Exhibit 10.28
STOCK ACQUISITION AGREEMENT
THIS STOCK ACQUISITION AGREEMENT ("Agreement") is made and entered
effective November 25, 1997 ("Effective Date") by and among Xxx Xxxxxxxx and
Xxxxx X. Xxxxxxxx, husband and wife (collectively, "Sellers"), AMCOR Capital
Corporation, a Delaware corporation ("Purchaser" and/or "AMCOR"), and
TransPacific Environmental, Inc., a California corporation ("TransPacific").
A. The Sellers constitute all of the stockholders and all of the directors
of TransPacific.
B. The Sellers own of record and beneficially and in the aggregate Fifty
Thousand (50,000) shares of the common stock, no par value of TransPacific
("Sellers Shares"). The Sellers Shares constitute all of the issued and
outstanding stock of TransPacific.
C. The Sellers desire to sell, assign, transfer, convey, deliver and set
over to the Purchaser, and the Purchaser desires to purchase, all, but not less
than all, of the Sellers Shares on the terms and subject to the conditions
specified in this Agreement.
D. The Purchaser and TransPacific are engaged in the business of receiving,
processing, transporting and recycling clean green waste products.
NOW, THEREFORE, in consideration of the Recitals specified above that shall be
deemed to be a substantive part of this Agreement, and the mutual covenants,
promises, agreements, representations and warranties specified in this Agreement
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, with the intent to be obligated legally and equitably,
the parties do hereby covenant, promise, agree, represent and warrant as
follows:
1. PURCHASE AND SALE OF THE SELLERS SHARES.
1.1. PURCHASE AND SALE. On the terms and subject to the conditions
specified by the provisions of this Agreement, at the Closing (defined later in
this Agreement) the Sellers, and each of them, shall sell, assign, transfer,
convey, deliver and set over to the Purchaser and the Purchaser shall purchase
from the Sellers, free and clear of all liens, claims, encumbrances, pledges,
options, security interests and any other adverse interests, all of the Sellers
Shares.
1.2. PURCHASE PRICE. Transfer of Sellers Shares; Allocation to Covenants
Against Competition.
1.2.1. The full, entire and aggregate purchase price that shall
be paid at the Closing on the Closing Date by the Purchaser to the Sellers
for the Sellers Shares shall be Two Million Thirty Thousand Five Hundred
Forty-five dollars ($2,030,545) (the "Purchase Price"). The Purchase Price
shall be payable to Sellers, by Purchasers issuance to Sellers on the Closing
Date (as hereinafter defined) of Four Hundred Six Thousand One Hundred Nine
(406,109) shares of AMCOR's $0.002 par value common stock (the "Shares").
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1.2.2. The Sellers, and each of them, shall deliver to the
Purchaser at the Closing on the Closing Date, concurrently with the delivery of
the Purchase Price stock certificate numbered one (1) of the Sellers,
representing the Sellers Shares owned of record and beneficially by the Sellers
duly endorsed in blank, or accompanied by assignments separate from certificate
duly endorsed in blank.
1.2.3 CERTAIN EMPLOYMENT ARRANGEMENTS. AMCOR and Xx. Xxx Xxxxxxxx,
Xxx. Xxxxx Xxxxxxxx, and Xxxx Xxxxxxxx shall enter into and deliver the
Employment Agreements dated as of the Closing Date (the "Franklin Employment
Agreements"). The Franklin Employment Agreements shall be in the form of
Schedule 1.24 (A-1), (A-2) and (A-3) and shall be under the terms and conditions
as set forth in the Agreements.
2. RESTRICTIONS ON TRANSFERABILITY OF SECURITIES; COMPLIANCE WITH SECURITIES
ACT.
2.1 RESTRICTIONS ON TRANSFERABILITY. The Shares of Common Stock of AMCOR
held by Sellers shall not be transferable, except upon the conditions specified
in this Article 2 which conditions are intended to ensure compliance with the
provisions of the Securities Act of 1933, as amended (the "Securities Act") or
to account for the acquisition as a pooling-of-interests transaction or to
assist in an orderly distribution, as the case may be. Purchasers agree to take
and hold the Shares subject to the provisions and upon the conditions specified
in this Article 2.
2.2 CERTAIN DEFINITIONS. As used in this Article 2, the following terms
shall have the following respective meanings:
2.2.1 "Restricted Securities" shall mean the Shares of AMCOR
bearing the legend set forth in Section 2.3 hereof.
2.2.2 "Registrable Securities" shall mean (i) the Shares of AMCOR
common stock issued to Sellers pursuant to this Agreement; and (ii) any shares
of the Company's common stock issued in respect of the Registrable Securities
pursuant to any stock split, stock dividend, recapitalization or similar event.
2.2.3 The terms "Register," "Registered" and "Registration" shall
refer to registration effected by preparing and filing a registration statement
in compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
2.2.4 "Registration Expenses" shall mean all expenses incurred by
AMCOR in connection with registration and filing fees, printing expenses, fees
and disbursements of counsel for AMCOR, blue sky fees and expenses, reasonable
fees and disbursements of counsel for the Sellers and expenses incident to or
required by any such registration.
2.2.5 "Selling Expenses" shall mean all underwriting discounts and
selling commissions, if any, applicable to the sale of Registrable Securities.
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2.3 RESTRICTED SHARES.
2.3.1 RESTRICTIVE LEGEND. Each of Sellers acknowledges and agrees
that it has acquired the Shares in a transaction not involving a public offering
and that such Shares are subject to restrictions as to resale under federal and
state securities laws. The Sellers agree and understand that until satisfaction
of the conditions set forth in this Section 2.3, stock transfer instructions
will be given to the transfer agent for the Shares and each certificate for
shares, and each certificate delivered on transfer of, or in substitution for,
any such certificate, shall bear a legend in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
IMPOSED BY THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE
SECURITIES LAWS. THE SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE
OF REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE SECURITIES ACT OF 1933
AND ANY APPLICABLE STATE SECURITIES LAWS."
2.3.2 DISPOSITION OF SHARES. Each of Sellers agree that it will
not sell, pledge, assign, transfer or otherwise dispose (collectively,
"Transfer") of any of the Shares unless the Transfer will be made pursuant to an
exemption from the registration requirements of the Securities Act or pursuant
to an effective registration statement under the Securities Act and pursuant to
an exemption from any applicable state securities laws or any effective
registration or other qualification under any applicable state securities laws,
or under any applicable exemption under state Securities Laws.
2.4 NOTICE OF PROPOSED TRANSFERS. Sellers hereby agree by acceptance of
the Shares to comply in all respects with the provisions of this Section 2.5.
Prior to any proposed Transfer of any Restricted Securities, Sellers shall give
written notice to AMCOR of Sellers intention to effect such Transfer (except in
all transactions in compliance with Rule 144), whereupon Sellers shall be
entitled to Transfer such Restricted Securities in accordance with the terms of
the notice delivered by Sellers to AMCOR.
2.5 REGISTRATION.
2.5.1 REGISTRATION OF INITIAL 100,000 SHARES. As soon as
practicable after the Closing Date, but in no event later than ninety (90) days
AMCOR shall file a Registration Statement on Form S-3 to permit the resale of a
maximum of 100,000 Shares of the Registrable Securities held by Sellers. AMCOR
shall give twenty (20) days notice to Sellers of such registration. In its
capacity as holder of Registrable Securities that are to be included in the
Registration Statement, Sellers are sometimes referred to herein as "Selling
Shareholders."
2.5.2 EFFECTIVE DATE OF REGISTRATION STATEMENT. AMCOR agrees to
use commercially reasonable efforts to have the Registration Statement described
in Section 2.5.1 declared effective as soon as practicable after the date of
filing thereof, but in any event within sixty (60) days and to keep such
Registration Statement effective for a period of nine months. Nothing in this
Section 2.5.2 shall require AMCOR to file a Registration Statement for an
underwritten offering or to participate therein.
