Registration of Securities of a Small-Business Issuer — Form 10-SB Filing Table of Contents
Document/ExhibitDescriptionPagesSize
1: 10SB12G Bluefire Ethanol Fuels, Inc. HTML 277K
2: EX-2.1 Stock Purchase Agreement HTML 322K
3: EX-3.1 Amended and Restated Articles of Incorporation HTML 23K
4: EX-3.2 Amended and Restated Bylaws HTML 110K
5: EX-10.1 Form Directors Agreement HTML 79K
6: EX-10.2 Form Executive Employment Agreement HTML 70K
7: EX-10.3 Technology License Agreement HTML 143K
8: EX-10.4 Asset Transfer and Acquisition Agreement HTML 120K
9: EX-21.1 Subsidiaries HTML 6K
THIS
STOCK PURCHASE AGREEMENT AND PLAN OF REORGANIZATION is made and entered into
this 31st day of May, 2006, by and among Sucre Agriculatural Corp., a Delaware
corporation (hereinafter referred to as “Buyer”), the shareholders of Blue Fire
Ethanol, Inc., (collectively the “SELLER”, listed on Exhibit
A),
BLUEFIRE ETHANOL INC., a Nevada corporation (hereinafter referred to as the
“Company”), and TBeck Capital, Inc.
RECITALS:
a. Seller
owns all of the 10,000 shares of issued and outstanding common stock, par value
$1.00, of the Company (“Company Shares”).
b. Buyer
has
authorized capital stock consisting 50,000,000 shares of common stock, par
value
$.001 (“Buyer Common Stock”), of which 1,053,000 are currently issued and
outstanding, however, of which 3,000,000 will be issued and outstanding prior
to
the Closing (defined below).
c. Seller
is
willing to sell to Buyer, and Buyer is willing to purchase from Seller, all
of
the Company Shares in exchange for Buyer’s issuance of Seventeen Million
(17,000.000) shares of Buyer Common Stock to Seller, on the terms and subject
to
the conditions set forth herein.
d. Buyer
is
to have $700,000 in cash assets at the time of Closing for the Company to
utilize as working capital moving forward.
NOW,
THEREFORE, in consideration of the above premises and of the mutual covenants,
conditions and agreements set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
parties, intending to be legally bound, hereby agree as follows:
ARTICLE
1
DEFINITIONS
1.1Definitions. In
addition to the terms defined elsewhere in this Agreement, for purposes of
this
Agreement:
"Affiliate"
means, with respect to any Person, any other Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such first Person.
"Agreement"
means this Stock Purchase Agreement and Plan of Reorganization, together with
the Schedules and the Exhibits attached hereto, as the same may be amended,
supplemented or otherwise modified from time to time.
“Buyer
Charter Documents” means the organizational documents and By-laws of
Buyer.
"Closing"
means the actual transfer and delivery of the documents transferring the Company
Shares to Buyer, the payment of the Purchase Consideration and the exchange
and
delivery by the parties of the other documents and instruments contemplated
by
this Agreement.
"Closing
Date" means, subject to the provisions of Section 6.1, on or before May 31,2006. .
“Company
Charter Documents” means the organizational documents and By-laws of the
Company.
“Company
Balance Sheet Date” means April 15 2006 .
“Code”
shall mean the Internal Revenue Code of 1986, as amended.
“Defensible
Title” means such right, title and interest that is (a) evidenced by an
instrument or instruments filed of record in accordance with the conveyance
and
recording laws of the applicable jurisdiction to the extent necessary to prevail
against competing claims of bona fide purchasers for value without notice,
and
(b) subject to Permitted Encumbrances, free and clear of all Liens, claims,
infringements, burdens and other defects.
“Dollars”
means the lawful currency of the United States of America.
“Environmental
Law” means any federal, state, local or foreign statute, code, ordinance, rule,
regulation, policy, guideline, permit, consent, approval, license, judgment,
order, writ, decree, common law, injunction or other authorization in effect
on
the date hereof, at the Closing Date, or at a previous time applicable to the
operations of the Company: (a) relating to emissions, discharges, releases
or
threatened releases of hazardous materials into the natural environment,
including into ambient air, soil, sediments, land surface or subsurface,
buildings or facilities, surface water, groundwater, publicly-owned treatment
works, septic systems or land; (b) relating to the generation, treatment,
storage, disposal, use, handling, manufacturing, recycling, transportation
or
shipment of hazardous materials; (c) relating to occupational health and safety;
or (d) otherwise relating to the pollution of the environment, solid waste
handling treatment or disposal, operation or reclamation of land, or protection
of environmentally sensitive areas.
“GAAP”
means United States generally accepted accounting principles, consistently
applied.
"Knowledge"
with respect to (i) Seller and the Company means the knowledge of each Seller
and the knowledge of each Company's officers and directors listed in
Exhibit
A,
after
reasonable inquiry, and (ii) Buyer means the knowledge of the officers and
directors of Buyer and TBeck Capital as listed in Exhibit
B,
after
reasonable inquiry.
3
“Labor
Claims” means any employment and/or social security related claim, whether
judicial or administrative, including but not limited to claims for rights,
benefits, indemnities or actions that could correspond to the employees
pursuant to the Labor Law, Social Security Law, Civil Code, Working Environment
and Conditions Law, Housing Policy Law, National Institute for Cooperative
Education Law, Feeding Law for Employees, their Regulations, as well
as any other legal or contractual provision related to the services
performed by the employees.
"Lien"
means any mortgage, deed of trust, pledge, hypothecation, security interest,
encumbrance, easement, claim, lien, lease (including any capitalized lease)
or
charge of any kind, whether voluntarily incurred or arising by operation of
law
or otherwise, affecting any assets or property, including any agreement to
give
or grant any of the foregoing, any conditional sale or other title retention
agreement and the filing of or agreement to give any financing statement with
respect to any assets or property.
"Material
Adverse Effect" or "Material Adverse Change" means, when used in connection
with
any Person, any change or effect (or any development that, insofar as can
reasonably be foreseen, is likely to result in any change or effect) that would
result in an adverse change in the business, financial condition, operating
results, assets, operations or business prospects of such Person, or in a labor
disruption or casualty loss or damage to the assets of such Person.
“Permitted
Encumbrances” means: (a) Liens for Taxes, assessments or other governmental
charges or levies if the same shall not at the particular time in question
be
due and delinquent or (if foreclosure, distraint, sale or other similar
proceedings shall not have been commenced or, if commenced, shall have been
stayed) are being contested in good faith by appropriate proceedings and if
the
Company shall have set aside on its books such reserves (segregated to the
extent required by sound accounting practices) as may be required by or
consistent with GAAP and, whether reserves are set aside or not, are listed
on
the applicable Disclosure Schedule; (b) Liens of carriers, warehousemen,
mechanics, laborers, materialmen, landlords, vendors, workmen and operators
arising by operation of any Companies business; (c) Liens incurred in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other social security legislation which would not
and
will not, individually or in the aggregate, result in a Material Adverse Effect
on any Company; (d) Liens incurred in the ordinary course of business to secure
the performance of bids, tenders, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance and repayment bonds and other
obligations of a like nature which would not and will not, individually or
in
the aggregate, result in a Material Adverse Effect on any Company; (e) Liens,
easements, rights-of-way, restrictions, servitudes, permits, conditions,
covenants, exceptions, reservations, and other similar encumbrances incurred
in
the ordinary course of business or existing on property and not materially
impairing the value of the assets of any Company, or interfering with the
ordinary conduct of the business of any Company, or rights to any of its assets;
and (f) any defects, irregularities or deficiencies in title to easements,
rights-of-way or other surface use agreements that do not materially adversely
affect the value of any asset of any Company by an amount in excess of $10,000
in the aggregate.
4
"Person"
means an individual, corporation, partnership, limited liability company,
association, trust, unincorporated organization or other entity.
"Purchase
Consideration" means the aggregate price to be paid by Buyer for the Company
Shares held by Seller, as provided for in Article 2.
“Taxes”
means taxes of any kind, levies, or other like assessments, customs, duties,
imposts, charges, or fees, including income, gross receipts, ad valorem, value
added, excise, real or personal property, asset, sales, use, royalties, license,
payroll, transaction, capital, net worth, and franchise taxes, estimated taxes,
withholding, employment, Social Security, Workman’s Compensation, utility,
severance, production, unemployment compensation, occupation, premium, windfall
profits, transfer and gains taxes, and other governmental taxes imposed or
payable to any state, local, municipal, or foreign governmental subdivision,
or
agency thereof, and in each instance such term shall include any interest,
penalties, or additions to tax attributable to any such tax, including penalties
for failure to file any tax return or report.
ARTICLE
2
PURCHASE
AND SALE
2.1Purchase
and Sale.
At the
Closing on the Closing Date, and upon all of the terms and subject to all of
the
conditions of this Agreement, each Seller shall sell, assign, convey, transfer
and deliver to Buyer, and Buyer shall purchase, all of Sellers' Company Shares,
such sale and purchase transactions being collectively referred to herein as
the
"Purchase".
2.2Payments
on Closing.
At the
Closing on the Closing Date, Buyer shall, in consideration for good and
marketable title to the Company Shares, free and clear of all Liens, charges,
encumbrances and restrictions of any kind (other than those imposed pursuant
to
the terms of this Agreement), issue Seventeen Million Shares of the restricted
Buyer Common Stock to Sellers on a pro rata basis of their holdings of Company
Stock. The exact breakdown on the 17,000,000 shares is attached as Schedule
3.4
to this
Agreement.
2.3.Buyer
Assets.
At the
time of Closing, Buyer shall have cash assets of $700,000 ($1,00,000 net of
$300,000 commissions to be paid as discussed in Section 3.23 herein) to be
used
as working capital for the Company. Prior to the Closing, Buyer shall have
raised the $700,000 (plus $300,000 paid in commissions for this transaction)
by
a private offering of equity to investors related to TBeck Capital. The offering
documents and sample subscription agreement are attached hereto as Exhibit
C.
The
shares sold pursuant to this offering are included in the 3,000,000 shares
of
issued Buyer Common Stock as Buyer is capitalized prior to the Closing. Buyer
warrants that it has filed all necessary state and federal securities law
filings in regards to this financing prior to the Closing.
Furthermore,
TBeck Capital and Westcap Securities Inc., financial advisers to Buyer, shall
agree to raise a minimum of $4,000,000 within 180 days for the date of the
Closing, on terms and conditions acceptable to BlueFire Ethanol, as well as
$5,000,000 during the fourth quarter of 2007 as institutional
financing.
5
2.4 Additional
Consideration at Closing. Prior to the Closing, Buyer will effect a name change
with the Pink Sheets trading organization from Sucre Agricultural, Inc. to
Blue
Fire Ethanol, Inc., and a ticker symbol change (and CUSIP # change) from SAGR
to
an available ticker symbol as issued by the NASD.
2.5The
Closing. The
Closing of the transactions contemplated by this Agreement shall take place
at
10:00 a.m., local time on the Closing Date, at the offices of the Company,
or at
such other time and place as the parties might hereafter mutually agree in
writing.
2.6Deliveries.
At the
Closing on the Closing Date:
(a) Seller
will deliver to Buyer:
(i) certificates
representing the Company Shares, duly endorsed (or accompanied
by duly executed stock powers);
(ii) a
certificate executed by each Seller representing and warranting to Buyer that,
except as otherwise stated in such certificate, each of Seller' representations
and warranties in this Agreement was accurate in all respects as of the date
of
this Agreement and is accurate in all material respects as of the Closing Date
as if made on the Closing Date, except that representations and warranties
that
are by their express provisions made as of a specific date need be true and
correct only as of such specific date; and
(b) Buyer
will deliver or cause to be delivered to Seller:
(i) the
certificates evidencing the Buyer Company Stock;
(ii) $700,000
of cash capital available for the working capital needs of the
Company;
(iii)
written
resignation of the entire board of directors of the Buyer, as well
as its
officers, with a consent to appoint to the board of directors of
the Buyer
the appointees of the Seller, which shall include one designee
of TBeck
Capital Inc. on such board.
(iv)
a
certificate executed by Buyer to the effect that, except as otherwise
stated in such certificate, each of Buyer's representations and warranties
in this Agreement is accurate in all material respects as of the
Closing
Date as if made on the Closing Date.
2.7Tax
Free Reorganization.
The
parties intend that the transaction under this Agreement qualify as a tax-free
reorganization under Sections 368 and 354 of the Internal Revenue Code of 1986,
as amended.
