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AGREEMENT AND PLAN OF REORGANIZATION AND MERGER
BY AND AMONG
PKI SOLUTIONS, INC.,
CERTAIN OF ITS SHAREHOLDERS (AS NAMED HEREIN)
AND
XXXX TOURS LIMITED
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TABLE OF CONTENTS
1. Definitions...........................................
2. The Merger............................................
3. Conversion of the PKI Solutions Shares................
4. PKI Solutions Obligations to the
PKI Solutions Shareholders.....................
5. Representations and Warranties
of the PKI Solutions Shareholders..............
6. Representations and Warranties of
PKI Solutions..............................
7. Representations and Warranties of
Xxxx Tours.................................
8. Covenants of the PKI Solutions Shareholders...........
9. Covenants of Xxxx Tours...............................
10. Mutual Covenants......................................
11. Conditions to the Closing.............................
12. The Closing...........................................
13. Indemnification.......................................
14. Survival of Provisions................................
15. Expenses..............................................
16. Miscellaneous.........................................
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SCHEDULES:
Schedule 3(a) Shares of Xxxx Tours to be issued to PKI Solutions Shareholders
Schedule 5(e) PKI Solutions Shareholders
Schedule 6(a) Interests of PKI Solutions in Other Entities
Schedule 6(g) Indebtedness, Liabilities and Other Obligations Not Reserved Against in the PKI
Solutions' March 1, 2001 Balance Sheet
Schedule 6(h)(5) Liability for Borrowed Money and Agreements Relating to Incurring Additional Debt
Schedule 6(h)(9) Contracts Outside of Ordinary Course of
Business
Schedule 6(h)(14) Lease of Real Property and Other Material Leases
Schedule 6(k) PKI Solution Litigation
Schedule 6(m) PKI Solutions' Licenses and Permits
Schedule 6(o) PKI Solutions' Contracts, Excluding
Contracts in the Ordinary Course of Business
Which are Not Material and Which Do Not Have
an Aggregate Future Liability of More than
$10,000.
Schedule 6(q) PKI Solutions Fee Interests in Real Property
Schedule 6(r) PKI Solutions Employee Benefit Plans
Schedule 6(s) PKI Solutions General Liability, Product Liability, Fire and Casualty, Motor Vehicle,
and Other Insurance
Schedule 6(v) PKI Solutions Suppliers and Customers Doing Business in Excess of $10,000
Schedule 6(aa) PKI Solutions Directors, Officers, Safes, etc. and Persons with Authorized Access, and
Bank Accounts and Authorized Signatories
Schedule 6(bb) Intellectual Property
Schedule 7(aa) Xxxx Tours Directors, Officers, Safes, etc. and Persons with Authorized Access, and
Bank Accounts and Authorized Signatories
Schedule 9(d) Xxxx Tours Shareholders with Registration Rights
Schedule 10(g) Xxxx Tours Litigation
Schedule 13(b) Guaranties, Etc.
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EXHIBITS:
Exhibit 6(b) Board of Directors Resolutions of the PKI Solutions
Exhibit 7(b) Board of Directors Resolutions of Xxxx Tours
Exhibit 11(b) Confidentiality Agreement
Exhibit 11(b)(i) Form of Opinion of PKI Solutions' Counsel
EXHIBIT 11(c)(ii) Form of Opinion of Xxxx Tours' Counsel
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AGREEMENT AND PLAN OF REORGANIZATION AND MERGER
This Agreement and Plan of Reorganization and Merger (the "Agreement")
is executed and delivered effective as March 28, 2001 by and between PKI
Solutions, Inc., a Nevada corporation ("PKI Solutions"), the "Principal PKI
Solutions Shareholders" (as such term is defined hereafter), Xxxx Tours Limited,
a Bahamian corporation ("Xxxx Tours," the shareholders of which are the "Xxxx
Tours Shareholders")(each of the foregoing individually a "Party," and
collectively the "Parties").
WHEREAS, the Parties desire to cause the merger of PKI Solutions into
Xxxx Tours (the "Merger"); and
WHEREAS, the Parties desire that the Merger shall constitute a
"reorganization" within the meaning of Section 368(a)(1)(A) of the Code (as the
term "Code" is hereinafter defined);
NOW, THEREFORE, for and in consideration of the premises and the mutual
promises, agreements, representations, warranties, and covenants hereinafter set
forth, the parties hereto hereby agree as follows:
1. DEFINITIONS
Certain of the capitalized terms used in this Agreement shall have the
following meanings unless the context otherwise specifically requires:
"Affiliate" means any of the PKI Solutions Shareholders, and any
parent, grandparent, child, brother or sister, or spouse of any of the
foregoing, and any corporation, partnership, trust, or other entity controlled
by or under common control with any such persons.
"Xxxx Tours Shares" means the fully paid and non-assessable shares of
common stock of Xxxx Tours, par value $.0001 per share, and "Xxxx Tours Share"
means one (1) share of the Xxxx Tours Shares.
"Closing" means the completion of the transactions contemplated in this
Agreement as provided in Section 11 below.
"Code" means the Internal Revenue Code of 1986, as amended.
"PKI Solutions Shares" means all of the issued and outstanding shares
of capital stock of PKI Solutions, the same being twelve million (12,000,000)
shares of $.0001 par value common stock (the "PKI Solutions Shares").
"Effective Date" has the meaning given in Section 2(b) below.
"Principal PKI Solutions Shareholders" means Xxxxxx X. Xxxxxxx; DBA,
Inc; A.I., Inc.; First Sign, Inc.; and The Vine Family, LLC.
"Tax" or "Taxes" means all Federal, State, local, and foreign taxes and
tax assessments of any kind imposed on PKI Solutions for all periods prior to
the Effective Date, including all interest, penalties, and additions imposed
with respect to such amounts.
2. THE MERGER
(a) The Merger. Upon the terms and subject to the conditions set forth
herein, at the Effective Date, PKI Solutions shall be merged with and into Xxxx
Tours, the separate existence and corporate organization of PKI Solutions shall
cease, and thereupon PKI Solutions and Xxxx Tours shall be a single
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corporation. The Merger shall have the effects set forth in Section 92A.055 et
seq. of the General Corporation Law of the State of Nevada.
(b) Effective Date of the Merger. The Merger shall become effective on
the date of the Closing; provided, however, that a properly executed Certificate
of Merger is duly filed in a timely manner with the Secretary of State of the
State of Nevada.
(c) Certificate of Incorporation and By-Laws. The Certificate of
Incorporation of Xxxx Tours in effect immediately prior to the Effective Date
shall be the Certificate of Incorporation of Xxxx Tours, and the By-Laws of Xxxx
Tours in effect immediately prior to the Effective Date shall be the By-Laws of
Xxxx Tours.
(d) Directors and Officers of the Surviving Corporation. At the Closing
Date, the board of directors of Xxxx Tours shall consist of five (5) persons,
three (3) of whom shall be Xxxxxxx X. Xxxxxxxx, Xxxxxx X. Xxxxxxx, and Xxxxxxx
X. Xxxxxxx as inside directors who are also officers and two (2) of whom shall
be P.W.F. Toothe and Xxxxx Xxxxxxxx and such five (5) persons shall hold office
from the Effective Date until their respective successors are duly elected or
appointed, and qualify, in the manner provided in the Certificate of
Incorporation and the By-Laws of Xxxx Tours, or as otherwise provided by Nevada
law. The officers of PKI Solutions immediately prior to the Effective Date shall
be the initial officers of Xxxx Tours, and shall hold office from the Effective
Date until their respective successors are duly elected or appointed, and
qualify, in the manner provided in the Certificate of Incorporation and the
By-Laws of Xxxx Tours, or as otherwise provided by Nevada law.
3. CONVERSION OF THE PKI SOLUTIONS SHARES
(a) The PKI Solutions Shares. At the Closing, PKI Solutions
Shareholders shall receive under this Agreement twelve million (12,000,000) Xxxx
Tours Shares as set forth on Schedule 5(e).
(b) No Fractional Securities. No certificates or scrip representing
fractional Xxxx Tours Shares shall be issued pursuant to this Section 3, and no
capital charge shall relate to any fractional security, and such fractional
interests shall not entitle the owner thereof to vote or to any rights of a
security holder. In lieu of any such fractional securities, each PKI Solutions
Shareholder who would otherwise have been entitled to a fraction of a Xxxx Tours
Share will be paid cash at the time that the Xxxx Tours Shares due are delivered
to him, in an amount equal to the fair market value of such fraction.
4. PKI SOLUTIONS OBLIGATIONS TO THE PKI SOLUTIONS SHAREHOLDERS
Except as set forth on Schedule 4, Xxxx Tours shall not assume (or be
obligated to pay, perform, discharge, or guarantee) any liabilities or
obligations (whether absolute or contingent, disclosed or undisclosed) of PKI
Solutions to any PKI Solutions Shareholder or Affiliate.
5. REPRESENTATIONS AND WARRANTIES
OF THE PRINCIPAL PKI SOLUTIONS SHAREHOLDERS
Each Principal PKI Solutions Shareholder hereby separately represents
and warrants to Xxxx Tours as follows:
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(a) Authorization. The execution, delivery, and performance of this
Agreement have been duly authorized by all necessary action on the part of such
PKI Solutions Shareholder.
