Exhibit 2.1
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AGREEMENT AND PLAN OF MERGER
AMONG
CENTURY ELECTRONICS MANUFACTURING, INC.
AND
AMITEK CORPORATION
XXXXX XX PARK
XXXX XXXX PARK
July 30, 1999
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TABLE OF CONTENTS
1. Definitions............................................................1
2. The Merger............................................................11
2.1. Constituent Corporations; Surviving Corporation...........12
2.2. Certificate of Incorporation, By-Laws and Name of the
Surviving Corporation.....................................12
2.3. Directors and Officers of the Surviving Corporation.......12
2.4. Conversion of the Amitek Shares...........................12
2.5. Merger Consideration......................................13
2.6. The Closing...............................................13
2.7. Deliveries at the Closing.................................13
2.8. Surrender of Amitek Shares; Stock Transfer Books..........13
2.9. Amitek Stock Options......................................14
2.10. Closing Date Purchase Price Adjustment....................15
2.11. Post-Closing Purchase Price Adjustment....................15
2.12. Further Assurances........................................18
3. Representations and Warranties of the Principal Sellers...............18
3.1. Organization of Amitek....................................18
3.2. Capitalization and Ownership of Amitek....................19
3.3. Authorization of Transaction..............................19
3.4. Noncontravention..........................................19
3.5. Brokers' Fees.............................................20
3.6. Title to Assets...........................................20
3.7. Assets....................................................20
3.8. No Subsidiaries...........................................20
3.9. Amitek Financial Statements...............................20
3.10. Indebtedness and Guarantees...............................21
3.11. Absence of Certain Changes and Events....................21
3.12. [Reserved]................................................23
3.13. Legal and Other Compliance................................23
3.14. No Material Adverse Change................................23
3.15. Taxes.....................................................23
3.16. Property, Plant and Equipment.............................24
3.17. Intellectual Property.....................................26
3.18. Inventories...............................................26
3.19. Contracts.................................................26
3.20. Notes and Accounts Receivable.............................28
3.21. Powers of Attorney........................................28
3.22. Insurance and Risk Management.............................28
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3.23. Litigation................................................29
3.24. Product Warranties Defects Liability......................29
3.25. Employees.................................................29
3.26. Employee Benefits.........................................29
3.27. Environment, Health, and Safety...........................31
3.28. Affiliated Transactions...................................33
3.29. Government Contracts......................................33
3.30. Distributors, Customers, Suppliers........................33
3.31. No Illegal Payments, Etc..................................33
3.32. Consents..................................................34
3.33. Disclosure................................................34
3.34. Qualification of Principal Sellers........................34
3.35. Disclaimer of Other Representations and Warranties........34
4. Representations and Warranties of the Buyer...........................34
4.1. Organization of the Buyer and NewSub......................35
4.2. Capitalization and Ownership of the Buyer and NewSub......35
4.3. Authorization of Transaction..............................36
4.4. Noncontravention..........................................36
4.5. Brokers' Fees.............................................36
4.6. Title to Assets...........................................36
4.7. Assets....................................................37
4.8. No Subsidiaries...........................................37
4.9. Financial Statements of the Buyer.........................37
4.10. Indebtedness and Guarantees...............................37
4.11. Absence of Certain Changes and Events....................37
4.12. [Reserved]................................................39
4.13. Legal and Other Compliance................................39
4.14. No Material Adverse Change................................40
4.15. Taxes.....................................................40
4.16. Property, Plant and Equipment.............................41
4.17. Intellectual Property.....................................43
4.18. Inventories...............................................43
4.19. Contracts.................................................43
4.20. Notes and Accounts Receivable.............................45
4.21. Powers of Attorney........................................45
4.22. Insurance and Risk Management.............................45
4.23. Litigation................................................46
4.24. Product Warranties Defects Liability......................46
4.25. Employees.................................................46
4.26. Employee Benefits.........................................46
4.27. Environment, Health, and Safety...........................48
4.28. Affiliated Transactions...................................50
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4.29. Government Contracts......................................50
4.30. Distributors, Customers, Suppliers........................50
4.31. No Illegal Payments, Etc..................................50
4.32. Consents..................................................50
4.33. Disclosure................................................51
4.34. Disclaimer of Other Representations and Warranties..............51
4.35. Interim Operations of NewSub..............................51
5. Covenants.............................................................51
5.1. General...................................................51
5.2. Notices and Consents......................................51
5.3. Operation of Business.....................................52
5.4. Preservation of Business..................................52
5.5. Full Access...............................................52
5.6. Notice of Developments....................................53
5.7. Exclusivity...............................................53
5.8. Access to Records after Closing...........................53
5.9. Future Assurances.........................................53
5.10. Certain Tax Matters.......................................54
5.11. National Bank of Canada Loan Obligations..................55
5.13. Certain Amitek Trade Payables.............................56
5.14. Removal of Non-Amitek Assets and Personnel. .............56
5.15. "Drop Down" of Amitek Assets and Liabilities to NewSub. ..56
6. Conditions to Obligation to Close.....................................57
6.1. Conditions to Obligation of the Buyer.....................57
6.2. Conditions to Obligations of the Principal Sellers........58
7. Noncompetition........................................................61
8. Confidentiality.......................................................61
9. Indemnification.......................................................62
9.1. Exclusive Remedy. .......................................62
9.2. Survival of Representations and Warranties................62
9.3. Indemnity by Principal Sellers. .........................62
9.4. Indemnity by Buyer........................................64
9.5. Matters Involving Third Parties...........................64
9.6. Matters Not Involving Third Party Claims..................66
9.7. Set-Off for Final Judgment of Fraud Only..................66
10. Termination...........................................................66
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10.1. Termination of Agreement.................................67
10.2. Effect of Termination....................................67
11. Miscellaneous.........................................................67
11.1. Press Releases and Public Announcements..................67
11.2. No Third Party Beneficiaries.............................67
11.3. Entire Agreement.........................................68
11.4. Succession and Assignment................................68
11.5. Counterparts.............................................68
11.6. Headings.................................................68
11.7. Notices..................................................68
11.8. Governing Law............................................69
11.9. Consent to Jurisdiction..................................69
11.10. Waiver of Jury Trial.....................................70
11.11. Reliance.................................................70
11.12. Amendments and Waivers...................................70
11.13. Severability.............................................71
11.14. Expenses.................................................71
11.15. Construction.............................................71
11.16. Incorporation of Exhibits and Schedules..................71
11.17. Specific Performance.....................................71
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Exhibits
A-1 - Sellers
A-2 - Restated Certificate of Incorporation of Buyer
A-3 - Amended and Restated By-laws of Buyer
A-4 - Directors and Officers of Buyer
B - Form of Buyer's Note
C-1 - Certificate of Merger
C-2 - Articles of Merger
D-1 - Amitek Financial Statements
D-2 - Buyer Financial Statements
E - Capital Leases
F - Description of Assumed Payables
G - Form of Xxxxxxxx Employment, Consulting and Noncompetition Agreement
H - Instrument of Joinder to Buyer's Stockholders Agreement
I - Form of Opinion of Ropes & Xxxx
J - Waiver of Rights and Amendment under Stockholders Agreement
K - Form of Park Employment Agreement
L - Form of Stock Pledge Agreement
M - Form of Registration Rights Agreement
N - Form of Opinion of Xxxxxxxx & Xxxxxx
O - Form of Waiver of Rights and Amendment under Purchase Agreements
P - Purchase Price Adjustment Methodology
Q - Non-Amitek Assets and Personnel
R - Assignment and Assumption Agreement
S - Adjusted Year End Balance Sheet
Schedules
Disclosure Schedule -- Exceptions to Representations and Warranties
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (the "Agreement") is entered into on
July 30, 1999, by and among Century Electronics Manufacturing, Inc., a Delaware
corporation (the "Buyer"), Amitek Corporation, a Florida corporation ("Amitek"),
and Xxxxx Xx Park and Xxxx Xxxx Park (the "Principal Sellers"). The Buyer,
Amitek and the Principal Sellers collectively are referred to herein as the
"Parties."
This Agreement contemplates a transaction in which Amitek will be merged
with and into Buyer as a result of which Buyer will be the surviving corporation
(the "Merger"), upon the terms and subject to the conditions set forth herein
and pursuant to the General Corporation Law of the State of Delaware (the "DE
Corporation Law") and the Business Corporation Act of the State of Florida (the
"FL Corporation Law"). The Parties intend that the Merger be treated as a
"tax-free" reorganization under section 368(a)(1)(A) of the Code (as hereafter
defined).
Now, therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows:
1. Definitions.
"AA Account" has the meaning set forth in Section 5.3.
"AA Distribution" has the meaning set forth in Section 5.3.
"Action" shall mean any claim, action, cause of action or suit (in
contract or tort or otherwise), arbitration, inquiry, investigation or
proceeding by or before any governmental authority.
"Additional Amount" has the meaning set forth in Section 2.11(d).
"Adjusted Year End Balance Sheet" shall mean the balance sheet attached
hereto as Exhibit S, consisting of the audited balance sheet of Amitek as of the
year ended December 31, 1998.
"Advest" shall mean Advest, Inc., a Delaware corporation, and its
Affiliates.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Affiliated Group" means any affiliated group within the meaning of Code
Section 1504(a) or any similar group defined under a similar provision of state,
local, or foreign law.
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"Agreement" has the meaning set forth in the preamble above.
"Amitek" has the meaning set forth in the preamble above.
"Amitek Common Stock" has the meaning set forth in Section 3.2.
"Amitek Financial Statements" shall have the meaning set forth in Section
3.9.
"Amitek Shares" has the meaning set forth in Section 2.4(a).
"Amitek Stock Options" has the meaning set forth in Section 2.9(a).
"Appeal" shall mean any pleading seeking review or modification of a
Judgment of Fraud by means of any right of appeal as may be established by law
or any application addressed to the discretion of a court (for example, a
petition for a writ of certiorari to the United States Supreme Court or an
application for rehearing or reargument).
"Articles of Merger" means the articles of merger attached as Exhibit C-2
hereto.
"Assignment and Assumption Agreement" has the meaning set forth in Section
5.15.
"Assumed Payables" has the meaning set forth in Section 5.13.
"Award Amount" shall have the meaning given to such term in the definition
of "Judgment of Fraud."
"Bonus and Settlement for Past Services Agreements" shall mean the Bonus
and Settlement for Past Services Agreements by and between Amitek and each of
Xxxxxx X. Xxxxxx, Xxxxxx Xxxxxxx, Xxxxxxxx X. Xxxxxxx and Xxxx X. Xxxxxxxx dated
as of July 29, 1999.
"Bonus Plan" shall mean the 1999 Amitek Bonus Plan, dated as of July 29,
1999.
"Buyer" has the meaning set forth in the preamble above.
"Buyer Financial Statements" shall have the meaning set forth in Section
4.9.
"Buyer's Notes" has the meaning set forth in Section 2.5(b).
"Buyer Shares" has the meaning set forth in Section 2.5(c).
"Century Common Stock" has the meaning set forth in Section 4.2.
"Certificate of Merger" means the certificate of merger attached as
Exhibit C-1 hereto.
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"Certificates" has the meaning set forth in Section 2.8(a).
"Chemical Substance" means any chemical substance, including but not
limited to any: (i) pollutant, contaminant, irritant, chemical, raw material,
intermediate, product, by-product, slag, construction debris; (ii) industrial,
solid, liquid or gaseous toxic or hazardous substance, material or waste; (iii)
petroleum or any fraction thereof; (iv) asbestos or asbestos-containing
material; (v) polychlorinated biphenyl; (vi) chlorofluorocarbons; and, (vii) any
other substance, material or waste, which is identified or regulated under any
Environmental Law or Safety Law, as now and hereinafter in effect, or other
comparable laws.
"Claim Notice" has the meaning set forth in Section 9.6(a).
"Closing" has the meaning set forth in Section 2.6.
"Closing Date" has the meaning set forth in Section 2.6.
"Closing Date Balance Sheet" has the meaning set forth in Section 2.11(a).
"Closing Date Downward Adjustment" has the meaning set forth in Section
2.10(b).
"Closing Date Net Book Value" shall mean the Net Book Value set forth in
the Closing Date Balance Sheet, plus an amount equal to the sum of the
Transaction and Compensation Expenses.
"Closing Date Upward Adjustment" has the meaning set forth in Section
2.10(b).
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means, with respect to any Party, any and all
information concerning the businesses and affairs of such Party other than that
information which is already generally or readily obtainable by the public or is
publicly known or becomes publicly known through no fault of any other Party.
"DE Corporation Law" has the meaning set forth in the preamble above.
"Disclosure Schedule" has the meaning set forth in Section 3.
"Draft Closing Date Balance Sheet" has the meaning set forth in Section
2.11(a).
"EBIT" shall mean consolidated Net Income (i) before (a) interest expense,
whether cash or noncash of the Buyer and its Subsidiaries determined on a
consolidated basis and, (b) provisions for taxes based upon income and (ii)
determined without giving effect to
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extraordinary gains or losses, nonrecurring or unusual gains or losses, or gains
or losses from sales of assets other than from inventory sold in the Ordinary
Course of Business.
"EBITDA" shall mean, for any period, EBIT, adjusted by adding thereto the
amount of all depreciation expense and amortization expense that were deducted
in determining EBIT for such period as determined in accordance with GAAP.
"Effective Date" means the date on which the Effective Time occurs.
"Effective Time" means the time at which the Certificate of Merger shall
be duly filed in the office of the Secretary of State of the State of Delaware
in accordance with Section 251 of the DE Corporation Law (or such later time as
is specified in the Certificate of Merger) and the Articles of Merger shall be
duly filed in the office of the Secretary of State of the State of Florida in
accordance with Section 607.1105 of the FL Corporation Law, which in any event
shall be as soon as practicable immediately following the Closing.
"Employee Benefit Plan" means any (a) nonqualified deferred compensation
or retirement plan or arrangement which is an Employee Pension Benefit Plan, (b)
qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan (including any
Multiemployer Plan), (d) Employee Welfare Benefit Plan or material fringe
benefit plan or program or (e) profit sharing, stock option, stock purchase,
equity, stock appreciation, bonus, incentive deferred compensation, severance
plan or other benefit plan.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA Section
3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA Section
3(l).
"Environment" means soil, land surface or subsurface strata, real
property, surface waters (including navigable waters, ocean waters, streams,
ponds, drainage basins and wetlands), groundwater, water body sediments,
drinking water supply, stream sediments, ambient air (including indoor air),
plant and animal life and any other environmental medium or natural resource.
"Environmental Laws" mean the Comprehensive Environmental Response,
Compensation and Liability Act, the Resource Conservation and Recovery Act, and
the Clean "Air Act, the Clean Water Act, each, as amended or hereinafter in
effect, and any other law or legal requirement, as now or hereinafter in effect,
relating to: (a) the Release, containment, removal, remediation, response,
cleanup or abatement of any sort of any Chemical Substance; (b) the manufacture,
generation, formulation, processing, labeling, distribution, introduction into
commerce, use, treatment, handling, storage, recycling, disposal or
transportation of any Chemical Substance; (c) exposure of persons, including
employees, to any Chemical Substance; (d) the physical structure, use or
condition of a building, facility, fixture or other structure,
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including, without limitation, those relating to the management, use, storage,
disposal, cleanup or removal of asbestos, asbestos-containing materials,
polychlorinated biphenyls or any other Chemical Substance; (e) the pollution,
protection or clean up of the Environment; or (f) noise.
"Environmental Liabilities and Costs" means all Losses incurred: (i) to
comply with any Environmental Law; (ii) as a result of a Release of any Chemical
Substance; or (iii) as a result of any environmental conditions present at,
created by or arising out of the past or present operations of Amitek through
the Closing Date or of any prior owner or operator of a facility or site at
which Amitek now operates or has previously operated.
"Environmental Permit" means any Permit or authorization from any
governmental authority required under, issued pursuant to, or authorized by any
Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Estimated Closing Date Balance Sheet" has the meaning set forth in
Section 2.10(a).
"Estimated Closing Date Net Book Value" shall mean the Net Book Value set
forth in the Estimated Closing Date Balance Sheet, plus an amount equal to the
sum of the Transaction and Compensation Expenses.
"Extremely Hazardous Substance" has the meaning set forth in Section 302
of the Emergency Planning and Community Right-to-Know Act of 1986, as amended.
"Fair Value" shall mean, with respect to each share of the Century Common
Stock (i) as of any date after an Initial Public Offering, the average of the
last per share sale prices of the Century Common Stock on Nasdaq for the 30
trading days immediately prior to such date, as reported by the Wall Street
Journal (Eastern Edition), or (ii) as of any date prior to an Initial Public
Offering, (A) the product of eight multiplied by Buyer's EBITDA for the twelve
full months immediately preceding the Time of Measurement (B) divided by the
number of outstanding shares of Century Common Stock on a fully-diluted basis
(without regard to the exercise price or other consideration due to the Company
upon conversion or exercise of any option, warrant, or convertible security).
"Fiduciary" has the meaning set forth in ERISA Section 3(21).
"Final Judgment of Fraud" shall mean a Judgment of Fraud as to which (i)
no Appeal is pending, (ii) neither the Judgment of Fraud, nor the operation or
effect thereof, has been stayed, reversed, modified, satisfied, vacated or
amended and (iii) the time to file an Appeal has expired, no application for an
extension of the time to file an Appeal is pending, and the time to file an
application or motion for an extension of time to file an Appeal has expired.
"FL Corporation Law" has the meaning set forth in the preamble above.
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"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"Indebtedness" has the meaning set forth in Section 3.10.
"Indemnified Party" has the meaning set forth in Section 9.6(a).
"Indemnifying Party" has the meaning set forth in Section 9.6(a).
"Independent Firm" has the meaning set forth in Section 2.11(a).
"Initial Public Offering" shall mean the initial public offering and sale
of Century Common Stock for cash pursuant to an effective registration statement
on Form S-1 (or any successor form) under the Securities Act.
"Intellectual Property" means, with respect to the Buyer or Amitek, as the
case may be, the entire right, title and interest in and to all proprietary
rights of every kind and nature, including Patents, copyrights, Trademarks, mask
works, trade secrets and proprietary information, all applications for any of
the foregoing, and any license or agreements granting rights related to the
foregoing (i) subsisting in, covering, reading on, directly applicable to or
existing in the Products or the Technology, including, without limitation, all
Intellectual Property of such Party identified in the Disclosure Schedule; (ii)
that are owned, licensed or controlled in whole or in part by such Party and
relate to the business of such Party; or (iii) that are used in or necessary to
the development, manufacture, sales, marketing or testing of the Products.
"Interim Amitek Financials" has the meaning set forth in Section 3.9.
"Interim Buyer Financials" has the meaning set forth in Section 4.9.
"Judgment of Fraud" shall mean a judgment rendered by a court of competent
jurisdiction in favor of the Buyer and against the Principal Sellers (i)
adjudicating that one or more of the Principal Sellers breached a representation
or warranty in Section 3 hereof and such breach constitutes the commission of
common-law fraud by such Principal Sellers in connection with the Merger, (ii)
adjudicating that the Buyer is entitled to indemnification under Section 9.3 for
Losses arising therefrom and (iii) awarding a specific amount of damages in
respect of the Losses based upon or arising out of such commission of common-law
fraud, which amount the Principal Sellers shall not have paid to the Buyer on or
prior to the date of the entry of such judgment (the "Award Amount").
"Knowledge" of an individual means the actual knowledge of such
individual, and knowledge of any other party means the actual knowledge of any
executive officer of such party or knowledge that such executive officer should
have known after reasonable investigation in the normal course of performance of
his or her duties.
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"Laws" means all laws, rules, regulations, codes, injunctions, judgments,
decrees, rulings, interpretations, constitution, ordinance, common law, treaty,
regulations, or orders, of any federal, state, local, municipal and foreign,
international, or multinational governments or administration and all related
agencies.
"Lien" means any mortgage, pledge, lien, security interest, charge, claim,
equitable interest, encumbrance, restriction on transfer, conditional sale or
other title retention device or arrangement (including, without limitation, a
capital lease), transfer for the purpose of subjection to the payment of any
Indebtedness, or restriction on the creation of any of the foregoing, whether
relating to any property or right or the income or profits therefrom; provided,
however, that the term "Lien" shall not include (i) statutory liens for Taxes to
the extent that the payment thereof is not in arrears or otherwise due, (ii)
encumbrances in the nature of zoning restrictions, easements, rights or
restrictions of record on the uses of real property if the same do not detract
from the value of the property encumbered thereby or impair the use of such
property in the business of the company as currently conducted, (iii) statutory
or common law liens to secure landlords, lessors or renters under leases or
rental agreements confined to the premises rented to the extent that no payment
or performance under any such lease or rental agreement is in arrears or is
otherwise due, (iv) deposits or pledges made in connection with, or to secure
payment of, worker's compensation, unemployment insurance, old age pension
programs mandated under applicable laws or other social security regulations and
(v) statutory or common law liens in favor of carriers, warehousemen, mechanics
and materialmen, statutory or common law liens to secure claims for labor,
materials or supplies and other like liens, which secure obligations to the
extent that payment thereof is not in arrears or otherwise due in the case of
(i)-(v), which have been incurred in the Ordinary Course of Business.
