EXHIBIT 2.3
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT (the "Agreement") is entered into on January 30,
1999, by and between SAFE TECHNOLOGIES INTERNATIONAL, INC., a Delaware
corporation ("SFAD") and XXXXX XXXXX, XXXX XXXXXXXXX and XXXXX XXX
(collectively, the "IAI Stockholders") as the sole shareholders of INTERNET
ASSOCIATES INTERNATIONAL, INC., a Nevada corporation ("IAI").
RECITALS
It is the intention of the parties hereto that all of the issued and
outstanding stock of IAI shall be acquired by SFAD, in exchange for the
issuance to the IAI Stockholders of SFAD Common Stock as set forth below (the
"Acquisition"). The issuance of stock to the IAI Stockholders is intended to
qualify as a transaction in securities exempt from registration under the
Securities Act of 1933, as amended (the "Securities Act"), and under the
applicable securities laws of the state or jurisdiction where IAI Stockholders
reside, and the Acquisition is intended to qualify as a tax-free
reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of
1986, as amended (the "Code").
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and intending to be legally bound, the parties hereto agree as
follows:
1. Purchase and Purchase Price. The IAI Stockholders agree to sell, and SFAD
agrees to purchase, all of the issued and outstanding shares of stock of IAI
(the "IAI Stock") for a purchase price equal to ten (10) times the net profits
of IAI for the calendar year 1999. For purposes of this Agreement, net
profits shall mean all revenues less all expenses, excluding only those
expenses of IAI incurred at the request of SFAD or incurred as a result of
SFAD being a public company. Normally occurring IAI accounting expenses, such
as the preparation of monthly, quarterly and annual financial statements and
tax returns shall be included in the calculation of net profits, but the
expenses of auditing the financial statements shall not be included, nor shall
any expenses of SFAD be allocated to IAI, including but not limited to,
extraordinary items, overhead, or the like. The net profits of IAI shall be
determined by IAI's independent accountants in accordance with generally
accepted accounting principles, consistently applied. Should either party
disagree with the determination of net profits, the parties agree to mutually
appoint another independent accounting firm to review IAI's financial
statements with IAI's independent accountants and make a final determination
of the net profits of IAI, which determination will be binding on all parties.
The expense of such additional independent accountants will be shared equally
between SFAD and the IAI Stockholders.
2. Payment of Purchase Price.
(a) The entire purchase price shall be paid by the issuance to the IAI
Stockholders of shares of common stock of SFAD (the "SFAD Stock"). The first
One Hundred Million (100,000,000) shares of SFAD Stock issued in payment of
the purchase price shall be valued at four cents ($.04) per share, which was
the approximate market value per share at the time the parties reached
agreement in principle. If the purchase price exceeds four million dollars
($4,000,000) so that more than 100,000,000 shares of SFAD Stock are to be
issued in payment of the purchase price, such additional shares shall be
valued at the average of the mean between the closing bid and asked prices for
SFAD Stock for each trading day in the month of January, 2000.
(b) At closing, the IAI Stock shall be delivered to SFAD, Twenty Five
Million (25,000,000) shares of the SFAD Stock shall be delivered to the IAI
Stockholders, and Seventy Five Million (75,000,000) shares of the SFAD Stock
shall be delivered into escrow to be held in escrow until SFAD has received
IAI's audited financial statements as of and for the year ended December
31,1999; the actual purchase price has been determined based upon the above
formula; and the actual number of shares of SFAD Stock to be issued to the IAI
Stockholders has been determined in accordance with the above valuation
method. The appropriate number of shares of SFAD Stock shall then be released
to the IAI Stockholders (or, if the purchase price is determined to be less
than $100,000, the IAI Stockholders shall return to SFAD for cancellation the
appropriate number of shares of SFAD Stock, based upon a value of $.04 per
share), SFAD shall issue to the IAI Stockholders additional shares of SFAD
Stock if required in order to complete payment of the final purchase price,
and the IAI Stock shall be released to SFAD. The SFAD Stock shall be divided
among the IAI Stockholders in the same proportion as they own the IAI Stock.
SFAD and the management of the IAI business will use their best efforts, and
will cooperate with each other and the accountants retained to perform the IAI
audit, in order to complete the audit by February 10, 2000, or as soon
thereafter as possible.
