EXHIBIT 6.6
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
BRANSON SIGNATURE RESORTS, INC. ("BRANSON")
AND
ADVANCED GAMING TECHNOLOGY, INC. ("AGTI")
AND
THE EXCHANGING SHAREHOLDERS (AS DEFINED HEREIN)
DATED AS OF JUNE 1, 1995
TABLE OF CONTENTS
Page
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ARTICLE I. EXCHANGE OF SHARES........................................... 2
Section 1.1. Plan of Reorganization................................ 2
Section 1.2. Exchange of Stock..................................... 2
Section 1.3. Ownership of All Property and the Entire Business .... 2
A. Assets..................................................... 3
B. Interests.................................................. 3
C. Realty..................................................... 3
D. Authorities................................................ 4
E. Property................................................... 4
Section 1.4. Liabilities, Obligations and Contracts................ 4
Section 1.5. Excluded Property..................................... 5
ARTICLE II. AGTI EXCHANGE SHARES, OTHER TRANSFER AND OBLIGATIONS ....... 5
Section 2.1. AGTI Exchange Shares.................................. 5
Section 2.2. Other Transfers and Obligations....................... 6
A. Excluded Property.......................................... 6
ARTICLE III. CLOSING PROVISIONS......................................... 6
Section 3.1. The Closing and Closing Provisions.................... 6
Section 3.2. Deliveries by Exchanging Shareholders at the Closing.. 6
X. Xxxxxxx Stock Certificates................................. 6
B. Conditions Precedent....................................... 6
C. Miscellaneous.............................................. 6
D. Corporate Records.......................................... 6
Section 3.3. Deliveries by AGTI at the Closing..................... 7
Section 3.4. Deliveries by Branson................................. 7
Section 3.5. Exhibit Deliveries.................................... 7
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF BRANSON AND
EXCHANGING SHAREHOLDERS..................................... 7
Section 4.1. Organization, Good Standing and Approval.............. 8
Section 4.2. Capitalization and Title to Shares.................... 8
Section 4.3. Ownership and Authority............................... 9
Section 4.4. Branson Subsidiaries.................................. 9
Section 4.5. Financial Statements.................................. 9
Section 4.6. Undisclosed Liabilities............................... 10
A. Permitted Encumbrances..................................... 10
B. Indebtedness............................................... 10
C. Economic, Property or Personal Liability................... 10
Section 4.7. Absence of Conflicting Agreements or Required Consents 10
Section 4.8. Schedule of, Title to, and Condition of
Branson Property...................................... 11
A. Title and Encumbrances..................................... 11
B. Realty; Leases............................................. 11
C. Contracts, Authorities, Etc................................ 12
D. Bank Accounts.............................................. 13
E. Subsidiaries............................................... 13
Section 4.9. Compliance with Laws.................................. 13
A. Notice of Non-Compliance................................... 13
B. Defaults................................................... 14
C. Governmental Regulations................................... 14
D. Authorities................................................ 14
1. General............................................ 14
2. Federal and State Law.............................. 14
Section 4.10. Legal Proceedings..................................... 14
A. No Outstanding Judgments................................... 14
B. Pending or Threatened Litigation or Proceedings............ 14
C. Permits and Payments....................................... 15
Section 4.11. Taxes and Tax Returns................................. 15
Section 4.12. Insurance............................................. 16
Section 4.13. Adequacy of Authorities, Etc.......................... 17
A. Existence and Validity..................................... 17
B. Full Force................................................. 17
C. Enforceability............................................. 17
Section 4.14. Unfulfilled Commitments............................... 17
Section 4.15. Assumed Name.......................................... 17
Section 4.16. Personnel............................................. 17
Section 4.17. Employment Contracts and Benefits..................... 18
Section 4.18. Shareholders Directors and Officers................... 18
Section 4.19. No Other Commitment to Sell........................... 18
Section 4.20. Enforceability........................................ 19
Section 4.21. Commissions........................................... 19
Section 4.22. Patents, Trademarks, Licenses, Etc.................... 19
Section 4.23. Disclosure............................................ 19
ARTICLE V. COVENANTS OF BRANSON AND EXCHANGING SHAREHOLDERS............. 20
Section 5.1. Affirmative Covenants Pending Closing................. 20
A. Access..................................................... 20
B. Conduct of Business........................................ 20
C. Preservation of Business................................... 20
D. Corporate Matters.......................................... 20
E. Maintenance of Insurance................................... 20
F. Employees and Compensation................................. 21
G. New Transactions........................................... 21
H. Dividends, Distributions and Acquisitions of Shares........ 21
I. Liabilities and Waiver of Claim............................ 21
J. Existing Agreements........................................ 21
K. Consents................................................... 21
Section 5.2. Exception............................................. 22
ARTICLE VI. REPRESENTATIONS, WARRANTIES AND COVENANTS OF AGTI........... 22
Section 6.1. Authority............................................. 22
Section 6.2. Commissions........................................... 22
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Section 6.3. No Breach; Consents................................... 22
Section 6.4. Litigation............................................ 22
Section 6.5. Acquisition for Investment............................ 23
Section 6.6. Consents, Etc......................................... 23
Section 6.7. Exchange Shares....................................... 23
Section 6.8. Organization, Good Standing and Approval.............. 23
Section 6.9. Capitalization and Title to Shares.................... 23
Section 6.10. Financial Statements.................................. 24
Section 6.11. Undisclosed Liabilities............................... 24
A. Permitted Encumbrances..................................... 24
B. Indebtedness............................................... 24
C. Economic, Property or Personal Liability................... 25
Section 6.12. Absence of Conflicting Agreements or Required Consents 25
Section 6.13. Title to and Condition of AGTI Property............... 25
A. Title and Encumbrances..................................... 25
B. Realty; Leases............................................. 26
C. Contracts, Authorities, Etc................................ 26
D. Subsidiaries............................................... 27
Section 6.14. Compliance with Laws.................................. 27
A. Notice of Non-Compliance................................... 27
B. Defaults................................................... 27
C. Governmental Regulations................................... 27
D. Federal and State Law...................................... 28
Section 6.15. Taxes and Tax Returns................................. 28
Section 6.16. Insurance............................................. 29
Section 6.17. Adequacy of Authorities, Etc.......................... 29
A. Existence and Validity..................................... 29
B. Full Force................................................. 29
C. Enforceability............................................. 29
Section 6.18. Unfulfilled Commitments............................... 30
Section 6.19. Assumed Name.......................................... 30
Section 6.20. Employment Contracts and Benefits..................... 30
Section 6.21. Directors and Officers................................ 30
Section 6.22. Enforceability........................................ 31
Section 6.23. Patents, Trademarks, Licenses, Etc.................... 31
Section 6.24. Disclosure............................................ 31
Section 6.25. Affirmative Convenants Pending Closing................ 31
A. Access..................................................... 31
B. Conduct of Business........................................ 31
C. Preservation of Business................................... 32
D. Corporate Matters.......................................... 32
E. Maintenance of Insurance................................... 32
F. Employees and Compensation................................. 32
G. New Transactions........................................... 32
H. Dividends, Distributions and Acquisitions of Shares........ 32
I. Liabilities and Waiver of Claim............................ 33
J. Existing Agreements........................................ 33
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ARTICLE VII. CONDITIONS PRECEDENT........................................ 33
Section 7.1. Conditions Precedent to AGTI's Obligations
to Consummate the Exchange............................ 33
X. Xxxxxxx Stock Transfer..................................... 33
B. Compliance................................................. 33
C. Representations, Warranties and Covenants.................. 33
D. No Changes................................................. 34
E. Corporate Approval......................................... 34
F. Termination of Shareholder Agreements...................... 34
G. Outstanding Branson Stock.................................. 34
Section 7.2. Deliveries Precedent to AGTI's Obligations
to Consummate the Exchange...................................... 34
A. Conveyances and Other Documents............................ 34
B. Certificate of Exchanging Shareholders..................... 34
C. Post-Closing Agreements.................................... 35
D. Consents................................................... 35
E. Release.................................................... 35
F. Legal Opinion.............................................. 35
G. FIRPTA Certificate......................................... 36
H. Stock Offering............................................. 36
Section 7.3. Conditions Precedent to the Obligations of the
Exchanging Shareholders to Consummate the Exchange ... 36
A. Compliance................................................. 36
B. Representations, Warranties and Covenants.................. 37
C. Certificate................................................ 37
D. Legal Opinion.............................................. 37
Section 7.4. Conditions to All Parties' Obligation to
Consummate the Exchange......................................... 37
A. Value of Branson........................................... 37
B. Employment Agreements...................................... 37
C. Major Decisions............................................ 37
D. Separate Business Units.................................... 38
Section 7.5. Post-Closing Undertakings............................. 38
ARTICLE IX. POST-CLOSING OBLIGATIONS.................................... 39
ARTICLE X. GENERAL PROVISIONS........................................... 40
Section 10.1. Statements Deemed Representations..................... 40
Section 10.2. Survival.............................................. 40
Section 10.3. Exchanging Shareholders' Agreement to Indemnify....... 40
A. Indemnification............................................ 40
B. Limitation of Liability.................................... 40
C. Conditions of Indemnification.............................. 41
D. Non-exclusivity............................................ 42
Section 10.4. AGTI's Agreement to Indemnify......................... 42
A. Indemnification............................................ 42
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B. Limitation of Liability.................................... 42
C. Conditions of Indemnification.............................. 43
D. Non-exclusivity............................................ 43
E. Representative............................................. 43
Section 10.5. Additional Conveyances................................ 43
Section 10.6. Notices............................................... 43
Section 10.7. Assignment or Substitution............................ 44
Section 10.8. Several Obligations of Exchanging Sh-
areholders...................................................... 44
Section 10.9. Applicable Law and Remedies.......................... 44
Section 10.10. Taxes and Expenses................................... 45
Section 10.11. Parties in Interest.................................. 45
Section 10.12. Waiver............................................... 45
Section 10.13. Entire Agreement; Alteration or Amendment............ 45
Section 10.14. Captions............................................. 45
Section 10.15. Counterparts......................................... 45
Section 10.16. Approval of Documents................................ 45
Section 10.17. Expenses of Enforcement.............................. 46
Section 10.18. Compliance with Conditions........................... 46
Section 10.19. Materiality.......................................... 46
Section 10.20. Pronouns and Terms................................... 46
Section 10.21. Severability......................................... 46
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT (herein "Agreement") is made as of June 1, 1995, by and
among BRANSON SIGNATURE RESORTS, INC., a Nevada corporation with its principal
executive office in Branson, Missouri ("Branson"); ADVANCED GAMING TECHNOLOGY,
INC., a Wyoming corporation with its principal business office in Vancouver,
Province of British Columbia, Canada ("AGTI"); and the shareholders of Branson
who shall execute and deliver this Agreement and thereby agree to be bound by
the terms hereof (each herein an "Exchanging Shareholder" and sometimes
collectively herein the "Exchanging Shareholders"); Branson, Exchanging
Shareholders and AGTI sometimes collectively herein the "Parties."
RECITALS
X. Xxxxxxx and AGTI previously have entered into a letter agreement dated
November 30, 1994, together with an addendum thereto dated on or about January
31, 1995, which concerns the subject matter of this Agreement.
B. The Exchanging Shareholders own the issued and outstanding shares of
the capital stock of Branson set forth in Exhibit A (as may be amended from time
to time), which collectively constitute the percentage of the issued and
outstanding capital stock of Branson set forth in said Exhibit A (the "Branson
Stock").
X. Xxxxxxx owns, either directly or indirectly, the "Branson Property" (as
defined in Section 1.3), together with all licenses, permits and charters,
franchises and other rights necessary to engage in the destination resorts
development, management and operations business in the jurisdiction(s) in which
it currently operates and conducts business or in which any of the Property is
located (the "Branson Business").
D. AGTI desires to acquire, and the Exchanging Shareholders desire to
transfer, the Branson Stock; provided that, AGTI shall acquire not less than
ninety percent (90%) of the issued and outstanding capital stock of Branson on
the "Closing Date" (as hereinafter defined) and, through such ownership of
Branson, a pro rata indirect ownership interest in all rights, title and
interests in and to the Branson Property and Branson Business on the terms and
subject to the conditions contained in this Agreement.
E. The Parties desire to consummate the transaction described in this
Agreement as a tax-free type "B" reorganization under the United States Internal
Revenue Code of 1986, as amended.
NOW, THEREFORE, the Parties, intending to be legally bound, and for and in
consideration of the mutual covenants, agreements, representations and
warranties contained in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which are mutually acknowledged,
agree as follows:
ARTICLE I
EXCHANGE OF SHARES
Section 1.1. Plan of Reorganization. The Parties adopt this Agreement as a
Plan of Reorganization governed by Section 368(a)(1)(B) of the United States
Internal Revenue Code of 1986, as amended, and applicable Treasury Regulations
issued pursuant thereto.
Section 1.2. Exchange of Stock. Subject to the terms and conditions set
forth in this Agreemen , at the "Closing" (as defined in Section 3.1) each
Exchanging Shareholder agrees to exchange, convey, transfer, assign and deliver
all Branson Stock owned by such Exchanging Shareholder to AGTI in exchange for
the "AGTI Exchange Shares" (as defined in Section 2.1), and AGTI agrees to
accept the same, all such Branson Stock to be free and clear of any and all
liens, charges, claims or encumbrances of any kind, nature or quantity
whatsoever, with the certificates representing such Branson Stock duly endorsed
for transfer in blank, or with properly executed stock transfer powers, with
signature guarantees thereon.
Section 1.3. Ownership of All Property and the Entire Business" of Branson.
The Parties intend that, by AGTI's acquisition of the Branson Stock as set forth
in this Agreement, AGTI shall acquire proportionate ownership interest in
Branson which, as of the date of this Agreement, owns (directly or indirectly
through Branson's subsidiaries) good, sufficient and marketable title in and to
all the Branson Property, and any other assets, rights, privileges and interests
related to and now owned and used or held for use in the operation of the
Branson Business of whatever source, nature, kind or quality and wherever
located, together with any of the same as may have been subsequently acquired
prior to the Closing Date, provided, however, that such of the "Excluded Branson
Property" (as defined in Section 1.5) that shall have been conveyed or otherwise
disposed of prior to the Closing as permitted by this Agreement shall not be
required to be owned directly or indirectly by Branson at the Closing Date.
