PLAN OF MERGER
THIS AGREEMENT made and entered into as of this 6th day of June 2001,
by and between Safetek International, Inc., a Delaware corporation ("SFII"),
with offices at 0000 00xx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000, and Safetek
Acquisition Corp., a Delaware corporation ("Acquisition Corp."), with offices at
0000 00xx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000.
WHEREAS, all the authorized and issued capital stock of Acquisition
Corp. is owned by SFII; and
WHEREAS, the Parties agree that it would be in their respective best
interests to merge.
NOW, THEREFORE, in consideration of the provisions and the
representations, warranties and agreements herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereby agree as follows:.
N O W T H E R E F O R E,
In consideration of the provisions and the representations, warranties
and agreements herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:
ARTICLE I
TERMS AND CONDITIONS OF STOCK EXCHANGE AND MERGER
(a) On the "Effective Date", as hereinafter defined, the following
shall be or shall have been done:
(i) SFII and Acquisition Corp. shall have obtained approval
for this Agreement and the transactions described herein by their
respective Boards of Directors and Owners, if necessary, pursuant to
the applicable provisions of Delaware law;
(ii) Acquisition Corp. shall merge into SFII and cease to
exist;
(iii) SFII shall thereupon and thereafter possess, and be the
owner of, all the rights, privileges, powers, franchises, patents,
trademarks, licenses, and other assets and accounts receivable of every
kind and description of Acquisition Corp., and SFII shall be subject to
all the restrictions, disabilities, and duties of Acquisition Corp.
with respect thereto; and all property, real, personal or mixed, and
all debts and obligation due to Acquisition Corp.on whatever account
shall be vested in SFII; and all rights of creditors and all liens upon
any property of Acquisition Corp. shall be preserved unimpaired; and
all debts, liabilities, duties, and obligations of Acquisition Corp.
[including obligations of Acquisition Corp. on account of (A) Stock
Subscriptions to which Acquisition Corp. is a Party; (B) Debentures of
Acquisition Corp.; and (C) Stock Conversion obligations with respect to
Debentures of Acquisition Corp.], shall henceforth attach to SFII, and
may enforced against SFII to the same extent as if said debts,
liabilities, duties, and obligations had been incurred or contracted by
SFII;
(iv) If, at any time after the Effective Date, SFII shall
consider or be advised that any further assignments or assurances and
law or any other acts are necessary or desirable (A) to vest, perfect
or confirm, of record or otherwise, in SFII, title to and possession of
any property or right of Acquisition Corp. acquired or to be acquired
by reason of, or in connection with, this Merger, or (B) otherwise to
carry out the purposes of this Merger, Acquisition Corp. and its
officers and directors shall be deemed to have granted to SFII an
irrevocable power of attorney to execute and deliver all such proper
deeds, assignments, and assurances in law, and to do all acts necessary
or proper to vest, perfect or confirm title to and possession of such
property or rights in SFII addition and otherwise to carry out the
purposes of this Merger; and the proper officers and directors of SFII
are fully authorized in the name of Acquisition Corp. otherwise to take
any and all such action(s);
(v) Acquisition Corp.'s 8% Series A $1,000,000.00 Senior
Subordinated Convertible Redeemable Debentures (the "Acquisition Corp.
Debentures"), together with authorized but unissued underlying shares
of Acquisition Corp.'s Common stock, Par Value $0.0001 per share (the
"Acquisition Corp. Common Stock"), into which the Acquisition Corp.
Debentures are convertible from time to time, shall be converted into
identical SFII debentures (the "SFII Debentures"), together with
authorized but unissued underlying shares of Common Stock, Par Value
$0.0001 per share, of SFII into which the new SFII Debentures may be
converted (the "SFII Common Stock");
(vi) All of the issued and outstanding shares of the Common
Stock, Par Value $0.0001 per share, i.e., 10 shares, of Acquisition
Corp. held by SFII prior to this Merger, may, by virtue of this Merger,
and without any further action of SFII, be canceled simultaneously with
the effectiveness of this Merger.
(vii) Until surrendered and exchanged as herein provided, each
outstanding certificate which, prior to the Effective Date, represented
a Acquisition Corp. security, shall be deemed for all corporate
purposes to evidence ownership of the appropriate number of securities
of SFII into which Acquisition Corp. security shall have been so
converted;
(viii) Subject to Sub-section (vi), above, each holder of a
certificate representing issued and outstanding securities of
Acquisition Corp. immediately prior to the Effective Date of the
Merger, shall, upon surrender of such certificate to SFII after the
Effective Date, be entitled to receive a certificate representing the
appropriate number of shares of securities of SFII as described above;
(ix) If any certificate representing a SFII security is to be
issued in a name other than that in which the certificate surrendered
is registered, it shall be a condition of such issuance that the
certificate so surrendered shall be properly endorsed or otherwise in
proper form for transfer and that the person requesting such issuance
shall either pay to SFII or its transfer agent any transfer or other
taxes required by reason of the issuance of certificates representing a
SFII security in a name other than that of the registered holder of the
certificate surrendered, or establish to the satisfaction of SFII or
its transfer agent that such tax has been paid or is not applicable;
and
(x) The officers and directors of Acquisition Corp. shall
resign their positions.
(b) The right to transfer restricted securities may be permitted if, in
the opinion of counsel satisfactory to SFII, the securities may be transferred
pursuant to an exemption from registration under the Act.
(c) This merger shall become effective ("Effective Date") on the day
set forth in the Certificate of Ownership to be filed with the Secretary of
State of Delaware by the Parties as soon as practicable after the date this
Agreement is signed.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF ACQUISITION CORP.
(a) Organization and Authority. Acquisition Corp. is duly organized,
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation, with full corporate power and authority to own its property and
assets and to conduct its business in the manner and in the places in which it
is now conducted. Acquisition Corp. is qualified to do business as a domestic
corporation in the State of Delaware, and the character of the properties owned
or leased by Acquisition Corp. and the nature of the business conducted by it
does not require such qualification in any other jurisdiction, except where the
failure to so qualify would not have a material adverse affect on Acquisition
Corp. or its business.
(b) Corporate Action. All corporate action necessary on the part of
Acquisition Corp. to authorize the execution and delivery of this Agreement and
the performance or satisfaction of Acquisition Corp.'s obligations hereunder and
thereunder has been or will have been duly taken prior to the Effective Date.
This Agreement and the Articles of Incorporation constitute the valid and
binding obligations of Acquisition Corp. enforceable in accordance with their
respective terms.
(c) Capitalization. As at the Effective Date, Acquisition Corp.'s
entire capitalization shall consist of:
(i) 10,000,000 shares of Common Stock, Par Value $0.0001 per
share, of which 10 shares shall be issued and outstanding; and
(ii) 8% Series A $1,000,000.00 Senior Subordinated Convertible
Redeemable Debentures, convertible, from time to time, into authorized
but unissued shares of Class A Common Stock, Par Value $0.0001 per
share, upon conversion into which no shares of said underlying shares
of Common Stock shall have been issued.
As of the date of this Agreement and as at Effective Date, all of the
outstanding capital stock of Acquisition Corp. is and will be duly issued in
accordance with all applicable laws, rules and regulations, is and will be fully
paid and non-assessable. As of the date of this Agreement and as at Effective
Date, there are and will be no outstanding subscriptions, rights, options,
warrants or other agreements obligating Acquisition Corp. to issue, sell or
transfer any stock or other securities of Acquisition Corp., except as otherwise
described in this Agreement.
(d) Articles of Incorporation and Bylaws. The Articles of Incorporation
and bylaws of Acquisition Corp. are true, correct and complete. The minute books
of Acquisition Corp. contain true and complete records of all meetings and
consents in lieu of meetings of its Board of Directors and owners since the date
of incorporation and accurately reflect all transactions referred to therein.
(e) No Material Adverse Changes. As of the date of this Agreement,
there shall be no material adverse change in the assets, operations, conditions
(financial of otherwise) or prospective business of Acquisition Corp.; there
shall be no damage, destruction or loss materially affecting the assets,
prospective business, operations or condition (financial or otherwise) of
Acquisition Corp., whether or not covered by insurance; there shall be no
declaration, setting aside or payment of any dividend or distribution with
respect to any redemption or repurchase of Acquisition Corp.'s capital stock;
there shall no sale of an asset (other than in the ordinary course of business
or otherwise approved by SFII) or mortgage or pledge by Acquisition Corp. of any
properties or assets.
(f) Taxes. Acquisition Corp. has prepared and filed all appropriate
federal, state and local tax returns of every kind and category (including,
without limitation, income taxes, estimated taxes, excise taxes, sales taxes,
inventory taxes, use taxes, gross receipt taxes, franchise taxes and property
taxes) for all periods prior to and through the date hereof for which any such
returns have been required to be filed by it and has paid all taxes shown to be
due by said returns or on any assessments received by it, or has made adequate
provisions for the payment thereof.
(g) Compliance with Laws. Acquisition Corp. and all business conducted
by it has complied with all federal, state, county and local laws, ordinances,
regulation, inspections, orders, judgments, injunctions, awards or decrees
applicable to it or its business which, if not complied with, would materially
and adversely affect its business.
(h) Compliance with Other Instruments. Neither the execution nor
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will result in any violation of or be in conflict with any term of any
contract or other instrument to which Acquisition Corp. is a party or of any
judgment, statute, rule or regulation applicable to Acquisition Corp., or result
in the creation of any lien, charge or encumbrance on any of its properties or
assets, or result in the acceleration of any obligation of Acquisition Corp.
under any deed of trust, mortgage, lease, or similar instrument to which it is a
party.
(i) No Breach. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will not:
(i) violate any provisions of the Articles of Incorporation or
By-laws of Acquisition Corp.;
(ii) violate, conflict with or result in the breach of any of
the terms of, result in a material modification of, or otherwise give
any other contracting party the right to terminate, or which constitute
a default under, any contract or other agreement to which Acquisition
Corp. is a party or by or to which it or any of its assets or
properties may be bound or subject;
(iii) violate any order, judgment, injunction, award or decree
of any court, arbitrator or governmental or regulatory body against, or
binding upon, Acquisition Corp. or upon the properties or business of
Acquisition Corp.; or
(iv) violate any statute, law or regulation of any
jurisdiction applicable to the transactions contemplated herein.
(j) Litigation. There is no outstanding order, judgment, injunction,
award or decree of any court, government or regulatory body or arbitration
tribunal against or involving Acquisition Corp. There is no action, suit or
claim or legal, administrative or arbitral proceeding or any investigation
(whether or not the defense thereof or liabilities in respect thereof are
covered by insurance) pending or threatened against or involving Acquisition
Corp. or any of its respective properties or assets. There is no fact, event or
circumstances that may give rise to any suit, action, claim, investigation or
proceeding except as disclosed in the letter described above. There is no
action, suit or claim or legal, administrative or arbitral proceeding pending or
threatened that would give rise to any right of indemnification on the part of
any director of Acquisition Corp. or its respective heirs, executors or
administrators of such directors or officers.
(k) Labor Relations. Acquisition Corp. is not a party to any collective
bargaining agreement governing its employees. There is no pending or threatened
election for union representation of Acquisition Corp.'s employees.
(l) Leases. All of the leases to which Acquisition Corp. is a party are
in full force and effect and constitutes a legal, valid, and binding obligation
of the respective parties thereto enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium, or other similar
laws relating to the enforcement of creditors' rights generally and to the
availability of equitable remedies which are subject to the discretion of the
Court before which any proceeding therefor may be brought.
(m) Agreements. The document titled "Acquisition Corp.'s Material
Contracts" which shall be incorporated by reference into this Agreement sets
forth any material contract or arrangement to which Acquisition Corp. is a party
or by or to which it or its assets, properties or business are bound or subject
whether oral or written. All of the agreements set forth in said document are
valid, binding enforceable, subsisting agreements, in full force and effect.
Acquisition Corp. is not in default under any of them (nor is any other party to
any of such agreements, nor does any condition exist which with notice or lapse
of time or both would constitute default thereunder).
(n) Accounts Receivable. All of Acquisition Corp.'s accounts and other
receivables or thereafter acquired are collectible in full, less any reserves
set up for doubtful receivables on its books.
(o) Inventories. Acquisition Corp.'s inventories, as applicable, or
thereafter acquired are valued at cost or market and consist of items which are
of a quality and quantity usable and/or saleable in the ordinary course of
Acquisition Corp.'s business.
(p) Liabilities. Acquisition Corp.'s Liabilities as of the date of this
Agreement are as set forth in that document entitled Financial Statements of
Acquisition Corp., which shall be incorporated herein by reference.
(q) Conduct of Business. Acquisition Corp. shall conduct its business
only in the ordinary course thereof consistent with prudent business judgment
and past practice and in such a manner that the representations and warranties
contained in this Section 2 shall be true and correct at and as of the Effective
Date (except for changes contemplated, permitted or required by this Agreement)
and so that the conditions to be satisfied by Acquisition Corp. at the Effective
Date shall have been satisfied. Acquisition Corp. shall not incur expenses or
liabilities between the date this Agreement is signed and the Effective Date
other than in the normal course of business.
(r) Unusual Events. Until the Effective Date, Acquisition Corp. shall
supplement or amend all relevant documents incorporated by reference and made
part of this Agreement with respect to any matter thereafter arising or
discovered which, if existing or known at the date of this Agreement, would have
been set forth or described in such documents; provided, however, that for the
purpose of the rights and obligations of the parties hereunder, any such
material supplemental disclosure shall not be deemed to have been disclosed to
SFII until the date Acquisition Corp. delivers it to SFII, unless agreed to in
writing by SFII.
(s) Changes in Business Relationship. Acquisition Corp. is not aware of
any material changes or threatened changes in its business or client
relationships, including any discontinuance of contractual relationships.
(t) Full Disclosure. No representation or warranty of Acquisition Corp.
and no statement contained in any document incorporated by reference and made
part of this Agreement furnished by Acquisition Corp. to SFII pursuant hereto or
in connection with the transactions contemplated hereby contain or at the
Effective Date will contain any untrue statement of a material fact or omit or
will omit to state a material fact necessary to make such fact not misleading or
necessary to provide SFII with full information as to Acquisition Corp. and its
affairs.
(u) Status of Representations and Warranties as at Effective Date. The
representations and warranties contained in this Section 2 shall be true and
complete on the Effective Date with the same force and effect as though such
representations and warranties had been made on and as at the Effective Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SFII
(a) Reporting Company. SFII is required to and does file reports with
the Securities and Exchange Commission ("SEC") pursuant to Section 13 (a) or 15
(d) of The Securities Exchange Act of 1934, and SFII is current with respect to
all reports required to be filed with the SEC.
(b) Capitalization. As at the Effective Date, SFII's entire
capitalization shall consist of:
(i) 6,000,000 shares of Common Stock, Par Value $0.0001 per
share, with each holder thereof being entitled to cast one vote for
each share held on all matters properly submitted to the Shareholders
for their vote; and
(ii) 1,000,000 shares of Preferred Stock, Par Value $0. 0001
per share, with each holder thereof having the right to convert two
shares of the Preferred into one share of the Common.
As of the date of this Agreement and as at Effective Date, all of the
outstanding capital stock of SFII is and will be duly issued in accordance with
all applicable laws, rules and regulations, is and will be fully paid and non-
assessable. As of the date of this Agreement and as at Effective Date, all
outstanding subscriptions, rights, options, warrants or other agreements
obligating SFII to issue, sell or transfer any stock or other securities of
SFII, are as is set forth in the Financial Statements of SFII attached hereto.
(c) Organization and Authority. SFII is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Delaware,
with full corporate power and authority to own its property and assets and to
conduct its business in the manner and the places in which it is now conducted.
(d) Corporate Action. All corporate action necessary on the part of
SFII to authorize the execution and delivery to SFII of this Agreement and the
Certificate and the performance of its obligations thereunder has been or will
have been duly taken prior to the Effective Date. This Agreement and the
Articles of Incorporation constitute the valid and binding obligations of SFII
enforceable in accordance with their respective terms. The execution and
delivery of and the consummation of the transactions provided for in this
Agreement and the Articles of Incorporation will not violate any provision of
the Certificate of Incorporation, Articles of Incorporation or By-laws of SFII,
as applicable, any provision of law, or any judgment, order or decree of any
court or agency or government, applicable to SFII, or result in a breach of,
default under, or acceleration of any obligation under any indenture or
agreement to which SFII is a party.
(e) Compliance with Other Instruments. Neither the execution nor
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will result in any violation of or be in conflict with any term or any
contract or other instrument to which SFII is a party or of any judgment,
decree, order, statute, rule or regulation applicable to SFII, or result in the
creation of any lien, charge or encumbrance on any of its properties or assets,
or result in the acceleration of any obligation of SFII under any deed of trust,
mortgage, lease, or similar instrument to which it is a party.
(f) Compliance with Laws. SFII has complied with all federal, state,
county, local laws, ordinances, regulations, inspections, orders, judgments,
injunctions, awards or decrees applicable to it or its business which, if not
complied with, would materially and adversely affect its status as a public
company.
(g) Articles of Incorporation and Bylaws. SFII's Articles of
Incorporate and By-laws and any amendments to each, are true, correct and
complete. The minute books of SFII contain true and complete records of all
meetings and consents in lieu of meetings of their respective Board of Directors
and owners since the date of incorporation and accurately reflect all
transactions; referred to therein.
(h) Financial Statements and Liabilities. SFII's Financial Statements
set forth in its most recent Form 10-QSB are true and correct, and, together
with the disclosure made in said Report, fully disclose all of SFII's assets and
liabilities.
(i) Disclosures. No representation or warranty of SFII in this
Agreement, and no statement contained in any document incorporated by reference
and made a part of this Agreement or other document furnished or to be furnished
by SFII to Acquisition Corp. pursuant hereto or in connection with the
transactions contemplated hereby contains or at the Effective Date will contain
any untrue statement of a material fact or omit or will omit to state a material
fact necessary to make it not misleading or necessary to provide Acquisition
Corp. with full information as to SFII and its affairs.
(j) No Material Adverse Changes. As of the date of this Agreement,
there shall be no material adverse change in the assets, operations, conditions
(financial of otherwise) or prospective business of SFII; there shall be no
damage, destruction or loss materially affecting the assets, prospective
business, operations or condition (financial or otherwise) of SFII, whether or
not covered by insurance; there shall be no declaration, setting aside or
payment of any dividend or distribution with respect to any redemption or
repurchase of SFII's capital stock; there shall no sale of an asset (other than
in the ordinary course of business or otherwise approved by Acquisition Corp.)
or mortgage or pledge by SFII of any properties or assets.
(k) Taxes. SFII has prepared and filed all appropriate federal, state
and local tax returns of every kind and category (including, without limitation,
income taxes, estimated taxes, excise taxes, sales taxes, inventory taxes, use
taxes, gross receipt taxes, franchise taxes and property taxes) for all periods
prior to and through the date hereof for which any such returns have been
required to be filed by it and has paid all taxes shown to be due by said
returns or on any assessments received by it, or has made adequate provisions
for the payment thereof.
(l) Agreements. The document titled "SFII's Material Contracts" which
shall be incorporated by reference into this Agreement sets forth any material
contract or arrangement to which SFII is a party or by or to which it or its
assets, properties or business are bound or subject whether oral or written. All
of the agreements set forth in said document are valid, binding enforceable,
subsisting agreements, in full force and effect. SFII is not in default under
any of them (nor is any other party to any of such agreements, nor does any
condition exist which with notice or lapse of time or both would constitute
default thereunder).
(m) Insurance Policies. The document titled "SFII's Insurance Policies"
which shall be incorporated by reference and made part of this Agreement
contains a complete and correct list and summary description of all insurance
policies held by SFII and in force and effect at the date hereof, including but
not limited to key-man insurance, workers' compensation and employer liability,
automobile insurance, malpractice insurance, product liability and title
insurance.
(n) Labor Relations. SFII is not a party to any collective bargaining
agreement governing its employees. There is no pending or threatened election
for union representation of SFII's employees.
(o) Conduct of Business. Between the date of this Agreement and the
Effective Date, SFII shall conduct its business only in the ordinary course
thereof consistent with prudent business judgment and past practice and in such
a manner that the representations and warranties contained in this Section 3
shall be true and correct at and as of the Effective Date (except for changes
contemplated, permitted or required by this Agreement) and so that the
conditions to be satisfied by SFII at the Effective Date shall have been
satisfied. SFII shall not incur expenses or liabilities between the date this
Agreement is signed and the Effective Date other than in the normal course of
business.
(p) Unusual Events. Until the Effective Date, SFII shall supplement or
amend all relevant documents incorporated by reference and made part of this
Agreement with respect to any matter thereafter arising or discovered which, if
existing or known at the date of this Agreement, would have been set forth or
described in such documents; provided, however, that for the purpose of the
rights and obligations of the parties hereunder, any such material supplemental
disclosure shall not be deemed to have been disclosed to Acquisition Corp. until
the date SFII delivers it to SFII, unless agreed to in writing by Acquisition
Corp..
(q) Changes in Business Relationship. SFII is not aware of any material
changes or threatened changes in its business or client relationships, including
any discontinuance of contractual relationships.
(r) Representations and Warranties as at Effective Date. The
representations and warranties contained in this Section 3 shall be true and
complete on the Effective Date with the same force and effect as though such
representations and warranties had been made on and as at the Effective Date.
ARTICLE IV
COVENANTS OF ACQUISITION CORP.
(a) Conduct of Business. From the date of this Agreement through the
Effective Date, Acquisition Corp. shall conduct its business in the ordinary
course.
(b) Preservation of Business. From the date hereof through the
Effective Date, Acquisition Corp. shall use its best efforts to preserve its
business organization intact, keep available the services of its present
officers, employees, consultants and agents, maintain its present suppliers and
customers and preserve its goodwill.
(c) Insurance. Acquisition Corp. at all times will have in effect and
maintain insurance now in force on or with respect to its properties and assets
and its business and will at all times have in effect and maintain insurance
coverage against all hazards, casualties, liabilities, and losses in the amount
and of the character and kind normally carried by corporations engaged in a
business similar to that conducted by it.
(d) Litigation. Acquisition Corp. shall promptly notify SFII of any
lawsuits, claims, proceedings or investigations which after the date hereof are
threatened or commenced against it or any of their respective officers,
directors, employees, consultants, agents, owners or other representatives with
respect to the affairs of SFII.
(e) Compliance with Laws. Acquisition Corp. will comply in all material
respects with federal and state regulations necessary to effectuate the exchange
of all outstanding capital stock of Acquisition Corp. for shares of capital
stock of Acquisition Corp., as contemplated by this Agreement.
(f) Continued Effectiveness of Representations and Warranties. From the
date hereof through the Effective Date, Acquisition Corp. shall conduct its
business in such a manner so that the representations and warranties contained
in Section 2 shall continue to be true and correct on and as of the Effective
Date and as if made on the date of this Agreement, and shall:
(i) promptly give notice to SFII of any event, condition or
circumstances occurring from the date hereof through the Effective Date
which would render any of the representations or warranties untrue,
incomplete, insufficient or constitute a violation or breach of this
Agreement; and
(ii) supplement the information contained herein in order that
such information is kept current, complete and accurate.
ARTICLE V
COVENANTS OF SFII
(a) Conduct of Business. From the date of this Agreement through the
Effective Date, SFII shall conduct its business in the ordinary course.
(b) Preservation of Business. From the date hereof through the
Effective Date, SFII shall use its best efforts to preserve its business
organization intact, keep available the services of its present officers,
employees, consultants and agents, maintain its present suppliers and customers
and preserve its goodwill.
(c) Insurance. SFII at all times will have in effect and maintain
insurance now in force on or with respect to its properties and assets and its
business and will at all times have in effect and maintain insurance coverage
against all hazards, casualties, liabilities, and losses in the amount and of
the character and kind normally carried by corporations engaged in a business
similar to that conducted by it.
(d) Compliance with Laws. SFII will comply in all material respects
with federal and state regulations necessary to effectuate the exchange of all
outstanding capital stock of Acquisition Corp. for shares of capital stock of
SFII, as contemplated by this Agreement
(e) Litigation. SFII shall promptly notify Acquisition Corp. of any
lawsuits, claims, proceedings or investigations which after the date hereof are
threatened or commenced against it or against any of their respective officers,
directors, employees, consultants, agents, owners or other representatives with
respect to the affairs of SFII.
(f) Continued Effectiveness of Representations and Warranties. From the
date hereof to the Effective Date, SFII shall conduct its business in such a
manner so that the representations and warranties contained in Section 3 shall
continue to be true and correct on and as of the Effective Date and as if made
on the date of this Agreement, and shall:
(i) promptly give notice to Acquisition Corp. of any event,
condition or circumstances occurring from the date hereof through the
Effective Date which would render any of the representations or
warranties untrue, incomplete, insufficient or constitute a violation
or breach of this Agreement; and
(ii) supplement the information contained herein in order that
such information is kept current, complete and accurate.
(g) Dissenter's Rights. SFII understands that, as a shareholder of
Acquisition Corp., it may have Dissenter's Rights under Delaware law. However,
as the sole shareholder of Acquisition Corp., SFII declares that Dissenter's
Rights shall not be demanded prior to or after the Effective Date pursuant to
the provisions of Delaware Law, if any, as to dissenters' rights, and by signing
this Agreement, SFII waives dissenters' rights, if any, under Delaware law.
ARTICLE VI
CONDITIONS TO THE OBLIGATIONS OF SFII
The obligations of SFII to consummate this Agreement and the
transactions contemplated hereby are subject to the satisfaction at or before
the Effective Date of every one of the following conditions, any of which SFII
may in its sole discretion waive:
(a) Representations and Warranties. The representations and warranties
of Acquisition Corp. set forth in Section 2 hereof shall be true and correct at
and as of the Effective Date with the same effect as though such representations
and warranties had been made on and as of the date of this Agreement, and any
letter, statement, list, certificate or other written information furnished by
Acquisition Corp. pursuant hereto or in connection on with the transactions
contemplated hereby shall be true and correct in all material respects at and as
of the date or dates stated therein.
(b) Performance of Acquisition Corp.. Acquisition Corp. shall have
performed and complied with all agreements and conditions required by this
Agreement to be performed or complied with by it either prior to or at the
Effective Date.
(c) Governmental Permits and Approvals. Any and all permits and
approvals from any governmental or regulatory body required for the lawful
consummation of the transaction contemplated shall have been obtained.
(d) Third Party Consents. All consents, permits and approvals from
parties to any contracts or other agreements which may be required in connection
with the performance by the Parties hereto of their obligations under such
contacts or other agreements shall have been obtained.
(e) Litigation. No action, suit or proceeding shall have been
instituted before any court or governmental or regulatory body or instituted or
threatened by a governmental or regulatory body to restrain, modify or prevent
the carrying out of the transactions contemplated hereby or to seek damages or a
discovery order in connection with such transactions, or which has or may have,
in the opinion of SFII, a materially adverse effect on the assets, properties,
business, operations or condition (financial or otherwise) of Acquisition Corp..
(f) Absence of Adverse Changes. Since the date of this Agreement, there
shall have been no change in the financial condition, business, or properties of
Acquisition Corp. which materially and adversely affects the conduct of its
business or its condition, financial or otherwise.
(g) No Restraining Order. There shall not have been any action or
proceeding instituted or threatened before any court or governmental agency to
restrain or prohibit, or obtain substantial damages in respect of, this
Agreement or the consummation of the transactions contemplated hereby, which in
the opinion of SFII make it inadvisable to consummate such transaction.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF ACQUISITION CORP.
The obligations of Acquisition Corp. to consummate this Agreement and
the transactions contemplated hereby are subject to the satisfaction at or
before the Effective Date of each and every one of the following conditions, any
of which Acquisition Corp. may in its sole discretion waive:
(a) Representations and Warranties. The representations and warranties
of SFII set forth in Section 3 hereof shall be true and correct at and as of the
Effective Date with the same effect as though such representations and
warranties had been made on and as of the date of this Agreement, and any
letter, statement, list, certificate or other written information furnished by
SFII pursuant hereto or in connection on with the transactions contemplated
hereby shall be true and correct in all material respects at and as of the date
or dates stated therein.
(b) Performance of SFII. SFII shall have performed and complied with
all agreements and conditions required by this Agreement to be performed or
complied with by it either prior to or at the Effective Date.
(c) Governmental Permits and Approvals. Any and all permits and
approvals from any governmental or regulatory body required for the lawful
consummation of the transaction contemplated shall have been obtained.
(d) Third Party Consents. All consents, permits and approvals from
parties to any contracts or other agreements which may be required in connection
with the performance by the Parties hereto of their obligations under such
contacts or other agreements shall have been obtained.
(e) Litigation. No action, Suit or proceeding shall have been
instituted before any court or governmental or regulatory body or instituted or
threatened by a governmental or regulatory body to restrain, modify or prevent
the carrying out of the transactions contemplated hereby or to seek damages or a
discovery order in connection with such transactions, or which has or may have,
in the opinion of Acquisition Corp., a materially adverse effect on the assets,
properties, business, operations or condition (financial or otherwise) of SFII.
(f) Absence of Adverse Changes. Since the date of this Agreement, there
shall have been no change in the financial condition, business, or properties of
Acquisition Corp. which materially and adversely affects the conduct of its
business or its condition, financial or otherwise.
(g) No Restraining Order. There shall not have been any action or
proceeding instituted or threatened before any court or governmental agency to
restrain or prohibit, or obtain substantial damages in respect of, this
Agreement or the consummation of the transactions contemplated hereby, which in
the opinion of Acquisition Corp. make it inadvisable to consummate such
transaction.
(h) Securities Certificates. At the Effective Date, each owner and
Debenture Holder of Acquisition Corp. shall receive a certificate or
certificates representing the number of shares of common stock and/or Debentures
of SFII to which they are entitled.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All representations, warranties, agreements, covenants, and obligations
herein made by or in any of the documents incorporated by reference and made a
part of this Agreement shall be deemed to have been relied upon by each of the
other parties, shall survive the Effective Date for a period of two years
thereafter, and shall not merge in the performance of any obligation by any
party hereto.
ARTICLE IX
TERMINATION
(a) Events of Termination. This Agreement may be terminated at any time
prior to the filing of the Certificate of Ownership in the office of the
Secretary of the State of Delaware by:
(i) Mutual consent of Acquisition Corp. and SFII;
(ii) SFII if, at the Effective Date, any of the conditions set
forth in Section 6 shall not have been satisfied;
(iii) Acquisition Corp. if, at the Effective Date, any of the
conditions set forth in Section 7 shall not have been satisfied;
(iv) SFII, if Acquisition Corp. has breached any material
representation warranty, covenant or agreement contained in this
Agreement;
(v) Acquisition Corp., if SFII has breached any material
representation, warranty, covenant or agreement contained in this
Agreement;
(vi) SFII, if any legal proceeding is commenced or threatened
by any governmental or regulatory agency or other person directed
against the consummation of the transaction or any other transaction
under this Agreement; and
(vi) Acquisition Corp., if any legal proceeding is commenced
or threatened by any governmental or regulatory agency or other person
directed against the consummation of the transaction or any other
transaction under this Agreement;
(b) Effect of Termination. If this Agreement shall be terminated as
provided in Section 9 (a), the Articles of Incorporation shall be deemed to have
been abandoned and shall be void and of no further effect, without any liability
on the part of any of the parties thereto or the stockholders, directors,
officers, employees or agents of any of them.
ARTICLE X
INDEMNIFICATION
(a) Obligation of Acquisition Corp. to Indemnify. Subject to the
limitations on the survival of representations and warranties contained in
Article VIII, Acquisition Corp., its respective officers, directors and
employees hereby agree to indemnify, defend and hold SFII harmless from and
against any losses, liabilities, damages, deficiencies, costs or expenses
(including interest, penalties and reasonable attorney's fees and disbursements)
based upon, arising out of or otherwise due to any material inaccuracy in or any
breach of any representation, warranty, covenant or agreement of Acquisition
Corp. contained in this Agreement or in any document or other writing delivered
pursuant to this Agreement.
(b) Obligation of SFII to Indemnify. Subject to the limitations on the
survival of representations and warranties contained in Article VIII, SFII, its
respective officers, directors and employees, hereby agree to indemnify, defend
and hold Acquisition Corp. harmless from and against any losses, liabilities,
damages, deficiencies, costs or expenses (including interest, penalties and
reasonable attorneys fees and disbursements) based upon, arising out of or
otherwise due to any material inaccuracy in or any breach of any representation,
warranty, covenant or agreement of SFII contained in this Agreement or in any
document or other writing delivered pursuant to this Agreement.
ARTICLE XI
MISCELLANEOUS
(a) Notice. Any notice, request, instruction or other document required
by the terms of this Agreement to be given to any other Party hereto shall be in
writing and shall be given either:
(i) by facsimile transmission to the facsimile number given
below, provided that confirmation of successful receipt thereof by the
receiving Party is recorded on the sending Party's transmission
confirmation receipt simultaneously with the completion of
transmission, in which case notice shall be presumptively deemed to
have been given at the date and time displayed on the sending Party's
transmission confirmation receipt showing the successful receipt
thereof by the receiving Party;
(ii) by a nationally recognized overnight courier service in
which the date of delivery is recorded by the courier service, in which
case notice shall be presumptively deemed to have been given at the
time that records of the courier service indicate the writing was
delivered to the receiving Party;
(iii) by prepaid telegram, in which case notice shall be
presumptively deemed to have been given at the time that the records of
the telegraphic agency indicate that the telegram was telephoned or
delivered to the receiving Party, as the case may be; or
(iv) by the Express Mail service maintained by the United
States Postal Service, sent by registered or certified mail, postage
prepaid, with return receipt requested, in which case notice shall be
presumptively deemed to have been given forty-eight (48) hours after
the letter was deposited with the United States Postal Service.
Notice shall be sent
(i) If to Acquisition Corp., to:
Xxxxxx X. Xxxxxxxxx, President
Safetek International, Inc.
0000 00xx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Telephone Number: (718) 436 - 8246
Facsimile Telephone Number (718) 436 - 8256
with a copy (which shall not constitute notice) to:
Xxx X. Xxxxxxx, Xx., Esq.
000 Xxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxx 00000
Office Telephone Number: (000) 000-0000
Facsimile Telephone Number: (000) 000-0000
(ii) If to SFII, to:
Xxxxxx X. Xxxxxxxxx, President
Safetek International, Inc.
0000 00xx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Telephone Number: (718) 436 - 8246
Facsimile Telephone Number (718) 436 - 8256
with a copy (which shall not constitute notice) to:
Xxx X. Xxxxxxx, Xx., Esq.
000 Xxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxx 00000
Telephone Number: (000) 000-0000
Facsimile Telephone Number: (000) 000-0000
(iii) or to such other address as a Party may have specified
in writing to the other Parties using the procedures specified above in
this Section
(b) Fees and Expenses. Each of the Parties will bear its own costs and
expenses in connection with the negotiation and the consummation of this
Agreement.
(c) Amendment. This Agreement may be amended by mutual agreement of the
Parties at any time prior to the Effective Date. All amendments must be in
writing equal in dignity to this Agreement.
(d) Further Assurances. The Parties shall execute such documents and
other papers and take such further actions as may be reasonably required or
desirable to carry out the provisions hereof and the transactions contemplated
hereby. Each such Party shall use it best efforts to fulfill or obtain the
fulfillment of the conditions.
(e) Law Governing. This Agreement shall be deemed to have been entered
into under the Laws of the State of New York and the rights and obligations of
the parties hereunder shall be governed and determined according to the Laws of
New York without regard to applicable conflicts of laws.
(f) Resolution of Disputes; Arbitration. All disputes concerning this
Agreement or any claim or issue of any nature (whether brought by the Parties
hereto or by any other person whatsoever) arising from or relating to this
Agreement or to the corporate steps taken to enter into it (including, without
limitation, claims for alleged fraud, breach of fiduciary duty, breach of
contract, tort, etc.) which cannot be resolved within reasonable time through
discussions between the opposing entities, shall be resolved solely and
exclusively by means of arbitration to be conducted in the Borough of Brooklyn,
New York, which arbitration will proceed in accordance with the rules of the
American Arbitration Association (or any successor organization thereto) then in
force for resolution of commercial disputes.
The Arbitrators themselves shall have the right to determine and to
arbitrate the threshold issue of arbitrability itself, the decision of the
Arbitrators shall be final, conclusive, and binding upon the opposing entities,
and a judgment upon the award may be obtained and entered in any federal or
state court of competent jurisdiction.
Each entity or Party involved in litigation or arbitration shall be
responsible for its own costs and expenses of any litigation or arbitration
proceeding, including its own attorney's fees (for any litigation, arbitration,
and any appeals).
(g) Entire Agreement and Counterparts. This Agreement and the documents
incorporated by reference and made a part of it and any other instruments and
agreements to be delivered in conjunction herewith constitute the entire
agreement between the parties with respect to the transactions contemplated
herein and supersede all prior agreements and understandings, whether written or
oral, of the Parties with respect thereto. This Agreement may be executed in one
or more counterparts, all of which taken together shall constitute one
instrument.
(h) Construction. This Agreement shall be construed within the fair
meaning of each of its terms and not against the party drafting the document.
IN WITNESS WHEREOF, this Agreement has been executed by the Parties
hereto under their respective seals, as of the day and year first above written.
SFII:
WITNESSESS: SAFETEK INTERNATIONAL, INC.
_______________________ By:_____________________________________
Xxxxxx X. Xxxxxxxxx, President
_______________________ Attest:_________________________________
Xxxxxxx Xxxxxxxx, Secretary
ACQUISITON CORP.:
WITNESSESS: SAFETEK ACQUISITION CORP.
_______________________ By:_____________________________________
Xxxxxx X. Xxxxxxxxx, President
_______________________ Attest:_________________________________
Xxxxxxx Xxxxxxxx, Secretary
