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Exhibit 2.2
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AGREEMENT AND PLAN OF MERGER
among
FUNDAE ACQUISITION CORPORATION
FUNDAE MERGER SUB, INC.
and
C ME RUN CORP.
Dated as of January 31, 2000
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AGREEMENT AND PLAN OF MERGER dated as of January 31, 2000 (this
"Agreement") among FUNDAE ACQUISITION CORPORATION, a Delaware corporation
("Parent"), FUNDAE MERGER SUB, INC., a Delaware corporation and a wholly owned
subsidiary of Parent ("Merger Sub"), and C ME RUN CORP., a Delaware corporation
(the "Company").
W I T N E S S E T H
WHEREAS, upon the terms and subject to the conditions of this Agreement and
in accordance with the General Corporation Law of the State of Delaware (the
"DGCL"), Parent and the Company will enter into a business combination
transaction pursuant to which Merger Sub will merge with and into the Company
(the "Merger");
WHEREAS, the Board of Directors of the Company (i) has determined that the
Merger is consistent with and in furtherance of the long-term business strategy
of the Company and fair to, and in the best interests of, the Company and its
shareholders and has approved and adopted this Agreement, the Merger and the
other transactions contemplated by this Agreement and (ii) has recommended the
approval of this Agreement by the shareholders of the Company;
WHEREAS, for federal income tax purposes, the Merger is intended to qualify
as a reorganization under the provisions of section 368(a) of the United States
Internal Revenue Code of 1986, as amended (the "Code"); and
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent, Merger Sub and the Company hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Upon the terms and subject to the conditions set
forth in Article VII, and in accordance with the DGCL, at the Effective Time (as
defined below in Section 1.02), Merger Sub shall be merged with and into the
Company. As a result of the Merger, the separate corporate existence of Merger
Sub shall cease and the Company shall continue as the surviving corporation of
the Merger (the "Surviving Corporation").
SECTION 1.02. Effective Time; Closing. As promptly as practicable and in no
event later than the second business day following the satisfaction or, if
permissible, waiver of the conditions set forth in Article VII (or such other
date as may be agreed in writing by each of the parties hereto), the parties
hereto shall cause the Merger to be consummated by filing this Agreement or a
certificate of merger or certificate of ownership and merger (in any case, the
"Certificate of Merger") with the Secretary of State of the State of Delaware in
such form as is required by, and executed in accordance with, the relevant
provisions of the DGCL. The term "Effective Time" means the date and time of the
filing of the Certificate of Merger with the
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Secretary of State of the State of Delaware (or such later time as may be agreed
in writing by each of the parties hereto and specified in the Certificate of
Merger). Immediately prior to the filing of the Certificate of Merger, a closing
will be held at the offices of Xxxxxxxx, Xxxxx & Sosnovitch LLP, Toronto,
Ontario, Canada (or such other place as the parties may agree).
SECTION 1.03. Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in the applicable provisions of the DGCL.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, all the property, rights, privileges, powers and franchises of
the Company and Merger Sub shall vest in the Surviving Corporation, and all
debts, liabilities, obligations, restrictions, disabilities and duties of each
of the Company and Merger Sub shall become the debts, liabilities, obligations,
restrictions, disabilities and duties of the Surviving Corporation.
SECTION 1.04. Certificate of Incorporation; By-Laws. (a) At the Effective
Time, the Certificate of Incorporation of the Company, as in effect immediately
prior to the Effective Time, shall be the Certificate of Incorporation of the
Surviving Corporation until thereafter amended as provided by law and such
Certificate of Incorporation; provided, however, that, at the Effective Time,
Article I of the Certificate of Incorporation of the Surviving Corporation shall
be amended to read as follows: "The name of the Corporation is C Me Run Corp."
(b) At the Effective Time, the By-Laws of the Company, as in effect
immediately prior to the Effective Time, shall, be the By-Laws of the Surviving
Corporation until thereafter amended as provided by law, the Certificate of
Incorporation of the Surviving Corporation and such By-Laws.
SECTION 1.05. Directors and Officers. The directors of the Company
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-Laws of the Surviving Corporation, and the officers of the
Company immediately prior to the Effective Time shall be the initial officers of
the Surviving Corporation, in each case until their respective successors are
duly elected or appointed and qualified.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.01. Conversion of Securities. At the Effective Time, by virtue of
the Merger and without any action on the part of Merger Sub, the Company or the
holders of any of the following securities:
(a) each share of common stock, par value $.01 per share, of the Company
(the "Company Common Stock") issued and outstanding immediately prior to the
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Effective Time (other than any Company Common Stock to be cancelled pursuant to
Section 2.01(d) or constituting Dissenting Shares) shall be canceled and shall
be converted, subject to Section 2.02(e), into the right to receive one share
(the "Exchange Ratio") of common stock, par value $.001 per share, of the Parent
(the "Parent Common Stock"); provided, however, that, if between the date of
this Agreement and the Effective Time the outstanding shares of Parent Common
Stock shall have been changed into a different number of shares or a different
class, by reason of any stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of shares, the Exchange Ratio
shall be correspondingly adjusted to the extent appropriate to reflect such
stock dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares;
(b) each share of the Series A Convertible Preferred Stock, par value
$0.001 per share, of the Company (the "Company Series A") issued and outstanding
prior to the Effective Time (other than any Company Series A constituting
Dissenting Shares) shall be canceled and shall be converted into the right to
receive one share of the Series A Convertible Preferred Stock, par value $.01
per share, of Parent (the "New Series A").
(c) each share of the Series B Convertible Preferred Stock, par value
$0.001 per share, of the Company (the "Company Series B") issued and outstanding
prior to the Effective Time (other than any Company Series B constituting
Dissenting Shares) (all issued and outstanding shares of Company Common Stock,
Company Series A and Company Series B being hereinafter collectively referred to
as "Shares") shall be canceled and shall be converted into the right to receive
one share of the Series B Convertible Preferred Stock, par value $.01 per share,
of Parent (the "New Series B," and together with the Parent Common Stock and the
New Series A, the "Merger Consideration").
(d) each Share held in the treasury of the Company and each Share owned by
Parent or any direct or indirect wholly owned subsidiary of Parent or of the
Company immediately prior to the Effective Time shall be cancelled and
extinguished without any conversion thereof and no payment or distribution shall
be made with respect thereto; and
(e) each share of common stock, par value $.001 per share, of Merger Sub
issued and outstanding immediately prior to the Effective Time shall be
converted into and exchanged for one validly issued, fully paid and
nonassessable share of common stock, par value $.01 per share, of the Surviving
Corporation and shall forthwith cease to exist and be deemed cancelled.
SECTION 2.02. Exchange of Certificates. (a) Exchange Procedures. At the
Closing, the Company shall surrender to Parent all certificates representing
Shares (other than Dissenting Shares) (the "Certificates") delivered to it
(together with any stock transfer tax stamps required by reason of the payment
of the Merger Consideration to a person other than the registered holder of the
Certificate surrendered), together with such other customary documents as may
reasonably be required by Parent, in exchange for the Merger Consideration. The
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Certificates are being issued without registration under the Securities Act of
1933, as amended (together with the rules and regulations promulgated
thereunder, the "Securities Act"), and shall bear any legend required under
applicable securities laws. Immediately following the Effective Time, all
Certificates surrendered to Parent shall be canceled. Any shareholder of the
Company whose Certificates are not delivered at the Closing shall receive the
Merger Consideration with respect to such Certificates upon delivery to Parent
after the Closing of such Certificates and the other items required pursuant to
the first sentence of this Section 2.02(a).
(b) Distributions with Respect to Unexchanged Shares of Parent Common
Stock. No dividends or other distributions declared or made after the Effective
Time with respect to the Parent Common Stock with a record date after the
Effective Time shall be paid to the holder of any unsurrendered Certificate with
respect to the shares of Parent Common Stock represented thereby, and no cash
payment in lieu of any fractional shares shall be paid to any such holder
pursuant to Section 2.02(d), until the holder of such Certificate shall
surrender such Certificate.
(c) No Further Rights in Company Common Stock. All shares of Parent Common
Stock issued upon conversion of the Company Common Stock in accordance with the
terms hereof (including any cash paid pursuant to Section 2.02(b) or (d)) shall
be deemed to have been issued in full satisfaction of all rights pertaining to
such Company Common Stock.
(d) No Fractional Shares. No certificate or scrip representing fractional
shares of Parent Common Stock shall be issued upon the surrender for exchange of
Certificates, and such fractional share interests will not entitle the owner
thereof to vote or to any other rights of a shareholder of Parent. Each holder
of a fractional share interest shall be paid an amount in cash (without
interest) equal to the product obtained by multiplying (i) such fractional share
interest to which such holder (after taking into account all fractional share
interests then held by such holder) would otherwise be entitled by (ii) the
average of the per share closing prices on the OTC Bulletin Board (the "OTC") of
shares of Parent Common Stock during the 20 consecutive trading days ending on
(and including) the trading day immediately preceding the date of the Effective
Time. As promptly as practicable after the determination of the amount of cash,
if any, to be paid to holders of fractional share interests, the Parent shall
forward payments to such holders of fractional share interests subject to and in
accordance with the terms of Sections 2.02(b).
