AGREEMENT AND PLAN OF MERGER
BY AND AMONG
CENTENNIAL TECHNOLOGIES, INC.,
STP ACQUISITION CORPORATION,
SMART TRAVELER PLAZAS, INC.,
AND
THE SHAREHOLDERS WHOSE SIGNATURES APPEAR
AT THE FOOT OF THIS AGREEMENT
EFFECTIVE AS OF DECEMBER 18, 1996
TABLE OF CONTENTS
Reference Page #
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1. The Merger..................................................................... 1
2. Conversion of Shares .......................................................... 2
3. Matters Related to the Centennial Shares....................................... 4
4. Closing........................................................................ 5
5 Escrow Agreement............................................................... 6
6. Representations and Warranties of STP and the Warranting
Shareholders................................................................ 6
7. Representations and Warranties of the Shareholders ............................ 18
8. Representations and Warranties of Centennial and SAC .......................... 19
9. No Announcements............................................................... 20
10. Covenants of STP............................................................... 21
11. Covenants of Centennial and SAC................................................ 23
12. Conditions to Obligations of Centennial and SAC ............................... 23
13. Conditions to Obligations of STP and the Shareholders ......................... 25
14. Provisions for Indemnification................................................. 25
15. Opinion of Counsel for STP..................................................... 27
16. Opinion of Counsel for Centennial and SAC...................................... 27
17. Disclosure of Information...................................................... 27
18. Employment Agreements.......................................................... 29
19. Survival of Representations and Warranties..................................... 29
20. Further Assurances............................................................. 29
21. Notices........................................................................ 29
22. Broker......................................................................... 30
23. Expenses....................................................................... 31
24. Entire Agreement............................................................... 31
25. Binding Effect................................................................. 31
26. Headings....................................................................... 31
27. Law Governing.................................................................. 32
28. Counterparts................................................................... 32
TABLE OF SCHEDULES
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No. Title
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5 Escrow Agreement
5(a) Warranting Shareholders
6(a) STP Qualifications
6(b) STP Third Party Consents
6(c)(i) Federal Income Tax Returns
6(c)(ii) Financial Statements
6(e) Miscellaneous Disclosures
6(f) Security Interests, Liens, Encumbrances,
etc.
6(g) Existing Leases, Contracts, Franchises
and Commitments, and Agreements as to the Same
6(h) Miscellaneous Lists
6(i) Litigation, Claims, Proceedings, etc.
6(m) Stock Transactions
6(n) Agreements and Arrangements with
Affiliates
6(q) Equipment; Real Estate
6(r) Permits, Licenses, Authorizations
6(s) Insurance Policies
6(t) Shareholder Interests in Competitors
6(u) Intellectual Property
6(z) Environmental Matters
12(g) Rate of Exchange of STP Shares for Centennial Shares
15 Form of Opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
16 Form of Opinion of ▇'▇▇▇▇▇▇, Broude & ▇▇▇▇▇▇▇
18 Form of Employment Agreements
22 Brokers
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, effective as of the 18th day of December,
1996 (the "Agreement"), by and among Centennial Technologies, Inc., a Delaware
corporation ("Centennial"); STP Acquisition Corporation, a Delaware corporation
and wholly-owned subsidiary of Centennial ("SAC"); Smart Traveler Plazas, Inc.,
a Florida corporation ("STP"); and the shareholders of STP whose signatures
appear at the foot of this Agreement (the "Shareholders"). STP and SAC are
sometimes referred to together herein as the "Constituent Corporations."
WITNESSETH:
WHEREAS, Centennial owns directly one hundred percent (100%) of the
issued and outstanding stock of SAC; and
WHEREAS, the Board of Directors of Centennial and the Board of
Directors of STP have each approved the merger of SAC with and into STP, with
STP being the surviving corporation, upon the terms and conditions set forth
herein.
WHEREAS, STP, Centennial and SAC desire to enter into and carry out the
merger in accordance with the terms hereof and the provisions of the Florida
Business Corporation Act and the Delaware General Corporation Law.
NOW, THEREFORE, intending to be legally bound hereby, and in
consideration of the mutual covenants herein contained and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. THE MERGER
(a) Subject to the terms, provisions and conditions of this Agreement
and upon the basis of the representations, warranties and covenants made herein,
at the Closing (as defined below) STP and SAC shall cause Articles of Merger to
be filed with the Secretary of State of Florida and a Certificate of Merger to
be filed with the Secretary of State of Delaware, each in a form agreed to by
STP and Centennial.
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(b) The effective date of the merger of SAC with and into STP (the
"Merger") shall be the date (the "Effective Date") upon and the time (the
"Effective Time") at which the Articles of Merger are filed in the Department of
State of Florida and the Certificate of Merger is filed with the Secretary of
State of Delaware, whichever occurs later. At the Effective Time, SAC will be
merged in and into STP, with STP as the surviving corporation (the "Surviving
Corporation"), and the separate existence of SAC shall cease. The Surviving
Corporation shall assume and be liable for all the liabilities and obligations
of each of the Constituent Corporations in accordance with the Florida Business
Corporation Act and the Delaware General Corporation Law.
(c) At the Effective Time and without any further action on the part of
the Constituent Corporations, the Articles of Incorporation and the Bylaws of
the Surviving Corporation shall be amended to read in their entirety as the
Certificate of Incorporation and Bylaws of SAC, and all the property, real and
mixed, of each of the Constituent Corporations shall vest in the Surviving
Corporation without further act or deed.
2. CONVERSION OF SHARES
(a) At the Effective Time on the Effective Date, the outstanding shares
of capital stock of STP shall be canceled or converted, as the case may be, by
virtue of the Merger and without any further action on the part of any holder
thereof as follows: (i) each share of Common Stock, $.01 par value per share, of
STP (the "STP Common Stock") shall be converted into 0.0585417 shares of Common
Stock, $.01 par value per share, of Centennial ("Centennial Shares"); and (ii)
each share of STP Common Stock issued and held in the treasury of STP shall be
canceled and retired; and
(b) At the Effective Time, each share of Common Stock, $.01 par value
per share, of SAC issued and outstanding immediately prior thereto shall be
converted into one (1) share of Common Stock, fully paid and nonassessable, of
the Surviving Corporation, which shall be owned by Centennial.
(c) No fractional Centennial Shares shall be issued in connection with
the Merger. The number of Centennial Shares to be received by holders of STP
Common Stock shall be rounded up to the next whole number of Centennial Shares
if the fractional number of Centennial Shares to be received ends in a fraction
that equals five tenths (0.5) of a share or greater, and shall be rounded down
to the next whole number of Centennial Shares if the fractional number of
Centennial Shares to be received ends in a fraction that equals less than five
tenths (0.5) of a share.
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(d) As soon as reasonably practicable after the Effective Time, the
Surviving Corporation shall mail, or cause to be mailed, to each holder of
record of STP Common Stock (i) notice that the Merger has been consummated and
instructions for effecting the surrender of their certificates that immediately
prior to the Effective Time represented outstanding shares of STP Common Stock
("STP Certificates") in exchange for certificates representing shares of
Centennial Shares and (ii) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the STP Certificates
shall pass, only upon delivery of the STP Certificates to the Surviving
Corporation and shall be in such form and have such other provisions as the
Surviving Corporation may reasonably specify). Upon the surrender of an STP
Certificate for cancellation to the Surviving Corporation, together with a
properly completed and duly executed letter of transmittal and such other
documents as may be reasonably requested, the holder of such STP Certificate
shall be entitled to receive, and the Surviving Corporation shall promptly
deliver, in exchange therefor a certificate representing that number of whole
Centennial Shares which such holder has the right to receive in respect of the
STP Certificate surrendered pursuant to the provisions of this Section 2 (after
taking into account all shares of STP Common Stock then held by such holder),
and the STP Certificate so surrendered shall forthwith be canceled. In the event
of a transfer of ownership of STP Common Stock which is not registered in the
transfer records of STP, a certificate representing the proper number of shares
of Centennial Shares may be issued to a transferee if the STP Certificate
representing such STP Common Stock is presented to the Surviving Corporation,
accompanied by all documents required to evidence and effect such transfer and
by evidence that any applicable stock transfer taxes have been paid.
