AGREEMENT AND PLAN OF REORGANIZATION
by and between
DEFINITION TECHNOLOGIES, INC.
and
BORCO EQUIPMENT COMPANY, INC.
and
DEFINITION, LTD.
Dated December 1, 1999
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TABLE OF CONTENTS
Page
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ARTICLE I: THE REORGANIZATION 3
ARTICLE II REPRESENTATIONS AND WARRANTIES 5
ARTICLE III.A: COVENANTS OF BORCO 9
ARTICLE III.B: COVENANTS OF DEFINITION TECHNOLOGIES 10
ARTICLE IV: CERTAIN COVENANTS 10
ARTICLE V: CONDITIONS 12
ARTICLE VI: STOCK RESTRICTION/INVESTMENT REPRESENTATION 15
ARTICLE VII: INDEMNIFICATION AND WAIVER OF CLAIMS - BORCO 16
ARTICLE VIII: CLOSING DATE 16
ARTICLE IX: RESIGNATION AND ELECTION 17
ARTICLE X: MISCELLANEOUS 17
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H
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AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION, effective December 1, 1999, between
DEFINITION TECHNOLOGIES, INC., a Texas corporation ("DEFINITION TECHNOLOGIES")
BORCO EQUIPMENT COMPANY, INC., a Nevada Corporation ("BORCO"), and DEFINITION,
LTD., a Nevada Corporation ("Definition").
WHEREAS, Definition Technologies is a wholly-owned subsidiary of
Definition, Ltd., a Nevada Corporation whose shareholders shall be entitled to
participate in the reorganization of Definition Technologies;
WHEREAS, the respective Boards of Directors of Borco and Definition
Technologies deem it advisable to merge such Company into Definition
Technologies ("Merged Company") pursuant to this Agreement and a Certificate of
Merger to be executed by each Company ("Certificate of Merger") and Articles of
Merger to be executed by each company and Definition Technologies ("Articles of
Merger"), whereby the holders of shares of common stock of each Company (such
shares of common stock being sometimes hereinafter called, collectively, the
"Common Stock") outstanding at the effective time (as hereinafter defined) of
the merger will have the right to receive shares of Definition Technologies
common stock, no par value per share (the "Definition Technologies Shares"), in
the manner and in such amount as is set forth in Article I hereof and upon the
terms and conditions otherwise set forth in this Agreement; and
WHEREAS, to effectuate the foregoing, the parties desire to adopt a plan of
reorganization in accordance with the provisions of Section 368(a)(1)(A) of the
Internal Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, and for the purpose of stating the terms and
conditions of the merger, the mode of carrying the same into effect, the manner
of converting the shares of each company issued and outstanding immediately
prior to the effective time of the merger into Definition Technologies shares,
and such other details and provisions as are deemed desirable, the parties
hereto, severally and jointly, have agreed, and do hereby agree, subject to the
terms and conditions hereinafter set forth as follows:
ARTICLE I
THE REORGANIZATION
------------------
1. Execution of Certificate of Merger and Articles of Merger Subject to the
provisions of this Agreement, the Articles of Merger with respect to the merger
shall be executed and acknowledged by Borco and Definition Technologies that is
a party to such merger (the "Merger Company") and thereafter delivered to the
Secretary of State of the State of Nevada for filing, as provided by the Nevada
Business Corporation Act, as soon as practicable on or after the closing date
(as hereinafter defined) of such merger. The merger shall become effective upon
the filing of the Articles of Merger with the Secretary of State of the State of
Nevada. The date and time when a merger becomes effective shall be called the
"effective time" of such merger. At the effective time of a merger, the separate
existence of the merged company (BORCO) shall cease and such company shall be
merged with and into Definition Technologies. Definition Technologies shall be
the surviving corporation upon the consummation of the merger.
2. Consummation of the Merger. As soon as practicable after the approval of
the merger by the stockholders, Borco and Definition Technologies will cause
such merger to be consummated in accordance with applicable law, subject to the
conditions hereinafter set forth.
3. Conversion of Shares of BORCO/DEFINITION TECHNOLOGIES. At the effective
time of the merger of Borco with and into Definition Technologies, each
outstanding share of Borco common stock (currently 10,000) shall be canceled and
shall be converted into Definition Technologies shares (at the ratio of 230
shares of Definition Technologies for each share of Borco shares) by virtue of
such merger and without any action on the part of the holder thereof, such that
prior Shareholders of Borco Common Stock will hold Units of Definition
Technologies, Definition Limited will hold Units of Definition Technologies, and
current shareholders of Definition will hold Units of Definition Technologies.
Each Unit Consisting of One Share of Common Stock, $0.001 par value one Class A
Common Stock Purchase Warrant, and one Class B Common Stock Purchase Warrant.
The Common Stock, Class A and Class B Common Stock Purchase Warrants are to be
distributed as a Unit and subject to registration with the Securities and
Exchange Commission and Blue-Sky laws, detachable and separately tradeable. Each
Class A Warrant entitles the holder to purchase one share of common stock at a
price of $5.00, for a one hundred and eighty day period from ninety days until
one hundred eighty days from the effective date of the Merger. Each Class B
Warrant will entitle the holder
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to purchase one share of Common Stock at a price of $5.00 at any time from
three hundred sixty-five days to seven hundred and thirty days from the
effective date of the Merger. At the effective time of the merger of Borco with
and into Definition Technologies, by virtue of such merger and without any
action on the part of the holder thereof, such that prior Shareholders of Borco
Common Stock will hold 2,300,000 Units for Common Stock of Definition
Technologies, and current shareholders of Definition will hold 150,000 Units of
Common Stock of Definition Technologies. Borco agrees to file with the
Securities and Exchange Commission a Registration Statement under the Securities
Act of 1933, as amended (the "Act") on Form S-4 with respect to the securities
offered hereby.
4. Exchange of Certificates. After the effective time of the merger, each holder
of a certificate theretofore evidencing outstanding shares of common stock of
the merged company (other than shares held by dissenting stockholders and shares
that are automatically canceled as hereinabove provided), upon surrender of the
same to Continental Stock Transfer & Trust Company (the "Transfer Agent") or
such other agent or agents as shall be appointed by Definition Technologies,
shall be entitled to receive in exchange therefor a certificate or certificates
evidencing the number of full Definition Technologies shares for which the
shares of common stock of the merged company theretofore represented by the
certificate or certificates so surrendered shall have been exchanged as provided
in this paragraph 4, together with such warrants as comprise Units. As soon as
practicable after the elective time of the merger, the Transfer Agent will send
a notice and transmittal form to each holder of an outstanding certificate which
immediately prior to the effective time of such merger evidenced shares of
common stock of the merged company and which is to be exchanged for Definition
Technologies as provided in paragraph 3 hereof advising such stockholder of the
terms of the exchange effected by such merger and the procedure for surrendering
to the Transfer Agent (which may appoint forwarding agents) such certificate for
exchange into one or more certificates evidencing Definition Technologies
shares. Until so surrendered, each outstanding certificate which, prior to the
Effective time of such merger, represented common stock of the merged company
(other than shares previously held by dissenting stockholders) will be deemed
for all corporate purposes of Definition Technologies to evidence ownership of
the number of full Definition Technologies shares for which the shares of common
stock of the merged company represented thereby were exchanged; provided,
however, that until such outstanding certificates formerly evidencing common
stock of the merged company are so surrendered, no dividend payable to holders
of record of Definition Technologies shares as of any date subsequent to the
effective time of such merger or any cash in lieu of any fraction of a
Definition Technologies share payable pursuant to Section 5 hereof shall be paid
to the holder of such outstanding certificates in respect thereof. As soon as
practicable after the effective time of each merger, the Transfer Agent will
send a notice and transmittal form to each holder of an outstanding certificate
of Definition which immediately prior to the effective time of such merger
evidenced shares of common stock of Definition, Ltd. as provided in paragraph 3
hereof, advising such stockholder of the terms of the distribution effected by
such merger and the procedure for receiving from the Transfer Agent (which may
appoint forwarding agents) such certificate for one or more certificates
evidencing Definition Technologies share. After the effective time of such
merger there shall be no further registry of transfers on the records of the
merged company of share of common stock of the merged company and, if a
certificate evidencing such shares is presented to Definition Technologies, it
shall be canceled and exchanged for a certificate evidencing shares of
Definition Technologies common stock as herein provided.
5. No Fractional Shares. Neither certificates nor scrip for fractional
Definition Technologies shares will be issued, but in lieu thereof each holder
of shares of any Company who would otherwise have been entitled to a fraction of
a Definition Technologies share, upon surrender of all the certificates
evidencing share of common stock of such company registered in the name of such
holder, will be paid the cash value of such fraction, which shall be equal to
such fraction multiplied by the market value of a full Definition Technologies
share at the close of trading of the Definition Technologies shares after the
effective time of such merger, as determined by Definition Technologies in any
reasonable manner.
6. Certificate of Incorporation: By-laws Directors. The Certificate of
Incorporation and By-laws of Telemark Worldwide Inc. as in effect immediately
prior to the effective time of the merger, shall continue to be the Certificate
of Incorporation and By-laws of Definition Technologies, until they shall
thereafter be duly altered, amended or repealed. The directors of Definition
Technologies shall continue as the directors of Definition Technologies until
their successors shall be duly elected and qualified
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
------------------------------
1. Representations and Warranties of Definition Technologies. Definition
Technologies represents and warrants to Borco, as follows:
(a) DEFINITION TECHNOLOGIES has the corporate power and authority to
enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by the Board of
Directors of DEFINITION TECHNOLOGIES, and, except for the approval of DEFINITION
TECHNOLOGIES's stockholders, no other corporate proceedings on the part of
DEFINITION TECHNOLOGIES are necessary to authorize this Agreement and the
transactions contemplated hereby.
(b) Except as previously disclosed to BORCO in writing or in the
reports delivered pursuant to Section 13(b) or the Proxy Statement (as that term
is defined under Schedule 14A of the Securities Exchange Act of 1934) with
respect to the merger since September 30, 1999, there has not been any material
adverse change in the business, operations, properties, assets, condition,
financial or otherwise, or prospects of DEFINITION TECHNOLOGIES and its
subsidiaries taken as a whole.
(c) Due Organization; Power; Qualification; Subsidiaries and
--------------------------------------------------------
Affiliates; Etc.
----------------
(i) DEFINITION TECHNOLOGIES is a corporation duly organized,
validly existing, and in good standing under the laws of the State of
Texas and has the corporate power to own its property and to carry on
its business as now conducted. The nature of the business now
conducted by Definition Technologies, the character of the property
owned by it, or any other state of facts does not require DEFINITION
TECHNOLOGIES to be qualified to do business as a foreign corporation
in any jurisdiction.
(ii) DEFINITION TECHNOLOGIES has no subsidiaries or affiliates
(as that term is used in the regulations promulgated under the
Securities Act of 1933).
(d) Capitalization
--------------
(i) The total authorized capital stock of DEFINITION TECHNOLOGIES
consists of 100,000 shares of DEFINITION TECHNOLOGIES common stock
($0.01 par value). The aggregate of 1,000 Common shares, issued by
Definition Technologies represents all of the issued and outstanding
stock of DEFINITION TECHNOLOGIES. All of said common shares have been
duly and validly issued and are fully paid and non-assessable.