(b) No Conflicts. Neither the execution and delivery of this Agreement
by such PKI Solutions Shareholder or any other document or instrument to be
executed by the PKI Solutions Shareholders pursuant to this Agreement or
otherwise in connection herewith (collectively the "PKI Solutions Shareholder
Documents"), nor the consummation by such PKI Solutions Shareholder of the
transactions contemplated hereby or thereby, will result in any breach of or
constitute a default (or with notice or lapse of time or both would become a
default), or give to others any rights of termination, acceleration, or
cancellation, or result in the creation of any lien, charge, or encumbrance upon
any of the assets or properties of such PKI Solutions Shareholder, under the
Articles of Incorporation or the By-Laws of PKI Solutions, or the terms of any
contract, instrument, or other agreement to which such PKI Solutions Shareholder
is a party or is otherwise bound, or any judgment, decree, order, statute, law,
ordinance, rule, or regulation applicable to such PKI Solutions Shareholder.
(c) Binding Effect. Such PKI Solutions Shareholder has the right,
power, capacity, and authority to execute, deliver, and perform this Agreement
and to consummate the transactions contemplated hereby. This Agreement has been
duly executed and delivered by such PKI Solutions Shareholder, and constitutes,
and upon execution and delivery of each PKI Solutions Shareholder Document, will
constitute, the legal, valid, and binding obligation of such PKI Solutions
Shareholder, enforceable against such PKI Solutions Shareholder in accordance
with its respective terms, subject to applicable bankruptcy, insolvency, and
other similar laws affecting the enforceability of creditors' rights generally
and the discretion of the courts with respect to equitable remedies.
(d) No Consents. No consent, approval, license, permit, order, or
authorization of, or registration, declaration, or filing with, any court,
administrative agency, commission, or other governmental authority or
instrumentality, or any other third party, is necessary or otherwise required to
be obtained or made in connection with the execution, delivery, or performance
of this Agreement by such PKI Solutions Shareholder or with respect to the
consummation by such PKI Solutions Shareholder of the transactions contemplated
hereby.
(e) Ownership of Stock. The PKI Solutions Shareholders collectively own
all of PKI Solutions Shares. Such PKI Solutions Shareholders are the owners of
the number of PKI Solutions Shares reflected on the attached SCHEDULE 5(e), free
and clear of all liens, claims, pledges, encumbrances, options, charges,
restrictions, and adverse rights or interests whatsoever. No PKI Solutions
Shareholder is a party to or bound by any option, contract, or other commitment
relating to any issued or unissued stock or any other security issued or to be
issued by PKI Solutions. By virtue of such PKI Solutions Shareholder's ownership
of PKI Solutions Shares reflected on the attached Schedule 3(a), such PKI
Solutions Shareholder owns the percentage of the total issued and outstanding
capital stock of PKI Solutions set forth beside such PKI Solutions Shareholder's
name on SCHEDULE 5(e). Other than as set forth on SCHEDULE 5(e), such PKI
Solutions Shareholder owns no capital stock or other securities of PKI Solutions
or any right of any kind to have any such capital stock or other security
issued. No former or present holder of PKI Solutions Shares has any legally
cognizable claim against PKI Solutions based on any transfer of PKI Solutions
Shares owned by any PKI Solutions Shareholder as listed on SCHEDULE 5(e). No
action or failure to act of such PKI Solutions Shareholder (or of his
predecessor in interest) of any nature or kind with respect to any capital stock
or other securities (including offers,
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options, warrants, or convertible debt or other securities with respect thereto)
of PKI Solutions, or any corporation which has been merged into PKI Solutions,
has given or may give rise to any claim or action by any person involving such a
matter which is enforceable against the PKI Solutions Shares of such PKI
Solutions Shareholder, PKI Solutions or Xxxx Tours, and, to the best of the
knowledge of such PKI Solutions Shareholder, no fact or circumstance exists
which could give rise to any such right, claim, or action on behalf of any
person. At the Closing, all PKI Solutions Shares will be converted into Xxxx
Tours Shares. Each such PKI Solutions Shareholder has the sole and exclusive
right to vote the PKI Solutions Shares set forth opposite such PKI Solutions
Shareholder's name on the attached SCHEDULE 5(e).
(f) Brokers and Advisors. No PKI Solutions Shareholder has engaged the
services of any broker, finder, or advisor, nor has he taken any action which
would give rise to a valid claim against any party hereto for a brokerage
commission, finder's fee, or like payment.
(g) Investment Intent. Each Principal PKI Solutions Shareholder is
acquiring Xxxx Tours Shares hereunder for his own account, for investment
purposes only, and not with the intent or view to resell, fractionalize, or
further distribute such shares.
(h) The Xxxx Tours Shares Not Registered. Each PKI Solutions
Shareholder acknowledges and understands: that (1) the offer and the issuance of
Xxxx Tours Shares hereunder has not been registered with the Securities and
Exchange Commission or any other State securities agency, and is being made
pursuant to exemptions from the registration provisions of the Securities Act of
1933, as amended, and any applicable State securities laws; (2) Xxxx Tours
Shares are restricted under applicable securities laws and must be held
indefinitely unless the offer and sale thereof is subsequently registered under
the Securities Act of 1933, as amended, and any applicable State securities
laws, or unless an exemption from registration is available; and (3) that
certificates representing Xxxx Tours Shares shall bear an appropriate
restrictive legend to this effect.
(i) Approval of Merger. The PKI Solutions Shareholders will vote their
shares of PKI Solutions in favor of the Merger.
(j) Accredited Investor. Except as set forth on Schedule 5 (J), each
PKI Solutions Shareholder is an Accredited Investor (as the term "Accredited
Investor" is defined in Section 2(15) of the Securities Act of 1933, as amended,
and Rule 501 of Regulation D promulgated thereunder).
(k) Disclosure. No representation or warranty made by PKI Solutions in
this Agreement or in any statement, certificate, or other document delivered to
Xxxx Tours by PKI Solutions in connection herewith contains or will contain any
untrue statement of a material fact, or omits to state any material fact
necessary to make the statements contained herein or therein not misleading.
6. REPRESENTATIONS AND WARRANTIES OF PKI SOLUTIONS
PKI Solutions warrants to Xxxx Tours and the Xxxx Tours Shareholders as
follows:
(a) Organization and Standing. PKI Solutions is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Nevada and any other State in which the failure to be qualified or registered as
a foreign corporation would have a material adverse impact on its business, and
has all requisite power and authority to own its assets and carry on its
business as presently conducted, and to enter into and perform
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this Agreement. Except as set forth on SCHEDULE 6(a), PKI Solutions does not own
any controlling interest in any corporation, partnership, joint venture, or
other business entity. Copies of the Articles of Incorporation and the By-Laws
of PKI Solutions have been delivered to Xxxx Tours, and such copies are true,
complete, and correct, and in full force and effect.
(b) Authorization; Binding Effect. The execution, delivery, and
performance of this Agreement have been duly authorized by all necessary action
on the part of PKI Solutions. A certified copy of the resolutions adopted by the
board of directors of PKI Solutions in this regard is attached as EXHIBIT 6(B).
This Agreement has been duly executed and delivered by PKI Solutions and
constitutes, and upon execution and delivery will constitute, the legal, valid,
and binding obligation of PKI Solutions, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency, and other similar
laws affecting the enforceability of creditors' rights generally and the
discretion of the courts with respect to equitable remedies.
(c) No Conflicts. Neither the execution and delivery of this Agreement
by PKI Solutions or any other document or instrument to be executed by PKI
Solutions pursuant to this Agreement or otherwise in connection herewith
(collectively, the "PKI Solutions Documents"), nor the consummation by PKI
Solutions and the PKI Solutions Shareholders of the transactions contemplated
hereby or thereby, will result in any breach of or constitute a default (or,
with notice or lapse of time or both, would become a default), or give to others
any rights of termination, acceleration, or cancellation, or result in the
creation of any lien, charge, or encumbrance upon any of the assets or
properties of PKI Solutions, under the Articles of Incorporation or the By-Laws
of PKI Solutions, or the terms of any contract, instrument, or other agreement
to which PKI Solutions is a party or is otherwise bound, or any judgment,
decree, order, statute, law, ordinance, rule, or regulation applicable to PKI
Solutions.
(d) Capitalization of PKI Solutions. PKI Solutions' authorized capital
stock consists of fifty million (50,000,000) shares of common stock, $.0001 par
value each, of which twelve million (12,000,000) shares are issued and
outstanding, and owned by the PKI Solutions Shareholders. All issued and
outstanding shares of capital stock of PKI Solutions have been duly authorized,
are validly issued and outstanding, are fully paid and non-assessable, and have
not been issued in violation of any preemptive rights. PKI Solutions has no
other shares of capital stock or other securities authorized, issued, or
outstanding. PKI Solutions is not a party to or bound by any option, warrant,
contract, convertible or exchangeable securities, or other commitment of any
character relating to any capital stock or other security issued or to be issued
by PKI Solutions.
(e) Ownership of Common Stock. The PKI Solutions Shares constitute all
of the issued and outstanding shares of capital stock of PKI Solutions. No
present or past holder of shares of capital stock of PKI Solutions, or their
predecessors, or any other person, has any right to receive or to otherwise have
issued to them any shares of capital stock or other securities of PKI Solutions.