(e) The parties intend to adopt this Agreement as a tax-free plan of
reorganization and to consummate the Merger as a merger in accordance with the
provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Code"). Centennial Shares issued in the Merger shall be issued solely in
exchange for the STP Common Stock. No consideration that could constitute "other
property" within the meaning of Section 356(b) of the Code is being paid by
Centennial for the STP Common Stock in the Merger. The parties shall not take a
position on any tax returns inconsistent with this subparagraph (e). Neither STP
nor Centennial shall intentionally take or cause to be taken action which would
disqualify the Merger as a reorganization within the meaning of Section 368(a)
of the Code.
(f) STP agrees that if, at any time after the Effective Time,
Centennial considers or is advised that any further deeds, assignments or
assurances are reasonably necessary or desirable to be obtained from STP or its
officers or directors, to consummate the Merger or to carry out the purposes of
this Agreement at or after the Effective Time, then the parties and their
respective officers and directors shall execute and deliver all such proper
deeds,
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assignments and assurances and do all other things necessary or desirable to
consummate the Merger and to carry out the purposes of this Agreement, in the
name of STP or otherwise.
3. MATTERS RELATED TO THE CENTENNIAL SHARES
(a) (i) The Shareholders understand that the Centennial Shares they
will receive under this Agreement are characterized as "restricted securities"
under the federal securities laws inasmuch as they are being acquired in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act of 1933, as amended (the "Act") only in certain limited
circumstances. In this regard, the Shareholders represent that they are familiar
with Rule 144 promulgated under the Act, as such Rule is presently in effect,
and the resale limitations imposed thereby and by the Act.
(ii) It is understood that the certificates evidencing the
Centennial Shares to be transferred to the Shareholders under this Agreement may
bear one or all of the following legends or their substantial equivalent:
(A) "THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED UNLESS A REGISTRATION STATEMENT IS IN EFFECT WITH RESPECT TO SUCH
SECURITIES UNDER THE ACT OR THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL THAT
SUCH REGISTRATION IS NOT REQUIRED."
(B) Any legend required by state securities laws.
(b) (i) Centennial will prepare and file with the Securities and
Exchange Commission (the "Commission"), within ninety (90) days of the Closing
Date, a Registration Statement on Form S-3 (or such other Form as counsel to
Centennial shall deem appropriate) covering the Centennial Shares and such other
documents, including a prospectus, as may be necessary in the opinion of counsel
for Centennial in order to comply with the provisions of the Securities Act of
1933, as amended (the "Act"), and to maintain the effectiveness of such
registration statement for a period of not less than eighteen (18) months. The
expenses of such registration shall be borne by Centennial, with the exception
of underwriting or selling discounts and commissions and any fees and
disbursements of counsel to the Shareholders.
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(ii) Centennial will take all commercially reasonable action
which may be required in qualifying the Centennial Shares for offering and sale
under the securities or blue sky laws of such states as reasonably are requested
by the Shareholders, provided that Centennial shall not be obligated to register
the shares in any state or execute or file any general consent to service of
process or to qualify as a foreign corporation to do business under the laws of
any such jurisdiction.
(iii) Centennial's obligation under this Agreement shall be
conditioned upon a timely receipt by the Centennial in writing of information as
Centennial may reasonably require from each of the Shareholders, or any
underwriter for any of them, in connection with the preparation of a
registration statement filed pursuant to this Agreement, including any
post-effective amendment to such registration statement, and the sale of the
Centennial Shares by the Shareholders.
(iv) Centennial shall furnish each Shareholder desiring to
sell Centennial Shares such number of prospectuses as shall reasonably be
requested.
4. CLOSING
The Closing shall take place at the offices of ▇'▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, in Waltham, Massachusetts, on the last to occur of (a) the date on
which the shareholders of STP approve the Merger and (b) the date on which all
other conditions to the obligations of each party hereunder to effect the Merger
are satisfied or waived, but in no case not later than thirty (30) days after
the date hereof (the "Termination Date"). The date of the Closing is hereafter
referred to as the "Closing Date". All proceedings to be taken and all documents
to be executed and delivered by all parties at the Closing shall be deemed to
have been taken and executed simultaneously, and no proceedings shall be deemed
to have been taken nor any documents executed or delivered until all have been
taken, executed and delivered, including the execution and delivery of the
Agreements and Plans of Merger by and among (1) Centennial, ▇▇▇▇▇.▇▇▇
Acquisition Corporation, ▇▇▇▇▇.▇▇▇, Inc. ("▇▇▇▇▇.▇▇▇") and the shareholders of
▇▇▇▇▇.▇▇▇ (the "▇▇▇▇▇.▇▇▇ Agreement") and (2) Centennial, ITP Acquisition
Corporation, Intelligent Truck Project, Inc. ("ITP") and the shareholders of ITP
(the "ITP Agreement").
5. ESCROW AGREEMENT
(a) Centennial shall retain ten percent (10%) of the Centennial Shares
to be paid to each of the Shareholders set forth on Schedule 5(a) hereto (the
"Warranting Shareholders") (the "Escrow Amount"), into escrow with ▇'▇▇▇▇▇▇,
Broude & ▇▇▇▇▇▇▇ (the "Escrow Agent") pursuant to the terms of the escrow
agreement in substantially the form annexed hereto as Schedule 5 (the "Escrow
Agreement"). The Escrow Amount shall be
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available to meet any indemnification claims made by Centennial or the Surviving
Corporation pursuant to Section 14 hereof during the one (1) year period
following the Closing Date, all in accordance with the provisions of the Escrow
Agreement.
(b) On the first anniversary of the Closing Date, the Escrow Agent
shall, pursuant to the provisions of the Escrow Agreement, release to the
Warranting Shareholders any portion of the Escrow Amount remaining in the escrow
account.
(c) All of the Escrow Agent's fees shall be paid by Centennial.
6. REPRESENTATIONS AND WARRANTIES OF STP AND THE
WARRANTING SHAREHOLDERS
STP and the Warranting Shareholders represent and warrant to Centennial
and SAC, upon which representations and warranties Centennial and SAC rely, and
which represen tations and warranties shall survive the Closing, as provided in
Section 19 of this Agreement, notwithstanding any investigation of the affairs
of STP by Centennial or SAC, as follows:
(a) STP is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida, and has full power and
authority to own its properties and carry on its business as it is now being
conducted and as presently proposed to be conducted. Except as set forth on
Schedule 6(a), STP is not qualified, licensed or registered to do business in
any other state, nor by the location and nature of its business and activities
and the character of the properties owned by it, is it required to be so
qualified, licensed or registered. Its Certificate of Incorporation and all
amendments thereto to date, its Bylaws as amended to date, and its Minutes and
Stock Book, all of which have been delivered to Centennial for review prior to
execution of this Agreement, are full, complete and correct. The said Minutes
accurately and fully reflect all meetings, actions, proceedings and other
matters properly includable therein. Except as reflected in said Minutes, there
are no minutes of meetings or consents in lieu of meetings of the Board of
Directors or Shareholders of STP.
(b) STP has full power and authority (corporate and other) to execute
and deliver this Agreement and consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of STP, and no other corporate action or proceedings on the
part of STP are necessary to consummate the transactions so contemplated. This
Agreement has been duly and validly executed and delivered by STP and
constitutes its valid and legally binding obligation, enforceable against STP in
accordance with its terms, subject only as to enforcement to general equitable
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principles and to bankruptcy, insolvency, reorganization, moratorium, or similar
laws of general application affecting the rights and remedies of creditors.
Except as set forth on Schedule 6(b), the execution and delivery of this
Agreement by STP, the consummation by STP of the transactions contemplated
hereby, and compliance by STP with the terms and provisions hereof will not
violate any provision of the Certificate of Incorporation or Bylaws of STP in
existence as of the Closing Date, will not conflict with or result in a breach,
default, or violation of any term of any indebtedness, mortgage, indenture,
contract, agree ment, lease, license, permit, judgment, decree, order, or
injunction by which STP or any of its properties are or may be bound, or of any
applicable statute, ordinance or regulation, and will not result in the creation
or imposition of any lien upon any of the properties of STP or upon the STP
Shares. Except for such consents as are obtained prior to the Effective Time, no
material consent, approval, order, or authorization of, or registration,
declaration, or filing with, any governmental authority or third party is
required in connection with the execution and delivery of this Agreement by STP
or the consummation by STP of the transactions contemplated hereby.
(c) STP has delivered to SAC (i) copies of STP's federal income tax
returns as more fully identified on Schedule 6(c)(i) attached hereto and made
part hereof, for the periods set forth therein; and (ii) certain unaudited
financial statements more fully identified on Schedule 6(c)(ii) (the "Trial
Balance").
