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EXHIBIT 10.14
SHARE PURCHASE AGREEMENT
DATED AS OF
SEPTEMBER 30, 1997,
AMONG
XXXXXX XXXXXX, PH.D.,
XXXXXXX XXXXXXXXX XXXXX-XXXXXX,
XXXXXX FAMILY TRUST,
1256393 ONTARIO LIMITED,
ROYNAT INC.,
REMEC CANADA ULC
AND
REMEC, INC.
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TABLE OF CONTENTS
Section Page
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ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION................................ 2
1.1 Definitions.......................................................... 2
1.2 Rules of Construction................................................ 9
ARTICLE II PURCHASE AND SALE OF SHARES; CLOSING................................. 10
2.1 Sale of Shares by Sellers............................................ 10
2.2 Purchase of Shares by Buyer.......................................... 11
2.3 Capitalization of Buyer.............................................. 12
2.4 REMEC Liquidation Call Rights........................................ 12
2.5 REMEC Redemption Call Right.......................................... 13
2.6 REMEC Retraction Call Right.......................................... 15
2.7 Withholding Rights................................................... 16
2.8 Put Right............................................................ 17
2.9 Cash Option; Securities Law Compliance............................... 18
2.10 Support Agreement.................................................... 19
2.11 Execution of Counterpart............................................. 19
2.12 Section 85 Elections................................................. 19
2.13 The Closing.......................................................... 19
ARTICLE III REPRESENTATIONS AND WARRANTIES OF
XX. XXXXXX AND XXXXXX HOLDCO......................................... 19
3.1 Organization and Authority........................................... 20
3.2 Capitalization of Company and Amalgamated Company.................... 20
3.3 Authorization........................................................ 21
3.4 Title to Shares...................................................... 22
3.5 No Violation of Other Instruments.................................... 22
3.6 Consents............................................................. 22
3.7 Compliance With Law.................................................. 23
3.8 Investments in Others................................................ 23
3.9 Financial Statements................................................. 23
3.10 Absence of Undisclosed Liabilities................................... 23
3.11 Tax Returns and Payments............................................. 23
3.12 Absence of Certain Changes and Events................................ 25
3.13 Accounts Receivable.................................................. 27
3.14 Inventories.......................................................... 27
3.15 Backlog.............................................................. 27
3.16 Product Warranties................................................... 27
3.17 Credit Cards......................................................... 27
3.18 Interests in Real Property........................................... 27
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3.19 Personal Property.................................................... 28
3.20 Directors and Officers............................................... 28
3.21 Certain Transactions................................................. 28
3.22 Intellectual Property................................................ 29
3.23 Litigation and Other Proceedings..................................... 29
3.24 Contracts............................................................ 29
3.25 Insurance and Banking Facilities..................................... 30
3.26 Personnel............................................................ 30
3.27 Powers of Attorney and Suretyships................................... 30
3.28 Minutes and Share Records............................................ 30
3.29 Governmental Consents................................................ 31
3.30 Pension and Benefit Plans............................................ 31
3.31 Labor Matters........................................................ 31
3.32 Hazardous Materials.................................................. 32
3.33 Brokers and Finders.................................................. 33
3.34 Business Practices................................................... 33
3.35 Place of Business.................................................... 33
3.36 Activities of Millowave.............................................. 33
3.37 Accuracy of Documents and Information................................ 33
3.38 Representations and Warranties Applicable to the Amalgamated Company. 34
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF ROYNAT............................. 34
4.1 Organization and Authority........................................... 34
4.2 Capitalization....................................................... 34
4.3 Authorization........................................................ 35
4.4 Title to Shares...................................................... 35
4.5 No Violation of Other Instruments.................................... 36
4.6 Consents............................................................. 36
4.7 Compliance With Law.................................................. 36
4.8 Absence of Undisclosed Liabilities................................... 36
4.9 Tax Returns and Payments............................................. 37
4.10 Certain Transactions................................................. 37
4.11 Accuracy of Documents and Information................................ 37
4.12 Representations and Warranties Applicable to the Amalgamated Company. 38
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF REMEC AND
BUYER................................................................ 38
5.1 Activities of Buyer.................................................. 38
5.2 Organization and Authority........................................... 38
5.3 Capitalization of REMEC.............................................. 39
5.4 Capitalization of Buyer.............................................. 39
5.5 Authorization........................................................ 40
5.6 No Violation of Other Instruments.................................... 40
5.7 Consents............................................................. 40
5.8 Financial Statements................................................. 41
5.9 Absence of Undisclosed Liabilities................................... 41
5.10 Issuance of Shares................................................... 41
5.11 Litigation........................................................... 42
5.12 Brokers and Finders.................................................. 42
5.13 Business Practices................................................... 42
5.14 Form S-3 Eligibility................................................. 42
5.15 Full Disclosure...................................................... 42
ARTICLE VI COVENANTS PRIOR TO CLOSING........................................... 43
6.1 Access............................................................... 43
6.2 Conduct of Business Prior to Closing................................. 43
6.3 Notice of Events..................................................... 45
6.4 No Other Negotiations................................................ 45
6.5 Company Audited Financials........................................... 46
6.6 Cooperation.......................................................... 46
6.7 Employees............................................................ 47
6.8 Nasdaq Listing....................................................... 47
6.9 Press Releases....................................................... 47
6.10 Best Efforts to Close................................................ 47
6.11 Covenants Applicable to the Amalgamated Company...................... 47
ARTICLE VII ADDITIONAL CONTINUING COVENANTS...................................... 48
7.1 Confidential Information............................................. 48
7.2 Tax Cooperation...................................................... 48
7.3 Pre-Closing Reorganization........................................... 48
7.4 Post-Closing Reorganization Cooperation.............................. 49
7.5 Intercompany Debt.................................................... 49
7.6 Release from Personal Guarantees..................................... 49
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ARTICLE VIII REGISTRATION RIGHTS.................................................. 50
8.1 Registration on Form S-3............................................. 50
8.2 Right of Deferral.................................................... 50
8.3 REMEC Trading Policies............................................... 50
8.4 No Legend on Shares.................................................. 50
ARTICLE IX CONDITIONS TO THE OBLIGATIONS OF REMEC AND
BUYER................................................................ 51
9.1 Representations and Warranties True at Closing....................... 51
9.2 Performance of Covenants............................................. 51
9.3 Certificate.......................................................... 51
9.4 Resignation of Directors............................................. 51
9.5 Material Changes..................................................... 51
9.6 Consents............................................................. 52
9.7 Good Standing Certificates........................................... 52
9.8 No Action to Prevent Completion...................................... 52
9.9 Governmental Filings................................................. 52
9.10 Xxxxxx Employment Agreement.......................................... 52
9.11 Opinion of Counsel................................................... 52
9.12 Company Shareholders' Equity......................................... 53
9.13 Bonus to Amalgamated Company Employees............................... 53
9.14 OHM Agreement........................................................ 53
9.15 No Material Adverse Changes.......................................... 53
9.16 Due Diligence........................................................ 53
9.17 Defence Industry Productivity Program Cooperation Agreement.......... 53
9.18 Interim Financials................................................... 54
9.19 Amalgamation of Millowave and Nanowave............................... 54
ARTICLE X CONDITIONS TO THE OBLIGATIONS OF SELLERS............................. 54
10.1 Representations and Warranties True at Closing....................... 54
10.2 Performance of Covenants............................................. 54
10.3 Certificate.......................................................... 54
10.4 Consents............................................................. 55
10.5 Good Standing Certificate............................................ 55
10.6 Governmental Filings................................................. 55
10.7 Support Agreement.................................................... 55
10.8 Xxxxxx Employment Agreements......................................... 55
10.9 Opinion of Counsel................................................... 55
10.10 Payment to RoyNat.................................................... 56
10.11 OHM Agreement........................................................ 56
10.12 No Material Adverse Change........................................... 56
10.13 Due Diligence........................................................ 56
10.14 Defence Industry Productivity Program Cooperation Agreement.......... 56
10.15 Amalgamation of Millowave and Nanowave............................... 57
10.16 Closing Payments..................................................... 57
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ARTICLE XI TERMINATION OF OBLIGATIONS; SURVIVAL................................. 57
11.1 Termination of Agreement............................................. 57
11.2 Effect of Termination................................................ 58
11.3 Survival of Representations and Warranties........................... 58
ARTICLE XII INDEMNIFICATION...................................................... 59
12.1 Obligations of Sellers............................................... 59
12.2 Obligations of Buyer................................................. 59
12.3 Procedure............................................................ 59
12.4 Survival............................................................. 60
12.5 Notice of Breach..................................................... 60
12.6 Non-Exclusive Remedy................................................. 60
ARTICLE XIII MISCELLANEOUS........................................................ 61
13.1 Expenses............................................................. 61
13.2 Amendment............................................................ 61
13.3 Entire Agreement..................................................... 61
13.4 Governing Law........................................................ 61
13.5 Attorneys Fees....................................................... 61
13.6 Severability......................................................... 61
13.7 Headings............................................................. 62
13.8 Mutual Contribution.................................................. 62
13.9 Notices.............................................................. 62
13.10 Waiver............................................................... 64
13.11 Binding Effect; Assignment........................................... 64
13.12 No Third Party Beneficiaries......................................... 64
13.13 Counterparts......................................................... 65
13.14 Further Assurances................................................... 65
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Exhibits
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EXHIBIT A Dividend Access Share Provisions
EXHIBIT B Form of Report of Company's Auditors
EXHIBIT C Form of Support Agreement
EXHIBIT D Form of Counterpart
EXHIBIT E Form of Employment Agreement among Xx. Xxxxxx, Company and REMEC
EXHIBIT F Form of Employment Agreement between Xx. Xxxxxx and XXXXX
Schedules
Schedule 3.2 Capitalization
Schedule 3.5 No Violation of Other Instruments
Schedule 3.6 Consents
Schedule 3.7 Compliance with Law
Schedule 3.8 Investment in Others
Schedule 3.11 Tax Returns and Payments
Schedule 3.12 Absence of Certain Changes and Events
Schedule 3.15 Backlog
Schedule 3.16 Product Warranties
Schedule 3.17 Credit Cards
Schedule 3.18 Interests in Real Property
Schedule 3.19 Personal Property
Schedule 3.20 Directors and Officers
Schedule 3.21 Certain Transactions
Schedule 3.22 Intellectual Property
Schedule 3.23 Litigation and Other Proceedings
Schedule 3.24 Contracts
Schedule 3.25 Insurance and Banking Facilities
Schedule 3.26 Personnel
Schedule 3.29 Governmental Consents
Schedule 3.30 Pension and Benefit Plans
Schedule 3.32 Hazardous Materials
Schedule 3.35 Place of Business
Schedule 6.2 Conduct of Business Prior to Closing
Schedule 6.7 Employees
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SHARE PURCHASE AGREEMENT
This Share Purchase Agreement ("Agreement") is entered into as
of September 30, 1997, among Xxxxxx Xxxxxx, Ph.D, an individual ("Xx. Xxxxxx"),
Xxxxxxx Xxxxxxxxx Xxxxx-Xxxxxx, an individual ("Xxx. Xxxxxx"), the Xxxxxx Family
Trust, an Ontario trust formed pursuant to a trust deed dated as of March 27,
1997 ("Xxxxxx Trust"), 1256393 Ontario Limited, a corporation incorporated under
the laws of Ontario ("Xxxxxx Holdco"), RoyNat Inc., a corporation incorporated
under the laws of Canada ("RoyNat"), REMEC Canada ULC, an unlimited company
incorporated under the laws of Nova Scotia ("Buyer"), and REMEC, Inc., a
corporation incorporated under the laws of California ("REMEC"). Xx. Xxxxxx,
Xxx. Xxxxxx and the Xxxxxx Trust are sometimes collectively referred to as the
"Xxxxxx Family." The Xxxxxx Family, Xxxxxx Holdco and RoyNat are sometimes
collectively referred to in this Agreement as "Sellers."
R E C I T A L S
A. Millowave Technologies Inc., a corporation incorporated under the
laws of Ontario ("Millowave"), and RoyNat own all of the issued and outstanding
shares in the capital of Nanowave Technologies Inc., a corporation incorporated
under the laws of Canada ("Company"). The issued and outstanding shares in
capital of Company currently consists of 78 Class A common shares owned by
Millowave and 8 Class A common shares and 14 Class B common shares owned by
RoyNat. All of the issued and outstanding shares in the capital of Millowave are
owned by the Xxxxxx Family and Xxxxxx Holdco.
B. Prior to the closing date, it is anticipated that (i) Company will
amend its constating documents to authorize the issuance of an unlimited number
of Class C common shares; (ii) RoyNat will exchange the 8 Class A common shares
of Company owned by it for 8 Class C common shares of Company; (iii) pursuant to
resolutions of its Board of Directors, Company will increase its paid-up capital
as to the shares in the capital of Company owned by RoyNat (its outstanding
Class B and Class C common shares); (iv) pursuant to resolutions of its Board of
Directors, Millowave will increase its paid-up capital as to its capital stock
owned by Xxxxxx Holdco (its outstanding Class B common shares); (v) Millowave
and Company each will continue as corporations incorporated under the laws of
Nova Scotia; and (vi) Millowave and Company will amalgamate pursuant to the laws
of Nova Scotia ("Amalgamated Company").
C. After completion of the events described in paragraph B above, and
prior to the closing date, it is anticipated that (i) the Xxxxxx Family will own
780 Class A common shares of Amalgamated Company, (ii) RoyNat will own 140 Class
B common shares and 80 Class C common shares of Amalgamated Company, and (iii)
Xxxxxx Holdco will own 200 Class D common shares of Amalgamated Company.
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X. XXXXX owns all of the issued and outstanding shares in the capital
of Buyer, consisting of 100 common shares (the "Buyer Common Shares"). In
addition to the common shares of Buyer currently owned by REMEC, it is
contemplated that Buyer's Articles of Incorporation will authorize the issuance
of one million dividend access shares (the "Dividend Access Shares"), such
shares having the rights, privileges, restrictions and conditions set forth in
Exhibit A to this Agreement. It is contemplated that each Dividend Access Share
may be exchanged into one share of REMEC's common stock and US $0.01 in
accordance with the rights, privileges, restrictions and conditions of such
shares to be set forth in Buyer's Articles of Incorporation and the terms of
this Agreement and the Support Agreement to be entered into among the Buyer and
REMEC.
E. Buyer desires to purchase from Sellers, and Sellers desire to sell
to Buyer, all of the shares in the capital of Amalgamated Company outstanding
immediately prior to closing, for an aggregate purchase price of US $4,000,000
and issuance of a certain number of Dividend Access Shares, pursuant to the
terms and conditions set forth in this Agreement.
A G R E E M E N T
In consideration of the mutual promises contained herein and
intending to be legally bound the parties agree as follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
1.1 DEFINITIONS.
As used in this Agreement and the Exhibits and Schedules
delivered pursuant to this Agreement, capitalized terms shall have the meaning
ascribed to them set forth below.
"1997 Balance Sheet" means the unaudited balance sheet of
Company contained in the 1997 Financials.
"1997 Financials" means the unaudited balance sheet of Company
at June 30, 1997 and the related statements of income, shareholders' equity and
cash flows for the year then ended, prepared in accordance with GAAP.
"Act" means the Income Tax Act (Canada), as amended.
"Action" means any action, complaint, investigation, suit or
other proceeding, whether civil or criminal, in law or in equity, or before any
arbitrator or Governmental Entity.
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"Affiliate" means a Person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, a specified Person. For purposes of this Agreement, RoyNat
shall be considered an Affiliate of Company.
"Agreement" means this Agreement by and among Sellers, Buyer
and REMEC as amended or supplemented together with all Exhibits and Schedules
attached or incorporated by reference.
"Amalgamated Company" means the company resulting from the
amalgamation of Millowave and Company to be completed prior to Closing pursuant
to the Nova Scotia Companies Act.
"Amalgamation Date" means the date on which Millowave and
Company have amalgamated pursuant to the Nova Scotia Companies Act.
"Approval" means any approval, authorization, consent,
qualification or registration, or any waiver of the foregoing, or any required
to be obtained from, or any notice, statement or other communication required to
be filed with or delivered to any Governmental Entity or any other Person.
"Acquisition Cost" has the meaning set forth in Section 2.9.
"Audited Balance Sheet" means the balance sheet included in
the Audited Financials.
"Audited Financials" means the audited balance sheet of
Company at June 30, 1996 and the related statements of income, shareholders'
equity and cash flows for the year then ended, including the notes thereto, in
each case accompanied by a report of Company's Auditors substantially in the
form attached hereto as Exhibit B.
"Automatic Redemption Date" has the meaning set forth in
Section 1.1 of the Dividend Access Share Provisions annexed as Exhibit A.
"Business" means the design, manufacture and sale of microwave
components and multifunction subassemblies, including amplifiers, thin film
hybrids, transceivers and any other active microwave and millimeter wave
products, but excluding optical and cooled microwave and cooled millimeter wave
products and cable/wireless products, all of which constitute the business of
Amalgamated Company at Closing.
"Business Day" means any day other than a Saturday, a Sunday
or a day when banks are not open for business in both California and Ontario.
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"Buyer" means REMEC Canada ULC, an unlimited company
incorporated under the laws of Nova Scotia.
"Closing" means the consummation of the purchase and sale of
the Purchased Shares under this Agreement.
"Closing Date" means the date of the Closing.
"Code" means the United States Internal Revenue Code of 1986,
as amended.
"Company" means Nanowave Technologies Inc., a corporation
incorporated under the laws of Canada, and its legal successors and assigns.
"Company Auditors" means Xxxxxxx, Xxxxx & Xxxxxxxx,
independent auditors to Company.
"Company Financials" means the 1997 Financials and the Audited
Financials.
"Confidential Information" means all information and
compilations of information in whatever form (oral, written, machine readable or
otherwise) pertaining to Company, Amalgamated Company or REMEC or their
respective business, operations, properties, assets and liabilities, including,
without limitation, lists of customers and suppliers, pricing structures,
business files and records, trade secrets, Intellectual Property Rights and
financial information now or heretofore known to the disclosing party; provided,
however, that the phrase "Confidential Information" shall not include
information which:
(i) is in the public domain through no fault of the disclosing
party;
(ii) is lawfully received by any disclosing party from another
Person who, to the knowledge of the disclosing party, is lawfully in
possession of such Confidential Information and, to the knowledge of
the disclosing party, such other Person was not restricted from
disclosing the information to the disclosing party; or
(iii) is approved for disclosure by the party whose
information is to be disclosed prior to its disclosure.
"Contract" means any agreement, arrangement, bond, commitment,
franchise, indemnity, indenture, instrument, lease, license or understanding,
whether or not in writing.
"Current Market Price" has the meaning set forth in Section
1.1 of the Dividend Access Share Provisions annexed as Exhibit A.