The properties, assets, rights, privileges and interests owned (directly or
indirectly) and to be owned at Closing by Branson include, but shall not be
limited to:
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A. Assets. All fixed or tangible or corporeal moveable assets now
owned (directly or indirectly through Branson's subsidiaries) or hereafter
acquired to the Closing Date, including, but not limited to, all
automobiles, other vehicles and motorized or moveable equipment, machinery,
equipment, furniture, supplies; all computer hardware and software; all
buildings and improvements (not otherwise included as "Branson Realty" [as
defined in Section 1.2.C]); all cash on hand and on deposit; all accounts
and other investments; all drawings, blueprints, plats, plans and
specifications relating to the facilities and developments of the Business;
all inventories of materials and supplies of whatever kind, quantity or
nature; and all other tangible personal property, assets and equipment
owned and used or usable by Branson (or its subsidiaries) in connection
with the Branson Business (all collectively herein the "Branson Assets").
The material Branson Assets are described generally in Exhibit B attached,
and include those included in the financial statements constituting Exhibit
F.1 attached, excluding those disposed of in the normal course of business
subsequent to the date of such financial statements or such other
dispositions otherwise disclosed and consented to by AGTI, and including
those acquired after the date of such financial statements (including any
to be acquired pursuant to an agreement described in Exhibit K).
B. Interests. All rights, privileges, benefits and interests under any
and all contracts, agreements, partnership, limited liability company or
joint venture agreements, franchises, consents, insurance policies, or
licenses, permits or certificate. (except those included as Branson
Authorities [as defined in Section 1.3.D]), including, but not limited to,
computer software licenses; agreements and permits or lease arrangements
(or rights thereunder) with respect to intangible, personal or real
property or interests therein; consents, licenses, authorities,
certificates; agreements with suppliers, purchasers and agents; statements,
filings and submissions with governmental agencies; business and other
licenses and prepaid expenses, and all claims and rights relating to any of
the Branson Business; the rights to the use of any and all names or marks
(including, without limitation, all trademarks, trade names and logos used
prior to Closing with respect to the Branson Business); and any and all
management or agency agreements or arrangements of, or pertaining to any
of, the Branson Business, and all other agreements, approvals, consents and
authorizations used or owned in connection with the Branson Business,
whether intangible, personal, real or mixed, owned (directly or indirectly
through Branson's subsidiaries) by Branson and used or usable by reason of,
or in connection with, any of the Branson Business (collectively herein the
"Branson Interests"). All of the material Branson Interests are identified
and set forth on Exhibit C attached.
C. Realty. All real property (or mixed real and personal property)
owned (directly or indirectly through the Branson
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subsidiaries) by Branson and used or held for use by reason of, or in
connection with, any of the Branson Business, including, but not limited
to, land, structures, buildings, easements, servitudes or licenses and
agreements or arrangements or leases (or rights thereunder) with respect to
real property or interests therein, development agreements, leasehold
improvements, building improvements, other improvements, fixtures and
rights-of-way and any other or similar properties, which are described in
or relate to any of the properties and interests described in said exhibit
(collectively herein the "Branson Realty"). All of the material Branson
Realty is identified and set forth on Exhibit D attached.
D. Authorities. All authorities (including, but not limited to, all
prior and current modifications and amendments thereto, proposals, requests
and applications therefor, submissions or filings in connection therewith,
acceptances and transfers thereof, all orders, enactments or resolutions,
if any, pursuant to which the authorities may have been originally issued
or subsequently modified, reissued or transferred and all prior and current
transfers and acceptances thereof and consents thereto), permits, consents,
licenses, franchises, and agreements or arrangements creating or setting
forth obligations, rights, privileges or interests issued, granted or
undertaken by or with persons or entities used or held for use by reason
of, or in connection with, the Branson Business, including, but not limited
to, governmental or quasi-governmental authorities or others, to establish,
maintain or operate the Branson Business, and all similar items owned
(directly or indirectly through Branson's subsidiaries) by Branson
(collectively herein the "Branson Authorities"). All of the material
Branson Authorities are identified and described on Exhibit E attached.
E. Property. As used in this Agreement, "Branson Property" means
collectively the Branson Assets, the Branson Interests, the Branson Realty
and the Branson Authorities, excluding (i) the Excluded Branson Property
(as defined in Section 1.5), (ii) any Branson Property disposed of in the
ordinary course of business following the date of this Agreement, and (iii)
any Branson Property not disposed of in the ordinary course of business,
but disclosed and consented to by AGTI, and including any property or asset
acquired by Branson or its subsidiaries subsequent to the date of this
Agreement and set forth in the records of Branson.
Section 1.4. Liabilities, Obligations and Contracts. Except as set forth in
Exhibit F, and subject, however, to (i) the restrictions, exceptions,
reservations, conditions, limitations, interests and other matters, if any, set
forth or referenced in the specific descriptions set forth in Exhibits B, C or D
or the records of Branson; and (ii) the liens, encumbrances or security
interests of any lender permitted pursuant to the provisions of this Agreement,
all of the Branson Property to be transferred
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indirectly to AGTI in connection with the transactions contemplated by this
Agreement shall be free and clear of any and all liens, claims, security
interests or encumbrances of whatever kind, quantity or nature, excluding,
however, for this purpose any inchoate tax liens, undetermined or inchoate
materialmen's, mechanics', workmen's, repairmen's or employees' liens or other
like liens arising in the ordinary course of business, whether accrued,
absolute, contingent or otherwise or any arising under or pursuant to
indebtedness described, set forth or accounted for in the financial statements
of Branson (on a consolidated basis) and its subsidiaries referred to in Section
4.5 of this Agreement or otherwise described in the exhibits hereto.
Section 1.5. Excluded Property. The property described in Section 2.2.A of
this Agreement shall be excluded for purposes of Section 1.3 of this Agreement
when transferred to the person or persons entitled thereto in compliance with
the provisions of such section ("Excluded Branson Property").
ARTICLE II
AGTI EXCHANGE SHARES, OTHER TRANSFERS AND OBLIGATIONS
Section 2.1. AGTI Exchange Shares.
At the Closing but subject to the terms and conditions of this Agreement,
AGTI shall deliver 8,500,000 shares of its authorized but unissued (or treasury
stock) common stock, $0.005 par value at a deemed value, of $1.00 per share, for
each share of the issued and outstanding common stock, $0.001 par value, of
Brans n (i.e., the Branson Stock) delivered by the Exchanging Shareholders. The
Exchanging Shareholders shall deliver to AGTI not less than ninety percent (90%)
of the issued and outstanding capital stock of Branson as of the Closing Date.
It is the intent of the Parties that the shareholders of Branson exchanging
their Branson Stock for AGTI Exchange Shares shall own in the aggregate not more
than thirty-seven percent (37%) of the issued outstanding capital stock of AGTI
at the Closing (taking into account the issuance of the AGTI Exchange Shares)
assuming that shareholders of Branson shall have tendered to AGTI 100% of the
issued and outstanding capital stock of Branson pursuant to this
Agreement(herein the "Branson Shareholder AGTI Ownership Percentage"). If less
than 100% (but at least 90%) of the issued and outstanding capital stock of
Branson is tendered to AGTI pursuant to this Agreement, then the Branson
Shareholder AGTI Ownership Percentage shall be deemed reduced to an equivalent
percentage of 37%. The aggregate number of shares of AGTI's common stock, $0.005
par value, to be issued in exchange for the Branson Stock is referred to in this
Agreement as the "AGTI Exchange Shares."
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Section 2.2. Other Transfers and Obligations.
A. Excluded Property. The Excluded Property is designated on Exhibit
B1, which i a part of Exhibit X. Xxxxxxx shall convey the Excluded Property
to the persons described in said Exhibit B1.
ARTICLE III
CLOSING PROVISIONS
Section 3.1. The Closing and Closing Provisions. The closing of the
exchange of the Branson Stock for the AGTI Exchange Shares contemplated by this
Agreement (the "Closing") shall take place on or before 5:00 p.m., July 15, 1995
(the "Closing Date"), at a location to be agreed upon by the parties prior to
the closing, or such other date and time or location as the Parties may
otherwise later agree.
Section 3.2. Deliveries by Exchangi g Shareholders at the Closing. At the
Closing, the Exchanging Shareholders shall deliver (or cause to be delivered)
the following to AGTI:
X. Xxxxxxx Stock Certificates. Certificates, endorsed in blank by each
Exchanging Shareholder, or with appropriate and separate attached stock
transfer powers properly signed, with signature guarantees by a commercial
bank or stock brokerage company attached, representing all of the issued
and outstanding shares (of whatever character) of the capital stock of
Branson owned by each such Exchanging Shareholder.
B. Conditions Precedent. Any consent, certificate, list, document,
instrument or other matter designated as a condition precedent under
Sections 7.1 and 7.2 of this Agreement.
C. Miscellaneous. All filings and submissions to any governmental
agency, indentures, agreements, contracts, mortgages, leases, licenses,
files, correspondence, memoranda, other documents of like character, books
and records, papers and all other documents or instruments or things
pertaining to the Branson Business made, created or filed prior to the
Closing Date.
D. Corporate Records. Complete and correct copies (or when available,
originals) of Branson's and its subsidiaries' articles of incorporation,
bylaws (all as amended to the Closing Date), stock transfer books,
corporate minute books, books of account and ot er financial records, tax
returns, reports and documents, all corporate seals, keys, safe
combinations, and similar items, and all certificates of title,
certificates of deposit, passbooks, checkbooks, bank records, paid
invoices, bonds, insurance policies, bills of sale, deeds, assignments,
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conveyances and any and all evidence of title, and all other papers,
documents or instruments or things similar or dissimilar to those referred
to herein of or pertaining to Branson, its subsidiaries, the Branson
Property, the Branson Interests or the Branson Business. Delivery of such
records and other documents, instruments or items shall be considered made
as long as such records are located in the principal office(s) of or at an
on-site construction office of, Branson or its subsidiaries on the Closing
Date. Following the Closing, AGTI agrees that Branson may provide any of
Exchanging Shareholder, at such Exchanging Shareholder's expense, with
unrestricted access to original records, documents, instruments and items
of Branson (or its subsidiaries) existing at the Closing Date during normal
business hours upon reasonable notice setting forth a proper purpose
therefor) by such Exchanging Shareholder to Branson from time to time
deemed necessary for a period of three 13) years following the Closing
Date.
Section 3.3. Deliveries by AGTI at the Closing. At the Closing, AGTI shall
deliver to the Exchanging Shareholders (i) the AGTI Exchange Shares, and (ii)
the documents, certificates, items and, other matters designated as conditions
precedent under Section 7.3, all in the manner and orm provided for in this
Agreement.
Section 3.4. Deliveries by Branson. At the Closing (or in conjunction
therewith) or thereafter as required by this Agreement, Branson shall deliver to
appropriate persons (or assigns), (i) appropriate assignments for the Excluded
Property, ii) any certificate, consent, list, document, instrument or other
matter designated as a condition precedent under Section 7.2 of this Agreement.
Section 3.5. Exhibit Deliveries. The Parties acknowledge that it is not
feasible to attach Exhibits C, E and G through O for Branson and Exhibits AA
through II for AGTI at the date of this Agreement. Such exhibits will be
prepared by Branson AGTI respectively within forty-five (45) days following the
Closing. Upon approval of such exhibits by all Parties, they shall be . attached
to this Agreement, and, upon their attachment, shall be deemed effective for all
purposes of this Agreement as of the date of this Agreement notwithstanding
their attachment at a later date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BRANSON AND
EXCHANGING SHAREHOLDERS
Branson and each (severally and not jointly) Exchanging Shareholder
represents and warrants as to the following:
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Section 4.1. Organization, Good Standing and Approval. Branson and each of
its subsidiaries are duly organi ed, validly existing and in good standing under
the laws of the state of its organization. Branson and each subsidiary of
Branson is qualified to do business and in good standing in each jurisdiction in
which its activities require it to be so qualified if material to the Branson
Business. Branson and each subsidiary of Branson has all necessary power and
authority to own, lease, and operate its properties and assets and to engage in
the business which is contemplated by Branson as and in the places where its
property and assets are owned, leased, or operated or where such business is
being or is to be conducted. Branson and its subsidiaries have no business other
than owning and operating the Branson Business.
Section 4.2. Capitalization and Title Shares. As of the closing, the
authorized capital stock (of whatever class or character) of Branson consists of
100,000,000 common shares, $.001 par value, of which 9,000,000 shares currently
are issued and outstanding. All such issued and outstanding shares have been
issued fully paid and nonassessable. Except for shares held by Branson as
treasury stock, Branson's issued and outstanding capital stock owned by an
Exchanging Shareholder, beneficially and of record, is set forth opposite such
shareholder's name in Exhibit A attached. All of the shares of Branson Stock are
validly issued, fully paid and non-assessable, and are free and clear, or on or
before the Closing Date shall be free and clear of any and all liens,
encumbrances, obligations, options, commitments, restrictions, charges and
claims of whatever kind, nature or quantity whatsoever. The Branson Stock is not
subject to any restrictions or limitations prohibiting or restricting transfer,
other than restrictions on transferability imposed generally on securities by
federal and state securities laws or shareholder agreements among the Exchanging
Shareholders and Branson previously disclosed to AGTI or in the exhibits to this
Agreement, none of which will prevent the transactions contemplated by this
Agreement. There are no outstanding subscriptions, options, rights, puts, calls,
warrants, convertible securities or other agreements or commitments obligating
Branson to issue or to transfer from treasury any additional shares of its
capital stock of any class. Such Exchanging Shareholder has, or shall have on
the Closing Date, full legal right, power and authority to sell, transfer and
deliver his/her/its shares of Branson Stock to AGTI in exchange for AGTI
Exchange Shares. No action is pending or has been threatened against such
Exchanging Shareholder's ownership of, or right to transfer, the Branson Stock
set forth opposite such shareholder's name in Exhibit A attached. The delivery
of the Branson Stock to AGTI pursuant to the provisions of this Agreement will
transfer valid title and full legal and beneficial ownership to all of such
shares of Branson Stock owned by such Exchanging Shareholder as and in the kind,
nature, quantity, quality and condition required by this Agreement.
