EXHIBIT 2.1
SECURITIES PURCHASE AGREEMENT
by and among
EVTC, INC.,
a Delaware corporation
and
INNOVATIVE WASTE TECHNOLOGIES LLC,
a Nevada limited liability company
and each of
▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇, as Members
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT dated as of March 26, 2002 (this
"Agreement"), by and among EVTC, INC., a Delaware corporation ("EVTC");
INNOVATIVE WASTE TECHNOLOGIES LLC, a Nevada limited liability company ("IWT");
and each of ▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇, individual members and holders of
the issued and outstanding membership interests of IWT (individually, a "Seller"
and collectively, the "Sellers").
WHEREAS, IWT is engaged in the business of treating contaminated
wastewater through proprietary and patented technologies for wastewater, water
treatment and soil remediation (the "Business");
WHEREAS, EVTC desires to acquire from the Sellers, and the Sellers
wish to sell, all of the issued and outstanding membership interests of IWT at
the time of the Closing (the "IWT Membership Interests"); and from the Sellers,
and
WHEREAS, the board of directors of EVTC has determined that it is in
the best interests of EVTC to acquire the Business by way of the purchase the
IWT Membership Interests upon the terms and provisions and subject to the
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and legal adequacy of which is acknowledged, the parties agree as
follows:
ARTICLE I
DEFINITIONS
To the extent not otherwise defined within this Agreement (including,
without limitation, the recitals, exhibits and schedules attached hereto), the
terms used in this Agreement shall have the meaning ascribed in Schedule 1
attached hereto.
ARTICLE II
PURCHASE AND SALE OF THE MEMBERSHIP INTERESTS.
2.1 Purchase of the IWT Membership Interests. Upon the terms and
provisions and subject to the conditions hereof, and based upon the
representations, warranties, covenants and agreements of the Sellers and IWT
contained in this Agreement, in the Seller Documents and in the IWT Documents,
and the exhibits and schedules attached hereto and thereto, at the Closing, the
Sellers shall sell, transfer, convey and deliver to EVTC, and EVTC shall
purchase and acquire from the Sellers, free and clear of all Liens, all of the
issued and outstanding membership interests of IWT at the Closing (the "IWT
Membership Interests"). In consideration for the sale, transfer, conveyance and
delivery to EVTC of the IWT Membership
1
Interests (free and clear of any and all Liens) being purchased by EVTC
hereunder, at the Closing EVTC shall pay to the Sellers an aggregate purchase
price (the ""EVTC Consideration") consisting of 10,000,000 shares of the common
stock (the "Common Stock"), par value $.01 per share, of EVTC (the "Shares")
deliverable at the Closing and, subject to and conditioned upon the adoption by
EVTC's stockholders of the Stock Amendment and 2002 Plan pursuant to Section
6.9(a) hereof, options to purchase up to 15,000,000 shares of Common Stock (the
"Options"), deliverable immediately after the expiration of the statutory
waiting period following the filing of the Information Statement pursuant to
Section 6.9(b) hereof, which EVTC Consideration shall be paid to each of the
Sellers in the same proportion that the number of IWT Membership Interests owned
by each Seller represents to the total number of IWT Membership Interests issued
and outstanding, as more fully set forth on Exhibit A hereto.
2.2 Exemption from Registration under the Securities Laws. EVTC is
executing and delivering this Agreement in accordance with and in reliance upon
the exemption from securities registration afforded by Section 4(2) and
Regulation D ("Regulation D") as promulgated by the Securities Commission under
the Securities Act of 1933, as amended (the "Securities Act").
ARTICLE III
CLOSING
3.1 The Closing. The closing of the purchase and sale of the IWT
Membership Interests hereunder and the other transactions contemplated hereby
(the "Closing") shall take place on April ___, 2002 or on such later date and
time as may be agreed to in writing by EVTC and the Sellers (the "Closing
Date"), on which Closing Date the parties hereto shall exchange original
execution copies of this Agreement, the Seller Documents (as defined in Section
4.3(a) hereof), the IWT Documents (as defined in Section 4.3(b) hereof) and the
EVTC Documents (as defined in Section 5.2 hereof). All transactions contemplated
hereunder to occur on the Closing Date shall be deemed to have occurred
simultaneously on the Closing Date.
3.2 Obligations of the Sellers. At the Closing and subject to the
terms, provisions and conditions contained herein, each of the Sellers shall
take all actions and do all things necessary to sell, transfer, convey and
deliver the IWT Membership Interests to EVTC, free and clear of any and all
Liens, and to consummate the transactions contemplated hereby, including,
without limitation, delivery or causing to be delivered by IWT to EVTC the
following:
(a) instrument(s) evidencing the aggregate number of IWT
Membership Interests owned by each of the Sellers, which IWT Membership
Interests, in the aggregate, shall constitute all of the membership interests of
IWT issued and outstanding at the Closing, accompanied by duly endorsed transfer
powers and with all requisite transfer tax stamps attached to effect the
transfer thereof to EVTC;
(b) such general or specific instruments of sale, assignment,
transfer and conveyance, with full covenants of warranty as to the good and
indefeasible title of IWT in and to the assets and properties of IWT in the
operation of its Business as currently conducted (the "Assets"), as may be
necessary or appropriate, in the judgment of EVTC, to operate the
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Business following the Closing and to consummate the transactions contemplated
by this Agreement and such other documents, instruments and agreements
deliverable pursuant to this Agreement;
(c) an opinion of the Law Offices of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.,
legal counsel to IWT, in a form mutually acceptable to legal counsel for EVTC
and the Sellers;
(d) a certificate dated as of the Closing Date, executed by the
Secretary of IWT certifying that attached thereto are true, correct and complete
copies of the Certificate of Formation and the Operating Agreement of IWT as
well as a true, correct and complete copy of the resolutions adopted by the
manager(s) of IWT authorizing the execution, delivery and performance of this
Agreement and IWT Documents and the consummation of the transactions
contemplated hereby and thereby and as to the incumbency of the officers of IWT
executing this Agreement and IWT Documents;
(e) copies of all consents listed on Schedule 4.6 attached hereto
and all Authorizations necessary or required to be obtained in order to
consummate the transactions contemplated hereby;
(f) all of IWT's books, records and other data and materials
necessary for the conduct of the Business; and
(g) such other certificates, documents, receipts and instruments
as EVTC or its legal counsel may reasonably request.
3.3 Obligations of EVTC. At the Closing and subject to the terms,
provisions and conditions contained herein, EVTC shall deliver to the Sellers in
proportion to their proportionate IWT Membership Interests as set forth on
Exhibit A attached hereto, the following:
(a) stock certificates evidencing the proportionate amount of
Shares, containing a restrictive legend in form and substance reasonably
satisfactory to EVTC's legal counsel to the effect that the transfer thereof is
restricted;
(b) stock option agreements, substantially in the form of Exhibit
B attached hereto, evidencing the proportionate amount of Options to be granted
as part of the EVTC Consideration subject to and conditioned upon adoption by
the stockholders of EVTC of the Stock Amendment and 2002 Plan;
(c) a certificate dated as of the Closing Date, executed by an
executive officer of EVTC certifying that attached thereto is a true, correct
and complete copy of the Certificate of Incorporation and bylaws of EVTC as well
as a true, correct and complete copy of the resolutions adopted by the board of
directors of EVTC, authorizing the execution, delivery and performance of this
Agreement and the EVTC Documents and the consummation of the transactions
contemplated hereby and thereby and the incumbency of the officers of EVTC
executing this Agreement;
(d) an opinion of Jenkens & ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP, legal
counsel to EVTC, in a form mutually acceptable to legal counsel for EVTC and the
Sellers; and
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(e) such other certificates, documents and instruments as the
Sellers or their legal counsel may reasonably request.
3.4 Passage of Title, etc. At the Closing, beneficial ownership and
title to the IWT Membership Interests shall pass to EVTC and EVTC shall be
entitled to all of the benefits of IWT Membership Interests as to the Business
and the goodwill associated therewith.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND IWT
Each of the Sellers and IWT hereby represents and warrants to EVTC, as
follows:
4.1 Organization; Good Standing. IWT is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Nevada and has the power and authority to own and lease its assets and
properties and to conduct the Business as it is now being conducted.
4.2 Capitalization.
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The IWT Membership Interests constitute the only membership
interests of IWT that are issued and outstanding, and all of which are owned of
record and beneficially by the Sellers in the amounts set forth on Exhibit A.
All of the IWT Membership Interests are duly authorized, validly issued, fully
paid and non-assessable. Except as set forth on Schedule 4.2, there are no (i)
options, warrants, calls, preemptive rights, subscriptions or other rights,
convertible securities, or securities convertible into or exchangeable for
membership interests of IWT or the Sellers, agreements or commitments of any
character obligating IWT or any of the Sellers to issue, transfer or sell any
other equity interests of any kind whatsoever in IWT or securities convertible
into or exchangeable for such equity interests, (ii) contractual obligations of
IWT or any of the Sellers to repurchase, redeem or otherwise acquire any
membership interest in IWT or (iii) voting trusts, proxies or similar agreements
to which IWT or any of the Sellers is a party with respect to the membership
interests of IWT.
4.3 Authority; Enforceability.
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(a) Each of the Sellers has the power and authority to execute,
deliver and perform this Agreement and all other agreements, certificates and
documents executed or delivered, or to be executed or delivered, by such Sellers
in connection herewith (collectively, the "Seller Documents"), and to consummate
the transactions contemplated hereby and thereby. This Agreement and each of the
Seller Documents have been duly executed and delivered by the Sellers and this
Agreement and each of the Seller Documents constitute (or, in the case of
certain Seller Documents, when executed and delivered will constitute) the
legal, valid and binding obligations of the Sellers, enforceable against the
Sellers in accordance with their respective terms.
(b) IWT has the power and authority to execute, deliver and
perform this Agreement and all other agreements, certificates and documents
executed or delivered, or to be executed or delivered, by IWT in connection
herewith (collectively, the "IWT Documents"),
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and to consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance of this Agreement and the IWT Documents by
IWT has been duly authorized by all necessary action on the part of IWT. This
Agreement and each of the IWT Documents have been duly executed and delivered by
IWT and this Agreement and each of the IWT Documents constitute (or, in the case
of certain IWT Documents, when executed and delivered will constitute) the
legal, valid and binding obligations of IWT, enforceable against IWT in
accordance with their respective terms.
