EXECUTION COPY
SHARE EXCHANGE AND REORGANIZATION AGREEMENT, dated as of September 8,
2003 (the "Agreement"), between PRINT DATA CORP., a Delaware corporation ("Print
Data"); and ATLANTIC COMPONENTS LIMITED, a Hong Kong corporation ("Atlantic"),
and XX. XXXXX-XXX XXXX, the sole beneficial stockholder of Atlantic (the
"Atlantic Shareholder") and REITLER XXXXX LLC, a New York limited liability
company, solely with respect to Section 3.04 in its capacity as escrow agent as
provided therein.
INTRODUCTION
Print Data desires to acquire all of the issued and outstanding shares
of Atlantic capital stock solely in exchange for an aggregate of 22,380,000
shares of authorized, but theretofore unissued shares of common stock, par value
$0.001 per share (the "Print Data Common Stock"), of Print Data, pursuant to the
applicable laws of the State of Delaware and Hong Kong. The Atlantic Shareholder
desires to exchange all of his beneficially owned shares of Atlantic capital
stock solely for shares of Print Data Common Stock in the amount set forth
herein.
Prior to the date hereof, the respective boards of directors or
analogous governing body of each of Print Data and Atlantic have, and the
Atlantic Shareholder has, approved and adopted this Agreement and it is the
intent of the parties hereto that the transactions contemplated hereby be
structured so as to qualify as a tax-free exchange under Subchapter C of the
Internal Revenue Code of 1986, as amended (the "IRC"), and the provisions of
this Agreement will be interpreted in a manner consistent with this intent.
NOW, THEREFORE, in consideration of the premises and mutual
representations, warranties and covenants herein contained, the parties hereby
agree as follows:
ARTICLE I
ACQUISITION AND EXCHANGE OF SHARES
SECTION 1.01 THE AGREEMENT. The parties hereto hereby agree that Print Data
shall acquire all of the issued and outstanding shares of capital stock of
Atlantic and/or other securities representing all of the equity ownership
interests in Atlantic (the "Atlantic Capital Stock") solely in exchange for an
aggregate of 22,380,000 shares of authorized, but theretofore unissued shares of
Print Data Common Stock. The parties hereto agree that at the closing of the
transactions contemplated by this Agreement (the "Closing"): (i) Atlantic will
become a wholly-owned subsidiary of Print Data subject to the conditions and
provisions of Section 1.03 hereof; (ii) the management and business operations
of Print Data will be reorganized into a newly formed wholly owned subsidiary of
Print Data ("Historic Print Data Subsidiary") and (iii) Print Data will file a
fictitious name application with the relevant state authorities to do business
as "ACL Semiconductors Inc.".
SECTION 1.02 EXCHANGE OF SHARES.
(a) At the Closing, Print Data will cause to be issued and held for
delivery to the Atlantic Shareholder or his designees, stock certificates
representing an aggregate of 22,380,000 shares of Print Data Common Stock, in
exchange for all of the issued and outstanding shares of Atlantic Capital Stock,
which shares will be delivered to Print Data at the Closing.
(b) The shares of Print Data Common Stock to be issued pursuant to
paragraph (a) of this Section 1.02 will be authorized, but theretofore unissued
shares of Print Data Common Stock, and will be issued to the Atlantic
Shareholder.
(c) All shares of Print Data Common Stock to be issued hereunder shall
be deemed "restricted securities" as defined in paragraph (a) of Rule 144 under
the Securities Act of 1933, as amended (the "Securities Act"), and the Atlantic
Shareholder will represent in writing that he is acquiring said shares for
investment purposes only and without the intent to make a further distribution
of the shares. All shares of Print Data Common Stock to be issued under the
terms of this Agreement shall be issued pursuant to an exemption from the
registration requirements of the Securities Act, under Section 4(2) of the
Securities Act and the rules and regulations promulgated thereunder.
Certificates representing the shares of Print Data Common Stock to be issued
hereunder will bear a restrictive legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE OFFERED FOR SALE, SOLD, OR OTHERWISE DISPOSED OF,
EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SUCH
ACT OR PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION
PROVISIONS, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO
THE SATISFACTION OF THE COMPANY.
SECTION 1.03 CLOSING. The Closing will take place at a date and time
(the "Closing Date") and place to be mutually agreed upon by the parties hereto,
and will be subject to the provisions of Article IV of this Agreement. At the
Closing:
(a) Atlantic will deliver to Print Data stock certificates representing
all of the issued and outstanding shares of Atlantic Capital Stock, duly
endorsed, so as to make Print Data the holder thereof, free and clear of all
claims and encumbrances;
(b) Print Data will deliver to the Atlantic Shareholder, stock
certificates representing an aggregate of 22,380,000 shares of Print Data Common
Stock, which certificates will bear a standard restrictive legend in the form
customarily used with restricted securities and as set forth in Section 1.02(c)
above and which shares shall represent approximately 80.4% of the outstanding
Print Data Common Stock giving effect to the issuance thereof and the issuance
of the 2,620,000 shares of Print Data Common Stock issued pursuant to Section
3.01(q);
(c) Print Data will deliver an Officer's Certificate as described in
Sections 4.02(a) and 4.02(b) hereof, dated the Closing Date, that all
representations, warranties, covenants, and conditions set forth herein by Print
Data are true and correct as of, or have been fully performed and complied with
by, the Closing Date; and
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(d) Atlantic will deliver an Officer's Certificate as described in
Sections 4.01(a) and 4.01(b) hereof, dated the Closing Date, that all
representations, warranties, covenants and conditions set forth herein by
Atlantic are true and correct as of, or have been fully performed and complied
with by, the Closing Date;
SECTION 1.04 RATIFICATION BY BOARD OF DIRECTORS. In anticipation of
this Agreement, Print Data has taken all necessary and requisite
corporate and other action, including without limitation, actions of
the Board of Directors in order to: ratify this Agreement and all
transactions contemplated hereby.
SECTION 1.05 CONSUMMATION OF TRANSACTION. If at the Closing, no
condition exists which would permit any of the parties to terminate this
Agreement, or a condition then exists and the party entitled to terminate
because of that condition elects not to do so, then the transactions herein
contemplated shall be consummated upon such date, and then and thereupon, Print
Data will file any additional necessary documents that may be required by the
State of Delaware, the United States of America, or otherwise.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.01 REPRESENTATIONS AND WARRANTIES OF PRINT DATA. Print Data
hereby represents and warrants to, and agrees with, Atlantic and the Atlantic
Shareholder:
(a) Organization and Qualification. Other than as set forth in Section
A of the disclosure letter, of even date herewith, from Print Data to Atlantic
and the Atlantic Shareholder (the "Print Data Disclosure Letter"), Print Data
has no subsidiaries or affiliated corporation or owns any interest in any other
enterprise (whether or not such enterprise is a corporation). Print Data is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware, with all requisite power and authority, and all
necessary consents, authorizations, approvals, orders, licenses, certificates,
and permits of and from, and declarations and filings with, all federal, state,
local, and other governmental authorities and all courts and other tribunals, to
own, lease, license, and use its properties and assets and to carry on the
businesses in which it is now engaged and the businesses in which it
contemplates engaging. Other than as set forth in Section A of the Print Data
Disclosure Letter, Print Data is duly qualified to transact the businesses in
which it is engaged and is in good standing as a foreign corporation in every
jurisdiction in which its ownership, leasing, licensing, or use of property or
assets or the conduct of its businesses makes such qualification necessary.
(b) Capitalization. The authorized capital stock of Print Data consists
of (i) 50,000,000 shares of Print Data Common Stock, of which 2,829,936 shares
are outstanding; and (ii) 20,000,000 shares of "blank check" preferred stock,
par value $0.001, 600,000 of which are designated as series A preferred stock,
510,400 of which are issued and outstanding. Each of such outstanding shares of
Print Data Common Stock and preferred stock is validly authorized, validly
issued, fully paid, and nonassessable, has not been issued and is not owned or
held in violation of any preemptive or similar right of stockholders. The
preferred stock is held by the
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owners set forth in Section A of the Print Data Disclosure Letter, in each case
free and clear of all liens, security interests, pledges, charges, encumbrances,
stockholders' agreements, and voting trusts. Except as described in Section A to
the Print Data Disclosure Letter, there is no commitment, plan, or arrangement
to issue, and no outstanding option, warrant, or other right calling for the
issuance of, any share of capital stock of Print Data or any security or other
instrument convertible into, exercisable for, or exchangeable for capital stock
of Print Data. Except as described in Section A of the Print Data Disclosure
Letter, there is outstanding no security or other instrument convertible into or
exchangeable for capital stock of Print Data.
(c) Financial Condition. Print Data has filed with the United States
Securities and Exchange Commission (the "SEC") true and correct copies of the
following: audited balance sheets of Print Data as of December 31, 2000, 2001,
and 2002; unaudited balance sheets of Print Data as of June 30, 2002 and 2003;
audited statements of income, statements of stockholders' equity, and statements
of cash flows of Print Data for the years ended December 31, 2000, 2001, and
2002; and the unaudited statements of income, statements of stockholders'
equity, and statements of cash flows of Print Data for the six months ended June
30, 2002 and 2003. Each such balance sheet presents fairly the financial
condition, assets, liabilities, and stockholders' equity of Print Data as of its
respective date; each such statement of income and statement of stockholders'
equity presents fairly the results of operations of Print Data for the period
indicated; and each such statement of cash flows presents fairly the information
purported to be shown therein. The financial statements referred to in this
Section 2.01(c) have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved and
are in accordance with the books and records of Print Data. Since June 30, 2003:
(i) There has at no time been a material adverse
change in the financial condition, results of operations,
businesses, properties, assets, liabilities, or future
prospects of Print Data.
(ii) Print Data has not authorized, declared, paid,
or effected any dividend or liquidating or other distribution
in respect of its capital stock or any direct or indirect
redemption, purchase, or other acquisition of any stock of
Print Data.
(iii) The operations and businesses of Print Data
have been conducted in all respects only in the ordinary
course, except as discussed in filings made by Print Data with
the SEC.
There is no fact known to Print Data which materially adversely affects or in
the future (as far as Print Data can reasonably foresee) may materially
adversely affect the financial condition, results of operations, businesses,
properties, assets, liabilities, or future prospects of Print Data; provided,
however, that Print Data expresses no opinion as to political or economic
matters of general applicability. Print Data has made known, or caused to be
made known, to the accountants or auditors who have prepared, reviewed, or
audited the aforementioned consolidated financial statements all material facts
and circumstances which could affect the preparation, presentation, accuracy, or
completeness thereof.
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(d) Tax and Other Liabilities. Print Data does not have any material
liability of any nature, accrued or contingent, including, without limitation,
liabilities for federal, state, local, or foreign taxes and penalties, interest,
and additions to tax ("Taxes"), and liabilities to customers or suppliers, other
than the following:
(i) Liabilities for which full provision has been
made on the consolidated balance sheet and the notes thereto
(the "Last Print Data Balance Sheet") as of June 30, 2003 (the
"Last Print Data Balance Sheet Date") referred to in Section
2.01(c); and
(ii) Other liabilities arising since the Last Print
Data Balance Sheet Date and prior to Closing in the ordinary
course of business (which shall not include liabilities to
customers on account of defective products or services) which
are not inconsistent with the representations and warranties
of Print Data or any other provision of this Agreement.
Without limiting the generality of the foregoing, the amounts set up as
provisions for Taxes on the Last Print Data Balance Sheet are sufficient for all
accrued and unpaid Taxes of Print Data, whether or not due and payable and
whether or not disputed, under tax laws, as in effect on the Last Print Data
Balance Sheet Date or now in effect, for the period ended on such date and for
all fiscal periods prior thereto. The execution, delivery, and performance of
this Agreement by Print Data will not cause any Taxes to be payable other than
by the Atlantic Shareholder or cause any lien, charge, or encumbrance to secure
any Taxes to be created either immediately or upon the nonpayment of any Taxes
other than on the properties or assets of the Atlantic Shareholder. The Internal
Revenue Service has audited and settled or the statute of limitations has run
upon all federal income tax returns of Print Data for all taxable years up to
and including the taxable year ended December 31, 1997. Print Data has filed all
federal, state, local, and foreign tax returns required to be filed by it; has
delivered to the Atlantic Shareholder a true and correct copy of each such
returns which was filed in the past six years; has paid (or has established on
the Last Print Data Balance Sheet a reserve for) all Taxes, assessments, and
other governmental charges payable or remittable by it or levied upon it or its
properties, assets, income, or franchises which are due and payable; and has
delivered to the Atlantic Shareholder a true and correct copy of any report as
to adjustments received by it from any taxing authority during the past six
years and a statement as to any litigation, governmental or other proceeding
(formal or informal), or investigation pending, threatened, or in prospect with
respect to any such report or the subject matter of such report.
(e) Litigation and Claims. Except as described in Section G of the
Print Data Disclosure Letter, there is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or investigation pending
or, to the best of Print Data's knowledge, threatened, or in prospect (or any
basis therefor known to Print Data) with respect to Print Data or any of its
businesses, properties, or assets. Print Data is not affected by any present or
threatened strike or other labor disturbance nor to the knowledge of Print Data,
is any union attempting to represent any employee of Print Data as collective
bargaining agent. Print Data is not in violation of, or in default with respect
to, any law, rule, regulation, order, judgment, or
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decree which violation or default would have a material adverse effect on Print
Data; nor is Print Data required to take any action in order to avoid such
violation or default.
(f) Properties.
(i) Print Data owns no real property. Print Data has good
title to all personal properties and assets material to Print Data and used in
its businesses or owned by it (except real and other properties and assets
material to Print Data as are held pursuant to leases or licenses described in
Section B or C of the Print Data Disclosure Letter), free and clear of all
liens, mortgages, security interests, pledges, charges, and encumbrances (except
such as are listed in Section D of the Print Data Disclosure Letter).
(ii) Set forth in Section B of the Print Data Disclosure
Letter is a true and complete list of all tangible properties and assets owned
by Print Data or leased or licensed by Print Data from or to a third party
(including inventory but not including Intangibles (as hereinafter defined)),
and with respect to such properties and assets leased or licensed by Print Data
from or to a third party, a description of such lease or license. All such
properties and assets (including Intangibles) owned by Print Data are reflected
on the Last Print Data Balance Sheet (except for acquisitions subsequent to the
Last Print Data Balance Sheet Date and prior to the Closing Date, which are
either noted in Section B or C of the Print Data Disclosure Letter or are
approved in writing by Atlantic). All tangible properties and assets owned by
Print Data or leased or licensed by Print Data from or to a third party are in
good and usable condition (reasonable wear and tear which is not such as to
affect adversely the operation of the businesses of Print Data excepted).
(iii) To the best of Print Data's knowledge, no real property
leased or licensed by Print Data from or to a third party lies in an area which
is, or will be, subject to zoning, use, or building code restrictions which
would prohibit, and, to the best of Print Data's knowledge, no state of facts
relating to the actions or inaction of another person or entity or his or its
ownership, leasing, or licensing of any real or personal property exists or will
exist which would prevent, the continued effective ownership, leasing, or
licensing of such real property in the businesses in which Print Data is now
engaged or the businesses in which it contemplates engaging.
(iv) The properties and assets (including Intangibles) owned
by Print Data (other than those leased or licensed by Print Data to a third
party) or leased or licensed by Print Data from a third party constitute all
such properties and assets which are necessary to the businesses of Print Data
as presently conducted.
(v) Print Data has not caused or permitted its businesses
properties, or assets to be used to generate, manufacture, refine, transport,
treat, store, handle, dispose of, transfer, produce, or process any Hazardous
Substance (as such term is defined in this Section 2.01(f)(v)) except in
compliance with all applicable laws, rules, regulations, orders, judgments, and
decrees, and has not caused or permitted the Release (as such term is defined in
this Section 2.01(f)(v)) of any Hazardous Substance on or off the site of any
property of Print Data. The term "Hazardous Substance" shall mean any hazardous
waste, as defined by 42 U.S.C. ss.6903(5), any hazardous substance, as defined
by 42 U.S.C. ss.9601(14), any pollutant or contaminant, as defined by 42 U.S.C.
ss.9601(33), and all
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toxic substances, hazardous materials, or other chemical substances regulated by
any other law, rule, or regulation. The term "Release" shall have the meaning
set forth in 42 U.S.C. ss.9601(22).
(g) Contracts and Other Instruments. Section D of the Print Data
Disclosure Letter contains a true and correct statement of the information
required to be contained therein regarding material contracts, agreements,
instruments, leases, licenses, arrangements, or understandings with respect to
Print Data. Print Data has furnished to the Atlantic Shareholder (i) the
certificate of incorporation (or other charter document) and by-laws of Print
Data and all amendments thereto, as presently in effect, and (ii) the following:
(A) true and correct copies of all material contracts, agreements, and
instruments referred to in Section D of the Print Data Disclosure Letter; (B)
true and correct copies of all material leases and licenses referred to in
Section B or C of the Print Data Disclosure Letter hereto; and (C) true and
correct written descriptions of all material supply, distribution, agency,
financing, or other arrangements or understandings referred to in Section B or C
of the Print Data Disclosure Letter. To the best of Print Data's knowledge,
neither Print Data nor (to the knowledge of Print Data) any other party to any
such material contract, agreement, instrument, lease, or license is now or
expects in the future to be in violation or breach of, or in default with
respect to complying with, any term thereof, and each such material contract,
agreement, instrument, lease, or license is in full force and is (to the best of
Print Data's knowledge in the case of third parties) the legal, valid, and
binding obligation of the parties thereto and (subject to applicable bankruptcy,
insolvency, and other laws affecting the enforceability of creditors' rights
generally) is enforceable as to them in accordance with its respective terms.
Each such material supply, distribution, agency, financing, or other arrangement
or understanding is a valid and continuing arrangement or understanding; neither
Print Data nor any other party to any such arrangement or understanding has
given notice of termination or taken any action inconsistent with the
continuance of such arrangement or understanding; and the execution, delivery,
and performance of this Agreement will not prejudice any such arrangement or
understanding in any way. Print Data enjoys peaceful and undisturbed possession
under all material leases and licenses under which it is operating. Print Data
is not party to or bound by any contract, agreement, instrument, lease, license,
arrangement, or understanding, or subject to any charter or other restriction,
which has had or (to the knowledge of Print Data) may in the future have a
material adverse effect on the financial condition, results of operations,
businesses, properties, assets, liabilities, or future prospects of Print Data.
Print Data has not engaged within the last five years in, is not engaging in,
and does not intend to engage in any transaction with, and has not had within
the last five years, does not now have, and does not intend to have any material
contract, agreement, instrument, lease, license, arrangement, or understanding
with, any stockholder of Print Data, any director, officer, or employee of Print
Data (except for employment agreements listed in Section D of the Print Data
Disclosure Letter and employment and compensation arrangements described in
Section E of the Print Data Disclosure Letter), any relative or affiliate of any
stockholder of Print Data or of any such director, officer, or employee, or any
other corporation or enterprise in which any stockholder of Print Data, any such
director, officer, or employee, or any such relative or affiliate then had or
now has a 5% or greater equity or voting or other substantial interest, other
than those listed and so specified in Section D of the Print Data Disclosure
Letter. The stock ledgers and stock transfer books relating to all issuances and
transfers of stock by Print Data and the minute book records of Print Data and
all proceedings of the stockholders and the Board of Directors and
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committees thereof of Print Data since their respective incorporations made
available to counsel to Atlantic and the Atlantic Shareholder are the original
stock ledgers and stock transfer books and minute book records of Print Data or
exact copies thereof. Print Data is not in violation or breach of, or in default
with respect to, any term of its certificate of incorporation (or other charter
document) or by-laws.
(h) Employees.
(i) Print Data does not have, or contribute to, any pension,
profit-sharing, option, other incentive plan, or any other type of Employee
Benefit Plan (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), or has any obligation to or
customary arrangement with employees for bonuses, incentive compensation,
vacations, severance pay, sick pay, sick leave, insurance, service award,
relocation, disability, tuition refund, or other benefits, whether oral or
written, except as set forth in Section E of the Print Data Disclosure Letter.
Print Data has furnished to Atlantic and the Atlantic Shareholder: (A) true and
correct copies of all documents evidencing plans, obligations, or arrangements
referred to in Section E of the Print Data Disclosure Letter (or true and
correct written summaries, so initialed, of such plans, obligations, or
arrangements to the extent not evidenced by documents) and true and correct
copies, so initialed, of all documents evidencing trusts, summary plan
descriptions, and any other summaries or descriptions relating to any such
plans; (B) the two most recent annual reports (Form 5500's), if any, including
all schedules thereto and the most recent annual and periodic accounting of
related plan assets with respect to each Employee Benefit Plan; (C) the two most
recent actuarial valuations with respect to each Pension Plan (as defined in
Section 3(2) of ERISA) subject to Title IV of ERISA; and (D) the most recent
determination letter issued by the Internal Revenue Service with respect to each
Pension Plan.
(ii) If any Employee Benefit Plan of Print Data were to be
terminated on the day prior to Closing Date, (A) no liability under Title IV of
ERISA would be incurred by Print Data or Atlantic and (B) all Accrued Benefits
(as defined in this Section 2.01(h)(ii)) to such day prior to the Closing Date
(whether or not vested) would be fully funded in accordance with the assumptions
contained in the regulations of the Pension Benefit Guaranty Corporation
governing the funding of terminated defined benefit plans. For purposes hereof,
"Accrued Benefits" shall include the value of disability, pre-retirement, death
benefits, and all supplements, subsidized, ancillary, and optional forms of
benefits. All Accrued Liabilities (for contributions or otherwise) (as defined
in this Section 2.01(h)(ii)) of Print Data as of the Closing Date to each
Employee Benefit Plan and with respect to each obligation to, or customary
arrangement with, employees for bonuses, incentive compensation, vacations,
severance pay, sick pay, sick leave, insurance, service award, relocation,
disability, tuition refund, or other benefits, whether oral or written, have
been paid or accrued for all periods ending prior to the Closing Date and no
payment to any Employee Benefit Plan or with respect to any such obligation or
arrangement since the Last Print Data Balance Sheet Date has been
disproportionately large compared to prior payments. For purposes hereof,
"Accrued Liabilities" shall include a pro rata contribution to each Employee
Benefit Plan or with respect to each such obligation or arrangement for that
portion of a plan year or other applicable period which commences prior to, and
ends after, the Closing Date, and Accrued Liabilities for any portion of a plan
year or other applicable period shall be determined
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by multiplying the liability for the entire such year or period by a fraction,
the numerator of which is the number of days preceding the Closing Date in such
year or period and the denominator of which is the number of days in such year
or period, as the case may be.
(iii) There has been no violation of the reporting and
disclosure requirements imposed either under ERISA or the Code for which a
penalty has been or may be imposed with respect to any Employee Benefit Plan of
Print Data. There has been no breach of fiduciary duty or responsibility with
respect to any Employee Benefit Plan of Print Data. No Employee Benefit Plan of
Print Data or related trust has any liability of any nature, accrued or
contingent, including without limitation liabilities for Taxes, other than for
routine payments to be made in due course to participants and beneficiaries,
except as set forth in Section E of the Print Data Disclosure Letter. Print Data
does not have any formal plan or commitment, whether or not legally binding, to
create any additional or modify any existing Employee Benefit Plan or benefit
obligation or arrangement described in Section 2.01(h)(i)). Each Employee
Benefit Plan of Print Data which is a group health plan within the meaning of
Section 5000(b)(1) of the Code is and has been maintained in full compliance
with the applicable requirements of Section 4980B of the Code. Other than the
health care continuation requirements of Section 4980B of the Code, Print Data
does not have any obligation to provide post-retirement medical benefits or life
insurance coverage or any deferred compensation benefits to any present or
former employees. There is no litigation, arbitration, claim, governmental or
other proceeding (formal or informal), or investigation pending, threatened, or
(to the best of Print Data's knowledge) in prospect (or any basis therefor known
to Print Data) with respect to any Employee Benefit Plan of Print Data or
related trust or with respect to any fiduciary, administrator, or sponsor (in
its capacity as such) of any Employee Benefit Plan. No Employee Benefit Plan of
Print Data or related trust and no such obligation or arrangement is in
violation of, or in default with respect to, any law, rule, regulation, order,
judgment, which violation or default would have a material adverse effect
thereon or decree nor is Print Data, any Employee Benefit Plan of Print Data, or
any related trust required to take any action in order to avoid any such
violation or default. No event has occurred, is (to the best of Print Data's
knowledge) threatened or about to occur which would constitute a prohibited
transaction under Section 406 of ERISA.
(iv) Each Pension Plan maintained for the employees of Print
Data has been qualified, from its inception, under Section 401(a) of the Code
and any related trust has been an exempt trust for such period under Section 501
of the Code. Each Pension Plan has been operated in accordance with its terms.
No Pension Plan which is subject to Title IV of ERISA has an accumulated or
waived funding deficiency within the meaning of Section 412 of the Code. No
investigation or review by the Internal Revenue Service is currently pending or
(to the knowledge of Print Data) is contemplated in which the Internal Revenue
Service has asserted or may assert that any Pension Plan is not qualified under
Section 401(a) of the Code or that any related trust is not exempt under Section
501 of the Code. Neither Print Data, nor any organization to which Print Data is
a successor or parent corporation, within the meaning of Section 4069(b) of
ERISA, has divested itself of any entity maintaining or with an obligation to
contribute to any Pension Plan which had an "amount of unfunded benefit
liabilities," as defined in Section 4001(a)(18) of ERISA, at the time of such
divestiture. No assessment of any federal taxes with respect to any Employee
Benefit Plan of Print Data has been made or (to the knowledge of Print Data) is
contemplated against Print Data, or any related trust of any Pension Plan of
Print Data, and nothing has occurred which would result in the assessment of
unrelated business taxable income under the Code with respect to any Employee
Benefit Plan of Print Data. Form 5500's have been timely filed with respect to
all Pension
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Plans of Print Data. No event has occurred or (to the knowledge of Print Data)
is threatened or about to occur which would constitute a reportable event within
the meaning of Section 4043(b) of ERISA. No notice of termination has been filed
by the plan administrator pursuant to Section 4041 of ERISA or issued by the
Pension Benefit Guaranty Corporation pursuant to Section 4042 of ERISA with
respect to any Pension Plan of Print Data.
(v) Print Data does not currently contribute to and since
September 16, 1980 has not effectuated either a complete or partial withdrawal
from any multiemployer Pension Plan within the meaning of Section 3(37) of
ERISA.
(vi) Section E of the Print Data Disclosure Letter contains a
true and correct statement of the names, relationship with Print Data, present
rates of compensation (whether in the form of salary, bonuses, commissions, or
other supplemental compensation now or hereafter payable), and aggregate
compensation for the fiscal year ended December 31, 2002 of (A) each director,
officer, or other employee of Print Data whose aggregate compensation for the
fiscal year ended December 31, 2002 exceeded US$25,000 or whose aggregate
compensation presently exceeds the rate of US$25,000 per annum and (B) all sales
agents, dealers, or distributors of Print Data. Since December 31, 2002, Print
Data has not changed the rate of compensation of any of its directors, officers,
employees, agents, dealers, or distributors, nor has any Employee Benefit Plan
or program of Print Data been instituted or amended to increase benefits
thereunder. There is no contract, agreement, plan, arrangement, or understanding
covering any person that, individually or collectively, could give rise to the
payment of any amount that would not be deductible by Print Data by reason of
Section 280G of the Code.
(i) Patents, Trademarks, Et Cetera. Print Data does not own or have
pending, and is not licensed or otherwise permitted to use, any material patent,
patent application, trademark, trademark application, service xxxx, copyright,
copyright application, franchise, trade secret, computer program (in object or
source code or otherwise), or other intangible property or asset (collectively,
"Intangibles"), other than as described in Section C of the Print Data
Disclosure Letter. Each Intangible is validly issued and is currently in force
and uncontested in all jurisdictions in which it is used or in which such use is
contemplated. Section C of the Print Data Disclosure Letter contains a true and
correct listing of: (i) all Intangibles which are owned (either in whole or in
part), used by, or licensed to Print Data or which otherwise relate to the
businesses of Print Data, and a description of each such Intangible which
identifies its owner, registrant, or applicant; (ii) all contracts, agreements,
instruments, leases, and licenses and identification of all parties thereto
under which Print Data owns or uses any Intangible (whether or not under license
from third parties), together with the identification of the owner, registrant,
or applicant of each such Intangible; (iii) all contracts, agreements,
instruments, leases, and licenses and identification of all parties thereto
under which Print Data grants the right to use any Intangible; (iv) all
validity, infringement, right-to-use, or other opinions of counsel (whether
in-house or outside) which concern the validity, infringement, or enforceability
of any Intangible owned or controlled by a party other than Print Data which
relates to the businesses, properties, or assets of Print Data. Except as
specified in Section C of the Print Data Disclosure Letter, to
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the knowledge of Print Data: (v) Print Data is the sole and exclusive owner or
licensee of, and (other than those exclusively licensed by Print Data to a third
party) has the right to use, all Intangibles; (vi) no Intangible is subject to
any order, judgment, decree, contract, agreement, instrument, lease, or license
restricting the scope of the use thereof; (vii) during the last five years,
Print Data has not been charged with, and has not charged others with, unfair
competition, infringement of any Intangible, or wrongful use of confidential
information, trade secrets, or secret processes; and (viii) Print Data is not
using any patentable invention, confidential information, trade secret, or
secret process of others. There is no right under any Intangible necessary to
the businesses of Print Data as presently conducted or as it contemplates
conducting, except such as are so designated in Section C of the Print Data
Disclosure Letter. Except as described in Section C of the Print Data Disclosure
Letter, Print Data has not infringed, is not infringing, and has not received
notice of infringement in respect of the Intangibles or asserted Intangibles of
others, nor has Print Data been advised by counsel or others that it is
infringing or may infringe the Intangibles or asserted Intangibles of others if
any currently contemplated business activity is effectuated. To the knowledge of
Print Data, there is no infringement by others of Intangibles of Print Data. As
far as Print Data can reasonably foresee, there is no Intangible or asserted
Intangible of others that may materially adversely affect the financial
condition, results of operations, businesses, properties, assets, liabilities,
or future prospects of Print Data. All material contracts, agreements,
instruments, leases, and licenses pertaining to Intangibles to which Print Data
is a party, or to which any of its businesses, properties, or assets are
subject, are in compliance in all material respects with all laws, rules,
regulations, orders, judgments, and decrees binding on Print Data or to which
any of its businesses, properties, or assets are subject. Print Data did not
register any trademark, tradename or service xxxx, design, or name used by Print
Data to identify its products, businesses, or services. Neither any stockholder
of Print Data, any director, officer, or employee of Print Data, any relative or
affiliate of any stockholder of Print Data, any such director, officer, or
employee, nor any other corporation or enterprise in which any stockholder of
Print Data, any such director, officer, or employee, or any such relative or
affiliate had or now has a 5% or greater equity or voting or other substantial
interest, possesses any Intangible which relates to the businesses of Print
Data.
(j) Questionable Payments. Neither Print Data, nor any director,
officer, agent, employee, or other person associated with, or acting on behalf
of, Print Data, nor any stockholder of Print Data has, directly or indirectly:
used any corporate funds for unlawful contributions, gifts, entertainment, or
other unlawful expenses relating to political activity; made any unlawful
payment to foreign or domestic government officials or employees or to foreign
or domestic political parties or campaigns from corporate funds; violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended; or made any
bribe, rebate, payoff, influence payment, kickback, or other unlawful payment.
(k) Authority. Print Data has all requisite power and authority to
execute, deliver, and perform this Agreement. All necessary corporate
proceedings of Print Data have been duly taken to authorize the execution,
delivery, and performance of this Agreement thereby. This Agreement has been
duly authorized, executed, and delivered by Print Data, constitutes the legal,
valid, and binding obligation of Print Data, and is enforceable as to Print Data
in accordance with its terms. Except as otherwise set forth in this Agreement,
no consent, authorization, approval, order, license, certificate, or permit of
or from, or declaration or filing with, any federal, state,
-11-
local, or other governmental authority or any court or other tribunal is
required by Print Data for the execution, delivery, or performance of this
Agreement by Print Data. No consent of any party to any material contract,
agreement, instrument, lease, license, arrangement, or understanding to which
Print Data is a party, or to which it or any of its businesses, properties, or
assets are subject, is required for the execution, delivery, or performance of
this Agreement (except such consents referred to in Section D of the Print Data
Disclosure Letter); and the execution, delivery, and performance of this
Agreement will not (if the consents referred to in Section D of the Print Data
Disclosure Letter are obtained prior to the Closing) violate, result in a breach
of, conflict with, or (with or without the giving of notice or the passage of
time or both) entitle any party to terminate or call a default under, entitle
any party to receive rights or privileges that such party was not entitled to
receive before this Agreement was executed under, or create any obligation on
the part of Print Data to which it was not subject immediately before this
Agreement was executed under, any term of any such material contract, agreement,
instrument, lease, license, arrangement, or understanding, or violate or result
in a breach of any term of the certificate of incorporation (or other charter
document) or by-laws of Print Data, or (if the provisions of this Agreement are
satisfied) violate, result in a breach of, or conflict with any law, rule,
regulation, order, judgment, or decree binding on Print Data or to which any of
its businesses, properties, or assets are subject, which violation or breach
would have a material adverse effect on Print Data. Neither Print Data, nor any
of its officers, directors, employees, or agents has employed any broker or
finder or incurred any liability for any fee, commission, or other compensation
payable by any person on account of alleged employment as a broker or finder, or
alleged performance of services as a broker or finder, in connection with or as
a result of this Agreement or the transactions contemplated hereby and in
connection herewith.
(l) Status of Print Data Common Stock To Be Issued. Assuming without
investigation that the shares of Atlantic Capital Stock outstanding on the
Closing Date are validly authorized, validly issued, fully paid, and
nonassessable, the shares of Print Data Common Stock to be issued pursuant to
Section 1.02(a) hereof are validly authorized and, when the such shares of Print
Data Common Stock have been duly delivered pursuant to the terms of this
Agreement, such shares of Print Data Common Stock will be validly issued, fully
paid, and nonassessable and will not have been issued, owned or held in
violation of any preemptive or similar right of stockholder.
(m) Insurance. All policies of fire and other insurance against
casualty and other losses and public liability insurance carried by Print Data
are described in Section F of the Print Data Disclosure Letter (including the
risks covered and limits of such policies) and are in full force and effect. All
premiums in respect of such policies for which premium notices have been
received have been paid in full as the same become due and payable. Print Data
has not failed to give any notice or present any claim under any insurance
policy in due and timely fashion. There are no actual claims or claims
threatened in writing against Print Data which could come within the scope of
such coverage nor are any such policies currently threatened with cancellation.
There are no outstanding requirements or recommendations by any insurance
company that issued a policy with respect to any of the respective assets, the
businesses, or operations of Print Data or by any Board of Fire Underwriters or
other body exercising similar functions or by any governmental authority
requiring or recommending any repairs or other work to be done on, or with
respect to, any of the assets of Print Data or requiring or recommending any
equipment or
-12-
facilities to be installed on any premises from which the businesses of Print
Data is conducted or in connection with any of the respective assets thereof.
Print Data does not have any knowledge of any material proposed increase in
applicable insurance rates or of any conditions or circumstances applicable to
the businesses thereof that might result in such increases. No such policy is
terminable by virtue of the transactions contemplated by this Agreement.
(o) Trading Matters. At the date hereof and at the Closing Date:
(i) the Print Data Common Stock is traded and quoted in the
over-the-counter market;
(ii) Print Data has and shall have performed or satisfied all of its
undertakings to, and of its obligations and requirements with, the SEC;
(iii) Print Data has not, and shall not have taken any action that
would preclude, or otherwise jeopardize, the inclusion of the Print Data Common
Stock for quotation on the OTC Bulletin Board.
(p) Reorganization.
(i) Print Data has not taken and has not agreed to take any action
(other than actions contemplated by this Agreement) that could reasonably be
expected to prevent the transactions contemplated by this Agreement from
constituting a "reorganization" under section 368(b) of the Code or as an
acquisition of in excess of 80% of the stock of a corporation in exchange for
property under Section 351 of the Code. Print Data is not aware of any
agreement, plan or other circumstance that could reasonably be expected to
prevent the transactions contemplated by this Agreement from so qualifying.
(ii) Print Data has no plan or intention to reacquire, and, to Print
Data's knowledge, no person related to Print Data within the meaning of Treasury
Regulations Section 1.368-1 has a plan or intention to acquire, any of the Print
Data Common Stock pursuant to Section 1.02(a) hereof.
(q) Completeness of Disclosure. No representation or warranty by Print
Data in this Agreement contains or, and at the Closing Date will contain, an
untrue statement of material fact or omits or, at the Closing Date, will omit to
state a material fact required to be stated therein or necessary to make the
statements made not misleading.
(r) Periodic Reporting. The Print Data Common Stock has been registered
under Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and Print Data is subject to the periodic reporting requirements
of Section 13 of the Exchange Act. Print Data has heretofore provided to
Atlantic and the Atlantic Shareholder true, complete, and correct copies of all
forms, reports, schedules, statements, and other documents required to be filed
by it under the Exchange Act since at least December 30, 2002 as such documents
have been amended since the time of the filing thereof (the "Print Data SEC
Documents"). The Print Data SEC Documents, including, without limitation, any
financial statements and schedules included therein, at the time filed or, if
subsequently amended, as so amended, (i) did not contain any
-13-
untrue statement of a material fact required to be stated therein or necessary
in order to make the statements therein not misleading and (ii) complied in all
respects with the applicable requirements of the Exchange Act and the applicable
rules and regulations thereunder. The financial statements included in the Print
Data SEC Documents complied when filed as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect hereto, have been prepared in accordance with generally
accepted accounting principles, applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto or, in the case of
unaudited financial statements, as permitted by the rules and regulations of the
Commission) and fairly present, subject in the case of the unaudited financial
statements, to customary year end audit adjustments, the financial position of
Print Data as at the dates thereof and the results of its operations and cash
flows.
(s) Compliance with Law and Government Regulations. Print Data is in
compliance with and is not in violation of applicable federal, state, local or
foreign statutes, laws and regulations (including without limitation, any
applicable building, zoning or other law, ordinance or regulation) affecting its
properties or the operation of its business. Print Data is not subject to any
order, decree, judgment or other sanction of any court, administrative agency or
other tribunal.
(t) Legal Proceedings and History. Print Data hereby represents that,
unless otherwise disclosed herein or by a written attachment hereto, no officer,
director or affiliate of Print Data, has been, within the five years ending on
the Closing Date, a party to any bankruptcy petition against such person or
against any business of which such person was affiliated; convicted in a
criminal proceeding or subject to a pending criminal proceeding (excluding
traffic violations and other minor offenses); subject to any order, judgment or
decree, not subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting their involvement in any type of business,
securities or banking activities; or found by a court of competent jurisdiction
in a civil action, by the SEC or the Commodity Futures Trading Commission to
have violated a federal or state securities or commodities law, and the judgment
has not been reversed, suspended or vacated.
SECTION 2.02 REPRESENTATIONS AND WARRANTIES OF ATLANTIC. Atlantic
hereby represents and warrants to, and agrees with, Print Data:
(a) Organization and Qualification. Atlantic owns no subsidiary or
affiliate corporation or owns any interest in any other enterprise (whether or
not such enterprise is a corporation). Section A of the letter, dated even date
herewith, from Atlantic to Print Data (the "Atlantic Disclosure Letter"),
correctly sets forth as to Atlantic its place of incorporation, principal place
of business, jurisdictions in which it is qualified to do business, and the
businesses which it presently conducts and which it contemplates conducting.
Atlantic is a corporation duly organized, validly existing, and in good standing
under the laws of Hong Kong, with all requisite power and authority, and all
necessary consents, authorizations, approvals, orders, licenses, certificates,
and permits of and from, and declarations and filings with, all federal, state,
local, and other governmental authorities and all courts and other tribunals, to
own, lease, license, and use its properties and assets and to carry on the
businesses in which it is now engaged and the businesses in which it
contemplates engaging. Atlantic is duly qualified to transact the businesses in
which it is engaged and is in good standing as a foreign corporation in
-14-
every jurisdiction in which its ownership, leasing, licensing, or use
of property or assets or the conduct of its businesses makes such qualification
necessary.
(b) Capitalization. The authorized capital stock of Atlantic consists
of 3,000,000 shares of HK$1.00 each, all of which shares are outstanding. Each
of the outstanding shares of Atlantic Capital Stock is validly authorized,
validly issued, fully paid, and nonassessable, has not been issued and is not
owned or held in violation of any preemptive right of stockholders and by the
owner set forth in Section A of the Atlantic Disclosure Letter, in each case
free and clear of all liens, security interests, pledges, charges, encumbrances,
stockholders' agreements, and voting trusts. There is no commitment, plan, or
arrangement to issue, and no outstanding option, warrant, or other right calling
for the issuance of, any share of Atlantic Capital Stock or any security or
other instrument convertible into, exercisable for, or exchangeable for Atlantic
Capital Stock. There is outstanding no security or other instrument convertible
into or exercisable or exchangeable for Atlantic Capital Stock.
(c) Financial Condition. Atlantic has delivered to Print Data true and
correct copies of the following: audited balance sheets of Atlantic as of
December 31, 2002 and December 31, 2001; and audited statements of income,
statements of stockholders' equity, and statements of cash flows of Atlantic for
the years ended December 31, 2002 and December 31, 2001. Each such balance sheet
presents fairly the financial condition, assets, liabilities, and stockholders'
equity of Atlantic as of its date; each such statement of income and
consolidated statement of stockholders' equity presents fairly the results of
operations of Atlantic for the period indicated; and each such statement of cash
flows presents fairly the information purported to be shown therein. The
financial statements referred to in this Section 2.02(c) have been prepared in
accordance with generally accepted accounting principles in the United States
consistently applied throughout the periods involved and are in accordance with
the books and records of Atlantic. Since December 31, 2002:
(i) There has at no time been a material adverse change in the
financial condition, results of operations, business, properties,
assets, liabilities, or future prospects of Atlantic.
(ii) Atlantic has not authorized, declared, paid, or effected
any dividend or liquidating or other distribution in respect of its
capital stock or any direct or indirect redemption, purchase, or other
acquisition of any stock of Atlantic.
(iii) The operations and businesses of Atlantic have been
conducted in all respects only in the ordinary course, except for the
transactions contemplated hereby and in connection herewith.
(iv) There has been no accepted purchase order or quotation,
arrangement, or understanding for future sale of the products or
services of Atlantic that Atlantic expects will not be profitable.
(v) Atlantic has not suffered an extraordinary loss (whether
or not covered by insurance) or waived any right of substantial value.
-15-
There is no fact known to Atlantic which materially adversely affects or in the
future (as far as Atlantic can foresee) may materially adversely affect the
financial condition, results of operations, business, properties, assets,
liabilities, or future prospects of Atlantic; provided, however, that Atlantic
expresses no opinion as to political or economic matters of general
applicability. Atlantic has made known, or caused to be made known, to the
accountants or auditors who have prepared, reviewed, or audited the
aforementioned consolidated financial statements all material facts and
circumstances which could affect the preparation, presentation, accuracy or
completeness thereof.
(d) Tax and Other Liabilities. Atlantic does not have any material
liability of any nature, accrued or contingent, including, without limitation,
liabilities for Taxes, and liabilities to customers or suppliers, other than the
following:
(i) Liabilities for which full provision has been made on the
balance sheet and the notes thereto (the "Last Atlantic Balance Sheet")
as of December 31, 2002 (the "Last Atlantic Balance Sheet Date")
referred to in Section 2.02(c); and
(ii) Other liabilities arising since the Last Atlantic Balance
Sheet Date and prior to the Closing Date in the ordinary course of
business (which shall not include liabilities to customers on account
of defective products or services) or in connection with the
transactions contemplated hereby or in connection herewith which are
not inconsistent with the representations and warranties of Atlantic or
any other provision of this Agreement.
Without limiting the generality of the foregoing, the amounts set up as
provisions for Taxes on the Last Atlantic Balance Sheet are sufficient for all
accrued and unpaid Taxes of Atlantic, whether or not due and payable and whether
or not disputed, under tax laws, as in effect on the Last Atlantic Balance Sheet
Date or now in effect, for the period ended on such date and for all fiscal
periods prior thereto. The execution, delivery, and performance of this
Agreement by Atlantic will not cause any Taxes to be payable other than by the
stockholders of Atlantic or cause any lien, charge, or encumbrance to secure any
Taxes to be created either immediately or upon the nonpayment of any Taxes other
than on the properties or assets of the stockholders of Atlantic. The Inland
Revenue Department of Hong Kong has agreed to all income tax returns of Atlantic
for all years of assessment up to and including the year of assessment
2001/2002. Atlantic has filed all local tax returns required to be filed by it;
has delivered to Print Data a true and correct copy of each such return which
was filed in the past six years; has paid (or has established on the Last
Atlantic Balance Sheet a reserve for) all Taxes, assessments, and other
governmental charges payable or remittable by it or levied upon it or its
properties, assets, income, or franchises which are due and payable; and has
delivered to Print Data a true and correct copy, of any report as to adjustments
received by it from any taxing authority during the past six years and a
statement, as to any litigation, governmental or other proceeding (formal or
informal), or investigation pending, threatened, or in prospect with respect to
any such report or the subject matter of such report.
(e) Litigation and Claims. Except as set forth in Section I of the
Atlantic Disclosure Letter, there is no litigation, arbitration, claim,
governmental or other proceeding (formal or
-16-
informal), or investigation pending, threatened, or, to the best of Atlantic's
knowledge, in prospect (or any basis therefor known to Atlantic), with respect
to Atlantic or any of its businesses, properties, or assets. Atlantic is not
affected by any present or threatened strike or other labor disturbance nor to
the knowledge of Atlantic is any union attempting to represent any employee of
Atlantic as collective bargaining agent. Atlantic is not in violation of, or in
default with respect to, any law, rule, regulation, order, judgment, or decree
which violation or default would have a material adverse effect upon Atlantic;
nor is Atlantic required to take any action in order to avoid such violation or
default.
(f) Properties.
(i) Atlantic does not own any legal or equitable interest in
any real property. Atlantic has good title to all other properties and
assets material to Atlantic, used in its business or owned by it
(except real and other properties and assets as are held pursuant to
leases or licenses described in Section B or C of the Atlantic
Disclosure Letter), free and clear of all liens, mortgages, security
interests, pledges, charges, and encumbrances (except such as are
listed in Section D of the Atlantic Disclosure Letter).
(ii) All accounts and notes receivable reflected on the Last
Atlantic Balance Sheet, or arising since the Last Atlantic Balance
Sheet Date, have been collected, or are and will be good and
collectible, in each case at the aggregate recorded amounts thereof
without right of recourse, defense, deduction, return of goods,
counterclaim, offset, or set off on the part of the obligor, and, if
not collected, can reasonably be anticipated to be paid within 180 days
of the date incurred.
(iii) All inventory of electronic products of Atlantic is
usable, and all inventory of finished goods is good and marketable, on
a normal basis in the existing product lines of Atlantic. In no event
do such inventories represent more than a 12-month supply measured by
the volume of sales or use for the year ended December 31, 2002. All
inventory is merchantable and fit for the particular purpose for which
it is intended.
(iv) Attached as Section B of the Atlantic Disclosure Letter
is a true and complete list of the classes of all tangible properties
and assets owned by Atlantic or leased or licensed by Atlantic from or
to a third party (including inventory but not including Intangibles, as
defined in Section 2.02(i)), and with respect to such properties and
assets leased or licensed by Atlantic from or to a third party, a
description of such lease or license. All such properties and assets
(including Intangibles) owned by Atlantic are reflected on the Last
Atlantic Balance Sheet (except for acquisitions subsequent to the Last
Atlantic Balance Sheet Date and prior to the Closing Date which are
either noted in Section B or C of the Atlantic Disclosure Letter or are
approved in writing by Print Data). All real and other tangible
properties and assets owned by Atlantic or leased or licensed by
Atlantic from or to a third party are in good and usable condition
(reasonable wear and tear which is not such as to affect adversely the
operation of the business of Atlantic excepted).
-17-
(v) To the best of Atlantic's knowledge, no real property
owned by Atlantic or leased or licensed by Atlantic from or to a third
party lies in an area which is, or will be, subject to zoning, use, or
building code restrictions which would prohibit, and, to the best of
Atlantic's knowledge, no state of facts relating to the actions or
inaction of another person or entity or his or its ownership, leasing,
or licensing of any real or personal property exists or will exist
which would prevent, the continued effective ownership, leasing, or
licensing of such real property in the businesses in which Atlantic is
now engaged or the businesses in which it contemplates engaging.
(vi) The properties and assets (including Intangibles) owned
by Atlantic (other than those leased or licensed by Atlantic to a third
party) or leased or licensed by Atlantic from a third party constitute
all such properties and assets which are necessary to the business of
Atlantic as presently conducted or as it contemplates conducting.
(vii) Atlantic has not caused or permitted its businesses
properties, or assets to be used to generate, manufacture, refine,
transport, treat, store, handle, dispose of, transfer, produce, or
process any Hazardous Substance (as such term is defined in Section
2.01(f)(v)) except in compliance with all applicable laws, rules,
regulations, orders, judgments, and decrees, and has not caused or
permitted the Release (as such term is defined in Section 2.01(f)(v))
of any Hazardous Substance on or off the site of any property of
Atlantic.
(g) Contracts and Other Instruments. Section D of the Atlantic
Disclosure Letter contains a true and correct statement of the information
required to be contained therein regarding material contracts, agreements,
instruments, leases, licenses, arrangements, or understandings with respect to
Atlantic. Atlantic has furnished to Print Data: (i) the certificate of
incorporation and by-laws of Atlantic (or, in each case, the comparable charter
documents, if any, under applicable law) and all amendments thereto, as
presently in effect, certified by the Secretary or an authorized signatory of
Atlantic and (ii) the following: (A) true and correct copies of all material
contracts, agreements, and instruments referred to in Section D of the Atlantic
Disclosure Letter; (B) true and correct copies of all material leases and
licenses referred to in Section B or C of the Atlantic Disclosure Letter; and
(C) true and correct written descriptions of all material supply, distribution,
agency, financing, or other arrangements or understandings referred to in
Section D of the Atlantic Disclosure Letter. Except as set forth in Section D of
the Atlantic Disclosure Letter, Atlantic is not party to any employment
agreement with any employee thereof. To the best of Atlantic's knowledge, none
of Atlantic or any other party to any such contract, agreement, instrument,
lease, or license is now or expects in the future to be in violation or breach
of, or in default with respect to complying with, any term thereof, and each
such material contract, agreement, instrument, lease, or license is in full
force and is (to the best of Atlantic's knowledge in the case of third parties)
the legal, valid, and binding obligation of the parties thereto and (subject to
applicable bankruptcy, insolvency, and other laws affecting the enforceability
of creditors' rights generally) is enforceable as to them in accordance with its
terms. Each such material supply, distribution, agency, financing, or other
arrangement or understanding is a valid and continuing arrangement or
understanding; none of Atlantic or any other party to any such arrangement or
understanding has given notice of termination or taken any action inconsistent
with the continuance of such arrangement or understanding; and the execution,
delivery, and performance of this Agreement will not prejudice any such
arrangement
-18-
or understanding in any way. Atlantic enjoys peaceful and undisturbed possession
under all leases and licenses under which it is operating. Atlantic is not party
to or bound by any contract, agreement, instrument, lease, license, arrangement,
or understanding, or subject to any charter or other restriction, which has had
or, to the best of Atlantic's knowledge, may in the future have a material
adverse effect on the financial condition, results of operations, businesses,
properties, assets, liabilities, or future prospects of Atlantic and, following
the consummation of the transactions contemplated hereby, Print Data. Atlantic
has not engaged within the last five years in, is engaging in, or intends to
engage in any transaction with, or has had within the last five years, now has,
or intends to have any contract, agreement, instrument, lease, license,
arrangement, or understanding with, any stockholder of Atlantic, any director,
officer, or employee of Atlantic (except for employment agreements listed in
Section D of the Atlantic Disclosure Letter and employment and compensation
arrangements described in Section E of the Atlantic Disclosure Letter), any
relative or affiliate of any stockholder of Atlantic, any such director,
officer, or employee, or any other corporation or enterprise in which any
stockholder of Atlantic, any such director, officer, or employee, or any such
relative or affiliate then had or now has a 5% or greater equity or voting or
other substantial interest, other than those listed and so specified in Section
D of the Atlantic Disclosure Letter. The stock ledgers and stock transfer books
and the minute book records of Atlantic relating to all issuances and transfers
of stock by Atlantic and all proceedings of the stockholders and the Board of
Directors and committees thereof of Atlantic since their respective
incorporations made available to Print Data are the original stock ledgers and
stock transfer books and minute book records of Atlantic or exact copies
thereof. Atlantic is not in violation or breach of, or in default with respect
to, any term of its certificate of incorporation or by-laws (or, in each case,
the comparable charter document, if any, under applicable law).
(h) Employees.
(i) Atlantic does not have, or contribute to, any pension,
profit-sharing, option, other incentive plan, or any other type of
Employee Benefit Plan or has any obligation to or customary arrangement
with employees for bonuses, incentive compensation, vacations,
severance pay, sick pay, sick leave, insurance, service award,
relocation, disability, tuition refund, or other benefits, whether oral
or written, except as set forth in Section E of the Atlantic Disclosure
Letter. Atlantic has furnished to Print Data true and correct copies,
of all documents evidencing plans, obligations, or arrangements
referred to in Section E of the Atlantic Disclosure Letter (or true and
correct written summaries of such plans, obligations, or arrangements
to the extent not evidenced by documents) and true and correct copies,
so initialed, of all documents evidencing trusts, summary plan
descriptions, and any other summaries or descriptions relating to any
such plans.
(ii) Section E of the Atlantic Disclosure Letter contains a
true and correct statement of the names, relationship with Atlantic,
present rates of compensation (whether in the form of salary, bonuses,
commissions, or other supplemental compensation now or hereafter
payable), and aggregate compensation for the fiscal year ended December
31, 2002 of (A) each director, officer, or other employee of Atlantic
whose aggregate compensation for the fiscal year ended December 31,
2002 exceeded
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US$100,000 or whose aggregate compensation presently exceeds the rate
of US$100,000 per annum and (B) all sales agents, dealers, or
distributors of Atlantic. Since December 31, 2002, Atlantic has not
changed the rate of compensation of any of its directors, officers,
employees, agents, dealers, or distributors, nor has any Employee
Benefit Plan or program of Atlantic been instituted or amended to
increase benefits thereunder.
(i) Patents, Trademarks, Et Cetera. Atlantic does not own or have
pending, and is not licensed or otherwise permitted to use, any material patent,
patent application, trademark, trademark application, tradename, service xxxx,
copyright, copyright application, franchise, trade secret, computer program (in
object or source code form or otherwise), or other intangible property or asset
(collectively, "Intangibles"), other than as described in Section C of the
Atlantic Disclosure Letter. Each Intangible is validly issued and is currently
in force and uncontested in all jurisdictions in which it is used or in which
such use is contemplated. Section C of the Atlantic Disclosure Letter contains a
true and correct listing of: (i) all Intangibles which are owned (either in
whole or in part), used by, or licensed to Atlantic or which otherwise relate to
the businesses of Atlantic, and a description of each such Intangible which (A)
identifies its owner, registrant, or applicant and (B) where appropriate,
provides a statement of cost, book value and reserve for depreciation of each
such item for tax purposes, and net book value of each such item for financial
reporting purposes; (ii) all contracts, agreements, instruments, leases, and
licenses and identification of all parties thereto under which Atlantic owns or
uses any Intangible (whether or not under license from third parties), together
with the identification of the owner, registrant, or applicant of each such
Intangible; (iii) all contracts, agreements, instruments, leases, and licenses
and identification of all parties thereto under which Atlantic grants the right
to use any Intangible; and (iv) all validity, infringement, right-to-use, or
other opinions of counsel (whether in-house or outside) which concern the
validity, infringement, or enforceability of any Intangible owned or controlled
by a party other than Atlantic which relates to the businesses, properties, or
assets of Atlantic. Except as specified in Section C of the Atlantic Disclosure
Letter: (v) Atlantic is the sole and exclusive owner or licensee of, and (other
than those licensed by Atlantic to a third party) has the right to use, all
Intangibles; (vi) no Intangible is subject to any order, judgment, decree,
contract, agreement, instrument, lease, or license restricting the scope of the
use thereof; (vii) during the last five years, Atlantic has not been charged
with, and has not charged others with, unfair competition, infringement of any
Intangible, or wrongful use of confidential information, trade secrets, or
secret processes; and (viii) Atlantic is not using any patentable invention,
confidential information, trade secret, or secret process of others. There is no
right under any Intangible necessary to the businesses of Atlantic as presently
conducted or as it contemplates conducting, except such as are so designated in
Section C of the Atlantic Disclosure Letter. Atlantic has not infringed, is not
infringing, and has not received notice of infringement in respect of the
Intangibles or asserted Intangibles of others, nor has Atlantic been advised by
counsel or others that it is infringing or may infringe the Intangibles or
asserted Intangibles of others if any currently contemplated business activity
is effectuated. To the knowledge of Atlantic, there is no infringement by others
of Intangibles of Atlantic. As far as Atlantic can foresee, there is no
Intangible or asserted Intangible of others that may materially adversely affect
the financial condition, results of operations, businesses, properties, assets,
liabilities, or future prospects of Atlantic. All contracts, agreements,
instruments, leases, and licenses pertaining to Intangibles to which Atlantic is
a party, or to which any of its businesses,
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properties, or assets are subject, are in compliance with all laws, rules,
regulations, orders, judgments, and decrees binding on Atlantic or to which any
of its businesses, properties, or assets are subject. There is no trademark,
tradename or service xxxx used by Atlantic to identify, respectively, its
products, businesses, or services. Neither the Atlantic Shareholder, any
director, officer, or employee of Atlantic, any relative or affiliate of the
Atlantic Shareholder or any such director, officer, or employee, nor any other
corporation or enterprise in which the Atlantic Shareholder, any such director,
officer, or employee, or any such relative or affiliate had or now has a 5% or
greater equity or voting or other substantial interest, possesses any Intangible
which relates to the businesses of Atlantic.
(j) Questionable Payments. Neither Atlantic, nor any director, officer,
agent, employee, or other person associated with, or acting on behalf of,
Atlantic, nor the Atlantic Shareholder, has, directly or indirectly: used any
corporate funds for unlawful contributions, gifts, entertainment, or other
unlawful expenses relating to political activity; made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns from corporate funds; violated any provision of
the Foreign Corrupt Practices Act of 1977, as amended; or made any bribe,
rebate, payoff, influence payment, kickback, or other unlawful payment.
(k) Authority. Atlantic has all requisite power and authority to
execute, deliver, and perform this Agreement. All necessary corporate
proceedings of Atlantic have been duly taken to authorize the execution,
delivery, and performance of this Agreement by Atlantic. This Agreement has been
duly authorized, executed, and delivered by Atlantic, constitutes the legal,
valid, and binding obligation of Atlantic, and is enforceable as to Atlantic in
accordance with its terms. Except as otherwise set forth in this Agreement, no
consent, authorization, approval, order, license, certificate, or permit of or
from, or declaration or filing with, any federal, state, local, or other
governmental authority or any court or other tribunal is required by Atlantic
for the execution, delivery, or performance of this Agreement by Atlantic. No
consent of any party to any material contract, agreement, instrument, lease,
license, arrangement, or understanding to which Atlantic is a party, or to which
its or any of its businesses, properties, or assets are subject, is required for
the execution, delivery, or performance of this Agreement (except such consents
referred to in Section D of the Atlantic Disclosure Letter); and the execution,
delivery, and performance of this Agreement will not (if the consents referred
to in Section D of the Atlantic Disclosure Letter are obtained prior to the
Closing) violate, result in a breach of, conflict with, or (with or without the
giving of notice or the passage of time or both) entitle any party to terminate
or call a default under, entitle any party to receive rights or privileges that
such party was not entitled to receive immediately before this Agreement was
executed under, or create any obligation on the part of Atlantic or Print Data
to which it was not subject immediately before this Agreement was executed
under, any term of any such material contract, agreement, instrument, lease,
license, arrangement, or understanding, or violate or result in a breach of any
term of the certificate of incorporation or by-laws of Atlantic (or, in each
case, the comparable charter documents, if any, under applicable law), or (if
the provisions of this Agreement are satisfied) violate, result in a breach of,
or conflict with any law, rule, regulation, order, judgment, or decree binding
on Atlantic or to which any of its businesses, properties, or assets are
subject. Except as set forth in Section J of the Atlantic Disclosure Letter,
neither Atlantic nor any of its officers, directors, employees, or agents has
employed any broker or finder or incurred any
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liability for any fee, commission, or other compensation payable by any person
on account of alleged employment as a broker or finder, or alleged performance
of services as a broker or finder, in connection with or as a result of this
Agreement or the other transactions contemplated hereby and in connection
herewith.
(l) Insurance. All policies of fire and other insurance against
casualty and other losses and public liability insurance carried by Atlantic are
described in Section H of the Atlantic Disclosure Letter (including the risks
covered and limits of such policies) and are in full force and effect. A full
and complete copy of each such insurance policy has been provided to Print Data,
and such policies are summarized in Section H of the Atlantic Disclosure Letter.
All premiums in respect of such policies for which premium notices have been
received have been paid in full as the same become due and payable. Atlantic
have not failed to give any notice or present any claim under any insurance
policy in due and timely fashion. There are no actual claims or claims
threatened in writing against Atlantic which could come within the scope of such
coverage nor are any such policies currently threatened with cancellation. There
are no outstanding requirements or recommendations by any insurance company that
issued a policy with respect to any of the respective assets, the businesses, or
operations of Atlantic or by any Board of Fire Underwriters or other body
exercising similar functions or by any governmental authority requiring or
recommending any repairs or other work to be done on, or with respect to, any of
the respective assets of Atlantic or requiring or recommending any equipment or
facilities to be installed on any premises from which the respective businesses
of Atlantic is conducted or in connection with any of the respective assets
thereof. Atlantic does not have any knowledge of any material proposed increase
in applicable insurance rates or of any conditions or circumstances applicable
to the respective businesses thereof that might result in such increases. No
such policy is terminable by virtue of the transactions contemplated by this
Agreement.
(m) Business Conducted in No Other Name. Subject to the next sentence,
all business of Atlantic has been conducted in its and for their benefit and
there are no parties related or affiliated with Atlantic, either directly or
indirectly, which are competing for the business of Atlantic. Atlantic conducts
business in the following name: Atlantic Components Limited.
(n) Customers and Suppliers. There has been no termination or
cancellation of any relationship between Atlantic and any material supplier, or
any customer or group of customers which, individually or in the aggregate,
represented more than five (5%) percent of the gross revenues of Atlantic taken
as a whole during the fiscal year ended December 31, 2002, nor is there any
reason to believe that any such terminations or cancellations of such magnitudes
are pending or threatened.
(o) Completeness of Disclosure. No representation or warranty by
Atlantic in this Agreement contains, or at the Closing Date will contain, an
untrue statement of material fact or omits or at the Closing Date will omit to
state a material fact required to be stated therein or necessary to make the
statements made not misleading.
(p) Compliance with Law and Government Regulations. Atlantic is in
compliance with and is not in violation of applicable local or foreign statutes,
laws and regulations (including without limitation, any applicable building,
zoning or other law, ordinance or regulation)
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affecting its properties or the operation of its business. Atlantic is
not subject to any order, decree, judgment or other sanction of any court,
administrative agency or other tribunal.
SECTION 2.03 REPRESENTATIONS AND WARRANTIES OF THE ATLANTIC
SHAREHOLDER. The Atlantic Shareholder hereby represents and warrants to, and
agrees with, Print Data as follows:
(a) Representations and Warranties of Atlantic. To the knowledge of the
Atlantic Shareholder, the representations and warranties of Atlantic set forth
in Section 2.02 hereof are true and correct in all material respects. Nothing
has come to the attention of the Atlantic Shareholder that would lead the
Atlantic Shareholder to believe that any representation or warranty of Atlantic
set forth on Section 2.02 hereof is untrue or incorrect in any material respect.
(b) Authority. Atlantic and the Atlantic Shareholder have each approved
this Agreement and duly authorized the execution and delivery hereof. The
Atlantic Shareholder is an individual residing in Hong Kong with full power and
authority under the laws thereof to execute, deliver, and perform this Agreement
and the transactions contemplated hereby and in connection herewith. The
Atlantic Shareholder has reached the age of majority under applicable law.
(c) Ownership of Shares. The Atlantic Shareholder owns beneficially all
of the shares of Atlantic Capital Stock. The Atlantic Shareholder has full power
and authority to transfer such shares of Atlantic Capital Stock to Print Data
under, pursuant to, and in accordance with, this Agreement, and such shares are
free and clear of any liens, charges, mortgages, pledges or encumbrances and
such shares are not subject to any claims as to the ownership thereof, or any
rights, powers or interest therein, by any third party and are not subject to
any preemptive or similar rights of stockholders.
(d) Investment Representations and Covenants.
(i) The Atlantic Shareholder represents that he is acquiring
the shares of Print Data Common Stock to be issued pursuant to Section 1.02(a)
hereof for his own account and for investment only and not with a view to
distribution or resale thereof within the meaning of such phrase as defined
under the Securities Act. The Atlantic Shareholder shall not dispose of any part
or all of such shares of Print Data Common Stock in violation of the provisions
of the Securities Act and the rules and regulations promulgated under the
Securities Act by the SEC and all applicable provisions of State securities laws
and regulations.
(ii) The certificate or certificates representing the shares
of Print Data Common Stock shall bear a legend in substantially the form set
forth in Section 1.02(c) hereof.
(iii) The Atlantic Shareholder acknowledges being informed
that the shares of Print Data Common Stock to be issued pursuant to Section
1.02(a) hereof shall be unregistered, shall be "restricted securities" as
defined in paragraph (a) of Rule 144 under the Securities Act, and must be held
indefinitely unless (a) they are subsequently registered under the Securities
Act, or (b) an exemption from such registration is available. The Atlantic
Shareholder further acknowledges that
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Print Data will not have an obligation to currently register such securities
for the account of Atlantic Shareholder.
(iv) The Atlantic Shareholder acknowledges that he has been
afforded access to all material information which they have requested relevant
to his decision to acquire the shares of Print Data Common Stock and to ask
questions of Print Data's management and that, except as set forth herein,
neither Print Data nor anyone acting on behalf of Print Data has made any
representations or warranties to the Atlantic Shareholder which have induced,
persuaded, or stimulated the Atlantic Shareholder to acquire such shares of
Print Data Common Stock.
(v) Either alone, or together with their investment
advisor(s), the Atlantic Shareholder has the knowledge and experience in
financial and business matters to be capable of evaluating the merits and
risks of the prospective investment in the shares of Print Data Common Stock,
and the Atlantic Shareholder is and will be able to bear the economic risk of
the investment in such shares of Print Data Common Stock.
ARTICLE III
COVENANTS
SECTION 3.01 COVENANTS OF PRINT DATA. Print Data covenants and agrees
that, after the date hereof and through the earlier of the Closing or the date
of the termination of this Agreement pursuant to Article IV hereof (the earlier
of such times, the "Release Time"), unless Atlantic will otherwise approve in
writing, which approval will not be unreasonably withheld:
(a) (i) Until the Release Time, no dividend or liquidating or
other distribution or stock split shall be authorized, declared, paid, or
effected by Print Data in respect of the outstanding shares of Print Data Common
Stock.
(ii) Until the Release Time, no share of capital stock of
Print Data or warrant for any such share, right to subscribe to or purchase any
such share, or security convertible into, or exchangeable or exercisable for,
any such share, shall be issued or sold by Print Data.
(b) Until the Release Time, Print Data will afford the
officers, directors, employees, counsel, agents, investment bankers,
accountants, and other representatives of Atlantic and the Atlantic Shareholder
free and full access to the plants, properties, books, and records of Print
Data. Print Data will permit them to make extracts from and copies of such books
and records, and will from time to time furnish Atlantic and the Atlantic
Shareholder with such additional financial and operating data and other
information as to the financial condition, results of operations, businesses,
properties, assets, liabilities, or future prospects of Print Data as Atlantic
or the Atlantic Shareholder from time to time may request. Until the Release
Time, Print Data will cause the independent certified public accountants of
Print Data to make available to Atlantic, its independent certified public
accountants, and the Atlantic Shareholder, the work papers relating to the
audits of Print Data referred to in Section 2.01(c) of this Agreement.
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(c) Until the Release Time, Print Data will conduct its
affairs, so that on the Closing Date, no representation or warranty of Print
Data will be inaccurate, no covenant or agreement of Print Data will be
breached, and no condition in this Agreement will remain unfulfilled by reason
of the actions or omissions of Print Data. Except as otherwise consented to by
Atlantic in writing, until the Release Time, Print Data will conduct its affairs
in all respects only in the ordinary course.
(d) Until the Release Time, Print Data will immediately advise
Atlantic in a detailed written notice of any material fact or occurrence or any
pending or threatened material occurrence of which it obtains knowledge and
which (if existing and known at the date of the execution of this Agreement)
would have been required to be set forth or disclosed in or pursuant to this
Agreement or in the Print Data Disclosure Letter, which (if existing and known
at any time prior to or at the Closing) would make the performance by any party
of a covenant contained in this Agreement impossible or make such performance
materially more difficult than in the absence of such fact or occurrence, or
which (if existing and known at the time of the Closing) would cause a condition
to any party's obligations under this Agreement not to be fully satisfied.
(e) Print Data shall use its commercially reasonable efforts
to insure that all confidential information which Print Data or any of its
officers, directors, employees, counsel, agents, investment bankers, or
accountants may now possess or may hereafter create or obtain relating to the
financial condition, results of operations, businesses, properties, assets,
liabilities, or future prospects of Atlantic, any affiliate of Atlantic, or any
customer or supplier of Atlantic or any such affiliate shall not be published,
disclosed, or made accessible by any of them to any other person or entity
without the prior written consent of Atlantic, which written consent shall not
be unreasonably withheld; provided, however, that the restrictions of this
sentence shall not apply (i) after the Closing, (ii) as may otherwise be
required by law, (iii) as may be necessary or appropriate in connection with the
enforcement of this Agreement, or (iv) to the extent the information shall have
otherwise become publicly available. Print Data shall, and shall cause all other
such persons and entities to, deliver to Atlantic all tangible evidence of the
confidential information relating to Atlantic, any affiliate of Atlantic, or
(insofar as such confidential information was provided by, or on behalf of,
Atlantic, or any such affiliate of Atlantic) any customer or supplier of any of
them or any such affiliate to which the restrictions of the foregoing sentence
apply immediately after the termination of this Agreement pursuant to Article IV
or V hereof.
(f) Before Print Data releases any information concerning this
Agreement or any of the other transactions contemplated hereby or in connection
herewith which is intended for or may result in public dissemination thereof,
Print Data shall cooperate with Atlantic, shall furnish drafts of all documents
or proposed oral statements to Atlantic for comment, and shall not release any
such information without the written consent of Atlantic. Nothing contained
herein shall prevent Print Data from releasing any information if required to do
so by law.
(g) Print Data shall not make any agreement or reach any
understanding not approved in writing by Atlantic as a condition for obtaining
any consent, authorization, approval,
-25-
order, license, certificate, or permit required for the consummation of the
transactions contemplated by this Agreement.
(h) Print Data shall promptly prepare all required or, in the
reasonable opinion of the parties hereto, appropriate Periodic Reports (as
defined below) and other regulatory filings relating to this Agreement and the
transactions contemplated hereby and in connection herewith. Print Data shall
furnish or cause to be furnished, for inclusion in the Periodic Reports, such
information about Print Data, and Print Data's security holders as may be
required or as may be reasonably requested by Atlantic, and shall continue to
furnish or cause to be furnished such information as is necessary to keep such
information correct and complete in all material respect until the Release Time.
Print Data represents and warrants that the information that it has furnished to
date, taken as a whole, does not now, and will not at any time prior to the
Release Time, (i) contain an untrue statement of a material fact or (ii) omit to
state a material fact required to be stated therein or necessary to make the
statements therein not false or misleading. Print Data shall take any action
required to be taken by it under state "blue-sky," securities, or take-over laws
in connection with the issuance of Print Data Common Stock pursuant to the
transactions contemplated hereby and in connection herewith. The filings made by
Print Data within the past six years with the SEC were, if filed under the
Exchange Act, prepared in accordance with the then existing requirements of the
Exchange Act and the rules and regulations thereunder and, if filed under the
Securities Act, prepared in accordance with the then existing requirements of
the Securities Act and the rules and regulations thereunder. Such filings when
filed, and the press releases and other public statements Print Data has made
subsequent to the last such filing when considered together with such filings,
did not at the time of filing or issuance of the press releases or other public
statements, as the case may be, and (with respect to the press releases and
other public statements, when considered together with such filings) do not now
(i) contain an untrue statement of a material fact or (ii) omit to state a
material fact required to be stated therein or necessary to make the statements
therein not false or misleading.
(i) If, prior to the Release Time, Print Data Common Stock
shall be recapitalized or reclassified or Print Data shall effect any stock
dividend, stock split, or reverse stock split of Print Data Common Stock, then
the shares of Print Data Common Stock to be delivered under this Agreement or
upon exercise, conversion, or exchange of any security to be delivered under
this Agreement or assumed by Print Data as contemplated by this Agreement shall
be appropriately and equitably adjusted to the kind and amount of shares of
stock and other securities and property to which the holders of such shares of
Print Data Common Stock or such other security would have been entitled to
receive had such stock or such other security been issued and outstanding as of
the record date for determining stockholders entitled to participate in such
corporate event.
(j) Print Data shall timely prepare and file any declaration
or filing necessary to comply with any transfer tax statutes that require any
such filing before the Closing.
(k) Until the Release Time, Print Data shall not, and shall
not authorize or permit any officer, director, employee, counsel, agent,
investment banker, accountant, or other representative of Print Data, directly
or indirectly, to contemplate or enter into any transaction the effect of which
may be to prohibit, restrict, or delay the consummation of the transactions
-26-
contemplated by this Agreement or impair the contemplated benefits to Print
Data's stockholders of the transactions contemplated by this Agreement.
(l) (i) Following the consummation of the transactions
contemplated hereby and in connection herewith, Print Data will cause Atlantic
to continue its historic business or to use a significant portion of Atlantic's
historic business assets in a business, in each case within the meaning of
section 1.368-1(d) of the Treasury Regulations, assuming that the assets of, and
the business conducted by, Atlantic at the Closing Date constitute Atlantic's
historic business assets and historic business, respectively.
(ii) Following the consummation of the transactions
contemplated hereby and in connection herewith, Print Data will not permit
Atlantic to issue additional shares that would result in Print Data losing
control of Atlantic within the meaning of section 368(c) of the Code.
(m) Print Data shall use best efforts to file, within 30 days
following the Effective Time, with the National Association of Securities
Dealers, Inc., or its affiliates, all information required by Rule 15c2-11 under
the Exchange Act.
(n) At or prior to the Closing, Print Data shall apply with
the Prothonotary's Office in New Castle County, Delaware for a "dba" to do
business under the assumed name of "ACL Semiconductors Inc."
(o) Effective at the Closing, each member of the Board of
Directors of Print Data shall tender his or her respective resignation
therefrom and shall appoint the following individuals as the sole directors of
Print Data: Xxxxx-Xxx Xxxx and Xxx Xxxx.
(p) On or prior to the Closing Date, Print Data shall deliver
to Atlantic and the Atlantic Shareholder the completed Print Data Disclosure
Letter, which letter shall be correct and complete in all material respects.
(q) In addition to the shares of Print Data Common Stock to be
delivered pursuant to Sections 1.02(a) and 1.03(a) hereof, 2,620,000 new
shares of Print Data Common Stock shall be issued and delivered in
certificated form at the Closing to, or to the order of, as follows: (i)
706,666 shares to Emerging Growth Partners, Inc.; (ii) 956,667 shares to
Orient Financial Services Limited; and (iii) 956,667 shares to Xx. Xx Wing
Kei.
SECTION 3.02 COVENANTS OF ATLANTIC. Atlantic covenants and agrees that,
after the date hereof and through the Release Time, unless Print Data will
otherwise approve in writing, which approval will not be unreasonably withheld:
(a) Until the earlier of the Release Time, no amendment will
be made in the certificate of incorporation or by-laws (or, in each case, the
comparable charter documents, if any, under applicable law) of Atlantic.
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(b) Until the Release Time, no share of capital stock of
Atlantic, option or warrant for any such share, right to subscribe to or
purchase any such share, or security convertible into, or exchangeable or
exercisable for, any such share, shall be issued or sold by Atlantic, otherwise
than as contemplated by, or in connection with, this Agreement.
(c) Until the Release Time, no dividend or liquidating or
other distribution or stock split shall be authorized, declared, paid, or
effected by Atlantic in respect of the outstanding shares of Atlantic Capital
Stock. Until the Release Time, no direct or indirect redemption, purchase, or
other acquisition shall be made by Atlantic of shares of Atlantic Capital Stock.
(d) Until the Release Time, Atlantic shall not borrow money,
guarantee the borrowing of money, engage in any transaction, or enter into any
material agreement other than in connection with the transactions contemplated
hereby or in connection herewith or otherwise pursuant to any currently
outstanding credit line of Atlantic. For purposes of this Agreement, references
to "material", as well as correlative terms (e.g., materially, materiality,
etc.) shall be deemed to refer to amounts of US$100,000 or more or effects or
consequences of US$100,000 or more.
(e) Until the Release Time, Atlantic will afford the officers,
directors, employees, counsel, agents, investment bankers, accountants, and
other representatives of Print Data and lenders, investors, and prospective
lenders and investors free and full access to the plants, properties, books, and
records of Atlantic, will permit them to make extracts from and copies of such
books and records, and will from time to time furnish Print Data with such
additional financial and operating data and other information as to the
financial condition, results of operations, businesses, properties, assets,
liabilities, or future prospects of Atlantic as Print Data from time to time may
request. Until the Release Time, Atlantic will cause the independent certified
public accountants of Atlantic to make available to Print Data and its
independent certified public accountants the work papers relating to the audits
of Atlantic referred to in Section 2.02(c) of this Agreement.
(f) Until the Release Time, Atlantic will conduct its affairs
so that at the Closing, no representation or warranty of Atlantic will be
inaccurate in any material respect, no covenant or agreement of Atlantic will be
breached, and no condition in this Agreement will remain unfulfilled by reason
of the actions or omissions of Atlantic. Except as otherwise consented to by
Print Data in writing, until the Release Time, Atlantic will use its best
efforts to preserve the business operations of Atlantic intact, to keep
available the services of its present personnel, to preserve in full force and
effect the contracts, agreements, instruments, leases, licenses, arrangements,
and understandings of Atlantic, and to preserve the good will of its suppliers,
customers, and others having business relations with any of them. Until the
Release Time, Atlantic will conduct its affairs in all respects only in the
ordinary course, other than in connection with the matters referenced herein.
(g) Until the Release Time, Atlantic will immediately advise
Print Data in a detailed written notice of any material fact or occurrence or
any pending or threatened material occurrence of which it obtains knowledge and
which (if existing and known at the date of the
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execution of this Agreement) would have been required to be set forth or
disclosed in or pursuant to this Agreement or the Atlantic Disclosure Letter,
which (if existing and known at any time prior to or at the Closing) would make
the performance by any party of a covenant contained in this Agreement
impossible or make such performance materially more difficult than in the
absence of such fact or occurrence, or which (if existing and known at the time
of the Closing) would cause a condition to any party's obligations under this
Agreement not to be fully satisfied.
(h) Atlantic shall use its commercially reasonable efforts to
insure that all confidential information which Atlantic or any of its respective
officers, directors, employees, counsel, agents, investment bankers, or
accountants may now possess or may hereafter create or obtain relating to the
financial condition, results of operations, businesses, properties, assets,
liabilities, or future prospects of Print Data, any affiliate thereof, or any
customer or supplier thereof or of any such affiliate shall not be published,
disclosed, or made accessible by any of them to any other person or entity at
any time or used by any of them except in the ordinary course of business and
for the benefit of Atlantic; provided, however, that the restrictions of this
sentence shall not apply (A) after this Agreement is terminated pursuant to
Article IV or V hereof or otherwise, (B) as may otherwise be required by law,
(C) as may be necessary or appropriate in connection with the enforcement of
this Agreement, or (D) to the extent the information shall have otherwise become
publicly available.
(i) Before Atlantic releases any information concerning this
Agreement or any of the transactions contemplated by this Agreement which is
intended for, or may result in, public dissemination thereof, Atlantic shall
cooperate with Print Data, shall furnish drafts of all documents or proposed
oral statements to Print Data for comment, and shall not release any such
information without the written consent of Print Data, which consent shall not
be unreasonably withheld. Nothing contained herein shall prevent Atlantic from
releasing any information if required to do so by law.
(j) Atlantic shall not make any agreement or reach any
understanding not approved in writing by Print Data as a condition for obtaining
any consent, authorization, approval, order, license, certificate, or permit
required for the consummation of the transactions contemplated by this
Agreement.
(k) Atlantic shall furnish, or cause to be furnished, for
inclusion in the periodic reports of Print Data on Forms 8-K, 10-QSB, 10-KSB, or
otherwise (such periodic reports, together with all financial statements,
exhibits, amendments, and supplements thereto, in the form filed by Print Data
with the SEC being hereinafter called the "Periodic Reports"), to be filed
pursuant to the Exchange Act in connection with the transactions contemplated by
this Agreement, or for inclusion in Print Data's filings under state "blue-sky,"
securities, or take-over laws, such information about Atlantic or the Atlantic
Shareholder as may be required or as may be reasonably requested by Print Data,
and shall continue to furnish or cause to be furnished such information as is
necessary to keep such information correct and complete in all material respect
until the Release Time. Atlantic represents and warrants that the information
that it has furnished to date, taken as a whole, does not now, and will not at
any time prior to the Release Time, (i) contain an untrue statement of a
material fact or (ii) omit to state a material fact required to be stated
therein or necessary to make the statements therein not false or misleading.
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(l) Transfer Taxes. Atlantic shall timely prepare and file any
declaration or filing necessary to comply with any transfer tax statutes that
require any such filing before the Closing.
(m) On or prior to the Closing Date, Atlantic and the Atlantic
Shareholder shall deliver to Print Data the completed Print Data Disclosure
Letter, which letter shall be correct and complete in all material respects.
SECTION 3.03 COVENANTS OF THE ATLANTIC SHAREHOLDER. The Atlantic
Shareholder covenants and agrees that, after the date hereof and through the
Release Time, unless Print Data will otherwise approve in writing, which
approval will not be unreasonably withheld, as follows:
(a) The Atlantic Shareholder will use best efforts to cause
Atlantic to perform each covenant thereof set forth herein on a timely basis.
(b) Until the earlier of the Release Time, the Atlantic
Shareholder shall take no action the result of which shall be to cause Atlantic
to make any amendment in the certificate of incorporation or by-laws (or, in
each case, the comparable charter documents, if any, under applicable law)
thereof.
(c) Before the Atlantic Shareholder releases any information
concerning this Agreement or any of the transactions contemplated by this
Agreement which is intended for, or may result in, public dissemination thereof,
the Atlantic Shareholder shall cooperate with Print Data, shall furnish drafts
of all documents or proposed oral statements to Print Data for comment, and
shall not release any such information without the written consent of Print
Data, which consent shall not be unreasonably withheld. Nothing contained herein
shall prevent the Atlantic Shareholder from releasing any information if
required to do so by law.
(d) The Atlantic Shareholder shall furnish, or cause to be
furnished, for inclusion in the Periodic Reports to be filed pursuant to the
Exchange Act in connection with the transactions contemplated by this Agreement,
or for inclusion in Print Data's filings under state "blue-sky," securities, or
take-over laws, such information about Atlantic or the Atlantic Shareholder as
may be required or as may be reasonably requested by Print Data, and shall
continue to furnish or cause to be furnished such information as is necessary to
keep such information correct and complete in all material respect until the
Release Time. The Atlantic Shareholder represents and warrants that the
information in writing that it has furnished to date regarding himself, taken as
a whole, does not now, and will not at any time prior to the Release Time, (i)
contain an untrue statement of a material fact or (ii) omit to state a material
fact required to be stated therein or necessary to make the statements therein
not false or misleading.
SECTION 3.04 ADDITIONAL COVENANTS; ESCROW AGENT.
(a) As soon as practicable after the Closing, the name of Print Data
will be changed to "ACL Semiconductors Inc."
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(b) The Atlantic Shareholder and Print Data agree not to cause or
effect a reverse split of the Print Data Common Stock for a period of at least
one year from the Closing Date without the prior written consent of each of
Xxxxxxx X. Xxxxx and Xxxxxxx X. Xxxxx.
(c) Within 45 days following the Closing, Print Data shall satisfy all
outstanding obligations owing in respect of reasonable expenses incurred by or
on behalf of Print Data in connection with the consummation of the transactions
contemplated by this Agreement (the "Print Data Transaction Expenses"), which
expenses shall be set forth on a statement to be agreed by the parties prior to
the Closing. Upon satisfaction of the Print Data Transaction Expenses, legal
counsel to Print Data prior to the Closing shall deliver written notice to the
Escrow Agent that such expenses have been satisfied in full.
(d) On or prior to the Closing, Xxxxxxx X. Xxxxx and Xxxxxxx X. Xxxxx
shall deliver to Reitler Xxxxx LLC, as escrow agent (in such capacity, "Escrow
Agent"), share certificates representing 1,000,000 shares (the "Escrowed
Shares") of Print Data Common Stock together with stock powers executed in
blank, for release and delivery as follows:
(i) On the 91st day following the Closing, the Escrow Agent shall
deliver share certificates representing 225,000, 225,000 and
450,000 of the Escrowed Shares respectively to Orient
Financial Services Limited, Xx. Xx Wing Kei and Emerging
Growth Partners, Inc., financial advisors to Atlantic (an
aggregate of 900,000 shares); and
(ii) Upon its receipt of written notice from legal counsel to Print
Data in this transaction that the Print Data Transaction
Expenses have been reimbursed, the Escrow Agent shall release
and deliver share certificates representing 25,000, 25,000 and
50,000 of the Escrowed Shares respectively to Orient Financial
Services Limited, Xx. Xx Wing Kei and Emerging Growth
Partners, Inc.. In the event the Print Data Transaction
Expenses have not been timely reimbursed, on the 46th day
following Closing, the Escrow Agent shall return the
respective share certificates representing 100,000 of the
Escrowed Shares to Xxxxxxx X. Xxxxx and Xxxxxxx X. Xxxxx.
(e) The parties acknowledge that Escrow Agent is acting solely as a
stakeholder at their request and for their convenience, that Escrow Agent shall
not be deemed to be the agent of either of the parties, and that Escrow Agent
shall not be liable to either of the parties for any act or omission on its part
unless taken or suffered in bad faith or involving gross negligence. The parties
hereto shall jointly and severally indemnify and hold Escrow Agent harmless from
and against all costs, claims and expenses, including reasonable attorneys'
fees, incurred in connection with the performance of Escrow Agent's duties
hereunder, except with respect to actions or omissions taken or suffered by
Escrow Agent in bad faith or involving gross negligence on the part of Escrow
Agent. It is understood and agreed that Escrow Agent's only duties and
obligations hereunder are as expressly set forth in this Agreement. Upon
disposing of the Escrowed Shares in accordance with the provisions of this
Section 3.04, Escrow Agent be relieved and discharged of all claims and
liabilities relating to the Escrowed Shares, and shall not
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be subject to any claims or surcharges made by or on behalf of either party
hereto. The fact that Escrow Agent is acting as such under this Agreement shall
not in any way prevent it from representing Atlantic, the Atlantic Shareholder
or any other party with respect to this Agreement.
(f) Simultaneously with the Closing, the pre-Closing management and
business operations of Print Data will be reorganized into a newly formed wholly
owned subsidiary of Print Data ("Historic Print Data Subsidiary"). As soon as
practicable after the Closing, Print Data and the holders of all of the issued
and outstanding shares of Series A Preferred Stock of Print Data (the "Preferred
Holders") shall enter into a stock purchase agreement, to be negotiated in good
faith by the parties prior to the Closing (the "Historic Print Data Stock
Purchase Agreement")pursuant to which Print Data will sell, assign and transfer
the capital stock of the Historic Print Data Subsidiary to the Preferred
Holders, or an entity designated by the Preferred Holders, in consideration for
the surrender by the Preferred Holders to and redemption by Print Data of all of
the outstanding shares of Series A Preferred Stock. Such Historic Data Stock
Purchase Agreement shall contain standard representations and warranties,
covenants, indemnities and Print Data shall not be obligated to consummate the
contemplated transfer of the Historic Print Data Subsidiary to the extent final
agreement between the parties cannot be reached.
ARTICLE IV
CONDITIONS; ABANDONMENT AND TERMINATION
SECTION 4.01 RIGHT OF PRINT DATA TO ABANDON. Print Data's Board of
Directors shall have the right to abandon or terminate this Agreement if any of
the following conditions shall not be true or shall not have occurred, as the
case may be, as of the specified date or dates:
(a) All representations and warranties of Atlantic and the
Atlantic Shareholder contained in this Agreement shall be accurate when made
and, in addition, shall be accurate as of the Closing Date as though such
representations and warranties were then made in exactly the same language by
Atlantic or the Atlantic Shareholder, as applicable, and regardless of knowledge
or lack thereof on the part of Atlantic or the Atlantic Shareholder (as
applicable) or changes beyond its control; as of the Closing Date, Atlantic and
the Atlantic Shareholder shall have performed and complied with all covenants
and agreements and satisfied all conditions required to be performed and
complied with by it at or before the Closing Date, respectively, by this
Agreement; and Print Data shall have received a certificate executed by the
chief executive officer and the chief financial officer of Atlantic and the
Atlantic Shareholder, dated the Closing Date, to that effect.
(b) Print Data shall have received at the Closing Date
certificates executed by the chief executive officer and the chief financial
officer of Atlantic and by the Atlantic Shareholder as of such dates, to the
effect that they have carefully examined the Periodic Reports,
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and any amendment or supplement thereto, and, to the best of their knowledge,
(i) neither the Periodic Reports, nor any amendment or supplement thereto (A)
contains an untrue statement of a material fact or (B) omits to state a material
fact required to be stated therein or necessary to make the statements therein
not false or misleading, provided in each case that such untrue statement or
omission relates to information furnished by or on behalf of, or pertaining to,
Atlantic or the Atlantic security holder, (ii) since the date hereof, no event
with respect to Atlantic or the Atlantic security holder has occurred which
should have been set forth in an amendment to any Periodic Report, or a
supplement to any Periodic Report which has not been set forth in such an
amendment or supplement, and (iii) any contract, agreement, instrument, lease,
or license regarding Atlantic required to be filed as an exhibit to any Periodic
Report has been filed with the SEC as an exhibit to or has been incorporated as
an exhibit by reference into such Periodic Report.
(c) Atlantic and the Atlantic Shareholder shall have delivered
to Print Data at or prior to the Closing Date such other documents (including
certificates of officers of Atlantic) as Print Data may reasonably request in
order to enable Print Data to determine whether the conditions to their
obligations under this Agreement have been met and otherwise to carry out the
provisions of this Agreement.
(d) All actions, proceedings, instruments, and documents
required by Atlantic and the Atlantic Shareholder to carry out this Agreement or
incidental thereto and all other related legal matters shall be subject to the
reasonable approval of counsel to Print Data, and Atlantic and the Atlantic
Shareholder shall have furnished such counsel such documents as such counsel may
have reasonably requested for the purpose of enabling them to pass upon such
matters.
(e) At the Closing, there shall not be pending any legal
proceeding relating to, or seeking to prohibit or otherwise challenge the
consummation of, the transactions contemplated by this Agreement, or to obtain
substantial damages with respect thereto.
(f) There shall not have been any action taken, or any law,
rule, regulation, order, judgment, or decree proposed, promulgated, enacted,
entered, enforced, or deemed applicable to the transactions contemplated by this
Agreement by any federal, state, local, or other governmental authority or by
any court or other tribunal, including the entry of a preliminary or permanent
injunction, which, in the reasonable judgment of Print Data, (i) makes this
Agreement or any of the transactions contemplated by this Agreement illegal,
(ii) results in a delay in the ability of Atlantic or Print Data to consummate
the transactions contemplated by this Agreement beyond September 30, 2003, (iii)
requires the divestiture by Print Data of a material portion of the business of
either Print Data or of Atlantic, (iv) imposes material limitations on the
ability of Print Data effectively to exercise full rights of ownership of shares
of Atlantic including the right to vote such shares on all matters properly
presented to the Atlantic Shareholder, or (v) otherwise prohibits, restricts, or
delays consummation of the transactions contemplated by this Agreement or
impairs the contemplated benefits to Print Data of this Agreement or any of the
other transactions contemplated by this Agreement.
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(g) The parties to this Agreement shall have obtained at or
prior to the Closing Date all unconditional written approval to this Agreement
and to the execution, delivery, and performance of this Agreement by each of
them of relevant governmental authorities having jurisdiction over Print Data or
Atlantic or the subject matter of this Agreement.
(h) At or prior to the Closing Date, Print Data shall have
made all filings, and taken all actions, necessary to comply with all applicable
"blue-sky" laws with regard to the issuance of Print Data Common Stock as
contemplated by this Agreement other than the filing of Form D up to 15 days
following the Closing. Without limiting the generality of the foregoing, any
prescribed periods within which a "blue-sky" or securities law administrator may
disallow Print Data's notice of reliance on an exemption from such state's
requirements, shall have elapsed at or prior to the Closing.
(i) The parties to this Agreement shall have obtained at or
prior to the Closing Date all consents required for the consummation of the
transactions contemplated by this Agreement from any unrelated third party to
any contract, agreement, instrument, lease, license, arrangement, or
understanding to which any of them is a party, or to which any of them or any of
their respective businesses, properties, or assets are subject.
(j) There shall not have been any material adverse change in
the condition (financial or otherwise), operations, business, assets,
liabilities, earnings or prospects of Atlantic since the date hereof.
(k) Print Data shall conduct a due diligence review of
Atlantic and the Atlantic Shareholder, including, without limitation, a review
of the Atlantic Disclosure Letter and the documents referenced therein delivered
prior to the Closing Date, and shall be reasonably satisfied with the result of
such review.
SECTION 4.02 RIGHT OF ATLANTIC AND THE ATLANTIC SHAREHOLDER TO ABANDON.
By the election of the Atlantic Shareholder, the Atlantic Shareholder or,
otherwise, Atlantic's Board of Directors shall have the right to abandon or
terminate this Agreement if any of the following conditions shall not be true or
shall not have occurred, as the case may be, as of the specified date or dates:
(a) All representations and warranties of Print Data contained
in this Agreement shall be accurate when made and, in addition, shall be
accurate as of the Closing Date as though such representations and warranties
were then made in exactly the same language by Print Data and regardless of
knowledge or lack thereof on the part of Print Data or changes beyond its
control; as of the Closing Date, Print Data shall have performed and complied
with all covenants and agreements and satisfied all conditions required to be
performed and complied with by them at or before the Closing Date by this
Agreement; and Atlantic shall have received certificates executed by the chief
executive officer and the chief financial officer of Print Data, dated the
Closing Date, to that effect.
(b) Atlantic shall have received at the Closing, certificates
executed by the chief executive officer and the chief financial officer of Print
Data, dated as of such dates, to the
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effect that they have carefully examined the Periodic Reports, and any amendment
or supplement thereto, and, to the best of their knowledge, (i) neither any
Periodic Report, nor any amendment or supplement thereto (A) contains an untrue
statement of a material fact or (B) omits to state a material fact required to
be stated therein or necessary to make the statements therein not false or
misleading, provided in each case that such untrue statement or omission relates
to information furnished by or on behalf of, or pertaining to, Print Data or any
Print Data security holder, (ii) since the date of the filing of any Periodic
Report, no event with respect to Print Data or any Print Data security holder
has occurred which should have been set forth in an amendment or a supplement to
such Periodic Report which has not been set forth in such an amendment or
supplement, and (iii) any contract, agreement, instrument, lease, or license
regarding Print Data required to be filed as an exhibit to any Periodic Report
has been filed as an exhibit to or has been incorporated as an exhibit by
reference into such Periodic Report.
(c) Print Data shall have delivered to Atlantic and the
Atlantic Shareholder at or prior to the Closing such other documents (including
certificates of officers of Print Data) as Atlantic and the Atlantic Shareholder
may reasonably request in order to enable Atlantic and the Atlantic Shareholder
to determine whether the conditions to Print Data's obligations under this
Agreement have been met and otherwise to carry out the provisions of this
Agreement.
(d) All actions, proceedings, instruments, and documents
required by Print Data to carry out this Agreement or incidental thereto and all
other related legal matters shall be subject to the reasonable approval of
counsel to Atlantic and the Atlantic Shareholder, and Print Data shall have
furnished such counsel such documents as such counsel may have reasonably
requested for the purpose of enabling them to pass upon such matters.
(e) At the Closing Date, there shall not be pending any legal
proceeding relating to, or seeking to prohibit or otherwise challenge the
consummation of, the transactions contemplated by this Agreement, or to obtain
substantial damages with respect thereto.
(f) There shall not have been any action taken, or any law,
rule, regulation, order, judgment, or decree proposed, promulgated, enacted,
entered, enforced, or deemed applicable to the transactions contemplated by this
Agreement by any federal, state, local, or other governmental authority or by
any court or other tribunal, including the entry of a preliminary or permanent
injunction, which, in the reasonable judgment of Atlantic or the Atlantic
Shareholder, (i) makes this Agreement or any of the transactions contemplated by
this Agreement illegal, (ii) results in a delay in the ability of Print Data or
Atlantic to consummate any of the transactions contemplated by this Agreement
beyond September 30, 2003, or (iii) otherwise prohibits, restricts, or delays
consummation of the other transactions contemplated by this Agreement or impairs
the contemplated benefits to the Atlantic Shareholder of this Agreement or any
of the transactions contemplated by this Agreement.
(g) The parties to this Agreement shall have obtained at or
prior to the Closing Date all unconditional written approval to this Agreement
and to the execution, delivery, and performance of this Agreement by each of
them of relevant governmental authorities having jurisdiction over Print Data or
Atlantic or the subject matter of this Agreement.
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(h) At or prior to the Closing Date, Print Data shall have
made all filings, and taken all actions, necessary to comply with all reporting
requirements under federal and state securities laws (including without
limitation, applicable "blue-sky" laws with regard to the issuance of Print Data
Common Stock as contemplated by this Agreement) other than the filing of Form D
up to 15 days following the Closing. Without limiting the generality of the
foregoing, any prescribed periods within which a "blue sky" or securities law
administrator may disallow Print Data's notice of reliance on an exemption from
such state's requirements, shall have elapsed at or prior to the Closing Date.
(i) The parties to this Agreement shall have obtained at or
prior to the Closing Date all consents required for the consummation of the
transactions contemplated by this Agreement from any unrelated third party to
any contract, agreement, instrument, lease, license, arrangement, or
understanding to which any of them is a party, or to which any of them or any of
their respective businesses, properties, or assets are subject.
(j) Atlantic and the Atlantic Shareholder shall conduct a due
diligence review of Print Data, including, without limitation, a review of the
Print Data Disclosure Letter and the documents referenced therein delivered
prior to the Closing Date, and same shall be satisfactory in the reasonable
opinion of Atlantic and the Atlantic Shareholder.
SECTION 4.03 OPTIONAL ABANDONMENT. In addition to the provisions of
Section 4.01 and Section 4.02 above, the transactions contemplated by this
Agreement may be abandoned or terminated at or before the Closing
notwithstanding adoption and approval of this Agreement and the transactions
contemplated hereby by the stockholders of the parties hereto:
(a) by mutual agreement of the Boards of Directors of Print
Data and Atlantic;
(b) at the option of Print Data's Board of Directors or
Atlantic's Board of Directors, if the Closing Date shall not have occurred on or
before September 30, 2003;
(c) at the option of Print Data's Board of Directors, if facts
exist which render impossible compliance with one or more of the conditions set
forth in Section 4.01 and such are not waived by Print Data; and
(d) at the option of Atlantic's Board of Directors or by the
election of the Atlantic Shareholder if facts exist which render impossible
compliance with one or more of the conditions set forth in Section 4.02 and such
are not waived by Atlantic.
SECTION 4.04 EFFECT OF ABANDONMENT. If the transactions contemplated by
this Agreement are abandoned or terminated as provided for in this Article IV,
except for Sections 4.01, 4.02, 4.03(a), 4.03(b) and 4.03(c), this Agreement
shall forthwith become wholly void and of no further force or effect without
liability on the part of either party to this Agreement or on the part of any
officer, director, controlling person (if any), employee, counsel, agent, or
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stockholder thereof; provided, however, that nothing in this Section 4.04 shall
release Print Data or Atlantic or any officer, director, controlling person (if
any), employee, counsel, agent, or stockholder thereof from liability for a
willful failure to carry out its respective obligations under this Agreement.
ARTICLE V
INDEMNIFICATION
SECTION 5.01 INDEMNIFICATION. The Historic Print Data Subsidiary and/or
its successors or assigns agrees to indemnify and hold harmless the Atlantic
Shareholder, Atlantic and its officers, directors, employees, counsel, agents,
and stockholders, in each case past, present, or as they may exist at any time
after the date of this Agreement, and each person, if any, who controls,
controlled, or will control any of them within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (the "Indemnitees"), against any and all losses,
liabilities, damages, and expenses whatsoever (which shall include, for all
purposes of this Article V, but not be limited to reasonable counsel fees and
expenses incurred in investigating, preparing, or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation) as and when incurred
arising out of, based upon, or in connection with any breach or alleged breach
of any representation, warranty, covenant, or agreement of Print Data or any
officer or director thereof contained in this Agreement. The foregoing agreement
to indemnify shall be in addition to any liability the Company or Stockholders
may otherwise have, including liabilities arising under this Agreement.
Notwithstanding the foregoing, no claim for damages shall be asserted by the
Indemnitees under this Section 5.01 until the aggregate of all such claims
exceeds the sum of $25,000, in which case the Indemnitees shall be entitled to
the full amount of such damages in excess of $25,000. The Indemnity provided by
this Section shall survive the Closing for a period of Two (2) years.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01 EXPENSES. Whether or not the transactions contemplated in
this Agreement are consummated, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby, will be paid by
the party incurring such expense or as otherwise agreed to herein.
SECTION 6.02 BROKERS AND FINDERS. Each of the parties hereto
represents, as to itself, that no agent, broker, investment banker or firm or
person is or will be entitled to any broker's or finder's fee or any other
commission or similar fee in connection with any of the transactions
contemplated by this Agreement, except as may be otherwise set forth herein or
by separate document.
SECTION 6.03 NECESSARY ACTIONS. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use all reasonable efforts
to take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and
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regulations to consummate and make effective the transactions contemplated by
this Agreement. In the event at any time after the Closing, any further action
is necessary or desirable to carry out the purposes of this Agreement, the
proper executive officers and/or directors of Print Data or Atlantic, as the
case may be, or the relevant Atlantic Shareholder or Atlantic Shareholder will
take all such necessary action.
SECTION 6.04 EXTENSION OF TIME; WAIVERS. At any time prior to the
Closing Date:
(a) Print Data may (i) extend the time for the performance of any of
the obligations or other acts of Atlantic or any Atlantic Shareholder or
Atlantic Shareholder, (ii) waive any inaccuracies in the representations and
warranties of Atlantic or any Atlantic Shareholder or Atlantic Shareholder, or
contained herein or in any document delivered pursuant hereto by Atlantic or any
Atlantic Shareholder or Atlantic Shareholder, and (iii) waive compliance with
any of the agreements or conditions contained herein to be performed by Atlantic
or any Atlantic Shareholder or Atlantic Shareholder. Any agreement on the part
of Print Data to any such extension or waiver will be valid only if set forth in
an instrument, in writing, signed on behalf of Print Data.
(b) Atlantic and the Atlantic Shareholder (by action of the Atlantic
Shareholder), may (i) extend the time for the performance of any of the
obligations or other acts of Print Data, (ii) waive any inaccuracies in the
representations and warranties of Print Data contained herein or in any document
delivered pursuant hereto by Print Data and (iii) waive compliance with any of
the agreements or conditions contained herein to be performed by Print Data. Any
agreement on the part of Atlantic and to any such extension or waiver will be
valid only if set forth in an instrument, in writing, signed on behalf of
Atlantic.
SECTION 6.05 NOTICES. Any notice to any party hereto pursuant to this
Agreement will be in writing and given by Certified or Registered Mail or by
facsimile, addressed as follows:
Print Data Corp. Atlantic Components Limited
00 Xxx Xxxxxxxxx Xxxxxx, X00-X00, 1/F., Block B,
Hopelawn, New Jersey 08861 Proficient Industrial Centre,
USA 0 Xxxx Xxxx Xxxx, Xxxxxxx Bay,
For the attention of Xx. Xxxxxxx X Xxxxx Kowloon, Hong Kong
Fax: (000) 000-0000 For the attention of Xx. Xxxx Xxxx
Fax: (000) 0000-0000
Copy to: Copy to:
Xxxxx X. Xxxx Xxxxxx Xxxxxx Xxxxx
The Xxxxxx Building Reitler Xxxxx LLC
000 Xxxxxxxx Xxxxxx, Xxxxx 000 000 Xxxxx Xxxxxx
Xxxx Xxxx Xxxxx 21st Floor
FL 33410 Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000 Fax: (000) 000-0000
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Additional notices are to be given as to each party, at such other
address as should be designated in writing complying as to delivery with the
terms of this Section 6.05. All such notices will be effective when received.
SECTION 6.06 PARTIES IN INTEREST. This Agreement will inure to the
benefit of and be binding upon the parties hereto and the respective successors
and assigns. Nothing in this Agreement is intended to confer, expressly or by
implication, upon any other person any rights or remedies under or by reason of
this Agreement.
SECTION 6.07 COUNTERPART. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all together will
constitute one document. The delivery by facsimile of an executed counterpart of
this Agreement will be deemed to be an original and will have the full force and
effect of an original executed copy.
SECTION 6.08 SEVERABILITY. The provisions of this Agreement will be
deemed severable and the invalidity or unenforceability of any provision hereof
will not affect the validity or enforceability of any of the other provisions
hereof. If any provisions of this Agreement, or the application thereof to any
person or any circumstance, is illegal, invalid or unenforceable, (a) a suitable
and equitable provision will be substituted therefor in order to carry out, so
far as may be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision, and (b) the remainder of this Agreement and the
application of such provision to other persons or circumstances will not be
affected by such invalidity or unenforceability, nor will such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
SECTION 6.09 HEADINGS. The Article and Section headings are provided
herein for convenience of reference only and do not constitute a part of this
Agreement and will not be deemed to limit or otherwise affect any of the
provisions hereof.
SECTION 6.10 GOVERNING LAW. This Agreement will be deemed to be made in
and in all respects will be interpreted, construed and governed by and in
accordance with the law of the State of Delaware, without regard to the conflict
of law principles thereof.
SECTION 6.11 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All terms,
conditions, representations and warranties set forth in this Agreement or in any
instrument, certificate, opinion, or other writing providing for in it, will
survive the Closing and the delivery of the shares of Print Data Common Stock to
be issued hereunder at the Closing for a period of two years after Closing,
regardless of any investigation made by or on behalf of any of the parties
hereto.
SECTION 7.12 ASSIGNABILITY. This Agreement will not be assignable by
operation of law or otherwise and any attempted assignment of this Agreement in
violation of this subsection will be void ab initio.
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SECTION 7.13 AMENDMENT. This Agreement may be amended with the approval
of the Atlantic Shareholder and the boards of directors of each of Print Data
and Atlantic at any time. This Agreement may not be amended except by an
instrument, in writing, signed on behalf of each of the parties hereto.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement in a manner legally binding upon them as of the date first above
written.
PRINT DATA CORP.
BY /S/ XXXXXXX XXXXX
----------------------------------------
NAME: XXXXXXX X XXXXX
TITLE: PRESIDENT
ATTEST:
/S/ XXXXXXX XXXXX
---------------------------------------
NAME: XXXXXXX XXXXX
TITLE: SECRETARY
ATLANTIC COMPONENTS LIMITED
BY /S/ XXXXX-XXX XXXX
----------------------------------------
NAME: XXXXX-XXX XXXX
TITLE: DIRECTOR
ATTEST:
TAK-WAI XXXXX XXXX
-----------------------------------------
NAME: TAK-WAI XXXXX XXXX
TITLE: DIRECTOR
ATLANTIC SHAREHOLDER:
/S/ XXXXX-XXX XXXX
-------------------------------------------
NAME: XXXXX-XXX XXXX
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement in a manner legally binding upon them as of the date first above
written.
REITLER XXXXX LLC, solely in its capacity as
Escrow Agent with respect to Section 3.04 of
the Agreement
/s/ Reitler Xxxxx
-------------------------------------
NAME: XXXXXX XXXXXXX XXXXX, MEMBER
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