(e) No Liability. Neither Parent nor the Surviving Corporation shall be
liable to any holder of Shares for any such Shares (or dividends or
distributions with respect thereto), or cash delivered to a public official
pursuant to any abandoned property, escheat or similar Law.
(f) Withholding Rights. Each of the Surviving Corporation and Parent shall
be entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of Shares such amounts as it is
required to deduct and withhold with
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respect to the making of such payment under the Code, or any provision of state,
local or foreign tax law. To the extent that amounts are so withheld by the
Surviving Corporation or Parent, as the case may be, such withheld amounts shall
be treated for all purposes of this Agreement as having been paid to the holder
of Shares in respect of which such deduction and withholding was made by the
Surviving Corporation or Parent, as the case may be.
(g) Lost Certificates. If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and, if required by the
Surviving Corporation, the posting by such person of a bond, in such reasonable
amount as the Surviving Corporation may direct, as indemnity against any claim
that may be made against it with respect to such Certificate, the Parent will
issue in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration, any cash in lieu of fractional shares of Parent Common Stock to
which the holders thereof are entitled pursuant to Section 2.02(d) and any
dividends or other distributions to which the holders thereof are entitled
pursuant to Section 2.02(f).
SECTION 2.03. Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed and there shall be no further
registration of transfers of Shares thereafter on the records of the Company.
From and after the Effective Time, the holders of Certificates representing
Shares outstanding immediately prior to the Effective Time shall cease to have
any rights with respect to such Shares, except as otherwise provided in this
Agreement or by Law.
SECTION 2.04. Company Stock Options and Warrants. (a) All options and
warrants (the "Company Stock Options and Warrants") outstanding, whether or not
exercisable and whether or not vested, at the Effective Time, shall remain
outstanding following the Effective Time. At the Effective Time, the Company
Stock Options and Warrants shall, by virtue of the Merger and without any
further action on the part of the Company or the holder thereof, be assumed by
Parent in such manner that Parent (i) is a corporation "assuming a stock option
in a transaction to which Section 424(a) applies" within the meaning of Section
424 of the Code and the regulations thereunder or (ii) to the extent that
Section 424 of the Code does not apply to any such Company Stock Option and/or
Warrant, would be such a corporation were Section 424 of the Code applicable to
such Company Stock Option and/or Warrant. Each Company Stock Option and Warrant
assumed by Parent (each, a "Substitute Option and Warrant") shall be exercisable
upon the same terms and conditions as under the applicable option and/or warrant
agreement issued thereunder, except that (A) each such Substitute Option and
Warrant shall be exercisable for, and represent the right to acquire, that whole
number of shares of Parent Common Stock (rounded up or down to the nearest whole
share) equal to the number of shares of Company Common Stock subject to such
Company Stock Option and/or Warrant multiplied by the Exchange Ratio; and (B)
the option or warrant price per share of Parent Common Stock shall be an amount
equal to the option or warrant price per share of Company Common Stock subject
to such Company Stock Option and/or Warrant in effect immediately
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prior to the Effective Time divided by the Exchange Ratio (the option or warrant
price per share, as so determined, being rounded upward to the nearest full
cent).
(b) As soon as practicable after the Effective Time, Parent shall deliver
to each holder of an outstanding Company Stock Option and/or Warrant an
appropriate notice setting forth such holder's rights pursuant thereto and such
Company Stock Option and/or Warrant shall continue in effect on the same terms
and conditions (including any antidilution provisions, and subject to the
adjustments required by this Section 2.04 after giving effect to the Merger).
Parent shall comply with the terms of all such Company Stock Options and
Warrants and ensure that Company Stock Options and Warrants which qualified as
incentive stock options under Section 422 of the Code prior to the Effective
Time continue to qualify as incentive stock options after the Effective Time.
Parent shall take all corporate action necessary to reserve for issuance a
sufficient number of shares of Parent Common Stock for delivery upon exercise of
Substitute Options and/or Warrants pursuant to the terms set forth in this
Section 2.04. As soon as practicable, but in no event more than 5 business days,
after the Effective Time, the shares of Parent Common Stock subject to Company
Stock Options and Warrants will be covered by an effective registration
statement on Form S-8 (or any successor form) or another appropriate form, and
Parent shall use its reasonable efforts to maintain the effectiveness of such
registration statement or registration statements for so long as Substitute
Options and Warrants remain outstanding. In addition, Parent shall use all
reasonable efforts to cause the shares of Parent Common Stock subject to Company
Stock Options and Warrants to be listed on the OTC and such other exchanges as
Parent shall determine.
SECTION 2.05. Dissenting Shares. (a) Notwithstanding any provision of this
Agreement to the contrary, Dissenting Shares shall not be converted into or
represent a right to receive shares of the Merger Consideration pursuant to
Section 2.01, but the holder thereof shall only be entitled to such rights as
are granted by the General Corporation Law of the State of Delaware.
(b) Notwithstanding the provisions of subsection (a), if any holder of
Dissenting Shares shall effectively withdraw or lose (through failure to perfect
or otherwise) such holder's dissenters' rights, then, as of the later of
Effective Time or the occurrence of such event, such holder's shares shall
automatically be converted into and represent only the right to receive the
applicable shares of the Merger Consideration, without interest thereon, upon
surrender of the certificate or certificates representing such Dissenting
Shares.
(c) The Company shall give Parent (i) prompt notice of any written demands
received by the Company to require the Company to purchase shares of capital
stock of the Company, withdrawals of such demands, and any other instruments
served pursuant to the dissenters' rights provisions of the General Corporation
Law of the State of Delaware and received by the Company and (ii) the
opportunity to participate in all negotiations and proceedings with respect to
such demands. The Company shall not, except with the prior written
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consent of Parent, voluntarily make any payment with respect to any such demands
or offer to settle or settle any such demands.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Disclosure Schedule delivered by the Company to
the Parent and the Merger Sub concurrently with the execution of this Agreement
(the "Company Disclosure Schedule"), the Company hereby represents and warrants
to Parent and Merger Sub that:
SECTION 3.01. Organization and Qualification; Subsidiaries. Each of the
Company and each subsidiary of the Company (the "Company Subsidiaries") is a
corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has all requisite corporate
power and to own, lease and operate its properties and to carry on its business
as it is now being conducted, except where the failure to be so organized,
existing or in good standing or to have such corporate power, have not had, and
could not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect (as defined below). Each of the Company and the
Company Subsidiaries is duly qualified or licensed as a foreign corporation to
do business, and is in good standing, in each jurisdiction where the character
of the properties owned, leased or operated by it or the nature of its business
makes such qualification or licensing necessary, except for such failures to be
so qualified or licensed and in good standing that have not had, and could not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. The term "Company Material Adverse Effect" means any
change in or effect on the business of the Company and the Company Subsidiaries
that is materially adverse to the financial condition or results of operations
of the Company and the Company Subsidiaries taken as a whole, except for any
such changes or effects resulting from or arising in connection with (i) this
Agreement or the transactions contemplated by this Agreement or the announcement
hereof, (ii) any changes in economic, regulatory or political conditions or
(iii) any issue or condition otherwise known to Parent prior to the date of this
Agreement.
SECTION 3.02. Certificate of Incorporation and By-Laws. The Company has
heretofore made available to Parent a complete and correct copy of the
Certificate of Incorporation and the By-Laws of the Company. Such Certificate of
Incorporation and By-Laws are in full force and effect. The Company is not in
violation of any of the provisions of its Certificate of Incorporation or
By-Laws.
SECTION 3.03. Capitalization. The authorized capital stock of the Company
consists of (a) 50,000,000 shares of Company Common Stock and (b) 10,000,000
shares of preferred stock, par value $.01 per share. As of the date of this
Agreement, (i) 1,000 shares of
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Company Common Stock are issued and outstanding, all of which are validly
issued, fully paid and nonassessable and (ii) 5,750,000 shares are reserved for
future issuance pursuant to the Company Stock Options, Warrants and other
obligations to issue Shares. As of the date of this Agreement, 2,000,000 shares
of the Company Series A were issued and outstanding, all of which were validly
issued, fully paid and non-assessable. Except for the Company Stock Options and
Warrants, the issuance of shares of Company Common Stock upon the conversion of
the Company Series A, there are no options, warrants or other rights,
agreements, arrangements or commitments of any character relating to the issued
or unissued capital stock of the Company or any Company Subsidiary or obligating
the Company or any Company Subsidiary to issue or sell any shares of capital
stock of, or other equity interests in, the Company or any Company Subsidiary.
