AGREEMENT AND PLAN OF AMALGAMATION
AMONG
XXXXXX EQUIPMENT, INC.
AND
4274458 CANADA, INC.
AND
PNEUTECH INC.
Dated as of December 22, 2004
TABLE OF CONTENTS
Section Page
ARTICLE I THE AMALGAMATION..................................................
1.1 The Amalgamation..................................................
ARTICLE II CLOSING AND TERMINATION..........................................
2.1 Closing Date......................................................
2.2 Termination of Agreement..........................................
2.3 Procedure Upon Termination........................................
2.4 Effect of Termination.............................................
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................
3.1 Organization and Good Standing....................................
3.2 Authorization of Agreement........................................
3.3 Capitalization....................................................
3.4 No Subsidiaries
3.5 Corporate Records.................................................
3.6 Conflicts; Consents of Third Parties..............................
3.7 Financial Statements..............................................
3.8 No Undisclosed Liabilities........................................
3.9 Absence of Certain Developments...................................
3.10 Taxes.............................................................
3.11 Real Property.....................................................
3.12 Tangible Personal Property........................................
3.13 Intangible Property...............................................
3.14 Material Contracts................................................
3.15 Employee Benefits.................................................
3.16 Labor.............................................................
3.17 Litigation........................................................
3.18 Compliance with Laws; Permits.....................................
3.19 Environmental Matters.............................................
3.20 Insurance.........................................................
3.21 Inventories; Receivables; Payables................................
3.22 Related Party Transactions........................................
3.23 Banks.............................................................
3.24 No Misrepresentation..............................................
3.25 Financial Advisors................................................
3.26 Patriot Act......
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER......................
4.1 Organization and Good Standing....................................
4.2 Authorization of Agreement........................................
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4.3 Conflicts; Consents of Third Parties..............................
4.4 Litigation........................................................
4.5 Investment Intention..............................................
4.6 Financial Advisors................................................
4.6 Acquisition Shares................................................
ARTICLE V COVENANTS.........................................................
5.1 Access to Information.............................................
5.2 Conduct of the Business Pending the Closing.......................
5.3 Consents..........................................................
5.4 Other Actions.....................................................
5.5 No Solicitation...................................................
5.6 Preservation of Records...........................................
5.7 Publicity.........................................................
5.8 Releases..........................................................
5.9 Use of Name.......................................................
ARTICLE VI CONDITIONS TO CLOSING............................................
6.1 Conditions Precedent to Obligations of Purchaser..................
6.2 Conditions Precedent to Obligations of the Company................
ARTICLE VII DOCUMENTS TO BE DELIVERED.......................................
7.1 Documents to be Delivered by the Company..........................
7.2 Documents to be Delivered by the Purchaser........................
ARTICLE VII INDEMNIFICATION.................................................
8.1 Indemnification...................................................
8.2 Limitations on Indemnification for Breaches of Representations
and Warranties..................................................
8.3 Indemnification Procedures........................................
ARTICLE IX MISCELLANEOUS....................................................
9.1 Payment of Sales, Use or Similar Taxes............................
9.2 Survival of Representations and Warranties........................
9.3 Expenses..........................................................
9.4 Specific Performance..............................................
9.5 Further Assurances................................................
9.6 Submission to Jurisdiction; Consent to Service of Process.........
9.7 Table of Contents and Headings....................................
9.8 Notices...........................................................
9.9 Severability......................................................
9.10 Binding Effect; Assignment........................................
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THIS AGREEMENT RELATES TO AN OFFERING OF SECURITIES IN AN OFFSHORE
TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED IN
REGULATION S UNDER THE 1933 ACT) PURSUANT TO REGULATION S UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). NONE
OF THE SECURITIES TO WHICH THIS AGREEMENT RELATES HAVE BEEN REGISTERED UNDER THE
1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY
BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S.
PERSONS (AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN
EACH CASE ONLY IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS. IN ADDITION,
HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
ACCORDANCE WITH THE 1933 ACT."
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AGREEMENT AND PLAN OF AMALGAMATION
AGREEMENT AND PLAN OF AMALGAMATION, dated as of December , 2004 (the
"Agreement"), among Xxxxxx Equipment, Inc., a corporation existing under the
laws of Delaware (the "Purchaser"), 4274458 Canada, Inc., a corporation formed
under the laws of Canada ("Acquisition"), and Pneutech Inc., a corporation
formed under the laws of Canada (the "Company").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the respective Boards of Directors of Purchaser, Acquisition and
the Company deem it advisable and in the best interests of the parties that
Acquisition amalgamate with and into the Company (the "Amalgamation"), pursuant
to the terms of this Agreement and the applicable provisions of the Canada
Business Corporations Act;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter contained, the parties hereby agree as follows:
Article I THE AMALGAMATION
1.1 The Amalgamation. At closing of the transaction contemplated hereby
(the "Closing"), Acquisition shall be merged with and into the Company pursuant
to this Agreement and Plan of Amalgamation and the separate corporate existence
of Acquisition shall cease and the Company, as it exists from and after the
Closing, shall be the surviving company (the "Surviving Company").
1.2 Effect of the Amalgamation. As of the date of the Amalgamation as set
forth in the Certificate of Amalgamation:
(i) the amalgamation of the Company and Acquisition and their
continuance as one corporation under the terms and conditions
prescribed in this Agreement shall become effective;
(ii) the property of each of the Company and Acquisition shall continue
to be the property of the Surviving Company;
(iii) the Surviving Company shall continue to be liable for the
obligations of each of the Company and Acquisition;
(iv) any existing cause of action, claim or liability to prosecution with
respect to either or both of the Company and Acquisition shall be
unaffected;
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(v) any civil, criminal or administrative action or proceeding pending
by or against the Company or Acquisition may be continued to be
prosecuted by or against the Surviving Company;
(vi) any conviction against or ruling, order or judgment in favour of or
against the Company or Acquisition may be enforced by or against the
Surviving Company; and
(vii) the articles of amalgamation of the Surviving Company are deemed to
be the articles of incorporation of the Surviving Company and the
Certificate of Amalgamation is deemed to be the Certificate of
Incorporation of the Surviving Company.
1.3 Certificate of Amalgamation; Bylaws; Directors and Officers.
(i) Name. - The name of the Surviving Company shall be PNEUTECH INC.
(ii) Restriction on business activities of the Surviving Company. - There
shall be no restriction or limit on the business activity which the
Surviving Company is authorized to carry on.
(iii) Registered office. - The place in Canada where the registered office
is to be situated is in the city of Mississauga, Province of
Ontario, and the registered office of the Surviving Company shall be
located at 000, Xxxxxxxx Xxxxxxxxx, Xxxx #0, in the City of
Mississauga, in the Province xx Xxxxxxx, X0X 0X0.
(iv) Authorized capital. - The authorized capital of the Surviving
Company shall consist of an unlimited number of Common Shares and
1,000 Preference Shares.
(v) Features of shares in the capital stock of the Surviving Company. -
The rights, privileges, restrictions and conditions attaching to the
shares of the Surviving Company are set forth in Schedule "2004-1"
attached hereto.
(vi) Restrictions on transfers. - The restrictions on shares transfers
are set forth in Schedule "2004-2" attached hereto.
(vii) Number of directors. - The number of directors of the Surviving
Company shall be a minimum of [1] and a maximum of [11], the precise
number to be determined from time to time by resolution of the board
of directors of the Surviving Company, and until the precise number
is so determined, such number shall be deemed to be [4].
(viii) Directors. - The first directors of the Surviving Company, shall be
the persons whose names, addresses and occupations appear below :
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Name Residence Address Occupation
Xxxxxxxx X. Xxxx 0000, Xxxxxxxx Xxxx Xxxxx Xxxxxxxxxxx
Xxxxxxxxxxx (Xxxxxxx)
X0X 0X0
Xxxxx Xxxxx 0000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxxxx
Xxxxxxxxx, XX 00000
Xxxxxxx Xxxxxxx
Xxxxx X. Xxxxx
The first directors of the Surviving Company shall hold office until the first
annual meeting of the shareholders of the Surviving Company or until their
successors are duly elected or appointed.
(ix) Fiscal year. - The fiscal year end of the Surviving Company shall be
October 31st, in each year.
(x) Special Provisions. - The special provisions (Other provisions) are
set forth in Schedule "2004-3" attached hereto.
(xi) By-laws. - The by-laws of the Surviving Company shall be identical
to those of the Company. A copy of the proposed by-laws are attached
hereto as Schedule "1.3".
1.4 Conversion of Securities. At the Effective Time, by virtue of the
Amalgamation and without any action on the part of Acquisition or the Company,
each share of capital stock of the Company ("Company Shares") that is issued and
outstanding at the Effective Time shall automatically be cancelled and
extinguished and converted, without any action on the part of the holder
thereof, into the right to receive at the time and in the amounts described in
this Agreement an amount of shares of the Purchaser equal to 1,250,000 divided
by the number of Company Shares outstanding immediately prior to Closing (the
"Acquisition Shares"). All such Company Shares, when so converted, shall no
longer be outstanding and shall automatically be cancelled and retired and shall
cease to exist, and each holder of a certificate representing any such shares
shall cease to have any rights with respect thereto, except the right to receive
the Acquisition Shares paid in consideration therefor upon the surrender of such
certificate in accordance with this Agreement.
1.5 Adherence with Applicable Securities Laws. The Company shareholders
acknowledge that they are acquiring the Acquisition Shares for investment
purposes and will not offer, sell or otherwise transfer, pledge or hypothecate
any of the Acquisition Shares issued to them (other than pursuant to an
effective Registration Statement under the Securities Act of 1933, as amended)
directly or indirectly unless:
(i) the sale is to the Purchaser;
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(ii) the sale is made pursuant to the exemption from registration
under the Securities Act of 1933,as amended, provided by Rule 144 thereunder; or
(iii) the Acquisition Shares are sold in a transaction that does not
require registration under the Securities Act of 1933, as amended, or any
applicable United States state laws and regulations governing the offer and sale
of securities, and the vendor has furnished to the Purchaser an opinion of
counsel to that effect or such other written opinion as may be reasonably
required by the Purchaser.
1.6 The Company acknowledges that the certificates representing the
Acquisition Shares shall bear the following legend:
NO SALE, OFFER TO SELL, OR TRANSFER OF THE SHARES REPRESENTED BY
THIS CERTIFICATE SHALL BE MADE UNLESS A REGISTRATION STATEMENT UNDER
THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED, IN RESPECT OF SUCH
SHARES IS THEN IN EFFECT OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SAID ACT IS THEN IN FACT APPLICABLE TO SAID SHARES.
Article II
CLOSING AND TERMINATION
2.1 Closing Date.
Subject to the satisfaction of the conditions set forth in Sections
7.1 and 7.2 hereof (or the waiver thereof by the party entitled to waive that
condition), the Closing of the sale and purchase of the Shares provided for in
Section 1.1 hereof shall take place at the offices of Sichenzia Xxxx Xxxxxxxx
Xxxxxxx LLP located at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or
at such other place as the parties may designate in writing) on December 31,
2004, or on such other date as the Company and the Purchaser may designate in
writing. The date on which the Closing shall be held is referred to in this
Agreement as the "Closing Date".
2.2 Termination of Agreement.
This Agreement may be terminated prior to the Closing as follows:
(a) At the election of any party on or after January 31, 2005, if the
Closing shall not have occurred by the close of business on such date, provided
that the terminating party is not in default of any of its obligations
hereunder;
(b) by mutual written consent of the parties; or
(c) by any party if there shall be in effect a final nonappealable order
of a governmental body of competent jurisdiction restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated hereby;
it being agreed that the parties hereto shall promptly appeal any adverse
determination which is not nonappealable (and pursue such appeal with reasonable
diligence).
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2.3 Procedure Upon Termination.
In the event of termination and abandonment by the Purchaser or the
Company, or both, pursuant to Section 2.2 hereof, written notice thereof shall
forthwith be given to the other party or parties, and this Agreement shall
terminate, and the Amalgamation hereunder shall be abandoned, without further
action by the Purchaser or the Company. If this Agreement is terminated as
provided herein each party shall redeliver all documents, work papers and other
material of any other party relating to the transactions contemplated hereby,
whether so obtained before or after the execution hereof, to the party
furnishing the same.
2.4 Effect of Termination.
In the event that this Agreement is validly terminated as provided
herein, then each of the parties shall be relieved of their duties and
obligations arising under this Agreement after the date of such termination and
such termination shall be without liability to the Purchaser, the Company or
Acquisition; provided, however, that the obligations of the parties set forth in
Section 8 hereof shall survive any such termination and shall be enforceable
hereunder; provided, further, however, that nothing in this Section 2.4 shall
relieve the Purchaser, Acquisition or the Company of any liability for a breach
of this Agreement.
Article III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company, 3156176 Canada Inc. and Xxxx Xxxx, hereby jointly and
severally represent and warrant to the Purchaser that:
3.1 Organization and Good Standing.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation as set forth
above and has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now conducted. The
Company is duly qualified or authorized to do business as a foreign corporation
and is in good standing under the laws of each jurisdiction in which it owns or
leases real property and each other jurisdiction in which the conduct of its
business or the ownership of its properties requires such qualification or
authorization, except where the failure to be so qualified would not have a
material adverse effect on the business, assets or financial condition of
Company and any subsidiaries taken as a whole ("Material Adverse Effect").
3.2 Authorization of Agreement.
The Company has all requisite power, authority and legal capacity to
execute and deliver this Agreement, and each other agreement, document, or
instrument or certificate contemplated by this Agreement or to be executed by
the Company in connection with the consummation of the transactions contemplated
by this Agreement (together with this Agreement, the "Company Documents"), and
to consummate the transactions contemplated hereby and thereby. This Agreement
has been, and each of the Company Documents will be at or prior to the Closing,
duly and validly executed and delivered by the Company and (assuming the due
authorization, execution and delivery by the other parties hereto and thereto)
this Agreement constitutes, and each of the Company Documents when so executed
and delivered will constitute, legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
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3.3 Capitalization.
(a) The authorized capital stock of the Company consists of an unlimited
number of Common shares (the "Common Shares"), an unlimited number of Preference
shares (the "Preference Shares"), an unlimited number of Special shares (the
"Special Shares") and an unlimited number of Class "A" Preferred shares (the
"Class "A" Preferred Shares"). As of the date hereof, there are 21,011.80 Common
Shares, 929 Preference Shares, 530,000 Special Shares, 250 Class "A" Preferred
Shares and 9,440.08 Warrants for Common Shares issued and outstanding. All of
the issued and outstanding shares of capital stock were duly authorized for
issuance and are validly issued, fully paid and non-assessable.
(b) Except as set forth on Schedule 3.3, there is no existing option,
warrant, call, right, commitment or other agreement of any character to which
the Company is a party requiring, and there are no securities of the Company
outstanding which upon conversion or exchange would require, the issuance, sale
or transfer of any additional shares of capital stock or other equity securities
of the Company or other securities convertible into, exchangeable for or
evidencing the right to subscribe for or purchase shares of capital stock or
other equity securities of the Company. Except as set forth on Schedule 3.3, the
Company is not a party to any voting trust or other voting agreement with
respect to any of the shares of capital stock or to any agreement relating to
the issuance, sale, redemption, transfer or other disposition of the capital
stock of the Company.
3.4 Subsidiaries. Schedule 3.4 hereto sets forth the name of each
subsidiary of the Company (each a "Subsidiary"), and, with respect to each
Subsidiary, the jurisdiction in which it is incorporated or organized, the
jurisdictions, if any, in which it is qualified to do business, the number of
shares of its authorized capital stock, the number and class of shares thereof
duly issued and outstanding, the names of all stockholders or other equity
owners and the number of shares of stock owned by each stockholder or the amount
of equity owned by each equity owner. The outstanding shares of capital stock or
equity interests of each Subsidiary are validly issued, fully paid and
non-assessable, and all such shares or other equity interests represented as
being owned by Company are owned by it free and clear of any and all liens,
pledges, encumbrances, charges, agreements or claims of any kind whatsoever,
except as set forth in Schedule 4.4 hereto. No shares of capital stock are held
by any Subsidiary as treasury stock. There is no existing option, warrant, call,
commitment or agreement to which any Subsidiary is a party requiring, and there
are no convertible securities of any Subsidiary outstanding which upon
conversion would require, the issuance of any additional shares of capital stock
or other equity interests of any Subsidiary or other securities convertible into
shares of capital stock or other equity interests of any Subsidiary or other
equity security of any Subsidiary. Each Subsidiary is a duly organized and
validly existing corporation or other entity in good standing under the laws of
the jurisdiction of its reorganization and is duly qualified to do business and
is in good standing under the laws of (i) each jurisdiction in which it owns or
leases real property and (ii) each other jurisdiction in which the conduct of
its business or the ownership of its assets requires such qualification, except
where a failure to be so qualified would not have a Material Adverse Effect on
the business, assets or financial condition of Company and its Subsidiaries
taken as a whole. Each Subsidiary has all requisite corporate power and
authority to own its properties and carry on its business as presently
conducted.
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3.5 Corporate Records.
(a) The Company has delivered to the Purchaser true, correct and complete
copies of the certificates of incorporation (each certified by the appropriate
official of the applicable jurisdiction of organization) and by-laws (each
certified by the secretary, assistant secretary or other appropriate officer) or
comparable organizational documents of the Company and each of its Subsidiaries.
(b) The minute books of the Company and each Subsidiary previously made
available to the Purchaser contain complete and accurate records of all meetings
and accurately reflect all other corporate action of the stockholders and board
of directors (including committees thereof) of the Company and its Subsidiaries.
The stock certificate books and stock transfer ledgers of the Company and its
Subsidiaries previously made available to the Purchaser are true, correct and
complete.
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3.6 Conflicts; Consents of Third Parties.
(a) None of the execution and delivery by the Company of this Agreement
and the Company Documents, the consummation of the transactions contemplated
hereby or thereby, or compliance by the Company with any of the provisions
hereof or thereof will (i) conflict with, or result in the breach of, any
provision of the certificate of incorporation or by-laws or comparable
organizational documents of the Company or any Subsidiary; (ii) conflict with,
violate, result in the breach or termination of, or constitute a default under
any note, bond, mortgage, indenture, license, agreement or other instrument or
obligation to which the Company or any Subsidiary is a party or by which any of
them or any of their respective properties or assets is bound; (iii) violate any
statute, rule, regulation, order or decree of any governmental body or authority
by which the Company or any Subsidiary is bound; or (iv) result in the creation
of any lien, charge or encumbrance or any kind or nature ("Lien") upon the
properties or assets of the Company or any Subsidiary except, in case of clauses
(ii), (iii) and (iv), for such violations, breaches or defaults as would not,
individually or in the aggregate, have a Material Adverse Effect.
(b) No consent, waiver, approval, order, permit or authorization of, or
declaration or filing with, or notification to, any person, entity or
governmental body is required on the part of the Company or any Subsidiary in
connection with the execution and delivery of this Agreement or the Company
Documents, or the compliance by the Company as the case may be, with any of the
provisions hereof or thereof.
3.7 Financial Statements.
The Company has delivered to the Purchaser copies of (i) the audited
consolidated balance sheet of the Company and its Subsidiaries as at October 31,
2003 and October 31, 2004, and the related consolidated statements of income and
of cash flows of the Company and its Subsidiaries for the five years then ended
(such statements, including the related notes and schedules thereto, are
referred to herein as the "Financial Statements"). Each of the Financial
Statements is complete and correct in all material respects, has been prepared
in accordance with Canadian generally accepted accounting principles ("GAAP")
(subject to normal year-end adjustments in the case of the unaudited statements)
and in conformity with the practices consistently applied by the Company without
modification of the accounting principles used in the preparation thereof and
presents fairly the financial position, results of operations and cash flows of
the Company and its Subsidiaries as at the dates and for the periods indicated.
For the purposes hereof, the balance sheet of the Company and its
Subsidiaries as at October 31, 2004 is referred to as the "Balance Sheet" and
October 31, 2004 is referred to as the "Balance Sheet Date".
3.8 No Undisclosed Liabilities.
Neither the Company nor any Subsidiary has any indebtedness, obligations
or liabilities of any kind (whether accrued, absolute, contingent or otherwise,
and whether due or to become due) that would have been required to be reflected
in, reserved against or otherwise described on the Balance Sheet or in the notes
thereto in accordance with GAAP which was not fully reflected in, reserved
against or otherwise described in the Balance Sheet or the notes thereto or was
not incurred in the ordinary course of business consistent with past practice
since the Balance Sheet Date.
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3.9 Absence of Certain Developments. Except as expressly contemplated by
this Agreement or as set forth on Schedule 3.9, since the Balance Sheet Date:
(i) there has not been any Material Adverse Change nor has there occurred
any event which is reasonably likely to result in a Material Adverse Change;
(ii) there has not been any damage, destruction or loss, whether or not
covered by insurance, with respect to the property and assets of the Company or
any Subsidiary having a replacement cost of more than $25,000 for any single
loss or $50,000 for all such losses;
(iii) there has not been any declaration, setting aside or payment of any
dividend or other distribution in respect of any shares of capital stock of the
Company or any repurchase, redemption or other acquisition by the Company or any
Subsidiary of any outstanding shares of capital stock or other securities of, or
other ownership interest in, the Company or any Subsidiary;
(iv) neither the Company nor any Subsidiary has awarded or paid any
bonuses to employees of the Company or any Subsidiary with respect to the fiscal
year ended October 31, 2004, except to the extent accrued on the Balance Sheet
or entered into any employment, deferred compensation, severance or similar
agreement (nor amended any such agreement) or agreed to increase the
compensation payable or to become payable by it to any of the Company's or any
Subsidiary's directors, officers, employees, agents or representatives or agreed
to increase the coverage or benefits available under any severance pay,
termination pay, vacation pay, company awards, salary continuation for
disability, sick leave, deferred compensation, bonus or other incentive
compensation, insurance, pension or other employee benefit plan, payment or
arrangement made to, for or with such directors, officers, employees, agents or
representatives (other than normal increases in the ordinary course of business
consistent with past practice and that in the aggregate have not resulted in a
material increase in the benefits or compensation expense of the Company and its
Subsidiaries taken as a whole);
(v) there has not been any change by the Company or any Subsidiary in
accounting or tax reporting principles, methods or policies;
(vi) neither the Company nor any Subsidiary has entered into any
transaction or Contract or conducted its business other than in the ordinary
course consistent with past practice;
(vii) neither the Company nor any Subsidiary has failed to promptly pay
and discharge current liabilities except where disputed in good faith by
appropriate proceedings;
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(viii) neither the Company nor any Subsidiary has made any loans, advances
or capital contributions to, or investments in, any person or paid any fees or
expenses to any affiliate;
(ix) neither the Company nor any Subsidiary has mortgaged, pledged or
subjected to any lien any of its assets, or acquired any assets or sold,
assigned, transferred, conveyed, leased or otherwise disposed of any assets of
the Company or any Subsidiary, except for assets acquired or sold, assigned,
transferred, conveyed, leased or otherwise disposed of in the ordinary course of
business consistent with past practice;
(x) neither the Company nor any Subsidiary has discharged or satisfied any
lien, or paid any obligation or liability (fixed or contingent), except in the
ordinary course of business consistent with past practice and which, in the
aggregate, would not be material to the Company and its Subsidiaries taken as a
whole;
(xi) neither the Company nor any Subsidiary has canceled or compromised
any debt or claim or amended, canceled, terminated, relinquished, waived or
released any Contract or right except in the ordinary course of business
consistent with past practice and which, in the aggregate, would not be material
to the Company and its Subsidiaries taken as a whole;
(xii) neither the Company nor any Subsidiary has made or committed to make
any capital expenditures or capital additions or betterments in excess of
$20,000 individually or $40,000 in the aggregate;
(xiii) neither the Company nor any Subsidiary has instituted or settled
any material legal proceeding; and
(xiv) the Company has not agreed to do anything set forth in this Section
3.9.
3.10 Taxes.
(a) Except as set forth on Schedule 3.10, (A) all material tax returns
required to be filed by or on behalf of the Company have been properly prepared
and duly and timely filed with the appropriate taxing authorities in all
jurisdictions in which such tax returns are required to be filed (after giving
effect to any valid extensions of time in which to make such filings), and all
such tax returns were true, complete and correct in all material respects; (B)
all amounts shown on such tax returns (including interest and penalties) as due
from the Company have been fully and timely paid, and adequate reserves or
accruals for taxes have been provided in the Balance Sheet with respect to any
period for which tax returns have not yet been filed or for which taxes are not
yet due and owing; and (C) the Company has not executed or filed with any taxing
authority any agreement, waiver or other document or arrangement extending or
having the effect of extending the period for assessment or collection of taxes
(including, but not limited to, any applicable statute of limitation), and no
power of attorney with respect to any tax matter is currently in force.
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(b) The Company has complied in all material respects with all applicable
laws, rules and regulations relating to the payment and withholding of Taxes and
has duly and timely withheld from employee salaries, wages and other
compensation and has paid over to the appropriate taxing authorities all amounts
required to be so withheld and paid over for all periods under all applicable
laws.
(c) Purchaser has received complete copies of (A) all material income or
franchise other returns of the Company relating to the taxable periods since
January 1, 1998, and (B) any audit report issued within the last three years
relating to any material Taxes due from or with respect to the Company its
income, assets or operations. All income and other tax returns filed by or on
behalf of the Company for the taxable years ended on the respective dates set
forth on Schedule 3.10 have been examined by the relevant taxing authority or
the statute of limitations with respect to such tax returns has expired.
(d) Schedule 3.10 lists all material types of taxes paid and material
types of tax returns filed by or on behalf of the Company. Except as set forth
on Schedule 3.10, no claim has been made by a taxing authority in a jurisdiction
where the Company does not file tax returns such that it is or may be subject to
taxation by that jurisdiction.
(e) Except as set forth on Schedule 3.10, all deficiencies asserted or
assessments made as a result of any examinations by any taxing authority of the
tax returns of or covering or including the Company have been fully paid, and
there are no other audits or investigations by any taxing authority in progress,
nor has the Company received any notice from any taxing authority that it
intends to conduct such an audit or investigation. No issue has been raised by a
federal, state, local or foreign taxing authority in any current or prior
examination which, by application of the same or similar principles, could
reasonably be expected to result in a proposed deficiency for any subsequent
taxable period.
(f) There are no liens as a result of any unpaid taxes upon any of the
assets of the Company.
3.11 Real Property.
(a) Schedule 3.11(a) sets forth a complete list of all real property and
interests in real property leased by the Company and its Subsidiaries
(individually, a "Real Property Lease" and the real properties specified in such
leases being referred to herein individually as a "Company Property" and
collectively as the "Company Properties") as lessee or lessor. Company Property
constitutes all interests in real property currently used or currently held for
use in connection with the business of the Company and its Subsidiaries and
which are necessary for the continued operation of the business of the Company
and its Subsidiaries as the business is currently conducted. The Company and its
Subsidiaries have a valid and enforceable leasehold interest under each of the
Real Property Leases, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or in
equity), and neither the Company nor any Subsidiary has received any written
notice of any default or event that with notice or lapse of time, or both, would
constitute a default by the Company or any Subsidiary under any of the Real
Property Leases. All of the Company Property, buildings, fixtures and
improvements thereon owned or leased by the Company and its Subsidiaries are in
good operating condition and repair (subject to normal wear and tear). The
Company has delivered or otherwise made available to the Purchaser true, correct
and complete copies of the Real Property Leases, together with all amendments,
modifications or supplements, if any, thereto.
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(b) The Company and its Subsidiaries have all material certificates of
occupancy and permits of any governmental body necessary or useful for the
current use and operation of each Company Property, and the Company and its
Subsidiaries have fully complied with all material conditions of the permits
applicable to them. No default or violation, or event that with the lapse of
time or giving of notice or both would become a default or violation, has
occurred in the due observance of any permit.
3.12 Tangible Personal Property.
(a) Schedule 3.12(a) sets forth all leases of personal property ("Personal
Property Leases") involving annual payments in excess of $25,000 relating to
personal property used in the business of the Company or any of its Subsidiaries
or to which the Company or any of its Subsidiaries is a party or by which the
properties or assets of the Company or any of its Subsidiaries is bound. The
Company delivered or otherwise made available to the Purchaser true, correct and
complete copies of the Personal Property Leases, together with all amendments,
modifications or supplements thereto.
(b) The Company and each of its Subsidiaries have a valid leasehold
interest under each of the Personal Property Leases under which it is a lessee,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and subject, as
to enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity), and there is no
default under any Personal Property Lease by the Company or any of its
Subsidiaries or, to the best knowledge of the Company, by any other party
thereto, and no event has occurred that with the lapse of time or the giving of
notice or both would constitute a default thereunder.
(c) The Company and its Subsidiaries have good and marketable title to all
of the items of tangible personal property reflected in the Balance Sheet
(except as sold or disposed of subsequent to the date thereof in the ordinary
course of business consistent with past practice), free and clear of any and all
Liens, other than as set forth on Schedule 3.12. All such items of tangible
personal property which, individually or in the aggregate, are material to the
operation of the business of the Company and its Subsidiaries are in good
condition and in a state of good maintenance and repair (ordinary wear and tear
excepted) and are suitable for the purposes used.
(d) All of the items of tangible personal property used by the Company and
its Subsidiaries under the Personal Property Leases are in good condition and
repair (ordinary wear and tear excepted) and are suitable for the purposes used.
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3.13 Intangible Property.
Schedule 3.13 contains a complete and correct list of each patent,
trademark, trade name, service xxxx and copyright owned or used by Company
and/or its Subsidiaries as well as all registrations thereof and pending
applications therefor, and each license or other agreement relating thereto.
Except as set forth on Schedule 3.13, each of the foregoing is owned by the
party shown on such Schedule as owning the same, free and clear of all
mortgages, claims, liens, security interests, charges and encumbrances and is in
good standing and not the subject of any challenge. There have been no claims
made neither the Company nor any Subsidiary has received any notice or otherwise
knows or has reason to believe that any of the foregoing is invalid or conflicts
with the asserted rights of others. The Company and each of its Subsidiaries
possesses all patents, patent licenses, trade names, trademarks, service marks,
brand marks, brand names, copyrights, know-how, formulate and other proprietary
and trade rights necessary for the conduct of its business as now conducted, not
subject to any restrictions and without any known conflict with the rights of
others and neither the Company nor any of its Subsidiaries has forfeited or
otherwise relinquished any such patent, patent license, trade name, trademark,
service xxxx, brand xxxx, brand name, copyright, know-how, formulate or other
proprietary right necessary for the conduct of its business as conducted on the
date hereof.
3.14 Material Contracts.
Schedule 3.14 sets forth all of the following contracts, agreements,
commitments ("Contracts") to which the Company or any of its Subsidiaries is a
party or by which it is bound (collectively, the "Material Contracts"): (i)
Contracts with any current officer or director of the Company or any of its
Subsidiaries; (ii) Contracts with any labor union or association representing
any employee of the Company or any of its Subsidiaries; (iii) Contracts pursuant
to which any party is required to purchase or sell a stated portion of its
requirements or output from or to another party; (iv) Contracts for the sale of
any of the assets of the Company or any of its Subsidiaries other than in the
ordinary course of business or for the grant to any person of any preferential
rights to purchase any of its assets; (v) joint venture agreements; (vi)
material Contracts containing covenants of the Company or any of its
Subsidiaries not to compete in any line of business or with any person in any
geographical area or covenants of any other person not to compete with the
Company or any of its Subsidiaries in any line of business or in any
geographical area; (vii) Contracts relating to the acquisition by the Company or
any of its Subsidiaries of any operating business or the capital stock of any
other person; (viii) Contracts relating to the borrowing of money; or (ix) any
other Contracts, other than Real Property Leases, which involve the expenditure
of more than $50,000 in the aggregate or $25,000 annually or require performance
by any party more than one year from the date hereof. There have been made
available to the Purchaser, its affiliates and their representatives true and
complete copies of all of the Material Contracts. Except as set forth on
Schedule 3.14, all of the Material Contracts and other agreements are in full
force and effect and are the legal, valid and binding obligation of the Company
and/or its Subsidiaries, enforceable against them in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and subject, as
to enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity). Except as set forth
on Schedule 3.14, neither the Company nor any Subsidiary is in default in any
material respect under any Material Contracts, nor, to the knowledge of the
Company, is any other party to any Material Contract in default thereunder in
any material respect.
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3.15 Employee Benefits.
(a) Schedule 3.15(a) sets forth a complete and correct list of (i) all
employee benefit plans, and any other pension plans or employee benefit
arrangements, programs or payroll practices (including, without limitation,
severance pay, vacation pay, company awards, salary continuation for disability,
sick leave, retirement, deferred compensation, bonus or other incentive
compensation, stock purchase arrangements or policies, hospitalization, medical
insurance, life insurance and scholarship programs) maintained by the Company or
any of its Subsidiaries or to which the Company or any of its Subsidiaries
contributes or is obligated to contribute thereunder with respect to employees
of the Company ("Employee Benefit Plans") and (ii) all employee pension plans
maintained by the Company or any of its Subsidiaries or any trade or business
(whether or not incorporated) which are under control, or which are treated as a
single employer, with Company ("Pension Plans").
(b) All contributions and premiums required by law or by the terms of any
Employee Benefit Plan or Pension Plan have been timely made (without regard to
any waivers granted with respect thereto) to any funds or trusts established
thereunder or in connection therewith, and no accumulated funding deficiencies
exist in any of such plans.
(c) True, correct and complete copies of the following documents, with
respect to each of the Employee Benefit Plans and Pension Plans (as applicable),
have been delivered to the Purchaser (A) any plans and related trust documents,
and all amendments thereto, and (B) the most recent financial statements and
actuarial valuations for the past three years of any such plans.
3.16 Labor.
(a) Except as set forth on Schedule 3.16(a), neither the Company nor any
of its Subsidiaries is party to any labor or collective bargaining agreement and
there are no labor or collective bargaining agreements which pertain to
employees of the Company or any of its Subsidiaries. The Company has delivered
or otherwise made available to the Purchaser true, correct and complete copies
of the labor or collective bargaining agreements listed on Schedule 3.16(a),
together with all amendments, modifications or supplements thereto.
(b) Except as set forth on Schedule 3.16(b), no employees of the Company
or any of its Subsidiaries are represented by any labor organization. No labor
organization or group of employees of the Company or any of its Subsidiaries has
made a pending demand for recognition, and there are no representation
proceedings or petitions seeking a representation proceeding presently pending
or, to the best knowledge of the Company, threatened to be brought or filed.
There is no organizing activity involving the Company or any of its Subsidiaries
pending or, threatened by any labor organization or group of employees of the
Company or any of its Subsidiaries.
16
(c) There are no (i) strikes, work stoppages, slowdowns, lockouts or
arbitrations or (ii) material grievances or other labor disputes pending or
threatened against or involving the Company or any of its Subsidiaries. There
are no unfair labor practice charges, grievances or complaints pending or, to
the best knowledge of the Company, threatened by or on behalf of any employee or
group of employees of the Company.
3.17 Litigation.
Except as set forth in Schedule 3.17, there is no suit, action,
proceeding, investigation, claim or order pending or, to the knowledge of the
Company, overtly threatened against the Company or any of its Subsidiaries (or
to the knowledge of the Company, pending or threatened, against any of the
officers, directors or key employees of the Company or any of its Subsidiaries
with respect to their business activities on behalf of the Company), or to which
the Company or any of its Subsidiaries is otherwise a party, which, if adversely
determined, would have a Material Adverse Effect, before any court, or before
any governmental department, commission, board, agency, or instrumentality; nor
to the knowledge of the Company is there any reasonable basis for any such
action, proceeding, or investigation. Neither the Company nor any Subsidiary is
subject to any judgment, order or decree of any court or governmental agency
except to the extent the same are not reasonably likely to have a Material
Adverse Effect and neither the Company nor any Subsidiary is engaged in any
legal action to recover monies due it or for damages sustained by it.
3.18 Compliance with Laws; Permits.
(a) The Company and each of its Subsidiaries is in compliance with all
laws applicable to the Company and its Subsidiaries or to the conduct of the
business or operations of the Company and its Subsidiaries or the use of their
respective properties (including any leased properties) and assets, except for
such non-compliances as would not, individually or in the aggregate, have a
Material Adverse Effect. The Company and each of its Subsidiaries has all
governmental permits and approvals from state, federal or local authorities
which are required for the Company and each of its Subsidiaries to operate its
business, except for those the absence of which would not, individually or in
the aggregate, have a Material Adverse Effect.
3.19 Environmental Matters.
Except as set forth on Schedule 3.19 hereto:
(a) the operations of the Company and each of its Subsidiaries are in
compliance with all applicable laws, rules, regulations, orders, treaties,
statutes, and codes promulgated by any governmental entity which prohibit,
regulate or control any hazardous material or any hazardous material activity
("Environmental Laws") and all permits issued pursuant to Environmental Laws or
otherwise;
(b) the Company and each of its Subsidiaries has obtained all permits
required under all applicable Environmental Laws necessary to operate its
business;
17
(c) neither the Company nor any of its Subsidiaries is not the subject of
any outstanding written order or Contract with any governmental authority or
person respecting Environmental Laws or any violation or potential violations
thereof;
(d) neither the Company nor any of its Subsidiaries has received any
written communication alleging either or both that the Company or any of its
Subsidiaries may be in violation of any Environmental Law, or any permit issued
pursuant to Environmental Law, or may have any liability under any Environmental
Law;
3.20 Insurance.
Schedule 3.20 sets forth a complete and accurate list of all policies of
insurance of any kind or nature covering the Company or any of its Subsidiaries
or any of their respective employees, properties or assets, including, without
limitation, policies of life, disability, fire, theft, workers compensation,
employee fidelity and other casualty and liability insurance. All such policies
are in full force and effect, and, to the Company's knowledge, neither the
Company nor any of its Subsidiaries is in default of any provision thereof,
except for such defaults as would not, individually or in the aggregate, have a
Material Adverse Effect.
3.21 Inventories; Receivables; Payables.
(a) The inventories of the Company and its Subsidiaries are in good and
marketable condition, and are saleable in the ordinary course of business.
Adequate reserves have been reflected in the Balance Sheet for obsolete or
otherwise unusable inventory, which reserves were calculated in a manner
consistent with past practice consistently applied.
(b) All accounts receivable of the Company and its Subsidiaries have
arisen from bona fide transactions in the ordinary course of business consistent
with past practice. All accounts receivable of the Company and its Subsidiaries
reflected on the Balance Sheet are good and collectible at the aggregate
recorded amounts thereof, net of any applicable reserve for returns or doubtful
accounts reflected thereon, which reserves are adequate and were calculated in a
manner consistent with past practice consistently applied. All accounts
receivable arising after the Balance Sheet Date are good and collectible at the
aggregate recorded amounts thereof, net of any applicable reserve for returns or
doubtful accounts, which reserves are adequate and were calculated in a manner
consistent with past practice consistently applied.
(c) All accounts payable of the Company and its Subsidiaries reflected in
the Balance Sheet or arising after the date thereof are the result of bona fide
transactions in the ordinary course of business and have been paid or are not
yet due and payable.
3.22 Related Party Transactions.
Except as set forth on Schedule 3.22, no shareholder of the Company nor
any of their respective affiliates has borrowed any moneys from or has
outstanding any indebtedness or other similar obligations to the Company or and
Subsidiary. Except as set forth in Schedule 3.22, neither the Company, any
Subsidiary of the Company, any affiliate of the Company nor any officer or
employee of any of them (i) owns any direct or indirect interest of any kind in,
or controls or is a director, officer, employee or partner of, or consultant to,
or lender to or borrower from or has the right to participate in the profits of,
any person or party which is (A) a competitor, supplier, customer, landlord,
tenant, creditor or debtor of the Company or any of its Subsidiaries, (B)
engaged in a business related to the business of the Company or any of its
Subsidiaries, or (C) a participant in any transaction to which the Company or
any of its Subsidiaries is a party or (ii) is a party to any Contract with the
Company or any of its Subsidiaries.
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3.23 Banks.
Schedule 3.23 contains a complete and correct list of the names and
locations of all banks in which Company or any Subsidiary has accounts or safe
deposit boxes and the names of all persons authorized to draw thereon or to have
access thereto. Except as set forth on Schedule 4.25, no person holds a power of
attorney to act on behalf of the Company or any Subsidiary.
3.24 No Misrepresentation.
No representation or warranty contained in this Agreement or in any
schedule hereto or in any certificate or other instrument furnished by the
Company to the Purchaser pursuant to the terms hereof, contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained herein or therein not misleading.
3.25 Financial Advisors.
Except as set forth on Schedule 3.25, no person has acted, directly or
indirectly, as a broker, finder or financial advisor for the Company in
connection with the transactions contemplated by this Agreement and no Person is
entitled to any fee or commission or like payment in respect thereof.
19
3.26 Patriot Act.
The Company certifies that, to the best of the Company's knowledge, the
Company has not been designated, and is not owned or controlled, by a "suspected
terrorist" as defined in Executive Order 13224. The Company hereby acknowledges
that the Purchaser seeks to comply with all applicable laws concerning money
laundering and related activities. In furtherance of those efforts, the Company
hereby represent, warrant and agree that: (i) none of the cash or property owned
by the Company has been or shall be derived from, or related to, any activity
that is deemed criminal under United States law; and (ii) no contribution or
payment by the Company has, and this Agreement will not, cause the Company or
the Purchaser to be in violation of the United States Bank Secrecy Act, the
United States International Money Laundering Control Act of 1986 or the United
States International Money Laundering Abatement and Anti-Terrorist Financing Act
of 2001.
3.27 Investment Representations
(a) The shareholder of the Company are outside the United States;
(b) The shareholders of the Company are not aware of any advertisement of
any of the shares be issued hereunder;
(c) The shareholders of the Company will not acquire the shares as a
result of, and will not itself engage in, any "directed selling efforts" (as
defined in Regulation S under the 0000 Xxx) in the United States in respect of
the shares which would include any activities undertaken for the purpose of, or
that could reasonably be expected to have the effect of, conditioning the market
in the United States for the resale of the shares; provided, however, that the
shareholders may sell or otherwise dispose of the shares pursuant to
registration of the shares pursuant to the 1933 Act and any applicable state and
provincial securities laws or under an exemption from such registration
requirements and as otherwise provided herein;
(d) The shareholders agree that the Company will refuse to register any
transfer of the shares not made in accordance with the provisions of Regulation
S, pursuant to an effective registration statement under the 1933 Act or
pursuant to an available exemption from the registration requirements of the
1933 Act and in accordance with applicable state and provincial securities laws;
and
(e) The shareholders understand and agree that offers and sales of any of
the shares, prior to the expiration of a period of one year after the date of
transfer of the shares (the "Distribution Compliance Period"), shall only be
made in compliance with the safe harbor provisions set forth in Regulation S,
pursuant to the registration provisions of the 1933 Act or an exemption
therefrom, and that all offers and sales after the Distribution Compliance
Period shall be made only in compliance with the registration provisions of the
1933 Act or an exemption therefrom and in each case only in accordance with all
applicable securities laws;
20
(f) The shareholders understand and agree not to engage in any hedging
transactions involving the new Shares, prior to the end of the Distribution
Compliance Period unless such transactions are in compliance with the provisions
of the 1933 Act;
(g) The shareholders hereby acknowledge that that upon the issuance
thereof, and until such time as the same is no longer required under the
applicable securities laws and regulations, the certificates representing any of
the shares will bear a legend in substantially the following form:
"THESE SECURITIES WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT
U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). ACCORDINGLY, NONE OF
THE SECURITIES TO WHICH THIS CERTIFICATE RELATES HAVE BEEN REGISTERED UNDER THE
1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY
BE OFFERED OR SOLD IN THE UNITED STATES OR, DIRECTLY OR INDIRECTLY, TO U.S.
PERSONS (AS DEFINED HEREIN) EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING
TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE
WITH THE 0000 XXX."
(h) The shareholders hereby acknowledge and agree to the Company making a
notation on its records or giving instructions to the registrar and transfer
agent of the Company in order to implement the restrictions on transfer set
forth and described herein.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser hereby represents and warrants to the Company, as follows:
4.1 Organization and Good Standing.
The Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware.
4.2 Authorization of Agreement.
The Purchaser has full corporate power and authority to execute and
deliver this Agreement and each other agreement, document, instrument or
certificate contemplated by this Agreement or to be executed by the Purchaser in
connection with the consummation of the transactions contemplated hereby and
thereby (the "Purchaser Documents"), and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by the
Purchaser of this Agreement and each Purchaser Document have been duly
authorized by all necessary corporate action on behalf of the Purchaser. This
Agreement has been, and each Purchaser Document will be at or prior to the
Closing, duly executed and delivered by the Purchaser and (assuming the due
authorization, execution and delivery by the other parties hereto and thereto)
this Agreement constitutes, and each Purchaser Document when so executed and
delivered will constitute, legal, valid and binding obligations of the
Purchaser, enforceable against the Purchaser in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
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4.3 Conflicts; Consents of Third Parties.
(a) Neither of the execution and delivery by the Purchaser of this
Agreement and of the Purchaser Documents, nor the compliance by the Purchaser
with any of the provisions hereof or thereof will (i) conflict with, or result
in the breach of, any provision of the certificate of incorporation or by-laws
of the Purchaser, (ii) conflict with, violate, result in the breach of, or
constitute a default under any note, bond, mortgage, indenture, license,
agreement or other obligation to which the Purchaser is a party or by which the
Purchaser or its properties or assets are bound or (iii) violate any statute,
rule, regulation, order or decree of any governmental body or authority by which
the Purchaser is bound, except, in the case of clauses (ii) and (iii), for such
violations, breaches or defaults as would not, individually or in the aggregate,
have a material adverse effect on the business, properties, results of
operations, prospects, conditions (financial or otherwise) of the Purchaser and
its subsidiaries, taken as a whole.
(b) No consent, waiver, approval, Order, Permit or authorization of, or
declaration or filing with, or notification to, any Person or Governmental Body
is required on the part of the Purchaser in connection with the execution and
delivery of this Agreement or the Purchaser Documents or the compliance by
Purchaser with any of the provisions hereof or thereof.
4.4 Litigation.
There are no Legal Proceedings pending or, to the best knowledge of the
Purchaser, threatened that are reasonably likely to prohibit or restrain the
ability of the Purchaser to enter into this Agreement or consummate the
transactions contemplated hereby.
4.5 Investment Intention.
The Purchaser is acquiring the Company Shares for its own account, for
investment purposes only and not with a view to the distribution (as such term
is used in Section 2(11) of the Securities Act of 1933, as amended (the
"Securities Act") thereof. Purchaser understands that the Shares have not been
registered under the Securities Act and cannot be sold unless subsequently
registered under the Securities Act or an exemption from such registration is
available.
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4.6 Financial Advisors.
No Person has acted, directly or indirectly, as a broker, finder or
financial advisor for the Purchaser in connection with the transactions
contemplated by this Agreement and no person is entitled to any fee or
commission or like payment in respect thereof.
4.7 Acquisition Shares.
The Acquisition Shares when delivered to the holders of Company Shares
pursuant to the Amalgamation shall be validly issued and outstanding as fully
paid and non-assessable shares and the Acquisition Shares shall be transferable
upon the books of the Purchaser, in all cases subject to the provisions and
restrictions of all applicable securities laws.
ARTICLE V
COVENANTS
5.1 Access to Information.
The Company agrees that, prior to the Closing Date, the Purchaser shall be
entitled, through its officers, employees and representatives (including,
without limitation, its legal advisors and accountants), to make such
investigation of the properties, businesses and operations of the Company and
its Subsidiaries and such examination of the books, records and financial
condition of the Company and its Subsidiaries as it reasonably requests and to
make extracts and copies of such books and records. Any such investigation and
examination shall be conducted during regular business hours and under
reasonable circumstances, and the Company shall cooperate, and shall cause the
Company and its Subsidiaries to cooperate, fully therein. No investigation by
the Purchaser prior to or after the date of this Agreement shall diminish or
obviate any of the representations, warranties, covenants or agreements of the
Company contained in this Agreement or the Company Documents. In order that the
Purchaser may have full opportunity to make such physical, business, accounting
and legal review, examination or investigation as it may reasonably request of
the affairs of the Company and its Subsidiaries, the Company shall cause the
officers, employees, consultants, agents, accountants, attorneys and other
representatives of the Company and its Subsidiaries to cooperate fully with such
representatives in connection with such review and examination.
5.2 Conduct of the Business Pending the Closing.
(a) Except as otherwise expressly contemplated by this Agreement or with
the prior written consent of the Purchaser, the Company and its Subsidiaries
shall:
(i) conduct the respective businesses of the Company and its
Subsidiaries only in the ordinary course consistent with past practice;
(ii) use its best efforts to (A) preserve its present business
operations, organization (including, without limitation, management and the
sales force) and goodwill of the Company and its Subsidiaries and (B) preserve
its present relationship with Persons having business dealings with the Company
and its Subsidiaries;
23
(iii) maintain (A) all of the assets and properties of the Company
and its Subsidiaries in their current condition, ordinary wear and tear excepted
and (B) insurance upon all of the properties and assets of the Company and its
Subsidiaries in such amounts and of such kinds com-parable to that in effect on
the date of this Agreement;
(iv) (A) maintain the books, accounts and records of the Company and
its Subsidiaries in the ordinary course of business consistent with past
practices, (B) continue to collect accounts receivable and pay accounts payable
utilizing normal procedures and without discounting or accelerating payment of
such accounts, and (C) comply with all contractual and other obligations
applicable to the operation of the Company and its Subsidiaries; and
(v) comply in all material respects with applicable Laws.
(b) Except as otherwise expressly contemplated by this Agreement or with
the prior written consent of the Purchaser, the Company and its Subsidiaries
shall not:
(i) declare, set aside, make or pay any dividend or other
distribution in respect of the capital stock of the Company or repurchase,
redeem or otherwise acquire any outstanding shares of the capital stock or other
securities of, or other ownership interests in, the Company or any of its
Subsidiaries;
(ii) transfer, issue, sell or dispose of any shares of capital stock
or other securities of the Company or any of its Subsidiaries or grant options,
warrants, calls or other rights to purchase or otherwise acquire shares of the
capital stock or other securities of the Company or any of its Subsidiaries;
(iii) effect any recapitalization, reclassification, stock split or
like change in the capitalization of the Company or any of its Subsidiaries;
(iv) amend the certificate of incorporation or by-laws of the
Company or any of its Subsidiaries;
(v) (A) materially increase the annual level of compensation of any
employee of the Company or any of its Subsidiaries, (B) increase the annual
level of compensation payable or to become payable by the Company or any of its
Subsidiaries to any of their respective executive officers, (C) grant any
unusual or extraordinary bonus, benefit or other direct or indirect compensation
to any employee, director or consultant, other than in the ordinary course
consistent with past practice and in such amounts as are fully reserved against
in the Financial Statements, (D) increase the coverage or benefits available
under any (or create any new) severance pay, termination pay, vacation pay,
company awards, salary continuation for disability, sick leave, deferred
compensation, bonus or other incentive compensation, insurance, pension or other
employee benefit plan or arrangement made to, for, or with any of the directors,
officers, employees, agents or representatives of the Company or any of its
Subsidiaries or otherwise modify or amend or terminate any such plan or
arrangement or (E) enter into any employment, deferred compensation, severance,
consulting, non-competition or similar agreement (or amend any such agreement)
to which the Company or any of its Subsidiaries is a party or involving a
director, officer or employee of the Company or any of its Subsidiaries in his
or her capacity as a director, officer or employee of the Company or any of its
Subsidiaries;
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(vi) except for trade payables and for indebtedness for borrowed
money incurred in the ordinary course of business and consistent with past
practice, borrow monies for any reason or draw down on any line of credit or
debt obligation, or become the guarantor, surety, endorser or otherwise liable
for any debt, obligation or liability (contingent or otherwise) of any other
Person;
(vii) subject to any lien (except for liens that do not materially
impair the use of the property subject thereto in their respective businesses as
presently conducted), any of the properties or assets (whether tangible or
intangible) of the Company or any of its Subsidiaries;
(viii) acquire any material properties or assets or sell, assign,
transfer, convey, lease or otherwise dispose of any of the material properties
or assets (except for fair consideration in the ordinary course of business
consistent with past practice) of the Company and its Subsidiaries except as
previously consented to by the Purchaser;
(ix) cancel or compromise any debt or claim or waive or release any
material right of the Company or any of its Subsidiaries except in the ordinary
course of business consistent with past practice;
(x) enter into any commitment for capital expenditures out of the
ordinary course;
(xi) permit the Company or any of its Subsidiaries to enter into any
transaction or to make or enter into any Contract which by reason of its size or
otherwise is not in the ordinary course of business consistent with past
practice;
(xii) permit the Company or any of its Subsidiaries to enter into or
agree to enter into any amalgamation or consolidation with, any corporation or
other entity, and not engage in any new business or invest in, make a loan,
advance or capital contribution to, or otherwise acquire the securities of any
other person;
(xiii) except for transfers of cash pursuant to normal cash
management practices, permit the Company or any of its Subsidiaries to make any
investments in or loans to, or pay any fees or expenses to, or enter into or
modify any contract with, any affiliate of the Company; or
(xiv) agree to do anything prohibited by this Section 5.2 or
anything which would make any of the representations and warranties of the
Company in this Agreement or the Company Documents untrue or incorrect in any
material respect as of any time through and including the Effective Time.
25
5.3 Consents.
The Company shall use its best efforts, and the Purchaser shall cooperate
with the Company, to obtain at the earliest practicable date all consents and
approvals required to consummate the transactions contemplated by this
Agreement, including, without limitation, the consents and approvals referred to
in Section 3.6(b) hereof; provided, however, that neither the Company nor the
Purchaser shall be obligated to pay any consideration therefor to any third
party from whom consent or approval is requested.
5.4 Other Actions.
Each of the Company and the Purchaser shall use its best efforts to (i)
take all actions necessary or appropriate to consummate the transactions
contemplated by this Agreement and (ii) cause the fulfillment at the earliest
practicable date of all of the conditions to their respective obligations to
consummate the transactions contemplated by this Agreement.
5.5 No Solicitation.
Neither the Company nor any of the Company's directors, officers,
employees, representatives or agents (collectively, the "Representatives") will,
directly or indirectly, (i) discuss, negotiate, undertake, authorize, recommend,
propose or enter into, either as the proposed surviving, merged, acquiring or
acquired corporation, any transaction involving a merger, consolidation,
business combination, purchase or disposition of any amount of the assets or
capital stock or other equity interest in the Company or any of its Subsidiaries
other than the transactions contemplated by this Agreement (an "Acquisition
Transaction"), (ii) facilitate, encourage, solicit or initiate discussions,
negotiations or submissions of proposals or offers in respect of an Acquisition
Transaction, (iii) furnish or cause to be furnished, to any Person, any
information concerning the business, operations, properties or assets of the
Company or any of its Subsidiaries in connection with an Acquisition
Transaction, or (iv) otherwise cooperate in any way with, or assist or
participate in, facilitate or encourage, any effort or attempt by any other
Person to do or seek any of the foregoing. The Company will inform the Purchaser
in writing immediately following the receipt by the Company or any
Representative of any proposal or inquiry in respect of any Acquisition
Transaction.
5.6 Preservation of Records.
The Company and the Purchaser agree that each of them shall preserve and
keep the records held by it relating to the business of the Company and its
Subsidiaries for a period of three years from the Closing Date and shall make
such records and personnel available to the other as may be reasonably required
by such party in connection with, among other things, any insurance claims by,
legal proceedings against or governmental investigations of the Company or the
Purchaser or any of their affiliates or in order to enable the Company or the
Purchaser to comply with their respective obligations under this Agreement and
each other agreement, document or instrument contemplated hereby or thereby.
5.7 Publicity.
Neither the Company nor the Purchaser shall issue any press release or
public announcement concerning this Agreement or the transactions contemplated
hereby without obtaining the prior written approval of the other party hereto,
which approval will not be unreasonably withheld or delayed, unless, in the sole
judgment of the Purchaser or the Company, disclosure is otherwise required by
applicable law or by the applicable rules of any stock exchange on which the
Purchaser lists securities, provided that, to the extent required by applicable
law, the party intending to make such release shall use its best efforts
consistent with such applicable law to consult with the other party with respect
to the text thereof.
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5.8 Use of Name.
The Company hereby agrees that upon the consummation of the transactions
contemplated hereby, the Purchaser and the Company shall have the sole right to
the use of the name "Pneutech Inc."
5.9 Board of Directors.
The Board of Directors of the Company from and after the Closing Date
shall consist of Xxxxxxxx Xxxx, Xxxxx Xxxxx, Xxxxxxx Xxxxxxx and Xxxxx Xxxxx.
5.10 Purchase of Preference and Special Shares.
Concurrently with the Closing of the Amalgamation, the Company shall
purchase from 3156176 Canada Inc. (i) 929 preference shares of the Company for
an aggregate purchase price of CD$100,000, and (ii) 530,000 special shares for
an aggregate purchase price of CD$530,000.
5.11 Agreement with RoyNat Capital.
Prior to the Closing Date, the Company will enter into a definitive
agreement with RoyNat Capital, Inc., pursuant to which the Company's obligations
will be restructured in a manner satisfactory to both RoyNat Capital, Inc. and
the Company (the "RoyNat Agreement").
ARTICLE VI
CONDITIONS TO CLOSING
6.1 Conditions Precedent to Obligations of Purchaser.
The obligation of the Purchaser to consummate the transactions
contemplated by this Agreement is subject to the fulfillment, on or prior to the
Closing Date, of each of the following conditions (any or all of which may be
waived by the Purchaser in whole or in part to the extent permitted by
applicable law):
(a) all representations and warranties of the Company contained herein
shall be true and correct as of the date hereof;
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(b) all representations and warranties of the Company contained herein
qualified as to materiality shall be true and correct, and the representations
and warranties of the Company contained herein not qualified as to materiality
shall be true and correct in all material respects, at and as of the Closing
Date with the same effect as though those representations and warranties had
been made again at and as of that time;
(c) the Company shall have performed and complied in all material respects
with all obligations and covenants required by this Agreement to be performed or
complied with by them on or prior to the Closing Date;
(d) the Purchaser shall have been furnished with certificates (dated the
Closing Date and in form and substance reasonably satisfactory to the Purchaser)
executed by the Company certifying as to the fulfillment of the conditions
specified in Sections 6.1(a), 6.1(b) and 6.1(c) hereof;
(e) there shall not have been or occurred any Material Adverse Change;
(f) the Company shall have obtained all consents and waivers referred to
in Section 3.6 hereof, in a form reasonably satisfactory to the Purchaser, with
respect to the transactions contemplated by this Agreement and the Company
Documents;
(g) no legal proceedings shall have been instituted or threatened or claim
or demand made against the Company or any of its Subsidiaries, or the Purchaser
seeking to restrain or prohibit or to obtain substantial damages with respect to
the consummation of the transactions contemplated hereby, and there shall not be
in effect any Order by a Governmental Body of competent jurisdiction
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby;
(h) the Purchaser shall have received the written resignations of each
director of the Company, other than Xxxxxxxx Xxxx;
(i) the Purchaser shall have received the written consent of Laurus Master
Fund, Ltd. to Purchaser entering into this Agreement and the RoyNat Agreement
and the terms and conditions thereof; and
(j) the Purchaser shall have received all schedules required to be
delivered pursuant to the terms of this Agreement and the information contained
therein shall be satisfactory to the Purchaser in all respects.
6.2 Conditions Precedent to Obligations of the Company.
The obligations of the Company to consummate the transactions contemplated
by this Agreement are subject to the fulfillment, prior to or on the Closing
Date, of each of the following conditions (any or all of which may be waived by
the Company in whole or in part to the extent permitted by applicable law):
28
(a) all representations and warranties of the Purchaser contained
herein shall be true and correct as of the date hereof;
(b) all representations and warranties of the Purchaser contained
herein qualified as to materiality shall be true and correct, and all
representations and warranties of the Purchaser contained herein not qualified
as to materiality shall be true and correct in all material respects, at and as
of the Closing Date with the same effect as though those representations and
warranties had been made again at and as of that date;
(c) the Purchaser shall have performed and complied in all material
respects with all obligations and covenants required by this Agreement to be
performed or complied with by Purchaser on or prior to the Closing Date;
(d) the Company shall have been furnished with certificates (dated
the Closing Date and in form and substance reasonably satisfactory to the
Company) executed by the Chief Executive Officer and Chief Financial Officer of
the Purchaser certifying as to the fulfillment of the conditions specified in
Sections 6.2(a), 6.2(b) and 6.2(c); and
(e) no legal proceedings shall have been instituted or threatened or
claim or demand made against the Company or any of its Subsidiaries, or the
Purchaser seeking to restrain or prohibit or to obtain substantial damages with
respect to the consummation of the transactions contemplated hereby, and there
shall not be in effect any Order by a Governmental Body of competent
jurisdiction restraining, enjoining or otherwise prohibiting the consummation of
the transactions contemplated hereby.
ARTICLE VII
DOCUMENTS TO BE DELIVERED
7.1 Documents to be Delivered by the Company.
At the Closing, the Company shall deliver, or cause to be delivered, to
the Purchaser the following:
(a) the certificates referred to in Section 6.1(d) hereof;
(b) copies of all consents and waivers referred to in Section 6.1(f)
hereof;
(c) written resignations of each of the directors of the Company, other
than Xxxxxxxx Xxxx;
(d) such other documents as the Purchaser shall reasonably request.
7.2 Documents to be Delivered by the Purchaser.
At the Closing, the Purchaser shall deliver to the Company the following:
29
(a) the Acquisition Shares;
(b) the certificates referred to in Section 6.2(d) hereof;
(c) the payments to be made to 3156176 Canada Inc.; and
(d) such other documents as the Company shall reasonably request.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification.
(a) Subject to Section 8.2 hereof, 3156176 Canada Inc. and Xxxx Xxxx
hereby agrees to jointly and severally indemnify and hold the Purchaser, the
Company, and their respective directors, officers, employees, affiliates,
agents, successors and assigns (collectively, the "Purchaser Indemnified
Parties") harmless from and against:
(i) any and all liabilities of the Company or any of its
Subsidiaries of every kind, nature and description, absolute or contingent,
existing as against the Company or any of its Subsidiaries prior to and
including the Closing Date or thereafter coming into being or arising by reason
of any state of facts existing, or any transaction entered into, on or prior to
the Closing Date, except to the extent that the same have been fully provided
for in the Balance Sheet or disclosed in the notes thereto or were incurred in
the ordinary course of business between the Balance Sheet date and the Closing
Date;
(ii) subject to Section 8.3, any and all losses, liabilities,
obligations, damages, costs and expenses based upon, attributable to or
resulting from the failure of any representation or warranty of the Company set
forth in Section 3 hereof, or any representation or warranty contained in any
certificate delivered by or on behalf of the Company pursuant to this Agreement,
to be true and correct in all respects as of the date made;
(iii) any and all losses, liabilities, obligations, damages, costs
and expenses based upon, attributable to or resulting from the breach of any
covenant or other agreement on the part of the Company under this Agreement;
(iv) any and all notices, actions, suits, proceedings, claims,
demands, assessments, judgments, costs, penalties and expenses, including
attorneys' and other professionals' fees and disbursements (collectively,
"Expenses") incident to any and all losses, liabilities, obligations, damages,
costs and expenses with respect to which indemnification is provided hereunder
(collectively, "Losses").
(b) Subject to Section 8.2, Purchaser hereby agrees to indemnify and hold
the shareholders of the Company and their respective Affiliates, agents,
successors and assigns (collectively, the "Company Indemnified Parties")
harmless from and against:
30
(i) subject to Section 8.3, any and all Losses based upon,
attributable to or resulting from the failure of any representation or warranty
of the Purchaser set forth in Section 4 hereof, or any representation or
warranty contained in any certificate delivered by or on behalf of the Purchaser
pursuant to this Agreement, to be true and correct as of the date made;
(ii) any and all Losses based upon, attributable to or resulting
from the breach of any covenant or other agreement on the part of the Purchaser
under this Agreement or arising from the ownership or operation of the Company
from and after the Closing Date; and
(iii) any and all Expenses incident to the foregoing.
8.2 Limitations on Indemnification for Breaches of Representations and
Warranties.
An indemnifying party shall not have any liability under Section
8.1(a)(ii) or Section 8.1(b)(i) hereof unless the aggregate amount of Losses and
Expenses to the indemnified parties finally determined to arise thereunder based
upon, attributable to or resulting from the failure of any representation or
warranty to be true and correct, other than the representations and warranties
set forth in Sections 3.7 or 3.10 hereof, exceeds $15,000 (the "Basket") and, in
such event, the indemnifying party shall be required to pay the entire amount of
such Losses and Expenses in excess of $15,000 (the "Deductible")*
8.3 Indemnification Procedures.
(a) In the event that any Legal Proceedings shall be instituted or that
any claim or demand ("Claim") shall be asserted by any Person in respect of
which payment may be sought under Section 8.1 hereof (regardless of the Basket
or the Deductible referred to above), the indemnified party shall reasonably and
promptly cause written notice of the assertion of any Claim of which it has
knowledge which is covered by this indemnity to be forwarded to the indemnifying
party. The indemnifying party shall have the right, at its sole option and
expense, to be represented by counsel of its choice, which must be reasonably
satisfactory to the indemnified party, and to defend against, negotiate, settle
or otherwise deal with any Claim which relates to any Losses indemnified against
hereunder. If the indemnifying party elects to defend against, negotiate, settle
or otherwise deal with any Claim which relates to any Losses indemnified against
hereunder, it shall within five (5) days (or sooner, if the nature of the Claim
so requires) notify the indemnified party of its intent to do so. If the
indemnifying party elects not to defend against, negotiate, settle or otherwise
deal with any Claim which relates to any Losses indemnified against hereunder,
fails to notify the indemnified party of its election as herein provided or
contests its obligation to indemnify the indemnified party for such Losses under
this Agreement, the indemnified party may defend against, negotiate, settle or
otherwise deal with such Claim. If the indemnified party defends any Claim, then
the indemnifying party shall reimburse the indemnified party for the Expenses of
defending such Claim upon submission of periodic bills. If the indemnifying
party shall assume the defense of any Claim, the indemnified party may
participate, at his or its own expense, in the defense of such Claim; provided,
however, that such indemnified party shall be entitled to participate in any
such defense with separate counsel at the expense of the indemnifying party if,
(i) so requested by the indemnifying party to participate or (ii) in the
reasonable opinion of counsel to the indemnified party, a conflict or potential
conflict exists between the indemnified party and the indemnifying party that
would make such separate representation advisable; and provided, further, that
the indemnifying party shall not be required to pay for more than one such
counsel for all indemnified parties in connection with any Claim. The parties
hereto agree to cooperate fully with each other in connection with the defense,
negotiation or settlement of any such Claim.
--------
* Purchasers should consider whether materiality exception sin the
representations and warranties should be eliminated in computing the Deductible.
31
(b) After any final judgment or award shall have been rendered by a court,
arbitration board or administrative agency of competent jurisdiction and the
expiration of the time in which to appeal therefrom, or a settlement shall have
been consummated, or the indemnified party and the indemnifying party shall have
arrived at a mutually binding agreement with respect to a Claim hereunder, the
indemnified party shall forward to the indemnifying party notice of any sums due
and owing by the indemnifying party pursuant to this Agreement with respect to
such matter and the indemnifying party shall be required to pay all of the sums
so due and owing to the indemnified party by wire transfer of immediately
available funds within 10 business days after the date of such notice.
(c) The failure of the indemnified party to give reasonably prompt notice
of any Claim shall not release, waive or otherwise affect the indemnifying
party's obligations with respect thereto except to the extent that the
indemnifying party can demonstrate actual loss and prejudice as a result of such
failure.
ARTICLE IX
MISCELLANEOUS
9.1 Payment of Sales, Use or Similar Taxes.
All sales, use, transfer, intangible, recordation, documentary stamp or
similar taxes or charges, of any nature whatsoever, applicable to, or resulting
from, the transactions contemplated by this Agreement shall be borne by the
Company.
9.2 Survival of Representations and Warranties.
The parties hereto hereby agree that the representations and warranties
contained in this Agreement or in any certificate, document or instrument
delivered in connection herewith, shall survive the execution and delivery of
this Agreement, and the Closing hereunder, regardless of any investigation made
by the parties hereto; provided, however, that any claims or actions with
respect thereto (other than claims for indemnifications with respect to the
representation and warranties contained in Sections 4.7 and 4.11 which shall
survive for periods coterminous with any applicable statutes of limitation)
shall terminate unless within twenty-four (24) months after the Closing Date
written notice of such claims is given to the Company or such actions are
commenced.
32
9.3 Expenses.
Except as otherwise provided in this Agreement, the Company and the
Purchaser shall each bear its own expenses incurred in connection with the
negotiation and execution of this Agreement and each other agreement, document
and instrument contemplated by this Agreement and the consummation of the
transactions contemplated hereby and thereby, it being understood that in no
event shall the Company bear any of such costs and expenses.
9.4 Specific Performance.
The Company acknowledges and agrees that the breach of this Agreement
would cause irreparable damage to the Purchaser and that the Purchaser will not
have an adequate remedy at law. Therefore, the obligations of the Company under
this Agreement, shall be enforceable by a decree of specific performance issued
by any court of competent jurisdiction, and appropriate injunctive relief may be
applied for and granted in connection therewith. Such remedies shall, however,
be cumulative and not exclusive and shall be in addition to any other remedies
which any party may have under this Agreement or otherwise.
9.5 Further Assurances.
The Company and the Purchaser each agrees to execute and deliver such
other documents or agreements and to take such other action as may be reasonably
necessary or desirable for the implementation of this Agreement and the
consummation of the transactions contemplated hereby.
9.6 Submission to Jurisdiction; Consent to Service of Process.
(a) The parties hereto hereby irrevocably submit to the non-exclusive
jurisdiction of any federal or state court located within the State of Wisconsin
over any dispute arising out of or relating to this Agreement or any of the
transactions contemplated hereby and each party hereby irrevocably agrees that
all claims in respect of such dispute or any suit, action proceeding related
thereto may be heard and determined in such courts. The parties hereby
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of venue of any
such dispute brought in such court or any defense of inconvenient forum for the
maintenance of such dispute. Each of the parties hereto agrees that a judgment
in any such dispute may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.
(b) Each of the parties hereto hereby consents to process being served by
any party to this Agreement in any suit, action or proceeding by the mailing of
a copy thereof in accordance with the provisions of Section 9.10.
33
9.7 Entire Agreement; Amendments and Waivers.
This Agreement (including the schedules and exhibits hereto) represents
the entire understanding and agreement between the parties hereto with respect
to the subject matter hereof and can be amended, supplemented or changed, and
any provision hereof can be waived, only by written instrument making specific
reference to this Agreement signed by the party against whom enforcement of any
such amendment, supplement, modification or waiver is sought. No action taken
pursuant to this Agreement, including without limitation, any investigation by
or on behalf of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representation, warranty, covenant or
agreement contained herein. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a further or
continuing waiver of such breach or as a waiver of any other or subsequent
breach. No failure on the part of any party to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of such right, power or remedy
by such party preclude any other or further exercise thereof or the exercise of
any other right, power or remedy. All remedies hereunder are cumulative and are
not exclusive of any other remedies provided by law.
9.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Canada.
9.9 Table of Contents and Headings.
The table of contents and section headings of this Agreement are for
reference purposes only and are to be given no effect in the construction or
interpretation of this Agreement.
9.10 Notices.
All notices and other communications under this Agreement shall be in
writing and shall be deemed given when delivered personally or mailed by
certified mail, return receipt requested, to the parties (and shall also be
transmitted by facsimile to the Persons receiving copies thereof) at the
following addresses (or to such other address as a party may have specified by
notice given to the other party pursuant to this provision):
(a) Purchaser:
Xxxxxx Equipment, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxx, Chairman
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Copy to:
Xxxxxx X. Xxxx, Esq.
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
34
(b) Company:
Pneutech Inc.
000 Xxxxxxxx Xxxx, Xxxx 0
Xxxxxxxxxxx, Xxxxxxx X0X 0X0
Phone: (000) 000-0000
Facsimile: (000) 000-0000
Copy to:
Me Jacques Xxxxxxx
Xxxxxxx Xxxxxx Xxxxxxx Xxxxxxx
Xxxxx Xxxxxx
000, boul. Xxxxxx-Xxxxxxxx
Bureau 000
Xxxxxxxxx (Xx) Xxxxxx, X0X 0X0
Phone: (000)-000-0000
Fax: (000)-000-0000
9.11 Severability.
If any provision of this Agreement is invalid or unenforceable, the
balance of this Agreement shall remain in effect.
9.12 Binding Effect; Assignment.
This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and permitted assigns. Nothing in this
Agreement shall create or be deemed to create any third party beneficiary rights
in any person or entity not a party to this Agreement except as provided below.
No assignment of this Agreement or of any rights or obligations hereunder may be
made by either the Company or the Purchaser (by operation of law or otherwise)
without the prior written consent of the other parties hereto and any attempted
assignment without the required consents shall be void; provided, however, that
the Purchaser may assign this Agreement and any or all rights or obligations
hereunder (including, without limitation, the Purchaser's rights to purchase the
Shares and the Purchaser's rights to seek indemnification hereunder) to any
Affiliate of the Purchaser. Upon any such permitted assignment, the references
in this Agreement to the Purchaser shall also apply to any such assignee unless
the context otherwise requires.
[INTENTIONALLY BLANK]
35
XXXXXX EQUIPMENT, INC.
By: /s/ XXXXX XXXXX
------------------------------
Xxxxx Xxxxx,
Chairman
4274458 CANADA, INC.
By: /s/ XXXXX XXXXX
------------------------------
Xxxxx Xxxxx,
Chairman
PNEUTECH INC.
By: /s/ XXXXXXXX XXXX
------------------------------
Xxxxxxxx Xxxx,
President
36
