AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is entered into
as of March 20, 2000, by and among Reconversion Technologies, Inc., a Delaware
corporation ("Retek"), Retek Merger Corp., a New York corporation and a
wholly-owned subsidiary of Retek ("Merger Sub"), Logisoft Corp., a New York
corporation ("Logisoft") and Xxxxxx Xxxx, Xxxxxxx Xxxx, Xxxxxx Xxxxxxx and
Xxxxxxx Xxxxxx (each of whom is a stockholder of Logisoft, and who are
collectively referred to herein as the "Principals" and each individual is
referred to as a "Principal").
RECITALS
The parties intend that, subject to the terms and conditions of this
Agreement:
Merger Sub will merge with and into Logisoft in a statutory merger, with
Logisoft to be the corporation surviving the Merger (as defined below), all
pursuant to the terms and conditions of this Agreement and a Plan of Merger in
the form of Exhibit"A" attached hereto (the "Plan of Merger") and the applicable
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provisions of the law of the State of New York.
Upon the effectiveness of the Merger, all of the outstanding capital stock of
Logisoft will be converted into shares of Retek Common Stock, as provided in
this Agreement and the Plan of Merger. The Merger is intended to be treated as
a tax-free reorganization pursuant to the provisions of Section 368(a)(1)(A) of
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the Internal Revenue Code of 1986, as amended (the "Code") by virtue of the
provisions of Section 368(a)(2)(E) of the Code.
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NOW, THEREFORE, the parties hereto hereby agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms have
the meanings set forth below:
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1.1 "Retek Common Stock" means the Common Stock of Retek, $.0001 par
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value per share.
1.2 "Logisoft Common Stock" means the Common Stock of Logisoft, $____par
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value per share.
1.3 "Effective Time" means the time and date on which a Certificate of
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Merger (the "Certificate of Merger") has been filed with the New York Secretary
of State and the Merger becomes effective under New York law.
1.4 "Merger" means the statutory merger of Merger Sub with and into Logisoft
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in a reverse triangular merger pursuant to this Agreement and the Plan of
Merger.
Other capitalized terms defined elsewhere in this Agreement and not defined in
this Section 1 have the meanings assigned to such terms in this Agreement.
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2. PLAN OF REORGANIZATION
2.1 The Merger. At the Effective Time, Merger Sub will be merged with
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and into Logisoft pursuant to this Agreement and the Plan of Merger and in
accordance with applicable provisions of the laws of the State of New York.
Each share of Logisoft Common Stock issued and outstanding immediately prior to
the Effective Time will, by virtue of the Merger and at the Effective Time, and
without further action on the part of any holder thereof, be converted into such
number of shares as is shown on Exhibit 2.1.
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2.2 Adjustments for Capital Changes. If, prior to the Effective Time,
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Retek or Logisoft recapitalizes through a split-up of its outstanding shares
into a greater number, or a combination of its outstanding shares into a lesser
number, reorganizes, reclassifies or otherwise changes its outstanding shares
into the same or a different number of shares of other classes (other than
through a split-up or combination of shares provided for in the previous
clause), or declares a dividend on its outstanding shares payable in shares,
securities convertible into shares or other property, then the number of shares
of Retek Common Stock into which each share of Logisoft Common Stock is to be
converted ill be adjusted appropriately.
2.3 Fractional Shares. No fractional shares of Retek Common Stock will be
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issued in connection with the Merger, but in lieu thereof, the holders of
Logisoft Common Stock who would otherwise be entitled to receive a fraction of a
share of Retek Common Stock will receive an additional share of Retek Common
Stock.
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2.4 Options; Other Securities. No shares of Retek Common Stock (or any
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other securities of Retek) shall be issued or issuable with respect to options
to purchase Logisoft Common Stock or with respect to any other equity securities
of Logisoft (including warrants), other than Logisoft Common Stock, and all such
options or other equity securities shall be canceled at the Effective Time.
2.5 Effects of the Merger. At the Effective Time: (a) the separate
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existence of the Merger Sub will cease and Merger Sub will be merged with and
into Logisoft, and Logisoft will be the surviving corporation of the Merger,
pursuant to the terms of the Plan of Merger; (b) the Certificate of
Incorporation and Bylaws of Logisoft will continue [UNCHANGED] to be the
Certificate of Incorporation and Bylaws of the surviving corporation of the
Merger; (c) each share of capital stock of Merger Sub outstanding immediately
prior to the Effective Time will be converted into one share of Logisoft; (d)
the directors and certain officers of Retek shall become the directors and
officers of the surviving corporation as set forth in the Plan of Merger; (e)
each share of Logisoft Common Stock outstanding immediately prior to the
Effective Time will be converted into the right to receive that number of shares
of Retek Common Stock as provided in Section 2.1; and (f) the Merger will, from
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and after the Effective Time, have all of the effects provided by applicable
law.
2.6 Further Assurances. Each of Logisoft and the Principals agree that if,
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at any time after the Effective Time, Retek considers or is advised that any
further deeds, assignments or assurances are reasonably necessary or desirable
to vest, perfect or confirm in Retek title to any property or rights of
Logisoft, Retek and its officers and directors may execute and deliver all such
proper deeds, assignments and assurances and do all other things necessary or
desirable to vest, perfect or confirm title to such property or rights in Retek
and otherwise carry out the purpose of this Agreement, in the name of Logisoft
or otherwise.
2.7 Securities Law Compliance. Retek will issue the shares of Retek Common
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Stock in the Merger pursuant to the "private placement" exemption from
registration under Section 4(2) of, or Regulation D promulgated under, the
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Securities Act of 1933, as amended (the "Securities Act"), and the shares
received by the Principals in the Merger will therefore be restricted securities
within the meaning of Rule 144 of the Securities Act, and certificates
evidencing such shares will bear a restrictive legend evidencing that fact.
Retek shall also take any action that is required to be taken under any
applicable state securities or Blue Sky laws in connection with the issuance of
Retek Common Stock in the Merger. Logisoft and the Principals shall furnish to
Retek all information known to Logisoft or the Principals (or reasonably
ascertainable by Logisoft or the Principals) concerning each of Logisoft and the
Principals, as may be reasonably requested in connection with any action
contemplated by this Section.
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2.8 Tax-Free Reorganization. The parties intend to adopt this
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Agreement as a tax-free plan of reorganization and to consummate the Merger in
accordance with the provisions of Section 368(a)(1)(A) of the Code. The parties
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have negotiated the Merger on an arm's-length basis, and on the premise that the
value of the Retek Common Stock to be received in the Merger is equal to the
value of the Logisoft Common Stock to be surrendered in exchange therefor.
Unless advised by tax counsel that doing so is required under applicable law,
the parties shall not take a position on any tax returns inconsistent with this
Section 2.8. In addition, Retek and the Principals represent that now, and as
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of the Effective Time, each of them presently intends to continue Logisoft's
historic business or use a significant portion of Logisoft's business assets in
a business. At the Effective Time, officers of each of Retek and Logisoft shall
execute and deliver officers' certificates in the forms of Exhibits 2.8A and
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2.8B attached hereto. The provisions and representations contained or referred
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to in this Section 2.8 shall survive until the expiration of the applicable
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statute of limitations.
3. REPRESENTATIONS AND WARRANTIES OF LOGISOFT AND PRINCIPALS
Each of the Principals and Logisoft, jointly and severally, hereby
represents and warrants as set forth in Section 3.1, and Logisoft warrants as
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set forth in Sections 3.2 through 3.21, except as set forth in the Logisoft
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Schedule of Exceptions (in numbered paragraphs that correspond to the Section
numbers below) simultaneously delivered to Retek with the execution of this
Agreement:
3.1 Organization, Good Standing and Qualification. Logisoft is a corporation
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duly organized, validly existing and in good standing under the laws of the
State of New York, has the corporate power and authority to own, operate and
lease its properties and to carry on its business as now conducted and as
proposed to be conducted. Logisoft is not qualified as a foreign corporation in
any other jurisdiction, and there is no jurisdiction in which a failure to be so
qualified could reasonably be expected to have a material adverse effect on the
business, operations, financial condition or prospects of Logisoft (for purposes
of this Sections 3 and 5, a "Material Adverse Effect").
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3.2 Power, Authorization and Validity.
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3.2.1 Logisoft and each Principal has the corporate or other
right, power, legal capacity and authority to enter into and perform its
obligations under this Agreement and all agreements to which Logisoft or such
Principal is or will be a party that are required to be executed at the Closing
(defined below) pursuant to this Agreement (the "Logisoft Ancillary
Agreements"). The execution, delivery and performance of this Agreement and the
Logisoft Ancillary Agreements to which Logisoft is a party have been duly and
validly approved and authorized by the Board of Directors of Logisoft. The
Merger has been approved by all of the stockholders of Logisoft.
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3.2.2 No filing, authorization or approval, governmental or
otherwise, is necessary to enable Logisoft and the Principals to enter into, and
to perform its obligations under, this Agreement and the Logisoft Ancillary
Agreements, except for (a) the filing of the Certificate of Merger with the New
York Secretary of State, (b) the filing of appropriate documents with the
relevant authorities of other states in which Logisoft is qualified to do
business, if any, and (c) such filings as may be required to comply with federal
and state securities laws.
3.2.3 This Agreement and the Logisoft Ancillary Agreements are, or
when executed by Logisoft and/or the Principals, as applicable, will be, valid
and binding obligations of Logisoft and/or the Principals, as applicable,
enforceable in accordance with their respective terms, except as to the effect,
if any, of (a) applicable bankruptcy and other similar laws affecting the rights
of creditors generally and (b) rules of law governing specific performance,
injunctive relief and other equitable remedies; provided, however, that the
Certificate of Merger will not be effective until the Effective Time.
3.3 Capitalization. As of the date hereof, the authorized capital
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stock of Logisoft consists of 200 shares of Logisoft Common Stock, of which 100
shares are issued and outstanding. All issued and outstanding shares of
Logisoft Common Stock have been duly authorized and validly issued, are fully
paid and nonassessable (except as provided in Section 630 of the New York
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Business Corporation Law ("BCL ' 630")), are not subject to any right of
rescission, and have been offered, issued, sold and delivered by Logisoft, in
compliance with all registration or qualification requirements (or applicable
exemptions therefrom) of applicable federal and state securities laws. Schedule
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3.3 of the Logisoft Schedule of Exceptions sets forth a true, correct and
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complete list of all holders of Logisoft Common Stock. There are no options,
warrants, calls, commitments, conversion privileges or preemptive or other
rights or agreements outstanding to purchase or otherwise acquire any of
Logisoft's authorized but unissued capital stock or any securities convertible
into or exchangeable for shares of Logisoft capital stock or obligating Logisoft
to grant, extend, or enter into any such option, warrant, call, commitment,
conversion privilege or other right or agreement, and there is no liability for
dividends accrued but unpaid. There are no voting agreements, rights of first
refusal or other restrictions (other than normal restrictions on transfer under
applicable federal and state securities laws) applicable to any of Logisoft's
outstanding securities. Logisoft is not under any obligation to register under
the Securities Act any of its presently outstanding securities or any securities
that may be subsequently issued. All holders of Logisoft Common Stock reside in
the State of New York.
3.4 Subsidiaries. Logisoft does not presently own or control, directly
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or indirectly, any interest in any other corporation, partnership, trust, joint
venture, association, or other entity.
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3.5 No Violation of Existing Agreements. Neither the execution and
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delivery of this Agreement or any Logisoft Ancillary Agreement, nor the
consummation of the transactions contemplated hereby or thereby, will conflict
with, or (with or without notice or lapse of time, or both) result in a
termination, breach or violation of, or cause an acceleration or amendment of
any obligation under, (a) any provision of the Certificate of Incorporation or
Bylaws of Logisoft, as currently in effect, (b) in any material respect, any
Material Agreement (as defined in Section 3.11) to which Logisoft is a party or
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by which Logisoft or the Principals or his, her or its assets or properties are
bound, or (c) to the knowledge of Logisoft and the Principals, any federal,
state, local or foreign judgment, writ, decree, order, statute, rule or
regulation applicable to Logisoft or the Principals, or their respective assets
or properties, in each case, such that the conflict, termination, breach,
acceleration or amendment would have a Material Adverse Effect.
3.6 Litigation. There is no action, proceeding, claim or investigation
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pending against Logisoft or any Principal before any federal, state, municipal,
foreign or other court or administrative agency, department, board or
instrumentality that, if concluded adversely to Logisoft or a Principal, would
have a Material Adverse Effect, and, to the best of Logisoft's and the
Principals' knowledge, no such action, proceeding, claim or investigation has
been threatened. There is, to the best of Logisoft's and the Principals'
knowledge, no reasonable basis for any stockholder or former stockholder of
Logisoft, or any other person, firm, corporation or entity, to assert a claim
against Logisoft, any Principal or Retek based upon: (a) ownership or rights to
ownership of any shares of Logisoft Common Stock, (b) any rights as or to become
a holder of securities of Logisoft, including any option or preemptive rights or
rights to notice or to vote, or (c) any rights under any agreement among
Logisoft and any of its stockholders or former stockholders or option holders or
former option holders.
3.7 Taxes. For purposes of this Section 3.7, the terms "tax" and
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"taxes" include all federal, state, local and foreign income, gains, franchise,
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excise, property, sales, use, employment, license, payroll, occupation,
recording, value-added or transfer taxes, governmental charges, fees, levies or
assessments (whether payable directly or by withholding), and, with respect to
such taxes, any estimated taxes, interest, penalties, additions to tax and
interest on any such penalties and additions to tax. For purposes of this
Section 3.7, the terms "Return" and "Returns" include all federal, state, local
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and foreign tax returns, estimates, information statements and reports required
to be filed by Logisoft with respect to its income, assets or operations.
3.7.1 Logisoft has or will have filed all Returns for tax periods
ending before the Effective Time, other than where a failure to file a return
did not or would not have a Material Adverse Effect. All such Returns that have
been filed were (as filed or after timely amendment) true, correct and complete
in all material respects.
3.7.2 Logisoft has paid or deposited in full all taxes due and
owing or shown to be due on the Returns filed by Logisoft (including required
estimated tax payments with respect thereto), except where a failure to pay a
tax in full did not or would not have a Material Adverse Effect. Logisoft has
established a proper and adequate accrual or reserve on the Logisoft Financial
Statements (as defined below) for all taxes not yet due and owing, whether or
not shown or required to be shown on any Return, except where a failure to
establish such an accrual or reserve did not or would not have a Material
Adverse Effect.
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3.7.3 Neither Logisoft nor any of the Principals is aware of any
pending or threatened claim or assessment in writing with respect to any
deficiencies for any tax against Logisoft by any taxing authority. Logisoft has
not executed any waiver of any statute of limitations relating to taxes or any
extension of the period for the assessment or collection of any tax (other than
extensions which have expired by the Effective Time). Neither Logisoft nor any
of the Principals has received any written notification, or is otherwise aware,
that any material issues are currently under audit, examination or review by any
taxing authority regarding Logisoft.
3.7.4 There are no material liens, pledges, charges, claims,
security interests or other encumbrances covering the assets of Logisoft or the
Principals and relating or attributable to taxes, other than for taxes not yet
due and payable and others that do not have a Material Adverse Effect.
3.7.5 There is no contract, agreement, plan or arrangement,
including but not limited to the provisions of this Agreement, covering any
current or former employee of Logisoft that, individually or collectively, could
give rise to the payment of any amount with respect to which a deduction would
be disallowed under Sections 280G or 162(m) of the Internal Revenue Code of
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1986, as amended (the "Code").
3.7.6 Logisoft is not party to a tax sharing or tax allocation
agreement, and Logisoft does not owe any amount under any such agreement.
3.7.7 Logisoft is not or has not at any time been a "United States
real property holding corporation" within the meaning of Section 897(c)of the
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Code.
3.7.8 Logisoft has not filed any consent agreement under Section
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341(f) of the Code or has agreed to have Section 341(f)(2) of the Code apply to
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any disposition of a "subsection (f) asset" (as defined in Section 341(f)(4) of
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the Code) owned by Logisoft.
3.7.9 None of Logisoft's assets constitute "tax-exempt use
property" within the meaning of Section 168(h) of the Code.
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3.8 Financial Statements. Logisoft has delivered to Retek as Schedule
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3.8 of the Logisoft Schedule of Exceptions Logisoft's balance sheet as of
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December 31, 1999 and income statement and statement of cash flows for the
12-month period then ended (collectively, the "Logisoft Financial Statements").
The Logisoft Financial Statements (a) are in accordance with the books and
records of Logisoft, (b) fairly present the financial condition of Logisoft at
the dates therein indicated and the results of operations for the periods
therein specified, and (c) have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis, subject, in the
case of the Logisoft Financial Statements, to normal recurring year-end
adjustments and the absence of any notes thereto. Logisoft does not have any
debt, liability or obligation of any nature, whether accrued, absolute,
contingent or otherwise, and whether due or to become due, that is not reflected
or reserved against or disclosed in the Logisoft Financial Statements, except
for those that may have been incurred after the date of the Logisoft Financial
Statements in the ordinary course of its business, consistent with past practice
and that are not material in amount either individually or collectively.
3.9 Title to Properties. Logisoft has good and marketable title to all
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of its tangible assets as shown on the Logisoft Financial Statements Balance
Sheet, free and clear of all liens, charges, restrictions or encumbrances, other
than for taxes not yet due and payable and others that do not have a Material
Adverse Effect. All machinery and equipment included in such properties is in
good condition and repair, normal wear and tear excepted, and all leases of real
or personal property to which Logisoft is a party are fully effective. To the
knowledge of Logisoft and each of the Principals, Logisoft is not in violation
of any zoning, building, safety or environmental ordinance, regulation or
requirement or other law or regulation applicable to the operation of owned or
leased properties (the violation of which would have a Material Adverse Effect),
or has received any notice of such violation with which it has not complied or
had waived.
3.10 Absence of Certain Changes. Except as set forth on Schedule 3.10,
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since December 31, 1999, other than actions required by this Agreement
(including, without limitation, the incurrence of legal and accounting fees and
expenses in connection therewith), there has not been with respect to Logisoft:
(a) any change in the financial condition, properties, assets,
liabilities, business or operations of Logisoft which change by itself or in
conjunction with all other such changes, whether or not arising in the ordinary
course of business, has had or, to the knowledge of Logisoft and the Principals,
will have a Material Adverse Effect;
(b) any contingent liability incurred by Logisoft as guarantor,
surety or otherwise with respect to the obligations of others, which contingent
liability is in excess of $10,000 individually or $25,000 in the aggregate;
(c) any mortgage, encumbrance or lien placed on any of the
properties of Logisoft, which mortgage, encumbrance or lien is in excess of
$10,000 individually or $25,000 in the aggregate;
(d) any obligation or liability incurred thereby other than
obligations and liabilities incurred in the ordinary course of business, which
obligation or liability is in excess of $10,000 individually or $25,000 in the
aggregate;
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(e) any purchase or sale or other disposition, or any agreement or
other arrangement for the purchase, sale or other disposition, other than in the
ordinary course, of any of the properties or assets of Logisoft, which purchase,
sale, other disposition or other arrangement is in excess of $10,000
individually or $25,000 in the aggregate;
(f) any damage, destruction or loss, whether or not covered by
insurance, which has a Material Adverse Effect;
(g) any declaration, setting aside or payment of any dividend on,
or the making of any other distribution in respect of, the capital stock of
Logisoft, any split, combination or recapitalization of the capital stock of
Logisoft or any direct or indirect redemption, purchase or other acquisition of
the capital stock of Logisoft;
(h) any labor dispute or claim of unfair labor practices or, other
than changes in the ordinary course of business, consistent with past practice,
any change in the compensation payable or to become payable to Logisoft's
officers, employees or agents, any bonus payment or arrangement made to or with
any of such officers, employees or agents or any employee terminations or
resignations;
(i) any declaration or payment of an extraordinary dividend,
within the meaning of Section 1059(c) of the Code;
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(j) any payment or discharge of a lien or liability thereof which
lien was not either shown on the Logisoft Financial Statements or incurred in
the ordinary course of business thereafter; or
(k) any material transaction with any of its officers, directors,
employees or stockholders or any entity controlled by any of such individuals.
3.11 Material Agreements, Contracts and Commitments. Except as set
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forth on Schedule 3.11 of the Logisoft Schedule of Exceptions and other than
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this Agreement and the Logisoft Ancillary Agreements, neither Logisoft nor any
Principal is on the date hereof a party or subject to any oral or written
contracts, obligations, commitments, plans, leases, instruments, arrangements or
licenses which are material to the business of Logisoft (each a "Material
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Agreement"), including, but not limited to any:
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(a) Contract, commitment, letter contract or purchase order
providing for payments by or to Logisoft in an aggregate amount of (1) $25,000
or more in the ordinary course of business to any one vendor or customer; or (2)
$10,000 or more not in the ordinary course of business to any one vendor or
customer;
(b) License agreement as licensor or licensee with annual fees in
excess of $25,000;
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(c) Consulting, development or similar agreement under which
Logisoft currently provides or will provide any custom software development,
training, documentation, personnel placements, advice, consulting services or
other products or services to a customer of Logisoft (collectively, the "Current
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Service Agreements");
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(d) Contract for the current or future sale, provision or
manufacture of products (including computer software), material or supplies from
Logisoft or in which Logisoft has granted or received distribution rights, most
favored customer pricing provisions or exclusive marketing rights relating to
any product or services, group of products or services or territory
(collectively, "Current Sales Agreements," together with the Current Service
Agreements, the "Customer Agreements");
(e) Contract or commitment for the employment of any officer,
employee or consultant of Logisoft or any other type of contract or
understanding with any officer, employee or consultant of Logisoft which is not
immediately terminable by Logisoft without cost or other liability;
(f) Agreement for the lease of real or personal property involving
annual payments by or to Logisoft in an amount of $25,000 or more;
(g) Joint venture contract or arrangement or any other agreement
that involves a sharing of profits with other persons;
(h) Written dealer, distributor, sales representative, original
equipment manufacturer, value added remarketer or other agreement for the
ongoing distribution of any products or services of Logisoft ;
(i) Instrument evidencing or related in any way to indebtedness
for borrowed money by way of direct loan, sale of debt securities, purchase
money obligation, conditional sale, guarantee, or otherwise, except for trade
indebtedness incurred in the ordinary course of business, and except as
disclosed in the Logisoft Financial Statements;
(j) Stock redemption or purchase agreement yet to be performed.