(ii) There are and on the Closing Date there will be no
outstanding subscriptions, options, warrants, contracts, calls, puts,
agreements, demands or other commitments or rights of any type to
purchase or acquire any securities of DEFINITION TECHNOLOGIES, nor are
there outstanding securities of DEFINITION TECHNOLOGIES which are
convertible into or exchangeable for any shares of DEFINITION
TECHNOLOGIES Common Stock and DEFINITION TECHNOLOGIES has no
obligation of any kind to issue any additional securities.
(e) Financial Information: No Material Adverse Change
-------------------------------------------------
(i) DEFINITION TECHNOLOGIES has furnished to BORCO the financial
statements of DEFINITION TECHNOLOGIES as at and for the months ended
December 31, 1997 and December 31, 1998 (the "Financials"). The
Financials have been prepared in accordance with generally accepted
accounting principles, and fairly present the financial condition of
DEFINITION TECHNOLOGIES as at the date thereof, and the results of
operation of DEFINITION TECHNOLOGIES for the period then ended.
(ii) Since December 31, 1998, there has been no material adverse
change in the business or financial condition or the operations of
DEFINITION TECHNOLOGIES or to the best knowledge of DEFINITION
TECHNOLOGIES any occurrence, circumstance, or combination thereof
which reasonably could be expected to result in such a material
adverse change in the future except as stated and shown on
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Exhibit B.
(iii) At December 31, 1998, there were no liabilities, absolute
or contingent of DEFINITION TECHNOLOGIES that were not shown or
reserved against on the balance sheets included in the Financials,
except obligations under the contracts shown on or as otherwise
disclosed in Exhibit B.
(iv) Since December 31, 1998, DEFINITION TECHNOLOGIES has not
sold or otherwise disposed of or encumbered any of the properties or
assets reflected on the Financials, or otherwise owned or leased by
it, except in the ordinary course of business, or as otherwise
disclosed on Exhibit B.
(f) Tax Matters.
------------
(i) DEFINITION TECHNOLOGIES has filed or caused to be filed with
the appropriate federal, state, county, local and foreign governmental
agencies or instrumentalities all tax returns and tax reports required
to be filed, and all taxes, assessments, fees and other governmental
charges have been fully paid when due.
(ii) There is no pending or, to the best knowledge of DEFINITION
TECHNOLOGIES, any threatened federal, state or local tax audit of
DEFINITION TECHNOLOGIES; there is no agreement with any federal, state
or local taxing authority by DEFINITION TECHNOLOGIES that may affect
the subsequent tax liabilities of BORCO.
(iii) Without limiting the foregoing: (a) the financial
statements include adequate provision for all taxes, assessments,
fees, penalties and governmental charges which have been or in the
future may be assessed against DEFINITION TECHNOLOGIES with respect
to the period then ended and all periods prior thereto; and (b)
DEFINITION TECHNOLOGIES is not, on the date hereof, liable for taxes,
assessments, fees or governmental charges.
(g) No Conflict or Default. Neither the execution and delivery of this
Agreement, nor compliance with the terms and provisions hereof, including
without limitation the consummation of the transactions contemplated hereby,
will violate any statute, regulation or ordinance of any governmental authority,
or conflict with or result in the breach of any term condition or provisions of
the Articles of Incorporation or Bylaws of DEFINITION TECHNOLOGIES, or of any
agreement, deed, contract, mortgage, indenture, writ, order decree, legal
obligation or instrument to which DEFINITION TECHNOLOGIES is a party or by which
it or any of its respective assets or properties are or may be bound; or
constitute a default (or an event which, with the lapse of time or the giving of
notice, or both, would constitute a default) thereunder, or result in the
creation or imposition or any lien, charge or encumbrance, or restriction of any
nature whatsoever with respect to any properties or assets of DEFINITION
TECHNOLOGIES, or give to others any interest or rights, including rights of
termination, acceleration or cancellation in or with respect to any of the
properties, assets, contracts or business of DEFINITION TECHNOLOGIES.
(h) Party to Agreements. DEFINITION TECHNOLOGIES is not a party to any
contract or other arrangement except those made in the ordinary course of
business or which are terminable on the giving of sixty (60) day's (or less)
notice of DEFINITION TECHNOLOGIES's intent to terminate such contract.
DEFINITION TECHNOLOGIES is not in default in any material respect under any
contract or agreement to which it is a party or by which it or any of its assets
is or may be bound.
(i) Litigation. There are no actions, suits, investigations, or
proceedings pending, or, to the knowledge of DEFINITION TECHNOLOGIES,
threatened, against or affecting or which may affect DEFINITION TECHNOLOGIES,
the performance of the terms and conditions hereof; or the consummation of the
transactions contemplated hereby, in any court or by or before any governmental
body or agency, including without limitation any claim, proceeding or litigation
for the purpose of challenging, enjoining or preventing the execution, delivery
or consummation of this agreement; and DEFINITION TECHNOLOGIES does not know of
any state of facts which would give rise to any such action, suit, investigation
or proceeding. DEFINITION TECHNOLOGIES is not subject to any order, judgment,
decree, stipulation or consent or any agreement with any governmental body or
agency which affects its business or operation.
(j) Governmental Approval DEFINITION TECHNOLOGIES has all permits,
licenses, orders and approvals of all federal, state, local or foreign
governmental or regulatory bodies required for DEFINITION TECHNOLOGIES
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to conduct its business as presently conducted. All such permits, licenses,
orders and approvals are in full, force and effect and no suspension or
cancellation of any of them is threatened, and none of such permits, licenses,
orders or approvals will be affected by the consummation of the transactions
contemplated by this Agreement and all such permits, licenses, order or
approvals to the extent transferable, are transferable to DEFINITION
TECHNOLOGIES. No approval or authorization of or filing with any governmental
authority on the part of DEFINITION TECHNOLOGIES is required as a condition to
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
(k) Employee Benefit Plans. DEFINITION TECHNOLOGIES does not have any pension
plan, profit-sharing plan or employees' savings plan, and DEFINITION
TECHNOLOGIES is not otherwise subject to any applicable provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA").
(1) Conflicts of Interest Transactions between Management of DEFINITION
TECHNOLOGIES and such Corporation Management's interest in affiliated
Corporations agreements as to Management's remuneration, as well as any other
actual or potential conflicts of interest are disclosed in Exhibit B.
2. Representations and Warranties of BORCO: BORCO represents and warrants,
to DEFINITION TECHNOLOGIES as follows
(a) Such Company has the corporate power and authority to enter into
this Agreement and to carry out its obligation hereunder The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by its Board of Directors and, except for the
approval of its stockholders, no other corporate proceedings on the part of such
Company are necessary to authorize this Agreement and the transactions
contemplated hereby.
(b) Except as disclosed in writing in Exhibit B herein, since December
31, 1997, there has not been any material adverse change in the business,
operations, properties, assets, condition, financial or otherwise, or prospects
of such Company taken as a whole.
(c) BORIC has heretofore delivered to DEFINITION TECHNOLOGIES (i)
Business Plan; (ii) Minutes of Directors and Shareholders meetings; and (iii)
audited financial statements for the year ended December 31, 1998, and December
31,1997. Such documents did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein in order to make
the statements therein, in light of the circumstances under which. they were
made, not misleading, mad the financial statements heretofore delivered to
DEFINITION TECHNOLOGIES are is accordance with the books and records of BORCO
and fairly present the financial position and the results of the operations,
changes in stockholders' equity and changes in financial position of BORCO, as
at and for the periods indicated, in each case in conformity with generally
accepted accounting principles consistently applied.
(d) The authorized capital stock of BORCO consists of 10,000 shares of
common stock, $0.01 par value per share, of which 10,000 shares are issued and
outstanding as of the date hereof There are no options, warrants, convertible
securities or rights which may require any Company to issue additional shares of
its capital stock other than as listed in Exhibit C. All the outstanding shares
of Common stock of Borco have been duly authorized, and are validly issued,
fully paid and nonassessable.
(e) Any amounts due and owing immediately prior to the effective date
of the merger to the officers, directors, and employees of BORCO shall not be
paid to such persons out of funds of Definition Technologies existing as of the
closing date
(f) Due Organization: Power; Qualification; Subsidiaries and
-----------------------------------------------------------------
Affiliates; Etc.
- ----------------
(i) BORCO is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Pennsylvania and has
the corporate power to own its property and to carry on its business
as now conducted. The nature of the business now conducted by BORCO,
the character of the property owned by it, or any other state of facts
does not require BORCO to be qualified to do business as a foreign
corporation to any jurisdiction.
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(ii) There are no subsidiaries or affiliates (as that term is
used in the regulations promulgated under the Securities Act of 1933)
of BORCO. BORCO will cause any subsidiary or affiliate which it may
now have, and/or which it may organize or acquire in the future to
comply fully with all terms and provisions of this Agreement to the
same extent as if such subsidiary or affiliate were Borco
(g) Title and Authority. To the best of the knowledge of BORCO,
shareholders as listed in Exhibit G are together the holders of record and sole
beneficial owners of all of the outstanding shares of BORCO common stock and now
have, at closing will have, and at all times prior to the closing hereunder will
have:
(i) full legal title to all of such shares free and clear of any
liens, security interests, encumbrances, pledges, charges. claims
voting trusts, restrictions on transfer, and of any rights or interest
therein, direct or contingent, in favor of any other parties; and
(ii) full and unrestricted right, power and authority to sell,
assign, transfer and deliver the same or to cause the same to be
transferred to BORCO in accordance with this agreement
(h) Financial Information: Contingent Liabilities.
----------------------------------------------
(i) At December 31, 1998, there were no liabilities, absolute or
contingent of BORCO that were not shown or reserved against on the
balance sheets included in the Financials, except obligations under
the contracts shown on Exhibit B.
(ii) Since December 31, 1998, BORCO has not sold or otherwise
disposed of or encumbered any of the properties or assets reflected on
the Financials, or otherwise owned or leased by it, except in the
ordinary course of business, and as otherwise disclosed on Exhibit B
herein.
(i) Tax Matters.
------------
(i) BORCO has filed or caused to be filed with the appropriate
federal, state, county, local and foreign governmental agencies or
instrumentalities al1 tax returns and tax reports required to be
filed, and all taxes, assessments, fees and other governmental.
charges have been fully paid when due.
(ii) There is no pending or, to the best knowledge of BORCO,
threatened federal, state or local tax audit of BORCO; there is no
agreement with any federal, state or local taxing authority that may
affect the subsequent tax liabilities of BORCO.
(iii) Without limiting the foregoing: (a) the Financials include
adequate provision for all taxes, assessments fees, penalties and
governmental charges which have been or in the future may be assessed
against Borco with respect to the period then ended and all periods
prior thereto; and (b) BORCO is not, on the date hereof, liable for
taxes, assessments, fees or governmental charges.
