EXHIBIT 2.01
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made this
16 day of August, 2000, by and among Hi-Tech Corporation, a Delaware
corporation ("Hi-Tech"); Hi-Tech Merger, Co., a Utah corporation (Merger Co),
Rubicon Medical, Inc., a Utah corporation, ("Rubicon"); and the persons listed
in Exhibit A-1 hereof who are the owners of record of all the issued and
outstanding shares of Rubicon who execute and deliver the Agreement ("Rubicon
Shareholders"), based on the following:
Recitals
Hi-Tech wishes to acquire all the issued and outstanding shares of
Rubicon and merge Rubicon with and into Hi-Tech. As a condition of the
acquisition, Hi-Tech will merge with and into Merger Co. When referred to in
this Agreement, unless the contents otherwise require, "Hi-Tech" shall refer
collectively to Hi-Tech Corporation, the Delaware corporation, and Hi-Tech
Merger Co., the Utah corporation. The parties intend for this Agreement to
represent the terms and conditions of such reorganization, which Agreement the
parties hereby adopt.
Agreement
Based on the stated premises, which are incorporated herein by reference,
and for and in consideration of the mutual covenants and agreements
hereinafter set forth, the mutual benefits to the parties to be derived
herefrom, and other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, it is hereby agreed as follows:
ARTICLE I
MERGER
1.01 The Merger. Rubicon will be merged with and into Merger Co.,
which shall survive the merger as the Surviving Corporation. The issued and
outstanding shares of Rubicon (the "Shares") shall be converted into shares of
Hi-Tech's common stock, par value $0.001 per share (the "Hi-Tech Common
Stock"), as follows:
(a) Each Rubicon Share outstanding on the effective date of the
merger shall be converted into thirty six million (36,000,000) shares of Hi-
Tech Common Stock (the "Exchange Ratio"), on the effective date of the merger;
except that, any "dissenting Shares" of Rubicon shall receive payment from
Rubicon, upon the completion of the merger, in accordance with the provisions
of the Utah Revised Business Corporation Act. Dissenting Shares means any
shares of Rubicon for which the holder thereof has exercised his or her
appraisal rights under the Utah Revised Business Corporation Act. Each share
of Rubicon preferred stock outstanding on the merger shall be converted into
one share of Hi Tech preferred stock which shall have the same rights,
privileges and preferences as the Rubicon preferred stock.
(b) Hi-Tech shall not issue any fractional shares or interest in
connection with the foregoing conversion. If any holder of Rubicon Shares
would otherwise be entitled to a fractional share upon exchange thereof, Hi-
Tech shall round the number of shares of its Common Stock to be issued to such
member to the nearest whole share.
(c) After the effective date of the merger, each holder of Rubicon
Shares shall, upon the surrender of the certificates representing such Shares
to the registrar and transfer agent of Hi-Tech, be entitled to receive a
certificate or certificates evidencing shares of the Hi-Tech Common Stock as
provided herein. On the effective date of the merger, all Rubicon Shares
shall be canceled and all rights in respect thereof shall cease.
1.02 Adjustments to Exchange Ratio. For all relevant purposes of the
merger of Rubicon into Hi-Tech, the number of shares of Hi-Tech Common Stock
to be issued and delivered pursuant to this Agreement shall be appropriately
adjusted to take into account any stock split, stock dividend, reverse stock
split except for the proposed reverse split set forth in Section 4.01,
recapitalization, or similar change in the Hi-Tech Common Stock which may
occur between the date of the execution of this Agreement and the date of
delivery of such shares.
1.03 Delivery of Certificates by Rubicon Shareholders. The transfer
of Rubicon Shares by the Rubicon Shareholders shall be effected by the
delivery to Hi-Tech at the Closing (as set forth in Section 1.05 hereof) of
certificates representing the transferred Shares endorsed in blank or
accompanied by stock powers executed in blank, with all signatures medallion
guaranteed and with all necessary transfer taxes and other revenue stamps
affixed and acquired at the Rubicon Shareholders' expense.
1.04 Further Assurances. At the Closing and from time to time
thereafter, the Rubicon Shareholders shall execute such additional instruments
and take such other action as Hi-Tech may reasonably request, without undue
cost to the Rubicon Shareholders in order to more effectively sell, transfer,
and assign clear title and ownership in the Rubicon Shares to Hi-Tech.
1.05 Closing and Parties. The Closing contemplated hereby shall be
held at a mutually agreed upon time and place on or before September 3, 2000,
or on another date to be agreed to in writing by the parties (the "Closing
Date"). The Agreement may be closed at any time following approval by a
majority of the shareholders of Hi-Tech Common Stock as set forth in Section
4.02 hereof and the Rubicon Shareholders as set forth in Section 5.02. The
Closing may be accomplished by wire, express mail, overnight courier,
conference telephone call or as otherwise agreed to by the respective parties
or their duly authorized representatives.
1.06 Closing Events.
(a) Hi-Tech Deliveries. Subject to fulfillment or waiver of the
conditions set forth in Article IV, Hi-Tech shall deliver to Rubicon at
Closing all the following:
(i) A certificate of good standing from the secretary of state of
Delaware, issued as of a date within five days prior to the Closing Date,
certifying that Hi-Tech is in good standing as a corporation in the State of
Delaware;
(ii) A certificate of merger from the secretary of state of Utah
certifying that Hi-Tech has been merged with and into Merger Co.
(iii) Incumbency and specimen signature certificates dated the Closing
Date with respect to the officers of Hi-Tech executing this Agreement and any
other document delivered pursuant hereto on behalf of Hi-Tech;
(iv) Copies of the resolutions of Hi-Tech's board of directors and
shareholder minutes or consents authorizing the execution and performance of
this Agreement and the contemplated transactions, certified by the secretary
or an assistant secretary of Hi-Tech as of the Closing Date;
(v) The certificate contemplated by Section 4.03, duly executed by the
chief executive officer of Hi-Tech;
(vi) The certificate contemplated by Section 4.04, dated the Closing
Date, signed by the chief executive officer of Hi-Tech;
(vii) Certificates for thirty six million (36,000,000) shares of Hi-Tech
Common Stock in the names of the Rubicon Shareholders and in the amounts set
forth in Exhibit "A;" and
In addition to the above deliveries, Hi-Tech shall take all steps and
actions as Rubicon and Rubicon Shareholders may reasonably request or as may
otherwise be reasonably necessary to consummate the transactions contemplated
hereby.
(b) Rubicon Deliveries. Subject to fulfillment or waiver of the
conditions set forth in Article V, Rubicon and/or Rubicon Stockholder's shall
deliver to Hi-Tech at Closing all the following:
(i) A certificate of good standing from the secretary of state of
Utah, issued as of a date within five days prior to the Closing Date
certifying that Rubicon is in good standing as a corporation in the State of
Utah;
(ii) Incumbency and specimen signature certificates dated the Closing
Date with respect to the officers of Rubicon executing this Agreement and any
other document delivered pursuant hereto on behalf of Rubicon;
(iii) Copies of resolutions of the board of directors and of the
stockholders of Rubicon authorizing the execution and performance of this
Agreement and the contemplated transactions, certified by the secretary or an
assistant secretary of Rubicon as of the Closing Date;
(iv) The certificate contemplated by Section 5.03, executed by the
chief executive officer of Rubicon; and
(v) The certificate contemplated by Section 5.04, dated the Closing
Date, signed by the chief executive officer of Rubicon.
In addition to the above deliveries, Rubicon shall take all steps and
actions as Hi-Tech may reasonably request or as may otherwise be reasonably
necessary to consummate the transactions contemplated hereby.
1.07 Effective Date. As soon as practicable following consummation
of the transactions contemplated hereby on the Closing Date, Articles of
Merger setting forth such matters as required by the provisions of the
corporate statute of the State of Utah to complete the merger of Rubicon and
Merger Co. shall be filed with the Secretary of State of Utah. The "Effective
Date" of the merger shall be the date the filing of such Articles of Merger
shall become effective.
1.08 Effect of Merger. On the Effective Date of the merger, Rubicon
and Merger Co. shall cease to exist separately, and Rubicon shall be merged
with and into Merger Co., the surviving corporation, in accordance with the
provisions of this Agreement and the Articles of Merger, and in accordance
with the provisions of and with the effect provided in the corporation laws of
the Sate of Utah. Merger Co., as the surviving corporation, shall posses all
the rights, privileges, franchises, and trust and fiduciary duties, powers,
and obligations, of a private as well as of a public nature, and be subject to
all the restrictions, obligations, and duties of each of Rubicon and Merger
Co.; all property, real, personal, and mixed, and all debts due to either
Rubicon or Merger Co. on whatever account, and all other things belonging to
each of Rubicon and Merger Co. shall be vested in Merger Co., all property,
rights, privileges, powers, and franchises, and all and every other interest
shall be thereafter the property of Merger Co. as they were of Rubicon and
Merger Co.; the title to any real estate, whether vested by deed or otherwise,
in either Rubicon or Merger Co. shall not revert or be in any way impaired by
reason of the merger; provided, however, that all rights or creditors and all
liens on any property of either Rubicon or Merger Co. shall be preserved
unimpaired, and all debts, liabilities, and duties of Rubicon and Merger Co.
shall thenceforth attach to Merger Co. and may be enforced against it to the
same extent as if such debts, liabilities, and duties had been incurred or
contracted by Merger Co..
1.09 Termination
(a) This Agreement may be terminated by the board of directors of
either Hi-Tech or Rubicon at any time prior to the Closing Date if:
(i) There shall be any actual or threatened action or proceeding
before any court or any governmental body which shall seek to restrain,
prohibit, or invalidate the transactions contemplated by this Agreement and
which, in the reasonable judgment of such board of directors, made in good
faith and based upon the advice of its legal counsel, makes it inadvisable to
proceed with the transactions contemplated by this Agreement;
(ii) Any of the transactions contemplated hereby are disapproved by
any regulatory authority whose approval is required to consummate such
transactions or in the reasonable judgment of such board of directors, made in
good faith and based on the advice of counsel, there is substantial likelihood
that any such approval will not be obtained or will be obtained only on a
condition or conditions which would be unduly burdensome, making it
inadvisable to proceed with the exchange;
In the event of termination pursuant to this paragraph (a) of Section
1.09, no obligation, right, or liability shall arise hereunder, and each party
shall bear all of the expenses incurred by it in connection with the
negotiation, preparation, and execution of this Agreement and the transactions
contemplated hereby.
(b) This Agreement may be terminated at any time prior to the Closing
Date by action of the board of directors of Hi-Tech if (i) shareholders of Hi-
Tech owning more than five percent (5%) of the issued and outstanding shares
of Hi-Tech Common Stock perfect their dissenter's rights with respect to the
approval of this Agreement and the transactions contemplated hereby, (ii)
Rubicon shall fail to comply in any material respect with any of its covenants
or agreements contained in this Agreement or if any of the representations or
warranties of Rubicon contained herein shall be inaccurate in any material
respect or (iii) Hi-Tech determines that there has been or is likely to be any
material adverse change in the financial or legal condition of Rubicon. In
the event of termination pursuant to this paragraph (b) of this section 1.09,
no obligation, right, remedy, or liability shall arise hereunder. All parties
shall bear their own costs incurred in connection with the negotiation,
preparation, and execution of this Agreement and the transactions contemplated
hereby.
(c) This Agreement may be terminated at any time prior to the Closing
Date by action of the board of directors of Rubicon if (i) less then 50% of
the Shareholders of Rubicon vote in favor of Rubicon Shares this Agreement and
the transactions contemplated hereby, (ii) Hi-Tech shall fail to comply in
any material respect with any of its covenants or agreements contained in this
Agreement or if any of the representations or warranties of Hi-Tech contained
herein shall be inaccurate in any material respect, or (iii) Rubicon
determines that there has been or is likely to be any adverse change in the
financial or legal condition of Hi-Tech. In the event of termination pursuant
to this paragraph (c) of this section 1.09, no obligation, right, remedy, or
liability shall arise hereunder. All parties shall each bear their own costs
incurred in connection with the negotiation, preparation, and execution of
this Agreement and the transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF HI-TECH
As an inducement to, and to obtain the reliance of Rubicon, Hi-Tech and
Merger Co. represents and warrants as follows:
2.01 Organization.
(a) Hi-Tech is, and will be on the Closing, a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Delaware and has the corporate power and is and will be duly authorized,
qualified, franchised, and licensed under all applicable laws, regulations,
ordinances, and orders of public authorities to own all of its properties and
assets and to carry on its business in all material respects as it is now
being conducted, and there are no other jurisdictions in which it is not so
qualified in which the character and location of the assets owned by it or the
nature of the material business transacted by it requires qualification,
except where failure to do so would not have a material adverse effect on its
business, operations, properties, assets or condition. The execution and
delivery of this Agreement does not, and the consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof will not,
violate any provision of Hi-Tech's articles of incorporation or bylaws, or
other agreement to which it is a party or by which it is bound.
(b) Merger Co. is, and will be on the Closing, a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Utah and has the corporate power and is and will be duly authorized,
qualified, franchised, and licensed under all applicable laws, regulations,
ordinances, and orders of public authorities to own all of its properties and
assets and to carry on its business in all material respects as it is now
being conducted, and there are no other jurisdictions in which it is not so
qualified in which the character and location of the assets owned by it or the
nature of the material business transacted by it requires qualification,
except where failure to do so would not have a material adverse effect on its
business, operations, properties, assets or condition. The execution and
delivery of this Agreement does not, and the consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof will not,
violate any provision of Merger Co.'s articles of incorporation or bylaws, or
other agreement to which it is a party or by which it is bound.
2.02 Approval of Agreement. Hi-Tech and Merger Co. have full power,
authority, and legal right and have taken, or will take, all action required
by law, their articles of incorporation, bylaws, and otherwise to execute and
deliver this Agreement and to consummate the transactions herein contemplated.
The board of directors of Hi-Tech and Merger Co. have authorized and approved
the execution, delivery, and performance of this Agreement and the
transactions contemplated hereby; subject to the approval of the Hi-Tech
shareholders and compliance with state and federal corporate and securities
laws.
2.03 Capitalization. The authorized capitalization of Hi-Tech
consists of 50,000,000 shares of common stock, $0.001 par value, of which
9,840,000 shares are issued and outstanding, The authorized capitalization
of Merger Co. consist of 50,000 shares, $0.001 par value, of which 100 shares
are issued and outstanding. All issued and outstanding shares of Hi-Tech and
Merger Co. are legally issued, fully paid, and nonassessable and not issued in
violation of the preemptive or other right of any person. There are no
dividends or other amounts due or payable with respect to any of the shares of
capital stock of Hi-Tech or Merger Co. Hi-Tech has a promissory note in the
principal amount of $10,000 owed to three parties. The promissory note
converts into 10,000,000 post reverse split shares of common stock of Hi-Tech
at the option of the note holder.
2.04. Financial Statements.
(a) Included in Schedule 2.04 are the audited balance sheets of Hi-
Tech as of September 30, 1999 and 1998, and the related statements of
operations, stockholders' equity (deficit), and cash flows for the fiscal year
ended September 30, 1999, and 1998, and from inception through June 30, 1999,
including the notes thereto, and the accompanying report of Xxxx Xxxxxxx,
independent certified public accountants. At or prior to the Closing Date,
Hi-Tech shall deliver the unaudited balance sheet of Hi-Tech as of June 30,
2000, and the related statements of operations, stockholders' equity
(deficit), and cash flows for the nine months ended June 30, 2000, together
with the notes thereto and representations by the principal accounting and
financial officer of Hi-Tech to the effect that such financial statements
contain all adjustments (all of which are normal recurring adjustments)
necessary to present fairly the results of operations and financial position
for the periods and as of the dates indicated and such financial statements
shall not reflect any material changes since the September 30, 1999.
(b) The financial statements of Hi-Tech delivered pursuant to Section
2.04(a) have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved as explained
in the notes to such financial statements. The Hi-Tech financial statements
present fairly, in all material respects, as of their respective dates, the
financial position of Hi-Tech. Hi-Tech did not have, as of the date of any
such financial statements, except as and to the extent reflected or reserved
against therein, any liabilities or obligations (absolute or contingent) which
should be reflected in any financial statement or the notes thereto prepared
in accordance with generally accepted accounting principles, and all assets
reflected therein presently fairly the assets of Hi-Tech in accordance with
generally accepted accounting principles. The statements of revenues and
expenses and cash flows present fairly the financial position and result of
operations of Hi-Tech as of their respective dates and for the respective
periods covered thereby.
(c) Hi-Tech has filed or will file as the Closing Date all tax
returns required to be filed by it from inception to the Closing Date. All
such returns and reports are accurate and correct in all material respect.
Hi-Tech has no material liabilities with respect to the payment of any
federal, state, county, local, or other taxes (including any deficiencies,
interest, or penalties) accrued for or applicable to the period ended on the
date of the most recent balance sheet of Hi-Tech, except to the extent
reflected on such balance sheet and all such dates and years and periods prior
thereto and for which Hi-Tech may at said date have been liable in its own
right or as transferee of the assets of, or as successor to, any other
corporation or entity, except for taxes accrued but not yet due and payable,
and no deficiency assessment or proposed adjustment of any such tax return is
pending, proposed or contemplated. None of such income tax returns has been
examined or is currently being examined by the Internal Revenue Service and no
deficiency assessment or proposed adjustment of any such return is pending,
proposed or contemplated. Hi-Tech has not made any election pursuant to the
provisions of any applicable tax laws (other than elections that relate solely
to methods of accounting, depreciation, or amortization) that would have an
adverse affect on Hi-Tech, its financial condition, its business as presently
conducted or proposed to be conducted, or any of its respective properties or
assets. There are no outstanding agreements or waivers extending the
statutory period of limitation applicable to any tax return of Hi-Tech.
(d) The books and records, financial and otherwise, of Hi-Tech
and Merger Co. are in all material respects complete and correct and have been
maintained in accordance with sound business and bookkeeping practices so as
to accurately and fairly reflect, in reasonable detail, the transactions and
dispositions of the assets of Hi-Tech and Merger Co., and Hi-Tech and Merger
Co. have maintained a system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions have been and are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit the preparation of financial
statements in conformity with generally accepted accounting principles or any
other criteria applicable to such statements and to maintain accountability
for assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals, and appropriate action is taken with respect to any differences.
2.05 Outstanding Warrants and Options. Except as noted in Section
2.03, Hi-Tech and Merger Co. have no existing warrants or options, calls, or
commitments of any nature relating to the authorized and unissued Hi-Tech or
Merger Co. Common Stock.
2.06 Information. The information concerning Hi-Tech and Merger Co.
set forth in this Agreement and the schedules delivered by Hi-Tech pursuant
hereto complete and accurate in all material respects and does not contain any
untrue statement of a material fact or omit to state a material fact required
to make the statements made, in light of the circumstances under which they
were made, not misleading. Hi-Tech and Merger Co. shall cause the schedules
delivered by it pursuant hereto and the instruments delivered to Rubicon
hereunder to be updated after the date hereof up to and including the Closing
Date.
2.07 Absence of Certain Changes or Events. Except as set forth in
this Agreement or the schedules hereto, since the date of the most recent Hi-
Tech balance sheet described in Section 2.04 and included in the information
referred to in Section 2.06:
(a) There has not been (i) any adverse change in the business,
operations, properties, level of inventory, assets, or condition of Hi-Tech or
(ii) any damage, destruction, or loss to Hi-Tech (whether or not covered by
insurance) adversely affecting the business, operations, properties, assets,
or conditions of Hi-Tech;
(b) Hi-Tech has not (i) amended its articles of incorporation or
bylaws; (ii) declared or made, or agreed to declare or make, any payment of
dividends or distributions of any assets of any kind whatsoever to
stockholders or purchased or redeemed, or agreed to purchase or redeem, any of
its capital stock; (iii) waived any rights of value which in the aggregate are
extraordinary or material considering the business of Hi-Tech; (iv) made any
change in its method of management, operation, or accounting; (v) entered into
any other transactions; (vi) made any accrual or arrangement for or payment
of bonuses or special compensation of any kind or any severance or termination
pay to any present or former officer or employee; (vii) increased the rate of
compensation payable or to become payable by it to any of its officers or
directors or any of its employees whose monthly compensation exceeds $1,000;
or (viii) made any increase in any profit-sharing, bonus, deferred
compensation, insurance, pension, retirement, or other employee benefit plan,
payment, or arrangement made to, for, or with its officers, directors, or
employees;
(c) Hi-Tech has not (i) granted or agreed to grant any options,
warrants, or other rights for its stocks, bonds, or other corporate securities
calling for the issuance thereof; (ii) borrowed or agreed to borrow any funds
or incurred, or become subject to, any material obligation or liability
(absolute or contingent) except liabilities incurred in the ordinary course of
business; (iii) paid any material obligation or liability (absolute or
contingent) other than current liabilities reflected in or shown on the most
recent Hi-Tech balance sheet and current liabilities incurred since that date
in the ordinary course of business; (iv) sold or transferred, or agreed to
sell or transfer, any of its assets, properties, or (v) rights, canceled, or
agreed to cancel, any debts or claims (except debts and claims which in the
aggregate are of a value of less than $5,000); (vi) made or permitted any
amendment or termination of any contract, agreement, or license to which it is
a party if such amendment or termination is material, considering the business
of Hi-Tech; or (vii) issued, delivered, or agreed to issue or deliver any
stock, bonds, or other corporate securities including debentures (whether
authorized and unissued or held as treasury stock); and
(d) Except as set forth on Schedule 2.07 (d), Hi-Tech has not become
subject to any law or regulation which materially and adversely affects, or in
the future would be reasonably expected to adversely affect, the business,
operations, properties, assets, or condition of Hi-Tech.
2.08 Litigation and Proceedings. Except as set forth on Schedule
2.08 There are no actions, suits, or administrative or other proceedings
pending or, threatened by or against Hi-Tech or adversely affecting Hi-Tech
or its properties, at law or in equity, before any court or other governmental
agency or instrumentality, domestic or foreign, or before any arbitrator of
any kind. There is no default on its part with respect to any judgment,
order, writ, injunction, decree, award, rule, or regulation of any court,
arbitrator, or governmental agency or instrumentality.
2.09 Compliance With Laws and Regulations. Except as set forth as
Schedule 2.09, Hi-Tech has complied with all applicable statutes and
regulations of any federal, state, or other governmental entity or agency
thereof, except to the extent that noncompliance (i) could not adversely
affect the business, operations, properties, assets, or condition of Hi-Tech
or (ii) could not result in the occurrence of any liability for Hi-Tech. To
the best knowledge of Hi-Tech, the consummation of this transaction will
comply with all applicable statutes and regulations, subject to the
preparation and filing of any forms required by state and federal securities
laws.
2.10 Contracts. Except as included or described in Schedule 2.10:
(a) There are no material contracts, agreements, franchises,
license agreements, or other commitments to which Hi-Tech is a party by which
it or any of the properties of Hi-Tech are bound;
(b) All contracts, agreements, franchises, license agreements,
and other commitments to which Hi-Tech is a party or by which its properties
are bound and which are material to the operations or financial condition of
Hi-Tech are valid and enforceable by Hi-Tech in all material respects;
(c) Hi-Tech is not a party to or bound by, and its properties
are not subject to, any material contract, agreement, other commitment or
instrument; any charter or other corporate restriction; or any judgment,
order, writ, injunction, decree, or award which materially and adversely
affects, or in the future may (as far as Hi-Tech can now foresee) materially
and adversely affect, the business, operations, properties, assets, or
condition of Hi-Tech; and
(d) Except as reflected in the most recent balance sheets
included in Schedule 3.04, Hi-Tech is not a party to any oral or written (i)
contract for the employment of any officer, director, or employee which is not
terminable on 30 days (or less) notice; (ii) profit-sharing, bonus, deferred
compensation, stock option, severance pay, pension benefit or retirement plan,
agreement, or arrangement covered by Title IV of the Employee Retirement
Income Security Act, as amended; (iii) agreement, contract, or indenture
relating to the borrowing of money; (iv) guarantee of any obligation, other
than one on which Hi-Tech is a primary obligor, for the borrowing of money or
otherwise, excluding endorsements made for collection and other guarantees of
obligations, which, in the aggregate do not exceed $1,000; (v) consulting or
other similar contract with an unexpired term of more than one year or
providing for payments in excess of $1,000 in the aggregate; (vi) collective
bargaining agreement; (vii) agreement with any present or former officer or
director of Hi-Tech or any subsidiary; or (viii) contract, agreement, or other
commitment involving payments by it of more than $1,000 in the aggregate.
2.11 Material Contract Defaults. Except as set forth on Schedule
2.11, Hi-Tech is not in default in any material respect under the terms of any
outstanding contract, agreement, lease, or other commitment which is material
to the business, operations, properties, assets, or condition of Hi-Tech, and
there is no event of default or other event which, with notice or lapse of
time or both, would constitute a default in any material respect under any
such contract, agreement, lease, or other commitment in respect of which Hi-
Tech has not taken adequate steps to prevent such a default from occurring.
2.12 No Conflict With Other Instruments. Except as set forth on
Schedule 2.12, the execution of this Agreement and the consummation of the
transactions contemplated by this Agreement will not result in the breach of
any term or provision of, or constitute an event of default under, any
indenture, mortgage, deed of trust, or other contract, agreement, or
instrument to which Hi-Tech is a party or to which any of its properties or
operations are subject.
2.13 Compliance With Laws and Regulations. Hi-Tech has complied with
all applicable statutes and regulations of any federal, state, or other
governmental entity or agency thereof, except to the extent that noncompliance
would not materially and adversely affect the business, operations,
properties, assets, or condition of Hi-Tech or except to the extent that
noncompliance would not result in the occurrence of any material liability for
Hi-Tech. To the best knowledge of Hi-Tech, the consummation of this
transaction will comply with all applicable statutes and regulations, subject
to the preparation and filing of any forms required by state and federal
security laws.
2.14 Subsidiaries and Predecessors. Hi-Tech does not own,
beneficially or of record, any equity securities in any other entity except
for Merger Co. which is a wholly owned subsidiary formed for the sole purpose
of changing Hi-Tech's domicile to Utah. Hi-Tech does not have a predecessor
as that term is defined under generally accepted accounting principles or
Regulation S-X promulgated by the Securities and Exchange Commission.
2.15 Employee Relations. Hi-Tech has complied in respect of its
business in all material respects with all applicable laws, rules, and
regulations, specifically title VII of the Civil Rights Act of 1963 and the
Fair Labor Standard Act of 1938, that relate to prices, wages, hours,
harassment, disabled access, and discrimination in employment and collective
bargaining and to the operation of its business and is not liable for any
arrears of wages or any taxes or penalties for failure to comply with any of
the foregoing. Hi-Tech believes that its relations with its employees is
satisfactory.
2.16 Hi-Tech Schedules. Hi-Tech has delivered to Rubicon the
following schedules, which are collectively referred to as the "Hi-Tech
Schedules" and which consist of the following separate schedules dated as of
the date of execution of this Agreement, all certified by a duly authorized
officer of Hi-Tech as complete, true, and accurate:
(a) A schedule including copies of the articles of incorporation and
bylaws of Hi-Tech in effect as of the date of this Agreement;
(b) A schedule containing copies of resolutions adopted by the board
of directors of Hi-Tech approving this Agreement and the transactions herein
contemplated;
(c) A schedule setting forth a description of any material adverse
change in the business, operations, property, inventory, assets, or condition
of Hi-Tech since the most recent Hi-Tech balance sheet, required to be
provided pursuant to Section 2.04 hereof;
(d) A schedule setting forth the financial statements required
pursuant to Section 2.04(a) hereof; and
(e) A schedule setting forth any other information, together with any
required copies of documents, required to be disclosed in the Hi-Tech
Schedules by Sections 2.01 through 2.15.
Hi-Tech shall cause the Hi-Tech Schedules and the instruments delivered to
Rubicon hereunder to be updated after the date hereof up to and including a
specified date not more than three business days prior to the Closing Date.
Such updated Hi-Tech Schedules, certified in the same manner as the original
Hi-Tech Schedules, shall be delivered prior to and as a condition precedent to
the obligation of Rubicon to close.
ARTICLE III
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF RUBICON
As an inducement to, and to obtain the reliance of, Hi-Tech, Rubicon
represents and warrants as follows:
3.01 Organization. Rubicon is, and will be on the Closing Date, a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Utah and has the corporate power and is and will be duly
authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, and there are no other jurisdictions in which it is
not so qualified in which the character and location of the assets owned by it
or the nature of the material business transacted by it requires
qualification, except where failure to do so would not have a material adverse
effect on its business, operations, properties, assets or condition of
Rubicon. The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated by this Agreement in accordance
with the terms hereof will not, violate any provision of Rubicon's articles of
organization or operating agreement, or other material agreement to which it
is a party or by which it is bound.
3.02 Approval of Agreement. Rubicon has full power, authority, and
legal right and has taken, or will take, all action required by law, its
articles of organization, operating agreement, or otherwise to execute and
deliver this Agreement and to consummate the transactions herein contemplated.
The managers of Rubicon have authorized and approved the execution, delivery,
and performance of this Agreement and the transactions contemplated hereby;
subject to the approval of the Rubicon Shareholders and compliance with state
and federal corporate and securities laws.
3.03 Capitalization. The authorized capitalization of Rubicon
consists of 50,000,000 shares of common stock of which 1,000 shares are issued
and outstanding as of the date hereof and 5,000,000 shares of preferred stock,
of which 163,400 shares are issued and outstanding as of the date hereof. All
issued and outstanding shares of Rubicon are legally issued, fully paid, and
nonassessable and not issued in violation of the preemptive or other right of
any person. There are no distributions, return of capital or other amounts
due or payable with respect to any of the shares of Rubicon.
3.04 Financial Statements.
(a) Included in Schedule 3.04 are the audited balance sheet of
Rubicon as of December 31, 1999 and 1998, and the related statements of
operations, cash flows, and Shareholders' equity for the period from inception
to December 31, 1999, including the notes thereto. At or prior to the Closing
Date, Rubicon shall deliver the unaudited balance sheet of Rubicon as of June
30, 2000, and the related statements of operations, Shareholders' equity
(deficit), and cash flows for the three months ended June 30, 2000, together
with the notes thereto and representations by the chief operating officer of
Rubicon to the effect that such financial statements contain all adjustments
(all of which are normal recurring adjustments) necessary to present fairly
the results of operations and financial position for the periods and as of the
dates indicated.
(b) The audited financial statements delivered pursuant to Section
3.04(a) have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved. The
financial statements of Rubicon present fairly in all material aspects, as of
their respective dates, the financial position of Rubicon. Rubicon did not
have, as of the date of any such balance sheets, except as and to the extent
reflected or reserved against therein, any liabilities or obligations
(absolute or contingent) which should be reflected in any financial statements
or the notes thereto prepared in accordance with generally accepted accounting
principles, and all assets reflected therein present fairly the assets of
Rubicon, in accordance with generally accepted accounting principles. The
statements of revenue and expenses and cash flows present fairly the financial
position and result of operations of Rubicon as of their respective dates and
for the respective periods covered thereby.
(c) Rubicon has filed or will have filed as of the Closing Date all
tax returns required to be filed by it from inception to the Closing Date.
All such returns and reports are accurate and correct in all material
respects. Rubicon has no material liabilities with respect to the payment of
any federal, state, county, local, or other taxes (including any deficiencies,
interest, or penalties) accrued for or applicable to the period ended on the
date of the most recent unaudited balance sheet of Rubicon, except to the
extent reflected on such balance sheet and adequately provided for and those
related to the Abbott transactions which are not yet due and payable, and all
such dates and years and periods prior thereto and for which Rubicon may at
said date have been liable in its own right or as transferee of the assets of,
or as successor to, any other corporation or entity, except for taxes accrued
but not yet due and payable, and to Rubicon's best knowledge no deficiency
assessment or proposed adjustment of any such tax return is pending, proposed
or contemplated. Proper and accurate amounts of taxes have been withheld by
or on behalf of Rubicon with respect to all material compensation paid to
employees of Rubicon for all periods ending on or before the date hereof, and
all deposits required with respect to compensation paid to such employees have
been made, in complete compliance with the provisions of all applicable
federal, state, and local tax and other laws. To Rubicon's best knowledge,
none of such income tax returns has been examined or is currently being
examined by the Internal Revenue Service, and no deficiency assessment or
proposed adjustment of any such return is pending, proposed, or contemplated.
Rubicon has not made any election pursuant to the provisions of any applicable
tax laws (other than elections that relate solely to methods of accounting,
depreciation, or amortization) that would have a material adverse affect on
Rubicon, its financial condition, its business as presently conducted or
proposed to be conducted, or any of its properties or material assets. There
are no tax liens upon any of the assets of Rubicon. There are no outstanding
agreements or waivers extending the statutory period of limitation applicable
to any tax return of Rubicon.
(d) The books and records, financial and otherwise, of Rubicon
are in all material respects complete and correct and have been maintained in
accordance with sound business and bookkeeping practices so as to accurately
and fairly reflect, in reasonable detail, the transactions and dispositions of
the assets of Rubicon. Rubicon has maintained a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions
have been and are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit the
preparation of financial statements in conformity with generally accepted
accounting principles or any other criteria applicable to such statements and
to maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the existing
assets at reasonable intervals, and appropriate action is taken with respect
to any differences.
3.05 Outstanding Warrants and Options. Rubicon has no issued
warrants or calls of any nature relating to the authorized and unissued
Rubicon Shares. Rubicon has entered into an agreement with parties to issue
shares of its common stock to its medical advisory board. Rubicon also has
entered into an acquisition agreement to acquire another company in which
shares of Rubicon common stock will be issued as part of the purchase price.
3.06 Information. The information concerning Rubicon set forth in
this Agreement and in the schedules delivered by Rubicon pursuant hereto is
complete and accurate in all material respects and does not contain any untrue
statement of a material fact or omit to state a material fact required to make
the statements made, in light of the circumstances under which they were made,
not misleading. Rubicon shall cause the schedules delivered by Rubicon
pursuant hereto to Hi-Tech hereunder to be updated after the date hereof up to
and including the Closing Date.
3.07 Absence of Certain Changes or Events. Except as set forth in
this Agreement since the date of the most recent Rubicon balance sheet
described in Section 3.04 and included in the information referred to in
Section 3.06:
(a) There has not been (i) any material adverse change in the
business, operations, properties, level of inventory, assets, or condition of
Rubicon or (ii) any damage, destruction, or loss to Rubicon materially and
adversely affecting the business, operations, properties, assets, or
conditions of Rubicon.
(b) Rubicon has not (i) amended its articles of organization or
operating agreement; (ii) declared or made, or agreed to declare or make, any
payment of dividends or distributions of any assets of any kind whatsoever to
Shareholders or purchased or redeemed, or agreed to purchase or redeem, any of
its Shares except for Rubicon's agreement with Accurate Designs, Inc.; (iii)
waived any rights of value which in the aggregate are extraordinary and
material considering the business of Rubicon; (iv) made any material change in
its method of accounting; (v) entered into any other material transactions
other than those contemplated by this Agreement; (vi) made any material
accrual or material arrangement for or payment of bonuses or special
compensation of any kind or any severance or termination pay to any present or
former officer or employee, except those specified in Xxxxxxx Xxxxxx'x
employment contract; or (vii) made any material increase in any profit-
sharing, bonus, deferred compensation, insurance, pension, retirement, or
other employee benefit plan, payment, or arrangement made to, for, or with
their officers, directors, or employees;
(c) Rubicon has not (i) granted or agreed to grant any options,
warrants, or other rights for its Shares, bonds, or other securities calling
for the issuance thereof; (ii) borrowed or agreed to borrow any funds or
incurred, or become subject to, any material obligation or liability (absolute
or contingent) except liabilities incurred in the ordinary course of business;
(iii) paid any material obligation or liability (absolute or contingent) other
than current liabilities reflected in or shown on the most recent Rubicon
balance sheet and current liabilities incurred since that date in the ordinary
course of business; (iv) sold or transferred, or agreed to sell or transfer,
any of its material assets, properties, or rights, or agreed to cancel, any
material debts or claims; (v) made or permitted any amendment or termination
of any contract, agreement, or license to which it is a party if such
amendment or termination is material, considering the business of Rubicon
except that certain license agreement with the University of Southern
California assigned to Xxxxxx Laboratories, Inc.; or (vi) issued, delivered,
or agreed to issue or deliver any Shares, bonds, or other company securities
including debentures (whether authorized and unissued or held as treasury
shares); and
(d) To the best knowledge of Rubicon, it has not become subject to
any law or regulation which materially and adversely affects, or in the future
would be reasonably expected to adversely affect, the business, operations,
properties, assets, or condition of Rubicon.
3.08 Title and Related Matters. Except as provided herein or
disclosed in the most recent Rubicon balance sheet and the notes thereto,
Rubicon has good and marketable title to all of its properties, inventory,
interests in properties, technology, whether patented or un-patented, and
assets, which are reflected in the most recent Rubicon balance sheet or
acquired after that date (except properties, interests in properties, and
assets sold or otherwise disposed of since such date in the ordinary course of
business), free and clear of all mortgages, liens, pledges, charges, or
encumbrances, except (i) statutory liens or claims not yet delinquent; and
(ii) such imperfections of title and easements as do not, and will not,
materially detract from, or interfere with, the present or proposed use of the
properties subject thereto or affected thereby or otherwise materially impair
present business operations on such properties. To the best knowledge of
Rubicon, its technology does not infringe on the copyright, patent, trade
secret, know-how, or other proprietary right of any other person or entity and
comprises all such rights necessary to permit the operation of the business of
Rubicon as now being conducted or as contemplated.
3.09 Litigation and Proceedings. Except as otherwise disclosed in
Schedule 3.09, there are no material actions, suits, or proceedings pending
or, to the knowledge of Rubicon, threatened by or against Rubicon or adversely
affecting Rubicon, at law or in equity, before any court or other governmental
agency or instrumentality, domestic or foreign, or before any arbitrator of
any kind. Rubicon does not have any knowledge of any default on its part with
respect to any judgment, order, writ, injunction, decree, award, rule, or
regulation of any court, arbitrator, or governmental agency or
instrumentality.
3.10 Contracts. Except as included or described in Schedule 3.19:
(a) All contracts, agreements, franchises, license agreements,
and other commitments to which Rubicon is a party or by which its properties
are bound and which are material to the operations or financial condition of
Rubicon are valid and enforceable by Rubicon in all material respects;
(b) Rubicon is not a party to or bound by, and its properties
are not subject to, any material contract, agreement, other commitment or
instrument; any charter or other corporate restriction; or any judgment,
order, writ, injunction, decree, or award which materially and adversely
affects, or in the future may (as far as Rubicon can now foresee) materially
and adversely affect, the business, operations, properties, assets, or
condition of Rubicon; and
(c) Except as reflected in the most recent balance sheets
included in Schedule 3.04, Rubicon is not a party to any oral or written (i)
contract for the employment of any officer, director, or employee which is not
terminable on 30 days (or less) notice; (ii) profit-sharing, bonus, deferred
compensation, stock option, severance pay, pension benefit or retirement plan,
agreement, or arrangement covered by Title IV of the Employee Retirement
Income Security Act, as amended; (iii) agreement, contract, or indenture
relating to the borrowing of money; (iv) guarantee of any obligation, other
than one on which Rubicon is a primary obligor, for the borrowing of money or
otherwise, excluding endorsements made for collection and other guarantees of
obligations, which, in the aggregate do not exceed $1,000; (v) consulting or
other similar contract with an unexpired term of more than one year or
providing for payment sin excess of $1,000 in the aggregate; (vi) collective
bargaining agreement; (vii) agreement with any present or former officer or
director of Rubicon or any subsidiary; or (viii) contract, agreement, or other
commitment involving payments by it of more than $1,000 in the aggregate.
3.11 Material Contract Defaults. Rubicon is not in default in any
material respect under the terms of any outstanding contract, agreement,
lease, or other commitment which is material to the business, operations,
properties, assets, or condition of Rubicon, and there is no event of default
or other event which, with notice or lapse of time or both, would constitute a
default in any material respect under any such contract, agreement, lease, or
other commitment in respect of which Rubicon has not taken adequate steps to
prevent such a default from occurring.
3.12 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed
of trust, or other material contract, agreement, or instrument to which
Rubicon is a party or to which any of its properties or operations are
subject.
3.13 Governmental Authorizations. Rubicon has all licenses,
franchises, permits, and other governmental authorizations that are legally
required to enable it to conduct its business in all material respects as
conducted on the date of this Agreement. Except for compliance with federal
and state securities and corporation laws, as hereinafter provided, no
authorization, approval, consent, or order of, or registration, declaration,
or filing with, any court or other governmental body is required in connection
with the execution and delivery by Rubicon of this Agreement and the
consummation by Rubicon of the transactions contemplated hereby.
3.14 Compliance With Laws and Regulations. Rubicon has complied with
all applicable statutes and regulations of any federal, state, or other
governmental entity or agency thereof, except to the extent that noncompliance
would not materially and adversely affect the business, operations,
properties, assets, or condition of Rubicon or except to the extent that
noncompliance would not result in the occurrence of any material liability for
Rubicon. To the best knowledge of Rubicon, the consummation of this
transaction will comply with all applicable statutes and regulations, subject
to the preparation and filing of any forms required by state and federal
security laws.
3.15 Subsidiaries and Predecessors. Rubicon does not own, beneficially
or of record, any equity securities in any other entity.
3.16 Insurance. Rubicon has insurance on the insurable properties as
set forth on Schedule 3.17 which is necessary to replace such properties.
Such policy or policies containing substantially equivalent coverage will be
outstanding and in full force at the Closing Date, as hereinafter defined.
3.17 Employee Relations. Rubicon has complied in respect of its
business in all material respects with all applicable laws, rules, and
regulations that relate to prices, wages, hours, harassment, disabled access,
and discrimination in employment and collective bargaining and to the
operation of its business and is not liable for any arrears of wages or any
taxes or penalties for failure to comply with any of the foregoing. Rubicon
believes that its relations with its employees is satisfactory.
3.18 Rubicon Schedules. Rubicon has delivered to Hi-Tech the
following schedules, which are collectively referred to as the "Rubicon
Schedules" and which consist of the following separate schedules dated as of
the date of execution of this Agreement, and instruments and Hi-Tech as of
such date, all certified by the chief executive officer of Rubicon as
complete, true, and accurate:
(a) A schedule including copies of its articles of incorporation and
bylaws and all amendments thereto in effect as of the date of this Agreement;
(b) A schedule containing copies of resolutions adopted by the
directors of Rubicon approving this Agreement and the transactions herein
contemplated as referred to in Section 3.02;
(c) A schedule setting forth a description of any material adverse
change in the business, operations, property, inventory, assets, or condition
of Rubicon since the most recent Rubicon balance sheet, required to be
provided pursuant to Section 3.04 hereof;
(d) A schedule setting forth the financial statements required
pursuant to Section 3.04 (a) hereof; and
(e) A schedule setting forth any other information, together with any
required copies of documents, required to be disclosed in the Rubicon
Schedules by Sections 3.01 through 3.18.
Rubicon shall cause the Rubicon Schedules and the instruments delivered to Hi-
Tech hereunder to be updated after the date hereof up to and including a
specified date not more than three business days prior to the Closing Date.
Such updated Rubicon Schedules, certified in the same manner as the original
Rubicon Schedules, shall be delivered prior to and as a condition precedent to
the obligation of Hi-Tech to close.
ARTICLE IV
CONDITIONS PRECEDENT TO OBLIGATIONS OF RUBICON
Rubicon shall be bound by the terms and conditions of this Agreement
provided the following conditions are complied with and satisfied by Hi-Tech
at or before the Closing Date:
4.01. Reverse Split/Change of Domicile. Hi-Tech shall call and hold
a meeting of its shareholders, to approve (i) a 20 to 1 reverse split of its
issued and outstanding Common Stock which reverse split shall be implemented
prior to the Closing of the transaction contemplated in this Agreement and the
issuance of the 36,000,000 post reverse split shares of Hi-Tech Common Stock
to the Rubicon Shareholders; (ii) the amendment to Hi-Tech's articles of
incorporation to add a class of preferred stock to its authorized capital and
to approve a class of preferred stock with equivalent rights and preferences
to that of Rubicon's preferred stock, and (iii) the merger of Hi-Tech with and
into Merger Co. All shareholders and director actions required pursuant to
this Agreement or to consummate the transactions contemplated hereunder shall
be pursuant to and in compliance with Delaware and Utah law, applicable
federal law and Hi-Tech's articles of incorporation and bylaws. The reverse
split will not affect the shares of Hi-Tech Common Stock which the outstanding
Promissory Note of Hi-Tech converts into. Accordingly, after the reverse
split, there will be 492,000 shares of Hi-Tech outstanding with the ability to
have another 10,000,000 shares of Common Stock outstanding if the note holders
convert the promissory note into shares of Hi-Tech common stock.
4.02 Shareholder Approval. Hi-Tech shall call and hold a meeting
of its shareholders, or obtain the written consent of a majority of its
shareholders, to approve the transactions contemplated by this Agreement
including the acquisition of Rubicon through the issuance of Hi-Tech Common
Stock for all of the issued and outstanding Rubicon Shares, and the change of
name of Hi-Tech to "Rubicon Medical, Inc." or such other derivation thereof as
may be agreed to by the board of directors of Rubicon.
4.03 Accuracy of Representations. The representations and warranties
made by Hi-Tech in this Agreement were true when made and shall be true at the
Closing Date with the same force and affect as if such representations and
warranties were made at and as of the Closing Date (except for changes therein
permitted by this Agreement), and Hi-Tech shall have performed or complied
with all covenants and conditions required by this Agreement to be performed
or complied with by Hi-Tech prior to or at the Closing. Rubicon shall be
furnished with certificates, signed by duly authorized officers of Hi-Tech and
dated the Closing Date, to the foregoing effect.
4.04 Officer's Certificates. Rubicon shall have been furnished
with certificates dated the Closing Date and signed by the duly authorized
chief executive officer of Hi-Tech to the effect that to such officers best
knowledge no litigation, proceeding, investigation, or inquiry is pending or,
to the best knowledge of Hi-Tech threatened, which might result in an action
to enjoin or prevent the consummation of the transactions contemplated by this
Agreement. Furthermore, based on certificates of good standing,
representations of government agencies, and Hi-Tech's own documents and
information, the certificate shall represent, to the best knowledge of the
officer, that:
(a) This Agreement has been duly approved by Hi-Tech's board of
directors and shareholders and has been duly executed and delivered in the
name and on behalf of Hi-Tech by its duly authorized officers pursuant to, and
in compliance with, authority granted by the board of directors of Hi-Tech
pursuant to a unanimous consent;
(b) There have been no material adverse changes in Hi-Tech up to and
including the date of the certificate;
(c) All conditions required by this Agreement have been met,
satisfied, or performed by Hi-Tech;
(d) All authorizations, consents, approvals, registrations, and/or
filings with any governmental body, agency, or court required in connection
with the execution and delivery of the documents by Hi-Tech have been obtained
and are in full force and effect or, if not required to have been obtained,
will be in full force and effect by such time as may be required; and
(e) There is no material action, suit, proceeding, inquiry, or
investigation at law or in equity by any public board or body pending or
threatened against Hi-Tech, wherein an unfavorable decision, ruling, or
finding could have an adverse effect on the financial condition of Hi-Tech,
the operation of Hi-Tech, or the acquisition and reorganization contemplated
herein, or any agreement or instrument by which Hi-Tech is bound or in any way
contests the existence of Hi-Tech.
4.05 No Material Adverse Change. Prior to the Closing Date, there
shall not have occurred any material adverse change in the financial
condition, business, or operations of Hi-Tech, nor shall any event have
occurred which, with the lapse of time or the giving of notice, may cause or
create any material adverse change in the financial condition, business, or
operations of Hi-Tech.
4.06 Good Standings. Rubicon shall have received a certificate of
good standing from the secretary of state of Delaware, dated as of the date
within five days prior to the Closing Date, certifying that Hi-Tech is in good
standing as a corporation in the State of Delaware.
4.07 Other Items. Rubicon shall have received such further
documents, certificates, or instruments relating to the transactions
contemplated hereby as Rubicon may reasonably request.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF HI-TECH
The obligations of Hi-Tech under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
5.01. Shareholder Approval. Hi-Tech shall call and hold a meeting of
its shareholders, or obtain through a majority written consent of its
shareholders, whereby the shareholders of Hi-Tech authorize and approve this
Agreement and the transactions contemplated hereby.
5.02 Rubicon Shareholders. Holders of all of the issued and
outstanding Rubicon Shares shall agree to this Agreement and the exchange of
shares and Shares contemplated by this Agreement.
5.03 Accuracy of Representations. The representations and warranties
made by Rubicon and the Rubicon Shareholders in this Agreement were true when
made and shall be true at the Closing Date with the same force and affect as
if such representations and warranties were made at and as of the Closing Date
(except for changes therein permitted by this Agreement), and Rubicon shall
have performed or complied with all covenants and conditions required by this
Agreement to be performed or complied with by Rubicon prior to or at the
Closing. Hi-Tech shall be furnished with a certificate, signed by a duly
authorized officer of Rubicon and dated the Closing Date, to the foregoing
effect.
5.04 Officer's Certificates. Hi-Tech shall have been furnished with
certificates dated the Closing Date and signed by the duly authorized chief
executive officer of Rubicon to the effect that no litigation, proceeding,
investigation, or inquiry is pending or, to the best knowledge of Rubicon,
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement. Furthermore,
based on certificates of good standing, representations of government
agencies, and Rubicon's own documents, the certificate shall represent, to the
best knowledge of the officer, that:
(a) This agreement has been duly approved by Rubicon's managers
and Shareholders and has been duly executed and delivered in the name and on
behalf of Rubicon by its duly authorized officers pursuant to, and in
compliance with, authority granted by the managers of Rubicon pursuant to a
unanimous consent of its managers and a majority vote of its Shareholders;
(b) Except as provided or permitted herein, there have been no
material adverse changes in Rubicon up to and including the date of the
certificate;
(c) All authorizations, consents, approvals, registrations, and/or
filing with any governmental body, agency, or court required in connection
with the execution and delivery of the documents by Rubicon have been obtained
and are in full force and effect or, if not required to have been obtained
will be in full force and effect by such time as may be required; and
(d) Except as otherwise disclosed in Schedule 3.09, there is no
material action, suit, proceeding, inquiry, or investigation at law or in
equity by any public board or body pending or threatened against Rubicon,
wherein an unfavorable decision, ruling, or finding would have an adverse
affect on the financial condition of Rubicon, the operation of Rubicon, or the
acquisition and reorganization contemplated herein, or any material agreement
or instrument by which Rubicon is bound or would in any way contest the
existence of Rubicon.
5.05 No Material Adverse Change. Prior to the Closing Date, there
shall not have occurred any material adverse change in the financial
condition, business or operations of Rubicon, nor shall any event have
occurred which, with the lapse of time or the giving of notice, may cause of
create any material adverse change in the financial condition, business, or
operations of Rubicon.
5.06 Good Standing. Hi-Tech shall have received a certificate of
good standing from the appropriate authority, dated as of a date with five
days prior to the Closing Date, certifying that the Rubicon is in good
standing as a corporation in the State of Utah.
5.07 Other Items. Hi-Tech shall have received such further documents
certificates, or instruments relating to the transactions contemplated hereby
as Hi-Tech may reasonably request.
ARTICLE VI
SPECIAL COVENANTS
6.01 Activities of Hi-Tech and Rubicon
(a) From and after the date of this Agreement until the Closing Date
and except as set forth in the respective schedules to be delivered by Hi-Tech
and Rubicon pursuant hereto or as permitted or contemplated by this Agreement,
Hi-Tech and Rubicon will each:
(i) Carry on its business in substantially the same manner as it has
heretofore;
(ii) Maintain in full force and effect insurance comparable in amount
and in scope of coverage to that now maintained by it;
(iii) Perform in all material respects all of its obligations under
material contracts, leases, and instruments relating to or affecting its
assets, properties, and business;
(iv) Use its best efforts to maintain and preserve it's business
organization intact, to retain its key employees, and to maintain its
relationships with its material suppliers and customers;
(v) Duly and timely file for all taxable periods ending on or prior
to the Closing Date all federal, state, county, and local tax returns required
to be filed by or on behalf of such entity or for which such entity may be
held responsible and shall pay, or cause to pay, all taxes required to be
shown as due and payable on such returns, as well as all installments of tax
due and payable during the period commencing on the date of this Agreement and
ending on the Closing Date.; and
(vi) Fully comply with and perform in all material respects all
obligations and duties imposed on it by all federal and state laws and all
rules, regulations, and orders imposed by federal or state governmental
authorities.
(b) From and after the date of this Agreement and except as provided
herein until the Closing Date, Hi-Tech and Rubicon will not:
(i) Make any change in its articles of incorporation or bylaws;
(ii) Enter into or amend any material contract, agreement, or other
instrument of any of the types described in such party's schedules, except
that a party may enter into or amend any contract, agreement, or other
instrument in the ordinary course of business; and
(iii) Enter into any agreement for the sale of Rubicon or Hi-Tech
securities without the prior approval of the other party.
6.02 Access to Properties and Records. Until the Closing Date,
Rubicon and Hi-Tech will afford to the other party's officers and authorized
representatives full access to the properties, books, and records of the other
party in order that each party may have full opportunity to make such
reasonable investigation as it shall desire to make of the affairs of Rubicon
or Hi-Tech and will furnish the other party with such additional financial and
other information as to the business and properties of Rubicon or Hi-Tech as
each party shall from time to time reasonably request.
6.03 Indemnification by Rubicon. Rubicon will indemnify and hold
harmless Hi-Tech and its directors and officers, and each person, if any, who
controls Hi-Tech within the meaning of the Securities Act, from and against
any and all losses, claims, damages, expenses, liabilities, or actions to
which any of them may become subject under applicable law (including the
Securities Act and the Securities Exchange Act) and will reimburse them for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any claims or actions, whether or not resulting in
liability, insofar as such losses, claims, damages, expenses, liabilities, or
actions arise out of or are based upon any untrue statement or alleged untrue
statement of material fact contained in any application or statement filed
with a governmental body or arising out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein, or necessary in order to make the statements therein not misleading,
but only insofar as any such statement or omission was made in reliance upon
and in conformity with information furnished in writing by Rubicon expressly
for use therein. The indemnity agreement contained in this Section 6.03
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of Hi-Tech and shall survive the
consummation of the transactions contemplated by this Agreement for a period
of six months.
6.04. Indemnification by Hi-Tech. Hi-Tech will indemnify and hold
harmless Rubicon, the Rubicon Shareholders, Rubicon's directors and officers,
and each person, if any, who controls Rubicon within the meaning of the
Securities Act, from and against any and all losses, claims, damages,
expenses, liabilities, or actions to which any of them may become subject
under applicable law (including the Securities Act and the Securities Exchange
Act) and will reimburse them for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any claims or
actions, whether or not resulting in liability, insofar as such losses,
claims, damages, expenses, liabilities, or actions arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in any application or statement filed with a governmental body or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary in order
to make the statements therein not misleading, but only insofar as any such
statement or omission was made in reliance upon and in conformity with
information furnished in writing by Hi-Tech expressly for use therein. The
indemnity agreement contained in this Section 6.04 shall remain operative and
in full force and effect, regardless of any investigation made by or on behalf
of Rubicon and shall survive the consummation of the transactions contemplated
by this Agreement for a period of six months.
6.05 The Acquisition of Hi-Tech Common Stock. Hi-Tech and Rubicon
understand and agree that the consummation of this Agreement including the
issuance of the Hi-Tech Common Stock to Rubicon in exchange for the Rubicon
Shares as contemplated hereby, constitutes the offer and sale of securities
under the Securities Act and applicable state statutes. Hi-Tech and Rubicon
agree that such transactions shall be consummated in reliance on exemptions
from the registration and prospectus delivery requirements of such statutes
which depend, among other items, on the circumstances under which such
securities are acquired.
(a) In order to provide documentation for reliance upon exemptions
from the registration and prospectus delivery requirements for such
transactions, the signing of this Agreement and the delivery of appropriate
separate representations shall constitute the parties acceptance of, and
concurrence in, the following representations and warranties:
(i) The Rubicon Shareholders acknowledge that neither the SEC nor the
securities commission of any state or other federal agency has made any
determination as to the merits of acquiring Hi-Tech Common Stock, and that
this transaction involves certain risks.
(ii) The Rubicon Shareholders have received and read the Agreement
and understand the risks related to the consummation of the transactions
herein contemplated.
(iii) Rubicon Shareholders have such knowledge and experience in
business and financial matters that they are capable of evaluating each
business.
(iv) The Rubicon Shareholders have been provided with copies of all
materials and information requested by them or their representatives,
including any information requested to verify any information furnished (to
the extent such information is available or can be obtained without
unreasonable effort or expense), and the parties have been provided the
opportunity for direct communication regarding the transactions contemplated
hereby.
(v) All information which the Rubicon Shareholders have provided to
Hi-Tech or their representatives concerning their suitability and intent to
hold shares in Hi-Tech following the transactions contemplated hereby is
complete, accurate, and correct.
(vi) The Rubicon Shareholders have not offered or sold any securities
of Hi-Tech or interest in this Agreement and have no present intention of
dividing the Hi-Tech Common Stock or Rubicon Shares to be received or the
rights under this Agreement with others or of reselling or otherwise disposing
of any portion of such stock or rights, either currently or after the passage
of a fixed or determinable period of time or on the occurrence or
nonoccurrence of any predetermined event or circumstance.
(vii) The Rubicon Shareholders understand that the Hi-Tech Common
Stock has not been registered, but is being acquired by reason of a specific
exemption under the Securities Act as well as under certain state statutes for
transactions not involving any public offering and that any disposition of the
subject Hi-Tech Common Stock may, under certain circumstances, be inconsistent
with this exemption and may make Rubicon or Hi-Tech an "underwriter", within
the meaning of the Securities Act. It is understood that the definition of
"underwriter" focuses upon the concept of "distribution" and that any
subsequent disposition of the subject Hi-Tech Common Stock can only be
effected in transactions which are not considered distributions. Generally,
the term "distribution" is considered synonymous with "public offering" or any
other offer or sale involving general solicitation or general advertising.
Under present law, in determining whether a distribution occurs when
securities are sold into the public market, under certain circumstances one
must consider the availability of public information regarding the issuer, a
holding period for the securities sufficient to assure that the persons
desiring to sell the securities without registration first bear the economic
risk of their investment, and a limitation on the number of securities which
the stockholder is permitted to sell and on the manner of sale, thereby
reducing the potential impact of the sale on the trading markets. These
criteria are set forth specifically in rule 144 promulgated under the
Securities Act, and, after one year after the date the Hi-Tech Common Stock or
Rubicon Shares is fully paid for, as calculated in accordance with rule
144(d), sales of securities in reliance upon rule 144 can only be made in
limited amounts in accordance with the terms and conditions of that rule.
After two years from the date the securities are fully paid for, as
calculated in accordance with rule 144(d), they can generally be sold without
meeting those conditions, provided the holder is not (and has not been for the
preceding three months) an affiliate of the issuer.
(viii) The Rubicon Shareholders acknowledge that the shares of Hi-
Tech Common Stock, must be held and may not be sold, transferred, or otherwise
disposed of for value unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. Hi-Tech
is not under any obligation to register the Hi-Tech Common Stock under the
Securities Act. If rule 144 is available after one year and prior to two
years following the date the shares are fully paid for, only routine sales of
such Hi-Tech Common Stock in limited amounts can be made in reliance upon rule
144 in accordance with the terms and conditions of that rule. Hi-Tech is not
under any obligation to make rule 144 available except as set forth in this
Agreement and in the event rule 144 is not available, compliance with
Regulation A or some other disclosure exemption may be required before Rubicon
Shareholders can sell, transfer, or otherwise dispose of such Hi-Tech Common
Stock without registration under the Securities Act. Subject to compliance
with federal and state securities laws, Hi-Tech' registrar and transfer agent
will maintain a stop transfer order against the registration of transfer of
the Hi-Tech Common Stock held by Rubicon Shareholders and the certificates
representing the Hi-Tech Common Stock will bear a legend in substantially the
following form so restricting the sale of such securities:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND ARE
"RESTRICTED SECURITIES" WITHIN THE MEANING OF RULE 144 PROMULGATED UNDER THE
SECURITIES ACT. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
BE SOLD OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE SECURITIES ACT.
(ix) Subject to compliance with federal and state securities laws,
Hi-Tech may refuse to register further transfers or resales of the Hi-Tech
Common Stock in the absence of compliance with rule 144 unless the Rubicon
Shareholders furnish Hi-Tech with an opinion of counsel reasonably acceptable
to Hi-Tech stating that the transfer is proper. Further, unless such opinion
states that the shares of Hi-Tech Common Stock are free of any restrictions
under the Securities Act, Hi-Tech may refuse to transfer the securities to any
transferee who does not furnish in writing to Hi-Tech the same representations
and agree to the same conditions with respect to such Hi-Tech Common Stock as
set forth herein. Hi-Tech may also refuse to transfer the Hi-Tech Common
Stock if any circumstances are present reasonably indicating that the
transferee's representations are not accurate.
(b) In connection with the transaction contemplated by this
Agreement, Rubicon and Hi-Tech shall each file, with the assistance of the
other and their respective legal counsel, such notices, applications, reports,
or other instruments as may be deemed by them to be necessary or appropriate
in an effort to document reliance on such exemptions, and the appropriate
regulatory authority in the states where the Rubicon Shareholders reside
unless an exemption requiring no filing is available in such jurisdictions,
all to the extent and in the manner as may be deemed by such parties to be
appropriate.
(c) In order to more fully document reliance on the exemptions as
provided herein, Rubicon, the Rubicon Shareholders, and Hi-Tech shall execute
and deliver to the other, at or prior to the Closing, such further letters of
representation, acknowledgment, suitability, or the like as Hi-Tech or Rubicon
and their respective counsel may reasonably request in connection with
reliance on exemptions from registration under such securities laws.
(d) The Rubicon Shareholders acknowledge that the basis for relying
on exemptions from registration or qualifications are factual, depending on
the conduct of the various parties, and that no legal opinion or other
assurance will be required or given to the effect that the transactions
contemplated hereby are in fact exempt from registration or qualification.
6.06 Hi-Tech Liabilities. Immediately prior to the Closing Date, Hi-
Tech shall have no material assets and no material liabilities, and all
expenses related to this Agreement or otherwise shall have been paid.
6.07 Securities Filings. Hi-Tech shall be responsible for the
preparation of a Form D and its filing with the Securities and Exchange
Commission and Rubicon will be responsible for any and all filings in any
jurisdiction where its shareholders reside which would require a filing with a
governmental agency as a result of the transactions contemplated in this
Agreement.
6.08 Sales of Securities Under Rule 144, If Applicable.
(a) Hi-Tech will use its best efforts to at all times satisfy the
current public information requirements of rule 144 promulgated under the
Securities Act so that its shareholders can sell restricted securities that
have been held for one year or more or such other restricted period as
required by rule 144 as it is from time to time amended.
(b) Upon being informed in writing by any person holding restricted
stock of Hi-Tech as of the date of this Agreement that such person intends to
sell any shares under rule 144 promulgated under the Securities Act (including
any rule adopted in substitution or replacement thereof), Hi-Tech will certify
in writing to such person that it is compliance with rule 144 current public
information requirement to enable such person to sell such person's restricted
stock under rule 144, as may be applicable under the circumstances.
(c) If any certificate representing any such restricted stock is
presented to Hi-Tech's transfer agent for registration or transfer in
connection with any sales theretofore made under rule 144, provided such
certificate is duly endorsed for transfer by the appropriate person(s) or
accompanied by a separate stock power duly executed by the appropriate
person(s) in each case with reasonable assurances that such endorsements are
genuine and effective, and is accompanied by an opinion of counsel
satisfactory to Hi-Tech and its counsel that such transfer has complied with
the requirements of rule 144, as the case may be, Hi-Tech will promptly
instruct its transfer agent to register such transfer and to issue one or more
new certificates representing such shares to the transferee and, if
appropriate under the provisions of rule 144, as the case may be, free of any
stop transfer order or restrictive legend. The provisions of this
Section 6.08 shall survive the Closing and the consummation of the
transactions contemplated by this Agreement for a period of two years.
6.09 New Board of Directors and Officers. Upon closing of the
transactions contemplated by this Agreement, the current board of directors
and officers of Hi-Tech shall resign and in their place three nominees of
Rubicon shall be appointed, subject to the approval of the suitability and
qualifications of such nominees.
ARTICLE VII
MISCELLANEOUS
7.01 Brokers. Except for any agreements with Xxxxx Consulting
Services, Inc., Hi-Tech and Rubicon agree that there were no finders or
brokers involved in bringing the parties together or who were instrumental in
the negotiation, execution, or consummation of this Agreement. Further, Hi-
Tech and Rubicon each agree to indemnify the other against any claim by any
third person for any commission, brokerage, or finder's fee or other payment
with respect to this Agreement or the transactions contemplated hereby based
on any alleged agreement or understanding between such party and such third
person, whether express or implied, from the actions of such party.
The covenants set forth in this section shall survive the Closing Date
and the consummation of the transactions herein contemplated.
7.02 No Representation Regarding Tax Treatment. No representation or
warranty is being made by any party to any other regarding the treatment of
this transaction for federal or state income taxation. Each party has relied
exclusively on its own legal, accounting, and other tax adviser regarding the
treatment of this transaction for federal and state income taxes and on no
representation, warranty, or assurance from any other party or such other
party's legal, accounting, or other adviser.
7.03 Governing Law. This Agreement shall be governed by, enforced
and construed under and in accordance with the laws of the State of Delaware.
7.04 Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if personally delivered, if
sent by facsimile or telecopy transmission or other electronic communication
confirmed by registered or certified mail, postage prepaid, or if sent by
prepaid overnight courier addressed as follows:
If to Hi-Tech, to: If to Rubicon, to:
C. Xxxxxx Xxxxxxxx, President Xxxxxxx X. Xxxxxx, President
Hi-Tech Corporation Rubicon Medical, Inc.
0000 Xxxxx Xxxxx 0000 X. Xxxxxxxxx
Xxxx Xxxxxx, Xxxx 00000 Xxxx Xxxx Xxxx, Xxxx 00000
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices, hereunder, and any such notice or communication
shall be deemed to have been given as of the date so delivered or sent by
facsimile or telecopy transmission or other electronic communication, or one
day after the date so sent by overnight courier.
7.05 Attorney's Fees. In the event that any party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the breaching party or parties shall reimburse the
nonbreaching party or parties for all costs, including reasonable attorneys'
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
7.06 Schedules; Knowledge. Whenever in any section of this Agreement
reference is made to information set forth in the schedules provided by Hi-
Tech or Rubicon such reference is to information specifically set forth in
such schedules and clearly marked to identify the section of this Agreement to
which the information relates. Whenever any representation is made to the
"knowledge" of any party, it shall be deemed to be a representation that no
officer or director of such party, after reasonable investigation, has any
knowledge of such matters.
7.07 Entire Agreement. This Agreement represents the entire
agreement between the parties relating to the subject matter hereof. All
previous agreements between the parties, whether written or oral, have been
merged into this Agreement. This Agreement alone fully and completely
expresses the agreement of the parties relating to the subject matter hereof.
There are no other courses of dealing, understandings, agreements,
representations, or warranties, written or oral, except as set forth herein.
7.08 Survival; Termination. The representations, warranties, and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for a period of six
months from the Closing Date, unless otherwise provided herein.
7.09 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
7.10 Amendment or Waiver. Every right and remedy provided herein
shall be cumulative with every other right and remedy, whether conferred
herein, at law, or in equity, and such remedies may be enforced concurrently,
and no waiver by any party of the performance of any obligation by the other
shall be construed as a waiver of the same or any other default then,
theretofore, or thereafter occurring or existing. At any time prior to the
Closing Date, this Agreement may be amended by a writing signed by all parties
hereto, with respect to any of the terms contained herein, and any term or
condition of this
(The rest of this page intentionally left blank.)
Agreement may be waived or the time for performance thereof may be extended by
a writing signed by the party or parties for whose benefit the provision is
intended.
IN WITNESS WHEREOF, the corporate parties hereto have caused this
Agreement to be executed by their respective officers, hereunto duly
authorized, as of the date first above written.
HI-TECH CORPORATION, RUBICON, INC.,
a Delaware corporation a Utah corporation
By: /s/ By: /s/
------------------- ---------------------
Xxxx Xxxxxxxx, President Xxxxxxx X. Xxxxxx, Chief Executive
Officer
HI-TECH MERGER CO.,
a Utah corporation
By: /s/
-------------------------
Xxxx Xxxxxxxx, President
STATE OF UTAH )
ss.
COUNTY OF SALT LAKE )
On this 16 day of August, 2000, personally appeared before me Xxxx
Xxxxxxxx, whose identity is personally known to me and who by me duly sworn,
did say that he is the President of Hi-Tech Corporation and Hi-Tech Merger Co.
and that said document was signed by him of behalf of said corporations by
authority of their bylaws, and said Xxxx Xxxxxxxx acknowledged to me that said
corporation executed the same.
---------------------------
NOTARY PUBLIC
STATE OF UTAH )
ss.
COUNTY OF Salt Lake )
On this 16 day of August, 2000, personally appeared before me Xxxxxxx X.
Xxxxxx, whose identity is personally known to me and who by me duly sworn, did
say that he is the Chief Executive Officer of Rubicon, Inc. and that said
document was signed by him of behalf of said corporation by authority of its
bylaws, and said Xxxxxxx X. Xxxxxx acknowledged to me that said corporation
executed the same.
---------------------------
NOTARY PUBLIC
Exhibit A-1
Rubicon, Inc.
List of Shareholders
