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Exhibit 10.1
AGREEMENT AND PLAN OF MERGER,
DATED AS OF MAY 9, 2000,
AMONG
SILVER ROMANA COMPANY
A DELAWARE CORPORATION,
ACHIEVEMENT TEC ACQUISITION, INC.,
A DELAWARE CORPORATION,
AND
ACHIEVEMENT TEC INC.,
A TEXAS CORPORATION
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I. DEFINITIONS ................................................................
II. NAME OF SURVIVING CORPORATION; CERTIFICATE OF INCORPORATION AND
BY-LAWS; BOARD OF DIRECTORS; OFFICERS ......................................
SECTION 2.01 NAME OF SURVIVING CORPORATION ................................
SECTION 2.02 CERTIFICATE OF INCORPORATION AND BY-LAWS .....................
SECTION 2.03 BOARD OF DIRECTORS AND OFFICERS ..............................
III. STATUS OF SECURITIES .......................................................
SECTION 3.01 CAPITAL STOCK OF ACHIEVEMENT TEC .............................
SECTION 3.02 CAPITAL STOCK OF ACHIEVEMENT TEC ACQUISITION .................
SECTION 3.03 CAPITAL STOCK OF SILVER ROMONA MINING COMPANY ................
IV. FILING; EFFECTIVE TIME .....................................................
V. CERTAIN EFFECTS OF THE MERGER ..............................................
SECTION 5.01 SURVIVING CORPORATION ........................................
SECTION 5.02 TAX-FREE REORGANIZATION ......................................
VI. REPRESENTATIONS AND WARRANTIES .............................................
SECTION 6.01 REPRESENTATIONS AND WARRANTIES OF SILVER ROMANA MINING COMPANY
AND ACHIEVEMENT TEC ACQUISITION ..............................
SECTION 6.02 REPRESENTATIONS AND WARRANTIES OF ACHIEVEMENT TEC ............
VII. COVENANTS ..................................................................
SECTION 7.01 COVENANTS OF SILVER ROMANA MINING COMPANY AND ACHIEVEMENT TEC
ACQUISITION ..................................................
SECTION 7.02 COVENANTS OF ACHIEVEMENT TEC .................................
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VIII. ABANDONMENT AND TERMINATION ................................................
SECTION 8.01 RIGHT OF ACHIEVEMENT TEC AND ACHIEVEMENT TEC ACQUISITION TO
ABANDON ......................................................
SECTION 8.02 RIGHT OF ACHIEVEMENT TEC TO ABANDONMENT ......................
SECTION 8.03 ADDITIONAL TERMS OF ABANDONMENT ..............................
SECTION 8.04 EFFECT OF ABANDONMENT ........................................
IX. MISCELLANEOUS ..............................................................
SECTION 9.01 FURTHER ACTIONS ..............................................
SECTION 9.02 AVAILABILITY OF EQUITABLE REMEDIES ...........................
SECTION 9.03 SURVIVAL .....................................................
SECTION 9.04 ENTIRE AGREEMENT; MODIFICATION ...............................
SECTION 9.05 NOTICES ......................................................
SECTION 9.06 WAIVER .......................................................
SECTION 9.07 BINDING EFFECT ...............................................
SECTION 9.08 NO THIRD-PARTY BENEFICIARIES .................................
SECTION 9.09 SEPARABILITY .................................................
SECTION 9.10 HEADINGS .....................................................
SECTION 9.11 COUNTERPARTS; GOVERNING LAW ..................................
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SCHEDULES
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SCHEDULE 3.01(g) ACHIEVEMENT TEC WARRANTS
SCHEDULE 6.02(b) COMMITMENTS, PLANS, AND ARRANGEMENTS OF ACHIEVEMENT
TEC
SCHEDULE 6.02(d) PROPERTIES OF ACHIEVEMENT TEC
SCHEDULE 6.02(f) REAL AND OTHER PROPERTIES OWNED BY ACHIEVEMENT TEC
SCHEDULE 6.02(g) ACHIEVEMENT TEC MATERIAL CONTRACTS, AGREEMENTS,
INSTRUMENTS, LEASES, LICENSES, ARRANGEMENTS AND UNDERSTANDINGS
SCHEDULE 6.02(h) ACHIEVEMENT TEC PENSION, PROFIT-SHARING, OPTION,
INCENTIVE PLAN AND EMPLOYEE BENEFIT PLAN
EXHIBITS
EXHIBITS 3.01(f) ASSUMPTION OF ACHIEVEMENT TEC STOCK OPTION PLAN
EXHIBITS 3.01(g) ASSUMPTION OF ACHIEVEMENT TEC WARRANTS
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AGREEMENT AND PLAN OF MERGER, dated as of May 9, 2000, among SILVER ROMANA
MINING COMPANY, a Delaware corporation with executive offices located at 211
West Elder Avenue, Kellogg, Idaho 82837 ("SRM"), ACHIEVEMENT TEC ACQUISITION,
INC., a Delaware corporation and a wholly-owned subsidiary of SRM, with
executive offices at 211 West Elder Avenue, Kellogg, Idaho 82837
("Acquisition"), and ACHIEVEMENT TEC, INC., a Texas corporation with executive
offices at 2100 Highway 360, Suite 400-B, Grand Prairie, Texas 75050
("Achievement Tec"). For purposes of this Agreement, Achievement Tec in its
capacity as the surviving corporation will sometimes be referred to as the
"Surviving Corporation," and Acquisition and Achievement Tec will sometimes be
referred to as the "Constituent Corporations."
W I T N E S S E T H:
WHEREAS, SRM, Acquisition, and Achievement Tec desire to effect a reverse
triangular merger whereby Acquisition shall merge with Achievement Tec (the
"Merger") pursuant to this Agreement, subject to the laws of the States of
Delaware and Texas, such that, upon the consummation of the Merger, Acquisition
will cease to exist and Achievement Tec will be the surviving corporation and a
wholly-owned subsidiary of SRM; and
WHEREAS, the parties to this Agreement intend that the Merger qualify as a
"reorganization" within the meaning of Section 368 of the Internal Revenue Code
of 1986, as amended, or its successor statute (the "Code"); and
WHEREAS, this Agreement has been approved by the respective Board of
Directors and stockholders of each of SRM, Acquisition, and Achievement Tec and
by the respective stockholders of Acquisition and Achievement Tec.
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NOW THEREFORE, in consideration of the respective covenants, promises, and
obligations contained herein, the parties hereto hereby agree as follows:
I. DEFINITIONS.
ACHIEVEMENT TEC. As defined in the introductory paragraph hereof.
ACHIEVEMENT TEC COMMON STOCK. Common Stock, no par value of Achievement
Tec.
ACHIEVEMENT TEC INDEMNITEES. As defined in Section 7.01(n) hereof.
ACHIEVEMENT TEC PREFERRED STOCK. Series A 8% Cumulative Convertible
Preferred Stock, no par value per share, of Achievement Tec.
ACHIEVEMENT TEC TAKEOVER PROPOSAL. As defined Section 7.02(i) hereof.
ACQUISITION. As defined in the introductory paragraph hereof.
CODE. As defined in the second recital hereof.
COMMISSION. Securities and Exchange Commission.
CONSTITUENT CORPORATIONS. As defined in the introductory paragraph hereof.
DGCL. The General Corporation Law of the State of Delaware.
EFFECTIVE TIME. As defined in Article IV hereof.
EXCHANGE ACT. Securities Exchange Act of 1934, as amended.
GAAP. Generally accepted accounting principles in effect in the United
States at the date hereof.
LAST ACHIEVEMENT TEC BALANCE SHEET. The balance sheet of Achievement Tec
and the notes thereto at March 31, 2000.
LAST ACHIEVEMENT TEC BALANCE SHEET DATE. March 31, 2000.
LAST ACHIEVEMENT TEC FINANCIAL STATEMENTS. The financial statements of
Achievement Tec at and for the period ended March 31, 2000.
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LAST SRM BALANCE SHEET. The balance sheet of SRM and the notes thereto at
December 31, 1999.
LAST SRM BALANCE SHEET DATE. December 31, 1999.
LAST SRM FINANCIAL STATEMENTS. The financial statements of SRM at and for
the period ended December 31, 1999.
MERGER. As defined in the first recital hereof.
NEW CERTIFICATES. As defined in Section 3.01(c) hereof.
NIR. The N.I.R. Group, LLC.
OLD CERTIFICATES. Certificates representing shares of Achievement Tec
Common Stock outstanding immediately prior to the Effective Time.
RELEASE TIME. The earlier of the Effective Time and the rightful
termination or abandonment of the Merger pursuant to Article VIII hereof.
SECURITIES ACT. Securities Act of 1933, as amended.
SRM. As defined in the introductory paragraph hereof.
SRM COMMON STOCK. Common stock, par value $0.01 per share, of SRM.
SRM INDEMNITEES. As defined in Section 7.02(k) hereof.
SRM TAKEOVER PROPOSAL. As defined in Section 7.01(j) hereof.
SURVIVING CORPORATION. As defined in the introductory paragraph hereof.
TAX RETURNS. Any return, report, document, statement, or form required to
be filed (whether on a consolidated, combined, separate, or unitary basis) with
respect to any Taxes (along with any schedules required to be attached thereto),
including, without limitation, information returns, claims for refund, amended
returns, and declarations of estimated Tax.