(c) The escrow shall be established with an independent legal counsel,
acceptable to both parties, along with escrow instructions for the release of
the SFAD Stock and the IAI Stock to the appropriate parties.
(d) At closing, the IAI Stockholders will deliver to SFAD their irrevocable
proxies to vote (a) the 25,000,000 shares of SFAD Stock issued to the IAI
shareholders, and (b) the 75,000,000 shares of SFAD Stock held in escrow. The
proxies as to the 25,000,000 shares will be canceled at such time as IAI
attains year to date net profits of not less than $100,000. The proxies as to
the 75,000,000 shares will be canceled at such time as all the terms and
conditions of the escrow have been fulfilled. Additionally, the IAI
Stockholders agree that they will not sell any of the 25,000,000 shares of
SFAD common stock issued to them at the Closing (or any additional shares
issued thereafter) until all the conditions of escrow have been satisfied.
3. Securities Representations of IAI Stockholders. In connection with this
transaction, the IAI Stockholders represent and acknowledge that:
(a) They have been advised and are aware that the issuance of the SFAD Stock
to them will not be registered under the Securities Act of 1933 or any state
securities laws and that, therefore, the SFAD Stock cannot be sold by them
unless the SFAD Stock is so registered or exemptions from registration, such
as SEC Rule 144, are available. Under Rule 144, no sales of the SFAD Stock
can be made for one year after closing, and the IAI Stockholders agree that
they will not sell or pledge the SFAD Stock in any manner for a period of one
year after closing. In addition, notwithstanding the volume of sales which may
be allowable under Rule 144 after one year from closing, the IAI Stockholders
agree that, until three years after closing, the number of shares of the SFAD
Stock sold by them within any three month period will not exceed one half
percent (1/2%) of the total number of shares of SFAD common stock outstanding
as of the date of the most recent report filed by the Company with the
Securities and Exchange Commission during those years.
(b) They have received and read copies of SFAD's Form 10K for the fiscal
year ended December 31, 1997, SFAD's Form 10Q for the period ended September
30, 1998, and any Form 8K's filed by SFAD since the date of the foregoing Form
10Q, have had an opportunity to question the principals of SFAD as to all
matters which they deem material and relevant to their decision to enter into
this transaction, and have had the opportunity to obtain any and all
additional information necessary to verify the accuracy of the information
received or any other supplemental information which they deem relevant to
make an informed investment decision.
(c) They have such knowledge and experience in business and financial
matters, or competent professional advice, that they are capable of evaluating
the merits and risks of acquiring the SFAD Stock. They understand the risks
inherent in this transaction and have consulted with an attorney and/or
accountant to the extent they deemed it necessary in reviewing this
transaction.
(d) They are entering into this transaction and acquiring the SFAD Stock for
their own account for investment only and not as a nominee for others.
(e) They are residents of the State of Florida.
(f) The representations and agreements made in this paragraph shall survive
closing of the transaction described in this Agreement.
4. Employment Contracts. At closing, Xxxxx Xxxxx and Xxxx Xxxxxxxxx shall
enter into Employment Agreements with IAI, for three year terms, pursuant to
which they will assume the offices of President and Secretary/Treasurer of
IAI. The Employment Agreements shall provide for a base salary and benefits
as shall be agreed by all parties. After closing, Xxxxx Xxxxx and Xxxx
Xxxxxxxxx, as officers of IAI, will be responsible for the day to day
operations of IAI as a wholly owned autonomous subsidiary of SFAD, and will
notify IAI's banker of the change of ownership of IAI. The IAI officers will
provide SFAD with monthly financial statements. IAI will remit to SFAD on a
monthly basis, commencing January, 1999, seventy five percent (75%) of IAI's
net profits for the prior month for as long as IAI exists as a subsidiary of
SFAD, subject to reduction in any month as necessary to allow IAI to pay its
payroll, trade creditors and other usual and necessary business expenses. To
the extent any monthly remittance is so reduced, the shortfall will be
remitted as soon as the cash requirements of IAI allow.
