EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement") made and entered into April 4,
2003 (the "Effective Date"), by and among Modern MFG Services, Inc., a Nevada
corporation with a principal place of business in Washington ("Parent"), Modern
Acquisition, Co., a Washington corporation and wholly-owned subsidiary of the
Parent ("Merger Sub"), and Integrated Maritime Platforms International, Inc., a
Washington corporation ("Integrated"), where Merger Sub will merge into
Integrated and the separate corporate existence of Merger Sub shall cease,
Integrated shall continue as the surviving corporation, become a wholly-owned
subsidiary of Parent and still be known as Integrated Maritime Platforms
International, Inc. (collectively, the Parties).
RECITALS
A. The Parties intend that the execution of this Agreement to adopt a "plan
of reorganization" within the meaning of Section 368 of the Internal Revenue
Code of 1986, as amended (the "Code").
B. Upon the terms and subject to the conditions of this Agreement, Parent,
Merger Sub and Integrated intend to enter into a business combination
transaction.
C. Immediately upon the Effective Time (as defined in Section 1.2) of the
Merger (as defined herein), the Board of Directors of the Parent (as the
combined Parent resulting from such business combination transaction) will
consist of at least one (1) member, as set forth herein. It is also contemplated
that the senior management of the combined company will, as set forth herein,
consist of senior management from the Parent and Integrated.
D. The Board of Directors of the Parent (i) has determined that the Merger
is consistent with and in furtherance of the long-term business strategy of the
Parent and fair to, and in the best interests of, the Parent and its
stockholders and (ii) has approved this Agreement, the Merger and the other
transactions contemplated by this Agreement.
E. The Board of Directors of Integrated (i) has determined that the Merger
is consistent with and in furtherance of the long-term business strategy of
Integrated and fair to, and in the best interests of, Integrated and its
shareholders and (ii) has approved this Agreement, the Merger, and the other
transactions contemplated by this Agreement.
F. The Certain Share Exchange agreement dated September 18, 2002 between
the Parties (the "Share Exchange Agreement") is null and void. The Share
Exchange Agreement no longer has full force and effect.
G. The Parties intend that Parent be renamed as "Radix Marine, Inc." and
will acquire a new trading symbol for Radix Marine, Inc. to be used on the
Over-the-Counter Bulletin Board as soon as possible after the consummation of
the Merger.
H. The Parties agree that Parent shall close its offices and operations
located at 0000 000xx XX, Xxxxxxxx, Xxxxxxxxxx 00000 and move them to
Integrated's existing offices located at 0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxxxxx 00000 as soon as possible.
I. The Parties agree that Parent shall (i) transfer funds from all its
existing bank accounts to Integrated's bank accounts and (ii) close said bank
accounts. The Parties also agree that (i) all existing bank accounts in the name
of Integrated shall be change to "Radix Marine, Inc." and (ii) and any new bank
accounts opened after the consummation of this Merger shall be open in the name
of "Radix Marine, Inc."
NOW, THEREFORE, in consideration of the covenants, promises and representations
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
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ARTICLE I
THE MERGER
SECTION 1
1.1 1.1 THE MERGER. At the Effective Time and subject to and upon the
terms and conditions of this Agreement and the applicable provisions of
Washington and Nevada Law, Merger Sub will merge into Integrated and the
separate corporate existence of Merger Sub shall cease, Integrated shall
continue as the surviving corporation and become a wholly-owned subsidiary the
Parent (the "Merger"). The Parent shall be renamed as "Radix Marine, Inc." and
continue as Radix Marine, Inc ("Radix Marine"). After the Merger, Parent is
hereinafter referred to as "RADIX MARINE."
1.2 EFFECTIVE TIME; CLOSING. Subject to the provisions of this
Agreement, the parties hereto shall cause the Merger to be consummated by filing
a Article of Merger, substantially in the form of Exhibits A, B, and C,
respectively, hereto (the "ARTICLES OF MERGER"), with the Secretary of State of
the State of Washington and the Secretary of State of Nevada, in accordance with
the relevant provisions of Washington and Nevada Law (the time of such filing
(or such later time as may be agreed in writing by the parties and specified in
the Certificate of Merger) being the "EFFECTIVE TIME") as soon as practicable on
or after the Closing Date (as defined herein). Unless the context otherwise
requires, the term "AGREEMENT" as used herein refers collectively to this
Agreement and Plan of Reorganization and the Articles of Merger. The closing of
the Merger (the "CLOSING") shall take place at the offices of The Xxxx Law
Group, PLLC, 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxxxx 00000, at a time
and date to be specified by the parties, which shall be no later than the second
business day after the satisfaction or waiver of the conditions set forth in
this Agreement, or at such other time, date and location as the parties hereto
agree in writing (the "CLOSING DATE").
1.3 EFFECT OF THE MERGER. At the Effective Time, the effect of
the Merger shall be as provided in this Agreement and the applicable provisions
of Washington and Nevada Law. Without limiting the generality of the foregoing,
and subject thereto, at the Effective Time all assets, property, rights,
privileges, powers and franchises of the Parent and Integrated shall vest in
Radix Marine, and all debts, liabilities and duties of the Parent and Integrated
shall become the debts, liabilities and duties of Radix Marine.
1.4 ARTICLES OF INCORPORATION; BYLAWS. At the Effective Time, the
Articles of Incorporation of the Parent, as in effect immediately prior to the
Effective Time, shall be the Articles of Incorporation of Radix Marine until
thereafter amended as provided by law. Further, the Bylaws of the Parent, as in
effect immediately prior to the Effective Time, shall be, at the Effective Time,
the Bylaws of Radix Marine until thereafter amended.
1.5 EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue of
the Merger and without any action on the part of the Parent, Merger Sub,
Integrated, or the holders of any of the following securities, the following
shall occur:
1.6 CONVERSION OF INTEGRATED COMMON STOCK.
(1) Each share of Common Stock of Integrated issued and
outstanding immediately prior to the Effective Time, will be exchanged, on a
1-for-1 basis with each share of Common Stock of Merger Sub; and
(2) Each share of Common Stock of Integrated (the "INTEGRATED
COMMON STOCK") will then be automatically converted (subject to Agreement) into
the right to receive ten (10) (the "EXCHANGE RATIO") shares of Common Stock, at
par value of $.001, of the Parent (the "PARENT COMMON STOCK") upon surrender of
the certificate representing such share of Integrated Common Stock in the manner
provided in Section 1.6 (or in the case of a lost, stolen or destroyed
certificate, upon delivery of an affidavit (and bond, if required) in the manner
provided in this
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Agreement). If any shares of Integrated Common Stock outstanding immediately
prior to the Effective Time are unvested or are subject to a repurchase option,
risk of forfeiture or other condition under any applicable restricted stock
purchase agreement or other agreement with Integrated, then the shares of Parent
Common Stock issued in exchange for such shares of Integrated Common Stock will
also be unvested and subject to the same repurchase option, risk of forfeiture
or other condition, and the certificates representing such shares of Parent
Common Stock may accordingly be marked with appropriate legends. Integrated
shall take all action that may be necessary to ensure that, from and after the
Effective Time, the Parent is entitled to exercise any such repurchase option or
other right set forth in any such restricted stock purchase agreement or other
agreement.
1.7 PERCENTAGE OWNERSHIP. It is understood and agreed by the
Parties that the aggregate number of shares of Parent Common Stock issuable to
the Integrated shareholders by virtue of the Merger as of the date hereof shall
equal approximately fifteen percent (15%) of the total issued and outstanding
Parent Stock after the Merger (which, for the avoidance of doubt, assumes that
all outstanding securities exercisable for, or convertible into, shares of
Integrated Common Stock have not been so exercised or converted, and that all of
the Integrated Stock Options have not been exercised), as adjusted to
appropriately reflect the effect of any stock split, reverse stock split, stock
dividend (including any dividend or distribution of securities convertible into
Parent Common Stock or Integrated Common Stock), reorganization,
recapitalization or other like change with respect to Parent Common Stock or
Integrated Common Stock occurring on or after the date hereof and prior to the
Effective Time. All options, warrants or other securities of Integrated
convertible into Parent Common Stock, whether authorized and unissued or issued
and outstanding, upon issuance and/or conversion, represent approximately zero
percent (0%) of the shares of Parent Common Stock outstanding on a fully-diluted
basis, assuming consummation of the Merger (which, for the avoidance of doubt,
assumes that all the Parent outstanding securities exercisable for, or
convertible into, shares of Parent Common Stock have been so exercised or
converted, and that all of the Parent Stock Options have been exercised as of
the Effective Date).
1.8 CAPITAL STOCK OF INTEGRATED. Each share of Integrated
Common Stock issued and outstanding immediately prior to the Effective Time
shall be converted into ten (10) validly issued, fully paid, duly authorized,
nonassessable restricted shares of Parent Common Stock pursuant to this
Agreement. Each certificate evidencing ownership of shares of Integrated Common
Stock shall continue to evidence ownership of such shares of capital stock of
the Parent. Any shares of Integrated Common Stock that are (i) owned by
Integrated and (ii) owned by the Parent will be cancelled at the Effective Time.
Integrated is aware that Parent Common Stock has not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), or any state
securities laws. The legend set forth below on the certificate representing the
converted Parent Common Stock shall state that (i) the shares of Parent Common
Stock have not been registered and setting for the restriction on transfer
contemplated hereby and (ii) the placing of a stop transfer order on the books
of the Corporation and with any transfer agents against the Shares. The
following legend shall be placed on certificates representing the shares of
Parent Common Stock:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER UNITED STATES FEDERAL OR STATE SECURITIES LAWS AND MAY NOT
BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED OR ASSIGNED
FOR VALUE, DIRECTLY OR INDIRECTLY, NOR MAY THE SECURITIES BE
TRANSFERRED ON THE BOOKS OF THE PARENT, WITHOUT REGISTRATION OF
SUCH SECURITIES UNDER ALL APPLICABLE UNITED STATES FEDERAL OR
STATE SECURITIES LAWS OR COMPLIANCE WITH AN APPLICABLE EXEMPTION
THEREFROM, SUCH COMPLIANCE, AT THE OPTION OF THE PARENT, TO BE
EVIDENCED BY AN OPINION OF SHAREHOLDER'S COUNSEL, IN FORM
ACCEPTABLE TO THE PARENT, THAT NO VIOLATION OF SUCH REGISTRATION
PROVISIONS RESULT FROM ANY PROPOSED TRANSFER OR ASSIGNMENT.
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Each Integrated shareholder shall understand that at the present time Rule
144 promulgated under the Securities Act may not relied upon for the resale or
distribution of the restricted shares of Parent Common Stock because the Parent
Common Stock has not been registered pursuant to the Securities Act.
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1.9 ADJUSTMENTS TO EXCHANGE RATIO. The Exchange Ratio shall be
adjusted (such adjustment to be subject to the consent of the Parent, which
shall not be unreasonably withheld) to reflect appropriately the effect of any
stock split, reverse stock split, stock dividend (including any dividend or
distribution of securities convertible into Parent Common Stock or Integrated
Common Stock), reorganization, recapitalization or other like change with
respect to Parent Common Stock or Integrated Common Stock occurring on or after
the date hereof and prior to the Effective Time.
1.10 FRACTIONAL SHARES. No fraction of a share of Parent Common
Stock will be issued by virtue of the Merger, but in lieu thereof each holder of
shares of Parent Common Stock who would otherwise be entitled to a fraction of a
share of Parent Common Stock (after aggregating all fractional shares of Parent
Common Stock to be received by such holder) shall receive from Parent one full
share of Parent Common Stock (i.e. rounded down to the nearest whole share).
1.11 EXCHANGE AGENT. Parent shall select Pacific Stock Transfer
located at 000 Xxxx Xxxx Xxxxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxx 00000, to
act as the exchange agent (the "EXCHANGE AGENT") in the Merger.
1.12 THE PARENT TO PROVIDE COMMON STOCK. Promptly after
the Effective Time, the Parent shall make available to the Exchange Agent, for
exchange in accordance with this Agreement, certificates representing the shares
of Parent Common Stock issuable pursuant to this Agreement in exchange for
outstanding shares of Parent Common Stock.
1.13 EXCHANGE PROCEDURES. Promptly after the Effective Time, the
Parent shall issue to each Integrated share holder of record (as of the
Effective Time) a certificate or certificates (the "CERTIFICATES") which
immediately prior to the Effective Time represented outstanding shares of
Integrated Common Stock whose shares were converted into the right to receive
shares of Parent Common Stock pursuant to this Agreement, (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such other
provisions as the Parent may reasonably specify) and (ii) instructions for use
in effecting the surrender of the Certificates in exchange for certificates
representing shares of Parent Common Stock. Upon surrender of Certificates for
cancellation to the Exchange Agent or to such other agent or agents as may be
appointed by the Parent, together with such letter of transmittal, duly
completed and validly executed in accordance with the instructions thereto, the
holders of such Certificates shall be entitled to receive in exchange therefor
certificates representing the number of whole shares of Parent Common Stock
which such holders have the right to receive and the Certificates so surrendered
shall forthwith be canceled. Until so surrendered, outstanding Certificates will
be deemed from and after the Effective Time, for all corporate purposes to
evidence only the ownership of the number of full shares of Integrated Common
Stock into which such shares of Parent Common Stock shall be exchanged.
1.14 DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No
dividends or other distributions declared or made after the date of this
Agreement with respect to Parent Common Stock with a record date after the
Effective Time will be paid to the holders of any unsurrendered Certificates
with respect to the shares of Parent Common Stock represented thereby until the
holders of record of such Certificates shall surrender such Certificates.
Following surrender of any such Certificates, the Exchange Agent shall deliver
to the record holders thereof, without interest, certificates representing whole
shares of Parent Common Stock issued in exchange hereof and, subject to
applicable law, the amount of any such dividends or other distributions with a
record date after the Effective Time payable with respect to such whole shares
of Parent Common Stock.
1.15 TRANSFERS OF OWNERSHIP. If certificates for shares of Parent
Common Stock are to be issued in a name other than that in which the
Certificates surrendered in exchange therefore are registered, it will be a
condition of the issuance thereof that the Certificates so surrendered will be
properly endorsed and otherwise in proper form for transfer and that the persons
requesting such exchange will have paid to the Parent or any agent designated by
it any transfer or other taxes required by reason of the issuance of
certificates for shares of Parent Common Stock in any name other than that of
the registered holder of the
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Certificates surrendered, or established to the satisfaction of the Parent or
any agent designated by it that such tax has been paid or is not payable.
1.16 NO LIABILITY. Notwithstanding anything to the contrary in
this Agreement, neither the Exchange Agent, the Parent, Radix Marine nor any
party hereto shall be liable to a holder of shares of Parent Common Stock or
Integrated Common Stock for any amount properly paid to a public official
pursuant to any applicable abandoned property, escheat or similar law.
1.2 1.17 NO FURTHER OWNERSHIP RIGHTS IN INTEGRATED COMMON STOCK.
All shares of Parent Common Stock issued upon the surrender for exchange of
shares of the Integrated Common Stock in accordance with the terms hereof shall
be deemed to have been issued in full satisfaction of all rights pertaining to
such shares of Integrated Common Stock, and there shall be no further
registration of transfers on the records of Integrated of shares of Integrated
Common Stock which were outstanding immediately prior to the Effective Time. If
after the Effective Time Certificates are presented to the Parent for any
reason, they shall be canceled and exchanged as provided in this Agreement.
1.18 ISSUED PARENT COMMON STOCK AFTER THE DATE OF
CONSUMMATION OF THIS AGREEMENT. Upon completion of the Parent's changing of its
name to Radix Marine, Inc., all shares of Parent Common Stock issued after the
date of consummation of this Agreement will be in the name of Radix Marine, Inc.
1.3 1.19 TAX AND ACCOUNTING CONSEQUENCES. It is intended by the
parties hereto that the Merger shall constitute a reorganization within the
meaning of Section 368 of the Code. The parties hereto adopt this Agreement as a
"plan of reorganization" within the meaning of Sections 1.368-2(g) and
1.368-3(a) of the United States Treasury Regulations.
1.4 1.20 TAKING OF NECESSARY ACTION, FURTHER ACTION. If, at any time
after the Effective Time, any further action is necessary or desirable to carry
out the purposes of this Agreement and to vest Radix Marine with full right,
title and possession to all assets, property, rights, privileges, powers and
franchises of the Parent and Integrated, the officers and directors of the
Parent and Integrated will take all such lawful and necessary action, so long as
such action is consistent with this Agreement.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE PARENT
SECTION 2.
The Parent represents and warrants to Integrated, subject to the exceptions
specifically disclosed in writing and referencing a specific representation in
the disclosure letter supplied by the Parent to Integrated dated as of the date
hereof and certified by a duly authorized officer of the Parent (the "PARENT
DISCLOSURE LETTER"), as follows:
2.1 2.1 ORGANIZATION OF THE PARENT. The Parent is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation; has the corporate power and authority to own,
lease and operate its assets and property and to carry on its business as now
being conducted and as proposed to be conducted; and is duly qualified or
licensed to do business and is in good standing in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature of its
activities makes such qualification or licensing necessary, except where the
failure to be so qualified would not have a Material Adverse Effect (as defined
herein) on the Parent.
2.2 THE PARENT HAS NO SUBSIDIARIES. The Patent has no
subsidiaries other than Merger Sub. Parent shall deliver or make available to
the Integrated a true and correct copy of the Certificate of Incorporation and
Bylaws of the Parent, as amended to date, and each such instrument is in full
force and effect as soon as possible. The Parent is not in violation of any of
the provisions of its Articles of Incorporation or Bylaws or equivalent
governing instruments.
When used in connection with the Parent, the term "MATERIAL ADVERSE EFFECT"
means, for purposes of this Agreement, any change, event or effect that is
materially adverse to the business, assets (including intangible assets),
financial condition or results of operations of the Parent taken as a whole
except for those changes, events and effects that are directly caused by (i)
conditions affecting the United States economy as a whole, or (ii) conditions
affecting the internet industry as a whole, which conditions (in the case of
clause (i) or (ii)) do not affect the Parent in a disproportionate manner) or
(iii) conditions that in the good faith judgment of the Parent Board of
Directors result principally from the execution or delivery of this Agreement or
the announcement of the pendency of the Merger.
2.2 2.3 PARENT CAPITAL STRUCTURE. The authorized capital stock of
the Parent consists of shares of Common Stock of which there were approximately
twenty-two million, five hundred seventy-eight thousand, and eight hundred
seventy-two (22,578,372) shares issued and outstanding as of the date of this
Agreement. All outstanding shares of Parent Common Stock are duly authorized and
validly issued and are not subject to preemptive rights created by statute, the
Article of Incorporation or Bylaws of the Parent or any agreement or document to
which the Parent is a party or by which it is bound.
The Parent Disclosure Letter sets forth the following information with respect
to each Parent Stock Option outstanding as of the date of this Agreement: (i)
the name of the optionee; (ii) the particular plan pursuant to which such Parent
Stock Option was granted; (iii) the number of shares of Parent Common Stock
subject to such Parent Stock Option; (iv) the exercise price of such Parent
Stock Option; (v) the date on which such Parent Stock Option was granted; and
(vi) the date on which such Parent Stock Option expires. The Parent has made
available to Integrated accurate and complete copies of the Parent Stock Option
Plans and the forms of all agreements evidencing the Parent Stock Options. All
shares of Parent Common Stock subject to issuance as aforesaid, upon issuance on
the terms and conditions specified in the instruments pursuant to which they are
issuable, would be duly authorized, validly issued, fully paid and
nonassessable. Except as set forth in the Parent Disclosure Letter of this
Agreement, there are no commitments or agreements of any character to which the
Parent is bound obligating the Parent to accelerate the vesting of any Parent
Stock Option as a result of the Merger.
2.3 2.4 OBLIGATIONS WITH RESPECT TO CAPITAL STOCK. Except as set
forth in Section 2.3 and the Parent Disclosure Letter of this Agreement, there
are no equity securities, partnership interests or similar ownership interests
of any class of, or any securities exchangeable or convertible into or
exercisable for, the Parent equity securities, partnership interests or similar
ownership interests, issued, reserved for issuance or outstanding. There are no
equity securities, partnership interests or similar
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ownership interests of the Parent, or any security exchangeable or convertible
into or exercisable for such equity securities, partnership interests or similar
ownership interests, issued, reserved for issuance or outstanding. Except as set
forth in this Agreement, there are no options, warrants, equity securities,
partnership interests or similar ownership interests, calls, rights (including
preemptive rights), commitments or agreements of any character to which the
Parent is a party or by which it is bound obligating the Parent to issue,
deliver or sell, or cause to be issued, delivered or sold, or repurchase, redeem
or otherwise acquire, or cause the repurchase, redemption or acquisition, of any
shares of capital stock, partnership interests or similar ownership interests of
the Parent or obligating the Parent to grant, extend, accelerate the vesting of
or enter into any such option, warrant, equity security, call, right, commitment
or agreement. There are no registration rights and, to the knowledge of the
Parent, as of the date of this Agreement, there are no voting trusts, proxies or
other agreements or understandings with respect to any equity security of any
class of the Parent.
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2.4 2.5 AUTHORITY. The Parent has all requisite corporate power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Parent. This Agreement has
been duly executed and delivered by the Parent and, assuming the due
authorization, execution and delivery by the Parent and constitutes a valid and
binding obligation of the Parent, enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy and other similar laws and
general principles of equity. The execution and delivery of this Agreement by
the Parent does not, and the performance of this Agreement by the Parent will
not, (i) conflict with or violate the Articles of Incorporation or Bylaws of the
Parent or (ii) assuming the receipt of all material consents, waivers and
approvals referred to in this Agreement, result in any breach of or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or impair the Parent's rights or alter the rights or obligations
of any third party under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or encumbrance on any of the properties or assets of the Parent pursuant to, any
material note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the Parent is a
party or by which the Parent or its or any of their respective properties are
bound or affected. The Parent Schedules list all material consents, waivers and
approvals under any of the Parent's agreements, contracts, licenses or leases
required to be obtained in connection with the consummation of the transactions
contemplated hereby.
No consent, approval, order or authorization of, or registration, declaration or
filing with any court, administrative agency or commission or other governmental
authority or instrumentality, foreign or domestic ("GOVERNMENTAL ENTITY"), is
required by or with respect to the Parent in connection with the execution and
delivery of this Agreement or the consummation of the Merger, except for (i) the
filing of the Articles of Merger with the Secretary of State for the relevant
jurisdictions, (ii) such consents, approvals, orders, authorizations,
registrations, declarations and filings (if any) as may be required under
applicable federal and state securities laws and the securities or antitrust
laws of any foreign country, and (iii) such other consents, authorizations,
filings, approvals and registrations (if any) which if not obtained or made
would not be material to the Parent or the Integrated or have a material adverse
effect on the ability of the parties to consummate the Merger.
2.6 PARENT'S SHAREHOLDER APPROVAL IS NOT REQUIRED FOR THE MERGER.
Pursuant to Nevada Revised Statute ("NRS") 92A.130, shareholder approval of the
surviving domestic corporation (Parent) is not required if:
(1) "The articles of incorporation of the surviving domestic corporation will
not differ from its articles before the merger." Parent's (surviving domestic
corporation) Articles of Incorporation will remain the same after the Merger.
(2) "Each shareholder of the surviving domestic corporation whose shares were
outstanding immediately before the effective date of the merger will hold the
same number of shares, with identical designations, preferences, limitations and
relative rights immediately after the merger." Each of Parent's existing
shareholders will hold the same number of Parent Common Stock, with (i)
identical designations, (ii) preferences, (iii) limitations, and (iv) relative
rights immediately after the Merger.
(3) "The number of voting shares1 outstanding immediately after the merger, plus
the number of voting shares issued as a result of the Merger, either by the
conversion of securities pursuant to the merger or the exercise rights and
warrants issued pursuant to the merger, will not exceed by more than twenty (20)
percent the total number of voting shares of the surviving domestic corporation
outstanding before the merger." The number of the voting shares immediately
after the Merger (22,578,872), plus the number of voting shares issued as result
of the Merger (4,000,000) equaling 26,578,872 exceed the voting shares
------------------
(1) "Voting shares" means shares that entitle their holder to vote
unconditionally in elections of directors.
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issued and outstanding immediately prior to the Merger by fifteen percent (15%),
which is less than twenty percent (20%) of the voting shares of the Parent
outstanding before the Merger.
(4) "The number of participating shares2 outstanding immediately after the
merger, plus the number of participating shares issuable as a result of the
merger, either by the conversion of securities issued pursuant to the merger or
the exercise of rights and warrants issued pursuant to the merger or the
exercise of rights and warrants issued pursuant to the merger, will not exceed
by more than 20 percent the total number of participating shares outstanding
immediately before the merger." The number of the participating shares
immediately after the Merger (22,833,372), plus the number of participating
shares issued as result of the Merger (4,000,000), equal 26,833,372, which is
fifteen percent (15%), and does not exceed twenty percent (20%) of the
participating shares of the Parent outstanding before the Merger.
2.5 2.7 PARENT FINANCIAL STATEMENTS. Each of the consolidated
financial statements (including, in each case, any related notes thereto) of the
Parent (the "THE PARENT FINANCIALS"), (x) was prepared in accordance with
generally accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes thereto
or, in the case of unaudited interim financial statements, and (y) fairly
presented the consolidated financial position of the Parent and its subsidiaries
as of and at the respective dates thereof and the consolidated results of the
Parent's operations and cash flows for the periods indicated, except that the
unaudited interim financial statements may not contain footnotes and were or are
subject to normal and recurring year-end adjustments. The balance sheet of the
Parent as of December 31, 2002 as reflected in its Form 10-QSB filed on March
10, 2003, is hereinafter referred to as the "THE PARENT BALANCE SHEET." Except
as disclosed in the Parent Financials, since the date of the Parent Balance
Sheet the Parent has no liabilities (absolute, accrued, contingent or otherwise)
of a nature required to be disclosed on a balance sheet or in the related notes
to the consolidated financial statements prepared in accordance with GAAP which
are, individually or in the aggregate, material to the business, results of
operations or financial condition of the Parent taken as a whole, except
liabilities (i) provided for in the Parent Balance Sheet, or (ii) incurred since
the date of the Parent Balance Sheet in the ordinary course of business
consistent with past practices.
2.6 2.8 PARENT SEC FILINGS; PARENT FINANCIAL STATEMENTS.
(a) The Parent has filed all forms, reports and documents required to be filed
with the SEC since the date of this Agreement, and has made available to the
Parent such forms, reports and documents in the form filed with the SEC. All
such required forms, reports and documents (including those that the Parent may
file subsequent to the date hereof) are referred to herein as the "PARENT SEC
REPORTS." As of their respective dates, the Parent SEC Reports (i) were prepared
in all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such Parent SEC Reports, and (ii) did not at the time
they were filed (or if amended or superseded by a filing prior to the date of
this Agreement, then on the date of such filing) contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) Each of the consolidated financial statements (including, in each case, any
related notes thereto) contained in Parent SEC Reports (the "PARENT
FINANCIALS"), including any Parent SEC Reports filed after the date hereof until
the Closing, (x) complied as to form in all material respects with the published
rules and regulations of the SEC with respect thereto, (y) was prepared in
accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto or, in the case of
unaudited interim financial statements, as may be permitted by the SEC on
----------------------
2 "Participating shares" means shares that entitle their holder to
participate without limitation in distributions
13
Form 10-QSB under the Exchange Act) and (z) fairly presented the financial
position of the Parent as at the respective dates thereof and the results of the
Parent's operations and cash flows for the periods indicated, except that the
unaudited interim financial statements may not contain footnotes and were or are
subject to normal and recurring year-end adjustments. The balance sheet of the
Parent contained in Parent SEC Reports as of March 10, 2003, is hereinafter
referred to as the "PARENT BALANCE SHEET." Except as disclosed in the Parent
Financials, since the date of the Parent Balance Sheet, the Parent has no
liabilities (absolute, accrued, contingent or otherwise) of a nature required to
be disclosed on a balance sheet or in the related notes to the consolidated
financial statements prepared in accordance with GAAP which are, individually or
in the aggregate, material to the business, results of operations or financial
condition of the Parent and its subsidiaries taken as a whole, except
liabilities (i) provided for in the Parent Balance Sheet, or (ii) incurred since
the date of the Parent Balance Sheet in the ordinary course of business
consistent with past practices.
2.7 2.9 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of the
Parent Balance Sheet there has not been: (i) any Material Adverse Effect on the
Parent, (ii) any declaration, setting aside or payment of any dividend on, or
other distribution (whether in cash, stock or property) in respect of, any of
the Parent's capital stock, or any purchase, redemption or other acquisition by
the Parent of any of the Parent's capital stock or any other securities of the
Parent or any options, warrants, calls or rights to acquire any such shares or
other securities except for repurchases from employees following their
termination pursuant to the terms of their pre-existing stock option or purchase
agreements, (iii) any split, combination or reclassification of any of the
Parent's capital stock, (iv) any granting by the Parent of any increase in
compensation or fringe benefits, except for normal increases of cash
compensation in the ordinary course of business consistent with past practice,
or any payment by the Parent of any bonus, except for bonuses made in the
ordinary course of business consistent with past practice, or any granting by
the Parent of any increase in severance or termination pay or any entry by the
Parent into any currently effective employment, severance, termination or
indemnification agreement or any agreement the benefits of which are contingent
or the terms of which are materially altered upon the occurrence of a
transaction involving the Parent of the nature contemplated hereby, (v) entry by
the Parent into any licensing or other agreement with regard to the acquisition
or disposition of any material Parent IP Rights (as defined in Section 2.12
other than licenses in the ordinary course of business consistent with past
practice, (vi) any material change by the Parent in its accounting methods,
principles or practices, except as required by concurrent changes in GAAP, or
(vii) any revaluation by the Parent of any of its assets, including, without
limitation, writing down the value of capitalized inventory or writing off notes
or accounts receivable other than in the ordinary course of business.
2.8 2.10 TAXES.
DEFINITION OF TAXES. For the purposes of this Agreement, "Tax" or "Taxes" refers
to any and all (i) federal, state, local and foreign taxes, assessments and
other governmental charges, duties, impositions and liabilities relating to
taxes, including taxes based upon or measured by gross receipts, income,
profits, sales, use and occupation, and value added, ad valorem, transfer,
franchise, withholding, payroll, recapture, employment, excise and property
taxes, (ii) all interest, penalties and additions imposed with respect to such
amounts, and (iii) any obligations to any tax authority under Treasury
Regulation 1.1502-6 or any similar provision of state, local or foreign law.
2.11 TAX RETURNS AND AUDITS. The Parent has timely filed all
federal, state, local and foreign returns, estimates, information statements and
reports ("RETURNS") relating to Taxes required to be filed by the Parent, except
such Returns which are not material to the Parent, and have paid all Taxes shown
to be due on such Returns. All such Returns are true, correct and complete in
all material respects.
The Parent as of the Effective Time will have withheld and paid over, as
appropriate, with respect to its employees all federal and state, local and/or
foreign income taxes, Taxes pursuant to the Federal Insurance Contribution Act
("FICA"), Taxes pursuant to the Federal Unemployment Tax Act ("FUTA") and other
Taxes required to be withheld.
14
The Parent has not been delinquent in the payment of any Tax nor is there
any Tax deficiency outstanding, proposed or assessed against the Parent, nor has
the Parent executed any waiver of any statute of limitations on or extending the
period for the assessment or collection of any Tax.
No audit or other examination of any Return of the Parent is presently in
progress, nor has the Parent been notified of any request for such an audit or
other examination. The Parent has not received a request for or an inquiry
regarding a Return from any jurisdiction where it does not currently file a
Return.
No adjustment relating to any Returns filed by the Parent has been proposed
formally or informally by any Tax authority to the Parent or any representative
thereof and, to the knowledge of the Parent, no basis exists for any such
adjustment that would be material to the Parent.
The Parent does not have any liability for unpaid Taxes which has not been
accrued for or reserved on the Parent Balance Sheet, whether asserted or
unasserted, contingent or otherwise, which is material to the Parent, and the
Parent has not incurred any liability for Taxes other than in the ordinary
course of business since the date of the Parent Balance Sheet. There is no lien
for Taxes on the assets of the Parent other than inchoate liens for Taxes not
yet due.
None of the Parent's assets are treated as "tax-exempt use property" within
the meaning of Section 168(h) of the Code.
There is no contract, agreement, plan or arrangement, including but not
limited to the provisions of this Agreement, covering any employee or former
employee of the Parent that, individually or collectively, could give rise to
the payment of any amount that would not be deductible pursuant to Sections 162,
280G or 404 of the Code.
The Parent has not filed any consent agreement under Section 341(f) of the
Code or agreed to have Section 341(f)(2) of the Code apply to any disposition of
a subsection (f) asset (as defined in Section 341(f)(4) of the Code) owned by
the Parent.
The Parent is not, and has not been at any time, a "United States real
property holding corporation" within the meaning of Section 897(c)(2) of the
Code.
No power of attorney that is currently in force has been granted with
respect to any matter relating to Taxes payable by the Parent.
The Parent has never been a member of a consolidated, combined or
affiliated group or is a party to or affected by any tax-sharing or allocation
agreement or arrangement.
The Parent Schedules list (A) any Tax exemption, Tax holiday or other
Tax-sparing arrangement that the Parent has in any jurisdiction, including the
nature, amount and lengths of such Tax exemption, Tax holiday or other
Tax-sparing arrangement and (B) any expatriate tax programs or policies
affecting the Parent. The Parent is in full compliance with all terms and
conditions of any Tax exemption, Tax holiday or other Tax-sparing arrangement or
order of any Governmental Entity and the consummation of the transactions
contemplated hereby will not have any adverse effect on the continued validity
and effectiveness of any such Tax exemption, Tax holiday or other Tax-sparing
arrangement or order (the "PARENT SCHEDULES").
The Parent is not a party to or otherwise subject to any arrangement
entered into in anticipation of the Closing, not in accordance with past
practice and not required by this Agreement, that could
15
reasonably be expected to have the effect of (i) the recognition of a deduction
or loss before the Closing Date and a corresponding recognition of taxable
income or gain by the Parent after the Closing Date or (ii) the recognition of
taxable income or gain by the Parent after the Closing Date without the receipt
of or entitlement to a corresponding amount of cash.
Except as set forth in this Agreement, no closing agreement, written
ruling, or determination letter with respect to Taxes, or any equivalent written
decision from a foreign jurisdiction, has been received from, and no closing or
other similar agreement has been executed with, any Tax or other governmental
authority that will be binding upon the Parent after the Closing.
The Parent has properly withheld on all amounts paid to Persons located
or incorporated outside of the United States and have paid the appropriate
amounts withheld to the proper governmental authorities.
The Parent has not been a party to a transaction intended to qualify
under Section 355 of the Code (whether as distributing or distributed Parent)
within the last five years.
2.1 2 INTELLECTUAL PROPERTY. To the knowledge of the Parent,
the Parent owns, or has the right to use, sell or license all intellectual
property necessary or required for the conduct of its respective businesses as
presently conducted (such intellectual property and the rights thereto are
collectively referred to herein as the "PARENT IP Rights").
16
The execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby will not constitute a breach of any
instrument or agreement governing any of the Parent's IP Rights to which the
Parent is a party or by which, to its knowledge, it is bound or affected, will
not cause the forfeiture or termination or give rise to a right of forfeiture or
termination of any the Parent IP Rights or materially impair the right of the
Parent or the Radix Marine to use, sell or license any the Parent IP Rights or
portion thereof.
To the knowledge of the Parent, the manufacture, marketing, license, sale or
intended use of any product or technology currently licensed or sold or under
development by the Parent does not violate any license or agreement between the
Parent and any third party nor infringe any intellectual property right of any
other party.
There is no pending or, to the knowledge of the Parent, threatened claim or
litigation contesting the validity, ownership or right to use, sell, license or
dispose of any the Parent IP Rights, nor has the Parent received any written
notice asserting that any of the Parent IP Rights or the proposed use, sale,
license or disposition thereof conflicts or will conflict with the rights of any
other party. The Parent Disclosure Letter lists each patent held by the Parent
and the expiration date of each such patent. The Parent has taken commercially
reasonable steps designed to safeguard and maintain the confidentiality of, and
its proprietary rights in, all the Parent IP Rights.
2.9 2.13 COMPLIANCE; PERMITS; RESTRICTIONS. The Parent is not in any
material respect, in conflict with, or in default or violation of (i) any law,
rule, regulation, order, judgment or decree applicable to the Parent or by which
the Parent or any of its respective properties is bound or affected, or (ii) any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Parent is a party or by
which the Parent or its properties is bound or affected. No investigation or
review by any Governmental Entity is pending or, to the Parent's knowledge,
threatened against the Parent, nor has any Governmental Entity indicated an
intention to conduct the same. There is no agreement, judgment, injunction,
order or decree binding upon the Parent which has or could reasonably be
expected to have the effect of prohibiting or materially impairing any business
practice of the Parent, any acquisition of material property by the Parent or
the conduct of business by the Parent as currently conducted.
The Parent holds all permits, licenses, variances, exemptions, orders and
approvals from governmental authorities that are material to the operation of
the business of the Parent (collectively, the "PARENT PERMITS"). The Parent is
in compliance in all material respects with the terms of the Parent Permits.
Except as disclosed in the Parent Disclosure Letter, the Parent has no knowledge
of any pending regulatory action of any sort against the Parent, or the Parent's
products by any regulatory agency or any other duly authorized governmental
authority which could have a Material Adverse Effect on the Parent or in any
material way limit or restrict the ability of the Parent to market its existing
products. Except as set forth in the Parent Disclosure Letter, the Parent, has
not knowingly committed or permitted to exist any violation of the rules and
regulations of any regulatory agency or any other duly authorized governmental
authority.
2.10 2.14 LITIGATION. Except as disclosed in the Parent Disclosure
Letter, there is no action, suit, proceeding, claim, arbitration or
investigation pending, or as to which the Parent has received any notice of
assertion nor, to the Parent's knowledge, is there a threatened action, suit,
proceeding, claim, arbitration or investigation against the Parent which
reasonably would be likely to be material to the Parent, or which in any manner
challenges or seeks to prevent, enjoin, alter or delay any of the transactions
contemplated by this Agreement.
2.11 2.15 EMPLOYEE BENEFIT PLANS AND EMPLOYMENT MATTERS.
2.12 (a) The Parent has no employee benefit plans, pension plans or
multi-employee Plans
17
(b) EMPLOYMENT MATTERS. To the Parent's knowledge, the Parent
(i) is in compliance in all material respects with all applicable foreign,
federal, state and local laws, rules and regulations respecting employment,
employment practices, terms and conditions of employment and wages and hours, in
each case, with respect to Parent Employees; (ii) has withheld all amounts
required by law or by agreement to be withheld from the wages, salaries and
other payments to Parent Employees; (iii) is not liable for any arrears of wages
or any taxes or any penalty for failure to comply with any of the foregoing; and
(iv) is not liable for any material payment to any trust or other fund or to any
governmental or administrative authority, with respect to unemployment
compensation benefits, social security or other benefits or obligations for
Parent Employees (other than routine payments to be made in the normal course of
business and consistent with past practice). There are no pending, threatened or
reasonably anticipated claims or actions against the Parent under any worker's
compensation policy or long-term disability policy. To the Parent's knowledge,
no employee of the Parent has violated any employment contract, nondisclosure
agreement or noncompetition agreement by which such employee is bound due to
such employee being employed by the Parent and disclosing to the Parent or using
trade secrets or proprietary information of any other person or entity.
2.13 2.16 ABSENCE OF LIENS AND ENCUMBRANCES. Except as set forth in
the Parent Disclosure Letter, the Parent has good and valid title to, or, in the
case of leased properties and assets, valid leasehold interests in, all of its
material tangible properties and assets, real, personal and mixed, used in its
business, free and clear of any liens or encumbrances except as reflected in the
Parent Financials and except for liens for taxes not yet due and payable and
such imperfections of title and encumbrances, if any, which would not be
material to the Parent.
2.14 2.17 ENVIRONMENTAL MATTERS. The Parent has complied and is
in compliance with all Environmental, Health and Safety Requirements.
Without limiting the generality of the foregoing, the Parent has obtained and
complied with, and is in compliance with, all permits, licenses and other
authorizations that are required pursuant to Environmental, Health and Safety
Requirements for the occupation of its facilities and the operation of its
business.
The Parent has not received any written or oral notice, report or other
information regarding any actual or alleged violation of Environmental, Health
and Safety Requirements, or any liabilities or potential liabilities (whether
accrued, absolute, contingent, unliquidated or otherwise), including any
investigatory, remedial or corrective obligations, relating to it or its
facilities arising under Environmental, Health, and Safety Requirements.
2.15 2.18 LABOR MATTERS. No work stoppage or labor strike against the
Parent is pending, threatened or reasonably anticipated. The Parent does not
have knowledge of any activities or proceedings of any labor union to organize
any Parent Employees. There are no actions, suits, claims, labor disputes or
grievances pending, or, to the knowledge of the Parent, threatened or reasonably
anticipated relating to any labor, safety or discrimination matters involving
any Parent Employee, including, without limitation, charges of unfair labor
practices or discrimination complaints, which, if adversely determined, would,
individually or in the aggregate, result in any material liability to the
Parent. The Parent has not engaged in any unfair labor practices within the
meaning of the National Labor Relations Act. The Parent is not presently, nor
has it been in the past, a party to, or bound by, any collective bargaining
agreement or union contract with respect to Parent Employees and no collective
bargaining agreement is being negotiated by the Parent. The Parent is and has
been in compliance in all material respects with all applicable laws regarding
employment practices, terms and conditions of employment, and wages and hours
(including, without limitation, any federal regulation or any similar state or
local law).
18
2.16 2.19 AGREEMENTS, CONTRACTS AND COMMITMENTS. Except as set forth in
the Parent Disclosure Letter, the Parent is not a party to nor is it bound by:
any employment or consulting agreement, contract or commitment with any officer
or director level employee or member of the Parent's Board of Directors, other
than those that are terminable by the Parent on no more than thirty (30) days
notice without liability or financial obligation; any agreement or plan,
including, without limitation, any stock option plan, stock appreciation right
plan or stock purchase plan, any of the benefits of which will be increased, or
the vesting of benefits of which will be accelerated, by the occurrence of any
of the transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement; any agreement of indemnification or guaranty not
entered into in the ordinary course of business other than indemnification
agreements between the Parent and any of its officers or directors; any
agreement, contract or commitment containing any covenant limiting the freedom
of the Parent to engage in any line of business or compete with any person or
granting any exclusive distribution rights; any agreement, contract or
commitment currently in force relating to the disposition or acquisition of
assets not in the ordinary course of business or any ownership interest in any
corporation, partnership, joint venture or other business enterprise; or any
material joint marketing or development agreement.
The Parent, or to the Parent's knowledge any other party to a Parent
Contract (as defined herein), has not breached, violated or defaulted under, or
received notice that it has breached, violated or defaulted under, any of the
material terms or conditions of any of the agreements, contracts or commitments
to which the Parent is a party or by which it is bound of the type described in
clauses (a) through (f) above (any such agreement, contract or commitment, a
"PARENT CONTRACT") in such a manner as would permit any other party to cancel or
terminate any such Parent Contract, or would permit any other party to seek
damages, which would be reasonably likely to be material to the Parent.
2.20 BOARD APPROVAL. The Board of Directors of the Parent has,
as of the date of this Agreement, determined that the Merger is fair to, and in
the best interests of the Parent.
[continued on next page]
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REPRESENTATIONS AND WARRANTIES OF INTEGRATED
SECTION 3.
Integrated represent and warrant to the Parent, subject to the exceptions
specifically disclosed in writing in the disclosure letter supplied by
Integrated to the Parent dated as of the date hereof and certified by a duly
authorized officer of Integrated (the "INTEGRATED DISCLOSURE LETTER"), as
follows:
2.17 3.1 ORGANIZATION OF THE INTEGRATED. Integrated is a corporations
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation; has the corporate power and authority to own,
lease and operate its assets and property and to carry on its business as now
being conducted and as proposed to be conducted; and is duly qualified or
licensed to do business and is in good standing in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature of its
activities makes such qualification or licensing necessary, except where the
failure to be so qualified would not have a Material Adverse Effect (as defined
herein) on Integrated.
Integrated has delivered or made available to the Parent a true and correct copy
of the Certificate of Incorporation and Bylaws of Integrated, each as amended to
date, and each such instrument is in full force and effect. Integrated is not in
violation of any of the provisions of its Articles of Incorporation or Bylaws or
equivalent governing instruments.
When used in connection with Integrated, the term "MATERIAL ADVERSE EFFECT"
means, for purposes of this Agreement, any change, event or effect that is
materially adverse to the business, assets (including intangible assets),
financial condition or results of operations of Integrated and its subsidiaries
taken as a whole except for those changes, events and effects that are directly
caused by (i) conditions affecting the United States economy as a whole, or (ii)
conditions affecting the internet industry as a whole, which conditions (in the
case of clause (i) or (ii)) do not affect the Parent in a disproportionate
manner), or (iii) conditions that in the good faith judgment of the Parent's
Board of Directors result principally from the execution or delivery of this
Agreement or the announcement of the pendency of the Merger.
3.2 INTEGRATED CAPITAL STRUCTURE. The authorized capital
stock of Integrated consists of shares of Common Stock, no par value, of which
as of the Effective Time there are four hundred thousand (400,000) shares issued
and outstanding and zero (0) shares of Preferred Stock of which no shares are
issued or outstanding as of the date of this Agreement. All outstanding shares
of Integrated Common Stock are duly authorized, validly issued, fully paid and
nonassessable and are subject to preemptive rights pursuant to the Articles of
Incorporation of Integrated.
2.18 3.3 OBLIGATIONS WITH RESPECT TO CAPITAL STOCK. Except as set
forth in the Integrated Disclosure Letter, there are no equity securities,
partnership interests or similar ownership interests of any class of Integrated,
or any securities exchangeable or convertible into or exercisable for such
equity securities, partnership interests or similar ownership interests, issued,
reserved for issuance or outstanding. Except for securities Integrated owns,
directly or indirectly through one or more subsidiaries, there are no equity
securities, partnership interests or similar ownership interests of any class of
any of Integrated, or any security exchangeable or convertible into or
exercisable for such equity securities, partnership interests or similar
ownership interests, issued, reserved for issuance or outstanding. Except as set
forth in Section 3, there are no options, warrants, equity securities,
partnership interests or similar ownership interests, calls, rights (including
preemptive rights), commitments or agreements of any character to which
Integrated is a party or by which it is bound obligating Integrated to issue,
deliver or sell, or cause to be issued, delivered or sold, or repurchase, redeem
or otherwise acquire, or cause the repurchase, redemption or acquisition, of any
shares of capital stock, partnership interests or similar ownership interests of
Integrated or obligating Integrated to grant, extend, accelerate the vesting of
or enter into any such option, warrant, equity security, call, right, commitment
or
20
agreement. There are no registration rights and, to the knowledge of Integrated,
as of the date of this Agreement, there are no voting trusts, proxies or other
agreements or understandings with respect to any equity security of any class of
Integrated or with respect to any equity security, partnership interest or
similar ownership interest of any class of any of its subsidiaries
2.19 3.4 AUTHORITY.
2.20 (a) Integrated has all requisite corporate power and authority
to enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Integrated, subject only to the filing of
the Articles of Merger pursuant to Washington Law. This Agreement has been duly
executed and delivered by Integrated and, assuming the due authorization,
execution and delivery by the Parent, constitutes the valid and binding
obligation of Integrated, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy and other similar laws and general
principles of equity. The execution and delivery of this Agreement by Integrated
does not, and the performance of this Agreement by each of the Parent and
Integrated will not (i) conflict with or violate the Articles of Incorporation
or Bylaws of Integrated, or (ii) assuming the receipt of all material consents,
waivers and approvals referred to in the last sentence of this Section 3.4(a),
result in any breach of or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or impair the Integrated
rights or alter the rights or obligations of any third party under, or give to
others any rights of termination, amendment, acceleration or cancellation of, or
result in the creation of a lien or encumbrance on any of the properties or
assets of the Integrated pursuant to, any material note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Parent Integrated is a party or by which
the Parent or its or any of its respective properties are bound or affected. The
Integrated Schedules list all material consents, waivers and approvals under any
of the Integrated's agreements, contracts, licenses or leases required to be
obtained in connection with the consummation of the transactions contemplated
hereby.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with any Governmental Entity is required by
or with respect to Integrated in connection with the execution and delivery of
this Agreement or the consummation of the Merger, except for (i) the filing of
the Articles of Merger with the Secretary of State of the State of Nevada and
the Secretary of State of the State of Washington, (ii) such consents,
approvals, orders, authorizations, registrations, declarations and filings (if
any) as may be required under applicable federal and state securities laws and
the securities or antitrust laws of any foreign country, and (iii) such other
consents, authorizations, filings, approvals and registrations (if any) which if
not obtained or made would not be material to the Parent or Integrated or have a
material adverse effect on the ability of the parties to consummate the Merger.
2.21 3.5 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of
Integrated Balance Sheet there has not been: (i) any Material Adverse Effect on
Integrated, (ii) any declaration, setting aside or payment of any dividend on,
or other distribution (whether in cash, stock or property) in respect of, any of
Integrated's capital stock, or any purchase, redemption or other acquisition by
Integrated of any of Integrated's capital stock or any other securities of
Integrated or its subsidiaries or any options, warrants, calls or rights to
acquire any such shares or other securities except for repurchases from
employees following their termination pursuant to the terms of their
pre-existing stock option or purchase agreements, (iii) any split, combination
or reclassification of any of Integrated's capital stock, (iv) any granting by
Integrated of any increase in compensation or fringe benefits, except for normal
increases of cash compensation in the ordinary course of business consistent
with past practice, or any payment by Integrated of any bonus, except for
bonuses made in the ordinary course of business consistent with past practice,
or any granting by Integrated of any increase in severance or termination pay or
any entry by Integrated into any currently effective employment, severance,
termination or
21
indemnification agreement or any agreement the benefits of which are contingent
or the terms of which are materially altered upon the occurrence of a
transaction involving Integrated of the nature contemplated hereby, (v) entry by
Integrated into any licensing or other agreement with regard to the acquisition
or disposition of any material Integrated IP Rights (as defined in this
Agreement) other than licenses in the ordinary course of business consistent
with past practice, (vi) any material change by Integrated in its accounting
methods, principles or practices, except as required by concurrent changes in
GAAP, or (vii) any revaluation by Integrated of any of its assets, including,
without limitation, writing down the value of capitalized inventory or writing
off notes or accounts receivable other than in the ordinary course of business.
2.22 3.6 TAX.
TAX RETURNS AND AUDITS.
Integrated has timely filed all Returns relating to Taxes required to
be filed by Integrated, except such Returns that are not material to Integrated,
and have paid all Taxes shown to be due on such Returns.
Integrated as of the Effective Time will have withheld and paid over, as
appropriate, with respect to its employees all federal and state, local and/or
foreign income taxes, FICA, FUTA and other Taxes required to be withheld.
Integrated has not been delinquent in the payment of any Tax nor is there
any Tax deficiency outstanding, proposed or assessed against Integrated, nor has
Integrated executed any waiver of any statute of limitations on or extending the
period for the assessment or collection of any Tax.
No audit or other examination of any Return of Integrated is presently in
progress, nor has Integrated been notified of any request for such an audit or
other examination.
No adjustment relating to any Returns filed by Integrated has been proposed
formally or informally by any Tax authority to Integrated or any representative
thereof and, to the knowledge of Integrated, no basis exists for any such
adjustment which would be material to Integrated.
Integrated has no liability for unpaid Taxes which has not been accrued for
or reserved on Integrated Balance Sheet, whether asserted or unasserted,
contingent or otherwise, which is material to Integrated, and the Parent has not
incurred any liability for Taxes other than in the ordinary course of business
since the date of the Parent Balance Sheet.
None of Integrated's assets are treated as "tax-exempt use property" within
the meaning of Section 168(h) of the Code.
There is no contract, agreement, plan or arrangement, including but not
limited to the provisions of this Agreement, covering any employee or former
employee of Integrated that, individually or collectively, could give rise to
the payment of any amount that would not be deductible pursuant to Sections 280G
or 404 of the Code.
Integrated has not filed any consent agreement under Section 341(f) of the
Code or agreed to have Section 341(f)(2) of the Code apply to any disposition of
a subsection (f) asset (as defined in Section 341(f)(4) of the Code) owned by
Integrated.
Integrated is not, and has not been at any time, a "United States real
property holding corporation" within the meaning of Section 897(c)(2) of the
Code.
22
Integrated has granted no power of attorney that is currently in force with
respect to any matter relating to Taxes payable.
Integrated is not, nor has it been, a member of a consolidated, combined or
affiliated group or is a party to or affected by any tax-sharing or allocation
agreement or arrangement.
Integrated Schedules list (y) any Tax exemption, Tax holiday or other
Tax-sparing arrangement that Integrated has in any jurisdiction, including the
nature, amount and lengths of such Tax exemption, Tax holiday or other
Tax-sparing arrangement and (z) any expatriate tax programs or policies
affecting Integrated. Each of Integrated and its subsidiaries is in full
compliance with all terms and conditions of any Tax exemption, Tax holiday or
other Tax-sparing arrangement or order of any Governmental Entity and the
consummation of the transactions contemplated hereby will not have any adverse
effect on the continued validity and effectiveness of any such Tax exemption,
Tax holiday or other Tax-sparing arrangement or order.
2.23 3.7 INTELLECTUAL PROPERTY. Except as set forth in this
Agreement, Integrated does not own or have the right to use, pursuant to a
license, sublicense, agreement or permission, any intellectual property.
2.24 3.8 COMPLIANCE; PERMITS; RESTRICTIONS. Integrated is not, in
any material respect, in conflict with, or in default or violation of (i) any
law, rule, regulation, order, judgment or decree applicable to Integrated or by
which Integrated or any of its is bound or affected, or (ii) any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which Integrated is a party or by which
Integrated or its properties is bound or affected. No investigation or review by
any Governmental Entity is pending or, to Integrated's knowledge, threatened
against Integrated, nor has any Governmental Entity indicated an intention to
conduct the same. There is no agreement, judgment, injunction, order or decree
binding upon Integrated which has or could reasonably be expected to have the
effect of prohibiting or materially impairing any business practice of
Integrated, any acquisition of material property by Integrated or the conduct of
business by Integrated as currently conducted.
Integrated and its subsidiaries hold all permits, licenses, variances,
exemptions, orders and approvals from governmental authorities that are material
to the operation of the business of Integrated (collectively, the "INTEGRATED
PERMITS"). Integrated and its subsidiaries are in compliance in all material
respects with the terms of Integrated Permits.
3.9 RELATED MATTERS. Except as disclosed in Integrated
Disclosure Letter, Integrated has no knowledge of any pending regulatory action
of any sort against Integrated by any regulatory agency or any other duly
authorized governmental authority in any jurisdiction which could have a
Material Adverse Effect on Integrated. Except as disclosed in Integrated
Disclosure Letter, Integrated has not knowingly committed or permitted to exist
any violation of the rules and regulations of any regulatory agency or any other
duly authorized governmental authority.
2.25 3.10 LITIGATION. Except as disclosed in Integrated Disclosure
Letter, there is no action, suit, proceeding, claim, arbitration or
investigation pending, or as to which Integrated has received any notice of
assertion nor, to Integrated's knowledge, is there a threatened action, suit,
proceeding, claim, arbitration or investigation against Integrated which
reasonably would be likely to be material to Integrated, or which in any manner
challenges or seeks to prevent, enjoin, alter or delay any of the transactions
contemplated by this Agreement.
23
2.26 3.11 Employee Benefit Plans and Employment Matters.
Integrated has no employee benefit plans, pension plans or multi-employee
Plans.
3.12 EMPLOYMENT MATTERS. To Integrated's knowledge, Integrated (i) is
in compliance in all material respects with all applicable foreign, federal,
state and local laws, rules and regulations respecting employment, employment
practices, terms and conditions of employment and wages and hours, in each case,
with respect to Integrated Employees; (ii) has withheld all amounts required by
law or by agreement to be withheld from the wages, salaries and other payments
to Integrated Employees; (iii) is not liable for any arrears of wages or any
taxes or any penalty for failure to comply with any of the foregoing; and (iv)
is not liable for any material payment to any trust or other fund or to any
governmental or administrative authority, with respect to unemployment
compensation benefits, social security or other benefits or obligations for
Employees (other than routine payments to be made in the normal course of
business and consistent with past practice). There are no pending, threatened or
reasonably anticipated claims or actions against Integrated under any worker's
compensation policy or long-term disability policy. To Integrated's knowledge,
no Integrated Employee has violated any employment contract, nondisclosure
agreement or non-competition agreement by which such employee is bound due to
such employee being employed by Integrated and disclosing to Integrated or using
trade secrets or proprietary information of any other person or entity.
2.27 3.13 ABSENCE OF LIENS AND ENCUMBRANCES. Integrated has good and
valid title to, or, in the case of leased properties and assets, valid leasehold
interests in, all of its material tangible properties and assets, real, personal
and mixed, used in its business, free and clear of any liens or encumbrances
except as reflected in Integrated Financials, as documented in the Parent's
Form-10QSB for the quarter ending December 31, 2002, that was filed on March 10,
2003, and except for liens for taxes not yet due and payable and such
imperfections of title and encumbrances, if any, which would not be material to
Integrated.
2.28 3.14 ENVIRONMENTAL MATTERS. Integrated has complied and is in
compliance with all Environmental, Health and Safety Requirements.
Without limiting the generality of the foregoing, Integrated has obtained and
complied with, and are in compliance with, all permits, licenses and other
authorizations that are required pursuant to Environmental, Health and Safety
Requirements for the occupation of its facilities and the operation of its
business.
Integrated has not received any written or oral notice, report or other
information regarding any actual or alleged violation of Environmental, Health
and Safety Requirements, or any liabilities or potential liabilities (whether
accrued, absolute, contingent, unliquidated or otherwise), including any
investigatory, remedial or corrective obligations, relating to it or its
facilities arising under Environmental, Health, and Safety Requirements.
2.29 3.15 LABOR MATTERS. Integrated has zero (0) full-time employees.
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2.30 3.16 AGREEMENTS, CONTRACTS AND COMMITMENTS. Except as set forth
in Integrated Disclosure Letter, Integrated is neither a party to nor is bound
by:
any employment or consulting agreement, contract or commitment with any officer
or director level employee or member of Integrated's Board of Directors, other
than those that are terminable by Integrated on no more than thirty days notice
without liability or financial obligation; any agreement or plan, including,
without limitation, any stock option plan, stock appreciation right plan or
stock purchase plan, any of the benefits of which will be increased, or the
vesting of benefits of which will be accelerated, by the occurrence of any of
the transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement; any agreement of indemnification or guaranty not
entered into in the ordinary course of business other than indemnification
agreements between the Parent and any of its officers or directors; any
agreement, contract or commitment containing any covenant limiting the freedom
of the Parent to engage in any line of business or compete with any person or
granting any exclusive distribution rights; any agreement, contract or
commitment currently in force relating to the disposition or acquisition of
assets not in the ordinary course of business or any ownership interest in any
corporation, partnership, joint venture or other business enterprise; or any
material joint marketing or development agreement. Integrated, nor to
Integrated's knowledge any other party to a Integrated Contract (as defined
below), has breached, violated or defaulted under, or received notice that it
has breached violated or defaulted under, any of the material terms or
conditions of any of the agreements, contracts or commitments to which the
Parent is a party or by which it is bound of the type described in clauses (a)
through (f) above (any such agreement, contract or commitment, a "INTEGRATED
CONTRACT") in such a manner as would permit any other party to cancel or
terminate any such Integrated Contract, or would permit any other party to seek
damages, which would be reasonably likely to be material to Integrated.. 2.31
3.17 Change of Control Payments. There is no plan or agreement pursuant to which
any amounts may become payable (whether currently or in the future) to current
or former officers or directors of Integrated as a result of or in connection
with the Merger.
2.32 3.18 Board Approval. The Board of Directors of Integrated has, as
of the date of this Agreement, determined (i) that the Merger is fair to, and in
the best interests of Integrated and its shareholders, and (ii) to recommend
that the shareholders of Integrated approve the issuance of shares of Integrated
Common Stock by virtue of the Merger.
2.33 3.19 NO LISTING ON ANY STOCK EXCHANGES. Integrated's Common Stock is
not listed on any stock exchanges (i.e., the Over the Counter Bulletin Board).
25
ARTICLE IV
ADDITIONAL AGREEMENTS
SECTION 4.
4.1 4.1 PUBLIC DISCLOSURE. The Parent and the Integrated will consult
with each other before issuing any press release or otherwise making any public
statement with respect to the Merger or this Agreement and will not issue any
such press release or make any such public statement prior to such consultation,
except as may be required by law or any listing agreement with a national
securities exchange or the Over the Counter Bulletin Board.
4.2 4.2 LEGAL REQUIREMENTS. The Parent, Integrated and the Merger Sub
will use each of its respective reasonable commercial efforts to take all
actions necessary or desirable to comply promptly with all legal requirements
which may be imposed on them with respect to the consummation of the
transactions contemplated by this Agreement (including furnishing all
information required in connection with approvals by or filings with any
Governmental Entity, and prompt resolution of any litigation prompted hereby)
and will promptly cooperate with and furnish information to any party hereto
necessary in connection with any such filings with or investigations by any
Governmental Entity, and any other such requirements imposed upon any of them or
their respective subsidiaries in connection with the consummation of the
transactions contemplated by this Agreement. The Parent will use its
commercially reasonable efforts to take such steps as may be necessary to comply
with the securities and blue sky laws of all jurisdictions which are applicable
to the issuance of Parent Common Stock pursuant hereto. Integrated will use its
commercially reasonable efforts to assist the Parent as may be necessary to
comply with the securities and blue sky laws of all jurisdictions which are
applicable in connection with the issuance of Parent Common Stock pursuant
hereto.
4.3 4.3 THIRD PARTY CONSENTS. As soon as practicable following the
date hereof and if required, the Parent and the Integrated will each use its
commercially reasonable efforts to obtain all material consents, waivers and
approvals under any of its or its subsidiaries' agreements, contracts, licenses
or leases required to be obtained in connection with the consummation of the
transactions contemplated hereby.
4.4 4.4 NOTIFICATION OF CERTAIN MATTERS. The Parent and Integrated
will give prompt notice to Integrated, and Integrated will give prompt notice to
the Parent, of the occurrence, or failure to occur, of any event, which
occurrence or failure to occur would be reasonably likely to cause (a) any
representation or warranty contained in this Agreement and made by it to be
untrue or inaccurate in any material respect at any time from the date of this
Agreement to the Effective Time such that the conditions set forth in this
Agreement, as the case may be, would not be satisfied as a result thereof or (b)
any material failure of the Parent or Integrated, as the case may be, or of any
officer, director, employee or agent thereof, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it under
this Agreement. Notwithstanding the above, the delivery of any notice pursuant
to this section will not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
4.5 4.5 REASONABLY COMMERCIAL EFFORTS AND FURTHER ASSURANCES.
Subject to the respective rights and obligations of the Parent and Integrated
under this Agreement, each of the parties to this Agreement will use its
reasonably commercial efforts to effectuate the Merger and the other
transactions contemplated hereby and to fulfill and cause to be fulfilled the
conditions to closing under this Agreement; provided that neither the Parent nor
Integrated nor any subsidiary or affiliate thereof will be required to agree to
any divestiture by itself or any of its affiliates of shares of capital stock or
of any business, assets or property, or the imposition of any material
limitation on the ability of any of them to conduct their businesses or to own
or exercise control of such assets, properties and stock. Subject to the
foregoing, each party hereto, at the reasonable request of another party hereto,
will execute and
26
deliver such other instruments and do and perform such other acts and things as
may be necessary or desirable for effecting completely the consummation of the
transactions contemplated hereby.
4.6 4.6 STOCK OPTIONS AND EMPLOYEE BENEFITS. At the Effective
Time, Integrated's Stock Option Plans and each outstanding Integrated Stock
Option under Integrated's Stock Option Plan, whether or not exercisable, will be
assumed by the Parent. Each Integrated Stock Option so assumed by the Parent
under this Agreement will continue to have, and be subject to, the same terms
and conditions set forth in the applicable Integrated Stock Option Plan
immediately prior to the Effective Time (including, without limitation, any
repurchase rights), except that (i) each Integrated Stock Option will be
exercisable (or will become exercisable in accordance with its terms) for that
number of whole shares of Parent Common Stock equal to the product of the number
of shares of Integrated Common Stock that were issuable upon exercise of such
Integrated Stock Option immediately prior to the Effective Time multiplied by
the Exchange Ratio, rounded down to the nearest whole number of shares of Parent
Common Stock, and (ii) the per share exercise price for the shares of Parent
Common Stock issuable upon exercise of such assumed Integrated Stock Option will
be equal to the quotient determined by dividing the exercise price per share of
Integrated Common Stock at which the Integrated Stock Option was exercisable
immediately prior to the Effective Time by the Exchange Ratio, rounded up to the
nearest whole cent. After the Effective Time, the Parent will issue to each
holder of an outstanding Integrated Stock Option a notice describing the
foregoing assumption of such Integrated Stock Option by the Parent.
The Parent has reserved sufficient shares of Parent Common Stock for issuance
under this Agreement.
4.7 DOING BUSINESS AS "RADIX MARINE, INC., AND TRADING SYMBOL. After
the Merger has been consummated, the Parent shall do business as "Radix Marine,
Inc." and will acquire a new trading symbol to be used for Radix Marine, Inc.,
on the Over-the-Counter Bulletin Board ("OTCBB") effective as soon as possible.
4.8 CONSOLIDATION OF PARENT'S AND INTEGRATED'S OPERATIONS TO
INTEGRATED'S PRESENT LOCATION. The Parties agree that Parent shall close its
offices and operations located at 0000 000xx XX, Xxxxxxxx, Xxxxxxxxxx 00000, and
move them to Integrated's existing offices located at 0000 Xxxxxxx Xxxxxxxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxxx 00000 as soon as possible.
4.9 INDEMNIFICATION. The Bylaws of Radix Marine will honor, and the
Parent will cause Radix Marine to honor, the provisions with respect to
indemnification set forth in the Bylaws of Integrated immediately prior to the
Effective Time, which provisions will not be amended, repealed or otherwise
modified for a period after the Effective Time in any manner that would
adversely affect the rights thereunder of individuals who at the Effective Time
were directors, officers, employees or agents of Integrated, unless such
modification is required by law.
4.10 BOARD OF DIRECTORS AND CERTAIN OFFICERS OF THE PARENT.
(a) The Board of Directors of the Parent will take all actions necessary to
cause the Board of Directors of the Parent, immediately after the Effective
Time, to consist of up to seven (7) persons, and all of whom will be Parent
designees prior to the Effective Time (the "PARENT DESIGNEES"). If, prior to the
Effective Time, any of the Parent Designees or Integrated's designees shall
decline or be unable to serve as a director of the Parent or Radix Marine, the
Parent (if such person was designated by the Parent) or the Parent (if such
person was designated by Parent) shall designate another person to serve in such
person's stead, which person shall be reasonably acceptable to the other party.
27
ARTICLE V
CONDITIONS TO THE MERGER
Section 5.
5.1 5.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT THE MERGER.
The respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Effective Time of the
following conditions:
5.2 NO ORDER. No Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive order,
decree, injunction or other order (whether temporary, preliminary or permanent)
which is in effect and which has the effect of making the Merger illegal or
otherwise prohibiting consummation of the Merger.
5.2 5.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE PARENT. The
obligation of the Parent to consummate and effect the Merger shall be subject to
the satisfaction by Integrated at or prior to the Effective Time of each of the
following conditions, any of which may be waived, in writing, exclusively by the
Parent:
5.4 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Integrated contained in this Agreement shall have been true and
correct in all material respects as of the date of this Agreement. In addition,
the representations and warranties of Integrated contained in this Agreement
shall be true and correct in all material respects on and as of the Effective
Time except for changes contemplated by this Agreement and except for those
representations and warranties which address matters only as of a particular
date (which shall remain true and correct as of such particular date), with the
same force and effect as if made on and as of the Effective Time, except in such
cases (other than the representations in Sections 3) where the failure to be so
true and correct would not have a Material Adverse Effect on Integrated.
5.5 AGREEMENTS AND COVENANTS. Integrated shall have performed
or complied in all material respects with all agreements and covenants required
by this Agreement to be performed or complied with by them on or prior to the
Effective Time.
5.6 MATERIAL ADVERSE EFFECT. No Material Adverse Effect
with respect to Integrated shall have occurred since the date of this Agreement.
5.7 5.3 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF INTEGRATED.
The obligations of Integrated to consummate and effect the Merger shall be
subject to the satisfaction by the Parent at or prior to the Effective Time of
each of the following conditions, any of which may be waived, in writing,
exclusively by the Parent:
5.8 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Parent contained in this Agreement shall have been true and
correct in all material respects as of the date of this Agreement. In addition,
the representations and warranties of the Parent contained in this Agreement
shall be true and correct in all material respects on and as of the Effective
Time except for changes contemplated by this Agreement and except for those
representations and warranties which address matters only as of a particular
date (which shall remain true and correct as of such particular date), with the
same force and effect as if made on and as of the Effective Time, except in such
cases (other than the representations in this Agreement) where the failure to be
so true and correct would not have a Material Adverse Effect on the Parent.
5.9 AGREEMENTS AND COVENANTS. The Parent shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the
Effective Time. 5.10 Material Adverse Effect. No Material Adverse Effect with
respect to the Parent shall have occurred since the date of this Agreement.
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ARTICLE VI
TERMINATION, AMENDMENT AND WAIVER
Section 6.
6.1 6.1 TERMINATION. This Agreement may be terminated at ny time
prior to the Effective Time of the Merger, whether before or after approval of
the Merger by the board of directors of the Parent or the approval of the
issuance of Parent Common Stock in connection with the Merger, by the board of
directors of Integrated, or as follows:
(i) by mutual written consent duly authorized by the Boards of Directors of the
Parent and Integrated;
(ii) by either the Parent or Integrated if the Merger shall not have been
consummated by April 21, 2003, provided, however, that the right to terminate
this Agreement under this Section 6.1 shall not be available to any party whose
action or failure to act has been a principal cause of or resulted in the
failure of the Merger to occur on or before such date and such action or failure
to act constitutes a breach of this Agreement;
(iii) by either the Parent or Integrated if a Governmental Entity shall have
issued an order, decree or ruling or taken any other action (an "ORDER"), in any
case having the effect of permanently restraining, enjoining or otherwise
prohibiting the Merger, which order, decree or ruling is final and
nonappealable;
(iv) by the Parent, upon a breach of any representation, warranty, covenant or
agreement on the part of Integrated set forth in this Agreement, or if any
representation or warranty of Integrated shall have become untrue, in either
case such that the conditions set forth in Section 5.3, Section 5.4, or Section
5.5 would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided that if such
inaccuracy in Integrated's warranties or breach by Integrated is curable prior
to April 21, 2003 by Integrated through the exercise of its commercially
reasonable efforts, then the Parent may not terminate this Agreement under this
Section provided the Integrated continues to exercise such commercially
reasonable efforts to cure such breach; or
(v) by Integrated, upon a breach of any representation, warranty, covenant or
agreement on the part of the Parent set forth in this Agreement, or if any
representation or warranty of the Parent shall have become untrue, in either
case such that the conditions set forth in Section 5.7, Section 5.8, or Section
5.9 would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided that if such
inaccuracy in the Parent's representations and warranties or breach by the
Parent is curable prior to April 21, 2003 by the Parent through the exercise of
its commercially reasonable efforts, then the Integrated may not terminate this
Agreement under this Section 6.1 provided the continues to exercise such
commercially reasonable efforts to cure such breach.
(a) by Integrated if at any time prior to the Effective Time (including
any extension of the Effective Time) the Parent's Over the Counter
Bulletin Board listing of its Common Stock is terminated.
6.2 6.2 NOTICE OF TERMINATION; EFFECT OF TERMINATION. Any
termination of this Agreement under Section 6.1 above will be effective
immediately upon the delivery of written notice of the terminating party to the
other parties hereto. In the event of the termination of this Agreement as
provided in Section 6.1, this Agreement shall be of no further force or effect,
except (i) as set forth in this Section 6.2, Section 6.3 and Section 7 ("General
Provisions"), each of which shall survive the termination of this Agreement, and
(ii) nothing herein shall relieve any party from liability for any breach of
this Agreement. No termination of this Agreement shall affect the obligations of
the parties contained in the Confidentiality Agreement, all of which obligations
shall survive termination of this Agreement in accordance with their terms.
29
6.3 6.3 FEES AND EXPENSES. All fees and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such expenses whether or not the Merger is
consummated; provided, however, that the Parent and Integrated shall share
equally all fees and expenses, other than attorneys' and accountants' fees and
expenses, incurred in relation to the printing and filing of any SEC filings
(including any registration statement) and any amendments or supplements thereto
(including financial statements and exhibits).
ARTICLE VII
GENERAL PROVISIONS
Section 7.
7.1 7.1 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
The representations and warranties of the Parent, the Parent and Integrated
contained in this Agreement shall terminate at the Effective Time, and only the
covenants that by their terms survive the Effective Time shall survive the
Effective Time.
7.2 7.2 NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or by commercial
delivery service, or sent via telecopy (receipt confirmed) to the parties at the
following addresses or telecopy numbers (or at such other address or telecopy
numbers for a party as shall be specified by like notice):
If to the Parent:
Modern MFG Services, Inc.
0000 000xx XX
Xxxxxxxx, XX 00000
If to the Merger Sub:
Modern Acquisition, Inc.
0000 Xxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxxx, XX 00000
If to Integrated:
Integrated Maritime Platforms International, Inc.
0000 Xxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxxx, XX 00000
with a copy to:
The Xxxx Law Group, PLLC
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
7.3 7.3 INTERPRETATION. When a reference is made in this Agreement
to Exhibits, such reference shall be to an Exhibit to this Agreement unless
otherwise indicated. The words "INCLUDE," "INCLUDES" and "INCLUDING" when used
herein shall be deemed in each case to be followed by the words "without
limitation." The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. When reference is made herein to "THE BUSINESS
OF" an entity, such reference shall be deemed to include the business of all
direct and indirect subsidiaries of such entity. Reference to the subsidiaries
of an entity shall be "deemed to include" all direct and indirect subsidiaries
of such entity. References herein to "Sections" are references to Sections
hereof unless otherwise stated herein.
7.4 7.4 COUNTERPARTS. This Agreement may be executed in counterparts,
all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other party, it being understood that all parties need not
sign the same counterpart.
7.5 7.5 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This Agreement
and the documents and instruments and other agreements among the parties hereto
as contemplated by or referred to herein, including the Parent Disclosure Letter
and the Integrated Disclosure Letter (a) constitute the entire agreement among
the parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof, it being understood that the
Confidentiality Agreement shall continue in full force and effect until the
Closing and shall survive any termination of this Agreement; and (b) are not
intended to confer upon any other person any rights or remedies hereunder.
7.6 7.6 SEVERABILITY. In the event that any provision of this
Agreement or the application thereof, becomes or is declared by a court of
competent jurisdiction to be illegal, void or unenforceable, the remainder of
this Agreement will continue in full force and effect and the application of
such provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further agree
to replace such void or unenforceable provision of this Agreement with a valid
and enforceable provision that will achieve, to the extent possible, the
economic, business and other purposes of such void or unenforceable provision.
7.7 7.7 OTHER REMEDIES; SPECIFIC PERFORMANCE. Except as otherwise
provided herein, any and all remedies herein expressly conferred upon a party
will be deemed cumulative with and not exclusive of any other remedy conferred
hereby, or by law or equity upon such party, and the exercise by a party of any
one remedy will not preclude the exercise of any other remedy. The parties
hereto agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
7.8 7.8 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada, regardless of the
laws that might otherwise govern under applicable principles of conflicts of law
thereof; provided that issues involving the corporate governance of any of the
parties hereto shall be governed by their respective jurisdictions of
incorporation. Each of the parties hereto irrevocably consents to the exclusive
jurisdiction of the State of Nevada and the federal district courts sitting in
the State of Nevada, in connection with any matter based upon or arising out of
this Agreement or the matters contemplated herein, agrees that process may be
served upon them in any manner authorized by the laws of the State of Nevada for
such persons and waives and covenants not to assert or plead any objection which
they might otherwise have to such jurisdiction and such process.
7.9 7.9 RULES OF CONSTRUCTION. The Parties hereto agree that they
have been represented by counsel during the negotiation and execution of this
Agreement and, therefore, waive the application of any law, regulation, holding
or rule of construction because the Parties have each participated in drafting
this agreement and all supporting documents.
7.10 7.10 ASSIGNMENT. No party may assign either this Agreement or any
of its rights, interests, or obligations hereunder without the prior written
approval of the parties. Subject to the
31
preceding sentence, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
7.11 7.11 DEFINITION OF "KNOWLEDGE". Wherever used in this Agreement, the
term "KNOWLEDGE" shall mean the actual knowledge of: (a) in the case of the
Parent and Merger Sub, respectively, its (i) Chief Executive Officer or highest
ranking officers; and (b) in the case of the Integrated, its President.
[SIGNATURE PAGE TO FOLLOW]
32
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized respective officers as of the Effective Date
written above.
MODERN MFG SERVICES, INC.
By:
---------------------------------
Name: ---------------------------------
Title:---------------------------------
INTEGRATED MARITIME PLATFORMS
INTERNATIONAL, INC.
By:
---------------------------------
Name: ---------------------------------
Title:---------------------------------
MODERN ACQUISITION, INC.
By:
---------------------------------
Name: ---------------------------------
Title:---------------------------------
--------
1 "Voting shares" means shares that entitle their holders to vote
unconditionally in elections of directors. 2 "Participating shares" means
shares that entitle their holders to participate without limitation in
distributions.
33
