EXHIBIT: 2.1
AGREEMENT TO EXCHANGE STOCK
BY AND AMONG
SIMEX TECHNOLOGIES, INC.
AND
THE STOCKHOLDERS
OF
PROBITY INVESTIGATIONS, INC.
DATED AS OF MAY 20, 2003
STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT is entered into as of this 20th day of
May, 2003 (the "Agreement"), by and among the Stockholders of Probity
Investigations, Inc., a Georgia corporation ("Probity") listed in Attachment A
hereto (the "Stockholders") and SIMEX Technologies, Inc. a Delaware corporation
("SIMEX").
R E C I T A L S:
A. Probity is engaged in the business of selling and installing
security systems and has installed a network of distributors for its products
(the "Probity Business").
B. Probity and SIMEX each desire to combine their respective
companies and business operations, all on the terms and subject to the
conditions set forth herein (the "Exchange").
C. Of the issued and outstanding capital stock of Probity (the
"Probity Stock"), a majority is owned by Xxxx Xxxx Xxxxxxx ("Xxxxxxx"), and
after the proposed restructuring of Probity, the remaining shares shall be owned
by Wooju Communications Co., LTD ("Woojo") and Eutopeon Enterprises, LLC.
D. The respective Boards of Directors of SIMEX and Probity, and
the Stockholders have approved the Exchange, upon the terms and subject to the
conditions set forth herein.
E. The parties hereto intend for the Exchange to qualify, for
federal income tax purposes, as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the mutual covenants,
representations, conditions and agreements set forth herein and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is hereby agreed as follows:
ARTICLE I
THE EXCHANGE
1.1. The Exchange. Upon the terms and subject to the conditions
hereof, at the Effective Time (as defined in Section 1.3), on the Closing Date,
each Stockholder shall assign, transfer and deliver to SIMEX, the Stockholder's
Probity Stock, and SIMEX shall take and accept such Stock in exchange for the
consideration set forth in Section 1.2 below.
1.2. Issuance of SIMEX Stock. On the terms and subject to the
conditions set forth in this Agreement, on the Closing Date, SIMEX shall issue
and deliver to each Stockholder, and such Stockholder shall accept and take,
such number of authorized and previously unissued shares of SIMEX Stock, in the
number and type of shares set forth next to the Stockholder's
name on Schedule 1.2, attached hereto. As a result of the Exchange, Probity
shall become a direct, wholly-owned subsidiary of SIMEX.
1.3. Closing and Closing Date. Unless this Agreement shall have
been terminated and the transactions herein contemplated shall have been
abandoned pursuant to Section 6.1, and subject to the satisfaction or waiver of
the conditions set forth in Article VIII, the closing of the Exchange (the
"Closing") will take place as promptly as practicable (and in any event within
two (2) business days after satisfaction of the conditions set forth in Sections
5.1 and 5.2) (the "Closing Date") at the offices of Xxxxxxxxx Traurig, LLP, The
Forum, 0000 Xxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, unless another
date or place is agreed to by the parties.
1.4. Delivery of Certificates. At the Closing, the Stockholders
shall surrender for cancellation certificates representing their shares of
Probity Stock, against delivery of certificates representing the SIMEX Stock for
which the shares of Probity Stock are to be exchanged at Closing.
1.5. No Further Ownership Rights in Stock. All shares of SIMEX
Stock issued and cash paid upon conversion of shares of Probity Stock in
accordance with the terms of Article II shall be deemed to have been issued and
paid in full satisfaction of all rights pertaining to the shares of Probity
Stock.
1.6. No Fractional Shares of SIMEX Stock.
(a) No scrip or shares of SIMEX Stock representing
fractional shares of SIMEX Stock or any interests therein or rights
thereto or book-entry credit of the same shall be issued upon the
surrender for exchange of Probity Common Certificates and such
fractional share interests will not entitle the owner thereof to vote
or to have any rights of a shareholder of SIMEX or a holder of shares
of SIMEX Stock.
(b) Notwithstanding any other provision of this
Agreement, each holder of shares of Probity Stock exchanged pursuant to
the Exchange who otherwise would have been entitled to receive a
fraction of a share of SIMEX Stock (determined after taking into
account all Certificates delivered by such holder) shall receive one
share for each fractional share if such fractional share exceeds .5
shares but no additional shares for fractional shares less than .5
shares.
1.7. Lost Certificates. If any Probity Common Certificate shall
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the Person claiming such Probity Common Certificate to be so lost,
stolen or destroyed and, if required by SIMEX, the posting by such Person of a
bond or other collateral security in such reasonable amount as SIMEX may direct
as indemnity against any claim that may be made against it with respect to such
Probity Common Certificate, SIMEX will deliver in exchange for such lost, stolen
or destroyed Probity Common Certificate the applicable Exchange Consideration
with respect to the shares of Probity Stock formerly represented thereby.
1.8. Further Assurances. At and after the Effective Time, the
officers and directors of SIMEX will be authorized to execute and deliver, in
the name and on behalf of
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Probity, any deeds, bills of sale, assignments or assurances and to take and do,
in the name and on behalf of Probity, any other actions and things to vest,
perfect or confirm of record or otherwise in SIMEX, any and all right, title and
interest in, to and under any of the rights, properties or assets acquired or to
be acquired by SIMEX, as a result of or in connection with the Exchange.
1.9. Stock Transfer Books. The stock transfer book of Probity shall
be closed immediately upon the Effective Time and there shall be no further
registration of transfers of shares of Probity Stock thereafter on the records
of Probity. On and after the Effective Time, all Probity Common Certificates
presented to SIMEX for any reason shall be cancelled and exchanged for SIMEX
Stock as set forth in this Article I.
1.10. Lock Up Agreement. Notwithstanding any other provision of this
Agreement to the contrary, at Closing, each Stockholder shall execute and
deliver, and the shares of SIMEX Stock to be issued as Exchange Consideration
shall be subject to the terms of, a Lock Up Agreement in the form attached
hereto as Exhibit "A" (the "Lock Up Agreement").
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF XXXXXXX
Xxxxxxx represents and warrants to SIMEX as follows, which
representations and warranties shall survive the Closing in accordance with
Section 7.1. For purposes of this Article II, "Probity" shall include its
Subsidiaries.
2.1. Organization and Qualification. Probity is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Georgia. Probity has the requisite corporate power and authority to carry on the
Probity Business as it is now being conducted and is duly qualified or licensed
to do business, and is in good standing, in each jurisdiction where the
character of its properties owned or held under lease or the nature of its
activities makes such qualification necessary, except where the failure so to
qualify could not reasonably be expected to have a material adverse effect on
the Probity Business or on Probity's properties or assets. Set forth on Schedule
2.1 is a list of any states in which Probity is qualified to do business.
Complete and correct copies of the Articles of Incorporation and Bylaws of
Probity as in effect on the date hereof have been provided to SIMEX and will be
attached to a Closing and incumbency certificate to be delivered at Closing,
substantially in the form of Exhibit "B" ("Probity's Closing Certificate"). The
minute book of Probity, a correct and complete copy of which has been delivered
to SIMEX, (a) accurately reflects all action taken by the directors and
shareholders of Probity at meetings of Probity's Board of Directors or
shareholders, as the case may be; and (b) contains correct and complete copies,
or originals, of the respective minutes of all meetings or consent actions of
the directors or shareholders.
2.2. Authority. Probity has the necessary corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery hereof and the
consummation of the transactions contemplated hereby by Probity have been duly
and validly authorized and approved by Probity's Board of Directors. Other than
approval by the Stockholders, no other corporate or shareholder proceedings on
the
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part of Probity, its Board of Directors or the Stockholders is necessary to
authorize or approve this Agreement or to consummate the transactions
contemplated hereby (including the Exchange). Probity's Board of Directors has
determined to and will recommend to the Stockholders that such Stockholders
approve and adopt this Agreement and approve the Exchange. This Agreement has
been duly executed and delivered by the Stockholders, and assuming the due
authorization, execution and delivery by SIMEX, constitutes the valid and
binding obligation of the Stockholders, enforceable against such Stockholders in
accordance with its terms, subject, in each case, to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general application relating to
or affecting creditors' rights and to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing.
2.3. Capitalization.
(a) The authorized capital stock of Probity consists of
(i) 538 shares of common stock, no par value (the "Probity Common
Stock"), of which 538 shares are validly issued and outstanding, fully
paid and nonassessable. No other class of stock, common or preferred,
is outstanding. All of the issued and outstanding shares of capital
stock of Probity are validly issued, fully paid and nonassessable. All
outstanding capital stock of Probity was issued in accordance with
applicable federal and state securities laws.
(b) Except as set forth on Schedule 2.3(b), there are no
options, warrants, calls, convertible notes, agreements, commitments or
other rights outstanding at present that would obligate Probity or any
of its shareholders to issue, deliver or sell shares of its or their
capital stock, or to grant, extend or enter into any such option,
warrant, call, convertible note, agreement, commitment or other right.