5. Board of Directors of IAI. After closing, SFAD will cause the number of
directors of IAI to be increased to three. The three directors shall be Xxxxx
Xxxxx, Xxxx Xxxxxxxxx and a person to be designated by SFAD. For so long as
Xxxxx Xxxxx and Xxxx Xxxxxxxxx are employed by IAI, SFAD agrees to maintain
the number of directors at three and to elect Xxxxx Xxxxx and Xxxx Xxxxxxxxx
as directors. The IAI board of directors will hold bi-monthly meetings.
6. Representations and Warranties of the IAI Stockholders. The IAI
Stockholders, jointly and severally, as a material inducement to SFAD to enter
into this Agreement and consummate the transactions contemplated hereby, make
the following representations and warranties to SFAD. The representations and
warranties are true and correct in all material respects at this date, and
will be true and correct in all material respects on the Closing Date as
though made on and as of such date.
(a) Due Organization. IAI is a corporation duly organized and validly
existing; its status is active; it is qualified to do business and in good
standing in each state where the properties owned, leased or operated, or the
business conducted by them, requires such qualification. IAI has the power to
own its properties and assets and to carry on its business as now presently
conducted. The Articles of Incorporation and By-Laws of IAI are attached
hereto as Schedule 5(a) and are made a part hereof.
(b) Capitalization. The authorized capitalization of IAI consists of 25,000
shares of no par value common stock, of which 1,000 shares are currently
issued and outstanding. Except for the foregoing, there are no outstanding or
presently authorized securities, warrants, preemptive rights, subscription
rights or options to issue any of IAI securities.
(c) IAI Balance Sheet. Schedule 5(c) contains the balance sheet of IAI as
of January 4, 1999. The balance sheet fairly presents the financial position
of IAI as of the date thereof. The books and records, financial and other, of
IAI are in all material respects complete and correct. IAI does not now own,
and at the closing date will not own, more than 5% percent of the issued and
outstanding capital stock of any other corporation or an equity interest in
any other entity.
(d) Ownership of IAI Stock. The IAI Stockholders are, and will be on the
closing date, the sole record and beneficial owners of all the issued and
outstanding shares of IAI capital stock. At closing the IAI Stock will be
transferred to SFAD by the IAI Stockholders free and clear of all liens and
encumbrances of any kind or nature.
(e) Undisclosed Liabilities. Except as otherwise disclosed to SFAD in
writing, IAI does not have any liabilities or obligations of any nature, fixed
or contingent, mature or unmatured, that are not shown or otherwise provided
for in its balance sheet, except for liabilities and obligations arising
subsequent to the date thereof and liabilities incurred in the ordinary course
of business, none of which individually or in the aggregate will be materially
adverse to the business or financial condition of IAI. There are no material
loss contingencies of IAI that will not be adequately provided for.
(f) Materially Adverse Change. Since the date of the IAI balance sheet, the
business of IAI has been operated in the ordinary course and there has not
been:
(i) Any material adverse change in the business, condition (financial or
otherwise), results of operations, prospects, properties, assets, liabilities,
earnings or net worth of IAI.
(ii) Any material damage, destruction or loss (whether or not covered by
insurance) affecting IAI or their respective assets, properties or businesses.
(iii) Any declaration, setting aside or payment of any dividend or other
distribution in respect of any shares of the capital stock of IAI or any
direct or indirect redemption, purchase or other acquisition of any such stock
or any agreement to do so.
(iv) Any issuance or sale by IAI, or agreement by IAI or any of the IAI
Stockholders, to sell or pledge any of IAI securities, nor have any
irrevocable proxies been given with respect to IAI securities.
(v) Any statute, rule, regulation or order adopted by any governmental
body, agency or authority (including orders of regulatory authorities with
jurisdiction over IAI) that materially and adversely affects IAI or its
business or financial condition.
(vi) Any material increase in the rate of compensation or in bonus or
commission payments payable or to become payable to any of the salaried
employees of IAI; provided, however, that this subsection shall not restrict
or limit IAI in any way from hiring additional personnel who are required for
their operations.
(vii) Any other events or conditions of any character that may reasonably be
expected to have a materially adverse effect on IAI or its business or
financial condition.
(g) Litigation. There are no actions, suits, claims, investigations or
legal administrative or arbitration proceedings pending or, to the knowledge
of any of the IAI Stockholders, threatened against IAI, whether at law or in
equity, or before or by any federal, state, municipal, local, foreign or other
governmental department, commission, board, bureau, agency or instrumentality,
nor do the IAI Stockholders know of any basis for any such action, suit,
claim, investigation or proceeding.