-8-
Section 4.3. Ownership and Authority. Such Exchanging Shareholder is the
legal and beneficial owner of the Branson Stock, set forth opposite his/her/its
name in Exhibit A, free and clear of any claims, liens or encumbrances of any
kind, nature or quantity whatsoever. Such Exchanging Shareholder has full right,
power, legal capacity and authority to enter into and perform his/ her/its
obligations under this Agreement. The execution and delivery of this Agreement
by such Exchanging Shareholder has been duly authorized, and the provisions of
this Agreement are binding upon and enforceable against such Exchanging
Shareholder. Except as set forth on Exhibit A, for purposes of the transactions
contemplated by this Agreement, such Exchanging Shareholder is a citizen or tax
resident of the United States for purposes of Sections 897 and 1445 of the Code
(as defined in Section 4.11).
Section 4.4. Branson Subsidiaries. The only subsidiaries of Branson are
Branson Bluffs Resorts, Inc., a Missouri corporation ("Branson Bluffs"), and
River Oaks Resort and Country Club, Inc., a Texas corporation ("River Oaks").
The authorized capital stock (of whatever class or character) of Branson Bluffs
consists of 30,000 shares of common stock, no par value, of which 30,000 shares
are issued and outstanding, and all of which are owned (or will be owned at
Closing) by Branson, free and clear of any liens, claims or encumbrances of any
kind, nature, quality or quantity whatsoever except transfer restrictions as may
be imposed pursuant to federal or applicable state securities laws generally.
The authorized capital stock (of whatever class or character) of River Oaks
consists of 1,000,000 shares, $1.00 par value, of which 1,000 shares are issued
and outstanding, and all of which are owned (or will be owned at Closing) by
Branson, free and clear of any liens, claims or encumbrances of any kind,
nature, quality or quantity whatsoever except transfer restrictions as may be
imposed pursuant to federal or applicable state securities laws generally.
Section 4.5. Financial Statements. The financial statements for Branson on
a consolidated basis with its subsidiaries attached as Exhibit F.1 are, and will
be, true, correct and complete statements of the financial condition, assets and
liabilities, and all reserves and accruals of Branson as of the dates and for
the periods covered, and they fairly present, in all material respects, the
financial condition of Branson for the period or periods covered and all of them
were prepared in accordance with generally accepted accounting principles on a
consistent basis with that of prior periods. Between the date(s) of such
financial statements and the date of this Agreement, there has not been (i) any
material adverse change in the condition, financial or otherwise, of Branson,
the Branson Business or the Branson Property, except as set forth on Exhibit F.2
or covered by subclause (iii) below, (ii) any damage, destruction or loss,
whether or not covered by insurance, that materially and adversely affects
Branson or the Branson Business, (iii) any disposition or
-9-
acquisition of any material Branson Property other than in the normal course of
business or otherwise disclosed to AGTI.
Section 4.6. Undisclosed Liabilities.
A. Permitted Encumbrances. Except as set forth or described in Exhibit
G, as of the Closing there shall be n liens or encumbrances of any kind,
nature or quantity whatsoever, directly, indirectly, actually or
purportedly burdening, encumbering or pertaining to the Branson Business or
the Branson Property.
B. Indebtedness. Other than items (i) specified in the exhibits
pertaining to either Branson or the Exchanging Shareholders in this
Agreement, (ii) incurred pursuant to contracts, agreements or other
commitments listed, described or referred to in the exhibits pertaining to
either Branson or the Exchanging Shareholders in this Agreement, or (iii)
of a type described in or referred to in any provision of this Agreement
but not set out in the exhibits pertaining to either Branson or the
Exchanging Shareholders in this Agreement, Branson does not have any debts,
liabilities or obligations of any nature, kind or quantity, whether
accrued, absolute, contingent or otherwise and whether due or to become
due, known or unknown, except:
1. To the extent set forth on or reserved against in the balance
sheet of Branson dated as of May 31, 1995;
2. Liabilities incurred since such balance sheet date and
obligations under agreements entered into in the ordinary course of
business; and
3. Items that will not req ire payments by Branson in excess of
Two Hundred Thousand Dollars ($200,000.00) in the aggregate, within
forty-five (45) days following the date of this Agreement.
C. Economic, Property or Personal Liability. Except as summarized in
Exhibit H, neither such E changing Shareholder nor Branson has any
knowledge of any fact, circumstance or occurrence which has given or might
give rise to any material liability, obligation or claim for economic,
property or personal injury or harm to any person, entity or property
against Branson.
Section 4.7. Absence of Conflicting Agreements or Required Consents. The
execution, delivery and consummation of this Agreement and the transactions
contemplated hereby are not prohibited by, and will not conflict with,
constitute grounds for termination of, or result in a breach of, the terms,
conditions or provisions of, or constitute a default under:
X. Xxxxxxx'x articles of incorporation, bylaws or other organizational
or constating documents; or
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B. Any other agreement or instrument to which such Exchanging
Shareholder or Branson is now a party, or to which such Exchanging
Shareholder or Branson or any of the Branson Business or the Branson
Property is subject or bound, including, without limitation, any of the
Branson Authorities or any Branson Interest. Except for governmental
authorities from time to time hereafter generally applicable to the Branson
Business, all approvals and consents required to consummate the
transactions contemplated by this Agreement have been obtained, or such
Exchanging Shareholder and Branson, in good faith, believe they will be
obtainable within a reasonable period following the date of this Agreement.
Neither the ownership, use nor conduct of any of the Branson Business
conflicts with any rights, whether arising out of contract or otherwise, of
any other person or entity.
Section 4.8. Schedule of, Title to, and Condition of Branson Property.
Branson (including its subsidiaries) has no assets, properties or interests
which it owns, or which is used, reasonably held for use or available for use in
connection with the Branson Business which are not set forth in the exhibits or
schedules or otherwise described in Article I. The Branson Assets, Branson
Interests, Branson Realty and Branson Authorities are respectively summarized,
subject to any express exclusions, in Exhibits B, C, D and E attached. Branson
(or its subsidiaries) owns, and at Closing shall own, without material
exception, all Branson Realty, in the form of real property owned in fee or
merchantable title or valid and binding rights, licenses, permits, easements or
rights-of-way for periods of time sufficient for the purpose of the conduct and
operation of the Branson Business.
A. Title and Encumbrances. Except as set forth in or in connection
with indebtedness described in Exhibit G, no financing statement, deed of
trust, chattel or other mortgage, or other security instrument or device,
or notice of any thereof, under the aws of any jurisdiction with respect to
any of the Branson Business or the Branson Property has been filed or
recorded in any jurisdiction; and Branson has not executed, nor has any
person or entity executed on behalf of Branson, any document or instrument
authorizing any secured party thereunder to file any such financing
statement, mortgage, deed of trust statement or other security device or
instrument or notice of any thereof.
B. Realty; Leases. A summary of the Branson Realty is set forth in
Exhibit D. Except for the Branson Bluffs' property previously disclosed to
AGTI, all such interests are valid, subsisting, binding and enforceable by
Branson and there is no material default or breach by Branson or, to the
knowledge of such Exchanging Shareholder or Branson, by the other party or
parties thereto nor has any event occurred that, with the passage of time
or the giving of notice, or both, would become a material breach
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or default, except as set forth in Exhibit D. With respect to Branson
Realty:
i) Branson has not received any notice of the exercise of eminent
domain or condemnation which may affect any of its material real
property in any way, or any notice regarding the annexation of all or
any of such property, and, to the best knowledge and belief of
Branson, no such action is pending or threatened.
ii) No material part thereof is subject to any preferential right
of purchase in favor of any other person.
iii) Branson has no knowledge of any material structural defects
or deficiencies or any subsurface or soil problems related to any
material real property or improvement. The material HVAC, electrical
and other operating systems within or about any improvements have been
maintained in a good and workmanlike manner and are in good working
order and condition normal wear and tear excepted.
iv) Branson has no knowledge of, nor has Branson released or caus
d to be released, any hazardous substances on, about or from any part
of the Branson Realty. To the best knowledge of Branson, Branson and
its subsidiaries are in compliance with all environmental laws and
regulations, except to the extent such non-compliance would not have a
material adverse affect on the financial condition of Branson or any
of the material Branson Realty. For purposes of this agreement,
"environmental laws" means all or any federal, state or local
statutes, ordinances, regulations or other similar governmental
promulgations relating to the environment or to emissions, discharges,
releases, actual or threatened, of hazardous wastes or substances into
the environment. For this purpose, "hazardous wastes or substances"
refers to pollutants, contaminants, chemicals, or industrial toxic or
hazardous wastes or substances regulated by or subject to any
environmental law.
C. Contracts, Authorities, Etc. All presently existing contracts,
agreements, licenses, permits, Branson Authorities, applications, consents,
commitments, insurance policies, easements, servitudes, leases,
rights-of-way, understandings or other arrangements creating or setting
forth obligations, liabilities, rights, privileges or interests, whether
written or oral, expressed or implied, connected with or relating to the
Branson Business, are either:
i) agreements, commitments, obligations or understandings, which
if written, are listed in the exhibits referred to in this Secti n
4.8, and true and complete copies have been made available to AGTI or,
if oral and material to
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be the Branson Business, their terms are described and summarized in
the exhibits referred to in this Section 4.8; or
ii) miscellaneous service or other contracts or agreements, all
of which are terminable at will or upon notice of not more than sixty
(60) days without penalty or other liability of any kind.
Branson (or its subsidiaries), has complied in all material respects with
all material provisions of such agreements and arrangements required to be
complied with by Branson (or its subsidiaries) in connection with the
Branson Business or the Branson Property. All payments required thereunder
are current, and there are no material breaches or defaults thereunder in
any respect. No event has occurred, which upon the giving of notice or
lapse of time, or both, would constitute any such material breach or
default. All of such agreements have been duly executed and delivered, and
are now, and at Closing shall be, valid, binding upon, and enforceable by
Branson (or its subsidiaries) in accordance with their respective terms.
True and complete copies of all documents referred to or covered by this
Section 4.8 which have not been previously made available to AGTI will be
made available promptly to AGTI upon request or upon discovery that they
have not been previously made available to AGTI.
D. Bank Accounts. Exhibit H identifies all accounts and safety deposit
boxes with banks or other financial institutions maintained by or on behalf
of Branson or its subsidiaries, together with the authorized signatories
for such accounts or boxes.
E. Subsidiaries. Branson does not own, directly or indirectly, any
interest or investment, whether equity or debt, in any corporation,
partnership, company, trust or other entity other than as set forth in
Exhibit B attached or described in Section 4.4 above.
Section 4.9. Compliance with Laws. Branson (and its subsidiaries) has
complied and will continue to the Closing to comply in all material respects
with all applicable material federal, state and local laws, rules and
regulations, and with all material, pertinent provisions of the Branson
Interests and agreements or arrangements pertaining to any of the Branson Realty
or the Branson Authorities.
A. Notice of Non-Compliance. Branson has not received any notice,
written or oral, asserting noncompliance in any material respect with
applicable laws, rules or regulations of the United States of America, any
state, county, municipality, or other political subdivision or any agency
thereof having jurisdic-
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tion over Branson, its subsidiaries or any of the Branson Business or the
Branson Property.
B. Defaults. Neither Branson (or its subsidiaries) nor such Exchanging
Shareholder is in default with respect to any judgme t, order, injunction
or decree of any court, administrative agency or other governmental
authority in any respect material to the transactions contemplated by this
Agreement.
C. Governmental Regulations. There are no pending, or, to the best
knowledge of such Exchanging Shareholder or Branson after due inquiry,
threatened, administrative, judicial, investigative, inspection or other
proceedings involving the operation of any material part or portion of the
Branson Business or Branson Property, or Branson's operation or involvement
therewith.
D. Authorities.
1. General. Except as set forth in Exhibit E, no notice, written
or oral, of modification, cancellation, default or dispute of or
regarding any of the Branson Authorities has been received by Branson
or is known to either Branson or such Exchanging Shareholder. Branson
has not caused, suffered or permitted any breach or default to occur o
exist under or with respect to any of the Branson Authorities. To the
best of such Exchanging Shareholder's and Branson's knowledge, no
material ground, basis, circumstance or event exists for modification,
termination, suspension, restriction or limitation upon, or notice of
default with regard to, the rights or authority granted by or pursuant
to any of the Branson Authorities.
2. Federal and State Law. Branson has timely and properly filed
all reports and made all submissi ns known to be required under (i)
all material federal laws, and (ii) the material laws of the states
that are relevant to the conduct and operation of the Branson
Business. Branson and the Branson Business are in all material
respects in compliance with all such laws, rules and regulations.
Section 4.10. Legal Proceedings. Except as set forth in Exhibit I:
A. No Outstanding Judgments. There are no outstanding judgments
against such Exchanging Shareholder or Branson (or its subsidiaries)
encumbering or purporting to encum er any of the Branson Stock owned by
such Exchanging Shareholder, the Branson Business or the Branson Property.
B. Pending or Threatened Litigation or Proceedings. There is no
litigation or proceeding, including, without limitation, hearings,
nvestigations and inspections, known to such
-14-
Exchanging Shareholder or Branson to be pending or, to the best knowledge
of such Exchanging Shareholder or Branson, threatened against any such
Exchanging Shareholder or Branson in which Branson (or any of its
subsidiaries) is a party, or against the Branson Business or the Branson
Property, and which in the aggregate might result in a material adverse
change in the Branson Business, Branson, the Branson Property or the
prospects for or condition, financial or otherwise, of Branson or the
Branson Business, or which questions the validity of any action taken or to
be taken pursuant to or in connection with any of the provisions of this
Agreement. Neither such Exchanging Shareholder nor Branson has any
knowledge or information of incidents, circumstances or grounds that will
or might reasonably result in the institution of any such litigation or
proceedings in the reasonably foreseeable future.
