EXHIBIT 10(AP)
AGREEMENT TO ACQUIRE SHARES
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THIS AGREEMENT TO ACQUIRE SHARES (hereafter referred to as the "Agreement") is
made and entered into as of April 1, 2003 August by and among Imaging
Technologies Corporation (hereafter referred to as "ITEC"), a Delaware
corporation, with principle executive offices located at 00000 Xxx Xxx Xxxxx,
Xxx Xxxxx, Xxxxxxxxxx 00000; The Xxxxxxxxxxxx Group, Inc. (hereinafter referred
to as "CG") a California corporation, and Xxxx Xxxxx, Xxx Xxxxxx and Xxxxxxx
Xxxxxx as principals/shareholders of CG (hereinafter collectively referred to
as the "Shareholders") with principle offices located at 0000 Xxxxxx Xxxxxx,
Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000. The CG and Shareholders will be
referred to collectively, as the "Sellers" ).
RECITALS
WHEREAS, ITEC and Sellers feel that forming a business relationship would
be beneficial to both parties; and
WHEREAS, Shareholders own all the issued and outstanding shares of common
and/or preferred stock of CG and ITEC wishes to purchase the Capital Stock ;
and
WHEREAS, Sellers wish to sell the Capital Stock to ITEC;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and in reliance upon the representations and warranties
hereinafter set forth, the parties agree as follows:
1. CONSIDERATION
1.1 At the Closing, the Shareholders will issue to ITEC the Capital Stock
which will carry a legend indicating that it has not been registered with the
Securities and Exchange Commission (SEC).
At the Closing, ITEC will issue to (i) Shareholders, each $1.00 and other good
and valuable consideration
2. CLOSING
2.1 The Closing shall occur at the offices of ITEC no later than August 1,
2003.
2.2 ITEC shall deliver the following at the Closing:
2.2.1 an Officer's Certificate as to (i) the accuracy at Closing of all of
ITEC's representations and warranties as if made at and as of the Closing Date,
(ii) the fulfillment of all of ITEC's agreements and covenants to be performed
at or before the Closing Date, and (iii) the satisfaction of all Closing
conditions to be satisfied by ITEC; and
2.2.2 copies of resolutions adopted by ITEC's Board of Directors approving
the execution, delivery and performance of this Agreement and approving all of
the transactions contemplated by this Agreement; and
2.2.3 share certificates, representing restricted shares of common stock to
the Shareholders as described above; option agreements, representing options to
acquire shares of common stock of ITEC to Shareholders as described above and
warrant agreement, representing warrants to purchase shares of common stock of
ITEC to Xxxxxx Xxxxx as described above; and
2.2.4 such other instruments or documents as may be necessary or appropriate
to carry out the transactions contemplated hereby.
2.3 At the Closing, Sellers shall deliver the following:
2.3.1 an Officer's Certificate as to (i) the accuracy at Closing of all of
Seller's representations and warranties as if made at and as of the Closing
Date, (ii) the fulfillment of all of Seller's agreements and covenants to be
performed at or before the Closing Date, and (iii) the satisfaction of all
Closing conditions to be satisfied by Seller's;
2.3.2 certified copies of resolutions adopted by CG Board of Directors
approving the execution, delivery and performance of this Agreement and
approving all of the transactions contemplated by this Agreement;
2.3.3 certified copies of resolutions approved by CG stockholders approving
ths Agreement; ;
2.3.4 share certificates representing a sufficient number of shares of CG/SW
common stock to provide ITEC with 100% ownership of the issued and outstanding
common and/or preferred stock of CG duly issued in the name of ITEC;
2.3.5 the resignation of the current officers and directors of CG as
requested by ITEC, effective at the Closing; and
2.3.6 such other endorsements, instruments or documents as may be necessary
or appropriate to carry out the transactions contemplated hereby or are
reasonably requested by ITEC to demonstrate satisfaction of the CG Pre-Closing
Actions.
3. REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers represent and warrant to ITEC as of the execution of this Agreement and
as of the date of the Closing as follows:
3.1 Sellers have all of the requisite right, power and authority, subject to
obtaining the approval of Shareholders, without the consent of any other person
or entity, to execute and deliver this Agreement and the agreements to be
executed and delivered hereby and to carry out the transactions contemplated
hereby and thereby. All actions required to be taken by Sellers to authorize the
execution, delivery and performance of this Agreement and all agreements and
transactions contemplated hereby have been duly and properly taken, with the
exception of those actions specifically identified in Section 6 hereof
("Conditions Precedent to Obligations of ITEC") to be taken by Sellers
subsequent to the execution of this Agreement but prior to the Closing.
3.2 This Agreement and the other agreements and other documents to be
delivered at the Closing by Sellers have been duly executed and delivered by
Sellers and constitute valid and binding obligations of Sellers enforceable in
accordance with their respective terms. The execution and delivery of this
Agreement and the other agreements contemplated hereby and the consummation of
the transactions contemplated hereby and thereby will not (immediately, or upon
notice, with the passage of time, or both) result in the creation of any lien,
charge or encumbrance of any kind or the termination or acceleration of any
indebtedness or other obligation of CG, and are not prohibited by, do not and
will not violate or conflict with any provision of, and do not and will not
constitute a default under or a breach of (i) the articles of incorporation or
bylaws of CG, (ii) any contract, agreement or other instrument to which Sellers
are a party or by which Sellers are bound, (iii) any order, decree or judgment
of any court or governmental agency binding upon Sellers, or (iv) any law, rule
or regulation applicable to Sellers.
3.3.
3.3.1 CG is a corporation duly organized, validly existing and in good
standing under the laws of Nevada, and has full power and authority and all
requisite rights, licenses and permits to carry on its business as it is
presently conducted by CG. CG maintains its primary office in the State of
California.
3.3.2 Except as set forth on Schedule 3.3 all of the CG shares have been
duly and validly authorized and granted or sold and there are no contributions,
capital calls or other amounts outstanding with respect to any CG shares. The CG
shares were not issued in violation of any preemptive or other right of any
person. There are no outstanding options, rights, warrants, conversion rights or
other agreements or commitments to which CG is a party or binding upon CG for
the sale or transfer by CG of any interest in CG except as described on Schedule
3.3.
3.4 Other than approval by a Shareholders no approval, authorization,
registration, consent, order or other action of or filing with any person,
including any court, administrative agency or other governmental authority, is
required for (i) the execution and delivery of this Agreement or the agreements
contemplated hereby, or (ii) the consummation of the transactions contemplated
hereby and thereby.
3.5
3.5.1 The unaudited financial statements for CG at and as of March 31,2003,
("CG Financial Statements") (i) are attached hereto as Schedule 3.5; and (ii)
are accurate and complete.
3.5.2 CG is not subject to any liability or obligation (whether absolute,
accrued, contingent or otherwise and whether matured or unmatured) other than
liabilities and obligations described in the CG Financial Statements and/or on
Schedule 3.5.
3.6 The books of account and other records (financial and otherwise) of CG
are complete and correct and are maintained in accordance with good business
practices and generally accepted accounting practices.
3.7 Since January 1, 2003, CG has operated its business only in the ordinary
course, and there has not been any of the following in connection with CG except
as disclosed in the CG Financial Statements, Schedule 3.5 or as set forth
below:
3.7.1 any material adverse change in the financial condition, assets,
liabilities, personnel, prospects or business affairs of CG in its relationships
with suppliers, vendors, customers, representatives, employees or others, nor
has there been the occurrence of any event or condition which could reasonably
be expected to have such an effect;
3.7.2 any declaration or payment of any dividend or other distribution;
3.7.3 any forgiveness, cancellation, write-off or write-down of debts or
claims, or waiver of any rights related to CG other than in the ordinary course
of negotiating settlements of creditor claims and settlement of litigation filed
against CG, as disclosed on Schedule 3.7;
3.7.4 any increase or decrease in the compensation, benefits or method or
rate of reimbursement paid, payable or to become payable by CG to any employee,
independent contractor or other person who renders services in connection with
CG or its business, or any payments of compensation other than salary to any of
such employees;
3.7.5 any incurrence of debt;
3.7.6 any entry into any material agreement, commitment or transaction in
excess of ten thousand dollars ($10,000) or any capital expenditure in excess of
five thousand dollars ($5,000);
3.7.7 any incurrence of any security interest, lien, charge, encumbrance or
claim on, or any damage or loss to, any of the assets of CG;
3.7.8 any change in the method of operation or practices of CG, including
any change in the accounting, billing or invoicing procedures of CG;
3.7.9 any sale, transfer or disposal by or for CG or purchase by or for CG
of any properties or assets, except in the ordinary course of negotiating
settlements of creditor claims and settlement of litigation as disclosed on
Schedule 3.7; or
3.7.10 any agreement, commitment or understanding by CG to do any of the
foregoing.
3.8 CG owns or otherwise controls the contracts, assets, leases, accounts
receivable, trademarks, patents and other tangible and intangible property which
is carried on its Financial Statements, and CG has good and marketable title to
such assets, and such assets are not and will not be subject to any pledge,
option, escrow, hypothecation, lien, security interest, financing statement,
lease, license, easement, right of way, encumbrance or other restriction of any
kind except as disclosed on Schedule 3.8.
3.9 CG does not own any real property.
3.10 Except as described on Schedule 3.10, CG does not lease any personal
property. Schedule 3.10 sets forth an accurate, correct and complete list of all
office furnishings and other personal property leased by CG.
3.11 Schedule 3.11 contains a list of all information in the nature of trade
secrets, know-how or proprietary information, including but not limited to,
software, copyrighted and copyrightable material, electronic data processing
systems, program specifications and technical information relating to or used by
CG (the "Proprietary Information"). The Proprietary Information does not violate
or infringe upon any trade secret rights, patents, trademarks or copyrights of
any other person. Except as set forth on Schedule 3.11, the Proprietary
Information is owned exclusively by CG and no other person or entity has any
claim thereto or rights therein.
3.12 Except as set forth in Schedule 3.12, CG has paid all taxes required to
be paid and has filed all returns, declarations and reports or information
returns and statements required to be filed.
3.13 Except as set forth in Schedule 3.13, CG is not engaged in, or a party
to, or to the best of CG's knowledge, threatened with, any suit, action,
proceeding, or investigation or legal, administrative, arbitration or other
method of settling disputes, and no officer of CG knows, anticipates or has
notice of any basis for any such action. CG has not received notice of any
investigation, suit or proceeding threatened or contemplated by any foreign,
federal, state or local government or regulatory authority including, without
limitation, those involving CG's employment notices or policies or compliance
with environmental regulations.
3.14 CG has not retained any broker or finder or incurred any liability or
obligation for any brokerage fees, commissions or finder's fees with respect to
this Agreement or the transactions contemplated hereby.
3.15 CG has no accounts or notes receivable with the exception of those
described in Schedule 3.15, for which no defenses to payment have been asserted,
nor does CG have reason to believe that such receivables would not be paid (with
the exception of the obligor's inability to pay for financial reasons).
3.16 Neither this Agreement nor any attachment, schedule, certificate or
other statement delivered pursuant to this Agreement in or in connection with
the transactions contemplated hereby contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary in order to make the statements and information contained herein or
therein, in light of the circumstances in which they were made, not misleading.
Each schedule delivered pursuant to this Agreement is accurate and complete. To
Seller's knowledge, there is no information necessary to enable a prospective
purchaser of CG or its common stock to make an informed decision with respect to
the purchase of CG or its common stock which has not been expressly disclosed to
ITEC in this Agreement or in writing in connection with ITEC's due diligence
process.
3.17 with respect to the shares of common stock and options of ITEC being
acquired by Shareholders (the "ITEC Securities"):
3.17.1 Shareholders are acquiring the ITEC Securities for its own account,
and not with a view toward the subdivision, resale, distribution, or
fractionalization thereof; SHAREHOLDERS has no contract, undertaking, or
arrangement with any person to sell, transfer, or otherwise dispose of the ITEC
Securities (or any portion thereof hereby subscribed for), and has no present
intention to enter into any such contract, undertaking, agreement or
arrangement;
3.17.2 This subscription for the ITEC Securities by Shareholders is not the
result of any form of general solicitation or general advertising;
3.17.3 Shareholders hereby acknowledges that: (i) the offering of the ITEC
Securities was made only through direct, personal communication between ITEC and
Sellers; (ii) Shareholders have had full access to material concerning ITEC's
planned business and operations, which material was furnished or made available
to Shareholders by representatives of ITEC; (iii) ITEC has given Shareholders
the opportunity to ask any questions and obtain all additional information
desired in order to verify or supplement the material so furnished; and (iv)
Shareholders understand and acknowledges that a purchaser of the ITEC Securities
must be prepared to bear the economic risk of such investment for an indefinite
period because of: (A) the heightened nature of the risks associated with an
investment in ITEC, including without limitation the risk of loss of the entire
amount of their investment; and (B) illiquidity of the ITEC Securities due to
the fact that (1) the ITEC Securities has not been registered under the
Securities Act of 1933 (the "Act") or any state securities act (nor passed upon
by the SEC or any state securities commission), and (2) the ITEC Securities may
not be registered or qualified by Shareholders under federal or state securities
laws solely in reliance upon an available exemption from such registration or
qualification, and hence ITEC Securities cannot be sold unless they are
subsequently so registered or qualified, or are otherwise subject to any
applicable exemption from such registration requirements; and (3) substantial
restrictions on transfer of the ITEC Securities, as set forth by legend on the
face or reverse side of every certificate evidencing the ownership of the ITEC
Securities ;
3.17.4 Shareholders are an "accredited investor" as such term is defined in
Rule 501 of Regulation D promulgated by the Securities and Exchange Commission
under the Act, or, if ITEC is non-accredited, then it has sufficient business
expertise and sophistication so as to be able to make a determination concerning
the relative risks and merits of an investment in the securities, and has a
pre-existing business or personal relationship with at least one of the
shareholders, directors or executive officers of ITEC;
3.17.5 Shareholders have received material concerning ITEC's planned
business and operations and carefully read it; the decision to make an
investment in the ITEC Securities has been taken solely in reliance upon the
information contained such materials, and such other written information
supplied by an authorized representative of ITEC as Shareholders may have
requested; Shareholders acknowledge that all documents, records and books
pertaining to this investment have been made available for inspection by ITEC,
its attorneys, accountants and purchaser representatives and that it has been
informed by ITEC that the books and records of ITEC will be available for
inspection by Shareholders or its agents and representatives at any time, and
from time to time, during reasonable business hours, upon reasonable notice and
upon the signing of a Confidentiality Agreement between ITEC and Sellers;
Shareholders further acknowledge that it (or its advisors, agents and/or
representatives) has had a reasonable and adequate opportunity to ask questions
of and receive answers from ITEC concerning the terms and conditions of this
subscription, the nature of the ITEC Securities and the business and operations
of ITEC, and to obtain from ITEC such additional information, to the extent
possessed or obtainable without unreasonable effort or expense, as is necessary
to verify the accuracy of the information contained in the materials provided by
ITEC; all such questions have been answered by ITEC to the full satisfaction of
Shareholders; Shareholders are not relying upon any oral information furnished
by ITEC or any other person in connection with his investment decision, and in
any event, no such oral information has been furnished to Shareholders which is
in any way inconsistent with or contradictory to any information contained in
the materials provided to Shareholders by ITEC in writing as described above;
3.17.6 Shareholders understand and acknowledge that the ITEC Securities will
be unsecured by ITEC or any other person, and non-recourse to any shareholder,
officer, director, employee, agent or representative of ITEC; and
3.17.7 Shareholders has been advised to consult with an attorney regarding
all legal matters concerning the purchase and ownership of the ITEC Securities,
and with a tax advisor regarding the tax consequences of purchasing the ITEC
Securities.
4. REPRESENTATIONS AND WARRANTIES OF ITEC
ITEC hereby represents and warrants to Sellers as of the date hereof as follows:
4.1 ITEC has all requisite right, power and authority, without the consent
of any other person or entity, to execute and deliver this Agreement and the
agreements to be executed and delivered at Closing and to carry out the
transactions contemplate hereby and thereby. All actions required to be taken by
ITEC to authorize the execution, delivery and performance of this Agreement and
all agreements and transactions contemplated hereby have been duly and properly
taken.
4.2 This Agreement has been, and the agreements and other documents to be
delivered at Closing by ITEC and will be, duly executed and delivered by ITEC
and constitute valid and binding obligations of ITEC, enforceable in accordance
with their respective terms. The execution and delivery of this Agreement and
the other agreements contemplated hereby and the consummation of the
transactions contemplated hereby and thereby do not and will not violate or
conflict with any provision of, and do not and will not constitute a default
under or a breach of (i) the Certificate of Incorporation or Bylaws of ITEC,
(ii) any contract, agreement or other instrument to which ITEC is a party, (iii)
any order or judgment of any court or governmental agency, or (iv) any law,
rule, or regulation applicable to ITEC.
4.3 No approval, authorization, registration, consent, order or other action
of or filing with any person, including any court, administrative agency or
other governmental authority is required for the execution and delivery by ITEC
of this Agreement or the agreements contemplated hereby or the consummation of
the transactions contemplated hereby and thereby.
4.4 ITEC is a corporation duly organized and validly existing under the laws
of the State of Delaware, and has full corporate power and authority to carry on
the business in which it is engaged.
4.5 Except as set forth in Schedule 4.5, ITEC is not engaged in, or a party
to, or to the best of its knowledge, threatened with, any suit, action,
proceeding, or investigation or legal, administrative, arbitration or other
method of settling disputes, which (if determined adversely to ITEC) would
materially and adversely affect the ability of ITEC to perform hereunder or
under any other agreement, document or instrument required to be executed and
delivered by ITEC in connection with the consummation of the transactions
contemplated hereby, and ITEC neither knows, anticipates or has notice of any
basis for any such action.
4.6 ITEC has not retained any broker or finder or incurred any liability or
obligation for any brokerage fees, commissions or finder's fees with respect to
this Agreement or the transactions contemplated hereby.
4.7 with respect to the Capital Stock being acquired by ITEC:
4.7.1 ITEC is acquiring the Capital Stock for its own account, and not with
a view toward the subdivision, resale, distribution, or fractionalization
thereof; ITEC has no contract, undertaking, or arrangement with any person to
sell, transfer, or otherwise dispose of the Capital Stock (or any portion
thereof hereby subscribed for), and has no present intention to enter into any
such contract, undertaking, agreement or arrangement;
4.7.2 This subscription for the Capital Stock by ITEC is not the result of
any form of general solicitation or general advertising;
4.7.3 ITEC hereby acknowledges that: (i) the offering of the Capital Stock
was made only through direct, personal communication between ITEC and Sellers;
(ii) ITEC has had full access to material concerning CG's planned business and
operations, which material was furnished or made available to ITEC by
Shareholders of CG; (iii) CG has given ITEC the opportunity to ask any
questions and obtain all additional information desired in order to verify or
supplement the material so furnished; and (iv) ITEC understands and
acknowledges that a purchaser of the Capital Stock must be prepared to bear the
economic risk of such investment for an indefinite period because of: (A) the
heightened nature of the risks associated with an investment in CG, including
without limitation the risk of loss of the entire amount of their investment;
and (B) illiquidity of the Capital Stock due to the fact that (1) the Capital
Stock has not been registered under the Securities Act of 1933 (the "Act") or
any state securities act (nor passed upon by the SEC or any state securities
commission), and (2) the Capital Stock may not be registered or qualified by
ITEC under federal or state securities laws solely in reliance upon an available
exemption from such registration or qualification, and hence such Shares cannot
be sold unless they are subsequently so registered or qualified, or are
otherwise subject to any applicable exemption from such registration
requirements; and (3) substantial restrictions on transfer of the CG Shares, as
set forth by legend on the face or reverse side of every certificate evidencing
the ownership of the Capital Stock ;
4.7.4 ITEC is an "accredited investor" as such term is defined in Rule 501
of Regulation D promulgated by the Securities and Exchange Commission under the
Act, or, if ITEC is non-accredited, then it has sufficient business expertise
and sophistication so as to be able to make a determination concerning the
relative risks and merits of an investment in the securities, and has a
pre-existing business or personal relationship with at least one of the
shareholders, directors or executive officers of CG;
4.7.5 ITEC has received material concerning CG's planned business and
operations and carefully read it; the decision to make an investment in the
Capital Stock has been taken solely in reliance upon the information contained
such materials, and such other written information supplied by an authorized
representative of CG as ITEC may have requested; ITEC acknowledges that all
documents, records and books pertaining to this investment have been made
available for inspection by ITEC, its attorneys, accountants and purchaser
representatives and that it has been informed by CG that the books and records
of CG will be available for inspection by ITEC or its agents and representatives
at any time, and from time to time, during reasonable business hours, upon
reasonable notice and upon the signing of a Confidentiality Agreement between
ITEC and Sellers; ITEC further acknowledges that it (or its advisors, agents
and/or representatives) has had a reasonable and adequate opportunity to ask
questions of and receive answers from Sellers concerning the terms and
conditions of this subscription, the nature of the Capital Stock and the
business and operations of CG, and to obtain from Sellers such additional
information, to the extent possessed or obtainable without unreasonable effort
or expense, as is necessary to verify the accuracy of the information contained
in the materials provided by Sellers; all such questions have been answered by
Sellers to the full satisfaction of ITEC; ITEC is not relying upon any oral
information furnished by Sellers or any other person in connection with his
investment decision, and in any event, no such oral information has been
furnished to ITEC which is in any way inconsistent with or contradictory to any
information contained in the materials provided to ITEC by Sellers in writing as
described above;
4.7.6 ITEC understands and acknowledges that the Capital Stock will be
unsecured by Sellers or any other person, and non-recourse to any shareholder,
officer, director, employee, agent or representative of CG; and
4.7.7 ITEC has been advised to consult with an attorney regarding all legal
matters concerning the purchase and ownership of the Capital Stock, and with a
tax advisor regarding the tax consequences of purchasing the Capital Stock.
5. COVENANTS
Sellers and ITEC hereby agree to keep, perform and fully discharge the following
covenants and agreements.
5.1 Sellers and ITEC agree to use their commercially reasonable efforts to
satisfy the Closing conditions set forth herein by the Closing Date, or earlier
if possible.
5.2 From the date of this Agreement until Closing Date, Sellers shall:
5.2.1 use commercial best efforts to preserve intact its business
organization, licenses, permits, and securities registrations; and
5.2.2. perform, in all material respects, all obligations under
agreements.
5.3 From the date of this Agreement until the Closing Date, Sellers will
not, without the prior written consent of ITEC, do any of the following:
5.2.3 take any action, which would (i) adversely affect the ability of any
party hereto to obtain any consents required for the transactions contemplated
thereby, or (ii) adversely affect the ability of any party hereto to perform its
covenants and agreements;
5.2.4 make any distribution related to earnings any payment of cash to any
shareholder of CG other than normal payments made in the ordinary course of
business consistent with past practices;
5.2.5 impose on any material asset, or suffer the imposition on any material
asset of, any lien;
5.2.6 sell, pledge or encumber, or enter into any contract to sell, pledge
or encumber, any interest in the assets of CG;
5.2.7 purchase, lease or otherwise acquire any assets or properties, whether
real or personal, tangible or intangible, or sell, lease or otherwise dispose of
any assets or properties, whether real or personal, tangible or intangible,
except in the ordinary course of business and consistent with past practices;
5.2.8 grant any increase in compensation or benefits to the employees or
officers; pay any severance or termination pay or any bonus other than pursuant
to written policies or written contracts in effect as of the date hereof and
disclosed on the schedules hereto, unless such action is first approved in
writing by ITEC's Chief Executive Officer;
5.2.9 enter into or amend any employment contract (unless such amendment is
required by law) that CG does not have the unconditional right to terminate
without liability (other than liability for services already rendered), at any
time on or after the Closing;
5.2.10 make any significant change in any tax or accounting methods or
systems of internal accounting controls, except as may be appropriate to conform
to changes in tax laws or regulatory accounting requirements or GAAP;
5.2.11 commence any litigation other than in accordance with past practice,
settle any litigation involving any liability for material money damages or
restrictions upon the Business;
5.2.12 except in the ordinary course of business and which is not material,
modify, amend or terminate any material contract or waive, release, compromise
or assign any material rights or claims;
5.2.13 make or commit to make any capital expenditure, or enter into any
lease of capital equipment as lessee or lessor;
5.2.14 take any action, or omit to take any action, which would cause any of
the representations and warranties contained herein to be or become untrue or
incorrect;
5.2.15 make any loan to any person or increase the aggregate amount of any
loan currently outstanding to any person that would be payable following the
Closing; or
5.2.16 grant any rights, securities or other instruments that include or
contain any right to purchase or otherwise obtain common stock of CG, which
extends beyond the Closing Date.
5.4 From the date of this Agreement until Closing Date, ITEC shall perform
in all material respects all obligations under agreements.
5.5 From the date of this Agreement until the Closing Date, ITEC will not,
without the prior written consent of Sellers , do any of the following:
5.5.1 take any action, which would (i) adversely affect the ability of any
party hereto to obtain any consents required for the transactions contemplated
thereby, or (ii) adversely affect the ability of any party hereto to perform its
covenants and agreements;
5.5.2 enter into any agreement or commitment to do any of the
foregoing.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF ITEC
Each and all of the obligations of ITEC to consummate the transactions
contemplated by this Agreement are subject to fulfillment prior to or at the
Closing of the following conditions:
6.1 ITEC will have completed its due diligence review and satisfied itself
that the representations and warranties of Sellers contained herein are accurate
and shall be accurate in all respects as if made on and as of the Closing Date.
Sellers shall have performed all of the obligations and complied with each and
all of the covenants, agreements and conditions required to be performed or
complied with by it on or prior to the Closing Date
6.2 No action, suit, proceeding or investigation before any court,
administrative agency or other governmental authority shall be pending or
threatened wherein an unfavorable judgment, decree or order would prevent the
carrying out of this Agreement or any of the transactions contemplated hereby,
declare unlawful the transactions contemplated hereby, cause such transactions
to be rescinded, or which might affect the right of ITEC or its affiliates to
own, operate or control CG.
6.3 CG shall not have been adversely affected in any way by any act of God,
fire, flood, accident, war, labor disturbance, legislation, or other event or
occurrence, whether or not covered by insurance, and there shall have been no
change in the assets or the business CG or CG's financial condition, properties
or prospects, which would have a material adverse effect thereon.
6.4 All corporate, stockholder, regulatory and other actions and proceedings
in connection with the transactions contemplated hereby and all documents
incidental thereto, and all other related legal matters, shall be satisfactory
in form and substance to counsel for ITEC, and ITEC shall have received all such
resolutions, documents and instruments, or copies thereof, certified if
requested, as its counsel shall have reasonably requested.
6.5 There shall have been no change, circumstance or occurrence that has had
or would have a material adverse effect on the business, operations, properties,
condition (financial or otherwise) or prospects of CG.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS
Each and all of the obligations of Sellers to consummate the transactions
contemplated by this Agreement are subject to fulfillment prior to or at the
Closing of the following conditions:
7.1 The representations and warranties of ITEC contained herein shall be
accurate in all respects as if made on and as of the Closing Date. ITEC shall
have performed all of the obligations and complied with each and all of the
covenants, agreements and conditions required to be performed or complied with
on or prior to Closing Date.
7.2 No action, suit, proceeding or investigation before any court,
administrative agency or other governmental authority shall be pending or
threatened wherein an unfavorable judgment, decree or order would prevent the
carrying out of this Agreement or any of the transactions contemplated hereby,
declare unlawful the transactions contemplated hereby or cause such transactions
to be rescinded.
7.3 All corporate and other actions and proceedings in connection with the
transactions contemplated hereby and all documents incidental thereto, and all
other related legal matters, shall be reasonably satisfactory in form and
substance to counsel for Sellers, and Sellers shall have received all such
resolutions, documents and instruments, or copies thereof, certified if
requested, as its counsel shall have reasonably requested.
8. SURVIVAL AND INDEMNIFICATION
8.1 All representations, warranties, covenants and agreements contained in
this Agreement or in any document delivered pursuant hereto shall be deemed to
be material and to have been relied upon by the parties hereto. All
representations and warranties contained in this Agreement shall survive the
Closing for the applicable statute of limitations period, and all
representations, warranties and covenants to be made or performed after the
Closing shall survive the Closing until made or performed and for the applicable
statute of limitations period after their due date. The indemnity obligations
of each party to this Agreement shall terminate (absent fraud or intentional
misrepresentation) one year from the Closing Date. Any claim for
indemnification that is asserted within one year of the Closing Date shall
survive until resolved or judicially determined. The representations and
warranties contained in this Agreement shall not be affected by any
investigation, verification or examination by any party hereto or by anyone on
behalf of any such party.
8.2
8.2.1 Sellers shall hold harmless and defend ITEC and its successors and
assigns from and against any and all claims related to, caused by or arising
from (a) any misrepresentation or breach of warranty or failure to fulfill any
covenant or agreement of Sellers set forth in this Agreement, or any other
misrepresentation, breach of warranty or failure to fulfill a covenant or
agreement by Sellers contained in any agreement or other document delivered
pursuant hereto, or (b) any and all claims of third parties made based upon
facts alleged that, if true, would have constituted such a misrepresentation,
breach or failure.
8.2.2 ITEC shall indemnify, hold harmless and defend Sellers and its
representatives, officers, members, managers, directors, affiliates, successors
and assigns, from and against any and all claims related to, caused by or
arising from (i) any misrepresentation, breach of warranty or failure to fulfill
any covenant or agreement of ITEC contained herein or in any agreement or other
document delivered pursuant hereto, or (ii) any and all claims of third parties
made based upon facts alleged that, if true, would constitute such a
misrepresentation, breach or failure.
8.3 The party seeking indemnification under this article (the "Indemnified
Party") shall give prompt written notice to the indemnifying party (the
"Indemnifying Party") of the facts and circumstances giving rise to any claim,
provided, however, that an Indemnified Party's failure to give such notice shall
not impair or otherwise affect such Indemnified Party's right to indemnification
except to the extent that the Indemnifying Party demonstrates actual damage
caused by such failure. All rights contained in this article are cumulative and
are in addition to all other rights and remedies, which are otherwise available,
pursuant to the terms of this Agreement or applicable law. All indemnification
rights shall be deemed to apply in favor of the indemnified party's officers,
directors, representatives, subsidiaries, affiliates, successors and assigns.
8.4 The Indemnified Party shall not settle or compromise any claim by a
third party for which the Indemnified Party is entitled to indemnification
hereunder without the prior written consent of the Indemnifying Party (which
consent shall not be unreasonably withheld), unless legal action shall have been
instituted against the Indemnified Party and the Indemnifying Party shall not
have taken control of such suit within fifteen (15) days after notification
thereof as provided herein. In connection with any claim giving rise to
indemnification hereunder resulting from or arising out of any claim by a person
other than the Indemnified Party, the Indemnifying Party shall, upon written
notice to the Indemnified Party, assume the defense of any such claim without
prejudice to the right of the Indemnifying Party thereafter to contest its
obligation to indemnify the Indemnified Party in respect to the claims asserted
therein. If the Indemnifying Party assumes the defense of any such claim, the
Indemnifying Party shall select counsel to conduct the defense in such claims
and at its sole cost and expense shall take all steps necessary in the defense
or settlement thereof. The Indemnifying Party shall not consent to a settlement
of, or the entry of any judgment arising from, any claim, without the prior
written consent of the Indemnified Party, unless the Indemnifying Party admits
in writing its liability to hold the Indemnified Party harmless from and against
any losses, damages, expenses and liabilities arising out of such settlement.
The Indemnified Party shall be entitled to participate in the defense of any
such action with its own counsel and at its own expense. If the Indemnifying
Party does not assume the defense of any such claim resulting therefrom in
accordance with the terms hereof, the Indemnified Party may defend such claim in
such a manner as it may deem appropriate, including settling such claim after
giving notice of the same to the Indemnifying Party on such terms as the
Indemnified Party may deem appropriate, and in any action by the Indemnified
Party seeking indemnification from the Indemnifying Party in accordance with the
provisions of this article, the Indemnifying Party shall not be entitled to
question the manner in which the Indemnified Party defended such claim or the
amount or nature of any such settlement. In the event of a claim by a third
party, the Indemnified Party shall cooperate with the Indemnifying Party in the
defense of such action (including making a personal contact with the third party
if deemed beneficial) and the relevant records of party shall be made available
on a timely basis.
9. MISCELLANEOUS
9.1. Payment of Fees and Expenses. If any legal action or other proceeding
is brought for the enforcement of this Agreement, or because of an alleged
dispute, breach, default, or misrepresentation in connection with any of the
provisions of this Agreement, the successful or prevailing party or parties
shall be entitled to recover reasonable attorneys' fees and other costs incurred
in that action or proceeding, in addition to any other relief to which it or
they may be entitled. Any action shall be brought in San Diego County
California.
9.2. Entire Agreement. This Agreement, including the documents and writings
referred to herein or delivered pursuant hereto, which form a part hereof,
contains the entire understanding of the parties with respect to its subject
matter. This Agreement supercedes all prior agreements and understandings
between the parties with respect to its subject matter.
9.3. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without regard to its
conflict of laws provisions.
9.4. Notices. Any and all notices, demands or other communications required
or desired to be given by any party shall be in writing and shall be validly
given or made to another party if given by personal delivery, telex, facsimile,
telegram or if deposited in the United States mail, certified or registered,
postage prepaid, return requested.
If to ITEC:
Imaging Technologies, Corporation, 00000 Xxx xxx Xxxxx, Xxx Xxxxx, XX 00000,
Attention: Xxxxx Xxxxx, CEO
If to CG:
The Xxxxxxxxxxxx Group, Inc, 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxx,
Xxxxxxxxxx 00000, Attention: Xxxx Xxxxx
If to Shareholders:
Xxxx Xxxxx, Xxxxxxx Xxxxxx, and Xxx Xxxxxx
0000 Xxxxxx Xxxxxx, Xxxxx 000. Xxx Xxxxx, Xxxxxxxxxx 00000
9.5 Titles and Captions. Paragraph titles and captions contained in this
Agreement are inserted only as a matter of convenience and for reference and in
no way define, limit, extend or describe the scope of this Agreement or the
intent of any provision.
9.10 Counterpart Signature Pages. This Agreement may be executed by the
Parties through counterpart signature pages (and not as part of one document
bearing all signatures consecutively), all of which, when together, shall
constitute satisfaction of the signature requirements. Facsimile signature
pages shall also be acceptable.
9.11 Authority. The undersigned individuals and/or entities execute this
Agreement on behalf of their respective parties, and represent and warrant that
said individual and/or entities are authorized to enter into and execute this
Agreement on behalf of such Parties, that the appropriate corporate resolutions
or other consents have been passed and/or obtained (if necessary), and that this
Agreement shall be binding on the Party on whose benefit they are executing this
Agreement.
9.12 Waiver, Modification and Amendment. All waivers hereunder must be made
in a signed writing, and failure by either Party at any time to require the
other Party's performance of any obligation under this Agreement shall not
affect the right subsequently to require performance of that obligation. Any
waiver of a breach or violation of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision
or a waiver or modification of the provision. This Agreement may be modified or
amended only by a later writing signed by all of the Parties.
9.13 Provisions Severable. The Parties expressly agree and contract that it
is not the intention of any of them to violate any public policy, statutory or
common laws, rules, regulations, treaties or decisions of any government or
agency thereof. If any section, sentence, clause, word or combination thereof
in this Agreement is judicially or administratively interpreted or construed as
being in violation of any such provisions of any jurisdiction, such sections,
sentences, words, clauses or combinations thereof shall be inoperative in each
such jurisdiction and the remainder of this Agreement shall remain binding upon
the Parties in each such jurisdiction.
9.14 Successors. This Agreement is binding upon and shall inure to the
benefit of the Parties and each Party's respective successors, assigns, heirs,
spouses, agents and personal representatives, enforceable against each of them
in accordance with its terms.
9.15 Assignment. This Agreement may not be assigned in whole or in part, by
either Party, whether by operation of law or by contract, without the prior,
written consent of the other Party, which consent may be given or withheld in
the sole and exclusive discretion of such other Party.
9.16 Announcements. Neither Party shall make any public release or filing
concerning this Settlement Agreement or the transactions contemplated hereby
without prior approval of other Party. If no response is received from the Party
of whom response is requested within three (3) business days of receipt, then
right to publish such release or filing shall be deemed given.
9.17 Termination. Either Party may immediately terminate this Agreement
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upon the material breach by the non-terminating Party of any agreement,
covenant, representation or warranty contained herein, or (by the non-affected
Party) upon the bankruptcy or the filing of any voluntary or involuntary
petition for bankruptcy by or against the non-terminating Party, or for the
appointment of a receiver for the purpose of liquidation or the making of a
request for a moratorium or assignment for the benefit of creditors generally
against the non-terminating Party. In the event that this Agreement shall
become terminated by reason of any of the foregoing circumstances, then the
Parties hereby agree and acknowledge that such termination shall not disturb or
unwind the releases of claims given by each Party to the other Party pursuant to
Section 8 of this Agreement, the full and complete consideration for which was
its entry into in good faith, and willingness to perform the terms hereof but
for the termination of this Agreement by the Party whose actions or
circumstances created the right to terminate this Agreement.
IN WITNESS WHEREOF, the parties hereto have set forth their hand as of the date
and year first above written.
IMAGING TECHNOLOGIES CORPORATION
By: /s/ Xxxxx Xxxxx, Title: Chief Executive Officer
THE XXXXXXXXXXXX GROUP, INC.
By: /s/ Xxxx Xxxxx, Xxxxxxx Xxxxxx, Xxx Xxxxxx