"Losses" has the meaning set forth in Section 9.3.
"M&K" means M&K Technology Inc., a Florida corporation.
"Material Adverse Effect" means (a) with respect to Amitek, a material
adverse effect on the business, financial condition, operations, results of
operations or prospects of Amitek, and (b) with respect to the Buyer, a material
adverse effect on the business, financial condition, operations, results of
operations or prospects of the Buyer and its Subsidiaries, taken as a whole.
"Merger" has the meaning set forth in the preamble.
"Merger Consideration" has the meaning set forth in Section 2.5.
"Most Recent Balance Sheet" means, with respect to the Buyer or Amitek, as
the case may be, the balance sheet contained within the Most Recent Financial
Statements of such Party.
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"Most Recent Financial Statements" means, with respect to the Buyer or
Amitek, as the case may be, the audited Financial Statements for the Most Recent
Fiscal Year End of such Party.
"Most Recent Fiscal Year End" has the meaning set forth in Section 3.9 and
Section 4.9, depending upon the Party referenced thereby.
"Multiemployer Plan" has the meaning set forth in ERISA Section 3(37).
"NBC" has the meaning set forth in Section 5.11.
"NBC Loan Documents" has the meaning set forth in Section 5.11.
"Net Book Value" shall mean the excess of total assets over total
liabilities of Amitek, determined on a basis consistent with the Purchase Price
Adjustment Methodology and otherwise in accordance with GAAP applied in a manner
consistent with the preparation of Amitek's Most Recent Financial Statements.
"Net Income" shall mean the consolidated net income (or loss) after
provision for taxes of the Buyer and its Subsidiaries on a consolidated basis.
"NewSub" shall mean Amitek Corporation, a newly-formed Delaware
corporation wholly-owned by the Buyer.
"Notice Period" has the meaning set forth in Section 9.6(b).
"Objections" has the meaning set forth in Section 2.11(a).
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Party" and "Parties" have the meanings set forth in the preamble above.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"Pre-Closing Tax Returns" has the meaning set forth in Section 5.10(b)
hereof.
"Principal Sellers" has the meaning set forth in the preamble above.
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"Products" means, with respect to each of the Buyer or Amitek, as the case
may be, all current products and services of such Party, any subsequent versions
of such products currently being developed, any products currently being
developed by such Party which are designed to supersede, replace or function as
a component of such products, and any upgrades, enhancements, improvements and
modifications to the foregoing.
"Prohibited Transaction" has the meaning set forth in ERISA Section 406
and Code Section 4975.
"Purchase Price Adjustment Methodology" shall mean the statement of the
methodology on which the Parties have agreed that the Estimated Closing Date
Balance Sheet and the Closing Date Balance Sheet shall be prepared, which is
attached hereto as Exhibit P.
"Refund Amount" has the meaning set forth in Section 2.11(d).
"Related Agreements" means the Buyer's Notes, the Xxxxxxxx Employment,
Consulting and Noncompetition Agreement, the Buyer's Stockholders Agreement, the
Park Employment Agreement, the Stock Pledge Agreement, the Registration Rights
Agreement, the Stock Option Agreements, the Bonus Plan, the Bonus and Settlement
for Past Services Agreements and the Assignment and Assumption Agreement.
"Release" means any actual, threatened or alleged spilling, leaking,
pumping, pouring, emitting, dispersing, emptying, discharging, injecting,
escaping, leaching, dumping, or disposing of any Chemical Substance into the
Environment that may cause an Environmental Liability and Cost (including the
disposal or abandonment of barrels, containers, tanks or other receptacles
containing or previously containing any Chemical Substance).
"Reportable Event" has the meaning set forth in ERISA Section 4043.
"Safety Laws" means the Occupational Safety and Health Act and any other
federal, state, local and foreign law, regulation or legal requirement relating
to health or safety, each as now or hereinafter in effect, including any such
law, regulation or legal requirement relating to the (a) exposure of employees
to any Chemical Substance, air quality or working conditions or noise or (b) the
physical structure, use or condition of a building, facility, fixture or other
structure, including, without limitation, those relating to equipment or
manufacturing processes, or the management, use, storage, disposal, cleanup or
removal of any Chemical Substances, air quality or working conditions.
"Safety Liabilities and Costs" means, with respect to each of the Parties,
all Losses incurred to comply with any Safety Law or as a result of any health
or safety conditions present at, created by or arising out of the past or
present operations of such Party through the Closing Date.
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"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Sellers" shall mean the holders of all of the outstanding shares of
capital stock of Amitek, as listed on Exhibit A-1 hereto.
"Set-Off Date" shall mean the tenth business day after the date on which
the Buyer gives the Principal Seller notice certifying, accompanied by an
unqualified opinion of Debevoise & Xxxxxxxx, Xxxxxxxx & Xxxxxx or other counsel
reasonably satisfactory to the Principal Sellers opining, that each of the
criteria for a Final Judgment of Fraud has been satisfied.
"Stock Option Agreements" shall mean the Non-Statutory Stock Option Award
for Xxxx X. Xxxxxxxx and the Non-Statutory Stock Option Award for Xxxxxxxx X.
Xxxxxxx, each of which was executed by Amitek on July 29, 1999.
"Subsidiary" means with respect to any Person, (i) any corporation at
least a majority of whose outstanding voting stock is owned, directly or
indirectly, by such Person or by one or more of its Subsidiaries, or by such
Person and one or more of its Subsidiaries, (ii) any general partnership, joint
venture or similar entity, at least a majority of whose outstanding partnership
or similar interests shall at the time be owned by such Person, or by one or
more of its Subsidiaries, or by such Person and one or more of its Subsidiaries
and (iii) any limited partnership of which such Person or any of its
Subsidiaries is a general partner. For the purposes of this definition, "voting
stock" means shares, interests, participations or other equivalents in the
equity interest (however designated) in such Person having ordinary voting power
for the election of a majority of the directors (or the equivalent) of such
Person, other than shares, interests, participations or other equivalents having
such power only by reason of contingency.
"Surviving Corporation" has the meaning set forth in Section 2.1.
"Tax" or "Taxes" means (i) any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental, customs duties, capital
stock, franchise, profits, withholding, social security (or similar, including
FICA), unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not, and (ii) any liability for the
payment of any amount of the type described in the immediately preceding clause
(i) as a result of (A) membership in an affiliated, consolidated or combined
group at any time on or prior to the Closing Date or (B) liability as a
transferee or successor, by contract or otherwise.
"Tax Distributions" shall have the meaning set forth in Section 5.3.
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"Tax Return" shall have the meaning set forth in Section 3.15(a) and
Section 4.15(a), depending upon the Party referenced thereby.
"Technology" means all inventions, copyrightable works, discoveries,
innovations, know-how, information (including ideas, research and development,
know-how, formulas, compositions, processes and techniques, technical data,
designs, drawings, specifications, customer and supplier lists, pricing and cost
information, business and marketing plans and proposals, documentation, and
manuals), computer software, computer hardware, integrated circuits and
integrated circuit masks, electronic, electrical and mechanical equipment and
all other forms of technology, including improvements, modifications,
derivatives or changes, whether tangible or intangible, embodied in any form,
whether or not protectible or protected by patent, copyright, mask work right,
trade secret law or otherwise.
"Third Party Claim" has the meaning set forth in Section 9.5(a).
"Time of Measurement" shall mean the first day of the month immediately
preceding the month in which Fair Value is being measured.
"Trademarks" means any trademarks, service marks, trade dress, and logos,
together with all translations, adaptations, derivations, and combinations
thereof and including all goodwill associated therewith.
"Transaction and Compensation Expenses" means the sum of (i) the fees and
expenses of PricewaterhouseCoopers LLP, Xxxxxxxx X. Xxxx, CPA, Advest and Ropes
& Xxxx incurred by Amitek, whether or not then paid, in connection with the
Merger and the proposed Initial Public Offering, to the extent expensed by
Amitek in periods prior to and including the Closing Date and so reflected in
the Estimated Closing Date Balance Sheet or the Closing Date Balance Sheet, as
the case may be, (ii) any amounts relating to the Bonus and Settlement for Past
Services Agreements and the Bonus Plan expensed by Amitek in periods prior to
and including the Closing Date and so reflected in the Estimated Closing Date
Balance Sheet or the Closing Date Balance Sheet, as the case may be, (iii) any
AA Distribution to the Sellers pursuant to Section 5.3 that has been reflected
in the Estimated Closing Date Balance Sheet or the Closing Date Balance Sheet,
as the case may be, as a reduction to the Net Book Value, and (iv) the amount of
any fees, expenses or other costs relating to obtaining the consent or other
approval of any third parties (including without limitation, Amitek's landlord,
lenders, capital lessors and insurers) in connection with the Merger, to the
extent expensed by Amitek in periods prior to and including the Closing Date and
so reflected in the Estimated Closing Date Balance Sheet or the Closing Date
Balance Sheet, as the case may be.
"Year End Net Book Value" shall mean $1,739,000.
2. The Merger.
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2.1. Constituent Corporations; Surviving Corporation. Buyer and Amitek
shall be the constituent corporations to the Merger. Subject to the terms and
conditions of this Agreement, at the Effective Time, Amitek shall be merged with
and into Buyer in accordance with the DE Corporation Law and the FL Corporation
Law, and Buyer shall be the surviving corporation of the Merger (the "Surviving
Corporation"). At the Effective Time, the identity and separate existence of
Amitek shall cease, and the Surviving Corporation shall continue its corporate
existence under the laws of the State of Delaware. Without limiting the
generality of the foregoing, from and after the Effective Time, the Surviving
Corporation shall possess all of the rights, privileges, powers, franchises,
properties and other interests of Buyer and Amitek.
2.2. Certificate of Incorporation, By-Laws and Name of the Surviving
Corporation. From and after the Effective Time and thereafter until amended as
provided by law, (i) the Certificate of Incorporation of the Surviving
Corporation shall be the Restated Certificate of Incorporation of Buyer
immediately prior to the Merger in the form annexed hereto as Exhibit X- 0, (xx)
the Bylaws of the Surviving Corporation shall be the Amended and Restated
By-laws of Buyer in the form annexed hereto as Exhibit A-3, and (iii) the name
of the Surviving Corporation shall be "Century Electronics Manufacturing, Inc."
2.3. Directors and Officers of the Surviving Corporation. The directors
and officers of the Surviving Corporation immediately following the Merger shall
be as set forth in Exhibit A-4, and all such directors and officers shall hold
office until their respective successors are duly elected and qualified, or
until their earlier death, resignation or removal.
2.4. Conversion of the Amitek Shares. At the Effective Time by virtue of
the Merger and without any action on the part of the holders thereof:
(a) Each share of Amitek capital stock (each, an "Amitek Share" and
collectively, the "Amitek Shares") issued and outstanding immediately
prior to the Effective Time (other than any Amitek Shares to be canceled
pursuant to Section 2.4(b)) shall be canceled and shall be converted
automatically into the right to receive the Merger Consideration (as
defined in Section 2.5 below).
(b) Each Amitek Share held in the treasury of Amitek immediately
prior to the Effective Time shall be canceled without any conversion
thereof and no payment or distribution shall be made with respect thereto.
(c) Each share of Buyer's common stock, par value $.01 per share,
issued and outstanding immediately prior to the Effective Time shall
remain issued and outstanding and shall constitute one validly issued,
fully paid and nonassessable share of common stock, par value $.01 per
share, of the Surviving Corporation.
(d) Each share of Buyer's preferred stock, par value $.01 per share,
issued and outstanding immediately prior to the Effective Time shall
remain issued and outstanding
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and shall constitute one validly issued, fully paid and nonassessable
share of preferred stock, par value $.01 per share, of the Surviving
Corporation.
2.5. Merger Consideration. The Buyer agrees to pay to the Sellers at the
Closing, subject to adjustment pursuant to Sections 2.10 and 2.11, the aggregate
amount of merger consideration (the "Merger Consideration") consisting of:
(a) $5,654,000 in cash payable by wire transfer to the Sellers in
the amounts set forth opposite each Seller's name on Exhibit A-1 and in
accordance with written instructions of such Seller given to the Buyer at
least two business days prior to the Closing Date;
(b) the execution and delivery to the Sellers of Buyer's Secured
Promissory Notes ("Buyer's Notes") in the aggregate principal amount of
$7,219,000 (each individual note to be in the amount set forth opposite
each Seller's name on Exhibit A-1 and to be in the form of Exhibit B
hereto); and
(c) 2,127,548 shares of common stock (the "Buyer Shares"), $.01 par
value per share, of the Buyer, computed as set forth on the 7/30/99
spreadsheet agreed to by the Parties (each Seller to receive the number of
shares set forth opposite such Seller's name on Exhibit A-1).
2.6. The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Ropes & Xxxx in
Boston, Massachusetts, commencing at 10:00 a.m. eastern time on July 30, 1999 or
such other date as the Parties may mutually determine (the "Closing Date").
2.7. Deliveries at the Closing. At the Closing, (a) the Principal Sellers
will deliver to the Buyer the various certificates, instruments and documents
referred to in Section 2.8 and Section 6.1 below, and (b) the Buyer will deliver
to the Sellers the various certificates, instruments and documents referred to
in Section 6.2 below and the Merger Consideration as set forth in Section 2.5
above.
2.8. Surrender of Amitek Shares; Stock Transfer Books.
(a) At the Closing, each Seller shall surrender the certificates
evidencing ownership of the Amitek Shares (the "Certificates") to the
Surviving Corporation and shall be entitled to receive in exchange
therefor the Merger Consideration for each Amitek Share formerly evidenced
by each such Certificate, payable to such holder in accordance with the
provisions of Sections 2.4 and 2.5 hereof, and such Certificate shall then
be canceled. If payment of the Merger Consideration is to be made to a
Person other than the Person in whose name the surrendered Certificate is
registered on the stock transfer books of Amitek, it shall be a condition
of payment that the Certificate so
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surrendered shall be endorsed properly or otherwise be in proper form for
transfer and that the Person requesting such payment shall have paid all
transfer and other taxes required by reason of the payment of the Merger
Consideration to a Person other than the registered holder of the
Certificate surrendered or shall have established to the satisfaction of
the Surviving Corporation that such taxes either have been paid or are not
applicable.
(b) If any Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the Person claiming such
Certificate to be lost, stolen or destroyed and subject to such other
conditions as the Board of Directors of the Surviving Corporation may
impose, the Surviving Corporation shall issue in exchange for such lost,
stolen or destroyed Certificate the Merger Consideration deliverable in
respect thereof as determined in accordance herewith. When authorizing
such issue of the Merger Consideration in exchange therefor, the Board of
Directors of the Surviving Corporation (or any authorized officer thereof)
may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed Certificate
to give the Surviving Corporation a bond in such sum as the Board of
Directors may direct as indemnity against any claim that may be made
against the Surviving Corporation with respect to the Certificate alleged
to have been lost, stolen or destroyed.
(c) At the close of business on the Effective Date, the stock
transfer books of Amitek shall be closed, and no transfer of Amitek Shares
shall thereafter be made on such books. From and after the Effective Time
the holders of Amitek Shares outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to such shares
except as otherwise provided herein or by applicable law.
2.9. Amitek Stock Options.
(a) At the Effective Time, the outstanding options to purchase duly
authorized Amitek Common Stock granted to Xxxx X. Xxxxxxxx and Xxxxxxxx X.
Xxxxxxx under the Stock Option Agreements (the "Amitek Stock Options"),
shall be assumed by Buyer and shall constitute options to acquire (i) in
the case of Xxxx X. Xxxxxxxx, 113,773 shares of Century Common Stock at an
exercise price of $1.31 per share, and (ii) in the case of Xxxxxxxx X.
Xxxxxxx, 34,132 shares of Century Common Stock at an exercise price of
$1.31 per share, in each case on the same terms and conditions set forth
in their respective Stock Option Agreement.
(b) At or before the Effective Time, Buyer shall take all corporate
action necessary to authorize and reserve for issuance a sufficient number
of shares of Century Common Stock for delivery pursuant to the terms set
forth in this Section 2.9 and Sections 5.10.5 and Section 9.
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(c) As soon as practicable following the closing of an Initial
Public Offering, subject to any applicable limitations under the
Securities Act, Buyer shall file a Registration Statement on Form S-8 (or
any successor form), with respect to the shares of Century Common Stock
issuable upon exercise of the Amitek Stock Options, and the Buyer shall
use all reasonable efforts to maintain the effectiveness of such
registration statement (and maintain the current status of the prospectus
or prospectuses relating thereto) for so long as such options shall remain
outstanding.
2.10. Closing Date Purchase Price Adjustment.
(a) Three business days prior to the Closing Date, the Principal
Sellers will deliver to the Buyer a draft balance sheet (the "Estimated Closing
Date Balance Sheet") for Amitek as of the close of business on the Closing Date,
prepared (to the extent practicable given its estimated nature) in accordance
with the Purchase Price Adjustment Methodology.
(b) In the event that the Estimated Closing Date Net Book Value
exceeds 110% of the Year End Net Book Value, the Purchase Price shall be
increased in an amount equal to the amount by which such Estimated Closing Date
Net Book Value exceeds 110% of the Year End Net Book Value (the "Closing Date
Upward Adjustment"). In the event that the Estimated Closing Date Net Book Value
is less than 90% of the Year End Net Book Value, the Purchase Price shall be
reduced by an amount equal to the amount by which such Estimated Closing Date
Net Book Value is less than 90% of the Year End Net Book Value (the "Closing
Date Downward Adjustment"). Any increase or reduction to the Purchase Price
pursuant to this Section 2.10 shall be implemented by proportionately adjusting
each of the three elements of Merger Consideration provided for in Sections
2.5(a)-(c), such that the value of each of the three elements constitutes the
same percentage of the value of the aggregate Merger Consideration as was the
case prior to such adjustment, with the Century Common Stock being valued as set
forth in the valuation opinion contemplated by Section 6.2(m) hereof.
Notwithstanding anything to the contrary in this Agreement, in no event shall
any adjustment to the Merger Consideration under this Section 2.10 exceed
$1,000,000 in the aggregate.
2.11. Post-Closing Purchase Price Adjustment.
(a) Whether or not any adjustment to the Merger Consideration has
been made pursuant to Section 2.10 hereof, within 60 days after the Closing
Date, the Buyer may prepare and deliver to the Principal Sellers a balance sheet
(the "Draft Closing Date Balance Sheet") for Amitek as of the close of business
on the Closing Date, prepared in accordance with the Purchase Price Adjustment
Methodology and specifically identifying line item by line item any differences
from the Estimated Closing Date Balance Sheet. If the Buyer fails to deliver the
Draft Closing Date Balance Sheet within such 60-day period, this Section 2.11
shall have no further force and effect. If the Principal Sellers have any
objections to the Draft Closing Date Balance Sheet, they will deliver a detailed
statement describing their objections (the "Objections") to the Buyer within 20
days after receiving the Draft Closing Date Balance
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Sheet. The Buyer and the Principal Sellers will use reasonable efforts to
resolve any Objections themselves. If the Buyer and the Principal Sellers do not
obtain a final resolution within 20 days after the Buyer has received the
statement of Objections, however, the Buyer and the Principal Sellers will
select an accounting firm mutually acceptable to them to resolve any unresolved
Objections. If the Buyer and the Principal Sellers are unable to agree on the
choice of an accounting firm, they will select a nationally-recognized
accounting firm by lot (after excluding any accounting firm that has performed
services for the Buyer or any of the Principal Sellers within the last three
years). The review of any accounting firm selected pursuant to the prior two
sentences (the "Independent Firm") shall be made in accordance with the
standards set forth in this Section 2.11 and the Purchase Price Adjustment
Methodology, and shall be limited to the Objections not previously resolved by
the Principal Sellers and the Buyer. The determination of the Independent Firm
(i) shall be made in accordance with the standards set forth in this Section
2.11 and the Purchase Price Adjustment Methodology, (ii) shall be set forth in
writing and (iii) shall be conclusive and binding upon the Principal Sellers and
the Buyer, shall have the legal effect of an arbitral award and shall be subject
only to the judicial review permitted by the Federal Arbitration Act. Judgment
on the ruling of the Independent Firm may be entered and enforced in any court
having jurisdiction over the Parties and their assets. The Buyer shall revise
the Draft Closing Date Balance Sheet as appropriate to reflect the resolution of
any Objections pursuant to this Section 2.11. The "Closing Date Balance Sheet"
shall mean the Draft Closing Date Balance Sheet together with any revisions
thereto made pursuant to this Section 2.11.
(b) In the event that the Principal Sellers and the Buyer submit any
unresolved Objections to the Independent Firm for resolution as provided in
Section 2.11(a) above, the Buyer and the Principal Sellers will share
responsibility for the fees and expenses of the Independent Firm as follows:
(i) if the Independent Firm resolves all of the remaining
Objections in favor of the Buyer, the Principal Sellers will be
responsible for all of the fees and expenses of the Independent Firm;
(ii) if the Independent Firm resolves all of the remaining
Objections in favor of the Principal Sellers, the Buyer will be
responsible for all of the fees and expenses of the Independent Firm; and
(iii) if the Independent Firm resolves some of the remaining
Objections in favor of the Buyer and some in favor of the Principal
Sellers, the Principal Sellers and the Buyer will share responsibility for
the fees and expenses of the Independent Firm pro rata, based on the
relative economic value of the Objections resolved in favor of the
Principal Sellers and the Buyer, respectively.
