Document:

Exhibit 10.4 

AGREEMENT

THIS AGREEMENT (“Agreement”) is made effective as of the 8th day of January, 2014, by and between ADVANCED COAL TECHNOLOGY, LLC, a Delaware limited liability company (“ACT”), its majority-controlled subsidiaries, GARY COAL COMPANY, LLC, a West Virginia limited liability company (“Gary Coal”), and GARY PARTNERS, LLC, a West Virginia limited liability company (“Gary Partners” or the “Company”, and together with ACT and Gary Coal, the “ACT Parties”), and BLAZE ENERGY CORP., a Delaware corporation (“Blaze”). All herein collectively referred to as the “Parties”.

RECITALS

WHEREAS, the Company is engaged in, among other things, the business of owning and operating a coal reclamation facility (the “Business”), situated on 906.72 acres, located in McDowell County, Gary, West Virginia (the Property”);

WHEREAS, the Company operates the Business on approximately 322 acres, pursuant to authorization by the West Virginia Department of Environmental Protection (“‘WVDEP”), permit Number 0-20-84 (the “Permit”);

WHEREAS, the WVDEP has temporarily closed the operations of the Business on the Property, for, among other things, delinquent monetary royalties due the WVDEP and specific improvements that need to be made upon the Property;

WHEREAS, Blaze and GreenFields Coal Company LLC were parties to that certain Coal Sales and Services Partnership Agreement, dated October 1, 2013, wherein Blaze and or its assigns was, among other things, granted the right to purchase, process and re-sell coal upon the Property (the “Coal Sales Agreement”).  The Coal Sales Agreement has heretofore been terminated and is no longer in effect.

NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties contained herein, and intending to be legally bound hereby, the Parties hereto hereby agree as follows:

1.

Recitals Incorporated.

The recitals set forth above are restated by this reference.

2.

Term.

This Agreement shall commence as of the date hereof and shall continue until February 1, 2016 (the “Initial Term”). The initial Term shall automatically renew for a like-term, unless the ACT Parties, on the one hand, or Blaze, on the other, gives written notice to the other Party or Parties, as applicable, that it will not renew at least 60 days prior to the end of the Initial Term. The period from the date hereof until the expiration of the Initial Term together with any successive term or earlier termination as provided herein shall be referred to as the “Term”. The Coal Sales Agreement is hereby terminated and without further force or effect and this Agreement shall thereupon remain the exclusive agreement among the parties hereto with respect to the subject matter hereof.  Upon termination of this Agreement, Blaze shall have 90 days to remove any equipment located or installed on the Company’s property. 

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3.

Rights Granted to Blaze; Relationship of Company and Blaze.

Blaze is hereby granted the right to exclusively operate the Business of the Company during the Term, with all rights and privileges to conduct such operations that were being conducted by GreenFields, the former operator of the Business for Gary Partners.  Blaze, at all times, shall be independent of the Company. Legal and equitable beneficial ownership to the Business and all of the Company’s assets, real or personal (the “Assets”), shall at all times remain in the name of the Company during the term of this Agreement, including without limitation, the Permit.  For the avoidance of doubt, the term “Business” excludes the business of the Company related to technology agreements entered into by the Company or their affiliates prior to the date hereof, including any agreements entered into by GreenFields CAST LLC.

4.

Obligations of the Company.

At all times during the Term of this Agreement, the Company shall not, without Blaze’s prior written consent:

(a)

Modify, amend, or do anything to adversely affect any of the Business of the Company;

(b)

Create or incur any indebtedness or other liability or obligation in connection with the Assets of the Company or the Business of the Company;

(c)

Enter into or terminate any lease, agreement, contract or other commitment in connection with the Business;

(d)

Release or create or incur any mortgage, lien or other encumbrance with respect to the Assets of the Company or Business of the Company;

(e)

Sell, abandon or otherwise dispose of any of the accounts of the Company;

(f)

Make any commitment relating to any of the accounts of the Company; or

(g)

Cancel or waive any claim or right with respect to the accounts of the Business.

5.

Additional Agreements of Company.

At all times during the Term of this Agreement, the Company shall:

(a)

Do nothing, and allow nothing to be done (which is within the control of the Company), which will or might cause the Company to operate in an improper or illegal manner.

(b)

Other than a default existing as of the date hereof, not cause default in any of the terms, conditions and obligations of any of the contracts and other agreements of the Company.

(c)

To the extent permissible by law, maintain in full force its Permit and licenses in the State of West Virginia, and comply fully with all laws respecting its formation, existence, activities and operations. The foregoing Paragraph 5(c) presumes the Permit shall be reinstated and refers to such time immediately thereafter and during the Term of this Agreement,

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(d)

Allow Blaze and the employees, attorneys, accountants and other representatives of Blaze full and free access to the Company’s books and records, and all of the facilities of the Company relating to the Business.

(e)

Assist Blaze to name itself as an additional named insured under all policies of insurance and give all notices and present all claims under all policies of insurance in due and timely fashion. All such premiums for insurance being duly paid by Blaze.

6.

Obligations of Blaze.

At all times during the Term of this Agreement, Blaze shall not, without the Company’s prior written consent:

(a)

Create or incur any indebtedness or other liability or obligation in connection with the Assets of the Company or the Business of the Company, except those necessary in the ordinary course of operating the Business;

(b)

Create or incur any mortgage, lien or other encumbrance with respect to the Assets of the Company or Business of the Company;

(c)

Sell, abandon or otherwise dispose of any of the Assets of the Company;

(d)

Make any commitment relating to any of the Assets of the Company; or

(e)

Cancel or waive any claim or right with respect to the Assets of the Business.

7.

Additional Agreements of Blaze.

At all times during the Term of this Agreement, Blaze shall:

(a)

Do nothing, and permit nothing to be done (which is within the control of Blaze), which will or might cause the Company to operate in an improper or illegal manner.

(b)

Not cause default in any of the terms, conditions and obligations of any of the contracts and other agreements of the Company.

(c)

To the extent permissible by law, utilize its best efforts to reinstate the Permit, and thereafter maintain in full force the Permit and licenses in the State of West Virginia in the name of the Company, and comply fully with all laws respecting its formation, existence, activities and operations.

(d)

Allow the Company and the employees, attorneys, accountants and other representatives of the Company full and free access to the Company’s books and records, and all of the facilities of the Company relating to the Business.

(e)

On or before the tenth (10th) day of each calendar month, provide the ACT Parties with an operating report that describes all tonnage processed from the Property, all tonnage sold from the Property and all other tonnage blended, processed and sold at the Property, as well as the amount of capital expenses, operating expenses, sales results, profits and similar information, for the immediately prior full calendar month.

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8.

Billing and Expenses; Profits.

During the Term of this Agreement, the financial affairs of the Business shall be handled as follows: 

(a)

Revenues; Accounts Receivable.  Blaze will be entitled to all revenues generated during the Term of this Agreement, and will invoice all customers in its own name. The Company will be entitled to all accounts receivable existing as of the date of this Agreement, if any.  

(b)

Operating Expenses.  Blaze will be responsible for paying all operating expenses incurred and accrued by the Business during the Term of this Agreement, except that the Company will be responsible for payment of any expenses necessary to reinstate the Permit, whether incurred by Blaze or the Company (“Reinstatement Expenses”), as well as any debts, obligations or payables of the Business existing as of the date of this Agreement (“Company Debt”).  Operating Expenses shall include a royalty in the amount of (i) Five Dollars ($5.00) per ton on all “Coarse” coal processed at the Business, and (ii) Two Dollars ($2.00) per ton on all “Fine” coal processed at the Business payable to Blaze Logistics, LLC up to an amount equal to $1,450,000, plus 12% simple interest (the “Blaze Logistics Royalty”).

(c)

Capital Expenses.  Blaze shall be responsible for making any capital expenditures that it deems necessary to continue the operation of the Business, and shall be entitled to enter into any lease or purchase money financing arrangements it deems necessary to finance such capital expenditures.  

(d)

Net Profits and Net Losses.  “Net Profits” and Net Losses” of the Business during the term of this Agreement shall be determined in accordance with generally accepted accounting principles, except for the following adjustments:  (i) Net Profits and Net Losses shall be calculated without including any revenue or expenses allocable to the Company under this Agreement, such as Reinstatement Expenses, (ii) Net Profits and Net Losses shall not include depreciation or amortization deductions associated with Company property, and (ii) Net Profits and Net Losses shall include depreciation or amortization deductions associated with capital expenditures of Blaze under this Agreement, provided that such capital expenditures shall be depreciated or amortized over the period from the purchase of the asset to the end of the original Term of this Agreement, notwithstanding that generally accepted accounting principles may allow or require a longer time period.  Net Profits shall be calculated at end of each calendar quarter within 45 days after the end of each quarter.  In the event of a dispute between the Company and Blaze as to the calculation of Net Profits and Losses, the decision of Blaze’s independent auditor shall be final and conclusive.

(e)

Division of Net Profits and Losses.  Blaze shall be responsible for any Net Losses of the Business during the Term of this Agreement, subject to its right to recoup Net Losses from Net Profits as described below.  Within 15 days after the calculation of Net Profits and Net Losses for a quarter, Blaze shall pay the Company 50% of any Adjusted Net Profits for the quarter.  “Adjusted Net Profits” for any calendar quarter shall equal the cumulative Net Profits and Net Losses for the Business from the commencement of this Agreement to the end of the calendar quarter for which Net Profits and Net Losses are being calculated, minus the aggregate amount Net Profits for which the Company has paid Blaze its 50% share in prior periods. 

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(f)

Payment of Loans.  Any allocation of Net Profits to the Company pursuant to the prior paragraph shall first be applied to repay any Loans owed by the Company, and after all Loans have been paid in full any allocation of Net Profits shall be paid to the Company.  Notwithstanding the foregoing or any other provision in this Agreement to the contrary, any payments made to Blaze Logistics, LLC on account of the Blaze Logistic Royalty shall be credited against any and all sums due by the Company on account of Loans owed to Blaze.