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2.5.3 SELLING SHAREHOLDER INFORMATION. In connection with the
Registration Statement filed pursuant to this Section 2.5, AMCOR may require the
Selling Shareholders to furnish to AMCOR such information regarding the
distribution of such securities as AMCOR may from time to time reasonably
request in writing as being necessary and appropriate for completion of the
Registration Statement and each Selling Shareholder agrees to cooperate with
AMCOR in all reasonable respects in connection with the preparation and filing
of any Registration Statement hereunder in which such Registrable Securities are
included or expected to be included.
2.5.4 NOTIFICATION BY COMMISSION. The Selling Shareholders agree
that, at any time when any Registration Statement is effective, upon receipt of
any written notice from AMCOR of any of the following events: (i) any request by
Commission for amendments or supplements to the Registration Statement or for
additional information; (ii) the issuance by the Commission of any stop-order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose; (iii) the receipt by AMCOR of any notification
with respect to the suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; (iv) the existence of any fact (including without
limitation any fact or disclosure of which at such time the Board of Directors
of AMCOR shall have determined in good faith would be detrimental to AMCOR's
business interests) that results in the Registration Statement or any document
incorporated therein by reference containing an untrue statement of material
fact or omitting to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, the Selling
Shareholders will forthwith discontinue disposition of Registrable Securities
pursuant to the Registration Statement until the Selling Shareholders are in
receipt of copies of a supplemented or amended prospectus that does not contain
an untrue statement of a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading, or until they are advised in writing by
AMCOR that the use of the Prospectus may be resumed, and have received copies of
any additional or supplemental filings that are incorporated by reference and,
if so directed by AMCOR, such Selling Shareholders will deliver to AMCOR, at
AMCOR's expense, all copies, other than permanent file copies of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice.
2.5.5 COSTS AND EXPENSES. AMCOR shall pay the costs and expenses
of preparation and filing of any Registration Statement filed in accordance with
this Section 2.5, including the cost of printing and distributing the
Registration Statement, the fees and disbursements of counsel to AMCOR, the
costs and expenses of its accountants, any registration or other fees payable to
the Commission, and underwriting fees and any transfer taxes.
2.5.6 INDEMNITY. AMCOR shall indemnify and hold harmless the
Selling Shareholders against any and all losses, claims, damages and
liabilities, joint or several (including any investigation, legal and other
expenses incurred in connection with and any amount paid in settlement of any
action, suit, proceeding or asserted claim) insofar as such losses, claims,
damages and liabilities arise out of or are based upon (a) any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement under which such securities were registered under the Securities Act
and any amendments thereto or any prospectus or preliminary prospectus forming a
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part thereof or any supplement thereto, or (b) the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except for any such untrue statement
or alleged untrue statement or omission or alleged omission that is made in
reliance upon and in conformity with information furnished by the Selling
Shareholders in writing specifically for inclusion in such Registration
Statement, Prospectus, Preliminary Prospectus, amendment or supplement;
provided, however, that AMCOR shall not be liable in any such case to, or in
respect of the Selling Shareholders to the extent that any such loss, claim,
damage, liability or expenses arises out of or is based upon an untrue statement
or alleged untrue statement made in any preliminary prospectus if (i) such
Selling Shareholders fail to send or deliver a copy of the Prospectus with, or
prior to the delivery of written confirmation of the sale of Registrable
Securities, and (ii) the Prospectus would have completely corrected such untrue
statement or omission.
2.5.7 CLAIM UNDER INDEMNITY. If the Selling Shareholders shall
assert the right to be indemnified under this Section 2.5.7 Sellers will
promptly, after receipt of notice of the commencement of any action, suit or
proceeding against such party in respect of which a claim is to be made against
the indemnifying party, notify each such indemnifying party of the commencement
of such action, suit or proceeding, enclosing a copy of all papers served, the
omission so to notify such indemnifying party for any such action, suit or
proceeding shall not relieve it from any liability that it may have to any
indemnified party otherwise then under this Section 2.5.7. In case any such
action, suit or proceeding shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement.
2.5.8 REPORTING REQUIREMENTS. With a view to making available the
benefits of certain rules and regulations of the Commission that may at any time
permit the sale of the Shares to the public without registration or a
registration on SEC Form S-3, AMCOR agrees to use its best efforts to: (i) make
and keep public information available, as those terms are understood and defined
in Rule 144 of the Securities Act, at all time from and after ninety (90) days
following the effective date of the first registration under the Securities Act
filed by AMCOR for an offering of its securities to the general public; (ii)
file with the Commission in a timely manner all reports and other documents
required of AMCOR under the Securities Act and the Exchange Act; and (iii) so
long as the Sellers own Registrable Securities to furnish the Sellers forthwith
upon request (1) a written statement by AMCOR as to whether it complies with the
reporting requirements of Rule 144, the Securities Act and the Exchange Act, or
whether it qualifies as a registrant who securities may be resold pursuant to
SEC Form S-3, (2) a copy of the most recent annual or quarterly report of AMCOR
and such other reports and documents so filed by AMCOR, and (3) such other
information reasonably requested in availing the Sellers of any rule or
regulation of the Commission that would permit the selling of the Registrable
Securities without registration.
3. THE CLOSING.
3.1 CLOSING DATE. The purchase and sale (the "Closing") provided for in
this Agreement will take place at the offices of Xxxxx & Xxxxxx, LLP, 0000
Xxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000, on November __, 1997, or
such other time or place as mutually agreed by the parties hereto,
hereinafter referred to as the "Closing."
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3.2 CLOSING OBLIGATIONS.
3.2.1 SELLERS OBLIGATIONS. The Sellers will deliver to the
Purchasers (i) the certificates representing the Sellers Shares (the "Sellers
Certificate") within five (5) business days following the Closing; (ii)
Employment Agreements executed by Xxx Xxxxxxxx, Xxxxx Xxxxxxxx and Xxxx Xxxxxxxx
in the form of Schedule 1.24 (A-1)-(A-3); and (iii) such other documents as
Purchasers may reasonably request for the purpose of facilitating the
consummation or performance of any of the transactions contemplated by this
Agreement.
3.2.2 PURCHASERS OBLIGATIONS. As of the Closing Date,
Purchasers will deliver to Sellers (i) certificates representing the Shares
(the "Purchasers Certificate"), within five (5) business days following the
Closing; and (ii) such other documents as Sellers may reasonably request for
the purpose of facilitating the consummation or performance of any of the
transactions contemplated by this Agreement.
4. REPRESENTATIONS AND WARRANTIES.
4.1. REPRESENTATIONS AND WARRANTIES OF SELLERS. Each of TransPacific, Xxx
Xxxxxxxx and Xxxxx Xxxxxxxx hereby jointly and severally represents and warrants
to the Purchaser and Purchaser, in agreeing to consummate the transactions
contemplated by this Agreement, has relied upon such representations and
warranties with respect to the operations, business and assets of TransPacific,
as follows:
4.1.1. OWNERSHIP OF SELLERS SHARES. The Sellers are the exclusive
record and beneficial owners of the Sellers Shares. The Sellers possess good and
merchantable title to the Sellers Shares, and own the Sellers Shares free and
clear of any and all security interests, agreements, restrictions, claims,
liens, pledges and encumbrances of any nature or manner whatsoever. The Sellers
have the absolute and unconditional right to sell, assign, transfer, convey,
deliver and set over the Sellers Shares to the Purchaser in accordance with the
provisions of this Agreement.
4.1.2. DUE ORGANIZATION; GOOD STANDING; AUTHORITY OF TRANSPACIFIC.
TransPacific is a corporation duly organized, validly existing as a stock
corporation, and in good standing under the laws of the State of California.
TransPacific has full and complete right power, and authority to own its
properties and assets, and to carry on its business as a California corporation.
TransPacific is duly licensed, classified and authorized to do business as a
foreign corporation, and is in good standing, in each jurisdiction in which the
properties and assets owned by it or the nature of the business conducted by it
makes such licensing, qualification and authorization legally necessary. A
complete and correct copy of each of TransPacific's Articles of Incorporation,
as amended to the date of this Agreement certified by the State of California
Secretary of State ("Charter") and By-laws, as amended to the date of this
Agreement, ("Bylaws"), are attached to this Agreement as Exhibits 4.1.2-A and
4.1.2-B, respectively. The Charter and the Bylaws are in full force and effect,
and TransPacific is not in breach or violation of any of the provisions thereof.
