STOCK FOR STOCK EXCHANGE AGREEMENT
AGREEMENT, dated as of September 20, 1999, between International Test
Systems, Inc., a Delaware corporation (the "Delaware Company"), and each of the
parties whose names appear on Schedule A attached hereto and made a part hereof
("Schedule A") (hereinafter referred to individually as a "Stockholder" and
collectively as the "Stockholders").
W I T N E S S E T H:
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WHEREAS, as of the date hereof, each Stockholder owns shares of capital
stock of International Test Systems, Inc., a Texas corporation (the "Texas
Company"); and
WHEREAS, each Stockholder has agreed to exchange all of its shares of
common stock of Texas Company, as the case may be, the number of which is set
forth next to such Stockholder's name on Schedule A (the "Exchanged Stock"), for
the number of shares of par value $.001 common stock of the Delaware Company set
forth next to such Stockholder's name on Schedule A (the "Shares").
NOW, THEREFORE, in consideration of the premises and the mutual
representations and covenants herein contained and for other good and valuable
consideration, the parties hereto agree as follows:
1. Subject to the terms and conditions hereof, the Delaware Company
hereby agrees to issue to each Stockholder and each Stockholder hereby agrees to
accept, in exchange for all of such Stockholder's Exchanged Stock, the number of
Shares set forth next to such Stockholder's name on Schedule A.
2. Within five (5) business days following execution and delivery of
this Agreement: (a) each Stockholder shall deliver to the Company at the
Company's offices located at 0000 Xxxxxxx Xxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxx
00000, the certificate(s) representing all of such Stockholder's Exchanged Stock
with such stock powers and powers of attorney as shall be necessary to transfer
such shares of Exchanged Stock duly executed in blank; and (b) the Delaware
Company shall deliver to each Stockholder a certificate representing the number
of Shares set forth opposite such Stockholder's name on Schedule A.
3. Each Stockholder represents and warrants to the Delaware Company as
follows:
(a) Each Stockholder will be, immediately prior to the events referred
to in Paragraph 2 of this Agreement, the sole owner of such Stockholder's shares
of Exchanged Stock free and clear of any liens, claims, security interests, and
encumbrances of any kind or nature whatsoever and will have a complete power to
transfer and deliver the Exchanged Stock to the Delaware Company, as
contemplated in Paragraph 2 of this Agreement, free and clear of all liens,
claims, security interests, and encumbrances.
(b) The execution, delivery and performance by each Stockholder of this
Agreement are within the powers of the Stockholder, have been duly authorized
and will not constitute or result in a breach or default under, violation of, or
conflict with, any law, statute, rule, regulation, ordinance, order, judgment,
injunction, decree, or other restriction, or any contract, agreement, lease,
mortgage, deed of trust, instrument, permit or other undertaking, to which the
Stockholder is a party or by which the Stockholder is bound. The signature of
each Stockholder on this Agreement is genuine, and the signatory has legal
competence and capacity to execute the same.
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(c) Each Stockholder or such Stockholder's representative has had full
and complete access to the officers and directors of the Delaware Company and to
such business, financial, or other information concerning the Delaware Company
which such Stockholder or such Stockholder's representative deemed necessary or
appropriate to make a determination to enter into this Agreement and to effect
the exchange of stock as contemplated by this Agreement (the "Exchange").
(d) Each Stockholder represents that, except as set forth in this
Agreement, no representations or warranties have been made to the Stockholder by
the Delaware Company or any agent, employee or affiliate of the Delaware Company
and in effecting the Exchange, the Stockholder is not relying on any
information, other than that contained in this Agreement and the results of an
independent investigation by the Stockholder.
(e) Each Stockholder or such Stockholder's representative has such
knowledge and experience in financial and business matters and is capable of
utilizing the information that is available to the Stockholder or such
Stockholder's representative concerning the Delaware Company to evaluate the
merits and risks of an investment in the Delaware Company and the Stockholder is
able to bear the economic risk of such investment.
(f) Each Stockholder has been advised that the Shares being issued to
such Stockholder hereunder have not been registered under the Securities Act of
1933, as amended (the "Act"), nor has the Company agreed to so register any
Shares, and, accordingly, such shares are restricted securities, as such term is
used in the Act, and such Stockholder will not be able to sell or otherwise
dispose of the Shares, unless they are subsequently registered under the Act or
an exemption from registration thereunder is available.