PKI Solutions is not obligated by contract, operation of law, or otherwise to
issue any additional shares of capital stock or other security, and no third
party has any right to receive from PKI Solutions, or its predecessors in
interest, any capital stock or other securities of PKI Solutions.
(f) Financial Statements. PKI Solutions has delivered to Xxxx Tours
true and correct copies of PKI Solutions' balance sheet dated March 2001 and the
related statement of income and retained earnings for the period then ended
(collectively, the "Financial Statements"). The Financial Statements have been
prepared from the books and records of PKI Solutions in accordance
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with generally accepted accounting principles consistently applied, and present
fairly in all material respects the financial position and results of operations
of PKI Solutions as of the dates thereof and for the periods covered thereby.
(g) No Undisclosed Liabilities. Except as otherwise expressly reflected
or reserved against in PKI Solutions' March 1, 2001 balance sheet or as
expressly set forth in the attached SCHEDULE 6(g), PKI Solutions has no
indebtedness or liabilities or other obligations of any nature whatsoever
(whether direct or indirect, asserted or unasserted, known or unknown, accrued,
absolute, contingent, or otherwise), except accounts payable and other
liabilities incurred in the ordinary and customary course of business since
March 1, 2001.
(h) Absence of Adverse Changes or Events. Since March 1, 2001, PKI
Solutions has conducted its business only in the ordinary course, consistent in
all material respects with past practice, and there has not occurred any
material adverse change in the business, assets, liabilities, financial
condition, or results of operations of PKI Solutions, and since March 1, 2001,
PKI Solutions has not:
(1) Amended its Certificate of Incorporation or its By-Laws;
(2) declared or paid any dividend or made any distribution or
payment of any kind in respect of its capital stock;
(3) amended or modified any collective bargaining agreement
(except as required by law);
(4) entered into, or adopted any employee benefit plan or any
employment contract, or increased the salaries or compensation of its officers
or other employees, or paid any bonuses to any of such officers or other
employees (other than bonuses in the ordinary course of PKI Solutions' business
consistent with PKI Solutions' past practice);
(5) except to the extent reflected on the attached SCHEDULE
6(h)(5), incurred any liability for borrowed money, encumbered any of its
assets, or entered into any agreements relating to incurring additional debt,
other than incurring accounts payable in the ordinary course of business
consistent in all material respects with past practice;(6) acquired or agreed to
acquire by merging or consolidating with, purchasing substantially all of the
assets of, or otherwise, any business corporation, partnership, association, or
other entity or individual;
(7) sold or otherwise disposed of any real property or other
tangible assets, including capital or fixed assets, in excess of Five Thousand
Dollars ($5,000) per item or Twenty Thousand Dollars ($20,000) in the aggregate,
other than the sale of inventory in the ordinary course of business;
(8) hired any new management employees;
(9) except to the extent reflected on the attached SCHEDULE 6
(h) (9), made commitments or entered into any agreement or contract outside the
ordinary course of business which involves payments from PKI Solutions in excess
of Ten Thousand Dollars ($10,000) individually or Twenty Thousand Dollars
($20,000) in the aggregate;
(10) permitted or allowed any assets or properties to become
subject to any mortgage, pledge, lien, encumbrance, restriction or charge of any
kind except: (A) such as existed on Xxxxx 0, 0000, (X) liens imposed by
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law, and (C) those incurred in the ordinary course of business for obligations
not yet due and payable to landlords, carriers, warehouses, laborers,
materialmen, and the like;
(11) canceled any material indebtedness or waived any claims
or rights of substantial value;
(12) entered into any contract, lease, commitment,
arrangement, or understanding with any Affiliate;
(13) made any change in any method of accounting or accounting
practice or policy other than as required by generally accepted accounting
principles;
(14) except as reflected on the attached SCHEDULE 6(h)(14),
entered into any lease of real property or any other material lease involving
any other property, or amended, modified, terminated, or permitted to lapse any
lease of real property or any other material lease of personal property;
(15) entered into any agreement the terms of which would be
violated by the consummation of the transactions contemplated hereby;
(16) changed its credit collection or billing procedures or
policies;
(17) effectuated a "plant closing" or "mass layoff" as those
terms are defined in the Worker Adjustment and Retraining Notification Act of
1988, affecting in whole or in part any employment facility, operating unit,
department, or employees of PKI Solutions;
(18) made any change or revoked any tax election or entered
into or amended any agreement or settlement with any taxing authority;
(19) dealt with any other party concerning the sale of any PKI
Solutions Shares, any merger, consolidation, or sale of all or a substantial
portion of the assets of PKI Solutions, or any other similar transaction
involving PKI Solutions;
(20) taken any action, which would cause any representation or
warranty of the PKI Solutions Shareholders contained herein to become false or
incorrect;
(21) failed to use its reasonable efforts consistent in all
material respects with past practice to preserve its business organization
intact, keep available the service of its officers and employees, and preserve
the goodwill of its suppliers, customers, dealers, distributors, contractors,
and others doing business with it;
(22) failed to pay all trade payables and other amounts
payable to creditors as they became due in accordance, and in all material
respects, with past practices (except to the extent any such amounts were
reasonably and in good faith disputed by PKI Solutions);
(23) failed to maintain all buildings, equipment, and other
tangible assets owned or used by PKI Solutions in substantially the same
condition and repair as existed as of March 1, 2001, ordinary wear and tear
excepted; or
(24) agreed, whether in writing or otherwise, to do any of the
foregoing.
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(i) Accounts Receivable. All accounts receivable of PKI Solutions have
arisen from bona fide transactions in the ordinary course of business and
reflect in all material respects amounts properly due and owed to PKI Solutions.
None of the accounts receivable of PKI Solutions are subject to any material
counterclaim, right of offset, defense, or other material adverse interest
whatsoever.
(j) Inventories. The inventories of PKI Solutions consist in all
material respects of items of a quality and quantity usable and salable in the
normal course of business, the recorded value of all items of inventory which
were obsolete, damaged, or unsalable have been properly written off or down to
realizable market value, or adequate reserves provided therefor, and the values
at which such inventories are and will be carried on the books of PKI Solutions
reflect PKI Solutions' normal inventory valuation policy of stating inventories
at the lower of cost or market.
(k) Litigation. Except as shown in the attached SCHEDULE 6(k), there is
no claim, action, suit, litigation, audit, investigation, or other proceeding
pending, or, to the knowledge of PKI Solutions, threatened against PKI Solutions
or its assets, properties, or business, or the transactions contemplated by this
Agreement, and neither PKI Solutions nor its assets or properties are subject to
or bound by any order, writ, injunction, judgment, or decree of any court or
governmental regulatory agency, commission, board, or administrative body.
(l) Compliance With Laws. PKI Solutions, the use and occupancy of its
assets and properties, and the conduct of its business are, and at all times on
or prior to the date hereof have been, in compliance with, and not in violation
of, all Federal, State and local laws, ordinances, rules, regulations, orders,
judgments, and decrees applicable to PKI Solutions and its assets, properties,
and business, including, without limitation, all Environmental Laws (as the term
"Environmental Laws" is hereinafter defined), and all laws, rules, and
regulations dealing with antitrust matters, fair trade and competition, and
government corrupt practices.
(m) Governmental Licenses and Permits. The attached SCHEDULE 6(m) sets
forth a true, correct and complete list of all material governmental licenses,
permits, franchises, and other authorizations held or otherwise maintained by
PKI Solutions in connection with the conduct of its business or the ownership or
possession of its assets and properties (the "Licenses and Permits"), other than
nonmaterial local licenses required of businesses generally. All such Licenses
and Permits are in full force and effect, there are no existing violations in
connection therewith, and no proceeding is pending or, to the knowledge of PKI
Solutions, threatened with respect to the revocation or limitation of the same.
(n) Labor Matters. None of PKI Solutions' employees are covered by a
collective bargaining agreement, and no organizational efforts with respect to
any employees of PKI Solutions are pending or, to the knowledge of PKI
Solutions, threatened. No formal or otherwise labor dispute, strike, or work
stoppage with respect to any employees of PKI Solutions is pending or, to the
knowledge of PKI Solutions, is threatened. There are no existing employee claims
(other than nonmaterial health insurance, disability insurance, and workers'
compensation claims in the ordinary and customary course of business, which are
fully covered by insurance), grievances, or unfair labor practice complaints
pending or outstanding against PKI Solutions. PKI Solutions is, and at all times
on or prior to the date hereof has been, in compliance with, and not in
violation of, the Fair Labor Standards Act, as amended, the Age Discrimination
in Employment Act, as amended, the National Labor Relations Act, as amended, the
Occupational Safety and Health Act, as amended, the
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Vocational Rehabilitation Act of 1973, as amended, and all applicable Federal
and State civil rights laws.
