Document:

f1012g0110ex4iii_miktam.htm

    Exhibit
4.3

     

    
                                                                   

       

        
        

        
          

        

        
          

        

      

       

      PROMISSORY
NOTE

       

      FOR VALUE
RECEIVED, Mitkam Technologies, Inc., the borrower, promises to pay to the order
of
Eugene
Cheng, the note
holder, the principal amount of Fifty Thousand Dollars ($50,000.00),
together with simple interest on the unpaid principal balance from the date of
this note until the date this note is paid in full, at the annual rate of Eight
(8%). Payments shall be made at the address or the account designated by the
note holder.

       

      The tern of this note shall be Six (6)
Months from the date of receiving the total loan amount. Principal and interest shall be paid in
full by
August
19, 2009. However, the tern could be
renewable with the consent of both
parties. If the note is
renewed for additional terms, the interest payment shall be paid at each
maturity date of said term.Each payment on this note
shall be applied first to

       

      accrued
but unpaid interest and the remainder shall be applied to unpaid
principal.

       

      This note
may be prepaid by the borrower in whole or in part at any time without
penalty. This note is not assumable without the written consent of the
note holder, which consent shall not be unreasonably withheld. This note is
nontransferable by the note holder.

       

      If any
payment due under this note is not received by the note holder within 30 days of
its due date, the
entire amount of unpaid principal and accrued but unpaid interest of the loan
shall, at the option of
the note holder, become immediately due and payable with written notice
by the note holder to the borrower. In the event of a default, the borrower
shall be responsible for the costs of collection, including, in the event of a
lawsuit to collect on this note, the note holder's reasonable attorney fees as
determined by a court hearing the lawsuit.

       

      Date:
February 19, 2009

       

      BORROWER:

       

      MITKAM
TECHNOLOGIES, INC. 

      2362-B
Qume Drive

      San Jose,
CA 95131

       

       

      /s/
Thomas
Chao                              

      Thomas
Chao, President

       

       

       

       

       

        
          

        

      

      
        www.miktamusa.corn 
Tel:
408-392-0668 FAX: 408-392-0662f1012g0110ex10i_miktam.htm

Exhibit 10.1

     

     

    AGREEMENT
OF ACQUISITION BETWEEN

    MIKTAM
TECHNOLOGIES AMERICAS INC. AND

     

    MIKTAM
TECHNOLOGIES, INC.

     

     

     

    
      
         

      

      
         

        
          

        

      

       

    

     

    AGREEMENT

     

    This
Agreement, dated as of November2006, is by and among MIKTAM TECHNOLOGIES AMERICAS
INC., A Nevada Corporation ("MTAI"), and MIKTAM

    TECHNOLOGIES.
INC..                                                                                                                 

    A
California Corporation ("MTI").

     

    Whereas,
the Boards of Directors of MTAI and MTI each have, in light of and subject to
the terms and conditions set forth herein, (i) determined that the Acquisition
(as defined below) is fair to their respective stockholders and in the best
interests of such stockholders and (ii) approved the Acquisition in accordance
with this Agreement;

     

    Whereas,
this Agreement constitutes the entire, final and complete agreement between MTAI
and MTI and supersedes and replaces all prior or existing written and oral
agreements between MTAI and MTI with respect to the subject matter
hereof;

     

    Whereas,
MTAI and MTI desire to make certain representations, warranties, covenants and
agreements in connection with the Acquisition and also to prescribe various
conditions to the Acquisition;

     

    Now,
therefore, in consideration of the premises and the representations, warranties,
covenants and agreements herein contained, and intending to be legally bound
hereby, MTAI and MTI hereby agree as follows:

     

    The Acquisition.

     

    Effective
upon the execution of this Agreement and upon the terms and subject to the
conditions of this Agreement MTAI shall acquire all the outstanding shares of
MTI and MTI shall continue its existence as a wholly owned subsidiary of
MTAI.

     

    Board of Directors and
Officers.

     

    Board of Directors and Officers of
MTAI. At, or prior to the signing of this Agreement, MTI and MTAI agree
to take such action as is necessary (i) to cause the number of directors
comprising the full Board of Directors of MTAI to be two (2) persons and (ii) to
cause Mr. Thomas
Chao and Mr.
Swe-Den Tsai. (the "MTI Designees") to be elected as directors of MTAI.
If either of the MTI Designees, respectively, shall decline or be unable to
serve as a director prior to the Effective Date of this agreement, MTI shall
nominate another person to serve in such person's stead, upon approval of the
remaining party. From and after the Effective Date, and until successors are
duly elected or appointed and qualified in accordance with applicable law, Mr. Thomas Chao shall
be President and CEO, Mr. Swe-Den Tsai
shall be COO.

     

    
      	 Miktam Technologies Americas
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    Conversion of
Shares.

     

    (a) At
the Effective Date, each share of common stock, par value
$   M°    per
share, of MTI (individually a "MTI Share" and collectively, the "MTI Shares")
issued and outstanding immediately prior to the Effective Date shall, by virtue
of the Acquisition, and without any action on the part of MTI, MTAI or the
holder thereof, be canceled and converted into the right to receive, upon the
surrender of the certificate formerly representing such share, S,3qo,ooo shares of MTAI's
Common Stock, $0.0001 par value per share.

     

    All MTAI
Shares, issued upon the surrender for exchange of MTI Shares in accordance with
the terms hereof, shall be deemed to have been issued in full satisfaction of
all rights pertaining to such MTI Shares. There shall be no further registration
of transfers on the stock transfer books of either of the companies (MTI or
MTAI), of the MTI Shares or MTAI Shares, which were outstanding immediately
prior to the date of this Agreement.

     

    Taking of Necessary Action:
Further Action.

     

    If, at
any time after the Agreement Date, MTI or MTAI reasonably determine that any
deeds, assignments, or instruments or confirmations of transfer are necessary or
desirable to carry out the purposes of this Agreement and to vest MTAI with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of MTI, the officers and directors of MTAI and MTI are fully
authorized in the name of their respective corporations or otherwise to take,
and will take, all such lawful and necessary or desirable action.

     

    Representations and
Warranties of MTAI

     

    MTAI
hereby represents and warrants to MTI as follows:

     

    Organization and
Qualification.

     

    (a) MTAI
is duly organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation or organization and has all requisite power
and authority to own, lease and operate its properties and to carry on its
businesses as now being conducted, except where the failure to be so organized,
existing and in good standing or to have such power and authority would not have
a Material Adverse Effect (as defined below) on MTAI. When used in connection
with MTAI, the term "Material Adverse Effect" means any change or effect (i)
that is or is reasonably likely to be materially adverse to the business,
results of operations, condition (financial or otherwise) or prospects of MTAI,
other than any change or effect arising out of general economic conditions
unrelated to any business in which MTAI is engaged, or (ii) that may impair the
ability of MTAI to perform its obligations hereunder or to consummate the
transactions contemplated hereby.