(d) As of November 27, 1996, STP had no liabilities, commitments or
obligations of any kind whatsoever (whether accrued, absolute, contingent or
otherwise, and whether due or to become due) which were not reflected or
reserved against in its Trial Balance or in the Notes thereto of said date, or
which are not fully covered by policies of insurance validly in force, or
disclosed herein or in an exhibit hereto.
(e) Since November 27, 1996, except as described in Schedule 6(e)
attached hereto and made a part hereof, there has not been (and as of the
Closing Date, there will not have been) (i) any change in STP's business,
properties, assets, financial condition, prospects, management or operations,
other than changes in the ordinary course of business, none of which has been
materially adverse; (ii) any damage, destruction or loss, whether or not covered
by insurance, materially and adversely affecting STP's properties, business,
assets or financial position; (iii) any declaration or setting aside of any
dividend, or any direct or indirect redemption, purchase, or other acquisition
of any of STP's shares of capital stock; (iv) any increase in the compensation
payable or to become payable by STP to any of its offi cers, employees, or
agents, or any bonus payment or arrangement made to or with any of them; (v) any
unresolved labor controversy; (vi) any increase in any employee pension or
retirement plans or other employee benefit plans; (vii) any waiver of any rights
of material
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value to STP or cancellation or compromise of any debt; (viii) any transfer or
grant of any rights in STP's patents, trademarks, trade names or copyrights;
(ix) any material modification, change or termination of any existing license,
lease, contract or other document referred to in this Agreement or any of the
Schedules hereto, or failure to renew or extend any material contract, except in
the ordinary course of business or as contemplated by this Agreement; (x) any
individual capital expenditure in excess of $10,000, or aggregate capital
expenditures in excess of $50,000, or any commitment therefor; (xi) any change
in any amounts due or to become due from STP to any Shareholder or any affiliate
thereof; or (xii) any occurrence or circumstance which may be expected to result
in a material adverse change in or affecting the business or financial affairs
of STP.
(f) STP has good and marketable title to all of its properties and
assets, real, personal and mixed, including those reflected in its Trial Balance
of November 27, 1996, free and clear of any security interests, mortgages,
pledges, liens, encumbrances, restrictions, or charges, except for (i) those
described on Schedule 6(f) attached hereto and made part hereof, (ii) liens
shown on such Trial Balance as securing specified liabilities set forth therein,
with respect to which no material default exists (except for defaults cured
prior to the declaration of default thereon), and except for minor imperfections
of title and encumbrances, if any, which are not substantial in character,
amount, or extent, do not detract from the value of the properties subject
thereto, or interfere with the use of the properties for the purposes for which
they are presently used, or otherwise impair STP's operations, and have arisen
only in the ordinary course of business.
(g) Other than as set forth on Schedule 6(g) attached hereto and made
part hereof, STP presently has no existing leases, contracts, franchises or
commitments, or agreements to enter into any of the same, written or oral,
extending beyond the date of Closing. Copies of all written contracts or
commitments, and a memorandum describing each oral contract or commitment listed
on Schedule 6(g) or any other Schedule hereto, together with a copy or
description as aforesaid, of each contract which requires the payment by STP of
a sum in excess of $10,000 in the aggregate, have been delivered to Centennial,
and are true, complete and correct in all respects. STP has complied in all
material respects with all of the provisions of each such contract or
commitment, and of all other contracts and commitments to which it is a party,
and is not in default under any of them, except as described on Schedule 6(g).
Each such contract or commitment will be available for the use and benefit of
the Surviving Corporation following the Closing Date, with no material adverse
effect resulting from the transactions contemplated by this Agreement.
(h) There is attached to this Agreement, made part hereof and marked
Schedule 6(h), true and complete lists, as of the date of this Agreement,
setting forth:
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(i) The names and residence addresses of all directors
and officers of STP;
(ii) The names of all persons, if any, holding powers of
attorney from STP, and a summary statement of the terms thereof;
(iii) A list setting forth the name and address of each
bank or other institution in which STP has established an account for
investment, deposit, checking, savings or borrowing, or through which credit is
extended, a brief description thereof, and the names and titles of authorized
signers and limits, if any;
(iv) A list of all employees of STP together with their
Social Security numbers; and
(v) A list of all employee benefits granted by STP and
the names of those employees who have received such benefits.
At the request of Centennial, STP shall furnish to Centennial further
information relating to the matters set forth in the above described lists, and
copies of any items included therein, as well as any and all other matters
relating to the operations of STP.
(i) Except for those matters disclosed on Schedule 6(i) attached hereto
and made a part hereof, there is no action, suit, litigation, claim, order,
injunction, levy, attachment, administrative or governmental or
quasi-governmental investigation or proceeding pending or, to the knowledge of
STP, threatened against or relating to STP, its business, properties or
prospects or relating to this Agreement or the transactions contemplated hereby.
STP is not a party to, or the subject of, any action, suit, litigation, claim,
administrative proceeding or governmental or quasi-governmental investigation
relating to STP, its operations, properties or business, or material to the
transactions contemplated hereunder; nor, to the knowledge of STP, is any such
action, suit, litigation, proceeding or investigation threatened or
contemplated.
(j) None of the representations and warranties made by STP or the
Warranting Shareholders contained in this Agreement, including all Schedules,
nor in any statement, document, certificate or memorandum furnished or to be
furnished by the STP pursuant hereto, or in connection with the transactions
contemplated hereby, contains or will contain any untrue statement of material
fact; and none of such representations, warranties,
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statements, documents, certificates or memoranda omits or will omit to state a
material fact necessary in order to make the statements contained herein or
therein not misleading.
(k) (i) STP has or will have duly filed all federal, state, local,
foreign and other tax returns, reports and declarations of estimated tax
required to be filed by it for all periods up to and including the Closing Date
(all such returns, reports and declarations being accurate and complete in all
respects) and has paid or established adequate reserves for the payments of all
federal, state, local or foreign taxes, assessments, deficiencies, levies,
imports, duties, license fees, registration fees, withholdings, or other similar
governmental charges, and any interest, penalties or additions to tax imposed
thereon (collectively the "Taxes") due or claimed to be due by any taxing
authority. The amounts set up as reserves for Taxes on the Trial Balance of STP
as of November 27, 1996 are sufficient for the payment of all unpaid Taxes for
the period ended November 27, 1996, and for any year or period prior thereto,
and for which STP may be liable in its own right or as a transferee of the
assets of or successor to any corporation, person, association, partnership,
joint venture or other entity. STP will pay, or will establish adequate reserves
for the payment for all Taxes payable for the period from November 27, 1996, up
to and including the Closing Date.
(ii) STP will not have any liability for Taxes in excess of
the amount paid or reserved for any periods prior to the Closing Date. All
amounts required to be withheld or collected by STP for income taxes, social
security taxes, unemployment insurance and other employee withholding taxes have
been so withheld or collected, and either paid to the respective governmental
authority or set aside for such purpose or accrued and reserved against and
entered upon the books of STP.
(iii) The federal income tax returns of STP have not been
audited by the Internal Revenue Service or any other taxing authority. There is
no action, suit, proceeding, audit, investigation or claim pending or, to the
knowledge of STP threatened, in respect of any Taxes for which STP may become
liable, nor has any deficiency or claim for any Taxes been proposed or asserted.
No waiver of any statute of limitations with respect to any taxable year has
been executed by STP; there is no agreement, waiver or consent providing for an
extension of time with respect to the assessment of any Taxes against STP, and
no power of attorney granted by STP with respect to any tax matters is currently
in force.
(l) STP has paid (and, as to any of the following which are payable
after the date of Closing and determinable as of November 27, 1996, STP has
properly reserved against in accordance with generally accepted accounting
principles) all sales and use taxes, social security taxes, unemployment taxes,
ad valorem taxes, property taxes, excise taxes, duties and imposts, and all
other taxes of every kind, character or description imposed by any
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governmental or quasi-governmental authority required to be paid by STP for all
periods prior to the Closing Date. There are no outstanding notices of any
deficiencies, adjustments, changes in assessments or increases in tax rates with
respect to any such taxes. STP has duly filed or caused to be filed all reports
and returns relating to or covering all such taxes and other charges, which are
due or required to be filed at or prior to the date hereof.