(o) Contracts. Set forth on the attached SCHEDULE 6(o) is a true,
correct, and complete list of: (1) each contract, lease, agreement, or other
commitment, understanding, or arrangement (oral or written) to which PKI
Solutions is a party or by which it or any of its assets or properties is
otherwise bound or subject (collectively, the "Contracts"); (2) any employment
contract not terminable at will by PKI Solutions without liability or penalty;
(3) any lease of real property; (4) any material lease of personal property; (5)
any agreement for the purchase, sale, or other disposition of any materials,
equipment, supplies, or inventory, or the provision of any services, outside the
ordinary course of business; (6) any covenant not to compete or other contract
containing any restrictions on the operations of PKI Solutions; (7) any
extraordinary purchase or sales orders; (8) any employee collective bargaining
agreement or other contract with any labor union; (9) any contract with any
Affiliate; (10) any material license or other agreement relating to any PKI
Solutions intellectual property; and (11) any note, bond, mortgage, indenture,
loan agreement, security agreement, or deed of trust; but in each case excluding
from such Schedule any Contract in the ordinary course of business which is not
material to PKI Solutions and which does not have an aggregate future liability
to PKI Solutions of more than Ten Thousand Dollars ($10,000). Each of the
Contracts is valid, binding, and in full force and effect, and is enforceable by
PKI Solutions in accordance with its terms in a manner that obtains for, or
imposes upon, the parties the primary benefits and obligations of such
agreements, and PKI Solutions has not received any notice terminating, revoking,
or rescinding any of the Contracts, or expressing any interest to do the same
and, to the knowledge of PKI Solutions, no other party to any of the Contracts
has any intent to take any action to terminate, rescind, or revoke any of such
Contracts. PKI Solutions has performed in all material respects all obligations,
and complied in all material respects with all covenants, required to be
performed and complied with by it to date under the Contracts, and it is not
(with or without lapse of time, the giving of notice, or both) in breach of or
default under any material provision of the Contracts and, to the knowledge of
PKI Solutions, no other party to any of the Contracts is (with or without the
lapse of time, the giving of notice, or both) in breach of or default
thereunder. True, correct, and complete copies of the Contracts have been
supplied by PKI Solutions to Xxxx Tours.
(p) Tax Matters. PKI Solutions, and any affiliated group (within the
meaning of Section 1504 of the Code) of which PKI Solutions is or has been a
member, has timely filed all Tax returns, reports, and forms which it was
obligated to file under applicable law, rule, or regulation with the appropriate
governmental authorities. All such Tax returns, reports, and forms were properly
prepared in accordance with all applicable laws, rules, and regulations, and
truly and accurately reflect the Tax liabilities of PKI Solutions for the
periods covered thereby. All Taxes shown to be due on such returns, reports, and
forms, as well as any and all other Taxes required by applicable law, rule, or
regulation to be paid by PKI Solutions, have been timely paid in full to the
appropriate taxing authority. No Tax liens have been filed against PKI Solutions
or any of its assets or properties, and no claims, audits, investigations, or
proceedings are pending, or to the knowledge of PKI Solutions, are threatened
with respect to any Taxes. PKI Solutions is not presently bound by any
agreements extending the statute of limitations with respect to any Taxes, and
PKI Solutions has not made any election under Section 341(f) of the Code nor has
it agreed, or is it required, to make any adjustment under Section 481 of the
Code. PKI Solutions has properly withheld or otherwise collected all Taxes and
other amounts which it was required to withhold or collect under any applicable
law, including, without limitation, any amounts required to be withheld or
collected with respect to employee income tax withholding, social security,
unemployment
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compensation, sales or use taxes, and all such amounts have been timely remitted
to the proper authorities.
(q) Title to Assets and Properties. PKI Solutions has good, valid,
and marketable title (or in the case of licenses, leases, or other rights in any
agreements, the right to exercise its rights under such agreements) to all the
assets and properties reflected on PKI Solutions' Xxxxx 0, 0000,xxxxxxx sheet or
thereafter acquired or otherwise used by PKI Solutions in the conduct of its
business, except inventories and other nonmaterial assets sold since such date
in the ordinary course of business, in each case free and clear of all liens,
claims, encumbrances, security interests, restrictions, or adverse rights or
interests whatsoever, except: (1) liens and encumbrances with respect to
liabilities reflected on PKI Solutions' March 1, 2001 balance sheet or otherwise
expressly disclosed in this Agreement; (2) property taxes for the current year
which are not yet delinquent; (3) with respect to any real property, liens
imposed by law and incurred in the ordinary course of business for obligations
not yet due and payable to landlords, warehousemen, laborers, materialmen, and
the like; and (4) such utility easements and minor imperfections of title as do
not individually or in the aggregate materially impair the continued use and
operation of such property in the business of the Company. The attached SCHEDULE
6(q) sets forth a complete list of all real property and interests in real
property owned in fee or leased by PKI Solutions. None of the real property
owned or leased by PKI Solutions is subject to any pending or (to the knowledge
of PKI Solutions) threatened condemnation proceeding or proceedings to take all
or any part thereof by eminent domain, and no part of any real property owned or
leased by PKI Solutions is located within any area designated as a flood plain
by any governmental agency. To the knowledge of PKI Solutions, no material part
of any of the real property owned or leased by PKI Solutions requires any
material structural repair necessary for the continued use of such property in
the manner in which such property has been historically used in the business of
PKI Solutions.
(r) Employee Benefit Plans.
(1) The attached SCHEDULE 6(r) sets forth a true, correct, and
complete list of each employee pension, profit-sharing, deferred compensation,
severance pay, stock bonus, stock option, stock purchase, bonus, incentive, or
any other form of retirement or compensation plan, and each hospitalization,
dental, vision, or other health plan, vacation, disability, sick pay, accident
insurance, or other welfare plan, fund, program, policy, contract, or
arrangement providing employee benefits, maintained or contributed to by PKI
Solutions in which any employees or former employees of PKI Solutions have
participated or under which any such person has accrued and remains entitled to
benefits (collectively, the "Plans"). PKI Solutions has delivered to Xxxx Tours
true and complete copies of (or, where copies do not exist, summaries of) each
of the Plans, and all amendments thereto, all trust agreements, insurance
contracts, and other documents, including, but not limited to, summary plan
descriptions, if any, currently in effect with respect to the Plans.
(2) Each of the Plans has been operated in accordance with its
terms and in accordance with all applicable laws, rules, and regulations
relating thereto, including, but not limited to, the Employee Retirement Income
Security Act of 1974 ("ERISA"), the Code, and the Consolidated Omnibus Budget
Reconciliation Act of 1986 ("COBRA"). All required governmental filings have
been made with respect to the Plans.
(3) PKI Solutions has not contributed, nor been obligated to
contribute to, and no employees, former employees, or retired employees of PKI
Solutions are as a result of their employment with PKI Solutions participants
in, any "multi-employer plan" which is a "pension plan," as such terms are
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defined in Sections 3(2) and 3(37) of ERISA, and PKI Solutions has no current,
contingent, or potential liability with respect to any such plan.
(4) Neither PKI Solutions nor any corporation, trade, or
business (whether or not incorporated) which would be treated as a member of the
controlled group (the "Controlled Group") of PKI Solutions under Section
4001(a)(14) of ERISA would be liable for any amount pursuant to Sections 4062,
4063, or 4064 of ERISA, if any Plan which is the subject to Title IV of ERISA (a
"Title IV Plan") were to terminate.
(5) Neither PKI Solutions nor any member of the Controlled
Group has been involved in any transactions that would cause PKI Solutions to be
subject to liability with respect to a Title IV Plan or any other plan subject
to Title IV of ERISA to which PKI Solutions or any member of the Controlled
Group contributed or was obligated to contribute during the six (6) year period
ending on the Closing Date under Sections 4062, 4069, or 4212(c) of ERISA.
Neither PKI Solutions nor any member of the Controlled Group has incurred any
liability under Title IV of ERISA, which could become or remain a liability of
Xxxx Tours after the Closing Date.
(6) Neither PKI Solutions nor any of the Plans or any trusts
created thereunder, nor any trustee or administrator thereof, has engaged in a
transaction as a result of which PKI Solutions, the trustee, or the
administrator of the Plans or any such trust could become subject to a liability
or civil penalty assessed pursuant to Sections 409, 502(i), or 502(l) of ERISA
or a tax imposed pursuant to Sections 4975 or 4976 of the Code.
(7) There are no pending or (to the knowledge of PKI
Solutions) threatened claims by or on behalf of any of the Plans, by any
employee or beneficiary covered under any such Plan, or otherwise involving any
such Plan (other than routine claims for benefits pursuant to the terms
thereof). All notices required to be given under COBRA have been timely and
properly made in accordance with COBRA and the rules and regulations thereunder,
and no employee, former employee, or "qualified beneficiary," as defined in
COBRA, has any claim or contingent claim against PKI Solutions for failure to
comply with COBRA and the rules and regulations thereunder.
(8) No condition exists and no event has occurred with respect
to any Plan that is a multi-employer plan (as defined in Section 4001(a)(3) of
ERISA) which presents a risk of complete or partial withdrawal under Subtitle E
of Title IV of ERISA, nor has PKI Solutions or any member of the Controlled
Group been notified that any such Plan is insolvent or in reorganization within
the meaning of Section 4241 of ERISA.
(9) None of the Plans or any trusts established thereunder has
incurred any "accumulated funding deficiency" (as defined in Section 302 of
ERISA and in Section 412 of the Code), whether or not waived, as of the last day
of the most recent fiscal year of each of the Plans. No contribution failure has
occurred with respect to any Plans sufficient to give rise to a lien under
Section 302(f) of ERISA.