     

    (b) MTAI
has heretofore delivered to MTI accurate and complete copies of the Articles of
Incorporation and Bylaws (or similar governing documents), as currently in
effect, of MTAI (a copy of which are attached).

    

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    Capitalization of
MTAI.

     

    The
authorized capital stock of MTAI consists of: (i) 500 million shares that
may

    be
issued. As of the date of this Agreement MTAI Shares were issued
and outstanding. As of the date of this Agreement there are no outstanding
obligations of MTAI to repurchase, redeem or otherwise acquire any MTAI or
stockholder agreements, voting trusts or other agreements or understandings to
which MTAI is a party or by which it is bound relating to the voting or
registration of any shares of capital stock of MTAI. For purposes of this
Agreement, "Lien" means, with respect to any asset (including, without
limitation, any security) any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind in respect of such asset.

     

    Authority Relative to this
Agreement.

     

    MTAI has
all necessary corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement, and the consummation of the transactions
contemplated hereby, have been duly and validly authorized by the Board of
Directors of MTAI (the "MTAI Board") and no other corporate proceedings on the
part of MTAI are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by MTAI and constitutes a valid, legal, and binding
agreement of MTAI, enforceable against MTAI in accordance with its
terms.

     

    No Default.

     

    MTAI is
not in breach, default, or violation (and no event has occurred which with
notice or the lapse of time or both would constitute a breach, default, or
violation) of any term, condition or provision of (i) its Certificate of
Incorporation or Bylaws (or similar governing documents), (ii) any note, bond,
mortgage, indenture, lease, license, contract, agreement, or other instrument or
obligation to which MTAI is now a party or by which any of its respective
properties or assets may be bound or (iii) any order, writ, injunction, decree,
law, statute, rule, or regulation applicable to MTAI or any of its respective
properties or assets, except in the case of (ii) or (iii) for violations,
breaches, or defaults that would not have a Material Adverse Effect on MTAI.
Each note, bond, mortgage, indenture, lease, license, contract, agreement, or
other instrument or obligation to which MTAI is now a party or by which its
respective properties or assets may be bound that is material to MTAI and that
has not expired, is in full force and effect and is not subject to any material
default thereunder of which MTAI is aware by any party obligated to MTAI
hereunder.

     

    No Undisclosed Liabilities:
Absence of Changes

     

    MTAI does
not have any liabilities or obligations of any nature, whether or not accrued,
contingent, or otherwise, that would be required by generally accepted
accounting principles to be reflected on a balance sheet of MTAI (including the
notes thereto) or which would have a Material Adverse Effect on MTAI. MTAI has
not incurred any liabilities of any nature, whether or not accrued, contingent
or otherwise, which could reasonably be expected to have, and there have been no
events, changes or effects with respect to MTAI having or which reasonably could
be expected to have, a Material Adverse Effect on MTAI.

     

    
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    Litigation.

     

    There is
no suit, claim, action, proceeding, or investigation pending, or, to the
knowledge of MTAI, threatened against MTAI or any of its subsidiaries or any of
their respective properties or assets before any Governmental Entity which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect on MTAI or could reasonably be expected to prevent or
delay the consummation of the transactions contemplated by this Agreement. MTAI
is not subject to any outstanding order, writ, injunction, or decree which,
insofar as can be reasonably foreseen in the future, could reasonably be
expected to have a Material Adverse Effect on MTAI or could reasonably be
expected to prevent or delay the consummation of the transactions contemplated
hereby.

     

    Compliance with Applicable
Law.

     

    MTAI
holds all permits, licenses, variances, exemptions, orders, and approvals of all
Governmental Entities necessary for the lawful conduct of their respective
businesses (the "MTAI Permits"), except for failures to hold such permits,
licenses, variances, exemptions, orders, and approvals which would not have a
Material Adverse Effect on MTAI.

     

    Employee Benefit Plans:
Labor Matters.

     

    There are
no employees, employee benefit plans or other issues related to employees or
Labor matters with MTAI.

     

    Environmental Laws and
Regulations.

     

    MTAI is
in material compliance with all applicable federal, state, local, and foreign
laws and regulations relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata) (collectively, "Environmental Laws"),
except for non-compliance that would not have a Material Adverse Effect on MTAI,
which compliance includes, but is not limited to, the possession by MTAI of all
material permits and other governmental authorizations required under applicable
Environmental Laws, and
compliance with the terms and conditions thereof; (ii) MTAI has not received
written notice of, or, to the knowledge of MTAI, is the subject of, any action,
cause of action, claim, investigation, demand, or notice by any person or entity
alleging liability under or non-compliance with any Environmental Law (an
"Environmental Claim") that could reasonably be expected to have a Material
Adverse Effect on MTAI; and (iii) to the knowledge of MTAI, there are no
circumstances that are reasonably likely to prevent or interfere with such
material compliance in the future.

     

    (b) There
are no Environmental Claims which could reasonably be expected to have a
Material Adverse Effect on MTAI that are pending or, to the knowledge of MTAI,
threatened against MTAI or, to the knowledge of MTAI, against any person or
entity whose liability for any Environmental Claim MTAI has or may have retained
or assumed either contractually or by operation of law.

     

    
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    Tax Matters.

     

    (a) MTAI has
filed or has had filed on its behalf, in a timely manner (within any applicable
extension periods) with the appropriate Governmental Entity all income and other
material Tax Returns (as defined herein) with respect to Taxes (as defined
herein) of MTAI and all Tax Returns were in all material respects true,
complete, and correct; (ii) all material Taxes with respect to MTAI have been
paid in full or have been provided for, in accordance with GAAP, on MTAI's most
recent balance sheet, (iii) there are no outstanding agreements or waivers
extending the statutory period of limitations applicable to any federal, state,
province, local, or foreign income or other material Tax Returns required to be
filed by or with respect to MTAI; (iv) to the knowledge of MTAI none of the Tax
Returns of, or with respect to, MTAI is currently being audited or examined by
any Governmental Entity; and (v) no deficiency for any income or other material
Taxes has been assessed with respect to MTAI which has not been abated or paid
in full.

