EXHIBIT 2.1
AGREEMENT AND PLAN OF ACQUISITION
AMONG
ASANTE TECHNOLOGIES, INC.,
AND
TECHNOCONCEPTS INC.
AND
ASANTE ACQUISITION CORP.
AGREEMENT AND PLAN OF ACQUISITION dated as of February 25, 2005, by and
among Asante Technologies, Inc., a Delaware corporation ("Asante"),
TechnoConcepts, Inc., a Colorado corporation ("Techno") and Asante Acquisition
Corp., a Nevada corporation ("AAC"), a wholly-owned subsidiary of Techno.
WHEREAS, the respective Boards of Directors of Asante, Techno and AAC
have each approved the transfers and purchases set forth herein (the
"Acquisition"), upon the terms and subject to the conditions set forth in this
Agreement;
WHEREAS, the respective Boards of Directors of Asante, Techno and AAC
have each determined that the Acquisition and the other transactions
contemplated hereby are consistent with, and in furtherance of, their respective
business strategies and goals and are in the best interests of their respective
stockholders;
WHEREAS, Asante, Techno and AAC desire to make certain representations,
warranties, covenants and agreements in connection with the Acquisition and also
to prescribe various conditions to the Acquisition.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
ARTICLE I ARTICLE I
THE ACQUISITION
SECTION 1.1. The Acquisition. Upon the terms and subject to the
conditions set forth in this Agreement, Asante will sell, transfer and convey to
AAC the inventions, discoveries, ideas, improvements, processes, designs,
procedures, formulas, know-how, assets, patents, copyrights, and other rights as
set forth in Exhibit 1.1(a) attached hereto, in exchange for the receipt by
Asante of shares of Techno common stock, having a market value of $5,000,000
("Initial Shares") and additional shares of Techno common stock having a market
value of $3,000,000 ("Earn-out Shares) to be issued pursuant to the provisions
of an Earn-out Agreement set forth as Exhibit 1.1(b) attached hereto
(collectively the "Techno Stock") and AAC will assume specified reasonable
liabilities, as specified in the attached Exhibit 1.1.1., of Asante under this
term. The ""Market Value"shall be determined based upon the closing bid price of
the common stock for the ten trading days prior to the Closing Date. The assets,
patents, copyrights, and other rights not hereby intended to be sold,
transferred or conveyed hereunder are set forth in Exhibit 1.1(b) attached
hereto.
SECTION 1.2. Closing. The closing of the Acquisition (the "Closing")
will take place at 10:00 a.m. on the day thirty days following execution hereof
(the "Closing Date"), which shall be no later than the second business day after
satisfaction or waiver of the conditions set forth in Article VI, unless another
time or date is agreed to by the parties hereto. The Closing will be held at
such location as is agreed to by the parties hereto.
SECTION 1.3. Effective Time. Subject to the provisions of this
Agreement, as soon as practicable on the Closing Date, the parties shall cause
the Acquisition to be consummated by filing appropriate documents executed in
accordance with the relevant provisions of applicable law and shall make all
other filings or recordings required to transfer all items and rights listed on
Exhibit 1.1(a) attached hereto.
SECTION 1.4. Effects of the Acquisition. The Acquisition shall have the
effect of transferring to AAC one hundred percent (100%) of ownership and rights
to the items set forth on Exhibit 1.1(b) attached hereto.
SECTION 1.5. Certificate of Incorporation and By-laws. The Certificate
of Incorporation of Asante, as amended and in effect prior to the Closing date,
and the By-laws of Asante, in effect prior to the Closing date, shall be
provided to Techno.
SECTION 1.6. Reservation of Right to Revise Transaction. If Techno and
Asante agree, the parties hereto may change the method of effecting the asset
acquisition from Asante, and each party shall cooperate in such efforts,
including, to provide for, among other methods, (a) a merger of Asante with and
into a new corporation, or (b) a merger of Asante with and into Techno;
provided, however, that no such change shall alter or change the amount or kind
of consideration to be issued to Asante provided for in this Agreement (the
"Acquisition Consideration").
ARTICLE II
EFFECT OF THE ACQUISITION ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS;
DELIVERY OF CERTIFICATES
SECTION 2.1. Effect on Capital Stock. As of the Closing, by virtue of
the Acquisition and without any action on the part of the holder of any shares
of Techno or Asante Common Stock each outstanding option and warrant to purchase
shares of Asante Common Stock shall remain outstanding, unchanged by reason of
the Acquisition. All convertible securities of Asante shall remain outstanding,
unchanged by reason of the Acquisition.
SECTION 2.2. Techno to Deliver Certificates. At the Closing, Techno
shall deliver to Asante a stock certificate representing the Acquisition
Consideration. Techno shall issue the Acquisition Consideration in a single
certificate in the name of Asante.
SECTION 2.3. No Fractional Securities. Notwithstanding any other
provision of this Agreement, no certificates or scrip for shares of capital
stock representing less than one share of Techno Stock shall be issued.
SECTION 2.6. Restricted Securities. The shares of the Techno Stock to
be issued in connection with the Acquisition shall be deemed "restricted
securities" as defined by Rule 144(a)(3) under the Securities Act of 1933, as
amended (the "Securities Act"). The certificates evidencing such shares shall
bear the following restrictive legend:
The shares evidenced by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), and may not be sold or otherwise
transferred unless registered under the Securities Act or
there is an opinion from counsel to the Company that such sale
or other transfer may be made pursuant to an exemption from
the registration requirement of the Securities Act.
Techno agrees that within one year of the closing date, it will
file a registration covering the Initial Shares being delivered at
closing .
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of Asante. Except as set
forth on the Disclosure Schedule which shall be delivered by Asante to Techno
within seven days after the execution of this Agreement (the "Asante Disclosure
Schedule") and making reference to the particular subsection of this Agreement
to which exception is being taken, Asante represents and warrants to Techno as
follows:
(a) Organization, Standing and Corporate Power. (i)
Asante is a corporation duly organized, validly existing and in good standing
(with respect to jurisdictions which recognize such concept) under the laws of
the jurisdiction in which it is organized and has the requisite corporate or
other power and authority to carry on its business as now being conducted,
except, for those jurisdictions where the failure to be so organized, existing
or in good standing individually or in the aggregate would not have a material
adverse effect (as defined in Section 9.3) on Asante. Asante is duly qualified
or licensed to do business and is in good standing (with respect to
jurisdictions which recognize such concept) in each jurisdiction in which the
nature of its business or the ownership, leasing or operation of its properties
makes such qualification or licensing necessary, except for those jurisdictions
where the failure to be so qualified or licensed or to be in good standing would
not have a material adverse effect on Asante. (ii) Asante has delivered to
Techno prior to the execution of this Agreement, complete and correct copies of
its Certificate of Incorporation and By-Laws, as amended to date.
(b) Subsidiaries. Asante does not beneficially own
any subsidiaries nor does it own any capital stock or other proprietary
interest, directly, indirectly in any corporation, trust, partnership, joint
venture or other entity.
