Exhibit 10
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger ("the Agreement"), dated as of July
20, 2000 is entered into among TECHLITE, Inc., an Oklahoma corporation
("TECHLITE"); SUN AND SUN INDUSTRIES, INC., a California corporation ("SUN
INDUSTRIES"); and the shareholders of SUN INDUSTRIES ("SHAREHOLDERS"), who
execute this Agreement, with reference to the following:
A. TECHLITE is an Oklahoma corporation organized on June 3, 1997.
TECHLITE has authorized common stock of 40 million shares, $0.001 par value, of
which 2,454,347 shares are outstanding, and 10 million shares of preferred
stock, $0.001 par value, of which no shares are outstanding.
B. SUN INDUSTRIES is a California corporation organized on January 20,
1995. SUN INDUSTRIES has authorized common stock of 100,000 shares of Common
Stock, no par value, of which 86,500 shares are outstanding.
C. The respective Boards of Directors of TECHLITE and SUN INDUSTRIES
have deemed it advisable and in the best interests of TECHLITE and SUN
INDUSTRIES that SUN INDUSTRIES be acquired by TECHLITE pursuant to the terms and
conditions set forth in this Agreement.
D. TECHLITE, SUN INDUSTRIES and the SHAREHOLDERS propose to enter into
this Agreement which provides, among other things, that 100% of the outstanding
shares of SUN INDUSTRIES be acquired by a subsidiary corporation of TECHLITE,
herein called "NEWCO," in exchange for shares of TECHLITE and cash, all as more
fully described in the Agreement.
E. The parties desire the transaction to qualify, insofar as possible,
as a tax-free reorganization under Section 368 (a)(2)(D) of the Internal Revenue
Code of 1986, as amended, and this Agreement shall be construed in accordance
with this primary objective.
NOW, THEREFORE, in consideration of the representations, promises,
covenants and undertakings set forth below, the parties hereto agree as follows:
ARTICLE 1
THE ACQUISITION
1.01 TECHLITE shall incorporate NEWCO under the Nevada General
Corporation Act. TECHLITE shall purchase 100 shares of NEWCO's common stock in
exchange for $1,200,000 cash and 600,000 shares of Common Stock of TECHLITE (the
"Initial TECHLITE Merger Shares"). NEWCO shall then merge with SUN INDUSTRIES.
NEWCO shall be the surviving corporation. The terms of the merger are as
follows:
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1.01.1 The shares of capital stock of SUN INDUSTRIES shall be
converted at the effective time of the merger into the
600,000 Initial TECHLITE Merger Shares, pro rata, plus the
right to receive, pro rata, additional shares of TECHLITE
common stock (the "Additional TECHLITE Merger Shares) or
cash, as the case may be, as described in paragraphs
1.01.3, 1.01.4 and 1.01.5 below.
1.01.2 Of the $1.2 million contributed by TECHLITE to NEWCO, $1
million shall be paid to Dr. Sun to repay the $1 million
loan he earlier made to SUN INDUSTRIES and $200,000 shall
be used to pay certain bonuses to key employees of SUN
INDUSTRIES, as set forth in the attached schedule.
1.01.3 $250,000 worth of Additional TECHLITE Merger Shares shall
be contributed by TECHLITE to NEWCO and delivered by NEWCO
to the SHAREHOLDERS on the first anniversary of the
effective date of the merger. The "worth" of an Additional
TECHLITE Merger Share shall be equal to the 50-day moving
average price of TECHLITE's common stock, as reported on
the OTC Bulletin Board or Nasdaq (or such other exchange
on which such shares are then being traded) as calculated
in accordance with the practices of such exchange as of
the date one calendar week before such anniversary date.
TECHLITE shall have the option to contribute up to fifty
percent of such $250,000 in cash to NEWCO to be delivered
by NEWCO to the SHAREHOLDERS in lieu of that amount of the
Additional TECHLITE Merger Shares. If the "worth" of the
Additional TECHLITE Merger Shares is less than $0.50 a
Share, then the SHAREHOLDERS shall have the option to
require TECHLITE to contribute up to fifty percent of such
$250,000 in cash to NEWCO to be delivered by NEWCO to the
SHAREHOLDERS in lieu of that amount of the Additional
TECHLITE Merger Shares.
1.01.4 $750,000 worth of Additional TECHLITE Merger Shares shall
be contributed by TECHLITE to NEWCO and delivered by NEWCO
to the SHAREHOLDERS on the second anniversary of the
effective date of the merger. The "worth" of an Additional
TECHLITE Merger Share shall be equal to the higher of
$0.50 a share or the 50-day moving average price of
TECHLITE's common stock, as reported on the OTC Bulletin
Board or Nasdaq (or such other exchange on which such
shares are then being traded) as calculated in accordance
with the practices of such exchange as of the date one
calendar week before such anniversary date. TECHLITE shall
have the option to contribute up to fifty percent of such
$750,000 in cash to NEWCO to be delivered by NEWCO to the
SHAREHOLDERS in lieu of that amount of the Additional
TECHLITE Merger Shares. If the "worth" of the Additional
TECHLITE Merger Shares is less than $0.50 a Share, then
the SHAREHOLDERS shall have the option to require TECHLITE
to contribute up to fifty percent of such $750,000 in cash
to NEWCO to be delivered by NEWCO to the SHAREHOLDERS in
lieu of that amount of the Additional TECHLITE Merger
Shares.
1.01.5 $2,000,000 worth of Additional TECHLITE Merger Shares
shall be contributed by TECHLITE to NEWCO and delivered by
NEWCO to the SHAREHOLDERS on the third anniversary of the
effective date of the merger. The "worth" of an Additional
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TECHLITE Merger Share shall be equal to the higher of
$0.50 a share or the 50-day moving average price of
TECHLITE's common stock, as reported on the OTC Bulletin
Board or Nasdaq (or such other exchange on which such
shares are then being traded) as calculated in accordance
with the practices of such exchange as of the date one
calendar week before such anniversary date. TECHLITE shall
have the option to contribute up to fifty percent of such
$2,000,000 in cash to NEWCO to be delivered by NEWCO to
the SHAREHOLDERS in lieu of that amount of the Additional
TECHLITE Merger Shares. If the "worth" of the Additional
TECHLITE Merger Shares is less than $0.50 a Share, then
the SHAREHOLDERS shall have the option to require TECHLITE
to contribute up to fifty percent of such $2,000,000 in
cash to NEWCO to be delivered by NEWCO to the SHAREHOLDERS
in lieu of that amount of the Additional TECHLITE Merger
Shares.
1.01.6 NEWCO, a Nevada corporation, shall either be named "Sun &
Sun Industries, Inc." at the time of its incorporation or
renamed "Sun & Sun Industries, Inc." at the time of the
merger. NEWCO shall be maintained as a wholly owned
subsidiary of TECHLITE for at least three years after the
effective date of the merger. From NEWCO's first year of
operations after the effective date of the merger,
$200,000 shall be transferred to TECHLITE. Then, provided
there are accrued profits (measured quarterly) of NEWCO
during this period, NEWCO shall be entitled to retain in
its operating account up to $350,000 in accrued profits in
order to augment NEWCO's existing credit line. During the
second year after the effective date of the merger, an
additional $150,000 in accrued profits may be retained in
NEWCO's operating account (making a total of $500,000) in
order to augment NEWCO's existing credit line.