     

    (b) For
purposes of this Agreement, (i) "Taxes" shall mean all taxes, charges, fees,
levies, or other assessments, including, without limitation, income, gross
receipts, sales, use, ad valorem, goods and services, capital, transfer,
franchise, profits, license, withholding, payroll, employment, employer health,
excise, estimated, severance, stamp, occupation, property or other taxes,
customs duties, fees, assessments or charges of any kind whatsoever, together
with any interest and any penalties, additions to tax or additional amounts
imposed by any taxing authority and (ii) "Tax Return" shall mean any report,
return, documents declaration or other information or filing required to be
supplied to any taxing authority or jurisdiction with respect to
Taxes.

     

    Title to
Property.

     

    MTAI has
good and defensible title to all of its properties and assets, free and clear of
all liens, charges, and encumbrances, except liens for taxes not yet due and
payable and such liens or other imperfections of title, if any, as do not
materially detract from the value of or interfere with the present use of the
property affected thereby or which,
individually or in the aggregate, would not have a Material Adverse Effect on
MTAI; and, to MTAI's knowledge, all leases pursuant to which MTAI leases from
others real or personal property are in good standing, valid, and effective in
accordance with their respective terms, and there is not, to the knowledge of
MTAI, under any of such leases, any existing material default or event of
default (or event which with notice of lapse of time, or both, would constitute
a default and in respect of which MTAI has not taken adequate steps to prevent
such a default from occurring) except where the lack of such good standing,
validity and effectiveness, or the existence of such default or event, would not
have a Material Adverse Effect on MTAI.

     

    Intellectual
Property.

     

    (a) MTAI
owns, or possesses, adequate licenses or other valid rights to use, all existing
United States and foreign patents, trademarks, trade names, service marks,
copyrights, trade secrets and applications thereof that are material to its
business as currently conducted (the "MTAI Intellectual Property
Rights").

     

    
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    (b) The
validity of the MTAI Intellectual Property Rights and the title thereto of MTAI
are not being questioned in any litigation to which MTAI is a
party.

     

    (c) the
conduct of the business of MTAI as now conducted, does not, to MTAI's knowledge,
infringe any valid patents, trademarks, trade names, service marks or copyrights
of others. The consummation of the transactions completed hereby will not result
in the loss or impairment of any MTAI Intellectual Property Rights.

     

    (d) MTAI has
taken steps it believes appropriate to protect and maintain its trade secrets as
such, except in cases where MTAI has elected to rely on patent or copyright
protection in lieu of trade secret protection.

     

    Insurance.

     

    MTAI
currently does not maintain general liability and other business
insurance.

     

    Certain Business
Practices.

     

    Neither
MTAI nor any director, officer, agent, or employee of MTAI, have (i) used any
funds for unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns or violated any provision of the US Foreign
Corrupt Practices Act of 1977, as amended (the "FCPA"), or (iii) made any other
unlawful payment.

     

    Insider
Interests.

     

    MTAI, nor
any officer or director of MTAI, has any interest in any material property, real
or personal, tangible or intangible, including without limitation, any
computer
software or MTAI Intellectual Property Rights, used in or pertaining to the
business of MTAI, except for the ordinary rights of a stockholder or employee
stock optionholder.

     

    Opinion of Financial
Adviser.

     

    No
advisers, as of the date hereof, have delivered to the MTAI Board a written
opinion to the effect that, as of such date, the exchange ratio contemplated by
the Acquisition is fair to the holders of MTAI Shares.

     

    Brokers.

     

    No
broker, finder or investment banker is entitled to any brokerage, finders, or
other fee or commission in connection with the transactions contemplated by this
Agreement, based upon arrangements made by, or on behalf of, MTAI.

     

    
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    Disclosure.

     

    No
representation or warranty of MTAI in this Agreement or any certificate,
schedule, document, or other instrument furnished or to be furnished to MTI
pursuant hereto, or in connection herewith, contains, as of the date of such
representation, warranty or instrument, or will contain any untrue statement of
a material fact or, at the date thereof, omits, or will omit to state, a
material fact necessary to make any statement herein or therein, in light of the
circumstances under which such statement is or will be made, not
misleading.

     

    No Existing
Discussions.

     

    As of the
date hereof, MTAI is not engaged, directly or indirectly, in any discussions or
negotiations with any other party with respect to any Third Party
Acquisition.

     

    Material
Contracts.

     

    (a) MTAI
has delivered or otherwise made available to MTI true, correct, and complete
copies of all contracts and agreements (and all amendments, modifications, and
supplements thereto and all side letters to which MTAI is a party affecting the
obligations of any party thereunder) to which MTAI is a party or by which any of
its properties or assets are bound, that are material to the business,
properties or assets of MTAI taken as a whole, including, without limitation, to
the extent any of the following are, individually or in the aggregate, material
to the business, properties or assets of MTAI taken as a whole, all: (i)
employment, product design or development, personal services, consulting,
non-competition, severance, golden parachute, or indemnification contracts
(including, without limitation, any contract to which MTAI is a party involving
employees of MTAI); (ii) licensing, publishing, merchandising, or distribution
agreements; (iii) contracts granting rights of first refusal or first
negotiation; (iv) partnership
or joint venture agreements; (v) agreements for the acquisition, sale or lease
of material properties or assets or stock or otherwise; (vi) contracts or
agreements with any Governmental Entity, and (vii) all commitments and
agreements to enter into any of the foregoing. MTAI is not a party to, or bound
by any severance, golden parachute, or other agreement with any employee or
consultant pursuant to which such person would be entitled to receive any
additional compensation or an accelerated payment of compensation as a result of
the consummation of the transactions contemplated hereby.

     

    (b) Each of
the MTAI Contracts is valid and enforceable in accordance with its terms, and
there is no default under any MTAI Contract so listed either by MTAI or, to the
knowledge of MTAI, by any other party thereto, and no event has occurred that
with the lapse of time or the giving of notice, or both, would constitute a
default thereunder by MTAI or, to the knowledge of MTAI, any other party, in any
such case in which such default or event could reasonably be expected to have a
Material Adverse Effect on MTAI.

     

    (c) No party
to any such MTAI Contract has given notice to MTAI of or made a claim against
MTAI with respect to any breach or default thereunder, in any such case in which
such breach or default could reasonably be expected to have a Material Adverse
Effect on MTAI.

     

    
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    Representations and
Warranties of MTI

     

    MTI
hereby represents and warrants to MTAI as follows: Organization and
Qualification.

     

    (a) Each of
MTI and its subsidiaries is duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its incorporation or organization
and has all requisite power and authority to own, lease, and operate its
properties and to carry on its businesses as now being conducted, except where
the failure to be so organized, existing, and in good standing or to have such
power and authority would not have a Material Adverse Effect (as defined below)
on MTI. When used in connection with MTI, the term "Material Adverse Effect"
means any change or effect (i) that is or is reasonably likely to be materially
adverse to the business, results of operations, condition (financial or
otherwise) or prospects of MTI and its subsidiaries, taken as a whole, other
than any change or effect arising out of general economic conditions unrelated
to any businesses in which MTI and its subsidiaries are engaged, or (ii) that
may impair the ability of MTI to consummate the transactions contemplated
hereby.

