ACQUISITION AGREEMENT AND PLAN OF MERGER
DATED AS OF FEBRUARY 4, 2000
BETWEEN
WORLDNET RESOURCE GROUP, INC.
AND
NAVITEC GROUP, INC
TABLE OF CONTENTS
ARTICLE 1. The Merger
Section 1.1. The Merger
Section 1.2. Effective Time
Section 1.3. Closing of the Merger
Section 1.4. Effects of the Merger
Section 1.5. Board of Directors and Officers
Section 1.6. Conversion of Shares
Section 1.7. Exchange of Certificates
Section 1.8. Stock Options
Section 1.9. Taking of Necessary Action; Further Action
ARTICLE 2. Representations and Warranties of WRGI
Section 2.1. Organization and Qualification
Section 2.2. Capitalization of WRGI
Section 2.3.Authority Relative to this Agreement; Recommendation.
Section 2.4. SEC Reports; Financial Statements
Section 2.5. Information Supplied
Section 2.6. Consents and Approvals; No Violations
Section 2.7. No Default
Section 2.8. No Undisclosed Liabilities; Absence of Changes
Section 2.9. Litigation
Section 2.10. Compliance with Applicable Law
Section 2.11. Employee Benefit Plans; Labor Matters
Section 2.12. Environmental Laws and Regulations
Section 2.13. Tax Matters
Section 2.14. Title To Property
Section 2.15. Intellectual Property
Section 2.16. Insurance
Section 2.17. Vote Required
Section 2.18. Tax Treatment
Section 2.19. Affiliates
Section 2.20. Certain Business Practices
Section 2.21. Insider Interests
Section 2.22. Opinion of Financial Adviser
Section 2.23. Brokers
Section 2.24. Disclosure
Section 2.25. No Existing Discussion
Section 2.26. Material Contracts
ARTICLE 3. Representations and Warranties of NAVITEC.
Section 3.1. Organization and Qualification
Section 3.2. Capitalization of NAVITEC
Section 3.3.Authority Relative to this Agreement; Recommendation
Section 3.4. SEC Reports; Financial Statements
Section 3.5. Information Supplied
Section 3.6. Consents and Approvals; No Violations
Section 3.7. No Default
Section 3.8 No Undisclosed Liabilities; Absence of Changes
Section 3.9. Litigation
Section 3.10. Compliance with Applicable Law
Section 3.11. Employee Benefit Plans; Labor Matters
Section 3.12. Environmental Laws and Regulations
Section 3.13. Tax Matters
Section 3.14. Title to Property
Section 3.15. Intellectual Property
Section 3.16. Insurance
Section 3.17. Vote Required
Section 3.18. Tax Treatment
Section 3.19. Affiliates
Section 3.20. Certain Business Practices
Section 3.21. Insider Interests
Section 3.22. Opinion of Financial Adviser
Section 3.23. Brokers
Section 3.24. Disclosure
Section 3.25. No Existing Discussions
Section 3.26. Material Contracts
ARTICLE 4. Covenants
Section 4.1. Conduct of Business of WRGI
Section 4.2. Conduct of Business of NAVITEC
Section 4.3. Preparation of 8-K and the Proxy Statement
Section 4.4. Other Potential Acquirers
Section 4.5. Meetings of Stockholders
Section 4.6. NASD OTC:BB Listing
Section 4.7. Access to Information
Section 4.8. Additional Agreements; Reasonable Efforts.
Section 4.9.Employee Benefits; Stock Option and Employee Purchase Plans
Section 4.10. Public Announcements
Section 4.11. Indemnification
Section 4.12. Notification of Certain Matters
ARTICLE 5. Conditions to Consummation of the Merger
Conditions to Each Party's Obligations to Effect the
Section 5.1. Merger
Section 5.2. Conditions to the Obligations of WRGI
Section 5.3. Conditions to the Obligations of NAVITEC
ARTICLE 6. Termination; Amendment; Waiver
Section 6.1. Termination
Section 6.2. Effect of Termination
Section 6.3. Fees and Expenses
Section 6.4. Amendment
Section 6.5. Extension; Waiver
ARTICLE 7. Miscellaneous
Section 7.1. Nonsurvival of Representations and Warranties
Section 7.2. Entire Agreement; Assignment
Section 7.3. Validity
Section 7.4. Notices
Section 7.5. Governing Law
Section 7.6. Descriptive Headings
Section 7.7. Parties in Interest
Section 7.8. Certain Definitions
Section 7.9. Personal Liability
Section 7.10. Specific Performance
Section 7.11. Counterparts
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement"), dated as of
February 4, 2000, is between WORLDNET RESOURCE GROUP, INC., a Utah
corporation ("WRGI"), and NAVITEC GROUP, INC., a Nevada corporation
("NAVITEC").
Whereas, the Boards of Directors of WRGI and NAVITEC each have, in light
of and subject to the terms and conditions set forth herein, (i) determined
that the Merger (as defined below) is fair to their respective stockholders
and in the best interests of such stockholders and (ii) approved the Merger
in accordance with this Agreement;
Whereas, for Federal income tax purposes, it is intended that the Merger
qualify as a reorganization under the provisions of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"); and
Whereas, WRGI and NAVITEC desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also
to prescribe various conditions to the Merger.
Now, therefore, in consideration of the promises and the
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, WRGI and NAVITEC hereby agree as
follows:
ARTICLE I
The Merger
Section 1.1. The Merger. At the Effective Time (as defined below) and
upon the terms and subject to the conditions of this Agreement and in
accordance with the General Corporation Law of the State of Nevada (the
"NGCL") and the Utah Revised Business Corporation Act (the "UGCL"), NAVITEC
shall be merged with and into WRGI (as defined below) (the ''Merger`).
Following the Merger, WRGI shall continue as the successor issuers (the
"Successor Corporation"), shall continue to be governed by the laws of the
jurisdiction of its incorporation or organization and the separate corporate
existence of NAVITEC shall cease. Prior to the Effective Time, the parties
hereto shall mutually agree as to the name of the Successor Corporation;
however, initially the Successor Corporation shall be named WORLDNET RESOURCE
GROUP, INC.. a Utah corporation. The Merger is intended to qualify as a
tax-free reorganization under Section 368 of the Code as relates to the non-
cash exchange of stock referenced herein.
Section 1.2. Effective Time. Subject to the terms and conditions set forth in
this Agreement, a Certificate of Merger (the "Merger Certificate") shall be
duly executed and acknowledged by each of NAVITEC and WRGI, and thereafter
the Merger Certificate reflecting the Merger shall be delivered to the
Secretary of State of the State of Nevada and the Secretary of State of the
State of Utah for filing pursuant to the NGCL and UGCL on the Closing Date
(as defined in Section 1.3). The Merger shall become effective at such time
as a properly executed and certified copy of the Merger Certificate is duly
filed by the Secretary of State of the State of Nevada and the Secretary of
State of the State of Nevada in accordance with the NGCL and UGCL or such
later time as the parties may agree upon and set forth in the Merger
Certificate (the time at which the Merger becomes effective shall be referred
to herein as the "Effective Time").
Section 1.3. Closing of the Merger. The closing of the Merger (the
"Closing") will take place at a time and on a date to be specified by the
parties, which shall be no later than the second business day after
satisfaction of the latest to occur of the conditions set forth in Article 5
(the "Closing Date"), at the offices of Sperry Young & Xxxxxxxxxx, 0000 X.
Xxxxxxxx Xx., Xxxxx 000, Xxx Xxxxx, Xxxxxx, unless another time, date or
place is agreed to in writing by the parties hereto.
Section 1.4. Effects of the Merger. The Merger shall have the effects
set forth in the NGCL and UGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the properties,
rights, privileges, powers of NAVITEC shall vest in the Successor
Corporation, and all debts, liabilities and duties of NAVITEC shall become
the debts, liabilities and duties of the Successor Corporation.
Section 1.5. Board of Directors and Officers of WRGI. At or prior to the
Effective Time, each of NAVITEC and WRGI agrees to take such action as is
necessary (i) to cause the number of directors comprising the full Board of
Directors of WRGI to remain the same
Section 1.6. Conversion of Shares. At the Effective Time, each share of
common stock, par value $.001 per share of NAVITEC (individually a "NAVITEC
Share" and collectively, the "NAVITEC Shares") issued and outstanding
immediately prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of NAVITEC, WRGI, or the holder thereof, be
converted into and shall become fully paid and nonassessable WRGI common
shares determined by issuing approximately one (1) share of WRGI common share
for every 2400 shares of NAVITEC.
Section 1.7. Exchange of Certificates.
(a) Prior to the Effective Time, WRGI shall enter into an agreement
with, and shall deposit with, Sperry Young & Xxxxxxxxxx, or such other agent
or agents as may be satisfactory to WRGI and NAVITEC (the "Exchange Agent'),
for the benefit of the holders of NAVITEC Shares, for exchange through the
Exchange Agent in accordance with this Article I: (i) certificates
representing the appropriate number of WRGI Shares to be issued to holders of
NAVITEC Shares issuable pursuant to Section 1.6 in exchange for outstanding
NAVITEC Shares.
(b) As soon as reasonably practicable after the Effective Time, the
Exchange Agent shall mail to each holder of record of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding NAVITEC Shares (the "Certificates") whose shares were converted
into the right to receive WRGI Shares pursuant to Section 1.6: (i) a letter
of transmittal (which shall specify that delivery shall be effected, and risk
of loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such
other provisions as NAVITEC and WRGI may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in
exchange for certificates representing WRGI Shares. Upon surrender of a
Certificate to the Exchange Agent, together with such letter of transmittal,
duly executed, and any other required documents, the holder of such
Certificate shall be entitled to receive in exchange therefore a certificate
representing that number of whole WRGI Shares, which such holder has the
right to receive pursuant to the provisions of this Article I, and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of NAVITEC Shares which are not registered in the
transfer records of NAVITEC, a certificate representing the proper number of
WRGI Shares may be issued to a transferee if the Certificate representing
such NAVITEC Shares is presented to the Exchange Agent accompanied by all
documents required by the Exchange Agent or WRGI to evidence and effect such
transfer and by evidence that any applicable stock transfer or other taxes
have been paid. Until surrendered as contemplated by this Section 1.7, each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender the certificate representing
WRGI Shares as contemplated by this Section 1.7.
(c) No dividends or other distributions declared or made after the
Effective Time with respect to WRGI Shares with a record date after the
Effective Time shall be paid to the holder of any unsurrendered Certificate
with respect to the WRGI Shares represented thereby until the holder of
record of such Certificate shall surrender such Certificate.
(d) In the event that any Certificate for NAVITEC Shares or WRGI Shares
shall have been lost, stolen or destroyed, the Exchange Agent shall issue in
exchange therefore, upon the making of an affidavit of that fact by the
holder thereof such WRGI Shares and cash in lieu of fractional WRGI Shares,
if any, as may be required pursuant to this Agreement; provided, however,
that WRGI or the Exchange Agent, may, in its respective discretion, require
the delivery of a suitable bond, opinion or indemnity.
(e) All WRGI Shares issued upon the surrender for exchange of NAVITEC
Shares in accordance with the terms hereof shall be deemed to have been
issued in full satisfaction of all rights pertaining to such NAVITEC Shares.
There shall be no further registration of transfers on the stock transfer
books of either of NAVITEC or WRGI of the NAVITEC Shares or WRGI Shares which
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to WRGI for any reason, they shall
be canceled and exchanged as provided in this Article I.
(f) No fractional WRGI Shares shall be issued in the Merger, but in lieu
thereof each holder of NAVITEC Shares otherwise entitled to a fractional WRGI
Share shall, upon surrender of its, his or her Certificate or Certificates,
be entitled to receive an additional share to round up to the nearest round
number of shares.