4.4 No Conflict.
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(a) The execution, delivery and performance of this Agreement and
the Seller Documents by the Sellers and the consummation of the transactions
contemplated hereby and thereby do not and will not (a) violate or conflict with
any provision of IWT's Certificate of Formation or Operating Agreement; (b)
violate, conflict with, result in a breach of or constitute (with or without
notice or lapse of time or both) a default under, give rise to a right of
termination, amendment or cancellation of, accelerate the performance required
by, or result in any payment under, any Contract, instrument or other writing of
any nature whatsoever to or by which IWT is a party or is bound, or by which the
Business is subject; (c) violate, conflict with or result in a breach of any
Legal Requirement applicable to IWT; (d) result in the creation of any Lien on
the Business; or (e) render void or create a right of amendment, termination or
rescission under any Contract or other arrangement with a customer of or vendor
to the Business.
(b) The execution, delivery and performance of this Agreement and
IWT Documents by IWT and the consummation of the transactions contemplated
hereby and thereby do not and will not (a) violate or conflict with any
provision of IWT's Certificate of Formation or Operating Agreement; (b) violate,
conflict with, result in a breach of or constitute (with or without notice or
lapse of time or both) a default under, give rise to a right of termination,
amendment or cancellation of, accelerate the performance required by, or result
in any payment under, any Contract, instrument or other writing of any nature
whatsoever to or by which IWT is a party or is bound or by which the Business is
subject; (c) violate, conflict with or result in a breach of any Legal
Requirement applicable to IWT; (d) result in the creation of any Lien on the
Business; or (e) render void or create a right of amendment, termination or
rescission under any Contract or other arrangement with a customer of or vendor
to the Business.
4.5 Litigation; Compliance with Law.
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(a) Schedule 4.5(a) attached hereto contains a true, complete and
correct list of all action, suits, proceedings (including, without limitation,
all arbitrations and alternative dispute resolution proceedings), or
governmental investigations pending or, to the best knowledge of the Sellers,
threatened against IWT or any of its properties or assets or any of IWT's
officers, directors or employees which in any way arises out of or relates to
the Business, in each case, at any time during the last three (3) years. There
is no claim, action, suit, proceeding (including, without limitation, all
arbitrations and alternative dispute resolution proceedings) or governmental
investigation before any court, arbitrator or Governmental Entity or Regulatory
Authority pending or, to the best knowledge of the Sellers, threatened against
IWT or which relates to or arises out of the Business or the transactions
contemplated by this Agreement, nor do the Sellers have knowledge of any
reasonably likely basis or set of circumstances for any such
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action, suit, proceeding, claim or investigation: (i) the result of which could
materially and adversely affect the transactions contemplated hereby; (ii)
questions the validity of this Agreement or the transactions contemplated
hereby; (iii) could impair the ability of IWT or the Sellers to consummate the
transactions contemplated hereby or by the Seller Documents and IWT Documents;
or (iv) could have a Material Adverse Effect; or (v) seeks to delay, prohibit,
or restrict in any manner any action contemplated hereby.
(b) None of IWT or any of IWT's officers, directors or employees,
in each case with respect to the Business, is subject or a party to, or bound by
or otherwise affected by, any judgment, order, decree, restraint or other
directive of or stipulation with any court or other Governmental or Regulatory
Authority or tribunal, or in violation of any other Legal Requirement, and the
Sellers have no knowledge of any reasonable basis for a claim that such a
violation exists. The Sellers are is not aware of any proposed Legal Requirement
that would have a Material Adverse Effect.
4.6 Consents. Except as set forth in Schedule 4.6 attached hereto, no
filing or registration with, notice to or authorization, consent or approval or
other action (including, without limitation, the grant of any waiver) of any
Governmental Entity or Regulatory Authority or any other Person is required to
be obtained by IWT in connection with: (i) the sale to EVTC of the IWT
Membership Interests; (ii) the execution, delivery and performance of this
Agreement, the Seller Documents the IWT Documents and the consummation of the
transactions contemplated hereby and thereby; and (iii) following the Closing,
EVTC's operation of the Business following the Closing.
4.7 Title to Assets. IWT has good, valid and indefeasible title to or,
in the case of leases and licenses, valid and subsisting leasehold interests or
licenses in, all assets, properties and rights necessary for the conduct of the
Business as presently conducted (the "Assets"), in each case free and clear of
any and all Liens. The Assets that are owned, together with those used or
occupied under lease or used under license, are free from material defects, are
in good operating condition and a good state of maintenance and repair, subject
only to normal wear and tear in the ordinary course of business, and are
suitable for the continued conduct of the Business in a manner consistent with
past practices.
4.8 Intellectual Property Matters. Set forth on Schedule 4.8 attached
hereto is a list of the Intellectual Property Rights, specifying as to each, as
applicable: (a) the nature of the Intellectual Property Right; (b) all licenses,
sublicenses and other agreements (true, correct and complete copies of any such
licenses, sublicenses or other agreements are attached to Schedule 4.8) relating
in any manner to any Intellectual Property Right; and (c) the filing and
registration information with respect to each Intellectual Property Right that
is registered with the United States Patent and Trademark Office, the United
States Copyright Office, any state or foreign jurisdiction or other Governmental
Authority or Regulatory Authority. There are no Intangibles that are owned by
IWT or any of its respective Affiliates which are used in or in connection with
the Business that are not set forth on Schedule 4.8 attached hereto. Except as
set forth on Schedule 4.8 attached hereto, there are no royalties, fees or other
amounts payable by or to IWT with respect to any of the Intellectual Property
Rights. IWT's prior use of the Intellectual Property Rights has not, and IWT's
present use of the Intellectual Property Rights does not, infringe or otherwise
violate any rights (including, without limitation, rights of privacy) of any
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Person, and IWT has not received a notice of a claim of infringement or knows of
any reasonable basis for a claim that such an infringement or violation exists.
IWT has ownership of (free and clear of any and all Liens) or rights by license,
lease or other agreement to use (free and clear of any and all Liens and without
the payment of any fees or the incurrence of any royalties or other amounts) the
Intellectual Property Rights that are necessary to conduct the Business. Neither
any of the Sellers nor any present or former employee of IWT owns or has a
propriety or financial interest, directly or indirectly, in any of the
Intellectual Property Rights. Neither any of the Sellers nor IWT is a party in
any pending action, suit or proceeding that involves a claim of infringement or
any other claim related to any Intellectual Property Right or, to the best of
the knowledge of Sellers, there is no threatened action, suit or proceeding that
involves a claim of infringement or any other claim relating to any Intellectual
Property Right. None of the Intellectual Property Rights is subject to any
outstanding Legal Requirement or is subject to any outstanding order, judgment,
decree, stipulation or agreement restricting its use by IWT or restricting the
licensing thereof to any Person by IWT or which could adversely affect the
assumption of the Intellectual Property Rights by EVTC. Upon the execution and
recording, where applicable, of such instruments of assignment or conveyance as
may be requested by EVTC, all Intellectual Property Rights will be fully vested
in EVTC, free and clear of any and all Liens.
4.9 Contracts.
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(a) Attached hereto as Schedule 4.9(a) is a complete list of all
Contracts (whether written or oral) to which the Business is subject, together
with true, correct and complete copies of all such Contracts, as well as
summaries of oral Contracts, if any.
(b) Except as set forth on Schedule 4.9(b) attached hereto, each
Contract (assuming due authorization and execution by the counterparty to the
Contract): (i) is in full force and effect; (ii) has been entered into on an
arm's length basis in the ordinary course of business and consistent with past
practices; (iii) is a valid and binding obligation of IWT enforceable in
accordance with its terms; (iv) does not give rise to a Lien on any of the
Assets; and (v) is fully assumable by EVTC upon consummation of this Agreement,
without the consent, approval, order or any waiver by, or any other action of or
with any Person, without the payment of any penalty, the incurrence of any
additional debt, liability or obligation of any nature whatsoever or the change
of any term. Except as set forth on Schedule 4.9(b) attached hereto, there is no
default under or breach by IWT or any Seller (which, with or without the giving
of notice or lapse of time or both) would constitute a default under any
Contract and, to the knowledge of Seller or IWT there is no default under or
breach by any counterparty to a Contract (which with or without the giving of
notice or lapse of time or both) would constitute a default under any Contract.
4.10 Customers and Suppliers. IWT is not engaged in any dispute with
any customer, supplier or manufacturer with respect to the Business, nor do the
Sellers have knowledge of any matter or fact which could reasonably be expected
to result in a dispute with any customer, supplier or manufacturer with respect
to the Business. To the knowledge of the Sellers, no customer, supplier or
manufacturer is considering termination, non-renewal or any modification of its
arrangements with IWT prior to the Closing or EVTC following the Closing.
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4.11 Authorizations. Attached hereto as Schedule 4.11 is a complete
list of all Authorizations to which the Business is subject, together with true,
correct and complete copies of all Authorizations. IWT owns, holds, possesses or
lawfully uses all Authorizations which are in any manner necessary for the
operation of the Business, free and clear of any and all Liens or other
restrictions. IWT is not in default, nor has IWT or any Seller received any
notice of any claim of default with respect to any Authorization and, to the
knowledge of Seller, no event has occurred, which with the giving of notice or
passage of time or both, would cause or give rise to any default with respect to
any Authorization. Except as set forth on Schedule 4.11 attached hereto, all
such Authorizations are renewable by their terms or in the ordinary course of
business without the need to comply with any special qualification procedures or
to pay any amounts other than routine filing fees, and will not be adversely
affected or terminated by consummation of the transactions contemplated hereby.
None of the Authorizations have been amended, assigned, pledged or otherwise
transferred.
4.12 Environmental Matters. Except as set forth on Schedule 4.12
attached hereto: (a) IWT is in compliance with all Environmental Laws and
Environmental Permits; (b) IWT has not received any written notice with respect
to IWT or any Site related to the Business from any Governmental Entity or
Regulatory Authority or other Person alleging that IWT is not in material
compliance with any Environmental Law or Environmental Permit, and none of them
has received any written notice or request for information with respect to, and
has not been designated a responsible or potentially responsible party for,
remedial action, response costs or investigation; (c) there has been no Release
of a Hazardous Substance at, from, in, to, on or under any Site and no Hazardous
Substance is present in, on, about or migrating to or from any Site that could
reasonably be expected to give rise to any Environmental Claim against IWT; (d)
there are no pending or outstanding corrective actions requested, required or
being conducted by any Governmental Entity or Regulatory Authority with respect
to IWT for the investigation, remediation or cleanup of any Site, and there have
been no such corrective actions; (e) IWT has obtained and holds all
Environmental Permits necessary for the conduct of its operations as presently
conducted and the operation of the Business as presently conducted; (f) there
are no past, pending or, to the knowledge of the Sellers, threatened
Environmental Claims against IWT, and no Seller has any knowledge of any facts
or circumstances which could reasonably be expected to form the basis of any
Environmental Claim against IWT; (g) to the best of the knowledge of the
Sellers, the transactions contemplated by this Agreement do not and will not
impose any obligations under any Environmental Law or Environmental Permit for
any investigation or cleanup or notification to or consent of any Governmental
Entity or Regulatory Authority or any other Person; and (h) there are no Liens
with respect to the Business arising under or pursuant to any Environmental Law
and, to the knowledge of the Sellers, there are no facts, circumstances or
conditions that could reasonably be expected to restrict, encumber or result in
the imposition of special conditions under any Environmental Law with respect to
the Business.
