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This Merger Agreement (the "Agreement") is entered into this 6th day of
March, 1998, by and between MICROLYTICS, INC., a Delaware corporation
("Microlytics"), and SANTI GROUP, INC., a Delaware corporation ("SanTi").
WITNESSETH:
WHEREAS, the parties hereto desire to merge SanTi with and into Microlytics
(the "Merger") in accordance with the General Corporation Law of the State of
Delaware and pursuant to Microlytics' Plan of Reorganization in the United
States Bankruptcy Court, Western District of New York ("Bankruptcy Court");
NOW, THEREFORE, in consideration of the premises, covenants,
representations, warranties and agreements herein contained, the parties agree
as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER. On the Effective Date, SanTi and its wholly-owned
subsidiaries, shall be merged with and into Microlytics, the separate existence
of SanTi shall thereupon cease and all of the rights, privileges, powers,
franchises, properties and assets of SanTi shall be vested in Microlytics. All
wholly-owned subsidiaries of SanTi shall become wholly-owned subsidiaries of
Microlytics. The identity, existence, rights, privileges, powers, franchises,
properties and assets of Microlytics shall continue unaffected and unimpaired by
the Merger.
1.2 EFFECTIVE DATE OF THE MERGER. The Merger shall become effective on the
date of filing of an executed counterpart of this Agreement, together with a
duly executed Certificate pursuant to Section 251 of the Delaware General
Corporation Law, with the Secretary of State of Delaware and upon Confirmation
of the Plan of Reorganization by the Bankruptcy Court ("Effective Date").
1.3 FURTHER ASSURANCES. If at any time after the Effective Date but as a
result of actions taken by Microlytics or SanTi arising out of matters occurring
prior to the Effective Date of the Merger, Microlytics shall consider or be
advised that any deeds, bills of sale, assignments, assurances or any other
actions or things are necessary or desirable to vest, perfect or confirm of
record or otherwise in Microlytics its right, title or interest in, to or under
any of the rights, properties or assets of SanTi acquired or to be acquired by
Microlytics as a result of, or in connection with, the Merger or otherwise to
effectuate this Agreement, the officers and directors of Microlytics shall and
will be authorized to execute and deliver, in the name and on behalf of SanTi or
otherwise, all such deeds, bills of sale, assignments and assurances and to take
and do,
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in the name and on behalf of SanTi or otherwise, all such other actions and
things as may be necessary or desirable to vest, perfect or confirm any and all
right, title and interest in, to and under such rights, properties or assets in
Microlytics or otherwise to effectuate this Agreement.
ARTICLE II
ARTICLES OF INCORPORATION, DIRECTORS AND OFFICERS
OF THE SURVIVING CORPORATION
2.1 ARTICLES OF INCORPORATION; DIRECTORS AND OFFICERS. The Articles of
Incorporation of Microlytics in effect as of the Effective Date shall remain the
Articles of Incorporation of Microlytics, unless and until the same are altered,
amended or repealed. It is anticipated that restated Articles of Incorporation
for Microlytics be made a part of the Plan of Reorganization and the content of
said restated Articles be determined solely by Santi. The directors of
Microlytics immediately after the Effective Date shall be: ▇▇▇▇▇▇▇ ▇▇▇▇,
Chairman, Rock ▇▇▇▇▇, ▇▇▇▇▇ Bone, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
The board shall elect officers at the first board meeting following the
Effective Date. On the Effective Date, the corporate name shall be changed to
SanTi Group, Inc.
ARTICLE III
TERMS OF THE MERGER
3.1 CONVERSION OF MICROLYTICS STOCK. As of the Effective Date, by virtue of
the Merger, in accordance with the election of the SanTi shareholders but
without any other action on the part of any SanTi shareholder, each outstanding
share of Common Stock, $.0001 par value per share, of SanTi (the "SanTi Stock")
shall be converted into the right to receive 1 share of Common Stock, $.01 par
value per share, of Microlytics ("Microlytics Stock"). (These exchange ratios
are after a 400 to 1 reverse split of Microlytics Stock pursuant to the Plan or
Reorganization).