(m) STP has a total of 2,551,001 shares of Common Stock issued and
outstanding of a total of 5,000,000 shares of Common Stock authorized. All
issued and outstanding shares of Common Stock have been duly authorized and
validly issued and are fully paid and nonassessable, with no personal liability
attaching to the ownership thereof, and no shares of Common Stock were issued in
violation of any preemptive rights. There are no other shares of capital stock
of STP of any class authorized, issued or outstanding. Except as set forth on
Schedule 6(m), there are no outstanding stock options, warrants, calls,
agreements, or statutory or nonstatutory preemptive rights, or any other rights
whatsoever, to purchase or otherwise obtain or demand the issuance of any STP
Shares of Common Stock, in favor of or held by any persons or entities
whatsoever. STP has no treasury stock. Except as set forth on Schedule 6(m),
since January 1, 1994, there have been no issuances, transfers, repurchases or
other transactions involving the Common Stock or any other securities of STP.
Schedule 6(m) also sets forth a complete list of the shareholders of STP. Except
as set forth on Schedule 6(m), neither STP nor any predecessor has ever
maintained or participated in any stock option or stock bonus plan.
(n) Except as set forth on Schedule 6(n), STP is not, and on the
Closing Date will not be, indebted to the Shareholders or to any officer,
director or shareholder of STP, or to any of their respective spouses and/or
children, in any amount whatsoever. STP is not primarily or secondarily liable
in respect of any obligation of another person or party. STP is not a party to
any agreement or arrangement whereby it engages in a transaction of any kind
with any affiliate except on terms and conditions no less favorable to STP than
would be customary for such transactions between unaffiliated parties or upon
terms and conditions on which similar transactions with others could fairly be
expected to be entered into. All agreements and arrangements with any affiliate
are fairly and accurately described in Sche dule 6(n). For purposes of this
Section 6(n), "affiliate" shall mean any officer, director or shareholder of STP
or any person or entity controlled by such officers, directors or shareholders.
(o) STP has no subsidiaries, nor any investments in, nor ownership of
securities of, any business, enterprise, entity or organization, public or
private, except certificates of deposit, commercial paper and similar money
equivalents, all as described on its Trial Balance of November 27, 1996.
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(p) Neither STP nor any predecessor has ever maintained, participated
in or been obligated to contribute to, or has ever had any liability with
respect to, any Employee Pension Benefit Plan ("Plans") as such term is defined
in Section 3 of the Employment Retirement Income Security Act of 1974, as
amended ("ERISA"), any Employee Welfare Benefit Plan as such term is defined in
Section 3 of ERISA, any deferred compensation plan or any other similar employee
benefit plan. Neither STP nor any predecessor has ever participated in, or been
obligated to contribute to, any Multi Employer Plan as such term is defined in
Section 3(37) of ERISA as amended by the Multi Employer Pension Plan Amendments
Act of 1980. STP is not, nor has it ever been, a member of a "controlled group
of corporations" or an "affiliated service group", or a member under "common
control" of any member, as defined in Sections 414(b), (c) and (m) of the
Internal Revenue Code (the "Code").
(q) STP has good title to, or valid leases or licenses for, insurable
at regular rates, all of its property and assets that are necessary for the
conduct of its business; and its equipment and real estate (whether owned or
leased) is in good order, condition and repair, and is in material conformity
(with respect to the leased property, to ITP's knowledge only) with all
applicable federal, state and local laws, regulations and ordinances (including
but not limited to environmental zoning), except as set forth in Schedule 6(q).
A list of all such equipment and real estate is contained on Schedule 6(q)
attached hereto and made a part hereof. STP has complete and accurate written or
computer copies of the source code for all software which is under development
by or licensed to or by STP.
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(r) STP has all material permits, licenses and governmental
authorizations required for the ownership of its business as it is currently
being operated, all of which will be available for the use and benefit of the
Surviving Corporation unaffected by the transac tions contemplated by this
Agreement. All of STP's said permits, licenses and governmental authorizations
relating to the operations of STP are currently in force, and are listed on
Schedule 6(r) attached hereto and made a part hereof.
(s) Schedule 6(s) attached hereto and made a part hereof contains a
complete and correct list of all policies of insurance of every kind and nature
covering STP, including without limitation, policies of life, fire, theft,
employee fidelity and other casualty and liability insurance, indicating the
insurer, the policy number, the type of coverage, the amount of coverage and the
expiration date of each policy. Such policies are and will be at Closing in full
force and effect, and will be unaffected by the transactions contemplated by
this Agreement. Complete and correct copies of each such policy have been made
available to Centennial prior to the execution of this Agreement.
(t) Except as set forth on Schedule 6(t), to STP's knowledge, no
officer, director or shareholder of STP has a direct or indirect interest of any
kind in any business entity which is competitive with or related to the business
of STP. The provisions of this Section 6(t) shall not be construed to prevent or
preclude investments representing less than one percent (1%) of the ownership,
directly or indirectly, by an individual in a company or companies whose stock
is listed on a national securities exchange or actively traded on the
over-the-counter market.
(u) Schedule 6(u) hereto correctly sets forth a true and complete list
of all patents, trademarks, trade names, service marks, copyrights, licenses and
similar rights, and any applications in respect thereof, and inventions,
processes, trade secrets and formulae used by or useful to STP in whole or in
part for the conduct of the business (collectively, the "Intellectual
Property"), all of which are owned by STP free and clear of any and all
licenses, liens, claims, security interests, charges or encumbrances whatsoever,
except as set forth in said Schedule 6(u), and no licenses which are in effect
as of the date of this Agreement have been granted by STP to any third parties.
STP agrees to execute any and all documents, if any, necessary and sufficient to
transfer all its right, title and interest in and to any Intellectual Property
to Centennial. All such patents, trademarks, trade names, copyrights and similar
rights are valid and in good standing and do not infringe upon the rights of
third parties. The operation of the business of STP does not infringe upon any
registered patent, trademark, trade name, copyright, license or other right,
invention, process, formula or trade secret, of any person. The present conduct
of STP's business is not materially dependent
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upon any one or more patents, trademarks, trade names, service marks, copyrights
or licenses.
(v) Neither STP, nor any director, officer, or shareholder of STP, in
connection with the activities of STP, has at any time, either directly or
indirectly, made illegal gifts, gratuities, or payments in any form, whether in
cash, goods or services, to any persons or entities whatsoever, in payment for,
or intended to encourage, or which resulted in or may have resulted in or had
the effect of, obtaining or encouraging persons or entities to become, or to
continue to be, customers of STP, or obtaining, encouraging or extending any
contractual relationship, written or oral, for any of the same; nor, to STP's
knowledge, have any of the foregoing or any employee of STP while acting in
their capacity as an employee, (i) entered into any arrangement, written or
oral, under or pursuant to which bribes, kickbacks, rebates, payoffs or other
forms of illegal or improper payments have been or will be made, provided for or
suffered, either directly or indirectly through agents, brokers, distributors,
dealers or other intermediaries; (ii) made any illegal contribution of monies,
services, or property to any political party, candidate or elected official for
any purpose; (iii) made any contributions, payments or gifts to or for the
private use of any governmental official, employee or agent where either the
payment or the purpose of such contribution, payment or gift is illegal under
the laws of the jurisdiction in which made; (iv) established or maintained any
unrecorded fund or asset for any purpose or made any false or artificial entries
on its books; or (v) made any payments to any person with the intention or
understanding that any part of such payment was to be used for any purpose other
than that described in the documents supporting the payment.
(w) STP is not:
(i) in material default in the performance, observance or
fulfillment of any obligation, covenant or condition contained in any evidence
of indebtedness or any agreement or instrument under or pursuant to which any
evidence of indebtedness has been issued, or any other agreement or instrument
to which it is a party or by which it or any of its properties are bound (each
such evidence of indebtedness, agreement or instrument being hereinafter
sometimes called a "Contractual Obligation"), and no event has occurred which
constitutes, or but for any requirement of giving of notice or passage of time
or both would constitute, an event of default by STP under any Contractual
Obligation; or
(ii) in breach or violation of, or in material default under,
any of the terms, conditions or provisions of any law, or of any rule,
regulation, order, writ, injunction or decree of any court or government,
domestic or foreign, or any commission, bureau or administrative agency thereof,
or is in breach or violation of or default under any of the
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provisions of the charter or Bylaws of STP (each such term, condition and
provision being hereinafter sometimes called a "Requirement of Law"), except for
such defaults, breaches or violations of Contractual Obligations or Requirements
of Law as do not and will not have, individually or in the aggregate, any
material adverse effect on the business, operations, properties, prospects or
condition, financial and other, or results of operation of STP.
