Document:

ex1017.htm

Exhibit 10.17

 

AMENDED AND RESTATED

PLACEMENT AGENCY AGREEMENT

 

February   8, 2012                                                            

 

Tripoint Global Equities, LLC

17 State Street

Suite 2000

New York, New York 10004

Ladies and Gentlemen:

 

Introduction.  Whereas an original Placement Agency Agreement was entered into on February 2, 2012, subject to the terms and conditions therein (the “Original Agreement”), Trellis Earth Products, Inc., a Nevada corporation (the “Company”), hereby agrees to use its best efforts to sell up to an aggregate of $8,000,000.00 (the “Maximum”) of registered securities (the “Securities”) of the Company, including, but not limited to, Common Stock (the "Common Stock ”), and common share purchase warrants (the “ Warrants ” and, together with the Common Stock, and the shares of common stock underlying the Warrants, the “ Securities ”) directly to various investors (each, an “ Investor ” and, collectively, the “ Investors ”) through Tripoint Global Equities, LLC, as placement agent (“ Tripoint ” or the “ Placement Agent ”).   The Placement Agent may retain other brokers or dealers to act as sub-agents or selected-dealers on its behalf in connection with the Offering (as defined below).  The Company and the Placement Agent have since determined to clarify certain terms of the Original Agreement and therefore are amending and restating the Original Agreement in its entirety.

 

The Company hereby restates and confirms its agreement with the Placement Agent as follows:

 

Section 1.            Agreement to Act as Placement Agent.

 

(a)           On the basis of the representations, warranties and agreements of the Company herein contained, and subject to all the terms and conditions of this Agreement, the Placement Agent shall be the exclusive Placement Agent in connection with the offering and sale by the Company of the Securities pursuant to the Company's Registration Statement (as defined below), with the terms of such offering (the “ Offering ”) to be subject to market conditions and negotiations between the Company, the Placement Agent and the prospective Investors.  The Placement Agent will act on a reasonable best efforts basis and the Company agrees and acknowledges that there is no guarantee of the successful placement of the Securities, or any portion thereof, in the prospective Offering.  Under no circumstances will the Placement Agent or any of its “Affiliates” (as defined below) be obligated to underwrite or purchase any of the Securities for its own account or otherwise provide any financing.  The Placement Agent shall act solely as the Company’s agent and not as principal.  The Placement Agent shall have no authority to bind the Company with respect to any prospective offer to purchase Securities and the Company shall have the sole right to accept offers to purchase Securities and may reject any such offer, in whole or in part.  Subject to the terms and conditions hereof, payment of the purchase price for, and delivery of, the Securities shall be made at one or more closings (each a “ Closing ” and the date on which each Closing occurs, a “ Closing Date ”).  As compensation for services rendered, on each Closing Date, the Company shall pay to the Placement Agent the fees and expenses set forth below:

 

(i)           A cash fee equal to 10% of the gross proceeds received by the Company from the sale of the Securities at the Closing.

(ii)            Warrants for the purchase of an amount equal to 10% of the securities issued in the Offering (the “Placement Agent Warrants”).  The Placement Agent Warrants will have a strike price equal to the Offering price, have a term of three years and be exercisable for cash, unless the cashless exercise right as set forth herein is available.  As per FINRA Rule 5110(g)(1), for a period of six months after the issuance date of the Placement Agent Warrants, neither the Placement Agent Warrants nor any warrant shares issued upon exercise of the Placement Agent Warrants shall be (A) sold, transferred, assigned, pledged, or hypothecated, or (B) the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days immediately following the date of effectiveness or commencement of sales of the offering pursuant to which the compensation warrants are being issued, except the transfer of any security as permitted by FINRA rules.  Additionally, the Placement Agent shall be able to exercise the Placement Agent Warrants via a cashless exercise if, at any time during the term of the Placement Agent Warrants, they are not registered in an effective registration statement or they are included in a registration statement that ceases to be effective for any duration of time during the Placement Agent Warrants’ term. 

 

 (iii)          Subject to compliance with FINRA Rule 5110(f)(2)(D), the Company also agrees to reimburse Tripoint’s expenses equal to 1.5% of the aggregate gross proceeds raised in the Offering (exclusive of the fees of Placement Agent’s counsel, as set forth in Section 6(x)) (provided, however, that such expense cap in no way limits or impairs the indemnification and contribution provisions of this Agreement).  Such reimbursement shall be payable immediately upon (but only in the event of) a Closing of the Offering.

 

(b)           The term of the Placement Agent's exclusive engagement will be until the earlier of (i) 12 months from the date hereof or (ii) completion of the Offering (the “ Exclusive Term ”);   provided ,  however , that a party hereto may terminate the engagement with respect to itself at any time upon 10 days written notice to the other parties.   Notwithstanding anything to the contrary contained herein, the provisions concerning confidentiality, indemnification and contribution contained herein and the Company’s obligations contained in the indemnification provisions will survive any expiration or termination of this Agreement, and the Company’s obligation to pay fees actually earned and payable and to reimburse expenses actually incurred and reimbursable pursuant to Section 1 hereof and which are permitted to be reimbursed under FINRA Rule 5110(f)(2)(D), will survive any expiration or termination of this Agreement.  Nothing in this Agreement shall be construed to limit the ability of the Placement Agent or its Affiliates to pursue, investigate, analyze, invest in, or engage in investment banking, financial advisory or any other business relationship with Persons (as defined below) other than the Company. As used herein (i) “Persons” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind and (ii) “Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule 405 under the Securities Act of 1933, as amended (the “Securities Act”).

 

 

 

  

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(c)           If during the Exclusive Term, or within twelve months after the date of termination or expiration of this Agreement, securities are sold by the Company to investors identified to the Company or contacted by Tripoint on behalf of the Company, then the Company shall pay to Tripoint, at the time of each such sale, the fees set forth in this Section 1 with respect to any such sale.  Upon termination of this Agreement and at the request of the Company, Tripoint will provide the Company with a list of investors identified and/or contacted by Tripoint in its capacity as placement agent hereunder.

 

Section 2.            Representations, Warranties and Covenants of the Company.  The Company hereby represents, warrants and covenants to the Placement Agent as of the date hereof, and as of each Closing Date, as follows:

 

(a)           Securities Law Filings.  The Company has filed with the Securities and Exchange Commission (the “ Commission ”) a registration statement on Form S-1 (Registration File No. 333-176970) under the Securities Act and the rules and regulations (the “ Rules and Regulations ”) of the Commission promulgated thereunder.  At the time of such filing, the Company met the requirements of Form S-1 under the Securities Act.  The Company will file with the Commission pursuant to Rules 430A and/or 424(b) under the Securities Act, a final prospectus included in such registration statement relating to the offering of the Securities and the plan of distribution thereof and has advised the Placement Agent of all further information (financial and other) with respect to the Company required to be set forth therein. Such registration statement, including the exhibits thereto, as amended at the date of this Agreement, is hereinafter called the “ Registration Statement ”; such prospectus in the form in which it appears in the Registration Statement is hereinafter called the “ Base Prospectus ”; and the amended or supplemented form of prospectus, in the form in which it will be filed with the Commission pursuant to Rules 430A and/or 424(b) (including the Base Prospectus as so amended or supplemented) is hereinafter called the “ Prospectus Supplement .”  All references in this Agreement to financial statements and schedules and other information that is “contained,” “included,” “described,” “referenced,” “set forth” or “stated” in the Registration Statement, the Base Prospectus or the Prospectus Supplement (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information that is or is deemed to be incorporated by reference in the Registration Statement, the Base Prospectus or the Prospectus Supplement, as the case may be.  Following FINRA approval of the compensation arrangements set forth in Section 1, the Company has no reason to believe that the Registration Statement will not be declared effective by the Commission. 

 

(b)           Assurances.  The Registration Statement (and any further documents to be filed with the Commission) contains all exhibits and schedules as required by the Securities Act.  Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material respects with the Securities Act and the applicable Rules and Regulations and did not and, as amended or supplemented, if applicable, will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.  The Base Prospectus, and the Prospectus Supplement, each as of its respective date, comply in all material respects with the Securities Act and the applicable Rules and Regulations.  Each of the Base Prospectus and the Prospectus Supplement, as amended or supplemented, did not and will not contain as of the date thereof any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  No post-effective amendment to the Registration Statement reflecting any facts or events arising after the date thereof which represent, individually or in the aggregate, a fundamental change in the information set forth therein is required to be filed with the Commission.  There are no documents required to be filed with the Commission in connection with the transaction contemplated hereby that (x) have not been filed as required pursuant to the Securities Act or (y) will not be filed within the requisite time period.  There are no contracts or other documents required to be described in the Base Prospectus, or Prospectus Supplement, or to be filed as exhibits or schedules to the Registration Statement, that have not been described or filed as required.   The Company will not, without the prior consent of the Placement Agent, prepare, use or refer to, any free writing prospectus.

 

(c)           Offering Materials.  The Company has delivered, or will as promptly as practicable deliver, to the Placement Agent complete conformed copies of the Registration Statement and of each consent and certificate of experts, as applicable, filed as a part thereof, and conformed copies of the Registration Statement (without exhibits), the Base Prospectus, and the Prospectus Supplement, as amended or supplemented, in such quantities and at such places as the Placement Agent reasonably requests.  Neither the Company nor any of its directors and officers has distributed and none of them will distribute, prior to the Closing Date, any offering material in connection with the offering and sale of the Shares other than the Base Prospectus, the Prospectus Supplement, the Registration Statement, and any other materials permitted by the Securities Act.

 

(d)           Subsidiaries.  All of the direct and indirect subsidiaries of the Company (the “ Subsidiaries ”) are set forth in the exhibits to the Registration Statement.  Except as described in the Base Prospectus and Prospectus Supplement, the Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any liens, charges, security interests, encumbrances, rights of first refusal, preemptive rights or other restrictions (collectively, “ Liens ”), and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.

 

(e)           Organization and Qualification.  The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing (where applicable) under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.  Neither the Company nor any Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents.  Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of this Agreement or any other agreement entered into between the Company and the Investors, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under this Agreement or the transactions contemplated under the Prospectus Supplement (any of (i), (ii) or (iii), a “ Material Adverse Effect ”) and no action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened (“ Proceeding ”) has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

(f)           Authorization; Enforcement.  The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and the Prospectus Supplement and otherwise to carry out its obligations hereunder and thereunder.  The execution and delivery of each of this Agreement by the Company and the consummation by it of the transactions contemplated hereby and thereby and under the Prospectus Supplement have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Company’s Board of Directors (the “ Board of Directors ”) or the Company’s shareholders in connection therewith other than in connection with the Required Approvals (as defined below).  This Agreement has been duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

 

 

  

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(g)           No Conflicts.  The execution, delivery and performance by the Company of this Agreement and the transactions contemplated pursuant to the Prospectus Supplement, the issuance and sale of the Securities and the consummation by the Company of the transactions contemplated hereby and thereby to which it is a party do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not reasonably be expected to result in a Material Adverse Effect.

 

(h)           Filings, Consents and Approvals.  The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of this Agreement and the transactions contemplated pursuant to the Prospectus Supplement, other than: (i) the filing with the Commission of the Prospectus Supplement,  and (ii) such filings as are required to be made under applicable state securities laws (collectively, the “ Required Approvals ”).

 

(i)            Issuance of the Securities; Registration.  The Securities are duly authorized and, when issued and paid for in accordance with the Prospectus Supplement, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company.  The shares underlying the Warrants (the “ Warrant Shares ”), when issued in accordance with the terms of the Warrants, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company.  The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to the Prospectus Supplement. 

(j)           Capitalization.  The capitalization of the Company is as set forth in the Prospectus Supplement.  The Company has not issued any capital stock since the date of filing of its latest periodic report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or, in the event that the Company is not required to file periodic reports pursuant to Section 13(a) or 15(d) of the Exchange Act, the Company has not issued any capital stock since the date of filing of the Prospectus Supplement, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time any Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock (“ Common Stock Equivalents ”) outstanding as of the date of the filing of the Prospectus Supplement.  No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by this Agreement and the transactions contemplated pursuant to the Prospectus Supplement.  Except as a result of the purchase and sale of the Securities and except for stock options issued pursuant to the Company's stock option plans, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents.  Except as disclosed in the Registration Statement, the issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Investors) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. All of the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.  No further approval or authorization of any shareholder, the Board of Directors or others is required for the issuance and sale of the Securities.  There are no shareholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s shareholders.

 

(k)           SEC Reports; Financial Statements.  The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “ SEC Reports ”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension.  As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing.  Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“ GAAP ”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

(l)            Material Changes; Undisclosed Events, Liabilities or Developments.  Since the date of the latest audited financial statements included within the Registration Statement, except as specifically disclosed in the Registration Statement, the Prospectus Supplement or a subsequent SEC Report filed prior to the date hereof, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its shareholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans.  The Company does not have pending before the Commission any request for confidential treatment of information.  Except for the issuance of the Securities contemplated by the Prospectus Supplement or disclosed in the Prospectus Supplement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective business, prospects, properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is made.

 

 

 

  

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(m)           Litigation.  There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “ Action ”) which (i) adversely affects or challenges the legality, validity or enforceability of any of this Agreement and the transactions contemplated pursuant to the Prospectus Supplement or the Securities or (ii) could, if there were an unfavorable decision, reasonably be expected to result in a Material Adverse Effect.  Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.  There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company.  The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.

 

(n)           Labor Relations.  No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect.  None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good.  No executive officer, to the knowledge of the Company, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters.  The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 

(o)           Compliance.  Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or governmental body or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not reasonably be expected to result in a Material Adverse Effect.