The minute books of TransPacific containing the minutes of the meetings of the
shareholders of TransPacific and the Board of Directors of TransPacific, which
were heretofore made available to the Purchaser for examination, are complete
and correct and accurately specify all proceedings of the shareholders of
TransPacific and the Board of Directors of TransPacific.
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4.1.3. VALIDITY OF AGREEMENT. TransPacific and the Sellers, and
each of them, have the legal capacity and authority to enter into and deliver
this Agreement. This Agreement is a valid and legally binding obligation of
TransPacific and the Sellers, and each of them, and is fully enforceable against
TransPacific and the Sellers, and each of them, in accordance with its terms,
except as such enforceability may be limited by general principles of equity,
bankruptcy, insolvency, moratorium and similar laws relating to creditors rights
generally.
4.1.4. CAPITALIZATION; TRANSPACIFIC STOCK; RELATED MATTERS. The
authorized capital stock of TransPacific consists of five hundred thousand
(500,000) shares of common stock, without par value; the Sellers Shares, are
issued and outstanding and owned of record and beneficially by the Sellers. The
Sellers Shares have been duly, legally and validly issued, and are fully-paid
and non-assessable. Delivery of the Sellers Shares by the Sellers to the
Purchaser at the Closing on the Closing Date pursuant to the provisions of this
Agreement will transfer to the Purchaser full, complete and entire legal and
equitable title to one hundred percent (100%) of the issued and outstanding
capital stock of TransPacific.
4.1.5. OPTIONS, WARRANTS AND OTHER RIGHTS AND AGREEMENTS AFFECTING
TRANSPACIFIC'S CAPITAL STOCK. TransPacific has no authorized or outstanding
options, warrants, calls, subscriptions, rights, convertible securities or other
securities, as defined by the provisions of the Securities Act or any
commitments, agreements, arrangements or understandings of any manner or nature
obligating TransPacific, in any such case, to issue shares of TransPacific's
capital stock or other securities or securities convertible into or evidencing
the right to purchase shares of TransPacific capital stock or other securities.
Neither the Sellers nor TransPacific is a party to any agreement, understanding,
arrangement or commitment, or obligated by any Charter or Bylaw provision which
creates any rights in any person with respect to the authorization, issuance,
voting, sale or transfer of any shares of TransPacific's capital stock or other
Securities.
4.1.6. NO SUBSIDIARIES. TransPacific does not have any subsidiaries
and does not, directly or indirectly, own any interest in or control any
corporation, partnership, joint venture, or other business entity.
4.1.7. AGREEMENT NOT IN CONFLICT WITH OTHER INSTRUMENTS; REQUIRED
APPROVALS OBTAINED. The execution, acknowledgment, sealing, delivery, and
performance of this Agreement by TransPacific and the Sellers and the
consummation of the transactions contemplated by the provisions of this
Agreement will not (a) violate or require any registration, qualification,
consent, approval, or filing under (i) any law, statute, ordinance, rule or
regulation ("Laws") of any federal, state or local government ("Governments,")
or any agency, bureau, commission or instrumentality of any Governments
("Governmental Agencies") or (ii) any judgment, injunction, order, writ or
decree of any court, arbitrator, Government or Governmental Agency by which
TransPacific or any of its assets or properties is obligated; (b) conflict with,
require any consent, approval, or filing under, result in the breach or
termination of any provision of, constitute a default under, result in the
acceleration of the performance of TransPacific's obligations under, or result
in the creation of any claim, security interest, lien, charge, or encumbrance
upon any of TransPacific's properties, assets, or businesses pursuant to, (i)
the Charter; (ii) ByLaws; (iii) any indenture, mortgage, deed of trust, license,
permit,
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approval, consent, franchise, lease, contract, or other instrument or agreement
to which TransPacific is a party or by which TransPacific or any of
TransPacific's assets or properties is obligated; or (iv) any judgment,
injunction, order, writ or decree of any court, arbitrator, Government or
Governmental Agency by which TransPacific or any of its assets or properties is
obligated.
4.1.8. CONDUCT OF BUSINESS IN COMPLIANCE WITH REGULATORY AND
CONTRACTUAL REQUIREMENTS. TransPacific has conducted and is conducting
TransPacific's business in compliance with all applicable Laws of all
Governments and Governmental Agencies. Neither the real or personal properties
owned, leased, operated or occupied by TransPacific, nor the use, operation or
maintenance thereof, (i) violates any Laws of any Government or Governmental
Agency, or (ii) violates any restrictive or similar covenant, agreement,
commitment, understanding or arrangement.
4.1.9. LICENSES; PERMITS; RELATED APPROVALS. TransPacific possesses
all licenses, permits, consents, approvals, authorizations, qualifications, and
orders ("Permits") of all Governments and Governmental Agencies lawfully
required to enable TransPacific to conduct TransPacific's business in all
jurisdictions. All of the Permits are in full force and effect, and no
suspension, modification or cancellation of any of the Permits is pending or
threatened. A list of the Permits is attached hereto as Schedule 4.1.9.
4.1.10. LEGAL PROCEEDINGS. Except as disclosed in Schedule 4.1.10,
there is no action, suit' proceeding, claim, arbitration, or investigation by
any Government, Governmental Agency or other person (i) pending to which
TransPacific is a party; (ii) threatened against or relating to TransPacific or
any of TransPacific's assets or businesses; (iii) challenging TransPacific's
right to execute, acknowledge, seal, deliver, perform under, or consummate the
transactions contemplated by the provisions of, this Agreement; or (iv)
asserting any right with respect to any of the Sellers Shares, and there is no
basis for any such action, suit, proceeding, claim, arbitration or
investigation.
4.1.11. FINANCIAL STATEMENTS; UNDISCLOSED LIABILITIES. Sellers have
delivered to Purchaser, and Purchasers hereby acknowledge the receipt of copies
of TransPacific's balance sheets as of December 31, 1995 and 1996 together with
TransPacific's Statement of Operations and Retained Earnings for the years ended
as of same fiscal periods and TransPacific's audited Statement of Changes in
Financial Position for the years ended as of the same fiscal periods
(collectively, "Financial Statements"). Purchasers also acknowledge receipt of
copies of TransPacific's unaudited balance sheets as of August 31, 1997,
TransPacific's unaudited Statement of Operations and retained Earnings for the
period ended as of August 31, 1997, TransPacific's unaudited Statement of
Changes in Financial Position for the period ended as of August 31, 1997,
(collectively, "Interim Statements"). The Financial Statements and the Interim
Statements are in accordance with the books and records of TransPacific, are
true, correct and complete and accurately present TransPacific's financial
position as of the dates set forth therein and the results of TransPacific's
operations and changes in TransPacific's financial position for the periods then
ended, all in conformity with generally accepted accounting principles applied
on a consistent basis during each period and on a basis consistent with that of
prior periods. Except (i) as disclosed in the Financial Statements and the
Interim Statements. and (ii) as disclosed in this Agreement, TransPacific has no
liabilities or obligations of any nature or kind, known or unknown, whether
accrued, absolute, contingent, or otherwise. There is no basis for assertion
against TransPacific of any claim,
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liability or obligation not fully disclosed in the financial Statements and the
Interim Statements. All prepaid items specified in the Financial Statements and
Interim Statements have been properly accrued. Purchasers hereby acknowledge
that Purchasers have reviewed and approved the Financial Statements and the
Interim Statements.