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TAXES. All taxes, charges, fees, levies, penalties, or other assessments
imposed by any United States federal, state, local or foreign taxing authority,
including any interest, penalties or additions thereto.
II. NAME OF SURVIVING CORPORATION; CERTIFICATE
OF INCORPORATION AND BY-LAWS; BOARD OF
DIRECTORS; OFFICERS.
SECTION 2.01 NAME OF SURVIVING CORPORATION. The name of the Surviving
Corporation shall be "Achievement Tec, Inc."
SECTION 2.02 CERTIFICATE OF INCORPORATION AND BY-LAWS OF SURVIVING
CORPORATION. The certificate of incorporation and the by-laws of Achievement Tec
as in effect at the Effective Time shall remain as such from and after the
Effective Time, until such time as they are amended.
SECTION 2.03 BOARD OF DIRECTORS AND OFFICERS OF SURVIVING CORPORATION. The
directors and officers of Achievement Tec at the Effective Time shall remain as
such from and after the Effective Time, each to serve, subject to the by-laws of
Achievement Tec, until their respective successors shall have been elected and
qualified.
SECTION 2.04 BOARD OF DIRECTORS AND OFFICERS OF SURVIVING CORPORATION. The
directors and officers of SRM immediately prior to the Effective Time shall
resign from offices and other positions held thereby with SRM and shall take all
corporate and other action required such that at the Effective Time the
directors and officers of Achievement Tec at the Effective Time shall become the
directors and officers, respectively, of SRM from and after the Effective Time,
each to serve, subject to the by-laws of SRM, until their respective successors
shall have been duly elected and qualified.
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III. STATUS OF SECURITIES.
SECTION 3.01 SECURITIES OF ACHIEVEMENT TEC.
(a) The shares of Achievement Tec Common Stock outstanding at the
Effective Time, together with the shares of Achievement Tec Common Stock
issuable upon the conversion of shares of Achievement Tec Preferred Stock,
shall, subject to Section 3.01(e), be converted into and exchanged for an
aggregate of 7,000,000 shares of SRM Common Stock, representing 70% of the total
issued and outstanding shares of SRM Common Stock immediately following the
Effective Time.
(b) Notwithstanding Section 3.01(a), no share of SRM Common Stock shall be
issued, converted or exchanged for shares of Achievement Tec Common Stock to
those holders of Achievement Tec Common Stock who object to the Merger in
writing and demand, and receive, payment for the value of their shares pursuant
to the applicable provision of the Texas Business Corporation Act, if
applicable.
(c) Subject to Section 3.01(b), after the Effective Time, each holder of
an Old Certificate representing shares of Achievement Tec Common Stock, upon
surrender thereof to SRM, shall be entitled to receive a certificate or
certificates (the "New Certificates") of SRM Common Stock, which SRM agrees to
provide as soon as practicable after the Effective Time, representing the number
of whole shares of SRM Common Stock for which the shares of Achievement Tec
Common Stock represented by such surrendered Old Certificates have been
converted. No certificates or scrip for fractional shares of SRM Common Stock
will be issued; no SRM stock split or dividend shall relate to any fractional
share interest; and no fractional share interest shall entitle the owner thereof
to any rights of a SRM stockholder, including the right to vote. All fractional
shares of SRM Common Stock or interests or rights therein shall be rounded
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up to the next whole number of shares of SRM Common Stock. Until surrendered and
exchanged after the Effective Time, each Old Certificate shall be deemed for all
corporate purposes (other than the payment of dividends or liquidating or other
distributions, if any, to holders of record of SRM Common Stock) to represent
only the right to receive the number of whole shares of SRM Common Stock for
which the shares of Achievement Tec Common Stock represented by such Old
Certificate shall have been converted. No dividend or liquidating or other
distribution, if any, payable to then record holders of shares of SRM Common
Stock shall be paid at any time to the holders of Old Certificates; provided,
however, that upon surrender and exchange of such Old Certificates, the record
holders of the New Certificates shall be paid, subject to the last sentence of
this Section 3.01(c): (i) the amount, without interest, of dividends and
liquidating or other distributions, if any, which have become payable to holders
of record of shares of Achievement Tec Common Stock on or after the Effective
Time with respect to the number of whole shares of SRM Common Stock represented
by such New Certificates; and (ii) the amount, without interest, of dividends
and liquidating or other distributions, if any, payable to record holders of
Achievement Tec Common Stock prior to the Effective Time, as declared by the
Board of Directors of Achievement Tec.
If outstanding Old Certificates are not surrendered and exchanged for New
Certificates prior to two years after the Effective Time (or the date prior
thereto when the whole shares of SRM Common Stock, the dividends and liquidating
or other distributions, if any, and cash in lieu of fractional shares described
below would otherwise escheat to, or become the property of, any governmental
unit or any agency thereof): (i) the number of whole shares of SRM Common Stock
for which the shares of Achievement Tec Common Stock represented by such Old
Certificates shall have been converted; (ii) the amount of dividends and
liquidating or other distributions, if any,
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which have become payable to holders of record on or after the Effective Time
with respect to such number of whole shares of SRM Common Stock; (iii) the
amount of dividends and liquidating or other distributions, if any, declared by
the Board of Directors of Achievement Tec and payable to the record holders of
Achievement Tec Common Stock at any time prior to the Effective Time, but
payable subsequent thereto; and (iv) the amount of dividends and liquidating or
other distributions, if any, which subsequently become payable with respect to
such number of whole shares of SRM Common Stock, shall become the property of
SRM (and, to the extent not in its possession, shall be paid over to it), free
and clear of all claims or interest of any other person previously entitled
thereto.
(d) If any New Certificate is to be issued in a name other than that in
which the Old Certificate surrendered for exchange is issued, such Old
Certificate shall be properly endorsed and otherwise in proper form for transfer
and the person requesting such exchange shall pay to SRM any transfer or other
taxes required by reason of the issuance of the New Certificate in any name
other than that of the registered holder of the surrendered Old Certificate, or
establish to the satisfaction of SRM that such tax has been paid or is not
payable.
(e) As of the Effective Time, no transfer of the shares of Achievement Tec
Common Stock outstanding prior to the Effective Time shall be made on the stock
transfer books of the Surviving Corporation. If, after the Effective Time, Old
Certificates are presented to SRM or the Surviving Corporation, they shall be
exchanged pursuant to Section 3.01(c).
SECTION 3.02 CAPITAL STOCK OF SRM. All issued shares of SRM Common Stock,
whether outstanding or held in the treasury of SRM, shall continue unchanged as
shares of capital stock of SRM. There are no outstanding warrants, stock
options, or other securities convertible into, or exchangeable for, shares of
capital stock of SRM.
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SECTION 3.03 CAPITAL STOCK OF ACQUISITION. All shares of capital stock of
Acquisition, outstanding at the Effective Time, shall be converted into and
exchanged for ten shares of common stock of the Surviving Corporation, except
that shares of capital stock of Acquisition held in Acquisition's treasury shall
be cancelled.
IV. FILING; EFFECTIVE TIME.
As soon as reasonably practicable after the execution of this Agreement,
the consummation of the Merger and the other transactions contemplated hereby,
appropriate certificates of merger in the respective forms required by the laws
of the States of Delaware and Texas shall be executed and filed in the office of
the Secretaries of State of the States of Delaware and Texas, which certificates
shall provide that the Merger shall become effective upon such filing (the
"Effective Time").
V. CERTAIN EFFECTS OF THE MERGER.
SECTION 5.01 SURVIVING CORPORATION. When the Merger becomes effective, the
separate existence of Acquisition shall cease, Acquisition shall be merged into
Achievement Tec, and the Surviving Corporation shall possess all the rights,
privileges, powers, and franchises of a public and private nature, and shall be
subject to all the restrictions, disabilities, and duties of each of the
Constituent Corporations including all its property, real, personal, and mixed;
all debts due to either of the Constituent Corporations on whatever account, for
stock subscriptions and all other things in action or belonging to each of the
Constituent Corporations shall be vested in the Surviving Corporation; and all
property, rights, privileges, powers, and franchises, and all and every other
interest shall be thereafter the property of the Surviving Corporation as they
were of the several and respective Constituent Corporations; and the title to
any real estate vested by deed or otherwise, under the laws of any other
jurisdiction, in either of the Constituent Corporations, shall not revert or be
in any way impaired by reason of the Merger; and all rights of creditors and all
liens upon any
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property of either of the Constituent Corporations shall be preserved
unimpaired, and all debts, liabilities, and duties of the respective Constituent
Corporations shall thenceforth attach to the Surviving Corporation, and may be
enforced against it to the same extent as if such debts, liabilities, and duties
had been incurred or contracted by it.
SECTION 5.02 TAX-FREE REORGANIZATION. The Merger is intended to be a
reorganization within the meaning of Section 368 of the Code, and this Agreement
is intended to be a "plan of reorganization" within the meaning of the
regulations promulgated under Section 368 of the Code.