"Delivery Date" has the meaning set forth in Section 2.9.
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"Dividend Access Shares" means the Dividend Access Shares in
the share capital of Buyer having the rights, privileges, restrictions and
conditions set forth in Exhibit A and "Dividend Access Share Provisions" means
the rights, privileges, restrictions and conditions set forth in Exhibit A.
"Xx. Xxxxxx" means Xxxxxx Xxxxxx, Ph.D., an individual.
"Encumbrance" means any claim, charge, easement, encumbrance,
defect of title, lease, covenant, security interest, lien, option, pledge,
rights of others, or restriction (whether on voting, sale, transfer, disposition
or otherwise), whether imposed by agreement, understanding, law, equity or
otherwise.
"Environmental Laws" means any and all applicable United
States and Canadian federal, state or provincial, municipal or local Laws
pertaining to the environment, health and safety matters or conditions,
Hazardous Materials, pollution or protection of the environment, including,
without limitation, Laws relating to: (i) on-site or off-site contamination;
(ii) occupational health and safety; (iii) chemical substances or products; (iv)
release of pollutants, contaminants, chemicals or other industrial, toxic or
radioactive substances or Hazardous Materials into the environment; (v) the
manufacture, processing, distribution, use, treatment, storage, transport,
packaging, labeling, sale, recycling, disposal, destruction, incineration,
burial, advertising, display or handling of Hazardous Materials; and (vi) any
preventive measures, remedial actions and notifications in connection with the
foregoing.
"Equity Securities" means any shares, capital stock or other
equity interest or any securities convertible into or exchangeable for shares,
capital stock or any other rights, warrants or options to acquire any of the
foregoing securities.
"Exchange Act" means the United States Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated by the SEC
thereunder.
"GAAP (Canada)" means generally accepted accounting principles
and practices as approved by the Canadian Institute of Chartered Accountants or
any superseding or supplemental documentation of equal authority promulgating
generally accepted accounting principles and practices, all as in effect from
time to time.
"GAAP (United States)" means generally accepted accounting
principles and practices in the United States as promulgated by the United
States Accounting Research Board, Accounting Principles Board and Financial
Accounting Standards Board or any superseding or supplemental documentation of
equal authority promulgating generally accepted accounting principles and
practices, all as in effect from time to time.
"Governmental Entity" means any government or any agency,
bureau, commission, court, department, official, political subdivision, tribunal
or other
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instrumentality of any government, whether federal, state, provincial,
municipal, county or local, domestic or foreign.
"Hazardous Material" means any material, substance, waste or
component thereof which is identified to be "hazardous" or "toxic" or otherwise
poses an actual or potential risk to public health and safety or to the
environment by virtue of being actually or potentially toxic, corrosive,
bioaccumulative, reactive, ignitable, radioactive, infectious or otherwise
harmful to public health and safety or the environment, the handling or disposal
of, or exposure to which, is regulated under any applicable United States and
Canadian federal, provincial, state or local Environmental Law.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended, and the related regulations and published
interpretations.
"Indemnifiable Claim" means any Loss for or against which any
party is entitled to indemnification under this Agreement; "Indemnified Party"
means the party entitled to indemnity hereunder; and "Indemnifying Party" means
the party obligated to provide indemnification hereunder.
"Intellectual Property Rights" means rights, patents,
trademarks, trade names, service marks, mask work rights, copyrights, processes,
designs, formulas, inventions, trade secrets, know-how, technology or other
intellectual rights and any applications or registrations therefor, and all mask
works, net lists, schematics, source code, computer software programs and all
other tangible and intangible information or material.
"Interim Balance Sheet" means the balance sheet included in
the Interim Financials.
"Interim Financials" means the unaudited balance sheet of
Company at August 30, 1997 and the related statements of income, shareholders'
equity and cash flows for the months ended July 31 and August 30, 1997.
"ITCs" means research and development investment tax credits
within the meaning of the Act.
"Laws" means all statutes, codes, ordinances, decrees, rules,
regulations, municipal by-laws, judicial or arbitral or administrative or
ministerial or departmental or regulatory judgments, orders, decisions, rulings
or awards, or any provisions of the foregoing, including general principles of
common and civil law and equity, binding on or affecting the Person referred to
in the context in which such word is used; and "Law" means any one of them.
"Liquidation Call Purchase Price" has the meaning set forth in
Section 2.4(a).
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"Liquidation Call Right" has the meaning set forth in Section
2.4(a).
"Liquidation Date" has the meaning set forth in Section 5.1 of
the Dividend Access Share Provisions annexed as Exhibit A.
"Loss" means any action, cost, damage, disbursement, expense,
liability, loss, deficiency, diminution in value, obligation, penalty or
settlement of any kind or nature, whether foreseeable or unforeseeable,
including but not limited to, interest or other carrying costs, penalties,
legal, accounting and other professional fees and expenses incurred in the
investigation, collection, prosecution and defense of claims and amounts paid in
settlement, that may be imposed on or otherwise incurred or suffered by the
specified person.
"Material Contract" means any Contract material to the
business of the subject person as of or after the date hereof and includes those
Contracts referenced in Section 3.24.
"Xxxxxx Employment Agreements" means the employment agreements
contemplated under Sections 9.11 and 10.8 to be entered into between Xx. Xxxxxx,
Company and REMEC and Xx. Xxxxxx and XXXXX substantially in the form attached as
Exhibit E and Exhibit F, respectively.
"Xxxxxx Family" means Xx. Xxxxxx, Xxx. Xxxxxx and the Xxxxxx
Trust.
"Xxxxxx Holdco" means 1256393 Ontario Limited, a corporation
incorporated under the laws of Ontario.
"Xxxxxx Trust" means the Xxxxxx Family Trust, an Ontario trust
formed pursuant to a trust deed dated as of March 27, 1997.
"Millowave" means Millowave Technologies Inc., a corporation
incorporated under the laws of Ontario.
"Millowave Shares" means all of the issued and outstanding
shares in the capital of Millowave.
"Xxx. Xxxxxx" means Xxxxxxx Xxxxxxxxx Xxxxx-Xxxxxx, an
individual.
"OHM" means OHM Technologies Inc.
"Permit" means any license, permit, authorization, franchise,
registration, certificate of authority or approval, or order, or any waiver of
the foregoing, required to be issued by any Governmental Entity.
"Person" means an association, a corporation, an individual, a
partnership, a trust or any other entity or organization, including a
Governmental Entity.
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"Plans" has the meaning set forth in Section 3.30.
"Purchase Price" has the meaning set forth in Section 2.2.
"Purchased Shares" means the 780 Class A common shares of
Amalgamated Company to be owned by the Xxxxxx Family and Xxxxxx Holdco
immediately prior to Closing, the 140 Class B Common Shares and the 80 Class C
Shares of Amalgamated Company to be owned by RoyNat immediately prior to Closing
and the 200 Class D common shares of Amalgamated Company to be owned by Xxxxxx
Holdco immediately prior to Closing.
"Put Exercise Date" has the meaning set forth in Section
2.9(b).
"Put Purchase Price" has the meaning set forth in Section
2.9(a).
"Put Right" has the meaning set forth in Section 2.9(a).
"Put Trigger Event" has the meaning set forth in Section
2.9(d).
"Redemption Call Right" has the meaning set forth in Section
2.6(a).
"Registrable Securities" has the meaning set forth in Section
8.1.
"Registration Statement" has the meaning set forth in Section
8.1.
"REMEC" means REMEC, Inc., a corporation incorporated under
the laws of California.
"REMEC Common Stock" means shares of the common stock of
REMEC, par value $0.01 per share.
"REMEC Financial Statements" means the balance sheet of REMEC
and its Subsidiaries as of August 1, 1997 (unaudited), the statement of income
of REMEC and its Subsidiaries for the period ended August 1, 1997 (unaudited),
and the audited balance sheet of REMEC and its Subsidiaries dated as of January
31, 1997 together with audited statements of operations, shareholders' equity
and changes in cash flow during the year ended January 31, 1997.
"Retraction Call Purchase Price" has the meaning set forth in
Section 2.6(a).
"Retraction Call Right" has the meaning set forth in Section
2.6(a).
"Retraction Date" has the meaning set forth in Section 6.1 of
the Dividend Access Share Provisions annexed as Exhibit A.
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"RoyNat" means RoyNat Inc., a corporation incorporated under
the laws of Canada.
"SEC" means the United States Securities and Exchange
Commission or any successor entity.
"Securities Act" means the United States Securities Act of
1933, as amended, and the rules and regulations promulgated by the SEC
thereunder.
"Sellers" means the Xxxxxx Family, Xxxxxx Holdco and RoyNat.
"Subsidiary" means, with respect to any entity, any
corporation or other organization, whether incorporated or unincorporated, of
which at least a majority of the securities or interests having by their terms
ordinary voting power to elect a majority of the board of directors or others
performing similar functions is owned, directly or indirectly, by such entity.
"Support Agreement" means the support agreement contemplated
under Section 10.7 to be entered into between Buyer and REMEC substantially in
the form of Exhibit C.
"Tax" means any foreign, federal, state, provincial, county or
local income, capital sales and use, goods and services, excise, franchise, real
and personal property, transfer, gross receipt, capital stock, production,
business and occupation, disability, employment, payroll, severance or
withholding tax or charge imposed by any Governmental Entity, any interest and
penalties (civil or criminal) related thereto or to the nonpayment thereof, and
any Loss in connection with the determination, settlement or litigation of any
Tax liability.
"Tax Return" means a report, return or other information
required to be supplied to a Governmental Entity with respect to Taxes
including, where permitted or required, combined or consolidated returns for any
group of entities that includes Company, Amalgamated Company or any Subsidiary.
1.2 RULES OF CONSTRUCTION.
For all purposes of this Agreement, the following rules of
construction shall apply, except as otherwise expressly provided:
(a) the terms defined in Section 1.1 have the meanings
assigned to them in that section and include the plural as well as the singular;
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(b) all accounting terms not otherwise defined herein
have the meanings assigned under GAAP (Canada) (or, if applicable to REMEC,
under GAAP (United States));
(c) all references in this Agreement to designated
"Articles," "Sections" and other subdivisions are to the designated Articles,
Sections and other subdivisions of the body of this Agreement;
(d) pronouns of either gender or neuter shall include,
as appropriate, the other pronoun forms;
(e) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision;
(f) the words "includes" and "including" are not
limiting; and
(g) the word "knowledge," when used with reference to
RoyNat, shall mean the current actual knowledge of the officers and directors of
RoyNat who have served as officers or directors of Company and any written
information within RoyNat's or such officers' and directors' possession, but
shall not mean any constructive knowledge of RoyNat or its officers or directors
and shall not create any inference that RoyNat or its officers and directors
have undertaken an independent inquiry, review or investigation of any matter to
which RoyNat's knowledge is referenced in this Agreement, and the word "know"
shall have a corresponding meaning.
ARTICLE II
PURCHASE AND SALE OF SHARES; CLOSING
2.1 SALE OF SHARES BY SELLERS.
Subject to the terms and conditions of this Agreement, each
Seller agrees to sell, assign and transfer the Purchased Shares owned by it at
Closing and deliver the certificates evidencing the Purchased Shares to Buyer at
Closing. Each Seller shall deliver to Buyer at Closing all certificates
evidencing the Purchased Shares held by it properly endorsed for transfer to or
accompanied by a duly executed stock power in favor of Buyer and otherwise in a
form acceptable for transfer on the books of Amalgamated Company. Sellers shall
be responsible for the payment of any Taxes payable with respect to the transfer
of the Purchased Shares to Buyer, except for Taxes, if any, payable by
Amalgamated Company solely on account of the change of control of Amalgamated
Company occurring as a result of the acquisition of the Purchased Shares or the
transactions described in Section 7.4. The previous sentence shall not in any
way affect or reduce the representations and warranties
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made by Xx. Xxxxxx and Xxxxxx Holdco contained in Section 3.11 nor shall it in
any way affect the representations and warranties made by RoyNat contained in
Section 4.9.
2.2 PURCHASE OF SHARES BY BUYER.
Subject to the terms and conditions of this Agreement, Buyer
agrees to purchase from Sellers the number of Purchased Shares set forth
opposite each Seller's name below, for the aggregate consideration ("Purchase
Price") of US $4,000,000 and the number of Dividend Access Shares determined in
accordance with the formula set forth below, payable to each Seller as indicated
below:
Number of Shares Consideration
Seller to be Sold to be Received
------ ---------- --------------
Xx. Xxxxxx 624 Class A common US $440,000 and 72,000
shares Dividend Access Shares
Xxx. Xxxxxx 78 Class A common US $440,000
shares
Xxxxxx Trust 78 Class A common US $440,000
shares
Xxxxxx Holdco 200 Class D shares US $1,240,000 and the number
of Dividend Access Shares
determined in accordance with
the formula set forth below
RoyNat 140 Class B common US $1,440,000
shares and 80 Class C
common shares
The number of Dividend Access Shares issuable to Xxxxxx Holdco as part of the
Purchase Price shall be equal to 115,500 minus the quotient of US $125,000
divided by the five-day weighted average of the closing sales price of REMEC
Common Stock reported on the Nasdaq National Market for the period ending the
day immediately preceding the Closing Date rounded to the nearest whole number
[115,500 -- (US $125,000/five-day weighted average closing sales price on REMEC
Common Stock)]. The Purchase Price is payable at Closing. The cash portion of
the Purchase Price is payable to the Xxxxxx Family, Xxxxxx Holdco and RoyNat in
United States dollars by wire transfer, bank draft, or certified cheque in
immediately available funds. The non-cash portion of the Purchase Price is
payable by delivery to Xx. Xxxxxx and Xxxxxx Holdco of certificates evidencing
the number of Dividend Access Shares set forth above or determined in accordance
with the formula described above, registered in the names of Xx. Xxxxxx and
Xxxxxx Holdco as so determined.
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2.3 CAPITALIZATION OF BUYER.
The Articles of Incorporation of Buyer shall provide for
authorized capital consisting of (i) one million common shares (all of the
issued and outstanding shares of which shall initially be held by REMEC) and
(ii) on or prior to Closing, one million Dividend Access Shares having the
rights, privileges, restrictions and conditions set forth in Exhibit A.
2.4 REMEC LIQUIDATION CALL RIGHTS.
(a) REMEC shall have the overriding right (the "Liquidation
Call Right"), in the event of and notwithstanding the proposed liquidation,
dissolution or winding-up of Buyer pursuant to Article V of the Dividend Access
Share Provisions, to purchase from all but not less than all of the holders of
the Dividend Access Shares all but not less than all of the Dividend Access
Shares held by each such holder on payment by REMEC of an amount per Dividend
Access Share equal to (a) the "Current Market Price" (as such term is defined in
Section 1.1 of the Dividend Access Shares Provisions) of a share of REMEC Common
Stock on the last Business Day prior to the "Liquidation Date" (as defined in
Section 5.1 of the Dividend Access Share Provisions), which shall be satisfied
in full by causing to be delivered to such holder one share of REMEC Common
Stock, plus (b) an additional amount equivalent to the full amount of all
declared and unpaid dividends on each such Dividend Access Share and an amount
equal to the amount of all dividends declared on REMEC Common Stock in respect
of which dividends in an identical amount have not been declared and paid on
each such Dividend Access Share in accordance with Section 3.1 of the Dividend
Access Share Provisions, plus (c) US $0.01 (collectively, the "Liquidation Call
Purchase Price"), provided that if the record date for any such declared and
unpaid dividends occurs on or after the Liquidation Date, the Liquidation Call
Purchase Price shall not include such additional amount equivalent to such
dividends. In the event of the exercise of the Liquidation Call Right by REMEC,
each holder shall be obligated to sell all the Dividend Access Shares held by
the holder to REMEC on the Liquidation Date on payment by REMEC to the holder of
the Liquidation Call Purchase Price for each such Dividend Access Share.
(b) To exercise the Liquidation Call Right, REMEC must notify
Buyer and the holders of Dividend Access Shares of REMEC's intention to exercise
such right at least 20 days before the Liquidation Date in the case of a
voluntary liquidation, dissolution or winding up of Buyer and at least five
Business Days before the Liquidation Date in the case of an involuntary
liquidation, dissolution or winding up of Buyer (in either case, the
"Liquidation Notification Date"). Buyer or an agent authorized by Buyer shall
notify the holders of Dividend Access Shares as to whether or not REMEC has
exercised the Liquidation Call Right forthwith after the Liquidation
Notification Date. If REMEC exercises the Liquidation Call Right on or before
the Liquidation Notification Date and notice is so given, on the Liquidation
Date, REMEC will purchase, and the holders will sell, all of
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the Dividend Access Shares then outstanding for a price per Dividend Access
Share equal to the Liquidation Call Purchase Price.
(c) Subject to Section 2.9, for the purposes of completing the
purchase of the Dividend Access Shares pursuant to the Liquidation Call Right,
REMEC shall deposit with Buyer or an agent authorized by Buyer, prior to the
Liquidation Date, certificates representing the aggregate number of shares of
REMEC Common Stock deliverable by REMEC in payment of the Liquidation Call
Purchase Price which shall be duly issued as fully paid and non-assessable
shares of REMEC Common Stock and a cheque or cheques in the amount of the
remaining portion of the total Liquidation Call Purchase Price. Provided that
the total Liquidation Call Purchase Price has been so deposited with Buyer or an
agent authorized by Buyer, on and after the Liquidation Date, the rights of each
holder of Dividend Access Shares will be limited to receiving such holder's
proportionate part of the total Liquidation Call Purchase Price payable by REMEC
upon presentation and surrender by the holder of certificates representing the
Dividend Access Shares held by such holder and the holder shall on and after the
Liquidation Date be considered and deemed for all purposes to be the holder of
the shares of REMEC Common Stock delivered to it. Upon surrender to Buyer or an
agent authorized by Buyer of a certificate or certificates representing Dividend
Access Shares properly endorsed by the holder for transfer to REMEC and delivery
of such additional documents and instruments as Buyer or the authorized agent
may reasonably require, the holder of such surrendered certificate or
certificates shall be entitled to receive in exchange therefor, and Buyer or the
authorized agent on behalf of REMEC shall deliver to such holder, certificates
representing the shares of REMEC Common Stock to which the holder is entitled
and a cheque or cheques of REMEC payable in US dollars at any branch of the
bankers of REMEC or of Buyer in Canada in payment of the remaining portion of
the total Liquidation Call Purchase Price. If REMEC does not exercise the
Liquidation Call Right in the manner described above, on the Liquidation Date
the holders of the Dividend Access Shares will be entitled to receive in
exchange therefore the liquidation price otherwise payment by Buyer in
connection with the liquidation, dissolution or winding-up of Buyer pursuant to
Article V of the Dividend Access Share Provisions.