4.1.12. TAX MATTERS. TransPacific has previously disclosed to AMCOR
certain tax liabilities of TransPacific in connection with TransPacific's
failure to pay federal and state employee withholding taxes which at the time of
disclosure to the Purchasers was in the approximate amount of Four Hundred
Seventy-two Thousand Dollars (including penalties and interest) (the "Tax
Liability"). As of the Closing Date, the actual Tax Liability may be in excess
of that amount. AMCOR has agreed to assume and be responsible for the payment of
the Tax Liability and such assumption by AMCOR has previously been reflected in
an adjustment to the consideration paid to Sellers by decreasing the Purchase
Price paid to Sellers hereunder by a reciprocal amount. Except for the Tax
Liability, TransPacific has duly and timely filed with all appropriate
Governmental Agencies, all tax returns, information returns, and reports
required to be filed by TransPacific. Except for accruals for payroll taxes
payable, income taxes payable, and deferred taxes as set forth in TransPacific's
Balance Sheet as of August 31, 1997 (collectively, '"Accrued Taxes"),
TransPacific has paid in full all taxes except the Tax Liability, interest,
penalties, assessments and deficiencies owed by TransPacific to all taxing
authorities. Complete and correct copies of (a) the income tax returns of
TransPacific for TransPacific's two (2) fiscal years ending 1995 and 1996, as
filed by TransPacific with the Internal Revenue Service ("IRS") and all state
taxing authorities ("Returns"), (b) all audit reports received by TransPacific
during the last two (2) years and issued by the IRS or any state taxing
authorities, if any; and (c) all consents and agreements entered into by
TransPacific during the last two (2) years with the IRS or any state taxing
authorities, if any, ("Tax Agreements") have been delivered to Purchasers by
Sellers and set forth in Schedule 4.1.12. All information reported on the
Returns is true, accurate, and complete. All claims by the IRS or any state
taxing authorities for taxes due and payable by TransPacific have been paid by
TransPacific. All federal income tax returns required to be filed- by
TransPacific have either been examined by the IRS, or the period during which
any assessments may be made by the IRS has expired WITHOUT waiver or EXTENSION
for all years THROUGH TransPacific's fiscal year ended December 31, 1996, and
any deficiencies or assessments claimed or made have been paid, settled, or
fully provided for in the Financial Statements. TransPacific is not a party to
and is not aware of, any pending or threatened action, suit, proceeding, or
assessment against it for the collection of taxes by any Governmental Agency.
Sellers have reviewed and approved TransPacific returns and all other tax
matters on behalf of TransPacific.
4.1.13. ACCOUNTS RECEIVABLE; ACCOUNTS PAYABLE. TransPacific's accounts
receivable specified on TransPacific's Balance Sheet as of August 31, 1997
("Balance Sheet') and all accounts receivable occurring and accruing after the
date of the Balance Sheet ("Accounts Receivable") are bona fide accounts
receivable, the full amount of which is actually owing to TransPacific. The
Accounts Receivable will be fully collectible by the Purchaser within 90 days of
the Closing Date, without offset, recoupment, counterclaim, claim or diminution.
TransPacific's accounts payable specified on the Balance Sheet and all accounts
payable occurring and accruing after the date of the Balance Sheet arose from
bona fide transactions in the ordinary course of TransPacific's business.
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4.1.14. NO REAL PROPERTY. Except as specified on Schedule 4.1.14,
TransPacific does not own or have any interest in any real property.
4.1.15. CONDITION OF PERSONAL PROPERTY. Attached hereto as Schedule
4.1.15, is a true, correct and complete list of all personal property, owned by
TransPacific or used by TransPacific in the conduct of its business, including,
but not limited to, all equipment, machinery and fixtures, ("Personal
Property"), indicating whether it is owned or the manner in which the Personal
Property is otherwise utilized by TransPacific. TransPacific has sole and
exclusive, good and merchantable title to all of the Personal Property owned by
it, free and clear of all pledges, claims, liens, restrictions, security
interests, charges and other encumbrances except as disclosed in Schedule
4.1.16.6. All of the Personal Property is in good repair and good operating
condition, fit for its intended purposes, and is adequate for the continuation
of TransPacific's business.
4.1.16. CONTRACTS, LICENSES AND OTHER AGREEMENTS. Attached hereto
are the following:
4.1.16.1. Schedule 4.1.16.1, which is a true, correct and
complete list and copy (or where they are oral, true, correct and complete
written summaries) of all leases of TransPacific relating to real property.
4.1.16.2. Schedule 4.1.16.2, which is a true, correct and
complete list and copy (or where they are oral, true, correct and complete
written summaries) of all leases of TransPacific relating to personal property.
4.1.16.3. Schedule 4.1.16.3, which is a true, correct and
complete list and copy (or where they are oral, true, correct and complete
written summaries) of all licenses, franchises, assignments or other agreements
of TransPacific relating to trademarks, trade names, patents, copyrights and
service marks (or applications therefor), unpatented designs or styles, know-how
and technical assistance.
4.1.16.4. Schedule 4.1.16.4, which is a true, correct and
complete list and copy (or where they are oral, true, correct and complete
written summaries) of all Permits, other than those listed in Exhibit 13,
relating to the operation of the business of TransPacific.
4.1.16.5. Schedule 4.1.16.5, which is a true, correct and
complete list and copy (or where they are oral, true, correct and complete
written summaries) of all employment, compensation and consulting agreements,
contracts, understandings or arrangements of TransPacific with any officer,
director, employee, broker, agent, consultant, salesman or other person,
including the names, starting dates of employment, term of employment, functions
and aggregate compensation (including salary, bonuses, commissions and other
forms or compensation).
4.1.16.6. Schedule 4.1.16.6, which is a true, correct and
complete list and copy (or where they are oral, true, correct and complete
written summaries) of all agreements of TransPacific for the purchase, sale or
lease of goods, materials, supplies, machinery, equipment, capital assets and
services having a cost in excess of $10,000 in any one instance or in excess of
$30,000 in the aggregate.
10
4.1.16.7. Schedule 4.1.16.7, which is a true, correct and
complete list and copy (or where they are oral, true, correct and complete
written summaries) of agreements and arrangements which TransPacific has with
any supplier, distributor, franchisor, dealer, sales agent, broker, or
representative.
4.1.16.8. Schedule 4.1.16.8, which is a true, correct and
complete list and copy (or where they are oral, true, correct and complete
written summaries) of all agreements and arrangements of TransPacific for the
borrowing or lending of money, on a secured or unsecured basis, or guaranteeing,
indemnifying or otherwise becoming liable for the obligations or liabilities of
any other person.
4.1.16.9. Schedule 4.1.16.9, which is a true, correct and
complete list and copy (or where they are oral, true, correct and complete
written summaries) of all agreements and arrangements of TransPacific for the
construction, modification or improvement of any building or structure having a
cost in excess of $10,000, or the incurrence of any other capital expenditure
involving payments in excess of $30,000.
4.1.16.10. Schedule 4.1.16.10, which is a true, correct
and complete list and copy (or where they are oral, true, correct and complete
written summaries) of all contracts and agreements of TransPacific for its
services other than those listed in prior Schedules.
Each of the agreements, arrangements and understandings, if any, listed in
Schedules 4.1.16.4 through 4.1.16.10, inclusive, ("Commitments") is in full
force and effect, is valid and binding upon each of the parties thereto and is
fully enforceable by TransPacific against the other party thereto in accordance
with its terms. Neither Sellers, nor TransPacific has any notice of, or any
reason to believe that there is or has been any actual, threatened or
contemplated termination or modification of any of the Commitments. No party to
any of the Commitments is in breach of or in default thereunder, nor has any
event occurred which, with the lapse of time, notice or election, may become a
breach or default by TransPacific or any other party to or under any of the
Commitments. TransPacific has the right to quiet enjoyment of all real
properties leased to it for the full term of the lease thereof. The execution,
acknowledgment, sealing, delivery, and performance of this Agreement by the
Sellers and the consummation of the transactions contemplated by the provisions
of this Agreement (i) will not result in the breach or termination of or
constitute default under any Commitment, (ii) does not require the consent of
any party to any of the Commitments, and (iii) will not give any such party the
right to terminate any of the Commitments. All payments required to be made by
Sellers, TransPacific or any other party to any of the Commitments pursuant to
any of the Commitments have been paid in full through August 31, 1997. The
Commitments are in compliance with all applicable Laws of all Governments and
Governmental Agencies and there are no Laws of any Government or Governmental
Agencies, actions, suits proceedings, arbitrations, orders, writs, or decrees in
any such case existing or proposed, which adversely affect or might adversely
affect TransPacific's rights under any of the Commitments.