In addition to the foregoing, as of the date hereof, Probity has no
bond, debenture, note or other indebtedness issued or outstanding that
has voting rights in Probity. Schedule 2.3(b) sets forth a list of (i)
all holders of record of (A) Probity Stock, and (B) options, warrants,
convertible notes or other rights to purchase capital stock of Probity
(collectively, "Probity Stock Rights"); (ii) the number of shares held
by each Stockholder of Probity and the number of shares of capital
stock of Probity represented by the Probity Stock Rights; (iii) the
exercise price for each Probity Stock Right; and (iv) the number of
authorized but unissued options remaining under Probity's stock option
plan(s). As of the Closing, all Probity warrants shall have expired,
been cancelled or been exercised, and any warrant price thereunder paid
in exchange for Probity Stock, such that all rights of the holder(s)
thereunder shall have been extinguished. As of the Closing, all Probity
Stock Options, either shall have been exercised, and any exercise price
thereunder paid in exchange for Probity Common Stock, or shall have
been terminated, in each case such that all rights of the holder(s)
thereunder shall have been extinguished.
(c) Except as set forth on Schedule 2.3(c), to the
knowledge of Xxxxxxx, the Probity Stock held by any Stockholder is free
and clear of any lien, charge, security interest, pledge, option, right
of first refusal, voting proxy or other voting agreement, or
encumbrance of any kind or nature other than restrictions on transfer
imposed by federal and state securities laws (any of the foregoing, a
"Lien").
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2.4. Subsidiaries. Except as set forth on Schedule 2.4, Probity has
no subsidiaries and does not otherwise own or control, directly or indirectly,
any equity interest, or any security convertible into an equity interest, in any
corporation, partnership, limited liability company, joint venture, association
or other business entity (any of the foregoing, an "Entity"). Immediately prior
to or contemporaneously with the Closing, all subsidiaries set forth on Schedule
2.4 will be wholly-owned subsidiaries of Probity.
2.5. No Conflicts, Required Filings and Consents. Except as set
forth on Schedule 2.5, none of (i) the execution and delivery hereof by Probity,
(ii) the consummation by the Stockholders of the transactions contemplated
hereby (including the Exchange) or (iii) compliance by the Stockholders with any
of the provisions hereof will:
(a) conflict with or violate the Articles of
Incorporation or Bylaws of Probity;
(b) result in a violation of any statute, ordinance,
rule, regulation, order, judgment or decree applicable to Probity or by
which Probity or any of its properties or assets may be bound or
affected;
(c) result in a violation or material breach of, or
constitute a material default (or an event that, with notice or lapse
of time or both, would become a material default) under, or give to any
other party any material right of termination, amendment, acceleration
or cancellation of, any note, bond, mortgage or indenture, or any
material contract, agreement, arrangement, lease, license, permit,
judgment, decree, franchise or other instrument or obligation, to which
Probity is a party or by which Probity or any of its properties or
assets may be bound or affected;
(d) result in the creation of any Lien on any of the
property or assets of Probity; or
(e) require any material consent, waiver, license,
approval, authorization, order, permit, registration or filing with, or
notification to (any of the foregoing being a "Consent") (i) any
government or subdivision thereof, whether domestic or foreign, or any
administrative, governmental or regulatory authority, agency,
commission, court, tribunal or body, whether domestic, foreign or
multinational (any of the foregoing, a "Governmental Entity"); or (ii)
any other individual or Entity (collectively, a "Person").
2.6. Financial Statements. Probity has heretofore furnished SIMEX
with a correct and complete copy of (a) the unaudited financial statements of
Probity for the years ended December 31, 2001 and 2002, (b) the latest draft of
the audited financial statements of Probity for the year ended December 31,
2002; and (c) the unaudited financial statements of Probity for the three
(3)-month period ended March 31, 2003 (all of the foregoing collectively herein
referred to as the "Probity Financial Statements"). Except as disclosed therein,
the Probity Financial Statements have been prepared in accordance with generally
accepted accounting principles ("GAAP") (except for the absence of footnotes and
normal year end adjustments in the case of the Probity Financial Statements for
the period ended March 31, 2003) consistently followed throughout the period
indicated, and present fairly, in all material respects, the financial position
and operating results of Probity as of the dates, and during the periods,
indicated therein.
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2.7. Absence of Changes. Except as provided in Schedule 2.7 and
except as contemplated hereby, since March 31, 2003 (a) Probity has not entered
into any material transaction that was not in the ordinary course of business;
(b) except for sales of services and equipment and supplies in the ordinary
course of business of Probity, there has been no sale, assignment, transfer,
mortgage, pledge, encumbrance or lease of any material asset or property of
Probity; (c) there has been (i) no declaration or payment of a dividend, or any
other declaration, payment or distribution of any type or nature to any
shareholder of Probity in respect of his stock, whether in cash or property, and
(ii) no purchase or redemption of any share of the capital stock of Probity; (d)
there has been no declaration, payment, or commitment for the payment, by
Probity, of a bonus or other additional salary, compensation, severance or
benefit to any employee or consultant of Probity that was not in the ordinary
course of business other than as specifically contemplated under Section 4.1(g);
(e) there has been no material release, compromise, waiver or cancellation of
any debt to or claim by Probity, or waiver of any material right of Probity; (f)
there have been no capital expenditures in excess of $25,000 for any single
item, or $100,000 in the aggregate; (g) there has been no change in accounting
methods or practices or revaluation of any asset of Probity (other than Probity
Accounts Receivable (as defined in Section 2.26) written down in the ordinary
course of business not in excess of $5,000 for any single Probity Accounts
Receivable, or $25,000 in the aggregate); (h) there has been no material damage
or destruction to, or loss of, physical property (whether or not covered by
insurance) adversely affecting the Probity Business or the operations of
Probity; (i) there has been no loan by Probity, or guaranty by Probity of any
loan, to any employee of Probity other than travel or similar advances for
otherwise reimbursable expenses; (j) Probity has not ceased to transact business
with any customer that, as of the date of such cessation, represented more than
5% of the annual gross revenues of Probity; (k) there has been no termination or
resignation of any key employee or officer of Probity, and to the knowledge of
Xxxxxxx, no such termination or resignation is threatened; (l) there has been no
amendment or termination of any material oral or written contract, agreement or
license related to the Probity Business, to which Probity is or was a party or
by which it is or was bound, except in the ordinary course of business or as
expressly contemplated hereby; (m) Probity has not in any material manner failed
to satisfy any of its debts, obligations or liabilities related to the Probity
Business or the assets of Probity as the same become due and owing (except for
Probity Accounts Payable (as defined in Section 2.27) payable in accordance with
past practices and in the ordinary course of business); (n) there has been no
agreement or commitment by Probity to do any of the foregoing; (o) Probity has
not offered or made any commitments to give any discounts or free services to
any third party under or in connection with any contract, other than in the
ordinary course of business, that would materially decrease Probity's profits;
and (p) there has been no other event or condition of any character pertaining
to and materially and adversely affecting the assets, business or financial
condition of Probity.
2.8. Undisclosed Liabilities. Except as set forth on Schedule 2.8,
Probity has no debt, liability or obligation of any kind, whether accrued,
absolute or otherwise, including any liability or obligation on account of taxes
or any governmental charge or penalty, interest or fine, except (a) liabilities
incurred in the ordinary course of business after December 31, 2002, that would
not, whether individually or in the aggregate, have a material adverse impact on
the business or financial condition of Probity; (b) liabilities reflected on the
Probity Financial Statements; and (c) liabilities incurred as a result of the
transactions contemplated hereby.
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2.9. Title to Properties. Except as set forth on Schedule 2.9,
Probity has good and marketable title to all owned tangible property and assets
used in the Probity Business, and good and valid title to its leasehold
interests, in each case, free and clear of any and all Liens other than
Permitted Liens (as defined in Section 7.9).
2.10. Equipment. Probity has heretofore furnished SIMEX with a
correct and complete list, in all material respects, of all items of tangible
personal property (including computer hardware) necessary for or used in the
operation of the Probity Business in the manner in which it has been and is now
operated by Probity (the "Probity Equipment"), except for personal property
having a net book value of less than $5,000. Except as set forth on Schedule
2.10, each material item of Probity Equipment is in good condition and repair,
ordinary wear and tear excepted.
2.11. Intellectual Property.
(a) Set forth on Schedule 2.11(a) is a correct and
complete list, in all material respects, of all patents, trademarks,
trade names, service marks and copyrights (and all pending applications
or current registrations for any of the foregoing) registered by
Probity or used by Probity in the conduct of the Probity Business. The
foregoing, together with the trade secrets and know how used by Probity
in the conduct of the Probity Business, is collectively referred to as
the "Probity Intellectual Property Rights". Probity owns, or is validly
licensed or otherwise has the right to use or exploit, as currently
used or exploited, all of the Probity Intellectual Property Rights
necessary for the conduct of Probity Business, free of any Lien or any
obligation to make any payment (whether of a royalty, license fee,
compensation or otherwise). Except as set forth on Schedule 2.11(a), no
claims, to the knowledge of Xxxxxxx, have been filed against Probity or
threatened, that Probity is infringing or otherwise adversely affecting
the rights of any Person with regard to any Probity Intellectual
Property Right or that any Probity Intellectual Property Right is
invalid or unenforceable. To the knowledge of Xxxxxxx, no Person is
infringing the rights of Probity with respect to any Probity
Intellectual Property Right; nor, to the knowledge of Probity, has any
Person threatened to do so. To the knowledge of Xxxxxxx, no employee,
agent or independent contractor of Probity, in connection with the
performance of such Person's services with Probity, has used,
appropriated or disclosed, directly or indirectly, any trade secret or
other proprietary or confidential information or right of any other
Person, or otherwise violated any confidential relationship with any
other Person.
