EXHIBIT 2.1
SHARE EXCHANGE AGREEMENT
BY AND AMONG ▇▇▇▇▇▇ MINES, LTD.,
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
WARP SOLUTIONS, INC., ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇ AND THE PERSONS
IDENTIFIED ON SCHEDULE A HERETO.
Dated as of May 16, 2002
ARTICLE I DEFINITIONS................................................................................1
ARTICLE II TRANSACTIONS; TERMS OF MERGER; MANNER OF CONVERTING SHARES.................................5
2.1 Exchange of Securities........................................................................5
2.2 Consideration..................................................................................5
2.3 Exchange of Shares.............................................................................5
2.4 Legending of Securities........................................................................5
2.5 Fractional Shares..............................................................................6
2.6 Time and Place of Closing......................................................................6
2.7 Directors and Officers.........................................................................6
2.8 Tax Consequences...............................................................................6
ARTICLE III REPRESENTATIONS AND WARRANTIES OF AMI AND AMI INSIDERS.....................................6
3.1 Organization; Standing and Power...............................................................6
3.2 Authorization; Enforceability..................................................................7
3.3 Investment Representations.....................................................................7
3.4 No Violation or Conflict.......................................................................7
3.5 Consents of Governmental Authorities and Others................................................7
3.6 Conduct of Business............................................................................8
3.7 Litigation.....................................................................................8
3.8 Brokers........................................................................................8
3.9 Compliance.....................................................................................9
3.10 Charter, Bylaws and Corporate Records..........................................................9
3.11 Subsidiaries and Investments...................................................................9
3.12 Capitalization.................................................................................9
3.13 Rights, Warrants, Options.....................................................................10
3.14 Commission Filings and Financial Statements...................................................10
3.15 Absence of Undisclosed Liabilities............................................................10
3.16 Real Property.................................................................................10
3.17 List of Accounts and Proxies..................................................................11
3.18 Personnel.....................................................................................11
3.19 Employment Agreements and Employee Benefit Plans..............................................11
3.20 Tax Matters...................................................................................12
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3.21 Material Agreements...........................................................................12
3.22 Guaranties....................................................................................13
3.23 Environmental Matters.........................................................................13
3.24 Intellectual Property Rights..................................................................14
3.25 Licenses......................................................................................14
3.26 Absence of Certain Business Practices.........................................................14
3.27 Disclosure....................................................................................14
3.28 Shares Owned by AMI Insiders..................................................................15
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF WARP AND THE SELLERS....................................15
4.1 Organization..................................................................................15
4.2 Authorization; Enforceability.................................................................15
4.3 No Violation or Conflict......................................................................16
4.4 Consents of Governmental Authorities and Others...............................................16
4.5 Conduct of Business...........................................................................16
4.6 Litigation....................................................................................17
4.7 Brokers.......................................................................................17
4.8 Compliance....................................................................................17
4.9 Charter, Bylaws and Corporate Records.........................................................17
4.10 Subsidiaries and Investments..................................................................17
4.11 Capitalization................................................................................17
4.12 Rights, Warrants, Options.....................................................................18
4.13 Financial Statements..........................................................................18
4.14 Absence of Undisclosed Liabilities............................................................18
4.15 Real Property.................................................................................18
4.16 Licenses......................................................................................18
4.17 Intellectual Property Rights..................................................................19
4.18 Employment Agreements and Employee Benefit Plans..............................................19
4.19 Tax Matters...................................................................................20
4.20 Material Agreements...........................................................................20
4.21 Guaranties....................................................................................21
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4.22 Accounts and Notes Receivable.................................................................21
4.23 Absence of Certain Business Practices.........................................................21
4.24 Disclosure....................................................................................22
4.25 Title to Securities...........................................................................22
4.26 Authority.....................................................................................22
4.27 Knowledge and Experience......................................................................22
4.28 Accredited Investor; Financial Means..........................................................22
4.29 Opportunity to Question; Adequate Information.................................................23
4.30 Risks Relating to Exchange....................................................................23
4.31 Investment Intent.............................................................................23
4.32 Resale of the Securities......................................................................23
ARTICLE V ADDITIONAL AGREEMENTS.....................................................................23
5.1 Survival of the Representations and Warranties................................................23
5.2 Investigation.................................................................................24
5.3 Indemnification...............................................................................24
5.4 Indemnity Procedure...........................................................................25
5.5 General Release...............................................................................26
ARTICLE VI CLOSING; DELIVERIES; CONDITIONS PRECEDENT.................................................26
6.1 Closing; Effective Date.......................................................................26
6.2 Deliveries....................................................................................26
6.3 Conditions Precedent to the Obligations of WARP...............................................27
6.4 Conditions Precedent to the Obligations of AMI................................................29
6.5 Best Efforts..................................................................................30
6.6 Termination...................................................................................30
ARTICLE VII COVENANTS.................................................................................31
7.1 General Confidentiality.......................................................................31
7.2 Continuing Obligations........................................................................31
7.3 SEC Filings and Exchange Listing..............................................................31
7.4 Lock-Up Agreements............................................................................31
7.5 Tax Treatment.................................................................................31
ARTICLE VIII MISCELLANEOUS.............................................................................32
8.1 Notices.......................................................................................32
8.2 Entire Agreement; Incorporation...............................................................33
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8.3 Binding Effect................................................................................34
8.4 Assignment....................................................................................34
8.5 Waiver and Amendment..........................................................................34
8.6 No Third Party Beneficiary....................................................................34
8.7 Severability..................................................................................34
8.8 Expenses......................................................................................34
8.9 Headings......................................................................................35
8.10 Other Remedies; Injunctive Relief.............................................................35
8.11 Counterparts..................................................................................35
8.12 Remedies Exclusive............................................................................35
8.13 Governing Law.................................................................................35
8.14 Jurisdiction and Venue........................................................................35
8.15 Participation of Parties......................................................................35
8.16 Further Assurances............................................................................36
8.17 Publicity.....................................................................................36
8.18 Limited Recourse..............................................................................36
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SHARE EXCHANGE AGREEMENT
------------------------
SHARE EXCHANGE AGREEMENT (this "Agreement"), dated as of May 16, 2002,
by and among ▇▇▇▇▇▇ MINES, LTD., a Nevada corporation ("AMI"), ▇▇▇▇▇ ▇▇▇▇▇▇▇ and
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (collectively the "AMI Insiders"), WARP SOLUTIONS, INC., a
Delaware corporation, ("WARP"), ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇ (collectively the
"WARP Insiders") and the Persons identified on Schedule A hereto (the
"SELLERS").
W I T N E S S E T H:
--------------------
WHEREAS, The respective Boards of Directors of AMI and WARP each has
determined that it is in the best interests of their respective stockholders for
AMI to acquire WARP through an exchange of shares of AMI Common Stock for the
issued and outstanding WARP Stock (as more fully described in Article II below),
in an acquisition that constitutes a tax-free transaction meeting the
requirements of Section 368 (a)(1)(B) of the Code, and will result in WARP
becoming a direct subsidiary of AMI upon the terms and conditions set forth
herein; and
WHEREAS, AMI is a publicly held Nevada corporation engaged principally
in the business of mining exploration; and
WHEREAS, the Sellers collectively own up to one hundred percent (100%)
of the issued and outstanding capital stock of WARP (the "WARP Stock"), and
desire to sell to AMI, and AMI desires to acquire, on the terms and subject to
the conditions set forth in this Agreement, the WARP Stock;
NOW, THEREFORE, in consideration of the premises and the respective
mutual covenants, representations and warranties herein contained, the parties
hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
In addition to terms defined elsewhere in this Agreement, the following
terms when used in this Agreement shall have the meanings indicated below:
"Affiliate" shall mean with respect to a specified Person, any other
Person which, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with such Person, and
without limiting the generality of the foregoing, includes, with respect to a
Person (a) any other Person which beneficially owns or holds ten percent (10%)
or more of any class of voting securities or other securities convertible into
voting securities of such Person or beneficially owns or holds ten percent (10%)
or more of any other equity interests in such Person, (b) any other Person with
respect to which such Person beneficially owns or holds ten percent (10%) or
more of any class of voting securities or other securities convertible into
voting securities of such Person, or owns or holds ten percent (10%) or more of
the equity
interests of the other Person, and (c) any director or senior officer of such
Person. For purposes of this definition, the term "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities or
by contract or otherwise.
"Agreement" shall mean this Share Exchange Agreement together with all
exhibits and schedules referred to herein, which exhibits and schedules are
incorporated herein and made a part hereof.
"AMI" shall mean ▇▇▇▇▇▇ Mines, Ltd., a Nevada corporation.
"AMI Common Stock" shall mean the shares of common stock, par value
$.00001 per share, of AMI, as further described in Section 3.12.
"AMI Insiders" shall mean ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇.
"AMI Leased Property" shall have the meaning set forth in Section 3.16.
"AMI Leases" shall have the meaning set forth in Section 3.16.
"Certificates" shall have the meaning set forth in Section 2.3.
"Closing" shall have the meaning set forth in Section 2.6.
"Closing Date" shall mean the date that the Closing takes place.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commission" shall mean the United States Securities and Exchange
Commission.
"Consideration Shares" shall have the meaning set forth in Section 2.2.
"Conversion" shall mean the conversion of all the issued and
outstanding Preferred Stock of WARP to WARP Common Stock consented to by a
majority of the holders of such Preferred Stock in connection with this
Transaction.
"Employee Benefit Plans" shall have the meaning set forth in Section
3.19.
"Environmental Laws" shall have the meaning set forth in Section 3.23.
"ERISA" shall have the meaning set forth in Section 3.19.
"Exchange Ratio" shall have the meaning set forth in Section 2.2.
"Financial Statements of WARP" shall mean the unaudited balance sheet
and the unaudited statements of income, cash flow and retained earnings of WARP
for the fiscal year
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ended December 31, 2001 prepared according to GAAP consistently applied with
prior periods, except as set forth on Schedule 4.13.
"Financial Statements of AMI" shall mean (i) the unaudited balance
sheet and the unaudited statements of income, cash flow and retained earnings of
AMI for the six (6) month period ended December 31, 2001, and (ii) the audited
balance sheet and the audited statements of income, cash flow and retained
earnings of AMI for the fiscal year ended June 30, 2001, including in each such
case any related notes, each prepared according to GAAP consistently applied
with prior periods, except as set forth on Schedule 3.14.
"GAAP" shall have the meaning set forth in Section 3.14.
"Governmental Authorizations" shall have the meaning set forth in
Section 3.25.
"Guaranty" shall mean, as to any Person, all liabilities or obligations
of such Person, with respect to any indebtedness or other obligations of any
other Person, which have been guaranteed, directly or indirectly, in any manner
by such Person, through an agreement, contingent or otherwise, to purchase such
indebtedness or obligation, or to purchase or sell property or services,
primarily for the purpose of enabling the debtor to make payment of such
indebtedness or obligation or to guarantee the payment to the owner of such
indebtedness or obligation against loss, or to supply funds to or in any manner
invest in the debtor.
"Indemnified Party" shall have the meaning set forth in Section 5.4.
"Indemnifying Party" shall have the meaning set forth in Section 5.4.
"Intellectual Property" shall mean the rights to any patent, trademark,
copyright, service ▇▇▇▇, invention, software, software code, trade secret,
technology, product, composition, formula, method or process.
"Investments" shall mean, with respect to any Person, all advances,
loans or extensions of credit to any other Person (except for extensions of
credit to customers in the ordinary course of business), all purchases or
commitments to purchase any stock, bonds, notes, debentures or other securities
of any other Person, and any other investment in any other Person, including
partnerships or joint ventures (whether by capital contribution or otherwise) or
other similar arrangement (whether written or oral) with any Person, including,
but not limited to, arrangements in which (i) the first Person shares profits
and losses of the other Person, (ii) any such other Person has the right to
obligate or bind the first Person to any third party, or (iii) the first Person
may be wholly or partially liable for the debts or obligations of such
partnership, joint venture or other entity.
"Knowledge" shall mean, in the case of any Person who is an individual,
knowledge that a reasonable individual under similar circumstances would have
after such investigation and inquiry as such reasonable individual would under
such similar circumstances make, and in the case of a Person other than an
individual, the knowledge that a senior officer or director of such Person, or
any other Person having responsibility for the particular subject matter at
issue of such
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Person, would have after such investigation and inquiry as such senior officer,
director or responsible Person would under such similar circumstances make.
"Liabilities" shall have the meaning set forth in Section 3.15.
"Litigation" shall have the meaning set forth in Section 3.7.
"Material Adverse Effect" shall mean any event or condition of any
character which has had or could reasonably be expected to have a material
adverse effect on the condition (financial or otherwise), results of operations,
assets, liabilities, properties, business or prospects of AMI or WARP, as
applicable.
"Material Agreements" shall have the meaning set forth in Section 4.20.
