EXHIBIT 99.3
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT ("Agreement"), dated as of December 13, 2002, is
by and among Imaging Technologies Corporation, a corporation organized under the
laws of the State of Delaware, U.S.A. ("ITEC" or "Seller"), and Baseline
Worldwide Limited (the "Buyer"); a corporation organized under the laws of
British Virgin Islands.
Buyer and Seller may be referred to collectively as the "Parties."
R E C I T A L S
A. Whereas, the Seller is the beneficial owner of 200 shares which
represents all of the issued and outstanding capital stock ("Shares") of Dream
Canvas, Inc. ("DCI" or the "Company"); and
B. Whereas, upon the terms and conditions set forth below, Seller
desires to sell and Buyer desires to purchase all of the Shares, such that,
following such transaction, the Company will be 100% owned by Buyer;
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the Parties hereto
agree as follows:
ARTICLE 1
SALE AND PURCHASE OF THE SHARES
1.1 Sale of the Shares.Subject to the terms and conditions herein set
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forth, at the time of closing as referred to in Article 4, Seller shall sell and
transfer to Buyer the Shares.
1.2 Consideration. Buyer shall pay to the Seller US Dollars Seventy
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Five Thousands (US$75,000) in accordance with Article 4 section 4.3. The
consideration payable under this section 1.2 constitutes the "Purchase Price".
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
For purposes of this Agreement, the term "Material Adverse Effect" means
any change or effect that is or is reasonably likely to be materially adverse to
the business, assets (including tangible assets), financial condition, or
results of operations of the entity. Except as disclosed in a document if any,
referring specifically to the representations and warranties in this Agreement
that identifies by section number the section and subsection to which such
disclosure relates and is delivered by the Party making the representations and
warranties to the others prior to the execution of this Agreement (the
"Disclosure Schedules"), the Parties represent and warrant as of the date hereof
and as of the Closing, as follows:
2.1 Representations and Warranties of Buyer. Buyer represents and warrants
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to the Seller that:
2.1.1 Organization, Standing, Power. Buyer is a corporation organized and in
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good standing in British Virgin Islands with all requisite power, franchises,
licenses, permits, and authority to own its properties and assets and to carry
on its business as it has been and is being conducted.
2.1.2 Authority. The Buyer has all requisite power and authority to enter
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into this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery by the Buyer of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
action on the part of the Buyer. This Agreement has been duly executed and
delivered by the Buyer to the Seller and constitutes a valid and binding
obligation of the Buyer enforceable in accordance with its terms, except that
such enforceability may be subject to: (a) bankruptcy, insolvency,
reorganization, or other similar laws relating to enforcement of creditors'
rights generally; and (b) general equitable principles.
2.2 Representations and Warranties of the Seller. Seller represents and
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warrants to the Buyer that:
2.2.1 Organization, Standing, Power. Seller is a corporation duly
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organized, validly existing, and in good standing under the laws of the State of
Delaware, U.S.A.,. It has all requisite corporate power, franchises, licenses,
permits, and authority to own its properties and assets and to carry on its
business as it has been and is being conducted. The Company is duly qualified
and in good standing to do business in each jurisdiction in which a failure to
so qualify would have a Material Adverse Effect on the Company.
2.2.2 Authority. The Seller has all requisite power and authority to
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enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery by the Seller of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary action on the parts of the Seller. This Agreement has been duly
executed and delivered by the Seller and to Buyer and constitutes a valid and
binding obligation of the Seller, enforceable in accordance with its terms,
except that such enforceability may be subject to: (a) bankruptcy, insolvency,
reorganization, or other similar laws relating to enforcement of creditors'
rights generally; and (b) general equitable principles.
2.2.3 Capitalization of the Company.
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(a) All of the capital stock of the Company that is currently issued and
outstanding is held by Seller.
(b) There are no options, warrants, rights, calls, commitments, plans,
contracts, or other agreements of any character granted or issued by the Company
or by Seller, which provide for the purchase, issuance, or transfer of any
additional shares of the capital stock of the Company, nor are there any
outstanding securities granted or issued by the Company or by Seller that are
convertible into any shares of the equity securities of the Company, and none is
authorized. There are no outstanding bonds, debentures, notes, or other
indebtedness the holders of which have the right to vote (or convertible or
exercisable into securities having the right to vote) with holders of the
Company's capital stock on any matter.
(c) Neither the Company or Seller is a party or subject to any agreement or
understanding, and, to the best of their knowledge, there is no agreement or
understanding between any persons and/or entities, which affects or relates to
the voting or giving of written consents with respect to any security or by a
shareholder or director of the Company.
(d) Neither the Company or Seller has granted or agreed to grant any stock
registration rights to any person or entity.
2.2.4 Subsidiaries. There are no Subsidiaries of the Company.
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"Subsidiary" or "Subsidiaries" means all corporations, trusts, partnerships,
associations, joint ventures, or other Person of which the Company or any
Subsidiary of the Company owns not less than twenty percent (20%) of the voting
securities or other equity or of which the Company or any Subsidiary of the
Company possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies, whether through ownership of voting
shares, management contracts, or otherwise.
2.2.5 No Defaults. The Company has not received notice that it would
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be, with the passage of time, in default or violation of any term, condition, or
provision of: (i) their Articles of Incorporation or Bylaws; (ii) any judgment,
decree, or order applicable to the Company; or (iii) any loan or credit
agreement, note, bond, mortgage, indenture, contract, agreement, lease, license,
or other instrument to which the Company is now a party or by which it or any of
its properties or assets may be bound, except for defaults and violations which,
individually or in the aggregate, would not have a Material Adverse Effect on
the Company.
2.2.6 Financial Statements. The Company has made available to Buyer a
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true and complete copy of its internal financial statements (the "Financial
Statements"), which comply as to form in all material respects with all
applicable accounting requirements with respect thereto and fairly present the
financial positions and known liabilities of the Company as at the dates thereof
and the results of its operations and cash flows for the periods then ended.
There has been no change in the Company's accounting policies or the methods of
making accounting estimates or changes in estimates that are material to the
Financial Statements, except as described in the notes thereto.
2.2.7 Absence of Undisclosed Liabilities. The Company has no
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liabilities or obligations (whether absolute, accrued, or contingent) except:
(i) liabilities that are accrued or fully and completely reserved against in its
Balance Sheets; or (ii) additional liabilities reserved against since its
inception that have arisen in the ordinary course of business, are accrued or
reserved against its books and records, and that have been disclosed to Buyer.
2.2.8 Absence of Changes. Since inception, the Company has conducted
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its business in the ordinary course and there has not been: (i) any Material
Adverse Effect on the business, financial condition, liabilities, or assets of
the Company or any development or combination of developments of which
management of the Company has knowledge which is reasonably likely to result in
such an effect; (ii) any damage, destruction, or loss, whether or not covered by
insurance, having a Material Adverse Effect on the Company; (iii) any
declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock, or property) with respect to the capital stock of the
Company; (iv) any increase or change in the compensation or benefits payable or
to become payable by the Company to any of its employees, except in the ordinary
course of business consistent with past practice; (v) any sale, lease,
assignment, disposition, or abandonment of a material amount of property of the
Company, except in the ordinary course of business; (vi) any increase or
modification in any bonus, pension, insurance, or other employee benefit plan,
payment, or arrangement made to, for, or with any of their employees; (vii) the
granting of stock options, restricted stock awards, stock bonuses, stock
appreciation rights, and similar equity based awards; (viii) any resignation or
termination of employment of any officer of the Company; and the Company does
not know of the impending resignation or termination of employment of any such
officer; (ix) any merger or consolidation with another entity, or acquisition of
assets from another entity except in the ordinary course of business; (x) any
loan or advance by the Company to any person or entity, or guaranty by the
Company of any loan or advance; (xi) any amendment or termination of any
contract, agreement, or license to which the Company is a party, except in the
ordinary course of business; (xii) any mortgage, pledge, or other encumbrance of
any asset of the Company; (xiii) any waiver or release of any right or claim of
the Company, except in the ordinary course of business; (xiv) any write off as
uncollectible any note or account receivable or portion thereof; or (xv) any
agreement by the Company to do any of the things described in this Section
2.3.5.
2.2.9 Patents and Trademarks. The Company has sufficient title and ownership
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of all patents, trademarks, service marks, trade names, copyrights, trade
secrets, information, proprietary rights, and processes (collectively,
"Intellectual Property") necessary for its businesses as now conducted without
any conflict with or infringement of the rights of others. The Intellectual
Property owned by the Company is listed in the Disclosure Schedules. There are
no outstanding options, licenses, or agreements of any kind relating to the
Intellectual Property, nor is the Company bound by or a party to any options,
licenses, or agreements of any kind with respect to the Intellectual Property of
any other person or entity. The Company has not received any communications
alleging that it has violated or, by conducting its business as proposed, would
violate any of the Intellectual Property of any other person or entity. The
Company is not aware that any of the Company's employees is obligated under any
contract (including licenses, covenants, or commitments of any nature) or other
agreement, or subject to any judgment, decree, or order of any court or
administrative agency, that would interfere with the use of his or her best
efforts to promote the interests of the Company or that would conflict with the
Company's business as proposed to be conducted. Neither the execution or
delivery of this Agreement, nor the carrying on of the Company's business by its
employees, nor the conduct of the Company's business as proposed, will, to the
best of the Seller's and Company' knowledge, conflict with or result in a breach
of the terms, conditions or provisions of, or constitute a default under, any
contract, covenant, or instrument under which any of such employees is now
obligated. The Company does believe that it is or will be necessary to utilize
any inventions of any of the Company's employees (or people it currently intends
to hire) made prior to their employment by the Company.
2.2.10 Compliance with Other Instruments. The Company is not in
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violation or default of any provision of its certificate of incorporation or
bylaws, or of any instrument, judgment, order, writ, decree, or contract to
which it is a party or by which it is bound, or of any provision of any statute,
rule, or regulation which may be applicable to Company.
Subject to the satisfaction of the conditions set forth in Article 3 below, the
execution and delivery of this Agreement do not, and the consummation of the
transactions contemplated hereby will not, conflict with or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation, revocation,
non-renewal or acceleration of any obligation, material permit, license, and
authorization or to loss of a material benefit under, or the creation of a lien,
pledge, security interest, charge, or other encumbrance on any assets of the
Company or the Seller (any such conflict, violation, default, right, loss, or
creation being referred to herein as a "Violation") pursuant to: (i) any
provision of the organizational documents of the Company; or (ii) any loan or
credit agreement, note, bond, mortgage, indenture, contract, lease, or other
agreement, or instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule, or regulation applicable to each
of the Company and Seller's respective properties or assets, other than in the
case of any such Violation which individually or in the aggregate would not have
a Material Adverse Effect on either the Company or the Seller.
2.2.11 Employee Benefit Plans. There are no employee benefit plans
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(including without limitation all plans which authorize the granting of stock
options, restricted stock, stock bonuses, or other equity based awards) covering
active, former, or returned employees of the Company.
2.2.12 Other Personal Property. The books and records of the Company
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contain a complete and accurate description, and specify the location, of all
trucks, automobiles, machinery, equipment, furniture, supplies, and other
tangible personal property owned by, in the possession of, or used by the
Company in connection with its business. No personal property used by the
Company in connection with its business is held under any lease, security
agreement, conditional sales contract, or other title retention or security
arrangement.
2.2.13 Properties and Liens. The Company owns, free and clear of any
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liens, claims, charges, options, or other encumbrances, all of its tangible and
intangible property, real and personal, whether or not reflected in the
Financial Statements (except that sold or disposed of in the ordinary course of
business since the date of such statements) and all such property acquired since
the date of such statements. All real property and tangible personal property of
the Company is in good operating condition and repair, ordinary wear and tear
excepted.
2.2.14 Inventory. The inventories of the Company shown on the Financial
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Statements and inventories acquired by it subsequent to the date of the
Financial Statements consist solely of items of a quality and quantity usable
and salable in the normal course of business, with the exception of obsolete
materials and materials below standard quality, all of which have been written
down in the books of the Company to net realizable market value or have been
provided for by adequate reserves. Except for sales made in the ordinary course
of business, all inventory is the property of the Company. No items are subject
to security interests, except as set forth in the Disclosure Schedules. The
value of the inventories has been determined on a first-in, first-out basis
consistent with prior years.
2.2.15 Major Contracts. The Company is not a party or subject to:
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(a) Any union contract, or any employment contract or arrangement providing
for future compensation, written or oral, with any officer, consultant,
director, or employee which is not terminable by the Company on 30 days' notice
or less without penalty or obligations to make payments related to such
termination;
(b) Any joint venture contract, partnership agreement or arrangement or any
other agreement which has involved or is expected to involve a sharing of
revenues with other persons or a joint development of products with other
persons;
(c) Any manufacture, production, distribution, sales, franchise, marketing,
or license agreement, or arrangement by which products or services of the
Company are developed, sold, or distributed;
(d) Any material agreement, license, franchise, permit, indenture, or
authorization which has not been terminated or performed in its entirety and not
renewed which may be, by its terms, accelerated, terminated, impaired, or
adversely affected by reason of the execution of this Agreement, or the
consummation of the transactions contemplated hereby or thereby;
(e) Any material agreement, contract, or commitment that requires the
consent of another person for the Company to enter into or consummate the
transactions contemplated by this Agreement;
(f) Except for object code license agreements for the Company executed in
the ordinary course of business, any indemnification by the Company with respect
to infringements of proprietary rights;
or
(g) Any contract containing covenants purporting to materially limit the
Company's freedom to compete in any line of business in any geographic area.
2.2.16 Questionable Payments. Neither the Company nor any director,
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officer, employee, or agent of the Company, has: (i) made any payment or
provided services or other favors in any country in order to obtain preferential
treatment or consideration by any governmental entity with respect to any aspect
of the business of the Company; or (ii) made any political contributions that
would not be lawful under the laws of any country or any jurisdiction within any
country. Neither the Company, nor any director, officer, employee, or agent of
the Company, has been or is the subject of any investigation by any governmental
entity in connection with any such payment, provision of services, or
contribution.
2.2.17 Leases in Effect. All real property leases and subleases as to which
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the Company is a party and any amendments or modifications thereof (each a
"Lease" and, collectively, the "Leases") are listed in the Disclosure Schedules
and are valid, in full force and effect and enforceable, and there are no
existing defaults on the part of the Company and the Company has received nor
given notice of default or claimed default with respect to any Lease, nor is
there any event that with notice or lapse of time, or both, would constitute a
default thereunder. Except as set forth on the Disclosure Schedules, no consent
is required from the Company under any Lease in connection with the completion
of the transactions contemplated by this Agreement, and the Company has not
received notice that any party to any Lease intends to cancel, terminate, or
refuse to renew the same or to exercise any option or other right thereunder,
except where the failure to receive such consent, or where such cancellation,
termination, or refusal would not have a Material Adverse Effect on the Company.
2.2.18 Taxes.
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(a) All taxes, assessments, fees, penalties, interest, and other
governmental charges with respect to the Company which have become due and
payable since inception, or with respect to the Seller in connection with the
business operations of the Company, have been paid in full or adequately
reserved against by the Company, and all taxes, assessments, fees, penalties,
interest, and other governmental charges which have become due and payable have
been paid in full or adequately reserved against on its books of account and
such books are sufficient for the payment of all unpaid taxes, fees, and
assessments, and all interest and penalties thereon with respect to the periods
then ended and for all periods prior thereto;
(b) There are no agreements, waivers, or other arrangements providing for
an extension of time with respect to the assessment of any tax or deficiency
against the Company, nor are there any actions, suits, proceedings,
investigations, or claims now pending against the Company in respect of any tax
or assessment, or any matters under discussion with any authority relating to
any taxes or assessments, or any claims for additional taxes or assessments
asserted by any such authority; and
(c) There are no liens for taxes upon the assets of the Company except for
taxes that are not yet payable. The Company has withheld all taxes required to
be withheld in respect of wages, salaries, and other payments to all employees,
officers, and directors and timely paid all such amounts withheld to the proper
taxing authority.
2.2.19 Disputes and Litigation. There is no suit, claim, action,
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litigation, or proceeding pending or threatened against or affecting the Company
or any of its properties, assets, or business or to which the Company is a
party, in any court or before any arbitrator of any kind or before or by any
governmental entity, which would, if adversely determined, individually or in
the aggregate, have a Material Adverse Effect on the Company, nor is there any
judgment, decree, injunction, rule, or order of any governmental entity or
arbitrator outstanding against the Company, respectively, and having, or which,
insofar as reasonably can be foreseen, in the future could have, any such
effect. There is no investigation pending or threatened against any of the
Company before any governmental department, commission, board, bureau, agency,
instrumentality, or other governmental entity.
2.2.20 Compliance with Laws. The Company's business is not being
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conducted in violation of, or in a manner which could cause liability under any
applicable law, rule, or regulation, judgment, decree, or order of any
governmental entity, except for any violations or practices, which, individually
or in the aggregate, have not had and will not have a Material Adverse Effect on
the Company. The Company has all franchises, permits, licenses, and any similar
authority necessary for the conduct of its business as now being conducted by
it, the lack of which could materially and adversely affect the business,
properties, prospects, or financial condition of the Company and believes it can
obtain, without undue burden or expense, any similar authority for the conduct
of its business as it is planned to be conducted. The Company is not in default
in any material respect under any of such franchises, permits, licenses, or
other similar authority. A true and complete list of all such franchises,
permits, and licenses held by the Company is set forth in the Disclosure
Schedules.
2.2.21 Insurance. The Company has or shall obtain fire and casualty
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insurance policies, with extended coverage, sufficient in amount (subject to
reasonable deductibles) to allow it to replace any of its properties that might
be damaged or destroyed within 45 days of the execution of this Agreement.
2.2.22 Minute Books. The minute books of the Company provided to Buyer
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contain a complete summary of all meetings of directors and shareholders since
the time of incorporation and reflect all transactions referred to in such
minutes accurately in all material respects.
2.2.23 Governmental Consents. Any consents, approvals, orders, or
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authorizations of or registrations, qualifications, designations, declarations,
or filings with or exemptions by (collectively "Consents"), any court,
administrative agency, or commission, or other governmental authority or
instrumentality which may be required by or with respect to the Company in
connection with the execution and delivery of this Agreement or the consummation
by the Company of the transactions contemplated hereby, except for such Consents
which if not obtained or made would not have a Material Adverse Effect on the
Company for the transactions contemplated by this Agreement, are the
responsibility of the Company. The Company hereby represents and warrants that
such Consents have been obtained by them.
2.2.24 Certain Agreements. Neither the execution and delivery of this
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Agreement nor the consummation of the transactions contemplated hereby will: (i)
result in any payment (including, without limitation, severance, unemployment
compensation, parachute payment, bonus, or otherwise), becoming due to any
director, employee, or independent contractor of the Company, from any other
Person under any agreement or otherwise; (ii) materially increase any benefits
otherwise payable under any agreement; or (iii) result in the acceleration of
the time of payment or vesting of any such benefits.
2.2.25 Recent Transactions. Neither the Company nor any director,
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officer, employee, or agent of the Company, is participating in any discussions
or intends to engage in any discussion: (i) with any representative of any
corporation or corporations regarding the consolidation or merger of the Company
with or into any such corporation or corporations; (ii) with any corporation,
partnership, association, or other business entity or any individual regarding
the sale, conveyance, or disposition of all or substantially all of the assets
of the Company or a transaction or series of related transactions in which more
than fifty percent (50%) of the voting power of the Company is disposed of; or
(iii) regarding any other form of acquisition, liquidation, dissolution, or
winding up of the Company.
2.2.26 Related Party Transactions. No employee, officer, or director of
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the Company or the Seller, nor member of his or her immediate family is indebted
to the Company, nor is the Company indebted (or committed to make loans or
extend or guarantee credit) to any of them. None of such persons has any direct
or indirect ownership interest in any firm or corporation with which the Company
is affiliated or with which the Company has a business relationship, or any firm
or corporation that competes with the Company, except that employees, officers,
or directors of the Company or the Seller and members of their immediate
families may own stock in publicly traded companies that may compete with the
Company. No member of the immediate family of any officer or director of the
Company or the Seller is directly or indirectly interested in any material
contract with the Company.
2.2.27 Disclosure. To the extent it would have a Material Adverse
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Effect, no representation or warranty made by the Seller in this Agreement, nor
any document, written information, statement, financial statement, certificate,
or exhibit prepared and furnished or to be prepared and furnished by the Company
or the Seller, or its representatives pursuant hereto or in connection with the
transactions contemplated hereby, when taken together, contains any untrue
statement of a material fact, or omits to state a material fact necessary to
make the statements or facts contained herein or therein not misleading in light
of the circumstances under which it were furnished.
2.3 Reliance. The foregoing representations and warranties are made by
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each Party with the knowledge and expectation that the Parties are placing
reliance thereon.
ARTICLE 3
CONDITIONS PRECEDENT
3.1 Conditions to Each Party's Obligations. The respective obligations
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of each Party hereunder shall be subject to the satisfaction prior to or at the
Closing of the following conditions:
(a) No Restraints. No statute, rule, regulation, order, decree, or
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injunction shall have been enacted, entered, promulgated, or enforced by any
court or governmental entity of competent jurisdiction, which enjoins or
prohibits the consummation of this Agreement and shall be in effect.
(b) Legal Action. There shall not be pending or threatened in writing any
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action, proceeding, or other application before any court or governmental entity
challenging or seeking to restrain or prohibit the consummation of the
transactions contemplated by this Agreement, or seeking to obtain any material
damages or that would cause any of the transactions contemplated by this
Agreement to be rescinded following consummation.
(c) Governmental Approvals. All Consents of governmental entities legally
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required by the Parties for the transactions contemplated by this Agreement
shall have been filed, occurred, or been obtained, other than such Consents, the
failure of which to obtain would not have a Material Adverse Effect on the
consummation of the transactions contemplated by this Agreement.
(d) Consents of Other Third Parties. The Parties shall have received and
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delivered to the appropriate other Parties or Party all requisite consents and
approvals of all lenders, lessors, and other third parties whose consent or
approval is required in order for the Parties to consummate the transactions
contemplated by this Agreement, or in order to permit the continuation after the
Closing of the business activities of the Company in the manner such business is
presently carried on by it. Each Party shall have received copies of any
necessary written consent(s) to this Agreement and the transactions contemplated
herein.
3.2 Conditions to Seller's Obligations. The obligations of Seller shall
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be subject to the satisfaction prior to or at the Closing of the following
conditions unless waived by Seller:
(a) Representations and Warranties of Buyer. The representations and warranties
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of Buyer set forth in this Agreement shall be true and correct as of the date of
this Agreement and as of the Closing as though made on and as of the Closing,
except: (i) as otherwise contemplated by this Agreement; or (ii) in respects
that do not have a Material Adverse Effect on the Parties or on the benefits of
the transactions provided for in this Agreement. Seller shall have received a
certificate signed by Buyer to such effect on the Closing.
(b) Performance of Obligations of Buyer. Buyer shall have performed all
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agreements and covenants required to be performed by it under this Agreement
prior to the Closing, except for breaches that do not have a Material Adverse
Effect on the Parties or on the benefits of the transactions provided for in
this Agreement. Seller shall have received a certificate signed by Buyer to such
effect on the Closing.
3.3 Conditions to Buyer's Obligations. The obligations of Buyer shall
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be subject to the satisfaction prior to or at the Closing of the following
conditions unless waived by Buyer:
(a) Representations and Warranties of Seller. The representations and
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warranties of Seller set forth in this Agreement shall be true and correct as of
the date of this Agreement and as of the Closing as though made on and as of the
Closing, except: (i) as otherwise contemplated by this Agreement; or (ii) in
respects that do not have a Material Adverse Effect on the Parties or on the
benefits of the transactions provided for in this Agreement. Buyer shall have
received certificates signed by Seller to such effect on the Closing.
(b) Performance of Obligations of Seller and the Company. Seller and the
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Company shall have performed all agreements and covenants required to be
performed by them under this Agreement prior to the Closing, except for breaches
that do not have a Material Adverse Effect on the Parties or on the benefits of
the transactions provided for in this Agreement. Buyer shall have received
certificates signed by Seller to such effect on the Closing.
(c) Banking Relationships. The officers and directors of the Company shall
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execute a letter(s) or other a document(s) acceptable to the Buyer informing all
-
banks or other financial institutions of the change in control of the Company
and that the Company will inform such financial institutions of the officers who
will act on behalf of the Company with respects to Company accounts.
(e) Material Adverse Change. Since the date hereof and through Closing, there
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shall not have occurred any change, occurrence, or circumstance in Seller or the
Company having or reasonably likely to have, individually or in the aggregate,
in the reasonable judgment of Buyer, a Material Adverse Effect on the Parties or
on the transactions contemplated by this Agreement.
ARTICLE 4
CLOSING AND DELIVERY OF DOCUMENTS
4.1 Time and Place. The closing of the transactions contemplated by
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this Agreement shall take place at the offices of Buyer, no later than December
, 2002, or at such other time and place as the Parties mutually agree upon in
writing (which time and place are hereinafter referred to as the "Closing" or
the "Closing Date").
4.2 Deliveries by Seller. At Closing, Seller shall make the following
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deliveries to Buyer:
(a) A stock certificate or certificates representing the Shares as set
forth in Section 1.1 above;
(b) Certificates executed by Seller certifying that: (i) all Seller's
representations and warranties under this Agreement are true as of the Closing,
as though each of those representations and warranties had been made on that
date; and (ii) Seller has performed all agreements and covenants required to be
performed by it under this Agreement prior to the Closing, except for breaches
that do not have a Material Adverse Effect on the Parties or on the benefits of
the transactions provided for in this Agreement;
(c) Originals of letters to banks and financial institutions in the form
acceptable to the Buyer;
(d) Certified resolutions of the Board of Directors of the Seller, in form
satisfactory to counsel for Buyer, authorizing the execution and performance of
this Agreement;
(e) Certified resolutions of the Board of Directors of the Company, in form
satisfactory to counsel for Buyer, authorizing the transfer of the Shares, the
issue of the new stock certificate(s) to the Buyer, the cancellation of the old
stock certificate(s) if any, held by the Seller, and that the Company
shareholders' register be amended accordingly; and
(f) The minute book and corporate records of the Company.
4.3 Deliveries by Buyer. At Closing, Buyer shall deliver to Seller a
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certificate executed by Buyer certifying that:
(a) Buyer's representations and warranties under this Agreement are
true as of the Closing, as though each of those representations and warranties
had been made on that date; and
(b) Buyer has performed all agreements and covenants required to be
performed by it under this Agreement prior to the Closing, except for breaches
that do not have a Material Adverse Effect on the Parties or on the benefits of
the transactions provided for in this Agreement;
(c) the Purchase price to Seller as follows:
remittance of US$67,000 to California Bank and Trust, 0000 Xxxxxxx Xxxxxxx
Xxxx, Xxxxxxxx, Xxxxxxxxxx 00000; Account Name: Imaging Technologies Inc.;
Account Number: 2130104331; ABA Number: 000000000.
remittance of US$8,000 to Ashford Capital (to be instructed by Ashford
Capital).
ARTICLE 5
INDEMNIFICATION
5.1 Seller's Indemnity Obligations.
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(a) Upon receipt of notice thereof (provided that such notice is received
within the survival period set forth in Section 7.4, if applicable), Seller
shall indemnify, defend, and hold harmless Buyer from any and all claims,
demands, liabilities, damages, deficiencies, losses, obligations, costs and
expenses, including attorney fees and any costs of investigation that Buyer
shall incur or suffer, that arise, result from or relate to: (i) any breach of,
or failure by Seller to perform, any of its representations, warranties,
covenants, or agreements in this Agreement or in any schedule, certificate,
exhibit, or other instrument furnished or to be furnished by Seller and/or the
Company under this Agreement; and (ii) the employment of any of the Company's
employees which is in violation of any law, regulation, or ordinance of any
governmental entity either under the conduct of its business.
(b) Buyer shall notify promptly Seller of the existence of any claim,
demand, or other matter to which Seller's indemnification obligations would
apply, and shall give Seller a reasonable opportunity (but in any event not less
than 15 days after receipt of notice) to assume the defense of the same at their
own expense and with counsel of their own selection, provided that Buyer shall
at all times also have the right to retain separate co-counsel at its sole cost
and expense and fully participate in the defense, provided further that the
Buyer shall not consent to the entry of any judgment or enter into any
settlement with respect to such claim, demand, or other matter without the prior
written consent of the Seller. If Seller, within a reasonable time after this
notice, fails to defend, Buyer shall have the right, but not the obligation, to
undertake the defense of, and, with the written consent of Seller, to compromise
or settle the claim, demand, or other matter on behalf, for the account, and at
the risk, of Seller .
5.2 Buyer's Indemnity Obligations.
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(a) Upon receipt of notice thereof (provided that such notice is received
within the survival period set forth in Section 7.4, if applicable), Buyer shall
indemnify, defend, and hold harmless Seller from any and all claims, demands,
liabilities, damages, deficiencies, losses, obligations, costs, and expenses,
including attorney fees and any costs of investigation that Seller shall incur
or suffer, that arise, result from or relate to any breach of, or failure by
Buyer to perform any of its representations, warranties, covenants, or
agreements in this Agreement or in any schedule, certificate, exhibit, or other
instrument furnished or to be furnished by Buyer under this Agreement.
(b) Upon receipt of notice thereof, Buyer shall indemnify, defend, and hold
harmless Seller from any and all claims, demands, liabilities, damages,
deficiencies, losses, obligations, costs, and expenses, including attorney fees
and any costs of investigation that Seller shall incur or suffer, that arise,
result from or relate to the conduct of the business of the Company subsequent
to the Closing. The indemnification in favor of Seller hereunder is in addition
to and not in lieu of any statutory or other contractual rights of
indemnification.
(c) Seller shall notify promptly Buyer of the existence of any claim,
demand or other matter to which Buyer's indemnification obligations would apply,
and shall give it a reasonable opportunity to defend the same at its own expense
and with counsel of its own selection, provided that Seller shall at all times
also have the right to fully participate in the defense. If Buyer, within a
reasonable time after this notice, fails to defend, Seller shall have the right,
but not the obligation, to undertake the defense of, and, with the written
consent of Buyer, to compromise or settle the claim or other matter on behalf,
for the account, and at the risk, of Buyer.
ARTICLE 6
DEFAULT, AMENDMENT AND WAIVER
6.1 Default. Upon a breach or default under this Agreement by any of
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the Parties (following the cure period provided herein), the non-defaulting
party shall have all rights and remedies given hereunder or now or hereafter
existing at law or in equity or by statute or otherwise; provided, however, that
Section 5.1 sets forth the sole and exclusive remedy of any Party against any
other Party for a breach or default under this Agreement or for any claim,
demand, or matter which arises, results from, or relates to the Agreement.
Notwithstanding the foregoing, in the event of a breach or default by any Party
hereto in the observance or in the timely performance of any of its obligations
hereunder which is not waived by the non-defaulting Party, such defaulting Party
shall have the right to cure such default within 15 days after receipt of notice
in writing of such breach or default.
6.2 Waiver and Amendment. Any term, provision, covenant,
-----------------------
representation, warranty, or condition of this Agreement may be waived, but only
-
by a written instrument signed by the party entitled to the benefits thereof.
The failure or delay of any party at any time or times to require performance of
any provision hereof or to exercise its rights with respect to any provision
hereof shall in no manner operate as a waiver of or affect such party's right at
a later time to enforce the same. No waiver by any party of any condition, or of
the breach of any term, provision, covenant, representation, or warranty
contained in this Agreement, in any one or more instances, shall be deemed to be
or construed as a further or continuing waiver of any such condition or breach
or waiver of any other condition or of the breach of any other term, provision,
covenant, representation, or warranty. No modification or amendment of this
Agreement shall be valid and binding unless it be in writing and signed by all
Parties hereto.
ARTICLE 7
MISCELLANEOUS
7.1 Expenses. Whether or not the transactions contemplated hereby are
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consummated, each of the Parties hereto shall bear all taxes of any nature and
all fees and expenses relating to or arising from its compliance with the
various provisions of this Agreement and such party's covenants to be performed
hereunder, and except as otherwise specifically provided for herein, each of the
Parties hereto agrees to pay all of its own expenses (including, without
limitation, attorneys and accountants' fees, and printing expenses) incurred in
connection with this Agreement, the transactions contemplated hereby, the
negotiations leading to the same and the preparations made for carrying the same
into effect, and all such taxes, fees, and expenses of the Parties hereto shall
be paid prior to Closing.
7.2 Notices. Any notice, request, instruction, or other document
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required by the terms of this Agreement, or deemed by any of the Parties hereto
to be desirable, to be given to any other party hereto shall be in writing and
shall be given by facsimile, personal delivery, overnight delivery, or mailed by
registered or certified mail, postage prepaid, with return receipt requested, to
the following addresses:
To Seller: Imaging Technologies Corporation
0000 Xxxxxxx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, XX 00000
Attn: Xxxxx Xxxxx, CEO
Telephone: 000-000-0000 Fax: 000-000-0000
To the Buyer: Baseline Worldwide Limited
Room 2304, SUP Tower, 00-00 Xxxx'x Xxxx, Xxxxx Xxxxx, Xxxx Xxxx
Attn: Xxxxxx Xxx, Director
Telephone: -852-2525-2347 Fax: 000-0000-0000
The persons and addresses set forth above may be changed from time to time by a
notice sent as aforesaid. If notice is given by facsimile, personal delivery, or
overnight delivery in accordance with the provisions of this Section, said
notice shall be conclusively deemed given at the time of such delivery. If
notice is given by mail in accordance with the provisions of this Section, such
notice shall be conclusively deemed given seven days after deposit thereof in
the United States mail.
7.3 Entire Agreement. This Agreement, together the Schedules or the Exhibits
----------------
hereto, sets forth the entire agreement and understanding of the Parties hereto
with respect to the transactions contemplated hereby, and supersedes all prior
agreements, arrangements and understandings related to the subject matter
hereof. No understanding, promise, inducement, statement of intention,
representation, warranty, covenant, or condition, written or oral, express or
implied, whether by statute or otherwise, has been made by any party hereto
which is not embodied in this Agreement, schedules, or exhibits hereto, or the
written statements, certificates, or other documents delivered pursuant hereto
or in connection with the transactions contemplated hereby, and no party hereto
shall be bound by or liable for any alleged understanding, promise, inducement,
statement, representation, warranty, covenant, or condition not so set forth.
7.4 Survival of Representations. All statements of fact (including
-----------------------------
financial statements) contained in the schedules, exhibits, the certificates, or
any other instrument delivered by or on behalf of the Parties hereto, or in
connection with the transactions contemplated hereby, shall be deemed
representations and warranties by the respective party hereunder. All
representations, warranties, agreements, and covenants hereunder shall survive
the Closing and remain effective regardless of any investigation or audit at any
time made by or on behalf of the Parties or of any information a party may have
in respect hereto; provided, however, that the representations and warranties of
the Parties shall remain effective only for a period of two years following the
Closing. Consummation of the transactions contemplated hereby shall not be
deemed or construed to be a waiver of any right or remedy possessed by any party
hereto, notwithstanding that such party knew or should have known at the time of
Closing that such right or remedy existed, except in accordance with section
6.1.
7.5 Incorporated by Reference. The schedules, exhibits, and all
---------------------------
documents (including, without limitation, all financial statements) delivered as
part hereof or incident hereto are incorporated as a part of this Agreement by
reference.
7.6 Remedies Cumulative. Except as otherwise noted, no remedy herein
--------------------
conferred upon the Parties is intended to be exclusive of any other remedy and
each and every such remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or otherwise.
7.7 Execution of Additional Documents. Each Party hereto shall make,
------------------------------------
execute, acknowledge, and deliver such other instruments and documents, and take
all such other actions as may be reasonably required in order to effectuate the
purposes of this Agreement and to consummate the transactions contemplated
hereby.
7.8 Finders' and Related Fees. Each of the Parties hereto is
----------------------------
responsible for, and shall indemnify the other against, any claim by any third
party to a fee, commission, bonus, or other remuneration arising by reason of
any services alleged to have been rendered to or at the instance of said party
to this Agreement with respect to this Agreement or to any of the transactions
contemplated hereby.
7.9 Governing Law. This Agreement has been negotiated and executed in
--------------
the State of California, U.S.A., and shall be construed and enforced in
accordance with the laws of such state, without regard to its conflicts of laws
provisions.
7.10 Forum. Each of the Parties hereto agrees that any action or suit
-----
which may be brought by any party hereto against any other party hereto in
connection with this Agreement or the transactions contemplated hereby may be
brought only in a federal or state court in San Diego, California, U.S.A.
7.11 Professional Fees. In the event any Party hereto shall commence
------------------
legal proceedings against the other to enforce the terms hereof, or to declare
rights hereunder, as the result of a breach of any covenant or condition of this
Agreement, the prevailing party in any such proceeding shall be entitled to
recover from the losing party its costs of suit, including reasonable attorneys'
fees, accountants' fees, and experts' fees.
7.12 Binding Effect and Assignment. This Agreement shall inure to the
-------------------------------
benefit of and be binding upon the Parties hereto and their respective heirs,
executors, administrators, legal representatives, and assigns.
7.13 Counterparts; Facsimile Signatures. This Agreement may be
------------------------------------
executed simultaneously in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. The Parties agree that facsimile signatures of this Agreement when
transmitted by one party to another party shall be deemed a valid and binding
execution of this Agreement by the sending party.
7.14 Representation. All Parties to this Agreement have been given the
--------------
opportunity to consult with counsel of their choice regarding their rights under
this Agreement.
7.15 Language. The original and official version of this Agreement, all
--------
exhibits and attachments to it, and all documents relating to it shall be in the
English language and all business between the Parties shall be conducted in the
English language.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement, as of
the date first written hereinabove.
SELLER:
Imaging Technologies Corporation
______________________________________
By: Xxxxx Xxxxx, President and CEO
BUYER:
Baseline Worldwide Limited
______________________________________
BBy: Xxxxxx Xxx
Title Director
