EXHIBIT 99.2
STOCK PURCHASE AGREEMENT
AND PLAN OF REORGANIZATION
THIS AGREEMENT is entered into as of the 30th day of June, 2000, by and
among PHOTONICS CORPORATION, a California corporation ("the Corporation"),
XXXxxxxxxx.xxx, Inc. a Delaware corporation, a wholly owned subsidiary of
Corporation ("Purchaser"), Xxxx Xxxxxxxx, individually and agent for all
shareholders of XXXxxxxxxx.xxx, Inc. ("Selling Shareholders") and
XXXxxxxxxx.xxx, Inc., a Texas Corporation ("REP-T")
W I T N E S S E T H :
WHEREAS, Corporation is a publicly held corporation that desires to
combine with a business which has growth potential (the "Transaction");
WHEREAS, the Corporation entered into a letter purchase agreement dated
February 1, 2000 with XxxxXxxxx0Xxxx.xxx, Inc., a Texas corporation
("RE4Sale") and such letter agreement has been jointly terminated by
Corporation and RE4Sale; and
WHEREAS, the Corporation, Purchaser and REP-T each announced the
agreement
in principal for REP-T to acquire the assets and certain liabilities of
RE4Sale and for the Purchaser to purchase all the outstanding shares of
REP-T in exchange for shares of the Corporation's common stock; and
WHEREAS, the Corporation will adopt, implement and carry out certain
corporate resolutions in connections with the closing of the Transaction
including: (a) the conversion of certain corporate indebtedness to common
stock, (b) the Amendment to the Articles of Incorporation and By-Laws of
Corporation as appropriate and necessary to increase the number of common
shares as stated hereinbelow and (c) the election of new directors and the
appointment of new officers of the Corporation and Purchaser; and
WHEREAS, REP-T is a privately held businesses with 10,000,000 shares of
common stock authorized and 5,458,752 shares issued and outstanding that is
engaged in the Internet industry and appears to have growth potential; and
WHEREAS, Purchaser desires to acquire one hundred percent (100%) of the
issued and outstanding shares of common stock, $.01 par value, of REP-T
(the "REP-T Common Stock") owned by the Selling Shareholders in exchange
for that number of shares of common stock, $.001 par value, of
Corporation (the "PHOTONICS Common Stock") that results in the Selling
Shareholders owning approximately 85% of the total authorized and
outstanding shares of the Corporation at the closing in a tax-free
transaction pursuant to the provisions of Section 368(a)(1)(B) of the
Internal Revenue Code of 1986;
NOW, THEREFORE, for and in consideration of the mutual representations,
warranties and covenants herein contained, and on the terms and subject to
the conditions set forth herein, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE
1.01 Sale and Purchase of Stock. Subject to and upon the terms and
conditions contained herein, at the Closing (as hereinafter defined), the
Selling Shareholders shall sell, assign, transfer, convey
and deliver to Purchaser and Purchaser shall purchase, accept and acquire
from the Selling Shareholders the REP-T Common Stock owned by them.
1.02 Closing. The closing of the transaction contemplated hereby (the
"Closing") shall occur on or before fifteen (15) days following the
approval of the transactions set out herein in the Annual Meeting of the
shareholders of the Corporation. The Closing shall occur in the offices
of Purchaser or at such other place as shall be mutually agreed to in
writing by the parties hereto.
1.03 Purchase Price. In consideration of the shares of REP-T Common
Stock
to be purchased from the Selling Shareholders, Purchaser at the Closing
shall deliver to Selling Shareholders and to the Koo Trust (defined
hereinbelow) together certificates representing an aggregate of
approximately 50,284,917 shares of PHOTONICS Common Stock, representing
approximately eighty-five percent [85%] of the then issued and outstanding
shares of Corporation plus the number or shares that the
Company has reserved for the conversion of debt, held by creditors of the
Company, to common stock. Such stock shall be free and clear of any
liens, encumbrances or charges whatsoever.
1.04 Instruments of Transfer; Further Assurances. In order to
consummate
the transaction contemplated hereby, the following documents and
instruments shall be delivered:
(a) Documents from Selling Shareholders. Selling Shareholders
shall
deliver to Purchaser at the Closing one or more stock certificates
representing in the aggregate the number of shares of REP-T Common Stock
owned by them plus a duly executed stock power or other
instrument of transfer for each such stock certificate.
(b) Documents from Purchaser. Corporation and Purchaser shall
deliver to
Selling Shareholders at the closing one or more stock certificates
representing in the aggregate the number of shares of PHOTONICS Common
Stock to which such Selling Shareholders are entitled, to be in such
denominations as shall be requested by Selling Shareholders not less than
three (3) business days prior to the Closing Date.
(c) Further Documents. At the Closing, and at all times
thereafter as
may be necessary (i) Selling Shareholders shall execute and deliver to
Corporation and Purchaser such other instruments of transfer as shall be
reasonably necessary or appropriate to vest in Purchaser
good and indefeasible title to the shares the REP-T Common Stock owned by
them and to comply with the purposes and intent of this Agreement, and (ii)
Corporation and Purchaser shall execute and deliver to Selling Shareholders
such other instruments as shall be reasonably necessary or
appropriate to comply with the purposes and intent of this Agreement.
1.05 Registration. As of the date hereof, neither the stock of the
Corporation nor of REP-T to be delivered pursuant to this Agreement has
been registered under the Securities Act of 1933, as amended
(the "Act"), and may not be resold unless these securities are registered
under such Act or an exemption from such registration is available.
ARTICLE II
CORPORATION'S AND PURCHASER'S REPRESENTATIONS AND WARRANTIES
The Corporation and Purchaser represent and warrant that the following
are
true and correct as of the Date of Closing .
2.01 Organization and Good Standing. The Corporation and Purchaser are
corporations duly organized, validly existing and in good standing under
the laws of the state of their incorporation, with all requisite power and
authority to carry on the business in which it is engaged, to own the
properties it owns and to execute and deliver this Agreement and to
consummate the transactions contemplated hereby subject to the ratification
of this agreement and the approval of the Transaction contemplated
hereunder by Corporation's shareholders and the board of directors to be
elected at the annual meeting of the shareholders.
Purchaser is a wholly owned subsidiary of the Corporation. The
Corporation owns ten percent (10%) of all of the shares of Sunnyvale
Technology Corporation, a Texas corporation. As part of this
transaction, the parties hereto agree that such ten percent (10%) ownership
shall be distributed as a stock dividend to the shareholders of the
Corporation who are owners of record on June 1, 2000, the record date
for the annual meeting of the Corporation. Such distribution shall be
effective as of the date of it's approval at the Annual Meeting of the
shareholders of the Corporation.
2.02 Authorization and Validity. The execution, delivery and
performance
of this Agreement and the consummation of the transactions contemplated
hereby have been or will be prior to Closing duly authorized by Corporation
and Purchaser. This Agreement constitutes or will constitute the legal,
valid and binding obligations of Corporation and Purchaser, enforceable
against Corporation and Purchaser in accordance with its terms.
2.03 No Violation. Except as disclosed on Exhibit 2.03, neither the
execution and performance of this Agreement nor the consummation of the
transactions contemplated hereby will (a) conflict with, or result in a
violation or breach of the terms, conditions and provisions of, or
constitute a default under, the Articles of Incorporation or Bylaws of
Corporation and Purchaser or any agreement, indenture or other instrument
under which Corporation and Purchaser is bound or to which the assets of
Corporation and Purchaser are subject, or result in the creation or
imposition of any lien, charge or encumbrance upon any of such assets, or
(b) violate or conflict with any judgment, decree, order, statute,
rule or regulation of any court or any public, governmental or regulatory
agency or body having jurisdiction over Corporation and Purchaser or the
properties or assets of Corporation and Purchaser. Corporation and
Purchaser has complied in all material respects with all applicable laws,
regulations and licensing requirements, and has filed with the proper
authorities all necessary statements and reports. Corporation and
Purchaser possesses all necessary licenses, franchises, permits and
governmental authorizations to conduct its business as now conducted.
The Corporation hereby discloses that it has been delisted from the NASDAQ
national quotation system. The Corporation is current with it's filing
requirements with the Securities and Exchange Commission. However, the
Corporation has not been re-listed for trading on the NASDAQ
national quotation system. Further, the actions contemplated in this
agreement must be approved by the shareholders of the Corporation and by a
newly formed board of Directors in order to comply with the requirements of
California State law.
2.04 Disclosure. No representation or warranty by Corporation and
Purchaser in this Agreement nor any statement or certificate furnished or
to be furnished by it pursuant hereto or in connection with the
transactions contemplated hereby contains or will contain any untrue
statement of a material fact or omits or will omit to state a material
fact necessary to make the statements contained therein not misleading or
necessary in order to provide REP-T and the Selling Shareholders with
complete and accurate information.
2.05 Consents. Except as set forth in this Section 2 and in Exhibit
2.05,
there is no authorization, consent, approval, permit or license of, or
filing with, any governmental or public body or
authority, any lender or lessor or any other person or entity is required
to authorize, or is required in connection with, the execution, delivery
and performance of this Agreement or the agreements contemplated hereby on
the part of Corporation and Purchaser.
2.06 Compliance with Laws. There are no existing violations of any
applicable federal, state or local law or regulation that could materially
adversely affect the property or business of Corporation
and Purchaser and there are no known, noticed or threatened violations of
any zoning, building, fire, safety or wage and hour laws or regulations.
2.07 Litigation. Except as described in Exhibit 2.07 and except as
scheduled by the Corporation in its 10-K/A annual report file with the SEC,
Corporation and Purchaser has not had any legal action or administrative
proceeding or investigation instituted or, to the best of the knowledge of
Corporation and Purchaser, threatened against or affecting any of the
assets or business of Corporation and Purchaser. Corporation and Purchaser
are not (a) subject to any continuing court or administrative order, writ
le specifically to Corporation and Purchaser or to its business, assets,
operations or employees, or (b) in default with respect to any such order,
writ, injunction or decree. Corporation and Purchaser knows of no basis
for any other such action, proceeding or investigation.
2.08 Tax Returns. Except as listed in Exhibit 2.08, Corporation and
Purchaser has prepared and filed, or has caused to be prepared and filed,
with the appropriate United States, state and local
government agencies, and all political subdivisions thereof, all tax
returns required to be filed by, on behalf of or on account of the
operations of Corporation and Purchaser and has paid or caused to be paid
all assessments shown to be due and claimed to be due on such tax returns.
2.09 Contracts. All contracts and agreements to which Corporation and
Purchaser is a party are described in Exhibit 2.09. Such contracts and
agreements have not been amended and remain in full force and effect in
accordance with their respective terms.
2.10 Corporation's Financial Statements. The Corporation has filed
it's 10-K/A Annual Report with the SEC and has made such report available
to Selling Shareholders and REP-T including therein the audited balance
sheet and related statements of income and changes in financial position
for the 12 month period through December 31, 1999 ("Corporation Financial
Statements"). The Corporation Financial Statements (defined in Section 7
hereinbelow) fairly present the financial condition and results of operations
of Corporation as of the dates and for the periods indicated and have been
prepared in conformity with generally accepted accounting principles.
2.11 Absence of Certain Changes. Except as set forth in Exhibit 2.11
hereto, since the date of the end of the Corporation's fiscal quarter ended
June 30, 2000, the Corporation has not: (a) suffered any
material adverse change in its financial condition, assets, liabilities or
business; (b) contracted for or paid any capital expenditures in excess of
$20,000.00; (c) incurred any indebtedness for borrowed money,
issued or sold any debt securities or discharged any liabilities or
obligations; (d) mortgaged, pledged or subjected to any lien, lease,
security interest or other charge or encumbrance any of their properties or
assets; (e) paid any material amount on any indebtedness prior to the due
date, forgiven or canceled any material debts or claims or released or
waived any material rights of claims; (f) suffered any damage or
destruction to or loss of any assets (whether or not covered by insurance)
that materially and adversely affects its business; (g) acquired or
disposed of any material assets or incurred any material liabilities or
obligations; (h) made any payments to or loaned any money to its affiliates
or associates; (i) formed or acquired or disposed of any interest in any
corporation, partnership, joint venture or other entity; (j) entered into
any material employment, compensation, consulting or collective bargaining
group, or modified or amended in any material respect the terms of any such
existing agreement; or (k) entered into any other commitment or transaction
or experienced any other event that is material to this Agreement or to the
transactions contemplated hereby, or that has affected, or may adversely
affect Corporation and Purchaser business, operations, assets, liabilities
or financial condition.
2.12 Title; Leased Assets. Except as described in Exhibit 2.12 hereto,
Corporation and Purchaser owns its assets, and its real and personal
property leaseholds, free and clear of all liens, claims and encumbrances,
except for (i) liens for non-delinquent ad valorem taxes or non-delinquent
statutory liens arising other than by reason of its default, and (ii) such
liens, minor imperfections of title or easements on real property,
leasehold estates or personalty as do not in any material respect detract
from the value thereof and do not interfere with the present use of the
properties subject thereof. Such assets and leaseholds are the only ones
necessary for the conduct of Corporation and Purchaser business as now
being conducted.
2.13 Corporation's Capitalization, Subsidiaries. The Corporation is
authorized to issue 20,000,000 common shares, par value $0.001, of which
6,765,496 are fully paid and non assessable, and are presently outstanding.
In addition to such outstanding shares, Corporation intends to issue up to
1,519,090 shares of common stock to existing creditors of the Corporation
in exchange for the forgiveness of debt owed by the Corporation to such
creditors. Corporation is authorized to issue 6,000,000 preferred
shares, par value $0.001, of which none have been issued or are
outstanding. Except as described in Exhibit 2.13, there are no options,
warrants or other securities or rights outstanding which are convertible
into or exercisable for any shares of capital stock of Corporation. Except
a joint venture or other entity.
2.14 Corporation's Prior Letter of Intent. The Corporation and RE4Sale
have properly and effectively terminated any and all letters of intent
and/or agreements to purchase shares of XxxxXxxxxx0Xxxx.xxx, Inc., a
Colorado corporation.
2.15 Survival of Representations and Warranties. All the representations
and warranties in this Article II shall survive the closing. The truth and
veracity of the representations and warranties contained in this Article II
shall be secured for a period of one year by the establishment of a trust (the
"Koo Trust"). The Koo Trust shall be established with a third party escrow
agent by depositing all the shares of Photonics currently owned by Xx. Xxxxx
X. Xxx. Under the terms of the Koo Trust, the Corporation's shares that are
held in the Koo Trust may be sold at the direction of Xxxxx X. Xxx or his
designated agent. Prior to the termination of the Koo Trust, the proceeds
of such sales may distributed out of the Koo Trust only at the direction of
the post closing Board of Directors of the Corporation and Purchaser.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF REP-T AND
THE AGENT FOR THE SELLING SHAREHOLDERS
REP-T and the Selling Shareholders, jointly and severally,
represent and warrant that the following are true and correct
as of this date and will be true and correct through the Closing Date
as if made on that date:
3.01 Organization, Capitalization and Good Standing. REP-T is a
corporation duly organized, validly existing and in good standing under the
laws of its state of incorporation with all requisite power and authority
to carry on the business in which it is engaged and to own the properties
it owns. REP-T is authorized to issue 12,000,000 shares divided into:
10,000,000 common shares, par value $0.0001, of which 5,458,752 are fully
paid and non assessable, and are presently outstanding and 2,000,000
preferred shares, par value $0.0001 of which none are issued. REP-T is
authorized to issue no preferred shares REP-T is duly qualified and
licensed to do business and is in good standing in all jurisdictions where
the nature of its business makes such qualification necessary. Except as
described on Exhibit 3.01, REP-T does not own, directly or indirectly, any
of the capital stock of any other corporation or any equity, profit
sharing, participation, or other interest in any corporation, partnership,
joint venture or other entity.
3.02 Authorization and Validity. The execution, delivery and performance
of this Agreement by REP-T and the consummation of the transactions
contemplated hereby have been or will be prior to Closing duly authorized by
REP-T. This Agreement constitutes or will constitute legal, valid and binding
obligations of REP-T, enforceable against REP-T in accordance with its terms.
This Agreement constitutes the valid and binding agreement of the Selling
Shareholders, enforceable in accordance with its terms, and neither the
execution nor the delivery of this Agreement nor the consummation by the
Selling Shareholders of the transactions contemplated hereby (i) violates
any statute or law or any rule, regulation or order of any court or any
governmental authority or (ii) violates or conflicts with, or constitutes a
default under or will constitute a default under any contract, commitment,
agreement, understanding, arrangement or restriction of any kind to which
the Selling Shareholders are a party or by which the Selling Shareholders
are bound. REP-T has or will deliver to Corporation and Purchaser copies
of its Articles of Incorporation, By-Laws, acquisition documents relating to
XxxxXxxxxx0Xxxx.xxx and the board of directors and shareholders resolutions
authorizing the entering into this Agreement and the consummation of the
Transaction including the authorization of the signatories to this Agreement.
3.03 Financial Statements. REP-T has furnished to Corporation and Purchaser
REP-T's audited balance sheet and related statements of income and changes in
financial position as of June 15, 2000 (the "REP-T Financial Statements").
The REP-T Financial Statements fairly present the financial condition and
results of operation of REP-T as of the dates and for the periods indicated and
have been prepared in conformity with generally accepted accounting principals.
3.04 Absence of Certain Changes. Except as set forth on Exhibit 3.04
hereto, since June 15, 2000, REP-T has not: (a) suffered any material adverse
change in its financial condition, assets, liabilities or business; (b)
contracted for or paid any capital expenditures in excess of $20,000; (c)
incurred any indebtedness or borrowed money, issued or sold any debt securities
or discharged any liabilities or obligations; (d) mortgaged, pledged, or
subjected to any lien, lease, security interest or other charge or
encumbrance any of their properties or assets; (e) paid any material
amount on any indebtedness
prior to the due date, forgiven or cancelled any material debts or claims or
released or waived any material rights or claims; (f) suffered any damage or
destruction to or loss of any assets (whether or not covered by insurance) that
materially and adversely affects its business; (g) acquired or disposed of any
material assets or incurred any material liabilities or obligations; (h) made
any payments to or loaned any money to its affiliates or associates; (i)
formed or acquired or disposed of any interest in any corporation, partnership
or joint venture or other entity; (j) entered into any material employment,
compensation, consulting or collective bargaining agreement with any person or
group, or modified or amended in any material respect the terms of any such
existing agreement; or (k) entered into any other commitment or transaction or
experienced any other event that is material to this Agreement or to the
transactions contemplated hereby, or that has affected, or may adversely affect
REP-T's business, operations, assets, liabilities or financial condition.
3.05 Title; Leased Assets. Except as described in Exhibit 3.05
hereto, REP-T owns its assets, and its real and personal property
leaseholds, free and clear of all liens, claims and encumbrances,
except for (i) liens for non-delinquent ad valorem taxes or non-delinquent
statutory liens arising other than by reason of its default, and (ii) such
liens, minor imperfections of title or easements on real property,
leasehold estates or personalty as do not in any material respect detract
from the value thereof and do not interfere with the present use of the
properties subject thereof. Such assets and leaseholds are the only
ones necessary for the conduct of REP-T's business as now being conducted.
3.06 Insurance. All of the insurable properties of REP-T are insured
for its benefit under valid and enforceable policies, issued by insurers of
recognized responsibility in amounts and against such risks and losses as
is customary in REP-T's industry. True, complete and correct copies of all
such policies will be provided to Corporation and Purchaser prior to the
Closing.
3.07 No Violation. Neither the execution and performance of this
Agreement nor the consummation of the transactions contemplated hereby will
(a) conflict with, or result in a violation or breach of the terms,
conditions and provisions of, or constitute a default under, the Articles
of Incorporation or Bylaws of REP-T or any agreement, indenture or other
instrument under which REP-T is bound or to which any of the assets of
REP-T are subject, or result in the creation or imposition of any
lien, charge or encumbrance upon any of such assets, or (b) violate or
conflict with any judgment, decree, order, statute, rule or regulation of
any court or any public, governmental or regulatory agency or body
having jurisdiction over REP-T or the properties or assets of REP-T.
REP -T has complied in all material respects with all applicable laws,
regulations and licensing requirements, and has filed with the proper
authorities all necessary statements and reports. REP-T possesses all
necessary licenses, franchises, permits and governmental authorizations to
conduct its business as now conducted.
3.08 Consents. Except as set forth in Exhibit 3.08, no authorization,
consent, approval, permit or license of, or filing with, any governmental
or public body or authority, any lender or lessor or any
other person or entity is required to authorize, or is required in
connection with, the execution, delivery and performance of this Agreement
or the agreements contemplated hereby on the part of REP-T.
3.09 Compliance with Laws. There are no existing violations of any
applicable federal, state or local law or regulation that could materially
adversely affect the property or business of REP-T and
there are no known, noticed or threatened violations of any zoning,
building, fire, safety or wage and hour laws or regulations.
3.10 Litigation. Except as described in Exhibit 3.10, REP-T has not had
any legal action or administrative proceeding or investigation instituted
or, to the best of the knowledge of REP-T, threatened against or affecting
any of the assets or business of REP-T. REP-T is not (a) subject to any
continuing court or administrative order, writ, injunction or decree
applicable specifically to REP-T or to its business, assets, operations or
employees, or (b) in default with respect to any such order, writ, injunction
or decree. REP-T knows of no basis for any such action, proceeding or
investigation. REP-T and the Selling Shareholders agree to indemnify and
hold Corporation and Purchaser harmless from any asserted rights, claim,
proceeding, litigation or other action relating to XxxxXxxxxx0Xxxx.xxx and
its current and former officers, directors and shareholders including any
asserted rights, action, claim, proceeding or litigation arising from the
prior negotiations between Corporation, Xxxxx X. Xxx, Xxxx Xxxxxxx or
XxxxXxxxxx0Xxxx.xxx relating to the acquisition contemplated herein.
3.11 Disclosure. No representation or warranty by REP-T or the Selling
Shareholders in this Agreement nor any statement or certificate furnished
or to be furnished by it or them pursuant hereto or in
connection with the transactions contemplated hereby contains or will
contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary to make the statements contained
therein not misleading or necessary in order to provide Corporation and
Purchaser with complete and accurate information.
3.12 Tax Returns. REP-T has prepared and filed, or has caused to be
prepared and filed, with the appropriate United States, state and local
government agencies, and all political subdivisions thereof,
all tax returns required to be filed by, on behalf of or on account of,
the operations of REP-T and has paid or caused to be paid all assessments
shown to be due and claimed to be due on such tax returns.
3.13 Contracts. All contracts and agreements to which REP-T is a party
are described in Exhibit 3.13. Such contracts and agreements have not
been amended and remain in full force and effect in accordance with their
respective terms.
3.14 Agency Authorized The Agent for the Selling Shareholders has
been duly authorized by the Selling Shareholders (a list of whom have been
delivered by him to Corporation and Purchaser upon execution of this
agreement) to enter into this agreement on their behalf and that when this
agreement is executed by him to shall bind all of the Selling Shareholders
with the same force and effect as if all of the Selling Shareholders had
individually executed this agreement.
3.15 All the representations and warranties in this Article III shall
survive the closing.
ARTICLE IV
REP-T'S COVENANTS
REP-T agrees that on or prior to the Closing:
4.01 Business Operations. REP-T shall operate its business only in the
ordinary course and REP shall use its best efforts to preserve the business of
REP-T intact, to retain its present customers and suppliers so that they will
be available to Corporation and Purchaser after the
Closing and to cause the consummation of the transactions contemplated by this
Agreement in accordance with its terms and conditions. REP-T shall not take
any action that might impair the business or assets of REP-T without the prior
consent of Corporation and Purchaser or take or fail to take any action that
would cause or permit the representations made in Article III hereof to be
inaccurate at the time of Closing or preclude
REP-T from making such representations and warranties at the Closing.
4.02 Access. REP-T shall permit Corporation and Purchaser and its
authorized representatives full access to, and make available for inspection,
all of the assets and business of REP-T , including REP-T 's employees,
customers and suppliers, and REP-T shall furnish Corporation and Purchaser all
documents, records and information with respect to the affairs of REP-T, as
Corporation and Purchaser and its representatives may reasonably request.
4.03 Material Change. Prior to the Closing, REP-T shall promptly inform
Corporation and Purchaser in writing of any material adverse change in the
condition of the business of REP-T . Notwithstanding the disclosure to
Corporation and Purchaser of any such material adverse change, REP-T shall not
be relieved of any liability for, nor shall the providing of such information
by REP-T to Corporation and Purchaser be deemed a waiver by Corporation and
Purchaser of, the breach of any
representations or warranty of REP-T contained in this Agreement.
4.04 Approvals of Third Parties. As soon as practicable after the
execution of this Agreement, but in any event prior to the Closing Date, REP-T
will use its best efforts to secure all necessary approvals and consents of
third parties to the consummation of the transactions contemplated by this
Agreement.
4.05 Contracts. Except with Corporation and Purchaser's prior written
consent, REP-T shall not waive any material right or cancel any material
contract, debt or claim nor with it assume or enter into
any contract, lease, license obligation, indebtedness, commitment purchase or
sale involving more than $ 5,000.00, each.
4.06 Capital Assets; Payments of Liabilities. Except with Corporation
and Purchaser's prior written consent, REP-T will not acquire or dispose of
any capital asset having an initial cost of $ 5,000.00 or more, nor will
REP-T discharge or satisfy any lien or encumbrance
or pay or perform any obligation or liability other than (i) liabilities and
obligation reflected in the REP-T Financial Statements,
and (ii) current liabilities and obligations incurred in the usual and ordinary
course of business since June 15, 2000, and, in either such case only as
required by the express terms of the agreement or other instrument pursuant to
which the obligation or liability was incurred.
4.07 Mortgages, Liens. Except with Corporation and Purchaser's prior
written consent, REP-T will not enter into or assume any mortgage, pledge,
conditional sale or other title retention agreement, permit any lien,
encumbrance or claim of any kind to attach to any of its assets, whether nor
owned or hereafter acquired, or guarantee or otherwise become contingently
liable for any obligations of another or make any capital contributions or
investments in any corporation, business or other person.
4.08 Sales of Stock. Except with Corporation and Purchaser's prior
written consent, REP-T will not, after the date hereof, issue any shares of
its common stock or preferred stock nor will it issue or
enter into an agreement to issue any securities, rights, subscriptions,
warranties or options to purchase shares of its common stock or preferred stock
or which are convertible into shares of its common stock or
preferred stock in whole or in part.
ARTICLE V
CORPORATION'S AND PURCHASER'S COVENANTS
The Corporation and Purchaser agree that on or prior to the Closing:
5.01 Access. Corporation and Purchaser shall permit REP-T and its
authorized representatives full access to, and make available for inspection,
all of the assets and business of Corporation and
Purchaser, and Corporation and Purchaser shall furnish REP-T all documents,
records and information with respect to the affairs of Corporation and
Purchaser as REP-T and its representatives may reasonably request.
5.02 Sales of Stock. Except for the issuance to common stock to
creditors in exchange for the forgiveness of such creditors debt or except with
REP-T 's prior written consent Corporation and Purchaser will not, after the
date hereof, issue any shares of its common stock nor will it issue or enter
into an agreement to issue any securities, rights, subscriptions, warranty or
options to purchase shares of its common stock or preferred stock or which are
convertible into shares of its common stock or preferred stock in whole or in
part.
5.03 Material Change. Prior to the Closing, Corporation and Purchaser
shall promptly inform REP-T in writing of any material adverse change in the
condition of the business of Corporation and Purchaser. Notwithstanding the
disclosure to REP-T of any such material adverse change, Corporation and
Purchaser shall not be relieved of any liability for, nor shall the providing
of such information by Corporation and Purchaser to REP-T be deemed a waiver by
REP-T of, the breach of any representation or warranty of Corporation and
Purchaser contained in this Agreement.
5.04 Approvals of Third Parties. As soon as practicable after the
execution of this Agreement, but in any event prior to the Closing Date,
Corporation and Purchaser will use its best efforts to secure all necessary
approvals and consents of third parties to the consummation of the transactions
contemplated by this Agreement.
ARTICLE VI
CORPORATION'S AND PURCHASER'S CONDITIONS PRECEDENT
Except as may be waived in writing by the Corporation and Purchaser, the
obligations of the Corporation and Purchaser hereunder are subject to the
fulfillment at or prior to the Closing of each of the
following conditions:
6.01 Representations and Warranties. The representations and warranties
of Selling Shareholders and REP-T contained herein shall be true and correct
in all material respects as of the Closing, and Corporation and Purchaser shall
not have discovered any material error, misstatement or omission therein. At
the Closing, Corporation and Purchaser shall have received a certificate, dated
the date of the Closing, and executed by the President of REP and Selling
Stockholders, certifying in such detail as Corporation and Purchaser may
reasonably
request as to the accuracy of such representations and warranties and the
fulfillment of the obligations and compliance with the covenants referred to in
Section 6.02 below as of the Closing.
6.02 Covenants. REP-T shall have performed and complied with all
covenants or conditions required by this Agreement to be performed and complied
with by it prior to or at the Closing.
6.03 Opinion. Counsel to REP-T shall have delivered to Corporation and
Purchaser its opinion, dated the Closing Date, in form and substance reasonably
satisfactory to counsel for Corporation
and Purchaser, to the effect that (a) REP-T is a corporation duly organized,
validly existing and in good standing under the laws of its state of
incorporation and has duly qualified to do business and is in good standing in
the states where the nature of its business makes such qualification necessary,
(b) REP-T has full corporate power and authority to execute and perform this
Agreement, (c) this Agreement has been
duly authorized by all necessary corporate action on the part of REP-T, and has
been duly executed and delivered to REP-T and constitutes the legal, valid and
binding obligation of REP-T, enforceable in
accordance with its terms, except as may be limited by bankruptcy, insolvency
or other similar laws affecting creditors' rights generally or the availability
of equitable remedies, (d) neither the execution and
performance of this Agreement nor the consummation of the transactions
contemplated hereby will conflict with, or result in a breach of the terms,
conditions and provisions of, or constitute a default under,
the Articles of Incorporation or Bylaws of REP-T or, to the best of such
counsel's knowledge, any agreement, indenture or other instrument of which such
counsel has knowledge under which REP-T is bound or to which any of the assets
of REP-T is subject, or result in the creation or imposition of any lien,
charge or encumbrance upon any such assets, and (e) to the best of such
counsel's knowledge, there are no options, warrants or other securities or
rights outstanding which are convertible into or exercisable for any shares of
capital stock of REP-T.
6.04 Proceedings. No action, proceeding or order by any court or
governmental body or agency shall have been threatened in writing, asserted,
instituted or entered to restrain or prohibit the carrying out of the
transactions contemplated by this Agreement.
6.05 Consents and Approvals. REP-T shall have obtained, and delivered
to Corporation and Purchaser evidence thereof, all consents and approvals
required to be obtained in connection with the consummation of the transactions
contemplated hereby.
6.06 No Material Adverse Change. No material, adverse change in the
assets, business operations or financial conditions of REP-T shall have
occurred after the date hereof and prior to the Closing. Corporation and
Purchaser shall have received a letter from the chief financial officer of REP-
T dated the date of the Closing, stating that on the basis of a limited review
(not an audit) of the latest available accounting records of REP-T,
consultations with responsible officers of REP-T, and other pertinent inquiries
that they may deem necessary, they have no reason to believe that during the
period from June 15, 2000 to a specific date not more than five business days
before the Closing, there is any change in the financial condition or results
of operations of REP-T, except for changes incurred in the ordinary and usual
course of business during that period that in the aggregate are not materially
adverse, and except for other changes or transactions, if any, contemplated by
this Agreement. The audit of the REP-T Financial Statements shall be completed
within sixty (60) days from the Closing in compliance with the applicable Rules
and Regulations of the Securities and Exchange Commission (the "SEC") in order
to enable the Corporation to file with the SEC the requisite financial
statements as an exhibit to the
Report on Form 8-K of Corporation regarding the closing of this Agreement.
6.07 Representation Letters. On or before the date of the Closing,
Corporation and Purchaser shall have received a representation of investment
intent letter from Selling Shareholders confirming their
understanding that the PHOTONICS Common Stock to be received by them is
restricted and may not be freely resold unless the shares are registered or an
exemption from registration is available, as well as such other representations
as are reasonably required by Corporation and Purchaser.
6.08 Approval of REP-T Shareholders. This Agreement shall have been
approved by the Board of Directors and by the holders of a majority of the
outstanding capital stock of REP-T.
ARTICLE VII
CONDITIONS PRECEDENT OF SELLING SHAREHOLDERS AND REP-T
Except as may be waived in writing by the Selling Shareholders and REP-T,
the obligations of the Selling Shareholders and REP-T hereunder are subject to
fulfillment at or prior to the Closing of each of
the following conditions:
7.01 Representations and Warranties. The representations and warranties
of the Corporation and Purchaser contained herein shall be true and correct in
all material respects as of the Closing, and the
Selling Shareholders shall not have discovered any material error, misstatement
or omission therein. At the Closing, Selling Shareholders shall have received
a certificate, dated the date of the Closing, and
executed by the authorized person of the Corporation and Purchaser, certifying
in such detail as Selling Shareholders may reasonably request as to the
accuracy of such representations and warranties and the fulfillment of the
obligations and compliance with covenants referred to in Section 7.02 as of
the Closing.
7.02 Covenants. Corporation and Purchaser shall have performed and
complied in all material respects with all covenants or conditions required by
this Agreement to be performed and complied with by it prior to or at the
Closing.
7.03 Opinion. Counsel to Corporation and Purchaser shall deliver to
REP-T its opinion, dated the Closing Date, in form and substance reasonably
satisfactory to counsel for REP-T, to the effect that (a) the Corporation and
Purchaser are each corporations duly organized, validly existing in good
standing under the laws of the state of their respective incorporation, (b)
Corporation and Purchaser have full corporate power and authority to execute
and perform this Agreement, (c) this Agreement has been duly authorized by all
necessary corporate action on the part of the Corporation and Purchaser, and
has been duly executed and delivered by the Corporation and Purchaser and
constitutes the legal, valid and binding obligation of the Corporation and
Purchaser enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency or other similar laws affecting creditors' rights
generally or the availability of equitable remedies, (d) immediately prior to
the Closing, the authorized, issued and outstanding capital stock of
Corporation was as set forth in Section 2.13, (e) neither the execution and
performance of this Agreement nor the consummation of the transactions
contemplated hereby will conflict with, or result in a breach of the terms,
conditions and provisions of, or constitute a
default under the Articles of Incorporation or Bylaws of the Corporation or
Purchaser or, to the best of such counsel's knowledge, any agreement,
indenture or other instrument of which such counsel has knowledge under
which Corporation and Purchaser is bound or to which any of the assets of the
Corporation or Purchaser is subject, or result in the creation or imposition of
any lien, charge or encumbrance upon any such assets,
and (f) to the best of such counsel's knowledge, except as set forth in Section
2.13 and Exhibit 2.13, there are no options, warrants or other securities or
rights outstanding which are convertible into or exercisable for any shares of
capital stock of the Corporation or Purchaser.
7.04 Proceedings. No action, proceeding or order by any court or
governmental body or agency shall have been threatened in writing, asserted,
instituted or entered to restrain or prohibit the
carrying out of the transactions contemplated by this Agreement.
7.05 Consents and Approvals. The Corporation and Purchaser shall have
obtained, and delivered to REP-T evidence thereof, all consents and approvals
required to be obtained in connection with the consummation of the transactions
contemplated hereby.
7.06 No Material Adverse Change. No material, adverse change in the
assets, business operations or financial condition of the Corporation or
Purchaser shall have occurred after the date hereof and prior to the Closing.
The Selling Shareholders shall have received a letter from the consultant to
the Corporation, Xxxxx X. Xxx, dated the date of the Closing, stating that on
the basis of a limited review (not an audit) of the latest available accounting
records of the Corporation and Purchaser, consultations with responsible
officers of the Corporation and Purchaser, and other pertinent inquiries that
the Selling Shareholders and REP-T may deem necessary, he has no reason to
believe that during the period from the date of this agreement to a specific
date not more than five business days before the Closing, there is any change
in the financial condition or results of operations of Corporation and
Purchaser, except for changes incurred in the ordinary and usual course of
business of Corporation and Purchaser, during that period that in the aggregate
are not materially adverse, and except for other changes or transactions, if
any, contemplated by this Agreement.
7.07 Approval by the Shareholders and Board of Directors of the
Corporation and Purchaser. The obligations of the Corporation and Purchaser
hereunder are subject to this Agreement and the Transaction contemplated
herein, including but not limited to the conversion of the Corporation's
corporate debt to shares of the Corporation, the conversion of the Series "A"
preferred stock to common stock and the sale of 90% interest in Sunnyvale
Technology Corporation to Xxxxx X. Xxx, being
approved by the shareholders of the Corporation in accordance with the
procedures set out in the Articles of Incorporation and the By-Laws of the
corporation and pursuant to a duly called meeting of the
shareholders. The obligations of the Corporation and Purchaser hereunder are
further subject to the boards of directors, which shall be elected at the
foregoing meeting by the Corporation and Purchaser, approving
this Agreement and the Transactions contemplated herein.
Included in the approvals set out in this Section 7.07 shall be the following:
(i) The approval the incorporation and sale of 90% Sunnyvale Technology Corp.
after transfer all the corporate assets and business of the Photonics
Corporation division, DTC Data Technology, to
Sunnyvale Technology Corporation, for $ 75,000 cash plus certain assumed
liabilities as of December 31, 1999 including the covenant that Photonics
Corporation will distribute the remaining 10% of Sunnyvale Technology Corp. as
a stock dividend to Photonics shareholders, as of the record date of the
meeting in which this Agreement and the Transaction are approved, after
election of a new board of directors.
(ii) The approval for Corporation to issue a sufficient number of common
shares so that the Selling Shareholders will own approximately 85% of total
issued shares of the Corporation, after full dilution, upon the completion of
the Transaction and for issuing the shares of the Corporation allocated to
accounts payable and debt holders of the Corporation which did not previous
elect to convert, or were subject to litigation that was unresolved at the time
of the merger.
7.08 Audited Financial Statements. Corporation's Form 10K/A shall have
been filed with the Securities and Exchange Commission which shall contain
audited financial statements for the period ended December 31, 1999
("Corporation Financial Statements") .
7.09 Indemnity for Excess Liabilities. A trust (the "Photonics Trust")
shall have been established by the Corporation for the purpose of indemnifying
the Corporation, and the Purchaser against liabilities, claims or debts that
are either disclosed or undisclosed on Corporation Financial Statements that
remain unresolved or remain unconverted into common stock at the time of the
purchase of REP-T. The Photonics Trust shall have a term for a period of
three years after the closing date. The Photonics Trust shall be established
with a third party escrow agent by depositing all the shares of Photonics
set out on Attachment 2 to Exhibit 2.11. Under the terms of the Photonics
Trust, the Corporation's shares that are held in the Photonics Trust may be
sold at the direction of the Trustee or his designated agent. Prior to the
termination of the Photonics Trust, the proceeds of such sales may distributed
out of the Photonics Trust only at the direction of the post closing Board of
Directors of the Corporation and Purchaser.
ARTICLE VIII
MISCELLANEOUS
8.01 Amendment. This Agreement may be amended, modified or supplemented
only by an instrument in writing executed by the party against which
enforcement of the amendment, modification or
supplement is sought.
8.02 Parties in Interest. This Agreement shall be binding on and inure
to the benefit of and be enforceable by Selling Shareholders, REP-T, the
Corporation and the Purchaser, their respective heirs,
executors, administrators, legal representatives, successors and assigns,
except as otherwise expressly provided herein.
8.03 Assignment. Neither this Agreement nor any right created hereby
shall be assignable by either party hereto.
8.04 Notice. Any notice or communication must be in writing and given
by depositing the same in the United States mail, addressed to the party to be
notified, postage prepaid and registered or certified with return receipt
requested or by delivering the same in person. Such notice shall be deemed
received on the date on which it is hand-delivered
or on the third business day following the date on which it is so mailed. For
purposes of notice, the addresses of the parties shall be:
If to REP-T:
XXXXXXXXXX.XXX, Inc., a Texas Corporation
00000 Xxxxx Xxxxx
Xxxxxx, XX 00000
If to the Selling Shareholders:
At the address set forth above.
If to Corporation and Purchaser:
Photonics Corporation
XXXXXXXXXX.XXX, Inc.
0000 Xxxxxxxxx Xxx.
Xxxxxxxxx, XX 00000
With a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
XX Xxx 000000
Xxxxxx, XX 00000
Any party may change its address for notice by written notice given to the
other parties.
8.05 Entire Agreement. This Agreement and the exhibits hereto supersede
all prior agreements and understandings relating to the subject matter hereof,
except that the obligations of any party under any agreement executed pursuant
to this Agreement shall not be affected by this Section.
8.06 Costs, Expenses and Legal Fees. Whether or not the transactions
contemplated hereby are consummated, Corporation shall bear and pay for all
costs and expenses (including attorneys' fees) up to and including a maximum
of $75,000 and above $75,000, REP-T shall bear all costs and expenses
(including attorneys' fees) except that each party hereto agrees to pay the
costs and expenses, including reasonable attorneys' fees, incurred by the
other party in successfully (i) enforcing any of the terms of this Agreement,
or (ii) proving that the other parties breached any of the terms of this
Agreement in any material respect.
8.07 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully
severable and this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision never comprised a part hereof; and
the remaining provisions hereof shall remain in full force
and effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance here from. Furthermore, in lieu of such illegal,
invalid or unenforceable provision, there shall be added automatically as part
of this Agreement, a provision as similar in its terms to such illegal, invalid
or unenforceable provision as may be possible and be legal, valid and
enforceable.
8.08 Governing Law. This Agreement and the rights and obligations of
the parties hereto shall be governed, construed and enforced in accordance with
the laws of the State of Texas. The parties agree that any litigation relating
directly or indirectly to this Agreement must be brought before and determined
by a court of competent jurisdiction with the State of Texas.
8.09 Captions. The captions in this Agreement are for convenience of
reference only and shall not limit or otherwise affect any of the terms or
provisions hereof.
8.10 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of
the date first written above.
SELLING SHAREHOLDERS:
/s/ Xxxx Xxxxxxxx
___________________________
Xxxx Xxxxxxxx, individually and as
agent for all shareholders
REP-T:
XXXxxxxxxx.xxx, Inc., a Texas corporation
/s/ Xxx Xxxxxx
___________________________
Xxx Xxxxxx, President
PURCHASER:
XXXXXXXXXX.XXX, Inc. a Delaware corporation
By Photonics Corporation, sole shareholder
/s/ Xxxxx X. Xxx
___________________________
By: Xxxxx X. Xxx, Managing Consultant
CORPORATION:
Photonics Corporation
/s/ Xxxxx X. Xxx
___________________________
Xxxxx X. Xxx, Managing Consultant
EXHIBIT 2.03
To Stock Purchase Agreement and Plan of Reorganization
Conflicts or Violations as of June 15, 2000
1. Upon approval of the Agreement and Transaction by the shareholders of the
Corporation, there will be no conflicts or violations at Closing.
EXHIBIT 2.05
To Stock Purchase Agreement and Plan of Reorganization
Consents as of June 15, 2000
1. Upon approval of the Agreement and Transaction by the shareholders of the
Corporation and compliance with the provision of the California Corporations
Code, there will be no consents required at Closing.
EXHIBIT 2.07
To Stock Purchase Agreement and Plan of Reorganization
Litigation as of June 15, 2000
1. Abstract of judgment dated October 12, 1999; Plaintiff Insight
Electronics. Defendant Data Technologies Corporation. Amount of judgment:
$110,252.00
2. Abstract of judgment dated October 12, 1999; Plaintiff: ACI Corporation.
Defendant Data Technologies Corporation. Amount of judgment: $16,753.00.
3. Default Judgment February 17, 2000, Plaintiff Danka Funding Company v.
Defendant Photonics, Docket No. X-0000-00, Xxxxxxxx Xxxxx xx Xxx Xxxxxx Law
Division, Bergen County for $40,474.00, with proposed settlement offer by
Danka of $ 30,355.72 as of March 22, 2000. (lease of Kodak 85 Copier)
4. Litigation Superior Court, Contra Costa County, CA., Plaintiff L.A.
Commercial Group, Inc (Bay Alarm) Defendant Photonics Corporation, for the
amount of $ 8,666.00.
5. Abstract of Judgment dated January 13, 2000, Judicial District Court of
Xxxxxx County, Texas, Plaintiff Innovative Vanguard Group, Inc. v. Defendant
Photonics Corporation. Amount of judgment $ 99,630.45.
6. Potential Litigation - Fireman's Fund for $ 6,030. 00
7. Potential Litigation- Accountant Plus now known as Xxxxxx Staff- for
$2,896.00
8. Potential claim from Fudan University, Shanghai, China in the amount
of $6,000.00.
9. Potential claim from an employee of the predecessor company, Qume, who
claims that he contracted black lung disease after inhaling toner from a
printer located in the office. There has been no contact relating to this
potential claim in more than one year.
EXHIBIT 2.08
To Stock Purchase Agreement and Plan of Reorganization
Tax Returns as of June 15, 2000
1. The Company has not filed it's Federal Income Tax return for it's fiscal
year 1998.
2. The Company has not filed it's Federal Income Tax return for it's fiscal
year 1999.
3. The Company has not filed it's California State Income Tax return for
it's fiscal year 1998.
4. The Company has not filed it's California State Income Tax return for
it's fiscal year 1999.
EXHIBIT 2.09
To Stock Purchase Agreement and Plan of Reorganization
Contracts and Agreements as of June 15, 2000
1. None.
EXHIBIT 2.11
To Stock Purchase Agreement and Plan of Reorganization
Changes to Financial Statements as of June 15, 2000
1. As to items (g) and (i) of the Agreement, the Corporation has transferred
all of the assets, business and certain liabilities of its operating division,
DTC Data Technologies, to Sunnyvale Technology Corporation, a Texas corporation
that was, at incorporation, a wholly owned subsidiary of the Corporation. The
Corporation has sold, subject to shareholder approval, 90% of the shares of
Sunnyvale Technology Corporation to Xxxxx X. Xxx.
Further, the Corporation has incorporated a new wholly owned subsidiary,
XXxxxxxxxx.xxx, Inc., a Delaware corporation, for the purpose completing the
Transaction as describe in the Agreement.
2. As to items (c), (e) and (k) of the Agreement, the Corporation has
negotiated with the following creditors to issue common stock of the
Corporation in exchange for forgiveness of their respective
creditor's debt:
Amount of Amount of Number of Creditor
Original Debt Negotiated Debt Common Shares
to be Issued
See attachments 1,2 and 3 to this exhibit that are financial print outs of the
creditor status.
3. As to item (c) of the Agreement, the Corporation has received the
following advances of money in the form of shareholder loans from Xxxxx X. Xxx:
Xxxxx Xxx $ 483,000
Xxxxx X. Xxx $ 549,514
EXHIBIT 2.11
To Stock Purchase Agreement and Plan of Reorganization
Attachment 1, Accounts Payable that have agreed to Convert to Common Shares
Category Amount of Amount of
Account Receivable Common Shares To be Issued
ACTION WELL 580,876 261,394
AEROCRUISE TRAVEL 3,500 1,575
XXXXX OF LOS ANGELES 23,000 10,350
BROAD AND CAS 26,117 11,753
XXXXXXX PHOLGER 2,654 1,194
XXXXXX, GODWARD 138,339 62,253
CORTELCO 147,534 66,390
XXXXX XXX 1,061 477
DUET TECHNOLOGIES 65,000 29,250
FEDERAL EXPRESS 1,125 000
XXXXXX X, XxXXXXXX 82,715 37,222
XXXXX XXXXXXXX 6,186 2,784
XXXXXXXXXX 8 ASSOC. 18,422 8,290
INCREMENTAL SALES 3,589 1,615
INTERNATIONAL FREIGHT 13,212 5,945
XXXXX X. XXX 5,655 2,545
LADAS & PARRY 9,707 4.368
XXXXXXX XXX 3,638 1,637
MICROLINK 42,600 19,170
NOR-CAL MOVING 8,184 3,683
PERSON ELECTRONICS 24,297 10,934
XX XXXXXXXXX 11,602 5,221
SUPERIOR TEMP 3,627 1,632
TECHNICAL RESOURCES 1,168 526
US WEB 3,637 1,637
XXXX-XXXXX PUBLISHING 7,929 3,568
Total AR 1,235,374 555,919