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(g) The Shares acquired by each Stockholder hereunder are being
acquired for the Stockholder's sole benefit and account, for purposes of
investment only and with no present intent to sell or view to distribute the
same.
(h) Each Stockholder acknowledges that the Exchange may involve tax
consequences. Each Stockholder acknowledges that it must retain its own
professional advisors to evaluate the tax and other consequences of the
Exchange.
4. The Delaware Company represents and warrants to each Stockholder as
follows:
(a) It is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware.
(b) The Company has the corporate power and has taken all necessary
corporate action to execute, deliver and perform this Agreement and to enable it
to issue the Shares. The Shares to be issued by the Company hereunder will be
duly authorized and, upon issuance to each Stockholder pursuant to this
Agreement, are duly and validly issued and outstanding, fully paid, and
non-assessable.
(c) The execution, delivery and performance by the Delaware Company of
this Agreement will not constitute or result in a breach or default under,
violation of, or conflict with, its Certificate of Incorporation or By-laws or
any contract, agreement, lease, mortgage, deed of trust, instrument, or permit
to which it is a party or by which it is bound, or any law, statute, rule,
regulation, ordinance, order, judgment, injunction, decree, or other
restriction.
5. The representations and warranties given by each Stockholder and the
Delaware Company as set forth in Paragraphs 3 and 4 hereof shall survive the
execution hereof and the consummation of the transactions contemplated hereby.
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6. Each Stockholder covenants to the Delaware Company that such
Stockholder shall not sell, transfer, or otherwise dispose of any of the Shares
issued to such Stockholder hereunder (i) without registration thereof under the
Act (unless, in the opinion of counsel to the Company, an exemption from such
registration is available), or (ii) in violation of any law.
7. Each Stockholder consents: (a) that each certificate representing
the Shares to be issued to such Stockholder hereunder will be impressed with a
legend indicating that they are not registered under the Act and reciting that
any transfer is restricted; and (b) that stop transfer instructions in respect
of the Shares will be issued to any transfer agent, transfer clerk, or other
agent, at any time acting for the Delaware Company.
8. This Agreement contains the entire understanding of the parties with
respect to the subject matter hereof, and the provisions hereof may not be
altered, amended, waived, terminated, or discharged in any way whatsoever except
by subsequent written agreement executed by the party charged therewith. A
waiver by any of the parties of any terms or conditions of this Agreement, or of
any breach thereof, shall not be deemed a waiver of such term or condition for
the future or of any other term or condition hereof, or of any subsequent breach
hereof.
9. The parties hereto, will, upon the reasonable request of another
party, execute and deliver any additional documents necessary or desirable to
complete the transactions described herein.
10. Subject to any restrictions on transfer, this Agreement shall inure
to the benefit of the parties hereto and their successors and assigns.
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11. The parties hereto agree that it is their intention that the
Exchange as contemplated by this Agreement fall within the scope of Section 351
of the Internal Revenue Code of 1986, as amended.
12. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13. Notwithstanding the requirements set forth in Paragraph 2 of this
Agreement, this Agreement shall be effective as of the date hereof and the books
and records of the Delaware Company shall reflect these transactions as of this
date.
14. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
INTERNATIONAL TEST SYSTEMS. INC.
By:____________________
Name:
Title:
STOCKHOLDERS:
________________________
Xxxxxxx X. Birmingham
________________________
Xx. Xx Xxxxxxxx
________________________
Xxxxxx Xxxxxxx
________________________
Xxxxxxx Xxxxxxx
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SCHEDULE A
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Number of
Number of Shares Shares
Stockholders of the Texas Company of the Company
Owned Before the to be Issued in
Stock Exchange the Stock Exchange
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H. Xxxxxx Xxxxxx 550,400 10,800
Xxxxxxx X. Birmingham 100,000 5,000
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Dr. Ed Laniers 10,000 500
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Xxxxxx Xxxxxxx 4,000 400
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300
Xxxxxxx Xxxxxxx 205,600
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Total 870,000 17,000
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