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AGREEMENT AND PLAN
OF MERGER
among
AMTEC, INC.,
AMTEC ACQUISITION CORPORATION
and
UIH HUNAN, INC.
dated as of December 23, 1998
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AGREEMENT AND PLAN
OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
December 23, 1998, is among AMTEC, INC., a Delaware corporation ("Parent"),
AMTEC ACQUISITION CORPORATION, a Colorado corporation and a wholly-owned
subsidiary of Parent ("Merger Sub"), and UIH HUNAN, INC., a Colorado
corporation ("UIHH").
RECITALS
A. The Boards of Directors of Parent and UIHH have determined that
a business combination between Parent and UIHH is in the best interests of
their respective companies and shareholders, and accordingly have approved
this Agreement and the merger provided for herein whereupon Merger Sub
shall merge with and into UIHH upon the terms, and subject to the
conditions, set forth herein.
B. This Agreement, and the exhibits and schedules contemplated
hereby, represent the entire transaction by which Parent is acquiring all
of the issued and outstanding capital stock of UIHH in exchange for an
aggregate of 9,600 shares, subject to adjustment as specified herein, of
the Series F Convertible Preferred Stock, $.001 par value, of Parent (the
"Parent Preferred Stock") to be issued to UIH China Holdings, Inc. (the
"UIHH Shareholder").
C. The merger is intended to qualify, for federal income tax
purposes, as a tax-free reorganization within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "Code"), and this
Agreement is intended to be a "plan of reorganization" within the meaning
of the regulations promulgated under Section 368 of the Code.
D. Parent, Merger Sub and UIHH desire to make certain
representations, warranties and agreements in connection with the merger.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Subject to the terms and conditions of this
Agreement and the Colorado Business Corporation Act (the "Act"), at the
Effective Time (as defined in Section 1.3), Merger Sub shall be merged with
and into UIHH in accordance herewith and the separate corporate existence
of Merger Sub shall thereupon cease (the "Merger"). UIHH shall be the
surviving corporation in the Merger and, therefore, is sometimes
hereinafter referred to as "Surviving Corporation."
1.2 The Closing. Subject to the terms and conditions of this
Agreement, the closing of the Merger (the "Closing") shall take place at
the offices of Holme Xxxxxxx & Xxxx LLP, 0000 Xxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxxxxx 00000, at 10:00 a.m., local time, within three business
days following the day on which the conditions set forth in Article VIII
shall be fulfilled or waived in accordance herewith, or at such other time
or date as Parent and UIHH agree. The date on which the Closing occurs is
hereinafter referred to as the "Closing Date."
1.3 Effective Time. If all the conditions to the Merger set forth
in Article VIII shall have been fulfilled or waived in accordance herewith
and this Agreement shall not have been terminated as provided in Article X,
the parties hereto shall cause Articles of Merger and a Plan of Merger
meeting the requirements of Section 7-11-101 of the Act to be properly
executed and duly filed in accordance with the Act on the Closing Date.
Forms of the Articles of Merger and Plan of Merger are set forth hereto as
Exhibits 1.3 (a) and (b). The Merger shall become effective at the time
specified in the Articles of Merger on the date they are accepted for
filing by the Secretary of State of the State of Colorado (the "Effective
Time").
1.4 Certain Tax Positions. The parties hereto intend the Merger to
qualify, and will take the position for tax purposes that the Merger
qualifies, as a non-taxable reorganization under Sections 368(a)(1)(A) and
(a)(2)(E) of the Code.
1.5 Effect of Merger. At the Effective Time, the effect of the
Merger shall be as provided in this Agreement, the Articles of Merger and
Plan of Merger and the applicable provisions of the Act. Without limiting
the generality of the foregoing, and subject thereto, at the Effective Time
all the property, rights, privileges, powers and franchises of UIHH and
Merger Sub shall vest in the Surviving Corporation, and all debts,
liabilities and duties of UIHH and Merger Sub shall become the debts,
liabilities and duties of the Surviving Corporation.
ARTICLE II
SURVIVING CORPORATION
2.1 Articles of Incorporation. The Articles of Incorporation of
Merger Sub as in effect immediately prior to the Effective Time shall be
the Articles of Incorporation of the Surviving
Corporation until duly amended.
2.2 Bylaws. At the Effective Time, the Bylaws of the Surviving
Corporation shall be deemed amended and restated in the form of the Bylaws
of Merger Sub as in effect immediately prior to the Effective Time, until
duly amended in accordance with applicable law.
2.3 Directors. The directors of the Surviving Corporation shall be
Xxxxxx X. Xxxxxx, Xx., Xxxxxxx Xxx and Xxxxxx Xxxxxxx.
2.4 Officers. The officers the of Surviving Corporation shall be
Xxxxxx X. Xxxxxx, Xx., President and Chief Executive Officer, Xxxxxxx Xxx,
Executive Vice President, and Xxxxxx Xxxxxxx, Senior Vice President and
Chief Financial Officer.
ARTICLE III
EFFECT OF MERGER ON CAPITAL STOCK
3.1 Effect on Capital Stock. At the Effective Time, by virtue of
the Merger and without any action on the part of Parent, Merger Sub, UIHH
or the holders of securities of any of the
foregoing, all of the following shall occur:
(a) Conversion of UIHH Common Stock.
(i) At the Effective Time, all issued and outstanding shares
of UIHH Common Stock (as defined in Section 4.2) shall
automatically be canceled and retired and no longer be outstanding,
but instead shall be converted into the right to receive aggregate
consideration ("Merger Consideration") equal to the greater of (A)
9,600 shares of Parent Preferred Stock, or (B) a number of shares
of Parent Preferred Stock equal to (i) $12,000,000, divided by (ii)
the Average Closing Price Per Share. Each share of Parent Preferred
Stock will be issued pursuant to and have the rights set forth in
the Certificate of Designations, attached hereto as Exhibit
3.1(a)(i).
(ii) Exhibit 3.1(a)(ii) sets forth all shares of UIHH Common
Stock outstanding as of the date of this Agreement, along with a
calculation of the shares of Parent Preferred Stock
issuable as of the Effective Time.
(iii) As used herein, the term "Average Closing Price Per
Share" means the average closing market price per share for shares
of the Parent Common Stock during the ten (10) consecutive trading
days ending on the third trading day prior to the Effective Time,
as reported by the American Stock Exchange.
(b) Fractional Shares. No fraction of a share of Parent Preferred
Stock will be issued in the Merger. In lieu of such issuance, all shares of
Parent Preferred Stock issued to the UIHH Shareholder pursuant to this
Agreement shall be rounded up to the closest whole share of Parent
Preferred Stock.
(c) Capital Stock of Merger Sub. At the Effective Time, by virtue
of the Merger and without any action on the part of any holder of any
capital stock of Parent, Merger Sub or UIHH, each issued and outstanding
share of Common Stock of Merger Sub (the "Merger Sub Common Stock") shall
be converted into one (1) share of the Surviving Corporation's Common
Stock.
3.2 Exchange of Certificates. At the Closing, UIHH shall deliver or
cause to be delivered to Parent stock certificates representing all of the
issued and outstanding shares of UIHH Common Stock endorsed in blank or
accompanied by duly executed assignment documents and Parent shall deliver
to the UIHH Shareholder, in exchange for such shares of UIHH Common Stock
so delivered, the number of shares of Parent Preferred Stock to which the
shareholder of UIHH is entitled pursuant to Section 3.1 (a) hereof.
3.3 No Further Ownership Rights in UIHH Common Stock. All shares of
Parent Preferred Stock issued upon surrender for exchange of shares of UIHH
Common Stock in accordance with the terms hereof shall be deemed to have
been issued in full satisfaction of all rights pertaining to such shares of
UIHH Common Stock, and there shall be no further registration of transfers
on the records of the Surviving Corporation of shares of UIHH Common Stock
that were outstanding immediately prior to the Effective Time.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF UIHH
Except as disclosed in a document of even date herewith and
delivered by UIHH to Parent prior to the execution and delivery of this
Agreement and referring to the section number and subsection of the
representations and warranties in this Agreement (the "UIHH Disclosure
Schedule"), UIHH represents and warrants to Parent and Merger Sub as
follows:
4.1 Organization, Standing and Power. UIHH is a corporation duly
organized and validly existing and in good standing under the laws of the
State of Colorado, has the full corporate power to own its properties and
to carry on its business as now being conducted and is duly qualified to do
business and is in good standing in each jurisdiction in which the
ownership of its properties or the conduct of its business requires such
qualification, except for jurisdictions in which the failure to be so
qualified and in good standing would not have a Material Adverse Effect (as
defined in Section 10.4) on UIHH. UIHH has delivered to Parent a complete
and correct copy of its Articles of Incorporation and Bylaws, each as
amended to date. UIHH is not in violation of any of the provisions of its
Articles of Incorporation or Bylaws or equivalent organizational documents.
The UIHH Disclosure Schedule lists a complete and correct list of the
officers and directors of UIHH.
4.2 Capitalization; Shareholders. The authorized capital stock of
UIHH consists of 10,000 shares of UIHH Common Stock, par value $1.00 (the
"UIHH Common Stock"), of which there are issued and outstanding 100 shares.
The UIHH Shareholder owns all 100 outstanding shares of UIHH Common Stock.
The sole shareholder of the UIHH Shareholder is UIH Asia/Pacific
Communications, Inc. The UIHH Disclosure Schedule sets forth all
outstanding subscriptions, options, warrants, puts, calls, purchase or sale
rights, conversion rights, exchangeable or convertible securities or other
commitments, agreements, contracts understandings, restrictions,
arrangements and rights of any nature ("Rights Agreements") to which UIHH
is a party or by which UIHH may be bound obligating UIHH to issue, deliver,
sell, purchase, redeem, or cause to be issued, delivered, sold or purchased
additional shares of the capital stock of UIHH or obligating UIHH to enter
into such Rights Agreements. All outstanding shares of UIHH Common Stock
are duly authorized, validly issued, fully paid and non-assessable, are
free and clear of any mortgage, pledge, lien, encumbrance, charge or other
security interest (a "Lien"), and are not subject to preemptive rights or
rights of first refusal created by statute, the Articles of Incorporation
or Bylaws of UIHH or any agreement to which UIHH is a party or by which it
is bound. There are no contracts, commitments or agreements relating to
voting, purchase or sale of UIHH's capital stock. UIHH does not have any
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 shares of UIHH Common Stock on
any matter.
4.3 Subsidiaries. Except for a 49 percent interest in the Hunan
International Telecommunications Company Limited, a joint venture limited
liability company organized and existing under the laws of the Peoples'
Republic of China, UIHH does not directly or indirectly own any equity or
similar interest in, or any interest convertible or exchangeable or
exercisable for any equity or similar interest in, any corporation,
partnership, joint venture or other business association or entity.
4.4 Due Authorization.
(a) UIHH has the full corporate power and authority to enter into
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 authorized by all necessary
corporate action on the part of UIHH. This Agreement has been duly executed
and delivered by UIHH and, assuming due execution and delivery by all other
parties hereto, constitutes the valid and binding obligation of UIHH
enforceable against UIHH in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar statutes or rules of law
affecting creditors' rights generally or by general principles of equity.
The execution and delivery of this Agreement by UIHH do not, and the
consummation of the transactions contemplated hereby will not: (i) conflict
with or violate any provision of the Articles of Incorporation or Bylaws of
UIHH, (ii) violate or conflict with any permit, order, license, decree,
judgment, statute, law, ordinance, rule or regulation applicable to UIHH or
the properties or assets of UIHH, or (iii) result in any breach or
violation of, or constitute a default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination, cancellation
or acceleration of, or result in the creation of any Lien on any of the
properties or assets of UIHH pursuant to or require the consent or approval
of any party to any mortgage, indenture, lease, contract or other agreement
or instrument, bond, note, concession or franchise applicable to UIHH or
any of its properties or assets, except, in the case of this clause (iii)
only, where such conflict, violation, default, termination, cancellation,
acceleration or Lien would not have a Material Adverse Effect on UIHH or
prevent the consummation of the transactions contemplated hereby. Except as
set forth in the UIHH Disclosure Schedule, no consent, approval, order or
authorization of, or registration, declaration or filing with, any court,
administrative agency or commission, political subdivision or other
governmental authority or instrumentality ("Governmental Entity") is
required by or with respect to UIHH in connection with the execution and
delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for the filing of the Plan of Merger and the
Articles of Merger as provided in Section 1.3 and such other consents,
authorizations, filings, approvals and registrations which, if not obtained
or made, would not have a Material Adverse Effect on UIHH or prevent the
consummation of transactions contemplated hereby.
(b) The UIHH Shareholder has approved, by written consent or
otherwise, this Agreement and the Merger in accordance with applicable law,
and no other consent or approval of any holder of UIHH Common Stock or
other equity securities of UIHH is required for UIHH to execute and deliver
this Agreement and consummate the transactions contemplated hereby. By
virtue of such approval, the UIHH Shareholder has no right to dissent and
obtain payment for its shares under applicable law.
4.5 Financial Statements.
(a) UIHH has delivered to Parent true and complete copies of the
balance sheet of UIHH as of February 28, 1998 (the "Annual UIHH Balance
Sheet"). UIHH also has delivered to Parent true copies of the unaudited
balance sheet of UIHH as of August 31, 1998 (the "Interim UIHH Balance
Sheet"). To the extent applicable, the Annual UIHH Balance Sheet and the
Interim UIHH Balance Sheet have been prepared in accordance with generally
accepted accounting principals as used in the United States of America
("GAAP") applied on a basis consistent with each other (except as indicated
in the notes thereto and, in the case of the Interim UIHH Balance Sheet,
that no notes are included) and fairly present the financial condition of
UIHH at the dates indicated therein, subject, in the case of the Interim
UIHH Balance Sheet, to normal, recurring year-end audit adjustments.
(b) At the respective dates of the balance sheets referred to in
this Section 4.5, UIHH did not have any liability or obligation of any
nature, whether accrued, absolute, fixed or contingent, and whether due or
to become due, that, in accordance with GAAP applied on a consistent basis,
should have been shown or reflected in the balance sheets but were not,
except for the omission of notes in unaudited balance sheets with respect
to contingent liabilities that in the aggregate did not materially exceed
those so reported in the latest unaudited balance sheets previously
delivered and that were of substantially the same type as so reported.
4.6 Absence of Certain Changes. Except as specifically permitted by
this Agreement or as set forth in the UIHH Disclosure Schedule, since the
date of the Annual UIHH Balance Sheet, UIHH has conducted its business in
the ordinary course consistent with past practice and there has not
occurred any change, event or condition (whether or not covered by
insurance) that has resulted in, or would reasonably be expected to result
in, a Material Adverse Effect on UIHH.
4.7 Liabilities. Except as set forth in the UIHH Disclosure
Schedule, UIHH does not have any liability or obligation of any nature
(whether accrued, absolute, contingent, unliquidated, civil, criminal or
otherwise, due or to become due) whether or not any such liability or
obligation would have been required to be disclosed on a balance sheet
prepared in accordance with GAAP.
4.8 Litigation. There is no private or governmental action, suit,
proceeding, claim, arbitration or investigation (each "Proceeding") pending
before any agency, court or tribunal, foreign or domestic, or, to the
knowledge of UIHH, threatened against UIHH or any of its assets and
properties or any of its officers or directors (in their capacities as
such). There is no judgment, decree or order against UIHH, or, to the
knowledge of UIHH, any of its directors or officers (in their capacities as
such), that could prevent consummation of the transactions contemplated by
this Agreement, or that could reasonably be expected to have a Material
Adverse Effect on UIHH.
4.9 Restrictions on Business Activities. There is no material
agreement, judgment, injunction, order or decree binding upon UIHH which
has or could reasonably be expected to have the effect of prohibiting or
impairing any current business practice of UIHH or the conduct of
business by UIHH as currently conducted.
4.10 Governmental Authorization. UIHH has obtained each federal,
state, county, local or foreign governmental consent, license, permit,
grant, or other authorization that is necessary for UIHH to own or lease,
operate and use its respective assets and properties and to carry on
business as currently conducted (collectively "UIHH Authorizations"). UIHH
has performed and fulfilled its obligations under the UIHH Authorizations,
and all the UIHH Authorizations are in full force and effect, except where
the failure to obtain or have any of such UIHH Authorizations would not
reasonably be expected to have a Material Adverse Effect on UIHH.
4.11 Contracts and Commitments. Except as set forth on the UIHH
Disclosure Schedule, UIHH is not a party to any oral or written (a)(i)
obligation for borrowed money, (ii) obligation evidenced by bonds,
debentures, notes or other similar instruments, (iii) obligation to pay the
deferred purchase price of property or services (other than trade accounts
arising in the ordinary course of business), (iv) obligation under capital
leases, (v) debt of others secured by a Lien on its property, (vi) guaranty
of liabilities or obligations of others, (vii) agreement under which UIHH
is obligated to make or expects to receive payments, individually or in the
aggregate, in excess of $100,000, or (viii) agreement granting any person a
Lien on any of its properties or assets (except purchase money security
interests created in the ordinary course of business consistent with past
practice); or (b)(i) employment agreement or collective bargaining
agreement or (ii) agreements that limit the right of UIHH, or any of its
employees to compete in any line of business; or (c) agreement that, after
giving effect to the transactions contemplated hereby, purports to restrict
or bind Parent or any of its subsidiaries, other than the Surviving
Corporation, in any respect (other than any such agreement that is not
material to the continued operation and current business practices of UIHH
and does not affect any material business relationship of UIHH). True and
complete copies of all agreements described in the UIHH Disclosure Schedule
have been delivered to Parent. UIHH has not breached in any material way,
and is not in default of any of its material obligations under any of such
agreements. To the knowledge of UIHH, all other parties thereto have
complied in all material respects with the provisions thereof and such
parties are not in breach or violation of, or in default (with or without
notice or lapse of time, or both) under such agreements. With respect to
such agreements, UIHH has not received any notice of termination,
cancellation or acceleration or any notice of breach, violation or default
thereof.
4.12 Intellectual Property. UIHH owns, or is licensed or otherwise
possesses legally enforceable rights to use, all patents, trademarks, trade
names, service marks, copyrights, and any applications therefor, maskworks,
net lists, schematics, technology, know-how, trade secrets, inventory,
ideas, algorithms, processes, computer software programs or applications
(in both source code and object code form), and tangible or intangible
proprietary information or material that are used in the business of UIHH
as currently conducted, except to the extent that the failure to have such
rights could not reasonably be expected to have a Material Adverse Effect
on UIHH.
4.13 Other Property. UIHH owns no property or assets except as
provided in Sections 4.12 and 4.3.
4.14 Environmental Matters.
(a) UIHH has, since its formation, complied with, and is now in
compliance with, all Environmental Laws (as defined below) applicable to
its current and prior business, properties and assets. No material permits,
approvals, registrations, licenses or other authorizations are required by
any Governmental Entity pursuant to any Environmental Law with respect to
the business, operations, properties and assets, of UIHH. There is no
pending or, to UIHH's knowledge, threatened civil or criminal litigation,
written notice of violation, formal administrative proceeding, or
investigation, inquiry, information request or notice of potential
liability by any Governmental Entity or third party, relating to any
Environmental Law to which UIHH is a party or, to UIHH's knowledge,
threatened to be made a party. For purposes of this Agreement,
"Environmental Law" means any domestic and foreign, federal, state or local
law, statute, ordinance, rule, regulation, order or judgment or the common
law relating to protection of public health, safety or the environment or
occupational health and safety, or that regulates, or creates liability
for, releases or threatened releases of any Hazardous Substance. As used in
this Section 4.14 and Section 5.14, the terms "release" and "environment"
have the meanings set forth in the federal Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA"), and "Hazardous
Substance" means any substance regulated by, or the presence of which
creates liability under, any Environmental Law (including without
limitation CERCLA) and includes without limitation industrial, toxic or
hazardous substances, pollutants and contaminants, oil or petroleum
products, solid or hazardous waste, chemicals and asbestos.
(b) UIHH has not caused any, and to the knowledge of UIHH there
have been no, releases or threatened releases of any Hazardous Substance in
violation of, or that could reasonably be expected to create any liability
or responsibility for UIHH under, any Environmental Law at any parcel of
real property or any facility currently or formerly owned, leased, operated
or controlled by UIHH. UIHH has not been required to give any notices to
any Governmental Entity, with respect to any release or threatened release
of Hazardous Substances caused by or known to UIHH. UIHH is not aware of
any releases of Hazardous Substance at parcels of real property or
facilities other than those presently or formerly owned, leased, operated
or controlled by UIHH that could reasonably be expected to have an impact
on the real property or facilities owned, leased, operated or controlled by
UIHH.
(c) The UIHH Disclosure Schedule lists all environmental reports,
investigations, audits or similar environmental documents in the possession
of UIHH with respect to the operations of, or real property owned, leased,
operated or controlled by, or liabilities or obligations of, UIHH (whether
conducted by or on behalf of UIHH or a third party and whether done at the
initiative of UIHH or directed by a Governmental Entity or other third
party). True and complete copies of each such document have been provided
to Parent.
(d) UIHH is not subject to, and is not reasonably expected to be
subject to, any liability under any Environmental Law, that could
reasonably be expected to have a Material Adverse Effect, including without
limitation liability arising out of the utilization by UIHH of any
transporter or facility used for treatment, recycling, storage or disposal.
4.15 Taxes.
(a) All material Returns (as defined below) required to be filed by
or on behalf of UIHH have been duly filed on a timely basis and such
Returns (including all attached statements and schedules) are true,
complete and correct in all material respects. All Taxes shown to be
payable on such Returns or on subsequent assessments with respect thereto
have been paid in full on a timely basis, and no other Taxes are payable by
UIHH with respect to items or periods covered by the Returns (whether or
not shown on or reportable on the Returns) for periods ending on or before
February 28, 1998.
(b) UIHH has withheld and paid over to the appropriate Governmental
Entity all material Taxes required to have been withheld and paid over, and
has complied with all information reporting and backup withholding
requirements, including maintenance of required records with respect
thereto, in connection with material amounts paid or owing to any employee,
creditor, independent contractor, or other third party.
(c) There are no Liens on any of the assets of UIHH with respect to
Taxes, other than Liens for Taxes not yet due and payable or for Taxes that
are being contested in good faith through appropriate proceedings and for
which appropriate reserves have been established.
(d) Since its formation, UIHH has been a member of an affiliated
group filing a consolidated federal income tax Returns of which United
International Holdings, Inc. is the common parent.
(e) Except as otherwise disclosed on the UIHH Disclosure Schedule:
(i) no deficiencies have been asserted in writing and no
written notice has been received by UIHH with respect to the
failure to file any Return or pay any Taxes; and
(ii) there is no liability for unpaid Taxes of UIHH for
periods ending on or before February 28, 1998.
(f) In this Agreement, any reference to
(i) the term "Taxes" shall mean all taxes, however,
denominated, including any interest, penalties or other additions
to tax that may become payable in respect thereof, imposed by any
federal, territorial, state, local or foreign Governmental Entity,
which taxes shall include, without limiting the generality of the
foregoing, all income or profits taxes, payroll and employee
withholding taxes, unemployment insurance, social security taxes,
sales and use taxes, ad valorem taxes, excise taxes, franchise
taxes, gross receipts taxes, business license taxes, occupation
taxes, real and personal property taxes, stamp taxes, environmental
taxes, transfer taxes, workers' compensation, and other obligations
of the same or of a similar nature to any of the foregoing, which
any party hereto is required to pay, withhold or collect; and
(ii) the term "Returns" shall mean all reports, estimates,
declarations of estimated tax, information statements and returns
relating to, or required to be filed in connection with,
any Taxes, including information returns or reports with respect to
backup withholding and other payments to third parties.
4.16 Employee Benefit Plans. UIHH has no liability with respect to
any employee benefit plan (within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
pursuant to ERISA, the Code or otherwise and no event has occurred and no
condition exists that could be reasonably expected to create any such
liability.
4.17 Indebtedness. UIHH is not directly or contingently obligated
under any credit agreements, indentures, purchase agreements, guarantees,
conditional sale contracts, capitalized leases, bonds, debentures, notes,
letters of credit, acceptance facilities, investments, agreements and
other arrangements (collectively "Debt").
4.18 Insurance. As an indirect subsidiary of United International
Holdings, Inc., UIHH is covered by policies of insurance and bonds held by
such company of the type and in amounts customarily carried by persons
conducting businesses or owning assets similar to those of UIHH but will
cease to be covered by these policies upon Closing. There is no material
claim pending under any of such policies or bonds as to which UIHH has
received a denial, or, to UIHH's knowledge, as to which coverage has been
questioned, denied or disputed by the underwriters of such policies or
bonds.
4.19 Compliance With Laws. UIHH has complied with, is not in
violation of, and has not received any notices of violation with respect
to, any federal, state, local or foreign statute, law or regulation with
respect to the conduct of its business, or the ownership or operation of
its business, except for such violations or failures to comply which would
not have a Material Adverse Effect on UIHH.
4.20 Minute Books.
(a) The records and books of account of UIHH are correct and
complete in all material respects, have been maintained in accordance with
good business practices and are reflected accurately in the financial
statements referred to in Section 3.5. UIHH has accounting controls
sufficient to insure that its transactions are (1) executed in accordance
with management's general or specific authorization and (2) recorded in
conformity with GAAP so as to maintain accountability for assets.
(b) The minute books of each of UIHH contain accurate
records of all meetings and accurately reflect all corporate action of the
shareholders and the board of directors (including committees) of UIHH.
(c) The stock books and ledgers of each of UIHH correctly
record all transfer and issuance of all capital stock of the UIHH and
contain all canceled and unused stock certificates of UIHH.
4.21 Brokers' and Finders' Fees. UIHH has not incurred, and will
not incur, directly or indirectly, any liability for brokerage or finders'
fees and agents' commissions or investment bankers' fees or any similar
charges in connection with this Agreement or any transaction contemplated
hereby.
4.22 Disclosure. Except to the extent revised or superseded by a
subsequent certificate, schedule or report furnished to Parent, no
information, certificate, schedule or report furnished by UIHH to Parent in
connection with the negotiation of this Agreement and any Exhibit to this
Agreement or the satisfaction of any condition under this Agreement or any
Exhibit to this Agreement contained as of the date thereof any untrue
statement of a material fact or omitted to state a material fact necessary
to make the statement contained therein, in the light of the circumstances
under which it was made, not misleading.
4.23 Aggregate Material Adverse Effect. There is no circumstance or
event that satisfies all of the following conditions: (1) such circumstance
or event, whether considered individually or in the aggregate with all
other such circumstances and events, constitutes a breach of one or more
representations, warranties, covenants or other agreements of UIHH in this
Agreement or any Exhibit to this Agreement or that would constitute such a
breach if such representation, warranty, covenant or agreement did not
include a reference therein to the possible occurrence of a Material
Adverse Effect, (2) such circumstance or event negatively affects, or could
negatively affect, the value of UIHH, taken as a whole, in the amount of
$50,000 or more, and (3) such circumstance or event, considered in the
aggregate with all other such circumstances and events, could constitute a
Material Adverse Effect.
4.24 Conduct of Business. Except as otherwise disclosed on the UIHH
Disclosure Schedule or as otherwise expressly contemplated hereby, since
the date of the Annual UIHH Balance Sheet, UIHH has carried on its business
in the usual, regular and ordinary course in substantially the same manner
as theretofore conducted and used reasonable efforts to preserve intact its
present business organizations, kept available the services of its present
officers and key employees and preserved its relationships with customers,
suppliers, distributors, licensors, licensees, and others having business
dealings with it. Except as otherwise disclosed on the UIHH Disclosure
Schedule or as otherwise expressly contemplated hereby, since the date of
the Annual UIHH Balance Sheet, UIHH has not
(a) acquired or agreed to acquire by merging or consolidating with,
or by purchasing a substantial portion of the assets or, or by any other
manner, any business or any corporation, partnership, association or other
business organization or division thereof, or otherwise acquired or agreed
to acquire any assets, other than in the ordinary course of business
consistent with past practice;
(b) made or changed any material election in respect of Taxes,
adopted or changed any accounting method in respect of Taxes, filed any
material Return or any amendment to a material Return, entered into any
closing agreement, settled any claim or assessment in respect of Taxes, or
consented to any extension or waiver of the limitation period applicable to
any claim or assessment in respect of Taxes;
(c) revalued 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;
(d) delayed in the payment of any trade or other payables other
than in the ordinary course of business consistent with past practice;
(e) sold, leased or otherwise transferred or disposed of any
property or asset other than for fair consideration or in the ordinary
course of business consistent with past practice;
(f) changed its accounting methods, practices or policies
(including any change in depreciation or amortization policies or rates);
(g) declared, set aside, or paid any dividend or other distribution
in respect of its capital stock, or made any direct or indirect redemption,
retirement, purchase or other acquisition by UIHH of any of its capital
stock or other securities or options, warrants or other rights to acquire
capital stock;
(h) canceled any debt or waived or released any right or claim by
UIHH, other than in the ordinary course of business consistent with past
practice;
(i) made any payment, or discharged or satisfied any claim,
liability or obligation other than as reflected or reserved against in the
Annual UIHH Balance Sheet or the Interim UIHH Balance Sheet or in the
ordinary course of business consistent with past practice; or
(j) made any loan or advance (other than advances to employees in
the ordinary course of business for travel and entertainment in accordance
with past practice) to any person.
4.25 Reliance. The foregoing representations and warranties are
being made by UIHH with the knowledge and expectation that Parent is
placing reliance thereon.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Except as disclosed in a document of even date herewith and
delivered by Parent to UIHH prior to the execution and delivery of this
Agreement and referring to the section number and subsection of the
representations and warranties in this Agreement (the "Parent Disclosure
Schedule"), Parent and Merger Sub represent and warrant to UIHH as follows:
5.1 Organization, Standing and Power. Each of Parent and its
subsidiaries, including Merger Sub, is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, has the full corporate power to own its properties and to
carry on its business as now being conducted and is duly qualified to do
business and is in good standing in each jurisdiction in which the
ownership of its properties or the conduct of its business requires such
qualification, except for jurisdictions in which the failure to be so
qualified and in good standing would not have a Material Adverse Effect on
Parent. Merger Sub is a newly formed corporation that has not engaged in
any business (other than certain organizational matters) since the date of
its incorporation and was formed solely for the purpose of engaging in the
transactions contemplated by this Agreement. As of the date hereof and the
Effective Time, except for obligations or liabilities incurred in
connection with its incorporation or organization and the transactions
contemplated by this Agreement and except for this Agreement and any other
agreements or arrangements contemplated by this Agreement, Merger Sub has
not and will not have incurred, directly or indirectly, through any
subsidiary or affiliate, any material obligations or liabilities or engaged
in any business activities of any type or kind whatsoever or entered into
any agreements or arrangements with any Person.
5.2 Capitalization; Stockholders.
(a) The authorized capital stock of Parent consists of 100,000,000
shares of common stock, par value $0.001 per share ("Parent Common Stock"),
10,000,000 shares of preferred stock, par value $0.001 per share, of which,
as of the date hereof, there were issued and outstanding 30,033,492 shares
of Parent Common Stock, 39.088 shares of Series E Convertible Preferred
Stock, and no shares of Parent Preferred Stock. The Parent Disclosure
Schedule sets forth a list of all stockholders of Parent who own
beneficially more than 5 percent of the outstanding shares of common stock
of Parent, and all Rights Agreements to which Parent is a party or by which
Parent may be bound obligating Parent to issue, deliver, sell, purchase,
redeem, or cause to be issued, delivered, sold or purchased additional
shares of the capital stock of Parent or obligating Parent to enter into
such Rights Agreements. All outstanding shares of Parent Common Stock and
Series E Preferred Stock are duly authorized, validly issued, fully paid
and non-assessable, are free and clear of any Lien, and are not subject to
preemptive rights or rights of first refusal created by statute, the
Articles of Incorporation or Bylaws of Parent or any agreement to which
Parent is a party or by which it is bound. The shares of Parent Preferred
Stock to be issued to the UIHH Shareholder pursuant to the Merger will,
when issued, be duly authorized, validly issued, fully paid, and
non-assessable. Each such share of Parent Preferred Stock will have been
issued pursuant to, and will carry the rights set forth in, the Certificate
of Designation. Except as set forth on the Parent Disclosure Schedule,
there are no contracts, commitments or agreements relating to voting,
purchase or sale of Parent's capital stock. Parent does not have any
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 shares of Parent Common Stock and
holders of Series E Preferred Stock on any matter.
(b) The authorized capital stock of Merger Sub consists of 1,000
shares of Merger Sub Common Stock, all of which are issued and outstanding
and are held by Parent. Merger Sub has been formed solely for the purpose
of engaging in the transactions contemplated hereby, and immediately prior
to the Effective Time will have engaged in no other business activities,
will have no subsidiaries and will have conducted its operations only as
contemplated hereby.
5.3 Subsidiaries.
(a) Parent owns equity interests in each of Hebei United
Telecommunications Equipment Company Limited ("Hebei Equipment"), Hebei
United Telecommunications Engineering Company Limited ("Hebei
Engineering"), ITV Communications, Inc. ("ITV"), AmTec Telecom Holdings
Ltd. ("Telecom") and AmTec Hebei Telecom Holdings Ltd. ("Hebei Telecom")
and has agreed to acquire a 75% ownership interest in Shanghai V-Tech
Telecommunications and Engineering Limited Liability Company. The
authorized, issued and outstanding equity interests, together with Parent's
ownership interest therein, of Hebei Equipment, Hebei Engineering, ITV,
Telecom and Hebei Telecom (collectively, the "AMTEC Subsidiaries") are as
set forth on Exhibit PDS-3 to the Parent Disclosure Schedule.
(b) Except for Parent's interests in the AMTEC Subsidiaries, Parent
does not, directly or indirectly, own any equity or similar interest in, or
any interest convertible or exchangeable or exercisable for any equity or
similar interest in, any corporation, partnership, joint venture or other
business association or entity.
5.4 Due Authorization. Parent and Merger Sub have the full
corporate power and authority to enter into 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 authorized by all necessary corporate action on the
part of Parent and Merger Sub. This Agreement has been duly executed and
delivered by Parent and Merger Sub and constitutes the valid and binding
obligations of Parent and Merger Sub enforceable against each of Parent and
Merger Sub in accordance with its terms. The execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated
hereby will not: (a) conflict with or violate any provision of the Articles
of Incorporation or Bylaws of Parent, the Articles of Incorporation or
Bylaws of Merger Sub, or equivalent charter documents of any of the AMTEC
Subsidiaries, in each case as amended and in effect on the date hereof, (b)
violate or conflict with any permit, order, license, decree, judgment,
statute, law, ordinance, rule or regulation applicable to Parent or the
AMTEC Subsidiaries or the properties or assets of Parent or the AMTEC
Subsidiaries, or (c) result in any breach or violation of, or constitute a
default (with or without notice or lapse of time, or both) under, or give
rise to any right of termination, cancellation or acceleration of, or
result in the creation of any Lien on any of the properties or assets of
Parent or the AMTEC Subsidiaries pursuant to any mortgage, indenture,
lease, contract or other agreement or instrument, bond, note, concession or
franchise applicable to Parent or the AMTEC Subsidiaries or their
properties or assets, except, in the case of this clause (c) only, where
such conflict, violation, default, termination, cancellation or
acceleration would not have a Material Adverse Effect on Parent or the
AMTEC Subsidiaries. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is
required by or with respect to Parent, Merger Sub or the AMTEC Subsidiaries
in connection with the execution and delivery of this Agreement by Parent
and Merger Sub or the consummation by Parent and Merger Sub of the
transactions contemplated hereby, except for (i) the filing, pursuant to
the rules of the American Stock Exchange ("AMEX"), of the proxy statement
to be sent to the stockholders of Parent in connection with the meeting of
Parent's stockholders to consider the transactions contemplated hereby
(such proxy statement as amended or supplemented is referred to herein as
the "Proxy Statement"), (ii) the filing of the Articles of Merger and Plan
of Merger as provided in Section 1.3, (iii) the filing of a Form 8-K with
the Securities and Exchange Commission (the "SEC") and AMEX within 15 days
after the Closing Date, (iv) any filings as may be required under
applicable state securities laws and the securities laws of any foreign
country, and (v) such other consents, authorizations, filings, approvals
and registrations which, if not obtained or made, would not have a Material
Adverse Effect on Parent or any of the AMTEC Subsidiaries or would not
prevent or materially alter or delay any of the transactions contemplated
by this Agreement.
5.5 SEC Documents; Financial Statements.
Parent has filed all forms, reports and documents required
to be filed with the SEC and has furnished UIHH with true and complete
copies of its (a) Annual Report on Form 10-K for the fiscal years ended
March 31, 1998 and March 31, 1997, as filed with the SEC, (b) Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998, as filed with the
SEC, (c) proxy statements related to all meetings of its stockholders
(whether annual or special) since March 31, 1996, and (d) all other reports
and registration statements filed by Parent with the SEC since March 31,
1996 (collectively, the "Parent SEC Documents"). As of their respective
filing dates, the Parent SEC Documents were, or will be, prepared in all
material respects in accordance with the requirements of the Securities
Exchange Act of 1934, as amended (together with any successor federal
statute and the rule and regulations promulgated thereunder, the "Exchange
Act") or the Securities Act of 1933, as amended (together with any
successor federal statute and the rule and regulations promulgated
thereunder, the "Securities Act"), as applicable, and the rules and
regulations of the SEC thereunder applicable to such Parent SEC Documents
and did, or will, not at the time they were or are filed (or if amended or
superseded by a filing prior to the date of this Agreement, then
on the date of such filing) contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. None of the AMTEC Subsidiaries
is required to file any forms, reports or other documents with the SEC. The
annual and interim financial statements included in the Parent SEC
Documents were and will be prepared in accordance with GAAP applied on a
basis consistent throughout the periods indicated and consistent with each
other (except as indicated in the notes thereto) and fairly present or will
fairly present the consolidated financial condition and operating results
of Parent and its consolidated subsidiaries at the dates and during the
periods indicated therein, subject, in the case of interim financial
statements, to normal, recurring year-end audit adjustments.
5.6 Absence of Certain Changes. Except as disclosed in the Parent
SEC Documents filed with the SEC prior to the date hereof, since March 30,
1998 (the "Parent Balance Sheet Date"), each of Parent and the AMTEC
Subsidiaries has conducted its business in the ordinary course consistent
with past practice and there has not occurred: (a) any change, event or
condition (whether or not covered by insurance) that has resulted in, or
could reasonably be expected to result in, a Material Adverse Effect on
Parent, (b) any declaration, setting aside, or payment of a dividend or
other distribution with respect to the shares of Parent, or any direct or
indirect redemption, retirement, purchase or other acquisition by Parent of
any of its capital stock, or (c) any change, or any development or
combination of developments which would be required to be disclosed as a
material change in response to Item 11(a) of Form S-3. Except as disclosed
in such Parent SEC Documents, Parent is not aware of any facts which are
reasonably likely to have a Material Adverse Effect on Parent.
5.7 Liabilities. Except as set forth in the Parent Disclosure
Schedule, Parent does not have any liability or obligation of any nature
(whether accrued, absolute, contingent, unliquidated, civil, criminal or
otherwise, due or to become due) whether or not any such liability or
obligation would have been required to be disclosed on a balance sheet
prepared in accordance with GAAP.
5.8 Litigation. Except as set forth in the Parent Disclosure
Schedule, there is no private or governmental action, suit, proceeding,
claim, arbitration or investigation pending before any agency, court or
tribunal, foreign or domestic, or, to the knowledge of Parent or the AMTEC
Subsidiaries, threatened against Parent or any of the AMTEC Subsidiaries or
any of their respective assets and properties or any of their officers or
directors (in their capacities as such) that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect
on Parent. There is no judgment, decree or order against Parent or any of
the AMTEC Subsidiaries, or, to the knowledge of Parent or the AMTEC
Subsidiaries, any of their respective directors or officers (in their
capacities as such), that could prevent consummation of the transactions
contemplated by this Agreement, or that could reasonably be expected to
have a Material Adverse Effect on Parent.
5.9 Restrictions on Business Activities. There is no material
agreement, judgment, injunction, order or decree binding upon Parent or the
AMTEC Subsidiaries which has or could reasonably be expected to have the
effect of prohibiting or impairing any current business practice of Parent
or the AMTEC Subsidiaries, any acquisition of property by Parent or the
AMTEC Subsidiaries or the conduct of business by Parent or the AMTEC
Subsidiaries as currently conducted by Parent.
5.10 Governmental Authorization. Except as set forth in the Parent
Disclosure Schedule, Parent, Merger Sub and each of the AMTEC Subsidiaries
has obtained each federal, state, county, local or foreign governmental
consent, license, permit, grant, or other authorization that is necessary
for Parent, Merger Sub or such AMTEC Subsidiary to own or lease, operate
and use its respective assets and properties and to carry on its business
as currently conducted (collectively "Parent Authorizations"). Parent,
Merger Sub and such AMTEC Subsidiary has performed and fulfilled its
obligations under the Parent Authorizations, and all the Parent
Authorizations are in full force and effect.
5.11 Contracts and Commitments.
(a) Except as set forth on the Parent Disclosure Schedule, neither
Parent nor any of the AMTEC Subsidiaries is a party to any oral or written
(a)(i) obligation for borrowed money, (ii) obligation evidenced by bonds,
debentures, notes or other similar instruments, (iii) obligation to pay the
deferred purchase price of property or services (other than trade accounts
arising in the ordinary course of business), (iv) obligation under capital
leases, (v) debt of others secured by a Lien on its property, (vi) guaranty
of liabilities or obligations of others, (vii) agreement under which Parent
or any of the AMTEC Subsidiaries is obligated to make or expects to receive
payments, individually or in the aggregate in excess of $100,000, (viii)
agreement under which Parent or any of the AMTEC Subsidiaries is obligated
to provide services, (ix) agreement under which Parent has entered into a
joint venture with another party or (x) agreement granting any Person a
Lien on any of the properties or assets of Parent or such AMTEC Subsidiary;
or (b)(i) employment agreement or collective bargaining agreement or (ii)
agreements that limit the right of Parent or any such subsidiary, or any of
their respective employees to compete in any line of business; or (c)
agreement that, after giving effect to the transactions contemplated
hereby, purports to restrict or bind Parent or any of its subsidiaries,
other than Surviving Corporation, in any respect. True and complete copies
of all agreements described in the Parent Disclosure Schedule have been
delivered to UIHH. Parent has not breached any of its obligations under any
of such agreements. To the knowledge of Parent, all other parties thereto
have complied in all material respects with the provisions thereof and such
parties are not in breach or violation of, or in default (with or without
notice or lapse of time, or both) under such agreements. With respect to
such agreements, neither Parent nor any of its AMTEC Subsidiaries received
any notice of termination, cancellation or acceleration or any notice of
breach, violation or default thereof.
(b) Hebei Engineering and China United Telecommunications Co.
("UNICOM") are parties to a Project Cooperation Contract, dated February 9,
1996, as revised April 8, 1997 (the "Cooperation Contract"). Hebei
Engineering has complied in all material respects with the Cooperation
Contract and is not in breach or violation of, or in default under the
Cooperation Contract. The Cooperation Contract constitutes a legal, valid
and binding obligation of UNICOM and, to the knowledge of Parent, UNICOM
has complied in all material respects with the Cooperation Contract and is
not in breach or violation of, or in default under, the Cooperation
Contract.
5.12 Title to Property. Parent and each of the AMTEC Subsidiaries
has good and marketable title to all of its respective properties and
assets, or in the case of leased properties and assets, valid leasehold
interests in such properties, free and clear of any Lien, except for Liens
for Taxes not yet due and payable and except for such Liens or
imperfections of title as do not materially detract from the value of or
interfere with the current use of the properties or assets affected
thereby. The plants, property and equipment of Parent and each of the AMTEC
Subsidiaries that are used in the operations of its business are in good
operating condition and repair, ordinary wear and tear excepted. The Parent
Disclosure Schedule identifies each parcel of real property leased by
Parent or any of the AMTEC Subsidiaries. Neither Parent nor any of the
AMTEC Subsidiaries has any real property.
5.13 Intellectual Property. Parent and each of the AMTEC
Subsidiaries owns, or is licensed or otherwise possesses legally
enforceable rights to use, all patents, trademarks, trade names, service
marks, copyrights, and any applications therefor, maskworks, net lists,
schematics, technology, know-how, trade secrets, inventory, ideas,
algorithms, processes, computer software programs or applications (in both
source code and object code form), and tangible or intangible proprietary
information or material that are used in the business of Parent or such
subsidiary as currently conducted, except to the extent that the failure to
have such rights could not reasonably be expected to have a Material
Adverse Effect on Parent.
5.14 Environmental Matters.
(a) Parent and each of the AMTEC Subsidiaries has complied with,
and is now in compliance with, all domestic and foreign Environmental Laws
applicable to its current and prior business, properties and assets. No
material permits, approvals, registrations, licenses or other
authorizations are required by any Governmental Entity pursuant to any
Environmental Law with respect to the business, operations, properties and
assets, of Parent or the AMTEC Subsidiaries. There is no pending or, to the
knowledge of Parent or the AMTEC Subsidiaries, threatened civil or criminal
litigation, written notice of violation, formal administrative proceeding,
or investigation, inquiry, information request or notice of potential
liability by any Governmental Entity or third party, relating to any
Environmental Law to which Parent or any of the AMTEC Subsidiaries is a
party or, to the knowledge of Parent or the AMTEC Subsidiaries, threatened
to be made a party.
(b) Neither Parent nor the AMTEC Subsidiaries have caused any, and
to the knowledge of Parent and the AMTEC Subsidiaries, there have been no,
releases or threatened releases of any Hazardous Substance in violation of,
or that could reasonably be expected to create any liability or
responsibility for Parent or the AMTEC Subsidiaries under, any
Environmental Law at any parcel of real property or any facility currently
or formerly owned, leased, operated or controlled by Parent or the AMTEC
Subsidiaries. Neither Parent nor any of the AMTEC Subsidiaries has been
required to give any notices to any Governmental Entity, with respect to
any release or threatened release of Hazardous Substances caused by or
known to Parent or any of the AMTEC Subsidiaries. Neither Parent or the
AMTEC Subsidiaries is aware of any releases of Hazardous Substance at
parcels of real property or facilities other than those presently or
formerly owned, leased, operated or controlled by Parent or any of the
AMTEC Subsidiaries that could reasonably be expected to have an impact on
the real property or facilities owned, leased, operated or controlled by
UIHH or the AMTEC Subsidiaries.
(c) The Parent Disclosure Schedule lists all environmental reports,
investigations, audits or similar environmental documents in the possession
of Parent or the AMTEC Subsidiaries with respect to the operations of, or
real property owned, leased, operated or controlled by, or liabilities or
obligations of, Parent or any of the AMTEC Subsidiaries (whether conducted
by or on behalf of Parent or any of the AMTEC Subsidiaries or a third party
and whether done at the initiative of Parent or directed by a Governmental
Entity or other third party). True and complete copies of each such
document have been provided to UIHH.
(d) Neither Parent nor any of the AMTEC Subsidiaries is subject to,
or is reasonably expected to be subject to, any liability under any
Environmental Law, that could reasonably be expected to have a Material
Adverse Effect, including without limitation liability arising out of the
utilization by Parent or any of the AMTEC Subsidiaries of any transporter
or facility used for treatment, recycling, storage or disposal.
5.15 Taxes.
(a) All material Returns required to be filed by or on behalf of
Parent and the AMTEC Subsidiaries have been duly filed on a timely basis
and such Returns (including all attached statements and schedules) are
true, complete and correct in all material respects. All Taxes shown to be
payable on such Returns or on subsequent assessments with respect thereto
have been paid in full on a timely basis, and no other Taxes are payable by
Parent or any of the AMTEC Subsidiaries with respect to items or periods
covered by the Returns (whether or not shown on or reportable on the
Returns) for periods ending on or before March 31, 1997.
(b) Parent and each of the AMTEC Subsidiaries has withheld and paid
over to the appropriate Governmental Authority all material Taxes required
to have been withheld and paid over, and has complied with all information
reporting and backup withholding requirements, including maintenance of
required records with respect thereto, in connection with material amounts
paid or owing to any employee, creditor, independent contractor, or other
third party.
(c) There are no Liens on any of the assets of Parent or any of the
AMTEC Subsidiaries with respect to Taxes, other than Liens for Taxes not
yet due and payable or for Taxes that are being contested in good faith
through appropriate proceedings and for which appropriate reserves have
been established.
(d) Parent has made available to UIHH true and complete copies of:
(i) all federal and state income and franchise tax Returns of Parent and
each of the AMTEC Subsidiaries for all periods since the date of formation
of Parent and each of the AMTEC Subsidiaries, and (ii) all tax audit
reports, work papers, statements of deficiencies, closing or other
agreements received by Parent or any of the AMTEC Subsidiaries relating to
its Taxes.
(e) Except as otherwise disclosed on the Parent Disclosure
Schedule:
(i) no deficiencies have been asserted in writing and no
written notice has been received by Parent or any of the AMTEC
Subsidiaries with respect to the failure to file any Return or pay
any Taxes; and
(ii) the amount of liability for unpaid Taxes of Parent and
the AMTEC Subsidiaries for all periods ending on or before March
31, 1997, will not, in the aggregate, exceed the amount of the
current liability accruals for Taxes (not including any reserve for
deferred taxes established to reflect timing differences between
book and tax income), as such accruals are reflected on the balance
sheet of Parent or such AMTEC Subsidiary as of such date.
5.16 Employee Benefit Plans.
(a) The Parent Disclosure Schedule lists, with respect to Parent,
and any trade or business (whether or not incorporated) that is treated as
a single employer with Parent (an "ERISA Affiliate") within the meaning of
Section 414(b), (c), (m) or (o) of the Code: (i) all material employee
benefit plans (as defined in Section 3(3) of ERISA), (ii) each loan to a
non-officer employee in excess of $50,000, loans to officers and directors
and any stock option, stock purchase, phantom stock, stock appreciation
right, supplemental retirement, severance, sabbatical, medical, dental,
vision care, disability, employee relocation, cafeteria benefit (Section
125 of the Code) or dependent care (Section 129 of the Code), life
insurance or accident insurance plans, programs or arrangements, (iii) all
bonus, pension, profit sharing, savings, deferred compensation or incentive
plans, programs or arrangements, (iv) other fringe or employee benefit
plans, programs or arrangements that apply to senior management and that do
not generally apply to all employees, and (v) any current or former
employment or executive compensation or severance agreements, written or
otherwise, as to which unsatisfied obligations remain for the benefit of,
or relating to, any present or former employee, consultant or director
(collectively, the "Parent Employee Plans").
(b) Parent has furnished to UIHH a copy of each of the Parent
Employee Plans and related plan documents (including trust documents,
insurance policies or contracts, employee booklets, summary plan
descriptions and other authorizing documents, and, to the extent still in
its possession, any material employee communications relating thereto) and
has, with respect to each Parent Employee Plan which is subject to ERISA
reporting requirements, provided copies of the Form 5500, including all
schedules attached thereto and actuarial reports, if any, filed for the
last three Plan years. Parent has furnished UIHH with the most recent
Internal Revenue Service determination letter issued with respect to each
Parent Employee Plan intended to be qualified under Section 401(a) of the
Code (and each such Plan has received a favorable determination letter and
nothing has occurred since the issuance of each such letter which could
reasonably be expected to cause the loss of the tax-qualified status of any
Parent Employee Plan subject to Section 401(a) of the Code), and all
communications with respect to any such Parent Employee Plan described in
Section 5.16(a) with the Internal Revenue Service, the Department of Labor
or the Pension Benefit Guaranty Corporation. Parent has never established
or maintained in trust any Parent Employee Plan under Section 501(c)(9) of
the Code.
(c) (i) None of the Parent Employee Plans promises or provides
retiree medical or other retiree welfare benefits to any person; (ii) there
have been no violations of applicable provisions of the Code or ERISA with
respect to any Parent Employee Plan that could reasonably be expected to
have, in the aggregate, a Material Adverse Effect on Parent; (iii) each
Parent Employee Plan is in compliance with the requirements prescribed by
any and all statutes, rules and regulations (including ERISA and the Code),
except as would not have a Material Adverse Effect on Parent, and Parent
has no knowledge of any default or violation by any other party to any of
the Parent Employee Plans, which default or violation could reasonably be
expected to have a Material Adverse Effect on Parent; (iv) all material
contributions required to be made by Parent to any Parent Employee Plan
have been made on or before their due dates; and (v) Parent has never
maintained or otherwise incurred any obligation under any plan subject to
Title IV of ERISA. No suit, administrative proceeding, action or other
litigation has been brought, or to the knowledge of Parent, is threatened,
against or with respect to any such Parent Employee Plan, including any
audit or inquiry by the Internal Revenue Service or United States
Department of Labor. Parent does not have any obligations under Section
4980A of the Code with respect to any former employees or qualified
beneficiaries thereunder, except as set forth in the Parent Disclosure
Schedule.
(d) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not: (i) entitle
any current or former employee or other service provider or any director of
Parent or any of the AMTEC Subsidiaries to severance benefits or any other
payment (including unemployment compensation, golden parachute, bonus or
otherwise), (ii) increase any benefits otherwise payable, or (iii)
accelerate the time of payment or vesting, or increase the amount of
compensation due any such employee, service provider or director.
(e) There has been no amendment to, written interpretation or
announcement (whether or not written) by Parent, or change in participation
or coverage under, any Parent Employee Plan which would increase the
expense of maintaining such Plan above the level of expense incurred with
respect to that Plan for the most recent fiscal year included in the annual
financial statements which are included in the Parent SEC Documents.
5.17 Indebtedness.
(a) The Parent Disclosure Schedule lists the following:
(i) all Debt presently in effect providing for or relating
to any amount greater than $10,000 in respect of which Parent or
the AMTEC Subsidiaries is in any manner directly or contingently
obligated;
(ii) the maximum principal or face amounts of such Debt
outstanding or which may be outstanding under each of those
agreements and other arrangements;
(iii) the maturity date or dates of such Debt; and
(iv) whether such Debt is recourse or non-recourse.
(b) Except as set forth in the Parent Disclosure Schedule, the
execution and delivery of this Agreement will not (and will not give any
person a right to) terminate or modify any rights of, or accelerate or
increase any obligation of the Parent or any of the AMTEC Subsidiaries with
respect to any such Debt.
(c) Except as set forth on the Parent Disclosure Schedule, at the
Effective Time, Parent will not be indebted to any shareholder, director,
officer, employee or agent of Parent or any of the AMTEC Subsidiaries
(except for amounts due as normal salaries and bonuses and in reimbursement
of ordinary expenses), and no such person is indebted to Parent or any of
the AMTEC Subsidiaries, and there are no other transactions of the type
required to be disclosed pursuant to Items 402 and 404 of Regulation S-K
under the Securities Act, and the Exchange Act.
5.18 Insurance. Parent and each of the AMTEC Subsidiaries has
policies of insurance and bonds of the type and in amounts customarily
carried by persons conducting businesses or owning assets similar to those
of Parent and each of the AMTEC Subsidiaries. The Parent Disclosure
Schedule sets forth a true and complete listing of all such policies,
copies of each of which have been provided to UIHH. There is no material
claim pending under any of such policies or bonds as to which Parent or any
of the AMTEC Subsidiaries has received a denial, or, to the knowledge of
Parent or any of the AMTEC Subsidiaries, as to which coverage has been
questioned, denied or disputed by the underwriters of such policies or
bonds. All premiums due and payable under all such policies and bonds have
been paid and Parent and each AMTEC Subsidiary is otherwise in compliance
in all material respects with the terms of such policies and bonds. Parent
has no knowledge of any threatened termination of, or material premium
increase with respect to, any of such policies. To the knowledge of Parent,
each policy or bond is legal, valid, binding, enforceable and in full force
and effect and will continue to be legal, valid, binding, enforceable and
in full force and effect following the consummation of the transactions
contemplated hereby.
5.19 Compliance With Laws. Parent and each of the AMTEC
Subsidiaries has complied with, is not in violation of, and have not
received any notices of violation with respect to, any federal, state,
local or foreign statute, law or regulation with respect to the conduct of
its business, or the ownership or operation of its business, except for
such violations or failures to comply which would not have a Material
Adverse Effect on Parent. Parent and each of the AMTEC Subsidiaries has
since its formation complied with, and is in compliance with, all U.S.
export control laws, including but not limited to the Export Administration
Act, as amended, the International Emergency Economic Powers Act, the Arms
Export Control Act, the Trading With the Enemy Act, and the Foreign Corrupt
Practices Act.
5.20 Brokers' and Finders' Fees. Neither Parent nor any of the
AMTEC Subsidiaries has incurred, or will incur, directly or indirectly, any
liability for brokerage or finders' fees or agents' commissions or
investment bankers' fees or any similar charges in connection with this
Agreement or any transaction contemplated hereby.
5.21 Misstatements. Except to the extent revised or superseded by a
subsequent certificate, schedule or report furnished to UIHH, no
information, certificate, schedule or report furnished by Parent to UIHH
with respect to Parent, Merger Sub or the AMTEC Subsidiaries in connection
with the negotiation of this Agreement and any Exhibit to this Agreement or
the satisfaction of any condition under this Agreement or any Exhibit to
this Agreement contained as of the date thereof any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statement contained therein, in the light of the circumstances under which
it was made, not misleading.
5.22 Business Combination Transactions. Except as set forth in the
Parent Disclosure Schedule, none of Parent, Merger Sub and the AMTEC
Subsidiaries has entered into any agreement with any person which has not
been terminated as of the date of this Agreement, and under which there
remains any liability or obligation of any of Parent, Merger Sub and the
AMTEC Subsidiaries with respect to a merger or business combined
transaction.
5.23 Conduct of Business. Except as otherwise disclosed on the
Parent Disclosure Schedule or as otherwise expressly contemplated hereby,
since March 31, 1998, Parent and the AMTEC Subsidiaries have carried on
their respective businesses in the usual, regular and ordinary course in
substantially the same manner as theretofore conducted and used reasonable
efforts to preserve intact their present business organizations, kept
available the services of their present officers and key employees and
preserved their relationships with customers, suppliers, distributors,
licensors, licensees, and others having business dealings with it. Except
as otherwise disclosed on the Parent Disclosure Schedule or as otherwise
expressly contemplated hereby, since March 31, 1998, neither Parent nor any
AMTEC Subsidiary has
(a) acquired or agreed to acquire by merging or consolidating with,
or by purchasing a substantial portion of the assets or, or by any other
manner, any business or any corporation, partnership, association or other
business organization or division thereof, or otherwise acquired or agreed
to acquire any assets, other than in the ordinary course of business
consistent with past practice;
(b) made or changed any material election in respect of Taxes,
adopted or changed any accounting method in respect of Taxes, filed any
material Return or any amendment to a material Return, entered into any
closing agreement, settled any claim or assessment in respect of Taxes, or
consented to any extension or waiver of the limitation period applicable to
any claim or assessment in respect of Taxes;
(c) revalued 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;
(d) delayed in the payment of any trade or other payables other
than in the ordinary course of business consistent with past practice;
(e) sold, leased or otherwise transferred or disposed of any
property or asset other than for fair consideration or in the ordinary
course of business consistent with past practice;
(f) changed its accounting methods, practices or policies
(including any change in depreciation or amortization policies or rates);
(g) declared, set aside, or paid any dividend or other distribution
in respect of its capital stock, or made any direct or indirect redemption,
retirement, purchase or other acquisition by Parent or any AMTEC Subsidiary
of any of its capital stock or other securities or options, warrants or
other rights to acquire capital stock;
(h) canceled any debt or waived or released any right or claim by
Parent or any AMTEC Subsidiary, other than in the ordinary course of
business consistent with past practice;
(i) made any payment, or discharged or satisfied any claim,
liability or obligation other than as reflected or reserved against in the
financial statements included in the Parent SEC Documents or in the
ordinary course of business consistent with past practice;
(j) made any loan or advance (other than advances to employees in
the ordinary course of business for travel and entertainment in accordance
with past practice) to any person.
5.24 Reliance. The foregoing representations and warranties are
being made by Parent and Merger Sub with the knowledge and expectation that
UIHH is placing reliance thereon.
ARTICLE VI
COVENANTS
6.1 Access to Information. Each party shall afford the other and
its accountants, counsel and other representatives (collectively,
"Representatives") full access during normal business hours (and at such
other times as the parties hereto agree) during the period prior to the
Effective Time to: (a) all of such party's properties, books, contracts,
commitments and records, and (b) all other information concerning the
business, properties and personnel of such party as the other party may
reasonably request. Each party agrees to provide to the other and its
accountants, counsel and other representatives copies of internal financial
statements promptly upon request. Subject to compliance with applicable
law, from the date hereof until the Effective Time, each of Parent and UIHH
shall confer on a regular and frequent basis with one or more
representatives of the other party to report operational matters of
materiality and the general status of ongoing operations. No information or
knowledge obtained in any investigation pursuant to this Section 6.1 shall
affect or be deemed to modify any representation or warranty contained
herein or the conditions to the obligations of the parties hereto to
consummate the Merger.
6.2 Confidentiality. Each party hereto and its Representatives will
treat as confidential and hold in confidence all information concerning the
businesses and affairs of the other that is not already generally available
to the public and is not otherwise known to the party to whom it was
disclosed on a non-confidential basis ("Confidential Information") and
refrain from using any Confidential Information, except in furtherance of
this Agreement or as required by law or regulation. In the event of the
termination of this Agreement, each party will treat and hold as such all
Confidential Information received from the other party hereto, refrain from
using any of such Confidential Information and return or destroy, at the
request of the other party, all tangible embodiments (and all copies) of
such Confidential Information. In the event that a party is requested or
legally required (by oral question or request for information or documents
in any legal proceeding, interrogatory, subpoena, civil investigative
demand, or similar process) to disclose any Confidential Information, such
party will notify the other promptly of the request or requirement so that
such other party may seek an appropriate protective order or waive
compliance with the provisions of this Section 6.2. If, in the absence of a
protective order or the receipt of a waiver hereunder, a party is, on the
advice of counsel, compelled to disclose any Confidential Information to
any tribunal or else stand liable for contempt, such party may disclose the
Confidential Information to the tribunal; provided, however, that such
party shall use reasonable effort to obtain, at the request of the other
party, an order or other assurance that confidential treatment will be
accorded to such portion of the Confidential Information required to be
disclosed as such other party shall designate.
6.3 Publicity. None of the Parties shall not issue, or cause or
permit to be issued, any press release or otherwise make any public
statement regarding the terms of this Agreement or the transactions
contemplated hereby without Parent's and UIHH's prior written consent,
except as required by applicable Laws.
6.4 Filings; Cooperation. Parent and UIHH shall each take, and
cause their affiliates to take, all actions necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including, but not limited to,
(a) making filings required under the Securities Act and the Exchange Act,
and the rules and regulations thereunder, and under applicable Blue Sky or
similar securities laws, (b) obtaining all waivers, consents and approvals
necessary to effect such registrations and filings and all consents of
third parties necessary for consummation of the merger, and (c) lifting any
injunction or other legal bar to the Merger (and, in such case, to proceed
with the Merger as expeditiously as possible).
6.5 Proxy Statement and Shareholder Approval
(a) Preliminary Proxy Statement. Parent shall, as soon as
reasonably practicable, prepare a preliminary form (the "Preliminary Proxy
Statement") of the Proxy Statement. The Parent shall (i) file the
Preliminary Proxy Statement with the SEC promptly after it has been
prepared in a form reasonably satisfactory to UIHH, and (ii) use its
reasonable efforts to respond to the comments of the SEC thereon in a
manner reasonably satisfactory to UIHH. Parent shall promptly prepare any
amendments to the Preliminary Proxy Statement required in response to the
SEC's comments or which Parent, with the advice of counsel, deems necessary
or advisable, and Parent shall use its reasonable efforts to cause the
Proxy Statement to be filed with the SEC as soon as reasonably practicable
after the Preliminary Proxy Statement, as so amended, is cleared by the
SEC.
(b) UIHH Cooperation. To the extent information regarding
UIHH is required to be included in the Proxy Statement, UIHH hereby agrees
to promptly supply such information to Parent upon request. UIHH further
agrees that the information so supplied shall not contain any statement
which, at the time of delivery, is false or misleading with respect to any
material fact, or omit to state any material fact necessary in order to
make the statements made therein, in light of the circumstances under which
they are made, not false or misleading. UIHH further agrees promptly to
supply such additional information to Parent as may be necessary to correct
any statement or omission regarding UIHH included in the Proxy Statement
that becomes false or misleading with respect to any material fact prior to
the Closing Date.
(c) Parent Stockholders Meeting. Parent shall take all
action necessary in accordance with applicable law and its Articles of
Incorporation and Bylaws within [30 days] after the date hereof either (i)
to obtain the written consent of the stockholders of Parent to the issuance
of capital stock of Parent in connection with this Agreement (the
"Issuance") or (ii) to convene a special meeting of its stockholders and
solicit from stockholders proxies in favor of the Issuance. In any event,
Parent shall use its best efforts to take all action necessary or advisable
to secure the vote or consent of stockholders required to effect the
Issuance, and subject to the fiduciary duties of Parent's Board of
Directors under applicable law, as advised by counsel, the Board of
Directors of Parent shall recommend a consent or vote in favor of the
Issuance.
6.6 Further Assurances.
(a) 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 actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this
Agreement, including using all reasonable efforts to obtain all necessary
waivers, consents and approvals, to effect all necessary registrations and
filings (including, but not limited to, filings with all applicable
Governmental Entities) and to lift any injunction or other legal bar to the
Merger (and, in such case, to proceed with the Merger as expeditiously as
possible).
(b) In case at any time after the Effective Time any further action
is necessary or desirable to carry out the purposes of this Agreement, the
proper officers and/or directors of Parent and the Surviving Corporation
shall take all such necessary action.
(c) UIHH, on the one hand, and Parent on the other shall confirm
and represent to one another, such factual matters as the other may
reasonably request in order for each party to confirm that the Merger will
qualify as a nontaxable reorganization under Sections 368(a)(1)(A) and
368(a)(2)(E) of the Code.
(d) None of Parent, Merger Sub and UIHH will (both before and after
consummation of the Merger) take any actions, other than those contemplated
by this Agreement, which would prevent the transaction effected through the
Merger from qualifying as a reorganization under the provisions of Section
368(a) of the Code.
6.7 Certain Tax Matters.
(a) Parent shall cause UIHH to continue at least one significant
historical business line of UIHH, or shall use at least a significant
portion of UIHH' historical business assets in a business, in each case
within the meaning of Treasury Regulation Section 1.368-1(d).
(b) The UIHH Shareholder shall retain and provide to Parent, and
Parent will retain and provide to the UIHH Shareholder, any records or
other information that may be relevant to any Return, audit or examination,
proceeding, or determination that affects any amount required to be shown
on any Return. Without limiting the generality of the foregoing, each party
shall retain, until the applicable statutes of limitations (including any
extensions) have expired, copies of all Returns, supporting work schedules,
and other records or information that may be relevant to such Returns for
all tax periods or portions thereof ending before or including the Closing
Date and shall not destroy or otherwise dispose of any such records without
first providing the other party with a reasonable opportunity to review and
copy the same.
(c) Parent shall exercise complete control over the handling,
disposition, and settlement of any governmental inquiry, examination, or
proceeding that could result in a determination with respect to Taxes due
or payable by the Surviving Corporation for any period ending on or after
the Closing Date and the UIHH Shareholder shall exercise complete control
with respect to any period ending prior to the Closing Date.
(d) Parent shall pay any sales, use, transfer or documentary Taxes
and recording and filing fees, incurred in connection with this Agreement
and shall prepare and timely file all Returns with
respect to such taxes and fees.
6.8 Notice of Breach. Each party hereto shall promptly give written
notice to the others upon becoming aware of the occurrence or impending or
threatened occurrence or nonoccurrence, of any event that could cause or
constitute a breach of any of its representations, warranties or covenants
hereunder or have a material adverse effect on the business of the
companies.
6.9 Notice of Adverse Change. Each party hereto shall promptly give
written notice to the others upon becoming aware of the occurrence or
impending or threatened occurrence or nonoccurrence of any event that could
have a material adverse effect on its or its subsidiaries business
operations or prospects.
6.10 Publication of Financial Information. As promptly as
reasonably practicable after the first complete fiscal quarter after the
Effective Time that includes at least 30 days of combined operations of
Parent and the survivor of the merger between UIHH and Merger Sub, Parent
will cause to be publicly reported in a Quarterly Report on Form 10-Q
financial statements of Parent that include such combined operations.
6.11 Allocation of Taxes.
(a) The UIHH Shareholder shall pay all Taxes of UIHH
allocable to any period ending on or before February 28, 1998, whether such
Taxes are due before or after Closing. Subject to the provisions below, the
Taxes allocable to any period ending on the day before the Closing Date (a
"Pre-Closing Period") shall be determined on the basis of a balance sheet
of UIHH at the end of the day before the Closing Date (the "Closing Date
Balance Sheet").
(b) For purposes of paragraph (a), Taxes allocable to a
Pre-Closing Period shall be determined in accordance with Section 1362 of
the Code and the regulations thereunder.
(c) UIHH shall include the income, gain, loss, deductions,
credits, estimates, withholding amounts, tax information and similar items
(collectively "Tax Items") of UIHH for federal income tax purposes for all
Pre-Closing Periods in the federal income tax Return filed on behalf of
UIHH. UIHH shall take no position on such Returns that is materially
inconsistent with past practice and that would materially adversely affect
Parent or UIHH after the Closing Date. The UIHH Shareholder shall prepare
and deliver to Parent prior to filing, a draft Return that demonstrates the
activities and Tax Items of UIHH for any other Pre-Closing Period if
requested by Parent.
(d) To the extent any determination of Taxes with respect to
UIHH, whether as the result of an audit or examination, a claim for refund,
the filing of an amended return, the application of an overpayment as an
offset, or otherwise, results in a refund of Taxes paid by UIHH (a
"Refund"), the UIHH Shareholder shall be entitled to any part of such
Refund attributable to a Pre-Closing Period (but only to the extent that
the Refund amount that would otherwise be payable to the UIHH Shareholder
exceed the amount for that Refund as reflected on the Closing Date Balance
Sheet) and Parent shall be entitled to the balance of such Refund. The
party receiving a Refund shall, within 10 days after receipt, pay over to
the other party the portion of the Refund to which the other party is
entitled under this paragraph (along with a proportionate share of any
interest amounts received with the Refund).
(e) The UIHH Shareholder and Parent agree to give prompt
notice to each other of any proposed adjustment to Taxes for any
Pre-Closing Period. The UIHH Shareholder and Parent shall cooperate with
each other in the conduct of any audit or other proceedings involving UIHH
for such periods and each may participate at its own expense, provided that
Parent shall have the right to control the conduct of any such audit or
proceeding.
(f) The UIHH Shareholder and Parent agree to furnish or
cause to be furnished to each other, upon request, as promptly as
practicable, such information and assistance (including access to books and
records) relating to UIHH as is reasonably necessary for the preparation of
any Return, claim for refund or audit, and the prosecution or defense of
any claim, suit or proceeding relating to any proposed adjustment.
6.12 Listing. Prior to the Effective Time, Parent shall have
submitted an application to the AMEX to list the shares of Parent Common
Stock underlying the Parent Preferred Stock constituting the Merger
Consideration and Parent shall use its reasonable efforts to cause such
application to become effective at or as soon as reasonably practicable
following the Effective Time.
6.13 Name. Parent acknowledges that it will not received any rights
to the name "UIH Hunan, Inc." pursuant to this Agreement and it agrees that
neither it nor any of its subsidiaries or controlled affiliates shall ever
use such name or any derivative thereof.
6.14 Representations and Warranties. Neither Parent nor the UIHH
Shareholder will take, or agree in writing or otherwise to take, any action
that would result in any of its representations or warranties contained in
this Agreement being untrue, except as otherwise contemplated by this
Agreement.
ARTICLE VII
CONDITIONS PRECEDENT
7.1 Conditions to Obligations of Each Party to Effect the Merger.
The respective obligations of each party hereto to consummate and effect
this Agreement and the transactions contemplated hereby shall be subject to
the satisfaction at or prior to the Effective Time of each of the following
conditions, any of which may be waived, in writing, by agreement of the
parties hereto:
(a) This Agreement and the transactions contemplated hereby shall
have been approved and adopted by the requisite vote of the stockholders of
Parent.
(b) No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or
other legal or regulatory restraint or prohibition preventing the
consummation of the Merger, nor any proceeding brought by any Governmental
Entity, domestic or foreign, seeking any of the foregoing, shall be
pending; nor shall there be any action taken, or any statute, rule,
regulation or order enacted, entered, enforced or deemed applicable to the
Merger, which makes or seeks to make the consummation of the Merger
illegal.
(c) Parent, UIHH and Merger Sub and their respective subsidiaries,
if any, shall have timely obtained from each Governmental Entity all
approvals, waivers and consents, if any, necessary for consummation of or
in connection with the Merger and the several transactions contemplated
hereby, including such approvals, waivers and consents as may be required
under the federal securities and state Blue Sky laws.
7.2 Additional Conditions to Obligations of UIHH to Effect the
Merger. The obligations of UIHH to consummate and effect this Agreement and
the transactions contemplated hereby shall be subject to the satisfaction
at or prior to the Effective Time of each of the following conditions, any
of which may be waived, in writing, by UIHH:
(a) Parent and Merger Sub shall have performed and complied in all
material respects with all covenants, obligations and conditions of this
Agreement required to be performed and complied with by them on or prior to
the Effective Time and the representations and warranties of Parent and
Merger Sub in this Agreement shall be complete and correct in all material
respects (or in all respects in the case of any representation or warranty
that is qualified by its terms by a reference to Material Adverse Effect or
otherwise the concept of materiality) when made and on and as of the
Effective Time as though such representations and warranties were made on
and as of such time.
(b) UIHH shall have received a certificate, dated as of the
Effective Time, executed on behalf of Parent by its Chief Financial Officer
certifying that the conditions specified in Section 7.2(a) have been
fulfilled.
(c) Parent shall have delivered to the UIHH Shareholder
certificates representing the Parent Preferred Stock, which shall be duly
authorized and issued, fully paid and nonassessable, and free and clear of
any Liens, and shall have been issued pursuant to, and shall have the
rights set forth in, the Certificate of Designations.
(d) UIHH shall have received a legal opinion of legal counsel to
Parent acceptable to UIHH as to such matters as may be reasonably requested
by UIHH.
(e) Parent shall have executed and delivered to the UIHH
Shareholder an agreement with respect to demand and piggyback registration
rights of holders of the Parent Preferred Stock (the "Registration Rights
Agreement"), substantially in the form of Exhibit 7.2(e) attached hereto.
(f) There shall not have occurred any Material Adverse Effect on
Parent or any of the AMTEC Subsidiaries.
(g) UIHH shall have confirmed, to its reasonable satisfaction, that
the Merger will qualify as a nontaxable reorganization under Sections
368(a)(1)(A) and 368(a)(2)(E) of the Code.
(h) UIHH shall have received a certificate, dated the Closing Date,
of the Secretary or an Assistant Secretary of Parent certifying as to the
resolutions of the Board of Directors of Parent attached thereto and to
such other corporate proceeding relating to the authorization, execution
and delivery of this Agreement as UIHH may reasonably request.
(i) Parent shall have executed and delivered the Technical
Assistance Agreement, in the form attached hereto as Exhibit 7.2(i).
(j) Parent shall have executed and delivered the Investment
Agreement, in the form attached hereto as Exhibit 7.2(j).
7.3 Additional Conditions to the Obligations of Parent and Merger
Sub to Effect the Merger. The obligations of Parent and Merger Sub to
consummate and effect this Agreement and the transactions contemplated
hereby shall be subject to the satisfaction at or prior to the Effective
Time of each of the following conditions, any of which may be waived, in
writing, by Parent:
(a) UIHH shall have performed and complied in all material respects
with all covenants, obligations and conditions of this Agreement required
to be performed and complied with by it at or prior to the Effective Time
and the representations and warranties of UIHH in this Agreement shall be
complete and correct in all material respects (or in all respects in the
case of any representation or warranty that is qualified by its terms by a
reference to Material Adverse Effect or otherwise by the concept of
materiality) when made and on and as of the Effective Time as though such
representations and warranties were made on and as of such time.
(b) Parent shall have received a certificate, dated as of the
Effective Time, executed on behalf of UIHH by its Chief Financial Officer
certifying that the conditions specified in Section 7.3(a) have been
fulfilled.
(c) Parent shall have received a legal opinion from Holme Xxxxxxx &
Xxxx LLP, legal counsel to UIHH, as to such matters as may be reasonably
requested by Parent.
(d) There shall not have occurred any Material Adverse Effect on
UIHH.
(e) UIHH shall have delivered or caused to be delivered to Parent
certificates representing all of the issued and outstanding shares of UIHH
Common Stock pursuant to Section 3.2;
(f) Parent shall have confirmed, to its reasonable satisfaction,
that the Merger will qualify as a nontaxable reorganization under Sections
368(a)(1)(A) and 368(a)(2)(E) of the Code.
(g) Parent shall have received a certificate, dated the Closing
Date, of the Secretary or an Assistant Secretary of UIHH certifying as to
the resolutions of the UIHH Shareholder and the Board of Directors of UIHH
attached thereto and to such other corporate proceeding relating to the
authorization, execution and delivery of this Agreement as Parent may
reasonably request.
(h) Parent shall have received a legal opinion from Chinese legal
counsel reasonably acceptable to Parent, as to such matters as may be
reasonably requested by Parent.
ARTICLE VIII
RESTRICTIONS ON TRANSFER
8.1 Legends. Each certificate representing shares of Parent
Preferred Stock issued in connection with the Merger (the "Restricted
Securities") shall bear a legend to the following effect:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THESE SECURITIES CANNOT BE
SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
OF, EXCEPT IN COMPLIANCE WITH APPLICABLE FEDERAL AND STATE SECURITIES LAWS
AND NO TRANSFER WILL BE RECOGNIZED UNLESS MADE IN COMPLIANCE WITH SUCH
LAWS."
Any holder of Restricted Securities (a "Holder") who disposes of Restricted
Securities in accordance with Section 8.2 shall be entitled to have Parent
cause new certificates without legends to be issued promptly to the Holder
in exchange for outstanding certificates with legends representing the
disposed shares if: (a) the opinion of counsel referred to in Section 8.2
is to the further effect that such legend is not required in order to
establish compliance with any provisions of the Securities Act; (b) the
transfer is in connection with a transaction intended to comply with Rule
144 and Rule 145 as promulgated by the SEC under the Securities Act, as
such Rules may be amended from time to time, or any similar successor rule
that may be promulgated by the SEC; or (c) an appropriate registration
statement with respect to such Restricted Securities has been filed by
Parent with the SEC and has been declared effective by the SEC.
8.2 Notice of Proposed Dispositions. Prior to any proposed
disposition of any Restricted Securities (unless there is in effect a
registration statement under the Securities Act covering such proposed
disposition and such disposition is made in accordance with such
registration statement), the holder thereof shall give written notice to
Parent of such Holder's intention to effect such disposition. Each such
notice shall describe the manner and circumstances of the proposed
disposition and shall be accompanied by either (a) a written opinion of
legal counsel addressed to Parent and reasonably satisfactory in form and
substance to Parent, to the effect that the proposed disposition of
Restricted Securities may be effected without registration of such
Restricted Securities or (b) a "no action" letter from the SEC to the
effect that such disposition without registration of such Restricted
Securities will not result in recommendation by the staff of the SEC that
enforcement action be taken with respect thereto, whereupon the Holder of
such Restricted Securities shall be entitled to transfer such Restricted
Securities in accordance with the terms of the notice delivered by the
Holder to Parent. The provisions of this Section 8.2 shall not apply to
Restricted Securities that are then freely tradeable pursuant to Rule
144(k) under the Securities Act, as amended from time to time, or any
similar successor rule that may be promulgated by the SEC.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1 Termination. At any time prior to the Effective Time, this
Agreement may be terminated:
(a) by mutual consent of Parent and UIHH;
(b) by Parent, if any of the conditions specified in Section 7.3
have not been satisfied or waived at such time as such condition is no
longer capable of satisfaction;
(c) by UIHH, if any of the conditions specified in Section 7.2 have
not been satisfied or waived at such time as such condition is no longer
capable of satisfaction;
(d) by UIHH if the Average Closing Price Per Share is less than
$1.00;
(e) by either Parent or UIHH if the other shall have breached its
respective representations, warranties, covenants or other obligations
under Articles IV through VIII in any material respect and such breach
continues for a period of 10 days after receipt of notice of the breach
from the non-breaching party hereto.
(f) by Parent or UIHH at any time after December 31, 1999, if,
without any fault on the part of the party seeking to terminate this
Agreement pursuant to this Section 9.1(f), the Closing shall
not have occurred on or before such date.
9.2 Effect of Termination. In the event of termination of this
Agreement as provided in Section 9.1, this Agreement shall forthwith become
void and there shall be no liability or obligation on the part of Parent,
Merger Sub or UIHH or their respective officers, directors, shareholders or
affiliates, except to the extent that such termination results from the
breach by a party hereto of any of its representations, warranties or
covenants set forth in this Agreement; provided, however, that the
provisions of this Section 9.2 and Article XI (General Provisions) shall
remain in full force and effect and survive any termination of this
Agreement.
9.3 Amendment. The respective Boards of Directors of the parties
hereto may cause this Agreement to be amended at any time by execution of
an instrument in writing signed on behalf of each of the parties hereto;
provided that an amendment made subsequent to adoption of the Agreement by
the shareholders of UIHH or Merger Sub shall not (a) alter or change the
amount or kind of consideration to be received on conversion of the UIHH
Common Stock, (b) alter or change any term of the Articles of Incorporation
of Surviving Corporation to be effected by the Merger, or (c) alter or
change any of the terms and conditions of this Agreement if such alteration
or change would adversely affect the UIHH Shareholder or Parent without the
prior written approval of the shareholders of UIHH and Parent.
9.4 Extension; Waiver. At any time prior to the Effective Time any
party hereto may, to the extent legally allowed, (a) extend the time for
the performance of any of the obligations or other acts of the other
parties hereto, (b) waive any inaccuracies in the representations and
warranties made to such party contained herein or in any document delivered
pursuant hereto, and (c) waive compliance with any of the agreements or
conditions for the benefit of such party contained herein. Any agreement on
the part of a 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.
ARTICLE X
GENERAL PROVISIONS
10.1 Survival of Representations and Warranties. The
representations and warranties of UIHH herein shall survive the Merger and
continue in full force and effect until the earlier of the first
anniversary of the Effective Time or the date on which UIHH publishes
audited financial statements for a period ending after the Effective Time,
except those contained in Sections 4.15 and 4.16, which shall survive the
Merger and continue in full force and effect for one year. The
representations and warranties of Parent and Merger Sub shall survive the
Merger and continue in full force and effect until the second anniversary
of the Effective Time.
10.2 Indemnification by Parent. Parent hereby agrees to indemnify
and hold each of the UIHH Shareholder harmless from, and to reimburse the
UIHH Shareholder for, any Shareholder Indemnity Claims arising under the
terms and conditions of this Agreement. For purposes of this Agreement, the
term "Shareholder Indemnity Claim" shall mean any action, suit, proceeding,
hearing, charge, complaint, claim, demand, injunction, judgment, order,
decree, ruling, damage, dues, penalty, fines, costs, amounts paid in
settlement, liabilities, obligations, Taxes, Liens, losses, expenses and
fees, including court costs and attorneys' fees and expenses ("Losses")
incurred by the UIHH Shareholder resulting from any breach of a
representation, warranty or covenant (as such representation or warranty
would read if all qualifications as to knowledge, materiality and Material
Adverse Effect were deleted from it) of Parent or Merger Sub that is
contained in this Agreement.
10.3 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or by
commercial delivery service, or mailed by registered or certified mail,
return receipt requested, or sent via facsimile, with confirmation of
receipt, to the parties at the following address or at such other address
for a party as shall be specified by notice hereunder:
(a) if to Parent or Merger Sub, to:
AMTEC, Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
(b) if to UIHH, to:
UIH Asia/Pacific Communications, Inc.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: President
Facsimile No.: (000) 000-0000
with a copy to:
Holme Xxxxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
10.4 Interpretation. When a reference is made in this Agreement to
Exhibits, Articles, Schedules or Sections, such reference shall be to an
Exhibit, Article, Schedule or Section to this Agreement unless otherwise
indicated. The words "include," "includes" and "including" when used herein
shall be deemed in each case to be followed by the words "without
limitation." The phrase "made available" in this Agreement shall mean that
the information referred to has been made available if requested by the
party hereto to whom such information is to be made available. The table of
contents, index of defined terms and Article and Section headings contained
in this Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement. In this Agreement,
any reference to any event, change, condition or effect being "material"
with respect to any entity or group of entities means any material event,
change, condition or effect related to the condition (financial or
otherwise), properties, assets (including intangible assets), liabilities,
business, operations or results of operations of such entity or group of
entities. In this Agreement, any reference to a "Material Adverse Effect"
with respect to any entity or group of entities means any event, change or
effect that is materially adverse to the condition (financial or
otherwise), properties, assets, liabilities, business, operations or
results of operations of such entity and its subsidiaries, taken as a
whole. In this Agreement, any reference to a party's "knowledge" means such
party's actual knowledge of a particular fact or matter after due and
diligent inquiry of officers, directors and other employees of such party
reasonably believed to have knowledge of such matters. Whenever the context
may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.
10.5 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed
by each of the parties hereto and delivered to the other parties hereto, it
being understood that all parties hereto need not sign the same
counterpart.
10.6 Entire Agreement; Nonassignability; Parties in Interest. This
Agreement, the Registration Rights Agreement, the Investment Agreement, the
Technical Assistance Agreement and the documents and instruments and other
agreements specifically referred to herein or delivered pursuant hereto,
including the Exhibits, the UIHH Disclosure Schedule and the Parent
Disclosure Schedule (a) constitute the entire agreement among the parties
hereto with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the parties
hereto with respect to the subject matter hereof; (b) are not intended to
confer upon any other person any rights or remedies hereunder; and (c)
shall not be assigned by operation of law or otherwise, except as otherwise
specifically provided.
10.7 Severability. In the event that any provision of this
Agreement, or the application thereof, becomes or is declared by a court of
competent jurisdiction to be illegal, void or unenforceable, the remainder
of this Agreement will continue in full force and effect and the
application of such provision to other persons or circumstances will be
interpreted so as reasonably to effect the intent of the parties hereto.
The parties hereto further agree to replace such void or unenforceable
provision of this Agreement with a valid and enforceable provision that
will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.
10.8 No Waiver. No failure or delay on the part of any party hereto
in the exercise of any right hereunder shall impair such right or be
construed to be a waiver of, or acquiescence in, any breach of any
representation, warranty or agreement herein, nor shall any single or
partial exercise of any such right preclude other or further exercise
thereof or of any other right.
10.9 Governing Law. The Merger shall be governed by the laws of the
State of Delaware. All other aspects of this Agreement shall be governed by
and construed in accordance with the laws of the State of Colorado (without
regard to the principles of conflicts of law thereof).
10.10 Charters and By-Laws. The Surviving Corporation agrees that
all rights to indemnification or exculpation now existing in favor of the
employees, agents, directors or officers of UIHH (the "UIHH Indemnified
Parties") as provided in its Articles of Incorporation or By-Laws shall
continue in full force and effect for a period of not less than six years
from the Closing Date; provided, however, that, in the event any claim or
claims are asserted or made within such six-year period, all rights to
indemnification in respect of any such claim or claims shall continue until
disposition of any and all such claims. Any determination required to be
made with respect to whether a UIHH Indemnified Party's conduct complies
with the standards set forth in the Articles of Incorporation or By-Laws of
UIHH or otherwise shall be made by independent counsel selected by the UIHH
Indemnified Party reasonably satisfactory to the Surviving Corporation
(whose fees and expenses shall be paid by the Surviving Corporation).
10.11 Rules of Construction. The parties hereto agree that they
have been represented by counsel during the negotiation, preparation and
execution of this Agreement and, therefore, waive the application of any
law, regulation, holding or rule of construction providing that ambiguities
in an agreement or other document will be construed against the party
drafting such agreement or document.
10.12 Expenses. Whether or not the Merger is consummated, all costs
and expenses incurred in connection with this Agreement and the
transactions contemplated hereby (including, without limitation, the fees
and expenses of its advisers, accountants and legal counsel) shall be paid
by the party incurring such expense.
10.13 Attorneys Fees. In the event of any proceeding to enforce
this Agreement, the prevailing party shall be entitled to receive from the
losing party all reasonable costs and expenses, including the reasonable
fees of attorneys, accountants and other experts, incurred by the
prevailing party in investigating and prosecuting (or defending) such
action at trial or upon any appeal.
IN WITNESS WHEREOF, UIHH, Parent and Merger Sub have caused this
Agreement to be executed and delivered by their respective officers
thereunto duly authorized, all as of the date first written above.
AMTEC, INC.
By:
Name:
Title:
AMTEC ACQUISITION CORPORATION
By:
Name:
Title:
UIH HUNAN, INC.
By:
Name:
Title:
Exhibit 7.2(j)
to Agreement and Plan of Merger
INVESTMENT AGREEMENT
This Investment Agreement (this "Agreement"), dated as of
___________, 199_, is between AMTEC, INC, a Delaware corporation (together
with its successors and assigns, the "Company"), and UIH CHINA HOLDINGS,
INC., a Colorado corporation (together with its successors and assigns,
"UIH China").
RECITALS
A. The Company, AMTEC ACQUISITION CORPORATION, a Colorado
corporation and a wholly-owned subsidiary of the Company ("Merger Sub"),
and UIH HUNAN, INC., a Colorado corporation and a wholly-owned subsidiary
of UIH China Holdings, Inc. ("UIHH"), entered into a Merger Agreement dated
December 23, 1998 (the "Merger Agreement"), pursuant to which UIHH, the
Company and Merger Sub agreed to cause Merger Sub to merge with and into
UIHH, subject to the terms and conditions set forth therein.
B. The parties are entering into this Agreement as a condition to
the closing under the Merger Agreement.
AGREEMENT
In consideration of the foregoing, the parties agree as follows:
Section 1 Definitions. For purposes of this Agreement, the
following terms have the following meanings:
"Additional Common Shares" means all Common Shares (including
treasury shares) issued or sold (or, pursuant to Section 7(a)(iii) or
7(a)(iv), deemed to be issued) by the Company after the date hereof,
whether or not subsequently reacquired or retired by the Company, other
than
(a) Common Shares issued upon: the exercise of the Option;
the exercise of options and warrants issued by the Company in
connection with debt financings of the Company that are outstanding
as of the date hereof; the exercise of employee stock options and
warrants outstanding as of the date hereof; and the exchange of
shares of the Company's Preferred Stock (whether occurring before
or after the date hereof);
(b) Common Shares issued to shareholders of any entity which
merges into the Company in proportion to their stock holdings in
such entity immediately prior to such merger, upon such merger;
(c) Common Shares issued in a bona fide public offering
pursuant to a firm commitment underwriting, but only if and to the
extent that the consideration received by the Company in respect of
each share so issued (as determined pursuant to Section 7(a)(v))
equals or exceeds ninety-five percent (95%) of the Current Market
Price;
(d) Common Shares issued in a bona fide private placement
through a placement agent which is a member firm of the National
Association of Securities Dealers or by the Company, but only if
and to the extent that the consideration received by the Company in
respect of each share so issued (as determined pursuant to Section
7(a)(v)) equals or exceeds ninety percent (90%) of the Current
Market Price;
(e) such additional number of Common Shares as may become
issuable upon the exercise of any of the securities referred to in
the foregoing clause (a) by reason of adjustments required pursuant
to anti-dilution provisions applicable to such securities as in
effect on the date hereof.
"Affiliate" means, with respect to any Person, any entity that
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with such Person. For purposes of
this definition, the term "control" means the ownership of fifty percent
(50%) or more of the voting interests of such Person.
"Agreement" means this Investment Agreement as amended, modified,
restated and replaced from time to time.
"Applicable Period" has the meaning set forth in Section 8.
"Business Day" means any day on which banks in New York, New York
are generally open to the public for the conduct of commercial banking
transactions.
"Closing" and "Closing Date" have the meanings set forth in Section
3(a).
"Common Shares" means shares of common stock, par value $0.001, of
the Company.
"Company's Preferred Stock" means the Company's preferred stock,
par value $0.001 per share, of which there are issued and outstanding ___
shares in Series E ("Series E Preferred Stock"), and ___ shares in Series F
("Series F Preferred Stock").
"Current Market Price" means the average daily Market Price during
the period of the most recent twenty (20) days, ending on such date, on
which the national securities exchanges were open for trading, except that
if no Common Stock is then listed or admitted to trading on any national
securities exchange or quoted in the over-the-counter market, the Current
Market Price shall be the Market Price on such date.
"Dollars" or "US $" means United States dollars, the lawful
currency of the United States of America.
"Due Diligence Period" has the meaning set forth in Section 2(e).
"Encumbrance" means any debt, charge, attachment, lien, claim or
any other third party right.
"Exercise Period" means the period beginning on the date hereof and
ending on the third anniversary of the date of this Agreement.
"Extraordinary Cash Dividend" means any cash dividend or
distribution with respect to the Common Shares the amount of which exceeds,
when aggregated with all other such dividends or distributions paid on the
Common Shares over the 365-day period immediately preceding the record date
for such dividend or distribution, on a per share basis, the lesser of (i)
twenty-five percent (25%) of the consolidated net income of the Company for
the four fiscal quarters immediately preceding the record date for such
dividend or distribution and (ii) eight percent (8%) of the average of the
Market Prices of the Common Shares on each trading day during the 365-day
period referred to above.
"Financial Statements" has the meaning set forth in Section 5(a).
"Fully Diluted Basis" assumes the exercise of all outstanding
options and warrants of the Company and the conversion of all securities
whether debt or equity that are convertible into capital stock of the
Company and including the exercise of all preemptive rights of any
stockholder of the Company that exist prior to the Closing.
"GAAP" has the meaning set forth in Section 4(a)(v).
"Holder" means UIH China, and all successors and permitted assigns
of UIH China.
"Investment" has the meaning set forth in Section 9.
"Investment Notice" has the meaning set forth in Section 9.
"Market Price" means, on any date specified herein, the amount per
share of the Common Shares, equal to (a) the last sale price of such Common
Shares, on such date or, if no such sale takes place on such date, the
average of the closing bid and asked prices thereof on such date, in each
case as officially reported on the principal national securities exchange
on which such Common Shares are then listed or admitted to trading, or (b)
if such Common Shares are not then listed or admitted to trading on any
national securities exchange but is designated as a national market system
security by the National Association of Securities Dealers, the last
trading price of the Common Shares on such date, or (c) if there shall have
been no trading on such date or if the Common Shares are not so designated,
the average of the closing bid and asked prices of the Common Shares on
such date as shown by the National Association of Securities Dealers
automated quotation system, or (d) if such Common Shares are not then
listed or admitted to trading on any national exchange or quoted in the
over-the-counter market, the higher of (x) the book value thereof as
determined by any firm of independent public accountants of recognized
standing selected by the Board of Directors of the Company as of the last
day of any month ending within sixty (60) days preceding the date as of
which the determination is to be made or (y) the fair value thereof
determined in good faith by the Board of Directors of the Company as of a
date which is within eighteen (18) days of the date as of which the
determination is to be made.
"Material Adverse Effect" means any event, change or effect that is
materially adverse to the condition (financial or otherwise), properties,
assets, liabilities, business, operations or results of operations of such
entity and its subsidiaries, taken as a whole.
"Non-Compete Agreement" has the meaning set forth in Section 9.
"Option" has the meaning set forth in Section 2(a).
"Option Exercise Notice" has the meaning set forth in Section 2(b).
"Option Share Price"has the meaning set forth in Section 2(d).
"Option Shares" means the total number of the fully paid and
nonassessable Common Shares to be issued and delivered to Holder by the
Company at the Closing, which shall be calculated in
accordance with Section 2(a).
"Participation Notice" has the meaning set forth in Section 9.
"Person" means any natural person, company, corporation,
partnership, joint venture, trust, association, investment company, fund,
unincorporated entity of any kind or governmental agency
or authority.
"Purchase Price" has the meaning set forth in Section 3(b)(i)(A).
"Registration Rights Agreement" means a Registration Rights
Agreement to be executed and delivered at the Closing by the Company and by
Holder, substantially in the form attached hereto as Exhibit [ ].
"Reorganization Event" means (i) any consolidation or merger of the
Company with or into another entity (including any individual, partnership,
joint venture, corporation, trust or group thereof), or (ii) any sale,
lease, transfer or conveyance of all or substantially all of the property
and assets of the Company.
"Securities" has the meaning set forth in Section 4(b)(iii)(A).
"Termination Notice" has the meaning set forth in Section 9.
"Transfer" has the meaning set forth in Section 2(g).
"UIH China Nominees" has the meaning set forth in Section 8.
Section 2 Option.
(a) Grant of Option. In consideration for UIH China causing UIHH to
enter into the Merger Agreement, and subject to the terms and conditions of
this Agreement, the Company hereby grants to UIH China the right to acquire
upon issue (the "Option") such number of Common Shares (the "Option
Shares") as will result in UIH China beneficially owning, immediately after
the issuance of such Option Shares to UIH China, up to a total of
twenty-five percent (25%) of the issued and outstanding Common Shares of
the Company on a Fully Diluted Basis. The Option may be exercised in whole,
or in part, at any time during the Exercise Period.
(b) Exercise of Option. If Holder desires to exercise the Option,
Holder shall deliver to the Company an Option Exercise Notice in the form
attached hereto as Exhibit 2(b) (the "Option Exercise Notice").
(c) Determination of Number of Option Shares. The number of Common
Shares to be issued to Holder as Option Shares at the Closing shall be a
number, determined by UIH China, not to exceed the number of Common Shares
that will result, after issuance to UIH China, in UIH China beneficially
owning twenty-five percent (25%) of all issued and outstanding Common
Shares of the Company on a Fully Diluted Basis.
(d) Option Share Price. The price of an Option Share ( the "Option
Share Price") shall be US $3.00 per Common Share, subject to adjustment as
provided in Section 7.
(e) Due Diligence. Upon reasonable notice at any time during the
Exercise Period (including during the Due Diligence Period referred to
below), the Company will afford UIH China and its representatives full
access during normal business hours to the properties, books and records of
the Company and its subsidiaries and will cause its officers and employees
and the officers and employees of its subsidiaries to provide UIH China and
its representatives with such financial and operating data and other
information as UIH China and its representatives may reasonably request.
Upon delivery of an Option Exercise Notice pursuant to Section 2(b), UIH
China and its representatives shall have a period of ten (10) Business Days
following delivery of such Option Exercise Notice (the "Due Diligence
Period") to conduct any additional review of the books and records of the
Company and its subsidiaries and any other additional reasonable due
diligence investigation of the Company and its subsidiaries as UIH China in
good xxxxx xxxxx appropriate. At any time prior to the Closing, UIH China
may advise the Company in writing that it does not intend to proceed with
the purchase of the Option Shares based on the results of its due diligence
review. In such case, the Option shall continue to exist after the date the
Option Exercise Notice was revoked.
(f) Termination of Option. The Option will terminate and have no
further force or effect, if the Closing has not occurred on or before the
last day of the Exercise Period.
(g) Transfer of Option. UIH China may sell, assign, pledge,
hypothecate, encumber or in any other manner transfer or dispose of
("Transfer") the Option in whole or in part to any Affiliate of UIH China,
provided that (i) UIH China and such Affiliate have provided the Company
with opinions of counsel reasonably satisfactory to the Company and its
counsel stating that such Transfer complies with all applicable securities
laws; and (ii) UIH China pays any value added, sales, transfer or other tax
imposed on such Transfer by any governmental authority.
Section 3 Closing.
(a) Closing of the Option.
(i) Closing Date. The closing on the purchase of the Option
Shares by UIH China (the "Closing") shall occur at [the Administrative
Office of the Company] on the date (the "Closing Date") that is ten (10)
Business Days after delivery of the Option Exercise Notice. If the Option
Exercise Notice is delivered by UIH China pursuant to a Reorganization
Event, the Closing shall occur concurrently with the closing of the
Reorganization Event.
(b) Conditions to Closing.
(i) Conditions to the Company's Obligations to Effect the
Closing. The Company's obligations to effect the Closing and complete the
transactions contemplated hereby shall be subject to satisfaction or waiver
by the Company, at or prior to the Closing, of the following
conditions:
(A) UIH China shall pay to the Company an amount
equal to (i) the total number of Option Shares to be issued to UIH China,
multiplied by (ii) the Option Share Price (the "Purchase Price") in
immediately available Dollar funds, such payment to be made in accordance
with Section 3(d).
(B) UIH China shall have duly executed and delivered
the Registration Rights Agreement.
(C) There shall be no injunction or other court order
prohibiting or restricting delivery of the Option Shares.
(D) UIH China shall deliver to the Company a
certificate of an officer of UIH China, reasonably acceptable to the
Company, to the effect that the representations and warranties set forth in
Section 4(b) are accurate and correct as of the Closing (except as
otherwise disclosed in writing by UIH China to the Company prior to the
Closing Date), as if made at and as of the Closing.
(ii) Conditions to UIH China's Obligations to Effect the
Closing. UIH China's obligations to effect the Closing and complete the
transactions contemplated hereby shall be subject to satisfaction or waiver
by UIH China, at or prior to the Closing, of the following
conditions:
(A) The Company shall issue the Option Shares in
accordance with applicable law, and deliver duly executed share
certificates of the Company representing the Option Shares to and in the
name of the appropriate recipient(s) thereof, which Option Shares shall
upon the issuance thereof be duly authorized, fully paid, non-assessable
and free and clear of all Encumbrances;
(B) The Company shall have duly executed and
delivered to UIH China the Registration Rights Agreement;
(C) The Company shall deliver to UIH China an opinion
of counsel to the Company, reasonably acceptable to UIH China, stating that
the Option Shares have been duly authorized and validly issued, that the
share certificates of the Company representing the Option Shares has been
duly authorized and executed by the Company, and that the Registration
Rights Agreement has been duly authorized, executed and delivered and
constitutes a binding obligation of the Company in accordance with its
terms; and
(D) The Company shall deliver to UIH China a
certificate of the President or a Vice President of the Company, reasonably
acceptable to UIH China, to the effect that the representations and
warranties set forth in Section 4(a) are accurate and correct as of the
Closing (except as otherwise disclosed in writing by the Company to UIH
China prior to the Closing Date) as if made at and as of the Closing; that
all approvals, consents and authorizations of any third party required for
the consummation by the Company of the transactions contemplated hereby
have been obtained; that none of the disclosures about the Company and its
subsidiaries contained in the filings made by the Company with the United
States Securities and Exchange Commission after March 31, 1997, when all
such disclosures are read together in their entirety, contains any untrue
statement or a material fact, or omits to state any material fact necessary
to make the statements contained therein, in light of the circumstances
under which made, not misleading; and that the Company has complied with
all of the covenants set forth in Section 5.
(c) Obligations in connection with the Closings. The Company shall
bear any and all costs and expenses related to any documentary, stamp or
similar taxes payable or to become payable in respect of the issue or
delivery of the Option Shares.
(d) Payment and Delivery of Certificates.
(i) Payment. On each Closing Date, Holder shall (i) pay to
the Company, in immediately available funds by wire transfer to a bank
account designated by the Company, an amount equal to the Option Purchase
Price multiplied by the number of Option Shares to be purchased on such
Closing Date, and (ii) present this Agreement to the Company at the address
of the Company and the Company shall xxxx and return this Agreement to
Holder to reflect the exercise of this Option.
(ii) Delivery of Certificates. At each Closing,
simultaneously with the delivery of immediately available funds, and
presentation of this Agreement as provided in Section 3(d)(ii), (1) the
Company shall deliver to Holder (A) a certificate or certificates
representing the Option Shares to be purchased at such Closing, which
Option Shares shall be free and clear of all liens, fully paid and
nonassessable and subject to no preemptive rights, and (B) an executed new
agreement with the same terms as this Agreement evidencing the right to
purchase the balance of the Option Shares purchasable hereunder, if any,
and the remaining rights of the Holder, and (2) Holder shall deliver to the
Company a letter agreeing that Holder shall not offer to sell or otherwise
dispose of such Option Shares in violation of applicable federal and state
law or of the provisions of this Agreement.
(iii) Legend. In addition to any other legend that is
required by applicable law, certificates for the Option Shares delivered at
each Closing shall be endorsed with a restrictive legend which shall read
substantially as follows:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
'SECURITIES ACT'), AND MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THE SECURITIES ACT OR
UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY THAT SUCH SALE OR TRANSFER IS EXEMPT FROM REGISTRATION
UNDER THE SECURITIES ACT.
It is understood and agreed that the portion of the above legend relating
to restrictions on transfer shall be removed by delivery of substitute
certificate(s) without such legend if Holder shall have delivered to the
Company a copy of a letter from the staff of the SEC, or an opinion of
counsel in form and substance reasonably satisfactory to the Company and
its counsel, to the effect that such legend is not required for purposes of
the Securities Act.
Section 4 Representations and Warranties.
(a) Representations and Warranties of the Company. The Company
hereby represents and warrants to UIH China as follows:
(i) Organization, Standing and Qualification. The Company
(1) is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware; (2) has all requisite corporate
power and authority to own or lease and operate its properties and to carry
on its business as now conducted and as proposed to be conducted; and (3)
is duly qualified or licensed to do business as a foreign corporation and
is in good standing in all jurisdictions in which it is required to be so
qualified or licensed, except where the failure to be so licensed or
qualified would not have a Material Adverse Effect on the Company.
(ii) Capitalization. The capitalization of the Company is
set forth on Schedule 4(b) hereto. All of the outstanding shares of capital
stock of the Company have been duly authorized and validly issued and are
fully paid and nonassessable. The obligation of the Company to issue the
Option Shares under the terms of this Agreement has been duly authorized by
the Company, and upon the proper exercise of the Option in accordance with
its terms and upon issuance of the Option Shares, the Option Shares will be
validly issued, fully paid, non-assessable and free and clear of all
Encumbrances.
(iii) Authorization and Validity of Agreements. This
Agreement has been duly authorized, executed and delivered by the Company
and constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms. All corporate proceedings
on the part of the Company necessary to approve this Agreement and to
consummate the transactions contemplated hereby have been taken and are in
full force and effect.
(iv) No Conflict with Other Instruments; No Approvals
Required. The execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the transactions
contemplated hereby will not violate any provision of law applicable to the
Company, and will not violate the certificate of incorporation, by-laws or
other governing documents of the Company or any material agreement to which
the Company is a party or by which the Company or any of its assets or
properties is bound. Except as set forth on Schedule 4(d), there are no
approvals, consents or authorizations of any third party required for the
Company to consummate the transactions contemplated hereby.
(v) Financial Statements. Except as otherwise stated in the
notes thereto, the Financial Statements of the Company previously delivered
to UIH China have been prepared in conformity with generally accepted
accounting principles as used in the United States of America ("GAAP")
applied on a consistent basis and fairly present the financial position,
results of operations and changes in financial position of the Company as
of the dates and for the periods indicated. Except as reflected in such
Financial Statements and the notes thereto, the Company has no liabilities
that are, individually or in the aggregate, material to the Company other
than ordinary course liabilities incurred since the last date of such
Financial Statements.
(vi) Disclosure. None of the representations or warranties
made by the Company herein or in any Schedule delivered pursuant hereto,
and none of the disclosures about the Company and its subsidiaries
contained in the filings made by the Company with the United States
Securities and Exchange Commission after March 31, 1997, when all such
documents are read together in their entirety, contains any untrue
statement of a material fact, or omits to state any material fact necessary
in order to make the statements contained herein or therein, in the light
of the circumstances under which made, not misleading.
(b) Representations and Warranties of UIH China. UIH China hereby
represents and warrants to the Company as follows:
(i) Organization, Standing and Qualification. UIH China (1)
is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware; and (2) has all requisite
corporate power and authority to own or lease and operate its properties
and to carry on its business as now conducted and as proposed to be
conducted.
(ii) Authorization and Validity of Agreements. This
Agreement has been duly authorized, executed and delivered by UIH China and
constitutes a valid and binding obligation of UIH China, enforceable
against UIH China in accordance with its terms. All corporate proceedings
on the part of UIH China necessary to approve this Agreement have been
taken and are in full force and effect.
(iii) Investment Representations.
(A) UIH China is acquiring the Option and, upon
exercise of the Option, will acquire the Option Shares (collectively, the
"Securities") for its own account for investment only, and not with a view
to, or for sale in connection with, any distribution of the Securities in
violation of the Securities Act, or any rule or regulation under the
Securities Act.
(B) UIH China acknowledges that (i) the Securities
have not been registered under the Securities Act and are "restricted
securities" within the meaning of Rule 144 under the Securities Act and
(ii) the Securities cannot be sold, transferred or otherwise disposed of
unless they are subsequently registered under the Securities Act or an
exemption from registration is then available.
Section 5 Covenants.
(a) Financial Information, etc. During the term of this Agreement,
the Company will deliver, or will cause to be delivered, to UIH China
copies of the following financial statements, reports and information
(collectively, the "Financial Statements"):
(i) promptly when available, on a best efforts basis within
forty-five (45) days and in any event within sixty (60) days after the
close of each fiscal year of the Company, a balance sheet at the close of
such fiscal year, and related statements of earnings, shareholders' equity
and cash flows for such fiscal year, together with supporting notes
thereto, of the Company (with comparable information at the close of and
for the prior fiscal year) prepared in accordance with GAAP consistently
applied and audited by Deloitte & Touche LLP or comparable firm of
independent public accountants; and
(ii) promptly when available, on a best efforts basis within
twenty (20) days and in any event within thirty (30) days after the close
of each fiscal quarter, a balance sheet at the close of such fiscal quarter
and related statements of earnings, shareholders' equity and cash flows for
such fiscal quarter and for the period commencing at the close of the
previous fiscal quarter and ending with the close of such fiscal quarter
(with comparable information at the close of and for the corresponding
fiscal quarter of the prior fiscal year and for the corresponding portion
of such prior fiscal year) prepared in accordance with GAAP consistently
applied, and certified by the chief financial officer and the principal
accounting officer of the Company.
(b) Reporting by the Company. The Company will deliver, or cause to
be delivered, to UIH China copies of all reports filed by the Company with
the United States Securities and Exchange Commission, and all press
releases of the Company referring to the Company or any of its subsidiaries
within two (2) Business Days after they have been filed or released.
(c) Material Adverse Effect. The Company will notify UIH China in
writing of the occurrence or discovery of any event or circumstance with
respect to the Company or any of its subsidiaries that could reasonably be
expected to have a Material Adverse Effect on the business, operations,
assets or prospects of the Company and its subsidiaries, taken as a whole,
as soon as practicable after such occurrence or discovery, if not already
disclosed in any filing or press release of the Company delivered to UIH
China.
Section 6 Restrictions on Transfer. Neither party to this Agreement
may Transfer this Agreement in whole or in part to any Person without the
prior written consent of the other party, provided, however, that UIH China
may Transfer this Agreement, in whole or in part, to one or more Affiliates
of UIH China subject to Section 2(g).
Section 7 Anti-dilution Provisions.
(a) Adjustment of Option Share Price. The Option Share Price to be
paid by UIH China upon exercise of the Option will be subject to adjustment
as follows:
(i) Issuance of Additional Common Shares. In case the
Company at any time or from time to time after the date hereof shall issue
or sell Additional Common Shares (including Additional Common Shares deemed
to be issued pursuant to Section 7(a)(iii) or 7(a)(iv)) without
consideration or for a consideration per share less than the Current Market
Price, then, and in each such case, subject to Section 7(a)(ii), such
Option Share Price shall be reduced, concurrently with such issue or sale,
to a price (calculated to the nearest .001 of a cent) determined by
multiplying such Option Share Price by a fraction,
(A) the numerator of which shall be (i) the number of
Common Shares outstanding immediately prior to such issue or sale, plus
(ii) the number of Common Shares which the aggregate consideration received
by the Company for the total number of such Additional Common Shares so
issued or sold would purchase at such Current Market Price, and
(B) the denominator of which shall be the number of
Common Shares outstanding immediately after such issue or sale,
provided that, for the purposes of this Section 7(a)(i), (1) immediately
after any Additional Common Shares are deemed to have been issued pursuant
to Section 7(a)(iii) or 7(a)(iv), such Additional Shares shall be deemed to
be outstanding, and (2) treasury shares shall not be deemed to be
outstanding.
(ii) Extraordinary Dividends and Distributions. In case the
Company at any time or from time to time after the date hereof shall
declare, order, pay or make a dividend or other distribution (including,
without limitation, any distribution of other or additional stock or other
securities or property by way of dividend or spin-off, reclassification,
recapitalization or similar corporate rearrangement) on the Common Shares,
other than dividends or distributions payable in Additional Common Shares
and other than cash dividends or other cash distributions, which do not
constitute Extraordinary Cash Dividends, then, and in each such case,
subject to Section 7(a)(vii), the Option Share Price in effect immediately
prior to the close of business on the record date fixed for the
determination of holders of any class of securities entitled to receive
such dividend or distribution shall be reduced, effective as of the close
of business on such record date, to a price (calculated to the nearest .001
of a cent) determined by multiplying such Option Share Price by a fraction,
(A) the numerator of which shall be the Current
Market Price in effect on such record date or, if the Common Shares trade
on an ex-dividend basis, on the date prior to the commencement of
ex-dividend trading, less an amount equal to the fair market value of such
dividend or distribution as of the payment date of such dividends or
distributions (as determined in good faith by the Board of Directors of the
Company) applicable to one Common Share, and
(B) the denominator of which shall be such Current
Market Price.
(iii) Treatment of Options and Convertible Securities. In
case the Company at any time or from time to time after the date hereof
shall issue, sell, grant or assume, or shall fix a record date for the
determination of holders of any class of securities entitled to receive,
any options or convertible securities, then, and in each such case, the
maximum number of Additional Common Shares (as set forth in the instrument
relating thereto, without regard to any provisions contained therein for a
subsequent adjustment of such number) issuable upon the exercise of such
options or, in the case of convertible securities and options therefor, the
conversion or exchange of such convertible securities, shall be deemed to
be Additional Common Shares issued as of the time of such issue, sale,
grant or assumption or, in case such a record date shall have been fixed,
as of the close of business on such record date (or, if the Common Shares
trade on an ex-dividend basis, on the date prior to the commencement of
ex-dividend trading), provided that such Additional Common Shares shall not
be deemed to have been issued unless the consideration per share
(determined pursuant to Section 7(a)(v)) of such shares would be less than
the Current Market Price immediately prior to such issue, sale, grant or
assumption or immediately prior to the close of business on such record
date (or, if the Common Shares trade on an ex-dividend basis, on the date
prior to the commencement of ex-dividend trading), as the case may be, and
provided, further, that in any such case in which Additional Common Shares
are deemed to be issued,
(A) no further adjustment of the Option Share Price
shall be made upon the subsequent issue or sale of convertible securities
or Common Shares upon the exercise of such options or the conversion or
exchange of such convertible securities;
(B) if such options or convertible securities by
their terms provide, with the passage of time or otherwise, for any
increase in the consideration payable to the Company, or decrease in the
number of Additional Common Shares issuable, upon the exercise, conversion
or exchange thereof (by change of rate or otherwise), the Option Share
Price computed upon the original issue, sale, grant or assumption thereof
(or upon the occurrence of the record date, or date prior to the
commencement of ex-dividend trading, as the case may be, with respect
thereto), and any subsequent adjustments based thereon, shall, upon any
such increase or decrease becoming effective, be recomputed to reflect such
increase or decrease insofar as it affects such options, or the rights of
conversion or exchange under such convertible securities, which are
outstanding at such time;
(C) upon the expiration (or purchase by the Company
and cancellation or retirement) of any such options which shall not have
been exercised or the expiration of any rights of conversion or exchange
under any such convertible securities which (or purchase by the Company and
cancellation or retirement of any such convertible securities the rights of
conversion or exchange under which) shall not have been exercised, the
Option Share Price computed upon the original issue, sale, grant or
assumption thereof (or upon the occurrence of the record date, or date
prior to the commencement of ex-dividend trading, as the case may be, with
respect thereto), and any subsequent adjustments based thereon, shall, upon
such expiration (or such cancellation or retirement, as the case may be),
be recomputed as if:
(1) in the case of options for Common Shares or
convertible securities, the only Additional Common Shares issued or
sold were the Additional Common Shares, if any, actually issued or
sold upon the exercise of such options or the conversion or
exchange of such convertible securities and the consideration
received therefor was the consideration actually received by the
Company for the issue, sale, grant or assumption of all such
options, whether or not exercised, plus the consideration actually
received by the Company upon such exercise, or for the issue or
sale of all such convertible securities which were actually
converted or exchanged, plus the additional consideration, if any,
actually received by the Company upon such conversion or exchange,
and
(2) in the case of options for convertible
securities, only the convertible securities, if any, actually
issued or sold upon the exercise of such options were issued at the
time of the issue, sale, grant or assumption of such options, and
the consideration received by the Company for the Additional Common
Shares deemed to have then been issued was the consideration
actually received by the Company for the issue, sale, grant or
assumption of all such options, whether or not exercised, plus the
consideration deemed to have been received by the Company (pursuant
to Section 2.5) upon the issue or sale of such convertible
securities with respect to which such options were actually
exercised;
(D) no readjustment pursuant to subdivision (B) or
(C) above shall have the effect of increasing the Option Share Price by an
amount in excess of the amount of the adjustment thereof originally made in
respect of the issue, sale, grant or assumption of such options or
convertible securities; and
(E) in the case of any such options which expire by
their terms not more than 45 days after the date of issue, sale, grant or
assumption thereof, no adjustment of the Option Share Price shall be made
until the expiration or exercise of all such options, whereupon such
adjustment shall be made in the manner provided in subdivision (C) above.
(iv) Treatment of Stock Dividends, Stock Splits, etc. In
case the Company at any time or from time to time after the date hereof
shall declare or pay any dividend on the Common Shares payable in Common
Shares, or shall effect a subdivision of the outstanding Common Shares into
a greater number of Common Shares (by reclassification or otherwise than by
payment of a dividend in Common Shares), then, and in each such case,
Additional Common Shares shall be deemed to have been issued (A) in the
case of any such dividend, immediately after the close of business on the
record date for the determination of holders of any class of securities
entitled to receive such dividend, or (B) in the case of any such
subdivision, at the close of business on the day immediately prior to the
day upon which such corporate action becomes effective.
(v) Computation of Consideration. For the purposes of this
Article 7,
(A) the consideration for the issue or sale of any
Additional Common Shares shall, irrespective of the accounting treatment of
such consideration,
(1) insofar as it consists of cash, be computed at
the net amount of cash received by the Company, without deducting
any expenses paid or incurred by the Company or any commissions or
compensations paid or concessions or discounts allowed to
underwriters, dealers or others performing similar services in
connection with such issue or sale,
(2) insofar as it consists of property (including
securities) other than cash, be computed at the fair value thereof
at the time of such issue or sale, as determined in good faith by
the Board of Directors of the Company, and
(3) in case Additional Common Shares are issued or
sold together with other stock or securities or other assets of the
Company for a consideration which covers both, be the portion of
such consideration so received, computed as provided in clauses (i)
and (ii) above, allocable to such Additional Common Shares, all as
determined in good faith by the Board of Directors of the Company;
(B) Additional Common Shares deemed to have been
issued pursuant to Section 7(a)(iii), relating to options and convertible
securities, shall be deemed to have been issued for a consideration per
share determined by dividing
(1) the total amount, if any, received and receivable
by the Company as consideration for the issue, sale, grant or
assumption of the options or convertible securities in question,
plus the minimum aggregate amount of additional consideration (as
set forth in the instruments relating thereto, without regard to
any provision contained therein for a subsequent adjustment of such
consideration to protect against dilution) payable to the Company
upon the exercise in full of such options or the conversion or
exchange of such convertible securities or, in the case of options
for convertible securities, the exercise of such options for
convertible securities and the conversion or exchange of such
convertible securities, in each case computing such consideration
as provided in the foregoing subdivision (a),
by
(2) the maximum number of Common Shares (as set forth
in the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of such
number to protect against dilution) issuable upon the exercise of
such options or the conversion or exchange of such convertible
securities; and
(C) Additional Common Shares deemed to have been
issued pursuant to Section 7(a)(iv), relating to stock dividends, stock
splits, etc., shall be deemed to have been issued for no consideration.
(vi) Adjustments for Combinations, etc. In case the
outstanding Common Shares shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of Common Shares, the
Option Share Price in effect immediately prior to such combination or
consolidation shall, concurrently with the effectiveness of such
combination or consolidation, be proportionately increased.
(vii) Minimum Adjustment of Option Share Price. If the
amount of any adjustment of the Option Share Price required pursuant to
this Section 7 would be less than one percent (1%) of the Option Share
Price in effect at the time such adjustment is otherwise so required to be
made, such amount shall be carried forward and adjustment with respect
thereto made at the time of and together with any subsequent adjustment
which, together with such amount and any other amount or amounts so carried
forward, shall aggregate at least one percent (1%) of such Option Share
Price.
(b) Consolidation, Merger, etc.
(i) Adjustments for Consolidation, Merger, Sale of Assets,
Reorganization, etc. In case the Company after the date hereof (A) shall
consolidate with or merge into any other Person other than UIH China or an
Affiliate of UIH China, and shall not be the continuing or surviving
corporation of such consolidation or merger, or (B) shall permit any other
Person other than UIH China or an Affiliate of UIH China, to consolidate
with or merge into the Company and the Company shall be the continuing or
surviving Person but, in connection with such consolidation or merger, the
Common Shares shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, or (C) shall
transfer all or substantially all of its properties or assets to any other
Person other than UIH China or an Affiliate of UIH China, in a transaction
or series of transactions in connection with which the Common Shares shall
be changed into or exchanged for stock or other securities of any other
Person or cash or any other property, or (D) shall effect a capital
reorganization or reclassification of the Common Shares (other than a
capital reorganization or reclassification resulting in the issue of
Additional Common Shares for which adjustment in the Option Share Price is
provided in Section 7(a)), then, and in the case of each such transaction,
proper provision shall be made so that, upon the basis and the terms and in
the manner provided in this Agreement, the Holder of the Option, upon the
exercise thereof at any time after the consummation of such transaction,
shall be entitled to receive, in lieu of the Common Shares issuable upon
such exercise prior to such consummation, the highest amount of securities,
cash or other property to which such Holder would actually have been
entitled as a shareholder upon such consummation if such Holder had
exercised the rights represented by the Option immediately prior thereto,
subject to adjustments (subsequent to such consummation) as nearly
equivalent as possible to the adjustments provided for in Sections 7(a)(i)
through 7(a)(ii), provided that if a purchase, tender or exchange offer
shall have been made to and accepted by the holders of more than fifty
percent (50%) of the outstanding shares of Common Shares, and if UIH China
so designates in a notice given to the Company on or before the date
immediately preceding the date of the consummation of such transaction, UIH
China shall be entitled to receive the highest amount of securities, cash
or other property to which UIH China would actually have been entitled as a
shareholder if UIH China had exercised the Option prior to the expiration
of such purchase, tender or exchange offer and accepted such offer, subject
to adjustments (from and after the consummation of such purchase, tender or
exchange offer) as nearly equivalent as possible to the adjustments
provided for in Sections 7(a) through (b).
(ii) Assumption of Obligations. Notwithstanding anything
contained in this Agreement to the contrary, the Company will not effect
any of the transactions described in clauses (A) through (D) of Section
7(b)(i) unless, prior to the consummation thereof, each Person (other than
the Company) which may be required to deliver any stock, securities, cash
or property upon the exercise of the Option as provided herein shall
assume, by written instrument delivered to, and reasonably satisfactory to,
the Holder of the Option, (A) the obligations of the Company under this
Agreement (and if the Company shall survive the consummation of such
transaction, such assumption shall be in addition to, and shall not release
the Company from, any continuing obligations of the Company under this
Agreement), (B) the obligations of the Company under the Registration
Rights Agreement and (C) the obligation to deliver to such Holder such
shares of stock, securities, cash or property as, in accordance with the
foregoing provisions of this Section 7(b), such Holder may be entitled to
receive, and such Person shall have similarly delivered to such Holder an
opinion of counsel for such Person, which opinion shall be reasonably
satisfactory to such Holder, stating that the Option shall thereafter
continue in full force and effect and the terms hereof (including, without
limitation, all of the provisions of this Section 7(b)) shall be applicable
to the stock, securities, cash or property which such Person may be
required to deliver upon any exercise of the Option or the exercise of any
rights pursuant hereto.
(c) Other Dilutive Events. In case any event shall occur as to
which the provisions of Section 7(a) or Section 7(b) are not strictly
applicable but the failure to make any adjustment would not fairly protect
the purchase rights represented by the Option in accordance with the
essential intent and principles of such sections, then, in each such case,
the Company shall appoint a firm of independent certified public
accountants of recognized national standing (which may be the regular
auditors of the Company), which shall give their opinion upon the
adjustment, if any, on a basis consistent with the essential intent and
principles established in Sections 7(a) and 7(b), necessary to preserve,
without dilution, the purchase rights represented by this Option. Upon
receipt of such opinion, the Company will promptly mail a copy thereof to
the Holder of the Option and shall make the adjustments described therein.
(d) No Dilution or Impairment. The Company will not, by amendment
of its articles or certificate of incorporation or through any
consolidation, merger, reorganization, transfer of assets, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of the Option, but
will at all times in good faith assist in the carrying out of all such
terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder of the Option
against dilution or other impairment. Without limiting the generality of
the foregoing, the Company (i) will not permit the par value of any shares
of stock receivable upon the exercise of the Option to exceed the amount
payable therefor upon such exercise, (ii) will take all such action as may
be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of stock on the exercise
of the Option, and (iii) will not take any action which results in any
adjustment of the Option Share Price if the total number of Common Shares
issuable after the action upon the exercise of the Option would exceed the
total number of shares of common stock then authorized by the Company's
articles or certificate of incorporation and available for the purpose of
issue upon such exercise.
Section 8 Management Rights. For such time as UIH China
beneficially owns at least five percent (5%) of the issued and outstanding
Common Shares of the Company and is not entitled as holder of Series F
Preferred Stock to elect two (2) members of the Company's Board of
Directors (the "Applicable Period"), UIH China shall have the right to
nominate two (2) members of the Board of Directors of the Company (together
with all substitutes therefor, the "UIH China Nominees"). The Company
hereby agrees to use its best efforts to cause each of the UIH China
Nominees to be elected to the Company's Board of Director's and to hold
office until it is vacated or until such UIH China Nominee's successor is
duly appointed and qualified. During the Applicable Period, whenever any
UIH China Nominee ceases to be a member of the Board of Directors of the
Company for any reason, the Company agrees to use its best efforts to cause
such vacancy shall be filled by another nominee of UIH China who shall hold
such office until it is vacated or until such Nominee's successor is duly
appointed and qualified. During the Applicable Period, the Company hereby
agrees to use its best efforts to ensure that no UIH China Nominee will be
removed as a member of the Board of Directors of the Company without the
express written consent of UIH China. If UIH China notifies the Company of
UIH China's desire to remove any UIH China Nominee from the Board of
Directors of the Company, the Company agrees to cause a meeting of the
Company's shareholders to be held as soon as practicable thereafter, and at
such meeting the Company agrees to use its best efforts to cause the
removal of such UIH China Nominee. Upon the removal of such UIH China
Nominee, the Company shall use its best efforts to cause another UIH China
Nominee to be elected to the Company's Board of Director's and to hold
office until it is vacated or until such UIH China Nominee's successor is
duly appointed and qualified, as provided herein.
Section 9 Co-Investment Rights. In the event the Company and UIH
China enter into an agreement pursuant to which UIH China agrees not to
compete with the Company in the People's Republic of China (a "Non-Compete
Agreement"), the Company shall not, for such time as the Non- Compete
Agreement is in effect and has not been terminated, participate in any
opportunity in the Peoples' Republic of China without first complying with
the following procedures. If the Company intends to participate in any
opportunity, directly or indirectly, whether through any debt or equity
investment, the provision of services, or otherwise (such participation
referred to as the "Investment"), the Company shall first advise UIH China
of all material terms and conditions related to the Investment (the
"Investment Notice"). UIH China or one or more of its Affiliates shall have
the right to participate in the Investment together with the Company at a
level to be determined by UIH China not to exceed fifty percent (50%) to
the extent that participation by UIH China in the Investment in the manner
proposed by UIH China would not result in the Company becoming an
"investment company" under the Investment Company Act of 1940, as amended.
To exercise such right, UIH China shall provide written notice thereof (a
"Participation Notice") to the Company not later than thirty (30) days
after receipt of the Investment Notice. If a Participation Notice is
received within such thirty (30)-day period, the Company will include UIH
China in all further negotiations regarding terms and conditions of the
opportunity. Should UIH China at any time provide notice to the Company (a
"Termination Notice") that it is no longer willing to participate in the
Investment (in regard to terms and conditions, but not economic interest),
then the Company may pursue the Investment alone, provided, however, that
if any material term or condition of the Investment changes after the
Termination Notice has been delivered, the Company shall advise UIH China
of such change and UIH China may elect to continue to participate in the
Investment on the terms and conditions set forth above.
Section 10 Miscellaneous Provisions.
(a) Governing Law. This Agreement shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall be
construed in accordance with such laws.
(b) Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or by
commercial delivery service, or sent via facsimile, with confirmation of
receipt, to the parties at the following address or at such other address
for a party as shall be specified by notice hereunder:
(a) if to the Company, to:
AmTec, Inc.
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
(b) if to UIH China, to:
UIH Asia/Pacific Communications, Inc.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: President
Facsimile No.: (000) 000-0000
with a copy to:
Holme Xxxxxxx & Xxxx LLP
0000 Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
(c) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed
by each of the parties hereto and delivered to the other parties hereto, it
being understood that all parties hereto need not sign the same
counterpart.
(d) Entire Agreement. This Agreement and the documents and
instruments and other agreements specifically referred to herein or
delivered pursuant hereto, including the Exhibits and Schedules, constitute
the entire agreement among the parties hereto with respect to the Option
and supersede all prior agreements and understandings, both written and
oral, among the parties hereto with respect thereto.
(e) No Waiver. No failure or delay on the part of any party hereto
in the exercise of any right hereunder shall impair such right or be
construed to be a waiver of, or acquiescence in, any breach of any
representation, warranty or agreement herein, nor shall any single or
partial exercise of any such right preclude other or further exercise
thereof or of any other right.
(f) Indemnification. The Company hereby agrees to fully indemnify
UIH China for any loss or damage incurred by UIH China as a consequence of
the Company's failure to timely satisfy all obligations of the Company
under this Agreement. In addition, if the Company fails to perform its
obligations hereunder on or before the Closing Date, UIH China shall have
the right to elect, by providing written notice hereunder to the Company,
to require the Company to fully perform each of its obligations hereunder
including, without limitation, the issuance and delivery of the Option
Shares.
This Agreement is executed by the parties as of the date first
written above.
AMTEC, INC.
By: ___________________________________
Name: ___________________________
Title: ____________________________
UIH ASIA/PACIFIC COMMUNICATIONS, INC.
By: ___________________________________
Name: ___________________________
Title: ____________________________
EXHIBIT A
FORM OF OPTION EXERCISE NOTICE
[Date]
AMTEC, Inc.
[Address]
Gentlemen:
Reference is made to that certain Investment Agreement dated ____________,
199_ (the "Agreement"), between AMTEC, Inc., a Delaware corporation, and
UIH Asia/Pacific Communications, Inc., a Delaware corporation. All
capitalized terms used and not otherwise defined herein shall have the
meaning set forth in the Agreement. In accordance with the provisions of
Section 2 of the Agreement, we hereby exercise the Option to purchase a
total of ______ shares of the Company in accordance with and subject to the
provisions of the Agreement. The Option Shares shall be issued to UIH China
and its Affiliates as follows:
Please provide us on or before the third (3rd) Business Day prior to the
Closing Date with written instructions regarding the transfer to the
Company's account of the Purchase Price and other sums
due from us under the Agreement.
UIH CHINA HOLDINGS, INC., a Colorado
corporation
By: _________________________________
Title: _________________________
Exhibit 7.2(e)
to Agreement and Plan of Merger
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is entered into as of ________
__, 1999, by and among AMTEC, INC., a Delaware corporation (the "Company")
and UIH CHINA HOLDINGS, INC., a Colorado corporation (together with its
successors and assigns, the "Stockholder").
Recitals
A. The Company, AMTEC ACQUISITION CORPORATION, a Colorado
corporation and a wholly-owned subsidiary of the Company ("Merger Sub"),
and UIH HUNAN, INC., a Colorado corporation and a wholly-owned subsidiary
of UIH China Holdings, Inc. ("UIHH") entered into a Merger Agreement dated
December 23, 1998 (the "Merger Agreement") pursuant to which UIHH, the
Company and Merger Sub agreed to cause Merger Sub to merge with and into
UIHH, subject to the terms and conditions set forth therein.
B. The Stockholder was issued shares of Series F Convertible
Preferred Stock, par value $0.001 per share, of the Company ("Series F
Preferred Stock") pursuant to the Merger Agreement in a transaction exempt
from the registration requirements of the Securities Act of 1933, as
amended (together with any successor federal statute and the rule and
regulations promulgated thereunder, the "Securities Act"), in accordance
with Section 4(2) of the Securities Act and Regulation D thereunder. Shares
of Series F Preferred Stock are convertible into Common Stock, par value
$0.001 per share, of the Company ("Company Common Stock").
C. The parties are entering into this Agreement as a condition to
the closing under the Merger Agreement.
Agreement
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The following terms shall have the following meanings as used in
this Agreement:
1.1 "Agreement" means this Registration Rights Agreement as
amended, modified, restated and replaced from time to time.
1.2 "Company" has the meaning set forth in the opening statement of
this Agreement.
1.3 "Claim" has the meaning set forth in Section 2.5.
1.4 "Company Common Stock" has the meaning set forth in Recital B.
1.5 "Deadline" has the meaning set forth in Section 2.1(a).
1.6 "Demand Registration" has the meaning set forth in Section
2.1(a).
1.7 "Effective Period" has the meaning set forth in Section 2.1
1.8 "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations
promulgated thereunder.
1.9 "Indemnified Party" has the meaning set forth in Section 3.3.
1.10 "Indemnifying Party" has the meaning set forth in Section 3.3.
1.11 "Inspector" has the meaning set forth in Section 2.3(j).
1.12 "Losses" has the meaning set forth in Section 3.1.
1.13 "Merger Agreement" has the meaning set forth in Recital A.
1.14 "Merger Sub" has the meaning set forth in Recital A.
1.15 "Person" means any individual, corporation, partnership,
limited liability company, trust, organization, association, governmental
body or agency.
1.16 "Piggy-back Registration" has the meaning set forth in Section
2.2(a).
1.17 "Registrable Securities" means any Company Common Stock
issuable or issued upon conversion of the Series F Preferred Stock and any
securities issued or issuable with respect thereto by way of stock dividend
or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation, reclassification or other
reorganization. A Registrable Security shall cease to be a Registrable
Security when: (a) a Registration Statement with respect to the sale of
such security shall have become effective under the Securities Act and such
security shall have been disposed of in accordance with such Registration
Statement; (b) such security shall have been distributed to the public
pursuant to Rule 144 (or any successor provision) under the Securities Act;
(c) such security shall have been otherwise transferred, new certificates
for which, not bearing a legend restricting further transfer, shall have
been delivered by the Company and subsequent disposition of the security to
the public shall not require registration or qualification of such security
under the Securities Act or any similar state law then in force; or (d)
such security shall have ceased to be outstanding.
1.18 "Registration Expenses" means all expenses incurred in
connection with registrations, filings or qualifications pursuant to this
Agreement, including, without limitation, all registration, listing and
filing fees, printing expenses, messenger and delivery expenses, and fees
and disbursements of all counsel, independent certified public accountants,
underwriters (excluding underwriting discounts, commissions spreads or fees
of underwriters, selling brokers, dealer managers or similar securities
industry professionals), and other Persons retained by the Company or the
Stockholder in connection with registrations, filings or qualifications
pursuant to this Agreement.
1.19 "Registration Statement" means any registration statement or
comparable document under Section 5 of the Securities Act through which a
public sale or disposition of Registrable Securities may be registered.
1.20 "Requesting Holders" shall have the meaning set forth in
Section 2.2(a).
1.21 "SEC" means the Securities and Exchange Commission or any
other federal agency administering the Securities Act.
1.22 "Securities Act" has the meaning set forth in Recital B.
1.23 "Series F Preferred Stock" has the meaning set forth in
Recital B.
1.24 "Stockholder" has the meaning set forth in the opening
statement of this Agreement.
ARTICLE II
REGISTRATION UNDER SECURITIES ACT, ETC.
2.1 Demand Registration.
(a) Request and Filing. At any time following the date of
closing under the Merger Agreement, the Stockholder may request that the
Company file a registration statement covering the Registrable Securities
(the "Demand Registration"). Upon receipt of a request, the Company shall
prepare and file a registration statement as promptly as practicable but in
any event no later than 45 days after receipt of notice (the "Deadline");
provided, however, that the Company shall only be obligated to file and
cause to be effective two Registration Statements pursuant to this Section
2.1(a) to which the limitations of Section 2.7 do not apply. The Company
agrees to use its best efforts to cause the Registration Statement to
become effective as promptly as practicable after filing and to use its
best efforts to keep the Registration Statement continuously effective for
the period commencing on the date of effectiveness declared by the SEC and
ending on the earlier of (i) ninety (90) days from the date of
effectiveness; (ii) the date when each of the Registrable Securities ceases
to be Registrable Securities; and (iii) the date when each of the
Registrable Securities not otherwise transferred or sold pursuant to the
Registration Statement may be sold or distributed by the Stockholder in
reliance upon Rule 144 (giving effect to all conditions thereof, including,
without limitation, the volume limitations contained in Rule 144(e)) (the
"Effective Period").
(b) Registration Statement Form. The Registration Statement
under this Section 2.1 shall be on such appropriate registration form of
the SEC as shall be selected by the Company and as shall permit the
disposition of the Registrable Securities in accordance with the intended
method or methods of disposition (including an underwritten offering).
(c) Expenses. The Company shall pay all Registration
Expenses in connection with the registration contemplated by this Section
2.1, provided that the fees and expenses of counsel to the Stockholder that
are paid by the Company pursuant to this Agreement shall not exceed $50,000
per registration in connection with the Demand Registration under Section
2.1(a). The Stockholder shall pay all underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition
of the Registrable Securities pursuant to the Registration Statement.
2.2 Piggy-back Registration.
(a) Piggy-back Rights. If the Company shall propose to file
a registration statement for an offering of equity securities of the
Company, by the Company or for resale by holders of the Company's
securities other than Registrable Securities (the "Requesting Holders"),
the Company shall provide prompt written notice of such proposal, in any
event not less than 30 days before the anticipated date of the first filing
of such registration statement, to the Stockholder of its intention to do
so and of such Stockholder's rights under this Section 2.2(a). The Company
shall include such number of Registrable Securities in such registration
statement which the Company has been so requested to register by
Stockholder (a "Piggy-back Registration"), which request shall be made to
the Company within 15 days after Stockholder receives notice from the
Company of such proposed registration; provided, that (i) if, at any time
after giving written notice of its intention to register any securities and
prior to the effective date of the registration statement filed in
connection with such registration, the Company shall determine for any
reason not to register such securities, the Company may, at its election,
give written notice of such determination to Stockholder and, thereupon,
shall be relieved of its obligation to register any Registrable Securities
in connection with such registration, and (ii) if such registration
involves an underwritten offering, the Stockholder must sell all of its
Registrable Securities to the underwriters on the same terms and conditions
as apply to the Requesting Holders, with such differences, including any
with respect to indemnification and liability insurance, as may be
customary or appropriate in secondary offerings..
(b) Expenses. The Company shall pay all Registration
Expenses in connection with the registration contemplated by this Section
2.2, provided that the fees and expenses of counsel to the Stockholder that
are paid by the Company pursuant to this Agreement shall not exceed $15,000
per registration. The Stockholder shall pay all underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition
of the Registrable Securities pursuant to the Registration Statement.
(c) Right to Exercise. There shall be no limit on the number
of times Stockholder shall be allowed to exercise its rights under this
Section 2.2.
(d) Priority in Underwritten Primary Registration. If a
Piggy-back Registration is an underwritten primary registration on behalf
of the Company, and the managing underwriters advise the Company in writing
that in their opinion the total number of shares of Common Stock requested
to be included in such registration exceeds the number of shares of Common
Stock that can be sold in the offering, the Company will include in such
registration:
(i) first, all shares of Common Stock the Company
proposes to sell; and
(ii) second, the Registrable Securities and such other
shares of Common Stock requested to be included in such
registration in excess of the number of shares of Common Stock the
Company proposes to sell which, in the opinion of such managing
underwriters, can be sold (allocated pro rata among the holders of
Registrable Securities and other shares of Common Stock on the
basis of the number of shares of Common Stock requested to be
included therein by such holders).
(e) Priority of Underwritten Secondary Registration. If a
Piggy-back Registration is an underwritten secondary registration on behalf
of holders of Common Stock and the managing underwriters advise the Company
in writing that in their opinion the number of shares of Common Stock
requested to be included in such registration exceeds the number of shares
of Common Stock that can be sold in such offering, the Company will include
in such registration:
(i) first, any shares of Common Stock with priority
under any registration rights agreement disclosed in writing to the
Stockholder prior to December 18, 1998 that are requested to be
included in such registration by the holder of such shares;
(ii) second, the Registrable Securities requested to
be included in such registration by the holders thereof; and
(iii) third, up to the full number of such other
shares of Common Stock requested to be included in such
registration by the securityholders initiating such registration
propose to sell which, in the opinion of the underwriters, can be
sold in excess of the Registrable Securities.
2.3 Registration Procedures -- Company Obligations. In connection
with the Compa ny's obligations to effect the registration of any
Registrable Securities under the Securities Act as provided in this
Agreement, the Company shall, as expeditiously as possible:
(a) prepare and file with the SEC, within any applicable
time periods specified in this Section 2, the requisite registration
statement to effect such registration and thereafter use its best efforts
to cause such registration statement to become and remain effective in
accordance with this Section 2; provided, however, that before filing such
registration statement or any amendments thereto, the Company shall furnish
to the counsel selected by the Stockholder copies of all such documents
proposed to be filed, which documents shall be subject to the review of
such counsel;
(b) prepare and file with the SEC such amendments and
supplements to such registration statements and prospectuses used in
connection therewith as may be necessary to keep such registration
statements effective for the applicable periods specified in this Section 2
and to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statements
during such applicable periods;
(c) furnish, without charge, to the Stockholder and each
underwriter, if any, of the securities being sold by the Stockholder such
number of conformed copies of such registration statement and of each such
amendment and supplement thereto (in each case including all exhibits),
such number of copies of the prospectus contained in such registration
statement (including each preliminary prospectus and any summary
prospectus) and any other prospectus filed under Rule 424 under the
Securities Act, in conformity with the requirements of the Securities Act,
and such other documents, as the Stockholder and underwriter, if any, may
reasonably request in order to facilitate the public sale or other
disposition of the Registrable Securities owned by the Stockholder; the
Company consents to the use of the prospectus or any amendment or
supplement thereto by the Stockholder and underwriter in connection with
the offering and sale of Registrable Securities covered by such prospectus
and any amendment or supplement thereto (subject to the limitations set
forth in the last paragraph of Section 2.4(c));
(d) use its best efforts to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities laws or blue sky laws of such
jurisdictions as the Stockholder and any underwriter of the securities
being sold by the Stockholder shall reasonably request, to keep such
registrations or qualifications in effect for so long as such registration
statement remains in effect, and take any other action which may be
reasonably necessary or advisable to enable the Stockholder and
underwriter, if any, to consummate the disposition in such jurisdictions of
the securities owned by the Stockholder, except that the Company shall not
for any such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction wherein it would not but for the
require ments of this subdivision (d) be obligated to be so qualified, to
subject itself to taxation in any such jurisdiction or to consent to
general service of process in any such jurisdiction;
(e) use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to
enable the Stockholder to consummate the disposition of such
Registrable Securities;
(f) furnish the Stockholder and the underwriters, if any,
with:
(i) an opinion of counsel for the Company, dated the
effective date of such registration statement (or, if such
registration includes an underwritten public offer ing, an opinion
dated the date of the closing under the underwriting agreement),
reason ably satisfactory in form and substance to the Stockholder,
and
(ii) a "comfort" letter (or, in the case of any such
Person which does not satisfy the conditions for receipt of a
"comfort" letter specified in Statement on Auditing Standards No.
72, an "agreed upon procedures" letter), dated the effective date
of such registration statement (and, if such registration includes
an underwritten public offering, a letter of like kind dated the
date of the closing under the underwriting agreement), signed by
the independent public accountants who have certified the Company's
financial state ments included in such registration statement,
each of (i) and (ii) covering substantially the same matters with respect
to such registration statement (and the prospectus included therein) and,
in the case of the accountants' letter, with respect to events subsequent
to the date of such financial statements, as are customarily covered in
opinions of issuer's counsel and in accountants' letters delivered to the
underwriters in under written public offerings of securities (with, in the
case of an "agreed upon procedures" letter, such modifications or deletions
as may be required under Statement on Auditing Standards No. 35) and in the
case of the legal opinion, such other legal matters, as the Stockholder (or
the underwriters, if any) may reasonably request;
(g) notify the Stockholder and the managing underwriter or
underwriters, if any, promptly and confirm such advice in writing promptly
thereafter:
(i) when the Registration Statement, the prospectus
or any prospectus supplement related thereto or post-effective
amendment to the Registration Statement has been filed, and, with
respect to the Registration Statement or any post-effective
amendment thereto, when the same has become effective;
(ii) of any request by the SEC for amendments or
supplements to the Registration Statement or the prospectus or for
additional information;
(iii) of the issuance by the SEC of any stop order
suspending the effec tiveness of the Registration Statement or the
initiation of any proceedings by any Person for that purpose;
(iv) if at any time the representations and
warranties of the Company made as contemplated by Section 2.6(a)
below cease to be true and correct;
(v) of the receipt by the Company of any notification
with respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue sky
laws of any jurisdiction or the initiation or threat of any
proceeding for such purpose; and
(h) notify the Stockholder at any time when a prospectus
relating to a Registration Statement covering Registerable Securities is
required to be delivered under the Securities Act, upon the Company's
discovery that, or upon the happening of any event as a result of which,
the prospectus included in such Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein in the light of the circumstances under which they were
made not misleading, and at the request of the Stockholder promptly prepare
and furnish to the Stockholder and each underwriter, if any, a reasonable
number of copies of a supplement to or an amendment of such prospectus as
may be necessary so that, as thereafter delivered to the purchasers of such
securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein in the light of the
circumstances under which they were made not misleading; provided, however,
that the Company may delay effecting or causing to be effected a supplement
or post-effective amendment to the Registration Statement or the related
prospectus, for a period not to exceed 90 days in any 365-day period;
provided, further, that the Company shall use all reasonable efforts to
minimize the duration and frequency of any delays hereunder and shall
notify the Stockholder in writing both of its intention to effect such
delay and of the date on which such supplement or post-effective amendment
has been filed with the SEC or declared effective, as the case may be;
(i) use its best efforts to obtain the withdrawal of any
order suspending the effectiveness of the Registration Statement at the
earliest possible moment;
(j) subject to entering into confidentiality arrangements in
form and substance reasonably satisfactory to the Company, make available
for inspection by a representative or representatives of the Stockholder,
any underwriter participating in any disposition pursuant to the
Registration Statement and any attorney or accountant retained by the
Stockholder or under writer (each, an "Inspector"), all financial and other
records, pertinent corporate documents and properties of the Company, and
cause the Company's officers, directors and employees to supply all
information reasonably requested by any such Inspector in connection with
such registration in order to permit a reasonable investigation within the
meaning of Section 11 of the Securities Act;
(k) use its best efforts to list all Registrable Securities
covered by such registration statement on any securities exchange on which
any of the securities of the same class as the Registrable Securities are
then listed;
(l) provide a transfer agent and registrar for all
Registrable Securities covered by such registration statement not later
than the effective date of such registration statement;
(m) cooperate with the Stockholder and the underwriter, if
any, to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any
restrictive legends; and enable such Registrable Securities to be in such
denomi nations and registered in such names as the Stockholder or the
underwriter, if any, may reason ably request at least three business days
prior to any sale of Registrable Securities; and
(n) otherwise use all best efforts to comply with all
applicable rules and regu lations of the SEC, and make available to the
Stockholder as soon as reasonably practicable, an earnings statement
covering the period of at least 12 months, but not more than 18 months,
beginning with the first full calendar month after the effective date of
such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 promulgated
thereunder.
2.4 Additional Registration Procedures.
(a) As a condition to the registration by the Company of
Registrable Securities, the Company may require the Stockholder to furnish
the Company such information regarding the Stockholder and the distribution
of such securities as the Company may from time to time reasonably request
in writing.
(b) The Company shall not file any Registration Statement or
amendment thereto or any prospectus or any supplement thereto (including
such documents incorporated by reference and proposed to be filed after the
initial filing of the Registration Statement) to which the Stockholder or
the underwriter or underwriters, if any, shall reasonably object, provided
that the Company may file such document in a form required by law or upon
the advice of its counsel.
(c) The Stockholder agrees that, upon receipt of any notice
from the Company of the occurrence of any event of the kind described in
subdivision (h) of Section 2.3, the Stockholder shall forthwith discontinue
the Stockholder's disposition of Registrable Securities pursuant to the
Registration Statement relating to such Registrable Securities until the
Stockholder's receipt of the copies of the supplemented or amended
prospectus contemplated by subdivision (h) of Section 2.3 and, if so
directed by the Company, shall deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in the
Stockholder's possession of the prospectus relating to such Registrable
Securities current at the time of receipt of such notice. In the event the
Company shall give any such notice, the period of time for which the
Company shall be required to keep the applicable registration statement
effective shall be ex tended by the length of the period from and including
the date when the Stockholder shall have received such notice to the date
on which the Stockholder has received the copies of the supplemented or
amended prospectus contemplated by paragraph (h) of Section 2.3. Each
holder of Registrable Securities agrees that it will comply at all times
with the requirements of Rule 10b-6.
2.5 Damages. If the Company fails to file the Registration
Statement on or before the Deadline or fails to use best efforts to cause
the Registration Statement to become effective, or if, after the
Registration Statement has been declared effective by the SEC, sales of the
Registrable Securities cannot be made pursuant to the Registration
Statement by reason of a stop order or the Company's failure to update the
Registration Statement or for any other reason outside the control of the
Stockholder, and by reason of any such failure to meet the Deadline or to
cause the Registration Statement to be effective or usable, Stockholder
suffers loss or damage, the provisions of this Agreement shall continue to
remain in effect and the Company shall indemnify and hold harmless
Stockholder for the monetary equivalent of any such loss or damage (the
"Claim"). The Company shall pay each Claim in cash upon receipt of a
written notice from Stockholder demanding payment of the Claim.
2.6 Underwritten Offerings.
(a) Requested Underwritten Offerings. If the Stockholder
elects to effect an underwritten offering pursuant to Section 2.1(a), the
managing underwriter or underwriters for such underwritten offering shall
be selected by the Stockholder and shall be reasonably accept able to the
Company. The underwriters selected by the Stockholder shall be deemed to be
reasonably satisfactory to the Company unless the Company sends a written
notice of objection to the Stockholder within 10 days of receipt of written
notice from the Stockholder stating the identity of the managing
underwriter or underwriters the Stockholder proposes to select. If re
quested by the underwriters for any such underwritten offering, the Company
shall enter into an underwriting agreement with such underwriters for such
offering, such agreement to contain such representations and warranties by
the Company and such other terms as are generally prevailing in agreements
of this type, including, without limitation, indemnities. The Stockholder
shall cooperate with the Company in the negotiation of the underwriting
agreement. The Stockholder shall be a party to any such underwriting
agreement and the Stockholder may, at its option, re quire that any or all
of the representations and warranties by, and the other agreements on the
part of, the Company to and for the benefit of such underwriters shall also
be made to and for the benefit of the Stockholder and that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of the
Stockholder. The Stockholder shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations and warranties or agreements
regarding the Stockholder, the Stockholder's Registrable Securities and the
Stockholder's intended method of distribution and any other representation
required by law or by the underwriters for such underwritten offering.
(b) Priority in Requested Underwritten Offering. Subject to
Section 2.7, if the Stockholder elects to effect an underwritten offering
pursuant to Section 2.1(a) and, in connection therewith, the managing
underwriter advises the Stockholder and the Company in writing that, in its
opinion, the number of securities requested to be included in such
underwritten offering (including securities of the Company which are not
Registrable Securities) exceeds the number which can be sold in such
offering within a price range acceptable to the Stockholder be included in
such offering, the Company shall include in such offering, to the extent of
the number which the Company is so advised can be sold in such offering,
(i) first, Registrable Secu rities requested to be included in such
offering by the Stockholder, and (ii) second, if and only if all
Registrable Securities requested to be included in such underwritten
offering by the Stockholder thereof are so included, other securities of
the Company requested to be included in such offering by the holders
thereof, pro rata among such holders requesting inclusion in such offering
on the basis of the number of such securities requested to be included by
such holders.
(c) Holdback Agreement.
(i) Except to the extent required by any agreement in
existence as of the date of this Agreement, the Company agrees not to
effect any public sale or distribution of or otherwise dispose of its
equity securities or securities convertible into or exchangeable or exer
cisable for any of such securities during the seven (7) days prior to the
date any underwritten registration pursuant to Section 2.1(a) has become
effective and during the period ending on the earlier of (A) ninety (90)
days after any underwritten registration pursuant to Section 2.1(a) has
become effective, (B) the day on which the underwriting syndicate of such
offering shall have been disbanded, and (C) such date as the Company, the
managing underwriter and the Stockholder shall otherwise agree, except as
part of such underwritten registration and except in connection with a
stock option plan, stock purchase plan, managing directors' plan, savings
or similar plan, or an acquisition of a business, merger or exchange of
stock for stock.
(ii) If (A) during the Effective Period, the Company
shall file a registration statement (other than in connection with the
registration of securities issuable pursuant to an employee stock option,
stock purchase or similar plan or pursuant to a merger, exchange offer or a
transaction of the type specified in Rule 145(a) under the Securities Act)
with respect to its Common Stock and Stockholder shall not have exercised
its rights under Section 2.2 with respect to the Registration Statement and
(B) with reasonable prior notice, the Company (in the case of a
non-underwritten offering by the Company pursuant to such registration
statement) advises the Stockholder in writing that a public sale or
distribution of the Registrable Securities would have a material adverse
impact on such offering or the managing underwriter or underwriters (in the
case of an underwritten offering by the Company pursuant to such
registration statement) advises the Company in writing (in which case the
Company shall notify the Stockholder) that a public sale or distribution of
Registrable Securities would have a material adverse impact on such
offering, then the Stockholder shall, to the extent not inconsistent with
applicable law, refrain from effecting any public sale or distribution of
Registrable Securities during the seven (7)-day period prior to, and during
the ninety (90)-day period beginning on, the effective date of such
registration statement.
2.7 Certain Limitations and Obligations. If the Company is unable
to honor the Stockholder's priority in any requested underwritten offering
as specified in Section 2.6(b) because of conflicting priorities with any
registration rights agreement disclosed in writing to the Stockholder prior
to December 18, 1998, then the Company shall conduct an underwritten
primary offering in an amount and within the periods specified for a Demand
Registration and, to the extent requested by the Stockholder (but not
exceeding the amount that the managing underwriter advises the Company may
be sold in a primary offering by the Company), the Company upon the closing
of such primary offering shall purchase from the Stockholder for cash the
number of shares or units of Registrable Securities that the Stockholder
requested be included in the underwritten offering but were not. Closing
shall occur simultaneously with the closing of such offering and the amount
to be paid by the Company for each share or other unit of Registrable
Securities pursuant to this Section 2.7 shall be equal to the lesser of (i)
the gross proceeds per share or unit of Registrable Securities received by
the Company or other selling stockholder (before underwriting discounts and
commissions) in such underwriting and (ii) such other amount as the
Stockholder and the Company may agree. The Stockholder shall be entitled to
exercise all rights granted to it under Section 2.6(a), including selecting
the managing underwriter and other rights relative to the manner in which
the offering is conducted, even though it may not be able to sell any
Registrable Securities in the offering because of conflicting priorities.
No demand registration to which the first sentence of this Section 2.7
applies shall count as a registration to which the Stockholder is entitled
under Section 2.1(a).
ARTICLE III
INDEMNIFICATION
3.1 Indemnification by the Company. The Company will indemnify and
hold harmless, to the extent permitted by law, the Stockholder and, if
applicable, the officers and directors of the Stockholder, and each Person
who controls the Stockholder (within the meaning of the Securities Act or
the Exchange Act) from and against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand, injunction, judgment,
order, decree, ruling, damage, dues, penalty, fines, costs, amounts paid in
settlement, liabilities, obligations, losses, expenses and fees, including
court costs and attorneys' fees and expenses (collectively, "Losses") that
the Stockholder and, if applicable, the officers and directors of the
Stockholder, and each Person who controls Stockholder may suffer through
and after the date of the claim for indemnification caused by or arising
out of any untrue or alleged untrue statement of material fact contained in
any Registration Statement, prospectus, preliminary prospectus, or any
amendment or supplement to any of the foregoing, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of a prospectus or a
preliminary prospectus, in light of the circumstances then existing) not
misleading, except insofar as the same are caused by or contained in any
information furnished in writing to the Company by the Stockholder
expressly for use therein or by the Stockholder's failure to comply with
any legal requirement applicable to the Stockholder and not contractually
assumed by the Company to deliver a copy of the Registration Statement or
prospectus or any amendments or supplements thereto after the Company has
furnished Stockholder with a sufficient number of copies of the same. In
connection with an underwritten offering, the Company shall indemnify the
underwriters, their officers and directors, and each Person who controls
the underwriters (within the meaning of the Securities Act or the Exchange
Act) to the extent customary. Notwithstanding the foregoing provisions of
this Section 3.1, the Company will not be liable to the Stockholder, any
Person who participates as an underwriter in the offering or sale of
Registrable Securities or any other Person, if any, who controls the
Stockholder or underwriter (within the meaning of the Securities Act),
under the indemnity agreement in this Section for any such Losses or
expense that arises out of the Stockholder's or other Person's failure to
send or give a copy of the final Prospectus to the Person asserting an
untrue statement or alleged untrue statement or omission or alleged
omission at or prior to the written confirmation of the sale of the
Registrable Securities to such Person if such statement or omission was
corrected in such final Prospectus and the Company has previously furnished
copies thereof in accordance with this Agreement.
3.2 Indemnification by Stockholder. In connection with any
registration in which the Stockholder is participating, the Stockholder
will indemnify and hold harmless, to the extent permitted by law, the
Company, its directors and officers and each Person who controls the
Company (within the meaning of the Securities Act or the Exchange Act) from
all Losses that the Company, its directors and officers and each Person who
controls the Company may suffer through and after the date of the claim for
indemnification caused by or arising out of any untrue or alleged untrue
statement of material fact contained in any Registration Statement,
prospectus, preliminary prospectus, or any amendment or supplement to any
of the foregoing, any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading (in the case of a prospectus or
preliminary prospectus in light of circumstances then existing), but only
to the extent that the same are caused by or contained in any information
furnished in writing to the Company by the Stockholder expressly for use
therein or by the Stockholder's failure to comply with any legal
requirement applicable to the Stockholder and not contractually assumed by
the Company to deliver a copy of the Registration Statement or prospectus
or any amendments or supplements thereto after the Company has furnished
the Stockholder with a sufficient number of copies of the same.
3.3 Indemnification Procedure. If any Person has a claim for Losses
hereunder (an "Indemnified Party"), the Indemnified Party will: (a) notify
the party or parties hereto from which it is entitled to make such claim
(individually, an "Indemnifying Party" and, together, the "Indemnifying
Parties") of such claim, specifying the nature of the Losses and the amount
or estimated amount thereof if feasible, and (b) unless in the Indemnified
Party's reasonable judgment (based on written advice of counsel) a conflict
of interest between the Indemnified Party and the Indemnifying Parties may
exist with respect to the matter giving rise to such claim, permit the
Indemnifying Party to assume and thereafter conduct the defense of the
matter with counsel of the Indemnifying Party's choice reasonably
satisfactory to the Indemnified Party. If the defense is so assumed, the
Indemnifying Party will not be subject to any liability for any settlement
made with respect to such claim by the Indemnified Party without its
consent, which will not be unreasonably withheld. An Indemnifying Party who
is not entitled to or elects not to assume the defense of a claim, will not
be obligated to pay the fees and expenses of more than one counsel for all
parties it indemnifies with respect to such claim, unless in the reasonable
judgment of any Indemnified Party (based on written advice of counsel) a
conflict of interest may exist between such Indemnified Party and any other
Indemnified Parties with respect to such claim.
ARTICLE IV
GENERAL PROVISIONS
4.1 Remedies. Any Person having rights under this Agreement will be
entitled to enforce them specifically, to recover damages caused by reason
of any breach of any provision of this Agreement, and to exercise all other
rights granted by law.
4.2 Successors and Assigns. This Agreement will bind and inure to
the benefit of the respective successors and assigns of the parties hereto,
whether or not so expressed.
4.3 Amendments; Modifications. This Agreement may be amended or
modified in writing by the Company and Stockholder at the time of such
amendment or modification.
4.4 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or by
commercial delivery service, or mailed by registered or certified mail,
return receipt requested, or sent via facsimile, with confirmation of
receipt, to the parties at the following address or at such other address
for a party as shall be specified by notice hereunder:
(a) if to the Company, to:
AmTec, Inc.
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
(b) if to Stockholder, to:
UIH China Holdings, Inc.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
Facsimile No.: (000) 000-0000
with a copy to:
Holme Xxxxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
4.5 Entire Agreement. This Agreement and the documents and
instruments and other agreements specifically referred to herein or
delivered pursuant hereto constitute the entire agreement among the parties
hereto with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the parties
hereto with respect to the subject matter hereof.
4.6 Severability. In the event that any provision of this
Agreement, or the application thereof, becomes or is declared by a court of
competent jurisdiction to be illegal, void or unenforceable, the remainder
of this Agreement will continue in full force and effect and the
application of such provision to other persons or circumstances will be
interpreted so as reasonably to effect the intent of the parties hereto.
The parties hereto further agree to replace such void or unenforceable
provision of this Agreement with a valid and enforceable provision that
will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.
4.7 Remedies Cumulative; No Waiver. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will
be deemed cumulative with and not exclusive of any other remedy conferred
hereby, or by law or equity upon such party, and the exercise by a party of
any one remedy will not preclude the exercise of any other remedy. No
failure or delay on the part of any party hereto in the exercise of any
right hereunder shall impair such right or be construed to be a waiver of,
or acquiescence in, any breach of any representation, warranty or agreement
herein, nor shall any single or partial exercise of any such right preclude
other or further exercise thereof or of any other right.
4.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware (without
regard to the principles of conflicts of law thereof).
4.9 Interpretation. When a reference is made in this Agreement to
Articles, Recitals or Sections, such reference shall be to an Article,
Recital or Section to this Agreement unless otherwise indicated. The words
"include," "includes" and "including" when used herein shall be deemed in
each case to be followed by the words "without limitation." The phrase
"made available" in this Agreement shall mean that the information referred
to has been made available if requested by the party hereto to whom such
information is to be made available. The table of contents and Article and
Section headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. In this Agreement, any reference to a party's "knowledge" means
such party's actual knowledge after due and diligent inquiry of officers,
directors and other employees of such party reasonably believed to have
knowledge of such matters. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms.
4.10 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed
by each of the parties hereto and delivered to the other parties hereto, it
being understood that all parties hereto need not sign the same
counterpart.
SIGNATURE PAGE--REGISTRATION RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have duly executed this
Registration Rights Agreement as of the date first written above.
Company:
AMTEC, INC., a Delaware corporation
By: __________________________________
Stockholder:
UIH CHINA HOLDINGS, INC.
a Colorado corporation
By: __________________________________
Exhibit 3.1(a)(i)
to Agreement and Plan of Merger
AMTEC, INC.
CERTIFICATE OF DESIGNATIONS
-----------------
SETTING FORTH A COPY OF A RESOLUTION
CREATING AND AUTHORIZING THE ISSUANCE
OF A SERIES OF PREFERRED STOCK DESIGNATED AS
"CONVERTIBLE PARTICIPATING PREFERRED STOCK, SERIES F"
ADOPTED BY THE BOARD OF DIRECTORS OF AMTEC, INC.
-----------------
The undersigned, [Chairman of the Board and Chief Executive
Officer] of AMTEC, INC., a Delaware corporation (the "Company"), HEREBY
CERTIFIES that the Board of Directors of the Company on ________ __, 1998,
acting pursuant to Section 151(g) of the General Corporation Law of the
State of Delaware, duly adopted the following resolutions creating a new
series of the Company's Preferred Stock:
"BE IT RESOLVED, that pursuant to authority expressly granted by
the provisions of Section 4 of the Certificate of Incorporation of the
Company, the Board of Directors hereby creates and authorizes the issuance
of a new series of the Company's Preferred Stock, par value $0.001 per
share ("Preferred Stock"), and hereby fixes the powers, designations,
voting powers, rights on liquidation, conversion rights and other
preferences and relative, participating, optional or other special rights
and the qualifications, limitations or restrictions of the shares of such
series (in addition to any powers, designations, preferences and relative,
participating, optional or other special rights and the qualifications,
limitations or restrictions thereof set forth in the Certificate of
Incorporation that are applicable to each series of Preferred Stock) as
follows:
1. Designation; Number of Shares. The designation of the series of
Preferred Stock, par value $0.001 per share, of the Company created hereby
shall be "Convertible Participating Preferred Stock, Series F" ("Series F
Preferred Stock"). The authorized number of shares of Series F Preferred
Stock shall be ________.(1) Each share of Series F Preferred Stock shall
have a stated value of _________(2) ("Stated Value"). Any shares of Series
F Preferred Stock converted or otherwise acquired by the Company shall be
retired, shall not be reissued as shares of Series F Preferred Stock and
shall resume the status of authorized and unissued shares of Preferred
Stock, without designation as to series, until such shares are once more
designated as part of a particular series of Preferred Stock by the Board
of Directors.
--------------
1 The number of shares of Preferred Stock issuable as specified in
the Merger Agreement.
2 $1,250 if 9,600 shares of Preferred Stock are issued. If more than
9,600 shares of Preferred Stock are issued, the Stated Value would be
reduced to an amount equal to $1,250 multiplied by a fraction the numerator
of which is 9,600 and the denominator of which is the number of shares of
Preferred Stock issued.
2. Certain Definitions. Unless the context otherwise requires, the
terms defined in this Section 2 shall have, for all purposes of this
Certificate of Designations, the meanings herein specified:
"Board of Directors" shall mean the Board of Directors of
the Company, and, unless the context indicates otherwise, shall also mean,
to the extent permitted by law, any committee thereof authorized, with
respect to any particular matter, to exercise the powers of the Board of
Directors of the Company with respect to such matter.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in The City of New York, New
York are not required to be open.
"Capital Stock" shall mean any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents
of or interests in (however designated) corporate stock.
"Closing Price" of a share of Common Stock or of a share of
any other class or series of Capital Stock of the Company into which the
Series F Preferred Stock may hereafter become convertible pursuant to
Section 4, on any day shall mean the last reported per share sale price
(or, if no sale price is reported, the average of the high and low bid
prices) of the Common Stock on the American Stock Exchange, or such other
exchange or market on which the Capital Stock of the Company is traded, as
the case may be.
"Common Stock" shall mean the shares of Common Stock of
AmTec, Inc., $0.001 par value.
"Conversion Date" of a share of Series F Preferred Stock
shall mean the date on which the requirements for conversion of such share
set forth in Section 4(b) of this Certificate of Designations have been
satisfied by the holder thereof.
"Conversion Rate" shall mean the kind and amount of
securities, assets or other property that as of any date are issuable or
deliverable upon conversion of a share of Series F Preferred Stock. The
Conversion Rate of a share of Series F Preferred Stock shall initially be
1,000 shares of Common Stock for each share of Series F Preferred Stock,
subject to adjustment as set forth in Section 4 of this Certificate of
Designations. In the event that pursuant to Section 4 the Series F
Preferred Stock becomes convertible into more than one class or series of
Capital Stock of the Company, the term Conversion Rate, when used with
respect to any such class or series, shall mean the number or fraction of
shares or other units of such Capital Stock that as of any date would be
issued upon conversion of a share of Series F Preferred Stock.
"Converted Basis" shall mean, at any time and with respect
to a share or shares of the Series F Preferred Stock, the number of shares
of Common Stock into which such share or shares of Series F Preferred Stock
may then be converted.
"Convertible Securities" shall mean any or all options,
warrants, securities and rights which are convertible into or exercisable
or exchangeable for Common Stock at the option of the holder thereof, or
which otherwise entitle the holder thereof to subscribe for, purchase or
otherwise acquire Common Stock.
"Current Market Price," on the Determination Date for any
issuance of rights, warrants or options or any distribution or on the
Issuance Date in respect of which the Current Market Price is being
calculated, shall mean the average of the daily Closing Prices of the
Common Stock for the shortest of: (i) the period of 30 consecutive trading
days commencing 45 trading days before such Determination Date or Issuance
Date, as the case may be, or (ii) the period commencing on the date next
succeeding the first public announcement of the issuance of rights,
warrants or options or the distribution in respect of which the Current
Market Price is being calculated and ending on the last full trading day
before such Determination Date or Issuance Date.
"Determination Date" for any issuance of rights, warrants or
options or any distribution to which Section 4(d)(ii) applies shall mean
the record date for the determination of stockholders entitled to receive
the rights, warrants or options or the distribution to which such
Section applies.
"Excluded Issuances" shall mean any issuances of Common
Stock pursuant to (A) employee stock option or purchase plans approved by
the stockholders of the Company, (B) an underwritten public offering of
Common Stock or Convertible Securities or (C) the exercise of Convertible
Securities that were outstanding on July 27, 1998 (other than the Series E
Preferred Stock as to which adjustments are specified in Section 4(e)).
"Holder" shall mean the holder of the Issued Shares.
"Issue Date" shall mean the date on which shares of Series F
Preferred Stock are first issued.
"Issuance Date" shall have the meaning set forth in Section
4(d)(i).
"Issued Shares" shall mean the number of shares of Series F
Preferred Stock issued by the Company.
"Junior Stock" shall mean (i) the Common Stock, (ii) any
other class or series of Capital Stock, whether now existing or hereafter
created, of the Company, other than (A) the Series E Preferred Stock, (B)
any class or series of Parity Stock (except to the extent provided under
clause (iii) hereof) and (C) any class or series of Senior Stock, and (iii)
any class or series of Parity Stock to the extent that it ranks junior to
the Series F Preferred Stock as to dividend rights, rights of redemption or
rights on liquidation, as the case may be. For purposes of clause (iii)
above, a class or series of Parity Stock shall rank junior to the Series F
Preferred Stock as to dividend rights, rights of redemption or rights on
liquidation if the holders of shares of Series F Preferred Stock shall be
entitled to dividend payments, payments on redemption or payments of
amounts distributable upon dissolution, liquidation or winding up of the
Company, as the case may be, in preference or priority to the holders of
shares of such class or series of Parity Stock.
"Liquidation Preference" measured per share of the Series F
Preferred Stock as of any date in question (the "Relevant Date") shall mean
an amount equal to the sum of (a) the Stated Value of such share, plus (b)
an amount equal to all unpaid dividends or other distributions payable on
the Series F Preferred Stock pursuant to Section 5, whether or not such
unpaid dividends or other distributions have been declared or there are any
unrestricted funds of the Company legally available therefor. In connection
with the determination of the Liquidation Preference of a share of Series F
Preferred Stock upon liquidation, dissolution or winding up of the Company,
the Relevant Date shall be the applicable date of distribution of amounts
payable to stockholders in connection with any such liquidation,
dissolution or winding up.
"Officers' Certificate" shall mean a certificate signed by
the Chairman of the Board, the President or any Senior Vice President of
the Company and by the Treasurer or an Assistant Treasurer of the Company.
"Parity Stock" shall mean any class or series of Capital
Stock, whether now existing or hereafter created, of the Company ranking on
a parity basis with the Series F Preferred Stock as to dividend rights,
rights of redemption or rights on liquidation. Capital Stock of any class
or series, whether now existing or hereafter created, shall rank on a
parity as to dividend rights, rights of redemption or rights on liquidation
with the Series F Preferred Stock, whether or not the dividend rates,
dividend payment dates, redemption or liquidation prices per share or
sinking fund or mandatory redemption provisions, if any, are different from
those of the Series F Preferred Stock, if the holders of shares of such
class or series shall be entitled to dividend payments, payments on
redemption or payments of amounts distributable upon dissolution,
liquidation or winding up of the Company, as the case may be, in proportion
to their respective accumulated and accrued and unpaid dividends,
redemption prices or liquidations prices, respectively, without preference
or priority, one over the other, as between the holders of shares of such
class or series and the holders of Series F Preferred Stock. No class or
series of Capital Stock that ranks junior to the Series F Preferred Stock
as to rights on liquidation shall rank or be deemed to rank on a parity
basis with the Series F Preferred Stock as to dividend rights or rights of
redemption, unless the instrument creating or evidencing such class or
series of Capital Stock otherwise expressly so provides. The Series E
Preferred Stock ranks on a parity basis with the Series F Preferred Stock
as to dividend rights, rights of redemption and rights on liquidation and
constitutes "Parity Stock" for purposes of this Certificate of
Designations.
"Person" shall mean any individual, corporation,
partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated organization, government or agency
or political subdivision thereof, or other entity, whether acting in an
individual, fiduciary or other capacity.
"Senior Stock" shall mean any class or series of Capital
Stock of the Company hereafter created ranking prior to the Series F
Preferred Stock as to dividend rights, rights of redemption or rights on
liquidation. Capital Stock of any class or series shall rank prior to the
Series F Preferred Stock as to dividend rights, rights of redemption or
rights on liquidation if the holders of shares of such class or series
shall be entitled to dividend payments, payments on redemption or payments
of amounts distributable upon dissolution, liquidation or winding up of the
Company, as the case may be, in preference or priority to the holders of
shares of Series F Preferred Stock. No class or series of Capital Stock
that ranks on a parity basis with or junior to the Series F Preferred Stock
as to rights on liquidation shall rank or be deemed to rank prior to the
Series F Preferred Stock as to dividend rights or rights of redemption,
notwithstanding that the dividend rate, dividend payment dates, sinking
fund provisions, if any, or mandatory redemption provisions thereof are
different from those of the Series F Preferred Stock, unless the instrument
creating or evidencing such class or series of Capital Stock otherwise
expressly so provides.
"Series E Preferred Stock" shall mean the Company's Series E
Convertible Preferred Stock, par value $.001 per share.
"Stated Value" of a share of Series F Preferred Stock shall
have the meaning set forth in Section 1 of this Certificate of
Designations.
"Subsidiary" shall mean (i) a corporation (other than the
Company) a majority of the Capital Stock of which, having voting power
under ordinary circumstances to elect directors, is at the time, directly
or indirectly, owned by the Company and/or one or more Subsidiaries of the
Company and (ii) any other Person (other than a corporation) in which the
Company and/or one or more Subsidiaries of the Company, directly or
indirectly, has (x) a majority ownership interest and (y) the power to
elect or direct the election of a majority of the members of the governing
body of such entity.
3. Distributions Upon Liquidation, Dissolution or Winding Up. In
the event of any liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, the holders of Series F Preferred Stock
shall be entitled to receive from the assets of the Company available for
distribution to stockholders, before any payment or distribution shall be
made to the holders of any Junior Stock, an amount in cash (or, at the
election of the Company, property at its fair market value, as determined
by the Board of Directors in good faith) per share, equal to the
Liquidation Preference of a share of Series F Preferred Stock as of the
date of payment or distribution. If, upon distribution of the Company's
assets in liquidation, dissolution or winding up, the assets of the Company
to be distributed among the holders of the Series F Preferred Stock and
other holders of Parity Stock shall be insufficient to permit payment in
full to such holders of the respective preferential amounts to which they
are entitled, then the entire assets of the Company to be distributed to
holders of the Series F Preferred Stock and other holders of Parity Stock
shall be distributed pro rata to such holders based upon the aggregate of
the full preferential amounts to which all of the shares would otherwise
respectively be entitled. Neither the consolidation or merger of the
Company with or into any other corporation or corporations nor the sale,
transfer or lease of all or substantially all of the assets of the Company
shall itself be deemed to constitute a liquidation, dissolution or winding
up of the Company within the meaning of this Section 3. Notice of the
liquidation, dissolution or winding up of the Company shall be given, not
less than twenty (20) days prior to the date on which such liquidation,
dissolution or winding up is expected to take place or become effective, to
the holders of record of the shares of Series F Preferred Stock.
4. Conversion of Series F Preferred Stock.
(a) Right to Convert. Shares of Series F Preferred Stock may
be converted at the option of the holder thereof, in the manner and upon
the terms and conditions set forth in this Section 4, into fully paid and
nonassessable whole shares of Common Stock at the Conversion
Rate.
(b) Mechanics of Conversion. In order to convert shares of
Series F Preferred Stock, the holder thereof shall surrender the
certificate or certificates representing the shares of Series F Preferred
Stock to be converted at the office of the Company or the office of any
transfer agent for the Series F Preferred Stock, which certificate or
certificates shall be duly endorsed to the Company in blank (or accompanied
by duly executed instruments of transfer to the Company in blank) with
signatures guaranteed (such endorsements or instruments of transfer to be
in form satisfactory to the Company), together with a written notice to the
Company at said office of the election to convert the same, specifying the
number of shares of Series F Preferred Stock to be converted and the name
or names (with addresses) in which the certificate or certificates for
shares of Common Stock are to be issued. If any transfer is involved in the
issuance or delivery of any certificate or certificates for shares of
Common Stock in a name other than that of the registered holder of the
shares of Series F Preferred Stock surrendered for conversion, such holder
shall also deliver to the Company a sum sufficient to pay all taxes, if
any, payable in respect of such transfer or evidence satisfactory to the
Company that such taxes have been paid. Except as provided in the
immediately preceding sentence, the Company shall pay any issue, stamp or
other similar tax in respect of such issuance or delivery.
The Company shall, as soon as practicable after the Conversion
Date, deliver to the holder of the shares of Series F Preferred Stock so
surrendered for conversion, or to such holder's nominee(s) or, subject to
compliance with applicable law, transferee(s), a certificate or
certificates for the number of whole shares of Common Stock to which such
holder shall be entitled, together with cash or its check in lieu of any
fractional share as provided in Section 4(m). If the shares of Series F
Preferred Stock represented by a certificate surrendered for conversion are
converted only in part, the Company will also issue and deliver to the
holder, or to such holder's nominee(s) or, subject to compliance with
applicable law, transferee(s), without charge therefor, a new certificate
or certificates representing in the aggregate the unconverted shares of
Series F Preferred Stock.
The Person in whose name the certificate for shares of Common Stock
is issued upon such conversion shall be treated for all purposes as the
stockholder of record of such shares of Common Stock as of the close of
business on the Conversion Date; provided, however, that no surrender of
Series F Preferred Stock on any date when the stock transfer books of the
Company are closed for any purpose shall be effective to constitute the
Person or Persons entitled to receive the shares of Common Stock issuable
upon such conversion as the record holders of such shares of Common Stock
on such date, but such surrender shall be effective (assuming all other
requirements of this Section 4 have been satisfied) to constitute such
Person or Persons as the record holders of such shares of Common Stock for
all purposes as of the opening of business on the next succeeding day on
which such stock transfer books are open, and such conversion shall be at
the Conversion Rate in effect on the date that such shares of Series F
Preferred Stock were surrendered for conversion (and such other
requirements satisfied) as if the stock transfer books of the Company had
not been closed on such date. Upon conversion of shares of Series F
Preferred Stock, the rights of the holder of the shares so converted, as a
holder thereof, will cease.
(c) Adjustments for Changes in Capital Stock. If, after the
Issue Date, the Company: (i) pays a dividend or makes a distribution on the
Common Stock in shares of Common Stock; (ii) subdivides the outstanding
shares of Common Stock into a greater number of shares; (iii) combines the
outstanding shares of Common Stock into a smaller number of shares; (iv)
pays a dividend or makes a distribution on the Common Stock in shares of
its Capital Stock (other than Common Stock); or (v) issues by
reclassification to the holders of shares of Common Stock (other than a
reclassification by way of consolidation or merger that is subject to
Section 4(g)) any shares of its Capital Stock, the conversion privilege and
the Conversion Rate in effect immediately prior to the opening of business
on the record date for such dividend or distribution or the effective date
of such subdivision, combination or reclassification shall be adjusted so
that the holder of shares of Series F Preferred Stock thereafter converted
shall receive the kind and number of shares of Capital Stock of the Company
which such holder would have owned immediately following such event if such
holder had converted his shares of Series F Preferred Stock immediately
prior to the record date for, or effective date of, as the case may be,
such event. The adjustment contemplated by this Section 4(c) shall be made
successively whenever any event listed above shall occur.
If after an adjustment pursuant to this Section 4(c) a holder of
Series F Preferred Stock would be entitled to receive upon conversion
thereof shares of two or more classes or series of Capital Stock of the
Company, the Conversion Rate shall thereafter be subject to adjustment upon
the occurrence of an action taken with respect to any such class or series
of Capital Stock as is contemplated by this Section 4 with respect to the
Common Stock, on terms comparable to those applicable to the Common Stock
pursuant to this Section 4.
(d) Adjustments for Issuances below Certain Prices.
(i) If, after the Issue Date, the Company issues
Common Stock or Convertible Securities (other than Excluded Issuances or
issuances requiring adjustment pursuant to Section 4(c)) at a price (or
having an exercise or conversion price) per share less than the Current
Market Price of the Common Stock on the date of issuance (the "Issuance
Date"), then the Conversion Rate shall be adjusted by multiplying the
Conversion Rate in effect immediately prior to the opening of business on
the Issuance Date by a fraction, of which the numerator shall be (A) the
sum of the number of shares of Common Stock outstanding immediately prior
to the Issuance Date plus the number of shares of Common Stock issuable
upon exercise or conversion of all Convertible Securities outstanding
immediately prior to the Issuance Date plus the number of shares of Common
Stock issued or issuable at a price (or having an exercise or conversion
price) per share less than the Current Market Price of the Common Stock on
the Issuance Date, multiplied by (B) the Current Market Price of the Common
Stock on the Issuance Date, and of which the denominator shall be the sum
of (C) the number of shares of Common Stock outstanding immediately prior
to the Issuance Date plus the number of shares of Common Stock issuable
upon exercise or conversion of all Convertible Securities outstanding
immediately prior to the Issuance Date multiplied by the Current Market
Price of the Common Stock on the Issuance Date plus (D) the gross proceeds
received by the Company upon the issuance of such Common Stock or
Convertible Securities.
(ii) If, after the Issue Date, the Company issues
Common Stock or Convertible Securities (other than Excluded Issuances or
issuances requiring adjustment pursuant to Section 4(c)) at a price (or
having an exercise or conversion price) per share less than $____,(3) then
the Conversion Rate shall be adjusted by multiplying the Conversion Rate in
effect immediately prior to the opening of business on the Issuance Date by
a fraction, of which the numerator shall be (A) the sum of the number of
shares of Common Stock outstanding immediately prior to the Issuance Date
plus the number of shares of Common Stock issuable upon exercise or
conversion of all Convertible Securities outstanding immediately prior to
the Issuance Date plus the number of shares of Common Stock issued or
issuable at a price (or having an exercise or conversion price) per share
less than $____,(4) multiplied by (B) $____,(5) and of which the denominator
shall be the sum of (C) the number of shares of Common Stock outstanding
immediately prior to the Issuance Date plus the number of shares of Common
Stock issuable upon exercise or conversion of all Convertible Securities
outstanding immediately prior to the Issuance Date multiplied by $____(6)
plus (D) the gross proceeds received by the Company upon the issuance of
such Common Stock or Convertible Securities.
(iii) The adjustments contemplated by this Section
4(d) shall be made successively whenever any Common Stock or Convertible
Securities are issued below the respective prices specified above after the
Issue Date, and shall become effective immediately upon such issuance;
provided, however, that in the case of an issuance to which this Section
4(d) applies, only the adjustment specified in Section 4(d)(i) or 4(d)(ii)
that results in the greatest increase in the Conversion Rate shall be
effective for any single issuance, and provided, further, that in the case
of an issuance of Convertible Securities no further adjustment of the
Conversion Rate shall be made upon the subsequent issuance of shares of
Common Stock upon the exercise or conversion of such Convertible
Securities. In the case of any change in the number of shares of
-------------
3 The per share Stated Value of the Series F Preferred Stock divided
by 1,000.
4 The per share Stated Value of the Series F Preferred Stock
divided by 1,000.
5 The per share Stated Value of the Series F Preferred Stock
divided by 1,000. 6The per share Stated Value of the Series F
Preferred Stock divided by 1,000.
Common Stock issuable upon the exercise or conversion of any Convertible
Securities (including but not limited to a change resulting from the
anti-dilution provisions thereof), the Conversion Rate then in effect shall
forthwith be readjusted, upon any such change becoming effective, to the
Conversion Rate that would have obtained had the adjustment been made upon
initial issuance thereof for that portion of such Convertible Securities
not exercised or converted prior to such change. If all shares of Common
Stock subject to Convertible Securities resulting in an adjustment in the
Conversion Rate pursuant to this Section 4(d) have not been issued when the
exercise or conversion right associated with such Convertible Securities
expire (or, in the case of rights, warrants or options to purchase
Convertible Securities which have been exercised, if all of the shares of
Common Stock issuable upon conversion of such Convertible Securities have
not been issued prior to the expiration of the conversion right thereof),
then the Conversion Rate shall promptly be readjusted to the Conversion
Rate which would then be in effect had the adjustment upon the issuance of
such Convertible Securities been made on the basis of the actual number of
shares of Common Stock (or Convertible Securities) issued upon the exercise
of such rights, warrants or options (or the conversion of such Convertible
Securities).
(e) Adjustments for Series E Preferred Stock. For
conversions of Series F Preferred Stock occurring after the earlier of (i)
October 22, 1999 or (ii) the first date on which no shares of Series E
Preferred Stock are outstanding, the Conversion Rate shall be adjusted by
multiplying the Conversion Rate then in effect by a fraction, the numerator
of which is equal to the sum of (A) 43,927,813(7) plus (B) the number of
shares of Common Stock issued upon conversion of shares of Series E
Preferred Stock by such date, and the denominator of which is 51,097,726.(8)
Each number included in the foregoing calculation shall be appropriately
adjusted to reflect stock dividends, stock splits, reverse stock splits and
the like having record dates after the Issue Date and prior to the
effective date of any such conversions. No adjustment shall be made under
this Section 4(e) if the adjusted Conversion Rate would be lower than the
Conversion Rate in effect immediately prior to such adjustment.
(f) Adjustments for Other Distributions. If, after the Issue
Date, the Company distributes to all holders of shares of Common Stock any
Convertible Securities to purchase Capital Stock (excluding dividends or
distributions referred to in Section 4(c)), then, to the extent the holders
of the Series F Preferred Stock do not participate in such distribution on
a Converted Basis pursuant to Section 5, the Conversion Rate shall be
adjusted by dividing the Conversion Rate in effect immediately prior to the
opening of business on the record date for the determination of
stockholders entitled to receive the distribution by a fraction, of which
the numerator shall be the total number of shares of Common Stock
outstanding on such record date or immediately prior to such effective date
multiplied by the Current Market Price on the Determination Date, less the
fair market value (as determined in good faith by the Board of
------------
7 The number of shares of Common Stock outstanding on July 27, 1998
(27,260,976) plus the number of shares of Common Stock issuable upon
exercise of all options and warrants outstanding on July 27, 1998
(16,666,837).
8 The number of shares of Common Stock outstanding on July 27, 1998
(27,260,976) plus the number of shares of Common Stock issuable upon
exercise of all options and warrants outstanding on July 27, 1998
(16,666,837) plus the number of shares of Common Stock issuable on July 27,
1998 assuming conversion of all shares of Series E Preferred Stock
outstanding on such date (7,169,913).
Directors) on such record date or effective date of the Convertible
Securities so distributed to the holders of Common Stock, and of which the
denominator shall be the total number of shares of Common Stock outstanding
on such record date or immediately prior to such effective date multiplied
by such Current Market Price. Nothing in this Section 4(f) shall be deemed
to authorize any dividend or distribution not otherwise permitted by
Section 5.
For purposes of this Section 4(f), the number of shares of Common
Stock outstanding on any relevant date shall be deemed to include the
maximum number of shares of Common Stock the issuance of which would be
necessary to effect the full exercise, exchange or conversion of all
Convertible Securities outstanding on such date which are then exercisable,
exchangeable or convertible at a price (before giving effect to any
adjustment to such price for the distribution to which this Section 4(e) is
being applied) equal to or less than the Current Market Price on the
applicable Determination Date, if all of such Convertible Securities were
deemed to have been exercised, exchanged or converted immediately prior to
the opening of business on such date.
The adjustment pursuant to the foregoing provisions of this Section
4(f) shall be made successively whenever any distribution to which this
Section 4(f) applies is made, and shall become effective immediately after
the record date for the determination of stockholders entitled to receive
the distribution. Shares of Common Stock owned by or held for the account
of the Company shall not be deemed outstanding for the purpose of any such
adjustment.
No adjustment shall be made under this Section 4(f) if the adjusted
Conversion Rate would be lower than the Conversion Rate in effect prior to
such adjustment. In the event that, with respect to any distribution to
which this Section 4(f) would otherwise apply, the numerator of the
fraction in the formula set forth in the first paragraph of this Section
4(f) is zero or a negative number, then the adjustment provided by this
Section 4(f) shall not be made. If the Company makes a distribution to all
holders of its Common Stock of any of its assets or debt securities or any
rights, warrants or options to purchase securities of the Company that, but
for the immediately preceding sentence, would otherwise result in an
adjustment in the Conversion Rate pursuant to the foregoing provisions of
this Section 4(f), then, from and after the record date for determining the
holders of Common Stock entitled to receive the distribution, a holder of
Series F Preferred Stock that converts such shares in accordance with the
provisions of this Section 4 will upon such conversion be entitled to
receive, in addition to the shares of Common Stock into which such shares
of Series F Preferred Stock are convertible, the kind and amount of
securities, cash or other assets comprising the distribution that such
holder would have received if such holder had converted such shares of
Series F Preferred Stock immediately prior to the record date for
determining the holders of Common Stock entitled to receive the
distribution.
(g) Consolidation, Merger or Sale of the Company. If the
Company consolidates with or merges into, or transfers (other than by
mortgage or pledge) its properties and assets substantially as an entirety
to, another Person or the Company is a party to a merger or binding share
exchange which reclassifies or changes its outstanding Common Stock, the
Company (or its successor in such transaction) or the transferee of such
properties and assets shall make appropriate provision so that the holders
of the shares of Series F Preferred Stock then outstanding shall have the
right thereafter to convert such shares into the kind and amount of
securities, cash or other assets receivable upon such transaction by a
holder of the number of shares of Common Stock into which such shares of
Series F Preferred Stock could have been converted immediately before the
effective date of such transaction (with the holders of Series F Preferred
entitled to full exercise of anti-dilution rights, as set forth in Section
4(d)); provided that (i) effective provision shall be made, in the Articles
or Certificate of Incorporation of the resulting or surviving corporation
or otherwise or in any contracts of sale or transfer, so that the
provisions set forth herein for the protection of the conversion rights of
Series F Preferred Stock shall thereafter be made applicable, as nearly as
reasonably may be, to any such other securities and assets deliverable upon
conversion of the Series F Preferred Stock remaining outstanding or other
convertible preferred stock or other securities received by the holders of
Series F Preferred Stock in place thereof; and (ii) any such resulting or
surviving corporation or transferee shall expressly assume the obligation
to deliver, upon the exercise of the conversion privilege, such securities,
cash or other assets as the holders of the Series F Preferred Stock
remaining outstanding, or other convertible preferred stock or other
securities received by the holders in place thereof, shall be entitled to
receive pursuant to the provisions hereof, and to make provision for the
protection of the conversion rights of the Series F Preferred Stock, or of
any other convertible preferred stock or other securities received by the
holders in place thereof, as provided in clause (i) of this sentence.
If this Section 4(g) applies, Sections 4(c), 4(d), 4(e) and 4(f)
shall not apply.
(h) Simultaneous Adjustments. If this Section 4 requires
adjustments to the Conversion Rate under more than one of Section 4(c),
4(d), 4(e) or 4(f) and the record dates for the distributions giving rise
to such adjustments shall occur on the same date, then such adjustments
shall be made by applying, first, the provisions of Section 4(c), second,
the provisions of Section 4(e), third, the provisions of Section 4(d) and
fourth, to the extent applicable, the provisions of Section 4(f).
(i) When Adjustment May Be Deferred. In any case in which
this Section 4 shall require that an adjustment shall become effective
immediately after a record date for an event, the Company may defer until
the occurrence of such event (x) issuing to the holder of any shares of
Series F Preferred Stock converted after such record date and before the
occurrence of such event the additional shares of Common Stock issuable
upon such conversion by reason of the adjustment required by such event
over and above the shares of Common Stock issuable upon such conversion
before giving effect to such adjustment and (y) paying to such holder cash
or its check in lieu of any fractional interest to which he is entitled
pursuant to Section 4(m); provided, however, that the Company shall deliver
to such holder a due xxxx or other appropriate instrument evidencing such
holder's right to receive such additional shares of Common Stock, and such
cash, upon the occurrence of the event requiring such adjustment.
(j) Notice of Adjustment. Whenever the provisions of this
Section 4 require an adjustment to the Conversion Rate, the Company shall
promptly compute such adjustment and (i) file with the transfer agent for
the Series F Preferred Stock (or with the books of the Company if there is
no transfer agent) an Officers' Certificate setting forth a description of
the event requiring the adjustment, the new Conversion Rate (including a
reasonably detailed calculation thereof), and the kind and amount of
Capital Stock or other securities or cash or other assets into which the
Series F Preferred Stock shall be convertible after such event, and (ii)
cause a notice containing a summary of the information set forth in said
certificate to be given to the holders of Series F Preferred Stock. Where
appropriate, such notice may be given in advance and included as a part of
the notice required to be given under the provisions of Section 4(k).
(k) Advance Notice of Certain Matters. If the Company: (i)
takes any action which would require an adjustment in the Conversion Rate;
(ii) is a party to a consolidation or merger or transfers all or
substantially all of its assets to another Person, and any stockholders of
the Company must approve the transaction; or (iii) voluntarily or
involuntarily dissolves, liquidates or winds up, then, in any such event,
the Company shall give to the holders of the Series F Preferred Stock, at
least twenty (20) days prior to any record date or other date set for
definitive action if there shall be no record date, a notice stating the
record date for and the anticipated effective date of such action or event;
provided, however, that any notice required hereunder shall in any event be
given no later than the time that notice is given to the holders of Common
Stock. If all shares of Series E Preferred Stock have been converted into
Common Stock prior to October 22, 1998, the Company shall give notice to
the holders of the Series F Preferred Stock on the first date that no
shares of Series E Preferred Stock are outstanding.
(l) Reservation of Common Stock Issuable Upon Conversion.
The Company shall at all times on and after the Issue Date reserve and keep
available out of its authorized but unissued shares of Common Stock, solely
for the purpose of effecting the conversion of the shares of Series F
Preferred Stock, such number of its shares of Common Stock as shall from
time to time be sufficient to effect the conversion of all outstanding
shares of Series F Preferred Stock; provided that nothing contained herein
shall be construed to preclude the Company from satisfying its obligations
in respect of the conversion of the outstanding shares of Series F
Preferred Stock by delivery of shares of Common Stock held in the treasury
of the Company. The Company shall take all such corporate and other actions
as from time to time may be necessary to insure that all shares of Common
Stock issuable upon conversion of shares of Series F Preferred Stock at the
Conversion Rate in effect from time to time will, when issued, be duly and
validly authorized and issued, fully paid and nonassessable, and free from
all preemptive or similar rights. In order that the Company may issue
shares of Common Stock upon conversion of the Series F Preferred Stock, the
Company will in good faith and as expeditiously as possible endeavor to
comply with all applicable federal and state securities laws and will in
good faith and as expeditiously as possible endeavor to list such shares to
be issued upon conversion on such national securities exchange or national
securities association, if any, on which the Common Stock is then listed.
(m) Fractional Shares. No fractional shares of Common Stock
or scrip shall be issued upon conversion of the Series F Preferred Stock.
Whether or not fractional shares would otherwise be required to be issued
to a holder of Series F Preferred Stock upon such conversion shall be
determined on the basis of the total number of shares of Series F Preferred
Stock the holder is at the time converting into Common Stock and the total
number of shares of Common Stock issuable upon such conversion. In lieu of
the issuance of fractional shares of Common Stock, the Company shall pay
instead an amount in cash or by its check equal to the same fraction of the
Closing Price of a full share of Common Stock on the last full trading day
prior to the Conversion Date.
(n) Impairment. The Company will not, by amendment of this
Certificate of Designations or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, other than as
expressly permitted by this Certificate of Designations or approved by the
holders of Series F Preferred Stock given in accordance with Section 7,
avoid or seek to avoid the observance or performance of any of the terms to
be observed or performed hereunder by the Company, but will at all times in
good faith assist in the carrying out of all the provisions of this Section
4 and in the taking of all such action as may be necessary or appropriate
in order to protect the conversion rights of the holders of Series F
Preferred Stock against impairment. The Company will not amend, alter or
repeal the preferences, rights, powers or other terms of this Certificate
of Designations or otherwise affect adversely the Series F Preferred Stock
without the approval of the holders of the Series F Preferred Stock given
in accordance with Section 7. Without limiting the generality of the
foregoing, the authorization or issuance by the Company of any class or
series of Senior Stock shall be deemed to affect adversely the Series F
Preferred Stock. The issuance of the Company of Parity Stock shall not
require the approval of the holders of the Series F Preferred Stock.
5. Restrictions on Dividends and Redemptions. So long as any shares
of Series F Preferred Stock shall be outstanding, except for the payment by
the Company after the Issue Date and prior to __________ of up to $_____ (9)
for the repurchase of Common Stock in transactions effected pursuant to
Rule 10b-18 under the Securities Exchange Act of 1934, as amended, the
Company shall not declare or pay on any Junior Stock any dividend
whatsoever, whether in cash, property or otherwise (other than dividends
payable in shares of the class or series upon which such dividends are
declared or paid), nor shall the Company make any distribution in respect
of any Junior Stock, nor shall any Junior Stock be purchased or redeemed,
directly or indirectly, by the Company or any Subsidiary, nor shall any
monies be paid or made available for a sinking fund for the purchase or
redemption of any Junior Stock, except to the extent permitted by a waiver
given by the holders of the Series F Preferred Stock pursuant to Section 7.
If any dividend or distribution shall be declared, paid or made on any
Junior Stock upon the vote or consent of the holders of the Series F
Preferred Stock, whether in cash, property or otherwise (other than
dividends for which adjustment is made pursuant to Section 4(c)), such
dividends shall also be paid or declared or such distributions shall also
be made to the holders of the Series F Preferred Stock on a Converted
Basis, except to the extent that the waiver authorizing such dividend or
distribution specifies otherwise (in which case the provisions of Section
4(f) shall apply).
6. Voting Rights and Election of Directors. The holders of Series F
Preferred Stock shall be entitled to vote on all matters that are presented
to the stockholders of the Company for a vote, with such holders entitled
to vote such shares of Series F Preferred Stock with the holders of Common
Stock as a single class on a Converted Basis. So long as shares of Series F
-------------
9 Insert the amount remaining as of the Issue Date to be expended by
the Company pursuant to its stock repurchase plan announced in September
1998.
Preferred Stock convertible at the time into 5% or more of the outstanding
shares of Common Stock are outstanding, the holders of the Series F
Preferred Stock shall have the sole and exclusive right to elect two
members of the Company's Board of Directors.
7. Waiver; Amendment. Any provision of this Certificate of
Designations which, for the benefit of the holders of Series F Preferred
Stock, prohibits, limits or restricts actions by the Company, or imposes
obligations on the Company, including but not limited to provisions
relating to the obligation of the Company to redeem or convert such shares,
may be waived in whole or in part, or the application of all or any part of
such provision in any particular circumstance or generally may be waived,
in each case by the affirmative vote, or with the consent of the holders,
of at least two-thirds of the number of shares of Series F Preferred Stock
then outstanding (or such greater percentage thereof as may be required by
applicable law or any applicable rules of any national securities exchange
or national interdealer quotation system), either in writing or by vote at
an annual meeting or a special meeting called for such purpose at which the
holders of Series F Preferred Stock shall vote or consent as a separate
class. Any amendment to this Certificate of Designations shall be likewise
approved by the holders of the Series F Preferred Stock voting or
consenting as a separate class.
8. Method of Giving Notices. Any notice required or permitted by
the provisions of this Certificate of Designations to be given to the
holders of shares of Series F Preferred Stock shall be deemed duly given if
deposited in the United States mail, first class mail, postage prepaid, and
addressed to each holder of record at his address appearing on the books of
the Company or supplied by him in writing to the Company for the purpose of
such notice.
9. Exclusion of Other Rights. Except as may otherwise be required
by law and except for the equitable rights and remedies which may otherwise
be available to holders of Series F Preferred Stock, the shares of Series F
Preferred Stock shall not have any designations, preferences, limitations
or relative rights other than those specifically set forth in this
Certificate of Designations.
10. Headings of Subdivisions. The headings of the various
subdivisions of this Certificate of Designations are for convenience of
reference only and shall not affect the interpretation of any of the
provisions of this Certificate of Designations.
FURTHER RESOLVED, that the appropriate officers of this Company are
hereby authorized to execute and acknowledge a certificate setting forth
these resolutions and to cause such certificate to be filed and recorded in
accordance with the requirements of Section 151(g) of the General
Corporation Law of the State of Delaware."
The undersigned has signed this Certificate of Designations on this
______ day of ____________, 199_.
AMTEC, INC.
BY: __________________________________
Xxxxxx X. Xxxxxx, Xx.
Chief Executive Officer
Draft 10-16-98
TECHNICAL ASSISTANCE AGREEMENT
THIS AGREEMENT is made as of the _____ day of ____________________, 1998.
BETWEEN
(1) AMTEC, INC., a U.S. corporation organized and existing under the
laws of the State of Delaware and having its registered office at
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the
"Company"); and
(2) UIH ASIA/PACIFIC COMMUNICATIONS, INC., a U.S. corporation organized
and existing under the laws of the State of Delaware and having its
principal executive offices at 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxx 00000, Xxxxxx Xxxxxx of America ("UAP").
WHEREAS
(A) UAP, through its own personnel and through personnel made available
to it by its Affiliates (as defined herein), has extensive
experience in (i) designing, engineering, constructing, marketing,
and managing multi-channel television systems and (ii) designing,
engineering, constructing, marketing and managing broadband
telecommunications systems, including but not limited to telephony
services.
(B) From time to time, the Company wishes to obtain the benefit of UAP's
experience and assistance and desires to engage UAP to perform
services with respect to the management of the Company's
telecommunications projects in the People's Republic of China.
NOW THEREFORE, in consideration of the mutual covenants set forth below,
the Parties agree as follows:
1. Definitions and Interpretations
1.1 In this Agreement, unless the context otherwise requires:
"Affiliate" of a party means any entity that directly or indirectly
through one or more intermediaries, controls or is controlled by, or
is under common control with such party. For purposes of this
definition, the term "control" means effective management control of
the entity, including without limitation control through the power
to elect a sufficient number of directors or to appoint a sufficient
number of senior managers to obtain control, or similar powers. An
entity shall be rebuttably presumed to control another entity if it
owns 50% or more of the beneficial interest or the voting power of
the appropriate entity.
"Related Entity" of a party shall refer to any entity in which such
party holds a beneficial interest, directly or through one or more
intermediaries.
"Systems" shall mean the telephony, multi-channel television and
other telecommunication network businesses owned or operated by the
Company or any Affiliate or Related Entity in the People's Republic
of China.
2. Engagement
The Company hereby engages UAP as its principal technical adviser to
provide services upon written request by the Company, from time to
time, with respect to the design, construction, operation,
maintenance, administration, marketing and programming of the
Systems, and UAP hereby accepts such engagement pursuant to the
provisions of this Agreement.
3. General Duties of UAP
3.1 UAP shall, through its officers, employees, agents and other
personnel, provide technical assistance to the Company as requested
by the Company in writing and in accordance with the terms of this
Agreement.
3.2 UAP shall perform its duties hereunder in a professional, expert and
diligent manner and in accordance with the same standards UAP
customarily applies in the operation or management of multi-channel
television and telecommunications systems owned or managed by UAP.
3.3 UAP agrees to provide whatever personnel (whether employed directly
by UAP or by any of its Affiliates or Related Entities) as are
reasonably required to fulfill its obligations under this Agreement,
and agrees that, as reasonably required by the Company, such
personnel shall provide the services requested by the Company from
time to time on-site at the Systems or the offices of the Company.
4. Specific Duties of UAP
4.1 Project Assistance
UAP shall provide, through advice, consultation and other means,
technical assistance to the Company with respect to such matters as
are reasonably requested by the Company in writing with respect to
the Systems. Such matters may include services with respect to: (i)
design, construction and operation of the Systems; (ii) marketing
for the Systems; (iii) subscriber management; (iv) information
technology for the Systems; and (v) personnel and training.
4.2 Financing Assistance
As requested from time to time by the Company, UAP shall advise the
Company in the structure and conclusion of financial or credit
arrangements with financial institutions or manufacturers,
suppliers, contractors and the like, including, if appropriate and
practicable, introductions to financial advisors or agents and use
of UAP's purchasing services and contracts.
5. Office Work Space and Other Assistance
To the extent reasonably required for the provision of UAP's
services pursuant to this Agreement, the Company shall furnish to
any of UAP's employees and personnel who are assigned to work
on-site at the Systems at the sole cost and expense of the Company,
adequate office or other work space, and secretarial, clerical or
other assistance. Likewise, the Company will make available to UAP's
employees who are performing services under this Agreement access to
all records, equipment, and areas within the control of the Company
as may be reasonably requested by such personnel. UAP undertakes not
to use any facilities or assistance provided by the Company
hereunder other than for the sole purpose of performing its
obligations pursuant to this Agreement.
6. Independent Contractor
In the performance of its duties and responsibilities under this
Agreement, UAP shall be and shall act solely as an independent
contractor, and nothing contained in this Agreement shall constitute
or be construed to be or to create a partnership or joint venture
between the Company and UAP.
7. Fees and Payment
7.1 During the period of this Agreement, the Company shall reimburse UAP
for expenses as set forth in Section 7.2 below and shall pay to UAP
a Fee as set forth in Section 7.3 below.
7.2 The Company shall reimburse UAP for all expenses reasonably incurred
by its employees and personnel in the provision of services pursuant
to this Agreement ("Expenses"), which Expenses shall include the
following:
(a) Travel, meal and lodging expenses,
(b) Salary and reasonable administrative expenses; and
(c) Fees and expenses of advisors, consultants and independent
contractors (such as accountants, market consultants and
attorneys) engaged by UAP with the written consent of the
Company.
7.3 The Company shall pay to UAP a fee equal to 15 % of the Expenses for
each month during the term of this Agreement (the "Fee"), payable in
accordance with Section 7.4 below.
7.4 Thirty days after the end of each calendar month, UAP shall supply
to the Company a report of Expenses and the Company shall pay UAP
for such Expenses and the applicable Fee within 30 days after the
receipt of such report. In the event the Company fails to pay such
Expenses and Fee within such 30 day period, the aggregate amount of
such Expenses and Fee owed to UAP shall bear interest from the last
day of such 30-day period until paid in full at a rate of 10% per
annum on the basis of a 360-day year and actual days elapsed.
7.5 All payments due under this Section 7 shall be made in U.S. dollars.
The U.S. dollar amount for each month shall be based on the
"Exchange Rate" on the business day that is the closest to the 15th
day of such month. For these purposes, "Exchange Rate" shall equal
the midpoint of the Interbank bid and asked quotes on the day of
receipt, as provided by Bank America International, or, if such
quotes are not then available from Bank America International, from
another internationally recognized bank chosen by UAP.
7.6 All payments made to UAP hereunder shall be by means of official
telegraphic transfer remittance, mail transfer remittance or
banker's cheque to an account established at bank(s) designated by
UAP.
8. Warranty and Indemnity
The Company shall indemnify and keep UAP fully indemnified from and
against any loss, claim or damage incurred by UAP or the Company as
a result of any action or claim brought against it by any third
party in respect of the provision by UAP of the services stipulated
under this Agreement, other than any loss, claim or damage caused by
gross negligence and willful misconduct of UAP.
9. Term
(a) Subject to (b) and (c) below, this Agreement shall be
effective upon the date hereof, and shall continue for an
initial term of three (3) years. Thereafter, this Agreement
shall be continued from year to year unless (i) UAP or the
Company provides written notice to the other party ninety
(90) days prior to the end of the initial term or any
extension, or (ii) terminated earlier as set forth in (b) and
(c) below.
(b) This Agreement shall forthwith terminate with respect to one
party upon written notice of termination to it by the other
party if the first party is materially in breach of its
obligations hereunder (including but not limited to the
payment of any sums due hereunder) and such breach, if
capable of remedy, has not been remedied within thirty (30)
days after written notice to that effect is given to the
defaulting party by the other party indicating the steps
required to be taken to remedy the failure.
(c) This Agreement may be terminated by UAP or the Company upon
sixty (60) days written notice in the event UAP or an
Affiliate of UAP, no longer has an equity interest in the
Company on a fully diluted basis.
10. Confidentiality
Each party hereto acknowledges that, in connection with the services
to be provided by UAP hereunder, it may receive confidential and
proprietary information of a business, financial, technical or other
type, from the other party or from an Affiliate of the other party.
The Company agrees that any such information it receives is to be
used by the Company only as required in the businesses of the
Systems. UAP agrees that any such information it receives will be
used only for the performance of its obligations hereunder. Without
limiting the generality of the foregoing, neither party shall
commercially exploit any confidential proprietary information for
purposes other than those contemplated by this Agreement. Each party
shall use its best efforts to keep confidential all information of a
proprietary nature that it receives in connection with this
Agreement; provided, however, that the partys' respective
obligations under this Section 10 shall not apply to (i) information
that is publicly available other than through a breach by a
disclosing party of any agreement with the Company or UAP or their
Affiliates, or (ii) any public announcement or disclosure that a
party considers necessary or appropriate under U.S. securities laws.
The provisions of this Section 10 shall be binding upon the
Affiliates, partners, officers, directors, shareholders, employees
and agents of the parties, and shall survive the termination of this
Agreement.
11. Notices
All notices, demands or other communications given or made under
this Agreement shall be in writing and delivered by reputable
international courier service or sent by telefacsimile to the
relevant party at its address or telecopy fax number set out below
(or such other address or telecopy number as the addressee has by
five (5) days' prior written notice specified to the other parties):
To the Company: AmTec, Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
XXX
Attn: ____________________
To UAP UIH ASIA/PACIFIC COMMUNICATIONS, INC.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx, 00000, XXX
Facsimile: 000 000-0000
Telephone: 000 000-0000
Attention: President
Any notice, demand or other communication so addressed to the
relevant party shall be deemed to have been delivered (a) if given
or made by telefacsimile, when dispatched with confirmed
transmission report; and (b) if given or made by courier, when
actually delivered to the relevant address.
12. Miscellaneous
12.1 No amendment or modification of this Agreement shall be effective
unless in writing and signed by or on behalf of all of the parties.
12.2 If any term or provision of this Agreement or application thereof to
any person, entity or circumstance is invalid or unenforceable to
any extent, then the remainder of this Agreement and the application
of such provision to other persons, entities or circumstances shall
not be affected thereby and shall be enforced to the greatest extent
permitted by applicable law. If any provision of Section 7 of this
Agreement is illegal or unenforceable, then UAP may terminate this
Agreement at any time thereafter through written notice to the
Company, such termination to be effective when such notice is given.
Notwithstanding the foregoing, the parties shall negotiate in good
faith to agree on the terms of a satisfactory provision to effect
the intent of any invalid or unenforceable provision to the maximum
extent allowable under applicable law.
12.3 This Agreement shall be governed by the laws of the State of
Delaware, U.S.A.
12.4 No failure or delay by any party in exercising any right, power or
remedy under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of the same preclude any
further exercise thereof or the exercise of any other right, power
or remedy. Without limiting the foregoing, no waiver by any party of
any breach of any provision hereof shall be deemed to be a waiver of
any subsequent breach of that or any other provision hereof.
12.5 No party shall be entitled to assign this Agreement or its rights or
obligations hereunder save as expressly provided herein or with the
written consent of the other party hereto; provided however, that
this Agreement may be assigned by UAP to an Affiliate without any
consent.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives as of the date first above
written.
AMTEC, INC.
By __________________________________
Its ______________________________
UIH ASIA/PACIFIC COMMUNICATIONS, INC.
By __________________________________
Its ______________________________