(c) The Buyer will make the work papers and back-up materials used
in preparing the Draft Closing Date Balance Sheet, and the books, records, and
financial staff of
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Amitek, available to the Principal Sellers and their accountants and other
representatives at reasonable times and upon reasonable notice at any time
during (A) the preparation by the Buyer of the Draft Closing Date Balance Sheet,
(B) the review by the Principal Sellers of the Draft Closing Date Balance Sheet,
and (C) the resolution by the Principal Sellers and the Buyer of any Objections.
(d) After completion of the procedures set forth above:
(i) In the event that the Closing Date Net Book Value exceeds
110% of the Year End Net Book Value, the Buyer will pay to the Sellers, as
additional Merger Consideration, an amount (the "Additional Amount") equal
to the positive difference between (X) the amount by which such Closing
Date Net Book Value exceeds 110% of the Year End Net Book Value, plus the
amount of any Closing Date Downward Adjustment erroneously made minus (Y)
the amount of any Closing Date Upward Adjustment, within three business
days after the date on which the Closing Date Net Book Value finally is
determined pursuant to Section 2.11(a) above; provided, that in the event
that the above calculation of the Additional Amount results in a negative
number (the "Excessive Upward Adjustment Amount"), the Sellers shall pay
to the Buyer the Excessive Upward Adjustment Amount pursuant to clause
(ii) of this subsection (d). The Additional Amount shall be allocated
among the Sellers in proportion to their respective shares of the Merger
Consideration on the Closing Date and shall be paid 50% in cash or
immediately available funds and 50% by the Buyer issuing or transferring
to the Sellers validly issued, fully paid and nonassessable shares of
Century Common Stock, such stock to be valued at its Fair Value as of the
time of payment. In no event shall the Additional Amount plus any Closing
Date Upward Adjustment pursuant to Section 2.10 above exceed $1,000,000 in
the aggregate.
(ii) In the event that the Closing Date Net Book Value is less
than 90% of the Year End Net Book Value, the Sellers shall pay to the
Buyer, as a reduction in the Merger Consideration, an amount (the "Refund
Amount") equal to the positive difference between (X) the amount by which
such Closing Date Net Book Value is less than 90% of the Year End Net Book
Value, plus the amount of any Closing Date Upward Adjustment erroneously
made minus (Y) the amount of any Closing Date Downward Adjustment, within
three business days after the date on which the Closing Date Net Book
Value finally is determined pursuant to Section 2.11(a) above; provided,
that in the event the above calculation of the Refund Amount results in a
negative number (the "Excessive Downward Adjustment Amount"), the Buyer
shall pay to the Sellers the Excessive Downward Adjustment Amount pursuant
to clause (i) of this subsection (d). The Refund Amount shall be paid (A)
if prior to the closing of an Initial Public Offering, at the option of
the Sellers, by either: (i) payment of the full Refund Amount in cash or
immediately available funds, or (ii) permitting the Buyer to offset the
Refund Amount against the outstanding principal balance of, and any
accrued and unpaid interest on, the Buyer's Notes held by the Sellers (in
inverse order of
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maturity) and, to the extent the outstanding principal balance of, and any
accrued and unpaid interest on, such Buyer's Notes is less than the Refund
Amount, then such deficit shall be paid by the Sellers in cash or
immediately available funds; or (B) if following the closing of an Initial
Public Offering, (i) in the manner set forth in clause (A) (ii) above, if
any principal of or interest on the Buyer's Notes remain unpaid at that
time, or (ii) at the option of the Buyer, by either: (X) payment of the
Refund Amount in cash or immediately available funds, or (Y) payment of
the Refund Amount in a combination of the payments described in clause
(B)(ii)(X) above and the transfer and assignment by the Sellers to the
Buyer of shares of Century Common Stock, such stock to be valued at its
Fair Value as of the time of such payment and the value of such stock in
no event to exceed 50% of the aggregate payment being made.
Notwithstanding anything to the contrary in this Agreement, in no event
shall the Refund Amount plus any Closing Date Downward Adjustment pursuant
to Section 2.10 above exceed $1,000,000 in the aggregate.
2.12. Further Assurances. If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other acts or things are necessary or
desirable to vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation, its right, title or interest in or to any of the rights, properties
or assets of Amitek or Buyer or otherwise to carry out the purposes of this
Agreement, the Surviving Corporation and its officers and directors shall be
authorized to execute and deliver, in the name and on behalf of the Amitek or
Buyer, all such deeds, bills of sale, assignments and assurances and to do, in
the name and on behalf of the Amitek or Buyer, all such other acts and things
necessary or desirable to vest, perfect or confirm any and all right, title or
interest in, to or under such rights, properties or assets in the Surviving
Corporation or otherwise to carry out the purposes of this Agreement.
3. Representations and Warranties of the Principal Sellers. The Principal
Sellers jointly and severally represent and warrant to the Buyer that the
statements contained in this Section 3, in so far as they relate to Amitek, the
Principal Sellers or the Amitek Shares, are correct and complete as of the date
of this Agreement and, unless a date is specified in such representation and
warranty, will be correct and complete as of the Closing Date (as though made
then and as though the Closing Date were substituted for the date of this
Agreement throughout this Section 3), except as set forth in the disclosure
schedule accompanying this Agreement (the "Disclosure Schedule"). The Disclosure
Schedule will be arranged in paragraphs corresponding to the lettered and
numbered paragraphs contained in this Section 3 and in Section 4 below.
3.1. Organization of Amitek. Amitek is a Florida corporation, duly
organized, validly existing, and in good standing under the laws of the State of
Florida. Copies of the articles of incorporation and bylaws of Amitek as amended
to date have been heretofore delivered to Buyer and are accurate and complete.
Amitek is qualified to do business and is in good standing as a foreign
corporation in each jurisdiction listed in Section 3.1 of the Disclosure
Schedule, which such jurisdictions are the only jurisdictions where the nature
of the activities conducted by it or
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the character of the property owned, leased or operated by it make such
qualification necessary or appropriate except for those jurisdictions where the
failure to be so qualified will not have a Material Adverse Effect on Amitek.
3.2. Capitalization and Ownership of Amitek. The authorized capital stock
of Amitek consists of 1,000 shares of common stock, $1.00 par value per share
(the "Amitek Common Stock"). As of the date hereof, there are issued and
outstanding 1,000 shares of Amitek Common Stock, of which no shares are held as
treasury stock, and, except as set forth in Section 3.2 of the Disclosure
Schedule, all of such shares are held of record and beneficially by the persons
and in the respective amounts set forth on Section 3.2 of the Disclosure
Schedule, free and clear of any Liens. All of the outstanding shares of capital
stock of Amitek have been validly issued, are fully paid and nonassessable.
Except as set forth in Section 3.2 to the Disclosure Schedule, there are no
agreements restricting the transfer of, or affecting the rights of any holder
of, the Amitek Shares, there are no preemptive rights on the part of any holder
of any class of securities of Amitek and no outstanding options, warrants,
rights, or other agreements or commitments of any kind obligating Amitek,
contingently or otherwise, to issue or sell any shares of its capital stock or
any securities or obligations convertible into, or exchangeable for, any shares
of its capital stock, and no authorization therefor has been given. Section 3.2
of the Disclosure Schedule sets forth the names of the record holders of all
outstanding options, warrants or other rights to purchase, sell or otherwise
dispose of, or rights to exchange or convert into, any shares of Amitek's
capital stock and the number of shares, exercise prices and expiration dates of
such options, warrants or other rights. Except as set forth in Section 3.2 of
the Disclosure Schedule, the Sellers own beneficially and of record all of the
Amitek Shares, free and clear of all Liens and each Seller has full right, power
and authority to transfer the Amitek Shares in the respective amounts as set
forth on Exhibit A-1 to Buyer, free and clear of any Liens.
3.3. Authorization of Transaction. Each of the Sellers and Amitek has the
legal capacity, power and authority (including full corporate power and
authority) to execute and deliver this Agreement and the Related Agreements
being executed by each of them and to perform their respective obligations
hereunder and thereunder. The board of directors of Amitek has duly authorized
the execution, delivery and performance of this Agreement and the Related
Agreements being executed by Amitek. All corporate and other actions or
proceedings to be taken by or on the part of each of the Sellers and Amitek to
authorize and permit the execution and delivery by them of this Agreement and
the Related Agreements and the instruments required to be executed and delivered
by them pursuant hereto and thereto, the performance by them of their respective
obligations hereunder and thereunder, and the consummation by them of the
transactions contemplated herein and therein, have been duly and properly taken.
This Agreement and each of the Related Agreements being executed by the Sellers
and Amitek has been duly executed and delivered by them and constitutes the
legal, valid and binding obligation of them, enforceable in accordance with its
terms and conditions.
3.4. Noncontravention. Except as set forth in Section 3.4 of the
Disclosure Schedule, neither the execution and the delivery of this Agreement
and the Related Agreements being
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executed by the Sellers and Amitek, nor the consummation of the transactions
contemplated hereby or thereby (including any of the agreements and instruments
required to be delivered pursuant to Section 2 above), will (i) violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency, or
court to which the Sellers or Amitek or any of their property is subject or any
provision of the charter or by-laws of Amitek or (ii) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which Amitek or any of the Sellers is a party or by which any of
them is bound or to which any of their assets is subject (or result in the
imposition of any Lien upon any of their assets), which in any case could have a
Material Adverse Effect on Amitek. Except as set forth in Section 3.4 of the
Disclosure Schedule, none of Amitek or the Sellers needs to give any notice to,
make any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement except for the filing of the
Certificate of Merger with the Secretary of State of Delaware and the filing of
the Articles of Merger with the State of Florida.
3.5. Brokers' Fees. Except as set forth in Section 3.5 of the Disclosure
Schedule, none of Amitek or the Sellers has any liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Buyer or Amitek could
become liable or obligated.
3.6. Title to Assets. Except as set forth in Section 3.6 of the Disclosure
Schedule, Amitek has good title to, or a valid and binding leasehold interest
in, the properties and assets used by it, located on its premises, or reflected
on the Most Recent Balance Sheet or acquired after the date thereof, free and
clear of all Liens, except for properties and assets disposed of in the Ordinary
Course of Business since the date of the Most Recent Balance Sheet.
3.7. Assets. Except as set forth in Section 3.7 of the Disclosure
Schedule, the assets, properties and rights of Amitek reflected in the Most
Recent Financial Statements comprise all of the assets, properties and rights of
every type and description, real, personal, tangible and intangible used by
Amitek in the conduct of its business as currently conducted.
3.8. No Subsidiaries. Amitek has no Subsidiaries, and does not own,
directly or indirectly, any capital stock of, any partnership or other ownership
interest in, or any other security issued by, any other corporation,
organization, association or entity.
3.9. Amitek Financial Statements. Attached hereto as Exhibit D-1 are the
following financial statements (collectively the "Amitek Financial Statements"):
(i) The Amitek Group audited Combined Balance Sheet as of December 31, 1997,
(ii) The Amitek Group audited Combined Balance Sheet as of December 31, 1998,
Combined Statement of Operations and Retained Earnings for the year ended
December 31, 1998 and Combined Statement of Cash
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Flows for the year ended December 31, 1998 (the "Most Recent Fiscal Year End"),
and (iii) the unaudited Amitek Corporation Balance Sheet as of March 31, 1999
and the unaudited Amitek Corporation Statement of Operations for the three
months ended March 31, 1999 (the "Interim Amitek Financials"). The Amitek
Financial Statements (including, with respect to the audited financial
statements only, the notes thereto) have been prepared in accordance with GAAP
applied on a consistent basis throughout the periods covered thereby and present
fairly the financial condition of Amitek (or the Amitek Group (as defined
therein) as the case may be) in all material respects as of such dates and the
results of operations of Amitek (or the Amitek Group, as the case may be) for
such periods and are consistent with the books and records of Amitek (or the
Amitek Group, as the case may be), subject to normal and recurring year end
adjustments and in the case of the unaudited financial statements, the absence
of notes.
3.10. Indebtedness and Guarantees. Except as set forth in the Most Recent
Financial Statements and in Section 3.10 of the Disclosure Schedule, Amitek has
no indebtedness for borrowed money or for the deferred purchase price of
property or services (other than trade payables and other accrued current
liabilities incurred in the Ordinary Course of Business), or capital lease
obligations, conditional sale or other title retention agreements
("Indebtedness"). Amitek is not a guarantor or otherwise liable for any
liability or obligation of any other Person.
3.11. Absence of Certain Changes and Events. Since the Most Recent Fiscal
Year End, and except as disclosed in Section 3.11 of the Disclosure Schedule or
set forth in the Interim Amitek Financials, Amitek has conducted its business
only in the Ordinary Course of Business and there has not been:
(a) any sale, lease, transfer, or assignment of any of Amitek's
assets, tangible or intangible, other than sales of inventory for a fair
consideration in the Ordinary Course of Business;
(b) any agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) entered into other than in
the Ordinary Court of Business and in an amount not in excess of $25,000;
(c) acceleration, termination, modification, or cancellation of any
agreement, contract, lease, or license (or series of related agreements,
contracts, leases, and licenses) to which Amitek is a party or by which
Amitek is bound;
(d) creation or imposition of any Lien upon Amitek's assets,
tangible or intangible;
(e) made any capital expenditure (or series of related capital
expenditures) involving more than $25,000 singly or $75,000 in the
aggregate;
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(f) made any capital investment in, any loan to, or any acquisition
of the securities or assets of, any other Person (or series of related
capital investments, loans, and acquisitions);
(g) any issuance of any note, bond, or other debt security or
created, incurred, assumed, or guaranteed any indebtedness for borrowed
money or capitalized lease obligation;
(h) any delay or postponement of the payment of accounts payable and
other liabilities outside the Ordinary Course of Business;
(i) any cancellation, compromise, waiver, or release any right or
claim or Indebtedness (or series of related rights and claims);
(j) any grant of any license or sublicense of any rights or modified
any rights under or with respect to, or entered into any settlement
regarding any infringement of its rights to, any Intellectual Property;
(k) any issuance, sale, or other disposition of any of its capital
stock, or grant of any options, warrants, or other rights to purchase or
obtain (including upon conversion, exchange, or exercise) any capital
stock;
(l) any dividend or distribution (whether in cash or in kind) or
repurchase, redemption or retirement of any of its capital stock, except
to the extent provided in Section 5.3;
(m) any damage, destruction, or loss (whether or not covered by
insurance) to its property;
(n) any loan to, or enter into any other transaction with its
directors, officers, and employees outside the Ordinary Course of
Business;
(o) any employment contract or collective bargaining agreement,
written or oral, or modification or change of the terms of any existing
such contract or agreement;
(p) any increase, modification or change in the compensation of any
of the officers or employees of Amitek outside the Ordinary Course of
Business;
(q) any adoption, amendment modification or termination of any
Employee Benefit Plan of any of director, officer, or employee of Amitek
(or taken any such action with respect to any other Employee Benefit
Plan);
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(r) any payment pursuant to any Employee Benefit Plan or other plan,
contract or commitment for the benefit of any of the directors, officers
and employees of Amitek;
(s) any pledge to make or make any charitable or other capital
contribution outside the Ordinary Course of Business;
(t) any amount paid to any third party with respect to any liability
(excluding any costs and expenses incurred or which may be incurred in
connection with this Agreement and the transactions contemplated hereby)
other than in the Ordinary Course of Business;
(u) any modification or change of the application of GAAP from the
manner in which it was applied in the Most Recent Financial Statements;
(v) any other material adverse occurrence, event, incident, action,
failure to act, or transaction outside the Ordinary Course of Business
involving Amitek; and
(w) any commitment by Amitek or the Sellers to any of the foregoing.
3.12. [Reserved]
3.13. Legal and Other Compliance. Except as set forth in Section 3.13 of
the Disclosure Schedule, Amitek is in compliance in all material respects with
all applicable Laws the violation of which, either singularly or in the
aggregate, could have a Material Adverse Effect on Amitek and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand, or notice
has been filed or commenced against Amitek alleging any failure so to comply.
Neither the transfer of the Amitek Shares to the Buyer or consummation of the
transactions contemplated hereby conflicts with the rights of any other Person
or violates, or with the giving of notice or the passage of time or both will
violate, conflict with or result in a default, right to accelerate or loss of
rights under, any terms or provisions of Amitek's charter or by-laws or any
Lien, lease, license, agreement, understanding, law, ordinance, rule or
regulation, or any order, judgment or decree to which Amitek is a party or by
which it may be bound, in each case, which violation, conflict, default, right
to accelerate or loss of rights, either singularly or in the aggregate, could
have a Material Adverse Effect on Amitek.
3.14. No Material Adverse Change. Since the date of the Most Recent
Financial Statements, Amitek has not experienced any change which has resulted
in a Material Adverse Effect on Amitek and, to the Principal Sellers' and
Amitek's Knowledge, no event has occurred that may result in such a Material
Adverse Effect on Amitek.
3.15. Taxes. Except as set forth in Section 3.15 of the Disclosure
Schedule:
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(a) Amitek has filed all material returns, declarations of estimated
tax, tax reports, information returns and statements required to be filed
by it prior to the Closing Date relating to any material Taxes with
respect to any income, assets or operations of Amitek, other than those
for which extensions shall have been granted prior to the Closing Date
(collectively, the "Tax Returns");
(b) Amitek has made available to the Buyer correct and complete
copies of all state and federal income Tax Returns, examination reports
and statements of deficiencies assessed against or agreed to by Amitek for
the last three taxable years;
(c) Amitek has paid, or made adequate provision in accordance with
GAAP, for the payment of all Taxes for the periods ending on or before the
Closing Date;
(d) Amitek has not waived any statute of limitations affecting any
Tax liability or agreed to any extension of time during which a Tax
assessment or deficiency assessment may be made;
(e) there are no pending examinations by any taxing authority of any
Tax Returns of Amitek and Amitek has not received written notice of any
unresolved questions or claims concerning its Tax liability;
(f) Amitek is not and has not been a party to any Tax allocation or
sharing agreement or a member of an Affiliated Group filing a consolidated
federal income Tax Return. Amitek has no liability for the Taxes of any
other Person under Treas. Reg. Section 1.1502-6 (or any similar provision
of state, local or foreign law), as a transferee or successor, by
contract, or otherwise;
(g) Amitek has withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any
shareholder, employee, creditor, independent contractor, or other third
party;
(h) other than Liens for Taxes not yet due and payable, there are no
Liens on any of the assets of Amitek that arose in connection with any
failure (or alleged failure) to pay any Tax; and
(i) Amitek has duly elected to be treated as an S corporation within
the meaning of the subchapter S of the Code and for state Tax law
purposes, except in those states which do not recognize S corporation
status.
3.16. Property, Plant and Equipment.
(a) Amitek does not own any real property.
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(b) Section 3.16(b) of the Disclosure Schedule lists all real
property leased or subleased to Amitek. Amitek has delivered to the Buyer
correct and complete copies of the leases and subleases listed in Section
3.16(b) of the Disclosure Schedule (as amended to date) which such leases
and subleases have not been amended or modified since the date thereof.
Except as set forth in Section 3.16(b) of the Disclosure Schedule, with
respect to each lease and sublease listed therein:
(i) the lease or sublease is legal, valid, binding,
enforceable, and in full force and effect;
(ii) the lease or sublease will continue to be legal, valid,
binding, enforceable, and in full force and effect on materially
identical terms following the consummation of the transactions
contemplated hereby;
(iii) neither the Principal Sellers nor Amitek nor to their
Knowledge any other party to the lease or sublease, is in breach or
default in any material respect, and, to their Knowledge, no event
has occurred which, with notice or lapse of time, would constitute a
breach or default in any material respect or permit termination,
material modification, or acceleration thereunder;
(iv) no party to the lease or sublease has repudiated any
provision thereof;
(v) there are no disputes, oral or written agreements, or
forbearance program in effect as to the lease or sublease;
(vi) with respect to each sublease, the representations and
warranties set forth in subsections (i) through (v) above are, to
the Knowledge of the Principal Sellers and Amitek, true and correct
with respect to the underlying lease;
(vii) Amitek has not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the
leasehold or subleasehold; and
(viii) all facilities leased or subleased thereunder have
received all approvals of governmental authorities (including
licenses and permits) required in connection with the operation
thereof, the failure of which to obtain could have a Material
Adverse Effect on Amitek and have been operated and maintained in
all material respects in accordance with applicable laws, rules, and
regulations.
(c) Except as set forth in Section 3.16(c) of the Disclosure
Schedule, the buildings, real property, improvements, machinery,
equipment, and other tangible assets owned by Amitek or used by it in the
conduct of its business as presently conducted are in good operating
condition and repair in all material respects, normal wear and tear
excepted.
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3.17. Intellectual Property.
(a) Section 3.17(a) of the Disclosure Schedule identifies each item
of Intellectual Property that Amitek owns or has the right to use pursuant
to license, sublicense, agreement, or permission.