 

(p)           Regulatory Permits.  The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“ Material Permits ”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.

 

(q)           Title to Assets.  The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for Liens disclosed in the Prospectus Supplement, Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties.  Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.

 

(r)           Patents and Trademarks.  The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or material for use in connection with their respective businesses as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “ Intellectual Property Rights ”).  None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement.  Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the Registration Statement, a notice (written or otherwise) of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as would not have a Material Adverse Effect.  To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights.  The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(s)           Insurance.  The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage.  Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

 

(t)            Transactions With Affiliates and Employees.  Except as set forth in the Registration Statement or the SEC Reports, none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.

 

(u)           Sarbanes-Oxley; Internal Accounting Controls.  The Company is in compliance in all material respects with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of each Closing Date.  The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.  The Company’s certifying officers have evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by the Company’s most recently filed periodic report under the Exchange Act (such date, the “ Evaluation Date ”).  If it is currently required to file periodic reports under Section 13(a) or 15(d) of the Exchange Act, the Company has presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date.  Since the Evaluation Date, there have been no changes in the Company’s internal control over financial reporting (as such term is defined in the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

(v)           Certain Fees.  Except as set forth in the Prospectus Supplement, no brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement and the transactions contemplated pursuant to the Prospectus Supplement.  The Investors shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by this Agreement and the transactions contemplated pursuant to the Prospectus Supplement.

 

 

 

  

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(w)           Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.  The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the Investment Company Act of 1940, as amended.

 

(x)           Registration Rights.  No Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company.

 

(y)           Reserved.

 

(z)           Application of Takeover Protections.  The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Investors as a result of the Investors and the Company fulfilling their obligations or exercising their rights under this Agreement and the transactions contemplated pursuant to the Prospectus Supplement, including without limitation as a result of the Company’s issuance of the Securities and the Investors’ ownership of the Securities.

 

(aa)         Disclosure.  Except with respect to the material terms and conditions of the transactions contemplated by this Agreement and the transactions contemplated pursuant to the Prospectus Supplement, the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Investors or their agents or counsel with any information that it believes constitutes or might constitute material, non-public information which is not otherwise disclosed in the Prospectus Supplement.   The Company understands and confirms that the Investors will rely on the foregoing representation in effecting transactions in securities of the Company.  All of the disclosure furnished by or on behalf of the Company to the Investors regarding the Company, its business and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.  The press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made and when made, not misleading.

(bb)         No Integrated Offering.  Neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of any applicable shareholder approval provisions of any trading market on which any of the securities of the Company are listed or designated.

 

(cc)         Solvency.  Based on the consolidated financial condition of the Company as of each Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid.  The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).  The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from each Closing Date.  The Base Prospectus sets forth as of September 30, 2011 all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments.  For the purposes of this Agreement, “ Indebtedness ” means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP.  Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

 

(dd)         Tax Status.  Except for matters that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, the Company and each Subsidiary (i) has made or filed all United States federal and state income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply.  There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim.

 

(ee)         Foreign Corrupt Practices.  Neither the Company, nor to the knowledge of the Company, any agent or other person acting on behalf of the Company, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

(ff)           Accountants.  The Company’s accounting firm is set forth in the Base Prospectus.  To the knowledge and belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the year ending December 31, 2011.

 

(gg)         Regulation M Compliance.  The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement agent in connection with the placement of the Securities.

 

(hh)         Office of Foreign Assets Control.  Neither the Company nor, to the Company's knowledge, any director, officer, agent, employee or affiliate of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“ OFAC ”).

 

(ii)           U.S. Real Property Holding Corporation.  The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Investor’s request.

 

(jj)           Bank Holding Company Act.  Neither the Company nor any of its Subsidiaries is subject to the Bank Holding Company Act of 1956, as amended (the “ BHCA ”) and to regulation by the Board of Governors of the Federal Reserve System (the “ Federal Reserve ”).  Neither the Company nor any of its Subsidiaries owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.  Neither the Company nor any of its Subsidiaries exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

 

(kk)         Money Laundering.  The operations of the Company are and have been conducted at all times in compliance in all material respects with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “ Money Laundering Laws ”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

 

(ll)           Certificates.  Any certificate signed by an officer of the Company and delivered to the Placement Agent or to counsel for the Placement Agent shall be deemed to be a representation and warranty by the Company to the Placement Agent as to the matters set forth therein.

 

 (mm)       Reliance.  The Company acknowledges that the Placement Agent will rely upon the accuracy and truthfulness of the foregoing representations and warranties and hereby consents to such reliance.

 

(nn)         Forward-Looking Statements.   No forward-looking statements (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in either the Registration Statement, the Base Prospectus or the Prospectus Supplement has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

 

(oo)         Statistical or Market-Related Data.  Any statistical, industry-related and market-related data included or incorporated by reference in the Registration Statement, the Base Prospectus or the Prospectus Supplement, are based on or derived from sources that the Company reasonably and in good faith believes to be reliable and accurate, and such data agree with the sources from which they are derived.

 

(pp)         FINRA Affiliations.  Except as set forth on Schedule 2(pp), there are no affiliations with any FINRA member firm among the Company’s officers, directors or, to the knowledge of the Company, except as set forth on  Schedule 2(pp), any five percent (5%) or greater shareholder of the Company.

 

(qq)         No Incorporation by Reference.  No documents are incorporated by reference in the Base Prospectus or the Prospectus Supplement pursuant to Item 12 of Form S-1 which were filed under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”).

 

Section 3.            Delivery and Payment.  Each Closing shall occur at the offices of the Placement Agent (or at such other place as shall be agreed upon by the Placement Agent and the Company).  Subject to the terms and conditions hereof, at each Closing payment of the purchase price for the Securities sold on such Closing Date shall be made by Federal Funds wire transfer, against delivery of such Securities, and such Securities shall be registered in such name or names and shall be in such denominations, as the Placement Agent may request at least one business day before the time of purchase (as defined below).

 

 

 

  

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Deliveries of the documents with respect to the purchase of the Securities, if any, shall be made at the offices of Placement Agent.   All actions taken at a Closing shall be deemed to have occurred simultaneously.

 

Section 4.            Covenants and Agreements of the Company.  The Company further covenants and agrees with the Placement Agent as follows:

 

(a)           Registration Statement Matters.  The Company will advise the Placement Agent promptly after it receives notice thereof of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to any Prospectus Supplement or any amended Prospectus Supplement has been filed and will furnish the Placement Agent with copies thereof.  The Company will file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 14 or 15(d) of the Exchange Act subsequent to the date of any Prospectus Supplement and for so long as the delivery of a prospectus is required in connection with the Offering.  The Company will advise the Placement Agent, promptly after it receives notice thereof (i) of any request by the Commission to amend the Registration Statement or to amend or supplement any Prospectus Supplement or for additional information, and (ii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto or any order preventing or suspending the use of the Base Prospectus or any Prospectus Supplement or any amendment or supplement thereto or any post-effective amendment to the Registration Statement, of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, of the institution or threatened institution of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or a Prospectus Supplement or for additional information. The Company shall use its best efforts to prevent the issuance of any such stop order or prevention or suspension of such use.  If the Commission shall enter any such stop order or order or notice of prevention or suspension at any time, the Company will use its best efforts to obtain the lifting of such order at the earliest possible moment, or will file a new registration statement and use its best efforts to have such new registration statement declared effective as soon as practicable.  Additionally, the Company agrees that it shall comply with the provisions of Rules 424(b), 430A, 430B and 430C, as applicable, under the Securities Act, including with respect to the timely filing of documents thereunder, and will use its reasonable efforts to confirm that any filings made by the Company under such Rule 424(b) are received in a timely manner by the Commission.

(b)           Blue Sky Compliance.  The Company will cooperate with the Placement Agent and the Investors in endeavoring to qualify the Securities for sale under the securities laws of such jurisdictions (United States and foreign) as the Placement Agent and the Investors may reasonably request and will make such applications, file such documents, and furnish such information as may be reasonably required for that purpose, provided the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction where it is not now so qualified or required to file such a consent, and provided further that the Company shall not be required to produce any new disclosure document other than a Prospectus Supplement.  The Company will, from time to time, prepare and file such statements, reports and other documents as are or may be required to continue such qualifications in effect for so long a period as the Placement Agent may reasonably request for distribution of the Securities.  The Company will advise the Placement Agent promptly of the suspension of the qualification or registration of (or any such exemption relating to) the Securities for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending such qualification, registration or exemption, the Company shall use its best efforts to obtain the withdrawal thereof at the earliest possible moment.

 

(c)           Amendments and Supplements to a Prospectus Supplement and Other Matters.  The Company will comply with the Securities Act and the Exchange Act, and the rules and regulations of the Commission thereunder, so as to permit the completion of the distribution of the Securities as contemplated in this Agreement and any Prospectus Supplement.  If during the period in which a prospectus is required by law to be delivered in connection with the distribution of Securities contemplated by any Prospectus Supplement (the “ Prospectus Delivery Period ”), any event shall occur as a result of which, in the judgment of the Company or in the opinion of the Placement Agent or counsel for the Placement Agent, it becomes necessary to amend or supplement any Prospectus Supplement in order to make the statements therein, in the light of the circumstances under which they were made, as the case may be, not misleading, or if it is necessary at any time to amend or supplement any Prospectus Supplement to comply with any law, the Company will promptly prepare and file with the Commission, and furnish at its own expense to the Placement Agent and to dealers, an appropriate amendment to the Registration Statement or supplement to the Registration Statement or any Prospectus Supplement that is necessary in order to make the statements in any Prospectus Supplement as so amended or supplemented, in the light of the circumstances under which they were made, as the case may be, not misleading, or so that the Registration Statement or any Prospectus Supplement, as so amended or supplemented, will comply with law.  Before amending the Registration Statement or supplementing any Prospectus Supplement in connection with the Offering, the Company will furnish the Placement Agent with a copy of such proposed amendment or supplement and will not file any such amendment or supplement to which the Placement Agent reasonably objects.

 (d)           Copies of any Amendments and Supplements to a Prospectus Supplement.  The Company will furnish the Placement Agent, without charge, during the period beginning on the date hereof and ending on the later of the last Closing Date of the Offering, as many copies of any Prospectus Supplement and any amendments and supplements thereto as the Placement Agent may reasonably request.

 

(e)           Reserved.

 

(f)           Transfer Agent.  The Company will maintain, at its expense, a registrar and transfer agent for the Common Stock.

 

(g)           Earnings Statement.  As soon as practicable and in accordance with applicable requirements under the Securities Act, but in any event not later than 18 months after the last Closing Date, the Company will make generally available to its security holders and to the Placement Agent an earnings statement, covering a period of at least 12 consecutive months beginning after the last Closing Date, that satisfies the provisions of Section 11(a) and Rule 158 under the Securities Act.

 

(h)           Periodic Reporting Obligations.  During the Prospectus Delivery Period, the Company will duly file, on a timely basis, with the Commission all reports and documents required to be filed under the Exchange Act within the time periods and in the manner required by the Exchange Act.

 

(i)           Additional Documents.  The Company will enter into any subscription, purchase or other customary agreements as the Placement Agent or the Investors deem necessary or appropriate to consummate the Offering, all of which will be in form and substance reasonably acceptable to the Company, the Placement Agent and the Investors.  The Company agrees that the Placement Agent may rely upon, and each is a third party beneficiary of, the representations and warranties, and applicable covenants, set forth in any such purchase, subscription or other agreement with Investors in the Offering.

 

(j)            No Manipulation of Price.  The Company will not take, directly or indirectly, any action designed to cause or result in, or that has constituted or might reasonably be expected to constitute, the stabilization or manipulation of the price of any securities of the Company.

 

(k)           Acknowledgment.  The Company acknowledges that any advice given by the Placement Agent to the Company is solely for the benefit and use of the Board of Directors of the Company and may not be used, reproduced, disseminated, quoted or referred to, without the Placement Agent's prior written consent.

 

Section 5.           Conditions of the Obligations of the Placement Agent.  The obligations of the Placement Agent hereunder shall be subject to the accuracy of the representations and warranties on the part of the Company set forth in Section 2 hereof, in each case, unless otherwise noted below, as of the date hereof and as of each Closing Date as though then made, to the timely performance by each of the Company of its covenants and other obligations hereunder on and as of such dates, and to each of the following additional conditions:

 

 

  

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(a)           Accountants’ Comfort Letter.  Notwithstanding anything contained herein to the contrary, as of the first Closing, the Placement Agent shall have received, and the Company shall have caused to be delivered to the Placement Agent, a letter from GBH CPAs, PC (the independent registered public accounting firm of the Company), addressed to the Placement Agent, dated as of such first Closing, in form and substance satisfactory to the Placement Agent.  The letter shall not disclose any change in the condition (financial or other), earnings, operations, business or prospects of the Company from that set forth in the Base Prospectus or the applicable Prospectus Supplement, which, in the Placement Agent's sole judgment, is material and adverse and that makes it, in the Placement Agent's sole judgment, impracticable or inadvisable to proceed with the Offering of the Securities as contemplated by such Prospectus Supplement.

 

(b)           Compliance with Registration Requirements; No Stop Order; No Objection from the FINRA.  Each Prospectus Supplement (in accordance with Rule 424(b)) , if any, shall have been duly filed with the Commission, as appropriate; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; no order preventing or suspending the use of any Prospectus Supplement shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; no order having the effect of ceasing or suspending the distribution of the Securities or any other securities of the Company shall have been issued by any securities commission, securities regulatory authority or stock exchange and no proceedings for that purpose shall have been instituted or shall be pending or, to the knowledge of the Company, contemplated by any securities commission, securities regulatory authority or stock exchange; all requests for additional information on the part of the Commission shall have been complied with; and the FINRA shall have raised no objection to the fairness and reasonableness of the placement terms and arrangements.