(x) None of the borrowings of STP were incurred or used for the purpose
of purchasing or carrying any security which at the date of its acquisition was,
or any security which now is, margin stock or other margin security within the
meaning of Regulations G, T or X of the Board of Governors of the Federal
Reserve System, 12 C.F.R., parts 207, 220 and 224, as now in effect ("Margin
Rules"), or a "security that is publicly held," within the meaning of such
Regulation T, and STP does not own any margin stock or other margin security, or
a "security that is publicly held" or have any present intention of acquiring
any margin stock or other margin security, or any "security that is publicly
held".
(y) Neither this Agreement nor any transaction contemplated hereby, is
or will be in violation of any export limitations established by the United
States Congress or the Executive Branch of the United States government.
(z) Except as set forth in Schedule 6(z) annexed hereto:
(i) To STP's knowledge, there are not present in, on or under
the real estate which STP owns, leases or at which it conducts any of its
operations (the "Real Estate") any Hazardous Substances (as hereinafter defined)
in such form or quantities as to create any liability or obligation for either
STP, SAC or Centennial under any Environmental Laws (as hereinafter defined).
"Environmental Laws" means all federal, state, local, foreign or other statutes,
laws, regulations, ordinances, rules, orders, consent decrees, consent
judgments, judicial or administrative decisions, agreements or directives,
whether now existing or as hereafter promulgated, issued or enacted relating to:
(A) pollution or protection of the environment, including natural resources; (B)
exposure of any individual, including employees of STP to any Hazardous
Substance or other products, materials or chemicals; (C) protection of human
health or welfare from the effects of products, by-products, wastes, emissions,
discharges or releases of chemical or other substances from industrial or
commercial activities; (D) regulation of the manufacture, use or introduction
into commerce of substances, including without limitation, use of or rights with
respect to their manufacture, formulation, packaging, labeling, distribution,
transportation, handling, storage and disposal; and (E) regulation generally of
the use of the environment, including, without limitation, ambient air, surface
water, ground water, and surface or subsurface strata, in each case, as amended
and as now or hereafter in effect. For purposes of this definition, the term
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"Environmental Laws" shall include, without limitation, the following statutes:
(1) the Clean Air Act, as amended, 42 U.S.C. ▇▇.▇▇. 7401 et seq.; (2) the
Federal Water Pollution Control Act, as amended, 33 U.S.C. ▇▇.▇▇. 1251 et seq,;
(3) the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C.
▇▇.▇▇. 6901 et seq. ("RCRA"); (4) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. ▇▇.▇▇. 9601 et
seq., as amended by the Superfund Amendments and Reauthorization Act of 1986
("CERCLA"); (5) the Toxic Substances Control Act, as amended, 15 U.S.C. ▇▇.▇▇.
2601 et seq.; (6) the Occupational Safety and Health Act, as amended, 29 U.S.C.
ss.651; (7) the Emergency Planning and Community Right-to-Know Act of 1986, 42
U.S.C. ▇▇.▇▇. 801 et seq.; (8) the Mine Safety and Health Act of 1977, as
amended, 30 U.S.C. ▇▇.▇▇. 801 et seq.; (9) the Safe Drinking Water Act, 42
U.S.C. ▇▇.▇▇. 3008 et seq.; and (10) all comparable United States, state, local,
and foreign laws, statutes, rules, regulations, judgments, orders, decrees,
stipulations or charges which have jurisdiction over STP, the Shareholders, any
of their affiliates, or any of the Real Estate or assets owned or leased by STP.
"Hazardous Substance" means: (A) any "hazardous substance" as defined in CERCLA,
42 U.S.C. ss. 9601(14); (B) any "pollutant or contaminant" as defined in CERCLA,
42 U.S.C. ss.9601(33); (C) any "hazardous waste" as defined in RCRA, 42 U.S.C.
ss. 6903(5); (D) any asbestos, dioxins, polychlorinated biphenyls, uranium,
radioactive isotopes and other nuclear by-products, toxic substances or
petroleum products, by-products, or derivatives; (E) any substance, whether
liquid, solid or gas that presents a significant risk or an adverse or harmful
effect upon human health, upon animals or upon air, water, land, natural
resources or any other aspects of the environment; and (F) any other substance
classified as hazardous, dangerous or otherwise regulated under any
Environmental Law.
(ii) To STP's knowledge, no Hazardous Substances have ever
been stored, buried, spilled, leaked, discharged, emitted or released in, on or
under the Real Estate in such a way as to create any liability under applicable
common law or under any Environmental Law.
(iii) The Real Estate is not being used and, to STP's
knowledge, never has been used in connection with the business of manufacturing,
storing, transporting, handling, disposing or treating Hazardous Substances.
(iv) STP's business has in the past always been conducted in
accordance with all Environmental Laws; and all licenses, permits and other
authorizations required pursuant to any Environmental Law and necessary for the
lawful operation of the Businesses at the Real Estate, all of which are listed
on Schedule 6(z) are in STP's possession and all such Permits are valid and in
full force and effect, no violations thereof have been experienced, noted or
recorded, and no proceeding is pending or threatened to revoke or limit
-16-
any of them. No permit required under any Environmental Law is scheduled to
expire prior to December 31, 1997 and, to STP's best knowledge, there is no
threat that any such permit will be withdrawn, terminated, limited or materially
changed.
(v) There are not now, nor, to STP's knowledge, have there
ever been in the past, any underground or aboveground storage tanks or other
containment facilities of any kind on the Real Estate which contain or ever did
contain any Hazardous Substances.
(vi) To STP's knowledge, the Real Estate is not and never has
been listed on the National Priorities List, the Comprehensive Environmental
Response, Compensation and Liability Information System or any similar federal,
state or local list, schedule, log, inventory or database.
(vii) STP has delivered to Centennial accurate copies of all
reports, authorizations, permits, licenses, disclosures and other documents
describing or relating in any way to the Real Estate or any other assets which
describe or mention the status of any of the Real Estate or any of the assets
with respect to any Environmental Law.
(viii) STP has not transported or arranged for the
transportation (directly or indirectly) of any Hazardous Substance to any
location which is listed or proposed for listing under CERCLA or any other
similar Environmental Law, or which is the subject of federal, state, local or
foreign enforcement actions or other investigation which may lead to claims for
clean-up costs, remedial work, damages to natural resources or for personal
injury claims.
(ix) STP has maintained all environmental and operating
documents and records substantially in the manner and for the time periods
required by any Environmental Laws, and there have been no environmental
investigations, administrative orders, consent orders, studies, audits, tests,
reviews or other analyses conducted by or which are in the possession of STP in
relation to the Real Estate, and/or the assets which have not been delivered to
Centennial prior to the date hereof.
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(aa) Wherever used in this Agreement with respect to any
representation, warranty, covenant or agreement of the Warranting Shareholders
or STP, the terms "knowledge", "known" or any similar variation thereof shall be
deemed to include:
(i) all matters actually known to such party with respect
to the subject matter of such representation, warranty, covenant or agreement;
and
(ii) all matters which should have been known to such
party with respect to the subject matter of such representation, warranty,
covenant or agreement if such party was acting in a manner in which a reasonably
prudent person would act in similar circumstances with respect to the subject
matter of such representation, warranty, covenant or agreement.
7. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
The Shareholders represent and warrant to Centennial and SAC, upon
which representations and warranties Centennial and SAC rely, and which
representations and warranties shall survive the Closing as provided in Section
19 of this Agreement, notwithstanding any investigation of the affairs of STP by
Centennial or SAC, as follows:
(a) Each of the Shareholders has full power and authority (corporate
and other) to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed by each of the Shareholders and constitutes the valid and legally
binding obligation of each of them, enforceable against each of them in
accordance with its terms, subject only as to enforceability to general
equitable principles and to bankruptcy, insolvency, reorganization, moratorium,
or similar laws of general application affecting the rights and remedies of
creditors. Except for such consents as are obtained prior to the Effective Time,
no material consent, approval, order or authorization of, or registration,
declaration or filing with, any governmental authority or third party is
required in connection with the execution and delivery of this Agreement by the
Shareholders or the consummation by the Shareholders of the transactions
contemplated hereby.
(b) Each Shareholder who executes this Agreement thereby evidences his
agreement to vote in favor of the Merger at the shareholders' meeting to be held
prior to the Closing of this Agreement.