(b) Except as set forth in Section 3.17(b) of the Disclosure
Schedule, Amitek owns or has the right to use pursuant to license,
sublicense, agreement, or permission all Intellectual Property used in the
operation of its business as presently conducted.
(c) To the Knowledge of each of the Principal Sellers and Amitek,
Amitek has not interfered with, infringed upon, misappropriated, or
otherwise come into conflict with any Intellectual Property rights of
third parties and there has never been any charge, complaint, claim,
demand, or notice alleging any such interference, infringement,
misappropriation, or violation. To the Knowledge of each of the Principal
Sellers and Amitek, no third party has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual
Property rights of Amitek.
(d) To the Knowledge of each of the Principal Sellers and Amitek,
Amitek will not interfere with, infringe upon, misappropriate, or
otherwise come into conflict with, any Intellectual Property rights of
third parties as a result of the continued operation of their respective
businesses as presently conducted.
3.18. Inventories. Except as set forth in Section 3.18 of the Disclosure
Schedule, the inventory of Amitek reflected in the Most Recent Balance Sheet and
books and records of Amitek is valued at the lower of cost (on a first-in,
first-out basis) or market in accordance with GAAP, consistently applied, and
does not include any material amount of obsolete items or any material
accumulation of slow moving items of below standard quality which, in each case,
cannot be used or returned in the Ordinary Course of Business.
3.19. Contracts. Section 3.19 of the Disclosure Schedule lists the
following contracts and other agreements (including any contracts and agreements
listed in Sections 3.11, 3.16, 3.17 and 3.28 of the Disclosure Schedule but
excluding any contracts or agreements that are terminable by Amitek on not more
than 30 days notice without penalty) to which Amitek is a party:
(a) any agreement (or group of related agreements) for the lease of
personal property to or from any Person providing for lease payments in
excess of $25,000 per year;
(b) any agreement (or group of related agreements) for the purchase
or sale of raw materials, commodities, supplies, products, or other
personal property, or for the
-26-
furnishing or receipt of services, the performance of which will extend
over a period of more than one year, result in a material loss to Amitek
or involve consideration in excess of $25,000;
(c) any agreement concerning a partnership or joint venture;
(d) any agreement (or group of related agreements) under which it
has created, incurred, assumed, or guaranteed any Indebtedness in excess
of $25,000 or under which it has imposed a Lien on any of its assets,
tangible or intangible;
(e) any agreement concerning confidentiality or noncompetition;
(f) any agreement relating to Amitek, its assets, liabilities and
business, or relating to the Amitek Shares, between or among Amitek or any
Principal Seller and any of their Affiliates;
(g) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or
arrangement for the benefit of its current or former directors, officers,
and employees;
(h) any collective bargaining agreement;
(i) any agreement providing for the employment or consultancy with
any individual on a full-time, part-time, consulting or other basis in
excess of $25,000 per year or providing severance or retirement benefits;
(j) any agreement under which it has advanced or loaned any amount
to any of its stockholders, Affiliates, directors, officers, or employees
other than in the Ordinary Course of Business;
(k) any agreement under which the consequences of a default or
termination could have a Material Adverse Effect on Amitek; or
(l) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $25,000 per year.
The Principal Sellers have delivered to the Buyer a correct and complete copy of
each written agreement listed in Section 3.19 of the Disclosure Schedule and a
written summary setting forth the terms and conditions of each oral agreement
referred to in Section 3.19 of the Disclosure Schedule. Except as disclosed in
Section 3.19 of the Disclosure Schedule, with respect to each such agreement:
(i) the agreement is legal, valid, binding, enforceable, and in full force and
effect; (ii) subject to the Buyer obtaining the necessary consents disclosed in
Section 3.32 of the Disclosure Schedule, the agreement will continue to be
legal, valid, binding, enforceable, and in
-27-
full force and effect on materially identical terms following the consummation
of the transactions contemplated hereby; (iii) no party is in breach or default
in any material respect, and, to the Knowledge of the Principal Sellers and
Amitek, no event has occurred which with notice or lapse of time would
constitute a breach or default in any material respect, or permit termination,
material modification, or acceleration, under the agreement; and (iv) no party
has repudiated any provision of the agreement.
3.20. Notes and Accounts Receivable. Except as set forth in Section 3.20
of the Disclosure Schedule, all notes and accounts receivable of Amitek are
reflected properly on its books and records in accordance with GAAP, and arose
from bona fide transactions in the Ordinary Course of Business subject to no
setoffs or counterclaims except as recorded as accounts payable.
3.21. Powers of Attorney. Except as set forth in Section 3.21 of the
Disclosure Schedule and except pursuant to this Agreement, there are no
outstanding powers of attorney executed on behalf of Amitek or the Sellers in
respect of Amitek, its assets, liabilities or business or the Amitek Shares.
3.22. Insurance and Risk Management. Section 3.22 of the Disclosure
Schedule sets forth the following information with respect to each insurance
policy (including policies providing property, casualty, liability, and workers'
compensation coverage and bond and surety arrangements) to which the business
operations of Amitek is a party, a named insured, or otherwise the beneficiary
of coverage on the date hereof:
(a) the name, address, and telephone number of the agent;
(b) the name of the insurer, the name of the policyholder, and the
name of each covered insured;
(c) the policy number, the period of coverage and premium; and
(d) a description of any retrospective premium adjustments or other
loss-sensitive premium arrangements.
Except as set forth in Section 3.22 of the Disclosure Schedule, with respect to
each such insurance policy: (i) the policy is in full force and effect; (ii) the
transactions contemplated hereby will not result in the cancellation or
modification of such policies; (iii) neither Amitek nor any other party to the
policy is in breach or default (including with respect to the payment of
premiums or the giving of notices), which would permit termination, material
modification, or acceleration, under the policy; (iv) the Principal Sellers have
delivered true and complete copies of all policies and related indemnity or
premium payment agreements to Buyer; and (v) no party to the policy has
repudiated any provision thereof. Section 3.22 of the Disclosure Schedule
describes any self-insurance arrangements affecting Amitek.
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3.23. Litigation. Except as disclosed in Section 3.23 of the Disclosure
Schedule, there are no judicial or administrative actions, claims, suits,
proceedings or investigations pending or, to the Principal Sellers' or Amitek's
Knowledge, threatened, that if determined adversely to Amitek would be
reasonably likely to result in a Material Adverse Effect on Amitek, or that
question the validity of this Agreement or any of the Related Agreements or of
any action taken or to be taken pursuant to or in connection with the provisions
of this Agreement or any of the Related Agreements nor, to the Principal
Sellers' or Amitek's Knowledge, is there any basis for any such action, claim,
suit, proceeding or investigation. There are no judgments, orders, decrees,
citations, fines or penalties heretofore assessed against Amitek affecting
adversely in any material respect any of its assets, businesses or operations
under any federal, state or local law.
3.24. Product Warranties Defects Liability. Except as set forth in Section
3.24 of the Disclosure Schedule, to the Knowledge of Amitek and the Principal
Sellers, substantially all products manufactured, sold, leased, or delivered by
Amitek have been in conformity in all material respects with all applicable
contractual commitments and all express and implied warranties, and Amitek has
no liability for replacement or repair thereof, subject only to the reserve for
product warranty claims set forth on the face of the Most Recent Balance Sheet.
Section 3.24 of the Disclosure Schedule includes copies of the standard terms
and conditions of sale or lease for Amitek's products generating$1,000,000 in
annual net sales since January 1, 1996 (containing applicable guaranty,
warranty, and indemnity provisions). Except as set forth in Section 3.24 of the
Disclosure Schedule, to the Knowledge of Amitek and the Principal Sellers,
Amitek has no liability arising out of any injury to individuals or property as
a result of the ownership, possession, or use of any product manufactured, sold,
leased, or delivered by it and there has been no inquiry or investigation made
in respect thereof by any Person including any governmental or administrative
agency, other than such liability for which Amitek has obtained insurance
coverage pursuant to insurance policies listed in Section 3.22 of the Disclosure
Schedule which such policies will remain in full force and effect without
material modification or increase in premium as a result of the transactions
contemplated hereby.
3.25. Employees. Except as set forth in Section 3.25 to the Disclosure
Schedule, to the Knowledge of Amitek and the Principal Sellers, no executive,
key employee, or group of employees has any plans to terminate employment with
Amitek. Amitek has not experienced any labor disputes or work stoppage due to
labor disagreements. Amitek is not nor has ever been a party to any collective
bargaining agreements or the subject of any organizational activity.
3.26. Employee Benefits.
(a) Section 3.26 of the Disclosure Schedule lists each Employee
Benefit Plan that Amitek maintains or to which Amitek contributes relating
to its current or former employees, officers or directors.
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(i) Each such Employee Benefit Plan (and each related trust,
insurance contract, or fund) materially complies in form and in
operation in all respects with the applicable requirements of ERISA,
the Code, and other applicable laws.
(ii) All required reports and descriptions (including Form
5500 Annual Reports, Summary Annual Reports, and Summary Plan
Descriptions) have been filed or distributed appropriately with
respect to each such Employee Benefit Plan. The requirements of Part
6 of Subtitle B of Title I of ERISA and of Code Section 4980B have
been met with respect to each such Employee Benefit Plan which is an
Employee Welfare Benefit Plan subject to such Part.
(iii) The Principal Sellers have delivered to the Buyer
correct and complete copies of the plan documents and summary plan
descriptions, the most recent Form 5500 Annual Report, and all
related trust agreements, insurance contracts, and other funding
agreements which implement each such Employee Benefit Plan.
(b) With respect to each Employee Benefit Plan that Amitek maintains
or ever has maintained or to which it contributes, ever has contributed,
or ever has been required to contribute, there have been no Prohibited
Transactions. No Fiduciary has any liability for breach of fiduciary duty
or any other failure to act or comply in connection with the
administration or investment of the assets of any such Employee Benefit
Plan. No action, suit, proceeding, hearing, or investigation with respect
to the administration or the investment of the assets of any such Employee
Benefit Plan (other than routine claims for benefits) is pending or
threatened. None of the Principal Sellers or the Amitek has any Knowledge
of any basis for any such action, suit, proceeding, hearing, or
investigation.
(c) Amitek does not maintain, nor ever has maintained, nor
contributes, nor ever has contributed, nor ever has been required to
contribute, to any Employee Welfare Benefit Plan providing medical,
health, or life insurance or other welfare-type benefits for current or
future retired or terminated employees, their spouses, or their dependents
(other than in accordance with Code Section 4980B).
(d) Amitek does not maintain, nor ever has maintained, nor
contributes, nor has ever contributed, nor has ever been required to
contribute, to any Employee Pension Benefit Plan.
(e) No promise or commitment to amend or improve any Employee
Benefit Plan for the benefit of current or former directors, officers, or
employees which is not reflected in the documentation provided to Buyer
has been made.
(f) The transactions contemplated by this Agreement shall not alone
or upon the occurrence of any additional or subsequent event, result in
any payment, of severance
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or otherwise, or acceleration, vesting or increase in benefits under any
Employee Benefit Plan for the benefit of any current or former director,
officer, or employee of Amitek.
3.27. Environment, Health, and Safety.
(a) Except as disclosed in Section 3.27 of the Disclosure Schedule:
(i) Amitek is and has been in compliance with all applicable
Environmental Laws and Safety Laws, the violation of which could
have a Material Adverse Effect on Amitek;
(ii) Amitek has obtained, and is and has been in material
compliance with the conditions of, all Environmental Permits
required for the continued conduct of its business in the manner now
conducted and presently proposed to be conducted;
(iii) Amitek has filed all required applications, notices and
other documents necessary to effect the timely renewal or issuance
of all Environmental Permits for the continued conduct of its
business in the manner now conducted and presently proposed to be
conducted;
(iv) there are, to the Knowledge of Amitek and the Principal
Sellers, no circumstances or conditions present at or arising out of
the present or former assets, properties, leaseholds, businesses or
operations of Amitek in respect of off-site storage, transportation
or disposal of, or any off-site Release of, a Chemical Substance
which reasonably may be expected to give rise to any Environmental
Liabilities and costs;
(v) there are, to the Knowledge of Amitek and the Principal
Sellers, no circumstances or conditions present at or arising out of
the present or former assets, properties, leaseholds, businesses or
operations of Amitek, including but not limited to any on-site
Storage, use, disposal or Release of a Chemical Substance, which
reasonably may be expected to give rise to any Environmental
Liabilities and Costs or Safety Liability and Costs;
(vi) none of Amitek, the Principal Sellers or the present or
past assets, properties, businesses, leaseholds or operations of
Amitek has received or is subject to, or within the past three years
has been subject to, any outstanding order, decree, judgment,
complaint, agreement, claim, citation, or notice or is subject to
any ongoing judicial or administrative proceeding indicating that
either Amitek, the Principal Sellers or the past and present assets
Amitek are or may be: (A) in violation of any Environmental Law; (B)
in violation of any Safety Laws; (C) responsible for the on-site or
off-site storage or Release of any Chemical
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Substance; or, (D) liable for any Environmental Liabilities and
Costs or Safety Liabilities and Costs;
(vii) no investigation or review with respect to the matters
identified in subsection (vi) is pending or, to the Knowledge of
Amitek or the Principal Sellers, is threatened, nor has any
Authority or other third-party indicated an intention to conduct the
same;
(viii) neither the business of Amitek nor any of its
properties or assets is subject to, or as a result of the
transactions contemplated by this Agreement will be subject to, the
requirements of any Environmental Laws which require notice,
disclosure, cleanup or approval prior to transfer of the Amitek
Shares, or the business of Amitek or which will impose Liens on any
such asset or property or otherwise interfere with or affect the
business of Amitek;
(ix) Section 3.27 of the Disclosure Schedule lists all
property presently or previously leased, owned or operated by Amitek
and identifies all such property (and the area within that property)
that has been used by Amitek or by any other Person (including a
prior owner or operator) for the storage or disposal of Chemical
Substances;
(x) Section 3.27 of the Disclosure Schedule lists all off-site
locations, including, without limitation, commercial waste disposal
facilities or municipal landfills, to which or at which Chemical
Substances originating from Amitek, or its assets, properties or
business have been sent (or otherwise have come to be located) in
amounts that would require a waste manifest under the Resource
Conservation and Recovery Act of 1976 as now in effect for
treatment, storage, disposal, reuse or recycling;
(xi) Section 3.27 of the Disclosure Schedule sets forth a list
of all underground storage tanks owned or operated at any time by
Amitek and, except as disclosed in Section 3.27 of the Disclosure
Schedule, no such tank is leaking or has leaked at any time in the
past, and there is no pollution or contamination of the Environment
caused by or contributed to or threatened by a Release of a Chemical
Substance from any such tank; and
(xii) Section 3.27 of the Disclosure Schedule lists all
environmental audits, inspections, assessments, investigations or
similar reports in Amitek's possession or of which Amitek is aware
relating to Amitek's assets, properties or business or the
compliance of the same with applicable Environmental Laws and Safety
Laws.
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(b) For purposes of this Section 3.27 only, all references to
"Amitek" is intended to include any and all other entities to which Amitek
may be considered a successor under applicable Environmental Laws. The
representations and warranties in this section are the only
representations and warranties with respect to Environmental Laws or
Environmental Liabilities and Costs, or Safety Laws or Safety Liabilities
and Costs notwithstanding any other language in this Agreement of general
applicability.
3.28. Affiliated Transactions. Except as set forth in Section 3.28 of the
Disclosure Schedule, Amitek is not party to or bound by any contract, commitment
or understanding with any of its stockholders, directors or officers or any of
their Affiliates or any member of their family and none of its stockholders,
directors or officers or those of Affiliates or any member of their family owns
or otherwise has any rights to or interests in any asset, tangible or
intangible, which is used in the business of Amitek.
3.29. Government Contracts. Except as set forth in Section 3.29 of the
Disclosure Schedule, Amitek has not been nor is a party to any contract or
arrangement with any federal, state or local government agency.
3.30. Distributors, Customers, Suppliers. Section 3.30 of the Disclosure
Schedule sets forth a complete and accurate list of (i) the ten largest
customers (by dollar volume) of Amitek during the Most Recent Fiscal Year,
indicating the existing contractual arrangements with each such customer by
product, (ii) all suppliers of significant materials or services to Amitek,
indicating the contractual arrangements for continued supply from such Person
and (iii) the ten largest distributors (by dollar sales volume) of products of
Amitek. Except as set forth in Section 3.30 of the Disclosure Schedule, Amitek
has not been threatened or notified, orally or in writing, by one or more of the
distributors, customers or suppliers listed in Section 3.30 of the Disclosure
Schedule that such Persons have terminated or intend to terminate or are
considering terminating their respective business relationships with Amitek or
are modifying such relationships with Amitek in a manner which is less favorable
to the Amitek.
3.31. No Illegal Payments, Etc. To the Knowledge of the Principal Sellers,
none of the Principal Sellers, nor Amitek, nor any of the directors, officers,
employees or agents of Amitek, has (a) directly or indirectly given or agreed to
give any illegal gift, contribution, payment or similar benefit to any supplier,
customer, governmental official or employee or other person who was, is or may
be in a position to help or hinder Amitek (or assist in connection with any
actual or proposed transaction) or made or agreed to make any illegal
contribution, or reimbursed any illegal political gift or contribution made by
any other person, to any candidate for federal, state, local or foreign public
office (i) which would subject Amitek to any damage or penalty in any civil,
criminal or governmental litigation or proceeding or (ii) the non-continuation
of which has had or might have, individually or in the aggregate, a Material
Adverse Effect on Amitek or (b) established or maintained any unrecorded fund or
asset or made any false entries on any books or records for any purpose.
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3.32. Consents. Section 3.32 of the Disclosure Schedule sets forth a true,
correct and complete list of any Person whose consent or approval is required
and the matter, agreement or contract to which such consent relates in
connection with the consummation of the transactions contemplated by this
Agreement.
3.33. Disclosure. The representations and warranties contained in this
Section 3 (including the Disclosure Schedule and any other schedules and
exhibits required to be delivered by the Principal Sellers to Buyer pursuant to
this Agreement) and any certificate required to be furnished by the Principal
Sellers to Buyer at the Closing do not contain and will not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements contained therein not misleading.
3.34. Qualification of Principal Sellers. Each Principal Seller represents
and warrants, with respect to itself and not with respect to any other Principal
Seller, that: (a) such Principal Seller is acquiring the Buyer Shares for his,
her or its own account and not with a view to or for resale in connection with
any distribution thereof; (b) such Principal Seller understands that such shares
of Common Stock have not been registered under the Securities Act or any state
securities laws by reason of specified exemptions from the registration
provisions of the Securities Act which depend upon, among other things, the bona
fide nature of his or its investment intent as expressed herein; (c) such
Principal Seller is an "accredited investor" within the meaning of Rule 501 of
the Securities Act; (d) such Principal Seller is able to bear the economic risk
of investment in the Buyer Shares and is experienced and has such knowledge and
experience in financial and business matters that he or it is capable of
evaluating the risks and merits of the transactions contemplated by this
Agreement; and (e) such Principal Seller acknowledges that the Buyer Shares will
bear a legend restricting transfer unless (i) the transfer is exempt from the
registration requirements of the Securities Act and an opinion of counsel
reasonably satisfactory to Buyer that such transfer is exempt therefrom is
delivered to the Buyer, or (ii) the transfer is made pursuant to an effective
registration statement under the Securities Act.
3.35. Disclaimer of Other Representations and Warranties. Except as
expressly set forth in this Section 3, the Principal Sellers and Amitek make no
representation or warranty, express or implied, at law or in equity, in respect
of the Principal Sellers or Amitek or any of their respective assets,
liabilities or operations, including, without limitation, with respect to
merchantability or fitness of any asset or product for any particular purpose,
and any such other representations or warranties are hereby expressly
disclaimed.
4. Representations and Warranties of the Buyer. The Buyer represents and
warrants to the Principal Sellers that the statements contained in this Section
4 are correct and complete as of the date of this Agreement and, unless a date
is specified in such representation and warranty, will be correct and complete
as of the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section 4), except as
set forth in the Disclosure Schedule.
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4.1. Organization of the Buyer and NewSub. Each of the Buyer and NewSub is
a Delaware corporation, duly organized, validly existing, and in good standing
under the laws of the State of Delaware. Copies of the certificate of
incorporation and bylaws of each of the Buyer and NewSub as amended to date have
been heretofore delivered to the Principal Sellers and are accurate and
complete. Each of the Buyer and NewSub is qualified to do business and is in
good standing as a foreign corporation in each jurisdiction listed in Section
4.1 of the Disclosure Schedule, which such jurisdictions are the only
jurisdictions where the nature of the activities conducted by it or the
character of the property owned, leased or operated by it make such
qualification necessary or appropriate, except for those jurisdictions where the
failure to be so qualified will not have a Material Adverse Effect on the Buyer.
