exv10w17



 






Exhibit 10.17




 





STOCK PURCHASE AGREEMENT




Dated as of September 1, 2005




among




BUYER:




AMS MANUFACTURING, INC.




PARENT:




AMS HEALTH SCIENCES, INC.




COMPANY:




HEARTLAND CUP, INC.




PRINCIPAL SHAREHOLDER:




TRUETT McCARTY




AND




CERTAIN SHAREHOLDERS OF THE COMPANY




 





 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	ARTICLE I. DEFINITIONS
	 	 	1	 
	1.1 Defined Terms
	 	 	1	 
	1.2 Other Terms
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II. PURCHASE AND SALE OF SHARES
	 	 	1	 
	2.1 Agreement to Purchase and Sell Shares
	 	 	1	 
	2.2 Purchase Price for the Shares
	 	 	1	 
	2.3 Manner of Payment of the Purchase Price Consideration
	 	 	1	 
	2.4 Manner of Delivery of Shares
	 	 	2	 
	2.5 Restrictive Legend
	 	 	2	 
	 
	 	 	 	 
	ARTICLE III. CLOSING
	 	 	2	 
	3.1 Closing
	 	 	2	 
	3.2 Deliveries at Closing
	 	 	2	 
	 
	 	 	 	 
	ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE PRINCIPAL SHAREHOLDER
	 	 	3	 
	4.1 Organization and Good Standing
	 	 	3	 
	4.2 Authority; No Conflict
	 	 	3	 
	4.3 Capitalization
	 	 	4	 
	4.4 Financial Statements
	 	 	4	 
	4.5 Books and Records
	 	 	4	 
	4.6 Title to Properties; Encumbrances
	 	 	4	 
	4.7 Condition and Sufficiency of Assets
	 	 	5	 
	4.8 Accounts Receivable
	 	 	5	 
	4.9 Inventory
	 	 	5	 
	4.10 No Undisclosed Liabilities
	 	 	6	 
	4.11 Taxes
	 	 	6	 
	4.12 Compliance with Legal Requirements; Governmental Authorizations
	 	 	7	 
	4.13 Legal Proceedings; Orders
	 	 	8	 
	4.14 Contracts; No Defaults
	 	 	8	 
	4.15 Insurance
	 	 	10	 
	4.16 Environmental Matters
	 	 	10	 
	4.17 Labor Relations; Compliance; Employees
	 	 	12	 
	4.18 Intellectual Property Rights
	 	 	12	 
	4.19 No Other Agreements to Sell Assets or Capital Stock of the Company
	 	 	13	 
	4.20 Relationships with Related Persons
	 	 	13	 
	4.21 Customers and Suppliers
	 	 	13	 
	4.22 Brokers and Finders
	 	 	13	 
	4.23 Affiliate Indebtedness
	 	 	13	 
	4.24 Disclosure
	 	 	13	 
	 
	 	 	 	 
	ARTICLE V. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
	 	 	14	 
	5.1 Ownership of the Shares
	 	 	14	 
	5.2 Shareholder Authority
	 	 	14	 






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	 	 	Page	 
	5.3 Investment Intent
	 	 	14	 
	 
	 	 	 	 
	ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF THE BUYER
	 	 	15	 
	6.1 Organization of Buyer
	 	 	15	 
	6.2 Authorization; No Conflict
	 	 	15	 
	6.3 Disclosure
	 	 	16	 
	6.4 Brokers or Finders
	 	 	16	 
	6.5 Legal Proceedings
	 	 	16	 
	 
	 	 	 	 
	ARTICLE VII. POST-CLOSING COVENANTS OF THE BUYER
	 	 	16	 
	7.1 Principal Shareholder Guarantees
	 	 	16	 
	 
	 	 	 	 
	ARTICLE VIII. INDEMNIFICATION; REMEDIES
	 	 	16	 
	8.1 Survival of Representations, Etc.
	 	 	16	 
	8.2 Indemnification by Principal Shareholder
	 	 	16	 
	 
	 	 	 	 
	ARTICLE IX. MISCELLANEOUS
	 	 	18	 
	9.1 Assignment
	 	 	18	 
	9.2 Notices
	 	 	18	 
	9.3 Choice of Law
	 	 	18	 
	9.4 Entire Agreement; Amendments and Waivers
	 	 	19	 
	9.5 Multiple Counterparts
	 	 	19	 
	9.6 Expenses
	 	 	19	 
	9.7 Invalidity
	 	 	19	 
	9.8 Titles
	 	 	19	 
	9.9 Burden and Benefit
	 	 	19	 
	9.10 Consent to Jurisdiction
	 	 	19	 
	9.11 Attorneys’ Fees
	 	 	19	 
	9.12 No Interpretation Against Drafter
	 	 	20	 
	9.13 Construction
	 	 	20	 
	9.14 Further Assurances
	 	 	20	 







ii 









 








STOCK PURCHASE AGREEMENT




     THIS STOCK PURCHASE AGREEMENT is dated as of September 1st, 2005 (this
“Agreement”), is by and among AMS Manufacturing, Inc., an Oklahoma corporation (“Buyer”), AMS
Health Sciences, Inc., an Oklahoma corporation (the “Parent”), Heartland Cup, Inc., an Oklahoma
corporation (the “Company”), Truett McCarty, (the “Principal Shareholder”) and the shareholders
listed on the signature pages attached hereto (collectively with the Principal Shareholder, the
“Shareholders”).



RECITALS




     A. The Shareholders own the issued and outstanding shares of capital stock (the “Shares”)
of the Company owned by each Shareholder, as set forth in Exhibit A hereto.



     B. Buyer desires to acquire, and the Shareholders desire to transfer, all of the Shares of the
Company on the terms and subject to the conditions herein contained.



AGREEMENT




     NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein
and for other good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:



ARTICLE I.



DEFINITIONS




     1.1 Defined Terms. As used herein, capitalized terms below shall have the meanings set
forth on Appendix A. Any of such terms, unless the context otherwise requires, may be used
in the singular or plural, depending upon the reference.



     1.2 Other Terms. Other terms may be defined elsewhere in the text of this Agreement
and, unless otherwise indicated, shall have such meaning indicated throughout this Agreement.



ARTICLE II.



PURCHASE AND SALE OF SHARES




     2.1 Agreement to Purchase and Sell Shares. On the terms and subject to the conditions
contained in this Agreement, at the Closing, Buyer shall purchase from the Shareholders, and the
Shareholders shall sell to Buyer (the “Share Purchase”), the Shares free and clear of all options,
proxies, voting trusts, voting agreements, judgments, pledges, charges, escrows, rights of first
refusal and first offer, mortgages, indentures, claims, transfer restrictions, liens, security
interests and other encumbrances (collectively, “Claims”); together with all rights now and
hereafter attaching or accruing thereto.



     2.2 Purchase Price for the Shares. The purchase price (the “Purchase Price Consideration”)
for each Share shall be 1/10 of a validly issued, fully paid and nonassessable share of the
Parent’s common stock (the “Parent Common Stock”).



     2.3 Manner of Payment of the Purchase Price Consideration. At the Closing, Parent shall
pay the Purchase Price Consideration on behalf of Buyer to each Shareholder for each Share
delivered by such Shareholder for purchase at Closing.



1









 





     2.4 Manner of Delivery of Shares. At the Closing, the Shareholders shall deliver to Buyer
certificates evidencing the Shares (together with all rights then or thereafter attaching thereto)
duly endorsed in blank, or accompanied by valid stock powers duly executed in blank, in proper form
for transfer.



     2.5 Restrictive Legend. The Shareholders understand and acknowledge that there will be
placed on the certificates for the shares of Parent Common Stock issued as Purchase Price
Consideration, or any substitution therefore, in addition to any other legend which may be
required, a legend stating in substance:




“THE SALE, TRANSFER OR OTHER DISTRIBUTION OF THE SHARES
EVIDENCED BY THIS CERTIFICATE BY THE HOLDER HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. THESE SHARES MAY NOT BE PUBLICLY
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION UNDER SAID ACT.”



ARTICLE III.



CLOSING




     3.1 Closing. Upon the terms and subject to the conditions set forth herein, the
closing of the Transactions (the “Closing”) shall occur immediately upon execution of this
Agreement at the offices of McAfee & Taft, Two Leadership Square, 211 N. Robinson, Oklahoma City,
OK 73102 or such other place as the parties may otherwise agree.



     3.2 Deliveries at Closing.



     (a) Deliveries Made by the Buyer or the Parent. At the Closing, the Buyer will
deliver to the Company and the Shareholders the following: (i) the Purchase Price Consideration;
(ii) a certificate executed by the Secretary or an Assistant Secretary of the Buyer certifying as
of the Closing Date (A) a true and complete copy of the Organizational Documents of the Buyer, (B)
a true and complete copy of the resolutions of the board of directors of the Buyer authorizing the
execution, delivery and performance of this Agreement and the consummation of the Transactions, and
(C) incumbency matters; and (iii) such other certificates or documents as shall be reasonably
requested by the Company in accordance with the provisions of this Agreement and to consummate the
Transactions.