(a) All SanTi Common Shares that are held by SanTi as treasury shares
shall be cancelled and no shares of SanTi shall be delivered in exchange
therefor under this Agreement.
(b) Each outstanding SanTi common share shall be exchanged for 1 common
share of Microlytics, for an aggregate of approximately 5,125,879 Microlytics
Shares representing approximately 84.3% of the Microlytics Shares issued and
outstanding on the Effective Date. A pro forma capitalization schedule is
attached hereto as Exhibit A.
(c) All SanTi options and warrants existing on the Effective Date shall
by virtue of the Merger in accordance with the election of each SanTi
Optionholder (collectively the "SanTi Optionholders") be converted into an
option to receive Microlytics shares pursuant to the ratio specified in Section
3.1(b) above.
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3.2 SURRENDER OF SANTI COMMON SHARES. On the date hereof, each shareholder
of SanTi whose SanTi Stock is to be exchanged for Microlytics Stock pursuant to
Section 3.1(b), will surrender to Founders Equity Group, Inc. (the "Exchange
Agent") one or more certificates for such SanTi Stock for cancellation on the
Effective Date of the Merger, and upon such cancellation, each shareholder of
SanTi will receive from Microlytics or its transfer agent certificates
representing the number of shares of Microlytics Stock to be issued in respect
of the aggregate number of shares of SanTi Stock previously represented by the
share certificates surrendered. No dividends which might thereafter be declared
will be paid to persons entitled to receive certificates for Microlytics Stock
unless and until such persons surrender their certificates for SanTi Stock. In
no event shall the persons entitled to receive such dividends be entitled to
receive interest on such dividends. Notwithstanding the foregoing, neither the
Exchange Agent nor any party hereto shall be liable to a shareholder of SanTi
for any Microlytics Stock or dividend thereon delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
3.3 MICROLYTICS STOCK. Each share of Microlytics Common Stock which is
outstanding immediately prior to the Merger shall continue to remain outstanding
subject to the provisions of Section 3.1 above.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MICROLYTICS
Microlytics hereby represents and warrants to Microlytics and SanTi as
follows:
4.1 ORGANIZATION AND QUALIFICATION. Microlytics is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Microlytics has all requisite corporate power and authority to carry
on its business as it is now being conducted and to own or lease its properties
and assets. Microlytics is duly qualified or licensed to do business as a
foreign corporation in good standing in every jurisdiction where the failure to
be so qualified or licensed would have a material adverse effect on Microlytics
taken as a whole. Microlytics has heretofore delivered to SanTi complete and
correct copies of its Certificate of Incorporation each as amended and currently
in effect.
4.2 CAPITALIZATION. The authorized capital stock of Microlytics consists of
125,000,000 shares of Common Stock, $.01 par value per share. As of the date
hereof and after the 400 to 1 reverse split completed in the Plan or
Reorganization, 933,690 shares of Microlytics Stock are issued and outstanding.
No shares of Common Stock are held as treasury shares and other than 500,000
three year warrants exercisable at $2.50 issued pursuant to the Plan of
Reorganization, there are no options, warrants, derivative securities, rights or
calls related capital stock of Microlytics. The issued and outstanding shares of
Common Stock are validly issued, fully paid and non-assessable. Microlytics has
previously delivered to SanTi true, correct and complete
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copies of its stock record books, which stock record books accurately reflect
the record and beneficial ownership of the issued and outstanding shares of
Microlytics Stock.
4.3 AUTHORIZATION. Microlytics has all requisite corporate power to enter
into this Agreement and to carry out its obligations hereunder. Subject to the
approval by the Bankruptcy Court of this Agreement and the transactions
contemplated hereby, (a) the execution and delivery of this Agreement and the
due consummation by Microlytics of the transactions contemplated hereby, have
been duly and validly authorized by all necessary corporate action on the part
of Microlytics, and (b) this Agreement constitutes (and each other document and
instrument contemplated by this Agreement, when executed and delivered in
accordance with the provisions hereof, will constitute) a valid and legally
binding agreement of Microlytics enforceable in accordance with its terms.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇
▇▇▇▇▇ hereby represents and warrants to Microlytics as follows:
5.1 ORGANIZATION AND QUALIFICATION. SanTi is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
SanTi has all requisite corporate power and authority to carry on its business
as it is now being conducted and to own or lease its properties and assets.