1.01.7 SHAREHOLDERS shall be entitled to designate two persons to
the boards of directors of TECHLITE and NEWCO during the
three years after the effective date of the merger.
1.01.8 During the three years after the effective date of the
merger, TECHLITE shall activate its current stock option
plan by appointing a stock option committee comprised of
four persons, two of whom shall be the directors
designated by the SHAREHOLDERS pursuant to paragraph
1.01.7 above. All grants of options shall be made by
decisions of the full committee. The senior management of
NEWCO shall participate in grants of options granted by
the committee, which options for NEWCO's senior management
shall vest on the reaching of benchmarks measured by the
performance of NEWCO.
1.01.9 With regard to the election of persons to fill the offices
of chief executive officer, president, chief financial
officer and chief operating officer of TECHLITE by the
board of directors of TECHLITE during the three years
after the effective date of the merger, the directors of
TECHLITE designated by SHAREHOLDERS shall be allowed to
veto two nominees for each position proposed by the other
directors.
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1.01.10With regard to the election of persons to fill the
executive offices of NEWCO and to the hiring of key
management employees of NEWCO, for the three-year period
after the effective date of the merger, these election and
hiring decisions shall be made solely by the directors of
NEWCO designated by the SHARHEOLDERS; provided, however,
that the setting of compensation for these persons shall
be made by the full board of directors of NEWCO.
1.01.11Should this Agreement not be closed, TECHLITE shall pay
to SUN INDUSTRIES 50 percent of SUN INDUSTRIES's costs
incurred to audit SUN INDUSTRIES's financial statements
for its 1998 and 1999 fiscal years. All other costs of
each party shall be borne by the party incurring the
costs.
1.01.12Should TECHLITE fail to do what is required on its part
with regard to the matters set forth above in sections
1.01.7 through 1.01.11, SHAREHOLDERS may exercise their
right under section 8.03 below.
ARTICLE 2
THE CLOSING
2.01 The consummation of the transactions contemplated by this Agreement
(the "Closing") shall take place in the offices of Xxxxxx Xxxx Xxxxxxx & Xxxxxx,
000 Xxxxxx X. Xxxx, Xxxxx 0000, Xxxxxxxx Xxxx, Xxxxxxxx 00000 at 11:00 a.m., one
week after SUN INDUSTRIES delivers to TECHLITE the audited financial statements
required herein or at such other place or date and time as may be agreed to in
writing by TECHLITE and SUN INDUSTRIES.
ARTICLE 3
REPRESENTATION AND WARRANTIES OF TECHLITE
TECHLITE represents and warrants to SUN INDUSTRIES and the SHAREHOLDERS
as follows:
3.01 There are attached as schedules to this Agreement the following
documents, each of which is true and accurate in all material respects and each
of which shall be updated prior to the Closing, as may be required, to make the
information contained in the document continue to be true and accurate in all
material respects:
(a) Financial Statements. Audited financial statements of
TECHLITE including, but not limited to, balance sheets and profit and loss
statements as of January 31, 2000 and January 31, 1999, and unaudited financial
statements as of April 30, 2000. (Schedule A).
(b) Property. A list and description of all property, real or
personal, owned by TECHLITE of a value equal to or greater than $10,000.
(Schedule B).
(c) Liens and Liabilities. A list of all material liens,
encumbrances, easements, security interests or similar interests in or on any of
the assets listed on Schedule A. (Schedule C). A list of all debts, liabilities
and obligations of TECHLITE incurred or owing as of the date of this Agreement.
(Schedule C.1).
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(d) Leases and Contracts. A list describing all material terms of
each lease (whether of real or personal property) and each contract, promissory
note, mortgage, license, franchise, or other written agreement to which TECHLITE
is a party which involves or can reasonably be expected to involve aggregate
future payments or receipts by TECHLITE (whether by the terms of such lease,
contract, promissory note, license, franchise or other written agreement or as a
result of a guarantee of the payment of or indemnity against the failure to pay
same) of $1,000 or more annually during the twelve-month period ended January
31, 2001, or any consecutive twelve-month period thereafter, except any of said
instruments which terminate or are cancelable without penalty during such
twelve-month period. (Schedule D).
(e) Loan Agreements. Copies of all loan agreements and other
documents with respect to obligations of TECHLITE for the repayment of borrowed
money. (Schedule E).
(f) Consents Required. A list of all agreements wherein consent
to the transaction herein contemplated is required to avoid a default
thereunder; or where notice of such transaction is required at or subsequent to
closing, or where consent to an acquisition, consolidation, or sale of all or
substantially all of the assets is required to avoid a default thereunder.
(Schedule F).
(g) Articles and Bylaws. A copy of the Certificate and Articles
of Incorporation and Bylaws of TECHLITE together with all amendments thereto to
the date hereof. (Schedule G).
(h) Shareholders. A list of all persons or entities holding
capital stock of TECHLITE or any rights to subscribe for, acquire, or receive
shares of the capital stock of TECHLITE (whether warrants, calls, options, or
conversion rights), including copies of all stock option plans whether qualified
or non-qualified, and other similar agreements. (Schedule H).
(i). Officers and Directors. A list of all officers and
directors of TECHLITE. (Schedule I).
(j) Salary Schedule. A list of the names and the current salary
rate for each present employee of TECHLITE who received $10,000 or more in
aggregate compensation from TECHLITE whether in salary, bonus or otherwise,
during the fiscal year ended January 31, 2000, or who is presently scheduled to
receive from TECHLITE a salary in excess of $10,000 during the year January 31,
2001, including in each case the amount of compensation received or scheduled to
be received, and a schedule of the hourly rates of all other employees listed
according to departments. (Schedule J).
(k) Litigation. A list of all material civil, criminal,
administrative, arbitration or other such proceedings or investigations
(including without limitations unfair labor practice matters, labor organization
activities, environmental matters and civil rights violations) pending or, to
the knowledge of TECHLITE threatened, which may materially and adversely affect
TECHLITE. (Schedule K).
(l) Tax Returns. Copies of all Federal and state tax returns for
TECHLITE for the last fiscal year. (Schedule L).
(m) Agency Reports. Copies of all material reports or filings
(and a list of the categories of reports or filings made on a regular basis)
made by TECHLITE under ERISA, EEOC, FDA and all other governmental agencies
(federal, state or local) during the last fiscal year. (Schedule M).
(n) Banks. A list, showing (1) the name of each bank in which
TECHLITE has an account or safe deposit box, and (2) the names and addresses of
all signatories. (Schedule N).
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(o) Jurisdictions Where Qualified. A list of all jurisdictions in
which TECHLITE is qualified to do business and is in good standing. (Schedule
O).
(p) Subsidiaries. A list of all subsidiaries of TECHLITE.
(Schedule P). The term "Subsidiary" or "Subsidiaries" shall include
corporations, unincorporated associations, partnerships, joint ventures, or
similar entities in which TECHLITE has an interest, direct or indirect.
(q) Union Matters. A list and description (in all material
respects) of all union contracts and collective bargaining agreements of
TECHLITE, if any. (Schedule Q).