C. Permits and Payments. The execution, delivery and consummation of
this Agreement will not affect: (i) the validity or e forceability of any
permit, license, approval, license fees, taxes or tax agreements, or any of
the Branson Authorities; or (ii) the operation of any of the Branson
Business.
Section 4.11. Taxes and Tax Returns. All taxes pertaining to Branson,
its subsidiaries or the Branson Business required to be paid prior to the date
of this Agreement by Branson, and all tax returns and documents required to be
filed or submitted prior to such date on behalf of Branson (subject to proper
extensions of time to file or pay), have been paid and properly and timely filed
or submitted and were truly and correctly completed. Branson shall pay and file
or submit in compliance with applicable law all taxes pertaining to Branson (or
its subsidiaries) and the Branson Business that accrue or are incurred from the
date of this Agreement to the Closing Date, together with all corresponding tax
returns and documents. To the knowledge of Branson, there are no audits pending
nor any outstanding agreements or waivers extending the statutory period of
limitations applicable to any tax or tax return or document for any period.
Branson has paid or caused to be paid all taxes which have become due pursuant
to all tax returns and has paid all installments of estimated taxes due (subject
to proper extensions of time to file or pay). All taxes and other assessments
and levies which Branson (or its subsidiaries) is required by law to withhold or
to collect have been duly withheld and collected, and have been paid over timely
to the proper governmental authorities or trustee to the extent due and payable.
Subsequent to the date hereof and prior to the Closing Date, all such returns
and reports shall be timely and accurately filed, and any tax payable as shown
thereby shall have been paid, as required by applicable law. There are no
determined tax deficiencies or proposed tax assessments known to Branson, or the
prospect for the same, against Branson or the Branson Business. Branson has made
available true, complete and correct information to AGTI with regard to any and
all taxes and tax
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returns, reports and documents referred to in this Section 4.11, including,
without limitation, Branson's liability for the payment, filing or submission
thereof. Branson has established (and until the Closing will establish) on its
books and records reserves that are reasonably believed to be adequate for the
payment of all taxes not yet due and payable, and there shall be no material
difference between the amounts of the book basis and the tax basis of assets
(net of liabilities) of Branson that are not accounted for by an accrual on the
books for federal income tax purposes and Branson has accounted for deferred
taxes in accordance with generally accepted accounting principles. There are no
liens for taxes upon the assets of Branson, except liens, claims or encumbrances
for taxes not yet due. No power of attorney has been granted with respect to or
involving Branson with respect to any matter relating to taxes which is
currently in force. Branson is not a party to any agreement or arrangement
providing for the allocation or sharing of taxes. Branson has not filed (and
shall not have filed prior to the Closing) a consent pursuant to Section 341(f)
of the Internal Revenue Code of 1986, as amended, including Treasury Regulations
issued thereunder (the "Code") or agreed to have Section 341(f)(2) of the Code
apply to any disposition of a subsection (f) asset (as such term is defined in
Section 341(f)(4) of the Code) owned by Branson. Branson is not required to
include in income any adjustment pursuant to Section 481(a) of the Code by
reason of a voluntary change in accounting method initiated with respect to
Branson, and Branson does not have knowledge that the Internal Revenue Service
has proposed or has the basis to propose any such adjustment or change in
accounting method. Branson is not a party to any agreement, contract or
arrangement that would result, separately or in the aggregate, in the payment of
any "excess parachute payments" within the meaning of Section 280G of the Code.
Branson is not required to file any returns or pay taxes in any jurisdiction
outside the United States. No election has been made with respect to Branson
which was set forth on a statement, form or schedule (other than a statement,
form or schedule with respect to depreciation) attached to a return and filed
separately. All transactions which could give rise to an understatement of
federal income tax (within the meaning of Section 6661 of the Code) with respect
to Branson are adequately disclosed (or, with respect to returns filed before
the Closing will be adequately disclosed) on the returns required in accordance
with Section 6661(b)(2)(B) of the Code.
Section 4.12. Insurance. Branson has, and shall continue to have through
the Closing, fire, theft, casualty and general liability insurance in full force
and effect, the continuation of which shall not be adversely affected by the
execution or delivery of this Agreement. Except as set forth in Exhibit J,
Branson has no unpaid claim under any such insurance and has received no notice
of termination of any such insurance. Branson currently has, and at Closing will
have, all bonds, insurance coverage or
-16-
insurance or surety arrangements in such amounts and providing such coverages as
required by, and in compliance with, all of the Branson Interests, Branson
Realty and Branson Authorities and applicable laws. All such bonding, insurance
and surety agreements or arrangements are set forth in Exhibit J.
Section 4.13. Adequacy of Authorities, Etc.
A. Existence and Validity. The Branson Authorities necessary for the
lawful operation of the Branson Business are listed in Exhibit X. Xxxxxxx
(or its subsidiaries) is curr ntly, and at the Closing shall be the valid
holder of each of the Branson Authorities. Branson (or one of its
subsidiaries) has all authorities that are necessary to carry on the
operation of the Branson Business.
B. Full Force. All of the material Branson Authorities are and shall
be at Closing in full force and effect in all material respects based on
their current terms and conditions.
C. Enforceability. All of the Branson Authorities have been duly
entered into and authorized and are validly issued and were obtained by or
transferred to and accepted by Branson (or one of its subsidiaries) in
accordance w th, and as required by the terms thereof and by applicable
law. All of the material Branson Authorities are valid, binding and legally
enforceable against third parties in accordance with their terms to the
fullest extent authorized by law.
Section 4.14. Unfulfilled Commitments. Branson has disclosed in Exhibit K
all existing unfulfilled promises or commitments (other than those set forth in
any agreement entered into in the usual and normal course of business) which
Branson has made, including, without limitation, those for capital expenditures,
assets or improvements, whether or not legally binding, which have been made or
offered in connection with any of the Branson Business or any of the Branson
Property, and including, without limitation, all construction and improvement
programs in progress, including the status and contemplated completion date. The
statements set forth in Exhibit K concerning the Branson Business and Branson
Property are true and complete in all material respects.
Section 4.15. Assumed Name. Branson has not owned the Branson Business or
held any of the Branson Property under any fictit ous or assumed business name
or trade name other than in its name, the names of its subsidiaries or those set
forth in Exhibit L attached.
Section 4.16. Personnel. Exhibit M is a list of the names and addresses of
all officers, directors, employees, agents and
-17-
other representatives of Branson and its subsidiaries. The number of Branson's
full-time and part-time employees at the date of this Agreement does not exceed
twenty (20).
Section 4.17. Employment Contracts and Benefits. Exhibit N to this
Agreement is a list of all employment contracts and collective bargaining
agreements and all pension, bonus, profit-sharing, stock option, or other
agreements or arrangements providing for employee remuneration or benefits to
which Branson (or its subsidiaries) is a party or by which Branson (or its
subsidiaries) is bound. All such contracts and arrangements are in full force
and effect (except at the Closing, those required to be terminated pursuant to
this Agreement or terminating prior to the Closing Date in accordance with their
terms), and neither Branson (or its subsidiaries, if a party) nor any other
party is in default under any of them. There have been no claims of default and,
to the best of Branson's knowledge, there are no facts or conditions that if
continued, or unnoticed, will result in a default under such contracts or
arrangements. There is no pending or, to Branson's knowledge, threatened labor
dispute, strike, or work stoppage affecting Branson or the Branson Business.
Branson has complied with all applicable laws for its employee benefit plans,
including the provisions of the Employee Retirement Income Security Act (ERISA),
if and to the extent applicable; there are no threatened or pendinq claims by or
on behalf of any such benefit plan, by or on behalf of any employee covered
under any such plan, or otherwise involving any such benefit plan, that allege a
breach of fiduciary duties or violation of other applicable state or federal
law, nor is there, to Branson's knowledge, any basis for such a claim. Branson
has not entered into any severance or similar arrangement in respect of any
present or former employee that will result in any obligation, absolute or
contingent, of AGTI or Branson (or its subsidiaries), to make any payment to any
present or former employee following termination of employment.
Section 4.18. Shareholders Directors and Officers. The shareholders,
directors, and officers of Branson for the present and previous two (2) fiscal
year periods, together with any owner or holder of rights or options to acquire
any capital stock of Branson, including those granted by Branson, any of its
subsidiaries or any Exchanging Shareholder, are set forth in the list of
Officers, Directors and Shareholders attached as part of Exhibit O.
Section 4.19. No Other Commitment to Sell or Exchange and Acquisition for
Investment. None of the following is directly or indirectly in any manner
subject to any written or oral commitment or arrangement, in whole or in part,
for sale, exchange, transfer, assignment or disposition, including, without
limitation, by operation of law or otherwise, other than as contemplated by this
Agreement: (a) the Branson Stock, or (b) the Branson Business or the Branson
Property. Such Exchanging Shareholder will acquire
-18-
the AGTI Exchange Shares to which such person is entitled under the terms of
this Agreement for such Exchanging Shareholder's individual account for
investment and not with a view to its public sale or distribution.
Section 4.20. Enforceability. The terms and provisions of this Agreement
and all instruments, documents, certificates and agreements made or delivered by
or on behalf of such Exchanging Shareholder or Branson by reason of the
transaction contempl xxx hereby constitute the valid and legally binding
obligations of such Exchanging Shareholder and Branson, and are enforceable
against such Exchanging Shareholder or Branson, respectively, in accordance with
the terms hereof and thereof, and constitute, or, upon their delivery, will
constitute, the valid and legally binding obligations of the parties thereto,
and each are, or, upon their delivery, will be enforceable in accordance with
the terms of this Agreement and thereof.
Section 4.21. Commissions. Neither such Exchanging Shareholder nor Branson
has en ered into any agreement, commitment or obligation with regard to any
brokerage commission or finder's fee in connection with negotiations leading up
to the execution of, or arising out of any of the transactions contemplated by,
this Agreement. AGTI shall not be liable, in whole or in part, for any brokerage
commission or finder's fee incurred by Branson or any Exchanging Shareholder in
connection with this Agreement or negotiations leading up to, or including, the
execution of this Agreement or arising out of this Agreement or any transaction
contemplated by this Agreement.
Section 4.22. Patents, Trademarks, Licenses, Etc. Branson does not own or
use any trademarks, trade names, service marks, patents, copyrights,
registrations and has no application therefor or licenses or rights thereto
except as set forth in Exhibit P. There is no violation or infringement of which
Branson knows or reasonably should know, caused by the conduct of Branson's
business, of any laws, statutes, ordinances or regulations or any right or
concession, patent, trademark, trade name, copyright, know-how or other
proprietary right of others, the enforcement of which would have a material
adverse effect on the Branson Business.
Section 4.23. Disclosure. No representation or warranty by such Exchanging
Shareholder or Branson hereunder, nor any statement, instrument, schedule,
exhibit or certificate furnished by or on behalf of such Exchanging Shareholder
or Branson pursuant to or by reason of this Agreement or the Closing, knowingly
contains or will contain any untrue statement of material fact, or knowingly
omits to state a material fact necessary (i) to make the statements contained in
this Agreement or therein not misleading, and (ii) to provide AGTI with
complete, accurate and reliable
-19-
information with respect to such Exchanging Shareholder, Branson, the Branson
Business or the Branson Property.
ARTICLE V
COVENANTS OF BRANSON AND EXCHANGING SHAREHOLDERS
Section 5.1. Affirmative Covenants Pending Closing. Branson shall, and each
such Exchanging Shareholder shall, or shall cause Branson to, act, between the
date of this Agreement and the Closing, as follows:
A. Access. AGTI and its counsel, accountants and other representatives
shall have reasonable access during normal business hours to all
properties, books, accounts, records, contracts, documents and all data and
information concerning the Branson Business, Branson's finances and the
Branson Property, provided, however, that AGTI shall not impede or
interfere unreasonably with the operations of either Branson or the Branson
Business.
B. Conduct of Business. Branson shall carry on he Branson Business
diligently and in substantially the same manner as it previously has been
carried out and shall not make or institute any unusual or novel methods of
purchase, sale, lease, management, accounting or operation that vary
materially from those methods used by Branson as of the date of this
Agreement.
C. Preservation of Business. Each Exchanging Shareholder and Branson
shall use their respective best efforts to preserve Branson's business
organization intact, to keep available to Branson its present employees
(other than with respect to redu tions in force disclosed to AGTI), and to
preserve present relationships with agents, suppliers, customers and others
having material business relationships with Branson.
D. Corporate Matters. Neither Branson nor any of its subsidiaries
shall (i) amend its articles certificate of incorporation or bylaws; (ii)
issue any additional shares of its capital stock (including any treasury
stock); (iii) issue or create any warrants, obligations, subscriptions,
options, convertib e securities, call, puts or other commitments under
which any additional shares of its capital stock of any class might be
directly or indirectly authorized, issued or transferred from treasury; or
(iv) agree to do any of the acts listed above; nor shall any Exchanging
Shareholder agree to, or vote his/her/its Stock in favor of, any such
amendment, issuance or creation.
E. Maintenance of Insurance. Branson will continue to carry its
existing insurance, subject to variations in amounts required by the
ordinary operations of the Branson Business.
-20-
F. Employees and Compensation. Branson shall not agree to or agre to
do, other than in accordance with the terms of a contract, to which Branson
is currently a party, or a governmental, judicial or arbitration proceeding
which has been disclosed in this Agreement, any of the following acts: (i)
make any change in compensation payable or to become payable by Branson to
any director, officer, employee, consultant, agent or representative; (ii)
make any change in benefits payable to any director, officer, employee,
agent, or representative under any bonus or pension plan or other contract
or commitment; or (iii) modify any collective bargaining agreement to which
Branson or any of its subsidiaries is a party or by which it is bound.
G. New Transactions. Branson will not do or agree to do, without
AGTI's consent, any of the following acts: (i) enter into any contract,
commitment or transaction not in the usual and ordinary course of the
Branson Business; (ii) enter into any contract, commitment, or transaction
in the usual and ordinary course of business involving an amount exceeding
$10,000, individually, or $50,000 in the aggregate; (iii) make any capital
expenditure in excess of $10,000 for any single item or $50,000 in the
aggregate, or enter into any leases of capital equipment or property under
which the annual lease charge is in excess of $10,000; or (iv) sell or
dispose of any fixed assets with a net book value exceeding $10,000,
individually, or $50,000 in the aggregate.