All shares of Company Common Stock subject to issuance as aforesaid, upon
issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, will be duly authorized, validly issued, fully paid and
nonassessable. There are no outstanding contractual obligations of the Company
or any Company Subsidiary to repurchase, redeem or otherwise acquire any shares
of Company Common Stock or any capital stock of any Company Subsidiary. Each
outstanding share of capital stock of each Company Subsidiary is duly
authorized, validly issued, fully paid and nonassessable and each such share
owned by the Company or another Company Subsidiary is free and clear of all
security interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on the Company's or such other Company Subsidiary's
voting rights, charges and other encumbrances of any nature whatsoever, except
where failure to own such shares free and clear would not, individually or in
the aggregate, have a Company Material Adverse Effect. There are no material
outstanding contractual obligations of the Company or any Company Subsidiary to
provide funds to, or make any investment (in the form of a loan, capital
contribution or otherwise) in, any Company Subsidiary or any other person.
SECTION 3.04. Authority Relative to This Agreement. The Company has all
necessary corporate power and authority to execute and deliver this Agreement
and to perform its obligations hereunder and to consummate the Merger and the
other transactions contemplated by this Agreement. The execution and delivery of
this Agreement by the Company and the consummation by the Company of the Merger
and the other transactions contemplated by this Agreement have been duly and
validly authorized by all necessary corporate action and no other corporate
proceedings on the part of the Company are necessary to authorize this Agreement
or to consummate the Merger and the other transactions contemplated by this
Agreement. This Agreement has been duly and validly executed and delivered by
the Company and, assuming the due authorization, execution and delivery by
Parent and Merger Sub, constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.
SECTION 3.05. No Conflict; Required Filings and Consents. (a) The execution
and delivery of this Agreement by the Company do not, and the performance of
this Agreement by the Company will not, (i) conflict with or violate the
Certificate of Incorporation or By-laws of the Company or any equivalent
organizational documents of any Company Subsidiary, (ii)
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assuming that all consents, approvals, authorizations and other actions
described in Section 3.05(b) have been obtained and all filings and obligations
described in Section 3.05(b) have been made, conflict with or violate any
foreign or domestic law, statute, ordinance, rule, regulation, order, judgment
or decree ("Law") applicable to the Company or any Company Subsidiary or by
which any property or asset of the Company or any Company Subsidiary is bound or
affected, or (iii) result in any breach of or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any right of termination, amendment, acceleration or cancellation
of, or result in the creation of a lien or other encumbrance on any property or
asset of the Company or any Company Subsidiary pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation, except, with respect to clause (iii), for any
such conflicts, violations, breaches, defaults or other occurrences that have
not had, and could not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, and that could not reasonably be
expected to prevent or materially delay the consummation of the transactions
contemplated by this Agreement.
(b) The execution and delivery of this Agreement by the Company do not, and
the performance of this Agreement by the Company will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
domestic or foreign governmental or regulatory authority ("Governmental
Entity"), except (i) for applicable requirements, if any, of state securities or
"blue sky" laws ("Blue Sky Laws"), state takeover laws, the filing and
recordation of appropriate merger documents as required by the DGCL and (ii)
where failure to obtain such consents, approvals, authorizations or permits, or
to make such filings or notifications, has not had, and could not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect, and could not reasonably be expected to prevent or materially delay the
consummation of the transactions contemplated by this Agreement.
SECTION 3.06. Permits; Compliance. (a) Each of the Company and the Company
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Entity necessary for the Company or any
Company Subsidiary to own, lease and operate its properties or to carry on its
business as it is now being conducted (the "Company Permits"), except where the
failure to have, or the suspension or cancellation of, any of the Company
Permits has not had, and could not reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect, and, as of the date of
this Agreement, no suspension or cancellation of any of the Company Permits is
pending or, to the knowledge of the Company, threatened, except where the
failure to have, or the suspension or cancellation of, any of the Company
Permits has not had, and could not reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect.
(b) Neither the Company nor any Company Subsidiary is in conflict with, or
in default or violation of, (i) any Law applicable to the Company or any Company
Subsidiary
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or by which any property or asset of the Company or any Company Subsidiary is
bound or affected, (ii) any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any Company Subsidiary is a party or by which the
Company or any Company Subsidiary or any property or asset of the Company or any
Company Subsidiary is bound or affected or (iii) any Company Permits, except, in
the case of each of (i), (ii) and (iii), for any such conflicts, defaults or
violations that have not had, and could not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.
SECTION 3.07. Absence of Certain Changes or Events. Since the date of its
organization, except as contemplated by or as disclosed in this Agreement, the
Company has conducted its businesses only in the ordinary course and in a manner
consistent with past practice and, since such date, there has not been (a) any
material change by the Company in its accounting methods, principles or
practices, (b) any declaration, setting aside or payment of any dividend or
distribution in respect of the Commons Stock or any redemption, purchase or
other acquisition of any of the Company's securities or (c) any increase in or
establishment of any bonus, insurance, severance, deferred compensation,
pension, retirement, profit sharing, stock option (including, without
limitation, the granting of stock options, stock appreciation rights,
performance awards or restricted stock awards), stock purchase or other employee
benefit plan, or any other increase in the compensation payable or to become
payable to any executive officers of the Company, except in the ordinary course
of business.
SECTION 3.08. Absence of Litigation. Except as set forth on Section 3.08 of
the Company Disclosure Schedule, as of the date of this Agreement, there is no
litigation, suit, claim, action, proceeding or investigation pending or, to the
knowledge of the Company, threatened against the Company, or any property or
asset of the Company, before any court, arbitrator or governmental entity,
domestic or foreign, which (i) has had, or could reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the Company or
(ii) seeks to delay or prevent the consummation of any other material
transaction contemplated by this Agreement. As of the date of this Agreement,
neither the Company nor any property or asset of the Company is subject to any
continuing order of, consent decree, settlement agreement or other similar
written agreement with, or, to the knowledge of the Company, continuing
investigation by, any governmental entity, or any order, writ, judgment,
injunction, decree, determination or award of any governmental entity or
arbitrator having, individually or in the aggregate, a material adverse effect
on the Company.
SECTION 3.09. Employee Benefit Plans; Labor Matters. With respect to each
employee benefit plan, program, arrangement and contract (including, without
limitation, any "employee benefit plan", as defined in section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
maintained or contributed to by the Company or any Company Subsidiary, or with
respect to which the Company or any Company Subsidiary could incur liability
under section 4069, 4212(c) or 4204 of ERISA (the "Company Benefit Plans"), the
Company has made available to the Parent a true and correct copy of (i) the most
recent annual
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report (Form 5500) filed with the Internal Revenue Service (the "IRS"), (ii) a
complete copy of such Company Benefit Plan, (iii) each trust agreement relating
to such Company Benefit Plan, (iv) the most recent summary plan description for
each Company Benefit Plan for which a summary plan description is required, (v)
the most recent actuarial report or valuation relating to a Company Benefit Plan
subject to Title IV of ERISA and (vi) the most recent determination letter, if
any, issued by the IRS with respect to any Company Benefit Plan qualified under
section 401(a) of the Code.
SECTION 3.10. Contracts. (a) Section 3.10(a) of the Company Disclosure
Schedule lists each of the following written contracts and agreements of the
Company (such contracts and agreements being "Material Contracts"):
(i) each contract and agreement for the purchase or lease of personal
property with any supplier or for the furnishing of services to the Company that
in each case involves annual payment in excess of $100,000;
(ii) all broker, exclusive dealing or exclusivity, distributor, dealer,
manufacturer's representative, franchise, agency, sales promotion and market
research agreements involving annual payments in excess of $200,000, to which
the Company is a party or any other material contract that compensates any
person other than employees based on any sales by the Company;
(iii) all leases and subleases of real property;
(iv) all contracts and agreements relating to indebtedness for borrowed
money other than trade indebtedness of the Company;
(v) all contracts and agreements involving annual payments in excess of
$100,000 with any Governmental Entity to which the Company is a party; and
(iv) any other material agreement of the Company which is terminable upon
or prohibits a change of ownership or control of the Company.
(b) Each Material Contract: (i) is valid and binding on the Company and, to
the knowledge of the Company, on the other parties thereto, and is in full force
and effect, and (ii) upon consummation of the transactions contemplated by this
Agreement, shall continue in full force and effect without material penalty or
other material adverse consequence. The Company is not in material breach of, or
material default under, any Material Contract and, to the knowledge of the
Company, no other party to any Material Contract is in material breach thereof
or material default thereunder.
SECTION 3.11. Environmental Matters. Except as would not, individually or
in the aggregate, have a Company Material Adverse Effect:
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(a) The Company and the Company Subsidiaries (i) are in compliance with all
applicable Environmental Laws (as defined below), (ii) hold all Environmental
Permits (as defined below) and (iii) are in compliance with their respective
Environmental Permits.
(b) None of the Company or any Company Subsidiary has received any written
request for information, or been notified that it is a potentially responsible
party, under CERCLA (defined below) or any similar Law of any state, locality or
any other jurisdiction.