(r) Employee and Consultant Contracts. A list of all employee and
consultant contracts which TECHLITE may have, other than those listed in the
schedule on Union Matters. (Schedule R).
(s) Employee Benefit Plans. Copies of all salary, stock option,
bonus, incentive compensation, deferred compensation, profit sharing,
retirement, pension, group insurance, disability, death benefit or other benefit
plans, trust agreements or arrangements of TECHLITE in effect on the date hereof
or to become effective after the date thereof, together with copies of any
determination letters issued by the Internal Revenue Service with respect
thereto. (Schedule S).
3.02 Organization, Standing and Power. TECHLITE is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Oklahoma with all requisite corporate power to own or lease its properties and
carry on its businesses as are now being conducted.
3.03 Qualification. TECHLITE is qualified and is licensed as a foreign
corporation in the states set forth in Schedule O.
3.04 Capitalization of TECHLITE. The authorized capital stock of
TECHLITE consists of 40 million shares of Common Stock, $0.001 par value, of
which the only shares issued and outstanding are 2,454,347 shares issued to
shareholders listed on Schedule H as of the date thereof, which shares were duly
authorized, validly issued and fully paid and non assessable. There are no
preferred shares currently outstanding. There are no preemptive rights with
respect to the TECHLITE stock. The directors of TECHLITE, however, have
authorized the issuance of an additional 336,633 shares of its Common Stock to
six persons, also listed on Schedule H, which shares have not yet been issued.
3.05 Authority. The execution and delivery of this Agreement and
consummation of the transactions contemplated herein have been duly authorized
by all necessary corporate action, including but not limited to duly and validly
authorized action and approval by the Board of Directors, on the part of
TECHLITE. This Agreement constitutes the valid and binding obligation of
TECHLITE enforceable against it in accordance with its terms, subject to the
principles of equity applicable to the availability of the remedy of specific
performance. This Agreement has been duly executed by TECHLITE and the execution
and transactions contemplated by this Agreement shall not result in any breach
of any terms or provisions of TECHLITE's Certificate and Articles of
Incorporation or Bylaws or of any other agreement, court order or instrument to
which TECHLITE is a party or bound by.
3.06 Absence of Undisclosed Liabilities. TECHLITE has no material
liabilities of any nature, whether fixed, absolute, contingent or accrued, which
were not reflected on the financial statements set forth in Schedule A nor
otherwise disclosed in this Agreement or any of the Schedules or Exhibits
attached hereto.
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3.07 Absence of Changes. Since April 30, 2000, there has not been any
material adverse change in the condition (financial or other wise), assets,
liabilities, earnings or business of TECHLITE, except for changes resulting from
completion of those transactions described in Section 5.01.
3.08 Tax Matters. All taxes and other assessments and levies which
TECHLITE is required by law to withhold or to collect have been duly withheld
and collected, and have been paid over to the proper government authorities or
are held by TECHLITE in separate bank accounts for such payment or are
represented by depository receipts, and all such withholdings and collections
and all other payments due in connection therewith (including, without
limitation, employment taxes, both the employees' and employer's share) have
been paid over to the government or placed in a separate and segregated bank
account for such purpose. There are no known deficiencies in income taxes for
any periods and further, the representations and warranties as to the absence of
undisclosed liabilities contained in Section 3.06 includes any and all tax
liabilities of whatsoever kind or nature (including, without limitation, all
federal, state, local and foreign income, profit, franchise, sales, use and
property taxes) due or to become due, incurred in respect of or measured by
TECHLITE income or business prior to the Closing Date.
3.09 Options, Warrants, etc. Except as otherwise described in Schedule
H, there are no outstanding options, warrants, calls, commitments or agreements
of any character to which TECHLITE or its shareholders are a party or by which
TECHLITE or its shareholders are bound, or are a party, calling for the issuance
of shares of capital stock of TECHLITE or any securities representing the right
to purchase or otherwise receive any such capital stock of TECHLITE.
3.10 Title to Assets. Except for liens set forth in Schedule C, TECHLITE
is the sole and unconditional owner of, with good and marketable title to, all
the assets listed in the schedules as owned by them and all other property and
assets are free and clear of all mortgages, liens, pledges, charges or
encumbrances of any nature whatsoever.
3.11 Agreements in Force and Effect. Except as set forth in Schedules D
and E, all material contracts, agreements, plans, promissory notes, mortgages,
leases, policies, licenses, franchises or similar instruments to which TECHLITE
is a party are valid and in full force and effect on the date hereof, and
TECHLITE has not breached any material provision of, and is not in default in
any material respect under the terms of, any such contract, agreement, plan,
promissory note, mortgage, lease, policy, license, franchise or similar
instrument which breach or default would have a material adverse effect upon the
business, operations or financial condition of TECHLITE.
3.12 Legal Proceedings, Etc. Except as set forth in Schedule K, there
are no civil, criminal, administrative, arbitration or other such proceedings or
investigations pending or, to the knowledge of TECHLITE, threatened, in which,
individually or in the aggregate, an adverse determination would materially and
adversely affect the assets, properties, business or income of TECHLITE.
TECHLITE has substantially complied with, and is not in default in any material
respect under, any laws, ordinances, requirements, regulations or orders
applicable to its businesses.
3.13 Governmental Regulation. To the knowledge of TECHLITE and except as
set forth in Schedule K, TECHLITE is not in violation of or in default with
respect to any applicable law or any applicable rule, regulation, order, writ or
decree of any court or any governmental commission, board, bureau, agency or
instrumentality, or delinquent with respect to any report required to be filed
with any governmental commission, board, bureau, agency or instrumentality which
violation or default could have a material adverse effect upon the business,
operations or financial condition of TECHLITE.
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3.14 Brokers and Finders. TECHLITE shall be solely responsible for
payment to any broker or finder retained by TECHLITE for any brokerage fees,
commissions or finders' fees in connection with the transactions contemplated
herein. Any such fees and the names of the brokers or finders will be set forth
in Schedule L attached hereto.
3.15 Accuracy of Information. No representation or warranty by TECHLITE
contained in this Agreement and no statement contained in any certificate or
other instrument delivered or to be delivered to SUN INDUSTRIES pursuant hereto
or in connection with the transactions contemplated hereby (including without
limitation all Schedules and exhibits hereto) contains or will contain any
untrue statement of material fact or omits or will omit to state any material
fact necessary in order to make the statements contained herein or therein not
misleading.
3.16 Subsidiaries. TECHLITE does not have any other subsidiaries or own
capital stock representing ten percent (10%) or more of the issued and
outstanding stock of any other corporation.
3.17 Consents. Except as listed in Schedule F, no consent or approval
of, or registration, qualification or filing with, any governmental authority or
other person is required to be obtained or accomplished by TECHLITE or any
shareholder thereof in connection with the consummation of the transactions
contemplated hereby.