 

(c)           Corporate Proceedings.  All corporate proceedings and other legal matters in connection with this Agreement, the Registration Statement and each Prospectus Supplement, and the registration, sale and delivery of the Securities, shall have been completed or resolved in a manner reasonably satisfactory to the Placement Agent's counsel, and such counsel shall have been furnished with such papers and information as it may reasonably have requested to enable such counsel to pass upon the matters referred to in this Section 5.

 

(d)           No Material Adverse Change.  Subsequent to the execution and delivery of this Agreement and prior to each Closing Date, in the Placement Agent's sole judgment after consultation with the Company, there shall not have occurred any Material Adverse Effect.

(e)           Opinion of Counsel for the Company.  The Placement Agent shall have received on each Closing Date the favorable opinion of legal counsel to the Company, dated as of such Closing Date, including, without limitation, a negative assurance letter, addressed to the Placement Agent in form and substance satisfactory to the Placement Agent.

 

(f)           Officers’ Certificate.  The Placement Agent shall have received on each Closing Date a certificate of the Company, dated as of such Closing Date, signed by the Chief Executive Officer and Chief Financial Officer of the Company, to the effect that, and the Placement Agent shall be satisfied that, the signers of such certificate have reviewed the Registration Statement, the Base Prospectus, any Prospectus Supplement, and this Agreement and to the further effect that:

 

(i)           The representations and warranties of the Company in this Agreement are true and correct, as if made on and as of such Closing Date, and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to such Closing Date;

 

(ii)          No stop order suspending the effectiveness of the Registration Statement or the use of the Base Prospectus or any Prospectus Supplement has been issued and no proceedings for that purpose have been instituted or are pending or, to the Company’s knowledge, threatened under the Securities Act; no order having the effect of ceasing or suspending the distribution of the Securities or any other securities of the Company has been issued by any securities commission, securities regulatory authority or stock exchange in the United States and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company, contemplated by any securities commission, securities regulatory authority or stock exchange in the United States;

 

(iii)         When the Registration Statement became effective, at the time of sale, and at all times subsequent thereto up to the delivery of such certificate, the Registration Statement, when it became effective, contained all material information required to be included therein by the Securities Act and the applicable rules and regulations of the Commission thereunder, as the case may be, and in all material respects conformed to the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder, as the case may be, and the Registration Statement, did not and does not include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided, however, that the preceding representations and warranties contained in this paragraph (iii) shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by the Placement Agent expressly for use therein) and, since the effective date of the Registration Statement, there has occurred no event required by the Securities Act and the rules and regulations of the Commission thereunder to be set forth in the Registration Statement which has not been so set forth; and

 

(iv)         Subsequent to the respective dates as of which information is given in the Registration Statement and any Prospectus Supplement, there has not been:  (a) any Material Adverse Effect; (b) any transaction that is material to the Company and the Subsidiaries taken as a whole, except transactions entered into in the ordinary course of business; (c) any obligation, direct or contingent, that is material to the Company and the Subsidiaries taken as a whole, incurred by the Company or any Subsidiary, except obligations incurred in the ordinary course of business; (d) any material change in the capital stock (except changes thereto resulting from the exercise of outstanding stock options or warrants) or outstanding indebtedness of the Company or any Subsidiary; (e) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company; or (f) any loss or damage (whether or not insured) to the property of the Company or any Subsidiary which has been sustained or will have been sustained which has a Material Adverse Effect.

(g)           Bring-down Comfort Letter.  On each Closing Date following the first Closing, the Placement Agent shall have received from GBH CPAs, PC, or such other independent registered public accounting firm of the Company, a letter dated as of such Closing Date, in form and substance satisfactory to the Placement Agent, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (a) of this Section 5, except that the specified date referred to therein for the carrying out of procedures shall be no more than three business days prior to such Closing Date.

 

(h)           Reserved.

 

(i)           Additional Documents.  On or before each Closing Date, the Placement Agent and counsel for the Placement Agent shall have received such information and documents as they may reasonably require for the purposes of enabling them to pass upon the issuance and sale of the Securities as contemplated herein, or in order to evidence the accuracy of any of the representations and warranties, or the satisfaction of any of the conditions or agreements, herein contained.

 

If any condition specified in this Section 5 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the Placement Agent by notice to the Company at any time on or prior to a Closing Date, which termination shall be without liability on the part of any party to any other party, except that Section 6 (Payment of Expenses), Section 7 (Indemnification and Contribution) and Section 8 (Representations and Indemnities to Survive Delivery) shall at all times be effective and shall survive such termination.

 

Section 6.           Payment of Expenses.  The Company agrees to pay all costs, fees and expenses incurred by the Company in connection with the performance of its obligations hereunder and in connection with the transactions contemplated hereby, including, without limitation:  (i) all expenses incident to the issuance, delivery and qualification of the Securities (including all printing and engraving costs); (ii) all fees and expenses of the registrar and transfer agent of the Common Stock; (iii) all necessary issue, transfer and other stamp taxes in connection with the issuance and sale of the Securities; (iv) all fees and expenses of the Company’s counsel, independent public or certified public accountants and other advisors; (v) all costs and expenses incurred in connection with the preparation, printing, filing, shipping and distribution of the Registration Statement (including financial statements, exhibits, schedules, consents and certificates of experts), the Base Prospectus and each Prospectus Supplement, and all amendments and supplements thereto, and this Agreement; (vi) all filing fees, reasonable attorneys’ fees and expenses incurred by the Company or the Placement Agent in connection with qualifying or registering (or obtaining exemptions from the qualification or registration of) all or any part of the Securities for offer and sale under the state securities or blue sky laws or the securities laws of any other country, and, if requested by the Placement Agent, preparing and printing a “ Blue Sky Survey ,” an “ International Blue Sky Survey ” or other memorandum, and any supplements thereto, advising the Placement Agent of such qualifications, registrations and exemptions; (vii) if applicable, the filing fees incident to the review and approval by the FINRA of the Placement Agent's participation in the offering and distribution of the Securities;  (viii) all costs and expenses incident to the travel and accommodation of the Company’s and the Placement Agent's employees on the “ roadshow ,” if any;  provided,  however , that the Placement Agent shall only be reimbursed for any such costs and expenses of the Company’s and Placement Agent’s employees on the “roadshow” that do not exceed the 1.5% expense allowance available to the Placement Agent pursuant to Section 1(a)(iv)of this Agreement; (ix) fees and expenses of Placement Agent’s counsel, which fees shall not exceed $75,000.00 and; provided, that any costs and expenses (exclusive of any blue sky or other filing fees) do not exceed the 1.5% expense allowance available to the Placement Agent pursuant to Section 1(a)(iv)of this Agreement and (x) all other fees, costs and expenses referred to in Part II of the Registration Statement. 

 

 

  

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Section 7.            Indemnification and Contribution.  The Company agrees to indemnify the Placement Agent in accordance with the provisions of  Schedule A  hereto, which is incorporated by reference herein and made a part hereof.

 

Section 8.           Representations and Indemnities to Survive Delivery.  The respective indemnities, agreements, representations, warranties and other statements of the Company or any person controlling the Company, of its officers, and of the Placement Agent set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of the Placement Agent, the Company, or any of its or their partners, officers or directors or any controlling person, as the case may be, and will survive delivery of and payment for the Securities sold hereunder and any termination of this Agreement.  A successor to a Placement Agent, or to the Company, its directors or officers or any person controlling the Company, shall be entitled to the benefits of the indemnity, contribution and reimbursement agreements contained in this Agreement.

 

Section 9.            Notices.  All communications hereunder shall be in writing and shall be mailed, hand delivered or telecopied and confirmed to the parties hereto as follows:

 

If to the Placement Agent to the address set forth above, attn: Mark Elenowitz, CEO, Facsimile: 212-202-6380.

With a copy to:

Hunter Taubman Weiss, LLP

17 State Street, 20th Floor

New York, New York 10004

Facsimile: (212) 202-6380

Attention:  Louis Taubman, Esq.

If to the Company:

Trellis Earth Products, Inc.

9125 S.W. Ridder Road, Suite D

Wilsonville, OR 97070

Facsimile: 503-582-1313

Attention:  William Collins, CEO

With a copy to:

	
Sichenzia Ross Friedman Ference LLP

61 Broadway, 32nd Floor

New York, NY 10006

 Facsimile: 212-930-9725

Attention:  Gregory Sichenzia, Esq.

Marcelle Balcombe, Esq.

Any party hereto may change the address for receipt of communications by giving written notice to the others.

 

Section 10.         Successors.  This Agreement will inure to the benefit of and be binding upon the parties hereto, and to the benefit of the employees, officers and directors and controlling persons referred to in Section 7 hereof, and to their respective successors, and personal representative, and no other person will have any right or obligation hereunder.

 

Section 11.         Partial Unenforceability.  The invalidity or unenforceability of any section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other section, paragraph or provision hereof.  If any Section, paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.

 

Section 12.         Governing Law Provisions.  This Agreement shall be deemed to have been made and delivered in New York City and both this Agreement and the transactions contemplated hereby shall be governed as to validity, interpretation, construction, effect and in all other respects by the internal laws of the State of New York, without regard to the conflict of laws principles thereof.  Each of the Placement Agent and the Company: (i) agrees that any legal suit, action or proceeding arising out of or relating to this Agreement and/or the transactions contemplated hereby shall be instituted exclusively in New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, (ii) waives any objection which it may now or hereafter have to the venue of any such suit, action or proceeding, and (iii) irrevocably consents to the jurisdiction of the New York Supreme Court, County of New York, and the United States District Court for the Southern District of New York in any such suit, action or proceeding.  Each of the Placement Agent and the Company further agrees to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York and agrees that service of process upon the Company mailed by certified mail to the Company’s address shall be deemed in every respect effective service of process upon the Company, in any such suit, action or proceeding, and service of process upon the Placement Agent mailed by certified mail to the Placement Agent’s address shall be deemed in every respect effective service process upon the Placement Agent, in any such suit, action or proceeding.  Notwithstanding any provision of this Agreement to the contrary, the Company agrees that neither the Placement Agent nor its affiliates, and the respective officers, directors, employees, agents and representatives of the Placement Agent, its affiliates and each other person, if any, controlling the Placement Agent or any of its affiliates, shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for or in connection with the transactions described herein except for any such liability for losses, claims, damages or liabilities incurred by such persons that are finally judicially determined to have resulted from the bad faith or gross negligence of such individuals or entities.  If either party shall commence an action or proceeding to enforce any provision of this Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

Section 13.         General Provisions.

 

(a)           This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof.  This Agreement may be executed in two or more counterparts, each one of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.  This Agreement may not be amended or modified unless in writing by all of the parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit.  Section headings herein are for the convenience of the parties only and shall not affect the construction or interpretation of this Agreement.

(b)           The Company acknowledges that in connection with the offering of the Securities: (i) the Placement Agent has acted at arms length, are not agents of, and owe no fiduciary duties to the Company or any other person, (ii) the Placement Agent owes the Company only those duties and obligations set forth in this Agreement and (iii) the Placement Agent may have interests that differ from those of the Company.  The Company waives to the full extent permitted by applicable law any claims it may have against the Placement Agent arising from an alleged breach of fiduciary duty in connection with the offering of the Securities

 

[The remainder of this page has been intentionally left blank.]

 

  

8

  

 

If the foregoing is in accordance with your understanding of our agreement, please sign below whereupon this instrument, along with all counterparts hereof, shall become a binding agreement in accordance with its terms.

 

	
Very truly yours,

	  
	  	  
	
TRELLIS EARTH PRODUCTS, INC.,

	  
	
A Nevada corporation

	  
	  	  
	
By: 

	 
/s/ William Collins 

	
 

	  	
Name: William Collins

	  	
Title: CEO

 

The foregoing Placement Agency Agreement is hereby confirmed and accepted as of the date first above written.

 

	
TRIPOINT GLOBAL EQUITIES, LLC

	  
	  	  
	
By: 

	/s/ Mark Elenowitz	
 

	  	
Name: Mark Elenowitz

	  	
Title: CEO

 

  

9

  

 

 

SCHEDULE A – INDEMNIFICATION

The Company hereby agrees to indemnify and hold Tripoint, its officers, directors, principals, employees, affiliates, and shareholders, and their successors and assigns, harmless from and against any and all loss, claim, damage, liability, deficiencies, actions, suits, proceedings, costs and legal expenses or expense whatsoever (including, but not limited to, reasonable legal fees and other expenses and reasonable disbursements incurred in connection with investigating, preparing to defend or defending any action, suit or proceeding, including any inquiry or investigation, commenced or threatened, or any claim whatsoever, or in appearing or preparing for appearance as witness in any proceeding, including any pretrial proceeding such as a deposition) (collectively, "Losses") arising out of, based upon, or in any way related or attributed to, (i) any breach of a representation, warranty or covenant by the Company contained in this Agreement or (ii) any activities or services performed hereunder by Tripoint, unless it is finally judicially determined in a court of competent jurisdiction that such Losses were the primary and direct result of the intentional misconduct or gross negligence of Tripoint in performing the services hereunder.