Section 1.8. Taking of Necessary Action; Further Action. If, at any time
after the Effective Time, NAVITEC or WRGI reasonably determines that any
deeds, assignments, or instruments or confirmations of transfer are necessary
or desirable to carry out the purposes of this Agreement and to vest WRGI
with full right, title and possession to all assets, property, rights,
privileges, powers and franchises of NAVITEC, the officers and directors of
WRGI and NAVITEC are fully authorized in the name of their respective
corporations or otherwise to take, and will take, all such lawful and
necessary or desirable action.
ARTICLE 2
Representations and Warranties of WRGI
Except as set forth on the Disclosure Schedule delivered by WRGI to
NAVITEC (the "WRGI Disclosure Schedule"), WRGI hereby represents and warrants
to NAVITEC as follows:
Section 2.1. Organization and Qualification.
(a) WRGI is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization, has 300 or
more round lot (100 or more shares) stockholders and has all requisite power
and authority to own, lease and operate its properties and to carry on its
businesses as now being conducted, except where the failure to be so
organized, existing and in good standing or to have such power and authority
would not have a Material Adverse Effect (as defined below) on WRGI. When
used in connection with WRGI, the term "Material Adverse Effect" means any
change or effect (i) that is or is reasonably likely to be materially adverse
to the business, results of operations, condition (financial or otherwise) or
prospects of WRGI, other than any change or effect arising out of general
economic conditions unrelated to any business in which WRGI is engaged, or
(ii) that may impair the ability of WRGI to perform its obligations hereunder
or to consummate the transactions contemplated hereby.
(b) WRGI has heretofore delivered to NAVITEC accurate and complete
copies of the Certificate of Incorporation and Bylaws (or similar governing
documents), as currently in effect, of WRGI. Except as set forth on Schedule
2.1 of the WRGI Disclosure Schedule, WRGI is duly qualified or licensed and
in good standing to do business in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary, except in such jurisdictions
where the failure to be so duly qualified or licensed and in good standing
would not have a Material Adverse Effect on WRGI.
Section 2.2. Capitalization of WRGI.
(a) The authorized capital stock of WRGI consists of: (i) One Hundred
Million (100,000,000) Shares of Common Stock, $0.001 par value; and (ii)
Fifty Million (50,000,000) Shares of Preferred Stock, $.001 par value. On
January 31, 2000 there were 80,584,532 shares of common stock issued and
outstanding. There are no issued and outstanding Preferred shares. On January
31, 2000 WRGI's board of directors approved a 1 for 12 reverse split
providing for a total issued and outstanding of common shares of 6,715,378
post split. This reverse split has not been reflected on the most recent list
of stockholders or on the records of the National Association of Securities
Dealers. Pursuant to the Merger Agreement WRGI will issue approximately 2,083
shares of 144 restricted common stock to the stockholder of NAVITEC. All of
the outstanding WRGI Shares have been duly authorized and validly issued, and
are fully paid, nonassessable and free of preemptive rights. Except as set
forth herein, as of the date hereof, there are no outstanding (i) shares of
capital stock or other voting securities of WRGI, (ii) securities of WRGI
convertible into or exchangeable for shares of capital stock or voting
securities of WRGI, (iii) options or other rights to acquire from WRGI and,
no obligations of WRGI to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of WRGI, except as required by this Merger, and (iv) equity
equivalents, interests in the ownership or earnings of WRGI or other similar
rights (collectively, "WRGI Securities"). As of the date hereof, except as
set forth on Schedule 2.2(a) of the WRGI Disclosure Schedule there are no
outstanding obligations of WRGI or its subsidiaries to repurchase, redeem or
otherwise acquire any WRGI Securities or stockholder agreements, voting
trusts or other agreements or understandings to which WRGI is a party or by
which it is bound relating to the voting or registration of any shares of
capital stock of WRGI. For purposes of this Agreement, ''Lien" means, with
respect to any asset (including, without limitation, any security) any
mortgage, lien, pledge, charge, security interest or encumbrance of any kind
in respect of such asset.
(b) The WRGI Shares constitute the only class of equity securities of
WRGI registered or required to be registered under the Exchange Act.
(c) WRGI does not own directly or indirectly more than fifty percent
(50%) of the outstanding voting securities or interests (including membership
interests) of any entity, other than as specifically disclosed in the
disclosure documents.
Section 2.3. Authority Relative to this Agreement; Recommendation. WRGI
has all necessary corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of WRGI (the "WRGI Board") and no other corporate
proceedings on the part of WRGI are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by WRGI and constitutes a valid,
legal and binding agreement of WRGI, enforceable against WRGI in accordance
with its terms.
Section 2.4. SEC Reports; Financial Statements. WRGI is not required to
file forms, reports and documents with the SEC.
Section 2.5. Information Supplied. None of the information supplied or
to be supplied by WRGI for inclusion or incorporation by reference in
connection with the Merger will at the date presented to stockholder of
NAVITEC and at the times of the meeting or meetings of stockholders of WRGI
to be held in connection with the Merger, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.
Section 2.6. Consents and Approvals; No Violations. Except for filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Securities Act, the Exchange Act, state
securities or blue sky laws, the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1916, as amended (the ''HSR Act''), the rules of the National Association
of Securities Dealers, Inc. ("NASD"), the filing and recordation of the
Merger Certificate as required by the NGCL, and as set forth on Schedule 2.6
of the WRGI Disclosure Schedule no filing with or notice to, and no permit,
authorization, consent or approval of, any court or tribunal or
administrative, governmental or regulatory body, agency or authority (a
"Governmental Entity") is necessary for the execution and delivery by WRGI of
this Agreement or the consummation by WRGI of the transactions contemplated
hereby, except where the failure to obtain such permits, authorizations,
consents or approvals or to make such filings or give such notice would not
have a Material Adverse Effect on WRGI.
Except as set forth in Section 2.6 of the WRGI Disclosure Schedule,
neither the execution, delivery and performance of this Agreement by WRGI nor
the consummation by WRGI of the transactions contemplated hereby will (i)
conflict with or result in any breach of any provision of the respective
Certificate of Incorporation or Bylaws (or similar governing documents) of
WRGI, (ii) result in a violation or breach of, or constitute (with or without
due notice or lapse of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration or Lien) under, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, license, contract, agreement or other instrument or obligation to
which WRGI is a party or by which any of its properties or assets may be
bound, or (iii) violate any order, writ, injunction, decree, law, statute,
rule or regulation applicable to WRGI or any of its properties or assets,
except in the case of (ii) or (iii) for violations, breaches or defaults
which would not have a Material Adverse Effect on WRGI.
Section 2.7. No Default. Except as set forth in Section 2.7 of the WRGI
Disclosure Schedule, WRGI is not in breach, default or violation (and no
event has occurred which with notice or the lapse of time or both would
constitute a breach default or violation) of any term, condition or provision
of (i) its Certificate of Incorporation or Bylaws (or similar governing
documents), (ii) any note, bond, mortgage, indenture, lease, license,
contract, agreement or other instrument or obligation to which WRGI is now a
party or by which any of its respective properties or assets may be bound or
(iii) any order, writ injunction, decree, law, statute, rule or regulation
applicable to WRGI or any of its respective properties or assets, except in
the case of (ii) or (iii) for violations, breaches or defaults that would not
have a Material Adverse Effect on WRGI. Except as set forth in Section 2.7 of
the WRGI Disclosure Schedule, each note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or obligation to which WRGI
is now a party or by which its respective properties or assets may be bound
that is material to WRGI and that has not expired is in full force and effect
and is not subject to any material default thereunder of which WRGI is aware
by any party obligated to WRGI thereunder.
Section 2.8. No Undisclosed Liabilities; Absence of Changes. Except as
and to the extent disclosed by WRGI of approximately $1.2 million in certain
bridge loan obligations, none of WRGI or its subsidiaries had any liabilities
or obligations of any nature, whether or not accrued, contingent or
otherwise, that would be required by generally accepted accounting principles
to be reflected on a consolidated balance sheet of WRGI and its consolidated
subsidiaries (including the notes thereto) or which would have a Material
Adverse Effect on WRGI. Except as disclosed by WRGI, none of WRGI or its
subsidiaries has incurred any liabilities of any nature, whether or not
accrued, contingent or otherwise, which could reasonably be expected to have,
and there have been no events, changes or effects with respect to WRGI or its
subsidiaries having or which could reasonably be expected to have, a Material
Adverse Effect on WRGI. Except as and to the extent disclosed by WRGI there
has not been (i) any material change by WRGI in its accounting methods,
principles or practices (other than as required after the date hereof by
concurrent changes in generally accepted accounting principles), (ii) any
revaluation by WRGI of any of its assets having a Material Adverse Effect on
WRGI, including, without limitation, any write-down of the value of any
assets other than in the ordinary course of business or (iii) any other
action or event that would have required the consent of any other party
hereto pursuant to Section 4.2 of this Agreement had such action or event
occurred after the date of this Agreement.
Section 2.9. Litigation. Except as set forth in Schedule 2.9 of the WRGI
Disclosure Schedule there is no suit, claim, action, proceeding or
investigation pending or, to the knowledge of WRGI, threatened against WRGI
or any of its subsidiaries or any of their respective properties or assets
before any Governmental Entity which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on WRGI or could
reasonably be expected to prevent or delay the consummation of the
transactions contemplated by this Agreement. Except as disclosed by WRGI,
none of WRGI or its subsidiaries is subject to any outstanding order, writ,
injunction or decree which, insofar as can be reasonably foreseen in the
future, could reasonably be expected to have a Material Adverse Effect on
WRGI or could reasonably be expected to prevent or delay the consummation of
the transactions contemplated hereby.
Section 2.10. Compliance with Applicable Law. Except as disclosed by
WRGI, WRGI and its subsidiaries hold all permits, licenses, variances,
exemptions, orders and approvals of all Governmental Entities necessary for
the lawful conduct of their respective businesses (the "WRGI Permits"),
except for failures to hold such permits, licenses, variances, exemptions,
orders and approvals which would not have a Material Adverse Effect on WRGI.
Except as disclosed by WRGI, WRGI and its subsidiaries are in compliance with
the terms of the WRGI Permits, except where the failure so to comply would
not have a Material Adverse Effect on WRGI. Except as disclosed by WRGI, the
businesses of WRGI and its subsidiaries are not being conducted in violation
of any law, ordinance or regulation of any Governmental Entity except that no
representation or warranty is made in this Section 2.10 with respect to
Environmental Laws and except for violations or possible violations which do
not, and, insofar as reasonably can be foreseen, in the future will not, have
a Material Adverse Effect on WRGI. Except as disclosed by WRGI no
investigation or review by any Governmental Entity with respect to WRGI or
its subsidiaries is pending or, to the knowledge of WRGI, threatened, nor, to
the knowledge of WRGI, has any Governmental Entity indicated an intention to
conduct the same, other than, in each case, those which WRGI reasonably
believes will not have a Material Adverse Effect on WRGI.
Section 2.11. Employee Benefit Plans; Labor Matters.
(a) Except as set forth in Section 2.11(a) of the WRGI Disclosure
Schedule with respect to each employee benefit plan, program, policy,
arrangement and contract (including, without limitation, any "employee
benefit plan," as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), maintained or contributed to at
any time by WRGI or any entity required to be aggregated with WRGI pursuant
to Section 414 of the Code (each, a "WRGI Employee Plan"), no event has
occurred and to the knowledge of WRGI, no condition or set of circumstances
exists in connection with which WRGI could reasonably be expected to be
subject to any liability which would have a Material Adverse Effect on WRGI.