3.18 Improper Payments. Neither TECHLITE, nor any person acting on
behalf of TECHLITE, has made any payment or otherwise transmitted anything of
value, directly or indirectly, to (a) any official or any government or agency
or political subdivision thereof for the purpose of influencing any decision
affecting the business of TECHLITE, (b) any customer, supplier of competitor of
TECHLITE or employee of such customer, supplier or competitor, for the purpose
of obtaining or retaining TECHLITE's existing business for TECHLITE, or (c) any
political party or any candidate for elective political office, nor has any fund
or other asset of TECHLITE been maintained that was not fully and accurately
recorded on the books of account of TECHLITE.
3.19 Copies of Documents. TECHLITE has made available for inspection and
copying by SUN INDUSTRIES and its duly authorized representatives, and will
continue to do so at all times, true and correct copies of all documents which
it has filed with the Securities and Exchange Commission and all other
governmental agencies which are material to the terms and conditions contained
in this Agreement. Furthermore, all filings by TECHLITE with the Securities and
Exchange Commission and all other governmental agencies, including but not
limited to the Internal Revenue Service, have contained information which is
true and correct, to the best knowledge of the Board of Directors of TECHLITE,
in all material respects and did not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements made
therein not misleading or which could have any material adverse effect upon the
financial condition or operations of TECHLITE or adversely effect the objectives
of this Agreement with respect to SUN INDUSTRIES including, but not limited to,
the issuance and subsequent trading of the shares of common stock of TECHLITE to
be received hereby, subject to compliance by the shareholders of SUN INDUSTRIES
with applicable law. TECHLITE has filed with the Securities and Exchange
Commission and each state securities regulator all statements, applications,
reports and filings required under the Securities Act of 1933 and the Exchange
Act of 1934, as amended.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF
SUN AND SUN INDUSTRIES, INC. AND THE SHAREHOLDERS
SUN INDUSTRIES and its SHAREHOLDERS hereby represent and warrant to
TECHLITE as follows:
4.01 There are attached as schedules to this Agreement the following
documents, each of which is true and accurate in all material respects and each
of which shall be updated prior to the Closing, as may be required, to make the
information contained in the document true and accurate in all material
respects:
(a) Financial Statements. Unaudited financial statements of SUN
INDUSTRIES comprised of the following: balance sheets as of December 31, 2000
and December 31, 1999; statements of operations for the 2000 and 1999 fiscal
years, statements of cash flows for the 2000 and 1999 fiscal years, statements
of changes in shareholders equity for the 2000 and 1999 fiscal years, unaudited
financial statements as of March 31, 2000, and notes to the financial
statements. (Schedule AA).
(b) Property. A list and description of all property, real or
personal, owned by SUN INDUSTRIES of a value equal to or greater than $10,000.
(Schedule BB).
(c) Liens and Liabilities. A list of all material liens,
encumbrances, easements, security interests or similar interests in or on any of
the assets listed on Schedule AA. (Schedule CC). A list of all debts,
liabilities and obligations of SUN INDUSTRIES incurred or owing as of the date
of this Agreement.
(Schedule CC.1).
(d) Leases and Contracts. A list describing all material terms of
each lease (whether of real or personal property) and each contract, promissory
note, mortgage, license, franchise, or other written agreement to which SUN
INDUSTRIES is a party which involves or can reasonably be expected to involve
aggregate future payments or receipts by SUN INDUSTRIES (whether by the terms of
such lease, contract, promissory note, license, franchise or other written
agreement or as a result of a guarantee of the payment of or indemnity against
the failure to pay same) of $10,000 or more annually during the twelve-month
period ended December 31, 2000, or any consecutive twelve-month period
thereafter, except any of said instruments which terminate or are cancelable
without penalty during such twelve-month period. (Schedule DD).
(e) Loan Agreements. Copies of all loan agreements and other
documents with respect to obligations of SUN INDUSTRIES for the repayment of
borrowed money. (Schedule EE).
(f) Consents Required. A list of all agreements wherein consent
to the transaction herein contemplated is required to avoid a default
thereunder; or where notice of such transaction is required at or subsequent to
closing, or where consent to an acquisition, consolidation, or sale of all or
substantially all of the assets is required to avoid a default thereunder.
(Schedule FF).
(g) Articles and Bylaws. A copy of the Certificate and Articles
of Incorporation and Bylaws of SUN INDUSTRIES together with all amendments
thereto to the date hereof. (Schedule GG).
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(h) Shareholders. A list of all persons or entities holding
capital stock of SUN INDUSTRIES or any rights to subscribe for, acquire, or
receive shares of the capital stock of SUN INDUSTRIES (whether warrants, calls,
options, or conversion rights), including copies of all stock option plans
whether qualified or non-qualified, and other similar agreements. (Schedule HH).
(i). Officers and Directors. A list of all officers and
Directors of SUN INDUSTRIES. (Schedule II).
(j) Salary Schedule. A list (in all material respects) of the
names and the current salary rate for each present employee of SUN INDUSTRIES
who received $10,000 or more in aggregate compensation from SUN INDUSTRIES
whether in salary, bonus or otherwise, during the year 1999, or who is presently
scheduled to receive from SUN INDUSTRIES a salary in excess of $10,000 during
the year ending December 31, 2000, including in each case the amount of
compensation received or scheduled to be received, and a schedule of the hourly
rates of all other employees listed according to departments. (Schedule JJ).
(k) Litigation. A list (in all material respects) of all material
civil, criminal, administrative, arbitration or other such proceedings or
investigations (including without limitations unfair labor practice matters,
labor organization activities, environmental matters and civil rights
violations) pending or, to the knowledge of SUN INDUSTRIES threatened, which may
materially and adversely affect SUN INDUSTRIES. (Schedule KK).
(l) Tax Returns. Copies of all Federal and State tax returns for
SUN INDUSTRIES for the last three years. (Schedule LL).
(m) Agency Reports. Copies of all material reports or filings
(and a list of the categories of reports or filings made on a regular basis)
made by SUN INDUSTRIES under ERISA, EEOC, FDA and all other governmental
agencies (federal, state or local). (Schedule MM).
(n) Banks. A list showing (1) the name of each bank in which SUN
INDUSTRIES has an account or safe deposit box, and (2) the names and addresses
of all signatories. (Schedule NN).
(o) Jurisdictions Where Qualified. A list of all jurisdictions in
which SUN INDUSTRIES is qualified to do business and is in good standing.
(Schedule OO).
(p) Subsidiaries. A list of all subsidiaries of SUN INDUSTRIES.
(Schedule PP). The term "Subsidiary" or "Subsidiaries" shall include
corporations, unincorporated associations, partnerships, joint ventures, or
similar entities in which SUN INDUSTRIES has an interest, direct or indirect.
(q) Union Matters. A list and description (in all material
respects) of all union contracts and collective bargaining agreements of SUN
INDUSTRIES, if any. (Schedule QQ).
(r) Employee and Consultant Contracts. A list of all employee and
consultant contracts which SUN INDUSTRIES may have, other than those listed in
the schedule on Union Matters. (Schedule RR).
(s) Employee Benefit Plans. Copies of all salary, stock option,
bonus, incentive compensation, deferred compensation, profit sharing,
retirement, pension, group insurance, disability, death benefit or other benefit
plans, trust agreements or arrangements of SUN INDUSTRIES in effect on the date
hereof or to become effective after the date thereof, together with copies of
any determination letters issued by the Internal Revenue Service with respect
thereto. (Schedule SS).