(10) No policy, plan, practice, program, arrangement,
understanding, or agreement exists which could result in the payment by PKI
Solutions of money or any other property or rights, or accelerate or provide any
other rights or benefits, to any employee of PKI Solutions as a result of the
transactions contemplated herein, whether or not such payment would constitute a
parachute payment within the meaning of Section 280G of the Code.
(s) Insurance. The attached SCHEDULE 6(s) contains a true, correct, and
complete list of all general liability, product liability, fire and
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casualty, motor vehicle, and other insurance maintained by PKI Solutions.
Regarding such insurance: (1) all such insurance is in full force and effect,
all premiums due thereunder have been timely and properly paid and PKI Solutions
is in compliance in all material respects with all requirements, terms, and
provisions thereof; (2) true and correct copies of all insurance policies
relating to such coverage have been provided by PKI Solutions to Xxxx Tours; (3)
none of the insurance policies maintained by PKI Solutions is subject to any
retroactive rate adjustment; (4) PKI Solutions has not received any notice of
cancellation or nonrenewal (or which expresses an intent to cancel or not renew)
of any insurance coverage maintained by the Company; and (5) PKI Solutions has
no knowledge of an intention on the part of any insurance carrier providing
insurance to PKI Solutions to cancel or otherwise not renew any such insurance.
(t) Environmental Matters. Regarding the assets or properties owned,
leased, or otherwise used by PKI Solutions: (1) neither PKI Solutions nor the
assets or properties owned, leased, or otherwise used by PKI Solutions, nor any
operations of PKI Solutions, are presently, or have been in the past, in
violation of any applicable Federal, State or local law, rule, regulation,
order, decree, or ordinance relating to environmental protection or pollution,
including, without limitation, any laws, rules, regulations, orders, decrees, or
ordinances relating to emissions, discharges, releases, or threatened releases
of pollutants, contaminants, or hazardous or toxic materials, or wastes into
ambient air, surface water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transportation, or handling of pollutants, contaminants or hazardous or toxic or
highly toxic materials or wastes, including, without limitation, the Resource
Conservation and Recovery Act, as amended by the Hazardous and Solid Waste
Amendments of 1984, the Comprehensive Environmental Response, Compensation and
Liability Act, the Hazardous Materials Transportation Act, the Toxic Substances
Control Act, the Federal Insecticide and Rodenticide Act, the Clean Air Act, the
Clean Water Act, and all regulations, rules, and ordinances adopted and
promulgated thereunder, all as may be amended from time to time (collectively
"Environmental Laws"); (2) no notice of, charge, or investigation is pending or,
to the knowledge of PKI Solutions, is threatened with respect to the violation
of any Environmental Law; (3) PKI Solutions has obtained, and is in compliance
with, all licenses, permits and other authorizations which are required by
applicable Environmental Laws and all such licenses, permits, and other
authorizations are in full force and effect; (4) PKI Solutions is in compliance
with all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules, and timetables contained in any
Environmental Laws or in any code, plan, judgment, order, notice, or demand
letter issued, entered, promulgated, or approved thereunder; and (5) there is no
fact, event, circumstance, activity, incident, plan, or condition presently
existing, or having occurred in the past, which (A) may give rise to any claim,
charge, or assertion that PKI Solutions or any of its respective assets or
properties owned, leased, or otherwise used by PKI Solutions, or the operations
of PKI Solutions is or has been in violation of any Environmental Law, or (B)
could otherwise form the basis for any liability, claim, action, suit,
proceeding, investigation, assessment for response costs, or remediation or
hearing based upon or related to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation, handling, emission, discharge,
release, or threatened release into the environment of any pollutant,
contaminant, or hazardous or toxic or highly toxic material, substance, or
waste.
(u) No Pending Transactions. Except for the transactions contemplated
by this Agreement, PKI Solutions is not a party to, bound by, or the subject of
any agreement, undertaking, or commitment to: (1) merge or consolidate with, or
acquire all or substantially all of the property and assets of, any
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other corporation or person; or (2) sell, lease, or exchange all or
substantially all of its property and assets to any other corporation or person.
(v) Major Customers and Suppliers. The attached SCHEDULE 6(v) sets
forth a true, correct, and complete list of each of PKI Solutions' suppliers and
customers doing business with the Company in an amount exceeding Ten Thousand
Dollars ($10,000) per year, each as measured in terms of dollar volume paid or
received during the year ended March 1, 2001, PKI Solutions has no knowledge of
any intention by any of PKI Solutions' material customers or suppliers to
terminate or materially reduce their relationship with PKI Solutions, whether by
reason of the transactions contemplated hereby or otherwise.
(w) Transactions with Affiliates. PKI Solutions is not a party to or
bound by any contract, commitment, loan, lease, or other arrangement or
understanding with any Affiliate, and none of such persons owns any interest in
any corporation, partnership, or other business or entity that is a party to any
business arrangements or relationships of any kind with PKI Solutions.
(x) Books and Records. The books and records of PKI Solutions provided
to Xxxx Tours are true, correct, and complete in all material respects, and have
not been altered in anticipation of the contemplated transactions, and to the
knowledge of PKI Solutions no corporate minutes, written consents of the
respective PKI Solutions Shareholders or board of directors of PKI Solutions or
other corporate records or instruments have been removed from the corporate
records of PKI Solutions.
(y) Powers of Attorney. PKI Solutions does not presently have
outstanding any powers of attorney authorizing any third party to act by or on
behalf of PKI Solutions.
(z) Guaranties. PKI Solutions has not guaranteed, co-signed, or
otherwise become obligated (contingently or otherwise) with respect to the
indebtedness or obligations of any other person.
(aa) Officers and Directors. The attached SCHEDULE 6(aa) sets forth a
complete and accurate list of: (1) the names of all directors of PKI Solutions;
(2) the names of the president, executive vice president, secretary, and
treasurer of PKI Solutions; (3) all safes, vaults and safety deposit boxes
maintained by or on behalf of PKI Solutions or in which assets or properties of
PKI Solutions are held, and the names of all persons authorized to have access
thereto; and (4) all bank accounts of PKI Solutions and the names of all
authorized signatories with respect to such accounts.
(bb) Intellectual Property. The attached SCHEDULE 6(bb) sets forth a
true, correct, and complete list of all United States and foreign patents,
patent applications, licenses, trademarks, trademark applications, copyrights,
trade names, service marks, service names and other proprietary rights owned or
otherwise used by PKI Solutions. To the knowledge of PKI Solutions: (1) PKI
Solutions possesses all necessary rights to utilize such property in the course
of its business; (2) PKI Solutions has not used any intellectual property of PKI
Solutions in violation of the rights or interests of any third party or any
contractual agreement with respect thereto; (3) none of the intellectual
property of PKI Solutions has been declared invalid, been limited in any respect
by any court or by agreement or otherwise, and no such property is subject to
any infringement, interference, or other similar proceeding or challenge; and
(4) PKI Solutions is not infringing, or otherwise acting adversely to, the right
of any person or entity under or in respect to any patent, license, trademark,
trade name, service xxxx, copyright, or similar intangible right.
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(cc) Brokers and Advisors. PKI Solutions has not engaged the services
of any broker, finder, or advisor, and has not taken any action, which would
give rise to a valid claim against any party hereto for a brokerage commission,
finder's fee, or like payment.
(dd) Disclosure. No representation or warranty made by the PKI
Solutions Shareholders in this Agreement or in any statement, certificate, or
other document delivered to Xxxx Tours by the PKI Solutions Shareholders or PKI
Solutions in connection herewith contains or will contain any untrue statement
of a material fact or omits to state any material fact necessary to make the
statements contained herein or therein not misleading.
7. REPRESENTATIONS AND WARRANTIES OF XXXX TOURS
Xxxx Tours hereby represents and warrants to PKI Solutions and the PKI
Solutions Shareholders as follows:
(a) Organization and Standing. Xxxx Tours is a corporation duly
organized, validly existing, and in good standing under the laws of the
Commonwealth of the Bahamas and any other State in which the failure to be
qualified or registered as a foreign corporation would have a material adverse
impact on its business, and has all requisite corporate power and authority to
own its assets and carry on its business as it is now being conducted, and the
business it will conduct after the Merger, and to enter into and perform this
Agreement.
(b) Authorization; Binding Effect. The execution, delivery, and
performance of this Agreement have been duly authorized by all necessary action
on the part of Xxxx Tours. A certified copy of the resolutions adopted by the
board of directors of Xxxx Tours in this regard is attached as EXHIBIT 7(b).
This Agreement has been duly executed and delivered by Xxxx Tours and
constitutes, and upon execution and delivery will constitute, the legal, valid,
and binding obligation of Xxxx Tours, enforceable against Xxxx Tours in
accordance with its terms, subject to applicable bankruptcy, insolvency, and
other similar laws affecting the enforceability of creditors' rights generally
and the discretion of the courts with respect to equitable remedies.
(c) No Conflicts. Neither the execution and delivery by Xxxx Tours of
this Agreement, or any other document or instrument to be executed by Xxxx Tours
pursuant to this Agreement or otherwise in connection herewith (collectively,
the "Xxxx Tours Documents"), nor the consummation by Xxxx Tours and the Xxxx
Tours Shareholders of the transactions contemplated hereby or thereby, will
result in any breach of or constitute a default (or, with notice or lapse of
time or both, would become a default), or give to others any rights of
termination, acceleration, or cancellation, or result in the creation of any
lien, charge, or encumbrance upon any of the assets or properties of Xxxx Tours,
under the Articles of Incorporation or the By-Laws of Xxxx Tours, or the terms
of any contract, instrument, or other agreement to which Xxxx Tours is a party
or is otherwise bound, or any judgment, decree, order, statute, law, ordinance,
rule, or regulation applicable to Xxxx Tours.
