiliates. Section 3.02(a) of the Disclosure
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Schedule sets forth the name, jurisdiction of incorporation and capitalization
of each Company Subsidiary and the jurisdictions in which each Company
Subsidiary is qualified to do business. Except as disclosed in Section 3.02(b)
of the Disclosure Schedule, the Company does not own, directly or indirectly,
any capital stock or other equity securities of any corporation or have any
direct or indirect equity or ownership interest in any business not listed in
Section 3.02(a) of the Disclosure Schedule. Except as and to the extent set
forth in Section 3.02(a) of the Disclosure Schedule, all the outstanding capital
stock of each Company Subsidiary is owned directly or indirectly by the Company
free and clear of all liens, options or encumbrances of any kind and all
material claims or charges of any kind, and is validly issued, fully paid and
nonassessable, and there are no outstanding options, rights or agreements of any
kind relating to the issuance, sale or transfer of any capital stock or other
equity securities of any such Company Subsidiary to any person except the
Company. Each Company Subsidiary (i) is a corporation duly organized, validly
existing and in good standing under the laws of its state of incorporation; (ii)
has full corporate power and authority to carry on its business as it is now
being conducted and to own the properties and assets it now owns; and (iii) is
duly qualified or licensed to do business as a foreign corporation in good
standing in every jurisdiction in which such qualification is required. The
Company has heretofore delivered to Acquiror complete and correct copies of the
certificate of incorporation and by-laws of each Company Subsidiary, as
presently in effect.
3.03. Authorization, Etc. The Company has full corporate power and
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authority to enter into this Agreement and to carry out the transactions
contemplated hereby. The Board of Directors of the Company has taken all action
required by law, the Company's Organizational Documents or otherwise to be taken
by them to authorize the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, and, subject to obtaining
the necessary approval of stockholders of the Company, this Agreement is a valid
and binding agreement of the Company enforceable in accordance with its terms,
except that (i) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights, and (ii) the remedy of specific
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performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefore may be brought.
3.04. No Violation. Neither the execution and delivery of this
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Agreement nor the consummation of the transactions contemplated hereby will
violate any provision of the Organizational Documents of the Company or any
Company Subsidiary, or, except as specified in Section 3.04 of the Disclosure
Schedule, violate, or be in conflict with, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the termination of, or accelerate the performance required by, or
cause the acceleration of the maturity of any debt or obligation pursuant to, or
result in the creation or imposition of any security interest, lien or other
encumbrance upon any property or assets of the Company or any Company Subsidiary
under, any agreement or commitment to which the Company or any Company
Subsidiary is a party or by which the Company or any Company Subsidiary is
bound, or to which the property of the Company or any Company Subsidiary is
subject, or violate any statute or law or any judgment, decree, order,
regulation or rule of any court or governmental authority.
3.05. Financial Statements. The Company has heretofore delivered to
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Acquiror: (i) a consolidated balance sheet of the Company and the Company
Subsidiaries as at [ ] in each of the years [ ] through [ ]; and consolidated
statements of income, changes in stockholders' equity and changes in financial
position for each of the years then ended, all certified by [ ], independent
certified public accountants, whose reports thereon are included therein; and
(ii) an unaudited consolidated balance sheet of the Company and the Company
Subsidiaries as at [ ], and unaudited consolidated statements of income, changes
in stockholders' equity and changes in financial position for the [ ] month
period then ended. Such consolidated balance sheets and the notes thereto are
true, complete and accurate and fairly present the consolidated assets,
liabilities and financial condition of the Company and the Company Subsidiaries
as at the respective dates thereof, and such consolidated statements of income,
changes in stockholders' equity and changes in financial position and the notes
thereto are true, complete and accurate and fairly present the results of
operations for the periods therein referred to; all in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved [except, in the case of unaudited statements, for normally recurring
year-end adjustments, which adjustments will not be material either individually
or in the aggregate].
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3.06. No Undisclosed Liabilities; Etc. Neither the Company nor any
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Company Subsidiary has any liabilities or obligations of any nature (absolute,
accrued, contingent or otherwise) which were not fully reflected or reserved
against in the Balance Sheet, except for liabilities and obligations incurred in
the ordinary course of business and consistent with past practice since the date
thereof; and the reserves reflected in the Balance Sheet are adequate,
appropriate and reasonable.
3.07. Accounts Receivable. All accounts receivable of the Company and
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each Company Subsidiary, whether reflected in the Balance Sheet or otherwise,
represent sales actually made in the ordinary course of business, and are
current and collectible net of any reserves shown on the Balance Sheet (which
reserves are adequate and were calculated consistent with past practice).
[Subject to such reserve, each of the accounts receivable either has been
collected in full or will be collected in full, without any set-off, within 120
days after the day on which it became due and payable.]
3.08. Inventory. All inventory of the Company and each Company
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Subsidiary, whether reflected in the Balance Sheet or otherwise, consists of a
quality and quantity usable and salable in the ordinary course of business,
except for items of obsolete materials and materials of below-standard quality,
all of which have been written down in the Balance Sheet to realizable market
value or for which adequate reserves have been provided therein. The quantities
of all inventory of the Company and each Company Subsidiary are reasonable and
warranted in the present circumstances of their respective businesses.
3.09. Interim Operations. Since the date of the Balance Sheet, the
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business of the Company and each Company Subsidiary has been conducted only in
the ordinary and usual course consistent with past practice. Since the date of
the Balance Sheet, there have not been any material adverse changes in the
financial condition, assets or results of operations of the Company or any
Company Subsidiary. Since such date such assets have not been affected in any
way as a result of flood, fire, explosion or other casualty (whether or not
covered by insurance). The Company is not aware of any circumstances which may
cause it to suffer any material adverse change in its business, operations or
prospects.
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3.10. Title to Properties; Encumbrances. Each of the Company and the
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Company Subsidiaries has good, valid and marketable title to all the properties
and assets which it purports to own (real, personal and mixed, tangible and
intangible), including, without limitation, all the properties and assets
reflected in the Balance Sheet (except for personal property having an aggregate
book value not in excess of $ 1,000 sold since the date of the Balance Sheet in
the ordinary course of business and consistent with past practice), and all the
properties and assets purchased by the Company and Company Subsidiaries since
the date of the Balance Sheet, which subsequently acquired properties and assets
(other than inventory [and short term investments]) are listed in Section 3.10
of the Disclosure Schedule. All properties and assets reflected in the Balance
Sheet have a fair market or realizable value at least equal to the value thereof
as reflected therein, and all such properties and assets are free and clear of
all title defects or objections, liens, claims, charges, security interests or
other encumbrances of any nature whatsoever including, without limitation
leases, chattel mortgages, conditional sales contracts, collateral security
arrangements and other title or interest retention arrangements, and are not, in
the case of real property, subject to any rights of way, building use
restrictions, exceptions, variances, reservations or limitations of any nature
whatsoever except, with respect to all such properties and assets, (a) liens
shown on the Balance Sheet as securing specified liabilities or obligations [and
liens incurred in connection with the purchase of property and/or assets, if
such purchase was effected after the date of the Balance Sheet,] with respect to
which no default exists; (b) minor imperfections of title, if any, none of which
are substantial in amount, materially detract from the value or impair the use
of the property subject thereto, or impair the operations of the Company or any
Company Subsidiary and which have arisen only in the ordinary course of business
and consistent with past practice [since the date of the Balance Sheet]; and (c)
liens for current taxes not yet due. The rights, properties and other assets
presently owned, leased or licensed by the Company and the Company Subsidiaries
and described elsewhere in this Agreement include all rights, properties and
other assets necessary to permit the Company and the Company Subsidiaries to
conduct their businesses in all material respects in the same manner as their
businesses have been conducted prior to the date hereof.
3.11. Plant and Equipment. The plants, structures and equipment of
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the Company and each Company Subsidiary are structurally sound with no defects
and are in good operating condition and repair and are adequate for the uses to
which they are being put; and none of such plants, structures or equipment are
in need of maintenance or repairs except for ordinary, routine maintenance and
repairs which are not material in nature or cost. Except as set forth in Section
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3.11 of the Disclosure Schedule, neither the Company nor any Company Subsidiary
has received notification that it is in violation of any applicable building,
zoning, anti-pollution, health or other law, ordinance or regulation in respect
of its plants or structures or their operations and no such violation exists.