(j) No Conflict or Default, Neither the execution and delivery of this
Agreement, nor compliance with the terms and provisions hereof, including
without limitation the consummation of the transactions contemplated hereby,
will violate any statute, regulation or ordinance of any governmental authority,
or conflict with or result in the breach of any term, condition or provisions of
the Articles of Incorporation or Bylaws of Borco, or of any agreement, deed,
contract, mortgage, indenture, writ, order decree, legal obligation or
instrument to which Borco is a party or by which it or any of its respective
assets or properties are or may be bound, or constitute a default (or an event
which, with the lapse of time or the giving of notice, or both, would constitute
a default) thereunder, or result in the creation or imposition of any lien,
charge or encumbrance, or restriction of any nature whatsoever with respect to
any properties or assets of Borco, or give to others any interest or rights,
including rights of termination, acceleration or cancellation in or with respect
to any of the properties, assets. contracts or business of Boron.
(k) Party to Agreement. Borco is not a party to any contract or other
arrangement except those made in the ordinary course of business or which are
terminable on the giving of sixty (60) day's (or less) notice of Borco's intent
to terminate such contract, except as set forth on Exhibit D annexed hereto.
Borco is not in default in any material respect under any contract or agreement
to which it is a party or by which it or any of its assets is or may be bound
-8-
(1) Litigation. Other than as disclosed in its Financial Statements
for the period ended December 31,1998, there are no actions, suits,
investigations, or proceedings pending, or, to the knowledge of Borco,
threatened, against or affecting or which may affect Borco, the performance of
the terms and conditions hereof, or the consummation of the transactions
contemplated hereby, in any court or by or before any governmental body or
agency, including without limitation any claim, proceeding or litigation for the
purpose of challenging, enjoining or preventing the execution, delivery or
consummation of this agreement; and except as otherwise disclosed herein does
not know of any state of facts which would give rise to any such action, suit
investigation or proceeding. Borco is not subject to any order, judgment,
decree, stipulation or consent or any agreement with any governmental body or
agency which affects its business or operation.
(m) Governmental Approval. Borco has all permits, licenses, orders and
approvals of all federal state, local or foreign governmental or regulatory
bodies required for Borco to conduct its business as presently conducted. All
such permits, licenses, orders and approvals are in full force and effect and no
suspension or cancellation of any of them is threatened, and none of such
permits, licenses, orders of approvals will be affected by the consummation of
the transactions contemplated by this Agreement and all such permits, licenses,
order or approvals, to the extent transferable, are transferable to Borco. No
approval or authorization of or filing with any governmental authority on the
part of Borco is requited as a condition to the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.
(n) Salaries. Exhibit E annexed hereto and made a part hereof is a
true and complete list, as of the date of this agreement, of all of the persons
who are employed by Borco, together with their compensation (including bonuses)
for the year ended December 31, 1998 and tire rate of compensation (including
bonus arrangements) currently being paid to each such employee.
(o) Accrued Compensation. Borco does not have any outstanding
liability for payment of wages, vacation pay (whether accrued or otherwise),
salaries, bonuses, pensions or contributions under any labor or employment
contract, whether oral or written or by reason of any past practices with
respect to such employees based upon or accruing with respect to services or
present or former employees of Borco, except for such amounts as are disclosed
in Exhibit E and except for any payment or contribution period.
(p) Employee Benefit Plans. Borco does not have any pension plan,
profit-sharing plan or employees' savings plan, and Borco is not otherwise
subject to any applicable provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA")
(q) Conflicts of Interest. Transactions between Management of Borco
and such Corporation, Management's interest in affiliated Corporations,
agreements as to Management's remuneration, as well as any other actual or
potential conflicts of interest are disclosed in Exhibit H.
(r) Environmental Concerns. Borco has not engaged in any operations
which have resulted or will result in any chemicals, hazardous, noxious or toxic
wastes being deposited, spilled, leaked, disposed of, dumped or buried at any
facility, contiguous property, or any other real property, which have, will, or
may result in property damages, personal injury or clean-up costs
ARTICLE III.A
COVENANTS OF BORCO
------------------
Borco agrees that prior to the closing date:
(a) No dividend shall be declared or paid by other distribution
(whether in cash, stock, property or any combination thereof) or payment
declared or made in respect to Borco common stock, nor shall Borco, acquire or
redeem or split, combine or reclassify any shares of its capital stock
(b) No change shall be made in the number of shares of authorized or
issued BORCO common stock; nor shall any option, warrant, call, right,
commitment or agreement of any character be granted or made by BORCO relating
to its authorized or issued BORCO common stock, nor shall BORCO issue, grant or
sell any securities or obligations convertible into or exchangeable for shares
of BORCO common stock, except as disclosed in Exhibit C.
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(c) BORCO will not take, agree to take or knowingly permit to be taken
any action or do or knowingly permit to be done anything, in the conduct of the
business of BORCO or otherwise, which would be contrary to or in breach of any
of the terms or provisions of this Agreement, or which would cause any of
BORCO's representations contained herein to be or become untrue in any material
respect at the closing date.
(d) BORCO will not (i) incur any indebtedness for borrowed money; (ii)
assume, guarantee, endorse, or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other
individual, firm or corporation; or (iii) make any loans, advances or capital
contributions to or investments in, any other individual, firm or corporation.
(e) BORCO will not alter or change any employment or other contract
with any of its management personnel or make, adapt, alter, revise, or amend any
pension, bonus, profit-sharing or other employee benefit plan, or grant any
salary increase or bonus to any person without the prior written consent of
purchaser, except for normal year-end or anniversary salary adjustments for
employees, excluding officers.
ARTICLE III.B
COVENANTS OF DEFINITION TECHNOLOGIES
DEFINITION TECHNOLOGIES agrees that prior to the closing date:
(a) No dividend shall be declared or paid or other distribution
(whether in cash, stock, property or any combination thereof] or payment
declared or made in respect of DEFINITION TECHNOLOGIES Common Stock, nor share
DEFINITION TECHNOLOGIES purchase, acquire or redeem or split, combine or
reclassify any shares of DEFINITION TECHNOLOGIES Common stock
(b) Except as herein provided, no change shall be made in the number
of shares of authorized or issued DEFINITION TECHNOLOGIES common stock; nor
shall any option, warrant, call, right, commitment or agreement (other than this
Agreement) of any character be granted or made by DEFINITION TECHNOLOGIES
relating to its authorized or issued DEFINITION TECHNOLOGIES common stock; nor
shall DEFINITION TECHNOLOGIES issue, grant or sell any securities or obligations
convertible into or exchangeable for shares of common stock.
(c) Definition Technologies will not take, agree to take, or knowingly
permit to be taken any action, or do, or knowingly permit to be done anything in
the conduct of the business of DEFINITION TECHNOLOGIES, or otherwise, which
would be contrary to or in breach of any of the terms or provisions of this
Agreement, or which would cause any of the representations of DEFINITION
TECHNOLOGIES contained herein to be or become untrue in any material respect at
the Closing Date.
ARTICLE IV
CERTAIN COVENANTS
-----------------
1. Stockholders' Meeting. BORCO will take all actions necessary in
accordance with applicable law and its Articles of Incorporation and By-laws to
convene a meeting of its stockholders as promptly as practicable to consider and
vote upon the approval of the merger to which it is a party. DEFINITION
TECHNOLOGIES will take all action necessary in accordance with applicable law
and its Certificate of Incorporation and By-laws to convene a meeting of its
stockholders as promptly as practicable to consider and vote upon the approval
of the merger.
2. Conduct of Business by Borco Pending the Merger. Prior to the Effective
date of the merger, unless DEFINITION TECHNOLOGIES and BORCO shall otherwise
agree in writing, and disclosed to DEFINITION TECHNOLOGIES and BORCO in writing
prior to the date hereof, each Company shall not (i) operate its business
otherwise than in the ordinary course, (ii) grant any compensation increase to
any director, officer or employee, (iii) issue, authorize or propose the
issuance of additional shares of capital stock of any class or securities
convertible into any such shares or rights, warrants or options to acquire any
such shares or convertible securities, (iv) amend its Articles of Incorporation
or By-laws, (v) split, combine or reclassify its outstanding shares of common
stock, or (vii) authorize, recommend or propose any merger, consolidation,
acquisition of assets, disposition of assets, material change in its
capitalization or any comparable event, not in the ordinary) course of business
(other
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than the transactions contemplated hereby and transactions as to which written
notice has been given to DEFINITION TECHNOLOGIES prior to the date hereof).
3. Takeover Proposals. BORCO and DEFINITION TECHNOLOGIES will not, and will
not authorize or permit any officer, director or employee of, or any investment
banker, attorney, accountant or other representative retained by, or agent of
such Company or any affiliate of such company, to directly or indirectly solicit
or encourage any proposal for a merget or other business combination involving
such Company or for the acquisition of a substantial equity interest in such
Company or a substantial portion of such Company's assets, other than as
contemplated by this Agreement. Each Company will promptly advise the other
company of the terms of any such proposal that it may receive.
4. Conduct of Business by DEFINITION TECHNOLOGIES Pending the Merger. Prior
to the effective time of the merger, DEFINITION TECHNOLOGIES and BORCO shall not
split, combine or reclassify its common stock or declare, set aside or pay any
dividend payable in its common stock, unless prior to the record date for such
dividend or the effective date of such split, combination or reclassification,
it tenders to BORCO or DEFINITION TECHNOLOGIES (as the case may be) its
agreement to amend this Agreement so as no effect an appropriate adjustment in
the number of DEFINITION TECHNOLOGIES or BORCO shares (as the case may be)
deliverable upon the effective time of each merger.
5. Information Provided by BORCO. The information to be provided by BORCO
for use in the Proxy Statement to be used in connection with the mergeR to which
BORCO is a party shall, at the times Proxy Statement is mailed, and at the time
of the stockholders' meetings of BORCO and DEFINITION TECHNOLOGIES and at the
effective time of the merger, be true and correct in all material respects and
shaLL not contain any untrue statement of a material fact, or omit to state a
material fact required to be stated therein to make the statements made, in the
light of the circumstances under which they were made, not misleading.
6. Proxy Statement. In connection with the preparation of the Proxy
Statement for DEFINITION TECHNOLOGIES, and/or any other filings, BORCO and
DEFINITION TECHNOLOGIES will cooperate with each other and will furnish the
information relating BORCO and DEFINITION TECHNOLOGIES, as the case may be,
required by the Securities Act of 1933 and/or the Securities Exchange Act of
1934 to be set forth tun such Proxy Statement and/or any other filings.
7. Press Releases. BORCO and DEFINITION TECHNOLOGIES agree to cooperate
with each other in releasing information concerning this Agreement and the
transactions contemplated herein. Where possible, each of the parties shall
furnish to the other drafts of all releases prior to publication. Nothing
contained herein shall prevent either party at any time from furnishing any
information to any governmental agency.
8. Rule 145 Affiliates. As soon as practicable after the date hereof BORCO
shall furnish to DEFINITION TECHNOLOGIES a schedule that sets forth the names
of, and number of shares of such company owned beneficially, or of record, by
any persons who may be deemed to be an affiliate of such company as that term is
used in Rule 145 under the Securities Act of 1933 (a "Rule 145 Affiliate").