(d) Litigation. There is no claim, action, suit, litigation, audit,
investigation, or other proceeding pending, or, to the knowledge of Xxxx Tours,
threatened against Xxxx Tours or its assets, properties, or business, or the
transactions contemplated by this Agreement, and neither Xxxx Tours nor its
assets or properties are subject to or bound by any order, writ, injunction,
judgment, or decree of any court or governmental regulatory agency, commission,
board, or administrative body.
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(e) Access to Information. Xxxx Tours acknowledges that it has been
provided with access to all financial and other information concerning the PKI
Solutions Shares, PKI Solutions, and this transaction, which Xxxx Tours deemed
necessary in order to make an informed investment decision. Xxxx Tours has had a
reasonable opportunity to ask questions of, and receive answers from, PKI
Solutions and its officers, agents, and advisors in connection with this
transaction.
8. COVENANTS OF THE PKI SOLUTIONS SHAREHOLDERS
The Principal PKI Solutions Shareholders covenant to Xxxx Tours and the
Xxxx Tours Shareholders as follows:
(a) Disclosure. Each PKI Solutions Shareholder will inform Xxxx Tours
promptly of anything, which comes to his attention that would make any
representation or warranty of PKI Solutions or of such PKI Solutions
Shareholder, made herein untrue or misleading, or which constitutes a breach of
any covenant of the Company or such PKI Solutions Shareholder contained herein.
(b) Retention of Employees. The PKI Solutions Shareholders will use
their reasonably best efforts to persuade PKI Solutions' employees to remain
employed after the Closing Date.
9. COVENANTS OF XXXX TOURS
Xxxx Tours covenants to PKI Solutions and the PKI Solutions
Shareholders as follows:
(a) Preservation of and Access to Records. Xxxx Tours agrees that it
shall use reasonably commercial efforts to preserve and keep material records of
PKI Solutions until the later of: (1) December 31, 2004; (2) any longer period
as may be required by any governmental agency or ongoing litigation; or (3) in
the case of records relating to the proper assessment or the payment of Taxes,
until the expiration of the applicable statute of limitations (including waivers
and extensions). Xxxx Tours shall allow the PKI Solutions Shareholders, at the
PKI Solutions Shareholders' cost, to inspect and copy such records during normal
business hours and upon reasonable written notice as may be reasonably required
in connection with any legal proceedings against, or governmental investigations
of, PKI Solutions or in connection with any Tax examination of PKI Solutions;
provided, however, that the PKI Solutions Shareholders will have potential
liability with respect to such matter only as provided pursuant to the terms of
this Agreement. If the PKI Solutions Shareholders request assistance hereunder,
they shall reimburse Xxxx Tours for reasonable out-of-pocket expenses incurred
in providing such assistance. In the event Xxxx Tours wishes to destroy such
records after the time periods specified above, it shall first give ninety (90)
days' prior written notice to the PKI Solutions Shareholders, and the PKI
Solutions Shareholders shall have the right at their option to object to such
destruction by prior written notice given to Xxxx Tours within such ninety (90)
day period, in which case Xxxx Tours at its option will either continue to
retain possession of such records or it will hand over such records to the PKI
Solutions Shareholders within one hundred eighty (180) days after the date of
the PKI Solutions Shareholders' notice to Xxxx Tours hereunder. If written Xxxx
Tours does not receive objection within such ninety (90) day period, Xxxx Tours
shall be free to dispose of such records as it chooses. In the event such
records are delivered to the PKI Solutions Shareholders as aforesaid, the PKI
Solutions Shareholders shall maintain the confidentiality thereof, and shall not
disclose to any third party or otherwise make public any information therein,
except as required by applicable law, and the PKI Solutions Shareholders agree
to execute and deliver to Xxxx Tours a reasonable
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confidentiality agreement in this regard containing provisions similar to those
provisions contained in the Confidentiality Agreement.
(b) Avoidance of Certain Actions. Xxxx Tours will not take any action
on or after the Closing Date that would jeopardize the status of the Merger as a
"reorganization" within the meaning of Section 368(a)(1)(A) of the Code,
including but not limited to any action that would violate the rules of U.S.
Treasury Regulation '1.368-1(d) or (e) (relating to continuity of business
enterprise and continuity of interest).
(c) Registration Statement. Xxxx Tours shall file a resale registration
statement on Form SB-2, within thirty (30) days of receipt of Audited
Consolidated Financial Statements (the "Registration Statement") for at a
minimum the Xxxx Tours Shares owned by the Xxxx Tours Shareholders immediately
prior to the Merger.
10. MUTUAL COVENANTS
(a) Efforts, Cooperation, and Third Party Consents. Subject to the
terms and conditions of this Agreement, each Party will use its reasonably best
efforts to cooperate with the other so as to cause the Closing to occur as
provided herein, and to obtain any third-party consents that may be required to
consummate the transactions contemplated by this Agreement and the Transfer
Agreement.
(b) Confidentiality. The Parties agree that, except to the extent
required by law or by valid legal process: (i) each party will treat all
information provided by another party hereunder ("Confidential Information") as
permanently confidential; (ii) no party will use any Confidential Information it
receives from another party hereunder other than in connection with performing
its obligations under this Agreement; and (iii) no Party will disclose any
Confidential Information to any third party without prior written consent of the
disclosing party. However, notwithstanding the preceding sentence, a Party may
disclose Confidential Information to those of its representatives who need to
know such Confidential Information for purposes of assisting such Party with the
transactions contemplated by this Agreement and who agree or are otherwise
legally bound to hold such Confidential Information in confidence. All
Confidential Information is and will remain the property of the disclosing
party. Each Party represents and warrants that prior to the execution hereof it
has not disclosed any of the terms, conditions, obligations, or matters
contained in or relating to this Agreement and the transactions contemplated
herein, and covenants and agrees that following the execution of this Agreement
it shall not disclose to any person, individual, or entity any of such terms,
conditions, or matters, and to keep the same confidential. However, the
foregoing obligations of confidentiality shall not apply to any information
that: (iv) is already known to the receiving party, free of any restrictions at
the time it is obtained by the receiving party; (v) is or becomes publicly known
through no wrongful act of the receiving party; (vi) is rightfully received by
the receiving party from a third party without restriction; (vii) is
independently developed without breach of any agreements or use of confidential,
proprietary, trade secret and/or sensitive information disclosed to or obtained
by the receiving party from the disclosing party; or (viii) is disclosed
pursuant to the lawful requirement of a governmental agency or is required by
operation of law.
(c) Publicity. Xxxx Tours, PKI Solutions, the Xxxx Tours Shareholders,
and the PKI Solutions Shareholders each agrees that no public release or
announcement concerning the transactions contemplated hereby shall be issued by
any of them without the prior written consent of the others, except for releases
and announcements as are required to be made by applicable
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law, in which case the person required to make the release or announcement shall
allow the other party reasonable time to comment on such release or announcement
in advance of its issuance.
(d) Taxes. The Principal PKI Solutions Shareholders shall be
responsible, at their expense, for preparing and timely filing, or causing an
independent certified accounting firm to prepare and timely file, all returns
and reports for PKI Solutions' Federal and State income Taxes for the taxable
periods ending on or before the Closing Date, including any returns with respect
to the carryback of net operating losses generated during such taxable periods.
In preparing such returns of Taxes for such taxable periods, the PKI Solutions
Shareholders shall not, or shall cause such independent certified accounting
firm not to, deviate from the manner in which any item of income or expense of
PKI Solutions was reported in prior years, except as otherwise required by law.
Such Tax returns or reports shall be submitted to Xxxx Tours for review at least
twenty-one (21) business days prior to the filing date for any such return or
report (without regard to extensions). Within fifteen (15) days following the
date on which such Tax returns are provided to Xxxx Tours, Xxxx Tours shall
provide to the PKI Solutions Shareholders a written statement of any objections
to the Tax returns. During such time period, the PKI Solutions Shareholders'
accountant shall provide Xxxx Tours and its representatives with access to his
tax work papers the methods utilized for purposes of preparing such Tax returns
and shall make members of the PKI Solutions Shareholders' accounting firm
reasonably available for discussion with Xxxx Tours' accountants. In the event
the Parties have not reached agreement on the Tax returns prior to the due date
thereof, such Tax returns shall be extended and the disputed issues will be
submitted to an independent third party certified public accounting firm
mutually acceptable to the parties for resolution. The determination of such
public accounting firm shall be binding upon the parties absent manifest error.
The cost of such independent third party accounting firm shall be borne equally
by Xxxx Tours on the one hand and the PKI Solutions Shareholders on the other
hand. Once the form of the Tax returns is agreed upon or otherwise determined as
provided above, the PKI Solutions Shareholders will file such returns. Xxxx
Tours shall be responsible for filing or causing PKI Solutions to file all
returns and reports for Taxes for the taxable periods of PKI Solutions ending
after the Closing Date.