(c) Each Shareholder acknowledges receipt of the Centennial Filings as
described in Section 8(e) below. Each Shareholder represents that he (i) is an
"accredited investor" as
-18-
defined in Rule 501 of Regulation D under the Securities Act of 1933, as
amended; or (ii) either individually or together with his representatives and
advisors, has such knowledge and experience in financial and business matters
that he is capable of evaluating the merits and risks of acquisition of the
Centennial Shares and of making an informed investment decision with respect
thereto, and understands all risks of holding the Centennial Shares for an
indefinite period of time.
8. REPRESENTATIONS AND WARRANTIES OF CENTENNIAL AND SAC
Centennial and SAC represent and warrant, jointly and severally, to the
Shareholders, upon which representations and warranties the Shareholders rely,
and which representations and warranties shall survive Closing, as follows:
(a) Each of Centennial and SAC is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and has
full corporate power to enter into this Agreement and to consummate the
transactions contemplated hereby.
(b) The execution and delivery of this Agreement and the consummation
of the transactions contemplated and performance of its respective obligations
hereunder have been duly authorized by each of Centennial and SAC. This
Agreement has been duly executed and delivered by each of Centennial and SAC and
constitutes the valid, legally binding and enforceable obligation of each of
Centennial and SAC in accordance with its terms, subject as to enforceability to
general equitable principles and to bankruptcy, insolvency, reor ganization,
moratorium or similar laws of general application affecting the rights and
remedies of creditors.
(c) The execution and delivery of this Agreement and the consummation
by each of Centennial and SAC of the transactions contemplated by this Agreement
and the performance of their respective obligations hereunder will not:
(i) Result in any breach of, or constitute a default under the
Certificate of Incorporation or Bylaws of any of Centennial or SAC, or any
instrument, obligation, contract or agreement to which any of Centennial or SAC
is a party or by which either is bound; or
(ii) Violate any existing statute, order, writ, injunction or
decree of any court, administrative agency or governmental body.
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(d) Neither Centennial nor SAC is a party to, or the subject of, any
action, suit, litigation, administrative proceeding or governmental or
quasi-governmental investigation material to the transactions contemplated
hereunder, nor, to the knowledge of Centennial or SAC, is any such action, suit,
litigation, proceeding or investigation threatened.
(e) Centennial has delivered to the Shareholders its Annual Report on
Form 10-K for its fiscal year ended June 30, 1996, its Annual Report to
Shareholders containing the consolidated financial statements of Centennial and
its subsidiaries for the fiscal year ended June 30, 1996, accompanied by the
reports thereon of Coopers & ▇▇▇▇▇▇▇ LLP, independent public accountants, its
proxy statement for the Annual Meeting of Shareholders of Centennial, dated
October 3, 1996, its Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 1996, its Current Report on Form 8-K, dated July 24, 1996, as
amended by Form 8-K/A Amendment No. 1, dated September 23, 1996, its Current
Report on Form 8-K, dated October 17, 1996, and its Current Report on Form 8-K,
dated November 20, 1996 (collectively, the "Centennial Filings"). Since June 30,
1996, and except as specifically contemplated by this Agreement or as disclosed
or reflected in the Centennial Filings as filed with the Securities and Exchange
Commission prior to November 27, 1996 there has not been any material adverse
change in the business, financial condition or prospects of Centennial. The Form
10-K of Centennial for the fiscal year ended June 30, 1996 does not contain any
untrue statement of a material fact or any omission to state a fact necessary to
make any statement of fact contained therein not misleading in any material
respect.
(f) All Centennial Shares to be issued in accordance with this
Agreement will be, upon issuance, duly authorized, validly issued, fully paid
and non-assessable with no liability on the part of the holders thereof, except
as set forth in the Escrow Agreement described in Section 5 hereof.
9. NO ANNOUNCEMENTS
Unless approved in advance by Centennial or SAC, neither the
Shareholders nor STP shall issue any press release or written statement for
general circulation relating to the transactions contemplated hereby, except as
required by law in the opinion of its counsel.
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10. COVENANTS OF STP
From the date herein to the Closing Date, STP covenants and agrees:
(a) To conduct diligently its operations in the ordinary course of its
business and in material compliance with applicable law; and not to change any
of its operational, marketing, pricing or purchasing policies.
(b) To maintain, and to cause to be maintained, all insurance in force
in the name of STP at the time of the signing of this Agreement on all of its
assets and its business opera tions, a descriptive list of which is contained in
Schedule 6(s).
(c) To preserve its operations intact, and to maintain good business
relations with its clients, customers, suppliers and others having business or
professional dealings with it.
(d) To pay when due (or within any extension of time permitted by
applicable law) all taxes, charges, salaries, costs and expenses incurred by it
in its said activities, accruing through Closing and payable prior to the
Closing Date.
(e) Not to enter into any contract, commitment, sales commitment,
transaction or transactions, other than those in the ordinary course of its
business, involving or requiring the payment of a total of more than $10,000 as
to each individual contract or $100,000 in the aggregate, without the prior
written approval of Centennial in each case.
(f) Not to increase the salary, compensation or fringe benefits of any
of its employees, without the prior written approval of Centennial.
(g) Not to make any change in its Articles of Organization or Bylaws,
or its authorized or issued shares; nor declare, pay or make any dividend or
other distribution or payment in respect of its corporate shares nor redeem or
repurchase any such shares; nor issue or sell any shares of its Common Stock.
(h) Not to make any change affecting the bank accounts, credit,
borrowing or safe deposit arrangements referred to in this Agreement; nor sell,
mortgage, encumber or dispose of any of its property except as permitted under
the provisions of this Agreement or sales to customers in the ordinary course of
STP's business.
(i) To maintain its books and records in accordance with the accounting
methods historically used by STP, such that said books and records will fairly
and correctly reflect its income, expenses, assets and liabilities.
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(j) Not to incur any obligation or liability (absolute or contingent)
except current obligations and liabilities incurred in the ordinary course of
business and as permitted pursuant to this Agreement.
(k) Not to make any investments other than in certificates of deposit
in federally insured banks, or U.S. Treasury instruments.
(l) Not to take any action which would cause any of the representations
and warranties made by it herein or by any Shareholder in connection herewith,
not to be true and correct in all respects on and as of the Closing Date with
the same force and effect as if such representations and warranties had been
made on and as of the Closing Date.
(m) During the period from the date of this Agreement to the Closing
Date, to give Centennial and SAC and their representatives reasonable access to
its offices, plants, records, files and books of account for the purpose of
becoming familiar with all matters relating to STP's business, properties and
assets; provided, however, that such process shall be con ducted in a manner
that does not unreasonably interfere with the normal operations, and customer
and employee relationships of STP. Management of STP shall assist Centennial and
SAC in such process, and shall cause the legal counsel, accountants, agents,
employees and other representatives of STP to be available to Centennial and SAC
for such purposes. During such process, Centennial and SAC shall have the right
to make copies of such records, files and other materials as they may deem
advisable. If for any reason, the Closing under this Agreement is not
consummated, Centennial, SAC and their representatives shall return promptly to
STP and keep confidential all copies made by Centennial and SAC and their
representatives of material belonging to STP.
(n) To maintain itself as a corporation in good standing under the laws
of the State of Florida, and prepare and file all necessary tax returns and
reports required by federal, state or municipal authorities, including tax
returns and reports for any tax liabilities, and maintain complete books and
records of all transactions.
(o) To use its diligent efforts to effect the consummation of the
transactions contemplated hereunder.
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11. COVENANTS OF CENTENNIAL AND SAC
From the date herein to the Closing Date, Centennial and SAC covenant
and agree:
(a) Not to take any action which would cause any of the representations
and warranties made by Centennial and SAC herein not to be true and correct in
all respects on and as of the Closing Date with the same force and effect as if
such representations and warranties had been made on and as of the Closing Date.
(b) To use their diligent efforts to effect the consummation of the
transactions contemplated hereunder.
12. CONDITIONS TO OBLIGATIONS OF CENTENNIAL AND SAC
The obligations of Centennial and SAC hereunder are subject to the
fulfillment of each of the following conditions on or prior to the Closing Date,
performance of any or all of which may be waived in writing by Centennial and
SAC:
(a) STP shall take all action necessary in accordance with applicable
law and its Articles of Organization and Bylaws to obtain the approval, either
at a meeting called for such purpose or by written consent, of its shareholders
for the purpose of approving the Merger as soon as is reasonably practicable
hereafter. No more than eight percent (8%) of the Shareholders shall have
asserted appraisal rights under the applicable provisions of the Florida
Business Corporation Act. Centennial shall have received an opinion of counsel,
satisfactory in form and substance to it, that all applicable provisions of the
Florida Business Corporation Act with respect to mergers and rights of appraisal
have been satisfied and that the Merger is effective under the provisions of the
Florida Business Corporation Act.
