EXHIBIT A
PLAN OF SHARE EXCHANGE
WATERFORD INTERNATIONAL, INC.
AND
ATI, INC. DBA AMERICAN TECHNOLOGIES, INC.
THIS PLAN AND AGREEMENT OF SHARE EXCHANGE (hereinafter called "this
Agreement"), dated as of April 21, 1998, is by and between WATERFORD
INTERNATIONAL, INC., a Colorado corporation (hereinafter called "Waterford"),
and ATI, INC., DBA AMERICAN TECHNOLOGIES, INC., a Wisconsin corporation
(hereinafter called "ATI"), said corporations being hereafter sometimes
collectively referred to as the "Constituent Corporations").
WITNESSETH:
WHEREAS, Waterford is a corporation duly organized and existing under the
laws of the State of Colorado, having been incorporated in 1989, and ATI is a
corporation duly organized and existing under the laws of the State of
Wisconsin, having been incorporated in February, 1990; and
WHEREAS, the authorized capital stock of Waterford consists of TWENTY
MILLION (20,000,000) shares of no par value Common Stock, of which TWO MILLION
TWO HUNDRED SEVENTEEN THOUSAND FIVE HUNDRED (2,217,500) shares are
outstanding, and TWO MILLION (2,000,000) shares of $1.00 par value preferred
stock, of which no shares are outstanding; and
WHEREAS, the authorized capital stock of ATI consists of SEVEN MILLION
(7,000,000) shares of Common Stock, no par value, of which TWO MILLION SEVEN
FIFTY THREE THOUSAND EIGHT HUNDRED FORTY (2,753,840) shares are outstanding;
and
WHEREAS, the Boards of Directors of the Constituent Corporations deem it
advisable for the general welfare and advantage of the Constituent
Corporations and their respective shareholders that the Constituent
Corporations respectively desire to so exchange shares pursuant to this
Agreement and pursuant to the applicable provisions of the laws of the State
of Colorado;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereby agree, in accordance with the
applicable provisions of the laws of the State of Colorado, that the
Constituent Corporations shall exchange shares, to wit: ATI, a Wisconsin
corporation, one of the Constituent Corporations, which is not a new
corporation, and which shall continue its existence and be the wholly-owned
subsidiary corporation surviving the Share Exchange (said corporation
hereafter being sometimes called the "Subsidiary Corporation"), and the terms
and conditions of the Share Exchange hereby agreed upon (hereafter called the
"Share Exchange") which the parties covenant to observe, keep and perform and
the mode of carrying the same into effect are and shall be as hereafter set
forth:
ARTICLE I
CONDITIONS
The Share Exchange shall be subject to the following conditions:
(a) the approval of the boards of directors of both Constituent
Corporations;
ARTICLE II
EFFECTIVE TIME OF THE SHARE EXCHANGE
At the effective time of the Share Exchange, the separate existence of
Waterford shall cease and Waterford shall be Parent Corporation to the
Subsidiary Corporation. Consummation of this Agreement shall be effected on
the date on which a Certificate of Share Exchange in substantially the form
annexed hereto is filed in the office of the Secretary of State of the State
of Colorado, all after satisfaction of the respective requirements of the
applicable laws of said state prerequisite to such filings.
ARTICLE III
GOVERNING LAW; CERTIFICATE OF INCORPORATION
The laws which are to govern the Subsidiary Corporation are the laws of
the State of Colorado. The Certificate of Incorporation of Waterford, as
heretofore amended, shall, at the effective time of the Share Exchange, be
amended to the extent set forth in Paragraph Third of the Article of Share
Exchange, attached hereto, to amend the name of Waterford International, Inc.,
As the Parent Corporation, to e-Technologies, Inc. As so amended, such
Articles of Incorporation and Certificate of Incorporation shall remain in
effect thereafter until the same shall be further amended or altered in
accordance with the provisions thereof.
ARTICLE IV
BY-LAWS
The By-Laws of Waterford, at the effective time of the Share Exchange
shall be the By-Laws of the Subsidiary Corporation until the same shall be
altered or amended in accordance with the provisions thereof.
ARTICLE V
DIRECTORS AND OFFICERS
The Directors of both Constituent Corporations at the effective time of
the Share Exchange shall be the Directors of the Subsidiary Corporation until
their respective successors are duly elected and qualified. Subject to the
authority of the Board of Directors as provided by law and the By-Laws of the
Subsidiary Corporation, the officers of both Constituent Corporations at the
effective time of the Share Exchange shall be the officers of the Subsidiary
Corporation.
ARTICLE VI
CONVERSION OF SHARES IN THE SHARE EXCHANGE
The mode of carrying into effect the Share Exchange provided in this
Agreement, and the manner and basis of converting the shares of the
Constituent Corporations into shares of the Parent Corporation are as
follows:
1. Waterford Common Stock. No Shares of Common Stock, no par value, of
Waterford issued at the effective time of the Share Exchange shall be
converted as a result of the Share Exchange, and all of such shares shall
remain issued shares of Common Stock of the Parent Corporation.
2. ATI Common Stock. At the effective time of the Share Exchange, each
share of no par value Common Stock of ATI issued and outstanding shall be
converted into and become one (1) share Common Stock of the Parent
Corporation. As a result, each holder of outstanding Common Stock of ATI
shall surrender, on a share for share basis, one stock certificate of Common
Stock of ATI for one share of Waterford. Upon surrender to Waterford of one
or more stock certificates for Common Stock of Waterford, each ATI shareholder
shall be entitled to receive one or more stock certificates for the full
number of shares of Common Stock of Waterford into which the Common Stock of
ATI so surrendered shall have been converted as aforesaid together with any
dividends on the Common Stock of ATI as to which the payment date shall have
occurred on or prior to the date of the surrender of said shares and the
proceeds from any sale of a fractional interest in accordance with Paragraph
4 of this Article VI. Waterford's $1.00 par value Preferred Stock, of which
no shares are currently outstanding, shall not be canceled by the Share
Exchange.
3. Surrender of ATI's Certificates. As soon as practicable after the
Share Exchange becomes effective, the Stock Certificates representing Common
Stock of ATI issued and outstanding at the time the Share Exchange becomes
effective shall be surrendered for exchange to the Parent Corporation as above
provided. Until so surrendered for exchange, each such Stock Certificate
nominally representing Common Stock of Waterford shall be deemed for all
corporate purposes (except for the payment of dividends, which shall be
subject to the exchange of stock certificates as above provided) to evidence
the ownership of the number of shares of Common Stock of the Parent
Corporation which the holder thereof would be entitled to receive upon its
surrender to the Subsidiary Corporation.
4. Issuance of Additional Shares Subsequent to Share Exchange. As soon
as practicable after the Share Exchange becomes effective, the Parent Company
shall issue to the President of ATI, Xx. Xxxxx Xxxxxx, approximately NINE
HUNDRED FIFTY THREE THOUSAND EIGHT HUNDRED FORTY (953,840) additional shares
of Common Stock in the parent company to satisfy and cover his concurrent
short position in the Parent Company's Common Stock. Said short position will
result based upon the one for one share exchange arrangement (conversion) that
has been agreed upon by both boards of directors in order to avoid the
issuance of fractional shares to ATI shareholders who are converting their
shares.
5. Fractional Interests. No fractional shares of Common Stock of the
Parent Corporation or certificate or scrip representing the same shall be
issued. In lieu thereof each holder of ATI Common Stock having a fractional
interest arising upon such conversion will be afforded the opportunity through
the transfer agent for the Common Stock, on or before the 60th day following
the effective date of the Share Exchange, or on or before such later date (but
in any event not later than the 90th day following the effective date of the
Share Exchange) as the Subsidiary Corporation may determine, either to
consolidate his fractional interest into one full share of Common Stock of the
Parent Corporation by purchasing and paying for the additional fractional
interest required for such consolidation, or to sell his fractional interest
and obtain the proceeds thereof. Any fractional interest with respect to
which instructions shall not have been so received by the transfer agent
within the prescribed period shall be canceled. The proceeds of any sale of a
fractional interest shall be paid in cash by ATI to the shareholder entitled
to the fractional interest sold, except that ATI shall not pay such proceeds
to any holder of Waterford's Common Stock who shall not have surrendered his
certificates for exchange pursuant to Paragraph 3 of this Article VI.
6. Status of Common Stock. All shares of Common Stock of the Subsidiary
Corporation into which shares of Common Stock of Waterford are converted as
herein provided shall be fully paid and non-assessable and shall be issued in
full satisfaction of all rights pertaining to such shares of Common Stock of
ATI.
7. Independent Appraisal, Right to Dissent and Obtain Payment for
Shares; Procedures for Protection of Dissenter's Rights. In order to
establish a "fair value" for the shares of ATI Common Stock which are paid in
cash in lieu of conversion into a fractional interest upon conversion into ATI
Common Stock, as provided in Paragraph 4 above, the Board of Directors of ATI
shall establish the value of ATI's stock prior to the Share Exchange, and
shall afford to such shareholders of ATI all of the rights, and implement the
procedures for protection of dissenters' rights, pursuant to Section 0-000-000
and 0-000-000 of the Colorado Business Corporation Act, as amended, the terms
and provisions of which are hereby incorporated by reference and made a part
hereof.
ARTICLE VII
EFFECT OF THE SHARE EXCHANGE
At the effective time of the Share Exchange, the Subsidiary Corporation
shall succeed to, without other transfer, and shall possess and enjoy, all the
rights, privileges, immunities, powers and franchises both of a public and a
private nature, and be subject to all the restrictions, disabilities and
duties of each of the Constituent Corporations, and all the rights,
privileges, immunities, powers and franchises of each of the Constituent
Corporations on whatever account, for stock subscriptions as well as for all
other things in action or belonging to each of said Corporations, shall be
vested in the Subsidiary Corporation; and all property, rights, privileges,
immunities, powers and franchises, and all and every other interest shall be
thereafter as effectually the property of the Subsidiary Corporation as they
were of the Respective Constituent Corporations, and the title to any real
estate vested by deed or otherwise in either of said Constituent Corporations
shall not revert or be in any way impaired by reason of the Share Exchange;
provided, however, that all rights of creditors and all liens upon any
property of either of said Constituent Corporations shall be preserved
unimpaired, limited in lien to the property affected by such liens at the
effective time of the Share Exchange.
ARTICLE VIII
ACCOUNTING MATTERS
The assets and liabilities of the Constituent Corporations as at the
effective time of the Share Exchange, shall be taken up on the books of the
Subsidiary Corporation at the amounts of which they shall be carried at that
time on the books of the respective Constituent Corporations. The amount of
capital of the Subsidiary Corporation after the Share Exchange shall be equal
to the sum of the aggregate amount of the par value of the Common Stock to be
issued in the Share Exchange and of the aggregate par value of the Common
Stock that will remain issued upon the Share Exchange. The surplus of the
Subsidiary Corporation after the Share Exchange, including any surplus arising
in the Share Exchange, shall be available to be used for any legal purposes
for which surplus may be used.
ARTICLE IX
DIRECTOR APPROVAL; FILING OF CERTIFICATE OF SHARE EXCHANGE
This Agreement shall be submitted to the directors of each of the
Constituent Corporations for approval. If such requisite director approval is
obtained, Articles of Share Exchange in substantially the form annexed hereto
as Exhibit A shall be signed, verified and delivered to the Secretary of State
of the State of Colorado for filing as provided by Section 0-000-000 of the
Colorado Business Corporation Act.
ARTICLE X
WATERFORD REPRESENTS AND WARRANTS TO ATI AS FOLLOWS
1. Organization, Etc. Waterford is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Colorado. Waterford has corporate power to carry on its business as it is now
being conducted and is qualified to do business in every jurisdiction in which
the character and location of the assets owned by it or the nature of the
business transacted by it require qualification.
2. Capitalization. Waterford's capitalization consists of TWENTY
MILLION (20,000,000) authorized shares no par value Common Stock, of which TWO
MILLION TWO HUNDRED SEVENTEEN THOUSAND FIVE HUNDRED (2,217,500) shares are
issued and outstanding as of the date hereof, and TWO MILLION (2,000,000)
shares of $1.00 par value Preferred Stock, of which no shares are currently
outstanding. Each issued share is validly issued, fully paid, non-assessable
and each outstanding share is entitled to one vote.
3. List of Information. Waterford has delivered to ATI a list of
information concerning Waterford and its subsidiaries dated the date hereof.
The information set forth in such list and the copies of documents referred
to in such list and furnished to ATI are complete and accurate.
4. Further Warranties and Representations:
(a) Waterford has and on the closing date will have good and marketable
title to all tangible/intangible assets in its records and books of account,
free and clear of all liens, encumbrances and charges and except for current
taxes and assessments not delinquent and liens, encumbrances and charges shown
in its records and books of account which are not substantial in character or
amount, and do not materially detract from the value or interfere with the
use
of properties subject thereto or affected thereby.
(b) Waterford has and on the closing date will have good and marketable
title to the machinery, equipment, merchandise, materials, supplies and other
property of every kind, tangible or intangible, or shown as assets in its
records and books of account, free and clear of all liens, encumbrances and
charges and except for liens, encumbrances and charges, in any, which do not
materially detract from the value of or interfere with the use of the
properties subject thereto or affected thereby.
(c) There are no Pending claims, all taxes imposed by the U.S. or by any
foreign country or by any state, municipality, subdivision or instrumentality
of the U.S. or of any foreign county or by any other taxing authority, which
are due or payable by Waterford, and all price redetermination or
renegotiation claims asserted or that may be asserted against it, have been
paid in full or are adequately provided for by reserves shown in the records
and books of account of Waterford's and will be so paid or provided for on the
closing date. Waterford has no knowledge of any un-assessed tax deficiency
proposed or threatened against it.
(d) Except for agreement described in and appended to the Disclosure
Schedule, none of which materially and adversely affects the earnings,
business, properties, or assets of Waterford,
Waterford is not a party to:
(1)any sales agency agreement not subject to termination without
liability on notice of sixty (60) days or less;
(2)any pension, retirement or profit sharing plan or agreement not
cancelable within sixty (60) days without liability;
(3)any management or consultation agreement not terminable at will
without liability;
(4) any union agreement or loan agreement;
(5)any contract, accepted order or commitment for the purchase of
materials, products or supplies having a total contract price in excess of
$500,000; or
(6)any other agreement which materially affects the business, properties or
assets of Waterford's, or which was entered into other than in the ordinary
and usual course of business.
Adequate reserves will be provided and set up on the books of account of
Waterford's, and will continue to be so provided and set up throughout the
expansion of the project, for any contract, order or commitment expected to
be performed.
(e) Waterford is enjoying and on the closing date will enjoy good
working relationships under all of the Agreements, dealer, sales
representation and other agreements necessary to the normal operation of its
business. All or substantially all of the real and personal properties used
in the business of Waterford are and on the closing date will be in good and
operable condition. Waterford is adequately insured with respect to risks
normally insured against by companies similarly situated. The Disclosure
Schedule shall contain a list, and be accompanied by copies, of all existing
insurance policies of Waterford's, including but not limited to group
insurance and pension plans. All such policies are in full force and effect.
The Disclosure Schedule shall also contain a list of all claims for insured
losses filed by Waterford during the three (3) year period immediately
preceding the date of this Agreement, including but not limited to workmen's
compensation, automobile and general and product liability.
5. Disclosure Schedule. Waterford shall cause six (6) copies of a
schedule (the Disclosure Schedule) setting forth all information required by
this Agreement to be included therein, with all required exhibits attached
thereto, to be delivered to ATI not later than ten (10) days after the date
of this Agreement.
6. Litigation and Proceedings. There is no suit, action or legal or
administrative proceeding pending, or to the knowledge of Waterford
threatened, against it or any of its consolidated subsidiaries, which, if
adversely determined, might materially and adversely affect the financial
condition of Waterford or the conduct of its businesses nor is there any
decree, injunction or order of any court, governmental department or agency
outstanding against Waterford or any of its consolidated subsidiaries having
any such effect.
7. Material Contracts. Waterford is not in default in any material
respect under the terms of any material outstanding contract, agreement,
lease or other commitment.
8. No Conflict with Other Instruments. At the effective time of the
Share Exchange, the consummation of the transactions contemplated by this Plan
will not result in the breach of any term or provision of or constitute a
default under any indenture, mortgage, deed of trust or other material
agreement or instrument to which Waterford or any of its subsidiaries is a
party.
9. Governmental Authorizations. Waterford has all licenses, franchises,
permits and other governmental authorizations which are valid and sufficient
for all businesses presently carried on by Waterford and its consolidated
subsidiaries.
ARTICLE XI
ATI'S REPRESENTATIONS AND WARRANTIES
ATI represents and warrants to Waterford, as follows:
1. Organization. ATI is a corporation duly organized, validly existing
and in good standing under the laws of the State of Wisconsin. ATI has
corporate power to carry on its business as it is now being conducted and is
qualified to do business in every jurisdiction in which the character and
location of the assets owned by it or the nature of the business transacted
by it require qualification.
2. Capitalization. ATI's capitalization consists of 7,000,000
authorized shares of Common Stock (no par value), of which 2,753,840 shares
are issued and outstanding as of the date hereof. Each issued share is
validly issued, fully paid, non-assessable and each outstanding share is
entitled to one vote.
3. Shares to be Issued. At the effective time of the Share Exchange,
each share of no par value Common Stock of ATI issued and outstanding shall be
converted into and become one (1) share Common Stock of the Parent
Corporation. As a result, each holder of outstanding Common Stock of ATI
shall surrender, on a share for share basis, one stock certificate of Common
Stock of ATI for one share of Waterford. Upon surrender to Waterford of one
or more stock certificates for Common Stock of Waterford, each ATI shareholder
shall be entitled to receive one or more stock certificates for the full
number of shares of Common Stock of Waterford into which the Common Stock of
ATI so surrendered shall have been converted as aforesaid together with any
dividends on the Common Stock of ATI as to which the payment date shall have
occurred on or prior to the date of the surrender of said shares and the
proceeds from any sale of a fractional interest in accordance with Paragraph
4 of this Article VI. Waterford's $1.00 par value Preferred Stock, of which
no shares are currently outstanding, shall not be canceled by the Share
Exchange.
4. Financial Statements. ATI has delivered to Waterford copies of its
consolidated balance sheet as at December 31, 1996 and June 30, 1997
inclusive, and related statements of consolidated earnings and earnings
retained in the business for the fiscal year ended on such date, in each case
including the notes thereto. All of such financial statements are true and
complete and have been prepared in accordance with generally accepted
accounting principles consistently followed throughout the periods indicated,
except as otherwise indicated in the notes thereto. Each of such balance
sheets presents a true and complete statement as of its date of the
corporation's financial condition and assets and liabilities. Except as and
to the extent reflected or reserved against therein (including the notes
thereto), ATI did not have, as of the date thereof, any liabilities or
obligations (whether accrued, absolute, contingent or otherwise) of a nature
customarily reflected in a consolidated corporate balance sheet or the notes
thereto, prepared in accordance with generally accepted accounting
principles. Each of such statements of earnings and earnings retained in the
business presents a true and complete statement of the results of operations
of ATI for the period indicated.
5. Further Warranties and Representations:
(a) ATI has and on the closing date will have good and marketable
title to all tangible/intangible assets in its records and books of account,
free and clear of all liens, encumbrances and charges and except for current
taxes and assessments not delinquent and liens, encumbrances and charges shown
in its records and books of account which are not substantial in character or
amount, and do not materially detract from the value or interfere with the
use of properties subject thereto or affected thereby.
(b) ATI has and on the closing date will have good and marketable
title to the machinery, equipment, merchandise, materials, supplies and other
property of every kind, tangible or intangible, or shown as assets in its
records and books of account, free and clear of all liens, encumbrances and
charges and except for liens, encumbrances and charges, in any, which do not
materially detract from the value of or interfere with the use of the
properties subject thereto or affected thereby.
(c) There are no Pending claims, all taxes imposed by the U.S. or
by any foreign country or by any state, municipality, subdivision or
instrumentality of the U.S. or of any foreign country or by any other taxing
authority, which are due or payable by ATI, and all price redetermination or
renegotiation claims asserted or that may be asserted against it, have been
paid in full or are adequately provided for by reserves shown in the records
and books of account of ATI and will be so paid or provided for on the closing
date. ATI has no knowledge of any un-assessed tax deficiency proposed or
threatened against it.
(d) Except for agreement described in and appended to the
Disclosure Schedule, none of which materially and adversely affects the
earnings, business, properties, or assets of ATI, ATI is not a party to:
(1)any sales agency agreement not subject to termination
without liability on notice of sixty (60) days or less;
(2)any pension, retirement or profit sharing plan or agreement
not cancelable within sixty (60) days without liability;
(3)any management or consultation agreement not terminable at
will without liability;
(4)any union agreement or loan agreement;
(5)any contract, accepted order or commitment for the purchase
of materials, products or supplies having a total contract price in excess of
$5,000; or
(6)any other agreement which materially affects the business,
properties or assets of ATI, or which was entered into other than in the
ordinary and usual course of business.
Adequate reserves will be provided and set up on the books of account of ATI,
and will continue to be so provided and set up throughout the expansion of the
project, for any contract, order or commitment expected to be performed.
(e) ATI is enjoying and on the closing date will continue to enjoy good
working relationships under all Franchise Relationships, dealer, sales
representation and other agreements necessary to the normal operation of its
business. All or substantially all of the real and personal properties used
in the business of ATI are and on the closing date will be in good and
operable condition. ATI is adequately insured with respect to risks normally
insured against by companies similarly situated. The Disclosure Schedule
shall contain a list, and be accompanied by copies, of all existing insurance
policies of ATI, including but not limited to group insurance and pension
plans. All such policies are in full force and effect. The Disclosure
Schedule shall also contain a list of all claims for insured losses filed by
ATI during the three (3) year period immediately preceding the date of this
Agreement, including but not limited to workmen's compensation, automobile
and general and product liability.
6. Absence of Certain Charges or Events. From January 1, 1995 to the
date hereof, there has not been:
(i) Any change in the corporate status, businesses, operations or
financial condition of ATI, other than changes in the ordinary course of
business.
(ii) any declaration, setting aside or payment of any dividend or
other distribution with respect to ATI's Common Stock; or any purchase,
redemption or acquisition of such stock by ATI; and
(iii) any other event or condition of any character which has
materially and adversely affected the corporate status, businesses, operations
or financial condition of ATI and its consolidated subsidiaries taken as a
whole.
7. Litigation and Proceedings. There is no suit, action or legal or
administrative proceeding pending, or to the knowledge of ATI threatened,
against it or any of its consolidated subsidiaries, which, if adversely
determined, might materially and adversely affect the financial condition of
ATI and its consolidated subsidiaries or the conduct of their businesses nor
is there any decree, injunction or order of any court, governmental department
or agency outstanding against ATI or any of its consolidated subsidiaries
having any such effect.
8. Material Contracts. ATI is not in default in any material respect
under the terms of any material outstanding contract, agreement, lease or
other commitment.
9. No Conflict with Other Instruments. At the effective time of the
Share Exchange, the consummation of the transactions contemplated by this Plan
will not result in the breach of any term or provision or constitute a default
under any indenture, mortgage, deed of trust or other material agreement or
instrument to which ATI or any of its subsidiaries is a party.
10. Governmental Authorizations. ATI and each of its consolidated
subsidiaries have all licenses, franchises, permits and other governmental
authorizations which are valid and sufficient for all businesses presently
carried on by ATI and its consolidated subsidiaries.
11. Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by ATI directly with
Xxxxx Xxxxxx, and without the intervention of any other person.
ARTICLE XII
CONDUCT OF BUSINESSES PENDING THE SHARE EXCHANGE
From and after the date of this Agreement and prior to the effective
time of the Share Exchange, neither of the Constituent Corporations will,
without the prior written consent of the other:
1. Amend its Certificate of Incorporation or By-Laws except, in the case
as may be necessary to enable them to carry out the provisions of this
Agreement;
2. Engage in any material activity or transaction or incur any material
obligation (by contract or otherwise) except in the ordinary course of
business;
3. Issue rights or options to purchase or subscribe to any shares of
its capital stock or subdivide or otherwise change any such shares;
4. Issue or sell any shares of its capital stock or securities
convertible into shares of its capital stock; or
5. Declare or pay any dividends on or make any distributions in respect
of any shares of its capital stock.
6. From and after the date of this Agreement and prior to the effective
time of the Share Exchange, ATI will use its best efforts to preserve its
business organizations; to keep available to Waterford the services of ATI's
present officers and employees; and to preserve for Waterford the goodwill of
ATI's suppliers, customers and others having business relations with any of
them. During the same period, ATI will not put into effect any material
increase in the compensation or other benefits applicable to officers or
other key personnel.
ARTICLE XIII
ADDITIONAL AGREEMENTS
The Constituent Corporations further agree as follows:
1. Access and Information. Waterford and ATI hereby agree that each
will give to the other and to the other's accountants, counsel and other
representatives full access during normal business hours throughout the period
prior to the Share Exchange to all of its properties, books, contracts,
commitments and records, and that each will furnish the other during such
period with all such information concerning its affairs as such other party
may reasonably request. In the event of the termination of this Agreement
each party will deliver to the other all documents, work papers and other
material obtained from the other relating to the transactions contemplated
hereby, whether so obtained before or after the execution hereof, and will use
its best efforts to have any information so obtained and not heretofore made
public kept confidential.
2. Expenses. Upon a termination of this Agreement as provided in
Section C of Article XIV hereof, each party will pay all costs and expenses
of its performance of and compliance with all agreements and conditions
contained herein to be performed or complied with, including fees, expenses
and disbursements of its accountants and control.
3. Further Assurances. If at any time the Subsidiary Corporation shall
consider or be advised that any further assignment or assurance in law or
other action is necessary or desirable to vest, perfect, or confirm, of record
or otherwise, in the Subsidiary Corporation, the title to any property or
rights of Waterford acquired or to be acquired by or as a result of the Share
Exchange, the proper officers and directors of Waterford and the Subsidiary
Corporation, respectively, shall be and they hereby are severally and fully
authorized to execute and deliver such proper deeds, assignments and
assurances in law and take such other action as may be necessary or proper in
the name of Waterford or the Subsidiary Corporation to vest, perfect or
confirm title to such property or rights in the Subsidiary Corporation and
otherwise carry out the purposes of this Agreement.
ARTICLE XIV
CONDITIONS PRECEDENT; TERMINATION; GENERAL PROVISIONS
A. Conditions Precedent to Waterford's Obligations. The obligations of
Waterford to effect the Share Exchange shall be subject to the following
conditions (which may be waived in writing by ATI):
1. The representations and warranties of Waterford's herein contained
shall be true as of and at the effective time of the Share Exchange with the
same effect as though made at such time; Waterford shall have performed all
obligations and complied with all covenants required by this Agreement to be
performed or complied with by it prior to the effective time of the Share
Exchange; and Waterford shall have delivered to ATI a certificate, dated the
effective date of the Share Exchange and signed by its President or one of its
Vice Presidents and its Secretary or one of its Assistant Secretaries, to such
effect.
2. No material changes in the corporate status, businesses, operations
or financial condition of Waterford, and its consolidated subsidiaries shall
have occurred since January 1, 1995 (whether or not covered by insurance),
other than changes in the ordinary course of business, none of which has been
materially adverse in relation to Waterford and its subsidiaries, taken as a
whole, and no other event or condition of any character shall have occurred or
arisen since that date which shall have materially and adversely affected the
corporate status, businesses, operations or financial condition of Waterford,
and its subsidiaries, taken as a whole.
3. ATI shall have received from Xxxx X. Xxxxxxxx, Esq., counsel for
Waterford, a favorable opinion, dated immediately prior to the effective time
of the Share Exchange, in form and substance satisfactory to ATI, to the
effect that:
(a) Waterford is a corporation duly organized and validly existing and
in good standing under the laws of the State of Colorado and each of its
subsidiaries is a corporation duly organized and validly existing and in good
standing under the laws of the jurisdiction of its incorporation;
(b) Waterford is and each of its subsidiaries is duly qualified as a
foreign corporation and in good standing in each jurisdiction in which such
qualification is necessary (naming such jurisdiction);
(c) Waterford and each of its subsidiaries has the corporate power, and,
in the case of each subsidiary, all licenses, franchises, permits and other
governmental authorizations required, to carry on its business as now being
conducted;
(d) the authorized capital stock of Waterford consists of TWENTY MILLION
(20,000,000) shares of $.00 par value Common Stock, of which TWO MILLION TWO
HUNDRED SEVENTEEN THOUSAND FIVE HUNDRED (2,217,500) shares are issued and
outstanding and have been duly and validly authorized and issued and are
fully paid and non-assessable;
(e) this Agreement has been duly executed and delivered by Waterford and
is the valid and binding obligation of Waterford and all corporate action by
Waterford required in order to authorize the Share Exchange has been taken;
(f) except as may be specified by such counsel, to the knowledge of such
counsel there is no litigation, proceedings, or governmental investigation or
valid dispute pending or threatened against or relating to Waterford or any of
its subsidiaries or its or their properties or businesses other than damage
suits where the defendant's liability in excess of customary self-insurance
amounts is covered by insurance other than matters disclosed in writing as
referred to in Paragraph 11 of Article X hereof; and
(g) as to such other matters incident to the matters herein contemplated
as ATI and its counsel may reasonably request, including the form of all
papers and the validity of all proceedings.
In rendering his opinion, such counsel may rely on certificates of public
officials and of corporate officers, opinions of recognized local counsel in
jurisdictions where such counsel is not qualified to practice, and such other
evidence as he may deem appropriate. The provisions of the preceding sentence
are applicable to all other opinions of counsel to be delivered hereunder.
4. Waterford shall have received such written consents and confirmations
(or opinions of counsel to the effect that such consents or confirmations are
not required), as it may reasonably request to the effect that the Subsidiary
Corporation will succeed upon consummation of the Share Exchange to all of
Waterford's right, title and interest in and to its material contracts,
agreements, leases and other commitments and that the Subsidiary Corporation
shall possess and enjoy all material licenses, franchises, permits and other
governmental authorizations possessed by Waterford at the date hereof.
B. Conditions Precedent to ATI's Obligations. The obligations of ATI
to effect the Share Exchange shall be subject to the following conditions
(which may be waived in writing by Waterford):
1. The representations and warranties of ATI herein contained shall be
true as of and at the effective time of the Share Exchange with the same
effect as though made at such time; ATI shall have performed all
obligations and complied with all covenants required by this Agreement to be
performed or complied with by it prior to the effective time of the Share
Exchange; and ATI shall have delivered to Waterford a Certificate, dated
the effective date of the Share Exchange; and signed by its Chairman of the
Board and President or one of its Vice Presidents and its Secretary or one of
its Assistant Secretaries, to such effect.
2. No material change in the corporate status, businesses, operations
or financial condition of ATI and its consolidated subsidiaries shall have
occurred since April 21, 1998 (whether or not covered by insurance), other
than changes in the ordinary course of business, and no other event or
condition of any character shall have occurred or arisen since that date
which shall have materially and adversely affected the corporate status,
businesses, operations or financial condition of ATI and its consolidated
subsidiaries, taken as a whole.
C. Termination and Abandonment. Anything herein or elsewhere to the
contrary notwithstanding, this Agreement may be terminated and abandoned at
any time before the effective time of the Share Exchange, whether before or
after adoption or approval of this Agreement by the Directors of the
Constituent Corporations under any one or more of the following
circumstances:
1. By the mutual consent of the Boards of Directors of the Constituent
Corporations;
2. By ATI if, prior to the effective time of the Share Exchange, the
conditions set forth in Paragraphs 1 through 5, inclusive, of Section A of
this Article XIV shall not have been met;
3. By Waterford if, prior to the effective time of the Share Exchange,
the conditions set forth in Paragraphs 1 through 4 inclusive of Section B of
this Article XIV shall not have been met;
4. By either of the Constituent Corporations if any action or proceeding
before any court or other governmental body or agency shall have been
instituted or threatened to restrain or prohibit the Share Exchange and such
Constituent Corporation deem it advisable to proceed with the Share Exchange;
or
5. By either of the Constituent Corporations if the Certificate of Share
Exchange shall not have been filed as provided in Article II hereof on or
before June 1, 1998.
Upon any such termination and abandonment, neither party shall have any
liability or obligation hereunder to the other.
D. General. The headings in this Agreement shall not affect in anyway
its meaning or interpretation. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
E. Amendments. Any of the terms or conditions of this Agreement may be
modified or waived at any time before the effective time of the Share Exchange
by the party which is, or the shareholders of which are, entitled to the
benefit thereof upon the authority of the Board of Directors of such party,
provided that any such modification or waiver shall in the judgment of the
party making it not affect substantially or materially or adversely the
benefits to such party or its shareholders intended under this Agreement.
IN WITNESS WHEREOF, this Agreement has been signed by the President of
each of the Constituent Corporations and each of the Constituent Corporations
has caused its corporate seal to be hereunto affixed and attested by the
signature of its Secretary or an Assistant Secretary, all as of the day and
year first above written.
WATERFORD INTERNATIONAL, INC.,
a Colorado corporation
ATTEST:
/s/ Xxxx X. Xxxxxxxx /s/ Xxxxxxxxxxx X. Xxxxxx
_________________________ _______________________________
XXXX X. XXXXXXXX, Secretary XXXXXXXXXXX X. XXXXXX, President
AMERICAN TECHNOLOGIES, INC.:
/s/ Xxxxx Xxxxxx
__________________________________
XXXXX XXXXXX, President