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All Material Agreements constitute valid and enforceable obligations
of the parties thereto (except as to the effect, if any, of (i) applicable
bankruptcy and other similar laws affecting the rights of creditors generally,
(ii) rules of law governing specific performance, injunctive relief and other
equitable remedies, and (iii) the enforceability of provisions requiring
indemnification in connection with the offering, issuance or sale of
securities), and are and will, immediately after the Effective Time, be in full
force and effect. Neither Logisoft nor the Principals is, nor, to the best
knowledge of Logisoft and the Principals, is any other party thereto, in breach
or default in any material respect under the terms of any such Material
Agreement. Neither Logisoft nor the Principals is a party to any contract,
agreement or arrangement which has had, or could reasonably be expected to have,
a Material Adverse Effect. Logisoft has no material liability for renegotiation
of government contracts or subcontracts, if any.
3.12 Compliance with Laws. Logisoft has complied, or prior to the
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Closing Date will have complied, and is or will be at the Closing Date in full
compliance, in all material respects, with all applicable laws, ordinances and
regulations, and rules, and all orders, writs, injunctions, awards, judgments
and decrees, applicable to it or to its assets, properties, and business (the
violation of which would have a Material Adverse Effect), including, without
limitation: (a) all applicable federal and state securities laws and
regulations, (b) all applicable federal, state and local laws, ordinances and
regulations, and all orders, writs, injunctions, awards, judgments and decrees,
pertaining to (i) the sale, licensing, leasing, ownership or management of
Logisoft's owned, leased or licensed real or personal property, products and
technical data, and (ii) employment and employment practices, terms and
conditions of employment, and wages and hours, (c) the Export Administration Act
and regulations promulgated thereunder and all other laws, regulations, rules,
orders, writs, injunctions, judgments and decrees applicable to the export or
re-export of controlled commodities or technical data and (d) the Immigration
Reform and Control Act; provided, however, that this Section 3.12 shall not be
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deemed to apply to any matters within the general scope of any other
representation in this Section 3. Logisoft has received all permits and
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approvals from, and has made all filings with, third parties, including
government agencies and authorities, that are necessary in connection with its
present business and which, if not received or filed, would have a Material
Adverse Effect. There are no legal or administrative proceedings or
investigations pending or threatened, that, if enacted or determined adversely
to Logisoft or any Principal, would result in any Material Adverse Effect.
3.13 Certain Transactions and Agreements. None of the executive
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officers, directors or affiliates (as that term is defined in Rule 405 under the
Securities Act) of Logisoft (each, a "Insider") nor any member of their
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immediate families is or has been directly or indirectly interested in any
contract or informal arrangement with Logisoft within the last three years,
except for compensation as an officer, director or employee of Logisoft. None
of the Insiders nor any member of their immediate families has any interest in
any property, real or personal, tangible or intangible, including inventions,
patents, copyrights, trademarks or trade names or trade secrets, used in or
pertaining to the business of Logisoft, except for the normal rights of a
stockholder.
3.14 Employees, ERISA and Other Compliance.
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3.14.1 Logisoft has complied with all applicable agreements, laws,
rules and regulations relating to the employment of labor, including those
related to wages, hours and payroll taxes. Logisoft has withheld and remitted
to the proper Governmental Authorities all amounts required by law or agreement
to be withheld from wages or salaries of its employees and is not liable for any
arrearage of wages or any Taxes or penalties for failure to comply with any of
the foregoing. Logisoft has had no labor troubles in the sense that within the
last twelve (12) months there have been no strikes, work stoppages, slowdowns,
threatened unfair labor practice charges or other material controversies pending
or threatened by any of its employees; and Logisoft has not entered into any
collective bargaining agreement and no union represents, or in the past twelve
(12) months has demanded or requested to represent or is currently attempting to
represent, any of the employees of Logisoft. Except as set forth on Schedule
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3.11 of the Logisoft Schedule of Exceptions, Logisoft has not promulgated any
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policy or entered into any agreement relating to the payment of any medical
insurance premium, retirement pay, severance pay, vacation pay or sick leave to
any present or former employees of Logisoft.
3.14.2 All employee profit-sharing, incentive, deferred compensation,
welfare, pension, retirement, group insurance, bonus, severance and other
employee benefit plan, arrangement or agreement (oral or written), regardless of
whether any such plan, arrangement or agreement is an "employee benefit plan"
within the meaning of Section 3(3) of the Employee Retirement Income Security
------------
Act of 1974, as amended ("ERISA"), maintained or previously maintained or
contributed to or previously contributed to by Logisoft for the benefit of
current or former personnel ("Employee Plans"), by their terms and operation are
in material compliance with all applicable laws (including, but not limited to,
ERISA and the Code). There are no actions, suits or claims pending or
threatened (other than routine noncontested claims for benefits) or, to
Logisoft's knowledge, no set of circumstances exist which may reasonably give
rise to such a claim against any Employee Plan or administrator or fiduciary of
any such Employee Plan.
3.14.3 To the knowledge of Logisoft and the Principals and except for
matters which would not have a Material Adverse Effect, no employee of Logisoft
is in violation of any term of any employment contract, patent disclosure
agreement, noncompetition agreement, or any other contract or written agreement,
or any restrictive covenant contained in any such agreement relating to the
right of any such employee to be employed thereby, or to use trade secrets or
proprietary information of others, and the employment of such employees does not
subject Logisoft to any material liability.
3.15 Corporate Documents. Logisoft has made available to Retek for
--------------------
examination all documents and information which have been requested by Retek's
counsel.
3.16 Intentionally Omitted.
-12-
3.17 Disclosure. To the knowledge of Logisoft and the Principals,
----------
neither this Agreement, its exhibits and schedules, nor any of the certificates
or documents to be delivered by Logisoft or the Principals to Retek under this
Agreement, taken together, contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make the statements
contained herein and therein, in light of the circumstances under which such
statements were made, not misleading.
3.18 Insurance. Logisoft maintains and at all times during the prior
---------
three years has maintained fire and casualty, general liability, business
interruption and product liability insurance which it believes to be reasonably
prudent for similarly sized and similarly situated businesses.
3.19 Environmental Matters.
----------------------
3.19.1 To the best of Logisoft's and Principal's knowledge, during
the period that Logisoft has leased or owned its properties or owned or operated
any facilities, there have been no disposals or releases of Hazardous Materials
(as defined below) by Logisoft, or to Logisoft's and the Principals' knowledge,
by others, on, from or under such properties or facilities, the liability for
which would have a Material Adverse Effect. Logisoft and the Principals have no
knowledge of any presence, generation, manufacturing, disposals or releases of
Hazardous Materials on, from or under any of such properties or facilities,
which may have occurred prior to Logisoft having taken possession of any of such
properties or facilities, the liability for which would have a Material Adverse
Effect. For the purposes of this Agreement, the terms "disposal" and "release"
-------- -------
shall have the definitions assigned thereto by the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. ' 9601 et seq., as
amended ("CERCLA"). For the purposes of this Agreement, "Hazardous Materials"
------ -------------------
shall mean any hazardous or toxic substance, material or waste which is or
becomes prior to the Closing Date regulated under, or defined as a "hazardous
substance," "pollutant," "contaminant," "toxic chemical," "hazardous material,"
"toxic substance" or "hazardous chemical" under (i) CERCLA; (ii) the Emergency
Planning and Community Right-to-Know Act, 42 U.S.C. ' 1801 et seq.; (iii) the
Toxic Substance Control Act, 15 U.S.C. ' 2601 et seq.; (iv) the Occupational
Safety and Health Act of 1970, 29 U.S.C. ' 651 et seq.; (v) any applicable
federal, state or local statute or ordinance that has a scope or purpose similar
to those identified above; or (vi) regulations promulgated under any of the laws
or statutes identified above.
3.19.2 None of the properties or facilities of Logisoft is in
material violation of any federal, state or local law, ordinance, regulation or
order relating to industrial hygiene or to the environmental conditions on,
under or about such properties or facilities, including, but not limited to,
soil and ground water condition. During the time that Logisoft has owned or
leased its properties and facilities, neither Logisoft nor, to Logisoft's and
the Principals' knowledge, any third party, has used, generated, manufactured or
stored on, under or about such properties or facilities or transported to or
from such properties or facilities any Hazardous Materials except in substantial
accordance with applicable environmental laws.
-13-
3.19.3 During the time that Logisoft has owned or leased its
respective properties and facilities, there has been no litigation brought or,
to the knowledge of Logisoft and the Principals, threatened against Logisoft by,
or any settlement reached by Logisoft with, any party or parties alleging the
presence, disposal, release or threatened release of any Hazardous Materials on,
from or under any of such properties or facilities.
3.20 Books and Records. The books, records and accounts of Logisoft
-------------------
(a) are in all material respects true, complete and correct, (b) have been
maintained in accordance with good business practices on a basis consistent with
prior years, (c) are stated in reasonable detail and accurately and fairly
reflect the material transactions and dispositions of the assets of Logisoft,
and (d) accurately and fairly reflect the basis for the Logisoft Financial
Statements.
3.21 Certain Dispositions After Effective Time. None of the Principals
-----------------------------------------
has any present plan or intention, or any binding commitment, to dispose, after
the Effective Time, of an amount of Retek Common Stock that would cause the
Principals, in the aggregate, to have disposed of such stock in an amount equal
in value to 50% or more of the value of Logisoft Common Stock outstanding
immediately prior to the Effective Time.
4. REPRESENTATIONS AND WARRANTIES OF RETEK AND MERGER SUB
Retek and Merger Sub hereby jointly and severally represent and warrant as
follows, except as set forth in the Retek Schedule of Exceptions (in numbered
paragraphs that correspond to the Section numbers below) simultaneously
delivered to Logisoft and the Principals with the exception of this Agreement:
4.1 Organization, Assets and Liabilities.
---------------------------------------
-14-
------
4.1.1 Organization, Good Standing and Qualification. Retek is a
-------------------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the corporate power and authority to own,
operate and lease its properties and to carry on its business as now conducted
and as proposed to be conducted. Merger Sub is a corporation duly organized,
validly existing and in good standing under the laws of the State of New York
and has the corporate power and authority to own, operate and lease its
properties and carry on its business as now conducted and as proposed to be
conducted. Merger Sub was formed in March, 2000 and has conducted no business
or operations prior to the date hereof. Retek is qualified to do business as a
foreign corporation in each jurisdiction where failure to be so qualified could
reasonably be expected to have a material adverse effect on the business,
operations, financial condition or prospects of Retek and its subsidiaries taken
as a whole (for purposes of this Sections 4 and 6, a "Material Adverse Effect").
---------------- -----------------------
4.1.2 Assets and Liabilities. As of the Closing Date Retek will have
----------------------
no assets or liabilities except: (a) the Note in the principal amount of
$720,000 from Xxxx X. Xxxx to Xxxxx pursuant to the Stock Purchase Agreement
referenced in Section 8.10 hereof; (b) cash in an amount that is not less than
------------
Five Million Five Hundred Thousand Dollars ($5,500,000); and (c) 100 shares of
Logisoft, issued pursuant to this Agreement.
4.2 Power, Authorization and Validity.
------------------------------------
4.2.1 Each of Retek and Merger Sub has the corporate right, power,
legal capacity and authority to enter into and perform his or its respective
obligations under this Agreement, and all agreements to which Retek and Merger
Sub are or will be a party that are required to be executed pursuant to this
Agreement (the "Retek Ancillary Agreements"). The execution, delivery and
----------------------------
performance of this Agreement and the Retek Ancillary Agreements have been duly
and validly approved and authorized by all necessary corporate action on the
part of each of Retek and Merger Sub.
4.2.2 No filing, authorization or approval, governmental or
otherwise, is necessary to enable either of Retek or Merger Sub to enter into,
and to perform his or its respective obligations under, this Agreement and the
Retek Ancillary Agreements, except for (a) the filing of the Certificate of
Merger with the New York Secretary of State, (b) the filing of appropriate
documents with the relevant authorities of other states in which Retek is
qualified to do business, if any, and (c) such filings as may be required to
comply with federal and state securities laws.
4.2.3 This Agreement and the Retek Ancillary Agreements are, or
when executed by Retek and Merger Sub, as applicable, will be, valid and binding
obligations of both of Retek and Merger Sub, as applicable, enforceable in
accordance with their respective terms, except as to the effect, if any, of (a)
applicable bankruptcy and other similar laws affecting the rights of creditors
generally, (b) rules of law governing specific performance, injunctive relief
and other equitable remedies, and (c) the enforceability of provisions requiring
indemnification in connection with the offering, issuance or sale of securities;
provided, however, that the Certificate of Merger will not be effective until
the Effective Time.
-15-
4.3 Capitalization. The capitalization of Retek and Merger Sub consist
--------------
of the following:
4.3.1 Retek Capital Stock. A total of 60,000,000 authorized
---------------------
shares of Common Stock, $0.0001 par value per share (the "Common Stock"), of
which 12,321,124 shares are outstanding as of the date of this Agreement. All
issued and outstanding shares of Retek capital stock have been duly authorized
and validly issued, are fully paid and nonassessable, and have been offered,
issued, sold and delivered by Retek in compliance with all registration or
qualification requirements (or applicable exemptions therefrom) of applicable
federal and state securities laws.
4.3.2 Retek Options, Warrants, Reserved Shares. As of the date of
----------------------------------------
this Agreement, except for certain warrants (the "Bankruptcy Warrants") issued
under the Retek Disclosure Statement and Plan of Reorganization, filed July 3,
1997 in the United States Bankruptcy Court for the Northern District of Oklahoma
(Case No. 95-00821-W), there are no outstanding any options, warrants, calls,
commitments, rights (including rights of first refusal, conversion or preemptive
rights) or agreements for the purchase or acquisition from Retek of any shares
of its capital stock or any securities convertible into or ultimately
exchangeable or exercisable for any shares of Retek's capital stock or
obligating Retek to grant, extend, or enter into any such option, warrant, call,
commitment, conversion privilege or other right or agreement, and there is no
liability for dividends accrued but unpaid. Apart from the exception noted in
this Section 4.3.2, there are no voting agreements, rights of first refusal or
--------------
other restrictions (other than normal restrictions on transfer under applicable
federal and state securities laws) or registration rights applicable to any of
Retek's outstanding securities. Retek is not under any obligation to register
under the Securities Act any of its presently outstanding securities or any
securities that may be subsequently issued.
4.3.3 Merger Sub. A total of two hundred(200) authorized shares
-----------
of Common Stock without par value per share for Merger Sub, one hundred (100) of
which are validly issued, outstanding, fully paid and nonassessable (except as
provided in BCL ' 630). There are not outstanding any options, warrants, rights
(including conversion of preemptive rights) or agreements for the purchase or
acquisition from Merger Sub of any shares of its capital stock or any securities
convertible into or ultimately exchangeable or exercisable for any shares of
Merger Sub's capital stock.
4.4 Subsidiaries. Retek does not presently own or control, directly or
------------
indirectly, any interest in any other corporation, partnership, trust, joint
venture, association, or other entity, other than Keystone Laboratories, Inc.,
and Merger Sub. Merger Sub does not presently own or control, directly or
indirectly, any interest in any other corporation, partnership, trust, joint
venture, association, or other entity.
-16-
4.5 No Violation of Existing Agreements. Neither the execution and
---------------------------------------
delivery of this Agreement or any Retek Ancillary Agreement, nor the
consummation of the transactions contemplated hereby or thereby, will conflict
with, or (with or without notice or lapse of time, or both) result in a
termination, breach, impairment or violation of, or cause an acceleration or
amendment of any obligation under, (a) any provision of the Articles or
Certificate of Incorporation or Bylaws of Retek and Merger Sub, as currently in
effect, (b) in any material respect, any material instrument or contract to
which Retek and Merger Sub is a party or by which any of their assets or
properties are bound, or (c) any federal, state, local or foreign judgment,
writ, decree, order, statute, rule or regulation applicable to Retek and Merger
Sub or their assets or properties, in each case, such that the conflict,
termination, breach, acceleration or amendment would have a Material Adverse
Effect.
4.6 Litigation. There is no action, proceeding, claim or investigation
----------
pending against either Retek or Merger Sub before any federal, state, municipal,
foreign or other court or administrative agency, department, board or
instrumentality that, if concluded adversely to either Retek or Merger Sub,
would have a Material Adverse Effect, and, to the best of Retek and Merger Sub's
knowledge, no such action, proceeding, claim or investigation has been
threatened. There is, to the best of Retek and Merger Sub's knowledge, no
reasonable basis for any shareholder or former shareholder of Retek or Merger
Sub, or any other person, firm, corporation or entity, to assert a claim against
Retek or Merger Sub based upon: (a) ownership or rights to ownership of any
shares of Retek or Merger Sub's capital stock, (b) any rights as or to become a
holder of securities of Retek or Merger Sub, including any option or preemptive
rights or rights to notice or to vote, or (c) any rights under any agreement
among Retek or Merger Sub and any of its shareholders or former shareholders or
option holders or former option holders.
-17-
4.7 Taxes. Retek and Merger Sub have timely filed all tax returns and
-----
reports required by law, other than where a failure to file a return did not or
would not have a Material Adverse Effect, and has never been audited by any
state or federal taxing authority. All tax returns and reports of Retek and
Merger Sub, as applicable, are true and correct in all material respects. Retek
and Merger Sub have paid all taxes and other assessments due, except those, if
any, currently being contested by it in good faith (for which it has established
a proper reserve). Neither Retek nor Merger Sub is aware of any pending or
threatened claim or assessment with respect to any deficiencies for any tax in
writing against either Retek or Merger Sub by any taxing authority. Neither
Retek nor Merger Sub has executed any waiver of any statute of limitations
relating to taxes or any extension of the period for the assessment or
collection of any tax (other than extensions which have expired by the Effective
Time). Neither Retek nor Merger Sub has received any written notification, and
is not otherwise aware, that any material issues are currently under audit,
examination or review by any taxing authority regarding either Retek or Merger
Sub. There are no material liens, pledges, charges, claims, security interests
or other encumbrances covering the assets of Retek and relating or attributable
to taxes, other than for taxes not yet due and payable and others that do not
have a Material Adverse Effect. Neither Retek nor Merger Sub is a party to a
tax sharing or tax allocation agreement, and Retek nor Merger Sub owes any
amount under any such agreement.
4.8 Financial Statements. Retek's report to the Securities and
---------------------
Exchange Commission on form 10-QSB for the period ending December 31, 1999 has
attached to it (a) an unaudited balance sheet of Retek as of December 31, 1999
(the "Retek December 1999 Balance Sheet") and income statement and statement of
---------------------------------
cash flows for the 6-month period then ended, which are collectively referred to
herein as the "Retek Financial Statements"). The Retek Financial Statements (a)
--------------------------
are in accordance with the books and records of Retek, (b) fairly present the
financial condition of Retek at the dates therein indicated and the results of
operations for the periods therein specified, and (c) have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis. Retek has no debt, liability or obligation of any nature, whether
accrued, absolute, contingent or otherwise, and whether due or to become due,
that is not reflected or reserved against or disclosed in the Retek Financial
Statements, except for those that may have been incurred after the date of the
Retek Financial Statements in the ordinary course of its business, consistent
with past practice and that are not material in amount either individually or
collectively.
4.9 Title to Properties.
---------------------
4.9.1 Retek has good and marketable title to all of its tangible
assets shown on the Retek December 1999 Balance Sheet, free and clear of all
liens, charges, restrictions or encumbrances, other than for taxes not yet due
and payable and others that do not have a Material Adverse Effect. With respect
to the property and assets it leases, Retek is in material compliance with such
leases.
4.9.2 Merger Sub has been newly formed for the sole and express
purpose of participating in the Merger and has at no time engaged in any
activities or owned any assets except as necessary for such purpose.
4.10 Absence of Certain Changes. Since December 31, 1999, other than
----------------------------
actions required by this Agreement (including, without limitation, the
incurrence of legal and accounting fees and expenses in connection therewith),
there has not been with respect to Retek and Merger Sub.
(a) any change in its financial condition, properties, assets,
liabilities, business or operations from that reflected in the Retek Financial
Statements, other than those that do not have a Material Adverse Effect;
(b) any contingent liability incurred by it as guarantor, surety
or otherwise with respect to the obligations of others, which contingent
liability is in excess of $50,000 individually or in excess of $100,000 in the
aggregate;
-18-
(c) any mortgage, encumbrance or lien placed on any of its
properties, which mortgage, encumbrance or lien is in excess of $100,000
individually or in excess of $250,000 in the aggregate;
(d) any obligation or liability incurred by it other than
obligations and liabilities incurred in the ordinary course of business, which
obligation or liability is in excess of $100,000 individually or in excess of
$250,000 in the aggregate;
(e) any purchase or sale or other disposition, or any agreement or
other arrangement for the purchase, sale or other disposition, of any of its
properties or assets, which purchase, sale, other disposition or other
arrangement is in excess of $100,000 individually or $250,000 in the aggregate;
(f) any damage, destruction or loss, whether or not covered by
insurance, which has a Material Adverse Effect;
(g) any declaration, setting aside or payment of any dividend on,
or the making of any distribution in respect of, its capital stock, or any
split, combination or recapitalization of its capital stock or any direct or
indirect redemption, purchase or other acquisition of its capital stock,
including, without limitation, any extraordinary dividend within the meaning of
Section 1059(c) of the Code;
----------------
(h) any labor dispute or claim of unfair labor practices;
(i) any payment or discharge of a lien or liability thereof which
lien was not either shown on the Retek Balance Sheet or incurred in the ordinary
course of business thereafter; or
(j) entered into any material transactions with any of its
officers, directors, employees or stockholders or any entity controlled by any
of such individuals.