9. Recommendation of Approval. The Board of Directors of DEFINITION
TECHNOLOGIES and BORCO shall continue to recommend to their respective
stockholders approval of this Agreement and the merger to which such company is
a party, except as the fiduciary obligations of each such Board of Directors may
otherwise require.
10. Access. Prior to the closing, BORCO shall afford to the of officers,
attorneys, accountants, and other authorized representatives of DEFINITION
TECHNOLOGIES free and full access to the premises, books and records of BORCO in
order that DEFINITION TECHNOLOGIES may make such investigation as it may desire
of the affairs of BORCO. Prior to the closing, DEFINITION TECHNOLOGIES shall
afford to the officers, attorneys, accountants, and other authorized
representatives of BORCO free and full areas to the premises, books and records
of the Company so that purchasers may malt such investigations as it may desire
of the affairs of the Company.
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ARTICLE V
CONDITIONS
----------
1. Conditions to the Obligations DEFINITION TECHNOLOGIES. The obligations
of DEFINITION TECHNOLOGIES to consummate the merger contemplated by this
Agreement are subject to the satisfaction, at or before the consummation of such
merger, of each of the following conditions:
(a) The stockholders of BORCO shall have duly approved the merger in
accordance with applicable law;
(b) The stockholders of DEFINITION TECHNOLOGIES shall have duly
approved such merger in accordance with applicable law;
(c) No action shall have been taken, and no statute, rule, regulation
or order shall have been promulgated, enacted, entered, enforced or deemed
applicable to the merger by any federal, state or foreign government or
governmental authority or by any court domestic or foreign, including the merger
of a preliminary or permanent injunction, which would (i) make the merger
illegal, (ii) require the divestiture by DEFINITION TECHNOLOGIES or any other
subsidiary of DEFINITION TECHNOLOGIES of the shares of such company or of a
material portion of the business of DEFINITION TECHNOLOGIES and its subsidiaries
taken as a whole, (iii) impose material limits on the ability of DEFINITION
TECHNOLOGIES to effectively control the business of DEFINITION TECHNOLOGIES and
its subsidiaries, (iv) otherwise materially adversely affect DEFINITION
TECHNOLOGIES and its subsidiaries taken as a whole or (v) if the merger is
consummated, subject any officer, director, or employee of DEFINITION
TECHNOLOGIES to criminal penalties or to civil liabilities not adequately
covered by insurance or enforceable indemnification maintained by DEFINITION
TECHNOLOGIES;
(d) No action or proceeding before any court or governmental
authority, domestic or foreign, by any government or governmental authority or
by any other person, domestic or foreign, shall be threatened, instituted or
pending which would reasonably be expected to result in any of the consequences
referred to in clauses (i) through (v) of paragraph (c) above;
(e) BORCO shall have complied in all material respects with its
agreements and covenants herein, and all representations and warranties of BORCO
herein shall be true and correct in all material respects at the time of
consummation of the merger as if made at that time, except to the extent they
expressly relate to an earlier date, and DEFINITION TECHNOLOGIES shall have
received a certificate to that effect to the best of the knowledge of BORCO,
signed by the President of BORCO;
(f) DEFINITION TECHNOLOGIES shall have received from William Paul,
counsel for BORCO, an opinion, satisfactory in form and substance to DEFINITION
TECHNOLOGIES, dated the closing date of such merger, substantially to the effect
that, (A) the merger will constitute a reorganization within the meaning of
Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended; (B) no
gain or loss will be recognized by, and no amount will be included in the income
of DEFINITION TECHNOLOGIES as a consequence of the merger, (C) no gain or loss
will be recognized by any stockholder of any company upon his/her/its exchange
of shares of common stock of BORCO or the shareholders of DEFINITION, LTD.
solely for DEFINITION TECHNOLOGIES shares in the merger, (D) gain realized by
any company stockholder who receives cash in addition to DEFINITION TECHNOLOGIES
shares will be recognized in an amount not in excess of such cash, (E) the basis
for the DEFINITION TECHNOLOGIES shares received by BORCO stockholder will be the
same as the basis far his/her/its shares of common stock increased by the
amount of gain, if any, recognized by such shareholder and reduced by the amount
of cash, if any, received by such shareholder and partner, and (F) the holding
period of DEFINITION TECHNOLOGIES shares received in the merger will include the
period for which the shares of common stock were held, provided that the common
stock of BORCO and DEFINITION TECHNOLOGIES was a capital asset in the hands of
BORCO and DEFINITION TECHNOLOGIES stockholders on the effective time.
(g) DEFINITION TECHNOLOGIES shall have received from William Paul,
counsel for BORCO, an opinion, in form and substance satisfactory to DEFINITION
TECHNOLOGIES, dated the effective time of the merger to which such Company is a
party, to the effect that:
(i) BORCO is a corporation duly organized, validly existing and
in good standing under the laws of the State of Pennsylvania.
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(d) No action or proceeding before any court or governmental
authority, domestic or foreign, by any government or governmental authority or
by any other person, domestic or foreign, shall be threatened, instituted or
pending which would reasonably be expected to result in any of the consequences
referred to to clauses (i) through (v) of paragraph (c) above;
(e) BORCO shall have complied in all material respects with its
agreements and covenants herein and all representations and warranties of BORCO
herein shall be true and correct in all material respects at the time of
consummation of the merger as if made at that time, except to the extent they
expressly relate to an earlier date, and DEFINITION TECHNOLOGIES shall have
received a certificate to that effect to the best of the knowledge of BORCO,
signed by the President of BORCO;
(f) DEFINITION TECHNOLOGIES shall have received from William Paul,
counsel for BORCO, an opinion, satisfactory in form and substance to DEFINITION
TECHNOLOGIES, dated the closing date of such merger, substantially to the effect
that: (A) the merger will constitute a reorganization within the meaning of
Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended; (B) no
gain or loss will be recognized by, and no amount will be included in the income
of DEFINITION TECHNOLOGIES as a consequence of the merger, (C) no gain or loss
will be recognized by an stockholder of any company upon his/her/its exchange of
shares of common stock of BORCO or the shareholders of DEFINITION, LTD. solely
for DEFINITION TECHNOLOGIES shares in the merger, (D) gain realized by any
company shareholder who receives cash in addition to DEFINITION TECHNOLOGIES
shares will be recognized in an amount not in excess of such case, (E) the basis
for the DEFINITION TECHNOLOGIES shares received by BORCO stockholder will be the
same as the basis for his/her/its shares of common stock, increased by the
amount of gain, if any, recognized by such shareholder and reduced by the shares
received in the merger will include the period for which the shares of common
stock were held, provided that the common stock of BORCO and DEFINITION
TECHNOLOGIES was a capital asset in the hands of BORCO and DEFINITION
TECHNOLOGIES stockholders on the effective time.
(G) DEFINITION TECHNOLOGIES shall have received from William Paul,
counsel for BORCO, an opinion, in form and substance satisfactory to DEFINITION
TECHNOLOGIES, dated the effective time of the merger to which such Company is
party, to the effect that:
(i) BORCO is a corporation duly organized, validly existing and
in good standing under the laws of the State of Pennsylvania.
(ii) All the outstanding shares of common stock of BORCO have
been duly authorized, and are validly issued, fully paid and
nonassessable;
(iii) BORCO has taken all requisite corporate action to approve
this Agreement and the transactions contemplated hereby, and this
Agreement has been duly authorized, executed and delivered by BORCO
and constitutes a valid and binding agreement of BORCO enforceable in
accordance with its terms;
(iv) Stockholders of BORCO have taken all requisite corporate
action to approve this Agreement and the transactions contemplated
hereby;
(v) To such counsel's knowledge, the execution, delivery and
performance of this Agreement by BORCO and the consummation of the
transactions contemplated hereby will not conflict with or result in
the breach of any of the terms, conditions or provisions of any
agreement, contract or commitment to which DEFINITION TECHNOLOGIES is
not also a party which is material to the business or properties of
BORCO as a whole or constitute a material default thereunder or give
to the others any material right of termination, cancellation or
acceleration thereunder, or otherwise require any approval which has
not been obtained;
(h) The holders of no more than ten percent (10%) of the issued and
outstanding shares of common stock of BORCO with respect to which the merger is
proposed shall have exercised their right to dissent as dissenting stockholders.
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(j) With respect to the merger of DEFINITION TECHNOLOGIES, the merger
of DEFINITION TECHNOLOGIES and BORCO shall have became effective, and a
Registration Statement under the Securities Act of 1433, as amended (the "Act")
on Form S-4 with respect to the securities offered hereby has become effective.
2. Conditions to the Obligations of BORCO. The obligations of BORCO to
consummate the merger contemplated by this Agreement are subject to the
satisfaction, at or before the consummation of such merger, of each of the
following conditions:
(a) The stockholders of DEFINITION TECHNOLOGIES shall have duly
approved the merger in accordance with applicable law, and each outstanding
share of BORCO common stock (currently 10,000) shall be canceled and shall be
converted into Definition Technologies shares (at the ratio of 230 units of
Definition Technologies for each share of Borco shares) by virtue of such merger
and without any action on the part of the holder thereof such that prior
Shareholders of Borco Common Stock will hold Units of Definition Technologies,
Definition Limited will hold Units of Definition Technologies, and current
shareholders of Definition will hold Units of Definition Technologies. Each Unit
Consisting of One Share of Common Stock $0.001 par value one Class A Common
Stock Purchase Warrant, and one Class B Common Stock Purchase Warrant. The
Common Stock, Class A and Class B Common Stock Purchase Warrants are to be
distributed as a Unit and subject to registration with the Securities and
Exchange Commission and Blue-Sky laws, detachable and separately tradeable. Each
Class A Warrant entitles the holder to purchase one share of common stock at a
price of $5.00, for a one hundred and eighty day period from ninety days until
one hundred eighty days from the effective date of the Merger. Each Class B
Warrant will entitle the holder to purchase one share of Common Stock at a price
of $5.00 at any time from three hundred sixty-five days to seven hundred and
thirty days from the effective date of the Merger. At the effective time of the
merger of Borco with and into Definition Technologies, by virtue of such merger
and without any action on the part of the holder thereof, such that prior
Shareholders of Borco Common Stock will hold 2,300,000 Units for Common Stock of
Definition Technologies, and current shareholders of Definition will hold
150,000 Units of Common Stock of Definition Technologies.
(b) No action shall have been takers and no statute, rule, regulation
or order shall have been promulgated, enacted, entered, enforced or deemed
applicable to the merger by any federal, state or foreign government or
governmental authority or by any court domestic or foreign, including the entry
of a preliminary or permanent injunction, which would (i) make the merger
illegal, (ii) require the divestiture by BORCO or any other subsidiary of BORCO
of the shares of such company or of a material portion of the business of BORCO
and its subsidiaries taken as a whole, (iii) impose material limits on the
ability of BORCO to effectively control the business of BORCO and its
subsidiaries, (iv) otherwise materially adversely affect BORCO and its
subsidiaries taken as a whole or (v) if the merger is consummated, subject any
officer, director, or employee of BORCO to criminal penalties or to civil
liabilities not adequately covered by insurance or enforceable indemnification
maintained by BORCO;
(c) No action or proceeding before any court or govermental authority:
domestic or foreign, by any government or governmental authority of by any other
person, domestic or foreign, shall be threatened, instituted or pending which
would reasonably be expected to result in any of the consequences referred to in
clauses (i) through (v) of paragraph (c) above;
(d) The holders of no more than ten percent (10%) of the issued and
outstanding shares of common stock of DEFINITION TECHNOLOGIES with respect to
which such merger is proposed shall have exercised their right to dissent as
dissenting stockholders.
