Document:

STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE

 

 

by and among

 

MODENA 2, INC.

 

a Delaware Corporation

 

and

 

EPS, INC.

 

an Arkansas Corporation

 

 

 

 

 

 

 

 

 

 

effective as of May 10, 2005

 

 

 

 

 

 

STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE

 

THIS STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE, made and entered into this May 10, 2005, by and among Modena 2, Inc., a Delaware corporation with its principal place of business located at  1 Innwood Circle, Suite 103, Little Rock, Arkansas 72211 (“Modena”); EPS, Inc., an Arkansas corporation with its principal place of business located at 1 Innwood Circle, Suite 103, Little Rock, Arkansas 72211 (“EPS”) and the shareholders of EPS (“Shareholders”) as set forth on Exhibit A attached hereto (collectively EPS and the shareholders of EPS shall be known as the “EPS Group”). 

 

	
            Premises
 

 

A.        This Agreement provides for the acquisition of EPS whereby EPS shall become a wholly owned subsidiary of Modena and in connection therewith, the issuance of a total of 10,056,000 shares of Modena to the EPS shareholders. 

 

B.        The boards of directors of EPS and MODENA have determined, subject to the terms and conditions set forth in this Agreement, that the transaction contemplated hereby is desirable and in the best interests of their stockholders, respectively. This Agreement is being entered into for the purpose of setting forth the terms and conditions of the proposed acquisition.

 

	
            Agreement
 

 

NOW, THEREFORE, on the stated premises and for and in consideration of the mutual covenants and agreements hereinafter set forth and the mutual benefits to the parties to be derived here from, it is hereby agreed as follows:

 

ARTICLE I

REPRESENTATIONS, COVENANTS AND WARRANTIES OF 

  MODENA

 

As an inducement to and to obtain the reliance of EPS, MODENA represents and warrants as follows:

 

Section 1.1    Organization.  MODENA is a corporation duly organized, validly existing, and in good standing under the laws of Delaware and has the corporate power and is duly authorized, qualified, franchised and licensed under all applicable laws, regulations, ordinances and orders of public authorities to own all of its properties and assets and to carry on its business in all material respects as it is now being conducted, including qualification to do business as a foreign corporation in the jurisdiction in which the character and location of the assets owned by it or the nature of the business transacted by it requires qualification. Included in the Schedules attached hereto (hereinafter defined) are complete and correct copies of the articles of incorporation, bylaws and amendments there to
as in effect on the date hereof. The execution and delivery of this Agreement does not and the consummation of the transactions contemplated by this Agreement in accordance with the terms hereof will not violate any provision of MODENA’s articles of incorporation or bylaws. MODENA has full power, authority and legal right and has taken all action required by law, its articles of incorporation, its bylaws or otherwise to authorize the execution and delivery of this Agreement.

 

 

 

 

Section 1.2    Capitalization.  The authorized capitalization of MODENA consists of 100,000,000 Common Shares, $0.001 par value per share. As of the date hereof, MODENA has 100,000 common shares issued and outstanding. MODENA is presently a 1934 Exchange Act reporting company and has filed all necessary reports, quarterly, annual and special with the Securities and Exchange Commission of the United States on a timely basis. 

 

All issued and outstanding shares are legally issued, fully paid and nonassessable and are not issued in violation of the preemptive or other rights of any person. MODENA has no securities, warrants or options authorized or issued.

 

	
            Section 1.3
 	
            Subsidiaries.
 	
            MODENA has no subsidiaries.
 

 

	
            Section 1.4
 	
            Tax Matters: Books and Records.
 

 

(a)    The books and records, financial and others, of MODENA are in all material respects complete and correct and have been maintained in accordance with good business accounting practices; and

 

(b)     MODENA  has no liabilities with respect to the payment of any country, federal, state, county, or local taxes (including any deficiencies, interest or penalties).

 

(c)     MODENA shall remain responsible for all debts incurred by MODENA prior to the date of closing.

 

Section 1.5    Litigation and Proceedings.  There are no actions, suits, proceedings or investigations pending or threatened by or against or affecting MODENA or its properties, at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign or before any arbitrator of any kind that would have a material adverse affect on the business, operations, financial condition or income of MODENA. MODENA is not in default with respect to any judgment, order, writ, injunction, decree, award, rule or regulation of any court, arbitrator or governmental agency or instrumentality or of any circumstances which, after reasonable investigation, would result in the discovery of such a default.

 

Section 1.6    Material Contract Defaults.              MODENA is not in default in any material respect under the terms of any outstanding contract, agreement, lease or other commitment which is material to the business, operations, properties, assets or condition of MODENA, and there is no event of default in any material respect under any such contract, agreement, lease or other commitment in respect of which MODENA has not taken adequate steps to prevent such a default from occurring.

 

Section 1.7      Information.    The information concerning MODENA as set forth in this Agreement and in the attached Schedules is complete and accurate in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact required to make the statements made in light of the circumstances under which they were made, not misleading. MODENA’s filings with the SEC are complete and accurate in all material respects and do not contain any untrue statement of a material fact or omit to state a material fact required to make the statements made in light of the circumstances under which they were made, not misleading. 