-19-
4.11 Material Agreements, Contracts and Commitments. All oral or
--------------------------------------------------
written contracts, obligations, commitments, plans, leases, instruments,
arrangements or licenses which are material to the business of Retek and its
subsidiaries taken as a whole (for purposes of this Section 4.11, a "Material
------------ --------
Agreement") constitute valid and enforceable obligations of the parties thereto
-------
(except as to the effect, if any, of (i) applicable bankruptcy and other similar
laws affecting the rights of creditors generally, (ii) rules of law governing
specific performance, injunctive relief and other equitable remedies, and (iii)
the enforceability of provisions requiring indemnification in connection with
the offering, issuance or sale of securities); and are in full force and effect.
Retek is not, nor, to the best knowledge of Retek, is any other party thereto,
in breach or default in any material respect under the terms of any such
Material Agreement. A copy of each Material Agreement has been made available
to counsel for Logisoft and the Principals. Retek is not a party to any
contract or arrangement which, in the absence of a breach by the other party or
parties thereto, has had or could reasonably be expected to have a Material
Adverse Effect. Retek does not have any material liability for renegotiation of
government contracts or subcontracts, if any.
4.12 Status of Proprietary Assets. Retek owns all right, title or
-------------------------------
interest in, or has the rights to use, sell or license, all Intellectual
Property Rights necessary or required for the conduct of, or used in, its
business as presently conducted (such Intellectual Property Rights being
hereinafter collectively referred to as the "Retek IP Rights") and such rights
---------------
to use, sell or license are reasonably sufficient for the conduct of its
business as presently conducted. Except for matters which would not have a
Material Adverse Effect, neither the manufacture, marketing, license, sale or
intended use of any product currently licensed or sold by Retek or currently
under development by Retek violates any license or agreement between Retek and
any third party or infringes any Intellectual Property Right of any other party;
and, except for matters which would not have a Material Adverse Effect, there is
no pending or, to the best knowledge of Retek, threatened claim or litigation
contesting the validity, ownership or right to use, sell, license or dispose of
any Retek IP Right; nor, to the best knowledge of Retek without any independent
investigation thereof, is there any basis for any such claim; nor has Retek
received any notice asserting that any Retek IP Right or the proposed use, sale,
license or disposition thereof conflicts or will conflict with the rights of any
other party, nor, to the best knowledge of Retek, is there any basis for any
such assertion.
4.13 Compliance with Laws. Retek and Merger Sub have complied, or
----------------------
prior to the Closing Date will have complied, and are or will be at the Closing
Date in full compliance, in all material respects, with all applicable laws,
ordinances and regulations, and rules, and all orders, writs, injunctions,
awards, judgments and decrees, applicable to it or to its assets, properties,
and business (the violation of which would have a Material Adverse Effect),
including, without limitation: (a) all applicable federal and state securities
laws and regulations, (b) all applicable federal, state and local laws,
ordinances and regulations, and all orders, writs, injunctions, awards,
judgments and decrees, pertaining to (i) the sale, licensing, leasing, ownership
or management of Retek's owned, leased or licensed real or personal property,
products and technical data, and (ii) employment and employment practices, terms
and conditions of employment, and wages and hours, (c) the Export Administration
Act and regulations promulgated thereunder and all other laws, regulations,
rules, orders, writs, injunctions, judgments and decrees applicable to the
export or re-export of controlled commodities or technical data and (d) the
Immigration Reform and Control Act. Retek has received all permits and
approvals from, and has made all filings with, third parties, including
government agencies and authorities, that are necessary in connection with its
present business and which, if not received or filed, would have a Material
Adverse Effect. There are no legal or administrative proceedings or
investigations pending or threatened, that, if enacted or determined adversely
to Retek, would result in any Material Adverse Effect.
-20-
4.14 Certain Transactions and Agreements. None of the executive
--------------------------------------
officers, directors or affiliates of Retek (each, an "Retek Insider") nor any
-------------
member of their immediate families is or has been directly or indirectly
interested in any contract or informal arrangement with Retek within the last
twelve (12) months, except for compensation as an officer, director or employee
of Retek. None of the Retek Insiders nor any member of their immediate families
has any interest in any property, real or personal, tangible or intangible,
including inventions, patents, copyrights, trademarks or trade names or trade
secrets, used in or pertaining to the business of Retek, except for the normal
rights of a shareholder.
4.15 Governmental Consents. No consent, approval, order or
----------------------
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
Retek or Merger Sub is required in connection with the consummation of the
transactions contemplated by this Agreement, except for such qualifications or
------ ---
filings under the Securities Act and the regulations thereunder and all other
applicable securities laws as may be required in connection with the
transactions contemplated by this Agreement. All such qualifications and
filings will, in the case of qualifications, be effective on the Closing and
will, in the case of filings, be made within the time prescribed by law.
4.16 Employees, ERISA and Other Compliance.
-----------------------------------------
4.16.1 Retek has complied with all applicable agreements, laws, rules
and regulations relating to the employment of labor, including those related to
wages, hours and payroll taxes. Retek has withheld and remitted to the proper
Governmental Authorities all amounts required by law or agreement to be withheld
from wages or salaries of its employees and is not liable for any arrearage of
wages or any Taxes or penalties for failure to comply with any of the foregoing.
Retek has had no labor troubles in the sense that within the last twelve (12)
months there have been no strikes, work stoppages, slowdowns, threatened unfair
labor practice charges or other material controversies pending or threatened by
any of its employees; and Retek has not entered into any collective bargaining
agreement and no union represents, or in the past twelve (12) months has
demanded or requested to represent or is currently attempting to represent, any
of the employees of Retek . Except as set forth on Schedule 4.16 of the Retek
-------------
Schedule of Exceptions, Logisoft has not promulgated any policy or entered into
any agreement relating to the payment of any medical insurance premium,
retirement pay, severance pay, vacation pay or sick leave to any present or
former employees of Retek.
-21-
4.16.2 All employee profit-sharing, incentive, deferred compensation,
welfare, pension, retirement, group insurance, bonus, severance and other
employee benefit plans, arrangements or agreements (oral or written), regardless
of whether any such plan, arrangement or agreement is an "employee benefit plan"
within the meaning of Section 3(3) of the Employee Retirement Income Security
------------
Act of 1974, as amended ("ERISA"), maintained or previously maintained or
contributed to or previously contributed to by Retek for the benefit of current
or former personnel ("Employee Plans"), by their terms and operation are in
material compliance with all applicable laws (including, but not limited to,
ERISA and the Code). There are no actions, suits or claims pending or
threatened (other than routine noncontested claims for benefits) or, to the
knowledge of Retek, no set of circumstances exist which may reasonably give rise
to such a claim against any Employee Plan or administrator or fiduciary of any
such Employee Plan.
4.16.3 To the knowledge of Retek, and except for matters which would
not have a Material Adverse Effect, no employee of Retek is in violation of any
term of any employment contract, patent disclosure agreement, noncompetition
agreement, or any other contract or written agreement, or any restrictive
covenant contained in any such agreement relating to the right of any such
employee to be employed thereby, or to use trade secrets or proprietary
information of others, and the employment of such employees does not subject
Retek to any material liability.
4.17 Corporate Documents. Retek has made available to Logisoft and the
-------------------
Principals for examination all documents and information which have been
requested by Logisoft's and the Principals' counsel, including, without
limitation, the following: (a) copies of Retek's and Merger Sub's Articles or
Certificate of Incorporation, as applicable, and Bylaws as currently in effect;
(b) Retek and Merger Sub's Minute Books containing all records of all
proceedings, consents, actions and meetings of the stockholders, the board of
directors and any committees of Retek and Merger Sub, as applicable; and (c)
Retek's and Merger Sub's stock ledger or stockholder lists and journal
reflecting stock issuances and transfers.
4.18 Intentionally Omitted.
4.19 Disclosure. To the best knowledge of Retek, neither this
----------
Agreement, its exhibits and schedules, nor any of the certificates or documents
to be delivered by Retek or Merger Sub to Logisoft and the Principals under this
Agreement, taken together, contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make the statements
contained herein and therein, in light of the circumstances under which such
statements were made, not misleading.
4.20 Insurance. Retek does not maintain fire and casualty, general
---------
liability, business interruption or product liability insurance except, as set
forth as Exhibit 4.20 to the Retek Schedule of Exceptions.
-------------
-22-
4.21 Environmental Matters.
----------------------
4.22.1 During the period that Retek has leased or owned its
properties or owned or operated any facilities, there have been no disposals or
releases of Hazardous Materials (as defined below) by Retek, or to Retek's
knowledge, by others, on, from or under such properties or facilities, the
liability for which would have a Material Adverse Effect. Retek has no
knowledge of any presence, generation, manufacturing, disposals or releases of
Hazardous Materials on, from or under any of such properties or facilities,
which may have occurred prior to Retek having taken possession of any of such
properties or facilities, the liability for which would have a Material Adverse
Effect
4.22.2 None of the properties or facilities of Retek is in
material violation of any federal, state or local law, ordinance, regulation or
order relating to industrial hygiene or to the environmental conditions on,
under or about such properties or facilities, including, but not limited to,
soil and ground water condition. During the time that Retek has owned or leased
its properties and facilities, neither Retek nor, to the knowledge of Retek, any
third party, has used, generated, manufactured or stored on, under or about such
properties or facilities or transported to or from such properties or facilities
any Hazardous Materials except in substantial accordance with applicable
environmental laws.
4.22.3 During the time that Retek has owned or leased its
properties and facilities, there has been no litigation brought or, to the
knowledge of Retek, threatened against Retek by, or any settlement reached by
Retek with, any party or parties alleging the presence, disposal, release or
threatened release of any Hazardous Materials on, from or under any of such
properties or facilities.
4.23 Real Property Holding Corporation Status. Retek and the Merger
-------------------------------------------
Sub is not and has at no time been a "United States real property holding
corporation" within the meaning of Section 897(c) of the Code.
---------------
4.24 Shares Issued in Merger. The Retek Common Stock to be issued to
-------------------------
the stockholders of Logisoft in the Merger, when issued by Retek pursuant to the
terms of this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable, free and clear of all liens, claims, pledges, options, adverse
claims, assessments or charges of any nature whatsoever, and will have been
issued materially in compliance with all registration or qualification
requirements (or applicable exemptions therefrom) of applicable federal and
state securities laws.
-23-
4.25 Books and Records. The books, records and accounts of Retek and
-------------------
Merger Sub (a) are in all material respects true, complete and correct, (b) have
been maintained in accordance with good business practices on a basis consistent
with prior years, (c) are stated in reasonable detail and accurately and fairly
reflect the material transactions and dispositions of the assets of Retek and
Merger Sub, as applicable, and (d) accurately and fairly reflect the basis for
the Retek Financial Statements.
4.26 Control of Merger Sub. At all times prior to and as of the
------------------------
Effective Time, Retek will be in "control" of Merger Sub, as such term is
defined in Section 368(c) of the Code.
---------------
5. LOGISOFT PRECLOSING COVENANTS
During the period from the date of this Agreement until the earlier of the
Effective Time or the termination of this Agreement pursuant to Section 10
----------
hereof, each of Logisoft and the Principals covenants and agrees as follows:
5.1 Advice of Changes. Logisoft will, and the Principals will cause
-------------------
Logisoft to, promptly advise Retek in writing (a) of any event occurring
subsequent to the date of this Agreement that would render any representation or
warranty of Logisoft or the Principals contained in this Agreement, if made on
or as of the date of such event or the Closing Date, untrue or inaccurate in any
material respect and (b) of any change in the business, results of operations or
financial condition of Logisoft that could reasonably be expected to have a
Material Adverse Effect.
5.2 Conduct of Business. Logisoft will, and the Principals will cause
--------------------
Logisoft to, continue to conduct its business and use commercially reasonable
efforts to maintain its business relationships in the ordinary and usual course
and will not, and each of the Principals will cause Logisoft not to, without the
prior written consent of Retek (other than actions required by this Agreement,
as required by law or in connection with the performance of agreements disclosed
in the Logisoft Schedule of Exceptions):
(a) borrow any money;
(b) enter into any transaction not in the ordinary course of
business or which involves an expense or capital commitment by Logisoft in
excess of $10,000, or which obligates Logisoft for a period exceeding six (6)
months;
(c) encumber or permit to be encumbered any of its assets or grant
liens therein;
(d) dispose of any portion of any of the assets of Logisoft with a
value exceeding $5,000 (other than in the ordinary course of business);
(e) enter into any lease or contract for the purchase or sale of
any property, real or personal, except in the ordinary course of business;
-24-
(f) fail to maintain any of the equipment and other assets of
Logisoft in good working condition and repair according to the standards
Logisoft has maintained to the date of this Agreement, subject only to ordinary
wear and tear;
(g) pay any bonus, royalty, increased salary or special
remuneration to any officer, employee or consultant or agree to same or enter
into any new employment, severance, "golden parachute" or consulting agreement
with any such person;
(h) change accounting methods;
(i) declare, set aside or pay any cash or stock dividend or other
distribution in respect of capital stock, or redeem or otherwise acquire any of
its capital stock;
(j) amend or terminate any contract, agreement or license to which
Logisoft is a party except those amended or terminated in the ordinary course of
business consistent with past practice, and which are not material in amount or
effect;
(k) lend any amount to any person or entity, other than advances
for travel and expenses which are incurred in the ordinary course of business
consistent with past practice;
(l) guarantee or act as a surety for any obligation except for the
endorsement of checks and other negotiable instruments in the ordinary course of
business consistent with past practice;
(m) waive or release any material right or claim except in the
ordinary course of business consistent with past practice;
(n) split or combine the outstanding shares of its capital stock
of any class or enter into any recapitalization affecting the number of
outstanding shares of its capital stock of any class or affecting any other of
its securities;
(o) merge, consolidate or reorganize with, or acquire any entity;
(p) amend its Certificate of Incorporation or Bylaws;
(q) issue or sell any shares of its capital stock of any class;
(r) license any of its technology or intellectual property except
in the ordinary course of business consistent with past practice;
-25-
(s) agree to any audit assessment by any tax authority (unless the
amount thereof is not material or has been adequately accrued or reserved on the
Logisoft Financial Statements) or file any federal or state income or franchise
tax return unless (i) the amount payable with respect thereto is not material or
has been adequately accrued or reserved on the Logisoft Financial Statements or
(ii) copies of such returns have been delivered to Retek for its review and
approved by Retek prior to filing;
(t) change any insurance coverage or issue any certificates of
insurance except as is routinely done in the ordinary course of business of
Logisoft;
(u) hire any employee or consultant;
(v) adopt or amend any employee benefit plan;
(w) enter into any contracts for the sale of advertising in an
amount exceeding $10,000 or for longer than thirty (30) days; or
(x) agree to do any of the things described in the preceding
clauses 5.2(a) through (w).
5.3 Regulatory Approvals. Logisoft will, and the Principals will cause
--------------------
Logisoft to, execute and file, or join in the execution and filing, of any
application or other document that may be required to be filed by it in order to
obtain the authorization, approval or consent of any governmental body (federal,
state, local or foreign) which may be reasonably required, in connection with
the consummation of the transactions contemplated by this Agreement. Logisoft
will, and the Principals will cause Logisoft to, use its best efforts to obtain
all such authorizations, approvals and consents.
5.4 Necessary Consents. Logisoft will, and the Principals shall cause
-------------------
Logisoft to, use commercially reasonable efforts to obtain such written consents
and take such other actions as may be necessary or appropriate in addition to
those set forth in Section 5.3 (including, without limitation those consents set
-----------
forth on Schedule 9.6) to allow the consummation of the transactions
-------------
contemplated hereby and to allow Retek to carry on Logisoft's business after the
--
Closing.
5.5 Litigation. Logisoft and the Principals will notify Retek in
----------
writing promptly after learning of any actions, suits, proceedings or
investigations by or before any court, board or governmental agency, initiated
by or against Logisoft, or known by Logisoft or the Principals to be threatened
against Logisoft.
-26-
5.6 No Other Negotiations. From the date hereof until the earlier of
-----------------------
the termination of this Agreement or consummation of the Merger, Logisoft will
not, and the Principals will not permit Logisoft to, and will not authorize any
officer or director of Logisoft or any other person on its behalf to, directly
or indirectly, solicit, encourage, negotiate or accept any offer from any party
concerning the possible disposition of all or any substantial portion of
Logisoft's business, assets or capital stock by merger, sale or any other means
or any other transaction that would involve a change in control of Logisoft, or
any transaction in which Logisoft contemplates issuing equity or debt
securities. Logisoft and the Principals will promptly notify Retek in writing
of any third party inquiries or proposals.
5.7 Access to Information. Until the Closing, each of Logisoft and the
---------------------
Principals will allow Retek and its agents reasonable access to the files,
books, records and offices of Logisoft, including, without limitation, any and
all information relating to Logisoft's taxes, commitments, contracts, leases,
licenses, and real, personal and intangible property (including its intellectual
property) and financial condition. Logisoft will and the Principals will cause
Logisoft's accountants to cooperate with Retek and its agents in making
available all financial information reasonably requested, including, without
limitation, the right to examine all working papers pertaining to all financial
statements prepared or audited by such accountants.
5.8 Satisfaction of Conditions Precedent. Logisoft and each of the
---------------------------------------
Principals will use its, his or her commercially reasonable efforts to satisfy
or cause to be satisfied all the conditions precedent which are set forth in
Section 9, and each such person will use its, his or her commercially reasonable
------
efforts to cause the transactions contemplated by this Agreement to be
consummated, and, without limiting the generality of the foregoing, to obtain
all consents and authorizations of third parties (including without limitation,
those third parties described in Section 9.6) and to make all filings with, and
-----------
give all notices to, third parties that may be necessary or reasonably required
on their part in order to effect the transactions contemplated hereby. Logisoft
and the Principals will promptly notify Retek in writing of any failure or
inability to comply fully with this Section.
5.9 Blue Sky Laws. Logisoft and the Principals will cooperate with
---------------
Retek in connection with Retek's efforts to comply with the securities and Blue
Sky laws of all jurisdictions which are applicable in connection with the
Merger.
6. RETEK PRECLOSING COVENANTS
During the period from the date of this Agreement until the earlier of the
Effective Time or the termination of this Agreement pursuant to Section 10
----------
hereof, Retek and Merger Sub covenant and agree as follows:
-27-
6.1 Advise of Changes; Conduct of Business. Retek and Merger Sub will
---------------------------------------
promptly advise Logisoft in writing (a) of any event occurring subsequent to the
date of this Agreement that would render any representation or warranty of Retek
or Merger Sub contained in this Agreement, if made on or as of the date of such
event or the Closing Date, untrue or inaccurate in any material respect; or (b)
of any material adverse change in the business, results of operations or
financial condition of Retek. Retek will use commercially reasonable efforts to
continue to conduct its business and maintain its business relationships in the
ordinary and usual course and will promptly inform Logisoft in writing if it
does any of the following (other than action required by this Agreement, as
required by law or in connection with the performance of agreements,
arrangements or pending transactions disclosed in the Retek Schedule of
Exceptions):
(a) enter into any material transaction not in the ordinary course
of business;
(b) declare, set aside or pay any material cash or stock dividend
or other material distribution in respect of capital stock, or redeem or
otherwise acquire any material portion of its capital stock other than in
connection with a possible reverse stock split or share combination;
(c) dispose of (including by license), whether to a third party, a
partially or wholly-owned subsidiary or otherwise, any substantial portion of
its assets (other than in the ordinary course of business);
(d) encumber or permit to be encumbered in any material respect a
substantial portion of its assets or grant liens thereon;
(e) issue or sell a material number of shares of its capital stock
of any class (except upon the exercise of options to purchase Retek upon
exercise of the Bankruptcy Warrants) or any other of its securities, or issue or
create any material warrants, obligations, subscriptions, options, convertible
securities or other commitments to issue shares of capital stock other than
employee stock options or in connection with an acquisition of another entity or
an underwritten public offering of its capital stock; or
(f) except in connection with a reincorporation in Delaware,
merge, consolidate or reorganize with any entity if Retek does not survive such
merger, consolidation or reorganization.
6.2 Regulatory Approvals. Retek and Merger Sub will execute and file,
---------------------
or join in the execution and filing, of any application or other document that
may be necessary in order to obtain the authorization, approval or consent of
any governmental body, federal, state, local or foreign, which may be reasonably
required, in connection with the consummation of the transactions contemplated
by this Agreement. Retek will use its best efforts to obtain all such
authorizations, approvals and consents.
-28-
6.3 Satisfaction of Conditions Precedent. Each of Retek and Merger Sub
------------------------------------
will use its commercially reasonable efforts to satisfy or cause to be satisfied
all the conditions precedent which are set forth in Section 8, and each of Retek
---------
and Merger Sub will use its commercially reasonable efforts to cause the
transactions contemplated by this Agreement to be consummated and, without
limiting the generality of the foregoing, to obtain all consents and
authorizations of third parties and to make all filings with, and give all
notices to, third parties that may be necessary or reasonably required on its
part in order to effect the transactions contemplated hereby.
6.4 Blue Sky Laws. Retek shall take such steps as may be necessary to
--------------
comply with the securities and Blue Sky laws of all jurisdictions which are
applicable in connection with the Merger.
6.5 Access to Information. Until the Closing, Retek will allow
-----------------------
Logisoft and their respective agents reasonable access to the files, books,
records and offices of Retek, including, without limitation, any and all
information relating to Retek's taxes, commitments, contracts, leases, licenses,
and real, personal and intangible property (including its intellectual property)
and financial condition. Retek will cause its accountants to cooperate with
Logisoft and its agents in making available all financial information reasonably
requested, including, without limitation, the right to examine all working
papers pertaining to all financial statements prepared or audited by such
accountants.