VI. REPRESENTATIONS AND WARRANTIES.
SECTION 6.01 REPRESENTATIONS AND WARRANTIES OF SRM AND ACQUISITION. SRM
and Acquisition, jointly and severally, represent and warrant to Achievement Tec
as follows:
(a) Except for Acquisition, SRM has no subsidiaries or affiliated
corporation or owns, directly or indirectly, any interest in any other
enterprise (whether or not such enterprise is a corporation). Each of SRM and
Acquisition is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware with all requisite power and
authority, and all necessary consents, authorizations, approvals, orders,
licenses, certificates, and permits of and from, and declarations and filings
with, all federal, state, local, and other governmental authorities and all
courts and other tribunals, to own, lease, license, and use its respective
properties and assets and to carry on the respective businesses in which it is
now engaged and the respective businesses in which it contemplates engaging.
(b) The authorized capital stock of SRM consists of 50,000,000
shares of common stock, par value $.001 per share, 500,000 of which are
outstanding, and 10,000,000 shares of preferred stock, none of which is
outstanding. Such outstanding shares of SRM Common Stock are validly authorized
and issued, fully paid, and nonassessable, and have not been issued and are
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not owned or held in violation of any preemptive or similar right of
stockholders. The authorized capital stock of Acquisition consists of 100 shares
of Common Stock, par value $.001 per share, of which ten shares are outstanding.
All of the outstanding capital stock of Acquisition is owned of record and
beneficially by SRM. Such outstanding shares of common stock of Acquisition is
validly authorized and issued, fully paid, and nonassessable, and have not been
issued and are not owned or held in violation of any preemptive or similar right
of stockholders. Except as contemplated by this Agreement, there is no
commitment, plan, or arrangement to issue, and no outstanding option, warrant,
or other right calling for the issuance of any share of capital stock of SRM or
Acquisition or any security or other instrument convertible into, or exercisable
or exchangeable for, capital stock of SRM or Acquisition. There is outstanding
no security or other instrument convertible into, or exercisable or exchangeable
for, capital stock of SRM or Acquisition.
(c) SRM has delivered to Achievement Tec true and correct copies of
the Last SRM Financial Statements. Each consolidated balance sheet included
therein presents fairly the financial condition, assets, liabilities, and
stockholders' equity of SRM and Acquisition as of its date; each consolidated
statement of income and statement of stockholders' equity included therein
fairly presents the results of operations of SRM and Acquisition for the period
indicated; and each consolidated statement of cash flows included therein
presents fairly the information purported to be shown therein. The financial
statements referred to in this Section 6.01(c) have been prepared in accordance
with GAAP, which have been applied consistently throughout the periods involved
and are in accordance with the books and records of SRM and Acquisition. Except
as set forth in Schedule 6.01(c) hereto, since the Last SRM Balance Sheet Date:
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(i) There has at no time been a material adverse change in the
financial condition, results of operations, businesses, properties,
assets, liabilities, or future prospects of SRM and Acquisition,
taken as a whole.
(ii) Neither SRM nor Acquisition has authorized, declared,
paid, or effected any dividend or liquidating or other distribution
in respect of its capital stock or any direct or indirect
redemption, purchase, other acquisition, combination, split, or
reorganization of any stock of either of them.
(iii) The operations and businesses of SRM and Acquisition
have been conducted in all respects only in the ordinary course,
except for (A) the issuance and sale of shares of SRM Common Stock
to designees of NIR and (B) the reincorporation merger of SRM from
the State of Idaho to the State of Delaware and the amendment of the
certificate of incorporation of SRM to increase the capitalization
thereof to be as represented herein.
(iv) Neither SRM nor Acquisition has suffered an extraordinary
loss (whether or not covered by insurance) or waived any right of
substantial value. There is no fact known to SRM or Acquisition
which materially adversely affects, or in the future (as far as
either SRM or Acquisition can foresee) may materially adversely
affect the financial condition, results of operations, businesses,
properties, assets, liabilities, or future prospects of SRM or
Acquisition, or, after the Merger, the Surviving Corporation;
provided, however, that neither SRM nor Acquisition expresses any
opinion as to political or economic matters of general
applicability.
(d) Each of SRM and Acquisition has filed, or as of the Effective
Time will have filed, with the appropriate federal, state, local and foreign tax
authorities all Tax Returns required
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to be filed by or with respect to SRM or Acquisition whose due dates (taking
into account any timely filed extensions) fall on or before the Effective Time,
and such Tax Returns are or will be true, correct, and complete in all material
respects and disclose all Taxes required to be paid by SRM or Acquisition,
respectively. Each of SRM has paid in full or has made adequate provision in the
Last SRM Balance Sheet for all Taxes which are or will be due or claimed to be
due from it by any authority for all periods or portions thereof up to and
including the Effective Time. There are no liens for Taxes upon the assets of
SRM or Acquisition, except for statutory liens for current Taxes not yet due.
Neither SRM nor Acquisition has (i) requested any extension of time within which
to file any Tax Return, which Tax Return has not since been filed, or (ii)
waived any statute of limitations for, or agreed to any extension of time with
respect to, the assessment of Taxes thereof. No claim has ever been made by an
authority in a jurisdiction where either SRM or Acquisition does not file Tax
Returns that it is or may be subject to taxation by that jurisdiction. Each of
SRM and Acquisition has delivered to Achievement Tec true, correct, and complete
copies of all federal income Tax Returns, examinations, reports, and statements
of deficiencies assessed against, or agreed to by, it since December 31, 1994.
Neither SRM nor Acquisition has received any notice of deficiency or assessment
from any federal, state, local, or foreign taxing authority with respect to
liabilities for Taxes thereof which have not been fully paid or finally settled,
and, to the knowledge of SRM and Acquisition, there are no existing or prior
facts, circumstances, or conditions that would form the basis for such a notice
of deficiency or assessment. Neither SRM nor Acquisition is a party to a tax
sharing or tax indemnity agreement or any other agreement of a similar nature
that remains in effect. Neither SRM nor Acquisition has been a United States
real property holding corporation within the meaning of Section 897(c)(2) of the
Code during the period specified in Section 897 (c)(1)(A)(ii) of the Code.
Neither SRM nor Acquisition is, nor has it been,
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a member of an affiliated group filing a consolidated federal income Tax Return
or has any liability for the Taxes of any person under Treasury Regulation
1.1502-6 (or any similar provision of state, local, or foreign law) as a
transferee, or successor, by contract or otherwise.
(e) There is no litigation, arbitration, claim, governmental or
other proceeding (formal or informal), or investigation pending, threatened, or
in prospect (or any basis therefor known to SRM) with respect to SRM or
Acquisition or any of its respective businesses, properties, or assets. Neither
SRM nor Acquisition is in violation of, or in default with respect to, any law,
rule, regulation, order, judgment, or decree; nor is SRM or Acquisition required
to take any action in order to avoid such violation or default. There is no
outstanding consent, order, judgment, writ, injunction, award, or decree of any
court, arbitration or other tribunal against or involving SRM, Acquisition,
their respective business, or any of their respective properties or assets.
(f) Neither SRM nor Acquisition owns any real or other property.
(g) There are no contracts, agreements, instruments, leases,
licenses, arrangements, or understandings binding upon SRM or Acquisition. Each
of SRM and Acquisition has furnished to Achievement Tec its respective
certificate of incorporation (or other charter document) and all amendments
thereto, if any, as presently in effect. Neither SRM nor Acquisition is a party
to, or bound by, any contract, agreement, instrument, lease, license,
arrangement, or understanding, or subject to any charter or other restriction,
which has had, or may in the future have, a material adverse effect on the
respective financial condition, results of operations, businesses, properties,
assets, liabilities, or future prospects of SRM or Acquisition, or, after the
Merger, of the Surviving Corporation. Notwithstanding this Agreement and related
documents, neither SRM nor Acquisition has engaged within the last five years
in, is engaging in, or intends to engage in, any transaction with, or has had
within the last five years, now has, or intends to have
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any contract, agreement, instrument, lease, license, arrangement, or
understanding with any stockholder, director, officer, or employee of SRM or
Acquisition or any relative or affiliate of any stockholder, director, officer,
or employee, of SRM or Acquisition or any other corporation or enterprise in
which any stockholder of SRM or Acquisition, any such director, officer, or
employee, or any such relative or affiliate then had or now has a 5% or greater
equity or voting or other substantial interest. The stock ledgers, stock
transfer books, and the minute book records of each of SRM and Acquisition and
any other document provided by SRM relating to all issuances and transfers of
stock and all proceedings of the stockholders and the Board of Directors and
committees thereof since their respective incorporations, all of which have been
made available to Achievement Tec, are originals or exact copies thereof.
Neither SRM nor Acquisition is in violation, breach, or in default with respect
to any term of its respective certificate of incorporation (or other charter
document) or by-laws.
(h) Neither SRM nor Acquisition (i) has contributed to any pension,
profit-sharing, option, other incentive plan, or any other type of employee
benefit plan; (ii) maintains or has maintained, is or was a party to, or
otherwise participates or participated in, on its own behalf or on behalf of any
former employees, any pension, profit-sharing, option, other incentive plan, or
any other type of employee benefit plan; or (iii) has any obligation to, or
customary arrangement with, former employees, if any, for bonuses, incentive
compensation, vacations, severance pay, sick pay, sick leave, insurance, service
award, relocation, disability, tuition refund, or other benefits, whether oral
or written.