     (b) Deliveries Made by the Company. At the Closing, the Company will deliver to the
Buyer the following: (i) a certificate executed by the Secretary or an Assistant Secretary of the
Company certifying as of the Closing Date (A) a true and complete copy of the Organizational
Documents of the Company, (B) a true and complete copy of the resolutions of the board of directors
and shareholders of the Company authorizing the execution, delivery and performance of this
Agreement and the consummation of the Transactions, and (C) incumbency matters; (ii) a certificate
of each appropriate Secretary of State certifying the good standing of the Company in its state of
incorporation and all states in which it is qualified to do business; (iii) an unconditional
resignation from each member of the board of directors and each officer of the Company from his or
her office or from the board of directors of the Company, as applicable, in form and substance
satisfactory to the Buyer and (iv) such other certificates or
documents as shall be reasonably requested by the Buyer in accordance with the provisions of
this Agreement and to consummate the Transactions.



2









 





     (c) Deliveries Made by the Shareholders. At the Closing, each Shareholder will
deliver to the Buyer the following: (i) certificates evidencing all of the issued and outstanding
shares of capital stock of the Company owned by the Shareholders as set forth on Exhibit A,
duly endorsed in blank for surrender and cancellation; and (ii) a shareholder release in
substantially the form attached hereto as Exhibit B.



ARTICLE IV.



REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE PRINCIPAL SHAREHOLDER




     The Company and the Principal Shareholder, jointly and severally, hereby represent and warrant
as follows:



     4.1 Organization and Good Standing. The Company is duly organized, validly existing, and
in good standing under the laws of its jurisdiction of incorporation, with full corporate power and
authority to conduct its business as it is now being conducted, to own or use the properties and
assets that it purports to own or use, and to perform all its obligations under Contracts to which
it is a party. The Company is duly qualified to do business and is in good standing under the laws
of each state or other jurisdiction in which either the ownership or use of the properties owned or
used by it, or the nature of the activities conducted by it, requires such qualification. The
Company has delivered to the Buyer true and complete copies of the Organizational Documents of the
Company, as currently in effect.



     4.2 Authority; No Conflict.



     (a) This Agreement and the other Transaction Documents to which the Company is a party (the
“Company Closing Documents”) have been or will be prior to Closing duly executed and
delivered by the Company, and constitute the legal, valid and binding obligations of the Company
enforceable against the Company in accordance with their respective terms, in each case except as
such enforceability may be limited by (i) bankruptcy, insolvency, moratorium, reorganization and
other similar laws affecting creditors’ rights generally and (ii) the general principles of equity,
regardless of whether asserted in a proceeding in equity or at law. The Company has all requisite
power and authority to execute and deliver this Agreement and the Company Closing Documents and to
perform its respective obligations under this Agreement and the Company Closing Documents.



     (b) Neither the execution and delivery of this Agreement and the Company Closing Documents nor
the consummation or performance of any of the Transactions will, directly or indirectly (with or
without notice or lapse of time):



          (i) contravene, conflict with or result in a violation of (A) any provision of the
Organizational Documents of the Company or (B) any resolution or other action adopted or taken by
the board of directors or the shareholders of the Company;




          (ii) contravene, conflict with or result in a violation of, or give any Governmental Body or
other Person the right to challenge any of the Transactions or to exercise any remedy or obtain any
relief under, any Legal Requirement or any Order to which the Company or any of the assets owned or
used by any Acquired Company may be subject;




          (iii) contravene, conflict with or result in a violation of any of the terms or requirements
of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel,
terminate or modify, any Governmental Authorization that is held by the Company or that
otherwise relates to the business of, or any of the assets owned or used by, the Company;




3









 








          (iv) contravene, conflict with or result in a violation or breach of any provision of, or give
any Person the right to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate or modify, any Contract; or




          (v) result in the imposition or creation of any Encumbrance upon or with respect to any of the
assets owned or used by the Company.




     The Company is not and will not be required to give any notice to or obtain any Consent from
any Person in connection with the execution and delivery of this Agreement or the consummation or
performance of any of the Transactions.



     4.3 Capitalization. The authorized equity securities of the Company consist solely of
5,000,000 shares of common stock, of which 2,415,000 shares are issued and outstanding. All of the
outstanding shares of the Company’s capital stock are duly authorized, validly issued, fully paid
and non-assessable. The number Shares owned by each of the Shareholders as of the date of this
Agreement and immediately prior to the Closing are set forth on Exhibit A. No legend or
other reference to any purported Encumbrance appears upon any certificate evidencing the Shares.
There are no contracts, agreements or understandings relating to the issuance, sale or transfer of
any shares of capital stock or other securities of the Company. There are no outstanding
subscriptions, calls, commitments, warrants or options for the purchase of shares of any capital
stock or other securities of the Company or any securities convertible into or exchangeable for
shares of capital stock or other securities issued by the Company, or any other commitments of any
kind for the issuance of additional shares of capital stock or other securities issued by the
Company. None of the outstanding capital stock or equity interests or other securities of the
Company was issued in violation of the Securities Act or any other Legal Requirement. The Company
does not own, nor has any Contract to acquire, any equity securities or other securities of any
Person or any direct or indirect equity or ownership interest in any other business.



     4.4 Financial Statements. The Company has delivered to Buyer: (i) an unaudited balance
sheet of the Company as of July 31, 2005 (the “Balance Sheet”), and the related profit and loss
statements for the period from January 1, 2005 through July 31, 2005 (referred to, collectively
with the Balance Sheet, as the “Financial Statements”). The Financial Statements fairly present
the financial condition and the results of operations of the Company as of the respective dates of,
and for the periods referred to in, the Financial Statements, all in accordance with the books and
records of the Company.



     4.5 Books and Records. The books of account and stock record books of the Company, all of
which have been provided to the Buyer, are complete and correct in all respects and have been
maintained in accordance with sound business practices, including the maintenance of an adequate
system of internal controls, and, with respect to the books of account, fairly and accurately
reflect the income, expenses, assets and liabilities of the Company. The minute books of the
Company contain, accurate records of all meetings held of, and corporate actions taken by, the
shareholders, the boards of directors, and committees of the boards of directors of the Company. At
the Closing, all of those books and records will be in the possession of the Company.



     4.6 Title to Properties; Encumbrances.



     (a) The Company has delivered to Buyer copies of the deeds and other instruments (as recorded)
by which the Company acquired such real property and interests, and copies of all title
insurance policies, opinions, abstracts, and surveys in the possession of the Company and
relating to such property or interests.



4









 





     (b) The Company has delivered a true and accurate copy of all such leases or other documents
creating such real property interests to the Buyer and all such leases or documents are in full
force and effect and are legal, valid, binding and enforceable against the Company and, the other
parties thereto. Following the Closing, such leases or documents will continue to be in full force
and effect and legal, valid, binding and enforceable against the Company and against all other
parties thereto. There are no disputes, oral agreements or forbearances in effect as to any such
leases.



     (c) The Company owns (with good and marketable title in the case of real property, subject
only to the matters permitted by the following sentence) all the properties and assets (whether
real, personal, or mixed and whether tangible or intangible) that it purports to own located in the
Facilities owned or operated by the Company or reflected as owned in the books and records of the
Company, including all of the properties and assets reflected in the Balance Sheet (except for
personal property sold since the date of the Balance Sheet in the Ordinary Course of Business), and
all of the properties and assets purchased or otherwise acquired by the Company since the date of
the Balance Sheet (except for personal property acquired and sold since the date of the Balance
Sheet in the Ordinary Course of Business and consistent with past practice). All properties and
assets reflected in the Balance Sheet are free and clear of all Encumbrances and are not, in the
case of real property, subject to any rights of way, building use restrictions, exceptions,
variances, reservations, or limitations of any nature except, with respect to all such properties
and assets, (i) mortgages or security interests reflected in the Balance Sheet as securing
specified liabilities or obligations or, with respect to which no default exists, (ii) mortgages or
security interests incurred in connection with the purchase of property or assets after the date of
the Balance Sheet (such mortgages and security interests being limited to the property or assets so
acquired), (iii) liens for current taxes not yet due for which there are adequate reserves in the
Financial Statements, and (iv) with respect to real property, (A) minor imperfections of title, if
any, none of which is substantial in amount, materially detracts from the value or impairs the use
of the property subject thereto, or impairs the operations of the Company, and (B) zoning laws and
other land use restrictions that do not impair the present or anticipated use of the property
subject thereto. All buildings, plants, and structures owned by the Company lie wholly within the
boundaries of the real property owned by the Company and do not encroach upon the property of, or
otherwise conflict with the property rights of, any other Person.



     4.7 Condition and Sufficiency of Assets. The buildings, plants, structures, motor vehicles
and equipment of the Company are in good operating condition and repair, ordinary wear and tear
excepted, and none of such buildings, plants, structures motor vehicles and equipment of the
Company are in need of maintenance or repairs except for ordinary, routine maintenance and repairs.
The buildings, plants, structures, motor vehicles and equipment of the Company are sufficient for
the continued operation of the business of the Company after the Closing in substantially the same
manner as conducted prior to the Closing.



     4.8 Accounts Receivable. All accounts receivable of the Company that are reflected on the
Balance Sheet (collectively, the “Accounts Receivable”) represent valid obligations arising from
sales actually made or services actually performed in the Ordinary Course of Business. There is no
contest, claim or right of setoff, other than returns in the Ordinary Course of Business, with any
obligor of any Accounts Receivable relating to the amount or validity of such Accounts Receivable.