(b) Set forth on Schedule 2.11(b) is a correct and
complete list, in all material respects, of all material computer
software used by Probity in the conduct of the Probity Business (the
"Probity Software"). Probity currently owns, licenses or otherwise has
the legal right to use all of the Probity Software (including any
upgrade, alteration or enhancement with respect to Probity Software in
which Probity owns all intellectual property rights), and all of the
Probity Software is being used in compliance with any applicable
license or other agreement.
(c) Set forth on Schedule 2.11(c) is a correct and
complete list, in all material respects, of all domain names (i)
registered to or used by Probity, (ii) the registration fees
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for which are paid by Probity or (iii) registered to any employee of
Probity relating to the Probity Business (collectively, "Domain
Names"). Probity has registered the Domain Names with an Internet
domain name registrar and is paying the applicable registrar on an
annual basis for the right to use the Domain Names, or is validly
licensed or otherwise has the right to use, the Domain Names.
(d) Except as set forth on Schedule 2.11(d):
(i) All former and current consultants or
contractors of Probity have executed and delivered valid
written instruments with Probity that assign to Probity all
rights to any inventions, improvements, discoveries or
information developed by them for Probity. All employees of
Probity who participated in the creation or contributed to the
development of Probity Intellectual Property Rights or Domain
Names were employees of Probity at the time of rendering such
services and such services were within the scope of their
employment or such employees have otherwise validly assigned
such Intellectual Property Rights or Domain Names to Probity;
and
(ii) Probity has taken reasonable security
measures, including entering into appropriate confidentiality
and nondisclosure agreements with all of its employees,
consultants and contractors, and any other Persons with access
to Probity's trade secrets or know how, to protect the
secrecy, confidentiality and value of all such trade secrets
or know how. To the knowledge of Probity, there has not been
any breach by any party to any such agreement.
2.12. Real Property. Except as set forth on Schedule 2.12:
(a) Probity has good and valid leasehold interest in all
real property (including all buildings, improvements and fixtures
thereon) used in the operation of the Probity Business (the "Probity
Real Property"). Except for Permitted Liens, and for the items set
forth on Schedule 2.12, there are no Liens on Probity's interest in any
of the Probity Real Property. Schedule 2.12 lists each county and state
where any Probity Real Property is located. Probity has heretofore
furnished SIMEX with an accurate description of all Probity Real
Property.
(b) There are no parties in possession of any portion of
the Probity Real Property other than Probity, whether as sublessees,
subtenants at will or trespassers.
(c) To the knowledge of Xxxxxxx, there is no law,
ordinance, order, regulation or requirement now in existence that would
require, under the provisions of any of the Probity Leases (as defined
in Section 2.13) or otherwise, any material expenditure by Probity to
modify or improve any of the Probity Real Property to bring it into
compliance therewith.
2.13. Leases. Schedule 2.13 sets forth a list of all leases pursuant
to which Probity leases, as lessor or lessee, real or personal property used in
operating the Probity Business or otherwise (the "Probity Leases"). Copies of
the Probity Leases, all of which have previously been provided to SIMEX, are
correct and complete copies thereof. All of the Probity Leases are
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in full force and effect, unimpaired in any material respect by any act or
omission of Probity, and are valid, binding and enforceable against Probity and,
to the knowledge of Xxxxxxx, against the other parties thereto, in accordance
with their respective terms, and there is not under any such Probity Lease any
existing default by Probity, or, to the knowledge of Xxxxxxx, by any other party
thereto, or any condition or event that, with notice or lapse of time or both,
would constitute a default. Probity has not received notice that the lessor of
any of the Probity Leases intends to cancel, suspend or terminate such Probity
Lease or to exercise or not exercise any option thereunder.
2.14. Contracts. Schedule 2.14 sets forth a correct and complete
list of all contracts, agreements and commitments (whether written or oral) to
which Probity is, directly or indirectly, a party (in its own name or as a
successor in interest), or by which it or any of its properties or assets is
otherwise bound, including any service agreements, customer agreements, supplier
agreements, agreements to lend or borrow money, shareholder agreements,
employment agreements, confidentiality agreements (other than confidentiality
agreements with third parties entered into in the ordinary course of business
which agreements are not individually listed on Schedule 2.14 but which are
included within the definition of Probity Contracts, as herein defined)
noncompetition or non-solicitation agreements, agreements relating to Probity
Intellectual Property Rights and the like (collectively, the "Probity
Contracts"); excepting only those Probity Contracts which involve less than
$25,000 and are cancelable, without penalty, on no more than 90 days' notice.
The aggregate value of all payment obligations and rights to receive payments,
under agreements, contracts and commitments (whether oral or in writing) to
which Probity is a party or by which it or any of its properties or assets is
otherwise bound, and that are not listed on Schedule 2.14, is less than $50,000
(calculating such value by adding together the value of rights and obligations,
and not by determining the net amount thereof).
Except as set forth on Schedule 2.14, correct and complete
copies of all Probity Contracts (or a correct and complete narrative description
of any oral Probity Contract) have previously been provided or made available to
SIMEX. Neither Probity nor, to the knowledge of Xxxxxxx, any other party to any
of the Probity Contracts (i) is in material default under (nor does there exist
any condition that, with notice or lapse of time or both, would cause such a
material default under) any of the Probity Contracts, or (ii) has waived any
right it may have under any of the Probity Contracts, the waiver of which would
have a material adverse effect on the business, assets or financial condition or
prospects of Probity. All of the Probity Contracts constitute the valid and
binding obligations of Probity, and assuming the due authorization, execution
and delivery of such Probity Contract by the other parties thereto, are
enforceable against Probity and, to the knowledge of Xxxxxxx, the other parties
thereto in accordance with their respective terms, subject, in each case, to
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
application relating to or affecting creditors' rights and to general principles
of equity, including principles of commercial reasonableness, good faith and
fair dealing.
2.15. Directors and Officers. Schedule 2.15 sets forth an accurate
list of the name of each director and officer of Probity and the position(s)
held by each.
2.16. Payroll Information. Probity has previously provided SIMEX
with a correct and complete copy, in all material respects, of the payroll
report of Probity dated March 31, 2003, showing all current employees of Probity
and their current levels of compensation, other than
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bonuses and other extraordinary compensation, all of which bonuses and other
extraordinary compensation are set forth in Schedule 2.16. Probity has paid all
compensation required to be paid to its employees on or prior to the date hereof
other than compensation (and bonuses pursuant to arrangements described in
Schedule 2.16) accrued in the current pay period.
2.17. Litigation. Except as set forth on Schedule 2.17, there is no
suit, action, claim, investigation or proceeding pending or, to the knowledge of
Xxxxxxx, threatened against or affecting Probity or the Probity Business, nor is
there any judgment, decree, injunction or order of any applicable Governmental
Entity or arbitrator outstanding against Probity.
2.18. Employee Benefit Plans/Labor Relations.
(a) Except as disclosed in Schedule 2.18, there are no
employee benefit plans, agreements or arrangements maintained by
Probity, including (i) "employee benefit plans" within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"); (ii) current or deferred compensation, pension,
profit sharing, vacation or severance plans or programs; or (iii)
medical, hospital, accident, disability or death benefit plans
(collectively, "Probity Benefit Plans"). All Probity Benefit Plans are
administered in accordance with, and are in material compliance with,
all applicable laws and regulations. No default exists with respect to
the obligations of Probity under any Probity Benefit Plan.
(b) Probity is not a party to any collective bargaining
agreement; no collective bargaining agent has been certified as a
representative of any of the employees of Probity; no representation
campaign or election is now in progress with respect to any employee of
Probity; and there are no labor disputes, grievances, controversies,
strikes or requests for union representation pending, or, to the
knowledge of Xxxxxxx, threatened, relating to or affecting the Probity
Business. To the knowledge of Xxxxxxx, no event has occurred that could
give rise to any such dispute, controversy, strike or request for
representation.
2.19. ERISA.
(a) All Probity Benefit Plans that are subject to ERISA
have been administered in accordance with, and are in material
compliance with, the applicable provisions of ERISA. Each of the
Probity Benefit Plans that is intended to meet the requirements of
Section 401(a) of the Code has been determined by the Internal Revenue
Service to meet such requirements in form within the meaning of such
provision. No Probity Benefit Plan is subject to Title IV of ERISA or
Section 412 of the Code. Probity has not engaged in any nonexempt
"prohibited transactions," as such term is defined in Section 4975 of
the Code or Section 406 of ERISA, involving Probity Benefit Plans that
would subject Probity to the penalty or tax imposed under Section
502(i) of ERISA or Section 4975 of the Code. Probity has not engaged in
any transaction described in Section 4069 of ERISA within the last five
years. Except as otherwise set forth herein, disclosed in Schedule 2.19
or pursuant to the terms of the Probity Benefit Plans, neither the
execution and delivery hereof nor the consummation of the transactions
contemplated hereby will (i) result in any payment (including
severance, unemployment compensation
10
or golden parachute) becoming due to any director or other employee of
Probity, (ii) increase any benefit otherwise payable under any Probity
Benefit Plan or (iii) result in the acceleration of the time of payment
or vesting of any such benefit to any extent.
