EXHIBIT 2.2.1.
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER ("Agreement"), dated as of August 19,
2001, among CKS MANAGEMENT, INC. a Texas corporation (the "Company"), MICROWAVE
TRANSMISSION SYSTEMS, INC., a Texas corporation (the "Parent"); MTSI/CKS
ACQUISITION CORP., a Texas corporation, and a wholly owned subsidiary of Parent
("Merger Sub"), and P. Xxxxx Xxxxxxx, Xxxxxx Xxxxx and Xxxxxx Xxxxxxxx, as the
shareholders of the Company (the "Shareholders").
WHEREAS, the respective Boards of Directors of Parent, the Merger Sub,
the Shareholders and the Company have duly approved the acquisition of the
Merger Sub by means of a Merger of the Company with and into the Merger Sub
pursuant to the terms of this Agreement, it is therefore agreed as follows:
ARTICLE I
THE MERGER
SECTION 1.1 The Merger. Upon the terms and subject to the conditions
hereof, and in accordance with the relevant provisions of the Texas Business
Corporation Act (the "Act"), the Merger Sub shall be merged with the Company
(the "Merger") as soon as practicable following the satisfaction or waiver, if
permissible, of the conditions set forth in Article VI hereof. Following the
Merger, the Merger Sub shall continue as the surviving corporation (the
"Surviving Corporation") and continue its existence under the laws of the State
of Texas, and the separate corporate existence of the Company shall cease. The
Merger Sub shall change its name to the same as that of the Company.
SECTION 1.2 Effective Time. The Merger shall be consummated by filing
with the Secretary of State of Texas the Articles of Merger in the form attached
hereto as Exhibit "A" (the "Articles of Merger") (the time of such filing being
the "Effective Time").
SECTION 1.3 Effects of the Merger. The Merger shall have the effects
set forth in Article 5.06 of the Act. As of the Effective Time, the Company
shall merge with and into the Merger Sub, and the Merger Sub shall remain a
direct wholly owned Subsidiary of Parent. It is the intention of the parties
that the Merger will constitute a tax-free reorganization pursuant to the
provisions of Section 368(a)(1)(A) of the Internal Revenue Code of 1986 (as
amended) (the "Code") and a part of the transaction described in Section 5.9.
SECTION 1.4 Articles of Incorporation and Bylaws. The Articles of
incorporation of the Merger Sub and the Bylaws of the Merger Sub, both as in
effect at the Effective Time, shall be the Articles of Incorporation and Bylaws
of the Surviving Corporation.
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SECTION 1.5 Directors. As of the Effective Time, all directors of the
Merger Sub shall remain the directors of the Surviving Corporation.
SECTION1.6 Officers. Upon execution of this Agreement and satisfaction
of all conditions to the Closing of the Merger, the officers of
the Merger Sub will remain as the officers of the Surviving
Corporation as of the Effective Time.
SECTION 1.7 Transfer of and Payment for Shares.
(a) Each share of common stock, par value $1.00, and each share
of Preferred Stock, par value $1.00 per share ("Shares"), of the Company issued
and outstanding immediately prior to the Effective Time, shall, by virtue of the
Merger and without any action on the part of any holder thereof, be cancelled
and reissued as cash and newly issued, fully paid, and non-assessable shares of
the common stock of the Parent. Until surrendered in accordance with the
provisions of this Section, each certificate representing Shares of the Company
shall represent for all purposes the right to receive the Merger Consideration.
At and after the Effective Time there shall be no transfers of Shares which were
outstanding immediately prior to the Effective Time on the stock transfer books
of the Company. From and after the Effective Time, holders of certificates
formerly evidencing Shares of the Company shall cease to have any rights as
stockholders of the Company, except as provided herein or by law.
(b) In exchange for the cancelled shares of the Company, the
shareholders shall be entitled to receive the following (referred to as the
"Merger Consideration"): $900,000 cash by means of wire transfer to the accounts
specified in the Disclosure Schedule, and 1,278,795 shares of the common stock,
par value $0.001 per share of the Parent, to be issued in the names and
denominations set forth in the Disclosure Schedule. The number of shares
included in the Merger Consideration is based upon 1,600,000 shares less one
share for each dollar of the $321,206 of assumed deferred tax liabilities. The
Merger Consideration shall be paid to the Shareholders at the Closing.
(c) The Merger Consideration shall be subject to adjustment as
follows: The financial statements of the Surviving Corporation shall be prepared
for the fiscal year ending December 31, 2001, including the performance of the
Company for the portion of 2001 prior to the Closing. Such financial statements
shall be audited in accordance with generally accepted accounting principles by
the Parent's auditing firm or its designee. If the net earnings of the Surviving
Corporation after a provision for income tax shall be greater than $500,000, the
Parent will issue additional shares of its common stock within 30 days after the
issue date of the audit report, equal to five times each $1.00 of net earnings
in excess of $500,000, based upon the average closing price of Parent's Common
Stock for the five trading days prior to the issuance of the audit report.
SECTION 1.8 Closing. Upon the terms and subject to the conditions
hereof, as soon as practicable after the mutual agreement of the Company, the
Parent and the Merger Sub that all conditions described in Article VI have been
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satisfied or waived by the applicable party, a closing (the "Closing") will be
held at an agreed location for the purpose of implementing all transactions
described in this Agreement.
SECTION 1.9 Excluded Assets. Prior to the Effective Time, the Company
shall take appropriate action to convey to the shareholders any assets and any
liabilities associated with such assets that are listed in the Disclosure
Schedule and agreed to by Parent.
ARTICLE II
APPRAISAL RIGHTS
SECTION 2.1 Stockholders Rights. By virtue of the Act, the stockholders
of the Company are entitled to exercise any appraisal rights in connection with
the Merger. It is a condition to Parent's and Merger Sub's obligation to
complete the Merger and that no stockholder of the Company shall exercise any
dissenter's rights.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company and Shareholders jointly and severally represent and
warrant to the Parent and the Merger Sub as follows:
SECTION 3.1 Organization and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Texas. The Company has no subsidiaries. The Company has all
requisite power and authority to own or operate its properties and conduct its
business as it is now being conducted. The Company is duly qualified and in good
standing as a foreign corporation or entity authorized to do business in each of
the jurisdictions in which the character of the properties owned or held under
lease by it or the nature of the business transacted by it makes such
qualification necessary, except where the failure to qualify would not have a
Material Adverse Effect. The Company has delivered to the Parent and Merger Sub
true and correct copies of the Articles of Incorporation and Bylaws of the
Company.
SECTION 3.2 Capitalization. The authorized capital stock of the Company
consists of 1,000,000 Shares of Common Stock, par value $1.00, and 1,000,000
shares of Preferred Stock, par value $1.00. As of June 30, 2001, 990 shares of
Common Stock and 510 shares of Preferred Stock were issued and outstanding.
Except as described in the Disclosure Schedule, since June 30, 2001, the Company
has not issued any shares or other capital stock, and has not repurchased or
redeemed any Shares. All issued and outstanding Shares are validly issued, fully
paid, non-assessable and free of preemptive rights.
SECTION 3.3 Authority Relative to this Agreement. The Company has all
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution and
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delivery of this Agreement and the consummation of the transactions contemplated
hereby shall, as of the Closing, have been duly and validly authorized by the
Board of Directors and Shareholders, and no other corporate proceedings on the
part of the Company are necessary to authorize this Agreement or to consummate
the transactions so contemplated. This Agreement has been duly and validly
executed and delivered by the Company and, assuming this Agreement constitutes a
valid and binding obligation of each of Parent and Merger Sub, this Agreement
constitutes a valid and binding agreement of the Company and the Shareholders,
enforceable against the Company and the Shareholders in accordance with and
subject to its terms and conditions.
SECTION 3.4 Consents and Approvals; No Violation. Except as described
in the Disclosure Schedule, neither the execution and delivery of this Agreement
by the Company nor the consummation of the transactions contemplated hereby nor
compliance by the Company with any of the provisions hereof will (a) conflict
with or result in any breach of any provision of the Articles of Incorporation,
Bylaws or other organization documents of the Company, (b) require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Authority (as defined herein), except the filing of the Articles of
Merger pursuant to the Act, or where the failure to obtain such consent,
approval, authorization or permit, or to make such filing or notification, would
not in the aggregate have a Material Adverse Effect (as defined herein), (c)
result in a material default (with or without due notice or lapse of time or
both) (or give rise to any right of termination, cancellation or acceleration)
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, Contract (as hereinafter defined), license, agreement or other
instrument or obligation to which the Company is a party or by which the Company
or any of its assets may be bound, except for such defaults (or rights of
termination, cancellation or acceleration) as to which requisite waivers or
consents have been requested, (d) result in the creation or imposition of any
lien, charge or other encumbrance on the assets of the Company, or (e) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
the Company or any of its assets.
SECTION 3.5 Taxes, Tax Returns.
(a) The Company has delivered to Parent copies of the federal
income tax returns of the Company for each of the last three fiscal years and
all schedules and exhibits thereto. Except as set forth on the Disclosure
Schedule, the Company has duly and timely filed in correct form all federal,
state and local information returns and tax returns required to be filed by it
on or prior to the date hereof (all such returns to the knowledge of the Company
being accurate and complete in all material respects) and, to the knowledge of
the Company, has duly paid or made provision for the payment of all taxes and
other governmental charges which have been incurred or are due or claimed to be
due from them by any Governmental Authority (including, without limitation,
those due in respect of their properties, income, business, capital stock,
franchises, licenses, sales and payrolls) other than taxes or other charges (i)
which are not yet delinquent or are being contested in good faith and set forth
in the Disclosure Schedule, (ii) have not been finally determined or (iii) that
would not have a Material Adverse Effect on the Company. The liabilities and
reserves for taxes in the Company Financial Statements are sufficient to the
best of the Company's knowledge in the aggregate for the payment of all unpaid
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federal, state and local taxes (including any interest or penalties thereon),
whether or not disputed or accrued, for the period ended December 31, 2000, or
for any year or period prior thereto, and for which the Company may be liable in
its own right or as transferee of the assets of, or successor to, any
corporation, person, association, partnership, joint venture or other entity.
(b) To the knowledge of the Company, (i) proper and accurate
amounts have been withheld by the Company from its employees and others for all
prior periods in compliance in all material respects with the tax withholding
provisions of applicable federal, state and local laws and regulations, and
proper due diligence steps have been taken in connection with back-up
withholding, (ii) federal, state and local returns which are accurate and
complete in all material respects have been filed by the Company for all periods
for which returns were due with respect to income tax withholding, Social
Security and unemployment taxes and (iii) the amounts shown on such returns to
be due and payable have been paid in full, or adequate provision therefore has
been included by the Company in the most recent Company Financial Statements.
SECTION 3.6 Undisclosed Liabilities. The Company is not liable for or
subject to any material Liabilities (as hereinafter defined), except (a)
Liabilities adequately disclosed or reserved for in the most recent Company
Financial Statements and not heretofore paid or discharged, (b) Liabilities
under any contract, commitment or agreement specifically disclosed on the
Disclosure Schedule, or (c) Liabilities incurred, consistent with past practice,
in or as a result of the ordinary course of business of the Company since the
date of the most recent Company Financial Statements. As used in this Agreement,
the term "Liability" or "Liabilities" includes any material direct or indirect
liability, indebtedness, obligation, guarantee or endorsement (other than
endorsements of notes, bills, and checks presented to banks for collection or
deposit in the ordinary course of business), whether known or unknown, accrued,
absolute, contingent or otherwise.
SECTION 3.7 No Default; Compliance.
(a) Except as set forth in the Disclosure Schedule, the Company is not
in material default under, and no condition exists that with notice or lapse of
time or both would constitute a material default under, (i) any mortgage, loan
agreement, indenture, evidence of indebtedness or other instrument evidencing
borrowed money to which the Company is a party or by which the Company or its
properties is bound, (ii) any judgment, order or injunction of any court,
arbitrator or governmental agency or (iii) any other agreement, contract, lease,
license or other instrument, which default or potential default might reasonably
be expected to have a Material Adverse Effect.
(b) Except as set forth in the Disclosure Schedule, the Company has
complied in all material respects with all laws, regulations, orders, judgments
or decrees of any federal or state court or Governmental Authority applicable to
their respective businesses and operations, non-compliance with which might
reasonably be expected to have a Material Adverse Effect.
SECTION 3.8 Representations and Warranties Continuing. The
representations and warranties set forth herein shall be true and correct on the
date hereof and subject to an update of the Disclosure Schedule from time to
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time, at all times prior to the Effective Time as if made from time to time,
including, without limitation, at the Effective Time and the Closing.
SECTION 3.9 Compliance with Law and Permits. The Company has owned and
operated its properties and assets in substantial compliance with the provisions
and requirements of all laws, orders, regulations, rules and ordinances issued
or promulgated by all Governmental Authorities having jurisdiction with respect
thereto, except where the failure to own and operate such properties and assets
in compliance with such provisions and requirements would not reasonably be
expected to have a Material Adverse Effect. All material governmental
certificates, consents, permits, licenses or other authorizations with regard to
the ownership or operation by the Company of its properties and assets have been
obtained, and to the knowledge of the Company no violation exists in respect of
such licenses, permits or authorizations, except where the failure to obtain and
hold such permits, or any violation thereof by the Company, would not reasonably
be expected to have a Material Adverse Effect. To the knowledge of the Company,
none of the documents and materials filed with or furnished to any Governmental
Authority with respect to the properties, assets or businesses of the Company
contains any untrue statement of a material fact or fails to state a material
fact necessary to make the statements therein not misleading.
SECTION 3.10 Title to Property. Except as disclosed on the Disclosure
Schedule, the Company has good and marketable title, insured with respect to
properties and assets which currently are of a type for which insurance is
generally available, free and clear (except as indicated in the Disclosure
Statement or in the most recent Company Financial Statements and liens for
current taxes not yet due and payable), of all security interests, liens,
encumbrances and encroachments of a material nature, to its real property and
other property and assets that are material to the Company's business on a
consolidated basis.
SECTION 3.11 Investment Purpose. Each Shareholder will execute a
subscription agreement in the form attached as Exhibit B.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND MERGER SUB
Parent and Merger Sub jointly and severally represent and warrant to
the Company and Shareholders as follows:
SECTION 4.1 Authority Relative to this Agreement. The Parent and Merger
Sub have all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the Boards of
Directors of the Parent and Merger Sub, and no other corporate proceedings on
the part of the Parent and Merger Sub are necessary to authorize this Agreement
or to consummate the transactions so contemplated. This Agreement has been duly
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and validly executed and delivered by the Parent and Merger Sub and, assuming
this Agreement constitutes a valid and binding obligation of the Company, this
Agreement constitutes a valid and binding agreement of the Parent and Merger
Sub, enforceable against the Parent and Merger Sub in accordance with and
subject to its terms and conditions.