     

    (b) MTI has
heretofore delivered to MTAI accurate and complete copies of the Certificate of
Incorporation and Bylaws (or similar governing documents), as currently in
effect, of MTI. Each of MTI and its subsidiaries is duly qualified or licensed
and in good standing to do business in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or licensing
necessary except in such jurisdictions where the failure to be so duly qualified
or licensed and in good standing would not have a Material Adverse Effect on
MTI.

     

    Capitalization of
MTI.

     

                     (a)            As
of the date of this Agreement, the authorized capital stock of MTI consists
of;
(i) common Shares were issued and were outstanding, (ii) all of the
outstanding
MTI Shares have been duly authorized and validly issued, and are fully paid,
non-assessable and free of preemptive rights.

     

    (b) MTI is
the record and beneficial owner of all of the issued and outstanding shares of
capital stock of its subsidiaries.

     

    (c)  Between , 2006 and the date
hereof, no shares of MTI's capital
stock have been issued and no MTI Stock options have been granted. As of the
date hereof, there are no outstanding (i) shares of capital stock or other
voting securities of MTI, (ii) securities of MTI or its subsidiaries convertible
into or exchangeable for shares of capital stock or voting securities of MTI,
(iii) options or other rights to acquire from MTI or its subsidiaries, or
obligations of MTI or its subsidiaries to issue, any capital stock, voting
securities or securities convertible into, or exchangeable for, capital stock or
voting securities of MTI, or (iv) equity equivalents, interests in the ownership
or earnings of MTI or its subsidiaries or other similar rights (collectively,
"MTI Securities"). As of the date hereof, there are no outstanding obligations
of MTI or any of its subsidiaries to repurchase, redeem or otherwise acquire any
MTI Securities. There are no stockholder agreements, voting trusts or other
agreements or understandings to which MTI is a party or by which it is bound
relating to the voting or registration of any shares of capital stock of
MTI.

     

    
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    (d) There are
no securities of MTI convertible into or exchangeable for, no options or other
rights to acquire from MTI, and no other contract, understanding, arrangement or
obligation (whether or not contingent) providing for the issuance or sale,
directly or indirectly, of any capital stock or other ownership interests in, or
any other securities of, any subsidiary of MTI.

     

    (e) The MTI
Shares constitute the only class of equity securities of MTI or its
subsidiaries.

     

    (f) MTI does
not own directly or indirectly more than fifty percent (50%) of the outstanding
voting securities or interests (including membership interests) of any
entity.

     

    Authority Relative to this
Agreement; Recommendation.

     

                    
(a) MTI has all necessary corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of MTI (the
"MTI Board"), and no other corporate proceedings on the part of MTI are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby, except, as referred to in Section 3.17, the approval and
adoption of this Agreement by the holders of at least a majority of the, then,
outstanding MTI Shares. This Agreement has been duly and validly executed and
delivered by MTI and constitutes a valid, legal and binding agreement of MTI,
enforceable against MTI in accordance with its terms.

     

    (b) The
MTI Board has resolved to recommend that the stockholders of MTI approve and
adopt this Agreement.

     

    SEC Reports: Financial
Statements.

     

    MTI is
not required to file forms, reports, and documents with the SEC.

     

    Information
Supplied.

     

    None of
the information supplied or to be supplied by MTI for inclusion or incorporation
by reference to an 8-K will, at the time an 8-K is filed with the SEC and at the
time it becomes effective under the Securities Act, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.

     

    Consents and Approvals: No
Violations,

     

    For
filings, permits, authorizations, consents, and approvals as may be required
under, and other applicable requirements of, the Securities Act, the Exchange
Act, state securities or blue sky laws, the HSR Act, the rules of the NASD, no
filing with or notice to, and no permit, authorization, consent or approval of,
any Governmental Entity is necessary for the execution and delivery by MTI of
this Agreement or the consummation by MTI of the transactions contemplated
hereby, except where the failure to obtain such permits, authorizations consents
or approvals or to make such filings or give such notice would not have a
Material Adverse Effect on MTI.

     

    
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    Neither
the execution, delivery and performance of this Agreement by MTI nor the
consummation by MTI of the transactions contemplated hereby will (i) conflict
with or result in any breach of any provision of the respective Articles of
Incorporation or Bylaws (or similar governing documents) of MTI or any of MTI's
subsidiaries, (ii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, amendment, cancellation or acceleration or Lien) under,
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or obligation
to which MTI or any of MTI's subsidiaries is a party or by which any of them or
any of their respective properties or assets may be bound or (iii) violate any
order, writ, injunction, decree, law, statute, rule or regulation applicable to
MTI or any of MTI's subsidiaries or any of their respective properties or
assets, except in the case of (ii) or (iii) for
violations, breaches or defaults which would not have a Material Adverse Effect
on MTI.

    No Default.

     

    None of
MTI or any of its subsidiaries is in breach, default, or violation (and no event
has occurred which with notice or the lapse of time or both would constitute a
breach, default or violation) of any term, condition or provision of (i) its
Articles of Incorporation or Bylaws (or similar governing documents), (ii) any
note, bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which MTI or any of its subsidiaries is now a party
or by which any of them or any of their respective properties or assets may be
bound or (iii) any order, writ, injunction, decree, law, statute, rule or
regulation applicable to MTI, its subsidiaries or any of their respective
properties or assets, except in the case of (ii) or (iii) for violations,
breaches or defaults that would not have a Material Adverse Effect on MTI. Each
note, bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which MTI or any of its subsidiaries is now a party
or by which any of them or any of their respective properties or assets may be
bound that is material to MTI and its subsidiaries, taken as a whole and that
has not expired, is in full force and effect and is not subject to any material
default thereunder of which MTI is aware by any party obligated to MTI or any
subsidiary thereunder.

     

    No Undisclosed Liabilities;
Absence of Changes.