4.2. Capitalization and Ownership of the Buyer and NewSub. The authorized
capital stock of the Buyer consists of 17,593,607 shares of common stock, $.01
par value per share (the "Century Common Stock"), 3,726,027 shares of Series A
Preferred Stock, $.01 par value per share (the "Series A Preferred Stock"), and
666,667 shares of Series B Preferred Stock, $.01 par value per share (the
"Series B Preferred Stock"). As of the date hereof, there are issued and
outstanding 6,321,877 shares of Century Common Stock, 3,698,630 shares of Series
A Preferred Stock and 666,667 shares of Series B Preferred Stock, of which no
shares are held as treasury stock and, except as set forth in Section 4.2 of the
Disclosure Schedule, all of such shares are held of record and beneficially by
the persons and in the respective amounts set forth on Section 4.2 of the
Disclosure Schedule, free and clear of any Liens, and are convertible into the
respective amounts of shares of Century Common Stock set forth on Section 4.2 of
the Disclosure Schedule. The authorized capital stock of NewSub consists of
1,000 shares of common stock, $.01 par value per share. As of the date hereof,
there are issued and outstanding 1,000 shares of common stock of NewSub, of
which no shares are held as treasury stock and all of such shares are held of
record and beneficially by the Buyer, free and clear of any Liens. All of the
outstanding shares of capital stock of each of the Buyer and NewSub have been
validly issued, are fully paid and nonassessable. The Buyer Shares to be issued
in the Merger have been duly authorized and, upon consummation of the Merger,
will be validly issued, fully paid and nonassessable. Except as set forth in
Section 4.2 to the Disclosure Schedule, there are no agreements restricting the
transfer of, or affecting the rights of any holder of, the Century Common Stock,
Series A Preferred Stock or Series B Preferred Stock, there are no preemptive
rights on the part of any holder of any class of securities of the Buyer or
NewSub and no outstanding options, warrants, rights, or other agreements or
commitments of any kind obligating the Buyer or NewSub, contingently or
otherwise, to issue or sell any shares of its capital stock or any securities or
obligations convertible into, or exchangeable for, any shares of its capital
stock, and no authorization therefor has been given. Section 4.2 of the
Disclosure Schedule sets forth the names of the record holders of all
outstanding options, warrants or other rights to purchase, sell or otherwise
dispose of, or rights to exchange or convert into, any shares of the Buyer's or
NewSub's capital stock and the number of shares (including the number of shares
of capital stock into which any option, warrant or other convertible security is
exercisable or convertible), exercise prices and expiration dates of such
options, warrants or other rights.
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4.3. Authorization of Transaction. The Buyer has the legal capacity, power
and authority (including full corporate power and authority) to execute and
deliver this Agreement and the Related Agreements being executed by it and to
perform its obligations hereunder and thereunder. The board of directors of the
Buyer has duly authorized the execution, delivery and performance of this
Agreement and the Related Agreements being executed by the Buyer. All corporate
and other actions or proceedings to be taken by or on the part of the Buyer to
authorize and permit the execution and delivery by it of this Agreement and the
Related Agreements and the instruments required to be executed and delivered by
it pursuant hereto and thereto, the performance by it of its obligations
hereunder and thereunder, and the consummation by it of the transactions
contemplated herein and therein, have been duly and properly taken. This
Agreement and each of the Related Agreements being executed by the Buyer,
including but not limited to the Buyer's Notes, has been duly executed and
delivered by the Buyer and constitutes the legal, valid and binding obligation
of the Buyer, enforceable in accordance with its terms and conditions.
4.4. Noncontravention. Except as set forth in Section 4.4 of the
Disclosure Schedule, neither the execution and the delivery of this Agreement
and the Related Agreements being executed by the Buyer, nor the consummation of
the transactions contemplated hereby or thereby (including any of the agreements
and instruments required to be delivered pursuant to Section 2 above), will (i)
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Buyer or NewSub or any of their
property is subject or any provision of the charter or by-laws of the Buyer or
NewSub or (ii) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to which the Buyer or
NewSub is a party or by which either of them is bound or to which any of their
assets is subject (or result in the imposition of any Lien upon any of their
assets), which in any case could have a Material Adverse Effect on the Buyer.
Except as set forth in Section 4.4 of the Disclosure Schedule, neither the Buyer
nor NewSub needs to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated by this
Agreement, except for the filing of the Certificate of Merger with the Secretary
of State of Delaware and the filing of the Articles of Merger with the State of
Florida.
4.5. Brokers' Fees. Except as set forth in Section 4.5 of the Disclosure
Schedule, neither the Buyer nor NewSub has any liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
4.6. Title to Assets. Except as set forth in Section 4.6 of the Disclosure
Schedule, the Buyer has good title to, or a valid and binding leasehold interest
in, the properties and assets used by it, located on its premises, or reflected
on the Most Recent Balance Sheet or acquired after the
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date thereof, free and clear of all Liens, except for properties and assets
disposed of in the Ordinary Course of Business since the date of the Most Recent
Balance Sheet.
4.7. Assets. The assets, properties and rights of the Buyer reflected in
the Most Recent Financial Statements comprise all of the assets, properties and
rights of every type and description, real, personal, tangible and intangible
used by the Buyer in the conduct of its business as currently conducted.
4.8. No Subsidiaries. Except as set forth in Section 4.8 of the Disclosure
Schedule, the Buyer has no Subsidiaries other than NewSub, nor does the Buyer
own, directly or indirectly, any capital stock of, any partnership or other
ownership interest in, or any other security issued by, any other corporation,
organization, association or entity other than NewSub.
4.9. Financial Statements of the Buyer. Attached hereto as Exhibit D-2 are
the following financial statements (collectively the "Buyer Financial
Statements"): (i) audited consolidated balance sheets and statements of income,
changes in stockholders' equity, and cash flow as of and for the fiscal years
ended June 30, 1997 and June 30, 1998 (the "Most Recent Fiscal Year End") for
the Buyer, and (ii) unaudited consolidated balance sheets and statements of
income, changes in stockholders' equity and cash flows for the nine months ended
March 31, 1999 for the Buyer (the "Interim Buyer Financials"). The Buyer
Financial Statements (including, with respect to the audited financial
statements only, the notes thereto) have been prepared in accordance with GAAP
applied on a consistent basis throughout the periods covered thereby and present
fairly the financial condition of the Buyer in all material respects as of such
dates and the results of operations of the Buyer for such periods and are
consistent with the books and records of the Buyer, subject to normal and
recurring year end adjustments and in the case of the unaudited financial
statements, the absence of notes.
4.10. Indebtedness and Guarantees. Except as set forth in the Most Recent
Financial Statements, the Buyer has no Indebtedness. Except as set forth in
Section 4.10 of the Disclosure Schedule, the Buyer is not a guarantor or
otherwise liable for any liability or obligation of any other Person.
4.11. Absence of Certain Changes and Events. Since the Most Recent Fiscal
Year End and except as disclosed in Section 4.11 of the Disclosure Schedule or
set forth in the Interim Buyer Financials, the Buyer has conducted its business
only in the Ordinary Course of Business and there has not been:
(a) any sale, lease, transfer, or assignment of any of the Buyer's
assets, tangible or intangible, other than sales of inventory for a fair
consideration in the Ordinary Course of Business;
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(b) any agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) entered into other than in
the Ordinary Court of Business and in an amount not in excess of $25,000;
(c) acceleration, termination, modification, or cancellation of any
agreement, contract, lease, or license (or series of related agreements,
contracts, leases, and licenses) to which the Buyer is a party or by which
the Buyer is bound;
(d) creation or imposition of any Lien upon either of the Buyer's
assets, tangible or intangible;
(e) made any capital expenditure (or series of related capital
expenditures) involving more than $25,000 singly or $75,000 in the
aggregate;
(f) made any capital investment in, any loan to, or any acquisition
of the securities or assets of, any other Person (or series of related
capital investments, loans, and acquisitions);
(g) any issuance of any note, bond, or other debt security or
created, incurred, assumed, or guaranteed any indebtedness for borrowed
money or capitalized lease obligation;
(h) any delay or postponement of the payment of accounts payable and
other liabilities outside the Ordinary Course of Business;
(i) any cancellation, compromise, waiver, or release any right or
claim or Indebtedness (or series of related rights and claims);
(j) any grant of any license or sublicense of any rights or modified
any rights under or with respect to, or entered into any settlement
regarding any infringement of its rights to, any Intellectual Property;
(k) any issuance, sale, or other disposition of any of its capital
stock, or grant of any options, warrants, or other rights to purchase or
obtain (including upon conversion, exchange, or exercise) any capital
stock;
(l) any dividend or distribution (whether in cash or in kind) or
repurchase, redemption or retirement of any of its capital stock;
(m) any damage, destruction, or loss (whether or not covered by
insurance) to its property;
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(n) any loan to, or enter into any other transaction with its
directors, officers, and employees outside the Ordinary Course of
Business;
(o) any employment contract or collective bargaining agreement,
written or oral, or modification or change of the terms of any existing
such contract or agreement;
(p) any increase modification or change in the compensation of any
of the officers or employees of the Buyer outside the Ordinary Course of
Business;
(q) any adoption, amendment modification or termination of any
Employee Benefit Plan of any of director, officer, or employee of the
Buyer (or taken any such action with respect to any other Employee Benefit
Plan);
(r) any payment pursuant to any Employee Benefit Plan or other plan,
contract or commitment for the benefit of any of the directors, officers
and employees of the Buyer;
(s) any pledge to make or make any charitable or other capital
contribution outside the Ordinary Course of Business;
(t) any amount paid to any third party with respect to any liability
(excluding any costs and expenses incurred or which may be incurred in
connection with this Agreement and the transactions contemplated hereby)
other than in the Ordinary Course of Business;
(u) any modification or change of the application of GAAP from the
manner in which it was applied in the Most Recent Financial Statements;
(v) any other material adverse occurrence, event, incident, action,
failure to act, or transaction outside the Ordinary Course of Business
involving the Buyer; and
(w) any commitment by the Buyer to any of the foregoing.
4.12. [Reserved]
4.13. Legal and Other Compliance. Except as set forth in Section 4.13 of
the Disclosure Schedule, the Buyer is in compliance in all material respects
with all applicable Laws the violation of which, either singularly or in the
aggregate, could have a Material Adverse Effect on the Buyer and no action,
suit, proceeding, hearing, investigation, charge, complaint, claim, demand, or
notice has been filed or commenced against it alleging any failure so to comply.
Neither the transfer of the Buyer Shares to the Sellers, nor the consummation of
the transactions contemplated hereby, conflicts with the rights of any other
Person or violates, or with the giving of notice or the passage of time or both
will violate, conflict with or result in a default, right to
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accelerate or loss of rights under, any terms or provisions of the Buyer's
charter or by-laws or any Lien, lease, license, agreement, understanding, law,
ordinance, rule or regulation, or any order, judgment or decree to which the
Buyer is a party or by which it may be bound, in each case, which violation,
conflict, default, right to accelerate or loss of rights, either singularly or
in the aggregate, could have a Material Adverse Effect on the Buyer.
4.14. No Material Adverse Change. Since the date of the Most Recent
Financial Statements, the Buyer has not experienced any change which has
resulted in a Material Adverse Effect on the Buyer and, to the Buyer's
Knowledge, no event has occurred that may result in such a Material Adverse
Effect on the Buyer.
4.15. Taxes. Except as set forth in Section 4.15 of the Disclosure
Schedule:
(a) The Buyer has filed all material returns, declarations of
estimated tax, tax reports, information returns and statements required to
be filed by it prior to the Closing Date relating to any material Taxes
with respect to any income, assets or operations of the Buyer, other than
those for which extensions shall have been granted prior to the Closing
Date (collectively, the "Tax Returns");
(b) the Buyer has made available to the Principal Sellers correct
and complete copies of all federal and state income Tax Returns,
examination reports and statements of deficiencies assessed against or
agreed to by the Buyer for the last three taxable years;
(c) the Buyer has paid, or made adequate provision in accordance
with GAAP, for the payment of all Taxes for the periods ending on or
before the Closing Date;
(d) the Buyer has not waived any statute of limitations affecting
any Tax liability or agreed to any extension of time during which a Tax
assessment or deficiency assessment may be made;
(e) there are no pending examinations by any taxing authority of any
Tax Returns of the Buyer and the Buyer has not received written notice of
any unresolved questions or claims concerning its Tax liability;
(f) the Buyer is not and has not been a party to any Tax allocation
or sharing agreement or a member of an Affiliated Group filing a
consolidated federal income Tax Return. The Buyer has no liability for the
Taxes of any other Person under Treas. Reg. Section 1.1502-6 (or any
similar provision of state, local or foreign law), as a transferee or
successor, by contract, or otherwise;
(g) the Buyer has withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any
shareholder, employee, creditor, independent contractor, or other third
party;
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(h) other than Liens for Taxes not yet due and payable, there are no
Liens on any of the assets of the Buyer that arose in connection with any
failure (or alleged failure) to pay any Tax; and
(i) the Buyer has not made any payments, is not obligated to make
any payments, and is not a party to any agreement that under certain
circumstances could obligate it to make any payments that will not be
deductible under Code Section 280G or will be subject to the excise tax of
Code Section 4999.
4.16. Property, Plant and Equipment.
(a) Section 4.16(a) of the Disclosure Schedule lists all real
property that the Buyer owns. Except as set forth in Section 4.16(a) of
the Disclosure Schedule, with respect to each such parcel of owned real
property:
(i) the Buyer has good and marketable title to the parcel of
real property, free and clear of any Lien;
(ii) there are no pending or, to the Buyer's knowledge,
threatened condemnation proceedings, lawsuits, or administrative
actions relating to the property which would adversely affect the
use, occupancy, or value thereof;
(iii) each facility on such parcel has received all approvals
of governmental authorities (including licenses and permits)
required in connection with the ownership or operation thereof, the
failure of which to obtain could have a Material Adverse Effect on
the Buyer, and have been operated and maintained in all material
respects in accordance with applicable laws, rules, and regulations;
(iv) there are no leases, subleases, licenses, concessions, or
other agreements, written or oral, granting to any party or parties
the right of use or occupancy of the parcel or any portion thereof;
(v) there are no outstanding options or rights of first
refusal to purchase such parcel or any portion thereof or interest
therein;
(vi) there are no parties (other than the Buyer) in possession
of such parcel;
(b) Section 4.16(b) of the Disclosure Schedule lists all real
property leased or subleased to the Buyer. The Buyer has delivered to the
Principal Sellers correct and complete copies of the leases and subleases
listed in Section 4.16(b) of the Disclosure
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Schedule (as amended to date) which such leases and subleases have not
been amended or modified since the date thereof. Except as set forth in
Section 4.16(b) of the Disclosure Schedule, with respect to each lease and
sublease listed therein:
(i) the lease or sublease is legal, valid, binding,
enforceable, and in full force and effect;
(ii) the lease or sublease will continue to be legal, valid,
binding, enforceable, and in full force and effect on materially
identical terms following the consummation of the transactions
contemplated hereby;
(iii) Neither the Buyer, nor to its Knowledge any other party
to the lease or sublease, is in breach or default in any material
respect, and, to its Knowledge, no event has occurred which, with
notice or lapse of time, would constitute a breach or default in any
material respect, or permit termination, material modification, or
acceleration thereunder;
(iv) no party to the lease or sublease has repudiated any
provision thereof;
(v) there are no disputes, oral or written agreements, or
forbearance program in effect as to the lease or sublease;
(vi) with respect to each sublease, the representations and
warranties set forth in subsections (i) through (v) above are, to
the Knowledge of the Buyer, true and correct with respect to the
underlying lease;
(vii) the Buyer has not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the
leasehold or subleasehold; and
(viii) all facilities leased or subleased thereunder have
received all approvals of governmental authorities (including
licenses and permits) required in connection with the operation
thereof, the failure of which to obtain could have a Material
Adverse Effect on the Buyer, and have been operated and maintained
in all material respects in accordance with applicable laws, rules,
and regulations.
(c) The buildings, real property, improvements, machinery,
equipment, and other tangible assets owned by the Buyer or used by it in
the conduct of its business as presently conducted are in good operating
condition and repair in all material respects, normal wear and tear
excepted.
4.17. Intellectual Property.
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(a) Section 4.17(a) of the Disclosure Schedule identifies each item
of Intellectual Property that the Buyer owns or has the right to use
pursuant to license, sublicense, agreement, or permission.
(b) Except as set forth in Section 4.17(b) of the Disclosure
Schedule, the Buyer owns or has the right to use pursuant to license,
sublicense, agreement, or permission all Intellectual Property used in the
operation of its business as presently conducted.
(c) To the Knowledge of the Buyer, the Buyer has not interfered
with, infringed upon, misappropriated, or otherwise come into conflict
with any Intellectual Property rights of third parties and there has never
been any charge, complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation, or violation. To the
Knowledge of the Buyer, no third party has interfered with, infringed
upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of the Buyer.
(d) To the Knowledge of the Buyer, the Buyer will not interfere
with, infringe upon, misappropriate, or otherwise come into conflict with,
any Intellectual Property rights of third parties as a result of the
continued operation of its business as presently conducted.
4.18. Inventories. Except as set forth in Section 4.18 of the Disclosure
Schedule, the inventory of the Buyer, taken as a whole, reflected in the Most
Recent Balance Sheet and books and records of the Buyer is valued at the lower
of cost (on a first-in, first-out basis) or market in accordance with GAAP,
consistently applied, and does not include any material amount of obsolete items
or any items or any material accumulation of slow moving items or below standard
quality which, in each case, cannot be used or returned in the Ordinary Courses
of Business.
4.19. Contracts. Section 4.19 of the Disclosure Schedule lists the
following contracts and other agreements (including any contracts and agreements
listed in Sections 4.11, 4.16, 4.17, and 4.28 of the Disclosure Schedule but
excluding any contracts or agreements that are terminable by the Buyer on not
more than 30 days notice without penalty) to which the Buyer is a party:
(a) any agreement (or group of related agreements) for the lease of
personal property to or from any Person providing for lease payments in
excess of $25,000 per year;
(b) any agreement (or group of related agreements) for the purchase
or sale of raw materials, commodities, supplies, products, or other
personal property, or for the furnishing or receipt of services, the
performance of which will extend over a period of
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more than one year, result in a material loss to the Buyer or involve
consideration in excess of $25,000;
(c) any agreement concerning a partnership or joint venture;
(d) any agreement (or group of related agreements) under which it
has created, incurred, assumed, or guaranteed any Indebtedness in excess
of $25,000 or under which it has imposed a Lien on any of its assets,
tangible or intangible;
(e) any agreement concerning confidentiality or noncompetition;
(f) any agreement relating to the Buyer, its assets, liabilities and
business between or among the Buyer and any of its Affiliates;
(g) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or
arrangement for the benefit of its current or former directors, officers,
and employees;
(h) any collective bargaining agreement;
(i) any agreement providing for the employment or consultancy with
any individual on a full-time, part-time, consulting or other basis in
excess of $25,000 per year or providing severance or retirement benefits;
(j) any agreement under which it has advanced or loaned any amount
to any of its stockholders, Affiliates, directors, officers, or employees
other than in the Ordinary Course of Business;
(k) any agreement under which the consequences of a default or
termination could have a Material Adverse Effect on the Buyer; or
(l) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $25,000 per year.
The Buyer has delivered to the Principal Sellers a correct and complete copy of
each written agreement listed in Section 4.19 of the Disclosure Schedule and a
written summary setting forth the terms and conditions of each oral agreement
referred to in Section 4.19 of the Disclosure Schedule. Except as disclosed in
Section 4.19 of the Disclosure Schedule, with respect to each such agreement:
(i) the agreement is legal, valid, binding, enforceable, and in full force and
effect; (ii) subject to the Buyer obtaining the necessary consents disclosed in
Section 4.32 of the Disclosure Schedule, the agreement will continue to be
legal, valid, binding, enforceable, and in full force and effect on materially
identical terms following the consummation of the transactions contemplated
hereby; (iii) no party is in breach or default in any material respect, and, to
the
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Knowledge of the Buyer, no event has occurred which with notice or lapse of time
would constitute a breach or default in any material respect, or permit
termination, material modification, or acceleration, under the agreement; and
(iv) no party has repudiated any provision of the agreement.
4.20. Notes and Accounts Receivable. Except as set forth in Section 4.20
of the Disclosure Schedule, all notes and accounts receivable of the Buyer are
reflected properly on its books and records in accordance with GAAP, are valid
receivables, arose from bona fide transactions in the Ordinary Course of
Business subject to no setoffs or counterclaims except as recorded as accounts
payable.
4.21. Powers of Attorney. Except as set forth in Section 4.21 of the
Disclosure Schedule and except pursuant to this Agreement, there are no
outstanding powers of attorney executed on behalf of the Buyer in respect of the
Buyer, its assets, liabilities or business.
4.22. Insurance and Risk Management. Section 4.22 of the Disclosure
Schedule sets forth the following information with respect to each insurance
policy (including policies providing property, casualty, liability, and workers'
compensation coverage and bond and surety arrangements) to which the business
operations of the Buyer is a party, a named insured, or otherwise the
beneficiary of coverage on the date hereof:
(a) the name, address, and telephone number of the agent;
(b) the name of the insurer, the name of the policyholder, and the
name of each covered insured;
(c) the policy number, the period of coverage and premium; and
(d) a description of any retrospective premium adjustments or other
loss-sensitive premium arrangements.