2.5 REMEC REDEMPTION CALL RIGHT.
(a) REMEC shall have the overriding right (the "Redemption
Call Right"), in the event of and notwithstanding the proposed redemption of
Dividend Access Shares by Buyer pursuant to Article VII of the Dividend Access
Share Provisions, to purchase from all but not less than all of the holders of
Dividend Access Shares to be redeemed on the "Automatic Redemption Date" (as
such term is defined in Section 1.1 of the Dividend Access Share Provisions) all
but not less than all of the Dividend Access Shares held by each such holder
that are otherwise to be redeemed on payment by REMEC to the holder of an amount
per such Dividend Access Share equal to (a) the Current Market Price of a share
of REMEC Common Stock on the last Business Day prior to the Automatic Redemption
Date which shall be satisfied in full by causing to be delivered to such holder
one share of REMEC Common Stock, plus (b) an additional amount equivalent to the
full amount of all declared and unpaid
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dividends on each such Dividend Access Share and an amount equal to the amount
of all dividends declared on REMEC Common Stock in respect of which dividends in
an identical amount have not been declared and paid on each such Dividend Access
Share in accordance with Section 3.1 of the Dividend Access Share Provisions,
plus (c) US $0.01 (collectively, the "Redemption Call Purchase Price"), provided
that if the record date for any such declared and unpaid dividends occurs on or
after the Automatic Redemption Date, the Redemption Call Purchase Price shall
not include such additional amount equivalent to such dividends. In the event of
the exercise of the Redemption Call Right by REMEC, each holder shall be
obligated to sell all the Dividend Access Shares held by the holder and
otherwise to be redeemed to REMEC on the Automatic Redemption Date on payment by
REMEC to the holder of the Redemption Call Purchase Price for each such Dividend
Access Share.
(b) To exercise the Redemption Call Right, REMEC must notify
Buyer and the holders of Dividend Access Shares of REMEC's intention to exercise
such right at least 20 days before the Automatic Redemption Date (the
"Redemption Notification Date"). Buyer or an agent authorized by Buyer shall
notify the holders of the Dividend Access Shares as to whether or not REMEC has
exercised the Redemption Call Right forthwith after the Redemption Notification
Date. If REMEC exercises the Redemption Call Right on or before the Redemption
Notification Date and notice is so given, on the Automatic Redemption Date REMEC
will purchase, and the holders will sell, all of the Dividend Access Shares to
be otherwise redeemed for a price per Dividend Access Share equal to the
Redemption Call Purchase Price.
(c) Subject to Section 2.9, for the purposes of completing the
purchase of Dividend Access Shares pursuant to the Redemption Call Right, REMEC
shall deposit with Buyer or an agent authorized by Buyer prior to the Automatic
Redemption Date, certificates representing the aggregate number of shares of
REMEC Common Stock deliverable by REMEC in payment of the Redemption Call
Purchase Price which shall be duly issued as fully paid and non-assessable
shares of REMEC Common Stock and a cheque or cheques in the amount of the
remaining portion of the total Redemption Call Purchase Price. Provided that the
total Redemption Call Purchase Price has been so deposited with Buyer or an
authorized agent, on and after the Automatic Redemption Date the rights of each
holder of Dividend Access Shares so purchased will be limited to receiving such
holder's proportionate part of the Redemption Call Purchase Price payable by
REMEC upon presentation and surrender by the holder of certificates representing
the Dividend Access Shares purchased by REMEC from such holder and the holder
shall on and after the Automatic Redemption Date be considered and deemed for
all purposes (including for purposes of dividend entitlement, if any) to be the
holder of the shares of REMEC Common Stock delivered to such holder. Upon
surrender to Buyer or an authorized agent of a certificate or certificates
representing Dividend Access Shares properly endorsed by the holder for transfer
to REMEC and delivery of such additional documents and instruments as Buyer or
the authorized agent may reasonably require, the holder of such surrendered
certificate or certificates shall be entitled to receive in exchange therefor,
and Buyer or the authorized agent on behalf of REMEC
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shall deliver to such holder, certificates representing the shares of REMEC
Common Stock to which the holder is entitled and a cheque or cheques of REMEC
payable in US dollars at any branch of the bankers of REMEC or of Buyer in
Canada in payment of the remaining portion of the total Redemption Call Purchase
Price. If REMEC does not exercise the Redemption Call Right in the manner
described above, on the Automatic Redemption Date, the holders of the Dividend
Access Shares will be entitled to receive in exchange therefor the redemption
prices otherwise payable by Buyer in connection with the redemption of Dividend
Access Shares pursuant to Article VII of the Dividend Access Share Provisions.
2.6 REMEC RETRACTION CALL RIGHT.
(a) REMEC shall have the overriding right (the "Retraction
Call Right"), notwithstanding the proposed retraction of Dividend Access Shares
by a Seller pursuant to Article VI of the Dividend Access Share Provisions, to
purchase from the holder having exercised the right to cause Buyer to redeem on
the "Retraction Date" (as such term is defined in Section 6.1 of the Dividend
Access Share Provisions) all but not less than all of the Dividend Access Shares
held by each such holder that are otherwise to be redeemed on payment by REMEC
to the holder of an amount per such Dividend Access Share equal to (a) the
Current Market Price of a share of REMEC Common Stock on the last Business Day
prior to the Retraction Date which shall be satisfied in full by causing to be
delivered to such holder one share of REMEC Common Stock, plus (b) an additional
amount equivalent to the full amount of all declared and unpaid dividends on
each such Dividend Access Share and an amount equal to the amount of all
dividends declared on REMEC Common Stock in respect of which dividends in an
identical amount have not been declared and paid on each such Dividend Access
Share in accordance with Section 3.1 of the Dividend Access Share Provisions,
plus (c) US $0.01 (collectively the "Retraction Call Purchase Price"), provided
that if the record date for any such declared and unpaid dividends occurs on or
after the Retraction Date, the Retraction Call Purchase Price shall not include
such additional amount equivalent to such dividends. In the event of the
exercise of the Retraction Call Right by REMEC, each holder shall be obligated
to sell all the Dividend Access Shares held by the holder and otherwise to be
redeemed to REMEC on the Retraction Date on payment by REMEC to the holder of
the Retraction Call Purchase Price for each such Dividend Access Share.
(b) Upon receipt by Buyer of a "Retraction Request" (as such
term is defined in Section 6.1 of the Dividend Access Share Provisions), Buyer
shall immediately notify REMEC thereof. To exercise the Retraction Call Right,
REMEC must notify Buyer and the relevant holders of Dividend Access Shares of
REMEC's intention to exercise such right within ten Business Days of the receipt
by Buyer of a Retraction Request (the "Retraction Notification Date"). Buyer or
an agent authorized by Buyer shall notify the holders of the Dividend Access
Shares as to whether or not REMEC has exercised the Retraction Call Right
forthwith after the Retraction Notification Date. If REMEC exercises the
Retraction Call Right on or before the Retraction Notification Date and notice
is so given, on the Retraction Date, REMEC will purchase and the holders will
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sell all of the Dividend Access Shares to be otherwise redeemed for a price per
Dividend Access Share equal to the Retraction Call Purchase Price.
(c) Subject to Section 2.9, for the purposes of completing the
purchase of Dividend Access Shares pursuant to the Retraction Call Right, REMEC
shall deposit with Buyer or an agent authorized by Buyer prior to the Retraction
Date, certificates representing the aggregate number of shares of REMEC Common
Stock deliverable by REMEC in payment of the Retraction Call Purchase Price
which shall be duly issued as fully paid and non-assessable shares of REMEC
Common Stock and a cheque or cheques in the amount of the remaining portion of
the total Retraction Call Purchase Price. Provided that the total Retraction
Call Purchase Price has been so deposited with Buyer or an agent authorized by
Buyer, on and after the Retraction Date the rights of each holder of Dividend
Access Shares so purchased will be limited to receiving such holder's
proportionate part of the Retraction Call Purchase Price payable by REMEC upon
presentation and surrender by the holder of certificates representing the
Dividend Access Shares purchased by REMEC from such holder and the holder shall
on and after the Retraction Date be considered and deemed for all purposes
(including for purposes of dividend entitlement, if any) to be the holder of the
shares of REMEC Common Stock delivered to such holder. Upon surrender to Buyer
or an agent authorized by Buyer of a certificate or certificates representing
Dividend Access Shares properly endorsed by the holder for transfer to REMEC and
delivery of such additional documents and instruments as Buyer or the authorized
agent may reasonably require, the holder of such surrendered certificate or
certificates shall be entitled to receive in exchange therefor, and Buyer or the
authorized agent on behalf of REMEC shall deliver to such holder, certificates
representing the shares of REMEC Common Stock to which the holder is entitled
and a cheque or cheques of REMEC payable in US dollars at any branch of the
bankers of REMEC or of Buyer in Canada in payment of the remaining portion of
the total Retraction Call Purchase Price. If REMEC does not exercise the
Retraction Call Right in the manner described above, on the Retraction Date, the
holders of the Dividend Access Share will be entitled to receive in exchange
therefor the retraction price otherwise payable by Buyer in connection with the
retraction of Dividend Access Shares pursuant to Article VI of the Dividend
Access Share Provisions.
2.7 WITHHOLDING RIGHTS.
(a) REMEC and Buyer shall be entitled to deduct and withhold
from the consideration otherwise payable to any holder of Dividend Access
Shares, including any dividend payments in respect of the Dividend Access
Shares, such amount as REMEC or Buyer is required to deduct and withhold with
respect to such payment under the Code, the Act or any provision of state,
federal, provincial, local or foreign tax law. To the extent that amounts are so
withheld, such withheld amounts shall be treated for all purposes hereof as
having been paid to the holder of Dividend Access Shares in respect of which
such deduction and withholding was made, provided that such withheld amounts are
actually remitted to the
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appropriate taxing authority. To the extent that the amount so required or
permitted to be deducted or withheld from any payment to a holder exceeds the
cash portion of the consideration otherwise payable to the holder REMEC and
Buyer, upon at least ten days prior written notice to such holder, are hereby
authorized to sell or otherwise dispose of at fair market value such portion of
such non-cash consideration otherwise payable to the holder as is necessary to
provide sufficient funds to REMEC or Buyer, as the case may be, in order to
enable it to comply with such deduction or withholding requirement and REMEC or
Buyer, as the case may be, shall give an accounting to the holder with respect
thereof and any balance of such proceeds of sale.
2.8 PUT RIGHT.
(a) Xx. Xxxxxx shall have the right and, subject to obtaining
any necessary regulatory relief, each holder of Dividend Access Shares shall
have the right (the "Put Right"), at any time and from time to time, to require
REMEC to purchase a minimum of 10,000 Dividend Access Shares held by each such
holder on payment by REMEC of an amount per Dividend Access Share equal to (a)
the Current Market Price of a share of REMEC Common Stock on the last Business
Day prior to the Put Closing Date, which shall be satisfied in full by causing
to be delivered to such holder one share of REMEC Common Stock, plus (b) an
additional amount equivalent to the full amount of all dividends declared and
unpaid on each such Dividend Access Share and an amount equal to the amount of
all dividends declared on REMEC Common Stock in respect of which dividends in an
identical amount have not been declared and paid on each such Dividend Access
Share in accordance with the Dividend Access Share Provisions, plus (c) US $0.01
(collectively the "Put Purchase Price"), provided that if the record date for
any such declared and unpaid dividends occurs on or after the last Business Day
prior to the Put Closing Date, the Put Purchase Price shall not include such
additional amount equivalent to such dividends. REMEC will use its reasonable
best efforts to obtain all regulatory relief necessary to issue the Put Right to
each holder of the Dividend Access Shares within 90 days of Closing.
(b) To exercise the Put Right, a holder of Dividend Access
Shares must notify REMEC of such holder's intention to exercise such right (the
date of such notification is referred to in this Agreement as the "Put Exercise
Date"). If a holder exercises the Put Right, REMEC will purchase, and such
holder will sell, all of the Dividend Access Shares set forth in the holder's
Put Right notification and then held by such holder for a price per Dividend
Access Share equal to the Put Purchase Price. The closing of the transaction
resulting from the exercise of a Put Right shall occur on the tenth Business Day
following the Put Exercise Date (the "Put Closing Date").
(c) Subject to Section 2.9, for the purposes of completing the
purchase of the Dividend Access Shares pursuant to the Put Right, REMEC shall
deposit with Buyer or an agent authorized by Buyer, prior to the Put Closing
Date, certificates representing the aggregate number of shares of REMEC Common
Stock deliverable by REMEC in payment of the Put Purchase Price which shall be
duly issued as fully paid and non-assessable shares
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of REMEC Common Stock and a cheque or cheques in the amount of the remaining
portion of the total Put Purchase Price. Provided that the total Put Purchase
Price has been so deposited with Buyer or an authorized agent, on and after the
Put Closing Date the rights of each holder of Dividend Access Shares will be
limited to receiving such holder's proportionate part of the total Put Purchase
Price payable by REMEC upon presentation and surrender by the holder of
certificates representing the Dividend Access Shares held by such holder and the
holder shall on and after the Put Closing Date by considered and deemed for all
purposes to be the holder of the shares of REMEC Common Stock delivered to it.
Upon surrender to Buyer or an agent authorized by Buyer of a certificate or
certificates representing Dividend Access Shares properly endorsed by the holder
for transfer to REMEC and delivery of such additional documents and instruments
as Buyer or the authorized agent may reasonably require, the holder of such
surrendered certificate or certificates shall be entitled to receive in exchange
therefor, and Buyer or the authorized agent on behalf of REMEC shall deliver to
such holder, certificates representing the shares of REMEC Common Stock to which
the holder is entitled and a cheque or cheques of REMEC payable in US dollars at
any branch of the bankers of REMEC or of Buyer in Canada in payment of the
remaining portion of the total Put Purchase Price.
2.9 CASH OPTION; SECURITIES LAW COMPLIANCE.
(a) Notwithstanding any provision to the contrary in Sections
2.4, 2.5, 2.6 and 2.8, in the event that, on the Liquidation Date, the Automatic
Redemption Date, any Retraction Date or any Put Exercise Date, a holder of
Dividend Access Shares resident in Ontario would be entitled to receive,
pursuant to either of Sections 2.4, 2.5, 2.6 or 2.8, REMEC Common Stock having
an aggregate acquisition cost determined by reference to the Current Market
Price (the "Acquisition Cost") of less than CDN $150,000, then REMEC may, at its
sole option either: (i) issue the said REMEC Common Stock within 90 days from
the date upon which delivery of the REMEC Common Stock to such holder is
otherwise due (the "Delivery Date"); or (ii) not deliver REMEC Common Stock to
such holder on the Delivery Date, but, in lieu thereof, pay to the holder on a
date which is not later than 90 days after the Delivery Date an amount equal to
the Acquisition Cost, whereupon the obligation to issue and transfer REMEC
Common Stock to such holder shall be deemed to have been fulfilled.
(b) Notwithstanding any provision to the contrary in Sections
2.4, 2.5, 2.6 and 2.8, in the event that, on the Liquidation Date, the Automatic
Redemption Date, any Retraction Date or any Put Exercise Date, any holder of
Dividend Access Shares is not resident in Ontario or the United States of
America, such holder shall not be entitled to receive any payment from REMEC
pursuant to Sections 2.4, 2.5, 2.6 and 2.8, as the case may be, unless and until
such holder provides (at its own expense) an opinion of counsel acceptable to
REMEC and qualified to practice law in the jurisdiction where the holder is
resident to the effect that the issuance and transfer of REMEC Common Stock to
such holder will not require the preparation by REMEC of a prospectus,
registration statement or similar document, will not expose REMEC to ongoing
compliance obligations similar to those
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imposed on a "reporting issuer" under the Securities Act (Ontario) and any fee
relating to such transaction in excess of that which would have been paid had
the holder been resident in Ontario has been paid (for which purpose, such
counsel shall be entitled to rely on a certificate of the holder as to the
details of such payment). If requested by such holder, REMEC shall (at such
holder's expense) use its reasonable best efforts to obtain any necessary
regulatory relief in order that the opinion referred to above may be provided.
2.10 SUPPORT AGREEMENT.
REMEC agrees to enter into a support agreement on Closing with
Buyer in the form annexed hereto as Exhibit C.
2.11 EXECUTION OF COUNTERPART.
No Person shall become a holder of Dividend Access Shares
without first having executed a counterpart of this Agreement substantially in
the form of Exhibit D annexed hereto for the purposes of being bound by Sections
2.4, 2.5, 2.6, 2.7, 2.8 and 2.9 of this Agreement.
2.12 SECTION 85 ELECTIONS.
Buyer, Xx. Xxxxxx and Xxxxxx Holdco agree to jointly elect in
prescribed form and within the prescribed time elections under subsection 85(1)
of the Act and relevant provisions of any applicable provincial legislation at
the respective amounts selected by Xx. Xxxxxx and Xxxxxx Holdco to be the
proceeds of disposition and the cost of the Purchased Shares sold hereunder.
2.13 THE CLOSING.
The Closing shall take place at the offices of Stikeman,
Elliott, Xxxxxxxx Xxxxx Xxxx, Xxxxx 0000, Xxxxxxx, at 10:00 a.m. local time, on
October 15, 1997, or on such later date as Sellers and Buyer may agree.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
XX. XXXXXX AND XXXXXX HOLDCO
Xx. Xxxxxx and Xxxxxx Holdco each represent and warrant,
jointly and severally, to Buyer and REMEC as follows:
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3.1 ORGANIZATION AND AUTHORITY.
Company: (i) is a corporation duly incorporated, validly
existing and in good standing under the laws of Canada; (ii) has all necessary
corporate power to own and lease its properties, to carry on its business as now
being conducted and to enter into and perform its obligations pursuant to this
Agreement and all agreements to which Company is or will be a party that are
Exhibits to this Agreement; and (iii) is qualified to do business in all
jurisdictions in which the failure to so qualify would have a material adverse
effect on its business or financial condition. Company does not have any
Subsidiaries and does not directly or indirectly own any Equity Securities in
any Person. Company has delivered to REMEC or its representatives complete and
correct copies of its constating documents, as amended, as in effect on the date
of this Agreement, certified as true, complete and correct copies by Company's
President. Such constating documents are in full force and effect. Company is
not in violation of any provisions of its constating documents.
On the Amalgamation Date, the Amalgamated Company: (i) will be
a corporation duly amalgamated, validly existing and in good standing under the
laws of Nova Scotia; (ii) will have all necessary corporate power to own and
lease its properties, to carry on the business of the Company as conducted
immediately prior to the Amalgamation Date and will be able to enter into and
perform its obligations pursuant to this Agreement and all agreements to which
Company or Amalgamated Company is or will be a party that are Exhibits to this
Agreement; and (iii) will be qualified to do business in all jurisdictions in
which the failure to so qualify would have a material adverse effect on its
business or financial condition. Amalgamated Company will not have any
Subsidiaries and will not directly or indirectly own any Equity Securities in
any Person. Amalgamated Company will deliver to REMEC, or its representatives,
complete and correct copies of its constating documents, as amended, as in
effect on the Amalgamation Date, certified as true, complete and correct copies
by Amalgamated Company's President. Such constating documents shall, on the
Amalgamation Date, be in full force and effect. The Amalgamated Company shall
not, on the Amalgamation Date, be in violation of any provisions of its
constating documents.