4.13 Taxes. Except as set forth on Schedule 4.13, IWT has (i) filed
with each Tax Authority each Tax Return required to have been filed by or on
behalf of IWT, or extensions have been duly obtained, and (ii) paid, or
adequately reserved for on the Financial Reports, all Taxes required to have
been paid by it, except where the failure to file such Tax Returns or pay such
Taxes would not, in the aggregate, have a Material Adverse Effect on IWT.
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4.14 Labor Issues. No employees of IWT are covered by a collective
bargaining agreement. There are currently pending, and during the past five (5)
years there has been (a) no strike, lockout, picketing, slow-downs or work
stoppages with respect to IWT and, to the knowledge of the Sellers, no such
strikes, picketing, lockouts, slow-downs or work stoppages are threatened and
(b) to the knowledge of the Sellers, no or threatened grievance, arbitration
proceeding, charge or complaint filed on behalf of an employee or labor
organization, before the National Labor Relations Board, OSHA, the Equal
Employment Opportunity Commission, state and local civil rights agencies,
federal or state departments of labor, the various occupational health and
safety agencies or any judicial or arbitration forum with respect to IWT. IWT is
and has been in compliance, in all material respects, with all applicable laws,
regulations, policies, procedures and contractual obligations relating to
employment practices, wages, hours, discrimination, safety and health of
employees, workers compensation, unemployment insurance, withholding of wages,
and terms and conditions of employment. IWT has heretofore delivered to EVTC
true, correct and complete copies of all employment agreements, collective
bargaining agreements, personnel manuals, handbooks, and policy and procedure
manuals applicable to the employees of IWT. IWT is not liable for any severance
pay or other payments to any employee or former employee due to the termination
of employment and will not have any liability under any benefit or severance
plan, policy, practice, program or agreement which exists or may be deemed to
exist under any applicable law, as a result of the transactions contemplated
hereunder. IWT has furnished to EVTC true, correct and complete copies of each
pension, profit-sharing, bonus, incentive, deferred compensation, severance pay,
retirement or other material employee benefit plan, agreement or arrangement
within the meaning of Section 3(3) of ERISA and any other material pay
practices, currently maintained or contributed to by IWT for the benefit of any
of its employees (collectively, the "Benefit Plans"), all of which are set forth
on Schedule 4.14 attached hereto. IWT has no actual or potential withdrawal
liability with respect to any multiemployer plan (within the meaning of Section
3(37) of ERISA).
4.15 Books and Records. The books and records of IWT to be transferred
to EVTC pursuant to Section 3.2(f) hereof are complete and correct in all
material respects and properly and accurately reflect all transactions engaged
in by IWT with respect to the Business.
4.16 Improper Payments. Neither the Sellers, IWT nor any of its
officers and agents, Affiliates or any Person associated with or acting on
behalf of IWT, has made any illegal or improper payment to, or provided any
illegal or improper benefit or inducement for, any governmental official, union
official, supplier, customer, union or other Person, in an attempt to influence
any such Person to take or to refrain from taking any action relating to the
Business or to engage in any action by or on behalf of IWT or any of its
respective Affiliates in any way or paid any bribe, payoff, influence payment,
kickback or other unlawful payment.
4.17 No Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by the Sellers directly
with EVTC and without the intervention of any other Person acting on behalf of
the Sellers and in such manner as not to give rise to any claim against EVTC or
any of its Affiliates for any finder's fee, brokerage commission or like
payment, and if any such fee, commission or payment is payable, it shall be the
sole responsibility of the Sellers.
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4.18 Powers of Attorney. None of the Sellers has granted any powers of
attorney to any third party which in any way relates to the IWT Membership
Interests.
4.19 Investment Representations.
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(a) Each of the Sellers has had an opportunity to review copies
of the SEC Reports (as defined in Section 5.7 hereof) and understands that (i)
no representations or warranties have been made to such Seller by the Company
and its Affiliates except as specifically set forth herein and (ii) no federal,
state, local or foreign governmental body or regulatory authority has made any
finding or determination relating to the fairness of an investment in the
securities constituting the EVTC Consideration and that no federal, state, local
or foreign governmental body or regulatory authority has recommended or
endorsed, or will recommend or endorse, any investment in such securities. Each
of the Sellers, in making the decision to acquire the Shares, the Options and
the shares of Common Stock issuable upon exercise of the Options (the "Option
Shares" and, together with the Shares and the Options, collectively, the "EVTC
Securities"), has relied solely upon its independent investigation and due
diligence regarding the business of EVTC and an investment in the EVTC
Securities. None of the Sellers is relying upon any representations or
warranties made by or on behalf of EVTC (except as set forth in this Agreement).
Each of the Sellers acknowledges that such Seller has had an opportunity to
consult with such Seller's own attorney regarding legal matters concerning EVTC
and an investment in the EVTC Securities and to consult with such Seller's tax
advisor regarding the tax consequences of acquiring the Securities.
(b) Each of the Sellers understands that the EVTC Securities are
being offered and sold to such Seller in reliance on the exemption from
registration under the Securities Act of 1933, as amended (the "Securities Act")
by virtue of Section 4(2) and Regulation D promulgated under the Securities Act
and that EVTC is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of the Sellers set
forth herein for purposes of qualifying for exemptions from registration under
the Securities Act and applicable state securities laws.
(c) Each of the Sellers understands that (i) the EVTC Securities
have not been registered under the Securities Act; (ii) EVTC is under no
obligation to register the EVTC Securities under the Securities Act or any
applicable state security laws or to take any action to make any exemption form
such registration provisions available; (iii) the EVTC Securities may not be
sold, transferred, assigned, pledged or subjected to any lien or security
interest unless they are first registered under the Securities Act and
applicable state securities laws or an exemption from the registration
provisions of the Securities Act and applicable state securities laws are
available with respect to the proposed sale or transfer; (iv) the certificates
evidencing the EVTC Securities shall contain a restrictive legend, in form and
substance reasonably satisfactory to EVTC's legal counsel, to the effect that
the transfer thereof is restricted; and (v) stop transfer instructions will be
placed with the transfer agent for the EVTC Securities.
(d) Each of the Sellers acknowledges that such Seller is familiar
with Rule 144 of the rules and regulations of the SEC promulgated pursuant to
the Securities Act ("Rule 144"), and that such Seller has been advised that Rule
144 permits resales only under
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certain circumstances. Each of the Sellers understands that to the extent that
Rule 144 is not available, such Seller will be unable to sell any EVTC
Securities without either registration under the Securities Act or the existence
of another exemption from such registration requirement.
(e) Each of the Sellers is aware of what constitutes, and fully
understands the definition of, an "Accredited Investor," as that term is defined
in Regulation D promulgated under the Securities Act and under the laws of each
state of which such Seller is a resident, and is an "Accredited Investor" for
purpose of said Regulation D and the laws of the state of which such Seller is a
resident.
(f) Each of the Sellers acknowledges that such Seller's
investment in the EVTC Securities is speculative and involves the risk of loss,
including the loss of the entire value of the investment and, because there are
substantial restrictions on the transferability of the Securities, the potential
inability to liquidate the EVTC Securities readily in case of an emergency. Each
of the Sellers is able to bear the economic risks, hold the EVTC Securities for
an indefinite period of time and has sufficient net worth to sustain a loss of
such Seller's entire investment in EVTC in the event such a loss should occur.
(g) Each of the Sellers (1) is and will be acquiring the EVTC
Securities for such Seller's own account, and not with a view to any resale or
distribution of the Securities, in whole or in part, in violation of the
Securities Act or any applicable securities laws and (2) has not offered or sold
any of the EVTC Securities and has no present intention or agreement to divide
the EVTC Securities with others for purposes of selling, offering, distributing
or otherwise disposing of any of the EVTC Securities.
4.20 Disclosure. No representation, warranty or other statement by IWT
or any Seller set forth herein or in any of the Seller Documents or IWT
Documents or contained in any other document or certificate furnished to EVTC,
or any of EVTC's officers, legal counsel, accountants, representatives or other
agents in connection with the transactions contemplated hereby, contains or will
contain an untrue statement of a material fact, or omits or will omit to state a
material fact necessary to make the statements contained herein or therein not
misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
EVTC hereby represents and warrants to the Sellers as follows:
5.1 Organization; Good Standing. EVTC is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and has the power and authority to own and lease its assets and properties and
to conduct its business as it is now being conducted.
5.2 Authority; Enforceability. EVTC has the corporate power and
authority to execute, deliver and perform this Agreement and all other
agreements, certificates and documents executed or delivered, or to be executed
or delivered, by EVTC in connection herewith (collectively the "EVTC Documents")
and to consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance of this Agreement
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and the EVTC Documents by EVTC have been duly authorized by all necessary
corporate action on the part of EVTC. This Agreement and each of the EVTC
Documents has been duly executed and delivered by EVTC and this Agreement and
each of the EVTC Documents constitutes (or when executed and delivered will
constitute) legal, valid and binding obligations of EVTC, enforceable against
EVTC in accordance with their respective terms.
5.3 No Conflict. The authorization, execution, delivery and
performance by EVTC of this Agreement and the EVTC Documents and the
consummation of the transactions contemplated hereby and thereby do not and will
not (a) violate or conflict with any provision of EVTC's Certificate of
Incorporation or bylaws; (b) violate, conflict with, result in a breach of or
constitute (with or without notice or lapse of time or both) a default under,
give rise to a right of termination, amendment or cancellation of, accelerate
the performance required by, or result in any payment under, any contract,
instrument or other writing of any nature whatsoever to or by which EVTC is a
party or is bound, or by which any of its properties or assets is subject; or
(c) violate, conflict with or result in a breach of any Legal Requirement
applicable to EVTC.
5.4 Consents. Except as set forth in Schedule 5.4 attached hereto, no
filing or registration with, notice to, or authorization, consent or approval
of, or other action (including, without limitation, the grant of any waiver) of
any Governmental Entity or Regulatory Authority or any other Person is required
to be obtained by EVTC in connection with: (i) the purchase from the Sellers of
the IWT Membership Interests and (ii) the execution, delivery and performance of
this Agreement and the EVTC Documents and the consummation of the transactions
contemplated hereby and thereby.