(i) Neither SRM nor Acquisition, nor any director, officer, agent,
employee, stockholder, or other person associated with, or acting on behalf of,
either of SRM or Acquisition, has directly or indirectly: (i) used any corporate
funds for unlawful contributions, gifts,
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entertainment, or other unlawful expenses relating to political activity; made
any unlawful payment to foreign or domestic government officials or employees or
to foreign or domestic political parties or campaigns from corporate funds;
violated any provision of the Foreign Corrupt Practices Act of 1977, as amended;
or (ii) made any bribe, rebate, payoff, influence payment, kickback, or other
unlawful payment.
(j) Each of SRM and Acquisition has all requisite power and
authority to execute, deliver, and perform this Agreement and the other
transactions contemplated by, and in connection with, this Agreement. All
necessary corporate proceedings of SRM and Acquisition have been duly taken to
authorize the execution, delivery, and performance of this Agreement and the
other transactions contemplated by, and in connection with, this Agreement. This
Agreement has been duly authorized, executed, and delivered by each of SRM and
Acquisition, constitutes the legal, valid, and binding obligation of each of SRM
and Acquisition, and is enforceable as to each of SRM and Acquisition in
accordance with its terms. No consent, authorization, approval, order, license,
certificate, or permit of or from, or declaration or filing with, any federal,
state, local, or other governmental authority or any court or other tribunal is
required by SRM or Acquisition for the execution, delivery, or performance of
this Agreement. No consent of any party to any contract, agreement, instrument,
lease, license, arrangement, or understanding to which SRM or Acquisition is a
party, or to which it or any of its respective properties or assets are subject,
is required for the execution, delivery, or performance of this Agreement and
the execution, delivery, and performance of this Agreement, will not violate,
result in a breach of, conflict with, or (with or without the giving of notice
or the passage of time or both) entitle any party to terminate or call a default
under, receive rights or privileges that such party was not entitled to receive
before, this Agreement and the other transactions contemplated by, and in
connection with, this Agreement was executed under, or create
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any obligation on the part of either SRM or Acquisition to which such
corporation was not subject immediately before this Agreement was executed
under, any term of any such contract, agreement, instrument, lease, license,
arrangement, or understanding, or violate or breach their respective
certificates of incorporation (or other charter document) or by-laws, or
violate, result in a breach of, or conflict with any law, rule, regulation,
order, judgment, or decree binding on SRM or Acquisition or to which any of
their respective businesses, properties, or assets are subject. Neither SRM nor
Acquisition, nor any of their respective officers, directors, employees, or
agents has employed any broker or finder or incurred any liability for any fee,
commission, or other compensation payable by any person on account of alleged
employment as a broker or finder, or alleged performance of services as a broker
or finder, in connection with, or as a result of, this Agreement, the Merger, or
the other transactions contemplated by this Agreement.
(k) No representation or warranty by SRM or Acquisition in this
Agreement contains, or at the Effective Time will contain, an untrue statement
of material fact or omits, or at the Effective Time will omit, to state a
material fact required to be stated therein or necessary to make the statements
contained herein not misleading.
SECTION 6.02 REPRESENTATIONS AND WARRANTIES OF ACHIEVEMENT TEC.
Achievement Tec represents and warrants to each of SRM and Acquisition as
follows:
(a) Achievement Tec has no subsidiaries or affiliated corporation or
owns any interest in any other enterprise (whether or not such enterprise is a
corporation). Achievement Tec is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Texas with all requisite
power and authority, and all necessary consents, authorizations, approvals,
orders, licenses, certificates, and permits of and from, and declarations and
filings with, all federal, state, local, and other governmental authorities and
all courts and other tribunals, to own,
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lease, license, and use its properties and assets and to carry on the respective
businesses in which it is now engaged and the businesses in which it
contemplates engaging.
(b) The authorized capital stock of Achievement Tec consists of
10,000,000 shares of Achievement Tec Common Stock, no par value, 6,300,000 of
which are outstanding, and 1,000,000 shares of preferred stock, of which 419,874
shares of Achievement Tec Preferred Stock are outstanding. Each of such
outstanding shares of Achievement Tec Common Stock and each outstanding share of
Achievement Tec Preferred Stock is validly authorized and issued, fully paid,
and nonassessable, has not been issued and is not owned or held in violation of
any preemptive or similar right of stockholders, and is free and clear of all
liens, security interests, pledges, charges, encumbrances, stockholders'
agreements, and voting trusts. Except as provided in Schedule 6.02(b) and this
Agreement, there is no commitment, plan, or arrangement to issue, and no
outstanding option, warrant, or other right calling for the issuance of any
share of capital stock of Achievement Tec or any security or other instrument
convertible into, or exercisable or exchangeable for, capital stock of
Achievement Tec.
(c) Achievement Tec has delivered to SRM and Acquisition true and
correct copies of the Last Achievement Tec Financial Statements. Each balance
sheet included therein presents fairly the financial condition, assets,
liabilities, and stockholders' equity of Achievement Tec as of its date; each
statement of income and statement of stockholders' equity included therein
presents fairly the results of operations of Achievement Tec for the period
indicated; and each consolidated statement of cash flows included therein
presents fairly the information purported to be shown therein. The financial
statements referred to in this Section 6.02(c) have been prepared in accordance
with GAAP, which have been applied consistently throughout the periods involved
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and are in accordance with the books and records of Achievement Tec. Since the
Last Achievement Tec Balance Sheet Date:
(i) There has at no time been a material adverse change in the
financial condition, results of operations, businesses, properties,
assets, liabilities, or future prospects of Achievement Tec.
(ii) Achievement Tec has not authorized, declared, paid, or
effected any dividend or liquidating or other distribution in
respect of its capital stock or any direct or indirect redemption,
purchase, other acquisition, combination, split, or reorganization
of any stock of Achievement Tec.
(iii) The operations and businesses of Achievement Tec have
been conducted in all respects only in the ordinary course, except
for (A) the issuance of the Achievement Tec Preferred Stock and (B)
the amendment of the certificate of incorporation of Achievement Tec
to increase the capitalization thereof to be as represented herein.
(iv) Achievement Tec has not suffered an extraordinary loss
(whether or not covered by insurance) or waived any right of
substantial value. There is no fact known to Achievement Tec which
materially adversely affects, or in the future (as far as
Achievement Tec can reasonably foresee) may materially adversely
affect the financial condition, results of operations, businesses,
properties, assets, liabilities, or future prospects of Achievement
Tec or, after the Merger, the Surviving Corporation; provided,
however, that Achievement Tec expresses no opinion as to political
or economic matters of general applicability.
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(d) Achievement Tec has filed, or as of the Effective Time will have
filed, with the appropriate federal, state, local and foreign tax authorities
all Tax Returns required to be filed by or with respect to Achievement Tec whose
due dates (taking into account any timely filed extensions) fall on or before
the Effective Time, and such Tax Returns are or will be true, correct, and
complete and disclose all Taxes required to be paid by Achievement Tec.
Achievement Tec has paid in full or has made adequate provision in the Last
Achievement Tec Balance Sheet for all Taxes which are or will be due or claimed
to be due from it by any authority for all periods or portions thereof up to and
including the Effective Time. There are no liens for Taxes upon the assets of
Achievement Tec, except for statutory liens for current Taxes not yet due.
Achievement Tec has not (i) requested any extension of time within which to file
any Tax Return, which Tax Return has not since been filed, or (ii) waived any
statute of limitations for, or agreed to any extension of time with respect to,
the assessment of Taxes of Achievement Tec. No claim has ever been made by an
authority in a jurisdiction where Achievement Tec does not file Tax Returns that
it is or may be subject to taxation by that jurisdiction. Achievement Tec has
delivered to SRM and Acquisition true, correct, and complete copies of all
federal income Tax Returns, examinations, reports, and statements of
deficiencies assessed against or agreed to by it since December 31, 1994.
Achievement Tec has not received any notice of deficiency or assessment from any
federal, state, local, or foreign taxing authority with respect to liabilities
for Taxes of Achievement Tec which have not been fully paid or finally settled,
and, to the knowledge of Achievement Tec, there are no existing or prior facts,
circumstances, or conditions that would form the basis for such a notice of
deficiency or assessment. Achievement Tec is not a party to a tax sharing or tax
indemnity agreement or any other agreement of a similar nature that remains in
effect. Achievement Tec has not been a United States real property holding
corporation within the meaning of Section 897(c)(2)
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of the Code during the period specified in Section 897 (c)(1)(A)(ii) of the
Code. Achievement Tec is not, nor has it been, a member of an affiliated group
filing a consolidated federal income Tax Return or has any liability for the
Taxes of any person under Treasury Regulation 1.1502-6 (or any similar provision
of state, local, or foreign law) as a transferee, or successor, by contract or
otherwise.
(e) There is no litigation, arbitration, claim, governmental or
other proceeding (formal or informal), or, to Achievement Tec's knowledge,
investigation pending, threatened, or in prospect (or any basis therefor known
to Achievement Tec), with respect to Achievement Tec or any of its respective
business, properties, or assets. Achievement Tec is not affected by any present
or threatened strike or other labor disturbance, nor, to the knowledge of
Achievement Tec, is any union attempting to represent any employee of
Achievement Tec as collective bargaining agent. To Achievement Tec's knowledge,
Achievement Tec is not in violation of, or in default with respect to, any law,
rule, regulation, order, judgment, or decree which violation or default would
have a material adverse effect on the business, prospects, financial condition,
or results of operations of Achievement Tec; nor is Achievement Tec required to
take any action in order to avoid such violation or default.