3.12. Patents, Trademarks, Trade Names, Etc. The Company and each
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Company Subsidiary owns, or is licensed or otherwise has the full and exclusive
right to use, all patents, trademarks, trade names, copyrights, technology,
know-how and processes used in or necessary for the conduct of the business as
heretofore conducted. Section 3.12 of the Disclosure Schedule contains an
accurate and complete description of (a) all patents, trademarks, trade names
and copyrights used or proposed to be used by the Company or any Company
Subsidiary, all applications therefor, and a summary of the terms of all
licenses and other agreements relating thereto and (b) a summary of the terms of
all agreements relating to technology, know-how or processes which the Company
or any Company Subsidiary is licensed or authorized to use by others. Except as
set forth in Section 3.12 of the Disclosure Schedule, the Company and each
Company Subsidiary has the sole and exclusive right to use the patents,
trademarks, trade names, copyrights, technology, know-how and processes referred
to in the Disclosure Schedule, and the consummation of the transactions
contemplated hereby will not alter or impair any such rights; no claims have
been asserted by any person to the use of any such patents, trademarks, trade
names, copyrights, technology, know-how or processes or challenging or
questioning the validity or effectiveness of any such license or agreement, and
the Company does not know of any valid basis for any such claim; and the use of
such patents, trademarks, trade names, copyrights, technology, know-how or
processes by the Company or any Company Subsidiary does not infringe on the
rights of any person.
3.13. Leases. Section 3.13 of the Disclosure Schedule contains an
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accurate and complete description of the terms of all leases pursuant to which
the Company or any Company Subsidiary leases real or personal property. Except
as set forth in Section 3.13 of the Disclosure Schedule, all such leases are
valid, binding and enforceable in accordance with their terms, and are in full
force and effect; there are no existing defaults by the Company or any Company
Subsidiary thereunder; no event of default has occurred which (whether with or
without notice, lapse of time or the happening or occurrence of any other event)
would constitute a default thereunder; and all lessors under such leases have
consented (where such consent is necessary) to the consummation of the
transactions contemplated by this Agreement without requiring
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modification in the rights or obligations of the lessee under such leases.
Executed counterpart copies of all consents referred to in the preceding
sentence will be delivered to Acquiror at the Closing.
3.14. Taxes. Each of the Company and the Company Subsidiaries has
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duly filed all tax reports and returns required to be filed by it and have duly
paid all taxes and other charges due or claimed to be due from it by national,
local or foreign taxing authorities (including, without limitation, those due in
respect of the properties, income, franchises, licenses, sales or payrolls of
any of them); the reserves for taxes reflected in the Balance Sheet are
adequate; and there are no tax liens upon any property or assets of the Company
or any Company Subsidiary except liens for current taxes not yet due.
3.15. Contracts and Commitments. Except as set forth in Section 3.15
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of the Disclosure Schedule:
(a) Neither the Company nor any Company Subsidiary has any
agreements, contracts, commitments or restrictions which are material to its
business, operations or prospects or which require the making of any charitable
contribution;
(b) No purchase contracts or commitments of the Company or any
Company Subsidiary continue for a period of more than six months or are in
excess of the normal, ordinary and usual requirements of business or at any
excessive price;
(c) There are no outstanding sales contracts, commitments or
proposals of the Company or any Company Subsidiary which continue for a period
of more than six months or will result in any loss to the Company or any Company
Subsidiary upon completion or performance thereof, after allowance for direct
distribution expenses nor are there any outstanding contracts, bids or sales or
service proposals quoting prices which will not result in a normal profit;
(d) Neither the Company nor any Company Subsidiary has any
outstanding contracts with officers, employees, agents, consultants, advisors,
salesmen, sales representatives, distributors or dealers that are not
cancellable by it on notice of not longer than 30 days and without liability,
penalty or premium;
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(e) Neither the Company nor any Company Subsidiary has any
employment agreement, or any other agreement that contains any severance or any
severance or termination pay liabilities or obligations;
(f) Neither the Company nor any Company Subsidiary has any
collective bargaining or union contracts or agreements;
(g) Neither the Company nor any Company Subsidiary is in default,
nor is there any basis for any valid claim of default, under any contract made
or obligation owed by it;
(h) Neither the Company nor any Company Subsidiary has any power
of attorney outstanding or any obligations or liabilities (whether absolute,
accrued, contingent or otherwise), as guarantor, surety, co-signer, endorser,
co-maker, indemnitor or otherwise in respect of the obligation of any person,
corporation, partnership, joint venture, association, organization or other
entity.
3.16. Orders, Commitments and Returns. As of the date of this
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Agreement, the aggregate of all accepted and unfulfilled orders for the sale of
merchandise entered into by the Company and the Company Subsidiaries is $1,000,
and the aggregate of all contracts or commitments for the purchase of supplies
by them is $1,000 all of which orders, contracts and commitments were made in
the ordinary course of business. As of the date of this Agreement, there are no
claims against the Company or any Company Subsidiary to return in excess of an
aggregate of $1,000 of merchandise by reason of alleged overshipments, defective
merchandise or otherwise, or of merchandise in the hands of customers under an
understanding that such merchandise would be returnable.
3.17. Agreements in Full Force and Effect. All contracts, agreements,
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plans, leases, policies and licenses referred to in the Disclosure Schedule are
valid and in full force and effect, and true copies thereof have been heretofore
made available to Acquiror.
3.18. Labor Difficulties. Except to the extent set forth in Section
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3.18 of the Disclosure Schedule, (a) the Company and all Company Subsidiaries
are in compliance with all applicable laws respecting employment and employment
practices, terms and conditions of
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employment and wages and hours, and are not engaged in any unfair labor
practice; (b) there is no unfair labor practice complaint against the Company or
any Company Subsidiary pending before any agency relating to or governing the
rights of workers or their relationship with employers; (c) there is no labor
strike, dispute, slowdown or stoppage actually pending or threatened against or
affecting the Company or any Company Subsidiary; (d) no representation question
exists respecting the employees of the Company or any Company Subsidiary; (e) no
grievance which might have a material adverse effect on the Company or any
Company Subsidiary or the conduct of its business nor any arbitration proceeding
arising out of or under collective bargaining agreements is pending and no claim
therefor exists; (f) no collective bargaining agreement which is binding on the
Company or any Company Subsidiary restricts any of them from relocating or
closing any of their operations; and (g) neither the Company nor any Company
Subsidiary has experienced any work stoppage or other labor difficulty since
[ ].
3.19. Litigation. Except as set forth in Section 3.19 of the
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Disclosure Schedule, there is no action, suit, inquiry, proceeding or
investigation by or before any court or governmental or other regulatory or
administrative agency or commission pending or threatened against or involving
the Company or any Company Subsidiary, or which questions or challenges the
validity of this Agreement or any action taken or to be taken by the Company or
any Company Subsidiary pursuant to this Agreement or in connection with the
transactions contemplated hereby; nor is there any valid basis for any such
action, proceeding or investigation. Except as set forth in Section 3.19 of the
Disclosure Schedule, neither the Company nor any Company Subsidiary is in
default under or in violation of, nor is there any valid basis for any claim of
default under or violation of, any contract, commitment or restriction to which
it is a party or by which it is bound. Neither Company nor any Company
Subsidiary is subject to any judgment, order or decree entered in any lawsuit or
proceeding which may have an adverse effect on its business practices or on its
ability to acquire any property or conduct its business in any area.
3.20. No Condemnation or Expropriation. Neither the whole nor any
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portion of the leaseholds or any other assets of the Company or any Company
Subsidiary is subject to any governmental decree or order to be sold or is being
condemned, expropriated or otherwise taken by any public authority with or
without payment of compensation therefor, nor has any such condemnation,
expropriation or taking been proposed.
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3.21. Consents and Approvals of Governmental Authorities. Except as
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described in Section 3.21 of the Disclosure Schedule, no consent, approval or
authorization of, or declaration, filing or registration with, any governmental
or regulatory authority is required in connection with the execution, delivery
and performance of this Agreement or the consummation of the transactions
contemplated hereby. As to any consent, approval or authorization required in
connection with the transactions contemplated by this Agreement, the Company has
received all such consents, approvals or authorizations, copies of which are
being delivered herewith.
3.22. Consents. Except as set forth in Sections 3.03, 3.21, and 3.22
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of the Disclosure Schedule, no consent of any person is necessary to the
consummation of the transactions contemplated hereby, including, without
limitation, consents from parties to loans, contracts, leases or other
agreements and consents from governmental agencies, whether federal, state or
local.
