EXHIBIT 7.4
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of the
______ day of March, 2000, is by and among Xxxxxx Industries, Inc., a Utah
corporation ("Purchaser"), Xxxxxx Acquisition Corp., a Delaware corporation
("Merger Corp."), e resources inc, a Delaware corporation ("e resources"), and
Xxxxxxxxxxx X. Xxxxxx ("Xxxxxx") and Xxxxxxx X. Xxxxxxxxxx ("Xxxxxxxxxx"), the
stockholders of e resources (the "Stockholders," and together with e resources,
the "Sellers").
W I T N E S S E T H:
WHEREAS, e resources is in the business of investing in and providing
various services to, electronic commerce companies (the "Business"); and
WHEREAS, the Stockholders own all of the capital stock of e resources (the
"Shares"); and
WHEREAS, Purchaser desires to acquire e resources and its wholly owned
subsidiary by causing Merger Corp., a wholly owned subsidiary of Purchaser, to
merge with and into e resources; and
WHEREAS, e resources and Merger Corp. desire to enter into such merger
transaction;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. THE MERGER
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1.1 Merger. In accordance with the provisions of the business corporation
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laws of the State of Delaware at the Effective Date (as hereinafter defined),
Merger Corp. shall be merged with and into e resources (the "Merger"), and e
resources shall be the surviving corporation (the "Surviving Corporation") and
as such shall continue to be governed by the laws of the State of Delaware. It
is intended that the Merger shall constitute a reorganization within the meaning
of Section 368(A) of the Internal Revenue Code of 1986, as amended (the "Code"),
and that this Agreement shall constitute a "plan of reorganization" for the
purposes of Section 368(A) of the Code and shall have the following attributes:
(a) Continuing of Corporate Existence. Except as may otherwise be set
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forth herein, the corporate existence and identity of e resources, with all
its purposes, powers, franchises, privileges, rights and immunities, shall
continue unaffected and unimpaired by the Merger, and the corporate
existence and identity of Merger Corp., with all its purposes, powers,
franchises, privileges, rights and immunities, at the Effective Date shall
be merged with and into that of e resources, and the Surviving Corporation
shall be vested fully
therewith and the separate corporate existence and identity of Merger Corp.
shall thereafter cease except to the extent continued by statute.
(b) Effective Date. The Merger shall become effective upon the date
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of issuance (the "Effective Date") by the Secretary of State of the State
of Delaware of a certificate as to the effectiveness of the Merger in
accordance with the Delaware General Corporation Law.
(c) Corporate Government. The Certificate of Incorporation of e
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resources, as in effect on the Effective Date, shall continue in full force
and effect and shall be the Certificate of Incorporation of the Surviving
Corporation. The Bylaws of e resources, as in effect as of the Effective
Date, shall continue in full force and effect and shall be the Bylaws of
the Surviving Corporation. The members of the Board of Directors and the
officers of the Surviving Corporation shall be the persons holding such
offices in e resources as of the Effective Date.
(d) Rights and Liabilities of the Surviving Corporation. The
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Surviving Corporation shall have the following rights and obligations: (i)
the Surviving Corporation shall have all the rights, privileges immunities
and powers and shall be subject to all the duties and liabilities of a
corporation organized under the laws of the State of Delaware; (ii) the
Surviving Corporation shall possess all of the rights, privileges,
immunities and franchises, of either a public or private nature, of e
resources and Merger Corp. and all property, real, personal and mixed, and
all debts due on whatever account, including subscription to shares, and
all other chosen in action, and every other interest of or belonging or due
to e resources and Merger Corp. shall be taken and deemed to be transferred
or invested in the Surviving Corporation without further act or deed; and
(iii) at the Effective Date, the Surviving Corporation shall thenceforth be
responsible and liable for all liabilities and obligations of e resources
and the Merger Corp. and any claim existing or action or proceeding pending
by or against the Merger Corp. or e resources may be prosecuted as if the
Merger had not occurred, or the Surviving Corporation may be substituted in
its place. Neither the rights of creditors nor any liens upon the property
of e resources or Merger Corp. shall be impaired by the Merger.
(e) Conversion of Shares. Upon the occurrence of the Merger: (i) the
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shares of capital stock of e resources outstanding immediately prior to the
Effective Date shall at the Effective Date, by virtue of the Merger and
without any action on the part of the Stockholders, be converted (in the
aggregate) into the right to receive the purchase price set forth in
Section 2.1 (allocated between Xxxxxx and Xxxxxxxxxx pro rata based upon
their stock ownership in e resources), and (ii) each share of capital stock
of Merger Corp. which shall be outstanding immediately prior to the
Effective Date shall at the Effective Date, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into one
newly issued share of capital stock of e resources, as the Surviving
Corporation.
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1.2 Corporate Matters. Purchaser has informed the Sellers that it intends
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to effect a twenty-for-one reverse stock split (the "Stock Split") on its
outstanding Shares of Common Stock, $0.001 par value, of the Purchaser ("Xxxxxx
Common Stock"), prior to the Merger, and to pursue a private placement of no
less than $10,000,000 of Xxxxxx Common Stock (the "Offering") following the
Merger. Purchaser agrees that it shall effect the Stock Split as soon as
practicable following the execution of this Agreement and prior to the Closing
Date, but under no circumstances shall the Stock Split occur fewer than seven
(7) business days prior to the effective date of the Merger. The Stockholders
and Purchaser agree to cooperate to commence the Offering promptly after
Closing. In this regard, since it is the intention of the Purchaser to change
its name to "e resources" immediately following the Merger, the Sellers agree to
cooperate with the Purchaser to enable it to use the name "e resources" at the
time the Stock Split becomes effective, so long as this Agreement is still in
effect, and at the time the Stock Split becomes effective, the Sellers'
conditions to Closing have been satisfied, or are expected to be satisfied or
waived prior to Closing.