     

    Except as
and to the extent disclosed by MTI, none of MTI or its subsidiaries had any
liabilities or obligations of any nature, whether or not accrued, contingent or
otherwise, that would be required by generally accepted accounting principles to
be reflected on a consolidated balance sheet of MTI and its consolidated
subsidiaries (including the notes thereto) or which would have a Material
Adverse Effect on MTI. Except as disclosed by MTI, none of MTI or its
subsidiaries has incurred any liabilities of any nature, whether or not accrued,
contingent or otherwise, which could reasonably be expected to have, and there
have been no events, changes or effects with respect to MTI or its subsidiaries
having or which could reasonably be expected to have, a Material Adverse Effect
on MTI. Except as and to the extent disclosed by MTI there has not been (i) any
material change by MTI in its accounting methods, principles or practices (other
than as required after the date hereof by concurrent changes in generally
accepted accounting principles), (ii) any revaluation by MTI of any of its
assets having a Material Adverse Effect on MTI, including, without limitation,
any write-down of the value of any assets other than in the ordinary course of
business or (iii) any other action or event that would have required the consent
of any other party hereto had such action or event occurred after the date of
this Agreement.

     

    
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    Litigation.

     

                   
There is no suit, claim, action, proceeding or investigation pending or, to the
knowledge of MTI, threatened against MTI or any of its subsidiaries or any of
their respective
properties or assets before any Governmental Entity which, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect on
MTI or could reasonably be expected to prevent or delay the consummation of the
transactions contemplated by this Agreement. Except as disclosed by MTI, none of
MTI or its subsidiaries is subject to any outstanding order, writ, injunction or
decree which, insofar as can be reasonably foreseen in the future, could
reasonably be expected to have a Material Adverse Effect on MTI or could
reasonably be expected to prevent or delay the consummation of the transactions
contemplated hereby.

     

    Compliance with Applicable
Law.

     

    Except as
disclosed by MTI, MTI and its subsidiaries hold all permits, licenses,
variances, exemptions, orders and approvals of all Governmental Entities
necessary for the lawful conduct of their respective businesses (the "MTI
Permits"), except for failures to hold such permits, licenses, variances,
exemptions, orders and approvals which would not have a Material Adverse Effect
on MTI. Except as disclosed by MTI, MTI and its subsidiaries are in compliance
with the terms of the MTI Permits, except where the failure to comply would not
have a Material Adverse Effect on MTI. Except as disclosed by MTI, the
businesses of MTI and its subsidiaries are not being conducted in violation of
any law, ordinance or regulation of any Governmental Entity except that no
representation or warranty is made in this Section with respect to Environmental
Laws and except for violations or possible violations which do not, and, insofar
as reasonably can be foreseen, in the future will not, have a Material Adverse
Effect on MTI. Except as disclosed by MTI no investigation or review by any
Governmental Entity with respect to MTI or its subsidiaries is pending or, to
the knowledge of MTI, threatened, nor, to the knowledge of MTI, has any
Governmental Entity indicated an intention to conduct the same, other than, in
each case, those which MTI reasonably believes will not have a Material Adverse
Effect on MTI.

     

    Employee Benefit Plans;
Labor Matters.

     

    (a) With
respect to each employee benefit plan, program, policy, arrangement and contract
(including, without limitation, any "employee benefit plan," as defined in
Section 3(3) of ERISA), maintained or contributed to at any time by MTI, any of
its subsidiaries or any entity required to be aggregated with MTI or any of its
subsidiaries pursuant to Section 414 of the United States Code (each, a "MTI
Employee Plan"), no event has occurred and, to the knowledge of MTI, no
condition or set of circumstances exists in connection with which MTI or any of
its subsidiaries could reasonably be expected to be subject to any liability
which would have a Material Adverse Effect on MTI.

     

    
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    (b) (i) No
MTI Employee Plan is, or has been subject to, Title IV of ERISA or Section 412
of the United States Code; and (ii) each MTI Employee Plan intended to qualify
under Section 401(a) of the United States Code and each trust intended to
qualify under Section 501(a) of the United States Code is the subject of a
favorable Internal
Revenue Service determination letter, and nothing has occurred which could
reasonably be expected to adversely affect such determination.

     

    (c) Section
3.11(c) of the MTI Disclosure Schedule sets forth a true and complete list, as
of the date of this Agreement, of each person who holds any MTI Stock Options,
together with the number of MTI Shares which are subject to such option, the
date of grant of such option, the extent to which such option is vested (or will
become vested as a result of the Acquisition), the option price of such option
(to the extent determined as of the date hereof), whether such option is a
nonqualified stock option or is intended to qualify as an incentive stock option
within the meaning of Section 422(b) of the United States Code, and the
expiration date of such option. Section 3.11(c) of the MTI Disclosure Schedule
also sets forth the total number of such incentive stock options and such
nonqualified options. MTI has furnished MTAI with complete copies of the plans
pursuant to which the MTI Stock Options were issued. Other than the automatic
vesting of MTI Stock Options that may occur without any action on the part of
MTI or its officers or directors, MTI has not taken any action that would result
in any MTI Stock Options that are unvested becoming vested in connection with,
or as a result of, the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.

     

    (d) MTI has
made available to MTAI: (i) a description of the terms of employment and
compensation arrangements of all officers of MTI and a copy of each such
agreement currently in effect; (ii) copies of all agreements with consultants
who are individuals obligating MTI to make annual cash payments in an amount
exceeding $60,000; (iii) a schedule listing all officers of MTI who have
executed a non-competition agreement with MTI and a copy of each such agreement
currently in effect; (iv) copies (or descriptions) of all severance agreements,
programs and policies of MTI with, or relating to, its employees, except
programs and policies required to be maintained by law; and (v) copies of all
plans, programs, agreements and other arrangements of the MTI with, or relating
to, its employees which contain change in control provisions.

     

    (e) There
shall be no payment, accrual of additional benefits, acceleration of payments,
or vesting in any benefit under any MTI Employee Plan or any agreement or
arrangement disclosed under this Section solely by reason of entering into or in
connection with the transactions contemplated by this Agreement.

     

    (f) There are
no controversies pending or, to the knowledge of MTI threatened, between MTI or
any of its subsidiaries and any of their respective employees, which
controversies have or could reasonably be expected to have a Material Adverse
Effect on MTI. Neither MTI nor any of its subsidiaries is a party to any
collective bargaining agreement or other labor union contract applicable to
persons employed by MTI or any of its subsidiaries (and neither MTI nor any of
its subsidiaries has any outstanding material liability with respect to any
terminated collective bargaining agreement or labor union contract), nor does
MTI know of any activities or proceedings of any labor union to organize any of
its or any of its subsidiaries' employees. MTI has no knowledge of any strike,
slowdown, work stoppage, lockout or threat thereof by or with respect to any of
its or any of its subsidiaries' employees.

     

    
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    Environmental Laws and
Regulations.