(b) (i) No WRGI Employee Plan is or has been subject to Title IV of
ERISA or Section 412 of the Code; and (ii) each WRGI Employee Plan intended
to qualify under Section 401(a) of the Code and each trust intended to
qualify under Section 501(a) of the Code is the subject of a favorable
Internal Revenue Service determination letter, and nothing has occurred which
could reasonably be expected to adversely affect such determination.
(c) Section 2.11(c) of the WRGI Disclosure Schedule sets forth a true
and complete list, as of the date of this Agreement, of each person who holds
any WRGI Stock Options, together with the number of WRGI Shares which are
subject to such option, the date of grant of such option, the extent to which
such option is vested (or will become vested as a result of the Merger), the
option price of such option (to the extent determined as of the date hereof),
whether such option is a nonqualified stock option or is intended to qualify
as an incentive stock option within the meaning of Section 422(b) of the
Code, and the expiration date of such option. Section 2.11(c) of the WRGI
Disclosure Schedule also sets forth the total number of such incentive stock
options and such nonqualified options. WRGI has furnished NAVITEC with
complete copies of the plans pursuant to which the WRGI Stock Options were
issued. Other than the automatic vesting of WRGI Stock Options that may occur
without any action on the part of WRGI or its officers or directors, WRGI has
not taken any action that would result in any WRGI Stock Options that are
unvested becoming vested in connection with or as a result of the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(d) WRGI has made available to NAVITEC (i) a description of the terms of
employment and compensation arrangements of all officers of WRGI and a copy
of each such agreement currently in effect; (ii) copies of all agreements
with consultants who are individuals obligating WRGI to make annual cash
payments in an amount exceeding $60,000; (iii) a schedule listing all
officers of WRGI who have executed a non-competition agreement with WRGI and
a copy of each such agreement currently in effect; (iv) copies (or
descriptions) of all severance agreements, programs and policies of WRGI with
or relating to its employees, except programs and policies required to be
maintained by law; and (v) copies of all plans, programs, agreements and
other arrangements of WRGI with or relating to its employees which contain
change in control provisions all of which are set forth in Section 2.11(d) of
the WRGI Disclosure Schedule.
(e) There shall be no payment, accrual of additional benefits,
acceleration of payments, or vesting in any benefit under any WRGI Employee
Plan or any agreement or arrangement disclosed under this Section 2.11 solely
by reason of entering into or in connection with the transactions
contemplated by this Agreement.
(f) There are no controversies pending or, to the knowledge of WRGI,
threatened, between WRGI and any of their employees, which controversies have
or could reasonably be expected to have a Material Adverse Effect on WRGI.
Neither WRGI nor any of its subsidiaries is a party to any collective
bargaining agreement or other labor union contract applicable to persons
employed by WRGI or any of its subsidiaries (and neither WRGI nor any of its
subsidiaries has any outstanding material liability with respect to any
terminated collective bargaining agreement or labor union contract), nor does
WRGI know of any activities or proceedings of any labor union to organize any
of its or employees. WRGI has no knowledge of any strike, slowdown, work
stoppage, lockout or threat thereof, by or with respect to any of its
employees.
Section 2.12. Environmental Laws and Regulations.
(a) Except as publicly disclosed by WRGI in the WRGI SEC Reports, (i)
WRGI is in material compliance with all applicable federal, state, local and
foreign laws and regulations relating to pollution or protection of human
health or the environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata)
(collectively, "Environmental Laws"), except for non-compliance that would
not have a Material Adverse Effect on WRGI, which compliance includes, but is
not limited to, the possession by WRGI of all material permits and other
governmental authorizations required under applicable Environmental Laws, and
compliance with the terms and conditions thereof; (ii) WRGI has not received
written notice of, or, to the knowledge of WRGI, is the subject of, any
action, cause of action, claim, investigation, demand or notice by any person
or entity alleging liability under or non-compliance with any Environmental
Law (an ''Environmental Claim") that could reasonably be expected to have a
Material Adverse Effect on WRGI; and (iii) to the knowledge of WRGI, there
are no circumstances that are reasonably likely to prevent or interfere with
such material compliance in the future.
(b) Except as publicly disclosed by WRGI, there are no Environmental
Claims which could reasonably be expected to have a Material Adverse Effect
on WRGI that are pending or, to the knowledge of WRGI, threatened against
WRGI or, to the knowledge of WRGI, against any person or entity whose
liability for any Environmental Claim WRGI has or may have retained or
assumed either contractually or by operation of law.
Section 2.13. Tax Matters.
(a) Except as set forth in Section 2.13 of the WRGI Disclosure Schedule:
(i) WRGI has filed or has had filed on its behalf in a timely manner (within
any applicable extension periods) with the appropriate Governmental Entity
all income and other material Tax Returns (as defined herein) with respect to
Taxes (as defined herein) of WRGI and all Tax Returns were in all material
respects true, complete and correct; (ii) all material Taxes with respect to
WRGI have been paid in full or have been provided for in accordance with GAAP
on WRGI's most recent balance sheet which is part of the WRGI SEC Documents.
(iii) there are no outstanding agreements or waivers extending the statutory
period of limitations applicable to any federal, state, local or foreign
income or other material Tax Returns required to be filed by or with respect
to WRGI; (iv) to the knowledge of WRGI none of the Tax Returns of or with
respect to WRGI is currently being audited or examined by any Governmental
Entity; and (v) no deficiency for any income or other material Taxes has been
assessed with respect to WRGI which has not been abated or paid in full.
(b) For purposes of this Agreement, (i) "Taxes" shall mean all taxes,
charges, fees, levies or other assessments, including, without limitation,
income, gross receipts, sales, use, ad valorem, goods and services, capital,
transfer, franchise, profits, license, withholding, payroll, employment,
employer health, excise, estimated, severance, stamp, occupation, property or
other taxes, customs duties, fees, assessments or charges of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts imposed by any taxing authority and (ii) "Tax Return"
shall mean any report, return, documents declaration or other information or
filing required to be supplied to any taxing authority or jurisdiction with
respect to Taxes.
Section 2.14. Title to Property. WRGI has good and defensible title to
all of its properties and assets, free and clear of all liens, charges and
encumbrances except liens for taxes not yet due and payable and such liens or
other imperfections of title, if any, as do not materially detract from the
value of or interfere with the present use of the property affected thereby
or which, individually or in the aggregate, would not have a Material Adverse
Effect on WRGI; and, to WRGI's knowledge, all leases pursuant to which WRGI
leases from others real or personal property are in good standing, valid and
effective in accordance with their respective terms, and there is not, to the
knowledge of WRGI, under any of such leases, any existing material default or
event of default (or event which with notice of lapse of time, or both, would
constitute a default and in respect of which WRGI has not taken adequate
steps to prevent such a default from occurring) except where the lack of such
good standing, validity and effectiveness, or the existence of such default
or event, would not have a Material Adverse Effect on WRGI.
Section 2.15. Intellectual Property.
(a) WRGI owns, or possesses adequate licenses or other valid rights to
use, all existing United States and foreign patents, trademarks, trade names,
service marks, copyrights, trade secrets and applications therefore that are
material to its business as currently conducted (the "WRGI Intellectual
Property Rights").
(b) The validity of the WRGI Intellectual Property Rights and the title
thereto of WRGI is not being questioned in any litigation to which WRGI is a
party.
(c) Except as set forth in Section 2.15(c) of the WRGI Disclosure
Schedule, the conduct of the business of WRGI as now conducted does not, to
WRGI's knowledge, infringe any valid patents, trademarks, trade names,
service marks or copyrights of others. The consummation of the transactions
completed hereby will not result in the loss or impairment of any WRGI
Intellectual Property Rights.
(d) WRGI has taken steps it believes appropriate to protect and maintain
its trade secrets as such, except in cases where WRGI has elected to rely on
patent or copyright protection in lieu of trade secret protection.
Section 2.16. Insurance. WRGI currently does not maintain general
liability and other business insurance.
Section 2.17. Vote Required. Approval of this Agreement and Plan of
Merger by the Stockholders of WRGI is not required pursuant to NRS
92A.130(i).
Section 2.18. Tax Treatment. Neither WRGI nor, to the knowledge of WRGI,
any of its affiliates has taken or agreed to take action that would prevent
the Merger from constituting a reorganization qualifying under the provisions
of Section 368(a) of the Code.
Section 2.19. Affiliates. Except for Principal WRGI Stockholder
("WRGIS") and the directors and executive officers of WRGI, each of whom is
listed in Section 2.19 of the WRGI Disclosure Schedule, there are no persons
who, to the knowledge of WRGI, may be deemed to be affiliates of WRGI under
Rule 1-02(b) of Regulation S-X of the SEC (the "WRGI Affiliates").
Section 2.20. Certain Business Practices. None of WRGI or any directors,
officers, agents or employees of WRGI has (i) used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties
or campaigns or violated any provision of the Foreign Corrupt Practices Act
of 1977, as amended (the "FCPA"), or (iii) made any other unlawful payment.
Section 2.21. Insider Interests. Except as set forth in Section 2.21 of
the WRGI Disclosure Schedule, neither PVS nor any officer or director of WRGI
has any interest in any material property, real or personal, including
without limitation, any computer software or WRGI Intellectual Property
Rights, used in or pertaining to the business of WRGI, expect for the
ordinary rights of a stockholder or employee stock optionholder.
Section 2.22. Opinion of Financial Adviser. No advisers, as of the date
hereof, have delivered to the WRGI Board a written opinion to the effect
that, as of such date, the exchange ratio contemplated by the Merger is fair
to the holders of WRGI Shares.
Section 2.23. Brokers. No broker, finder or investment banker (other
than the WRGI Financial Adviser, a true and correct copy of whose engagement
agreement has been provided to NAVITEC) is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf
of WRGI.
Section 2.24. Disclosure. No representation or warranty of WRGI in this
Agreement or any certificate, schedule, document or other instrument
furnished or to be furnished to NAVITEC pursuant hereto or in connection
herewith contains, as of the date of such representation, warranty or
instrument, or will contain any untrue statement of a material fact or, at
the date thereof, omits or will omit to state a material fact necessary to
make any statement herein or therein, in light of the circumstances under
which such statement is or will be made, not misleading.
Section 2.25. No Existing Discussions. As of the date hereof, WRGI is
not engaged, directly or indirectly, in any discussions or negotiations with
any other party with respect to any Third Party Acquisition (as defined in
Section 4.4).
Section 2.26. Material Contracts.
(a) WRGI has delivered or otherwise made available to NAVITEC true,
correct and complete copies of all contracts and agreements (and all
amendments, modifications and supplements thereto and all side letters to
which WRGI is a party affecting the obligations of any party thereunder) to
which WRGI is a party or by which any of its properties or assets are bound
that are, material to the business, properties or assets of WRGI taken as a
whole, including, without limitation, to the extent any of the following are,
individually or in the aggregate, material to the business, properties or
assets of WRGI taken as a whole, all: (i) employment, product design or
development, personal services, consulting, non-competition, severance,
golden parachute or indemnification contracts (including, without limitation,
any contract to which WRGI is a party involving employees of WRGI); (ii)
licensing, publishing, merchandising or distribution agreements; (iii)
contracts granting rights of first refusal or first negotiation; (iv)
partnership or joint venture agreements; (v) agreements for the acquisition,
sale or lease of material properties or assets or stock or otherwise entered
into since June 30, 1999; (vi) contracts or agreements with any Governmental
Entity. and (vii) all commitments and agreements to enter into any of the
foregoing (collectively, together with any such contracts entered into in
accordance with Section 4.1 hereof, the "WRGI Contracts"). WRGI is not a
party to or bound by any severance, golden parachute or other agreement with
any employee or consultant pursuant to which such person would be entitled to
receive any additional compensation or an accelerated payment of compensation
as a result of the consummation of the transactions contemplated hereby.