3.23. Compliance with Law. The operations of the Company and the
-------------------
Company Subsidiaries have been conducted in accordance with all applicable laws,
regulations and other requirements of all national governmental authorities, and
of all states, municipalities and other political subdivisions and agencies
thereof, having jurisdiction over the Company and the Company Subsidiaries,
including, without limitation, all such laws, regulations and requirements
relating to antitrust, consumer protection, currency exchange, equal
opportunity, health, occupational safety, pension, securities and
trading-with-the-enemy matters. Neither the Company nor any Company Subsidiary
has received any notification of any asserted present or past failure by the
Company or any Company Subsidiary to comply with such laws, rules or
regulations.
3.24. Environmental Protection. Except as set forth in Section 3.24
------------------------
of the Disclosure Schedule, the Company and the Company Subsidiaries have
obtained all permits, licenses and other authorizations which are required under
federal, state and local laws relating to pollution or protection of the
environment, including laws relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants, or hazardous or toxic materials
or wastes into ambient air, surface water, ground water, or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants or hazardous or
toxic materials or wastes. Except as set forth in Section 3.24 of the Disclosure
Schedule, the Company and the Company Subsidiaries are in full
15
compliance with all terms and conditions of the required permits, licenses and
authorizations, and are also in full compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in those laws or contained in any regulation,
code, plan, order, decree, judgment, notice or demand letter issued, entered,
promulgated or approved thereunder. Except as set forth in Section 3.24 of the
Disclosure Schedule, the Company is not aware of, nor has the Company nor any
Company Subsidiary received notice of, any past, present or future events,
conditions, circumstances, activities, practices, incidents, actions or plans
which may interfere with or prevent continued compliance, or which may give rise
to any common law or legal liability, or otherwise form the basis of any claim,
action, suit, proceeding, hearing or investigation, based on or related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling, or the emission, discharge, release or threatened
release into the environment, of any pollutant, contaminant, or hazardous or
toxic material or waste.
3.25. Good Title Conveyed, Etc. The Company has complete and
------------------------
unrestricted power and the unqualified right to sell, assign, transfer and
deliver to Acquiror, and upon consummation of the transactions contemplated by
this Agreement, Acquiror will acquire, good, valid and marketable title to, the
Assets free and clear of all mortgages, pledges, liens, security interests,
conditional sales agreements, encumbrances or charges of any kind, except those
referred to in Section 3.10(a) and (c) hereof. The ▇▇▇▇ of Sale and the deeds,
endorsements, assignments and other instruments to be executed and delivered to
Acquiror or Acquiror by the Company at the Closing will be valid and binding
obligations of the Company, respectively, enforceable in accordance with their
terms, and will effectively vest in Acquiror good, valid and marketable title to
all the assets of the Company.
3.26. Brokers and Finders. Neither the Company nor any of its
-------------------
officers, directors or employees has employed any broker or finder or incurred
any liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated by this Agreement.
3.27. Insider Interests. Except as set forth in Section 3.27 of the
-----------------
Disclosure Schedule, no officer or director of the Company or any Company
Subsidiary has any material interest in any property, real or personal, tangible
or intangible, including without limitation, inventions, patents, trademarks or
trade names, used in or pertaining to the business of the Company or any Company
Subsidiary.
16
3.28. Disclosure. No representations or warranties by the Company in
----------
this Agreement and no statement contained in any document (including, without
limitation, financial statements and the Disclosure Schedule), certificate, or
other writing furnished or to be furnished by the Company to Acquiror or any of
its representatives pursuant to the provisions hereof or in connection with the
transactions contemplated hereby, contains or will contain any untrue statement
of material fact or omits or will omit to state any material fact necessary, in
light of the circumstances under which it was made, in order to make the
statements herein or therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
ACQUIROR AND ACQUIROR'S SUBSIDIARY
----------------------------------
Acquiror hereby represents and warrants to the Company as follows:
4.01. Corporate Organization; Etc. Acquiror is duly organized,
---------------------------
validly existing and in good standing under the laws of the State of Delaware.
All the issued and outstanding shares of capital stock of Acquiror have been
duly authorized by all necessary corporation action and are validly issued,
fully paid and nonassessable and are owned by Acquiror.
4.02. Authorization; Etc. Acquiror has full corporate power and
------------------
authority to enter into this Agreement and to carry out the transactions
contemplated hereby. The Board of Directors of Acquiror has taken all action
required by law, its Certificate of Incorporation and By-Laws or otherwise to
authorize the execution and delivery of this Agreement and the transactions
contemplated hereby, and this Agreement is a valid and binding agreement of
Acquiror enforceable in accordance with its terms except that (i) such
enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors' rights,
and (ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
4.03. No Violation. Neither the execution and delivery of this
------------
Agreement nor the consummation of the transactions contemplated hereby will
violate any provisions of the
17
Certificate of Incorporation or By-Laws of Acquiror, or violate, or be in
conflict with, or constitute a default under, or cause the acceleration of the
maturity of any debt or obligation pursuant to, any agreement or commitment to
which Acquiror is a party or by which Acquiror is bound, or violate any statute
or law or any judgment, decree, order, regulation or rule of any court or
governmental authority.
4.04. No Prior Activities. Acquiror does not have assets exceeding an
-------------------
aggregate value of $5,000, and has not incurred, directly or through any
subsidiary, any liabilities or obligations, except those incurred in connection
with its incorporation or with the negotiation and consummation of this
Agreement and the transactions contemplated hereby. Acquiror has not engaged in
any business or activities of any type or kind whatsoever, or entered into any
agreements or arrangements with any person or entity, or is subject to or bound
by any obligation or undertaking which is not contemplated by this Agreement.
4.05. Commitments for the Financing. Acquiror has heretofore received
-----------------------------
ORAL OR written commitments from responsible financial institutions and others
to provide all the Financing (all of which are subject to the negotiation,
preparation and execution of definitive financing agreements, it being
understood that the obligations of such financial institutions and others under
such agreements will be subject to the conditions to be set forth therein).
ARTICLE V
COVENANTS OF THE COMPANY
------------------------
The Company hereby covenants and agrees with Acquiror:
5.01. Full Access. The Company shall, and shall cause each Company
-----------
Subsidiary to, afford to Acquiror, its counsel, accountants and other
representatives full access to the plants, offices, warehouses, properties,
books and records of the Company and each Company Subsidiary in order that
Acquiror may have full opportunity to make such investigations as it shall
desire to make of the affairs of the Company and the Company Subsidiaries; and
the Company will cause its officers and accountants to furnish such additional
financial and operating data and other information as Acquiror shall from time
to time request provided, however, that any such investigation shall be
conducted in such a manner as not to interfere
18
unreasonably with the operation of the businesses of the Company and the Company
Subsidiaries.
5.02. Approval of Stockholders. The Company and its officers and
------------------------
directors shall either (a) (i)cause a meeting of the Company's stockholders to
be duly called and held as soon as practicable for the purpose of voting on this
Agreement, (ii) recommend approval and adoption of this Agreement to the
Company's stockholders and (iii) use their best efforts to obtain the necessary
approval and adoption of this Agreement by the Company's stockholders or (b), ir
permitted under the laws of Nicaragua, obtain the written consent of the
stockholders required to approve this Agreement.
5.03. Consents. The Company will obtain, prior to the Closing, all
--------
consents necessary, in the opinion of Acquiror's counsel, to the consummation of
the transactions contemplated hereby, including, without limitation, (i) the
consent of each person holding a mortgage or lien on real property or personal
property owned or leased by the Company or any Company Subsidiary to the
transfer of such property to Acquiror at the Closing in consideration of the
assumption by Acquiror of such mortgage or lien; and (ii) the consent of each
lessor of real or personal property leased by the Company to the assignment of
the lessee's interest under the lease of such property to Acquiror at the
Closing in consideration of the assumption by Acquiror of the lessee's liability
thereunder. All such consents will be in writing and executed counterparts
thereof will be delivered to Acquiror at or prior to the Closing.
5.04. Supplements to Disclosure Schedule. From time to time prior to
----------------------------------
the Closing, the Company will promptly supplement or amend the Disclosure
Schedule with respect to any matter hereafter arising which, if existing or
occurring at the date of this Agreement, would have been required to be set
forth or described in the Disclosure Schedule. No supplement or amendment of the
Disclosure Schedule made pursuant to this section shall be deemed to cure any
breach of any representation of or warranty made in this Agreement unless
Acquiror specifically agrees thereto in writing.
5.05. Additional Financial Statements. The Company shall furnish
-------------------------------
Acquiror with financial statements similar to those referred to in Section
3.06(ii) as of ________________, and for the [ ] month periods ended on such
date, all certified by the chief financial officers of Seller, as soon as they
become available.