3.2 CAPITALIZATION OF COMPANY AND AMALGAMATED COMPANY.
(a) As of the date of this Agreement, the authorized capital
of Company consists of an unlimited number of Class A common shares and an
unlimited number of Class B common shares of which only 86 Class A common shares
and 14 Class B common shares are issued and outstanding. Immediately preceding
the Closing and on the Amalgamation Date, the authorized capital of Amalgamated
Company will consist of one million Class A common shares, 780 shares of which
will be issued and outstanding at such time, one million Class B common shares,
140 shares of which will be issued and outstanding at such time, one million
Class C common shares, 80 shares of which will be issued and outstanding at such
time and one million Class D common shares, 200 shares of which will be issued
and outstanding at such time. All issued and outstanding shares in the
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capital of Company have been duly authorized and validly issued, and are fully
paid and nonassessable, and have been issued in compliance with all applicable
securities laws. All of the issued and outstanding shares in the capital of
Amalgamated Company will, immediately prior to Closing, be duly authorized and
validly issued, fully paid and nonassessable and issued in compliance with all
applicable securities laws. Except as set forth on Schedule 3.2 and as
contemplated under Section 7.3 or otherwise under this Agreement, there are no
outstanding warrants, options, agreements, convertible or exchangeable
securities or other commitments pursuant to which Company is or may become
obligated to issue, sell, purchase, retire or redeem any shares of capital stock
or other securities.
(b) Except as set forth on Schedule 3.2, Company does not have
in effect any stock options, stock appreciation rights or other similar plan
granting the right to acquire any Equity Security of Company to any Person. None
of the plans set forth on Schedule 3.2 will survive the transactions
contemplated by this Agreement.
(c) Except as set forth on Schedule 3.2, there is no right of
first refusal, co-sale right, right of participation, right of first offer,
option or other restriction on transfer applicable to any shares in the capital
of Company which apply to or survive the transactions contemplated by this
Agreement.
(d) Except as set forth on Schedule 3.2, none of Company,
Xxxxxx Family or Xxxxxx Holdco is a party or subject to any agreement or
understanding, and there is no agreement or understanding between or among any
persons that affects or relates to the voting or giving of written consent with
respect to any outstanding security of Company. None of such agreements or
understandings set forth on Schedule 3.2 will survive the transactions
contemplated by this Agreement.
3.3 AUTHORIZATION.
The execution and delivery of this Agreement and all
agreements to which Xxxxxx Holdco is or will be a party that are Exhibits to
this Agreement and the performance hereunder and thereunder by Xxxxxx Holdco
have been duly authorized by all necessary corporate action on the part of
Xxxxxx Holdco. No trust action is required on the part of the Xxxxxx Trust in
order to duly execute, deliver and perform its obligations under this Agreement
and all agreements to which Xxxxxx Trust is or will be a party that are Exhibits
to this Agreement. Xx. Xxxxxx and Xxx. Xxxxxx have the legal capacity and
authority to enter into and perform this Agreement and all other agreements to
which he or she is or will be a party that are Exhibits to this Agreement. This
Agreement and all other agreements to which the Xxxxxx Family or Xxxxxx Holdco
is or will be a party will constitute legal, valid and binding obligations of
the Xxxxxx Family and Xxxxxx Holdco, enforceable against the Xxxxxx Family or
Xxxxxx Holdco in accordance with their terms, subject as to enforcement to
bankruptcy, insolvency, reorganization, arrangement, moratorium and other laws
of general applicability relating to or affecting creditors' rights and to
general principles of equity.
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3.4 TITLE TO SHARES.
Xx. Xxxxxx, Xxx. Xxxxxx and the Xxxxxx Trust own, beneficially
and of record, 624, 78 and 78 Class A shares of Millowave, respectively, free
and clear of all Encumbrances. Xxxxxx Holdco owns, beneficially and of record,
200 Class B shares of Millowave free and clear of all Encumbrances. Such Class A
common shares and Class B common shares constitute all of the issued and
outstanding shares in the capital of Millowave. Immediately preceding the
Closing and on the Amalgamation Date (i) Xx. Xxxxxx, Xxx. Xxxxxx and the Xxxxxx
Trust will own, beneficially and of record, 624, 78 and 78 Class A common shares
of Amalgamated Company, respectively, (ii) Xxxxxx Holdco will own, beneficially
and of record, 200 Class D common shares of Amalgamated Company free and clear
of all Encumbrances. Upon consummation of the transactions contemplated under
this Agreement, the Xxxxxx Family and Xxxxxx Holdco will transfer to Buyer the
Purchased Shares owned by them free and clear of all Encumbrances.
3.5 NO VIOLATION OF OTHER INSTRUMENTS.
Except as set forth on Schedule 3.5, neither the execution of
this Agreement or any other agreement to which the Xxxxxx Family or Xxxxxx
Holdco is or will be a party that is an Exhibit to this Agreement nor the
performance of any of them by them will: (i) conflict with or result in any
breach or violation of the terms of any Law applicable to the Xxxxxx Family,
Xxxxxx Holdco or Company; (ii) conflict with, or result in, with or without the
passage of time or the giving of notice, any breach of any of the terms,
conditions and provisions of, or constitute a default under or otherwise give
another party the right to terminate, or result in the creation of any
Encumbrance upon any of the assets or properties of Company pursuant to, any
material indenture, mortgage, lease, agreement or other instrument to which
Company is a party or by which it or any of its assets or properties are bound;
(iii) permit the acceleration of the maturity of any indebtedness of Company or
of any other person secured by the assets or properties of Company; or (iv)
violate or conflict with any provision of Company's or Xxxxxx Holdco's
constating documents or the Xxxxxx Trust.
3.6 CONSENTS.
No consent from any third party and no consent, approval or
authorization of, or declaration, filing or registration with, any government or
regulatory authority is required to be made or obtained by Company, the Xxxxxx
Family or Xxxxxx Holdco in order to permit the execution, delivery or
performance of this Agreement or any other agreement to which the Xxxxxx Family
or Xxxxxx Holdco is or will be a party that is an Exhibit to this Agreement, or
the consummation of the transactions contemplated by this Agreement and such
other agreements, except for such consents, approvals, orders, authorizations,
registrations, declarations and filings set forth on Schedule 3.6.
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3.7 COMPLIANCE WITH LAW.
Company holds all Permits necessary for the lawful conduct of
Company's business as currently conducted pursuant to all applicable Laws, and
the Xxxxxx Family and Xxxxxx Holdco know of no violation thereof, other than any
such violation that would not have a material adverse effect on Company's
business or financial results. Company is not in violation of any Law (including
applicable Environmental Laws, equal employment and civil rights regulations,
wages, hours and the payment of employment Taxes and occupational health and
safety legislation), which violation would reasonably be expected to have a
material adverse effect on the condition, financial or otherwise, assets,
liabilities, business or results of operations of Company. Schedule 3.7 contains
a true and complete list of all Permits necessary for the lawful conduct of
Company's business wherever conducted pursuant to all applicable Laws.
3.8 INVESTMENTS IN OTHERS.
Except as set forth on Schedule 3.8, Company does not have any
investment in or advance or loan to or guarantee of, or any commitment to make
any investment in, advance or loan to or guarantee of, any Person.
3.9 FINANCIAL STATEMENTS.
The Company Financials (i) have been and will be prepared in
accordance with the books and records of Company; (ii) fairly present and will
present the financial position results of operations, owners equity and cash
flow of Company as of the dates and for the periods indicated therein; and (iii)
have been and will be prepared in accordance with GAAP (Canada) consistently
applied.
3.10 ABSENCE OF UNDISCLOSED LIABILITIES.
As of June 30, 1997, Company had no indebtedness or liability
(absolute, contingent, asserted, unasserted, known or unknown) which is not
shown or provided for in full on the 1997 Balance Sheet. Except as set forth or
provided for in the 1997 Balance Sheet, Company does not have outstanding on the
date of this Agreement, nor will it have outstanding on the Closing Date, any
indebtedness or liability (absolute, contingent, asserted, unasserted, known or
unknown) other than those incurred since June 30, 1997 in the ordinary course of
business consistent with past practice.
3.11 TAX RETURNS AND PAYMENTS.
(a) All Tax returns, reports and forms required to be filed
by, or with respect to any activities or income of, Company have been or will be
timely filed, all such returns are true and correct in all material respects,
and all Taxes and other governmental charges of any nature whatsoever which were
shown to be due or claimed to be due on such
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returns, reports and forms or which otherwise may be owed have been paid or
adequate provision for the payment thereof has been made. Schedule 3.11 includes
a complete and correct list of all such returns, reports and forms filed in
connection with any year or portion thereof which ended on or after the
Company's incorporation. Except as set forth on Schedule 3.11, Xx. Xxxxxx and
Xxxxxx Holdco have no knowledge of any assessment of deficiency or additional
Tax or other governmental charge respecting Company or its business or affairs,
or any knowledge of any completed, pending or threatened assessment, Tax audit,
investigation, suits or claims respecting Company or its business or affairs by
any taxing or other governmental authority, and, to the knowledge of Xx. Xxxxxx
and Xxxxxx Holdco, no waivers of statutes of limitations have been requested
with respect to Company or any of its corporate Affiliates and no extensions of
time have been requested with respect to the filing of any Tax return, election
or designation. Company has no liability for Taxes arising from previously filed
Tax returns, reports or forms, or any assessments or reassessments relating
thereto. The amounts provided for taxes on the 1997 Balance Sheet are, and will
be, sufficient for the payment of all accrued and unpaid Taxes for all periods
prior to the date of such balance sheet.
(b) There is no pending, or, to the knowledge of Xx. Xxxxxx
and Xxxxxx Holdco, threatened claim by any Governmental Entity in any
jurisdiction in which Company does not pay taxes or file Tax Returns that
Company is required to pay taxes or file Tax Returns in such jurisdiction.
(c) Company has been reviewed, determined and assessed for
Canadian federal and provincial income tax for all years to and including the
fiscal year of Company ended March 31, 1995 and has been assessed with respect
to its original return for the year ended March 31, 1995.
(d) Xx. Xxxxxx and Xxxxxx Holdco are not aware of any
contingent tax liabilities or any grounds that could prompt an assessment or
reassessment of Company, including, without limitation, aggressive treatment of
income, expenses, credits or other amounts in filing of any Tax Return, and have
not received any indication from any Governmental Entity that an assessment or
reassessment of Company, regardless of its merits, is proposed.
(e) Company has not at any time benefited from a forgiveness
of debt or entered into any transaction or arrangement (including conversion of
debt into shares) which would have resulted in the application of Section 80 to
80.04 of the Act.
(f) Except as described in Schedule 3.11, Company has not made
any elections or designations for purposes of the Act including, for greater
certainty, in any election under Section 85 or 83 of the Act or any relevant
provincial taxing statute, or for purposes of any administrative ruling or
notices or administrative practices pursuant to such Act or any such statute.
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(g) Company has duly collected and remitted all good and
services taxes and provincial sales taxes in accordance with the Excise Tax Act
(Canada) and all applicable Canadian provincial statutes.
(h) Each of Millowave, Xxxxxx Holdco and the Xxxxxx Trust is
not a non-resident of Canada for purposes of the Act. Each of Xx. Xxxxxx and
Xxx. Xxxxxx is a citizen and not a non-resident of Canada for purposes of the
Act and is a nonresident alien of the United States for purposes of the Code.
Millowave is a corporation incorporated under the laws of Ontario and its
principal place of business is Toronto, Canada. Xxxxxx Holdco is a corporation
incorporated under the laws of Ontario and its principal place of business is
Toronto, Canada. None of Company, Millowave or Xxxxxx Holdco is engaged in
United States trade or business as interpreted under the Code.
(i) All ITCs claimed by Company in any Tax return were claimed
by Company in accordance with the Act and all applicable provincial statutes,
and the Company satisfied at all times the relevant criteria and conditions
entitling it to such ITCs. All refunds, if any, of ITCs received or receivable
by Company in any financial year were claimed in accordance with the Act and all
applicable provincial statutes, and the Company satisfied at all times the
relevant criteria and conditions entitling it to claim a refund of such ITCs.
(j) Since its date of incorporation, Company has been a
"Canadian controlled private corporation" within the meaning of the Act.
3.12 ABSENCE OF CERTAIN CHANGES AND EVENTS.
Since the date of the 1997 Balance Sheet, there has not been,
and prior to the Closing there will not be:
(i) except as set forth on Schedule 3.12, any transaction
entered into by Company other than in the ordinary course of business
consistent with past practice; any Contract entered into by Company
requiring payment by any party thereto of more than US $100,000 in the
aggregate or with a duration longer than one year; any capital
expenditure made or incurred by the Company in an amount greater than
US $100,000; any loss or damage to any of the manufacturing facilities
of Company due to fire or other casualty, whether or not insured,
amounting to more than US $100,000 in aggregate replacement value; any
event that materially and adversely affects the ability of Company to
operate its business as a whole in a manner consistent with past
practice; or any change in the financial position, assets, liabilities,
results of operations or business of Company which in the aggregate
have been materially adverse;
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(ii) except as set forth on Schedule 3.12, any declaration,
payment or setting aside of any dividend or other distribution to or
for the holder of shares in the capital of Company; or
(iii) any Action or governmental investigation which may have
a material adverse effect on the business of Company.
(iv) except as set forth on Schedule 3.12, any increase or
decrease in the rates of compensation payable or to become payable by
Company to any director, officer, employee, agent or consultant, or any
bonus, percentage compensation, service award or other benefit,
granted, made or accrued to or to the credit of any such person, or any
welfare, pension, severance, retirement or similar payment or
arrangement made or agreed to by Company other than salary adjustments
for non-officer employees in accordance with past practice;
(v) any amendment, modification, rescission or termination of,
or waiver by Company of rights under, any Material Contract to which
Company is a party;
(vi) except as set forth on Schedule 3.12, any discharge or
satisfaction by Company of any lien or encumbrance, or any payment of
any obligation or liability (absolute or contingent) other than current
liabilities shown on the 1997 Balance Sheet and current liabilities
incurred since the date of the 1997 Balance Sheet in the ordinary
course of business;
(vii) any incurrence of indebtedness for borrowed money by
Company;
(viii) any sale, alienation or disposition of any of Company's
assets, other than in the ordinary course of business and in a manner
consistent with past practice;
(ix) any sale, purchase or redemption of any of the shares in
the capital of Company or other Equity Securities;
(x) any mortgage, pledge, imposition of any security interest,
claim, encumbrance or other restriction on any of the assets, tangible
or intangible, of Company;
(xi) any merger with or into or consolidation with any other
Person involving Company;
(xii) except as set forth in Schedule 3.12, any amendment of
Company's constating documents;
(xiii) except as set forth in Schedule 3.12, any change in
Company's authorized or outstanding share capital or its capital
structure; or
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(xiv) authorization, agreement or commitment to any of the
foregoing.
3.13 ACCOUNTS RECEIVABLE.
The accounts receivable reflected on the 1997 Balance Sheet
are bona fide, based on Company's reasonable judgment and its normal credit
review procedures, business practices and GAAP (Canada), result from the
ordinary course of business and are collectible in accordance with their terms
in an amount not less than their aggregate book value. For purposes of the
preceding sentence, the term "aggregate book value" shall mean the recorded
amounts of such accounts receivable less any recorded allowance for doubtful
accounts, trade allowances and return allowances, all as established in
accordance with GAAP (Canada) consistently applied.
3.14 INVENTORIES.
The inventories reflected on the 1997 Balance Sheet are valued
in accordance with GAAP (Canada) consistently applied and have been prepared in
accordance with the books and records of Company.
3.15 BACKLOG.
Schedule 3.15 contains a list of all orders outstanding as of
September 12, 1997 identifying for each such order the customer, product, price
and expected delivery dates.
3.16 PRODUCT WARRANTIES.
The Company does not utilize standard forms of agreements
containing warranties or guarantees relating to the catalog products of Company.
No agreement to which Company is a party provides any warranty for a period
longer than three years from the date of delivery of the applicable product.
3.17 CREDIT CARDS.
Schedule 3.17 sets forth a complete and correct list of all
credit cards issued or caused to be issued by Company to any person, firm or
entity or under which Company is or may be liable for charges or payments.
3.18 INTERESTS IN REAL PROPERTY.
Schedule 3.18 sets forth a complete and correct list and brief
description of all real property leased by Company. Company owns no real
property. All real property leases to which Company is a party are, to the best
knowledge of Xx. Xxxxxx and Xxxxxx Holdco, valid and enforceable (subject, as to
the enforcement of remedies, to applicable bankruptcy,
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reorganization, insolvency, moratorium and similar laws affecting creditors'
rights, and, with respect to the remedy of specific performance, equitable
doctrines applicable thereto) and no party thereto is in default of any material
provision thereof. To the best knowledge of Xx. Xxxxxx and Xxxxxx Holdco, all
improvements and fixtures on real properties leased by Company conform to all
material applicable health, fire, safety, zoning and building Laws,
Environmental Laws and ordinances, and all materials, buildings, structures and
fixtures used by Company in the conduct of its business are in good operating
condition and repair, ordinary wear and tear excepted, and are sufficient for
the type and magnitude of their respective operations.
3.19 PERSONAL PROPERTY.
Except as set forth on Schedule 3.19, Company has good and
marketable title, free and clear of all Encumbrances whatsoever (except for such
non-monetary imperfections of title and Encumbrances, if any, as do not
materially detract from the value of or do not materially interfere with the
present use of such property) to (or, in the case of leased properties and
assets, valid leasehold interests in) all inventory and receivables and to any
item of machinery, equipment, or tangible or intangible personal property
reflected on the 1997 Balance Sheet or used in the business by Company
(regardless of whether reflected on the 1997 Balance Sheet). Schedule 3.19 sets
forth a list of all items of machinery, equipment and tangible personal property
used in Company's business. Except as disclosed on Schedule 3.19, all the
machinery, equipment and other tangible personal property of Company is in good
operating condition and repair, normal wear and tear excepted, and is sufficient
for the type and magnitude of Company's business and operations as currently
conducted. At the Closing Date, Company will possess all of the personal
property wherever located used to conduct its business as conducted prior to the
Closing.
3.20 DIRECTORS AND OFFICERS.
Schedule 3.20 sets forth a complete and correct list of all
present officers and directors of Company, Millowave and Xxxxxx Holdco and all
present trustees of the Xxxxxx Trust.