7. CLOSING MATTERS
7.1 The Closing. Subject to termination of this Agreement as provided
------------
in Section 10 below, the Closing will be facilitated by the offices of Xxxxxxxxx
----------
& Xxxxxxx LLP, in Rochester, New York on or before March, 2000, or, if all
conditions to closing have not been satisfied or waived by such date, such other
place, time and date as Logisoft and Retek may mutually select (the "Closing
-------
Date"). Concurrently with the Closing, the Certificate of Merger will be filed
-
in the office of the New York Secretary of State.
7.2 Exchange of Certificates.
--------------------------
7.2.1 As of the Effective Time, all shares of Logisoft Common Stock
that are outstanding immediately prior thereto will, by virtue of the Merger and
without further action, cease to exist and will be converted into the right to
receive from Retek the number of shares of Retek Common Stock and cash
determined as set forth in Section 2.1, subject to Section 2.2.
----------------------------------------
-29-
7.2.2 At the Effective Time, each holder of shares of Logisoft Common
Stock will surrender the certificate(s) for such shares (the "Certificates"),
------------
duly endorsed as requested by Retek or accompanied by stock powers in a form
acceptable to Retek, to Retek for cancellation. At the Effective Time and upon
receipt of such Certificates, Retek will issue to each tendering holder a
certificate for the number of shares of Retek Common Stock and the cash to which
such holder is entitled pursuant to Section 2.
----------
7.2.3 No dividends or distributions payable to holders of record of
Retek Common Stock after the Effective Time will be paid to the holder of any
unsurrendered Certificate(s) until the holder of the Certificate(s) surrenders
such Certificate(s), or if such certificates are lost, stolen or destroyed,
provides an indemnity reasonably acceptable to Retek. Subject to the effect, if
any, of applicable escheat and other laws, following surrender of any
Certificate, there will be delivered to the person entitled thereto, without
interest, the amount of any dividends and distributions therefor paid with
respect to Retek Common Stock so withheld as of any date subsequent to the
Effective Time and prior to such date of delivery.
7.2.4 All Retek Common Stock delivered upon the surrender of Logisoft
Common Stock in accordance with the terms hereof will be deemed to have been
delivered in full satisfaction of all rights pertaining to such Logisoft Common
Stock. There will be no further registration of transfers on the stock transfer
books of Logisoft or the transfer agent of such Logisoft Common Stock. If,
after the Effective Time, Certificates are presented for any reason, they will
be canceled and exchanged as provided in this Section.
7.2.5 Until Certificates representing Logisoft Common Stock
outstanding prior to the Merger are surrendered pursuant to Section 7.2.2 above,
-------------
such Certificates will be deemed, for all purposes, to evidence ownership of the
number of shares of Retek Common Stock into which Logisoft Common Stock will
have been converted pursuant to Sections 2.1.
-------------
7.2.6 Certificates which are not presented to Retek within three
(3) years after the Closing shall be canceled and the holder thereof will no
longer be entitled to receive any Retek securities in consideration thereof.
8. CONDITIONS TO OBLIGATIONS OF LOGISOFT AND THE PRINCIPALS
Logisoft's and the Principals' obligations hereunder are subject to the
fulfillment or satisfaction, on and as of the Closing, of each of the following
conditions (any one or more of which may be waived by Logisoft and the
Principals, but only in a writing signed by Logisoft and the Principals):
-30-
8.1 Accuracy of Representations and Warranties. The representations
---------------------------------------------
and warranties of Retek and Merger Sub set forth in Section 4 that are not made
---------
as of a specific date shall be true and accurate in all material respects on and
as of the date of this Agreement.
8.2 Covenants. Each of Retek and Merger Sub shall have performed and
---------
complied in all material respects with all of its covenants contained in Section
-------
6 on or before the Closing, and Logisoft shall receive a certificate to such
effect signed by Retek's Chief Executive Officer.
8.3 Compliance with Law. There shall be no order, decree, or ruling by
-------------------
any court or governmental agency or threat thereof, or any other fact or
circumstance, which would prohibit or render illegal the transactions
contemplated by this Agreement.
8.4 Government Consents. There shall have been obtained at or prior to
-------------------
the Closing Date such permits or authorizations, and there shall have been taken
such other action, as may be required to consummate the Merger by any regulatory
authority having jurisdiction over the parties and the actions herein proposed
to be taken, including but not limited to, requirements under applicable federal
and state securities laws.
8.5 Requisite Approvals. The principal terms of this Agreement and the
-------------------
Certificate of Merger shall have been approved and adopted by Retek as holders
of all of the all of the issued and outstanding shares of the capital stock of
Merger Sub.
8.6 Opinion of Retek's Counsel. Logisoft shall have received an
-----------------------------
opinion, as to matters described in Exhibit 8.6, from counsel to Retek.
------------
8.7 Registration Rights Agreement. Retek shall have executed and
-------------------------------
delivered a registration rights agreement substantially in the form of Exhibit
-------
8.7.
--
8.8 Shareholder and Voting Agreement. Principals and certain other
-----------------------------------
Retek shareholders shall have executed and delivered a Shareholder and Voting
Agreement in the form of Exhibit 8.8.
------------
8.9 Employment Agreements. Retek shall have executed and delivered
----------------------
employment agreements with Xxxxxx Xxxx, Xxxxxxx Xxxx and Xxxxxx Xxxxxxx in the
forms of Exhibits 8.9A, 8.9B and 8.9C, respectively (the "Employment
--------------------------------
Agreements").
--
8.10 Keystone Laboratories Sale. Retek and Xxxx X. Xxxx ("Xxxx") shall
--------------------------
have executed and delivered a Stock Purchase Agreement in the form of Exhibit
-------
8.10 relating to the sale by Retek to Xxxx of all of the issued and outstanding
--
shares of the capital stock of Keystone Laboratories, Inc. ("Keystone") and
shall have consummated the sale by Retek of its Keystone shares to Xxxx and
entered in to agreements relating to and consummated all other transactions
contemplated thereby.
-31-
8.11 Cash. Retek will have received not less than $5,500,000 from
----
certain purchasers of Retek Common Stock at a purchase price of not less than
$1.00 per share.
8.12 Opinion of Retek's Counsel and G. Xxxxx Xxxxxx, Esq.. Retek's
----------------------------------------------------------
counsel and G. Xxxxx Xxxxxx, Esq., individually, shall have issued and delivered
to the shareholders of xxxxxxxxxxxx.xxx Corp. stock an opinion, in form
acceptable to Logisoft and Logisoft's counsel, as to the tax-free nature of the
transaction contemplated pursuant to the Plan and Agreement of Reorganization
referred to in Section 9.13 hereof. Such opinion shall include Retek counsel
------------
and G. Xxxxx Xxxxxx'x agreement to indemnify the shareholders of
xxxxxxxxxxxx.xxx Corp. with regard to the any claims arising out of or relating
to the taxability of the transaction contemplated by such Plan and Agreement of
Reorganization.
9. CONDITIONS TO OBLIGATIONS OF RETEK AND MERGER SUB
The obligations of Retek and Merger Sub hereunder are subject to the
fulfillment or satisfaction on, and as of the Closing, of each of the following
conditions (any one or more of which may be waived by Retek, but only in a
writing signed by Retek):
9.1 Accuracy of Representations and Warranties. The representations
---------------------------------------------
and warranties of Logisoft and the Principals set forth in Section 3 that are
---------
not made as of a specific date shall be true and accurate in all material
respects on and as of the date of this Agreement.
9.2 Covenants. Logisoft and the Principals shall have performed and
---------
complied in all material respects with all of its covenants contained in Section
-------
5 on or before the Closing, and Retek shall receive certificates to such effect
executed by the Chief Executive Officer and Chief Financial Officer of Logisoft
and by the Principals.
9.3 Compliance with Law. There shall be no order, decree, or ruling by
-------------------
any court or governmental agency or threat thereof, or any other fact or
circumstance, which would prohibit or render illegal the transactions
contemplated by this Agreement.
9.4 Government Consents. There shall have been obtained at or prior to
--------------------
the Closing Date such permits or authorizations, and there shall have been taken
such other action, as may be required to consummate the Merger by any regulatory
authority having jurisdiction over the parties and the actions herein proposed
to be taken, including but not limited to, requirements under applicable federal
and state securities laws.
-32-
9.5 Opinion of Counsel. Retek shall have received from counsel to
--------------------
Logisoft and the Principals, an opinion as to the matters described in Exhibit
-------
9.5.
--
9.6 Consents. Logisoft shall have received duly executed copies of all
--------
material third party consents, approvals, assignments, waivers, authorizations
or other certificates contemplated by this Agreement or reasonably deemed
necessary by Retek's counsel to provide for the continuation in full force and
effect of any and all material contracts and leases of Logisoft (including
without limitation, the consents as to Material Contracts hereto and the
Customer Agreements) and for Logisoft and the Principals to consummate the
transactions contemplated hereby in form and substance reasonably satisfactory
to Retek, except for such consents and approvals thereof as Retek and Logisoft
and the Principals shall have agreed shall not be obtained. A list of such
required consents is set forth on Schedule 9.6.
-------------
9.7 No Litigation. No litigation or proceeding shall be overtly
--------------
threatened or pending to enjoin or prevent the consummation of any of the
transactions contemplated by this Agreement, or which could be reasonably
expected to have a Material Adverse Effect.
9.8 Requisite Approvals. The principal terms of this Agreement and the
-------------------
Certificate of Merger shall have been approved and adopted by the holders of all
of the Logisoft Common Stock outstanding, and by a majority of the Board of
Directors of Logisoft.
9.9 Intentionally Omitted.
9.10 Absence of Material Adverse Changes. There shall not have been
--------------------------------------
any material adverse change in the financial conditions, properties, assets,
liabilities, business, prospectus or results of operations of Logisoft.
9.11 Sale of Keystone Laboratories. Retek and Xxxx shall have executed
-----------------------------
and delivered a Stock Purchase Agreement in the form of Exhibit 8.10 relating to
------------
the sale by Retek to Xxxx of all of the issued and outstanding shares of the
capital stock of Keystone Laboratories, Inc. ("Keystone") and shall have
consummated the sale by Retek of its Keystone shares to Xxxx and entered in to
agreements relating to and consummated all other transactions contemplated
thereby.
9.12 Cash. Retek will have received not less than $5,500,000 from
----
certain purchasers of Retek Common Stock at a purchase price of not less than
$1.00 per share.
-33-
9.13 Sale of xxxxxxxxxxxx.xxx Corp.. ReTek and the shareholders of
---------------------------------
xxxxxxxxxxxx.xxx Corp. ("estore") shall have executed and delivered an Agreement
and Plan of Reorganization in the form of Exhibit 9.13 relating to the exchange
------------
by the shareholders of all of the issued and outstanding shares of the capital
stock of estore upon the terms set forth therein and shall have consummated the
exchange to Retek of the estore shares and entered into agreements relating to
and consummated all other transactions contemplated thereby.
10. TERMINATION OF AGREEMENT
10.1 Termination of Agreement. Either Retek or Logisoft and the
--------------------------
Principals may terminate this Agreement prior to the Effective Time (whether
before or after stockholder approval has been obtained) solely as provided
below:
10.1.1 Retek may terminate this Agreement by giving written notice to
Logisoft and the Principals in the event Logisoft or the Principals is in
breach, and Logisoft and the Principals may terminate this Agreement by giving
written notice to Retek in the event Retek is in breach, of any material
representation, warranty, or covenant contained in this Agreement, and such
breach is not remedied within ten (10) days of delivery of written notice
thereof;
10.1.2 Retek may terminate this Agreement by giving written notice to
Logisoft and the Principals if the Closing shall not have occurred on or before
March 24, 2000 by reason of the failure of any condition precedent under Section
-------
9 hereof (unless the failure results primarily for a breach by Retek of any
representation, warranty or covenant contained in this Agreement); or
10.1.3 Logisoft and the Principals may terminate this Agreement by
giving written notice to Retek if the Closing shall not have occurred on or
before March 24, 2000 by reason of the failure of any condition precedent under
Section 8 hereof (unless the failure results primarily from a breach by Logisoft
---------
or the Principals of any representation, warranty or covenant contained in this
Agreement made by him or it).
10.2 No Liability. Any termination of this Agreement pursuant to this
-------------
Section 10 will be without further obligation or liability upon any party in
-----------
favor of the other party hereto other than the obligations provided in Sections
--- --------
11.2, 12.8 and 12.16 and in the Letter of Intent between Retek and Logisoft
-----------------------
dated February 4, 2000, other than any liability of any party for breaches of
----
this Agreement, which will survive termination of this Agreement. Logisoft and
--
the Principals on the one hand and Retek on the other will use commercially
reasonable efforts to cause the Merger to be consummated.
11. SURVIVAL OF REPRESENTATIONS, INDEMNIFICATION AND REMEDIES,
CONTINUING COVENANTS
-34-
11.1 Survival of Representations. All representations, warranties and
-----------------------------
covenants of Logisoft, the Principals, Retek and Merger Sub contained in this
Agreement will survive the Effective Time and remain operative and in full force
and effect, regardless of any investigation made by or on behalf of the parties
to this Agreement, until the earlier of (a) the termination of this Agreement or
(b) three (3) years after the Closing Date, whereupon such representations,
warranties and covenants will expire (except for covenants that by their terms
survive for a longer period); provided, however, that representations,
warranties and covenants involving intentional fraud or willful misconduct shall
survive the Closing without the limitations of subsections (a) or (b) above.
The period of such survival shall be referred to herein as the "Survival
--------
Period."
11.2 Agreement to Indemnify.
------------------------
11.2.1 Any one or more of the Principals (collectively, "Indemnified
Persons") seeking indemnification hereunder shall give prompt written
notification to Retek (the "Indemnification Representative") of the commencement
------------------------------
of any action, suit or proceeding relating to a third party claim for which
indemnification pursuant to this Section 11 may be sought; provided, however,
----------
that no delay on the part of the Indemnified Person in providing such notice
shall relieve Retek of any liability or obligation hereunder except to the
extent of any damage or liability caused by or arising out of such failure.
Within twenty (20) days after delivery of such notification, the Indemnification
Representative may, upon written notice thereof to the Indemnified Person,
assume control of the defense of such action, suit or proceeding with counsel
reasonably satisfactory to the Indemnified Person, provided that the
Indemnification Representative acknowledges in writing to the Indemnified Person
that any damages, fines, costs or other liabilities that may be assessed against
the Indemnified Person in connection with such action, suit or proceeding
constitute Damages for which the Indemnified Person shall be entitled to
indemnification pursuant to this Section 11. If the Indemnification
-----------
Representative does not so assume control of such defense, the Indemnified
Person shall control such defense. The party not controlling such defense may
participate therein at its own expense; provided that if the Indemnification
Representative assumes control of such defense and the Indemnified Person
reasonably concludes that the indemnifying parties and the Indemnified Person
have conflicting interests or different defenses available with respect to such
action, suit or proceeding, the reasonable fees and expenses of counsel to the
Indemnified Person shall be considered "Damage" for purposes of this Agreement.
The party controlling such defense shall keep the other party advised of the
status of such action, suit or proceeding and the defense thereof and shall
consider in good faith recommendations made by the other party with respect
thereto. The Indemnified Person shall not agree to any settlement of such
action, suit or proceeding without the prior written consent of the
Indemnification Representative.
-35-
11.2.2 Treatment of Indemnity Payments. Any payment made to an
----------------------------------
Indemnified Person pursuant to this Section 11 or the Escrow Agreement shall be
----------
treated as a reduction in the merger consideration.
12. MISCELLANEOUS
12.1 Governing Law. The internal laws of the State of New York
--------------
(irrespective of its conflict of law principles) will govern the validity of
this Agreement, the construction of its terms, and the interpretation and
enforcement of the rights and duties of the parties hereto.
12.2 Assignment; Binding Upon Successors and Assigns. No party hereto
------------------------------------------------
may assign any of its rights or obligations hereunder without the prior written
consent of the other parties hereto and any attempt to do so will be void. This
Agreement will be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
12.3 Severability. If any provision of this Agreement, or the
------------
application thereof, will for any reason and to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such provision
to other persons or circumstances will be interpreted so as reasonably to effect
the intent of the parties hereto. The parties further agree to replace such
void or unenforceable provision of this Agreement with a valid and enforceable
provision that will achieve, to the extent possible, the economic, business and
other purposes of the void or unenforceable provision.
12.4 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which will be an original as regards any party whose
signature appears thereon and all of which together will constitute one and the
same instrument. This Agreement will become binding when one or more
counterparts hereof, individually or taken together, will bear the signatures of
all parties reflected hereon as signatories. Facsimile copies of such
counterparts are acceptable.
12.5 Other Remedies. Except as otherwise provided herein, any and all
---------------
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby or by law on such party,
and the exercise of any one remedy will not preclude the exercise of any other.
-36-
12.6 Amendment and Waivers. Any term or provision of this Agreement
-----------------------
may be amended, and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only by a writing signed by the party to be bound thereby. The
waiver by a party of any breach hereof or default in the performance hereof will
not be deemed to constitute a waiver of any other default or any succeeding
breach or default. The Agreement may be amended by the parties hereto at any
time before or after approval of the shareholders of Logisoft but, after such
approval, no amendment will be made which by applicable law requires the further
approval of the shareholders of Logisoft obtaining such further approval.
12.7 No Waiver. The failure of any party to enforce any of the
----------
provisions hereof will not be construed to be a waiver of the right of such
party thereafter to enforce such provisions.
12.8 Expenses. Each party will bear its respective expenses and fees
--------
of its own accountants, attorneys and other professionals incurred with respect
to this Agreement and the transactions contemplated hereby.
12.9 Attorneys' Fees. Should suit be brought to enforce or interpret
----------------
any part of this Agreement, the prevailing party will be entitled to recover, as
an element of the costs of suit, reasonable attorneys' fees to be fixed by the
court (including without limitation, costs, expenses and fees on any appeal).
The prevailing party will be entitled to recover its costs of suit, regardless
of whether such suit proceeds to final judgment.
12.10 Notices. Any notice or other communication required or permitted
-------
to be given under this Agreement will be in writing, will be delivered
personally, by registered or certified mail, postage prepaid, by confirmed
facsimile or by nationally recognized courier service, and will be deemed given
upon delivery, if delivered personally, or five days after deposit in the mails,
if mailed, or upon receipt if delivered by confirmed facsimile or by nationally
recognized courier service, to the following addresses:
(i) If to Retek: Reconversion Technologies, Inc.
-------------
c/o Xxxx X. Xxxx
00 Xxxxxxxx Xxxxxx, Xxxxx X
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
With a copy to: G. Xxxxx Xxxxxx & Associates, P.C.
-----------------
0000 Xxxx 00xx Xxxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000
G. Xxxxx Xxxxxx, Esq.
-37-
(ii) If to Logisoft or the Principals:
-------------------------------------
Attention: Xxxxxx Xxxx
0000 Xxxxxxxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
With a copy to: Xxxxxxxxx & Xxxxxxx LLP
-----------------
0000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Xxxxxx X. Xxxxxx, Esq.
or to such other address as a party may have furnished to the other parties in
writing pursuant to this Section 12.10.
--------------
12.11 Construction of Agreement. This Agreement has been negotiated by
-------------------------
the respective parties hereto and their attorneys and the language hereof will
not be construed for or against either party. A reference to a Section or an
exhibit will mean a Section in, or exhibit to, this Agreement unless otherwise
explicitly set forth. The titles and headings herein are for reference purposes
only and will not in any manner limit the construction of this Agreement which
will be considered as a whole.
12.12 No Joint Venture. Nothing contained in this Agreement will be
------------------
deemed or construed as creating a joint venture or partnership between any of
the parties hereto. No party is by virtue of this Agreement authorized as an
agent, employee or legal representative of any other party. No party will have
the power to control the activities and operations of any other and their status
is, and at all times, will continue to be, that of independent contractors with
respect to each other. No party will have any power or authority to bind or
commit any other. No party will hold itself out as having any authority or
relationship in contravention of this Section.
12.13 Further Assurances. Each party agrees to cooperate fully with
-------------------
the other parties and to execute such further instruments, documents and
agreements and to give such further written assurances as may be reasonably
requested by any other party to evidence and reflect the transactions described
herein and contemplated hereby and to carry into effect the intents and purposes
of this Agreement.
12.14 Absence of Third Party Beneficiary Rights. No provisions of this
-----------------------------------------
Agreement are intended, nor will be interpreted, to provide or create any third
party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, stockholder, partner or any party hereto or any other
person or entity unless specifically provided otherwise herein, and, except as
so provided, all provisions hereof will be personal solely between the parties
to this Agreement.
-38-
12.15 Public Announcement. Upon execution of the Agreement by all
--------------------
parties, and until the consummation of the Merger, all press releases and other
public communications shall be made by the parties only with the mutual consent
of the Principals, Logisoft and Retek, unless required by law.
12.16 Confidentiality. Retek, Logisoft and the Principals each
---------------
recognize that they have received and will receive confidential information
concerning the other during the course of the negotiations and preparations for
the Merger. Accordingly, each party agrees (a) to use its respective best
efforts to prevent the unauthorized disclosure of any confidential information
concerning the other that was or is disclosed during the course of such
negotiations and preparations, and is clearly designated in writing as
confidential at the time of disclosure, and (b) to not make use of or permit to
be used any such confidential information other than for the purpose of
effectuating the Merger and related transactions. The obligations of this
Section will not apply to information that (i) is or becomes part of the public
domain, (ii) is disclosed by the disclosing party to third parties without
restrictions on disclosure, (iii) is received by the receiving party from a
third party without breach of a nondisclosure obligation to the other party or
(iv) is required to be disclosed by law. If this Agreement is terminated, all
copies of documents containing confidential information shall be returned by the
receiving party to the disclosing party. Notwithstanding Section 12.17, this
-------------
provision does not supersede or replace any other confidentiality or
non-disclosure agreement between the parties, all of which shall remain in full
force an effect in accordance with their terms.