SECTION 4.2 SEC Reports. Since January 1, 2000, to the best of its
knowledge the Parent has filed all required forms, reports and documents
("Parent SEC Reports") with the Securities and Exchange Commission (the "SEC")
required to be filed by it pursuant to the federal securities laws and the SEC
rules and regulations thereunder, all of which have complied in all material
respects with all applicable requirements of the Securities Act and the
Securities Exchange Act of 1934 (the "Exchange Act"), and the rules and
interpretive releases promulgated thereunder.
SECTION 4.3 Consents and Approvals; No Violation. Except as described
in the Disclosure Schedule, neither the execution and delivery of this Agreement
by the Parent and Merger Sub nor the consummation of the transactions
contemplated hereby nor compliance by the Parent and Merger Sub with any of the
provisions hereof will conflict with or result in any breach of any provision of
the Articles of Incorporation or By-laws of the Parent or Merger Sub, require
any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Authority, except the filing of Articles of
Merger pursuant to the Act, or where the failure to obtain such consent,
approval, authorization or permit, or to make such filing or notification, would
not in the aggregate have a Material Adverse Effect, result in a material
default (with or without due notice or lapse of time or both) (or give rise to
any right of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, Contract,
license, agreement or other instrument or obligation to which the Parent or
Merger Sub is a party or by which the Parent, Merger Sub or any of their
respective assets may be bound, except for such defaults (or rights of
termination, cancellation or acceleration) as to which requisite waivers or
consents have been requested or which, in the aggregate, would not have a
Material Adverse Effect, result in the creation or imposition of any lien,
charge or other encumbrance on the assets of the Parent or Merger Sub, or
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to the Parent, Merger Sub or any of their respective assets, except
for violations which would not in the aggregate have a Material Adverse Effect.
SECTION 4.4 Organization and Qualification. The Parent and Merger Sub
are corporations duly organized, validly existing and in good standing under the
laws of the State of Texas. The Parent and Merger Sub have all requisite power
and authority to own or operate their properties and conduct their business as
they are now being conducted. Each of the Parent and Merger Sub are duly
qualified and in good standing as a foreign corporation or entity authorized to
do business in each of the jurisdictions in which the character of the
properties owned or held under lease by them or the nature of the business
transacted by them makes such qualification necessary, except where the failure
to qualify would not have a Material Adverse Effect. The Parent and Merger Sub
have delivered to the Company true and correct copies of the Articles of
Incorporation and Bylaws of the Parent and Merger Sub.
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ARTICLE V
COVENANTS
SECTION 5.1 Conduct of Business of the Company. Except as contemplated
by this Agreement or disclosed in the Disclosure Schedule, during the period
from the date of this Agreement to the Effective Time, the Company, Parent and
Merger Sub will each conduct their operations according to their ordinary and
usual course of business and consistent with past practice. Without limiting the
generality of the foregoing, and except as otherwise expressly provided in this
Agreement or disclosed in the Disclosure Schedule, the Company will not, prior
to the Effective Time, without the prior written consent of the Parent (a)
issue, sell or pledge, or authorize or propose the issuance, sale or pledge of
(i) additional shares of capital stock of any class, or securities convertible
into any such shares, or any rights, warrants or options to acquire any such
shares or other convertible securities, or (ii) any other securities in respect
of, in lieu of or in substitution for, capital stock outstanding on the date
hereof; (b) purchase or otherwise acquire, or propose to purchase or otherwise
acquire, any outstanding securities; (c) declare or pay any dividend or
distribution on any shares of its capital stock; (d) authorize, recommend,
propose or announce an intention to authorize, recommend or propose, or enter
into an agreement in principle or an agreement with respect to, any merger,
consolidation or business combination (other than the Merger), any acquisition
of a material amount of assets or securities, any disposition of a material
amount of assets or securities or any material change in its capitalization, or
any entry into a material contract or any release or relinquishment of any
material contract rights, not in the ordinary course of business; (e) propose or
adopt any amendments to its charter or by-laws; (f) enter into, assign or
terminate, or amend in any material respect, any contract other than in the
ordinary course of business; (g) acquire, dispose of, encumber or relinquish any
material asset (other than sale of real properties at prices equal to or greater
than their carrying values); (h) waive, compromise or settle any right or claim
that would adversely affect the ownership, operation or value of any asset; (i)
make any capital expenditures other than pursuant to existing capital
expenditure programs that are disclosed in the Disclosure Schedule; (j) allow or
permit the expiration, termination or cancellation at any time prior to the
Effective Time of any of the insurance policies or coverages or surety bonds
currently maintained unless replaced with a policy, coverage or bond having
substantially the same coverage and similar terms and conditions; (k) increase,
directly or indirectly, the salary or other compensation of any officer or
member of management, enter into any employment agreement with any person or pay
or enter into any agreement to pay any bonuses or other extraordinary
compensation to any officer or to any member of management or other employees,
or institute any general increase in rates of compensation for its employees, or
increase, directly or indirectly, any provisions or other benefits of any of
such persons; or (l) waive, settle or compromise any material litigation or
other claim on a basis materially adverse.
SECTION 5.2 No Solicitations. The Company shall not, and it shall use
its best efforts to ensure that none of its respective affiliates, officers,
directors, representatives or agents shall, directly or indirectly, solicit,
initiate or encourage (including by way of furnishing information) any
corporation, partnership, person, entity or group concerning any merger, sale of
substantial assets (except as permitted by Section 5.1(g)) outside the ordinary
course of business, sale of shares of capital stock or similar transaction
involving the Company (other than the transactions contemplated by this
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Agreement). The Company will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing. The parties will promptly
communicate to the other the terms of any proposal or inquiry, oral or written,
which may be received in respect of any such transaction, and will inform the
other prior to the time that it furnishes any information to, or engages in
negotiations or discussions with, any third party with respect to the
acquisition of either party.
SECTION 5.3 Access to Information.
(a) Between the date of this Agreement and the Effective Time, the
parties will afford to one another and their authorized representatives
reasonable access to the properties and to the books and records of such party,
will permit the parties and their representatives to make such reasonable
inspections as they may require and will cause their officers to furnish the
parties and their representatives with such financial and operating data,
environmental assessments and other information with respect to the business and
properties of the parties as they and their representatives may from time to
time reasonably request. No inspection or examination by either party will
constitute a waiver of any claim against the other party for misrepresentation
or breach of this Agreement.
(b) The parties will hold and will cause their representatives to hold
in strict confidence, unless compelled to disclose by judicial or administrative
process, or, in the opinion of counsel, by other requirements of law, all
documents and information concerning the parties furnished to them and their
representatives in connection with the transactions contemplated by this
Agreement (except to the extent that such information can be shown to have been
(i) in the public domain through no fault of the parties or their
representatives, or (ii) later lawfully acquired by the parties or their
representatives from other sources unless they or their representatives know
that such other sources are not entitled to disclose such information) and will
not release or disclose such information to any other person, except their
auditors, attorneys, financial advisors and other consultants and advisors in
connection with this Agreement, provided that such person shall have first been
advised of the confidentiality provision of this Section 5.3. If the
transactions contemplated by this Agreement are not consummated, such confidence
shall be maintained except to the extent such information can be shown to have
been (i) in the public domain through no fault of the Company, Parent, Merger
Sub or their representatives, or (ii) later lawfully acquired by the parties or
representatives from other sources, and, if requested by the other party will,
and will cause its agents, auditors, consultants, representatives and advisors
to, return to the other or destroy all copies of written information furnished.
SECTION 5.4 Best Efforts. Subject to the terms and conditions herein
provided, and to the fiduciary duties of the Boards of Directors of the parties
under applicable law, each of the parties hereto agrees to use its best efforts
to take, or cause to be taken, all action, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
In case at any time after the Effective Time any further action is necessary or
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desirable to carry out the purposes of this Agreement, the proper officers and
directors of each party to this Agreement shall take all such necessary action.
SECTION 5.5 Consents. Parent and the Company each will use its best
efforts to obtain such consents of third parties to agreements which would
otherwise be violated by any provisions hereof, to take all actions necessary to
effect the transactions contemplated hereby, and to make such filings with
Governmental Authorities necessary to consummate the transactions contemplated
by this Agreement including, without limitation, (a) the vigorous defense of any
lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transaction contemplated
hereby, including seeking to have any stay or temporary restraining order
entered by any court or Governmental Authority vacated or reviewed, and (b) the
execution and delivery of any additional instruments (including any required
supplemental indentures) necessary to consummate the transactions contemplated
by this Agreement.
SECTION 5.6 Public Announcements. Parent and the Company will consult
with each other before issuing any press release or otherwise making any public
statements with respect to the existence of this Agreement or the Merger and
shall not issue any such press release or make any such public statement prior
to such consultation, except as may be required by law or by obligations
pursuant to any listing agreement with any national securities exchange.
SECTION 5.7 Other Documents. This Agreement is being closed
simultaneously with the following additional agreements: Agreement and Plan of
Merger between the Parent, its merger subsidiaries, and each of Viper
Communication Systems, Inc. and Epic Communications, Inc.
ARTICLE VI
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 6.1 Company's Conditions to the Closing. Immediately prior to
the Closing, the Parent and Merger Sub shall have satisfied each of the
following conditions, any of which may be waived in the Company's sole
discretion:
(a) A certificate, dated the date of the Closing of the chief executive
officer of Parent certifying that all representations and warranties made in
Article III herein are true and correct as of the date made and as of the
Closing and that all agreements or other actions required to be performed prior
to the Closing by Parent or Merger Sub as a condition to consummating the Merger
have been performed or taken and such conditions satisfied in accordance with
the terms of this Agreement.
(b) No statute, rule, regulation, executive order, decree, or
injunction shall have been enacted, entered, promulgated or enforced by any
court of competent jurisdiction in the United States or domestic Governmental
Authority which prohibits or restricts the consummation of the Merger.
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(c) All parties shall have delivered all documents, exhibits and
schedules and taken all other actions required by this Agreement.
(d) All representations and warranties of any party shall be true and
effective as of the Closing.
(e) The Other Agreements shall have been executed and delivered.
(f) The Parent shall have obtained bank debt financing in an amount
sufficient for payment of the cash portion of the Merger Consideration.
SECTION 6.2 Parent's Conditions to the Closing. Immediately prior to
the Closing, the Company and Shareholders shall have satisfied each of the
following conditions, any of which may be waived in Parent's sole discretion:
(a) A certificate, dated the date of the Closing of the chief executive
officer of the Company certifying that all representations and warranties made
in Article III herein are true and correct as of the date made and as of the
Closing and that all agreements or other actions required to be performed prior
to the Closing by the Company as a condition to consummating the Merger have
been performed or taken and such conditions satisfied in accordance with the
terms of this Agreement.
(b) No statute, rule, regulation, executive order, decree, or
injunction shall have been enacted, entered, promulgated or enforced by any
court of competent jurisdiction in the United States or domestic Governmental
Authority which prohibits or restricts the consummation of the Merger.
(c) There shall have been no material adverse change in the business,
properties, or financial condition of the Company to this Agreement.
(d) All parties shall have delivered all documents, exhibits and
schedules and taken all other actions required by this Agreement.
(e) All representations and warranties of any party shall be true and
effective as of the Closing.
(f) The Other Agreements shall have been executed and delivered.
(g) The Parent shall have completed its review of the books, records,
properties and other legal and financial matters pertaining to the Company and
shall be satisfied with the results of such review.
(h) The Parent shall have obtained bank debt financing in an amount
sufficient for payment of the cash portion of the Merger Consideration.
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ARTICLE VII
TERMINATION, AMENDMENTS; WAIVER
SECTION 7.1 Termination. This Agreement may be terminated and the
Merger contemplated hereby may be abandoned at any time notwithstanding approval
thereof by the Parent and Company, but prior to the Closing:
(a) by mutual written consent duly authorized by the Boards of
Directors of Company, Parent and Merger Sub;
(b) by Parent or the Company if any court of competent jurisdiction or
other Governmental Authority shall have issued an order, decree or ruling or
taken any other action restraining, enjoining or otherwise prohibiting the
Merger or if litigation or proceedings shall be pending that are reasonably
likely to result in any of the foregoing;
(c) by the Company, if Parent or Merger Sub shall not have performed
all obligations required to be performed by them under this Agreement, except
where any failure to perform would, in the aggregate, not materially impair or
delay the ability of Parent, Merger Sub and the Company to effect the Merger; or
(d) by the Parent, if there shall have been a breach of any of the
covenants contained herein or if any representation or warranty made by the
Company is untrue in any material respect.
SECTION 7.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 7.1, this Agreement shall
forthwith become void and have no effect, without any liability on the part of
any party or its directors, officers, or stockholders, other than the provisions
of Sections 5.3(b) and 9.9. In such event, the mergers shall be rescinded by
conveying to the shareholders the shares representing ownership of the Merger
Subs.
SECTION 7.3 Amendment. This Agreement may be amended only by means of
an instrument in writing signed on behalf of all the parties.
SECTION 7.4 Extension; Waiver. At any time prior to the Closing, the
parties hereto, by action taken by or on behalf of the respective Boards of
Directors of the Company, Parent and Merger Sub, may (a) extend the time for the
performance of any of the obligations or other acts of any other applicable
party hereto, (b) waive any inaccuracies in the representations and warranties
contained herein by any other applicable party or in any document, certificate
or writing delivered pursuant hereto by an other applicable party, or (c) waive
compliance with any of the agreements of any other applicable party or with any
conditions to its own obligations. Any agreement on the part of any other
applicable party to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party.
14
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Parent and Merger Sub's Right to Indemnification. Company
and the Shareholders shall and do hereby, jointly and severally, indemnify and
hold harmless, Parent, Merger Sub, and their stockholders, directors, officers,
employees, agents and representatives from any and all liabilities, obligations,
claims, contingencies, damages, costs and expenses (including all court costs
and reasonable attorneys' fees) that Merger Sub or any such other indemnified
party may suffer or incur as a result of or relating to the material breach or
inaccuracy of any of the representations, warranties, covenants or agreements
made by Company and the Shareholders herein or pursuant hereto.
SECTION 8.2 Company's Right to Indemnification. Merger Sub and Parent
shall and do hereby indemnify and hold Company and the Shareholders, and its
directors, officers, employees, shareholders, agents and representatives
harmless from any and all liabilities, obligations, claims, contingencies,
damages, costs and expenses (including all court costs and reasonable attorneys'
fees) that Company or any such indemnified party may suffer or incur as a result
of or relating to: (a) the breach or inaccuracy, or any alleged breach or
inaccuracy, of any of the representations, warranties, covenants or agreements
made by Merger Sub and Parent herein or pursuant hereto; and (b) those
liabilities, obligations, claims, contingencies and encumbrances accruing or
arising after the Closing in connection with the business of the Parent, except
to the extent that such liabilities, obligations, claims, contingencies or
encumbrances are attributable to a breach of warranty, representation or
covenant by Company prior to the Closing.
SECTION 8.3 Notice. The party seeking indemnification hereunder
("Indemnitee") shall promptly, and within 30 days after notice to it (notice to
Indemnitee being the filing of any action, receipt of any claim in writing or
similar form of actual notice) of any claim as to which it asserts a right to
indemnification, notify the party from whom indemnification is sought
("Indemnitor") of such claim. Indemnitee shall xxxx Indemnitor for any such
claims no more frequently than on a monthly basis, and Indemnitor shall promptly
pay (or cause to be paid) Indemnitee upon receipt of any such xxxx. The failure
of Indemnitee to give the notification to Indemnitor contemplated above in this
Section shall not relieve Indemnitor from any liability or obligation that it
may have pursuant to this Agreement unless the failure to give such notice
within such time shall have been materially prejudicial to it, and in no event
shall the failure to give such notification relieve Indemnitor from any
liability it may have other than pursuant to this Agreement.
SECTION 8.4 Third-Party Claims. If any claim for indemnification by
Indemnitee arises out of an action or claim by a person other than Indemnitee,
Indemnitor may, by written notice to Indemnitee, undertake to conduct the
defense thereof and to take all other steps or proceedings to defeat or
compromise any such action or claim, including the employment of counsel to be
mutually agreed upon; provided that Indemnitor shall reasonably consider the
advice of Indemnitee as to the defense or compromise of such actions and claims,
and Indemnitee shall have the right to participate, at its own expense, in such
proceedings, but control of such proceedings shall remain exclusively with
Indemnitor. Indemnitee shall provide all reasonable cooperation to Indemnitor in
15
connection with such proceedings. Counsel and auditor costs and expenses and
court costs and fees of all proceedings with respect to any such action or claim
shall be borne by Indemnitor. If any such claim is made hereunder and Indemnitor
does not elect to undertake the defense thereof by written notice to Indemnitee,
Indemnitee shall be entitled to control such proceedings and shall be entitled
to indemnity with respect thereto pursuant to the terms of this Article VIII. To
the extent that Indemnitor undertakes the defense of such claim by written
notice to Indemnitee and diligently pursues such defense at its expense,
Indemnitee shall be entitled to indemnification hereunder only to the extent
that such defense is unsuccessful as determined by a final judgment of a court
of competent jurisdiction, or by written acknowledgment of the parties.
SECTION 8.5 Time to Assert Claims. Any claim asserted pursuant to
Section 8.1 or Section 8.2 above must be asserted by written notice given by one
party to the other on or before the one (1) year anniversary from the date of
Closing.
SECTION 8.6 Access to Records. All parties and their agents shall be
afforded reasonable access to the Parent's and Merger Sub's books and records
during normal business hours upon reasonable notice for the purpose of verifying
any claim hereunder. Such party or its agents may be required to sign an
appropriate confidentiality agreement prior to any inspection of books and
records hereunder.
SECTION 8.7 Offset Right. Any claims under this Article VIII may be
satisfied by offsetting any obligation owed to such party.
SECTION 8.8 Arbitration. All disputes under this Article VIII shall be
settled by arbitration in Dallas, Texas, before three arbitrators pursuant to
the rules of the American Arbitration Association. Each party shall select one
arbitrator and the two arbitrators shall select a third. Arbitration may be
commenced at any time by any party hereto giving written notice to each other
party to a dispute that such dispute has been referred to arbitration under this
Section 8.8. Any award rendered by the arbitrators shall be conclusive and
binding upon the parties hereto; provided, however, that any such award shall be
accompanied by a written opinion giving the reasons for the award. This
provision for arbitration shall be specifically enforceable by the parties and
the decision of the arbitrators shall be final and binding and there shall be no
right of appeal therefrom. Each party shall pay its own expenses of arbitration
and the expenses of the arbitrators shall be equally shared; provided, however,
that if in the opinion of the arbitrators any claim for indemnification or any
defense or objection thereto was unreasonable, the arbitrators may assess, as
part of their award, all or any part of the arbitration expenses of the other
party (including reasonable attorney's fees) and of the arbitrators against the
party raising such unreasonable claim, defense or objection.
16
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person or persons any rights, benefits or remedies of any nature whatsoever
under or by reason of this Agreement.
SECTION 9.2 Brokerage Fees and Commissions. Each party represents that
it has incurred no obligation to any broker or finder in connection with the
transactions described in this Agreement and agrees to indemnify the other
parties and hold them harmless against any liability to any such broker or
finder.
SECTION 9.3 Entire Agreement; Assignment. This Agreement (a)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties or any of them with respect to the subject
matter hereof and (b) shall not be assigned by operation of law or otherwise.
SECTION 9.4 Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, each of which shall remain in full force
and effect.
SECTION 9.5 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by facsimile telegram or telex, or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties as follows:
If to the Company, Parent or Merger Sub:
Mr. P. Xxxxx Xxxxxxx
000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx 00000 FAX: 000-000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
SECTION 9.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, REGARDLESS OF THE
LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF
LAWS THEREOF.
17
SECTION 9.7 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
SECTION 9.10 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same agreement.
SECTION 9.11 Expenses. Except as otherwise provided herein, the Parent,
Merger Sub and Company shall bear and pay all costs and expenses incurred by it
or on its behalf in connection with the transactions contemplated hereunder,
including fees and expenses of its own financial or other consultants,
investment bankers, accountants and counsel.
SECTION 9.12 Performance by Merger Sub. Parent agrees to cause Merger
Sub to comply with its obligations hereunder and to cause Merger Sub to
consummate the Merger as contemplated herein.
SECTION 9.13 Disclosure Schedule. Upon the execution hereof, the
Company and the Parent shall deliver the Disclosure Schedule to each other. The
Disclosure Schedule shall be updated from time to time and prior to the Closing
to report any changes in the information contained therein. The Disclosure
Schedule shall contain all information required to disclose fully any exception
or qualification to this Agreement and shall cross reference the section of this
Agreement so qualified.
ARTICLE X.
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
meanings set forth below:
"Action" shall mean any action, suit, litigation, complaint,
counterclaim, claim, petition, mediation contest, or administrative proceeding,
whether at law, in equity, in arbitration or otherwise, and whether conducted by
or before any Government or other Person.
"Business" shall mean the business of owning and operating the
communication equipment business as conducted prior to the Closing by Seller.
"Closing" shall have the meaning set forth in Section 1.8 hereof.
"Closing Date" shall mean the time and date that the Closing occurs.
"Code" shall mean the United States Internal Revenue Code of 1986, as
amended, and all regulations thereunder. Any reference herein to a specific
section or sections of the Code shall be deemed to include a reference to any
corresponding provision of future law.
18
"Consents" shall mean all consents, approvals, and estoppels of others
which are required to be obtained in order to effect the valid assignment,
transfer, and conveyance to Parent of the Business.
"Contracts" shall mean all contracts, agreements, and leases of
equipment or other personal property that relate exclusively to the Business.
"Default" shall mean an event of default as defined in any contract or
other agreement or instrument, or any event which, with the passage of time or
giving of notice or both, would constitute an event of default or other breach
under such document or instrument.
"Disclosure Schedule" shall mean the set of numbered schedules
referencing Sections of this Agreement delivered by Seller and dated of even
date herewith, as supplemented by new or amended schedules delivered by Seller
prior to the Closing.
"Effective Time" shall have the meaning set forth in Section 1.2
hereof.
"Forum" shall mean any federal, state, local, municipal, or foreign
court, governmental agency, administrative body or agency, tribunal, private
alternative dispute resolution system, or arbitration panel.
"Government" shall mean any federal, state, local, municipal, or
foreign government or any department, commission, board, bureau, agency,
instrumentality, unit, or taxing authority thereof.
"Material Adverse Effect" shall mean any adverse change in the
financial condition, assets, business or operations of any party and its
subsidiaries which is material to such party taken as a whole.
"Orders" shall mean all applicable orders, writs, judgments, decrees,
rulings, consent agreements, and awards of or by any Forum or entered by consent
of the party to be bound.
"Person" shall include an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization, a government, and any other legal entity.
"Schedules" shall mean the numbered sections of the Disclosure
Schedule.
"Subsidiary" shall mean, when used with reference to an entity, any
corporation, a majority of the outstanding voting securities of which are owned
directly or indirectly by such entity. Such term shall also refer to any other
partnership, limited partnership, joint venture, trust, or other business entity
in which a party hereto owns a material interest.
19
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
day and year set forth above.
MICROWAVE TRANSMISSION SYSTEMS, INC., a
Texas corporation
By: /s/ P. Xxxxx Xxxxxxx
--------------------------------------
P. Xxxxx Xxxxxxx, President
MTSI/CKS ACQUISITION CORP.,
a Texas corporation
By: /s/ P. Xxxxx Xxxxxxx
--------------------------------------
P. Xxxxx Xxxxxxx, President
CKS MANAGEMENT, INC.,
a Texas corporation
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Xxxxxx X. Xxxxxx, President
/s/ P. Xxxxx Xxxxxxx
--------------------------------------
P. Xxxxx Xxxxxxx
/s/ Xxxxxx Xxxxxxxx
--------------------------------------
Xxxxxx Xxxxxxxx
/s/ Xxxxxx Xxxxxx
--------------------------------------
Xxxxxx Xxxxxx
20
EXHIBIT 2.2.2.
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER ("Agreement"), dated as of August 19,
2001, among VIPER COMMUNICATION SYSTEMS, INC. a Texas corporation (the
"Company"), MICROWAVE TRANSMISSION SYSTEMS, INC., a Texas corporation (the
"Parent"); MTSI/VCS ACQUISITION CORP., a Texas corporation, and a wholly owned
subsidiary of Parent ("Merger Sub"), and P. Xxxxx Xxxxxxx, Xxxxx Xxxxxx and
Xxxxxx Xxxxx, as the shareholders of the Company (the "Shareholders").
WHEREAS, the respective Boards of Directors of Parent, the Merger Sub,
the Shareholders and the Company have duly approved the acquisition of the
Merger Sub by means of a Merger of the Company with and into the Merger Sub
pursuant to the terms of this Agreement, it is therefore agreed as follows:
ARTICLE I
THE MERGER
SECTION 1.1 The Merger. Upon the terms and subject to the conditions
hereof, and in accordance with the relevant provisions of the Texas Business
Corporation Act (the "Act"), the Merger Sub shall be merged with the Company
(the "Merger") as soon as practicable following the satisfaction or waiver, if
permissible, of the conditions set forth in Article VI hereof. Following the
Merger, the Merger Sub shall continue as the surviving corporation (the
"Surviving Corporation") and continue its existence under the laws of the State
of Texas, and the separate corporate existence of the Company shall cease. The
Merger Sub shall change its name to the same as that of the Company.
SECTION 1.2 Effective Time. The Merger shall be consummated by filing
with the Secretary of State of Texas the Articles of Merger in the form attached
hereto as Exhibit "A" (the "Articles of Merger") (the time of such filing being
the "Effective Time").
SECTION 1.3 Effects of the Merger. The Merger shall have the effects
set forth in Article 5.06 of the Act. As of the Effective Time, the Company
shall merge with and into the Merger Sub, and the Merger Sub shall remain a
direct wholly owned Subsidiary of Parent. It is the intention of the parties
that the Merger will constitute a tax-free reorganization pursuant to the
provisions of Section 368(a)(1)(A) of the Internal Revenue Code of 1986 (as
amended) (the "Code") and a part of the transaction described in Section 5.9.
SECTION 1.4 Articles of Incorporation and Bylaws. The Articles of
Incorporation of the Merger Sub and the Bylaws of the Merger Sub, both as in
effect at the Effective Time, shall be the Articles of Incorporation and Bylaws
of the Surviving Corporation.
21
SECTION 1.5 Directors. As of the Effective Time, all directors of the
Merger Sub shall remain the directors of the Surviving Corporation.
SECTION 1.6 Officers. Upon execution of this Agreement and
satisfaction of all conditions to the Closing of the Merger,
the officers of the Merger Sub will remain as the officers of
the Surviving Corporation as of the Effective Time.
SECTION 1.7 Transfer of and Payment for Shares.
(a) Each share of common stock, par value $1.00, and each share of
Preferred Stock, par value $1.00 per share ("Shares"), of the Company issued and
outstanding immediately prior to the Effective Time, shall, by virtue of the
Merger and without any action on the part of any holder thereof, be cancelled
and reissued as cash and newly issued, fully paid, and non-assessable shares of
the common stock of the Parent. Until surrendered in accordance with the
provisions of this Section, each certificate representing Shares of the Company
shall represent for all purposes the right to receive the Merger Consideration.
At and after the Effective Time there shall be no transfers of Shares which were
outstanding immediately prior to the Effective Time on the stock transfer books
of the Company. From and after the Effective Time, holders of certificates
formerly evidencing Shares of the Company shall cease to have any rights as
stockholders of the Company, except as provided herein or by law.
(b) In exchange for the cancelled shares of the Company, the
Shareholders shall be entitled to receive the following (referred to as the
"Merger Consideration"): $1,272,653 cash by means of wire transfer to the
accounts specified in the Disclosure Schedule, and 2,750,001 shares of the
common stock, par value $0.001 per share of the Parent, to be issued in the
names and denominations set forth in the Disclosure Schedule. The amount of cash
included in the Merger Consideration is based upon $1,500,000 less $227,347 of
assumed deferred tax liabilities. The Merger Consideration shall be paid to the
Shareholders at the Closing.
(c) The Merger Consideration shall be subject to adjustment as
follows: The financial statements of the Surviving Corporation shall be prepared
for the fiscal year ending December 31, 2001, including the performance of the
Company for the portion of 2001 prior to the Closing. Such financial statements
shall be audited in accordance with generally accepted accounting principles by
the Parent's auditing firm or its designee. If the net earnings of the Surviving
Corporation after a provision for income tax shall be greater than $850,000, the
Parent will issue additional shares of its common stock within 30 days after the
issue date of the audit report, equal to five times each $1.00 of net earnings
in excess of $850,000, based upon the average closing price of Parent's Common
Stock for the five trading days prior to the issuance of the audit report.
SECTION 1.8 Closing. Upon the terms and subject to the conditions
hereof, as soon as practicable after the mutual agreement of the Company, the
Parent and the Merger Sub that all conditions described in Article VI have been
satisfied or waived by the applicable party, a closing (the "Closing") will be
22
held at an agreed location for the purpose of implementing all transactions
described in this Agreement.
SECTION 1.9 Excluded Assets. Prior to the Effective Time, the Company
shall take appropriate action to convey to the shareholders any assets and any
liabilities associated with such assets that are listed in the Disclosure
Schedule and agreed to by Parent.
ARTICLE II
APPRAISAL RIGHTS
SECTION 2.1 Stockholders Rights. By virtue of the Act, the stockholders
of the Company are entitled to exercise any appraisal rights in connection with
the Merger. It is a condition to Parent's and Merger Sub's obligation to
complete the Merger and that no stockholder of the Company shall exercise any
dissenter's rights.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company and Shareholders jointly and severally represent and
warrant to the Parent and the Merger Sub as follows:
SECTION 3.1 Organization and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Texas. The Company has no subsidiaries. The Company has all
requisite power and authority to own or operate its properties and conduct its
business as it is now being conducted. The Company is duly qualified and in good
standing as a foreign corporation or entity authorized to do business in each of
the jurisdictions in which the character of the properties owned or held under
lease by it or the nature of the business transacted by it makes such
qualification necessary, except where the failure to qualify would not have a
Material Adverse Effect. The Company has delivered to the Parent and Merger Sub
true and correct copies of the Articles of Incorporation and Bylaws of the
Company.
SECTION 3.2 Capitalization. The authorized capital stock of the Company
consists of 1,000,000 Shares of Common Stock, par value $1.00, and 1,000,000
shares of Preferred Stock, par value $1.00. As of June 30, 2001, 990 shares of
Common Stock and 510 shares of Preferred Stock were issued and outstanding.
Except as described in the Disclosure Schedule, since June 30, 2001, the Company
has not issued any shares or other capital stock, and has not repurchased or
redeemed any Shares. All issued and outstanding Shares are validly issued, fully
paid, non-assessable and free of preemptive rights.
SECTION 3.3 Authority Relative to this Agreement. The Company has all
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
23
hereby shall, as of the Closing, have been duly and validly authorized by the
Board of Directors and Shareholders, and no other corporate proceedings on the
part of the Company are necessary to authorize this Agreement or to consummate
the transactions so contemplated. This Agreement has been duly and validly
executed and delivered by the Company and, assuming this Agreement constitutes a
valid and binding obligation of each of Parent and Merger Sub, this Agreement
constitutes a valid and binding agreement of the Company and the Shareholders,
enforceable against the Company and the Shareholders in accordance with and
subject to its terms and conditions.
SECTION 3.4 Consents and Approvals; No Violation. Except as described
in the Disclosure Schedule, neither the execution and delivery of this Agreement
by the Company nor the consummation of the transactions contemplated hereby nor
compliance by the Company with any of the provisions hereof will (a) conflict
with or result in any breach of any provision of the Articles of Incorporation,
Bylaws or other organization documents of the Company, (b) require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Authority (as defined herein), except the filing of the Articles of
Merger pursuant to the Act, or where the failure to obtain such consent,
approval, authorization or permit, or to make such filing or notification, would
not in the aggregate have a Material Adverse Effect (as defined herein), (c)
result in a material default (with or without due notice or lapse of time or
both) (or give rise to any right of termination, cancellation or acceleration)
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, Contract (as hereinafter defined), license, agreement or other
instrument or obligation to which the Company is a party or by which the Company
or any of its assets may be bound, except for such defaults (or rights of
termination, cancellation or acceleration) as to which requisite waivers or
consents have been requested, (d) result in the creation or imposition of any
lien, charge or other encumbrance on the assets of the Company, or (e) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
the Company or any of its assets.
SECTION 3.5 Taxes, Tax Returns.
(a) The Company has delivered to Parent copies of the federal
income tax returns of the Company for each of the last three fiscal years and
all schedules and exhibits thereto. Except as set forth on the Disclosure
Schedule, the Company has duly and timely filed in correct form all federal,
state and local information returns and tax returns required to be filed by it
on or prior to the date hereof (all such returns to the knowledge of the Company
being accurate and complete in all material respects) and, to the knowledge of
the Company, has duly paid or made provision for the payment of all taxes and
other governmental charges which have been incurred or are due or claimed to be
due from them by any Governmental Authority (including, without limitation,
those due in respect of their properties, income, business, capital stock,
franchises, licenses, sales and payrolls) other than taxes or other charges (i)
which are not yet delinquent or are being contested in good faith and set forth
in the Disclosure Schedule, (ii) have not been finally determined or (iii) that
would not have a Material Adverse Effect on the Company. The liabilities and
reserves for taxes in the Company Financial Statements are sufficient to the
best of the Company's knowledge in the aggregate for the payment of all unpaid
federal, state and local taxes (including any interest or penalties thereon),
24
whether or not disputed or accrued, for the period ended December 31, 2000, or
for any year or period prior thereto, and for which the Company may be liable in
its own right or as transferee of the assets of, or successor to, any
corporation, person, association, partnership, joint venture or other entity.
(b) To the knowledge of the Company, (i) proper and accurate
amounts have been withheld by the Company from its employees and others for all
prior periods in compliance in all material respects with the tax withholding
provisions of applicable federal, state and local laws and regulations, and
proper due diligence steps have been taken in connection with back-up
withholding, (ii) federal, state and local returns which are accurate and
complete in all material respects have been filed by the Company for all periods
for which returns were due with respect to income tax withholding, Social
Security and unemployment taxes and (iii) the amounts shown on such returns to
be due and payable have been paid in full, or adequate provision therefore has
been included by the Company in the most recent Company Financial Statements.
SECTION 3.6 Undisclosed Liabilities. The Company is not liable for or
subject to any material Liabilities (as hereinafter defined), except (a)
Liabilities adequately disclosed or reserved for in the most recent Company
Financial Statements and not heretofore paid or discharged, (b) Liabilities
under any contract, commitment or agreement specifically disclosed on the
Disclosure Schedule, or (c) Liabilities incurred, consistent with past practice,
in or as a result of the ordinary course of business of the Company since the
date of the most recent Company Financial Statements. As used in this Agreement,
the term "Liability" or "Liabilities" includes any material direct or indirect
liability, indebtedness, obligation, guarantee or endorsement (other than
endorsements of notes, bills, and checks presented to banks for collection or
deposit in the ordinary course of business), whether known or unknown, accrued,
absolute, contingent or otherwise.
SECTION 3.7 No Default; Compliance.
(a) Except as set forth in the Disclosure Schedule, the Company is not
in material default under, and no condition exists that with notice or lapse of
time or both would constitute a material default under, (i) any mortgage, loan
agreement, indenture, evidence of indebtedness or other instrument evidencing
borrowed money to which the Company is a party or by which the Company or its
properties is bound, (ii) any judgment, order or injunction of any court,
arbitrator or governmental agency or (iii) any other agreement, contract, lease,
license or other instrument, which default or potential default might reasonably
be expected to have a Material Adverse Effect.
(b) Except as set forth in the Disclosure Schedule, the Company has
complied in all material respects with all laws, regulations, orders, judgments
or decrees of any federal or state court or Governmental Authority applicable to
their respective businesses and operations, non-compliance with which might
reasonably be expected to have a Material Adverse Effect.
SECTION 3.8 Representations and Warranties Continuing. The
representations and warranties set forth herein shall be true and correct on the
date hereof and subject to an update of the Disclosure Schedule from time to
time, at all times prior to the Effective Time as if made from time to time,
including, without limitation, at the Effective Time and the Closing.
25
SECTION 3.9 Compliance with Law and Permits. The Company has owned and
operated its properties and assets in substantial compliance with the provisions
and requirements of all laws, orders, regulations, rules and ordinances issued
or promulgated by all Governmental Authorities having jurisdiction with respect
thereto, except where the failure to own and operate such properties and assets
in compliance with such provisions and requirements would not reasonably be
expected to have a Material Adverse Effect. All material governmental
certificates, consents, permits, licenses or other authorizations with regard to
the ownership or operation by the Company of its properties and assets have been
obtained, and to the knowledge of the Company no violation exists in respect of
such licenses, permits or authorizations, except where the failure to obtain and
hold such permits, or any violation thereof by the Company, would not reasonably
be expected to have a Material Adverse Effect. To the knowledge of the Company,
none of the documents and materials filed with or furnished to any Governmental
Authority with respect to the properties, assets or businesses of the Company
contains any untrue statement of a material fact or fails to state a material
fact necessary to make the statements therein not misleading.
SECTION 3.10 Title to Property. Except as disclosed on the Disclosure
Schedule, the Company has good and marketable title, insured with respect to
properties and assets which currently are of a type for which insurance is
generally available, free and clear (except as indicated in the Disclosure
Statement or in the most recent Company Financial Statements and liens for
current taxes not yet due and payable), of all security interests, liens,
encumbrances and encroachments of a material nature, to its real property and
other property and assets that are material to the Company's business on a
consolidated basis.
SECTION 3.11 Investment Purpose. Each Shareholder will execute a
subscription agreement in the form attached as Exhibit B.
---------
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND MERGER SUB
Parent and Merger Sub jointly and severally represent and warrant to
the Company and Shareholders as follows:
SECTION 4.1 Authority Relative to this Agreement. The Parent and Merger
Sub have all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the Boards of
Directors of the Parent and Merger Sub, and no other corporate proceedings on
the part of the Parent and Merger Sub are necessary to authorize this Agreement
or to consummate the transactions so contemplated. This Agreement has been duly
26
and validly executed and delivered by the Parent and Merger Sub and, assuming
this Agreement constitutes a valid and binding obligation of the Company, this
Agreement constitutes a valid and binding agreement of the Parent and Merger
Sub, enforceable against the Parent and Merger Sub in accordance with and
subject to its terms and conditions.
SECTION 4.2 SEC Reports. Since January 1, 2000, to the best of its
knowledge the Parent has filed all required forms, reports and documents
("Parent SEC Reports") with the Securities and Exchange Commission (the "SEC")
required to be filed by it pursuant to the federal securities laws and the SEC
rules and regulations thereunder, all of which have complied in all material
respects with all applicable requirements of the Securities Act and the
Securities Exchange Act of 1934 (the "Exchange Act"), and the rules and
interpretive releases promulgated thereunder.
SECTION 4.3 Consents and Approvals; No Violation. Except as described
in the Disclosure Schedule, neither the execution and delivery of this Agreement
by the Parent and Merger Sub nor the consummation of the transactions
contemplated hereby nor compliance by the Parent and Merger Sub with any of the
provisions hereof will conflict with or result in any breach of any provision of
the Articles of Incorporation or By-laws of the Parent or Merger Sub, require
any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Authority, except the filing of Articles of
Merger pursuant to the Act, or where the failure to obtain such consent,
approval, authorization or permit, or to make such filing or notification, would
not in the aggregate have a Material Adverse Effect, result in a material
default (with or without due notice or lapse of time or both) (or give rise to
any right of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, Contract,
license, agreement or other instrument or obligation to which the Parent or
Merger Sub is a party or by which the Parent, Merger Sub or any of their
respective assets may be bound, except for such defaults (or rights of
termination, cancellation or acceleration) as to which requisite waivers or
consents have been requested or which, in the aggregate, would not have a
Material Adverse Effect, result in the creation or imposition of any lien,
charge or other encumbrance on the assets of the Parent or Merger Sub, or
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to the Parent, Merger Sub or any of their respective assets, except
for violations which would not in the aggregate have a Material Adverse Effect.
SECTION 4.4 Organization and Qualification. The Parent and Merger Sub
are corporations duly organized, validly existing and in good standing under the
laws of the State of Texas. The Parent and Merger Sub have all requisite power
and authority to own or operate their properties and conduct their business as
they are now being conducted. Each of the Parent and Merger Sub are duly
qualified and in good standing as a foreign corporation or entity authorized to
do business in each of the jurisdictions in which the character of the
properties owned or held under lease by them or the nature of the business
transacted by them makes such qualification necessary, except where the failure
to qualify would not have a Material Adverse Effect. The Parent and Merger Sub
have delivered to the Company true and correct copies of the Articles of
Incorporation and Bylaws of the Parent and Merger Sub.
27
ARTICLE V
COVENANTS
SECTION 5.1 Conduct of Business of the Company. Except as contemplated
by this Agreement or disclosed in the Disclosure Schedule, during the period
from the date of this Agreement to the Effective Time, the Company, Parent and
Merger Sub will each conduct their operations according to their ordinary and
usual course of business and consistent with past practice. Without limiting the
generality of the foregoing, and except as otherwise expressly provided in this
Agreement or disclosed in the Disclosure Schedule, the Company will not, prior
to the Effective Time, without the prior written consent of the Parent (a)
issue, sell or pledge, or authorize or propose the issuance, sale or pledge of
(i) additional shares of capital stock of any class, or securities convertible
into any such shares, or any rights, warrants or options to acquire any such
shares or other convertible securities, or (ii) any other securities in respect
of, in lieu of or in substitution for, capital stock outstanding on the date
hereof; (b) purchase or otherwise acquire, or propose to purchase or otherwise
acquire, any outstanding securities; (c) declare or pay any dividend or
distribution on any shares of its capital stock; (d) authorize, recommend,
propose or announce an intention to authorize, recommend or propose, or enter
into an agreement in principle or an agreement with respect to, any merger,
consolidation or business combination (other than the Merger), any acquisition
of a material amount of assets or securities, any disposition of a material
amount of assets or securities or any material change in its capitalization, or
any entry into a material contract or any release or relinquishment of any
material contract rights, not in the ordinary course of business; (e) propose or
adopt any amendments to its charter or by-laws; (f) enter into, assign or
terminate, or amend in any material respect, any contract other than in the
ordinary course of business; (g) acquire, dispose of, encumber or relinquish any
material asset (other than sale of real properties at prices equal to or greater
than their carrying values); (h) waive, compromise or settle any right or claim
that would adversely affect the ownership, operation or value of any asset; (i)
make any capital expenditures other than pursuant to existing capital
expenditure programs that are disclosed in the Disclosure Schedule; (j) allow or
permit the expiration, termination or cancellation at any time prior to the
Effective Time of any of the insurance policies or coverages or surety bonds
currently maintained unless replaced with a policy, coverage or bond having
substantially the same coverage and similar terms and conditions; (k) increase,
directly or indirectly, the salary or other compensation of any officer or
member of management, enter into any employment agreement with any person or pay
or enter into any agreement to pay any bonuses or other extraordinary
compensation to any officer or to any member of management or other employees,
or institute any general increase in rates of compensation for its employees, or
increase, directly or indirectly, any provisions or other benefits of any of
such persons; or (l) waive, settle or compromise any material litigation or
other claim on a basis materially adverse.
SECTION 5.2 No Solicitations. The Company shall not, and it shall use
its best efforts to ensure that none of its respective affiliates, officers,
directors, representatives or agents shall, directly or indirectly, solicit,
initiate or encourage (including by way of furnishing information) any
corporation, partnership, person, entity or group concerning any merger, sale of
substantial assets (except as permitted by Section 5.1(g)) outside the ordinary
course of business, sale of shares of capital stock or similar transaction
involving the Company (other than the transactions contemplated by this
28
Agreement). The Company will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing. The parties will promptly
communicate to the other the terms of any proposal or inquiry, oral or written,
which may be received in respect of any such transaction, and will inform the
other prior to the time that it furnishes any information to, or engages in
negotiations or discussions with, any third party with respect to the
acquisition of either party.
SECTION 5.3 Access to Information.
(a) Between the date of this Agreement and the Effective Time, the
parties will afford to one another and their authorized representatives
reasonable access to the properties and to the books and records of such party,
will permit the parties and their representatives to make such reasonable
inspections as they may require and will cause their officers to furnish the
parties and their representatives with such financial and operating data,
environmental assessments and other information with respect to the business and
properties of the parties as they and their representatives may from time to
time reasonably request. No inspection or examination by either party will
constitute a waiver of any claim against the other party for misrepresentation
or breach of this Agreement.
(b) The parties will hold and will cause their representatives to hold
in strict confidence, unless compelled to disclose by judicial or administrative
process, or, in the opinion of counsel, by other requirements of law, all
documents and information concerning the parties furnished to them and their
representatives in connection with the transactions contemplated by this
Agreement (except to the extent that such information can be shown to have been
(i) in the public domain through no fault of the parties or their
representatives, or (ii) later lawfully acquired by the parties or their
representatives from other sources unless they or their representatives know
that such other sources are not entitled to disclose such information) and will
not release or disclose such information to any other person, except their
auditors, attorneys, financial advisors and other consultants and advisors in
connection with this Agreement, provided that such person shall have first been
advised of the confidentiality provision of this Section 5.3. If the
transactions contemplated by this Agreement are not consummated, such confidence
shall be maintained except to the extent such information can be shown to have
been (i) in the public domain through no fault of the Company, Parent, Merger
Sub or their representatives, or (ii) later lawfully acquired by the parties or
representatives from other sources, and, if requested by the other party will,
and will cause its agents, auditors, consultants, representatives and advisors
to, return to the other or destroy all copies of written information furnished.
SECTION 5.4 Best Efforts. Subject to the terms and conditions herein
provided, and to the fiduciary duties of the Boards of Directors of the parties
under applicable law, each of the parties hereto agrees to use its best efforts
to take, or cause to be taken, all action, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
In case at any time after the Effective Time any further action is necessary or
29
desirable to carry out the purposes of this Agreement, the proper officers and
directors of each party to this Agreement shall take all such necessary action.
SECTION 5.5 Consents. Parent and the Company each will use its best
efforts to obtain such consents of third parties to agreements which would
otherwise be violated by any provisions hereof, to take all actions necessary to
effect the transactions contemplated hereby, and to make such filings with
Governmental Authorities necessary to consummate the transactions contemplated
by this Agreement including, without limitation, (a) the vigorous defense of any
lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transaction contemplated
hereby, including seeking to have any stay or temporary restraining order
entered by any court or Governmental Authority vacated or reviewed, and (b) the
execution and delivery of any additional instruments (including any required
supplemental indentures) necessary to consummate the transactions contemplated
by this Agreement.
SECTION 5.6 Public Announcements. Parent and the Company will consult
with each other before issuing any press release or otherwise making any public
statements with respect to the existence of this Agreement or the Merger and
shall not issue any such press release or make any such public statement prior
to such consultation, except as may be required by law or by obligations
pursuant to any listing agreement with any national securities exchange.
SECTION 5.7 Other Documents. This Agreement is being closed
simultaneously with the following additional agreements: Agreement and Plan of
Merger between the Parent, its merger subsidiaries, and each of CKS Management,
Inc. and Epic Communications, Inc.
ARTICLE VI
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 6.1 Company's Conditions to the Closing. Immediately prior to
the Closing, the Parent and Merger Sub shall have satisfied each of the
following conditions, any of which may be waived in the Company's sole
discretion:
(a) A certificate, dated the date of the Closing of the chief
executive officer of Parent certifying that all representations and warranties
made in Article III herein are true and correct as of the date made and as of
the Closing and that all agreements or other actions required to be performed
prior to the Closing by Parent or Merger Sub as a condition to consummating the
Merger have been performed or taken and such conditions satisfied in accordance
with the terms of this Agreement.
(b) No statute, rule, regulation, executive order, decree, or
injunction shall have been enacted, entered, promulgated or enforced by any
court of competent jurisdiction in the United States or domestic Governmental
Authority which prohibits or restricts the consummation of the Merger.
(c) All parties shall have delivered all documents, exhibits and
schedules and taken all other actions required by this Agreement.
30
(d) All representations and warranties of any party shall be true
and effective as of the Closing.
(e) The Other Agreements shall have been executed and delivered.
(f) The Parent shall have obtained bank debt financing in an
amount sufficient for payment of the cash portion of the Merger Consideration.
SECTION 6.2 Parent's Conditions to the Closing. Immediately prior to
the Closing, the Company and Shareholders shall have satisfied each of the
following conditions, any of which may be waived in Parent's sole discretion:
(a) A certificate, dated the date of the Closing of the chief
executive officer of the Company certifying that all representations and
warranties made in Article III herein are true and correct as of the date made
and as of the Closing and that all agreements or other actions required to be
performed prior to the Closing by the Company as a condition to consummating the
Merger have been performed or taken and such conditions satisfied in accordance
with the terms of this Agreement.
(b) No statute, rule, regulation, executive order, decree, or
injunction shall have been enacted, entered, promulgated or enforced by any
court of competent jurisdiction in the United States or domestic Governmental
Authority which prohibits or restricts the consummation of the Merger.
(c) There shall have been no material adverse change in the
business, properties, or financial condition of the Company to this Agreement.
(d) All parties shall have delivered all documents, exhibits and
schedules and taken all other actions required by this Agreement.
(e) All representations and warranties of any party shall be true
and effective as of the Closing.
(f) The Other Agreements shall have been executed and delivered.
(g) The Parent shall have completed its review of the books,
records, properties and other legal and financial matters pertaining to the
Company and shall be satisfied with the results of such review.
(h) The Parent shall have obtained bank debt financing in an
amount sufficient for payment of the cash portion of the Merger Consideration.
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ARTICLE VII
TERMINATION, AMENDMENTS; WAIVER
SECTION 7.1 Termination. This Agreement may be terminated and the
Merger contemplated hereby may be abandoned at any time notwithstanding approval
thereof by the Parent and Company, but prior to the Closing:
(a) by mutual written consent duly authorized by the Boards of
Directors of Company, Parent and Merger Sub;
(b) by Parent or the Company if any court of competent
jurisdiction or other Governmental Authority shall have issued an order, decree
or ruling or taken any other action restraining, enjoining or otherwise
prohibiting the Merger or if litigation or proceedings shall be pending that are
reasonably likely to result in any of the foregoing;
(c) by the Company, if Parent or Merger Sub shall not have
performed all obligations required to be performed by them under this Agreement,
except where any failure to perform would, in the aggregate, not materially
impair or delay the ability of Parent, Merger Sub and the Company to effect the
Merger; or
(d) by the Parent, if there shall have been a breach of any of the
covenants contained herein or if any representation or warranty made by the
Company is untrue in any material respect.
SECTION 7.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 7.1, this Agreement shall
forthwith become void and have no effect, without any liability on the part of
any party or its directors, officers, or stockholders, other than the provisions
of Sections 5.3(b) and 9.9. In such event, the mergers shall be rescinded by
conveying to the Shareholders the shares representing ownership of the Merger
Subs.
SECTION 7.3 Amendment. This Agreement may be amended only by means of
an instrument in writing signed on behalf of all the parties.
SECTION 7.4 Extension; Waiver. At any time prior to the Closing, the
parties hereto, by action taken by or on behalf of the respective Boards of
Directors of the Company, Parent and Merger Sub, may (a) extend the time for the
performance of any of the obligations or other acts of any other applicable
party hereto, (b) waive any inaccuracies in the representations and warranties
contained herein by any other applicable party or in any document, certificate
or writing delivered pursuant hereto by an other applicable party, or (c) waive
compliance with any of the agreements of any other applicable party or with any
conditions to its own obligations. Any agreement on the part of any other
applicable party to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party.
32
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Parent and Merger Sub's Right to Indemnification. Company
and the Shareholders shall and do hereby, jointly and severally, indemnify and
hold harmless, Parent, Merger Sub, and their stockholders, directors, officers,
employees, agents and representatives from any and all liabilities, obligations,
claims, contingencies, damages, costs and expenses (including all court costs
and reasonable attorneys' fees) that Merger Sub or any such other indemnified
party may suffer or incur as a result of or relating to the material breach or
inaccuracy of any of the representations, warranties, covenants or agreements
made by Company and the Shareholders herein or pursuant hereto.
SECTION 8.2 Company's Right to Indemnification. Merger Sub and Parent
shall and do hereby indemnify and hold Company and the Shareholders, and its
directors, officers, employees, shareholders, agents and representatives
harmless from any and all liabilities, obligations, claims, contingencies,
damages, costs and expenses (including all court costs and reasonable attorneys'
fees) that Company or any such indemnified party may suffer or incur as a result
of or relating to: (a) the breach or inaccuracy, or any alleged breach or
inaccuracy, of any of the representations, warranties, covenants or agreements
made by Merger Sub and Parent herein or pursuant hereto; and (b) those
liabilities, obligations, claims, contingencies and encumbrances accruing or
arising after the Closing in connection with the business of the Parent, except
to the extent that such liabilities, obligations, claims, contingencies or
encumbrances are attributable to a breach of warranty, representation or
covenant by Company prior to the Closing.
SECTION 8.3 Notice. The party seeking indemnification hereunder
("Indemnitee") shall promptly, and within 30 days after notice to it (notice to
Indemnitee being the filing of any action, receipt of any claim in writing or
similar form of actual notice) of any claim as to which it asserts a right to
indemnification, notify the party from whom indemnification is sought
("Indemnitor") of such claim. Indemnitee shall xxxx Indemnitor for any such
claims no more frequently than on a monthly basis, and Indemnitor shall promptly
pay (or cause to be paid) Indemnitee upon receipt of any such xxxx. The failure
of Indemnitee to give the notification to Indemnitor contemplated above in this
Section shall not relieve Indemnitor from any liability or obligation that it
may have pursuant to this Agreement unless the failure to give such notice
within such time shall have been materially prejudicial to it, and in no event
shall the failure to give such notification relieve Indemnitor from any
liability it may have other than pursuant to this Agreement.
SECTION 8.4 Third-Party Claims. If any claim for indemnification by
Indemnitee arises out of an action or claim by a person other than Indemnitee,
Indemnitor may, by written notice to Indemnitee, undertake to conduct the
defense thereof and to take all other steps or proceedings to defeat or
compromise any such action or claim, including the employment of counsel to be
mutually agreed upon; provided that Indemnitor shall reasonably consider the
advice of Indemnitee as to the defense or compromise of such actions and claims,
and Indemnitee shall have the right to participate, at its own expense, in such
proceedings, but control of such proceedings shall remain exclusively with
Indemnitor. Indemnitee shall provide all reasonable cooperation to Indemnitor in
33
connection with such proceedings. Counsel and auditor costs and expenses and
court costs and fees of all proceedings with respect to any such action or claim
shall be borne by Indemnitor. If any such claim is made hereunder and Indemnitor
does not elect to undertake the defense thereof by written notice to Indemnitee,
Indemnitee shall be entitled to control such proceedings and shall be entitled
to indemnity with respect thereto pursuant to the terms of this Article VIII. To
the extent that Indemnitor undertakes the defense of such claim by written
notice to Indemnitee and diligently pursues such defense at its expense,
Indemnitee shall be entitled to indemnification hereunder only to the extent
that such defense is unsuccessful as determined by a final judgment of a court
of competent jurisdiction, or by written acknowledgment of the parties.
SECTION 8.5 Time to Assert Claims. Any claim asserted pursuant to
Section 8.1 or Section 8.2 above must be asserted by written notice given by one
party to the other on or before the one (1) year anniversary from the date of
Closing.
SECTION 8.6 Access to Records. All parties and their agents shall be
afforded reasonable access to the Parent's and Merger Sub's books and records
during normal business hours upon reasonable notice for the purpose of verifying
any claim hereunder. Such party or its agents may be required to sign an
appropriate confidentiality agreement prior to any inspection of books and
records hereunder.
SECTION 8.7 Offset Right. Any claims under this Article VIII may be
satisfied by offsetting any obligation owed to such party.
SECTION 8.8 Arbitration. All disputes under this Article VIII shall be
settled by arbitration in Dallas, Texas, before three arbitrators pursuant to
the rules of the American Arbitration Association. Each party shall select one
arbitrator and the two arbitrators shall select a third. Arbitration may be
commenced at any time by any party hereto giving written notice to each other
party to a dispute that such dispute has been referred to arbitration under this
Section 8.8. Any award rendered by the arbitrators shall be conclusive and
binding upon the parties hereto; provided, however, that any such award shall be
accompanied by a written opinion giving the reasons for the award. This
provision for arbitration shall be specifically enforceable by the parties and
the decision of the arbitrators shall be final and binding and there shall be no
right of appeal therefrom. Each party shall pay its own expenses of arbitration
and the expenses of the arbitrators shall be equally shared; provided, however,
that if in the opinion of the arbitrators any claim for indemnification or any
defense or objection thereto was unreasonable, the arbitrators may assess, as
part of their award, all or any part of the arbitration expenses of the other
party (including reasonable attorney's fees) and of the arbitrators against the
party raising such unreasonable claim, defense or objection.
34
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person or persons any rights, benefits or remedies of any nature whatsoever
under or by reason of this Agreement.
SECTION 9.2 Brokerage Fees and Commissions. Each party represents that
it has incurred no obligation to any broker or finder in connection with the
transactions described in this Agreement and agrees to indemnify the other
parties and hold them harmless against any liability to any such broker or
finder.
SECTION 9.3 Entire Agreement; Assignment. This Agreement (a)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties or any of them with respect to the subject
matter hereof and (b) shall not be assigned by operation of law or otherwise.
SECTION 9.4 Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, each of which shall remain in full force
and effect.
SECTION 9.5 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by facsimile telegram or telex, or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties as follows:
If to the Company, Parent or Merger Sub:
Mr. P. Xxxxx Xxxxxxx
000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx 00000 FAX: 000-000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
SECTION 9.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, REGARDLESS OF THE
LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF
LAWS THEREOF.
35
SECTION 9.7 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
SECTION 9.10 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same agreement.
SECTION 9.11 Expenses. Except as otherwise provided herein, the Parent,
Merger Sub and Company shall bear and pay all costs and expenses incurred by it
or on its behalf in connection with the transactions contemplated hereunder,
including fees and expenses of its own financial or other consultants,
investment bankers, accountants and counsel.
SECTION 9.12 Performance by Merger Sub. Parent agrees to cause Merger
Sub to comply with its obligations hereunder and to cause Merger Sub to
consummate the Merger as contemplated herein.
SECTION 9.13 Disclosure Schedule. Upon the execution hereof, the
Company and the Parent shall deliver the Disclosure Schedule to each other. The
Disclosure Schedule shall be updated from time to time and prior to the Closing
to report any changes in the information contained therein. The Disclosure
Schedule shall contain all information required to disclose fully any exception
or qualification to this Agreement and shall cross reference the section of this
Agreement so qualified.
ARTICLE X.
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
meanings set forth below:
"Action" shall mean any action, suit, litigation, complaint,
counterclaim, claim, petition, mediation contest, or administrative proceeding,
whether at law, in equity, in arbitration or otherwise, and whether conducted by
or before any Government or other Person.
"Business" shall mean the business of owning and operating the
communication equipment business as conducted prior to the Closing by Seller.
"Closing" shall have the meaning set forth in Section 1.8 hereof.
"Closing Date" shall mean the time and date that the Closing occurs.
"Code" shall mean the United States Internal Revenue Code of 1986, as
amended, and all regulations thereunder. Any reference herein to a specific
section or sections of the Code shall be deemed to include a reference to any
corresponding provision of future law.
36
"Consents" shall mean all consents, approvals, and estoppels of others
which are required to be obtained in order to effect the valid assignment,
transfer, and conveyance to Parent of the Business.
"Contracts" shall mean all contracts, agreements, and leases of
equipment or other personal property that relate exclusively to the Business.
"Default" shall mean an event of default as defined in any contract or
other agreement or instrument, or any event which, with the passage of time or
giving of notice or both, would constitute an event of default or other breach
under such document or instrument.
"Disclosure Schedule" shall mean the set of numbered schedules
referencing Sections of this Agreement delivered by Seller and dated of even
date herewith, as supplemented by new or amended schedules delivered by Seller
prior to the Closing.
"Effective Time" shall have the meaning set forth in Section 1.2
hereof.
"Forum" shall mean any federal, state, local, municipal, or foreign
court, governmental agency, administrative body or agency, tribunal, private
alternative dispute resolution system, or arbitration panel.
"Government" shall mean any federal, state, local, municipal, or
foreign government or any department, commission, board, bureau, agency,
instrumentality, unit, or taxing authority thereof.
"Material Adverse Effect" shall mean any adverse change in the
financial condition, assets, business or operations of any party and its
subsidiaries which is material to such party taken as a whole.
"Orders" shall mean all applicable orders, writs, judgments, decrees,
rulings, consent agreements, and awards of or by any Forum or entered by consent
of the party to be bound.
"Person" shall include an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization, a government, and any other legal entity.
"Schedules" shall mean the numbered sections of the Disclosure
Schedule.
"Subsidiary" shall mean, when used with reference to an entity, any
corporation, a majority of the outstanding voting securities of which are owned
directly or indirectly by such entity. Such term shall also refer to any other
partnership, limited partnership, joint venture, trust, or other business entity
in which a party hereto owns a material interest.
37
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
day and year set forth above.
MICROWAVE TRANSMISSION SYSTEMS, INC.,
a Texas corporation
By: /s/ P. Xxxxx Xxxxxxx
-------------------------------------------
P Xxxxx Xxxxxxx, President
MTSI/VCS ACQUISITION CORP.,
a Texas corporation
By: /s/ P. Xxxxx Xxxxxxx
-------------------------------------------
P. Xxxxx Xxxxxxx, President
VIPER COMMUNICATION SYSTEMS, INC.,
a Texas corporation
By: /s/ Xxxxx X. Xxxxxx, Xx.
-------------------------------------------
Xxxxx X. Xxxxxx, Xx., President
/s/ P. Xxxxx Xxxxxxx
-------------------------------------------
P. Xxxxx Xxxxxxx
/s/ Xxxxx Xxxxxx
-------------------------------------------
Xxxxx Xxxxxx
/s/ Xxxxxx Xxxxx
-------------------------------------------
Xxxxxx Xxxxx
38
EXHIBIT 2.2.3.
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER ("Agreement"), dated as of August 19,
2001, among EPIC COMMUNICATIONS, INC. a Texas corporation (the "Company"),
MICROWAVE TRANSMISSION SYSTEMS, INC., a Texas corporation (the "Parent");
MTSI/ECI ACQUISITION CORP., a Texas corporation, and a wholly owned subsidiary
of Parent ("Merger Sub"), and P. Xxxxx Xxxxxxx and Xxxxxx Xxxxxxx, as the
shareholders of the Company (the "Shareholders").
WHEREAS, the respective Boards of Directors of Parent, the Merger Sub,
the Shareholders and the Company have duly approved the acquisition of the
Merger Sub by means of a Merger of the Company with and into the Merger Sub
pursuant to the terms of this Agreement, it is therefore agreed as follows:
ARTICLE I
THE MERGER
SECTION 1.1 The Merger. Upon the terms and subject to the conditions
hereof, and in accordance with the relevant provisions of the Texas Business
Corporation Act (the "Act"), the Merger Sub shall be merged with the Company
(the "Merger") as soon as practicable following the satisfaction or waiver, if
permissible, of the conditions set forth in Article VI hereof. Following the
Merger, the Merger Sub shall continue as the surviving corporation (the
"Surviving Corporation") and continue its existence under the laws of the State
of Texas, and the separate corporate existence of the Company shall cease. The
Merger Sub shall change its name to the same as that of the Company.
SECTION 1.2 Effective Time. The Merger shall be consummated by filing
with the Secretary of State of Texas the Articles of Merger in the form attached
hereto as Exhibit "A" (the "Articles of Merger") (the time of such filing being
the "Effective Time").
SECTION 1.3 Effects of the Merger. The Merger shall have the effects
set forth in Article 5.06 of the Act. As of the Effective Time, the Company
shall merge with and into the Merger Sub, and the Merger Sub shall remain a
direct wholly owned Subsidiary of Parent. It is the intention of the parties
that the Merger will constitute a tax-free reorganization pursuant to the
provisions of Section 368(a)(1)(A) of the Internal Revenue Code of 1986 (as
amended) (the "Code") and a part of the transaction described in Section 5.9.
SECTION 1.4 Articles of Incorporation and Bylaws. The Articles of
Incorporation of the Merger Sub and the Bylaws of the Merger Sub, both as in
effect at the Effective Time, shall be the Articles of Incorporation and Bylaws
of the Surviving Corporation.
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SECTION 1.5 Directors. As of the Effective Time, all directors of the
Merger Sub shall remain the directors of the Surviving Corporation.
SECTION 1.6 Officers. Upon execution of this Agreement and satisfaction
of all conditions to the Closing of the Merger, the officers of
the Merger Sub will remain as the officers of the Surviving
Corporation as of the Effective Time.
SECTION 1.7 Transfer of and Payment for Shares.
(a) Each share of common stock, par value $1.00, and each share of
Preferred Stock, par value $1.00 per share ("Shares"), of the Company issued and
outstanding immediately prior to the Effective Time, shall, by virtue of the
Merger and without any action on the part of any holder thereof, be cancelled
and reissued as cash and newly issued, fully paid, and non-assessable shares of
the common stock of the Parent. Until surrendered in accordance with the
provisions of this Section, each certificate representing Shares of the Company
shall represent for all purposes the right to receive the Merger Consideration.
At and after the Effective Time there shall be no transfers of Shares which were
outstanding immediately prior to the Effective Time on the stock transfer books
of the Company. From and after the Effective Time, holders of certificates
formerly evidencing Shares of the Company shall cease to have any rights as
stockholders of the Company, except as provided herein or by law.
(b) In exchange for the cancelled shares of the Company, the
Shareholders shall be entitled to receive the following (referred to as the
"Merger Consideration"): $341,515 cash by means of wire transfer to the accounts
specified in the Disclosure Schedule, and 1,350,000 shares of the common stock,
par value $0.001 per share of the Parent, to be issued in the names and
denominations set forth in the Disclosure Schedule. The amount of cash included
in the Merger Consideration is based upon $400,000 less $58,485 of assumed
deferred tax liabilities. The Merger Consideration shall be paid to the
Shareholders at the Closing.
(c) The Merger Consideration shall be subject to adjustment as
follows: The financial statements of the Surviving Corporation shall be prepared
for the fiscal year ending December 31, 2001, including the performance of the
Company for the portion of 2001 prior to the Closing. Such financial statements
shall be audited in accordance with generally accepted accounting principles by
the Parent's auditing firm or its designee. If the net earnings of the Surviving
Corporation after a provision for income tax shall be greater than $350,000, the
Parent will issue additional shares of its common stock within 30 days after the
issue date of the audit report, equal to five times each $1.00 of net earnings
in excess of $350,000, based upon the average closing price of Parent's Common
Stock for the five trading days prior to the issuance of the audit report.
SECTION 1.8 Closing. Upon the terms and subject to the conditions
hereof, as soon as practicable after the mutual agreement of the Company, the
Parent and the Merger Sub that all conditions described in Article VI have been
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satisfied or waived by the applicable party, a closing (the "Closing") will be
held at an agreed location for the purpose of implementing all transactions
described in this Agreement.
SECTION 1.9 Excluded Assets. Prior to the Effective Time, the Company
shall take appropriate action to convey to the Shareholders any assets and any
liabilities associated with such assets that are listed in the Disclosure
Schedule and agreed to by Parent.
ARTICLE II
APPRAISAL RIGHTS
SECTION 2.1 Stockholders Rights. By virtue of the Act, the stockholders
of the Company are entitled to exercise any appraisal rights in connection with
the Merger. It is a condition to Parent's and Merger Sub's obligation to
complete the Merger and that no stockholder of the Company shall exercise any
dissenter's rights.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company and Shareholders jointly and severally represent and
warrant to the Parent and the Merger Sub as follows:
SECTION 3.1 Organization and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Texas. The Company has no subsidiaries. The Company has all
requisite power and authority to own or operate its properties and conduct its
business as it is now being conducted. The Company is duly qualified and in good
standing as a foreign corporation or entity authorized to do business in each of
the jurisdictions in which the character of the properties owned or held under
lease by it or the nature of the business transacted by it makes such
qualification necessary, except where the failure to qualify would not have a
Material Adverse Effect. The Company has delivered to the Parent and Merger Sub
true and correct copies of the Articles of Incorporation and Bylaws of the
Company.
SECTION 3.2 Capitalization. The authorized capital stock of the Company
consists of 1,000,000 Shares of Common Stock, par value $1.00, and 1,000,000
shares of Preferred Stock, par value $1.00. As of June 30, 2001, 990 shares of
Common Stock and 10 shares of Preferred Stock were issued and outstanding.
Except as described in the Disclosure Schedule, since June 30, 2001, the Company
has not issued any shares or other capital stock, and has not repurchased or
redeemed any Shares. All issued and outstanding Shares are validly issued, fully
paid, non-assessable and free of preemptive rights.
SECTION 3.3 Authority Relative to this Agreement. The Company has all
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
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hereby shall, as of the Closing, have been duly and validly authorized by the
Board of Directors and Shareholders, and no other corporate proceedings on the
part of the Company are necessary to authorize this Agreement or to consummate
the transactions so contemplated. This Agreement has been duly and validly
executed and delivered by the Company and, assuming this Agreement constitutes a
valid and binding obligation of each of Parent and Merger Sub, this Agreement
constitutes a valid and binding agreement of the Company and the Shareholders,
enforceable against the Company and the Shareholders in accordance with and
subject to its terms and conditions.
SECTION 3.4 Consents and Approvals; No Violation. Except as described
in the Disclosure Schedule, neither the execution and delivery of this Agreement
by the Company nor the consummation of the transactions contemplated hereby nor
compliance by the Company with any of the provisions hereof will (a) conflict
with or result in any breach of any provision of the Articles of Incorporation,
Bylaws or other organization documents of the Company, (b) require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Authority (as defined herein), except the filing of the Articles of
Merger pursuant to the Act, or where the failure to obtain such consent,
approval, authorization or permit, or to make such filing or notification, would
not in the aggregate have a Material Adverse Effect (as defined herein), (c)
result in a material default (with or without due notice or lapse of time or
both) (or give rise to any right of termination, cancellation or acceleration)
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, Contract (as hereinafter defined), license, agreement or other
instrument or obligation to which the Company is a party or by which the Company
or any of its assets may be bound, except for such defaults (or rights of
termination, cancellation or acceleration) as to which requisite waivers or
consents have been requested, (d) result in the creation or imposition of any
lien, charge or other encumbrance on the assets of the Company, or (e) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
the Company or any of its assets.
SECTION 3.5 Taxes, Tax Returns.
(a) The Company has delivered to Parent copies of the federal
income tax returns of the Company for each of the last three fiscal years and
all schedules and exhibits thereto. Except as set forth on the Disclosure
Schedule, the Company has duly and timely filed in correct form all federal,
state and local information returns and tax returns required to be filed by it
on or prior to the date hereof (all such returns to the knowledge of the Company
being accurate and complete in all material respects) and, to the knowledge of
the Company, has duly paid or made provision for the payment of all taxes and
other governmental charges which have been incurred or are due or claimed to be
due from them by any Governmental Authority (including, without limitation,
those due in respect of their properties, income, business, capital stock,
franchises, licenses, sales and payrolls) other than taxes or other charges (i)
which are not yet delinquent or are being contested in good faith and set forth
in the Disclosure Schedule, (ii) have not been finally determined or (iii) that
would not have a Material Adverse Effect on the Company. The liabilities and
reserves for taxes in the Company Financial Statements are sufficient to the
best of the Company's knowledge in the aggregate for the payment of all unpaid
federal, state and local taxes (including any interest or penalties thereon),
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whether or not disputed or accrued, for the period ended December 31, 2000, or
for any year or period prior thereto, and for which the Company may be liable in
its own right or as transferee of the assets of, or successor to, any
corporation, person, association, partnership, joint venture or other entity.
(b) To the knowledge of the Company, (i) proper and accurate
amounts have been withheld by the Company from its employees and others for all
prior periods in compliance in all material respects with the tax withholding
provisions of applicable federal, state and local laws and regulations, and
proper due diligence steps have been taken in connection with back-up
withholding, (ii) federal, state and local returns which are accurate and
complete in all material respects have been filed by the Company for all periods
for which returns were due with respect to income tax withholding, Social
Security and unemployment taxes and (iii) the amounts shown on such returns to
be due and payable have been paid in full, or adequate provision therefore has
been included by the Company in the most recent Company Financial Statements.
SECTION 3.6 Undisclosed Liabilities. The Company is not liable for or
subject to any material Liabilities (as hereinafter defined), except (a)
Liabilities adequately disclosed or reserved for in the most recent Company
Financial Statements and not heretofore paid or discharged, (b) Liabilities
under any contract, commitment or agreement specifically disclosed on the
Disclosure Schedule, or (c) Liabilities incurred, consistent with past practice,
in or as a result of the ordinary course of business of the Company since the
date of the most recent Company Financial Statements. As used in this Agreement,
the term "Liability" or "Liabilities" includes any material direct or indirect
liability, indebtedness, obligation, guarantee or endorsement (other than
endorsements of notes, bills, and checks presented to banks for collection or
deposit in the ordinary course of business), whether known or unknown, accrued,
absolute, contingent or otherwise.
SECTION 3.7 No Default; Compliance.
(a) Except as set forth in the Disclosure Schedule, the Company is
not in material default under, and no condition exists that with notice or lapse
of time or both would constitute a material default under, (i) any mortgage,
loan agreement, indenture, evidence of indebtedness or other instrument
evidencing borrowed money to which the Company is a party or by which the
Company or its properties is bound, (ii) any judgment, order or injunction of
any court, arbitrator or governmental agency or (iii) any other agreement,
contract, lease, license or other instrument, which default or potential default
might reasonably be expected to have a Material Adverse Effect.
(b) Except as set forth in the Disclosure Schedule, the Company
has complied in all material respects with all laws, regulations, orders,
judgments or decrees of any federal or state court or Governmental Authority
applicable to their respective businesses and operations, non-compliance with
which might reasonably be expected to have a Material Adverse Effect.
SECTION 3.8 Representations and Warranties Continuing. The
representations and warranties set forth herein shall be true and correct on the
date hereof and subject to an update of the Disclosure Schedule from time to
time, at all times prior to the Effective Time as if made from time to time,
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including, without limitation, at the Effective Time and the Closing.
SECTION 3.9 Compliance with Law and Permits. The Company has owned and
operated its properties and assets in substantial compliance with the provisions
and requirements of all laws, orders, regulations, rules and ordinances issued
or promulgated by all Governmental Authorities having jurisdiction with respect
thereto, except where the failure to own and operate such properties and assets
in compliance with such provisions and requirements would not reasonably be
expected to have a Material Adverse Effect. All material governmental
certificates, consents, permits, licenses or other authorizations with regard to
the ownership or operation by the Company of its properties and assets have been
obtained, and to the knowledge of the Company no violation exists in respect of
such licenses, permits or authorizations, except where the failure to obtain and
hold such permits, or any violation thereof by the Company, would not reasonably
be expected to have a Material Adverse Effect. To the knowledge of the Company,
none of the documents and materials filed with or furnished to any Governmental
Authority with respect to the properties, assets or businesses of the Company
contains any untrue statement of a material fact or fails to state a material
fact necessary to make the statements therein not misleading.
SECTION 3.10 Title to Property. Except as disclosed on the Disclosure
Schedule, the Company has good and marketable title, insured with respect to
properties and assets which currently are of a type for which insurance is
generally available, free and clear (except as indicated in the Disclosure
Statement or in the most recent Company Financial Statements and liens for
current taxes not yet due and payable), of all security interests, liens,
encumbrances and encroachments of a material nature, to its real property and
other property and assets that are material to the Company's business on a
consolidated basis.
SECTION 3.11 Investment Purpose. Each Shareholder will execute a
subscription agreement in the form attached as Exhibit B.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND MERGER SUB
Parent and Merger Sub jointly and severally represent and warrant to
the Company and Shareholders as follows:
SECTION 4.1 Authority Relative to this Agreement. The Parent and Merger
Sub have all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the Boards of
Directors of the Parent and Merger Sub, and no other corporate proceedings on
the part of the Parent and Merger Sub are necessary to authorize this Agreement
or to consummate the transactions so contemplated. This Agreement has been duly
and validly executed and delivered by the Parent and Merger Sub and, assuming
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this Agreement constitutes a valid and binding obligation of the Company, this
Agreement constitutes a valid and binding agreement of the Parent and Merger
Sub, enforceable against the Parent and Merger Sub in accordance with and
subject to its terms and conditions.
SECTION 4.2 SEC Reports. Since January 1, 2000, to the best of its
knowledge the Parent has filed all required forms, reports and documents
("Parent SEC Reports") with the Securities and Exchange Commission (the "SEC")
required to be filed by it pursuant to the federal securities laws and the SEC
rules and regulations thereunder, all of which have complied in all material
respects with all applicable requirements of the Securities Act and the
Securities Exchange Act of 1934 (the "Exchange Act"), and the rules and
interpretive releases promulgated thereunder.
SECTION 4.3 Consents and Approvals; No Violation. Except as described
in the Disclosure Schedule, neither the execution and delivery of this Agreement
by the Parent and Merger Sub nor the consummation of the transactions
contemplated hereby nor compliance by the Parent and Merger Sub with any of the
provisions hereof will conflict with or result in any breach of any provision of
the Articles of Incorporation or By-laws of the Parent or Merger Sub, require
any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Authority, except the filing of Articles of
Merger pursuant to the Act, or where the failure to obtain such consent,
approval, authorization or permit, or to make such filing or notification, would
not in the aggregate have a Material Adverse Effect, result in a material
default (with or without due notice or lapse of time or both) (or give rise to
any right of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, Contract,
license, agreement or other instrument or obligation to which the Parent or
Merger Sub is a party or by which the Parent, Merger Sub or any of their
respective assets may be bound, except for such defaults (or rights of
termination, cancellation or acceleration) as to which requisite waivers or
consents have been requested or which, in the aggregate, would not have a
Material Adverse Effect, result in the creation or imposition of any lien,
charge or other encumbrance on the assets of the Parent or Merger Sub, or
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to the Parent, Merger Sub or any of their respective assets, except
for violations which would not in the aggregate have a Material Adverse Effect.
SECTION 4.4 Organization and Qualification. The Parent and Merger Sub
are corporations duly organized, validly existing and in good standing under the
laws of the State of Texas. The Parent and Merger Sub have all requisite power
and authority to own or operate their properties and conduct their business as
they are now being conducted. Each of the Parent and Merger Sub are duly
qualified and in good standing as a foreign corporation or entity authorized to
do business in each of the jurisdictions in which the character of the
properties owned or held under lease by them or the nature of the business
transacted by them makes such qualification necessary, except where the failure
to qualify would not have a Material Adverse Effect. The Parent and Merger Sub
have delivered to the Company true and correct copies of the Articles of
Incorporation and Bylaws of the Parent and Merger Sub.
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ARTICLE V
COVENANTS
SECTION 5.1 Conduct of Business of the Company. Except as contemplated
by this Agreement or disclosed in the Disclosure Schedule, during the period
from the date of this Agreement to the Effective Time, the Company, Parent and
Merger Sub will each conduct their operations according to their ordinary and
usual course of business and consistent with past practice. Without limiting the
generality of the foregoing, and except as otherwise expressly provided in this
Agreement or disclosed in the Disclosure Schedule, the Company will not, prior
to the Effective Time, without the prior written consent of the Parent (a)
issue, sell or pledge, or authorize or propose the issuance, sale or pledge of
(i) additional shares of capital stock of any class, or securities convertible
into any such shares, or any rights, warrants or options to acquire any such
shares or other convertible securities, or (ii) any other securities in respect
of, in lieu of or in substitution for, capital stock outstanding on the date
hereof; (b) purchase or otherwise acquire, or propose to purchase or otherwise
acquire, any outstanding securities; (c) declare or pay any dividend or
distribution on any shares of its capital stock; (d) authorize, recommend,
propose or announce an intention to authorize, recommend or propose, or enter
into an agreement in principle or an agreement with respect to, any merger,
consolidation or business combination (other than the Merger), any acquisition
of a material amount of assets or securities, any disposition of a material
amount of assets or securities or any material change in its capitalization, or
any entry into a material contract or any release or relinquishment of any
material contract rights, not in the ordinary course of business; (e) propose or
adopt any amendments to its charter or by-laws; (f) enter into, assign or
terminate, or amend in any material respect, any contract other than in the
ordinary course of business; (g) acquire, dispose of, encumber or relinquish any
material asset (other than sale of real properties at prices equal to or greater
than their carrying values); (h) waive, compromise or settle any right or claim
that would adversely affect the ownership, operation or value of any asset; (i)
make any capital expenditures other than pursuant to existing capital
expenditure programs that are disclosed in the Disclosure Schedule; (j) allow or
permit the expiration, termination or cancellation at any time prior to the
Effective Time of any of the insurance policies or coverages or surety bonds
currently maintained unless replaced with a policy, coverage or bond having
substantially the same coverage and similar terms and conditions; (k) increase,
directly or indirectly, the salary or other compensation of any officer or
member of management, enter into any employment agreement with any person or pay
or enter into any agreement to pay any bonuses or other extraordinary
compensation to any officer or to any member of management or other employees,
or institute any general increase in rates of compensation for its employees, or
increase, directly or indirectly, any provisions or other benefits of any of
such persons; or (l) waive, settle or compromise any material litigation or
other claim on a basis materially adverse.
SECTION 5.2 No Solicitations. The Company shall not, and it shall use
its best efforts to ensure that none of its respective affiliates, officers,
directors, representatives or agents shall, directly or indirectly, solicit,
initiate or encourage (including by way of furnishing information) any
corporation, partnership, person, entity or group concerning any merger, sale of
substantial assets (except as permitted by Section 5.1(g)) outside the ordinary
course of business, sale of shares of capital stock or similar transaction
involving the Company (other than the transactions contemplated by this
Agreement). The Company will immediately cease and cause to be terminated any
46
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing. The parties will promptly
communicate to the other the terms of any proposal or inquiry, oral or written,
which may be received in respect of any such transaction, and will inform the
other prior to the time that it furnishes any information to, or engages in
negotiations or discussions with, any third party with respect to the
acquisition of either party.
SECTION 5.3 Access to Information.
(a) Between the date of this Agreement and the Effective Time, the
parties will afford to one another and their authorized representatives
reasonable access to the properties and to the books and records of such party,
will permit the parties and their representatives to make such reasonable
inspections as they may require and will cause their officers to furnish the
parties and their representatives with such financial and operating data,
environmental assessments and other information with respect to the business and
properties of the parties as they and their representatives may from time to
time reasonably request. No inspection or examination by either party will
constitute a waiver of any claim against the other party for misrepresentation
or breach of this Agreement.
(b) The parties will hold and will cause their representatives to hold
in strict confidence, unless compelled to disclose by judicial or administrative
process, or, in the opinion of counsel, by other requirements of law, all
documents and information concerning the parties furnished to them and their
representatives in connection with the transactions contemplated by this
Agreement (except to the extent that such information can be shown to have been
(i) in the public domain through no fault of the parties or their
representatives, or (ii) later lawfully acquired by the parties or their
representatives from other sources unless they or their representatives know
that such other sources are not entitled to disclose such information) and will
not release or disclose such information to any other person, except their
auditors, attorneys, financial advisors and other consultants and advisors in
connection with this Agreement, provided that such person shall have first been
advised of the confidentiality provision of this Section 5.3. If the
transactions contemplated by this Agreement are not consummated, such confidence
shall be maintained except to the extent such information can be shown to have
been (i) in the public domain through no fault of the Company, Parent, Merger
Sub or their representatives, or (ii) later lawfully acquired by the parties or
representatives from other sources, and, if requested by the other party will,
and will cause its agents, auditors, consultants, representatives and advisors
to, return to the other or destroy all copies of written information furnished.
SECTION 5.4 Best Efforts. Subject to the terms and conditions herein
provided, and to the fiduciary duties of the Boards of Directors of the parties
under applicable law, each of the parties hereto agrees to use its best efforts
to take, or cause to be taken, all action, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
In case at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers and
directors of each party to this Agreement shall take all such necessary action.
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SECTION 5.5 Consents. Parent and the Company each will use its best
efforts to obtain such consents of third parties to agreements which would
otherwise be violated by any provisions hereof, to take all actions necessary to
effect the transactions contemplated hereby, and to make such filings with
Governmental Authorities necessary to consummate the transactions contemplated
by this Agreement including, without limitation, (a) the vigorous defense of any
lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transaction contemplated
hereby, including seeking to have any stay or temporary restraining order
entered by any court or Governmental Authority vacated or reviewed, and (b) the
execution and delivery of any additional instruments (including any required
supplemental indentures) necessary to consummate the transactions contemplated
by this Agreement.
SECTION 5.6 Public Announcements. Parent and the Company will consult
with each other before issuing any press release or otherwise making any public
statements with respect to the existence of this Agreement or the Merger and
shall not issue any such press release or make any such public statement prior
to such consultation, except as may be required by law or by obligations
pursuant to any listing agreement with any national securities exchange.
SECTION 5.7 Other Documents. This Agreement is being closed
simultaneously with the following additional agreements: Agreement and Plan of
Merger between the Parent, its merger subsidiaries, and each of Viper
Communication Systems, Inc. and CKS Management, Inc.
ARTICLE VI
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 6.1 Company's Conditions to the Closing. Immediately prior to
the Closing, the Parent and Merger Sub shall have satisfied each of the
following conditions, any of which may be waived in the Company's sole
discretion:
(a) A certificate, dated the date of the Closing of the chief executive
officer of Parent certifying that all representations and warranties made in
Article III herein are true and correct as of the date made and as of the
Closing and that all agreements or other actions required to be performed prior
to the Closing by Parent or Merger Sub as a condition to consummating the Merger
have been performed or taken and such conditions satisfied in accordance with
the terms of this Agreement.
(b) No statute, rule, regulation, executive order, decree, or
injunction shall have been enacted, entered, promulgated or enforced by any
court of competent jurisdiction in the United States or domestic Governmental
Authority which prohibits or restricts the consummation of the Merger.
(c) All parties shall have delivered all documents, exhibits and
schedules and taken all other actions required by this Agreement.
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(d) All representations and warranties of any party shall be true and
effective as of the Closing.
(e) The Other Agreements shall have been executed and delivered.
(f) The Parent shall have obtained bank debt financing in an amount
sufficient for payment of the cash portion of the Merger Consideration.
SECTION 6.2 Parent's Conditions to the Closing. Immediately prior to
the Closing, the Company and Shareholders shall have satisfied each of the
following conditions, any of which may be waived in Parent's sole discretion:
(a) A certificate, dated the date of the Closing of the chief executive
officer of the Company certifying that all representations and warranties made
in Article III herein are true and correct as of the date made and as of the
Closing and that all agreements or other actions required to be performed prior
to the Closing by the Company as a condition to consummating the Merger have
been performed or taken and such conditions satisfied in accordance with the
terms of this Agreement.
(b) No statute, rule, regulation, executive order, decree, or
injunction shall have been enacted, entered, promulgated or enforced by any
court of competent jurisdiction in the United States or domestic Governmental
Authority which prohibits or restricts the consummation of the Merger.
(c) There shall have been no material adverse change in the business,
properties, or financial condition of the Company to this Agreement.
(d) All parties shall have delivered all documents, exhibits and
schedules and taken all other actions required by this Agreement.
(e) All representations and warranties of any party shall be true and
effective as of the Closing.
(f) The Other Agreements shall have been executed and delivered.
(g) The Parent shall have completed its review of the books, records,
properties and other legal and financial matters pertaining to the Company and
shall be satisfied with the results of such review.
(h) The Parent shall have obtained bank debt financing in an amount
sufficient for payment of the cash portion of the Merger Consideration.
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ARTICLE VII
TERMINATION, AMENDMENTS; WAIVER
SECTION 7.1 Termination. This Agreement may be terminated and the
Merger contemplated hereby may be abandoned at any time notwithstanding approval
thereof by the Parent and Company, but prior to the Closing:
(a) by mutual written consent duly authorized by the Boards of
Directors of Company, Parent and Merger Sub;
(b) by Parent or the Company if any court of competent
jurisdiction or other Governmental Authority shall have issued an order, decree
or ruling or taken any other action restraining, enjoining or otherwise
prohibiting the Merger or if litigation or proceedings shall be pending that are
reasonably likely to result in any of the foregoing;
(c) by the Company, if Parent or Merger Sub shall not have
performed all obligations required to be performed by them under this Agreement,
except where any failure to perform would, in the aggregate, not materially
impair or delay the ability of Parent, Merger Sub and the Company to effect the
Merger; or
(d) by the Parent, if there shall have been a breach of any of the
covenants contained herein or if any representation or warranty made by the
Company is untrue in any material respect.
SECTION 7.2 Effect of Termination. In the event of the termination
and abandonment of this Agreement pursuant to Section 7.1, this Agreement shall
forthwith become void and have no effect, without any liability on the part of
any party or its directors, officers, or stockholders, other than the provisions
of Sections 5.3(b) and 9.9. In such event, the mergers shall be rescinded by
conveying to the Shareholders the shares representing ownership of the Merger
Subs.
SECTION 7.3 Amendment. This Agreement may be amended only by means
of an instrument in writing signed on behalf of all the parties.
SECTION 7.4 Extension; Waiver. At any time prior to the Closing,
the parties hereto, by action taken by or on behalf of the respective Boards of
Directors of the Company, Parent and Merger Sub, may (a) extend the time for the
performance of any of the obligations or other acts of any other applicable
party hereto, (b) waive any inaccuracies in the representations and warranties
contained herein by any other applicable party or in any document, certificate
or writing delivered pursuant hereto by an other applicable party, or (c) waive
compliance with any of the agreements of any other applicable party or with any
conditions to its own obligations. Any agreement on the part of any other
applicable party to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party.
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ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Parent and Merger Sub's Right to Indemnification. Company
and the Shareholders shall and do hereby, jointly and severally, indemnify and
hold harmless, Parent, Merger Sub, and their stockholders, directors, officers,
employees, agents and representatives from any and all liabilities, obligations,
claims, contingencies, damages, costs and expenses (including all court costs
and reasonable attorneys' fees) that Merger Sub or any such other indemnified
party may suffer or incur as a result of or relating to the material breach or
inaccuracy of any of the representations, warranties, covenants or agreements
made by Company and the Shareholders herein or pursuant hereto.
SECTION 8.2 Company's Right to Indemnification. Merger Sub and Parent
shall and do hereby indemnify and hold Company and the Shareholders, and its
directors, officers, employees, shareholders, agents and representatives
harmless from any and all liabilities, obligations, claims, contingencies,
damages, costs and expenses (including all court costs and reasonable attorneys'
fees) that Company or any such indemnified party may suffer or incur as a result
of or relating to: (a) the breach or inaccuracy, or any alleged breach or
inaccuracy, of any of the representations, warranties, covenants or agreements
made by Merger Sub and Parent herein or pursuant hereto; and (b) those
liabilities, obligations, claims, contingencies and encumbrances accruing or
arising after the Closing in connection with the business of the Parent, except
to the extent that such liabilities, obligations, claims, contingencies or
encumbrances are attributable to a breach of warranty, representation or
covenant by Company prior to the Closing.
SECTION 8.3 Notice. The party seeking indemnification hereunder
("Indemnitee") shall promptly, and within 30 days after notice to it (notice to
Indemnitee being the filing of any action, receipt of any claim in writing or
similar form of actual notice) of any claim as to which it asserts a right to
indemnification, notify the party from whom indemnification is sought
("Indemnitor") of such claim. Indemnitee shall xxxx Indemnitor for any such
claims no more frequently than on a monthly basis, and Indemnitor shall promptly
pay (or cause to be paid) Indemnitee upon receipt of any such xxxx. The failure
of Indemnitee to give the notification to Indemnitor contemplated above in this
Section shall not relieve Indemnitor from any liability or obligation that it
may have pursuant to this Agreement unless the failure to give such notice
within such time shall have been materially prejudicial to it, and in no event
shall the failure to give such notification relieve Indemnitor from any
liability it may have other than pursuant to this Agreement.
SECTION 8.4 Third-Party Claims. If any claim for indemnification by
Indemnitee arises out of an action or claim by a person other than Indemnitee,
Indemnitor may, by written notice to Indemnitee, undertake to conduct the
defense thereof and to take all other steps or proceedings to defeat or
compromise any such action or claim, including the employment of counsel to be
mutually agreed upon; provided that Indemnitor shall reasonably consider the
advice of Indemnitee as to the defense or compromise of such actions and claims,
and Indemnitee shall have the right to participate, at its own expense, in such
proceedings, but control of such proceedings shall remain exclusively with
Indemnitor. Indemnitee shall provide all reasonable cooperation to Indemnitor in
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connection with such proceedings. Counsel and auditor costs and expenses and
court costs and fees of all proceedings with respect to any such action or claim
shall be borne by Indemnitor. If any such claim is made hereunder and Indemnitor
does not elect to undertake the defense thereof by written notice to Indemnitee,
Indemnitee shall be entitled to control such proceedings and shall be entitled
to indemnity with respect thereto pursuant to the terms of this Article VIII. To
the extent that Indemnitor undertakes the defense of such claim by written
notice to Indemnitee and diligently pursues such defense at its expense,
Indemnitee shall be entitled to indemnification hereunder only to the extent
that such defense is unsuccessful as determined by a final judgment of a court
of competent jurisdiction, or by written acknowledgment of the parties.
SECTION 8.5 Time to Assert Claims. Any claim asserted pursuant to
Section 8.1 or Section 8.2 above must be asserted by written notice given by one
party to the other on or before the date of the release of the first audit
report of the Parent containing combined financial statements of the Parent and
the Company, and in any event at least one (1) year from the date of Closing.
SECTION 8.6 Access to Records. All parties and their agents shall be
afforded reasonable access to the Parent's and Merger Sub's books and records
during normal business hours upon reasonable notice for the purpose of verifying
any claim hereunder. Such party or its agents may be required to sign an
appropriate confidentiality agreement prior to any inspection of books and
records hereunder.
SECTION 8.7 Offset Right. Any claims under this Article VIII may be
satisfied by offsetting any obligation owed to such party.
SECTION 8.8 Arbitration. All disputes under this Article VIII shall be
settled by arbitration in Dallas, Texas, before three arbitrators pursuant to
the rules of the American Arbitration Association. Each party shall select one
arbitrator and the two arbitrators shall select a third. Arbitration may be
commenced at any time by any party hereto giving written notice to each other
party to a dispute that such dispute has been referred to arbitration under this
Section 8.8. Any award rendered by the arbitrators shall be conclusive and
binding upon the parties hereto; provided, however, that any such award shall be
accompanied by a written opinion giving the reasons for the award. This
provision for arbitration shall be specifically enforceable by the parties and
the decision of the arbitrators shall be final and binding and there shall be no
right of appeal therefrom. Each party shall pay its own expenses of arbitration
and the expenses of the arbitrators shall be equally shared; provided, however,
that if in the opinion of the arbitrators any claim for indemnification or any
defense or objection thereto was unreasonable, the arbitrators may assess, as
part of their award, all or any part of the arbitration expenses of the other
party (including reasonable attorney's fees) and of the arbitrators against the
party raising such unreasonable claim, defense or objection.
ARTICLE IX
MISCELLANEOUS
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SECTION 9.1 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person or persons any rights, benefits or remedies of any nature whatsoever
under or by reason of this Agreement.
SECTION 9.2 Brokerage Fees and Commissions. Each party represents that
it has incurred no obligation to any broker or finder in connection with the
transactions described in this Agreement and agrees to indemnify the other
parties and hold them harmless against any liability to any such broker or
finder.
SECTION 9.3 Entire Agreement; Assignment. This Agreement (a)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties or any of them with respect to the subject
matter hereof and (b) shall not be assigned by operation of law or otherwise.
SECTION 9.4 Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, each of which shall remain in full force
and effect.
SECTION 9.5 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by facsimile telegram or telex, or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties as follows:
If to Company, Parent or Merger Sub:
Mr. P. Xxxxx Xxxxxxx
000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx 00000 FAX: 000-000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
SECTION 9.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, REGARDLESS OF THE
LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF
LAWS THEREOF.
SECTION 9.7 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
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SECTION 9.10 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same agreement.
SECTION 9.11 Expenses. Except as otherwise provided herein, the Parent,
Merger Sub and Company shall bear and pay all costs and expenses incurred by it
or on its behalf in connection with the transactions contemplated hereunder,
including fees and expenses of its own financial or other consultants,
investment bankers, accountants and counsel.
SECTION 9.12 Performance by Merger Sub. Parent agrees to cause Merger
Sub to comply with its obligations hereunder and to cause Merger Sub to
consummate the Merger as contemplated herein.
SECTION 9.13 Disclosure Schedule. Upon the execution hereof, the
Company and the Parent shall deliver the Disclosure Schedule to each other. The
Disclosure Schedule shall be updated from time to time and prior to the Closing
to report any changes in the information contained therein. The Disclosure
Schedule shall contain all information required to disclose fully any exception
or qualification to this Agreement and shall cross reference the section of this
Agreement so qualified.
ARTICLE X.
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
meanings set forth below:
"Action" shall mean any action, suit, litigation, complaint,
counterclaim, claim, petition, mediation contest, or administrative proceeding,
whether at law, in equity, in arbitration or otherwise, and whether conducted by
or before any Government or other Person.
"Business" shall mean the business of owning and operating the
communication equipment business as conducted prior to the Closing by Seller.
"Closing" shall have the meaning set forth in Section 1.8 hereof.
"Closing Date" shall mean the time and date that the Closing occurs.
"Code" shall mean the United States Internal Revenue Code of 1986, as
amended, and all regulations thereunder. Any reference herein to a specific
section or sections of the Code shall be deemed to include a reference to any
corresponding provision of future law.
"Consents" shall mean all consents, approvals, and estoppels of others
which are required to be obtained in order to effect the valid assignment,
transfer, and conveyance to Parent of the Business.
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"Contracts" shall mean all contracts, agreements, and leases of
equipment or other personal property that relate exclusively to the Business.
"Default" shall mean an event of default as defined in any contract or
other agreement or instrument, or any event which, with the passage of time or
giving of notice or both, would constitute an event of default or other breach
under such document or instrument.
"Disclosure Schedule" shall mean the set of numbered schedules
referencing Sections of this Agreement delivered by Seller and dated of even
date herewith, as supplemented by new or amended schedules delivered by Seller
prior to the Closing.
"Effective Time" shall have the meaning set forth in Section 1.2
hereof.
"Forum" shall mean any federal, state, local, municipal, or foreign
court, governmental agency, administrative body or agency, tribunal, private
alternative dispute resolution system, or arbitration panel.
"Government" shall mean any federal, state, local, municipal, or
foreign government or any department, commission, board, bureau, agency,
instrumentality, unit, or taxing authority thereof.
"Material Adverse Effect" shall mean any adverse change in the
financial condition, assets, business or operations of any party and its
subsidiaries which is material to such party taken as a whole.
"Orders" shall mean all applicable orders, writs, judgments, decrees,
rulings, consent agreements, and awards of or by any Forum or entered by consent
of the party to be bound.
"Person" shall include an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization, a government, and any other legal entity.
"Schedules" shall mean the numbered sections of the Disclosure
Schedule.
"Subsidiary" shall mean, when used with reference to an entity, any
corporation, a majority of the outstanding voting securities of which are owned
directly or indirectly by such entity. Such term shall also refer to any other
partnership, limited partnership, joint venture, trust, or other business entity
in which a party hereto owns a material interest.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
day and year set forth above.
MICROWAVE TRANSMISSION SYSTEMS, INC.,
a Texas corporation
By: /s/ P. Xxxxx Xxxxxxx
-------------------------------------------
P. Xxxxx Xxxxxxx, President
MTSI/ECI ACQUISITION CORP.,
a Texas corporation
By: /s/ P. Xxxxx Xxxxxxx
-------------------------------------------
P. Xxxxx Xxxxxxx, President
EPIC COMMUNICATIONS, INC.,
a Texas corporation
By: /s/ L. Xxxxxx Xxxxxxx
-------------------------------------------
L. Xxxxxx Xxxxxxx, President
/s/ P. Xxxxx Xxxxxxx
-------------------------------------------
P. Xxxxx Xxxxxxx
/s/ Xxxxxx Xxxxxxx
------------------------------------------
Xxxxxx Xxxxxxx
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