Seller
and the Company, jointly and severally, represent and warrant to Buyer that
the
statements contained in this Article 3 are true, correct and complete as of
the
date of this Agreement.
3.1Organization,
Standing and Power.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada, and is duly qualified to do business
and
is in good standing in each jurisdiction in which the nature of its business
or
the ownership or leasing of its properties makes such qualification necessary,
other than in such jurisdictions where the failure to be so qualified to do
business or in good standing (individually or in the aggregate) would not have,
or would not reasonably be likely to have, a Material Adverse Effect on the
Company. The Company has all requisite corporate power and authority to own,
lease, and operate its properties and assets and to carry on its business as
now
conducted. Complete and correct copies of the certificate and articles of
incorporation, as amended, and the bylaws, as amended, of the Company as in
effect on the date of this Agreement have been previously delivered by Seller
to
Buyer.
3.2No
Subsidiaries.
(a) The
Company has no subsidiaries, and does not own, directly or indirectly, any
capital stock or other ownership, participation or equity interest in any
corporation, partnership, limited liability company, association, joint venture
or other entity , and (b) there are no outstanding contractual obligations
or
commitments of the Company to acquire or make any investment in any shares
of
capital stock or other ownership, participation, or equity interest in any
corporation, partnership, limited liability company, association, joint venture,
or other entity.
3.3Capital
Structure.
(a) As
of the
date hereof, the authorized capital stock of the Company consists of 10,000
shares of common stock, par value $1.00. At the close of business on April30,2006, 10,000 shares of common stock were issued and outstanding (see
Schedule
3.4
for
shareholder list). No shares of common stock were held by the Company in its
treasury. The Company has no outstanding stock options, stock appreciation
rights, phantom units, profit participation or similar rights with respect
to
the Company. No shares of capital stock or other equity or voting securities
of
the Company are reserved for issuance or are outstanding. All of the issued
and
outstanding shares of capital stock of the Company are duly authorized, validly
issued, fully paid and non-assessable and have not been issued in violation
of
any preemptive rights or in violation of state or federal securities laws,
and
there are no preemptive rights with respect thereto. No capital stock has been
issued by the Company since the Company Balance Sheet Date. Except as set forth
above, as of the date hereof there are no outstanding or authorized securities,
options, warrants, calls, rights, commitments, preemptive rights, agreements,
arrangements, or undertakings of any kind to which the Company is a party,
or by
which it is bound, obligating the Company to issue, deliver or sell, or cause
to
be issued, delivered or sold, any shares of capital stock or other equity or
voting securities of, or other ownership interests in, the Company or obligating
the Company to issue, grant, extend, or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement, or undertaking. There
are not as of the date of this Agreement and there will not be at the Closing
Date any shareholder agreements, voting trusts or other agreements or
understandings to which the Company is a party or by which it is bound relating
to the voting of any shares of the capital stock of the Company.
7
(b) The
shares of capital stock of the Company held by Seller (the "Company
Shares")
constitute all of the issued and outstanding shares of capital stock or other
ownership interests of the Company. Except for the purchase and sale of the
Company Shares pursuant to this Agreement, there are no outstanding claims,
options, or other rights of any Person to purchase from Seller, and no contracts
or commitments providing for the granting of rights to acquire, any of the
Company Shares. There are no claims pending or, to the Knowledge of Seller
and
the Company, threatened, against the Company or any Seller that concern or
affect title to the Company Shares, or that seek to compel the issuance of
capital stock or other securities of the Company.
(c) There
are
no outstanding obligations in connection with the redemption by the Company
of
any of the previously issued and outstanding shares of capital stock of the
Company.
3.4Title
to Company Shares.
Each
Seller has legal, beneficial, and record title to the Company Shares set forth
opposite such Seller's name on Schedule
3.4,
free
and clear of any and all Liens, restrictions, options, voting trusts or
agreements, proxies, encumbrances, claims or charges of any kind whatsoever
(except as set forth in Section 3.3) and are validly issued, fully paid and
non-assessable. Seller has or will have at the Closing physical custody of
the
certificates evidencing all of the Company Shares. At Closing, Buyer will
acquire good and defensible title to the Company Shares, free and clear of
any
and all Liens, restrictions, options, voting trusts, or agreements, proxies,
encumbrances, claims or charges of any kind.
3.5Authorization;
Enforceability.
(a) The
Company has the requisite corporate power and authority, to enter into this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby have been duly authorized by
all
necessary corporate action on the part of the Company. This Agreement has been
duly and validly executed and delivered by the Company and constitutes a valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except that (i) such enforcement may be subject
to
bankruptcy, insolvency, reorganization, moratorium, or other similar laws or
judicial decisions now or hereafter in effect relating to creditors' rights
generally and (ii) the remedy of specific performance and injunctive relief
may
be subject to equitable defenses and to the discretion of the court before
which
any proceeding may be brought. The execution and delivery of this Agreement
by
the Company do not, and the consummation of the transactions contemplated hereby
and compliance with the provisions hereof will not, conflict with, or result
in
any violation of, or default (with or without notice or lapse of time, or both
)
under, or give rise to a right of termination, cancellation, or acceleration
of
or "put" right with respect to any obligation or to loss of a material benefit
under, or result in the creation of any Lien on any of the properties or assets
of the Company under, any provision of (i) the articles of incorporation or
bylaws of the Company,
each as amended through the date hereof (the "Company
Charter Documents"),
(ii)
any loan or credit agreement, note, bond, mortgage, indenture, lease, or other
agreement, instrument, permit, concession, franchise, or license applicable
to
the Company or its properties or assets or (iii) subject to governmental filings
and other matters referred to in the following sentence, any judgment, order,
decree, statute, law, ordinance, rule or regulation, or arbitration award
applicable to the Company or its properties or assets, other than in the case
of
clauses (ii) and (iii), any such conflicts, violations, defaults, rights, or
Liens that individually or in the aggregate would not have, or would not
reasonably be likely to have, a Material Adverse Effect on the Company and
would
not, or would not reasonably be likely to, materially impair the ability of
the
Company to perform its obligations hereunder or prevent the consummation of
any
of the transactions contemplated hereby. No consent, approval, order, or
authorization of, or registration, declaration, or filing with, any court,
administrative agency, or commission or other governmental authority or agency,
domestic or foreign, including local authorities (a "Governmental
Authority"),
is
required by or with respect to the Company in connection with the execution
and
delivery of this Agreement by the Company or the consummation by the Company
of
the transactions contemplated hereby.
8
(b) The
execution, delivery and performance of this Agreement and all of the agreements,
documents and instruments required under this Agreement by Seller and the
consummation by Seller of the transactions contemplated hereby and thereby
(including the sale, transfer, assignment, and delivery of the Company Shares),
are within the power, legal rights, legal capacity, and authority of Seller.
This Agreement is, and the other agreements, documents and instruments required
by this Agreement will be, when executed and delivered by Seller, the valid
and
binding obligations of Seller, enforceable against Seller in accordance with
their terms, except as (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium, or other similar laws or judicial
decisions now or hereafter in effect relating to creditors' rights generally
and
(ii) the remedy of specific performance and injunctive relief may be subject
to
equitable defenses and to the discretion of the court before which any
proceeding may be brought.
3.6Absence
of Conflicting Agreements.
Neither
the execution, delivery, or performance of this Agreement by Seller or the
Company, nor the consummation of the transactions contemplated hereby does
or
will, after the giving of notice, or the lapse of time or both, or
otherwise:
(a) subject
to receipt of any necessary third party consents, conflict with, result in
a
breach of, constitute a default, or give rise to a right of termination under
the certificate and articles of incorporation or bylaws of the Company, any
federal, state, or local law, statute, ordinance, rule, or regulation applicable
to the Company or Seller, or any court or administrative order or process,
or
any contract, agreement, arrangement, commitment, or plan to which Seller or
the
Company is a party or by which Seller or the Company is bound;
(b) result
in
the creation of any Lien upon any of the Company Shares, or the assets,
business, and properties of the Company;
(c) subject
to receipt of any necessary third party consents, terminate, amend, or modify,
or give any party the right to terminate, amend, modify, abandon, or refuse
to
perform any contract, agreement, arrangement, commitment, or plan to which
the
Company is a party or by which it is bound;
(d) accelerate
or modify, or give any party the right to accelerate or modify, the time within
which, or the terms under which, any duties or obligations are to be performed,
or any rights or benefits are to be received, under any contract, agreement,
arrangement, commitment, or plan to which the Company is a party or by which
it
is bound; or
(e) to
the
Knowledge of Seller and the Company, require the consent, waiver, approval,
permit, license, clearance or authorization of, or any declaration or filing
with, any court or public agency or other authority. All Parties agree to
cooperate fully with each other to have change of control in the Company to
be
approved by all necessary government authorities.
9
3.7Condition
of Properties.
To the
Knowledge of Seller and the Company, except as may be limited by the ordinary
course of business occurring on a day-to-day basis, all properties and assets
owned or utilized by the Company are in good operating condition and repair,
free from any defects (except such minor defects as do not interfere with the
use thereof in the conduct of the normal operations of the Company), ordinary
wear and tear excepted, and have been maintained consistent with prudent
industry practice. No other assets or properties are needed to permit the
Company to carry on its business as conducted during the preceding 12 months
and
as proposed to be conducted. To the Knowledge of Seller and the Company, all
buildings, plants and other structures owned or otherwise utilized by the
Company are in good condition and repair, ordinary wear and tear excepted,
and
have no structural defects or defects (except such minor defects as do not
significantly interfere with the use thereof in the conduct of the normal
operations of the Company) and are suitable and adequate for the purposes for
which they are presently being used.
(a)Schedule
3.8
is a
true, correct and complete list of all contracts of the categories described
below (whether written or oral), including all amendments thereto, existing
as
of the date of this Agreement to which the Company is a party or by which any
of
the properties, business or assets of the Company is bound or is materially
affected ("Material
Contracts"):
(i) any
note,
agreement, mortgage, indenture, security agreement, and other instrument
relating to the borrowing of money or evidence of credit for the deferred
purchase price of property, or the direct or indirect guarantee by the Company
of any such indebtedness or deferred purchase price in excess of
$10,000.00;
(ii) any
lease
of real property or material personal property providing for annual payments
by
the Company under any such lease or group of related leases in excess of
$10,000.00;
(iii) any
agreement that has a term of one year or more and/or provides for future
payments in excess of $10,000.00 that is not terminable (without penalty) on
no
more than one month's notice;
(iv) any
management, employment and consulting agreement or other contract for personal
services that is not terminated simultaneously with the execution of this
Agreement or is not terminable on no more than one month's notice without
penalty;
10
(v) any
agreement providing for severance pay, collective bargaining agreements, and
labor contracts;
(vi) any
surety, performance and maintenance bond in excess of $10,000.00;
(vii)
any
plan,
contract or arrangement providing for bonuses, pensions, deferred compensation,
retirement plan payments, profit sharing, incentive pay, or for any other
employee benefit plan;
(viii) any
brokerage or finder's agreement obligating the Company to make a payment
thereunder;
(ix) any
agreement that restricts the right of the Company to engage in any place in
any
line of business;
(x) any
contract, commitment, agreement or arrangement between the Company and any
Affiliate thereof;-
(xi) any
contract or agreement relating to the sale, lease or other disposition of any
of
the properties, business or assets of the Company having a value, individually
or in the aggregate, in excess of $10,000.00;
(xii) any
contract, commitment, or agreement that involves commodity or interest rate
swaps, floors, caps, collars, futures, options or other similar transactions;
and
(xiii)
any
obligation currently outstanding affecting any of the properties, business
or
assets of the Company which requires a single or series of related future
expenditures in the aggregate in excess of $10,000.00.
(b) Seller
and the Company have provided Buyer with access to true, correct and complete
copies of all written Material Contracts and all amendments, modifications
and
supplements thereto, and have provided Buyer with accurate descriptions of
all
oral Material Contracts, including the parties thereto, the value of the goods
and services to be provided thereunder, and the financial obligations of the
parties thereunder.
11
(c) To
the
Knowledge of Seller and the Company, as of the date of this Agreement, the
Company's relationships are generally satisfactory with its suppliers who are
material to the conduct of the Company's business.
(d) As
of the
date of this Agreement, the Company does not have outstanding any powers of
attorney with any Person.