(c) Capital Structure. The authorized capital stock
of Asante consists of 25,000,000 shares of Common Stock, $.001 par value
("Asante Common Stock") and 2,000,000 shares of preferred stock, $.001 par value
("Asante Preferred Stock"). As of the date hereof: (i) shares of Asante Common
Stock were issued and outstanding; (ii) no shares of Asante Common Stock were
held by Asante in its treasury; (iii) no shares of Asante Preferred Stock were
issued and outstanding, (iii) shares of Asante Common Stock were reserved for
issuance upon exercise of stock options issuable under the Asante Stock Option
Plans; and (iv) shares of Asante Common Stock were reserved for issuance upon
the exercise of the common stock purchase warrants and convertible securities
set forth on Exhibit 3.1(c) attached hereto. All outstanding shares of capital
stock of Asante are, and all shares which may be issued will be, when issued,
duly authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights. Except as set forth in this Section 3.1(c) or Section 3.1(c)
of the Asante Disclosure Schedule, (x) there are not issued, reserved for
issuance or outstanding (A) any shares of capital stock or other voting
securities of Asante, (B) any securities of Asante convertible into or
exchangeable or exercisable for shares of capital stock or voting securities of
Asante, (C) any warrants, calls, options or other rights to acquire from Asante,
and any obligation of Asante to issue, any capital stock, voting securities or
securities convertible into or exchangeable or exercisable for capital stock or
voting securities of Asante, and (y) there are no outstanding obligations of
Asante to repurchase, redeem or otherwise acquire any such securities or to
issue, deliver or sell, or cause to be issued, delivered or sold, any such
securities.
(d) Authority; Noncontravention. Asante has all
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement by Asante and the consummation by Asante of the
transactions contemplated by this Agreement have been duly authorized by all
necessary corporate action on the part of Asante, subject, in the case of the
Acquisition, to the Asante Stockholder Approval (approval of the shareholders of
Asante as required by applicable Delaware law). This Agreement has been duly
executed and delivered by Asante and, assuming the due authorization, execution
and delivery by Asante constitutes the only legal, valid and binding obligation
of Asante, enforceable against Asante in accordance with its terms. The
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated by this Agreement and compliance with the provisions
of this Agreement will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or
loss of a benefit under, or result in the creation of any Lien upon any of the
Assets to be transferred by Asante under, (i) the certificate of incorporation
or By-Laws of Asante, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, license or
similar authorization applicable to Asante or its properties or assets or (iii)
subject to the governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law, ordinance, rule
or regulation applicable to Asante or its properties or assets, other than, in
the case of clauses (ii) and (iii), any such conflicts, violations, defaults,
rights, losses or Liens that individually or in the aggregate would not (x) have
a material adverse effect on Asante or (y) reasonably be expected to impair the
ability of Asante to perform its obligations under this Agreement. No consent,
approval, order or authorization of, action by or in respect of, or
registration, declaration or filing with, any federal, state, local or foreign
government, any court, administrative, regulatory or other governmental agency,
commission or authority or any nongovernmental self-regulatory agency,
commission or authority (a "Governmental Entity") is required by or with respect
to Asante in connection with the execution and delivery of this Agreement by
Asante or the consummation by Asante of the transactions contemplated by this
Agreement, except for (1) the filing of appropriate documents with the relevant
authorities of other states in which Asante is qualified to do business and such
filings with Governmental Entities to satisfy the applicable requirements of
state securities or "blue sky" laws or the transfer or assignment of patents,
service marks, trade names, copy rights or similar rights; and (2) such
consents, approvals, orders or authorizations the failure of which to be made or
obtained individually or in the aggregate would not (x) have a material adverse
effect on Asante or (y) reasonably be expected to impair the ability of Asante
to perform its obligations under this Agreement.
Except as set forth in Section 3.1(d) of the Asante Disclosure
Schedule, to the knowledge of Asante, Asante is not in material violation of, or
in material default under, (i) any term or provision of its Certificate of
Incorporation or By-Laws; or (ii) any existing applicable law, rule, regulation,
judgment, order or decree of any governmental agency or court, domestic or
foreign, having jurisdiction over it or any of its properties or business.
Asante owns, possesses or has obtained all material governmental and other
licenses, permits, certifications, registration, approvals or consents and other
authorizations necessary to own or lease, as the case may be, and to operate its
properties and to conduct its business or operations as presently conducted and
all such governmental and other licenses, permits, certifications,
registrations, approvals, consents and other authorizations are outstanding and
in good standing and there are no existing actions, seeking to cancel, terminate
or limit such licenses, permits, certifications, registrations, approvals or
consents or authorizations.
(e) Undisclosed Liabilities. To Techno's knowledge,
except (i) as reflected in the Asante Financial Statements (as defined in
Section 3.1(h)) or in the notes thereto, (ii) for liabilities incurred in
connection with this Agreement or the transactions contemplated hereby, or (iii)
liabilities incurred in the ordinary cause of Asante's business since October 2,
2004, Asante has no liabilities or obligations of any nature which, individually
or in the aggregate, would have a material adverse effect on Asante or its
ability to carry out the terms of this Agreement.
(f) Information Supplied. None of the information
supplied or to be supplied by Asante specifically for inclusion or incorporation
by reference any reports, notices, schedules or filings to be filed with the
Securities and Exchange Commission (the "SEC") by Asante in connection with the
transactions contemplated hereby will to Asante's knowledge contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading.
(g) Taxes. (i) To Asante's knowledge, Asante has
filed all material tax returns and reports required to be filed by it and all
such returns and reports are complete and correct in all material respects, or
requests for extensions to file such returns or reports have been timely filed,
granted and have not expired, except to the extent that such failures to file,
to be complete or correct or to have extensions granted that remain in effect
individually or in the aggregate would not have a material adverse effect on
Asante. Asante has paid all taxes (as defined herein) shown as due on such
returns. (ii) As used in this Agreement, "taxes" shall include all (x) federal,
state, local or foreign income, property, sales, excise and other taxes or
similar governmental charges, including any interest, penalties or additions
with respect thereto, (y) liability for the payment of any amounts of the type
described in (x) as a result of being a member of an affiliated, consolidated,
combined or unitary group, and (z) liability for the payment of any amounts as a
result of being party to any tax sharing agreement or as a result of any express
or implied obligation to indemnify any other person with respect to the payment
of any amounts of the type described in clause (x) or (y).
(h) Financial Statements. Asante has heretofore
delivered to Asante audited financial statements, relating to the period ended
October 2, 2004 (the "Financial Statements"). To Asante's knowledge, the
Financial Statements fairly present the financial position and results of
operations of Asante for the periods presented.
(i) Absence of Certain Changes or Events. Except for
liabilities incurred in connection with this Agreement or the transactions
contemplated hereby, and except as set forth on Schedule 3.1, since October 2,
2004, Asante has conducted its business only in the ordinary course and to
Asante's knowledge there has not been any material adverse change in Asante's
business or financial condition.