3.21 CERTAIN TRANSACTIONS.
Except as set forth on Schedule 3.21, no Affiliate of Company
is presently a party to any agreement or arrangement with Company (i) providing
for the furnishing of raw materials, products or services to or by, or (ii)
providing for the sale or rental of real or personal property to or from, any
such entity.
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3.22 INTELLECTUAL PROPERTY.
Except as set forth on Schedule 3.22, all the Intellectual
Property Rights which are necessary to the conduct of Company's business are
owned or are useable, without restriction, by Company. To the knowledge of Xx.
Xxxxxx and Xxxxxx Holdco, the conduct of any business conducted by Company does
not infringe any Intellectual Property Rights of any other person. No litigation
is pending or, to the knowledge of Xx. Xxxxxx and Xxxxxx Holdco, has been
threatened against Company or any officer, director, shareholder, employee or
agent of Company, for the infringement of any Intellectual Property Rights of
any other party or for the misuse or misappropriation of any Intellectual
Property Rights owned by any other party nor does any basis exist for such
litigation. To the knowledge of Xx. Xxxxxx and Xxxxxx Holdco, there has been no
infringement or unauthorized use by any other party of any Intellectual Property
Rights belonging to Company. Schedule 3.22 sets forth a list of all Intellectual
Property Rights belonging to or used by Company.
3.23 LITIGATION AND OTHER PROCEEDINGS.
Except as set forth on Schedule 3.23, neither Company nor any
of its officers or directors in such capacity is a party to any pending or, to
the best knowledge of Xx. Xxxxxx and Xxxxxx Holdco, threatened Action in Canada
or the United States (including the United States Defense Contract Audit Agency,
the United States Inspector General or the United States General Accounting
Office) or elsewhere, and Company is not subject to any Order which materially
adversely affects or might so affect the business or assets of Company or which
prevents or might prevent completion of the sale of the Purchased Shares.
Schedule 3.23 contains a complete list of all claims brought against Company
since June 30, 1992, together with a brief statement of the nature and amount of
the claim, the court and jurisdiction in which the claim was brought, the
resolution (if resolved), and the availability of insurance to cover the claim.
3.24 CONTRACTS.
Schedule 3.24 lists and describes all currently effective
Contracts to which Company is a party or by which Company or any of its
respective properties or assets are bound which: (i) involve the payment by
Company of more than US $25,000 over the remaining term of the contract; (ii)
are financing documents, loan agreements or promissory notes; (iii) are
otherwise material to the business of Company and are not for the purchase or
sale of goods or services in the ordinary course of business; or (iv) are
distributorship or other agreements relating to the marketing of products.
Company and all of the other parties to such contracts, are in compliance with
all provisions of all such contracts and no circumstance exists which is, or
with the passage of time could become, a material default under any of such
contracts.
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3.25 INSURANCE AND BANKING FACILITIES.
Schedule 3.25 sets forth a complete and correct list of: (i)
all contracts of insurance and indemnity of or relating to Company (except
insurance related to employee benefits) in force at the date of this Agreement
(including name of insurer or indemnitor, agent, annual charge, coverage and
expiration date); (ii) the names and locations of all banks in which Company has
accounts; and (iii) the names of all persons authorized to draw on such
accounts. All premiums and other payments due with respect to all contracts of
insurance or indemnity in force at the date hereof have been or will be paid.
3.26 PERSONNEL.
Schedule 3.26 sets forth a complete and correct list of: (i)
all employment contracts, collective bargaining agreements, and all compensation
plans, agreements, programs, practices, commitments or other arrangements of any
type, including bonus, profit sharing, incentive compensation, pension and
retirement agreements respecting or affecting any employees of Company; and (ii)
all insurance, health, medical, hospitalization, dependent care, severance,
fringe or other employee benefit plans, agreements, programs, practices,
commitments or other arrangements of any type in effect for employees of
Company. Schedule 3.26 includes a list of all employees of Company and their
compensation levels. Company has been and is in compliance with the terms of,
and any Laws applicable to, all such plans, agreements, practices, commitments
or programs.
3.27 POWERS OF ATTORNEY AND SURETYSHIPS.
Company does not have any power of attorney outstanding (other
than a power of attorney issued in the ordinary course of business with respect
to tax matters or to customs agents and customs brokers), and, except for
obligations as an endorser of negotiable instruments incurred in the ordinary
course of business, Company does not have any obligations or liabilities
(absolute or contingent) as guarantor, surety, co-signer, endorser, co-maker,
indemnitor or otherwise respecting the obligation of any other Person.
3.28 MINUTES AND SHARE RECORDS.
The minute books and share records of Company, Millowave and
Xxxxxx Holdco contain a complete and correct record of all proceedings and
actions taken at all meetings of, and all resolutions of the Board of Directors
and shareholders of Company, Millowave and Xxxxxx Holdco and any committees
thereof, and all original issuances and subsequent transfers and repurchases of
shares of its capital.
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3.29 GOVERNMENTAL CONSENTS.
To the knowledge of Xx. Xxxxxx and Xxxxxx Holdco, Company has
complied with all Laws of any Governmental Entity having jurisdiction over
Company, its business and operations or any Governmental Entity with which
Company has contracts. Except as described on Schedule 3.29, Company has not
been audited by any Governmental Entity having jurisdiction over Company, its
business and operations. Schedule 3.29 sets forth a complete and correct list of
all consents, approvals, orders and authorizations from, and all registrations,
qualifications, designations, declarations and rulings with, any Governmental
Entity, required by or with respect to Company in connection with the
consummation of the transactions contemplated by this Agreement or, to the
extent not listed on Schedule 3.29, necessary to enable Company to conduct its
business as it was conducted immediately before the Closing.
3.30 PENSION AND BENEFIT PLANS.
Schedule 3.30 sets forth a complete and correct list of all
pension, retirement, profit-sharing, incentive, bonus, deferred compensation,
stock option, purchase, and appreciation and group insurance plans, programs and
arrangements in Canada (collectively, "Plans") of Company or in which any of its
employees participate. Each such Plan intended to qualify under applicable
Canadian pension and tax legislation has received the requisite registration and
has been administered in compliance with applicable Canadian legislation and no
fact or circumstance exists which would preclude continuing, good faith reliance
on such requisite registration or would adversely affect the qualified status or
registration of any such Plan. No fact or circumstance exists in connection with
any such Plan which might constitute grounds for the appointment by a court or
any other competent authority of a trustee to administer such Plan. Company has
complied in full with the minimum funding requirements and in all material
respects with the reporting, disclosure and fiduciary requirements of applicable
Canadian legislation, and every Plan which is a funded plan is fully funded on
both a going-concern basis and a winding-up basis in accordance with the methods
and assumptions utilized in the most recent actuarial report therefor.
3.31 LABOR MATTERS.
Company is and has been in compliance with all applicable Laws
respecting employment and employment practices, terms and conditions of
employment and wages and hours, including, without limitation, any such Laws
respecting employment discrimination, occupational safety and health, and unfair
labor practices. There is no unfair labor practice complaint against Company
pending or, to the knowledge of Xx. Xxxxxx and Xxxxxx Holdco, threatened before
any Governmental Entity. There is no: (i) labor strike, dispute, slowdown or
stoppage actually pending, or, to the knowledge of Xx. Xxxxxx and Xxxxxx Holdco,
threatened against or directly affecting Company; (ii) grievance or arbitration
proceeding pending and, to the knowledge of Xx. Xxxxxx and Xxxxxx Holdco, no
claims therefor exist; or (iii) agreement which is binding on Company, restricts
Company from relocating or closing
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any of its operations. Company has not experienced any material work stoppage in
the last two (2) years. Company is not delinquent in payments to any of its
employees for any wages, salaries, commissions, bonuses or other direct
compensation for any services performed by them or amounts required to be
reimbursed to such employees. Company is not a party to or bound by any
collective bargaining agreements.
3.32 HAZARDOUS MATERIALS.
Except as set forth on Schedule 3.32:
(i) Company has not caused, and is not causing or threatening
to cause, any disposals or releases of any Hazardous Material on or
under any properties which it (A) leases, occupies or operates or (B)
previously owned, leased, occupied or operated and, to the knowledge of
Xx. Xxxxxx and Xxxxxx Holdco, no such disposals or releases occurred
prior to Company having taken title to, or possession or operation of,
any of such properties; and no such disposals or releases are migrating
or have migrated off of such properties in subsurface soils,
groundwater or surface waters;
(ii) Company has neither (A) arranged for the disposal or
treatment of Hazardous Material at any facility owned or operated by
another person, or (B) accepted any Hazardous Material for transport to
disposal or treatment facilities or other sites selected by Company
from which facilities or sites there has been a release or there is a
release or threatened release of a Hazardous Material; any facility
identified on Schedule 3.32 as an exception to clause (A) above was
duly licensed in accordance with applicable Environmental Laws.
(iii) Xx. Xxxxxx and Xxxxxx Holdco have no actual knowledge
of, or any reason to believe or suspect that, any release or threatened
release of any Hazardous Material originating from a property other
than those leased or operated by Company has come to be (or may come to
be) located on or under properties leased, occupied or operated by
Company;
(iv) Company has never installed, used, buried or removed any
surface impoundment or underground tank or vessel on properties owned,
leased, occupied or operated by Company;
(v) Company is and has been in compliance in all material
respects for the last three years with all United States and Canadian
federal, state, local or foreign Environmental Laws, and no condition
exists on any of the real property owned by or used in the business of
Company that would constitute a violation of any Environmental Laws or
Permits or that constitutes or threatens to constitute a public or
private nuisance; and
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(vi) There has been no litigation, administrative proceedings
or investigations or any other Actions, claims, demands, notices of
potential responsibility or requests for information brought or, to the
knowledge of Xx. Xxxxxx and Xxxxxx Holdco, threatened against Company
or any settlement reached with any person or persons alleging the
presence, disposal, release or threatened release of any Hazardous
Material on, from or under any of such properties or as otherwise
relating to potential environmental liabilities.
3.33 BROKERS AND FINDERS.
Neither Company nor any Seller has retained any broker or
finder in connection with the transactions contemplated by this Agreement.
3.34 BUSINESS PRACTICES.
Company has not made, offered or agreed to offer anything of
value to any government official, political party or candidate for government
office nor has it taken any action which would cause it to be in violation of
the Foreign Corrupt Practices Act of 1977.
3.35 PLACE OF BUSINESS.
Other than inventory in transit, Company does not hold,
directly or indirectly, any of its personal or real property anywhere other than
in the locations set forth on Schedule 3.35.
3.36 ACTIVITIES OF MILLOWAVE.
Millowave was incorporated on December 23, 1996 for the
purpose of acting as a holding company. Millowave has carried on no business and
has not engaged in any transaction prior to the date of this Agreement other
than the acquisition of shares of Company. Except as contemplated under Section
7.3, Millowave will not carry on any business prior to its amalgamation with
Company. Millowave will have no liabilities (absolute, contingent, asserted,
unasserted, known or unknown) as of the date of such amalgamation.
3.37 ACCURACY OF DOCUMENTS AND INFORMATION.
Neither the representations or warranties made by Xx. Xxxxxx
or Xxxxxx Holdco in this Agreement, nor those contained in any document, written
information, financial statement, other statement, certificate, schedule or
exhibit furnished or to be furnished (or caused to be furnished) by Xx. Xxxxxx,
Xxxxxx Holdco or Company to Buyer or REMEC pursuant to this Agreement, taken
together as a whole contain or will contain any untrue statement of a material
fact, or omit or will omit a material fact necessary to make the
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statements or facts contained herein or therein, in light of the circumstances
under which they were made, not misleading.
3.38 REPRESENTATIONS AND WARRANTIES APPLICABLE TO THE
AMALGAMATED COMPANY.
All of the representations and warranties made by Xx. Xxxxxx
and Xxxxxx Holdco in this Article III which relate to the Company, its business
and operations shall, on the Closing Date, also be deemed to be made with
respect to and apply to the Amalgamated Company mutatis mutandis.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ROYNAT
RoyNat represents and warrants, severally and not jointly, to
Buyer and REMEC as follows:
4.1 ORGANIZATION AND AUTHORITY.
RoyNat: (i) is a corporation duly incorporated, validly
existing and in good standing under the laws of Canada; and (ii) has all
necessary corporate power to own and lease its properties, to carry on its
business as now being conducted and to enter into and perform its obligations
pursuant to this Agreement and all agreements to which RoyNat is or will be a
party that are Exhibits to this Agreement.
4.2 CAPITALIZATION.
(a) Relying on opinions of counsel to Company, all of the
Class A common shares and Class B common shares of Company owned by RoyNat have
been duly authorized and validly issued, are fully paid and nonassessable, and
have been issued in compliance with all applicable securities laws. Relying on
opinions of counsel to Company, the Class C common shares of Company to be
issued to RoyNat upon the contemplated exchange of Class A common shares of
Company that RoyNat currently owns, upon such exchange, will be duly authorized,
validly issued, fully paid and nonassessable, and will be issued in compliance
with applicable securities laws. To RoyNat's knowledge, except as contemplated
under this Agreement and as set forth on Schedule 3.2, there are no outstanding
warrants, options, agreements, convertible or exchangeable securities or other
commitments pursuant to which Company is or may become obligated to issue, sell,
purchase, retire or redeem any shares of capital stock or other securities.
(b) Except as set forth on Schedule 3.2, to RoyNat's
knowledge, Company does not have in effect any stock options, stock appreciation
rights or other similar plan
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granting the right to acquire any Equity Security of Company to any Person. None
of the plans set forth on Schedule 3.2 will survive the transactions
contemplated by this Agreement.
(c) To RoyNat's knowledge, there is no right of first refusal,
co-sale right, right of participation, right of first offer, option or other
restriction on transfer applicable to any shares in the capital of Company which
apply to or survive the transactions contemplated by this Agreement.
(d) Except as set forth on Schedule 3.2, to RoyNat's
knowledge, neither Company nor RoyNat is a party or subject to any agreement or
understanding, and there is no agreement or understanding between or among any
persons that affects or relates to the voting or giving of written consent with
respect to any outstanding security of Company. None of such agreements or
understandings set forth on Schedule 3.2 will survive the transactions
contemplated by this Agreement.
4.3 AUTHORIZATION.
The execution and delivery of this Agreement and all
agreements to which RoyNat is or will be a party that are Exhibits to this
Agreement and the performance hereunder and thereunder by RoyNat has been duly
authorized by all necessary corporate action on the part of RoyNat. This
Agreement and all other agreements to which RoyNat is or will be a party will
constitute legal, valid and binding obligations of RoyNat, enforceable against
RoyNat in accordance with their terms, subject as to enforcement to bankruptcy,
insolvency, reorganization, arrangement, moratorium and other laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity.
4.4 TITLE TO SHARES.
RoyNat owns, beneficially and of record, 8 Class A common
shares and 14 Class B common shares of Company, free and clear of all
Encumbrances. RoyNat shall exchange 8 Class A common shares of Company for 8
Class C common shares of Company prior to Closing. The 8 Class C common shares
of Company, when issued to RoyNat in exchange for the 8 Class A common shares of
Company that RoyNat currently owns in accordance with Section 7.4, will be owned
by RoyNat, beneficially and of record, free and clear of all Encumbrances.
Immediately preceding the Closing and on the Amalgamation Date, RoyNat will own,
beneficially and of record, 140 Class B common shares and 80 Class C common
shares of Amalgamated Company free and clear of all Encumbrances. Upon
consummation of the transactions contemplated under this Agreement, RoyNat will
transfer to Buyer the Purchased Shares owned by it free and clear of all
Encumbrances.
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4.5 NO VIOLATION OF OTHER INSTRUMENTS.
Except as set forth on Schedule 3.5, to RoyNat's knowledge,
neither the execution of this Agreement or any other agreement to which RoyNat
is or will be a party that is an Exhibit to this Agreement nor the performance
of any of them by RoyNat will: (i) conflict with or result in any breach or
violation of the terms of any Law applicable to RoyNat or Company; (ii) conflict
with, or result in, with or without the passage of time or the giving of notice,
any breach of any of the terms, conditions and provisions of, or constitute a
default under or otherwise give another party the right to terminate, or result
in the creation of any Encumbrance upon any of the assets or properties of
Company pursuant to, any material indenture, mortgage, lease, agreement or other
instrument to which Company is a party or by which it or any of its assets or
properties are bound; (iii) permit the acceleration of the maturity of any
indebtedness of Company or of any other Person secured by the assets or
properties of Company; or (iv) violate or conflict with any provision of
Company's or RoyNat's constating documents.
4.6 CONSENTS.
No consent from any third party and no consent, approval or
authorization of, or declaration, filing or registration with, any government or
regulatory authority is required to be made or obtained by RoyNat or, to the
knowledge of RoyNat, Company in order to permit the execution, delivery or
performance of this Agreement or any other agreement to which RoyNat is or will
be a party that is an Exhibit to this Agreement, or the consummation of the
transactions contemplated by this Agreement and such other agreements, except
for such consents, approvals, orders, authorizations, registrations,
declarations and filings set forth on Schedule 3.6.
4.7 COMPLIANCE WITH LAW.
To RoyNat's knowledge, Company holds all Permits necessary for
the lawful conduct of Company's business as currently conducted pursuant to all
applicable Laws, and RoyNat knows of no violation thereof, other than any such
violation that would not have a material adverse effect on Company's business or
financial results. To RoyNat's knowledge, Company is not in violation of any Law
(including applicable Environmental Laws, equal employment and civil rights
regulations, wages, hours and the payment of employment Taxes and occupational
health and safety legislation), which violation would reasonably be expected to
have a material adverse effect on the condition, financial or otherwise, assets,
liabilities, business or results of operations of Company.
4.8 ABSENCE OF UNDISCLOSED LIABILITIES.
Except for obligations and liabilities incurred in the
ordinary course of business which are not material or are not required under
GAAP (Canada) to be reflected on a balance sheet or set forth in the notes
thereto, to RoyNat's knowledge, Company does not
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have any indebtedness or any other liability (absolute, contingent, asserted,
unasserted, known or unknown) which is not reflected on or provided for in full
on the 1997 Balance Sheet.
4.9 TAX RETURNS AND PAYMENTS.
(a) RoyNat has no knowledge of any assessment of deficiency or
additional Tax or other governmental charge respecting Company or its business
or affairs, or any knowledge of any completed, pending or threatened assessment,
Tax audit, investigation, suits or claims respecting Company or its business or
affairs by any taxing or other governmental authority, and, to the knowledge of
RoyNat, no waivers of statutes of limitations have been requested with respect
to Company or any of its corporate Affiliates and no extensions of time have
been requested with respect to the filing of any Tax return, election or
designation. To RoyNat's knowledge, Company has no liability for Taxes arising
from previously filed Tax returns, reports or forms, or any assessments or
reassessments relating thereto.