12.17 Entire Agreement. This Agreement and the exhibits hereto
-----------------
constitute the entire understanding and agreement of the parties hereto with
respect to the subject matter hereof and supersede all prior and contemporaneous
agreements or understandings, inducements or conditions, express or implied,
written or oral, between the parties. The express terms hereof control and
supersede any course of performance or usage of the trade inconsistent with any
of the terms hereof.
-39-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
"RETEK" "LOGISOFT"
_______________________________ _______________________________
By: /s/ Xxxx X. Xxxx By: /s/ Xxxxxx Xxxx
----------------------------- --------------------------------
Xxxx X. Xxxx, President Xxxxxx Xxxx, President
"MERGER SUB" "PRINCIPALS"
By: /s/ Xxxx X. Xxxx By: /s/ Xxxxxx Xxxx
----------------------------- --------------------------------
Xxxx X. Xxxx, President Xxxxxx Xxxx
/s/
-------------------
Xxxxxxx Xxxx
/s/ Xxxxxx Xxxxxxx
-------------------
Xxxxxx Xxxxxxx
/s/ Xxxxxxx Xxxxxx
-------------------
Xxxxxxx Xxxxxx
[Signature Page to the Plan and Agreement of Reorganization]
-40-
EXHIBIT A
---------
PLAN OF MERGER
PLAN OF MERGER
THIS PLAN OF MERGER (the "Plan") has been approved by Reconversion
Technologies, Inc., a Delaware corporation ("Retek"), Retek Merger Corp., a New
York corporation and a wholly-owned subsidiary of the Company ("Merger Sub"),
Logisoft Corp., a New York corporation ("Logisoft").
R E C I T A L S :
A. The parties intend that, subject to the terms and conditions of the
Agreement and Plan of Reorganization (the "Agreement"), dated as of March __,
2000, Merger Sub will merge with and into Logisoft in a statutory merger (the
"Merger"), with Logisoft to be the corporation surviving the Merger, all
pursuant to the terms and conditions of the Agreement and applicable law.
B. Upon the effectiveness of the Merger, all of the outstanding capital
stock of Logisoft will be converted into shares of Common Stock of Retek, as
provided in the Agreement. The Merger is intended to be treated as a tax-free
reorganization pursuant to the provisions of Section 368(a)(1)(A) of the
Internal Revenue Code of 1986, as amended (the "Code") by virtue of the
provisions of Section 368(a)(2)(E) of the Code .
PLAN OF REORGANIZATION
1. The Merger. At the effective time of the Merger (the "Effective
-----------
Time"), Merger Sub will be merged with and into Logisoft pursuant to the
Agreement and in accordance with applicable law. Each share of Common Stock of
Logisoft, no par value, issued and outstanding immediately prior to the
Effective Time will, by virtue of the Merger and at the Effective Time, and
without further action on the part of any holder thereof, be converted into such
number of shares as is shown on Exhibit A.
2. Fractional Shares. No fractional shares of Retek Common Stock will
------------------
be issued in connection with the Merger, but in lieu thereof, the holders of
Logisoft Common Stock who would otherwise be entitled to receive a fraction of a
share of Retek Common Stock will receive one additional share of Retek Common
Stock.
-41-
3. Shareholder Approval. Merger Sub has one class of capital stock,
---------------------
Common Stock, no par value ("Sub Common Stock"). One Hundred (100) shares of Sub
Common Stock are outstanding and entitled to vote on the Plan and the Merger.
No class or series of Merger Sub capital stock is entitled to vote as a class.
Logisoft has one class of capital stock, Common Stock, no par value ("Logisoft
Common Stock"). One hundred (100) shares of Logisoft Common Stock are
outstanding and entitled to vote on the Plan and the Merger. No class or series
of Logisoft capital stock is entitled to vote as a class.
4. Effects of the Merger. At the effective time of the Merger:
------------------------
(a) the separate existence of Merger Sub will cease and Merger Sub
will be merged with and into Logisoft, and Logisoft will be the surviving
corporation of the Merger (the "Surviving Corporation"), pursuant to the terms
of the Agreement;
(b) the Certificate of Incorporation and Bylaws of Logisoft will
be the Certificate of Incorporation and Bylaws of the Surviving Corporation;
(c) each of the 100 shares of Sub Common Stock outstanding
immediately prior to the Effective Time will be converted into such number of
shares as is shown on Exhibit A;
(d) the directors of the Surviving Corporation shall be Xxxxxx
Xxxx, Xxxxxxx Xxxx and Xxxxxx Xxxxxxx;
(e) the officers of the Surviving Corporation shall be: Xxxxxx
Xxxx- President; Xxxxxxx Xxxx - Secretary; and Xxxxxx Xxxxxxx - Treasurer;
(f) each share of Logisoft Common Stock outstanding immediately
prior to the Effective Time will be converted into the right to receive that
number of shares of Retek Common Stock as provided in Section 1 above; and
(g) the Merger will, from and after the Effective Time, have all
of the effects provided by applicable law.
5. Tax Matters. The parties intend to adopt this Plan as a tax-free
------------
plan of reorganization and to consummate the Merger in accordance with the
provisions of Section 368(a)(1)(A) of the Code by virtue of the provisions of
Section 368(a)(2)(E) of the Code.
-42-
EXHIBIT 2.1
------------
CONVERSION SHARES
Logisoft Shareholder Logisoft Shares Retek Shares
--------------------- ---------------- -------------
Xxxxxx Xxxx 41.3 2,925,000
Xxxxxxx Xxxx 30 1,875,000
Xxxxxx Xxxxxxx 9.7 600,000
Xxxxxxx Xxxxxx 19 2,100,000
-43-
EXHIBIT 2.10A
--------------
RETEK OFFICERS' CERTIFICATE
EXHIBIT 2.10A
-------------
RETEK OFFICERS' CERTIFICATE
I, Xxxxxx Xxxxxx, certify that I am the duly elected Secretary of
Reconversion Technologies, Inc., a Delaware corporation (the "Company");
1. I am duly authorized to make, execute and deliver this Certificate
on behalf of the Company.
2. Attached hereto as Exhibit A is a true, complete and correct copy of
the Company's Articles of Incorporation, as amended, certified by the Secretary
of the State of Delaware, which has not been amended since the date thereof and
no action has been taken in contemplation of the filing of any amendment
thereto.
3. Attached hereto as Exhibit B is a true, complete and correct copy of
the Company's Bylaws in effect as of the date hereof
4. Attached hereto as Exhibit C is a true, complete and correct copy of
the resolutions of the Board of Directors of the Company, which were duly
adopted by an action by unanimous written consent effective as of March 3, 2000,
and remain in full force and effect on the date hereof and have not been
amended. Such resolutions are the only resolutions adopted by the Company's
Board of Directors relating to the transactions described in the Agreement and
Plan of Reorganization among the Company, Logisoft Corp, Retek Merger Corp.,
Xxxxxx Xxxx, Xxxxxxx Xxxx, Xxxxxx Xxxxxxx and Xxxxxxx Xxxxxx, and the other
matters contemplated thereby.
5. Each person listed below has been duly elected to and holds the
office of the Company set forth beneath his name and the signature set forth
opposite his name is his true and genuine signature:
Xxxx X. Xxxx, President ___________________________________
Xxxxxx Xxxxxx, Secretary ___________________________________
___________________________________
-44-
N WITNESS WHEREOF, the undersigned has executed this Certificate as of
March 3, 2000.
RECONVERSION TECHNOLOGIES, INC.
______________________________
By: Xxxxxx Xxxxxx, Secretary
-45-
EXHIBIT A
TO
CERTIFICATE OF SECRETARY
OF
RECONVERSION TECHNOLOGIES, INC.
Articles of Incorporation of Reconversion Technologies, Inc., as Amended
Certified by the Delaware Secretary of State
(Attached following this page)
-46-
EXHIBIT B
TO
CERTIFICATE OF SECRETARY
OF
RECONVERSION TECHNOLOGIES, INC.
Bylaws of Reconversion Technologies, Inc., as Amended
(Attached following this page)
-47-
EXHIBIT C
TO
CERTIFICATE OF SECRETARY
OF
RECONVERSION TECHNOLOGIES, INC.
Resolutions of the Board of Reconversion Technologies, Inc.
(Attached following this page)
-48-
EXHIBIT 2.10B
--------------
LOGISOFT OFFICERS' CERTIFICATE
CERTIFICATE OF SECRETARY
OF
LOGISOFT CORP.
I, Xxxxxxx Xxxx, certify that I am the duly elected and acting Secretary of
Logisoft Corp., a New York corporation (the "Company");
1. I am duly authorized to make, execute and deliver this Certificate
on behalf of the Company.
2. Attached hereto as Exhibit A is a true, complete and correct copy of
the Company's Articles of Incorporation, as amended, certified by the Secretary
of the State of New York, which has not been amended since the date thereof and
no action has been taken in contemplation of the filing of any amendment
thereto.
3. Attached hereto as Exhibit B is a true, complete and correct copy of
the Company's Bylaws in effect as of the date hereof.
4. Attached hereto as Exhibit C is a true, complete and correct copy of
the unanimous written consent of the Board of Directors and Shareholders of the
Company, which were duly adopted, effective as of March 3, 2000, and remain in
full force and effect on the date hereof and have not been amended. Such
resolutions are the only resolutions adopted by the Company's Board of Directors
or Shareholders relating to the transactions described in the Agreement and Plan
of Reorganization (the "Merger Agreement") among the Company, Reconversion
Technologies, Inc., Retek Merger Corp. and Company shareholders, and the other
matters contemplated thereby.
5. Each person listed below has been duly elected to and holds the
office of the Company set forth beneath his name and the signature set forth
opposite his name is his true and genuine signature:
Xxxxxx Xxxx, President ________________________________
Xxxxxxx Xxxx, Secretary ________________________________
Xxxxxx Xxxxxxx, Treasurer ________________________________
-49-
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
_________________, 2000.
LOGISOFT CORP.
________________________________
Xxxxxxx Xxxx, Secretary
-50-
EXHIBIT A
TO
CERTIFICATE OF SECRETARY
OF
LOGISOFT CORP.
Articles of Incorporation of Logisoft Corp., as Amended
Certified by the New York Secretary of State
(Attached following this page)
-51-
EXHIBIT B
TO
CERTIFICATE OF SECRETARY
OF
LOGISOFT CORP.
BYLAWS OF LOGISOFT CORP., AS AMENDED
(Attached following this page)
-52-
EXHIBIT C
TO
CERTIFICATE OF SECRETARY
OF
LOGISOFT CORP.
Unanimous Written Consent of the Board of Directors and Shareholders of Logisoft
Corp.
(Attached following this page)
-53-
EXHIBIT D
TO
CERTIFICATE OF SECRETARY
OF
LOGISOFT CORP.
Resolutions of the shareholders of Logisoft Corp.
(Attached following, this page)
Attached hereto.
-54-
SCHEDULE 3.3
-------------
LIST OF SHAREHOLDERS
Name Number of Common Shares
Xxxxxx Xxxx 41.3
Xxxxxxx Xxxx 30
Xxxxxx Xxxxxxx 9.7
Xxxxxxx Xxxxxx 00
-55-
SCHEDULE 3.8
-------------
LOGISOFT FINANCIAL STATEMENTS
On file with Retek.
-56-
SCHEDULE 3.10
--------------
SCHEDULE OF CHANGES
None.
-57-
SCHEDULE 3.11
--------------
MATERIAL AGREEMENTS AND CONTRACTS
On file with Retek.
-58-
EXHIBIT 4.20
-------------
INSURANCE
Attached hereto.
-59-
Exhibit 8.6
------------
Form of Opinion of General Counsel of Retek
CERTIFICATE OF SECRETARY
OF
LOGISOFT CORP.
I, Xxxxxxx Xxxx, certify that I am the duly elected and acting Secretary of
Logisoft Corp., a New York corporation (the "Company");
1. I am duly authorized to make, execute and deliver this Certificate
on behalf of the Company.
2. Attached hereto as Exhibit A is a true, complete and correct copy of
the Company's Articles of Incorporation, as amended, certified by the Secretary
of the State of New York, which has not been amended since the date thereof and
no action has been taken in contemplation of the filing of any amendment
thereto.
3. Attached hereto as Exhibit B is a true, complete and correct copy of
the Company's Bylaws in effect as of the date hereof.
4. Attached hereto as Exhibit C is a true, complete and correct copy of
the unanimous written consent of the Board of Directors and Shareholders of the
Company, which were duly adopted, effective as of March 3, 2000, and remain in
full force and effect on the date hereof and have not been amended. Such
resolutions are the only resolutions adopted by the Company's Board of Directors
or Shareholders relating to the transactions described in the Agreement and Plan
of Reorganization (the "Merger Agreement") among the Company, Reconversion
Technologies, Inc., Retek Merger Corp. and Company shareholders, and the other
matters contemplated thereby.
5. Each person listed below has been duly elected to and holds the
office of the Company set forth beneath his name and the signature set forth
opposite his name is his true and genuine signature:
Xxxxxx Xxxx, President ________________________________
Xxxxxxx Xxxx, Secretary ________________________________
Xxxxxx Xxxxxxx, Treasurer ________________________________
-60-
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
_________________, 2000.
LOGISOFT CORP.
________________________________
Xxxxxxx Xxxx, Secretary
-61-
EXHIBIT A
TO
CERTIFICATE OF SECRETARY
OF
LOGISOFT CORP.
Articles of Incorporation of Logisoft Corp., as Amended
Certified by the New York Secretary of State
(Attached following this page)
-62-
EXHIBIT B
TO
CERTIFICATE OF SECRETARY
OF
LOGISOFT CORP.
BYLAWS OF LOGISOFT CORP., AS AMENDED
(Attached following this page)
-63-
EXHIBIT C
TO
CERTIFICATE OF SECRETARY
OF
LOGISOFT CORP.
Unanimous Written Consent of the Board of Directors and Shareholders of Logisoft
Corp.
(Attached following this page)
-64-
EXHIBIT D
TO
CERTIFICATE OF SECRETARY
OF
LOGISOFT CORP.
Resolutions of the shareholders of Logisoft Corp.
(Attached following, this page)
-65-
EXHIBIT 8.6
------------
FORM OF OPINION OF GENERAL COUNSEL OF RETEK
NOTE: Except as otherwise defined below, all capitalized terms used below shall
have the same meanings given to such terms in the Agreement and Plan of
Reorganization (the "Reorganization Agreement") and all other documents executed
pursuant to the Reorganization Agreement ("Ancillary Agreements").
1. Retek is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
2. Retek has the requisite corporate right, power and authority to
enter into, execute and deliver the Reorganization Agreement and the Ancillary
Agreements. All corporate action required to be taken by or on the part of
Retek to authorize Retek to enter into, execute and deliver the Reorganization
Agreement and the Ancillary Agreements has been duly and validly taken.
3. No government consents, approvals, authorizations, registrations,
declarations or filings are required to be obtained by Retek for the execution,
delivery or performance by Retek of the Reorganization Agreement or the
Ancillary Agreements to which it is a party, except such as have been obtained
or made, except for (a) the filing of a Form D with respect to the issuance of
the ReTek Common Stock in the Merger; (b) filings made under applicable
securities laws for the various states of the United States; and (c) the filing
of a Certificate of Merger with the New York Secretary of State.
4. Each of the Reorganization Agreement and the Ancillary Agreements
has been duly authorized, executed and delivered by Retek, and is a valid and
binding obligation of Retek, enforceable against Retek in accordance with it
terms.
5 . The authorized capital stock of Retek consists of 60,000,000 shares
of Retek Common Stock, $0.0001 par value (the "Retek Common Stock"), _________
of which are outstanding as of March __, 2000.
6. The shares of Retek Common Stock that are issuable upon, and in
exchange for, the outstanding shares of Common Stock of Logisoft in the Merger,
when so issued in accordance with the terms and conditions of the Reorganization
Agreement and the Ancillary Agreements, will be duly and validly issued, fully
paid and non-assessable and issued in full compliance with applicable state and
federal securities laws.
7. Other than as set forth in the disclosure schedules to the
Reorganization Agreement, we are not aware that:
-66-
(a) there are any claims, actions, suits, litigation, proceedings,
controversies or investigations, pending or threatened, to which any of the
ReTek Officers or ReTek is a party and which relates to the Retek Officers in
their capacities as Retek Officers, ReTek or the shares of ReTek Common Stock;
(b) there are any claims, actions, suits, litigation, proceedings,
controversies or investigations, pending or threatened, to which any of the
Retek Officers or ReTek is a party or which relates to any of the Retek Officers
or ReTek which questions the validity of the Reorganization Agreement or of any
action taken or to be taken by ReTek or the Retek Officers, pursuant to or in
connection with the provisions of the Reorganization Agreement and the
transactions contemplated thereunder or which would otherwise prevent or hinder
the consummation of such transactions;
(c) ReTek has been charged with or threatened with a charge of any
violation, or is under investigation with respect to a possible violation of any
provisions of any federal, state or local law or administrative ruling or
regulation relating to any aspect of its business; or
(d) ReTek is a party or subject to any judgment, decree or order entered in
any suit or proceeding brought by any governmental agency or by any other person
enjoining it in respect of any business practice or the acquisition of any
property or the conduct of business in any area.
-67-
8. Neither the execution nor the delivery by Retek of the Reorganization
Agreement or the Ancillary Agreements, nor the consummation of the transactions
provided for therein, are in conflict with any provision of: (a) the Articles
of Incorporation or Bylaws of Retek, as applicable, as currently in effect or
(b) any judgment, order or decree of any court or arbitrator to which Retek is a
party or is subject ; or (c) to our knowledge, any agreement (including
government contracts), indenture, mortgage, franchise, license, permit, lease or
other instrument of any kind to which ReTEK or any of the ReTek Officers is a
party or by which ReTek or any of the ReTek Officers or any of their respective
assets is bound or affected.
-68-
EXHIBIT 8.7
------------
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
---------
into as of March ___, 2000, by and between Reconversion Technologies, Inc., a
Delaware corporation (the "Company") and Xxxxxx Xxxx, Xxxxxxx Xxxx, Xxxx Xxxxxx
and Xxxxxx Xxxxxxx (who are collectively referred to herein as the
"Shareholders" and individually referred to herein as a "Shareholder") and who
-----------
immediately prior to the Effective Time of the Merger (as defined below) are
certain of the Principals (as defined in the Plan) of Logisoft Corp., a New York
corporation ("Logisoft").
--------
RECITALS
A. Each of the Shareholders, Logisoft, the Company and Retek
Merger Corp., a New York corporation and a wholly-owned subsidiary of the
Company ("Merger Sub"), have entered into an Agreement and Plan of
-----------
Reorganization dated as of March ___, 2000, (the "Plan"), pursuant to which
----
Merger Sub will merge with and into Logisoft in a reverse triangular merger,
with Logisoft to be the surviving corporation of the merger (the "Merger").
------
B. As a condition precedent to the consummation of the Merger,
Section 8.7 of the Plan provides that the Shareholders shall have entered into a
Registration Rights Agreement in the form of this Agreement with respect to the
shares of the Company's Common Stock that are issued to the Shareholders in the
Merger, subject to the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the parties hereto agree as follows:
-81-
G:\UKL\LOGISOFT\Retek Agreements\Reorganization Agr\Reorganization Agr6.wpd
1. Registration Rights. The Company covenants and agrees as follows:
--------------------
1.1 Definitions. For purposes of this Section 1:
-----------
a) The terms "register", "registered", and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act and Regulation S-B
thereunder, if available, and the declaration or ordering of effectiveness of
such registration statement or document;
-69-
b) The term "Registrable Securities" means the shares of Common Stock
issued to the Shareholders pursuant to the Plan and any Common Stock of the
Company issued as a dividend or other distribution with respect to, or in
exchange for or in replacement of, such Common Stock, excluding in all cases,
however, any Registrable Securities sold by a person in a transaction in which
his rights under this Section I are not assigned pursuant to an effective
registration statement or to the public pursuant to an exemption from
registration requirements under the Securities Act;
c) The number of shares of "Registrable Securities then outstanding"
shall be determined by the number of shares of Common Stock outstanding which
are Registrable Securities;
d) The term "Holder" means any person owning or having the right to
acquire Registrable Securities or any assignee thereof in accordance with
Section 1.11 hereof;
e) The terms "Form SB-1" or "Form SB-2" mean such forms under
Regulation S-B of the Securities Act as in effect on the date hereof or any
comparable registration form under the Securities Act subsequently adopted by
the Securities and Exchange Commission ("SEC"); and
1.2 Request for Registration. The Company intends to enter into a
-------------------------
further agreement with the Holders of Registrable Securities pursuant to which
such Holders shall be entitled to request that the Company effect a registration
under the Securities Act of all Registrable Securities which the Holders request
to be registered. The terms and conditions of such agreement shall be those
typical of demand registration rights granted in mergers and reorganizations
such as that described in the Plan. The parties agree to negotiate in good
faith such terms and conditions promptly after the closing of the transaction
contemplated in the Plan.
1.3 Company Registration. If (but without any obligation to do so) the
--------------------
Company proposes to register (including for this purpose a registration effected
by the Company for shareholders other than the Holders) any of its stock or
other securities under the Securities Act in connection with the public offering
of such securities solely for cash (other than a registration relating solely to
the sale of securities to participants in a Company stock or dividend
reinvestment plan, or a registration on any form which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of the Registrable Securities), after
October 10, 2000 the Company shall, at such time, promptly give each Holder
written notice of such registration. Upon the written request of each Holder
received within thirty (30) days after mailing of such notice by the Company in
accordance with Section 2.5, the Company shall, subject to the provisions of
Section 1.7, cause to be registered under the Securities Act all of the
Registrable Securities that each such Holder has requested to be registered.