     

    (a) Except as
disclosed by MTI, (i) each of MTI and its subsidiaries is in material compliance
with all Environmental Laws, except for non-compliance that would not have a
Material Adverse Effect on MTI, which compliance includes, but is not limited
to, the possession by MTI and its subsidiaries of all material permits and other
governmental authorizations required under applicable Environmental Laws, and
compliance with the terms and conditions thereof; (ii) none of MTI or its
subsidiaries has received written notice of, or, to the knowledge of MTI, is the
subject of, any Environmental Claim that could reasonably be expected to have a
Material Adverse Effect on MTI; and (iii) to the knowledge of MTI, there are no
circumstances that are reasonably likely to prevent or interfere with such
material compliance in the future.

     

    (b) Except as
disclosed by MTI, there are no Environmental Claims which could reasonably be
expected to have a Material Adverse Effect on MTI that are pending or, to the
knowledge of MTI, threatened against MTI or any of its subsidiaries or, to the
knowledge of MTI, against any person or entity whose liability for any
Environmental Claim, MTI or its subsidiaries has, or may have, retained or
assumed either contractually or by operation of law.

     

    Tax Matters.

     

    (i) MTI
and each of its subsidiaries has filed or has had filed on its behalf in a
timely manner (within any applicable extension periods) with the appropriate
Governmental Entity all income and other material Ta< Returns with respect to
Taxes of MTI and each of its subsidiaries and all Tax Returns were in all
material respects true, complete and correct; (ii) all material Taxes with
respect to MTI and each of its subsidiaries have been paid in full or have been
provided for in accordance with GAAP on MTI's most recent balance sheet which is
part of the MTI SEC Documents; (iii) there are no outstanding agreements or
waivers extending the statutory period of limitations applicable to any federal,
state, province, local, or foreign income or other material Tax Returns required
to be filed by or with respect to MTI or its subsidiaries; (iv) to the knowledge
of MTI none of the Tax Returns of, or with respect to, MTI or any of its
subsidiaries is currently being audited or examined by any Governmental Entity;
and (v) no deficiency for any income or other material Taxes has been assessed
with respect to MTI or any of its subsidiaries which has not been abated or paid
in full.

     

    Title to
Property.

     

    MTI and
each of its subsidiaries have good and defensible title to all of their
properties and assets, free and clear of all liens, charges and encumbrances
except liens for taxes not yet due and payable and such liens or other
imperfections of title, if any, as do not materially detract from the value of,
or interfere with, the present use of the property affected thereby or which,
individually or in the aggregate, would not have a Material Adverse Effect on
MTI; and, to MTI's knowledge, all leases pursuant to which MTI or any of its
subsidiaries lease from others real or personal property are in good
standing,
valid, and effective in accordance with their respective terms, and there is
not, to the knowledge of MTI, under any of such leases, any existing material
default or event of default (or event which with notice or lapse of time, or
both, would constitute a material default and in respect of which MTI or such
subsidiary has not taken adequate steps to prevent such a default from
occurring) except where the lack of such good standing, validity, and
effectiveness, or the existence of such default or event of default would not
have a Material Adverse Effect on MTI.

     

    
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    Intellectual
Property.

     

    (a) Each of
MTI and its subsidiaries owns, or possesses adequate licenses or other valid
rights to use, all existing United States and foreign patents, trademarks, trade
names, services marks, copyrights, trade secrets, and applications therefore
that are material to its business as currently conducted (the "MTI Intellectual
Property Rights").

     

    (b) The
validity of the MTI Intellectual Property Rights and the title thereto of MTI or
any subsidiary, as the case may be, is not being questioned in any litigation to
which MTI or any subsidiary is a party.

     

    (c) The
conduct of the business of MTI and its subsidiaries as now conducted does not,
to MTI's knowledge, infringe any valid patents, trademarks, trade names, service
marks or copyrights of others. The consummation of the transactions contemplated
hereby will not result in the loss or impairment of any MTI Intellectual
Property Rights.

     

    (d) Each of
MTI and its subsidiaries has taken steps it believes appropriate to protect and
maintain its trade secrets as such, except in cases where MTI has elected to
rely on patent or copyright protection in lieu of trade secret
protection.

     

    Insurance.

     

    MTI and
its subsidiaries maintain general liability and other business insurance that
MTI believes to be reasonably prudent for its business.

     

    Affiliates.

     

    Except
for the directors and executive officers of MTI, there are no persons who, to
the knowledge of MTI, may be deemed to be affiliates of MTI under Rule 1-02(b)
of Regulation S-X of the US SEC (the "MTI Affiliates").

     

    Certain Business
Practices.

     

    None of
MTI, any of its subsidiaries, or any directors, officers, agents or employees of
MTI or any of its subsidiaries, has (i) used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity,

     

    (ii) made
any unlawful payment to foreign or domestic government officials or employees or
to foreign or domestic political parties or campaigns or violated any provision
of the FCPA, or (iii) made any other unlawful payment.

     

    
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    Insider
Interests.

     

    No
officer or director of MTI has any interest in any material property, real or
personal, tangible or intangible, including without limitation, any computer
software or MTI Intellectual Property Rights, used in or pertaining to the
business of MTI or any subsidiary, except for the ordinary rights of a
stockholder or employee stock optionholder.

     

    Opinion of Financial
Adviser.

     

    No
advisers, as of the date hereof, have delivered to the MTI Board a written
opinion to the effect that, as of such date, the exchange ratio contemplated by
the Acquisition is fair to the holders of MTI Shares.

     

    Brokers.

     

    No
broker, finder or investment banker is entitled to any brokerage, finders or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of MTI.

     

    Disclosure.

     

    No
representation or warranty of MTI in this Agreement or any certificate,
schedule, document or other instrument furnished or to be furnished to MTAI
pursuant hereto or in connection herewith contains, as of the date of such
representation, warranty or instrument, or will contain any untrue statement of
a material fact or, at the date thereof, omits or will omit to state a material
fact necessary to make any statement herein or therein, in light of the
circumstances under which such statement is or will be made, not
misleading.

     

    No Existing
Discussions.

     

    As of the
date hereof, MTI is not engaged, directly or indirectly, in any discussions or
negotiations with any other party with respect to any Third Party
Acquisition.

     

    Material
Contracts.