"Material AMI Agreements" shall have the meaning set forth in Section
3.21.
"Outstanding AMI Common Stock" shall have the meaning set forth in
Section 3.12.
"Periodic Reports" shall have the meaning set forth in Section 3.14.
"Person" shall mean any natural person, corporation, unincorporated
organization, partnership, association, limited liability company, joint stock
company, joint venture, trust or government, or any agency or political
subdivision of any government or any other entity.
"Preferred Stock" shall mean the WARP Series A Convertible Preferred
and Series B Convertible Preferred stock.
"Purchaser Documents" shall have the meaning set forth in Section 3.2.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Sellers" shall mean the Persons identified on Schedule A hereto.
"Subsidiary" of any Person shall mean any Person, whether or not
capitalized, in which such Person owns, directly or indirectly, an equity
interest of more than fifty percent (50%), or which may effectively be
controlled, directly or indirectly, by such Person.
"Transaction" shall have the meaning set forth in Section 2.1.
"WARP" shall mean WARP Solutions, Inc., a Delaware corporation and its
wholly- owned subsidiary Blue Suit Consulting, Inc., a Delaware corporation.
"WARP Common Stock" shall mean the shares of common stock, par value
$.01 per share, of WARP, as further described in Section 4.11.
"WARP Insiders" shall mean ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇.
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"WARP Stock" shall have the meaning set forth in Section 4.11 and the
recitals to this Agreement.
The words "hereof", "herein" and "hereunder" and the words of similar
import shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. The terms defined in the singular shall have a
comparable meaning when used in the plural and vice versa.
ARTICLE II
TRANSACTION; TERMS OF EXCHANGE; MANNER OF CONVERTING SHARES
2.1 Exchange of Securities. Subject to the terms and conditions set forth
herein, on the Closing Date, each of the Sellers who have executed this
Agreement shall sell to AMI, and AMI shall purchase from such Sellers, all of
such Seller's right, title and interest in and to the WARP Stock indicated next
to such Seller's name on Schedule A hereto (the "Transaction"). At the Closing,
each of such Sellers shall deliver to AMI all of the certificates representing
the WARP Stock indicated next to such Seller's name on Schedule A, together with
stock powers separate from the certificates duly executed by each of the Sellers
in blank and sufficient to convey to AMI good and marketable title to the WARP
Stock free and clear of any and all claims, liens, charges, security interests,
pledges or encumbrances of any nature whatsoever.
2.2 Consideration. The purchase price for the WARP Stock shall be paid by
the issuance to each Seller of 1.3813632 shares (the "Exchange Ratio") of AMI
Common Stock, par value $.00001 per share (collectively, the "Consideration
Shares"), for each share of WARP Stock held by such Seller and tendered at the
Closing. The Consideration Shares shall, upon issuance and delivery to the
Sellers in accordance with the terms hereof, be fully paid, validly issued and
non-assessable, but shall not be registered securities under the Securities Act
of 1933, as amended, (the "Securities Act") pursuant to a valid exception
thereunder.
2.3 Exchange of Shares. At the Closing, the Sellers shall surrender their
certificate or certificates (the "Certificates") which represent their shares of
WARP Stock and shall promptly upon surrender thereof receive in exchange
therefore the number of whole Consideration Shares issuable in respect to all
shares of WARP Stock held by each Seller (rounded to the nearest share). AMI
shall not be obligated to deliver the Consideration Shares which a Seller is
entitled to pursuant to this Agreement until such Seller surrenders their
Certificate or Certificates for exchange as provided in this Section 2.3 or
delivers a lost stock certificate affidavit pursuant to Section 2.9 of this
Agreement.
2.4 Legending of Securities. Each certificate for Consideration Shares
shall bear substantially the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, OR ANY STATE
SECURITIES LAWS. THESE SHARES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED. OR HYPOTHECATED IN THE ABSENCE OF AN
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EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR LAWS, OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT, IN THE CIRCUMSTANCES, REQUIRED UNDER SAID
ACT".
2.5 Fractional Shares. Notwithstanding any other provision of this
Agreement, if a Seller would otherwise have been entitled to receive a fraction
of a share of AMI Common Stock (after taking into account all Certificates
delivered by the Seller), the number of shares issuable to that Seller shall be
rounded up to the next whole number.
2.6 Time and Place of Closing. The closing of the transactions contemplated
hereby (the "Closing") will take place at 9:00 A.M. on or about May 16, 2002, or
at such other time as the parties, acting through their authorized officers, may
mutually agree. The Closing shall be held at the Law Offices of ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other
location as may be mutually agreed upon by the parties.
2.7 Directors and Officers. ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇, the current
directors of WARP, and ▇▇▇▇▇ ▇▇▇▇▇▇▇, a current director of AMI, together with
such additional Persons as may thereafter be elected or appointed, shall serve
as the directors of AMI from and after the Closing, in accordance with the
Bylaws of AMI. The officers of WARP in office immediately prior to the Closing,
together with such additional Persons as may thereafter be elected, shall be
appointed the officers of AMI, as shown on Schedule B , from and after the
Closing, in accordance with the Bylaws of AMI.
2.8 Tax Consequences. It is the intention of the parties hereto that no
taxable income or gain shall be recognized by any of the Sellers or the WARP
Insiders, and that the Transaction be deemed a tax-free exchange pursuant to the
Code.
2.9 Lost, Stolen or Destroyed Certificates. In the event that any
Certificates shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by such Seller (setting forth the number of shares of
WARP Stock represented by such lost, stolen or destroyed Certificates), AMI
shall pay such Seller the Consideration Shares to which such Seller is entitled.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF AMI AND AMI INSIDERS
In order to induce WARP to enter into this Agreement and to consummate the
transactions contemplated hereby, AMI and the AMI Insiders, jointly and
severally, make the representations and warranties set forth below to WARP, the
WARP Insiders and each of the Sellers.
3.1 Organization; Standing and Power. AMI is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada. AMI
and each of the AMI Insiders has all requisite right, power and authority to
execute, deliver and perform this Agreement and to consummate the transactions
contemplated hereby. AMI has all corporate
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right, power and authority to own or lease and operate its properties, and to
conduct its business as presently conducted and as proposed to be conducted. AMI
is duly qualified to transact business as a foreign corporation in all
jurisdictions where the ownership or leasing of its properties or the conduct of
its business requires such qualification, except where the failure to so qualify
would not have a Material Adverse Effect on AMI. Each jurisdiction in which AMI
is so qualified is listed on Schedule 3.1 hereto.
3.2 Authorization; Enforceability. The execution, delivery and performance
of this Agreement by AMI and the AMI Insiders and all other agreements to be
executed, delivered and performed by AMI and the AMI Insiders pursuant to this
Agreement (collectively, the "Purchaser Documents") and the consummation by AMI
and the AMI Insiders of the transactions contemplated hereby and thereby have
been duly authorized by all requisite corporate or individual action on the part
of AMI and the AMI Insiders, as applicable. This Agreement and the Purchaser
Documents have been duly executed and delivered by AMI and the AMI Insiders, and
constitute the legal, valid and binding obligation of AMI and the AMI Insiders,
enforceable in accordance with their respective terms, except to the extent that
their enforcement is limited by bankruptcy, insolvency, reorganization or other
laws relating to or affecting the enforcement of creditors' rights generally and
by general principles of equity.
3.3 Investment Representations. AMI is acquiring the WARP Common Stock for
its own account, for investment purposes only and not with a present view or
purpose for the resale or other distribution thereof.
3.4 No Violation or Conflict. The execution, delivery and performance of
this Agreement and the Purchaser Documents by AMI and the AMI Insiders, and the
consummation by AMI and the AMI Insiders of the transactions contemplated hereby
and thereby: (a) do not violate or conflict with any provision of law or
regulation (whether federal, state or local), or any writ, order or decree of
any court or governmental or regulatory authority, or any provision of AMI's
Articles of Incorporation or Bylaws or the equivalent organizational documents
of any of AMI's Subsidiaries; and (b) except as set forth on Schedule 3.4
hereto, do not and will not, with or without the passage of time or the giving
of notice, result in the breach of, or constitute a default (or an event that
with notice or lapse of time or both would become a default), cause the
acceleration of performance, give to others any right of termination, amendment,
acceleration or cancellation of or require any consent under, or result in the
creation of any lien, charge or encumbrance upon any property or assets of AMI
or any of its Subsidiaries pursuant to any instrument or agreement to which AMI
is a party or by which AMI or its properties may be bound or affected, other
than instruments or agreements as to which consent shall have been obtained at
or prior to the Closing, each of which instruments or agreements is listed in
Schedule 3.4 hereto.
3.5 Consents of Governmental Authorities and Others. No consent, approval,
order or authorization of, or registration, declaration, qualification or filing
with any federal, state or local governmental or regulatory authority, or any
other Person, is required to be made by AMI or the AMI Insiders in connection
with the execution, delivery or performance of this Agreement by AMI and the AMI
Insiders or the consummation by AMI and the AMI Insiders of the transactions
contemplated hereby.
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3.6 Conduct of Business. Except as disclosed on Schedule 3.6 hereto, since
December 31, 2001, AMI has conducted its businesses in the ordinary and usual
course consistent with past practices and there has not occurred any adverse
change in the condition (financial or otherwise), results of operations,
properties, assets, liabilities, business or prospects of AMI, and no such
change is threatened. Without limiting the generality of the foregoing, except
as disclosed on Schedule 3.6, since December 31, 2001, AMI has not: (a) amended
its Articles of Incorporation or Bylaws; (b) issued, sold or authorized for
issuance or sale, shares of any class of its securities (including, but not
limited to, by way of stock split or dividend) or any subscriptions, options,
warrants, rights or convertible securities or entered into any agreements or
commitments of any character obligating it to issue or sell any such securities;
(c) redeemed, purchased or otherwise acquired, directly or indirectly, any
shares of its capital stock or any option, warrant or other right to purchase or
acquire any such capital stock; (d) suffered any damage, destruction or loss,
whether or not covered by insurance, which has had or could reasonably be
expected to have a Material Adverse Effect on any of its properties, assets,
business or prospects; (e) granted or made any mortgage or pledge or subjected
itself or any of its properties or assets to any lien, charge or encumbrance of
any kind; (f) made or committed to make any capital expenditures in excess of
$10,000; (g) become subject to any Guaranty; (h) granted any increase in the
compensation payable or to become payable to directors, officers or employees
(including, without limitation, any such increase pursuant to any severance
package, bonus, pension, profit-sharing or other plan or commitment); (i)
entered into any agreement which would be a Material Agreement, or amended or
terminated any existing Material Agreement; (j) been named as a party in any
Litigation, or become the focus of any investigation by any government or
regulatory agency or authority; (k) declared or paid any dividend or other
distribution with respect to its capital stock; or (l) experienced any other
event or condition of any character which has had or to AMI's or the AMI
Insiders' Knowledge, could reasonably be expected to have a Material Adverse
Effect on AMI. Schedule 3.6 sets forth a true and complete list of all bonuses
or other distributions made by AMI since December 31, 2001.
3.7 Litigation. Except as set forth on Schedule 3.7, there are no actions,
suits, investigations, claims or proceedings ("Litigation") pending or, to the
Knowledge of AMI or any of the AMI Insiders, threatened before any court or by
or before any governmental or regulatory authority or arbitrator, (a) affecting
AMI (as plaintiff or defendant) which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on AMI or (b) against
AMI or the AMI Insiders relating to AMI's Common Stock or the transactions
contemplated by this Agreement and there exist no facts or circumstances to the
Knowledge of AMI or the AMI Insiders creating any reasonable basis for the
institution of any Litigation against AMI or the AMI Insiders. Schedule 3.7 sets
forth a list of any Litigation commenced against AMI or the AMI Insiders in the
last five (5) years.
3.8 Brokers. None of AMI nor the AMI Insiders has employed any broker or
finder, and none of them has incurred or will incur, directly or indirectly, any
broker's, finder's, investment banking or similar fees, commissions or expenses
in connection with the transactions contemplated in this Agreement or the
Purchaser Documents.
3.9 Compliance. Except as set forth on Schedule 3.9, AMI and its
Subsidiaries are in compliance with all federal, state, local and foreign laws,
ordinances, regulations, judgments,
8
rulings, orders and other requirements applicable to AMI and its Subsidiaries
and their respective assets and properties, including, without limitation, those
relating to (a) the registration and sale of the AMI Common Stock, (b) the
establishment of a public trading market for the AMI Common Stock, (c) the
public trading of the AMI Common Stock, and (d) Environmental Laws, the failure
to comply with any of which could reasonably be expected to have a Material
Adverse Effect on AMI. AMI is not subject to any judicial, governmental or
administrative order, judgment or decree.