9.

Approved Company Debt; Existing and Additional Loans; Security Interest.

(a)

The Parties acknowledge and agree that as of the date of this Agreement, Blaze is owed sums in excess of $618,324 by the ACT Parties for loans pursuant to the Coal Sales Agreement (the “Loans”); and

(b)

The Parties additionally agree that all Reinstatement Expenses, Company Debt and obligations of the Company’s affiliates paid for Blaze, in cash or its equivalent, during the Term of this Agreement shall be added to the Loans. The Loans shall at all times be secured by, and Blaze shall have a continuing lien on any and all assets of the Company, now owned or hereinafter acquired, including but not limited to; (i) all Equipment; (ii) all inventory; (iii) all receivables; (iv) all Records; (v) all coal, processed or unprocessed, refined or unrefined; (vi) and all products and proceeds of the foregoing, in any form, including, without limitation, insurance proceeds and all claims against third parties for loss or damage to or destruction of any or all of the foregoing (collectively, the “Collateral”).  The Loans shall not bear interest, and shall be due and payable at the expiration of the Term of this Agreement. 

(c)

The Company will execute, deliver, file and record, in such manner and form as Blaze shall require, or permit Blaze to file and record: (i) a Deed of Trust on the Property in favor of Blaze, (ii) all financing statements, (iii) all carbon, photographic or other reproductions of financing statements or this Agreement (which shall be sufficient as a financing statement hereunder), (iv) all endorsements to title to any vehicles or other Collateral as may be required in order to perfect the security interests therein, and (v) all specific assignments or other papers that may be necessary or desirable, or that Blaze may request, in order to create, preserve, perfect or validate any security interest or to enable Blaze to execute and enforce its rights hereunder with respect to any of the Collateral, Gary Partners hereby appoints Blaze as the Company’s attorney-in-fact to execute and file, in the name and on behalf of the Company, such additional financing statements and other assignments and documents as it may request.

10.

Sale; Good Faith Efforts; Covenants and Restrictions.

The Parties agree that during the Term of this Agreement they shall continue good faith negotiations for the purchase and sale of the Business, through any business combination the Parties deem appropriate (the “Blaze Acquisition Agreement”). ACT and the Company agree not to market or sell the Business to any other parry during the Term of this Agreement without the prior written consent of Blaze.

11.

Additional Provisions.

(a)

No Waiver. This Agreement shall not act as a waiver of any legal rights or claims against either Party;

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(b)

Assignment. The terms of this Agreement shall bind upon and inure to the benefit of the successors and assign of the Parties, and may only be assigned by an entity owned or controlled by Blaze, or an affiliate thereof;

(c)

Amendments. No change, amendment, or modification hereof shall be valid unless it be made in writing and signed by all Parties hereto;

(d)

Governing Law. This Agreement and all matters relating thereto shall be governed by and construed and interpreted in accordance with the laws of the State of South Carolina;

(e)

Business Plan. Blaze has furnished the Company with a business plan (the “Business Plan”) which sets forth a forecast of financial operations for the Company under Blaze’s management for the two year period ending January 31, 2016. In the event the Company fails to achieve 66 2/3% of the projected earnings before interest, taxes and depreciation (“EBITDA”), as set forth in the Management Presentation, for any two consecutive quarters, commencing nine (9) months from the execution of this Agreement, the ACT Parties, on the one hand, and Blaze, on the other, shall each have the right to terminate this Agreement by 30 days written notice to such effect to the other Party or Parties, as applicable, and thereupon the Company shall take such steps as are necessary to transfer the Permit to a new manager. Notwithstanding the foregoing, unless otherwise agreed to by Blaze, the ACT Parties may not terminate this Agreement without first repaying all Loans and Additional Loans as may be due and outstanding to Blaze.

(f)

Execution in Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument, and in making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart;

(g)

Severability. If any term or provision of this Agreement is determined to be illegal, unenforceable, or invalid in whole or in part for any reason, such illegal, unenforceable, or invalid provisions or portion thereof shall be severed from this Agreement, and such provision shall not affect the legality, enforceability, or validity of the remainder of this Agreement. If any provision or part thereof of this Agreement is severed in accordance with the provisions of this Section, then the severed provision shall be replaced, to the extent possible, with a legal, enforceable, and valid provision that is as similar in tenor to the severed provision as is legally possible;

(h)

Interpretation. The language in this Agreement shall be interpreted as to its fair meaning and not strictly for or against any Party; and

(i)

Entire Argument. This Agreement constitutes the entire agreement among the parties hereto and supersede all prior agreements and understandings, oral or written, among the Parties with respect to the subject matter hereof.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

(SIGNATURE PAGE TO FOLLOW)

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COMPANY:

ADVANCED COAL TECHNOLOGY, LLC

By:

__________________________________

Name:

__________________________________

It’s

__________________________________

GARY PARTNERS, LLC

By:

__________________________________

Name:

__________________________________

It’s

__________________________________

BLAZE:

BLAZE ENERGY CORP.

By:

__________________________________

Name:

__________________________________

It’s

__________________________________

 

7Exhibit 10.5

SHARE EXCHANGE AGREEMENT

 

By and Among

 

BMM-EMPIRE, L.L.C.

the “Company”

 

FRANK ROSSO and W. KEITH HALL, 

the “Members” of the Company

 

All collectively, the “Seller”

 

And

 

BLAZE ENERGY CORP.  

the “Purchaser”

 

 

 

 

 

 

 

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SHARE EXCHANGE AGREEMENT

This SHARE EXCHANGE AGREEMENT (this “Agreement”), dated the 5th  day of February 2014, by and among BMM-EMPIRE, L.L.C., a Kentucky limited liability company (the “Company”), Frank Rosso and W. Keith Hall, the members of the Company  (the “Members”, and with the Company, collectively referred to as the “Seller”), and Blaze Energy Corp., a Delaware corporation (the “Purchaser”) (the Purchaser and the Seller being collectively referred to as the “Parties”).

RECITALS

WHEREAS, the Company is a duly authorized Kentucky limited liability company, 

WHEREAS, the Purchaser, pursuant to a Share Exchange Agreement of even date by and among Purchaser, Kentucky Diversified Fuels, LLC, Frank Rosso, W. Keith Hall, Philip Haan and Richard Fons and Middle Fork Development Services LLC and MXP, LLC, as subsidiaries (the “Diversified Agreement”), will acquire that certain coal impoundment real property in Phelps, Kentucky, consisting of approximately 24.68 acres (the “Dotson Fork Site”), described in more detail in that Coal Mine Refuse Evaluation Report prepared by Marshall Miller & Associates, dated October 12, 2012, attached hereto and incorporated (the “Marshall Miller Report”);

WHEREAS, the Company is the owner in fee simple of that certain coal impoundment real property in Phelps, Kentucky, consisting of approximately 43.63 acres, described in more detail in the Marshall Miller Report (the “School House Branch Site”);   

WHEREAS, the Members are the owners of one hundred percent (100%) of the issued and outstanding membership units of the Company (the “Units”); 

WHEREAS, the Purchaser is a duly authorized, publicly held, Delaware corporation, trading over the OTC Markets under the call symbol “BLZE”, doing business at 3350 Americana Terrace, Suite 200, Boise, Idaho 83706;

WHEREAS, the Seller desires to sell, and the Purchaser desires to purchase, by and through an exchange of stock, all of the Seller’s right, title, and interest of the Members in and to one hundred percent (100%) of the Company’s issued and outstanding Units, on the terms and conditions set forth in this Agreement; 

WHEREAS, the parties intend that this be a tax-exempt reorganization under Section 368 of the Internal Revenue Code; and

NOW, THEREFORE, in consideration of the mutual promises, covenants, and representations, warranties, and guarantees herein set forth, the Parties, intending to be legally bound, hereto agree as follows:

I.

DEFINITIONS

1.1

Definitions. As used in this Agreement, the capitalized terms below shall have the following meanings. The singular or plural of such terms shall apply as the context of the Agreement requires.

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“Act” shall mean the Securities Act of 1933, as amended.

“Action” shall mean any and all actions, suits, investigations, proceedings, demands, assessments, audits, judgments and claims (including employment-related claims) relating to the Assets, the Real Property, the Permits, the Business, or any Person.

“Assets” as to the Company shall mean the fixed and operating assets, accounts, the Permits, rights, and entitlements listed on Schedule A, attached hereto and made a part hereof, all of which are owned by the Company.

“Assets” as to the Purchaser shall mean the fixed and operating assets, accounts, the Permits, rights and entitlements listed on Schedule B, attached hereto and made a part hereof, all of which are owned by Purchaser.

“Business” as to the Company shall mean the business of owning and operating the coal mine, otherwise known as the School House Branch Site.

“Business” as to the Purchaser shall mean owning approximately 40,000,000 acres of subsurface coal and coal bed methane rights in the State of West Virginia; the coal bed methane is leased out to CNX Gas Company which is currently extracting and producing coal bed methane gas.

“Closing Date” shall be as defined in Section 2.5 hereof

“Closing” shall mean the closing of the Transactions on the Closing Date.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Company” shall mean BMM-Empire LLC, a Kentucky limited liability company.

“Consents” shall mean any consents required pursuant to this Agreement, as more specifically set forth in the Disclosure Schedule of the Company and Purchaser, attached hereto and made a part hereof. 

“Damages” shall mean any and all damages, losses, obligations, deficiencies, liabilities, claims, encumbrances, penalties, costs, and expenses, including reasonable attorneys' fees and disbursements (including, without limitation, expert and consulting fees, costs and expenses).

“Disclosure Schedule” means the disclosure schedule of Purchaser and Seller to be delivered at or prior to the Closing Date.

“Encumbrances” shall mean any debt, claim, mortgage, assignment, assessment, conditional sale, lease, consignment, bailment, contingent interest, lien, pledge, option, charge, easement, security interest, encumbrance, claim of forfeiture, fine, penalty, or other right, demand or claim of any Person (including any Governmental Authority), excluding liens for Taxes not yet due and payable and minor matters that are not material in amount and that do not materially detract from or limit the use of the Assets, the Permits, or the conduct of the Business.

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“ERISA” shall mean the Federal Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and the related provisions of the Code.

“Financial Statements” shall mean as to the Company the unaudited financial statements of the Company prepared by Seller and presented to the Purchaser pursuant to this Agreement and shall mean as to the Purchaser the unaudited financial statements of Purchaser prepared by Purchaser and presented to Seller pursuant to this Agreement.

“Governmental Authority” shall mean any domestic, federal, state or local department, official, commission, authority, board, bureau, agency or other public body.

“IRS” shall mean the United States Internal Revenue Service.

“Knowledge” or “Belief” (whether such term is capitalized or not).  Knowledge or belief of the Seller shall mean the actual knowledge or belief of any officer or director of the Company or of the Members.  Knowledge or belief of Purchaser shall mean the actual knowledge or belief of each Board of Director of Purchaser.

“Laws” shall mean all federal, state, county, or local laws, statutes, ordinances, regulations and rules applicable to any Person, including, without limitation, all laws, statutes, ordinances, regulations and rules issued by any Governmental Authority, relating to or regulating the Assets, the Business of the Company or the actions of the Parties.

“Members” shall mean Frank Rosso and W. Keith Hall. 

“Orders” shall mean all orders, judgments, writs, injunctions, decrees, authorizations, or awards of any court or administrative body or of any other Governmental Authority, which may be applicable to the Assets, the Permits, and the Business, or to any Person in connection therewith.

“Parties” shall mean the Company, the Purchaser, the Members and the Seller, collectively.

“Permits” shall mean all permits, licenses, and authorizations, and all zoning variances, approvals, consents, orders, agreements with, or other authorizations issued by any Governmental Authority to or affecting the Company in connection with the Assets or the Business.

“Person” shall mean any natural person, corporation, partnership, unincorporated association, limited liability company, trust, joint venture or trade group, the federal, state or local government, any Governmental Authority, or any entity or group that is a part of, or associated with, any of the foregoing.

“Purchase Price” shall be as defined in Section 2.3 hereof.

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“Purchaser” shall mean Blaze Energy Corp., a state of Delaware corporation and unless the context provides otherwise, includes its Subsidiary.

“Purchaser SEC Documents” means all documents filed by the Purchaser with the Securities and Exchange Commission (“SEC”), including an Information and Disclosure Statement prepared pursuant to Rule15c2-(11)(a)(5) up to and including the date of Closing.

“Representative” shall mean any officer, director, principal, attorney, attorney-in-fact, agent, accountant, consultant, or employee of any Party. 

“Securities Laws” shall mean any securities law (other than the Act) of any state, territory, or commonwealth of the United States.

“Seller” shall mean the Person listed as such in the Preamble of this Agreement, each of whom shall execute this Agreement in such capacity. 

“Subsidiary” shall mean Blaze Minerals, LLC.

“Taxes” shall mean all taxes, fees, levies, duties, charges or other like assessments, including, without limitation, any and all income, withholding, gross receipts, excise, real or personal property, asset, sales, use, license, payroll, transaction, capital, net worth, and franchise taxes imposed by or payable to any federal, state, county or local government taxing authority, or any subdivision or agency thereof, including all interest, penalties, or incremental amounts added thereto in accordance with such provisions or by any governmental action. 

“Tax Return” shall mean any report, return, declaration or other information required to be supplied to any taxing authority in connection with Taxes.

“Transactions” shall mean the transactions contemplated under this Agreement and the other instruments and agreements referred to herein.

“Units” shall mean 100 membership units of the Company, issued in the name of the Members, which constitute all of the issued and outstanding units of the Company.

II.

THE SHARE EXCHANGE

2.1

Exchange of Units.  Upon the terms and subject to the conditions of this Agreement, at the Closing (as hereinafter defined), Members will convey, assign, transfer and deliver to Purchaser, and Purchaser will acquire and accept from Members, all right, title and interest in and to the Units, free and clear of any lien, encumbrance, security interest, mortgage, pledge, charge, claim, option, right of first refusal or call, or restriction of any kind (collectively, “Liens”).

2.2

Conveyance.  Such conveyance, assignment, transfer and delivery shall be effected by delivery to the Purchaser of the Units, duly endorsed or accompanied by stock powers duly executed in blank with appropriate transfer stamps, if any, affixed, and any other documents that are necessary to transfer title to the Units to Purchaser, free and clear of any and all Liens.

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2.3

Consideration.  In consideration for the Units, and upon the terms and subject to the conditions of this Agreement, Purchaser will deliver or cause to be delivered Thirty-Eight Million One Hundred Thirty-Six Thousand Six Hundred and Fifty-Seven (38,136,657) duly authorized, validly issued, fully paid and nonassessable shares of common stock of Purchaser (the “Blaze Stock”) to the Members, which shares shall bear a restrictive legend in accordance with Rules 144 and 502 promulgated under the Securities Act of 1933.  

2.4

Transfer Restrictions; Legend.

(a)

The shares of Blaze Stock to be issued to the Members pursuant hereto will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), on the Closing Date and may not be transferred, sold or otherwise disposed of by Members except pursuant to an effective registration statement under the Securities Act or in accordance with an exemption from the registration requirements of the Securities Act.  

(b)

Each certificate representing shares of Blaze Stock issued by Purchaser to the Members in accordance with Section 1.3 shall bear the following legend:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) AND ARE “RESTRICTED SECURITIES” AS THAT TERM IS DEFINED IN RULE 144 UNDER THE ACT, AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY THE HOLDER EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE ACT, AS AMENDED, AND IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS OF ANY STATE WITH RESPECT THERETO OR IN ACCORDANCE WITH AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE AND ALSO MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY THE HOLDER WITHOUT COMPLIANCE WITH THE APPLICABLE SECURITIES AND EXCHANGE COMMISSION RULES AND REGULATIONS

2.5

Closing Schedule.  The Parties intend to close on or before March 31, 2014 (the “Closing Date”), or at such other place or time as the Parties may agree.

2.6

Liabilities to be Assumed.  The Purchaser will not assume, accept and become liable for any the Company debts, liabilities or obligations, or for any Taxes or Encumbrances, affecting the Assets, the Permits, or the Business.

2.7

Collateral Agreements.  Contemporaneous with the Closing, the Parties hereto agree to execute the following agreements in a form mutually agreed upon by the Parties and their counsel at or prior to Closing (which, with this Agreement, shall be collectively referred to as the “Closing Documents”):  

(a)

Warranty Deed (School House Branch);

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(b)

Voting Agreement;

(c)

Opinion of Robert Mottern, Esq.;

(d)

Opinion of Pearlman Schneider LLP; and 

(e)

Resolution of the Board of Directors of the Purchaser approving the execution, delivery and performance of the Closing Documents. 

2.8

Board Representation/Purchaser.  At Closing, the Purchaser agrees to cause its Board of Directors to be reconstituted, pursuant to the terms and conditions of a Voting Agreement, executed of even date herewith, and incorporated herein as part of the Closing Documents. 

2.9

Control of the Company.  At Closing, the board of directors of the Company shall resign, and be replaced with nominees of the Purchaser, as determined at Closing.

III.

REPRESENTATIONS AND WARRANTIES

3.1

Representations and Warranties of the Seller.  The Seller represents and warrants to the Purchaser as follows:

(a)

Organization, Standing and Power.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the state of Kentucky and has all requisite corporate power and authority to own, lease, operate and carry on the Company’s business as it is now being conducted. Other than Kentucky, the Company is not required to be licensed, qualified or authorized as a foreign corporation in any jurisdiction.  The Seller shall deliver to the Purchaser complete and correct copies of the Articles of Organization, the Operating Agreement, and the minute book of the Company.  The minute books of the Company contain an accurate record of meetings of the Company’s Management Committee and of its Members.  All such records have been made available to the Purchaser for inspection prior to Closing.

(b)

Capital Structure and Ownership of the Units.  The Company has authorized One Hundred (100) membership units, all of which are issued and outstanding, and prior to Closing are held exclusively by the Members.  The Units have been duly authorized and validly issued and are fully paid and non-assessable.  The Members owns one hundred (100%) percent of the Units, free and clear of all Taxes and Encumbrances.

(c)

Authority.  This Agreement has been duly authorized by all necessary corporate action of the Company and the Members.  This Agreement has been validly executed and delivered by each of said Parties and constitutes a valid and binding obligation of each of them, enforceable against each of them in accordance with its terms.  The execution, delivery, and performance by the Company and the Members of this Agreement does and will not (1) conflict with, or result in a breach or violation of or default, (or give rise to any right of termination, cancellation or acceleration), under the Operating Agreement or Articles of Organization of the Company, or conflict with, or 

7

result in a breach or violation of, or default under (or give rise to any right of termination, cancellation or acceleration under) any note, bond, mortgage, indenture, lease, license, permit, agreement, Encumbrance, or any other instrument or obligation to which the Company or the Members may be a party, or by which the Company, the Members may be bound; or (2) violate any Law or Order applicable to the Company or the Members.  Except for the Consents to be obtained by the Seller and provided to the Purchaser prior to the Closing Date, which Consents are specifically listed in the Disclosure Schedule, attached hereto and made a part hereof, no consent or approval by any Governmental Authority is required in connection with the execution, delivery, and performance of this Agreement by the Company and the Members.

(d)

Compliance with Law.  The Company possesses all rights, privileges, memberships, licenses, franchises, leases, and Permits which are material to the ownership and operation of the Assets or the conduct of the Business of the Company in all places where such Business is now being conducted. To the best of the knowledge and belief of the Seller, neither the Company nor its Members, officers, directors, or employees has been denied admission or authority to conduct any type of business in any jurisdiction or had a license or qualification to conduct its business in any jurisdiction revoked or suspended, nor to the best of the knowledge and belief of the Seller, is any such action pending or threatened. To the best of the knowledge and belief of the Seller, neither the Company, nor its Members, directors, officers, or employees, is in violation of any applicable Law or Order in connection with the Business of the Company.

(e)

Financial Statements.  Attached as Schedule C hereto and made a part hereof, are the unaudited Financial Statements of the Company for the fiscal years ended December 31, 2012 (if applicable) and 2013. The Financial Statements have been compiled by the Seller's Accountants and are correct and complete, were prepared in accordance with generally accepted accounting principles, are in accordance with the books and records of the Company, have been prepared in accordance with good business practices, consistently applied throughout the periods covered thereby, and fairly present the financial position of the Company, at the respective dates thereof and the results of the Company’s operations for the respective periods then ended. 

(f)

Absence of Material Adverse Change.  Between January 1, 2014 and the date of this Agreement’s Closing, there has been no material adverse change in the condition (financial or otherwise), of the Company, the Units, assets, liabilities, earnings, net worth, business activities, or prospects of the Company, that has not been disclosed to Purchaser in the Disclosure Schedule.  

(g)

Absence of Undisclosed Liabilities.  Between January 1, 2014 and the date of this Agreement’s Closing, except as reflected in the Financial Statements of the Company, the Company has no liabilities of any nature whatsoever, known or unknown, fixed or contingent, except liabilities incurred in the ordinary course of business (which unpaid liabilities incurred other than in the ordinary course do not in the aggregate exceed Fifteen Thousand ($15,000) Dollars.

(h)

Documents Furnished.  The Seller has previously delivered to the Purchaser a list, which is attached hereto as Schedule D and made a part hereof, of the following documents, and a true and complete copy of all documents referred to have been delivered or have or will be made available to the Purchaser or its Representatives for inspection upon reasonable notice:

8

(i)

all instruments representing or providing for any Encumbrance upon the Assets, any outstanding indebtedness of or held by the Company, for money borrowed and all credit agreements and letters of credit to which the Company is a party;

(ii)

all collective bargaining, employment, consulting, termination, executive compensation, incentive compensation, deferred compensation, bonus, profit sharing, retirement, pension, group insurance, liability, death benefit and other agreements plans relating, officers or employees of the Company;

(iii)

the names and current compensation of each director, officer, employee of the Company, whose annual compensation is in excess of $25,000;

(iv)

all interests in real property owned, leased or otherwise used or claimed by the Company and, with respect to each such interest, the amount of any mortgage or lien encumbering any of the same and the nature of any improvements situated thereon; 

(v)

all insurance policies of whatsoever kind now in force held by the Company, or under which the Company, the Assets, the Business, and/or the Company’s officers, directors, employees, and Members are insured in regards to their activities for or on behalf of the Company, together with copies of all claims submitted by, against, or on behalf of the Company, under such policies within the past five (5) years; 

(vi)

all Permits held by the Company, or by any of its Members, directors, officers, and or employees with respect to the Assets or the Business of the Company;

(vii)

all servicing, franchise, warranty, referral, waste brokerage, pending sales, independent contractor, consulting and management agreements to which the Company is a party or pursuant to which the Company is a beneficiary;

(viii)

the names of all pensioned employees of the Company, whose pensions are unfunded or are not paid pursuant to a written Plan or arrangement, and their respective ages and current annual pension rates;

(ix)

all bank accounts, escrow deposit accounts, and safe deposit boxes of the Company, with an identification of the name of the bank, account number and the Persons authorized to draw thereon or having access thereto. The Members will not take any action to change the authorized signatories on the Company’s bank and/or financial accounts;

(x)

the nature and location of, any documentation relating to, any other real estate or other facilities of the Company which have been sold or closed or otherwise terminated within the past five (5) years; 

9

 

(xi)

each other contract or agreement not listed with respect to the above items to which the Company is a party, and which involves or may involve aggregate future payments to or by the Company in excess of Ten Thousand ($10,000) Dollars.  The Seller warrants that the aggregate payments involved under all such contracts or agreements not disclosed in writing to the Purchaser do not exceed in the aggregate Twenty Five Thousand ($25,000) Dollars; 

(xii)

the names of all persons holding powers of attorney, if any, with respect to the Company, or holding proxies, if any, with respect to the Units; and

(xiii)

each notice and all correspondence received by the Company, or any Members, from any Governmental Authority or Taxing Authority, with respect to Assets, the Permits, or the Business, within the past year.  

(i)

Tax Matters.  The Company, to the best of its knowledge and belief, has filed all Tax Returns required to be filed and all Taxes shown by such returns or claimed by any taxing authority to be due and payable have been paid or accrued by the Company and the Members as the case may be.  To their knowledge and belief, no examination of the Tax Returns of the Company has ever been made by the IRS. There are no agreements, waivers or other arrangements providing for extensions of time with respect to the assessment or collection of any unpaid Tax against the Company, nor are there any Orders now pending against the Company in respect of any unpaid Tax, or any matters under discussion with any Governmental Authority relating to any amount of unpaid Taxes.  Except to the extent of any reserves which are specifically reflected on the latest quarterly balance sheets of the Company, heretofore furnished by the Seller to the Purchaser, there are no liabilities to any federal, state or local taxing authority, which is due or which will become due for any period commencing prior to the date of such balance sheets.

(j)

Options, Warrants, etc.  Except as set forth in the Disclosure Schedule and made a part hereof, there are no options, warrants, calls, commitments or agreements of any character to which the Company, or the Members may be a party, or by which any of them is bound, which provides (1) for the issuance or sale of Units or any other class of capital stock of the Company, or any securities representing the right to purchase, acquire, or otherwise receive any such capital stock (including the Units), or (2) the sale or right of first refusal by the Company of any interest in the Assets or the Business of the Company.

(k)

Permits, Licenses, Copyrights, Patents, Trademarks and Trade Names.  The Company and the Members have previously furnished to the Purchaser a list of all Permits, licenses, copyright, patents, trademarks, trade names, service marks and registrations and applications therefor, possessed or used by the Company; all license, copyright, patent, trademark, trade name or service mark license, assignments, or royalty agreements to which the Company is a party; and all contracts with employees or others relating in whole or in part to disclosure, nondisclosure, assignment or patenting of inventions, discoveries, improvements, processes, formulas or other know-how. Such list is set forth in the Disclosure Schedule and made a part hereof. The Company has clear record title to all Permits, licenses, copyrights, patents, trademarks, trade names, service marks and registrations and applications thereof listed on said list; has not entered in to any agreements, contracts or licenses that would impair free and unencumbered use of the items listed.  The Seller does not know of any asserted infringement by the Company, and does not believe that the Company is infringing, upon any copyright, patent, trademark, trade name, or service mark of another Person.  The Permits, licenses, copyrights, patents, trademarks, trade names, and service marks used or possessed by the Company are sufficient to enable it to continue conducting its Business as it is now being conducted.

10

(l)

The Assets.

(i)

The Company has good and marketable title to the Assets listed on Schedule A, all of which are carried on its books and reflected on its latest Financial Statements furnished by Seller to the Purchaser (except personal property sold or otherwise disposed of since the date of such balance sheet in the ordinary course of business and having an aggregate value of not more than Fifteen Thousand ($15,000) Dollars, free and clear of all Encumbrances of any nature whatsoever, except for Encumbrances reflected in such Financial Statements and liens for current Taxes not yet due and payable; and

(ii)

Except as set forth in the Disclosure Schedule, attached hereto and made a part hereof, all Assets used in the Business or operations of the Company, are, in all material respects, in good operation and repair. The character and nature of such Assets are adequate to permit the Company to operate the Business as it is currently being conducted.

(iii)

Except as set forth in the Disclosure Schedule, attached hereto and made a part hereof, are all the excluded assets which are not used in the Business or operation of the Company, which have previously been disposed of by the Company, and disclosed to Purchaser.

(m)

Agreements in Force and Effect.  All contracts, agreements, plans, leases, policies, permits, licenses, and other documents furnished by the Seller to the Purchaser or referred to in any list or schedule or updated schedule furnished by the Seller to the Purchaser are complete, accurate, valid and enforceable in accordance with their respective terms, and at the time of Closing will be in full force and effect. To the best of the knowledge and belief of the Seller, the Company is not in breach of any material provision of, or in default in any material respect under the terms of any such contract, agreement, plan, lease, policy, Permit, license or document to which the Company is a party or under any Law or Order relating thereto.

(n)

Legal Proceedings, etc.  Except as set forth in the Disclosure Schedule attached hereto and made a part hereof, to the best of the knowledge and belief of the Seller, there is no basis for, nor is there any Order, or any legal, equitable, administrative, arbitration or other proceeding or governmental investigation pending or threatened with respect to the Assets, the Permits, or the Business, which, alone or in the aggregate, might result in money damages payable by the Company, or which might result in an injunction against the Company, or the Members, or which might adversely affect the condition (financial or otherwise), Business, operations, prospects, properties, Units, earnings or net worth of the Company.  Neither the Company, nor any of the Members is a party to any agreement or instrument, or subject to any charter or other corporate restrictions or any judgment, Law, Order, writ injunction, decree, rule, regulation, code or ordinance which adversely affects, or might reasonably be expected to adversely affect, the Business, operations, prospects, Assets, the Units or condition (financial or otherwise) of the Company.  

11

 

(o)

Labor Relations.  There are no controversies pending or, to the knowledge of the Seller, threatened between the Company and its Members, directors, officers, employees, or consultants.  The Seller has no knowledge of any organizational efforts respecting employees of the Company presently being made or threatened by or on behalf of any labor organization.  The Company is not in violation of any applicable labor Law or Order with respect to its Business.

(p)

Books and Records.  The books and records of the Company are in all material respects complete and accurate and have been maintained in accordance with good business practices, consistently applied, and all applicable Laws, Orders, and regulations.

(q)

Questionable Payments.  Neither the Company, nor its Members, directors, officers, agents, employees or other persons associated with or active on behalf of the Company have used any corporate funds of the Company for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; made any direct or indirect unlawful payments to foreign or domestic government officials or employees from corporate funds; violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended; established or maintained, or any unlawful or unrecorded fund of corporate monies or other Company assets; made any false or fictitious entries on the books or records of the Company; or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment; or any material favor or gift which is not deductible for Tax purposes.