(b) The representations and warranties of STP and the Warranting
Shareholders contained in this Agreement shall be true and correct in all
material respects at the Closing Date as though such representations and
warranties were made at such time. STP shall have performed and complied with
all agreements, covenants and conditions required by this Agreement to be
performed and complied with by it prior to or at the Closing Date. STP shall
have delivered certified articles of incorporation of STP issued by the
Secretary of the State of Florida dated as of a recent date; shall have
delivered Good Standing Certificates from the Secretary of each state in which
STP is qualified to do business as a foreign corporation; and shall have
delivered a Certificate of STP's President on behalf of STP
-23-
certifying to the truth of such representations and warranties in all respects
and such performance or compliance.
(c) There shall not have been any material damage, destruction or loss
adversely affecting the assets of STP or its financial condition.
(d) No action or proceeding shall have been instituted or threatened,
or claim or demand made, against the Shareholders, STP, Centennial or SAC, or
any of them before any court or other governmental body, seeking to restrain or
prohibit, or to obtain damages with respect to, the consummation of the
transactions contemplated hereby, or which might materially affect the business
of STP, which in the reasonable opinion of Centennial or SAC makes it
inadvisable to consummate such transactions.
(e) All proceedings to be taken and all documents to be executed and
delivered by the Shareholders and STP in connection with the consummation of the
transactions contemplated hereby and by the ▇▇▇▇▇.▇▇▇ Agreement and the ITP
Agreement shall be reasonably satisfactory in form and substance to Centennial
and its counsel.
(f) The Employment Agreements described in Section 18 hereof shall have
been executed and any prior agreements between STP and those persons identified
in Section 18 hereof shall have been terminated or performed in their entirety.
(g) Centennial shall have received assurances satisfactory to it from
its independent auditors that the transaction involving the business combination
of Centennial, SAC and STP shall be accounted for as a "pooling-of-interests."
(h) Each holder of outstanding options to purchase shares of Common
Stock shall have agreed in writing, in form and substance satisfactory to
Centennial and its counsel, to exchange such options for options to purchase
shares of Centennial Shares on the same terms as provided for in the STP
options, for a number of shares and at an exercise price derived from the rate
of exchange of STP Shares for Centennial Shares as set forth on Schedule 12(h).
(i) STP and each stockholder and employee of STP shall have executed
documents satisfactory to Centennial conveying to Centennial all right, title
and interest in and to the Intellectual Property.
(j) The Warranting Shareholders shall have delivered the resignations
of all of the directors and officers of STP, effective as of the Closing.
13. CONDITIONS TO OBLIGATIONS OF STP AND THE SHAREHOLDERS
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The obligations of STP and the Shareholders hereunder are subject to
the fulfillment on or prior to the Closing Date of each of the following
conditions, performance of any or all of which may be waived in writing by STP:
(a) Centennial's and SAC's representations and warranties contained in
this Agreement shall be true and correct in all material respects at Closing as
though such representations and warranties were made at such time. Centennial
and SAC shall have performed or complied with all agreements, covenants and
conditions required by this Agreement to be performed or complied with by
Centennial or SAC prior to or at Closing. Centennial and SAC shall have
delivered a Certificate of their respective Presidents certi fying to the truth
of such representations and such performance or compliance.
(b) No action or proceeding shall have been instituted or threatened or
claim or demand made against STP, Centennial or SAC or any of them before any
court or other governmental body, seeking to restrain or prohibit or to obtain
substantial damages with respect to the consummation of the transactions
contemplated hereby.
(c) All proceedings to be taken and all documents to be executed and
delivered by Centennial or SAC in connection with the consummation of the
transactions contemplated hereby and by the ▇▇▇▇▇.▇▇▇ Agreement and the ITP
Agreement shall be reasonably satis factory in form and substance to STP and its
counsel.
14. PROVISIONS FOR INDEMNIFICATION
(a) The Warranting Shareholders, jointly and severally, agree to defend
and indemnify Centennial and SAC and save and hold each of them harmless from,
against, for and in respect of any and all damages, losses, obligations,
liabilities, claims, costs and expenses (collectively, "Liabilities") incident
to any suit, action, investigation, claim or proceeding, suffered, sustained,
incurred or required to be paid by Centennial, SAC, or the Surviving Corporation
by reason of:
(i) Any material misrepresentation or breach of warranty made
by STP, the Warranting Shareholders or the Shareholders in or pursuant to this
Agreement or any Schedule hereto or in any certificate or document delivered
pursuant to this Agreement; or
(ii) Any failure by STP, the Warranting Shareholders or the
Shareholders to observe or perform their respective covenants and agreements set
forth herein, which are to be performed on or prior to the Closing Date; or
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(iii) Any claim, debt, liability or obligation or any alleged
claim, debt, liability or obligation of STP to any party, incurred before the
Closing Date hereunder or arising from any matter or thing occurring before the
Closing Date hereunder, and which does not appear as a liability on STP's Trial
Balance of November 27, 1996, except for (x) liabilities expressly disclosed in
this Agreement or any Schedule hereto (unless otherwise indicated herein or
therein) and (y) liabilities (other than Taxes) incurred between the date of
this Agreement and the Closing Date, the incurrence of which does not violate
the provi sions of this Agreement; or
(iv) Any Taxes of STP, for all taxable periods up to and
including the Closing Date in excess of the accrual established for such
liabilities for such periods on the November 27, 1996 Balance Sheet, and all
actions, proceedings, demands, assessments, judgments, costs and expenses,
including reasonable attorneys' fees, incident to the foregoing.
(b) Centennial, SAC or the Surviving Corporation, if claiming a right
to indem nification under the provisions of this Section 14 (hereinafter, the
"Indemnitee"), shall give prompt written notice to the Warranting Shareholders
of each claim for indemnification here under, specifying the amount and nature
of the claim, and of any matter which, in the opinion of the claiming party, is
likely to give rise to an indemnification claim. The party against whom such
indemnity is sought to be recovered (hereinafter, the "Indemnitor") shall have
the right to undertake the defense of any such matter at Indemnitor's sole
expense and through legal counsel acceptable to Indemnitee, provided that
Indemnitor proceeds in good faith, expeditiously and diligently. Indemnitee
shall, at its option and expense, have the right to participate in any defense
undertaken by Indemnitor, with legal counsel of its own selection. No settlement
or compromise may be made by Indemnitor without the prior written consent of
Indemnitee unless (y) prior to such settlement or compromise Indemnitor
acknowledges in writing Indemnitor's obligation to pay in full the amount of the
settlement or compromise and all associated expenses and (z) Indemnitee is
furnished with security reasonably satisfactory to Indemnitee that Indemnitor
will in fact pay such amount and expenses.
(c) Indemnitor shall pay to Indemnitee the amount of claims that are
agreed upon between Indemnitor and Indemnitee for indemnification within fifteen
(15) days after the agreement with respect thereto (the "due date"). Any amounts
not paid by the Indemnitee when due under this Section 14(c) shall bear interest
from the due date thereof until the date paid at the lower of the prime rate of
interest as announced Nations Bank, N.A. as its prime rate plus two percent (2%)
per annum or the highest rate allowed by law.
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(d) The indemnification provided in this Section 14 shall survive the
Closing for a period of one (1) year.
(e) The Warranting Shareholders shall have no liability for
indemnification pursuant to this Section 14 until the total of all Liabilities
equals or exceeds $200,000, and then for the aggregate amount of such
Liabilities.
(f) Any remedies of any party claiming indemnification hereunder shall
be cumulative and not exclusive. Specifically, but not by way of limitation, the
parties make no attempt to limit any claims based on common law fraud or other
similar remedies.
15. OPINION OF COUNSEL FOR STP
STP shall deliver to Centennial and SAC at Closing an opinion of
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, P.C., Counsel to STP, dated as of the date of Closing,
addressed to Centennial and SAC substantially in the form of Exhibit 15 hereto.
16. OPINION OF COUNSEL FOR CENTENNIAL AND SAC
SAC shall deliver to the Shareholders at Closing an opinion of
▇'▇▇▇▇▇▇, Broude & ▇▇▇▇▇▇▇, Counsel for Centennial and SAC, dated as of the
Closing Date, addressed to the Shareholders, substantially in the form of
Exhibit 16 hereto.