3.10 Charter, Bylaws and Corporate Records. A true, correct and complete
copy of (a) the Articles of Incorporation of AMI, as amended and in effect on
the date hereof, (b) the Bylaws of AMI, as amended and in effect on the date
hereof, and (c) the minute books of AMI (containing all corporate proceedings
from the date of incorporation) are attached hereto as Schedule 3.10. Such
minute books contain accurate records of all meetings and other corporate
actions of the board of directors, committees of the board of directors,
incorporators and shareholders of AMI from the date of its incorporation to the
date hereof which were memorialized in writing. No actions have been taken since
the date of AMI's incorporation that are not memorialized in writing.
3.11 Subsidiaries and Investments. Except as described on Schedule 3.11,
AMI has no Subsidiaries or Investments. AMI owns one hundred percent (100%) of
the issued and outstanding capital stock of the Subsidiaries listed on Schedule
3.11.
3.12 Capitalization. The authorized capital stock of AMI consists solely of
100,000,000 shares of common stock, $.00001 par value per share, of which
15,077,998 shares are issued and outstanding (the "Outstanding AMI Common
Stock"). All shares of Outstanding AMI Common Stock have been duly authorized,
are validly issued and outstanding, and are fully paid and nonassessable. No
securities issued by AMI from the date of its incorporation to the date hereof
were issued in violation of any statutory, contractual or common law preemptive
rights. There are no dividends which have accrued or been declared but are
unpaid on the capital stock of AMI. Except as set forth on Schedule 3.12 hereto,
all taxes required to be paid in connection with the issuance and any transfers
of AMI's capital stock have been paid. All permits or authorizations required to
be obtained from or registrations required to be effected with any Person in
connection with any and all issuances of securities of AMI from the date of
AMI's incorporation to the date hereof have been obtained or effected and all
securities of AMI have been issued and are held in accordance with the
provisions of all applicable securities or other laws. The Outstanding AMI
Common Stock constitutes one hundred percent (100%) of the issued and
outstanding capital stock of AMI. The Consideration Shares shall, upon issuance
and delivery to the Sellers in accordance with the terms hereof, be fully paid,
validly issued and non-assessable, but shall not be registered securities under
the Securities Act of 1933. Neither AMI nor any of its Subsidiaries has any
option plans, restricted stock plans, or any other plan under which securities
of AMI have been or could be issued. There are no registration rights and, to
the Knowledge of AMI and the AMI Insiders, there are no voting trusts, proxies
or other agreements or understandings with respect to any equity security of any
class of AMI or with respect to any equity security, partnership interest or
similar ownership interest of any class of any of its Subsidiaries. Schedule
3.12 contains a description of the capitalization of AMI as it shall be
immediately following the Closing of the Transaction.
9
3.13 Rights, Warrants, Options. Except as set forth on Schedule 3.13, there
are no outstanding (a) securities or instruments convertible into or exercisable
for any of the capital stock or other equity interests of AMI or its
Subsidiaries; (b) options, warrants, subscriptions or other rights to acquire
capital stock or other equity interests of AMI or its Subsidiaries; or (c)
commitments, agreements or understandings of any kind, including employee
benefit arrangements, relating to the issuance or repurchase by AMI or its
Subsidiaries of any capital stock or other equity interests of AMI or its
Subsidiaries, or any instruments convertible or exercisable for any such
securities or any options, warrants or rights to acquire such securities.
3.14 Commission Filings and Financial Statements. Attached hereto as
Schedule 3.14 is a true and complete list of all the Forms 10KSB, 10QSB, 8-K and
other required filings filed by AMI with the Commission (collectively the
"Periodic Reports") since AMI became subject to the periodic reporting
requirements of the Securities Exchange Act of 1934. All Periodic Reports of AMI
required to have been filed with the Commission have been filed in a timely
manner, have been true, accurate and complete in all material respects and have
been filed in compliance with the requirements of the Securities and Exchange
Act of 1934. None of AMI's Subsidiaries is required to file any forms, reports
or other documents with the Commission. The Financial Statements of AMI: (a)
have been prepared in accordance with the books of account and records of AMI;
(b) fairly present, and are true, correct and complete statements in all
material respects of AMI's financial condition and the results of its operations
at the dates and for the periods specified in those statements; and (c) have
been prepared in accordance with United States generally accepted accounting
principles ("GAAP") consistently applied with prior periods, except as set forth
on Schedule 3.14.
3.15 Absence of Undisclosed Liabilities. Other than as disclosed by the
Periodic Reports, the Financial Statements of AMI or as disclosed on Schedule
3.15, AMI does not have any direct or indirect indebtedness, liability, claim,
loss, damage, deficiency, obligation or responsibility, known or unknown, fixed
or unfixed, ▇▇▇▇▇▇ or inchoate, liquidated or unliquidated, secured or
unsecured, accrued, absolute, contingent or otherwise, including, without
limitation, liabilities on account of taxes, other governmental charges or
Litigation, whether or not of a kind required by GAAP to be set forth on a
financial statement ("Liabilities"). Except as listed on Schedule 3.15, AMI does
not have any Liabilities other than Liabilities fully and adequately reflected
in the Periodic Reports or the Financial Statements of AMI. AMI and the AMI
Insiders have no Knowledge of any circumstances, conditions, events or
arrangements which may hereafter give rise to any Liabilities of AMI, except as
set forth on Schedule 3.15.
3.16 Real Property. AMI does not own any fee simple interest in real
property. AMI does not lease, sublease, or have any other contractual interest,
including mining interests, in any real property other than as set forth on
Schedule 3.16. Schedule 3.16 sets forth the street address of each parcel of
real property leased or subleased by AMI, or in which AMI has any other
contractual interest, including mining interests (collectively the "AMI Leased
Property"). Attached hereto as Schedule 3.16 are true and complete copies of all
of the lease, sublease and other contractual agreements, including mining
agreements (collectively the "AMI Leases"), as amended to date, relating to the
AMI Leased Property. The AMI Leases are valid, binding and
10
in full force and effect, all rent and other sums and charges payable thereunder
are current, and no notice of default or termination under any of the AMI Leases
is outstanding.
There are no liabilities (other than rent and other sums and charges
regularly payable) associated with any of the AMI Leases including, without
limitation, any liability under any Environmental Law or regulation, which is or
which may become payable after the Closing of the Transaction.
3.17 List of Accounts and Proxies. Set forth on Schedule 3.17 is: (a) the
name and address of each bank or other institution in which AMI maintains an
account (cash, securities or other) or safe deposit box; (b) the name and phone
number of AMI's contact person at such bank or institution; (c) the account
number of the relevant account and a description of the type of account; (d) the
name of each person authorized by AMI to effect transactions therewith or to
have access to any safe deposit box or vault; and (e) all proxies, powers of
attorney or other like instruments to act on behalf of AMI in matters concerning
its business or affairs.
3.18 Personnel. Schedule 3.18 contains the names and annual salary rates
and other compensation of all officers, directors, consultants and employees of
AMI (including compensation paid or payable by AMI under any employee benefit or
option plans). Schedule 3.18 sets forth a list of all employee policies,
employee manuals or other written statements of rules or policies as to working
conditions, vacation and sick leave.
3.19 Employment Agreements and Employee Benefit Plans.
(a) Except as set forth in Schedule 3.19, AMI has not had any and does not
have any defined contribution plan and it is not (and was never) part of a
controlled group contributing to any defined contribution plan and is not and
was never a party to any collective bargaining agreement or other employment
contracts. AMI has not, nor does it now contribute to any pension,
profit-sharing, option, other incentive plan, or any other type of Employee
Benefit Plan (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), or any health, dental, vision, long
term disability, short term disability, life insurance or other welfare benefits
plan, or have any obligation to or customary arrangement with employees for
bonuses, incentive compensation, vacations, severance pay, insurance, or other
benefits, except as set forth in Schedule 3.19 and it is not now (and was never)
a part of a controlled group with regard to any of the foregoing. Schedule 3.19
also contains a true and correct statement of the names, relationship with AMI,
present rates of compensation (whether in the form of salary, bonuses,
commissions, or other supplemental compensation now or hereafter payable), and
aggregate compensation for the fiscal year ended June 31, 2001 of each director,
officer, consultant or employee of AMI. Except as set forth on Schedule 3.19,
since June 31, 2001, AMI has not changed the rate of compensation of any of its
directors, officers, consultants or employees, and AMI will not be required to
make any severance payments to any of its directors, officers, consultants or
employees as a result of the Transaction.
(b) There are no complaints, charges, claims, allegations, grievances, or
litigations pending or threatened which reflect or pertain to: (i) any federal,
state or local labor, employment, anti-discrimination, workers compensation,
disability or unemployment law, regulation or ordinance; (ii) any claim for
wrongful discharge, harassment, discrimination,
11
breach of employment contract or employment-related tort; or (iii) any
employment agreement, restrictive covenant, non-competition agreement or
employee confidentiality agreement, which, in any such case, if adversely
determined, could reasonably be expected to have a Material Adverse Effect on
AMI or any of its Subsidiaries.
3.20 Tax Matters. All tax returns and tax reports required to be filed with
respect to the income, operations, business or assets of AMI have been timely
filed (or appropriate extensions have been obtained which extensions are listed
on Schedule 3.20) with the appropriate governmental agencies in all
jurisdictions in which such returns and reports are required to be filed, all of
the foregoing as filed are true, correct and complete in all material respects,
and reflect accurately all Liabilities for taxes of AMI for the periods to which
such returns relate, and all amounts shown as owing thereon have been paid.
Except as set forth on Schedule 3.20, all income, profits, franchise, sales,
use, value added, occupancy, property, excise, payroll, withholding, FICA, FUTA
and other taxes (including interest and penalties), if any, collectible or
payable by AMI or relating to or chargeable against any of its assets, revenues
or income or relating to any employee, independent contractor, creditor,
stockholder or other third party through the date hereof which were required to
be collected and/or paid by AMI, were fully collected and paid by such date or
provided for by adequate reserves. Except as set forth on Schedule 3.20, no
taxation authority has since the date of AMI's incorporation, sought to audit
the records of AMI for the purpose of verifying or disputing any tax returns,
reports or related information and disclosures provided to such taxation
authority, or for AMI's alleged failure to provide any such tax returns, reports
or related information and disclosure. Except as provided on Schedule 3.20, no
claims or deficiencies have been asserted against or inquiries raised with AMI
with respect to any taxes or other governmental charges or levies which have not
been paid or otherwise satisfied, including claims that, or inquiries whether,
AMI has not filed a tax return that it was required to file, and there exists no
reasonable basis for the making of any such claims or inquiries. AMI has not
waived any restrictions on assessment or collection of taxes or consented to the
extension of any statute of limitations relating to taxation other than filing
extensions as set forth on Schedule 3.20. AMI has not filed a consent under
Section 341(f) of the Code concerning collapsible corporations, is not and has
never been a party to a tax allocation or sharing agreement or a member of a
group filing a consolidated federal income tax return, and has not been a United
States real property holding corporation within the meaning of Code Section 897
(c)(2), during the applicable period specified in Code Section 897(c)(1)(A)(ii).
3.21 Material Agreements.
(a) Schedule 3.21 sets forth a brief description of all material written
and oral contracts or agreements relating to AMI (except with respect to the AMI
Leases, which are set forth on Schedule 3.16, which is hereby incorporated by
reference into Schedule 3.21 and made a part thereof), including without
limitation any: (i) contract resulting in a commitment or potential commitment
for expenditure or other obligation or potential obligation, or which provides
for the receipt or potential receipt, involving in excess of Ten Thousand
Dollars ($10,000.00) in any instance, or series of related contracts that in the
aggregate give rise to rights or obligations exceeding such amount; (ii)
indenture, mortgage, promissory note, loan agreement, guarantee or other
agreement or commitment for the borrowing or lending of money or encumbrance of
assets involving more than Ten Thousand Dollars ($10,000.00) in each instance;
(iii) agreement which
12
restricts AMI from engaging in any line of business or from competing with any
other Person; or (iv) any other contract, agreement, instrument, arrangement or
commitment that is material to the condition (financial or otherwise), results
of operation, assets, properties, liabilities, business or prospects of AMI
(collectively, and together with the AMI Leases, employment agreements, Employee
Benefit Plans and all other agreements required to be disclosed on any Schedule
to this Agreement, the "Material AMI Agreements"). AMI has previously furnished
to WARP true, complete and correct copies of all written agreements, as amended,
required to be listed on Schedule 3.21.
(b) Except as set forth on Schedule 3.21, none of the Material AMI
Agreements was entered into outside the ordinary course of business of AMI,
contains any provisions that will impair or adversely effect in any material way
the operations of AMI, or is reasonably likely to be performed at a material
loss.