5.5 Capitalization.
--------------
(a) The authorized capital stock of EVTC consists of 25,000,000
shares of Common Stock, and 1,000,000 shares of preferred stock, par value $.01
per share. At March 25, 2002, 8,606,475 shares of Common Stock and no shares of
Preferred stock were issued and outstanding, respectively. At March 25, 2002,
[other than 2,541,768 shares of Common Stock issuable upon exercise of
outstanding option grants,] there were no other shares of Common Stock reserved
for issuance by EVTC under any of EVTC's 1992, 1996 or 2000 stock option plans
or outside any such plans. No warrants were outstanding at March 25, 2002.
(b) Except for the outstanding option grants referenced above,
the sale of 5,000,000 shares of Common Stock authorized by EVTC's board of
directors and the transactions contemplated by this Agreement, there are (i) no
other options, warrants or other rights, agreements, arrangements or commitments
of any character obligating EVTC to issue or sell any shares of capital stock of
or other equity interests in EVTC, (ii) no outstanding contractual obligations
or other commitments or arrangements of EVTC to: (1) repurchase, redeem or
otherwise acquire any shares of the capital stock of EVTC (or any interest
therein) or (2) provide funds to or make any investment (in the form of a loan,
capital contribution or otherwise) in any other entity, or (3) issue or
distribute to any person any capital stock of EVTC, or (4) issue or distribute
to holders of any of the capital stock of EVTC any evidence of indebtedness or
assets of EVTC, and (iii) no preemptive rights with regard to the capital stock
of EVTC, and no right of first refusal or similar rights with regard to such
capital stock. No options or rights to acquire equity securities granted by EVTC
have provisions which accelerate the
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vesting or right to exercise such options or rights or terminate any rights upon
the consummation of this Agreement. All of the outstanding securities of EVTC
have been issued and sold by EVTC in full compliance with applicable federal and
state securities laws. All of the outstanding shares of Common Stock in EVTC has
been duly and validly issued and is fully paid and non-assessable.
5.6 Issuance of Shares. Subject to the adoption of the Stock Amendment
and the 2002 Plan, the Shares issuable at the Closing, when issued and delivered
in accordance with the terms and provisions of this Agreement, and the Common
Stock issuable upon exercise of the Options, when issued in accordance with the
stock option agreements, will be (a) duly authorized and validly issued, fully
paid and non-assessable, (b) free and clear of any security interests, pledges,
mortgages, claims, liens and encumbrances of any kind whatsoever, and (c) issued
in compliance with all applicable federal and state securities laws.
5.7 SEC Filings. EVTC has filed all forms, reports and documents
required to be filed with the SEC by EVTC since January 1, 2000 (collectively,
the "SEC Reports"). Except for the late filing of the report of EVTC on Form
10-K for the year ended September 30, 2001 and the report of EVTC filed with the
SEC on Form 10-Q for the quarter ended December 31, 2001, which Form 10-Q has
not been reviewed by the public accountants of EVTC pursuant to the Statement on
Auditing Standards No. 71, the SEC Reports filed subsequent to January 1, 2000
and prior to the date of this Agreement (a) at the time filed (or if amended or
superseded by a subsequent filing, then on the date of such filing, all such
amended or superseded filings) complied as to form in all material respects with
the applicable requirements of the Securities Act or the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), as the case may be, and (b) did not at
the time they were filed (or if amended or superseded by a subsequent filing,
then on the date of such filing; all such amended or superseded filings) contain
any untrue statement of a material fact or omit to state a material fact
required to be stated in such SEC Reports or necessary in order to make the
statements in such SEC Reports, in the light of the circumstances under which
they were made, not misleading.
5.8 No Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by EVTC directly with the
Sellers and the broker designated by the Sellers and without the intervention of
any other Person on behalf of EVTC, and in such a manner as not to give rise to
any claim against the Sellers or any of their respective Affiliates for any
finder's fee, brokerage commission or like payment.
5.9 Disclosure. No representation, warranty or other statement by EVTC
set forth herein or in any of the EVTC Documents or contained in any other
document or certificate furnished to the Sellers, or any of the Sellers'
officers, legal counsel, accountants, representatives or other agents in
connection with the transactions contemplated hereby, contains or will contain
an untrue statement of a material fact, or omits or will omit to state a
material fact necessary to make the statements contained herein or therein not
misleading.
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ARTICLE VI
COVENANTS
6.1 Conduct of the Business.
-----------------------
(a) From the date of this Agreement through the Closing Date, IWT
has and shall, and the Sellers shall use their best efforts to ensure that IWT
(at its sole cost and expense) has and shall: (i) conduct the Business in the
ordinary course consistent with past practice; (ii) use its best efforts to
preserve the present business organizations and relationships of IWT (including,
without limitation, with distributors, customers, vendors, suppliers,
manufacturers, employees and others) with respect to the Business and all of the
goodwill associated therewith; (iii) use its best efforts to preserve the
material rights of IWT; (iv) not take any action that could reasonably be
expected to or would have a Material Adverse Effect or would materially impair,
hinder or adversely affect the ability of IWT to consummate the transactions
contemplated hereby or by any other Seller Document or IWT Document; (v) deliver
to EVTC a copy of each written notice or communication from any Governmental
Entity or Regulatory Authority relating to the Business; (vi) perform all
material obligations under each Contract; and (ix) deliver to EVTC all material
notices and communications with respect to the Business from customers,
suppliers, vendors and third parties.
(b) Without limiting the generality of the foregoing, from the
date of this Agreement through the Closing Date, the Sellers shall use their
best efforts to ensure that IWT has not and shall not: (i) authorize for
issuance, issue, sale, delivery or agree or commit to issue, sell, deliver or
pledge (whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise) any additional
membership interests in IWT; (ii) split, combine or reclassify any IWT
Membership Interests, declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any combination thereof) in
respect of its IWT Membership Interests or redeem or otherwise acquire any of
its IWT Membership Interests; (iii) incur or assume any indebtedness other than
trade payables incurred in the ordinary course of business; (iv) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for any material obligations of any other person; (v)
make any loans, advances or capital contributions to, or investments in, any
other person; (vi) acquire, sell, lease, transfer or dispose of any of its
properties or assets except in the ordinary course of business and consistent
with past practice, or take or suffer any action that would result in the
creation, or consent to the imposition, of any lien or encumbrance on any of the
properties or assets of IWT; (vii) make any capital expenditure or commitment
for additions to property, plant, equipment or other capital assets in excess of
fifty-thousand dollars ($50,000); (viii) except in the ordinary course of IWT's
business consistent with past practice, amend, waive, surrender or terminate or
agree to the amendment, waiver, surrender or termination of any Contract or
Authorization; (ix) waive any claims or rights of value with respect to the
Business or any Contract, other than in the ordinary course of business
consistent with past practices; (x) make, amend or revoke any Tax election; or
(xi) enter into any contract, agreement, commitment or arrangement to do, or
take, or agree (orally or in writing) or otherwise to take or consent to, any of
the foregoing actions.
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6.2 Due Diligence.
-------------
(a) Prior to the Closing, IWT shall, and the Sellers shall use
their best efforts to cause IWT to, give EVTC and its officers, employees, legal
counsel, accountants and other representatives free and full access to and the
right to inspect, upon reasonable prior notice and during normal business hours,
all of the premises, properties, assets, records, contracts and other documents
of IWT relating to the Business, and shall permit them to consult with the
officers, employees, accountants, legal counsel and agents of IWT for the
purpose of making such investigation as EVTC shall consider appropriate;
provided that such investigation shall not unreasonably interfere with IWT's
business operations. Prior to the Closing, IWT shall furnish to EVTC all such
documents and copies of documents and records and information which relate to
the Business and copies of any working papers relating thereto as EVTC shall
from time to time reasonably request.
(b) Prior to the Closing, IWT shall promptly advise EVTC in
writing of the commencement or threat (of which it has knowledge) against IWT of
any claim, action, suit or other proceeding that relates to or might reasonably
be expected to affect the Business.
(c) Prior to the Closing, IWT and the Sellers shall use their
best efforts to take action where the failure or omission to take such action
would cause (i) any representation or warranty made by any of them in this
Agreement or in any other Seller Document to be untrue or incorrect as of the
Closing or (ii) any of the conditions to the Closing set forth herein not to be
satisfied.
6.3 Obtaining Consents.
------------------
(a) Prior to the Closing, IWT shall, and the Sellers shall use
their best efforts to cause IWT to, in as timely a manner as is reasonably
practicable, make all filings with, and obtain all consents, Authorizations,
qualifications and orders from, all Governmental Entities and Regulatory
Authorities and other Persons necessary or required to be obtained by any of
them in order to consummate the transactions contemplated by this Agreement, the
Seller Documents and the IWT Documents.
(b) Prior to the Closing, EVTC shall use its best efforts, in as
timely a manner as is reasonably practicable, to make all filings with and
obtain all consents, Authorizations, qualifications and orders from, all
Governmental Entities and Regulatory Authorities and other Persons necessary or
required to be obtained by EVTC in order to consummate the transactions
contemplated by this Agreement and the EVTC Documents.
(c) Each of the parties hereto shall furnish the other parties
hereto such necessary information and reasonable assistance as such other
parties may reasonably request in writing in connection with Section 6.3(a) or
Section 6.3(b), as applicable.
6.4 Publicity. Prior to the Closing, neither IWT or any of the
Sellers, on the one hand, nor EVTC, on the other hand, shall issue or make, or
cause to have issued or made, the publication or dissemination of any press
release or other public announcement or disclose any matter relating to the
existence of this Agreement, the Seller Documents, the IWT Documents or the EVTC
Documents and the transactions contemplated hereby and thereby, except: (a)
after
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consultation with and having obtained the prior written approval of all other
parties hereto (which approval shall not be unreasonably withheld or delayed);
(b) except as may be required pursuant to any Legal Requirement or pursuant to
applicable subpoena; provided that such disclosure is limited to that which in
the written opinion of legal counsel for the disclosing party is required to be
disclosed, the failure of which to disclose would likely result in a legal
penalty to the disclosing party; or (c) by the parties to their respective
lawyers, accountants, lenders, investment bankers and other professional
advisors who need to know such information in order to assist a party hereto in
connection with the transactions contemplated hereby and who, as a condition
precedent to disclosure, agrees to keep the existence and terms of this
Agreement confidential and not to disclose the same except in accordance with
clauses (a) and (b) of this Section 6.6. After the Closing, only EVTC may issue
a press release or otherwise make a public statement or announcement with
respect to this Agreement or the transactions contemplated hereby or the
existence of this Agreement.
6.5 Further Assurances. Before and after the Closing, each of the
parties hereto shall execute such documents and other instruments and perform
such further acts as may be required or reasonably requested by any other party
hereto to carry out the provisions hereof and the transactions contemplated
hereby including, without limitation, vesting in EVTC good and marketable title
to the IWT Membership Interests free and clear of any and all Liens.