     

    (a) MTI
has delivered or otherwise made available to MTAI true, correct, and complete
copies of all contracts and agreements (and all amendments, modifications and
supplements thereto and all side letters to which MTI is a party affecting the
obligations of any party thereunder) to which MTI or any of its subsidiaries is
a party or by which
any of their properties or assets are bound that are, material to the business,
properties or assets of MTI and its subsidiaries taken as a whole, including,
without limitation, to the extent any of the following are, individually or in
the aggregate, material to the business, properties or assets of MTI and its
subsidiaries taken as a whole, ail: (i) employment, product design or
development, personal services, consulting, non-competition, severance, golden
parachute or indemnification contracts (including, without limitation, any
contract to which MTI is a party involving employees of MTI); (ii) licensing,
publishing, merchandising or distribution agreements; (iii) contracts granting
rights of first refusal or first negotiation; (iv) partnership or joint venture
agreements; (v) agreements for the acquisition, sale or lease of material
properties or assets or stock or otherwise, (vi) contracts or agreements with
any Governmental Entity; and (vii) all commitments and agreements to enter into
any of the foregoing (collectively, together with any such contracts entered
into in accordance with Section 5.2 hereof, the 'MTI Contracts"). Neither MTI
nor any of its subsidiaries is a party to or bound by any severance, golden
parachute or other agreement with any employee or consultant pursuant to which
such person would be entitled to receive any additional compensation or an
accelerated payment of compensation as a result of the consummation of the
transactions contemplated hereby.

     

    
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    (b) Each of
the MTI Contracts is valid and enforceable in accordance with its terms, and
there is no default under any MTI Contract so listed either by MTI or, to the
knowledge of MTI, any other party thereto, and no event has occurred that, with
the lapse of time or the giving of notice, or both, would constitute a default
thereunder by MTI or, to the knowledge of MTI, any other party, in any such case
in which such default or event could reasonably be expected to have a Material
Adverse Effect on MTI.

     

    (c) No party
to any such MTI Contract has given notice to MTI of, or made a claim against,
MTI with respect to any breach or default thereunder, in any such case in which
such breach or default could reasonably be expected to have a Material Adverse
Effect on MTI.

     

    Other Potential
Acquirers.

    
       

                      
(a) MTI, its affiliates and their respective officers, directors,
employees, representatives, and agents shall immediately cease any existing
discussions or negotiations, if any, with any parties conducted heretofore with
respect to any Third Party Acquisition.

    

     

    Other
Conditions

    

     

    Meetings of
Stockholders.

     

    Each of
MTI and MTAI shall take all action necessary, in accordance with the respective
General Corporation Law (GCL) of its respective state or country, and its
respective Articles of Incorporation and Bylaws, or similar governing documents,
to duly call, give notice of, convene, and hold a meeting of its stockholders,
or receive a written majority
consent of its respective stockholders, as promptly as practicable, to consider
and vote upon the adoption and approval of this Agreement and the transactions
contemplated hereby. The stockholder votes required for the adoption and
approval of the transactions contemplated by this Agreement shall be the vote
required by the GCL and its charter and bylaws, in the case of MTAI and the
General Corporation Law of its respective state or country, and its charter and
bylaws, in the case of MTI. MTAI and MTI will, through their respective Boards
of Directors, recommend to their respective stockholders approval of such
matters

     

    OTC:BB Listing.

     

    The
parties shall use all reasonable efforts to cause the MTAI Shares, upon closing
of the Acquisition, to be quoted on the Pink Sheets market and then work to get
them listed on the Over-the-Counter Bulletin Board (OTC:BB)

     

    Access to
Information.

     

    Each of
the parties hereto will hold and will cause its consultants and advisers to hold
in confidence all documents and information furnished to it in connection with
the transactions contemplated by this Agreement.

     

    
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    Additional Agreements.
Reasonable Efforts.

     

    Subject
to the terms and conditions herein provided, each of the parties hereto agrees
to use all reasonable efforts to take, or cause to be taken, all action, and to
do, or cause to be done, all things reasonably necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement.

     

    Employee Benefits; Stock
Option and Employee Purchase Plans.

     

    It is the
parties' present intent to provide after the Effective Date to employees of MTI
employee benefit plans (other than stock option or other plans involving the
potential issuance of securities of MTAI) which, in the aggregate, are not less
favorable than those currently provided by MTI, if any. Notwithstanding the
foregoing, nothing contained herein shall be construed as requiring the parties
to continue any specific employee benefit plans.

     

    Public
Announcements

     

    MTI and
MTAI will consult with one another before issuing any press release or otherwise
making any public statements with respect to the transactions contemplated by
this Agreement, including, without limitation, the Acquisition, and shall not
issue any such press release or make any such public statement prior to such
consultation, except as may be required by applicable law or by obligations
pursuant to any quotation requirements with the NASD as determined by MTI or
MTAI.

     

    Indemnification

     

    (a) To
the extent, if any, not provided by an existing right under one of the
parties'
directors and officers liability insurance policies, from and after the
Effective Date,
MTAI shall, to the fullest extent permitted by applicable law, indemnify,
defend, and hold
harmless each person who is now, or has been at any time prior to the date
hereof,
or who becomes prior to the Effective Date, a director, officer or employee of
th parties
hereto or any subsidiary thereof (each an "Indemnified Party" and, collectively,
the
"Indemnified Parties") against all losses, expenses (including reasonable
attorneys' fees and
expenses), claims, damages, or liabilities or, subject to the proviso of the
next succeeding
sentence, amounts paid in settlement arising out of actions or omissions
occurring
at or prior to the Agreement date and whether asserted or claimed prior to, (at
or after
the Agreement date) that are in whole or in part (i) based on, or arising out of
the fact
that such person is or was a director, officer, or employee of such party or a
subsidiary
of such party or (ii) based on, arising out of, or pertaining to the
transactions contemplated
by this Agreement. In the event of any such loss, expense, claim, damage
or
liability (whether or not arising before the Agreement date), (i) MTAI shall pay
the reasonable
fees and expenses of counsel selected by the Indemnified Parties, which
counsel
shall be reasonably satisfactory to MTAI, promptly after statements therefore
are
received and otherwise advance to such Indemnified Party upon request
reimbursement
of documented expenses reasonably incurred, in either case to the extent
not prohibited by the GCL or its certificate of incorporation or bylaws, (ii)
YFC 355 will
cooperate in the defense of any such matter and (iii) any determination required
to be made
with respect to whether an Indemnified Party's conduct complies with the
standards
set forth under the GCL and MTAI's certificate of incorporation or bylaws
shall be
made by independent counsel mutually acceptable to MTAI and the Indemnified
Party; provided, however, that MTAI shall not be liable for any settlement
effected
without its written consent (which consent shall not be unreasonably withheld).
The
Indemnified Parties as a group may retain only one law firm with respect to each
related
matter except to the extent there is, in the opinion of counsel to an
Indemnified Party,
under applicable standards of professional conduct, conflict on any significant
issue
between positions of any two or more Indemnified Parties.

     

    
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    (b) 
In the
event MTAI or any of its successors or assigns (i) consolidates with, or merges
into, any other person and shall not be the continuing or surviving corporation
or entity or such consolidation or merger or (ii) transfers all or substantially
all of its properties and assets to any person, then and in either such case,
proper provision shall be made so that the successors and assigns of MTAI shall
assume the obligations set forth in this Agreement.