(c) The Material AMI Agreements are each in full force and effect and are
the valid and legally binding obligations of AMI and the other parties thereto,
enforceable in accordance with their respective terms, subject only to
bankruptcy, insolvency or similar laws affecting the rights of creditors
generally and to general equitable principles. AMI has not received notice of
default by AMI under any of the Material AMI Agreements and AMI is not in
default thereunder. AMI has not received notice of the pending or threatened
cancellation, revocation or termination of any of the Material AMI Agreements.
(d) Except as otherwise indicated on Schedule 3.21, to AMI and the AMI
Insiders' Knowledge, the continuation, validity and effectiveness of the
Material AMI Agreements under the current terms thereof will in no way be
adversely affected by the consummation of the transactions contemplated by this
Agreement.
3.22 Guaranties. Except as set forth on Schedule 3.22, AMI is not a party
to any Guaranty, and no Person is a party to any Guaranty for the benefit of
AMI.
3.23 Environmental Matters. None of the AMI Leased Property nor any other
property used by AMI presently or in the past has been used to manufacture,
treat, store, or dispose of any hazardous substance and such property is free of
all such substances such that the condition of the property is in compliance
with applicable Environmental Laws (as defined below). Except as described on
Schedule 3.23, AMI is in compliance with all laws, regulations and other
federal, state or local governmental requirements, and all applicable judgments,
orders, writs, notices, decrees, permits, licenses, approvals, consents or
injunctions relating to the generation, management, handling, transportation,
treatment, disposal, storage, delivery, discharge, release or emission of any
waste, pollutant or toxic or hazardous substance (including, without limitation,
asbestos, radioactive material and pesticides) (the "Environmental Laws")
applicable to AMI or its business as a result of any hazardous substance
utilized by AMI in its business or otherwise placed at any of the facilities
owned, leased or operated by AMI, or in which AMI has a contractual interest,
including mining interests. Except as described on Schedule 3.23, neither the
AMI Insiders, nor AMI (or its directors or officers), has received any
complaint, notice, order, or citation of any actual, threatened or alleged
noncompliance by AMI with any Environmental Laws, and there is no Litigation
pending or, to AMI or the AMI Insiders' Knowledge, threatened against any of
AMI, the AMI Insiders or any director or officer of AMI,
13
with respect to any violation or alleged violation of the Environmental Laws,
and to AMI and the AMI Insiders' Knowledge, there is no reasonable basis for the
institution of any such Litigation.
3.24 Intellectual Property Rights. Except as set forth on Schedule 3.24, to
its Knowledge, AMI has all right, title and interest in each item of its
Intellectual Property necessary for AMI to be legally entitled to conduct its
business as presently being conducted. Except as otherwise indicated on Schedule
3.24, AMI has not received any written notice that it is in conflict with or
infringing upon the asserted rights of others in connection with its
Intellectual Property and neither the use of such Intellectual Property by AMI
nor the operation of its business is, to AMI's Knowledge, infringing on nor has
infringed upon any rights of others, and the consummation of the transactions
contemplated hereby will not alter or impair any of its Intellectual Property.
3.25 Licenses. Schedule 3.25 lists all material authorizations, consents,
approvals, franchises, licenses and permits required under applicable law or
regulation (the "Governmental Authorizations") for the operation of the business
of AMI as presently operated. All the Governmental Authorizations have been duly
issued or obtained and are in full force and effect, and AMI is in material
compliance with the terms of all the Governmental Authorizations. Except as set
forth on Schedule 3.25, to AMI's Knowledge, no fact or condition exists which
could cause the Governmental Authorizations not to be renewed by the appropriate
governmental authorities in the ordinary course. No material violations have
been recorded in respect of any Governmental Authorization and no proceeding is
pending or, to the Knowledge of AMI, threatened, to revoke any Governmental
Authorization. To AMI's Knowledge, the execution, delivery or performance by AMI
of this Agreement and the other documents contemplated hereby shall not
adversely affect the status of any of the Governmental Authorizations.
3.26 Absence of Certain Business Practices. None of the AMI Insiders, nor
AMI, nor any Affiliates thereof nor, to the Knowledge of each of AMI and each of
the AMI Insiders, any other Person acting on behalf of AMI, acting alone or
together, has with respect to the business or activities of AMI: (a) received,
directly or indirectly, any rebates, payments, commissions, promotional
allowances or any other economic benefits, regardless of their nature or type,
from any customer, supplier, trading company, shipping company, governmental
employee or other Person with whom AMI has done business directly or indirectly;
or (b) directly or indirectly, given or agreed to give any gift or similar
benefit to any customer, supplier, trading company, shipping company,
governmental employee or other Person who is or may be in a position to help or
hinder the business of AMI (or assist AMI in connection with any actual or
proposed transaction) which (i) may subject AMI to any material damage or any
penalty in any Litigation, (ii) if not given in the past, may have had a
Material Adverse Effect on the assets, business or operations of AMI as
reflected in the Periodic Reports or Financial Statements of AMI or (iii) if not
continued in the future, may materially adversely affect the assets, business or
operations of AMI or subject AMI to suit or penalty in any private or
governmental litigation or proceeding.
3.27 Disclosure. No representation or warranty of the AMI Insiders or AMI
contained in this Agreement, and no statement, report, or certificate furnished
by or on behalf of the AMI Insiders or AMI to WARP, the Sellers or their agents
pursuant hereto or in connection with the transactions contemplated hereby,
contains any untrue statement of a material fact or omits to
14
state a material fact necessary in order to make the statements contained herein
or therein not misleading or omits or will omit to state a material fact
necessary in order to provide WARP and the Sellers with full and proper
information as to the business, financial condition, assets, liabilities,
results of operation or prospects of AMI and the value of its properties and the
ownership and operation of AMI.
3.28 Shares Owned by AMI Insiders. ▇▇▇▇▇ ▇▇▇▇▇▇▇ owns a total of six
million two hundred and fifty thousand (6,250,000) shares of AMI Common Stock
and does not own, directly or indirectly, any other shares of AMI Common Stock
or other securities or instruments convertible into or exercisable or
exchangeable for AMI Common Stock. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ owns a total of six million
two hundred and fifty thousand (6,250,000) shares of AMI Common Stock and does
not own, directly or indirectly, any other shares of AMI Common Stock or other
securities or instruments convertible into or exercisable or exchangeable for
AMI Common Stock. All of the shares of AMI Common Stock owned, directly or
directly, by Messrs. Civelli and Muzylowski shall be tendered to AMI for
cancellation without consideration at or prior to the Closing, and such shares
shall be cancelled and added back to the authorized but unissued common stock of
AMI.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF WARP, WARP INSIDERS AND THE SELLERS
Representations and Warranties of WARP and the WARP Insiders
In order to induce AMI and the AMI Insiders to enter into this Agreement
and to consummate the transactions contemplated hereby, WARP and the WARP
Insiders make the representations and warranties set forth below to AMI, the AMI
Insiders and each of the Sellers.
4.1 Organization. WARP is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. WARP is duly
qualified to transact business as a foreign corporation in all jurisdictions
where the ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to so qualify would not
have a Material Adverse Effect on WARP. Each jurisdiction in which WARP is so
qualified is listed on Schedule 4.1 hereto. WARP has the requisite power and
authority to (a) own or lease and operate its properties and (b) conduct its
business as presently conducted.
4.2 Authorization; Enforceability. WARP and the WARP Insiders have the
capacity to execute, deliver and perform this Agreement. This Agreement and all
other documents executed and delivered by WARP and the WARP Insiders pursuant to
this Agreement have been duly executed and delivered and constitute the legal,
valid and binding obligations of WARP and the WARP Insiders, assuming the due
authorization, execution and delivery of this Agreement by AMI and the AMI
Insiders, enforceable in accordance with their respective terms, except to the
extent that their enforcement is limited by bankruptcy, insolvency,
reorganization or other laws relating to or affecting the enforcement of
creditors' rights generally and by general principals of equity.
15
4.3 No Violation or Conflict. The execution, delivery and performance of
this Agreement and the other documents contemplated hereby by WARP and the WARP
Insiders, and the consummation by WARP and the WARP Insiders of the transactions
contemplated hereby: (a) do not violate or conflict with any provision of law or
regulation (whether federal, state or local), or any writ, order or decree of
any court or governmental or regulatory authority, or any provision of WARP's
Certificate of Incorporation or Bylaws; and (b) except as set forth on Schedule
4.3 hereto, do not, with or without the passage of time or the giving of notice,
result in the breach of, or constitute a default, cause the acceleration of
performance or require any consent under, or result in the creation of any lien,
charge or encumbrance upon any property or assets of WARP pursuant to any
instrument or agreement to which WARP is a party or by which WARP or its
properties may be bound or affected, other than instruments or agreements as to
which consent shall have been obtained at or prior to the Closing, each of which
instruments or agreements is listed in Schedule 4.3 hereto.
4.4 Consents of Governmental Authorities and Others. No consent, approval
or authorization of, or registration, qualification or filing with any federal,
state or local governmental or regulatory authority, or any other Person, is
required to be made by WARP or the WARP Insiders in connection with the
execution, delivery or performance of this Agreement by WARP or the WARP
Insiders or the consummation by them of the transactions contemplated hereby,
excluding the execution, delivery and performance of this Agreement by the
Sellers.
4.5 Conduct of Business. Except as disclosed on Schedule 4.5 hereto, since
December 31, 2001, WARP has conducted its businesses in the ordinary and usual
course consistent with past practices and there has not occurred any adverse
change in the condition (financial or otherwise), results of operations,
properties, assets, liabilities, business or prospects of WARP, and no such
change is threatened. Without limiting the generality of the foregoing, except
as disclosed on Schedule 4.5, since December 31, 2001, WARP has not: (a) amended
its Certificate of Incorporation or Bylaws; (b) issued, sold or authorized for
issuance or sale, shares of any class of its securities (including, but not
limited to, by way of stock split or dividend) or any subscriptions, options,
warrants, rights or convertible securities or entered into any agreements or
commitments of any character obligating it to issue or sell any such securities;
(c) redeemed, purchased or otherwise acquired, directly or indirectly, any
shares of its capital stock or any option, warrant or other right to purchase or
acquire any such capital stock; (d) suffered any damage, destruction or loss,
whether or not covered by insurance, which has had or could reasonably be
expected to have a Material Adverse Effect on any of its properties, assets,
business or prospects; (e) granted or made any mortgage or pledge or subjected
itself or any of its properties or assets to any lien, charge or encumbrance of
any kind; (f) made or committed to make any capital expenditures in excess of
$10,000; (g) become subject to any Guaranty; (h) granted any increase in the
compensation payable or to become payable to directors, officers or employees
(including, without limitation, any such increase pursuant to any bonus,
pension, profit-sharing or other plan or commitment); (i) amended or terminated
any existing Material Agreement; (j) been named as a party in any litigation, or
become the focus of any investigation by any government or regulatory agency or
authority; (k) declared or paid any dividend or other distribution with respect
to its capital stock; or (l) experienced any other event or condition of any
character which has had or to WARP's Knowledge, could reasonably be expected to
have a
16
Material Adverse Effect on WARP. Schedule 4.5 sets forth a true and complete
list of all bonuses or other distributions made by WARP since December 31, 2001.
4.6 Litigation. Except as set forth on Schedule 4.6, there are no
Litigations pending before any court or by or before any governmental or
regulatory authority or arbitrator, (a) affecting WARP (as plaintiff or
defendant) which, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect on WARP or (b) against WARP relating to the
WARP Stock or the transactions contemplated by this Agreement. Schedule 4.6 sets
forth a list of all Litigation commenced against WARP since the date of its
incorporation.
4.7 Brokers. WARP and the WARP Insiders have not employed any broker or
finder, and has not incurred and will not incur any broker's, finder's,
investment banking or similar fees, commissions or expenses in connection with
the share exchange memorialized by this Agreement.
4.8 Compliance. To its Knowledge, WARP is in compliance with all federal,
state, local and foreign laws, ordinances, regulations, judgments, rulings,
orders and other requirements applicable to it including, without limitation,
those relating to (a) the development, manufacture, packaging, distribution and
marketing of its products, (b) the employment, safety and health of its
employees, and (d) Environmental Laws, the failure to comply with any of which
could reasonably be expected to have a Material Adverse Effect on WARP. WARP and
the WARP Insiders are not subject to any judicial, governmental or
administrative order, judgment or decree.
4.9 Charter, Bylaws and Corporate Records. A true, correct and complete
copy of (a) the Certificate of Incorporation of WARP, as amended and in effect
on the date hereof, and (b) the Bylaws of WARP, as amended and in effect on the
date hereof, are attached hereto as Schedule 4.9.
4.10 Subsidiaries and Investments. Except as described on Schedule 4.10,
WARP has no Subsidiaries or Investments.
4.11 Capitalization. The authorized capital stock of WARP consists of
20,000,000 shares of common stock, par value $.01 per share (the "WARP Common
Stock"), and 6,000,000 shares of preferred stock. WARP has designated two series
of preferred stock; Series A Convertible Preferred Stock and Series B
Convertible Preferred Stock (together the "Preferred Stock"). Prior to the
Conversion, WARP had issued and outstanding 3,600,000 shares of WARP Common
Stock, 1,000,000 shares of Series A Convertible Preferred Stock and 2,000,000
shares of Series B Convertible Preferred Stock. In connection with the
Transaction, a majority of the holders of the Preferred Stock consented to the
Conversion. As a result of the Conversion, WARP at the Closing Date has issued
and outstanding 6,600,000 shares of WARP Common Stock (the "WARP Stock"). The
WARP Stock constitutes one hundred percent (100%) of the issued and outstanding
capital stock of WARP. The WARP Stock is owned by the Sellers in the amounts set
forth on Schedule A. All of the WARP Stock has been duly authorized, is validly
issued and outstanding, and is fully paid and nonassessable. No securities
issued by WARP from the date of its incorporation to the date hereof were issued
in violation of any statutory or common law preemptive rights. There are no
dividends which have accrued or been declared but
17
are unpaid on the capital stock of WARP. Except as set forth on Schedule 4.11
hereto, all taxes required to be paid in connection with the issuance and any
transfers of WARP's capital stock have been paid. All permits or authorizations
required to be obtained from or registrations required to be effected with any
Person in connection with any and all issuances of securities of WARP from the
date of its incorporation to the date hereof have been obtained or effected and
all securities of WARP have been issued and are held in accordance with the
provisions of all applicable securities or other laws.
4.12 Rights, Warrants, Options. Except as set forth on Schedule 4.12, there
are no outstanding (a) securities or instruments convertible into or exercisable
for any of the capital stock or other equity interests of WARP; (b) options,
warrants, subscriptions or other rights to acquire capital stock or other equity
interests of WARP; or (c) except as set forth on Schedule 4.12 hereto,
commitments, agreements or understandings of any kind, including employee
benefit arrangements, relating to the issuance or repurchase by WARP of any
capital stock or other equity interests of WARP, or any instruments convertible
or exercisable for any such securities or any options, warrants or rights to
acquire such securities.
4.13 Financial Statements. Attached hereto as Schedule 4.13 are true and
complete copies of the Financial Statements of WARP. The Financial Statements of
WARP: (a) have been prepared in accordance with the books of account and records
of WARP; (b) fairly present, and are true, correct and complete statements, in
all material respects, of WARP's financial condition and the results of its
operations at the dates and for the periods specified in those statements; and
(c) have been prepared in accordance with GAAP consistently applied with prior
periods, except as set forth on Schedule 4.13.
4.14 Absence of Undisclosed Liabilities. Other than as disclosed by the
Financial Statements of WARP, WARP does not have any Liabilities which were not
fully and adequately reflected on the Financial Statements of WARP or Schedule
4.14. Except as listed on Schedule 4.14, WARP does not have any Liabilities,
other than (i) Liabilities fully and adequately reflected on the Financial
Statements of WARP and (ii) those incurred since December 31, 2001 in the
ordinary course of business.
4.15 Real Property. WARP does not own any fee simple interest in real
property. WARP does not lease or sublease any real property other than as set
forth on Schedule 4.15. Schedule 4.15 sets forth the street address of each
parcel of real property leased or subleased by WARP. WARP enjoys peaceful and
undisturbed possession of its leased property. No Person other than WARP has any
right to use or occupy any part of WARP's leased property. WARP's leases are
valid, binding and in full force and effect. WARP has not received any notice of
any pending, threatened or contemplated eviction or condemnation proceeding
affecting any of its leased property or any part thereof. There are no
liabilities (other than rent and other sums and charges regularly payable)
associated with any of WARP lease including, without limitation, any liability
under any Environmental Law or regulation.
4.16 Licenses. Schedule 4.16 lists all material Governmental Authorizations
required under applicable law or regulation for the operation of the business of
WARP as presently operated. All the Governmental Authorizations have been duly
issued or obtained and are in full force and effect, and WARP is in material
compliance with the terms of all the Governmental
18
Authorizations. Except as set forth on Schedule 4.16, to WARP's Knowledge, no
fact or condition exists which could cause the Governmental Authorizations not
to be renewed by the appropriate governmental authorities in the ordinary
course. No material violations have been recorded in respect of any Governmental
Authorization and no proceeding is pending or, to the Knowledge of WARP,
threatened, to revoke any Governmental Authorization. To WARP's Knowledge, the
execution, delivery or performance by WARP of this Agreement and the other
documents contemplated hereby shall not adversely affect the status of any of
the Governmental Authorizations.
4.17 Intellectual Property Rights. Except as set forth on Schedule 4.17, to
its Knowledge, WARP has all right, title and interest in each item of its
Intellectual Property necessary for WARP to be legally entitled to conduct its
business as presently being conducted. Except as otherwise indicated on Schedule
4.17: (i) WARP is the sole and exclusive owner of all right, title and interest
in and to all of its Intellectual Property, and has the exclusive right to use
and license the same, free and clear of any claim or conflict with the rights of
others; (ii) no royalties or fees (license or otherwise) are payable by WARP to
any Person by reason of the ownership or use of any of WARP's Intellectual
Property; (iii) to its Knowledge, there have been no claims made against WARP
asserting the invalidity, abuse, misuse, or unenforceability of any of WARP's
Intellectual Property, (iv) WARP has not made any claim of any violation or
infringement by others of its rights in its Intellectual Property; (v) WARP has
not received any written notice that it is in conflict with or infringing upon
the asserted rights of others in connection with its Intellectual Property and
neither the use of the Intellectual Property by WARP nor the operation of its
business is, to WARP's Knowledge, infringing on nor has infringed upon any
rights of others; and (vi) the consummation of the transactions contemplated
hereby will not alter or impair any of WARP's Intellectual Property.
4.18 Employment Agreements and Employee Benefit Plans.
(a) Except as set forth in Schedule 4.18, WARP has not had any defined
contribution plan and it is not part of a controlled group contributing to any
defined contribution plan and is not a party to any collective bargaining
agreement or other employment contracts. WARP has not, nor does it, contribute
to any pension, profit-sharing, option, other incentive plan, or any other type
of Employee Benefit Plan (as defined in Section 3(3) of ERISA), or any health,
dental, vision, long term disability, short term disability, life insurance or
other welfare benefits plan, or have any obligation to or customary arrangement
with employees for bonuses, incentive compensation, vacations, severance pay,
insurance, or other benefits, except as set forth in Schedule 4.18 and it is not
part of a controlled group with regard to any of the foregoing. Schedule 4.18
also contains a true and correct statement of the names, relationship with WARP,
present rates of compensation (whether in the form of salary, bonuses,
commissions, or other supplemental compensation now or hereafter payable), and
aggregate compensation for the fiscal year ended December 31, 2001 of each
director, officer, consultant or employee of WARP. Except as set forth on
Schedule 4.18, since December 31, 2001, WARP has not changed the rate of
compensation of any of its directors, officers, consultants or employees.
(b) There are no complaints, charges, claims, allegations, grievances, or
litigations pending or threatened which reflect or pertain to: (i) any federal,
state or local labor,
19
employment, anti-discrimination, workers compensation, disability or
unemployment law, regulation or ordinance; (ii) any claim for wrongful
discharge, harassment, discrimination, or employment related tort; or (iii) any
employment agreement, restrictive covenant, non-competition agreement or
employee confidentiality agreement, which, in any such case, if adversely
determined, could reasonably be expected to have a Material Adverse Effect on
WARP.
4.19 Tax Matters. All tax returns and tax reports required to be filed with
respect to the income, operations, business or assets of WARP have been timely
filed (or appropriate extensions have been obtained which extensions are listed
on Schedule 4.19) with the appropriate governmental agencies in all
jurisdictions in which such returns and reports are required to be filed, all of
the foregoing as filed are true, correct and complete in all material respects,
and reflect accurately all liability for taxes of WARP for the periods to which
such returns relate, and all amounts shown as owing thereon have been paid.
Except as set forth on Schedule 4.19, all income, profits, franchise, sales,
use, value added, occupancy, property, excise, payroll, withholding, FICA, FUTA
and other taxes (including interest and penalties), if any, collectible or
payable by WARP or relating to or chargeable against any of its assets, revenues
or income or relating to any employee, independent contractor, creditor,
stockholder or other third party through the date hereof which were required to
be collected and/or paid by WARP, were fully collected and paid by such date or
provided for by adequate reserves in the December 31, 2001 Financial Statements
of WARP. Except as set forth on Schedule 4.19, no taxation authority has sought
to audit the records of WARP for the purpose of verifying or disputing any tax
returns, reports or related information and disclosures provided to such
taxation authority, or for WARP's alleged failure to provide any such tax
returns, reports or related information and disclosure. Except as provided on
Schedule 4.19, no claims or deficiencies have been asserted against or inquiries
raised with WARP with respect to any taxes or other governmental charges or
levies which have not been paid or otherwise satisfied, including claims that,
or inquiries whether, WARP has not filed a tax return that it was required to
file, and, to WARP's' Knowledge, there exists no reasonable basis for the making
of any such claims or inquiries. WARP has not waived any restrictions on
assessment or collection of taxes or consented to the extension of any statute
of limitations relating to taxation other than filing extensions as set forth on
Schedule 4.19. WARP has not filed a consent under Section 341(f) of the Code
concerning collapsible corporations, is not and has never been a party to a tax
allocation or sharing agreement or a member of a group filing a consolidated
federal income tax return and has not been a United States real property holding
corporation within the meaning of Code Section 897 (c)(2), during the applicable
period specified in Code Section 897(c)(1)(A)(ii).
4.20 Material Agreements.
(a) Schedule 4.20 sets forth a brief description of all material written
and oral contracts or agreements relating to WARP (except with respect to the
leases, which are set forth on Schedule 4.15, which is hereby incorporated by
reference into Schedule 4.20 and made a part thereof), including without
limitation any: (i) contract resulting in a commitment or potential commitment
for expenditure or other obligation or potential obligation, or which provides
for the receipt or potential receipt, involving in excess of Ten Thousand
Dollars ($10,000.00) in any instance, or series of related contracts that in the
aggregate give rise to rights or obligations
20
exceeding such amount; (ii) indenture, mortgage, promissory note, loan
agreement, guarantee or other agreement or commitment for the borrowing or
lending of money or encumbrance of assets involving more than Ten Thousand
Dollars ($10,000.00) in each instance; (iii) agreement which restricts WARP from
engaging in any line of business or from competing with any other Person; (iv)
warranties made with respect to products manufactured, packaged, distributed or
sold by WARP; or (v) any other contract, agreement, instrument, arrangement or
commitment that is material to the condition (financial or otherwise), results
of operation, assets, properties, liabilities, business or prospects of WARP
(collectively, and together with the leases, employment agreements, Employee
Benefit Plans and all other agreements required to be disclosed on any Schedule
to this Agreement, the "Material Agreements").
(b) Except as set forth on Schedule 4.20, none of the Material Agreements
was entered into outside the ordinary course of business of WARP, contain any
provisions that will impair or adversely effect in any material way the
operations of WARP, or is reasonably likely to be performed at a material loss.
(c) The Material Agreements are each in full force and effect and are the
valid and legally binding obligations of WARP and, to WARP's Knowledge, the
other parties thereto, enforceable in accordance with their respective terms,
subject only to bankruptcy, insolvency or similar laws affecting the rights of
creditors generally and to general equitable principles. WARP has not received
notice of default by WARP under any of the Material Agreements. Neither WARP,
nor, to WARP's Knowledge, any of the other parties to any of the Material
Agreements are in default thereunder. WARP has not received notice of the
pending or threatened cancellation, revocation or termination of any of the
Material Agreements.
(d) Except as otherwise indicated on Schedule 4.20, to WARP's Knowledge,
the continuation, validity and effectiveness of the Material Agreements under
the current terms thereof will in no way be adversely affected by the
consummation of the transactions contemplated by this Agreement.
4.21 Guaranties. Except as set forth on Schedule 4.21, WARP is not a party
to any Guaranty, and no Person is a party to any Guaranty for the benefit of
WARP.
4.22 Accounts and Notes Receivable. Except as set forth on Schedule 4.22,
all accounts and notes receivable of WARP have arisen in the ordinary course of
business, represent valid obligations to WARP and, subject only to reserves for
bad debts on the books of WARP, have been collected or are collectible in the
aggregate recorded amounts thereof in accordance with their terms. All items
which are required by GAAP to be reflected as accounts and notes receivable on
the Financial Statements of WARP and on the books of WARP are so reflected.