(f) The
Company has performed in all material respects each material term, covenant
and
condition of each of the Material Contracts to which it is a party or by which
it is bound, and, to the Knowledge of Seller and the Company, no material event
of default on the part of any other party thereto exists under any of the
Material Contracts. The Company is current on all payment obligations under
all
Material Contracts to which it is a party or by which it is bound.
(g) To
the
Knowledge of Seller and the Company, no event has occurred under any of the
Material Contracts that would constitute a material default thereunder on the
part of any other party thereto.
(h) Each
of
the Material Contracts is valid, binding, enforceable, and in full force and
effect, unimpaired by any acts or omissions of the Company or its officers,
directors, and agents, and constitutes the legal and binding obligation of
the
Company in accordance with its terms, except that (i) such enforcement may
be
subject to bankruptcy, insolvency, reorganization, moratorium or other similar
laws or judicial decisions now or hereafter in effect relating to creditors'
rights generally, and (ii) the remedy of specific performance and injunctive
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
3.9No
Default.
The
Company is not in default, breach or violation (and, to the Knowledge of Seller
and the Company, no event has occurred which, with notice or the lapse of time
or both, would constitute a default or violation) of any term, condition, or
provision of (i) the Company Charter Documents; (ii) any note, bond, mortgage,
indenture, license, agreement or other instrument or obligation to which the
Company is now a party or by which the Company or any of its properties,
business or assets is bound; or (iii) any order, writ, injunction, decree,
statute, rule or regulation applicable to the Company, except in the case of
clauses (ii) and (iii) for defaults or violations which in the aggregate would
not have a Material Adverse Effect on the Company.
3.10
Intellectual
Property.
The
Company owns, or is licensed or otherwise has the right to use, all patents,
patent rights, trademarks, trademark rights, trade names, trade name rights,
service marks, service mark rights, copyrights, technology, know-how, processes
and other proprietary intellectual property rights and computer programs
("Intellectual
Property Rights")
which
are material to the condition (financial or otherwise) or conduct of the
business and operations of the Company. To the Knowledge of Seller and the
Company, (i) the use of Intellectual Property Rights by the Company in its
current operations does not infringe on the Intellectual Property Rights of
any
Person, subject to such claims and infringements as do not, in the aggregate,
give rise to any liability on the part of the Company which could have a
Material Adverse Effect on the Company, and (ii) no Person is, in any manner
that could have a Material Adverse Effect on the Company, infringing on any
Intellectual Property Right of the Company. No claims are pending or, to the
Knowledge of Seller and the Company, threatened that the Company is infringing
or otherwise adversely affecting the rights of any Person with regard to any
Intellectual Property Right.
12
3.11
Leases.
(a) The
leases described on Schedule
3.11
constitute all of the lease agreements between the Company and third Persons
affecting the Company's real property, material personal property, or relating
to the operation of the business of the Company. The Company and Seller have
furnished true and complete copies of each of the leases to Buyer, including
any
and all amendments, supplements or modifications thereto.
(b) The
Company has performed in all material respects each material term, covenant
and
condition of each of the leases to which it is a party or which is required
to
be performed by it at or before the date hereof, and no material event of
default on the part of the Company and, to the Knowledge of Seller and the
Company, on the part of any other party thereto, exists under any
lease.
(c) Each
of
the leases is legal, valid, binding, enforceable and in full force and effect,
unimpaired by any acts or omissions of the Company and constitutes the legal
and
binding obligation of the Company in accordance with its terms, except (i)
such
enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium
or other similar laws or judicial decisions now or hereafter in effect relating
to creditors' rights generally and (ii) the remedy of specific performance
and
injunctive relief may be subject to equitable defenses and to the discretion
of
the court before which any proceeding therefore may be brought.
(d) To
the
Knowledge of Seller and the Company, there is no law, ordinance, regulation
or
requirement in existence, including any Environmental Law, as amended, which
would require any expenditure to remediate, remedy, remove, modify, or improve
any of the real property that is the subject of any lease in order to bring
it
into compliance therewith.
(e) There
are
no leasing commissions or similar payments due, arising out of, resulting from
or with respect to any lease which are owed by the Company, except to the extent
accrued on the Company Balance Sheet.
(f) The
Company has not assigned, transferred, conveyed, mortgaged, or deeded in trust
any interest in the leases.
(g) The
Company has not subordinated its interest under any of the leases to any third
party, mortgagee, or otherwise.
13
(h) The
Company enjoys peaceful and undisturbed possession under all
leases.
3.12
Financial
Statements.
The
Company and Seller have provided to Buyer true and complete copies of (i) the
unaudited balance sheet of the Company as of December 31,2005, and the related
unaudited statements of operations and changes in stockholders' equity for
the
fiscal year then ended and (ii) the unaudited balance sheet of the Company
and
the related unaudited statements of operations for the three-month period ended
on March 31, 2006 (collectively, the "Financial
Statements").
The
Financial Statements (i) have been prepared in accordance with generally
accepted accounting principles (“GAAP”)(except for certain balance sheet
classifications, and certain required reports and all footnote disclosures
have
been omitted) on a basis consistent throughout the periods covered thereby;
(ii)
present fairly, in all material respects, the financial condition of the Company
as of the dates thereof and the results of its operations for the periods then
ended (subject to normal year-end audit adjustments); and (iii) are consistent
with the books and records of the Company, which books and records are true,
correct and complete in all material respects. As referred to herein, the
Company’s Balance Sheet Date shall mean March 31, 2006. The Seller and the
Company will take the following steps prior to the Closing Date:
(a) Execution
of an
exclusive license from Arkenol Inc. with the Company to deploy the Arkenol
cellulose to ethanol technology in North America.
(b) Execution
of an
asset transfer agreement of certain assets from Arkenol to the Company with
a
estimated fair market value of at least $16million.
3.13Absence
of Certain Changes or Events.
Since
the Company Balance Sheet Date, the Company has conducted its business only
in
the ordinary course consistent with past practices and there has not
been:
(a)
any
event, occurrence, circumstance or development that has had, or has been
reasonably likely to have, a Material Adverse Effect with respect to the
Company;
(b) any
default on the part of the Company under any indebtedness of the Company, or
any
event which with the lapse of time or the giving of notice, or both, would
constitute such a default;
(c) any
issuance, sale, or other disposal of any capital stock or other equity security
of the Company, or any grant of options, warrants or other rights to obtain
any
of its capital stock;
(d) (A)
any
contract or agreement entered into by the Company on or prior to the date
hereof
relating to any material acquisition or disposition of any assets or business,
or (B) any modification, amendment, assignment, termination, or relinquishment
by the Company of any contract, license or other right (including any insurance
policy naming it as a beneficiary or loss payable payee) that reasonably would
be likely to have a Material Adverse Effect on the Company, in each case other
than transactions, commitments, contracts or agreements in the ordinary course
of business consistent with past practices and those contemplated by this
Agreement;
14
(e) any
amendment made or authorized to the Company Charter Documents;
(f) any
creation or assumption by the Company of any security interest or other Lien
imposed upon any material assets of the Company;
(g) any
damage, destruction, or loss, whether or not covered by insurance, that has
or
reasonably could be expected to have a Material Adverse Effect on the
Company;
(h) any
commitment to or liability to any labor organization which represents, or
proposes to represent, employees of the Company;
(i) any
sale,
assignment, lease, or other transfer or disposition of any of the assets or
properties of the Company, except in the ordinary course of business or in
connection with the acquisition of similar property or assets or retirements
of
assets in the ordinary course of business consistent with past
practices;
(j) any
write
down of the value of, or write off as uncollectible, any asset or accounts
receivable of the Company;
(k) any
declaration, setting aside or payment, directly or indirectly, of any cash
or
non-cash dividend or other cash or non-cash distribution in respect of any
of
the securities of the Company, or any direct or indirect redemption, purchase,
or other acquisition of any securities of the Company or agreement to do
so;
(l) any
material change in the Company's accounting methods, principles or practices;
(m) any
amendment of any term of any outstanding security of the Company that would
materially increase the obligations of the Company under such
security;
(n) any
making of any loan, advance, or capital contribution to or material investment
in any Person by the Company other than loans, advances, capital contributions,
or investments, in each case not exceeding $10,000.00; or
(o) (A)
any
incurrence or assumption by the Company of any indebtedness for borrowed money
other than under existing credit facilities (or any renewals, replacements
or
extensions thereof that do not materially increase the commitments thereunder)
or otherwise by the Company in the ordinary course of business consistent with
past practices, or (B) any guaranty, endorsement, or other incurrence or
assumption of liability, whether directly, contingently or otherwise, by the
Company for the obligations of any other Person, other than in the ordinary
course of business consistent with past practice.
15
3.14No
Undisclosed Liabilities.
The
Company has no debt, liability or obligation of any kind, whether accrued,
absolute, contingent, inchoate, determined, determinable, or otherwise, except
for (i) liabilities or obligations which, individually or in the aggregate,
would not have a Material Adverse Effect on the Company, (ii) liabilities or
obligations under this Agreement or incurred in connection with the transactions
contemplated hereby, (iii) liabilities or obligations disclosed in Schedule
3.14;
(iv)
liabilities or obligations disclosed in the Financial Statements; and (v)
liabilities or obligations arising in the ordinary course of business after
the
Balance Sheet Date and which do not have a Material Adverse Effect on the
Company. Specifically, the Seller agree that all debt of the Company not listed
on Schedule
3.14
shall be
repaid or forgiven as of the date of the Closing.
3.15No
Litigation.
There
is no suit, action, proceeding, or investigation presently pending or, to the
Knowledge of Seller or the Company, threatened against or affecting the Company
that has had or could reasonably be expected to have a Material Adverse Effect
on the Company or prevent, hinder or materially delay the ability of the Company
to consummate the transactions contemplated by this Agreement, nor is there
any
judgment, decree, injunction, rule or order of any Governmental Authority or
arbitrator outstanding against the Company which has had, or which, insofar
as
reasonably can be foreseen, in the future could have, any such effect.
3.16Compliance
with Laws and Permits.
The
Company is not in violation of, or in default in any material respect under,
and
no event has occurred that (with notice or the lapse of time or both) would
constitute a violation of or default under (a) its certificate or articles
of
incorporation, bylaws or other organizational documents, or (b) any applicable
law, rule, regulation, ordinance, order, writ, decree or judgment of any
Governmental Authority. The Company has obtained and holds all permits,
licenses, variances, exemptions, orders, franchises, approvals and
authorizations of all Governmental Authorities necessary for the lawful conduct
of its business and the lawful ownership, use and operation of its assets
("Company Permits"), except for Company Permits which the failure to obtain
or
hold would not, individually or in the aggregate, have a Material Adverse Effect
on the Company. None of the Company Permits will be adversely affected by the
consummation of the transactions contemplated hereunder or requires any filing
or consent in connection therewith. The Company is in compliance with the terms
of its Company Permits, except where the failure to comply would not,
individually or in the aggregate, have a Material Adverse Effect on the Company.
No investigation or review by any Governmental Authority with respect to the
Company is pending or, to the knowledge of the Company, threatened, other than
those the outcome of which would not, individually or in the aggregate, have
a
Material Adverse Effect on the Company. To the knowledge of the Company, no
other party to any Material Contract is in material breach of the terms,
provisions or conditions of such Material Contract.
3.17Title
to Assets.
The
Company has Defensible Title to all of its assets. Except for Permitted
Encumbrances, the Company has good, marketable, and Defensible Title to its
assets. All leases pursuant to which the Company leases any assets are in full
force and effect, and the Company has not received any notice of default under
any such lease.
16
3.18
Financial
and Commodity Hedging.
The
Company has no currently outstanding financial hedging positions (including
fixed price controls, collars, swaps, caps, hedges or puts).
3.19
Environmental
Matters.