19
5.06. Other Transactions. Neither the Company nor its Board of
------------------
Directors shall enter into any discussions concerning, or approve or recommend
to the holders of any shares of its capital stock, any merger, consolidation,
disposition of all or substantially all of its business, properties or assets
(other than pursuant to this Agreement), any tender offer, acquisition or other
business combination, or proposal therefor, or furnish or cause to be furnished
any information concerning the business, properties or assets of the Company to
any party in connection with any tender offer or other transaction involving the
acquisition of the Company or all or any substantial part of its assets by any
person other than Acquiror or Acquiror.
5.07. Covenant to Satisfy Conditions. Each of the Company and the
---------------------------------
Company Subsidiaries will use its best efforts to insure that the conditions set
forth in Article VIII hereof are satisfied, insofar as such matters are within
the control of any of them.
5.08. Certificates. At the Closing the Company will furnish Acquiror
------------
with such certificates of its officers and others to evidence compliance with
the covenants set forth in this Article V as may be reasonably requested by
Acquiror.
ARTICLE VI
COVENANTS OF THE ACQUIROR
-------------------------
6.01. Financing. It is understood and agreed that all of the
---------
Financing is necessary to fund the transaction contemplated by this Agreement.
Acquiror will use its best efforts to arrange such financing as soon as
practicable.
6.02. Registration of Securities. Acquiror and the Company will
----------------------------
prepare and Acquiror will file with the Securities and Exchange Commission a
registration statement on Form SB-2 under the Securities Act to register the
Shares; and Acquiror and the Company will use their best efforts to receive and
respond to the comments of the Securities and Exchange Commission and to cause
such registration statement to become effective, all at the earliest possible
time.
6.03. Blue Sky Filings. Acquiror will take all such action as may be
----------------
necessary under the securities or blue sky laws of the States or other political
subdivisions of the United States in connection with the transactions
contemplated hereby.
20
6.04. Listing Application. Acquiror will use its best efforts to
--------------------
obtain, as soon as practicable after the Closing, approval for quotation of the
Common Stock on the Over-the-Bulletin Board of the NASD.
6.05. Affiliates. The Company has furnished Acquiror with the
----------
Registration Schedule stating thereon the amount of Company Stock owned by each
Company Affiliate.
6.06. Registration Rights. (a) As soon as reasonably possible
--------------------
following the Closing Date, the Company shall prepare and file a Registration
Statement with the SEC on Form SB-2 (or such other form as may be appropriate
for the registration of the Shares) and use its best efforts to cause such
Registration Statement to become effective in order that holders of the Shares
may sell their Common Stock in accordance with the proposed plan of
distribution, all as more fully described in the Registration Rights Agreement.
6.07. Expenses. Acquiror will bear all the expenses in connection
--------
with any Registration Statement under Section 6.06 hereof, other than transfer
taxes payable on the sale of such shares, the fees and expenses of counsel to
any holders of Shares and fees and commissions of brokers, dealers and
underwriters.
ARTICLE VII
CONDITIONS TO THE COMPANY'S OBLIGATIONS
---------------------------------------
Each and every obligation of the Company under this Agreement to be
performed on or before the Closing shall be subject to the satisfaction, on or
before the Closing, of each of the following conditions, unless waived in
writing by the Company:
7.01. Representations and Warranties True. The representations and
-------------------------------------
warranties of Acquiror contained herein shall be in all material respects true
and accurate as of the date when made and at and as of the Closing as though
such representations and warranties were made at and as of such date, except for
changes expressly permitted or contemplated by the terms of this Agreement.
21
7.02. Performance. Acquiror shall have performed and complied with
-----------
all agreements, obligations and conditions required by this Agreement to be
performed or complied with by them on or prior to the Closing.
7.03. Approval of Company's Stockholders. The approval of the
-------------------------------------
stockholders of the Company referred to in Section 5.02(c) hereof shall have
been obtained.
7.04. No Governmental Proceeding or Litigation. No suit, action,
--------------------------------------------
investigation, inquiry or other proceeding by any governmental body or other
person or legal or administrative proceeding shall have been instituted or
threatened which questions the validity or legality of the transactions
contemplated hereby.
7.05. Financing. At or prior to the Closing Acquiror shall have
---------
deposited with the Exchange Agent cash or letters of credit necessary to make
the payments required by Section 1.02.
7.06. Certificates. Acquiror and Acquiror's Subsidiary shall have
------------
furnished the Company with such certificates of their officers and others to
evidence compliance with the conditions set forth in this Article VII as may be
reasonably requested by the Company.
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF ACQUIROR
-------------------------------------
Each and every obligation of Acquiror under this Agreement to be
performed on or before the Closing shall be subject to the satisfaction, on or
before the Closing, of each of the following conditions, unless waived in
writing by Acquiror:
8.01. Representations and Warranties True. The representations and
-------------------------------------
warranties contained in Article III hereof, the Disclosure Schedule and in all
certificates and other documents delivered and to be delivered by the Company
and each Company Subsidiary to Acquiror or Acquiror's Subsidiary or their
representatives pursuant hereto or in connection with the transactions
contemplated hereby shall be in all material respects true, complete and
accurate as of the date when made and at and as of the Closing Date as though
such representations and
22
warranties were made at and as of such date, except for changes expressly
permitted or contemplated by the terms of this Agreement.
8.02. Performance. The Company and each Company Subsidiary shall have
-----------
performed and complied with all agreements, obligations and conditions required
by this Agreement to be performed or complied with by them on or prior to the
Closing.
8.03. Investigations; Etc. Neither any investigation of the Company
---------------------
and the Company Subsidiaries by Acquiror, nor the Disclosure Schedule or any
supplement thereto nor any other document delivered to Acquiror as contemplated
by this Agreement, shall have revealed any facts or circumstances which, in the
sole and exclusive judgment of Acquiror, reflect in a material adverse way on
the financial condition, assets, liabilities (absolute, accrued, contingent or
otherwise), reserves, business, operations or prospects of the Company or any
Company Subsidiary.
8.04. Approval of Company's Stockholders; Etc. The approval of the
-----------------------------------------
stockholders of the Company referred to in Section 5.02(c) hereof and all
consents from third parties and government agencies required to consummate the
transactions contemplated hereby shall have been obtained.
8.05. No Government Proceeding or Litigation. No suit, action,
------------------------------------------
investigation, inquiry or other proceeding by any governmental body or other
person or legal or administrative proceeding shall have been instituted or
threatened which questions the validity or legality of the transactions
contemplated hereby.
8.06. No Injunction. On the Closing Date there shall be no effective
-------------
injunction, writ, preliminary restraining order or any order of any nature
issued by a court of competent jurisdiction directing that the transactions
provided for herein or any of them not be consummated as so provided or imposing
any conditions on the consummation of the transaction contemplated hereby which
the Acquiror deems unacceptable in its sole discretion.
8.07. Material Change. From the date of the Balance Sheet to the
----------------
Closing Date, neither the Company nor any Company Subsidiary shall have suffered
any adverse change (whether or not such change is referred to or described in
any supplement to the Disclosure
23
Schedule or Definitive Proxy Statement) in its business, prospects, financial
condition, working capital, assets, liabilities (absolute, accrued, contingent
or otherwise), reserves or operations.
