AGREEMENT AND
PLAN OF REORGANIZATION
among
AMACAN RESOURCES CORPORATION
and
SPIRE TECHNOLOGIES, INC.
and
SPIRE TECHNOLOGIES SYSTEMS DIVISION, INC.
and
THE HOLDERS OF THE COMMON STOCK OF SPIRE
TECHNOLOGIES, INC. AND SPIRE TECHNOLOGIES SYSTEMS DIVISION, INC.
________________________________________________________________________________
TABLE OF CONTENTS
________________________________________________________________________________
ARTICLE PAGE
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . 1
ARTICLE II THE SHARE EXCHANGE . . . . . . . . . . . . . . . . 4
ARTICLE III CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES 6
ARTICLE IV REPRESENTATIONS, COVENANTS AND WARRANTIES
OF SPIRE AND SPIRE SYSTEMS . . . . . . . . . . . . 8
ARTICLE V REPRESENTATIONS, COVENANTS AND WARRANTIES
OF AMACAN . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VI SPECIAL COVENANTS TO BE SATISFIED PRIOR
TO CLOSING . . . . . . . . . . . . . . . . . . . . 25
ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS OF
AMACAN . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VIII CONDITIONS PRECEDENT TO OBLIGATIONS
OF SPIRE AND SPIRE SYSTEMS . . . . . . . . . . . . 32
ARTICLE IX GENERAL PROVISIONS . . . . . . . . . . . . . . . . 34
EXHIBITS
Exhibit A - Articles of Share Exchange
SCHEDULES
Spire Disclosure Schedules
Amacan Disclosure Schedules
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "AGREEMENT"), is entered
into this 23nd day of January, 1996, by and among SPIRE TECHNOLOGIES, INC., a
Utah corporation ("SPIRE"); SPIRE TECHNOLOGIES SYSTEMS DIVISION, INC., a Utah
corporation ("SPIRE SYSTEMS"); AMACAN RESOURCES CORPORATION, a Utah corporation
("AMACAN"); and XXXX X. XXXXXXX AND XXXXX XXXXXXX, TRUSTEES OF THE XXXX X.
XXXXXXX FAMILY REVOCABLE TRUST DATED JULY 1, 1993, XXXX X. XXXXX AND XXXXXXX X.
XXXXX, TRUSTEES OF THE XXXX X. XXXXX FAMILY REVOCABLE TRUST DATED JULY 1, 1993,
XXXXXXX X. XXXXXXX, an individual, XXXXX X. XXXXXXXXXXX, an individual, XXXXXX
X. BENCH, an individual, and XXXXXXX X. FRESH, an individual (collectively, the
"SPIRE STOCKHOLDERS"); based on the following:
PREMISES
A. The Spire Stockholders are the owners of all of the issued and
outstanding shares of the capital stock of Spire and Spire Systems. It is the
intention of the parties to this Agreement that all of the issued and
outstanding shares of the capital stock of Spire and Spire Systems shall be
acquired by Amacan in exchange solely for voting stock of Amacan.
B. The respective Boards of Directors of Spire, Spire Systems and Amacan
have determined that the exchange and conversion (the "SHARE EXCHANGE") by the
Spire Stockholders of all of the shares of the capital stock of Spire and Spire
Systems for 3,501,883 shares of the common stock of Amacan, $0.25 par value, on
the terms and subject to the conditions set forth in this Agreement, would be
advantageous and beneficial to their respective corporations and stockholders.
C. For United States federal income tax purposes, the parties intend that
the Share Exchange qualify as a reorganization under Section 368(a)(1)(B) of the
Internal Revenue Code of 1986, as amended.
AGREEMENT
NOW, THEREFORE, on the stated premises, which are incorporated herein by
reference, and for and in consideration of the mutual covenants, agreements and
representations hereinafter set forth and the mutual benefits to the parties to
be derived herefrom, Spire, Spire Systems, Amacan and the Spire Stockholders
hereby agree as follows:
ARTICLE I
DEFINITIONS
When used herein, the following terms shall have the meanings indicated:
Section 1.01 AFFILIATE. "Affiliate" of any specified Person means any
other Person, directly or indirectly, controlling or controlled by or under
direct or indirect common control with such specified Person. For the purposes
of this definition, "control" when used with respect to any Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
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Section 1.02 AMACAN. Amacan Resources Corporation, a Utah corporation.
Section 1.03 AMACAN BALANCE SHEET. The balance sheet of Amacan, dated
October 31, 1995, included in the Amacan Schedules and described in Section
5.05(c).
Section 1.04 AMACAN COMMON STOCK. The shares of common stock of Amacan,
$.25 par value.
Section 1.05 AMACAN INDUSTRIES. Amacan Industries Corporation, a Utah
corporation.
Section 1.06 AMACAN INTELLECTUAL PROPERTY RIGHTS. "Amacan Intellectual
Property Rights" shall have the meaning set forth in Section 5.19.
Section 1.07 AMACAN SCHEDULES. The Amacan Disclosure Schedules described
in Section 5.21.
Section 1.08 ARTICLES OF EXCHANGE. The Articles of Share Exchange
executed by Spire, Spire Systems and Amacan, respectively, substantially in the
form attached hereto as Exhibit A and incorporated herein by this reference.
Section 1.09 BUSINESS CONDITION. "Business Condition" with respect to
any Person shall mean the business, financial condition, results of operation,
properties and assets of such Person.
Section 1.10 CLOSING. "Closing" shall have the meaning set forth in
Section 2.03.
Section 1.11 CLOSING DATE. "Closing Date" shall have the meaning set
forth in Section 2.03.
Section 1.12 CODE. The Internal Revenue Code of 1986, as amended.
Section 1.13 DIVISION. The Utah Department of Commerce, Division of
Corporations and Commercial Code.
Section 1.14 EFFECTIVE DATE AND EFFECTIVE TIME . "Effective Date" and
"Effective Time" shall have the respective meanings set forth in Section 2.02.
Section 1.15 ENVIRONMENTAL LAWS. "Environmental Laws" shall mean any and
all laws, statutes, ordinances, judgments, injunctions, decrees, regulations,
rules and orders of any Governmental Authority relating to pollution or the
protection of human health or the environment or to emissions, discharges,
releases or threatened releases of any substance that is regulated by any
Governmental Authority or that has been designated by any Governmental Authority
to be toxic, hazardous, radioactive or otherwise a danger to health or the
environment.
Section 1.16 ERISA. The Employee Retirement Income Security Act of 1974,
as amended.
Section 1.17 EXCHANGE ACT. The Securities Exchange Act of 1934, as
amended.
Section 1.18 GAAP. "GAAP" means generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting
2
Standards Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, which are in
effect on the date of this Agreement.
Section 1.19 GOVERNMENTAL AUTHORITY. "Governmental Authority" means any
federal, state, local or foreign court or governmental, administrative or
regulatory authority or agency.
Section 1.20 HAZARDOUS MATERIAL. "Hazardous Material" shall mean any
substance that is regulated by any Governmental Authority or that has been
designated by any Governmental Authority to be radioactive, toxic, hazardous or
otherwise a danger to health or the environment.
Section 1.21 INFORMATION STATEMENT. The Information Statement of Amacan
described in Section 5.13.
Section 1.22 PERSON. "Person" means any individual, partnership,
corporation, limited liability company, joint venture, association, joint-stock
company, trust, unincorporated organization, government or agency or political
subdivision thereof, or other entity.
Section 1.23 RULE 144. Rule 144 promulgated pursuant to the Securities
Act.
Xxxxxxx 0.00 XXX. Xxx Xxxxxx Xxxxxx Securities and Exchange Commission.
Section 1.25 SECURITIES ACT. The Securities Act of 1933, as amended.
Section 1.26 SHARE EXCHANGE. "Share Exchange" shall have the meaning set
forth in Premise B.
Section 1.27 SPIRE. Spire Technologies, Inc., a Utah corporation.
Section 1.28 SPIRE BALANCE SHEETS. The combined balance sheets of Spire
and Spire Systems, dated October 31, 1995, included in the Spire Schedules and
described in Section 4.05(c).
Section 1.29 SPIRE COMMON STOCK. The shares of common stock of Spire,
$.01 par value.
Section 1.30 SPIRE EXCHANGE RATIO. "Spire Exchange Ratio" shall have the
meaning set forth in Section 3.01(b).
Section 1.31 SPIRE INTELLECTUAL PROPERTY RIGHTS. "Spire Intellectual
Property Rights" shall have the meaning set forth in Section 4.19.
Section 1.32 SPIRE OPTION. "Spire Option" shall have the meaning set
forth in Section 3.03.
Section 1.33 SPIRE OPTION PLAN. The Spire 1995 Stock Option and Award
Plan adopted and maintained by Spire.
Section 1.34 SPIRE SCHEDULES. The Spire Disclosure Schedules described
in Section 4.21.
Section 1.35 SPIRE STOCKHOLDERS. The individuals and trusts identified
on the signature page hereof, who own collectively all of the issued and
outstanding shares of the capital stock of Spire and Spire Systems in the
respective amounts set forth on the signature page hereof.
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Section 1.36 SPIRE SYSTEMS. Spire Technologies Systems Division, Inc., a
Utah corporation.
Section 1.37 SPIRE SYSTEMS COMMON STOCK. The shares of common stock of
Spire Systems, no par value.
Section 1.38 SPIRE SYSTEMS EXCHANGE RATIO. "Spire Systems Exchange
Ratio" shall have the meaning set forth in Section 3.01(c).
Section 1.39 STOCKHOLDERS' MEETING. The special meeting of stockholders
of Amacan described in Section 5.13.
Section 1.40 SUBSIDIARY. "Subsidiary" means any corporation with respect
to which a specified Person (or a Subsidiary thereof) owns a majority of the
common stock or has the power to vote or direct the voting of sufficient
securities to elect a majority of directors.
Section 1.41 UTAH ACT. The Utah Revised Business Corporation Act.
ARTICLE II
THE SHARE EXCHANGE
Section 2.01 EXCHANGE. Subject to the terms and conditions of this
Agreement and the Articles of Exchange, Amacan will acquire all of the issued
and outstanding shares of the capital stock of Spire and Spire Systems in
exchange solely for shares of Amacan Common Stock. The Articles of Exchange
provide, among other things, the mode of effecting the Share Exchange and the
manner and basis of converting each issued and outstanding share of capital
stock of Spire and Spire Systems into shares of Amacan Common Stock. The total
consideration for the acquisition by Amacan of all of the capital stock of Spire
and Spire Systems, subject to all of the terms, covenants, and conditions set
forth herein, shall consist of 3,501,883 shares of Amacan Common Stock.
Section 2.02 EFFECTIVE TIME. Subject to the provisions of this Agreement
and the Articles of Exchange, the Articles of Exchange, together with all
required exhibits and attachments, shall be filed with the Division in
accordance with the Utah Act on the Closing Date. The Share Exchange shall
become effective upon confirmation of such filing of the Articles of Exchange
and such other exhibits and attachments (the time of such filing being referred
to hereinafter as the "EFFECTIVE TIME" and the date of such filing being
referred to hereinafter as the "EFFECTIVE DATE").
Section 2.03 CLOSING. The Closing of the Share Exchange and the other
transactions contemplated herein (the "CLOSING") shall be on a date and at such
time on or prior to March 15, 1996, as the parties may agree (the "CLOSING
DATE"), following the satisfaction of every material term, covenant or condition
set forth herein that is required to be satisfied prior to Closing.
Section 2.04 CLOSING EVENTS. At the Closing,
(a) the parties hereto shall execute and deliver copies of the
Articles of Exchange and all other documents necessary to effectuate the Share
Exchange. All forms shall be acceptable to the parties hereto and their
respective legal counsel and the Articles of Exchange shall be filed with the
Division in accordance with the Utah Act;
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(b) as contemplated pursuant to Section 3.02, the Spire Stockholders
shall transfer and deliver to Amacan certificates evidencing all of the issued
and outstanding shares of Spire Common Stock and Spire Systems Common Stock,
constituting all of the capital stock of Spire and Spire Systems, Amacan shall
obtain and possess all rights in respect thereof, and Spire and Spire Systems
shall become wholly-owned subsidiaries of Amacan;
(c) each of the respective parties hereto shall execute, acknowledge
and deliver (or shall cause to be executed, acknowledged and delivered) any and
all articles of share exchange, certificates, opinions, financial statements,
schedules, agreements, resolutions, rulings or other instruments required by
this Agreement to be so delivered at or prior to the Closing, together with such
other items as may be reasonably requested by the parties hereto and their
respective legal counsel in order to effectuate or evidence the transactions
contemplated hereby;
(d) in addition to the foregoing, each of the parties shall execute
and deliver such additional documents as may reasonably be required in order to
effectuate the transactions herein contemplated in accordance with the
requirements of Section 368(a)(1)(B) of the Code and shall treat such
transactions for all tax purposes consistently with the other parties' treatment
thereof and with such other characterization as a reorganization under such Code
section.
Section 2.05 EFFECT OF SHARE EXCHANGE. At the Effective Time, the Share
Exchange shall have the effects set forth in the Utah Act. Without in any
manner limiting the generality of the foregoing, and subject thereto, (a) the
Spire Stockholders shall acquire 3,501,883 shares of Amacan Common Stock, (b)
Spire and Spire Systems shall become wholly-owned Subsidiaries of Amacan, and
(c) Amacan shall change its name to Spire Technologies International Corporation
or such other name as Amacan, Spire and Spire Systems shall mutually agree.
Section 2.06 TERMINATION
(a) This Agreement, the Share Exchange and the other transactions
contemplated hereby may be terminated at any time prior to the Effective Time:
(i) by the mutual consent of Amacan, Spire and Spire Systems
through action of their respective Boards of Directors; or
(ii) by any of Amacan, Spire or Spire Systems if the Share
Exchange shall not have become effective prior to April 15, 1996, or such
later date as shall have been approved by the Boards of Directors of each
of Amacan, Spire and Spire Systems.
In the event of termination pursuant to this Section 2.06(a), no
obligation, right, remedy or liability shall arise hereunder, and Amacan, Spire
and Spire Systems shall each bear its own costs incurred in connection with the
preparation and execution of this Agreement, the preparation and review of
financial statements required to be delivered pursuant hereto, and the
negotiation of the transactions contemplated hereby.
(b) This Agreement, the Share Exchange and the other transactions
contemplated hereby may be terminated at any time prior to the Effective Time by
action of the Amacan Board of Directors if Spire or Spire Systems shall fail to
comply in any material respect with any of its covenants or agreements contained
in this Agreement or if any of the representations or warranties of Spire or
Spire Systems contained herein shall be inaccurate in any material respect. In
the event of termination pursuant to this Section 2.06(b), no obligation, right,
remedy or liability shall arise
5
hereunder, except that each of Spire and Spire Systems shall bear all of its
own costs and Spire and Spire Systems shall promptly reimburse Amacan for all
reasonable costs incurred by Amacan in connection with the preparation and
execution of this Agreement, the preparation and review of financial
statements required to be delivered pursuant hereto, and the negotiation of
the transactions contemplated hereby.
(c) This Agreement, the Share Exchange and the other transactions
contemplated hereby may be terminated at any time prior to the Effective Time by
joint action of the Boards of Directors of Spire and Spire Systems if Amacan
shall fail to comply in any material respect with any of its covenants or
agreements contained in this Agreement or if any of the representations or
warranties of Amacan contained herein shall be inaccurate in any material
respect. In the event of termination pursuant to this Section 2.06(c), no
obligation, right, remedy or liability shall arise hereunder, except that Amacan
shall bear all of its own costs and shall promptly reimburse Spire and Spire
Systems for all reasonable costs incurred by them in connection with the
preparation and execution of this Agreement, the preparation and review of
financial statements required to be delivered pursuant hereto, and the
negotiation of the transactions contemplated hereby.
Section 2.07 ACCOUNTING FOR TRANSACTIONS. This transaction will be
accounted for as a purchase transaction.
Section 2.08 POST-CLOSING COVENANTS.
(a) Subsequent to the Closing Date, Amacan shall timely file with the
SEC a Current Report on Form 8-K with respect to the consummation of the
transactions contemplated by this Agreement in accordance with the requirements
of Sections 13 and 15 of the Exchange Act.
(b) For a period of at least three years following the Closing Date,
Amacan will at all times comply with all reporting requirements of the Exchange
Act, including timely filing of all periodic reports required under the Exchange
Act and the rules and regulations promulgated thereunder, in order to make
available to the holders of the Amacan Common Stock the provisions of Rule 144
for the resale of the Amacan Common Stock.
(c) Promptly following the Closing Date, the directors and officers
of Amacan shall resign and the Spire Stockholders shall designate five
individuals, including one individual designated by the current Board of
Directors of Amacan, to serve as members of the Amacan Board of Directors with
terms expiring at the 1996 annual meeting of stockholders. Upon such
designation of new members of the Amacan Board of Directors, the new Amacan
Board of Directors shall appoint persons to serve as officers of Amacan in
accordance with the Utah Act and the Articles of Incorporation and Bylaws of
Amacan.
ARTICLE III
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 3.01 CONVERSION OF SECURITIES. As more fully set forth in the
Articles of Exchange, as of the Effective Time, by virtue of the Share Exchange
and without any action on the part of the parties hereto:
(a) AMACAN COMMON STOCK; REVERSE SPLIT. Each share of Amacan Common
Stock issued and outstanding at the Effective Time shall continue to be issued
and outstanding. Each stock certificate of Amacan evidencing ownership of any
shares of Amacan Common Stock
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shall continue to evidence ownership of such shares of Amacan Common Stock.
At the Effective Time, Amacan shall consummate a reverse stock split pursuant
to which each issued and outstanding share of Amacan Common Stock will be
reverse split and converted into one-seventh (0.142857) of a share of Amacan
Common Stock. The other provisions set forth in this Agreement contemplate
the completion of such stock split and assume that such stock split is
effective on the date of execution hereof. The exchange ratios set forth in
Section 3.01(b) and (c) and the number of shares of Amacan Common Stock to be
issued to the Spire Stockholders pursuant to this Section 3.01 have been
determined on a post-split basis.
(b) SPIRE COMMON STOCK. The 87,386 shares of Spire Common Stock
issued and outstanding at the Effective Time, constituting all of the issued and
outstanding capital stock of Spire at the Effective Time, shall be exchanged and
converted, without any action on the part of the holders thereof, into an
aggregate of 3,100,333 shares of Amacan Common Stock, which constitutes an
exchange ratio of 35.4786 shares of Amacan Common Stock for each share of Spire
Common Stock to be exchanged (the "SPIRE EXCHANGE RATIO"). Prior to the
Effective Time, all shares of the capital stock of Spire that are owned directly
or indirectly by Spire, Spire Systems or any Affiliate of Spire other than the
Spire Stockholders shall be cancelled and no capital stock of Amacan or other
consideration shall be delivered in exchange therefor.
(c) SPIRE SYSTEMS COMMON STOCK. The 100,000 shares of Spire Systems
Common Stock issued and outstanding at the Effective Time, constituting all of
the issued and outstanding capital stock of Spire Systems at the Effective Time,
shall be exchanged and converted into an aggregate of 401,550 shares of Amacan
Common Stock, when constitutes an exchange ratio of 4.0155 shares of Amacan
Common Stock for each share of Spire Systems Common Stock to be exchanged (the
"SPIRE SYSTEMS EXCHANGE RATIO"). Prior to the Effective Time, all shares of the
capital stock of Spire Systems that are owned directly or indirectly by Spire,
Spire Systems or any Affiliate of Spire Systems other than the Spire
Stockholders shall be cancelled and no capital stock of Amacan or other
consideration shall be delivered in exchange therefor.
(d) ADJUSTMENT OF EXCHANGE RATIOS. If, between the date of this
Agreement and the Effective Time, (i) the outstanding shares of Amacan Common
Stock shall have been changed into a different number of shares or a different
class by reason of any reclassification, recapitalization, split-up, stock
dividend, stock combination, exchange of shares or readjustment (other than the
one-for-seven reverse stock split referred to in Section 3.01(a) above), or (ii)
Amacan shall, without consideration or for a consideration per share less than
the per share value of the shares of Amacan Common Stock to be issued to the
Spire Stockholders pursuant to Sections 3.01(b) and (c), issue shares of Amacan
Common Stock, the Spire Exchange Ratio and Spire Systems Exchange Ratio shall be
adjusted correspondingly.
(e) FRACTIONAL SHARES. No fractional shares of Amacan Common Stock
shall be issued in connection with the Share Exchange or the reverse split of
the Amacan Common Stock described in Section 3.01(a). If any holder of Spire
Common Stock or Spire Systems Common Stock would otherwise be entitled to a
fractional share of Amacan Common Stock on exchange of such shares or on the
consummation of such reverse split, Amacan shall round the number of shares of
Amacan Common Stock to be issued to such holder to the nearest whole share.
There will be no cash payments in lieu of fractional shares.
3.02 EXCHANGE OF CERTIFICATES.
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(a) AMACAN TO PROVIDE COMMON STOCK. At the Closing, Amacan shall
make available for exchange in accordance with this Article III, through such
reasonable procedures as Amacan may adopt, the shares of Amacan Common Stock
issuable pursuant to Section 3.01 in exchange for the shares of Spire Common
Stock and Spire Systems Common Stock to be exchanged by the Spire Stockholders
as contemplated hereby.
(b) RESTRICTIONS ON TRANSFER. The Amacan Common Stock issued
pursuant to the Share Exchange will not be registered under the Securities Act.
The Amacan Common Stock issued pursuant to the Share Exchange will not be
registered under the Securities Act and may not be sold, transferred, or
otherwise disposed of for value unless it is subsequently registered under the
Securities Act or an exemption from such registration is available. Each
certificate of Amacan Common Stock issued pursuant to the Share Exchange shall
be stamped or otherwise imprinted with a legend substantially in the following
form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") AND ARE "RESTRICTED SECURITIES" WITHIN THE MEANING
OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE SECURITIES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED
WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION OR OTHER COMPLIANCE UNDER THE SECURITIES ACT.
3.03 CONVERSION OF STOCK OPTIONS. Upon the Closing, Amacan shall assume
each and every outstanding employee stock option for shares of Spire Common
Stock (a "SPIRE OPTION") issued pursuant to the Spire Option Plan and all
obligations of Spire under the Spire Option Plan relating to the Spire Options.
In furtherance of the foregoing obligation, Amacan shall reserve for issuance
upon the exercise of such assumed options not less than 650,000 shares of Amacan
Common Stock. Each and every assumed Spire Option (an "ASSUMED OPTION") shall
continue to be on the same terms and conditions of the corresponding Spire
Option except that (i) it will be exercisable for the number of whole shares of
Amacan Common Stock equal to the product obtained by multiplying the number of
shares of Spire Common Stock subject to such Spire Option immediately prior to
the Closing by the Spire Exchange Ratio and rounded down to the nearest whole
number and (ii) the per share exercise price for the shares of Amacan Common
Stock issuable upon exercise of an Assumed Option shall be determined by
dividing the per share exercise price under the corresponding Spire Option by
the Spire Exchange Ratio, and rounding the exercise price up to the nearest one-
hundredth of a cent. The right to receive any Assumed Option may not be
assigned or transferred in any manner except by operation of law, by will or by
the laws of descent, or as otherwise expressly provided under the Spire Option
Plan. Any attempted assignment in violation of this Section 3.03 shall be void.
ARTICLE IV
REPRESENTATIONS, COVENANTS AND WARRANTIES OF SPIRE AND SPIRE SYSTEMS
Except as specifically disclosed in the Spire Schedules which identify the
section of this Agreement to which the disclosure relates, as an inducement to,
and to obtain the reliance of, Amacan, each of Spire and Spire Systems
represents and warrants as follows:
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Section 4.01 ORGANIZATION. Each of Spire and Spire Systems is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Utah and has the corporate power to own all of its properties
and assets and to carry on its business in all material respects as it is now
being conducted, and there is no jurisdiction, domestic or foreign, in which it
is not so qualified in which the character and location of the assets owned by
it or the nature of the business transacted by it requires qualification, except
where failure to do so would not have a material adverse effect on its Business
Condition. Included in the Spire Schedules are complete and correct copies of
the Articles of Incorporation and Bylaws of each of Spire and Spire Systems as
in effect on the date hereof. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated by this Agreement in
accordance with the terms hereof will not, violate any provision of the Articles
of Incorporation or Bylaws of Spire or Spire Systems.
Section 4.02 BINDING AGREEMENT. Each of Spire and Spire Systems has all
requisite corporate power and corporate 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 requisite corporate action of Spire and
Spire Systems, respectively, and have been approved unanimously by the
stockholders of Spire and Spire Systems. This Agreement is a legal, valid and
binding obligation of Spire and Spire Systems, enforceable against each of them
in accordance with its terms, except as enforcement thereof may be limited by
general principles of equity and the effect of applicable bankruptcy,
insolvency, moratorium and other similar laws of general application relating to
or affecting creditor's rights generally, including, without limitation, the
effect of statutory or other laws regarding fraudulent conveyances and
preferential transfers. Included in the Spire Schedules is an accurate and
complete list of the stockholders of Spire and Spire Systems as of the date
hereof, stating the name, record address, and number of shares of Spire Common
Stock and Spire Systems Common Stock held by each.
Section 4.03 CAPITALIZATION. The authorized capitalization of Spire
consists solely of 100,000 shares of Common Stock, $.0.01 par value, of which
87,386 shares are currently issued and outstanding. The authorized
capitalization of Spire Systems consists solely of 1,000,000 shares of Common
Stock, no par value, of which 1,000 shares are currently issued and outstanding.
All issued and outstanding shares of Spire Common Stock and Spire Systems Common
Stock are validly authorized, legally issued, fully paid, nonassessable and not
issued in violation of the preemptive or other right of any Person. Spire
currently holds 12,614 shares of Spire Common Stock in its treasury. Except for
the Spire Options, with respect to which Spire has reserved for issuance upon
the exercise thereof 12,000 shares of Spire Common Stock (and 8,216 shares of
Spire Common Stock are currently issuable with respect thereto), there are no
options, warrants, calls, conversion rights, commitments or agreements of any
character to which Spire or Spire Systems is a party or by which Spire or Spire
Systems may be bound that obligates or may obligate Spire or Spire Systems to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of the capital stock of Spire or Spire Systems or that obligate or may
obligate Spire or Spire Systems to grant, extend or enter into any such option,
warrant, call, conversion right, commitment or agreement.
Section 4.04 SUBSIDIARIES AND PREDECESSORS. Neither Spire nor Spire
Systems has any direct or indirect equity interest in or loans to any
partnership, corporation, limited liability company, joint venture, business
association or other Person. Neither Spire nor Spire Systems has had, since its
inception, any predecessor, as that term is defined under generally accepted
accounting principles.
Section 4.05 FINANCIAL STATEMENTS; TAXES.
9
(a) Included in the Spire Schedules are (i) an audited combined
balance sheet of Spire and Spire Systems as of April 30, 1995 and 1994, and
combined statements of income, changes in stockholders' equity, and cash flows
for the years ended April 30, 1995 and 1994, including the notes thereto, and
(ii) an unaudited combined balance sheet of Spire and Spire Systems as of
October 31, 1995 and the related unaudited statements of income, changes in
stockholders' equity and cash flows for the six months ended October 31, 1995
(collectively, the "SPIRE FINANCIAL STATEMENTS").
(b) All of the Spire Financial Statements have been prepared in
accordance with GAAP consistently applied throughout the periods involved. All
of such balance sheets present fairly, as of their respective dates, the
financial position of Spire and Spire Systems on such date. Neither Spire nor
Spire Systems had, as of the date of any such balance sheet, except as and to
the extent reflected or reserved against therein, any liabilities or obligations
(absolute or contingent) which should be reflected in a balance sheet or the
notes thereto prepared in accordance with GAAP and all assets reflected therein
present fairly the assets of Spire or Spire Systems, as the case may be, in
accordance with GAAP. The statements of income, stockholders' equity and cash
flows present fairly the information required to be set forth therein under
GAAP. Spire and Spire Systems maintain and will continue to maintain standard
systems of accounting established and maintained in a manner permitting the
preparation of financial statements in accordance with GAAP.
(c) Spire and Spire Systems have filed all tax returns and reports as
required by law, both in the U.S. and in any foreign countries in which Spire or
Spire Systems is doing business. All such returns and reports are accurate and
correct in all material respects. Neither Spire nor Spire Systems has any
liabilities with respect to the payment of any federal, state, county, local,
foreign or other taxes (including any deficiencies, interest or penalties)
accrued for or applicable to the periods ended on the dates of the most recent
combined balance sheets of Spire and Spire Systems included in the Spire
Schedules (collectively, the "SPIRE BALANCE SHEETS") and all such dates and
years and periods prior thereto and for which Spire or Spire Systems, as the
case may be, may at said dates have been liable, except for taxes accrued but
not yet due and payable. Included in the Spire Schedules are copies of the
federal and state income tax returns of Spire and Spire Systems filed since
1990, and any foreign returns filed by Spire, Spire Systems or any Affiliate of
Spire or Spire Systems during the same period. Except as set forth in the Spire
Schedules, none of such federal, state or foreign income tax returns has been
examined or is currently being examined by the Internal Revenue Service or any
other Governmental Authority. Neither Spire nor Spire Systems has made any
election pursuant to the Code (other than elections which relate solely to
methods of accounting, depreciation or amortization) which would have a material
adverse effect on Spire or Spire Systems, as the case may be, or their
respective Business Conditions. There are no outstanding agreements or waivers
extending the statutory period of limitation applicable to any tax return of
Spire or Spire Systems.
(d) The books and records, financial and otherwise, of Spire and
Spire Systems are in all material respects complete and correct and have been
made and maintained in accordance with sound business and bookkeeping practices
and, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of Spire and Spire Systems. Each of Spire and Spire
Systems has maintained a system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions have been and are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit the preparation of financial
statements in conformity with GAAP and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's general
or specific
10
authorization; and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals, and appropriate action is
taken with respect to any differences.
(e) Except as set forth in the Spire Balance Sheets or in the notes
thereto, (i) Spire and Spire Systems have good and marketable title to their
respective accounts receivable, and all other debts due or recorded in the
records and books of account of Spire and Spire Systems, free of any security
interests or liens and free of any material defenses, counterclaims and set-
offs; (ii) all such accounts receivable, invoices and debts are actual and bona
fide amounts due Spire or Spire Systems, as the case may be, for the total
dollar amount thereof shown on the books of Spire or Spire Systems, as the case
may be, and resulted from the regular course of their respective businesses; and
(iii) the accounts receivable, invoices and debts set forth on the Spire Balance
Sheets arose in the ordinary course of business and are collectible in full in
all material respects on the continuation of reasonable collection efforts by
personnel of Spire or Spire Systems, as the case may be, and without resorting
to litigation and in any event not later than 90 days after the date billed.
Included in the Spire Schedules is a compete and accurate list of all accounts
receivable of Spire and Spire Systems as of November 30, 1995.
(f) The inventories of Spire and Spire Systems shown on the Spire
Balance Sheets were valued at cost (determined on a first-in, first-out basis)
or market, whichever is lower, with proper allowances for obsolescence, in
accordance with GAAP. Such inventories consist of items which Spire and Spire
Systems believe are of quality and quantity readily usable or saleable in the
ordinary course of business of Spire and Spire Systems, except such amounts as
are revised in accordance with GAAP and accurately reflected on the Spire
Balance Sheets.
Section 4.06 INFORMATION. The information concerning Spire and Spire
Systems set forth in this Agreement and in the Spire Schedules is complete and
accurate in all material respects and does not contain any untrue statement of a
material fact or omit to state a material fact required to make the statements
made, in light of the circumstances under which they were made, not misleading.
No representation or warranty made by Spire or Spire Systems in this Agreement,
nor any document, written information, statement, financial statement,
certificate, schedule or exhibit prepared and furnished or to be prepared and
furnished by Spire or Spire Systems or their representatives pursuant hereto or
in connection with the transactions contemplated hereby (including, without
limitation, information to be included in the Information Statement), contains
or will contain any untrue statement of a material fact, or omits or will omit
to state a material fact necessary to make the statements or facts contained
herein or therein not misleading in light of the circumstances under which they
were furnished. To the knowledge of Spire and Spire Systems, there is no event,
fact or condition that materially and adversely affects the Business Condition
of Spire or Spire Systems, or that reasonably could be expected to do so, that
has not been set forth in this Agreement or in the Spire Schedules.
Section 4.07 NO DEFAULTS. Neither Spire nor Spire Systems is, nor has
either Spire or Spire Systems received notice that it would be with the passage
of time, (i) in violation of any provision of its Articles of Incorporation or
Bylaws, or (ii) to the knowledge of Spire and Spire Systems, in default or
violation of any material term, condition or provision of (A) any material
judgment, decree, order, injunction or stipulation applicable to Spire or Spire
Systems, as the case may be, or (B) any material agreement, note, mortgage,
indenture, contract, lease, instrument, permit, concession, franchise or license
to which Spire or Spire Systems is a party or by which Spire or Spire Systems or
their respective properties or assets may be bound.
11
Section 4.08 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth
in this Agreement or in the Spire Schedules, since the date of the Spire Balance
Sheets, each of Spire and Spire Systems has conducted its business in the
ordinary course and:
(a) there has not been (i) any material adverse change in the
Business Condition of Spire or Spire Systems, or (ii) any damage, destruction or
loss to Spire or Spire Systems (whether or not covered by insurance) materially
and adversely affecting the Business Condition of Spire or Spire Systems;
(b) neither Spire nor Spire Systems has (i) amended its Articles of
Incorporation or Bylaws; (ii) declared or made, or agreed to declare or make,
any payment of dividends or distributions of any assets of any kind whatsoever
to stockholders or purchased or redeemed, or agreed to purchase or redeem, any
of its capital stock; (iii) waived any rights of value which in the aggregate
are extraordinary or material considering the Business Condition of Spire or
Spire Systems, as the case may be; (iv) made any material change in its method
of management, operation or accounting; (v) entered into any other material
transaction; (vi) made any accrual or arrangement for or payment of bonuses or
special compensation of any kind or any severance or termination pay to any
present or former officer, employee or stockholder; (vii) increased the rate of
compensation payable or to become payable by it to any of its officers or
directors or any of its employees whose monthly compensation exceeds $3,000;
(viii) made provision for, or made any increase in, any profit sharing, bonus,
deferred compensation, insurance, pension, retirement or other employee benefit
plan, payment or arrangement made to, for, or with its officers, directors or
employees; or (ix) transferred or granted a right in or relating to any Spire
Intellectual Property Right;
(c) neither Spire nor Spire Systems has (i) granted or agreed to
grant any option, warrant or other right for its capital stock, bonds or other
corporate securities calling for the issuance thereof; (ii) borrowed or agreed
to borrow any funds or incurred, or become subject to, any material obligation
or liability (absolute or contingent) except liabilities incurred in the
ordinary course of business which have been fully disclosed to Amacan; (iii)
paid any material obligation or liability (absolute or contingent) other than
current liabilities reflected in or shown on the Spire Balance Sheets and
current liabilities incurred since that date in the ordinary course of business;
(iv) sold or transferred, or agreed to sell or transfer, any of its assets,
properties, or rights (except assets, properties or rights not used or useful in
its business which, in the aggregate have a value of less than $20,000); (v)
made or permitted any amendment or termination of any contract, agreement or
license to which it is a party if such amendment or termination is material,
considering the Business Condition of Spire or Spire Systems, as the case may
be; (vi) issued, delivered, or agreed to issue or deliver any capital stock,
bonds or other corporate securities including debentures (whether authorized and
unissued or held as treasury stock); (vii) created or assumed any mortgage,
pledge, security interest, lien or other encumbrance on any asset except in the
ordinary course of business consistent with past practice; (viii) made any loan,
advance or capital contribution to or investment in any Person other than travel
loans or advances made in the ordinary course of business of Spire or Spire
Systems, as the case may be, in an aggregate amount which does not exceed $2,000
at any time; or (ix) disclosed to third parties any confidential or proprietary
information respecting its services or marketing procedures or practices,
methods of pricing, or other data material to the Business Condition of Spire or
Spire Systems, as the case may be; and
(d) to the best knowledge of Spire and Spire Systems, neither Spire
nor Spire Systems has become subject to any law or regulation which materially
and adversely affects, or in the future may materially and adversely affect, the
Business Condition of Spire or Spire Systems.
12
Section 4.09 TITLE AND RELATED MATTERS.
(a) Except as disclosed in the Spire Balance Sheets, each of Spire
and Spire Systems has good and marketable title to all its properties,
inventory, know-how, interests in property and assets, both real and personal,
which are reflected in the Spire Balance Sheets or were acquired after that date
(except those sold or otherwise disposed of since such date in the ordinary
course of business) or are used in the business of Spire or Spire Systems, as
the case may be, free and clear of all mortgages, security interests, royalties,
liens, pledges, charges or encumbrances, except (i) statutory liens or claims
not yet delinquent; (ii) such imperfections of title and easements as do not and
will not materially detract from or interfere with the present or proposed use
of the properties subject thereto or affected thereby or otherwise materially
impair present business operations on such properties; and (iii) as completely
and accurately described in the Spire Schedules.
(b) Included in the Spire Schedules is an accurate and complete list
of all (i) real property owned by Spire or Spire Systems or used in their
respective businesses, and (ii) personal property owned by Spire or Spire
Systems or used in their respective businesses and having a purchase price of
over $2,000. The Spire Schedules contain a complete and accurate description of
any mortgage, financing instrument, or other encumbrance to the title to such
properties. All real and personal property owned by Spire or Spire Systems or
used in either of their businesses is in a state of good maintenance and repair
and is adequate and suitable for the purposes for which it is presently being
used.
(c) Included in the Spire Schedules are details of all leases for
real and personal property to which Spire or Spire Systems is a party,
identifying the real or personal property involved, the amount of the monthly
or other period payment due thereunder, a notation of any additional charges,
the expiration date and any residual or similar payment required on
expiration of the lease in order to acquire ownership of the leased property.
Except as disclosed in the Spire Schedules, each such lease is in full force
and effect; all rents and additional rents due to date on each such lease
have been paid; in each case, the lessee has been in peaceable possession
since the commencement of the original term of such lease and is not in
default thereunder and no waiver, indulgence or postponement of the lessee's
obligation thereunder has been granted by the lessor; and there exists no
event of default or event, occurrence, condition or act, which, with the
giving of notice, the lapse of time, or the happening of any further event or
condition, would become a default under such lease. Neither Spire nor Spire
Systems has violated any of the terms or conditions under any such lease in
any material respect and, to the best knowledge, information and belief of
Spire and Spire Systems, all of the covenants to be performed by any other
party under any such lease have been fully performed. The property leased by
Spire and Spire Systems is in a state of good maintenance and repair and is
adequate and suitable for the purposes for which it is presently being used.
Section 4.10 LITIGATION AND PROCEEDINGS. There is no action, suit or
proceeding pending or, to the knowledge of Spire or Spire Systems, threatened by
or against Spire or Spire Systems, or any of their respective officers,
directors or shareholders, affecting Spire, Spire Systems or their respective
properties, at law or in equity, before any court or other Governmental
Authority or before any arbitrator of any kind.
Section 4.11 CONTRACTS.
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(a) Included in the Spire Schedules is a description of every
material contract, agreement, instrument, license, arrangement or commitment to
which Spire or Spire Systems is a party or by which any of their respective
properties are bound;
(b) Except as described in this Agreement or in the Spire Schedules,
neither Spire nor Spire Systems is a party to or bound by, and none of the
properties of Spire or Spire Systems are subject to, any contract, agreement,
other commitment or instrument or any charter or other corporate restriction or
any judgment, order, writ, injunction, decree or award which materially and
adversely affects, or in the future may (as far as Spire and Spire Systems can
now foresee) materially and adversely affect, the Business Condition of Spire or
Spire Systems;
(c) Except as included or described in the Spire Schedules, neither
Spire nor Spire Systems is a party to any oral or written (i) contract for the
employment of any officer, director or employee which is not terminable on 30
days (or less) notice; (ii) profit sharing, bonus, deferred compensation, stock
option, severance pay, pension benefit or retirement plan, agreement or
arrangement covered by Title IV of ERISA; (iii) agreement, contract or indenture
relating to the borrowing of money; (iv) guarantee of any obligation for the
borrowing of money or otherwise, excluding endorsements made for collection and
other guarantees of obligations, which, in the aggregate do not exceed $10,000;
(v) consulting or other similar contract with an unexpired term of more than one
year or providing for payments in excess of $10,000 in the aggregate; (vi)
collective bargaining agreement; (vii) agreement with any present or former
officer or director of Spire or Spire Systems; or (viii) contract, agreement or
other commitment involving payments by it of more than $20,000 in the aggregate;
and
(d) Each contract, agreement, arrangement and commitment listed or
described in the Spire Schedules pursuant to this Section 4.11 is valid and
binding on Spire or Spire Systems, as the case may be, and is in full force and
effect, and, except as otherwise disclosed in this Agreement or the Spire
Schedules, neither Spire nor Spire Systems nor, to the knowledge of Spire and
Spire Systems, any other party thereto has breached any provision of, or is in
default in any material respect under the terms of, any such contract,
agreement, arrangement or commitment, and there is no event of default or other
event which, with notice or lapse of time or both, would constitute a default in
any material respect under any such contract, agreement, arrangement or
commitment.
Section 4.12 CUSTOMER COMPLAINTS. Except as set forth in the Spire
Schedules, since inception, neither Spire nor Spire Systems has received any
material customer complaints concerning its services, other than minor,
nonrecurring problems in the normal course of business. The Spire Balance
Sheets reflect adequate reserves for all known or reasonably anticipated
customer complaints, credits, setoffs and similar items. Included in the Spire
Schedules is a copy of each express warranty and related disclaimer or
limitation of warranty used in connection with products sold or services
provided by Spire or Spire Systems since inception, indicating for each such
warranty, limitation or disclaimer an accurate description of the products or
services to which it relates.
Section 4.13 AUTHORIZATIONS. Except as set forth in the Spire Schedules,
to the best knowledge of Spire and Spire Systems, each of Spire and Spire
Systems possesses all licenses, franchises, permits and other governmental
authorizations, domestic and foreign, that are legally required to enable them
to conduct their respective businesses in all material respects as conducted on
the date hereof or as presently foreseeable in connection therewith. To the
knowledge of Spire and Spire Systems, the execution and delivery of this
Agreement does not, and the consummation
14
of the transactions contemplated hereby will not, conflict with or result in
any violation of any material statute, law, rule, regulation, judgment,
order, decree or ordinance applicable to Spire, Spire Systems or their
respective properties or assets, or conflict with or result in any breach or
default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any
obligation or to loss of a material benefit under, or result in the creation
of a material lien or encumbrance on any of the properties or assets of Spire
or Spire Systems pursuant to (i) any provision of the Articles of
Incorporation or Bylaws of Spire or Spire Systems or (ii) except as
completely and accurately described in the Spire Schedules, any material
agreement, contract, note, mortgage, indenture, lease, instrument, permit,
concession, franchise or license to which either Spire or Spire Systems is a
party or by which any of their respective properties or assets may be bound
or affected. To the knowledge of Spire and Spire Systems, no consent,
approval, order or authorization of, or registration, declaration or filing
with, any Governmental Authority is required by or with respect to Spire or
Spire Systems in connection with the execution and delivery of this Agreement
by Spire and Spire Systems or the consummation by Spire and Spire Systems of
the transactions contemplated hereby or thereby, except for (y) the filing of
the Articles of Exchange with the Division and appropriate documents with the
relevant Governmental Authorities of other jurisdictions in which Spire or
Spire Systems is qualified to do business, and (z) such consents, approvals,
orders, authorizations, registrations, declarations and filings which if not
obtained or made would not have a material adverse effect on the Business
Condition of Spire or Spire Systems.
Section 4.14 COMPLIANCE WITH LAWS AND REGULATIONS. Except as set forth
in the Spire Schedules and to the best of each of their knowledge, each of Spire
and Spire Systems has complied with all applicable statutes and regulations of
any Governmental Authority, except to the extent that noncompliance would not
materially and adversely affect the Business Condition of Spire or Spire Systems
or except to the extent that noncompliance would not result in the incurrence of
any material liability for Spire or Spire Systems. To the knowledge of Spire or
Spire Systems, there are no material judgments or orders, injunctions, decrees,
stipulations or awards (whether rendered by a court or administrative agency or
by arbitration) against Spire or Spire Systems or any of their respective
properties. Included in the Spire Schedules is a copy of each letter of
inquiry, review or investigation or other writing from or to any Governmental
Authority evidencing a violation or possible or alleged violation of any of the
foregoing.
Section 4.15 INSURANCE. Included in the Spire Schedules is a complete
list of all insurance policies which Spire or Spire Systems maintains respecting
their respective services, business, properties and employees. Such policies
are in full force and effect and are free from any right of termination by the
insurance carriers. All premiums payable under all such policies have been paid
and Spire and Spire Systems are otherwise in full compliance with the terms of
such policies. Except as set forth in the Spire Schedules, all of the insurable
properties of Spire and Spire Systems are insured for their respective benefits
in the amount of their full replacement value (subject to reasonable
deductibles) against losses due to fire and other casualty, with extended
coverage and coverage against other risks customarily insured against by persons
operating similar properties in the localities where such properties are
located, and under valid and enforceable policies issued by insurers of
recognized responsibility. Such policies will be outstanding and in full force
at the Closing Date. Included in the Spire Schedules is a complete and accurate
list of all insurance policies carried by Spire or Spire Systems, showing for
each type of coverage the policy limits, principal exclusions, deductibles and
insurer. Neither Spire nor Spire Systems knows of any threatened termination
of, or material premium increase with respect to, any of such policies.
15
Section 4.16 TRANSACTIONS WITH AFFILIATES. Set forth in the Spire
Schedules is a description of every material contract, agreement or arrangement
between Spire or Spire Systems and any person who is or has ever been an officer
or director of Spire or Spire Systems or person owning of record, or known by
Spire or Spire Systems to own beneficially, five percent or more of the issued
and outstanding Spire Common Stock or Spire Systems Common Stock, as the case
may be, and which is to be performed in whole or in part after the date hereof
or was entered into within three years before the date hereof. In all such
circumstances, the contract, agreement or arrangement was for a bona fide
business purpose of Spire or Spire Systems, as the case may be, and the amount
paid or received, whether in cash, in services, or in kind, is, has been during
the full term thereof, and is required to be during the unexpired portion of the
term thereof, no less favorable to Spire or Spire Systems, as applicable, than
terms available from otherwise unrelated parties in arm's length transactions.
The Spire Schedules also include a description of any commitment by Spire or
Spire Systems, whether written or oral, to lend any funds to, borrow any money
from, or enter into any other material transaction with, any Affiliate of Spire
or Spire Systems.
Section 4.17 MINUTE BOOK. The minute books of Spire and Spire Systems
contain, and will contain at the Closing Date, evidence of the due election and
incumbency of the Board of Directors and officers of Spire and Spire Systems
executing this Agreement or any document, certificate, or other instrument
executed in order to consummate the transactions contemplated hereby.
Section 4.18 LABOR AGREEMENTS AND ACTIONS. Neither Spire nor Spire
Systems is bound by or subject to (and none of their respective assets or
properties is bound by or subject to) any written or oral, express or implied,
contract, commitment or arrangement with any labor union, and no labor union has
requested nor, to the knowledge of Spire or Spire Systems, has sought to
represent any of the employees, representatives, or agents of Spire or Spire
Systems. There is no strike or other labor dispute involving Spire or Spire
Systems pending, or to the knowledge of Spire or Spire Systems threatened,
which could have a material adverse effect on the Business Condition of Spire or
Spire Systems (as such business is presently conducted and as it is proposed to
be conducted), nor is Spire or Spire Systems aware of any labor organization
activity involving its employees. Neither Spire nor Spire Systems is aware that
any officer or key employee, or that any group of key employees, intends to
terminate their employment with Spire or Spire Systems, nor does Spire or Spire
Systems have a present intention to terminate the employment of any of the
foregoing. The employment of each officer and employee of Spire and Spire
Systems is terminable at the will of Spire or Spire Systems, as the case may be.
Section 4.19 INTELLECTUAL PROPERTY. Each of Spire and Spire Systems
owns, or is licensed or otherwise entitled to use, all patents, trademarks,
trade names, service marks, copyrights and any applications therefore,
maskworks, net lists, schematics, technology, know-how, computer software
programs or applications and tangible or intangible proprietary information or
materials that in any material respect are used or currently proposed to be used
in the business of Spire or Spire Systems as currently conducted or as currently
proposed to be conducted by Spire or Spire Systems, as the case may be (the
"SPIRE INTELLECTUAL PROPERTY RIGHTS"). The Spire Schedules list all patents,
trademarks, registered and material unregistered copyrights, trade names and
service marks, and any applications therefore, included in the Spire
Intellectual Property Rights, together with a list of all currently marketed
software products of Spire and Spire Systems and an indication as to which, if
any, of such software products have been registered for copyright protection
with the United States Copyright Office or any foreign office. Neither Spire
nor Spire Systems is, nor as a result of the execution and delivery of this
Agreement or the performance of its obligations hereunder will be, in violation
of any license, sublicense or agreement which is material to the Business
Condition of Spire or Spire Systems, as the case may be. Except as set forth in
the Spire Schedules, no claims
16
with respect to the Spire Intellectual Property Rights have been asserted or,
to the knowledge of Spire or Spire Systems, are threatened by any Person, nor
does Spire or Spire Systems know of any valid grounds for any bona fide claim
(i) to the effect that the manufacture, sale or use of any product as now
used or offered or proposed for use or sale by Spire or Spire Systems
infringes on any copyright, patent or trade secret, (ii) against the use by
Spire or Spire Systems of any trademark, trade name, trade secret, copyright,
technology, know-how or computer software program or application used in the
business of Spire and Spire Systems as currently conducted or as proposed to
be conducted, or (iii) challenging the ownership, validity or effectiveness
of any of the Spire Intellectual Property Rights. All registered trademarks
and copyrights held by Spire or Spire Systems are valid and subsisting. To
the knowledge of Spire and Spire Systems, there is no material unauthorized
use, infringement or misappropriation of any of the Spire Intellectual
Property Rights by any third party, including any employee or former employee
of Spire or Spire Systems. No Spire Intellectual Property Right is subject
to any outstanding order, judgment, decree, stipulation or agreement
restricting in any manner the licensing thereof by Spire or Spire Systems, as
applicable. Neither Spire nor Spire Systems has entered into any agreement
to indemnify any other Person against any charge of infringement of any Spire
Intellectual Property Right.
Section 4.20 ENVIRONMENTAL MATTERS. Neither Spire nor Spire Systems has
transported, stored, used, manufactured, released or exposed its employees or
any other Person to, any Hazardous Material in violation of any applicable
statute, rule, regulation, order or law, except as would not have a material
adverse effect on the Business Condition of Spire or Spire Systems. Spire and
Spire Systems have obtained all material permits, licenses and other
authorizations required to be obtained by either of them under any Environmental
Law. Spire and Spire Systems (a) are in compliance with all terms and
conditions of such permits, licenses and authorizations, and (b) are in
compliance in all material respects with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules and
timetables contained in the Environmental Laws or contained in any regulation,
code, plan, order, decree, judgment, notice or demand letter issued, entered,
promulgated or approved thereunder, except as would not have a material adverse
effect on the Business Conditions of Spire and Spire Systems. Neither Spire nor
Spire Systems has received any notice, nor does either Spire or Spire Systems
possess any knowledge, of any past or present condition or practice of the
businesses conducted by Spire, Spire Systems or their Affiliates which forms or
could form the basis of any material claim, action, suit, proceeding, hearing or
investigation against Spire or Spire Systems, arising out of the manufacture,
processing, distribution, use, treatment, storage, spill, disposal, transport or
handling, or the emission, discharge, release or threatened release into the
environment, of any Hazardous Material.
Section 4.21 SPIRE SCHEDULES. Spire and Spire Systems have delivered to
Amacan the schedules described in this Article IV, which are collectively
referred to as the "SPIRE SCHEDULES" and which consist of separate schedules
dated as of the date of execution of this Agreement and instruments and data as
of such date, all certified by the chief executive officer of Spire and Spire
Systems as complete, true and accurate. Spire and Spire Systems shall cause the
Spire Schedules and the instruments and data delivered to Amacan hereunder to be
updated after the date hereof up to and including a specified date not more than
three business days prior to the Closing Date. Such updated Spire Schedules,
certified in the same manner as the original Spire Schedules, shall be delivered
prior to the Closing and as a condition precedent to the obligation of Amacan to
close.
ARTICLE V
REPRESENTATIONS, COVENANTS AND WARRANTIES OF AMACAN
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Except as specifically disclosed in the Amacan Schedules which identify the
section of this Agreement to which the disclosure relates, as an inducement to,
and to obtain the reliance of, Spire and Spire Systems, Amacan represents and
warrants as follows:
Section 5.01 ORGANIZATION. Amacan is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Utah and
has the corporate power to own all of its properties and assets and to carry on
its business in all material respects as it is now being conducted, and there is
no jurisdiction, domestic or foreign, in which it is not so qualified in which
the character and location of the assets owned by it or the nature of the
business transacted by it requires qualification, except where failure to do so
would not have a material adverse effect on the Business Condition of Amacan.
Included in the Amacan Schedules are complete and correct copies of the Articles
of Incorporation and Bylaws of Amacan as in effect on the date hereof. The
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated by this Agreement in accordance with the terms hereof
will not, violate any provision of the Articles of Incorporation or Bylaws of
Amacan.
Section 5.02 BINDING AGREEMENT. Amacan has all requisite corporate power
and corporate 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 requisite corporate action, subject to approval of Amacan's
stockholders. This Agreement is a legal, valid and binding obligation of
Amacan, enforceable against it in accordance with its terms, except as
enforcement thereof may be limited by general principles of equity and the
effect of applicable bankruptcy, insolvency, moratorium and other similar laws
of general application relating to or affecting creditor's rights generally,
including, without limitation, the effect of statutory or other laws regarding
fraudulent conveyances and preferential transfers. Included in the Amacan
Schedules is an accurate and complete record stockholder list as of December 20,
1995, prepared by Amacan's transfer agent, stating the name, record address, and
number of shares of Amacan Common Stock held by each.
Section 5.03 CAPITALIZATION. The authorized capitalization of Amacan
consists solely of 8,000,000 shares of Amacan Common Stock, $.0.25 par value per
share, of which 389,102 shares shall be issued and outstanding after giving
effect to the reverse split described in Section 3.01(a). All issued and
outstanding shares of Amacan Common Stock are validly authorized, legally
issued, fully paid, nonassessable and not issued in violation of the preemptive
or other rights of any Person. There are no shares of Amacan Common Stock held
in Amacan's treasury. There are no options, warrants, calls, conversion rights,
commitments or agreements of any character to which Amacan is a party or by
which Amacan may be bound that obligate or may obligate Amacan to issue, deliver
or sell, or cause to be issued, delivered or sold, additional shares of the
capital stock of Amacan or that obligate or may obligate Amacan to grant, extend
or enter into any such option, warrant, call, conversion right, commitment or
agreement.
Section 5.04 SUBSIDIARIES AND PREDECESSORS. Amacan Industries is a
corporation duly organized, validity existing, and in good standing under the
laws of the State of Utah and has the corporate power to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted. The authorized capitalization of Amacan Industries
consists solely of 500,000 shares of common stock, $.10 par value per share, of
which 25,000 shares are issued and outstanding and are held by Amacan. All
issued and outstanding shares of the capital stock of Amacan Industries are
validly authorized, legally issued, fully paid, nonassessable and not issued in
violation of the preemptive or other right of any Person. There are no options,
warrants, calls, conversion rights, commitments or agreements of any character
to which Amacan Industries is a
18
party or by which Amacan Industries may be bound that obligate or may
obligate Amacan Industries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of the capital stock of Amacan
Industries or that obligate or may obligate Amacan Industries to grant,
extend or enter into any such option, warrant, call, conversion right,
commitment or agreement. Except as described in this Section 5.04 or the
Amacan Schedules, Amacan has no direct or indirect equity interest in or
loans to any partnership, corporation, limited liability company, joint
venture, business association or other Person. Since its inception, Amacan
has not had any predecessor, as that term is defined under GAAP.
Section 5.05 FINANCIAL STATEMENTS; TAXES.
(a) Included in the Amacan Schedules are (i) audited balance sheets
of Amacan as of April 30, 1995 and 1994, and statements of operations,
stockholders' equity and cash flows for the years ended April 30, 1995 and 1994,
including the notes thereto, and (ii) an unaudited consolidated balance sheet of
Amacan as of October 31, 1995, and the related unaudited statement of earnings
for the six months ended October 31, 1995 (collectively, the "AMACAN FINANCIAL
STATEMENTS").
(b) All of the Amacan Financial Statements have been prepared in
accordance with GAAP consistently applied throughout the periods involved. All
of such balance sheets present fairly, as of their respective dates, the
financial position of Amacan on such date. Amacan did not have, as the date of
any of such balance sheet, except as and to the extent reflected or reserved
against therein, any liabilities or obligations (absolute or contingent) which
should be reflected in a balance sheet or the notes thereto prepared in
accordance with GAAP and all assets reflected therein present fairly the assets
of Amacan in accordance with GAAP. The statements of income, stockholders'
equity and cash flows present fairly the information required to be set forth
therein under GAAP. Amacan maintains and will continue to maintain a standard
system of accounting established and maintained in a manner permitting the
preparation of financial statements in accordance with GAAP.
(c) Amacan has filed all tax returns and reports as required by law.
All such returns and reports are accurate and correct in all material respects.
Amacan has no liabilities with respect to the payment of any federal, state,
county, local, foreign or other taxes (including any deficiencies, interest or
penalties) accrued for or applicable to the period ended on the date of the most
recent balance sheet included in the Amacan Schedules (the "AMACAN BALANCE
SHEET") and all such dates and years and periods prior thereto and for which
Amacan may at said date have been liable, except for taxes accrued but not yet
due and payable. Included in the Amacan Schedules are copies of the federal and
state income tax returns of Amacan filed since 1990. Except as set forth in the
Amacan Schedules, none of such federal or state income tax returns has been
examined or is currently being examined by the Internal Revenue Service or any
other Governmental Authority. Amacan has not made any election pursuant to the
Code (other than elections which relate solely to methods of accounting,
depreciation or amortization) which would have a material adverse effect on
Amacan or its Business Condition. There are no outstanding agreements or
waivers extending the statutory period of limitation applicable to any tax
return of Amacan.
(d) The books and records, financial and otherwise, of Amacan are in
all material respects complete and correct and have been made and maintained in
accordance with sound business and bookkeeping practices and, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the
assets of Amacan. Amacan has maintained a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions have
been and
19
are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit the
preparation of financial statements in conformity with GAAP and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals, and appropriate action is taken with respect to any
differences.
(e) Except as set forth in the Amacan Balance Sheet or in the notes
thereto, (i) Amacan has good and marketable title to its accounts receivable,
and all other debts due or recorded in the records and books of account of
Amacan, free of any security interests or liens and free of any material
defenses, counterclaims and set-offs; (ii) all such accounts receivable,
invoices and debts are actual and bona fide amounts due Amacan for the total
dollar amount thereof shown on the books of Amacan and resulted from the regular
course of its business; and (iii) the accounts receivable, invoices and debts
set forth on the Amacan Balance Sheet arose in the ordinary course of business
and are collectible in full in all material respects on the continuation of
reasonable collection efforts by Amacan personnel and without resorting to
litigation and in any event not later than 90 days after the date billed.
Included in the Amacan Schedules is a complete and accurate list of all accounts
receivable to Amacan as of October 31, 1995.
Section 5.06 INFORMATION. The information concerning Amacan set forth in
this Agreement and in the Amacan Schedules is complete and accurate in all
material respects and does not contain any untrue statement of a material fact
or omit to state a material fact required to make the statements made, in light
of the circumstances under which they were made, not misleading. No
representation or warranty made by Amacan in this Agreement, nor any document,
written information, statement, financial statement, certificate, schedule or
exhibit prepared and furnished or to be prepared and furnished by Amacan or its
representatives pursuant hereto or in connection with the transactions
contemplated hereby (including, without limitation, information to be included
in the Information Statement), contains or will contain any untrue statement of
a material fact, or omits or will omit to state a material fact necessary to
make the statements or facts contained herein or therein not misleading in light
of the circumstances under which they were furnished. To the knowledge of
Amacan, there is no event, fact or condition that materially and adversely
affects the Business Condition of Amacan, or that reasonably could be expected
to do so, that has not been set forth in this Agreement or in the Amacan
Schedules.
Section 5.07 NO DEFAULTS. Amacan is not, nor has it received notice that
it would be with the passage of time, (i) in violation of any provision of its
Articles of Incorporation or Bylaws, or (ii) to the knowledge of Amacan, in
default or violation of any material term, condition or provision of (A) any
material judgment, decree, order, injunction or stipulation applicable to
Amacan, or (B) any material agreement, note, mortgage, indenture, contract,
lease, instrument, permit, concession, franchise or license to which Amacan is a
party or by which Amacan or its properties or assets may be bound.
Section 5.08 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth
in this Agreement or in the Amacan Schedules, since the date of the Amacan
Balance Sheet, Amacan has conducted its business in the ordinary course and:
(a) there has not been (i) any material adverse change in the
Business Condition of Amacan, or (ii) any damage, destruction or loss to Amacan
(whether or not covered by insurance) materially and adversely affecting the
Business Condition of Amacan;
20
(b) Amacan has not (i) amended its Articles of Incorporation or
Bylaws; (ii) declared or made, or agreed to declare or make, any payment of
dividends or distributions of any assets of any kind whatsoever to stockholders
or purchased or redeemed, or agreed to purchase or redeem, any of its capital
stock; (iii) waived any rights of value which in the aggregate are extraordinary
or material considering the Business Condition of Amacan; (iv) made any material
change in its method of management, operation or accounting; (v) entered into
any other material transaction; (vi) made any accrual or arrangement for or
payment of bonuses or special compensation of any kind or any severance or
termination pay to any present or former officer, employee or stockholder; (vii)
increased the rate of compensation payable or to become payable by it to any of
its officers or directors or any of its employees whose monthly compensation
exceeds $3,000; (viii) made provision for, or made any increase in, any profit
sharing, bonus, deferred compensation, insurance, pension, retirement or other
employee benefit plan, payment or arrangement made to, for, or with its
officers, directors or employees; or (ix) transferred or granted a right in or
relating to any Amacan Intellectual Property Right;
(c) Amacan has not (i) granted or agreed to grant any option,
warrant or other right for its capital stock, bonds or other corporate
securities calling for the issuance thereof; (ii) borrowed or agreed to borrow
any funds or incurred, or become subject to, any material obligation or
liability (absolute or contingent) except liabilities incurred in the ordinary
course of business which have been fully disclosed to Spire; (iii) paid any
material obligation or liability (absolute or contingent) other than current
liabilities reflected in or shown on the Amacan Balance Sheet and current
liabilities incurred since that date in the ordinary course of business; (iv)
sold or transferred, or agreed to sell or transfer, any of its assets,
properties, or rights (except assets, properties or rights not used or useful in
its business which, in the aggregate have a value of less than $20,000); (v)
made or permitted any amendment or termination of any contract, agreement or
license to which it is a party if such amendment or termination is material,
considering the Business Condition of Amacan; (vi) issued, delivered, or agreed
to issue or deliver any capital stock, bonds or other corporate securities
including debentures (whether authorized and unissued or held as treasury
stock); (vii) created or assumed any mortgage, pledge, security interest, lien
or other encumbrance on any asset except in the ordinary course of business
consistent with past practice; (viii) made any loan, advance or capital
contribution to or investment in any Person other than travel loans or advances
made in the ordinary course of business of Amacan, in an aggregate amount which
does not exceed $2,000 at any time; or (ix) disclosed to third parties any
confidential or proprietary information respecting its services or marketing
procedures or practices, methods of pricing, or other data material to the
Business Condition of Amacan; and
(d) To the best knowledge of Amacan, it has not become subject to any
law or regulation which materially and adversely affects, or in the future may
materially and adversely affect, the Business Condition of Amacan.
Section 5.09 TITLE AND RELATED MATTERS.
(a) Except as disclosed in the Amacan Balance Sheet, Amacan has good
and marketable title to all its properties, inventory, know-how, interests in
property and assets, both real and personal, which are reflected in the Amacan
Balance Sheet or were acquired after that date (except those sold or otherwise
disposed of since such date in the ordinary course of business) or are used in
Amacan's business, free and clear of all mortgages, security interests,
royalties, liens, pledges, charges or encumbrances, except (i) statutory liens
or claims not yet delinquent; (ii) such imperfections of title and easements as
do not and will not materially detract from or interfere with the present or
proposed use of the properties subject thereto or affected thereby or otherwise
21
materially impair present business operations on such properties; and (iii) as
completely and accurately described in the Amacan Schedules.
(b) Included in the Amacan Schedules is an accurate and complete
list of all (i) real property owned by Amacan or used in its business, and (ii)
personal property owned by Amacan or used in its business and having a purchase
price of over $2,000. The Amacan Schedules contain a complete and accurate
description of any mortgage, financing instrument or other encumbrance to the
title to such properties. All real and personal property owned by Amacan or
used in its business is in a state of good maintenance and repair and is
adequate and suitable for the purposes for which it is presently being used.
(c) Included in the Amacan Schedules are details of all leases for
real and personal property to which Amacan is a party, identifying the real or
personal property involved, the amount of the monthly or other period payment
due thereunder, a notation of any additional charges, the expiration date and
any residual or similar payment required on expiration of the lease in order to
acquire ownership of the leased property. Except as disclosed in the Amacan
Schedules, each such lease is in full force and effect; all rents and additional
rents due to date on each such lease have been paid; in each case, the lessee
has been in peaceable possession since the commencement of the original term of
such lease and is not in default thereunder and no waiver, indulgence or
postponement of the lessee's obligation thereunder has been granted by the
lessor; and there exists no event of default or event, occurrence, condition or
act, which, with the giving of notice, the lapse of time, or the happening of
any further event or condition, would become a default under such lease. Amacan
has not violated any of the terms or conditions under any such lease in any
material respect and, to the best of Amacan's knowledge, information and belief,
all of the covenants to be performed by any other party under any such lease
have been fully performed. The property leased by Amacan is in a state of good
maintenance and repair and is adequate and suitable for the purposes for which
it is presently being used.
Section 5.10 LITIGATION AND PROCEEDINGS. There is no action, suit or
proceeding pending or, to the knowledge of Amacan, threatened by or against
Amacan, or any of its officers, directors or stockholders, affecting Amacan or
its properties, at law or in equity, before any court or other Governmental
Authority, or before any arbitrator of any kind.
Section 5.11 CONTRACTS.
(a) Included in the Amacan Schedules is a description of every
material contract, agreement, instrument, license, arrangement or commitment to
which Amacan is a party or by which its properties are bound;
(b) Except as described in this Agreement or in the Amacan Schedules,
Amacan is not a party to or bound by, and the properties of Amacan are not
subject to, any contract, agreement, other commitment or instrument or any
charter or other corporate restriction or any judgment, order, writ, injunction,
decree or award which materially and adversely affects, or in the future may (as
far as Amacan can now foresee) materially and adversely affect, the Business
Condition of Amacan;
(c) Except as included or described in the Amacan Schedules, Amacan
is not a party to any oral or written (i) contract for the employment of any
officer, director or employee which is not terminable on 30 days (or less)
notice; (ii) profit sharing, bonus, deferred compensation, stock option,
severance pay, pension benefit or retirement plan, agreement or arrangement
covered
22
by Title IV of ERISA; (iii) agreement, contract or indenture relating to the
borrowing of money; (iv) guarantee of any obligation for the borrowing of
money or otherwise, excluding endorsements made for collection and other
guarantees of obligations, which, in the aggregate do not exceed $10,000; (v)
consulting or other similar contract with an unexpired term of more than one
year or providing for payments in excess of $10,000 in the aggregate; (vi)
collective bargaining agreement; (vii) agreement with any present or former
officer or director of Amacan; or (viii) other contract, agreement or other
commitment involving payments by it of more than $20,000 in the aggregate; and
(d) Each contract, agreement, arrangement and commitment listed or
described in the Amacan Schedules pursuant to this Section 5.11 is valid and
binding on Amacan and is in full force and effect, and, except as otherwise
disclosed in this Agreement or the Amacan Schedules, neither Amacan nor, to the
knowledge of Amacan, any other party thereto has breached any provision of, or
is in default under the terms of, any such contract, agreement, arrangement or
commitment, and there is no event of default or other event which, with notice
or lapse of time or both, would constitute a default in any material respect
under any such contract, agreement, arrangement or commitment.
Section 5.12 SEC DOCUMENTS. Included in the Amacan Schedules are copies
of Amacan's Annual Report on Form 10-KSB for the fiscal years ended April 30,
1995, 1994 and 1993, respectively, and all other reports filed or required to be
filed with the SEC since May 1, 1992 (collectively, the "AMACAN SEC DOCUMENTS"),
which are all the documents (other than preliminary material) that Amacan was
required to file with the SEC since such date. As of their respective filing
dates, the Amacan SEC Documents complied in all material respects with the
requirements of the Exchange Act or the Securities Act, as the case may be, and
none of the Amacan SEC Documents contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances in
which they were made, not misleading, except to the extent corrected by a
subsequently filed Amacan SEC Document. The financial statements of Amacan
included in the Amacan SEC Documents comply as to form in all material respects
with applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with GAAP consistently applied (except as may be indicated in the notes thereto
or, in the case of unaudited statements, as permitted by the SEC) and fairly
present the financial position of Amacan at the dates thereof and the results of
its operations and changes in financial position for the periods then ended
(subject, in the case of unaudited statements, to normal, recurring audit
adjustments).
Section 5.13 AUTHORIZATIONS. Except as set forth in the Amacan
Schedules, to the best knowledge of Amacan, it possesses all licenses,
franchises, permits and other governmental authorizations, domestic and foreign,
that are legally required to enable it to conduct its business in all material
respects as conducted on the date hereof or as presently foreseeable in
connection therewith. To the knowledge of Amacan, the execution and delivery of
this Agreement does not, and the consummation of the transactions contemplated
hereby will not, conflict with or result in any violation of any material
statute, law, rule, regulation, judgment, order, decree or ordinance applicable
to Amacan or its properties or assets, or conflict with or result in any breach
or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any obligation
or to loss of a material benefit under, or result in the creation of a material
lien or encumbrance on any of the properties or assets of Amacan pursuant to (i)
any provision of the Articles of Incorporation or Bylaws of Amacan or (ii)
except as completely and accurately described in the Amacan Schedules, any
material agreement, contract, note,
23
mortgage, indenture, lease, instrument, permit, concession, franchise or
license to which Amacan is a party or by which any of its properties or
assets may be bound or affected. To the knowledge of Amacan, no consent,
approval, order or authorization of, or registration, declaration or filing
with, any Governmental Authority is required by or with respect to Amacan in
connection with the execution and delivery of this Agreement by Amacan or the
consummation by Amacan of the transactions contemplated hereby or thereby,
except for (x) the preparation and distribution to the stockholders of Amacan
of an information statement (the "INFORMATION STATEMENT") in preparation for
and relating to a special meeting of stockholders of Amacan to be called for
the purpose of soliciting approval of the Share Exchange, this Agreement and
the transactions contemplated hereby (the "STOCKHOLDERS MEETING"), (y) the
filing of the Articles of Exchange with the Division and appropriate
documents with the relevant Governmental Authorities of other jurisdictions
in which Amacan is qualified to do business, and (z) such consents,
approvals, orders, authorizations, registrations, declarations and filings
which if not obtained or made would not have a material adverse effect on the
Business Condition of Amacan.
Section 5.14 COMPLIANCE WITH LAWS AND REGULATIONS. Except as set forth
in the Amacan Schedules and to the best of its knowledge, Amacan has complied
with all applicable statutes and regulations of any Governmental Authority,
except to the extent that noncompliance would not materially and adversely
affect the Business Condition of Amacan or except to the extent that
noncompliance would not result in the incurrence of any material liability for
Amacan. To the knowledge of Amacan, there are no material judgments or orders,
injunctions, decrees, stipulations or awards (whether rendered by a court or
administrative agency or by arbitration) against Amacan or any of its
properties. Included in the Amacan Schedules is a copy of each letter of
inquiry, review or investigation or other writing from or to any Governmental
Authority evidencing a violation or possible or alleged violation of any of the
foregoing.
Section 5.15 INSURANCE. Included in the Amacan Schedules is a complete
list of all insurance policies which Amacan maintains respecting its services,
business, properties and employees. Such policies are in full force and effect
and are free from any right of termination by the insurance carriers. All
premiums payable under all such policies have been paid and Amacan is otherwise
in full compliance with the terms of such policies. Except as set forth in the
Amacan Schedules, all of the insurable properties of Amacan are insured for its
benefit in the amount of their full replacement value (subject to reasonable
deductibles) against losses due to fire and other casualty, with extended
coverage and coverage against other risks customarily insured against by persons
operating similar properties in the localities where such properties are
located, and under valid and enforceable policies issued by insurers of
recognized responsibility. Such policies will be outstanding and in full force
at the Closing Date. Included in the Amacan Schedules is a complete and an
accurate list of all insurance policies carried by Amacan, showing for each type
of coverage the policy limits, principal exclusions, deductibles and insurer.
Amacan does not know of any threatened termination of, or material premium
increase with respect to, any of such policies.
Section 5.16 TRANSACTIONS WITH AFFILIATES. Set forth in the Amacan
Schedules is a description of every material contract, agreement or arrangement
between Amacan and any person who is or has ever been an officer or director of
Amacan or person owning of record, or known by Amacan to own beneficially, five
percent or more of the issued and outstanding Amacan Common Stock and which is
to be performed in whole or in part after the date hereof or was entered into
within three years before the date hereof. In all such circumstances, the
contract, agreement or arrangement was for a bona fide business purpose of
Amacan and the amount paid or received, whether in cash, in services, or in
kind, is, has been during the full term thereof, and is required to be during
the unexpired portion of the term thereof, no less favorable to Amacan than
terms
24
available from otherwise unrelated parties in arm's length transactions. The
Amacan Schedules also include a description of any commitment by Amacan,
whether written or oral, to lend any funds to, borrow any money from, or
enter into any other material transaction with, any Affiliate of Amacan.
Section 5.17 MINUTE BOOK. The minute book of Amacan contains, and will
contain at the Closing Date, evidence of the due election and incumbency of the
Board of Directors and officers of Amacan executing this Agreement or any
document, certificate or other instrument executed in order to consummate the
transactions contemplated hereby.
Section 5.18 LABOR AGREEMENTS AND ACTIONS. Amacan is not bound by or
subject to (and none of its assets or properties is bound by or subject to) any
written or oral, express or implied, contract, commitment or arrangement with
any labor union, and no labor union has requested or, to the knowledge of
Amacan, has sought to represent any of the employees, representatives, or agents
of Amacan. There is no strike or other labor dispute involving Amacan pending,
or to the knowledge of Amacan threatened, which could have a material adverse
effect on the Business Condition of Amacan (as such business is presently
conducted and as it is proposed to be conducted), nor is Amacan aware of any
labor organization activity involving its employees. Amacan is not aware that
any officer or key employee, or that any group of key employees, intends to
terminate their employment with Amacan, nor does Amacan have a present intention
to terminate the employment of any of the foregoing. The employment of each
officer and employee of Amacan is terminable at the will of Amacan.
Section 5.19 INTELLECTUAL PROPERTY. Amacan owns, or is licensed or
otherwise entitled to use, all patents, trademarks, trade names, service marks,
copyrights and any applications therefor, maskworks, net lists, schematics,
technology, know-how, computer software programs or applications and tangible or
intangible proprietary information or materials that in any material respect are
used or currently proposed to be used in the business of Amacan as currently
conducted or as currently proposed to be conducted by Amacan (the "AMACAN
INTELLECTUAL PROPERTY RIGHTS"). The Amacan Schedules list all patents,
trademarks, registered and material unregistered copyrights, trade names and
service marks, and any applications therefor, included in the Amacan
Intellectual Property Rights. Amacan is not, nor as a result of the execution
and delivery of this Agreement or the performance of Amacan's obligations
hereunder will be, in violation of any license, sublicense or agreement which is
material to the Business Condition of Amacan. Except as set forth in the Amacan
Schedules, no claims with respect to the Amacan Intellectual Property Rights
have been asserted or, to the knowledge of Amacan, are threatened by any Person,
nor does Amacan know of any valid grounds for any bona fide claim (i) to the
effect that the manufacture, sale or use of any product as now used or offered
or proposed for use or sale by Amacan infringes on any copyright, patent or
trade secret, (ii) against the use by Amacan of any trademark, trade name, trade
secret, copyright, technology, know-how or computer software program or
application used in the business of Amacan as currently conducted or as proposed
to be conducted, or (iii) challenging the ownership, validity or effectiveness
of any of the Amacan Intellectual Property Rights. To Amacan's knowledge, there
is no material unauthorized use, infringement or misappropriation of any of the
Amacan Intellectual Property Rights by any third party, including any employee
or former employee of Amacan. No Amacan Intellectual Property Right is subject
to any outstanding order, judgment, decree, stipulation or agreement restricting
in any manner the licensing thereof by Amacan. Amacan has not entered into any
agreement to indemnify any other Person against any charge of infringement of
any Amacan Intellectual Property Right.
Section 5.20 ENVIRONMENTAL MATTERS. Amacan has not transported, stored,
used, manufactured, released or exposed its employees or any other Person to,
any Hazardous Material
25
in violation of any applicable statute, rule, regulation, order or law,
except as would not have a material adverse effect on Amacan's Business
Condition. Amacan has obtained all material permits, licenses and other
authorizations required to be obtained by it under any Environmental Law.
Amacan is (a) in compliance with all terms and conditions of such permits,
licenses and authorizations, and (b) in compliance in all material respects
with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained
in the Environmental Laws or contained in any regulation, code, plan, order,
decree, judgment, notice or demand letter issued, entered, promulgated or
approved thereunder except as would not have a material adverse effect on
Amacan's Business Condition. Amacan has not received any notice, nor does it
possess any knowledge, of any past or present condition or practice of the
businesses conducted by Amacan or its Affiliates which forms or could form
the basis of any material claim, action, suit, proceeding, hearing or
investigation against Amacan, arising out of (x) the manufacture, processing,
distribution, use treatment, storage, spill, disposal, transport or handling,
or the emission, discharge, release or threatened release into the
environment, of any Hazardous Material (y) any actual or potential violation
or failure to comply with any Environmental Law, or (z) any actual or
threatened obligation to undertake or bear the cost of any liability pursuant
to any Environmental Law with respect to any of the properties or assets in
which Amacan or its Subsidiaries has ir had an interest. There are no
pending or, to the knowledge of Amacan and its Subsidiaries, threatened
claims, encumbrances or other restrictions of any nature arising under or
pursuant to any Environmental Law with respect to or affecting any of the
properties and assets in which Amacan or its Subsidiaries has or had an
interest.
Section 5.21 AMACAN SCHEDULES. Amacan has delivered to Spire and Spire
Systems the schedules described in this Article V, which are collectively
referred to as the "AMACAN SCHEDULES" and which consist of separate schedules
dated as of the date of execution of this Agreement and instruments and data as
of such date, all certified by the chief executive officer of Amacan as
complete, true and accurate. Amacan shall cause the Amacan Schedules and the
instruments and data delivered to Spire hereunder to be updated after the date
hereof up to and including a specified date not more than three business days
prior to the Closing Date. Such updated Amacan Schedules, certified in the same
manner as the original Amacan Schedules, shall be delivered prior to the Closing
and as a condition precedent to the obligations of Spire and Spire Systems to
close.
ARTICLE VI
SPECIAL COVENANTS TO BE SATISFIED PRIOR TO CLOSING
Section 6.01 ACTIVITIES OF SPIRE, SPIRE SYSTEMS AND AMACAN.
(a) From and after the date of this Agreement until the Closing Date
and except as expressly permitted or contemplated by this Agreement, Spire,
Spire Systems and Amacan will each:
(i) carry on its business in substantially the same manner as
it has heretofore;
(ii) maintain in full force and effect insurance comparable in
amount and in scope of coverage to that now maintained by it;
(iii) perform in all material respects all of its obligations
under material contracts, leases and instruments relating to or affecting
its Business Condition;
26
(iv) use its best efforts to maintain and preserve its business
organization intact, to retain its key employees, and to maintain its
relationships with its material suppliers and customers; and
(v) comply fully with and perform in all material respects all
obligations and duties imposed on it by all federal, foreign, state and
local laws and all rules, regulations and orders imposed by Governmental
Authorities.
(b) Except as provided herein or with the prior written consent of
the other parties hereto, from and after the date of this Agreement and until
the Closing Date, neither Spire, Spire Systems nor Amacan will:
(i) make any change in its Articles of Incorporation or Bylaws;
(ii) take any action described in Section 4.08, in the case of
Spire and Spire Systems, or in Section 5.08, in the case of Amacan; or
(iii) enter into or amend any material contract, agreement or
other instrument of any of the types described in such party's disclosure
schedules other than in the normal course of business and without
materially and adversely affecting the Business Condition of such party.
Section 6.02 ACCESS TO PROPERTIES AND RECORDS. Spire, Spire Systems and
Amacan each will afford to the officers and authorized representatives of the
other full access to the properties, books and records of Spire, Spire Systems
or Amacan, as the case may be, in order that each may have full opportunity to
make such reasonable investigation as it shall desire to make of the affairs of
the other, and each will furnish the other parties with such additional
financial and operating data and other information as to the business and
properties of Spire, Spire Systems or Amacan, as the case may be, as the others
shall from time to time reasonably request.
Section 6.03 INFORMATION FOR SEC REPORTS. Spire and Spire Systems will
furnish Amacan with all information concerning Spire and Spire Systems required
for inclusion in any report (including a Current Report on Form 8-K) to be filed
by Amacan with any Governmental Authority in connection with the Share Exchange
and other transactions contemplated hereby, and each of Spire and Spire Systems
represents and warrants to Amacan that all information so furnished for such
reports shall be true and correct in all material respects without omission to
state any material fact required to make the information provided not
misleading.
Section 6.04 INDEMNIFICATION BY AMACAN. Amacan will indemnify and hold
harmless Spire and Spire Systems and their respective Affiliates, from and
against any and all losses, claims, damages, expenses, liabilities or actions to
which any of them may become subject under applicable law (including the
Securities Act and the Exchange Act) and will reimburse them for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any claim or action, whether or not resulting in liability, insofar as
such losses, claims, damages, expenses, liabilities or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in any report or other document filed with a Governmental
Authority or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary in
order to make the statements therein not misleading, provided that such claim or
action is not based on, and does not arise out of, information furnished by
Spire or Spire Systems for inclusion in such report or document. The indemnity
agreement
27
contained in this Section 6.04 shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of Spire and
Spire Systems and shall survive the consummation of the transactions
contemplated hereby.
Section 6.05 INDEMNIFICATION BY SPIRE. Each of Spire and Spire Systems
will indemnify and hold harmless Amacan and its Affiliates, from and against any
and all losses, claims, damages, expenses, liabilities or actions to which any
of them may become subject under applicable law (including the Securities Act
and the Exchange Act) and will reimburse them for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
claim or action, whether or not resulting in liability, insofar as such losses,
claims, damages, expenses, liabilities or actions arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
any report or other document filed with a Governmental Authority or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein, or necessary in order to make the statements
therein not misleading, provided that such claim or action is not based on, and
does not arise out of, information furnished by Amacan for inclusion in such
report or other document. The indemnity agreement contained in this Section
6.05 shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of Amacan and shall survive the consummation
of the transactions contemplated hereby.
Section 6.07 ACQUISITION OF AMACAN COMMON STOCK. The consummation of the
Share Exchange and the other transactions contemplated under this Agreement,
including the issuance of shares of the Amacan Common Stock to the Spire
Stockholders as contemplated hereby, constitutes the offer and sale of
securities under the Securities Act and applicable state statutes. Such
transactions shall be consummated in reliance on exemptions from the
registration and prospectus delivery requirements of such statutes which depend,
among other items, on the circumstances under which the Spire Stockholders
acquire such securities.
(a) In order to provide documentation for reliance upon exemptions
from the registration and prospectus delivery requirements for such
transactions, the execution of this Agreement by each of the Spire Stockholders
shall constitute his or her affirmation and acceptance of, and concurrence in,
the following representations and warranties:
(i) Such Spire Stockholder acknowledges that neither the SEC
nor the securities commission of any state or other federal agency has made
any determination as to the merits of acquiring the Amacan Common Stock,
and that this transaction involves certain risks.
(ii) Such Spire Stockholder has received and read this Agreement
and understands the risks related to the consummation of the transactions
contemplated hereby.
(iii) Such Spire Stockholder has such knowledge and experience in
business and financial matters that he or she is capable of evaluating
Amacan and its business operations.
(iv) Such Spire Stockholder has been provided with a copy of
this Agreement and the Amacan and Spire Schedules plus all materials and
information requested by such stockholder or his or her representative,
including any information requested to verify any information furnished (to
the extent such information is available or can be obtained without
unreasonable effort or expense), and such stockholder has been
28
provided the opportunity for direct communication between Amacan and its
representatives and such stockholder and his or her representatives
regarding the transactions contemplated hereby.
(v) All information which such Spire Stockholder has provided
to Amacan or its agents or representatives concerning such Spire
Stockholder's suitability to hold shares of Amacan Common Stock following
the transactions contemplated hereby is complete, accurate, and correct.
(vi) Such Spire Stockholder has not offered or sold any
securities of Amacan or interest in this Agreement and has no present
intention of dividing the shares of Amacan Common Stock to be received or
the rights under this Agreement with others or of reselling or otherwise
disposing of any portion of such stock or rights, either currently or after
the passage of a fixed or determinable period of time or on the occurrence
or nonoccurrence of any predetermined event or circumstance.
(vii) Such Spire Stockholder was at no time solicited by any
leaflet, public promotional meeting, circular, newspaper or magazine
article, radio or television advertisement or any other form of general
advertising or solicitation in connection with the offer, sale or purchase
of shares of Amacan Common Stock through this Agreement.
(viii) Such Spire Stockholder has adequate means of providing
for his or her current needs and possible personal contingencies and has no
need now, and anticipates no need in the foreseeable future, to sell shares
of the Amacan Common Stock which the undersigned will receive. Such Spire
Stockholder is able to bear the economic risks of this investment, and
consequently, without limiting the generality of the foregoing, is able to
hold the shares of Amacan Common Stock to be received in the Share Exchange
for an indefinite period of time and has a sufficient net worth to sustain
a loss of the entire investment, in the event such loss should occur.
(ix) Such Spire Stockholder is (a) a citizen of the United
States, (b) at least 21 years of age, and (c) a bona fide permanent
resident of and is domiciled in the state indicated on the signature page
hereof, and has no present intention of becoming a resident of any other
state or jurisdiction.
(x) Such Spire Stockholder understands that the Amacan Common
Stock has not been registered, but is being acquired by reason of a
specific exemption under the Securities Act as well as exemptions under
certain state statutes and that any disposition of the shares of Amacan
Common Stock acquired in the Share Exchange may, under certain
circumstances, be inconsistent with these exemptions and may cause the
undersigned to be deemed an "underwriter" within the meaning of the
Securities Act. Such Spire Stockholder understands that the definition of
"underwriter" arises out of the concept of "distribution" and that any
subsequent disposition of the subject Amacan Common Stock can only be
effected in transactions which are not considered distributions.
Generally, the term "distribution" is considered synonymous with "public
offering" or any other offer or sale involving general solicitation or
general advertising. Under present law, in determining whether a
distribution occurs when securities are sold into the public market, under
certain circumstances, the relevant considerations are the availability of
public information regarding the issuer, a holding period for the
securities sufficient to assure that the persons desiring to sell the
securities without registration first bear the economic risk of their
investment, and a
29
limitation on the number of securities which the stockholder is
permitted to sell and on the manner of sale, thereby reducing the
potential impact of the sale on the trading markets. These criteria are
set forth specifically in Rule 144, and sales of securities in reliance
upon Rule 144 can only be made in limited amounts after satisfying
applicable holding periods and are subject to additional terms and
conditions set forth in that Rule 144.
(xi) Such Spire Stockholder acknowledges that the shares of
Amacan Common Stock must be held and may not be sold, transferred, or
otherwise disposed of for value unless they are subsequently registered
under the Securities Act or an exemption from such registration is
available. Amacan is under no obligation to register the shares of Amacan
Common Stock to be acquired by the Spire Stockholders in the Share Exchange
under the Securities Act. Amacan's registrar and transfer agent will
maintain stop transfer orders against the transfer of the shares of Amacan
Common Stock to be obtained by the Spire Stockholders in the Share
Exchange, and the certificates representing such shares of Amacan Common
Stock will bear a legend in substantially the form set forth in Section
3.02(c).
(xii) Amacan may refuse to effect transfer of the Amacan
Common Stock in the absence of compliance with Rule 144 unless the holder
furnishes Amacan with a "no-action" or interpretive letter from the SEC or
an opinion of counsel reasonably acceptable to Amacan stating that the
transfer is proper. Further, unless such interpretive letter or opinion
states that the shares of Amacan Common Stock are free of any restrictions
under the Securities Act, Amacan may refuse to transfer the Amacan Common
Stock to any transferee who does not furnish in writing to Amacan the same
representations and agree to the same conditions with respect to such
Amacan Common Stock as set forth herein. Amacan may also refuse to
transfer shares of Amacan Common Stock if any circumstances are present
reasonably indicating that the transferee's representations are not
accurate.
(b) Each of the Spire Stockholders, for the purpose of inducing
Amacan to enter into this Agreement, consummate the Share Exchange and complete
the other transactions contemplated hereby, represents and warrants to Amacan as
follows:
(i) such Spire Stockholder is the legal and beneficial owner of the
number of shares of Spire Common Stock and Spire Systems Common Stock set
forth below his or her name on the signature page hereof, and all such
shares are owned by such Spire Stockholder free and clear of any lien,
security interest, charge, encumbrance, pre-emptive right or other
restriction whatsoever;
(ii) such Spire Stockholder has not elected to exercise dissenters'
rights in connection with the Share Exchange and such Spire Stockholder
shall not elect to do so subsequent to the execution of this Agreement;
(iii) such Spire Stockholder is not required to obtain any
consent, approval or authorization or to make any filing with, any
Governmental Authority or any other Person in connection with the execution
of this Agreement and the consummation of the Share Exchange and the other
transactions contemplated hereby;
(iv) the execution of this Agreement by such Spire Stockholder and
the consummation of the Share Exchange and the other transactions
contemplated hereby will not violate, conflict with, result in a breach of,
or constitute a default under, any order of any
30
Governmental Authority or any provision of any indenture, mortgage,
contract, instrument or other agreement to which such Spire Stockholder
is a party or by which he or she is bound.
(c) In connection with the Share Exchange and the transactions
contemplated hereby, Spire, Spire Systems and Amacan shall each file, with the
assistance of the other and their respective legal counsel, such notices,
applications, reports or other instruments as may be deemed by them to be
necessary or appropriate in an effort to document reliance on applicable
exemptions from the registration requirements of the Securities Act with the
appropriate Governmental Authorities in such states as the Spire Stockholders
are residents, all to the extent and in the manner as may be deemed by such
parties to be appropriate.
(d) In order to more fully document reliance on the exemptions as
provided herein, the Spire Stockholders shall execute and deliver to Amacan, at
or prior to the Closing, such letters of representation, acknowledgment,
suitability or the like, as Amacan and its counsel may reasonably request in
connection with reliance on exemptions from registration under such securities
laws.
(e) Each of Spire and Spire Systems acknowledges that the basis for
relying on exemptions from registration or qualifications are factual, depending
on the conduct of the various parties, and that no legal opinion or other
assurance will be required or given to the effect that the transactions
contemplated hereby are in fact exempt from registration or qualification.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF AMACAN
The obligations of Amacan under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 7.01 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by Spire and Spire Systems in this Agreement were true when made
and shall be true as of the Closing Date (except for changes therein permitted
by this Agreement) with the same force and effect as if such representations and
warranties were made at and as of the Closing Date, and Spire and Spire Systems
shall have performed and complied with all covenants and conditions required by
this Agreement to be performed or complied with by Spire or Spire Systems, as
the case may be, prior to or at the Closing. Amacan shall have been furnished
certificates, signed by the duly authorized chief executive and principal
financial or accounting officer or officers of Spire and Spire Systems,
respectively, dated the Closing Date, to the foregoing effect.
Section 7.02 OFFICER'S CERTIFICATE. Amacan shall have been furnished with
certificates dated the Closing Date and signed by the duly authorized officer or
officers of Spire and Spire Systems, as applicable, to the effect that:
(a) the Share Exchange, this Agreement and the other transactions
contemplated hereunder have been duly approved by the Boards of Directors and
stockholders of Spire and Spire Systems, respectively, and have been duly
executed and delivered in the name and on behalf of Spire and Spire Systems by
their duly authorized officers pursuant to, and in compliance with, authority
granted by the Boards of Directors of Spire and Spire Systems, as applicable;
31
(b) the representations and warranties of Spire and Spire Systems
set forth in this Agreement are true and correct as of the date of the
certificate;
(c) there has been no material adverse change in the Business
Condition of Spire or Spire Systems, nor has any event occurred which, with the
lapse of time or giving of notice, may cause or create any material adverse
change in the Business Condition of Spire or Spire Systems, as applicable, up to
and including the date of the certificate;
(d) all conditions required by this Agreement to have been met,
satisfied or performed by Spire or Spire Systems have been met, satisfied or
performed;
(e) the consummation of the Share Exchange and the transactions
contemplated hereby do not violate any law, regulation, order, writ, injunction
or decree of any court or Governmental Authority or result in the creation or
imposition of any mortgage, lien, charge or encumbrance of any nature upon any
of the properties of Spire or Spire Systems pursuant to any mortgage,
resolution, agreement or instrument to which Spire or Spire Systems is a party;
(f) all authorizations, consents, approvals, registrations and/or
filings with any Governmental Authority required in connection with the
execution and delivery of this Agreement and any documents or instruments
contemplated hereby by Spire or Spire Systems have been obtained and are in full
force and effect or, if not required to have been obtained, will be in full
force and effect by such time as may be required; and
(g) there is no action, suit, proceeding, inquiry or investigation at
law or in equity by any Governmental Authority pending or threatened against
Spire or Spire Systems, wherein an unfavorable decision, ruling or finding would
have a material adverse effect on the Business Condition of Spire or Spire
Systems, the Share Exchange or any other transaction contemplated hereby, or any
material agreement or instrument by which Spire or Spire Systems is bound or
would in any way contest the existence of Spire or Spire Systems.
Section 7.03 GOOD STANDING. Amacan shall have received certificates of
good standing from the Division, with respect to each of Spire and Spire
Systems, dated as of a date within five days prior to the Closing Date,
certifying that Spire and Spire Systems are in good standing under the laws of
the State of Utah. Amacan shall have also received evidence of the foreign
qualification and good standing of Spire and Spire Systems in each other
jurisdiction in which the failure to so qualify would have a material adverse
effect on the Business Condition of Spire or Spire Systems, as the case may be.
Section 7.04 UCC CERTIFICATE. Amacan shall have received a Uniform
Commercial Code certificate from the Division, dated as of the Closing Date, to
the effect that there are no encumbrances of record on the assets of Spire and
Spire Systems other than those disclosed in the Spire Schedules.
Section 7.05 LEGAL MATTERS. Amacan shall have received an opinion in form
and substance reasonably satisfactory to it from the firm of Xxxxx, Xxxxx &
Xxxxxxx, L.L.C., legal counsel to Spire and Spire Systems, to the effect that:
(a) each of Spire and Spire Systems (i) is a corporation validly
existing and in good standing under the laws of the State of Utah, (ii) is duly
qualified and in good standing as a foreign corporation under the laws of each
other jurisdiction in which it is authorized to do business,
32
and (iii) has all requisite corporate power and authority to own, lease and
operate its assets and carry on its business as is now being conducted;
(b) each of Spire and Spire Systems has the corporate power and
authority to enter into and perform this Agreement and to consummate the
transactions contemplated hereby, and this Agreement and all instruments
delivered pursuant hereto have been duly authorized by all necessary corporate
action, have been duly executed and delivered, and are the legal, valid and
binding obligations of Spire and Spire Systems, as the case may be;
(c) the authorized, issued and outstanding capitalization of Spire
and Spire Systems is as represented in this Agreement; the outstanding shares of
capital stock of Spire and Spire Systems are validly issued, fully paid and
nonassessable and not subject to any preemptive rights of any Person; and
(d) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby will not contravene any provision of the
Articles of Incorporation or Bylaws of Spire or Spire Systems.
In rendering the foregoing opinions, such counsel may rely on certificates
or affidavits from executive officers of Spire and Spire Systems or public
officials with respect to factual matters and may except therefrom any effect of
laws affecting creditor's rights, the enforcement of indemnification, or the
equitable remedy of specific performance. Counsel shall not be required to
express any opinion with respect to any accounting matters pertaining to the
transaction.
Section 7.06 STOCKHOLDER APPROVAL; NO DISSENTERS' RIGHTS. The
stockholders of Spire and Spire Systems shall have, to the extent necessary
under applicable law, approved this Agreement and the consummation of the
transactions contemplated hereby. No stockholder of Spire or Spire Systems
shall have elected to exercise dissenters' rights under the Utah Act.
Section 7.07 OTHER ITEMS. Amacan shall have received such further
documents, certificates or instruments relating to this Agreement and the
transactions contemplated hereby as Amacan may reasonably request. The
Information Statement shall not be at the Effective Time subject to any
proceedings commenced or threatened by the SEC.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF SPIRE AND SPIRE SYSTEMS
The obligations of Spire and Spire Systems under this Agreement are subject
to the satisfaction, at or before the Closing Date, of the following conditions:
Section 8.01 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by Amacan in this Agreement were true when made and shall be
true at the Closing Date with the same force and effect as if such
representations and warranties were made at and as of the Closing Date
(except for changes therein permitted by this Agreement), and Amacan shall
have performed or complied with all covenants and conditions required by this
Agreement to be performed or complied with by Amacan prior to or at the
Closing. Spire and Spire Systems shall be furnished with a certificate,
signed by the chief executive and principal financial or accounting officer
or officers of Amacan and dated the Closing Date, to the foregoing effect.
33
Section 8.02 OFFICERS' CERTIFICATE. Spire and Spire Systems shall be
furnished with a certificate dated the Closing Date and signed by the duly
authorized chief executive officer and principal accounting and financial
officer or officers of Amacan to the effect that:
(a) The Share Exchange, this Agreement and the other transactions
contemplated hereunder have been duly approved by Amacan's Board of Directors
and stockholders and have been duly executed and delivered in the name and on
behalf of Amacan by its duly authorized officers pursuant to, and in compliance
with, authority granted by the Board of Directors of Amacan;
(b) The representations and warranties of Amacan set forth in this
Agreement are true and correct as of the date of the certificate;
(c) There has been no material adverse change in the Business
Condition of Amacan nor has any event occurred which, with the lapse of time or
giving of notice, may cause or create any material adverse change in the
Business Condition of Amacan up to and including the date of the certificate;
(d) All conditions required by this Agreement to have been met,
satisfied or performed by Amacan have been met, satisfied or performed;
(e) The consummation of the Share Exchange and the transactions
contemplated hereby do not violate any law, regulation, order, writ, injunction
or decree of any Governmental Authority or result in the creation or imposition
of any mortgage, lien, charge or encumbrance of any nature upon any of the
properties of Amacan pursuant to any mortgage, resolution, agreement or
instrument to which Amacan is a party;
(f) All authorizations, consents, approvals, registrations and/or
filings with any Governmental Authority required in connection with the
execution and delivery of this Agreement and any documents or instruments
contemplated hereunder by Amacan have been obtained and are in full force and
effect or, if not required to have been obtained, will be in full force and
effect by such time as may be required;
(g) There is no action, suit, proceeding, inquiry or investigation at
law or in equity by any Governmental Authority pending or threatened against
Amacan, wherein an unfavorable decision, ruling or finding would have a material
adverse effect on the Business Condition of Amacan, the Share Exchange or any
other transaction contemplated hereby, or any material agreement or instrument
by which Amacan is bound or would in any way contest the existence of Amacan.
Section 8.03 GOOD STANDING. Spire and Spire Systems shall have received a
certificate of good standing from the Division, dated as of a date within five
days prior to the Closing Date, certifying that Amacan is in good standing as a
corporation in the State of Utah. Spire and Spire Systems shall also have
received evidence of the foreign qualification and good standing of Amacan in
every other jurisdiction in which the failure to so qualify would have a
material adverse effect on the Business Condition of Amacan.
Section 8.04 UCC CERTIFICATE. Spire and Spire Systems shall have received
a Uniform Commercial Code certificate from the Division, dated as of the Closing
Date, to the effect that there are no encumbrances of record on the assets of
Amacan other than those disclosed in the Amacan Schedules.
34
Section 8.05 LEGAL MATTERS. Spire shall have received an opinion in form
and substance reasonably satisfactory to it from the firm of Xxxxxxx, Parr,
Waddoups, Xxxxx & Gee, legal counsel to Amacan, to the effect that:
(a) Amacan (i) is a corporation validly existing and in good standing
under the laws of the State of Utah, (ii) is duly qualified and in good standing
as a foreign corporation under the laws of each other jurisdiction in which it
is authorized to do business, and (iii) has all requisite corporate power and
authority to own, lease and operate its assets and carry on its business as it
is now being conducted;
(b) Amacan has the corporate power and authority to enter into and
perform this Agreement and to consummate the transactions contemplated hereby
and this Agreement and all instruments of transfer delivered pursuant hereto
have been duly authorized by all necessary corporate action, have been duly
executed and delivered by Amacan, and are the legal, valid and binding
obligations of Amacan;
(c) The authorized, issued and outstanding capitalization of Amacan
is as represented in this Agreement; the outstanding shares of capital stock of
Amacan are validly issued, fully paid, and nonassessable and not subject to any
preemptive rights of any Person; and
(d) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby will not contravene any provision of
Amacan's Articles of Incorporation or Bylaws.
In rendering the foregoing opinions, such counsel may rely on certificates
or affidavits from executive officers of Amacan or public officials with respect
to factual matters and may except therefrom any effect of laws affecting
creditor's rights, the enforcement of indemnification, or the equitable remedy
of specific performance. Counsel shall not be required to express any opinion
with respect to the accounting matters pertaining to the transaction.
Section 8.06 AMACAN SHAREHOLDER APPROVAL. The stockholders of Amacan
shall have approved this Agreement and the consummation of the transactions
contemplated hereby. No Stockholder of Amacan shall have elected to exercise
dissenter's rights under the Utah Act.
Section 8.07 OTHER ITEMS. Spire and Spire Systems shall have received
such further documents, certificates or instruments relating to this Agreement
and the transactions contemplated hereby as Spire and Spire Systems may
reasonably request. The Information Statement shall not be at the Effective
Time subject to any proceedings commenced or threatened by the SEC.
ARTICLE IX
GENERAL PROVISIONS
Section 9.01 BROKERS. Except for compensation previously paid by Spire,
each of Spire, Spire Systems and Amacan agree that there were no finders or
brokers involved in bringing the parties together or who were instrumental in
the negotiation, execution or consummation of this Agreement to whom either
Spire, Spire Systems or Amacan is obligated to pay any compensation. Further,
Spire and Spire Systems each agree to indemnify Amacan, and Amacan agrees to
indemnify Spire and Spire Systems, against any claim by any third person for any
commission, brokerage or finder's fee or other payment with respect to this
Agreement or the transactions contemplated hereby based on any alleged agreement
or understanding between such indemnifying party and such third person,
35
whether express or implied, resulting from the actions of such indemnifying
party. The covenants set forth in this Section 9.01 shall survive the
Closing Date and the consummation of the transactions herein contemplated.
Section 9.02 NO REPRESENTATION REGARDING TAX TREATMENT. No representation
or warranty is being made or legal opinion given by any party to any other
regarding the treatment of this transaction for federal, state or foreign income
taxation. Although this transaction has been structured in an effort to qualify
for treatment under Section 368(a)(1)(B) of the Code, there is no assurance that
any part of this transaction in fact meets the requirements for such
qualification. Each party has relied exclusively on its own legal, accounting,
and other tax advisers regarding the treatment of this transaction for federal,
state and foreign income tax purposes and on no representation, warranty or
assurance from any party hereto that this transaction in fact meets the
requirements for such qualification.
Section 9.03 GOVERNING LAW. This Agreement shall be governed by, enforced
and construed under and in accordance with the laws of the United States of
America and, with respect to matters of state law, with the laws of the State of
Utah.
Section 9.04 NOTICES. Any notices or other communications to any party
required or permitted hereunder shall be sufficiently given if personally
delivered, if sent by facsimile or telecopy transmission or other electronic
communication confirmed by registered or certified mail, postage prepaid, or if
sent by prepaid overnight courier addressed as follows:
If to Spire, to: Spire Technologies, Inc.
Attn: Xxxx X. Xxxxxxx
000 Xxxxx Xxxxx Xxxxxx
X.X. Xxx 0000
Xxxx, Xxxx 00000
With copies to: Xxxxxx X. Xxxxx, Esq.
Xxxxx, Xxxxx & Xxxxxxx, L.L.C.
00 Xxxx Xxxxxxxx, Xxxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000-0000
If to Spire Systems, to: Spire Technologies Systems Division, Inc.
Attn: Xxxx X. Xxxxxxx
000 Xxxxx Xxxxx Xxxxxx
X.X. Xxx 0000
Xxxx, Xxxx 00000
With copies to: Xxxxxx X. Xxxxx, Esq.
Xxxxx, Xxxxx & Xxxxxxx, L.L.C.
00 Xxxx Xxxxxxxx, Xxxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000-0000
If to Amacan, to: Amacan Resources Corporation
Attn: Xxxxxxx X. Xxxxxx
0000 Xxxxx Xxxxxxx East, Number 9
Xxxx Xxxx Xxxx, Xxxx 00000
36
With copies to: Xxxxx X. Xxxxx, Esq.
Xxxxxxx, Parr, Waddoups, Xxxxx & Xxx
000 Xxxxx Xxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given as of the date so delivered or sent by facsimile or
telecopy transmission or other electronic communication, or one day after the
date so sent by overnight courier.
Section 9.05 ATTORNEYS' FEES. In the event that any party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the breaching party or parties shall reimburse the
non-breaching party or parties for all costs, including reasonable attorneys'
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
Section 9.06 SCHEDULES; KNOWLEDGE. Whenever in any section of this
Agreement reference is made to information set forth in the Amacan or Spire
Schedules such reference is to information specifically set forth in such
schedules and clearly marked to identify the section of this Agreement to which
the information relates. Whenever any representation is made to the "knowledge"
of any party, it shall be deemed to be a representation as to the actual
knowledge of the party and the knowledge reasonably expected to be possessed by
the party.
Section 9.07 THIRD-PARTY BENEFICIARIES. This contract is solely between
Amacan, Spire and Spire Systems and, except as specifically provided in Sections
6.04 and 6.05, no director, officer, stockholder, employee, agent, independent
contractor or any other Person shall be deemed to be a third party beneficiary
of this Agreement.
Section 9.08 ENTIRE AGREEMENT. This Agreement represents the entire
agreement between the parties relating to the subject matter hereof. All
previous agreements between the parties, whether written or oral, have been
merged into this Agreement. This Agreement alone fully and completely expresses
the agreement of the parties relating to the subject matter hereof. There are
no other courses of dealing, understandings, agreements, representations, or
warranties, written or oral, except as set forth herein.
Section 9.09 TERMINATION; SURVIVAL. Except as expressly set forth in
this Agreement, the representations, warranties, and covenants of the respective
parties shall survive the Closing and terminate three months after the Effective
Date.
Section 9.10 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
Section 9.11 AMENDMENT OR WAIVER. Every right and remedy provided herein
shall be cumulative with every other right and remedy, whether conferred herein,
at law or in equity, and may be enforced concurrently herewith, and no waiver by
any party of the performance of any obligation by the other shall be construed
as a waiver of the same or any other default then, theretofore or thereafter
occurring or existing. At any time prior to the Closing Date, this Agreement
may be amended by a writing signed by all parties hereto, with respect to any of
the terms contained herein, and any term or condition of this Agreement may be
waived or the time for performance thereof
37
may be extended by a writing signed by the party or parties for whose benefit
the provision is intended.
Section 9.12 HEADINGS AND REFERENCES. The article, section and
subsection headings of this Agreement are for convenience only, shall not be
deemed part of this Agreement, and in no way define, limit, augment, extend or
describe the scope, content or intent of any provision of this Agreement.
References in this Agreement to articles, sections and subsections shall refer
to the articles, sections and subsections of this Agreement unless expressly
indicated otherwise.
38
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers, hereunto duly authorized, as of the date
first above written.
"SPIRE"
Spire Technologies, Inc.,
a Utah corporation Attest:
By /s/ Xxxx X. Xxxxxxx By /s/ Xxxxx X. Xxxxxxxxxxx
--------------------------------- -------------------------------------
Xxxx X. Xxxxxxx, President Xxxxx X. Xxxxxxxxxxx, Secretary
"SPIRE SYSTEMS"
Spire Technologies Systems Division, Inc.,
a Utah corporation Attest:
By /s/ Xxxx X. Xxxxxxx By /s/ Xxxxx X. Xxxxxxxxxxx
--------------------------------- -------------------------------------
Xxxx X. Xxxxxxx, President Xxxxx X. Xxxxxxxxxxx, Secretary
"AMACAN"
Amacan Resources Corporation,
a Utah corporation Attest:
By /s/ Xxx X. Xxxxxxxxxx By /s/ Xxxxx X. Xxxxxx
--------------------------------- -------------------------------------
Xxx X. Xxxxxxxxxx, President Xxxxx X. Xxxxxx, Secretary
39
"SPIRE STOCKHOLDERS"
Xxxx X. Xxxxxxx and Xxxxx Xxxxxxx, Xxxx X. Xxxxx and Xxxxxxx X. Xxxxx,
Trustees of the Xxxx X. Xxxxxxx Family Trustees of the Xxxx X. Xxxxx Family
Revocable Trust dated July 1, 1993 Revocable Trust dated July 1, 1993
By /s/ Xxxx X. Xxxxxxx By /s/ Xxxx X. Xxxxx
--------------------------------- -----------------------------------
Xxxx X. Xxxxxxx, Trustee Xxxx X. Xxxxx, Trustee
/s/ Xxxxx Xxxxxxx /s/ Xxxxxxx X. Xxxxx
--------------------------------- -----------------------------------
Xxxxx Xxxxxxx, Trustee Xxxxxxx X. Xxxxx, Trustee
27,450 shares Spire Common Stock 18,000 shares Spire Common Stock
------ ------
33,075 shares Spire Systems Common Stock 21,690 shares Spire Systems
------ ------
Common Stock
State of residence: Utah State of residence: Utah
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxxxxxxxx
----------------------------------- -----------------------------------
Xxxxxxx X. Xxxxxxx, an individual Xxxxx X. Xxxxxxxxxxx, an individual
15,750 shares Spire Common Stock 13,500 shares Spire Common Stock
------ ------
18,972 shares Spire Systems Common Stock 16,263 shares Spire Systems
------ ------
Common Stock
State of residence: Utah State of residence: Utah
/s/ Xxxxxx X. Bench /s/ Xxxxxxx X. Fresh
--------------------------------- -----------------------------------
Xxxxxx X. Bench, an individual Xxxxxxx X. Fresh, an individual
10,493 shares Spire Common Stock 2,193 shares Spire Common Stock
------ ------
10,000 shares Spire Systems Common Stock
------
State of residence: Arizona State of residence: Utah
40