(c) None of the Company or any Company Subsidiary has entered into or
agreed to any consent decree or order or is subject to any judgment, decree or
judicial order relating to compliance with Environmental Laws, Environmental
Permits or the investigation, sampling, monitoring, treatment, remediation,
removal or cleanup of Hazardous Materials (defined below) and, to the knowledge
of Company, no investigation, litigation or other proceeding is pending or
threatened in writing with respect thereto.
(d) None of the real property owned or leased by the Company or any Company
Subsidiary is listed or, to the knowledge of Company, proposed for listing on
the "National Priorities List" under CERCLA, as updated through the date of this
Agreement, or any similar list of sites in the United States or any other
jurisdiction requiring investigation or cleanup.
For purposes of this Agreement:
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended as of the date hereof.
"Environmental Laws" means any federal, state or local statute, law,
ordinance, regulation, rule, code or order of the United States, or any
other jurisdiction and any enforceable judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent decree or judgment, relating to pollution or protection of the
environment or natural resources, including, without limitation, those
relating to the use, handling, transportation, treatment, storage,
disposal, release or discharge of Hazardous Materials, as in effect as of
the date of this Agreement.
"Environmental Permits" means any permit, approval, identification
number, license and other authorization required under any applicable
Environmental Law.
"Hazardous Materials" means (a) any petroleum, petroleum products,
by-products or breakdown products, radioactive materials,
asbestos-containing materials or polychlorinated biphenyls or (b) any
chemical, material or substance defined or regulated as toxic or hazardous
or as a pollutant or contaminant or waste under any applicable
Environmental Law.
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SECTION 3.12. Trademarks, Patents and Copyrights. Except as would not,
individually or in the aggregate, have a Company Material Adverse Effect, the
Company and the Company Subsidiaries own or possess adequate licenses or other
valid rights to use all patents, patent rights, trademarks, trademark rights,
trade names, trade dress, trade name rights, copyrights, service marks, trade
secrets, applications for trademarks and for service marks, know-how and other
proprietary rights and information used or held for use in connection with the
business of the Company and the Company Subsidiaries as currently conducted, and
the Company has no knowledge of any assertion or claim challenging the validity
of any of the foregoing. To the knowledge of the Company, the conduct of the
business of the Company and the Company Subsidiaries as currently conducted does
not and will not conflict in any way with any patent, patent right, license,
trademark, trademark right, trade dress, trade name, trade name right, service
xxxx or copyright of any third party that has had, or could reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect. To the knowledge of the Company, there are no infringements of any
proprietary rights owned by or licensed by or to the Company or any Company
Subsidiary that have had, or could reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect.
SECTION 3.13. Taxes. Except as for such matters that could not reasonably
be expected to have a Company Material Adverse Effect, (a) the Company and each
of the Company Subsidiaries have timely filed or will timely file all returns
and reports required to be filed by them with any taxing authority with respect
to Taxes for any period ending on or before the Effective Time, taking into
account any extension of time to file granted to or obtained on behalf of the
Company and the Company Subsidiaries, (b) all Taxes shown to be payable on such
returns or reports that are due prior to the Effective Time have been paid or
will be paid, (c) as of the date of this Agreement, no deficiency for any
material amount of Tax has been asserted or assessed by a taxing authority
against the Company or any of the Company Subsidiaries and (d) the Company and
each of the Company Subsidiaries have provided adequate reserves in their
financial statements for any Taxes that have not been paid in accordance with
generally accepted accounting principles, whether or not shown as being due on
any returns. As used in this Agreement, "Taxes" shall mean any and all taxes,
fees, levies, duties, tariffs, imposts and other charges of any kind (together
with any and all interest, penalties, additions to tax and additional amounts
imposed with respect thereto) imposed by any government or taxing authority,
including, without limitation: taxes or other charges on or with respect to
income, franchises, windfall or other profits, gross receipts, property, sales,
use, capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation or net worth; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value added or gains taxes;
license, registration and documentation fees; and customers' duties, tariffs and
similar charges.
SECTION 3.14. State Takeover Statutes. The Board of Directors of the
Company has taken all action necessary to ensure that the restrictions on
business combinations contained in Section 203 of the DGCL will not apply to the
Merger and the other transactions
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contemplated by this Agreement. To the knowledge of the Company, no other state
takeover statute is applicable to the Merger or the other transactions
contemplated by this Agreement.
SECTION 3.15. Brokers. No broker, finder or investment banker (other than
Thomson Kernaghan & Co. Limited) is entitled to any brokerage, finder's or other
fee or commission in connection with the Merger or the other transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Except as set forth in the Disclosure Schedule delivered by Parent and
Merger Sub to the Company concurrently with the execution of this Agreement (the
"Parent Disclosure Schedule") and the Parent SEC Reports (as defined in Section
4.07), Parent and Merger Sub hereby jointly and severally represent and warrant
to the Company that:
SECTION 4.01. Organization and Qualification; Subsidiaries. Each of Parent
and each subsidiary of Parent (the "Parent Subsidiaries") is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all corporate requisite power and
authority and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted, except
where the failure to be so organized, existing or in good standing or to have
such corporate power, authority and governmental approvals have not had, and
could not reasonably be expected to have, individually or in the aggregate, a
Parent Material Adverse Effect (as defined below). Each of Parent and the Parent
Subsidiaries is duly qualified or licensed as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
the properties owned, leased or operated by it or the nature of its business
makes such qualification or licensing necessary, except for such failures to be
so qualified or licensed and in good standing that have not had, and could not
reasonably be expected to have, individually or in the aggregate, a Parent
Material Adverse Effect. The term "Parent Material Adverse Effect" means any
change in or effect on the business of Parent and the Parent Subsidiaries that
is materially adverse to the financial condition or results of operations of
Parent and the Parent Subsidiaries taken as a whole, except for any such changes
or effects resulting from or in connection with (i) this Agreement or the
transactions contemplated by this Agreement or the announcement hereof, (ii) any
changes in economic, regulatory or political conditions or (iii) any issue or
condition otherwise known to the Company prior to the date of this Agreement.
SECTION 4.02. Certificate of Incorporation and By-Laws. Parent has
heretofore made available to the Company a complete and correct copy of the
Certificate of Incorporation and the By-Laws of Parent and the Certificate of
Incorporation and By-Laws of Merger Sub. Such Certificates of Incorporation and
By-Laws are in full force and effect. Neither Parent nor
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Merger Sub is in violation of any of the provisions of its Certificate of
Incorporation or By-Laws.
SECTION 4.03. Capitalization. The authorized capital stock of Parent
consists of (a) 50,000,000 shares of Parent Common Stock and (b) 10,000,000
shares of preferred stock, par value $.001 per share (the "Parent Preferred
Stock"). As of the date of this Agreement, (i) 7,000,000 shares of the Parent
Common Stock are issued and outstanding, all of which are validly issued, fully
paid and non-assessable. Parent has filed with the Secretary of the State of
Delaware Certificates of Designation with respect to the New Series A with terms
substantially identical to the terms of the Company Series A, and Certificates
of Designation with respect to the New Series B with terms substantially
identical to the terms of the Company Series B. As of the date of this
Agreement, no shares of Parent Preferred Stock were issued and outstanding.
There are no options, warrants or other rights, agreements, arrangements or
commitments of any character relating to the issued or unissued capital stock of
Parent or any Parent Subsidiary or obligating Parent or any Parent Subsidiary to
issue or sell any shares of capital stock of, or other equity interests in,
Parent or any Parent Subsidiary. All shares of Parent Common Stock subject to
issuance as aforesaid, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and non-assessable. There are no outstanding
contractual obligations of Parent or any Parent Subsidiary to repurchase, redeem
or otherwise acquire any shares of Parent Common Stock or any capital stock of
any Parent Subsidiary. Immediately prior to the filing of this Agreement, Parent
intends to exercise a right to purchase for cancellation 4,000,000 Parent Common
Stock for $1.00. Each outstanding share of capital stock of each Parent
Subsidiary is duly authorized, validly issued, fully paid and non-assessable and
each such share owned by Parent or another Parent Subsidiary is free and clear
of all security interests, liens, claims, pledges, options, rights of first
refusal, agreements, limitations on Parent's or such other Parent Subsidiary's
voting rights, charges and other encumbrances of any nature whatsoever, except
where failure to own such shares free and clear would not, individually or in
the aggregate, have a Parent Material Adverse Effect. There are no material
outstanding contractual obligations of Parent or any Parent Subsidiary to
provide funds to, or make any investment (in the form of a loan, capital
contribution or otherwise) in, any Parent Subsidiary or any other person. The
authorized capital stock of Merger Sub consists of 1,000 shares of common stock,
par value $.001 per share, all of which are duly authorized, validly issued,
fully paid and non-assessable and free of any preemptive rights in respect
thereof and all of which are owned by Parent. The shares of Parent Common Stock
to be issued pursuant to the Merger in accordance with Section 2.01 (i) will be
duly authorized, validly issued, fully paid and non-assessable and not subject
to preemptive rights created by statute, the Parent's Certificate of
Incorporation or By-Laws or any agreement to which the Parent is a party or is
bound and (ii) will, when issued, be exempt from registration under the
Securities Act and the Securities Exchange Act of 1934, as amended (together
with the rules and regulations promulgated thereunder, the "Exchange Act") and
exempt from registration under applicable Blue Sky Laws.