(f) Achievement Tec does not own any real property. Achievement Tec
has good title to all personal properties and assets used in its businesses or
owned by it (except real and other properties and assets as are held pursuant to
leases or licenses described in Schedule 6.02(g) hereto), free and clear of all
liens, mortgages, security interests, pledges, charges, and encumbrances, except
those described in Schedule 6.02(f) hereto. Set forth in Schedule 6.02(f) hereto
is a true and complete list of all real and other properties and assets owned by
Achievement Tec or leased or licensed by Achievement Tec from or to a third
party, including with respect to
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such properties and assets owned by Achievement Tec a statement of cost, book
value, and (except for land) reserve for depreciation of each item for tax
purposes, and net book value of each item for financial reporting purposes, and
with respect to such properties and assets leased or licensed by Achievement Tec
from or to a third party, a description of such lease or license. All real and
other tangible properties and assets owned by Achievement Tec or leased or
licensed by Achievement Tec from or to a third party are in good and usable
condition (reasonable wear and tear which is not such as to affect adversely the
operation of the business of Achievement Tec excepted).
(g) Set forth in Schedule 6.02(g) hereto is a true and correct list
of all material contracts, agreements, instruments, leases, licenses,
arrangements, or understandings with respect to Achievement Tec. Achievement Tec
has furnished to SRM (i) its certificate of incorporation and by-laws and all
amendments thereto, as presently in effect; and (ii) true and correct copies of
all contracts, agreements, instruments, leases, licenses, arrangements, or
understandings referred to in Schedule 6.02(g) hereto. Achievement Tec is not
now, nor does it expect to be, in violation or breach of, or in default with
respect to complying with, any material term of any item referred to in clauses
(i) or (ii) of the immediately preceding sentence, and each such contract,
agreement, instrument, lease, or license is in full force and is the legal,
valid, and binding obligation of Achievement Tec and is enforceable as to
Achievement Tec in accordance with its terms (subject to applicable bankruptcy,
insolvency, and other laws affecting the enforceability of creditors' rights
generally). Each such financing or other arrangement or understanding is a
valid and continuing arrangement or understanding; neither Achievement Tec nor,
to its knowledge, any other party to any such arrangement or understanding, has
given notice of termination or taken any action inconsistent with the
continuance of such arrangement or understanding; and the execution, delivery,
and performance of this Agreement will not prejudice any such arrangement or
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understanding in any way. Except as set forth in Schedule 6.02(g) hereto,
Achievement Tec is not a party to, or bound by, any contract, agreement,
instrument, lease, license, arrangement, or understanding, or subject to any
charter or other restriction, which has had a material adverse effect on the
financial condition, results of operations, businesses, properties, assets,
liabilities, or future prospects of Achievement Tec or, after the Merger, or is
anticipated by Achievement Tec to have a material adverse effect on the
financial condition, results of operations, businesses, properties, assets,
liabilities, or future prospects of the Surviving Corporation. Except as set
forth in Schedule 6.02(g), Achievement Tec has not engaged within the last five
years in, is not engaging in, nor intends to engage in any transaction with, nor
has had within the last five years, now has, or intends to have any contract,
agreement, instrument, lease, license, arrangement, or understanding with, any
stockholder of Achievement Tec, any director, officer, or employee of
Achievement Tec (except for employment agreements listed in Schedule 6.02(g)),
any relative or affiliate of any stockholder of Achievement Tec, any such
director, officer, or employee, or any other corporation or enterprise in which
any stockholder of Achievement Tec, any such director, officer, or employee, or
any such relative or affiliate then had or now has a 5% or greater equity or
voting or other substantial interest, other than those listed and so specified
in Schedule 6.02(g). The respective stock ledgers and stock transfer books and
the minute book records of Achievement Tec relating to all issuances and
transfers of stock by Achievement Tec, and all proceedings of the stockholders,
the Board of Directors and committees of Achievement Tec since its incorporation
made available to SRM are the original stock ledgers, stock transfer books and
minute book records of Achievement Tec or exact copies thereof. Achievement Tec
is not in violation or breach of, or in default with respect to, any term of its
certificate of incorporation (or other charter document) or by-laws.
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(h) Achievement Tec (i) has not contributed to any pension,
profit-sharing, option, other incentive plan, or any other type of employee
benefit plan, (ii) maintains or has maintained, is or was a party to, and
otherwise participates and has participated in, on its own behalf or on behalf
of any former employees, any pension, profit-sharing, option, other incentive
plan, or any other type of employee benefit plan, or (iii) has any obligation
to, or customary arrangement with, former employees, if any, for bonuses,
incentive compensation, vacations, severance pay, sick pay, sick leave,
insurance, service award, relocation, disability, tuition refund, or other
benefits, whether oral or written, except as set forth in Schedule 6.02(h)
hereto.
(i) Neither Achievement Tec nor any director, officer, agent,
employee, or other person associated with, or acting on behalf of, Achievement
Tec has directly or indirectly: used any corporate funds for unlawful
contributions, gifts, entertainment, or other unlawful expenses relating to
political activity; made any unlawful payment to foreign or domestic government
officials or employees or to foreign or domestic political parties or campaigns
from corporate funds; violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended; or made any bribe, rebate, payoff, influence payment,
kickback, or other unlawful payment.
(j) Achievement Tec has all requisite power and authority to
execute, deliver, and perform this Agreement. All necessary corporate
proceedings of Achievement Tec have been duly taken to authorize the execution,
delivery, and performance of this Agreement. This Agreement has been duly
authorized, executed, and delivered by Achievement Tec, constitutes the legal,
valid, and binding obligation of Achievement Tec, and is enforceable as to
Achievement Tec in accordance with its terms, subject to applicable bankruptcy,
insolvency, and other laws affecting the enforceability of creditor's rights
generally. No consent, authorization, approval, order, license, certificate, or
permit of or from, or declaration or filing with, any federal, state, local, or
other
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governmental authority or any court or other tribunal is required by Achievement
Tec for the execution, delivery, or performance of this Agreement by Achievement
Tec. No consent of any party to any contract, agreement, instrument, lease,
license, arrangement, or understanding to which Achievement Tec is a party, or
to which its businesses, properties, or assets are subject, is required for the
execution, delivery, or performance of this Agreement; and the execution,
delivery, and performance of this Agreement will not violate, result in a breach
of, conflict with, or (with or without the giving of notice or the passage of
time or both) entitle any party to terminate or call a default under, entitle
any party to receive rights or privileges that such party was not entitled to
receive before this Agreement was executed under, or create any obligation on
the part of Achievement Tec to which it was not subject immediately before this
Agreement was executed under, any term of any such contract, agreement,
instrument, lease, license, arrangement, or understanding, or violate or result
in a breach of any term of the certificate of incorporation (or other charter
document) or by-laws of Achievement Tec, or violate, result in a breach of, or
conflict with any law, rule, regulation, order, judgment, or decree binding on
Achievement Tec or to which its businesses, properties, or assets are subject.
Neither Achievement Tec nor any of its officers, directors, employees, or agents
has employed any broker or finder or incurred any liability for any fee,
commission, or other compensation payable by any person on account of alleged
employment as a broker or finder, or alleged performance of services as a broker
or finder, in connection with, or as a result of, this Agreement, the Merger, or
the other transactions contemplated by this Agreement.
(k) No representation or warranty by Achievement Tec in this
Agreement contains, or (except for changes beyond the control of Achievement
Tec) at the Effective Time will contain, an untrue statement of material fact or
omits, or (except for changes beyond the control of
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Achievement Tec) at the Effective Time will omit, to state a material fact
required to be stated therein or necessary to make the statements made not
misleading.
VII. COVENANTS.
SECTION 7.01 COVENANTS OF SRM AND ACQUISITION.
SRM and Acquisition, jointly and severally, hereby covenant to Achievement
Tec as follows:
(a) Until the Release Time, SRM and Acquisition will immediately
advise Achievement Tec in a detailed written notice of any fact or occurrence or
any pending or threatened occurrence of which either such corporation obtains
knowledge and which (if existing and known at the date of the execution of this
Agreement) would have been required to be set forth or disclosed in or pursuant
to this Agreement or which, if existing and known at any time prior to or at the
Effective Time, would make the performance by any party of a covenant contained
in this Agreement impossible or make such performance materially more difficult
than in the absence of such fact or occurrence.
(b) Before SRM or Acquisition releases any information concerning
this Agreement, the Merger, or any of the other transactions contemplated by
this Agreement, which is intended for, or may result in, public dissemination
thereof, SRM and Acquisition shall furnish drafts of all documents or proposed
oral statements to Achievement Tec for comment, and shall not release any such
information without the written consent of Achievement Tec, which consent shall
not be unreasonably withheld. Nothing contained herein shall prevent SRM and
Acquisition from releasing any information if required to do so by law.
(c) Until the Release Time, no amendment will be made in the
certificate of incorporation or by-laws of SRM or of Acquisition.
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(d) Until the Release Time, SRM and Acquisition will afford the
officers, directors, employees, counsel, agents, accountants, and other
representatives of Achievement Tec free and full access to the plants,
properties, books, and records of SRM and Acquisition, will permit them to make
extracts from, and copies of, such books and records, and will from time to time
furnish Achievement Tec with such additional financial and operating data and
other information as to the financial condition, results of operations,
businesses, properties, assets, liabilities, or future prospects of SRM and
Acquisition as Achievement Tec from time to time may request.