Except as set forth in Section 4.22 of the Disclosure Schedule, with respect to
each such insurance policy: (i) the policy is in full force and effect; (ii) the
transactions contemplated hereby will not result in the cancellation or
modification of such policies; (iii) neither the Buyer nor any other party to
the policy is in breach or default (including with respect to the payment of
premiums or the giving of notices), which would permit termination, material
modification, or acceleration, under the policy; (iv) the Buyer has delivered
true and complete copies of all policies and related indemnity or premium
payment agreements to the Principal Sellers; and (v) no party to the policy has
repudiated any provision thereof. Section 4.22 of the Disclosure Schedule
describes any self-insurance arrangements affecting the Buyer.
4.23. Litigation. Except as disclosed in Section 4.23 of the Disclosure
Schedule, there are no judicial or administrative actions, claims, suits,
proceedings or investigations pending or,
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to the Buyer's Knowledge, threatened, that if determined adversely to the Buyer
would be reasonably likely to result in a Material Adverse Effect on the Buyer,
or that question the validity of this Agreement or any of the Related Agreements
or of any action taken or to be taken pursuant to or in connection with the
provisions of this Agreement or any of the Related Agreements nor, to the
Buyer's Knowledge, is there any basis for any such action, claim, suit,
proceeding or investigation. There are no judgments, orders, decrees, citations,
fines or penalties heretofore assessed against the Buyer affecting adversely in
any material respect any of their respective assets, businesses or operations
under any federal, state or local law.
4.24. Product Warranties Defects Liability. Except as set forth in Section
4.24 of the Disclosure Schedule, to the Knowledge of the Buyer, substantially
all products manufactured, sold, leased, or delivered by the Buyer have been in
conformity in all material respects with all applicable contractual commitments
and all express and implied warranties, and the Buyer has no liability for
replacement or repair thereof, subject only to the reserve for product warranty
claims set forth on the face of the Most Recent Balance Sheet. Section 4.24 of
the Disclosure Schedule includes copies of the standard terms and conditions of
sale or lease for each of the Buyer's products generating $1,000,000 in annual
net sales, since January 1, 1996 (containing applicable guaranty, warranty, and
indemnity provisions). Except as set forth in Section 4.24 of the Disclosure
Schedule, to the Knowledge of the Buyer, the Buyer has no liability arising out
of any injury to individuals or property as a result of the ownership,
possession, or use of any product manufactured, sold, leased, or delivered by
the Buyer and there has been no inquiry or investigation made in respect thereof
by any Person including any governmental or administrative agency, other than
such liability for which the Buyer has obtained insurance coverage pursuant to
insurance policies listed in Section 4.22 of the Disclosure Schedule which such
policies will remain in full force and effect without material modification or
increase in premium as a result of the transactions contemplated hereby.
4.25. Employees. To the Knowledge of the Buyer, no executive, key
employee, or group of employees has any plans to terminate employment with the
Buyer. The Buyer has not experienced any labor disputes or work stoppage due to
labor disagreements. The Buyer is not, nor has ever been, a party to any
collective bargaining agreements or the subject of any organizational activity.
4.26. Employee Benefits.
(a) Section 4.26 of the Disclosure Schedule lists each Employee
Benefit Plan that the Buyer maintains or to which the Buyer contributes
relating to its current or former employees, officers or directors.
(i) Each such Employee Benefit Plan (and each related trust,
insurance contract, or fund) materially complies in form and in
operation in all respects with the applicable requirements of ERISA,
the Code, and other applicable laws.
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(ii) All required reports and descriptions (including Form
5500 Annual Reports, Summary Annual Reports, and Summary Plan
Descriptions) have been filed or distributed appropriately with
respect to each such Employee Benefit Plan. The requirements of Part
6 of Subtitle B of Title I of ERISA and of Code Section 4980B have
been met with respect to each such Employee Benefit Plan which is an
Employee Welfare Benefit Plan subject to such Part.
(iii) The Buyer has delivered to the Principal Sellers correct
and complete copies of the plan documents and summary plan
descriptions, the most recent Form 5500 Annual Report, and all
related trust agreements, insurance contracts, and other funding
agreements which implement each such Employee Benefit Plan.
(b) With respect to each Employee Benefit Plan that the Buyer
maintains or ever has maintained or to which it contributes, ever has
contributed, or ever has been required to contribute, there have been no
Prohibited Transactions. No Fiduciary has any liability for breach of
fiduciary duty or any other failure to act or comply in connection with
the administration or investment of the assets of any such Employee
Benefit Plan. No action, suit, proceeding, hearing, or investigation with
respect to the administration or the investment of the assets of any such
Employee Benefit Plan (other than routine claims for benefits) is pending
or threatened. The Buyer has no Knowledge of any basis for any such
action, suit, proceeding, hearing, or investigation.
(c) The Buyer does not maintain, nor ever has maintained, nor
contributes, nor ever has contributed, nor ever has been required to
contribute, to any Employee Welfare Benefit Plan providing medical,
health, or life insurance or other welfare-type benefits for current or
future retired or terminated employees, their spouses, or their dependents
(other than in accordance with Code Section 4980B).
(d) The Buyer does not maintain, nor ever has maintained, nor
contributes, nor ever has contributed, nor has ever been required to
contribute, to any Employee Pension Benefit Plan.
(e) No promise or commitment to amend or improve any Employee
Benefit Plan for the benefit of current or former directors, officers, or
employees which is not reflected in the documentation provided to the
Principal Sellers has been made.
(f) The transactions contemplated by this Agreement shall not alone
or upon the occurrence of any additional or subsequent event, result in
any payment, of severance or otherwise, or acceleration, vesting or
increase in benefits under any Employee Benefit Plan for the benefit of
any current or former director, officer, or employee of the Buyer.
4.27. Environment, Health, and Safety.
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(a) Except as disclosed in Section 4.27 of the Disclosure Schedule:
(i) The Buyer is and has been in compliance with all
applicable Environmental Laws and Safety Laws the violation of which
could have a Material Adverse Effect on the Buyer;
(ii) The Buyer has obtained, and is and has been in material
compliance with the conditions of, all Environmental Permits
required for the continued conduct of its business in the manner now
conducted and presently proposed to be conducted;
(iii) The Buyer has filed all required applications, notices
and other documents necessary to effect the timely renewal or
issuance of all Environmental Permits for the continued conduct of
its business in the manner now conducted and presently proposed to
be conducted;
(iv) there are, to the knowledge of the Buyer, no
circumstances or conditions present at or arising out of the present
or former assets, properties, leaseholds, businesses or operations
of the Buyer in respect of off-site storage, transportation or
disposal of, or any off-site Release of, a Chemical Substance which
reasonably may be expected to give rise to any Environmental
Liabilities and costs;
(v) there are, to the knowledge of the Buyer, no circumstances
or conditions present at or arising out of the present or former
assets, properties, leaseholds, businesses or operations of the
Buyer, including but not limited to any on-site Storage, use,
disposal or Release of a Chemical Substance, which reasonably may be
expected to give rise to any Environmental Liabilities and Costs or
Safety Liability and Costs;
(vi) none of the Buyer or the present or past assets,
properties, businesses, leaseholds or operations of the Buyer has
received or is subject to, or within the past three years has been
subject to, any outstanding order, decree, judgment, complaint,
agreement, claim, citation, or notice or is subject to any ongoing
judicial or administrative proceeding indicating that Buyer or the
past and present assets of the Buyer are or may be: (A) in violation
of any Environmental Law; (B) in violation of any Safety Laws; (C)
responsible for the on-site or off-site storage or Release of any
Chemical Substance; or, (D) liable for any Environmental Liabilities
and Costs or Safety Liabilities and Costs;
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(vii) no investigation or review with respect to the matters
identified in subsection (vi) is pending or, to the Knowledge of the
Buyer, is threatened, nor has any Authority or other third-party
indicated an intention to conduct the same;
(viii) neither the business of the Buyer nor any of its
properties or assets is subject to, or as a result of the
transactions contemplated by this Agreement will be subject to, the
requirements of any Environmental Laws which require notice,
disclosure, cleanup or approval prior to transfer of the Buyer
Shares or the business of the Buyer or which will impose Liens on
any such asset or property or otherwise interfere with or affect the
business of the Buyer;
(ix) Section 4.27 of the Disclosure Schedule lists all
property presently or previously leased, owned or operated by the
Buyer and identifies all such property (and the area within that
property) that has been used by the Buyer or by any other Person
(including a prior owner or operator) for the storage or disposal of
Chemical Substances;
(x) Section 4.27 of the Disclosure Schedule lists all off-site
locations, including, without limitation, commercial waste disposal
facilities or municipal landfills, to which or at which Chemical
Substances originating from the Buyer or its assets, properties or
business have been sent (or otherwise have come to be located) in
amounts that would require a waste manifest under the Resource
Conservation and Recovery Act of 1976 as now in effect for
treatment, storage, disposal, reuse or recycling;
(xi) Section 4.27 of the Disclosure Schedule sets forth a list
of all underground storage tanks owned or operated at any time by
the Buyer and, except as disclosed in Section 4.27 of the Disclosure
Schedule, no such tank is leaking or has leaked at any time in the
past, and there is no pollution or contamination of the Environment
caused by or contributed to or threatened by a Release of a Chemical
Substance from any such tank; and
(xii) Section 4.27 of the Disclosure Schedule lists all
environmental audits, inspections, assessments, investigations or
similar reports in the Buyer's possession or of which the Buyer is
aware relating to the Buyer's assets, properties or business or the
compliance of the same with applicable Environmental Laws and Safety
Laws.
(b) For purposes of this Section 4.27 only, all references to "the
Buyer" are intended to include any and all other entities to which the
Buyer may be considered a successor under applicable Environmental Laws.
The representations and warranties in this section are the only
representations and warranties with respect to Environmental
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Laws or Environmental Liabilities and Costs, or Safety Laws or Safety
Liabilities and Costs notwithstanding any other language in this Agreement
of general applicability.
4.28. Affiliated Transactions. Except as set forth in Section 4.28 of the
Disclosure Schedule, the Buyer is not party to or bound by any contract,
commitment or understanding with any of its stockholders, directors or officers
or any of their Affiliates or any member of their family and none of its
stockholders, directors or officers or those of Affiliates or any member of
their family owns or otherwise has any rights to or interests in any asset,
tangible or intangible, which is used in the business of the Buyer.
4.29. Government Contracts. Except as set forth in Section 4.29 of the
Disclosure Schedule, the Buyer has not been and is not a party to any contract
or arrangement with any federal, state or local government agency.
4.30. Distributors, Customers, Suppliers. Section 4.30 of the Disclosure
Schedule sets forth a complete and accurate list of (i) the ten largest
customers (by dollar volume) of the Buyer during the Most Recent Fiscal Year,
indicating the existing contractual arrangements with each such customer by
product, (ii) all suppliers of significant materials or services to the Buyer,
indicating the contractual arrangements for continued supply from such Person
and (iii) the ten largest distributors (by dollar sales volume) of products of
the Buyer. Except as set forth in Section 4.30 of the Disclosure Schedule, the
Buyer has not been threatened or notified, orally or in writing, by one or more
of the distributors, customers or suppliers listed in Section 4.30 of the
Disclosure Schedule that such Persons have terminated or intend to terminate or
are considering terminating their respective business relationships with the
Buyer, or are modifying such relationships with the Buyer in a manner which is
less favorable to the Buyer.
4.31. No Illegal Payments, Etc. To the Knowledge of the Buyer, neither the
Buyer, nor any of the directors, officers, employees or agents of the Buyer, has
(a) directly or indirectly given or agreed to give any illegal gift,
contribution, payment or similar benefit to any supplier, customer, governmental
official or employee or other person who was, is or may be in a position to help
or hinder the Buyer (or assist in connection with any actual or proposed
transaction) or made or agreed to make any illegal contribution, or reimbursed
any illegal political gift or contribution made by any other person, to any
candidate for federal, state, local or foreign public office (i) which would
subject the Buyer to any damage or penalty in any civil, criminal or
governmental litigation or proceeding or (ii) the non-continuation of which has
had or might have, individually or in the aggregate, a Material Adverse Effect
on the Buyer or (b) established or maintained any unrecorded fund or asset or
made any false entries on any books or records for any purpose.
4.32. Consents. Section 4.32 of the Disclosure Schedule sets forth a true,
correct and complete list of any Person whose consent or approval is required
and the matter, agreement or contract to which such consent relates in
connection with the consummation of the transactions contemplated by this
Agreement.
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4.33. Disclosure. The representations and warranties contained in this
Section 4 (including the Disclosure Schedule and any other schedules and
exhibits required to be delivered by the Buyer to the Sellers pursuant to this
Agreement) and any certificate required to be furnished by the Buyer to the
Sellers at the Closing do not contain and will not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements contained therein not misleading.
4.34. Disclaimer of Other Representations and Warranties. Except as
expressly set forth in this Section 4, the Buyer makes no representation or
warranty, express or implied, at law or in equity, in respect of the Buyer and
NewSub, or any of their respective assets, liabilities or operations, including,
without limitation, with respect to merchantability or fitness of any asset or
product for any particular purpose, and any such other representations or
warranties are hereby expressly disclaimed.
4.35. Interim Operations of NewSub. NewSub was formed solely for the
purpose of engaging in the transactions contemplated hereby, has engaged in no
other business activities and has conducted its operations only as contemplated
hereby. As of the date hereof and the Effective Time, except for obligations or
liabilities incurred in connection with its incorporation or organization and
the transactions contemplated by this Agreement, NewSub has not and will not
have incurred, directly or indirectly, through any Subsidiary, any obligations
or liabilities or engaged in any business activities of any type or kind
whatsoever or entered into any agreements or arrangements with any Person.
5. Covenants. The Parties agree as follows:
5.1. General. Each of the Parties will use its respective commercially
reasonable best efforts to take all action and to do all things necessary,
proper, or advisable in order to consummate and make effective (a) the Merger
and the other transactions contemplated by this Agreement (including
satisfaction, but not waiver, of the closing conditions set forth in Section 6
below) and (b) the offer and sale by the Buyer, as soon as practicable after the
Closing Date, in an underwritten Initial Public Offering, of common stock issued
by the Buyer at a price per share currently anticipated to be $11.00, with
aggregate net proceeds to the Buyer from such public offering currently
anticipated to be $44 million.
5.2. Notices and Consents. From and after the date of this Agreement
through the Effective Time, each of the Parties has given any notices to third
parties, and will use its or his commercially reasonable best efforts to obtain
any third party consents that are required in connection with the transactions
contemplated by this Agreement, as set forth in Section 3.32 and Section 4.32 to
the Disclosure Schedule, including without limitation.
5.3. Operation of Business. From and after the date of this Agreement
through the Effective Time, each of Amitek and Buyer will not (and will not
cause or permit any of its
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Subsidiaries to) engage in any practice, take any action, or enter into any
transaction outside the Ordinary Course of Business. Without limiting the
generality of the foregoing, each of Amitek and Buyer (i) will not (and will not
cause or permit any of its Subsidiaries to) (A) change or amend its charter or
by-laws; (B) issue, sell or otherwise dispose of any of its capital stock or
grant any options, warrants or other rights to purchase or obtain (including
upon conversion, exchange or exercise) any of its capital stock, declare, set
aside, or pay any dividend or make any distribution with respect to its capital
stock or redeem, purchase, or otherwise acquire any of its capital stock, (C)
will not pay any amount to any third party with respect to any liability or
obligation (including any costs and expenses that have been incurred or may be
incurred in connection with this Agreement and the transactions contemplated
hereby) outside the Ordinary Course of Business or in excess of $25,000 or (D)
otherwise engage in any practice, take any action, or enter into any transaction
of the sort described in Section 3.11 or Section 4.11 above, as the case may be,
and (ii) Amitek will use its commercially reasonable best efforts to (A) keep
available to the Surviving Company and the Buyer, the services of its present
officer's, employees, agents and independent contractors, (B) preserve for the
benefit of Buyer the goodwill of Amitek's customers, suppliers, landlords and
others having business relations with it; (C) cooperate with Buyer in assisting
it to obtain the financing of the cash portion of the Merger Consideration.
Notwithstanding anything to the contrary in this Section 5.3 or elsewhere
in this Agreement, the Sellers, in their capacity as stockholders of Amitek,
shall be entitled to receive cash distributions ("Tax Distributions") that fully
cover their tax liability attributable to Amitek's income for the period
commencing January 1, 1999 and ending on the Closing Date calculated by assuming
that the highest marginal individual tax rate applicable to Florida residents
applies to that income. If there is an outstanding balance in Amitek's
accumulated adjustments account (the "AA Account") within the meaning of Section
1368 of the Code after such Tax Distributions are made, the Sellers may elect to
take a distribution to the extent of the outstanding AA Account balance (the "AA
Distribution").
5.4. Preservation of Business. From and after the date of this Agreement
through the Effective Time, each of Amitek and the Buyer will use its
commercially reasonable best efforts to keep (and will cause each of its
Subsidiaries to use its commercially reasonable best efforts to keep) its
business and properties substantially intact, including its present operations,
physical facilities, working conditions, and relationships with lessors,
licensors, suppliers, customers, and employees.
5.5. Full Access. From and after the date of this Agreement through the
Effective Time, each of Amitek and the Buyer will permit (and will cause each of
its Subsidiaries to permit) representatives of the other Parties to have full
access at all reasonable times, and in a manner so as not to interfere with the
normal business operations, to all of its premises, properties, personnel,
books, records (including Tax records), contacts, and documents.
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5.6. Notice of Developments. From and after the date of this Agreement
through Effective Time, each Party will give prompt written notice to the other
Party of any development causing a breach of any of its own representations and
warranties in Section 3 or Section 4 above. No disclosure by any Party pursuant
to this Section 5.6, however, shall be deemed to amend or supplement the
Disclosure Schedule or to prevent or cure any misrepresentations, breach of
warranty, or breach of covenant.
5.7. Exclusivity. From and after the date of this Agreement through the
Effective Time, none of Amitek, the Principal Sellers or the Buyer will (and
each of them will not cause or permit any of its Subsidiaries, or any of their
officers, directors, employees, agents or Affiliates to) (i) solicit, initiate,
or encourage the submission of any proposal or offer from any Person relating or
enter into or consummate any transaction relating to the acquisition of any
capital stock or other voting securities, or any substantial portion of the
assets, of any of Amitek, the Buyer or any of their respective Subsidiaries
(other than sales of inventory for a fair value in the Ordinary Course of
Business) (including any acquisition structured as a merger, consolidation, or
share exchange) or (ii) participate in any discussions or negotiations
regarding, furnish any information with respect to, assist or participate in, or
facilitate in any other manner any effort or attempt by any Person to do or seek
any of the foregoing. Amitek and the Principal Sellers will notify the Buyer
immediately if any Person makes any proposal, offer, inquiry, or contact with
respect to any of the foregoing, and the Buyer will notify Principal Sellers
immediately if any Person makes any proposal, offer, inquiry, or contact with
respect to any of the foregoing
5.8. Access to Records after Closing. For a period of three years after
the Closing Date, the Principal Sellers and their representatives shall have
reasonable access to all of the books and records Amitek to the extent that such
access may reasonably be required by the Principal Sellers in connection with
matters relating to or affected by the operations of Amitek prior to the Closing
Date. Such access shall be afforded by Buyer upon receipt of reasonable advance
notice and during normal business hours. The Principal Sellers shall be solely
responsible for any costs or expenses incurred by them pursuant to this Section
5.8. If Buyer shall desire to dispose of any of such books and records prior to
the expiration of such three-year period, Buyer shall, prior to such
disposition, give the Principal Sellers a reasonable opportunity, at the
Principal Sellers' expense, to segregate and remove such books and records as
the Principal Sellers may select.
5.9. Future Assurances. At any time and from time to time after the
Closing, at the request of Buyer and without further consideration, the
Principal Sellers will execute and deliver such other instruments of sale,
transfer, conveyance, assignment and confirmation and take such action as Buyer
may reasonably determine is necessary to transfer, convey and assign to Buyer,
and to confirm Buyer's title to or interest in Amitek, to put Buyer in actual
possession and operating control thereof and to assist Buyer in exercising all
rights with respect thereto. The Principal Sellers hereby constitute and appoint
Buyer and its successors and assigns as their true and lawful attorney in fact
in connection with the transactions contemplated by this instrument, with full
power of substitution, in the name and stead of the Principal Sellers but on
behalf of and
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for the benefit of the Buyer and its successors and assigns, to demand and
receive any and all of the assets, properties, rights and business hereby
conveyed, assigned, and transferred or intended so to be, and to give receipt
and releases for and in respect of the same and any part thereof, and from time
to time to institute and prosecute, in the name of the Principal Sellers or
otherwise, for the benefit of the Buyer or its successors and assigns,
proceedings at law, in equity, or otherwise, which the Buyer or its successors
or assigns reasonably deem proper in order to collect or reduce to possession or
any of the assets of Amitek to do all acts and things in relation to the assets
which the Buyer or its successors or assigns reasonably deem desirable.
5.10. Certain Tax Matters.
(a) Tax Treatment. The Parties shall use their respective best
efforts to cause the transactions contemplated hereby to qualify as a
reorganization under the provisions of Section 368(a) of the Code. Without
limiting the foregoing, (i) all Parties hereto agree to comply with the
reporting requirements of Treasury Regulation Section 1.368-3, (ii) all
Parties hereto agree to provide customary representation letters in
connection with the provision of the Tax Opinions contemplated by Section
6.1 and 6.2 hereof, and (iii) the Buyer, the Buyer's Affiliates and the
Principal Sellers agree not to take any action before or after the date
hereof to cause the Merger contemplated hereby not to be qualify as a
tax-free reorganization.