(h) Compliance: Governmental Authorizations. IAI has complied in all
material respects with all federal, state, local or foreign laws, ordinances,
regulations and orders applicable to its business, including without
limitation, federal and state securities, banking collection and consumer
protection laws and regulations that, if not complied with, would materially
and adversely affect its businesses. IAI has all federal, state, local and
foreign governmental licenses and permits necessary for the conduct of its
business. Such licenses and permits are in full force and effect. The IAI
Stockholders know of no violations of any such licenses or permits. No
proceedings are pending or threatened to revoke or limit the use of such
licenses or permits.
(i) Tax Matters. IAI has, or at the time of the Closing hereunder will
have, filed all federal, state and local tax or related returns and reports
due or required to be filed on or before such date, which reports will
accurately reflect in all material respects the amount of taxes due. IAI has
paid all amounts or taxes or assessments that would be delinquent if not paid
as of the date of this Agreement, and will have paid such required amounts as
of the Closing Date. There are no tax liens with respect to any properties
owned by IAI.
(j) Agreements. Schedule 5(j) contains a true and complete list and brief
description of all IAI's assets, material written or oral contracts,
agreements, mortgages, obligations, understandings, arrangements, restrictions
and other instruments to which IAI is a party or by which IAI or its assets
may be bound. True and correct copies of all items set forth on Schedule 5(j)
have been made available to SFAD as part of SFAD's due diligence. No event
has occurred that (whether with or without notice, lapse of time or the
happening or occurrence of any other event) would constitute a material
default by IAI under any of the contracts or agreements set forth in Schedule
5(j). Neither of the IAI Stockholders have knowledge of any material
violations have occurred pursuant to any loan agreements to which any of IAI
is a party.
(k) Title to Property and Related Matters. IAI has, and at the time of the
Closing will have, good and marketable title to all of its properties,
interests in properties and assets, real, personal and mixed, owned by it at
the date of this Agreement, of any kind or character, free and clear of any
liens or encumbrances. Except for matters that may arise in the ordinary
course of business, the assets of IAI are in good operating condition and
repair, reasonable wear and tear excepted. To the best of the knowledge of
the IAI Stockholders, there does not exist any condition that materially
interferes with the use thereof in the ordinary course of the business of IAI.
(l) Licenses: Trademarks: Trade Names. Schedule 5(l) sets forth all
licenses, trademarks, trade names, service marks, copyrights, patents or any
applications for any of the foregoing that relate to the business of IAI, all
of which are solely owned by IAI, free and clear of any claims, liens or
encumbrances.
(m) Due Authorization. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, nor
compliance with any of provisions hereof, will violate in any material respect
any order, writ, injunction or decree of any court or governmental authority,
or violate or conflict with in any material respect or constitute a default
under (or give rise to any right of termination, cancellation or acceleration
under) any provisions of any note, bond, lease, mortgage, obligation,
agreement, understanding, arrangement or restriction of any note, bond, lease,
mortgage, obligation, agreement, understanding, arrangement or restriction of
any kind to which either IAI Stockholder is a party or by which he or she may
be bound. No approval, authorization, consent, order or other action of, or
filing with, any person, firm or corporation or any court, administrative
agency or other governmental authority is required in connection with the
execution and delivery by the IAI Stockholders of this Agreement or the
consummation of the transactions described herein.
(n) Full Disclosure. The IAI Stockholders have disclosed to SFAD in the
Schedules to this Agreement or independently, or made available to SFAD,
documents, books and records pertaining to, all events, conditions and facts
materially affecting the properties, business and prospects of IAI. At
closing, the IAI Stockholders will not have withheld disclosure of any events,
conditions and facts that may materially and adversely affect the properties,
businesses or prospects of IAI.
(o) Brokerage Fees. The IAI Stockholders represent to SFAD that they know
of no person or entity entitled to a commission, broker's fee, finder's fee or
other compensation in connection with this transaction other than Xxxxxxxx X.