(e) Until the Release Time, SRM and Acquisition will conduct their
respective affairs, and SRM will cause the affairs of Acquisition to be
conducted, so that at the Effective Time no representation or warranty of SRM or
Acquisition will be inaccurate, no covenant or agreement of SRM or Acquisition
will be breached, and no condition in this Agreement will remain unfulfilled by
reason of the actions or omissions of SRM or Acquisition. Until the Release
Time, Acquisition will conduct no affairs, except in connection with this
Agreement, the Merger, or any of the other transactions contemplated by this
Agreement.
(f) Neither SRM nor Acquisition shall make any agreement or reach
any understanding not approved in writing by Achievement Tec as a condition for
obtaining any consent, authorization, approval, order, license, certificate, or
permit required for the consummation of the transactions contemplated by this
Agreement.
(g) If, prior to the Effective Time, SRM Common Stock shall be
recapitalized or reclassified or SRM shall effect any stock dividend, stock
split, or reverse stock split of SRM Common Stock, then the shares of SRM Common
Stock to be delivered under this Agreement or upon exercise, conversion, or
exchange of any security to be delivered under this Agreement or
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assumed by SRM as contemplated by this Agreement shall be appropriately and
equitably adjusted to the kind and amount of shares of stock and other
securities and property to which the holders of such shares of SRM Common Stock
or such other security would have been entitled to receive had such stock or
such other security been issued and outstanding as of the record date for
determining stockholders entitled to participate in such corporate event.
(h) SRM shall timely prepare and file any declaration or filing
necessary to comply with any transfer tax statutes that require any such filing
before the Effective Time.
(i) SRM agrees to indemnify and hold harmless Achievement Tec's
officers, directors, employees, agents, and counsel, in each case past, present,
or as they may exist at any time after the date of this Agreement, and each
person, if any, who controls, controlled, or will control Achievement Tec within
the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, and, if the Merger is abandoned or terminated pursuant to Article VIII or
otherwise, except solely as a result of a breach of this Agreement by
Achievement Tec, Achievement Tec (the "Achievement Tec Indemnitees"), against
any and all losses, liabilities, claims, damages, and expenses whatsoever as and
when incurred arising out of, based upon, or in connection with (A) any untrue
statement or alleged untrue statement of a material fact contained in any
application or other document or communication executed by, or on behalf of, SRM
or Acquisition filed with any governmental authority in connection with the
Merger or filed with any securities exchange; or any omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, provided in each case that such
untrue statement, alleged untrue statement, omission, or alleged omission
relates to information furnished by, or on behalf of, or pertaining to, SRM,
Acquisition, or any SRM security holder, (B) any breach of any representation,
warranty, covenant, or agreement of SRM or Acquisi-
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tion contained in this Agreement, and (C), if the Merger is consummated, any
act, alleged act, omission, or alleged omission occurring at or prior to the
Effective Time, including, without limitation, any which arise out of, are based
upon, or are in connection with any of the transactions contemplated by this
Agreement. The foregoing agreement to indemnify shall be in addition to any
liability SRM may otherwise have, including liabilities arising under this
Agreement.
(j) SRM shall have issued and sold to designees of Williams
Investments and NIR an aggregate of 2,500,000 shares of SRM Common Stock prior
to the Effective Time.
SECTION 7.02 COVENANTS OF ACHIEVEMENT TEC.
(a) Until the Effective Time, Achievement Tec will immediately
advise SRM and Acquisition in a detailed written notice of any fact or
occurrence or any pending or threatened occurrence of which it obtains knowledge
and which, if existing and known at the date of the execution of this Agreement,
would have been required to be set forth or disclosed in or pursuant to this
Agreement or which, if existing and known at any time prior to or at the
Effective Time, would make the performance by any party of a covenant contained
in this Agreement impossible or make such performance materially more difficult
than in the absence of such fact or occurrence.
(b) Before Achievement Tec releases any information concerning this
Agreement, the Merger, or any of the other transactions contemplated by this
Agreement which is intended for, or may result in, public dissemination thereof,
Achievement Tec shall furnish drafts of all documents or proposed oral
statements to SRM for comment, and shall not release any such information
without the written consent of SRM, which consent shall not be unreasonably
withheld. Nothing contained herein shall prevent Achievement Tec from releasing
any information if required to do so by law.
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(c) Until the Release Time, no amendment will be made in the
certificate of incorporation or by-laws of Achievement Tec.
(d) Until the Release Time, no share of capital stock of Achievement
Tec, option or warrant for any such share, right to subscribe to or purchase any
such share, or security convertible into or exchangeable for any such share,
shall be issued or sold by Achievement Tec, otherwise than (i) in connection
with the issuance and sale of additional shares of Achievement Tec Preferred
Shares to designees of NIR or upon the conversion of such shares of Achievement
Tec Preferred Stock, or (ii) in connection with any acquisition by Achievement
Tec or any affiliate thereof.
(e) Until the Release Time, no dividend or liquidating or other
distribution or stock split shall be authorized, declared, paid, or effected by
Achievement Tec in respect of the outstanding shares of Achievement Tec Common
Stock. Until the Release Time, no direct or indirect redemption, purchase, or
other acquisition shall be made by Achievement Tec of Achievement Tec Common
Stock.
(f) Until the Release Time, except in connection with the issuance
and sale of shares of Achievement Tec Preferred Stock referred to Section
7.01(j) hereof, Achievement Tec shall not borrow money, guarantee the borrowing
of money, engage in any transaction, or enter into any material agreement,
except in the ordinary course of business.
(g) Until the Release Time, Achievement Tec will afford the
officers, directors, employees, counsel, agents, accountants, and other
representatives of SRM and lenders, investors, and prospective lenders and
investors free and full access to the plants, properties, books, and records of
Achievement Tec and will permit them to make extracts from and copies of such
books and records, and will from time to time furnish SRM with such additional
financial and operating
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data and other information as to the financial condition, results of operations,
businesses, properties, assets, liabilities, or future prospects of Achievement
Tec as SRM from time to time may request.
(h) Until the Release Time, Achievement Tec will conduct its affairs
so that at the Effective Time no representation or warranty of Achievement Tec
will be inaccurate, no covenant or agreement of Achievement Tec will be
breached, and no condition in this Agreement will remain unfulfilled by reason
of the actions or omissions of Achievement Tec. Except as otherwise requested by
SRM in writing, until the Release Time, Achievement Tec use its best efforts to
preserve the business operations of Achievement Tec intact, to keep available
the services of its present personnel, to preserve in full force and effect the
contracts, agreements, instruments, leases, licenses, arrangements, and
understandings of Achievement Tec, and to preserve the good will of their
suppliers, customers, and others having business relations with any of them.
Until the Release Time, Achievement Tec will conduct its affairs in all respects
only in the ordinary course.
(i) Until the Release Time, subject to the fiduciary duties of
Achievement Tec's officers and directors, Achievement Tec shall not, and shall
not authorize or permit any officer, director, employee, counsel, agent,
accountant, or other representative of Achievement Tec, directly or indirectly,
to: (i) initiate contact with any person or entity in an effort to solicit any
Achievement Tec Takeover Proposal (as is defined in this Section 7.02(i)); (ii)
cooperate with, furnish, or cause to be furnished any non-public information
concerning the financial condition, results of operations, businesses,
properties, assets, liabilities, or future prospects of Achievement Tec to any
person or entity in connection with any Achievement Tec Takeover Proposal; (iii)
negotiate with any person or entity with respect to any Achievement Tec Takeover
Proposal; or (iv) enter into any agreement or understanding with the intent to
effect an Achievement Tec Takeover Proposal. Achievement Tec will immediately
give written notice to SRM of the details of any Achievement Tec Takeover
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Proposal of which Achievement Tec becomes aware. "Achievement Tec Takeover
Proposal" shall mean "any proposal, other than as contemplated by this
Agreement, for a merger, consolidation, reorganization, other business
combination, or recapitalization involving Achievement Tec, for the acquisition
of a 5% or greater interest in the equity or in any class or series of capital
stock of Achievement Tec, for the acquisition of the right to cast 5% or more of
the votes on any matter with respect to Achievement Tec, or for the acquisition
of a substantial portion of any of the assets of Achievement Tec other than in
the ordinary course of its business, the effect of which may be to prohibit,
restrict, or delay the consummation of the Merger or any of the other
transactions contemplated by this Agreement or impair the contemplated benefits
to SRM or Acquisition of the Merger or any of the other transactions
contemplated by this Agreement."
(j) Achievement Tec shall not make any agreement or reach any
understanding not approved in writing by SRM as a condition for obtaining any
consent, authorization, approval, order, license, certificate, or permit
required for the consummation of the transactions contemplated by this
Agreement.