1.4 Obligation of the Company. Whenever required under this Section 1
--------------------------
to effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
-70-
a) Prepare and file with the SEC a registration statement with respect
to such Registrable Securities and use its best efforts to cause such
registration statement to become effective and, upon the request of the Holders
of a majority of the Registrable Securities registered thereunder, keep such
registration statement effective for up to one hundred twenty (120) days for the
purpose of selling all stock or securities registered with the SEC.
b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.
c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
d) Use its best efforts to register and qualify the securities covered
by such registration statement under such other securities or Blue Sky laws of
such jurisdictions as shall be reasonably requested by the Holders, provided
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions.
e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement.
f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
-71-
g) Furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to this Section 1, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this Section 1 if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion dated such date of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities and (ii) a "cold comfort" letter dated
such date from the independent certified public accountants of the Company, in
form and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed to
title underwriters, if any, and to the Holders requesting registration of
Registrable Securities.
1.5 Furnish Information. It shall be a condition precedent to the
--------------------
obligations of the Company to take any action pursuant to this Section I with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities.
1.6. Expenses of Company Registration. The Company shall bear and pay
------------ --------------------
all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to all registrations
pursuant to Section 1.3 for each Holder (which right may be assigned as provided
in Section 1.11), including without limitation all registration, filing, and
qualification fees, printing and accounting fees relating or apportionable
thereto and the fees and disbursements of one counsel for the selling Holders
---
selected by them, but excluding underwriting discounts and commissions relating
to Registrable Securities.
-72-
1.7 Underwriting Requirements. In connection with any offering
--------------------------
involving an underwriting of shares of the Company's capital stock, the Company
shall not be required in any "piggy back" Registration under Section 1.3 to
include any of the Holders' securities in such underwriting unless they accept
the terms of the underwriting as agreed upon between the Company and the
underwriters selected by it (or by other persons entitled to select the
underwriters), and then only in such quantity as the underwriters determine in
their sole discretion will not jeopardize the success of the offering by the
Company. If the total amount of securities, including Registrable Securities,
requested by shareholders to be included in such offering exceeds the amount of
securities sold other than by the Company that the underwriters determine in
their sole discretion is compatible with the success of the offering, then the
Company shall be required to include in the offering only that number of such
securities, including Registrable Securities, which the underwriters determine
in their sole discretion will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among the selling shareholders
according to the total amount of securities entitled to be included therein
owned by each selling shareholder or in such other proportions as shall mutually
be agreed to by such selling shareholders) but in no event unless mutually
agreed to by all Shareholders shall (i) the amount of securities, including
Registrable Securities and all other securities the holders of which have
similar rights, of the selling shareholders included in the offering be reduced
below twenty-five percent (25%) of the total amount of securities included in
such offering, or (ii) notwithstanding (i) above, any shares being sold by a
shareholder exercising registration right similar to that granted in Section 1.2
be excluded from such offering. For purposes of the preceding parenthetical,
apportionment of securities of any selling shareholder which is a holder of
Registrable Securities and which is a partnership or corporation, the partners,
retired partners and shareholders of such holder, or the estates and family
members of any such partners and retired partners and any trusts for the benefit
of any of the foregoing persons shall be deemed to be a single "selling
shareholder", and any pro-rata reduction with respect to such "selling
shareholder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
"selling shareholder", as defined in this sentence.
1.8 Delay of Registration. No Holder shall have any right to obtain or
---------------------
seek any injunction restraining or otherwise delaying any such registration as a
result of any controversy that might arise with respect to the interpretation or
implementation of this Section 1.
1.9 Indemnification. In the event any Registrable Securities are
---------------
included in a registration statement under this Section 1:
a) To the extent permitted by law, the Company will indemnify and hold
harmless each Holder, any underwriter (as defined in the Act) for such Holder
and each person, if any, who controls such Holder or underwriter within the
meaning of the Act or the Securities Exchange Act of 1934, as amended (the "1934
Act"), against any losses, claims, damages, or liabilities Joint or several) to
which they may become subject under the Act, or the 1934 Act or other federal or
state law, insofar as such losses, claims, damages, or liabilities (or actions
in respect thereto arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation:): (i) any untrue
statement or alleged untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the omission or
alleged omission to state therein a material fact required to be stated therein,
or necessary to make the statements therein not misleading, or (iii) any
violation or alleged violation by the Company of the Act, the 1934 Act, any
state securities law or any rule or regulation promulgated under the Act, or the
1934 Act or any state securities law; and the Company will pay to each such
Holder, underwriter or controlling person, as incurred, any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this subsection 1.09(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability,
or action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), nor shall the Company be
liable in any such case for any such loss, claim, damage, liability, or action
to the extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by any such Holder, underwriter or
controlling person.
-73-
b) To the extent permitted by law, each selling Holder will indemnify
and hold harmless the Company, each of its directors, each of its officers who
has signed the registration statement, each person, if any, who controls the
Company within the meaning of the Act, any underwriter, advisor, professional,
agent, any other Holder selling securities in such registration statement and
any controlling person of any such underwriter or other Holder, against any
losses, claims, damages, or liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Act, or the 1934 Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) arise out of or are based upon and in conformity
with written information furnished by such Holder expressly for use in
connection with such registration; and each such Holder will pay, as incurred,
any legal or other expenses reasonably incurred by any person intended to be
indemnified pursuant to this subsection 1.09(b), in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this subsection
1.09(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Holder, which consent shall not be unreasonably withheld; provided that
in no event shall any indemnity under this subsection 1.09(b) exceed the gross
proceeds from the offering received by such Holder.
c) Promptly after receipt by an indemnified party under this Section
1.09 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 1.09, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, assume the defense thereof with counsel mutually satisfactory
to the parties; provided, however, that an indemnified party (together with all
other indemnified parties which may be represented without conflict by one
counsel) shall have the right to retain one separate counsel, with the fees and
expenses to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such
parties in the indemnified proceeding. The failure to deliver written notice to
the indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
1.09, but the omission to deliver written notice to the indemnifying party will
not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 1.09.
-74-
d) If the indemnification provided for in this Section 1.09 is held by
a court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, liability, claim, damage, or expenses referred to therein,
then the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such loss, liability, claim, damage, or expense in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection
with the statements or omissions that resulted in such loss, liability, claim,
damage, or expense as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.
e) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with the underwritten public offering are in conflict with
the foregoing provisions, the provisions in the underwriting agreement shall
control.
f) The obligations of the Company and Holders under this Section 1.09
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 1, and otherwise.
1.10 Reports, Under Securities Exchange Act of 1934. With a view to
-------------------------------------------------
making available to the Holders the benefits of Rule 144 promulgated under the
Act and any other rule or regulation of the SEC that may at any time permit a
Holder to sell securities of the Company to the public without registration or
pursuant to a registration on Form S-3, the Company agrees to:
a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times after ninety (90) days
following the effective date of an initial registration filed by the Company for
the offering of its securities to the general public;
b) take such action as is necessary to enable the Holders to utilize
Form S-3 for the sale of their Registrable Securities;
c) file with the SEC in a timely manner all reports and other documents
required of the Company under the Act and 1934 Act; and
d) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of SEC Rule 144 (at any time
after ninety (90) days following the effective date of an initial public
offering of the Company), the Act and the 1934 Act (at any time after it has
become subject to such reporting requirements), or that it qualifies as a
registrant whose securities may be resold pursuant to Form S-3 (at any time
after it so qualifies), (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.
-75-
1.11 Assignment of Registration Rights. The rights to cause the
------------------------------------
Company to register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations) by a Holder to a transferee or
assignee of such securities provided the Company is within a reasonable time
after such transfer furnished with written notice of the name and address of
such transferee or assignee and the securities with respect to which such
registration rights are being assigned; and provided further, that such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under to the same extent as they were in the hands of the Holder.
1.12 No Limitation on Subsequent Registration Rights. The Company may,
-----------------------------------------------
without the prior written consent of the Holders of the outstanding Registrable
Securities, enter into any agreement with any holder or prospective holder of
any securities of the Company which would allow such holder or prospective
holder registration rights, including without limitation the right (a) to
include such securities in any registration filed under Section 1.2 hereof or
(b) to make a demand registration which could result in such registration
statement being declared effective prior to January 1, 2003.
1.13 "Market Stand-Off" or "Lock-Up" Agreement. Each Investor hereby
-------------------------------------------
agrees that, during the period of duration specified by the Company and an
underwriter of common stock or other securities of the Company following the
effective date of a registration statement of the Company filed under the Act,
it shall not, to the extent requested by the Company and such underwriter,
directly or indirectly sell, offer to sell, contract to sell (including, without
limitation, any short sale), grant any option to purchase, or otherwise transfer
or dispose of (other than to donees who agree to be similarly bound) any
securities of the Company held by it at any time during such period except
common stock included in such registration; provided however, that:
a) such agreement shall be applicable only to the first such
registration statement of the Company which covers common stock (or other
securities) to be sold on its behalf to the public in an underwritten offering;
and
b) all officers and directors of the Company and all other persons with
registration rights (whether or not pursuant to this Agreement) enter into
similar agreements.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of each
Investor (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.
1.14 Termination of Registration Rights. No Holder shall be
--------------------------------------
entitled to exercise any right provided for in this Section I after December 31,
2005; nor shall the Company be obligated to furnish the reports and information
required by Section 1.10 after such date.
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2. Miscellaneous
-------------
2.1 Successors and Assigns. Except as otherwise provided herein, the
-------------------------
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of the Series A Preferred Stock or the Registrable Securities).
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
2.2 Governing Law. This Agreement and all rights of the parties shall
--------------
be governed by and construed under the laws of the State of New York without
giving effect to principles of conflicts of laws.
2.3 Counterparts. This Agreement may be executed in two or more
-------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
2.4 Titles and Subtitles. The titles and subtitles used in this
----------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
2.5 Notice. Unless otherwise provided, any noticed required or
-------
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or three
(3) days after deposit with the United States Post Office, by registered or
certified mail, postage prepaid and addressed to the party to be notified at the
address indicated for such party on the signature page hereto, or at such other
address as such party may designate by ten (10) days advance written notice to
the other parties.
2.7 Amendments and Waivers. Any term of this Agreement may be amended
-----------------------
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and the holders of a majority of the
Registrable Securities then outstanding. Any amendment or waiver effected in
accordance with this Section 2.7 shall be binding upon each holder of any
Registrable Securities then outstanding, each future holder of all such
Registrable Securities, and the Company.
2.8 Severability. If one or more provisions of this Agreement are held
-------------
to be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
2.9 Aggregation of Stock. All shares of Registrable Securities held or
--------------------
acquired by affiliated entities or persons shall be aggregated together for the
purpose of determining the availability of any rights under this Agreement.
-77-
2.10 Entire Agreement, This Agreement (including the Exhibits hereto,
-----------------
if any) constitutes the full and entire understanding and agreement between the
parties with regard to the subjects hereof and thereof.
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first above written.
RECONVERSION TECHNOLOGIES, INC.
By:_______________________________
________________, President
SHAREHOLDERS:
_________________________________
_________________________________
_________________________________
_________________________________
Attached hereto.
-78-
EXHIBIT 8.8
------------
VOTING AGREEMENT
Agreement made by and among Xxxxxx Xxxx, Xxxxxxx Xxxx and Xxxxxx Xxxxxxx, all
of whom have a business address at 0000 Xxxxxxxxx-Xxxxxxx Xxxx, Xxxxxxxx, XX
00000 (collectively, the "Purchasers"), Xxxxxxx Xxxxxx, Xxxxx Xxxxxxxx, Xxxxxx
----------
Road, Ltd., Xxxxxxx Xxxxxx, Corsica Marketing, Inc., Avenel Financial Group
(collectively, the "Shareholders" and Reconversion Technologies, Inc. a Delaware
------------
corporation (the "Corporation").
-----------
R E C I T A L S:
- - - - - - - -
I. As a result of the merger of Logisoft Corporation with a wholly-owned
subsidiary of the Corporation on the date of this Agreement, the Purchasers have
acquired 7,500,000 Shares of the $0.001 par value common stock of the
Corporation ("Common Stock").
II. Each of the Purchasers and Shareholders now owns that number of the issued
and outstanding shares of Common Stock set forth on Exhibit A to this Agreement.
III. In order to induce the Purchasers to cause the Corporation to enter into a
merger agreement with the Corporation and its wholly-owned subsidiary, and
shareholders agreed to vote certain of their shares of Common Stock as directed
by the Purchasers, to enter into this Agreement, and to grant the Shareholders a
proxy with respect to their shares of Common Stock, all as set forth in this
Agreement.
IV. The Corporation believes it to be in its best interest that the merger
described above been consummated, as a result, to enter into the provisions of
this agreement relating to the Corporation.
NOW, THEREFORE, the parties agree as follows:
1. Legend. During the term of this Agreement, there shall be placed upon every
------
certificate representing the Shares the following legend:
This certificate and the shares represented hereby are subject to, and transfer
of such shares is restricted by, the provisions of an agreement among the
issuing corporation and certain of its shareholders dated March ___, 2000, and
any amendments thereto, a copy of which agreement is on file at the principal
office of the corporation.
Such legend will be removed in the case of the sale or transfer of any or all of
the shares of a Shareholder or Purchaser, unless such sale or transfer shall be
to an Affiliate, as such term is defined in Section 5.
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2. Voting of Shares. During the term of this Agreement, each of the Purchasers
----------------
and Shareholders shall vote, or cause such Purchaser's or Shareholder's proxies
to vote, his Shares as follows:
2.1 Board of Directors. During the term of this Agreement, each of the
--------------------
Purchasers and Shareholders shall vote, or cause his proxies to vote, his or its
Shares so that the Corporation shall have a Board of Directors consisting of
four (4) members or such greater number as the Purchasers and Shareholders shall
unanimously agree.
2.2 Election of Directors. During the term of this Agreement, each of the
-----------------------
Shareholders and Purchasers shall vote, or cause his or its proxies to vote, his
or its Shares in favor of the election as a director of two (2) persons
nominated by the Shareholders and two (2) persons nominated by the Purchasers,
respectively and, in furtherance of the foregoing, to vote, or cause his or its
proxies to vote, his or its Shares in favor of the exercise by either the
Shareholders or Purchasers of any right of removal or replacement of a director
nominated by the Shareholders or Purchasers, respectively. The persons to be
elected as directors shall be identified by the Purchasers and Shareholders by
oral nomination at, or written nomination submitted to the President or
Secretary of the Corporation prior to, any meeting of Purchasers and
Shareholders of the Company at which the election of directors takes place, or
otherwise in accordance with the bylaws of the Corporation pertaining to the
election of directors.
2.3 Other matters. During the term of this Agreement, when a matter is brought
-------------
before the shareholders of the Corporation for a vote or for their written
consent which does not pertain to the election or removal of a director, each
Purchaser and Shareholder may vote his or its Shares as he or it chooses.
2.4 Presence at Meetings. Each Shareholder shall be present in person, by
----------------------
proxy or by other authorized representative if permitted, at any properly
noticed meeting of the Corporation's Shareholders or Board of Directors for the
purpose of complying with his or its obligations under this Agreement.
3. Exercise by Purchasers. The manner in which any of the rights of the
------------------------
Purchasers under this Agreement, including the rights to elect, remove and
replace directors and the right to vote the shares of the Common Stock owned by
the Shareholders, are to be exercised shall be determined by the holders of a
majority of the aggregate number of shares of Common Stock owned by the
Shareholders.
4. Term. This Agreement shall terminate and shall be of no further force or
----
effect from and after the date on which none of the Purchasers owns any shares
of the capital stock of the Corporation or, two (2) years from the date of the
merger, whichever is earlier.
-80-
5. Transfer. Nothing in this Agreement shall prohibit the transfer or sale of
--------
any or all of the shares of Common Stock held by any Shareholder (a
"Transferor"). However, if such transfer or sale is made to an Affiliate of the
Transferor, the Affiliate shall assume the obligations of the Transferor
hereunder. An Affiliate shall mean (a) any person that directly or indirectly
through one or more intermediaries controls or is controlled by or is under
common control with the Transferor; (b) any Person which is an officer,
director, partner or trustee of, or serves in a similar capacity with respect
to, the Transferor; (c) any Person which is directly or indirectly the owner of
more than ten percent (10%) pf any class of equity securities of the Transferor;
or (iv) the parents, siblings, children, stepchildren or spouse of the
Transferor, or any trust for the benefit of such Person or Persons. For
purposes of this Agreement, "Person" shall mean any individual, corporation,
business trust, estate, trust, partnership, limited partnership, association,
joint venture, limited liability company, governmental subdivision, agency or
instrumentality or any other legal or commercial entity.
6. Notices. Any notice required or permitted to be given under this Agreement
-------
shall be in writing and shall be to have been duly given (i) upon hand delivery,
or (ii) on the third day following delivery to the U.S. Postal Service as
certified or registered mail, return receipt requested and postage prepaid, or
(iii) on the first day following delivery to a nationally recognized United
States overnight courier service, fee prepaid, return receipt or other
confirmation of delivery requested. Any such notice or communication shall be
delivered or directed to the other parties at their addresses first set forth
above or at such other address as may be designated by a party in a notice given
to the other parties in accordance with the provisions of this paragraph.
7. Specific Performance. The parties hereto declare that it is impossible to
---------------------
measure in money the damages which will accrue to a party hereto, or to such
party's successors, assigns or legal or personal representatives, by reason of
the failure to perform any of the obligations under this Agreement. Therefore,
if any party, his successors, assigns or legal or personal representatives,
shall institute any action or proceeding, to enforce the provisions of this
Agreement, any person or entity against whom such action or proceeding is
brought hereby waives the claim or defense that money damages are an adequate
remedy and that therefore the party instituting the action or proceeding is not
entitled to specific performance of the terms of this Agreement.
8. Miscellaneous.
-------------
8.1 This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their personal representatives, heirs, legatees, successors
and assigns, to the extent permitted or provided hereunder.
8.2 No waiver of any of the provisions of this Agreement or any of the rights
or remedies of the parties hereto shall be valid except if same be in writing
and signed by the party charged therewith. A waiver of any one or more of the
provisions hereof shall be limited to the particular instance specified in such
writing, and shall not be deemed a continuing waiver of such provision or of any
subsequent breach.
-81-
8.3 This Agreement constitutes the entire agreement of the parties and may not
be modified except by a written agreement signed by each of the parties hereto.
This Agreement supersedes any and all prior arrangements or agreements among the
parties with respect to the subject matter hereof. All remedies provided herein
shall be deemed to be in addition to and not in substitution for any other
remedies provided by law.
8.4 If any provision of this Agreement shall be held invalid or unenforceable,
such invalidity or unenforceability shall not affect any other portion of this
Agreement which shall be enforceable and carried out as if the unenforceable or
invalid provisions were not contained herein.
8.5 The headings of the paragraphs herein are inserted for convenience only and
do not constitute part of the Agreement.
8.6 This Agreement may be executed in several counterparts, each of which shall
be deemed an original and all of which shall be deemed to constitute a single
Agreement.
8.7 This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware, without giving effect to its conflicts of laws
principles.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
March __, 2000.
RECONVERSION TECHNOLOGIES, INC. SHAREHOLDERS:
By:_____________________________________________________________
Xxxx X. Xxxx, PresidentMichael Xxxxxx
PURCHASERS:________________________________
Xxxxxx Road, Ltd.
________________________________
Xxxxxx Xxxx
Avenel Financial Group
________________________________
Xxxxxxx Xxxx
Xxxxx Xxxxxxxx
________________________________
-82-
________________________________
Xxxxxx Xxxxxxx
________________________________
Xxxxxxx Xxxxxx
________________________________
Corsica Marketing, Inc.
-83-
EXHIBIT A
Shareholders
Name of ShareholderNumber of Shares
---------------------------------------
Xxxxxxx Xxxxxx 2,100,000
Xxxxx Xxxxxxxx 500,000
Xxxxx Road, Inc. 700,000
Aurnel Financial Group 700,000
Corsica Marketing, Inc. 600,000
Xxxxxxx Xxxxxx 500,000
Xxxxxx Xxxx 2,925,000
Xxxxxxx Xxxx 1,875,000
Xxxxxx Xxxxxxx 600,000
-84-
EXHIBIT 8.9A
-------------
X. XXXX EMPLOYMENT AGREEMENT
On file with Retek.
-85-
EXHIBIT 8.9B
-------------
X. XXXX EMPLOYMENT AGREEMENT
On file with Retek.
-86-
EXHIBIT 8.9C
-------------
X. XXXXXXX EMPLOYMENT AGREEMENT
On file with Retek.
-87-
EXHIBIT 9.5
------------
FORM OF OPINION OF COUNSEL TO LOGISOFT AND PRINCIPALS
NOTE: Except as otherwise defined below, all capitalized terms used below
shall have the some meanings given to such terms in the Reorganization
Agreement.
1. Logisoft Corp. ("Logisoft") is a corporation duly organized, validly
existing and in good standing under the laws of the State of New York.
2. Logisoft has the requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as now conducted, and to
enter into the Reorganization Agreement dated as of ________, 2000 among Retek,
Merger Sub, Logisoft, the Principals and certain other parties (the
"Reorganization Agreement") and to perform its obligations thereunder. Each of
--------------
the Principals has the requisite right, power and authority to enter into the
Reorganization Agreement and any Ancillary Agreement applicable to such
Principal and to perform such Principal's obligations thereunder.
3. No government consents, approvals, authorizations, registrations,
declarations or filings are required to be obtained by Logisoft or the
Principals for the execution, delivery or performance by or on behalf of
Logisoft or the Principals of the Reorganization Agreement or the Ancillary
Agreements except such as have been obtained or made.
4. Each of the Reorganization Agreement and the Ancillary Agreements has
been duly authorized, executed and delivered by Logisoft and the Principals.
All corporate action required to be taken by Logisoft's Board of Directors and
shareholders to authorize Logisoft to enter into, execute and deliver the
Reorganization Agreement and the Ancillary Agreements has been duly and validly
taken. Each of the Principals has taken all action necessary to authorize such
person to enter into, execute, deliver and perform such person's obligations
under the Reorganization Agreement and any applicable Ancillary Agreement. Each
of the Reorganization Agreement and the Ancillary Agreements is, to the extent
applicable to them, a valid and binding obligation of Logisoft and each of the
Principals, enforceable against them in accordance with its respective terms.
-88-
5. The authorized capital stock of Logisoft consists of 200 shares of
Logisoft Common Stock, of which _________ are issued, outstanding, and owned of
record solely by the Principals. All presently outstanding shares of Logisoft's
capital stock have been duly authorized and validly issued, and are fully paid
and nonassessable. There are, to our knowledge, (a) no outstanding
subscriptions, warrants, options, calls, claims, commitments, convertible
securities or other agreements or arrangements under which Logisoft is or may be
obligated to issue any shares of its capital stock, (b) no preemptive rights to
subscribe for or to purchase capital stock of Logisoft, and (c) no outstanding
rights to cause shares of Logisoft to be registered under the 1933 Act or under
any other jurisdiction's securities laws. To our knowledge, no other party has
any right to, or has made any claim of, ownership of shares of Logisoft and no
other party has any right to, or has made any claim to, receive shares of
Logisoft.
6. Neither the execution and delivery of the Reorganization Agreement or
the Ancillary Agreements nor the consummation of the transactions provided for
therein are in conflict with any provision of: (a) the Articles of
Incorporation or Bylaws of Logisoft currently in effect, (b) to our knowledge,
any judgment, order or decree of any court or arbitrator to which Logisoft or
any of the Principals is a party or is subject; or (c) to our knowledge, any
agreement (including government contracts), indenture, mortgage, franchise,
license, permit, lease or other instrument of any kind to which Logisoft or any
of the Principals is a party or by which Logisoft or any of the Principals or
any of their respective assets is bound or affected.
7. To our knowledge, neither Logisoft nor the Principals is a party to any
pending or threatened action, suit, labor dispute (including any union
representation proceeding), proceeding, arbitration, mediation, investigation,
or discrimination claim in or by any court or governmental board, commission,
agency, department, or officer, or by any arbitrator, that if determined
adversely to Logisoft or any such Principal, might reasonably be expected to
have a material adverse effect on the present or future operations, business,
prospects or financial condition of Logisoft. To our knowledge, neither
Logisoft nor any of the Principals is subject to any order, writ, judgment,
decree, or injunction.
-89-
SCHEDULE 9.6
REQUIRED CONSENTS
Attached hereto.
-90-
EXHIBIT 9.13
-------------
PLAN AND AGREEMENT OF REORGANIZATION (XXXXXXXXXXXX.XXX CORP.)
AGREEMENT AND PLAN OF REORGANIZATION BY AND AMONG
RECONVERSION TECHNOLOGIES, INC., XXXXXX XXXX, XXXXXXX XXXX,
XXXXXX XXXXXXX, XXXXXX XXX, XXXXX XXXXX, XXXXX XXXXX, XXXXX XXX, XXXXX
XXXXXXXXX AND XXXX XXXXXXXX
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is entered into this
10th of March, 2000, by and among RECONVERSION TECHNOLOGIES, INC. , a Delaware
corporation (hereinafter referred to as "Buyer"); and XXXXXX XXXX, XXXXXXX XXXX,
XXXXXX XXXXXXX, XXXXXX XXX, XXXXX XXXXX, XXXXX XXXXX, XXXXX XXX, XXXXX
XXXXXXXXX, XXXX XXXXXXXX and XXXXXX XXXXXX or their assigns (hereinafter
collectively referred to as "Seller"), being all of the shareholders of
XXXXXXXXXXXX.XXX CORP., a New York corporation (hereafter referred to as
"Company").
WHEREAS, Seller is the owner of record and beneficially owns Four Million
(4,000,000) shares of the issued and outstanding shares of Common Stock of the
Company (the "Shares"); and
WHEREAS, the Shares represent 100% of all the issued and outstanding shares of
the Company; and
WHEREAS, Seller desires to sell all of the Shares to Buyer, and Buyer desires to
purchase the Shares, upon the terms and conditions set forth herein;
WHEREAS, the parties intend that the exchange of Shares for shares of Buyer's
common stock, as contemplated herein, qualify as a tax free transaction under
Section 368 of the Internal Revenue Code;
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, and for other good and valuable consideration, the receipt, adequacy and
sufficiency of which are hereby acknowledged, and subject to the accuracy of the
representations and warranties of the parties, the parties hereto agree as
follows:
I.
SALE AND PURCHASE OF THE SHARES
------------------------------------
1.1 SALE AND PURCHASE. Subject to the terms and conditions hereof, at the
-------------------
Closing (as defined in paragraph 1.2 below), Seller agrees to sell, assign,
transfer, convey and deliver to Buyer, and Buyer agrees to purchase from Seller,
the Shares listed in Exhibit "A", attached hereto, which together constitute
100% of the issued and outstanding Shares of Common Stock of the Company.
1.2 CLOSING. The purchase shall be consummated at a closing ("Closing") to
-------
take place at 10:00 o'clock a.m., at the offices of Buyer's counsel on March 10,
2000 ("Closing Date").
-91-
1.3 PURCHASE PRICE. The aggregate purchase price ("Purchase Price") for the
---------------
Shares shall be Four Million Five Hundred Thousand (4,000,000) shares of common
stock of the Buyer ("Buyer Shares"). The purchase price shall be paid at
Closing by issuance and delivery of Buyer's Shares to Seller against receipt of
certificates representing the Shares, duly endorsed for transfer to Buyer.
1.4 ALLOCATION OF SHARES. All shares of stock of Buyer to be issued to
----------------------
Seller pursuant to this
Agreement shall be issued to the respective Sellers in proportion to their
respective ownership of stock of the Company as described in Exhibit "A" hereto.
II.
REPRESENTATIONS AND WARRANTIES
--------------------------------
2.1 REPRESENTATIONS AND WARRANTIES OF SELLER. Each Seller represents and
----------------------------------------------
warrants to Buyer as follows:
(a) TITLE TO THE SHARES. At Closing, Seller shall own of record and
----------------------
beneficially the number of the Shares listed in Exhibit "A", of the Company,
free and clear of all liens, encumbrances, pledges, claims, options, charges and
assessments of any nature whatsoever, with full right and lawful authority to
transfer the Shares to Buyer. No person has any preemptive rights or rights of
first refusal with respect to any of the Shares. There exists no voting
agreement, voting trust, or outstanding proxy with respect to any of the Shares.
There are no outstanding rights, options, warrants, calls, commitments, or any
other agreements of any character, whether oral or written, with respect to the
Shares.
(b) AUTHORITY. Seller has full power and lawful authority to execute and
----------
deliver the Basic
Agreements and to consummate and perform the Transactions contemplated thereby.
The Basic Agreements constitute (or shall, upon execution, constitute) valid and
legally binding obligations upon Seller, enforceable in accordance with their
terms. Neither the execution and delivery of the Basic Agreements by Seller,
nor the consummation and performance of the Transactions contemplated thereby,
conflicts with, requires the consent, waiver or approval of, results in a breach
of or default under, or gives to others any interest or right of termination,
cancellation or acceleration in or with respect to, any agreement by which
Seller is a party or by which Seller or any of his respective properties or
assets are bound or affected.
(c) INVESTMENT INTENT. Seller is acquiring the Buyer Shares for his own
-------------------
account, for investment purposes only, and not with a view to the sale or
distribution of any part thereof, and Seller has no present intention of
selling, granting participation in, or otherwise distributing the same. Seller
understands the specific risks related to an investment in the Buyer Shares,
especially as it relates to the financial performance of the Company.
2.1 REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company represents and
----------------------------------------------
warrants
to Buyer as follows:
(a) ORGANIZATION. The Company is a corporation duly incorporated, validly
------------
existing and in good standing under the laws of the state of New York. The
Company has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business. The Company is duly
qualified and in good standing as a foreign corporation in each jurisdiction
where its ownership of property or operation of its business requires
qualification.
-92-
(b) AUTHORIZED CAPITALIZATION. The authorized capitalization of the Company
--------------------------
consists of _______ Million (____________) shares of Common Stock, $.____ par
value, of which Four Million (4,000,000) shares have been issued and are
outstanding. The Shares have been duly authorized, validly issued, are fully
paid and nonassessable with no personal liability attaching to the ownership
thereof and were offered, issued, sold and delivered by the Company in
compliance with all applicable state and federal laws. The Company does not
have any outstanding rights, options, warrants, calls, commitments, conversion
or any other agreements of any character, whether oral or written, obligating it
to issue any shares of its capital stock, whether authorized or not. The
Company is not a party to and is not bound by any agreement, contract,
arrangement or understanding, whether oral or written, giving any person or
entity any interest in, or any right to share, participate in or receive any
portion of, the Company's income, profits or assets, or obligating the Company
to distribute any portion of its income, profits or assets.
(c) AUTHORITY. The Company has full power and lawful authority to execute and
----------
deliver the Basic Agreements and to consummate and perform the Transactions
contemplated
thereby. The Basic Agreements constitute (or shall, upon execution, constitute)
valid and legally binding obligations upon the Company, enforceable in
accordance with their terms. Neither the execution and delivery of the Basic
Agreements by the Company, nor the consummation and performance of the
Transactions contemplated thereby, conflicts with, requires the consent, waiver
or approval of, results in a breach of or default under, or gives to others any
interest or right of termination, cancellation or acceleration in or with
respect to, any agreement by which the Company is a party or by which the
Company or any of its properties or assets are bound or affected.
(d) COMPANY FINANCIAL STATEMENTS. The Company Financial Statements are
------------------------------
complete in all material respects, were prepared in accordance with generally
accepted accounting principles applied on a basis consistent with prior periods
and fairly present the financial position of the Company as of December 31,
1999.
(e) NO UNDISCLOSED LIABILITIES. Except as set forth in the Company Financial
----------------------------
Statements previously delivered to Buyer and as set forth on Exhibit "B", Seller
is not aware of any liabilities for which the Company is liable or will become
liable in the future.
(f) TAXES. The Company has filed all federal, state, local tax and other
-----
returns and reports which were required to be filed with respect to all taxes,
levies, imposts, duties, licenses and registration fees, charges or withholdings
of every nature whatsoever ("Taxes"), and their exists a substantial basis in
law and fact for all positions taken in such reports. No waivers of periods of
limitation are in effect with respect to any taxes arising from and attributable
to the ownership of properties or operations of the business of the Company.
(g) PROPERTIES. The Company has good and marketable title to all its personal
----------
property, equipment, processes, patents, copyrights, trademarks, franchises,
licenses and other properties and assets (except for items leased or licensed to
the Company), including all property reflected in the Company Financial
Statements (except for assets reflected therein which have been sold in the
normal course of its business where the proceeds from such sale or other
disposition have been properly accounted for in the financial statements of the
Company), in each case free and clear of all liens, claims and encumbrances of
every kind and character, except as set forth in Exhibit "C". The Company has
no ownership interest in any real property. The assets and properties owned,
operated or leased by the Company and used in its business are in good operating
condition in all material respects, reasonable wear and tear excepted, and
suitable for the uses for which intended.
(h) BOOKS AND RECORDS. The books and records of the Company are complete and
-------------------
correct in all material respects, have been maintained in accordance with good
business practices and accurately reflect in all material respects the business,
financial condition and results of operations of the Company as set forth in the
Company Financial Statements.
-93-
(i) INSURANCE. Exhibit "D" contains an accurate and complete list and brief
---------
description of all performance bonds and policies of insurance, including fire
and extended coverage, general liability, workers compensation, products
liability, property, and other forms of insurance or indemnity bonds held by the
Company. The Company is not in default with respect to any provisions of any
such policy or indemnity bond and has not failed to give any notice or present
any claim thereunder in due and timely fashion. All policies of insurance and
bonds are: (1) in full force and effect; (2) are sufficient for compliance by
the Company with all requirements of law and of all agreements and instruments
to which the Company is a party; (3) are valid, outstanding and enforceable; (4)
provide adequate insurance coverage for the assets, business and operations of
the Company in amounts at least equal to customary coverage in the Company's
industry; (5) will remain in full force and effect through the Closing; and (6)
will not be affected by, and will not terminate or lapse by reason of, the
transactions contemplated by this Agreement.
(j) MATERIAL CONTRACTS. Except as set forth in Exhibit "E", the Company has no
------------------
purchase, sale, commitment, or other contract, the breach or termination of
which would have a materially adverse effect on the business, financial
condition, results of operations, assets, liabilities, or prospects of the
Company.
(k) AUTHORIZATIONS. The Company has no licenses, permits, approvals and other
--------------
authorizations from any governmental agencies and any other entities that are
necessary for the conduct of its business, except as set forth in Exhibit "F"
which contains a list of all licenses, permits, approvals, and other
authorizations, as well as a list of all copyrights, patents, trademarks,
tradenames, servicemarks, franchises, licenses and other permits, each of which
is valid and in full force and effect.
(l) NO POWERS OF ATTORNEY. The Company has no powers of attorney or similar
------------------------
authorizations outstanding.
(m) COMPLIANCE WITH LAWS. The Company is not in violation of any federal,
----------------------
state, local or other law, ordinance, rule or regulation applicable to its
business, and have not received any actual or threatened complaint, citation or
notice of violation or investigation from any governmental authority.
(n) COMPLIANCE WITH ENVIRONMENTAL LAWS. The Company is in compliance with all
-----------------------------------
applicable pollution control and environmental laws, rules and regulations. The
Company has no environmental licenses, permits and other authorizations held by
the Company relative to compliance with environmental laws, rules and
regulations.
(o) NO LITIGATION. There are no material actions, suits, claims, complaints or
-------------
proceedings pending or threatened against the Company, at law or in equity, or
before or by any governmental department, commission, court, board, bureau,
agency or instrumentality; and there are no facts which would provide a valid
basis for any such action, suit or proceeding. There are no orders, judgments
or decrees of any governmental authority outstanding which specifically apply to
the Company or any of its assets.
(p) VALIDITY. All contracts, agreements, leases and licenses to which the
--------
Company is a party or by which it or any of its properties or assets are bound
or affected, are valid and in full force and effect; and no breach or default
exists, or upon the giving of notice or lapse of time, or both, would exist, on
the part of the Company or by any other party thereto.
(q) NO ADVERSE CHANGES. Since December 31, 1999, there have been no actual or
-------------------
threatened developments of a nature that is materially adverse to or involves
any materially adverse effect upon the business, financial condition, results of
operations, assets, liabilities, or prospects of the Company.
(s) FULL DISCLOSURE. All statements of Company contained in the Basic
----------------
Agreements and in any other written documents delivered by or on behalf of the
---
Company to Buyer are true and correct in all material respects and do not omit
any material fact necessary to make the statements contained therein not
misleading in light of the circumstances under which they were made. There are
no facts known to Company which could have a materially adversely affect upon
the business, financial condition, results of operations, assets, liabilities,
or prospects of the Company, which have not been disclosed to Buyer in the Basic
Agreements.
-94-
3. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants to
-----------------------------------------
Seller and Company as follows:
(a) ORGANIZATION. The Buyer is a corporation duly incorporated, validly
------------
existing and in good standing under the laws of the state of Delaware. The
-
Buyer has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business. The Buyer is duly qualified and in
good standing as a foreign corporation in each jurisdiction where its ownership
of property or operation of its business requires qualification.
(b) AUTHORIZED CAPITALIZATION. The authorized capitalization of the Buyer at
--------------------------
Closing will consist of Sixty Million (60,000,000) shares of Common Stock,
$.0001 par value, of which Eighteen Million Four Hundred and Sixty-Two Thousand
Five Hundred and Fifty-Three (18,462,553) shares will be issued and
outstanding. All shares have been duly authorized, validly issued, are fully
paid and nonassessable with no personal liability attaching to the ownership
thereof and were offered, issued, sold and delivered by the Buyer in compliance
with all applicable state and federal laws. Buyer is not a party to and is not
bound by any agreement, contract, arrangement or understanding, whether oral or
written, giving any person or entity any interest in, or any right to share,
participate in or receive any portion of, the Buyer's income, profits or assets,
or obligating the Buyer to distribute any portion of its income, profits or
assets.
(c) AUTHORITY. Buyer has full power and lawful authority to execute and
---------
deliver the Basic Agreements and to consummate and perform the Transactions
contemplated thereby. The Basic Agreements constitute (or shall, upon
execution, constitute) valid and legally binding obligations upon Buyer,
enforceable in accordance with their terms. Neither the execution and delivery
of the Basic Agreements by Buyer, nor the consummation and performance of the
Transactions contemplated thereby, conflicts with, requires the consent, waiver
or approval of, results in a breach of or default under, or gives to others any
interest or right of termination, cancellation or acceleration in or with
respect to, any agreement by which Buyer is a party or by which Buyer or any of
its respective properties or assets are bound or affected.
(d) BUYER'S FINANCIAL STATEMENTS. The Buyer's Financial Statements are
------------------------------
complete, were prepared in accordance with generally accepted accounting
principles applied on a basis consistent with prior periods and fairly present
the financial position of the Buyer as of September 30, 1999.
(e) NO UNDISCLOSED LIABILITIES. Except as set forth in the Buyer's Financial
----------------------------
Statements previously delivered to Seller and as set forth on Exhibit "G", Buyer
is not aware of any material liabilities for which the Buyer is liable or will
become liable in the future.
(f) TAXES. Except as set forth in Exhibit "H", the Buyer has filed all
-----
federal, state, local tax and other returns and reports which were required to
be filed with respect to all taxes, levies, imposts, duties, licenses and
registration fees, charges or withholdings of every nature whatsoever ("Taxes"),
and their exists a substantial basis in law and fact for all positions taken in
such reports. No waivers of periods of limitation are in effect with respect to
any taxes arising from and attributable to the ownership of properties or
operations of the business of the Company.
(g) PROPERTIES. The Buyer has good and marketable title to all its personal
----------
property, equipment, processes, patents, copyrights, trademarks, franchises,
licenses and other properties and assets (except for items leased or licensed to
the Buyer), including all property reflected in the Buyer's Financial Statements
(except for assets reflected therein which have been sold in the normal course
of its business where the proceeds from such sale or other disposition have been
properly accounted for in the financial statements of the Buyer), in each case
free and clear of all liens, claims and encumbrances of every kind and
character, except as set forth in Exhibit "I". The Buyer has no ownership
interest in any real property. The assets and properties owned, operated or
leased by the Buyer and used in its business are in good operating condition,
reasonable wear and tear excepted, and suitable for the uses for which intended.
-95-
(h) BOOKS AND RECORDS. The books and records of the Buyer are complete and
-------------------
correct in all material respects, have been maintained in accordance with good
business practices and accurately reflect in all material respects the business,
financial condition and results of operations of the Buyer as set forth in the
Buyer's Financial Statements.
(i) INSURANCE. Exhibit "J" contains an accurate and complete list and brief
---------
description of all performance bonds and policies of insurance, including fire
and extended coverage, general liability, workers compensation, products
liability, property, and other forms of insurance or indemnity bonds held by the
Buyer. The Buyer is not in default with respect to any provisions of any such
policy or indemnity bond and has not failed to give any notice or present any
claim thereunder in due and timely fashion. All policies of insurance and bonds
are: (1) in full force and effect; (2) are sufficient for compliance by the
Buyer with all requirements of law and of all agreements and instruments to
which the Buyer is a party; (3) are valid, outstanding and enforceable; (4)
provide adequate insurance coverage for the assets, business and operations of
the Buyer in amounts at least equal to customary coverage in the Buyer's
industry; (5) will remain in full force and effect through the Closing; and (6)
will not be affected by, and will not terminate or lapse by reason of, the
transactions contemplated by this Agreement.
(j) TRANSACTIONS WITH CERTAIN PERSONS. Except as disclosed in Exhibit "K", the
---------------------------------
Buyer has no outstanding agreement, understanding, contract, lease, commitment,
loan or other arrangement with any officer, director or 10% shareholder of the
Buyer or any Affiliate (as defined herein) of any such person. For purposes of
this Agreement, the term "Affiliate" shall be defined as follows: An Affiliate
of a specified Person is (i) any Person that directly or indirectly through one
or more intermediaries controls or is controlled by or is under common control
with such specified person, (ii) any Person which is an officer, director,
partner or trustee of, or serves in a similar capacity with respect to, such
specified Person, (iii) any Person which is directly or indirectly the owner of
more than ten percent (10%) of any class of equity securities of such specified
Person and (iv) the parents, siblings, children or spouse of such specified
Person. Additionally, for purposes of this Agreement, the term "Person" shall
mean: Any individual, corporation, business trust, estate, trust, partnership,
limited partnership, association, joint venture, limited liability company,
governmental subdivision, agency or instrumentality or any other legal or
commercial entity."
(k) MATERIAL CONTRACTS. The Buyer has no purchase, sale, commitment, or other
-------------------
contract, the breach or termination of which would have a materially adverse
effect on the business, financial condition, results of operations, assets,
liabilities, or prospects of the Buyer.
(l) AUTHORIZATIONS. The Buyer has no licenses, permits, approvals and other
--------------
authorizations from any governmental agencies and any other entities that are
necessary for the conduct of its business, except as set forth in Exhibit "L"
which contains a list of all licenses, permits, approvals, and other
authorizations, as well as a list of all copyrights, patents, trademarks,
tradenames, servicemarks, franchises, licenses and other permits, each of which
is valid and in full force and effect.
(m) NO POWERS OF ATTORNEY. The Buyer has no powers of attorney or similar
------------------------
authorizations outstanding.
(n) COMPLIANCE WITH LAWS. The Buyer is not, and as a result of the
----------------------
transactions contemplated hereby, will not be, in violation of any federal,
state, local or other law, ordinance, rule or regulation applicable to its
business, and has not received any actual or threatened complaint, citation or
notice of violation or investigation from any governmental authority, including
the Securities and Exchange Commission.
(o) COMPLIANCE WITH ENVIRONMENTAL LAWS. The Buyer is in compliance with all
-------------------------------------
applicable pollution control and environmental laws, rules and regulations. The
Buyer has no environmental licenses, permits and other authorizations held by
the Buyer relative to compliance with environmental laws, rules and regulations.
-96-
(p) LITIGATION. Except as disclosed in Exhibit "M", there are no material
----------
actions, suits, claims, complaints or proceedings pending or threatened against
the Buyer, at law or in equity, or before or by any governmental department,
commission, court, board, bureau, agency or instrumentality; and there are no
facts which would provide a valid basis for any such action, suit or proceeding.
There are no orders, judgments or decrees of any governmental authority
outstanding which specifically apply to the Company or any of its assets.
(q) VALIDITY. All contracts, agreements, leases and licenses to which the
--------
Buyer is a party or by which it or any of its properties or assets are bound or
affected, are valid and in full force and effect; and no breach or default
exists, or upon the giving of notice or lapse of time, or both, would exist, on
the part of the Buyer or by any other party thereto.
(r) FINANCIAL CONDITION. At Closing, the Buyer's assets shall consist of
--------------------
$5,000,000 in cash, a note receivable in the amount of $720,000 and an agreement
to acquire to Logisoft Corp, and the Buyer's accrued but unpaid liabilities
shall not exceed $1,000 at Closing.
(s) FULL DISCLOSURE. All statements of Buyer contained in the Basic Agreements
---------------
and in any other written documents delivered by or on behalf of the Buyer to
Seller are true and correct in all material respects and do not omit any
material fact necessary to make the statements contained therein not misleading
in light of the circumstances under which they were made. There are no facts
known to Buyer which could have a materially adversely affect upon the business,
financial condition, results of operations, assets, liabilities, or prospects of
the Buyer, which have not been disclosed to Buyer in the Basic Agreements.
III.
COVENANTS
---------
3.1 COVENANTS OF COMPANY. Company covenants and agrees that from the date
----------------------
hereof to the Closing without the prior written consent of Buyer:
(a) ORDINARY COURSE OF BUSINESS. Company will operate the business of the
------------------------------
Company only in the ordinary course and will use their best efforts to preserve
the Company's business, organization, goodwill and relationships with persons
having business dealings with them.
(b) MAINTAIN PROPERTIES. Company will maintain its properties in good
--------------------
working order, repair and condition (reasonable wear and use excepted) and cause
-
the Company to take all steps reasonably necessary to maintain in full force and
effect its patents, trademarks, servicemarks, trade names, brand names,
copyrights and other intangible assets.
(c) COMPENSATION. Company will not (1) enter into or alter any employment
------------
agreements; (2) grant any increase in compensation other than normal merit
increases consistent with the Company's general prevailing practices to any
officer or employee; or (3) enter into or alter any labor or collective
bargaining agreement or any bonus or other employee fringe benefit.
(d) NO INDEBTEDNESS. Company will not create, incur, assume, guarantee or
----------------
otherwise become liable with respect to any obligation for borrowed money,
indebtedness, capitalized lease or similar obligation, except in the ordinary
course of business consistent with past practices where the entire net proceeds
thereof are deposited with and used by and in connection with the business of
the Company.
-97-
(e) MAINTAIN BOOKS. Company will maintain its books, accounts and records in
---------------
the usual, regular ordinary and sound business manner and in accordance with
generally accepted accounting principles applied on a basis consistent with past
practices.
(f) NO AMENDMENTS. Company will not amend its corporate charter or bylaws (or
--------------
similar documents) without prior consent of Buyer and Company will maintain
their corporate existence, licenses, permits, powers and rights in full force
and effect.
(g) TAXES AND ACCOUNTING MATTERS. Company will file when due all federal,
-------------------------------
state and local tax returns and reports which shall be accurate and complete,
including but not limited to income, franchise, excise, ad valorem, and other
taxes with respect to its business and properties, and to pay as they become due
all taxes or assessments, except for taxes for which adequate reserves are
established and which are being contested in good faith by appropriate
proceedings. Company will not change their accounting methods or practices or
any depreciation, amortization or inventory valuation policies or practices.
(h) NO DISPOSITION OR ENCUMBRANCE. Except in the ordinary course of business
-------------------------------
consistent with past practice. Company will not (1) dispose of or encumber
any of its properties and assets, (2) discharge or satisfy any lien or
encumbrance or pay any obligation or liability (fixed or contingent) except for
previously scheduled repayment of debt, (3) cancel or compromise any debt or
claim, (4) transfer or grant any rights under any concessions, leases, licenses,
agreements, patents, inventions, proprietary technology or process, trademarks,
servicemarks or copyrights, or with respect to any know-how, or (5) enter into
or modify in any material respect or terminate any existing license, lease, or
contract.
(i) INSURANCE. Company will maintain in effect all its current insurance
---------
policies.
(j) NO SECURITIES ISSUANCES. Company will not issue any shares of any class of
-----------------------
capital stock, or enter into any contract, option, warrant or right calling for
the issuance of any such shares of capital stock, or create or issue any
securities convertible into any securities of the Company except for the
transactions contemplated herein.
(k) NO DIVIDENDS. Company will not declare, set aside or pay any dividends or
-------------
other distributions of any nature whatsoever.
(l) CONTRACTS. Company will not enter into or assume any contract, agreement,
---------
obligation, lease, license, or commitment except in the ordinary course of
business consistent with past practice or as contemplated by this Agreement.
(m) NO BREACH. Company will not do any act or omit to do any act which would
----------
cause a breach of any contract, commitment or obligation of the Company.
(n) DUE COMPLIANCE. Company will not comply with all laws, regulations, rules
---------------
and ordinances applicable to it and to the conduct of its business.
(o) NO WAIVERS OF RIGHTS. Company will not amend, terminate or waive any
-----------------------
material right whether or not in the ordinary course of business.
(p) CAPITAL COMMITMENTS. Company will not make or commit to make any capital
--------------------
expenditure, capital addition or capital improvement.
-98-
(q) NO RELATED PARTY TRANSACTIONS. Company will not make any loans to, or
--------------------------------
enter into any transaction, agreement, arrangement or understanding or any other
nature with, any officer, director or employee of the Company.
(r) NOTICE OF CHANGE. Company will promptly advise Buyer in writing of any
------------------
material adverse change, or the occurrence of any event which involves any
substantial possibility of a material adverse change, in the business, financial
condition, results of operations, assets, liabilities or prospects of the
Company.
(s) CONSENTS. Company will use its, best good faith efforts to obtain the
--------
consent or approval of each person or entity whose consent or approval is
required for the consummation of the Transactions contemplated hereby and to do
all things necessary to consummate the Transactions contemplated by the Basic
Agreements.
3.2 COVENANTS OF BUYER. Buyer covenants and agrees that from the date hereof to
--------------------
the Closing without the prior written consent of Seller:
(a) ORDINARY COURSE OF BUSINESS. Buyer will operate the business in the
------------------------------
ordinary course and will use their best efforts to preserve the Company's
business, organization, goodwill and relationships with persons having business
dealings with them.
(b) MAINTAIN PROPERTIES. Buyer will maintain all of its properties in good
--------------------
working order, repair and condition (reasonable wear and use excepted) and cause
all steps reasonably necessary to maintain in full force and effect its patents,
trademarks, servicemarks, trade names, brand names, copyrights and other
intangible assets.
(c) COMPENSATION. Buyer will not (1) enter into or alter any employment
------------
agreements; (2) grant any increase in compensation other than normal merit
increases consistent with the Company's general prevailing practices to any
officer or employee; or (3) enter into or alter any labor or collective
bargaining agreement or any bonus or other employee fringe benefit.
(d) NO INDEBTEDNESS. Buyer will not create, incur, assume, guarantee or
----------------
otherwise become liable with respect to any obligation for borrowed money,
indebtedness, capitalized lease or similar obligation, except in the ordinary
course of business consistent with past practices where the entire net proceeds
thereof are deposited with and used by and in connection with the business of
the Company.
(e) MAINTAIN BOOKS. Buyer will maintain its books, accounts and records in the
--------------
usual, regular ordinary and sound business manner and in accordance with
generally accepted accounting principles applied on a basis consistent with past
practices.
(f) NO AMENDMENTS. Buyer will not amend its corporate charter or bylaws (or
--------------
similar documents) without prior consent of Seller and will cause the Company to
maintain its corporate existence, licenses, permits, powers and rights in full
force and effect.
(g) TAXES AND ACCOUNTING MATTERS. Buyer will file when due all federal, state
-----------------------------
and local tax returns and reports which shall be accurate and complete,
including but not limited to income, franchise, excise, ad valorem, and other
taxes with respect to its business and properties, and to pay as they become due
all taxes or assessments, except for taxes for which adequate reserves are
established and which are being contested in good faith by appropriate
proceedings. Buyer will not permit the Company to change their accounting
methods or practices or any depreciation, amortization or inventory valuation
policies or practices.
-99-
(h) NO DISPOSITION OR ENCUMBRANCE. Except in the ordinary course of business
-------------------------------
consistent with past practice, Buyer will not (1) dispose of or encumber any of
its properties and assets, (2) discharge or satisfy any lien or encumbrance or
pay any obligation or liability (fixed or contingent) except for previously
scheduled repayment of debt, (3) cancel or compromise any debt or claim, (4)
transfer or grant any rights under any concessions, leases, licenses,
agreements, patents, inventions, proprietary technology or process, trademarks,
servicemarks or copyrights, or with respect to any know-how, or (5) enter into
or modify in any material respect or terminate any existing license, lease, or
contract.
(i) INSURANCE. Buyer will maintain in effect all its current insurance
---------
policies.
(j) NO DIVIDENDS. Buyer will not declare, set aside or pay any dividends or
-------------
other distributions of any nature whatsoever.
(k) CONTRACTS. Buyer will not enter into or assume any contract, agreement,
---------
obligation, lease, license, or commitment except in the ordinary course of
business consistent with past practice or as contemplated by this Agreement.
(l) NO BREACH. Buyer will not do any act or omit to do any act which would
----------
cause a breach of any contract, commitment or obligation.
(m) DUE COMPLIANCE. Buyer will comply with all laws, regulations, rules and
---------------
ordinances applicable to it and to the conduct of its business.
(n) CAPITAL COMMITMENTS. Buyer will not make or commit to make any capital
--------------------
expenditure, capital addition or capital improvement.
(o) NOTICE OF CHANGE. Buyer will promptly advise Seller in writing of any
------------------
material adverse change, or the occurrence of any event which involves any
substantial possibility of a material adverse change, in the business, financial
condition, results of operations, assets, liabilities or prospects of the Buyer.
(p) CONSENTS. Buyer will use its best good faith efforts to obtain the consent
--------
or approval of each person or entity whose consent or approval is required for
the consummation of the Transactions contemplated hereby and to do all things
necessary to consummate the Transactions contemplated by the Basic Agreements.
IV.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF BUYER TO CLOSE
---------------------------------
The obligation of Buyer to close the Transactions contemplated hereby is subject
to the fulfillment by Seller prior to Closing of each of the following
conditions, which may be waived in whole or in part by Buyer:
4.1 COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS. The
--------------------------------------------------------------
representations and warranties of Seller contained in this Agreement shall have
been true and correct when made and shall be true and correct as of the Closing
with the same force and effect as if made at the Closing. Seller shall have
performed all agreements, covenants and conditions required to be performed by
Seller prior to the Closing.
4.2 NO ADVERSE CHANGE. There shall have been no event which has had or may
-------------------
have a material adverse effect upon the business, financial condition, results
of operation, assets, liabilities or prospects of the Company.
-100-
4.3 NO LEGAL PROCEEDINGS. No suit, action or other legal or administrative
----------------------
proceeding before any court or other governmental agency shall be pending or
threatened seeking to enjoin the consummation of the Transactions contemplated
hereby.
4.4 DOCUMENTS TO BE DELIVERED BY SELLER. Seller shall have delivered the
----------------------------------------
following documents:
(a) Stock certificates representing all of the Shares, duly endorsed to Buyer
and in blank or accompanied by duly executed stock powers, copies of which are
attached as Exhibit "A".
(b) A copy of (i) the Certificate of Incorporation of the Company, certified as
correct by the Company; and (ii) the Bylaws of the Company certified as correct
by the Company; and (iii) a certificate of the New York Tax Commission,
Franchise Tax Division, to the effect that the Company is in good standing and
has paid all franchise taxes in such state, all as attached hereto as Exhibit
"N";
(c) All corporate and other records of or applicable to the Company included but
not limited to, current and up-to-date minute books, stock transfer books and
registers, books of accounts, leases and material contracts.
(d)Such other documents or certificates as shall be reasonably required by Buyer
or its counsel in order to close and consummate this Agreement.
V.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF SELLER TO CLOSE
----------------------------------
The obligation of Seller to close the Transactions is subject to the fulfillment
prior to Closing of each of the following conditions, any of which may be waived
in whole or in part by Seller:
5.1 COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS. The
----------------------------------------------------------------
representations and warranties made by Buyer in this Agreement shall have been
true and correct when made and shall be true and correct in all material
respects at the Closing with the same force and effect as if made at the
Closing, and Buyer shall have performed all agreements, covenants and conditions
required to be performed by Buyer prior to the Closing.
5.2 NO LEGAL PROCEEDINGS. No suit, action or other legal or administrative
----------------------
proceedings before any court or other governmental agency shall be pending or
threatened seeking to enjoin the consummation of the Transactions contemplated
hereby.
5.3. DOCUMENTS TO BE DELIVERED BY BUYER.
----------------------------------------
(a) A copy of (i) the Articles of Incorporation of the Buyer, certified as
correct by theBuyer; and (ii) the Bylaws of the Buyer certified as correct by
the Buyer; and (iii) a certificate of the Delaware Tax Commission, Franchise
Tax Division, to the effect that the Buyer is in good standing and has paid all
franchise taxes in such state.
(b) All corporate and other records of or applicable to the Buyer included but
not limited to, current and up-to-date minute books, stock transfer books and
registers, books of accounts, leases and material contracts.
(c) Such other documents or certificates as shall be reasonably required by
Buyer or its counsel
-101-
in order to close and consummate this Agreement.
5.4PAYMENTS. Seller shall have received from Buyer all Common Stock to be
--------
issued at the Closing by Buyer.
5.5NO ADVERSE CHANGE. There shall have been no event which has had or may have
-------------------
a material adverse
effect upon the business, financial condition, results of operation, assets,
liabilities or prospects of the Buyer.
VI.
MODIFICATION, WAIVERS, TERMINATION
AND EXPENSES
-------------
6.1MODIFICATION. Buyer and Seller may amend, modify or supplement this
------------
Agreement in any manner as they may mutually agree in writing.
6.2WAIVERS. Buyer and Seller may in writing extend the time for or waive
-------
compliance by the other with any of the covenants or conditions of the other
contained herein.
6.3TERMINATION AND ABANDONMENT. This Agreement may be terminated and the
-----------------------------
purchase of the Shares may be abandoned before the Closing:
(a) By the mutual consent of Seller and Buyer;
(b) By Buyer, if the representations and warranties of Seller set forth herein
shall not be accurate, or the conditions precedent set forth in Article IV shall
have not have been satisfied, in all material respects; or
(c) By Seller, if the representations and warranties of Buyer set forth herein
shall not be accurate, or the conditions precedent set forth in Article V shall
not have been satisfied in all material respects.
Termination shall be effective on the date of receipt of written notice
specifying the reasons therefor.
VII.
MISCELLANEOUS
-------------
7.1 REPRESENTATIONS AND WARRANTIES TO SURVIVE. Unless otherwise
---------------------------------------------
provided, all of the representations and warranties contained in this Agreement
and in any certificate, exhibit or other document delivered pursuant to this
Agreement shall survive the Closing for a period of two (2) years. No
investigation made by any party hereto or their representatives shall constitute
a waiver of any representation or warranty, and no such representation or
warranty shall be merged into the Closing.
-102-
7.2 BINDING EFFECT OF THE BASIC AGREEMENTS. The Basic Agreements and
----------------------------------------
the certificates and other instruments delivered by or on behalf of the parties
pursuant thereto, constitute the entire agreement between the parties. The
terms and conditions of the Basic Agreements shall inure to the benefit of and
be binding upon the respective heirs, legal representatives, successor and
assigns of the parties hereto. Nothing in the Basic Agreements, expressed or
implied, confers any rights or remedies upon any party other than the parties
hereto and their respective heirs, legal representatives and assigns.
7.3 APPLICABLE LAW. The Basic Agreements are made pursuant to, and
---------------
will be construed under, the laws of the State of New York.
7.4 NOTICES. All notices, requests, demands and other communications
-------
hereunder shall be in writing and will be deemed to have been duly given when
delivered or mailed, first class postage prepaid:
(a) If to Seller, to:
Xx. Xxxxxx Xxxx
XXXXXXXXXXX.XXX CORP.
0000 Xxxxxxxxx-Xxxxxxx Xx.
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
(b) If to Buyer, to:
Xx. Xxxx Xxxx
Reconversion Technologies, Inc.
00 Xxxxxxxx Xxxxxx, Xxxxx X
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Mr. G. Xxxxx Xxxxxx
G. Xxxxx Xxxxxx & Associates, P.C.
One Memorial Place
0000 Xxxx 00xx Xxxxx, Xxxxx 000
Xxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
These addresses may be changed from time to time by written notice to the
other parties.
7.5 HEADINGS. The headings contained in this Agreement are for
--------
reference only and will not affect in any way the meaning or interpretation of
this Agreement.
7.6 COUNTERPARTS. This Agreement may be executed in counterparts, each
------------
of which will be deemed an original and all of which together will constitute
one instrument.
-103-
7.7 SEVERABILITY. If any one or more of the provisions of this
------------
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
under applicable law this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein. The
remaining provisions of this Agreement shall be given effect to the maximum
extent then permitted by law.
7.8 FORBEARANCE; WAIVER. Failure to pursue any legal or equitable
--------------------
remedy or right available to a party shall not constitute a waiver of such
right, nor shall any such forbearance, failure or actual waiver imply or
constitute waiver of subsequent default or breach.
7.9 ATTORNEYS' FEES AND EXPENSES. The prevailing party in any legal
-------------------------------
proceeding based upon this Agreement shall be entitled to reasonable attorneys'
fees and expenses and court costs.
7.10 EXPENSES. Each party shall pay all fees and expenses incurred by
--------
it incident to this Agreement and in connection with the consummation of all
transactions contemplated by this Agreement.
7.11 INTEGRATION. This Agreement and all documents and instruments
-----------
executed pursuant hereto merge and integrate all prior agreements and
representations respecting the Transactions, whether written or oral, and
constitute the sole agreement of the parties in connection therewith. This
Agreement has been negotiated by and submitted to the scrutiny of both Seller
and Buyer and their counsel and shall be given a fair and reasonable
interpretation in accordance with the words hereof, without consideration or
weight being given to its having been drafted by either party hereto or its
counsel.
IN WITNESS WHEREOF, the undersigned parties hereto have duly executed this
Agreement on the date first written above.
"BUYER"
RECONVERSION TECHNOLOGIES, INC.
BY: /S/ XXXX XXXX
------------------
XXXX XXXX, PRESIDENT
"COMPANY"
XXXXXXXXXXX.XXX CORP.
-104-
BY: /S/ XXXXXX XXXX
------------------------
XXXXXX XXXX, PRESIDENT
"SELLER"
/S/ XXXXXX XXXX
---------------------
XXXXXX XXXX
/S/ XXXXXXX XXXX
---------------------
XXXXXXX XXXX
/S/ XXXXXX XXXXXXX
---------------------
XXXXXX XXXXXXX
/S/ XXXXXX XXX
---------------------
XXXXXX XXX
/S/ XXXXX XXXXX
---------------------
XXXXX XXXXX
/S/ XXXXX XXXXX
---------------------
XXXXX XXXXX
/S/ XXXXX XXX
---------------------
XXXXX XXX
/S/ XXXXX XXXXXXXXX
---------------------
XXXXX XXXXXXXXX
/S/ XXXX XXXXXXXX
---------------------
XXXX XXXXXXXX
-105-
/S/ XXXXXX XXXXXX
---------------------
XXXXXX XXXXXX
-106-
EXHIBIT "A"
SELLERS' SHARES
SHAREHOLDER NUMBER OF SHARES
---------------- ----------------
Xxxxxx Xxxx 1,126,000
---------------- ----------------
Xxxxxxx Xxxx 846,000
---------------- ----------------
Xxxxxx Xxxxxxx 273,250
---------------- ----------------
Xxxxxx Xxx 200,000
---------------- ----------------
Xxxxx Xxxxx 10,000
---------------- ----------------
Xxxxx Xxxxx 468,750
---------------- ----------------
Xxxxx Xxx 776,000
---------------- ----------------
Xxxxx Xxxxxxxxx 270,000
---------------- ----------------
Xxxxxxx Xxxxxxxx 25,000
---------------- ----------------
Xxxxxx Xxxxxx 5,000
---------------- ----------------
-107-
EXHIBIT "G"
NONE
-108-
EXHIBIT "H"
NONE
-109-
EXHIBIT "I"
NONE
-110-
EXHIBIT "J"
INSURANCE
ON FILE WITH COMPANY.
-111-
EXHIBIT "K"
TRANSACTIONS WITH CERTAIN PERSONS
RECONVERSION TECHNOLOGIES, INC. ("RETK") HAS ENTERED INTO AN AGREEMENT TO SELL
KEYSTONE LABORATORIES, INC. TO XXXX X. XXXX FOR $720,000. THIS TRANSACTION IS
TO BE APPROVED BY THE DISINTERESTED DIRECTORS OF RETK AND RATIFIED BY THE NEW
BOARD OF DIRECTORS UPON COMPLETION OF THIS AGREEMENT.
-112-
EXHIBIT "L"
NONE
-113-
EXHIBIT "M"
NONE
-114-