     4.9 Inventory. The inventory as set forth on the Balance Sheet or arising since the date of
the Balance Sheet was acquired and has been maintained in accordance with the regular business
practices of the Company, consists of new and unused items, substantially all of which is
commercially usable or saleable in the Ordinary Course of Business.




5









 





     4.10 No Undisclosed Liabilities. The Company has no liabilities except for (a)
liabilities, to the extent reflected or reserved against in the Balance Sheet, and (b) liabilities
which have arisen in the Ordinary Course of Business since the date thereof.



     4.11 Taxes.



     (a) The Company has filed all Tax Returns that it is required to file. All such Tax Returns
were correct and complete in all material respects. All taxes due and owing by any of the Company
(whether or not shown on any Tax Return) have been paid. The Company is not currently the
beneficiary of any extension of time within which to file any Tax Return.



     (b) There is no material dispute or claim concerning any Tax liability of the Company either
(A) claimed or raised by any authority in writing or (B) as to which the Company or its directors
or officers has knowledge based upon personal contact with an agent of such authority. No waiver
of any statute of limitations with respect to any Tax Return has been given by the Company. All
deficiencies asserted or assessments made as a result of any examinations have been fully paid.



     (c) There are no liens for Taxes upon any of the assets of the Company (other than liens for
taxes not yet due and payable).



     (d) The Company is not a party to, is not bound by and has no obligation under any Tax sharing
allocation or indemnity agreement or similar Contract or arrangement.



     (e) The Company has never been a member of an affiliated group of corporations, within the
meaning of IRC § 1504, except for a consolidated group of which the Company is the common parent.



     (f) The Company has never filed a consent pursuant to the collapsible corporation provisions
of IRC § 341(f) (or any corresponding provision of state, local or foreign income Tax law) or
agreed to have IRC § 341(f)(2) (or any corresponding provision of state, local or foreign income
Tax law) apply to any disposition of any asset owned by it.



     (g) None of the assets of the Company is property that the Company is required to treat as
being owned by any other Person pursuant to the “safe harbor lease” provisions of former IRC §
168(f)(8).



     (h) None of the assets of the Company directly or indirectly secures any debt the interest on
which is Tax-exempt under IRC § 103(a).



     (i) None of the assets of the Company is “tax-exempt use property” within the meaning of IRC §
168(h).



     (j) The Company will not be required to include any item of income in, or exclude any item of
deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing
Date as a result of any change in method of accounting for a taxable period ending on or prior to
the Closing Date.



     (k) The Company has never participated in nor is participating in an international boycott
within the meaning of IRC § 999.



     (l) The Company has complied with the withholding, reporting and remittance requirements of
IRC §§ 1441-1464, IRC §§ 3101-3102, IRC §§ 3401-3406, IRC § 6041 and IRC § 6049.



6









 





     (m) The unpaid Taxes of the Company (A) do not, as of the date of the Balance Sheet, exceed
the reserve for Tax liability (rather than any reserve for deferred Taxes established to reflect
timing differences between book and Tax income) set forth on the face of the Balance Sheet (rather
than in any notes thereto) and (B) will not exceed that reserve as adjusted for operations and
transactions through the Closing Date in accordance with the past custom and practices of the
Acquired Company in filing its Tax returns.



     (n) The Company uses the accrual method of accounting for income tax purposes and, since its
inception, has not made any change in accounting methods, received a ruling from any taxing
authority (or other Governmental Authority) or signed an agreement with any taxing
authority (or other Governmental Authority) relating to the Company’s method of accounting for
income tax purposes.



     (o) No power of attorney granted by the Company with respect to any Taxes is currently in
force.



     (p) No Shareholder of the Company is a Person other than a United States Person within the
meaning of the IRC.



     (q) The Company is not subject to any joint venture, partnership or other arrangement or
contract that could be treated as a partnership for federal or applicable state income tax purposes
or for any other Tax purposes.



     (r) The Company has provided to the Buyer a listing of each state, local and foreign
jurisdiction in which the Company is required to file or be included in a Tax Return. No written
claim has ever been received by the Company from a taxing authority or other Governmental Body in a
jurisdiction where the Acquired Company does not pay Taxes or file Tax Returns that the Company is
or may be subject to Taxes assessed by such jurisdiction, no such claim has been or is Threatened
by a taxing authority or other Governmental Body.



     (s) The Company neither has nor has had a permanent establishment in any foreign country, as
defined in any applicable Tax treaty or convention between the United States and such foreign
jurisdiction.



     (t) The Company has not participated in a transaction that has been specifically identified by
the IRS as a tax avoidance transaction or that is subject to either the disclosure list maintenance
or registration requirements of IRC §§ 6011, 6111 or 6112 and the regulations thereunder, and has
not disclosed any transactions to the IRS under any penalty amnesty program.



     4.12 Compliance with Legal Requirements; Governmental Authorizations.



     (a) (i) The Company is, and at all times has been, in compliance with each material Legal
Requirement that is or was applicable to it or to the conduct or operation of the Company’s
business or the ownership or use of any of its assets; (ii) no event has occurred or circumstance
exists that (with or without notice or lapse of time) (A) could reasonably be expected to
constitute or result in a violation by the Company, or a failure on the part of the Company to
comply with, any Legal Requirement or (B) could reasonably be expected to give rise to any
obligation on the part of the Company to undertake, or to bear all or any portion of the cost of,
any remedial action of any nature; and (iii) the Company has not received any written or other
notice or communication from any Governmental Body or any other Person regarding (A) any actual,
alleged, possible or potential violation of, or failure to comply with, any Legal Requirement by
the Company or (B) any actual, alleged, possible or potential obligation on the part of the Company
to undertake, or to bear all or any portion of the cost of, any remedial action of any nature.



7









 





     (b) (i) The Company is, and at all times has been, in full compliance with all of the terms
and requirements of each Governmental Authorization; (ii) no event has occurred or circumstance
exists that may (with or without notice or lapse of time) (A) constitute or result directly or
indirectly in a violation of or a failure to comply with any term or requirement of any
Governmental Authorization or (B) result directly or indirectly in the revocation, withdrawal,
suspension, cancellation or termination of, or any modification to, any Governmental Authorization;
(iii) the Company has not received, any written or, other notice or communication from any
Governmental Body or any other Person regarding (A) any actual, alleged, possible or potential
violation of or failure to comply with any term or requirement of any Governmental Authorization or
(B) any actual, proposed, possible or potential revocation, withdrawal, suspension, cancellation,
termination of or modification to any Governmental Authorization; and (iv) all applications
required to have been filed for the renewal of the Governmental Authorizations have been duly filed
on a timely basis with the appropriate Governmental Bodies, and all other material filings required
to have been made with respect to such Governmental Authorizations have been duly made on a timely
basis with the appropriate Governmental Bodies.



     4.13 Legal Proceedings; Orders.



     (a) There is no pending Proceeding: (i) that has been commenced by or against the Company, or
that otherwise relates to or may affect the business of, or any of the assets owned or used by, the
Company; or (ii) that challenges, or that may have the effect of preventing, delaying, making
illegal or otherwise interfering with, any of the Transactions. No such Proceeding has been
Threatened. No event has occurred or circumstance exists that could reasonably be expected to give
rise to or serve as a basis for the commencement of any such Proceeding. The Company has delivered
to the Buyer copies of all pleadings, correspondence, and other documents relating to any
Proceeding.



     (b) There is no Order: (i) to which the Company or any of the assets owned or used by the
Company is subject; (ii) to which the Company is subject that relates to the business of, or any of
the assets owned or used by, the Company; and (iii) to which any officer, director or key employee
of the Company is subject that prohibits such officer, director, agent or employee from engaging in
or continuing any conduct, activity or practice relating to the business of the Company or
otherwise.



     (c) The Company is not in violation of any Order to which it is subject. No event has
occurred or circumstance exists that may constitute or result in (with or without notice or lapse
of time) a violation of or failure to comply with any term or requirement of any Order to which the
Company or any of the assets owned or used by the Company is subject. The Company has not
received, any written or other notice or communication from any Governmental Body or any other
Person regarding any actual, alleged, possible or potential violation of, or failure to comply
with, any term or requirement of any Order to which the Company or any of the assets owned or used
by the Company, is or has been subject.