     

    (c) To the
fullest extent permitted by law, from and after the Effective Date, all rights
to indemnification now existing in favor of the employees, agents, majority
stockholders, directors, or officers of MTAI and MTI and their subsidiaries with
respect to their activities as such prior to the Effective Date, as provided in
MTAI's and MTI's certificate of incorporation or bylaws, in effect on the date
thereof or otherwise in effect on the date hereof, shall survive the Acquisition
and shall continue in full force and effect for a period of not less than six
years from the Agreement date.

     

    (d) The
provisions of this Section are intended to be for the benefit of, and shall be
enforceable by, each Indemnified Party, his or her heirs and his or her
representatives.

     

    Notification of Certain
Matters.

     

    The
parties hereto shall give prompt notice to the other parties, of (i) the
occurrence or nonoccurrence of any event the occurrence or nonoccurrence of
which would be likely to cause any representation or warranty contained in this
Agreement to be untrue or inaccurate in any material respect at or prior to the
Effective Date, (ii) any material failure of such party to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder, (iii) any notice of, or other communication relating to, a default
or event which, with notice or lapse of time or both, would become a default,
received by such party or any of its subsidiaries subsequent to the date of this
Agreement and prior to the Effective Date, under any contract or agreement
material to the financial condition, properties, businesses or results of
operations of such party and its subsidiaries taken as a whole to which such
party or any of its subsidiaries is a party or is subject, (iv) any notice or
other communication from any third party alleging that the consent of such third
party is or may be required in connection with the transactions contemplated by
this Agreement, or (v) any material adverse change in their respective financial
condition, properties, businesses, results of operations or prospects taken as a
whole, other than changes resulting from general economic conditions; provided,
however, that the delivery of any notice pursuant to this Section shall not cure
such breach or non-compliance or limit or otherwise affect the remedies
available hereunder to the party receiving such notice.

     

    Miscellaneous

     

    
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    Non-survival of
Representations and Warranties.

     

    The
representations and warranties made herein shall not survive beyond the
Agreement Date or a termination of this Agreement. This Section 7.1 shall not
limit any covenant or agreement of the parties hereto which by its terms
requires performance after the Effective Date.

     

    Entire Agreement;
Assignment.

     

    This
Agreement (a) constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all other prior agreements
and understandings both written and oral, between the parlies with respect to
the subject matter hereof and (b) shall not be assigned by operation of law or
otherwise.

     

    Validity

     

    If any
provision of this Agreement, or the application thereof to any person or
circumstance, is held invalid or unenforceable, the remainder of this Agreement,
and the application of such provision to other persons or circumstances, shall
not be affected thereby, and to such end, the provisions of this Agreement are
agreed to be severable.

     

    Notices.

     

    All
notices, requests, claims, demands, and other communications hereunder shall be
in writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person, by facsimile or by registered or certified mail
(postage prepaid, return receipt requested), to each other party as
follows:

     

    If to
MTI:

     

    Miktam
Technologies, Inc. ATTN: Mr. Thomas Chao 2362B Qume Dr. San Jose, CA 95131
Tel:       408-392-0668
Fax:      408-392-0662

     

    If to MTAI:

     

    Miktam
Technologies Americas Inc. ATTN:

    300
Center Ave. Ste. 202 Bay City, Ml 48708
Tel:        989-891-0500
Fax:      989-893-5752

     

    
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    or to
such other address as the person to whom notice is given may have previously
furnished to the other in writing in the manner set forth above.

     

    Governing Law.

     

    This
Agreement shall be governed by and construed in accordance with the laws of the
State of Michigan, without regard to the principles of conflicts of law
thereof.

     

    Descriptive
Headings.

     

    The
descriptive headings herein are inserted for convenience of reference only and
are not intended to be part of or to affect the meaning or interpretation of
this Agreement.

     

    Parties in
Interest.

     

    This
Agreement shall be binding upon and inure solely to the benefit of each party
hereto and its successors and permitted assigns, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
rights, benefits or remedies of any nature whatsoever under or by reason of this
Agreement.

     

    Certain
Definitions.

     

    For the
purposes of this Agreement, the term:

     

    (a) "affiliate"
means'(except as otherwise provided in Sections 2.19, 3.19 and 4.13) a person
that directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the first mentioned
person;

     

    (b) "capital
stock" means common stock, preferred stock, partnership interests, limited
liability company interests or other ownership interests entitling the holder
thereof to vote with respect to matters involving the issuer
thereof;

     

    (c) "knowledge"
or "known" means, with respect to any matter in question, if an executive
officer of MTAI or MTI or its subsidiaries, as the case may be, has actual
knowledge of such matter;

     

    (d) "person"
means an individual, corporation, partnership, limited liability company,
association, trust, unincorporated organization or other legal entity;
and

     

    (e) "subsidiary"
or "subsidiaries" of MTAI, MTI or any other person, means any corporation,
partnership, limited liability company, association, trust, unincorporated
association or other legal entity of which MTAI, MTI or any such other person,
as the case may be (either alone or through or together with any other
subsidiary), owns, directly or indirectly, 50% or more of the capital stock, the
holders of which are generally entitled to vote for the election of the board of
directors or other governing body of such corporation or other legal
entity.

     

    
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    Personal
Liability.

     

    This
Agreement shall not create or be deemed to create or permit any personal
liability or obligation on the part of any direct or indirect stockholder of
MTAI, MTI or any officer, director, employee, agent, representative, or investor
of any party hereto.

     

    Specific
Performance.

     

    The
parties hereby acknowledge and agree that the failure of any party to perform
its agreements and covenants hereunder, including its failure to take all
actions as are necessary on its part to the consummation of the Acquisition,
will cause irreparable injury to the other parties for which damages, even if
available, will not be an

     

    adequate
remedy. Accordingly, each party hereby consents to the issuance of injunctive
relief by a court of competent jurisdiction located in the State of Michigan to
compel performance of such party's obligations and to the granting by such court
of the remedy of specific performance of its obligations hereunder; provided,
however, that, if a party hereto is entitled to receive any payment or
reimbursement of expenses, it shall not be entitled to specific performance to
compel the consummation of the Acquisition.

     

    Counterparts.

     

    This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original, but all of which shall constitute one and the same
agreement.

     

    In
Witness Whereof, each of the parties has caused this Agreement to be duly
executed on its behalf as of the day and year first above written.

     

     

    By: /s/ Thomas
Chao                                

    Mr Thomas Chao, President &
CEO

     

     

    

     

     

     

     

    
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