8.08. COMFORT LETTER. The Company shall have caused to be delivered
---------------
to Acquiror a letter dated not more than two days before the Registration
Statement becomes effective and a letter dated not more than two days prior to
the Closing Date from [name of accountants], the Company's independent certified
public accountants, each letter to the effect that:
(i) they are independent public accountants with respect to
the Company within the meaning of the Securities Act and the rules and
regulations promulgated thereunder and the answer in the Registration
Statement to Item 3 of Form S-14 is correct insofar as it relates to them;
(ii) in their opinion the financial statements examined by
them and included in the Registration Statement and Definitive Proxy
Statement comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the rules and regulations
promulgated thereunder with respect to registration statements on Form S-14
and proxy statements;
(iii) on the basis of limited procedures, not constituting
an audit, including a reading of the unaudited consolidated financial
statements of the Company included in the Registration Statement and
Definitive Proxy Statement in accordance with the standards for such review
promulgated by the American Institute of Certified Public Accountants,
inspection of the minute books of meetings of shareholders and the Board of
Directors of the Company and its consolidated subsidiaries held since
[date], and inquiries of officials of the Company responsible for financial
and accounting matters, nothing came to their attention that caused them to
believe that;
(A) any unaudited financial statements of the Company
and its consolidated subsidiaries for any period subsequent to [date]
and for any comparable period of the preceding year included in the
Registration Statement and Definitive Proxy Statement do not comply as
to form in all material respects with the applicable accounting
requirements of the Securities Act and the published rules and
regulations thereunder with respect to registration statements on Form
S-14 and proxy statements, or such unaudited financial statements are
not fairly presented in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of
the audited financial
24
statements of the Company and its consolidated subsidiaries included
in the Registration Statement;
(B) as of the date of the latest available interim
unaudited consolidated financial statements and as of a specified date
not more than five days prior to the date of any such letter, there
have been any changes in the capital stock of the Company and its
consolidated subsidiaries or any increases in the long-term debt of
the Company and its consolidated subsidiaries or any decreases in net
current assets, net assets or shareholders' equity of the Company and
its consolidated subsidiaries, in each case as compared with the
amounts shown in the balance sheet of the Company and its consolidated
subsidiaries as of [date] included in the Registration Statement,
except in each case for changes, increases or decreases which the
Registration Statement and Definitive Proxy Statement discloses have
occurred or may occur and which are described in such letter; and
(C) for the period from [date] to such respectively
specified dates there were any decreases in net revenues or in the
total or per share amounts of income before extraordinary items or of
net income of the Company and its consolidated subsidiaries, in each
case as compared with the comparable period of the preceding year,
except in each case for decreases which the Registration Statement
discloses have occurred or may occur and which are described in such
letter.
(iv) in addition to the examination referred to in their
reports included in the Registration Statement and Definitive Proxy
Statement and the limited procedures, inspection of minute books and
inquiries and other procedures referred to in clause (iii) above, they have
carried out certain specified procedures, not constituting an audit, with
respect to certain amounts, percentages, numbers of shares and financial
information which are derived from the general accounting records of the
Company and its consolidated subsidiaries, which appear in the Registration
Statement and Definitive Proxy Statement and which are specified by
Acquiror, and have compared certain of such amounts, percentages, numbers
and financial information with the accounting records of the Company and
have found them to be in agreement; and
(v) on the basis of a review of this Agreement and the
transactions contemplated hereby, in their opinion, Accounting Principles
Board Opinion No. 16 requires that such combination be accounted for as a
purchase of the net assets of the Company by Acquiror.
25
8.09. Opinion of the Company's Counsel. The Company shall have
------------------------------------
delivered to Acquiror an opinion of [_______________], counsel to the Company,
dated as of the Closing Date, in form and substance satisfactory to Acquiror, to
the effect that:
(a) The Company and each Company Subsidiary is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation;
(b) Each of the Company and the Company Subsidiaries is duly
qualified as a foreign corporation and in good standing in each jurisdiction [in
which the properties owned or leased by it or the nature of the business
conducted by it makes such qualification necessary];
(c) Each of the Company and the Company Subsidiaries has the
corporate power and authority to carry on its business as it is now being
conducted and to own the properties and assets it now owns, and the Company has
the full corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby;
(d) The authorized capital stock of the Company consists of 100
shares of Common Stock, ,total capital 50,000 Cordoba's all of which are issued
and outstanding.
(e) Based upon an examination of the records of the Company, [to
the best of the knowledge of such counsel] [except as disclosed in this
Agreement or pursuant hereto,] there are no outstanding options, warrants or
other rights to purchase or acquire any capital stock of the Company;
(f) [Except as disclosed in this Agreement or pursuant hereto,]
all the outstanding shares of capital stock of each Company Subsidiary are
validly authorized and issued, fully paid and nonassessable, and based upon an
examination of the records of the Company and each Company Subsidiary, [to the
best of the knowledge of such counsel,] all of such shares are owned by the
Company or another Company Subsidiary free and clear of all liens, claims,
charges or encumbrances, of any kind, and there are no outstanding options or
agreements to issue or sell any capital stock of any Company Subsidiary;
26
(g) All corporate action by the Company required in order to
authorize the transactions contemplated hereby has been duly and validly taken;
and this Agreement has been duly executed and delivered by the Company and is
the valid and binding obligation of the Company enforceable in accordance with
its terms except that (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights, (ii) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought, and (iii) enforceability of Section 6.14 of this Agreement may
be subject to limitations of policy under Federal and State securities laws;
(h) The Company has complete and unrestricted power to sell,
convey, assign, transfer and deliver to Acquiror all of the properties and
assets to be sold, conveyed, assigned, transferred and delivered pursuant
hereto; and the instruments of sale, conveyance, assignment and transfer
executed and delivered to Acquiror or Acquiror's Subsidiary hereunder are duly
executed, are valid and binding obligations of the Company, and effectively vest
in Acquiror's Subsidiary [all of the Company's] [good] title to such properties
and assets as contemplated by this Agreement;
(i) Neither the execution and delivery of this Agreement by the
Company nor the consummation of the transactions contemplated hereby will
violate the Organizational Documents of the Company or any Company Subsidiary
or, will violate, conflict with, or constitute a default under, or cause the
acceleration of maturity of any debt or obligation pursuant to, or result in the
creation or imposition of any security interest, lien or other encumbrance upon
any property or assets of the Company or any Company Subsidiary under, any
contract, commitment, agreement, trust, understanding, arrangement or
restriction of any kind to which the Company or any Company Subsidiary is a
party or by which the Company or any Company Subsidiary is bound [other than
encumbrances imposed pursuant to the Financing] or violate any statute or law,
or any judgment, decree, order, regulation or rule of any court or governmental
authority;
(j) [To the best knowledge of such counsel,] neither the Company
nor any Company Subsidiary is engaged in or threatened with any legal action or
other proceeding or has incurred or been charged with or is under investigation
with respect to any violation of any
27
federal, state or local law or administrative regulation which if adversely
determined might[, in such counsel's opinion, materially] adversely affect or
impair the business or condition, financial or otherwise, of the Company or any
Company Subsidiary, except as specifically disclosed by the Company in this
Agreement or pursuant hereto;
(k) Other than as described herein or in the Disclosure Schedule,
no consent of any governmental body nor of any other person, is required for the
consummation by the Company of the transactions contemplated hereby, all of
which have been duly and validly obtained;
(l) To the best knowledge of such counsel, the Company and each
Company Subsidiary are in compliance with all applicable laws and regulations;
(m) No facts have come to the attention of such counsel which
would lead them to believe that any representation or warranty of the Company
contained herein or in the Disclosure Schedule or any supplement thereto is
incorrect, false or misleading;
(n) Nothing has come to the attention of such counsel that would
indicate that the Company has any direct or indirect interest in any corporation
or business which competes with or is similar to any business conducted by
Acquiror, and such counsel does not know of any such interest of the Company;
(q) As to such other matters incident to the matters herein
contemplated as Acquiror and its counsel may reasonably request, including the
form of all documents and the validity of all proceedings.
8.10. Financing. At or prior to the Closing Acquiror shall have
---------
received pursuant to the Financing the cash or letters of credit necessary to
make the payments to the Company required by Section 1.02.
8.11. Consents Obtained. All consents referred to in Sections 3.04,
------------------
3.05, 3.15, 3.27 and 3.28 shall have been obtained.
28
8.12. Title Insurance. The Company shall have delivered to Acquiror,
---------------
at the Company's sole expense, good and valid title insurance policies or, in
final form, irrevocable title insurance binders, dated as of the close of
business of the date of the Closing, insuring Acquiror title as fee owner, in
each parcel of real property to be conveyed to Acquiror pursuant hereto. In each
instance, the title shall be insured by means of the preferred policy used in
the location where such real estate exists insuring, among other things, access
rights to such property and specific survey facts, if any. Each such policy or
binder, as to the insurer, the insured, the dollar limit and amount of coverage
and the exceptions and conditions thereof shall be, in all respects,
satisfactory to Acquiror, both as to form and substance.
ARTICLE IX
CONDUCT OF THE COMPANY'S BUSINESS PENDING THE CLOSING
-----------------------------------------------------
Pending the Closing, and except as otherwise expressly consented to or
approved by Acquiror in writing:
9.01. Regular Course of Business. Each of the Company and the Company
--------------------------
Subsidiaries will carry on its respective business diligently and substantially
in the same manner as heretofore conducted, and neither the Company nor any
Company Subsidiary shall institute any new methods of manufacture, purchase,
sale, lease, management, accounting or operation or engage in any transaction or
activity, enter into any agreement or make any commitment, except in the
ordinary course of business and consistent with past practice.