Based
upon claims asserted or notices transmitted by Governmental Authorities or
other
third parties:
(a) The
Company has conducted its business and operated its assets, and is conducting
its business and operating its assets, in material compliance with all
Environmental Laws;
(b) The
Company has not been notified by any Governmental Authority or other third
party
that any of the operations or assets of the Company is the subject of any
investigation or inquiry by any Governmental Authority or other third party
evaluating whether any material remedial action is needed to respond to a
release or threatened release of any Hazardous Material or to the improper
storage or disposal (including storage or disposal at offsite locations) of
any
Hazardous Material;
(c) Neither
the Company nor, to the Company's Knowledge, any Governmental Authority or
other
third person has filed any notice under any federal, state or local law
indicating that (i) the Company is responsible for the improper release into
the
environment, or the improper storage or disposal, of any Hazardous Material,
or
(ii) any Hazardous Material is improperly stored or disposed of upon any
property of the Company or any property formerly owned, leased or operated
by
the Company;
(d) The
Company has no knowledge of any material contingent liability in connection
with
(i) the release or threatened release into the environment at, beneath, or
on
any property now or previously owned, leased or operated by the Company, or
(ii)
the storage or disposal of any Hazardous Material;
(e) The
Company has not received any claim, complaint, notice, inquiry or request for
information from any Governmental Authority or other third person involving
any
matter which remains unresolved as of the date hereof with respect to any
alleged material violation of any Environmental Law or regarding potential
liability under any Environmental Law relating to or in connection with
operations or conditions of any facilities or property (including off-site
storage or disposal of any Hazardous Material from such facilities or property)
currently or formerly owned, leased or operated by the Company;
(f) All
underground storage tanks and solid waste storage, treatment and/or disposal
facilities owned or operated by the Company are used and operated in material
compliance with Environmental Laws;
(g) The
Company has obtained all material permits, licenses, approvals, and other
authorizations that are required with respect to the operation of the Company's
properties and assets under the Environmental Laws, and the Company is in
material compliance with all terms and conditions of such required permits,
licenses, approvals, and authorizations;
17
(h) To
the
Knowledge of the Company and the Seller, there are no polychlorinated biphenyls
or asbestos located in, at, on, or under any facility or real property owned,
leased or operated by the Company that require removal, decontamination or
abatement pursuant to Environmental Laws;
(i) There
are
no past or present events, conditions, circumstances, activities, practices,
incidents or actions that could reasonably be expected to interfere with or
prevent material compliance by the Company with any Environmental Law, or that
could reasonably be expected to give rise to any material liability under the
Environmental Laws;
(j) No
Lien
has been recorded against any property, facility or assets currently owned
by
the Company under any Environmental Law; and
(k) The
execution, delivery and performance of this Agreement and the consummation
of
the
transactions contemplated hereby will not affect the validity or require the
transfer of any permits, licenses or approvals held by the Company under any
Environmental Law, and will not require any notification, disclosure,
registration, reporting, filing, investigation or remediation under any
Environmental law.
3.20
Taxes.
(a) The
Company has timely filed (taking into account any extensions) all Tax Returns
required to be filed by it on or before the date of this Agreement and has
timely paid or deposited all Taxes and estimated Taxes which are required to
be
paid or deposited on or before such date. Each of the Tax Returns filed by
the
Company is accurate and complete in all material respects and has been completed
in all material respects in accordance with applicable laws, regulations and
rules. The Company Balance Sheet reflects an adequate reserve for all Taxes
for
which the Company may be liable for all taxable periods and portions thereof
through the date thereof. The Company has not waived any statute of limitations
with respect to any Taxes of the Company. No material deficiencies for any
Taxes
have been proposed, asserted or assessed against the Company, no requests for
waivers of the time to assess any such Taxes have been granted or are pending,
and there are no Tax Liens upon any assets of the Company (except for liens
for
ad valorem Taxes not yet delinquent and other Taxes not yet due and payable).
There are no current examinations of any Tax Return of the Company being
conducted by any Governmental Authority and there are no settlements of any
prior examinations which could reasonably be expected to adversely affect any
taxable period for which the statute of limitations has not run. The Company
is
not a party to a Tax allocation agreement, Tax sharing agreement, Tax indemnity
agreement, Tax partnership agreement or similar agreement or arrangement. The
Company has complied in all material respects with all applicable laws, rules
and regulations relating to the payment and withholding of Taxes and has in
all
respects timely withheld from employee wages and paid over such taxes to the
appropriate Governmental Authority.
3.21Governmental
Authorizations.
The
Company holds, and on the Closing Date will hold, all the necessary, regular
and
valid licenses and authorizations from any Governmental Authority required
to
own its properties and assets and operate its business, and each such
authorization is validly issued and in full force and effect.
18
3.22Insurance.
The
Company has in full force and effect the liability and casualty insurance,
errors and omissions insurance. The Company is not in default in any material
respect with respect to such insurance policies, and the Company has not failed
to give any notice or present any claim under any policies in due and timely
fashion.
3.23Brokers.
Other
than the shell cost reimbursemet due to TBeck Capital for $200,000, and the
consulting fee due to BGLR Consulting Inc. for $100,000, both of which are
payable by the Buyer at Closing, neither party has any obligation or liability
to pay any fees or commission to any broker, finder, agent or similar Person,
with respect to the transactions contemplated by this Agreement.
3.24Bank
Accounts.
All
bank or other financial institution accounts of the Company are described in
Schedule
3.24,
and
such Schedule also lists all Persons with check writing authority on behalf
of
the Company.
3.25Related
Party Transactions.
Except
as disclosed in Schedule
3.25,
there
are no currently existing business arrangements, other than employment, between
the Company and any of Seller, officers, or directors of the Company, or any
of
their respective Affiliates and there are no continuing obligations owing from
the Company to any third Person created by any of Seller, officers, or directors
of the Company or any of their Affiliates. None of Seller, officers or directors
of the Company, or any of their respective Affiliates owns any material asset,
tangible or intangible, which is used in the operation of the business of the
Company. At the time of the Closing, the Seller shall have compromised and
settled all claims from previous shareholder or investors in the Seller’s or
Company’s investors.
3.26Real
Properties.
(a)Schedule
3.26
lists
all real property owned, leased, or occupied by the Company (the "Real
Property"),
including the legal description of all land, and all encumbrances thereon,
and
sets forth a description of all plants, buildings, or other structures located
thereon. There are now in full force and effect, to the extent legally required,
duly issued certificates of occupancy permitting the Real Property and
improvements located thereon to be legally used and occupied as the same are
now
constituted, and the business activities of the Company thereon are, in all
material respects, consistent with and permitted under, and not in default
of,
applicable zoning ordinances, restrictive covenants, or other restrictions.
To
the Knowledge of Seller and the Company, there is not:
(i) any
claim
of adverse possession or prescriptive rights involving any of the Real
Property;
(ii) any
structure located on any Real Property which encroaches on or over the
boundaries
of neighboring or adjacent properties; or
(iii)
any
structure of any other Person which encroaches on or over the boundaries
of
any of
such Real Property.
19
To
the
knowledge of Seller and the Company, no public improvements have been commenced
and none are planned which in either case may result in special assessments
against or otherwise materially adversely affect any Real Property. To the
Knowledge of Seller and the Company, there are no:
(i)
proposed
increases in assessed valuations of any Real Property;
(ii)
orders requiring repair, alteration or correction of any existing
condition affecting any Real Property or the systems or improvements
thereto;
(iii)
conditions
or defects which could give rise to an order of the sort referred to in clause
(ii) above;
(iv)
pending
or proposed modifications of zoning or similar laws affecting the Real Property;
or
(v) structural,
mechanical, or other defects of material significance affecting any of the
Real
Property.
(b)No
Condemnation or Expropriation.
Neither
the whole nor any portion of the Real Property is subject to any order to be
sold or is being condemned, expropriated or otherwise taken by any Governmental
Authority with or without payment of compensation therefor, nor to the Knowledge
of Seller and the Company has any such condemnation, expropriation or taking
been proposed.
(c)Utilities.
All
utilities, including telephone, sewer and water, electricity and gas necessary
for the use of the Real Property, as currently used by the Company, are
available, connected and operational.
3.27
Prospects;
Outstanding Commitments; Customers and Suppliers.
(a) Seller
and the Company have no Knowledge of, nor have any of them been informed of,
any
existing or anticipated changes in the policies of the customers, suppliers
or
others with whom the Company transacts business that could affect the
availability of materials, or supplies, in any material respect, or of any
legislation or regulation, that will have a Material Adverse Effect on the
Company. As of the date of this Agreement, Seller and the Company have no
Knowledge of any proposed or contemplated changes in the employment status
of
any members of management or key employees of the Company.
(b) All
outstanding commitments of the Company for the delivery of goods or the
performance of services were made on an arms’ length basis, and to the Knowledge
of Seller and the Company there are no facts or circumstances that could have
a
Material Adverse Effect with respect thereto.
20
3.28Minute
Books.
The
minute books of the Company, as previously made available to Buyer, contain
complete and accurate records of all meetings and accurately reflect all other
corporate action of the shareholders and board of directors of the Company.
The
stock certificate books and stock transfer ledgers of the Company are true
and
complete.
3.29Absence
of Certain Business Practices.
Neither
the Company nor any officer, employee or agent of the Company has, directly
or
indirectly, within the past five years, given or agreed to give any gift or
similar benefit to any customer, supplier, government employee or other Person
who is or may be in a position to help or hinder the business of the Company
(or
to assist the Company in connection with any actual or proposed transaction)
which (i) might subject the Company to any damage or penalty in any civil,
criminal, or governmental litigation or proceeding, (ii) if not given in the
past, might have had a Material Adverse Effect on the assets, business, or
operations of the Company as reflected in the Financial Statements, or (iii)
if
not continued in the future, might materially adversely effect the assets,
business operations or prospects of the Company or which might subject the
Company to suit or penalty in a private or governmental litigation or
proceeding.
3.30Completeness
of Disclosure.
No
statement of material fact by Seller or the Company contained in this Agreement
and no written statement of material fact furnished or to be furnished by Seller
or the Company to Buyer pursuant to or in connection with this Agreement
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary in order to make the statements
herein or therein contained not misleading.
Disclosure
of any fact in any provision of this Agreement or in any Schedule to which
reference is made herein shall constitute disclosure thereof for the purposes
of
all other provisions and Schedules.
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES OF BUYER
Buyer
represents and warrants to the Companies and Seller as follows:
4.1Organization;
Standing and Power.
Buyer
is a corporation duly organized, validly existing and in good standing under
laws of the State of Delaware and is duly qualified to do business and is in
good standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification necessary,
other
than in such jurisdictions where the failure to be so qualified to do business
or in good standing (individually or in the aggregate) would not have, or would
not reasonably be likely to have, a Material Adverse Effect on Buyer. Buyer
has
all requisite corporate power and authority to own, lease and operate its
properties and assets and to carry on its business as now being
conducted.
4.2Authorization;
Enforceability.
Buyer
has the corporate power and authority to execute and deliver this Agreement
and
to consummate the transactions contemplated by this Agreement. The execution
and
delivery of this Agreement and the consummation of the transactions contemplated
by this Agreement have been duly and validly authorized by all requisite
corporate action on the part of the Buyer. This Agreement has been duly and
validly executed and delivered by the Seller, and constitutes a valid and
binding agreement of the Buyer.
21
4.3Absence
of Conflicting Agreements.
Neither
the execution, delivery, or performance of this Agreement by Buyer, nor the
consummation of the transactions contemplated hereby does or will, after the
giving of notice, or the lapse of time or both, or otherwise:
(a) subject
to receipt of any necessary third party consents, conflict with, result in
a
breach of, constitute a default, or give rise to a right of termination under
the Buyer Charter Documents, any federal, state, or local law, statute,
ordinance, rule, or regulation applicable to Buyer, or any court or
administrative order or process, or any contract, agreement, arrangement,
commitment, or plan to which Buyer is a party or by Buyer is bound;
(b) result
in
the creation of any Lien upon the assets, business, and properties of
Buyer;
(c) subject
to receipt of any necessary third party consents, terminate, amend, or modify,
or give any party the right to terminate, amend, modify, abandon, or refuse
to
perform any contract, agreement, arrangement, commitment, or plan to which
Buyer
is a party or by which it is bound;
(d) accelerate
or modify, or give any party the right to accelerate or modify, the time within
which, or the terms under which, any duties or obligations are to be performed,
or any rights or benefits are to be received, under any contract, agreement,
arrangement, commitment, or plan to which Buyer is a party or by which it is
bound; or
(e) to
the
Knowledge of Buyer, require the consent, waiver, approval, permit, license,
clearance or authorization of, or any declaration or filing with, any court
or
public agency or other authority.
4.4Absence
of Material Adverse Effect.
Since
the Buyer Balance Sheet Date, there has been no Material Adverse Effect on
the
business, assets, operations or condition, financial or otherwise, of
Buyer.
4.4No
Default.