     4.14 Contracts; No Defaults.



     (a) The Company has made available to the Buyer true and complete copies, of each of the
following Contracts to which the Company is a party or by which any of their respective assets and
properties is bound:




          (i) each Contract (other than routine purchase orders) that involves or will involve
performance of services or delivery of goods by the Company;




          (ii) each lease, rental or occupancy agreement, license, installment and conditional
sale agreement of the Company and each other Contract affecting the ownership, leasing or
use of, title to, or any leasehold or other interest in, any real or personal property;



8









 






          (iii) each licensing or royalty agreement or similar with respect to patents,
trademarks, copyrights or other Employed Intellectual Property, including all agreements
with current or former employees, consultants or contractors regarding the appropriation or
the non-disclosure orally of the Employed Intellectual Property, and perpetual,
paid-up licenses for commonly available software programs;




          (iv) each collective bargaining agreement or other Contract with any labor union or
other employee representative of a group of employees and each other written employment or
consulting agreement with any employees or consultants;




          (v) each joint venture or partnership Contract (however named) or similar Contracts
involving a sharing of profits, losses, costs or liabilities by the Company with any other
Person;




          (vi) each Contract containing covenants that in any way purport to restrict the
business activity of the Company or any of its Affiliates or limit the freedom of the
Company or any of its Affiliates to engage in any line of business or to compete with any
Person;




          (vii) each Contract providing for payments to or by any Person based on sales,
purchases or profits, other than direct payments for goods and salesman commission
agreements;




          (viii) each power of attorney granted by or to the Company that is currently, or will
be at the Closing, effective and outstanding;




          (ix) each Contract for capital expenditures;




          (x) each Contract between the Company and its former or current shareholders,
directors, officers and employees or other Contract providing for a commitment of
employment, consulting or management services;




          (xi) each written warranty, guaranty, and or other similar undertaking with respect to
contractual performance extended by the Company, other than in the Ordinary Course of
Business;




          (xii) each Contract, the termination of or default under which could reasonably be
expected to have a Material Adverse Effect on the Company;




          (xiii) each Contract (other than this Agreement) that (A) limits or restricts the
ability of the Company to declare or pay dividends on, to make any other distribution in
respect of or to issue or purchase, redeem or otherwise acquire its capital stock, to incur
indebtedness, to incur or suffer to exist any Encumbrance, to purchase or sell any assets
and properties, to change the lines of business in which it participates or engages or to
engage in any merger or other business combination or (B) requires the Company to maintain
specified financial ratios or levels of net worth or other indicia of financial condition;




          (xiv) each Contract under which the Company has advanced or loaned any funds;




          (xv) each Contract under which the Company subcontracts work to third parties outside
of the Ordinary Course of Business;



9









 






          (xvi) each Contract between or among the Company, on the one hand, and any Shareholder
or any of their affiliates, on the other hand;




          (xvii) each Contract (other than routine purchase orders) that (A) involves the
obligation to make a payment, pursuant to the terms of any such Contract, by or to the
Company and (B) cannot be terminated within 30 days after giving notice of termination
without resulting in any cost or penalty to any Acquired Company; and




          (xviii) each amendment, supplement, and modification (whether oral or written) in
respect of any of the foregoing.



     (b) Each Contract is in full force and effect and binding upon the Company and constitutes a
legal, valid and binding agreement of each other party thereto, enforceable in accordance with its
terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other
similar creditor’s rights laws. The Company has performed (and has no present expectations of not
fully performing) all obligations required to be performed by it in connection with the Contracts
and the Company is not in material violation of or material default under any such Contract (or
with notice or lapse of time or both, would be in violation of or default under any such Contract)
and no Contract has been canceled by any party thereto.



     (c) The Company has not given to or received from any other Person any written or other notice
or communication regarding any actual, alleged, possible or potential violation or breach of, or
default under, any Contract.



     (d) There are no renegotiations of, attempts to renegotiate, or outstanding rights to
renegotiate any amounts paid or payable to the Company under any Contract and no Party to any
Contract has made written demand for such renegotiation. No current customer has informed the
Company that it shall stop or decrease its rate of business with the Company or that it desires to
renegotiate any Contract.



     4.15 Insurance. The Company has delivered to the Buyer a true and correct list of all
insurance policies that are currently held by the Company. All insurance policies are in the name
of the Company, are outstanding and in full force and effect, and all premiums due for such polices
are currently paid. Since December 31, 2004, the Company has not received notice of cancellation
or termination of any such policy, nor has it been denied or had revoked or rescinded any policy of
insurance, nor has it borrowed against any such policies. The Company carries, or is covered by,
insurance with companies that as of the date of this Agreement are financially sound and reputable
in such amounts with such deductibles and against such risks and losses as are reasonable for the
business and assets of the Company.



     4.16 Environmental Matters.



     (a) The Facilities for which the Company is legally responsible (i) are in compliance with
Environmental Laws and (ii) are not and have not been, in violation of, or liable under, any
Environmental Law.



     (b) The Company has not received any written notice or other written communication (including
but not limited to notices of violations, consent decrees, judgments, judicial or administrative
orders or liens but excluding general notices or similar communications of prospective changes to
Environmental Laws), from any Governmental Body or private citizen, including, without limitation,
the current or prior owner or operator of any Facilities, of any actual or potential violation or
failure to comply with any Environmental Law, or of any actual or Threatened obligation to
undertake or bear the




10









 







cost of any Environmental, Health and Safety Liabilities with respect to any of the Facilities or
any other properties or assets (whether real, personal or mixed) in which the Company has had an
interest, or for which the Company is legally responsible; and, no such notification or
communication has been Threatened.




     (c) The Facilities are in compliance with, and are not, and have not been, in violation of, or
liable under, any Occupational Safety and Health Law.



     (d) Neither the Company, nor any other Person for whose conduct the Company is legally
responsible, has any Environmental, Health, and Safety Liabilities with respect to the Facilities
or any property geologically or hydrologically adjoining the Facilities.



     (e) Neither the Company, nor any other Person for whose conduct it is legally responsible, has
any Environmental, Health, and Safety Liabilities with respect to any other properties (including,
without limitation, Facilities formerly owned, used or operated by the Company) (i) in which the
Company has or had an interest, (ii) which the Company operates or has operated or (iii) which
geologically or hydrologically adjoin any such property.



     (f) There are no Hazardous Materials present on or in the Environment at the Facilities,
including any Hazardous Materials contained in barrels, above or underground storage tanks,
landfills, land deposits, dumps, equipment (whether moveable or fixed) or other containers, either
temporary or permanent, and deposited or located in land, water, dumps, ponds, lagoons, ditches,
piping systems, conduits, swamps, pumping stations, collection systems, sanitary or storm water
sewers or any other part of the Facilities, or incorporated into any structure therein or thereon,
in violation of any applicable Environmental Law.



     (g) Neither the Company, nor any other Person for whose conduct the Company is legally
responsible, has permitted or conducted any Hazardous Activity in violation in any material respect
of any Environmental Law with respect to the Facilities or any other properties or assets (whether
real, personal or mixed) for which the Company is legally responsible.



     (h) During the period that the Company has owned or operated a Facility, no Hazardous Material
was collected, transported, handled, delivered or taken from that Facility to any other location
(other than another Facility or other property that the Company then owned or had any interest)
where there has been a Release or Threat of Release of any Hazardous Materials in violation of any
applicable Environmental Law for which the Company is legally responsible.



     (i) During the period that the Company owned or operated any property, no Hazardous Material
was collected, transported, handled, delivered or taken from that property to any other location
(other than another property that the Company then owned or had any interest) where there has been
a Release or Threat of Release of any Hazardous Materials in violation of any applicable
Environmental Law for which the Company is legally responsible.



     (j) The Company and the Facilities have all Environmental Permits required under any
Environmental Law or the provisions of any Environmental Law relating to the Company to conduct
their current business as currently conducted by them, and each Facility and the Company is in
compliance with all such Environmental Permits required to be obtained with respect to that
Facility and the Company.



     (k) The Company has delivered to the Buyer true, complete and correct copies of any reports,
studies, analyses, tests or monitoring possessed or initiated by the Company pertaining to
Hazardous




11









 







Materials or Hazardous Activities in, on or under the Facilities or concerning compliance by
Shareholders, the Company, or any other Person for whose conduct they are legally responsible, with
Environmental Laws.




     4.17 Labor Relations; Compliance; Employees. The Company neither is nor has ever been a
party to any collective bargaining or other Contract with any labor union or any other
representative of a group of employees. There has not been, there is not presently pending or
existing, and, there is not Threatened (a) any strike, slowdown, picketing, work stoppage or
employee grievance process, (b) any Proceeding against or affecting the Company relating to the
alleged violation of any Legal Requirement pertaining to labor relations or employment matters,
including any charge or complaint filed by an employee or union with the National Labor Relations
Board, the Equal Employment Opportunity Commission or any comparable Governmental Body,
organizational activity or other labor or employment dispute against or affecting the Company or
its premises or (c) any application for certification of a collective bargaining agent. There is no
lockout of any employees by the Company, and no such action is contemplated by the Company. The
Company has complied with all Legal Requirements relating to employment, equal employment
opportunity, nondiscrimination, immigration, wages, hours, benefits, collective bargaining, the
payment of social security and similar Taxes, occupational safety and health, and plant closing.
No employee, officer or director of the Company is a party to, or is otherwise bound by, any
agreement or arrangement, including any confidentiality, noncompetition, or proprietary rights
agreement, between such employee, director or officer and any other Person (“Proprietary Rights
Agreement”) that in any way adversely affects or will affect (i) the performance of such
employee’s duties as an employee, director or officer of the Company, or (ii) the ability of the
Company to conduct its business, including any Proprietary Rights Agreement with the Shareholders
or the Company by any such employee, director or officer. None of the employees intends to
terminate his employment with the Company. The Company has not entered into any severance or
similar arrangement in respect of any personnel that provides for any obligation (absolute or
contingent) of the Company or any other Person to make any payment to any such personnel following
termination of employment.