Xxxxx, whose fee is being paid by SFAD. The IAI Stockholders agree to
indemnify and hold SFAD harmless from any and all loss or damages, including a
reasonable attorney's fee and court costs at all trial and appellate levels,
arising out of any claim against SFAD for brokerage or other compensation by a
party claiming such compensation by reason of its relationship with the IAI
Stockholders.
7. Representations and Warranties of SFAD. SFAD, as a material inducement to
the IAI Stockholders to enter into this Agreement and consummate the
transactions contemplated hereby, makes the following representations and
warranties to the IAI Stockholders, which representations and warranties are
true and correct in all material respects at this date, and will be true and
correct in all material respects on the Closing Date as though made on and as
of such date.
(a) Due Organization. SFAD is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. SFAD
has the corporate power to own its property and to carry on its business as
now presently conducted.
(b) SEC Reporting. From the first date that such reports were required of
SFAD, SFAD has accurately and completely filed with the SEC all required
reports, including but not limited to, Annual Reports on Form 10-KSB,
Quarterly Reports on Form 10-QSB and Periodic Reports on Form 8-K (the "SEC
Filings"). As of their respective dates, none of the SEC Filings contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements made
therein, in light of the circumstances in which they were made, not
misleading.
(c) SFAD Financial Statements. The SFAD financial statements as contained
in the SEC Filings were prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
and present fairly the consolidated financial position of SFAD and its
subsidiaries as of the respective dates, and for the respective periods,
covered thereby.
(d) Undisclosed Liabilities. SFAD has no liabilities or obligations of any
nature, fixed or contingent, matured or unmatured, that are not shown or
otherwise provided for in SFAD's financial statements or otherwise disclosed
in writing to IAI.
(e) No Material Adverse Change. Since September 30, 1998, there has been no
development or occurrence that would constitute a material adverse change in
the financial condition or prospects of SFAD.
(f) Due Authorization. Subject only to ratification of this Agreement by
SFAD's Board of Directors, this Agreement has been duly authorized, executed,
and delivered by SFAD, and constitutes a legal, valid, and binding obligation
of SFAD, enforceable in accordance with its terms except as such enforcement
may be limited by applicable bankruptcy, insolvency, moratorium, and other
similar laws relating to, limiting or affecting the enforcement of creditors
rights generally or by the application of equitable principles. The
execution, delivery and performance of this Agreement by SFAD will not violate
or conflict within any material respect or constitute a default under any
provisions of applicable law, SFAD's Articles of Incorporation or Bylaws, or
any agreement or instrument to which SFAD is a party or by which it or its
assets are bound. No consent of any federal, state, municipal or other
governmental authority is required by SFAD for the execution, delivery or
performance of this Agreement by SFAD. No consent of any party to any
contract or agreement to which SFAD is a party or by which any of its property
or assets are subject is required for the execution, delivery or performance
of this Agreement by SFAD that has not been obtained at the date of this
Agreement.
(g) Litigation. There are no actions, suits, claims, investigations or
legal, administrative or arbitration proceedings pending against SFAD, its
assets or business, whether at law or in equity, or before or by any federal,
state, municipal, local foreign or other governmental department, commission,
board, bureau, agency or instrumentality, nor does SFAD know or a threat of,
or any basis for, any such action, suit claim, investigation or proceeding.
(h) Tax Matters. SFAD has filed all federal, state and local, tax or
related returns and reports due or required to be filed, which reports
accurately reflects in all material respects the amount of taxes due. SFAD
has paid all taxes or assessments that have become due, other than taxes or
charges being contested in good faith or not yet finally determined. SFAD is
not aware of any tax liens with respect to any properties owned by SFAD.
(i) Full Disclosure. SFAD has not, at the Closing Date, and will not have
at the Closing Date, withheld disclosure of any events, conditions, and facts
of which it may have knowledge and that may materially and adversely affect
the business or prospects of SFAD.
(j) No Approvals Required. No approval, authorization, consent, order of
other action of, or filing with, any person, firm or corporation or any court,
administrative agency or other governmental authority is required in
connection with the execution and delivery by SFAD of this Agreement or the
consummation of the transactions described herein, except to the extent that
SFAD may be required to file reports in accordance with relevant regulations
under federal and state securities laws.