(j) Intellectual Property. To the knowledge of
Asante, Asante owns or has a valid license to use all trademarks, service marks,
trade names, patents and copyrights (including any registrations or applications
for registration of any of the foregoing) (collectively, the "Asante
Intellectual Property"), all of which are set forth on Exhibit 3.1(j), necessary
to carry on its business substantially as currently conducted and as set forth
in its business plan and as otherwise represented. except for such Asante
Intellectual Property the failure of which to own or validly license
individually or in the aggregate would not have a material adverse effect on
Asante. Asante has received no notice of infringement of or conflict with, and,
to Asante's knowledge, there are no infringements of or conflicts (i) with the
rights of others with respect to the use of, or (ii) by others with respect to,
any Asante Intellectual Property that individually or in the aggregate, in
either such case, would have a material adverse effect on Asante.
SECTION 3.2. Representations and Warranties of Techno and to the extent
applicable AAC. Except as set forth on the Disclosure Schedule delivered by
Techno to Asante prior to the execution of this Agreement (the "Techno
Disclosure Schedule") and making reference to the particular subsection of this
Agreement to which exception is being taken, Techno and AAC represent and
warrant to Asante the following.
(a) Organization, Standing and Corporate Power.
Techno is a corporation or other legal entity duly organized, validly existing
and in good standing (with respect to jurisdictions which recognize such
concept) under the laws of the jurisdiction in which it is organized and has the
requisite corporate or other power, as the case may be, and authority to carry
on its business as now being conducted, except, as to subsidiaries, for those
jurisdictions where the failure to be so organized, existing or in good standing
individually or in the aggregate would not have a material adverse effect on
Techno. Each of Techno and its subsidiaries is duly qualified or licensed to do
business and is in good standing (with respect to jurisdictions which recognize
such concept) in each jurisdiction in which the nature of its business or the
ownership, leasing or operation of its properties makes such qualification or
licensing necessary, except for those jurisdictions where the failure to be so
qualified or licensed or to be in good standing individually or in the aggregate
would not have a material adverse effect on Techno. Techno has delivered to
Asante prior to the execution of this Agreement, complete and correct copies of
its Certificate of Incorporation and By-Laws, as amended to date.
(b) Subsidiaries. Except as set forth in Section
3.2(b) of the Techno Disclosure Schedule, Techno does not beneficially own any
subsidiaries nor does it own any capital stock or other proprietary interest,
directly, indirectly in any corporation, trust, partnership, joint venture or
other entity.
(c) Capital Structure. The authorized capital stock
of Techno consists of 50,000,000 shares of Common Stock, $.001 par value per
share ("Techno Common Stock") and 5,000,000 shares of Preferred Stock, $.001 par
value ("Techno Preferred Stock"). At the close of business on the date hereof
shares of Techno Common Stock and shares of Techno Preferred Stock were issued
and outstanding. All outstanding shares of capital stock of Techno are, and all
shares of Techno Stock which may be issued pursuant to this Agreement will be,
when issued, duly authorized, validly issued, fully paid and nonassessable and
not subject to preemptive rights. Except as set forth in Section 3.2 (c) of the
Techno Disclosure Schedule there are not issued, reserved for issuance or
outstanding (A) any shares of capital stock or other voting securities of
Techno, (B) any securities of Techno or any Techno subsidiary convertible into
or exchangeable or exercisable for shares of capital stock or voting securities
of Techno (C) any warrants, calls, options or other rights to acquire from
Techno or any Techno subsidiary, and any obligation of Techno or any Techno
subsidiary to issue, any capital stock, voting securities or securities
convertible into or exchangeable or exercisable for capital stock or voting
securities of Techno, and (D) there are no outstanding obligations of Techno or
any Techno subsidiary to repurchase, redeem or otherwise acquire any such
securities or to issue, deliver or sell, or cause to be issued, delivered or
sold, any such securities. There are no outstanding (X) securities of Techno
convertible into or exchangeable or exercisable for shares of capital stock or
other voting securities or ownership interests in any Techno subsidiary, (Y)
warrants, calls, options or other rights to acquire from Techno, and any
obligation of Techno to issue, any capital stock, voting securities or other
ownership interests in, or any securities convertible into or exchangeable or
exercisable for any capital stock, voting securities or ownership interests in,
any Techno subsidiary or (Z) obligations of Techno to repurchase, redeem or
otherwise acquire any such outstanding securities of Techno subsidiaries or to
issue, deliver or sell, or cause to be issued, delivered or sold, any such
securities. Except as set forth in Section 3.2(c) of the Techno Disclosure
Schedule, Techno is not a party to any agreement restricting the transfer of,
relating to the voting of, requiring registration of, or granting any preemptive
or, antidilutive rights with respect to, any securities of the type referred to
in the two preceding sentences. Techno does not directly or indirectly
beneficially own any securities or other beneficial ownership interests in any
other entity except for non-controlling investments made in the ordinary course
of business in entities which are not individually, or in the aggregate,
material to Techno as a whole. All securities of Techno have been issued (a) in
compliance with Section 5 of the Securities Act or (b) pursuant to an exemption
from registration under the Securities Act and (c) in compliance with all
relevant state securities or "blue sky" laws.
(d) Authority; Noncontravention. Techno has all
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement by Techno and the consummation by Techno of the
transactions contemplated by this Agreement have been duly authorized by all
necessary corporate action on the part of Techno. This Agreement has been duly
executed and delivered by Techno and, assuming the due authorization, execution
and delivery by Techno, constitutes the only legal, valid and binding
obligations of Techno, enforceable against Techno in accordance with its terms.
The execution and delivery of this Agreement does not, and the consummation of
the transactions contemplated by this Agreement and compliance with the
provisions of this Agreement will not, conflict with, or result in any violation
of, or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any obligation
or loss of a benefit under, or result in the creation of any Lien upon any of
the properties or assets of Techno or any of its subsidiaries under, (i) the
certificate of incorporation or By-Laws of Techno or the comparable
organizational documents of any of its subsidiaries, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise, license or similar authorization
applicable to Techno or any of its subsidiaries or their respective properties
or assets or (iii) subject to the governmental filings and other matters
referred to in the following sentence, any judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to Techno or any of its
subsidiaries or their respective properties or assets, other than, in the case
of clauses (ii) and (iii), any such conflicts, violations, defaults, rights,
losses or Liens that individually or in the aggregate would not (x) have a
material adverse effect on Techno or (y) reasonably be expected to impair the
ability of Techno to perform its obligations under this Agreement. No consent,
approval, order or authorization of, action by, or in respect of, or
registration, declaration or filing with, any Governmental Entity is required by
or with respect to Techno or any of its subsidiaries in connection with the
execution and delivery of this Agreement by Techno or the consummation by Techno
of the transactions contemplated by this Agreement, except for (1) the filing
with the SEC of such reports under Section 13(a), 13(d), 15(d) or 16(a) of the
Exchange Act as may be required in connection with this Agreement and the
transactions contemplated by this Agreement; (2) the filing of appropriate
documents with the relevant authorities of other states in which Techno is
qualified to do business and such filings with Governmental Entities to satisfy
the applicable requirements of state securities or "blue sky" laws; and (3) such
consents, approvals, orders or authorizations the failure of which to be made or
obtained individually or in the aggregate would not (x) have a material adverse
effect on Techno, or (y) reasonably be expected to impair the ability of Techno
to perform its obligations under this Agreement.