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(t) Insurance Policies. A list (in all material respects) and
description of all material insurance policies naming SUN INDUSTRIES as an
insured or beneficiary or as a loss payable payee or for which SUN INDUSTRIES
has paid all or part of the premium in force on the date hereof, specifying any
notice or other information possessed by SUN INDUSTRIES regarding possible
claims thereunder, cancellation thereof or premium increases thereon, including
any policies now in effect naming SUN INDUSTRIES as beneficiary covering the
business activities of SUN INDUSTRIES. (Schedule TT).
(u) Licenses and Permits. A list of all licenses, permits and
other authorizations of SUN INDUSTRIES. (Schedule UU).
4.02 Organization, Standing and Power. SUN INDUSTRIES is a corporation
duly organized, validly existing and in good standing under the laws of the
State of California with all requisite corporate power to own or lease its
properties and carry on its businesses as is now being conducted.
4.03 Qualification. SUN INDUSTRIES is qualified and is licensed as a
foreign corporation in the States set forth on Schedule OO.
4.04 Capitalization of SUN INDUSTRIES. The authorized capital stock of
SUN INDUSTRIES consists of 100,000 shares of Common Stock,no par value, of which
86,500 shares are issued to shareholders listed on Schedule HH, which shares
were duly authorized, validly issued and fully paid and non assessable. There
are no preemptive rights with respect to the SUN INDUSTRIES stock.
4.05 Authority. The execution and delivery of this Agreement and
consummation of the transactions contemplated herein have been duly authorized
by all necessary corporate action, including but not limited to duly and validly
authorized action and approval by the Board of Directors, on the part of SUN
INDUSTRIES. This Agreement constitutes the valid and binding obligation of SUN
INDUSTRIES enforceable against it in availability of the remedy of specific
performance. This Agreement has been duly executed by SUN INDUSTRIES and the
execution and transactions contemplated by this Agreement shall not result in
any breach of any terms or provisions of SUN INDUSTRIES's Certificate and
Articles of Incorporation or Bylaws or of any other agreement, court order or
instrument to which SUN INDUSTRIES is a party or bound by.
4.06 Absence of Undisclosed Liabilities. SUN INDUSTRIES has no material
liabilities of any nature, whether fixed, absolute, contingent or accrued, which
are not reflected on the financial statements set forth in Schedule AA nor
otherwise disclosed in this Agreement or any of the Schedules or Exhibits
attached hereto.
4.07 Absence of Changes. Since March 31, 2000, there has not been any
material adverse change in the condition (financial or other wise), assets,
liabilities, earnings or business of SUN INDUSTRIES, except for changes
resulting from completion of those transactions described in Section 5.01.
4.08 Tax Matters. All taxes and other assessments and levies which SUN
INDUSTRIES is required by law to withhold or to collect have been duly withheld
and collected, and have been paid over to the proper government authorities or
are held by SUN INDUSTRIES in separate bank accounts for such payment or are
represented by depository receipts, and all such withholdings and collections
and all other payments due in connection therewith (including, without
limitation, employment taxes, both the employees' and employer's share) have
been paid over to the government or placed in a separate and segregated bank
account for such purpose. There are no known deficiencies in income taxes for
any periods and further, the representations and warranties as to the absence of
undisclosed liabilities contained in Section 4.06 includes any and all tax
liabilities of whatsoever kind or nature (including, without limitation, all
federal, state, local and foreign income, profit, franchise, sales, use and
property taxes) due or to become due, incurred in respect of or measured by SUN
INDUSTRIES income or business prior to the Closing Date.
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4.09 Options, Warrants, etc. Except as otherwise described in Schedule
HH, there are no outstanding options, warrants, calls, commitments or agreements
of any character to which SUN INDUSTRIES or its shareholders are a party or by
which SUN INDUSTRIES or its shareholders are bound, or are a party, calling for
the issuance of shares of capital stock of SUN INDUSTRIES or any securities
representing the right to purchase or otherwise receive any such capital stock
of SUN INDUSTRIES.
4.10 Title to Assets. Except for liens set forth in Schedule CC, SUN
INDUSTRIES is the sole and unconditional owner of, with good and marketable
title to, all the assets listed in the schedules as owned by them and all other
property and assets are free and clear of all mortgages, liens, pledges, charges
or encumbrances of any nature whatsoever.
4.11 Agreements in Force and Effect. Except as set forth in Schedules DD
and EE, all material contracts, agreements, plans, promissory notes, mortgages,
leases, policies, licenses, franchises or similar instruments to which SUN
INDUSTRIES is a party are valid and in full force and effect on the date hereof,
and SUN INDUSTRIES has not breached any material provision of, and is not in
default in any material respect under the terms of, any such contract,
agreement, plan, promissory note, mortgage, lease, policy, license, franchise or
similar instrument which breach or default would have a material adverse effect
upon the business, operations or financial condition of SUN INDUSTRIES.
4.12 Legal Proceedings, Etc. Except as set forth in Schedule KK, there
are no civil, criminal, administrative, arbitration or other such proceedings or
investigations pending or, to the knowledge of either SUN INDUSTRIES or the
SHAREHOLDERS, threatened, in which, individually or in the aggregate, an adverse
determination would materially and adversely affect the SUN INDUSTRIES,
properties, business or income of SUN INDUSTRIES. SUN INDUSTRIES has
substantially complied with, and is not in default in any material respect
under, any laws, ordinances, requirements, regulations or orders applicable to
its businesses.
4.13 Governmental Regulation. To the knowledge of SUN INDUSTRIES and
except as set forth in Schedule KK, SUN INDUSTRIES is not in violation of or in
default with respect to any applicable law or any applicable rule, regulation,
order, writ or decree of any court or any governmental commission, board,
bureau, agency or instrumentality, or delinquent with respect to any report
required to be filed with any governmental commission, board, bureau, agency or
instrumentality which violation or default could have a material adverse effect
upon the business, operations or financial condition of SUN INDUSTRIES.
4.14 Brokers and Finders. SHAREHOLDERS shall be solely responsible for
payment to any broker or finder retained by SUN INDUSTRIES for any brokerage
fees, commissions or finders' fees in connection with the transactions
contemplated herein. Any such fees and the names of the brokers or finders will
be set forth in Schedule LL attached hereto.
4.15 Accuracy of Information. No representation or warranty by SUN
INDUSTRIES or SHAREHOLDERS contained in this Agreement and no statement
contained in any certificate or other instrument delivered or to be delivered to
TECHLITE pursuant hereto or in connection with the transactions contemplated
hereby (including without limitation all Schedules and exhibits hereto) contains
or will contain any untrue statement of material fact or omits or will omit to
state any material fact necessary in order to make the statements contained
herein or therein not misleading.
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4.16 Subsidiaries. Except as listed in Schedule PP, SUN INDUSTRIES does
not have any other subsidiaries or own capital stock representing ten percent
(10%) or more of the issued and outstanding stock of any other corporation.
4.17 Consents. Except as listed in Schedule FF, no consent or approval
of, or registration, qualification or filing with, any governmental authority or
other person is required to be obtained or accomplished by SUN INDUSTRIES or any
shareholder thereof in connection with the consummation of the transactions
contemplated hereby.