(c) With respect to the merger of DEFINITION TECHNOLOGIES, the merger
of DEFINITION TECHNOLOGIES and BORCO shall have become effective.
3. Conditions to each Company's Obligation. The obligation of each company
to consummate the merger contemplated by this Agreement is subject to the
satisfaction, at or before the consummation of such merger, of each of the
following conditions;
(a) the stockholders of such Company shall have duly approved the
merger in accordance with applicable law;
(b) the stockholders of DEFINITION TECHNOLOGIES shall have duly
approved the merger in accordance with applicable law;
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(c) no action shall have been taken, and no statute, rule, regulation
or order shall have been promulgated, enacted, entered, enforced or deemed
applicable to the merger by any federal, state or foreign government or
governmental authority or by any court, domestic or foreign, including the entry
of a preliminary or permanent injunction, which would (i) make the merger legal,
or (ii) if the merger is consummated, subject any officer, director or employee
of BORCO to criminal penalties or to civil liability not adequately coveted by
insurance or enforceable indemnification arrangements maintained by BORCO or
DEFINITION TECHNOLOGIES;
(d) No action or proceeding before any court or governmental authority
domestic or foreign by any government or governmental authority or by any other
person, domestic or foreign, shall be threatened, instituted or pending which
would reasonably be expected to result in any of the consequences referred to in
clauses (i) and (ii) of paragraph (c) above;
(e) With respect to the merger of DEFINITION TECHNOLOGIES, the merger
of DEFINITION TECHNOLOGIES and BORCO shall have become effective.
ARTICLE VI
STOCK RESTRICTION/INVESTMENT REPRESENTATIONS
--------------------------------------------
1. Solicitation. Each shareholder of BORCO and DEFINITION TECHNOLOGIES will
not (nor will it permit any agent or affiliate to) solicit, initiate or
encourage any Acquisition Proposal or furnish any information to, or cooperate
with, any person, corporation, firm or other entity with respect to an
Acquisition Proposal. As used herein "Acquisition Proposal" means a proposal for
a merger or other business combination involving the Company or for the
acquisition of a substantial equity interest in, or a substantial portion of the
assets of BORCO other than the merger.
2. The Officers Directors Shareholders Holding 10% or more of the
outstanding stock of BORCO each acknowledge, represent, warrant, and agree that:
(a) He/she is acquiring DEFINITION TECHNOLOGIES common stock to be
acquired pursuant to this Agreement for his/her own account for investment, and
he/she has no present intention to sell, distribute or otherwise dispose
thereof:
(b) He has evaluated his/her present and anticipated needs and person
requirements and is satisfied that he has adequate means for providing for these
expenses without respect to any income or other benefit which may be derived
from his investment in DEFINITION TECHNOLOGIES common stock and does not
anticipate any need to sell, assign, or transfer his common stock;
(c) He acknowledges being informed that the DEFINITION TECHNOLOGIES
common stock being received by him is not registered under the Securities Act of
1933 or any state securities law, and it must be held indefinitely unless it is
subsequently registered under the Securities Act of 1933 or Securities Exchange
Act of 1934 and applicable State security laws or he furnishes to DEFINITION
TECHNOLOGIES rat opinion of counsel satisfactory to DEFINITION TECHNOLOGIES that
registration is not required under the under such Act or laws;
(d) He has not obtained any representative to review or evaluate his
acquisition of DEFINITION TECHNOLOGIES common stock and, by reason of his
knowledge and experience in financial and business matters in general, he is
capable of evaluating the merits and risks of this investment;
(e) He has examined this Agreement (including the Exhibits hereto) and
has been given access to all underlying documents related to this transaction,
and is satisfied that he has received such information as he deems necessary or
appropriate as a prudent and knowledgeable investor to verify the accuracy of
such information and to evaluate the means and risks of acquiring DEFINITION
TECHNOLOGIES common stock. He has carefully evaluated his financial resources,
investment condition and the risks attendant upon this investment, and
acknowledges that he is able to bear the economic risks of this investment;
(f) He realizes that neither the Securities and Exchange Commission,
nor the securities regulatory body of any state has received, considered or
passed upon the accuracy or adequacy of the information and representations made
in this Agreement.
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ARTICLE VII
INDEMNIFICATION AND WAIVER OF CLAIMS - BORCO
--------------------------------------------
BORCO, hereby agrees to indemnify and hold DEFINITION TECHNOLOGIES, its
officers, directors, employees, agents, and DEFINITION, LTD.. its officers,
directors, employees, agents, and shareholders, harmless from and against the
following
(a) any and all liabilities, losses, damages, claims, costs and
expenses of BORCO of any nature, whether absolute, contingent or otherwise,
which are not expressly assumed by DEFINITION TECHNOLOGIES as herein provided,
including but not limited to any and all claims or rights to dissent from the
shareholders of BORCO, purported shareholders of BORCO, claims of BORCO
creditors, Federal or State or Local taxing authorities. other claimants of
BORCO, claims arising out of and/or connected to the cancellation, redemption,
retirement of BORCO stock;
(b) Any and all damages or deficiencies resulting from any
misrepresentation, breach of any warranty, or non-fulfillment of any covenant or
agreement on the part of BORCO contained in this Agreement or in any statement
or certificate furnished or to be furnished to BORCO pursuant hereto or in
connection with the transactions contemplated hereby; and
(c) Any and all actions, suits, proceedings, demands, assessments or
judgments, costs and expenses (including reasonable attorneys' fees) incident to
any of the foregoing, including any action taken against BORCO by any person
under the provisions of the Bulk Sales Law of any state.
(d) BORCO, as of the date immediately preceding this Agreement, will
indemnify and hold harmless DEFINITION TECHNOLOGIES, from and against any and
all losses, claims, expenses or liabilities, joint or several, to which they or
any of them may become subject within the meaning of the Securities and the
Securities Exchange Act of 1934 and the Securities act of 1933 (collectively the
"Act") or under any other statutes or at common law or otherwise, and will
reimburse and indemnify DEFINITION TECHNOLOGIES and its officers and directors
for any legal or other expenses including the cost of any investigation and
preparation] reasonably incurred by them or any of them in connection with
investigating or defending any litigation or claim, whether or not resulting in
any liability insofar as such losses, claims, damages, expenses, liabilities or
actions arise out of are based upon any untrue statement or alleged untrue
statement or a material fact contained in any Prospectus, Private Placement
Memorandums, Offering Circulars, Proxy Statements, and Verbal, Written and other
representations in connection with or related to Limited Partnership Offerings,
Joint Ventures, any stock or bond offering, stock conversion rights granted,
investment contracts, or other security as that term is defined under the Act or
any State Security Act [as amended or as supplemented thereof] or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading, or any negligent misrepresentation of any officer;
director, agent, or employee of BORCO; or any failure to perform any of the
terms or conditions of this agreement. DEFINITION TECHNOLOGIES agrees upon its
receipt of written notice of the commencement of any action against them as
aforesaid, in respect of which indemnity may be sought from BORCO, its Directors
and officers on account of the indemnity agreement contained in the subsection,
to notify BORCO promptly in writing of the commencement thereof. DEFINITION
TECHNOLOGIES agrees to notify BORCO promptly of the commencement of any
litigation or proceeding against it or against any of the officers or directors
of BORCO of which it may be advised, in connection with the issue and sale of
any of its securities.
ARTICLE VIII
CLOSING DATE
------------
The closing for the consummation of the merger contemplated by this Agreement
shall unless another date or place is agreed to in writing by the parties
hereto, take place at the offices of Definition, Ltd. on the date which is no
later than the fifth business day after the last to occur of the following
dates:
(a) Five (5) days after the date the stockholders of DEFINITION
TECHNOLOGIES and BORCO with respect to which such merger is proposed shall have
given the approval referred to is Article IV, Section 1, hereof, or
(b) The date on which all the conditions set forth in Article V hereof
shall have been satisfied, except to the extent any such conditions shall have
beat waived by DEFINITION TECHNOLOGIES or by the respective Companies; or
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(c) April 1, 2000.
ARTICLE IX
RESIGNATION AND ELECTION
------------------------
At the closing, DEFINITION TECHNOLOGIES will cause all of its officers and
directors to resign from office and to cause to be elected to the Board of
Directors of DEFINITION TECHNOLOGIES those persons designated by BORCO to wit:
John E. Bortoli Chairman, Board of Directors
Steven W. Swank Chief Executive Officer, President/Director
David Hastings Secretary, Treasurer/Director
Jim Kowalczyk Director
ARTICLE X
MISCELLANOUS
------------
l. Termination. With respect to each company, this Agreement may be
terminated and the merger to which such company is proposed to be a party as
contemplated herein may be abandoned (i) by the mutual consent of Borco and
Definition Technologies at any time: (ii) by either Borco or Definition
Technologies if the merger to which such company is proposed to be a party has
not been consummated on or prior to April 1, 2000; (iii) in the event of any
material adverse change in the business, property, or financial condition of
Borco or Definition Technologies; (iv) in the event of any action, suit, or
proceeding at law or equity against either Borco or Definition Technologies or
by any Federal, State, Local government agency or commission, board or agency,
where any unfavorable decision would materially adversely affect the business,
property or financial condition of income of Borco or Definition Technologies;
or (v) in the event the merger violates any federal or state statute, rule or
regulation. In the event of such termination and abandonment, neither Borco or
Definition Technologies (or any of its directors or officers) shall have any
liability or further obligation to any other party to this Agreement, except
that nothing herein will relieve any party from liability for any willful breach
of this Agreement.
2. Expenses. Whether or not any merger is consummated, all out-of-pocket
costs and expenses incurred in connection with the merger and this agreement
will be paid by the party incurring such expenses, except that BORCO shall bear
all legal costs and fees for preparing registration statements to be filed with
Federal and/or state securities agencies, proxy statements, proxy solicitation
costs, proxy mailing costs, due diligence fees and costs, costs and fees of any
registration statements, legal fees and costs in preparation of merger
documents, and auditing costs.
3. Brokers. No broker or finder is entitled to any brokerage or finder's
fee or other commission or fee from any Company or based upon arrangements made
by or on behalf of any Company with respect to the transactions contemplated by
this Agreement, except as disclosed on Exhibit F attached hereto and
incorporated herein by reference.
