SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) July 31, 1998
----------------------
SITEK, Incorporated
(Formerly known as DentMart Group, Inc. and Elgin Corporation)
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(Exact name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
33-28417 95-4585824
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(Commission File Number) (I.R.S. Employer Identification No.)
1817 West 4th Street, Tempe, Arizona 85281
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(Address of Principal Executive Offices) (Zip Code)
(602) 921-8555
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(Registrant's Telephone Number, Including Area Code)
DentMart Group, Inc., 192 Searidge Court, Shell Beach, California 93449
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(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 1. Changes in Control of Registrant
--------------------------------
(a) 1. Effective July 31, 1998, pursuant to the terms of a Stock
Purchase and Exchange Agreement dated as of the 14th day of July, 1998, which
became effective on July 31, 1998 (the "Exchange Agreement") SITEK,
Incorporated, a Delaware corporation (the "Registrant" or "SITEK"), acquired all
of the issued and outstanding common stock of CMP Solutions, Inc., an Arizona
corporation ("CMP"), in exchange for 9,200,000 shares, or approximately 75.2% of
the common capital stock of the Registrant. The terms of the acquisition are
more fully described in the Exchange Agreement, a copy of which is attached as
Exhibit 10.1 hereto. The Registrant's shares were issued to the shareholders of
CMP in the respective numbers of shares set forth opposite the name of each.
Immediately following this exchange, the recipients owned the percentage set
opposite their names of the common capital stock of the Registrant.
No. of Shares
Name of Common Stock % of Common Stock
- --------------- --------------- -----------------
Julian Gates 1,186,200 9.7%
Mark G. Simon 1,186,200 9.7%
Vince Birdwell 952,054 7.8%
Paul Burke 539,463 4.4%
Don Jackson, Jr. 1,186,200 9.7%
Paul Jackson 1,186,200 9.7%
Parag Modi 1,186,200 9.7%
Kevin Jackson 948,960 7.8%
Lowell R. Myers 189,792 1.6%
Peter Wilson 638,731 5.2%
2. In connection with the Exchange Agreement, Mark A. DiSalvo
resigned as the sole officer and director of the Registrant, effective July 31,
1998. Mr. Don Jackson, Jr. was elected as a member of the board of directors,
president and chief executive officer and Mr. Paul Jackson was elected secretary
of the Registrant on July 31, 1998. Paul Jackson is the son of Don Jackson, Jr.
(b) There are no arrangements known to the Registrant, including any pledge
by any person of securities of Registrant or any of its parents, the operation
of which may at a subsequent date result in a change in control of Registrant.
Item 2. Acquisition and Disposition of Assets.
--------------------------------------
Pursuant to the terms of the Exchange Agreement, the Registrant
acquired all of the outstanding shares of common stock of CMP, agreed to pay
Mark A. DiSalvo $125,000 for his efforts in negotiating and completing the
Exchange Agreement and entered into a registration rights
2
<PAGE>
agreement with the CMP shareholders (the "Registration Rights Agreement").
Pursuant to the Registration Rights Agreement, under certain conditions the CMP
shareholders can cause the Registrant, at its expense, to include their shares
of the Registrant's common stock in any registration of the Registrant's common
stock under the Securities Act of 1993. The terms of the CMP shareholders'
registration rights are more fully described in the Registration Rights
Agreement, a copy of which is attached as Exhibit 10.2 below. The terms of the
acquisition are more fully described in the Exchange Agreement, a copy of which
is attached as Exhibit 10.1 hereto. CMP is engaged in the businesses of
consulting, manufacturing, software, marketing and sales in the semiconductor
equipment industry. The Registrant intends to continue the same businesses.
Item 5. Other Events
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On July 14, 1998, to effectuate a change of domicile to Delaware from
Colorado, DentMart Group, Inc., a Colorado corporation ("DentMart"), merged with
SITEK, a wholly owned subsidiary of DentMart. In connection with this
redomestication merger, each shareholder of DentMart received one share of
SITEK's common stock for every 1.65 shares of DentMart's common stock, effecting
a one-for-1.65 reverse stock split. A copy of the Certificate of Ownership and
Merger, including the Plan and Agreement of Merger is attached as Exhibit 2.1. A
copy of the Articles of Merger or Share Exchange filed in the State of Colorado
is attached as Exhibit 2.2.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
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a) Financial Statements of Businesses Acquired
It is impracticable to provide the required financial information at
the time of the filing of this report. The required financial information will
be filed no later than 60 days after this report on Form 8-K for the acquisition
of CMP must be filed.
c) Exhibits
2.1 A copy of the Certificate of Ownership and Merger merging DentMart
into SITEK, including the Plan and Agreement of Merger, is attached as Exhibit
2.1.
2.2 A copy of the Articles of Merger or Share Exchange filed in the
State of Colorado is attached as Exhibit 2.2.
3
<PAGE>
3.1 A copy of the Articles of Incorporation of SITEK, Incorporated is
attached as Exhibit 3.1.
10.1 A copy of the Exchange Agreement is attached as Exhibit 10.1.
10.2 A copy of the Registration Rights Agreement is attached as Exhibit
10.2.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SITEK, Incorporated
(Registrant)
Date: July 31, 1998 By: /s/ Don Jackson, Jr.
---------------------
Don Jackson, Jr., President, Director
and Chief Executive Officer
4
EXHIBIT 2.1
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
DENTMART GROUP, INC.
A COLORADO CORPORATION
INTO
SITEK, INCORPORATED
A DELAWARE CORPORATION
Dentmart Group, Inc., a corporation organized and existing under the
laws of the State of Colorado,
DOES HEREBY CERTIFY:
FIRST: That this corporation was incorporated on the 16th day of
January, 1991, pursuant to the Colorado Business Corporation Act of the State of
Colorado, the provisions of which permit the merger of a parent corporation of
said state into a subsidiary corporation organized and existing under the laws
of another state.
SECOND: That this corporation owns all of the outstanding shares of the
stock of SITEK, Incorporated, a corporation incorporated on the 30th day of
June, 1998, pursuant to the Delaware Corporation Law of the State of Delaware.
THIRD: That this corporation, by the following resolutions of its Board
of Directors, duly adopted by the unanimous written consent of its members,
filed with the minutes of the Board on the 10th day of July, 1998, determined to
and did merge itself into said SITEK, Incorporated:
RESOLVED, that Dentmart Group, Inc. merge, and it hereby does merge
itself into said SITEK, Incorporated and SITEK, Incorporated does hereby assume
all the obligations of Dentmart Group, Inc.;
FURTHER RESOLVED, that the merger shall be effective upon the date of
filing with the Secretary of State of Delaware.
FURTHER RESOLVED, that the terms and conditions of the merger are as
follows:
SITEK, INCORPORATED TO SUCCEED TO PROPERTIES AND OBLIGATIONS OF
CONSTITUENT CORPORATIONS. Upon the effective date of the merger, the separate
existence of Dentmart Group, Inc. shall cease and SITEK, Incorporated shall
continue in existence as the surviving corporation; whereupon, without further
act or deed, all the property, real, personal and mixed, and franchises of
Dentmart Group, Inc. and SITEK, Incorporated, and all debts due on whatever
account of either of them, including choses in action belonging to either of
them, shall be taken and deemed to be transferred to and vested in SITEK,
Incorporated.. The liabilities and obligations for Dentmart Group, Inc. and
SITEK, Incorporated shall not be affected, nor shall the rights of creditors
thereof or of any persons dealing with such corporations, or any liens upon the
property of such corporations, be impaired by the merger, and any existing claim
of either of such corporations may be prosecuted to judgment as if the merger
had not taken place, or SITEK, Incorporated may be proceeded against or
substituted in its place.
FURTHER ACTION. If at any time Dentmart Group, Inc. or SITEK,
Incorporated shall consider or be advised that any further assignments,
conveyances or assurances in law are necessary or desirable to carry out the
provisions hereof, the proper officers and directors of Dentmart Group, Inc. and
SITEK, Incorporated shall execute
<PAGE>
and deliver any and all proper deeds, assignments and assurances in law, and do
all things necessary or proper to carry out the provisions hereof.