4.18 Improper Payments. Neither SUN INDUSTRIES nor any person acting on
behalf of SUN INDUSTRIES has made any payment or otherwise transmitted anything
of value, directly or indirectly, to (a) any official or any government or
agency or political subdivision thereof for the purpose of influencing any
decision affecting the business of SUN INDUSTRIES, (b) any customer, supplier of
competitor of SUN INDUSTRIES, or employee of such customer, supplier or
competitor, for the purposes of obtaining or retaining business for SUN
INDUSTRIES, or (c) any political party or any candidate for elective political
office, nor has any fund or other asset of SUN INDUSTRIES been maintained that
was not fully and accurately recorded on the books of account of SUN INDUSTRIES.
4.19 Copies of Documents. SUN INDUSTRIES has made available for
inspection and copying by TECHLITE and its duly authorized representatives, and
will continue to do so at all times, true and correct copies of all documents
which it has filed with governmental agencies which are material to the terms
and conditions contained in this Agreement. Furthermore, all filings by SUN
INDUSTRIES with governmental agencies, including but not limited to the Internal
Revenue Service, have contained information which is true and correct in all
material respects and did not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements made therein
not misleading or which could have any material adverse effect upon the
financial condition or operations of SUN INDUSTRIES or adversely effect the
objectives of this Agreement.
4.20 Investment Intent of Shareholders. Each shareholder of SUN
INDUSTRIES represents and warrants to TECHLITE and to NEWCO that the shares of
TECHLITE being acquired pursuant to this Agreement are being acquired for his or
her own account and for investment and not with a view to the public resale or
distribution of such shares and further acknowledges that the shares being
issued have not been registered under the Securities Act and are "restricted
securities" as that term is defined in Rule 144 promulgated under the Securities
Act and must be held indefinitely unless they are subsequently registered under
the Securities Act or an exemption from such registration is available.
ARTICLE 5
CONDUCT AND TRANSACTIONS PRIOR TO THE
EFFECTIVE TIME OF THE ACQUISITION
5.01 Conduct and Transactions of TECHLITE. During the period from the
date hereof to the date of Closing, TECHLITE shall:
(1) Conduct its operations in the ordinary course of business,
including but not limited to, paying all obligations as they mature, complying
with all applicable tax laws, filing all tax returns required to be filed and
paying all taxes due;
(2) Maintain its records and books of account in a manner that
fairly and correctly reflect its income, expenses, assets and liabilities.
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TECHLITE shall not during such period, except in the ordinary course of
business, without the prior written consent of SUN INDUSTRIES:
(a) Sell, dispose of or encumber any of its properties or assets
except for payment of brokers' or finders' fees;
(b) Declare or pay any dividends on shares of its capital stock
or make any other distribution of assets to the holders thereof.
(c) Issue, reissue or sell, or issue options or rights to
subscribe to, or enter into any contract or commitment to issue, reissue or
sell, any shares of its capital stock or acquire or agree to acquire any shares
of its capital stock other than as set forth on Exhibit H attached hereto;
(d) Except as otherwise contemplated and required by this
Agreement, amend its Articles of Incorporation or merge or consolidate with or
into any other corporation or sell all or substantially all of its assets or
change in any manner the rights of its capital stock or other securities;
(e) Pay or incur any obligation or liability, direct or
contingent, of more than $1,000;
(f) Incur any indebtedness for borrowed money, assume, guarantee,
endorse or otherwise become responsible for obligations of any other party, or
make loans or advances to any other party;
(g) Make any material change in its insurance coverage;
(h) Increase in any manner the compensation, direct or indirect,
of any of its officers or executive employees; except in accordance with
existing employment contracts;
(i) Enter into any agreement or make any commitment to any labor
union or organization;
(j) Make any capital expenditures.
5.02 Conduct and Transactions of SUN INDUSTRIES. During the period from
the date hereof to the date of Closing, SUN INDUSTRIES shall:
(1) Obtain an investment letter from each SHAREHOLDER in a
form that is satisfactory to TECHLITE.
(2) Conduct the operations of SUN INDUSTRIES in the ordinary
course of business.
SUN INDUSTRIES shall not during such period, except in the ordinary
course of business, without the prior written consent of TECHLITE:
(a) Sell, dispose of or encumber any of the properties or
assets of SUN INDUSTRIES;
(b) Declare or pay any dividends on shares of its capital stock
or make any other distribution of assets to the holders thereof;
(c) Issue, reissue or sell, or issue options or rights to
subscribe to, or enter into any contract or commitment to issue, reissue or
sell, any shares of its capital stock or acquire or agree to acquire any shares
of its capital stock;
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(d) Except as otherwise contemplated and required by this
Agreement, amend its Articles of Incorporation or merge or consolidate with or
into any other corporation or sell all or substantially all of its assets or
change in any manner the rights of its capital stock or other securities;
(e) Pay or incur any obligation or liability, direct or
contingent other than to extinguish liabilities revealed on its financial
statements provided hereto;
(f) Incur any indebtedness for borrowed money, assume, guarantee,
endorse or otherwise become responsible for obligations of any other party, or
make loans or advances to any other party;
(g) Make any material change in its insurance coverage;
(h) Increase in any manner the compensation, direct or indirect,
of any of its officers or executive employees; except in accordance with
existing employment contracts;
(i) Enter into any agreement or make any commitment to any labor
union or organization;
(j) Make any material capital expenditures.
(k) Allow any of the foregoing actions to be taken by any
subsidiary of SUN INDUSTRIES.
ARTICLE 6
RIGHTS OF INSPECTION
6.01 During the period from the date of this Agreement to the date of
Closing of the merger, TECHLITE and SUN INDUSTRIES agree to use their best
efforts to give the other party, including its representatives and agents, full
access to the premises, books and records of each of the entities, and to
furnish the other with such financial and operating data and other information
including, but not limited to, copies of all legal documents and instruments
referred to on any schedule or exhibit hereto, with respect to the business and
properties of TECHLITE or SUN INDUSTRIES, as the case may be, as the other shall
from time to time request; provided, however, if there are any such
investigations: (1) they shall be conducted in such manner as not to
unreasonably interfere with the operation of the business of the other parties
and (2) such right of inspection shall not affect in any way whatsoever any of
the representations or warranties given by the respective parties hereunder. In
the event of termination of this Agreement, TECHLITE and SUN INDUSTRIES will
each return to the other all documents, work papers and other materials obtained
from the other party in connection with the transactions contemplated hereby,
and will take such other steps necessary to protect the confidentiality of such
material. SUN INDUSTRIES shall not be required to disclose its customer list and
customer information and its vendor list and other vendor information until all
other material conditions to the completion of the reorganization have been
satisfied or waived.
ARTICLE 7
CONDITIONS TO CLOSING
7.01 Conditions to Obligations of SUN INDUSTRIES. The obligation of SUN
INDUSTRIES and its SHAREHOLDERS to perform this Agreement is subject to the
satisfaction of the following conditions on or before the Closing, unless waived
in writing by SUN INDUSTRIES:
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(a) Representations and Warranties. There shall be no information
disclosed in the schedules delivered by TECHLITE which in the opinion of SUN
INDUSTRIES, expressed in writing to TECHLITE within two weeks after delivery of
the schedules, would materially adversely affect the proposed transaction and
intent of the parties as set forth in this Agreement. The representations and
warranties of TECHLITE set forth in Article 3 hereof shall be true and correct
in all material respects as of the date of this Agreement and as of the Closing
as though made on and as of the Closing, except as otherwise permitted by this
Agreement.