(e) Access to Books and Records. Pending the Effective Date, PKI
Solutions and Xxxx Tours shall give each other, and or their designated
representatives, full access to their books of original entry, legers, bank
statements, minute books, shareholder lists, contracts, patents, trademarks, and
all other documents maintained by them in connection with their business
operations.
(f) Pending the Closing Date, neither PKI Solutions nor Xxxx Tours
shall incur any indebtedness other than in the ordinary course of business, and
neither shall commit to any material undertakings, programs or projects, other
than pursuant to existing agreements, which would have a material negative
impact to its balance sheets, without the prior written consent of the other
Party; and, other than paying current liabilities, PKI Solutions and Xxxx Tours
shall operate their businesses in a manner consistent with the conservation of
their assets, including their cash reserves.
(g) PKI Solutions shall have no liabilities at the Closing Date except
for those liabilities set forth on the attached SCHEDULE 10(g), and liabilities
for legal fees and transfer agent expenses incurred by PKI Solutions after the
signing of the letter of intent in connection with the Merger.
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(h) Xxxx Tours shall have no liabilities at the Closing Date except for
those liabilities set forth on the attached Schedule 10(h), and liabilities for
legal fees and transfer agent expenses incurred by Xxxx Tours after the signing
of the letter of intent in connection with the Merger.
11. CONDITIONS TO THE CLOSING
The Merger shall be conditioned on:
(a) Its approval by the board of directors of Xxxx Tours and the Xxxx
Tours Shareholders;
(b) Its approval by the board of directors of PKI Solutions and the PKI
Solutions Shareholders; and
(c) The satisfactory completion of a "due diligence" investigation by
PKI Solutions and Xxxx Tours.
12. THE CLOSING
(a) Time and Place. The Closing of the transactions contemplated by
this Agreement shall take place at the offices of Xxxxx & Schloss LLP, 0 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 1:00 p.m. Eastern time on March 28,
2001, or at such other time and place mutually agreeable to the Parties. The
Closing shall be deemed effective as of the close of business on the Closing
Date.
(b) Deliveries at the Closing by PKI Solutions. PKI Solutions shall
cause the following to be delivered to Xxxx Tours at the Closing:
(I) An opinion of counsel to PKI Solutions, from E.P. Toothe &
Associates, counsel to Xxxx Tours in the form attached as EXHIBIT 11(b)(I);
(ii) A certificate of good standing dated within thirty (30) days of
the Closing Date from the Nevada Secretary of State on behalf of PKI Solutions;
and
(iii) Such other documents and instruments required by the terms of
this Agreement to be delivered by PKI Solutions or the PKI Solutions
Shareholders at the Closing or otherwise reasonably necessary to consummate the
transactions contemplated hereby (except to the extent unable to do so for
reasons outside its reasonable control, such as for example such items are to be
provided by third parties).
(c) Deliveries at the Closing by Xxxx Tours. Xxxx Tours shall cause the
following to be delivered to PKI Solutions at the Closing:
(i) Instructions to Xxxx Tours=s transfer agent for the issuance of the
Xxxx Tours Shares certificates as provided in Section 3(a)(i);
(ii) An opinion of counsel to Xxxx Tours, from Xxxxxx Xxxxxxx, Esq.,
Counsel to PKI Solutions, in the form attached as EXHIBIT 11(c)(ii); and
(iii) Such other documents and instruments required by the terms of
this Agreement to be delivered by Xxxx Tours at the Closing or otherwise
reasonably necessary to consummate the transactions contemplated hereby (except
to the extent unable to do so for reasons outside its reasonable control, such
as for example such items are to be provided by third parties).
13. INDEMNIFICATION
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(a) Indemnification by the PKI Solutions Shareholders. Each PKI
Solutions Shareholder hereby covenants and agrees:
(1) to severally indemnify and hold harmless Xxxx Tours from
and against any loss, liability, claim, cost, damage, or expense (including
reasonable legal fees and expenses) (collectively, a "Loss") arising out of or
resulting from, any breach of any representation, warranty, covenant, or other
agreement on the part of such PKI Solutions Shareholder contained in this
Agreement or in any certificate, instrument, or other document delivered by the
PKI Solutions Shareholders pursuant hereto, or any covenant or agreement by or
on behalf of such PKI Solutions Shareholder set forth in this Agreement which is
breached by such PKI Solutions Shareholder but not by all the PKI Solutions
Shareholders;
(2) to jointly and severally indemnify and hold harmless Xxxx
Tours from and against any Loss arising out of or resulting from: (A) any breach
of any other representation, warranty, covenant, or other agreement on the part
of the PKI Solutions Shareholders contained in this Agreement or in any
certificate, instrument or other document delivered by the PKI Solutions
Shareholders to Xxxx Tours pursuant hereto; (B) any Tax liabilities of PKI
Solutions with respect to the periods on or prior to the Closing Date; (C) the
fees and commissions of any broker or advisor engaged by any PKI Solutions
Shareholder in connection with this transaction; or (D) for any accounts
receivable in excess of the reserve, if any, in the Closing Date balance sheet,
that are uncollected one hundred eighty (180) days after the Closing Date; and
(3) to jointly and severally indemnify and hold harmless Xxxx
Tours and its directors and officers from and against any Loss arising from or
relating to any claims now existing or hereafter asserted by any former
shareholder of PKI Solutions relating to PKI Solutions and/or any agreements,
understandings, or obligations of any or all of the PKI Solutions Shareholders
and/or PKI Solutions, which indemnity obligations will survive for a period of
six (6) years following the Closing Date.
(b) Indemnification by Xxxx Tours. Xxxx Tours hereby covenants and
agrees to indemnify and hold harmless the PKI Solutions Shareholders from and
against any Loss arising out of or resulting from: (i) any breach of any
representation, warranty, covenant, or other agreement on the part of Xxxx Tours
contained in this Agreement or in any certificate, instrument, or other document
delivered by Xxxx Tours to the PKI Solutions Shareholders pursuant hereto, or
any covenant or agreement by or on behalf of Xxxx Tours set forth in this
Agreement which is breached by Xxxx Tours; and (ii) the fees and commissions of
any broker or advisor engaged by Xxxx Tours in connection with this transaction.
In addition, Xxxx Tours covenants and agrees to indemnify and hold harmless the
PKI Solutions Shareholders from and against any personal guarantees made by the
PKI Solutions Shareholders prior to the Closing with respect to any debts, lease
commitments or other obligations of PKI Solutions to the extent disclosed in
SCHEDULE 13(b).
(c) Notice and Defense. The obligations of the PKI Solutions
Shareholders and Xxxx Tours hereunder with respect to their respective
indemnities pursuant to this Section 14,13, resulting from any claim or other
assertion of liability by third parties (hereinafter collectively, "Third Party
Claim(s)"), shall be subject to the following terms and conditions:
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(1) the party seeking indemnification hereunder (the
"Indemnified Party") shall give written notice (a "Claim Notice") of any such
Third Party Claim(s) to the party from whom indemnification is sought hereunder
(the "Indemnifying Party") within a reasonable time after the Indemnified Party
receives notice thereof; provided, however, that the failure to give notice
timely shall not affect the Indemnifying Party's obligations hereunder except to
the extent that such failure prejudices the Indemnifying Party or its ability to
defend such Third Party Claim(s);
(2) the Indemnifying Party shall have the right to undertake,
with counsel or other representatives of its own choosing and reasonably
acceptable to the Indemnified Party, the defense or settlement of any such Third
Party Claim(s);
(3) in the event that the Indemnifying Party shall fail to
notify the Indemnified Party within ten (10) days of receipt of the Claim Notice
that it has elected to undertake such defense or settlement, or if at any time
the Indemnifying Party shall otherwise fail to diligently defend or pursue
settlement of such claim, then the Indemnified Party shall have the right to
undertake the defense, compromise, or settlement of such claim, with counsel
reasonably acceptable to the Indemnifying Party; and
(4) neither Party shall settle any Third Party Claim(s)
without the prior written consent of the other party, which consent shall not be
unreasonably withheld or delayed. In the event the Indemnifying Party submits to
the Indemnified Party a bona fide settlement offer from the third party claimant
of any Third Party Claim(s) (which settlement offer shall include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
Indemnified Party of a release from all liability in respect of such claim) and
the Indemnified Party refuses to consent to such settlement, then thereafter the
Indemnifying Party's liability to the Indemnified Party for indemnification
hereunder with respect to such Third Party Claim(s) shall not exceed the
settlement amount included in such bona fide settlement offer, and the
Indemnified Party shall either assume the defense of such Third Party Claim(s)
or pay the Indemnifying Party's attorneys fees and other out of pocket costs
incurred thereafter in continuing the defense of such claim. Regardless of which
party is conducting the defense of any such Third Party Claim(s), the other
party, with counsel or other representatives of its own choosing and at its sole
cost and expense, shall have the right to consult with the party conducting the
defense of such claim and its counsel or other representatives concerning such
claim and the Indemnified Party and their respective counsel or other
representatives shall cooperate with respect to such claim, and the party
conducting the defense of any such claim and its counsel shall in any case keep
the other party and its counsel (if any) fully informed as to the status of any
claim and any matters relating thereto. Each party shall provide to the other
party such records, books, documents, and other materials as shall reasonably be
necessary for such party to conduct or evaluate the defense of any Third Party
Claim(s) and will generally cooperate with respect to any matters relating
thereto.