(k) Achievement Tec agrees to indemnify and hold harmless SRM's and
Acquisition's respective officers, directors, employees, agents, and counsel, in
each case past, present, or as they may exist at any time after the date of this
Agreement, and each person, if any, who controls, controlled, or will control
SRM or Acquisition within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act and, if the Merger is abandoned or terminated
pursuant to Article VIII or otherwise except solely as a result of a breach of
this Agreement by SRM, SRM (the "SRM Indemnitees") against any and all losses,
liabilities, claims, damages, and expenses whatsoever (which shall include, for
all purposes of this Section 7.02(k), without limitation, reasonable counsel
fees and any and all reasonable expenses whatsoever
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incurred in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts paid
in settlement of any claim or litigation, in each case whether or not involving
a third party) as and when incurred arising out of, based upon, or in connection
with (i) any untrue statement or alleged untrue statement of a material fact
contained in any application or other document or communication decided by, or
on behalf of, Achievement Tec filed with any governmental authority in
connection with the Merger; or any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, provided in each case that such untrue statement,
alleged untrue statement, omission, or alleged omission relates to information
furnished by, or on behalf of, or pertaining to, Achievement Tec or any
Achievement Tec security holder, or (ii) any breach of any representation,
warranty, covenant, or agreement of Achievement Tec contained in this Agreement.
The foregoing agreement to indemnify shall be in addition to any liability
Achievement Tec may otherwise have, including liabilities arising under this
Agreement.
VIII. ABANDONMENT AND TERMINATION.
SECTION 8.01 RIGHT OF SRM AND ACQUISITION TO ABANDON.
SRM's and Acquisition's Boards of Directors shall have the right to
abandon or terminate the Merger if any of the following shall not be true or
shall not have occurred, as the case may be, as of the specified date or dates:
(a) All representations and warranties of Achievement Tec contained
in this Agreement shall be accurate when made and, shall be accurate as of the
Effective Time by Achievement Tec and regardless of knowledge or lack thereof on
the part of Achievement Tec or changes beyond its control; as of the Effective
Time, Achievement Tec shall have performed and complied with all covenants and
agreements and satisfied all conditions required to be performed
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and complied with by it at or before the Effective Time by this Agreement; and
SRM and Acquisition shall have received a certificate executed by the chief
executive officer and the chief financial officer of Achievement Tec dated the
Effective Time, to that effect.
(b) Achievement Tec shall have delivered to SRM and Acquisition at
or prior to the Effective Time such other documents (including certificates of
officers of Achievement) as SRM may reasonably request in order to enable SRM
and Acquisition to determine whether the conditions to their obligations under
this Agreement have been met and otherwise to carry out the provisions of this
Agreement.
(c) There shall not have been instituted or threatened any legal
proceeding relating to, or seeking to prohibit or otherwise challenge the
consummation of, the transactions contemplated by this Agreement or to obtain
substantial damages with respect thereto.
(d) There shall not have been any action taken, or any law, rule,
regulation, order, judgment, or decree proposed, promulgated, enacted, entered,
enforced, or deemed applicable to the transactions contemplated by this
Agreement, by any federal, state, local, or other governmental authority or by
any court or other tribunal, including the entry of a preliminary or permanent
injunction, which (i) makes this Agreement, the Merger, or any of the other
transactions contemplated by, or in connection with, this Agreement, illegal;
(ii) results in a delay in the ability of Achievement Tec, SRM, or Acquisition
to consummate the Merger or any of the other transactions contemplated by this
Agreement; (iii) requires the divestiture by SRM of a material portion of the
business of SRM or of Achievement Tec; (iv) imposes material limitations on the
ability of SRM effectively to exercise full rights of ownership of shares of the
Surviving Corporation, including the right to vote such shares on all matters
properly presented to the stockholders of the Surviving Corporation; or (v)
otherwise materially prohibits, restricts, or delays
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consummation of the Merger or any of the other transactions contemplated by this
Agreement, or materially impairs the contemplated benefits to SRM or Acquisition
of this Agreement, the Merger, or any of the other transactions contemplated by
this Agreement.
(e) The parties to this Agreement shall have obtained at or prior to
the Effective Time all consents required for the consummation of the Merger and
the other transactions contemplated by this Agreement from any party to any
contract, agreement, instrument, lease, license, arrangement, or understanding
to which any of them is a party, or to which any of them or any of their
respective businesses, properties, or assets are subject.
(f) Prior to the Effective Time, SRM and Acquisition shall conduct a
due diligence review of Achievement Tec and shall be reasonably satisfied with
the result of such review.
SECTION 8.02 RIGHT OF ACHIEVEMENT TEC TO ABANDON.
Achievement Tec's Board of Directors shall have the right to abandon
or terminate the Merger if any of the following shall not be true or shall not
have occurred, as the case may be, as of the specified date or dates:
(a) All representations and warranties of SRM and Acquisition
contained in this Agreement shall be accurate when made and as of the Effective
Time as though such representations and warranties were then made and regardless
of knowledge, or lack thereof, on the part of SRM and Acquisition or changes
beyond their control. As of the Effective Time, SRM and Acquisition shall have
performed and complied with all covenants and agreements and satisfied all
conditions required to be performed and complied with by any of them at or
before the Effective Time by this Agreement and Achievement Tec shall have
received certificates executed by the chief
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executive officer and chief financial officer of each of SRM and Acquisition,
dated the Effective Time, to that effect.
(b) SRM and Acquisition shall have delivered to Achievement Tec at
or prior to the Effective Time such other documents (including certificates of
officers of SRM and/or Acquisition) as Achievement Tec may reasonably request in
order to enable Achievement Tec to determine whether the conditions to its
obligations under this Agreement have been met and otherwise to carry out the
provisions of this Agreement.
(c) All actions, proceedings, instruments, and documents required by
SRM or Acquisition to carry out this Agreement or incidental thereto and all
other related legal matters shall be subject to the reasonable approval of Brock
Silverstein LLC, counsel to Achievement Tec, and SRM and Acquisition shall have
furnished such counsel such documents as such counsel may have reasonably
requested for the purpose of enabling them to pass upon such matters.
(d) There shall not have been instituted or threatened any legal
proceeding relating to, or seeking to prohibit or otherwise challenge the
consummation of, the transactions contemplated by this Agreement, or to obtain
substantial damages with respect thereto.
(e) There shall not have been any action taken, or any law, rule,
regulation, order, judgment, or decree proposed, promulgated, enacted, entered,
enforced, or deemed applicable to the transactions contemplated by this
Agreement by any federal, state, local, or other governmental authority or by
any court or other tribunal, including the entry of a preliminary or permanent
injunction, which, in the reasonable judgment of Achievement Tec (i) makes this
Agreement, the Merger, or any of the other transactions contemplated by this
Agreement illegal, (ii) results in a delay in the ability of SRM, Acquisition,
or Achievement Tec to consummate the Merger or any of the other transactions
contemplated by this Agreement, or (iii) otherwise prohibits,
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restricts, or delays consummation of the Merger or any of the other transactions
contemplated by this Agreement or impairs the contemplated benefits to the
stockholders of Achievement Tec of this Agreement, the Merger, or any of the
other transactions contemplated by this Agreement.
(f) At or prior to the Effective Time, SRM and Acquisition shall
have made all filings, and taken all actions, necessary to comply with all
applicable "blue-sky" laws with regard to the issuance of SRM Common Stock as
contemplated by this Agreement. Without limiting the generality of the
foregoing, any prescribed periods within which a "blue-sky" or securities law
administrator may disallow SRM's or Acquisition's notice of reliance on an
exemption from such state's requirements, shall have elapsed at or prior to the
Effective Time.
(g) The parties to this Agreement shall have obtained at or prior to
the Effective Time all consents required for the consummation of the Merger and
the other transactions contemplated by this Agreement from any party to any
contract, agreement, instrument, lease, license, arrangement, or understanding
to which any of them is a party, or to which any of them or any of their
respective businesses, properties, or assets are subject.
(h) Prior to the Effective Time, Achievement Tec shall conduct a due
diligence review of SRM and Acquisition and shall be reasonably satisfied with
the results of such review.
(i) SRM shall have consummated the sale of shares of SRM Common
Stock referred to in Section 7.01(j).
SECTION 8.03 ADDITIONAL TERMS OF ABANDONMENT.
In addition to the provisions of Section 8.01 and 8.02, the Merger may be
abandoned or terminated at or before the Effective Time notwithstanding adoption
and approval of this Agreement, the Merger, and the other transactions
contemplated hereby by the stockholders of Acquisition and Achievement Tec:
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(i) by mutual agreement of the Boards of Directors of SRM,
Acquisition, and Achievement Tec;
(ii) at the option of SRM's and Acquisition's Boards of
Directors or Achievement Tec's Board of Directors, if the Effective Time shall
not have occurred on or before May 31, 2000;
(iii) at the option of SRM's and Acquisition's Boards of
Directors, if facts exist which render impossible compliance with one or more of
the conditions set forth in Section 8.01 and such are not waived by Achievement
Tec; and
(iv) at the option of Achievement Tec's Board of Directors, if
facts exist which render impossible compliance with one or more of the
conditions set forth in Section 8.02 and such are not waived by SRM and
Acquisition.
SECTION 8.04 EFFECT OF ABANDONMENT.
If the Merger is rightfully abandoned or terminated as provided for
in Article VII or in this Article VIII:
(a) except for Sections 7.01(i), 7.02(k), and 8.04(b), this
Agreement shall become wholly void and of no further force or effect without
liability on the part of either party to this Agreement or on the part of any
officer, director, controlling person (if any), employee, counsel, agent, or
stockholder thereof; provided, however, that nothing in this Section 8.04(a)
shall release SRM, Acquisition, or Achievement Tec or any officer, director,
controlling person (if any), employee, counsel, agent, or stockholder thereof
from liability for a willful failure to carry out its respective obligations
under this Agreement; and
(b) each of SRM, Acquisition, and Achievement Tec shall pay and bear
its own fees and expenses incident to the negotiation, preparation, and
execution of this Agreement and its
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meeting of stockholders (if required), including fees and expenses of its
counsel, accountants, and other experts.