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SECTION 4.04. Authority Relative to This Agreement. Each of Parent and
Merger Sub has all necessary corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the Merger and the other transactions contemplated by this Agreement.
The execution and delivery of this Agreement by each of Parent and Merger Sub
and the consummation by each of Parent and Merger Sub of the Merger and the
other transactions contemplated by this Agreement have been duly and validly
authorized by all necessary corporate action and no other corporate proceedings
on the part of Parent are necessary to authorize this Agreement or to consummate
the Merger and the other transactions contemplated by this Agreement. This
Agreement has been duly and validly executed and delivered by each of Parent and
Merger Sub and, assuming the due authorization, execution and delivery by the
Company, constitutes a legal, valid and binding obligation of each of Parent and
Merger Sub, enforceable against each of Parent and Merger Sub in accordance with
its terms.
SECTION 4.05. No Conflict; Required Filings and Consents. (a) The execution
and delivery of this Agreement by each of Parent and Merger Sub do not, and the
performance of this Agreement by each of Parent and Merger Sub will not, (i)
conflict with or violate the Certificate of Incorporation or By-laws of Parent
or any equivalent organizational documents of Merger Sub or any other Parent
Subsidiary, (ii) assuming that all consents, approvals, authorizations and other
actions described in Section 4.05(b) have been obtained and all filings and
obligations described in Section 4.05(b) have been made, conflict with or
violate any Law applicable to Parent or any Parent Subsidiary or by which any
property or asset of Parent or any Parent Subsidiary is bound or affected, or
(iii) result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any right of termination, amendment, acceleration or cancellation of, or result
in the creation of a lien or other encumbrance on any property or asset of
Parent or any Parent Subsidiary pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation, except, with respect to clause (iii), for any such
conflicts, violations, breaches, defaults, or other occurrences that have not
had, and could not reasonably be expected to have, individually or in the
aggregate, a Parent Material Adverse Effect, and that could not reasonably be
expected to prevent or materially delay the consummation of the transactions
contemplated by this Agreement.
(b) The execution and delivery of this Agreement by each of Parent and
Merger Sub do not, and the performance of this Agreement by each of Parent and
Merger Sub will not, require any consent, approval, authorization or permit of,
or filing with or notification to, any Governmental Entity, except (i) for
applicable requirements, if any, of the Exchange Act, Blue Sky Laws, the
Securities Act, the OTC, state takeover laws, the filing and recordation of
appropriate merger documents as required by the DGCL and (ii) where failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, has not had, and could not reasonably be expected to
have, individually or in the aggregate, a Parent Material Adverse Effect, and
could not reasonably be expected to prevent or materially delay the consummation
of the transactions contemplated by this Agreement
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SECTION 4.06. Permits; Compliance. (a) Each of Parent and the Parent
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Entity necessary for Parent or any
Parent Subsidiary to own, lease and operate its properties or to carry on its
business as it is now being conducted (the "Parent Permits"), except where the
failure to have, or the suspension or cancellation of, any of Parent Permits has
not had, and could not reasonably be expected to have, individually or in the
aggregate, a Parent Material Adverse Effect, and, as of the date of this
Agreement, no suspension or cancellation of any of Parent Permits is pending or,
to the knowledge of Parent, threatened, except where the failure to have, or the
suspension or cancellation of, any of Parent Permits has not had, and could not
reasonably be expected to have, individually or in the aggregate, a Parent
Material Adverse Effect.
(b) Neither Parent nor any Parent Subsidiary is in conflict with, or in
default or violation of, (i) any Law applicable to Parent or any Parent
Subsidiary or by which any property or asset of Parent or any Parent Subsidiary
is bound or affected, (ii) any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which Parent or any Parent Subsidiary is a party or by which Parent or any
Parent Subsidiary or any property or asset of Parent or any Parent Subsidiary is
bound or affected or (iii) any Parent Permits, except, in the case of each of
(i), (ii) and (iii), for any such conflicts, defaults or violations that have
not had, and could not reasonably be expected to have, individually or in the
aggregate, a Parent Material Adverse Effect.
SECTION 4.07. SEC Filings; Financial Statements. (a) Parent has filed all
forms, reports and documents required to be filed by it with the SEC since
January 1, 1999 through the date of this Agreement (collectively, the "Parent
SEC Reports"), and Parent has made available to the Company true and correct
copies of the Parent SEC Reports. As of the respective dates they were filed,
(i) the Parent SEC Reports were prepared, and all forms, reports and documents
filed with the SEC after the date of this Agreement and prior to the Effective
Time will be prepared, in all material respects in accordance with the
requirements of the Securities Act, or the Exchange Act, as the case may be, and
(ii) none of the Parent SEC Reports contained, nor will any forms, reports and
documents filed after the date of this Agreement and prior to the Effective Time
contain, any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading. No Parent Subsidiary is required to file any form, report or other
document with the SEC.
(b) Each of the consolidated financial statements (including, in each case,
any notes thereto) contained in the Parent SEC Reports and in any form, report
or document filed after the date of this Agreement and prior to the Effective
Time was, or will be, as the case may be, prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods indicated (except as may be indicated in the notes thereto or, in the
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case of unaudited statements, as permitted by Form 10-Q of the SEC) and each
presented or will present fairly the consolidated financial position of Parent
and the consolidated Parent Subsidiaries as at the respective dates thereof and
for the respective periods indicated therein, except as otherwise noted therein
(subject, in the case of unaudited statements, to normal and recurring year-end
adjustments which were not and are not expected, individually or in the
aggregate, to have a Parent Material Adverse Effect).
SECTION 4.08. Absence of Certain Changes or Events. Since January 1, 1999,
organization, except as contemplated by or as disclosed in this Agreement, or as
disclosed in any Parent SEC Report filed since January 1, 1999, Parent and
Parent Subsidiaries have conducted their businesses only in the ordinary course
and in a manner consistent with past practice and, since such date, there has
not been (a) any Parent Material Adverse Effect, (b) any material change by
Parent in its accounting methods, principles or practices, (c) any declaration,
setting aside or payment of any dividend or distribution in respect of the
Shares or any redemption, purchase or other acquisition of any of Parent's
securities or (d) any increase in or establishment of any bonus, insurance,
severance, deferred compensation, pension, retirement, profit sharing, stock
option (including, without limitation, the granting of stock options, stock
appreciation rights, performance awards or restricted stock awards), stock
purchase or other employee benefit plan, or any other increase in the
compensation payable or to become payable to any executive officers of Parent or
any Parent Subsidiary, except in the ordinary course of business consistent with
past practice.
SECTION 4.09. Absence of Litigation. As of the date of this Agreement,
there is no litigation, suit, claim, action, proceeding or investigation pending
or, to the knowledge of Parent, threatened against Parent or any Parent
Subsidiary, or any property or asset of Parent or any Parent Subsidiary, before
any court, arbitrator or Governmental Entity, domestic or foreign, which (i) has
had, or could reasonably be expected to have, individually or in the aggregate,
a Parent Material Adverse Effect or (ii) seeks to delay or prevent the
consummation of the Merger or any other material transaction contemplated by
this Agreement. As of the date of this Agreement, neither Parent nor any Parent
Subsidiary nor any property or asset of Parent or any Parent Subsidiary is
subject to any continuing order of, consent decree, settlement agreement or
other similar written agreement with, or, to the knowledge of Parent, continuing
investigation by, any Governmental Entity, or any order, writ, judgment,
injunction, decree, determination or award of any Governmental Entity or
arbitrator having, individually or in the aggregate, a Parent Material Adverse
Effect.
SECTION 4.10. Employee Benefit Plans. Parent and Parent Subsidiary
presently do not have, and have never had, any employees. Parent and Parent
Subsidiary presently do not, and have never in the past, maintained or
contributed to any employee benefit plan, program, arrangement and contract
(including, without limitation, any "employee benefit plan", as defined in
section 3(3) of ERISA).
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SECTION 4.11. Contracts. (a) Section 4.11(a) of the Parent Disclosure
Schedule lists each of the following written contracts and agreements of Parent
(such contracts and agreements being "Material Contracts"):
(i) each contract and agreement for the purchase or lease of personal
property with any supplier or for the furnishing of services to Parent that in
each case involves annual payment in excess of $100,000;
(ii) all broker, exclusive dealing or exclusivity, distributor, dealer,
manufacturer's representative, franchise, agency, sales promotion and market
research agreements involving annual payments in excess of $200,000, to which
Parent is a party or any other material contract that compensates any person
other than employees based on any sales by Parent;
(iii) all leases and subleases of real property;
(iv) all contracts and agreements relating to indebtedness for borrowed
money other than trade indebtedness of Parent;
(v) all contracts and agreements involving annual payments in excess of
$100,000 with any Governmental Entity to which Parent is a party; and
(iv) any other material agreement of Parent which is terminable upon or
prohibits a change of ownership or control of Parent.