 

 

 

 

Section 1.8       Title and Related Matters.     MODENA has good and marketable title to and is the sole and exclusive owner of all of its properties, inventory, interest in properties and assets, real and personal (collectively, the “Assets”) free and clear of all liens, pledges, charges or encumbrances. MODENA owns free and clear of any liens, claims, encumbrances, royalty interests or other restrictions or limitations of any nature whatsoever and all procedures, techniques, marketing plans, business plans, methods of management or other information utilized in connection with MODENA’s business.  No third party has any right to, and MODENA has not received any notice of infringement of or conflict with asserted rights of other with respect to any product, technology, data, trade secrets, know-how, proprietary techniques, trademarks, service marks,
trade names or copyrights which, singly on in the aggregate, if the subject of an unfavorable decision ruling or finding, would have a materially adverse affect on the business, operations, financial conditions or income of MODENA or any material portion of its properties, assets or rights.

 

	
            Section 1.9  
 	
            Contracts  
 	
            On the closing date:
 

 

(a)   There are no material contracts, agreements franchises, license agreements, or other  commitments to which MODENA is a party or by which it or any of its properties are bound:

 

(b)     MODENA is not a party to any contract, agreement, commitment or instrument or subject to any charter or other corporate restriction or any judgment, order, writ, injunction, decree or award materially and adversely affects, or in the future may (as far as MODENA can now foresee) materially and adversely affect, the business, operations, properties, assets or conditions of MODENA; and

 

(c)    MODENA is not a party to any material oral or written: (I) contract for the employment of any officer or employee; (ii) profit sharing, bonus, deferred compensation, stock option, severance pay, pension benefit or retirement plan, agreement or arrangement covered by Title IV of the Employee Retirement Income Security Act, as amended; (iii)  agreement, contract or indenture relating to the borrowing of money; (iv) guaranty of any obligation for the borrowing of money or otherwise, excluding endorsements made for collection and other guaranties, of obligations, which, in the aggregate exceeds $1,000; (v) consulting or other contract with an unexpired term of more than one year or providing for payments in excess of $10,000 in the aggregate; (vi) collective bargaining agreement; (vii) contract, agreement or other commitment involving payments by it for more than $10,000 in the aggregate.

 

Section  1.10    Compliance With Laws and Regulations.   To the best of MODENA’s knowledge and belief, MODENA has complied with all applicable statutes and regulations of any federal, state or other governmental entity or agency thereof, except to the extent that noncompliance would not materially and adversely affect the business, operations, properties, assets or condition of MODENA or would not result in MODENA incurring material liability.

 

Section 1.11    Insurance.     All of the insurable properties of MODENA are insured for MODENA ‘s benefit under valid and enforceable policy or policies containing substantially equivalent coverage and will be outstanding and in full force at the Closing Date.

 

 

 

 

Section 1.12   Approval of Agreement.   The directors of MODENA have authorized the execution and delivery of the Agreement by and have approved the transactions contemplated hereby.

 

Section 1.13  Material Transactions or Affiliations.   There are no material contracts or agreements of arrangement between MODENA and any person, who was at the time of such contract, agreement or arrangement an officer, director or person owning of record, or known to beneficially own ten percent (10%) or more of the issued and outstanding Common Shares of MODENA and which is to be performed in whole or in part after the date hereof. MODENA has no commitment, whether written or oral, to lend any funds to, borrow any money from or enter into material transactions with any such affiliated person. 

 

Section 1.14  No Conflict With Other Instruments.  The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, or constitute an event of default under, any material indenture, mortgage, deed of trust or other material contract, agreement or instrument to which MODENA  is a party or to which any of its properties or operations are subject.

 

Section 1.15  Governmental Authorizations.       MODENA has all licenses, franchises, permits or other governmental authorizations legally required to enable it to conduct its business in all material respects as conducted on the date hereof. Except for compliance with federal and state securities and corporation laws, as hereinafter provided, no authorization, approval, consent or order of, or registration, declaration or filing with, any court or other governmental body is required in connection with the execution and delivery by MODENA of this Agreement and the consummation of the transactions contemplated hereby.

 

ARTICLE II

REPRESENTATIONS, COVENANTS AND WARRANTIES

OF EPS

 

As an inducement to, and to obtain the reliance of MODENA, EPS represents and warrants as follows:

 

Section 2.1    Organization.               EPS is a corporation duly organized, validly existing and in good standing under the laws of Arkansas and has the corporate power and is duly authorized, qualified, franchised and licensed under all applicable laws, regulations, ordinances and orders of public authorities to own all of its properties and assets and to carry on its business in all material respects as it is now being conducted, including qualification to do business as a foreign entity in the country or states in which the character and location of the assets owned by it or the nature of the business transacted by it requires qualification. Included in the Attached Schedules (as hereinafter defined) are complete and correct
copies of the articles of incorporation, bylaws and amendments thereto as in effect on the date hereof. The execution and delivery of this Agreement does not and the consummation of the transactions contemplated by this Agreement in accordance with the terms hereof will not, violate any provision of EPS’s certificate of incorporation or bylaws. EPS has full power, authority and legal right and has taken all action required by law, its articles of incorporation, bylaws or otherwise to authorize the execution and delivery of this Agreement.

 

 

 

Section 2.2    Capitalization.  The authorized capitalization of EPS consists of 100,000,000 shares of common stock, $0.0001 par value. As of the date hereof, there are 10,056,000 shares of common stock issued and outstanding.

 

All issued and outstanding common shares have been legally issued, fully paid, are nonassessable and not issued in violation of the preemptive rights of any other person. EPS has no other securities, warrants or options authorized or issued.

 

	
            Section 2.3
 	
            Subsidiaries.
 	
            EPS has no subsidiaries.
 

 

	
            Section 2.4
 	
            Tax Matters; Books & Records
 

 

(a)         The books and records, financial and others, of EPS are in all material respects complete and correct and have been maintained in accordance with good business accounting practices; and

 

(b)         EPS has no liabilities with respect to the payment of any country, federal, state, county, local or other taxes (including any deficiencies, interest or penalties). 

 

(c) EPS shall remain responsible for all debts incurred prior to the closing.

 

Section 2.5   Information.  The information concerning EPS as set forth in this Agreement and in the attached Schedules is complete and accurate in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact required to make the statements made, in light of the circumstances under which they were made, not misleading.

 

Section 2.6    Title and Related Matters.   EPS has good and marketable title to and is the sole and exclusive owner of all of its properties, inventory, interests in properties and assets, real and personal (collectively, the “Assets”) free and clear of all liens, pledges, charges or encumbrances. Except as set forth in the Schedules attached hereto, EPS owns free and clear of any liens, claims, encumbrances, royalty interests or other restrictions or limitations of any nature whatsoever and all procedures, techniques, marketing plans, business plans, methods of management or other information utilized in connection with EPS’s business. Except as set forth in the attached Schedules, no third party has any right to, and EPS has not received any notice of infringement of or
conflict with asserted rights of others with respect to any product, technology, data, trade secrets, know-how, proprietary techniques, trademarks, service marks, trade names or copyrights which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a materially adverse affect on the business, operations, financial conditions or income of EPS or any material portion of its properties, assets or rights.

 

Section 2.7    Litigation and Proceedings.          There are no actions, suits or proceedings pending or threatened by or against or affecting EPS, at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign or before any arbitrator of any kind that would have a material adverse effect on the business, operations, financial condition, and income or business prospects of EPS. EPS does not have any knowledge of any default on its part with respect to any judgment, order, writ, injunction, decree, award, rule or regulation of any court, arbitrator or governmental agency or instrumentality.

 

 

 

 

	
            Section 2.8
 	
            Contracts.
 	
            On the Closing Date:
 

 

(a)        There are no material contracts, agreements, franchises, license agreements, or other commitments to which EPS is a party or by which it or any of its properties are bound;

 

 (b)              EPS is not a party to any contract, agreement, commitment or instrument or subject to any charter or other corporate restriction or any judgment, order, writ, injunction, decree or award which materially and adversely affects, or in the future may (as far as EPS can now foresee) materially and adversely affect, the business, operations, properties, assets or conditions of EPS; and 

 

(c)        EPS is not a party to any material oral or written:  (i) contract for the employment of any officer or employee;  (ii) profit sharing, bonus, deferred compensation, stock option, severance pay, pension, benefit or retirement plan, agreement or arrangement covered by Title IV of the Employee Retirement Income Security Act, as amended; (iii) agreement, contract or indenture relating to the borrowing of money;  (iv) guaranty of any obligation for the borrowing of money or otherwise, excluding endorsements made for collection and other guaranties of obligations, which, in the aggregate exceeds $1,000;  (v)  consulting or other contract with an unexpired term of more than one year or providing for payments in excess of $10,000 in the aggregate;  (vi)  collective bargaining agreement; (vii)   contract,
agreement, or other commitment involving payments by it for more than $10,000 in the aggregate.

 

Section 2.9    No Conflict With Other Instruments.   The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, or constitute an event of default under, any material indenture, mortgage, deed of trust or other material contract, agreement or instrument to which EPS is a party or to which any of its properties or operations are subject.

 

Section 2.10  Material Contract Defaults.            To the best of EPS knowledge and belief, it is not in default in any material respect under the terms of any outstanding contract, agreement, lease or other commitment which is material to the business, operations, properties, assets or condition of EPS and there is no event of default in any material respect under any such contract, agreement, lease or other commitment in respect of which EPS has not taken adequate steps to prevent such a default from occurring.

 

Section 2.11 Governmental Authorizations.  To the best of EPS’s knowledge, EPS has all licenses, franchises, permits and other governmental authorizations that are legally required to enable it to conduct its business operations in all material respects as conducted on the date hereof. Except for compliance with federal and state securities or corporation laws, no authorization, approval, consent or order of, or registration, declaration or filing with, any court or other governmental body is required in connection with the execution and delivery by EPS of the transactions contemplated hereby.

 

Section 2.12  Compliance With Laws and Regulations. To the best of EPS’s knowledge and belief, EPS has complied with all applicable statutes and regulations of any federal, state or other governmental entity or agency thereof, except to the extent that 

 

 

noncompliance would not materially and adversely affect the business, operations, properties, assets or condition of EPS or would not result in EPS’s incurring any material liability.

 

Section 2.13 Insurance. All of the insurable properties of EPS are insured for EPS’s benefit under valid and enforceable policy or policies containing substantially equivalent coverage and will be outstanding and in full force at the Closing Date.

 

Section 2.14  Approval of Agreement.    The directors of EPS have authorized the execution and delivery of the Agreement and have approved the transactions contemplated hereby.

 

Section 2.15  Material Transactions or Affiliations.       As of the Closing Date, there will exist no material contract, agreement or arrangement between EPS and any person who was at the time of such contract, agreement or arrangement an officer, director or person owning of record, or known by EPS to own beneficially, ten percent (10%) or more of the issued and outstanding Common Shares of EPS and which is to be performed in whole or in part after the date hereof except with regard to an agreement with EPS shareholders providing for the distribution of cash to provide for payment of federal and state taxes on Subchapter S income. EPS has no commitment, whether written or oral, to lend any funds to, borrow any money from or enter into any other material transactions
with, any such affiliated person.

 

Section 2.16 Filings.  EPS covenants that it will assist MODENA in the preparation of all filings required by the Securities Exchange Act in a timely manner, including but not limited to, the filing of a Form 8K within four (4) days after the execution of this Agreement and the delivery of the audited financial statements for EPS in sufficient time to allow for the filing of an amended 8K with the audited financial statements within sixty (60) days thereafter. 

 

ARTICLE III

EXCHANGE PROCEDURE AND OTHER CONSIDERATION

 

Section 3.1    Share Exchange/Delivery of EPS Securities.      On the Closing Date, the holders of all of the EPS Common shall deliver to MODENA (i) certificates or other documents evidencing all of the issued and outstanding EPS Common Shares, duly endorsed in blank or with executed power attached thereto in transferable form. On the Closing Date, all previously issued and outstanding Common Shares of EPS shall be transferred to MODENA, so that EPS shall become a wholly owned subsidiary of MODENA. 

 

Section 3.2    Issuance of  Modena Common Shares. In exchange for all of the EPS Common tendered pursuant to Section 3.1, MODENA shall issue to the EPS shareholders a total of 10,056,000 at the rate of one (1) MODENA shares for each share of EPS. The shares to be issued to the EPS shareholders are set forth on Schedule A, attached hereto.

 

Section 3.3     Events Prior to Closing. Upon execution hereof or as soon thereafter as practical, management of MODENA and EPS shall execute, acknowledge and deliver (or shall cause to be executed, acknowledged and delivered) any and all certificates, opinions, financial statements, schedules, agreements, resolutions rulings or other instruments required by this Agreement to be so delivered, together with such other items as may be reasonably requested by the parties hereto and their respective legal counsel in order to effectuate or evidence the transactions contemplated hereby, subject only to the conditions to Closing referenced herein below.

 

 

 

 

Section 3.4    Closing.          The closing (“Closing”) of the transactions contemplated by this Agreement shall be on or about May 10, 2005 (“Closing Date”).

 

	
            Section 3.5
 	
            Termination.
 

 

(a)       This Agreement may be terminated by the board of directors or majority interest of Shareholders of either MODENA or EPS, respectively, at any time prior to the Closing Date if:

 

(i)        there shall be any action or proceeding before any court or any governmental body which shall seek to restrain, prohibit or invalidate the transactions contemplated by this Agreement and which, in the judgment of such board of directors, made in good faith and based on the advice of its legal counsel, makes it inadvisable to proceed with the exchange contemplated by this Agreement; or 

 

(ii) any of the transactions contemplated hereby are disapproved by any regulatory authority whose approval is required to consummate such transactions.

 

In the event of termination pursuant to this paragraph (a) of this Section 3.5, no obligation, right, or liability shall arise hereunder and each party shall bear all of the expenses incurred by it in connection with the negotiation, drafting and execution of this Agreement and the transactions herein contemplated.

 

(b)      This Agreement may be terminated at any time prior to the Closing Date by action of the board of directors of MODENA if EPS shall fail to comply in any material respect with any of its covenants or agreements contained in this Agreement or if any of the representations or warranties of EPS contained herein shall be inaccurate in any material respect, which noncompliance or inaccuracy is not cured after 20 days written notice thereof is given to EPS. If this Agreement is terminated pursuant to this paragraph (b) of this Section 3.5, this Agreement shall be of no further force or effect and no obligation, right or liability shall arise hereunder.

 

(c)     This Agreement may be terminated at any time prior to the Closing Date by action of the board of directors of EPS if MODENA shall fail to comply in any material respect with any of its covenants or agreements contained in this Agreement or if any of the representations or warranties of MODENA contained herein shall be inaccurate in any material respect, which noncompliance or inaccuracy is not cured after 20 days written notice thereof is given to MODENA. If this Agreement is terminated pursuant to this paragraph (d) of this Section 3.5, this Agreement shall be of no further force or effect and no obligation, right or liability shall arise hereunder.

 

In the event of termination pursuant to paragraph (b) and (c) of this Section 3.5, the breaching party shall bear all of the expenses incurred by the other party in connection with the negotiation, drafting and execution of this Agreement and the transactions herein contemplated.

 

 

 

 

ARTICLE IV

SPECIAL COVENANTS

 

Section 4.1   Access to Properties and Records.    Prior to closing, MODENA and EPS will each afford to the officers and authorized representatives of the other full access to the properties, books and records of each other, in order that each may have full opportunity to make such reasonable investigation as it shall desire to make of the affairs of the other and each will furnish the other with such additional financial and operating data and other information as to the business and properties of each other, as the other shall from time to time reasonably request.

 

Section 4.2   Availability of Rule 144. MODENA and EPS shareholders holding “restricted securities,” as that term is defined in Rule 144 promulgated pursuant to the Securities Act will remain as “restricted securities”. MODENA is under no obligation to register such shares under the Securities Act, or otherwise. The stockholders of MODENA and EPS holding restricted securities of MODENA and EPS as of the date of this Agreement and their respective heirs, administrators, personal representatives, successors and assigns, are intended third party beneficiaries of the provisions set forth herein. The covenants set forth in this Section 4.2 shall survive the Closing and the consummation of the transactions herein contemplated.

 

Section 4.3    Special Covenants and Representations Regarding the MODENA Common Shares to be Issued in the Exchange. The consummation of this Agreement, including the issuance of the MODENA Common Shares to the Shareholders of EPS as contemplated hereby, constitutes the offer and sale of securities under the Securities Act, and applicable state statutes. Such transaction shall be consummated in reliance on exemptions from the registration and prospectus delivery requirements of such statutes which depend, inter alia, upon the circumstances under which the EPS Shareholders acquire such securities. 

 

Section 4.4   Third Party Consents.    MODENA and EPS agree to cooperate with each other in order to obtain any required third party consents to this Agreement and the transactions herein contemplated.

 

	
            Section 4.5
 	
            Actions Prior and Subsequent to Closing.
 

 

 (a)       From and after the date of this Agreement until the Closing Date, except as permitted or contemplated by this Agreement, MODENA and EPS will each use its best efforts to:

 

	
            (i)
 	
            maintain and keep its properties in states of good repair and condition as at present, except for depreciation due to ordinary wear and tear and damage due to casualty;
 
	
            (ii)
 	
            maintain in full force and effect insurance comparable in amount and in scope of coverage to that now maintained by it;
 
	
            (iii)
 	
            perform in all material respects all of its obligations under material contracts, leases and instruments relating to or affecting its assets, properties and business;
 

 

 (b)       From and after the date of this Agreement until the Closing Date, MODENA will not, without the prior consent of EPS:

 

 

 

 

	
            (i)
 	
            except as otherwise specifically set forth herein, make any change in its articles of incorporation or bylaws;
 
	
            (ii)
 	
            declare or pay any dividend on its outstanding Common Shares, except as may otherwise be required by law, or effect any stock split or otherwise change its capitalization, except as provided herein;
 
	
            (iii)
 	
            enter into or amend any employment, severance or agreements or arrangements with any directors or officers;
 
	
            (iv)
 	
            grant, confer or award any options, warrants, conversion rights or other rights not existing on the date hereof to acquire any Common Shares; or 
 

	
            (v)
 	
            purchase or redeem any Common Shares.
 

 

	
            Section 4.6
 	
            Indemnification.
 

 

(a)           MODENA hereby agrees to indemnify EPS, each of the officers, agents and directors and current shareholders of EPS as of the Closing Date against any loss, liability, claim, damage or expense (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened or any claim whatsoever), to which it or they may become subject to or rising out of or based on any inaccuracy appearing in or misrepresentation made in this Agreement. The indemnification provided for in this paragraph shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement; and 

 

(b) EPS hereby agrees to indemnify MODENA, each of the officers, agents, directors and current shareholders of MODENA as of the Closing Date against any loss, liability, claim, damage or expense (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened or any claim whatsoever), to which it or they may become subject arising out of or based on any inaccuracy appearing in or misrepresentation made in this Agreement. The indemnification provided for in this paragraph shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement.

 

ARTICLE V

CONDITIONS PRECEDENT TO OBLIGATIONS OF MODENA

 

The obligations of MODENA under this Agreement are subject to the satisfaction, at or before the Closing Date, of the following conditions:

 

Section 5.1   Accuracy of Representations. The representations and warranties made by MODENA in this Agreement were true when made and shall be true at the Closing Date with the same force and effect as if such representations and warranties were made at the Closing Date (except for changes therein permitted by this Agreement), and MODENA shall have performed or compiled with all covenants and conditions required by this Agreement to be performed or complied with by MODENA prior to or at the Closing.  EPS shall be furnished with a certificate, signed by a duly authorized officer of MODENA and dated the Closing Date, to the foregoing effect.

 

 

 

Section 5.2    Director Approval.    The Board of Directors of MODENA shall have approved this Agreement and the transactions contemplated herein.

 

Section 5.3    Officer’s Certificate.              EPS shall have been furnished with a certificate dated the Closing Date and signed by a duly authorized officer of MODENA to the effect that:  (a) the representations and warranties of MODENA set forth in the Agreement and in all Exhibits, Schedules and other documents furnished in connection herewith are in all material respects true and correct as if made on the Effective Date;  (b)  MODENA has performed all covenants, satisfied all conditions, and complied with all other terms and provisions of this Agreement to be performed, satisfied or complied with by it as of the Effective Date;  (c)  since such date and other than as previously disclosed to  MTL, MODENA has not entered into
any material transaction other than transactions which are usual and  in the ordinary course if its business; and  (d) no litigation, proceeding, investigation or inquiry is pending or, to the best knowledge of MODENA, threatened, which might result in an action to enjoin or prevent the consummation of the transactions contemplated by this Agreement or, to the extent not disclosed in the MODENA Schedules, by or against MODENA which might result in any material adverse change in any of the assets, properties, business or operations of MODENA.

 

Section 5.4    No Material Adverse Change.        Prior to the Closing Date, there shall not have occurred any material adverse change in the financial condition, business or operations of nor shall any event have occurred which, with the lapse of time or the giving of notice, may cause or create any material adverse change in the financial condition, business or operations of MODENA.

 

Section 5.5    Other Items.      EPS shall have received such further documents, certificates or instruments relating to the transactions contemplated hereby as EPS may reasonably request.