(b) No notice of a "reportable event," within the meaning
of Section 4043 of ERISA, for which the 30-day reporting requirement
has not been waived, has been required to be filed for any Probity
Benefit Plan that is an "employee pension benefit plan" within the
meaning of Section 3(2) of ERISA and that is intended to meet the
requirements of Section 401(a) of the Code, or by any entity that is
considered one employer with Probity under Section 4001 of ERISA or
Section 414 of the Code, within the 12-month period ending on the
Closing Date. Probity has not incurred any liability to the Pension
Benefit Guaranty Corporation in respect of any Probity Benefit Plan
that remains unpaid.
2.20. Taxes. Probity has heretofore furnished SIMEX with a correct
and complete copy of all of its Tax Returns for the previous two (2) years.
Except as set forth on Schedule 2.20:
(a) Probity has duly and timely filed all federal, state
and local income, franchise, excise, real and personal property and
other tax returns and reports, including extensions, required to have
been filed by Probity on or prior to the Closing Date (the "Tax
Returns"). All Tax Returns were accurate and complete in all material
respects. Probity has duly and timely paid all taxes and other
governmental charges, and all interest and penalties with respect
thereto, required to be paid by Probity (whether by way of withholding
or otherwise) to any federal, state, local or other taxing authority
(except to the extent the same are being contested in good faith, and
adequate reserves therefor have been provided in the Probity Financial
Statements). As of the Closing Date, all deficiencies proposed as a
result of any audit have been accrued for, paid or settled.
(b) Probity is not a party to, or bound by, or otherwise
in any way obligated under, any tax sharing or similar agreement.
(c) Probity has not consented to have the provisions of
Section 341(f)(2) of the Code (or comparable state law provisions)
apply to it, and Probity has not agreed or been requested to make any
adjustment under Section 481(c) of the Code by reason of a change in
accounting method or otherwise.
2.21. Compliance with Applicable Laws. Probity holds all material
permits, licenses, variances, exemptions, orders and approvals of all
Governmental Entities necessary to own, lease or operate all of the assets and
properties of Probity, as appropriate, and to carry on the Probity Business as
now conducted (the "Probity Permits"). To the knowledge of Xxxxxxx, Probity is
in material compliance with all applicable laws, ordinances and regulations and
the terms of the Probity Permits. Except as set forth on Schedule 2.21, no
Consent or other action shall be required with respect to any of the Probity
Permits as a result of the execution of this Agreement or the consummation of
the transactions contemplated hereby (including the Exchange). Schedule 2.21
sets forth a correct and complete list of all Probity Permits, correct and
complete copies of which have previously been provided to or made available to
SIMEX.
11
2.22. Brokers. Except as set forth on Schedule 2.22, no broker or
finder is entitled to any broker's, banker's or finder's fee or other commission
in connection with the transactions contemplated hereby as a result of
arrangements made by or on behalf of Probity.
2.23. Environmental Matters.
(a) To the knowledge of Xxxxxxx, no real property
currently or formerly owned or operated by Probity is contaminated with
any Hazardous Substance (as hereinafter defined).
(b) Probity is not a party to any litigation or
administrative proceeding nor, to the knowledge of Probity, is any
litigation or administrative proceeding threatened against it, that, in
either case, asserts or alleges that Probity (i) violated any
Environmental Law (as hereinafter defined); (ii) is required to clean
up, remove or take remedial or other responsive action due to the
disposal, deposit, discharge, leak or other release of any Hazardous
Substance; or (iii) is required to pay all or a portion of the cost of
any past, present or future cleanup, removal or remedial or other
action that arises out of or is related to the disposal, deposit,
discharge, leak or other release of any Hazardous Substance.
(c) To the knowledge of Xxxxxxx, there are not now nor
have there previously been tanks or other facilities on, under, or at
any real property owned, leased, used or occupied by Probity containing
materials that, if known to be present in soil or ground water, would
require cleanup, removal or other remedial action under Environmental
Law.
(d) Probity is not subject to any judgment, order or
F citation related to or arising out of any Environmental Law and, to
the knowledge of Xxxxxxx, has not been named or listed as a potentially
responsible party by any Governmental Entity in a matter related to or
arising out of any Environmental Law.
(e) For purposes hereof, (i) the term "Environmental Law"
means any federal, state or local law (including statutes, regulations,
ordinances, codes, rules, judicial opinions and other governmental
restrictions and requirements) relating to the discharge of air
pollutants, water pollutants, noise, odors or process waste water, or
otherwise relating to the environment or hazardous or toxic substances;
and (ii) the term "Hazardous Substance" means any toxic or hazardous
substance that is regulated by or under authority of any Environmental
Law, including any petroleum products, asbestos or polychlorinated
biphenyls.
2.24. Interest in Customers, Suppliers and Competitors. Except as
provided in Schedule 2.24, no officer, director, shareholder or employee of
Probity and no family member (including a spouse, sibling or lineal descendent
of any of the foregoing), has any direct or indirect material interest in any
material customer, supplier or competitor of Probity, or in any Person from whom
or to whom Probity leases any real or personal property, or in any other Person
with whom Probity is doing business whether directly or indirectly (including as
a debtor
12
or creditor), whether in existence as of the Closing Date or proposed, other
than the ownership of stock of publicly traded corporations.
2.25. Accounts Receivable. All accounts, notes, contracts and other
receivables of Probity (collectively, "Probity Accounts Receivable") were
acquired by Probity in the ordinary course of business arising from bona fide
transactions. Other than Probity Accounts Receivable that are recorded in
connection with the booking of deferred revenue that has not yet been recognized
and solely for which and to the extent that the applicable services to be
performed with respect to such deferred revenue have not yet, and as of the
Effective Time, will not yet have been performed by Probity, there are no
set-offs, counterclaims or disputes asserted with respect to any Probity
Accounts Receivable that would result in claims in excess of the reserve for bad
debts other than set forth on the Probity Financial Statements and, subject to
the foregoing, all Probity Accounts Receivable are collectible in full. Probity
has previously furnished SIMEX with a correct and complete aging report,
prepared as of March 31, 2003, showing the time elapsed since invoice date for
all Probity Accounts Receivable, and corresponding reserves for bad debts, as of
such date.
2.26. Accounts Payable. Except as set forth on Schedule 2.26, all
accounts, notes, contracts and other amounts payable of Probity (collectively,
"Probity Accounts Payable") are currently within their respective terms, and are
neither in default nor otherwise past due by more than 90 days. Probity has
previously furnished SIMEX with a correct and complete aging report, prepared as
of March 31, 2003, showing the time elapsed since invoice date for all Probity
Accounts Payable.
2.27. Insurance. Probity currently maintains, in full force and
effect, all insurance policies that are required or appropriate to be maintained
for the conduct of the Probity Business or the ownership of Probity's property
(both real and personal) (collectively, the "Probity Insurance Policies"). The
Probity Insurance Policies are listed on Schedule 2.27, and correct and complete
copies of all Probity Insurance Policies have previously been provided to SIMEX.
Probity (a) is not in default regarding the provisions of any Probity Insurance
Policy; (b) has paid all premiums due thereunder; and (c) has not failed to
present any notice or material claim thereunder in a due and timely fashion.
2.28. Bankruptcy. Probity has not filed a petition or request for
reorganization or protection or relief under the bankruptcy laws of the United
States or any state or territory thereof, made any general assignment for the
benefit of creditors, or consented to the appointment of a receiver or trustee,
including a custodian under the United States bankruptcy laws, whether such
receiver or trustee is appointed in a voluntary or involuntary proceeding.
2.29. Stockholder Acknowledgements. Each of the Stockholders
acknowledge that they (a) are an "accredited investor" as such term is defined
under the Securities Act, and (b) have had an adequate opportunity to obtain and
review SIMEX's public filings with the Securities Exchange Commission ("SEC")
("SIMEX's Public Information"), including its reports and Forms 10-K and 10-Q
for the periods January 1, 2000 through December 31, 2002, and such other
information, and to ask such questions from representatives of SIMEX, as would
be deemed necessary to permit such Stockholder to evaluate the merits and risks
of his, her or its investment in SIMEX and to make an informed investment
decision with respect to the
13
transactions contemplated hereby. Probity further acknowledges that the SIMEX
Stock has not been registered under either the Securities Act or applicable
state securities law, and SIMEX will be relying upon the foregoing
representations in issuing the SIMEX Stock in accordance with this Agreement.
2.30. Disclosure. No statement of fact by Probity contained herein
and no written statement of fact furnished by Probity to SIMEX or Sub in
connection herewith contains any untrue statement of a material fact or omits to
state any material fact necessary in order to make the statements herein or
therein contained, in light of the circumstances in which they were made, not
misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SIMEX
SIMEX represents and warrants to the Stockholders as follows, which
representations and warranties shall survive the Closing in accordance with
Section 7.1. For purposes of this Article II, "SIMEX" shall include its
Subsidiaries.