4.1.17 INSURANCE. Attached hereto as Schedule 4.1.17, is a list of
all insurance policies of TransPacific, specifying with respect to each policy
the name of the insurer, a description of the policy, the dollar amount of
coverage, the amount of the
11
premium, the date through which all premiums have been paid, and the expiration
date. Each insurance policy relating to the insurance referred to in Schedule
4.1.17 is in full force and effect, is valid and enforceable, and TransPacific
is not in breach of or in default under any such policy. Neither Sellers nor
TransPacific has any notice of or any reason to believe that there is or has
been any actual, threatened, or contemplated termination or cancellation of any
insurance policy relating to the insurance referred to in such Schedule.
Included in Schedule 4.1.17 is a true, correct and complete list and summary of
all claims which have been made under each insurance policy. TransPacific has
not failed to give any notice or to present any claim under any insurance policy
in a due and timely fashion.
4.1.18 BENEFIT PLANS. As of the Closing Date, TransPacific does not
maintain a Benefit Plan (as defined below) of any type on behalf of its
management and/or employees. For purposes of the representations and warranties
set forth below in this Paragraph 4.1.18, the term "Benefit Plans" is defined
broadly to include (i) all plans, programs, or arrangements (whether or not
insured) which provide to employees pension, profit sharing, ESOP, stock option,
incentive bonus, surgical or other physician, hospitalization, major medical,
dental, optical, prescription drug, health insurance, life insurance, accidental
death and dismemberment, short-term disability, long-term disability, sick
leave, vacation, severance, supplemental unemployment, layoff, automobile,
apprenticeship and training, day care, scholarship, or group legal benefits, and
(ii) any other "employee benefit plan", as that term is defined in Section 3 of
ERISA.
4.1.19 EMPLOYEE RELATIONS AND EMPLOYMENT AGREEMENTS.
4.1.19.1 None of TransPacific's employees is represented by
a labor organization. No petition for representation has ever been filed with
the National Labor Relations Board ("NLRB") with respect to TransPacific's
employees. Sellers are not aware of any union organizational activity with
respect to TransPacific and have no reason to believe that any such activity is
being contemplated.
4.1.19.2 TransPacific is not in violation of applicable
equal employment opportunity laws, wage and hour laws, occupational safety and
health laws, federal labor laws, or any other Laws of any Government or
Governmental Agency relating to employment. Sellers have disclosed to the
Purchaser the status of all investigations, claims, charges, and
employment-related suits or controversies which have occurred with respect to
TransPacific within the last 10 years or which are presently pending or
threatened with respect to TransPacific under any employment related Law of any
Government or Governmental Agency (including common law). TransPacific has
satisfied and performed fully all judgments, decrees, conciliation agreements,
or settlement agreements by which it is bound or to which it is subject
concerning employment-related matters and each such judgment, decree, or
agreement, if any, is disclosed on Schedule 4.1.19.
4.1.19.3 TransPacific has not entered into any employment
agreements or consulting agreements and all employees and/or consultants, if
any, can be terminated at will. TransPacific has no contractual obligation or
special termination or severance arrangement in respect of any employee or
consultant, if any.
4.1.19.4 TransPacific has paid all wages due through the
Closing Date.
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4.1.19.5 Attached hereto as Schedule 4.1.19 is a list of
the names, current annual rates of salary, bonus, employee benefits, accrued
vacation times, sick pay and other compensation of all the present employees of
TransPacific whose current annual cash compensation from TransPacific (salary
and bonus) is expected to equal or exceed $20,000. None of such employees has
received or will receive an increase in salary or other compensation from
TransPacific prior to the Closing Date, except as shown on Schedule 4.1.19.
4.1.20 PATENTS; TRADEMARKS; RELATED CONTRACTS. Attached hereto as
Schedule 4.1.20, is a true, correct and complete list of all of TransPacific's
patents, trademarks, tradenames, or trademark or tradename registrations,
service marks, and copyrights or copyright registrations ("Proprietary Rights"),
if any. All of TransPacific's Proprietary Rights, if any, are valid,
enforceable, in full force and effect and free and clear of any and all security
interests, liens, pledges and encumbrances of any nature or kind. TransPacific
has not licensed, leased or otherwise assigned, transferred or granted any right
to use any of its Proprietary Rights to any other person, and no person is
infringing upon TransPacific's Proprietary Rights. TransPacific has not
infringed and is not infringing upon any patent, trademark, tradename, or
trademark or tradename registration, service xxxx, copyright, or copyright
registration of any other person.
4.1.21 BOOKS AND RECORDS; FISCAL YEAR; METHOD OF ACCOUNTING.
TransPacific has made available to the Purchaser all of its tax, accounting,
corporate and financial books and records. The books and records pertaining to
TransPacific's business made available to the Purchaser are true, correct and
complete, have been maintained on a current basis, and fairly reflect the basis
for TransPacific's financial condition and results of operations as set forth in
the Financial Statements and the Interim Statements. Except as specifically
reserved for or specified in the Financial Statements and the Interim Statements
and except for the Tax Liability disclosed in Section 4.12, TransPacific is not
obligated for, nor are any of TransPacific's assets subject to, any liabilities,
whether absolute, accrued or contingent, other than liabilities occurring in the
ordinary course of business, none of which liabilities is materially adverse.
There is no basis for the assertion against TransPacific of any liability,
obligation or claim that, directly or indirectly or in the aggregate, might
result in or cause any material adverse change in the business, future prospects
or financial condition of TransPacific which is not specified fairly and
accurately in the Financial Statements.
4.1.22. BANK ACCOUNTS AND SAFE DEPOSIT ARRANGEMENTS. Attached hereto
as Schedule 4.1.22, is a true, correct and complete list of each checking
account, savings account and other bank account and safe deposit box maintained
by TransPacific, and the names of all persons authorized to withdraw funds or
other property from, or otherwise deal with, such accounts and safe deposit
boxes.
4.1.23 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31,
1996, except as specified in Schedule 4.1.23 attached hereto and incorporated by
reference herein, TransPacific has not:
4.1.23.1 Incurred any indebtedness, obligation or liability
(contingent or otherwise), except normal trade or business obligations incurred
in the
13
ordinary course of its business, none of which was entered into for inadequate
consideration and none of which exceed $30,000 in amount.
4.1.23.2 Discharged or satisfied any security interest,
lien or encumbrance or paid any indebtedness, obligation or liability
(contingent or otherwise), except (A) current liabilities and (B) scheduled
payments pursuant to obligations under contracts, agreements, or leases listed
in the attached Schedules.
4.1.23.3 Mortgaged, pledged, or subjected to lien, charge,
security interest, or other encumbrance any of its assets or properties not
previously disclosed in any other schedule to this Agreement.
4.1.23.4 Sold, assigned, transferred, leased, disposed of,
or agreed to sell, assign, transfer, lease, or dispose of, any of its assets or
properties.
4.1.23.5 Acquired or leased any assets or property of any
other.
4.1.23.6 Canceled or compromised any debt or claim.
4.1.23.7 Waived or released any rights.
4.1.23.8 Transferred or granted any rights with respect to
know-how or any rights existing under any leases, licenses, agreements,
inventions, or any of the Proprietary Rights.
4.1.23.9 Granted or made any contract, agreement, promise
or commitment to grant any wage, salary or employee benefit increase to, or
entered into any employment contract, bonus, stock option, profit sharing,
pension, incentive, retirement or other similar arrangement or plan with, any
officer, employee or other person.
4.1.23.10 Entered into any collective bargaining agreement
or made any commitment or incurred any liability to any labor organization.
4.1.23.11 Made any capital expenditure in excess of $50,000
or entered into any commitment therefor.
4.1.23.12 Suffered any casualty loss or damage, whether or
not such loss or damage is or was covered by insurance.
4.1.23.13 Suffered any adverse change in its operations,
earnings, assets, liabilities, properties, or business or in its condition
(financial or otherwise).
4.1.23.14 Changed the nature of its business or its method
of doing business.
4.1.23.15 Other than in the ordinary course of business,
entered into any transaction, contract, or commitment.