(b) Performance of Obligations. TECHLITE shall have in all
material respects performed all agreements required to be performed by it under
this Agreement and shall have performed in all material respects any actions
contemplated by this Agreement prior to or on the Closing, and TECHLITE shall
have complied in all material respects with the course of conduct required by
this Agreement.
(c) Corporate Action. There are minutes, certified copies of
corporate resolutions or other documentary evidence satisfactory to counsel for
SUN INDUSTRIES that TECHLITE has submitted this Agreement and any other
documents required hereby to such parties for approval as provided by applicable
law.
(d) Consents. The execution of this Agreement by the SHAREHOLDERS
and any consents necessary for or approval of any party listed on any Schedule
delivered by TECHLITE whose consent or approval is required pursuant thereto
shall have been obtained.
(e) Financial Statements. SUN INDUSTRIES shall have been
furnished unaudited financial statements of TECHLITE for the period from
February 1, 2000 to the last day of the month preceding the Closing. Such
financial statements shall have been prepared in conformity with generally
accepted accounting principles on a basis consistent with those of prior periods
and fairly present the financial position of TECHLITE as of their date.
(f) Statutory Requirements. All statutory requirements for the
valid consummation by TECHLITE of the transactions contemplated by this
Agreement shall have been fulfilled.
(g) Governmental Approval. All authorizations, consents,
approvals, permits and orders of all federal and state governmental agencies
required to be obtained by TECHLITE for consummation of the transactions
contemplated by this Agreement shall have been obtained.
(h) Employment Agreements. Existing TECHLITE employment
agreements will have been delivered to Counsel for SUN INDUSTRIES.
(i) Changes in Financial Condition of TECHLITE. There shall not
have occurred any material adverse change in the financial condition or in the
operations of the business of TECHLITE, except expenditures in furtherance of
this Agreement.
(j) Absence of Pending Litigation. TECHLITE is not engaged in or
threatened with any suit, action, or legal, administrative or other proceedings
or governmental investigations pertaining to this Agreement or the consummation
of the transactions contemplated hereunder.
7.02 Conditions to Obligations of TECHLITE. The obligation of TECHLITE
to perform this Agreement is subject to the satisfaction of the following
conditions on or before the Closing unless waived in writing by TECHLITE:
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(a) Representations and Warranties. There shall be no information
disclosed in the schedules delivered by SUN INDUSTRIES, which in the opinion of
TECHLITE, expressed in writing to TECHLITE within two weeks after delivery of
the schedules, would materially adversely affect the proposed transaction and
intent of the parties as set forth in this Agreement. The representations and
warranties of SUN INDUSTRIES set forth in Article 4 hereof shall be true and
correct in all material respects as of the date of this Agreement and as of the
Closing as though made on and as of the Closing, except as otherwise permitted
by this Agreement.
(b) Performance of Obligations. SUN INDUSTRIES shall have in all
material respects performed all agreements required to be performed by it under
this Agreement and shall have performed in all material respects any actions
contemplated by this Agreement prior to or on the Closing, and SUN INDUSTRIES
shall have complied in all respects with the course of conduct required by this
Agreement.
(c) Corporate Action. There has been delivered to TECHLITE
minutes, certified copies of corporate resolutions or other documentary evidence
satisfactory to counsel for TECHLITE that SUN INDUSTRIES has submitted this
Agreement and any other documents required hereby to such parties for approval
as provided by applicable law.
(d) Consents. Any consents necessary for or approval of any party
listed on any Schedule delivered by SUN INDUSTRIES, whose consent or approval is
required pursuant thereto, shall have been obtained.
(e) Financial Statements. TECHLITE shall have been furnished with
an interim, unaudited balance sheet, operating statement, and statement of cash
flows of SUN INDUSTRIES for the period from January 1, 2000 to the last day of
the month preceding the Closing. Such financial statements shall have been
prepared in conformity with generally accepted accounting principles and fairly
present the financial position of SUN INDUSTRIES as of its date.
(f) Statutory Requirements. All statutory requirements for the
valid consummation by SUN INDUSTRIES of the transactions contemplated by this
Agreement shall have been fulfilled.
(g) Governmental Approval. All authorizations, consents,
approvals, permits and orders of all federal and state governmental agencies
required to be obtained by SUN INDUSTRIES for consummation of the transactions
contemplated by this Agreement shall have been obtained.
(h) Employment Agreements. Existing SUN INDUSTRIES employment
agreements will have been delivered to counsel for TECHLITE.
(i) Changes in Financial Condition of SUN INDUSTRIES. There shall
not have occurred any material adverse change in the financial condition or in
the operations of the business of SUN INDUSTRIES, except expenditures in
furtherance of this Agreement.
(j) Absence of Pending Litigation. SUN INDUSTRIES is not engaged
in or threatened with any suit, action, or legal, administrative or other
proceedings or governmental investigations pertaining to this Agreement or the
consummation of the transactions contemplated hereunder.
17
ARTICLE 8
MATTERS SUBSEQUENT TO CLOSING
8.01 Covenant of Further Assurance. The parties covenant and agree that
they shall, from time to time, execute and deliver or cause to be executed and
delivered all such further instruments of conveyance, transfer, assignments,
receipts and other instruments, and shall take or cause to be taken such further
or other actions as the other party or parties to this Agreement may reasonably
deem necessary in order to carry out the purposes and intent of this Agreement.
8.02 Shareholders' Covenant to Provide Audited Financial Statements.
The SHAREHOLDERS covenant that they will provide, within 50 days after the
Closing and either by e-mail or on compact disk, the audited financial
statements of SUN INDUSTRIES that are required to be filed, within 60 days after
the Closing, with the Securities and Exchange Commission pursuant to its
Regulation S-B, Item 210.
8.03 SHAREHOLDERS' Additional Remedy in the Event of Certain Defaults.
In the event NEWCO should fail to make the payments required by Article 1 or
perform any of the covenants contained in Article 1 required to be performed
on or before the third anniversary of the effective date of this Agreement and
fails to correct such failure or default within 30 days of written notice
thereof, in lieu of any other remedies SHAREHOLDERS may have, SHAREHOLDERS shall
have the right to require TECHLITE to transfer all the shares of NEWCO to
SHAREHOLDERS, which transfer shall terminate all other obligations under this
Agreement of TECHLITE to SHAREHOLDERS.
8.04 Future Guaranties and Indemnity Agreements. SHAREHOLDERS shall not
be required to guarantee or provide indemnification with regard to future lines
of credit or other future obligations of NEWCO. TECHLITE shall use its best
efforts in good faith to provide all required guaranties or indemnifications
with regard to new obligations or lines of credit reasonably required by NEWCO's
business prospects and opportunities during the three years after the Closing.