3.1. Organization and Qualification. SIMEX is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. Each of SIMEX has the requisite corporate
power and authority to carry on its business as it is now being conducted and is
duly qualified or licensed to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or held under lease or
the nature of its activities makes such qualification necessary, except where
the failure so to qualify could not have a material adverse effect on the
business, properties or assets of SIMEX. Complete and correct copies of the
Certificate of Incorporation and Bylaws of SIMEX as in effect on the date hereof
will be attached, respectively, to a Closing and incumbency certificate to be
delivered at Closing, substantially in the form of Exhibit "C" ("SIMEX's Closing
Certificate").
3.2. Authority. SIMEX has the necessary corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery hereof and the
consummation of the transactions contemplated hereby by each of SIMEX have been
duly and validly authorized and approved by its board of directors, and no other
corporate or shareholder proceedings on the part of either SIMEX, or its
respective board of directors or shareholders, are necessary to authorize or
approve this Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly executed and delivered by SIMEX, and assuming the
due authorization, execution and delivery hereof by the Stockholders,
constitutes the valid and binding obligation of SIMEX, enforceable against it in
accordance with its terms, subject, in each case, to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general application relating to
or affecting creditors' rights and to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing. This
Agreement and the transactions contemplated hereby, including the issuance of
shares of SIMEX Common Stock and Preferred Stock pursuant to the Exchange, do
not require the approval of the holders of any (a) shares of capital stock of
SIMEX or (b) voting securities of SIMEX.
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3.3. No Conflicts, Required Filings and Consents. Except as set
forth on Schedule 3.3, none of the execution and delivery of this Agreement by
SIMEX, the consummation by SIMEX of the transactions contemplated hereby, or
compliance by SIMEX with any of the provisions hereof, will:
(a) conflict with or violate the Certificate of
Incorporation or Bylaws of SIMEX;
(b) result in a violation of any statute, ordinance,
rule, regulation, order, judgment or decree applicable to SIMEX, or by
which SIMEX or its properties or assets may be bound or affected;
(c) result in a violation or material breach of, or
constitute a material default (or an event that, with notice or lapse
of time or both, would become a material default) under, or give to any
other party any material rights of termination, amendment, acceleration
or cancellation of, any note, bond, mortgage, indenture, or any
material contract, agreement, arrangement, lease, license, permit,
judgment, decree, franchise or other instrument or obligation to which
SIMEX is a party or by which SIMEX or its properties may be bound or
affected;
(d) result in the creation of any Lien on any of the
property or assets of SIMEX; or
(e) require any material Consent of (i) any Governmental
Entity (except for compliance with any applicable requirements of any
applicable securities laws with the SEC, or (ii) any other Person.
3.4. Litigation. Except as set forth on Schedule 3.4 or in SIMEX's
Public Information, there is no suit, action, claim, investigation or proceeding
pending or, to the knowledge of SIMEX, threatened against or affecting SIMEX,
nor is there any judgment, decree, injunction or order of any applicable
Governmental Entity or arbitrator outstanding against SIMEX that, either
individually or in the aggregate, would have a material adverse effect on the
assets, business or financial condition of SIMEX.
3.5. Brokers. No broker or finder is entitled to any broker's or
finder's fee in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of SIMEX.
3.6. SIMEX Stock. The SIMEX Stock to be issued to the Stockholders
in the Exchange will, upon issue in accordance with the terms hereof, (a) rank
pari passu or, in the case of the Preferred Stock, senior to fully paid Common
Stock of SIMEX at Closing, (b) not be registered under either the Securities Act
or applicable state securities law, and (c) the Preferred Stock shall be subject
to the Lock-Up Agreement.
3.7. Board of Directors. The board of directors of SIMEX has, by
written consent or other action, adopted and approved this Agreement and the
transactions contemplated hereby and thereby (including the Exchange).
15
3.8. Disclosure. No statement of fact by SIMEX contained herein and
no written statement of fact furnished by SIMEX to Probity or the Stockholders
in connection herewith contains any untrue statement of a material fact or omits
to state any material fact necessary in order to make the statements herein or
therein contained, in light of the circumstances in which they were made, not
misleading.
3.9. Absence of Changes. Except as set forth on Schedule 3.9 or in
SIMEX's Public Information, since SIMEX's most recent Form 10-K filed with the
SEC on April ___, 2003, there have been no changes in the operations, earning,
assets, properties, business or financial condition of SIMEX, which changes
could reasonably be expected to have a Material Adverse Effect on SIMEX, except,
however, for any such change that SIMEX discloses to the Stockholders in
accordance herewith. For the purpose of this provision "Material Adverse Effect"
excludes any such change that is attributable to or results from (i) the public
announcement of the transactions contemplated hereby; (ii) changes in general
economic conditions or changes affecting the industry in which SIMEX operates,
or capital markets, generally; (iii) the possible adoption by SIMEX of a new
employee stock option plan; or (iv) changes in the trading prices of SIMEX Stock
not caused primarily by material changes in the operations, earnings, assets,
properties, business or financial condition of SIMEX.
ARTICLE IV
ADDITIONAL AGREEMENTS
4.1. Conduct of Business by Probity Pending the Exchange. From and
after the date hereof, prior to the Effective Time, except as contemplated
hereby, unless SIMEX shall otherwise agree in advance in writing, Probity shall
carry on its business in the usual and ordinary course in substantially the same
manner as heretofore conducted, use commercially reasonable efforts to preserve
intact its present business organization, keep available the services of its
employees and preserve its relationships with customers, suppliers, licensors,
licensees, distributors and others having business dealings with Probity to the
end that its goodwill and on-going businesses shall not be impaired in any
material respect at the Effective Time. Without limiting the generality of the
foregoing, and except as contemplated hereby, unless SIMEX shall otherwise agree
in advance in writing, prior to the Effective Time, Probity shall not, directly
or indirectly:
(a) (i) declare, set aside, or pay any dividend on, or
make any other distribution in respect of, any of its capital stock,
(ii) split, combine or reclassify any of its capital stock, or issue or
authorize the issuance of any other securities in respect of, in lieu
of or in substitution for, shares of its capital stock, or (iii)
purchase, redeem or otherwise acquire, any share of capital stock of
Probity or any other equity security thereof or any right, warrant, or
option to acquire any such share or other security, or waive any right
to do any of the foregoing;
(b) other than in connection with the exercise of any
option or warrant outstanding, and in accordance with the terms
existing, on the date of this Agreement, issue, deliver, sell, pledge
or otherwise encumber any share of its capital stock, any other voting
security issued by Probity or any security convertible into, or any
right, warrant or
16
option to acquire any such share or voting security, grant any option,
warrant or other stock right, or alter or allow the acceleration of
vesting or exercise of any outstanding option, warrant or such right;
(c) amend its Articles of Incorporation, Bylaws or other
comparable organizational documents;
(d) acquire or agree to acquire (i) by merging or
consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any Entity or
division thereof, or (ii) any assets that are material to Probity,
individually or in the aggregate;
(e) subject to a Lien or sell, lease or otherwise dispose
of any of its properties or material assets, or license or transfer any
Probity Intellectual Property Right (except for non-exclusive licenses
in the ordinary course of business consistent with past practices), or
revalue any assets or (except as required by GAAP) make any change in
accounting methods, principles or practices;
(f) incur any indebtedness for borrowed money or
guarantee any such indebtedness of another Person or issue or sell any
debt security of Probity, guarantee any debt security of another Person
or enter into any "keep well" or other agreement to maintain the
financial condition of another Person, make any loan, advance or
capital contribution to, or investment in, any other Person, or settle
or compromise any material claim or litigation;
(g) pay any bonus to any employee, officer or director on
or after the date hereof other than in the ordinary course of Probity's
business consistent with past practices except as set forth in Section
4.14;
(h) enter into any "golden parachute" or other severance
arrangement with any employee, officer or director, or increase or
otherwise change the rate or nature of the compensation (including
wages, salaries, benefits and bonuses) payable to any employee, officer
or director, except as set forth in Section 7.1(g) above or pursuant to
existing compensation and fringe benefit plans, practices and
arrangements that have been disclosed in writing to SIMEX, or enter
into, renew, or allow the renewal of, any employment, consulting or
other similar agreement with any employee, officer or director, or
amend or modify any Probity Benefit Plan in any material respect or
adopt any other such plan;
(i) enter into any new contract or agreement (other than
a customer agreement entered into in the ordinary course of business
consistent with past practices), or lease, involving an obligation in
excess of $25,000, or amend, waive any material default under,
terminate (except for such as terminate by their own terms) or modify
in any material respect any Probity Contract or Lease;
(j) offer or make any commitments to give any discounts
or free services to any third party under or in connection with any
contract, other than in the ordinary course of business, that would
materially decrease Probity's profits;
17
(k) pay, accrue or incur transaction costs or expenses
(such as brokerage, accounting and legal fees) resulting from, or
arising in connection with, this Agreement, the Exchange or any of the
other transactions contemplated hereby; or
(l) authorize any of, or commit or agree to take any of,
the foregoing actions.
4.2. Conduct of Business by SIMEX Pending the Exchange. From and
after the date hereof, prior to the Effective Time, except as contemplated
hereby, SIMEX shall carry on its business in the usual and ordinary course in
substantially the same manner as heretofore conducted, keep available the
services of its employees and preserve its relationships with customers,
suppliers, licensors, licensees, distributors and others having business
dealings with SIMEX to the end that its goodwill and on-going businesses shall
not be impaired in any material respect at the Effective Time.