CONVERSION OF STOCK. On the effective date of the merger as set forth
above, all of the issued and outstanding shares of stock of SITEK, Incorporated
held in the name of Dentmart Group, Inc. shall be canceled, and the issued and
outstanding Common Stock, par value $.001, of Dentmart Group, Inc. shall be
converted into shares of common stock, par value $.005, of SITEK, Incorporated
as follows: each holder of common stock of Dentmart Group, Inc. shall be
entitled to receive one (1) share of the Common Stock, par value $.005, of
SITEK, Incorporated for each one and sixty-five hundredths (1.65) shares of
common stock, par value $.001, so held in Dentmart Group, Inc. Certificates
evidencing the number of shares of stock held by a shareholder in SITEK,
Incorporated shall be delivered as soon as practicable after surrender by such
shareholder of certificates evidencing all shares of stock held in Dentmart
Group, Inc.
BOARD OF DIRECTORS AND OFFICERS. On the effective date of the merger,
the officers and members of the Board of Directors of Dentmart Group, Inc. shall
resign, and the officers and members of the Board of Directors of SITEK,
Incorporated shall continue in office. The officers and members of the Board of
Directors of SITEK, Incorporated, and the respective positions that they hold,
shall not be changed or in any way affected by the merger.
FURTHER RESOLVED, that the proper officer of this corporation be and he
or she is hereby directed to make and execute a Certificate of Ownership and
Merger setting forth a copy of the resolutions to merge said Dentmart Group,
Inc. and assume its liabilities and obligations, and the date of adoption
thereof, and to cause the same to be filed with the Secretary of State and to do
all acts and things whatsoever, whether within or without the State of Delaware,
which may be in anywise necessary or proper to effect said merger.
FOURTH: The plan of merger is as set forth in the Plan and Agreement of
Merger by and between Dentmart Group, Inc. and SITEK, Incorporated, a true and
complete copy of which is attached hereto as Exhibit A and by this reference
incorporated herein.
FIFTH: Anything herein or elsewhere to the contrary notwithstanding,
this merger may be amended or terminated and abandoned by the Board of Directors
of Dentmart Group, Inc., at any time prior to the time that this merger filed
with the Secretary of State becomes effective.
IN WITNESS WHEREOF, said Dentmart Group, Inc. has caused this
Certificate to be signed by Mark A. DiSalvo, its president, this 10th day of
July, 1998.
DENTMART GROUP, INC.
By: /s/ Mark A. DiSalvo
--------------------------
Mark A. DiSalvo, President
<PAGE>
EXHIBIT A to Certificate of Merger
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PLAN AND AGREEMENT OF MERGER
This PLAN AND AGREEMENT OF MERGER (this "Plan and Agreement of Merger")
is made as of the 10th day of July, 1998, by and between SITEK, Incorporated, a
Delaware corporation (the "Subsidiary Corporation"), and Dentmart Group, Inc., a
Colorado corporation (the "Parent Corporation").
WHEREAS, it is in the best interests of the Parent Corporation to
effect a change of domicile from Colorado to Delaware; and
WHEREAS, the Subsidiary Corporation was formed for the express purpose
of effecting said change of domicile from Colorado to Delaware; and
WHEREAS, the Parent Corporation is authorized to issue 5,000,000 (five
million) shares of Common Stock, par value $.001 per share, of which 4,999,983
are issued and outstanding as of the date hereof and 2,000,000 (two million)
shares of Preferred Stock, par value $.01 per share, none of which are issued
and outstanding as of the date hereof; and
WHEREAS, the Subsidiary Corporation is authorized to issue 50,000,000
(fifty million) shares of Common Stock, par value $.005 per share, of which 100
(one hundred) shares are issued and outstanding as of the date hereof and
2,000,000 (two million) shares of Preferred Stock, par value $.01 per share,
none of which are issued and outstanding as of the date hereof; and
WHEREAS, the Parent Corporation owns all 100 (one hundred) shares of
the issued and outstanding stock of the Subsidiary Corporation.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth, it is agreed as follows:
1. MERGER. Upon the terms set forth herein, the Parent Corporation
shall be merged with and into the Subsidiary Corporation, and the Subsidiary
Corporation shall be the surviving corporation pursuant to the terms and
provisions of this Plan and Agreement of Merger in accordance with the laws of
the State of Delaware and the State of Colorado. The Certificate of
Incorporation of the Subsidiary Corporation shall continue in effect and shall
be its Certificate of Incorporation.
2. SITEK, INCORPORATED TO SUCCEED TO PROPERTIES AND OBLIGATIONS OF
CONSTITUENT CORPORATIONS. Upon the effective date of the merger, the separate
existence of the Parent Corporation shall cease and the Subsidiary Corporation
shall continue in existence as the surviving corporation; whereupon, without
further act or deed, all the property, real, personal and mixed, and franchises
of the Parent Corporation and the Subsidiary Corporation, and all debts due on
whatever account of either of them, including choses in action belonging to
either of them, shall be taken and deemed to be transferred to and vested in the
Subsidiary Corporation. The liabilities and obligations of the Parent
Corporation and the Subsidiary Corporation shall not be affected, nor shall the
rights of creditors thereof or of any persons dealing with such corporations, or
any liens upon the property of such corporations, be impaired by the merger, and
any existing claim of either of such corporations may be prosecuted to judgment
as if the merger had not taken place, or the Subsidiary Corporation may be
proceeded against or substituted in its place.
3. FURTHER ACTION. If at any time Parent Corporation or Subsidiary
Corporation shall consider or be advised that any further assignments,
conveyances or assurances in law are necessary or desirable to carry out the
provisions hereof, the proper officers and directors of the Parent Corporation
and the Subsidiary Corporation
<PAGE>
shall execute and deliver any and all proper deeds, assignments and assurances
in law, and do all things necessary or proper to carry out the provisions
hereof.
4. CONVERSION OF STOCK. On the effective date of the merger as set
forth below, all of the issued and outstanding shares of stock of the Subsidiary
Corporation held in the name of the Parent Corporation shall be canceled, and
the issued and outstanding Common Stock, par value $.001, of the Parent
Corporation shall be converted into shares of common stock, par value $.005, of
the Subsidiary Corporation as follows: each holder of common stock of the Parent
Corporation shall be entitled to receive one (1) share of the Common Stock, par
value $.005, of the Subsidiary Corporation for each one and sixty-five
hundredths (1.65) shares of common stock, par value $.001, so held in the Parent
Corporation. Certificates evidencing the number of shares of stock held by a
shareholder in the Subsidiary Corporation shall be delivered as soon as
practicable after surrender by such shareholder of certificates evidencing all
shares of stock held in the Parent Corporation.
5. EFFECTIVE DATE. This Plan and Agreement of Merger and the merger
herein provided for shall become effective and the separate existence of the
Parent Corporation, except insofar as it may be deemed continued by statute,
shall cease as soon as this Plan and Agreement of Merger shall have been
adopted, approved, signed, and acknowledged in accordance with the laws of the
State of Delaware and the State of Colorado and certificates of its adoption and
approval shall have been executed in accordance with such laws; and this Plan
and Agreement of Merger shall have been filed in the office of the Secretary of
State of the State of Delaware and in the office of the Secretary of State of
the State of Colorado.
6. BOARD OF DIRECTORS AND OFFICERS. On the effective date of the
merger, the officers and members of the Board of Directors of the Parent
Corporation shall resign, and the officers and members of the Board of Directors
of the Subsidiary Corporation shall continue in office. The officers and members
of the Board of Directors of the Subsidiary Corporation, and the respective
positions that they hold, shall not be changed or in any way affected by the
merger.
7. SERVICE OF PROCESS. The Subsidiary Corporation agrees that it may be
served with process in the State of Colorado in any proceeding for enforcement
of any obligation of the Parent Corporation, as well as for enforcement of any
obligation of the Subsidiary Corporation arising from the merger, including any
suit or other proceeding to enforce the right of any shareholders as determined
in appraisal proceedings and the Subsidiary Corporation does hereby irrevocably
appoint the Secretary of State of Colorado as its agent to accept service of
process in any such suit or other proceedings. A copy of such process shall be
mailed by the Secretary of State of the State of Colorado to the following
address:
SITEK, Incorporated
Mark A. DiSalvo
192 Searidge Court
Shell Beach, CA 93449
8. ABANDONMENT. This Plan and Agreement of Merger may be abandoned by
the mutual consent of the parties hereto, acting each by its Board of Directors,
at any time prior to the effective date of the merger. Upon abandonment, this
Plan and Agreement of Merger shall become wholly void and of no effect and there
shall be no further liability or obligation hereunder on the part of either of
the parties hereto or its respective Board of Directors or shareholders.
9. COUNTERPARTS. This Plan and Agreement of Merger may be executed in
any number of counterparts, each of which shall constitute an original
instrument.