(b) Pre-Closing Tax Returns. The Principal Sellers shall prepare (or
cause to be prepared) and the Surviving Corporation shall timely file all
Tax Returns ("Pre-Closing Tax Returns") for Amitek that are required to be
filed after the Closing Date and that relate to any taxable period (or
portion thereof) ending on or before the Closing Date. The Principal
Sellers shall permit the Buyer to review and comment on each Pre-Closing
Tax Return at least ten (10) business days prior to the filing thereof.
(c) Cooperation. The Buyer, the Surviving Corporation, Amitek and
the Principal Sellers shall cooperate fully, as and to the extent
reasonably requested by the other parties, in connection with the filing
of Pre-Closing Tax Returns pursuant to this Section 5.10 and any audit,
litigation or other proceeding with respect to Taxes. Such cooperation
shall include (x) the retention and, upon any other Party's request, the
provision of records and information which are reasonably relevant to any
such audit, litigation or other proceeding, and (y) making employees
available on a mutually convenient basis to provide additional information
and explanation of any material provided hereunder. Surviving Corporation
shall (A) retain all books and records with respect to tax matters
pertinent to Amitek and/or the Principal Sellers relating to any taxable
period beginning before the Closing Date until the expiration of the
statute of limitations (and, to the extent notified by the Buyer or the
Principal Sellers, any extensions thereof) of the respective taxable
periods, and to abide by all record retention agreements entered into with
any taxing authority, and (B) give all other Parties reasonable written
notice prior to transferring, destroying or discarding any such books
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and records, and, if the records are to be discarded or destroyed and such
other Parties so request, the Surviving Corporation shall allow the
requesting Parties to take possession of such books and records prior to
destroying or discarding them.
(d) Tax Audits and Proceedings Relating to a Pre-Closing Period.
After the Closing, the Buyer or the Surviving Corporation shall promptly
notify the Principal Sellers in writing of any written notice of a
proposed assessment or claim in an audit or administrative or judicial
proceeding of Amitek attributable to any period prior to the Closing Date.
In the case of an audit or administrative or judicial proceeding that
relates to periods (or portions thereof) ending before the Closing Date,
the Principal Sellers shall have the right, at their expense, to
participate in and control such audit or proceeding to the extent that
such audit or proceeding relates to a potential adjustment for which the
Principal Sellers would have liability; the Buyer may participate in, (but
not control) at the Buyer's expense, any such audit or proceeding. Neither
the Buyer, the Surviving Corporation nor the Principal Sellers shall enter
into any compromise or agree to settle any claim pursuant to any tax audit
or proceeding that would have an adverse effect on any other Party without
the written consent of such other Party, which consent may not be
unreasonably withheld or unreasonably delayed. The Buyer, the Surviving
Corporation and the Principal Sellers agree to cooperate in the defense
against or compromise of any claim in any audit or proceeding.
(e) Tax Benefits Relating to Compensatory Payments, Stock Option
Agreement and Bonus Plan. Buyer shall promptly pay to the Principal
Sellers, upon actual realization, as part of the purchase price for the
Amitek Shares, amounts equal to the amounts by which the total Tax
liability of Buyer, Amitek, the Surviving Corporation or any affiliate or
any successor thereto is reduced (i.e. net of any directly related Tax
costs) as a result of Tax deductions or other Tax benefits resulting from
compensatory payments to certain long-term or key employees of Amitek
pursuant to the Bonus and Settlement for Past Services Agreements, the
Stock Option Agreement and the Bonus Plan. Purchaser shall use its
reasonable best efforts to claim such Tax deductions or other Tax benefits
at the earliest possible time (and to mitigate any such directly related
Tax costs). Such payment shall be made 50% in cash and 50% in Century
Common Stock valued at the then Fair Value for such stock.
5.11. National Bank of Canada Loan Obligations. Buyer shall use its best
efforts to cause National Bank of Canada ("NBC") to consent to the consummation
of the Merger and the other transactions contemplated in this Agreement under
the Loan Agreement dated June 4, 1998, as amended, among NBC, Amitek, M&K and
the Principal Sellers, and all related guarantees, security agreements, notes
and mortgages (collectively, the "NBC Loan Documents"), and to release the
Principal Sellers and M&K from all of their respective obligations under the NBC
Loan Documents. Each of Amitek and the Principal Sellers shall cooperate with
Buyer in connection with Buyer obtaining such NBC consents and releases.
Notwithstanding anything to the contrary in Article 9 or otherwise in this
Agreement, Buyer shall
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indemnify and hold the Principal Sellers and M&K harmless from and after the
Closing Date from and against all Losses arising out of or in connection with
the NBC Loan Documents.
5.12. Capital Leases. Notwithstanding anything to the contrary in this
Agreement, Buyer understands and agrees that Amitek shall use its commercially
reasonable best efforts to seek to obtain the consent or approval of the Merger
and the other transactions contemplated by this Agreement from any other party
to the capital leases set forth on Exhibit E hereto, whether or not such capital
leases by their terms require any such consent or approval. Notwithstanding
anything to the contrary in Article 9 or otherwise in this Agreement, in the
event Amitek fails to obtain such consents or approvals, Buyer agrees to
indemnify and hold harmless each of the Principal Sellers and M&K from and after
the Closing Date from and against all Losses arising out of or in connection
with such capital leases. Buyer covenants and agrees to use its best efforts to
obtain any required consents or approvals of any other parties under such
capital leases and to cause the release of the Principal Sellers and M&K from
all of their respective obligations thereunder or relating thereto, all within
one year after the Closing Date, and to provide reasonably satisfactory evidence
thereof to the Principal Sellers. In the event Buyer shall for any reason fail
to obtain any such consents, approvals and releases within such one-year period,
Buyer shall pay in full and discharge and release all outstanding obligations of
Amitek, the Principal Sellers, M&K and the Surviving Corporation under such
capital leases.
5.13. Certain Amitek Trade Payables. Buyer understands and agrees that, as
more fully described in Exhibit F hereto, in consideration for the cancellation
of certain indebtedness owed by Amitek to M&K, Amitek has assumed all liability
for certain trade payables of M&K (and of Amitek and M&K jointly) (the "Assumed
Payables") and agreed to hold harmless M&K and the Principal Sellers from and
against all Losses arising out of or in connection with the Assumed Payables.
Notwithstanding anything to the contrary in Article 9 or otherwise in this
Agreement, Buyer agrees to indemnify and hold harmless the Principal Sellers and
M&K from and after the Closing Date from and against all Losses arising out of
or in connection with the Assumed Payables.
5.14. Removal of Non-Amitek Assets and Personnel. In the interests of a
smooth transition, the Buyer and the Surviving Corporation hereby agree to
permit the Principal Sellers and their affiliates to locate certain non-Amitek
assets and personnel, described in Exhibit Q hereto, at the Amitek facility at
0000 Xxxxx Xxxxx Xxxx, Xxxx Xxxxx, XX, without further compensation therefor,
until January 15, 2000.
5.15. "Drop Down" of Amitek Assets and Liabilities to NewSub. Immediately
following the Effective Time, the Buyer shall assign to NewSub, and NewSub shall
assume, all of the Buyer's right, title and interest in, to and under all
property, rights, privileges, powers, franchises, contracts, agreements, leases,
undertakings, commitments, and other property and assets of Amitek acquired, and
all debts, liabilities, duties and obligations of Amitek assumed, by the Buyer
in the Merger, all pursuant to an Assignment and Assumption Agreement by and
between the Buyer and NewSub in substantially the form attached hereto as
Exhibit R.
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6. Conditions to Obligation to Close.
6.1. Conditions to Obligation of the Buyer. The obligation of the Buyer to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(a) Representations and Warranties. The representations and
warranties set forth in Section 3 above shall be true and correct when
made and shall be deemed to have been made again at and as of the Closing
Date and shall then be true and correct in all material respects, in the
case of those representations and warranties which are not by their
express terms qualified by reference to materiality;
(b) Performance by Sellers. The Sellers shall have performed and
complied with all of their covenants, agreements and obligations hereunder
through the Closing;
(c) Consents. The Sellers shall have (i) procured all of the
governmental approvals, consents or authorizations and third party
consents specified in Section 3.32 and Section 5.2 above;
(d) Absence of Litigation. No action, suit, or proceeding shall be
pending or threatened before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge would
(i) prevent consummation of any of the transactions contemplated by this
Agreement, (ii) cause any of the transactions contemplated by this
Agreement to be rescinded following consummation, (iii) affect adversely
the right of the Buyer to own the Amitek Shares or have a Material Adverse
Effect on Amitek (and no such injunction, judgment, order, decree, ruling,
or charge shall be in effect);
(e) Xxxxxxxx Employment Agreement. Xxxx Xxxxxxxx shall have entered
into an Employment, Consulting and Noncompetition Agreement substantially
in the form of Exhibit G hereto and the same shall be in full force and
effect.
(f) Certificates. The Principal Sellers shall have delivered to the
Buyer a certificate to the effect that each of the conditions specified in
Section 6.1(a) and (b) is satisfied in all respects;
(g) Buyer's Stockholders Agreement. Each of the Principal Sellers
shall have executed an instrument of joinder to the Buyer's Stockholders
Agreement, as amended and restated in its entirety in the form of Exhibit
H hereto, agreeing to be bound as a party thereto;
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(h) Opinion. The Buyer shall have received from Ropes & Xxxx,
counsel to the Principal Sellers, an opinion in form and substance as set
forth in Exhibit I attached hereto, addressed to the Buyer, and dated as
of the Closing Date;
(i) Tax Opinion. The Buyer shall have received from Xxxxxxxx &
Xxxxxx, tax counsel to the Buyer, an opinion reasonably satisfactory to
the Buyer that the merger transactions qualify as "tax-free"
reorganizations under Code Sections 368(a)(1)(A) and 368(a)(2)(D);
(j) No Material Adverse Change in Amitek. There shall not have been
any change which has resulted in a Material Adverse Effect on Amitek and
no event has occurred or circumstance exists that may result in such a
Material Adverse Effect.
(k) All Necessary Actions. All actions to be taken by Amitek in
connection with the consummation of the transactions contemplated hereby
and all certificates, opinions, instruments and other documents required
to effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Buyer.
(l) Consent of Fidelity and USA Funding. The Buyer shall have
received any required consent and approvals from Fidelity and USA Funding.
The Buyer may waive any condition specified in this Section 6.1 if it
executes a writing so stating at or prior to the Closing and such waiver
shall not be considered a waiver of any other provision in this Agreement
unless the writing specifically so states.
6.2. Conditions to Obligations of the Principal Sellers and Amitek. The
obligation of the Principal Sellers and Amitek to consummate the transactions to
be performed by them in connection with the Closing is subject to satisfaction
of the following conditions:
(a) Representations and Warranties. The representations and
warranties set forth in Section 4 above shall be true and correct when
made and shall be deemed to have been made again at and as of the Closing
Date and shall then be true and correct in all material respects, in the
case of those representations and warranties which are not by their
express terms qualified by reference to materiality;
(b) Performance by Buyer. The Buyer shall have performed and
complied with all of its covenants, agreements and obligations hereunder
through the Closing;
(c) Absence of Litigation. No action, suit, or proceeding shall be
pending or threatened before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge would
(i) prevent consummation of any of the transactions contemplated by this
Agreement or (ii) cause any of the transactions contemplated by this
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Agreement to be rescinded following consummation, (iii) affect adversely
the right of the Sellers to own the Buyer Shares or have a Material
Adverse Effect on the Buyer (and no such injunction, judgment, order,
decree, ruling, or charge shall be in effect);
(d) Buyer's Board of Directors. Xxxxx Xx Park shall have been duly
elected, effective as of the Closing, to serve as a director of the Buyer
pursuant to the provisions of the Buyers' Stockholders Agreement;
(e) Buyer's Stockholders Agreement. The Buyer's Stockholders
Agreement shall have been amended by the Waiver of Rights and Amendment
under Stockholders Agreement set forth as Exhibit J hereto, and the same
shall be in full force and effect;
(f) Certificates. The Buyer shall have delivered to Amitek a
certificate to the effect that each of the conditions specified in Section
6.2(a) and (b) is satisfied in all respects;
(g) Employment Agreement. The Buyer and Xxxxx Xx Park shall have
entered into an Employment Agreement substantially in the form of Exhibit
K hereto and the same shall be in full force and effect;
(h) Stock Pledge Agreement. The Buyer shall have executed a Stock
Pledge Agreement substantially in the form of Exhibit L hereto and the
same shall be in full force and effect; and the Buyer shall have duly
authorized, executed, acknowledged, delivered, filed, registered and
recorded such security agreements, notices, financing statements,
memoranda of intellectual property security interests and other
instruments as the Principal Sellers may have reasonably requested in
order to perfect the Liens purported or required pursuant to the Stock
Pledge Agreement and shall have paid all filing or recording fees or taxes
required to be paid in connection therewith, including any recording,
mortgage, documentary, transfer or intangible taxes.
(i) Registration Rights Agreement. The Buyer and the Sellers shall
have executed a Registration Rights Agreement substantially in the form of
Exhibit M hereto and the Buyer and HarbourVest shall have executed a
Waiver of Rights and Amendment in the form of Exhibit O hereto, and each
of the same shall be in full force and effect;
(j) No Material Adverse Change in the Buyer. There shall not have
been any change which has resulted in a Material Adverse Effect on the
Buyer and no event has occurred or circumstance exists that may result in
such a Material Adverse Effect.
(k) Opinion. The Principal Sellers shall have received from counsel
to the Buyer an opinion in form and substance as set forth in Exhibit N
attached hereto, addressed to the Principal Sellers, and dated as of the
Closing Date;
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(l) Tax Opinion. The Principal Sellers shall have received from
Ropes & Xxxx, tax counsel to the Principal Sellers, an opinion reasonably
satisfactory to the Principal Sellers that the merger transactions qualify
as "tax-free" reorganizations under Code Sections 368(a)(1)(A) and
368(a)(2)(D);
(m) Valuation Opinion. The Principal Sellers shall have received a
valuation opinion of Advest, dated as of the Closing Date, reasonably
satisfactory to the Principal Sellers, valuing the Buyer Shares at no less
than 50% of the total Merger Consideration; and
(n) All Necessary Actions. All actions to be taken by the Buyer in
connection with the consummation of the transactions contemplated hereby
and all certificates, opinions, instruments and other documents required
to effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Principal Sellers.
(o) NBC Loan Documents. The consent of NBC under the NBC Loan
Documents shall have been granted and the obligations of the Principal
Sellers and M&K under the NBC Loan Documents shall have been discharged
and released in accordance with Section 5.11, or all indebtedness and
liens outstanding under the NBC Loan Documents shall have been paid in
full and discharged in accordance with Section 5.11, all to the complete
satisfaction of the Principal Sellers.
(p) Capital Leases. Any required consents or approvals of the
respective lessors under each of the capital leases set forth in Exhibit E
hereto (the "Capital Leases") shall have been obtained and all obligations
of the Principal Sellers and M&K in respect of the Capital Leases shall
have been discharged or released, all to the complete satisfaction of the
Principal Sellers.
(q) Centennial Waiver or Buy-Out. Either (I) the Buyer and
Centennial Technologies, Inc., a Delaware corporation, or any successor or
assignee thereof ("Centennial"), shall have executed a document in
substantially the form of the Waiver of Rights and Amendment attached as
Exhibit O with only such changes as are necessary to reflect that such
agreement refers to the registration rights of Centennial rather than to
those of HarbourVest, or (II) the Buyer shall have repurchased all of the
capital stock of the Company owned by Centennial and all registration
rights shall have been terminated in connection therewith.
The Principal Sellers may waive any condition specified in this Section
6.2 if they all execute a writing so stating at or prior to the Closing and such
waiver shall not be considered a waiver of any other provision in this Agreement
unless the writing specifically so states.
7. Noncompetition.
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(a) Each Principal Seller agrees that, in consideration of the purchase by
Buyer hereunder, it, he or she shall not, on or prior to the date which is three
(3) years after the Closing Date, directly or indirectly, run, own, manage,
operate, control, be employed by, provide consulting services to, be an officer
or director of, participate in, lend his, her or its name to, invest in or be
connected in any manner with the management, ownership, operation or control of
any business, venture or activity which competes with the business being
conducted or proposed to be conducted at the Closing Date by the Buyer, Merger
Sub as the Surviving Corporation or Amitek; provided, however, no Principal
Seller shall be considered to be in default of this Section 7 solely by virtue
of holding for portfolio purposes as a passive investor not more than five
percent (5%) of the issued and outstanding equity securities of a corporation,
the equity securities of which are listed or quoted on a stock exchange or an
over-the-counter market within the United States; provided, further, that no
Principal Seller shall be considered to be in default of this Section 7 by
virtue of his continued participation in any activity which is disclosed in
Section 7 of the Disclosure Schedule; provided, further, that no Principal
Seller shall be considered to be in default of this Section 7 by virtue of his
ownership, operation, control or management of or any other participation with
or in NewSub in connection with the enforcement of the Principal Sellers' rights
under the Stock Pledge Agreement.
(b) Each of the Principal Sellers further agrees that for a period of
three (3) years after the Closing Date such Principal Seller will not directly
or indirectly without the prior written consent of Buyer, recruit, offer
employment, employ, engage as a consultant, lure or entice away or in any other
manner persuade or attempt to persuade any person who is an employee of Amitek,
the Buyer, NewSub or any Subsidiary, group, or division of Buyer, or any
Affiliate thereof, to leave such employment unless such person has been
terminated by such Person.
8. Confidentiality. Each of the Parties will treat and hold as such all of the
Confidential Information of the other Parties, refrain from using any of the
Confidential Information of the other Parties except in connection with this
Agreement (including seeking the approval of any of its institutional or
corporate shareholders, including but not limited to HarbourVest Partners
V-Direct Fund and Centennial Technologies, Inc.), and deliver promptly to such
other Parties or destroy, at the request and option of such other Parties, all
tangible embodiments (and all copies) of such other Parties' Confidential
Information which are in his or its possession. In the event that any Party is
requested or required (by oral question or request for information or documents
in any legal proceeding, interrogatory, subpoena, civil investigative demand, or
similar process) to disclose any Confidential Information of another Party, such
Party will notify the other Party promptly of the request or requirement so that
the other Party may seek an appropriate protective order or waive compliance
with the provisions of this Section 8. If, in the absence of a protective order
or the receipt of a waiver hereunder, any Party is, on the advice of counsel,
compelled to disclose any Confidential Information to any tribunal or else stand
liable for contempt, that Party may disclose the Confidential Information to the
tribunal; provided, however, that the disclosing Party shall use his or its best
efforts to obtain, at the request of the other Party, an order or other
assurance that confidential treatment will be accorded to such portion of the
Confidential
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Information required to be disclosed as such other Party shall designate.
Notwithstanding the foregoing, each of the Parties acknowledge that each
institutional and corporate shareholder identified above shall be permitted to
disclose summary financial information and narrative descriptions relating to
the Confidential Information to its partners and shareholders and prospective
partners and shareholders.
9. Indemnification.
9.1. Exclusive Remedy. This Section 9 shall provide the sole and exclusive
remedy following the Closing for any and all Losses sustained or incurred by any
Party or its successors and assigns relating to or arising in connection with
(a) any inaccuracy or breach of a representation or warranty made in this
Agreement, (b) any breach or failure to comply with any covenants or agreements
contained herein or in any document delivered hereunder which do not require
performance after the Effective Time, (c) any misrepresentation in or omission
from any certificate, instrument or other document delivered hereunder or in
connection herewith or (d) any other Losses that arise in connection with this
Agreement or with respect to which indemnification is provided in this Section
9.
9.2. Survival of Representations and Warranties. All of the
representations and warranties contained herein or in any document, certificate
or other instrument required to be delivered hereunder shall survive the Closing
and continue in full force and effect for a period of eighteen (18) months after
the Closing Date. Following the termination of any such representation and
warranty, no party shall have the right or be permitted to bring any claim for
breach of such terminated representation or warranty unless written notice
thereof is given to the breaching party or parties prior to such termination
date. All covenants and indemnities of the Parties in this Agreement or in any
document or certificate delivered hereunder shall, unless otherwise specifically
provided therein, remain in full force and effect forever.