(b) Each Material Contract: (i) is valid and binding on Parent and, to the
knowledge of Parent, on the other parties thereto, and is in full force and
effect, and (ii) upon consummation of the transactions contemplated by this
Agreement, shall continue in full force and effect without material penalty or
other material adverse consequence. Parent is not in material breach of, or
material default under, any Material Contract and, to the knowledge of Parent,
no other party to any Material Contract is in material breach thereof or
material default thereunder.
SECTION 4.12. Environmental Matters. Except as disclosed in the Parent SEC
Reports or as would not, individually or in the aggregate, have a Parent
Material Adverse Effect:
(a) Parent and the Parent Subsidiaries (i) are in compliance with all
applicable Environmental Laws, (ii) hold all Environmental Permits and (iii) are
in compliance with their respective Environmental Permits.
(b) None of Parent or any Parent Subsidiary has received any written
request for information, or been notified that it is a potentially responsible
party, under CERCLA or any similar Law of any state, locality or any other
jurisdiction.
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(c) None of Parent or any Parent Subsidiary has entered into or agreed to
any consent decree or order or is subject to any judgment, decree or judicial
order relating to compliance with Environmental Laws, Environmental Permits or
the investigation, sampling, monitoring, treatment, remediation, removal or
cleanup of Hazardous Materials and, to the knowledge of Parent, no
investigation, litigation or other proceeding is pending or threatened in
writing with respect thereto.
(d) None of the real property owned or leased by Parent or any Parent
Subsidiary is listed or, to the knowledge of Parent, proposed for listing on the
"National Priorities List" under CERCLA, as updated through the date of this
Agreement, or any similar list of sites in the United States or any other
jurisdiction requiring investigation or cleanup.
SECTION 4.13. Trademarks, Patents and Copyrights. Except as would not,
individually or in the aggregate, have a Parent Material Adverse Effect, Parent
and the Parent Subsidiaries own or possess adequate licenses or other valid
rights to use all patents, patent rights, trademarks, trademark rights, trade
names, trade dress, trade name rights, copyrights, service marks, trade secrets,
applications for trademarks and for service marks, know-how and other
proprietary rights and information used or held for use in connection with the
business of Parent and the Parent Subsidiaries as currently conducted, and
Parent has no knowledge of any assertion or claim challenging the validity of
any of the foregoing. To the knowledge of Parent, the conduct of the business of
Parent and the Parent Subsidiaries as currently conducted does not and will not
conflict in any way with any patent, patent right, license, trademark, trademark
right, trade dress, trade name, trade name right, service xxxx or copyright of
any third party that has had, or could reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect. To the
knowledge of Parent, there are no infringements of any proprietary rights owned
by or licensed by or to Parent or any Parent Subsidiary that have had, or could
reasonably be expected to have, individually or in the aggregate, a Parent
Material Adverse Effect.
SECTION 4.14. Taxes. Except for such matters that would not have a Parent
Material Adverse Effect, (a) Parent and each of the Parent Subsidiaries have
timely filed or will timely file all returns and reports required to be filed by
them with any taxing authority with respect to Taxes for any period ending on or
before the Effective Time, taking into account any extension of time to file
granted to or obtained on behalf of Parent and the Parent Subsidiaries, (b) all
Taxes shown to be payable on such returns or reports that are due prior to the
Effective Time have been paid or will be paid, (c) as of the date of this
Agreement, no deficiency for any material amount of Tax has been asserted or
assessed by a taxing authority against Parent or any of the Parent Subsidiaries
and (d) Parent and each of the Parent Subsidiaries have provided adequate
reserves in their financial statements for any Taxes that have not been paid in
accordance with generally accepted accounting principles, whether or not shown
as being due on any returns.
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SECTION 4.15. Operations of Merger Sub. Merger Sub is a direct, wholly
owned subsidiary of Parent, was formed solely for the purpose of engaging in the
transactions contemplated by this Agreement, has engaged in no other business
activities and has conducted its operations only as contemplated by this
Agreement.
SECTION 4.16. Accounting and Tax Matters. To the knowledge of Parent,
neither Parent nor any of its affiliates has taken or agreed to take any action
that would prevent the Merger from constituting a transaction qualifying under
Section 368(a) of the Code. Parent is not aware of any agreement, plan or other
circumstance that would prevent the Merger from qualifying under Section 368(a)
of the Code.
SECTION 4.17. Brokers. No broker, finder or investment banker (other than
Thomson Kernaghan & Co. Limited is entitled to any brokerage, finder's or other
fee or commission in connection with the Merger or the other transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Parent.
ARTICLE V
CONDUCT OF BUSINESSES PENDING THE MERGER
SECTION 5.01. Conduct of Business by the Company Pending the Merger. The
Company agrees that, between the date of this Agreement and the Effective Time,
except as contemplated by any other provision of this Agreement, unless Parent
shall otherwise consent in writing:
(i) the businesses of the Company and the Company Subsidiaries shall
be conducted only in, and the Company and the Company Subsidiaries shall
not take any action except in, the ordinary course of business and in a
manner consistent with past practice; and
(ii) the Company shall use its reasonable best efforts to preserve
substantially intact its business organization, to keep available the
services of the current officers, employees and consultants of the Company
and the Company Subsidiaries and to preserve the current relationships of
the Company and the Company Subsidiaries with customers, suppliers and
other persons with which the Company or any Company Subsidiary has
significant business relations.
By way of amplification and not limitation, except as contemplated by this
Agreement, neither the Company nor any Company Subsidiary shall, between the
date of this Agreement and the Effective Time, directly or indirectly, do, or
propose to do, any of the following without the prior written consent of Parent:
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(a) amend or otherwise change its Certificate of Incorporation or By-Laws
or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, encumber, or authorize the
issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of
its capital stock of any class, or any options, warrants, convertible securities
or other rights of any kind to acquire any shares of such capital stock, or any
other ownership interest (including, without limitation, any phantom interest),
of the Company or any Company Subsidiary (except for the issuance of shares of
Company Common Stock issuable pursuant to the Company Stock Options and Warrants
outstanding on the date of this Agreement or the issuance in the ordinary course
of business and consistent with past practice) or (ii) any material assets of
the Company or any Company Subsidiary, except in the ordinary course of business
and in a manner consistent with past practice;
(c) declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to any of its
capital stock;
(d) reclassify, combine, split, subdivide or redeem, purchase or otherwise
acquire, directly or indirectly, any of its capital stock;
(e) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any interest in any
corporation, partnership, other business organization or any division
thereof or any assets, other than acquisitions of assets in the ordinary
course of business consistent with past practice;
(ii) incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for, the obligations of any person, or
make any loans or advances, except for indebtedness incurred in the
ordinary course of business and consistent with past practice;
(iii) enter into any contract or agreement material to the business,
results of operations or financial condition of the Company and the Company
Subsidiaries taken as a whole other than in the ordinary course of
business, consistent with past practice; or
(iv) enter into or amend any contract, agreement, commitment or
arrangement that, if fully performed, would not be permitted under this
Section 5.01(e);
(f) increase the compensation payable or to become payable to its
employees, except for increases in accordance with past practices, or grant any
severance or termination pay to, or enter into any employment or severance
agreement with, any director or employee of the
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Company or any Company Subsidiary, except for employment or severance agreements
in accordance with past practice, or establish, adopt, enter into or amend any
collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund, policy
or arrangement for the benefit of any director or employee; or
(g) take any action, other than reasonable and usual actions in the
ordinary course of business and consistent with past practice, with respect to
accounting policies or procedures.
SECTION 5.02. Conduct of Business by Parent Pending the Merger. Parent
agrees that, between the date of this Agreement and the Effective Time, except
as contemplated by any other provision of this Agreement, unless the Company
shall otherwise consent in writing (such consent not to be unreasonably withheld
or delayed):
(i) the business of the Parent and the Parent Subsidiaries shall be
conducted only in, and Parent and the Parent Subsidiaries shall not take
any action except in the ordinary course of business and in a manner
consistent with past practice; and
(ii) Parent shall use its reasonable best efforts to preserve
substantially intact its business organization, to keep available the
services of the current officers, employees and consultants of Parent and
the Parent Subsidiaries and to preserve the current relationships of Parent
and the Parent Subsidiaries with customers, suppliers and other persons
with which Parent or any Parent Subsidiary has significant business
relations.