     4.18 Intellectual Property Rights.



     (a) The Company owns all right, title and interest in, to and under, free and clear of any
Encumbrance, and have the valid and enforceable right to use and fully and completely assign,
transfer and convey, (or have a valid, written, enforceable license) to: (i) all U.S. and foreign
patents, inventions (patentable or unpatentable), know-how, trade secrets, and all other tangible
or intangible confidential or proprietary technical and business information, copyrights
(registered or unregistered), computer software and programs of any kind or nature (including, but
not limited to, any and all object code, source code, firmware, program and/or programming tools),
trademarks (registered or unregistered), service marks (registered or unregistered), trade names,
trade dress, and all patent applications, trademark and/or service mark applications and/or
registrations, and copyright applications for any of the foregoing, as well as any and all goodwill
symbolized by and/or associated with any of the foregoing (collectively, “Intellectual Property”),
currently used or planned to be used in products currently under development or otherwise
reasonably necessary to carry on the business and planned business of the Company; and (ii) all
rights to any and all income, royalties, revenues, damages, payments previously, now or hereafter
due and/or payable under or with respect to any of the foregoing Intellectual Property to the
extent owned by the Company, including, without limitation, the right to all past, present and
future causes of action for violating any rights relating to any of the foregoing Intellectual
Property owned by the Company including, but not limited to, infringement, unfair competition,
misappropriation and/or dilution (all rights included in this Section 4.18 are collectively
referred to as “Employed Intellectual Property”).




12









 







The activities, products and services of the Company have not and do not infringe upon,
misappropriate, dilute (in the case of trademarks), and/or otherwise violate, or constitute the
unauthorized use of, the Intellectual Property of any other Person. There are no written or oral
allegations, threats or claims and there are no lawsuits pending or threatened, in any case, (i)
alleging that the Company’s activities, products or services infringe upon, misappropriate, dilute
(in the case of trademarks), and/or otherwise violate, or constitute the unauthorized use of, any
other Person’s Intellectual Property or (ii) challenging the Company’s ownership of, right to use,
right to assign or license, the validity or enforceability of, or any license or other agreement
relating to, any Employed Intellectual Property. There is no basis to conclude that any third
party has, is, and/or is planning to, infringe upon, misappropriate, dilute (in the case of
trademarks), and/or otherwise violate, any Employed Intellectual Property owned by the Company.




     4.19 No Other Agreements to Sell Assets or Capital Stock of the Company. Neither the
Company nor any of its shareholders, officers, directors or Affiliates has any commitment or legal
obligation, absolute or contingent, to any other Person or firm, other than as contemplated by the
Transactions, to sell, assign, transfer or effect a sale of any of the assets of the Company (other
than inventory and products in the Ordinary Course of Business), to sell or effect a sale of the
capital stock of the Company, to effect any acquisition, merger, consolidation, liquidation,
dissolution or other reorganization of the Company or to enter into any agreement or cause the
entering into of an agreement with respect to any of the foregoing.



     4.20 Relationships with Related Persons. Neither the Company nor any of their respective
Related Persons owns or has owned (of record or as a beneficial owner) an equity interest or any
other financial or profit interest in, a Person that has (a) had business dealings or a material
financial interest in any transaction with the Company other than business dealings or transactions
conducted in the Ordinary Course of Business with the Company at substantially prevailing market
prices and on substantially prevailing market terms or (b) engaged in a business competing with the
Company with respect to any line of the products or services of the Company in any market presently
served by the Company. No Related Person of the Company is a party to any Contract with, or has
any claim or right against, the Company.



     4.21 Customers and Suppliers. There has been no adverse change in the business
relationship with any supplier or customer and no threat or indication that any such change is
foreseeable including, without limitation, as a result of the Transactions.



     4.22 Brokers and Finders. Neither the Company nor the Shareholders and their respective
agents have incurred any obligation or liability for brokerage or finders’ fees or agents’
commissions or other similar payment in connection with the Transactions or this Agreement.



     4.23 Affiliate Indebtedness. There exists no borrowings to or from Affiliates or other
Affiliate Indebtedness of the Company.



     4.24 Disclosure. No representation or warranty of the Company in this Agreement states or omits to state
a material fact necessary to make the statements herein or therein, in light of the circumstances
in which they were made, not misleading.




13









 








ARTICLE V.



REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS




     Each Shareholder represents the following:



     5.1 Ownership of the Shares. Shareholder is the sole legal and beneficial owner of all of
the outstanding Shares that is set forth opposite Shareholder’s name on Exhibit A and such
Shares are to be sold pursuant to this Agreement. None of such Shares are subject to any liens or
to any rights of first refusal of any kind, and such Shareholder has not granted any rights to
purchase such Shares to any other Person. Shareholder has the sole right to transfer such Shares
to the Buyer. Such Shares constitute all of the capital stock of the Company owned, beneficially
or legally by Shareholder, and Shareholder has no other rights to acquire any shares of the
Company’s capital stock. Upon the Closing, the Buyer will receive good title to such Shares,
subject to no liens retained, granted or permitted by Shareholder.



     5.2 Shareholder Authority. Shareholder has the legal capacity to enter into Agreement and
any other agreements as may be necessary to effect this Agreement to which Shareholder is a party
and to consummate the transactions contemplated hereby and thereby. This Agreement has been duly
executed and delivered by Shareholder and constitutes valid and binding obligations of Shareholder,
enforceable in accordance with its terms.



     5.3 Investment Intent.



          (a) Shareholder understands that shares of Parent Common Stock to be issued pursuant to this
Agreement have not been, and will not be, registered under the Securities Act by reason of a
specific exemption from the registration provisions of the Securities Act, the availability of
which depends upon, among other things, the bona fide nature of the investment intent and the
accuracy of Shareholder’s representations as expressed herein or otherwise made pursuant hereto.




          (b) Shareholder is acquiring the shares of Parent Common Stock for investment for its own
account, not as a nominee or agent, and not with the view to, or for resale in connection with, any
distribution thereof, and Shareholder has no present intention of engaging in a distribution of the
same. Shareholder further represents that it does not have any contract, undertaking, agreement or
arrangement with any person or entity to sell, transfer or grant participation to such person or
entity or to any third person or entity for any of the share of Parent Common Stock.




          (c) Shareholder, or its purchaser representative, within the meaning of Regulation D, Rule
501(h), promulgated by the Securities and Exchange Commission (its “Purchaser Representative”), has
substantial experience in evaluating and investing in private placement transactions of securities
in companies similar to Buyer and acknowledges that Shareholder or its Purchaser Representative can
protect its own interests. Shareholder or its Purchaser Representative has such knowledge and
experience in financial and business matters so that such Shareholder or its Purchaser
Representative is capable of evaluating the merits and risks of its investment in Buyer.




          (d) Shareholder understands and acknowledges that an investment in Buyer is highly speculative
and involves substantial risks. Shareholder can bear the economic risk of such Shareholder’s
investment and is able, without impairing Shareholder’s financial condition, to hold the
shares of Parent Common Stock for an indefinite period of time and to suffer a complete loss of
Shareholder’s investment.




          (e) The residency of Shareholder is correctly set forth on the signature page to this
Agreement.




14









 








          (f) Shareholder acknowledges that shares of Parent Common Stock must be held indefinitely
unless subsequently registered under the Securities Act or an exemption from such registration is
available. Such Shareholder is aware of the provisions of Rules 144 and 145 promulgated under the
Securities Act which permit limited resale of shares purchased in a private placement subject to
the satisfaction of certain conditions, including among other things, the existence of a public
market for the shares, the availability of certain current public information about the Buyer, the
resale occurring not less than a designated period after a party has purchased and paid for the
security to be sold, the sale being effected through a “broker’s transaction” or in transactions
directly with a “market maker” and the number of shares being sold during any three-month period
not exceeding specified limitations. Such Shareholder acknowledges that, in the event all of the
requirements of Rule 144 or Rule 145, as applicable, are not met, registration under the Securities
Act or an exemption from registration will be required for any disposition of shares of Parent
Common Stock. Shareholder understands that, although Rule 144 and Rule 145 are not exclusive, the
Securities and Exchange Commission has expressed its opinion that persons proposing to sell
restricted securities received in a private offering other than in a registered offering or
pursuant to Rule 144 or Rule 145 or will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales and that such persons and the
brokers who participate in the transactions do so at their own risk.




ARTICLE VI.



REPRESENTATIONS AND WARRANTIES OF THE BUYER




     Buyer hereby represents and warrants to the Company as follows:



     6.1 Organization of Buyer. Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Oklahoma, with full legal power and authority to
conduct its business as it is now being conducted, to own or use the properties and assets that it
purports to own or use, and to perform all its obligations under Contracts to which it is party.



     6.2 Authorization; No Conflict.



     (a) This Agreement and other Transaction Documents to which the Buyer is a party (the
“Buyer Closing Documents”) have been or will be prior to Closing duly executed and
delivered by the Buyer and constitute the legal, valid, and binding obligations of the Buyer, as
the case may be, enforceable against the Buyer in accordance with their respective terms, in each
case except as such enforceability may be limited by (i) bankruptcy, insolvency, moratorium,
reorganization and other similar laws affecting creditors’ rights generally and (ii) the general
principles of equity, regardless of whether asserted in a proceeding in equity or at law. The
Buyer has all requisite power, authority and capacity to execute and deliver this Agreement and the
Buyer Closing Documents and to perform its obligations under this Agreement and the Buyer Closing
Documents.