(r)

Insurance.  All insurance policies listed in the Disclosure Schedule, attached hereto and made a part hereof, are in full force and effect and, to the knowledge and belief of the Seller, adequately insure the Company against risks relating to the Assets, or incurred in the Business.  

(s)

Compliance with ERISA.  To the best of the knowledge and belief of the Seller, the Company is in substantial compliance with the provisions of and regulations under ERISA, and the Code, which are applicable to any pension or other employee benefit plan established or maintained by the Company or to which contributions are made by the Company (the or a “Plan”) and the Company has met all of the funding standards applicable to each Plan, and there exists no event or condition which would permit the institution of proceedings to terminate any Plan under any provision of applicable Law.  The estimated current value of the benefits vested under each Plan does not, and upon termination of such Plan will not, exceed the estimated current value of such Plan’s assets.  The Company has not, with respect to any Plan, engaged in a prohibited transaction, as provided in Section 406 of ERISA or Section 4975(c) of the Code.

(t)

Affiliate Transactions.  Set forth on the Disclosure Schedule are the types of transactions, if any, since January 1, 2014, which have taken place between the Company and the Members, or any Person or entity in which the Members, or any of them, have or has an interest.

12

 

(u)

Deposits.  There is no shortage or deficiency in any account containing funds deposited by or held on behalf of the Company.

(v)

Operations up and until this Agreement’s Closing date:

(i)

The Company has operated its business in substantially the ordinary course, and used its best efforts to preserve intact its present business organization and its relationships with persons having business dealings with it.

(ii)

The Company has not (1) entered into or amended any of the Plans, agreements, arrangements listed in the Disclosure Schedule or made contributions thereto; (2) created or otherwise become liable with respect to any indebtedness for money borrowed (including any guarantee of indebtedness) or purchase money indebtedness; (3) amended its Articles of Organization or Operating Agreement of similar formation agreement; (4) issued, transferred or purchased or contracted to issue, transfer or purchase any Units or membership equity or securities exchangeable for, or convertible into, Units; (5) declared or made any dividend or distribution on its Units or securities exchangeable for, or convertible into, Units; (6) made any capital expenditures, capital additions or capital improvements in excess of $50,000 in the aggregate, except as may be accurately reflected in the books and records of the Company; (7) entered into or assumed or amended any contract or obligation except in the ordinary course of business; or (8) waived any right of substantial value.

(iii)

The Company has maintained its books, accounts and records in accordance with good business practices in the usual, regular and ordinary manner, on a basis consistent with prior years and no changes have been made in accounting practices or procedures.

(w)

Disclosure.  Neither this Agreement nor any document or information furnished to the Purchaser pursuant to this Agreement or in connection with the Transactions contemplated hereby contains any untrue statement of a material fact or omissions of any state a material fact necessary to make the statements contained herein or therein not misleading.

(x)

Environmental Matters.  To the best of the knowledge and belief of the Seller, the Company has obtained all Permits, licenses and other authorizations which are required in connection with the conduct of the Business under regulations relating to pollution or protection of the environment, including federal, state, county and local regulations relating to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes into the environment (including without limitation ambient air, surface water, groundwater, or land), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes.

To the best of the knowledge and belief of the Seller, the Company is in full compliance in the conduct of the Business with all terms and conditions of the required Permits, licenses and authorizations, and is also in full compliance with all other environmental limitations, restrictions, conditions, standards, prohibitions, requirements, obligations, schedules and timetables contained in those laws or contained in any state, Federal or local regulation, code, plan, order, decree, judgment, injunction, notice or demand letter issued, entered, promulgated or approved thereunder.

13

 

 

In connection with the Business, the Seller, to the best of the knowledge and belief of the Seller, is not aware of, nor has the Company, or the Seller received notice of, any past, present or future events, conditions, circumstances, activities, practices, incidents, actions or plans which may interfere with or prevent compliance or continued compliance with those laws or any regulations, code, plan, order, decree, judgment, injunction, notice or demand letter issued, entered, promulgated or approved thereunder, or which may give rise to any common law or legal liability, or otherwise form the basis of any claim, action, demand, suit, proceeding, hearing, study or investigation, based on or related to the, processing, distribution, use, treatment, storage, disposal, transport, or handling, or the emission, discharge, release or threatened release into the environment, of any pollutant, contaminant, chemical, or industrial, toxic, controlled,  or hazardous substance or waste.

To the best of the knowledge and belief of the Seller, there is no civil, criminal or administrative action, suit, demand, claim, hearing, notice or demand letter, notice of violation, investigation, or proceeding pending or threatened against the Company in connection with the conduct of the Business, relating in any way to the foregoing laws or any regulation, code, plan, order, decree, judgment, injunction, notice or demand letter issued, entered, promulgated or approved thereunder.

The Seller agrees to cooperate with the Purchaser in connection with the Purchaser's application for the transfer, renewal or issuance of any Permits, licenses, approvals or other Company owned or used Permits, licenses, or other authorizations or to satisfy any environmental regulatory requirements involving the Business conducted by the Company.

(y)

Purchaser SEC Documents.  The Members represents and warrants that it has read the Purchaser SEC Documents, and has been afforded the opportunity to ask the Purchaser any questions which it desires about the Purchaser's business, financial condition, and corporate history prior to the Closing.

3.2

Representations and Warranties of the Purchaser.  The Purchaser represents and warrants to the Seller as follows:

(a)

Organization, Standing and Power.  The Purchaser is a business corporation duly organized, validly existing and in good standing under the laws of the state of Delaware and has all requisite corporate power and authority to own, lease, operate and carry on the Purchaser’s business as it is now being conducted. Other than West Virginia, the Purchaser is not required to be licensed, qualified or authorized as a foreign corporation in any jurisdiction.  The Purchaser shall deliver to the Seller complete and correct copies of the Articles of Incorporation, the Bylaws, and the minute book of the Purchaser.  The minute books of the Purchaser contain an accurate record of meetings of the Company’s Board of Directors and its shareholders.  All such records have been made available to the Seller for inspection prior to Closing. 

14

(b)

Capital Structure.  The authorized capital stock of the Purchaser consists of Five Hundred Million (500,000,000) shares of the $0.001 par value common stock, of which approximately 222,453,037 shares are issued and are outstanding, and 1,000,000 shares of $0.001 par value preferred stock, of which no shares are issued and outstanding. The Common Stock has been duly authorized and validly issued and is fully paid and non-assessable, except as set forth on the Disclosure Schedule.  

(c)

Authority.  The execution, delivery, and performance of this Agreement, and all related instruments and agreements by the Purchaser have been duly authorized by all necessary corporate action, and will not (1) conflict with or result in any breach or violation of or default (or give rise to any right of termination, cancellation or acceleration) under, the respective By-Laws or Certificate of Incorporation of the Purchaser, or any note, bond, mortgage, indenture, lease, license, permit, agreement or other instrument or obligation to which the Purchaser is a party or by which either of them is bound; or (2) violate any law, order, rule or regulation applicable to the Purchaser.  No consent or approval by any Governmental Authority is required in connection with the execution and delivery of this Agreement by the Purchaser, except such as has been obtained, as more specifically set forth on the Disclosure Schedule, attached hereto and made a part hereof.

(d)

Corporate Issues.  The Blaze Stock issuable to Seller shall (i) have equal ratable rights to dividends from funds legally available therefor, when, as and if declared by the Board of Directors of the Purchaser: (ii) upon the liquidation, dissolution or winding up of the affairs of the Purchaser, after payments have been made to holders of senior securities, if any, the holders of the common stock are entitled to share ratably in all the assets of the Purchaser available for distribution to holders of common stock; and (iii) are entitled to one vote per share in the election of directors and on all other matters which properly come before the shareholders of the Purchaser.

(e)

Compliance with Law.  The Purchaser possesses all rights, privileges, memberships, licenses, franchises, leases, and Permits which are material to the ownership and operation of the Assets or the conduct of the Business of the Purchaser in all places where such Business is now being conducted. To the best of the knowledge and belief of the Purchaser, neither the Purchaser nor its officers, directors, or employees has been denied admission or authority to conduct any type of business in any jurisdiction or had a license or qualification to conduct its business in any jurisdiction revoked or suspended, nor to the best of the knowledge and belief of the Purchaser, is any such action pending or threatened. To the best of the knowledge and belief of the Purchaser, neither the Purchaser, nor its directors, officers, or employees, is in violation of any applicable Law or Order in connection with the Business of the Purchaser.

(f)

Purchaser SEC Documents.  Purchaser is not current with the filing of documents with the SEC pursuant to the Securities Exchange Act of 1934 with the last filing being made in December 2008. The Information and Disclosure Statement prepared by Purchaser pursuant to Rule 15c2-(11)(a)(5) of the Exchange Act and included as Schedule E and made a part hereof is true and accurate in all material respects and does not contain any omissions or misstatements of a material fact.

15

 

(g)

Issuance of Blaze Stock.  The Blaze Stock, upon issuance to the Members, will represent validly issued, fully paid and non-assessable shares of common stock of Purchaser and that the issuance of a certificate representing the Blaze Stock is not in violation of any of the provisions of its Articles of Incorporation or Bylaws, or any agreements, instruments or other obligations entered into by Purchaser.

(h)

Exempt Issuance.  The issuance of the Blaze Stock will be exempt from the registration and prospectus delivery requirements of the Securities Act and from the qualification or registration requirements of any applicable state blue sky or securities laws.

(i)

Investment Company.  Purchaser is not an investment company within the meaning of Section 3 of the Investment Company Act.

(j)

Financial Statements.  Attached as Schedule F hereto and made a part hereof, are the unaudited Financial Statements of the Purchaser for the fiscal years ended December 31, 2012 (if applicable) and 2013. The Financial Statements have been compiled by the Purchaser's Accountants and are correct and complete, were prepared in accordance with generally accepted accounting principles, are in accordance with the books and records of the Purchaser, have been prepared in accordance with good business practices, consistently applied throughout the periods covered thereby, and fairly present the financial position of the Purchaser, at the respective dates thereof and the results of the Purchaser’s operations for the respective periods then ended. 

(k)

Absence of Material Adverse Change.  Between January 1, 2014 and the date of this Agreement’s Closing, there has been no material adverse change in the condition (financial or otherwise), of the Purchaser, assets, liabilities, earnings, net worth, business activities, or prospects of the Purchaser, that has not been disclosed in the Disclosure Schedule.  

(l)

Absence of Undisclosed Liabilities.  Between January 1, 2014 and the date of this Agreement’s Closing, except as reflected in the Financial Statements of the Purchaser and its Subsidiary, the Purchaser and its Subsidiary have no liabilities of any nature whatsoever, known or unknown, fixed or contingent, except liabilities incurred in the ordinary course of business (which unpaid liabilities incurred other than in the ordinary course do not in the aggregate exceed Fifteen Thousand ($15,000) Dollars.

(m)

Documents Furnished.  The Purchaser has previously delivered to the Seller a list, which is attached hereto as Schedule G and made a part hereof, of the following documents, and a true and complete copy of all documents referred to have been delivered or have or will be made available to the Seller or its Representatives for inspection upon reasonable notice:

(i)

all instruments representing or providing for any Encumbrance upon the Assets, any outstanding indebtedness of or held by the Seller, for money borrowed and all credit agreements and letters of credit to which the Seller is a party;

(ii)

all collective bargaining, employment, consulting, termination, executive compensation, incentive compensation, deferred compensation, bonus, profit sharing, retirement, pension, group insurance, liability, death benefit and other agreements plans relating, officers or employees of the Purchaser;

16

 

(iii)

the names and current compensation of each director, officer, employee of the Purchaser, whose annual compensation is in excess of $25,000;

(iv)

all interests in real property owned, leased or otherwise used or claimed by the Purchaser and, with respect to each such interest, the amount of any mortgage or lien encumbering any of the same and the nature of any improvements situated thereon; 

(v)

all insurance policies of whatsoever kind now in force held by the Purchaser, or under which the Purchaser, its Subsidiary, the Assets, the Business, and/or the Purchaser’s officers, directors, employees, and shareholders are insured in regards to their activities for or on behalf of the Purchaser, together with copies of all claims submitted by, against, or on behalf of the Purchaser, under such policies within the past five (5) years; 

(vi)

all Permits held by the Purchaser, or by its Subsidiary, directors, officers, and or employees with respect to the Assets or the Business of the Purchaser;

(vii)

all servicing, franchise, warranty, referral, waste brokerage, pending sales, independent contractor, consulting and management agreements to which the Purchaser is a party or pursuant to which the Purchaser is a beneficiary;

(viii)

the names of all pensioned employees of the Purchaser, whose pensions are unfunded or are not paid pursuant to a written Plan or arrangement, and their respective ages and current annual pension rates;

(ix)

all bank accounts, escrow deposit accounts, and safe deposit boxes of the Purchaser, with an identification of the name of the bank, account number and the Persons authorized to draw thereon or having access thereto. The directors will not take any action to change the authorized signatories on the Purchaser’s bank and/or financial accounts;

(x)

the nature and location of, any documentation relating to, any other real estate or other facilities of the Purchaser which have been sold or closed or otherwise terminated within the past five (5) years; 

(xi)

each other contract or agreement not listed with respect to the above items to which the Purchaser is a party, and which involves or may involve aggregate future payments to or by the Purchaser in excess of Ten Thousand ($10,000) Dollars.  The Purchaser warrants that the aggregate payments involved under all such contracts or agreements not disclosed in writing to the Seller do not exceed in the aggregate Twenty Five Thousand ($25,000) Dollars; 

17

(xii)

the names of all persons holding powers of attorney, if any, with respect to the Purchaser, or holding proxies, if any, with respect to the shares of Purchaser’s common stock; and

(xiii)

each notice and all correspondence received by the Company, or any Members, from any Governmental Authority or Taxing Authority, with respect to Assets, the Permits, or the Business, within the past year.  

(n)

Tax Matters.  The Company and its Subsidiary, to the best of its knowledge and belief, has filed all Tax Returns required to be filed and all Taxes shown by such returns or claimed by any taxing authority to be due and payable have been paid or accrued by the Company and its Subsidiary as the case may be.  To their knowledge and belief, no examination of the Tax Returns of the Company has ever been made by the IRS. There are no agreements, waivers or other arrangements providing for extensions of time with respect to the assessment or collection of any unpaid Tax against the Purchaser, nor are there any Orders now pending against the Company in respect of any unpaid Tax, or any matters under discussion with any Governmental Authority relating to any amount of unpaid Taxes.  Except to the extent of any reserves which are specifically reflected on the latest quarterly balance sheets of the Company, heretofore furnished by the Seller to the Purchaser, there are no liabilities to any federal, state or local taxing authority, which is due or which will become due for any period commencing prior to the date of such balance sheets.

(o)

Options, Warrants, etc.  Except as set forth in the Disclosure Schedule and made a part hereof, there are no options, warrants, calls, commitments or agreements of any character to which the Purchaser, or its officers, directors or employees may be a party, or by which any of them is bound, which provides (1) for the issuance or sale of shares or any other class of capital stock of the Purchaser, or any securities representing the right to purchase, acquire, or otherwise receive any such capital stock, or (2) the sale or right of first refusal by the Purchaser of any interest in the Assets or the Business of the Purchaser.

(p)

Permits, Licenses, Copyrights, Patents, Trademarks and Trade Names.  Purchaser has previously furnished to the Seller a list of all Permits, licenses, copyright, patents, trademarks, trade names, service marks and registrations and applications therefor, possessed or used by the Purchaser; all license, copyright, patent, trademark, trade name or service mark license, assignments, or royalty agreements to which the Purchaser is a party; and all contracts with employees or others relating in whole or in part to disclosure, nondisclosure, assignment or patenting of inventions, discoveries, improvements, processes, formulas or other know-how. Such list is set forth in the Disclosure Schedule and made a part hereof. The Purchaser has clear record title to all Permits, licenses, copyrights, patents, trademarks, trade names, service marks and registrations and applications thereof listed on said Schedule; has not entered in to any agreements, contracts or licenses that would impair free and unencumbered use of the items listed in the Schedule.  The Purchaser does not know of any asserted infringement by the Purchaser, and does not believe that the Purchaser is infringing, upon any copyright, patent, trademark, trade name, or service mark of another Person.  The Permits, licenses, copyrights, patents, trademarks, trade names, and service marks used or possessed by the Purchaser are sufficient to enable it to continue conducting its Business as it is now being conducted.

18

(q)

The Assets.

(i)

The Purchaser has good and marketable title to the Assets listed on Schedule B, all of which are carried on its books and reflected on its latest Financial Statements furnished by Purchaser to the Seller (except personal property sold or otherwise disposed of since the date of such balance sheet in the ordinary course of business and having an aggregate value of not more than Fifteen Thousand ($15,000) Dollars, free and clear of all Encumbrances of any nature whatsoever, except for Encumbrances reflected in such Financial Statements and liens for current Taxes not yet due and payable; and

(iv)

Except as set forth on the Disclosure Schedule attached hereto and made a part hereof, all Assets used in the Business or operations of the Purchaser, are, in all material respects, in good operation and repair. The character and nature of such Assets are adequate to permit the Company to operate the Business as is currently being conducted.

(v)

Set forth in the Disclosure Schedule and made a part hereof, are all the excluded assets which are not used in the Business or operation of the Company, which have previously been disposed of by the Company, and disclosed to Purchaser.

(r)

Agreements in Force and Effect.  All contracts, agreements, plans, leases, policies, permits, licenses, and other documents furnished by the Purchaser to the Seller or referred to in any list or schedule or updated schedule furnished by the Purchaser to the Seller are complete, accurate, valid and enforceable in accordance with their respective terms, and at the time of Closing will be in full force and effect. To the best of the knowledge and belief of the Purchaser, the Purchaser is not in breach of any material provision of, or in default in any material respect under the terms of any such contract, agreement, plan, lease, policy, Permit, license or document to which the Purchaser is a party or under any Law or Order relating thereto.

(s)

Legal Proceedings, etc.  Except as set forth in the Disclosure Schedule attached hereto and made a part hereof, to the best of the knowledge and belief of the Purchaser, there is no basis for, nor is there any Order, or any legal, equitable, administrative, arbitration or other proceeding or governmental investigation pending or threatened with respect to the Assets, the Permits, or the Business, which, alone or in the aggregate, might result in money damages payable by the Purchaser, or which might result in an injunction against the Purchaser, or which might adversely affect the condition (financial or otherwise), Business, operations, prospects, properties, earnings or net worth of the Purchaser.  Purchaser is not a party to any agreement or instrument, or subject to any charter or other corporate restrictions or any judgment, Law, Order, writ injunction, decree, rule, regulation, code or ordinance which adversely affects, or might reasonably be expected to adversely affect, the Business, operations, prospects, Assets, the Units or condition (financial or otherwise) of the Purchaser.  

(t)

Labor Relations.  There are no controversies pending or, to the knowledge of the Purchaser, threatened between the Purchaser and its directors, officers, employees, or consultants.  The Seller has no knowledge of any organizational efforts respecting employees of the Purchaser presently being made or threatened by or on behalf of any labor organization.  The Purchaser is not in violation of any applicable labor Law or Order with respect to its Business.

19

 

(u)

Books and Records.  The books and records of the Purchaser are in all material respects complete and accurate and have been maintained in accordance with good business practices, consistently applied, and all applicable Laws, Orders, and regulations.

(v)

Questionable Payments.  Neither the Purchaser, nor its directors, officers, agents, employees or other persons associated with or active on behalf of the Purchaser have used any corporate funds of the Purchaser for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; made any direct or indirect unlawful payments to foreign or domestic government officials or employees from corporate funds; violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended; established or maintained, or any unlawful or unrecorded fund of corporate monies or other Purchaser assets; made any false or fictitious entries on the books or records of the Purchaser; or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment; or any material favor or gift which is not deductible for Tax purposes.

(w)

Insurance.  All insurance policies listed on the Disclosure Schedule attached hereto and made a part hereof, are in full force and effect and, to the knowledge and belief of the Seller, adequately insure the Purchaser against risks relating to the Assets, or incurred in the Business.  

(x)

Compliance with ERISA.  To the best of the knowledge and belief of the Purchaser, the Company is in substantial compliance with the provisions of and regulations under ERISA, and the Code, which are applicable to any pension or other employee benefit plan established or maintained by the Company or to which contributions are made by the Company (the or a “Plan”) and the Company has met all of the funding standards applicable to each Plan, and there exists no event or condition which would permit the institution of proceedings to terminate any Plan under any provision of applicable Law.  The estimated current value of the benefits vested under each Plan does not, and upon termination of such Plan will not, exceed the estimated current value of such Plan’s assets.  The Company has not, with respect to any Plan, engaged in a prohibited transaction, as provided in Section 406 of ERISA or Section 4975(c) of the Code.

(y)

Deposits.  There is no shortage or deficiency in any account containing funds deposited by or held on behalf of the Purchaser.

(z)

Disclosure.  Neither this Agreement nor any document or information furnished to the Seller pursuant to this Agreement or in connection with the Transactions contemplated hereby contains any untrue statement of a material fact or omissions of any state a material fact necessary to make the statements contained herein or therein not misleading.

(aa)

Environmental Matters.  To the best of the knowledge and belief of the Purchaser, the Purchaser has obtained all Permits, licenses and other authorizations which are required in connection with the conduct of the 

20

 

Business under regulations relating to pollution or protection of the environment, including federal, state, county and local regulations relating to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes into the environment (including without limitation ambient air, surface water, groundwater, or land), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes.

To the best of the knowledge and belief of the Purchaser, the Purchaser is in full compliance in the conduct of the Business with all terms and conditions of the required Permits, licenses and authorizations, and is also in full compliance with all other environmental limitations, restrictions, conditions, standards, prohibitions, requirements, obligations, schedules and timetables contained in those laws or contained in any state, Federal or local regulation, code, plan, order, decree, judgment, injunction, notice or demand letter issued, entered, promulgated or approved thereunder.

In connection with the Business, the Purchaser, to the best of the knowledge and belief of the Purchaser, is not aware of, nor has the Purchaser received notice of, any past, present or future events, conditions, circumstances, activities, practices, incidents, actions or plans which may interfere with or prevent compliance or continued compliance with those laws or any regulations, code, plan, order, decree, judgment, injunction, notice or demand letter issued, entered, promulgated or approved thereunder, or which may give rise to any common law or legal liability, or otherwise form the basis of any claim, action, demand, suit, proceeding, hearing, study or investigation, based on or related to the, processing, distribution, use, treatment, storage, disposal, transport, or handling, or the emission, discharge, release or threatened release into the environment, of any pollutant, contaminant, chemical, or industrial, toxic, controlled,  or hazardous substance or waste.

To the best of the knowledge and belief of the Purchaser, there is no civil, criminal or administrative action, suit, demand, claim, hearing, notice or demand letter, notice of violation, investigation, or proceeding pending or threatened against the Purchaser in connection with the conduct of the Business, relating in any way to the foregoing laws or any regulation, code, plan, order, decree, judgment, injunction, notice or demand letter issued, entered, promulgated or approved thereunder.

The Purchaser agrees to cooperate with the Seller in connection with the Seller's application for the transfer, renewal or issuance of any Permits, licenses, approvals or other Purchaser owned or used Permits, licenses, or other authorizations or to satisfy any environmental regulatory requirements involving the Business conducted by the Purchaser.

(bb)

Purchaser SEC Documents.  The Members represents and warrants that it has read the Purchaser SEC Documents, and has been afforded the opportunity to ask the Purchaser any questions which it desires about the Purchaser's business, financial condition, and corporate history prior to the Closing.

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IV.

COVENANTS AND AGREEMENTS

4.1

Covenants and Agreements of the Seller.  The Seller covenants and agrees with the Purchaser as follows:

(a)

Use of Name.  On and after the Closing Date, the Company and the Purchaser will have the right to use the names and service marks, alone or together with any other similar names.  The Seller will not use and will not authorize any corporation, partnership, entity or other Person (other than the Purchaser) to use in connection with any coal mine or other environmental business the name “School House Branch Site”, alone or together with any other name, or any name which may be confusingly similar thereto, and if the Seller have authorized any such use, the Seller will promptly cause any such corporation, partnership, entity or other Person so using such name to change its name and to cease using the name “School House Branch Site” in any respect.

(b)

Confidentiality.  Neither the Seller nor Purchaser will disclose the terms of the Transactions contemplated by this Agreement and all other documents relating to or delivered in connection herewith, without the prior written consent of the other Party, except to the extent such disclosure is required by Law or an Order, or is made to representatives and advisors to the Parties, who shall be similarly bound.

(c)

Instruments of Transfer.  At the Closing, the Members shall deliver or cause to be delivered to the Purchaser the original stock certificates evidencing the ownership of the Units, each such certificate signed in blank by Members thereof, guaranteed by a bank or other financial institution reasonably acceptable to the Purchaser. On or before the Closing Date, Members will cause the Company to execute and deliver all deeds, assignments, bills of sale, and other instruments and certificates and to take any and all actions necessary (1) to effectively vest in the Purchaser all the right, title and interest of the Members in and to the Units, and (2) to confirm and assure all right title and interest of the Company in and to the Assets, the Permits, and the Business, effective as of the Closing Date.

(d)

Liabilities of the Company.  Other than those liabilities to be expressly assumed by the Purchaser at the Closing, the Purchaser shall not be assuming or be liable for any indebtedness of the Members, the Company.

(e)

Employee Benefit Plan.  Prior to the Closing Date, or as soon after the Closing Date as is possible, the Company will take all action necessary to terminate and liquidate the Company’s Plans, if any.  The Seller will indemnify the Purchaser against, and hold the Purchaser harmless from, all losses, judgments, amounts paid in settlement of action or claims, liabilities, costs, damages and expresses, including but not limited to attorney’s fees, accruing from or resulting by reason of the termination of the Plans.

(f)

Seller’s Cooperation Regarding Purchaser’s Applications.  The Seller will exercise their best efforts to support all of the Purchaser’s applications for Permits with all Governmental Authorities, including the Purchasers’ intended applications and agreements with local Governmental Authorities with respect certain applications with respect to additional permitted waste classifications, and shall take such actions and execute and deliver such further documentation as may be reasonably required by the Purchaser in connection with such matters.

22

 

V.

CONDITIONS TO CLOSING 

5.1

Conditions to the Obligations of the Purchaser.  The obligations of the Purchaser to be performed under this Agreement are subject to the satisfaction of the following conditions on or before the Closing Date, unless otherwise waived in writing by the Purchaser.

(a)

Representations and Warranties.  The representations and warranties of the Seller set forth in Section III hereof shall be true and correct in all material respects as of the Closing Date, as though made on and as of the Closing Date.

(b)

Performance of Obligations.  The Seller shall have performed all obligations, covenants and agreements to be performed by them under this Agreement on or prior to the Closing Date.

(c)

No Adverse Change.  No materially adverse change shall have occurred after the date hereof and remain in effect as of the Closing Date with respect to the condition of the Units or the condition and/or performance of the Assets, the Permits, or the Business being operated by the Company.

(d)

Permits and Environmental Compliance.   The Purchaser shall have obtained an assignment, if required, of all Permits and pending applications of the Company regarding the Assets, the Business, together with the Seller's and the Company’s consent thereto.  The Purchaser shall have obtained, or at its option applied for, all other Permits, licenses, and other authorizations required in connection with the operation of the Assets, including Laws and regulations relating to pollution or protection of the environment, including regulations relating to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes into the environment (including without limitation ambient air, surface water, groundwater, or land), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes.

(e)

Acceptance by the Purchaser.  All actions, proceedings, instruments, opinions and documents required or contemplated by this Agreement shall have been approved by counsel for the Purchaser, which approval shall not be unreasonably withheld or delayed.

(f)

Instruments of Transfer.  The Purchaser shall have received such instruments of sale, assignment, transfer, and conveyance as are necessary to vest in the Purchaser all of the right, title, and interest in the Units.

(g)

Consents.  Members will have taken, and caused the Company to have taken, all actions necessary to obtain any consents or approvals required in connection with the purchase of the Units by the Purchaser. 

23

 

5.2

Conditions to the Obligations of the Seller.  The obligations of the Seller to be performed under this Agreement are subject to the satisfaction on or before the Closing Date of the following conditions unless waived, in writing, by the Purchaser.

(a)

Representations and Warranties.  The representations and warranties of the Purchaser set forth in Section IV hereof shall be true and correct in all material respects as of the Closing Date, as though made on and as of the Closing Date.

(b)

Performance of Obligations.   The Purchaser shall have performed all obligations, covenants, and agreements required to be performed under this Agreement prior to the Closing Date.

(c)

Authorization.  All action necessary to authorize the execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby by the Purchaser shall remain in full force and effect.

VI.

INDEMNITIES

6.1

Indemnity by the Seller.  The Seller agrees to indemnify the Purchaser against and hold harmless from all Damages, including all losses, judgments, amounts in settlement of actions or claims, liabilities, damages, and reasonable costs and expenses, including, but not limited to, attorney’s fees, which accrue from or result by reason of any breach of any of the representations, warranties, covenants, or agreements made or to be performed by the Seller pursuant to this Agreement.