 

ARTICLE VI

CONDITIONS PRECEDENT TO OBLIGATIONS OF EPS

 

The obligations of EPS under this Agreement are subject to the satisfaction, at or before the Closing date (unless otherwise indicated herein), of the following conditions:

 

Section 6.1    Accuracy of Representations.        The representations and warranties made by EPS in this Agreement were true when made and shall be true as of the Closing Date (except for changes therein permitted by this Agreement) with the same force and effect as if such representations and warranties were made at and as of the Closing Date, and EPS shall have performed and complied with all covenants and conditions required by this Agreement to be performed or complied with by EPS prior to or at the Closing. MODENA shall have been furnished with a certificate, signed by a duly authorized executive officer of EPS and dated the Closing Date, to the foregoing effect.

 

Section 6.2     Director Approval.  The Board of Directors of EPS shall have approved this Agreement and the transactions contemplated herein.

 

Section 6.3    Officer’s Certificate.                     MODENA shall be furnished with a certificate dated the Closing date and signed by a duly authorized officer of EPS to the effect that:  (a) the representations and warranties of EPS set forth in the Agreement and in all Exhibits, Schedules and other documents furnished in connection herewith are in all material respects true and 

 

 

correct as if made on the Effective Date; and (b) EPS had performed all covenants, satisfied all conditions, and complied with all other terms and provisions of the Agreement to be performed, satisfied or complied with by it as of the Effective Date.

 

Section 6.4    No Material Adverse Change.  Prior to the Closing Date, there shall not have occurred any material adverse change in the financial condition, business or operations of nor shall any event have occurred which, with the lapse of time or the giving of notice, may cause or create any material adverse change in the financial condition, business or operations of EPS.

 

ARTICLE VII

MISCELLANEOUS

 

Section 7.1    Brokers and Finders.   Each party hereto hereby represents and warrants that it is under no obligation, express or implied, to pay certain finders in connection with the bringing of the parties together in the negotiation, execution, or consummation of this Agreement. The parties each agree to indemnify the other against any claim by any third person for any commission, brokerage or finder’s fee or other payment with respect to this Agreement or the transactions contemplated hereby based on any alleged agreement or understanding between the indemnifying party and such third person, whether express or implied from the actions of the indemnifying party.

 

Section 7.2    Law, Forum and Jurisdiction.         This Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware, United States of America.

 

Section 7.3    Notices.         Any notices or other communications required or permitted hereunder shall be sufficiently given if personally delivered to it or sent by registered mail or certified mail, postage prepaid, or by prepaid telegram addressed as follows:

 

	
            If to MODENA:
 	
            Gary Moore
 	
             

	
             
	
            1 Innwood Circle, Suite 103
 

Little Rock, Arkansas 72211

 

	
            If to EPS:
 	
            Gary Moore
 	
             

	
             
	
            1 Innwood Circle, Suite 103
 

Little Rock, Arkansas 72211

 

or such other addresses as shall be furnished in writing by any party in the manner for giving notices hereunder, and any such notice or communication shall be deemed to have been given as of  the date so delivered, mailed or telegraphed.

 

Section 7.4    Attorneys’ Fees.       In the event that any party institutes any action or suit to enforce this Agreement or to secure relief from any default hereunder or breach hereof, the breaching party or parties shall reimburse the non-breaching party or parties for all costs, including reasonable attorneys’ fees, incurred in connection therewith and in enforcing or collecting any judgment rendered therein.

 

 

 

 

Section 7.5    Confidentiality.         Each party hereto agrees with the other party that, unless and until the transactions contemplated by this Agreement have been consummated, they and their representatives will hold in strict confidence all data and information obtained with respect to another party or any subsidiary thereof from any representative, officer, director or employee, or from any books or records or from personal inspection, of such other party, and shall not use such data or information or disclose the same to others, except:  (i)  to the extent such data is a matter of public knowledge or is required by law to be published; and (ii)  to the extent that such data or information must be used or disclosed in order to consummate the
transactions contemplated by this Agreement.

 

Section 7.6    Schedules; Knowledge.    Each party is presumed to have full knowledge of all information set forth in the other party’s schedules delivered pursuant to this Agreement.

 

Section 7.7    Third Party Beneficiaries.   This contract is solely between MODENA and EPS and except as specifically provided, no director, officer, stockholder, employee, agent, independent contractor or any other person or entity shall be deemed to be a third party beneficiary of this Agreement.

 

Section 7.8    Entire Agreement.    This Agreement represents the entire agreement between the parties relating to the subject matter hereof. This Agreement alone fully and completely expresses the agreement of the parties relating to the subject matter hereof. There are no other courses of dealing, understanding, agreements, representations or warranties, written or oral, except as set forth herein. This Agreement may not be amended or modified, except by a written agreement signed by all parties hereto.

 

Section 7.9    Survival; Termination.         The representations, warranties and covenants of the respective parties shall survive the Closing Date and the consummation of the transactions herein contemplated for 18 months.

 

Section 7.10  Counterparts.            This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which taken together shall be but a single instrument.

 

Section 7.11   Amendment or Waiver.       Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing. At any time prior to the Closing Date, this Agreement may be amended by a writing signed by all parties hereto, with respect to any of the terms contained herein, and any term or condition of this Agreement may be waived or the time for performance hereof may be extended by a writing signed by the party or parties for whose benefit the provision is intended.

 

Section 7.12  Expenses.      Each party herein shall bear all of their respective cost s and expenses incurred in connection with the negotiation of this Agreement and in the consummation of the transactions provided for herein and the preparation thereof.

 

Section 7.13  Headings; Context.  The headings of the sections and paragraphs contained in this Agreement are for convenience of reference only and do not form a part hereof and in no way modify, interpret or construe the meaning of this Agreement.

 

 

 

Section 7.14  Benefit.          This Agreement shall be binding upon and shall inure only to the benefit of the parties hereto, and their permitted assigns hereunder. This Agreement shall not be assigned by any party without the prior written consent of the other party. 

 

Section 7.15  Public Announcements.       Except as may be required by law, neither party shall make any public announcement or filing with respect to the transactions provided for herein without the prior consent of the other party hereto.

 

Section 7.16  Severability.  In the event that any particular provision or provisions of this Agreement or the other agreements contained herein shall for any reason hereafter be determined to be unenforceable, or in violation of any law, governmental order or regulation, such unenforceability or violation shall not affect the remaining provisions of such agreements, which shall continue in full force and effect and be binding upon the respective parties hereto.

 

Section 7.17  Failure of Conditions; Termination.           In the event of any of the conditions specified in this Agreement shall not be fulfilled on or before the Closing Date, either of the parties have the right either to proceed or, upon prompt written notice to the other, to terminate and rescind this Agreement. In such event, the party that has failed to fulfill the conditions specified in this Agreement will liable for the other party’s legal fees. The election to proceed shall not affect the right of such electing party reasonably to require the other party to continue to use its efforts to fulfill the unmet conditions.

 

Section 7.18  No Strict Construction.        The language of this Agreement shall be construed as a whole, according to its fair meaning and intendment, and not strictly for or against either party hereto, regardless of who drafted or was principally responsible for drafting the Agreement or terms or conditions hereof.

 

Section 7.19  Execution Knowing and Voluntary.            In executing this Agreement, the parties severally acknowledge and represent that each:  (a) has fully and carefully read and considered this Agreement; (b) has been or has had the opportunity to be fully apprized by its attorneys of the legal effect and meaning of this document and all terms and conditions hereof;  (c) is executing this Agreement voluntarily, free from any influence, coercion or duress of any kind.

 

Section 7.20   Amendment.  At any time after the Closing Date, this Agreement may be amended by a writing signed by both parties, with respect to any of the terms contained herein, and any term or condition of this Agreement may be waived or the time for performance hereof may be extended by a writing signed by the party or parties for whose benefit the provision is intended.

 

Section 7.21  Conflict of Interest.  Both EPS and MODENA understand that Anslow & Jaclin, LLP is representing both parties in this transaction which represents a conflict of interest. Both EPS and MODENA have the right to different counsel due to this conflict of interest. Notwithstanding the above, both EPS and MODENA agrees to waive this conflict and have Anslow & Jaclin, LLP represent both parties in the above-referenced transaction. Both EPS and MODENA agree to hold this law firm harmless from any and all liabilities that may occur or arise due to this conflict.

 

 

 

 

 

 

 

[THIS SPACE INTENTIONALLY LEFT BLANK]

 

 

 

 

 

IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement to be executed by their respective officers, hereunto duly authorized, and entered into as of the date first above written.

 

 

	
            ATTEST:  
 	
            MODENA 2, INC.
 

 

 

	
            ______________________________
 	
            By: /s/  Gary Moore
 

 

 

 

	
            ATTEST:
 	
            EPS, INC.
 

 

 

	
            _________________________
 	
            By: /s/  Gary Moore
 

 

 

EPS, INC. SHAREHOLDERS

 

 

	
            __________________________
 	
            By: /s/  Gary Moore
 

 

	
            __________________________
 	
            By: /s/  Don Bratcher
 

 

 

	
            __________________________
 	
            By: /s/  Dick Torti
 

 

 

	
            __________________________
 	
            __________________________________
 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE A

 

 

	
            James V. Webb
 	
            1,000 
 
	
            Amanda Islom
 	
            1,000 
 
	
            Dale H. Snyder
 	
            1,000 
 
	
            John R. Braziel
 	
            1,000 
 
	
            Brad Kennedy
 	
            1,000 
 
	
            Spencer Sands
 	
            5,000 
 
	
            Ralph Thomann
 	
            1,000 
 
	
            William R. Kemp
 	
            1,000 
 
	
            Randy Moore
 	
            1,000 
 
	
            Richard T. Halinski, Jr.
 	
            1,000 
 
	
            D. A. Nesselrodt
 	
            1,000 
 
	
            Judy Watts
 	
            1,000 
 
	
            Randy Baste
 	
            1,000 
 
	
            David M. Good
 	
            1,000 
 
	
            Joan Leathers
 	
            50,000 
 
	
            Jimmy Carden
 	
            10,000 
 
	
            Emre Umar
 	
            1,000 
 
	
            John M. Compton
 	
            1,000 
 
	
            Robert A. Blackwood, Jr.
 	
            1,000 
 
	
            Eunice A. Moore
 	
            250,000 
 
	
            Mindy France
 	
            1,000 
 
	
            Dr. Henry Good
 	
            2,000 
 
	
            Mark B. Yarborough
 	
            250,000 
 
	
            Robert M. Uebanks III
 	
            1,000 
 
	
            Henry H. Good III
 	
            60,000 
 
	
            Charlotte Sands
 	
            55,000 
 
	
            Bill Rife
 	
             
 
	
            Dan Rife
 	
            1,000 
 
	
            Richard DeWese
 	
            1,000 
 
	
            William D. Joyce Jr.
 	
            1,000 
 
	
            R. N. Reddy
 	
            2,000 
 
	
            Randy O. DeWese
 	
            1,000 
 
	
            Gregg E. Jaclin
 	
            50,000 
 
	
            Richard I. Anslow
 	
            50,000 
 
	
            Dicky Torti
 	
            3,000,000 
 
	
            Richy Torti
 	
            250,000 
 
	
            Gary Moore
 	
            3,000,000 
 
	
            Don Bratcher
 	
            3,000,000EX-10..1

SECURED PROMISSORY NOTE

	 	 	 
	$250,000.00

	 	Raleigh, North Carolina

June 1, 2005

FOR VALUE RECEIVED, Timeline, Inc., a Washington corporation (the “Borrower”), promises to pay to
Global Software, Inc., a North Carolina corporation (the “Holder”), or its successors or assigns,
the principal sum of Two Hundred Fifty Thousand Dollars ($250,000.00) (the “Principal Amount”)
together with interest accruing from the date hereof at a rate of six percent (6%) per annum on the
unpaid balance until paid or until default, payable in lawful money of the United States of
America. This Secured Promissory Note (this “Note”) is issued by the Borrower to the Holder in
connection with that certain Letter of Intent between the parties dated as of May 6, 2005 (the
“Letter of Intent”). Any capitalized term not otherwise defined herein shall have the meaning
ascribed to such term in the Letter of Intent.

The Principal Amount and accrued interest outstanding under this Note shall be repaid upon the
earlier of (i) July 31, 2005, (ii) the Closing, or (ii) the termination of either the Letter of
Intent or the definitive purchase agreement contemplated by the Letter of Intent (each a “Maturity
Date,” and each payment thereupon a “Principal Payment”). Notwithstanding the foregoing, on the
Maturity Date, Borrower may, at Borrower’s election, repay the unpaid Principal Amount and accrued
interest as is outstanding as of the Maturity Date, in four (4) successive and equal quarterly
payments in each quarter following the Maturity Date as provided below (each a “Post Maturity Date
Payment,” and together with a Principal Payment, the “Payment”); provided, however, that after the
Maturity Date, interest on the outstanding Principal Amount shall accrue at the rate of eight
percent (8%) per annum. Each Post Maturity Date Payment shall be payable by the Borrower on the
final business day of each fiscal quarter following the Maturity Date, and each Post Maturity Date
Payment shall be made by check, money order or wire transfer to an account designated by the
Holder. Any amount under this Note may be prepaid in full or in part at any time without penalty
or premium.

In the event of (a) any default in making any Payment hereunder as the same becomes due, and if
such default is not cured within ten (10) days following the date on which such Payment was due;
(b) the filing of a petition by or against (which has not been stayed or dismissed within 60 days
following the filing of such petition) the Borrower under any provisions of the Bankruptcy Reform
Act, Title 11 of the United States Code, as amended or recodified from time to time, or under any
similar or other law relating to bankruptcy, insolvency, reorganization or other relief for
debtors; the appointment of a receiver, trustee, custodian or liquidator of or for any part of the
assets or property of the Borrower; the execution by the Borrower of a general assignment for the
benefit of creditors; the insolvency of the Borrower or the Borrower is generally not paying its
debts as they become due; (c) the occurrence of an event of default or material breach by the
Borrower under the Letter of Intent or the definitive purchase agreement contemplated thereby and
such breach or event of default continues uncured after a period of 30-days after the occurrence
thereof; or (d) the occurrence of a material breach by the Borrower under that certain Security
Agreement of even date herewith (the “Security Agreement”); then the Holder may, without further
notice, declare the remainder of all outstanding principal and interest under this Note at once due
and payable. Failure to exercise this option shall not constitute a waiver of the right to
exercise the same at any other time.

All parties to this Note, including maker and any sureties, endorsers, or guarantors hereby waive
protest, presentment, notice of dishonor, and notice of acceleration of maturity and agree to
continue to remain bound for the payment of principal and all other sums due under this Note
notwithstanding any change or changes by way of release, surrender, exchange, modification or
substitution of any security for this Note or by way of any extension or extensions of time for the
payment of principal; and all such parties waive all and every kind of notice of such change or
changes and agree that the same may be made without notice or consent of any of them.

Upon any default by the Borrower hereunder, the Holder may employ an attorney to enforce the
Holder’s rights and remedies and the Borrower as well as any guarantors and endorsers of this Note
hereby agree to pay to the Holder reasonable attorneys fees, plus all other reasonable expenses
incurred by the Holder in exercising any of the Holder’s rights and remedies upon default. The
rights and remedies of the Holder as provided in this Note shall be cumulative and may be pursued
singly, successively, or together against any funds, property or security held by the Holder for
payment or security, in the sole discretion of the Holder. The failure to exercise any such right
or remedy shall not be a waiver or release of such rights or remedies or the right to exercise any
of them at another time.

This Note shall be secured by a blanket first priority lien on all of the assets of the Borrower,
which lien shall be created by the Security Agreement and evidenced by the appropriate Uniform
Commercial Code filing(s) as applicable. The Holder shall have recourse to the assets to satisfy
Borrower’s obligations hereunder. Such lien shall be terminated upon payment in full of the debt
owed under this Note.

In the event of any inconsistencies between the terms of this Note and the terms of any other
document related to the loan evidenced by the Note, the terms of this Note shall prevail.

This Note shall be governed and construed in accordance with the laws of the State of North
Carolina.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

1

IN TESTIMONY WHEREOF, the undersigned has executed this instrument as of the day and year first

above written.

BORROWER:

Timeline, Inc.

By:  /s/ Charles R. Osenbaugh

	 	 	 	Name: Charles R. Osenbaugh

Its: Chief Executive Officer

2

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