4.3. Actions Regarding SIMEX Stock. Prior to the Effective Time,
SIMEX shall take all such actions as are necessary to ensure that the SIMEX
Stock to be issued under this Agreement as Exchange Consideration is, subject to
this Agreement, issued and allotted at Closing, or at such later date with
respect to Lock Up Holdback Shares in accordance with Section 1.9, to the
Stockholders who are receiving such SIMEX Stock.
4.4. Access to Information. From the date hereof through the
Effective Time, Probity shall afford to SIMEX and SIMEX's accountants, counsel
and other representatives reasonable access during normal business hours (and at
such other times as the parties may mutually agree) upon reasonable prior notice
and approval of Probity, which shall not be unreasonably withheld, to its
properties, books, contracts, commitments, records and personnel and, during
such period, shall furnish promptly to SIMEX all information concerning its
business, properties and personnel as SIMEX may reasonably request. SIMEX and
its accountants, counsel and other representatives shall, in the exercise of the
rights described in this Section 4.4, not unduly interfere with the operation of
the business of Probity. SIMEX and its agents shall maintain the confidentiality
of all information produced or disclosed pursuant to this Section 4.4, on the
terms and conditions of any non-disclosure agreement between SIMEX and Probity.
4.5. Filings; Tax Elections. Probity shall promptly provide SIMEX
with copies of all filings made by Probity with any Governmental Entity in
connection herewith and the transactions contemplated hereby. Probity shall,
before settling or compromising any material income tax liability of Probity,
consult with SIMEX and its advisors as to the positions and elections that will
be taken or made with respect to such matter.
4.6. Public Announcements. The parties agree that, except as may
otherwise be required to comply with applicable laws and regulations (including
the rules of the SEC), public disclosure of the transactions contemplated hereby
shall be made only upon or after the consummation of the Exchange. Any such
disclosure shall be coordinated by SIMEX, and Probity shall not directly or
indirectly make any such disclosure without the prior written consent of SIMEX.
4.7. Transfer and Gains Taxes and Certain Other Taxes and Expenses.
SIMEX agrees that, to the extent it is legally able to do so and except as
otherwise provided herein, Probity will
18
pay all documentary stamps, filing fees, recording fees and sales and use taxes,
if any, and any penalties or interest with respect thereto, payable in
connection with consummation of the Exchange.
4.8. Options; Warrants. Probity hereby covenants and agrees that at
the Effective Time, all of the Probity Stock Rights (all of which are set forth
on Schedule 2.3(b)), shall either have been exercised, and the exercise price
paid therefor shall have been paid to Probity, or have been properly terminated
and all rights and obligations thereunder shall have been extinguished.
4.9. Further Assurances. From time to time after the Effective
Time, upon the reasonable request of any party hereto, the other party or
parties hereto shall execute and deliver or cause to be executed and delivered
such further instruments, and take such further action, as the requesting party
may reasonably request in order to effectuate fully the purposes, terms and
conditions hereof, at the sole cost of the requesting party, except as otherwise
provided in Article VI.
4.10. Exclusivity. Probity, on behalf of itself and each of its
officers, directors and employees, and the Stockholders, covenant and agree
that, until such time as this Agreement has been terminated in accordance with
Section 6.1, it and each of them shall forebear directly or indirectly
negotiating, soliciting or accepting any offer with any other Person to
purchase, acquire, option, or merge or combine with, as applicable, Probity, any
of the Probity Stock, or the Probity Business, or any interest in any of the
foregoing. Without limiting the generality of the foregoing:
(a) From and after the date hereof until the Effective
Time or termination of this Agreement pursuant to Section 6.1, Probity
shall not, nor will it authorize or permit any of its officers,
directors, affiliates, shareholders or employees or any investment
banker, attorney or other advisor or representative retained by any of
them to, directly or indirectly, (i) solicit, initiate, encourage or
induce the making, submission or announcement of any Acquisition
Proposal (as hereinafter defined), (ii) participate in any discussions
or negotiations regarding, or furnish to any person any non-public
information with respect to, or take any other action to facilitate any
inquiries or the making of any proposal that constitutes or may
reasonably be expected to lead to, any Acquisition Proposal, (iii)
engage in discussions with any person with respect to any Acquisition
Proposal, except as to the existence of these provisions, (iv) approve,
endorse or recommend any Acquisition Proposal or (v) enter into any
letter of intent or similar document or any contract, agreement or
commitment contemplating or otherwise relating to any Acquisition
Transaction. Probity shall immediately cease any and all existing
activities, discussions or negotiations with any parties conducted
heretofore with respect to any Acquisition Proposal. Without limiting
the foregoing, it is understood that any violation of the restrictions
set forth in the preceding two sentences by any officer, director or
employee of Probity or any of its subsidiaries or any investment
banker, attorney or other advisor or representative of Probity or any
of its subsidiaries shall be deemed to be a breach of this Section 7.10
by Probity.
(b) For purposes of this Agreement, "Acquisition
Proposal" shall mean any bona fide offer or proposal (other than an
offer or proposal by SIMEX) relating to any
19
Acquisition Transaction. For the purposes of this Agreement,
"Acquisition Transaction" shall mean any transaction or series of
related transactions other than the transactions contemplated by this
Agreement involving: (A) any acquisition or purchase from Probity by
any person or "group" (as defined under Section 13(d) of the Exchange
Act and the rules and regulations thereunder) of more than a 15%
interest in the total outstanding voting securities of Probity or any
of its subsidiaries or any tender offer or exchange offer that if
consummated would result in any person or "group" (as defined under
Section 13(d) of the Exchange Act and the rules and regulations
thereunder) beneficially owning 15% or more of the total outstanding
voting securities of Probity or any of its subsidiaries or any
Exchange, consolidation, business combination or similar transaction
involving Probity pursuant to which the shareholders of Probity
immediately preceding such transaction hold less than 85% of the equity
interests in the surviving or resulting entity of such transaction; (B)
any sale, lease (other than in the ordinary course of business),
exchange, transfer, license (other than in the ordinary course of
business), acquisition or disposition of more than 50% of the assets of
Probity; or (C) any liquidation or dissolution of Probity.
4.11. Corporate Requirements. Probity and SIMEX each covenants and
agrees that, prior to and after the Effective Time, it shall comply with any and
all statutory requirements, whether under the GBCC or otherwise, and with any
requirements under its Articles of Incorporation, Bylaws or any other governing
documents, applicable to this Agreement and the transactions contemplated hereby
(including the Exchange), including, without limitation, any requirements
relating to the rights of, or the obligations of such party to, any of its
shareholders.
4.12. Probity Shareholders Meeting. Subject to applicable law,
Probity shall cause a special meeting of the shareholders of Probity (the
"Probity Shareholders Meeting") to be duly called and held as soon as reasonably
practicable for the purpose of voting on this Agreement and the transactions
contemplated herein. In connection with the Probity Shareholders Meeting,
Probity will (i) use its reasonable best efforts to obtain the approval of this
Agreement and the Exchange and (ii) otherwise comply with all legal requirements
applicable to the Probity Shareholders Meeting. Probity's Board of Directors
shall recommend approval of this Agreement and the transactions contemplated
herein by Probity shareholders. Unless this Agreement shall have been terminated
in accordance with its terms, subject to applicable law, Probity shall submit
this Agreement and the Exchange to the Probity shareholders (the "Probity Voting
Shareholders") for their approval at the Probity Shareholders Meeting. In lieu
of a special meeting, Probity may, in accordance with all applicable laws,
obtain the necessary shareholder vote by written consent of its shareholders.
4.13. Tax-Free Reorganization. The Exchange is intended to qualify
as a tax-free reorganization under Section 368 of the Code, and each of the
parties hereto covenants and agrees to cooperate in order to qualify the
transaction as a tax-free reorganization, to report the Exchange for federal and
state income tax purposes in a manner consistent with such characterization, and
to take or not fail to take any action that would cause the Exchange to fail to
qualify as a reorganization within the meaning of Section 368(a) of the Code.
Probity, on one hand, and SIMEX, on the other hand, shall execute and deliver to
legal counsel of SIMEX and Probity, respectively, certificates in such form and
at such time or times as reasonably requested by such legal counsel in
connection with the tax effects of the transactions contemplated hereby.
20
4.14. New Directors of SIMEX. Immediately following the Closing,
SIMEX shall cause Xxxx Xxxx Xxxxxxx, L. Xxxxx Xxxxxxx and Kyu Xxxx Xxxx to be
elected to or otherwise appointed to the Board of Directors of SIMEX.
Accordingly, at such time, the Board of Directors of SIMEX shall consist of Kyu
Xxxx Xxxx, Xxxxx Xxxxxxx, X. Xxxxxx Xxxx, Xxxx Xxxx Xxxxxxx and L. Xxxxx
Xxxxxxx.
4.15. Stock Option Plan. Immediately following the Effective Time,
the Board of Directors of SIMEX will approve the amendments to its stock option
plan set forth on Exhibit "D", which the Board of Directors will recommend to
SIMEX's stockholders at its next annual meeting.
4.16. Registration of Affiliate Shares. If at any time it shall be
determined by any Governmental Entity that any of the shares of SIMEX held by
persons who are affiliates or were affiliates of SIMEX prior to the Closing are
"blank check" shares and require registration in order to be sold, SIMEX agrees
to register such shares within 180 days from the Effective Time. Notwithstanding
the foregoing, SIMEX shall have no obligation to register any shares that are or
may become eligible for resale under Rule 144 of the Securities Act of 1933.
4.17. Promissory Notes Between SIMEX and Kyros, LLC and Remote
Business Management, LLC. Immediately after the Closing, SIMEX shall release the
guarantee agreement by Xxxxxxx executed in connection with the Promissory Notes
in the original principal amount of $262,115.00 and $136,490.00, maturing on
June 25, 2003 payable to the order of SIMEX by Kyros, LLC ("Kyros") and Remote
Business Management, LLC ("RBM"). Notwithstanding the foregoing, Kyros and RBM
shall remain liable to SIMEX under the Promissory Notes.
4.18. Conversion of Accounts Receivable by Woojo. Immediately after
the Closing, SIMEX shall agree to issue to Woojo 928,006 shares of its Class A
Preferred Stock in exchange for its accounts receivable from Probity remaining
at the time of the Closing. The Class A Preferred Stock of SIMEX shall have
those rights, preferences and limitations set forth in the Designation of Class
A Preferred Stock attached hereto as Exhibit "E".
4.19. Stock Option Agreements. SIMEX agrees to reserve that number
of shares of SIMEX set forth on Exhibit "F" for issuance to employees, officer
directors or consultants of SIMEX on a date subsequent to the Closing to be
determined by the Board of Directors of SIMEX or its Compensation Committee.
4.20. Rule 145 Agreements. Prior to the Effective Time, Probity
shall obtain and deliver to SIMEX Rule 145 Agreements (in the form attached
hereto as Exhibit "G") from each person who may be deemed an affiliate of
Probity prior to or at the Effective Time. SIMEX shall place the appropriate
Rule 145 legend on the stock certificates representing SIMEX Common Stock issued
in the Exchange to such affiliates.
4.21. Section 16. SIMEX shall, prior to the Effective Time, cause
SIMEX's Board of Directors to approve the issuance of the shares of SIMEX Common
Stock in connection with the Exchange, with respect to any persons associated
with Probity who upon the Effective Time will become subject to the reporting
requirements of Section 16 of the Exchange Act to the extent
21
necessary for such issuance to be an exempt acquisition pursuant to Rule 16b-3
of the Securities Exchange Act of 1934, provided, however, that SIMEX shall not
be deemed to have violated this covenant if Probity does not provide SIMEX's
Board of Directors at least five (5) business days prior to the Effective Time,
all information reasonably requested by SIMEX for the purpose of effecting such
exemption.
4.22. Series B Preferred Stock. Immediately prior to the Effective
Time, SIMEX agrees to designate the terms of the Series B Preferred Stock as
substantially set forth at Exhibit "E". SIMEX agrees to take all reasonable
steps necessary to cause its shareholders to approve the authorization of a
sufficient number of shares of SIMEX Common Stock to be reserved for conversion
of shares of Series B Preferred Stock in accordance with their terms. Such
shareholder proposal shall be presented to the SIMEX shareholders at its next
annual meeting of shareholders.
4.23. Indemnification.
(a) The parties hereto hereby agree to indemnify, defend
and hold harmless one another and their respective parents and
subsidiaries, and all of their respective shareholders, officers,
directors, employees, successors and assigns, against any claims,
demands, actions, suits, proceedings, judgments, costs (including
reasonable outside attorneys' fees and expenses), loss, liability or
damage arising out of or in connection with any breach of any
representation, warranty, covenant or agreement made or to be performed
pursuant to this Agreement
(b) OTHER THAN PURSUANT TO THE PARTIES' RESPECTIVE
INDEMNIFICATION OBLIGATIONS SET FORTH HEREIN, NO PARTY SHALL BE LIABLE
TO ANY OTHER PARTY, ITS AGENTS, AFFILIATES, CUSTOMERS, OR ANY OTHER
PERSONS, FOR ANY LOST PROFITS, OR ANY INCIDENTAL, INDIRECT, OR
CONSEQUENTIAL DAMAGES, FOR THE BREACH OF ANY TERMS OR CONDITIONS OF
THIS AGREEMENT.
ARTICLE V
CONDITIONS PRECEDENT
5.1. Conditions to Obligations of Probity to Effect the Exchange.
The obligations of Probity to effect the Exchange shall be subject to the
fulfillment at or prior to the Effective Time of the following conditions:
(a) SIMEX shall have performed in all material respects
their respective agreements contained herein required to be performed
at or prior to the Effective Time, and the representations and
warranties of SIMEX contained herein shall be true in all material
respects when made and (except for representations and warranties made
as of a
22
specified date, which need only be true as of such date) at and as of
the Effective Time as if made at and as of such time, except as
contemplated hereby;
(b) the appropriate officers of SIMEX shall have executed
and delivered to Probity at the Closing, SIMEX's Closing Certificate;
(c) Probity shall have received a corporate certificate
of existence for SIMEX and a copy of the Articles of Incorporation for
SIMEX, as certified by the Secretary of State of Georgia; and
(d) Probity shall have received from SIMEX such other
documents as Probity's counsel shall have reasonably requested, in form
and substance reasonably satisfactory to Probity's counsel.
5.2. Conditions to Obligations of SIMEX to Effect the Exchange. The
obligations of SIMEX to effect the Exchange shall be subject to the fulfillment,
at or prior to the Effective Time, of the following conditions:
(a) Probity and the Stockholders shall have performed in
all material respects their respective agreements contained herein, and
the representations and warranties of Probity and the Stockholders
contained herein shall be true in all material respects when made, and
(except for representations and warranties made as of a specified date,
which need only be true as of such date) at and as of the Effective
Time as if made at and as of such time, except as contemplated hereby;
(b) the appropriate officers of Probity shall have
executed and delivered to SIMEX at the Closing, Probity's Closing
Certificate;
(c) Probity shall have obtained or caused to be obtained
all of the Consents, if any, listed on Schedule 5.2(c);
(d) SIMEX shall have received a corporate certificate of
existence for Probity, and a copy of the Articles of Incorporation of
Probity, both as certified by the Secretary of State of Georgia;
(e) SIMEX shall have received evidence reasonably
satisfactory to it that at the Closing the assets and properties used
in the Probity Business are free and clear of all Liens other than
Permitted Liens;
(f) The issuance of SIMEX Stock as Exchange Consideration
as contemplated under this Agreement shall have been duly approved, by
the requisite vote, under applicable law, by SIMEX; and
(g) SIMEX shall have received from Probity or the
shareholders of Probity, as the case may be, such other documents as
SIMEX's counsel shall have reasonably requested, in form and substance
reasonably satisfactory to SIMEX's counsel.
23
(h) Wooju shall have exchanged all of its interest in
Kyros, LLC for shares of Probity Stock.
(i) SIMEX shall have received audited consolidated
financial statements of Probity (in conformity with applicable
regulations of the Securities and Exchange Commission) for the fiscal
year ended December 31, 2002, or, at the sole discretion of SIMEX,
reasonable assurances, satisfactory to SIMEX in its sole discretion,
that Probity will be able to complete such audited consolidated
financial statements within seventy-five (75) days from the Effective
Time.
(j) SIMEX shall have received executed copies of the Lock
Up Agreements and Indemnity Agreements set forth in Sections 1.8 and
1.9 of this Agreement.
(k) SIMEX shall have received an executed copy of the
Stockholders Agreement substantially in the form of Exhibit "H"
attached hereto
(l) SIMEX shall have received executed Rule 145
Agreements from each of Probity's affiliates.
ARTICLE VI
TERMINATION, AMENDMENT AND WAIVER
6.1. Termination. This Agreement may be terminated at any time
prior to the Effective Time:
(a) by mutual written consent of SIMEX and Probity;
(b) by SIMEX, upon a material breach hereof on the part
of Probity or any of the shareholders of Probity which has not been
cured and which would cause any condition set forth in Section 8.2 to
be incapable of being satisfied by May 30, 2003;
(c) by SIMEX or Probity if any court of competent
jurisdiction shall have issued, enacted, entered, promulgated or
enforced any order, judgment, decree, injunction or ruling which
restrains, enjoins or otherwise prohibits the Exchange and such order,
judgment, decree, injunction or ruling shall have become final and
nonappealable; or
(d) by either SIMEX or Probity if the Exchange shall not
have been consummated on or before June 30, 2003 (provided the
terminating party is not otherwise in material breach of its
representations, warranties or obligations hereunder).
6.2. Fees and Expenses. Whether or not the Exchange is consummated,
all costs and expenses in connection with this Agreement and the transactions
contemplated hereby incurred by or on behalf of SIMEX shall be paid by SIMEX and
all such costs and expenses incurred by or on behalf of Probity and its
shareholders shall be paid by the shareholders of Probity.
6.3. Effect of Termination. If this Agreement is terminated
pursuant to Section 9.1, written notice thereof shall promptly be given by the
party electing such termination to the other
24
party and this Agreement shall terminate without further actions by the parties,
and no party shall have any further obligations hereunder or thereunder;
provided that, subject to Section 9.4 hereof, any termination of this Agreement
pursuant to this Section shall not relieve any party from any liability for the
breach of any representation, warranty or covenant contained in this Agreement
or be deemed to constitute a waiver of any remedy available for such breach.