The Seller also agrees that the indemnity provided pursuant to this Section 6.1 shall extend to losses and reasonable costs and expenses, including, but not limited to, attorney’s fees incurred in connection with the defense by the Purchaser of a claim asserted by a third party which, if successful, would constitute a breach by the Members or the Company of any of the representations, warranties, covenants or agreements made or to be performed by the Members or the Company pursuant to this Agreement.

Notwithstanding anything contained herein to the contrary, Purchaser shall not have right to seek indemnification hereunder from Seller unless the aggregate amount of indemnification to which Purchaser is entitled exceeds $75,000, at which time the Seller shall be liable for any amounts over said $75,000.  

6.2

Indemnity by the Purchaser.  The Purchaser agrees to indemnify the Seller against, and hold them harmless from, all Damages, including all losses, judgments, amounts paid in settlement of actions or claims, liabilities, damages and reasonable costs and expenses, including but not limited to, attorney’s fees, which accrue from or result by reason of any breach of any of the representations, warranties, covenants or agreements made or to be performed by the Purchaser pursuant to this Agreement.  The Purchaser shall have no other liability under this provision for any other failure of performance except to the extent that any such misrepresentation or failure of performance is the result of willful misconduct or intentional material misrepresentation.

24

 

The Purchaser also agrees that the foregoing agreement to indemnify shall, as limited above, extend to loses and reasonable costs and expenses, including, but not limited to attorney’s fees incurred in connection with the defense by the Seller of a claim asserted by a third party, which, if successful, would constitute a breach by the Purchaser of any of the representations, warranties, covenants or agreements made or to be performed by the Purchaser pursuant to this Agreement.

6.3

Right to Defend.  Each indemnified party will promptly notify each indemnifying party of any claim, action or proceeding for which indemnification will be sought pursuant to this Agreement, and the indemnifying party or parties will have the right at (his, her or their) expense to assume the defense thereof; provided, however, that the Purchaser shall have the right to participate at their own expense with respect to any such claim, action or proceeding and that no such claim, action or shall be settled without the prior written consent of the Purchaser.  In connection with any such defense, the parties agree to cooperate with each other and to provide each other with access to relevant books and records now or hereafter in their possession or control.

6.4

Compliance with Bulk Sales Laws.  The Purchaser and the Seller hereby waive compliance with the bulk sales laws and any similar laws of the state of Kentucky in respect of the transactions contemplated by this Agreement. The Seller shall indemnify the Purchaser from, and shall hold the Purchaser harmless against, any Encumbrances, Taxes, fees, liabilities, damages, costs, penalties, and expenses (including reasonable attorney’s fees) resulting from or arising out of (1) the Parties’ failure to comply with any of such Laws in respect of the transactions contemplated by this Agreement, or (2) any Order or action proceeding brought or levy made as a result thereof.

6.5

Other Rights and Remedies Not Affected.  The indemnification rights of the Parties under this Article 6 are independent of and in addition to such rights and remedies as the Parties may have at law or in equity or otherwise for any misrepresentation, breach of warranty or failure to fulfill any agreement or covenant hereunder on the part of any party hereto, including without limitation, the right to seek specific performance, rescission, or restitution, none of which rights or remedies shall be affected or diminished hereby.

VII.

MISCELLANEOUS

7.1

Publicity.  All press releases and other publicity and communications relating to the Transactions contemplated by this Agreement, and the method of release thereof, will require the mutual written approval of the Seller and Purchaser.

7.2

Survival.  All representations, warranties, covenants, guarantees, and agreements contained in this Agreement shall remain operative and in full force and effect, regardless of the results of any due diligence investigation made by or on behalf of any Party hereto, and shall survive the Closing Date.

7.3

Descriptive Headings.  Descriptive headings used in this Agreement are for convenience only and shall not control or affect the meaning or construction of any provision of this Agreement.

25

7.4

Notices.  All notices or other communications which are required or permitted hereunder shall be in writing and shall be sufficient if delivered or mailed by either (1) certified express mail, postage paid, returned receipt requested, or (2) express delivery service or hand delivery with proof of such delivery, and shall be effective two business (2) days after such mailing or upon delivery, whichever is earlier, to the following addresses or other such addresses as the appropriate Party may advise each other Party hereto.

 

If to the Purchaser:

To: 

Blaze Energy Corp.

Attn: A. Leon Blaser

3350 Americana Terrace, Suite 200

Boise, Idaho 83706

Phone: 208-352-3492

Facsimile: 888-501-1528

Email: leonblaser@blazeenergycorp.com

With a copy to:

Robert Mottern, Esq.

Investment Law Group of Davis Gillett Mottern & Sims

1230 Peachtree Street, NE, Suite 2445

Atlanta, Georgia 30309

Telephone: 404-607-6933 

Facsimile: 678-840-2126

Email: bmottern@investmentlawgroup.com

If to the Seller:

To:

BMM-Empire, L.L.C.

Attn: Frank Rosso.

2400 East Commercial Blvd, Suite 711

Fort Lauderdale, FL 33309

Telephone: 954-933-3933

Email: Ffrankjrosso@aol.com

With a copy to:

Charles B. Pearlman, Esq.

Pearlman Schneider LLP

2200 Corporate Blvd., NW, Suite 210

Boca Raton, Florida 33431

Telephone: 561-362-9595

Facsimile: 561-362-9612

Email: charlie@pslawgroup.net

7.5

Binding Nature; Assignments.  This Agreement is binding upon, and inures to the benefit of the Parties and their respective heirs, successors and assigns.  This Agreement may not be assigned without the prior written consent of the other Party.

26

 

7.6

Controlling Law.  This Agreement and all questions relating to its validity, interpretation, performance, remediation and enforcement (including, without limitation, provisions concerning limitations of actions) shall be governed by and construed in accordance with the domestic laws of the state of Kentucky, notwithstanding any choice-of-laws doctrines of such jurisdiction or any other jurisdiction which ordinarily would cause the substantive law of another jurisdiction to apply, without the aid of any canon, custom or rule of law requiring construction against the draftsman.

7.7

Venue.  Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement shall be brought against any of the Parties in the courts of the state of Kentucky, or, if it has or can acquire the necessary jurisdiction, in the United States District Court for the applicable District of Kentucky, and each of the Parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein.  Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere in the world.

7.8

Payments.  Payments hereunder, if any, shall be made by checks drawn on clearing house funds.  Payment of all other amounts due to any party under this Agreement will be made in immediately available funds by wire transfer or by certified or cashier’s check.

7.9

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 Agreement.

7.10

Waiver.  The failure of any Party to insist upon strict performance of any of the terms or conditions of this Agreement will not constitute a continuing waiver thereof or of any of such Party’s rights hereunder.

7.11

Severability.  If any provision of this Agreement is held illegal, invalid, or unenforceable, such illegality, invalidity, or unenforceability will not affect any other provisions hereof.  This Agreement shall, in such circumstances, be deemed modified to the extent necessary to render enforceable the remaining provisions hereof.

7.12

Further Actions and Assurances.  The Parties shall execute and deliver such additional documents and shall cause such additional action to be taken, before, on and after the Closing Date, as may be required, necessary or appropriate, to effect or evidence the provisions of this Agreement and the Transactions contemplated hereby, including without limitation all such documents and actions as may be required.

7.13

Fiscal Year of the Purchaser.  The fiscal year of the Company ends on the 31st day of December of each year.  

7.14

Termination by the Purchaser.  This Agreement may be terminated by the Purchaser if any Order, litigation, proceeding, or investigation to restrain or prohibit the consummation of the Transactions contemplated by this Agreement shall have been instituted or threatened prior to the Closing Date or if the Purchaser reasonably believes that the consummation of such Transactions may result in any such Order, litigation, proceeding or investigation.

27

 

7.15

Specific Performance.  The Parties agree that money damages shall not constitute an adequate remedy at law for the Purchaser in the event of the failure by Seller to deliver title to the Units in accordance with this Agreement.  The parties further agree that the Purchaser shall be entitled, at its sole option, to obtain specific performance by the Seller of the obligations hereunder and to seek other equitable remedies with respect to such default by the Seller.

7.16

Expenses.  Each of the Parties shall bear its own expenses in connection herewith, including all accounting, legal, appraisal fees, and settlement charges.  

7.17

Entire Agreement.  This Agreement and the closing documents, exhibits, schedules, and attachments specifically referred to or incorporated herein constitute the entire agreement among the parties hereto and supersede all prior agreements and understandings, oral or written, among the Parties with respect to the subject matter hereof.

IN WITNESS WHEREOF, the parties hereto have duly executed this Stock Purchase Agreement as of the date first written.

THE SELLER:

THE COMPANY:

BMM-EMPIRE, L.L.C.

By:

Name:

Frank Rosso

Its:

Authorized Member

THE MEMBERS:

FRANK ROSSO

By:

KEITH HALL

By:

THE PURCHASER

 

BLAZE ENERGY CORP.

  

28

By:

Name:

A. Leon Blaser

Its:

Chief Executive Officer

 

 

 

 

 

 

 

29

SCHEDULE A

LIST OF ASSETS AS TO THE COMPANY

 

 

 

30

SCHEDULE B

LIST OF ASSETS AS TO THE PURCHASER

School House Branch Site

Real property in Phelps, Kentucky, consisting of approximately 43.63 acres, described in more detail in the Marshall Miller Report  

 

 

 

 

 

 

 

 

31

SCHEDULE C

FINANCIAL STATEMENTS OF THE COMPANY

 

 

 

 

 

 

32

SCHEDULE D

LIST OF COMPANY DOCUMENTS FURNISHED

 

 

 

 

 

 

 

 

33

SCHEDULE E

PURCHASER SEC DOCUMENTS

 

 

 

 

34

SCHEDULE F

FINANCIAL STATEMENTS OF THE PURCHASER

None

 

 

 

 

 

35

SCHEDULE G

LIST OF DOCUMENTS FURNISHED

 

1.  Term Sheet, dated October 23, 2014, between High Ridge Mining, LLC and the Company; 

2.  Warranty Deed of S&K Properties as Grantor and Company as Grantee.  

 

 

 

 

 

36

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