(b) To the knowledge of RoyNat, there is no pending or
threatened claims by any Governmental Entity in any jurisdiction in which
Company does not pay taxes or file Tax Returns that Company is required to pay
taxes or file Tax Returns in such jurisdiction.
(c) RoyNat has no knowledge of any contingent tax liabilities
or any grounds that could prompt an assessment or reassessment of Company,
including, without limitation, aggressive treatment of income, expenses, credits
or other amounts in filing of any Tax Return, and have not received any
indication from any Governmental Entity that an assessment or reassessment of
Company, regardless of its merits, is proposed.
(d) RoyNat is not a non-resident of Canada for purposes of the
Act. RoyNat is a corporation incorporated under the laws of Canada and its
principal place of business is Toronto, Canada. RoyNat is not engaged in United
States trade or business as interpreted under the Code.
4.10 CERTAIN TRANSACTIONS.
Except as set forth on Schedule 3.21, to the knowledge of
RoyNat, no Affiliate of Company is presently a party to any agreement or
arrangement with Company (i) providing for the furnishing of raw materials,
products or services to or by, or (ii) providing for the sale or rental of real
or personal property to or from, any such entity.
4.11 ACCURACY OF DOCUMENTS AND INFORMATION.
Neither the representations or warranties made by RoyNat in
this Agreement, nor those contained in any document, written information,
financial statement, other statement, certificate, schedule or exhibit furnished
or to be furnished (or caused to be
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furnished) by RoyNat to Buyer or REMEC pursuant to this Agreement, taken
together as a whole contain or will contain any untrue statement of a material
fact, or omit or will omit a material fact necessary to make the statements or
facts contained herein or therein, in light of the circumstances under which
they were made, not misleading.
4.12 REPRESENTATIONS AND WARRANTIES APPLICABLE TO THE
AMALGAMATED COMPANY.
All of the representations and warranties made by RoyNat in
this Article IV which relate to the Company, its business and operations shall,
on the Amalgamation Date, also be deemed to be made with respect to and apply to
the Amalgamated Company mutatis mutandis.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF REMEC AND BUYER
REMEC and Buyer represent and warrant, jointly and severally,
to each Seller as follows:
5.1 ACTIVITIES OF BUYER.
Buyer was incorporated on September 15, 1997 for the purpose
of purchasing the Purchased Shares as contemplated in this Agreement. Buyer has
carried on no business and has not engaged in any transaction prior to the date
of this Agreement and, except as required for purposes of this Agreement, will
not carry on any business prior to Closing. Except for the liabilities arising
out of this Agreement, Buyer will have no liabilities (absolute, contingent,
asserted, unasserted, known or unknown) immediately prior to the Closing other
than indebtedness owing to REMEC and costs and expenses arising out of the
transactions contemplated under this Agreement.
5.2 ORGANIZATION AND AUTHORITY.
Each of REMEC and Buyer (i) is a corporation and an unlimited
company, respectively, duly incorporated or organized and validly existing and
in good standing under the laws of the State of California and Nova Scotia,
respectively; (ii) has all necessary corporate power to own and lease its
properties, to carry on its business as now being conducted and to enter into
and perform their respective obligations under this Agreement; and (iii) is
qualified to do business in all jurisdictions in which the failure to so qualify
would have a material adverse effect on its business or financial condition.
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5.3 CAPITALIZATION OF REMEC.
(a) The authorized capital stock of REMEC is 5,000,000 shares
of Preferred Stock, none of which are issued and outstanding, and 40,000,000
shares of REMEC Common Stock, of which 19,819,783 shares were issued and
outstanding as of September 5, 1997. All such issued and outstanding shares have
been duly authorized and validly issued, and are fully paid and nonassessable.
As of September 5, 1997, REMEC had outstanding options to purchase 1,701,300
shares of REMEC Common Stock pursuant to its existing plans. Except as set forth
in the preceding sentence and as contemplated under this Agreement, there are no
outstanding warrants, options, agreements, convertible or exchangeable
securities or other commitments pursuant to which REMEC is or may become
obligated to issue, sell, purchase, retire or redeem any shares of its capital
stock or other Equity Securities.
(b) Except for the options referenced in Section 5.3(a), REMEC
does not have in effect any stock options, stock appreciation rights or other
similar plan granting the right to acquire any Equity Security of REMEC to any
Person.
(c) There is no right of first refusal, co-sale right, right
of participation, right of first offer, option or other restriction on transfer
applicable to the REMEC Common Stock issuable upon exchange of the Dividend
Access Shares.
(d) Neither REMEC nor Buyer is a party or subject to any
agreement or understanding, and there is no agreement or understanding between
or among any persons that affects or relates to the voting or giving of written
consent with respect to any outstanding security of REMEC or Buyer.
5.4 CAPITALIZATION OF BUYER.
(a) The authorized share capital of Buyer consists of one
million common shares and, on or prior to Closing, one million Dividend Access
Shares, of which 100 common shares are issued and outstanding. All such issued
and outstanding common shares have been duly authorized and validly issued, are
fully paid and nonassessable, and are owned beneficially and of record by REMEC.
Except as contemplated under this Agreement, there are no outstanding warrants,
options, agreements, convertible or exchangeable securities or other commitments
pursuant to which Buyer is or may become obligated to issue, sell, purchase,
retire or redeem any shares of stock or other Equity Securities.
(b) Buyer does not have in effect any stock options, stock
appreciation rights or other similar plan granting the right to acquire any
Equity Security of Buyer to any Person.
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(c) There is no right of first refusal, co-sale right, right
of participation, right of first offer, option or other restriction on transfer
applicable to any shares in the capital of Buyer other than those contemplated
by this Agreement.
5.5 AUTHORIZATION.
The execution and delivery of this Agreement and all other
agreements to which REMEC or Buyer is a party or will be a party that are
Exhibits to this Agreement and the performance hereunder and thereunder by REMEC
or Buyer have been duly authorized by all necessary corporate action on the part
of REMEC and Buyer. This Agreement constitutes, and the other agreements to
which REMEC or Buyer is a party that are Exhibits to this Agreement will, once
executed by REMEC and Buyer, constitute a legal, valid and binding obligation of
REMEC or Buyer, enforceable against REMEC or Buyer in accordance with its terms,
subject as to enforcement to bankruptcy, insolvency, reorganization,
arrangement, moratorium and other laws of general applicability relating to or
affecting creditors' right and to general principles of equity.
5.6 NO VIOLATION OF OTHER INSTRUMENTS.
Except as set forth on the disclosure letter of REMEC, neither
the execution of this Agreement or any other agreement to which REMEC or Buyer
are or will be a party that is an Exhibit to this Agreement nor the performance
of any of them by REMEC or Buyer will: (i) conflict with or result in any breach
or violation of the terms of any Law applicable to REMEC or Buyer; (ii) conflict
with, or result in, with or without the passage of time or the giving of notice,
any breach of any of the terms, conditions and provisions of, or constitute a
default under or otherwise give another party the right to terminate, or result
in the creation of any Encumbrance upon any of the assets or properties of REMEC
or Buyer pursuant to, any material indenture, mortgage, lease, agreement or
other instrument to which REMEC or Buyer is a party or by which it or any of its
assets or properties are bound; (iii) permit the acceleration of the maturity of
any indebtedness of REMEC or Buyer or of any other person secured by the assets
or properties of REMEC or Buyer; or (iv) violate or conflict with any provision
of REMEC's or Buyer's constating documents.
5.7 CONSENTS.
No consent from any third party and no consent, approval or
authorization of, or declaration, filing or registration with, any governmental
or regulatory authority is required to be made or obtained by REMEC or Buyer in
order to permit the execution, delivery or performance of this Agreement or any
other agreement to which REMEC or Buyer is a party or will be a party that is an
Exhibit to this Agreement, or the consummation of the transactions contemplated
by this Agreement and such other agreements, except for such consents,
approvals, orders, authorizations, registrations, declarations, filings listed
in the disclosure letter of REMEC.
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5.8 FINANCIAL STATEMENTS.
REMEC has delivered the following consolidated financial
statements of REMEC to Xx. Xxxxxx:
(i) Balance Sheet of REMEC as of August 1, 1997, (unaudited);
(ii) Statement of Income of REMEC for the period ended August
1, 1997 (unaudited); and
(iii) Audited Balance Sheet of REMEC dated as of January 31,
1997 together with audited Statements of Operations, Shareholders'
Equity and Changes in Cash Flow for the year ended January 31, 1997.
Each REMEC Financial Statement (together with the notes thereto) is in
accordance with the books and records of REMEC, fairly presents the financial
position of REMEC and the results of operations of REMEC for the period
indicated, has been prepared in accordance with generally accepted accounting
principles in the United States consistently applied (except that the unaudited
income statement does not contain all the notes required under such generally
accepted accounting principles) and complies as to form with applicable
accounting requirements of the SEC.
5.9 ABSENCE OF UNDISCLOSED LIABILITIES.
As of August 1, 1997, REMEC had no indebtedness or liability
(absolute or contingent, asserted, unasserted, known or unknown) which is not
shown or provided for in full on the Balance Sheet dated August 1, 1997 included
in the REMEC Financial Statements. Except as set forth or provided for in the
Balance Sheet dated August 1, 1997 included in the REMEC Financial Statements,
REMEC and its Subsidiaries do not have outstanding on the date of this
Agreement, nor will it have outstanding on the Closing Date, any indebtedness or
liability (absolute, contingent, asserted, unasserted, known or unknown) other
than those incurred since August 1, 1997 in the ordinary course of business
consistent with past practice other than any obligations or liabilities arising
out of the transaction with Q-Bit Corporation described in REMEC's disclosure
letter.
5.10 ISSUANCE OF SHARES.
The Dividend Access Shares, when issued in accordance with
this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable. The shares of REMEC Common Stock which are required to be issued
to Xxxxxx Holdco and Xx. Xxxxxx or their assignees pursuant to and in accordance
with this Agreement, the Dividend Access Share Provisions and the Support
Agreement, when issued in accordance therewith, will be duly authorized, validly
issued, fully paid and nonassessable and free and clear of all Encumbrances.
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5.11 LITIGATION.
Except as disclosed in REMEC's disclosure letter or in REMEC's
filings with the SEC, there is no pending or, to the best of REMEC's knowledge,
threatened lawsuit, administrative proceeding, arbitration, labor dispute or
governmental investigation to which REMEC is a party or by which any material
portion of its assets taken as a whole may be bound, and which, if adversely
determined, would have a material adverse effect on REMEC. There are no
outstanding orders of any court or Governmental Entity against REMEC.
5.12 BROKERS AND FINDERS.
Neither Buyer nor REMEC has retained any broker or finder in
connection with the transactions contemplated by this Agreement.
5.13 BUSINESS PRACTICES.
Neither REMEC nor any of its Subsidiaries has made, offered or
agreed to offer anything of value to any government official, political party or
candidate for government office, and neither REMEC nor any of its Subsidiaries
has taken any action which would cause it to be in violation of the Foreign
Corrupt Practices Act of 1977.
5.14 FORM S-3 ELIGIBILITY.
REMEC meets the registrant requirements set forth under
General Instruction IA (Eligibility Requirements for Use of Form S-3) of Form
S-3 under the Securities Act.
5.15 FULL DISCLOSURE.
All reports, schedules and statements (including all exhibits
and schedules thereto and all documents incorporated by reference therein)
required to be filed by REMEC within the year prior to the date of this
Agreement under the Exchange Act, copies of which have been furnished to Xx.
Xxxxxx, have been duly filed, were in substantial compliance with the
requirements of their respective forms, and were complete and correct in all
material respects as of the dates at which the information was furnished. As of
the date of filing, no such report contained any untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. Since August 1, 1997, except as contemplated by this
Agreement, REMEC has conducted its business in the ordinary course and there has
not been any material adverse change in the business, financial condition or
results or operations or cash flows of REMEC.
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ARTICLE VI
COVENANTS PRIOR TO CLOSING
6.1 ACCESS.
Throughout the period between the date of this Agreement and
the Closing, Xx. Xxxxxx and Xxxxxx Holdco shall cause Company to give REMEC, and
REMEC shall provide to Xx. Xxxxxx and Xxxxxx Holdco, and each of their
respective authorized officers, employees, attorneys, and independent public
accountants and other representatives reasonable access to information and
documents relating to this Agreement and the transactions contemplated by this
Agreement, and each such party shall provide the other party with such
financial, technical and operating data and other information pertaining to the
business of Company or REMEC, as applicable, as may be reasonably requested.
RoyNat consents to the granting of access by Xx. Xxxxxx and Xxxxxx Holdco as
provided in this Section 6.1. No investigation by any party or its
representatives made before or after the date of this Agreement shall affect the
representations or warranties contained in this Agreement.
6.2 CONDUCT OF BUSINESS PRIOR TO CLOSING.
(a) Except as set forth on Schedule 6.2, Xx. Xxxxxx and
Xxxxxx Holdco agree that, from the date of this Agreement up to the Closing
Date, except as otherwise permitted, required or contemplated by this Agreement
or expressly permitted by REMEC in writing, Xx. Xxxxxx and Xxxxxx Holdco shall
cause the business of Company to be conducted in the ordinary course consistent
with prior practices and in a prudent, businesslike fashion. Without limiting in
any way the generality of the foregoing and except as so permitted, required or
contemplated, Xx. Xxxxxx and Xxxxxx Holdco shall cause Company not to:
(i) enter into any transaction other than in the ordinary
course of business consistent with past practice; enter into any
Contract requiring payment by any party thereto of more than US
$100,000 in the aggregate or with a duration longer than one year; make
any capital expenditure in an amount greater than US $50,000; take any
action that materially and adversely affects the ability of Company to
operate its Business as a whole in a manner consistent with past
practice; or take any action that materially and adversely affects in
the financial position, assets, liabilities, results of operations or
Business of Company;
(ii) declare, pay or set aside any dividend or other
distribution to or for the holder of shares in the capital of Company;
(iii) take any action that results in any Action or
governmental investigation which may have a material adverse effect on
the Business of Company.
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(iv) increase or decrease the rates of compensation payable
or to become payable by Company to any director, officer, employee,
agent or consultant, or any bonus, percentage compensation, service
award or other benefit, granted, made or accrued to or to the credit
of any such person, or any welfare, pension, severance, retirement or
similar payment or arrangement made or agreed to by Company other than
salary adjustments for non-officer employees in accordance with past
practice;
(v) amend, modify, rescind, terminate or waive any rights
under any material Contract;
(vi) discharge or satisfy any lien or Encumbrance, or pay or
incur any obligation or liability (absolute or contingent) other than
current liabilities shown on the 1997 Balance Sheet and current
liabilities incurred since the date of the 1997 Balance Sheet in the
ordinary course of business;
(vii) incur any indebtedness for borrowed money;
(viii) sell, alienate or dispose of any of Company's assets,
other than in the ordinary course of business and in a manner
consistent with past practice;
(ix) sell, purchase or redeem any of the shares in the
capital of Company or other Equity Securities.
(x) mortgage, pledge, impose any security interest, claim,
Encumbrance or other restriction on any of the assets, tangible or
intangible, of Company;
(xi) merge with or into or consolidate with any other
Person;
(xii) amend its constating documents;
(xiii) make any change in its authorized or outstanding share
capital or otherwise in its capital structure; or
(xiv) authorize, agree or commit to any of the foregoing.
Without limiting the generality of the foregoing, Xx. Xxxxxx
and Xxxxxx Holdco shall cause Company from the date hereof up to the Closing
Date to comply with all Laws, duly and punctually file all reports and returns
required to be filed by any Laws and pay or provide for the payment of all
Taxes, perform duly and punctually all of its contractual obligations in
accordance with the terms thereof, continue to pay accounts payable and to
collect accounts receivable in the ordinary course of business in accordance
with past practice, to maintain and preserve customer relations and to maintain
insurance. Further, Xx. Xxxxxx and Xxxxxx Holdco shall prevent Company from
changing or permitting to be
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changed in any material respect the accounting or valuation practices applicable
to Company's assets or Business.
(b) Except for the transaction with Q-Bit Corporation
described in REMEC's disclosure letter, REMEC shall not enter into any agreement
relating to the sale of assets to or from, merger with or into, or consolidation
with any other Person valued at more than US $35 million without informing Xx.
Xxxxxx prior to entering into such a transaction.
6.3 NOTICE OF EVENTS.
Throughout the period between the date of this Agreement up to
the Closing Date, Sellers shall cause Company to promptly advise REMEC in
writing, and REMEC shall promptly advise Sellers in writing, of any and all
material events and developments concerning Company's or REMEC's financial
position, assets, liabilities, results of operations or business or any of the
items or matters covered by each party's representations and warranties
contained in this Agreement of which they have or acquire knowledge. Sellers
shall give prompt notice to REMEC, and REMEC shall give prompt notice to
Sellers, of (i) the occurrence, or failure to occur, of any event that would be
likely to cause any representation or warranty contained in this Agreement to be
untrue or inaccurate in any material respect at any time from the date of this
Agreement to Closing and (ii) any failure of REMEC, Buyer or Sellers, as the
case may be, to comply with or satisfy, in any material respect, any covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement. No such notification shall affect the representations or warranties
of the parties or the conditions to their respective obligations hereunder.
6.4 NO OTHER NEGOTIATIONS.
Until the earlier of (i) the Closing or (ii) October 31, 1997:
(A) Sellers shall not, and shall cause Company not to,
directly or indirectly, through any of Company's officers, directors, agents or
representatives (including, without limitation, investment bankers, attorneys,
accountants and consultants):
(i) solicit, initiate or further the submission
of proposals or offers from, or enter into any agreement with, any
firm, corporation, partnership, association, group (as defined in
Section 13(d)(3) of the Exchange Act) or other Person or entity,
individually or collectively (including, without limitation, any
managers or other employees of Company or any Affiliates) (a "Third
Party"), relating to any acquisition or purchase of the stock or any of
the assets of, or any equity interest in, Company or any merger,
consolidation or business combination with Company;
(ii) participate in any discussions or negotiations
regarding, or furnish to any Third Party any confidential information
with respect to Company in
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connection with any acquisition or purchase of all or any substantial
portion of the assets of, or any equity interest in, Company or any
merger, consolidation or business combination with Company; or
(iii) otherwise cooperate in any way with, or
assist or participate in, facilitate or encourage, any effort or
attempt by any Third Party to undertake or seek to undertake any
acquisition or purchase of all or any portion of the assets of, or any
equity interest in, Company, or any merger, consolidation or business
combination with Company.