9.3. Indemnity by Principal Sellers. The Principal Sellers hereby agree to
jointly and severally indemnify, defend and hold harmless Buyer and each of its
directors, officers and Affiliates against and in respect of all liabilities,
obligations, judgments, Liens, injunctions, charges, orders, decrees, rulings,
damages, dues, assessments, Taxes, losses, fines, penalties, expenses, fees,
costs, amounts paid in settlement (including reasonable attorneys' and expert
witness fees and disbursements in connection with investigating, defending or
settling any action or threatened action), arising out of any claim, damages,
complaint, demand, cause of action, audit, investigation, hearing, action, suit
or other proceeding asserted or initiated or otherwise existing in respect of
any matter, whether or not arising out of a claim by a third party
(collectively, the "Losses") resulting from (a) the inaccuracy of any
representation or warranty made by Amitek or the Principal Sellers herein, (b)
any misrepresentation, breach of warranty or nonfulfillment of any agreement or
covenant of the Principal Sellers or Amitek contained herein or in any agreement
or instrument required to be entered into in connection herewith, or (c) any
misrepresentation in or omission from any schedule, document, certificate or
other instrument required to be furnished by Amitek or the Principal Sellers
hereunder; provided, however, that,
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notwithstanding anything in this Agreement to the contrary, the Principal
Sellers shall be liable under this Section 9.3 in respect of Losses only if the
aggregate of such Losses exceeds $500,000 in which case the Principal Sellers
will be liable under this Section 9.3 for the amount of such Losses in excess of
$250,000, up to a maximum aggregate amount of $7,000,000 (such $7,000,000
aggregate maximum amount to be reduced dollar-for-dollar in the amount of any
decrease in the Merger Consideration pursuant to Section 2.10 or Section 2.11
hereof; provided, that the amount of any such decrease in the Merger
Consideration shall not be counted as a "Loss" for purposes of the $500,000 or
$250,000 thresholds); and provided, further, that such Losses shall be measured
in each case net of (i) the present value (using the applicable federal rate
under Code Section 1274(a)(1)) of any income Tax benefits to the Buyer or NewSub
reasonably expected to be realized by them as a result of such Loss and (ii)
insurance proceeds if and when actually received by the Buyer or NewSub, but
Buyer and NewSub shall retain the right in their sole discretion to determine
whether to pursue such claims by, through or against an insurer or to bring such
claims directly or indirectly against the Principal Sellers pursuant to this
Section 9.3.
Any payment made by the Principal Sellers under this Section 9.3 shall be
payable (A) if prior to the closing of an Initial Public Offering, at the option
of such Principal Sellers, by either: (i) payment of the amount of such
indemnifiable Loss in cash or immediately available funds, or (ii) permitting
the Buyer to offset the amount of such indemnifiable Loss against the
outstanding principal balance of, and any accrued and unpaid interest on, the
Buyer's Notes held by such Principal Sellers (in inverse order of maturity) and,
to the extent the outstanding principal balance of, and any accrued and unpaid
interest on, such Buyer's Notes is less than the amount of such indemnifiable
Loss, then such deficit shall be paid by such Principal Sellers in cash or
immediately available funds; or (B) if following the closing of an Initial
Public Offering, (i) if any principal of or interest on the Buyer's Notes remain
unpaid at that time, at the option of the Principal Sellers in the manner set
forth in (i) or (ii) of clause (A) above, or (ii) if the principal of and
interest on the Buyer's Notes shall have been paid in full at that time, then at
the option of the Buyer, by either: (x) payment of the amount of such
indemnifiable Loss in cash or immediately available funds, or (y) payment of the
amount of such indemnifiable Loss in a combination of the payments described in
clause (B)(ii)(x) above and the transfer and assignment by such Principal
Sellers to the Buyer of shares of Century Common Stock, such stock to be valued
at its Fair Value as of the time of such payment and the value of such stock in
no event to exceed 50% of the aggregate indemnification payment being made.
Notwithstanding anything to the contrary in this Section 9, the Principal
Sellers shall not have any indemnification obligation with respect to (i) any
matter for which an adjustment to the Purchase Price was made pursuant to
Section 2.10 or Section 2.11 hereof and (ii) any matter specifically identified
in the Draft Closing Date Balance Sheet as a difference from the Estimated
Closing Date Balance Sheet (whether or not such matter is reflected in the
Closing Date Balance Sheet). Buyer shall provide the Principal Sellers written
notice for any claim made in respect of the indemnification provided in this
Section 9.3, whether or not arising out of a claim by a third party.
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9.4. Indemnity by Buyer. Buyer hereby agrees to indemnify, defend and hold
harmless the Principal Sellers and each of their directors, officers and
Affiliates against and in respect of all Losses (including but not limited to
any diminution in value of the Buyer Shares) resulting from (a) the inaccuracy
of any representation or warranty made by the Buyer herein, (b) any
misrepresentation, breach of warranty or nonfulfillment of any agreement or
covenant of the Buyer contained herein or in any agreement or instrument
required to be entered into in connection herewith, or (c) any misrepresentation
in or omission from any schedule, document, certificate or other instrument
required to be furnished by the Buyer hereunder; provided, however, that,
notwithstanding anything in this Agreement to the contrary, the Buyer shall be
liable under this Section 9.4 in respect of Losses only if the aggregate of such
Losses exceeds $500,000 in which case the Buyer will be liable under this
Section 9.4 for the amount of such Losses in excess of $250,000, up to a maximum
aggregate amount of $7,000,000; and provided, further, that such Losses shall be
measured in each case net of insurance proceeds if and when actually received by
the Principal Sellers, but the Principal Sellers shall retain the right in their
sole discretion to determine whether to pursue such claims by, through or
against an insurer or to bring such claims directly or indirectly against the
Buyer pursuant to this Section 9.4. Any payment in respect of an indemnifiable
Loss made by the Buyer under this Section 9.4 shall be payable 50% in cash or
immediately available funds and 50% by the Buyer issuing or transferring to the
Principal Sellers validly issued, fully paid and nonassessable shares of Century
Common Stock, such stock to be valued as of the time of such payment. The
Principal Sellers shall provide the Buyer written notice for any claim made in
respect of the indemnification provided in this Section 9.4, whether or not
arising out of a claim by a third party.
9.5. Matters Involving Third Parties.
(a) If any third party shall notify any Party (the "Indemnified
Party") with respect to any matter (including any proposed or actual Tax
audit) (a "Third Party Claim") which may give rise to a claim for
indemnification against any other Party (the "Indemnifying Party") under
this Section 9, then the Indemnified Party shall promptly, but in no event
more than 15 days following such Indemnified Party's receipt of such
notice, notify each Indemnifying Party thereof in writing (a "Claim
Notice") of such Third Party Claim and the amount or the estimated amount
thereof to the extent then feasible (which estimate shall not be
conclusive of the final amount of such Third Party Claim); provided,
however, that no delay on the part of the Indemnified Party in notifying
any Indemnifying Party shall relieve the Indemnifying Party from any
obligation hereunder unless (and then solely to the extent) the
Indemnifying Party thereby is prejudiced.
(b) The Indemnifying Party shall have 90 days from the receipt of
the Claim Notice (the "Notice Period") to notify the Indemnified Party (i)
whether or not the Indemnifying Party disputes the liability of the
Indemnifying Party to the Indemnified Party hereunder with respect to such
claim or demand and (ii) whether or not it elects to defend the
Indemnified Party against such claim or demand. All costs and expenses
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incurred by the Indemnifying Party in defending such claim or demand shall
be a liability of, and shall be paid by, the Indemnifying Party; provided,
however, that the amount of such expenses shall be a liability of the
Indemnifying Party hereunder, subject to the limitations set forth in
Sections 9.3 and 9.4 hereof. In the event that the Indemnifying Party
notifies the Indemnified Party within the Notice Period that it elects to
defend the Indemnified Party against such claim or demand and except as
hereinafter provided, the Indemnifying Party shall have the right to
defend the Indemnified Party by appropriate proceedings with counsel
reasonably satisfactory to the Indemnified Party, but subject in all cases
to consultation in good faith with the Indemnified Party. If any
Indemnified Party desires to participate in any such defense or settlement
it may do so at its sole cost and expense, but control of such defense or
settlement shall remain with the Indemnifying Party.
(c) If the Indemnifying Party assumes the defense of a Third Party
Claim, (i) it will be conclusively established for purposes of this
Agreement that such Third Party Claim constitutes an indemnifiable Loss,
subject to the limitations set forth in Sections 9.3 and 9.4 hereof; and
(ii) no compromise or settlement of such claims may be offered or effected
by the Indemnifying Party without the Indemnified Party's prior written
consent unless (A) the proposed settlement or compromise does not contain
a finding or admission of any violation of law or any violation of the
rights of any Person by the Indemnified Party, (B) the proposed settlement
or compromise imposes on the Indemnified Parties only monetary payment
obligations, (C) there would be no indemnifiable Loss incurred by any
Indemnified Party not paid or fully indemnified by the Indemnifying Party
or any imposition of a consent order, obligation, agreement, injunction or
decree which in the reasonable judgment of the Indemnified Party would
materially restrict or competitively disadvantage the future activity or
conduct of the Indemnified Party or any Subsidiary or Affiliate thereof
(D) the proposed settlement or compromise includes a full release of the
Indemnified Party and all Subsidiaries and Affiliates thereof in respect
of all indemnifiable Losses resulting therefrom, related thereto or
arising therefrom and (E) such settlement or compromise would not result
in a waiver or other release of rights or defenses of the Indemnified
Party in respect of matters not related thereto or arising therefrom.
(d) If the Indemnifying Party elects not to defend the Indemnified
Party against such claim or demand, whether by not giving the Indemnified
Party timely notice as provided above or otherwise, then the amount of any
such claim or demand, or, if the same be contested by the Indemnified
Party, that portion thereof as to which such defense is unsuccessful (and
the reasonable costs and expenses pertaining to such defense) shall be the
liability of the Indemnifying Party hereunder, subject to the limitations
set forth in Sections 9.3 and 9.4 hereof.
(e) To the extent the Indemnifying Party shall control or
participate in the defense or settlement of any Third Party Claim, the
Indemnified Party will cooperate in
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such defense, including giving to the Indemnifying Party and its counsel
any relevant powers of attorney and access to, during normal business
hours and upon prior written notice from the Indemnifying Party, the
relevant business records and other documents, and shall permit them to
consult with the employees and counsel of the Indemnified Party. The
Indemnified Party shall use commercially reasonable efforts in the defense
of all such claims.
9.6. Matters Not Involving Third Party Claims. If a claim for
indemnification by any Indemnified Party hereunder shall be asserted in respect
of any claim other than a Third Party Claim, the Indemnified Party shall deliver
a written notice of such claim to the Indemnifying Party requesting
indemnification and specifying the basis on which indemnification is sought and
the amount of the asserted Losses. In the case of such indemnification claim
involving a matter other than a Third Party Claim, the Indemnifying Party shall
have 60 days to object to such indemnification claim by delivery of a written
notice of objection to the Indemnified Party specifying in reasonable detail the
basis for such objection. Failure to timely so object shall constitute a final
and binding acceptance of such indemnification claim by the Indemnifying Party,
and the indemnification claim shall be paid in accordance with this Section 9.
Upon any final determination of the amount of an indemnification claim under
this Section 9, whether by agreement between the Indemnifying Party and the
Indemnified Party or by an arbitration award or by any other compromise,
settlement or final adjudication, the Indemnifying Party shall pay the amount of
such indemnification claim within 10 days of the date such amount is determined.
9.7. Set-Off for Final Judgment of Fraud Only. Except as set forth in this
Section 9.7, Buyer, as maker of the Buyer's Notes, expressly waives any and all
right of set-off against the Buyer's Notes, including without limitation any and
all right to apply the amount of any Losses referenced in this Section 9 against
any amounts payable on the Buyer's Notes. On or after the Set-Off Date, the
Buyer shall have the right to set-off and apply the Award Amount of any Final
Judgment of Fraud, to the extent not already paid, against the principal balance
of, and accrued and unpaid interest on, the Buyer's Notes outstanding on the
Set-Off Date; provided, however, that prior to the Set-Off Date neither the
pendency of any claim or action asserting, or that may or shall give rise to,
Buyer's right of set-off hereunder, nor the threatened or potential assertion of
such a claim or action, nor any other circumstance, shall entitle Buyer to
assert or exercise any right of set-off against, or delay or withhold any
payment of, or defend against the entry of judgment in the Principal Sellers'
favor for, any scheduled or accelerated installment of principal of or interest
on the Buyer's Notes; and provided, further, that the Buyer shall have no right
of set-off hereunder against any principal of or interest on the Buyer's Notes
if an Event of Default (as defined in the Buyer's Notes) shall have occurred
prior to the Set-Off Date. The amount of the Award Amount of any Final Judgment
of Fraud that Buyer shall have the right to set-off against the Buyer's Notes
hereunder shall be subject to the $7,000,000 (as reduced pursuant to Section
9.3) aggregate maximum amount of Losses for which indemnification is available
under Section 9.3 and the $500,000 and $250,000 thresholds for Losses under
Section 9.3.
10. Termination.
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10.1. Termination of Agreement. Certain of the Parties may terminate this
Agreement as provided below:
(a) the Parties may terminate this Agreement by mutual written
consent at any time prior to the Closing;
(b) the Buyer may terminate this Agreement by giving written notice
to the Principal Sellers at any time prior to the Closing (i) in the event
any Principal Seller has breached any material representation, warranty,
or covenant contained in this Agreement in any material respect, the Buyer
has notified the Principal Sellers of the breach, and the breach has
continued without cure for a period of 30 days after the notice of breach
or (ii) if the Closing shall not have occurred on or before August 30,
1999, by reason of the failure of any condition precedent under Section
6.1 hereof (unless the failure results primarily from the Buyer breaching
any representation, warranty, or covenant contained in this Agreement);
and
(c) the Principal Sellers or Amitek may terminate this Agreement by
giving written notice to the Buyer at any time prior to the Closing (i) in
the event the Buyer has breached any material representation, warranty, or
covenant contained in this Agreement in any material respect, the
Principal Sellers or Amitek, as the case may be, has notified the Buyer of
the breach, and the breach has continued without cure for a period of 30
days after the notice of breach or (ii) if the Closing shall not have
occurred on or before August 30, 1999, by reason of the failure of any
condition precedent under Section 6.2 hereof (unless the failure results
primarily from the Principal Sellers or Amitek breaching any
representation, warranty, or covenant contained in this Agreement).
10.2. Effect of Termination. If any Party terminates this Agreement
pursuant to Section 10. 1 above, all rights and obligations of the Parties
hereunder (except for Section 8) shall terminate without any liability of any
Party to any other Party (except for any liability of any Party then in breach).
11. Miscellaneous.
11.1. Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Closing without the prior approval of the other
Party.
11.2. No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
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11.3. Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement between the Parties and supersedes
any prior understandings, agreements, or representations by or between the
Parties, written or oral, to the extent they related in any way to the subject
matter hereof.
11.4. Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party; provided, however, that the Buyer may (i) assign any or all
of its rights and interests hereunder to one or more of its Affiliates and (ii)
designate one or more of its Affiliates to perform its obligations hereunder.
11.5. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
11.6. Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
11.7. Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given (i) upon
confirmation of facsimile, (ii) one business day following the date sent when
sent by overnight delivery and (iii) five business days following the date
mailed when mailed by registered or certified mail return receipt requested and
postage prepaid at the following address:
If to the Sellers:
At the address set opposite their names on Exhibit A-1 hereto, with copies
as specified therein.
If to Amitek:
Amitek Corporation
0000 Xxxxx Xxxxx Xxxx
Xxxx Xxxxx, XX 000000
Attention: Xx. Xxxxx Xx Park, President
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Copy, in the case of Amitek or the Sellers to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
If to the Buyer:
Century Electronics Manufacturing, Inc.
000 Xxxxx Xxxx Xxxx
Xxxxxxxxxxx, XX 00000
Attention: Xx. Xxx Xxxxxxxxx, Chief
Executive Officer and President
Copy to:
Xxxxxxxx & Xxxxxx
00 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Esq.
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Party
notice in the manner herein set forth.
11.8. Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of The Commonwealth of Massachusetts without
giving effect to any choice or conflict of law provision or rule (whether of The
Commonwealth of Massachusetts or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than The Commonwealth of
Massachusetts.
11.9. Consent to Jurisdiction. Each Party to this Agreement, by its
execution hereof, (i) hereby irrevocably submits, and agrees to cause each of
its Subsidiaries to submit, to the exclusive jurisdiction of the state courts of
the State of Delaware or the United States District Court located in the State
of Delaware for the purpose of any Action arising out of or based upon this
Agreement, the Related Agreements or relating to the subject matter hereof or
thereof, in each case whether now existing or hereafter arising, (ii) hereby
waives, and agrees to cause each of its Subsidiaries to waive, to the extent not
prohibited by applicable law, and
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agrees not to assert, and agrees not to allow any of its Subsidiaries to assert,
by way of motion, as a defense or otherwise, in any such Action, any claim that
it is not subject personally to the jurisdiction of the above-named courts, that
its property is exempt or immune from attachment or execution, that any such
Action brought in one of the above-named courts may be removed to any federal
court, should be dismissed on grounds of forum non conveniens, should be
transferred to any court other than one of the above-named courts, or should be
stayed by reason of the pendency of some other proceeding in any other court
other than one of the above-named courts, or that this Agreement, the Related
Agreements or the subject matter hereof or thereof, in each case whether now
existing or hereafter arising, may not be enforced in or by such court, or that
this Agreement, the Related Agreements or the subject matter hereof or thereof
may not be enforced in or by such court and (iii) hereby agrees not to commence
or to permit any of its Subsidiaries to commence any Action arising out of or
based upon this Agreement, the Related Agreements or relating to the subject
matter hereof or thereof, in each case whether now existing or hereafter
arising, other than before one of the above-named courts nor to make any motion
or take any other action seeking or intending to cause the transfer or removal
of any such Action to any court other than one of the above-named courts whether
on the grounds of inconvenient forum or otherwise. Each Party hereby (x)
consents to service of process in any such Action in any manner permitted by
Delaware law; (y) agrees that service of process made in accordance with clause
(x) or by registered or certified mail, return receipt requested, at its address
specified pursuant to Section 11.7, is reasonably calculated to give actual
notice of any such Action; and (z) waives and agrees not to assert (by way of
motion, as a defense, or otherwise) in any such Action any claim that service of
process made in accordance with clause (x) or (y) does not constitute good and
sufficient service of process.
11.10.Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW
THAT CANNOT BE WAIVED, EACH OF THE PARTIES HERETO HEREBY WAIVES, AND AGREES TO
CAUSE EACH OF ITS SUBSIDIARIES TO WAIVE, AND COVENANTS THAT NEITHER IT NOR ANY
OF ITS SUBSIDIARIES WILL ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE)
ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION
ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE RELATED AGREEMENTS OR THE
SUBJECT MATTER HEREOF OR THEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION 11.10 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH
PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
00.00.Xxxxxxxx. Each of the Parties hereto acknowledges that he or it has
been informed by each other Party that the provisions of Sections 11.8, 11.9 and
11.10 constitute a material inducement upon which such Party is relying and will
rely in entering into this Agreement, the Related Agreements and the
transactions contemplated hereby and thereby.
11.12.Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by each
of the Parties. No waiver by
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any Party of any default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any prior or
subsequent default, misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
11.13.Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
11.14. Expenses. Unless otherwise agreed, the Parties shall bear their own
respective expenses (including, but not limited to, all compensation and
expenses of counsel, financial advisers, consultants, actuaries and independent
accountants) incurred in connection with the preparation and execution of this
Agreement and consummation of the transactions contemplated hereby.
00.00.Xxxxxxxxxxxx. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. The inclusion of any
disclosures in any section of the Disclosure Schedule shall be deemed to be an
inclusion of such disclosures in all other sections of the Disclosure Schedule
to the extent that the failure to so include such disclosures could cause the
related representations or warranties to be inaccurate.
11.16.Incorporation of Exhibits and Schedules. The Exhibits and schedules
(including the Disclosure Schedule) identified in this Agreement are
incorporated herein by reference and made a part hereof.
11.17.Specific Performance. Each of the Parties acknowledges and agrees
that the other Parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Parties shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
Parties and the matter in addition to any other remedy to which it may be
entitled, at law or in equity.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
CENTURY ELECTRONICS MANUFACTURING, INC.
By: /s/ Xxxxxx Xxxxxxxxx
--------------------
Title: President and CEO
-----------------
AMITEK CORPORATION
By: /s/ Xxxxx Xx Park
-----------------
Title: President
---------
/s/ Xxxxx Xx Park
-----------------
Xxxxx Xx Park
/s/ Xxxx Xxxx Park
------------------
Xxxx Xxxx Park
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Exhibit A-1
Sellers
--------------------------------------------------------------------------------
Name Number of Amount of Amount of Number of
Amitek Shares Cash from Buyer's Note Buyer's
Held Prior to Buyer Shares
Merger to Receive
--------------------------------------------------------------------------------
Xxxxx Xx Park 293.351 $1,658,607 $2,117,701 624,119
--------------------------------------------------------------------------------
Xxxx Xxxx Park 510 $2,883,540 $3,681,690 1,085,049
--------------------------------------------------------------------------------
Xxxx Xxx Xxxx 196.649 $1,111,853 $1,419,609 418,380
--------------------------------------------------------------------------------
The address for Mr. and Mrs. Park for notice pursuant to Section 11.7 of the
Agreement and Plan of Merger is:
0000 XX 00xx Xxx
Xxxxxxxx, XX 00000
The address for Xx. Xxxx for notice pursuant to Section 11.7 of the Agreement
and Plan of Merger is:
Dae Hye Corp. Ltd.
Backsin Bldg., 2nd Floor
000-0 Xxxxxxx-Xxxx,
Xxxxxxx-xx, Xxxxx Xxxxx