     (b) Neither the execution and delivery of this Agreement and the Buyer Closing Documents nor
the consummation or performance of any of the Transactions will, directly or indirectly (with or
without notice or lapse of time): (i) contravene, conflict with or result in a violation of (A)
any provision of the Organizational Documents of the Buyer or (B) any resolution or other action
taken by the members or the managers of the Buyer; (ii) contravene, conflict with or result in a
violation of, or give any Governmental Body or other Person the right to challenge, any of the
Transactions or to exercise any remedy or obtain any relief under, any Legal Requirement or any
Order to which the Buyer or any of the assets owned or used by the Buyer, may be subject; or (iii)
contravene, conflict with or result in a violation or breach of any provision of, or give any
Person the right to declare a default or exercise any




15









 







remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify,
any Contract to which the Buyer is a party or by which the Buyer may be bound.




     (c) The Buyer is not, nor will be, required to give any notice to or obtain any Consent from
any Person in connection with the execution and delivery of this Agreement or the consummation or
performance of any of the Transactions.



     6.3 Disclosure. No representation or warranty of the Buyer in this Agreement omits to
state a material fact necessary to make the statements herein or therein, in light of the
circumstances in which they were made, not misleading.



     6.4 Brokers or Finders. Neither the Buyer, its officers and agents, nor any other Person
acting on behalf of Buyer has incurred any obligation or liability for brokerage or finders’ fees
or agents’ commissions or other similar payment in connection with this Agreement.



     6.5 Legal Proceedings. There is no pending Proceeding that has been commenced by or
against the Buyer and that challenges, or that may have the effect of preventing, delaying, making
illegal or otherwise interfering with, any of the Transactions.



ARTICLE VII.



POST-CLOSING COVENANTS OF THE BUYER




     7.1 Principal Shareholder Guarantees. As soon as practicable following the Closing,
Buyer shall take any and all commercially reasonable actions necessary to fully and completely
release the Principal Shareholder of any and all liability or obligations under the terms of his
personal guaranties of the obligations of the Company, listed on Schedule 7.1 (the “Guaranteed
Debt”), and Buyer hereby agrees to hold the Principal Shareholder harmless from any and all Damages
(as defined in Section 7.2(a)) incurred by the Principal Shareholder relating to the Guaranteed
Debt on or after the Closing.



ARTICLE VIII.



INDEMNIFICATION; 



REMEDIES




     8.1 Survival of Representations, Etc. The representations and warranties of the Company,
the Shareholders and the Buyer contained herein shall survive until 24 months after the Closing
Date except for the representations in Section 4.25, which shall survive indefinitely.



     8.2 Indemnification by Principal Shareholder.



     (a) The Principal Shareholder shall indemnify, save and hold harmless the Buyer and the
Buyer’s Affiliates and each of their respective Representatives (collectively, the “Buyer
Indemnified  Parties”), from and against any and all costs, losses, liabilities, obligations,
damages, lawsuits, deficiencies, claims, demands and expenses (whether or not arising out of third
party claims), attorneys’ fees and all amounts paid in investigation, defense or settlement of any
of the foregoing (herein, “Damages”), incurred in connection with, arising out of,
resulting from or incident to: (i) any breach of any representation or warranty made by the Company
and the Shareholders in Article V of this Agreement; (ii) any breach of any covenant or agreement
made by the Company in this Agreement; and (iii) any brokerage or similar commission or other
compensation with respect to a third party who acted as a broker, finder, investment banker,
advisor, consultant or appraiser or in any similar capacity on behalf of the Shareholders or the
Company in connection with the Transactions.



16









 





     (b) The term “Damages” as used in this Article VIII is not limited to matters asserted by
third parties against any indemnified party, but includes Damages incurred or sustained by an
indemnified party in the absence of third party claims. Payments by any indemnified party of
amounts for which such indemnified party is indemnified hereunder shall not be a condition
precedent to recovery.



     (c) Defense of Claims. If a claim for Damages (a “Claim”) is to be made by a
party entitled to indemnification hereunder against the indemnifying party, the party claiming such
indemnification shall, give written notice (a “Claim Notice”) to the indemnifying party
promptly after the party entitled to indemnification becomes aware of any fact, condition or event
which may give rise to Damages for which indemnification may be sought under this Section 7.2. If
any lawsuit or enforcement action is filed against any party entitled to the benefit of indemnity
hereunder, written notice thereof shall be given to the indemnifying party as promptly as
practicable (and in any event within ten (10) calendar days after the service of the citation or
summons). The failure of any indemnified party to give timely notice hereunder for any purpose
shall not affect rights to indemnification hereunder, except to the extent that the indemnifying
party has been actually prejudiced by such failure. After such notice, if the indemnifying party
shall acknowledge in writing to the indemnified party that the indemnifying party shall be
obligated under the terms of its indemnity hereunder in connection with such lawsuit or action,
then the indemnifying party shall be entitled, if it so elects at its own cost, risk and expense,
(i) to take control of the defense and investigation of such lawsuit or action, (ii) to employ and
engage attorneys of its own choice, but, in any event, reasonably acceptable to the indemnified
party, to handle and defend the same unless the named parties to such action or proceeding
(including any impleaded parties) include both the indemnifying party and the indemnified party and
the indemnified party has been advised by counsel that there may be one or more legal defenses
available to such indemnified party that are different from or additional to those available to the
indemnifying party and would potentially create a conflict of interest, in which event the
indemnified party shall be entitled, at the indemnifying party’s cost, risk and expense, to
separate counsel of its own choosing, but in any event, reasonably acceptable to the indemnifying
party and (iii) to compromise or settle such lawsuit or action, which compromise or settlement
shall be made only with the written consent of the indemnified party.



     If the indemnifying party fails to assume the defense of such lawsuit or action within fifteen
(15) calendar days after receipt of the Claim Notice, the indemnified party against which such
lawsuit or action has been asserted will (upon delivering notice to such effect to the indemnifying
party) have the right to undertake, at the indemnifying party’s cost and expense, the defense,
compromise or settlement of such lawsuit or action on behalf of and for the account and risk of the
indemnifying party. The indemnifying party shall be liable for any settlement of any action
effected pursuant to and in accordance with this Section 7.2 and for any final judgment (subject to
any right of appeal) and the indemnifying party agrees to indemnify and hold harmless an
indemnified party from and against any Damages by reason of such settlement or judgment in
accordance with the other provisions of this Section 7.2(c).



     (d) Cooperation. The indemnified party shall cooperate in all reasonable respects with
the indemnifying party and its Representatives (including without limitation its attorneys) in the
investigation, trial and defense of any lawsuit or action and any appeal arising therefrom;
provided, however, that the indemnified party may, at its own cost, participate in negotiations,
arbitrations and the investigation, trial and defense of such lawsuit or action and any appeal
arising therefrom. The parties shall cooperate with each other in any notifications to insurers.
The indemnified party shall at all times keep the indemnifying party informed of all information
and documents relating to the Claim of which it is aware and, if requested by the indemnifying
party, give the indemnifying party and its or their Representatives reasonable access to the
personnel of the indemnified party and/or its Representatives, as appropriate, and to any relevant
premises, chattels, accounts, documents and records within the power, possession or control of such
Persons to enable the indemnifying party and its Representatives to examine such Claim.



17









 





     (e) Representatives. No individual Representative of any party shall be personally
liable for any Damages under the provisions contained in this Section 7.2 (except to the extent any
such Person is party hereto in his or her individual capacity). Nothing herein shall relieve either
party of any liability to make any payment expressly required to be made by such party pursuant to
this Agreement.



ARTICLE IX.



MISCELLANEOUS




     9.1 Assignment. Neither this Agreement nor any of the rights or obligations hereunder may
be assigned by any party without the prior written consent of the other parties; except that the
Buyer may, without such consent, assign all such rights to any lender as collateral security and
assign all such rights and obligations to a wholly owned Subsidiary (or a partnership controlled by
the Buyer) or Subsidiaries of the Buyer or to a successor in interest to the Buyer which shall
assume all obligations and liabilities of the Buyer under this Agreement. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.



     9.2 Notices . All notices, requests, demands and other communications which are
required or may be given under this Agreement shall be in writing and shall be deemed to have been
duly given when received if personally delivered; when transmitted if transmitted by telecopy,
electronic or digital transmission method and an appropriate confirmation is received; the day
after it is sent, if sent for next day delivery to a domestic address by recognized overnight
delivery service (e.g., Federal Express); and upon receipt, if sent by certified or registered
mail, return receipt requested. In each case notice shall be sent to:




          If to the Shareholders addressed to the address set forth on each Shareholder’s
signature page:


If to the Company or the Buyer addressed to:



AMS Health Sciences, Inc.

Attn: Reggie Cook

711 N.E. 39th Street

Oklahoma City, Oklahoma 73105


With a copy to:



McAfee & Taft

10th Floor, Two Leadership Square

Oklahoma City, OK 73102

Attn: David J. Ketelsleger

Telephone: (405) 552-2236

Telecopy: (405) 228-7436


or to such other place and with such other copies as any party may designate as to itself by
written notice to the others.




     9.3 Choice of Law. This Agreement shall be construed in accordance with and governed by
the laws of the State of Oklahoma (without giving effect to its conflicts of law principles),
except with respect to matters of law concerning the internal corporate affairs of any corporate,
partnership or limited



18









 




liability entity which is a party to or the subject of this Agreement, and as to those matters the
law of the jurisdiction under which the respective entity derives its powers shall govern.