(B) In the event Sellers or Company receives any offer or
indication of interest from any Third Party relating to any acquisition or
purchase of all or any portion of the stock or the assets of, or any equity
interest in, Company or any merger, consolidation or business combination with
Company, Sellers shall promptly notify REMEC in writing, and shall in any such
notice, set forth in reasonable detail the identity of the Third Party, the
terms and conditions of any proposal and any other information requested of it
by the Third Party or in connection therewith.
(C) Sellers shall cause Company to immediately cease and cause
to be terminated any existing activities, discussions or negotiations with any
Third Party conducted prior to the date of this Agreement relating to matters
referred to in paragraphs (A) and (B) above.
6.5 COMPANY AUDITED FINANCIALS.
Xx. Xxxxxx and Xxxxxx Holdco shall use their best efforts to
cause to be delivered to REMEC on or before October 1, 1997 copies of the
Audited Financials of Company (audited balance sheet of Company dated June 30,
1997 and the related statements of income, shareholders' equity and cash flows
for the year then ended, including the notes thereto, accompanied by a report of
the Auditors of Company substantially in the form attached as Exhibit B.
6.6 COOPERATION.
Sellers shall cooperate, and Xx. Xxxxxx and Xxxxxx Holdco
shall cause Company to cooperate, with REMEC in preparing and making all
filings, notices or submissions to Governmental Entities required in connection
with the transactions contemplated by this Agreement, including any filings,
notices or submissions required under the Investment Canada Act, the Competition
Act (Canada), any applicable securities laws and the HSR Act. Sellers shall, and
Xx. Xxxxxx and Xxxxxx Holdco shall cause Company to, at any time before or after
the Closing, execute, acknowledge and deliver any further assignments,
assurances, documents and instruments of transfer reasonably requested by REMEC
and Buyer and shall take any other action consistent with the terms of this
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Agreement that may reasonably be requested by REMEC and Buyer for the purpose of
consummating the purchase and sale of the Purchased Shares.
6.7 EMPLOYEES.
Xx. Xxxxxx and Xxxxxx Holdco shall, and shall cause Company
to, use their respective best efforts prior to Closing to assist REMEC and Buyer
in retaining the continued services of Company's key employees. Xx. Xxxxxx and
Xxxxxx Holdco shall use their respective best efforts to cause employment
agreements in a form acceptable to REMEC to be entered into between Company and
each of the employees listed in Schedule 6.7. The failure of Xx. Xxxxxx and
Xxxxxx Holdco to obtain such continued services or agreements shall not permit
REMEC or Buyer to terminate their obligations under this Agreement or relieve
them of their obligations on Closing.
6.8 NASDAQ LISTING.
REMEC shall file prior to Closing with the Nasdaq Stock Market
a Notification Form for Listing of Additional Shares on the Nasdaq Stock Market
of the shares of REMEC Common Stock to be received by Xx. Xxxxxx and Xxxxxx
Holdco upon the exchange of Dividend Access Shares pursuant to and in accordance
with this Agreement, the Dividend Access Share Provisions and the Support
Agreement.
6.9 PRESS RELEASES.
No party hereto, nor any of their Affiliates, shall issue any
press release, make any public announcement or otherwise release any information
publicly regarding the purchase and sale of the Purchased Shares, without the
consent of the other parties which shall not be unreasonably withheld or
delayed.
6.10 BEST EFFORTS TO CLOSE.
REMEC, Buyer, each Seller and Xxxxxx shall use their
respective best efforts prior to Closing to fulfill the conditions set forth in
Articles IX and X of this Agreement over which it or he has control or influence
and to complete the transactions contemplated by this Agreement.
6.11 COVENANTS APPLICABLE TO THE AMALGAMATED COMPANY.
All references made in this Article VI to the Company shall,
on the Amalgamation Date, also be deemed to be made to the Amalgamated Company.
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ARTICLE VII
ADDITIONAL CONTINUING COVENANTS
7.1 CONFIDENTIAL INFORMATION.
Except as otherwise required by applicable Law, each party to
this Agreement shall not disclose (other than to its attorneys, accountants,
advisors, analysts or prospective investors, who are themselves required to keep
such information confidential) any Confidential Information concerning any other
party and the consideration to be received by Sellers under this Agreement.
Except as otherwise required by applicable Law, REMEC shall not file a copy of
this Agreement with the SEC.
7.2 TAX COOPERATION.
After Closing, Sellers shall cooperate fully with Buyer,
Amalgamated Company and REMEC in the preparation of all Tax Returns and shall
provide, or cause to be provided at Sellers' sole cost and expense, to Buyer,
Amalgamated Company and REMEC any records and other information in Sellers'
possession or control requested by such parties in connection therewith. Xx.
Xxxxxx and Xxxxxx Holdco shall use best efforts to provide access to, and the
cooperation of, the Company Auditors. Sellers shall cooperate fully with Buyer,
Amalgamated Company and REMEC in connection with any Tax investigation, audit or
other proceeding. Any information obtained pursuant to this Section 7.3 or
pursuant to any other Section hereof providing for the sharing of information or
the review of any Tax return or other Schedule relating to Taxes shall be
subject to Section 7.2.
7.3 PRE-CLOSING REORGANIZATION.
Prior to Closing, Sellers shall cause the following
reorganization to be effected in the sequence set forth below in contemplation
of and as an integral part of the purchase and sale of the Purchased Shares
under this Agreement.
(a) Company will amend its constating documents to authorize
the issuance of an unlimited number of Class C common shares in the capital of
Company.
(b) RoyNat will exchange the 8 Class A common shares it owns
in Company for 8 Class C common shares of Company.
(c) By resolution of its Board of Directors, Company will
increase its paid-up capital as to its capital stock owned by RoyNat (its
outstanding Class B and Class C common shares).
(d) By resolution of its Board of Directors, Millowave will
increase its paid-up capital as to its capital stock owned by Xxxxxx Holdco (its
outstanding Class B shares).
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(e) Millowave and Company each will continue as corporations
incorporated under the laws of Nova Scotia.
(f) After all conditions to Closing other than the conditions
set forth in Sections 9.3, 9.19, 10.3 and 10.15 have been satisfied or waived,
(i) REMEC and Buyer and (ii) the Xxxxxx Family, Xxxxxx Holdco and RoyNat shall
deliver pre-Closing certificates to each other certifying that, as of such date
(which shall be at least one day prior to the Closing Date), the representations
and warranties of each such party are true and correct in all respects as of
that date as if made on that date and that each such party has performed or
complied with each of the covenants contained in this Agreement to be performed
or complied with prior to Closing. After delivery of these certificates, at
least one day prior to the Closing Date, Millowave and Company will amalgamate
in accordance with applicable Law and the capitalization of Amalgamated Company
shall be as contemplated under Section 3.2.
7.4 POST-CLOSING REORGANIZATION COOPERATION.
As soon as possible after Closing (but at least one day after
the Closing Date), Buyer shall be re-constituted as a corporation with limited
liability. At least one day after Buyer is re-constituted as a corporation,
Buyer may effect an amalgamation involving Buyer and Amalgamated Company or take
such other action relating to the reorganization of Amalgamated Company as Buyer
or REMEC deems necessary or desirable. Sellers agree to cooperate fully with
Buyer, Amalgamated Company and REMEC in connection with any such amalgamation or
other reorganization of Amalgamated Company so long as Sellers reasonably
believe that any such amalgamation or other reorganization does not produce any
material adverse financial effect on Sellers.
7.5 INTERCOMPANY DEBT.
At and after Closing, REMEC and Buyer shall not permit
Amalgamated Company or Buyer to incur debt owing to REMEC or, in the case of
Amalgamated Company, Buyer in such amount as to cause the Government of Canada,
due to the amount of total debt incurred by Amalgamated Company or Buyer, to
discontinue or diminish funding under the Defence Industry Productivity Program
under which Amalgamated Company is a participant and any successor program
thereto.
7.6 RELEASE FROM PERSONAL GUARANTEES.
As soon as practicable after Closing, REMEC and Buyer shall use their
respective best efforts to cause the release of Xx. Xxxxxx and PSI Technologies
Inc. from any guarantees and postponements given by Xx. Xxxxxx and PSI
Technologies to secure the debt of Company and OHM. In the event REMEC and Buyer
are unable to secure such releases, REMEC and Buyer shall indemnify and hold
harmless Xx. Xxxxxx and PSI Technologies Inc. from liability arising out of such
guarantees and postponements that secure the debt of Company and OHM.
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ARTICLE VIII
REGISTRATION RIGHTS
8.1 REGISTRATION ON FORM S-3.
REMEC shall prepare and file with the SEC on or before the
date which is 60 days after the Closing Date, a Registration Statement on Form
S-3 (the "Registration Statement") registering under the Securities Act the
REMEC Common Stock issuable in exchange for Dividend Access Shares (the
"Registrable Securities") . REMEC shall use its reasonable efforts to have the
Registration Statement declared effective promptly and to maintain the
effectiveness of the Registration Statement until all of the Dividend Access
Shares have been exchanged for shares of REMEC Common Stock registered under the
Securities Act pursuant to the Registration Statement as contemplated under this
Agreement, the Dividend Access Share Provisions and the Support Agreement. It
shall be a condition precedent of REMEC's obligations under this Article VIII
that Xx. Xxxxxx and Xxxxxx Holdco furnish to REMEC such information regarding
Xx. Xxxxxx and Xxxxxx Holdco as REMEC may reasonably request. All expenses
relating to preparation and filing of the Registration Statement (including,
without limitation, REMEC's legal fees, accounting fees, printing costs and Blue
Sky and SEC filing fees), other than fees of legal counsel for Xxxxxx Holdco,
shall be borne by REMEC.
8.2 RIGHT OF DEFERRAL.
Notwithstanding anything in this Article VIII to the contrary,
REMEC may defer for a period not to exceed 45 days the filing of the
Registration Statement if REMEC believes in good faith that filing such
registration statement would be detrimental to REMEC and its shareholders.
8.3 REMEC TRADING POLICIES.
In connection with any subsequent sale by Xxxxxx Holdco or the
Xxxxxx Family to third parties of shares of REMEC Common Stock issued in
exchange for Dividend Access Shares, Xxxxxx Holdco and the Xxxxxx Family shall
comply with the terms of REMEC's policies regarding trading in its capital stock
in effect from time to time for so long as Xxxxxx Holdco or any member of the
Xxxxxx Family would be deemed an affiliate of REMEC for purposes of Rule 144
under the Securities Act.
8.4 NO LEGEND ON SHARES.
Certificates evidencing the shares of REMEC Common Stock
issued to Xxxxxx Holdco or the Xxxxxx Family pursuant to the Registration
Statement upon exchange of the
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Dividend Access Shares shall not contain any legend restricting the
transferability of such shares.
ARTICLE IX
CONDITIONS TO THE OBLIGATIONS OF REMEC AND BUYER
The obligations of REMEC and Buyer to consummate the purchase
and sale of the Purchased Shares are subject to the fulfillment, at or before
the Closing, of each and every one of the following conditions, any one or more
of which may be waived by REMEC and Buyer.
9.1 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING.
The representations and warranties of Sellers contained in
this Agreement shall be deemed to have been made again at and as of the Closing
with respect to the state of facts then existing, and shall then be true and
correct in all material respects, except that if a representation is already
limited to matters characterized as "material," it shall be correct in all
respects.
9.2 PERFORMANCE OF COVENANTS.
All of the covenants required to be performed by Sellers or
any of them at or before the Closing pursuant to the terms of this Agreement
shall have been duly performed.
9.3 CERTIFICATE.
REMEC and Buyer shall have received a certificate signed by
Sellers to the effect that each of the representations and warranties of Sellers
in this Agreement is true and correct in all respects as of the Closing Date as
if made on the Closing Date and that Sellers have complied with each of their
respective covenants in this Agreement.
9.4 RESIGNATION OF DIRECTORS.
Buyer shall have received a copy of a duly executed
resignation letter to Amalgamated Company from each director of Amalgamated
Company other than Xx. Xxxxxx effective as of the Closing.
9.5 MATERIAL CHANGES.
Between the date of this Agreement and the Closing there shall
not have occurred any event or transaction of the nature described in Section
3.12 of this Agreement.
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9.6 CONSENTS.
REMEC and Buyer shall have received, in writing and in form
and substance reasonably acceptable to REMEC and Buyer, all necessary consents,
approvals and waivers with respect to the consummation of the transactions
contemplated by this Agreement indicated or required to be indicated on Schedule
3.6 and Schedule 3.29 hereof.
9.7 GOOD STANDING CERTIFICATES.
Xx. Xxxxxx shall have caused to be furnished to REMEC at
Closing a certificate of status of Amalgamated Company from the appropriate
Governmental Entity in Nova Scotia or other evidence of status satisfactory to
REMEC, and a certificate of payment from the Ministry of Finance (Ontario)
pursuant to Section 6 of the Retail Sales Tax Act (Ontario).
9.8 NO ACTION TO PREVENT COMPLETION.
REMEC shall not have determined, in the reasonable exercise of
its discretion, that the transactions contemplated by this Agreement have become
inadvisable or impractical by reason of the institution or threat of
institution, by any Governmental Entity or any other Person or entity, of
litigation or other proceedings with respect to or affecting the transactions
contemplated by this Agreement.
9.9 GOVERNMENTAL FILINGS.
If the purchase and sale of the Purchased Shares is subject to
the notification requirements of the Competition Act (Canada) or the HSR Act,
all waiting periods under such acts relating to the transactions contemplated
under the Agreement shall have expired or terminated.
9.10 XXXXXX EMPLOYMENT AGREEMENTS.
Xxxxxx shall have entered into the Xxxxxx Employment Agreement
with Company or Amalgamated Company and REMEC substantially in the form attached
as Exhibit E and the Xxxxxx Employment Agreement with REMEC substantially in the
form attached as Exhibit F.
9.11 OPINION OF COUNSEL.
REMEC and Buyer shall have received the opinion of Xxxxxx &
Xxxxxx, counsel to Sellers, in form and substance to the reasonable satisfaction
of REMEC and Buyer.
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9.12 COMPANY SHAREHOLDERS' EQUITY.
The shareholders' equity of Company, as reported in the 1997
Audited Financials delivered to REMEC in accordance with Section 6.5, shall not
be less than CDN $1,000,000.
9.13 BONUS TO AMALGAMATED COMPANY EMPLOYEES.
At Closing, Buyer shall cause Amalgamated Company to pay
bonuses to certain employees of Amalgamated Company designated by Xxxxxx in an
aggregate amount not to exceed US $70,000.
9.14 OHM AGREEMENT.
On or before Closing, Company or Amalgamated Company, as the
case may be, and Xx. Xxxxxx shall have entered into an agreement reasonably
satisfactory to Xx. Xxxxxx and XXXXX providing for (i) the purchase by Company
or Amalgamated Company, as the case may be, from Xx. Xxxxxx of all the
outstanding shares in capital of OHM Technologies Inc. ("OHM") for nominal
consideration, and (ii) release of Xx. Xxxxxx and PSI Technologies Inc. from any
guarantees and postponements given by Xx. Xxxxxx and PSI Technologies Inc.
to secure the debt of OHM.
9.15 NO MATERIAL ADVERSE CHANGES.
There shall have been no material adverse change in Company's
and Amalgamated Company's financial condition, business, assets or liabilities
(actual or contingent) from the date of this Agreement through the Closing and
REMEC and Buyer shall have received a certificate signed by Xx. Xxxxxx to that
effect.
9.16 DUE DILIGENCE.
REMEC shall have completed to its reasonable satisfaction, on
or before October 8, 1997, legal due diligence relating to Company, Amalgamated
Company, the pre- closing reorganization involving the Xxxxxx Family, Xxxxxx
Holdco and Millowave and the contemplated post-closing amalgamation of
Amalgamated Company and Buyer.
9.17 DEFENCE INDUSTRY PRODUCTIVITY PROGRAM COOPERATION
AGREEMENT.
On or before Closing, REMEC, Buyer and Company or Amalgamated
Company, as the case may be, shall have entered into a cooperation agreement
reasonably satisfactory to REMEC and Sellers relating to the Defence Industry
Productivity Program sponsored by the Government of Canada, which shall provide
that, among other things, (i) RoyNat will not have any liability with respect to
Company's or Amalgamated Company's participation in the program or any contracts
relating thereto, (ii) Xx. Xxxxxx and Xxxxxx
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Holdco, jointly and severally, will be responsible for 50% of any losses or
damages incurred by Company or Amalgamated Company on account of the failure to
obtain the assignment of contracts relating to the program from GHZ Technologies
Inc. to Company or Amalgamated Company, and (iii) Sellers will not be
responsible for any losses or damages to Company or Amalgamated Company under
any contracts (or any cancellation thereof) relating to the program on account
of the change of control of Company or Amalgamated Company occurring as a result
of Buyer's acquisition of the Purchased Shares.
9.18 INTERIM FINANCIALS.
The Interim Financials shall have been delivered to REMEC
prior to Closing.
9.19 AMALGAMATION OF MILLOWAVE AND NANOWAVE.
At least one day prior to the Closing Date, Millowave and
Nanowave shall have amalgamated in accordance with the laws of Nova Scotia.
ARTICLE X
CONDITIONS TO THE OBLIGATIONS OF SELLERS
The obligations of Sellers under this Agreement are subject to
the fulfillment, at or before the Closing, of each and every one of the
following conditions, any one or more of which may be waived by Sellers.
10.1 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING.
The representations and warranties of REMEC and Buyer
contained in this Agreement shall be deemed to have been made again at and as of
the Closing with respect to the state of affairs then existing, and shall then
be true in all material respects except that if a representation is already
limited to matters characterized as "material" it shall be correct in all
respects.
10.2 PERFORMANCE OF COVENANTS.
All of the covenants required to be performed by REMEC and
Buyer at or before the Closing pursuant to the terms of this Agreement shall
have been duly performed.
10.3 CERTIFICATE.
At the Closing, Sellers shall have received a certificate
signed on behalf of REMEC and Buyer to the effect that each of the
representatives and warranties of REMEC and Buyer in this Agreement is true and
correct in all respects as of the Closing Date as if made on the Closing Date
and that REMEC and Buyer have complied with each of their respective covenants
in this Agreement.
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10.4 CONSENTS.
Buyer shall have received all necessary consents, approvals
and waivers with respect to the consummation of the transactions contemplated by
this Agreement except for those indicated in REMEC's disclosure letter as not
being obtained before Closing.
10.5 GOOD STANDING CERTIFICATE.
REMEC shall have furnished Sellers with a good standing
certificate, dated as near to the date of the Closing as practical, from the
Secretary of State of California and the California Franchise Tax Board. Buyer
shall have furnished Sellers with a good standing certificate, dated as near to
the Closing Date as practical, from the appropriate Governmental Entity in Nova
Scotia.
10.6 GOVERNMENTAL FILINGS.
If the purchase and sale of the Purchased Shares is subject to
the notification requirements of the Competition Act (Canada) or the HSR Act,
all waiting periods under such acts relating to the transactions contemplated
under the Agreement shall have expired or terminated.