<PAGE>
IN WITNESS WHEREOF, the parties to this Plan and Agreement of Merger
have duly executed it on the day and year first above written.
DENTMART GROUP, INC. SITEK, INCORPORATED
By: /s/ Mark A. DiSalvo By: /s/ Mark A. DiSalvo
-------------------------- --------------------------
Mark A. DiSalvo, President Mark A. DiSalvo, President
<PAGE>
I, Mark A. DiSalvo, Secretary of SITEK, Incorporated, a corporation
organized and existing under the laws of the State of Delaware, hereby certify,
as such Secretary, that the Plan and Agreement of Merger to which this
Certificate is attached, after having been first duly signed on behalf of the
said corporation and having been signed on behalf of Dentmart Group, Inc., a
corporation of the State of Colorado, was duly adopted pursuant to Section 228
of Title 8 of the Delaware Code by the unanimous written consent of the
stockholders holding 100 shares of the capital stock of the corporation, same
being all of the shares issued and outstanding having voting power, by which the
Plan and Agreement of Merger was thereby adopted as the act of the stockholders
of said SITEK, Incorporated and the duly adopted agreement and act of the said
corporation.
WITNESS my hand on this 10th day of July, 1998.
/s/ Mark A. DiSalvo
--------------------------
Mark A. DiSalvo, Secretary
EXHIBIT 2.2
STATE OF COLORADO
ARTICLES OF MERGER OR SHARE EXCHANGE
These same articles are made in accordance with Title 7, Article 111 of
the Colorado Revised Statutes.
1. The name of the surviving corporation is: SITEK, Incorporated
2. The address of the surviving corporation is: Corporation Trust Center
1209 Orange Street
Wilmington, Delaware
3. The merger plan is as follows: Dentmart Group, Inc., a Colorado
corporation, shall be merged with and into SITEK, Incorporated, its wholly owned
subsidiary for the purpose of changing the domicile of the Corporation from
Colorado to Delaware. The Certificate of Incorporation of SITEK, Incorporated
shall continue in effect and shall be its Certificate of Incorporation.
4. The number of shareholder votes required to approve the plan of merger
were cast by the shareholders of each corporation involved in this merger.
5. Immediately before the merger, Dentmart Group, Inc. owned at least 90%
of the outstanding stock shares of each class of SITEK, Incorporated.
6. The effective date of the merger is the date of filing of the
Certificate of Ownership and Merger with the Secretary of State of the State of
Delaware.
7. The street address of the Registered Office for Dentmart Group, Inc. in
the State of Colorado and the name of its registered agent at such address is
The Corporation Company, 1675 Broadway, Denver, Colorado 80202.
Dated: July 10, 1998 DENTMART GROUP, INC.
/s/ Mark A. Di Salvo
--------------------------
Mark A. DiSalvo, President
Dated: July 10, 1998 SITEK, INCORPORATED
/s/ Mark A. Di Salvo
--------------------------
Mark A. DiSalvo, President
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
SITEK, INCORPORATED
* * * * *
1. The name of the corporation is SITEK, INCORPORATED.
2. The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County
of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
3. The nature of the business or purposes to be conducted or promoted
is:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
4. The total number of shares of stock which the corporation shall have
authority to issue is: Fifty-Two Million (52,000,000) of which stock Fifty
Million (50,000,000) shares of the par value of No Dollars and 5/100th Cents
($0.005), shall be Common stock and of which Two Million (2,000,000) shares of
the par value of No Dollars and One Cents ($0.01) shall be Preferred stock.
5. The name and mailing address of each incorporator is as follows:
Name MAILING ADDRESS
--------------- ---------------------------------------
P. Akwei 818 W. Seventh Street, Los Angeles, CA 90017
The name and mailing address of each person who is to serve as a
director until the first annual meeting of the stockholders or until a successor
is elected and qualified, is as follows:
Name MAILING ADDRESS
--------------- ---------------------------------------
Mark A. DiSalvo 102 Searidge Court, Shell Beach, CA 93449
<PAGE>
6. The corporation is to have perpetual existence.
7. In furtherance and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized:
To make, alter or repeal the by-laws of the corporation.
8. A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived any improper
personal benefit.
WE, THE UNDERSIGNED, being each of the incorporators hereinbefore
named, for the purpose of forming a corporation pursuant to the General
Corporation Law of the State of Delaware, do make this Certificate, hereby
declaring and certifying that this is our act and deed and the facts herein
stated are true, and accordingly have hereunto set our hands this Twenty-Ninth
day of June, 1998.
/s/ P. Akwei
----------------------------
P. Akwei, Incorporator
EXHIBIT 10.1
STOCK PURCHASE AND EXCHANGE AGREEMENT
-------------------------------------
THIS STOCK PURCHASE AND EXCHANGE AGREEMENT (this "Agreement") is made
and entered into as of the 14th day of July 1998, by and between Dentmart Group,
Inc., a Colorado corporation (the "Company"), and the individuals whose names
appear on the signature page hereof.
A. The Company has authorized a 1 for 1.65 reverse stock split (the
"Reverse Stock Split") and an increase in the number of authorized shares of
common stock of the Company (the "Authorized Share Increase"). The Company has
authorized a merger (the "Merger") with its wholly-owned subsidiary, SITEK,
Incorporated, a Delaware corporation, in order to change the State of
Incorporation to Delaware and the name of the Company to SITEK, Incorporated, to
effect the Reverse Stock Split and the Authorized Share Increase. Upon execution
of this Agreement, the documents required to effect the Merger (drafts of which
have been approved by all parties and pre-cleared by the state authorities) will
be filed with the States of Colorado and Delaware. Immediately following the
Merger there will be approximately 3,030,800 shares of the Company's Common
Stock, $.005 par value (the "Company's Common Stock"), issued and outstanding.
B. CMP Solutions, Inc., an Arizona corporation ("CMP"), is a recently
formed corporation whose issued and outstanding common stock (the "CMP Stock")
is owned, beneficially and of record, by the individuals whose names appear on
the signature page hereof (the "Purchasers"), who together own an aggregate of
1,000,000 shares of CMP Stock in the respective numbers of shares set forth
opposite the name of each.
C. The Company desires to issue and sell to the Purchasers, and each of
them desires to purchase and acquire from the Company, shares of the Company's
Common Stock, in consideration of the exchange therefor of all of the issued and
outstanding shares of the CMP Stock, on the terms and subject to the conditions
set forth herein;
D. The parties hereto intend that the issuance of the shares of the
Company's Common Stock in exchange for all of the CMP Stock shall qualify as a
"tax-free" reorganization as contemplated by the provisions of Section
368(a)(1)(B) of the Internal Revenue Code of 1954, as amended.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants, agreements, representations and warranties contained herein,
the parties hereto agree as follows:
1
<PAGE>
ARTICLE 1
1.1 Immediately upon the Merger becoming effective, the Company will
sell, and each of the Purchasers will, severally and not jointly, purchase from
the Company an aggregate of 9,200,000 of authorized and newly issued shares of
the Company's Common Stock, with the number of shares to be purchased by each to
be as set forth opposite his name on the signature page hereof in exchange for
that respective number of shares of CMP Stock owned by each Purchaser which is
set forth opposite his name on the signature page hereof.
ARTICLE 2
CLOSING AND POST-CLOSING
The consummation of the sale to and purchase by the Purchasers
of the Company's Common Stock contemplated hereby (the "Closing") shall be
effective upon final execution and delivery by all parties of this Agreement and
each of the agreements and certificates specified in this Article 2 (the
"Closing Date"). If the Closing fails to occur by July 31, 1998, or by such
later date to which the Closing may be extended as provided hereinabove, this
Agreement shall automatically terminate, all parties shall pay their own
expenses incurred in connection herewith, and no party hereto shall have any
further obligations hereunder; At the Closing, as conditions thereto,
(a) The Company shall deliver, or cause to be delivered, to the
Purchasers:
(i) Certificates for the shares of the Company's Common
Stock being purchased for their respective accounts,
in form and substance reasonably satisfactory to the
Purchasers and their counsel (these certificates will
be delivered after the Merger becomes effective);
(ii) The releases and other agreements specified in
Section 6.3(c) below, if any;
(iii) Resignations of the Company's officers and directors
specified in Section 6.3(d) below; and
(iv) The Registration Rights Agreements specified in
Section 6.3(e) below.
(v) Accurate and complete minutes containing all of the
resolutions and minutes of the Company's Board and
shareholders meetings.