Except as set forth in Section 3.2(d) of the Techno Disclosure
Schedule, Techno is not in material violation of, or in default under, (i) any
term or provision of its Certificate of Incorporation or By-Laws; or (ii) any
existing applicable law, rule, regulation, judgment, order or decree of any
governmental agency or court, domestic or foreign, having jurisdiction over it
or any of its properties or business. Techno owns, possesses or has obtained all
material governmental and other licenses, permits, certifications, registration,
approvals or consents and other authorizations necessary to own or lease, as the
case may be, and to operate its properties and to conduct its business or
operations as presently conducted and all such governmental and other licenses,
permits, certifications, registrations, approvals, consents and other
authorizations are outstanding and in good standing and there are no existing
actions, seeking to cancel, terminate or limit such licenses, permits,
certifications, registrations, approvals or consents or authorizations.
(e) SEC Documents; Undisclosed Liabilities; Financial
Statements. (i) Techno has filed all registration statements, prospectuses,
reports, schedules, forms, statements and other documents (including exhibits
and all other information incorporated therein) required to be filed pursuant to
the Securities Act, the Securities Exchange Act of 1934 (the "Exchange Act") and
the rules and regulations promulgated thereunder, with the SEC, (the "Techno SEC
Documents"). As of their respective dates, the Techno SEC Documents complied in
all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such Techno SEC Documents, and none of the
Techno SEC Documents when filed contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The financial statements of Techno
included in the Techno SEC Documents comply as to form, as of their respective
dates of filing with the SEC, in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present the consolidated financial position of Techno
and its consolidated subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments. (ii)
The unaudited consolidated financial statements of Techno, (the "Techno
Financial Statements"), which are included in the Techno SEC Documents, have
previously been made available to the Company. The Techno Financial Statements
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto; and fairly present, in all material respects, on a consolidated basis,
the financial position of Techno at, and the results of its operations for, each
of the periods then ended and were prepared in conformity with generally
accepted accounting principles as utilized in the United States ("USGAAP")
applied on a consistent basis, except as otherwise disclosed therein and,
subject to normal year-end adjustments, the absence of footnote disclosures, and
any other adjustments described therein. (iii) Except as reflected in the Techno
Financial Statements, or set forth in Techno's Disclosure Schedule, to the
knowledge of Techno, Techno has no Liabilities (as hereinafter defined) or
obligations of any nature.
(f) Information Supplied. None of the information
supplied or to be supplied by Techno specifically for inclusion or incorporation
by reference in any registration statements, prospectuses, reports, schedules or
other documents to be filed with the SEC or any other governmental entity, shall
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. All SEC Filings will comply as to form and substance in all material
respects with the requirements of the Securities Act and the Exchange Act and
the rules and regulations thereunder, except that no representation or warranty
is made by Techno with respect to statements made or incorporated by reference
therein based on information supplied by Techno specifically for inclusion or
incorporation by reference in any subsequent SEC Filing.
(g) Absence of Certain Changes or Events. Except for
liabilities incurred in connection with this Agreement or the transactions
contemplated hereby since December 31, 2004, Techno and its subsidiaries have
conducted their business only in the ordinary course since such date and prior
to the date hereof, and there has not been (i) any material adverse change in
Techno, (ii) any declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to any of
Techno's capital stock, (iii) any split, combination or reclassification of any
of Techno's capital stock or any issuance or the authorization of any issuance
of any other securities in respect of, in lieu of or in substitution for shares
of Techno's capital stock, (iv)(A) any granting by Techno or any of its
subsidiaries to any current or former director, executive officer or other key
employee of Techno or its subsidiaries of any increase in compensation, bonus or
other benefit, (B) any granting by Techno or any of its subsidiaries to any such
current or former director, executive officer or key employee of any increase in
severance or termination pay, or (C) any entry by Techno or any of its
subsidiaries into, or any amendment of, any employment, deferred compensation
consulting, severance, termination or indemnification agreement with any such
current or former director, executive officer or key employee, (v) except
insofar as may have been disclosed in Techno SEC Documents filed and publicly
available prior to the date of this Agreement or required by a change in USGAAP,
any change in accounting methods, principles or practices by Techno materially
affecting its assets, liabilities or business, (vi) except insofar as may have
been disclosed in the Techno SEC Documents, any tax election that individually
or in the aggregate would have a material adverse effect on Techno or any of its
tax attributes or any settlement or compromise of any material income tax
liability or (vii) any action taken by Techno or any of the Techno subsidiaries
during the period from December 31, 2004 through the date of this Agreement
that, if taken during the period from the date of this Agreement through the
Effective Time, would constitute a breach of Section 4.1(b).
(h) Compliance with Applicable Laws; Litigation. (i)
To the knowledge of Techno, Techno holds all permits, licenses, variances,
exemptions, orders, registrations and approvals of all Governmental Entities
which are required for the operation of the businesses of Techno (the "Techno
Permits") except where the failure to have any such Techno Permits individually
or in the aggregate would not have a material adverse effect on Techno. Techno
is in compliance with the terms of the Techno Permits and all applicable
statutes, laws, ordinances, rules and regulations, except where the failure so
to comply individually or in the aggregate would not have a material adverse
effect on Techno. As of the date of this Agreement, no action, demand,
requirement or investigation by any Governmental Entity and no suit, action or
proceeding by any person, in each case with respect to Techno or any of its
respective properties, is pending or, to the knowledge of Techno, threatened,
except as set forth in Techno SEC filed documents. (ii) Techno is not subject to
any outstanding order, injunction or decree which has had or, insofar as can be
reasonably foreseen, individually or in the aggregate will have a material
adverse effect on Techno.
(i) Absence of Benefit Plans. Except as set forth in
the Techno Disclosure Schedule, Techno has no severance, or employment
agreements or policies, bonus, pension, profit sharing, deferred compensation,
incentive compensation, stock ownership, stock purchase, stock option, phantom
stock, retirement, vacation, severance, disability, death benefit,
hospitalization, medical or other plan, arrangement or understanding providing
benefits to any current or former employee, officer or director of Techno.
(j) [INTENTIONALLY OMITTED]
(k) Taxes. (i) Techno has filed all material tax
returns and reports required to be filed by it and all such returns and reports
are complete and correct in all material respects, or requests for extensions to
file such returns or reports have been timely filed, granted and have not
expired, except to the extent that such failures to file, to be complete or
correct or to have extensions granted that remain in effect individually or in
the aggregate would not have a material adverse effect on Techno. Techno has
paid all taxes shown as due on such returns, and the most recent financial
statements contained in the Techno SEC Documents reflect an adequate reserve in
accordance with USGAAP for all taxes payable by Techno for all taxable periods
and portions thereof accrued through the date of such financial statements.
(l) State Takeover Statutes; Certificate of
Incorporation. The Board of Directors of Techno and AAC (including the
disinterested Directors thereof) have unanimously approved this Agreement and
the transactions contemplated hereby and such approval constitutes approval of
the Acquisition, and the other transactions contemplated hereby by the Techno
and AAC Boards of Directors and constitutes approval of the Acquisition, the
issuance of Techno and AAC Common Stock in connection therewith and the other
transactions contemplated hereby.