(k) Brokerage Fees. SFAD has incurred a finders fee in connection with this
Agreement in the amount of six million (6,000,000) shares of SFAD Stock which
shall be issued by SFAD directly to Xxxxxxxx X. Xxxxx simultaneously with
release from escrow of the SFAD Stock to the IAI Stockholders.
(l) Right of Rescission. SFAD warrants that if (i) within one year from the
Closing Date, SFAD files a petition in bankruptcy or commences any proceeding
under any bankruptcy, reorganization, arrangement, liquidation or similar law
of any jurisdiction, or if there is filed against SFAD any such petition or
application, or any such proceeding is commenced against SFAD, in which an
order for relief is entered or which remains undismissed for a period of sixty
(60) days or more, or if SFAD by any act or omission indicates its consent to,
approval of or acquiescence in any such petition, application, proceeding or
order for relief, or (ii) within two years from the release of the SFAD Stock
from escrow, there occurs a period of not less than 90 days in which there are
no published bid prices for SFAD common stock, then the IAI Stockholders shall
have the right, upon written notice to SFAD, to rescind this Agreement, in
which event all SFAD Stock issued to the IAI Stockholders and all IAI Stock
and corporate records transferred to SFAD shall be returned and this Agreement
shall be of no further force or effect.
8. Covenants of IAI. Prior to Closing, IAI shall:
(a) Not engage in any practice, take any action, embark on any course of
inaction, or enter into any transaction outside the ordinary course of
business, without the prior written consent of SFAD.
(b) Keep IAI's business and properties substantially intact, including its
recent operations, physical facilities, working conditions, and relationships
with lessors, licensors, suppliers, customers and employees.
(c) Not authorize any salary or compensation increase, dividends or loans to
officers or directors without prior written consent of SFAD.
(d) Not contact any third party for the purpose of soliciting or arranging
for the solicitation of any proposals involving a business combination, equity
financing or sale of IAI's outstanding capital stock or assets, issuance of
additional securities, merger, consolidation or other capital transactions
outside the ordinary course of IAI's businesses.
9. Closing. The Closing shall occur on or before February 5, 1999 at SFAD's
attorneys offices at such hour to be advised by SFAD. SFAD may extend the
Closing Date for up to 30 days upon demonstrating that there are reasonable
circumstances delaying the Closing and evidence that SFAD is diligently
pursuing the performance of, and compliance with, all conditions precedent to
the obligations hereunder. At the Closing, the following transactions shall
occur, all of such transactions being deemed to occur simultaneously:
(a) The IAI Stockholders will deliver, or cause to be delivered, to SFAD the
following:
(i) Stock certificates for of the shares of capital stock of IAI being
transferred to SFAD hereunder, duly endorsed or with stock powers attached in
blank.
(ii) All corporate records of IAI, including without limitation corporate
minute books (which shall contain copies of the Articles of Incorporation and
Bylaws, as amended to the Closing Date), stock books, stock transfer books,
corporate seals, shares of stock of the Subsidiaries; and such other corporate
books and records as may reasonably be requested by SFAD and its counsel.
(iii) A certificate of good standing for IAI from the Secretary of State of
its state of incorporation, dated at or about the Closing Date, to the effect
that such corporation is in good standing under the laws of such state.
(iv) Names, addresses, and Social Security numbers of the IAI
Stockholders.
(v) The Employment Agreements referred to in Section 4 of this Agreement.
(vi) Such other instruments, documents and certificates, if any, as are
required to be delivered pursuant to the provisions of this Agreement or that
may be reasonably requested in furtherance of the provisions of this
Agreement.
(b) SFAD will deliver or cause to be delivered to the IAI Stockholders:
(i) Stock issuance instructions to SFAD's Transfer Agent for 25,000,000
shares of the SFAD Stock for delivery to the IAI Stockholders within ten
business days after the Closing Date.
(ii) Stock issuance instructions to SFAD's Transfer Agent for 75,000,000
shares of the SFAD Stock for delivery into escrow in accordance with this
Agreement within ten business days after the Closing Date.
(iii) A Certificate from the Secretary of State of Delaware dated at or
about the Closing Date that SFAD is in good standing under the laws of said
state.
(iv) The Employment Agreements referred to in Section 4 of this Agreement.