(b) The Purchasers shall deliver to the Company:
2
<PAGE>
(i) A stock certificate or certificates evidencing the
ownership of each Purchaser of all shares of CMP
Stock owned by them, duly endorsed for transfer to
the Company;
(ii) The certificate of the Purchasers and CMP specified
in Section 6.4(a) below;
(iii) The certified resolutions of CMP specified in Section
6.4(b) below;
(iv) The releases specified in Section 6.4(c) below; and
(v) The Registration Rights Agreements referred to in
Section 6.3(e) below.
(c) Following the Closing, the Company will effect the Merger and the
issuance of the shares of the Company's Common Stock to the Purchasers. The
Company's present management and legal counsel will assist in reporting these
events to the U.S. Securities and Exchange Commission on Form 8-K upon receipt
of a written request from the Purchasers.
(d) The Purchasers acknowledge that $125,000 is due to Mark DiSalvo
from the Company and the Purchasers agree that Mr. DiSalvo will be paid out of
any funds received by the Company or CMP, or both, from private placements,
equity or debt financings, or any other source of equity funding.
(e) Other than as otherwise allowed or contemplated by this Agreement,
for a period of eighteen months from the Closing Date, no reverse stock split or
other form of reorganization (other than the already approved Reverse Stock
Split which is to be effected by the Company), which would have the effect of
causing any portion of currently outstanding shares of the Company to be reduced
to a smaller number or to be otherwise diluted, shall be authorized or
completed, either as part of any merger transaction or for any other reason;
provided that nothing in this Agreement prohibits or limits the Company in any
manner from conducting private placements, public underwritings, mergers and
acquisitions for reasonable value.
ARTICLE 3
The Company hereby represents and warrants to the Purchasers,
and each of them, as follows (it being acknowledged that the Purchasers are
entering into this Agreement in material reliance upon each of the following
representations and warranties, and that the truth and accuracy of each of which
constitutes a condition precedent to the obligations of the Purchasers
hereunder):
3.1 The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Colorado, and is duly qualified
and in good standing to do business as a foreign corporation in each
jurisdiction in which such qualification is required and where the failure to be
so qualified would have a materially adverse effect upon the Company. The
Company has all requisite corporate power and authority to conduct its business
as now being conducted and
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to own and lease the properties which it now owns and leases. The Articles of
Incorporation as amended to date, certified by the Secretary of State of
Colorado, and the Bylaws of the Company as amended to date, certified by the
President and the Secretary of the Company, which have been delivered to the
Purchasers prior to the execution hereof are true and complete copies thereof as
in effect as of the date hereof.
3.2 The Company has full power, legal capacity and authority to enter
into this Agreement, to execute all attendant documents and instruments
necessary to consummate the transactions herein contemplated, and to issue and
sell the Company's Common Stock to the Purchasers and to perform all of its
obligations hereunder. This Agreement and all other agreements, documents and
instruments to be executed in connection herewith have been effectively
authorized by all necessary action, corporate or otherwise, on the part of the
Company, which authorizations remain in full force and effect, have been duly
executed and delivered by the Company, and no other corporate proceedings on the
part of the Company are required to authorize this Agreement and the
transactions contemplated hereby. This Agreement constitutes the legal, valid
and binding obligation of the Company and is enforceable with respect to the
Company in accordance with its terms, except as enforcement hereof may be
limited by bankruptcy, insolvency, reorganization, priority or other laws or
court decisions relating to or affecting generally the enforcement of creditors'
rights or affecting generally the availability of equitable remedies. Neither
the execution and delivery of this Agreement, nor the consummation by the
Company of any of the transactions contemplated hereby, or compliance with any
of the provisions hereof, will (i) conflict with or result in a breach of,
violation of, or default under, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, license, lease, credit agreement or other
agreement, document, instrument or obligation (including, without limitation,
any of its charter documents) to which the Company is a party or by which the
Company or any of its assets or properties may be bound, or (ii) violate any
judgment, order, injunction, decree, statute, rule or regulation (collectively,
"Laws") applicable to the Company or any of the assets or properties of the
Company. No authorization, consent or approval of any public body or authority
is necessary for the consummation by the Company of the transactions
contemplated by this Agreement.
3.3 Subject to the disclosure on Exhibit A, attached hereto, following
the Merger, the authorized capital stock of the Company will consist of
50,000,000 shares of Common Stock, $.005 par value (defined above as the
"Company's Common Stock"), and 2,000,000 shares of Preferred Stock, $.01 par
value. Following the Merger, there will be approximately 3,030,800 shares of the
Company's Common Stock, $.005 par value (the "Company's Common Stock"), issued
and outstanding and no shares of Preferred Stock issued or outstanding. Prior to
the Closing no options will be granted pursuant to the Company's approved but
not yet established incentive stock option plan. All of the outstanding shares
of the Company's Common Stock have been and all of the Company's Common Stock to
be issued and sold to the Purchasers pursuant to this Agreement will be, duly
authorized, validly issued, fully paid and nonassessable. Except as set forth
above in this Section 3.3, there are no warrants, options, calls, commitments or
other rights to subscribe for or to purchase from the Company any capital stock
of the Company or any securities convertible into or
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exchangeable for any shares of capital stock of the Company, or any other
securities or agreement pursuant to which the Company is or may become obligated
to issue any shares of its capital stock, nor is there outstanding any
commitment, obligation or agreement on the part of the Company to repurchase,
redeem or otherwise acquire any outstanding shares of the Company's Common
Stock. There currently are no rights, agreements or commitments of any character
obligating the Company, contingently or otherwise, to register any shares of its
capital stock under any applicable federal or state securities laws. All of the
Company's Common Stock to be issued and sold to the Purchasers pursuant to this
Agreement will be free and clear of (i) any lien, charge, mortgage, pledge,
conditional sale agreement, or other encumbrance of any kind or nature
whatsoever, and (ii) any claim as to ownership thereof or any rights, powers or
interest therein by any third party, whether legal or beneficial, and whether
based on contract, proxy or other document or otherwise.
3.4. Attached hereto as Exhibit B is a true and complete copies of the
Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1998,
which contains the audited financial statements of the Company for the year
ended March 31, 1998, reported upon by Gerald R. Perlstein, independent
certified public accountant. Such financial statements (and the notes related
thereto) are herein sometimes collectively referred to as the "Company Financial
Statements," and the Company's balance sheet as of March 31, 1998 included
therein is hereinafter sometimes referred to as the "Balance Sheet." The Company
Financial Statements (i) are derived from the books and records of the Company,
which books and records have been consistently maintained in a manner which
reflects, and such books and records do fairly and accurately reflect, the
assets and liabilities of the Company, (ii) fairly and accurately present the
financial condition of the Company on the respective dates of such statements
and the results of its operations for the periods indicated, except as may be
disclosed in the notes thereto, and (iii) have been prepared in all material
respects in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise
disclosed in the notes thereto). The Company has made all filings with the
Securities and Exchange Commission (the "SEC") that it has been required by law
to make within the past the past three (3) years under the Securities Act of
1933, as amended (the "Securities Act"), and the Securities Exchange Act of
1934, as amended (the "Exchange Act") (collectively, the "Public Filings"). Each
of the Public Filings has complied with the Securities Act and the Exchange Act
in all material respects. None of the Public Filings, as of their respective
dates, contained any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading. The Company has
delivered to the Purchasers a correct and complete copy of the most recent
Public Filing (as amended to date). The Company is in compliance with, in all
material respects, the rules and regulations of each stock exchange on which the
Company's stock is, or has at any time been, listed.
3.5 The Company has no subsidiaries and no investments, directly or
indirectly, or other financial interest in any other corporation or business
organization, joint venture or partnership of any kind whatsoever except as
reflected in the Company Financial Statements.
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3.6 Except as and to the extent reflected or reserved against in the
Balance Sheet or disclosed in Exhibit C attached hereto, the Company has no
liability(s), liens, encumbrances or obligation(s) (whether accrued, to become
due, contingent or otherwise) which individually or in the aggregate could have
a materially adverse effect on the business, assets, properties, condition
(financial or otherwise) or prospects of the Company.
3.7 Except as disclosed in Exhibit C attached hereto, since the date of
the Balance Sheet there has been no materially adverse change in the condition
(financial or otherwise) of the Company or in its assets, liabilities,
properties, business, operations or prospects.