17. DISCLOSURE OF INFORMATION
(a) STP recognizes and acknowledges that (i) all plans, systems,
methods, designs, procedures, books and records relating to its operations,
personnel and practices (whether instituted or commenced prior or subsequent to
the date herein), (ii) all other records, documents and information concerning
its business activities, practices, and procedures, and any name or style under
which it shall have been operated prior or shall operate subsequent hereto, and
(iii) any logo or other descriptive or illustrative form therein, as they may
have existed from time to time, constitute and will constitute valuable, special
and unique assets of STP's business. STP therefore covenants and agrees that it
will not, prior to the Effective Date, disclose any part therein which is
confidential, or use or permit to be used any such name, style, logo or form, to
or by any person, firm, corporation, association or other entity, for any reason
or purpose whatsoever, except in the ordinary course of STP's business or as
required by this Agreement.
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(b) STP acknowledges that the restrictions contained in Section 17(a),
in view of the nature of the business in which it is engaged, are reasonable and
necessary in order to protect its legitimate interests, and that any violation
therein would result in irreparable injuries to STP. STP therefore acknowledges
that, in the event of a breach or threatened breach of the provisions of this
paragraph by STP, Centennial and SAC shall be entitled to obtain from any court
of competent jurisdiction, preliminary and permanent injunctive relief
restraining STP from disclosing any such records, documents or information or
using or permitting to be used any such name, style, logo or form, or from being
employed by or otherwise rendering any services to any person, firm,
corporation, association or other entity to whom such records, documents or
information, in whole or in part, have been disclosed or are threatened to be
disclosed.
(c) Centennial and SAC recognize and acknowledge that during the course
of negotiations in connection with this Agreement, and in preparation for
Closing hereunder, STP will have disclosed to Centennial and SAC certain plans,
systems, methods, designs, procedures, books and records relating to its
operations, personnel and practices, as well as records, documents and
information concerning its business activities, practices, and procedures, all
of which constitute and will constitute valuable, special and unique assets of
its business. Centennial and SAC therefore covenant and agree that if the
Closing is not consummated hereunder, all copies of such information will be
returned to STP and neither Centennial nor SAC will ever at any time thereafter
use or disclose any part therein to any person, firm, corporation, association
or other entity, for any reason or purpose whatsoever, unless such information
was known to Centennial prior to such negotiations, is subsequently made public
by STP or any third party, is subsequently disclosed to Centennial or SAC by any
third party having a right to do so, or is required to be disclosed by law.
(d) Centennial and SAC acknowledge that the restrictions contained in
subparagraph 17(c), in view of the nature of the business in which STP is
engaged, are reasonable and necessary in order to protect the legitimate
interests of STP, and that any violation therein would result in irreparable
injuries to STP. Centennial and SAC therefore acknowledge that, in the event of
a breach or threatened breach of the provisions of this paragraph by Centennial
or SAC, STP shall be entitled to obtain from any court of competent
jurisdiction, preliminary and permanent injunctive relief restraining Centennial
and/or SAC as the case may be from using or disclosing any such records,
documents or information to any person, firm, corporation, association or other
entity whatsoever.
(e) Nothing contained in this paragraph shall be construed as
prohibiting Centennial, SAC or STP from pursuing any other remedies available to
either of them for any such breach or threatened breach of the provisions of
this Section 17, including recovery
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of damages and an equitable accounting of all earnings, profits and other
benefits arising from such violation.
18. EMPLOYMENT AGREEMENTS
The Surviving Corporation agrees to enter into employment agreements
(the "Employment Agreements") with those employees designated on, and in
substantially the form annexed hereto as, Schedule 18. Any prior agreements
between STP and such indivi duals shall be terminated or performed in their
entirety prior to the Closing Date.
19. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The parties hereto agree that the representations and warranties
contained in this Agreement and the Schedules hereto, and in each certificate,
document or instrument delivered in connection herewith, shall survive the
execution and delivery of this Agreement and the Closing hereunder, for two (2)
years following the Closing Date, regardless of any investigation made by any of
the parties hereto.
20. FURTHER ASSURANCES
At or subsequent to the Closing, the Shareholders, STP, Centennial and
SAC shall each, at the request of any of the others, furnish, execute and
deliver such documents, instruments, opinions of counsel, certificates, notices
and other such instruments and further assurances as counsel for the requesting
party shall reasonably require as necessary or desirable to effect complete
consummation of this Agreement and any of the transactions contemplated hereby,
or in connection with the preparation and filing of reports required or
requested by governmental agencies, stock exchanges or other regulatory bodies.
21. NOTICES
All notices which are or may be required to be given by any party to
any other party in connection with this Agreement and the transactions
contemplated hereby shall be in writing, and shall be deemed to have been
properly given if and when delivered personally or sent by certified mail,
return receipt requested, postage prepaid, addressed as follows:
To STP: Smart Traveler Plazas, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, #▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President
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To the Shareholders: At their respective addresses
set forth at the foot of this Agreement.
To Centennial: Centennial Technologies, Inc.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esquire
To SAC: STP Acquisition Corporation
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esquire
In each case, with ▇'▇▇▇▇▇▇, Broude & ▇▇▇▇▇▇▇
copies to each of ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
the other parties Suite 2300
to this Agreement ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
and to: Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, P.C.
20th Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Esquire
or to such place or places or persons as any party may from time to time
designate by written notice to the other parties, given in the manner aforesaid.
22. BROKER
Except as set forth on Schedule 22 hereto, each party warrants and
represents that no broker's or finder's fee, commission or other payment is due
or payable from or by STP, the Shareholders, Centennial or SAC or any of them;
nor has any such other fee or commission been earned by any third party on
behalf of any of the foregoing in connection with the nego tiation and execution
of this Agreement or in any other manner affecting or involving the negotiation
or execution of this Agreement, or the consummation of any transaction contem
plated hereby. Each party agrees to indemnify and save the others harmless from
and against any and all claims or demands for broker's or finder's fees or
commissions from any person or persons whatsoever based on any arrangement made
by such party.
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23. EXPENSES
Whether or not the transactions contemplated hereby are consummated,
each party hereto shall pay its own expenses, it being understood that STP shall
pay the fees of ▇▇▇▇▇▇▇▇ Ingersoll, PC, related to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, PC's
representation of STP in connection with the negotiation, authorization,
preparation, execution and performance of this Agreement, including, without
limitation, all fees and expenses of investment banking firms, agents,
representatives, counsel and accountants.
24. ENTIRE AGREEMENT
This Agreement and the Schedules hereto set forth the entire Agreement
and understanding of the parties, and there are no other prior or
contemporaneous written or oral agreements, undertakings, promises, warranties
or covenants not specifically referred to or contained herein or attached
hereto. This Agreement may be amended, modified or terminated only by a written
instrument signed by the parties hereto.
25. BINDING EFFECT
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto, their and each of their respective heirs, executors,
administrators, successors and permitted assigns, but may not be assigned by any
party without the prior written consent of the other parties; except that
Centennial or SAC may assign its rights hereunder to any affiliate of Centennial
or SAC, provided that Centennial shall remain obligated to the Shareholders with
respect to its obligations under this Agreement.
26. HEADINGS
The headings of the various paragraphs of this Agreement are inserted
merely for the purpose of convenience and do not expressly or by implication
limit, define or extend the specific terms or text of the paragraph so
designated.
27. LAW GOVERNING
This Agreement shall be governed in all respects, whether as to
validity, construction, capacity, performance or otherwise, by the laws of the
Commonwealth of Massachusetts in which it has been executed and in which it has
a situs. If any provision of this Agreement shall be held invalid by a court
with jurisdiction over the parties to this Agreement, then and
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in that event such provision shall be deleted from the Agreement, which shall
then be construed to give effect to the remaining provisions thereof. The
Warranting Shareholders and STP each consent to the jurisdiction of the courts
of the Commonwealth of Massachusetts, and any federal court located therein, and
to the appropriateness of the venue of such courts, in connection with any
dispute which may arise pursuant to this Agreement or is related to the
transactions contemplated hereby.
28. COUNTERPARTS
This Agreement may be executed in one or more counterparts, all of
which taken together shall be considered one Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers, all on the day and year
first above written.
CENTENNIAL TECHNOLOGIES, INC.
By:
----------------------------
Attest:
---------------------------
STP ACQUISITION CORPORATION
By:
----------------------------
Attest:
---------------------------
SMART TRAVELER PLAZAS, INC.
By:
----------------------------
Attest:
---------------------------
THE SHAREHOLDERS OF STP
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
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