H. Dividends, Distributions and Acquisitions of Shares. Branson will
not: (i) declare, set aside, or pay any dividend or make any distribution
in respect of it capital stock; (ii) directly or indirectly purchase,
redeem or otherwise acquire any shares of its capital stock; or (iii) enter
into any agreement obligating it to do any of the foregoing acts.
I. Liabilities and Waiver of Claims. Branson will not do, or agree to
do, any of the following acts: (i) pay any obligation or liability, fixed
or contingent, other than current liabilities in accordance with their
previously agreed terms; (ii) waive or compromise any right or claim; or
(iii) cancel, without full payment, any note, loan, or other obligation
owing to Branson.
J. Existing Agreements. Branson will not materially modify, amend,
cancel, or terminate any of Branson's existing contracts or agreements
which are material to the continuation of the Business following the
Closing, or agree to do any of those acts.
K. Consents. As soon as reasonably practicable after the execution and
delivery of this Agreement, each Exchanging Shareholder and Branson will
obtain the written consent of the persons described in Exhibit Q to this
Agreement and will furnish to AGTI executed copies of those consents.
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Section 5.2. Exception. The foregoing covenants standing, Branson may pay
legal fees and other charges it in connection with the negotiation and
consummation Agreement.
ARTICLE VI
REPRESENTATIONS, WARRANTIES AND COVENANTS OF AGTI
AGTI hereby represents and warrants to and covenants with each of the
Exchanging Shareholders as follows:
Section 6.1. Authority. AGTI has full power and authority to execute and
deliver this Agreement according to its terms and to consummate the transactions
contemplated on AGTI's part by this Agreement. No consent of any third person is
necessary to authorize the execution and delivery of this Agreement by AGTI or
the consummation by AGTI of the transactions contemplated by this Agreement.
This Agreement has been duly executed and delivered by AGTI and is the valid and
binding agreement of, and enforceable against, AGTI in accordance with the terms
of this Agreement.
Section 6.2. Commissions. AGTI has not entered into any agreement,
commitment or obligation with regard to any brokerage commissions or finders'
fees in connection with this Agreement, negotiations leading to the execution
of, or arising out of any of the transactions contemplated by, this Agreement.
Section 6.3. No Breach; Consents. The execution, delivery and performance
of this Agreement by AGTI and the consummation of the ransactions contemplated
hereby (a) do not and will not conflict with or result in any breach of any of
the provisions of, constitute a default under, result in a violation of, result
in the creation of any lien, security interest, charge or encumbrance upon the
assets of AGTI under, or require any authorization, consent, approval, exemption
or other action by or notice to any third party under the provisions of any
indenture, mortgage, lease, loan agreement or other agreement (oral or written)
or instrument to which AGTI is a party, and (b) do not require any
authorization, consent, approval, exemption or other action, other than as
provided for in Section 6.6, by or notice to any court or governmental body
under any law, statute, rule, regulation or decree to which AGTI is subject.
Section 6.4. Litigation. There is no claim action, suit or proceeding
pending or, to the knowleedge of AGTI, threatened against AGTI or any of its
properties which seeks to prohibit, restrict or delay consummation of the
transactions contemplated by this Agreement or to limit in any manner the right
of AGTI to control Branson or any material aspect of the business of AGTI after
the Closing Date, and there is no judgment, decree,
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injunction, ruling or order of any court, governmental department, commission,
agency or instrumentality or arbitrator outstanding against AGTI having, or
which AGTI believes may in the future have, any such effect.
Section 6.5. Acquisition for Investment. AGTI will acquire the Branson
Stock for its individual account for investment and not with a view to its
public sa e or distribution.
Section 6.6. Consents, Etc. AGTI shall be responsible for obtaining any
consents, approvals or authorizations of or designations, declarations or
filings with, any person in connection with its execution, delivery or
performance of this Agreement.
Section 6.7. Exchange Shares. At Closing, AGTI will have sufficient shares
of its capital stock available as AGTI Exchange Shares as required under Section
2.1. and in accordance with the specific terms thereof.
Section 6.8. Organization, Good Standing and Approval. AGTI is duly org
nized, validly existing and in good standing under the laws of the state of its
organization. AGTI is qualified to do business and in good standing in each
jurisdiction in which its activities require it to be so qualified. AGTI has all
necessary power and authority to own, lease, and operate its properties and
assets and to engage in the business which is contemplated by AGTI as and in the
places where its property and assets are owned, leased, or operated or where
such business is to be conducted. AGTI has no business other than described in
its most recent Form 10-K, a copy of which has been provided to Branson.
Section 6.9. Capitalization and Title to Shares. The authorized capital
stock (of whatever class or character) of AGTI consists of 40,000,000 shares of
common stock, $.005 par value, of which approximately 14,000,000 shares are
currently issued and outstanding [other described]. All outstanding shares of
AGTI's capital stock are validly issued, fully paid and non-assessable. The AGTI
Exchange Shares will not be subject to any restrictions or limitations
prohibiting or restricting transfer, other than restrictions on transferability
imposed generally on securities by federal or applicable state securities laws,
none of which will prevent the exchange transaction contemplated by this
Agreement. There are no outstanding subscriptions, options, rights, puts, calls,
warrants, convertible securities or other agreements or commitments obligating
AGTI to issue or to transfer from treasury any additional shares of its capital
stock of any class, except those set forth in Exhibit AA attached and all of
which have been taken into account in arriving at the Branson Shareholder AGTI
Ownership Percentage (as defined in Section 2.1). When issued, the AGTI Exchange
Shares shall be fully paid and nonassessable shares of the outstanding capital
stock of AGTI.
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Section 6.10. Financial Statements. The financial statements for AGTI (on a
consolidated basis with its subsidiaries) attached as Exhibit BB are, and will
be, true, correct and complete statements of the fina cial condition, assets and
liabilities, and all reserves and accruals of AGTI as of the dates and for the
periods covered, and they fairly present, in all material respects, the
financial condition of AGTI for the period or periods covered and all of them
were prepared in accordance with generally accepted accounting principles on a
consistent basis with that of prior periods. Between the date(s) of such
financial statements and the date of this Agreement, there has not been (i) any
material adverse change in the condition, financial or otherwise, of AGTI or its
business or assets except as set forth on Exhibit BB.1 or covered by subclause
(iii) below, (ii) any damage, destruction or loss,. whether or not covered by
insurance, that materially and adversely affects AGTI or its business, (iii) any
disposition or acquisition of any material asset other than in the normal course
of business or otherwise disclosed to Branson, or (iv) any violations of any of
AGTI's covenants, representations and warranties set forth in this Agreement.
Section 6.11. Undisclosed Liabilities.
A. Permitted Encumbrances. Except as set forth or described in Exhibit
CC or taken into account in the financial statements described in Section
6.10 above, as of the Closing there shall be no liens or encumbrances of
any kind, nature or quantity whatsoever, directly, indirectly, actually or
purportedly burdening, encumbering or pertaining to AGTI, its business or
its assets.
B. Indebtedness. Other than items (i) specified in the exhibits
pertaining to AGTI in this Agreement, (ii) incurred pursuant to contracts,
agreements or other commitments listed, described or referred to in the
exhibits pertaining to AGTI in this Agreement, or (iii) of a type described
in or referred to in any provision of this Agreement but not set out in the
exhibits pertaining to AGTI in this Agreement, AGTI does not have any
debts, liabilities or obligations of any nature, kind or quantity, whether
accrued, absolute, contingent or otherwise and whether due or to become
due, known or unknown, except:
1. To the extent set forth on or reserved against in the balance
sheet of AGTI included as Exhibit BB;
2. Liabilities incurred since such balance sheet date and
obligations under agreements entered into in the ordinary course of
business; and
3. Items that will not require payments by AGTI in excess of Two
Hundred Thousand Dollars ($200,000.00)] in the
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aggregate within forty-five (45) days following the date of this
Agreement.
C. Economic, Property or Personal Liability. Except as su marized in
Exhibit CC, AGTI has no knowledge of any fact, circumstance or occurrence
which has given or might give rise to any material liability, obligation or
claim for economic, property or personal injury or harm to any person,
entity or property against AGTI.
Section 6.12. Absence of Conflicting Agreements or Required Consents. The
execution, delivery and consummation of this Agreement and the transactions
contemplated hereby are not prohibited by, and will not conflict with,
constitute grounds for termination of, or result in a breach of, the terms,
conditions or provisions of, or constitute a default under:
A. AGTI's articles of incorporation, bylaws or other organizational or
constating documents; or
B. Any other agreement or instrument to which AGTI is now a party, or
by which any of AGTI's business or assets is subject or bound. All
approvals and consents required for AGTI to consummate the transactions
contemplated by this Agreement have been obtained, or AGTI, in good faith,
believes they will be obtainable within a reasonable period following the
date of this Agreement.
Section 6.13. Title to and Condition of AGTI Property. AGTI has no assets,
properties or interests which it owns, or whi h is used, reasonably held for use
or available for use in connection with its business which are not set forth in
the financial statements referred to in Section 6.10 above. AGTI owns, and at
the Closing shall own, without material exception, all of its assets and
business in the manner and nature as necessary for the conduct of AGTI's
operations and as taken into for purposes of their presentation in the financial
statements referred to in Section 6.10 above.
A. Title and Encumbrances. Except as arising in connection with the
indebtedness of AGTI escribed in the financial statements referred to in
Section 6.10 above or described in Section 6.11 above, no financing
statement, deed of trust, chattel or other mortgage, or other security
instrument or device, or notice of any thereof, under the laws of any
jurisdiction with respect to AGTI's assets or business has been filed or
recorded in any jurisdiction; and AGTI has not executed, nor has any person
or entity executed on behalf of AGTI, any document or instrument
authorizing any secured party thereunder to file any such financing
statement, mortgage, deed of trust statement or other security device or
instrument or notice of any thereof.
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B. Realty; Leases. All material interests in real property owned by
AGTI are valid, subsisting, binding and enforceable by AGTI and there is no
material default or breach by AGTI or, to the knowledge of AGTI, by the
other party or parties thereto nor has any event occurred that, with the
passage of time or the giving of notice, or both, would become a material
breach or default, except as set forth in Exhibit DD. With respec to any
such real property:
i) AGT has not received any notice of the exercise of eminent
domain or condemnation which may affect any of its material real
property in any way, or any notice regarding the annexation of all or
any of such property, and, to the best knowledge and belief of AGTI,
no such action is pending or threatened.
ii) None is subject to any preferential right of purchase in
favor of any other person.
iii) AGTI has no knowledge of any material structural defects or
deficiencies or any subsurface or soil problems related to any
material real property or improvement. The material HVAC, electrical
and other operating systems within or about any improvements have been
maintained in a good and workmanlike manner and are in good working
order and condition normal wear and tear excepted.
iv) AGTI has no knowledge of, nor has AGTI released or caused to
be released, any hazardous substances on, about or from any part of
its real property. To the best knowledge of AGTI, AGTI is in
compliance with all environmental laws and regulations, except to the
extent such non-compliance would not have a material adverse affect on
the financial condition of AGTI or any of the material assets of AGTI.
C. Contracts, Authorities, Etc. All presently existing contracts,
agreements, licenses, permits, authorities, applications, consents,
commitments, insurance policies, easements, servitudes, leases,
rights-of-way, understandings or other arrangements creating or setting
forth obligations, liabilities, rights, privileges or interests, whether
written or oral, expressed or implied, connected with or relating to AGTI's
business, are either:
i) agreements, commitments, obligations or understandings, which
if written, are listed in the exhibits referred to in this Section
6.13, and true and complete copies have been made available to Branson
and the Exchanging Shareholders or, if oral and material to the
business of AG I, their terms are described and summarized in the
exhibits referred to in this Section 6.13; or
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ii) miscellaneous service or other contracts or agreements, all
of which are terminable at will or upon notice of not more than thirty
(30) days without penalty or o her liability of any kind.
AGTI (and its subsidiaries) has complied in all material respects with all
material provisions of such agreements and arrangements required to be
complied with by AGTI in connection with its business or its assets. All
payments required thereunder are curre t, and there are no material
breaches or defaults thereunder in any respect. No event has occurred,
which upon the giving of notice or lapse of time, or both, would constitute
any such material breach or default. All of such agreements have been duly
executed and delivered, and are now, and at Closing shall be, valid,
binding upon, and enforceable by AGTI (and its subsidiaries) in accordance
with their respective terms. True and complete copies of all documents
referred to or covered by this Section 6.13 which have not been previously
made available to Branson or the Exchanging Shareholders will be made
available promptly to Branson and the Exchanging Shareholders upon request
or upon discovery that they have not been previously made available to
Branson or the Exchanging Shareholders.
D. Subsidiaries. AGTI does not own, directly or indirectly, any
interest or investment, whether equity or debt, in any corporation,
partnership, company, trust, or other entity other than as set forth in
Exhibit EE attached.
Section 6.14. Compliance with Laws. AGTI (and its subsidiaries) has omplied
and will continue to the Closing to comply in all material respects with all
applicable material federal, state and local laws, rules and regulations, and
with all material, pertinent provisions of any agreements or arrangements
pertaining to any of its assets or business.
A. Notice of Non-Compliance. AGTI has not received any notice, written
or oral, asserting noncompliance in any material respect with applicable
laws, rules or regulations of the United States of America, any state,
county, municipality, or other political subdivision or any agency thereof
having jurisdiction over AGTI, its subsidiaries or any of its business or
assets.
B. Defaults. AGTI (and its subsidiaries) is not in default with
respect to any judgment, order, injunction or decree of any court,
administrative agency or other governmental authority in any respect
material to the transactions contemplated by this Agreement.
C. Governmental Regulations. There are no pending, or, to the best
knowledge of AGTI after due inquiry, threatened, administrative, judicial,
investigative, inspection or other
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proceedings involving the operation of AGTI's (or its subsidiaries)
business or assets.