10.7 SUPPORT AGREEMENT.
Buyer and REMEC shall have entered into the Support Agreement
substantially in the form attached as Exhibit C.
10.8 XXXXXX EMPLOYMENT AGREEMENTS.
Company or Amalgamated Company and REMEC shall have entered
into the Xxxxxx Employment Agreement with Xx. Xxxxxx substantially in the form
of Exhibit X. XXXXX shall have entered into the Xxxxxx Employment Agreement with
Xx. Xxxxxx substantially in the form of Exhibit F.
10.9 OPINION OF COUNSEL.
Sellers shall have received an opinion of Stikeman, Elliott,
counsel to Buyer, in form and substance to the reasonable satisfaction of
Sellers. Sellers shall have received an opinion of Xxxxxx Xxxxxx White &
XxXxxxxxx, counsel to REMEC, in form and substance to the reasonable
satisfaction of Sellers.
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10.10 PAYMENT TO ROYNAT.
At Closing, Buyer shall cause Amalgamated Company to pay CDN
$2,000,000 of outstanding debt owed to RoyNat at Closing pursuant to the terms
of the Equity Financing Debenture dated March 26, 1997, upon release by RoyNat
of any other liability owing by Company or Amalgamated Company to RoyNat under
that debenture.
10.11 OHM AGREEMENT.
On or before Closing, Company or Amalgamated Company, as the
case may be, and Xx. Xxxxxx shall have entered into an agreement reasonably
satisfactory to Xx. Xxxxxx and REMEC providing for (i) the purchase by Company
or Amalgamated Company, as the case may be, from Xx. Xxxxxx of all the
outstanding shares in capital of OHM for nominal consideration, and (ii) the
release of Xx. Xxxxxx and PSI Technologies Inc. from any guarantees and
postponements given by Xx. Xxxxxx and PSI Technologies Inc. to secure the debt
of OHM.
10.12 NO MATERIAL ADVERSE CHANGE.
Sellers shall have been no material adverse change in REMEC's
financial condition, business, assets or liabilities (actual or contingent) from
the date of this Agreement through the Closing. Buyer shall have engaged in no
business activity prior to the Closing. Sellers shall have received a
certificate signed by officers of REMEC and Buyer as to the matters referenced
in this Section 10.11.
10.13 DUE DILIGENCE.
Xx. Xxxxxx and Xxxxxx Holdco shall have completed to each of
their reasonable satisfaction, on or before October 8, 1997, legal due diligence
relating to REMEC and the post-closing reorganization contemplated in Section
7.4.
10.14 DEFENCE INDUSTRY PRODUCTIVITY PROGRAM COOPERATION
AGREEMENT.
On or before Closing, REMEC, Buyer and Company or Amalgamated
Company, as the case may be, shall have entered into a cooperation agreement
reasonably satisfactory to REMEC and Sellers relating to the Defence Industry
Productivity Program sponsored by the Government of Canada, which shall provide
that, among other things, (i) RoyNat will not have any liability with respect to
Company's or Amalgamated Company's participation in the program or any contracts
relating thereto, (ii) Xx. Xxxxxx and Xxxxxx Holdco, jointly and severally, will
be responsible for 50% of any losses or damages incurred by Company or
Amalgamated Company on account of the failure to obtain the assignment of
contracts relating to the program from GHZ Technologies Inc. to Company or
Amalgamated Company, and (iii) Sellers will not be responsible for any losses or
damages to Company or Amalgamated Company under any contracts (or any
cancellation thereof) relating to the
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program on account of the change of control of Company or Amalgamated Company
occurring as a result of Buyer's acquisition of the Purchased Shares.
10.15 AMALGAMATION OF MILLOWAVE AND NANOWAVE.
At least one day prior to the Closing Date, Millowave and
Nanowave shall have amalgamated in accordance with the laws of Nova Scotia.
10.16 CLOSING PAYMENTS.
At Closing (i) Amalgamated Company shall pay to PSI
Technologies Inc. CDN $27,950 in payment of an existing accounts payable amount
owing to PSI Technologies Inc. recorded on the books of Company on or before
June 30, 1997, (ii) Amalgamated Company shall pay to Xx. Xxxxxx US $20,000 in
payment in full of deferred salary of Xx. Xxxxxx of US $55,000 recorded on the
books of Company on or before June 30, 1997 and (iii) Amalgamated Company shall
pay to Xx. Xxxxxx CDN $10,000 in reimbursement of a financing fee paid on behalf
of Company by Xx. Xxxxxx to RoyNat recorded on the books of Company on or before
June 30, 1997; provided, however, that the obligations of Amalgamated Company to
make each of the payments set forth in clauses (i), (ii) and (iii) above are
conditioned on presentation to REMEC of documentation to the reasonable
satisfaction of REMEC that each such cost or expense was a bona fide cost or
expense of Company incurred in the ordinary course of business consistent with
past practices. If such documentation relating to any of the payments set forth
in clauses (i), (ii) or (iii) above is not presented to REMEC to its reasonable
satisfaction on or before Closing, the obligation of Amalgamated Company to make
any such payment shall cease to be a condition to the obligations of Sellers to
complete the transactions contemplated under this Agreement.
ARTICLE XI
TERMINATION OF OBLIGATIONS; SURVIVAL
11.1 TERMINATION OF AGREEMENT.
Anything herein to the contrary notwithstanding, this
Agreement and the transactions contemplated by this Agreement shall terminate if
the Closing does not occur on or before the close of business on October 22,
1997 unless extended by mutual consent in writing of Sellers, Buyer and REMEC
and may otherwise be terminated at any time before the Closing as follows and in
no other manner:
(a) Mutual Consent. By mutual consent in writing of Sellers,
Buyer and REMEC.
(b) Conditions to REMEC's and Buyer's Performance Not Met. By
Buyer or REMEC with written notice to Sellers if any event occurs or
condition exists which
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would render impossible the satisfaction of one or more conditions to
the obligations of Buyer or REMEC to consummate the transactions
contemplated by this Agreement as set forth in Article IX.
(c) Conditions to Sellers' Performance Not Met. By any Seller
with written notice to Buyer, REMEC and the other Sellers if any event
occurs or condition exists which would render impossible the
satisfaction of one or more conditions to the obligation of Sellers to
consummate the transactions contemplated by this Agreement as set forth
in Article X.
(d) Inaccurate Information. By Buyer or REMEC if any material
information (whether or not in writing) delivered by or on behalf of
Sellers, Company or Amalgamated Company to REMEC is inaccurate or
incomplete in any material respect. By any Seller if any material
information (whether or not in writing) delivered by or on behalf of
Buyer or REMEC to any Seller is inaccurate or incomplete in any
material respect.
11.2 EFFECT OF TERMINATION.
In the event that this Agreement shall be terminated pursuant
to Section 11.1, all further obligations of the parties under this Agreement
shall terminate; provided that the obligations of the parties contained in
Section 7.2 [Confidential Information] and Section 13.1 [Expenses] shall survive
any such termination. A termination under Section 11.1 shall not relieve any
party of any liability for a breach of, or for any misrepresentation under this
Agreement, or be deemed to constitute a waiver of any available remedy
(including specific performance if available) for any such breach or
misrepresentation; provided, however, that monetary damages for all such
liability shall be limited to out-of-pocket costs and expenses, including
attorneys' fees incurred to enforce a party's rights under this Agreement, up to
an aggregate amount of $250,000 to be paid (i) by REMEC or Buyer for costs and
expenses of The Xxxxxx Family, Xxxxxx Holdco and RoyNat and (ii) by The Xxxxxx
Family, Xxxxxx Holdco or RoyNat for costs and expenses of REMEC and Buyer;
provided, further, that the limitation on monetary damages set forth above shall
not affect the rights of any party to obtain any equitable remedy, including
specific performance of another party's obligations under this Agreement.
11.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties contained in or made
pursuant to this Agreement shall expire on the Closing Date, except that the
representations and warranties contained in Section 3.4 [Title to Shares],
Section 3.36 [Activities of Millowave], Section 4.4 [Title to Shares], Section
5.1 [Activities of Buyer] shall survive the Closing and remain in full force and
effect indefinitely.
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ARTICLE XII
INDEMNIFICATION
12.1 OBLIGATIONS OF SELLERS.
Each of Xx. Xxxxxx, Xxx. Xxxxxx, the Xxxxxx Trust and Xxxxxx
Holdco, jointly and severally, and RoyNat, severally but not jointly, agrees to
indemnify and hold harmless Buyer, Company and REMEC, and their respective
directors, officers, employees, affiliates, agents and assigns from and against
any and all Losses of Buyer, Company, Amalgamated Company or REMEC, directly or
indirectly, as a result of, or based upon or arising from any inaccuracy in or
breach or nonperformance of any of the surviving representations and warranties
referenced in Section 11.3 and the covenants or agreements made by such Seller
in or pursuant to Article VII of this Agreement; provided, however, that the
joint and several obligations of Xxxxxx Holdco, Xx. Xxxxxx, Xxx. Xxxxxx and the
Xxxxxx Trust to indemnify all Indemnified Parties pursuant to this Section 12.1
shall be limited to, and shall not exceed, US $7,560,000 and RoyNat's several
obligations to indemnify all Indemnified Parties pursuant to this Section 12.1
shall be limited to, and shall not exceed, US $1,440,000, respectively.
12.2 OBLIGATIONS OF BUYER AND REMEC.
Each of Buyer and REMEC agree, jointly and severally, to
indemnify and hold harmless any Seller from and against any Losses of such
Seller, directly or indirectly, as a result of, or based upon or arising from,
any inaccuracy in or breach or nonperformance of any of the surviving
representations and warranties referenced in Section 11.3 and the covenants or
agreements made by Buyer or REMEC in or pursuant to Article VII of this
Agreement; provided, however, that the joint obligations of Buyer and REMEC to
indemnify all Indemnified Parties pursuant to this Section 12.2 shall be limited
to, and shall not exceed, US $9,000,000.
12.3 PROCEDURE.
(a) Notice. Any party seeking indemnification with respect to
any Loss shall give notice to the party required to provide indemnity hereunder
on or before the date specified in Section 12.4.
(b) If any claim, demand or liability is asserted by any third
party against any Indemnified Party, the Indemnifying Party shall upon the
written request of the Indemnified Party, defend any actions or proceedings
brought against the Indemnified Party in respect of matters embraced by the
indemnity, but the Indemnified Party shall have the right to conduct and control
the defense; provided, however, that any compromise or settlement of any
Indemnifiable Claim must be approved by the Indemnifying Party, such approval
not to be unreasonably withheld. If, after a request to defend any action or
proceeding, the Indemnifying Party neglects to defend the Indemnified Party, a
recovery
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against the latter suffered by it in good faith, is conclusive in its favor
against the Indemnifying Party, provided, however, that, if the Indemnifying
Party has not received reasonable notice of the Action or proceeding against the
Indemnified Party, or is not allowed to control its defense, judgment against
the Indemnified Party is only presumptive evidence against the Indemnifying
Party.
(c) The provisions of this Article are subject to the rights
of any Indemnified Party's insurer which may be defending any such claim.
Nothing in this Section 12.3 shall be deemed to obligate any person to maintain
any insurance or to pursue any claim against any insurer or third party.
12.4 SURVIVAL OF INDEMNIFICATION.
The obligation of indemnification set out in this Article XII
shall survive the Closing and shall terminate on the six year anniversary of the
Closing Date. Any matter as to which a claim has been asserted by notice to the
other party that is pending or unresolved at the end of such six-year
anniversary date shall continue to be covered by this Article XII
notwithstanding any applicable statute of limitations (which the parties hereby
waive) until such matter is finally terminated or otherwise resolved by the
parties under this Agreement or by a court of competent jurisdiction and any
amounts payable hereunder are finally determined and paid.
12.5 NOTICE OF BREACH.
Sellers agree to notify Buyer and REMEC, and Buyer and REMEC
agree to notify Sellers, of any liabilities, claims or inaccurate surviving
representations or warranties or breaches by such party which may give rise to a
claim for indemnification by the other party under this Article XII upon
discovery or receipt of notice thereof, whether before or after Closing.
12.6 NON-EXCLUSIVE REMEDY.
This Article XII shall not be deemed to preclude or otherwise
limit in any way the exercise of any other rights or pursuit of other remedies
for the breach of this Agreement or with respect to any inaccurate surviving
representation or warranty.
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ARTICLE XIII
MISCELLANEOUS
13.1 EXPENSES.
Each party to this Agreement shall pay its own costs and
expenses (including all legal, accounting, broker, finder and investment banker
fees) relating to this Agreement, the negotiations leading up to this Agreement
and the transactions contemplated by this Agreement.
13.2 AMENDMENT.
This Agreement shall not be amended except by a writing duly
executed by Sellers, REMEC and Buyer.
13.3 ENTIRE AGREEMENT.
This Agreement, including the Exhibits, Schedules and other
documents delivered pursuant to this Agreement, contain all of the terms and
conditions agreed upon by the parties relating to the subject matter of this
Agreement and supersede all prior and contemporaneous agreements, negotiations,
correspondence, undertakings and communications of the parties, oral or written,
respecting the subject matter.
13.4 GOVERNING LAW.
This Agreement and the legal relations between the parties
shall be governed by and construed in accordance with the laws of the Province
of Ontario and the laws of Canada applicable therein and without regard to
conflicts of law doctrines of any other jurisdiction. In the event of any action
at law or equity to enforce any of the provisions or rights under this
Agreement, the parties agree to attorn and submit to the non-exclusive
jurisdiction of the Ontario Court (General Division).
13.5 ATTORNEYS FEES.
In the event of any Action for the breach of this Agreement or
misrepresentation by any party, the prevailing party shall be entitled to
reasonable attorney's fees, costs and expenses incurred such Action.
13.6 SEVERABILITY.
If any provision of this Agreement is determined to be
invalid, illegal or unenforceable by any Governmental Entity, the remaining
provisions of this Agreement shall remain in full force and effect.
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13.7 HEADINGS.
The headings contained in this Agreement are intended solely
for convenience and shall not affect the rights of the parties to this
Agreement.
13.8 MUTUAL CONTRIBUTION.
The parties to this Agreement and their counsel have mutually
contributed to its drafting. Consequently, no provision of this Agreement shall
be construed against any party on the ground that party drafted the provision or
caused it to be drafted.
13.9 NOTICES.
All notices, requests, demands, and other communications made
in connection with this Agreement shall be in writing and shall be deemed to
have been duly given on the date of delivery if delivered by hand delivery or by
facsimile to the persons identified below, two days after dispatch if sent by a
nationally-recognized overnight courier service or five days after mailing if
mailed by certified or registered mail postage prepaid return receipt requested
addressed as follows:
If to REMEC or Buyer:
Xx. Xxxxxx X. Xxxxxxx
REMEC, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
U.S.A.
Facsimile: (000) 000-0000
Confirmation Number: (000) 000-0000
With a copy to:
Xxxxxx X. Xxxxxx, Esq.
Xxxxxx Xxxxxx White & XxXxxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
U.S.A.
Facsimile: (000) 000-0000
Confirmation Number: (000) 000-0000
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and
Xxxx X. Xxxxxxx, Esq.
Stikeman, Xxxxxxx
0000 Xxxx-Xxxxxxxx Xxxxxxxxx Xxxx
00xx Xxxxx
Xxxxxxxx, Xxxxxx X0X 0X0
XXXXXX
Facsimile: (000) 000-0000
Confirmation Number: (000) 000-0000
If to Sellers:
Xxxxxx Xxxxxx, Ph.D.
Nanowave Technologies Inc.
000 Xxxxxx Xxxxxx
Xxxx 0
Xxxxxxxxx, Xxxxxxx X0X 0X0
XXXXXX
Facsimile:
Confirmation Number:
RoyNat Inc.
Scotia Plaza
00 Xxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
XXXXXX
Facsimile: (000) 000-0000
Confirmation Number: (000) 000-0000
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With a copy to:
Xxxxxx Page, Esq.
Xxxxxx & Elliot
Scotia Plaza
00 Xxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
XXXXXX
Facsimile: (000) 000-0000
Confirmation Number: (000) 000-0000
and
Xxxx Xxxxx, Esq.
Blake, Xxxxxxx & Xxxxxxx
Commerce Court West, Box 25
Toronto, Ontario X0X 0X0
XXXXXX
Facsimile: (000) 000-0000
Confirmation Number: (000) 000-0000
Such persons and addresses may be changed, from time to time, by means of a
notice given in the manner provided in this Section.
13.10 WAIVER.
Waiver of any term or condition of this Agreement by any
party shall not be construed as a waiver of any subsequent breach or failure of
the same term or condition, or a waiver of any other term or condition of this
Agreement.
13.11 BINDING EFFECT; ASSIGNMENT.
The parties agree that this Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and
assigns. No party to this Agreement may assign or delegate, by operation of Law
or otherwise, all or any portion of its rights, obligations or liabilities under
this Agreement without the prior written consent of all other parties to this
Agreement, which they may withhold in their absolute discretion.
13.12 NO THIRD PARTY BENEFICIARIES.
Nothing in this Agreement shall confer any rights upon any
person or entity which is not a party or an assignee of a party to this
Agreement, but the Support Agreement shall not be so limited.
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13.13 COUNTERPARTS.
This Agreement may be signed in any number of counterparts
with the same effect as if the signatures to each counterpart were upon a single
instrument. All counterparts shall be deemed an original of this Agreement.
13.14 FURTHER ASSURANCES.
After the Closing, the parties to this Agreement shall
take such further actions as they agree may be reasonably necessary to carry out
the transactions contemplated by this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
/s/ XXXXXX XXXXXX, PH.X. XXXXX, INC.
-----------------------------------------
Xxxxxx Xxxxxx, Ph.D.
/s/ XXXXXXX XXXXXXXXX XXXXX-XXXXXX By /s/ XXXXX XXXXXXX
----------------------------------------- ------------------------------
Xxxxxxx Xxxxxxxxx Xxxxx-Xxxxxx Xxxxx Xxxxxxx, President
XXXXXX FAMILY TRUST REMEC CANADA ULC
By /s/ XXXXXX XXXXXX By /s/ XXXXX XXXXXXX
-------------------------------------- ------------------------------
Xxxxxx Xxxxxx, Ph.D, Trustee Xxxxx Xxxxxxx, President
By /s/ XXXXXX X.X. PAGE
--------------------------------------
Xxxxxx X.X. Page, Trustee
1256393 ONTARIO LIMITED
By /s/ XXXXXX XXXXXX
--------------------------------------
Xxxxxx Xxxxxx, Ph.D., President
ROYNAT INC.
By /s/ XXXX XXXXX
--------------------------------------
Xxxx Xxxxx
Senior Vice President
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