6.6 Supplements. If any representation, warranty or statement of any
of the parties hereto made herein or hereon, or in any schedule attached hereto
or in any other Seller Document, IWT Document or EVTC Document, as applicable,
shall be false or incorrect or become false or incorrect prior to the Closing,
the Sellers and IWT, on the one hand, and EVTC, on the other hand, shall deliver
to the other party a supplement that is sufficient to make such representation,
warranty or statement, as so supplemented, true and correct. It is understood
and agreed that the delivery of such a supplement to the other party shall not
in any manner constitute a waiver or limitation on the receiving party of such
receiving party's rights or remedies under this Agreement or otherwise or have
any effect on the satisfaction of the conditions set forth in Sections 7.1 or
7.2 hereof, as applicable, or be deemed to be a modification of any
representation, warranty or statement or in any way release any other party with
respect to any liability for any such representation, warranty or statement.
6.7 No Solicitation. Each of the Sellers and IWT agree that, prior to
the Closing, neither such Seller nor IWT nor any of their respective Affiliates,
investment bankers, advisors, attorneys or other agents will, directly or
indirectly, solicit, initiate, facilitate or encourage (including, without
limitation, by way of furnishing or disclosing non-public information) any
inquiries or the making of any proposal with respect to any merger,
consolidation, recapitalization or other business combination involving IWT or
the sale, transfer or assignment of all or any of the Assets or the capital
stock of IWT (each an "Acquisition Transaction") or negotiate, explore or
otherwise engage in discussions with any Person (other than EVTC and its
representatives) with respect to any Acquisition Transaction or enter into any
agreement, arrangement or understanding, formal or informal, written or oral,
with respect to any such Acquisition Transaction. IWT and/or any of the Sellers
shall promptly notify EVTC about any communication or solicitation received by
IWT or any of its respective Affiliates, investment bankers, advisors, attorneys
or other agents from any Person (other than EVTC and its representatives) with
respect to an Acquisition Transaction.
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6.8 Risk of Loss. If prior to the Closing any portion of the Assets
shall be taken (or any public announcement shall be made of an intent to take)
by condemnation, eminent domain or similar means or shall be damaged or
destroyed by fire or other casualty, and the result thereof, in the reasonable
opinion of EVTC is materially adverse to the Business, EVTC shall have the
option to either: (i) terminate this Agreement by giving notice to IWT within
ten (10) Business Days following receipt by EVTC of the notice required by the
immediately following sentence; or (ii) not terminate this Agreement; provided,
however, that IWT shall pay over to EVTC and irrevocably assign to EVTC all
amounts received or receivable (whether from insurance proceeds, governmental
payments or otherwise) by IWT as a result of or relating to any such taking,
damage or destruction. IWT shall give to EVTC prompt written notice of any
taking, public announcement, damage or destruction.
6.9 Voting Agreement; Amended Certificate of Incorporation.
------------------------------------------------------
(a) As promptly as practicable after the date the acquisition of
the IWT Membership Interests as contemplated by this Agreement is completed,
EVTC shall use its best efforts to obtain approval, by the written consent of
the holders of a majority of the issued and outstanding shares of EVTC's Common
Stock, of: (i) an amendment to the certificate of incorporation of EVTC
providing for an increase in the number of authorized shares of the Common Stock
to 100,000,000 shares (the "Stock Amendment") and (ii) 2002 Stock Option Plan of
EVTC (the "2002 Plan"), pursuant to which the Options, as part of the EVTC
Consideration under this Agreement, would be granted to the Sellers. Toward
satisfaction of this covenant, the Sellers shall enter into that certain Voting
Agreement, in the form of Exhibit C attached hereto, whereby the Sellers would
agree to vote the Shares in favor of the Stock Amendment, the 2002 Plan and,
upon the expiration of the statutory waiting period following the filing of the
Information Statement (defined in Section 6.9(b) hereof), the granting of the
Options.
(b) Immediately after the date the written consent is obtained,
EVTC shall prepare and file with the Securities and Exchange Commission (the
"SEC") a preliminary information statement on Schedule 14C (the "Information
Statement") pursuant to Rule 14c-2 enacted by the SEC under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") with respect to the
approval, by the written consent, of (i) the Stock Amendment and (ii) the 2002
Plan. As promptly as practicable thereafter, EVTC shall take all steps as shall
be necessary to file with the SEC and distribute to the stockholders of EVTC a
definitive copy of the Information Statement.
ARTICLE VII
CONDITIONS PRECEDENT TO CLOSING OBLIGATIONS
7.1 Conditions Precedent to EVTC's Obligation to Close. All
obligations of EVTC pursuant to this Agreement to consummate the transactions
contemplated hereby at the Closing shall be subject to the satisfaction, at or
prior to the Closing, of all of the following conditions, any one or more of
which may be waived in writing by EVTC (in its sole discretion):
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(a) All representations and warranties of IWT and the Sellers
contained in this Agreement and the Seller Documents shall be true and accurate
in all respects on and as of the Closing Date as if made again at and as of such
date (without regard to any supplement that may be delivered pursuant to Section
6.6 hereof).
(b) IWT and the Sellers shall have performed and complied with
all terms, provisions, agreements, covenants and conditions required by this
Agreement to be performed and complied with by them at or prior to the Closing.
(c) EVTC shall have received a certificate in the form annexed
hereto as Exhibit D, dated the Closing Date, signed on behalf of IWT by an
executive officer of IWT and each of the Sellers, to the effect that the
conditions set forth in Sections 7.1(a), (b), (f) and (g) have been fully
satisfied.
(d) No action, suit, investigation, inquiry or other proceeding
by any Governmental Entity or Regulatory Authority or other Person shall have
been instituted or threatened in writing which (i) could reasonably be expected
to have a material adverse effect on the Business or EVTC; (ii) arises out of or
relates to this Agreement or the transactions contemplated hereby; or (iii)
questions the validity hereof or any of the transactions contemplated hereby, or
seeks to enjoin the consummation of the transactions contemplated hereby or
seeks to obtain substantial damages in respect thereof. On the Closing Date,
there shall be no effective permanent or preliminary injunction, writ, temporary
restraining order or any order of any nature issued by a court of competent
jurisdiction directing that the transactions provided for herein not be
consummated as so provided.
(e) EVTC shall have received all deliveries to be made to it
pursuant to this Agreement, including, without limitation, those specified in
Section 3.2 hereof.
(f) There shall not have occurred since the date hereof (i) any
material adverse change in the operations, condition (financial or otherwise) or
results of operations or the prospects of the Business (a "Material Adverse
Effect"); or (ii) any other event, loss, damage, condition or state of facts of
any nature whatsoever which can reasonably be expected to have a Material
Adverse Effect on the Business.
(g) IWT shall have obtained all consents, approvals or waivers
set forth on Schedule 4.6 attached hereto, all without cost or other adverse
consequences to EVTC or the Business.
7.2 Conditions Precedent to Sellers' Obligation to Close. All
obligations of the Sellers pursuant to this Agreement to consummate the
transactions contemplated hereby at the Closing, shall be subject to the
satisfaction, at or prior to the Closing, of all of the following conditions,
any one or more of which may be waived in writing by the Sellers (in their sole
discretion):
(a) All representations and warranties of EVTC contained in this
Agreement and the EVTC Documents, as the case may be, shall be true and accurate
in all respects on and as of the Closing Date as if made again at and as of such
date (without regard to any supplement that may be delivered pursuant to Section
6.6 hereof).
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(b) EVTC shall have performed and complied with all terms,
provisions, agreements, covenants and conditions required by this Agreement to
be performed and complied with by it prior to the Closing.
(c) The Sellers shall have received a certificate, in the form
annexed hereto as Exhibit E, dated the Closing Date, signed on behalf of EVTC by
a respective executive officer of EVTC, to the effect that the conditions set
forth in Sections 7.2(a) and (b), as applicable, have been fully satisfied.
(d) On the Closing Date, there shall be no effective permanent or
preliminary injunction, writ, temporary restraining order or any order of any
nature issued by a court of competent jurisdiction directing that the
transactions provided for herein not be consummated as so provided.
(e) The Sellers shall have received all deliveries to be made to
them pursuant to this Agreement, including. without limitation, those specified
in Section 3.3 hereof.
ARTICLE VIII
CONFIDENTIALITY; NON-SOLICITATION
8.1 Confidentiality. After the Closing Date, the Sellers shall not,
directly or indirectly, under any circumstance: (a) disclose to any other Person
any Confidential or Proprietary Information (as such term is hereinafter
defined); (b) act or fail to act so as to impair the confidential or proprietary
nature of any such Confidential or Proprietary Information or the benefits
thereof to EVTC; (c) use any such Confidential or Proprietary Information in any
manner, other than for the sole and exclusive benefit of EVTC and only after
obtaining EVTC's prior written consent to such use; or (d) offer or agree to, or
cause or assist in the inception or continuation of, any such disclosure,
impairment or use of any such Confidential or Proprietary Information or trade
secret. After the Closing, all Confidential and Proprietary Information shall be
the sole and exclusive property of IWT and EVTC. For purposes hereof, the term
"Confidential and Proprietary Information" shall mean any and all of the
following (regardless of the medium in which maintained or stored): (i)
confidential or proprietary information or material not in the public domain
about or relating to any aspect of the Business or any trade secrets relating to
the Business, including, without limitation, financial information and
projections, research and development plans or projects; data and reports;
formulas; product-testing information; business improvements, processes,
marketing and selling strategies; strategic business plans (whether pursued or
not); budgets; licenses; pricing, pricing strategy and cost data; the identities
of customers and potential customers; the identities of contact persons at
customers and potential customers; the particular preferences, likes, dislikes
and needs of customers and contact persons of customers with respect to
products, pricing, timing, sales terms, service plans, methods, practices,
strategies, forecasts, know-how and other marketing techniques; the identities
of key accounts; the identities of suppliers and contractors, and all
information about those supplier and contractor relationships such as contact
person(s), pricing and other terms; the terms of contracts or agreements; and
product recipes; or (ii) any information, documentation or material not in the
public domain, the knowledge of which gives
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or would likely give EVTC or any of its Affiliates an advantage with respect to
the Business over any Person not possessing such information.