If Tripoint receives written notice of the commencement of any legal action, suit or proceeding with respect to which the Company is or may be obligated to provide indemnification pursuant to this  Schedule A , Tripoint shall, within thirty (30) days of the receipt of such written notice, give the Company written notice thereof (a "Claim Notice").  Failure to give such Claim Notice within such thirty (30) day period shall not constitute a waiver by Tripoint of its right to indemnity hereunder with respect to such action, suit or proceeding. Upon receipt by the Company of a Claim Notice from Tripoint with respect to any claim for indemnification which is based upon a claim made by a third party ("Third Party Claim"), the Company may assume the defense of the Third Party Claim with counsel of its own choosing, as described below.  Tripoint shall cooperate in the defense of the Third Party Claim and shall furnish such records, information and testimony and attend all such conferences, discovery proceedings, hearings, trial and appeals as may be reasonably required in connection therewith.  Tripoint shall have the right to employ its own counsel in any such action, which shall be at the Company's expense if (i) the Company and Tripoint shall have mutually agreed in writing to the retention of such counsel, (ii) the Company shall have failed in a timely manner to assume the defense and employ counsel or experts reasonably satisfactory to Tripoint in such litigation or proceeding or (iii) the named parties to any such litigation or proceeding (including any impleaded parties) include the Company and Tripoint and representation of the Company and Tripoint by the same counsel or experts would, in the reasonable opinion of Tripoint, be inappropriate due to actual or potential differing interests between the Company and Tripoint.  The Company shall not satisfy or settle any Third Party Claim for which indemnification has been sought and is available hereunder, without the prior written consent of Tripoint, which consent shall not be delayed and which shall not be required if Tripoint is granted a general release in connection therewith.   The indemnification provisions hereunder shall survive the termination or expiration of this Agreement.

The Company further agrees, upon demand by Tripoint, to promptly reimburse Tripoint for, or pay, any fees, expenses or disbursements as to which Tripoint has been indemnified herein with such reimbursement to be made currently as any such fees, expenses or disbursements are incurred by Tripoint. Notwithstanding the provisions of the aforementioned indemnification, any such reimbursement or payment by the Company of fees, expenses, or disbursements incurred by Tripoint shall be repaid by Tripoint in the event of any proceeding in which a final judgment (after all appeals or the expiration of time to appeal) is entered in a court of competent jurisdiction against Tripoint based solely upon its gross negligence or intentional misconduct in the performance of its duties hereunder, and provided further, that the Company shall not be required to make reimbursement or payment for any settlement effected without the Company’s prior written consent (which consent shall not be unreasonably withheld or delayed).

If for any reason the foregoing indemnification is unavailable or is insufficient to hold Tripoint harmless, the Company agrees to contribute the amount paid or payable by Tripoint in such proportion as to reflect not only the relative benefits received by the Company, on the one hand, and Tripoint, on the other hand, but also the relative fault of the Company and Tripoint as well as any relevant equitable considerations.  In no event shall Tripoint contribute in excess of the fees actually received by it pursuant to the terms of this Agreement.

 

For purposes of this Agreement, each officer, director, shareholder, and employee or affiliate of Tripoint and each person, if any, who controls Tripoint (or any affiliate) within the meaning of either Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended, shall have the same rights as Tripoint with respect to matters of indemnification by the Company hereunder.

 

Notwithstanding any provision of this Agreement to the contrary, the Company agrees that neither the Placement Agent nor its Affiliates, and the respective officers, directors, employees, agents and representatives of the Placement Agent, its Affiliates and each other person, if any, controlling the Placement Agent or any of its affiliates, shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for or in connection with the engagement and transaction described herein except for any such liability for losses, claims, damages or liabilities incurred by us that are finally judicially determined to have resulted from the bad faith or gross negligence of such individuals or entities.

 

 

 

10Converted by EDGARwiz

SHARE PURCHASE AGREEMENT

THIS SHARE PURCHASE AGREEMENT (“SPA”) is entered into as of the 7th day of February, 2012, by and among Iron Eagle Group, Inc., a Delaware corporation (“Iron Eagle”), Tru-Val Electric Group, LLC, a Delaware limited liability company and wholly owned subsidiary of Iron Eagle (“TVG”), Tru-Val Electric Corp., a New York domestic corporation (“Company”), and Christopher Totaro, a New Jersey resident (“Seller”). Iron Eagle and TVG are collectively referred to as “Buyer”). Seller is the sole owner of all of the shares (“Shares”) of the Company. Seller and Buyer are sometimes hereinafter referred to collectively as “Parties”.

R   E   C   I   T   A   L   S   :

WHEREAS, Seller owns 100% of the Shares in the Company; and

WHEREAS, Company is an electrical contractor serving the northeast United States with offices in New Jersey and New York; and

 

WHEREAS, Seller is desirous of selling all of his Shares in the Company; and

WHEREAS, Buyer desires to purchase all of the Seller’s right, title and interest in and to the Shares upon the terms and conditions set forth in this SPA (“Transaction”).

W   I   T   N   E   S   S   E   T   H   :

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

ARTICLE I

DEFINITIONS

1.01

Definitions. As used in this SPA, terms defined in the preamble and recitals of this SPA shall have the meanings set forth therein and the following terms shall have the meanings set forth below: 

“Affiliate” shall mean with respect to any Person, any other Person which directly or indirectly controls, is controlled by, or is under common control with such Person, whether by virtue of equity ownership, common management, contract or otherwise; where “control” and its derivatives mean the legal right or practical ability to direct or materially influence the management, financial or operational decisions or actions of such Person.

“Business” shall mean the electrical contracting business of the Company in the northeast United States.

“Closing” shall mean the final closing of the Transaction, and shall occur on the earlier to occur of (i) the Tru-Val Funding, as defined in Section 1.03 of the Preferred Equity Agreement, and (ii) a date set by mutual agreement of the Seller and the Buyer.

“Closing Date” shall mean on or about January 30, 2012, and shall be subject to mutual agreement of the Seller and the Buyer. 

“Code” shall mean the Internal Revenue Code of 1986 and all regulations promulgated thereunder, as the same from time to time have been amended. 

“Company’s Accountants” shall mean Zerah & Company, 3601 Hempstead Turnpike, Levittown, NY 11756. 

“Competitive Business” has the meaning set forth in Section 6.07. 

“Consent” shall mean any consent, approval or authorization of, notice to, or designation, registration, declaration or filing with, any Person.

“Contract” shall mean any legally enforceable contract, lease, agreement, license, arrangement, commitment or understanding, oral or written, to which Buyer or Company is a party or by which it or any of its properties or assets may be bound or affected.

“EBITDA” shall mean,  with respect to any twelve (12) month period, the calculation of net earnings of Buyer (“Calculation”) before taking into account the payment of interest,  income taxes, depreciation and amortization for such period determined in accordance with GAAP, applied on a consistent basis, but shall exclude overhead or expenses of any Affiliate of Buyer, unless such Affiliate is providing services or goods to the Buyer needed or necessary for the business of Buyer, and then only if such amounts are commercially reasonable and not in excess of the costs Buyer could obtain from non-Affiliated third parties. All payments to executive officers and directors or managers of the Company shall be commercially reasonable and not materially greater than those paid by the Company immediately prior to the Closing.

“Employment Agreements” shall mean the employment agreements between Buyer and Executives of the Company. 

“Environmental Law” shall mean any Law relating to (a) the protection, preservation or restoration of the environment (including air, water vapor, surface water, ground-water, drinking water supply, surface land, subsurface land, plant and animal life or any other natural resource) or to human health or safety; or (b) the exposure to, or the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal, of Hazardous Substances. Environmental Laws include, but are not limited to (i) the Federal Comprehensive Environmental Response Compensation and Liability Act of 1980, the Superfund Amendments and Reauthorization Act, the Federal Water Pollution Control Act of 1972, the Federal Clean Air Act, the Federal Resource Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste Amendments thereto), the Federal Solid Waste Disposal and the Federal Toxic Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide Act, the Federal Occupational Safety and Health Act of 1970, each as amended; and (ii) any common law or equitable doctrine (including injunctive relief and tort doctrines such as negligence, nuisance, trespass and strict liability) that may impose Liability or obligations for injuries or damages due to, or threatened as a result of, the presence of, effects of or exposure to any Hazardous Substance, as defined herein.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974 (and any sections of the Code amended by it) and all regulations promulgated thereunder, as the same have from time to time been amended. 

“Debt Difference” has the meaning set forth in Section 2.03.

“Executives” shall mean Christopher Totaro and Thomas Heim. 

“Final Debt Statement” has the meaning set forth in Section 2.03.

“Financial Statements” shall mean the financial statements of Company as of December 31, 2008, December 31, 2009, December 31, 2010, and June 30, 2011, and are attached hereto as Schedule 4.04.

“Future Contingency Payment(s)” shall have the meaning set forth in Section 2.02(b) of this SPA. 

“Future Contingent Payment Certificate(s)” shall have the meaning set forth in Section 2.02(b) of this SPA. 

“GAAP” shall mean United States generally accepted accounting principles as in effect from time to time, including, without limitation, applicable statements, bulletins and interpretations issued by the Financial Accounting Standards Board and bulletins, opinions, interpretations and statements issued by the American Institute of Certified Public Accountants or its committees. 

“Governmental Authority” shall mean any court or any federal, state, municipal or other government department, commission, board, bureau, agency or instrumentality. 

“Hazardous Substance” shall mean any substance presently or hereafter listed, defined, designated or classified as hazardous, toxic, radioactive, or dangerous, or otherwise regulated, under any Environmental Law. Hazardous Substance includes any substance to which exposure is regulated by any Governmental Authority or any Environmental Law including, without limitation, any toxic waste, pollutant, contaminant, hazardous substance, toxic substance, hazardous waste, special waste, industrial substance or petroleum or any derivative or by-product thereof, radon, radioactive material, asbestos or asbestos-containing material, urea formaldehyde foam insulation, lead or polychlorinated biphenyls.

“Instrument” shall mean any written Contract, deed, assignment, document of title, note, power of attorney, obligation or other document. 

“Intellectual Property” shall mean all trademarks, service marks, trade names, brands, patents and copyrights relating to or used in the Business, all registrations and applications for registration for such trademarks, copyrights, and patents, processes and designs, and other rights with respect to the foregoing owned or licensed by the Company. 

“Knowledge” shall mean (a) with respect to Company, a fact or information actually known or which should be known by Seller or Executives by using reasonable prudence in determining such fact or information; and (b) with respect to Buyer, a fact or information actually known or which should be known by the Chief Executive Officer, Chief Financial Officer or any vice-president or board member of Buyer by using reasonable prudence in determining such fact or information.

“Laws” shall mean (i) all federal, state, local and foreign laws, rules and regulations;    (ii) all Orders; and (iii) all Permits.

“Liabilities” shall mean all debts, duties, liabilities, Contracts, commitments, taxes and other obligations of every kind and character of Company, whether accrued, absolute, contingent or otherwise and whether due or to become due. 

“Lien” shall mean any mortgage, pledge, option, escrow, hypothecation, lien, security interest, equitable interest, financing statement, lease, charge, encumbrance, easement, conditional sale or other title retention or security agreement or any other similar restriction, claim or right of others, whether arising by Contract, operation of Law or otherwise; provided, however, Lien shall not include (i) statutory liens for Taxes to the extent that payment thereof is not in the arrears or otherwise due, (ii) encumbrances in the nature of zoning restrictions. 

“Losses” has the meaning set forth in Section 6.02.

“Material” shall mean to have a Material Adverse Effect on the Company or the Business.

“Material Adverse Effect” means a material adverse effect on the financial condition of the Company or operations of the Business.   

“Shares” shall mean all of the issued and outstanding shares of the Company, including all rights of the Seller to profits, losses, distributions, voting and other rights.

“Order” shall mean any judgment, award, order, writ, injunction or decree issued by any federal, state, local or foreign authority, court, tribunal, agency, or other Governmental Authority, or by any arbitrator, to which Company or its assets are subject, or to which Buyer or its assets are subject, as the case may be.

“Ordinary Course of Business” shall mean the ordinary course of business consistent with past custom and practice (including with respect to quantity and frequency).

“Permits” shall mean all permits, licenses, approvals, franchises, notices, authorizations and similar filings, federal, state, local or foreign, necessary (a) to carry on the Business by, or on behalf of, or for the benefit of, Company or Buyer (as the case may be) as currently conducted by, or on behalf of, or for the benefit of, Company or Buyer (as the case may be), including, without limitation, any and all prequalification authorizations of the Company currently issued and outstanding with any and all Governmental Authorities, or (b) to own, operate or lease the properties and assets owned, operated or leased by, or on behalf of, or for the benefit of, any such Person, or to consummate the Transaction.

“Person” shall mean any individual, partnership, joint venture, corporation, limited liability company, and limited partnership, trust, unincorporated organization, Governmental Authority or other entity.

“Preferred Equity” shall have the meaning set forth in Section 2.02(a) of this SPA.

“Proceeding” shall mean any action, suit, claim, investigation, review or other action, at law or in equity, before any Federal, state, municipal or other Governmental Authority.

“SPA” shall mean this share purchase agreement, including all Schedules and Exhibits attached hereto, as the same may from time to time be amended according to the terms hereof. 

“Scheduled EBITDA” shall mean GAAP EBITDA with respect to each of the twelve (12) month periods set forth below:

Period Ending

EBITDA

December 31, 2011

$2,500,000

December 31, 2012

$3,000,000

December 31, 2013

$3,500,000

December 31, 2014

$4,000,000

“Seller” shall mean Christopher Totaro, a New Jersey resident.

“Signing Date” shall mean the date of this SPA. 

 

“Tax” or “Taxes” shall mean any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security (or similar, including FICA), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not.

“Territory” has the meaning set forth in Section 6.07.

“Working Capital” shall mean, as of any particular date, the excess of Company’s current assets over the Company’s current liabilities, determined in accordance with GAAP as of the Closing Date. 