SanTi is duly qualified or licensed to do business as a foreign corporation in
good standing in every jurisdiction where the failure to be so qualified or
licensed would have a material adverse effect on SanTi taken as a whole. SanTi
has heretofore delivered to Microlytics complete and correct copies of its
Certificate of Incorporation and By-Laws, each as amended and currently in
effect.
5.2 CAPITALIZATION. The authorized capital stock of SanTi consists of
100,000,000 shares of Common Stock, $.0001 par value per share. As of the date
hereof, approximately 5,125,000 shares of SanTi Stock are issued and
outstanding. No shares of SanTi Stock are held as treasury shares. The issued
and outstanding shares of SanTi Stock are validly issued, fully paid and
non-assessable. SanTi has previously delivered to Microlytics true, correct and
complete copies of its stock record books, which stock record books accurately
reflect the record and beneficial ownership of the issued and outstanding shares
of SanTi Stock. Except as set forth on Schedule B attached hereto, there is no
outstanding option, warrant, right, call, subscription or other agreement or
commitment which (a) calls for the issuance, sale, pledge or other disposition
of any shares of capital stock of SanTi or any securities convertible or
exchangeable into, or other rights to acquire, any shares of capital stock of
SanTi, (b) obligates SanTi to grant, offer or enter into any of the foregoing,
or (c) relates to the voting, transfer or control of such capital stock,
securities or rights.
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5.3 AUTHORIZATION. SanTi has all requisite corporate power to enter into
this Agreement and to carry out its obligations hereunder. Subject to the
approval by the SanTi Shareholders of this Agreement and the transactions
contemplated hereby, (a) the execution and delivery of this Agreement and the
due consummation by SanTi of the transactions contemplated hereby have been duly
and validly authorized by all necessary corporate action on the part of SanTi,
and (b) this Agreement constitutes (and each other document and instrument
contemplated by this Agreement, when executed and delivered in accordance with
the provisions hereof, will constitute) a valid and legally binding agreement of
SanTi enforceable in accordance with its terms, except (i) as such enforcement
may be limited by bankruptcy, reorganization, insolvency or other laws and court
decisions relating to or affecting the enforcement of creditors' rights
generally (including but not limited to statutory or other law regarding
fraudulent transfers), and (ii) as to the availability of specific performance
or other equitable remedies.
5.4 NO CONFLICTS. The execution, delivery and performance of this Agreement
by SanTi, and the consummation of the transactions contemplated hereby:
(a) will not constitute a conflict with, breach or violation of or
default (or an event which with notice or lapse of time or both would become a
default) under: (i) SanTi's Certificate of Incorporation or By-Laws, each as
amended to date, or (ii) any agreement, instrument, license, franchise or permit
to which SanTi is subject or by which SanTi is bound, (iii) any order, writ,
injunction or decree to which SanTi is subject or by which SanTi is bound; or
(iv) to the best of SanTi's knowledge, any law, rule or regulation to which
SanTi is subject;
(b) will not result in or give rise to an adverse claim against any
shares of SanTi Stock; and
(c) will not result in the creation of any lien, claim, charge or
encumbrance on the properties or assets of SanTi (other than resulting from this
Agreement);
5.5 APPROVAL OF SHAREHOLDERS. SanTi shall cause a meeting of its
shareholders to be duly called and held as soon as practicable following the
execution of this Agreement for the purpose of approving the Merger, this
Agreement and all actions contemplated hereby which require the approval of the
shareholders of SanTi. SanTi's Board of Directors will recommend to its
shareholders, consistent with its fiduciary duties, approval of the transactions
contemplated by this Agreement.
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ARTICLE VI
MISCELLANEOUS MERGER ITEMS
6.1 EXPENSES. Except as provided below, without regard to whether the
Merger is consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such expenses.