8.2 Non-Solicitation. The Sellers shall not (i) at any time during the
two (2) years following the Closing Date directly or indirectly, engage or be
interested (whether as owner, partner, member, lender, shareholder, consultant,
employee, agent, supplier, distributor or otherwise) in any business, activity
or enterprise which competes with any aspect of the Business; or (ii) directly
or indirectly, induce or influence any customer, vendor, supplier, distributor,
consultant or any other Person that had a business relationship with IWT prior
to the Closing to discontinue or reduce the extent of its relationship with IWT
or to terminate said relationship. For purposes of this Agreement, the Sellers
shall not be deemed to be directly or indirectly interested in a business if
their interest, individually or in the aggregate with each other, is limited
solely to the ownership of not more than two percent (2%) on an individual basis
or five percent (5%) in the aggregate of the securities of any class of a
corporation whose shares are listed or admitted to trade on a national
securities exchange or are quoted on Nasdaq or a similar means if Nasdaq is no
longer providing such information.
8.3 Remedies. The Sellers acknowledge that because the breach or
attempted or threatened breach of any of the provisions of Section 8.1 or 8.2
hereof will result in immediate and irreparable injury to EVTC for which EVTC
will not have an adequate remedy at law and for which monetary damages are not
readily calculable, EVTC shall be entitled to obtain injunctive or other
equitable relief restraining and prohibiting such breach or threatened breach,
including, without limitation, a temporary or permanent injunction, enjoining
any such breach or attempted or threatened breach (without being required to
post a bond or other security or to show any actual damages). The right to an
injunction and other equitable relief shall be in addition to, and cumulative
with, all other rights and remedies available to EVTC at law, in equity or
otherwise.
8.4 Enforceability. The Sellers acknowledge that, without the
provisions of this Article VIII hereof, EVTC would not enter into this Agreement
or consummate the transactions contemplated hereby. Accordingly, the Sellers
shall be bound by the provisions hereof to the maximum extent permitted by law,
it being the intent and spirit of the parties that such provisions shall be
enforced to the fullest extent permitted by law. Without limiting the generality
of the foregoing, if any provision of this Article VIII hereof shall be held by
any court of competent jurisdiction or another competent authority to be
illegal, invalid or unenforceable, such provision shall be reformed so that it
will be construed and enforced as if it had been more narrowly drawn so as not
to be illegal, invalid or unenforceable, and such illegality, invalidity or
unenforceability shall have no effect upon and shall not impair the
enforceability of any other provision of this Agreement.
8.5 Additional Remedies. The parties agree that nothing in this
Agreement shall be construed to limit or negate the common law of torts or trade
secrets where it provides EVTC with any broader, further or other remedy or
protection than those provided in this Article VIII.
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ARTICLE IX
TERMINATION
9.1 Termination. Anything herein to the contrary notwithstanding, this
Agreement may be terminated at any time prior to the Closing Date:
(a) by the mutual written consent of the Sellers and IWT, on the
one hand, and EVTC, on the other hand;
(b) by EVTC, by written notice given to IWT and the Sellers, if
(i) at any time prior to the Closing, either IWT or the Sellers shall default in
the due observance or the due and timely performance of any of the terms or
provisions of this Agreement on their part to be observed or performed or (ii)
any of the conditions set forth in Section 7.1 shall have become incapable of
fulfillment and shall not have been waived in writing by EVTC;
(c) by the Sellers, by written notice given to EVTC, if (i) at
any time prior to the Closing, EVTC shall default in the due observance or the
due and timely performance of any of the terms and provisions of this Agreement
on its part to be observed or performed; or (ii) any of the conditions set forth
in Section 7.2 shall have become incapable of fulfillment and shall not have
been waived in writing by the Sellers; or
(d) by either EVTC or the Sellers:
(i) if a court of competent jurisdiction or any Governmental
Entity or Regulatory Authority shall have issued an order, decree or
ruling or taken any other action (which order, decree or ruling the
parties hereto shall use their best efforts to lift), in each case
permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement, and such order, decree,
ruling or other action shall have become final and nonappealable; or
(ii) if the Closing Date shall not have occurred on or
before April 30, 2002; provided, however, that the right to terminate
this Agreement shall not be available to any party whose breach of any
representation, warranty or covenant in this Agreement made or to be
observed or performed by such party has been the cause of, or resulted
in, the failure of the Closing to occur on or before such date or
(e) by EVTC pursuant to Section 6.8 hereof.
9.2 Effect of Termination. In the event of termination (i) pursuant to
Section 9.1(a) of this Agreement or (ii) following written notice thereof by the
terminating party to the other parties to this Agreement, pursuant to Sections
9.1(b) through 9.1(e), inclusive, of this Agreement, this Agreement shall
terminate, without further action by any of the parties hereto. If this
Agreement is terminated as provided herein:
(a) Upon request therefor, each party will redeliver all
documents, work papers and other material furnished to such party by any other
parties relating to the
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transactions contemplated hereby, whether obtained before or after the execution
hereof, to the party furnishing the same;
(b) No party hereto (or any of their respective stockholders,
directors, officers, employees, control persons, representatives or Affiliates)
shall have any liability or further obligation to any other party to this
Agreement resulting from the termination of this Agreement; provided that any
termination of this Agreement pursuant to Sections 9.1(b), 9.1(c) or 9.l(d)(ii)
shall not operate as a waiver of any rights, remedies or privileges of the
non-breaching party (parties, if applicable), to pursue all available remedies
against the other party (parties, if applicable) whose breach of a
representation or warranty or covenant contained in this Agreement caused the
conditions that resulted in the termination of this Agreement.
ARTICLE X
INDEMNIFICATION
10.1 Survival of Representations and Warranties. Except with respect
to the representations and warranties set forth in Sections 4.12, 4.13 and 4.19
hereof, which shall survive the Closing Date indefinitely, all representations
and warranties of the Parties shall survive for eighteen (18) months after the
Closing Date; provided that there shall be no termination of any such
representation or warranty as to which a claim has been asserted prior to the
termination of such survival period. Except as otherwise expressly provided in
this Agreement, all covenants, agreements, undertakings and indemnities set
forth in this Agreement shall survive indefinitely. No investigation made by
EVTC or the Sellers (whether prior to, on or after the Closing Date) shall in
any way limit the representations and warranties of the other party to this
Agreement.
10.2 Indemnification by the Sellers. Subject to the further provisions
of this Article X, the Sellers shall indemnify and hold harmless EVTC and its
Affiliates, and each of its directors, officers, employees, agents,
representatives, stockholders and controlling parties and all of their
successors and assigns (each an "EVTC Indemnified Person") from, and defend each
of them from and against, and will pay each EVTC Indemnified Person for any and
all Losses asserted against, imposed upon or incurred by any such EVTC
Indemnified Person, directly or indirectly, resulting from or arising out of or
in connection with or relating to any of the following: (a) any inaccuracy or
breach of any representation or warranty of IWT or any of the Sellers contained
herein or in any of the Seller Documents or IWT Documents; (b) any breach of any
agreement, covenant or obligation of IWT or any of Sellers contained herein or
in any of the Seller Documents or IWT Documents; (c) any liability, obligation
or responsibility of IWT or any of the Sellers or which in any way relates to
the Business (including, without limitation, any liability for Taxes or
withholdings) arising out of the operation of the Business prior to the Closing
Date; (d) any and all claims, actions, suits or any administrative, arbitration,
governmental or other proceedings or investigations against any EVTC Indemnified
Person or in which any EVTC Indemnified Person becomes involved that relate to
IWT or the Business in which the principal event giving rise thereto occurred
prior to the Closing Date or which result from or arise out of any action or
inaction prior to the Closing Date of IWT or any director, officer, employee,
agent, representative or subcontractor of IWT or a state of facts prior to
Closing Date, including, without limitation, any claim, action, suit or
proceeding or investigation
-22-
set forth on Schedule 4.5(a) and/or Schedules 4.12 and 4.13 to this Agreement;
and (e) the operations of the Business following the Closing.
10.3 Indemnification by EVTC. EVTC shall indemnify and hold harmless
the Sellers and their Affiliates, and all of their successors and assigns (each
a "Seller Indemnified Person"), from and defend each of them from and against
and will pay each Seller Indemnified Person for any and all Losses asserted
against, imposed upon or incurred by any such Seller Indemnified Person,
directly or indirectly, resulting from or arising out of or in connection with
or relating to any of the following: (a) any inaccuracy or breach of any
representation or warranty of EVTC contained herein or in any other EVTC; (b)
any breach of any agreement, covenant or obligation of EVTC contained herein or
in any other EVTC; and (c) except as described in Sections 10.2(c) and 10.2(d)
hereof, EVTC's operation of the Business from and after the Closing Date;
10.4 Procedures for Third Party Claim Indemnification.
------------------------------------------------
(a) Each of the EVTC Indemnified Persons or Seller Indemnified
Persons, as the case may be (each, an "Indemnified Party") shall promptly give
notice hereunder to the indemnifying party after becoming aware of any claim as
to which recovery may be sought against the indemnifying party because of the
indemnity in this Article X, and, if such indemnity shall arise from the claim
of a third party, shall permit the indemnifying party to assume the defense of
any such claim and any litigation or other proceeding resulting from such claim;
provided, that any Indemnified Party may, in any event, at its own expense,
monitor and participate in, but not control, the defense of any such claim or
litigation. Notwithstanding the foregoing, the right to indemnification
hereunder shall not be affected by any failure of an Indemnified Party to give
such notice (or by delay by an Indemnified Party in giving such notice) unless,
and then only to the extent that, the rights and remedies of the indemnifying
party shall have been prejudiced as a result of the failure to give, or delay in
giving, such notice. The notice required hereunder shall specify the basis for
the claim for indemnification to the extent ascertainable at the time of the
notice. Failure by the indemnifying party to notify an Indemnified Party of its
election to defend any such claim or action by a third party within 30 days
after notice thereof shall have been given to the indemnifying party shall be
deemed a waiver by the indemnifying party of its right to defend such claim or
action. Nothing herein shall be deemed to prevent an Indemnified Party from
making a contingent claim for indemnification hereunder, provided the
Indemnified Party has reasonable grounds to believe that the claim or demand for
indemnification will be made and sets forth the estimated amount of such claim
to the extent then ascertainable.
(b) The indemnifying party shall not, in the defense of such
claim or any litigation resulting therefrom, consent to entry of any judgment
(other than a judgment of dismissal on the merits without costs) or enter into
any settlement, except with the written consent, which consent shall not be
unreasonably withheld, of the Indemnified Party, which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
Indemnified Party a release from all liability in respect of such claim or
litigation.
(c) If the indemnifying party shall not assume the defense of any
such claim by a third party, or litigation resulting therefrom, after receipt of
notice from the
-23-
Indemnified Party, the Indemnified Party may defend against such claim or
litigation in such manner as it deems appropriate.