D. Federal and State Law. AGTI has timely and properly filed all
reports and made all submissions known to be required under (i) all
material federal laws, and (ii) the material laws of the states that are
relevant to the conduct and operation of AGTI's (or its subsidiaries)
business. AGTI (and its subsidiaries) is in all material respects in
compliance with all such laws, rules and regulations.
Section 6.15. Taxes and Tax Returns. All taxes pertaining to AGTI, its
subsidiaries or its business required to be paid prior to the date of this
Agreement by AGTI, and all tax returns and documents required to be filed or
submitted prior to such date on behalf of AGTI (subject to proper extensions of
time to file or pay), have been paid and properly and timely filed or submitted
and were truly and correctly completed. AGTI shall pay and file or submit in
compliance with applicable law all taxes pertaining to AGTI (or its
subsidiaries) that accrue or are incurred from the date of this Agreement to the
Closing Date, together with all corresponding tax returns and documents. To the
knowledge of AGTI, there are no audits pending nor any outstanding agreements or
waivers extending the statutory period of limitations applicable to any tax or
tax return or document for any period. AGTI has paid (or caused to be paid) all
taxes which have become due pursuant to all tax returns and has paid all
installments of estimated taxes due (subject to proper extensions of time to
file or pay). All taxes and other assessments and levies which AGTI (or its
subsidiaries) is required by law to withhold or to collect have been duly
withheld and collected, and have been paid over timely to the proper
governmental authorities or trustee to the extent due and payable. Subsequent to
the date hereof and prior to the Closing Date, all such returns and reports
shall be timely and accurately filed, and any tax payable as shown thereby shall
have been paid, as required by applicable law. There are no determined tax
deficiencies or proposed tax assessments known to AGTI, or the prospect for the
same, against AGTI. AGTI has made available true, complete and correct
information to Branson and the Exchanging Shareholders with regard to any and
all taxes and tax returns, reports and documents referred to in this Section
6.15, including, without limitation, AGTI's liability for the payment, filing or
submission thereof. AGTI has established (and until the Closing will establish)
on its books and records reserves that are reasonably believed to be adequate
for the payment of all taxes not yet due and payable, and there shall be no
material difference between the amounts of the book basis and the tax basis of
assets (net of liabilities) of AGTI that are not accounted for by an accrual on
the books for federal income tax purposes and AGTI has accounted for deferred
taxes in accordance with generally accepted accounting principles. There are no
liens for taxes upon the assets of AGTI, except liens, claims or
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encumbrances for taxes not yet due. AGTI has not filed (and shall not have filed
prior to the Closing) a consent pursuant to Section 341(f) of the Code or agreed
to have Section 341(f)(2) of the Code apply to any disposition of a subsection
(f) asset (as such term is defined in Section 341(f)(4) of the Code) owned by
AGTI. AGTI is not required to include in income any adjustment pursuant to
Section 481(a) of the Code by reason of a voluntary change in accounting method
initiated with respect to AGTI, and AGTI does not have knowledge that the
Internal Revenue Service has proposed or has the basis to propose any such
adjustment or change in accounting method. AGTI is not a party to any agreement,
contract or arrangement that would result, separately or in the aggregate, in
the payment of any "excess parachute payments" within the meaning of Section
280G of the Code. AGTI is not required to file any returns or pay taxes in any
jurisdiction outside the United States. No election has been made with respect
to AGTI which was set forth on a statement, form or schedule (other than a
statement, form or schedule with respect to depreciation) attached to a return
and filed separately. All transactions which could give rise to an
understatement of federal income tax (within the meaning of Section 6661 of the
Code) with respect to AGTI are adequately disclosed (or, with respect to returns
filed before the Closing will be adequately disclosed) on the returns required
in accordance with Section 6661(b)(2)(B) of the Code.
Section 6.16. Insurance. AGTI has, and shall c ntinue to have through the
Closing, fire, theft, casualty and general liability insurance in full force and
effect, the continuation of which shall not be adversely affected by the
execution or delivery of this Agreement. Except as listed in Exhibit FF, AGTI
has no unpaid claim under any such insurance and has received no notice of
termination of any such insurance. AGTI currently has, and at Closing will have,
all bonds, insurance coverage or insurance or surety arrangements in such
amounts and providing such coverages reasonably as required by, AGTI's business
and operations. All such bonding, insurance and surety agreements or
arrangements are set forth in Exhibit FF.
Section 6.17. Adequacy of Authorities, Etc.
A. Existence and Validity. AGTI has all governmental authorities,
licenses and rights that are necessary to carry on its business ("AGTI
Authorities").
B. Full Force. All of the material AGTI Authorities are and shall be
at Closing in full force and effect in all material respects based on their
curre t terms and conditions.
C. Enforceability. All of the AGTI Authorities have been duly entered
into and authorized and are validly issued and were obtained by or
transferred to and accepted by AGTI in accordance with, and as required by
the terms thereof and by applicable
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law. All of the material AGTI Authorities are valid, binding and legally
enforceable against third parties in accordance with their terms to the
fullest extent authorized by law.
Section 6.18. Unfulfilled Commitments. AGTI has disclosed in Exhibit GG all
existing unfulf lled promises or commitments (other than those set forth in any
agreement entered into in the usual and normal course of business) which AGTI
has made, including, without limitation, those for capital expenditures or
improvements, whether or not legally binding, which have been made or offered in
connection with any AGTI's business.
Section 6.19. Assumed Name. AGTI has not conducted its business or held any
of its assets under any fictitious or assumed business name or trade name other
than "Selectro Vision," the AGTI logo and "Max Plus."
Section 6.20. Employment Contracts and Benefits. Exhibit FF to this
Agreement is a list of all employment contracts and collective bargaining
agreements and all pension, bonus, profit-sharing, stock option, or other
agreements or arrangements providing for employee remuneration or benefits to
which AGTI is a party or by which AGTI is bound. All such contracts and
arrangements are in full force and effect (except at the Closing, those required
to be terminated pursuant to this Agreement), and neither AGTI (or its
subsidiaries, if a party) nor any other party is in default under any of them.
There have been no claims of default and, to the best of AGTI's knowledge, there
are no facts or conditions that if continued, or unnoticed, will result in a
default under such contracts or arrangements. There is no pending or, to AGTI's
knowledge, threatened labor dispute, strike, or work stoppage affecting AGTI.
AGTI has complied with all applicable laws for its employee benefit plans,
including the provisions of the Employee Retirement Income Security Act (ERISA),
if and to the extent applicable; there are no threatened or pending claims by or
on behalf of any such benefit plan, by or on behalf of any employee covered
under any such plan, or otherwise involving any such benefit plan, that allege a
breach of fiduciary duties or violation of other applicable state or federal
law, nor is there, to AGTI's knowledge, any basis for such a claim. Except as
set forth in Exhibit FF, has not entered into any severance or similar
arrangement in respect of any present or former employee that will result in any
obligation, absolute or contingent, of AGTI (or its subsidiaries), to make any
material payment to any present or former employee following termination of
employment.
Section 6.21. Directors and Officers. The directors and officers of AGTI
for the present and previous two (2) fiscal year periods, are set forth in the
list of Officers and Directors attached as part of Exhibit HH.
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Section 6.22. Enforceability. The terms and provisions of this Agreement
and all instruments, documents, certificates and agreements made or delivered by
or on behalf of AGTI by reason of the tra saction contemplated hereby constitute
the valid and legally binding obligations of AGTI, and are enforceable against
AGTI in accordance with the terms hereof and thereof, and constitute, or, upon
their delivery, will constitute, the valid and legally binding obligations of
AGTI, and each are, or, upon their delivery, will be enforceable in accordance
with the terms of this Agreement and thereof.
Section 6.23. Patents, Trademarks, Licenses, Etc. AGTI does not own or use
any trademarks, trade names, service marks, patents, copyrights, registratio s
and has no application therefor or licenses or rights thereto except as set
forth in Section 6.19 and Exhibit II attached. There is no violation or
infringement of which AGTI knows or reasonably should know, caused by the
conduct of Branson's business, of any laws, statutes, ordinances or regulations
or any right or concession, patent, trademark, trade name, copyright, know- how
or other proprietary right of others, the enforcement of which would have a
material adverse effect on AGTI's business or financial condition.
Section 6.24. isclosure. No representation or warranty by AGTI, nor any
statement, instrument, schedule, exhibit or certificate furnished by or on
behalf of any AGTI pursuant to or by reason of this Agreement or the Closing,
knowingly contains or will contain any untrue statement of material fact, or
knowingly omits to state a material fact necessary (i) to make the statements
contained in this Agreement or therein not misleading, and (ii) to provide
Branson and the Exchanging Shareholders with complete, accurate and reliable
information with respect to AGTI and its business and assets.
Section 6.25. Affirmative Covenants Pending Closing. AGTI shall act,
between the date of this Agreement and the Closing, as follows:
A. Access. Branson, the Exchanging Shareholders and their counsel,
accountants and other representatives shall have reasonable access during
normal business hours to all properties, books, accounts, records,
contracts, documents and all data and information concerning AGTI and its
business and assets, provided, however, that neither Branson nor any
Exchanging Shareholder shall impede or interfere unreasonably with the
operations of AGTI.
B. Conduct of Business. AGTI shall carry on its business diligently
and in substantially the same manner as it previously has been carried out
and shall not make or institute any unusual or novel methods of purchase,
sale, lease, management, accounting or operation that vary materially from
those methods used by AGTI as of the date of this Agreement.
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C. Preservation of Business. AGTI shall use its best efforts to
preserve AG I's business organization intact, to keep available to AGTI its
present employees, and to preserve present relationships with agents,
suppliers, customers and others having material business relationships with
AGTI.
D. Corporate Matters. Neither AGTI nor any of its subsidiaries shall
(i) amend its articles, certificate of incorporation or bylaws; (ii) issue
any additional shares of its capital stock (including any treasury stock);
(iii) issue or create any warrants obligations, subscriptions, options,
convertible securities, call, puts or other commitments under which any
additional shares of its capital stock of any class might be directly or
indirectly authorized, issued or transferred from treasury; or (iv) agree
to do any of the acts listed above.
E. Maintenance of Insurance. AGTI will continue to carry its existing
insurance, subject to variations in amounts required by the ordinary
operations of its business.
F. Employees and Compensation. AGTI shall not agree to or agree to do,
other than in accordance with the terms of a contract, to which AGTI is
urrently a party, or a governmental, judicial or arbitration proceeding
which has been disclosed in this Agreement, any of the following acts: (i)
make any change in compensation payable or to become payable by AGTI to any
director, officer, employee, consultant, agent or representative; (ii) make
any change in benefits payable to any director, officer, employee, agent,
or representative under any bonus or pension plan or other contract or
commitment; or (iii) modify any collective bargaining agreement to which
Branson is a party or by which it is bound.
G. New Transactions. AGTI, without Branson's consent, shall not do or
agree to do any of the following acts: (i) enter into any contract,
commitment or transaction not in the usual and ordinary course of AGTI's
business; (ii) enter into any contract, commitment, or transaction in the
usual and ordinary course of business involving an amount exceeding
$[10,000], individually, or $[50,000] in the aggregate; (iii) make any
capital expenditure in excess of $[10,000] for any single item or $[50,000]
in the aggregate, or enter into any leases of capital equipment or property
under which the annual lease charge is in excess of $[10,000]; or (iv) sell
or dispose of any fixed assets with a net book value exceeding $[10,000],
individually, or $[50,000] in the aggregate.
H. Dividends, Distributions and Acquisitions of Shares. AGTI will not:
(i) declare, set aside, or pay any dividend or make any distribution in
respect of its capital stock; (ii) directly or indirectly purchase, redeem
or otherwise acquire any shares of its capital stock; or (iii) enter into
any agreement obligating it to do any of the foregoing acts.
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I. Liabilities and Waiver of Claims. AGTI will not do, or agree to do,
any of the following acts: (i) pay any obligation or liability, fixed or
contingent, other than current liabilities in accordance with their
previously agreed terms; (ii) waive or compromise any right or claim; or
(iii) cancel, without full payment, any note, loan, or other obligation
owing to AGTI.
J. Existing Agreements. AGTI will not materially modify, amend,
cancel, or terminate any of AGTI's existing contracts or agreements which
are material to the continuatio of its business following the Closing, or
agree to do any of those acts.
The foregoing covenants notwithstanding, AGTI may pay legal fees and other
charges incurred by it in connection with the negotiation and consummation of
this Agreement.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1. Conditions Precedent to AGTI's Obligations to Consummate the
Exchange. AGTI's obligations to consummate the transactions contemplated by this
Agreement are, at its option (collectively exercised), subject to compliance
with, at or prior to Closing, each of the following conditions precedent:
X. Xxxxxxx Stock Transfer. The Exchanging Shareholders shall be xxxx,
willing and able to transfer to AGTI indefeasible title to the Branson
Stock as and in the kind, nature, quality, quantity and condition required
by this Agreement. The Branson Stock delivered by the Exchanging
Shareholders at the Closing shall not be less than ninety percent (901) of
the issued and outstanding capital stock of Branson.
B. Compliance. The Exchanging Shareholders and Branson shall have
delivered to AGTI such evidence as AGTI may require that the Exchanging
Shareholders and Branson have fully performed and complied with, wit out
deviation materially adverse to AGTI, all required covenants, agreements,
deliveries and conditions in the manner required by this Agreement.
C. Representations, Warranties and Covenants. Branson's and each
Exchanging Shareholder's representations and warranties, including, without
limitation, those made to the knowledge of such Exchanging Shareholder or
Branson, and the covenants of such Exchanging Shareholder and Branson shall
be substantially true or performed and without material adverse change or
deviation as of the Closing Date.
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D. No Changes. There shall be no actual or threatened order, de ree or
ruling of any court or governmental agency, which has a material adverse
affect on Branson, the Branson Business or the Branson Property. There
shall not have occurred any event or condition materially and adversely
affecting the Branson Business or its future prospects. There shall not
have occurred any material adverse alteration or amendment of any of the
terms, provisions or conditions of any of the Branson Interests, Branson
Realty or Branson Authorities, nor shall any of the same shall have been
materially and adversely modified (except as specifically required by this
Agreement), suspended, restricted or canceled.