9.02. Amendments. No change or amendment shall be made in the
----------
Organizational Documents of the Company or any Company Subsidiary.
9.03. Subsidiaries. Neither the Company nor any Company Subsidiary
------------
will organize any new subsidiary, acquire any capital stock or other equity
securities of any corporation or acquire any equity or ownership interest in any
business.
9.04. Organization. Each of the Company and the Company Subsidiaries
------------
shall use its best efforts to preserve its corporate existence and business
organization intact, to keep
29
available to Acquiror its officers and key employees, and to preserve for
Acquiror its relationships with licensors, suppliers, distributors, customers
and others having business relations with it.
9.05. Certain Changes. Neither the Company nor any Company Subsidiary
---------------
will:
(a) Permit or allow any of its property or assets (real,
personal or mixed, tangible or intangible) to be subjected to any mortgage,
pledge, lien or encumbrance, except for those of a kind permitted under Section
3.12 hereof;
(b) Write down the value of any inventory or write off as
uncollectible any notes or accounts receivable, except for immaterial
write-downs and write-offs in the ordinary course of business and consistent
with past practice;
(c) Dispose of or permit to lapse any rights to the use of any
patent, trademark, trade name or copyright, or dispose of or disclose to any
person any trade secret, formula, process or know-how not theretofore a matter
of public knowledge;
(d) Pay, loan or advance any amount to, or sell transfer or lease
any properties or assets to, or enter into any agreement or arrangement with,
any of its officers or directors or any affiliate or Associate of any of its
officers or directors, except for directors' fees and compensation to officers
at rates not exceeding the rates of compensation paid during the fiscal year
ended _________;
(e) Grant or extend any power of attorney or act, as guarantor,
surety, co-signer, endorser, co-maker, indemnitor or otherwise in respect of the
obligation of any person, corporation, partnership, joint venture, association,
organization or other entity; or
(f) Agree, whether in writing or otherwise, to do any of the
foregoing.
9.06. Contracts. No contract or commitment will be entered into, and
---------
no purchase of raw material or supplies and no sale of assets will be made, by
or on behalf of the Company or any Company Subsidiary, except (i) normal
contracts or commitments for the purchase of, and normal purchases of, raw
materials or supplies, made in the ordinary course of business and consistent
with past practice, (ii) normal contracts or commitments for the sale of, and
normal sales of, inventory in the ordinary course of business and consistent
with past practice, and (iii) other
30
contracts, commitments, purchases or sales in the ordinary course of business
and consistent with past practice not in excess of $10,000 in the aggregate.
9.07. Insurance; Property. The Company and each Company Subsidiary
--------------------
shall adequately insure all property, real, personal and mixed, owned or leased
by the Company or any Company Subsidiary, against all ordinary and insurable
risks; and all such property shall be used, operated, maintained and repaired in
a careful and reasonably efficient manner.
9.08. No Default. Neither the Company nor any Company Subsidiary
-----------
shall do any act or omit to do any act, or permit any act or omission to act,
which will cause a breach of any material contract or commitment of the Company
or any Company Subsidiary or which would cause the breach of any warranty made
hereunder.
9.09. Compliance With Laws. The Company and each Company Subsidiary
---------------------
shall duly comply with all laws applicable to it and its properties, operations,
business and employees.
9.10. Tax Returns. Each of the Company and the Company Subsidiaries
------------
shall prepare and file all national, local and foreign tax returns and
amendments thereto required to be filed by it. The Company will ensure that
Acquiror shall have a reasonable opportunity to review each such return and
amendment prior to the filing thereof.
ARTICLE X
SURVIVAL OF REPRESENTATIONSAND WARRANTIES
-----------------------------------------
10.01. Survival of Representations and Warranties. All
----------------------------------------------
representations and warranties made by any party in this Agreement or pursuant
hereto, shall survive the Closing hereunder and any investigation at any time
made by or on behalf of the other party [and for a period of seven years
following the Closing.
10.02. Statements as Representations. All statements contained herein
-----------------------------
or in any certificate, schedule, list, exhibit, document or other writing
delivered pursuant hereto or in connection with the transactions contemplated
hereby shall be deemed representations and warranties within the meaning of
Sections 8.01 and 10.01 hereof.
31
10.03. Agreement to Indemnify. Subject to the conditions and
------------------------
provisions herein set forth, the Company hereby agrees to indemnify, defend and
hold harmless Acquiror and each parent, subsidiary and Affiliate of Acquiror
from and against all demands, claims, actions or causes of action, assessments,
losses, damages, liabilities, costs and expenses, including, without limitation,
interest, penalties and attorney's fees, asserted against or imposed upon or
incurred by Acquiror or any parent, subsidiary or Affiliate of Acquiror
resulting from (i) a breach of any representation or warranty of the Company
contained in or made pursuant to this Agreement, or (ii) any tax claim asserted
against Acquiror or against any subsidiary of Acquiror with respect to any taxes
(a) relating to operations of the Company through July 23,2004 to the extent
that reserves for such taxes in an amount at least equal to such tax claim were
not provided for in the books of the Company at such date (collectively,
"Damages").
10.04(a). Procedure. In the event of any claim by Acquiror under this
---------
Article X, Acquiror shall notify the Company in writing of said claim, which
notice shall set forth the basis of the claim for Damages (including, without
limitation, reference to the specific representation, warranty, covenant or
obligation alleged to have been breached) and, if then determinable by Acquiror,
a reasonable estimate of the amount thereof (or, if in Acquiror's good faith
opinion, no such reasonable estimate can then be made by it, the maximum
potential Damages that, in Acquiror's good faith opinion, might be sustained in
connection with such claim).
10.05. Conditions of Indemnification. The obligations and liabilities
-----------------------------
of the Company under Section 10.03 hereof with respect to claims for Damages
resulting from the assertion of liability by third parties ("Claims"), shall be
subject to the following terms and conditions:
(a) Acquiror will give the Company prompt notice of any Claim
asserted against or imposed upon or incurred by Acquiror or any parent,
subsidiary or Affiliate of Acquiror, and the Company will undertake the defense
thereof by representatives of its own choosing.
(b) In the event that the Company, within a reasonable time
after notice of any such Claim, fails to defend, Acquiror or such parent,
subsidiary or Affiliate of Acquiror will (upon further notice to the Company)
have the right to undertake the defense, compromise or settlement of such Claim
for the account of the Company, subject to the right of the Company to
32
assume the defense of such Claim at any time prior to settlement, compromise or
final determination thereof.
(c) Anything in this Section 10.05 to the contrary
notwithstanding, (i) if there is a reasonable probability that a Claim may
materially and adversely affect Acquiror or any parent, subsidiary or Affiliate
of Acquiror [other than as a result of money damages or other money payments],
Acquiror shall have the right [at its own cost and expense,] to defend,
compromise or settle such Claim, and (ii) Seller shall not, without Acquiror's
written consent, settle or compromise any Claim or consent to entry of any
judgment which does not include as an unconditional term thereof the release by
the claimant or the plaintiff of Acquiror and/or Acquiror's parent, subsidiary
or subsidiaries, or Affiliate or Affiliates, as the case may be, from all
liability in respect of such Claim.
10.06. Remedies Cumulative. The remedies provided herein shall be
--------------------
cumulative and shall not preclude Acquiror from asserting any other rights or
seeking any other remedies against the Company or its successors or assigns,
[except that no director or officer of the Company shall have any personal
liability to Acquiror as a result of any breach of any representation or
warranty contained herein.
ARTICLE XI
TERMINATION AND ABANDONMENT
---------------------------
11.01. Methods of Termination. The transactions contemplated herein
-----------------------
may be terminated and/or abandoned at any time before or after approval thereof
by the stockholders of the Company, but not later than the Closing:
(a) By mutual consent of the respective Boards of Directors of
Acquiror and the Company; or
(b) By the Board of Directors of Acquiror on or after (date), or
such later date as may be established pursuant to Section 1.03 hereof, if any of
the conditions provided for in Article VIII of this Agreement shall not have
been met or waived in writing by Acquiror prior to such date; or
33
(c) By the Board of Directors of the Company on or after [date],
or such later date as may be established pursuant to Section 1.03 hereof, if any
of the conditions provided for in Article VII of this Agreement shall not have
been met or waived in writing by the Company prior to such date.