3.8 There are no actions, suits or proceedings pending or, to the best
of the Company's knowledge, threatened against or affecting the Company
(including actions, suits or proceedings where liabilities may be adequately
covered by insurance) at law or in equity or before or by any federal, state,
municipal or other governmental department, commission, court, board, bureau,
agency or instrumentality, domestic or foreign, or affecting any of the officers
or directors of the Company in connection with the business, operations or
affairs of the Company, which might result in any adverse change in the
business, properties or assets, or in the condition (financial or otherwise) of
the Company, or which might prevent the sale of the Shares pursuant to this
Agreement. The Company is not subject to any voluntary or involuntary proceeding
under the United States Bankruptcy Code and has not made an assignment for the
benefit of creditors.
3.9 The Company has no obligation to any person or entity for brokerage
commissions, finder's fees or similar compensation in connection with the
transactions contemplated by this Agreement, and the current officers, directors
and 5% shareholders of the Company shall jointly and severally indemnify and
hold the Purchasers and the Company harmless against any liability or expenses
arising out of any such claim, asserted against either the Purchasers or the
Company by any party.
3.10 The Company, through its current officers and directors, has the
knowledge and experience in business and financial matters to meaningfully
evaluate the merits and risks of the issuance of the Company's Common Stock in
exchange and consideration for the CMP Stock as contemplated hereby. The Company
understands and acknowledges that the CMP Stock was originally issued to the
Purchasers, and will be sold and transferred to the Company, without
registration or qualification under the Securities Act of 1933, as amended, or
any applicable state securities or "Blue Sky" law, in reliance upon specific
exemptions therefrom, and in furtherance thereof the Company represents that the
CMP Stock will be taken and received by the Company for its own account for
investment, with no present intention of a distribution or disposition thereof
to others. The Company further acknowledges and agrees that the certificate(s)
representing the CMP Stock transferred to the Company shall bear a restrictive
legend, in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), ARE "RESTRICTED SECURITIES," AND MAY NOT
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BE SOLD, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR IN A
TRANSACTION WHICH, IN THE OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY, IS NOT REQUIRED TO BE REGISTERED UNDER THE ACT."
3.11 Neither this Agreement, nor any certificate, exhibit, or other
written document or statement, furnished to the Purchasers by the Company in
connection with the transactions contemplated by this Agreement contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary to be stated in order to make the statements contained
herein or therein not misleading.
3.12 Tax Matters. The Company has filed all returns, declarations,
reports, estimates, information returns and statements and other documents (the
"Returns") required to be filed by or for the Company in respect of all federal,
state, local and foreign taxes, assessments and governmental charges of any kind
whatsoever, whether payable directly, by withholding or otherwise, together with
any interest, penalties, additions to tax or additional amounts imposed by any
taxing authority with respect thereto (collectively, "Taxes" or "Tax"), and the
information contained in each such Return is complete and accurate in all
material respects. There are no pending audits, actions, proceedings,
investigations or claims relating to any asset or liability of the company in
respect of taxes, and there is no basis for any such claim which is likely to
result in a Tax liability being imposed for any period prior to the Closing. The
Company has, within the time and in the manner prescribed by law, withheld from
employee wages and paid over to the proper governmental authorities all amounts
required to be so withheld and paid over under all applicable Laws. The Company
has not requested any extension of time within which to file any Return, which
Return has not since been (or will not be) timely filed. No deficiency for any
Taxes has been proposed, asserted or assessed against the Company which has not
been resolved and paid in full. There are no outstanding waivers or comparable
consents regarding the application of he statute of limitations with respect to
any Taxes or Returns that have been given by the Company. There are no pending
administrative proceedings, including but not limited to federal, state, local
or foreign audits, or court proceedings with regard to any Taxes or Returns. No
power of attorney has been granted by the Company with respect to any matter
relating to Taxes which is currently in force. The Company is not a party to nay
agreement or arrangement providing for the allocation or sharing of Taxes. The
Company is not required to include in income any adjustment pursuant to Section
481(a) of the Code by reason of a voluntary change in accounting method
initiated by the Company or as a result of the Tax Reform Act of 1986, and the
Internal Revenue Service has not proposed any such adjustment or change in
accounting method.
3.13 Contracts. Other than the contracts listed on Schedule 3.13
attached hereto, the Company is not a party to, nor is bound by, any agreement
or contract. The Company has provided the Purchasers with true, accurate and
complete copies of, or in the case of oral contracts, written summaries of, all
the contracts listed on Schedule 3.13. The Company is not in default or breach
of any contract or agreement to which it is a party or by which it is bound.
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3.14 Compliance with Laws. The Company has never violated any Laws, the
violation of which could have a material adverse effect on the Company's
business, assets or capital stock value. The Company's conduct of its business
has not in the past nor does not currently violate, in any material respect, any
Laws. The company has filed all material returns, reports and other documents
and furnished all information required or requested by any federal, state, local
or foreign governmental agency and all such returns, reports, documents and
information are true and complete in all material respects regarding the Company
and its business.
ARTICLE 4
Each of the Purchasers severally and not jointly hereby represents and
warrants to the Company as follows (it being acknowledged that the Company is
entering into this Agreement in material reliance upon each of the following
representations and warranties, that the truth and accuracy of each of which
constitutes a condition precedent to the obligations of the Company hereunder):
4.1 Each of the Purchasers has full power, legal capacity and authority
to enter into this Agreement, to execute all attendant documents and instruments
necessary to consummate the transactions herein contemplated, and to perform all
of the obligations to be performed by him hereunder. This Agreement and all
other agreements, documents and instruments to be executed by the Purchasers in
connection herewith have been duly executed and delivered and constitute the
legal, valid and binding obligations of the Purchasers executing and delivering
the same, and are enforceable with respect to such Purchasers in accordance with
their terms, except as enforcement hereof may be limited by bankruptcy,
insolvency, reorganization, priority or other laws or court decisions relating
to or affecting generally the enforcement of creditors' rights or affecting
generally the availability of equitable remedies. No authorization, consent or
approval of any public body or authority is necessary for the consummation by
the Purchasers of the transactions contemplated hereby.
4.2 The Purchasers together collectively own an aggregate of 1,000,000
shares of CMP Stock, constituting all of the issued and outstanding shares of
capital stock of CMP, free and clear of (i) any lien, charge, mortgage, pledge,
conditional sale agreement, or other encumbrance of any kind or nature
whatsoever, and (ii) any claim as to ownership thereof or any rights, powers or
interest therein by any third party, whether legal or beneficial, and whether
based on contract, proxy or other document or otherwise. All of the shares of
CMP Stock have been duly authorized and validly issued and are fully paid and
nonassessable. CMP is not currently authorized to issue any shares of preferred
stock.
4.3 CMP is a corporation duly organized, validly existing and in good
standing under the laws of the State of Arizona, and is duly qualified and in
good standing to do business as a foreign corporation in each jurisdiction in
which such qualification is required and where the failure to be
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so qualified would have a materially adverse effect upon CMP. CMP has all
requisite corporate power and authority to conduct its business as now being
conducted and to own and lease the properties which it now owns and leases. The
Articles of Incorporation of CMP as amended to date, certified by the Secretary
of State of Arizona, and the Bylaws of CMP as amended to date, certified by the
President and the Secretary of CMP, which have been delivered to the Company
prior to the execution hereof are true and complete copies thereof as in effect
as of the date hereof.
4.4 CMP was incorporated in June, 1998, and has yet to conduct any
significant business or operations. CMP has no subsidiaries and no investments,
directly or indirectly, or other financial interest in any other corporation or
business organization, joint venture or partnership of any kind whatsoever. CMP
has no liability(s) or obligation(s)(whether accrued, to become due, contingent
or otherwise) which individually or in the aggregate could have a materially
adverse effect on the business, assets, properties, condition (financial or
otherwise) or prospects of CMP, and since June, 1998, there has been no
materially adverse change in the condition (financial or otherwise) of CMP or in
its assets, liabilities, properties, business, operations or prospects.
Effective upon the Closing, all contracts in force, proprietary systems,
computer technology and other intellectual property developed or in development
by CMP or by others for CMP (hereinafter referred to as the "CMP Properties")
shall be the property of CMP whether now owned by CMP or the Purchasers. A
complete list of the CMP properties is described in Exhibit D attached hereto.
Also attached as Exhibit D is the most recent draft of the Business Plan for
CMP.