(b) Each of the WRGI Contracts is valid and enforceable in accordance
with its terms, and there is no default under any WRGI Contract so listed
either by WRGI or, to the knowledge of WRGI, by any other party thereto, and
no event has occurred that with the lapse of time or the giving of notice or
both would constitute a default thereunder by WRGI or, to the knowledge of
WRGI, any other party, in any such case in which such default or event could
reasonably be expected to have a Material Adverse Effect on WRGI.
(c) No party to any such WRGI Contract has given notice to WRGI of or
made a claim against WRGI with respect to any breach or default thereunder,
in any such case in which such breach or default could reasonably be expected
to have a Material Adverse Effect on WRGI.
ARTICLE 3
Representations and Warranties of NAVITEC
Except as set forth on the Disclosure Schedule delivered by NAVITEC to
WRGI (the "NAVITEC Disclosure Schedule"), NAVITEC hereby represents and
warrants to WRGI as follows:
Section 3.1. Organization and Qualification.
(a) Each of NAVITEC and its subsidiaries is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization and has all requisite power and authority to
own, lease and operate its properties and to carry on its businesses as now
being conducted, except where the failure to be so organized, existing and in
good standing or to have such power and authority would not have a Material
Adverse Effect (as defined below) on NAVITEC. When used in connection with
NAVITEC, the term "Material Adverse Effect'' means any change or effect (i)
that is or is reasonably likely to be materially adverse to the business,
results of operations, condition (financial or otherwise) or prospects of
NAVITEC and its subsidiaries, taken as a whole, other than any change or
effect arising out of general economic conditions unrelated to any businesses
in which NAVITEC and its subsidiaries are engaged, or (ii) that may impair
the ability of NAVITEC to consummate the transactions contemplated hereby.
(b) NAVITEC has heretofore delivered to WRGI accurate and complete
copies of the Certificate of Incorporation and Bylaws (or similar governing
documents), as currently in effect, of NAVITEC. Each of NAVITEC and its
subsidiaries is duly qualified or licensed and in good standing to do
business in each jurisdiction in which the property owned, leased or operated
by it or the nature of the business conducted by it makes such qualification
or licensing necessary except in such jurisdictions where the failure to be
so duly qualified or licensed and in good standing would not have a Material
Adverse Effect on NAVITEC.
Section 3.2. Capitalization of NAVITEC.
(a) As of December 31, 1999, the authorized capital stock of NAVITEC
consists of; (i) Twenty-five Million (25,000,000) NAVITEC common Shares,
$.001 par value, of which 5,000,000 common Shares are issued and outstanding.
All of the outstanding NAVITEC Shares have been duly authorized and validly
issued, and are fully paid, nonassessable and free of preemptive rights.
(b) Except as set forth in Section 3.2(b) of the NAVITEC Disclosure
Schedule, NAVITEC is the record and beneficial owner of all of the issued and
outstanding shares of capital stock of its subsidiaries.
(c) Except as set forth in Section 3.2(c) of the NAVITEC Disclosure
Schedule, between December 31, 1999 and the date hereof, no shares of
NAVITEC's capital stock have been issued and no NAVITEC Stock options have
been granted. Except as set forth in Section 3.2(a) above, as of the date
hereof, there are no outstanding (i) shares of capital stock or other voting
securities of NAVITEC, (ii) securities of NAVITEC or its subsidiaries
convertible into or exchangeable for shares of capital stock or voting
securities of NAVITEC, (iii) options or other rights to acquire from NAVITEC
or its subsidiaries, or obligations of NAVITEC or its subsidiaries to issue,
any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of NAVITEC, or (iv)
equity equivalents, interests in the ownership or earnings of NAVITEC or its
subsidiaries or other similar rights (collectively, "NAVITEC Securities"). As
of the date hereof, there are no outstanding obligations of NAVITEC or any of
its subsidiaries to repurchase, redeem or otherwise acquire any NAVITEC
Securities. There are no stockholder agreements, voting trusts or other
agreements or understandings to which NAVITEC is a party or by which it is
bound relating to the voting or registration of any shares of capital stock
of NAVITEC.
(d) Except as set forth in Section 3.2(d) of the NAVITEC Disclosure
Schedule, there are no securities of NAVITEC convertible into or exchangeable
for, no options or other rights to acquire from NAVITEC, and no other
contract, understanding, arrangement or obligation (whether or not
contingent) providing for the issuance or sale, directly or indirectly, of
any capital stock or other ownership interests in, or any other securities
of, any subsidiary of NAVITEC.
(e) The NAVITEC Shares constitute the only class of equity securities of
NAVITEC or its subsidiaries.
(f) Except as set forth in Section 3.2(f) of the NAVITEC Disclosure
Schedule, NAVITEC does not own directly or indirectly more than fifty percent
(50%) of the outstanding voting securities or interests (including membership
interests) of any entity.
Section 3.3. Authority Relative to this Agreement; Recommendation.
(a) NAVITEC has all necessary corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
the Board of Directors of NAVITEC (the "NAVITEC Board"), and no other
corporate proceedings on the part of NAVITEC are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby, except, as
referred to in Section 3.17, the approval and adoption of this Agreement by
the holders of at least a majority of the then outstanding NAVITEC Shares.
This Agreement has been duly and validly executed and delivered by NAVITEC
and constitutes a valid, legal and binding agreement of NAVITEC, enforceable
against NAVITEC in accordance with its terms.
(b) The NAVITEC Board has resolved to recommend that the stockholder of
NAVITEC approve and adopt this Agreement.
Section 3.4. SEC Reports; Financial Statements.
(a) NAVITEC has filed all required forms, reports and documents with
the Securities and Exchange Commission (the "SEC") since December 31, 1999,
each of which has complied in all material respects with all applicable
requirements of the Securities Act of 1933, as amended (the "Securities
Act"), and the Exchange Act (and the rules and regulations promulgated
thereunder, respectively), each as in effect on the dates such forms, reports
and documents were filed. NAVITEC has heretofore delivered or promptly will
deliver prior to the Effective Date to NAVITEC, in the form filed with the
SEC (including any amendments thereto but excluding any exhibits), (i) its
Annual Report on Form 10-KSB for the fiscal year ended December 31, 1999,
(ii) all definitive proxy statements relating to NAVITEC's meetings of
stockholders (whether annual or special) held since December 31, 1999, if
any, and (iii) all other reports or registration statements filed by NAVITEC
with the SEC since December 31, 1999 (all of the foregoing, collectively, the
"NAVITEC SEC Reports"). None of such NAVITEC SEC Reports, including, without
limitation, any financial statements or schedules included or incorporated by
reference therein, contained, when filed, any untrue statement of a material
fact or omitted to state a material fact required to be stated or
incorporated by reference therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The audited financial statements of NAVITEC included in the
NAVITEC SEC Reports fairly present, in conformity with generally accepted
accounting principles applied on a consistent basis (except as may be
indicated in the notes thereto), the financial position of NAVITEC as of the
dates thereof and its results of operations and changes in financial position
for the periods then ended. All material agreements, contracts and other
documents required to be filed as exhibits to any of the NAVITEC SEC Reports
have been so filed.
(b) NAVITEC has heretofore made available or promptly will make
available to WRGI a complete and correct copy of any amendments or
modifications which are required to be filed with the SEC but have not yet
been filed with the SEC, to agreements, documents or other instruments which
previously had been filed by NAVITEC with the SEC pursuant to the Exchange
Act.
Section 3.5. Information Supplied. None of the information supplied or
to be supplied by NAVITEC for inclusion or incorporation by reference to the
8-K will, at the time the 8-K is filed with the SEC and at the time it
becomes effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
Section 3.6. Consents and Approvals; No Violations. Except as set forth
in Section 3.6 of the NAVITEC Disclosure Schedule, and for filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of, the Securities Act, the Exchange Act, state
securities or blue sky laws, the HSR Act, the rules of the NASD, and the
filing and recordation of the Merger Certificate as required by the NGCL, no
filing with or notice to, and no permit, authorization, consent or approval
of, any Governmental Entity is necessary for the execution and delivery by
NAVITEC of this Agreement or the consummation by NAVITEC of the transactions
contemplated hereby, except where the failure to obtain such permits,
authorizations consents or approvals or to make such filings or give such
notice would not have a Material Adverse Effect on NAVITEC.
Neither the execution, delivery and performance of this Agreement by
NAVITEC nor the consummation by NAVITEC of the transactions contemplated
hereby will (i) conflict with or result in any breach of any provision of the
respective Certificate of Incorporation or Bylaws (or similar governing
documents) of NAVITEC or any of NAVITEC's subsidiaries, (ii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration or Lien) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which NAVITEC or any of
NAVITEC's subsidiaries is a party or by which any of them or any of their
respective properties or assets may be bound or (iii) violate any order,
writ, injunction, decree, law, statute, rule or regulation applicable to
NAVITEC or any of NAVITEC's subsidiaries or any of their respective
properties or assets, except in the case of (ii) or (iii) for violations,
breaches or defaults which would not have a Material Adverse Effect on
NAVITEC.
Section 3.7. No Default. None of NAVITEC or any of its subsidiaries is
in breach, default or violation (and no event has occurred which with notice
or the lapse of time or both would constitute a breach, default or violation)
of any term, condition or provision of (i) its Certificate of Incorporation
or Bylaws (or similar governing documents), (ii) any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or
obligation to which NAVITEC or any of its subsidiaries is now a party or by
which any of them or any of their respective properties or assets may be
bound or (iii) any order, writ, injunction, decree, law, statute, rule or
regulation applicable to NAVITEC, its subsidiaries or any of their respective
properties or assets, except in the case of (ii) or (iii) for violations,
breaches or defaults that would not have a Material Adverse Effect on
NAVITEC. Each note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which NAVITEC or any of its
subsidiaries is now a party or by which any of them or any of their
respective properties or assets may be bound that is material to NAVITEC and
its subsidiaries taken as a whole and that has not expired is in full force
and effect and is not subject to any material default thereunder of which
NAVITEC is aware by any party obligated to NAVITEC or any subsidiary
thereunder.
Section 3.8. No Undisclosed Liabilities; Absence of Changes. Except as
set forth in Section 2.8 of the NAVITEC Disclosure Schedule and except as and
to the extent publicly disclosed by NAVITEC in the NAVITEC SEC Reports, as of
December 31, 1999, NAVITEC does not have any liabilities or obligations of
any nature, whether or not accrued, contingent or otherwise, that would be
required by generally accepted accounting principles to be reflected on a
balance sheet of NAVITEC (including the notes thereto) or which would have a
Material Adverse Effect on NAVITEC. Except as publicly disclosed by NAVITEC,
since November 22, 1999, NAVITEC has not incurred any liabilities of any
nature, whether or not accrued, contingent or otherwise, which could
reasonably be expected to have, and there have been no events, changes or
effects with respect to NAVITEC having or which reasonably could be expected
to have, a Material Adverse Effect on NAVITEC. Except as and to the extent
publicly disclosed by NAVITEC in the NAVITEC SEC Reports and except as set
forth in Section 2.8 of the NAVITEC Disclosure Schedule, since November
22,1999, there has not been (i) any material change by NAVITEC in its
accounting methods, principles or practices (other than as required after the
date hereof by concurrent changes in generally accepted accounting
principles), (ii) any revaluation by NAVITEC of any of its assets having a
Material Adverse Effect on NAVITEC, including, without limitation, any
write-down of the value of any assets other than in the ordinary course of
business or (iii) any other action or event that would have required the
consent of any other party hereto pursuant to Section 4.1 of this Agreement
had such action or event occurred after the date of this Agreement.