4.23 Absence of Certain Business Practices. Neither WARP nor the WARP
Insiders, to the Knowledge of each, has with respect to the business or
activities of WARP: (a) received, directly or indirectly, any rebates, payments,
commissions, promotional allowances or any other economic benefits, regardless
of their nature or type, from any customer, supplier, trading company, shipping
company, governmental employee or other Person with whom WARP has done business
directly or indirectly; or (b) directly or indirectly, given or agreed to give
any gift or similar benefit to any customer, supplier, trading company, shipping
company, governmental
21
employee or other Person who is or may be in a position to help or hinder the
business of WARP (or assist WARP in connection with any actual or proposed
transaction) which (i) may subject WARP to any material damage or any penalty in
any civil, criminal or governmental litigation or proceeding, (ii) if not given
in the past, may have had a Material Adverse Effect on the assets, business or
operations of WARP as reflected in the Financial Statements of WARP or (iii) if
not continued in the future, may materially adversely affect the assets,
business or operations of WARP or subject WARP to suit or penalty in any private
or governmental litigation or proceeding.
4.24 Disclosure. No representation or warranty of WARP or the WARP Insiders
contained in this Agreement, and no statement, report, or certificate furnished
by or on behalf of WARP or the WARP Insiders to AMI or its agents pursuant
hereto or in connection with the transactions contemplated hereby, contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained herein or therein not misleading or
omits or will omit to state a material fact necessary in order to provide AMI
with full and proper information as to the business, financial condition,
assets, results of operation or prospects of WARP and the value of its
properties or the ownership or operation of WARP.
Representations and Warranties of Sellers
In order to induce AMI and the AMI Insiders to enter into this Agreement
and to consummate the transactions contemplated hereby, each of the Sellers,
severally and not jointly and only as to itself, makes the representations and
warranties set forth below to AMI and the AMI Insiders.
4.25 Title to Securities. Such Seller is the record and beneficial owner of
the WARP Stock listed opposite its name on Schedule A, and, such shares of WARP
Stock are owned free and clear of any liens, encumbrances, pledges, security
interests and claims whatsoever, including, without limitation, claims or rights
under any voting trust agreements, shareholder agreements or other agreements,
excluding WARP's December 16, 1999 Stock Agreement.
4.26 Authority. Such Seller has full right, power and authority to enter
into this Agreement.
4.27 Knowledge and Experience. Such Seller, individually and/or together
with its professional advisors, has evaluated the merits and risks of acquiring
the Consideration Shares, and has such knowledge and experience in financial,
tax and business matters, including substantial experience in evaluating
financial statements and investing in securities (including the securities of
new and speculative companies) so as to enable such Seller to evaluate the
information made available by AMI, the AMI Insiders, WARP and the WARP Insiders
to such Seller in order to evaluate the merits and risks of acquiring the
Consideration Shares and to make an informed decision with respect to such
Seller's execution of this Agreement.
4.28 Accredited Investor; Financial Means. Such Seller represents and
warrants that it is an "accredited investor" as that term is defined in Rule
501(a) of Regulation D promulgated under the Securities Act. Such Seller has
adequate means of providing for its current financial needs and contingencies,
is able to bear the substantial economic risks of an investment relating to
22
receipt of the Consideration Shares for an indefinite period of time, has no
need for liquidity in such investment and, at the present time, could afford a
compete loss of such investment.
4.29 Opportunity to Question; Adequate Information. Such Seller has had the
opportunity to ask questions of AMI, the AMI Insiders and WARP and their
appropriate executive officers and has, to the extent desired by such Seller,
received answers and additional information from them which was necessary to
evaluate the merits and risks of acquiring the Consideration Shares pursuant to
this Agreement.
4.30 Risks Relating to Exchange. Such Seller understands the risks
associated with the acquisition of the Consideration Shares. Further, such
Seller has carefully read and considered the matters set forth herein and has
taken full cognizance of and understands the terms of this Agreement.
4.31 Investment Intent. Such Seller is acquiring the Consideration Shares
solely for investment purposes for its own account and not with a view to, or
for, resale in connection with any distribution thereof. Such Seller understands
that the issuance by AMI of the Consideration Shares hereunder has not been
registered under the Securities Act by reason of their contemplated issuance in
a transaction exempt from the registration and prospectus delivery requirements
of the Securities Act and that the reliance of AMI on such exemption from
registration is predicated in part on the representations and warranties of the
Seller set forth in this Agreement. Such Seller acknowledges that a restrictive
legend consistent with the foregoing will be placed on the certificates
representing the Consideration Shares.
4.32 Resale of the Securities. Such Seller understands that the
Consideration Shares received pursuant to this Agreement may not be transferred,
encumbered, sold, hypothecated, or otherwise disposed of unless such transfer or
other disposition has been registered under the Securities Act or, in the
opinion of counsel reasonably satisfactory to AMI, is exempt from registration
under the Securities Act, and has been registered or qualified or, in the
opinion of such counsel, is exempt from registration or qualification under
applicable state securities laws. Such Seller understands that AMI and WARP are
under no obligation to register or seek an exemption under the federal
securities laws, state securities laws, or any foreign securities laws or to
cause or permit such Consideration Shares to be transferred in the absence of
any such registration or exemption.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Survival of the Representations and Warranties. The representations and
warranties contained in Sections 3.1, 3.2, 3.12, 3.13, 4.1, 4.2, 4.11, 4.12, and
4.25 and the covenants in Section 7.1 shall survive the Closing and remain in
effect indefinitely. The representations and warranties contained in Section
3.23 (relating to environmental matters), shall survive the Closing until the
expiration of three (3) years from the Closing Date. The representations and
warranties contained in Section 3.20 (relating to taxes), shall survive the
Closing until the later of the expiration of twenty four months from the Closing
Date or the expiration of the last day of the statute of limitations applicable
to any action against AMI based
23
upon the non-payment of taxes, or other violation of the Code, which occurred
prior to the Closing Date. Except as set forth above, the representations and
warranties and covenants of AMI, the AMI Insiders, WARP, the WARP Insiders and
the Sellers contained in this Agreement shall survive the Closing until the
expiration of twenty-four months from the Closing Date. No claim for indemnity
with respect to breaches of representations and warranties may be brought by any
party hereto, other than a claim for fraud or intentional misrepresentation,
after expiration of the applicable survival period therefore as set forth in
this Section 5.1
5.2 Investigation. The representations, warranties, covenants and
agreements set forth in this Agreement shall not be affected or diminished in
any way by any investigation (or failure to investigate) at any time by or on
behalf of the party for whose benefit such representations, warranties,
covenants and agreements were made. All statements contained herein or in any
schedule, certificate, exhibit, list or other document required to be delivered
pursuant hereto, shall be deemed to be representations and warranties for
purposes of this Agreement; provided, that any knowledge or materiality
qualifications contained herein shall be applicable to such other documents.
5.3 Indemnification. Each of the AMI Insiders and AMI, jointly and
severally agrees to indemnify and hold harmless each of the WARP Insiders, WARP,
their affiliates, each of their officers, directors, employees and agents and
their respective successors and assigns and the Sellers and each of their
officers, directors, employees and agents and their respective successors and
assigns, from and against any losses, damages, costs or expenses (including
reasonable legal fees and expenses) which are caused by or arise out of (i) any
breach or default in the performance by any of the AMI Insiders or AMI of any
covenant or agreement made by any of the AMI Insiders or AMI in this Agreement;
(ii) any breach of warranty or representation made by any of the AMI Insiders or
AMI in this Agreement; and (iii) any and all Litigations incident to any of the
foregoing. WARP and the WARP Insiders agree to indemnify and hold harmless each
of the AMI Insiders and AMI, their affiliates, each of their officers,
directors, employees and agents and their respective successors and assigns,
from and against any losses, damages, or expenses which are caused by or arise
out of (i) any breach or default in the performance by any of the WARP Insiders,
WARP or the Sellers of any covenant or agreement made by any of the WARP
Insiders, WARP or the Sellers in this Agreement; (ii) any breach of warranty or
representation made by any of the WARP Insiders, WARP or the Sellers in this
Agreement; and (iii) any and all Litigations incident to any of the foregoing.
WARP and the WARP Insiders agree to indemnify and hold harmless each of the
Sellers, and each of their officers, directors, employees and agents and their
respective successors and assigns, from and against any losses, damages, costs
or expenses (including reasonable legal fees and expenses) which are caused by
or arise out of: (i) any breach or default in the performance by any of the WARP
Insiders or WARP of any covenant or agreement made by any of the WARP Insiders
or WARP in this Agreement; (ii) any breach of warranty or representation made by
any of the WARP Insiders or WARP in this Agreement; and (iii) any and all
Litigations incident to any of the foregoing. No party to this Agreement shall
be entitled to indemnification from any of the Sellers pursuant to Section 5.3
hereto or any other provision of this Agreement or of the Purchaser Documents.
24
5.4 Indemnity Procedure. A party or parties hereto agreeing to be
responsible for or to indemnify against any matter pursuant to this Agreement is
referred to herein as the "Indemnifying Party" and the other party or parties
claiming indemnity is referred to as the "Indemnified Party".
(a) An Indemnified Party under this Agreement shall, with respect to claims
asserted against such party by any third party, give written notice to the
Indemnifying Party of any liability which might give rise to a claim for
indemnity under this Agreement within sixty (60) business days of the receipt of
any written claim from any such third party, but not later than twenty (20) days
prior to the date any answer or responsive pleading is due, and with respect to
other matters for which the Indemnified Party may seek indemnification, give
prompt written notice to the Indemnifying Party of any liability which might
give rise to a claim for indemnity; provided, however, that any failure to give
such notice will not waive any rights of the Indemnified Party except to the
extent the rights of the Indemnifying Party are materially prejudiced.
(b) The Indemnifying Party shall have the right, at its election, to take
over the defense or settlement of such claim by giving written notice to the
Indemnified Party at least fifteen (15) days prior to the time when an answer or
other responsive pleading or notice with respect thereto is required. If the
Indemnifying Party makes such election, it may conduct the defense of such claim
through counsel of its choosing (subject to the Indemnified Party's approval of
such counsel, which approval shall not be unreasonably withheld), shall be
solely responsible for the expenses of such defense and shall be bound by the
results of its defense or settlement of the claim. The Indemnifying Party shall
not settle any such claim without prior notice to and consultation with the
Indemnified Party, and no such settlement involving any equitable relief or
which might have an adverse effect on the Indemnified Party may be agreed to
without the written consent of the Indemnified Party (which consent shall not be
unreasonably withheld). So long as the Indemnifying Party is diligently
contesting any such claim in good faith, the Indemnified Party may pay or settle
such claim only at its own expense and the Indemnifying Party will not be
responsible for the fees of separate legal counsel to the Indemnified Party,
unless the named parties to any proceeding include both parties and
representation of both parties by the same counsel would be inappropriate. If
the Indemnifying Party does not make such election, or having made such election
does not, in the reasonable opinion of the Indemnified Party proceed diligently
to defend such claim, then the Indemnified Party may (after written notice to
the Indemnifying Party), at the expense of the Indemnifying Party, elect to take
over the defense of and proceed to handle such claim in its discretion and the
Indemnifying Party shall be bound by any defense or settlement that the
Indemnified Party may make in good faith with respect to such claim. In
connection therewith, the Indemnifying Party will fully cooperate with the
Indemnified Party should the Indemnified Party elect to take over the defense of
any such claim.
(c) The parties agree to cooperate in defending such third party claims and
the Indemnified Party shall provide such cooperation and such access to its
books, records and properties as the Indemnifying Party shall reasonably request
with respect to any matter for which indemnification is sought hereunder; and
the parties hereto agree to cooperate with each other in order to ensure the
proper and adequate defense thereof.
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(d) With regard to claims of third parties for which indemnification is
payable hereunder, such indemnification shall be paid by the Indemnifying Party
upon the earlier to occur of: (i) the entry of a judgment against the
Indemnified Party and the expiration of any applicable appeal period, or if
earlier, five (5) days prior to the date that the judgment creditor has the
right to execute the judgment; (ii) the entry of an unappealable judgment or
final appellate decision against the Indemnified Party; or (iii) a settlement of
the claim. Notwithstanding the foregoing, provided that there is no dispute as
to the applicability of indemnification, the reasonable expenses of counsel to
the Indemnified Party shall be reimbursed on a current basis by the Indemnifying
Party if such expenses are a liability of the Indemnifying Party. With regard to
other claims for which indemnification is payable hereunder, such
indemnification shall be paid promptly by the Indemnifying Party upon demand by
the Indemnified Party.
5.5 General Release. As additional consideration for the sale of the [WARP
Stock] pursuant to this Agreement, each of the AMI Insiders hereby
unconditionally and irrevocably releases and forever discharges, effective as of
the Closing Date, AMI and its officers, directors, employees and agents, from
any and all rights, claims, demands, judgments, obligations, liabilities and
damages, whether accrued or unaccrued, asserted or unasserted, and whether known
or unknown, relating to AMI which ever existed or now exist, by reason of any
tort, breach of contract, violation of law or other act or failure to act which
shall have occurred at or prior to the Closing Date, or in relation to any other
liabilities of AMI to the AMI Insiders. The AMI Insiders expressly intend that
the foregoing release shall be effective regardless of whether the basis for any
claim or right hereby released shall have been known to or anticipated by the
AMI Insiders. Notwithstanding the foregoing or anything else to the contrary
contained herein, the foregoing provisions of this Section 5.5 shall not apply
to claims against WARP for indemnification pursuant to this Article V to the
extent applicable.
ARTICLE VI
CLOSING; DELIVERIES; CONDITIONS PRECEDENT
6.1 Closing; Effective Date. All proceedings taken and all documents
executed at the Closing shall be deemed to have been taken, delivered and
executed simultaneously, and no proceeding shall be deemed taken nor documents
deemed executed or delivered until all have been taken, delivered and executed.
6.2 Deliveries
(a) At Closing, AMI shall deliver the following documents to WARP:
(i) the certificates representing the Consideration Shares;
(ii) the written resignation of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ from all of his
positions as an AMI director and officer, and the written resignation of
▇▇▇▇▇ ▇▇▇▇▇▇▇ from all of his positions as an AMI officer, all to be
effective upon Closing;
26
(iii) the minute books of AMI, including its corporate seals, unissued
stock certificates, stock registers, Articles of Incorporation, Bylaws and
corporate minutes approving the terms and conditions of this Agreement and
the other documents contemplated hereby and the transactions contemplated
hereby and thereby;
(iv) certificates issued by the Secretary of State of Nevada as to the
good standing of AMI in its jurisdiction of incorporation and certifying
its Articles of Incorporation;
(v) the consents of any third party including, but not limited to,
parties to any of the Material Agreements whose consent is required under
the terms of any such Material Agreement or otherwise;
(vi) the certificates referred to in Section 6.3(d);
(vii) the favorable opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq., counsel to AMI,
dated the Closing Date, addressed to WARP and each of the Sellers, in the
form of Exhibit C hereto;
(viii) such other documents and instruments as WARP or any of the
Sellers may reasonably request.
(b) At Closing, WARP shall deliver the following documents to AMI:
(i) the Certificates of WARP Stock to be delivered to AMI;
(ii) a certificate of the Secretary of State of the State of Delaware,
as of a recent date, as to the good standing of WARP and certifying its
Certificate of Incorporation;
(iii) a certificate, dated the Closing Date, of an officer of WARP
setting forth that authorizing resolutions were adopted by WARP's Boards of
Directors, approving the terms and conditions of this Agreement and the
other documents contemplated hereby and the transactions contemplated
hereby and thereby;
(iv) the certificates referred to in Section 6.4(d);
(v) the favorable opinion of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq., counsel to
WARP, dated the Closing Date, addressed to AMI, in the form of Exhibit D
hereto, and
(vi) such other documents and instruments as AMI may reasonably
request.
6.3 Conditions Precedent to the Obligations of WARP and Each of the
Sellers. Each and every obligation of WARP and each of the Sellers to consummate
the transactions described in this Agreement and any and all liability of WARP
or the WARP Insiders to AMI shall be subject to the fulfillment on or before the
Closing Date of the following conditions precedent:
27
(a) Representations and Warranties True. Each of the representations and
warranties of AMI and the AMI Insiders contained herein or in any certificate or
other document delivered pursuant to this Agreement or in connection with the
transactions contemplated hereby shall be true and correct in all material
respects as of the Closing Date with the same force and effect as though made on
and as of such date.
(b) Performance. AMI and the AMI Insiders shall have performed and complied
in all material respects with all of the agreements, covenants and obligations
required under this Agreement to be performed or complied with by them on or
prior to the Closing Date.
(c) No Material Adverse Change. Except as expressly permitted or
contemplated by this Agreement, no event or condition shall have occurred which
has adversely affected or may adversely affect in any respect the condition
(financial or otherwise) of AMI.
(d) AMI's Certificate. AMI shall have delivered to WARP and each of the
Sellers a certificate dated the Closing Date, certifying that the conditions
specified in Section 6.3(a), (b) and (c) above have been fulfilled and as to
such other matters as WARP or any Seller may reasonably request.
(e) No Litigation. No litigation, arbitration or other legal or
administrative proceeding shall have been commenced or be pending by or before
any court, arbitration panel or governmental authority or official, and no
statute, rule or regulation of any foreign or domestic, national or local
government or agency thereof shall have been enacted after the date of this
Agreement, and no judicial or administrative decision shall have been rendered
which enjoins or prohibits, or seeks to enjoin or prohibit, the consummation of
all or any of the transactions contemplated by this Agreement.
(f) Cancellation of Shares. The six million two hundred and fifty thousand
(6,250,000) shares of AMI Common Stock owned by ▇▇▇▇▇ ▇▇▇▇▇▇▇ and the six
million two hundred and fifty thousand (6,250,000) shares of AMI Common Stock
owned by ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ shall have been tendered to AMI for cancellation
without consideration at or prior to the Closing, and such shares shall have
been cancelled and added back to the authorized but unissued common stock of
AMI.
(g) Appointment. Messrs. ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇ shall have been
appointed to the Board of Directors of AMI effective at the Closing.
(h) Consents. AMI shall have obtained all authorizations, consents, waivers
and approvals as may be required to consummate the transactions contemplated by
this Agreement including, but not limited to, those with respect to any Material
AMI Agreement.
(i) Due Diligence Review. WARP and the Sellers shall have completed their
due diligence investigation of AMI and the AMI Insiders to their satisfaction,
in their sole and absolute discretion.
28
(j) Opinion of Counsel. AMI shall have obtained an opinion letter from
counsel to AMI addressed to WARP in form and substance reasonably acceptable to
WARP and the Sellers, and such opinion shall not have been withdrawn.
(k) Funds in Escrow. A minimum of Two Million Five Hundred Thousand Dollars
($2,500,000) shall be in an escrow account at ▇▇ ▇▇▇▇▇▇ Chase, or another bank,
subject to an escrow agreement which releases such funds to the post-Transaction
AMI, for use as dictated by that certain Term Sheet dated April 15, 2002, upon
the Closing of the Transaction contemplated by this Agreement.
(l) Signatures of Sellers. Sellers representing a minimum of eighty percent
(80%) of the WARP Stock issued and outstanding at the Closing Date shall have
executed this Agreement.
6.4 Conditions Precedent to the Obligations of AMI. Each and every
obligation of AMI to consummate the transactions described in this Agreement and
any and all liability of AMI or the AMI Insiders to WARP, the WARP Insiders and
the Sellers shall be subject to the fulfillment on or before the Closing Date of
the following conditions precedent:
(a) Representations and Warranties True. Each of the representations and
warranties of WARP and the WARP Insiders contained herein or in any certificate
or other document delivered pursuant to this Agreement or in connection with the
transactions contemplated hereby shall be true and correct in all material
respects as of the Closing Date with the same force and effect as though made on
and as of such date.
(b) Performance. WARP and the WARP Insiders shall have performed and
complied in all material respects with all of the agreements, covenants and
obligations required under this Agreement to be performed or complied with by it
on or prior to the Closing Date.
(c) No Material Adverse Change. Except as expressly permitted or
contemplated by this Agreement, no event or condition shall have occurred which
has adversely affected or may adversely affect in any respect the condition
(financial or otherwise) of WARP.
(d) WARP's Certificate. WARP shall have delivered to AMI, a certificate
addressed to AMI executed by WARP's Chief Executive Officer, dated the Closing
Date, certifying that the conditions specified in Sections 6.4(a), (b) and (c)
above have been fulfilled.
(e) No Litigation. No litigation, arbitration or other legal or
administrative proceeding shall have been commenced or be pending by or before
any court, arbitration panel or governmental authority or official, and no
statute, rule or regulation of any foreign or domestic, national or local
government or agency thereof shall have been enacted after the date of this
Agreement, and no judicial or administrative decision shall have been rendered
which enjoins or prohibits, or seeks to enjoin or prohibit, the consummation of
all or any of the transactions contemplated by this Agreement.
(f) Consents. WARP shall have obtained all authorizations, consents,
waivers and approvals as may be required to consummate the transactions
contemplated by this
29
Agreement, including but not limited to, those with respect to any Material
Agreement of WARP.
(g) Opinion of Counsel. WARP shall have obtained an opinion letter from
counsel to WARP addressed to AMI in form and substance reasonably acceptable to
AMI, and such opinion shall not have been withdrawn.
(h) Funds in Escrow. A minimum of Two Million Five Hundred Thousand Dollars
($2,500,000) shall be in an escrow account at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, or another bank,
subject to an escrow agreement which releases such funds to the post-Transaction
AMI, for use as dictated by that certain Term Sheet dated April 15, 2002, upon
the Closing of the Transaction contemplated by this Agreement.
(i) Signatures of Sellers. Sellers representing a minimum of eighty percent
(80%) of the WARP Stock issued and outstanding at the Closing Date shall have
executed this Agreement.
6.5 Best Efforts. Subject to the terms and conditions provided in this
Agreement, each of the parties, excluding the Sellers, shall use their
respective best efforts in good faith to take or cause to be taken as promptly
as practicable all reasonable actions that are within its power to cause to be
fulfilled those of the conditions precedent to its obligations or the
obligations of the other parties to consummate the transactions contemplated by
this Agreement that are dependent upon its actions, including obtaining all
necessary consents, authorizations, orders, approvals and waivers.
6.6 Termination. This Agreement and the transactions contemplated hereby
may be terminated (i) at any time by the mutual consent of the parties hereto;
(ii) by WARP, or by AMI, if the Closing has not occurred on or prior to July 31,
2002 (such date of termination being referred to herein as the "Termination
Date"), provided the failure of the Closing to occur by such date is not the
result of the failure of the party seeking to terminate this Agreement to
perform or fulfill any of its obligations hereunder; (iii) by WARP or (upon the
vote of a majority thereof) the Sellers at any time at or prior to Closing in
their sole discretion if (1) any of the representations or warranties of AMI or
the AMI Insiders in this Agreement are not in all material respects true,
accurate and complete or if AMI or the AMI Insiders breach in any material
respect any covenant contained in this Agreement, provided that such
misrepresentation or breaches is not cured within ten (10) business days after
notice thereof, but in any event prior to the Termination Date or (2) any of the
conditions precedent to WARP's obligations to conduct the Closing have not been
satisfied by the date required thereof; (iv) by AMI at any time at or prior to
Closing in its sole discretion if (1) any of the representations or warranties
of WARP, the WARP Insiders or the Sellers in this Agreement are not in all
material respects true, accurate and complete or if WARP or the WARP Insiders
breach in any material respect any covenant contained in this Agreement,
provided that such misrepresentation or breach is not cured within ten (10)
business days after notice thereof, but in any event prior to the Termination
Date or (2) any of the conditions precedent to WARP's obligations to conduct the
Closing have not been satisfied by the date required thereof. If this Agreement
is terminated pursuant to this Section 6.6, written notice thereof shall
promptly be given by the party electing such termination to the other party and,
subject to the expiration of the cure periods provided in clauses (iii) and (iv)
30
above, if any, this Agreement shall terminate without further actions by the
parties and no party shall have any further obligations under this Agreement.
Notwithstanding the preceding sentence, the respective obligations of the
parties under Sections 7.1 shall survive the termination of this Agreement.
Notwithstanding anything to the contrary contained herein, if the termination of
this Agreement is a result of the willful misrepresentation, willful inaccuracy
or omission in a representation, willful breach of warranty, fraud or any
willful failure to perform or comply with any covenant or agreement contained
herein, the aggrieved party shall be entitled to recover from the non-performing
party all out-of-pocket expenses which such aggrieved party has incurred and the
termination of this Agreement shall not be deemed or construed as limiting or
denying any other legal or equitable right or remedy of such party.