4. Arbitration. Any controversy arising out of, connected to, or relating
to any matters herein of the transactions with Borco, Definition Technologies,
and Definition on behalf of the undersigned, or this Agreement, or the breach
thereof, including, but not limited to any claims of violations of Federal
and/or State Securities Acts, Banking Statutes, Consumes Protection Statutes,
Federal and/or State anti-Racketeering (e.g. RICO) claims as well as any common
law claims and any State Law claim of fraud, negligence, negligent
misrepresentations, and/or conversion shall be settled by arbitration; and in
accordance with this paragraph and judgment on the arbitrator's award may be
entered is any court having jurisdiction thereof in accordance with the
provisions of Revised Code of Nevada. In the event of such a dispute, each party
to the conflict shall select an arbitrator, both of whom shall select a third
arbitrator which shall constitute the three person arbitration board. The
decision of a majority of the board of arbitrators, who shall render their
decision within thirty (30) days of appointment of the final arbitrator, shall
be binding upon the parties.
5. Other Actions. Each of the parties hereto agrees to execute and deliver
such other documents, certificates, agreements and other writings and to take
such other actions as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
6. Waiver and Amendment. Any provision of this Agreement may be waived at
any time by the party which is or whose stockholders are, entitled to the
benefits thereof and this Agreement may be amended or supplied at any time. No
such
-17-
waiver, amendment or supplement shall be effective unless in writing and signed
by the party or parties necessary thereto.
7. Entire Agreement. This Agreement contains the entire agreement between
Definition Technologies, Borco, and Definition, with respect to the merger and
the other transactions contemplated hereby.
8. Applicable Law This agreement shall be governed by and construed in
accordance with the laws of the State of Nevada.
9. Descriptive Headings The descriptive headings are for convenience of
reference only and shall not affect in any way the meaning or interpretation of
this Agreement.
10. Notices. All notes or other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally or
sent by registered or certified mail postage prepaid, addressed as follows
If to DEFINITION TECHNOLOGIES, to: Charles R. Kiefner
238 Wilshire Boulevard, Suite 149
Casselberry, FL 32707
If to BORCO, to: John E. Bortoli
1130 East Confer Avenue
Johnston, Pennsylvania 15905
If to DEFINITION, to: Donna Anderson
4625 West Nevso Drive
Suite 2
Las Vegas, Nevada 89103
11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute but one agreement.
12. Corporate Name. shall, as of the date of closing, change its corporate
name from BORCO EQUIPMENT COMPANY, INC. to TELMARK WORLDWIDE, INC.
13. Site. Each of the undersigned, being all the directors in office of
DEFINITION TECHNOLOGIES, INC., a Texas Corporation, BORCO EQUIPMENT COMPANY,
INC., a Pennsylvania Corporation, and DEFINITION, LTD., a Nevada Corporation,
hereby agree to vote all shares held of record by him/her/it and to recommend to
the shareholders a vote in favor of the transactions contemplated by the within
Agreement at the meeting of shareholders of said corporation contemplated by
this Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized officers of the parties hereto as of the date first hereinabove
written.
DEFINITION TECHNOLOGIES, INC.
By: /s/ Charles R. Kiefner
___________________________
Title: President
DIRECTORS OF DEFINITION TECHNOLOGIES:
/s/ Charles R. Kiefner
______________________________
CHARLES R. KIEFNER
-18-
STATE Florida )
) ss
COUNTY Seminole )
On this day of December 6th, 1999, before me, the undersigned, a Notary Public
in and for the State Florida, duly commissioned and sworn, personally appeared
CHARLES R. KIEFNER, to me known to be the President and Secretary, respectively,
of DEFINITION TECHNOLOGIES, INC., the corporation that executed the foregoing
instrument, and acknowledged the said instrument to be the free and voluntary
act and deed of said corporation, for the uses and purposes therein mentioned,
and on oath stated that he was authorized to execute the said instrument and
that the seal affixed is the corporate seal of said corporation.
WITNESS my hand and official seal hereto affixed the day and year first above
written.
/s/ Laura M. Kough
-------------------------------------
NOTARY PUBLIC in and for the State of
FL, residing in FL.
My commission expires_______
Laura M. Kough [seal]
My Commission CC787135
Expires November 1, 2002
-19-
BORCO EQUIPMENT COMPANY, INC.
By: /s/ John E. Bortoli, President
------------------------------------
Title:
ATTEST:
/s/ James G. Berkhamer
- -------------------------------
DIRECTORS of BORCO:
/s/ John E. Bortoli
------------------------------------
JOHN E. BORTOLLI
STATE OF )
)ss
COUNTY OF _ _ )
On this day of December 10, 1999, before me, the undersigned, a Notary Public in
and for the State of, Pennsylvania ,duly commissioned and sworn, personally
appeared JOHN E. BORTOLI, to me known to be the President and Secretary,
respectively, of BORCO EQUIPMENT COMPANY, INC. the corporation that executed the
foregoing instrument, and acknowledged the said instrument to be the free and
voluntary act and deed of said corporation, for the uses and purposes therein
mentioned, and on oath stated that he was authorized to execute the said
instrument and that the seal affixed is the corporate seal of said corporation.
WITNESS my hand and official seal hereto affixed the day and year above written.
/s/ Brett M. Bortoli
NOTARIAL SEAL ------------------------------------
BRETT M. BORTOLI, Notary Public NOTARY PUBLIC in and for the State of
Johnstown, Cambria County, PA Pennsylvania, residing in Cambria County
My Commission expires: 10/27/200l My Commission expires: 10/27/200l.
-20-
DEFINITION, LTD.
By: /s/ Donna L. Anderson
------------------------------------
Title: President
ATTEST:
- ------------------------------------
DIRECTORS OF DEFINITION, LTD.:
/s/ Donna L. Anderson
------------------------------------
DONNA ANDERSON
/s/ Charles R. Kiefner
------------------------------------
CHARLES R. KIEFNER
/s/ John P. Anderson
------------------------------------
JOHN P. ANDERSON
STATE OF Calif. )
)ss
County of Riverside)
One this day of December 14th, 1999, before me the undersigned, a Notary Public
in the State of California, duly commissioned and sworn, personally appeared
Donna Anderson and ------, to me known to be the President and Secretary,
respectively, of DEFINITION, LTD., the corporation that executed the foregoing
instrument, and acknowledged the said instrument to be the free and voluntary
act and deed of said corporation, for the uses and purposes therein mentioned,
and on oath stated that they were authorized to execute the said instrument and
that the seal affixed is the corporate seal of said corporation.
WITNESS my hand and official seal hereto affixed the day and year first above
written.
/s/ Myrl Whitesell
------------------------------------
NOTARY PUBLIC in and for the State of
California, residing in Palm Springs
My Commission expires: 1/9/03.
MYRL WHITESELL [seal]
COMM. 1204676
Notary Public-California
Riverside County
My Commission Expires
January 9, 2003
-21-
EXHIBIT "A"
----------
DEFINITION TECHNOLOGIES Employees:
None
BORCO Employees
JOHN E. BORTELI
ANNA M. BORTOLI
RICHARD L. SCHELLHAMMER
THOMAS SCHELLHAMMER
RAYMOND J. ESCH
TAMMY G. BERKHAMER
DANIEL BARKLEY
BARRY RAGER
ROBERT W. MOORE
-22-
EXHIBIT "B"
-----------
DEFINITION TECHNOLOGIES:
(1) Material Charges
NONE
(2) Contingent Liabilities
NONE
(3) Disposed or encumbered property or assets
NONE
BORCO:
(1) Material Changes
NONE
(2) Contingent Liabilities
NONE
(3) Disposed or encumbered property or assets
NONE
-23-
EXHIBIT "C"
-----------
(1) Options to Purchase shares of BORCO stock: NONE
(2) Options to Purchase shares of DEFINITION TECHNOLOGIES stock: NONE
-24-
EXHIBIT "D"
Contracts not cancelable within sixty days: NONE
-25-
EXHIBIT "E"
-----------
(1) BORCO Employees as of 9130199:
JOHN E. BORTELI
ANNA M. BORTOLI
RICHARD L. SCHELLHAMMER
THOMAS SCHELLHAMMER
RAYMOND J. ESCH
TAMMY 0. BERKHAMER
DANIEL BARKLEY
BARRY RAGER
ROBERT W. MOORE
Accrued Compensation - BORCO
NONE
(2) DEFINITION TECHNOLOGIES Employees as of 9/30/99 & Accrued Compensation
NONE
-26-
EXHIBIT F
---------
Fees or Commissions with respect to merger:
NONE
-27-
EXHIBIT G
---------
Shareholders of BORCO:
Name/Address Total Shares
------------ ------------
JOHN E. BORTOLI 5000 shares
1130 CONFER AVENUE
JOHNSTOWN, FA 15905
ANNA M. BORTOLI 5,000 shares
1130 CONFER AVENUE
JOHNSTOWN, PA 15905
Total Shares Outstanding 10,000
Shareholders of Definition Technologies:
Name/ Address Total Shares
------------ ------------
DEFINITION, LTD 1,000
4625 WEST NEVSO DRIVE
SUITE 2
LAS VEGAS, NEVADA 89103
Total Shares Outstanding: 1,000
Shareholders of Definition, Ltd.
Total Shares Outstanding: Approximately 12,400,000
-28-
FIRST AMENDMENT TO AGREEMENT
THIS FIRST AMENDMENT to that certain Agreement, dated December 1, 1999, is made
this ____ day of May, 2000, between and among DEFINITION TECHNOLOGIES, INC., a
Texas corporation ("DEFINITION TECHNOLOGIES"), BORCO EQUIPMENT COMPANY, INC., a
Nevada Corporation ("BORCO"), and DEFINITION, LTD., a Nevada Corporation
("Definition").
WHEREAS, DEFINITION TECHNOLOGIES, INC., a Texas corporation, BORCO
EQUIPMENT COMPANY, INC., a Nevada Corporation, and DEFINITION, LTD., a Nevada
Corporation entered into an Agreement dated December 1, 1999;
WHEREAS, DEFINITION TECHNOLOGIES, BORCO, and DEFINITION desire to
amend certain portions of the Agreement dated December 1, 1999;
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, the parties hereto amend the Agreement dated December 1, 1999 only as to
the following Article VIII:
ARTICLE VIII
CLOSING DATE
------------
The closing for the consummation of the merger contemplated by this
Agreement shall unless another date or place is agreed to in writing
by the parties hereto, take place at the offices of Definition, Ltd.
on the date which is no later than the fifth business day after the
last to occur of the following dates:
(a) Five (5) days after the date the stockholders of
DEFINITION TECHNOLOGIES and BORCO with respect to which such merger is
proposed shall have given the approval referred to in Article IV,
Section 1, hereof; or
(b) The date on which all the conditions set forth
in Article V hereof shall have been satisfied, except to the extent
any such conditions shall have been waived by DEFINITION TECHNOLOGIES
or by the respective Companies; or
(c) August 1, 2000.
IN ALL OTHER RESPECTS, the Agreement dated December 1, 2000, is confirmed,
ratified and approved.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
the day of May, 2000.
DEFINITION TECHNOLOGIES, INC.