6.2 ADDITIONAL AGREEMENTS. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use its best efforts to take, or
cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by the Merger and
this Agreement, including but not limited to, using its best efforts to obtain
all necessary waivers, consents, authorizations and approvals of or exemptions
by any governmental authority, self-regulatory authority or third party, and
effecting all necessary registrations and filings. In case any time after the
Effective Date any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and directors of Microlytics or
SanTi, as the case may be, shall take all necessary action.
ARTICLE VII
CONDITIONS
7.1 CONDITIONS TO OBLIGATIONS OF MICROLYTICS. Notwithstanding any other
provision of this Agreement, each of the following shall be a condition to the
obligation of Microlytics to consummate the Merger:
(a) All of the representations and warranties made by Microlytics
herein shall have been true as of the date of this Agreement and shall be true
as of the Effective Date as though made on and as of the Effective Date, it
being understood that all representations and warranties made by Microlytics
herein, if specifically stated to be as of the date hereof, shall also be deemed
to be made as of the Effective Date;
(b) Microlytics shall have received the following documents from SanTi,
all of which shall be in a form and substance reasonably acceptable to
Microlytics and its counsel:
(i) a certified copy of the resolutions adopted by SanTi's Board
of Directors approving this Agreement and the transactions contemplated hereby
and thereby;
(ii) a certified copy of the resolutions adopted by the SanTi
Shareholder approving the transactions contemplated hereby;
(iii) a certificate of incumbency executed by the Secretary of
SanTi indicating the current officers and directors of SanTi;
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(iv) certificate of good standing of SanTi from the Secretary of
State of Delaware, dated not more than ten (10) days prior to the Effective
Date; and
(vi) such other certificates, documents or instruments as
Microlytics or its counsel may reasonably require'and
(c) Microlytics shall have received such other certificates, documents
and instruments as it shall have reasonably required.
7.2 CONDITIONS TO OBLIGATIONS OF SANTI. Notwithstanding any other
provisions of this Agreement, each of the following shall be a condition to the
obligation of SanTi to consummate the Merger:
(a) All of the representations and warranties made by Microlytics
herein shall have been true as of the date of this Agreement and shall be true
as of the Effective Date as though made on and as of the Effective Date, it
being understood that all representations and warranties made by Microlytics
herein, if specifically stated to be as of the date hereof, shall also be deemed
to be made as of the Effective Date;
(b) Microlytics shall have performed every obligation and complied with
each agreement, covenant or condition required by this Agreement to be performed
or complied with by them prior to or at the Effective Date;
(c) SanTi shall have received the following documents from, all of
which shall be in a form and substance acceptable to SanTi and its counsel:
(i) a certified copy of the resolutions adopted by the Board of
Directors of Microlytics approving this Agreement and the transactions
contemplated hereby and thereby;
(ii) certified copies of the order of the Bankruptcy approving the
transactions contemplated hereby;
(iii) certificate of good standing for Microlytics from the
Secretary of State of Delaware, dated not more than ten (10) days prior to the
Effective Date; and
(iv) such other certificates, documents or instruments as SanTi or
its counsel may reasonably require.
7.3 MUTUAL CONDITIONS. Each of the following shall be a condition to the
obligations of each of the parties to consummate the Merger:
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(a) No preliminary or permanent injunction or other order by any
federal or state court or other agency or body which prevents the consummation
of the Merger shall have been issued and remain in effect, and there shall not
have been instituted to be pending any action or proceeding by any United States
federal or state government or governmental agency or instrumentality or court
or any other person or entity (i) challenging or seeking to restrain or prohibit
the consummation of the Merger or seeking material damages in connection with
the Merger; (ii) seeking to prohibit Microlytics's ownership or operation of all
or a material portion of Microlytics's business or assets, or (iii) seeking to
compel Microlytics to dispose of or hold separate all or a material portion of
Microlytics's business or assets as a result of the Merger or otherwise;
(b) There shall not have been any taken, or any statute, rule,
regulation or order enacted, promulgated or issued or deemed applicable to the
Merger by any United States federal or state government or governmental agency
or instrumentality or court which would (i) prohibit Microlytics's ownership or
operation of all or a material portion of Microlytics's business or assets, (ii)
compel Microlytics to dispose of or hold separate all or a material portion of
Microlytics's business or assets, as a result of the Merger or otherwise, (iii)
render any party unable to consummate the Merger, or (iv) make such consummation
illegal.