4.5 There are no actions, suits or proceedings pending or, to the best
of the Purchasers' knowledge, threatened against or affecting any of the
Purchasers or CMP (including actions, suits or proceedings where liabilities may
be adequately covered by insurance) at law or in equity or before any federal,
state, municipal or other governmental department, commission, court, board,
bureau, agency or instrumentality, domestic or foreign, or affecting any of the
officers or directors of CMP in connection with the business, operations or
affairs of CMP which might result in any material adverse change in the
business, properties or assets, or in the condition (financial or otherwise) of
CMP, or which might prevent the purchase of the Company's Common Stock by the
Purchasers or the transfer to the Company of the CMP Stock by the Purchasers
pursuant to this Agreement or the performance by the Purchasers of any of the
obligations to be performed by the Purchasers under this Agreement. Neither CMP
nor any of the Purchasers is subject to any voluntary or involuntary proceeding
under the United States Bankruptcy Code, nor have any of them made an assignment
for the benefit of creditors.
4.6 Each Purchaser has the knowledge and experience in business and
financial matters to meaningfully evaluate the merits and risks of the purchase
and acquisition of the Company's Common Stock in exchange and consideration for
the shares of CMP Stock owned by him as contemplated hereby. Each Purchaser
acknowledges that the shares of the Company's Common Stock to be issued to him
in the transactions contemplated hereby will be issued by the Company without
registration or qualification or other filings being made under the Federal
Securities Act of 1933, as amended, or the securities or "Blue Sky" laws of any
state, in reliance upon specific exemptions therefrom, and in furtherance
thereof each Purchaser represents that the shares of the
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Company's Common Stock to be received by him will be taken for his own account
for investment, with no present intention of a distribution or disposition
thereof to others. Each Purchaser agrees that the certificate(s) representing
the shares of the Company's Common Stock issued to him shall be subject to a
stop-transfer order and shall bear a restrictive legend, in substantially the
following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), ARE "RESTRICTED SECURITIES," AND MAY NOT
BE SOLD, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR IN A
TRANSACTION WHICH, IN THE OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY, IS NOT REQUIRED TO BE REGISTERED UNDER THE ACT."
4.7 The Purchasers have no obligation to any person or entity for
brokerage commissions, finder's fees or similar compensation in connection with
the transactions contemplated by this Agreement, and the Purchasers shall
jointly and severally indemnify and hold the Company harmless against any
liability or expenses arising out of any such claim asserted against the
Company.
4.8 Neither this Agreement, nor any certificate, exhibit, or other
written document or statement, furnished to the Company by the Purchasers in
connection with the transactions contemplated by this Agreement contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary to be stated in order to make the statements contained
herein or therein not misleading.
ARTICLE 5
The Company and the Purchasers hereby covenant to and agree with the
other that between the date hereof and the Closing:
5.1 The Company and the Purchasers shall each give to other and
authorized representatives thereof full access, during reasonable business
hours, in such a manner as not unduly to disrupt normal business activities, to
any and all of the premises, properties, contracts, books, records and affairs
of the Company or CMP, as the case may be, and will cause the officers of the
Company or CMP, as the case may be, to furnish any and all data and information
pertaining to its business that the other may from time to time reasonably
require. Unless and until the transactions contemplated by this Agreement have
been consummated, each party and its representatives shall hold in confidence
all information so obtained and if the transactions contemplated hereby are not
consummated will return all documents hereinabove referred to and obtained
therefrom. Such obligation of confidentiality shall not extend to any
information which as shown to have been previously (i) known to the party
receiving it (ii) generally known to others engaged in the trade or business of
the Company or CMP, as the case may be, (iii) part of public knowledge or
literature, or (iv) lawfully received from a third party.
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5.2 The current officers and directors of the Company and the
Purchasers shall each take all necessary actions to cause the Company and CMP,
respectively, to maintain in full force and effect its corporate existence,
rights, franchises and good standing, and shall not cause or permit to be made
any change in the Articles or Bylaws of the Company or CMP, as the case may be.
5.3 The Purchasers shall take all commercially reasonable actions to
cause CMP to conduct its business in the ordinary course of business as an
ongoing concern and to maintain the books, accounts and records of CMP in the
usual, regular and ordinary manner.
ARTICLE 6
The respective obligations of the parties hereto to consummate the
transactions contemplated hereby shall be subject to the fulfillment, at or
prior to the Closing, of the following conditions:
6.1 There shall have been obtained any and all permits, approvals and
qualifications of, and there shall have been made or completed all filings,
proceedings and waiting periods, required by any governmental body, agency or
regulatory authority which, in the reasonable opinion of counsel to the
Purchasers and to the Company, are required for the consummation of the
transactions contemplated hereby.
6.2 No claim, action, suit, investigation or other proceeding shall be
pending or threatened before any court or governmental agency which presents a
substantial risk of the restraint or prohibition of the transactions
contemplated by this Agreement or the obtaining of material damages or other
relief in connection therewith.
6.3 The obligation of the Purchasers hereunder to consummate the
transactions contemplated by this Agreement are expressly subject to the
satisfaction of each of the further conditions set forth below, any or all of
which may be waived by the Purchasers in whole or in part without prior notice;
provided, however, that no such waiver of a condition shall constitute a waiver
by the Purchasers of any other condition or of any of their rights or remedies,
at law or in equity, if the Company shall be in default or breach of any of its
representations, warranties or covenants under this Agreement:
(a) The Company shall have performed the agreements and
covenants required to be performed by them under this Agreement prior to the
Closing, there shall have been no material adverse changes in the condition
(financial or otherwise), assets, liabilities, earnings or business of the
Company since the date hereof, and the representations and warranties of the
Company contained herein shall, except as contemplated or permitted by this
Agreement or as qualified in Exhibit C, attached hereto, be true in all material
respects on and as of the date of Closing as if made on and as of such date.
(b) Attached as Exhibit A are copies of resolutions (which are
and will be in full force and effect as of the Closing Date) duly adopted by the
Board of Directors of the Company
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adopting and approving this Agreement and the other documents, agreements and
instruments to be entered into by the Company as provided herein.
(c) The Company shall have obtained written releases, in form
and substance reasonably satisfactory to the Purchasers from each person who may
be entitled, if any, to receive a finders fee or other commission from the
Company as a consequence of the transactions contemplated hereby.
(d) Each of the current officers and directors of the Company
shall have resigned all of their respective offices of the Company, effective as
of the Closing Date, electing the following individuals to the Board of
Directors of the Company:
1. Don Jackson
2.
3.
4.
(e) The Company shall have executed and delivered a
Registration Rights Agreement to each of the undersigned, dated as of the date
of Closing, in the form thereof attached hereto as Exhibit E.
6.4 The obligation of the Company to consummate the transactions
contemplated by this Agreement is expressly subject to the further conditions
set forth below:
(a) The Purchasers and CMP shall have performed the agreements
and covenants required to be performed by them under this Agreement prior to the
Closing, there shall have been no material adverse change in the condition
(financial or otherwise), assets, liabilities, earnings or business of the CMP
since the date hereof, and the representations and warranties of the Purchasers
contained herein shall, except as contemplated or permitted by this Agreement,
be true in all material respects on and as of the date of Closing as if made on
and as of such date;
(b) The Company shall have received copies of resolutions
(certified as of the date of the Closing as being in full force and effect by an
appropriate officer of CMP) duly adopted by the Board of Directors of CMP
adopting and approving the agreements and covenants to be performed by CMP under
this Agreement, which shall be in form and substance reasonably satisfactory to
the Company.
(c) The Purchasers shall have obtained written releases, in
form and substance reasonably satisfactory to the Company, from each person who
may be entitled to receive a finders fee or other commission from the Purchasers
as a consequence of the transactions contemplated hereby.
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ARTICLE 7
7.1 The Company and the Purchasers shall each pay all of their own
respective taxes, attorneys' fees and other costs and expenses payable in
connection with or as a result of the transactions contemplated hereby and the
performance and compliance with all agreements and conditions contained in this
Agreement respectively to be performed or observed by each of them.
7.2 The respective representations and warranties contained herein and
in any other document or instrument delivered by or on behalf of the Company and
the Purchasers shall survive the Closing for a period of one full year and
thereupon expire and be of no further force and effect. Nothing contained in
this Section 7.2 shall in any way affect any obligations of any party under this
Agreement that are to be performed, in whole or in part, at any time after the
Closing, nor shall it prevent or preclude any party from pursuing any and all
available remedies at law or in equity for actual fraud in the event that, prior
to the Closing, any other party had actual knowledge of any material breach of
any of its representations and warranties herein but failed to disclose to or
actively concealed such knowledge prior to the Closing from the other party(s)
to whom the representations and warranties were made.
ARTICLE 8
8.1 Each of the parties hereto shall execute and deliver such other and
further documents and instruments, and take such other and further actions, as
may be reasonably requested of them for the implementation and consummation of
this Agreement and the transactions herein contemplated.
8.2 This Agreement shall be binding upon and inure to the benefit of
the parties hereto, and the heirs, personal representatives, successors and
assigns of all of them, but shall not confer, expressly or by implication, any
rights or remedies upon any other party.
8.3 This Agreement is made and shall be governed in all respects,
including validity, interpretation and effect, by the laws of the State of
Delaware.
8.4 All notices, requests or demands and other communications hereunder
must be in writing and shall be deemed to have been duly made if personally
delivered or mailed by registered or certified mail, return receipt requested,
postage prepaid, to the parties as follows:
(a) If to the Company, to: Mark DiSalvo
192 Searidge Court
Shell Beach, Ca. 93449
Tel : 805-773-5350
With a copy to: Robert M. Kern, Esq.
23676 Blythe Street
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West Hills, CA 91304
Tel: 818-592-0860
(b) If to any of the Shareholders, to:
c/o CMP Solutions Inc.
2450 W. 12th St.
Suites # 2 & 3
Tempe, AZ. 85281
With a copy to: Quarles & Brady
One East Camelback Road, Suite 400
Phoenix, AZ 85012
Attention: P. Robert Moya
Any party hereto may change its address by written notice to the other
party given in accordance with this Section 8.4.
8.5 This Agreement and the exhibits attached hereto contain the entire
agreement between the parties and supersede all prior agreements, understandings
and writings between the parties with respect to the subject matter hereof and
thereof. Each party hereto acknowledges that no representations, inducements,
promises or agreements, oral or otherwise, have been made by any party, or
anyone acting with authority on behalf of any party, which are not embodied
herein or in an exhibit hereto, and that no other agreement, statement or
promise may be relied upon or shall be valid or binding. Neither this Agreement
nor any term hereof may be changed, waived, discharged or terminated orally.
This Agreement may be amended or any term hereof may be changed, waived,
discharged or terminated by an agreement in writing signed by all parties
hereto.
8.6 Prior to the Closing, neither the execution of this Agreement nor
the performance of any provision contained herein shall cause any party hereto
to be or become liable in any respect for the operations of the business of any
other party, or the condition of property owned by any other party, for
compliance with any applicable laws, requirements, or regulations of, or taxes,
assessments or other charges now or hereafter due to any governmental authority,
or for any other charges or expenses whatsoever pertaining to the conduct of the
business or the ownership, title, possession, use, or occupancy of any other
party.
8.7 The captions and headings used herein are for convenience only and
shall not be construed as a part of this Agreement.
8.8 In the event of any litigation between the parties hereto, the
non-prevailing party shall pay the reasonable expenses, including the attorneys'
fees, of the prevailing party in connection therewith.
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8.9 This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which taken together shall
constitute but one and the same document. A Signature received via Telefax will
be deemed as an original signature for the purpose of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
DENTMART GROUP, INC.
By: /s/ Mark A. DiSalvo
--------------------------------
Mark A. DiSalvo, President
"Purchasers"
/s/ Julian Gates
------------------------------------
Julian Gates
128,935 shares of CMP Stock
1,186,200 shares of Company's Common Stock
/s/ Mark Simon
------------------------------------
Mark Simon
128,935 shares of CMP Stock
1,186,200 shares of Company's Common Stock
/s/ Vince Birdwell
------------------------------------
Vince Birdwell
103,484 shares of CMP Stock
952,054 shares of Company's Common Stock
/s/ Paul Burke
------------------------------------
Paul Burke
58,637 shares of CMP Stock
539,463 shares of Company's Common Stock
16
<PAGE>
/s/ Don Jackson
------------------------------------
Don Jackson
128,935 shares of CMP Stock
1,186,200 shares of Company's Common Stock
/s/ Paul Jackson
------------------------------------
Paul Jackson
128,935 shares of CMP Stock
1,186,200 shares of Company's Common Stock
/s/ Parag Modi
------------------------------------
Parag Modi
128,935 shares of CMP Stock
1,186,200 shares of Company's Common Stock
/s/ Kevin Jackson
------------------------------------
Kevin Jackson
103,148 shares of CMP Stock
948,960 shares of Company's Common Stock
/s/ L. Richard Myers
------------------------------------
L. Richard Myers
20,630 shares of CMP Stock
189,792 shares of Company's Common Stock
/s/ Peter Wilson
------------------------------------
Peter Wilson
69,426 shares of CMP Stock
638,731 shares of Company's Common Stock
-End-
17
EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
-----------------------------
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of July 14, 1998, by and between SITEK, INC. (formerly Dentmart
Group, Inc.), a Delaware corporation (the "Company"), and the individuals listed
on the signature page of this Agreement who, concurrently with the execution
hereof, are becoming shareholders of the Company (individually, a "Shareholder",
and collectively, the "Shareholders").
A. The Company and the Shareholders, among others, have entered into
that certain Stock Purchase and Exchange Agreement of even date herewith (the
"Exchange Agreement"), pursuant to which the Shareholders, who currently own all
of the issued and outstanding capital stock of CMP Solutions, Inc., an Arizona
corporation ("CMP"), have agreed to purchase from the Company an aggregate of
9,200,000 shares of the Company's Common Stock, $.01 par value (the "Company's
Common Stock"), in exchange for the sale and transfer to the Company of all
shares of the capital stock of CMP owned by the Shareholders. All of the shares
of the Company's Common Stock to be issued to and acquired by the Shareholders
are herein referred to collectively as the "Shares".
B. The execution and delivery of this Agreement by the Company are
conditions to the obligation of the Shareholders to exchange the stock of CMP .
owned by them for the Shares pursuant to the Exchange Agreement. Accordingly,
the Company deems it necessary and advisable and in the best interests of the
Company and its stockholders to enter into this Agreement with the Shareholders.
C. As a material inducement and consideration to the Shareholders to
enter into and perform their respective obligations under the Exchange
Agreement, the Company has agreed to enter into and execute this Agreement on
the terms and subject to the conditions set forth below.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements of the parties contained herein, the Company
hereby grants to each of the Shareholders certain rights with respect to the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of the Shares acquired by the Shareholders pursuant to the Exchange
Agreement, on the following terms and subject to the following conditions:
1. If, at any time after the acquisition of the Shares by the
Shareholder, the Company shall determine to register under the Securities Act
any shares of its Common Stock to be offered for cash by it or others (other
than a registration requested pursuant to Paragraph 1 hereof), the Company will
(i) promptly give written notice of its intention to file such registration
statement to the Shareholders and (ii) subject to the provisions of paragraphs 2
and 3 below, include among the shares covered by the registration statement such
portion of the Shares as shall be specified in a written request given to the
Company by one or more of the Shareholders within 30 days after the date on
which the Company gave such written notice.
<PAGE>
2. Upon receipt of any written request described in subparagraph 1
above, but subject to the provisions hereof and of paragraphs 3 and 5 below, the
Company shall use its best efforts within reason to effect the registration,
qualification or compliance under the Securities Act and under other applicable
federal law and any applicable securities or "blue sky" laws of jurisdictions
within the United States of the Shares specified in the request(s) (the
Shareholders, and any other holders of the Company's Common Stock who are
entitled to request that any shares of the Company's Common Stock held by them
be included in any such registration, are herein individually called a "Selling
Shareholder" and collectively, the "Selling Shareholders"); provided, however,
that in no event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not so qualified or to take any action that would
subject it to tax or the service of process (other than process in connection
with such registration) in any jurisdiction where it is not subject thereto, nor
shall the Company be required to include the Shares among the securities covered
by the registration statement if (i) the requests of the Selling Shareholders
cover, in the aggregate, less than 5% of the then outstanding shares of the
Company's Common Stock; or in the case of an offering that is not underwritten,
(ii) the Board of Directors of the Company determines in good faith that
including shares of Common Stock held by any Selling Shareholder among the
securities covered by the registration statement would have a materially
detrimental effect on the offering and would therefore not be in the best
interests of the Company.
3. The Company shall have priority over any and all of the Selling
Shareholders with respect to the inclusion of shares in any such registration,
and in no event shall the Company be required to reduce or limit the number of
newly to be issued shares of its Common Stock to be covered by any registration
statement for the purpose of permitting the Shares of any Selling Shareholder to
be included in the registration.