(v) Such other instruments, documents and certificates, if any, as are
required to be delivered pursuant to the provisions of this Agreement, or that
may be reasonably requested in furtherance of the provisions of this
Agreement, including a copy of the resolutions of the Board of Directors
authorizing the execution and delivery of this Agreement and issuance of the
SFAD Stock.
10. Conditions Precedent to Obligations of the IAI Stockholders. All
obligations of the IAI Stockholders under this Agreement are subject to the
fulfillment, prior to or on the Closing Date (unless otherwise stated herein),
of each of the following conditions:
(a) The Board of Directors of SFAD shall have approved the execution and
delivery of this Agreement.
(b) The representations and warranties made by SFAD in this Agreement or in
any certificates or documents delivered to the IAI Stockholders pursuant to
the provisions hereof shall be true in all respects at and as of the time of
the Closing as though such representations and warranties were made at and as
of such time.
(c) SFAD shall have performed and complied in all material respects with all
covenants, agreements and conditions required by this Agreement to be
performed or complied with by it prior to or at the Closing.
11. Conditions Precedent to Obligations of SFAD. All obligations of SFAD
under this Agreement are subject to the fulfillment, prior to or on the
Closing Date (unless otherwise stated herein), of each of the following
conditions:
(a) The representations and warranties made by the IAI Stockholders in this
Agreement or in any certificates or documents delivered to SFAD pursuant to
the provisions hereof shall be true in all respects at and as of the time of
the Closing as though such representations and warranties were made at and as
of such time.
(b) The IAI Stockholders shall have performed and complied in all material
respects with all covenants, agreements and conditions required by this
Agreement to be performed or complied with by it prior to or at the Closing.
(c)The IAI Stockholders shall have delivered to SFAD all of the Schedules
referenced herein, and such Schedules and documents shall have been reasonably
acceptable to SFAD.
(d) Any Due Diligence Examination by SFAD prior to the Closing Date shall
not have resulted in the discovery of any materially adverse information
concerning the business, condition (financial or otherwise), results of
operations, prospects, properties, assets, liabilities, earnings or net worth
of IAI.
(e) IAI shall have (i) no liens or encumbrances of any nature on its
assets, other than capital lease obligations that exist at the date of this
Agreement; (ii) no violations in any material respect pursuant to any loan
agreements; and (iii) no debt or other obligations except as described in the
Schedules to this Agreement.
12. Nature of Representation and Warranties. All of the parties hereto are
executing and carrying out the provisions of this Agreement in reliance on the
representations, warranties, covenants and agreements contained in this
Agreement or at the Closing of the transactions herein provided for, and any
investigation that they might have made or any other representations,
warranties, covenants, agreements, promises or information, written or oral,
made by the other party or parties or any other person shall not be deemed a
waiver of any branch of any such representation, warranty, covenant or
agreement.
13. Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed to have been duly given if
delivered in person or sent by overnight courier delivery, confirmed facsimile
transmission or prepaid first class registered or certified mail, return
receipt requested, to the following addresses, or such other addresses as are
given to the other parties to this Agreement in the manner set forth herein.
If to SFAD, to:
Xxxxxxx Xxxxxx, President
Safe Technologies International, Inc.
000 Xxxxxxxx Xxxxxx X-0
Xxxx Xxxxx, Xxxxxxx 00000
If to the IAI Stockholders, to:
Internet Associates International, Inc.
000 Xxxxxxxxx 00 Xxxxxx, Xxxxx 000
Xxxx Xxxxx, XX 00000
With a copy to:
Xxxxxxx X. Xxxxx, Esq.
Shapo, Xxxxxxxx & Xxxxx, P.A.
000 Xxxxx Xxxxxxxx Xxxx., Xxxxx 0000
Xxxxx, XX 00000
Any such notices shall be effective when delivered in person or sent by
facsimile transmission, one business day after being sent by overnight courier
delivery or three business days after being sent by registered or certified
mail. Any of the foregoing addresses may be changed by giving notice of such
change in the foregoing manner, except that notices for changes of address
shall be effective only upon receipt.
14. Miscellaneous.
(a) Further Assurances. At any time, and from time to time, after the
Closing, each party will execute such additional instruments and take such
further action as may be reasonably requested by the other party to confirm or
perfect title to any property transferred hereunder or otherwise to carry out
the intent and purposes of this Agreement.