6.4. Amendment. This Agreement may be amended by the mutual
agreement of SIMEX, Sub and Probity at any time before or after the Effective
Time; provided, however, that this Agreement may not be amended except by an
instrument in writing signed on behalf of the parties hereto.
6.5. Waiver. At any time prior to the Effective Time, the parties
hereto may, to the extent permitted by applicable law, (a) extend the time for
the performance of any of the obligations or other acts of any other party
hereto, (b) waive any inaccuracies in the representations and warranties by any
other party contained herein or in any documents delivered by any other party
pursuant hereto and (c) waive compliance with any of the agreements of any other
party or with any conditions to its own obligations contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
ARTICLE VII
GENERAL PROVISIONS
7.1. Survival; Recourse. None of the agreements contained herein
shall survive the Exchange, except that (i) the covenants contained in Article
VII shall survive the Exchange indefinitely (except to the extent a shorter
period of time is explicitly specified therein); and (ii) the representations
and warranties made in Articles V and VI shall survive the Exchange, and shall
survive any independent investigation by the parties, and any dissolution,
Exchange or consolidation of Probity or SIMEX, and shall bind the legal
representatives, assigns and successors of Probity and SIMEX, and, to the extent
provided in the Indemnity Agreement, the Probity Shareholders, for a period of
eighteen (18) months after the Effective Time (other than the representations
and warranties contained in Sections 5.18, 5.19, 5.20 or 5.24, which shall
survive for the applicable statute of limitations).
7.2. Notices. All notices or other communications hereunder shall
be in writing and shall be given (and shall be deemed to have been duly given
upon receipt) by delivery in Person, by facsimile (with confirmation of
receipt), or by registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
If to Probity and the Stockhodlers:
Probity, Inc.
____________________________________
____________________________________
____________________________________
25
Attention: _________________________
Facsimile: _________________________
If to SIMEX: SIMEX Technologies, Inc.
____________________________________
____________________________________
____________________________________
Attention: _________________________
Facsimile: _________________________
With copies to: Xxxxxxxxx Traurig, LLP
0000 Xxxxxxxxx Xxxxxxx
Xxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Facsimile: 000-000-0000
or to such other address as any party may have furnished to the other parties in
writing in accordance with this Section.
7.3. Entire Agreement. The Exhibits and Schedules hereto are
incorporated herein by reference. This Agreement and the documents, schedules
and instruments referred to herein or therein and to be delivered pursuant
hereto or thereto constitute the entire agreement between the parties pertaining
to the subject matter hereof, and supersede all other prior agreements and
understandings, both written and oral, among the parties, or between any of
them, with respect to the subject matter hereof. There are no other
representations or warranties, whether written or oral, between the parties in
connection the subject matter hereof, except as expressly set forth herein.
7.4. Assignments; Parties in Interest. Neither this Agreement nor
any of the rights, interests or obligations hereunder may be assigned by any of
the parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties (and any assignment otherwise shall be
void). This Agreement shall be binding upon and inure solely to the benefit of
each party hereto, and nothing herein, express or implied, is intended to or
shall confer upon any Person not a party hereto any right, benefit or remedy of
any nature whatsoever under or by reason hereof, except as otherwise provided.
7.5. Governing Law. This Agreement shall be governed in all
respects by the laws of the State of Georgia (without giving effect to the
provisions thereof relating to conflicts of law).
7.6. Headings; Interpretation; Incorporation. The descriptive
headings herein are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation hereof. Words
such as "herein," "hereof," "hereto," "hereunder" or the
26
like shall refer to this Agreement as a whole. The words "include" or
"including" shall be by way of example rather than by limitation. The words
"or," "either" or "any" shall not be exclusive. Any pronoun used herein shall
include the corresponding masculine, feminine or neuter forms. The parties
hereto have participated jointly in the negotiation and drafting hereof;
accordingly, no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship hereof. References to
Sections, Articles, Schedules or Exhibits shall, unless the context otherwise
requires, be to Sections, Schedules or Exhibits hereof. The Schedules and
Exhibits hereto are incorporated herein by reference.
7.7. Counterparts. This Agreement may be executed in two or more
counterparts, including by facsimile, each of which shall be deemed an original
but all of which taken together shall constitute a single agreement.
7.8. Severability. If any term or other provision hereof is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions hereof shall nevertheless remain in
full force and effect provided that the economics or legal substance of the
transactions contemplated hereby are not affected in any manner materially
adverse to any party. Upon determination by a court of competent jurisdiction
that any term or other provision hereof is invalid, illegal or incapable of
being enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by applicable law in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to the
extent possible.
7.9. Certain Definitions. As used herein:
(a) the term "Permitted Liens" shall mean (a) Liens for
taxes, assessments or other governmental charges or levies not yet due;
(b) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other Liens imposed by law created in the
ordinary course of business for amounts not yet due; (c) Liens (other
than any Lien imposed by ERISA) incurred or deposits made in the
ordinary course of business in connection with worker's compensation,
unemployment insurance or other types of social security; (d) minor
defects of title, easements, rights-of-way, restrictions and other
similar charges or encumbrances not materially detracting from the
value of the Probity Real Property or interfering with the ordinary
conduct of any of the Probity Business; and (e) those Liens listed on
Schedule 5.9;
(b) (i) any representation or warranty stated to be made
"to the knowledge" of a party shall refer to the knowledge of such
party's executive officers after reasonable inquiry as to the matter in
question; and (ii) any representation or warranty stated to be made "to
the knowledge of Probity" shall refer also to the knowledge, subject to
clause (i) above, of any of the Probity Voting Shareholders; and
(c) the term "Subsidiary" or "Subsidiaries" means any
Entity of which SIMEX or Probity, as the case may be (either alone or
through or together with any other Subsidiary) owns, directly or
indirectly, stock or other equity interests the holders of which are
entitled to more than 50% of the vote for the election of the board of
directors or other governing body of such Entity (including Sub);
provided, however, that with
27
respect to the SIMEX, the terms "Subsidiary" and "Subsidiaries" shall
not include Probity.
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- SIGNATURES ON THE FOLLOWING PAGE -
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IN WITNESS WHEREOF, SIMEX, Probity and the Stockholders have caused
this Agreement to be signed and delivered by their respective duly authorized
officers as of the date first written above.
"Probity"
Probity Investigations, Inc., a Georgia corporation
By: /s/ Xxxx Xxxx Xxxxxxx
------------------------------------------------
Title: President
---------------------------------------------
"SIMEX"
SIMEX Technologies Inc., a Delaware corporation
By: /s/ Xxxxx Xxxxxxx
------------------------------------------------
Title: Chief Executive Officer
---------------------------------------------
"Stockholders"
/s/ Xxxx Xxxx Xxxxxxx
---------------------------------------------------
Xxxx Xxxx Xxxxxxx
Wooju Communications Co., , LTD
By: /s/ Xxx Xxxxx Tae
------------------------------------------------
Title: President
---------------------------------------------
Eutopeon Enterprises, LLC
By: /s/ L. Xxxxx Xxxxxxx
------------------------------------------------
Title: Managing Member
---------------------------------------------
29
LIST OF EXHIBITS
Exhibit A Lock Up Agreement
Exhibit B Probity's Closing Certificate
Exhibit C SIMEX's Closing Certificate
Exhibit D Terms for Management and Employee Incentive Plan
Exhibit E Designations of Class A and Class B Preferred Stock of SIMEX
Exhibit F Stock Option Agreement Shares
Exhibit G Rule 145 Agreement
Exhibit H Stockholders Agreement
LIST OF SCHEDULES
Schedule 1.2 Probity Stock Ownership and SIMEX shares to be issued
Schedule 2.1 Organization and Qualification
Schedule 2.3(b) Probity Stock Rights
Schedule 2.3(c) Liens on Probity Stock
Schedule 2.4 Subsidiaries
Schedule 2.5 Probity Conflicts, Required Filings and Consents
Schedule 2.7 Absence of Changes in Probity
Schedule 2.8 Undisclosed Liabilities
Schedule 2.9 Title to Properties
Schedule 2.10 Equipment
Schedule 2.11(a) Probity Intellectual Property Rights
Schedule 2.11(b) Probity Software
Schedule 2.11(c) Probity Domain Names
Schedule 2.11(d) Assignment and Protection of Intellectual Property
Schedule 2.12 Real Property
Schedule 2.13 Leases
Schedule 2.14 Contracts
Schedule 2.15 Directors and Officers
Schedule 2.16 Payroll Information
Schedule 2.17 Probity Litigation
Schedule 2.18 Employee Benefit Plans
Schedule 2.19 ERISA
Schedule 2.20 Taxes
Schedule 2.21 Compliance with Applicable Laws
Schedule 2.22 Probity Brokers
Schedule 2.24 Interest in Customers, Suppliers and Competitors
Schedule 2.26 Accounts Payable
Schedule 2.27 Insurance
Schedule 3.3 SIMEX Conflicts, Required Filings and Consents
Schedule 3.4 SIMEX Litigation
Schedule 3.9 Absence of Changes in SIMEX
Schedule 5.2(c) Consents Required for Closing