1.02

Rules of Construction. Unless the context otherwise requires: (a) a term has the meaning assigned to it; (b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (c) “or” is not exclusive; (d) words in the singular include the plural, and words in the plural include the singular; (e) provisions apply to successive events and transactions; (f) “herein”, “hereof”, “hereto” and other words of similar import refer to this SPA as a whole and not to any particular article, section or other subdivision; and (g) any gender used in this SPA shall be deemed to include the neuter, masculine and feminine gender. The Parties have participated jointly in the negotiation and drafting of this SPA. In the event an ambiguity or question of intent or interpretation arises, this SPA shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this SPA. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word “including” shall mean including without limitation. The Parties intend that each representation, warranty, and covenant contained herein shall have independent significance. If any Party has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation, warranty, or covenant relating to the same subject matter (regardless of the relative levels of specificity) which the Party has not breached shall not detract from or mitigate the fact that the Party is in breach of the first representation, warranty, or covenant.

ARTICLE II

PURCHASE OF SHARES

2.01

Purchase of Shares. Upon the terms and subject to the conditions of this SPA, at the Closing (i) Seller will sell, transfer, assign, convey and deliver to Buyer, and Buyer will purchase, accept and acquire from Seller, all of the Shares for the Purchase Price as set forth in Section 2.02 of this Agreement.

2.02

Purchase Price. The aggregate purchase price to be paid by Buyer for the Shares shall consist of (i) the assumption of debt described in Section 2.02(a) hereof; (ii) equity to Seller in the form of common shares of Iron Eagle described in Section 2.02(b) hereof, and (iii) the preferred equity described in Section 2.02(c) hereof, subject to the adjustment set forth in Section 2.03 hereof:

(a)

Assumption of Debt. At Closing, Buyer shall assume all debt and liabilities of the Company (hereinafter collectively referred to as the “Assumed Company Debt”). The exact amounts of the Assumed Company Debt are listed in Schedule 2.02(a).

(b)

Equity to Seller. At Closing, Iron Eagle shall issue restricted shares of common stock in Iron Eagle to Seller, or Seller’s designee, such that Seller, or said designee, shall own forty percent (40%) of the total issued and outstanding stock of Iron Eagle (hereinafter, the “Seller’s IE Common Shares”).  At Closing, the Seller’s IE Common Shares shall be subject to the following restrictions:

(i)

Fifty percent (50%) of Seller’s IE Common Shares may not be sold to a third party purchaser for value for a period of twelve (12) months following the anniversary of the Closing Date; and

(ii)

The remaining fifty (50%) percent of the Seller’s IE Common Shares may not be sold to a third party purchaser for value for a period of twenty-four (24) months following the anniversary of the Closing Date.

(a)

Preferred Equity. In addition to the Seller’s IE Common Shares, at Closing, Iron Eagle shall issue to Seller, or Seller’s designee, preferred shares in Iron Eagle equal to One Million ($1,000,000.00) Dollars of such preferred shares as described in Schedule 2.02(c) (hereinafter, the “Seller’s IE Preferred Shares”).

2.03

Preferred Equity Adjustment. The “Debt Difference” shall be defined as Seven Million ($7,000,000.00) Dollars less the actual Assumed Company Debt, as set forth in the Final Debt Statement. The Preferred Equity shall be adjusted by the amount of the Debt Difference.  Example:  If the Closing is on January 20, 2012 and the actual Assumed Company Debt as of the Closing Date is $6,400,000.00, then the Debt Difference is $600,000.00 and the Preferred Equity will be increased by $600,000.00 to $1,600,000.00.  Notwithstanding anything contained herein to the contrary, at Closing, the Preferred Equity increase shall not be less than $1,000,000.00.

On the Closing Date, Seller shall deliver to Buyer a statement setting forth the estimated debts owned by the Company as of the Closing Date. Within thirty (30) days from the Closing Date, Seller shall deliver to Buyer a statement (“Final Debt Statement”) setting forth Company’s actual debt as of the Closing Date, certified by the chief operating officer, the chief financial officer of Company and the auditor of the Company. The Debt Statement shall be subject to review and approval by Buyer.  Seller shall provide Buyer or its designees with reasonable access to Company’s officers and auditors, as well as the work papers, books and records and all other materials used in the preparation of the Final Debt Statement.

2.04

Intentionally Omitted. 

2.05

Intentionally Omitted. 

2.06

Closing Deliverables.

(a)

Seller Deliverables. At the Closing, Seller shall deliver to Buyer: 

(i)

Such Consents, estoppel certificates, Permits and other Instruments as Buyer may reasonably request to enable it to conduct the Business without interruption or disruption;

(ii)

Closing certificates, duly executed by Company, dated on the Closing Date, in form and substance reasonably satisfactory to Buyer, certifying as to the fulfillment of the closing conditions set forth in Section 2.06(a) hereof; 

(iii)

The Employment Agreement(s), duly executed by the Executives, dated on the Closing Date, in form and substance reasonably satisfactory to Buyer;

(iv)

An executed lease between Company and the landlord of each of the Company’s two (2) offices, in the form attached hereto as Exhibit A, relating to real estate located at (i) 205 South Newman Street, Hackensack, New Jersey 07601, and (ii) 2550 Park Avenue, Bronx, New York 10451 for a minimum term of four (4) years upon terms mutually agreed upon by the Company and said landlords; 

(v)

Financials:

(a)

PCAOB GAAP certified Audited Financial Statements of the Company for Fiscal Years ending December 31, 2008, 2009 and 2010.

 

(b)

GAAP Reviewed financials of the Company for the nine (9) months ending September 30, 2011.

(i)

Consent to the transfers contemplated in this SPA by the surety on all bonds issued for pending construction projects of the Company;

(ii)

Consent of all secured creditors of the Company to the Transaction, including but not limited to Signature Bank; 

(iii)

Certificate evidencing the Shares, endorsed in blank or with executed powers of assignment attached; and

(iv)

Opinion of Company’s Counsel dated on the Closing Date, substantially in the form attached hereto as Exhibit B hereto.

(b)

Buyer's Deliverables. At the Closing, Buyer shall deliver to Seller:

(i)

Seller’s IE Common Shares;

(ii)

Seller’s IE Preferred Shares;

(i)

Closing Certificate, duly executed by Buyer, dated on the Closing Date, substantially in form and substance reasonably satisfactory to Seller, certifying as to the fulfillment of the closing conditions set forth in Sections 3.01(a) and 3.01(b) hereof; 

(ii)

Employment Agreement(s), duly executed by Buyer, dated on the Closing Date; and

(iii)

Opinion by Buyer’s Counsel dated the Closing Date, substantially in the form attached hereto as Exhibit C. 

ARTICLE III

CLOSING CONDITIONS

3.01

Conditions Precedent to the Obligations of the Company.  All of the obligations of the Seller under this SPA are subject to the fulfillment, at or prior to the Closing Date, of each of the following conditions: 

(a)

Buyer's Representations and Warranties. The representations and warranties of Buyer herein contained shall be true and accurate on and as of the Closing Date. 

(b)

Other Agreements. On the Closing Date, the Employment Agreement(s) and such other Instruments reasonably necessary to carry out the Transaction shall have been duly executed and delivered by Buyer.

(c)

No litigation. No Proceeding shall have been commenced and still be pending, no investigation by any Governmental Authority shall have been commenced and be pending, and no Proceeding shall have been threatened against Buyer (i) seeking to restrain, prevent or change the Transaction or questioning the validity or legality of the Transaction; or (ii) which if resolved adversely to any party would have a Material Adverse Effect.

(d)

Documentation. All matters and proceedings taken in connection with the Transaction as herein contemplated, including forms of Instruments and matters of title, shall be reasonably satisfactory to the Company and its counsel. 

(e)

Waiver. Company may waive in writing any condition precedent contained herein and, upon the exercise of such right of waiver, the Transaction shall be consummated in accordance with the terms contained in this SPA as modified by said writing.  

3.02

Conditions Precedent to the Obligations of Buyer.  All obligations of Buyer under this SPA are subject to the fulfillment, on or prior to the Closing Date, of each of the following conditions: 

(a)

Company’s Representations and Warranties. The representations and warranties of the Company and of the Seller hereincontained shall be true on and as of the Closing Date.

(b)

Consents and Estoppel Certificates. Buyer shall have received evidence (or Company and Seller shall have covenanted to obtain), reasonably satisfactory to Buyer and its counsel, that all of the Consents disclosed in Schedule 4.14 hereto have been duly obtained together with estoppel certificates for all real property leases, and that all Permits and Consents necessary to the operation of the Business have been transferred to or issued to Buyer.

(c)

Other Agreements. On the Closing Date, the Employment Agreement(s) and all other Instruments necessary to complete the Transaction shall have been duly executed and delivered by Company and the parties thereto.

(d)

Satisfaction of Due Diligence. Buyer shall have satisfactorily completed all necessary due diligence of the Company.

(e)

No Litigation. No Proceeding shall have been commenced and still be pending, no investigation by any Governmental Authority shall have been commenced and be pending, and no Proceeding shall have been threatened against Company (i) seeking to restrain, prevent or change the Transaction, or questioning the validity or legality of the Transaction; or (ii) which, if resolved adversely to such party, would have a Material Adverse Effect.

(f)

Documentation. All matters and proceedings taken in connection with the Transaction as herein contemplated, including forms of Instruments and matters of title, shall be reasonably satisfactory to the Buyer and its counsel. 

(g)

Waiver. Buyer may waive in writing any condition precedent contained herein and, upon the exercise of such right of waiver, the Transaction shall be consummated in accordance with the terms contained in this SPA as modified by said writing.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES 

OF SELLER AND COMPANY

Seller hereby represents and warrants to Buyer that, to the best of Seller’s Knowledge, as to each and every statement made in the sections which follow:

4.01

Organization: Ownership, Existence, Authority and Good Standing.

(a)

Seller is a resident of the State of New Jersey and has full beneficial and legal ownership of the Shares. Seller has all of the requisite authority to convey all right, title and interest in the Shares to the Buyer and has all requisite legal right, power, authority and capacity to enter into this SPA and to perform all of his obligations hereunder. Seller has taken all necessary action to authorize the sale hereunder on the terms and conditions of this SPA and to authorize the execution, delivery and performance of this SPA. This SPA has been duly executed by Seller and constitutes a legal, valid and binding obligation enforceable against him in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, or other similar laws from time to time in effect, which affect the enforcement of creditors' rights in general and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 

(b)

Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. Company is wholly owned by Seller and has all requisite corporate and other power and authority and legal right to own, operate and lease its properties, and to carry on the Business as now being conducted. The jurisdictions in which Company is organized and qualified to do business are set forth in Schedule 4.01(b) hereto. Company's (i) chief executive office, (ii) principal place of business, and (iii) location at which it maintains all records relating to its accounts receivable and inventory is set forth in Schedule 4.01(b) hereto. All other locations where Company has offices or other places of business, maintains stocks of inventory, records, equipment or other assets are set forth in Schedule 4.01(b) hereto. During the past five (5) years, the only names by which Company has been known, or which Company has used for any identification purpose, are the names set forth in the preamble and definitions for this SPA.

(c)

A true and complete list of all of the officers, directors and employees of the Company is set forth in Schedule 4.01(c). 

4.02

Capitalization. A copy of the certificate evidencing the Shares is set forth in Exhibit D. The Shares are owned by Seller free and clear of all Liens and encumbrances, subject to applicable securities laws. The Shares are duly and validly issued, fully paid and non-assessable. There are (i) no outstanding shares or other securities convertible into shares in the Company other than the Shares; (ii) no outstanding rights of subscriptions, warrants, calls, options, Contracts or other agreements of any kind, issued or granted to any Person by Seller to purchase or otherwise acquire any shares or securities convertible into shares of the Company. Seller has delivered to Buyer complete and correct copies of the certificate of incorporation of the Company, any and all operating or shareholders’ agreements, record books and shares transfer records, as requested by Buyer, all of which include all amendments as of the date hereof and which are in full force and effect on the date hereof.

4.03

Subsidiaries and Affiliates. Company does not own, directly or indirectly, any capital stock, shares or equity securities of any Person or have any direct or indirect equity or ownership interest in any business other than those set forth on Schedule 4.03.

4.04

Financial Statements.

The Financial Statements of the Company have been prepared in accordance with GAAP (except for the absence of footnotes and provision for normal year-end adjustments) applied on a basis consistent with that of the preceding year or period and fairly present the financial position of the Company as of the date thereof and the results of its operations for the year or period, as the case may be, then ended. A copy of the Financial Statements are attached at Schedule 4.04. The accounts receivable/retainage and other assets reflected in the Financial Statements as set out on Schedule 4.04, or thereafter acquired by the Company through the date hereof in the ordinary course of business, have been collected, or are collectible (subject to the Company’s reasonable reserve for bad debts).

4.05

Absence of Undisclosed Liabilities. Except to the extent reflected or reserved against in the Financial Statements or as set forth in Schedule 4.04 hereto, the Company does not have, as of the date of such Financial Statements and as of the date hereof, any material Liabilities of any nature, whether accrued, absolute, contingent or otherwise, and whether due or to become due other than liabilities that have arisen in the ordinary course of business. Except as set forth in Schedule 4.05 hereto, no basis exists for assertion against the Company as of the date of the Financial Statements, or as of the date hereof, of any material Liability of any nature not fully reflected or reserved against in the Financial Statements or otherwise set forth in a schedule to this SPA, or of any other Liability of any nature arising since the date of the Financial Statements, other than Liabilities which have been incurred in the ordinary course of business and which are not material (individually or in the aggregate) to the Business.

4.06

No Material Adverse Change.  Except as set forth in Schedule 4.06 hereto, since the date of the Financial Statements, there has not been any material adverse change in the financial or other condition or in the operations, business, properties or assets of the Company. For the purposes of this representation the term “material adverse change” shall mean (i) a change in the financial condition of the Company which has adversely affected or impaired or which does or which the Company can reasonably foresee may adversely affect or impair the ability of the Company to conduct the Business as heretofore conducted and as now proposed to be conducted; or (ii) any material damage, destruction or loss to any of the properties or assets of the Company, whether or not covered by insurance, which has adversely affected or impaired or which does or which the Company can reasonably foresee may adversely affect or impair the ability of the Company to conduct its Business as heretofore conducted and as now proposed to be conducted; or (iii) any labor dispute, strike, walkout or negotiation, or request for negotiation, for any representation or any labor contract; or (iv) any event or condition of any character which has materially and adversely affected or which does or which the Company can reasonably foresee may materially and adversely affect or impair the Business; or (v) any material adverse change in business prospects of the Company.

4.07

Tax Returns and Payments.  The Company has duly and timely filed all federal, state, local and foreign, Tax returns and reports required to be filed and has duly paid all Taxes  upon it or its properties, assets, income, franchises, licenses or sales. All such returns and reports are true, correct and complete. The charges, accruals and reserves shown in the Financial Statements in respect of Taxes, if any, for all fiscal periods to date are adequate, and nothing has occurred subsequent to the date of such Financial Statements which makes such charges, accruals or reserves inadequate. There are no material unpaid Taxes assessed or proposed by any Governmental Authority for additional Taxes for which the Company does not have adequate reserves for any fiscal year.  All monies required to be withheld by the Company from employees for income taxes, Social Security and unemployment insurance taxes have been collected or withheld, and either paid to the respective Governmental Authority or set aside in accounts for such purpose, or accrued, reserved against, and entered upon the books of the Company. The Company has furnished to Buyer true and complete copies of the federal and state income Tax returns of the Company for the fiscal years ending December 31, 2008, 2009, and 2010.

4.08

Real Property Owned or Leased.  A list and legal description of any real property (together with any improvements thereon) leased to or by Company or in which Company has any interest, is set forth at Schedule 4.08 hereto. All such leased real property is held subject to written leases or other agreements which are valid and effective in accordance with their respective terms, and there are no existing defaults or events of default, or events which with notice or lapse of time or both would constitute defaults, thereunder on the part of Company, except for such defaults, if any, which are not material in character, amount or extent and do not, severally or in the aggregate, materially detract from the value or interfere with the present use of the property subject to such lease or affect the validity, enforceability or assignability of such lease or otherwise materially impair the Business of the Company. Neither Company nor the Seller has any Knowledge of any default or claimed or purported or alleged default or state of facts which, with notice or lapse of time or both, would constitute a material default on the part of any other party in the performance of any obligation to be performed or paid by such other party under any lease referred to in or submitted as a part of Schedule 4.08 hereto. Except as set forth in Schedule 4.14 hereto, the transfer of the Shares and the consummation of the Transaction contemplated by this SPA will in no way affect the continuation, validity and effectiveness of any such lease or require the Consent of any third party under any such lease. The Company has furnished to Buyer true and correct copies of all leases, deeds, title reports and legal descriptions of the real property referred to or set forth at Schedule 4.08 hereto.

4.09

Title to Assets.  Except as set forth in Schedule 4.09 hereto, the Company has good and marketable title to all of its properties and assets used in its Business or reflected in the Financial Statements, subject in each case to no Lien other than Liens listed on Schedule 4.09. The exceptions set forth in Schedule 4.09 hereto, if any, do not, severally or in the aggregate, have a material adverse effect on the Business of the Company. The Company has furnished to Buyer true and correct documentation relating to any Lien set forth in Schedule 4.09 hereto.

4.10 Condition of Property. The offices, structures and equipment of the Company are in good operating condition and repair, subject only to ordinary wear and tear, and the Company has no reason to believe that such offices, structures and equipment will not be in all material respects adequate for Buyer to operate the business being purchased pursuant to this SPA. The Company possesses adequate assets to conduct its business as heretofore conducted by it. The Schedules and Exhibits to this SPA contain a complete list of all assets used in the Business, and the Company does not own other property which is, or during the past three (3) years has been, used, or is or was intended for use, in the Business. The Shares are in all respects adequate to allow Buyer to operate and continue the Business without interruption or disruption and otherwise in accordance with all applicable Laws. 

4.11

Insurance. A list and brief description of the Company's policies of casualty, fire, liability, title, workers' compensation, director and officer's life, director's and officer's liability, and other forms of insurance are set forth in Schedule 4.11 hereto.  All of the insurable properties of the Company are insured for its benefit, in amounts deemed adequate by its management, against all risks usually insured against by persons operating similar properties in the localities where such properties are located, under policies issued by insurers of recognized responsibility on which all premiums currently due have been paid. Except as set forth in Schedule 4.14 hereto, the consummation of the Transaction contemplated by this SPA (including any assignment of rights, or addition of loss payees or insureds that may be required in connection therewith) will in no way affect any such policy or require the Consent of any third party under any such policy. Neither the Company nor any the Seller have any Knowledge of any default or claimed or purported or alleged default or state of facts which, with notice or lapse of time or both, would constitute a default on the part of any party in the performance of any obligation to be performed or paid by any party under any policy referred to in or submitted as a part of Schedule 4.11 hereto. The Company and the Seller have furnished to the Buyer true and complete copies of all insurance policies set forth in Schedule 4.11 hereto.

4.12

Intellectual Property. A list and brief description of all material items of the Company's Intellectual Property and Licenses, including, but not limited to the electrical licenses held by Company and Seller in each jurisdiction necessary to conduct the Business, is set forth in Schedule 4.12 hereto, excluding, inter alia, off the shelf software and other commercially available licensed Intellectual Property. Except as set forth in Schedule 4.12 hereto, the Company owns the entire, unencumbered right, title and interest to all such Intellectual Property indicated as owned by it, and, except as set forth in Schedule 4.12 hereto, no Contracts, Permits or other rights or licenses have been granted to others with respect to any of such Intellectual Properties.  Except as set forth in Schedule 4.12 hereto, the Company owns or possesses the right to use all the Intellectual Property necessary for the conduct of the Business as now conducted and as proposed to be conducted, without any known conflict with the rights of others, or any known use by others which conflicts in any respect with the rights of the Company.  The Company has not received any notice, and neither the Company nor the Seller have any Knowledge, of any claimed conflict with respect to any of the foregoing, nor are they aware of any claim or assertion that any of the foregoing Intellectual Properties are invalid or defective in any way, nor are they aware of any facts or prior act upon which such a claim or assertion could be based. Neither the Company nor the Seller has any Knowledge of any default or claimed or purported or alleged default or state of facts which, with notice or lapse of time or both, would constitute a default on the part of any party in the performance of any obligation to be performed or paid by any party under any Contract or Permit referred to in or submitted as a part of Schedule 4.12 hereto.  The Company and the Seller have provided Buyer complete access to copies of all Intellectual Property set forth in Schedule 4.12 hereto. 

4.13

Litigation. Except as set forth in Schedule 4.13 hereto, there is no action, litigation, administrative proceeding, arbitration, Proceeding or governmental investigation affecting the Business, property, assets and business operations of the Company. None of the matters set forth in this Schedule 4.13 either severally or in the aggregate, materially and adversely affect the financial condition, business, property or  assets of the Company.  There are no investigations pending or threatened by any federal, state, local or foreign government or by any agency or instrumentality thereof, the effect of which would impair or affect the Business of the Company.

4.14

Governmental and Other Consents. Except as set forth in Schedule 4.14, no Consent or Permit is required by the Company or the Seller to complete the actions necessary to consummate the Transaction or take any action necessary to transfer the Shares to the Buyer. The Company and the Seller have, or prior to the Closing will have, furnished to Buyer true and complete copies of any such Consents or Permits which shall have been obtained. Consents for the assignment to the Buyer of all Contracts (except for contracts listed on Schedule 4.14) have been obtained. This list includes, but is not limited to NYC SCA, VENDEX, Mayor’s Office of Contract Services, and any other municipalities requiring consent. Consents for those contracts listed on Schedule 4.14 will be obtained in due course.

4.15

Law Compliance; Permits. Set forth in Schedule 4.15 hereto is a complete and accurate list of the following: (i) all Orders; and (ii) all Permits to which Company is a party or which is otherwise binding thereon.  The Company and each Affiliate has complied with and is not in default in any material respect under all Laws including, without limitation, all antitrust, trade, labor, non-discrimination, safety and health, zoning and building code, criminal and Environmental Laws, the violation of which could have a Material Adverse Effect.  All of the Orders and Permits set forth in Schedule 4.15 hereto are in full force and effect on the date hereof, and the Company has not engaged in any activity which would cause or permit revocation or suspension of any such Permit or a default under such Order and no Proceeding looking to or contemplating the revocation or suspension or any such Permit or Order is pending or threatened. There are no existing defaults or events of default or events or state of facts which with notice or lapse of time or both would constitute a default by Company under any Order or Permit set forth in Schedule 4.15 hereto. No default or claimed or purported or alleged default or state of facts which, with notice or lapse of time or both, would constitute a default on the part of any party in the performance of any obligation to be performed or paid by any party under any Order or Permit referred to in or submitted as a part of Schedule 4.15 hereto. The sale of the Shares and the consummation of the Transaction will in no way affect the continuation, validity or effectiveness of the Orders and Permits set forth in Schedule 4.15 hereto or require the Consent of any third party under any such Order or Permit. Except as set forth in Schedule 4.15 hereto, Company is not required to be licensed by, or subject to the regulation of, any governmental or regulatory body by reason of the particular business conducted by Company. Company or Seller have furnished to Buyer true and complete copies of all Orders and Permits listed in Schedule 4.15 hereto. All Permits relating to Company's ability to conduct the Business in compliance with applicable Law are issued in the name of officers of the Company, which officers, to the best Knowledge of Company and Seller, have agreed to become officers of Buyer. Upon such officers becoming employed by Buyer, no Permit or other Consent will be required to operate the Business.

4.16

Compliance with Other Instruments. Subject to obtaining the Consents and Permits listed in Schedule 4.16 hereto, neither the execution and delivery of this SPA by the Company or the Seller, nor the consummation of the Transaction contemplated hereby will (i) conflict with or result in any violation of or constitute a default under any term of the certificate of incorporation of the Company or shareholders’ agreement of the Company; or (ii) conflict with or result in any violation of or constitute a default under any Law, Instrument, Lien or Contract by which the Company or any Seller is, or its or their properties or assets are bound; or (iii) result in the creation or imposition of any Lien or give to any other Person any interest or right, including rights of acceleration, termination or cancellation in or with respect to, or otherwise affect, any of the properties, assets or business of the Company or the Seller. 

4.17

Adverse Agreements. Neither the Company nor any Affiliate is a party to any Contract or subject to any charter or other corporate restriction or any Law which materially and adversely affects or, so far as Company now reasonably foresees, may in the future materially and adversely affect the Business of the Company or such Affiliate. 

4.18

Additional Agreements, Contracts, and Instruments. Set forth in Schedule 4.18 hereto are complete and accurate lists of the following (other than the Instruments and Contracts set forth in Schedules 4.08, 4.11 or 4.12 hereto): 

(a)

All leases, licensing agreements and franchise agreements to which the Company is a party or in which Company has an interest; 

(b)

All bonus incentive compensation, profit-sharing, retirement, pension, group insurance, death benefit or other fringe benefit plans, deferred compensation and post-termination obligations, trust agreements of the Company in effect or under which any amounts remain unpaid on the date hereof or are to become effective after the date hereof;

(c)

All collective bargaining and other agreements and Contracts of the Company with any labor union or other representative of employees, including local agreements, amendments, supplements, and all material letters and memoranda of understanding of all kinds;

(d)

All employment and consulting Contracts not terminable at will without penalty to which Company is a party;

(e)

Each Contract defining the terms on which debts of or guarantees by the Company aggregating more than Ten Thousand ($10,000.00) Dollars have been or may be issued; 

(f)

Any Contract limiting the Company's or the Seller's freedom to compete in any line of business or with any Person;

(g)

All Contracts of the Company, oral or written, in which any officer, director or Seller of the Company has any interest, direct or indirect;  

(h)

All other Contracts of the Company, except for (i) Contracts which involve only the future payment of money to or by anyone Person in amounts less than One Hundred Thousand ($100,000.00) Dollars and which are not material, individually or in the aggregate, to the Business; and (ii) purchase orders and sales Contracts entered into in the ordinary course of Business and on terms which are comparable in all material respects to the purchase orders and sales Contracts described in Section 4.21 hereof;

(i)

All Contracts with lending institutions, including the line of credit with Signature Bank; and

(j)

All Contracts with surety(ies) of the Company relating to the issuance of construction bonds as described in Schedule 4.18 (j).

(k)

All Contracts with governmental and regulatory agencies as described in Schedule 4.18 (k), including, but not limited to NYC SCA, VENDEX, the Mayor’s Office of Construction Services, and any other municipalities requiring consent.

Except as set forth in Schedule 4.18 or Schedule 4.14 hereto, the sale of the Shares and the consummation of the Transaction contemplated by this SPA (including any assignment of Contract rights) will in no way affect the continuation, validity or effectiveness of any of the Contracts listed in Schedule 4.18 hereto, or require the Consent of any third party under any such Contract.  No default or claimed or purported or alleged default or state of facts which, with notice or lapse of time or both, exists which would constitute a default on the part of any party in the performance of any obligation to be performed or paid by any party under any Contract or Instrument referred to in or submitted as a part of Schedule 4.18 hereto.  The Company has delivered to the Buyer true and complete copies of each written Contract or Instrument referred to in Schedule 4.18 hereto, and true and complete written descriptions of each oral Contract referred to in Schedule 4.18 hereto. 