E. Corporate Approval. The execution and delivery of this Agreement by
Branson, and the performance of its covenants and obligations under it,
shall have been duly authorized, and AGTI shall have received copies of all
resolutions pertaining to that authorization, certified by the secretary or
an assistant secretary of Branson.
F. Termination of Shareholder Agreement. All shareholder agreements
among any of Branson or any of the Exchanging Shareholders with respect t
any of the Branson Stock owned by the Exchanging Shareholders shall have
been terminated or shall be terminated effective with the Closing.
G. Outstanding Branson Stock. At the Closing, there shall be no issued
and outstanding capital stock of Branson other than (i) the Branson Stock,
(ii) shares held by Branson as treasury stock or (iii) shares of Branson's
capital stock held by shareholders other than the Exchanging Shareholders
in a number not to exceed the number of shares of Branson's capital stock
outstanding at the date of this Agreement less the number of shares of the
Branson Stock to be delivered by the Exchanging Shareholders pursuant to
this Agreement.
Section 7.2. Deliveries Precedent to AGTI's Obligations to Consummate the
Exchange. AGTI's obligation to consummate the share exchange contemplated by
this Agreement is, at its option, subject to receiving from the Exchanging
Shareholders or Branson, as appropriate, each of the following items at the
Closing:
A. Conveyances and Other Documents. All stock certificates and stock
powers duly executed in accordance wit the provisions of this Agreement to
consummate the transfer of all Branson Stock to AGTI.
B. Certificate of Exchanging Shareholders. The certificate(s) of the
Exchanging Shareholders stating that, as of the Closing Date: (i)
Exchanging Shareholder's representations and warranties, including, but not
limited to, those made to the knowledge of such Exchanging Shareholder and
Branson, set forth in
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this Agreement have been re-examined and are true, correct and complete, in
all material respects and (ii) the Exchanging Shareholder's and Branson's
covenants, agreements and conditions set forth in this Agreement have been
fulfilled and complied with in the manner required by this Agreement, with
only such exceptions as have been or may be reasonably approved prior to or
at Closing in a separate writing by AGTI, such approval not to be withheld
if such exceptions do not materially and adversely affect the transactions
contemplated by this Agreement.
C. Post-Closing Agreements. All agreements necessary to effectuate the
provisions of undertakings to be performed subsequent to the Cl sing shall
have been delivered by the persons required to deliver the same or AGTI
shall have received such assurances of the Exchanging Shareholders that any
such agreements not delivered at the Closing will be delivered promptly
following the Closing.
D. Consents. All necessary approvals, amendments and consents to the
transfer or assignment of the Branson Stock and the resulting change in
ownership of Branson, on terms not less favorable than those currently
afforded to Branson, or the Branson Business, including, without
limitation, all Branson Interests, Branson Realty, Branson Authorities,
permits, licenses, easements, rights-of-way and leases. AGTI, the
Exchanging Shareholders and Branson shall cooperate to obtain such
approvals, amendments and consents, but any failure to so cooperate shall
not affect theo Exchanging Shareholders' or Branson's obligation to obtain
the same as required by this Agreement.
E. Release. Branson shall have received a release or releases, in form
and substance reasonably satisfactory to AGTI, executed by each Exchanging
Shareholder in favor of Branson and rel asing Branson from any and all
manner of actions, causes of action, suits, proceedings, claims, demands or
damages which such Exchanging Shareholder(s) ever had, now has or may have
against Branson for or by reason of any matter, cause or thing whatsoever
done or omitted to be done by Branson up to the Closing Date other than in
respect of obligations to such Exchanging Shareholder arising in respect
of:
i) on-going obligations (including indebtedness in respect of
promissory notes or advances) of Branson to such shareholder(s), as
agreed to in writing by GTI; or
ii) earned but unpaid salary or employee o director benefits for
the then current or any past pay period.
F. Legal Opinion. AGTI shall have received an opinion or opinions of
U.S. counsel to Branson and the Exchanging Shareholders in form and
substance reasonably satisfactory to AGTI and its counsel covering (i) the
due incorporation and good
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standing of Branson, (ii) the due issuance and non-assessibility of the
Branson Stock and (iii) the due authorization, execution and delivery of
this Agreement by Branson and the Exchanging Shareholders and the
enforceability hereof against each of them.
G. FIRPTA Certificate. AGTI shall have received an appropriate
statement or certificate complying with the requirements of Sections 897
and 1445 of the Code from each Exchanging Shareholder to the extent
required by such sections.
H. Stock Offering. AGTI shall have undertaken and completed the
following issuance of or transaction involving the common stock, $.005 par
value, of AGTI:
i) An offering of 1,000,000 units, consisting of one (1) share of
AGTI common stock and an option to purchase one (1) additional share
of AGTI common stock at an nitial exercise price of U.S. $1.50 per
share, to an investor or group of investors to be designated by
Branson. The per unit purchase price shall be the lesser of (a) U.S.
$1.00 or (b) a 37% discount from the average closing bid price for
AGTI common stock for the 30-day period prior to the effective date of
such offering. The options shall be exercisable for at least twelve
(12) months following their issuance. Such offering will be undertaken
in reliance on Rule 504, and the AGTI common stock sold pursuant
thereto shall not be "restricted stock," but the options and
underlying AGTI common stock may be restricted. AGTI shall have the
obligation to undertake the registration of such options at a price
equal to at least U.S. $1.50 per option share upon the written request
of the holder(s) of at least fifty one percent (51%) of the then
outstanding options; provided that AGTI has not within the previous
twelve (12) months completed a registered offering of its securities
under which the holders of the common stock issued under this clause
7.2H have not registered or qualified their stock. It is further
agreed and understood that the said holders will at all times have the
right to have their shares registered with any offerings made to the
public of AGTI's shares commonly referred to as "piggy back"
registration rights.
Section 7.3. Conditions Precedent to the Obligations of the Exchanging
Shareholders to Consummate the Exchange. The obligations of the Exchanging
Shareholders under this Agreement are, at the option of the Exchanging
Shareholders collectively exercised), subject to compliance with, at or prior to
Closing, each of the following conditions precedent:
A. Compliance. AGTI shall have delivered to the Exchanging
Shareholders such evidence as the Exchanging Shareholders may require that
AGTI has fully complied with and performed, without deviation materially
adverse to the Exchanging Shareh-
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olders, all covenants, agreements and conditions required to be complied
with or performed by AGTI in the manner required by this Agreement.
B. Representations, Warranties and Covenants. All of AGTI'S
representations nd warranties, including those made to the knowledge of
AGTI, and covenants shall be substantially true or performed, as
applicable, without material adverse change as of the Closing Date.
C. Certificate. AGTI shall have delivered to the Exchanging
Shareholders a certificate stating that (i) the representations and
warranties of AGTI set forth in this Agreement have been re-examined and
are true, correct and complete in all material respects, and (ii) AGTI's
covena ts, agreements and conditions set forth in this Agreement have been
fulfilled and complied with in the manner required by this Agreement in all
material respects as of the Closing Date with only such exceptions, if any,
as have been or may be approved prior to or at Closing in a separate
writing by the Exchanging Shareholders (collectively) at their sole
discretion, such approval not to be withheld if such exceptions do not
materially and adversely affect the transactions contemplated by this
Agreement.
D. Legal Opinion. A legal opinion of AGTI' counsel dated the Closing
Date and addressed to the Exchanging Shareholders covering such matters as
required by, and in form and substance reasonably acceptable to, the
Exchanging Shareholders and their counsel.
Section 7.4. Conditions to All Parties' Obligation to Consummate the
Exchange.
A. Value of Branson. The Branson Property shall have an appraised
value (or AGTI shall agree that such value shall exist) in excess of U.S.
$8,000,000.
B. Employment Agreements. An employment agreement for Xxxxxx Xxxxxx as
the principal executive and operating official of AGTI, Branson and their
subsidiaries, from and after the Closing Date be ween such persons and
their respective employers (i.e., AGTI, Branson or their subsidiaries, as
appropriate) shall have been agreed in form and substance acceptable to
each of the parties thereto and shall be in effect as of the Closing Date,
subject only to the Closing having occurred.
C. Major Decisions. AGTI and Branson shall have agreed to a written
operating procedure whereby such persons shall have designated what matters
involving AGTI and Branson shall be considered "Major Operating Decisions,"
including, but not limited to, disposition of a material asset, agreements
with affiliates, and the procedure(s) to be followed by the persons who act
as
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executive or operating officials of AGTI, Branson or their subsidiaries in
dealing with and obtaining authorization for any transaction involving a
Major Operating Decision. Such procedure shall not require any individual
to breach or otherwise violate any duty owed as an officer, director or
other official of an entity.
D. Separate Business Units. Subject always to their respective duties
as officers and/or directors of either AGTI and Branson or any subsidiary
of AGTI or Branson shall have reached a written understanding as to the
operation and conduct of the respective businesses of each of AGTI and
Branson after the Closing Date and the continuation (or future appointment)
of the directors and officers of Branson and its subsidiaries and their
day-to-day and general authority in respect of the Branson Business.
Section 7.5. Post-Closing Undertakings. In the event a Party shall
temporarily waive any condition or delivery which is a condition to such Party's
obligations to consummate the transactions contemplated by this Article VII at
the Closing, the Party required to fulfill such condition or make such delivery
shall fulfill such conditions or make such delivery promptly following the
Closing as the Parties shall agree, but in no event later than [forty-five (45)]
days following the Closing Date. The Parties shall make a written record as of
the Closing Date with respect to any such condition or delivery required to be
fulfilled on delivery following the Closing Date, and each Party (to the extent
required) shall use its reasonable best efforts to ensure that all such
conditions or deliveries are fulfilled or made timely thereafter.
ARTICLE VIII
TERMINATION
Section 8.1. Non-Performance. Branson on behalf of itself and the
Exchanging Shareholders (acting collectively) or AGTI shall have the right to
terminate this Agreement at or prior to Closing in the event that the other
party is in default in the performance of any of such party's material
obligations to be performed under this Agreement, or should any covenant,
warranty or representation made by the other party in this Agreement prove to be
incorrect or incomplete in any material sense, provided, however, that the party
against whom such termination is to be exercised shall have the right, for a
period of [five (5)] days following receipt of written notice from the other of
the alleged default, to correct or satisfy any such condition or covenant
necessary to the consummation of this Agreement. Nothing in this Agreement shall
be construed as relieving a party from liability for damages, including, but not
limited to, expenses reasonably
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incurred in the negotiation and preparation of this Agreement, to the other
party for breach of such party's obligations under or by reason of this
Agreement if this Agreement is terminated by the non-defaulting party under the
provisions of this Section 8.1. In addition to any other remedy for breach of
this Agreement, relief by way of specific performance shall be available to
either AGTI or Exchanging Shareholders (acting collectively) to enforce the
terms of this Agreement.
Section 8.2. Branson Risk of Loss. Any loss or damage, other than ordinary
wear and tear, to the Branson Business or the Branson Property prior to the
Closing by reason of fire, explosion, earthquake, windstorm, accident, flo d,
act of God, war, seizure or activities of the armed forces, nuclear attack, or
other casualty, shall, to the extent not covered by insurance, be the
responsibility of, and be borne by, Branson as to any of the Branson Property or
the Branson Business and Exchanging Shareholders as to the Branson Stock. If
such loss or damage is sufficiently substantial to preclude the resumption of
normal operations or a substantially complete restoration of any substantial
part of the Branson Business within [thirty (30)] days after it first occurs, or
if such loss or damage materially and adversely affects the value of the Branson
Business to the extent of more than [twenty percent (20%)] of its fair market
value, either Branson or the Exchanging Shareholders shall immediately notify
AGTI in writing. AGTI, at any time within [fifteen (15)] days after receipt of
such notice, may elect to either: (i) accept the indirect benefit of the
proceeds of any insurance coverage and consummate the transaction contemplated
by this Agreement, or (ii) terminate this Agreement. If AGTI elects to terminate
this Agreement, all Parties shall be fully released and discharged from any and
all obligations under this Agreement. If AGTI elect to consummate the
transactions contemplated by this Agreement, the Exchange Shares shall be
reduced in number to fairly compensate it for the amount of such loss or damage
to the extent the AGTI does not receive the benefit of compensatory insurance
proceeds through Branson on or before the Closing Date or there are no
arrangements in place to ensure that such benefit will be forthcoming after the
Closing Date or there are no arrangements in place to ensure that such benefit
will be forthcoming promptly after the Closing Date.
ARTICLE IX
POST-CLOSING OBLIGATIONS
Following the Closing Date, AGTI shall undertake the following issuances of
or transactions involving the common stock, $.005 par value, of AGTI:
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i) An offering of 1,000,000 shares of AGTI common stock at U.S. $1.25
per share, such offering to be consummated pursuant to Regulation S
promulgated under the Securities Act of 1933 within thirty (30) days
following the listing of AGTI on NASDAQ.
ii) A best efforts offering or offerings for AGTI common stock at an
aggregate offering price of not less than U.S. $4,000,000 and up to U.S.
$10,000,000 within sixty (60) days following AGTI becoming a listed company
on NASDAQ.
ARTICLE X
GENERAL PROVISIONS
Section 10.1. Statements Deemed Representations. All statements contained
in this Agreement and in any attachment, exhibit, schedule, certificate or other
ins rument or document attached to this Agreement or delivered by or on behalf
of AGTI, Branson or any Exchanging Shareholder to another Party in connection
with the transactions contemplated hereby shall be deemed representations and
warranties of the person making such statement.
Section 10.2. Survival. The covenants, representations, warranties and
agreements made by AGTI or Exchanging Shareholders in this Agreement, the
attachments, exhibits and schedules hereto, and in the agreements, certificates,
instruments and documents delivered in connection with the transactions
contemplated hereunder, shall survive the Closing.
Section 10.3. Exchanging Shareholders' Agreement to Indemnify.