ARTICLE VII
COVENANTS
7.1 General Confidentiality. The AMI Insiders and AMI acknowledge that the
Intellectual Property and all other confidential or proprietary information with
respect to the business and operations of WARP are valuable, special and unique
assets of WARP. The AMI Insiders, severally and not jointly, and AMI shall not,
at any time after the Closing Date, disclose, directly or indirectly, to any
Person, or use or purport to authorize any Person to use any confidential or
proprietary information with respect to WARP, whether or not for an AMI
Insider's or AMI's own benefit, without the prior written consent of WARP or
unless required by law, including without limitation, (i) trade secrets,
designs, formulae, drawings, Intellectual Property, diagrams, techniques,
research and development, specifications, data, know-how, formats, marketing
plans, business plans, budgets, strategies, forecasts and client data; (ii)
information relating to the products developed by WARP, (iii) the names of
WARP's customers and contacts, WARP's marketing strategies, the names of their
vendors and suppliers, the cost of materials and labor, the prices obtained for
products or services sold (including the methods used in price determination,
manufacturing and sales costs), lists or other written records used in WARP's
business, compensation paid to employees and consultants and other terms of
employment, production operation techniques or any other confidential
information of, about or pertaining to the business of WARP, and any other
information and material relating to any customer, vendor, licensor, licensee,
or other party transacting business with WARP, (iv) all tangible material that
embodies any confidential and proprietary information as well as all records,
files, memoranda, reports, price lists, drawings, plans, sketches and other
written and graphic records, documents, equipment, and the like, relating to the
business of WARP, and (vi) any other confidential information or trade secrets
relating to the business or affairs of WARP which the AMI Insiders or AMI may
acquire or develop in connection with or as a result of the performance of his
or its performance of the terms and conditions of this Agreement, excepting only
such information as is already known to the public or which may become known to
the public without any fault of the AMI Insiders or AMI or in violation of any
confidentiality restrictions; provided, however, that the restrictions of this
Section 7.1 shall not be applicable to any AMI Insider or AMI in connection with
such Parties' enforcement of its rights under this Agreement. The AMI Insiders
and AMI acknowledge that WARP would not enter into this Agreement without the
assurance that all such confidential and proprietary information will be used
for the exclusive benefit of WARP.
31
7.2 Continuing Obligations. The restrictions set forth in Sections 7.1 are
considered by the parties to be reasonable for the purposes of protecting the
value of the business and goodwill of WARP. The AMI Insiders, AMI and WARP
acknowledge that WARP would be irreparably harmed and that monetary damages
would not provide an adequate remedy to WARP in the event the covenants
contained in Section 7.1 were not complied with in accordance with their terms.
Accordingly, AMI Insiders and AMI agree that any breach or threatened breach by
any of them of any provision of Section 7.1 shall entitle WARP to injunctive and
other equitable relief to secure the enforcement of these provisions, in
addition to any other remedies (including damages) which may be available to
WARP. It is the desire and intent of the parties that the provisions of Section
7.1 be enforced to the fullest extent permissible under the laws and public
policies of each jurisdiction in which enforcement is sought. If any provision
of Section 7.1 are adjudicated to be invalid or unenforceable, the invalid or
unenforceable provisions shall be deemed amended (with respect only to the
jurisdiction in which such adjudication is made) in such manner as to render
them enforceable and to effectuate as nearly as possible the original intentions
and agreement of the parties. In addition, if any party brings an action to
enforce Section 7.1 hereof or to obtain damages for a breach thereof, the
prevailing party in such action shall be entitled to recover from the
non-prevailing party all reasonable attorney's fees and expenses incurred by the
prevailing party in such action.
7.3 SEC Filings and Exchange Listing. WARP and the WARP Insiders
acknowledge that AMI has a continuing interest in maintaining its compliance
with the reporting requirements of the Securities Exchange Act of 1934 (the
"Exchange Act") and in maintaining a public trading market for AMI's common
stock on the National Association of Securities Dealers, Inc. Bulletin Board, or
some other United States exchange. WARP and the WARP Insiders therefore agree,
for a period of three (3) years from the Closing Date, to use their best efforts
to file all periodic, current, and other, applicable reports and filings
required by the Exchange Act in a timely manner, including without limitation, a
Current Report on Form 8-K reporting the Closing and details of the Transaction
and the consolidated financial statements resulting therefrom. WARP and the WARP
Insiders further agree, for a period of three (3) years from the Closing Date,
to use their best efforts to maintain a public market for AMI's common stock on
the Bulletin Board, or such other United States exchange chosen by AMI after the
Closing in its sole discretion.
7.4 Lock-Up Agreements. The WARP Insiders hereby covenant and agree to
execute and be bound by the terms of certain Lock-Up Agreements on the exact
terms as contained in the form of such agreements attached hereto as Exhibit E
and to not amend, change or modify the terms of such agreements during their
term or otherwise seek to circumvent the purpose of such agreements without the
prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ and the other parties
thereto. The WARP Insiders agree that the provisions of this section shall
survive the Closing of the Transaction until the expiration of the term of such
Lock-Up Agreements.
7.5 Tax Treatment. Neither AMI, the AMI Insiders, WARP, the WARP Insiders
nor the Sellers will knowingly take any action, written or otherwise, which
would result in the transactions contemplated by this Agreement not being
accounted for as a tax-free exchange pursuant to Section 368(a)(1)(B) of the
Code.
32
ARTICLE VIII
MISCELLANEOUS
8.1 Notices. Any notice, demand, claim or other communication under this
Agreement shall be in writing and delivered personally or sent by certified
mail, return receipt requested, postage prepaid, or sent by facsimile or prepaid
overnight courier to the parties at the addresses as follows (or at such other
addresses as shall be specified by the parties by like notice):
If to AMI: ▇▇▇▇▇▇ Mines, Ltd.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
If to AMI Insiders: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to WARP
or WARP Insiders: WARP Solutions, Inc.
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. 10001
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇ or ▇▇▇▇ ▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (Phone)
(▇▇▇) ▇▇▇-▇▇▇▇ (Fax)
With a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (Phone)
(▇▇▇) ▇▇▇-▇▇▇▇ (Fax)
33
If to Sellers: To address as shown on Schedule A
attached hereto.
Such notice shall be deemed delivered upon receipt against acknowledgment
thereof if delivered personally, on the third business day following mailing if
sent by certified mail, upon transmission against confirmation if sent by
facsimile and on the next business day if sent by overnight courier.
8.2 Entire Agreement; Incorporation. This Agreement and the documents and
instruments and other agreements among the parties hereto as contemplated by or
referred to herein contain every obligation and understanding between the
parties relating to the subject matter hereof and merges all prior discussions,
negotiations, agreements and understandings, both written and oral, if any,
between them, and none of the parties shall be bound by any conditions,
definitions, understandings, warranties or representations other than as
expressly provided or referred to herein. All schedules, exhibits and other
documents and agreements executed and delivered pursuant hereto are incorporated
herein as if set forth in their entirety herein.
8.3 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, heirs, personal
representatives, legal representatives, and permitted assigns.
8.4 Assignment. This Agreement may not be assigned by any party without the
written prior consent of the other parties. Subject to the preceding sentence,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
8.5 Waiver and Amendment. Any representation, warranty, covenant, term or
condition of this Agreement which may legally be waived, may be waived, or the
time of performance thereof extended, at any time by the party hereto entitled
to the benefit thereof, and any term, condition or covenant hereof (including,
without limitation, the period during which any condition is to be satisfied or
any obligation performed) may be amended by the parties thereto at any time. Any
such waiver, extension or amendment shall be evidenced by an instrument in
writing executed on behalf of the party against whom such waiver, extension or
amendment is sought to be charged. No waiver by any party hereto, whether
express or implied, of its rights under any provision of this Agreement shall
constitute a waiver of such party's rights under such provisions at any other
time or a waiver of such party's rights under any other provision of this
Agreement. No failure by any party thereof to take any action against any breach
of this Agreement or default by another party shall constitute a waiver of the
former party's right to enforce any provision of this Agreement or to take
action against such breach or default or any subsequent breach or default by
such other party.
8.6 No Third Party Beneficiary. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any Person
other than the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and permitted assigns, any
rights or remedies under or by reason of this Agreement, except as otherwise
provided herein.
34
8.7 Severability. In the event that any one or more of the provisions
contained in this Agreement, or the application thereof, shall be declared
invalid, void or unenforceable by a court of competent jurisdiction, the
remainder of this Agreement shall remain in full force and effect and the
application of such provision to other Persons or circumstances will be
interpreted so as reasonably to effect the intent of the parties hereto. The
parties further agree to replace such invalid, void or unenforceable provision
with a valid and enforceable provision that will achieve, to the extent
possible, the economic, business and other purposes of such invalid, void or
unenforceable provision.
8.8 Expenses. Except as otherwise provided herein, each party agrees to
pay, without right of reimbursement from the other party, the costs incurred by
it incident to the performance of its obligations under this Agreement and the
consummation of the transactions contemplated hereby, including, without
limitation, costs incident to the preparation of this Agreement, and the fees
and disbursements of counsel, accountants and consultants employed by such party
in connection herewith.
8.9 Headings. The table of contents and the section and other headings
contained in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of any provisions of this Agreement.
8.10 Other Remedies; Injunctive Relief. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity. In any action at law or suit in equity to enforce this Agreement or the
rights of the parties hereunder, the prevailing party in any such action or suit
shall be entitled to receive a reasonable sum for its attorneys' fees and all
other reasonable costs and expenses incurred in such action or suit.
8.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Facsimile signatures
shall be deemed valid and binding.
8.12 Remedies Exclusive. Except in the case of fraud or equitable remedies
expressly provided for herein, the parties acknowledge and agree that the
indemnification provisions set forth in Article V of this Agreement constitute
the parties' sole and exclusive remedy with respect to any and all claims
relating to the transactions contemplated by this Agreement.
8.13 Governing Law. This Agreement has been entered into and shall be
construed and enforced in accordance with the laws of the State of New York,
without reference to the choice of law principles thereof.
35
8.14 Jurisdiction and Venue. This Agreement shall be subject to the
exclusive jurisdiction of the courts of New York County, New York. The parties
to this Agreement agree that any breach of any term or condition of this
Agreement shall be deemed to be a breach occurring in the State of New York by
virtue of a failure to perform an act required to be performed in the State of
New York and irrevocably and expressly agree to submit to the jurisdiction of
the courts of the State of New York for the purpose of resolving any disputes
among the parties relating to this Agreement or the transactions contemplated
hereby. The parties irrevocably waive, to the fullest extent permitted by law,
any objection which they may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement, or any
judgment entered by any court in respect hereof brought in New York County, New
York, and further irrevocably waive any claim that any suit, action or
proceeding brought in New York County, New York has been brought in an
inconvenient forum.
8.15 Participation of Parties. The parties hereby agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding, or rule
of construction providing that ambiguities in an agreement or other document
will be construed against the party drafting such agreement or document. 8.16
Further Assurances. The parties hereto shall deliver any and all other
instruments or documents reasonably required to be delivered pursuant to, or
necessary or proper in order to give effect to, all of the terms and provisions
of this Agreement including, without limitation, all necessary stock powers and
such other instruments of transfer as may be necessary or desirable to transfer
ownership of the WARP Common Stock.
8.17 Publicity. No public announcement or other publicity concerning this
Agreement or the transactions contemplated hereby shall be made without the
prior written consent of both WARP and AMI as to form, content, timing and
manner of distribution. Nothing contained herein shall prevent any party or its
Affiliates or Subsidiaries from making any filing required by federal or state
securities laws or stock exchange rules.
8.18 Limited Recourse. Notwithstanding anything in this Agreement or any of
the Purchaser Documents to the contrary, the obligations of each of the Sellers
hereunder and under any of the Purchaser Documents shall be without recourse to
any partner or Affiliate of any Seller or their respective partners, officers,
directors, employees or agents or to any other Sellers and shall be limited to
the Consideration Shares actually received by such Seller (or, if applicable,
the net proceeds received upon any sale thereof). The parties to this Agreement
agree that none of the Sellers can be held liable for any breaches of any of the
representations, warranties, covenants or agreements made by WARP or any other
Person pursuant to this Agreement or in connection herewith.
[Signature Page to Follow]
36
IN WITNESS WHEREOF, the parties hereto have each executed and delivered
this Agreement as of the day and year first above written.
▇▇▇▇▇▇ MINES, LTD
By:
------------------------------------
Name:
Title:
AMI INSIDERS
---------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
WARP SOLUTIONS, INC.
By:
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Executive Officer
WARP INSIDERS
---------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇ ▇▇▇▇
SELLERS
---------------------------------------
---------------------------------------
Schedule A to Share Exchange Agreement
--------------------------------------
▇▇▇▇▇▇▇ ▇. and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ JTWROS
▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
SS# ▇▇▇▇▇▇▇ ###-##-####
Jared ###-##-####
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SS# ###-##-####
R. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
SS# ###-##-####
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Securities Group Company
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▇▇▇▇▇▇ ▇▇▇▇▇ Tenants In Common
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SS#
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Small Company Growth
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1221 6 Avenue, 22nd Floor
New York, N.Y. 10020
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Investment Management
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Universal Funds, Inc.
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Institutional Fund, Inc.
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Caxton Equity Growth (BVI) Ltd.
C/o Prime Management Ltd.
Mechanics ▇▇▇▇.
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▇▇▇▇▇▇ Equity Growth LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Caxton International Ltd.
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▇▇▇▇▇▇▇ Management LLC
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▇▇▇▇▇▇▇▇ Partners II, LP
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇.▇. 11021
▇▇▇▇▇▇▇▇ Partners, LP
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Great Neck, N.Y. 11021
Wheatley Foreign Partners, LP
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇.▇. 11021
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