Section 3.9. Litigation. Except as publicly disclosed by NAVITEC in the
NAVITEC SEC Reports, there is no suit, claim, action, proceeding or
investigation pending or, to the knowledge of NAVITEC, threatened against
NAVITEC or any of its subsidiaries or any of their respective properties or
assets before any Governmental Entity which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect on
NAVITEC or could reasonably be expected to prevent or delay the consummation
of the transactions contemplated by this Agreement. Except as publicly
disclosed by NAVITEC in the NAVITEC SEC Reports, NAVITEC is not subject to
any outstanding order, writ, injunction or decree which, insofar as can be
reasonably foreseen in the future, could reasonably be expected to have a
Material Adverse Effect on NAVITEC or could reasonably be expected to prevent
or delay the consummation of the transactions contemplated hereby.
Section 3.10. Compliance with Applicable Law. Except as publicly
disclosed by NAVITEC in the NAVITEC SEC Reports, NAVITEC holds all permits,
licenses, variances, exemptions, orders and approvals of all Governmental
Entities necessary for the lawful conduct of their respective businesses (the
`'NAVITEC Permits"), except for failures to hold such permits, licenses,
variances, exemptions, orders and approvals which would not have a Material
Adverse Effect on NAVITEC. Except as publicly disclosed by NAVITEC in the
NAVITEC SEC Reports, NAVITEC is in compliance with the terms of the NAVITEC
Permits, except where the failure so to comply would not have a Material
Adverse Effect on NAVITEC. Except as publicly disclosed by NAVITEC in the
NAVITEC SEC Reports, the business of NAVITEC is not being conducted in
violation of any law, ordinance or regulation of any Governmental Entity
except that no representation or warranty is made in this Section 2.10 with
respect to Environmental Laws (as defined in Section 2.12 below) and except
for violations or possible violations which do not, and, insofar as
reasonably can be foreseen, in the future will not, have a Material Adverse
Effect on NAVITEC. Except as publicly disclosed by NAVITEC in the NAVITEC SEC
Reports, no investigation or review by any Governmental Entity with respect
to NAVITEC is pending or, to the knowledge of NAVITEC, threatened, nor, to
the knowledge of NAVITEC, has any Governmental Entity indicated an intention
to conduct the same, other than, in each case, those which NAVITEC reasonably
believes will not have a Material Adverse Effect on NAVITEC.
Section 3.11. Employee Benefit Plans; Labor Matters.
(a) With respect to each employee benefit plan, program, policy,
arrangement and contract (including, without limitation, any "employee
benefit plan," as defined in Section 3(3) of ERISA), maintained or
contributed to at any time by NAVITEC, any of its subsidiaries or any entity
required to be aggregated with NAVITEC or any of its subsidiaries pursuant to
Section 414 of the Code (each, a "NAVITEC Employee Plan"), no event has
occurred and, to the knowledge of NAVITEC, no condition or set of
circumstances exists in connection with which NAVITEC or any of its
subsidiaries could reasonably be expected to be subject to any liability
which would have a Material Adverse Effect on NAVITEC.
(b) (i) No NAVITEC Employee Plan is or has been subject to Title IV of
ERISA or Section 412 of the Code; and (ii) each NAVITEC Employee Plan
intended to qualify under Section 401(a) of the Code and each trust intended
to qualify under Section 501(a) of the Code is the subject of a favorable
Internal Revenue Service determination letter, and nothing has occurred which
could reasonably be expected to adversely affect such determination.
(c) Section 3.11(c) of the NAVITEC Disclosure Schedule sets forth a true
and complete list, as of the date of this Agreement, of each person who holds
any NAVITEC Stock Options, together with the number of NAVITEC Shares which
are subject to such option, the date of grant of such option, the extent to
which such option is vested (or will become vested as a result of the
Merger), the option price of such option (to the extent determined as of the
date hereof), whether such option is a nonqualified stock option or is
intended to qualify as an incentive stock option within the meaning of
Section 422(b) of the Code, and the expiration date of such option. Section
3.11(c) of the NAVITEC Disclosure Schedule also sets forth the total number
of such incentive stock options and such nonqualified options. NAVITEC has
furnished WRGI with complete copies of the plans pursuant to which the
NAVITEC Stock Options were issued. Other than the automatic vesting of
NAVITEC Stock Options that may occur without any action on the part of
NAVITEC or its officers or directors, NAVITEC has not taken any action that
would result in any NAVITEC Stock Options that are unvested becoming vested
in connection with or as a result of the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.
(d) NAVITEC has made available to WRGI (i) a description of the terms of
employment and compensation arrangements of all officers of NAVITEC and a
copy of each such agreement currently in effect; (ii) copies of all
agreements with consultants who are individuals obligating NAVITEC to make
annual cash payments in an amount exceeding $60,000; (iii) a schedule listing
all officers of NAVITEC who have executed a non-competition agreement with
NAVITEC and a copy of each such agreement currently in effect; (iv) copies
(or descriptions) of all severance agreements, programs and policies of
NAVITEC with or relating to its employees, except programs and policies
required to be maintained by law; and (v) copies of all plans, programs,
agreements and other arrangements of the NAVITEC with or relating to its
employees which contain change in control provisions.
(e) Except as disclosed in Section 3.11(e) of the NAVITEC Disclosure
Schedule there shall be no payment, accrual of additional benefits,
acceleration of payments, or vesting in any benefit under any NAVITEC
Employee Plan or any agreement or arrangement disclosed under this Section
3.11 solely by reason of entering into or in connection with the transactions
contemplated by this Agreement.
(f) There are no controversies pending or, to the knowledge of NAVITEC
threatened, between NAVITEC or any of its subsidiaries and any of their
respective employees, which controversies have or could reasonably be
expected to have a Material Adverse Effect on NAVITEC. Neither NAVITEC nor
any of its subsidiaries is a party to any collective bargaining agreement or
other labor union contract applicable to persons employed by NAVITEC or any
of its subsidiaries (and neither NAVITEC nor any of its subsidiaries has any
outstanding material liability with respect to any terminated collective
bargaining agreement or labor union contract), nor does NAVITEC know of any
activities or proceedings of any labor union to organize any of its or any of
its subsidiaries' employees. NAVITEC has no knowledge of any strike,
slowdown, work stoppage, lockout or threat thereof by or with respect to any
of its or any of its subsidiaries' employees.
Section 3.12. Environmental Laws and Regulations.
(a) Except as disclosed by NAVITEC, (i) each of NAVITEC and its
subsidiaries is in material compliance with all Environmental Laws, except
for non-compliance that would not have a Material Adverse Effect on NAVITEC,
which compliance includes, but is not limited to, the possession by NAVITEC
and its subsidiaries of all material permits and other governmental
authorizations required under applicable Environmental Laws, and compliance
with the terms and conditions thereof; (ii) none of NAVITEC or its
subsidiaries has received written notice of, or, to the knowledge of NAVITEC,
is the subject of, any Environmental Claim that could reasonably be expected
to have a Material Adverse Effect on NAVITEC; and (iii) to the knowledge of
NAVITEC, there are no circumstances that are reasonably likely to prevent or
interfere with such material compliance in the future.
(b) Except as disclosed by NAVITEC, there are no Environmental Claims
which could reasonably be expected to have a Material Adverse Effect on
NAVITEC that are pending or, to the knowledge of NAVITEC, threatened against
NAVITEC or any of its subsidiaries or, to the knowledge of NAVITEC, against
any person or entity whose liability for any Environmental Claim NAVITEC or
its subsidiaries has or may have retained or assumed either contractually or
by operation of law.
Section 3.13. Tax Matters. Except as set forth in Section 3.13 of the
NAVITEC Disclosure Schedule: (i) NAVITEC and each of its subsidiaries has
filed or has had filed on its behalf in a timely manner (within any
applicable extension periods) with the appropriate Governmental Entity all
income and other material Tax Returns with respect to Taxes of NAVITEC and
each of its subsidiaries and all Tax Returns were in all material respects
true, complete and correct; (ii) all material Taxes with respect to NAVITEC
and each of its subsidiaries have been paid in full or have been provided for
in accordance with GAAP on NAVITEC's most recent balance sheet which is part
of the NAVITEC SEC Documents; (iii) there are no outstanding agreements or
waivers extending the statutory period of limitations applicable to any
federal, state, local or foreign income or other material Tax Returns
required to be filed by or with respect to NAVITEC or its subsidiaries; (iv)
to the knowledge of NAVITEC none of the Tax Returns of or with respect to
NAVITEC or any of its subsidiaries is currently being audited or examined by
any Governmental Entity; and (v) no deficiency for any income or other
material Taxes has been assessed with respect to NAVITEC or any of its
subsidiaries which has not been abated or paid in full.
Section 3.14. Title to Property. NAVITEC and each of its subsidiaries
have good and defensible title to all of their properties and assets, free
and clear of all liens, charges and encumbrances except liens for taxes not
yet due and payable and such liens or other imperfections of title, if any,
as do not materially detract from the value of or interfere with the present
use of the property affected thereby or which, individually or in the
aggregate, would not have a Material Adverse Effect on NAVITEC; and, to
NAVITEC's knowledge, all leases pursuant to which NAVITEC or any of its
subsidiaries lease from others real or personal property are in good
standing, valid and effective in accordance with their respective terms, and
there is not, to the knowledge of NAVITEC, under any of such leases, any
existing material default or event of default (or event which with notice or
lapse of time, or both, would constitute a material default and in respect of
which NAVITEC or such subsidiary has not taken adequate steps to prevent such
a default from occurring) except where the lack of such good standing,
validity and effectiveness, or the existence of such default or event of
default would not have a Material Adverse Effect on NAVITEC.
Section 3.15. Intellectual Property.
(a) Each of NAVITEC and its subsidiaries owns, or possesses adequate
licenses or other valid rights to use, all existing United States and foreign
patents, trademarks, trade names, services marks, copyrights, trade secrets,
and applications therefore that are material to its business as currently
conducted (the "NAVITEC Intellectual Property Rights").
(b) Except as set forth in Section 3.15(b) of the NAVITEC Disclosure
Schedule the validity of the NAVITEC Intellectual Property Rights and the
title thereto of NAVITEC or any subsidiary, as the case may be, is not being
questioned in any litigation to which NAVITEC or any subsidiary is a party.
(c) The conduct of the business of NAVITEC and its subsidiaries as now
conducted does not, to NAVITEC's knowledge, infringe any valid patents,
trademarks, tradenames, service marks or copyrights of others. The
consummation of the transactions contemplated hereby will not result in the
loss or impairment of any NAVITEC Intellectual Property Rights.
(d) Each of NAVITEC and its subsidiaries has taken steps it believes
appropriate to protect and maintain its trade secrets as such, except in
cases where NAVITEC has elected to rely on patent or copyright protection in
lieu of trade secret protection.
Section 3.16. Insurance. NAVITEC currently does not maintain general
liability and other business insurance.
Section 3.17. Vote Required. The affirmative vote of the holders of at
least a majority of the outstanding NAVITEC Shares is the only vote of the
holders of any class or series of NAVITEC's capital stock necessary to
approve and adopt this Agreement and the Merger.
Section 3.18. Tax Treatment. Neither NAVITEC nor, to the knowledge of
NAVITEC, any of its affiliates has taken or agreed to take any action that
would prevent the Merger from constituting a reorganization qualifying under
the provisions of Section 368(a) of the Code.