By:________________________________
Title: President
AMENDMENT TO AGREEMENT - Page 1
DIRECTORS OF DEFINITION TECHNOLOGIES:
____________________________________
CHARLES R. KIEFNER
STATE OF ___________)
)ss
COUNTY OF___________)
On this day of _______________________, 2000, before me, the undersigned, a
Notary Public in and for the State of_________________ , duly commissioned and
sworn, personally appeared CHARLES R. KIEFNER, to me known to be the President
and Secretary, respectively, of DEFINITION TECHNOLOGIES, INC., the corporation
that executed the foregoing instrument, and acknowledged the said instrument to
be the free and voluntary act and deed of said corporation, for the uses and
purposes therein mentioned, and on oath stated that he was authorized to execute
the said instrument and that the seal affixed is the corporate seal of said
corporation.
WITNESS my hand and official seal hereto affixed the day and year first above
written.
BRETT M. BORTOLI
____________________________________
NOTARY PUBLIC in and for the State of
Pennsylvania residing in Johnstown My
Commission expires 10-27-01
Notarial Seal
Brett M. Bortoli, Notary Public BORCO EQUIPMENT COMPANY, INC.
Johnstown, Cambria County, PA
My Commission Expires Oct. 27, 2001 By:/s/ John E. Bortoli, President
__________________________________
Title:
ATTEST:
/s/ Brett M. Bortoli
____________________________________
DIRECTORS OF BORCO:
/s/ John E. Bortoli
____________________________________
JOHN E. BORTOLI
STATE OF ___________)
)ss
COUNTY OF___________)
On this day of _______________________, 2000, before me, the undersigned, a
Notary Public in and for the State of_________________ , duly commissioned and
sworn, personally appeared JOHN E. BORTOLI, to me known to be the President and
Secretary, respectively, of BORCO EQUIPMENT COMPANY, INC., the corporation that
executed the foregoing instrument, and acknowledged the said instrument to be
the free and voluntary act and deed of said corporation, for the uses and
purposes therein mentioned, and on oath stated that he was authorized to execute
the said instrument and that the seal affixed is the corporate seal of said
corporation.
AMENDMENT TO AGREEMENT - Page 2
WITNESS my hand and official seal hereto affixed the day and year first above
written.
____________________________________
NOTARY PUBLIC in and for the State of ________
residing in ________________ My Commission
expires _______________
DEFINITION, LTD.
By: ________________________________
Title:
ATTEST:
____________________________________
DIRECTORS OF DEFINITION, LTD.:
____________________________________
DONNA ANDERSON
____________________________________
CHARLES R. KIEFNER
____________________________________
CHARLES COHEN
STATE OF ___________)
)ss
COUNTY OF___________)
On this day of _______________________, 2000, before me, the undersigned, a
Notary Public in and for the State of_________________ , duly commissioned and
sworn, personally appeared ______________ and_________________, to me known to
be the President and Secretary, respectively, of DEFINITION, LTD., the
corporation that executed the foregoing instrument, and acknowledged the said
instrument to be the free and voluntary act and deed of said corporation, for
the uses and purposes therein mentioned, and on oath stated that he was
authorized to execute the said instrument and that the seal affixed is the
corporate seal of said corporation.
WITNESS my hand and official seal hereto affixed the day and year first above
written.
____________________________________
NOTARY PUBLIC in and for the State of _______
residing in ________________ My Commission
expires _______________
AMENDMENT TO AGREEMENT - Page 3
SECOND AMENDMENT TO AGREEMENT
THIS SECOND AMENDMENT to the certain Agreement dated December 1, 1999, is made
this_____ day June, 2000, between and among DEFINITION TECHNOLOGIES, INC., a
Texas corporation ("DEFINITION TECHNOLOGIES"), BORCO EQUIPMENT COMPANY, INC., a
Nevada Corporation ("BORCO"), and DEFINITION, LTD., a Nevada Corporation
("Definition").
WHEREAS, DEFINITION TECHNOLOGIES, INC., a Texas corporation, BORCO EQUIPMENT
COMPANY, INC., a Nevada Corporation, and DEFINITION, LTD., a Nevada Corporation
entered into an Agreement dated December 1, 1999;
WHEREAS, DEFINITION TECHNOLOGIES, BORCO, and DEFINITION desire to amend certain
portions of the Agreement doled December 1, 1999;
WHEREAS, DEFINITION TECHNOLOGIES, BORCO, and DEFINITION first amended certain
portions of the Agreement in June, 2000;
NOW, THEREFORE, in consideration of the mutual agreements contained herein the
parties hereto amend the Agreement dated December 1, 1999 only as to the
following Article VIII:
ARTICLE VIII
CLOSING DATE
------------
The closing for the consummation of the merger contemplated by this
Agreement shall unless another date or place is agreed to in writing
by the parties hereto, take place at the offices of Definition, Ltd.
on the date which is no later than the fifth business day after the
last to occur of the following dates:
(a) Five (5) days after the date the stockholders of
DEFINITION TECHNOLOGIES and BORCO with respect to which such merger
is proposed shall have given the approval referred to in Article
IV, Section 1, hereof; or
(b) The date on which all the conditions set forth in
Article V hereof shall have been satisfied, except to the extent any
such conditions shall have been waived by DEFINITION TECHNOLOGIES
or by the respective Companies; or
(c) November 1, 2000.
IN ALL OTHER RESPECTS, the Agreement dated December 1, 2000, is confirmed,
ratified and approved.
IN WITNESS WHEREOF the parties hereto have executed this Amendment the
______ day of August, 2000.
DEFINITION TECHNOLOGIES, INC.
By:/s/ Charles R. Kiefner
_________________________________
Title: President
SECOND AMENDMENT TO AGREEMENT - Page 1
DIRECTORS OF DEFINITION TECHNOLOGIES:
____________________________________
CHARLES R. KIEFNER
BORCO EQUIPMENT COMPANY, INC.
By: ________________________________
Title:
ATTEST:
____________________________________
DIRECTORS OF BORCO:
____________________________________
JOHN E. BORTOLLI
DEFINITION, LTD.
By: ________________________________
Title:
ATTEST:
____________________________________
DIRECTORS OF DEFINITION, LTD.:
____________________________________
DONNA ANDERSON
____________________________________
CHARLES R. KIEFNER
____________________________________
CHARLES COHEN
SECOND AMENDMENT TO AGREEMENT - Page 2
SECOND AMENDMENT TO AGREEMENT
THIS SECOND AMENDMENT to the certain Agreement dated December 1, 1999, is made
this_____ day June, 2000, between and among DEFINITION TECHNOLOGIES, INC., a
Texas corporation ("DEFINITION TECHNOLOGIES"), BORCO EQUIPMENT COMPANY, INC., a
Nevada Corporation ("BORCO"), and DEFINITION, LTD., a Nevada Corporation
("Definition").
WHEREAS, DEFINITION TECHNOLOGIES, INC., a Texas corporation, BORCO EQUIPMENT
COMPANY, INC., a Nevada Corporation, and DEFINITION, LTD., a Nevada Corporation
entered into an Agreement dated December 1, 1999;
WHEREAS, DEFINITION TECHNOLOGIES, BORCO, and DEFINITION desire to amend certain
portions of the Agreement doled December 1, 1999;
WHEREAS, DEFINITION TECHNOLOGIES, BORCO, and DEFINITION first amended certain
portions of the Agreement in June, 2000;
NOW, THEREFORE, in consideration of the mutual agreements contained herein the
parties hereto amend the Agreement dated December 1, 1999 only as to the
following Article VIII:
ARTICLE VIII
CLOSING DATE
------------
The closing for the consummation of the merger contemplated by this
Agreement shall unless another date or place is agreed to in writing
by the parties hereto, take place at the offices of Definition, Ltd.
on the date which is no later than the fifth business day after the
last to occur of the following dates:
(a) Five (5) days after the date the stockholders of
DEFINITION TECHNOLOGIES and BORCO with respect to which such merger
is proposed shall have given the approval referred to in Article
IV, Section 1, hereof; or
(b) The date on which all the conditions set forth in
Article V hereof shall have been satisfied, except to the extent any
such conditions shall have been waived by DEFINITION TECHNOLOGIES
or by the respective Companies; or
(c) November 1, 2000.
IN ALL OTHER RESPECTS, the Agreement dated December 1, 2000, is confirmed,
ratified and approved.
IN WITNESS WHEREOF the parties hereto have executed this Amendment the
______ day of August, 2000.
DEFINITION TECHNOLOGIES, INC.
By:
_________________________________
Title: President
SECOND AMENDMENT TO AGREEMENT - Page 1
DIRECTORS OF DEFINITION TECHNOLOGIES:
____________________________________
CHARLES R. KIEFNER
BORCO EQUIPMENT COMPANY, INC.
By: /s/ John E. Bortoli
________________________________
Title: President
ATTEST:
____________________________________
DIRECTORS OF BORCO:
/s/ John E. Bortoli
____________________________________
JOHN E. BORTOLLI
DEFINITION, LTD.
By: ________________________________
Title:
ATTEST:
____________________________________
DIRECTORS OF DEFINITION, LTD.:
____________________________________
DONNA ANDERSON
____________________________________
CHARLES R. KIEFNER
____________________________________
CHARLES COHEN
SECOND AMENDMENT TO AGREEMENT - Page 2
THIRD AMENDMENT TO AGREEMENT
THIS THIRD AMENDMENT to that certain Agreement, dated December 1, 1999, is made
this ___ day of _________, 2000, between and among TELEMARK WORLD WIDE, a Nevada
Corporation, f/k/a/ DEFINITION TECHNOLOGIES, INC., a Texas corporation
("DEFINITION TECHNOLOGIES"), BORCO EQUIPMENT COMPANY, INC., a Nevada,
Corporation ("BORCO") a/k/a TELEMARK WORLDWIDE, INC., a Nevada Corporation, and
DEFINITION, LTD., a Nevada Corporation, a/k/a MONOGRAM PICTURES, INC., a Nevada
Corporation ("Definition").
WHEREAS, DEFINITION TECHNOLOGIES, INC., a Texas corporation, BORCO
EQUIPMENT COMPANY, INC., a Nevada Corporation, and DEFINITION, LTD., a Nevada
Corporation entered into an Agreement dated December 1, 1999;
WHEREAS, DEFINITION TECHNOLOGIES, BORCO, and DEFINITION desire to amend
certain portions of the Agreement dated December 1, 1999;
WHEREAS, DEFINITION TECHNOLOGIES, BORCO, and DEFINITION first amended
portions of the Agreement in June, 2000, and second amended in August, 2000;
NOW, THEREFORE, in consideration of the mutual its contained herein the
parties hereto amend the Agreement dated December 1, 1999 only as to the
Following Article I.
ARTICLE I
THE REORGANIZATION
1. Execution of Certificate of Merger and Articles of Merger. Subject to
the provisions of this Agreement, the Articles of Merger with respect to the
merger shall be executed and acknowledged by Borco and Definition Technologies
that is a party to such merger (the "Merger Company") and thereafter delivered
to the Secretary of State of the State of Nevada for filing, as provided by the
Nevada Business Corporation Acts as soon as practicable out or after the closing
date (as hereinafter defined) of such merger. The merger shall become effective
upon the filing of the Articles of Merger with the Secretary of State of the
State of Nevada. The date and time when a merger becomes effective shall be
called the "effective time" of such merger. At the effective time of a merger,
the separate existence of the merged company (BORCO) shall cease and such
company shall be merged with and into Definition Technologies. Definition
Technologies shall be the surviving corporation upon the consummation of the
merger.