(d) Limitations on Indemnification. The foregoing indemnification
obligations shall be subject to the following limitations:
(1) Recovery by Indemnified Party. The amount of any
indemnified Loss hereunder shall be reduced by the amount, if any, of the
recovery actually received by the Indemnified Party with respect to such
indemnified Loss (net of any out-of-pocket collection costs) under applicable
insurance policies or from persons or entities not parties to this Agreement
(not including any successor in interest or assign of any party hereto). In the
event such a recovery is received by the Indemnified Party after it receives
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payment or other credit under this Agreement with respect to an indemnified
Loss, then the Indemnified Party shall promptly pay to the Indemnifying Party
the lesser of (A) the amount of the recovery actually received; or (B) the
amount of the indemnity payment made by the Indemnifying Party to the
Indemnified Party with respect to such indemnified Loss. Notwithstanding
anything herein to the contrary, the terms of this Section 12(d)(i) shall not
apply to the extent such provisions would operate to invalidate or otherwise
prejudice any claim for insurance or against any third party.
(2) Act or Omission of the Indemnified Party. The amount of
any indemnified Loss arising under this Agreement shall be fairly and equitably
reduced to the extent that such indemnified Loss arose by reason of, and is
directly attributable to, the negligent or intentional wrongful acts or
omissions of the Indemnified Party.
(3) Taxes. The amount of any indemnified Loss hereunder shall
be fairly and equitably reduced (or increased) by the amount of the actual
reduction (or increase) in income Tax liability of the Indemnified Party after
giving effect to incurring by the Indemnified Party of the liability giving rise
to the claim for indemnification, the payment by the Indemnified Party of such
claim, and the receipt by the Indemnified Party of any indemnity payment with
respect to such claim.
(e) Setoff. Subject to compliance with Section 12(c) and Section 12(d)
above, Xxxx Tours shall have the right to set off any indemnified Loss for which
Xxxx Tours is entitled to indemnification hereunder against payments due
hereunder.
(f) Dollar Limitation. Notwithstanding anything in this Section 1412 to
the contrary, the foregoing indemnification obligations shall be applicable in
respect of any Loss to the extent that such Loss, when taken as a whole, exceeds
an aggregate of Fifty Thousand Dollars ($50,000), except that such limit shall
not apply to (i) indemnification obligations under Section 12(a)(iii) above,
(ii) indemnification obligations relating to Taxes, or (iii) indemnification
obligations under the final sentence of Section 12(b) above.
14. SURVIVAL OF PROVISIONS
The representations and warranties contained in this Agreement shall
survive the Closing for a period of three (3) years, except that the
representations and warranties contained in:
(a) Ownership of Stock. Sections 5(e) and 6(e) hereof shall be
perpetual;
(b) Taxes and Antitrust. Section 6(l) (to the extent applicable to
compliance with antitrust laws), Section 6(p) and Section 9(e) hereof shall
survive for a period of thirty (30) days following the day on which the longest
applicable statute of limitations expires relating to such matters; and
(c) Environmental Matters. Section 6(t) hereof with respect to
environmental matters affecting off-site properties (i.e., properties not owned
or leased by PKI Solutions) shall survive for a period of five (5) years, and
any intentional or fraudulent breach of warranty or misrepresentation shall
survive for a period of thirty (30) days following the day on which the longest
applicable statute of limitations expires with respect to such matter.
15. EXPENSES
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Except as otherwise specifically provided herein, each of the PKI
Solutions Shareholders on the one hand, and Xxxx Tours on the other hand shall
each pay all of its respective expenses relating to this transaction, including
fees and disbursements of its respective counsel, accountants, brokers,
investment bankers, and financial advisors, whether or not the transactions
contemplated hereunder are consummated.
16. MISCELLANEOUS
(a) Assignment. This Agreement shall not be assignable or otherwise
transferable by Xxxx Tours or the PKI Solutions Shareholders without the prior
written consent of the non-assigning parties, and shall be binding upon, and
shall inure to the benefit of, the parties to this Agreement, and their
respective legal representatives, heirs, devisees, legatees, beneficiaries, and
successors and permitted assigns.
(b) Fees of Legal Counsel. In the event any Party to this Agreement
shall employ legal counsel to protect its rights hereunder or to enforce any
term or provision hereof, the Party prevailing in any such action shall have the
right to recover from the other party all of its reasonable attorneys' fees and
expenses incurred in relation to such claims, as approved by the court on the
basis of customary fees charged by attorneys in the State of Delaware.
(c) Further Assurances. The Parties agree that from time to time
hereafter, upon request, each of them will execute, acknowledge, and deliver
such other instruments and documents, and take such further action as may be
reasonably necessary to carry out the intent of this Agreement.
(d) Modification. No provision contained herein may be modified,
amended, or waived except by written agreement or consent signed by the party to
be bound thereby.
(e) Headings and Captions. Subject headings and captions are included
for convenience purposes only, and shall not affect the interpretation of this
Agreement.
(f) Notices. All notices, requests, demands, and other communications
permitted or required hereunder shall be in writing, and either (i) delivered in
person; (ii) sent by express mail or other overnight delivery service providing
receipt of delivery; (iii) mailed by certified mail, postage prepaid, return
receipt requested; or (iv) sent by telescope or other facsimile transmission as
follows, with proof of transmission thereof retained by the transmitter:
If to PKI Solutions Shareholders:
Xxxxxxx X. Xxxxxxx
Secretary-Treasurer
PKI SOLUTIONS, INC.
0000 Xxxxxxxx Xxxxx SE, PMB 255
Xxxxxxxx, Xxxxxxxxxx 00000
If to PKI Solutions, Inc.:
Xxxxxxx X. Xxxxxxx
Secretary-Treasurer
PKI SOLUTIONS, INC.
0000 Xxxxxxxx Xxxxx XX, XXX 000
Xxxxxxxx, Xxxxxxxxxx 00000
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If to Xxxx Tours Limited:
x/x X.X. Xxxxxx & Associates
Suite 000X
Xxxxxxx Xxxxxx
X.X. Xxx X-0000
Nassau, Bahamas
or to such other address as any party may designate by notice. Any such
notice or communication, if given or made by prepaid, certified mail or by
recorded express delivery, shall be deemed to have been made when actually
received, but not later than three (3) business days after the same was posted
or given to such express delivery service and if made properly by telescope or
other facsimile transmission such notice or communication shall be deemed to
have been made at the time of dispatch.
(g) Severability. If any portion of this Agreement is held invalid,
illegal, or unenforceable, such determination shall not impair the
enforceability of the remaining terms and provisions herein.
(h) Waiver. No waiver of a breach or violation of any provision of this
Agreement shall operate or be construed as a waiver of any subsequent breach, or
limit or restrict any right or remedy otherwise available.
(i) Rights and Remedies Cumulative. The rights and remedies expressed
herein are cumulative and not exclusive of any rights and remedies otherwise
available.
(k) Entire Agreement. This document (together with the Schedules and
any exhibits and attachments hereto) constitutes the entire agreement of the
parties and supersedes any and all other prior agreements, oral or written, with
respect to the subject matter contained herein. There are no representations,
warranties, covenants, or agreements between the parties hereto with respect to
this matter except those expressly set forth herein.
(l) Governing Law; Jurisdiction. This agreement shall be subject to and
governed by the laws of the State of Nevada without regard to conflict of laws
principles of such State. The parties consent to jurisdiction of any Federal or
State court located in New York, New York or in the State of Nevada for
resolution of disputes relating to this Agreement.
(m) Incorporation by Reference. All Schedules and any exhibits and
attachments hereto, and other documents referred to in this Agreement, shall be
deemed incorporated herein by any reference thereto as if fully set out.
(n) Counterparts. This Agreement may be executed in one or more
counterparts (all counterparts together reflecting the signatures of all the
parties), each of which shall be deemed to be an original, and all of which
together shall constitute one and the same instrument.
(o) Third Party Beneficiaries. Except with regard to issuance of Xxxx
Tours Shares and to the PKI Solutions Shareholders as provided in Section 3(a)
above, and except as provided in Section 15(a), this Agreement is not intended
to create any right of enforcement by or in any third party.
(p) Authority. Each individual signing this Agreement in a
representative capacity acknowledges and represents that he is duly authorized
to execute this Agreement in such capacity in the name of, and on behalf of, the
designated corporation, partnership, trust, or other entity.
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(q) Gender, etc. When used in this Agreement, the masculine shall
include the feminine and the neuter and vice versa, and the plural shall include
the singular and vice versa.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first above written.
Xxxx Tours Limited
By:___________________________
Title:________________________
PKI Solutions, Inc.
By:___________________________
Xxxxxxx X. Xxxxxxxx
President
By:___________________________
Xxxxxxx X. Xxxxxxx
Secretary-Treasurer
The PKI Solutions Shareholders:
______________________________
Xxxxxx X. Xxxxxxx
First Sign, Inc.
By:___________________________
Xxxxxx X. Xxxxxxx
President
A.I., Inc.
By:___________________________
Xxxxxxx X. Xxxxxxx
DBA, Inc.
By:___________________________
Xxxxxxx X. Xxxxxxx
The Vine Family, LLC
By:___________________________
Xxxxxxx X. Xxxxxx,
Managing Member/Trustee
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