4. The Company alone shall determine and control all decisions
concerning any registration of the Company's securities which might give rise to
the registration rights granted in this Agreement, including any registration in
which Shares of any Selling Shareholder are to be included. The Company's
exclusive right to make decisions shall include, without limitation, the
decision as to whether to use underwriters, the selection of underwriters and
arrangements therewith, the size, timing and other terms of any offering, the
provisions of the registration statements and prospectuses and all supplements
and amendments thereto, the selection of accountants and attorneys for the
Company, and the states in which the sale of shares shall occur and be
registered or qualified for sale.
5. If the offering registered by the Company is to be underwritten,
each Selling Shareholder shall sell all shares of the Company's Common Stock
included in the registration statement to or through the underwriter or
underwriters selected by the Company on the same terms and conditions provided
in any underwriting agreement entered into therewith by the Company, and shall
complete and execute all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements. Notwithstanding anything to the contrary hereunder,
if the underwriter or underwriters selected by the Company reasonably determine
that all or any portion of the shares of Common Stock held by the Selling
Shareholders should not be included in the registration
2
<PAGE>
statement, the determination of the underwriter or underwriters shall be
conclusive; provided, however, that if such underwriter or underwriters
determine that some but not all of the shares of Common Stock of the Selling
Shareholders shall be included in the registration statement, the number of
shares owned by each Selling Shareholder to be included in the registration
statement will be equal to the number of shares owned by each other Selling
Shareholder to be included in the registration statement (unless such Selling
Shareholder elects to include a lesser number of Shares in the registration
statement).
6. If and whenever the Company is required by the provisions of this
Agreement to use its best efforts to effect the registration of any of the
Shares under the Securities Act, the Company shall:
(a) prepare and file with the Securities and Exchange
Commission (the "Commission") a registration statement with respect to such
Shares and use its best efforts to cause such registration statement to become
and remain effective under the Securities Act as provided herein;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
current and to comply with the provisions of the Securities Act with respect to
the sale or other disposition of all Shares covered by such registration
statement; provided, however, that in the case of any registered distribution
which is not underwritten on a firm commitment basis, then the Company shall not
be required to file a post-effective amendment or supplement the prospectus more
than 180 days after the effective date of the registration statement;
(c) furnish to each Shareholder (and any other person
participating in the registration as a Selling Shareholder) such number of
copies of the prospectus contained in the registration statement filed under the
Securities Act (including each preliminary prospectus) in conformity with the
requirements of the Securities Act, and such other documents as the Selling
Shareholders may reasonably request in order to facilitate the disposition of
the Company's Common Stock held by them which is covered by the registration
statement; and
(d) notify each Shareholder (and any other person
participating in the registration as a Selling Shareholder), at any time when a
prospectus is required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus in the registration
statement, as then in effect, includes an untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and prepare and furnish to them any
reasonable number of copies of any supplement to or amendment of such prospectus
as may be necessary so that, as thereafter delivered, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
3
<PAGE>
7. The Company shall bear all costs and expenses relating to or
incurred by it in connection with any registration ("Registration Expenses") in
which any Shareholder participates pursuant hereto, including without limitation
all registration and filing fees, printing expense, fees and disbursements of
counsel and independent accountants for the Company and fees and expenses
incident to compliance with state securities or "blue sky" laws, but
specifically excluding any fees and disbursements of counsel, accountants or
other professionals engaged by any Shareholder. Each Shareholder participating
in such registration shall be responsible for and bear any underwriters'
discounts and commissions properly allocable to the Shares included in a
registration statement at the request of a Shareholder hereunder.
8. (a) The Company shall indemnify and hold harmless, to the
extent permitted by law, each Shareholder participating in any registration
effected by the Company pursuant to any provision of this Agreement against any
actions, losses, claims, damages, liabilities and expenses (including legal fees
and other expenses reasonably incurred in the investigation and defense thereof)
resulting from any untrue or alleged untrue statement of a material fact or any
omission or alleged omission of a material fact in any registration statement,
prospectus, offering circular or other document filed in connection with any
such registration, and against any violation by the Company of the Securities
Act or any state securities or "blue sky" law, or any rule or regulation under
any of them, applicable to the Company is connection with such registration,
unless and to the extent that any such actions, claims, losses, damages,
liabilities or expenses arise out of or are based upon any of the written
information specifically provided by the Shareholder for use in such
registration statement, prospectus, offering circular or other document pursuant
to subparagraph 8(b) below.
(b) In connection with any registration in which any of the
Shareholders is participating, each such Shareholder shall furnish to the
Company such information in writing regarding the Shareholder as the Company
reasonably requests for inclusion in the registration statement, prospectus,
offering circular and other documents filed in connection therewith, and shall
state that such information is provided specifically for use in the registration
statement, prospectus, offering circular or other documents. Each such
Shareholder shall also furnish to the Company an undertaking satisfactory to the
Company and each underwriter of the offering, if any, agreeing to indemnify and
hold harmless, to the extent permitted by law, the Company, and its directors
and officers, and each such underwriter, and each person who controls the
Company or each such underwriter (within the meaning of the Securities Act),
against any actions, losses, claims, damages, liabilities, and expenses
(including legal and other expenses reasonably incurred in the investigation and
defense thereof) resulting from any untrue or alleged untrue statement of a
material fact or any omission or alleged omission of a material fact required to
be stated in any such documents or any supplement or amendment thereto, and
against any violation by the Company of the Securities Act or any state
securities or "blue sky" law, or any rule or regulation under any of them,
applicable to the Company is connection with such registration, or necessary to
make the statements therein not misleading, but only to the extent that such
untrue statement or omission is made in reliance on and in conformity with the
written information furnished to the Company by such Shareholder specifically
for use in any such documents.
4
<PAGE>
9. (a) Each of the parties hereto shall execute and deliver such
other and further documents and instruments, and take such other and further
actions, as may be reasonably requested of them for the implementation and
consummation of this Agreement and the transactions herein contemplated.
(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and the heirs, personal representatives,
successors and assigns of all of them, but shall not confer, expressly or by
implication, any rights or remedies upon any other party.
(c) This Agreement is made and shall be governed in all
respects, including validity, interpretation and effect, by the laws of the
State of Delaware. Should any provision of this Agreement be rendered void,
invalid or unenforceable by any court for any reason, such invalidity or
unenforceability shall not void or render invalid or unenforceable any other
provisions of this Agreement.
(d) All notices, requests or demands and other communications
hereunder must be in writing and shall be deemed to have been duly made if
personally delivered or mailed, postage prepaid, to the parties as follows:
If to the Company, to: SITEK, Incorporated
1817 West 4th Street
Tempe, AZ 85281
If to any of the
Shareholders, to: c/o To such address as they
Designate to the Company
Any party hereto may change its address by written notice to the other
party given in accordance with this subparagraph 9(d).
(e) This Agreement, together with the Exchange Agreement and
the other exhibits attached thereto, contain the entire agreement between the
parties and supersede all prior agreements, understandings and writings between
the parties with respect to the subject matter hereof and thereof. Each party
hereto acknowledges that no representations, inducements, promises or
agreements, oral or otherwise, have been made by any party, or anyone acting
with authority on behalf of any party, which are not embodied herein or in an
exhibit hereto, and that no other agreement, statement or promise may be relied
upon or shall be valid or binding. Neither this Agreement nor any term hereof
may be changed, waived, discharged or terminated orally. This Agreement may be
amended or any term hereof may be changed, waived, discharged or terminated by
an agreement in writing signed by all parties hereto.
5
<PAGE>
(f) The captions and headings used herein are for convenience
only and shall not be construed as a part of this Agreement.
(g) In the event of any litigation between the parties hereto,
the non-prevailing party(s) shall pay the reasonable expenses, including the
attorneys' fees, of the prevailing party(s) in connection therewith.
(h) This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which taken together shall
constitute but one and the same document.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
SITEK, INC.
By: /s/ Mark A. DiSalvo
---------------------------------
Mark A. DiSalvo, President
"Purchasers"
/s/ Julian Gates /s/ Mark Simon
- ---------------------------- ----------------------------
Julian Gates Mark Simon
/s/ Vincent Birdwell /s/ Paul Burke
- ---------------------------- ----------------------------
Vincent Birdwell Paul Burke
/s/ Don Jackson /s/ Paul Jackson
- ---------------------------- ----------------------------
Don Jackson Paul Jackson
/s/ Parag Modi /s/ Kevin Jackson
- ---------------------------- ----------------------------
Parag Modi Kevin Jackson
/s/ Richard Myers /s/ Peter Wilson
- ---------------------------- ----------------------------
Richard Myers Peter Wilson
6