     9.4 Entire Agreement; Amendments and Waivers. This Agreement, together with all exhibits,
annexes and schedules hereto (including the other agreements referred to herein), constitutes the
entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or written, of the parties.
This Agreement may not be amended except in an instrument in writing signed on behalf of each of
the parties hereto. No amendment, supplement, modification or waiver of this Agreement shall be
binding unless executed in writing by the party to be bound thereby. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.



     9.5 Multiple Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument.



     9.6 Expenses. Except as otherwise expressly provided in this Agreement, each party to this
Agreement will bear its respective expenses incurred in connection with the preparation, execution,
and performance of this Agreement and the Transactions, including all fees and expenses of agents,
representatives, counsel, and accountants. In the event of termination of this Agreement, the
obligation of each party to pay its own expenses will be subject to any rights of such party
arising from a breach of this Agreement by another party.



     9.7 Invalidity. In the event that any one or more of the provisions contained in this
Agreement or in any other instrument referred to herein, shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by law, such
invalidity, illegality or unenforceability shall not affect any other provision of this Agreement
or any other such instrument.



     9.8 Titles. The titles, captions or headings of the Articles and Sections herein are
inserted for convenience of reference only and are not intended to be a part of or to affect the
meaning or interpretation of this Agreement.



     9.9 Burden and Benefit. This Agreement shall be binding upon and shall inure to the
benefit of, the parties hereto and their respective successors and permitted assigns. There are no
third party beneficiaries of this Agreement.



     9.10 Consent to Jurisdiction. Each party hereto irrevocably and unconditionally: (i)
agrees that any suit, action or other legal proceeding arising out of this Agreement may be brought
in the United States District Court for the Western District of Oklahoma or, if such court does not
have jurisdiction or will not accept jurisdiction, in any court of general jurisdiction in Oklahoma
County, Oklahoma; (ii) consents to the jurisdiction of any
such court in any such suit, action or proceeding; and (iii) waives any objection which such
party may have to the laying of venue of any such suit, action or proceeding in any such court.



     9.11 Attorneys’ Fees. If any party to this Agreement brings an action to enforce its
rights under this Agreement, the prevailing party shall be entitled to recover its costs and
expenses, including without limitation reasonable attorneys’ fees, incurred in connection with such
action, including any appeal of such action.



19









 





     9.12 No Interpretation Against Drafter. This Agreement is the product of negotiations
between the parties hereto represented by counsel and any rules of construction relating to
interpretation against the drafter of an agreement shall not apply to this Agreement and are
expressly waived.



     9.13 Construction. All pronouns and any variations thereof are deemed to referred to the
masculine, feminine, neuter, singular or plural, as the identify of the person or persons may
require.



     9.14 Further Assurances. The parties hereto agree (a) to furnish upon request to each other
such further information, (b) to execute and deliver to each other such other documents, and (c) to
do such other acts and things, all as may be reasonably requested by another party hereto for the
purpose of carrying out the intent of this Agreement and the Transactions contemplated by this
Agreement.



[The remainder of this page is left intentionally blank]




20









 





     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on their
respective behalf, by their respective officers thereunto duly authorized, all as of the day and
year first above written.



	 	 	 	 	 	 	 
	 	 	BUYER:	 	 
	 
	 	 	 	 	 	 
	 	 	AMS Manufacturing, Inc.	 	 
	 	 	an Oklahoma corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Reggie Cook .	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Reggie Cook	 	 
	 

	 	Its:
	 	Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	PARENT:	 	 
	 
	 	 	 	 	 	 
	 	 	AMS Health Sciences, Inc.	 	 
	 	 	an Oklahoma corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Reggie Cook .	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Reggie Cook	 	 
	 

	 	Its:
	 	Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	Heartland Cup, Inc.,	 	 
	 	 	an Oklahoma corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Truett McCarty .	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Truett McCarty	 	 
	 

	 	Its:
	 	President	 	 
	 
	 	 	 	 	 	 
	 	 	PRINCIPAL SHAREHOLDER:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Truett McCarty	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Truett McCarty	 	 
	 

	 	Address:
	 	Route 1, Box 248	 	 
	 

	 	 	 	Allen, OK 74825	 	 







S-1









 








APPENDIX A

Defined Terms




     The following terms, when capitalized in the Agreement, shall have the meanings set forth
in this Appendix A:



     “Accounts Receivable” shall have the meaning set forth in Section 4.8.



     “Affiliate” shall have the meaning set forth in the Exchange Act. Without limiting the
foregoing, all directors and officers of a Person that is a corporation, all managing members or
managers of a Person that is a limited liability company, and all general partners in any general
or limited partnership shall be deemed Affiliates of such Person for all purposes hereunder.



     “Affiliate Indebtedness” shall mean any accounts payable, loan or otherwise
indebtedness of any kind, liability of the Shareholders or any Affiliate of the Shareholders owed
to the Company.



     “Agreement” shall mean this Stock Purchase Agreement.



     “Balance Sheet” shall have the meaning set forth in Section 4.4(i).



     “Buyer” shall have the meaning set forth in the preamble of this Agreement.



     “Buyer Closing Documents” shall have the meaning set forth in Section 6.2(a).



     “CERCLA” shall mean the United States Comprehensive Environmental Response,
Compensation and Liability Act of 1986, 42 U.S.C. § 9601 et seq., as amended.



     “Claim” shall have the meaning set forth in Section 8.2(c).



     “Claim Notice” shall have the meaning set forth in Section 8.2(c).



     “Cleanup” shall mean any investigation, cleanup, removal, containment or other
remediation or response actions.



     “Closing” shall have the meaning set forth in Section 4.1.



     “Closing Date” shall mean the date on which the Closing actually takes place.



     “Company” shall have the meaning set forth in the preamble of this Agreement.



     “Consent” shall mean any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).



     “Contract” shall mean any agreement, contract, obligation, promise or undertaking
(whether written or oral and whether express or implied) that is legally binding.



     “Damages” shall have the meaning set forth in Section 7.2(a).



     “Employed Intellectual Property” shall have the meaning set forth in Section 4.18.



App. A-1









 





     “Encumbrance” shall mean any charge, claim, community property interest, condition,
equitable interest, lien, option, pledge, security interest, right of first refusal or restriction
of any kind, including any restriction on use, voting, transfer, receipt of income or exercise of
any other attribute of ownership.



     “Environment” shall mean soil, land surface or subsurface strata, surface waters
(including navigable waters, ocean waters, streams, ponds, drainage basins and wetlands),
groundwater, drinking water supply, stream sediments, ambient air (including indoor air), plant and
animal life and any other environmental medium or natural resource.



     “Environmental, Health and Safety Liabilities” shall mean any cost, damage, expense,
liability, obligation or other responsibility arising from or under any Environmental Law or
Occupational Safety and Health Law and consisting of or relating to:




     (a) any environmental, health or safety matters or conditions (including onsite or
off-site contamination, occupational safety and health and regulation of chemical substances
or products);




     (b) fines, penalties, judgments, awards, settlements, legal or administrative
proceedings, damages, losses, claims, demands and response, investigative, remedial or
inspection costs and expenses arising under any Environmental Law or Occupational Safety and
Health Law;




     (c) financial responsibility under any Environmental Law or Occupational Safety and
Health Law for Cleanup costs or corrective action, including any Cleanup required by
applicable Environmental Law or Occupational Safety and Health Law and for any natural
resource damages; or




     (d) any other compliance, corrective investigative or remedial measures required under
any Environmental Law or Occupational Safety and Health Law.



     The terms “removal,” “remedial” and “response action” include the
types of activities covered by CERCLA.



     “Environmental Law” shall mean all applicable federal, state, district, local and
foreign laws, all rules, requirements or regulations promulgated thereunder and all orders, consent
orders, judgments, notices, notice requirements, licenses, or permits issued, promulgated or
entered pursuant thereto, relating to pollution or protection of the Environment (including,
without limitation, ambient air, surface water, ground water, the preservation or protection of
waterways, drinking water, land surface, wildlife, plants or other natural resources), including
without limitation (a) laws limiting emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, wastes or other substances into the Environment and (b) laws
relating to the identification generation, manufacture, processing, distribution, use, treatment,
storage, disposal, recovery, transport or other handling of pollutants, contaminants, chemicals,
industrial materials, or wastes. Environmental Laws shall include, without limitation, CERCLA, the
Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.), RCRA, the Safe Drinking Water Act
(21 U.S.C. § 349, 42 U.S.C. §§ 201, 300f), the Toxic Substances Control Act (15 U.S.C. § 2601 et
seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Oil Pollution Act of 1990 (33 U.S.C. §
2701 et seq.), the Emergency Planning and Community Right to Know Act of 1986 (42 U.S.C. § 11001 et
seq.), the Motor Carrier Act of 1980 (49 U.S.C. § 101 et seq.) or any other similar federal, state
or local law of similar effect, each as amended, but shall not include the USA Patriot Act and any
regulations promulgated thereunder.



App. A-2









 





     “Environmental Permits” shall mean all licenses, permits, approvals, authorizations,
Consents or orders of, or filings with, any Governmental Body, whether federal, state or local,
required for the operation of the Facilities under Environmental Laws.



     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder or any successor law.



     “Facilities” shall mean any real property, leaseholds or other interests currently
owned, operated or used by the Company and any buildings, plants, structures or equipment
(including motor vehicles, tank cars and rolling stock) currently owned, used or operated by the
Company.