(b) Expenses of the Transaction. Each party will bear their own expenses in
connection with this transaction.
(c) Survival of Representations. All covenants, agreements, representations
and warranties made herein shall survive the Closing for a period of one year,
except that all representations and warranties as to tax matters shall survive
closing through all applicable statutes of limitation. All covenants and
agreements by or on behalf of the parties hereto that are contained or
incorporated in this Agreement shall bind and inure to the benefit of the
successors and assigns of all parties hereto.
(d) Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof. It
supersedes all prior negotiations, letters and understandings relating to the
subject matter hereof.
(e) Amendment. This Agreement may not be amended, supplemented or modified
in whole or in part except by an instrument in writing signed by the party of
parties against whom enforcement of any such amendment, supplement or
modification is sought.
(f) Assignment. This Agreement may not be assigned by any party hereto
without the prior written consent of the other parties.
(g) Choice of Law. This Agreement shall be interpreted, construed and
enforced in accordance with the laws of the State of Florida.
(h) Headings. The section and subsection headings in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this agreement.
(i) Pronouns. All pronouns and any variations thereof shall be deemed to
refer to the masculine, feminine, neuter, singular or plural as the context
may require.
(j) Number and Gender. Words used in this Agreement, regardless of the
number and gender specifically used, shall be deemed and construed to include
any other number, singular or plural, and any other gender, masculine,
feminine or neuter, as the context indicates is appropriate.
(k) Effect of Waiver. The failure of any party at any time or times to
required performance of any provisions of this Agreement will in no manner
affect the right to enforce the same. The waiver by any party of any breach
of any provision of this Agreement will not be construed to be a waiver by any
such party of any succeeding breach of that provision or a waiver by such
party of any breach of any provision.
(l) Enforcement. Should it become necessary for any party to institute
legal action to enforce the terms and conditions of this Agreement, the
successful party will be awarded reasonable attorney's fees at all trial
appellate levels, expenses and costs. Any suit , action or proceeding with
respect to this Agreement shall be brought in the courts of Palm Beach County
in the State of Florida or in the U.S. District Court for the Southern
District of Florida. The parties hereto hereby accept the exclusive
jurisdiction of those courts for the purpose of any such suit, action or
proceeding. The parties hereto hereby irrevocably waive, to the fullest
extent permitted by law, any objection that any of them may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of
or relating to this Agreement or any judgment entered by any court in respect
thereof brought in Palm Beach County, Florida, has been brought in an
inconvenient forum.
(m) Specific Performance. The parties hereto acknowledge and agree that any
party's remedy at law for a breach or threatened breach of any of the
provisions of this Agreement would be inadequate and such breach or threatened
breach shall be per se deemed as causing irreparable harm to such party.
Therefore, in the event of such breach or threatened breech, the parties
hereto agree that, in addition to any available remedy at law, including but
not limited to monetary damages, an aggrieved party, without posting any bond,
shall be entitled to obtain, and the offending party agrees not to oppose the
aggrieved party's request for, equitable relief in the form of specific
enforcement, temporary restraining order, temporary or permanent injunction,
or any other equitable remedy that may then be available to the aggrieved
party.
(n) Binding Nature. This Agreement will be binding upon and will inure to
the benefit of any successor or successors of the parties hereto.
(o) No Third-Party Beneficiaries. No person shall be deemed to possess any
third-party beneficiary right pursuant to this Agreement. It is the intent of
the parties hereto that no direct benefit to any third party is intended or
implied by the execution of this Agreement.
(p) Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which
together will constitute one and the same instrument.
(q) Facsimile Signature. This Agreement may be executed and delivered by
facsimile transmission and any such signature shall be of the same force and
effect as an original signature.
IN WITNESS THEREOF, the parties have executed this Agreement on the date first
above written.
SAFE TECHNOLOGIES INTERNATIONAL, INC. BY:
/s/ Xxxxxxx X. Xxxxxx
------------------------------
Xxxxxxx Xxxxxx, CEO & Chairman
IAI BY:
/s/ Xxxxx Xxxxx
------------------------------
Xxxxx Xxxxx
/s/ Xxxx Xxxxxxxxx
------------------------------
Xxxx Xxxxxxxxx
/s/ Xxxxx Xxx
------------------------------
Xxxxx Xxx