Section 3.19. Affiliates. Except for the directors and executive
officers of NAVITEC, each of whom is listed in Section 3.19 of the NAVITEC
Disclosure Schedule, there are no persons who, to the knowledge of NAVITEC,
may be deemed to be affiliates of NAVITEC under Rule 1-02(b) of Regulation
S-X of the SEC (the "NAVITEC Affiliates").
Section 3.20. Certain Business Practices. None of NAVITEC, any of its
subsidiaries or any directors, officers, agents or employees of NAVITEC or
any of its subsidiaries has (i) used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political
activity, (ii) made any unlawful payment to foreign or domestic government
officials or employees or to foreign or domestic political parties or
campaigns or violated any provision of the FCPA, or (iii) made any other
unlawful payment.
Section 3.21. Insider Interests. Except as set forth in Section 3.21 of
the NAVITEC Disclosure Schedule, no officer or director of NAVITEC has any
interest in any material property, real or personal, including without
limitation, any computer software or NAVITEC Intellectual Property Rights,
used in or pertaining to the business of NAVITEC or any subsidiary, except
for the ordinary rights of a stockholder or employee stock optionholder.
Section 3.22. Opinion of Financial Adviser. No advisers, as of the date
hereof, have delivered to the NAVITEC Board a written opinion to the effect
that, as of such date, the exchange ratio contemplated by the Merger is fair
to the holders of NAVITEC Shares.
Section 3.23. Brokers. No broker, finder or investment banker (other
than the NAVITEC Financial Adviser, a true and correct copy of whose
engagement agreement has been provided to WRGI) is entitled to any brokerage,
finders or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf
of NAVITEC.
Section 3.24. Disclosure. No representation or warranty of NAVITEC in
this Agreement or any certificate, schedule, document or other instrument
furnished or to be furnished to WRGI pursuant hereto or in connection
herewith contains, as of the date of such representation, warranty or
instrument, or will contain any untrue statement of a material fact or, at
the date thereof, omits or will omit to state a material fact necessary to
make any statement herein or therein, in light of the circumstances under
which such statement is or will be made, not misleading.
Section 3.25. No Existing Discussions. As of the date hereof, NAVITEC is
not engaged, directly or indirectly, in any discussions or negotiations with
any other party with respect to any Third Party Acquisition (as defined in
Section 5.4).
Section 3.26. Material Contracts.
(a) NAVITEC has delivered or otherwise made available to WRGI true,
correct and complete copies of all contracts and agreements (and all
amendments, modifications and supplements thereto and all side letters to
which NAVITEC is a party affecting the obligations of any party thereunder)
to which NAVITEC or any of its subsidiaries is a party or by which any of
their properties or assets are bound that are, material to the business,
properties or assets of NAVITEC and its subsidiaries taken as a whole,
including, without limitation, to the extent any of the following are,
individually or in the aggregate, material to the business, properties or
assets of NAVITEC and its subsidiaries taken as a whole, all: (i) employment,
product design or development, personal services, consulting,
non-competition, severance, golden parachute or indemnification contracts
(including, without limitation, any contract to which NAVITEC is a party
involving employees of NAVITEC); (ii) licensing, publishing, merchandising or
distribution agreements; (iii) contracts granting rights of first refusal or
first negotiation; (iv) partnership or joint venture agreements; (v)
agreements for the acquisition, sale or lease of material properties or
assets or stock or otherwise. (vi) contracts or agreements with any
Governmental Entity; and (vii) all commitments and agreements to enter into
any of the foregoing (collectively, together with any such contracts entered
into in accordance with Section 5.2 hereof, the 'NAVITEC Contracts"). Neither
NAVITEC nor any of its subsidiaries is a party to or bound by any severance,
golden parachute or other agreement with any employee or consultant pursuant
to which such person would be entitled to receive any additional compensation
or an accelerated payment of compensation as a result of the consummation of
the transactions contemplated hereby.
(b) Each of the NAVITEC Contracts is valid and enforceable in accordance
with its terms, and there is no default under any NAVITEC Contract so listed
either by NAVITEC or, to the knowledge of NAVITEC, by any other party
thereto, and no event has occurred that with the lapse of time or the giving
of notice or both would constitute a default thereunder by NAVITEC or, to the
knowledge of NAVITEC, any other party, in any such case in which such default
or event could reasonably be expected to have a Material Adverse Effect on
NAVITEC.
(c) No party to any such NAVITEC Contract has given notice to NAVITEC of
or made a claim against NAVITEC with respect to any breach or default
thereunder, in any such case in which such breach or default could reasonably
be expected to have a Material Adverse Effect on NAVITEC.
ARTICLE 4
Covenants
Section 4.1. Conduct of Business of WRGI. Except as contemplated by this
Agreement or as described in Section 4.1 of the WRGI Disclosure Schedule,
during the period from the date hereof to the Effective Time, WRGI will
conduct its operations in the ordinary course of business consistent with
past practice and, to the extent consistent therewith, with no less diligence
and effort than would be applied in the absence of this Agreement, seek to
preserve intact its current business organization, keep available the service
of its current officers and employees and preserve its relationships with
customers, suppliers and others having business dealings with it to the end
that goodwill and ongoing businesses shall be unimpaired at the Effective
Time. Without limiting the generality of the foregoing, except as otherwise
expressly provided in this Agreement or as described in Section 4.1 of the
WRGI Disclosure Schedule, prior to the Effective Time, WRGI will not, without
the prior written consent of NAVITEC:
(a) amend its Certificate of Incorporation or Bylaws (or other similar
governing instrument);
(b) amend the terms of any stock of any class or any other securities
(except bank loans) or equity equivalents.
(c) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its capital
stock, make any other actual, constructive or deemed distribution in respect
of its capital stock or otherwise make any payments to stockholders in their
capacity as such, or redeem or otherwise acquire any of its securities;
(d) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of WRGI (other than the Merger);
(e) (i) incur or assume any long-term or short-term debt or issue any
debt securities except for borrowings or issuances of letters of credit under
existing lines of credit in the ordinary course of business; (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other person.
(iii) make any loans, advances or capital contributions to, or investments
in, any other person; (iv) pledge or otherwise encumber shares of capital
stock of WRGI; or (v) mortgage or pledge any of its material assets, or
create or suffer to exist any material Lien thereupon (other than tax Liens
for taxes not yet due);
(f) except as may be required by law, enter into, adopt or amend or
terminate any bonus, profit sharing, compensation, severance, termination,
stock option, stock appreciation right, restricted stock, performance unit,
stock equivalent, stock purchase agreement, pension, retirement, deferred
compensation, employment, severance or other employee benefit agreement,
trust, plan, fund or other arrangement for the benefit or welfare of any
director, officer or employee in any manner, or increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay
any benefit not required by any plan and arrangement as in effect as of the
date hereof (including, without limitation, the granting of stock
appreciation rights or performance units); provided, however, that this
paragraph (f) shall not prevent WRGI from (i) entering into employment
agreements or severance agreements with employees in the ordinary course of
business and consistent with past practice or (ii) increasing annual
compensation and/or providing for or amending bonus arrangements for
employees for fiscal 1999 in the ordinary course of year-end compensation
reviews consistent with past practice and paying bonuses to employees for
fiscal 1999 in amounts previously disclosed to NAVITEC (to the extent that
such compensation increases and new or amended bonus arrangements do not
result in a material increase in benefits or compensation expense to WRGI);
(g) acquire, sell, lease or dispose of any assets in any single
transaction or series of related transactions (other than in the ordinary
course of business);
(h) except as may be required as a result of a change in law or in
generally accepted accounting principles, change any of the accounting
principles or practices used by it;
(i) revalue in any material respect any of its assets including, without
limitation, writing down the value of inventory or writing-off notes or
accounts receivable other than in the ordinary course of business;
(j) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization or
division thereof or any equity interest therein; (ii) enter into any contract
or agreement other than in the ordinary course of business consistent with
past practice which would be material to WRGI; (iii) authorize any new
capital expenditure or expenditures which, individually is in excess of
$1,000 or, in the aggregate, are in excess of $5,000; provided, however that
none of the foregoing shall limit any capital expenditure required pursuant
to existing contracts;
(k) make any tax election or settle or compromise any income tax
liability material to WRGI;
(l) settle or compromise any pending or threatened suit, action or claim
which (i) relates to the transactions contemplated hereby or (ii) the
settlement or compromise of which could have a Material Adverse Effect on
WRGI;
(m) commence any material research and development project or terminate
any material research and development project that is currently ongoing, in
either case, except pursuant to the terms of existing contracts or in the
ordinary course of business; or
(n) take, or agree in writing or otherwise to take, any of the actions
described in Sections 4.1(a) through 4.1(m) or any action which would make
any of the representations or warranties of contained in this Agreement
untrue or incorrect.
Section 4.2. Conduct of Business of NAVITEC. Except as contemplated by
this Agreement or as described in Section 4.2 of the NAVITEC Disclosure
Schedule during the period from the date hereof to the Effective Time,
NAVITEC will conduct its operations in the ordinary course of business
consistent with past practice and, to the extent consistent therewith, with
no less diligence and effort than would be applied in the absence of this
Agreement, seek to preserve intact its current business organization, keep
available the service of its current officers and employees and preserve its
relationships with customers, suppliers and others having business dealings
with it to the end that goodwill and ongoing businesses shall be unimpaired
at the Effective Time. Without limiting the generality of the foregoing,
except as otherwise expressly provided in this Agreement or as described in
Section 4.2 of the NAVITEC Disclosure Schedule, prior to the Effective Time,
NAVITEC will not, without the prior written consent of:
(a) amend its Certificate of Incorporation or Bylaws (or other similar
governing instrument);
(b) authorize for issuance, issue, sell, deliver or agree or commit to
issue, sell or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any
stock of any class or any other securities (except bank loans) or equity
equivalents (including, without limitation, any stock options or stock
appreciation rights;
(c) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its capital
stock, make any other actual, constructive or deemed distribution in respect
of its capital stock or otherwise make any payments to stockholders in their
capacity as such, or redeem or otherwise acquire any of its securities;
(d) adopt a plan of complete or partial liquidation, dissolution, merger
consolidation, restructuring, recapitalization or other reorganization of
NAVITEC (other than the Merger);
(e) (i) incur or assume any long-term or short-term debt or issue any
debt securities except for borrowings or issuances of letters of credit under
existing lines of credit in the ordinary course of business. (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other person;
(iii) make any loans, advances or capital contributions to or investments in,
any other person; (iv) pledge or otherwise encumber shares of capital stock
of NAVITEC or its subsidiaries; or (v) mortgage or pledge any of its material
assets, or create or suffer to exist any material Lien thereupon (other than
tax Liens for taxes not yet due);
(f) except as may be required by law, enter into, adopt or amend or
terminate any bonus, profit sharing, compensation, severance, termination,
stock option, stock appreciation right, restricted stock, performance unit
stock equivalent, stock purchase agreement, pension, retirement, deferred
compensation, employment, severance or other employee benefit agreement,
trust, plan, fund or other arrangement for the benefit or welfare of any
director, officer or employee in any manner, or increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay
any benefit not required by any plan and arrangement as in effect as of the
date hereof (including, without limitation, the granting of stock
appreciation rights or performance units); provided, however, that this
paragraph (f) shall not prevent NAVITEC or its subsidiaries from (i) entering
into employment agreements or severance agreements with employees in the
ordinary course of business and consistent with past practice or (ii)
increasing annual compensation and/or providing for or amending bonus
arrangements for employees for fiscal 1999 in the ordinary course of yearend
compensation reviews consistent with past practice and paying bonuses to
employees for fiscal 1999 in amounts previously disclosed to (to the extent
that such compensation increases and new or amended bonus arrangements do not
result in a material increase in benefits or compensation expense to
NAVITEC);
(g) acquire, sell, lease or dispose of any assets in any single
transaction or series of related transactions other than in the ordinary
course of business;
(h) except as may be required as a result of a change in law or in
generally accepted accounting principles, change any of the accounting
principles or practices used by it;
(i) revalue in any material respect any of its assets, including,
without limitation, writing down the value of inventory of writing-off notes
or accounts receivable other than in the ordinary course of business;
(j) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership, or other business organization or
division thereof or any equity interest therein; (ii) enter into any contract
or agreement other than in the ordinary course of business consistent with
past practice which would be material to NAVITEC; (iii) authorize any new
capital expenditure or expenditures which, individually, is in excess of
$1,000 or, in the aggregate, are in excess of $5,000: provided, however that
none of the foregoing shall limit any capital expenditure required pursuant
to existing contracts;
(k) make any tax election or settle or compromise any income tax
liability material to NAVITEC and its subsidiaries taken as a whole;
(l) settle or compromise any pending or threatened suit, action or claim
which (i) relates to the transactions contemplated hereby or (ii) the
settlement or compromise of which could have a Material Adverse Effect on
NAVITEC;
(m) commence any material research and development project or terminate
any material research and development project that is currently ongoing, in
either case, except pursuant to the terms of existing contracts or except in
the ordinary course of business; or
(n) take, or agree in writing or otherwise to take, any of the actions
described in Sections 4.2(a) through 4.2(m) or any action which would make
any of the representations or warranties of the NAVITEC contained in this
Agreement untrue or incorrect.
Section 4.3. Preparation of 8-K. NAVITEC and WRGI shall promptly
prepare and file with the SEC an 8-K disclosing this merger.
Section 4.4. Other Potential Acquirers.
(a) NAVITEC, its affiliates and their respective officers, directors,
employees, representatives and agents shall immediately cease any existing
discussions or negotiations, if any, with any parties conducted heretofore
with respect to any Third Party Acquisition.
Section 4.5. Meetings of Stockholders. NAVITEC shall take all action
necessary, in accordance with the respective General Corporation Law of its
respective state, and its respective certificate of incorporation and bylaws,
to duly call, give notice of, convene and hold a meeting of its stockholders
as promptly as practicable, to consider and vote upon the adoption and
approval of this Agreement and the transactions contemplated hereby. The
stockholder votes required for the adoption and approval of the transactions
contemplated by this Agreement. NAVITEC will, through its Boards of
Directors, recommend to their respective stockholders approval of such
matters
Section 4.6. OTC:BB Listing. The parties shall use all reasonable
efforts to cause the WRGI Shares, subject to Rule 144, to be traded on the
Over-The-Counter Bulletin Board (OTC:BB).
Section 4.7. Access to Information.
(a) Between the date hereof and the Effective Time, WRGI will give
NAVITEC and its authorized representatives, and NAVITEC will give WRGI and
its authorized representatives, reasonable access to all employees, plants,
offices, warehouses and other facilities and to all books and records of
itself and its subsidiaries, will permit the other party to make such
inspections as such party may reasonably require and will cause its officers
and those of its subsidiaries to furnish the other party with such financial
and operating data and other information with respect to the business and
properties of itself and its subsidiaries as the other party may from time to
time reasonably request.
(b) Between the date hereof and the Effective Time, WRGI shall furnish
to NAVITEC, and NAVITEC will furnish to WRGI, within 25 business days after
the end of each quarter, quarterly statements prepared by such party in
conformity with its past practices) as of the last day of the period then
ended.
(c) Each of the parties hereto will hold and will cause its consultants
and advisers to hold in confidence all documents and information furnished to
it in connection with the transactions contemplated by this Agreement.
Section 4.8. Additional Agreements, Reasonable Efforts. Subject to the
terms and conditions herein provided, each of the parties hereto agrees to
use all reasonable efforts to take, or cause to be taken, all action, and to
do, or cause to be done, all things reasonably necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including, without limitation,
(i) cooperating in the preparation and filing of the 8-K, any filings that
may be required under the HSR Act, and any amendments to any thereof; (ii)
obtaining consents of all third parties and Governmental Entities necessary,
proper or advisable for the consummation of the transactions contemplated by
this Agreement; (iii) contesting any legal proceeding relating to the Merger
and (iv) the execution of any additional instruments necessary to consummate
the transactions contemplated hereby. Subject to the terms and conditions of
this Agreement, NAVITEC and WRGI agree to use all reasonable efforts to cause
the Effective Time to occur as soon as practicable after the stockholder
votes with respect to the Merger. In case at any time after the Effective
Time any further action is necessary to carry out the purposes of this
Agreement, the proper officers and directors of each party hereto shall take
all such necessary action.
Section 4.9. Indemnification.
(a) To the extent, if any, not provided by an existing right under one
of the parties' directors and officers liability insurance policies, from and
after the Effective Time, WRGI shall, to the fullest extent permitted by
applicable law, indemnify, defend and hold harmless each person who is now,
or has been at any time prior to the date hereof, or who becomes prior to the
Effective Time, a director, officer or employee of the parties hereto or any
subsidiary thereof (each an "Indemnified Party" and, collectively, the
''Indemnified Parties") against all losses, expenses (including reasonable
attorneys' fees and expenses), claims, damages or liabilities or, subject to
the proviso of the next succeeding sentence, amounts paid in settlement
arising out of actions or omissions occurring at or prior to the Effective
Time and whether asserted or claimed prior to, at or after the Effective
Time) that are in whole or in part (i) based on, or arising out of the fact
that such person is or was a director, officer or employee of such party or a
subsidiary of such party or (ii) based on, arising out of or pertaining to
the transactions contemplated by this Agreement. In the event of any such
loss expense, claim, damage or liability (whether or not arising before the
Effective Time), (i) WRGI shall pay the reasonable fees and expenses of
counsel selected by the Indemnified Parties, which counsel shall be
reasonably satisfactory to WRGI, promptly after statements therefore are
received and otherwise advance to such Indemnified Party upon request
reimbursement of documented expenses reasonably incurred, in either case to
the extent not prohibited by the NGCL and UGCL or its certificate of
incorporation or bylaws, (ii) WRGI will cooperate in the defense of any such
matter and (iii) any determination required to be made with respect to
whether an Indemnified Party's conduct complies with the standards set forth
under the NGCL and UGCL and WRGI's certificate of incorporation or bylaws
shall be made by independent counsel mutually acceptable to WRGI and the
Indemnified Party; provided, however, that WRGI shall not be liable for any
settlement effected without its written consent (which consent shall not be
unreasonably withheld). The Indemnified Parties as a group may retain only
one law firm with respect to each related matter except to the extent there
is, in the opinion of counsel to an Indemnified Party, under applicable
standards of professional conduct, c conflict on any significant issue
between positions of any two or more Indemnified Parties.
(b) In the event WRGI or any of its successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or Successor Corporation or entity or such consolidation or merger
or (ii) transfers all or substantially all of its properties and assets to
any person, then and in either such case, proper provision shall be made so
that the successors and assigns of WRGI shall assume the obligations set
forth in this Section 4.11.
(c) To the fullest extent permitted by law, from and after the Effective
Time, all rights to indemnification now existing in favor of the employees,
agents, directors or officers of WRGI and NAVITEC and their subsidiaries with
respect to their activities as such prior to the Effective Time, as provided
in WRGI's and NAVITEC's certificate of incorporation or bylaws, in effect on
the date thereof or otherwise in effect on the date hereof, shall survive the
Merger and shall continue in full force and effect for a period of not less
than six years from the Effective Time.
(d) The provisions of this Section 4.11 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party, his or her
heirs and his or her representatives.
Section 4.10. Notification of Certain Matters. The parties hereto shall
give prompt notice to the other parties, of (i) the occurrence or
nonoccurrence of any event the occurrence or nonoccurrence of which would be
likely to cause any representation or warranty contained in this Agreement to
be untrue or inaccurate in any material respect at or prior to the Effective
Time, (ii) any material failure of such party to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder, (iii) any notice of, or other communication relating to, a default
or event which, with notice or lapse of time or both, would become a default,
received by such party or any of its subsidiaries subsequent to the date of
this Agreement and prior to the Effective Time, under any contract or
agreement material to the financial condition, properties, businesses or
results of operations of such party and its subsidiaries taken as a whole to
which such party or any of its subsidiaries is a party or is subject, (iv)
any notice or other communication from any third party alleging that the
consent of such third party is or may be required in connection with the
transactions contemplated by this Agreement, or (v) any material adverse
change in their respective financial condition, properties, businesses,
results of operations or prospects taken as a whole, other than changes
resulting from general economic conditions; provided, however, that the
delivery of any notice pursuant to this Section 4.12 shall not cure such
breach or non-compliance or limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
ARTICLE 5
Conditions to Consummation of the Merger
Section 5.1. Conditions to Each Party's Obligations to Effect the
Merger. The respective obligations of each party hereto to effect the Merger
are subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) this Agreement shall have been approved and adopted by the requisite
vote of the stockholders of NAVITEC;
(b) this Agreement shall have been approved and adopted by the Board of
Directors of WRGI and NAVITEC;
(c) no statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or enforced by any
United States court or United States governmental authority which prohibits,
restrains, enjoins or restricts the consummation of the Merger;
(d) any waiting period applicable to the Merger under the HSR Act shall
have terminated or expired, and any other governmental or regulatory notices
or approvals required with respect to the transactions contemplated hereby
shall have been either filed or received; and
Section 5.2. Conditions to the Obligations of WRGI. The obligation of
WRGI to effect the Merger is subject to the satisfaction at or prior to the
Effective Time of the following conditions:
(a) the representations of NAVITEC contained in this Agreement or in any
other document delivered pursuant hereto shall be true and correct (except to
the extent that the breach thereof would not have a Material Adverse Effect
on NAVITEC) at and as of the Effective Time with the same effect as if made
at and as of the Effective Time (except to the extent such representations
specifically related to an earlier date, in which case such representations
shall be true and correct as of such earlier date), and at the Closing
NAVITEC shall have delivered to WRGI a certificate to that effect;
(b) each of the covenants and obligations of NAVITEC to be performed at
or before the Effective Time pursuant to the terms of this Agreement shall
have been duly performed in all material respects at or before the Effective
Time and at the Closing NAVITEC shall have delivered to WRGI a certificate to
that effect;
(d) NAVITEC shall have obtained the consent or approval of each person
whose consent or approval shall be required in order to permit the Merger as
relates to any obligation, right or interest of NAVITEC under any loan or
credit agreement, note, mortgage, indenture, lease or other agreement or
instrument, except those for which failure to obtain such consents and
approvals would not, in the reasonable opinion of WRGI, individually or in
the aggregate, have a Material Adverse Effect on NAVITEC;
(e) there shall have been no events, changes or effects with respect to
NAVITEC or its subsidiaries having or which could reasonably be expected to
have a Material Adverse Effect on NAVITEC; and
Section 5.3. Conditions to the Obligations of NAVITEC. The respective
obligations of NAVITEC to effect the Merger are subject to the satisfaction
at or prior to the Effective Time of the following conditions:
(a) the representations of WRGI contained in this Agreement or in any
other document delivered pursuant hereto shall be true and correct (except to
the extent that the breach thereof would not have a Material Adverse Effect
on WRGI) at and as of the Effective Time with the same effect as if made at
and as of the Effective Time (except to the extent such representations
specifically related to an earlier date, in which case such representations
shall be true and correct as of such earlier date), and at the Closing WRGI
shall have delivered to NAVITEC a certificate to that effect;
(b) each of the covenants and obligations of WRGI to be performed at or
before the Effective Time pursuant to the terms of this Agreement shall have
been duly performed in all material respects at or before the Effective Time
and at the Closing WRGI shall have delivered to NAVITEC a certificate to that
effect;
(c) there shall have been no events, changes or effects with respect to
WRGI having or which could reasonably be expected to have a Material Adverse
Effect on WRGI.
ARTICLE 6
Termination; Amendment; Waiver
Section 6.1. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, whether
before or after approval and adoption of this Agreement by WRGI's or
NAVITEC's stockholders:
(a) by mutual written consent of WRGI and NAVITEC;
(b) by NAVITEC or WRGI if (i) any court of competent jurisdiction in the
United States or other United States Governmental Entity shall have issued a
final order, decree or ruling or taken any other final action restraining,
enjoining or otherwise prohibiting the Merger and such order, decree, ruling
or other action is or shall have become nonappealable or (ii) the Merger has
not been consummated by February 15, 2000; provided, however, that no party
may terminate this Agreement pursuant to this clause (ii) if such party's
failure to fulfill any of its obligations under this Agreement shall have
been the reason that the Effective Time shall not have occurred on or before
said date;
(c) by WRGI if (i) there shall have been a breach of any representation
or warranty on the part of NAVITEC set forth in this Agreement, or if any
representation or warranty of NAVITEC shall have become untrue, in either
case such that the conditions set forth in Section 5.2(a) would be incapable
of being satisfied by February 15, 2000 (or as otherwise extended), (ii)
there shall have been a breach by NAVITEC of any of their respective
covenants or agreements hereunder having a Material Adverse Effect on NAVITEC
or materially adversely affecting (or materially delaying) the consummation
of the Merger, and NAVITEC, as the case may be, has not cured such breach
within 20 business days after notice by WRGI thereof, provided that WRGI has
not breached any of its obligations hereunder, (iii) WRGI shall have convened
a meeting of its stockholders to vote upon the Merger and shall have failed
to obtain the requisite vote of its stockholders; or (iv) WRGI shall have
convened a meeting of its Board of Directors to vote upon the Merger and
shall have failed to obtain the requisite vote;
(d) by NAVITEC if (i) there shall have been a breach of any
representation or warranty on the part of WRGI set forth in this Agreement,
or if any representation or warranty of WRGI shall have become untrue, in
either case such that the conditions set forth in Section 5.3(a) would be
incapable of being satisfied by February 15, 2000 (or as otherwise extended),
(ii) there shall have been a breach by WRGI of its covenants or agreements
hereunder having a Material Adverse Effect on WRGI or materially adversely
affecting (or materially delaying) the consummation of the Merger, and WRGI,
as the case may be, has not cured such breach within twenty business days
after notice by NAVITEC thereof, provided that NAVITEC has not breached any
of its obligations hereunder, (iii) the WRGI Board shall have recommended to
WRGI's stockholders a Superior Proposal, (iv) the WRGI Board shall have
withdrawn, modified or changed its approval or recommendation of this
Agreement or the Merger, or hold a stockholders' meeting to vote upon the
Merger, or shall have adopted any resolution to effect any of the foregoing,
(v) NAVITEC shall have convened a meeting of its stockholder to vote upon the
Merger and shall have failed to obtain the requisite vote of its stockholder.
Section 6.2. Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 6.1, this Agreement shall
forthwith become void and have no effect, without any liability on the part
of any party hereto or its affiliates, directors, officers or stockholders,
other than the provisions of this Section 6.2 and Sections 4.7(c) and 6.3
hereof. Nothing contained in this Section 6.2 shall relieve any party from
liability for any breach of this Agreement.
Section 6.3. Fees and Expenses. Except as specifically provided in this
Section 6.3, each party shall bear its own expenses in connection with this
Agreement and the transactions contemplated hereby.
Section 6.4. Amendment. This Agreement may be amended by action taken by
WRGI and NAVITEC at any time before or after approval of the Merger by the
stockholders of WRGI and NAVITEC (if required by applicable law) but, after
any such approval, no amendment shall be made which requires the approval of
such stockholders under applicable law without such approval. This Agreement
may not be amended except by an instrument in writing signed on behalf of the
parties hereto.
Section 6.5. Extension; Waiver. At any time prior to the Effective Time,
each party hereto may (i) extend the time for the performance of any of the
obligations or other acts of any other party, (ii) waive any inaccuracies in
the representations and warranties of any other party contained herein or in
any document, certificate or writing delivered pursuant hereto or (iii) waive
compliance by any other party with any of the agreements or conditions
contained herein. Any agreement on the part of any party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any party hereto to
assert any of its rights hereunder shall not constitute a waiver of such
rights.
ARTICLE 7
Miscellaneous
Section 7.1. Nonsurvival of Representations and Warranties. The
representations and warranties made herein shall not survive beyond the
Effective Time or a termination of this Agreement. This Section 7.1 shall not
limit any covenant or agreement of the parties hereto which by its terms
requires performance after the Effective Time.
Section 7.2. Entire Agreement; Assignment. This Agreement (a)
constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all other prior agreements and
understandings both written and oral, between the parties with respect to the
subject matter hereof and (b) shall not be assigned by operation of law or
otherwise.
Section 7.3. Validity. If any provision of this Agreement, or the
application thereof to any person or circumstance, is held invalid or
unenforceable, the remainder of this Agreement, and the application of such
provision to other persons or circumstances, shall not be affected thereby,
and to such end, the provisions of this Agreement are agreed to be severable.
Section 7.4. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by
facsimile or by registered or certified mail (postage prepaid, return receipt
requested), to each other party as follows:
If to NAVITEC:
Navitec Group, Inc.
0000 Xxxx Xxxxxxxx Xx. Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
with a copy to:
Xxxxxx X. Xxxxxxxxxx
Xxxxxx Xxxxx & Xxxxxxxxxx
0000 Xxxx Xxxxxxxx Xx. Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
(000) 000-0000
(000) 000-0000
if to WRGI:
WorldNet Resources Group, Inc.
000 Xxxx 0000 Xxxxx, Xxxxx 0
Xxxxx, Xxxx 00000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
Section 7.5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada, without regard
to the principles of conflicts of law thereof.
Section 7.6. Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of
or to affect the meaning or interpretation of this Agreement.
Section 7.7. Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and its successors and
permitted assigns, and except as provided in Sections 4.9 and 4.11, nothing
in this Agreement, express or implied, is intended to or shall confer upon
any other person any rights, benefits or remedies of any nature whatsoever
under or by reason of this Agreement.
Section 7.8. Certain Definitions. For the purposes of this Agreement,
the term:
(a) "affiliate" means (except as otherwise provided in Sections 2.19,
3.19 and 4.13) a person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with,
the first mentioned person;
(b) "business day" means any day other than a day on which Nasdaq is
closed;
(c) "capital stock" means common stock, preferred stock, partnership
interests, limited liability company interests or other ownership interests
entitling the holder thereof to vote with respect to matters involving the
issuer thereof;
(d) "knowledge'' or "known'' means, with respect to any matter in
question, if an executive officer of WRGI or NAVITEC or its subsidiaries, as
the case may be, has actual knowledge of such matter;
(e) "person" means an individual, corporation, partnership, limited
liability company, association, trust, unincorporated organization or other
legal entity; and
(f) "subsidiary" or "subsidiaries" of WRGI, NAVITEC or any other person,
means any corporation, partnership, limited liability company, association,
trust, unincorporated association or other legal entity of which WRGI,
NAVITEC or any such other person, as the case may be (either alone or through
or together with any other subsidiary), owns, directly or indirectly, 50% or
more of the capital stock, the holders of which are generally entitled to
vote for the election of the board of directors or other governing body of
such corporation or other legal entity.
Section 7.9. Personal Liability. This Agreement shall not create or be
deemed to create or permit any personal liability or obligation on the part
of any direct or indirect stockholder of WRGI, NAVITEC or any officer,
director, employee, agent, representative or investor of any party hereto.
Section 7.10. Specific Performance. The parties hereby acknowledge and
agree that the failure of any party to perform its agreements and covenants
hereunder, including its failure to take all actions as are necessary on its
part to the consummation of the Merger, will cause irreparable injury to the
other parties for which damages, even if available, will not be an adequate
remedy. Accordingly, each party hereby consents to the issuance of injunctive
relief by any court of competent jurisdiction to compel performance of such
party's obligations and to the granting by any court of the remedy of
specific performance of its obligations hereunder; provided, however, that,
if a party hereto is entitled to receive any payment or reimbursement of
expenses pursuant to Sections 6.3(a), (b) or (c), it shall not be entitled to
specific performance to compel the consummation of the Merger.
Section 7.11. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same agreement.
In Witness Whereof, each of the parties has caused this Agreement to be duly
executed on its behalf as of the day and year first above written.
WORLDNET RESOURCE GROUP, INC.
By:/s/ Xxxx Xxxxx
Name: Xxxx Xxxxx
Title: President
NAVITEC GROUP, INC.
By:/s/ Xxxxxxx XxXxxx
Name: Xxxxxxx X. XxXxxx
Title: President
WRGI DISCLOSURE SCHEDULE
Schedule 2.1 Organization See Amended Articles/Bylaws
Schedule 2.6 Consents & Approvals None Provided
Schedule 2.7 No Default Not Applicable
Schedule 2.8 No Undisclosed Liability None Exist
Schedule 2.9 Litigation None Exist
Schedule 2.10 Compliance with Applicable Law None
Schedule 2.11 Employee Benefit Plans None Provided
Schedule 2.12 Environmental Laws and Regs Not Applicable
Schedule 2.13 Tax Matters None Exist
Schedule 2.14 Title to Property None Exist
Schedule 2.15 Intellectual Property None Exist
Schedule 2.16 Insurance None Exist
Schedule 2.17 Vote Required None Required
Schedule 2.18 Tax Treatment Not Applicable
Schedule 2.19 Affiliates _________________
Schedule 2.20 Certain Business Practices None Exist
Schedule 2.21 Insider Interest __________________
Schedule 2.22 Opinion of Financial Adviser Waived - None Exist
Schedule 2.23 Broker None Exist
Schedule 4.1 Conduct of Business None Provided
NAVITEC DISCLOSURE SCHEDULE
Schedule 3.2(b) Subsidiary Stock None Exist
Schedule 3.2(c) Capital Stock Rights None Exist other than as in
Articles
Schedule 3.2(d) Securities conversions None Exist
Schedule 3.2 (f) Subsidiaries None Exist
Schedule 3.6 Consents & Approvals Provided
Schedule 3.7 No Default Not Applicable
Schedule 3.8 No Undisclosed Liability None Exist
Schedule 3.9 Litigation None Exist
Schedule 3.10 Compliance with Applicable Law Not Applicable - full
disclosed in 10KSB
Schedule 3.11 Employee Benefit Plans Section 3.11( c)No Options Exist
Section 3.11(e) No Agreements Exist
Schedule 3.12 Environmental Laws and Regs Not Applicable
Schedule 3.13 Tax Matters None Exist
Schedule 3.14 Title to Property None Exist
Schedule 3.15(b) Intellectual Property None Exist
Schedule 3.16 Insurance None Exist
Schedule 3.17 Vote Required See Shareholder Meeting
Certificate
Schedule 3.18 Tax Treatment Not Applicable
Schedule 3.19 Affiliates XXXXXXX XXXXXX
Schedule 3.20 Certain Business Practices None Exist
Schedule 3.21 Insider Interest XXXXXXX XXXXXX
Schedule 3.22 Opinion of Financial Adviser Waived - None Exist
Schedule 2.23 Broker None Exist
Schedule 4.2 Conduct of Business See Amended & Restated Articles