(d) If the indemnifying party shall not, within 30 days after its
receipt of the notice required by Section 10.4(a) hereof, advise the Indemnified
Party that the indemnifying party denies the right of the Indemnified Party to
indemnity in respect of the claim, then the amount of such claim shall be deemed
to be finally determined between the Parties hereto. If the indemnifying party
shall notify the Indemnified Party that it disputes any claim made by the
Indemnified Party, then the Parties hereto shall endeavor to settle and
compromise such claim, and if unable to agree on any settlement or compromise,
such claim for indemnification shall be settled by appropriate litigation, and
any liability established by reason of such settlement, compromise or litigation
shall be deemed to be finally determined. Any claim that is finally determined
in the manner set forth above shall be paid promptly by the indemnifying party
in cash.
10.5 Payment of Indemnification Obligations. Each indemnifying party
shall pay promptly to any Indemnified Party the amount of all damages, losses,
deficiencies, liabilities, costs, expenses, claims and other obligations to
which the foregoing provisions of this Article X relates.
10.6 Interest on Unpaid Obligations. If all or part of any
indemnification obligation under this Agreement is not paid when due, the
indemnifying party shall pay the Indemnified Party interest on the unpaid amount
of such obligation for each day from the date the amount became due until it is
paid in full, payable on demand, at the rate equal to two percent (2%) per annum
plus the "Prime Rate" published from time to time in The Wall Street Journal.
10.7 Other Remedies. The indemnification rights of any Indemnified
Party under this Article X are independent of and in addition to such rights and
remedies as such Indemnified Party may have at law, in equity or otherwise for
any misrepresentation, breach of warranty or failure to fulfill any covenant or
agreement under or in connection with this Agreement on the part of any party,
none of which rights or remedies shall be affected or diminished hereby.
10.8 Right to Indemnification Not Affected by Knowledge or Waiver.
------------------------------------------------------------
(a) The right to indemnification hereunder, payment of Losses or
other remedy based upon breach of any representation, warranty, covenant,
agreement or obligation of a party hereunder shall not be affected by any
investigation conducted with respect to, or any knowledge acquired (or capable
of being acquired) at any time, whether before or after the execution and
delivery of this Agreement or the Closing Date (including, without limitation,
the due diligence investigation engaged in by EVTC and its representatives),
with respect to the accuracy or inaccuracy of or compliance or noncompliance
with, any such representation, warranty, covenant, agreement or obligation.
(b) The waiver of any condition to a party's obligation to
effectuate the Closing and consummate the transactions contemplated hereby,
where such condition is based on the accuracy of any representation or warranty,
or on the performance of or compliance with any
-24-
covenant, agreement or obligation, will not affect the right to indemnification,
payment of Losses or other remedy based on such representation, warranty,
covenant, agreement or obligation.
ARTICLE XI
MISCELLANEOUS
11.1 Expenses. Except as otherwise expressly provided in this
Agreement, each party hereto shall pay its own costs and expenses incurred in
connection with or incidental to the preparation and negotiations of this
Agreement, the carrying out of the provisions of this Agreement and the
consummation of the transactions contemplated hereby (including, without
limitation, attorneys' fees and expenses).
11.2 Amendment. This Agreement may not be modified, amended, altered
or supplemented, except by a written agreement executed by each of the parties
hereto.
11.3 Entire Agreement. This Agreement, including the schedules and
exhibits hereto, and the instruments and other documents delivered pursuant to
this Agreement, the Seller Documents, the IWT Documents and the EVTC Documents
contain the entire understanding and agreement of the parties relating to the
subject matter hereof and supersedes all prior and/or contemporaneous
understandings and agreements of any kind and nature (whether written or oral)
among the parties with respect to such subject matter, all of which are merged
herein.
11.4 Waiver. Any waiver by EVTC, on the one hand, and IWT and any of
the Sellers, on the other hand, of any breach of or failure to comply with any
provision or condition of this Agreement by the other party shall not be
construed as, or constitute, a continuing waiver of such provision or condition,
or a waiver of any other breach of, or failure to comply with, any other
provision or condition of this Agreement, any such waiver to be limited to the
specific matter and instance for which it is given. No waiver of any such breach
or failure or of any provision or condition of this Agreement shall be effective
unless in a written instrument signed by the party granting the waiver and
delivered to the other party hereto in the manner provided for hereunder in
Section 11.5. No failure or delay by either party to enforce or exercise its
rights hereunder shall be deemed a waiver hereof, nor shall any single or
partial exercise of any such right or any abandonment or discontinuance of steps
to enforce such rights, preclude any other or further exercise thereof or the
exercise of any other right.
11.5 Notices. All notices, demands, consents, requests, instructions
and other communications to be given or delivered or permitted under or by
reason of the provisions of this Agreement or in connection with the
transactions contemplated hereby shall be in writing and shall be deemed to be
delivered and received by the intended recipient as follows: (a) if personally
delivered, on the Business Day of such delivery (as evidenced by the receipt of
the personal delivery service), (b) if mailed certified or registered mail
return receipt requested, four (4) business days after being mailed, (c) if
delivered by overnight courier (with all charges having been prepaid), on the
business day of such delivery (as evidenced by the receipt of the overnight
courier service of recognized standing), or (d) if delivered by facsimile
transmission, on the business day of such delivery if sent by 6:00 p.m. in the
time zone of the recipient, or if
-25-
sent after that time, on the next succeeding business day (as evidenced by the
printed confirmation of delivery generated by the sending party's telecopier
machine). If any notice, demand, consent, request, instruction or other
communication cannot be delivered because of a changed address of which no
notice was given (in accordance with this Section 11.5), or the refusal to
accept same, the notice, demand, consent, request, instruction or other
communication shall be deemed received on the second business day the notice is
sent (as evidenced by a sworn affidavit of the sender). All such notices,
demands, consents, requests, instructions and other communications will be sent
to the following addresses or facsimile numbers as applicable:
If to IWT: Innovative Waste Technologies LLC
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
If to EVTC: EVTC, Inc.
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Telecopier:
with copies to: Jenkens & ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP
The Chrysler Building
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Sellers: To the addresses set forth opposite their
names on Exhibit A hereto.
or to such other address as any party may specify by notice given to the other
party in accordance with this Section 11.5.
11.6 Governing Law; Jurisdiction. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware applicable to
agreements made and to be performed in that state, without regard to any of its
principles of conflicts of laws or other laws which would result in the
application of the laws of another jurisdiction. THIS AGREEMENT SHALL BE
CONSTRUED AND INTERPRETED WITHOUT REGARD TO ANY PRESUMPTION AGAINST THE PARTY
CAUSING THIS AGREEMENT TO BE DRAFTED. EACH OF THE PARTIES HEREBY UNCONDITIONALLY
AND IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY. EACH OF THE PARTIES UNCONDITIONALLY AND IRREVOCABLY
CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE
AND THE FEDERAL DISTRICT COURT FOR THE DISTRICT OF DELAWARE WITH RESPECT TO ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY, AND EACH OF THE PARTIES HEREBY UNCONDITIONALLY
AND IRREVOCABLY WAIVES ANY OBJECTION TO VENUE IN ANY SUCH COURT, AND AGREES THAT
SERVICE OF ANY
-26-
SUMMONS, COMPLAINT, NOTICE OR OTHER PROCESS RELATING TO SUCH SUIT, ACTION OR
OTHER PROCEEDING MAY BE EFFECTED IN THE MANNER PROVIDED IN SECTION 11.5.
11.7 Severability. Without limiting anything set forth in Section 8.4
hereof, the parties agree that should any provision of this Agreement be held to
be invalid, illegal or unenforceable in any jurisdiction, that holding shall be
effective only to the extent of such invalidity, illegally or unenforceability
without invalidating or rendering illegal or unenforceable the remaining
provisions hereof, and any such invalidity, illegally or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. It is the intent of the parties that this Agreement be fully
enforced to the fullest extent permitted by applicable law.
11.8 Binding Effect; Assignment. This Agreement and the rights and
obligations hereunder may not be assigned by any party hereto without the prior
written consent of the other parties hereby. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
11.9 Headings. The section headings contained in this Agreement
(including, without limitation, section headings and headings in the exhibits
and schedules) are inserted for reference purposes only and shall not affect in
any way the meaning, construction or interpretation of this Agreement. Any
reference to the masculine, feminine, or neuter gender shall be a reference to
such other gender as is appropriate. References to the singular shall include
the plural and vice versa.
11.10 Third Parties. Except as expressly permitted by Section 11.8
hereof, nothing herein is intended or shall be construed to confer upon or give
to any Person, other than the parties hereto and the Indemnified Persons, any
rights, privileges or remedies under or by reason of this Agreement.
11.11 Counterparts. This Agreement may be executed in two (2) or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original, and all of which, when
taken together, shall constitute one and the same document. This Agreement shall
become effective when one or more counterparts, taken together, shall have been
executed and delivered by all of the parties.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.
EVTC, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer
INNOVATIVE WASTE TECHNOLOGIES, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Member
SELLERS:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Member
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇, Member
-28-
EXHIBIT A
SELLERS OF IWT MEMBERSHIP INTERESTS
NAME ADDRESS EVTC CONSIDERATION
---- ------- ------------------
1. ▇▇▇ ▇. ▇▇▇▇▇▇▇ c/o Innovative Waste Management, LLC 5,000,000 shares of
14910 Welcome Lane Common Stock; and
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Contingent Option
to purchase up to 7,500,000
shares of Common Stock
2. ▇▇▇▇ ▇. ▇▇▇▇▇▇ c/o Innovative Waste Management, LLC 2,500,000 shares of
14910 Welcome Lane Common Stock; and
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Contingent Option to
purchase up to 500,000
shares of Common Stock
3. Brasada Energy, Inc.(+) c/o Innovative Waste Management, LLC 5,000,000 shares of
14910 Welcome Lane Common Stock; and
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Contingent Option to
purchase up to 14,000,000
shares of Common Stock
----------
(+) In conjunction with the closing of the sale of the membership interests to
EVTC, Inc. under this Securities Purchase Agreement, Brasada Energy, Inc.
exercised a previously granted option to acquire a membership interest in
IWT.
E-29
SCHEDULE 1
DEFINITIONS
The terms defined in this Schedule 1, whenever used in this Agreement
(including, without limitation, the exhibits and other schedules attached
hereto), shall have the following meanings:
1.1 "Acquisition Transaction" has the meaning given such term in Section 6.9 of
this Agreement.
1.2 "Affiliate" of any Person (as such term is hereinafter defined) means any
stockholder, member, Person or entity controlling, controlled by or under
common control with such Person, or any director, officer, manager or key
employee of such Person or any of the respective immediate family members
of such Person. For purposes of this definition, the term "control", when
used with respect to any Person, means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" shall have meanings that correspond to the
foregoing.
1.3 "Assets" has the meaning given such term in Section 4.7 of this Agreement.