2. Consummation of the Merger. As soon as practicable after the approval of
the merger by the stockholders, Borco and Definition Technologies will cause
such merger to be consummated in accordance with applicable law, subject to the
conditions hereinafter set forth.
3. Conversion of BORCO/DEFINITION TECHNOLOGIES. At the effective time of
the merger of Borco wits and into Definition Technologies, each outstanding
share of Borco common stock (currently 10,000) shall be canceled and shall be
converted into Definition Technologies shares (at the ratio of 540 shares of
Definition Technologies for each share of Borco shares) by virtue of such merger
and without any action on the part of the holder thereof, such that prior
Shareholders of Borco Common Stock will hold Units of Definition Technologies.
Definition Limited will hold Units of Definition Technologies, and current
shareholders of Definition will hold Units of Definition Technologies. Each Unit
Consisting of One Share of Common Stock, $0.001 par value one Class A Common
Stock Purchase
SECOND AMENDMENT T0 AGREEMENT - Page 1
Warrant, and one Class B Common Stock Purchase Warrant. The Common Stock, Class
A and Class B Common Stock purchase Warrants are to be distributed as a Unit and
subject to registration with, the Securities and Exchange Commission and
Blue-Sky laws, detachable and separately traceable. Each Class A Warrant
entitles tile holder to purchase one share of common stock at a price of $5.00,
for a one hundred and eighty day period ninety days until one hundred eighty
days from the effective date of the Merger, Each Class B Warrant will entice the
holder to purchase one share of Common Stock at a price of $5.00 at any time
from three hundred sixty-five days to seven hundred and thirty days from the
effective date of the Merger. At the effective time of the merger of Borco with
and into Definition Technologies, by virtue of such merger and without any
action on the part of the holder thereof such that prior Shareholders of Borco
Common Stock will hold 5,400,000 Units for Common Stock of Definition
Technologies, and current shareholders of Definition will hold 150,000 Units of
Common Stock of Definition Technologies. Borco agrees to file with the
Securities and Exchange Commission a Registration Statement under the Securities
Act of 1933, as amended (the "Act") on Form S-1 with respect to the securities
offered hereby.
4. Exchange of Certificates. After the effective time of the merger, each holder
of a certificate theretofore evidencing outstanding shares draw of common stock
of merged company (other than shares held by dissenting stockholders and shares
that are automatically canceled as hereinabove provided), upon surrender of the
same to Continental Stock Transfer & Trust Company (the "Transfer Agent") or
such other agent or agents as shall be appointed by Definition Technologies,
shall be entitled to receive in exchange therefor a certificate or certificates
evidencing the number of full Definition Technologies shares for which the
shares of common stock of the merged company theretofore represented by the
certificate or certificates so surrendered shall have been exchanged as provided
in this paragraph 4, together with such warrants as comprise Units. As soon as
practicable at the effective time of the merger, the Transfer Agent will send a
notice and transmittal form to each holder of as outstanding certificate which
immediately prior to the effective time of such merger evidenced shares of
common stock of the merged company and which is to be exchanged for Definition
Technologies as provided is paragraph 3 hereof, advising such stockholder of the
terms of the exchange affected by such merger and the procedure for surrendering
to the Transfer Agent (which may appoint forwarding agents) such certificate for
exchange into one or more certificates evidencing Definition Techno1ogies
shares. Until so surrendered, each outstanding certificate which, prior to the
Effective time of such merger, represented common stock of the merged company
(other than shares previously held by dissenting stockholders) will be deemed
for all corporate purposes of Definition Technologies to evidence ownership of
the number of full Definition Technologies shares for which the shares of common
stock of the merged company represented thereby were exchanged; provided,
however, that until such outstanding certificates formerly evidencing common
stock of the merged company are so surrendered, no dividend payable to holders
of record of Definition Technologies shares as of any date subsequent to the
effective time of such merger or any cash in lieu of any fraction of a
Definition Technologies share payable pursuant to Section 5 hereof shall be paid
to the holder of such outstanding certificates in respect thereof. As soon as
practicable after the effective date of each merger, the Transfer Agent will
send a notice and transmittal form to each holder of an outstanding certificate
of Definition which immediately prior to the effective time of such merger
evidenced shares of common stock of Definition, Ltd., as provided in paragraph 3
hereof, advising such stockholder of the terms of the distribution effected by
such merger sad the procedure for receiving from the Transfer Agent (which may
appoint forwarding agent) such certificate for one or more certificates
evidencing Definition Technologies shares. After the effective time of such
merger there shall be no further registry of transfers on the records of the
merged company of shares of common stock of the merged company and, if a
certificate evidencing such shares is presented to Definition Technologies, it
shall be canceled and exchanged for a certificate evidencing shares of
Definition Technologies common stock as herein provided.
SECOND AMENDMENT T0 AGREEMENT - PAGE 2
5. No Fractional Shares. Neither certificates nor scrip for fractional
Definition Technologies shares will be issued, but in lieu thereof each holder
of shares of any Company who would otherwise have been entitled to a faction of
a Definition Technologies share, upon surrender of all the certificates
evidencing shares of common stock of such company registered in the name of such
holder, will be paid the cash value of such fraction, which shall be equal to
such faction multiplied by the market value of a full Definition Technologies
share at the close of trading of the Definition Technologies shares at the
effective time of such merger, as determined by Definition Technologies in any
reasonable manner.
6. Certificate of Incorporation; By-laws; Directors. The Certificate of
Incorporation and By-laws of Telemark Worldwide Inc. as in effect immediately
prior to the effective time of the merger, shall continue to be the Certificate
of Incorporation and By-laws of Definition Technologies, until they shall
thereafter be duly altered, amended or repealed. The directors of Definition
Technologies shall continue as the directors of Definition Technologies until
their successors shall be duly elected and qualified.
IN ALL OTHER RESPECTS, the Agreement dated December 1, 1999, is confirmed,
ratified and approved.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment the ______ ,
day of_______________, 2000.
DEFINITION TECHNOLOGIES, INC.
By:/s/ Charles R. Kiefner
_________________________________
Title: President
DIRECTORS OF DEFINITION TECHNOLOGIES:
/s/ Charles R. Kiefner
____________________________________
CHARLES R. KIEFNER
BORCO EQUIPMENT COMPANY, INC.
By: ________________________________
Title:
ATTEST:
____________________________________
DIRECTORS OF BORCO:
____________________________________
JOHN E. BORTOLLI
DEFINITION, LTD.
By: ________________________________
Title:
SECOND AMENDMENT TO AGREEMENT - Page 3
5. No Fractional Shares. Neither certificates nor scrip for fractional
Definition Technologies shares will be issued, but in lieu thereof each holder
of shares of any Company who would otherwise have been entitled to a faction of
a Definition Technologies share, upon surrender of all the certificates
evidencing shares of common stock of such company registered in the name of such
holder, will be paid the cash value of such fraction, which shall be equal to
such faction multiplied by the market value of a full Definition Technologies
share at the close of trading of the Definition Technologies shares at the
effective time of such merger, as determined by Definition Technologies in any
reasonable manner.
6. Certificate of Incorporation; By-laws; Directors. The Certificate of
Incorporation and By-laws of Telemark Worldwide Inc. as in effect immediately
prior to the effective time of the merger, shall continue to be the Certificate
of Incorporation and By-laws of Definition Technologies, until they shall
thereafter be duly altered, amended or repealed. The directors of Definition
Technologies shall continue as the directors of Definition Technologies until
their successors shall be duly elected and qualified.
IN ALL OTHER RESPECTS, the Agreement dated December 1, 1999, is confirmed,
ratified and approved.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment the ______ ,
day of_______________, 2000.
DEFINITION TECHNOLOGIES, INC.
By:/s/ Charles R. Kiefner
_________________________________
Title: President
DIRECTORS OF DEFINITION TECHNOLOGIES:
/s/ Charles R. Kiefner
____________________________________
CHARLES R. KIEFNER
BORCO EQUIPMENT COMPANY, INC.
By: ________________________________
Title:
ATTEST:
____________________________________
DIRECTORS OF BORCO:
____________________________________
JOHN E. BORTOLLI
DEFINITION, LTD.
By: /s/ Donna Anderson
________________________________
Title: Pres/CEO
SECOND AMENDMENT TO AGREEMENT - Page 3
ATTEST:
____________________________________
DIRECTORS OF DEFINITION, LTD.:
____________________________________
DONNA ANDERSON
/s/ Charles R. Kiefner
____________________________________
CHARLES R. KIEFNER
____________________________________
JOHN P. ANDERSON
SECOND AMENDMENT TO AGREEMENT - Page 4
ATTEST:
____________________________________
DIRECTORS OF DEFINITION, LTD.:
/s/ Donna Anderson
____________________________________
DONNA ANDERSON
/s/ Charles R. Kiefner
____________________________________
CHARLES R. KIEFNER
/s/ John P. Anderson
____________________________________
JOHN P. ANDERSON
SECOND AMENDMENT TO AGREEMENT - Page 4
5. No Fractional Shares. Neither certificates nor scrip for fractional
Definition Technologies shares will be issued, but in lieu thereof each holder
of shares of any Company who would otherwise have been entitled to a faction of
a Definition Technologies share, upon surrender of all the certificates
evidencing shares of common stock of such company registered in the name of such
holder, will be paid the cash value of such fraction, which shall be equal to
such faction multiplied by the market value of a full Definition Technologies
share at the close of trading of the Definition Technologies shares at the
effective time of such merger, as determined by Definition Technologies in any
reasonable manner.
6. Certificate of Incorporation; By-laws; Directors. The Certificate of
Incorporation and By-laws of Telemark Worldwide Inc. as in effect immediately
prior to the effective time of the merger, shall continue to be the Certificate
of Incorporation and By-laws of Definition Technologies, until they shall
thereafter be duly altered, amended or repealed. The directors of Definition
Technologies shall continue as the directors of Definition Technologies until
their successors shall be duly elected and qualified.
IN ALL OTHER RESPECTS, the Agreement dated December 1, 1999, is confirmed,
ratified and approved.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment the ______ ,
day of_______________, 2000.
DEFINITION TECHNOLOGIES, INC.
By:
_________________________________
Title: President
DIRECTORS OF DEFINITION TECHNOLOGIES:
____________________________________
CHARLES R. KIEFNER
BORCO EQUIPMENT COMPANY, INC.
By: /s/ John E. Bortoli, President
________________________________
Title:
ATTEST:
____________________________________
DIRECTORS OF BORCO:
/s/ John E. Bortoli, President
____________________________________
JOHN E. BORTOLLI
DEFINITION, LTD.
By: /s/ Donna Anderson
________________________________
Title: Pres/CEO
SECOND AMENDMENT TO AGREEMENT - Page 3