4.19

ERISA. 

(a)

Set forth in Schedule 4.19 is a copy of the Company 401 (k) Plan (“Company 401K Plan”) for nonunion employees which represents the only retirement plan of the Seller as such term is defined in § 3(2) of ERISA maintained by the Company and to which the Company contributes.

(b)

The Company is and has at all times been in compliance in all material respects with all applicable provisions of ERISA and other Laws relating to the Company 401K Plan. No event has occurred or is threatened or about to occur which would constitute a reportable event within the meaning of §4043(b) of ERISA, or which would constitute grounds for the appointment by the appropriate United States district court of a trustee to administer the Company 401K Plan or any employee pension benefit plan maintained by Company or to which Company contributes, and no notice of termination has been filed by the plan administrator pursuant to §4041 of ERISA or issued by the Pension Benefit Guaranty Corporation pursuant to §4042 of ERISA with respect to any employee pension benefit plan maintained by the Company or to which the Company contributes. None of the employee pension benefit plans listed in Schedule 4.19 nor any of the trusts thereunder has incurred an “accumulated funding deficiency” as such term is defined in § 302(a) of ERISA (whether or not waived), since the effective date of ERISA, and no such employee pension benefit plan has incurred any liability to the Pension Benefit Guaranty Corporation established pursuant to ERISA. The Company has delivered to the Buyer true and complete copies of (i) the plan documents for each of the employee pension benefit plans set forth on Schedule 4.19;   (ii) the names and addresses of all trustees for each such employee pension benefit plan; (iii) the most recent actuarial reports for all defined benefit pension plans, Annual Report Form 5500 or Form 5500-R; (iv) the most recent Internal Revenue Service determination letters; and (v) computations of withdrawal liability for each such employee pension benefit plan which is a multiemployer plan. Such actuarial reports correctly set forth the funding status of such employee pension benefit plans as of their respective dates based on the actuarial assumptions described therein. The Company has made all contributions required to be made to each employee pension benefit plan described in Schedule 4.19 under the terms of the plan and applicable Law. No prohibited transaction (as defined in § 4975 of the Code) has occurred with respect to any employee pension benefit plan listed in Schedule 4.19. 

4.20

Environmental Matters. Except as disclosed in Schedule 4.20 hereto:

(a)

The Company and each Affiliate has conducted its business in compliance with all applicable Environmental Laws, including having all Permits necessary under applicable Environmental Laws for the operation of its business as presently conducted;

(b)

None of the real properties owned or leased by the Company or any Affiliate contain any Hazardous Substance in amounts exceeding the levels permitted by Environmental Laws;

(c)

Neither the Company nor any of the Affiliates have received any notices, demand letters or requests for information from any Governmental Authority or third party indicating that the Company or any of the Affiliates may be in violation of, or liable under, any Environmental Law in connection with the ownership or operation of its business;

(d)

There are no civil, criminal or administrative actions, suits, demands, claims, hearings, investigations or Proceedings pending or threatened against the Company or any Affiliate relating to any violation, or alleged violation, of any applicable Environmental Law;

(e)

No reports have been filed, or are required to be filed, by the Company or any Affiliate concerning the release of any Hazardous Substance or the threatened or actual violation of any Environmental Law;

(f)

No Hazardous Substance has been disposed of, released or transported in violation of any applicable Environmental Law from any real properties owned or leased by the Company or any Affiliate;

(g)

There have been no environmental investigations, studies, audits, tests, reviews or other analyses regarding compliance or noncompliance with any applicable Environmental Law conducted by or which are in the possession of the Company or any Affiliate which have not been delivered to Buyer prior to the date hereof;

(h)

There are no underground storage tanks on, in or under any real properties owned or leased by the Company or any Affiliate and no underground storage tanks have been closed or removed by the Company or any Affiliate from any of such properties;

(i)

There is no asbestos or asbestos-containing material present in any of the assets owned or leased by the Company or any Affiliate, and no asbestos has been removed by the Company or any Affiliate from any of such properties;

(j)

Neither Company, nor any Affiliates, nor any of their properties are subject to any material Liabilities or expenditures (fixed or contingent) relating to any suit, settlement, Law or claim asserted or arising under any Environmental Law. 

4.21

Customers and Suppliers. Set forth in Schedule 4.21 hereto is (i) a list of names and addresses of the ten (10) largest customers and the ten (10) largest suppliers (measured by dollar volume of purchases or sales, as the case may be) of the Company, and the percentage of the Company’s Business which each such customer or supplier represents or represented during each of the fiscal years 2008 through 2011; (ii) a description of the business arrangements (to the extent not reflected in any Contracts or Instruments set forth in Schedule 4.18 hereto) between the Company and each person which manufactures any of the Company's products; (iii) a description of the business arrangements (to the extent not reflected in any Contracts or Instruments set forth in Schedule 4.18 hereto) between the Company and each of the Company's sales representatives; Except as set forth in Schedule 4.18 hereto, there exists no actual or threatened termination, cancellation or limitation of, or any modification or change in, the business relationship of the Company with any customer or group of customers listed in Schedule 4.21 hereto, or whose purchases individually or in the aggregate are material to the operations of the Business of the Company, or with any supplier or group or suppliers, listed in Schedule 4.21 hereto, or whose sales individually or in the aggregate are material to the operations of the Business of the Company, and there exists no present condition or state of facts or circumstances known to the Company and the Seller involving customers, suppliers or sales representatives which the Company and the Seller can now reasonably foresee would materially adversely affect the Business of the Company or prevent the Buyer from conducting the Business of the Company after the consummation of the Transaction in essentially the same manner in which it has heretofore been conducted by the Company. Neither the Company, nor the Seller, nor any officer, director, or employee of the Company is a party to any Contract or arrangement that:

(a)

involves the purchase or sale of goods or services by the Company and provides for payment of any money, or transfer of any property for such goods or services to any Person other than the Company, the supplier or customer purchasing or selling such goods or services, as the case may be, (including, without limitation, any payment or other transfers of property to an officer, director, Seller, or employee of the Company); 

(b)

requires payment by the Company for goods whether or not such goods are delivered;

(c)

restricts the geographical area in which, or the customers to whom, the Company transact Business;

(d)

restricts the price at which goods or services may be sold by the Company; 

(e)

provides for the Company’s participation in any program of promotional allowances, cooperative advertising or discounts (whether as the party providing or receiving such allowance or discount); 

(f)

conditions the purchase or sale of one (1) product or service on the purchase or sale of another product or service; or

(g)

provides that any payment required to be made to the Company for goods or services sold by the Company to any Person is subordinated in right of payment to any indebtedness or obligations of such Person or any other Person; or

(h)

involves a requirements contract relating to the purchase or sale of inventory, finished goods or other property used in the conduct of the Business.

4.22

Other Assets. Set forth in Schedule 4.22 hereto is (i) a list and brief description of Equipment (as defined in the Uniform Commercial Code) owned or leased by the Company on the Closing Date material to the operation of the Business; (ii) reports showing the Accounts (as defined in the Uniform Commercial Code) and aging thereof of the Company as of the Closing Date; and (iii) a list and brief description of all motor vehicles owned by the Company. Except as disclosed in the Schedules, no amounts payable in connection with any of the Accounts are evidenced by promissory notes or other Instruments.

4.23

Brokers. All negotiations relative to this SPA and the Transaction have been carried on by the Company without the intervention of any other Person in such manner as to give rise to any valid claim for a finder's fee, brokerage commission or other like payment. 

4.24

Transactions Out of Ordinary Course of Business. From the date of the Financial Statement, the Company has not entered into any transaction out of the ordinary course of business.

4.25

Maintenance of Properties. From the date of the Financial Statement, the Company has maintained all of its properties in customary repair, order and condition (taking into consideration the age and condition thereof), reasonable wear and tear excepted, and has maintained insurance on all properties and with respect to the conduct of its Business, in such amounts and of such kinds usual and customary for a business of this kind.

4.26

Maintenance of Books. The Company has maintained its books, accounts and records in a manner and on a basis consistent with prior years.

 

4.27

Certain Prohibited Transactions. Except as set forth on Schedule 4.27 hereof, from the date of the Financial Statements, the Company has not (i) entered into any Contract to merge or consolidate with any other corporation; (ii) changed the character of its Business, or sold, transferred or otherwise disposed of any assets other than in the ordinary course of business;   (iii) entered into any new compensation or benefit Contracts with its employees; (iv) entered into any new or amended, or modified any existing collective bargaining Contract; (v) loaned any money; (vi) issued or contracted to issue any debt or guarantees of debt or otherwise pledged its credit other than in the ordinary course of business; (vii) created or permitted to exist any new Lien on its property or assets; (viii) entered into any joint venture, partnership or other arrangement for the conduct of its Business; (ix) declared or paid any dividend or other distribution in respect of shares of capital stock; (x) made any purchase, redemption or other acquisition, directly or indirectly, of any outstanding shares of its capital stock, (xi) forgiven, released or compromised any indebtedness owed to the Company by any employee or other Person except upon full payment or, in the case of any customer, returns and allowances made in the ordinary course of business consistent with past practices; (xii) paid any pension amount not required to be paid under any employee benefit pension plan as described in Section 4.19 hereof; (xiii) purchased any assets or securities of any Person, other than in the ordinary course of business, (xiv) created any new subsidiaries; or (xv) waived any rights or amended, modified, canceled or terminated any Contract.

4.28

Employee Matters. Except for the employees listed on Schedule 4.28 and those employees designated by the Buyer on Schedule 4.28 whose employment is to be terminated prior to Closing, (i) none of the employees of the Company who are needed and necessary to operate and maintain the Business have been terminated, discharged or have resigned;              (ii) the Company and the Seller have discussed or will discuss with their employees the transactions contemplated by this SPA and all of the employees of the Company needed or necessary to operate the Business have expressed a desire or intent to accept employment with  the Buyer, if so offered; and (iii) the Company currently has a skilled and adequate workforce to operate the Business.

4.29

Cash Disbursements. The Seller and the Executives will not cause the Company to make any disbursements of cash or any assets of material value to Executives between the Signing Date and the Closing Date, other than (i) salary and reimbursement of expense in the ordinary course of the Business, and (ii) monthly principal and interest payments necessary to discharge the Assumed Company Debt.

 

ARTICLE V

REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER

Buyer hereby represents, warrants and covenants to the Company and the Seller as follows, as of the Closing Date:

5.01

Organization. (i) TVG is a limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization; and (ii) Iron Eagle is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation. 

5.02

Authorization. Buyer has full corporate power, authority and legal right to execute and deliver, and to perform its obligations under, this SPA, and has taken all necessary action to authorize the acquisition of the Shares under the terms and conditions of this SPA and to authorize the execution, delivery and performance of this Agreement. This SPA has been duly executed by the Buyer and constitutes a legal, valid and binding obligation of Buyer enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, or other similar laws from time to time in effect, which affect the enforcement of creditors' rights in general and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 

5.03

Non-contravention. Neither the execution and the delivery of this SPA, nor the consummation of the Transaction will (i) violate the Securities Act, any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which the Buyer is subject or any provision of their respective charter or bylaws; or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which the Buyer is a party or by which either is bound or to which any of their respective assets is subject. Buyer covenants that it does not need to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the Parties to consummate the transactions contemplated by this SPA. 

5.04

Litigation. There is no suit, litigation, administrative, or other Proceeding or governmental investigation pending or, to the Knowledge of Buyer, threatened which might, severally or in the aggregate, materially and adversely affect the financial condition or prospects of Buyer or its ability to pay or perform their respective obligations under the SPA or the other Contracts and Instruments contemplated hereunder. 

5.05

Brokers. All negotiations relative to this SPA and the Transaction have been carried on by the Buyer without the intervention of any other Person in such manner as to give rise to any valid claim for a finder's fee, brokerage commission or other like payment.  

5.06

Obligation of Buyer to assist in the Operation the Business. Buyer and its officers, with the consent of the Executives as further described in the Employment Agreement(s), will provide guidance and support to assist in the growth and success of the Company which guidance and support shall include, but not be limited to: (i) targeting acquisitions, joint ventures and industry relationships, obtaining federal, state, and municipal contracts, increasing operational efficiencies, improving operational and financial controls, assisting in making decisions relating to employee salaries, bonuses, and retention, estimation of projects, making capital expenditures, increasing surety bonding program, reducing bonding and insurance costs, and generally providing guidance with respect to the overall health and direction of the Company. The Buyer further covenants and agrees that for the first seven (7) months after the Closing Date, Buyer will transfer no more than One Hundred Fifty Thousand ($150,000) Dollars from the Company to Iron Eagle, to be used for, solely, for expenses directly related to the public or private equity financing of the Transaction for the mutual benefit of the Seller, the Buyer, Iron Eagle and the Company.  Any amounts in excess thereof shall require the prior written consent of the Seller. 

 

5.07   Pre-Qualification Representation. Buyer acknowledges and understands that the Company is a pre-qualified vendor with the New York City School Construction Authority (herein referred to as the “SCA”) and the New York City Mayor’s Office of Contract Services (herein referred to as the “MOCS”), and is dependent upon business derived therefrom for a substantial amount of income to the Company.  The Buyer further acknowledges and understands that, in the event the Transaction occurs, the Company is required to re-qualify as a vendor with the SCA and the MOCS and, in doing so, must disclose certain personal information relating to the principals of the Buyer.  As such, the Buyer represents to the Company that the Buyer knows of no reason why the Company would not receive pre-qualification from the SCA and the MOCS after disclosure of such personal information.

