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ACQUISITION AGREEMENT
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DATED AS OF SEPTEMBER 18, 2003
AMONG
UNILOGIC SOLUTIONS (PTY), LTD
And
MAXIMUM DYNAMICS, INC.
ACQUISITION AGREEMENT
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This ACQUISITION AGREEMENT ("Agreement") is entered into this 18th day
of September, 2003 (the "Effective Date") by and between MAXIMUM DYNAMICS INC.,
a Colorado corporation (hereinafter referred to as "Buyer") and UNILOGIC
SOLUTIONS, LTD., a South African company (hereinafter referred to as "Seller").
WHEREAS, each of the Boards of Directors of the Buyer and Seller has
approved this Agreement and the transactions contemplated hereby;
WHEREAS, simultaneously with the execution of this Agreement, the Buyer
and Seller are entering into a STOCK PURCHASE AGREEMENT (the "Stock Purchase
Agreement"), pursuant to which the Buyer shall purchase fifty one percent (51%)
of the Seller; and
WHEREAS, Buyer is purchasing shares from certain "Selling Shareholders"
of Unilogic, which collectively shall represent fifty one percent (51%) of the
Seller's common stock; and
WHEREAS, simultaneously with the execution of this Agreement, the Buyer
and Seller are also entering into a strategic relationship in which, among other
things, the Buyer and Seller will co-develop and co-promote technology solutions
in the United States, Europe and Africa.
NOW, THEREFORE, in consideration of the respective representations,
warranties, covenants, agreements and conditions contained herein, the parties
hereto hereby agree as follows:
ARTICLE 1
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DEFINITIONS
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Section 1.01. Definitions. (a) The following terms, as used herein,
have the following meanings:
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. For the
purposes of this definition, "CONTROL" when used with respect to any Person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"CONTROLLING" and "CONTROLLED" have meanings correlative to the foregoing.
"BUSINESS DAY" means a day other than Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close.
"CLOSING" means the number of Shares that are validly tendered and not
withdrawn at the time of acceptance for payment to the Seller. The number of
shares is equal to or greater than the Maximum Number and is accepted by the
Seller as payment on or before the expiration of the Offer.
"CONFIDENTIALITY AGREEMENT" means the letter agreement, dated August
28, 2003, between the Buyer and Seller.
"COLORADO LAW" means the General Corporation Law of the State of
Colorado.
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"INTELLECTUAL PROPERTY RIGHT" means any patent, patent right,
trademark, trademark right, trade name, trade name right, service xxxx, service
xxxx right, copyright and other proprietary intellectual property right.
"ISSUED SHARES" means any additional issued shares as the case may be.
"KNOWLEDGE" of the Buyer or Seller shall mean the knowledge, after
reasonable inquiry, of Xxxx Xxxxxx, Xxxxxx Xxxxxxx, Xxxx Xxxxxxx, Xxxxxx
Xxxxxxxx, Xxxxxx Xxxxx or XX Xxxxx.
"MATERIAL ADVERSE EFFECT" means, (A) with respect to the Buyer, a
material adverse effect on the condition (financial or otherwise), business,
assets or results of operations or prospects of the Buyer, except any such
effect resulting from or arising in connection with (i) this Agreement or the
transactions contemplated hereby or the announcement hereof, (ii) changes,
circumstances or conditions (including changes in applicable laws, rules and
regulations) affecting the software industry in general, or (iii) changes in
general economic conditions or financial markets, and (B) with respect to
Seller, a material impairment of the ability of Seller to perform its
obligations under or consummate the transactions contemplated by this Agreement.
"1933 ACT" means the Securities Act of 1933.
"1934 ACT" means the Securities Exchange Act of 1934.
"PERSON" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
"SEC" means the Securities and Exchange Commission.
"Selling Shareholders" means any individuals, corporations, trusts or
entities that own shares in the Seller that are selling shares to the Buyer
under the terms of the Stock Purchase Agreement.
"SHARE ISSUANCE" means any additional share issuance as the case may
be.
"SHARES" means the shares of common stock, $0.001 par value, of the
Buyer.
"SUBSIDIARY" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at any time directly or indirectly owned by such Person.
"TERMINATION DATE" means October 9, 2003; PROVIDED that if on or before
October 9, 2003, Seller has not accepted for payment Shares validly tendered and
not withdrawn pursuant to the Offer.
"THIRD PARTY CHANGE OF CONTROL OFFER" means a bona fide public offer or
proposal by any Person (other than Buyer and its Affiliates) to acquire
beneficial ownership of more than 51% of the outstanding Shares.
Any reference in this Agreement to a statute shall be to such statute,
as amended from time to time, and to the rules and regulations promulgated
thereunder.
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ARTICLE 2
THE OFFER
Section 2.01. The Offer. (a) As promptly as practicable after the date hereof,
but in no event later than ten Business Days after the date hereof, Buyer shall
commence an offer (the "OFFER") to purchase fifty one (51) Shares (such number
of Shares, the "MAXIMUM NUMBER") from the Selling Shareholders. Buyer shall pay
for the purchase of Shares with the issuance of six million (6,000,000) shares
of its Common Stock (the "ACQUISITION"). Buyer shall also make a minimum payment
of US $6,000 per month to Unilogic for a period of twelve months to fund the
operations of Unilogic. Such payment shall be fixed at an exchange rate of 7.4
South African Rand to 1 US Dollar. The first payment shall be due on October 31,
2003 and the last payment shall be due September 30, 2004. The initial
expiration date of the Offer shall be the twentieth Business Day following the
commencement of the Offer (determined under Rule 14d-1(g)(3) promulgated under
the 1934 Act). Seller shall extend the Offer for any period required by any
rule, regulation, interpretation or position of the SEC or the staff thereof
applicable to the Offer or any period required by applicable law. Buyer or
Seller may extend the Offer from time to time until such conditions are
satisfied or waived; PROVIDED that (i) each such extension of the Offer shall be
for a period of not more than ten Business Days, and (ii) Buyer shall not,
without the prior written consent of the Seller, extend the Offer beyond the
Termination Date.
(b) As soon as practicable on the date of CLOSING, Buyer and Seller
shall file with the SEC all required filings with respect to the Offer and
resulting transaction. Buyer and Seller each agrees promptly to correct any
information provided by it for use in the filings if and to the extent that such
information shall have become false or misleading in any material respect. Buyer
and Seller shall provide each other and respective counsels with any comments or
other communications, whether written or oral, that may be received from time to
time from the SEC or its staff with respect to the Acquisition promptly after
receipt of such comments or other communications.
(c) Each certificate for Shares issued to Seller as payment for the
Acquisition shall bear a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN
THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY
IN AN OFFSHORE TRANSACTION, (2) BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS ONE YEAR AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY
(OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B)
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PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (D) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT
THAT IS AN INSTITUTIONAL INVESTOR ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER
OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
SURVIVING CORPORATION'S RIGHTS PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSES (C), (D) OR (E) TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO THE SURVIVING CORPORATION AND IN THE CASE OF THE
FOREGOING CLAUSE (D), A CERTIFICATE OF TRANSFER (A FORM OF WHICH MAY BE
OBTAINED FROM THE SURVIVING CORPORATION) COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE SURVIVING CORPORATION. HEDGING TRANSACTIONS WITH
REGARD TO THIS SECURITY MAY NOT BE CONDUCTED BY THE HOLDER HEREOF
UNLESS IN COMPLIANCE WITH THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Section 2.02. Buyer Action. (a) The Buyer hereby approves of and
consents to the Offer and represents that its Board of Directors, at a meeting
duly called and held, has resolved to recommend the Offer. The Seller hereby
approves of and consents to the Offer and represents that its Board of
Directors, at a meeting duly called and held, has resolved to recommend
acceptance of the Offer by the holders of Shares.
Section 2.03. Buyer Disclosure Documents. The Buyer agrees that each
document required to be filed by the Buyer with the SEC or required to be
distributed or otherwise disseminated by the Buyer to the Buyer's stockholders
in connection with the transactions contemplated by this Agreement (the "COMPANY
DISCLOSURE DOCUMENTS"), and any amendments or supplements thereto, when filed,
distributed or disseminated, as applicable, will comply as to form in all
material respects with the applicable requirements of the 1934 Act.
Section 2.04. Seller Disclosure Documents. Seller agrees that the
information that it furnishes to the Buyer in writing specifically for use in
any Buyer Disclosure Document will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading at the time of the filing of such Buyer Disclosure Document
or any supplement or amendment thereto, at the time of any distribution or
dissemination thereof and at the time of the consummation of the Offer.
Section 2.05. Antidilution Adjustments. The number and kind of
securities purchased by the Buyer pursuant to this Agreement are subject to
adjustment from time to time as provided in this section. (a) In the event that
the Seller shall at any time after this Agreement is consummated (i) declare and
pay a dividend on the Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, (iii) combine the outstanding Common
Stock into a smaller number of shares, or (iv) issue, change, or alter any of
its shares of capital stock in a reclassification or recapitalization (including
any such reclassification in connection with a consolidation or merger in which
the Seller is the continuing or surviving Person), in each such case, the number
and kind of shares of capital stock issuable upon exercise of any of the above
shall be proportionately adjusted so that the Buyer shall be entitled to receive
the aggregate number and kind of shares of Common Stock so that Buyer maintains
its fifty one percent (51%) ownership of Seller. If an event occurs which would
require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided in this Section 11(a)(i) shall be in addition
to, and shall be made prior to, any adjustment required pursuant to Section
11(a)(ii) hereof.
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Section 2.06. Appointment to Unilogic Board of Directors. Buyer shall
nominate two individuals to serve on the Board of Directors and Unilogic shall
appoint three individuals to the Board of Directors of Unilogic. Buyer shall
also have the right to appoint additional members to the Board of Directors of
Unilogic, PROVIDED that Unilogic maintains at least one more member that it has
appointed to Unilogic's Board of Directors than the total number of members
appointed by Buyer. Buyer's appointed members to the Board of Directors of
Unilogic shall serve in accordance with the Bylaws of Unilogic and be held in
accordance with the laws of South Africa.
Section 2.07. Unwind Provision. The Acquisition shall contain an
"UNWIND PROVISION" whereby Seller or Buyer may take the necessary actions to
cancel the acquisition and return each entity to its status and structure prior
to the acquisition. Terms of the Unwind Provision are set forth as follows:
(a) Unilogic and Sellers shall have the option to exercise the Unwind
Provision should any of the following occur: (i) Buyer does not issue the
6,000,000 shares of its Common Stock as payment for the Shares; (ii) Buyer does
not make a monthly payment to Unilogic (as set forth in Section 2.01(a)) for
three consecutive months; (iii) Buyer has a change in its Board of Directors
membership such that Xxxx Xxxxxx, Xxxxxx Xxxxxxx, and Xxxx Xxxxxxx are removed
or resign from Buyer's Board of Directors; or (iv) within twelve months of the
signing of this Agreement, a receiver or other liquidating officer is appointed
for substantially all of the assets or business of Buyer, or if Buyer makes an
assignment for the benefit of creditors, or Buyer becomes insolvent or bankrupt
or enters into reorganization proceedings.
(b) Buyer shall have the option to exercise the Unwind Provision should
any of the following occur: (i) Seller does not transfer the Shares upon receipt
of payment from Buyer; or (ii) within twelve months of the signing of this
Agreement, a receiver or other liquidating officer is appointed for
substantially all of the assets or business of Buyer, or if Buyer makes an
assignment for the benefit of creditors, or Buyer becomes insolvent or bankrupt
or enters into reorganization proceedings.
(c) Should any of the conditions as set for in Section 2.07(a) or
2.07(b) be met and the Buyer or Seller exercises the Unwind Provision and the
parties do not otherwise agree to modification of terms or extension of time
periods or resolve the matter, then upon receipt by written notice of Unwind
from the party exercising the provision the following shall occur: (i) Buyer's
appointments to the Board of Directors of Unilogic and any appointed management
shall all resign; (ii) the 6,000,000 shares of Buyer issued as Payment for the
Shares shall be cancelled and returned to Buyer's treasury; (iii) the Shares
shall be cancelled and reissued to Sellers; (iv) the agreement shall be deemed
null and void.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyer represents and warrants to Seller as follows:
Section 3.01. Corporate Existence And Power. The Buyer is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Colorado and has all corporate powers and all governmental licenses,
authorizations, permits, consents and approvals required to own, lease or
otherwise hold its properties and assets and to carry on its business as now
conducted, except for those licenses, authorizations, permits, consents and
approvals the absence of which would not have, individually or in the aggregate,
a Material Adverse Effect on the Buyer. The Buyer is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where such qualification is necessary, except for those jurisdictions where
failure to be so qualified would not have, individually or in the aggregate, a
Material Adverse Effect on the Buyer or materially impair the ability of the
Buyer to consummate the transactions contemplated by this Agreement and the
Stock Purchase Agreement.
Section 3.02. Corporate Authorization. The execution, delivery and
performance by the Buyer of this Agreement and the Stock Purchase Agreement and
the consummation by the Buyer of the transactions contemplated hereby and
thereby are within the Buyer's corporate powers and have been duly authorized by
all necessary corporate action on the part of the Buyer. The Buyer has duly
executed and delivered each of this Agreement and the Stock Purchase Agreement,
and each of this Agreement and the Stockholder Agreement constitutes a valid and
binding agreement of the Buyer.
Section 3.03. Governmental Authorization. The execution, delivery and
performance by the Buyer of this Agreement and the Stock Purchase Agreement and
the consummation by the Buyer of the transactions contemplated hereby and
thereby require no action, consent, approval, authorization, permit or order by
or in respect of, or filing, declaration or registration with, any governmental
authority or agency in the United States or any state thereof, other than (i)
compliance with any applicable requirements of the 1933 Act, the 1934 Act and
any other applicable securities or takeover laws, (ii) compliance with the rules
and regulations of the National Association of Securities Dealers and the Nasdaq
National Market, and (iii) any actions or filings the absence of which would not
have, individually or in the aggregate, a Material Adverse Effect on the Buyer
or materially impair the ability of the Buyer to consummate the transactions
contemplated by this Agreement and the Stock Purchase Agreement.
Section 3.04. Non-Contravention. The execution, delivery and
performance by the Buyer of this Agreement and the Stock Purchase Agreement and
the consummation by the Buyer of the transactions contemplated hereby and
thereby do not and will not (i) contravene, conflict with, or result in any
violation or breach of any provision of the certificate of incorporation or
bylaws of the Buyer, (ii) assuming compliance with the matters referred to in
Section 3.03, contravene, conflict with, or result in a violation or breach of
any provision of any applicable law, statute, ordinance, rule, regulation,
judgment, injunction, order or decree, or (iii) require any consent or other
action by any Person under, constitute a default under, or cause or permit the
termination, cancellation, acceleration or other change of any right or
obligation or the loss of any benefit to which the Buyer is entitled under any
provision of any agreement or other instrument binding upon the Buyer or any
license, franchise, permit, certificate, approval or other similar authorization
affecting, or relating in any way to, the assets or business of the Buyer except
for such contraventions, conflicts and violations referred to in clause (ii) and
for such failures to obtain any such consent or other action, defaults,
terminations, cancellations, accelerations, changes or losses referred to in
clause (iii) that would not have, individually or in the aggregate, a Material
Adverse Effect on the Buyer or materially impair the ability of the Buyer to
consummate the transactions contemplated by this Agreement and the Stock
Purchase Agreement.
Section 3.05. Capitalization. (a) The authorized capital stock of the
Buyer consists of 200,000,000 shares of common stock, no par value, and
20,000,000 shares of preferred stock, no par value per share. As of September
18, 2003, there were outstanding (i) 33,615,000 Shares, (ii) no shares of
preferred stock, and (iii) no options or warrants issued or outstanding. All
outstanding shares of capital stock of the Buyer have been duly authorized and
validly issued and are fully paid and nonassessable.
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(b) No outstanding shares of capital stock of the Buyer have been
issued in violation of any purchase option, right of first refusal, preemptive
right, subscription right or any similar right under any provision of Colorado
Law, the certificate of incorporation or by-laws of the Buyer or any contract to
which the Buyer is bound, except for such violations which would not have,
individually or in the aggregate, a Material Adverse Effect on the Buyer.
Section 3.06. Sec Filings. (a) The Buyer has filed all reports,
schedules, forms, statements and other documents required to be filed by the
Buyer with the SEC between February 25, 2002 and the date of this Agreement (the
"COMPANY SEC DOCUMENTS"). As of its filing date, each Buyer SEC Document
complied as to form in all material respects with the applicable requirements of
the 1933 Act and the 1934 Act, as the case may be, and the rules and regulations
of the SEC promulgated thereunder applicable to such Buyer SEC Document.
(b) As of its filing date, each Buyer SEC Document filed pursuant to
the 1934 Act did not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.
Section 3.07. Financial Statements. The audited consolidated financial
statements and unaudited consolidated interim financial statements of the Buyer
included in the Buyer SEC Documents fairly present, in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis (except as
may be indicated in the notes thereto), the consolidated financial position of
the Buyer as of the dates thereof and their consolidated results of operations
and cash flows for the periods then ended (subject to normal year-end
adjustments in the case of any unaudited interim financial statements).
Section 3.08. No Undisclosed Material Liabilities. The Buyer has no
other liabilities or obligations of any nature required by GAAP to be set forth
on a consolidated balance sheet of the Buyer or in the notes thereto, other
than:
(a) liabilities or obligations disclosed in the Buyer SEC Documents;
(b) liabilities and obligations incurred in the ordinary course of
business since inception; and
(c) liabilities or obligations that would not have, individually or in
the aggregate, a Material Adverse Effect on the Buyer.
Section 3.09. Compliance With Laws. The Buyer is in compliance with
and, to the knowledge of the Buyer, have not been charged with or given written
notice of any violation of, any applicable laws, except for failures to comply
or violations that would not have, individually or in the aggregate, a Material
Adverse Effect on the Buyer or materially impair the ability of the Buyer to
consummate the transactions contemplated by this Agreement and the Stock
Purchase Agreement.
Section 3.10. Litigation. There is no action, suit or proceeding
pending against or, to the knowledge of the Buyer, threatened against or
affecting, the Buyer that would have, individually or in the aggregate, a
Material Adverse Effect on the Buyer, nor is there any judgment outstanding
against the Buyer or any Subsidiary of the Buyer that would have a Material
Adverse Effect on the Buyer or materially impair the ability of the Buyer to
consummate the transactions contemplated by this Agreement and the Stock
Purchase Agreement.
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Section 3.11. Absence Of Certain Changes. Except as disclosed in the
Buyer SEC Documents, from February 25, 2002 to the date of this Agreement, the
business of the Buyer has been conducted in the ordinary course and during such
period there has not been any event, effect or development that has had,
individually or in the aggregate, a Material Adverse Effect on the Buyer or
would materially impair the ability of the Buyer to consummate the transactions
contemplated by this Agreement and the Stock Purchase Agreement.
Section 3.12. Intellectual Property. Except as disclosed in the Buyer
SEC Documents, no claims are pending or, to the knowledge of the Buyer,
threatened that the Buyer is infringing or otherwise adversely affecting the
rights of any Person with respect to any Intellectual Property Right, except for
such claims that would not have, individually or in the aggregate, a Material
Adverse Effect on the Buyer or would not materially impair the ability of the
Buyer to consummate the transactions contemplated by this Agreement and the
Stock Purchase Agreement.
Section 3.13. Issued Shares. When issued to Seller pursuant to the
terms of this Agreement, the Issued Shares will be duly authorized, validly
issued, fully paid and non-assessable and will be free and clear of encumbrances
or liens of any kind, other than restrictions imposed by applicable securities
laws and the Stock Purchase Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller represents and warrants to Buyer as follows:
Section 4.01. Corporate Existence And Power. The Seller is a
corporation duly incorporated, validly existing and in good standing under the
laws of South Africa and has all corporate powers and all governmental licenses,
authorizations, permits, consents and approvals required to own, lease or
otherwise hold its properties and assets and to carry on its business as now
conducted, except for those licenses, authorizations, permits, consents and
approvals the absence of which would not have, individually or in the aggregate,
a Material Adverse Effect on the Seller. The Seller is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where such qualification is necessary, except for those jurisdictions where
failure to be so qualified would not have, individually or in the aggregate, a
Material Adverse Effect on the Seller or materially impair the ability of the
Seller to consummate the transactions contemplated by this Agreement and the
Stock Purchase Agreement.
Section 4.02. Corporate Authorization. The execution, delivery and
performance by the Seller of this Agreement and the Stock Purchase Agreement and
the consummation by the Seller of the transactions contemplated hereby and
thereby are within the Seller's corporate powers and have been duly authorized
by all necessary corporate action on the part of the Seller. The Seller has duly
executed and delivered each of this Agreement and the Stock Purchase Agreement,
and each of this Agreement and the Stockholder Agreement constitutes a valid and
binding agreement of the Seller.
Section 4.03. Governmental Authorization. The execution, delivery and
performance by the Seller of this Agreement and the Stock Purchase Agreement and
the consummation by the Seller of the transactions contemplated hereby and
thereby require no action, consent, approval, authorization, permit or order by
or in respect of, or filing, declaration or registration with, any governmental
authority or agency in the United States or South Africa or any country thereof,
other than (i) compliance with any applicable securities requirements in South
Africa, and (ii) any actions or filings the absence of which would not have,
individually or in the aggregate, a Material Adverse Effect on the Seller or
materially impair the ability of the Seller to consummate the transactions
contemplated by this Agreement and the Stock Purchase Agreement.
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Section 4.04. Non-Contravention. The execution, delivery and
performance by the Seller of this Agreement and the Stock Purchase Agreement and
the consummation by the Seller of the transactions contemplated hereby and
thereby do not and will not (i) contravene, conflict with, or result in any
violation or breach of any provision of the certificate of incorporation or
bylaws of the Seller, (ii) assuming compliance with the matters referred to in
Section 4.03, contravene, conflict with, or result in a violation or breach of
any provision of any applicable law, statute, ordinance, rule, regulation,
judgment, injunction, order or decree, or (iii) require any consent or other
action by any Person under, constitute a default under, or cause or permit the
termination, cancellation, acceleration or other change of any right or
obligation or the loss of any benefit to which the Seller is entitled under any
provision of any agreement or other instrument binding upon the Seller or any
license, franchise, permit, certificate, approval or other similar authorization
affecting, or relating in any way to, the assets or business of the Seller
except for such contraventions, conflicts and violations referred to in clause
(ii) and for such failures to obtain any such consent or other action, defaults,
terminations, cancellations, accelerations, changes or losses referred to in
clause (iii) that would not have, individually or in the aggregate, a Material
Adverse Effect on the Seller or materially impair the ability of the Seller to
consummate the transactions contemplated by this Agreement and the Stock
Purchase Agreement.
Section 4.05. Capitalization. (a) The authorized capital stock of the
Seller consists of 1,000 shares of common stock, no par value. As of September
18, 2003, there were outstanding (i) 100 Shares, and (ii) no options or warrants
issued or outstanding. All outstanding shares of capital stock of the Seller
have been duly authorized and validly issued and are fully paid and
nonassessable.
(b) No outstanding shares of capital stock of the Seller have been
issued in violation of any purchase option, right of first refusal, preemptive
right, subscription right or any similar right under any provision of the laws
of South Africa, the certificate of incorporation or by-laws of the Seller or
any contract to which the Seller is bound, except for such violations which
would not have, individually or in the aggregate, a Material Adverse Effect on
the Seller.
Section 4.06. Financial Statements. The audited financial statements
and unaudited consolidated interim financial statements of the Seller fairly
present the consolidated financial position of the Seller as of the dates
thereof and their consolidated results of operations and cash flows for the
periods then ended (subject to normal year-end adjustments in the case of any
unaudited interim financial statements).
Section 4.07. No Undisclosed Material Liabilities. The Seller has no
other liabilities or obligations of any nature, other than:
(a) liabilities or obligations disclosed in the materials submitted to
Buyer;
(b) liabilities and obligations incurred in the ordinary course of
business since inception; and
(c) liabilities or obligations that would not have, individually or in
the aggregate, a Material Adverse Effect on the Seller.
Section 4.08. Compliance With Laws. The Seller is in compliance with
and, to the knowledge of the Seller, has not been charged with or given written
notice of any violation of, any applicable laws, except for failures to comply
or violations that would not have, individually or in the aggregate, a Material
Adverse Effect on the Seller or materially impair the ability of the Seller to
consummate the transactions contemplated by this Agreement and the Stock
Purchase Agreement.
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Section 4.09. Litigation. There is no action, suit or proceeding
pending against or, to the knowledge of the Seller, threatened against or
affecting, the Seller that would have, individually or in the aggregate, a
Material Adverse Effect on the Seller, nor is there any judgment outstanding
against the Seller or any Subsidiary of the Seller that would have a Material
Adverse Effect on the Seller or materially impair the ability of the Seller to
consummate the transactions contemplated by this Agreement and the Stock
Purchase Agreement.
Section 4.10. Absence Of Certain Changes. The business of the Seller
has been conducted in the ordinary course since inception and there has not been
any event, effect or development that has had, individually or in the aggregate,
a Material Adverse Effect on the Seller or would materially impair the ability
of the Seller to consummate the transactions contemplated by this Agreement and
the Stock Purchase Agreement.
Section 4.11. Intellectual Property. No claims are pending or, to the
knowledge of the Seller, threatened that the Seller is infringing or otherwise
adversely affecting the rights of any Person with respect to any Intellectual
Property Right, except for such claims that would not have, individually or in
the aggregate, a Material Adverse Effect on the Seller or would not materially
impair the ability of the Seller to consummate the transactions contemplated by
this Agreement and the Stock Purchase Agreement.
Section 4.12. No Ownership Of Shares. Seller nor any of its Affiliates
directly or indirectly beneficially owns any Shares of Buyer.
ARTICLE 5
COVENANTS OF THE SELLER
The Seller agrees that:
Section 5.01. Conduct Of The Seller. From the date hereof until the
Closing, the Seller will not take any Prohibited Action (as defined in the Stock
Purchase Agreement) without the consent of Buyer.
Section 5.02. No Solicitation. The Seller shall not, nor shall it
authorize or permit any officer, director or employee of, or any investment
banker, attorney or other advisor or representative of the Seller to, directly
or indirectly, solicit, initiate or encourage the submission of, any Third-Party
Change of Control Offer.
ARTICLE 6
COVENANTS OF THE BUYER
The Buyer agrees that:
Section 6.01. Reasonable Best Efforts. (a) Subject to the terms and
conditions of this Agreement, the Buyer will use its reasonable best 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 the transactions contemplated by this Agreement including, without
limitation, using its reasonable best efforts to cause the conditions to the
Offer to be satisfied as soon as reasonably possible and, subject to the terms
and conditions of this Agreement, consummating the Offer as soon as possible
after such conditions are satisfied or waived.
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Section 6.02. Certain Filings. The Buyer shall cooperate with in
connection with the preparation of the Company Disclosure Documents and any
filings required by the SEC or other regulating bodies, (ii) in determining
whether any action by or in respect of, or filing with, any governmental body,
agency, official, or authority is required, or any actions, consents, approvals
or waivers are required to be obtained from parties to any material contracts,
in connection with the consummation of the transactions contemplated by this
Agreement, and (iii) in taking such actions or making any such filings,
furnishing information required in connection therewith or with the Company
Disclosure Documents and seeking timely to obtain any such actions, consents,
approvals or waivers.
Section 6.03. Public Announcements. The Buyer will issue a press
release promptly after the execution of this Agreement. The Buyer will consult
with Seller before issuing any press release or making any public statement with
respect to this Agreement, the Stock Purchase Agreement or the transactions
contemplated hereby or thereby and, except as may be required by applicable law
or any listing agreement with any national securities exchange or automated
quotation system, will not issue any such press release or make any such public
statement prior to such consultation.
Section 6.04. Notices Of Certain Events. Each of the parties shall
promptly notify the other party of:
(a) any notice or other communication from any Person alleging that the
consent of such Person is or may be required in connection with the transactions
contemplated by this Agreement or the Stock Purchase Agreement; and
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by this Agreement or the Stock Purchase Agreement;
ARTICLE 7
---------
TERMINATION
-----------
Section 7.01. Termination. This Agreement may be terminated at any
time:
(a) by mutual written agreement of the Buyer and Seller;
(b) by either the Buyer or Sellers, if the Offer has not been
consummated on or before the Termination Date; PROVIDED that the right to extend
the Offer has not been so consummated by either party pursuant to Section
2.01(a);
(c) by the Sellers, if Buyer shall have failed to commence the Offer in
the time required by this Agreement;
(d) by Buyer, if (i) any of the representations or warranties of either
Seller contained in this Agreement or the Commercial Arrangements, disregarding
all qualifications and exceptions contained therein relating to materiality or
Material Adverse Effect, shall fail to be true and correct as of the date made
(or if expressly made as of an earlier date, as of such date), other than for
such failures to be true and correct that would not have, individually or in the
aggregate, a Material Adverse Effect on either Seller, (ii) the representations
and warranties of either Seller set forth herein shall fail to be true and
correct in all material respects as of the date made, (iii) either Seller shall
have breached or failed to perform in any material respect any of its
obligations under the Acquisition Agreement required to be performed on or prior
to such time, or (iv) either Seller shall have taken a Prohibited Action without
the consent of Buyer after the date of this Agreement; PROVIDED that such breach
of representation or warranty or breach or failure to perform such obligation
cannot be or has not been cured within 30 days after the giving of written
notice to the Sellers of such breach or failure to perform;
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(e) by either the Buyer or Sellers, if the party desiring to terminate
this Agreement pursuant to this Section 7.01 (other than pursuant to Section
7.01(a)) shall give notice of such termination to the other party.
(f) by either the Buyer or Sellers pursuant to the Unwind Provision as
set forth in Section 2.07(a) or 2.07(b).
Section 7.02. Effect Of Termination. If this Agreement is terminated
pursuant to Section 7.01, this Agreement shall become void and of no effect with
no liability on the part of any party (or any stockholder, director, officer,
employee, agent, consultant or representative of such party) to the other party
hereto, PROVIDED that such termination shall not relieve a party hereto from any
liability for damages incurred or suffered by the other party as a result of the
failure of such party's representations and warranties hereunder to be true or
the failure of such party to perform any covenant hereunder. The provisions of
Sections 7.02, 8.04, 8.06, 8.07 and 8.08 shall survive any termination hereof
pursuant to Section 7.01.
ARTICLE 8
MISCELLANEOUS
Section 8.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmission)
and shall be given,
if to the Buyer, to:
Maximum Dynamics, Inc.
0 X. Xxxxxxx Xxxxxx, Xxx 0000
Xxxxxxxx Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
Chief Financial Officer
Fax: (000) 000-0000
if to Seller, to:
Unilogic Solutions (Pty), Ltd.
XX Xxx 00000
Xxxxxx Xxxxx, Xxxxxxxxx
0000, Xxxxx Xxxxxx
Fax: __________________
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or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5 p.m. in the place of
receipt and such day is a Business Day in the place of receipt. Otherwise, any
such notice, request or communication shall be deemed not to have been received
until the next succeeding Business Day in the place of receipt.
Section 8.02. Survival. The representations and warranties and
agreements contained herein and in any certificate or other writing delivered
pursuant hereto shall not survive the Closing, except for the agreements set
forth in the final sentence of Section 2.01(a) and Sections 8.04, 8.05, 8.06,
8.07 and 8.08.
Section 8.03. Amendments; No Waivers. (a) Any provision of this
Agreement may be amended or waived prior to the Closing if, but only if, such
amendment or waiver is in writing and is signed, in the case of an amendment, by
each party to this Agreement or, in the case of a waiver, by each party against
whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
Section 8.04. Expenses. All costs and expenses incurred in connection
with this Agreement shall be paid by the party incurring such cost or expense.
Section 8.05. Successors And Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, PROVIDED that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto.
Section 8.06. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Colorado, without regard
to the conflicts of laws rules of such state.
Section 8.07. Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated hereby may be brought in
any federal court located in the State of Colorado or, to the extent no such
federal court has jurisdiction over such action, suit or proceeding, any
Colorado state court, and each of the parties hereby consents to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient form. Process in any such suit, action or proceeding
may be served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 9.01 shall
be deemed effective service of process on such party.
Section 8.08. Waiver Of Jury Trial. Each of the parties hereto hereby
irrevocably waives any and all right to trial by jury in any legal proceeding
arising out of or related to this agreement or the transactions contemplated
hereby.
Section 8.09. Counterparts; Effectiveness; Benefit. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto. No
provision of this Agreement is intended to confer any rights, benefits,
remedies, obligations, or liabilities hereunder upon any Person other than the
parties hereto and their respective successors and assigns.
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Section 8.10. Entire Agreement. This Agreement, the Confidentiality
Agreement, the Commercial Arrangements and the Stock Purchase Agreement
constitute the entire agreement between the parties with respect to the subject
matter of this Agreement and supersede all prior agreements and understandings,
both oral and written, between the parties with respect to the subject matter of
this Agreement.
Section 8.11. Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
Section 8.12. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
a determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent possible.
Section 8.13. Specific Performance. The parties hereto agree that
irreparable damage would occur if any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
or to enforce specifically the performance of the terms and provisions hereof in
any federal court located in the State of Colorado or, to the extent no such
federal court has jurisdiction over such proceeding, any Colorado state court,
in addition to any other remedy to which they are entitled at law or in equity.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
MAXIMUM DYNAMICS, INC. UNILOGIC SOLUTIONS (PTY), LTD.
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxxx Xxxxxxxx
------------------------------- -------------------------------
Name: Xxxx X. Xxxxxx Name: Xxxxxx Xxxxxxxx
Title: Chairman of the Board Title: Chief Executive Officer