(m) Intellectual Property. To the knowledge of
Techno, Techno owns or has a valid license to use all trademarks, service marks,
trade names, patents and copyrights (including any registrations or applications
for registration of any of the foregoing) (collectively, the "Techno
Intellectual Property") necessary to carry on its business substantially as
currently conducted, except for such Techno Intellectual Property the failure of
which to own or validly license individually or in the aggregate would not have
a material adverse effect on Techno. Techno has not received any notice of
infringement of or conflict with, and, to Techno's knowledge, there are no
infringements of or conflicts (i) with the rights of others with respect to the
use of, or (ii) by others with respect to, any Techno Intellectual Property that
individually or in the aggregate, in either such case, would have a material
adverse effect on Techno.
(n) Certain Contracts. Except as set forth in the
Techno SEC Documents, Techno is not a party to or bound by (i) any "material
contract" (as such term is defined in item 601(b)(10) of Regulation S-K of the
SEC), (ii) any non-competition agreement or any other agreement or obligation
which purports to limit in any material respect the manner in which, or the
localities in which, all or any material portion of the business of Techno
(including Techno), taken as a whole, is or would be conducted, or (iii) any
contract or other agreement which would prohibit or materially delay the
consummation of the Acquisition or any of the transactions contemplated by this
Agreement (all contracts of the type described in clauses (i) and (ii) being
referred to herein as "Techno Material Contracts"). Each Techno Material
Contract is valid and binding on Techno and is in full force and effect, and
Techno has in all material respects performed all obligations required to be
performed by it to date under each Techno Material Contract, except where such
noncompliance, individually or in the aggregate, would not have a material
adverse effect on Techno. Techno does not know of, nor has received notice of,
any violation or default under (nor, to the knowledge of Techno, does there
exist any condition which with the passage of time or the giving of notice or
both would result in such a violation or default under) any Techno Material
Contract.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.1. Conduct of Business.
(a) Conduct of Business by Techno. Except as set
forth in Section 4.1(a) of the Techno Disclosure Schedule, and as otherwise
expressly contemplated by this Agreement or as consented to by Asante in
writing, such consent not to be unreasonably withheld or delayed, during the
period from the date of this Agreement to the Effective Time, Techno shall carry
on its business in the ordinary course consistent with past practice and in
compliance in all material respects with all applicable laws and regulations
and, to the extent consistent therewith, use all reasonable efforts to preserve
intact their current business organizations, use reasonable efforts to keep
available the services of their current officers and other key employees and
preserve their relationships with those persons having business dealings with
them to the end that their goodwill and ongoing businesses shall be unimpaired
at the Closing. Without limiting the generality of the foregoing (but subject to
the above exceptions), except as otherwise contemplated by this Agreement,
during the period from the date of this Agreement to the Closing, Techno shall
not, and shall not permit any of its subsidiaries to: issue, deliver, sell,
pledge or otherwise encumber or subject to any Lien any shares of its capital
stock, any other voting securities or any securities convertible into, or any
rights, warrants or options to acquire, any such shares, voting securities or
convertible securities.
(b) Conduct of Business by Asante. Except as set
forth in Section 4.1(b) of the Asante Disclosure Schedule, as otherwise
expressly contemplated by this Agreement or as consented to by Techno in
writing, such consent not to be unreasonably withheld or delayed, during the
period from the date of this Agreement to the Closing, Asante shall carry on its
business in the ordinary course consistent with past practice and in compliance
in all material respects with all applicable laws and regulations and, to the
extent consistent therewith, use all reasonable efforts to preserve intact its
current business organization, use reasonable efforts to keep available the
services of its current officers and other key employees and preserve its
relationships with those persons having business dealings with them to the end
that its goodwill and ongoing businesses shall be unimpaired at the Closing.
Without limiting the generality of the foregoing (but subject to the above
exceptions), except as otherwise contemplated by this Agreement, during the
period from the date of this Agreement to the Closing, Asante shall not:
(i) (x) declare, set aside or pay any cash
dividends on, make any other distributions in respect of, or enter into any
agreement with respect to the voting of, any of its capital stock, (y) split,
combine or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock;
(ii) issue, deliver, sell, pledge or otherwise
encumber or subject to any Lien any shares of its capital stock, any other
voting securities or any securities convertible into, or any rights, warrants or
options to acquire, any such shares, voting securities or convertible
securities;
(iii) except as contemplated hereby, amend its
certificate of incorporation, By-Laws or other comparable organizational
documents;
(iv) acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial portion of the assets of, or
by any other manner, any business or any person;
(v) sell, lease, license, mortgage or otherwise
encumber or subject to any Lien or otherwise dispose of any of its properties or
assets (including securitization) except for the spinoff or distribution of its
primary operating subsidiaries identified on Annex B.
(vi) take any action that would cause the
representations and warranties set forth in Section 3.2(g) to no longer be true
and correct;
(vii) incur any indebtedness for borrowed money
or issue any debt securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for the obligations of any person for borrowed
money; or
(viii) authorize, or commit or agree to take,
any of the foregoing actions.
(c) Other Actions. Except as required by law, Techno,
and Asante shall not voluntarily take any action that would, or that could
reasonably be expected to, result in any of the representations and warranties
of such party set forth in this Agreement that are qualified as to materiality
becoming untrue at the Effective Time.
(d) Advice of Changes. Techno and Asante shall
promptly advise the other orally and in writing to the extent either party has
knowledge of (i) any representation or warranty made by it contained in this
Agreement that is qualified as to materiality becoming untrue or inaccurate in
any respect or any such representation or warranty that is not so qualified
becoming untrue or inaccurate in any material respect, (ii) the failure by it to
comply in any material respect with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by it under
this Agreement and (iii) any change or event having, or which, insofar as can
reasonably be foreseen, could reasonably be expected to have a material adverse
effect on such party or on the truth of their respective representations and
warranties or the ability of the conditions set forth in Article VI to be
satisfied; provided, however, that no such notification shall affect the
representations, warranties, covenants or agreements of the parties (or remedies
with respect thereto) or the conditions to the obligations of the parties under
this Agreement.
SECTION 4.2. No Solicitation by Asante.