     “Financial Statements” shall have the meaning set forth in Section 4.4.



     “Governmental Authorization” shall mean any approval, Consent, license, permit, waiver
or other authorization issued, granted, given or otherwise made available by or under the authority
of any Governmental Body pursuant to any Legal Requirement.



     “Governmental Body” shall mean any:




     (a) nation, state, county, city, town, village, district or other jurisdiction of any
nature;




     (b) federal, state, local, municipal, foreign or other government;




     (c) governmental or quasi-governmental authority of any nature (including any
governmental agency, branch, department, official or entity and any court or other
tribunal);




     (d) multi-national organization or body; or




     (e) body exercising, or entitled to exercise, any administrative, executive, judicial,
legislative, police, regulatory or taxing authority or power of any nature over the
operations of the Company.



     “Hazardous Activity” shall mean the distribution, generation, handling, importing,
management, manufacturing, processing, production, refinement, recycling, Release, storage,
transfer, transportation, treatment or use (including any withdrawal or other use of groundwater)
of Hazardous Materials in, on, under, about or from the Facilities or any part thereof into the
Environment and any other act, business, operation or thing that poses an unreasonable risk of harm
to Persons or property on or off the Facilities or that may adversely affect the value of the
Facilities or the Company; provided, however, that the transportation, storage, sale, distribution,
handling, management and use of petroleum products, antifreeze, synthetic oils, solvents, cleaning
agents and other products sold, used, stored or delivered in the Ordinary Course of Business in
compliance with Environmental Laws and Occupational Safety and Health Laws in the Ordinary Course
of Business of any Acquired Company shall not be deemed a Hazardous Activity.



     “Hazardous Materials” shall mean any waste or other substance that is listed, defined,
designated, displaying characteristics of or classified as, or otherwise determined to be,
hazardous, radioactive, infectious, bio-hazardous or toxic or a pollutant or a contaminant subject
to regulation, control, response or remediation under any Environmental Law (whether solids,
liquids or gases), including any mixture or solution thereof, and specifically including petroleum
and all fractions, derivatives thereof or synthetic substitutes therefor, polychlorinated
biphenyls, radon gas, urea formaldehyde and asbestos or asbestos-



App. A-3









 




containing materials; provided, however, that the petroleum products, antifreeze, synthetic oils,
solvents, cleaning agents and other products sold in the Ordinary Course of Business which are
transported, stored, sold, distributed, handled, managed and used by an Acquired Company in
compliance with Environmental Laws and Occupational Safety and Health Laws in the Ordinary Course
of Business of any Acquired Company shall not be deemed Hazardous Materials.




     “Intellectual Property” shall have the meaning set forth in Section 4.18.



     “IRC” shall mean the Internal Revenue Code of 1986, as amended, or any successor law.



     “IRS” shall mean the United States Internal Revenue Service or any successor agency.



     “Legal Requirement” shall mean any applicable federal, state, local, municipal,
foreign, international, multinational or other administrative order, constitution, law, ordinance,
principle of common law, regulation, statute or treaty.



     “Material Adverse Effect” or “Material Adverse Change” shall mean any material
adverse effect or change in the financial condition, business, results of operations or liabilities
or prospects of any party, its business and/or assets or on the ability of such party or its
partners, members, stockholders or shareholders, as the case may be, to consummate the
Transactions, or any event or condition which could reasonably be expected to, with the passage of
time, constitute a “Material Adverse Effect” or “Material Adverse Change.”



     “Occupational Safety and Health Law” shall mean any Legal Requirement designed to
provide safe and healthful working conditions and to reduce occupational safety and health hazards,
and any program, whether governmental or private (including those promulgated or sponsored by
industry associations and insurance companies), designed to provide safe and healthful working
conditions.



     “Order” shall mean any award, decision, injunction, judgment, order, warrant, ruling,
consent or other decree, subpoena or verdict entered, issued, made or rendered by any Governmental
Body or by any arbitrator.



     “Ordinary Course of Business” shall describe any action taken by a Person if such
action is consistent with the past practices of such Person and is taken in the ordinary course of
the normal day-to-day operations of such Person.



     “Organizational Documents” shall mean the articles or certificate of incorporation,
all certificates of determination and designation, and the bylaws of a corporation and any
amendments thereto.



     “Person” shall mean any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint venture, estate,
trust, association, organization, labor union or other entity or Governmental Body.



     “Proceeding” shall mean any action, arbitration, audit, hearing, investigation,
litigation or suit (whether civil, criminal, administrative, investigative or informal) commenced,
brought, conducted or heard by or before, or otherwise involving, any Governmental Body or
arbitrator, provided that notice thereof has been given to the Company or the Shareholders.



     “Proprietary Rights Agreement” shall have the meaning set forth in Section 4.17.\



     “Purchase Price Consideration” shall have the meaning set forth in Section 2.2.



App. A-4









 





     “RCRA” shall mean the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901
et seq., as amended.



     “Related Person” shall mean:




     (a) With respect to a particular individual




     (i) each other member of such individual’s Family;




     (ii) any Person that is directly or indirectly controlled by such individual or
one or more members of such individual’s Family;




     (b) With respect to a specified Person other than an individual, any Person that
directly or indirectly controls, is directly or indirectly controlled by, or is directly or
indirectly under common control with such specified Person.



     “Release” shall mean and include any spilling, leaking, pumping, pouring, injecting,
seeping, emitting, discharging, depositing, escaping, leaching, migrating, dumping or other
releasing into the Environment, whether intentional or unintentional, and as otherwise defined in
any Environmental Law.



     “Representative” shall mean any managing member, general partner, officer, director,
principal, attorney, agent, employee, consultant, advisor or other representative, including legal
counsel, accountants and financial advisors with authority to act in such capacity.



     “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder or any successor law.



     “Shareholders” or “Shareholder” shall mean the shareholders of the Company set
forth on Exhibit A, collectively or individually, respectively.



     “Subsidiary” shall mean, with respect to any Person (for the purposes of this
definition, the “Owner”), any corporation or other Person of which securities or other interests
having the power to elect a majority of that corporation’s or other Person’s board of directors or
similar governing body, or otherwise having the power to direct the business and policies of that
corporation or other Person (other than securities or other interests having such power only upon
the happening of a contingency that has not occurred) are held by the Owner or one or more of its
Subsidiaries.



     “Tax” or “Taxes” shall mean any federal, state, local, foreign or other tax,
levy, impost, fee, assessment or other governmental charge, including without limitation income,
estimated income, gross receipts, business, occupation, franchise, property, payroll, personal
property, sales, transfer, use, employment, commercial rent, occupancy, escheat or withholding
taxes, and any premium, together with any interest, penalties and additions in connection with the
foregoing.



     “Tax Return” shall mean any return (including any information return), declaration,
report, estimate, statement, schedule, notice, form or other document or information filed with or
submitted to, or required to be filed with or submitted to, any Governmental Body in connection
with the determination, assessment, collection or payment of any Tax or in connection with the
administration, implementation or enforcement of, or compliance with, any Legal Requirement
relating to any Tax.



App. A-5









 





     “Threatened” shall describe any claim, Proceeding, dispute, action or other matter if
a potential claimant has manifested (orally or in writing) to the Company or any Key Employee an
awareness of and intention to assert such claim, Proceeding, dispute, action or other matter.



     “Transaction Documents” shall mean this Agreement and all instruments executed, filed
or otherwise prepared, exchanged or delivered in accordance with this Agreement.



     “Transactions” shall mean the stock purchase contemplated by this Agreement and the
other transactions contemplated by the Transaction Documents.




App. A-6









 








EXHIBIT A




Share Ownership




	 	 	 	 	 
	 	 	Certificate	 	Number
	 Shareholders	 	Numbers	 	Of Shares
	Truett McCarty
	 	 	 	2,000,000






 









 






EXHIBIT B




Shareholder Release




     The Shareholder on behalf of itself and each of its Related Persons who receive or are
otherwise entitled to receive any Purchase Price Consideration, hereby releases and forever
discharges the Buyer, the Company and each of their respective individual, joint or mutual
Representatives, Affiliates, shareholders, controlling persons, Subsidiaries, successors and
assigns (individually, a “Releasee” and collectively, “Releasees”) from any and all
claims, demands, Proceedings, causes of action, Orders, Contracts, debts and liabilities
whatsoever, whether known or unknown, suspected or unsuspected, both at law and in equity, which
the Shareholder or any of such Related Persons has against the respective Releasees arising on or
prior to the Closing Date, including, but not limited to, any rights to indemnification or
reimbursement from the Company, whether pursuant to the Company’s Organizational Documents,
Contracts or otherwise and whether or not relating to claims pending on, or asserted after, the
Closing Date; provided, however, that nothing contained herein shall operate to release any
obligations or liabilities of Releasees arising (a) in connection with the execution, delivery or
performance or arising under any terms of the Agreement or (b) from any action taken or failed to
be taken after Closing, or (c) under any Contract to which the Shareholder or any of its Related
Persons is a party, excluding any Contracts relating to Shareholders acquisition or ownership of
equity in the Company.



     The Shareholder irrevocably covenants to refrain from asserting any claim or demand, or
commencing, instituting or causing to be commenced, any Proceeding of any kind against any
Releasee, based upon any matter released hereby.



	 	 	 
	 

	 	 
	 

	 	Name: