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EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
INTEGRAL TECHNOLOGIES, INC.
Acquisition of
INTEGRAL VISION SYSTEMS, INC.
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TABLE OF CONTENTS
RECITALS
AGREEMENT
1. Plan of Reorganization
1.1 Liabilities
1.2 Acquisition
1.3 Exchange of Shares
1.4 Reorganization
1.5 Taxes
2. Closing
2.1 Delivery of Shares
2.2 Place and Time
2.3 Closing Requirements
3. Acquiror's Right to Unwind
4. Representations of Stockholders and Acquiree
4.1 Organization
4.2 Authority
4.3 Capitalization
4.4 Stockholders
4.5 Subsidiaries
4.6 Due Diligence
4.7 Approvals and Consent
4.8 Financial Statements
4.9 Undisclosed Liabilities
4.10 Assets
4.11 Environmental Matters
4.12 Insurance
4.13 Bank Accounts
4.14 Employees
4.15 Employment/Consulting Contracts
4.16 Litigation
4.17 Applicable Laws
4.18 Taxes
4.19 Breach of Contracts
4.20 Acquiree Disclosure
4.21 Stockholder Disclosure
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5. Representations of Acquiror
5.1 Organization
5.2 Capitalization
5.3 Authority
5.4 Approvals and Consent
5.5 Litigation
5.6 Breach of Contracts
5.7 Acquiror Disclosure
6. Conduct of Acquiree's Business Pending Closing
6.1 Dividends and Distributions
6.2 Preservation of Organization
7. Indemnification
8. Joint Covenants of Acquiror and Acquiree
9. Restrictions on Transfer of Shares
10. Confidentiality
11. Advances
12. Nature and Survival of Representations
13. Conditions Precedent to the Obligations of Acquiree and Stockholders
13.1 Representations and Warranties True at Closing
13.2 Resolutions by Directors of Acquiror
13.3 No Litigation
13.4 Delivery of ITI Shares
13.5 Compliance
14. Conditions Precedent to the Obligations of Acquiror
14.1 Representations and Warranties True at Closing
14.2 Resolutions by Directors of Acquiree
14.3 No Litigation
14.4 Cancellation of Debt
14.5 Financial Conditions
14.6 Delivery of IVSI Shares
14.7 Delivery of Records
14.8 Compliance
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15. Termination
15.1 Termination by Acquiror
15.2 Termination by Acquiree and Stockholders
15.3 Procedure Upon Termination
16. Miscellaneous
16.1 Undertakings and Further Assurances
16.2 Waiver
16.3 Notices
16.4 Headings
16.5 Governing Law
16.6 Binding Effect
16.7 Entire Agreement
16.8 Time
16.9 Expenses
16.10 Default Costs
16.11 Severability
16.12 Counterparts and Facsimile Signatures
SIGNATURE PAGE
EXHIBITS
1.1 Schedule of Outstanding Debts Held By Stockholders of Acquiree
1.3 Schedule of Share Allocation
3 Summary of Technology Licenses Held By Acquiree
4.4 List of Acquiree Stockholders
4.7 Schedule of Approvals and Consents--Acquiree and Stockholders
4.8 Audited Financial Statements of Acquiree
4.9 Schedule of Liabilities of Acquiree
4.10 Schedule of Assets (and Encumbrances) of Acquiree
4.12 Insurance Policies
4.13 Schedule of Bank Accounts
4.16 Schedule of Litigation Matters
4.19 Breach of Contracts--Acquiree
5.2a Shareholders List of Acquiror
5.2b Employee Benefit and Consulting Services Compensation Plan of
Acquiror
5.4 Schedule of Approvals and Consents--Acquiror
5.6 Breach of Contracts--Acquiror
14.6 Form of Subscription Agreement--Stockholders
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AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (this "Agreement") is
entered into as of the 11th day of March, 1997, by and between INTEGRAL
TECHNOLOGIES, INC., a Nevada corporation ("Acquiror"); INTEGRAL VISION SYSTEMS,
INC., a West Virginia corporation ("Acquiree"); and the undersigned
stockholders of Acquiree ("Stockholders"):
RECITALS
WHEREAS, Stockholders own 100% of the issued and outstanding common
stock of Acquiree; and
WHEREAS, Acquiror desires to acquire 100% of the issued and
outstanding common stock of Acquiree, and Stockholders desire to exchange 100%
of their shares of common stock in Acquiree for shares of common stock of
Acquiror; and
WHEREAS, a letter agreement dated November 8, 1995 (the "Letter"), was
executed by and between certain individual founders of Acquiror and Integral
Concepts, Inc., which Letter, inter alia, made initial provisions for the
consummation of this transaction, and is superseded by this Agreement to the
extent of any conflict between this Agreement and the Letter; and
WHEREAS, Acquiror has advanced ninety thousand dollars ($90,000.00) to
Acquiree, pursuant to the terms of the Letter;
NOW, THEREFORE, for and in consideration of the mutual covenants and
representations and warranties of each other contained herein and other good
and valuable consideration, the receipt of which is hereby acknowledged,
Acquiror, Acquiree and Stockholders agree as follows:
1. Plan of Reorganization. The Plan of Reorganization is as follows:
1.1 Liabilities. At Closing (as hereinafter defined), Stockholders shall cancel
any and all outstanding debts (including promissory notes, accounts payable and
other obligations) of Acquiree held by Stockholders (collectively, the "Debt
Holders"), with all such outstanding debts held by Debt Holders, if any, more
fully described in Exhibit 1.1 hereto.
1.2 Acquisition. At the Closing, Acquiror shall acquire from Stockholders, and
Stockholders shall sell, transfer, assign and convey to Acquiror, 100% of all
the issued and outstanding shares of common stock of Acquiree, par value $1.00
per share, on the date thereof (the "IVSI Shares"), in exchange for 100,000
restricted shares of Acquiror's common stock, par value $.001 per share (the
"ITI Shares"). The ITI Shares issued shall have the rights, restrictions and
privileges set forth in Acquiror's Articles of Incorporation and in the stock
certificates therefor.
1.3 Exchange of Shares. To consummate the acquisition, ITI Shares shall be
delivered by the Acquiror to the respective Stockholders as set forth in
Exhibit 1.3 hereto for the number of shares indicated across from their
respective names, in exchange for 100% of the IVSI Shares owned by each
Stockholder, as indicated on the signature page hereto.
1.4 Reorganization. Upon the Closing, Acquiree shall become a wholly-owned
subsidiary of Acquiror. The officers and directors of Acquiree shall resign at
the Closing, and the officers and directors of Acquiree after the
reorganization shall be:
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Name Position
---- --------
Xxxxxxx X. Xxxxxxxx President, Treasurer, Director
Xxxxxxx X. Xxxx Secretary, Director
1.5 Taxes. It is the intention of the parties hereto that this transaction
qualify as a tax-free reorganization under Section 368(a)(1)(B) of the Internal
Revenue Code of 1954, as amended, and related sections thereunder. In the event
that this transaction is determined not to qualify as a tax-free
reorganization, each party shall be responsible for and shall pay any and all
taxes charges or fees attributable to such party, including individual state
and federal income taxes, arising out of, or by reason of, the exchange of the
ITI Shares for the IVSI Shares, or otherwise in connection with the
transactions contemplated hereby.
2. Closing. At the Closing, Stockholders shall be deemed to have accepted
delivery of the certificates of the ITI Shares to be issued in their names, and
in connection therewith, shall make delivery of their IVSI Shares to Acquiror.
2.1 Delivery of Shares. On or before the Closing Date, Stockholders shall
deliver their respective certificates representing 100% of all the issued and
outstanding IVSI Shares duly endorsed in blank, free and clear of all claims
and encumbrances; and on the Closing Date, Acquiror shall deliver the ITI
Shares, which shall be appropriately restricted as to transfer, to
Stockholders. All stock certificates delivered by Stockholders under this
Agreement may be held in escrow by counsel to Acquiree until the Closing. The
ITI Shares shall be duly issued in the names designated by the Stockholders in
accordance with Subparagraph 1.3 above, and shall be duly recorded on the books
and records of Acquiror.
2.2 Place and Time. The closing of the reorganization and the transactions
contemplated in this Agreement (the "Closing") shall take place within fifteen
(15) days following the satisfaction (or waiver) of the conditions set forth in
Paragraphs 13 and 14 hereof at such place and on such date as mutually agreed
upon by the parties (the "Closing Date").
2.3 Closing Requirements. At the Closing, each of the parties shall execute and
deliver such instruments and documents and take such other actions as may, in
the reasonable opinion of counsel for each, be required to complete the
transactions under this Agreement. The following documents shall have been
delivered and the following activities shall be deemed to have taken place
contemporaneously at the Closing:
a) the securities to be delivered pursuant to Subparagraph 2.1 have
been delivered to the respective parties duly endorsed or issued as
the case may be, pursuant to Subparagraphs 1.3 and 2.1.
b) delivery of all corporate records of Acquiree, including without
limitation, corporate minute books (which shall contain copies of
the Articles of Incorporation and Bylaws, as amended to the
Closing), stock books, stock transfer books, corporate seals, and
such other corporate books and records as may be reasonably
requested for review by Acquiror;
c) delivery of the evidence of cancellation of debts and release of
liens by the Debt Holders satisfactory to Acquiror pursuant to
Subparagraph 1.1 hereof;
d) a certificate of the President and the Secretary of Acquiree to the
effect that all representations and warranties of Acquiree made
under this Agreement are reaffirmed on the Closing Date, the same
as though originally given to Acquiror on said date as set forth
herein;
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e) the Subscription Agreements of the Stockholders;
f) a certificate from the West Virginia Secretary of State dated at or
about the date of the Closing to the effect that Acquiree is in
good standing under the laws of said State;
g) copies of resolutions by Acquiree's Board of Directors authorizing
this Agreement;
h) resignations of all of the members of the Board of Directors and
officers of Acquiree effective as of the Closing Date;
i) a certificate of the President and the Secretary of Acquiror to the
effect that all representations and warranties of Acquiror made
under this Agreement are reaffirmed on the Closing Date, the same
as though originally given to Acquiree and Stockholders on said
date;
j) copies of resolutions by Acquiror's Board of Directors authorizing
this Agreement;
k) a certificate from the Secretary of State of Nevada dated at or
about the date of Closing to the effect that Acquiror is in good
standing under the laws of said State; and
l) the parties hereto have signed and delivered such other instruments
and documents, if any, relating to and effecting the transactions
contemplated herein.
3. Technology Licenses Held By Acquiree. West Virginia University Research
Corporation ("WVURC") has licensed the rights to certain technologies to
Integral Concepts, Inc. ("ICI"), some of which have been further sub-licensed
to Acquiree. Copies of all such licenses from WVURC to ICI, sub-licenses from
ICI to Acquiree, and any further sub-licenses from Acquiree to any third-party
will be provided by Acquiree at Closing and identified on Exhibit 3. Acquiror
acknowledges the existence of the required royalty payments that exist under
the licenses and sub-licenses identified on Exhibit 3 and that the royalty
payments will continue to be required to be paid after the consummation of this
transaction."
4. Representations of Stockholders and Acquiree. Each of the Stockholders and
Acquiree hereby represents and warrants that effective this date and the
Closing Date, the representations and warranties listed below are true and
correct:
4.1 Organization. Acquiree is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of West Virginia with full
power and authority to own and use its properties and conduct its business as
presently conducted by it. Acquiree has furnished Acquiror or its counsel with
copies of the Articles of Incorporation and the Bylaws of Acquiree, including
all amendments thereto. Such copies are true, correct and complete and contain
all amendments through the date hereof, which, together with this Agreement,
are sufficient to effect the transactions hereunder and evidence the intent of
the parties hereto.
4.2 Authority. Acquiree has the requisite corporate authority to enter into and
perform its obligations under this Agreement and to consummate the transactions
contemplated hereby in accordance with the terms hereof. The execution and
delivery of this Agreement by Acquiree and the consummation of the transactions
contemplated hereby will not violate or conflict with any provisions of the
Articles of Incorporation, as amended, or Bylaws of Acquiree or contravene any
law, rule, regulation, court or administrative order binding on it, or result
in the breach of or constitute a default in the performance of any material
obligation, agreement, covenant or condition contained in any material
contract, lease, judgment, decree, order, award, note, loan or credit agreement
or any other material agreement or instrument to which Acquiree is a party or
by which it is bound, the default or breach of which would have
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a material adverse effect on the property and assets of Acquiree, considered as
a whole. Acquiree has taken all requisite corporate action to authorize and
approve the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby. Upon due execution and
delivery of this Agreement, this Agreement will constitute a valid, legal and
binding obligation of Acquiree and the respective Stockholders enforceable
against them in accordance with its terms.
4.3 Capitalization. The authorized stock of Acquiree consists of (a) one
hundred (100) shares of common stock, par value $1.00 per share, and (b) no
shares of preferred stock. Immediately prior to the Closing, there will be one
hundred (100) shares of IVSI common stock issued and outstanding and no shares
of IVSI preferred stock issued and outstanding. All such IVSI shares issued and
outstanding are duly and validly authorized and issued and are fully paid and
nonassessable. Acquiree does not have outstanding any security convertible
into, or any warrant, option or other right to subscribe for or acquire any
shares of stock of Acquiree.
4.4 Stockholders. The holders of the IVSI Shares shown on the stock books of
the Acquiree own 100% of the issued and outstanding IVSI Shares, free and clear
of any security interest, claim, lien or encumbrance; and there are no
outstanding rights, warrants or options to subscribe for or acquire or
instruments convertible into or exchangeable for, any shares of stock or other
equity interest in Acquiree. The Acquiree Stockholders listed on the attached
Exhibit 1.3 are the owners of 100% of the issued and outstanding IVSI Shares;
such IVSI Shares are free and clear from claims, liens, or other encumbrances;
and Stockholders have the unqualified right to transfer and dispose of their
respective IVSI Shares. Stockholders will deliver, upon reasonable demand of
Acquiror, any approvals, consents or other authorizations to Acquiror and said
approvals, consents and other authorizations will have been duly executed,
valid and binding.
4.5 Subsidiaries. Acquiree has no subsidiaries.
4.6 Due Diligence. In addition to the documents described in Subparagraph 4.1
hereof, Acquiree has furnished to Acquiror copies of all documents requested by
Acquiror. No "due diligence" investigations undertaken by Acquiror shall in any
event relieve Acquiree or the respective Stockholders of their responsibilities
for the accuracy and completeness of any representation or warranty of Acquiree
or of the respective Stockholders contained herein or the performance of any
covenant or agreement of Acquiree or of the respective Stockholders contained
herein.
4.7 Approvals and Consent. Except as set forth in Exhibit 4.7 hereto, no
approval, authorization or other action by, or filing with, any third-party,
including a governmental authority is required in connection with the
execution, delivery and performance by Acquiree and the respective Stockholders
of their obligations under this Agreement and their respective performance of
the transactions contemplated hereby.
4.8 Financial Statements. Acquiree has provided audited financial statements of
Acquiree prepared in accordance with the requirements of Regulation S-B of the
Securities Act of 1933, as amended (the "Act"), for the period of time since
commencing operations up to June 30, 1996, which are attached as Exhibit 4.8.
4.9 Undisclosed Liabilities. Acquiree has no material liabilities or
obligations whatsoever, either accrued, absolute, contingent or otherwise,
except: (i) as disclosed on the financial statements attached as Exhibit 4.8;
(ii) that do or may exceed $1,000 per liability/obligation as shown on Exhibit
4.9 hereto; or (iii) those incurred in or as a result of the ordinary course of
business of Acquiree and not exceeding $10,000 in the aggregate.
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4.10 Assets. The assets of Acquiree as set forth in Exhibits 4.8 and/or 4.10
(including real, personal and intangible) have been acquired in bona fide
transactions, fully supported by appropriate instruments of assignment, sale,
or transfer, where appropriate, and are offset by no liabilities or
contingencies, contractual or otherwise, except as indicated in Exhibits 4.8
and/or 4.10.
4.11 Environmental Matters. The operations of Acquiree on the Closing Date will
be in substantial compliance with all applicable material federal, state or
local environmental statutes, rules and regulations; none of the operations of
Acquiree is subject to any pending judicial or administrative proceedings
alleging the violation of any federal, state or local environmental statute,
rule or regulation; and none of the real property owned or leased by Acquiree
is subject of a federal, state or local government investigation regarding or
in response to a release or threatened release of any hazardous substance into
the environment, which investigation or remedial action in response thereto
would materially adversely affect the operations or financial condition of the
Acquiree, considered as a whole.
4.12 Insurance. Acquiree's policies of insurance in force are listed on Exhibit
4.12 hereto. Such policies are in amounts and contain coverages sufficient to
satisfy all minimum requirements of law, are sufficient for the adequate
protection of the insurable interest of Acquiree and will be outstanding and in
force on the Closing Date hereunder.
4.13 Bank Accounts. Exhibit 4.13 hereto sets forth the name of each bank in
which Acquiree has an account or safe deposit box and the names of all persons
authorized thereon or to have access thereto. At the Closing hereunder, new
signature cards will be signed as directed by Acquiror.
4.14 Employees. No employee of Acquiree is represented by a union or a
collective bargaining agreement of any kind. Acquiree has complied in all
material respects with all applicable laws relating to the employment of labor
in connection with the operations of its business, including, without
limitation, those relating to wages, hours, collective bargaining, unemployment
insurance, worker's compensation, equal employment opportunity and the payment
and withholding of taxes, including income and social security taxes.
4.15 Employment/Consulting Contracts. Acquiree has no Employment/Consulting
Contracts or any contracts providing for bonus, profit sharing or pension
arrangements.
4.16 Litigation. Except as set forth in Exhibit 4.16 hereto, Acquiree is not
involved in any pending litigation or governmental investigation or proceeding
and, to the best knowledge of Acquiree and Stockholders, no litigation, claims,
assessments, or governmental investigation or proceeding is threatened against
Acquiree, its Stockholders or properties.
4.17 Applicable Laws. Acquiree has complied with all state, federal and local
laws in connection with its formation, issuance of securities, organization,
capitalization and operations, and no contingent liabilities have been
threatened or claims made, and no basis for the same exists with respect to
said operations, formation or capitalization, including claims for violation of
any state or federal securities laws.
4.18 Taxes. Acquiree has filed all governmental, tax or related returns and
reports due or required to be filed and has paid all taxes or assessments which
have become due as of the Closing Date, and Acquiree, to the best of its
knowledge, is not subject to a tax audit by any federal, state or local tax
authority and its properties are not subject to any tax liens. Acquiree will
cause to be filed or prepared, as applicable, by the Closing Date, all federal,
state, county and local income, excise, property and other tax returns, forms,
or reports, which are due or required to be filed by it prior to the Closing
Date.
4.19 Breach of Contracts. Except as disclosed on Exhibit 4.19, Acquiree has not
breached, nor is there any pending or threatened claims or any legal basis for
a claim that Acquiree has breached, any of
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the terms or conditions of any agreements, contracts or commitments to which it
is a party or is bound and the execution and performance hereof will not
violate any provisions of applicable law of any agreement to which Acquiree is
subject.
4.20 Acquiree Disclosure. At the date of this Agreement, Acquiree has, and at
the Closing Date it will have, disclosed all events, conditions and facts
materially affecting the business and prospects of Acquiree. Acquiree has not
now and will not have, at the Closing Date, withheld disclosure of any such
events, conditions, and facts which it, through management, has knowledge of,
or has reasonable grounds to know, which may materially affect the business and
prospects of Acquiree.
4.21 Stockholder Disclosure. Each Stockholder hereby represents that the
materials prepared and delivered by Acquiror to Stockholders will have been
read and understood by such Stockholder, including Paragraph 9 hereof, that he
is familiar with the business of Acquiror, that he is acquiring the ITI Shares
under Section 4(2) of the Act, commonly known as the private offering
exemption, and that the shares are restricted and may not be resold, except in
reliance upon an exemption under the Act.
5. Representations of Acquiror. Acquiror hereby represents and warrants as
follows:
5.1 Organization. Acquiror is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada with full power and
authority to own and use its properties and conduct its business as presently
conducted by it. Acquiror is duly qualified and in good standing to do business
as a foreign corporation in any other jurisdiction where failure to so qualify
would have a material adverse effect on its business or assets. The Acquiror
has made available to Acquiree copies of the Articles of Incorporation and the
Bylaws of Acquiror, including all amendments thereto. Such copies are true,
correct and complete and contain all amendments through the date hereof,
together with this Agreement, which are sufficient to effect the transactions
hereunder and evidence the intent of the parties hereto.
5.2 Capitalization. The authorized stock of Acquiror consists of (a) 50,000,000
shares of common stock and (b) 20,000,000 shares of preferred stock.
Immediately prior to the Closing, there will be approximately 11,663,500 shares
of ITI common stock issued and outstanding and no shares of preferred stock
issued and outstanding, prior to the issuance of the 100,000 ITI Shares to be
issued at Closing pursuant to this Agreement. Acquiror also anticipates issuing
an additional 1,800,000 shares of ITI common stock in its acquisition of
Emergent Technologies Corporation. Acquiror will provide a complete
shareholders list at or before Closing, to be attached as Exhibit 5.2a. At the
time of their issuance and delivery on the Closing Date, all ITI Shares to be
issued pursuant to the terms hereof shall be duly and validly authorized and
issued, fully paid and nonassessable. Acquiror does not have outstanding any
security convertible into, or any warrant, option or other right to subscribe
for or acquire any shares of stock of Acquiror, other than options granted
under Acquiror's "Employee Benefit and Consulting Services Compensation Plan"
(the "Plan") that allows Acquiror to grant options to acquire up to 2,000,000
shares of Acquiror's common stock, to persons eligible to participate in the
Plan. Acquiror will provide a copy of the Plan at or before Closing, to be
attached as Exhibit 5.2b.
5.3 Authority. Acquiror has the requisite corporate authority to enter into and
perform its obligations under this Agreement and to consummate the transactions
contemplated hereby in accordance with the terms hereof. The execution and
delivery of this Agreement by Acquiror and the consummation of the transactions
contemplated hereby will not violate or conflict with any provisions of the
Articles of Incorporation, as amended, or Bylaws of Acquiror or contravene any
law, rule, regulation, court or administrative order binding on it, or result
in the breach of or constitute a default in the performance of any material
obligation, agreement, covenant or condition contained in any material
contract, lease, judgment, decree, order, award, note, loan or credit agreement
or any other material agreement or instrument to which Acquiror is a party or
by which it is bound, the default or breach of which would have a
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material adverse effect on the property and assets of Acquiror, considered as a
whole. Acquiror has taken all requisite corporate action to authorize and
approve the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby. Upon due execution and
delivery of this Agreement, this Agreement will constitute a valid, legal and
binding obligation of Acquiror enforceable against it in accordance with its
terms.
5.4 Approvals and Consent. Except as set forth in Exhibit 5.4 hereto, no
approval, authorization or other action by, or filing with, any third-party,
including a governmental authority is required in connection with the
execution, delivery and performance by Acquiror of its obligations under this
Agreement and its performance of the transactions contemplated hereby.
5.5 Litigation. Acquiror is not involved in any pending litigation or
governmental investigation or proceeding and, to the best knowledge of
Acquiror, no litigation, claims, assessments, or governmental investigation or
proceeding is threatened against Acquiror, its stockholders or properties.
5.6 Breach of Contracts. Except as disclosed on Exhibit 5.6, Acquiror has not
breached, nor is there any pending or threatened claims or any legal basis for
a claim that Acquiror has breached, any of the terms or conditions of any
agreements, contracts or commitments to which it is a party or is bound and the
execution and performance hereof will not violate any provisions of applicable
law of any agreement to which Acquiror is subject.
5.7 Acquiror Disclosure. At the date of this Agreement, Acquiror has, and at
the Closing Date it will have, disclosed all events, conditions and facts
materially affecting the business and prospects of Acquiror. Acquiror has not
now and will not have, at the Closing Date, withheld disclosure of any such
events, conditions, and facts which it, through management, has knowledge of,
or has reasonable grounds to know, which may materially affect the business and
prospects of Acquiror.
6. Conduct of Acquiree's Business Pending Closing. Acquiree shall carry on its
business in the usual and ordinary course and not make or institute any unusual
method of purchase, sale, lease, management, accounting or operation. Further,
Acquiree shall not have entered into any material transactions, including any
material transactions with the respective officers, directors or stockholders,
other than in the ordinary course of business, except as expressly approved in
advance in writing by Acquiror.
6.1 Dividends and Distributions. Acquiree shall not declare or pay any
dividends or make any distribution in respect of its capital stock, and not,
directly or indirectly, issue or sell any additional shares of its capital
stock.
6.2 Preservation of Organization. Acquiree shall preserve its business
organizations in tact and use its best efforts to preserve its present
relationships with its employees, suppliers and customers and others having
business relations with it. In addition, Acquiree shall not do any act nor
admit to do any act nor permit any act or omission to act, which would cause a
breach of any material contract, commitment or obligation which would
materially and adversely affect its business or financial condition.
7. Indemnification. The parties hereby agree that for a period of two years
commencing the date hereof, and in accordance with the terms of Paragraph 12,
each party to this Agreement shall indemnify and hold harmless each other party
at all times after the date of this Agreement against and in respect of any
third-party liability, damage or deficiency, all actions, suits, proceedings,
demands, assessments, judgments, costs and expenses, including attorney's fees,
incident to any of the foregoing, resulting from any misrepresentation, breach
of covenant or warranty or nonfulfillment of any agreement on the part of such
party under this Agreement or from any misrepresentation in or intentional
omission from any document or certificate furnished or to be furnished to a
party hereunder. Subject to the terms of this
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Agreement, the defaulting party shall reimburse the other party or parties with
respect to such third-party's actions on demand, for any reasonable payment
made by said parties at any time after the Closing, in respect of any liability
or claim to which the foregoing indemnity relates, if such payment is made
after reasonable notice to the other party to defend or satisfy the same and
such party failed to defend or satisfy the same. In the event a third-party
action is threatened or commenced but not resolved within said two-year period,
the parties hereby agree to extend this indemnification through resolution of
the third-party action.
In addition, each party agrees to indemnify each other party for any
loss incurred as a result of the subsequent discovery of any liability that is
not disclosed in the financial statements or schedules provided under this
Agreement that was known to such knowledgeable party or parties at the time of
the Closing.
8. Joint Covenants of Acquiror and Acquiree. Acquiror and Acquiree and the
respective Stockholders each covenant and agree to execute any further
documents or agreements and to take any further acts that may be reasonably
necessary to effect the transactions contemplated hereunder, including, but not
limited to, obtaining any consents or approvals of any third-party required to
be obtained to consummate the transactions contemplated by this Agreement.
9. Restrictions on Transfer of Shares. The parties hereto acknowledge that the
ITI Shares issued in connection with the transactions contemplated hereby are
restricted as to transfer and the certificates therefore shall bear legends to
such effect and no transfer of any ITI Share may be effected, except pursuant
to an effective registration statement prepared and filed pursuant to the Act
or pursuant to an exemption from registration thereunder, as evidenced by an
opinion of counsel or as otherwise allowed under the laws of descent and
distribution.
10. Confidentiality. Unless and until the transactions contemplated hereby have
been consummated, the respective parties hereto shall hold in strict confidence
and not use or disclose to any other person any information heretofore or
hereafter obtained from the other parties' hereto, whether pertaining to the
financial condition, results of operations, methods of operations or otherwise
of such respective parties, except any of the same which was or is public or
published information or is otherwise a matter of public knowledge, or is
required to be disclosed by Acquiror or by its officers, agents or
representatives by law or in connection with any proceeding before any
governmental authority. If the transactions contemplated hereby are not
consummated, the respective parties shall return to the appropriate parties
hereto and shall not retain any copies of any written information and other
written material respecting the respective parties or their businesses obtained
by them from the other parties hereto or their respective officers, agents,
employees or representatives in connection with the negotiation of and the
transactions contemplated by this Agreement, or any such written information or
material prepared by any party hereto from oral information supplied by such
other parties hereto or any of their respective officers, agents, employees or
representatives, and each party hereto shall use all reasonable efforts to keep
confidential any information obtained by them in connection with this
Agreement, unless and until such information is ascertainable from public or
published information or trade sources or is otherwise a matter of public
knowledge.
11. Advances. Acquiree Acknowledges that Acquiror has advanced ninety thousand
dollars ($90,000.00) to Acquiree, pursuant to the terms of the Letter, to fund
Acquiree's operations pending consummation of this Agreement.
12. Nature and Survival of Representations. All representations, warranties and
covenants made by any party in this Agreement shall survive the Closing
hereunder and the consummation of the transactions contemplated hereby for two
years from the date hereof. All of the parties hereto are executing and
carrying out the provisions of this Agreement in reliance solely on the
representations, warranties and covenants and agreements contained in this
Agreement or at the Closing of the transactions herein
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provided for and not upon any investigation upon which it might have made or
any representations, warranty, agreement, promise or information, written or
oral, made by the other party or any other person other than as specifically
set forth herein.
13. Conditions Precedent to the Obligations of Acquiree and Stockholders. All
obligations of Acquiree and Stockholders under this Agreement are subject to
the fulfillment by Acquiror, prior to or as of the Closing Date, of each of the
following conditions:
13.1 Representations and Warranties True at Closing. The representations and
warranties made by Acquiror shall be true on and as of the Closing Date as if
made on that date, and Acquiror shall have delivered a certificate of its
President so stating.
13.2 Resolutions by Directors of Acquiror. Acquiror shall have delivered to
Acquiree and Stockholders a copy of the resolutions of its Board of Directors
authorizing or ratifying the execution and performance of this Agreement and
approving the transactions contemplated hereby.
13.3 No Litigation. No suit, action or other proceeding shall be pending or
threatened before any court or governmental agency in which it is sought to
restrain, prohibit or obtain damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated hereby.
13.4 Delivery of ITI Shares. Acquiror shall have delivered to Acquiree and the
respective Stockholders stock certificates representing the ITI Shares as
described in Subparagraph 2.1 hereof and required hereunder to be delivered to
Acquiree and the respective Stockholders on the Closing Date.
13.5 Compliance. Acquiror shall have performed and complied with all covenants,
agreements, and conditions required by this Agreement to be performed or
complied with by it prior to or at the Closing on the Closing Date.
14. Conditions Precedent to the Obligations of Acquiror. All obligations of
Acquiror under this Agreement are subject to the fulfillment by Acquiree and
Stockholders, prior to or as of the Closing Date, of each of the following
conditions:
14.1 Representations and Warranties True at Closing. The representations and
warranties made by Acquiree and by each respective Stockholder shall be true on
and as of the Closing Date as if made on that date, and Acquiree shall have
delivered a certificate from its President so stating.
14.2 Resolutions by Directors of Acquiree. Acquiree shall have delivered to
Acquiror a copy of the resolutions of its Board of Directors authorizing or
ratifying the execution and performance of this Agreement and approving the
transactions contemplated hereunder.
14.3 No litigation. No suit, action or other proceeding shall be pending or
threatened before any court or governmental agency in which it is sought to
restrain, prohibit or obtain damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated hereby.
14.4 Cancellation of Debt. All Debt Holders (as defined in Subparagraph 1.1
hereof) of the Acquiree shall have canceled all outstanding obligations owed to
them by Acquiree and released any liens in connection therewith on terms
satisfactory to Acquiror, in its sole discretion, including, but not limited
to, any UCC-1 financing statements filed against Acquiree.
14.5 Financial Conditions. Prior to the Closing Date there will not be any
substantial and material changes in the financial position of Acquiree as
represented, except changes arising in the ordinary
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course of business, and as disclosed to and accepted by Acquiror, which changes
will in no event adversely affect the financial position of said Acquiree.
14.6 Delivery of IVSI Shares. Each respective Stockholder shall have delivered
to Acquiror all their IVSI Shares to Acquiror on or before the Closing Date,
with the stock transfer instructions thereon duly executed in blank and
satisfactory to Acquiror, free and clear of all liens and encumbrances. In
addition, each respective Stockholder shall have delivered to Acquiror an
executed subscription agreement substantially in the form attached hereto as
Exhibit 14.6 and such other documents required to be delivered by them on the
Closing Date.
14.7 Delivery of Records. Acquiror shall have received at or prior to the
Closing, the corporate financial records, minute books, and other documents and
records of Acquiree in their entirety as requested to date by Acquiror. Prior
to that time, Acquiror shall have access to the same at any time.
14.8 Compliance. Acquiree and each respective Stockholder shall have performed
and complied with all covenants, agreements, and conditions required by this
Agreement to be performed or complied with by them prior to or at the Closing.
15. Termination.
15.1 Termination by Acquiror. Acquiror may, at any time prior to Closing,
terminate this Agreement if:
a) any of the material representations and warranties made by Acquiree
or any Stockholder as set forth herein or otherwise in connection
with this Agreement are found to be materially inaccurate, in the
opinions of Acquiror's legal counsel and/or independent certified
public accountants; or
b) Acquiree or any Stockholder fails to perform any of its respective
obligations pursuant to the terms of this Agreement on or before
the Closing Date; or
c) any Debt Holder fails to cancel the outstanding obligations owed it
by Acquiree or fails to release its liens in connection therewith
on terms satisfactory to Acquiror; or
d) the Closing Date does not occur within sixty (60) days of the date
of this Agreement for reasons other than Acquiror's failure to
perform its obligations hereunder.
15.2 Termination by Acquiree and Stockholders. Acquiree and Stockholders shall
have the right to terminate this Agreement at any time if:
a) any of the material representations and warranties made by Acquiror
as set forth herein or otherwise in connection with this Agreement
are found to be materially inaccurate, in the opinions of
Acquiree's or Stockholders' legal counsel and/or Acquiree's
independent certified public accountants; or
b) Acquiror fails to perform any of its obligations pursuant to the
terms of this Agreement on or before the Closing Date; or
c) the Closing Date does not occur within sixty (60) days of the date
of this Agreement for reasons other than Acquiree's or any
Stockholder's failure to perform its obligations hereunder.
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15.3 Procedure Upon Termination. In the event of termination and abandonment by
any party hereunder, notice thereof shall forthwith be given to other parties
and the transactions contemplated by this Agreement shall be terminated and/or
abandoned without further action by the parties. Except as provided in
Paragraph 10 (which obligations shall survive any termination and/or
abandonment of this transaction) and except for breaches or the nonfulfillment
of the warranties, representations, covenants and agreements contained in this
Agreement by such party, none of the parties shall have any further liability
or obligation to the other.
16. Miscellaneous.
16.1 Undertakings and Further Assurances. At any time, and from time to time,
after the effective date, each party will execute such additional instruments
and take such action as may be reasonably requested by the other party to carry
out the intent and purposes of this Agreement; and Acquiror agrees to bear all
reasonable additional costs incurred by all parties in connection therewith, on
the condition that Acquiror will not be obligated to reimburse or pay any
costs, expenses or fees incurred by Acquiree or Stockholders in excess of
$100.00, unless such costs, expenses or fees are authorized in advance, in
writing by Acquiror.
16.2 Waiver. Any failure on the part of any party hereto to comply with any of
its obligations, agreements or conditions hereunder may be waived in writing by
the party to whom such compliance is owed.
16.3 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered in person or sent
by prepaid first class registered or certified mail, return receipt requested,
or by Federal Express or other means of overnight delivery to the addresses
below:
Acquiror: Integral Technologies, Inc.
c/o Futro & Associates, P.C.
707 - 17th St., 29th Fl.
Xxxxxx, XX 00000
Acquiree: Integral Vision Systems, Inc.
c/o Xxxxxx X. Xxxxxx, Esq.
XxXxxx, Highland, McNunn and Xxxxxx, X.X.
000 Xxxxxxxx Xxx, X.X. Xxx 0000
Xxxxxxxxxx, XX 00000-0000
Stockholders: To the addresses specified on the books and records
of Acquiree or in their respective Subscription
Agreements to be delivered at Closing
16.4 Headings. The section and subsection headings in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
16.5 Governing Law and Arbitration Provision. This Agreement shall be governed
by the laws of the State of Nevada. Any dispute arising directly or indirectly
from this Agreement shall be settled by arbitration within the State of
Washington (as designated by Acquiror), if arbitration is demanded by Acquiree
or the Shareholders; or within the State of West Virginia (as designated by
Acquiree), if arbitration is demanded by Acquiror. Any arbitration will be
conducted by the American Arbitration Association in accordance with its Rules
of Commercial Arbitration, and judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. The parties
hereto agree that service by certified mail to their business addresses shall
constitute sufficient service of process of any proposed arbitration.
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16.6 Binding Effect. This Agreement shall be binding upon the parties hereto
and inure to the benefit of the parties, their respective heirs,
administrators, executors, successors and assigns. This Agreement shall not be
assigned by any party hereto, except upon the consent, in writing, of the other
parties hereto.
16.7 Entire Agreement. This Agreement, including the Exhibits hereto and other
documents delivered pursuant to the terms hereof, is the entire agreement of
the parties covering everything agreed upon or understood with respect to the
transactions contemplated hereby and supersedes all prior agreements,
covenants, representations or warranties, whether written or oral, by any party
hereto. There are no oral promises, conditions, representations,
understandings, interpretations or terms of any kind as conditions or
inducements to the execution hereof.
16.8 Time. Time is of the essence. The parties each agree to proceed promptly
and in good faith to consummate the transactions contemplated herein.
16.9 Expenses. Each of the parties hereto shall pay its own expenses incurred
in connection with the authorization, preparation, execution and performance of
this Agreement and obtaining any necessary regulatory approvals, including,
without limitation, all fees and expenses of their respective counsel.
16.10 Severability. If any part of this Agreement is deemed to be unenforceable
the balance of the Agreement shall remain in full force and effect.
16.11 Counterparts and Facsimile Signatures. This Agreement and any Exhibits,
attachments, or documents ancillary hereto, may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument. Execution
and delivery of this Agreement by exchange of facsimile copies bearing the
facsimile signature of a party hereto shall constitute a valid and binding
execution and delivery of this Agreement by such party. Such facsimile copies
shall constitute enforceable original documents.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
INTEGRAL TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxxxx, President
Attest:
/s/ Xxxxxxx X. Xxxx
-----------------------------------
Xxxxxxx X. Xxxx, Secretary
INTEGRAL VISION SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Xxxxx X. Xxxxx, President
Attest:
/s/ Xxxxxx X. Xxxxx
-----------------------------------
Xxxxxx X. Xxxxx, Secretary
STOCKHOLDERS OF ACQUIREE:
1. /s/ Xxxxx X. Xxxxx Shares: 57.14
--------------------------------------
Xxxxx X. Xxxxx
2. /s/ Xxxxxx X. Xxxxxx Shares: 14.29
--------------------------------------
Xxxxxx X. Xxxxxx
3. /s/ Xxxxxxx Xxxxxxxxxx Shares: 28.57
--------------------------------------
Xxxxxxx Xxxxxxxxxx
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