(a) Asante shall not, nor shall it authorize or
permit any of its directors, officers or employees or any investment banker,
financial advisor, attorney, accountant or other representative retained by it
to, directly or indirectly through another person, (i) solicit, initiate or
encourage (including by way of furnishing information), or take any other action
designed to facilitate, any inquiries or the making of any proposal which
constitutes any Asante Takeover Proposal (as defined below) or (ii) participate
in any discussions or negotiations regarding any Asante Takeover Proposal;
provided, however, that if the Board of Directors of Asante determines in good
faith, based on the advice of outside counsel, that it is necessary to do so in
order to act in a manner consistent with its fiduciary duties to Asante's
stockholders under applicable law, Asante may, in response to an Asante Superior
Proposal (as defined in Section 4.2(b)) which was not solicited by it, which did
not otherwise result from a breach of this Section 4.2(a) and subject to
providing prior written notice of its decision to take such action to Techno and
compliance with Section 4.2(c) (x) furnish information with respect to Asante
and its subsidiaries to any person making a Asante Superior Proposal pursuant to
a customary confidentiality agreement (as determined by Asante based on the
advice of its outside counsel, the terms of which are no more favorable to such
person than those normally utilized to protect the confidential information of
the disclosing party) and (y) participate in discussions or negotiations
regarding such Asante Superior Proposal. For purposes of this Agreement, "Asante
Takeover Proposal" means any inquiry, proposal or offer from any person relating
to any direct or indirect acquisition or purchase of a business that constitutes
50% or more of the net revenues, net income or the assets of Asante and its
subsidiaries, taken as a whole, or 10% or more of any class of equity securities
of Asante, any tender offer, exchange offer or other transactions that if
consummated would result in any person beneficially owning 10% or more of any
class of equity securities of Asante, or any merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar transaction
involving Asante or the capital stock of Asante other than the transactions
contemplated by this Agreement.
(b) Except as expressly permitted by this Section
4.2, neither the Board of Directors of Asante nor any committee thereof shall
(i) withdraw or modify, or propose publicly to withdraw or modify, in a manner
adverse to Techno, the approval or recommendation by such Board of Directors,
this Agreement or the issuance of Asante Capital Stock in connection with the
Acquisition, (ii) approve or recommend, or propose publicly to approve or
recommend, any Asante Takeover Proposal, or (iii) cause Asante to enter into any
letter of intent, agreement in principle, acquisition agreement or other similar
agreement (each, a "Asante Acquisition Agreement") related to any Asante
Takeover Proposal. Notwithstanding the foregoing, at any time prior to the
obtaining of the Asante Stockholder Approval, the Board of Directors of Asante,
to the extent that it determines in good faith, based upon the advice of outside
counsel, that it is necessary to do so in order to act in a manner consistent
with its fiduciary duties to Asante's stockholders under applicable law, may
(subject to this and the following sentences) terminate this Agreement solely in
order to concurrently enter into any Asante Acquisition Agreement with respect
to any Asante Superior Proposal, but only at a time that is after the fifth
business day following Asante's receipt of written notice advising Techno that
the Board of Directors of Asante is prepared to accept an Asante Superior
Proposal, specifying the material terms and conditions of such Asante Superior
Proposal and identifying the person making such Asante Superior Proposal. For
purposes of this Agreement, a "Asante Superior Proposal" means any proposal made
by a third party to acquire, directly or indirectly, including pursuant to a
tender offer, exchange offer, merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction, for
consideration consisting of cash and/or securities, more than 50% of the
combined voting power of the shares of Asante Common Stock then outstanding or
all or substantially all the assets of Asante and otherwise on terms which the
Board of Directors of Asante determines in its good faith judgment (based on the
advice of a financial advisor of nationally recognized reputation) to be more
favorable to Asante stockholders than the Acquisition and for which financing,
to the extent required, is then committed or which, in the good faith judgment
of the Board of Directors of Asante based on the advice of its financial
advisor, is reasonably capable of being obtained by such third party.
(c) In addition to the obligations of Asante set
forth in paragraphs (a) and (b) of this Section 4.2, Asante shall immediately
advise Techno orally and in writing of any request for information or of any
Asante Takeover Proposal, the material terms and conditions of such request or
Asante Takeover Proposal and the identity of the person making such request or
Asante Takeover Proposal. Asante will keep Techno reasonably informed of the
status and details (including amendments or proposed amendments) of any such
request or Asante Takeover Proposal. Techno shall treat any information it
receives from Asante pursuant to this section as confidential information.
(d) Nothing contained in this Section 4.2 shall
prohibit Asante from taking and disclosing to its stockholders a position
contemplated by Rule 14e-2(a) promulgated under the Exchange Act or from making
any disclosure to Asante's stockholders if, in the good faith judgment of the
Board of Directors of Asante, after consultation with outside counsel, failure
so to disclose would be inconsistent with its obligations under applicable law;
provided, however, that neither Asante nor its Board of Directors nor any
committee thereof shall withdraw or modify, or propose publicly to withdraw or
modify, its position with respect to this Agreement, the Acquisition, the
issuance of Asante Common Stock in connection with the Acquisition, or approve
or recommend, or propose publicly to approve or recommend, an Asante Takeover
Proposal.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1. Access to Information; Confidentiality. Each of Techno and
Asante shall afford to the other party and to the officers, employees,
accountants, counsel, financial advisors and other representatives of such other
party, reasonable access during normal business hours during the period prior to
the Closing to all their respective properties, books, contracts, commitments,
personnel and records and, during such period, each of Techno and Asante shall
furnish promptly to the other party (a) a copy of each report, schedule,
registration statement and other document filed by it during such period
pursuant to the requirements of federal or state securities laws and (b) all
other information concerning its business, properties and personnel as such
other party may reasonably request. No review pursuant to this Section 5.1 shall
affect any representation or warranty given by the other party hereto. Each of
Techno and Asante will hold, and will cause its respective officers, employees,
accountants, counsel, financial advisors and other representatives and
affiliates to hold, any nonpublic information in accordance with the terms of
the Confidentiality Agreement.
SECTION 5.2 Best Efforts.
(a) Upon the terms and subject to the conditions set
forth in this Agreement, each of the parties agrees to use best efforts to take,
or cause to be taken, all actions, and to do, or cause to be done, and to assist
and cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Acquisition and the other transactions contemplated by this
Agreement, including (i) the obtaining of all necessary actions or nonactions,
waivers, consents and approvals from Governmental Entities and the making of all
necessary registrations and filings and the taking of all steps as may be
necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by, any Governmental Entity, (ii) the obtaining of all necessary
consents, approvals or waivers from third parties, (iii) the defending of any
lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions contemplated
by this Agreement, including seeking to have any stay or temporary restraining
order entered by any court or other Governmental Entity vacated or reversed, and
(iv) the execution and delivery of any additional instruments necessary to
consummate the transactions contemplated by, and to fully carry out the purposes
of, this Agreement. Nothing set forth in this Section 5.2(a) will limit or
affect actions permitted to be taken pursuant to Sections 4.1 and 4.2.
(b) In connection with and without limiting the
foregoing, Techno and Asante shall (i) take all action necessary to ensure that
no state statute or regulation is or becomes applicable to the Acquisition, this
Agreement, or any of the other transactions contemplated by this Agreement and
(ii) if any state statute or regulation becomes applicable to this Agreement, or
any other transaction contemplated by this Agreement, take all action necessary
to ensure that the Acquisition and the other transactions contemplated by this
Agreement may be consummated as promptly as practicable on the terms
contemplated by this Agreement and otherwise to minimize the effect of such
statute or regulation on the Acquisition and the other transactions contemplated
by this Agreement.