11.02. Procedure Upon Termination. In the event of termination and
----------------------------
abandonment by the Board of Directors of Acquiror or by the Board of Directors
of the Company, or both, pursuant to Section 11.01 hereof, written notice
thereof shall forthwith be given to the other party and the transactions
contemplated by this Agreement shall be terminated and/or abandoned, without
further action by Acquiror or the Company. If the transactions contemplated by
this Agreement are terminated and/or abandoned as provided herein:
(a) Each party will redeliver all documents, work papers and
other material of any other party relating to the transactions contemplated
hereby, whether so obtained before or after the execution hereof, to the party
furnishing the same;
(b) All confidential information received by any party hereto
with respect to the business of any other party or its subsidiaries shall be
treated in accordance with Section 2.05 hereof; and
(c) No party hereto shall have any liability or further
obligation to any other party to this Agreement except as stated in
subparagraphs (a) and (b) of this Section 11.02, [provided, however, that (i) if
-------- -------
such termination and/or abandonment is a result of the failure of any condition
set forth in Article VIII hereof, other than the condition set forth in Section
8.10, then Acquiror shall be entitled to recover from the Company all
out-of-pocket costs which Acquiror has incurred (including reasonable attorney's
fees and expenses); and (ii) if such termination and/or abandonment is a result
of the failure of any condition set forth in Article VII, other than the
conditions set forth in Sections 7.03, 7.04, 7.05 and 7.06 then the Company
shall be entitled to recover from Acquiror all out-of-pocket costs which the
Company has incurred (including reasonable attorney's fees and expenses).]
ARTICLE XII
MISCELLANEOUS PROVISIONS
------------------------
34
12.01. Amendment and Modification. Subject to applicable law, this
----------------------------
Agreement may be amended, modified and supplemented by written agreement of the
respective Boards of Directors of the Company and Acquiror or by their
respective officers authorized by such Boards of Directors at any time prior to
the Closing with respect to any of the terms contained herein, [provided,
however, that no such amendment or modification shall be entered into on or
after the date of the shareholders' meeting referred to in Section 5.02(a)
hereof which reduces or changes the form of the consideration to be delivered to
the Company pursuant to Section 1.02 of this Agreement.]
12.02. Waiver of Compliance. Any failure of the Company, on the one
---------------------
hand, or Acquiror, on the other, to comply with any obligation, covenant,
agreement or condition herein may be expressly waived in writing by the Chairman
of the Board. President or a Vice President of Acquiror or the Company,
respectively, but such waiver or failure to insist upon strict compliance with
such obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure.
12.03. Expenses; Transfer Taxes, Etc. Except as otherwise provided in
-----------------------------
Section 2.02 hereof, whether or not the transaction contemplated by this
Agreement shall be consummated, the Company agrees that all fees and expenses
incurred by it in connection with this Agreement shall be borne by it and
Acquiror agrees that all fees and expenses incurred by it in connection with
this Agreement shall be borne by it, including, without limitation as to the
Company or Acquiror, all fees of counsel, actuaries and accountants.
12.04. Notices. All notices, requests, demands and other
-------
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given if delivered by hand or mailed, certified or
registered mail with postage prepaid:
(a) If to the Company, to:
(with a copy to:)
35
or to such other person or address as the Company shall furnish to Acquiror in
writing.
(b) If to Acquiror, to:
United Corporate Services, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(with a copy to:)
Ruffa & Ruffa, P.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
or to such other person or address as Acquiror shall furnish to the Company in
writing.
12.05. Assignment. This Agreement and all of the provisions hereof
----------
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties,
except by operation of law and except that Acquiror may assign its rights, but
not its obligations, under this Agreement to any subsidiary of Acquiror. If such
assignment shall be made by Acquiror, such subsidiary shall be entitled to all
of the rights and shall assume all of the
36
obligations of Acquiror hereunder, provided that Acquiror shall guarantee the
-------------
performance of such subsidiary's obligations under this Agreement and shall
deliver evidence thereof reasonably satisfactory to the Company.
12.06. Publicity. Neither the Company nor Acquiror shall make or
---------
issue, or cause to be made or issued, any announcement or written statement
concerning this Agreement or the transactions contemplated hereby for
dissemination to the general public without the prior consent of the other
party. This provision shall not apply, however, to any announcement or written
statement required to be made by law or the regulations of any federal or state
governmental agency or any stock exchange, except that the party required to
make such announcement shall, whenever practicable, consult with the other party
concerning the timing and content of such announcement before such announcement
is made.
12.07. Governing Law. All questions concerning the construction, validity,
-------------
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
agrees that all Proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or its respective
Affiliates, employees or agents) shall be commenced exclusively in the state and
federal courts sitting in The City of New York, Borough of Manhattan (the "NEW
YORK COURTS"). Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any such New York Court, or that such Proceeding has been
commenced in an improper or inconvenient forum. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any
37
legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. If either party shall commence a Proceeding to
enforce any provisions of a Transaction Document, then the prevailing party in
such Proceeding shall be reimbursed by the other party for its attorney's fees
and other costs and expenses incurred with the investigation, preparation and
prosecution of such Proceeding.
12.08. 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.
12.09. Construction. The headings herein are for convenience only, do
------------
not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party. This
Agreement shall be construed as if drafted jointly by the parties, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement or any of the
Transaction Documents.
12.10. Execution. This Agreement may be executed in two or more
---------
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.
12.11. Severability. If any provision of this Agreement is held to be
------------
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
12.12. Entire Agreement. This Agreement, including the Exhibits
-----------------
hereto, the Disclosure Schedule and the other documents and certificates
delivered pursuant to the terms
38
hereof, set forth the entire agreement and understanding of the parties hereto
in respect of the subject matter contained herein, and supersede all prior
agreements, promises, covenants, arrangements, communications, representations
or warranties, whether oral or written, by any officer, employee or
representative of any party hereto.
12.13. Third Parties. Except as specifically set forth or referred to
-------------
herein, nothing herein expressed or implied is intended or shall be construed to
confer upon or give to any person or corporation other than the parties hereto
and their successors or assigns, any rights or remedies under or by reason of
this Agreement.
39
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be affixed hereto, all
as of the day and year first above written.
VALCOR S.A. NICARAGUA
[Seal] By: ___________________________
Title:
Attest:
_________________________
Title:
VALCOR RESOURCES, INC.
[Seal] By: ___________________________
Title:
Attest:
_________________________
Title
40
Exhibit A
INDENTURE, ▇▇▇▇ OF SALE AND ASSIGNMENT
OF ASSETS, PROPERTIES AND BUSINESS OF
NAME OF THE COMPANY
-------------------------------
THIS INDENTURE, ▇▇▇▇ OF SALE AND ASSIGNMENT, made, executed and
delivered as of the date day of month. year, by Valcor S.A. Nicaragua, a
corporation organized under the laws of the Republic of Nicaragua (herein called
"Grantor") to Valcor Resources, Inc, a Delaware corporation (herein called
"Grantee").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Grantor and the Grantee are parties to an Agreement,
dated July 23, 2004 (the "Agreement") providing for, among other things, the
transfer and sale to the Grantee of substantially all of the properties, assets,
rights, goodwill and business of the Grantor, all as more fully described in the
Agreement, for consideration in the amount and on the terms and conditions
provided in the Agreement; and
WHEREAS, all of the terms and conditions precedent provided in the
Agreement have been met and performed by the respective parties thereto, and the
parties now desire to carry out the intent and purpose of the Agreement by the
Grantor's execution and delivery to the Grantee of this instrument evidencing
the vesting in the Grantee of all of the properties, assets, rights, goodwill
and business of Grantor hereinafter described, in addition to such other
instruments as Grantee shall have otherwise received or may hereafter request.