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4.1.23.17 Suffered a loss of any supplier or suppliers,
which loss (individually or in the aggregate) has had, or may have, an adverse
effect on its financial condition, results of operations, business, or
prospects.
4.1.23.18 Suffered any material adverse change in its assets
or liabilities, in its condition, financial or otherwise, or in its business,
properties, earnings or net worth.
4.1.24 INSIDER TRANSACTIONS. Attached hereto as Schedule 4.1.24, is
a true, correct and complete list of the following:
4.1.24.1. The amounts and other essential terms of
indebtedness or other obligations, agreements, undertakings, liabilities or
commitments (contingent or otherwise) of TransPacific to or from any past or
present officer, director, member, stockholder or any person related to,
controlling, controlled by or under common control with any of the foregoing
("Control Persons").
4.1.24.2 All transactions between each Control Person and
TransPacific since TransPacific's date of incorporation, and all proposed or
contemplated transactions with each Control Person, together with the essential
terms thereof.
4.1.25 ADVERSE CONDITIONS. Sellers have no knowledge of any present
or future condition, state of facts or circumstances which has affected or may
affect adversely the business of TransPacific or prevent TransPacific from
carrying on its business.
4.1.26 FULL DISCLOSURE. This Agreement (including the schedules
hereto) does not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements contained herein not
misleading. There is no fact known to Sellers or TransPacific which is not
disclosed in this Agreement which materially adversely affects the accuracy of
the representations and warranties contained in this Agreement or TransPacific's
financial condition, results of operations, business, or prospects.
4.1.27 NEGOTIATIONS WITH OTHER PERSONS. Sellers will not, and will
not permit TransPacific, to initiate, encourage the initiation by others, or
participate in any discussions or negotiations with any other persons relating
to the sale or other disposition of any of the capital stock of TransPacific or
any assets of TransPacific and will promptly notify the Purchaser if any person
initiates such discussions or negotiations with them or TransPacific.
4.1.28 NO BROKERAGE. Sellers have not incurred any obligation or
liability, contingent or otherwise for brokerage fees, finder's fees, agent's
commissions, or the like in connection with this Agreement or the transactions
contemplated hereby.
4.1.29 CUSTOMERS AND SALES. Neither TransPacific nor the Sellers,
have any information, nor are they aware of any facts, indicating that any
customer of TransPacific intends to cease doing business with TransPacific or to
materially reduce the amount of the business that each such customer is
presently doing with TransPacific.
15
4.1.30 ENVIRONMENTAL MATTERS.
4.1.30.1. COMPLIANCE WITH LAW. Except as specified in
Schedule 4.1.30, and, by this TransPacific, its business and properties, whether
leased or owned, and its assets are in compliance with all applicable statutes,
laws, ordinances, rules and regulations of any governmental authority, agency or
instrumentality, domestic or foreign, including, without limiting the generality
of the foregoing, the Comprehensive Environmental Response, Compensation and
Liability Act, as amended by the Superfund Amendments and Reauthorization Act,
the Solid Waste Disposal Act, the Clean Water Act, the Clean Air Act, the Toxic
Substances Act, all applicable state statutes, laws, rules and regulations
concerning the same or similar subject matters, and all successor or related
legislation, and all other federal, state and local statutes, laws, rules and
regulations relating to emissions, discharges, releases or threatened released
of pollutants, contaminants or hazardous or toxic substances into ambient air,
surface water, groundwater, publicly owned treatment works, septic systems or
land or otherwise into the environment or, the use, treatment, storage,
disposal, handling, manufacture, sale, transportation or shipment of any
hazardous or toxic waste, material, substance or product or by-product or
otherwise relating to pollution or the protection of health or the environment
(collectively, the "Environmental Laws").
4.1.30.2 CONTINUED COMPLIANCE WITH LAW. Except as specified
in Schedule 4.1.30.2, there are not past or present conditions, circumstances,
activities, practices, incidents, actions or plans which may interfere with or
prevent continual compliance with the Environmental Laws by TransPacific or
which may result in any claim, litigation, action, proceeding, hearing or
investigation against TransPacific based on or related to the manufacture,
processing, distribution, use, treatment, storage, disposal, transportation,
handling, or the emission, discharge, release or threatened release into the
environment, of any pollutants, contaminants or hazardous or toxic substances
(as defined in any Environmental Law). There are no underground storage tanks on
any property of TransPacific.
4.1.30.3 COMPLIANCE WITH PERMITS. Except as specified in
Schedule 4.1.30.3, TransPacific is in full and complete compliance in the
conduct of TransPacific's business with all terms and conditions of any and all
required permits, licenses and authorizations, and TransPacific is, also, in
full and complete compliance with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules and
timetables specified by any Environmental Law or specified by any regulation,
code, plan, order decree, judgment, injunction, notice or demand letter issued,
entered, promulgated or approved pursuant thereto.
4.1.31 OSHA COMPLIANCE. TransPacific has complied with all
requirements of the Occupational Safety and Health Act and its California
equivalents and regulations promulgated pursuant to any such legislation, the
consequences of a violation of which could have a material adverse effect on the
operations of TransPacific, and with all orders, judgments, and decrees of any
tribunal pursuant to such legislation that apply to the business and properties
of TransPacific.
4.1.32 NO BRIBES OR KICKBACKS. TransPacific has not, directly or
indirectly, paid or delivered any fee, commission, or other money, funds, or
property,
16
however characterized, to any person, in the United States or any other country,
that is in any manner related to the business or operations of TransPacific, and
the Sellers, and each of them, do not know and do not have reason to believe
that any conduct by TransPacific, the Sellers, or any of them, is or has been
illegal pursuant to any federal, state, or local law of the United States or any
other country having jurisdiction of such conduct. TransPacific, the Sellers,
and each of them, have not participated, directly or indirectly, in any boycott
or other similar practice affecting any of the actual or potential customers of
TransPacific has at all times done business in an open and ethical manner.
4.1.33 INVESTMENT INTENT. Sellers are acquiring the Shares for
investment only, for the Seller's own account, and not with a view to, for offer
for sale or for sale in connection with, the distribution or transfer thereof.
The Shares are not being purchased for subdivision or fractionalization thereof;
and the Seller has no contract, undertaking, agreement or arrangement with any
person to sell, hypothecate, pledge, donate or otherwise transfer (with or
without consideration) to any such person any of the Shares, and Seller has no
present plans or intention to enter into any such contract, undertaking,
agreement or arrangement.
4.2. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. Purchaser represents
and warrants to Sellers that:
4.2.1. DUE ORGANIZATION; GOOD STANDING; POWER. Purchaser is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware. Purchaser has all requisite corporate power to
enter into this Agreement and to perform its obligations hereunder.
4.2.2. AUTHORIZATION AND VALIDITY OF DOCUMENTS. The execution,
acknowledgment, sealing, delivery, and performance of this Agreement by
Purchaser, and the consummation by Purchaser of the transactions contemplated
hereby, have been duly and validly authorized by Purchaser. This Agreement has
been duly executed, acknowledged, sealed and delivered by Purchaser and is a
legal, valid, and binding obligation of the Purchaser, enforceable against
Purchaser in accordance with its terms, except as such enforceability may be
limited by general principles of equity, bankruptcy, insolvency, moratorium and
similar laws relating to creditors rights generally.
4.2.3. INVESTMENT INTENT. The Purchaser is acquiring the Sellers
Shares for investment only, for the Purchaser's own account, and not with a view
to, for offer for sale or for sale in connection with, the distribution or
transfer thereof. The Sellers Shares are not being purchased for subdivision or
fractionalization thereof; and the Purchaser has no contract, undertaking,
agreement or arrangement with any person to sell, hypothecate, pledge, donate or
otherwise transfer (with or without consideration) to any such person any of the
Sellers Shares, and the Purchaser has no present plans or intention to enter
into any such contract, undertaking, agreement or arrangement.
4.2.4 BROKERAGE. Purchaser has not incurred any obligation or
liability, contingent or otherwise, for brokerage fees, finder's fees, agent's
commissions, or the like in connection with this Agreement or the transactions
contemplated hereby.