ARTICLE VI

POST CLOSING COVENANTS

6.01

Survival of Representations and Warranties. All representations and warranties made in this SPA or in any Exhibit, Schedule, Instrument, certificate or document delivered herewith or at the Closing shall survive until the fourth (4th) anniversary of the Closing Date.  

6.02

Obligation of the Company and the Seller to Indemnify. The Company and the Seller hereby agree to jointly and severally indemnify, defend, save and hold the Buyer (and their respective members, managers, directors, officers, employees and agents) harmless from and against any and all damage, liability, loss, expense, assessment, judgment or deficiency of any nature whatsoever (including, without limitation, reasonable attorneys' fees and other costs and expenses incident to any suit, action or proceeding) (together “Losses”) incurred or sustained by such indemnified parties which arise out of or result from (i) the breach of any representation or warranty of the Company or the Seller set forth in Article IV, and (ii) the breach of or failure to perform any covenant of the Company and the Seller set forth in this SPA (including, but not limited to, any post-closing covenant). Notwithstanding the foregoing, (a) in no event will the Buyer be entitled to indemnification hereunder unless or until the aggregate Losses suffered by Buyer exceed One Hundred Fifty Thousand ($150,000.00) Dollars, whereupon all Losses suffered by Buyer shall be subject to indemnification hereunder. 

6.03

Obligation of Buyer to Indemnify.  The Buyer hereby agrees to indemnify, defend, save and hold the Company, their respective members, managers, directors, officer, employees, agents and the Seller harmless from and against any and all Losses incurred or sustained by such indemnified parties which arise out of or results from (i) the breach of any representation or warranty of Buyer set forth Article V above; (ii) the breach of or failure to perform any covenant of the Buyer set forth in this SPA. Notwithstanding the foregoing, (a) in no event will the Company or the Seller be entitled to indemnification hereunder unless or until the aggregate Losses suffered by the Company and the Seller exceed One Hundred Fifty Thousand ($150,000.00) Dollars, whereupon all Losses suffered by Company and the Seller shall be subject to indemnification hereunder; and (b) in no event will the Buyer be obligated to pay Losses in an aggregate amount which exceeds the Purchase Price actually paid in cash to Seller hereunder.

6.04

Procedures for Indemnification of Third Party Claims. Promptly after service of notice of any claim or of process by any third person in any matter in respect of which indemnity may be sought from a party pursuant to this SPA, the party so served will notify the indemnifying party of the receipt thereof. The indemnifying party will have the right to participate in, or assume, at its own expense, the defense of any such claim or process (with counsel reasonably acceptable to the indemnified party) or settlement thereof. After notice from the indemnifying party of its election so to assume the defense thereof, the indemnifying party will not be liable to the indemnified party for any legal or other expense incurred by the indemnified party in connection with such defense. Such defense will be conducted expeditiously (but with due regard for obtaining the most favorable outcome reasonably likely under the circumstances, taking into account costs and expenditures) and the indemnified party will be advised promptly of all material developments. The indemnifying party will not settle any such claim without the prior written consent of the indemnified party, which consent shall not be unreasonably withheld or delayed. With respect to any matter which is the subject of any such claim and as to which the indemnified party fails to give the other party such notice as aforesaid, and such failure adversely affects the ability of the indemnifying party to defend such claim or materially increases the amount of indemnification which the indemnifying party is obligated to pay hereunder, the amount of indemnification which the indemnified party will be entitled to receive will be reduced to an amount which the indemnified party would have been entitled to receive had such notice been timely given. No settlement of any such claim as to which the indemnifying party has not elected to assume the defense thereof will be made without the prior written consent of the indemnifying party, which consent will not be unreasonably withheld or delayed. 

6.05

Exclusive Remedy.  In the absence of fraud or willful misconduct, the provisions of Sections 6.02, 6.03 and 6.04 shall be the exclusive remedy of the parties in the event of a breach of the representations, warranties or covenants set forth in this Agreement. Notwithstanding the foregoing, nothing set forth in this Section 6.06 shall limit the right of a Party to seek and obtain the equity remedies of specific performance or temporary or permanent injunctive relief. 

6.06

Further Assurances. Following the Closing, at the request of Buyer, the Company and the Seller shall execute and deliver to Buyer such further documents and take such reasonable action as may be necessary or appropriate to (i) confirm the sale, transfer, assignment, conveyance and delivery of the Shares; or (ii) vest in Buyer all of Seller’s right, title and interest in the Company.

6.07

Intentionally Omitted.

6.08

Post Closing Undertakings and Covenants. 

(a)

Without in any way limiting the generality of Section 6.05, the Company and Seller agree that they will take all reasonable steps and cooperate with Buyer to: 

(i)

Undertake to assist Buyer and take all reasonable steps to cause  any and all Consents necessary to assign and transfer to Buyer any and all Contracts, Permits, licenses and other approvals reasonably required by the Buyer to effectuate and consummate the transactions contemplated hereunder (including, but not limited to, those Consents, Permits and licenses listed on the Schedules hereto);

(ii)

Undertake and promptly obtain (at their expense) any and all Consents necessary or otherwise advisable to assign and transfer to Buyer any and all surety bonds covering ongoing or completed jobs;

(iii)

Undertake to deliver any Consent relating to debt of the Company or the Seller required by a change of control in Company; and

(iv)

Undertake to deliver any other consent required by a change of control in Company.

(b)

Seller agrees that if any Consent, Permit, license, bond or approval has not been obtained or, if any attempted assignment would be ineffective, or would materially impair the Buyer's rights and obligations under an assigned Contract, Permit, license, bond or approval, so that Buyer would not in effect acquire the benefit of any such asset, Seller, at the Buyer's option agrees to cooperate in assisting Buyer and assist Buyer in taking any and all steps necessary to assign such Contract, Permit, license or bond as Buyer may reasonably request.

ARTICLE VII

MISCELLANEOUS

7.01

Severability. If any provision of this SPA or the application of any such provision to any party or circumstances shall be determined by any court of competent jurisdiction to be invalid and/or unenforceable to any extent, the remainder of this SPA and/or the application of such provision to such person or circumstances (other than those to which it is so determined to be invalid and unenforceable) shall not be affected thereby, and each provision hereof shall be validated and shall be enforced to the fullest extent permitted by law. 

7.02

Waivers. Any failure by any Party to comply with any of its obligations, agreements or covenants hereunder may be waived by the Company in the case of a default by the Buyer and by Buyer, in the case of a default by the Company or the Seller. The Buyer and the Company will not be deemed as a consequence of any act, delay, failure, omission, forbearance or other indulgences granted from time to time by the Buyer or the Company: (i) to have waived, or to be estopped from exercising, any of its rights or remedies under this SPA; or (ii) to have modified, changed, amended, terminated, rescinded, or superseded any of the terms of this SPA, unless such waiver, modification, amendment, change, termination, rescission, or supersession is express, in writing and signed by a duly authorized officer of the Company or a duly authorized officer of the Buyer, as the case may be. No single or partial exercise by the Buyer or the Company of any right or remedy will preclude other or further exercise thereof or preclude the exercise of any other right or remedy, and a waiver expressly made in writing on one (1) occasion will be effective only in that specific instance and only for the precise purpose for which given, and will not be construed as a consent to or a waiver of any right or remedy on any future occasion or a waiver of any right or remedy against any other Person. 

7.03

Intentionally Omitted. 

7.04

Notices. All notices, consents, demands, requests, approvals and other communications which are required or may be given hereunder shall be in writing and shall be deemed to have been duly given if personally delivered (including by overnight courier service):

(a)

If to the Company or the Seller:

Tru-Val Electrical Corporation 

205 South Newman Street

Hackensack, New Jersey 07601 

Attention: Chris Totaro

Telephone: 201.498.9200 

Facsimile:  201.498.9600

with a copy to: 

Toscano & Associates

200 Old Country Road, Suite 100

Mineola, New York 11501

Attention: Thomas A. Toscano

Telephone: 516.741.9300

Facsimile:  516.741.5608

(b)

If to Buyer:

Iron Eagle Group, Inc.

61 West 62nd Street, Suite 23F

New York, New York 10023

Attention: Jason M. Shapiro

Telephone: 917.969.4845

              Facsimile:  917.591.6227

with a copy to: 

Jody M Walker

Attorney at Law

7841 South Garfield Way

 

Centennial, Colorado  80122

(c)

or to such other person or persons at such address or addresses as may be designated by written notice to the other parties hereunder. Notice shall be deemed delivered at the time received.

7.05

Binding Effect. This SPA shall inure to the benefit of and be binding upon the Parties hereto and their respective successors and assigns; provided, however, that nothing in this SPA shall be construed to confer any rights, remedies, obligations or liabilities on any Person other than the Parties hereto or their respective successors and assigns. 

7.06

Entire Agreement. With the exception of that certain Letter of Intent, dated November 16, 2011 between Company and Iron Eagle (which shall continue in full force and effect in accordance with its terms notwithstanding this SPA), this SPA, together with the other Instruments delivered in connection herewith, embodies the entire agreement and understanding of the Parties hereto and supersedes any prior agreement or understanding between the Parties with respect to the subject matter of this SPA. This SPA cannot be amended or terminated orally, but only by a writing duly executed by the Parties. 

7.07

Counterparts; Signatures. This SPA may be executed in one (1) or more counterparts, each of which shall be deemed an original but all of which together shall constitute one (1) and the same document. The parties hereto and any third parties may rely upon machine copies of signatures to this Agreement to the same extent as manually signed original signatures.

7.08

Headings. Headings of the sections in this SPA are for reference purposes only and shall not be deemed to have any substantive effect. 

7.09

Assignment. This SPA may not be assigned by either party without the prior written consent of the other. 

7.10

Applicable Law. THIS SPA SHALL BE GOVERNED AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES OR THOSE OF ANY OTHER JURISDICTION. 

7.11

Press Releases and Public Announcements.  No Party shall issue any press release or make any public announcement relating to the subject matter of this SPA without the prior approval of the other Party, whose approval shall not be unreasonably denied; provided, however, that any Party may make any public disclosure it believes in good faith is required by applicable law or any listing or trading agreement concerning its publicly-traded securities (in which case the disclosing Party will provide the other Party with the opportunity to review in advance the disclosure).

7.12

No Third Party Beneficiaries.  This SPA shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns.

7.13

Separate Legal Counsel.  Each of the Parties has had the opportunity to consult with its own legal counsel prior to signing and delivering this SPA, has read and understands such SPA and has signed and delivered the same with the intent to be legally bound hereby.

(Remainder of Page Intentionally Left Blank)

1

 IN WITNESS WHEREOF, the Parties hereto have executed this SPA on the date first set forth above.

BUYER:

Tru-Val Electric Group, LLC

By:

Name:

______________________________

Title:

______________________________

Iron Eagle Group, Inc.

By:

Name:

Edward English

Title:

Chief Executive Officer

SELLER:

____________________________________

Christopher Totaro, An Individual

COMPANY:

Tru-Val Electric Corp.

By:

Name:

Christopher Totaro

Title:

President

2

LIST OF ATTACHMENTS

Exhibits

Title

Exhibit A

Leases

Exhibit B

Opinion of Company’s Counsel

Exhibit C

Opinion of Buyer’s Counsel

Exhibit D

Certificate of Shares

Schedules

Schedule 2.02(a)

Assumed Company Debt

Schedule 4.01(b)

Organization  

Schedule 4.01(c)

List of Officers, Directors and Employees

Schedule 4.03

Subsidiaries and Affiliates

Schedule 4.04

Financial Statements

Schedule 4.05

Undisclosed Liabilities

Schedule 4.06

No Material Adverse Change

Schedule 4.08

Real Property

Schedule 4.09

Title To Assets

Schedule 4.11

Insurance

Schedule 4.12

Intellectual Property

Schedule 4.13

Litigation

Schedule 4.14

Governmental and Other Consents

Schedule 4.15

Permits

Schedule 4.16

Compliance

Schedule 4.18

Additional Agreements, Contracts and Instruments  

Schedule 4.19

Tru-Val 401(k) Plan

Schedule 4.20

Environmental Matters

Schedule 4.21

Customers and Suppliers

Schedule 4.22

Other Assets

Schedule 4.27

Prohibited Transactions

Schedule 4.28

Employee Matters

                          

3

DISCLOSURE SCHEDULES

TO

SHAREHOLDER SPA

INTRODUCTION

The following Disclosure Schedules are provided by the Company and the Seller pursuant to the foregoing SPA.  They are qualified in their entirety by reference to the provisions of the SPA to which they are attached.  These Disclosure Schedules constitute representations or warranties of such party or parties only to the extent provided in the SPA. Inclusion of information herein shall not be construed as a representation that such information is material to the operations or financial condition of the Company. Unless otherwise provided in these Disclosure Schedules, capitalized terms set forth below have the meanings ascribed to them in the SPA.

Matters reflected in these Disclosure Schedules are not necessarily limited to matters required by the SPA to be reflected herein.  Such additional matters are set forth for informational purposes and do not necessarily include other matters of similar nature.  Descriptive headings have been inserted for convenience of reference only and shall to no extent have the effect of amending or changing the express terms of the SPA.  Matters disclosed in any particular section of the foregoing Disclosure Schedule for any purpose under the SPA shall be deemed to be disclosed for all purposes under the Agreement. 

These Disclosure Schedules are incorporated by this reference into the SPA and made a part thereof.

4

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