(c) The Merger and this Agreement shall have been validly approved by
the requisite vote of the shareholders of SanTi and the Bankruptcy Court.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1 TERMINATION. This Agreement may be terminated at any time prior to the
Effective Date, whether before or after approval of the shareholders of SanTi
and the Bankruptcy Court;
(a) by Microlytics by notice to SanTi if any of the conditions set
forth in Section 7.1 or 7.3 have not been fulfilled at or prior to the Closing;
or
(b) by SanTi by notice to Microlytics if any of the conditions set
forth in Sections 7.2 or 7.3 have not been fulfilled at or prior to the Closing.
8.2 EFFECT OF TERMINATION. In the event of termination of this Agreement by
either Microlytics or SanTi as provided above, this Agreement shall forthwith
become void and, except for a willful breach, fraud or a breach of the
provisions of Section 8.2 hereof, there shall be no liability hereunder on the
part of Microlytics or SanTi or their respective officers or directors.
Notwithstanding anything to the contrary set forth herein, the agreements with
respect to expenses contained in Section 6.1 hereof shall survive the
termination hereof.
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8.3 AMENDMENT. This Agreement may be amended by the parties hereto at any
time before or after approval of the shareholders of SanTi and the Bankruptcy
Court. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
8.4 WAIVER. At any time prior to the Effective Date, the parties hereto,
by action taken by their respective Board of Directors, may (a) extend the time
for the performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and warranties of the
other parties contained herein or in any document delivered pursuant hereto, and
(c) waive compliance with any of the agreements of the other parties or
satisfaction of any of the conditions to its obligations contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid if set forth in an instrument in writing signed on behalf of such party.
Notwithstanding anything to the contrary set forth herein, the following
conditions precedent to the consummation of the Merger may not be waived by
either party hereto: (i) the approval of the Merger and this Agreement by the
Bankruptcy Court; and (ii) the execution by all necessary parties of this
Agreement and the Certificates attendant thereto.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Except as set forth in the
last sentence of this Section 9.1, the parties agree that the representations
and warranties in this Agreement or in any exhibit, disclosure schedule,
certificate or other instrument delivered pursuant to this Agreement shall not
survive the consummation of the Merger on the Effective Date. In the event that
a fact or matter is discovered which the discovering party determines to be a
breach of a representation or warranty, it shall promptly notify the other
parties hereto in writing.
ARTICLE X
GENERAL PROVISIONS
10.1 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given when delivered personally or when mailed by
registered or certified mail (return receipt requested and postage prepaid) to
the following addresses (or at such other address for a party as shall be
specified by like notice):
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(a) if to Microlytics, to: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Microlytics, Inc.
P. O. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(b) if to SanTi, to: ▇▇▇▇▇▇▇ ▇▇▇▇
SanTi Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., Esq.
Founders Equity Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
10.2 GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Delaware for agreements to be made and entered into in such State.
10.3 HEADINGS. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
10.4 SEVERABILITY. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void, unenforceable or against its regulatory policy, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect to the maximum extent permitted by law and shall in no
way be affected, impaired or invalidated.
10.5 MISCELLANEOUS. This Agreement (including the documents and instruments
referred to herein) (a) constitutes the entire agreement and supersedes all
prior agreements and understanding, both written and oral, among the parties, or
any of them, with respect to the subject matter hereof; (b) is not intended to
confer upon any third parties any rights or remedies hereunder; (c) shall not be
assigned by operation of law or otherwise; and (d) shall be governed in all
respects, including validity, interpretation and effect, by the laws of the
State of Delaware; and (e) may be executed in counterparts which together shall
constitute a single agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized all as of the date
first-above written.
MICROLYTICS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman
SANTI GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇, Chairman
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