IX. MISCELLANEOUS.
SECTION 9.01 FURTHER ACTIONS. At any time and from time to time, each
party agrees, at its own expense, to take such actions and to execute and
deliver such documents as may be reasonably necessary to effectuate the purposes
of this Agreement.
SECTION 9.02 AVAILABILITY OF EQUITABLE REMEDIES. Since a breach of the
provisions of this Agreement could not adequately be compensated by money
damages, any party shall be entitled, in addition to any other right or remedy
available to it, to an injunction restraining such breach or threatened breach
and to specific performance of any such provision of this Agreement, and no bond
or other security shall be required in connection therewith, and the parties
hereby consent to the issuance of such an injunction and to the ordering of
specific performance.
SECTION 9.03 SURVIVAL. Each of the covenants, agreements, representations,
and warranties contained in this Agreement shall survive the Effective Time. The
statements contained in any document executed by either SRM or Acquisition
relating hereto or delivered to Achievement Tec in connection with the
transactions contemplated hereby or thereby, or in any statement, certificate,
or other instrument delivered by, or on behalf of, either SRM or Acquisition
pursuant hereto or thereto or delivered to Achievement Tec in connection with
the transactions contemplated hereby or thereby shall be deemed representations
and warranties, covenants and agreements, or conditions, as the case may be, of
SRM or Acquisition, respectively, hereunder for all purposes of this Agreement
(including all statements, certificates, or other instruments delivered pursuant
hereto or thereto or delivered in connection with this Agreement, the Merger, or
any of the other transactions contemplated hereby or thereby). The statements
contained in any document executed by
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Achievement Tec relating hereto or delivered to either SRM or Acquisition in
connection with the transactions contemplated hereby or thereby, or in any
statement, certificate, or other instrument delivered by, or on behalf of,
Achievement Tec pursuant hereto or thereto or delivered to either SRM or
Acquisition in connection with the transactions contemplated hereby or thereby
shall be deemed representations and warranties, covenants and agreements, or
conditions, as the case may be, of Achievement Tec hereunder for all purposes of
this Agreement (including all statements, certificates, or other instruments
delivered pursuant hereto or thereto or delivered in connection with this
Agreement, the Merger, or any of the other transactions contemplated hereby or
thereby).
SECTION 9.04 ENTIRE AGREEMENT; MODIFICATION. This Agreement sets forth the
entire understanding of the parties with respect to the subject matter hereof
(except as provided in Section 9.03), supersedes all existing agreements among
them concerning such subject matter, and may be modified only by a written
instrument duly executed by each party hereto.
SECTION 9.05 NOTICES. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested or by the most nearly comparable method
if mailed from or to a location outside of the United States or by Federal
Express, Express Mail, or similar overnight delivery or courier service or
delivered (in person or by telecopy, telex, or similar telecommunications
equipment) against receipt to the party to which it is to be given at the
address of such party set forth in the introductory paragraph to this Agreement
(or to such other address as the party shall have furnished in writing in
accordance with the provisions of this Section 9.05.) Any notice shall be
addressed to the attention of the Corporate Secretary. A copy of any and all
notices to Achievement Tec shall be delivered in accordance with this section to
Brock Silverstein LLC, 800 Third Avenue, 21st Floor, New York 10022, Attention:
Robert Steven Brown, Esq. Any notice or other communication given by certified
mail (or by such
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comparable method) shall be deemed given at the time of certification thereof
(or comparable act), except for a notice changing a party's address which will
be deemed given at the time of receipt thereof. Any notice given by other means
permitted by this Section 9.05 shall be deemed given at the time of receipt
thereof.
SECTION 9.06 WAIVER. Any waiver by any party of a breach of any term of
this Agreement shall not operate as, or be construed to be, a waiver of any
other breach of that term or of any breach of any other term of this Agreement.
The failure of a party to insist upon strict adherence to any term of this
Agreement on one or more occasions will not be considered a waiver or deprive
that party of the right thereafter to insist upon strict adherence to that term
or any other term of this Agreement. Any waiver must be in writing and be
authorized by a resolution of the Board of Directors or by a duly authorized
officer of the waiving party.
SECTION 9.07. BINDING EFFECT. The provisions of this Agreement shall be
binding upon and inure to the benefit of SRM, Acquisition, and Achievement Tec
and their respective successors and assigns; provided, however, that no party
hereto shall have the right to assign its rights and obligations hereunder
without the prior written consent of the other parties hereto.
SECTION 9.08 NO THIRD-PARTY BENEFICIARIES. This Agreement does not create,
and shall not be construed as creating, any rights enforceable by any person not
a party to this Agreement, except as provided in Section 9.07, except for the
indemnitees referenced in Sections 7.01(I) and 7.02(k) hereof.
SECTION 9.09 SEPARABILITY. If any provision of this Agreement is invalid,
illegal, or unenforceable, the balance of this Agreement shall remain in effect,
and if any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.
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SECTION 9.10 HEADINGS. The headings in this Agreement are solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
SECTION 9.11 COUNTERPARTS; GOVERNING LAW. 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. It shall be
governed by, and construed in accordance with, the laws of the State of Texas,
without giving effect to conflict of laws.
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IN WITNESS WHEREOF, this Agreement has been executed by duly authorized
officers of each of the parties hereto as of the date first above written.
SILVER RAMONA MINING COMPANY INC.
BY:
-------------------------------
NAME:
TITLE:
ACHIEVEMENT TEC ACQUISITION, INC.
BY:
-------------------------------
NAME:
TITLE:
ACHIEVEMENT TEC, INC.
BY:
-------------------------------
NAME:
TITLE:
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ADDENDUM TO
AGREEMENT AND PLAN OF MERGER
THIS ADDENDUM TO AGREEMENT AND PLAN OF MERGER (hereinafter the
"Addendum"), is made and entered into as of the first day of July, 2000, by and
among SILVER RAMONA MINING COMPANY, a Delaware corporation (hereinafter "SRM");
ACHIEVEMENT TECH ACQUISITION, INC., a Delaware corporation and a wholly-owned
subsidiary of SRM; and ACHIEVEMENT TEC, INC., a Texas corporation (hereinafter
"Achievement Tec"); and is intended to amend that certain Agreement and Plan of
Merger executed by the parties hereto on May 9, 2000 (the "Merger Agreement").
RECITALS:
WHEREAS, the parties hereto desire to amend the Merger Agreement and add
the terms and conditions contained herein; and
WHEREAS, the parties hereto desire that all other terms and conditions of
the Merger Agreement not specifically amended hereby shall remain in full force
and effect.
NOW, THEREFORE, in consideration of the premises herein contained, the
parties hereby agree as follows:
1. The parties hereto agree that the Merger Agreement shall be amended to
provide that consummation of the Merger and the other transactions contemplated
by the Merger Agreement shall be contingent upon the following provision:
Immediately prior to the Effective Time (as defined in Article
IV of the Merger Agreement), Achievement Tec will have received
the aggregate sum of THREE HUNDRED THOUSAND DOLLARS ($300,000)
in financing, $200,000 of which shall be for pre-merger capital
stock of Achievement Tec and $100,000 of which shall be in
consideration of the issuance of a promissory note or notes by
Achievement Tec in the aggregate principal amount of $100,000.
Such funds will be in cash or cash equivalent and are to be used
for the general corporate and working capital purposes of
Achievement Tec, which, pursuant to the terms of the Merger
Agreement, shall be a wholly-owned subsidiary of SRM following
the Effective Time. At the time the funds are deposited with
Achievement Tec, a separate document will be delivered to SRM
giving a summary of the intended use of proceeds and the amount
to be designated for each use. If the $300,000 is not deposited
with Achievement Tec at the time of the proposed Effective Time,
the Merger Agreement shall be deemed to be terminated.
2. All other provisions, terms and conditions of the Merger Agreement
shall remain in full force and effect and shall not be altered or amended except
as otherwise provided herein.
3. All capitalized terms used, but not otherwise defined, herein, shall
have the respective meanings ascribed to them in the Merger Agreement.
4. This Addendum shall be governed by, and construed in accordance with,
the laws of the State of New York, without regard to its conflicts of laws
principles.
5. This Addendum may be executed in one or more counterparts, each such
counterpart to be deemed an original instrument, but all of which such
counterparts together shall constitute but one agreement.
6. This Addendum may not be modified or amended, nor any provision hereof
waived, by any party, except by a writing executed by each of the parties
hereto.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Addendum to Agreement and Plan of Merger in a manner legally binding upon them
as of the date first above written.
SILVER RAMONA MINING COMPANY
By: /s/ Dale B. Lavigne
------------------------------
Name: Dale B. Lavigne
Title: Secretary
ACHIEVEMENT TEC ACQUISITION, INC.
By: /s/ Robert S. Turnbow
------------------------------
Name: Robert S. Turnbow
Title: Robert S. Turnbow
ACHIEVEMENT TEC INC.
By: /s/ Milton S. Cotter
------------------------------
Name: Milton S. Cotter
Title: President