NOW, THEREFORE, in consideration of the premises and of other valuable
consideration to Grantor in hand paid by Grantee, at or before the execution and
delivery hereof, the receipt and sufficiency of which by Grantor is hereby
acknowledged, Grantor has conveyed, granted, bargained, sold, transferred, set
over, assigned, aliened, remised, released, delivered and confirmed; and by this
Indenture and ▇▇▇▇ of Sale does convey, grant, bargain, sell, transfer, set
over, assign, alien, remise, release, deliver and confirm unto Grantee, its
successors and assigns forever, all the businesses, franchises, rights,
privileges, properties, and assets of Grantor of every
41
nature and description, tangibles and intangible, real or personal, wherever
located, including Grantor's goodwill and the right to use the name of Grantor
and all trademarks and trade names. The assets so conveyed, granted, bargained,
sold, transferred, set over, assigned, aliened, remised, released, delivered and
confirmed hereby, are, without limiting the generality of the foregoing, more
particularly described as follows:
(a) all the real property and real estate comprising the
Facilities, as such term is defined in the Operating Agreement, and all the
right, title and interest, estate and appurtenances of Grantor, of every kind
and description whatsoever in, or in any way relating to, real property or real
estate comprising the Facilities, including but not limited to, leaseholds and
chattels real, easements, rights of way, sidetrack agreements and servitudes of
every kind, nature and description, including all contracts, agreements,
mortgages, documents and muniments of title relating to or in any way connected
with such assets and properties:
(b) all buildings, structures, fixtures, appurtenances and
improvements of Grantor now erected upon, attached to, or located on or in any
of the premises conveyed to Grantor hereby or pursuant to the Agreement, or
intended to be conveyed to Grantor hereby or pursuant to the Agreement,
including all equipment, machinery, tools, fixtures, implements and appliances
belonging or appertaining thereto, whether or not the same be affixed to the
freehold; and
(c) all raw materials and materials in process of manufacture,
manufactured products, goods, wares merchandise, inventories of every character,
stationery and office supplies, furniture and fixtures, machinery, shafting,
belting, pulleys, piping, tools, dies, jigs, molds, patterns and equipment and
appliances of every kind and nature owned by Grantor, whether in the possession
of Grantor, or in transit, or in the possession of any other person, firm or
corporation;
(d) all trucks, automobiles, and other vehicles of every kind
and description;
(e) all rights and interests of Grantor in, to and under all
contracts, commitments, agreements, options and other arrangements of every kind
and description
42
including, without limitation, all supply contracts, purchase contracts, service
contracts, employment contracts and retirement plans;
(f) if and to the extent that the same have not been transferred
effectively by separate instruments of assignment, all rights and interests of
Grantor in, to and under all domestic or foreign patents, patent applications,
trademarks, trademark registrations and applications therefor, all domestic or
foreign trade names, labels and other trade rights;
(g) all debts, accounts, bills and notes receivable, commercial
paper and acceptances, and other evidences of indebtedness; all bills of lading,
trust receipts, warehouse receipts and other documents of title of whatever kind
and description; all rights and claims under policies of insurance and fidelity
or other bonds; all shares of stock and other securities of all kinds (including
the contents of all safe deposit boxes and the securities and other items held
in custody accounts but excluding the shares of Grantor held by it in its
treasury, if any); all other claims, demands, judgments, rights, equities,
chattel mortgages, security agreements and choses in action, and the proceeds
thereof; and all permits and memberships in clubs and cooperatives;
(h) all books, records and other data, including Grantor's
minute books and stock books and corporate records, relating to Grantor's
assets, business and operations;
(i) all Grantor's goodwill and trade connections and Grantor's
rights to use the name insert trade name and any part or variant thereof;
(j) the prepaid expenses described in Schedule 1 hereto;
(k) all intangible assets of Grantor presently used in its
business, including customer lists, trade secrets and similar information
generally described as "know-how" with respect to the patents and patent
applications aforesaid;
(l) all research, engineering, marketing and other data relating
to any assets, businesses or operations of Grantor and each subsidiary of
Grantor;
(m) all the goodwill existing between Grantor and each of its
customers, suppliers, agents and others having business relations with the
Grantor;
43
(n) all rights, claims, and causes of action of Grantor arising
after the date hereof against any officer, former officer, employee, former
employee or other person arising out of the disclosure or use, or threatened
disclosure or threatened use, of any proprietary information relating to the
assets being sold to Grantor or its business, including, without limitation, any
invention, process, method, formula treatment, discovery or improvement or
application thereof, or other know-how, or compilation of information, list of
customers or suppliers, document or record with respect thereto or contained
therein; and
(o) all other property in which Grantor has any interest
whatsoever, real, personal or mixed, whether tangible or intangible, of every
kind and description and wherever situated, including without limitation,
contingent and unknown interests, claims, rights and properties, whether or not
specifically mentioned or described herein and whatever may be the nature or
location of said assets, properties or business.
TO HAVE AND TO HOLD all of the foregoing assets, business and goodwill
unto Grantee, its successors and assigns to its and their own use and behoove
forever (such businesses, franchises, rights, privileges, properties, assets and
goodwill being hereinafter collectively called the "Assets").
Section 1. Grantor hereby constitutes and appoints Grantee, its
----------
successors and assigns, Grantor's true and lawful attorney and attorneys, with
full power of substitution, in Grantor's name and stead, but on behalf and for
the benefit of Grantee, its successors and assigns, to demand and receive any
and all of the Assets, and to give receipts and releases for and in respect of
the same, and any part thereof, and from time to time to institute and prosecute
in Grantor's name, or otherwise, for the benefit of Grantee, its successors and
assigns, any and all proceedings at law, in equity or otherwise, which Grantee,
its successors or assigns, may deem proper for the collection or reduction to
possession of any of the Assets or for the collection and enforcement of any
claim or right of any kind hereby sold, conveyed, transferred and assigned, or
intended so to be, and to do all acts and things in relating to the Assets which
Grantee, its successors or assigns shall deem desirable, Grantor hereby
declaring that the foregoing powers are coupled with an interest and are and
shall be irrevocable by Grantor or by its dissolution or in any manner or for
any reason whatsoever.
44
Section 2. Grantor further authorizes Grantee, its successors and
----------
assigns, to receive and open all mail, telegrams and other communications, and
all express or other packages, addressed to Grantor or to any of its officers
and to retain the same insofar as they relate to the Assets, but any such mail,
telegrams, communications or express or other packages not relating to the
Assets shall be forwarded with reasonable dispatch to ____________________
President of Grantor. The foregoing shall constitute full authorization to the
postal authorities, all telegraph and express companies, and all other persons
to make delivery of such items to Grantee.
Section 3. Grantor hereby covenants that, from time to time after the
---------
delivery of this instrument, at Grantee's request and without further
consideration, Grantor will do, execute, acknowledge, and deliver, or will cause
to be done, executed, acknowledged and delivered, all and every such further
acts, deeds, conveyances, transfers, assignments, powers of attorney and
assurances as reasonably may be required more effectively to convey, transfer to
and vest in Grantee, and to put Grantee in possession of, any of the Assets and,
in the case of contracts and rights, if any, which cannot be effectively
transferred to Grantee without the consent of third parties, to endeavor to
obtain such consents promptly and if any be unobtainable, to use its best
efforts to assure to Grantee the benefits thereof.
Section 4. Notwithstanding any of the provisions of the foregoing,
----------
this instrument shall not constitute an assignment to Grantee of any claim
(including but not limited to claims for refunds of taxes), contract, license,
lease, commitment, sales order or purchase order if an attempted assignment of
the same without the consent of the other party thereto would constitute a
breach thereof or in any way impair the rights of Grantor thereunder.
Section 5. Nothing in this instrument, express or implied, is
----------
intended or shall be construed to confer upon, or give to, any person, firm or
corporation other than Grantee and its successors and assigns, any remedy or
claim under or by reason of this instrument or any terms, covenants or condition
hereof, and all the terms, covenants and conditions, promises and agreements in
this instrument contained shall be for the sole and exclusive benefit of Grantee
and its successors and assigns.
45
Section 6. This instrument is executed by, and shall be binding upon,
---------
Grantor and Grantee, their successors and assigns, for the uses and purposes
above set forth and referred to, effective immediately upon its delivery to
Grantee.
IN WITNESS WHEREOF, Grantor has caused this ▇▇▇▇ of Sale to be signed
by its President and its Secretary and its corporate seal to be affixed hereto
on date.
Name of Grantor
By
President
ATTEST:
____________________________
Secretary
(CORPORATE SEAL)
46
STATE OF
) SS.
COUNTY OF
BE IT REMEMBERED that on this ____ day of __________, 19__, before me,
the subscriber, a Notary Public of _______, personally appeared
__________________________, to me known who being by me duly sworn according to
law, on his oath does depose and make proof to my satisfaction that he is the
Secretary of ________________ and well knows the corporate seal of
________________, of Grantor, the corporation named in and which executed the
foregoing Instrument; that the seal affixed to said Instrument is the corporate
seal of said corporation, that it was so affixed by virtue of authority from the
Board of Directors of said corporation; that _______________________ is
President of said corporation; that he saw the said ________________________ as
such President affix said seal thereto, sign and deliver said Instrument, and
heard him declare that he signed, sealed and delivered the same as the voluntary
act and deed of said corporation, by virtue of such authority, and this deponent
signed his name thereto, at the same time, as a subscribing witness.
______________________
Name
Subscribed and sworn to
before me the day and year
aforesaid as witness my
hand and official seal.
_____________________________
Notary Public
47