Buyer
is not in default, breach or violation (and no event has occurred which, with
notice or the lapse of time or both, would constitute a default or violation)
of
any term, condition or provision of (i) the Buyer Charter Documents; (ii) any
note, bond, mortgage, indenture, license, agreement or other instrument or
obligation to which Buyer is now a party or by which Buyer or any of its
properties, business or assets is bound; or (iii) any order, writ, injunction,
decree, statute, rule or regulation applicable to Buyer, except in the case
of
clauses (ii) and (iii) for defaults or violations which in the aggregate would
not have a Material Adverse Effect on Buyer.
4.5No
Undisclosed Liabilities.
Buyer
has no debt, liability or obligation of any kind, whether accrued, absolute,
contingent, inchoate, determined, determinable or otherwise (and there is no
basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand against Buyer giving rise
to
any such debt, liability or obligation), except for (i) liabilities or
obligations which, individually or in the aggregate would not have a Material
Adverse Effect on Buyer; (ii) liabilities or obligations under this Agreement
or
incurred in connection with the transactions contemplated hereby; or (iii)
liabilities or obligations disclosed or provided for in the Buyer Balance
Sheet.
22
4.6No
Litigation.
There
is no suit, action, proceeding or investigation presently pending or, to the
Knowledge of Buyer, threatened against or affecting Buyer or any of its
subsidiaries that has had or could reasonably be expected to have a Material
Adverse Effect on Buyer or prevent, hinder or materially delay the ability
of
Buyer to consummate the transactions contemplated by this Agreement, nor is
there any judgment, decree, injunction, rule or order of any governmental
authority or arbitrator outstanding against Buyer or any of its subsidiaries
which has had, or which, insofar as reasonably can be foreseen, in the future
could have, any such effect.
4.7Financing.
Buyer
has or will have at closing sufficient funds available to perform all of its
other obligations under this Agreement.
4.8Completeness
of Disclosure.
No
statement of material fact by Buyer contained in this Agreement and no written
statement of material fact furnished or to be furnished by Buyer to Seller
pursuant to or in connection with this Agreement contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact necessary in order to make the statements herein or therein contained
not
misleading.
4.9Capital
Structure.
(a) As
of the
date hereof, the authorized capital stock of the Buyer consists of 50,000,000
shares of common stock, .001 par value. As of the Closing, 1,053,295 shares
of
common stock were issued and outstanding. Schedule
4.9
is the
shareholder list of Buyer at the time of Closing. No shares of common stock
were
held by the Buyer in its treasury. The Buyer has no outstanding stock options,
stock appreciation rights, phantom units, profit participation or similar rights
with respect to the Buyer. No shares of capital stock or other equity or voting
securities of the Buyer are reserved for issuance or are outstanding. All of
the
issued and outstanding shares of capital stock of the Buyer are duly authorized,
validly issued, fully paid and non-assessable and have not been issued in
violation of any preemptive rights or in violation of state or federal
securities laws, and there are no preemptive rights with respect thereto. No
capital stock has been issued by the Buyer since the Buyer Balance Sheet Date.
Except as set forth above, as of the date hereof there are no outstanding or
authorized securities, options, warrants, calls, rights, commitments, preemptive
rights, agreements, arrangements, or undertakings of any kind to which the
Buyer
is a party, or by which it is bound, obligating the Buyer to issue, deliver
or
sell, or cause to be issued, delivered or sold, any shares of capital stock
or
other equity or voting securities of, or other ownership interests in, the
Buyer
or obligating the Buyer to issue, grant, extend, or enter into any such
security, option, warrant, call, right, commitment, agreement, arrangement,
or
undertaking. There are not as of the date of this Agreement and there will
not
be at the Closing Date any shareholder agreements, voting trusts or other
agreements or understandings to which the Buyer is a party or by which it is
bound relating to the voting of any shares of the capital stock of the Buyer.
23
(b) The
shares of capital stock of the Buyer constitute all of the issued and
outstanding shares of capital stock or other ownership interests of the Buyer.
Except for the purchase and sale of the Buyer Common Stock pursuant to this
Agreement, there are no outstanding claims, options, or other rights of any
Person to purchase from Buyer, and no contracts or commitments providing for
the
granting of rights to acquire, any of the Buyer Common Stock. There are no
claims pending or, to the Knowledge of Buyer, threatened, against the Buyer
that
concern or affect title to the Buyer Common Stock, or that seek to compel the
issuance of capital stock or other securities of the Buyer.
(c) There
are
no outstanding obligations in connection with the redemption by the Buyer of
any
of the previously issued and outstanding shares of capital stock of the
Buyer.
4.10. Environmental
Matters. Based
upon claims asserted or notices transmitted by Governmental Authorities or
other
third parties:
(a) The
Buyer
has conducted its business and operated its assets, and is conducting its
business and operating its assets, in material compliance with all Environmental
Laws;
(b) The
Buyer
has not been notified by any Governmental Authority or other third party that
any of the operations or assets of the Buyer is the subject of any investigation
or inquiry by any Governmental Authority or other third party evaluating whether
any material remedial action is needed to respond to a release or threatened
release of any Hazardous Material or to the improper storage or disposal
(including storage or disposal at offsite locations) of any Hazardous
Material;
(c) Neither
the Buyer nor, to the Company's Knowledge, any Governmental Authority or other
third person has filed any notice under any federal, state or local law
indicating that (i) the Buyer is responsible for the improper release into
the
environment, or the improper storage or disposal, of any Hazardous Material,
or
(ii) any Hazardous Material is improperly stored or disposed of upon any
property of the Buyer or any property formerly owned, leased or operated by
the
Buyer;
(d) The
Buyer
has no knowledge of any material contingent liability in connection with (i)
the
release or threatened release into the environment at, beneath, or on any
property now or previously owned, leased or operated by the Buyer, or (ii)
the
storage or disposal of any Hazardous Material;
(e) The
Buyer
has not received any claim, complaint, notice, inquiry or request for
information from any Governmental Authority or other third person involving
any
matter which remains unresolved as of the date hereof with respect to any
alleged material violation of any Environmental Law or regarding potential
liability under any Environmental Law relating to or in connection with
operations or conditions of any facilities or property (including off-site
storage or disposal of any Hazardous Material from such facilities or property)
currently or formerly owned, leased or operated by the Buyer;
24
(f) All
underground storage tanks and solid waste storage, treatment and/or disposal
facilities owned or operated by the Buyer are used and operated in material
compliance with Environmental Laws;
(g) The
Buyer
has obtained all material permits, licenses, approvals, and other authorizations
that are required with respect to the operation of the Company's properties
and
assets under the Environmental Laws, and the Buyer is in material compliance
with all terms and conditions of such required permits, licenses, approvals,
and
authorizations;
(h) To
the
Knowledge of the Buyer, there are no polychlorinated biphenyls or asbestos
located in, at, on, or under any facility or real property owned, leased or
operated by the Company that require removal, decontamination or abatement
pursuant to Environmental Laws;
(i) There
are
no past or present events, conditions, circumstances, activities, practices,
incidents or actions that could reasonably be expected to interfere with or
prevent material compliance by the Buyer with any Environmental Law, or that
could reasonably be expected to give rise to any material liability under the
Environmental Laws;
(j) No
Lien
has been recorded against any property, facility or assets currently owned
by
the Buyer under any Environmental Law; and
(k) The
execution, delivery and performance of this Agreement and the consummation
of
the
transactions contemplated hereby will not affect the validity or require the
transfer of any permits, licenses or approvals held by the Buyer under any
Environmental Law, and will not require any notification, disclosure,
registration, reporting, filing, investigation or remediation under any
Environmental law.
4.11.
SEC
Filings. The Buyer warrants that it is a non-reporting public company, in that
it has never been required to file disclosure documents with the United States
Securities and Exchange Commission (“SEC”). To the extent that Buyer has filed
any documents with the SEC, such documents are listed on Schedule
4.11
and have
been provided to Seller and the Company prior to Closing.
4.12.
Pink
Sheets. Buyer warrants that it is listed and trading on the Pink Sheets under
the ticker SAGR as of the Closing Date. For purposes of being listed on the
Pink
Sheets, the Buyer’s market maker is Knight Securities and Lampost
Capital.
4.13.
Taxes.
The
Buyer has timely filed (taking into account any extensions) all Tax Returns
required to be filed by it on or before the date of this Agreement and has
timely paid or deposited all Taxes and estimated Taxes which are required to
be
paid or deposited on or before such date. Each of the Tax Returns filed by
the
Buyer is accurate and complete in all material respects and has been completed
in all material respects in accordance with applicable laws, regulations and
rules. The Buyer Balance Sheet reflects an adequate reserve for all Taxes for
which the Buyer may be liable for all taxable periods and portions thereof
through the date thereof. The Buyer has not waived any statute of limitations
with respect to any Taxes of the Buyer. No material deficiencies for any Taxes
have been proposed, asserted or assessed against the Buyer, no requests for
waivers of the time to assess any such Taxes have been granted or are pending,
and there are no Tax Liens upon any assets of the Buyer (except for liens for
ad
valorem Taxes not yet delinquent and other Taxes not yet due and payable).
There
are no current examinations of any Tax Return of the Buyer being conducted
by
any Governmental Authority and there are no settlements of any prior
examinations which could reasonably be expected to adversely affect any taxable
period for which the statute of limitations has not run. The Buyer is not a
party to a Tax allocation agreement, Tax sharing agreement, Tax indemnity
agreement, Tax partnership agreement or similar agreement or arrangement. The
Buyer has complied in all material respects with all applicable laws, rules
and
regulations relating to the payment and withholding of Taxes and has in all
respects timely withheld from employee wages and paid over such taxes to the
appropriate Governmental Authority.
25
ARTICLE
5
COVENANTS
RELATING TO CONDUCT OF BUSINESS
AND
ADDITIONAL AGREEMENTS
5.1Conduct
of Business of each Company.
(a)Ordinary
Course. During
the period from the date of this Agreement to the Closing Date (except as
otherwise specifically contemplated by the terms of this Agreement), each
Company shall, and Seller shall cause each Company to, carry on its businesses
in the usual, regular, and ordinary course in substantially the same manner
as
conducted at the date hereof, and, to the extent consistent therewith, use
all
reasonable efforts to preserve intact its current business organization, keep
available the services of its current officers and employees and preserve its
relationships with Blue Fire Ethanol Inc., customers, suppliers, licensors,
licensees, distributors, and others having business dealings with the Company,
in each case consistent with past practice, to the end that their goodwill
and
ongoing businesses shall be unimpaired to the fullest extent possible at the
Closing Date. Without limiting the generality of the foregoing, and except
as
otherwise expressly contemplated by this Agreement, prior to the Closing Date
the Companies will not, and Seller will not, without the prior written consent
of Buyer, permit or allow the Companies to:
(i) (A)
declare, set aside, or pay any dividends on, or make any other distributions
(other than distributions to the Seller for amounts not exceeding their
respective income tax liabilities) in respect of, any of its capital stock,
(B)
split, combine, or reclassify any of its capital stock or issue or authorize
the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock or (C) purchase, redeem, or otherwise acquire
any shares of capital stock of each Company or any other securities thereof
or
any rights, warrants or options to acquire any such shares or other
securities;
(ii) issue,
deliver, sell, pledge, dispose of, or otherwise encumber any of its capital
stock or any securities convertible into, or any rights, warrants or options
to
acquire, any such capital stock;
(iii) amend
the
Company Charter Document;
(iv) acquire
or agree to acquire (A) by merging or consolidating with, or by purchasing
a
substantial portion of the stock, or other ownership interests in, or assets
of,
or by any other manner, any business or any corporation, partnership,
association, joint venture, limited liability company, or other entity or
division thereof, or (B) any assets that would be material, individually or
in
the aggregate, to each Company, except purchases of supplies and inventory
in
the ordinary course of business consistent with past practice;
26
(v) sell,
lease, mortgage, pledge, grant a Lien on, or otherwise encumber or dispose
of
any of its properties or assets, except (A) in the ordinary course of business
consistent with past practice or (B) other transactions involving not in excess
of $20,000.00 in the aggregate;
(vi) (A)
incur
any indebtedness for borrowed money or guarantee any such indebtedness of
another person, issue or sell any debt securities or warrants or other rights
to
acquire any debt securities of each Company, guarantee any debt securities
of
another person, enter into any "keep well" or other agreement to maintain any
financial statement condition of another person or enter into any arrangement
having the economic effect of any of the foregoing, except for (1) working
capital borrowings under revolving credit facilities incurred in the ordinary
course of business, and (2) indebtedness incurred to refund, refinance, or
replace indebtedness for borrowed money outstanding on the date hereof, or
(B)
make any loans, advances or capital contributions to, or investments in, any
other person, other than employees of each Company in the ordinary course of
business consistent with past practice;
(vii) make
or
incur capital expenditures in the aggregate in excess of $20,000;
(viii)
make
any
material election relating to Taxes or settle or compromise any material Tax
liability;
(ix) pay,
discharge, or satisfy any claims, liabilities, or obligations (accrued, asserted
or unasserted, contingent, or otherwise), other than the payment, discharge,
or
satisfaction, in the ordinary course of business consistent with past practice
or in accordance with their terms of liabilities reflected or reserved against
in, or contemplated by, each Company Balance Sheet;
(x) waive
the
benefits of, or agree to modify in any manner, any confidentiality, standstill
or similar agreement to which each Company is a party;
(xi) adopt
a
plan of complete or partial liquidation or resolutions providing for or
authorizing such a liquidation or a dissolution, merger, consolidation,
restructuring, recapitalization, or reorganization;
27
(xii) change
any accounting principle used by it;
(xiii) settle
or
compromise any litigation (whether or not commenced prior to the date of this
Agreement) other than settlements or compromises of litigation where the amount
paid in settlement or compromise does not exceed $10,000.00;
(xiv) (A)
enter into any
new, or amend any existing, severance agreement or arrangement, deferred
compensation arrangement or employment agreement with any officer, director,
or
employee, except that, each Company may hire additional employees to the extent
deemed by its management to be in the best interests of the relevant Company;
provided,
that
the
Company may not enter into any employment or severance agreement or any deferred
compensation arrangement with any such additional employees; (B) adopt any
new
incentive, retirement or welfare benefit arrangements, plans or programs for
the
benefit of current, former or retired employees or amend any existing Company
benefit plan (other than amendments required by law); (C) grant any increases
in
employee compensation, other than in the ordinary course or pursuant to
promotions, in each case consistent with past practice (which shall include
normal individual periodic performance reviews and related compensation and
benefit increases and bonus payments consistent with past practices); or (D)
grant any stock options or stock awards; or
(xv) authorize
any of, or commit or agree to take any of, the foregoing actions.