By way of amplification and not limitation, except as contemplated by this
Agreement, neither Parent nor any Parent Subsidiary shall, between the date of
this Agreement and the Effective Time, directly or indirectly, do, or propose to
do, any of the following without the prior written consent of the Company (such
consent not to be unreasonably withheld):
(a) amend or otherwise change its Certificate of Incorporation or By-Laws
or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, encumber, or authorize the
issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of
its capital stock of any class, or any options, warrants, convertible securities
or other rights of any kind to acquire any shares of such capital stock, or any
other ownership interest (including, without limitation, any phantom interest),
of Parent or any Parent Subsidiary (except for the issuance of shares of Parent
Common Stock issuable pursuant to the Parent Stock Options outstanding on the
date of this Agreement or the issuance in the ordinary course of business and
consistent with past practice, or (ii) any material assets of Parent or any
Parent Subsidiary, except in the ordinary course of business and in a manner
consistent with past practice;
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(c) declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to any of its
capital stock;
(d) reclassify, combine, split, subdivide or redeem, purchase or otherwise
acquire, directly or indirectly, any of its capital stock;
(e) (i) acquire (including, without limitation, by merger, consolidation,
or acquisition of stock or assets) any interest in any corporation,
partnership, other business organization or any division thereof or any
assets, other than acquisitions of assets in the ordinary course of
business consistent with past practice;
(ii) incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for, the obligations of any person, or
make any loans or advances, except for indebtedness incurred in the
ordinary course of business and consistent with past practice;
(iii) enter into any contract or agreement material to the business,
results of operations or financial condition of Parent and the Parent
Subsidiaries taken as a whole other than in the ordinary course of
business, consistent with past practice; or
(iv) enter into or amend any contract, agreement, commitment or
arrangement that, if fully performed, would not be permitted under this
Section 5.02(e);
(f) increase the compensation payable or to become payable to its officers
or employees, except for increases in accordance with past practices in salaries
or wages of employees of Parent or any Parent Subsidiary who are not officers of
Parent, or grant any severance or termination pay to, or enter into any
employment or severance agreement with, any director, officer or other employee
of Parent or any Parent Subsidiary, or establish, adopt, enter into or amend any
collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund, policy
or arrangement for the benefit of any director, officer or employee; or
(g) take any action, other than reasonable and usual actions in the
ordinary course of business and consistent with past practice, with respect to
accounting policies or procedures.
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ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Registration Rights. Parent agrees to assume all obligations
of the Company pursuant to the several registration rights agreements between
the Company and the shareholders of the Company, including the payment of any
liquidated damages thereunder.
SECTION 6.02. Merger between Parent and Surviving Corporation. Immediately
upon the Effective Date, the parties agree to cause Surviving Corporation to
merge with and into Parent, and the surviving entity shall be called "CMeRun
Corp." The Certificate of Incorporation, Certificates of Designation of
Preferred Stock and ByLaws of the Parent shall be respectively the Certificate
of Incorporation, Certificates of Designation of Preferred Stock and the Bylaws
of the corporation surviving the merger of Surviving Corporation with and into
Parent.
SECTION 6.03. Access to Information; Confidentiality. Except as required
pursuant to any confidentiality agreement or similar agreement or arrangement to
which Parent or the Company or any of their respective subsidiaries is a party
or pursuant to applicable Law, from the date of this Agreement to the Effective
Time, Parent and the Company shall (and shall cause their respective
subsidiaries to): (i) provide to the other (and its officers, directors,
employees, accountants, consultants, legal counsel, agents and other
representatives, collectively, "Representatives") access at reasonable times
upon prior notice to the officers, employees, agents, properties, offices and
other facilities of the other and its subsidiaries and to the books and records
thereof and (ii) furnish promptly such information concerning the business,
properties, contracts, assets, liabilities, personnel and other aspects of the
other party and its subsidiaries as the other party or its Representatives may
reasonably request.
SECTION 6.04. Obligations of Merger Sub. Parent shall take all action
necessary to cause Merger Sub to perform its obligations under this Agreement
and to consummate the Merger on the terms and subject to the conditions set
forth in this Agreement.
SECTION 6.05. Further Action; Consents; Filings. Upon the terms and subject
to the conditions hereof, each of the parties hereto shall use its reasonable
best efforts to (i) take, or cause to be taken, all appropriate action and do,
or cause to be done, all things necessary, proper or advisable under applicable
law or otherwise to consummate and make effective the Merger and the other
transactions contemplated by this Agreement (including, but without limitation,
those as may be required by (A) the regulations promulgated under the Securities
Act, as amended, or the Exchange Act, as amended, (B) under the rules of the
National Association of Securities Dealers, Inc., or (C) by the securities or
blue sky laws of the various states), (ii) obtain from Governmental Entities any
consents, licenses, permits, waivers, approvals, authorizations or orders
required to be obtained or made by Parent or the Company or any of their
subsidiaries in connection with the authorization, execution and delivery of
this Agreement and the
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consummation of the Merger and the other transactions contemplated by this
Agreement and (iii) make all necessary filings, and thereafter make any other
required submissions, with respect to this Agreement, the Merger and the other
transactions contemplated by this Agreement required under (A) the Exchange Act
and the Securities Act and the rules and regulations thereunder and any other
applicable federal or state securities laws and (B) any other applicable Law.
The parties hereto shall cooperate with each other in connection with the making
of all such filings, including by providing copies of all such documents to the
nonfiling party and its advisors prior to filing and, if requested, by accepting
all reasonable additions, deletions or changes suggested in connection
therewith.
SECTION 6.06. Plan of Reorganization. This Agreement is intended to
constitute a "plan of reorganization" within the meaning of section 1.368-2(g)
of the income tax regulations promulgated under the Code. From and after the
date of this Agreement and until the Effective Time, each party hereto shall use
its reasonable best efforts to cause the Merger to qualify, and will not
knowingly take any action, cause any action to be taken, fail to take any action
or cause any action to fail to be taken which action or failure to act could
prevent the Merger from qualifying, as a reorganization under the provisions of
section 368(a) of the Code. Following the Effective Time, neither the Surviving
Corporation, Parent nor any of their affiliates shall knowingly take any action,
cause any action to be taken, fail to take any action or cause any action to
fail to be taken, which action or failure to act could cause the Merger to fail
to qualify as a reorganization under section 368(a) of the Code.
SECTION 6.07. Public Announcements. The initial press release relating to
this Agreement shall be a joint press release the text of which has been agreed
to by each of Parent and the Company.
SECTION 6.08. Parent Board of Directors. Parent shall take all necessary
action to cause Xxxxxxx Xxxxx to be appointed to the Board of Directors of
Parent as of the Effective Time, to serve until the next annual election of
directors of Parent. In connection with such election, Parent shall take all
necessary action to include Xxxxxxx Xxxxx as a nominee for the Board of
Directors of Parent recommended by such Board of Directors for election by
Parent's shareholders to the Board.
SECTION 6.09. Conveyance Taxes. Parent shall be liable for and shall hold
the Company and the holders of Shares who are holders of the Shares immediately
prior to the Effective Time harmless against any real property transfer or
gains, sales, use, transfer, value added, stock transfer or stamp taxes, any
transfer, recording registration, and other fees, and any similar Taxes which
become payable in connection with the transactions contemplated by this
Agreement. The parties acknowledge that this Section 6.08 is specifically
intended to benefit the holders of Shares who are holders of the Shares
immediately prior to the Effective Time.
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ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. Conditions to the Obligations of Each Party. The obligations
of the Company, Parent and Merger Sub to consummate the Merger are subject to
the satisfaction or waiver (where permissible) of the following conditions:
(a) this Agreement and the issuance of the Merger Consideration pursuant to
the terms of the Merger, as the case may be, contemplated hereby shall have been
approved and adopted by the requisite affirmative vote of (i) the shareholders
of the Company in accordance with the DGCL and the Company's Certificate of
Incorporation and (ii) the shareholders of Parent in accordance with the rules
of the OTC, the DGCL and Parent's Certificate of Incorporation;
(b) no Governmental Entity or court of competent jurisdiction located or
having jurisdiction in the United States shall have enacted, issued,
promulgated, enforced or entered any law, rule, regulation, judgment, decree,
executive order or award (an "Order") which is then in effect and has the effect
of making the Merger illegal or otherwise prohibiting consummation of the
Merger;
(c) all consents, approvals and authorizations legally required to be
obtained to consummate the Merger shall have been obtained from and made with
all Governmental Entities; and
(d) the Merger Consideration to be issued in the Merger shall have been
authorized for listing on the OTC, subject to official notice of issuance.
SECTION 7.02. Conditions to the Obligations of Parent and Merger Sub. The
obligations of Parent and Merger Sub to consummate the Merger are subject to the
satisfaction or waiver (where permissible) of the following additional
conditions:
(a) each of the representations and warranties of the Company contained in
this Agreement shall be true and correct as of the Effective Time as though made
on and as of the Effective Time, except where failure to be so true and correct
would not have a Company Material Adverse Effect, and except that those
representations and warranties which address matters only as of a particular
date shall remain true and correct as of such date, except where failure to be
so true and correct would not have a Company Material Adverse Effect, and Parent
shall have received a certificate of the Chief Executive Officer or Chief
Financial Officer of the Company to such effect;
(b) the Company shall have performed or complied with all agreements and
covenants required by this Agreement to be performed or complied with by it on
or prior to the
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Effective Time, except where the failure to so comply would not have a Company
Material Adverse Effect, and Parent shall have received a certificate of the
Chief Executive Officer or Chief Financial Officer of the Company to that
effect; and
(c) Parent shall have received the opinion of Shearman & Sterling, counsel
to the Company.