1.4 "Authorizations" means all licenses, permits, franchises, approvals,
authorizations, qualifications, concessions or the like, issued or granted
by any federal, state, local or foreign Governmental Entity or Regulatory
Authority (as such term is hereinafter defined) or by any non-governmental
entity to any Person or which in any way relate to the Business.
1.5 "Business" shall mean the business, activities and operations in which IWT
engages, or contemplates engaging in, at the time of the Closing.
1.6 "Closing" has the meaning given such term in Section 3.1 of this Agreement.
1.7 "Closing Date" has the meaning given such term in Section 3.1 of this
Agreement.
1.8 "Code" means the Internal Revenue Code of 1986, as amended.
1.9 "Confidential and Proprietary Information" has the meaning given such term
in Section 8.1 of this Agreement.
1.10 "Contract" means (a) any contract, lease, license or other instrument,
agreement or binding commitment, whether or not in written form, relating
to the Business.
1.11 "Environment" means all air, surface water, groundwater or land, including,
without limitation, land surface or subsurface, including, without
limitation, all fish, wildlife, biota and all other natural resources.
S-1
1.12 "Environmental Claim" means any and all administrative or judicial actions,
suits, orders, claims, liens, notices, notices of violations,
investigations, complaints, requests for information, proceedings or other
communications (whether written or oral), whether criminal or civil,
pursuant to or relating to any applicable Environmental Law (as such term
is hereinafter defined) by any Person (including, but not limited to, any
Governmental Entity or Regulatory Authority or citizens' group) based upon,
alleging, asserting, or claiming any actual or potential (a) violation of
or liability under any Environmental Law, (b) violation of any
Environmental Permit (as such term is hereinafter defined), or (c)
liability for investigatory costs, cleanup costs, removal costs, remedial
costs, response costs, natural resource damages, property damage, personal
injury, fines or penalties arising out of, based on, resulting from or
related to the presence, Release (as such term is hereinafter defined) or
threatened Release into the Environment of any Hazardous Substance (as such
term is hereinafter defined) at any location, including, but not limited
to, any off-Site (as such term is hereinafter defined) location to which
any Hazardous Substance or materials containing any Hazardous Substance
were sent for handling, storage, treatment or disposal.
1.13 "Environmental Law" means any and all current federal, state, local,
provincial and foreign, civil and criminal laws, statutes, ordinances,
orders, codes, rules, regulations, Environmental Permits, policies,
guidance documents, judgments, decrees, injunctions, or agreements with any
Governmental Entity or Regulatory Authority, relating to the protection of
health and the Environment, worker health and safety, and/or governing the
handling, use, generation, treatment, storage, transportation, disposal,
manufacture, distribution, formulation, packaging, labeling, or Release of
Hazardous Substance, including, but not limited to: the Clean Air Act, 42
U.S.C.ss.7401 et seq.; the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C.ss.9601 et seq.; the
Federal Water Pollution Control Act, 33 U.S.C. ss.1251 et seq.; the
Hazardous Material Transportation Act, 49 U.S.C.ss.1801 et seq.; the
Federal Insecticide Fungicide and Rodenticide Act, 7 U.S.C.ss.136 et seq.;
the Resource Conservation and Recovery Act of 1976 ("RCRA"), 42
U.S.C.ss.6901 et seq.; the Toxic Substances Control Act, 15 U.S.C.ss.2601
et seq.; the Occupational Safety and Health Act of 1970, 29 U.S.C.ss.651 et
seq.; the Oil Pollution Act of 1990, 33 U.S.C.ss.2701 et seq.; and the
state analogies thereto; and any common law doctrine, including, but not
limited to, negligence, nuisance, trespass, personal injury, or property
damage related to or arising out of the presence, Release, or exposure to a
Hazardous Substance.
1.14 "Environmental Permit" means any federal, state, local, provincial, or
foreign permits, licenses, consents or Authorizations required by any
Governmental Entity or Regulatory Authority under or in connection with any
Environmental Law and includes any and all orders, consent orders or
binding agreements issued or entered into by a Governmental Entity or
Regulatory Authority under any applicable Environmental Law.
1.15 "EVTC Consideration" has the meaning given such term in Section 2.1 of this
Agreement.
1.16 "EVTC Documents" has the meaning given such term in Section 5.2 of this
Agreement.
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1.17 "EVTC Indemnified Person" has the meaning given such term in Section 10.2
of this Agreement.
1.18 "Governmental Entity" or "Regulatory Authority" means any court, tribunal,
arbitrator, executive or regulatory authority, tax authority, agency,
commission, official or other instrumentality of the United States of
America, any foreign country or any domestic or foreign state, county,
city, municipality or other political subdivision.
1.19 "Hazardous Substance" means petroleum, petroleum hydrocarbons or petroleum
products, petroleum by-products, radioactive materials, asbestos or
asbestos-containing materials, gasoline, diesel fuel, pesticides, radon,
urea formaldehyde, lead or lead-containing materials, polychlorinated
biphenyls, and any other chemicals, materials, substances or wastes, in any
amount or concentration, which are now or hereafter become defined or
regulated as "hazardous substances", "hazardous materials", "hazardous
wastes", "extremely hazardous wastes", "restricted hazardous wastes",
"toxic substances", "toxic pollutants", "pollutants", "regulated
substances", "solid wastes" or "contaminants" or words of similar import
under any Environmental Law.
1.20 "Indemnified Party" has the meaning given such term in Section 10.4 of this
Agreement.
1.21 "Intellectual Property Rights" means all United States of America and
foreign: patents; copyrights, trademarks; trade names; service marks; brand
names; business and product names; uniform resource locators ("URL's");
internet domain names; internet websites and the electronic files, content
and layout related thereto; email addresses; listings in telephone books
and directories and internet directories; browser, search engines and
hyper-links; logos; symbols; trade dress; design and representation or
expressions of any of the foregoing; all registrations or applications for
registration of any of the foregoing; and all databases; source codes;
object codes; computer programs and computer software in any form or
medium, in each case that are owned by IWT and/or were, are or may be used
in connection with the Business or held for use or being developed by IWT
or by others for the benefit of IWT for use in connection with the
Business; and all trade secrets; industrial or manufacturing models; tools,
methods and processes; formulae; recipes; research and development;
inventions (whether or not patentable); know-how; manufacturing,
engineering and other drawings and blueprints; technology; technical
information; engineering data; design and engineering specifications; and
other proprietary processes and information of any kind owned by IWT and
which were, are or may be used in connection with the Business.
1.22 "Intangibles" means the Intellectual Property Rights, including, without
limitation, all trade secrets, designs and methodologies, formulae,
recipes, research and development, inventions (whether or not patentable)
and other proprietary processes and information of any kind not directly
used in connection with the Business but being developed or considered for
development any time during the last five (5) years by IWT or by others for
the benefit of IWT for use in connection with the Business.
1.23 "IWT Documents" has the meaning given to such term in Section 4.3(b) of
this Agreement.
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1.24 "IWT Membership Interests" has the meaning given to such term in Section
2.1 of this Agreement.
1.25 "knowledge", "known", "best of knowledge" shall mean those matters of which
the applicable Person is "aware" and language of similar import shall
include all matters actually or constructively known by such Person, and
which, in the case of IWT, shall include any of its directors, officers and
key employees, in each case, after due diligence and reasonable
investigation.
1.26 "Legal Requirement" of a Person means any statute, rule, regulation or
other provision of law, or any order, judgment or other direction of a
court, arbitration panel or other tribunal resolution or any Governmental
Entity or Regulatory Authority, or any other requirement, permit,
registration, license or Authorization applicable to such Person, or to any
of its properties. assets or business.
1.27 "Liens" means any liens, charges, encumbrances, options, rights of first
refusal, security interests, claims, mortgages, pledges, charges,
easements, obligations or any other encumbrances (including, without
limitation, any conditional sale or other title retention agreement or any
lease in the nature thereof and any agreement to grant or to permit or
suffer to exist any of the foregoing) or third party rights or equitable
interests of any nature whatsoever.
1.28 "Losses" shall mean any and all demands, claims, actions, liabilities,
losses, damages (including, without limitation, special, consequential and
punitive damages), costs, penalties, expenses (including, without
limitation, interest, costs of investigation and defense and the reasonable
fees and expenses of attorneys and other professionals and experts) or
diminution in value, whether or not involving a Third Party Claim and
without regard to any potential insurance recovery or Tax benefit that may
be obtained as a result thereof, for which a party is entitled to
indemnification pursuant to Article X of this Agreement.
1.29 "Material Adverse Effect" shall mean a material adverse effect on the
assets, properties, operations, prospects or condition (financial or
otherwise) of the Business.
1.30 "Person" means any natural individual, corporation, partnership, joint
venture, trust, limited liability company, association, organization, firm
or other entity.
1.31 "Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing
of a Hazardous Substance into the Environment.
1.32 "Seller" has the meaning given such term in the first paragraph of this
Agreement.
1.33 "Seller Documents" has the meaning given such term in Section 4.3(a) of
this Agreement.
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1.34 "Site" means any real property currently or previously leased, used or
operated by IWT, any predecessors of IWT or any entities previously owned
by IWT, including, without limitation, all soil, subsoil, surface waters
and groundwater thereat.
1.35 "Tax" or "Taxes" means any and all taxes, charges, fees, levies,
deficiencies or other assessments of any nature whatsoever, including,
without limitation, any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (pursuant to Section
59A of the Code or otherwise), custom duties, capital stock, net worth,
franchise, recording, employee's income withholding, foreign withholding,
social security (or its equivalent), unemployment, disability, real
property, personal property, intangible property, sales, use, transfer,
value added, occupancy, registration, customs, recording, gains,
alternative or add-on minimum, estimated or other taxes, charge, fee, levy,
deficiency or other assessment of whatever kind or nature, including any
interest, penalties or additions to tax in respect of any of the foregoing,
whether disputed or not, and any obligation to indemnify, assume or succeed
to the liability of any other Person in respect of any of the foregoing
(including, without limitation, as a transferee (pursuant to Section 6901
of the Code or otherwise), as a result of Treasury Regulation ss.1.1502-6
or similar provision of applicable law, or as a result of a tax sharing or
similar agreement, arrangement or understanding).
1.36 "Tax Return" means any federal, state, local or foreign return,
declaration, report, claim for refund or credit, document, or other
information or filing (including any schedule or exhibit thereto) that is
filed or required to be supplied to any Governmental Entity or Regulatory
Authority in respect of or relating to any Tax, and any amendment thereof,
whether on a consolidated, combined, unitary or separate basis.
1.37 "Third Party Claim" means a claim or demand made by any Person who is not a
party to this Agreement including, without limitation, any corporation,
Governmental Entity or Regulatory Authority or other third party against an
Indemnitee.
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