SECTION 5.3. Schedule 14f-1 Information Statement. If required, in the
opinion of counsel, promptly following the execution and delivery of this
Agreement, Asante shall prepare and file with the Commission an Information
Statement on Schedule 14f-1 with respect to the transactions contemplated by
this Agreement in accordance with all applicable rules and regulations of the
Securities Exchange Act. Not less than five (5) days prior to the filing with
the Commission, Asante shall permit Techno and its legal counsel to review the
filing and make suggested revisions thereto. Asante shall mail the Information
Statement on Schedule 14f-1 to each Asante shareholder in accordance with all
applicable rules and regulations of the Exchange Act.
SECTION 5.4. Fees and Expenses. Upon closing of the transaction, AAC
will assume all costs incurred by Asante in consummating this transaction, which
amount is not expected to exceed $100,000.
SECTION 5.5. Public Announcements. Asante and Techno will consult with
each other before issuing, and provide each other the opportunity to review,
comment upon and concur with and use reasonable efforts to agree on, any press
release or other public statements with respect to the transactions contemplated
by this Agreement, including the Acquisition, and shall not issue any such press
release or make any such public statement prior to such consultation, except as
either party may determine is required by applicable law, court process or by
obligations pursuant to any listing agreement with any national securities
exchange. The parties agree that the initial press release to be issued with
respect to the transactions contemplated by this Agreement shall be in the form
heretofore agreed to by the parties.
SECTION 5.6. Asante Liabilities. Except as set forth in Asante's
Disclosure Schedule, Asante shall terminate and/or reserve for or extinguish all
direct, indirect, short term, long term, xxxxxx, unchoate, contingent,
unmatured, matured, known and unknown liabilities (collectively, "Liabilities")
and all other obligations of Asante in form and substance satisfactory to
Techno.
SECTION 5.7. Tax Treatment. No representation or warranty is being made
by any party to any other regarding the treatment of this transaction for
federal or state income taxation. Each party has relied exclusively on its own
legal, accounting and other tax adviser regarding the treatment of the
transaction for federal and state income taxes and on no representation,
warranty, or assurance from any other party or such other party's legal,
accounting, or other adviser.
SECTION 5.8. Company Officers; Employment Contracts; Equity Awards. At
or prior to the Closing date AAC will enter into employment agreements with key
Asante officers in form and substance reasonably acceptable to Techno. Such
agreements will include an employment agreement with Xxxx Xxx substantially in
the form attached hereto as Exhibit 5.8. Xx. Xxx shall be nominated to be a
director of Techno at Techno's next meeting of shareholders.
SECTION 5.9. Post-Acquisition Operations. Following the Closing, Asante
shall continue to maintain its principal corporate office in California and all
bank accounts of Asante shall be amended so that two nominees of Techno (one of
whom shall be Xxxx Xxx) shall be the only signatories with authority to engage
in transactions for such accounts.
SECTION 5.10. Conveyance Taxes. Asante and Techno shall cooperate in
the preparation, execution and filing of all returns, questionnaires,
applications or other documents regarding any real property transfer or gains,
sales, use, transfer, value added, stock transfer and stamp taxes, any transfer,
recording, registration and other fees or any similar taxes which become payable
in connection with the transactions contemplated by this Agreement that are
required or permitted to be filed on or before the Closing. Asante shall pay,
and Techno shall pay, without deduction or withholding from any amount payable
to the holders of Techno Common Stock, any such taxes or fees imposed by any
Governmental Entity (and any penalties and interest with respect to such taxes
and fees), which become payable in connection with the transactions contemplated
by this Agreement, on behalf of their respective stockholders.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1. Conditions to Each Party's Obligation to Effect the
Acquisition. The respective obligation of each party to effect the Acquisition
is subject to the satisfaction or waiver on or prior to the Closing Date of the
following conditions:
(a) Stockholder Approvals. If required by applicable
law, the approval of the stockholders of Asante shall have been obtained.
(b) Governmental and Regulatory Approvals. Other than
the filing provided for under Section 1.3, all consents, approvals and actions
of, filings with and notices to any Governmental Entity required of Techno,
Asante or any of their subsidiaries to consummate the Acquisition and the other
transactions contemplated hereby, the failure of which to be obtained or taken
(i) is reasonably expected to have a material adverse effect on the Surviving
Corporation and its prospective subsidiaries, taken as a whole, or (ii) will
result in a violation of any laws, shall have been obtained, all in form and
substance reasonably satisfactory to Techno and Asante.
(c) No Injunctions or Restraints. No judgment, order,
decree, statute, law, ordinance, rule or regulation, entered, enacted,
promulgated, enforced or issued by any court or other Governmental Entity of
competent jurisdiction or other legal restraint or prohibition (collectively,
"Restraints") shall be in effect (i) preventing the consummation of the
Acquisition, or (ii) which otherwise is reasonably likely to have a material
adverse effect on Techno or Asante, as applicable; provided, however, that each
of the parties shall have used its best efforts to prevent the entry of any such
Restraints and to appeal as promptly as possible any such Restraints that may be
entered.
SECTION 6.2. Conditions to Obligations of Asante. The obligation of
Asante to effect the Acquisition is further subject to satisfaction or waiver of
the following conditions:
(a) Representations and Warranties. The
representations and warranties of Techno and AAC set forth herein shall be true
and correct both when made and at and as of the Closing Date, as if made at and
as of such time (except to the extent expressly made as of an earlier date, in
which case as of such date), except where the failure of such representations
and warranties to be so true and correct (without giving effect to any
limitation as to "materiality" or "material adverse effect" set forth therein)
does not have, and is not likely to have, individually or in the aggregate, a
material adverse effect on Techno.
(b) Performance of Obligations of Techno. Techno
shall have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date.
(c) No Material Adverse Change. At any time after the
date of this Agreement there shall not have occurred any material adverse change
relating to Techno.
SECTION 6.3. Conditions to Obligations of Assante. The obligation of
Assante to effect the Acquisition is further subject to satisfaction or waiver
of the following conditions:
(a) Representations and Warranties. The
representations and warranties of Asante set forth herein shall be true and
correct both when made and at and as of the Closing Date, as if made at and as
of such time (except to the extent expressly made as of an earlier date, in
which case as of such date), except where the failure of such representations
and warranties to be so true and correct (without giving effect to any
limitation as to "materiality," or "material adverse effect" set forth therein)
does not have, and is not likely to have, individually or in the aggregate, a
material adverse effect on Asante.
(b) Performance of Obligations of Asante. Asante
shall have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date.
(c) No Material Adverse Change. At any time after the
date of this Agreement there shall not have occurred any material adverse change
relating to Asante.
(d) Legal Opinion. Techno shall receive a legal
opinion from Asante's counsel in form and substance satisfactory to Techno.
(e) SEC Reports. All SEC Filings shall have been
submitted to the SEC in accordance with the requirements of the Exchange Act
(and the rules, regulations and guidance promulgated thereunder), in form and
substance satisfactory to Asante, and all applicable waiting periods shall have
been expired or waived by Asante.
(f) Closing Conditions. Documentation or other
information shall have been received in a form reasonably satisfactory to Techno
and Asante which evidences that the conditions set forth in this Section 6.3
have been satisfied.
SECTION 6.4. Frustration of Closing Conditions. Neither Asante nor
Techno may rely on the failure of any condition set forth in Section 6.1, 6.2 or
6.3, as the case may be, to be satisfied if such failure was caused by such
party's failure to use best efforts to consummate the Acquisition and the other
transactions contemplated by this Agreement, as required by and subject to
Section 5.5.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1. Termination. This Agreement may be terminated at any time
prior to the Effective Time, and (except in the case of 7.1(d) or 7.1(f))
whether before or after the Asante Stockholder Approval.
(a) by mutual written consent of Asante, AAC and
Techno;
(b) by Techno:
(i) if the Acquisition shall not have been
consummated by , 2005, provided, however, that the right to terminate this
Agreement pursuant to this Section 7.1(b)(i) shall not be available to any party
whose failure to perform any of its obligations under this Agreement results in
the failure of the Acquisition to be consummated by such time; provided,
however, that this Agreement may be extended not more than 30 days by either
party by written notice to the other party if the Acquisition shall not have
been consummated as a direct result of Asante or Techno having failed to receive
all regulatory approvals required to be obtained with respect to the
Acquisition.
(ii) if any Restraint having any of the effects
set forth in Section 6.1(c) shall be in effect and shall have become final and
nonappealable; provided, that the party seeking to terminate this Agreement
pursuant to this Section 7.1(b)(iv) shall have used best efforts to prevent the
entry of and to remove such Restraint;
(c) by Techno, if Asante shall have breached or
failed to perform in any material respect any of its representations,
warranties, covenants or other agreements contained in this Agreement, which
breach or failure to perform (A) would give rise to the failure of a condition
set forth in Section 6.2(a) or (b), and (B) is incapable of being cured by
Techno or is not cured within 60 days of written notice thereof;
(d) by Techno in accordance with Section 4.2;
provided that, in order for the termination of this Agreement pursuant to this
paragraph (d) to be deemed effective, Techno shall have complied with all
provisions contained in Section 4.2, including the notice provisions therein,
and with applicable requirements; or
(e) by Asante, if Techno shall have breached or
failed to perform in any material respect any of its representations,
warranties, covenants or other agreements contained in this Agreement, which
breach or failure to perform (A) would give rise to the failure of a condition
set forth in Section 6.3(a) or (b), and (B) is incapable of being cured by
Asante or is not cured within 60 days of written notice thereof.
SECTION 7.2. Effect of Termination. In the event of termination of this
Agreement by either Techno or Asante as provided in Section 7.1, this Agreement
shall forthwith become void and have no effect, without any liability or
obligation on the part of Asante, AAC or Techno, other than the provisions of
this Section 7.2 and Article VIII, which provisions survive such termination,
and except to the extent that such termination results from the willful and
material breach by a party of any of its representations, warranties, covenants
or agreements set forth in this Agreement.
SECTION 7.3. Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties.
SECTION 7.4. Extension; Waiver. At any time prior to the Closing, a
party may (a) extend the time for the performance of any of the obligations or
other acts of the other parties, or (b) waive any inaccuracies in the
representations and warranties of the other parties contained in this Agreement
or in any document delivered pursuant to this Agreement. Any agreement on the
part of a party to any such extension or waiver shall be valid only if set forth
in an instrument in writing signed on behalf of such party. The failure of any
party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of such rights.
SECTION 7.5. Procedure for Termination, Amendment, Extension or Waiver.
A termination of this Agreement pursuant to Section 7.1, an amendment of this
Agreement pursuant to Section 7.3 or an extension or waiver pursuant to Section
7.4 shall, in order to be effective, require, in the case of Asante or Techno,
action by its Board of Directors or, with respect to any amendment to this
Agreement, the duly authorized committee of its Board of Directors to the extent
permitted by law.
ARTICLE VIII
SURVIVAL
SECTION 8.1. Survival of Representations and Warranties. The
representations and warranties of Asante and Techno shall survive the execution
and delivery hereof and the Closing hereunder.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1. Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally, telecopied (which is confirmed) or sent by
overnight courier (providing proof of delivery) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to TechnoConcepts, Inc. or Asante Acquisition
Corp. to
Xxxxxxx X. Xxxxxxx, President
00000 Xxxxxxx Xxxx
Xxx Xxxx, XX 00000
with a copy to:
Xxxxx X. Xxxxx, Esq.
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
(b) if to Asante, to
Xxxx Xxx, President
0000 Xxx Xxxxxxx Xxxx
Xxx Xxxx, XX _____
with a copy to:
SECTION 9.2. Definitions. For purposes of this Agreement:
(a) except for purposes of Section 5.10, an
"affiliate" of any person means another person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such first person, where "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management policies of a person, whether through the ownership of voting
securities, by contract, as trustee or executor, or otherwise;
(b) "material adverse change" or "material adverse
effect" means, when used in connection with Techno or Asante, any change,
effect, event, occurrence or state of facts that is, or would reasonably be
expected to be, materially adverse to the business, financial condition or
results of operations of such party; and the terms "material" and "materially"
have correlative meanings;
(c) "person" means an individual, corporation,
partnership, limited liability company, joint venture, association, trust,
unincorporated organization or other entity;
(d) a "subsidiary" of any person means another
person, an amount of the voting securities, other voting ownership or voting
partnership interests of which is sufficient to elect at least a majority of its
Board of Directors or other governing body (or, if there are no such voting
interests, 50% or more of the equity interests of which) is owned directly or
indirectly by such first person; provided however, that with respect to Asante,
such term shall not include Techno; and
(e) "knowledge" of any person which is not an
individual means the knowledge of such person's executive officers or senior
management of such person's operating divisions and segments, in each case after
reasonable inquiry.
SECTION 9.3. Interpretation. When a reference is made in this Agreement
to an Article, Section or Exhibit, such reference shall be to an Article or
Section of, or an Exhibit to, this Agreement unless otherwise indicated. The
table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation". The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. All terms defined in this
Agreement shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined therein. The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument that is referred
to herein means such agreement, instrument or statute as from time to time
amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession of
comparable successor statutes and references to all attachments thereto and
instruments incorporated therein. References to a person are also to its
permitted successors and assigns.
SECTION 9.4. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
SECTION 9.5. Entire Agreement; No Third-Party Beneficiaries. This
Agreement (including the exhibits, documents and instruments referred to herein)
(a) constitute the entire agreement, and supersede all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter of this Agreement and (b) except for the provisions of Section
5.8, are not intended to confer upon any person other than the parties any
rights or remedies.
SECTION 9.6. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California regardless of
the laws that might otherwise govern under applicable principles of conflict of
laws thereof.
SECTION 9.7. Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by either of the parties hereto without
the prior written consent of the other party. Any assignment in violation of the
preceding sentence shall be void. Subject to the preceding two sentences, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns.
SECTION 9.8. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.9 . Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible to the fullest
extent permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
IN WITNESS WHEREOF, Asante, Techno and AAC have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
TECHNOCONCEPTS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
(SIGNATURES CONTINUED ON FOLLOWING PAGE)
ASANTE TECHNOLOGIES, INC.
By: /s/ Xxxx Xxx
------------------------------------------
Name: Xxxx Xxx
Title: President
ASANTE ACQUISITION CORP.
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: President