SECTION 7.03. Conditions to the Obligations of the Company. The obligations
of the Company to consummate the Merger are subject to the satisfaction or
waiver (where permissible) of the following additional conditions:
(a) each of the representations and warranties of Parent and Merger Sub
contained in this Agreement shall be true and correct as of the Effective Time,
as though made on and as of the Effective Time, except where the failure to be
so true and correct would not have a Parent Material Adverse Effect, and except
that those representations and warranties which address matters only as of a
particular date shall remain true and correct as of such date, except where the
failure to be so true and correct would not have a Parent Material Adverse
Effect, and the Company shall have received a certificate of the Chief Executive
Officer or Chief Financial Officer of Parent to such effect;
(b) Parent and Merger Sub shall have performed or complied with all
agreements and covenants required by this Agreement to be performed or complied
with by it on or prior to the Effective Time, except where the failure to comply
would not have a Parent Material Adverse Effect, and the Company shall have
received a certificate of the Chief Executive Officer or Chief Financial Officer
of Parent to that effect;
(c) Parent shall have completed the cancellation of 4,000,000 of its common
shares pursuant to a share cancellation agreement;
(d) V C Advantage Limited Partnership shall have invested $6,999,999.00 in
the Company;
(e) Parent shall have entered into an appropriate agreement obligating the
Surviving Corporation to initiate a takeover bid for CMeRun (Alberta) Ltd. in
Alberta, Canada in accordance with the terms set forth in the acquisition
agreement by and between the Company and CMeRun (Alberta) Ltd.;
(f) The stockholders of Parent shall have entered into acquisition
agreements with C Me Run Alberta and lock-up agreements with shareholders of C
Me Run Alberta, each of which is reasonably satisfactory to the Company;
(g) The Company shall have received an officer's certificate, in a form
reasonably satisfactory to the Company, from an officer of Parent; and
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(h) The Company shall have received the opinion of Xxxxxx Xxxxxxxx, Esq.,
counsel to Parent.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination. This Agreement may be terminated and the Merger
and the other transactions contemplated by this Agreement may be abandoned at
any time prior to the Effective Time, notwithstanding any requisite approval and
adoption of this Agreement and the transactions contemplated by this Agreement,
as follows:
(a) by mutual written consent duly authorized by the Boards of Directors of
each of Parent and the Company;
(b) by either Parent or the Company if the Effective Time shall not have
occurred on or before April 30, 2000; provided, however, that the right to
terminate this Agreement under this Section 8.01(b) shall not be available to
any party whose failure to fulfill any obligation under this Agreement has been
the cause of, or resulted in, the failure of the Effective Time to occur on or
before such date;
(c) there shall be any Order which is final and nonappealable preventing
the consummation of the Merger;
(d) by Parent upon a breach of any material representation, warranty,
covenant or agreement on the part of the Company set forth in this Agreement, or
if any representation or warranty of the Company shall have become untrue, in
either case such that the conditions set forth in Section 7.02(a) and Section
7.02(b) would not be satisfied ("Terminating Company Breach"); provided,
however, that, if such Terminating Company Breach is curable by the Company
through the exercise of its best efforts and for so long as the Company
continues to exercise such best efforts, Parent may not terminate this Agreement
under this Section 8.01(d).
SECTION 8.02. Effect of Termination. Except as provided in Section 9.01, in
the event of termination of this Agreement pursuant to Section 8.01, this
Agreement shall forthwith become void, there shall be no liability under this
Agreement on the part of Parent, Merger Sub or the Company or any of their
respective officers or directors, and all rights and obligations of each party
hereto shall cease, provided, however, that nothing herein shall relieve any
party from liability for the willful breach of any of its representations,
warranties, covenants or agreements set forth in this Agreement.
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SECTION 8.03. Amendment. This Agreement may be amended by the parties
hereto by action taken by or on behalf of their respective Boards of Directors
at any time prior to the Effective Time; provided, however, that, after the
approval of this Agreement by the shareholders of the Company, no amendment may
be made which would reduce the amount or change the type of consideration into
which each Share shall be converted upon consummation of the Merger. This
Agreement may not be amended except by an instrument in writing signed by the
parties hereto.
SECTION 8.04. Waiver. At any time prior to the Effective Time, any party
hereto may (a) extend the time for the performance of any obligation or other
act of any other party hereto, (b) waive any inaccuracy in the representations
and warranties contained herein or in any document delivered pursuant hereto,
and (c) waive compliance with any agreement or condition contained herein. Any
such extension or waiver shall be valid if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
SECTION 8.05. Expenses. All Expenses (as defined below) incurred in
connection with this Agreement and the transactions contemplated by this
Agreement shall be paid by the party incurring such expenses, whether or not the
Merger or any other transaction is consummated. "Expenses" as used in this
Agreement shall include all reasonable out-of-pocket expenses (including,
without limitation, all fees and expenses of counsel, accountants, investment
bankers, experts and consultants to a party hereto and its affiliates) incurred
by a party or on its behalf in connection with or related to the authorization,
preparation, negotiation, execution and performance of this Agreement and all
other matters related to the closing of the Merger and the other transactions
contemplated by this Agreement.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations, Warranties and Agreements.
The representations, warranties and agreements in this Agreement and in any
certificate delivered pursuant hereto shall terminate at the Effective Time or
upon the termination of this Agreement pursuant to Section 8.01, as the case may
be, except that the agreements set forth in Articles I and II and Sections 6.03,
6.04, 6.06 and this Article IX shall survive the Effective Time and those set
forth in Sections 8.02 and 8.05 and this Article IX shall survive termination.
SECTION 9.02. 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 cable,
telecopy, facsimile, telegram or telex or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 9.02):
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if to Parent or Merger Sub:
Fundae Acquisition Corporation
000 Xxxxxxx Xxx., Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: A. Xxxx Xxxxxxx, Xx., President
Fax: (000) 000-0000
with a copy to (which shall not constitute notice to such party):
Xxxxxx X. Xxxxxxxx, Xx., Esq.
Sonfield & Sonfield
000 Xxxxx Xxxx Xxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Fax: (000) 000-0000
if to the Company:
C Me Run Corporation
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Fax: (000) 000-0000
with a copy to (which shall not constitute notice to the Company):
Shearman & Sterling
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
SECTION 9.03. Certain Definitions. For purposes of this Agreement, the
term:
(a) "affiliate" of a specified person means a person who directly or
indirectly through one or more intermediaries controls, is controlled by, or is
under common control with such specified person;
(b) "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting securities, as
trustee or executor, by contract or credit arrangement or otherwise;
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(c) "Dissenting Shares" shall mean any shares of capital stock of the
Company held by a holder who has exercised dissenters' rights for such shares in
accordance with the General Corporation Law of the State of Delaware and who, as
of the Effective Time, has not effectively withdrawn or lost such dissenters'
rights.
(d) "knowledge" means, with respect to any matter in question, that the
executive officers of the Company or Parent, as the case may be, have actual
knowledge of such matter;
(e) "person" means an individual, corporation, partnership, limited
partnership, syndicate, person (including, without limitation, a "person" as
defined in section 13(d)(3) of the Exchange Act), trust, association or entity
or government, political subdivision, agency or instrumentality of a government;
and
(f) "subsidiary" or "subsidiaries" of any person means any corporation,
partnership, joint venture or other legal entity of which such person (either
alone or through or together with any other subsidiary) owns, directly or
indirectly, more than 50% of the stock or other equity interests, 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.
SECTION 9.04. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of Law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated by this Agreement is not affected in
any manner materially adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated by this Agreement
be consummated as originally contemplated to the fullest extent possible.
SECTION 9.05. Assignment; Binding Effect; Benefit. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties. Subject to the preceding sentence,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns.
SECTION 9.06. Incorporation of Exhibits. The Company Disclosure Schedule,
the Parent Disclosure Schedule and all Exhibits attached hereto and referred to
herein are hereby incorporated herein and made a part hereof for all purposes as
if fully set forth herein.
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SECTION 9.07. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
SECTION 9.08. Governing Law; Forum. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware.
SECTION 9.09. Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 9.10. Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
and delivered shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.
SECTION 9.11. Entire Agreement. This Agreement (including the Annexes, the
Exhibits, the Company Disclosure Schedule and the Parent Disclosure Schedule)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings among the
parties with respect thereto. No addition to or modification of any provision of
this Agreement shall be binding upon any party hereto unless made in writing and
signed by all parties hereto.
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IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
FUNDAE ACQUISITION CORPORATION
Attest by: __________________________ By: _____________________________
Name: Name:
Title: Title:
FUNDAE MERGER SUB, INC.
Attest by: __________________________ By: _____________________________
Name: Name:
Title: Title:
C ME RUN CORP.
Attest by: __________________________ By: _____________________________
Name: Name:
Title: Title:
Attest by: __________________________ By: _____________________________
Name: Name:
Title: Title:
