Exhibit 2.1
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
WORLD WASTE TECHNOLOGIES, INC.,
A CALIFORNIA CORPORATION,
ON THE ONE HAND,
AND
VERTEX ENERGY, LP,
A TEXAS LIMITED PARTNERSHIP,
VERTEX ENERGY, INC.,
A NEVADA CORPORATION,
VERTEX MERGER SUB, LLC,
A CALIFORNIA LIMITED LIABILITY COMPANY,
AND
XXX XXXXXX,
AS AGENT FOR ALL OF THE SHAREHOLDERS OF VERTEX,
ON THE OTHER HAND
MAY 19, 2008
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
This AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER, is made and
entered into as of May 19, 2008 (this "AGREEMENT"), by and between World Waste
Technologies, Inc., a California corporation ("WWT"), on the one hand, and
Vertex Energy, LP, a Texas limited partnership ("VERTEX LP"), Vertex Energy,
Inc., a Nevada corporation ("VERTEX NEVADA"), Vertex Merger Sub, LLC, a
California limited liability company and wholly owned subsidiary of Vertex
Nevada ("MERGER SUB"), and Xxx Xxxxxx, as agent ("AGENT") of all of the
shareholders of Vertex Nevada (the "VERTEX SHAREHOLDERS"), on the other hand.
WWT, Vertex LP, Vertex Nevada, Merger Sub and the Agent are collectively
referred to herein as the "PARTIES". Vertex Nevada, Vertex LP, Merger Sub and
the Agent are sometimes referred to herein as the "VERTEX PARTIES." Capitalized
terms used and not otherwise defined herein have the meanings set forth in
Article 1.
The Parties hereto have previously entered into an Agreement and Plan of
Merger dated as of May 15, 2008 (the "Original Agreement"). The Parties now
desire to amend and restate the Original Agreement in its entirety to reflect
various mutually acceptable modifications to the agreement as originally
executed.
RECITALS
WHEREAS, the respective Boards of Directors of WWT, Vertex Nevada and
Merger Sub, and the partners of Vertex LP (the "PARTNERS"), have deemed it in
the best interests of their respective corporations, shareholders and partners
that (i) Vertex LP transfer the Vertex Business to Vertex Nevada (the
"TRANSFER"), and (ii) immediately following the Transfer, that WWT, Vertex
Nevada and Merger Sub enter into a business combination transaction;
WHEREAS, in furtherance thereof, the Partners have approved the Transfer
and the respective Boards of Directors of WWT, Vertex Nevada and Merger Sub each
have approved this Agreement and the merger of WWT with and into Merger Sub(the
"MERGER"), upon the terms and subject to the conditions set forth in this
Agreement and in accordance with the provisions of the California Corporations
Code (the "CCC");
WHEREAS, in connection with the Merger, the Parties desire to make certain
representations, warranties, covenants and agreements and also to prescribe
various conditions to the Merger, upon the terms and subject to the conditions
contained herein.
NOW, THEREFORE, in consideration of the covenants, promises,
representations and warranties set forth herein, and for other good and valuable
consideration, intending to be legally bound hereby, the Parties agree as
follows:
ARTICLE I
DEFINITIONS
1.1 CERTAIN DEFINITIONS. The following terms shall, when used in this
Agreement, have the following meanings:
"AFFILIATE" means, with respect to any Person: (i) any Person directly or
indirectly owning, controlling or holding with power to vote ten percent (10%)
or more of the outstanding voting securities of such other Person (other than
passive or institutional investors); (ii) any Person ten percent (10%) or more
of whose outstanding voting securities are directly or indirectly owned,
controlled or held with power to vote, by such other Person; (iii) any Person
directly or indirectly controlling, controlled by or under common control with
such other Person; and (iv) any officer, director or partner of such other
Person. "Control" for the foregoing purposes shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities or
voting interests, by contract or otherwise.
"AGENT" shall have the meaning set forth in the preamble to this
Agreement.
"AGREEMENT" shall have the meaning set forth in the preamble to this
Agreement.
"ALTERNATIVE ACQUISITION" shall have the meaning set forth in Section 5.14
of this Agreement.
"BENEFIT ARRANGEMENT" means any employment, consulting, severance or other
similar contract, plan, arrangement or policy, and each plan, arrangement
(written or oral), program, agreement or commitment providing for insurance
coverage (including any self-insured arrangements), workers' compensation,
disability benefits, supplemental unemployment benefits, vacation benefits,
retirement benefits, life, health, disability or accident benefits or for
deferred compensation, profit-sharing bonuses, stock options, stock purchases or
other forms of incentive compensation or post-retirement insurance, compensation
or benefits which is not a Welfare Plan, Pension Plan or Multiemployer Plan.
"BUSINESS DAY" means any day other than Saturday, Sunday or a day on which
banking institutions in California or Nevada are required or authorized to be
closed.
"CCC" shall have the meaning set forth in the recitals of this Agreement.
"CERTIFICATE OF MERGER" shall have the meaning set forth in Section 2.3 of
this Agreement.
"CLAIM" shall have the meaning set forth in Section 7.3 of this Agreement.
"CLAIM NOTICE" shall have the meaning set forth in Section 7.3 of this
Agreement.
"CLOSING" shall have the meaning set forth in Section 2.2 of this
Agreement.
"CLOSING DATE" shall have the meaning set forth in Section 2.2 of this
Agreement.
"CMT AGREEMENTS" shall have the meaning set forth in Section 5.23 of this
Agreement
"CODE" means the United States Internal Revenue Code of 1986, as amended.
"COLLATERAL DOCUMENTS" mean the Xxxxxx Employment Agreement, the Vertex
Disclosure Schedules, the WWT Disclosure Schedules, all of the Exhibits to this
Agreement, and any other documents, instruments and certificates to be executed
and delivered by the Parties hereunder or thereunder.
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"CONTRACT" means any agreement, contract, note, loan, evidence of
indebtedness, purchase order, letter of credit, indenture, security or pledge
agreement, covenant not to compete, license, instrument, commitment, obligation,
promise or undertaking (whether written or oral and whether express or implied).
"XXXXXX EMPLOYMENT AGREEMENT" shall have the meaning set forth in Section
5.1 of this Agreement.
"XXXXXX GUARANTEES" shall have the meaning set forth in Section 5.2 of
this Agreement.
"DISSENTING SHARES" shall have the meaning set forth in Section 2.14 of
this Agreement.
"EFFECTIVE DATE" shall have the meaning set forth in Section 2.3 of this
Agreement.
"EFFECTIVE TIME" shall have the meaning set forth in Section 2.3 of this
Agreement.
"EMPLOYEE PLANS" means all Benefit Arrangements, Pension Plans and Welfare
Plans.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" means any trade or business, whether or not
incorporated, that together with Vertex LP or WWT, as applicable, would be
deemed a single employer for purposes of Section 4001 of ERISA or Sections
414(b), (c), (m), (n) or (o) of the Code.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations there under.
"FAMILY MEMBER" means, with respect to any individual (i) the individual,
(ii) the individual's spouse, (iii) any other natural Person who is related to
the individual or the individual's spouse within the second degree (including
adopted children) and (iv) any other natural Person who resides with such
individual.
"GAAP" means U.S. generally accepted accounting principles consistently
applied, as in effect from time to time.
"INDEMNIFICATION AGREEMENTS" means those certain director and officer
indemnification agreements by and between WWT and its officers and directors.
"INDEPENDENT DIRECTOR" means any individual who does not beneficially own
more than 5% of the outstanding voting shares of Vertex Nevada, is not employed
by, or an officer of, Vertex Nevada or any Xxxxxx Party, is not a director or
manager of any Xxxxxx Party, is not a family member of Xxx Xxxxxx, and would
qualify as an "Independent Director" as defined in the rules and regulations of
the New York Stock Exchange.
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"INTELLECTUAL PROPERTY" means all trademarks and trademark rights, trade
names and trade name rights, service marks and service xxxx rights, service
names and service name rights, patents and patent rights, utility models and
utility model rights, copyrights, mask work rights, brand names, trade dress,
product designs, product packaging, business and product names, logos, slogans,
rights of publicity, trade secrets, inventions (whether patentable or not),
invention disclosures, improvements, processes, formulae, industrial models,
processes, designs, specifications, technology, methodologies, computer software
(including all source code and object code), firmware, development tools, flow
charts, annotations, all Web addresses, sites and domain names, all data bases
and data collections and all rights therein, any other confidential and
proprietary right or information, whether or not subject to statutory
registration, and all related technical information, the information set forth
in manufacturing, engineering and technical drawings, know-how and all pending
applications for and registrations of patents, utility models, trademarks,
service marks and copyrights, and the right to xxx for past infringement, if
any, in connection with any of the foregoing.
"LAWS" means any statute, ordinance, law, rule, regulation, code,
injunction, judgment, order, decree, ruling, or other requirement enacted,
adopted or applied by any Regulatory Authority, including judicial decisions
applying common law or interpreting any other Law.
"LEGAL PROCEEDING" means any action, arbitration, audit, hearing,
investigation, litigation or suit (whether civil, criminal, administrative,
investigative or informal) commenced, brought, conducted or heard by or before,
or otherwise involving, any Regulatory Authority or arbitrator.
"LIABILITIES" means any direct or indirect liability, indebtedness,
obligation, commitment, expense, claim, deficiency, guaranty or endorsement of
or by any Person of any type, whether known or unknown, accrued, absolute,
contingent, matured, unmatured, liquidated or unliquidated or otherwise.
"LIEN" means any mortgage, pledge, lien, encumbrance, charge, security
interest, security agreement, conditional sale or other title retention
agreement, limitation, option, assessment, restrictive agreement, restriction,
adverse interest, restriction on transfer or exception to or material defect in
title or other ownership interest (including but not limited to restrictive
covenants, leases and licenses).
"LOSSES" means any claim, liability, obligation, loss, damage, assessment,
penalty, judgment, settlement, cost and expense, including costs attributable to
the loss of the use of funds to the date on which a payment is made with respect
to a matter of indemnification under Article 7 hereof, and including reasonable
attorneys' and accountants' fees and disbursements incurred in investigating,
preparing, defending against or prosecuting any claim.
"MAKE-WHOLE WARRANTS" shall have the same meaning set forth in Section
6.1(i) of this Agreement.
"MATERIAL ADVERSE EFFECT" or "MATERIAL ADVERSE CHANGE" with respect to a
Person means a material adverse effect on (i) the assets, liabilities, condition
(financial or otherwise), properties, business or prospectus of such Person,
(ii) the validity, binding effect or enforceability of this Agreement or any of
the Collateral Documents against such Person or (iii) the ability of such Person
to perform its obligations under this Agreement or any of the Collateral
Documents.
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"MERGER" shall have the meaning set forth in the recitals of this
Agreement.
"MERGER CONSIDERATION" shall have the meaning set forth in Section 2.6 of
this Agreement.
"MERGER SUB" shall have the meaning set forth in the preamble to this
Agreement.
"MULTIEMPLOYER PLAN" means any "multiemployer plan" as defined in Section
3(37) of ERISA.
"ORDER" means any writ, judgment, decree, ruling, injunction or similar
order of any Regulatory Authority (in each such case whether preliminary or
final).
"ORDINARY COURSE OF BUSINESS" or "ORDINARY COURSE" or any similar phrase
means the usual and ordinary course of business of a Party, consistent with its
past custom and practice.
"ORGANIZATIONAL DOCUMENTS" shall mean (a) the articles or certificate of
incorporation, all certificates of determination and designation, and the bylaws
of a corporation; (b) the partnership agreement and any statement of partnership
of a general partnership; (c) the limited partnership agreement and the
certificate or articles of limited partnership of a limited partnership; (d) the
operating agreement, limited liability company agreement and the certificate or
articles of organization or formation of a limited liability company; (e) any
charter or similar document adopted or filed in connection with the creation,
formation or organization of any other Person; and (f) any amendment to any of
the foregoing.
"PARTNERS" shall have the meaning set forth in the recitals of this
Agreement.
"PARTY" or "PARTIES" shall have the meaning set forth in the preamble to
this Agreement.
"PENSION PLAN" means any "employee pension benefit plan" as defined in
Section 3(2) of ERISA (other than a Multiemployer Plan) which a Person or any
ERISA Affiliate maintains, administers, contributes to or is required to
contribute to, or has maintained, administered, contributed to or was required
to contribute to, or under which such Person or any ERISA Affiliate may incur
any liability.
"PERMIT" means any license, franchise, certificate, declaration, waiver,
exemption, variance, permit, consent, approval, registration, authorization,
qualification or similar right granted by a Regulatory Authority.
"PERSON" means any natural person, individual, firm, corporation,
including a non-profit corporation, partnership, trust, unincorporated
organization, association, limited liability company, labor union, Regulatory
Authority or other entity.
"PROXY STATEMENT" shall have the meaning set forth in Section 5.5 of this
Agreement.
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"QUALIFIED FINANCING" means an equity financing generating gross proceeds
to WWT Sub of at least $500,000, at a pre-money valuation in an amount equal to
no less than the total amount of cash on hand of WWT Sub as of the Closing.
"REGULATORY AUTHORITY" means: any (i) federal, state, local, municipal or
foreign government; (ii) governmental or quasi-governmental authority of any
nature (including without limitation any governmental agency, branch,
department, official, instrumentality or entity and any court or other
tribunal); (iii) multi-national organization or body; or (iv) body exercising or
entitled to exercise any administrative, executive, judicial, legislative,
police, regulation or taxing authority or power of any nature.
"REPRESENTATIVES" shall have the meaning set forth in Section 5.14 of this
Agreement.
"SEC" means the Securities and Exchange Commission or any Regulatory
Authority that succeeds to its functions.
"SEC REPORTS" has the meaning set forth in the preamble to Article 4.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"SUBSIDIARY" has the meaning set forth in Section 3.1.
"SURVIVING CORPORATION" shall have the meaning set forth in Section 2.1 of
this Agreement.
"TAX RETURNS" means all federal, state, local, provincial and foreign tax
returns, declarations, reports, claims, schedules and forms for refund or credit
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"TAXES" means any U.S. or non U.S. federal, state, provincial, local or
foreign (i) income, corporation gross income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental, customs duties, capital, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, intangible property, recording, occupancy, sales, use, transfer,
registration, value added minimum, ad valorem or excise tax, estimated or other
tax of any kind whatsoever, including any interest, additions to tax, penalties,
fees, deficiencies, assessments, additions or other charges of any nature with
respect thereto, whether disputed or not; and (ii) any liability for the payment
of any amount of the type described in (i) above.
"TRANSACTIONS" has the meaning set forth in Section 3.2.
"TRANSFER" shall have the meaning set forth in the recitals of this
Agreement.
"TRANSMITTAL LETTER" has the meaning set forth in Section 2.7 of this
Agreement.
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"TREASURY REGULATIONS" means regulations promulgated by the U.S. Treasury
Department under the Code.
"VERTEX LP" has the meaning set forth in the preamble to this Agreement.
"VERTEX NEVADA" has the meaning set forth in the preamble to this
Agreement.
"VERTEX BUSINESS" means each of the following businesses owned by Vertex
LP: (i) the business of aggregating waste oil from third-party collectors and
managing the transportation logistics of delivering the waste oil to a
Chevron-Texaco refining facility in Louisiana; revenue from this business is
generated from payments made by Chevron-Texaco to Vertex LP under an existing
contract and is based on the volume, quality and price of the used oil feedstock
delivered to the Louisiana facility; (ii) the business of aggregating petroleum
waste streams from third-party collectors and managing the transportation
logistics of delivering the waste petroleum products to a Kmtex-owned facility
in Texas; in addition to the petroleum waste stream feedstock, this business
sources a second feedstock stream directly from a major chemical company.
Revenue is generated by selling end products such as pygas, gasoline blendstock
and marine diesel oil made at the Kmtex facility under a contract refining
agreement with Vertex LP utilizing the two streams of feedstock; and (iii) the
business of implementing proprietary re-refining technology owned by Vertex LP.;
the re-refining technology allows this business to take aggregated waste oil
(similar to what is currently delivered to the Chevron-Texaco facility) and
convert it to higher value products such as marine diesel oil and vacuum gas
oil; revenue for this business area will be generated from the sale of the
re-refined marine diesel oil and vacuum gas oil.
For the sake of clarification, the Vertex Business does not include the
businesses conducted by any of the Subsidiaries of Vertex LP.
"VERTEX CAPITAL STOCK" means, collectively, the Vertex Common Stock and
Vertex Preferred Stock.
"VERTEX COMMON STOCK" means shares of Vertex Nevada's common stock, par
value $0.001 per share.
"VERTEX CONTRACT" has the meaning set forth in Section 3.11 of this
Agreement.
"VERTEX FINANCIAL STATEMENTS" means the audited Consolidated Balance
Sheets of Vertex Nevada as of December 31, 2007, 2006 and 2005, and the audited
Consolidated Statements of Operations and Statements of Stockholders' Equity for
the periods then ended, in each case after taking into account the Transfer.
"VERTEX LP" has the meaning set forth in the preamble to this Agreement.
"VERTEX LOCK-UP" has the meaning set forth in Section 5.19 of this
Agreement.
"VERTEX NEVADA" has the meaning set forth in the preamble to this
Agreement.
"VERTEX PARTIES" shall have the meaning set forth in the preamble to this
Agreement.
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"VERTEX PREFERRED STOCK" means, collectively, the Vertex Series A
Preferred Stock and the Vertex Series B Preferred Stock.
"VERTEX SERIES A PREFERRED STOCK" means the newly created Series A
Preferred Stock, par value $0.001 per share, of Vertex Nevada, established and
issued in connection with the transactions contemplated by this Agreement.
"VERTEX SERIES B PREFERRED STOCK" means the Series B Preferred Stock, par
value $0.001 per share, of Vertex Nevada, with the terms and conditions as are
set forth on EXHIBIT A-2 hereto.
"VERTEX SHAREHOLDERS" has the meaning set forth in the preamble to this
Agreement.
"WELFARE PLAN" means any "employee welfare benefit plan" as defined in
Section 3(1) of ERISA which a Person or any ERISA Affiliate maintains,
administers, contributes to or is required to contribute to, or under which such
Person or any ERISA Affiliate may incur any Liability.
"WWT" has the meaning set forth in the preamble to this Agreement.
"WWT CAPITAL STOCK" means, collectively, the WWT Common Stock and WWT
Preferred Stock.
"WWT CERTIFICATE(S)" has the meaning set forth in Section 2.7 of this
Agreement.
"WWT COMMON STOCK" means shares of WWT's common stock, par value 0.001 per
share.
"WWT CONTRACT" has the meaning set forth in Section 4.10 of this
Agreement.
"WWT FINANCIAL STATEMENTS" means the audited Consolidated Balance Sheets
of WWT as of December 31, 2007 and 2006, and the audited Consolidated Statements
of Operations and Statement of Stockholders' Equity for each of the three years
in the period ended December 31, 2007.
"WWT OPTIONS" has the meaning set forth in SECTION 2.6(C) of this
Agreement.
"WWT PREFERRED STOCK" means, collectively, the WWT Series A Preferred
Stock and WWT Series B Preferred Stock.
"WWT SERIES A PREFERRED STOCK" means shares of WWT's 8% Series A
Cumulative Redeemable Convertible Participating Preferred Stock, par value 0.001
per share.
"WWT SERIES B PREFERRED STOCK" means shares of WWT's 8% Series B
Cumulative Redeemable Convertible Participating Preferred Stock, par value 0.001
per share.
"WWT MANAGEMENT AGREEMENT" shall have the meaning set forth in Section 5.6
of this Agreement.
"WWT MANAGEMENT" shall have the meaning set forth in Section 5.6 of this
Agreement.
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ARTICLE II
THE MERGER
2.1 MERGER. Upon the terms and conditions set forth in this Agreement,
and in accordance with the provisions of the CCC, at the Effective Time, (i) WWT
shall be merged with and into Merger Sub, (ii) the separate corporate existence
of WWT shall cease, (iii) Merger Sub, as the surviving company in the Merger,
shall continue its existence under the laws of the State of California as a
limited liability company, and (iv) Merger Sub shall succeed to and assume the
rights, obligations, properties, rights, privileges, powers and franchises of
WWT. Merger Sub, as the surviving limited liability company after the Merger, is
sometimes referred to herein as the "SURVIVING CORPORATION."
2.2 CLOSING. Subject to the terms and conditions of this Agreement, the
closing of the Merger (the "Closing") will take place at the offices of
TroyGould Professional Corporation located at 0000 Xxxxxxx Xxxx Xxxx, 00xx
Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, or at such other place as the Parties
mutually agree, at 10:00 a.m. local time on the second Business Day after the
day on which the last of the closing conditions set forth in Article 6 below has
been satisfied or waived, or such other date as the Parties mutually agree upon
in writing (the "CLOSING DATE").
2.3 EFFECTIVE TIME. Upon the terms of and subject to the conditions of
this Agreement, as soon as practicable on the Closing Date: (a) the Parties will
cause the Merger to be consummated by filing with the Secretary of State of the
State of California a certificate of merger (the "CERTIFICATE OF MERGER"),
together with any required related certificates, and shall make any other
filings or recordings required under the CCC. The Merger shall become effective
upon such filing, or at such later date and time as is agreed to by the Parties
and set forth in the Certificate of Merger (the date and time of such filing
being the "EFFECTIVE TIME" and the date upon which the Effective Time occurs,
being the "EFFECTIVE DATE"). As soon as practicable on the Closing Date, Vertex
Nevada will deliver the Merger Consideration to the holders of WWT Common Stock
and WWT Preferred Stock in accordance with Section 2.6 hereof.
2.4 EFFECT OF THE MERGER. At the Effective Time, in accordance with the
CCC, the separate existence of WWT will cease and the Surviving Corporation
shall succeed, without further action, to all the property, assets, rights,
privileges, powers and franchises of every kind of the nature and description of
Merger Sub and WWT. All debts, liabilities and duties of Merger Sub and WWT will
become the debts, liabilities and duties of the Surviving Corporation. The
Parties acknowledge that as a condition to the closing of the transactions
contemplated hereby and in accordance with Section 5.6, all Liabilities of WWT
(other than up to $2.4 million of indebtedness) shall, immediately prior to the
Effective Time, be satisfied in full. As of the Effective Time, the Surviving
Corporation will be a single member limited liability company wholly owned by
Vertex Nevada.
2.5 EFFECT OF MERGER ON OWNERSHIP INTERESTS OF MERGER SUB. At the
Effective Time, the ownership interests of Merger Sub issued and outstanding
immediately prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into and
become ownership interests of the Surviving Corporation.
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2.6 EFFECT OF MERGER ON CAPITAL STOCK OF WWT.
(a) WWT COMMON STOCK. At the Effective Time, each issued and
outstanding share of the WWT Common Stock shall, by virtue of the Merger and
without any action on the part of the holders thereof, be converted into the
right to receive one share of Vertex Common Stock.
(b) WWT SERIES A PREFERRED STOCK AND WWT SERIES B PREFERRED STOCK.
At the Effective Time, (i) each issued and outstanding share of WWT Series A
Preferred Stock shall by virtue of the Merger and without any action on the part
of the holders thereof, be converted into the right to receive 4.062 shares of
Vertex Series A Preferred Stock; and (ii) each issued and outstanding share of
WWT Series B Preferred Stock shall by virtue of the Merger and without any
action on the part of the holders thereof, be converted into the right to
receive 116.51 shares of Vertex Series A Preferred Stock, in each case subject
to the terms and conditions of this Agreement. The shares of Vertex Common Stock
and Vertex Series A Preferred Stock issuable pursuant to Section 2.6(a) and this
Section 2.6(b) are collectively referred to herein as the "MERGER
CONSIDERATION." The terms of the Vertex Series A Preferred Stock issuable
hereunder shall have substantially the terms and conditions as are set forth on
EXHIBIT A-1 hereto.
(c) OUTSTANDING WWT OPTIONS AND WARRANTS. At the Effective Time,
each outstanding option and warrant to acquire shares of WWT Common Stock (the
"WWT OPTIONS") shall automatically become an option or warrant to acquire an
equivalent number of shares of Vertex Common Stock.
(d) WWT CAPITAL STOCK. As a result of the Merger and without any
action on the part of the holders thereof, at the Effective Time, all shares of
WWT Capital Stock shall be cancelled and retired and shall cease to be
outstanding. Each holder of shares of the WWT Capital Stock shall thereafter
cease to have any rights with respect to such shares, except that the issued and
outstanding shares of WWT Capital Stock immediately prior to the Effective Time,
and the respective holders thereof, shall have the right to receive the Merger
Consideration in accordance with this Section 2.6 upon the surrender of the
certificate or certificates representing such shares.
(e) TREASURY STOCK. Each share of WWT Common Stock held in Vertex
Nevada's treasury at the Effective Time, if any, shall, by virtue of the Merger
and without any action on the part of WWT, cease to be outstanding and shall be
cancelled and retired without payment of any Merger Consideration or any other
consideration therefor.
2.7 DELIVERY OF WWT CERTIFICATES AND EXCHANGE PROCEDURES. At and after
the Effective Time, Vertex Nevada will make available, and each holder of an
issued and outstanding share of WWT Common Stock and WWT Preferred Stock will be
entitled to receive, upon surrender to Vertex Nevada or the Agent of any
certificates evidencing such WWT Capital Stock (the "WWT CERTIFICATES") for
cancellation and a letter of transmittal or assignment separate from certificate
in customary form (the "TRANSMITTAL LETTER"), the portion of the Merger
Consideration into which such shares of WWT Capital Stock have been converted
into pursuant to the Merger, and upon such surrender of each such WWT
Certificate, and delivery by Vertex Nevada of the aggregate Merger Consideration
in exchange therefor, the WWT Common Stock and WWT Preferred Stock evidenced by
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the WWT Certificates so surrendered in accordance herewith shall forthwith be
cancelled. Until surrendered or delivered as contemplated by this Section 2.7,
each WWT Certificate will be deemed at any time after the Effective Time for all
purposes to evidence only the right to receive upon such surrender the
corresponding pro rata portion of the Merger Consideration; PROVIDED, HOWEVER,
that Vertex Nevada shall be under no obligation to deliver the Merger
Consideration, and no holder of an issued and outstanding share of WWT Common
Stock or WWT Preferred Stock shall be obligated to surrender a WWT Certificate,
as contemplated herein, until and unless of the conditions and covenants set
forth in Article 6 hereof shall have been performed, complied with, or otherwise
waived in accordance with the provisions of Article 6.
2.8 STOCK TRANSFER BOOKS. From and after the Effective Time, the stock
transfer books of WWT will be closed, and there will be no further registration
or transfers of WWT Common Stock or WWT Preferred Stock thereafter on the
records of WWT.
2.9 NO FURTHER OWNERSHIP RIGHTS. The Merger Consideration delivered upon
the surrender for exchange of the WWT Certificates in accordance with the terms
hereof will be deemed to have been issued in full satisfaction of all rights
pertaining to the WWT Common Stock and WWT Preferred Stock evidenced by such WWT
Certificates, and there will be no further registration of transfers of such
shares which were outstanding immediately prior to the Effective Time on the
records of the Surviving Corporation. If, after the Effective Time, WWT
Certificates are presented to the Surviving Corporation, they will be cancelled
as contemplated herein.
2.10 LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any WWT
Certificates are lost, stolen or destroyed, Vertex Nevada will issue in exchange
for such lost, stolen or destroyed WWT Certificates, upon the making of an
affidavit of that fact by the holder thereof and the other deliveries required
above, the applicable Merger Consideration; PROVIDED, HOWEVER, that the
Surviving Corporation may, in its sole discretion and as a condition precedent
to the issuance thereof, require the holder of such lost, stolen or destroyed
WWT Certificates to deliver an indemnity or bond in such sum as it may
reasonably direct as indemnity against any claim that may be made against it
with respect to the WWT Certificates alleged to have been lost, stolen or
destroyed.
2.11 CHARTER DOCUMENTS; DIRECTORS AND OFFICERS. Unless otherwise agreed
by Vertex Nevada and WWT prior to the Closing, at and as of the Effective Time,
without any further action on the part of the Parties: (i) the Organizational
Documents of Merger Sub as in effect immediately prior to the Effective Time
will be the Organizational Documents of the Surviving Corporation at and after
the Effective Time until thereafter amended as provided by applicable law and
such Organizational Documents; (ii) the manager of Merger Sub immediately prior
to the Effective Time will be the initial manager of the Surviving Corporation
from and after the Effective Time, until its successor is appointed and
qualified or until its resignation or removal; (iii) the officers of Merger Sub
immediately prior to the Effective Time shall serve in their respective offices
of the Surviving Corporation from and after the Effective Time, until their
successors are elected or appointed and qualified or until their resignation or
removal.
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2.12 NO FRACTIONAL SHARES. No certificate or scrip representing
fractional shares of Vertex Capital Stock shall be issued upon the surrender of
WWT Certificates. In lieu thereof, each holder of WWT Capital Stock who would
otherwise be entitled to a fraction of a share of Vertex Capital Stock (after
aggregating all shares of WWT Capital Stock that otherwise would be received by
such holder), shall receive one additional share of Vertex Common Stock or
Vertex Preferred Stock, as applicable.
2.13 TAKING OF NECESSARY ACTION; FURTHER ACTION. Each of the Parties will
take all such reasonable lawful action as may be necessary or appropriate in
order to effect the Merger in accordance with this Agreement as promptly as
practicable. If, at any time after the Effective Time, any such further action
is necessary or desirable to carry out the purposes of this Agreement and to
vest the Surviving Corporation with full right, title and possession to all the
property, rights, privileges, power and franchises of WWT and Merger Sub, the
officers, directors and managers of WWT and Merger Sub immediately prior to the
Effective Time are fully authorized in the name of their respective corporations
or otherwise to take, and will take, all such lawful and necessary action.
2.14 WWT DISSENTING SHARES. Shares of WWT Common Stock and WWT Preferred
Stock which are issued and outstanding immediately prior to the Effective Time
and which are held by persons who are entitled to and have properly exercised,
and not withdrawn or waived, appraisal rights with respect thereto in accordance
with the CCC (the "DISSENTING SHARES"), will not be converted into the right to
receive the Merger Consideration, and holders of such shares of WWT Common Stock
and WWT Preferred Stock will be entitled, in lieu thereof, to receive payment of
the appraised value of such shares in accordance with the provisions of the CCC
unless and until such holders fail to perfect or effectively withdraw or lose
their rights to appraisal and payment under the CCC. If, after the Effective
Time, any such holder fails to perfect or effectively withdraws or loses such
right, such shares of WWT Common Stock and WWT Preferred Stock will thereupon be
treated as if they had been converted at the Effective Time into the right to
receive the Merger Consideration, without any interest thereon.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF VERTEX PARTIES
Each Vertex Party, jointly and severally, represents and warrants to WWT
that the statements contained in this Article 3 are true, complete and correct
as of the date of this Agreement and will be correct and complete as of the
Closing Date (and as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Article 3, except in
the case of representations and warranties stated to be made as of the date of
this Agreement or as of another date and except for changes contemplated or
permitted by this Agreement); except as the same may be qualified or limited by
the Vertex Disclosure Schedules attached hereto:
3.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(a) Each of Vertex LP, Vertex Nevada and Merger Sub is duly
organized, validly existing and in good standing under the Laws of the
jurisdiction in which it is organized and has the requisite power and authority
to carry on the Vertex Business, which such jurisdictions are set forth on
SCHEDULE 3.1(A) of the Vertex Disclosure Schedules.
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(b) Each of Vertex LP, Vertex Nevada and Merger Sub is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of the Vertex Business or the ownership or
leasing of its properties makes such qualification or licensing necessary, other
than in such jurisdictions where the failure to be so qualified or licensed
(individually or in the aggregate) has not had and would not reasonably be
expected to have a Material Adverse Effect on Vertex Nevada or, with respect to
the Vertex Business, on Vertex LP.
(c) Vertex Nevada has delivered to WWT complete and correct copies
of its Organizational Documents and the same for Merger Sub, in each case as
amended to the date hereof. The Organizational Documents of Vertex Nevada are
attached hereto as EXHIBIT B. All of the outstanding shares of capital stock or
other ownership interests of Vertex Nevada have been validly issued and are
fully paid and nonassessable and are owned of record and beneficially by the
Persons set forth on SCHEDULE 3.1(C)-1 of the Vertex Disclosure Schedules, in
each case free and clear of all Liens, and free of any restriction on the right
to vote, sell or otherwise dispose of such capital stock or other ownership
interests, except for restrictions imposed by applicable securities Laws and
except for restrictions on sale contained in the certificate of incorporation of
Vertex Nevada. Immediately prior to the Closing, the outstanding shares of
capital stock of Vertex Nevada will be owned of record and beneficially by the
Persons set forth on SECTION 3.1(C)-2 of the Vertex Disclosure Schedules.
(d) Vertex Nevada does not own, directly or indirectly, any
capital stock or other ownership interest in any corporation, partnership, joint
venture or other entity, other than Merger Sub. One hundred percent (100%) of
the ownership interests of Merger Sub is owned by Vertex Nevada.
(e) Vertex Nevada has no Subsidiaries, other than Merger Sub.
Vertex LP has no Subsidiaries, other than as set forth on SCHEDULE 3.1(E) of the
Vertex Disclosure Schedules. As used in this Agreement, the term "Subsidiary",
with respect to any Person, means any corporation or other legal entity of which
such Person controls (either alone or through or together with any other
Subsidiary), directly or indirectly, more than 50% of the capital stock or other
ownership interests the holders of which are generally entitled to vote for the
election of the Board of Directors or other governing body of such corporation
or other legal entity.
3.2 AUTHORIZATION; ENFORCEABILITY. Each Vertex Party has the requisite
power and authority, and has taken all action necessary, to execute, deliver and
perform its or his obligations under this Agreement and any Collateral Documents
to which it or he is or will be a party and each other agreement, document,
instrument or certificate contemplated by this Agreement and/or any Collateral
Documents or to be executed by such Vertex Party in connection with the
consummation of the transactions contemplated by this Agreement (including but
not limited to the Transfer) (the "TRANSACTIONS"), and to consummate the
Transactions. The execution and delivery by each Vertex Party of this Agreement
and any applicable Collateral Documents to which it or he is a party, and the
consummation by such Vertex Party of the Transactions contemplated hereby and
thereby, and the performance by such Vertex Party of its or his respective
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obligations hereunder and thereunder, have been duly and validly authorized by
all necessary corporate or other action on the part of such Vertex Party, and no
other action on the part of such Vertex Party is required to authorize the
execution, delivery and performance of this Agreement and the consummation by
such Vertex Party of the Transactions. This Agreement has been duly and validly
executed and delivered by each Vertex Party and constitutes a legal, valid and
binding obligation of each such Vertex Party enforceable against such Vertex
Party in accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, moratorium, reorganization and other similar laws
affecting creditors' rights generally and the general principles of equity,
regardless of whether asserted in a proceeding in equity or at law.
3.3 CAPITALIZATION.
(a) The authorized capital stock of Vertex Nevada as of the date
of this Agreement consists of 750 million shares of Vertex Common Stock, and 50
million shares of Vertex Preferred Stock. Immediately prior to the Effective
Time (but prior to the issuance of the Merger Consideration), there will be (i)
61,770,000 shares of Vertex Common Stock, 100 shares of Vertex Series B
Preferred Stock and 0 shares of Vertex Series A Preferred Stock, issued and
outstanding, all of which shares shall be owned in the amounts and by the
holders set forth on SECTION 3.1(C)-2 of the Vertex Disclosure Schedule; (ii) no
shares of Vertex Common Stock held in the treasury of Vertex; (iii) 6,000,000
shares of Vertex Common Stock reserved for future issuance pursuant to the
exercise of outstanding options; and (iv) a sufficient number of shares of
Vertex Common Stock reserved for future issuance pursuant to the exercise of the
Make-Whole Warrants and the WWT Options. Except as described above, as of the
Effective Time, there will be no shares of voting or non-voting capital stock,
equity interests or other securities of Vertex Nevada authorized, issued,
reserved for issuance or otherwise outstanding.
(b) As of the Effective Time, all outstanding shares of Vertex
Capital Stock will be duly authorized, validly issued, fully paid and
non-assessable, and will not be subject to, or issued in violation of, any
preemptive, subscription or any kind of similar rights. Vertex Nevada has no
outstanding shares of Vertex Capital Stock subject to a right of repurchase that
will survive the Merger.
(c) There are no bonds, debentures, notes or other indebtedness of
either Vertex LP or Vertex Nevada having the right to vote (or convertible into
securities having the right to vote) on any matters on which partners of Vertex
LP or stockholders of Vertex Nevada may vote. Except as set forth on SCHEDULE
3.3(C) of the Vertex Disclosure Schedules, there are no outstanding securities,
options, warrants, calls, rights, commitments, agreements, arrangements or
undertakings of any kind (contingent or otherwise) to which any Vertex Party is
a party or bound obligating any such Vertex Party to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock or
other voting securities of any Vertex Party or obligating any Vertex Party to
issue, grant, extend or enter into any agreement to issue, grant or extend any
security, option, warrant, call, right, commitment, agreement, arrangement or
undertaking. No Vertex Party is subject to any obligation or requirement to
provide funds for or to make any investment (in the form of a loan or capital
contribution) in any Person.
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(d) All of the issued and outstanding partnership interests of
Vertex LP have been issued in compliance in all material respects with all
applicable federal and state securities Laws. As of the Effective Time, all of
the issued and outstanding shares of Vertex Capital Stock will have been issued
in compliance in all material respects with all applicable federal and state
securities Laws.
(e) Except as set forth on SCHEDULE 3.3(E) of the Vertex
Disclosure Schedules, there are no outstanding contractual obligations of any
Vertex Party to repurchase, redeem or otherwise acquire any shares of capital
stock (or options or warrants to acquire any such shares) or other security or
equity interests of any Vertex Party. Except as set forth on SCHEDULE 3.3(E) of
the Vertex Disclosure Schedules, there are no stock-appreciation rights,
security-based performance units, phantom stock or other security rights or
other agreements, arrangements or commitments of any character (contingent or
otherwise) pursuant to which any Person is or may be entitled to receive any
payment or other value based on the revenues, earnings or financial performance,
stock price performance or other attribute of any Vertex Party or to cause any
Vertex Party to file a registration statement under the Securities Act, or which
otherwise relate to the registration of any securities of any Vertex Party.
(f) Except as set forth on SCHEDULE 3.3(F) of the Vertex
Disclosure Schedules, there are no voting trusts, proxies or other agreements,
commitments or understandings to which any Vertex Party or, to the knowledge of
any Vertex Party , any of the stockholders or partners of any Vertex Party, is a
party or by which any of them is bound with respect to the issuance, holding,
acquisition, voting or disposition of any shares of capital stock or other
security or equity interest of any Vertex Party.
3.4 NON-CONTRAVENTION. Except as set forth on SCHEDULE 3.4 of the Vertex
Disclosure Schedules, the execution, delivery and performance by the Vertex
Parties of this Agreement or any applicable Collateral Document or the
consummation by the Vertex Parties of the Transactions does not, and the
consummation of the Transactions will not, (a) contravene, conflict with, or
result in any violation or breach of any provision of the Organizational
Documents of any of the Vertex Parties, (b) contravene, conflict with, or result
in a violation or breach of any provision of any Law applicable to the Vertex
Business, (c) require any consent or other action by any Person under,
constitute a breach of or default under, or cause or permit the termination,
cancellation, acceleration or other change of any right or obligation or the
loss of any benefit to which any Vertex Party is entitled under any provision of
any agreement or other instrument binding upon any Vertex Party or any license,
franchise, permit, certificate, approval or other similar authorization
affecting, or relating in any way to, the Vertex Business or (d) result in the
creation or imposition of any Lien on any asset of any Vertex Party, which in
the case of clauses (b) or (d) above would have a Material Adverse Effect on
Vertex Nevada or, with respect to the Vertex Business, on Vertex LP.
3.5 CONSENTS AND APPROVALS. Except as set forth on SCHEDULE 3.5 of the
Vertex Disclosure Schedules, no consent, approval, authorization or order of,
registration or filing with, or notice to, any Regulatory Authority or any other
Person is necessary to be obtained, made or given by any of the Vertex Parties
in connection with the execution, delivery and performance by the Vertex Parties
of this Agreement or any applicable Collateral Document or for the consummation
by the Vertex Parties of the Transactions, except to the extent the failure to
obtain any such consent, approval, authorization or order or to make any such
registration or filing would not have a Material Adverse Effect on Vertex Nevada
or, with respect to the Vertex Business, on Vertex LP.
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3.6 BOOKS AND RECORDS. Each of Vertex LP and Vertex Nevada has made and
kept books and records and accounts, which, in reasonable detail, accurately and
fairly reflect the activities of such Person. Neither Vertex LP nor Vertex
Nevada has, in any manner that pertains to, or could affect, the Vertex
Business, engaged in any transaction, maintained any bank account or used any
corporate funds except for transactions, bank accounts and funds that have been
and are reflected in the normally maintained books and records of such Person.
3.7 FINANCIAL STATEMENTS. The Vertex Financial Statements to be
delivered to WWT prior to the Closing will be prepared from the books and
records and fairly and accurately present the financial condition and the
results of operations, income, expenses, assets, Liabilities (including all
reserves), changes in shareholders' equity and cash flow of Vertex Nevada as of
the respective dates of, and for the periods referred to in, such Vertex
Financial Statements, in accordance with GAAP applied on a consistent basis
throughout the periods indicated.
3.8 TRANSFER. Upon consummation of the Transfer, the only assets and
Liabilities of Vertex Nevada shall be the assets, Liabilities and Contracts as
set forth on EXHIBIT C hereto. As of the Closing, the assets set forth on
EXHIBIT C will, except as set forth on SCHEDULE 3.8, be owned by Vertex Nevada
free and clear of any Liens and will be sufficient to operate the Vertex
Business in the manner in which it is operating as of the date hereof. As of the
Closing, there will be no Liabilities associated with the Vertex Business that
are not set forth on EXHIBIT C. The assets and Contracts on EXHIBIT C include
all properties, assets, privileges, powers, rights, interests and claims of
every type and description that are owned, leased, held, used or useful in the
Vertex Business in which Vertex LP has any right, title or interest.
3.9 TAXES.
(a) FILING OF TAX RETURNS. Except as set forth on SCHEDULE 3.9(A)
of the Vertex Disclosure Schedules, Vertex LP will duly and timely file (or
caused to be filed) with the appropriate taxing authorities all Tax Returns
required to be filed through the Closing Date. All such Tax Returns filed will,
when filed, be complete and accurate in all respects. Except as set forth on
SCHEDULE 3.9(A) of the Vertex Disclosure Schedules, Vertex LP is not currently
the beneficiary of any extension of time within which to file any Tax Return. No
claim has ever been made against Vertex LP or its assets by an authority in a
jurisdiction where Vertex LP does not file Tax Returns such that Vertex LP is or
may be subject to taxation by that jurisdiction.
(b) PAYMENT OF TAXES. Except as set forth on SCHEDULE 3.9(B) of
the Vertex Disclosure Schedules, all Taxes owed and due by Vertex LP (whether or
not shown on any Tax Return) have been paid. The unpaid Taxes of Vertex LP, if
any, (i) will not, as of December 31, 2007, exceed the reserve for Tax Liability
(excluding any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) to be set forth on the face of the
Vertex Financial Statements (rather than in any notes thereto), and (ii) will
not exceed that reserve as adjusted for operations and transactions through the
Closing Date in accordance with the past custom and practice of Vertex LP in
filing its Tax Returns. Since December 31, 2007, Vertex LP has not (i) incurred
any Liability for Taxes other than in the Ordinary Course of Business or (ii)
paid Taxes other than Taxes paid on a timely basis and in a manner consistent
with past custom and practice.
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(c) AUDITS, INVESTIGATIONS, DISPUTES OR CLAIMS. Except as set
forth on SCHEDULE 3.9(C) of the Vertex Disclosure Schedules, no deficiencies for
Taxes are claimed, proposed or assessed by any taxing or other governmental
authority against Vertex LP, and there are no pending or, to the knowledge of
Vertex LP, threatened audits, investigations, disputes or claims or other
actions for or relating to any Liability for Taxes with respect to Vertex LP,
and there are no matters under discussion by or on behalf of Vertex LP with any
Regulatory Authority, or known to Vertex LP, with respect to Taxes that are
likely to result in an additional Liability for Taxes with respect to Vertex LP.
Audits of federal, state and local Tax Returns by the relevant taxing
authorities have been completed for the periods set forth on SCHEDULE 3.9(C) of
the Vertex Disclosure Schedules, and, except as set forth thereon, none of
Vertex LP or any predecessor thereof has been notified that any taxing authority
intends to audit a Tax Return for any other period. Vertex LP has not waived any
statute of limitations in respect of Taxes or agreed to any extension of time
with respect to a Tax assessment or deficiency. No power of attorney granted by
Vertex LP with respect to any Taxes is currently in force.
(d) LIEN. There are no Liens for Taxes (other than for current
Taxes not yet due and payable) on any assets or capital stock of Vertex LP.
(e) TAX ELECTIONS. All material elections with respect to Taxes
affecting Vertex or any of its assets as of the Closing Date are set forth on
SCHEDULE 3.9(E) of the Vertex Disclosure Schedules. Vertex LP has not: (i)
consented at any time under Section 341(f)(1) of the Code to have the provisions
of Section 341(f)(2) of the Code apply to any disposition of any of its assets;
(ii) agreed, and is not required, to make any adjustment under Section 481(a) of
the Code by reason of a change in accounting method or otherwise; (iii) made an
election, and is not required, to treat any of its assets as owned by another
Person pursuant to the provisions of Section 168(f) of the Code or as tax-exempt
bond financed property or tax-exempt use property within the meaning of Section
168 of the Code; (iv) acquired, and does not own, any assets that directly or
indirectly secure any debt the interest on which is tax exempt under Section
103(a) of the Code; (v) made a consent dividend election under Section 565 of
the Code; or (vi) made any of the foregoing elections and is not required to
apply any of the foregoing rules under any comparable state or local Tax
provision.
(f) PRIOR AFFILIATED GROUPS. Vertex LP is not and has never been a
member of an affiliated group of corporations within the meaning of Section 1504
of the Code. Vertex LP does not have any Liability for the Taxes of any Person
(i) under Treasury Regulations Section 1.1502-6 (or any similar provision of
state, local or foreign law), (ii) as a transferee or successor, (iii) by
Contract, or (iv) otherwise.
(g) TAX SHARING AGREEMENTS. There are no agreements for the
sharing of Tax liabilities or similar arrangements (including indemnity
arrangements) with respect to or involving Vertex LP or any of its assets or the
Vertex Business, and, after the Closing Date, neither Vertex Nevada nor any of
its assets or the Vertex Business shall be bound by any such Tax-sharing
agreements or similar arrangements or have any Liability thereunder for amounts
due in respect of periods prior to the Closing Date.
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(h) PARTNERSHIPS AND SINGLE MEMBER LLCS. Except as set forth on
SCHEDULE 3.9(H) of the Vertex Disclosure Schedules, Vertex LP (i) is not subject
to any joint venture, partnership, or other arrangement or contract which is
treated as a partnership for Tax purposes, (ii) does not own a single member
limited liability company which is treated as a disregarded entity, (iii) is not
a shareholder of a "controlled foreign corporation" as defined in Section 957 of
the Code (or any similar provision of state, local or foreign law) and (iv) is
not a "personal holding company" as defined in Section 542 of the Code (or any
similar provision of state, local or foreign law).
(i) NO WITHHOLDING. Vertex LP has not been a United States real
property holding corporation within the meaning of Section 897(c)(2) of the Code
during the applicable period specified in Section 897 of the Code. Vertex LP has
withheld and paid all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent contractor,
creditor, shareholder or other third party. The transactions contemplated herein
are not subject to the tax withholding provisions of Section 3406 of the Code,
or of Subchapter A of Chapter 3 of the Code or of any other provision of law.
(j) INTERNATIONAL BOYCOTT. Vertex LP has not participated in and
is not participating in an international boycott within the meaning of Section
999 of the Code.
(k) PERMANENT ESTABLISHMENT. Except as set forth on SCHEDULE
3.9(K) of the Vertex Disclosure Schedules, Vertex LP does not have and has never
had a permanent establishment in any foreign country, as defined in any
applicable Tax treaty or convention between the United States and such foreign
country.
(l) PARACHUTE PAYMENTS. Except as set forth on SCHEDULE 3.9(L) of
the Vertex Disclosure Schedules, Vertex LP is not a party to any existing
Contract, arrangement or plan that has resulted or would result (upon the
Closing or otherwise), separately or in the aggregate, in the payment of any
"excess parachute payments" within the meaning of Section 280(G) of the Code.
(m) TAX SHELTERS. Vertex LP has not participated in and Vertex LP
is not now participating in, any transaction described in Section 6111(c) or (d)
of the Code or Section 6112(b) of the Code or the Treasury Regulations
thereunder, or in any reportable transaction described in such regulations.
3.10 INTELLECTUAL PROPERTY.
(a) Except as set forth on SCHEDULE 3.10 hereto, Vertex LP owns,
or is licensed or otherwise possesses legally enforceable rights to use, all
Intellectual Property that is necessary for the conduct of the Vertex Business
(b) The Vertex Business, including the use of all owned and
licensed Intellectual Property, does not infringe or misappropriate or otherwise
materially violate the Intellectual Property rights of any third party, and no
claim is pending or, to the knowledge of the Vertex Parties, threatened against
Vertex LP alleging any of the foregoing.
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(c) To the knowledge of the Vertex Parties, (i) no third party is
engaging in any activity that infringes or misappropriates the Intellectual
Property owned or licensed by Vertex LP, and (ii) Vertex LP has not granted any
material license or other right to any third party with respect to such
Intellectual Property.
(d) Vertex LP has made available to WWT all material
correspondence and all written opinions in its possession relating to potential
infringement or misappropriation (i) by Vertex LP of any Intellectual Property
rights of any third party or (ii) by any third party of any of the Intellectual
Property rights, owned or licensed, used in the Vertex Business.
(e) Vertex LP has a license to use all software development tools,
library functions, compilers and other third-party software that are used in the
operation of the Vertex Business and are material to the Vertex Business, taken
as a whole.
3.11 CONTRACTS; NO DEFAULTS.
(a) SCHEDULE 3.11(A) hereto sets forth a true and complete list of
all contracts, agreements, leases, commitments or other understandings or
arrangements, written or oral, express or implied, to which Vertex LP is a
party, or affecting the Vertex Business, or by which Vertex LP or any of its
property is bound or affected requiring payments to or from, or incurring of
liabilities by, Vertex LP in excess of $50,000 (the "VERTEX CONTRACTS").
(b) Except as set forth on SCHEDULE 3.11(B) hereto, Vertex LP has
complied with and performed, in all material respects, all of its obligations
required to be performed under and is not in default with respect to any of the
Vertex Contracts, as of the date hereof, nor has any event occurred which has
not been cured which, with or without the giving of notice, lapse of time, or
both, would constitute a default in any respect thereunder. To the knowledge of
the Vertex Parties, no other party has failed to comply with or perform, in all
material respects, any of its obligations required to be performed under or is
in material default with respect to any such Vertex Contracts, as of the date
hereof, nor has any event occurred which, with or without the giving of notice,
lapse of time or both, would constitute a material default in any respect by
such party thereunder.
(c) Except as set forth on SCHEDULE 3.11(C) hereto, to the
knowledge of the Vertex Parties, there exists no facts or circumstances that
would make a material default by any party to any contract or obligation likely
to occur subsequent to the date hereof.
3.12 EMPLOYEE BENEFITS.
(a) SCHEDULE 3.12(A) of the Vertex Disclosure Schedules sets forth
a complete list of all Employee Plans covering employees, directors or
consultants or former employees, directors or consultants in, or related to, the
Vertex Business. Vertex LP has delivered or made available to WWT true and
complete copies of all Employee Plans, including written interpretations thereof
and written descriptions thereof which have been distributed to Vertex LP's
employees and for which Vertex LP has copies, all annuity contracts or other
funding instruments relating thereto, and a complete description of all Employee
Plans which are not in writing.
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(b) Neither Vertex LP nor any ERISA Affiliate sponsors, maintains,
contributes to or has an obligation to contribute to, or has sponsored,
maintained, contributed to or had an obligation to contribute to, any Pension
Plan subject to Title IV of ERISA, or any Multiemployer Plan.
(c) Each Welfare Plan which covers or has covered employees or
former employees of Vertex LP or of its Affiliates in the Vertex Business and
which is a "group health plan," as defined in Section 607(1) of ERISA, has been
operated in compliance with provisions of Part 6 of Title I, Subtitle B of ERISA
and Section 4980B of the Code at all times.
(d) There is no Legal Proceeding or Order outstanding, relating to
or seeking benefits under any Employee Plan set forth on SCHEDULE 3.12(A) of the
Vertex Disclosure Schedules, which is pending, threatened or anticipated against
Vertex LP, any ERISA Affiliate or any Employee Plan.
(e) Neither Vertex LP nor any ERISA Affiliate has any liability
for unpaid contributions under Section 515 of ERISA with respect to any Welfare
Plan covering employees, directors or consultants or former employees, directors
or consultants in, or related to, the Vertex Business.
(f) There are no Liens arising under the Code or ERISA with
respect to the operation, termination, restoration or funding of any Employee
Plan set forth on SCHEDULE 3.12(A) of the Vertex Disclosure Schedules, or
arising in connection with any excise tax or penalty tax with respect to such
Employee Plan.
(g) Each Employee Plan set forth on SCHEDULE 3.12(A) of the Vertex
Disclosure Schedules has at all times been maintained in all material respects,
by its terms and in operation, in accordance with all applicable laws,
including, without limitation, ERISA and the Code.
(h) Vertex LP and its ERISA Affiliates have made full and timely
payment of all amounts required to be contributed under the terms of each
Employee Plan and applicable Law or required to be paid as expenses or as Taxes
under applicable Laws, under such Employee Plan, and Vertex LP and its ERISA
Affiliates shall continue to do so through the Closing Date.
(i) Vertex LP has no Employee Plan intended to qualify under
Section 401 of the Code.
(j) Neither the execution and delivery of this Agreement or other
related agreements by the Vertex Parties nor the consummation of the
Transactions will result in the acceleration or creation of any rights of any
person to benefits under any Employee Plan (including, without limitation, the
acceleration of the vesting or exercisability of any stock options, the
acceleration of the vesting of any restricted stock, the acceleration of the
accrual or vesting of any benefits under any Pension Plan or the acceleration or
creation of any rights under any severance, parachute or change in control
agreement).
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(k) Neither Vertex LP nor any ERISA Affiliate has incurred any
liability with respect to any Employee Plan, which may create, or result in any
liability to Vertex Nevada.
3.13 LABOR MATTERS; EMPLOYEES. Except as set forth on SCHEDULE 3.13 of
the Vertex Disclosure Schedules, Vertex LP is not a party to any collective
bargaining or other labor contract. There has not been, there is not presently
pending or existing, and, to the knowledge of any of the Vertex Parties, there
is not threatened (i) any strike, slowdown, picketing, work stoppage or employee
grievance process against Vertex LP or the Vertex Business; (ii) any Legal
Proceeding against or affecting Vertex LP or the Vertex Business relating to the
alleged violation of any Law or Order pertaining to labor relations or
employment matters; or (iii) union organizing campaign or any application for
certification of a collective bargaining agent. No event has occurred or
circumstance exists that could provide the basis for any work stoppage or other
labor dispute. There is no lockout of any employees by Vertex LP, and no such
action is contemplated by Vertex LP. Vertex LP has complied with all material
Laws relating to employment, equal employment opportunity, nondiscrimination,
harassment, retaliation, immigration, wages, hours, benefits, collective
bargaining, the payment of social security and similar Taxes, occupational
health and safety, and plant closing. Vertex LP is not liable for the payment of
any compensation, damages, Taxes, fines, penalties or other amounts (including,
without limitation, amounts related to workplace safety and insurance), however
designated, for failure to comply with any of the foregoing Laws.
3.14 LEGAL PROCEEDINGS. There is no material Legal Proceeding or Order
(a) pending or, to the knowledge of any of the Vertex Parties, threatened or
anticipated against or affecting the Vertex Business (or to the knowledge of any
of the Vertex Parties, pending or threatened, against any of the officers,
directors or employees of Vertex LP with respect to their business activities
related to or affecting the Vertex Business); (b) that challenges or that may
have the effect of preventing, making illegal, delaying or otherwise interfering
with any of the Transactions; or (c) related to the Vertex Business. To the
knowledge of the Vertex Parties, there is no reasonable basis for any such Legal
Proceeding or Order. To the knowledge of the Vertex Parties, no officer,
director, partner, agent or employee of Vertex LP is subject to any Order that
prohibits such officer, director, partner, agent or employee from engaging in or
continuing any conduct, activity, or practice relating to the Vertex Business.
The Vertex Business is not subject to any Order of any Regulatory Authority and
Vertex LP is not engaged in any Legal Proceeding relating to the Vertex Business
to recover monies due it or for damages sustained by it. Vertex LP is not and
has not been in default with respect to any Order relating to the Vertex
Business, and there are no unsatisfied judgments against Vertex LP relating to
the Vertex Business. There are no Orders or agreements with, or Liens by, any
Regulatory Authority or quasi-governmental entity relating to any environmental
Law, which regulate, obligate, bind or in any way affect Vertex LP or any
property on which Vertex LP operates the Vertex Business. SCHEDULE 3.14 sets
forth all litigation that the Vertex Parties are subject to, none of which
litigation challenges or may have the effect of preventing, making illegal,
delaying or otherwise interfering with any of the Transactions or is related in
any way to the Vertex Business.
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3.15 COMPLIANCE WITH LAW.
(a) To the knowledge of Vertex LP, the conduct of the Vertex
Business is and at all times has been in compliance with all Laws or Orders
applicable to the conduct and operations of the Vertex Business. Vertex LP has
not received any notice to the effect that, or otherwise been advised of (i) any
actual, alleged, possible or potential violation of, or failure to comply with,
any such Laws or Orders or (ii) any actual, alleged, possible or potential
obligation on the part of Vertex LP to undertake, or to bear all or any portion
of the cost of, any remedial action of any nature with respect to the Vertex
Business. No event has occurred or circumstance exists that (with or without
notice or lapse of time) (i) may constitute or result in a violation by Vertex
LP of, or a failure on the part of Vertex LP, any such Laws or Orders or (ii)
may give rise to any obligation on the part of Vertex LP to undertake, or to
bear all or any portion of the cost of, any remedial action of any nature,
except, in either case separately or the cases together, where such violation or
failure to comply could not reasonably be expected to have a Material Adverse
Effect on, the Vertex Business.
(b) None of Vertex LP, or any of its directors, officers or
Representatives or to the knowledge of Vertex LP, any employee or other Person
affiliated with or acting for or on behalf of Vertex LP, has, directly or
indirectly, (i) made any contribution, bribe, rebate, payoff, influence payment,
kickback or other payment to any Person, private or public, regardless of form,
whether in money, property or services (A) to obtain favorable treatment in
securing business, (B) to pay for favorable treatment for business secured, (C)
to obtain special concessions or for special concessions already obtained, for
or in respect of Vertex or any of its Affiliates or (D) in violation of any Laws
of the United States (including, without limitation, the Foreign Corrupt
Practices Act of 1977, as amended (15 U.S.C. Sections 78dd-1 et seq.)) or any
laws of any other country having jurisdiction; or (ii) established or maintained
any fund or asset that has not been recorded in the books and records of Vertex
LP.
3.16 PERMITS. SCHEDULE 3.16(A) of the Vertex Disclosure Schedules sets
forth a complete list of all Permits held by Vertex LP and used in the conduct
of the Vertex Business, and such Permits collectively constitute all of the
Permits necessary for Vertex LP to lawfully conduct and operate the Vertex
Business, as it is presently conducted and to permit Vertex LP to own and use
its assets in the manner in which they are presently owned and used in
connection with the Vertex Business. All of such Permits will be transferred to
Vertex Nevada on or prior to the Closing, and no third-party consent is required
in connection therewith. Except as set forth on SCHEDULE 3.16(B) of the Vertex
Disclosure Schedules, Vertex LP is and at all times has been in compliance with
all material Permits applicable to it or to the conduct and operations of the
Vertex Business. Vertex LP has not received any notice to the effect that, or
otherwise been advised of (i) any actual, alleged, possible or potential
violation of, or failure to comply with, any such Permits or (ii) any actual,
alleged, possible or potential revocation, withdrawal, suspension, cancellation
or termination of, or any modification to, any Permit set forth on or required
to be set forth on SCHEDULE 3.16(A) of the Vertex Disclosure Schedules. No event
has occurred, and to Vertex LP's knowledge no circumstance exists, that (with or
without notice or lapse of time) (i) may constitute or result directly or
indirectly in a violation by Vertex LP of, or a failure on the part of Vertex LP
to comply with, any such Permits or (ii) result directly or indirectly in the
revocation, withdrawal, suspension, cancellation or termination of, or any
modification to, any Permit set forth on or required to be set forth on SCHEDULE
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3.16(A) of the Vertex Disclosure Schedules. All applications for or renewals of
all Permits have been timely filed and made and no Permit will expire or be
terminated as a result of the consummation of the transactions contemplated by
this Agreement. No present or former shareholder, partner, director, officer or
employee of Vertex LP or any Affiliate thereof, or any other Person, owns or has
any proprietary, financial or other interest (direct or indirect) in any Permit
that Vertex LP owns, possesses or uses.
3.17 ABSENCE OF CERTAIN CHANGES. Except as set forth on SCHEDULE 3.17 of
the Vertex Disclosure Schedules, since December 31, 2007, there has not been
any: (a) Material Adverse Effect with respect to the Vertex Business, and no
event has occurred and no circumstance exists that may result in such a Material
Adverse Effect other than Material Adverse Effects resulting from historical
seasonality of the Vertex Business; (b) purchase, redemption, retirement or
other acquisition by Vertex LP of any Vertex partnership interests or other
equity interest of Vertex LP; (c) amendments to the Organizational Documents of
Vertex LP; (d) payment or increase by Vertex LP of any bonuses, salaries or
other compensation (including management or other similar fees) or entry into
any employment, severance or similar Contract with any employee engaged in the
Vertex Business, other than increases in salary to employees made in the
Ordinary Course of Business; (e) adverse change in employee relations which has
or is reasonably likely to have a Material Adverse Effect on Vertex LP as
relates to the Vertex Business; (f) damage to or destruction or loss of any of
the assets or property of Vertex LP relating to the Vertex Business, whether or
not covered by insurance, that could reasonably be expected to constitute a
Material Adverse Effect on Vertex LP as relates to the Vertex Business; (g)
entry into, termination or acceleration of, or receipt of notice of termination
by Vertex LP of (1) any material license, distributorship, dealer, sales
representative, joint venture, credit or similar agreement relating to the
Vertex Business, or (2) any Contract or transaction involving a Liability by or
to Vertex LP (other than the Liabilities relating to the Vertex Business
incurred in the Ordinary Course of Business since December 31, 2007); (h) sale
(other than sales of inventory in the Ordinary Course of Business, if any),
lease or other disposition of any of the assets or property of Vertex LP
relating to the Vertex Business; (i) mortgage, pledge or imposition of any Lien
on any assets or property of Vertex LP relating to the Vertex Business,
including the sale, lease or other disposition of any of its Intellectual
Property relating to the Vertex Business; (j) (1) delay or failure to repay when
due any obligation of Vertex LP, which delay or failure could have a Material
Adverse Effect on Vertex LP as relates to the Vertex Business, or (2) delay or
failure to repay when due any obligation of Vertex LP which delay or failure
could have a Material Adverse Effect on Vertex LP as relates to the Vertex
Business; (k) cancellation or waiver by Vertex LP of any claims or rights with a
value to Vertex LP relating to the Vertex Business in excess of Fifty Thousand
Dollars ($50,000) individually or in the aggregate; (l) failure by Vertex LP to
use reasonable efforts to preserve intact the current business organization of
Vertex LP relating to the Vertex Business, and maintain the relations and
goodwill with its suppliers, customers, landlords, creditors, employees,
licensors, resellers, distributors, agents and others having business
relationships with them relating to the Vertex Business where such failure could
reasonably be expected to have a Material Adverse Effect on Vertex LP as relates
to the Vertex Business; (m) licensing out on an exclusive basis or other than in
the Ordinary Course of Business, disposition or lapsing of any Intellectual
Property or any disclosure to any Person of any trade secret or other
confidential information without appropriate protections in place; (n) change in
the accounting methods, principles or practices used by Vertex LP; (o) capital
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expenditures by Vertex LP relating to the Vertex Business in excess of $20,000
individually or $50,000 in the aggregate; or (p) agreement, whether oral or
written, by Vertex LP with respect to or to do any of the foregoing other than
as expressly provided for herein. Vertex LP is not as of the date hereof, and
after giving effect to the transactions contemplated hereby to occur at the
Closing, will not be Insolvent (as defined below). For purposes of this Section
3.17, "INSOLVENT" means (i) the present fair saleable value of Vertex LP's
assets is less than the amount required to pay Vertex LP's total indebtedness,
contingent or otherwise, (ii) Vertex LP is unable to pay its debts and
Liabilities, subordinated, contingent or otherwise, as such debts and
Liabilities become absolute and matured, (iii) Vertex LP intends to incur or
believes that it will incur debts that would be beyond its ability to pay as
such debts mature or (iv) Vertex LP has unreasonably small capital with which to
conduct the business in which it is engaged as such business is now conducted
and is proposed to be conducted.
3.18 INSURANCE. SCHEDULE 3.18 of the Vertex Disclosure Schedules sets
forth a complete and accurate list (showing as to each policy or binder the
carrier, policy or binder the carrier, policy number, coverage limits,
expiration dates, annual premiums and a general description of the type of
coverage provided) of all policies or binders of insurance of any kind or nature
covering the Vertex Business, or any employees, properties or assets of Vertex
LP relating to the Vertex Business, including, without limitation, policies of
life, disability, fire, theft, workers compensation, employee fidelity and other
casualty and liability insurance. All such policies are in full force an effect.
Vertex LP is not in default under any of such policies or binders, and Vertex LP
has not failed to give any notice or to present any claim under any such policy
or binder in a due and timely fashion.
3.19 RESTRICTIONS ON BUSINESS ACTIVITIES. There is no agreement,
judgment, injunction, order or decree binding upon Vertex LP which has the
effect of prohibiting or materially impairing (a) any current or future business
practice of Vertex LP or (b) any acquisition of any Person or property by Vertex
LP, except in each of clauses (a) and (b) for any such prohibitions or
impairments that would not reasonably be expected to have a Material Adverse
Effect on Vertex LP as relates to the Vertex Business.
3.20 RELATED PARTY TRANSACTIONS. Except as set forth on SCHEDULE 3.20 of
the Vertex Disclosure Schedules, none of Vertex LP, any Affiliate thereof,
holders of the ownership interest of Vertex LP or any Affiliate or Family Member
thereof is presently or has, since December 31, 2007, borrowed any moneys from
or has any outstanding debt or other obligations to Vertex LP or is presently a
party to any transaction with Vertex LP relating to the Vertex Business. Except
as set forth on SCHEDULE 3.20 of the Vertex Disclosure Schedules, none of Vertex
LP any Affiliate thereof, or any director, officer, partner or key employee of
any such Persons (a) owns any direct or indirect interest of any kind in (except
for ownership of less than 1% of any public company, provided, that such owner's
role is that solely of a passive investor), or controls or is a director,
officer, employee or partner of, consultant to, lender to or borrower from, or
has the right to participate in the profits of, any Person which is (i) a
competitor, supplier, customer, landlord, tenant, creditor or debtor of Vertex
LP, (ii) engaged in a business related to the Vertex Business or (iii) a
participant in any transaction to which Vertex LP is a party, or (b) is a party
to any Contract with Vertex LP. Except as set forth on SCHEDULE 3.20 of the
Vertex Disclosure Schedules, Vertex LP has no Contract or understanding with any
officer, director or key employee of Vertex LP or any of Vertex LP's partners or
any Affiliate or Family Member thereof with respect to the subject matter of
this Agreement, the consideration payable hereunder or any other matter.
SCHEDULE 3.20 sets forth each transaction that Vertex Nevada and Vertex LP would
be required to disclose for the past three years pursuant to Item 404 of
Regulation S-K of the Securities Act, as if such Person were subject to such
disclosure requirements.
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3.21 BROKERS OR FINDERS. Except as set forth on SCHEDULE 3.21 of the
Vertex Disclosure Schedules, all negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by Vertex LP or its
Affiliates in connection with the transactions contemplated by this Agreement,
and neither Vertex LP nor any of its Affiliates has incurred any obligation to
pay any brokerage or finder's fee or other commission in connection with the
transactions contemplated by this Agreement.
3.22 NO OTHER AGREEMENTS. Except as set forth on SCHEDULE 3.22 of the
Vertex Disclosure Schedules, and other than this Agreement or any agreement
contemplated hereby, neither Vertex LP, nor any of its partners, officers,
directors or Affiliates has any legal obligation, absolute or contingent, to any
other Person to sell, assign or transfer any partnership or other equity
interest in Vertex LP or to effect any merger, consolidation or other
reorganization of Vertex LP or to enter into any agreement with respect thereto.
3.23 DISCLOSURE. No representation or warranty of the Vertex Parties in
this Agreement or in any Collateral Document and no statement in any certificate
furnished or to be furnished by any of the Vertex Parties pursuant to this
Agreement contained, contains or will contain on the date such agreement or
certificate was or is delivered, or on the Closing Date, any untrue statement of
a material fact, or omitted, omits or will omit on such date to state any
material fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.
3.24 REAL PROPERTY; TITLE TO PROPERTY.
(a) Vertex LP does not own any real property or any interest,
other than a leasehold interest, in any real property. SCHEDULE 3.24(A) of the
Vertex Disclosure Schedules lists and describes all real property leased by
Vertex LP and all subleases thereto, in each case that relates to the Vertex
Business. Except for leases and subleases listed on SCHEDULE 3.24(A) of the
Vertex Disclosure Schedules, there are no leases, subleases, licenses, occupancy
agreements, options, rights, concessions or other agreements or arrangements,
written or oral, granting to any Person the right to purchase, use or occupy any
real property used in connection with the Vertex Business or any portion thereof
or interest in any such real property.
(b) Vertex LP has good and marketable title to all of its
properties, interests in properties and assets, real and personal, used in
connection with the Vertex Business or with respect to leased properties and
assets, valid leasehold interests in, free and clear of all mortgages, Liens,
pledges, charges or encumbrances of any kind or character, except (i) Liens for
current Taxes not yet due and payable or which are being contested by Vertex LP
in good faith, (ii) such imperfections of title, liens and easements as do not
and will not materially detract from or interfere with the use of the properties
subject thereto or affected thereby, or otherwise materially impair business
operations involving such properties, and (iii) any Liens set forth on SCHEDULE
3.24 of the Vertex Disclosure Schedules. The properties and equipment of Vertex
LP that are used in the operation of the Vertex Business are in good operating
condition subject to normal wear and tear. All material properties used in the
Vertex Business are set forth on EXHIBIT C hereto.
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3.25 STATUS OF VERTEX NEVADA. Since its inception, Vertex Nevada has
been, and until immediately prior to the Transfer (which will occur immediately
prior to the Effective Time), Vertex Nevada shall remain, a shell company with
no assets, Liabilities, Contracts (other than this Agreement) or operations.
3.26 CONDUCT OF BUSINESS. Prior to the Closing Date, Vertex LP shall
conduct the Vertex Business in the normal course, and shall not sell, pledge, or
assign any assets, without the prior written approval of WWT, except in the
regular course of business. Except as otherwise provided herein, neither Vertex
LP nor Vertex Nevada shall amend its respective Organizational Documents,
declare dividends, redeem or sell stock, partnership or other securities,
acquire or dispose of fixed assets, change employment terms, enter into any
material or long-term contract, guarantee obligations of any third party, settle
or discharge any material balance sheet receivable for less than its stated
amount, pay more on any liability than its stated amount or enter into any other
transaction other than in the regular course of business.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF WWT
WWT represents and warrants to the Vertex Parties that the statements
contained in this Article 4 are true, complete and correct as of the date of
this Agreement and will be correct and complete as of the Closing Date (and as
though made then and as though the Closing Date were substituted for the date of
this Agreement throughout this Article 4, except in the case of representations
and warranties stated to be made as of the date of this Agreement or as of
another date and except for changes contemplated or permitted by this
Agreement); except as the same may be qualified or limited by the WWT Disclosure
Schedules and except as may be disclosed in documents filed by WWT from time to
time with the SEC (the "SEC REPORTS"):
4.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(a) WWT is duly organized, validly existing and in good standing
under the Laws of the jurisdiction in which it is organized and has the
requisite power and authority to carry on its business as now being conducted,
which such jurisdictions are set forth on SCHEDULE 4.1(A) hereto of the WWT
Disclosure Schedules.
(b) WWT is duly qualified or licensed to do business and is in
good standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so qualified
or licensed (individually or in the aggregate) has not had and would not
reasonably be expected to have a Material Adverse Effect on WWT.
(c) WWT has delivered or made available to the Vertex Parties
complete and correct copies of its Organizational Documents, in each case as
amended to the date hereof. All of the outstanding shares of capital stock or
other ownership interests of each Subsidiary of WWT have been validly issued and
are fully paid and nonassessable and owned by WWT, free and clear of all Liens,
and free of any restriction on the right to vote, sell or otherwise dispose of
such capital stock or other ownership interests, except for restrictions imposed
by applicable securities Laws.
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(d) There are no outstanding (i) securities of WWT or any of its
Subsidiaries convertible into or exchangeable for shares of capital stock or
other ownership interests in any Subsidiary of WWT, or (ii) options or other
rights to acquire from WWT or any of its Subsidiaries, or other obligation of
WWT or any of its Subsidiaries to issue, any capital stock or other ownership
interests in, or any securities convertible into or exchangeable for any capital
stock or other ownership interests in, any Subsidiary of WWT.
(e) Except for ownership of less than 1% in any publicly traded
company and the capital stock or other ownership interests of its Subsidiaries,
WWT does not own, directly or indirectly, any capital stock or other ownership
interest in any corporation, partnership, joint venture or other entity. No
Subsidiary of WWT owns any shares of WWT Capital Stock.
(f) SCHEDULE 3.1 of the WWT Disclosure Schedules sets forth each
Subsidiary of WWT as of the date of this Agreement.
4.2 AUTHORIZATION; ENFORCEABILITY. WWT has the requisite power and
authority, and has taken all action necessary, to execute, deliver and perform
its obligations under this Agreement and any Collateral Documents to which it is
a party and each other agreement, document, instrument or certificate
contemplated by this Agreement and/or any Collateral Documents or to be executed
by WWT in connection with the consummation of the Transactions, and, subject to
approval of the stockholders of WWT, to consummate the Transactions. The
execution and delivery by WWT of this Agreement and any applicable Collateral
Documents, and the consummation by WWT of the Transactions contemplated hereby,
and the performance by WWT of its obligations hereunder, have been duly and
validly authorized by all necessary corporate or other action on the part of
WWT, subject to adoption of this Agreement by the stockholders of WWT, and no
other action on the part of WWT is required to authorize the execution, delivery
and performance of this Agreement and the consummation by WWT of the
Transactions. This Agreement has been duly and validly executed and delivered by
WWT and constitutes a legal, valid and binding obligation of WWT enforceable
against WWT in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, moratorium, reorganization and other similar
laws affecting creditors' rights generally and the general principles of equity,
regardless of whether asserted in a proceeding in equity or at law.
4.3 CAPITALIZATION.
(a) The authorized capital stock of WWT as of the date of this
Agreement consists of 100,000,000 shares of WWT Common Stock and 10,000,000
shares of Preferred Stock (of which 9,100,000 shares have been designated as WWT
Series A Preferred Stock and 500,000 shares have been designated as WWT Series B
Preferred Stock). As of the date of this Agreement, (i) there are 27,596,591
shares of WWT Common Stock, 4,619,481 shares of WWT Series A Preferred Stock,
and 244,615 shares of WWT Series B Preferred Stock issued and outstanding; and
(ii) no shares of WWT Common Stock are held in the treasury of WWT. SCHEDULE
4.3(A) of the WWT Disclosure Schedules set forth the options and warrants to
acquire WWT Capital Stock outstanding as of the date hereof. Except as described
above, as of the close of business on the day prior to the date hereof, there
were no shares of voting or non-voting capital stock, equity interests or other
securities of WWT authorized, issued, reserved for issuance or otherwise
outstanding.
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(b) All outstanding shares of WWT Capital Stock are duly
authorized, validly issued, fully paid and non-assessable, and not subject to,
or issued in violation of, any preemptive, subscription or any kind of similar
rights. WWT has no outstanding shares of WWT Capital Stock subject to a right of
repurchase that will survive the Merger.
(c) There are no bonds, debentures, notes or other indebtedness of
WWT having the right to vote (or convertible into securities having the right to
vote) on any matters on which stockholders of WWT may vote. Except as set forth
in the SEC Reports, there are no outstanding securities, options, warrants,
calls, rights, commitments, agreements, arrangements or undertakings of any kind
(contingent or otherwise) to which WWT is a party or bound obligating WWT to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or other voting securities of WWT or obligating WWT to
issue, grant, extend or enter into any agreement to issue, grant or extend any
security, option, warrant, call, right, commitment, agreement, arrangement or
undertaking. Neither WWT nor its Subsidiaries is subject to any obligation or
requirement to provide funds for or to make any investment (in the form of a
loan or capital contribution) in any Person.
(d) All of the issued and outstanding shares of WWT Capital Stock
were issued in compliance in all material respects with all applicable federal
and state securities Laws.
(e) Except as set forth in the SEC Reports, there are no
outstanding contractual obligations of WWT to repurchase, redeem or otherwise
acquire any shares of capital stock (or options or warrants to acquire any such
shares) or other security or equity interests of WWT. Except as set forth in the
SEC Reports, there are no stock-appreciation rights, security-based performance
units, phantom stock or other security rights or other agreements, arrangements
or commitments of any character (contingent or otherwise) pursuant to which any
Person is or may be entitled to receive any payment or other value based on the
revenues, earnings or financial performance, stock price performance or other
attribute of WWT or any of its Subsidiaries or to cause WWT or any of its
Subsidiaries to file a registration statement under the Securities Act, or which
otherwise relate to the registration of any securities of WWT or any of its
Subsidiaries.
(f) Except as set forth in the SEC Reports, there are no voting
trusts, proxies or other agreements, commitments or understandings to which WWT
or any of its Subsidiaries or, to the knowledge of WWT, any of the stockholders
of WWT, is a party or by which any of them is bound with respect to the
issuance, holding, acquisition, voting or disposition of any shares of capital
stock or other security or equity interest of WWT or any of its Subsidiaries.
4.4 NON-CONTRAVENTION. Except as set forth in the SEC Reports and
SCHEDULE 4.4 to the WWT Disclosure Schedules, the execution, delivery and
performance of this Agreement by WWT does not and, subject to obtaining
shareholder adoption of this Agreement, the consummation of the Transactions
will not (a) contravene, conflict with, or result in any violation or breach of
any provision of the Organizational Documents of WWT, (b) contravene, conflict
with, or result in a violation or breach of any provision of any Law applicable
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to WWT, (c) require any consent or other action by any Person under, constitute
a breach of or default under, or cause or permit the termination, cancellation,
acceleration or other change of any right or obligation or the loss of any
benefit to which WWT or any of its Subsidiaries is entitled under any provision
of any agreement or other instrument binding upon WWT or any of its Subsidiaries
or any license, franchise, permit, certificate, approval or other similar
authorization affecting, or relating in any way to, the assets or business of
WWT and its Subsidiaries or (d) result in the creation or imposition of any Lien
on any asset of WWT or any of its Subsidiaries, which in the case of clauses (b)
or (d) above would have a Material Adverse Effect on WWT.
4.5 CONSENTS AND APPROVALS. Except as set forth in the SEC Reports, no
consent, approval, authorization or order of, registration or filing with, or
notice to, any Regulatory Authority or any other Person is necessary to be
obtained, made or given by WWT in connection with the execution, delivery and
performance by WWT of this Agreement or any applicable Collateral Document or
for the consummation by WWT of the Transactions, except to the extent the
failure to obtain any such consent, approval, authorization or order or to make
any such registration or filing would not have a Material Adverse Effect on WWT.
4.6 BOOKS AND RECORDS. WWT has made and kept books and records and
accounts, which, in reasonable detail, accurately and fairly reflect the
activities of WWT pertaining to its business. WWT has not, in any manner that
pertains to, or could affect, its business, engaged in any transaction,
maintained any bank account or used any corporate funds except for transactions,
bank accounts and funds that have been and are reflected in the normally
maintained books and records of WWT.
4.7 FINANCIAL STATEMENTS. Included in the SEC Reports are the WWT
Financial Statements. The WWT Financial Statements have been prepared from the
books and records and fairly and accurately present the financial condition and
the results of operations, income, expenses, assets, Liabilities (including all
reserves), changes in shareholders' equity and cash flow of WWT as of the
respective dates of, and for the periods referred to in, such WWT Financial
Statements, in accordance with GAAP applied on a consistent basis throughout the
periods indicated. WWT maintains a standard system of accounting established and
administered in accordance with GAAP.
4.8 NO UNDISCLOSED LIABILITIES. Except as set forth in the SEC Reports
or on SCHEDULE 4.8 of the WWT Disclosure Schedules, WWT has no Liabilities due
or to become due except (a) Liabilities that are reflected in the WWT Financial
Statements which have not been paid or discharged since the date of the WWT
Financial Statements, (b) Liabilities incurred in the Ordinary Course of
Business since the date of the WWT Financial Statements (none of which relates
to any default under any Contract, breach of warranty, tort, infringement or
violation of any Law or arose out of any Legal Proceeding) and none of which
would have a Material Adverse Effect on WWT, and (c) Liabilities which are
satisfied by WWT prior to the Closing.
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4.9 TAXES.
(a) FILING OF TAX RETURNS. WWT has duly and timely filed (or
caused to be filed) with the appropriate taxing authorities all Tax Returns
required to be filed through the date hereof. All such Tax Returns filed are
complete and accurate in all respects. WWT is not currently the beneficiary of
any extension of time within which to file any Tax Return. No claim has ever
been made against WWT or its assets by an authority in a jurisdiction where WWT
does not file Tax Returns such that WWT is or may be subject to taxation by that
jurisdiction.
(b) PAYMENT OF TAXES. All Taxes owed and due by WWT (whether or
not shown on any Tax Return) have been paid. The unpaid Taxes of WWT, if any,
(i) did not, as of the date of WWT Financial Statements, exceed the reserve for
Tax liability (excluding any reserve for deferred Taxes established to reflect
timing differences between book and Tax income) set forth on the face of the WWT
Financial Statements (rather than in any notes thereto), and (ii) have not
exceeded that reserve as adjusted for operations and transactions through the
date hereof in accordance with the past custom and practice of WWT in filing its
Tax Returns. Since the WWT Financial Statements Date, WWT has not (i) incurred
any Liability for Taxes other than in the Ordinary Course of Business or (ii)
paid Taxes other than Taxes paid on a timely basis and in a manner consistent
with past custom and practice.
(c) AUDITS, INVESTIGATIONS, DISPUTES OR CLAIMS. No deficiencies
for Taxes are claimed, proposed or assessed by any taxing or other governmental
authority against WWT, and there are no pending or, to the knowledge of WWT,
threatened audits, investigations, disputes or claims or other actions for or
relating to any Liability for Taxes with respect to WWT, and there are no
matters under discussion by or on behalf of WWT with any Regulatory Authority,
or known to WWT, with respect to Taxes that are likely to result in an
additional Liability for Taxes with respect to WWT. Audits of federal, state and
local Tax Returns by the relevant taxing authorities have been completed for the
periods set forth on SCHEDULE 4.9(C) of the WWT Disclosure Schedules, and,
except as set forth thereon, none of WWT, any Subsidiary thereof, or any
predecessor thereof has been notified that any taxing authority intends to audit
a Tax Return for any other period. WWT has not waived any statute of limitations
in respect of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency. No power of attorney granted by WWT with respect to
any Taxes is currently in force.
(d) LIEN. There are no Liens for Taxes (other than for current
Taxes not yet due and payable) on any assets or capital stock of WWT.
(e) TAX ELECTIONS. All material elections with respect to Taxes
affecting WWT or any of its respective assets as of the date hereof are set
forth on SCHEDULE 4.9(E) of the WWT Disclosure Schedules. WWT has not: (i)
consented at any time under Section 341(f)(1) of the Code to have the provisions
of Section 341(f)(2) of the Code apply to any disposition of any of its assets;
(ii) agreed, and is not required, to make any adjustment under Section 481(a) of
the Code by reason of a change in accounting method or otherwise; (iii) made an
election, and is not required, to treat any of its assets as owned by another
Person pursuant to the provisions of Section 168(f) of the Code or as tax-exempt
bond financed property or tax-exempt use property within the meaning of Section
168 of the Code; (iv) acquired, and does not own, any assets that directly or
indirectly secure any debt the interest on which is tax exempt under Section
103(a) of the Code; (v) made a consent dividend election under Section 565 of
the Code; or (vi) made any of the foregoing elections and is not required to
apply any of the foregoing rules under any comparable state or local Tax
provision.
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(f) PRIOR AFFILIATED GROUPS. WWT is not and has never been a
member of an affiliated group of corporations within the meaning of Section 1504
of the Code. WWT does not have any Liability for the Taxes of any Person (i)
under Treasury Regulations Section 1.1502-6 (or any similar provision of state,
local or foreign law), (ii) as a transferee or successor, (iii) by Contract, or
(iv) otherwise.
(g) TAX SHARING AGREEMENTS. There are no agreements for the
sharing of Tax liabilities or similar arrangements (including indemnity
arrangements) with respect to or involving WWT (or any of its Subsidiaries) or
any of its assets or business, and, after the Closing Date, neither WWT nor any
of its assets shall be bound by any such Tax-sharing agreements or similar
arrangements or have any Liability thereunder for amounts due in respect of
periods prior to the Closing Date.
(h) PARTNERSHIPS AND SINGLE MEMBER LLCS. WWT (i) is not subject to
any joint venture, partnership, or other arrangement or contract which is
treated as a partnership for Tax purposes, (ii) does not own a single member
limited liability company which is treated as a disregarded entity, (iii) is not
a shareholder of a "controlled foreign corporation" as defined in Section 957 of
the Code (or any similar provision of state, local or foreign law) and (iv) is
not a "personal holding company" as defined in Section 542 of the Code (or any
similar provision of state, local or foreign law).
(i) NO WITHHOLDING. WWT has not been a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Code during
the applicable period specified in Section 897 of the Code. WWT has withheld and
paid all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
shareholder or other third party. The transactions contemplated herein are not
subject to the tax withholding provisions of Section 3406 of the Code, or of any
other provision of law.
(j) INTERNATIONAL BOYCOTT. WWT has not participated in and is not
participating in an international boycott within the meaning of Section 999 of
the Code.
(k) PERMANENT ESTABLISHMENT. WWT does not have and has never had a
permanent establishment in any foreign country, as defined in any applicable Tax
treaty or convention between the United States and such foreign country.
(l) PARACHUTE PAYMENTS. WWT is not a party to any existing
Contract, arrangement or plan that has resulted or would result (upon the
Closing or otherwise), separately or in the aggregate, in the payment of any
"excess parachute payments" within the meaning of Section 280(G) of the Code.
(m) TAX SHELTERS. Neither WWT nor any Subsidiary has participated
in and WWT is not now participating in, any transaction described in Section
6111(c) or (d) of the Code or Section 6112(b) of the Code or the Treasury
Regulations thereunder, or in any reportable transaction described in such
regulations.
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4.10 CONTRACTS; NO DEFAULTS.
(a) The Exhibit Index to WWT's Annual Report on Form 10-K for the
year ended December 31, 2007 sets forth a true and complete list of all
contracts, agreements, leases, commitments or other understandings or
arrangements, written or oral, express or implied, to which WWT is a party, or
affecting its business or by which WWT or any of its property is bound or
affected requiring payments to or from, or incurring of liabilities by, WWT in
excess of $50,000 (the "WWT CONTRACTS").
(b) Except as set forth in the SEC Reports, WWT has complied with
and performed, in all material respects, all of its obligations required to be
performed under and is not in default with respect to any of the WWT Contracts,
as of the date hereof, nor has any event occurred which has not been cured
which, with or without the giving of notice, lapse of time, or both, would
constitute a default in any respect thereunder. To the knowledge of WWT, no
other party has failed to comply with or perform, in all material respects, any
of its obligations required to be performed under or is in material default with
respect to any such WWT Contracts, as of the date hereof, nor has any event
occurred which, with or without the giving of notice, lapse of time or both,
would constitute a material default in any respect by such party thereunder.
(c) Except as set forth in the SEC Reports, to the knowledge of
WWT, there exists no facts or circumstances that would make a material default
by any party to any contract or obligation likely to occur subsequent to the
date hereof.
4.11 EMPLOYEE BENEFITS.
(a) The SEC Reports include a complete list of all Employee Plans
(i) covering employees, directors or consultants or former employees, directors
or consultants in, or related to, WWT and/or (ii) with respect to which
Surviving Corporation may incur any Liability. WWT has delivered or made
available to Vertex true and complete copies of all Employee Plans, including
written interpretations thereof and written descriptions thereof which have been
distributed to WWT's employees and for which WWT has copies, all annuity
contracts or other funding instruments relating thereto, and a complete
description of all Employee Plans which are not in writing.
(b) Neither WWT nor any ERISA Affiliate sponsors, maintains,
contributes to or has an obligation to contribute to, or has sponsored,
maintained, contributed to or had an obligation to contribute to, any Pension
Plan subject to Title IV of ERISA, or any Multiemployer Plan.
(c) Each Welfare Plan which covers or has covered employees or
former employees of WWT or of its Affiliates in the Business and which is a
"group health plan," as defined in Section 607(1) of ERISA, has been operated in
compliance with provisions of Part 6 of Title I, Subtitle B of ERISA and Section
4980B of the Code at all times.
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(d) There is no Legal Proceeding or Order outstanding, relating to
or seeking benefits under any Employee Plan set forth in the SEC Reports, which
is pending, threatened or anticipated against WWT, any ERISA Affiliate or any
Employee Plan.
(e) Neither WWT nor any ERISA Affiliate has any liability for
unpaid contributions under Section 515 of ERISA with respect to any Welfare Plan
(i) covering employees, directors or consultants or former employees, directors
or consultants in, or related to, WWT and (ii) with respect to which Surviving
Corporation may incur any Liability.
(f) There are no Liens arising under the Code or ERISA with
respect to the operation, termination, restoration or funding of any Employee
Plan set forth in the SEC Reports, or arising in connection with any excise tax
or penalty tax with respect to such Employee Plan.
(g) Each Employee Plan set forth in the SEC Reports has at all
times been maintained in all material respects, by its terms and in operation,
in accordance with all applicable laws, including, without limitation, ERISA and
the Code.
(h) WWT and its ERISA Affiliates have made full and timely payment
of all amounts required to be contributed under the terms of each Employee Plan
and applicable Law or required to be paid as expenses or as Taxes under
applicable Laws, under such Employee Plan, and WWT and its ERISA Affiliates
shall continue to do so through the Closing Date.
(i) WWT has no Employee Plan intended to qualify under Section 401
of the Code.
(j) Except as set forth on SCHEDULE 4.11(J) of the WWT Disclosure
Schedules, neither the execution and delivery of this Agreement or other related
agreements by WWT nor the consummation of the Transactions will result in the
acceleration or creation of any rights of any person to benefits under any
Employee Plan (including, without limitation, the acceleration of the vesting or
exercisability of any stock options, the acceleration of the vesting of any
restricted stock, the acceleration of the accrual or vesting of any benefits
under any Pension Plan or the acceleration or creation of any rights under any
severance, parachute or change in control agreement).
(k) Neither WWT nor any ERISA Affiliate has incurred any liability
with respect to any Employee Plan, which may create, or result in any liability
to Surviving Corporation.
4.12 LABOR MATTERS; EMPLOYEES. WWT is not a party to any collective
bargaining or other labor contract. There has not been, there is not presently
pending or existing, and, to the knowledge of WWT, there is not threatened (i)
any strike, slowdown, picketing, work stoppage or employee grievance process
against WWT or its business; (ii) any Legal Proceeding against or affecting WWT
or its business relating to the alleged violation of any Law or Order pertaining
to labor relations or employment matters; or (iii) union organizing campaign or
any application for certification of a collective bargaining agent. No event has
occurred or circumstance exists that could provide the basis for any work
stoppage or other labor dispute. There is no lockout of any employees by WWT,
and no such action is contemplated by WWT. WWT has complied with all material
Laws relating to employment, equal employment opportunity, nondiscrimination,
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harassment, retaliation, immigration, wages, hours, benefits, collective
bargaining, the payment of social security and similar Taxes, occupational
health and safety, and plant closing. WWT is not liable for the payment of any
compensation, damages, Taxes, fines, penalties or other amounts (including,
without limitation, amounts related to workplace safety and insurance), however
designated, for failure to comply with any of the foregoing Laws.
4.13 LEGAL PROCEEDINGS. There is no Legal Proceeding or Order (a) pending
or, to the knowledge of WWT, threatened or anticipated against or affecting WWT,
its assets or its business (or to the knowledge of WWT, pending or threatened,
against any of the officers, directors or employees of WWT with respect to their
business activities related to or affecting WWT's business); (b) that challenges
or that may have the effect of preventing, making illegal, delaying or otherwise
interfering with any of the Transactions; or (c) related to WWT's business or
WWT's assets to which WWT is otherwise a party. To the knowledge of WWT, there
is no reasonable basis for any such Legal Proceeding or Order. To the knowledge
of WWT, no officer, director, agent or employee of WWT is subject to any Order
that prohibits such officer, director, agent or employee from engaging in or
continuing any conduct, activity, or practice relating to WWT's business. Except
as set forth in the SEC Reports, neither WWT, its assets or its business is
subject to any Order of any Regulatory Authority and WWT is not engaged in any
Legal Proceeding to recover monies due it or for damages sustained by it. WWT is
not and has not been in default with respect to any Order, and there are no
unsatisfied judgments against WWT, its assets or its business. There is not a
reasonable likelihood of an adverse determination of any pending Legal
Proceedings. There are no Orders or agreements with, or Liens by, any Regulatory
Authority or quasi-governmental entity relating to any environmental Law, which
regulate, obligate, bind or in any way affect WWT or any property on which WWT
operates its business.
4.14 COMPLIANCE WITH LAW.
(a) WWT, to its knowledge, and the conduct of WWT's business are
and at all times have been in compliance with all Laws or Orders applicable to
them or to the conduct and operations of WWT's business. WWT has not received
any notice to the effect that, or otherwise been advised of (i) any actual,
alleged, possible or potential violation of, or failure to comply with, any such
Laws or Orders or (ii) any actual, alleged, possible or potential obligation on
the part of WWT to undertake, or to bear all or any portion of the cost of, any
remedial action of any nature. No event has occurred or circumstance exists that
(with or without notice or lapse of time) (i) may constitute or result in a
violation by WWT of, or a failure on the part of WWT, any such Laws or Orders or
(ii) may give rise to any obligation on the part of WWT to undertake, or to bear
all or any portion of the cost of, any remedial action of any nature, except, in
either case separately or the cases together, where such violation or failure to
comply could not reasonably be expected to have a Material Adverse Effect on
WWT.
(b) None of WWT, or any of its directors, officers or
Representatives or to the knowledge of WWT, any employee or other Person
affiliated with or acting for or on behalf of WWT, has, directly or indirectly,
(i) made any contribution, bribe, rebate, payoff, influence payment, kickback or
other payment to any Person, private or public, regardless of form, whether in
money, property or services (A) to obtain favorable treatment in securing
business, (B) to pay for favorable treatment for business secured, (C) to obtain
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special concessions or for special concessions already obtained, for or in
respect of WWT or any of its Affiliates or (D) in violation of any Laws of the
United States (including, without limitation, the Foreign Corrupt Practices Act
of 1977, as amended (15 U.S.C. Sections 78dd-1 et seq.)) or any laws of any
other country having jurisdiction; or (ii) established or maintained any fund or
asset that has not been recorded in the books and records of WWT.
4.15 PERMITS. SCHEDULE 4.15(A) of the WWT Disclosure Schedules sets forth
a complete list of all Permits held by WWT or used in the conduct of its
business, and such Permits collectively constitute all of the Permits necessary
for WWT to lawfully conduct and operate its business, as it is presently
conducted and to permit WWT to own and use its assets in the manner in which
they are presently owned and used. WWT is and at all times has been in
compliance with all material Permits applicable to it or to the conduct and
operations of WWT's business. WWT has not received any notice to the effect
that, or otherwise been advised of (i) any actual, alleged, possible or
potential violation of, or failure to comply with, any such Permits or (ii) any
actual, alleged, possible or potential revocation, withdrawal, suspension,
cancellation or termination of, or any modification to, any Permit set forth on
or required to be set forth on SCHEDULE 4.15(A) of the WWT Disclosure Schedules.
No event has occurred, and to WWT's knowledge no circumstance exists, that (with
or without notice or lapse of time) (i) may constitute or result directly or
indirectly in a violation by WWT of, or a failure on the part of WWT to comply
with, any such Permits or (ii) result directly or indirectly in the revocation,
withdrawal, suspension, cancellation or termination of, or any modification to,
any Permit set forth on or required to be set forth on SCHEDULE 4.15(A) of the
WWT Disclosure Schedules. All applications for or renewals of all Permits have
been timely filed and made and no Permit will expire or be terminated as a
result of the consummation of the transactions contemplated by this Agreement.
No present or former shareholder, director, officer or employee of WWT or any
Affiliate thereof, or any other Person, owns or has any proprietary, financial
or other interest (direct or indirect) in any Permit that WWT owns, possesses or
uses.
4.16 ABSENCE OF CERTAIN CHANGES. Except as set forth in the SEC Reports,
since the date of the WWT Financial Statements, there has not been any: (a)
purchase, redemption, retirement or other acquisition by WWT of any WWT Capital
Stock or other equity interest of WWT; (b) amendments to the Organizational
Documents of WWT; (c) payment or increase by WWT of any bonuses, salaries or
other compensation (including management or other similar fees) or entry into
any employment, severance or similar Contract with any employee engaged in WWT's
business and which the Surviving Corporation is required to hire after Closing,
other than increases in salary to employees made in the Ordinary Course of
Business; (d) adverse change in employee relations which has or is reasonably
likely to have a Material Adverse Effect on WWT's business; (e) entry into,
termination or acceleration of, or receipt of notice of termination by WWT of
(1) any material license, distributorship, dealer, sales representative, joint
venture, credit or similar agreement relating to WWT's business, or (2) any
Contract or transaction involving a Liability by or to WWT for which the
Surviving Corporation may be liable after the Closing (other than the
Liabilities set forth in the SEC Reports, Liabilities reflected on the WWT
Financial Statements which have not been paid or discharged since the date of
the WWT Financial Statements, and Liabilities relating to WWT's business
incurred in the Ordinary Course of Business since the date of the WWT Financial
Statements); (f) mortgage, pledge or imposition of any Lien on any assets or
property of WWT relating to WWT's business, including the sale, lease or other
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disposition of any of its Intellectual Property relating to WWT's business; (j)
(1) delay or failure to repay when due any obligation of WWT, which delay or
failure could have a Material Adverse Effect on WWT, other than such items as
have been specifically documented to WWT in writing or (2) delay or failure to
repay when due any obligation of WWT which delay or failure could have a
Material Adverse Effect on WWT, WWT's business or on any assets or property of
WWT relating to WWT's business; (g) cancellation or waiver by WWT of any claims
or rights with a value to WWT relating to its business in excess of Fifty
Thousand Dollars ($50,000) individually or in the aggregate; (h) licensing out
on an exclusive basis or other than in the Ordinary Course of Business,
disposition or lapsing of any Intellectual Property or any disclosure to any
Person of any trade secret or other confidential information without appropriate
protections in place; (n) change in the accounting methods, principles or
practices used by WWT; or (i) agreement, whether oral or written, by WWT with
respect to or to do any of the foregoing other than as expressly provided for
herein.
4.17 INSURANCE. SCHEDULE 4.17 of the WWT Disclosure Schedules sets forth
a complete and accurate list (showing as to each policy or binder the carrier,
policy or binder the carrier, policy number, coverage limits, expiration dates,
annual premiums and a general description of the type of coverage provided) of
all policies or binders of insurance of any kind or nature covering WWT, its
business, or any employees, properties or assets of WWT relating to its
business, including, without limitation, policies of life, disability, fire,
theft, workers compensation, employee fidelity and other casualty and liability
insurance. All such policies are in full force an effect. WWT is not in default
under any of such policies or binders, and WWT has not failed to give any notice
or to present any claim under any such policy or binder in a due and timely
fashion.
4.18 RESTRICTIONS ON BUSINESS ACTIVITIES. Except as set forth in the SEC
Reports, there is no agreement, judgment, injunction, order or decree binding
upon WWT or any of its Subsidiaries which has the effect of prohibiting or
materially impairing (a) any current or future business practice of WWT or any
of its Subsidiaries or (b) any acquisition of any Person or property by WWT or
any of its Subsidiaries, except in each of clauses (a) and (b) for any such
prohibitions or impairments that would not reasonably be expected to have a
Material Adverse Effect on WWT.
4.19 RELATED PARTY TRANSACTIONS. Except as set forth in the SEC Reports,
none of WWT, any Affiliate thereof, holders of the capital stock or other
ownership interest of WWT or any Affiliate or Family Member thereof is presently
or has, since the date of the WWT Financial Statements, borrowed any moneys from
or has any outstanding debt or other obligations to WWT or is presently a party
to any transaction with WWT relating to WWT's business. Except as set forth in
the SEC Reports, none of WWT, any Affiliate thereof, or any director, officer or
key employee of any such Persons (a) owns any direct or indirect interest of any
kind in (except for ownership of less than 1% of any public company, provided,
that such owner's role is that solely of a passive investor), or controls or is
a director, officer, employee or partner of, consultant to, lender to or
borrower from, or has the right to participate in the profits of, any Person
which is (i) a competitor, supplier, customer, landlord, tenant, creditor or
debtor of WWT, (ii) engaged in a business related to WWT's business or (iii) a
participant in any transaction to which WWT is a party, or (b) is a party to any
Contract with WWT. Except as set forth on SCHEDULE 4.19 of the WWT Disclosure
Schedules, WWT has no Contract or understanding with any officer, director or
key employee of WWT or any of WWT's shareholders or any Affiliate or Family
Member thereof with respect to the subject matter of this Agreement, the
consideration payable hereunder or any other matter.
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4.20 BROKERS OR FINDERS. Except as set forth on SCHEDULE 4.20 of the WWT
Disclosure Schedules, all negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by WWT or its Affiliates
in connection with the transactions contemplated by this Agreement, and neither
WWT, or Affiliates has incurred any obligation to pay any brokerage or finder's
fee or other commission in connection with the transaction contemplated by this
Agreement.
4.21 NO OTHER AGREEMENTS. Except as set forth in the SEC Reports, and
other than this Agreement or any agreement contemplated hereby, neither WWT, nor
any of its stockholders, officers, directors or Affiliates has any legal
obligation, absolute or contingent, to any other Person to sell, assign or
transfer any capital stock of or other equity interest (other than warrants or
options in favor of WWT's officers, directors or employees, if any) in WWT or to
effect any merger, consolidation or other reorganization of WWT or to enter into
any agreement with respect thereto.
4.22 DISCLOSURE. No representation or warranty of WWT in this Agreement
or in any Collateral Document and no statement in any certificate furnished or
to be furnished by WWT pursuant to this Agreement contained, contains or will
contain on the date such agreement or certificate was or is delivered, or on the
Closing Date, any untrue statement of a material fact, or omitted, omits or will
omit on such date to state any material fact necessary in order to make the
statements made, in light of the circumstances under which they were made, not
misleading.
4.23 REAL PROPERTY; TITLE TO PROPERTY.
(a) WWT does not own any real property or any interest, other than
a leasehold interest, in any real property. A description of all real property
leased by WWT and its Subsidiaries and all subleases thereto is included in the
SEC Reports. Except for leases and subleases set forth in the SEC Reports, there
are no leases, subleases, licenses, occupancy agreements, options, rights,
concessions or other agreements or arrangements, written or oral, granting to
any Person the right to purchase, use or occupy any real property used in
connection with WWT's business or any portion thereof or interest in any such
real property.
(b) WWT and its Subsidiaries have good and marketable title to all
of its properties, interests in properties and assets, real and personal,
reflected in WWT Financial Statements or acquired after date of the WWT
Financial Statements, or with respect to leased properties and assets, valid
leasehold interests in, free and clear of all mortgages, liens, pledges, charges
or encumbrances of any kind or character, except (i) Liens for current Taxes not
yet due and payable or which are being contested by WWT in good faith, (ii) such
imperfections of title, liens and easements as do not and will not materially
detract from or interfere with the use of the properties subject thereto or
affected thereby, or otherwise materially impair business operations involving
such properties, (iii) Liens securing debt which is reflected on WWT Financial
Statements, and (iv) any Liens described in the SEC Reports.
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4.24 CONDUCT OF BUSINESS. Except as otherwise provided herein, WWT shall
not amend its Organizational Documents, declare dividends, redeem or sell stock
or other securities, enter into any material or long-term contract, guarantee
obligations of any third party, settle or discharge any material balance sheet
receivable for less than its stated amount, pay more on any liability than its
stated amount or enter into any other transaction other than in the regular
course of business.
ARTICLE V
COVENANTS OF THE PARTIES
The Parties hereby agree as follows:
5.1 XXXXXX EMPLOYMENT AGREEMENT. As soon as practicable following the
execution of this Agreement, but in any event prior to the Closing Date, Agent
shall execute and enter into an employment agreement with Vertex Nevada, in
substantially the form attached hereto as EXHIBIT D (the "XXXXXX EMPLOYMENT
AGREEMENT").
5.2 TERMINATION OF XXXXXX GUARANTEES. As soon as practicable following
the execution of this Agreement, the Parties shall use commercially reasonable
efforts to cause the release and termination of all personal guarantees (the
"XXXXXX GUARANTEES") provided by Agent and his Family Members in respect of an
aggregate of $1.6 million of Indebtedness owed by Vertex LP to Regents Bank.
5.3 TRANSFER. The Agent shall cause the Transfer to occur prior to the
Closing.
5.4 FAIRNESS HEARING. As soon as practicable following the execution of
this Agreement, and in order to qualify for an exemption pursuant to Section
3(a)(10) of the Securities Act, the Parties shall work together to prepare an
application for submission to the California Department of Corporations seeking
a fairness hearing regarding the issuance of the Merger Consideration. The
Parties shall cooperate with each other in connection with any hearing so held
pursuant to the application. In the event that the Parties are unable to obtain
the necessary ruling from the California Department of Corporations (or if WWT
believes, based on advice of its counsel, that such approval is not likely to be
obtained without making material changes to the terms of the Merger), the
Parties will work together to prepare and file with the SEC a Registration
Statement of Vertex Nevada on Form S-4 (which shall be filed jointly with the
Proxy Statement referred to below) to register the issuance of the Merger
Consideration.
5.5 PROXY STATEMENT. As soon as practicable following the execution of
this Agreement, the Parties shall work together to prepare and file with the SEC
a proxy statement in respect of the Merger and the transactions contemplated
hereby (the "PROXY STATEMENT"), which Proxy Statement shall be used in respect
of soliciting approval of the Merger and this Agreement by WWT's shareholders.
Without limiting the generality of the foregoing, Vertex LP shall work
diligently to prepare those sections of the Proxy Statement that relate to the
Vertex Business.
5.6 WWT OPERATIONS. As of the Effective Time, all of WWT's assets,
Intellectual Property and Contracts shall be vested in the Surviving
Corporation. Immediately following the Effective Time, a total of $5.0 million
in cash shall be distributed by the Surviving Corporation to Vertex Nevada. As
of the Closing, management of the Surviving Corporation shall own options to
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acquire up to a total of 30% of the ownership interests of the Surviving
Corporation. In addition, effective as of the Closing, Vertex Nevada shall enter
into a management agreement with such members of management of the Surviving
Corporation as shall be designated by WWT prior to the Closing (the "WWT
MANAGEMENT"), pursuant to which Vertex Nevada will in good faith endeavor to
execute an agreed-upon business plan (the "WWT MANAGEMENT AGREEMENT"). The WWT
Management Agreement will provide that, in the event that the Surviving
Corporation is unable to consummate a Qualified Financing within 180 days of the
Closing Date, any cash on hand at the Surviving Corporation (less an amount
necessary to satisfy any of the Surviving Corporation's Liabilities) shall be
distributed to Vertex Nevada.
5.7 REPORTING COMPANY AND SEC COMPLIANCE. The Parties hereto acknowledge
that as of the Effective Time, the Vertex Common Stock shall be deemed to be
registered under Section 12(g) of the Exchange Act pursuant to the provisions of
Rule 12g-3 thereunder. The Vertex Parties hereby covenant that Vertex Nevada
shall thereafter take all action, and do all things, necessary to maintain
compliance with any and all rules and regulations of the Exchange Act applicable
to a Person subject to the reporting requirements thereunder, and to maintain
the trading of the Vertex Common Stock on the OTC Bulletin Board or on any
nationally recognized securities exchange.
5.8 DUE DILIGENCE. Each Party shall provide to the other and their
respective Representatives such financial, operating and other documents, data
and information relating to such Party, and their respective businesses,
properties, assets and liabilities, as each Party, or its representatives may
reasonably request. In addition, each Party hereby agrees to take all action
necessary to enable their respective Representatives to review, inspect and
audit each Party's business, properties, assets and liabilities in connection
with such Party's due diligence investigation of the other Parties, and discuss
them with such Party's Representatives. Notwithstanding any investigation that
any Party may conduct of the other Parties, or their respective businesses,
properties, assets and liabilities, each Party may fully rely on the other
Party's warranties, covenants and indemnities set forth in this Agreement.
5.9 CONSENTS AND APPROVALS. As soon as practicable after execution of
this Agreement, the Parties shall use commercially reasonable efforts to obtain
any necessary consents, approvals, authorizations or orders of, make any
registrations or filings with or give any notices to, any Regulatory Authority
or Person as is required to be obtained, made or given by any Party to
consummate the transactions contemplated by this Agreement and the Collateral
Documents.
5.10 NOTIFICATION OF ADVERSE CHANGE AND CERTAIN MATTERS. Each Party shall
promptly notify the other Parties of any material adverse change in the
condition (financial or otherwise) of such Party. Each Party shall promptly
notify the other Parties of any fact, event, circumstance or action known to it
that is reasonably likely to cause such Party to be unable to perform any of its
covenants contained herein or any condition precedent in Article 6 not to be
satisfied, or that, if known on the date of this Agreement, would have been
required to be disclosed to another Party pursuant to this Agreement or the
existence or occurrence of which would cause any of such Party's representations
or warranties under this Agreement not to be correct and/or complete. Each Party
shall give prompt written notice to the other Parties of any adverse development
causing a breach of any of the representations and warranties in Articles 3 and
4 as of the date made.
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5.11 MEETING OF THE SHAREHOLDERS. Promptly after the date hereof, and
subject to SEC review of the Proxy Statement, WWT will take all action necessary
in accordance with its Organizational Documents to convene a meeting of its
shareholders, or seek the written consent of its shareholders to consider the
adoption and approval of this Agreement and approval of the Merger to be held as
promptly as practicable (including, without limitation, approval by each class
of WWT Capital Stock issued and outstanding as of the date hereof). WWT will use
its commercially reasonable efforts to solicit from its shareholders proxies in
favor of the adoption and approval of this Agreement and the approval of the
Merger.
5.12 DISCLOSURE SCHEDULES. Each Party shall, from time to time prior to
Closing, supplement its Disclosure Schedules attached hereto with additional
information that, if existing or known to it on the date of delivery to the
other Party, would have been required to be included therein. For purposes of
determining the satisfaction of any of the conditions to the obligations of any
Party in Article 6 hereof, the Disclosure Schedules of such Party shall be
deemed to include only (a) the information contained therein on the date of this
Agreement and (b) information added to such Party's Disclosure Schedule by
written supplements delivered prior to Closing by such Party that (i) are
accepted in writing by the receiving Party, or (ii) reflect actions taken or
events occurring after the date hereof prior to Closing.
5.13 STATE STATUTES. The Parties and their respective Boards of Directors
shall, if any state takeover statute or similar law is or becomes applicable to
the Merger, this Agreement or any of the transactions contemplated by this
Agreement, use all reasonable efforts to ensure that the Merger and the other
transactions contemplated by this Agreement may be consummated as promptly as
practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on the Merger, this Agreement
and the transactions contemplated hereby.
5.14 NO SOLICITATION. Until the earlier of the Closing or the date of
termination of this Agreement pursuant to the provisions of Article 8 hereof, no
Vertex Party nor any of their respective officers, directors, agents, investment
bankers or other representatives of any of them (collectively, the
"REPRESENTATIVES") will, directly or indirectly, (i) solicit, engage in
discussions or negotiate with any Person (regardless of who initiates such
discussions or negotiations), or take any other action intended or designed to
facilitate the efforts of any Person, other than the parties hereto, relating to
the possible acquisition of Vertex LP (whether by way of purchase of partnership
interest, capital stock, purchase of assets or otherwise) or any significant
portion of its interests, capital stock or assets by any Person other than the
parties hereto (an "ALTERNATIVE Acquisition"), (ii) provide information with
respect to Vertex LP or any Person relating to a possible Alternative
Acquisition by any Person, (iii) enter into an agreement with any Person
providing for a possible Alternative Acquisition, or (iv) make or authorize any
statement, recommendation or solicitation in support of any possible Alternative
Acquisition by any Person. Each Vertex Party shall cause its Representatives to
immediately cease and cause to be terminated all existing discussions or
negotiations with any Person heretofore conducted with respect to any possible
Alternative Acquisition.
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5.15 CONDUCT OF BUSINESS. The Vertex Parties agree that during the period
from the date of this Agreement and continuing until the earlier of the
termination of this Agreement pursuant to the provisions of Article 8 hereof or
the Closing, Vertex LP shall (unless otherwise required by this Agreement or WWT
has given its prior written consent to the Vertex Parties) carry on its business
in the ordinary course consistent with past practice, pay its Taxes and other
obligations consistent with its past practices, pay or perform other obligations
when due consistent with its past practices, subject to any good faith disputes
over such Taxes and other obligations and, to the extent consistent with such
business, use reasonable efforts and institute all policies to preserve intact
its present business organization, keep available the services of its present
officers and key employees, preserve its relationships with customers,
suppliers, distributors, licensors, licensees, independent contractors and other
Persons having business dealings with it, all with the express purpose and
intent of preserving unimpaired its goodwill and ongoing businesses at the
Closing.
5.16 CONFIDENTIALITY. WWT and the Vertex Parties acknowledge and agree
that the terms and conditions described in this Agreement, including its
existence, as well as the non-public information and data furnished to them or
their respective Representatives from the first introduction of the Parties and
throughout the negotiation and drafting of this Agreement is confidential and
will not be disclosed to any third party, or used for any purpose not
specifically contemplated herein, without prior written consent of the other
Party, unless otherwise required by Law (including as required by the rules and
regulations of the SEC) or unless it ceases to be confidential through no breach
of the receiving party.
5.17 INSIDER LOCK-UPS. Prior to the Closing, WWT shall use commercially
reasonable efforts to cause its officers, directors, and certain founders to
agree to enter into a lock-up agreement on the same terms as the Vertex Lock-Up.
5.18 VERTEX FINANCIAL STATEMENTS. Promptly following execution of this
Agreement, the Vertex Parties shall prepare the Vertex Financial Statements and
shall retain a PCAOB-certified auditing firm to audit the Vertex Financial
Statements. The foregoing audit shall include an audit of the operations of the
Vertex Business as a separate division of Vertex LP as of and for the three
years ended December 31, 2007.
5.19 LOCK-UP. Each shareholder of Vertex Nevada immediately prior to the
Closing will enter into an agreement with Vertex Nevada pursuant to which each
such shareholder agrees that it will not sell or otherwise transfer any of its
shares of Vertex Common Stock during the 12-month period following the Closing
and that, prior to the three-year anniversary of the Closing, it will not, in
any given three-month period, sell more than that number of shares of Vertex
Common Stock as equals 5% of the total number of shares of Vertex Common Stock
then beneficially owned by such shareholder (in each case except for transfers
to recipients that agree to comply with the foregoing restrictions) (a "VERTEX
LOCK-UP").
5.20 INSURANCE. Prior to the Closing, Vertex Nevada shall procure
insurance policies in such amounts and covering such matters as are customary
with respect to the Vertex Business.
5.21 FOREIGN QUALIFICATIONS. Prior to the Closing, Vertex Nevada shall be
qualified as a foreign corporation to do business in Texas.
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5.22 INDEMNIFICATION AGREEMENTS. At the Closing, Vertex Nevada shall
assume all of WWT's obligations under the Indemnification Agreements.
5.23 CMT AGREEMENTS. The Parties shall negotiate, in good faith, a ground
sub-lease, a purchase and sale agreement and such other necessary documentation
(collectively, the "CMT AGREEMENTS"), which agreements shall include the terms
and conditions set forth on EXHIBIT E.
5.24 RELATED PARTY TRANSACTION COMMITTEE. Promptly following the Closing,
the Agent shall cause the Board of Directors of Vertex Nevada to create a
committee of its Board to be known as the "Related Party Transaction Committee".
A majority of the members of this committee shall be Independent Directors,
which shall include at least two Independent Directors. The Agent shall not
serve on this Committee. This committee shall be charged with the review and
pre-approval of any and all related party transactions, including between Vertex
Nevada and Vertex LP, Xxx Xxxxxx, or any other company or individual which may
be affiliated with Xxx Xxxxxx.
5.25 RIGHT OF FIRST REFUSAL AND RELATED RIGHTS. Effective as of the
Closing, Vertex Nevada shall have: (a) a right of first refusal to match any
third party offer to purchase any Xxxxxx Party (as defined below) on the terms
and conditions set forth in such offer (the "RIGHT OF FIRST REFUSAL"); and (b)
the option (the "OPTION"), which can be exercised in Vertex Nevada's sole
discretion, exercisable after the expiration of eighteen (18) months following
the Closing (the "OPTION DATE"), to purchase all or any part thereof of the
outstanding stock of any Xxxxxx Party (as defined below) owned by Vertex LP or
VTX, Inc., at a price based on an independent third-party evaluation and
appraisal of the fair market value of such Xxxxxx Party. The Option shall be
exercisable at any time following the Option Date in the sole discretion of the
majority vote of the Related Party Transaction Committee. For the purposes of
this paragraph, a "XXXXXX PARTY" shall be defined as one or more of the
following: Cross Road Carriers, Vertex Recovery (or its subsidiaries), Cedar
Marine Terminals, LP, Vertex Residual Management Group, LP, Vertex Green, LP,
VTX, Inc. or any other entity which is majority owned or controlled by Xxx
Xxxxxx. The Right of First Refusal and the Option shall only be exercisable by
Vertex Nevada during such time as Xxx Xxxxxx is employed by Vertex Nevada as the
President and Chief Executive Officer of Vertex Nevada pursuant to the terms of
an Employment Agreement substantially similar to the Employment Agreement Xx.
Xxxxxx will enter into with Vertex Nevada at Closing. Nothing in this paragraph
shall prevent Vertex Nevada from purchasing any or all of the interests in any
Xxxxxx Party prior to the Option Date on terms mutually agreeable to Vertex
Nevada and such Xxxxxx Party, provided however that any such transaction
includes a fairness opinion passing as to the fairness of the transaction to
Vertex Nevada.
5.26 LICENSE. At the Closing, Vertex LP will grant to Vertex Nevada a
perpetual, royalty-free, transferable, irrevocable license to the name "Vertex."
5.27 VERTEX NEVADA DIRECTORS. Promptly following the date hereof, the
Agent shall notify WWT of the four individuals who will serve on the Board of
Directors of Vertex Nevada as of the Closing as the appointees of the holder of
the Vertex Series B Preferred Stock, and will provide WWT with background
information regarding each such individual. The Agent covenants that at least
one of these individuals will be an Independent Director.
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5.28 VERTEX OPTION GRANTS. After the date hereof, and whether prior to or
after the Closing, Vertex Nevada shall not issue any compensatory options unless
such options have an exercise price at or above the fair market value of the
Vertex Common Stock as of the date of grant, and such issuances are approved by
the Related Party Transactions Committee. The Parties further agree and
acknowledge that, in the event that any such options are issued by Vertex Nevada
prior to the Closing, the determination of the fair market value of the Vertex
Common Stock shall be made by Vertex Nevada in consultation with WWT and the
issuer of the WWT fairness opinion (as described in Section 6.2(g)) and shall
not be inconsistent with any valuation of Vertex Nevada utilized by the issuer
of such opinion.
ARTICLE VI
CLOSING CONDITIONS
6.1 CONDITIONS TO VERTEX PARTIES' OBLIGATION TO CLOSE. The obligations
of the Vertex Parties to consummate the transactions provided for hereby are
subject to the satisfaction, before or on the Closing Date, of each of the
conditions set forth below in this Section 6.1, any of which may be waived by
the Vertex Parties:
(a) ACCURACY OF REPRESENTATIONS. All representations and
warranties of WWT contained in this Agreement, the Collateral Documents and any
certificate delivered by WWT at or prior to Closing shall be, if specifically
qualified by materiality, true in all respects and, if not so qualified, shall
be true in all material respects, in each case on and as of the Closing Date
with the same effect as if made on and as of the Closing Date, except for
representations and warranties expressly stated to be made as of the date of
this Agreement or as of another date other than the Closing Date and except for
changes contemplated or permitted by this Agreement. WWT shall have delivered to
the Vertex Parties a certificate dated the Closing Date to the foregoing effect.
(b) COVENANTS. WWT shall, in all material respects, have performed
and complied with each of the covenants, obligations and agreements contained in
this Agreement and the Collateral Documents that are to be performed or complied
with by it at or prior to Closing. WWT shall have delivered to the Vertex
Parties a certificate dated the Closing Date to the foregoing effect.
(c) CONSENTS AND APPROVALS. All consents, approvals, permits,
authorizations and orders required to be obtained from, and all registrations,
filings and notices required to be made with or given to any Regulatory
Authority or Person as provided herein, if any, shall have been so obtained or
filed with such Regulatory Authority or Person.
(d) SHAREHOLDER APPROVAL. All WWT shareholder approval, as
required under any applicable Law, shall have been obtained to approve the
transactions contemplated hereunder including the approval of the Merger, this
Agreement and the transactions contemplated hereby.
(e) ISSUANCE EXEMPTION. Either (i) the issuance of the Merger
Consideration shall be exempt from registration pursuant to Section 3(a)(10) of
the Securities Act, or (ii) a Registration Statement on Form S-4 registering the
issuance of the Merger Consideration shall have been filed and declared
effective by the SEC.
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(f) CASH. WWT shall have cash and cash equivalents totaling at
least $5.0 million.
(g) TERMINATION OF XXXXXX GUARANTEES. The Xxxxxx Guarantees shall
have been terminated.
(h) NO LIABILITIES. WWT shall have no Liabilities other than up to
$2.4 million of indebtedness.
(i) DISTRIBUTION OF CASH AND WARRANTS. WWT shall have delivered
(i) $4.4 million in cash and (ii) the Make-Whole Warrants, in each case to the
Agent on behalf of the Vertex Shareholders. The Make-Whole Warrants are
described on EXHIBIT F to this Agreement. The Parties acknowledge that the
Make-Whole Warrants are being issued to the Vertex Shareholders so that
immediately following the Merger, the Vertex Shareholders hold 40% of all
outstanding options and warrants of Vertex Nevada (exclusive of warrants to
purchase 933,920 shares with a nominal exercise price and exclusive of the
6,000,000 options reserved by Vertex Nevada for issuance to employees, directors
and consultants). Accordingly, the Parties agree that in the event that between
the date hereof and the Closing, any WWT Options expire or are cancelled without
being exercised, the number of Make-Whole Warrants shall be reduced to take such
expiration or cancellation into effect.
(j) NO LEGAL PROCEEDINGS. No injunction, action, suit or
proceeding shall be pending or threatened by or before any Regulatory Authority
and no Law shall have been enacted, promulgated or issued or deemed applicable
to any of the transactions contemplated by this Agreement or the Collateral
Documents, which would: (i) prevent consummation of any of the transactions
contemplated by this Agreement or the Collateral Documents; (ii) cause any of
the transactions contemplated by this Agreement or the Collateral Documents to
be rescinded following consummation; or (iii) have a Material Adverse Effect on
a Party, the Merger, this Agreement or the transactions contemplated hereby.
(k) RESIGNATION LETTERS. WWT shall have delivered to the Vertex
Parties letters of resignation from WWT's current officers and directors.
6.2 CONDITIONS TO WWT'S OBLIGATION TO CLOSE. The obligations of WWT to
consummate the transactions provided for hereby are subject to the satisfaction,
before or on the Closing Date, of each of the conditions set forth below in this
Section 6.2, any of which may be waived by WWT:
(a) ACCURACY OF REPRESENTATIONS. All representations and
warranties of each of the Vertex Parties contained in this Agreement, the
Collateral Documents and any certificate delivered by the Vertex Parties at or
prior to Closing shall be, if specifically qualified by materiality, true in all
respects and, if not so qualified, shall be true in all material respects, in
each case on and as of the Closing Date with the same effect as if made on and
as of the Closing Date, except for representations and warranties expressly
stated to be made as of the date of this Agreement or as of another date other
than the Closing Date and except for changes contemplated or permitted by this
Agreement. The Vertex Parties shall have delivered to WWT a certificate dated
the Closing Date to the foregoing effect.
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(b) COVENANTS. The Vertex Parties shall, in all material respects,
have performed and complied with each of the covenants, obligations and
agreements contained in this Agreement and the Collateral Documents that are to
be performed or complied with by any of them at or prior to Closing. The Vertex
Parties shall have delivered to WWT a certificate dated the Closing Date to the
foregoing effect.
(c) CONSENTS AND APPROVALS. All consents, approvals, permits,
authorizations and orders required to be obtained from, and all registrations,
filings and notices required to be made with or given to any Regulatory
Authority or Person as provided herein, if any, shall have been so obtained or
filed with such Regulatory Authority or Person.
(d) SHAREHOLDER APPROVAL. All shareholder approval, as required
under any applicable Law, shall have been obtained to approve the transactions
contemplated hereunder including the approval of the Merger, this Agreement and
the transactions contemplated hereby.
(e) ISSUANCE EXEMPTION. Either (i) the issuance of the Merger
Consideration shall be exempt from registration pursuant to Section 3(a)(10) of
the Securities Act, or (ii) a Registration Statement on Form S-4 registering the
issuance of the Merger Consideration shall have been filed and declared
effective by the SEC.
(f) VERTEX FINANCIAL STATEMENTS. The Vertex Parties shall have
delivered, or caused to be delivered, to WWT the Vertex Financial Statements
with an unqualified report thereon by an independent accounting firm acceptable
to WWT.
(g) FAIRNESS OPINION. WWT shall have received a fairness opinion
in form and substance satisfactory to it passing on the fairness of the
transactions contemplated herein to each class of the shareholders of WWT from a
financial perspective.
(h) DUE DILIGENCE. WWT shall be satisfied with the results of its
due diligence investigation of Vertex.
(i) NO MATERIAL ADVERSE CHANGE. Since the date hereof, there shall
have been no material adverse change in the Vertex Business.
(j) NO LEGAL PROCEEDINGS. No injunction, action, suit or
proceeding shall be pending or threatened by or before any Regulatory Authority
and no Law shall have been enacted, promulgated or issued or deemed applicable
to any of the transactions contemplated by this Agreement or the Collateral
Documents, which would: (i) prevent consummation of any of the transactions
contemplated by this Agreement or the Collateral Documents; (ii) cause any of
the transactions contemplated by this Agreement or the Collateral Documents to
be rescinded following consummation; or (iii) have a Material Adverse Effect on
a Party, the Merger, this Agreement or the transactions contemplated hereby.
(k) WWT MANAGEMENT AGREEMENT. Vertex Nevada and the WWT Management
shall have entered into the WWT Management Agreement.
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(l) VERTEX LOCKUP. Each shareholder of Vertex Nevada immediately
prior to the Closing shall have entered into a Vertex Lock-Up.
(m) TRANSFER. The Transfer shall have occurred.
(n) INDEMNIFICATION AGREEMENTS. Vertex Nevada shall have assumed
all of WWT's obligations under the Indemnification Agreements.
(o) CMT AGREEMENTS. The CMT Agreements shall have been executed by
all of the parties thereto.
(p) PROPRIETARY INVENTIONS AGREEMENTS. The Vertex Parties shall
have delivered to WWT propriety inventions agreements with each of the employees
and consultants of Vertex LP.
ARTICLE VII
INDEMNIFICATION
7.1 INDEMNIFICATION BY WWT. WWT shall indemnify, defend and hold
harmless the Vertex Parties, and each of their respective shareholders, members,
partners, directors, officers, managers, employees, agents, attorneys and
representatives, from and against any and all Losses which may be incurred or
suffered by any such party and which may arise out of or result from any breach
of any material representation, warranty, covenant or agreement of WWT contained
in this Agreement.
7.2 INDEMNIFICATION BY THE VERTEX PARTIES. The Vertex Parties shall,
jointly and severally, indemnify, defend and hold harmless WWT and its
shareholders, members, partners, directors, officers, managers, employees,
agents, attorneys and representatives from and against any and all Losses which
may be incurred or suffered by any such party hereto and which may arise out of
or result from any breach of any material representation, warranty, covenant or
agreement of any of the Vertex Parties contained in this Agreement.
7.3 INDEMNIFICATION PROCEDURES.
(a) In the event that any Legal Proceeding shall be instituted or
any claim or demand shall be asserted (individually and collectively, a "CLAIM")
by any Person in respect of which payment may be sought under this Article 7,
the indemnified party shall reasonably and promptly cause written notice (a
"CLAIM NOTICE") of the assertion of any Claim of which it has knowledge which is
covered by this indemnity to be delivered to the indemnifying party; PROVIDED,
HOWEVER, that the failure of the indemnified party to give the Claim Notice
shall not release, waive or otherwise affect the indemnifying party's
obligations with respect thereto, except to the extent that the indemnifying
party can demonstrate actual loss and material prejudice as a result of such
failure. If the indemnifying party shall notify the indemnified party in writing
within five (5) Business Days (or sooner, if the nature of the Claim so
requires) that the indemnifying party shall be obligated under the terms of its
indemnity hereunder in connection with such lawsuit or action, then the
indemnifying party shall be entitled, if it so elects at its own cost, risk and
expense, (i) to take control of the defense and investigation of such lawsuit or
action, (ii) to employ and engage attorneys of its own choice, but, in any
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event, reasonably acceptable to the indemnified party, to handle and defend the
same unless the named parties to such action or proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and the indemnified party has been advised in writing by counsel that there may
be one or more material legal defenses available to such indemnified party that
are different from or additional to those available to the indemnifying party,
in which event the indemnified party shall be entitled, at the indemnifying
party's cost, risk and expense, to a single firm of separate counsel (plus any
necessary local counsel), all at reasonable cost, of its own choosing,
reasonably acceptable to the indemnifying party and (iii) to compromise or
settle such lawsuit or action, which compromise or settlement shall be made only
with the prior written consent of the indemnified party, such consent not to be
unreasonably withheld or delayed.
(b) If the indemnifying party elects not to defend against,
negotiate, settle or otherwise deal with any Claim which relates to any Losses
indemnified against hereunder, fails to notify the indemnified party of its
election as provided in this Article 7 or contests its obligation to indemnify
the indemnified party for such Losses under this Agreement, the indemnified
party may defend against, negotiate, settle or otherwise deal with such Claim.
If the indemnified party defends any Claim, then the indemnifying party shall
reimburse the indemnified party for the Losses incurred in defending such Claim
upon submission of periodic bills. If the indemnifying party shall assume the
defense of any Claim, the indemnified party may participate, at its own expense,
in the defense of such Claim; PROVIDED, HOWEVER, that such indemnified party
shall be entitled to participate in any such defense with separate counsel at
the expense of the indemnifying party if (i) so requested by the indemnifying
party to participate or (ii) in the reasonable opinion of counsel to the
indemnified party, a material conflict or potential material conflict exists
between the indemnified party and the indemnifying party that would make such
separate representation required; and PROVIDED, FURTHER, that the indemnifying
party shall not be required to pay for more than one such counsel for all
indemnified parties in connection with any Claim. If the indemnifying party
shall assume the defense of any Claim, the indemnifying party shall obtain the
prior written consent of the indemnified party before entering into any
settlement of such Claim or ceasing to defend such Claim if, pursuant to or as a
result of such settlement or cessation, injunctive or other equitable relief
shall be imposed against the indemnified party or if such settlement or
cessation does not expressly and unconditionally release the indemnified party
from all Liabilities or obligations with respect to such Claim, with prejudice.
The Parties hereto agree to cooperate fully with each other in connection with
the defense, negotiation or settlement of any Claim.
ARTICLE VIII
TERMINATION
8.1 TERMINATION. This Agreement may be terminated, and the transactions
contemplated hereby may be abandoned, at any time prior to the Effective Time.
(a) By mutual written agreement of the Parties;
(b) By either of the Vertex Parties or WWT if the Closing does not
occur on or before December 31, 2008;
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(c) By either of Vertex LP or WWT if the shareholders of WWT fail
to approve the Merger, this Agreement and the transactions contemplated hereby;
(d) By either of the Vertex Parties or WWT if any court of
competent jurisdiction or other competent Regulatory Authority shall have issued
an order making illegal or otherwise permanently restricting, preventing or
otherwise prohibiting the Merger and such order shall have become final; or
(e) By either of the Vertex Parties or WWT upon written notice to
the other Party in the event of a breach of any provision or covenant of this
Agreement, or any representation or warranty made by such Party hereunder
becomes inaccurate; PROVIDED, HOWEVER, that such breach or inaccuracy would
cause the related closing condition, if any, not be satisfied in accordance with
Article 6 hereof; PROVIDED, FURTHER, that prior to any termination by the
non-breaching party, such Party shall provide written notice to the breaching
Party specifically identifying the breach or inaccurate representation, and the
breaching Party does not cure or correct such breach or inaccuracy within 30
days following receipt of the written notice.
8.2 EFFECT OF TERMINATION. If this Agreement is validly terminated by
either the Vertex Parties or WWT pursuant to Section 8.1, this Agreement will
forthwith become null and void and there will be no liability or obligation on
the part of the Parties hereto, except that nothing contained herein shall
relieve any party hereto from liability for willful breach of its
representations, warranties, covenants or agreements contained in this
Agreement.
ARTICLE IX
MISCELLANEOUS
9.1 PARTIES OBLIGATED AND BENEFITED. This Agreement shall be binding
upon the Parties and their respective successors by operation of law and shall
inure solely to the benefit of the Parties and their respective successors by
operation of law, and no other Person shall be entitled to any of the benefits
conferred by this Agreement. Without the prior written consent of the other
Party, no Party may assign this Agreement or the Collateral Documents or any of
its rights or interests or delegate any of its duties under this Agreement or
the Collateral Documents.
9.2 PUBLICITY. Vertex LP and WWT each shall consult with each other
prior to issuing any press releases or otherwise making public announcements
with respect to the Merger and the other transactions contemplated by this
Agreement and prior to making any filings with any third party and/or any
Regulatory Authorities (including any national securities inter dealer quotation
service) with respect thereto, except as may be required by law or by
obligations pursuant to any listing agreement with or rules of any national
securities inter dealer quotation service.
9.3 NOTICES. Any notices and other communications required or permitted
hereunder shall be in writing and shall be effective upon delivery by hand or
upon receipt if sent by certified or registered mail (postage prepaid and return
receipt requested) or by a nationally recognized overnight courier service
(appropriately marked for overnight delivery) or upon transmission if sent by
telex or facsimile (with request for immediate confirmation of receipt in a
manner customary for communications of such respective type and with physical
delivery of the communication being made by one or the other means specified in
this Section as promptly as practicable thereafter). Notices shall be addressed
as follows:
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If to WWT:
World Waste Technologies, Inc.
00000 Xxxxx Xx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Facsimile No: (000) 000-0000
With a copy to:
TroyGould PC
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
Facsimile No: (000) 000-0000
If to Vertex LP, Vertex Nevada, Merger Sub and/or the Agent to:
Vertex Companies
0000 Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxx Xxxxxx
Facsimile No.: (000) 000-0000
With a copy to:
The Loev Law Firm, PC
0000 Xxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxx
Facsimile No.: (000) 000-0000
Any Party may change the address to which notices are required to be sent
by giving notice of such change in the manner provided in this Section.
9.4 ATTORNEYS' FEES. In the event of any action or suit based upon or
arising out of any alleged breach by any Party of any representation, warranty,
covenant or agreement contained in this Agreement or the Collateral Documents,
the prevailing Party shall be entitled to recover reasonable attorneys' fees and
other costs of such action or suit from the other Party.
9.5 HEADINGS. The Article and Section headings of this Agreement are for
convenience only and shall not constitute a part of this Agreement or in any way
affect the meaning or interpretation thereof.
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9.6 CHOICE OF LAW. This Agreement and the rights of the Parties under it
shall be governed by and construed in all respects in accordance with the laws
of the State of Texas without giving effect to any choice of law provision or
rule (whether of the State of Texas or any other jurisdiction that would cause
the application of the laws of any jurisdiction other than the State of Texas).
Notwithstanding the foregoing, the internal laws of the State of California
shall apply with respect to the Merger.
9.7 JURISDICTION AND SERVICE OF PROCESS. Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of, this
Agreement, may be brought against any of the Parties solely and exclusively in
the courts of the State of Texas (with respect to any actions brought by any of
the WWT Parties) and in the courts of the State of California (with respect to
any actions brought by any of the Vertex Parties), and each of the Parties
consents to the sole and exclusive jurisdiction of such courts (and of the
appropriate appellate courts) in any such action or proceeding and waives any
objection to venue laid therein. Process in any action or proceeding referred to
in the preceding sentence may be served on any Party anywhere in the world.
9.8 RIGHTS CUMULATIVE. All rights and remedies of each of the Parties
under this Agreement shall be cumulative, and the exercise of one or more rights
or remedies shall not preclude the exercise of any other right or remedy
available under this Agreement or applicable law.
9.9 FURTHER ACTIONS. The Parties shall execute and deliver to each
other, from time to time at or after Closing, for no additional consideration
and at no additional cost to the requesting party, such further assignments,
certificates, instruments, records, or other documents, assurances or things as
may be reasonably necessary to give full effect to this Agreement and to allow
each party fully to enjoy and exercise the rights accorded and acquired by it
under this Agreement.
9.10 TIME OF THE ESSENCE. Time is of the essence under this Agreement. If
the last day permitted for the giving of any notice or the performance of any
act required or permitted under this Agreement falls on a day which is not a
Business Day, the time for the giving of such notice or the performance of such
act shall be extended to the next succeeding Business Day.
9.11 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.12 ENTIRE AGREEMENT. This Agreement (including the Exhibits, the Vertex
Disclosure Schedules, the WWT Disclosure Schedules and any other documents,
instruments and certificates referred to herein, which are incorporated in and
constitute a part of this Agreement) contains the entire agreement of the
Parties.
9.13 SURVIVAL OF REPRESENTATIONS AND COVENANTS. Notwithstanding any right
of WWT to fully investigate the affairs of Vertex LP and notwithstanding any
knowledge of facts determined or determinable by WWT pursuant to such
investigation or right of investigation, WWT shall have the right to rely fully
upon the representations, warranties, covenants and agreements of the Vertex
Parties contained in this Agreement. Each representation, warranty, covenant and
agreement of the Vertex Parties contained herein shall survive the execution and
delivery of this Agreement and the Closing and shall thereafter terminate and
expire on the first anniversary of the Closing Date unless, prior to such date,
WWT has delivered to Agent a written notice of a claim with respect to such
representation, warranty, covenant or agreement.
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IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement
as of the day and year first above written.
Dated: May 19, 2008 World Waste Technologies, Inc.,
a California Corporation
By:/s/ Xxxx Xxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxx
Title: CEO
Dated: May 19, 2008 Vertex Merger Sub, LLC,
a California Limited Liability
Company
By: /s/ Xxx Xxxxxx
---------------------------------
Name: Xxx Xxxxxx
Title: CEO
Dated: May 19, 2008 Vertex Energy, Inc.,
a Nevada corporation
By: /s/ Xxx Xxxxxx
---------------------------------
Name: Xxx Xxxxxx
Title:CEO
Dated: May 19, 2008 /s/ Xxx Xxxxxx
------------------------------------
Xxx Xxxxxx, individually
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Dated: May 19, 2008 Vertex Energy LP,
a Texas limited partnership
By: /s/ Xxx Xxxxxx
---------------------------------
Name: Xxx Xxxxxx
Title:
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WWT DISCLOSURE SCHEDULES
SCHEDULE 4.1(A) - JURISDICTION
California
SCHEDULE 3.1 - SUBSIDIARIES
World Waste of America, Inc.
World Waste of Anaheim, Inc.
World Waste of California, Inc.
World Waste Operations, Inc.
SCHEDULE 4.3(A) WWT OPTIONS
See attached
SCHEDULE 4.4 NON-CONTRAVENTION
Approval of each class of WWT Capital Stock is required to approve the
Transactions
SCHEDULE 4.8 - UNDISCLOSED LIABILITIES
Fee payable to Xxxxxxxxxx Partners LLC
SCHEDULE 4.9(C) - TAX AUDITS
None
SCHEDULE 4.11(J) - ACCELERATION OF RIGHTS
Consummation of this transaction will accelerate the vesting of options to
acquire WWT Common Stock held by certain individuals.
SCHEDULE 4.15(A) - PERMITS
None
SCHEDULE 4.17 - INSURANCE
Attached
SCHEDULE 4.18- RELATED PARTY TRANSACTIONS
As disclosed in the SEC Reports, CMCP has certain relationships with WWT.
SCHEDULE 4.20 - BROKERS OR FINDERS
Xxxxxxxxxx Capital LLC
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