A. Indemnification. Subject to the conditions and provisions set forth
herein, each Exchanging Shareholder, severally and not jointly, hereby
indemnifies and agrees to defend and hold harmless AGTI from and against
all claims, actions, losses, damages, liabilities, diminutions or
reductions in value, costs and expenses, including, without limitation,
reasonable attorneys' fees, and costs of litigation asserted against,
sustained or incurred by AGTI or Branson, which result from claims asserted
by third parties based on events or circumstances arising from the conduct
of the Branson Business prior to the Closing Date ("AGTI Damages").
B. Limitation of Liability. The Exchanging Shareholders, shall be
obligated to indemnify AGTI only for those AGTI's Damages to which AGTI has
given the Exchanging Shareholders written notice within the applicable
statute of limitations period. Any written notice delivered by AGTI
pursuant to this Subsection 10.3.B shall set forth the basis of the claim
for
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AGTI's Damages and a reasonable estimate of the amount if such an estimate
is reasonably possible at that time. The Exchanging Shareholders'
obligations to indemnify AGTI shall apply only to AGTI's Damages exceeding
in the aggregate [One Hundred Twenty-Five Thousand and 00/100 Dollars
($125,000.00)], and shall be limited to the aggregate number of AGTI
Exchange Shares received by Exchanging Shareholders pursuant to this
Agreement. The Exchanging Shareholders shall share in such indemnification
obligation on a pro rata basis determined by reference to such Exchanging
Shareholder's pro rata share of the AGTI Exchange Shares received at
Closing, unless the AGTI Damages shall relate solely to a breach by a
particular Exchanging Shareholder of such person's express and sole
undertaking, warranty, representation or covenant hereunder in which case
such Exchanging Shareholder shall be solely liable therefor to the extent
of the AGTI Exchange Shares received by such person. In no event shall any
Exchanging Shareholder by liable to AGTI in money for any AGTI Damages. If
an Exchanging Shareholder shall not have sufficient AGTI Exchange Shares to
enable such person to fulfill such person's indemnity obligation hereunder,
such Exchanging Shareholder (subject to an option to pay the amount thereof
in cash as provided below) shall undertake to acquire a sufficient number
of the issued and outstanding common stock of AGTI from third parties to
satisfy such obligation unless AGTI and such person shall otherwise agree.
The number of shares of AGTI Exchange Shares (or AGTI common stock
otherwise acquired) to be delivered in satisfaction of any claim for AGTI
Damages shall be the amount of such damages divided by the average of the
per share closing bid prices for AGTI common stock on each of the fifteen
(15) trading days for which such bid information is available immediately
prior to the date on which such person shall be finally determined to be
liable for such AGTI Damages. At the sole and exclusive option of the
person liable for such AGTI Damages, such person may pay the amount thereof
in good bank funds in lieu of transferring AGTI common stock in
satisfaction of such claim.
C. Conditions of Indemnification. The obligations and liabilities of
an Exchanging Shareholder under this Section 10.3 with respect to claims
for AGTI's Damages shall be subject to the following terms and conditions:
1. No later than thirty (30) days after discovery of the basis
for any claim for AGTI's Damages, AGTI will give prompt notice of
AGTI's claim for AGTI Damages, and with respect to any claims other
than claims joined with a claim for non-monetary relief which AGTI
elects to defend, the Exchanging Shareholders will undertake the
defense by representatives of their own choosing who are reasonably
satisfactory to AGTI.
2. In the event that Exchanging Shareholders fail to undertake
the defense within sixty (60) days after notice of any claim for
AGTI's Damages or in the event of claims joined with
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a claim for non-monetary relief, AGTI will have the right to undertake
the defense, compromise or settlement of those claims for the account
of the Exchanging Shareholders.
3. AGTI will give the Exchanging Shareholders prompt notice of
the commencement of any tax audit relating to Branson or the Branson
Business involving periods prior to the Closing Date.
D. Non-exclusivity. The Exchanging Shareholders' agreement to
indemnify AGTI in this Section 10.3 shall limit AGTI's claims for
any-Exchanging Shareholder's breach of this Agreement, and AGTI shall not
be entitled to any double recovery for any damage or injury suffered.
Section 10.4. AGTI's Agreement to Indemnify.
A. Indemnification. Subject to the conditions and provisions set forth
herein, AGTI, hereb indemnifies and agrees to defend and hold harmless the
Exchanging Shareholders from and against all demands, claims, actions,
losses, damages, liabilities, costs and expenses including, without
limitation, reasonable attorneys' fees, costs of litigation, asserted
against or incurred by the Exchanging Shareholders resulting from claims
arising out of a breach of AGTI's warranties, representations or covenants
under this Agreement or the operation and the conduct of the Branson
business after the Closing ("Exchanging Shareholders' Damages").
B. Limitation of iability. If the transactions provided for hereunder
proceed to Closing, AGTI shall be obligated to indemnify the Exchanging
Shareholders only for those Exchanging Shareholders' Damages of which the
Exchanging Shareholders have given AGTI written notice within the
applicable statute of limitations period. Any written notice delivered by
the Exchanging Shareholders to AGTI pursuant to this Subsection 10.4.B
shall set forth the basis of the claim for Exchanging Shareholders' Damages
and a reasonable estimate of the amount if such an estimate is reasonably
possible at that time.
C. Conditions of Indemnification. The obligations and liabilities of
AGTI under Section 10.4 with respect to claims for the Exchanging
Shareholders' Damages shall be subject to the following terms and
conditions:
1. No l ter than sixty (60) days after discovery of the basis for
any claim for Exchanging Shareholders' Damages, Exchanging
Shareholders will give AGTI prompt notice of the claim for Exchanging
Shareholders' Damages, and with respect to any claim other than claims
joined with a claim for non-monetary relief which the Exchanging
Shareholders elect to defend, AGTI
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will undertake the defense by representatives of its own choosing who
are satisfactory to the Exchanging Shareholders.
2. In the event that AGTI fails to undertake the defense within
thirty (30) days after notice of a claim for Exchanging Shareholders'
Damages or in the event of claims joined with a claim for non-monetary
relief, the Exchanging Shareholders will have the right to undertake
the defense, compromise or settlement of those claims for Exchanging
Shareholders, Damages for the account of AGTI.
D. Non-exclusivity. AGTI's agreement to indemnify the Exchanging
Shareholders in this Section 10.4 shall not limit the Exchanging
Shareholders' claims for AGTI's breach of this Agreement, but the
Exchanging Shareholders shall not be entitled to double recovery for any
damages or injury suffered.
E. Representative. Unless the claim for Exchanging Shareholders'
Damages shall be only a claim asserted by one Exchanging Shareholder, all
claims therefor shall be asserted through an authorized representative for
all Exchanging Shareholders as a class. Such representatives also shall be
responsible for and providing any waiver under the provisions of this
Agreement if required to be collectively provided by the Exchanging
Shareholders. The initial representative of the Exchanging Shareholders, as
a class, shall be Xxxxx Xxxxxxx. The actions of such representative on
behalf of the Exchanging Shareholders, as a class, shall be binding on all
Exchanging Shareholders.
Section 10.5. Additional Conveyances. Upon AGTI's request and at AGTI's
expense (except for the conveyances contemplated by Section 2.2.A) after the
Closing, the Exchanging Shareholders shall make, execute, and deliver to AGTI
additional assignments, and other instruments and agreements, including, without
limitation, transfer and conveyance documents, as may be reasonably necessary to
consummate the transactions contemplated by this Agreement. AGTI and the
Exchanging Shareholders agree to use their respective best efforts to take or
cause to be taken all such action and to do or cause to be done, all such things
as may be necessary or advisable or lawful and proper under all applicable laws,
to consummate and make effective the exchange of the Branson Stock for the AGTI
Exchange Shares and other transactions contemplated by this Agreement, and to
ensure that as of the Closing Date, each of them will be under no material,
individual, corporate, legal or contractual restrictions which would prohibit
the exchange of shares contemplated by this Agreement or be contravened by such
exchange.
Section 10.6. Notice. All notices and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been properly given when de-
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livered in person to the person to whom the notice is directed, or three (3)
days after being deposited in the United States mail, certified mail, return
receipt requested, addressee only, first-class postage prepaid, with a postmark
no later than the day specified for such notice, to the parties addressed, or to
such other address or attention as the party to be given such notice may
designate by notice to the other party in the manner prescribed herein, as
follows:
A. If to the Exchanging Shareholders:
c/o Mid-Pacific Capital Insurance, Inc.
00 Xxxxxxxxx Xxxxxx
Lower Ground Floor
London, England WIX IDD
B. If to AGTI:
0000-000 Xxxx Xxxxxxx Xxxxxx
P.O. Box 10109, Pacific Center
Vancouver, British Columbia V74166
C. If to Branson:
c/o Xxxxxx X. Xxxxxxxxx, Xx.
Xxxxxxxxx, Friedberg, Wilson,
Xxxxxxxxx & Xxxxx, P. C.
000 X. 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Section 10.7. Assignment or Substitution. No Party shall transfer, assign,
pledge, hypothecate or otherwise, by operation of law or otherwise, dispose of
any of its interest in or to this Agreement without the prior written consent of
the other Parties. In the event that a Party attempts to assign this Agreement
or any of the rights or duties hereunder to any third party in violation of this
covenant, the non-assigning party or parties may immediately terminate this
Agreement.
Section 10.8. Several Obligations of Exchanging Shareholders. The
representations, warranties, covenants and agreements of an Exchanging
Shareholder in this Agreement is several and not joint.
Section 10.9. Applicable Law and Remedies. The terms, conditions and other
provisions of this Agreement shall be governed and construed according to the
internal laws of the State of Wyoming, excepting any that may require the
application of the laws of another jurisdiction. In addition to any other
remedies at law or in equity for breach of this Agreement, AGTI and the
Exchanging Shareholders (collectively) shall have the right to specifically
enforce this Agreement; provided that, such remedy
-44-
shall not be in limitation of any other remedies at law, in equity, by statute
or otherwise, but rather shall be in addition thereto. All remedies at law, in
equity, by statute or otherwise shall be cumulative and may be enforced
concurrently or from time to time and the election of any remedy or remedies
shall not constitute a waiver of the right to pursue other available remedies.
Section 10.10. Taxes and Expenses. Each Party shall, subject to the terms
of this Agreement, bear such Party's own expenses and costs in connection with
the preparation, negotiation of, and such Party's performance and compliance
with this Agreement.
Section 10.11. Parties in Interest. Subject to Section 10.7 of this
Agreement, all agreements entered into in connection with the transactions
contemplated by this Agreement shall be binding upon and inure to the benefit of
the Parties and their respective heirs, ersonal representatives, successors or
assigns.
Section 10.12. Waiver. No waiver of any breach of any term, condition or
provision of this Agreement shall constitute a waiver of any other breach or any
other term, condition or provision, and no consent of a Party to any departure
therefrom by another Party shall be effective unless such waiver is in writing
and signed by a duly authorized representative of AGTI. Such waiver will be
effective only for the period, on the conditions and for the specific instances
and purposes specified. No notice to, or demand on Exchanging Shareholders shall
entitle a Party to any other or further notice or demand.
Section 10.13. Entire Agreement; Alteration or Amendment. This Agreement
merges all previous negotiations between the Parties, supersedes all prior
discussions and correspondence between the Parties, and constitutes the entire
agreement and understanding between the Parties with respect to the subject
matter of this Agreement. No alteration, modification, or change of this
Agreement shall be valid except by a written instrument executed by the party to
be charged.
Section 10.14. Captions. The captions and headings in th s Agreement are
for convenience only and shall not control or affect the meaning or construction
of any of the provisions of this Agreement.
Section 10.15. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original, and such counterparts, when
taken together, shall constitute one and the same Agreement.
Section 10.16. Approval of Documents. The form and substance of all
agreements, instruments, documents, consents,
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approvals, certificates and opinions to be made, obtained or delivered by or on
behalf of any party hereto in connection with the transactions contemplated by
this Agreement, including, without limitation, those to be obtained from third
parties and those to be delivered at Closing, shall be subject to prior approval
by the other party(ies). Each Party shall endeavor to furnish the others with
copies thereof at a reasonable time (i) in the case of instruments, consents or
approvals of or from third parties, prior to submission or delivery thereof to
any such third parties; and (ii) in the case of all such agreements,
instruments, documents, consents, approvals, certificates and opinions, prior to
the time required by this Agreement for delivery.
Section 10.17. Expenses of Enforcement. If any Party initiates an
action to enforce any provision of this Agreement or any agreement, instrument
or document made or delivered in connection herewith, or for damages by reason
of an alleged breach of any provision, the prevailing party shall be entitled to
receive from the other party(ies) all costs and expenses, including, without
limitation, reasonable attorneys' fees and costs, incurred in connection with
such action, in addition to any other award or relief.
Section 10.18. Compliance with Conditions. Each of the Parties covenants
and agrees with the other to exercise such Party's best efforts and the utmost
good faith to perform, comply with and otherwise satisfy every condition to be
satisfied by such Party under this Agreement.
Section 10.19. Materiality. The Parties agree that for purposes of this
Agreement and documents made or delivered in connection herewith (i) a matter
shall be deemed "material" if it concerns something about which an average
prudent buyer ought to be reasonably informed, and (ii) a misrepresented,
untrue, incomplete or omitted fact shall be deemed material if there is a
substantial likelihood that an average prudent buyer would consider it important
in deciding whether to exchange Branson Stock for AGTI Exchange Shares or vice
versa.
Section 10.20. Pronouns and Terms. In this Agreement, the singular shall
include the plural, the plural the singular, and the use of any gender shall
include all gender forms.
Section 10.21. Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffe tive only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provision of this Agreement unless the
consummation of the transaction contemplated hereby is adversely affected
thereby.
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IN WITNESS WHEREOF, the parties hereto have made and delivered this
Agreement as of the day first above written.
AGTI:
Advanced Gaming T chnology, Inc.
By:______________________________
Its __________________________
BRANSON:
Branson Signature Resorts, Inc.
By:_____________________________
Its _________________________
EXCHANGING SHAREHOLDERS:
________________________________
________________________________
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