(b)Other
Actions. During
the period from the date of this Agreement to the Closing Date, neither the
Companies nor the Seller shall take any action that would, or that could
reasonably
be expected to, result in any of the representations and warranties of the
Companies and Seller set forth in this Agreement becoming untrue in any material
respect.
5.2Access
to Information.
(a) Subject
to the terms of the Confidentiality Agreement and Section 5.2(b), during the
period from the date hereof to the Closing Date:
(i) The
Companies and Seller shall, and shall cause each of their respective officers,
employees, counsel, financial advisors and other representatives to, afford
to
Buyer, and to Buyer's accountants, counsel, financial advisors and other
representatives, reasonable access to each Company's properties, books,
contracts, commitments and records for the purpose of conducting such
inspections, evaluations and assessments, as Buyer deems appropriate, and,
during such period, each Company and Seller shall, and shall cause each of
their
respective officers, employees, counsel, financial advisors and other
representatives to, furnish promptly to Buyer, all other information concerning
its business, properties, financial condition, operations and personnel as
Buyer
may from time to time reasonably request so as to afford Buyer a reasonable
opportunity to make at its sole cost and expense such review, examination and
investigation of the relevant Company as Buyer may reasonably desire to make.
The Company and Seller agree to advise Buyer of all material developments with
respect to the Company and its assets and liabilities.
28
(ii) The
Companies and Seller shall notify Buyer promptly of any notices from or
investigations by governmental authority relating to the relevant Company's
business or assets or the consummation of the Purchase. Buyer shall notify
the
Companies and Seller promptly of any notices from or investigations by
governmental authority that could materially affect Buyer's consummation of
the
Purchase.
(b) Except
as
required by law, each of the Companies, Seller, and Buyer shall, and shall
cause
their respective directors, officers, employees, accountants, counsel, financial
advisors, and representatives and affiliates to: (i) hold in confidence, unless
compelled to disclose by judicial or administrative process, or, in the opinion
of its counsel, by other requirements of law, all nonpublic information
concerning the other party furnished in connection with the transactions
contemplated by this Agreement until such time as such information becomes
publicly available (otherwise than through the wrongful act of such Person),
(ii) not release or disclose such information to any other Person, except in
connection with this Agreement to its auditors, attorneys, financial advisors,
other consultants and advisors, and (iii) not use such information for any
competitive or other purpose other than with respect to its consideration and
evaluation of the transactions contemplated by this Agreement. Any investigation
by any party of the assets and business of the other party and its subsidiaries
shall not affect any representations and warranties hereunder, any conditions
to
the obligations of either party or either party's right to terminate this
Agreement as provided in Article 7.
(c) In
the
event of the termination of this Agreement, each party promptly will deliver
to
the other party (and destroy all electronic data reflecting the same) all
documents, work papers and other material (and any reproductions or extracts
thereof and any notes or summaries thereto) obtained by such party or on its
behalf from such other party or its subsidiaries as a result of this Agreement
or in connection therewith so obtained before or after the execution
hereof.
5.3Reasonable
Efforts; Notification.
(a)Reasonable
Efforts. Upon
the
terms and subject to the conditions set forth in this Agreement, except to
the
extent otherwise provided in this Section 5.3, each of the parties agrees to
use
commercially reasonable efforts to take, or cause to be taken, all actions,
and
to do, or cause to be done, and to assist and cooperate with the other parties
in doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Purchase, and the
other transactions contemplated by this Agreement, including (i) the obtaining
of all necessary actions or non-actions, waivers, consents and approvals from
governmental authority and the making of all necessary registrations and filings
(including filings with Blue Fire Ethanol, Inc.) and the taking of all
reasonable steps as may be necessary to obtain an approval or waiver from,
or to
avoid an action or proceeding by, any governmental authority, (ii) the obtaining
of all necessary consents, approvals or waivers from third parties, (iii) the
defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the
transactions contemplated hereby, including seeking to have any stay or
temporary restraining order entered by any court or other governmental authority
vacated or reversed, and (iv) the execution and delivery of any additional
instruments necessary to consummate the transactions contemplated by this
Agreement; provided,
however, that
neither the Companies nor Buyer shall be under any obligation to take any action
to the extent that the Board of Directors of such party shall conclude in good
faith, after consultation with and based upon the written advice of their
respective outside legal counsel (which advice in each case need not constitute
an opinion), that such action would cause a breach of that Board of Directors'
fiduciary obligations under applicable law.
29
(b)Notification.
The
Companies and Seller shall give prompt notice to Buyer, and Buyer shall give
prompt notice to the Company, when (i) any representation or warranty made
by
either under the terms of this Agreement becomes untrue or inaccurate in any
material respect or (ii) Seller, Companies or Buyer, as the case may be, fails
to comply with or satisfy in any material respect any covenant, condition,
or
agreement to be complied with or satisfied by it under this Agreement;
provided,
however, that
no
such notification shall affect the representations or warranties or covenants
or
agreements of the parties or the conditions to the obligations of the parties
hereunder.
5.4Fees
and Expenses.
Except
as provided in Section 8.2, all fees and expenses incurred in connection with
the Purchase, this Agreement and the transactions contemplated hereby shall
be
paid by the party incurring such fees or expenses, whether or not the Purchase
is consummated.
5.5Public
Announcements.
The
Company and Seller, on the one hand, and Buyer, on the other hand, will consult
with each other before issuing any press release or otherwise making any public
statements with respect to the transactions contemplated by this Agreement
and
shall not issue any such press release or make any such public statement prior
to such consultation, except that each party may respond to questions from
shareholders or holders of ownership interests in either the Companies or the
Buyer.
5.6Agreement
to Defend.
In the
event any claim, action, suit, investigation, or other proceeding by any
governmental authority or other person or
other
legal administrative proceeding is commenced that questions the validity or
legality of the transactions contemplated hereby or seeks damages in connection
therewith, the parties hereto agree to cooperate and use their reasonable
efforts to defend against and respond thereto.
30
ARTICLE
6
CONDITIONS
PRECEDENT
6.1Conditions
to Each Party's Obligation to Effect the Purchase.
The
respective obligations of each party to effect the Purchase are subject to
the
satisfaction of the requirement that the parties shall have arranged for the
filing of all authorizations, consents, orders or approvals of, or declarations
or filings with, or terminations or expirations of waiting periods imposed
by,
any governmental authority necessary for the consummation of the transactions
contemplated by this Agreement.
6.2Conditions
to Obligations of Buyer.
The
obligations of Buyer to effect the Purchase are subject to the satisfaction
of
the following conditions, any or all of which may be waived in whole or in
part
by Buyer:
(a)Obligations.
TheCompanies
and Seller shall have performed in all material respects all obligations to
be
performed by them under this Agreement at or prior to the Closing
Date.
(b)Representations
and Warranties. All
of
the representations and warranties of each Company and Seller contained in
this
Agreement (considered collectively) and each of the representations and
warranties of each Company and Seller contained in this Agreement (considered
individually) shall be true and correct in all material respects (disregarding
for these purposes any exceptions or supplemental disclosures contained in
the
certificates delivered to Buyer pursuant to Section 2.5(a) and disregarding
any
materiality qualifications contained therein) as of the date of this Agreement
and as of the Closing Date as if made on and as of such date; provided,
that
such
representations and warranties that are by their express provisions made as
of a
specific date need be true and correct only as of such specific
date.
(c)Third
Party Consents. All
required authorizations, consents or approvals of any third party, including
BlueFire Ethanol Inc. approval, the failure of which to obtain would have a
Material Adverse Effect on Buyer, assuming the Purchase had taken place, shall
have been obtained.
(d)Material
Adverse Change. There
shall not have occurred a Material Adverse Change to the Companies or
Seller.
(e)Absence
of Proceedings.
No
claim, suit, action, or other proceeding shall be pending or threatened before
or by any court, governmental authority, arbitrator or other Person against
any
of the parties to this Agreement (i) with respect to the transactions
contemplated by this Agreement with the object of challenging or preventing
the
Closing, and no other proceedings shall be pending with such object or to
collect damages from Buyer on account thereof, (ii) which would materially
and
adversely affect the Company Shares or the assets, property, operations, result
of operations, financial condition, or prospects of the Company, and (iii)
there
shall not have been made or threatened by any Person any claim asserting that
such Person (a) is the holder or the beneficial owner of, or has the right
to
acquire or to obtain beneficial ownership of, any stock of, or any other voting,
equity or ownership interest in, the Company, or (b) is entitled to all or
any
portion of the Purchase Consideration payable for the Company Shares. Without
limiting the generality of the foregoing, no suit, action or other proceeding
shall be pending before any court or governmental authority in which it is
sought to restrain or prohibit, or obtain damages or other relief in connection
with, this Agreement or the consummation of the transactions contemplated
hereby.
31
(f)Deliveries
at Closing.
Seller
shall have delivered, or caused to be delivered, to Buyer, the documents,
properly executed and dated as of the Closing Date, required by Section
2.5(a).
(g)Additional
Documents. Buyer
shall have been furnished with such certificates, documents and opinions as
they
may reasonably request.
6.3Condition
to Obligations of the Company and Seller.
The
obligations of the Seller to effect the Purchase is subject to satisfaction
of
the following conditions, any or all of which may be waived in whole or in
part
by the Seller:
(a)Obligations.
Buyer
shall have performed in all material respects all obligations to be performed
by
it under this Agreement at or prior to the Closing Date.
(b)Representations
and Warranties. All
of
the representations and warranties of Buyer contained in this Agreement
(considered collectively) and each of the representations and warranties of
Buyer contained in this Agreement (considered individually) shall be true and
correct in all material respects (disregarding for these purposes any
materiality qualifications contained therein) as of the date of this Agreement
and as of the Closing Date as if made on and as of such date; provided,
that
such
representations and warranties that are by their express provisions made as
of a
specific date need be true and correct only as of such specific
date.
(c)Material
Adverse Change. There
shall not have occurred a Material Adverse Change to Buyer.
(d)Absence
of Proceedings.
No
claim, suit, action or other proceeding shall be pending or threatened before
or
by any court, governmental authority, arbitrator or other Person against any
of
the parties to this Agreement with respect to the transactions contemplated
by
this Agreement with the object of challenging or preventing the Closing, and
no
other proceedings shall be pending with such object or to collect damages from
Seller on account thereof.
(e)Deliveries
at Closing.
Buyer
shall
have delivered, or caused to be delivered, to Seller, the documents, properly
executed and dated as of the Closing Date, required by Section
2.5(b).
(f) Seller
shall have been furnished with such certificates, documents and opinions as
it
may reasonably request.
32
ARTICLE
7
TERMINATION,
AMENDMENT AND WAIVER
7.1Termination.
This
Agreement may, by written notice given prior to the Closing, be terminated
at
any time:
(a) by
mutual
written consent of Seller and Buyer;
(b) without
liability on the part of any party hereto (unless occasioned by reason of
failure of one of the parties hereto to perform its obligations or a default
of
its representations and warranties hereunder), by either Buyer or Seller, if
the
transactions contemplated hereby are not consummated on or before the Closing
Date;
(c) by
Buyer,
if Seller or the Company materially breach or default in the performance of
any
of their representations, warranties, covenants, or obligations hereunder,
and
either (i) such breach or default in performance shall not have been cured
or
waived within thirty (30) days after written notice thereof from Buyer to
Seller; or (ii) Seller shall not have provided reasonable assurance satisfactory
to Buyer that such breach or default will be cured on or before the Closing
Date;
(d) by
Seller, if Buyer shall materially breach or default in performance of any of
its
representations, warranties, covenants, or obligations hereunder, and either
(i)
such breach or default in performance shall not have been cured or waived within
thirty (30) days after notice thereof from Seller to Buyer; or (ii) Buyer shall
not have provided reasonable assurance satisfactory to Seller that such breach
or default will be cured on or before the Closing Date;
(e) by
Buyer,
if any of the conditions set forth in Section 6.1 or Section 6.2 shall not
have
been fulfilled by the Closing Date in any material respect or if satisfaction
of
such condition is or becomes impossible (unless the failure to fulfill such
conditions results primarily from Buyer’s breach of any representation or
warranty or failing to perform any covenant or agreement contained in this
Agreement) and Buyer has not waived such condition on or prior to the Closing;
(f) by
Seller, if any of the conditions set forth in Section 6.1 or Section
6.3shall
not
have been fulfilled by the Closing Date in any material respect or if
satisfaction of such condition is or becomes impossible (unless the failure
to
fulfill such conditions results primarily from the breach by the Company or
Seller themselves of any representation or warranty or failing to perform any
covenant or agreement contained in this Agreement) and Seller have not waived
such condition on or prior to the Closing.
7.2Procedure
for Termination, Amendment, Extension or Waiver.
A
termination of this Agreement pursuant to Section 7.1, an amendment of this
Agreement pursuant to Section 7.4 or an extension or waiver pursuant to Section
7.5 shall, in order to be effective, require action by its governing body,
or
the duly authorized designee of that governing body, of Seller, Buyer and the
Company.
33
7.3Effect
of Termination.
In the
event of termination of this Agreement by either Seller or Buyer as provided
in
Section 7.1, this Agreement shall forthwith become void and have no effect,
without any further liability or obligation on the part of Seller, the Company
or Buyer, or any director, officer, employee, or shareholder thereof, other
than
the provisions of Article 11; provided,
however,
that any such termination shall not limit or relieve a party's liability or
obligation for damages suffered by the other party hereto as a result of such
party's breach of any representation, warranty or covenant in this Agreement.
7.4Amendment.
This
Agreement may not be amended except by an instrument in writing signed by or
on
behalf of each of the parties.
7.5Extension;
Waiver.
At any
time on or prior to the Closing Date, the parties may (a) extend the time for
the performance of any of the obligations or the other acts of the other
parties, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto, or (c) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed by or on behalf of such
party. No waiver of any of the provisions of this Agreement shall be deemed
or
shall constitute a waiver of any other provision or breach of this Agreement,
whether or not similar, unless otherwise expressly provided. The failure of
any
party to this Agreement to assert any of his or its rights under this Agreement
or otherwise shall not constitute a waiver of such rights.
ARTICLE
8
NO
NEGOTIATION
Provided
that Buyer is not in default hereunder, from the date of this Agreement until
the earlier date of the Closing or the termination of this Agreement pursuant
to
Section 7.1, Seller will not, and will cause the Company and its officers,
directors, employees, agents, Affiliates and other representatives not to,
directly or indirectly, solicit, initiate, or encourage any inquiries or
proposals from, discuss or negotiate with, provide any non-public information
to, or consider the merits of any unsolicited inquiries or proposals from,
any
Person (other than Buyer) relating to any transaction involving the sale of
the
business or all or substantially all of the assets of the Company, or any of
the
capital stock of the Company, or any merger, consolidation, business
combination, or similar transaction involving the Company.
ARTICLE
9
INDEMNIFICATION
9.1Indemnification
of Buyer.
Seller
agrees, jointly and severally, to defend, indemnify, and hold harmless Buyer,
and their respective successors and assigns (individually a "Buyer
Indemnitee,"
and
collectively the "Buyer
Indemnitees")
from,
against, and in respect of the following:
34
(a) any
and
all losses, damages, deficiencies or liabilities caused by, resulting or arising
from, or otherwise relating to: (i) any breach of the representations and
warranties of Seller or the Companies contained in this Agreement or in any
instrument, certificate or affidavit delivered by or on behalf of Seller or
the
Companies at the Closing in accordance with this Agreement; or (ii) any failure
by either Seller or the Companies to perform or otherwise fulfill or comply
with
(X) if this Agreement shall have been terminated, any covenant, undertaking,
agreement or obligation to be performed, fulfilled or complied with by Seller
or
the Companies prior to or
in
connection with the Closing or (Y) if the Closing shall occur, any covenant,
undertaking or other agreement or obligation of Seller under this Agreement
to
be performed, fulfilled or otherwise complied with by Seller after the Closing.
Without limiting the foregoing in any manner, Seller shall indemnify Buyer
from
any and all claims made by the previous shareholders or investors in the Company
or any predecessor company of which the Seller was in control of day to day
operations; and
(b) subject
to the provision of Article 10, any
Taxes
(i) imposed on the Company, with respect to any taxable period, or portion
thereof, ending on or before the Closing Date, or, (ii) imposed with
respect to the ownership, use or operation of, including income and revenues
from, the Company Shares and the Company’s assets on or before the date of this
Agreement.
(c) any
Labor
Claims asserted against the Company, with respect to periods prior to the
Closing Date.
(d) any
and
all actions, suits, proceedings, claims, liabilities, demands, assessments,
judgments, interest, penalties, costs and expenses, including reasonable
attorneys' fees, incurred by the Buyer Indemnities in connection with
investigating, defending, settling or prosecuting any action, suit, proceeding
or claim against Buyer hereunder, incident to any of the items referred to
in
this Section 9.1; provided,
that,
if any action, suit, proceeding, claim, liability, demand or assessment shall
be
asserted against any Buyer Indemnitee in respect of which such Buyer Indemnitee
proposes to demand indemnification, such Buyer Indemnitee shall notify Seller
thereof within a reasonable period of time after assertion thereof, and such
notice shall include copies of all suit, service and claim documents and all
other relevant documents in the possession of the Buyer Indemnities and an
explanation of the Buyer Indemnities contentions and defenses with as much
specificity and particularity as the circumstances permit; provided,
further,
that
the failure of the Buyer Indemnities to give such notice or provide such
documentation shall not relieve Seller of their obligations under this Section
9.1, if Seller shall not have been prejudiced thereby (and then solely to the
extent thereof). Subject to rights of or duties to any insurer or other third
Person having liability therefore, Seller shall have the right within ten (10)
days after receipt of such notice to assume in writing the control of the
defense, compromise or settlement of any such action, suit, proceeding, claim,
liability, demand, or assessment, including, at their own expense, employment
of
counsel; provided
further,
however,
that,
if Seller shall have exercised their right to assume such control, the Buyer
Indemnities may, in its sole discretion and at its sole expense, employ counsel
to represent it (in addition to counsel employed by Seller) in any such matter,
and in such event counsel selected by Seller shall be required to cooperate
with
such counsel of the Buyer Indemnitee in such defense, compromise or settlement
for the purpose of informing and sharing information with such Buyer Indemnitee.
So long as Seller are defending in good faith any such claim or demand asserted
by a third Person against the Buyer Indemnitee, the Buyer Indemnitee shall
not
settle or compromise such claim or demand. If Seller has assumed the defense
of
any such claim or demand, then they shall not consent to the entry of judgment
or enter into any settlement without the prior written consent of the Buyer
Indemnitee, which consent shall not be unreasonably withheld. The Buyer
Indemnitee shall make available to Seller or their agents all records and other
materials in the Buyer Indemnitee's possession reasonably required by them
for
their use in contesting any third party claim or demand.
35
9.2Indemnification
of Seller.
Buyer
agrees to defend, indemnify and hold harmless Seller and the Company, and their
respective successors and assigns (individually a "Seller
Indemnitee,"
and
collectively the "Seller
Indemnitees")
from,
against and in respect of
the
following:
(a) any
and
all losses, damages, deficiencies or liabilities caused by, resulting or arising
from or otherwise relating to (i) any breach of the representations and
warranties of Buyer contained in this Agreement or in any instrument,
certificate or affidavit delivered by or on behalf of Buyer at the Closing
in
accordance with this Agreement; (ii) any failure by Buyer to perform or
otherwise fulfill or comply with: (X) if this Agreement shall have been
terminated, Section 5.3 or any other covenant, undertaking, agreement or
obligation to be performed, fulfilled or complied with by Buyer prior to or
in
connection with the Closing; or (Y) if the Closing shall occur, any covenant,
undertaking or other agreement or obligation hereunder to be performed,
fulfilled or otherwise complied with by Buyer after the Closing or (iii) any
obligation or liability with respect to the operation of the Company by Buyer
after the Closing;
(b) any
and
all actions, suits, proceedings, claims, liabilities, demands, assessments,
judgments, interest, penalties, costs and expenses, including reasonable
attorneys' fees, incurred by the Seller Indemnities in connection with
investigating, defending, settling or prosecuting any action, suit, proceeding
or claim against any Seller Indemnitee hereunder, incident to any of the items
referred to in Section 9.2(a); provided,
that,
if any action, suit, proceeding, claim, liability, demand or assessment shall
be
asserted against any Seller Indemnitee in respect of which such Seller
Indemnitee proposes to demand indemnification, such Seller Indemnitee shall
notify Buyer thereof within a reasonable period of time after assertion thereof,
and such notice shall include copies of all suit, service and claim documents,
all other relevant documents in the possession of the Seller Indemnitee and
an
explanation of the Seller Indemnitee's contentions and defenses with as much
specificity and particularity as the circumstances permit; provided,
further,
that
the failure of the Seller Indemnitee to give such notice or provide such
documentation shall not relieve Buyer of its obligations under this Section
9.2
if Buyer shall not have been prejudiced thereby (and then solely to the extent
thereof). Subject to rights of or duties to any insurer or other third Person
having liability therefore, Buyer shall have the right within ten (10) days
after receipt of such notice to assume the control of the defense, compromise
or
settlement of any such action, suit, proceeding, claim, liability, demand,
or
assessment, including, at its own expense, employment of counsel; provided,
that,
if Buyer shall have exercised its right to assume such control, the Seller
Indemnitee may, in its sole discretion and at its sole expense, employ counsel
to represent it (in addition to counsel employed by Buyer) in any such matter,
and in such event counsel selected by Buyer shall be required to cooperate
with
such counsel of the Seller Indemnitee in such defense, compromise or settlement
for the purpose of informing and sharing information with such Seller
Indemnitee. So long as Buyer is defending in good faith any such claims or
demands asserted by a third Person against the Seller Indemnitee, the Seller
Indemnitee shall not settle or compromise such claim or demand. If Buyer has
assumed the defense of any such claim or demand, then it shall not consent
to
the entry of judgment or enter into any settlement without the prior written
consent of the Seller Indemnitee (which consent shall not be unreasonably
withheld). The Seller Indemnitee shall make available to Buyer or its agents
all
records and other materials in the Seller Indemnitee's possession reasonably
required by it for its use in contesting any third party claim or
demand.
9.3Indemnification
of Seller and Buyer by TBeck Capital, Inc. (“TBeck”).
TBeck
agrees to defend, indemnify and hold harmless Seller, the Buyer, and their
respective successors and assigns (individually a "TBeck
Indemnitee,"
and
collectively the "TBeck
Indemnitees")
from,
against and in respect of
the
following:
36
(a) any
and
all losses, damages, deficiencies or liabilities caused by, related to or
arising from liabilities incurred by prior to Closing or breach of warranties
by
Buyer at Closing;
(b) any
and
all actions, suits, proceedings, claims, liabilities, demands, assessments,
judgments, interest, penalties, costs and expenses, including reasonable
attorneys' fees, incurred by the TBeck Indemnities in connection with
investigating, defending, settling or prosecuting any action, suit, proceeding
or claim against any TBeck Indemnitee hereunder, incident to any of the items
referred to in Section 9.3(a); provided,
that,
if any action, suit, proceeding, claim, liability, demand or assessment shall
be
asserted against any TBeck Indemnitee in respect of which such TBeck Indemnitee
proposes to demand indemnification, such TBeck Indemnitee shall notify Buyer
thereof within a reasonable period of time after assertion thereof, and such
notice shall include copies of all suit, service and claim documents, all other
relevant documents in the possession of the TBeck Indemnitee and an explanation
of the TBeck Indemnitee's contentions and defenses with as much specificity
and
particularity as the circumstances permit; provided,
further,
that
the failure of the TBeck Indemnitee to give such notice or provide such
documentation shall not relieve Buyer of its obligations under this Section
9.3
if Buyer shall not have been prejudiced thereby (and then solely to the extent
thereof). Subject to rights of or duties to any insurer or other third Person
having liability therefore, Buyer shall have the right within ten (10) days
after receipt of such notice to assume the control of the defense, compromise
or
settlement of any such action, suit, proceeding, claim, liability, demand,
or
assessment, including, at its own expense, employment of counsel; provided,
that,
if Buyer shall have exercised its right to assume such control, the TBeck
Indemnitee may, in its sole discretion and at its sole expense, employ counsel
to represent it (in addition to counsel employed by Buyer) in any such matter,
and in such event counsel selected by Buyer shall be required to cooperate
with
such counsel of the TBeck Indemnitee in such defense, compromise or settlement
for the purpose of informing and sharing information with such TBeck Indemnitee.
So long as Buyer is defending in good faith any such claims or demands asserted
by a third Person against the TBeck Indemnitee, the TBeck Indemnitee shall
not
settle or compromise such claim or demand. If Buyer has assumed the defense
of
any such claim or demand, then it shall not consent to the entry of judgment
or
enter into any settlement without the prior written consent of the TBeck
Indemnitee (which consent shall not be unreasonably withheld). The TBeck
Indemnitee shall make available to Buyer or its agents all records and other
materials in the TBeck Indemnitee's possession reasonably required by it for
its
use in contesting any third party claim or demand.
9.4Remedies;
Specific Performance.
(a) The
indemnification provisions of this Article 9 are in addition to, and not in
lieu
or in derogation of, any other rights or remedies any party may have at law
or
in equity for a breach of any representations, warranties or covenants contained
in this Agreement.
37
(b) Each
of
the parties to this Agreement acknowledges and agrees that Buyer would be
damaged irreparably if any of the covenants of Seller or the Company under
this
Agreement are not performed in accordance with their specific terms or otherwise
are breached. Accordingly, each of the parties hereto agrees that Buyer shall
be
entitled to an injunction or injunctions to prevent breaches of the covenants
set forth in this Agreement by Seller and to enforce specifically this Agreement
and the terms and provisions hereof in any competent court having jurisdiction
over the parties, in addition to any other remedy to which it may be entitled,
at law or in equity.
(c) Notwithstanding
any provision of this Agreement to the contrary, Buyer's and Seller' sole remedy
for any breach of any of the provisions of Article 3 or 4 shall be to exercise
their rights under this Article 9, which shall be subject to the procedures
and
limitations set forth in this Article 9, excluding however, any cause of action
for specific performance.
9.5Survival.
Notwithstanding any other provision to the contrary in this Agreement, this
Article 9 shall survive termination of this Agreement.
ARTICLE
10
TAX
MATTERS
The
following provisions shall govern the allocation of responsibility as between
Buyer, on the one hand, and Seller and the Company, on the other hand, for
certain Tax matters following the Closing Date:
10.1
Tax
Periods Ending on or Before the Closing Date.
The
Company shall prepare or cause to be prepared and file or cause to be filed
all
tax returns, reports and other informational statements and documentation for
the Company for all periods ending on or prior to the Closing Date, which are
required to be filed on, before or after the Closing Date. Seller shall permit
Buyer (with respect to Tax Returns filed after the date hereof and before the
Closing Date) or Buyer and the Company shall permit Seller (with respect to
Tax
Returns filed after the Closing Date) to review and comment on each such Tax
Return described in the preceding sentence prior to filing. The Company shall
pay or cause to be paid any Taxes owed by the Company for all periods ending
on
or before the Closing Date, whether or not such Taxes are shown as owed on
the
appropriate Tax Returns.
10.2
Tax
Periods Beginning Before and Ending After the Closing Date.
Buyer
shall prepare or cause to be prepared and file or cause to be filed any Tax
Returns of the Company for Tax periods which begin before the Closing Date
and
end after the Closing Date. Buyer shall permit Seller to review and comment
on
each such Tax Return.
38
10.3Cooperation
on Tax Matters.
(a) Buyer,
the Company, and Seller shall reasonably cooperate, as and to the extent
reasonably requested by the other party, in connection with the filing of Tax
Returns pursuant to this Article 10 and any audit, litigation or other
proceeding with respect to Taxes for which the other party shall have liability
therefore under this Agreement. Such cooperation shall include the retention
and
(upon the other party's request) the provision of records and information which
are reasonably relevant to any such audit, litigation or other proceeding and
making employees reasonably available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder.
The
Company shall retain all books and records with respect to Tax matters pertinent
to the Company relating to any Tax period beginning before the Closing Date
until the expiration of the statute of limitations (and, to the extent notified
by Buyer or Seller, any extensions thereof) of the respective Tax periods,
and
to abide by all record retention agreements entered into with any taxing
authority.
(b) Buyer,
the Company and Seller further agree, upon request, to use their commercially
reasonable efforts to obtain any certificate or other document from any
governmental authority or any other Person as may be necessary to mitigate,
reduce or eliminate any Tax that could be imposed (including with respect to
the
transactions contemplated hereby).
(c) Buyer,
the Company and Seller further agree, upon request, to provide the other party
with all information that either party may be required to report pursuant to
tax
laws of the United States or any other jurisdiction.
10.4Certain
Taxes.
All
transfer, documentary, sales, use, stamp, registration and other such Taxes
incurred in connection with this Agreement shall be paid by Seller when due,
and
Seller will, at their own expense, file all necessary Tax returns and other
documentation with respect
to all such transfer, documentary, sales, use, stamp, registration and other
Taxes and fees, and, if required by applicable law, Buyer will join in the
execution of any such Tax Returns and other documentation.
39
ARTICLE
11
GENERAL
PROVISIONS
11.1Survival
of Representations and Warranties.
All of
the representations and warranties of the parties hereto contained in this
Agreement shall survive the Closing and shall continue in full force and effect.
Any claims with respect to the foregoing sentence under Section 9.1 and Section
9.2 must be asserted in writing with reasonable particularity by the party
making such claims.
11.2Survival
of Covenants and Agreements.
The
respective covenants and agreements of the parties contained in this Agreement
shall survive the Closing. Any claims as to a breach of a covenant or agreement
under Article 9 or Article 10 must be asserted in writing with reasonable
particularity by the party making such claim.
11.3Interpretation.
When a
reference is made in this Agreement to a Section, Exhibit or Schedule, such
reference shall be to a Section of, or an Exhibit or Schedule to, this Agreement
unless otherwise indicated. The words "hereof', "herein" and "hereunder" and
similar terms refer to this Agreement as a whole and not to any particular
provision of this Agreement, unless the context otherwise requires. The table
of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include", "includes" or "including" are used
in
this Agreement, they shall be deemed to be followed by the words "without
limitation".
11.4Counterparts.
This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to
the
other parties.
11.5Entire
Agreement; No Third-Party Beneficiaries.
The
Confidentiality Agreement and this Agreement (including the Exhibits and
Schedules hereto and the documents and instruments referred to herein) (a)
constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and (b) are not intended to confer upon any Person other
than the parties any rights or remedies hereunder.
11.6Governing
Law.
This
Agreement shall be governed by, and construed in accordance with the laws of
the
State of Nevada.
11.7Assignment.
Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties without the prior written consent of the
other
parties, except that Buyer may assign its rights to purchase the Company Shares,
but not any of its obligations under this Agreement, to one of its Affiliates.
Subject to the preceding sentence, this Agreement will be binding upon, inure
to
the benefit of, and be enforceable by, the parties and their respective
successors and assigns.
11.8Submission
to Jurisdiction.
Each
party hereto hereby agrees that any suit, action or proceeding with respect
to
this Agreement may be brought in the courts of the State of Florida; and each
party hereto hereby irrevocably submits to the jurisdiction of such courts
and
all appellate courts thereof for the purpose of any such suit, action,
proceeding or judgment.
40
11.9WAIVER
OF JURY TRIAL.
EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
11.10
Performance
by Companies.
Seller
hereby agrees to cause the Companies to comply with its obligations under this
Agreement.
11.11
Severability.
If any
one or more of the provisions contained in this Agreement should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any
way
be affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions, the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
11.12
Notices.
All
notices, requests, demands, claims and other communications required or
permitted to be given hereunder shall be in writing and shall be given by (a)
personal delivery (effective upon delivery), (b) facsimile (effective on the
next day after transmission), or (c) recognized overnight delivery service
(effective on the next day after delivery to the service), in each case
addressed to the intended recipient as set forth below:
Any
party
may change his or its address for receiving notices by giving written notice
of
such change to the other parties in accordance with this Section
11.12.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed by their
duly authorized representatives as of the date first above written.
BUYER
SUCRE
AGRICULTURAL, INC.
By:
/s/ Lyle
Mortensen
Name:
Lyle Mortensen
Title:
President
42
SELLER
/s/
Arnold
Klann
Arnold
Klann
/s/
Arnold
Klann
Arnold
Klann, as trustee for RCR Trust 1
/s/
Necitas Camanga
Sumait
Necitas
Camanga Sumait
/s/
John
Earl
Cuzens
John
Earl Cuzens
/s/
Richard
Klann
Richard
Klann
/s/
Chris
Klann
Chris
Klann
/s/
[illegible
signature]
Life
Church, Inc.
/s/
Susan
Courtright
Cottonwood Christian Center, Inc.
/s/
Kent A.
Larsen
Kent
A. Larsen
/s/
Dorinda L.
Gullo
Dorinda
L. Gullo
/s/
David
C. Gullo
David
C. Gullo
43
/s/
Daniel J. Gullo
Daniel
J. Gullo
/s/
Deann
M.
Salcius
Deann
M. Salcius
/s/
Brenda S.
Russell
Brenda
S. Russell
/s/
Ronald J.
McLoud
Ronald
J. McLoud
/s/
Dorthea M.
Klann
Dorthea
M. Klann
/s/
Gregory M.
Klann
Gregory
M. Klann
/s/
Theodore M.
Klann
Theodore
M. Klann
/s/
Gaylen H.
Oderdirk
Gaylen
H. Oderdirk
/s/
Paul
Gallegos
Paul
Gallegos
COMPANY
BLUEFIRE
ETHANOL INC.
By:
/s/ Arnold
Klann
Name:
Arnold Klann
Title:
President
44
TBECK
CAPITAL, INC.
By:
/s/ Ron
Williams
Name:
Ron Williams
Title:
President
45
EXHIBIT
A
LIST
OF
SELLERS AND COMPANY’S OFFICERS AND DIRECTORS
Sellers:
Arnold
R.
Klann, as trustee for RCR Trust 1
Arnold
R.
Klann
Necitas
Camanga Sumait
John
Earl
Cuzens
Directors:
Arnold
R.
Klann
John
Earl
Cuzens
Necitas
Camangas Sumait
Robert
Moore
Officers:
President:
Arnold R. Klann
Secretary:
Necitas Camangas Sumait
Treasurer:
Robert Moore
46
EXHIBIT
B
LIST
OF
BUYER’S AND TBECK CAPITAL’S OFFICERS AND DIRECTORS