4.2.5 NO CONFLICT. Neither the execution and delivery of this
Agreement nor the consummation or performance of any of the transactions
contemplated
17
by this Agreement will give any person the right to prevent, delay or otherwise
interfere with any of the transactions contemplated by this Agreement pursuant
to (a) any provision of Purchaser's charter or by-laws; (b) any resolution
adopted by the Board of Directors or Shareholders of Purchaser; (c) any legal
requirement or order to which Purchaser may be subject; (d) any contract to
which Purchaser is a party or by which Purchaser may be bound. Purchaser is not
and will not be required to obtain any consent from any person or agency in
connection with the execution and delivery of this Agreement or the consummation
or performance of any of the transactions contemplated by this Agreement.
4.2.6 COMMISSION FILINGS. AMCOR has made available to Sellers
copies of AMCOR's (i) annual report for the fiscal year ended August 31, 1996,
and (ii) any filings under the Securities Act and the Securities Exchange Act of
1934, as amended ("Exchange Act"), since January 1, 1997, in each case as filed
with the SEC. AMCOR has filed all reports, registration statements and other
documents required to be filed under the Exchange Act and the rules and
regulations thereunder, and all such reports, registration statements and other
documents complied, in all material respects with the requirements of the
Exchange Act. As of their respective dates, the AMCOR annual report and other
filings did not contain any untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the statement
therein, in light of the circumstances under which they were made, not
misleading.
5. COVENANTS AGAINST COMPETITION.
5.1. SELLERS' AGREEMENT NOT TO COMPETE. The parties acknowledge that
following the consummation of the purchase and sale of the Sellers Shares, the
Purchaser will enter into an employment agreements with Xxx X. Xxxxxxxx and
Xxxxx X. Xxxxxxxx (collectively, the "Franklins"). The Purchaser and the
Franklins acknowledge and agree that the services of the Franklins will be of a
special and unusual character which have a unique value to the Purchaser, the
loss of which cannot be adequately compensated by damages in an action at law
and, if used in competition with the Purchaser, could cause serious harm to the
Purchaser. Additionally, the Franklins and the Purchaser also recognize that an
important part of the Franklins' duties will be to develop good will for the
Purchaser through the Franklins' personal contact with individual and group
subscribers of TransPacific's services, agents and other persons having business
relationships with the Purchaser, and that there is a danger that this good
will, a proprietary asset of the Purchaser, may follow Xxx and Xxxxx Xxxxxxxx,
if and when their relationship with the Purchaser is terminated. Accordingly,
Xxx and Xxxxx Xxxxxxxx agree that they shall not, during the time period that
they are employed by Purchaser and for a period of two years from the date of
the termination of such employment for any reason whatsoever, do any of the
following: (i) directly or indirectly, solicit or otherwise contact any person
who then receives or has the right to receive or at any prior time received or
had the right to receive from TransPacific's or Purchaser's services
("Subscriber") for the purpose of seeking to obtain any such Subscriber as a
subscriber to or beneficiary of a similar business conducted by any person other
than the Purchaser; (ii) directly or indirectly employ, hire or otherwise engage
the services of or associate in any business with any other person who is or has
been employed by either the Purchaser, or any affiliate of the Purchaser, unless
such other person shall have ceased to be employed by the Purchaser, (as the
case may be), or the Affiliate of the Purchaser, for at least one year, or (iii)
engage, directly or indirectly, as a proprietor, stock holder, partner,
director, of office, employee, independent
18
contractor or otherwise in the business of providing services in competition
with Purchaser, in any of the counties of California or any other state, as more
particularly set forth in Schedule 5.1, in which Purchaser provides its services
on the date the Franklins' employment with the Purchaser is terminated for any
reason whatsoever.
5.2. ENFORCEABILITY. The parties agree that to the extent that any
provision or portion of Section 5.1 of this Agreement shall be held, found or
deemed to be unreasonable, unlawful or unenforceable by a court of competent
jurisdiction, then any such provision or portion thereof shall be deemed to be
modified to the extent necessary in order that any such provision or portion
thereof shall be legally enforceable to the fullest extent permitted by
applicable law; and the parties do further agree that any court of competent
jurisdiction shall, and the parties do hereby expressly authorize, request and
empower any court of competent jurisdiction to, enforce any such provision or
portion thereof or to modify any such provision or portion thereof in order that
any such provision or portion thereof shall be enforced by such court to the
fullest extent permitted by applicable law.
5.3. RIGHT TO ENJOIN. As the violation by Xxx X. Xxxxxxxx or Xxxxx X.
Xxxxxxxx of the provisions of Section 5.1 of this Agreement would cause
irreparable injury to the Purchaser, and there is no adequate remedy at law for
such violation, the Purchaser shall have the right, in addition to any other
remedies available at law or in equity, to enjoin Xxx X. Xxxxxxxx or Xxxxx X.
Xxxxxxxx in a court of equity from violating such provisions.
6. INDEMNIFICATION.
6.1. TransPacific, Xxx X. Xxxxxxxx and Xxxxx X. Xxxxxxxx shall jointly
and severally defend, indemnify and hold Purchaser its officers, directors,
stockholders, representatives, agents, accountants, attorneys, servants and
employees, and their respective heirs, personal and legal representatives,
guardians, successors and assigns harmless, in respect of any and all claims,
threats, liabilities, taxes, interest, fines, penalties, suits, actions,
proceedings, demands, damages, losses, costs and expenses (including without
limitation, settlement costs and any attorneys' and experts' fees and court
costs) of every kind and nature reasonably incurred by Purchaser arising out of,
resulting from, or in connection with:
6.1.1. Any misrepresentation or breach by TransPacific or the
Sellers of any representation or warranty specified in this Agreement.
6.1.2. Any nonfulfillment, failure to comply or breach by
TransPacific or the Sellers or either of them, of or with any covenant, promise
or agreement of the Sellers or any of Sellers specified in this Agreement.
6.2. INDEMNIFICATION BY PURCHASER. The Purchaser shall defend
indemnify and hold the Sellers and their respective heirs, personal and legal
representatives, guardians, successors and assigns harmless from and against any
and all claims, threats, liabilities, taxes, interest, fines, penalties, suits,
actions, proceedings, demands, damages, losses, costs and expenses (including
attorneys' and experts' fees and court costs) of every kind and nature arising
out of, resulting from, or in connection with:
19
6.2.1. Any misrepresentation omission or breach by Purchaser of
any representation or warranty specified in this Agreement.
6.2.2. Any nonfulfillment, failure to comply or breach by the
Purchaser of or with any covenant, promise or agreement of the Purchaser
specified in this Agreement.
6.3 CLAIMS FOR INDEMNIFICATION; LIMITATIONS ON INDEMNIFICATION.
6.3.1 Whenever any claim shall arise for indemnification
hereunder, the party entitled to indemnification ("Indemnified Party") shall
promptly notify the other party ("Indemnifying Party") of the claim and, when
known, the facts constituting the basis for such claim. In the event of any
claim for indemnification hereunder resulting from or in connection with any
claim or legal proceedings by a third party, the notice to the Indemnifying
Party shall specify, if known, the amount or an estimate of the amount of the
liability arising therefrom. The Indemnified Party shall not settle or
compromise any claim by a third party for which it is entitled to
indemnification hereunder, without the prior written consent of the
Indemnifying Party (which shall not be unreasonably withheld) unless suit
shall have been instituted against it and the Indemnifying Party shall not
have acknowledged and performed its indemnity obligations after notification
of such suit as provided in Section 6.3.2.
6.3.2 In connection with any claim giving rise to indemnity
hereunder resulting from or arising out of any claim or legal proceeding by a
person who is not a party to this Agreement, the Indemnifying Party shall
timely pay all reasonable attorneys' fees, costs and other expenses as they
are incurred by the Indemnified Party in connection with the defense of any
such claim or legal proceeding. The Indemnified Party shall be entitled to
select capable and qualified counsel to defend any such claim. The
Indemnifying Party shall be entitled to participate in the defense of any
such action, with its counsel and at its own expense. If the Indemnifying
Party does not acknowledge to the Indemnified Party, in writing, its
obligations to indemnify the Indemnified Party with respect to all elements
of such claim or does not timely pay all reasonable attorneys' fees, costs
and other expenses incurred by the Indemnified Party in connection with such
claim, the Indemnified Party may defend against such claim or litigation, in
such manner as it may deem appropriate, including, but not limited to,
settling such claim or litigation, in such manner as it may deem appropriate,
including, but not limited to, settling such claim or litigation, after
giving notice of the same to the Indemnifying Party, on such terms as the
Indemnified Party may deem appropriate. If the Indemnifying Party thereafter
seeks to question the manner in which the Indemnified Party defended such
third party claim or the amount or nature of any such settlement, the
Indemnifying Party shall have the burden to prove by a preponderance of the
evidence that the Indemnified Party did not defend or settle such third party
claim in a reasonably prudent manner.
6.3.3 Each party will fully cooperate with the other in the
defense or prosecution of any litigation or proceedings already instituted or
which may be instituted hereafter against or by such party relating to or
arising out of the conduct of the business of TransPacific prior to or after
the Closing Date (other than litigation arising out of the transactions
contemplated by this Agreement). The party requesting such cooperation shall
pay the out-of-pocket expenses (including legal fees and disbursements) of
the party providing such cooperation and of its officers, directors,
employees and agents reasonably
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incurred in connection with providing such cooperation, but shall not be
responsible to reimburse the party providing such cooperation for such party's
time spent in such cooperation or the salaries or costs of fringe benefits or
other similar expenses paid by the party providing such cooperation to its
officers, directors, employees and agents while assisting in the defense or
prosecution of any such litigation or proceeding.
6.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Regardless of any
investigation at any time made by or on behalf of any party, or of any
information any party may have in respect thereof, all covenants, agreements,
representations and warranties made hereunder or pursuant thereto or in
connection with the transactions contemplated hereby shall survive the Closing.
7. MISCELLANEOUS
7.1 NOTICES. Any notice, direction or instrument required or permitted to
be given pursuant to this Agreement shall be given in writing by (i) telegram,
facsimile transmission or similar method, if confirmed by mail as herein
provided, by mail; (ii) if mailed postage prepaid, by certified mail, return
receipt requested; or (iii) hand delivery to any party at the addresses of the
parties specified, below. If given by telegram or facsimile transmission or
similar method or by hand delivery, such notice, direction or instrument shall
be deemed to have been given or made on the day on which it was given, and if
mailed, shall be deemed to have been given or made on the second (2nd) business
day following the day after which it was mailed. Any party may, from time to
time by similar notice, give notice of any change of address, and in such event,
the address of such party shall be deemed to be changed accordingly. The
address, telephone number and facsimile transmission number for the notice of
each party are:
If to Sellers: TransPacific Environmental Incorporated
00000 X. Xxxxxxxx Xxxxxxx
Xxxxx Xx Xxxxxxx, Xxxxxxxxxx 00000
Telephone: 000.000.0000
Facsimile: 562.906.5226
If to Purchaser: AMCOR Capital Corporation
00-000 Xxxxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: 000.000.0000
Facsimile: 760.398.9530
7.2 BROKERS. Each of the parties hereto represents and warrants that no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission, or to the reimbursement of any of its expenses, in
connection with the transaction contemplated hereby based upon arrangements made
by or on behalf of either of the parties.
7.3 RECOVERY OF ENFORCEMENT COSTS. In the event any party shall institute
any action or proceeding to enforce any provision of this Agreement to seek
relief from any violation of this Agreement, or to otherwise obtain any judgment
or order relating to or arising from the subject matter of this Agreement, each
prevailing party shall be entitled to
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receive from each losing party such prevailing party's reasonable attorneys'
fees and costs incurred to prosecute or defend such action or proceeding.
7.4 ASSIGNMENT. No party shall have the right, without the consent of the
other party, to assign, transfer, sell, pledge, hypothecate, delegate, or
otherwise transfer, whether voluntarily, involuntarily or by operation of law,
any of such party's rights or obligations created by the provisions of this
Agreement, nor shall the parties' rights be subject to encumbrance or the claim
of creditors. Any such purported assignment, transfer, or delegation shall be
null and void.
7.5 CAPTIONS AND INTERPRETATIONS. Captions of the articles and sections of
this Agreement are for convenience and reference only, and the works specified
therein shall in no way be held to explain, modify, amplify or aid in the
interpretation, construction, or meaning of the provisions of this Agreement.
The language in all parts to this Agreement, in all cases, shall be construed in
accordance with the fair meaning of that language as if prepared by all parties
and not strictly for or against any party. Each party and counsel for such party
have reviewed this Agreement. The rule of construction, which requires a court
to resolve any ambiguities against the drafting party, shall not apply in
interpreting the provisions of this Agreement.
7.6 ENTIRE AGREEMENT. This Agreement and the schedules to this Agreement
are the final written expression and the complete and exclusive statement of all
the agreements, conditions, promises, representations, warranties and covenants
between the parties with respect to the subject matter of this Agreement, and
this Agreement supersedes all prior or contemporaneous agreements, negotiations,
representations, warranties, covenants, understandings and discussions by and
between and among the parties, their respective representatives, and any other
person, with respect to the subject matter specified in this Agreement.
7.7 CHOICE OF LAW AND CONSENT TO JURISDICTION. All questions concerning
the validity, interpretation, or performance of any of the terms, conditions and
provisions of this Agreement or of any of the rights or obligations of the
parties shall be governed by, and resolved in accordance with, the laws of the
State of California, without regard to conflicts of law principles. The parties
hereby consent in any dispute, action, litigation or other proceeding concerning
this Agreement, to the jurisdiction of the courts located in Orange County,
California.
7.8 WAIVER AND MODIFICATION. No modification, supplement or amendment of
this Agreement or of any covenant, condition, or limitation specified in this
Agreement shall be valid unless the same is made in writing and duly executed by
both parties. No waiver of any covenant, condition, or limitation specified in
this Agreement shall be valid unless the same is made in writing and duly
executed by the party making the waiver. No waiver of any provision of this
Agreement shall be deemed, or shall constitute, a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing waiver.
7.9 NUMBER AND GENDER. Whenever the singular number is used in this
Agreement and, when required by the context, the same shall include the plural,
and vice versa; the masculine gender shall include the feminine and the neuter
genders, and vice versa, and the word "person" shall include individual,
company, sole proprietorship,
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corporation, joint venture, association, joint stock company, fraternal order,
cooperative, league, club, society, organization, trust, estate, governmental
agency, political subdivision or authority, firm, municipality, congregation,
partnership, or other form of entity. As used in this Agreement, the word
"affiliate," as it relates to a person, shall be defined as and mean a parent,
spouse, brother or sister, or natural or adopted lineal descendent or spouse of
such descendent of such person, and any proprietorship, corporation,
partnership, congregation, organization, firm, estate, association, league,
club, society, joint venture, trust or other form of entity in which such person
or parent, spouse, brother or sister, or natural or adopted lineal descendent or
spouse of such descendent or such person may have an equity interest or in which
such person or parent, spouse, brother or sister, or natural or adopted lineal
descendent or spouse of such descendent of such person is a proprietor, partner,
officer, director, shareholder, employee, consultant, independent contractor,
owner, co-venturer, employer, agent, representative, settlor or beneficiary.
7.10 SEVERABILITY. If any term or provision hereof, or the application
thereof to any person, entity or circumstance, shall to any extent be invalid or
enforceable in any pertinent jurisdiction, then the remainder hereof shall not
be affected thereby but shall be valid and enforceable as if the invalid term or
provision were not a part hereof.
7.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will constitute an original, but together shall be
construed as one document.
IN WITNESS WHEREOF the parties have executed this Common Stock Exchange
Agreement in duplicate on the date specified in the preamble of this Agreement.
AMCOR Capital Corporation, Delaware corporation
By: /s/ Xxxx Xxxxxxx
--------------------------------------
Its: Chief Executive Officer
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Its: Secretary
TRANSPACIFIC ENVIRONMENTAL, INC., a California corporation
By: /s/ Xxx X. Xxxxxxxx
--------------------------------------
Its: President
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------
Its: Secretary
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