ARTICLE 9
NATURE AND SURVIVAL OF REPRESENTATIONS
9.01 All statements contained in any written certificate, schedule,
exhibit or other written instrument delivered by TECHLITE or SUN INDUSTRIES
pursuant hereto, or otherwise adopted by TECHLITE, by its written approval, or
by SUN INDUSTRIES by its written approval, or in connection with the
transactions contemplated hereby, shall be deemed representations and warranties
by TECHLITE or by SUN INDUSTRIES and its SHAREHOLDERS, as the case may be. All
representations, warranties and agreements made by either party shall survive
for the period of the applicable statute of limitations and until the discovery
of any claim, loss, liability or other matter based on fraud, if longer.
ARTICLE 10
TERMINATION OF AGREEMENT AND ABANDONMENT OF REORGANIZATION
10.1 Termination. Anything herein to the contrary notwithstanding, this
Agreement and any agreement executed as required hereunder and the merger
contemplated hereby may be terminated by three days before the closing date as
follows:
(a) By mutual written consent of the Boards of Directors of
TECHLITE and SUN INDUSTRIES.
(b) By the Board of Directors of TECHLITE if any of the
conditions set forth in Section 7.02 shall not have been satisfied.
18
(c) By the Board of Directors of SUN INDUSTRIES if any of the
conditions set forth in Section 7.01 shall not have been satisfied.
10.02 Termination of Obligations and Waiver of Conditions; Payment of
Expenses. In the event this Agreement and the acquisition are terminated and
abandoned pursuant to this Article 10 hereof, this Agreement shall become void
and of no force and effect and there shall be no liability on the part of any of
the parties hereto, or their respective directors, officers, shareholders or
controlling persons to each other other than as set forth in paragraph 1.01.11.
Each party hereto will pay all costs and expenses incident to its negotiation
and preparation of this Agreement and any of the documents evidencing the
transactions contemplated hereby, including fees, expenses and disbursements of
counsel.
ARTICLE 11
THE CLOSING
11.01 Exchange of Shares. At the Closing, (1) certificates of merger
shall be filed with the Secretaries of State of Nevada and California, (2) NEWCO
shall deliver $1,200,000 in readily accessible funds and 600,000 shares of
common stock of TECHLITE to the SHAREHOLDERS in the proportions as shall be
determined by reference to their respective shareholdings of SUN INDUSTRIES or
as they shall among themselves instruct TECHLITE in writing at least one week
before the Closing, and (3) the SHAREHOLDERS shall deliver to NEWCO, for
cancellation, stock certificates representing all outstanding shares of capital
stock of SUN INDUSTRIES.
11.02 Restrictions on Shares Issued to the Shareholders. Due to the fact
that the SUN INDUSTRIES' Shareholders will receive shares of TECHLITE common
stock in connection with the merger which have not been registered under the
1933 Act by virtue of the exemption provided in Section 4(2) of such Act, those
shares of TECHLITE common stock will contain the following legend:
The shares represented by this certificate have not been
registered under the Securities Act of 1933. The shares have been
acquired for investment and may not be sold or offered for sale
in the absence of an effective Registration Statement for the
shares under the Securities Act of 1933 or an opinion of counsel
to the Corporation that such registration is not required.
ARTICLE 12
MISCELLANEOUS
12.01 Construction. This Agreement shall be construed and enforced in
accordance with the laws of the State of Oklahoma excluding the conflicts of
laws.
12.02 Notices. All notices necessary or appropriate under this Agreement
shall be effective when personally delivered or deposited in the United States
mail, postage prepaid, certified or registered, return receipt requested, and
addressed to the parties last known address which addresses are currently as
follows or are set forth for the SHAREHOLDERS under their signatures on the
execution page of this Agreement:
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If to "TECHLITE"
TECHLITE, INC.
c/o Xxxxxx X. Xxxxx
Xxxxxx Xxxx Xxxxxxx & Xxxxxx
000 Xxxxxx X. Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx Xxxx, XX 00000
(000) 000-0000; fax (000) 000-0000
If to "SUN INDUSTRIES"
SUN INDUSTRIES, Inc.
0000 Xxxx Xxxxxx
Xxxxxxxxxx Xxxxx, XX 00000
(000) 000-0000; fax (000) 000-0000
If to "SHAREHOLDERS"
C/o Xxxxx Xxx
00000 Xxxxxx Xxxx
Xxxxxxxxxx Xxxxx, XX 00000
12.03 Amendment and Waiver. The parties hereby may, by mutual agreement
in writing signed by each party, amend this Agreement in any respect. Any term
or provision of this Agreement may be waived in writing at any time by the party
which is entitled to the benefits thereof, such waiver right shall include, but
not be limited to, the right of either party to:
(a) Extend the time for the performance of any of the
obligations of the other;
(b) Waive any inaccuracies of representations by the other
contained in this Agreement or in any document delivered pursuant hereto;
(c) Waive compliance by the other with any of the covenants
contained in this Agreement, and performance of any obligations by the other;
and
(d) Waive the fulfillment of any condition that is precedent to
the performance by the other party of any of its obligations under this
Agreement. Any writing on the part of a party relating to such amendment,
extension or waiver as provided in this Section 12.03 shall be valid if
authorized or ratified by the Board of Directors of such party.
12.04 Remedies not Exclusive. No remedy conferred by any of the specific
provisions of this Agreement is intended to be exclusive of any other remedy,
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or otherwise. The election of any one or more remedies by TECHLITE,
SUN INDUSTRIES or a SHAREHOLDER shall not constitute a waiver of the right to
pursue other available remedies.
12.05 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.06 Benefit. This Agreement shall be binding upon, and inure to the
benefit of, the respective successors and assigns of TECHLITE, SUN INDUSTRIES
and the SHAREHOLDERS.
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12.07 Entire Agreement. This Agreement and the Schedules and Exhibits
attached hereto, represent the entire agreement of the undersigneds regarding
the subject matter hereof, and supersedes all prior written or oral
understandings or agreements between the parties.
12.08 Each Party to Bear its Own Expense. TECHLITE, SUN INDUSTRIES and
the SHAREHOLDERS shall each bear its own respective expenses incurred in
connection with the negotiation, execution, closing, and performance of this
Agreement, including counsel fees and accountant fees.
12.09 Captions and Section Headings. Captions and section headings used
herein are for convenience only and shall not control or affect the meaning or
construction of any provisions of this Agreement.
Executed as of the date first written above.
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SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER is executed as of the date first
written above.
TECHLITE, INC.
By /s/ X.X. Xxxxxxxx
--------------------------------------
President
By /s/ Xxxxx X. Xxxx
--------------------------------------
Secretary
SUN AND SUN INDUSTRIES, INC.
By /s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx, President
By /s/ Xxxxxxx Xxx
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Xxxxxxx Xxx, Secretary
SHAREHOLDERS
/s/Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
/s/ Yung Sun
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Yung Sun and
/s/ Lilla Sun
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Lilla Sun, as joint owners
/s/ Xxx Xxxxxxxxxx
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Xxx Xxxxxxxxxx
/s/ Xxxxxxx Xxx
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Xxxxxxx Xxx
/s/ Xxx Xxxxxx
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Xxx Xxxxxx
/s/ Xxxxx Xxxx
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Xxxxx Xxxx
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