1.3 Assets of e resources. At the time of the Closing, the assets owned
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by e resources (the "Assets") will consist of all tangible and intangible assets
of e resources that relate to the Business, including but not limited to all
accounts receivable, cash and cash equivalents, prepaid expenses, fixed assets,
inventory and supplies, leases and leasehold improvements, customer lists,
trademarks, tradenames, software programs, stock of its subsidiaries and
contract rights.
1.4 Board of Directors of Purchaser. Effective as of the Effective Date,
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the Board of Directors of Purchaser shall take such action as is appropriate (i)
to increase the number of members of its Board of Directors to three, and (ii)
to fill the vacancies created by each of the foregoing by electing a designee of
the Sellers to the Purchaser's Board of Directors.
2. CONSIDERATION; CLOSING
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2.1 The Purchase Price for the Shares. The consideration to be received
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by the Stockholders in exchange for the Shares shall be such number of shares
("Xxxxxx Shares") of the common stock, $.001 par value, of Purchaser (the
"Xxxxxx Common Stock"), which, following their issuance and the Xxxxxx Stock
Split, shall constitute one-third (331/3 percent) of the total number of issued
and outstanding shares of Xxxxxx Common Stock.
2.2 Payment of Debts. At the Closing, Purchaser shall cause the
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indebtedness of e resources and its subsidiary, to be assumed by Purchaser and
paid in accordance with the terms of such indebtedness.
2.3 Time of Closing. The closing (the "Closing") for the sale and
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purchase of the Shares shall be held at the law offices of Xxxxxxx & Xxxxxx,
P.C. located at 000 X. Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx, at 10:00 a.m.,
Dallas, Texas time, on or before May 1, 2000, or at such other place or places
and/or time as may be agreed upon by the parties (the "Closing Date").
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2.4 Closing Procedure. At the Closing, the Stockholders shall deliver to
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Purchaser stock certificates duly endorsed to Purchaser and representing the
Shares, in form sufficient to vest record and beneficial title fully in
Purchaser to the Shares. Purchaser shall issue and deliver to the Stockholders
the Xxxxxx Shares as described in Section 2.2 above. Each party will cause to
be prepared, executed and delivered a Certificate of Merger to be filed with the
Secretary of State of Delaware, all other documents required to be delivered by
such party pursuant to Article 8 hereof and all other appropriate and customary
documents as another party or its counsel may reasonably request for the purpose
of consummating the transactions contemplated by this Agreement. All actions
taken at the Closing shall be deemed to have been taken simultaneously at the
time the last of any such actions is taken or completed.
3. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
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Each of the Stockholders hereby represents and warrants, severally and not
jointly, to Purchaser that, except as qualified by the Disclosure Schedule
attached as Schedule 1 and made a part hereof (the "Sellers' Disclosure
Schedule"):
3.1 Organization; Good Standing. e resources is a corporation, duly
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incorporated, validly existing and in good standing under the laws of its
incorporation. e resources is duly qualified and licensed to do business and is
in good standing in the jurisdictions set forth on the Sellers' Disclosure
Schedule.
3.2 Due Authorization; Execution and Delivery. The Stockholder has full
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power and authority to enter into and perform this Agreement and to carry out
the transactions contemplated hereby. This Agreement constitutes the legal,
valid and binding obligation of the Stockholder, enforceable against him in
accordance with its terms, except as may be limited by the availability of
equitable remedies or by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally. The Stockholder
has good and marketable title to his Shares of capital stock of e resources,
free and clear of any liens or encumbrances. e resources has full power and
authority to enter into and perform this Agreement and to carry out the
transactions contemplated hereby. This Agreement constitutes the legal, valid
and binding obligation of e resources, enforceable against it in accordance with
its terms, except as may be limited by the availability of equitable remedies or
by applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally. e resources has good and marketable
title to its Shares of capital stock of e resources, free and clear of any liens
or encumbrances.
3.3 Consents. No approval, authorization or consent of, or filing with,
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any governmental authority or administrative agency is required in connection
with the execution and delivery by the Stockholder of this Agreement or the
consummation of the transactions contemplated hereby. Except as set forth in the
Sellers' Disclosure Schedule, no approval, authorization or consent of any other
third party is required in connection with the execution and delivery by the
Stockholder of this Agreement and the consummation of the transactions
contemplated hereby.
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3.4 Title to Assets. e resources is the sole and exclusive legal owner of
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all right, title and interest in, and has good and marketable title to, all of
the Assets that it purports to own, free and clear of liens, claims and
encumbrances except (i) liens, claims and encumbrances to be released at Closing
or that are disclosed to Purchaser before Closing and are not substantial in
character, amount, extent, or that do not materially lessen the value of or
interfere with the present use of the Assets, (ii) liens which are a matter of
public record and (iii) liens for taxes not yet payable.
3.5 Condition of Assets. All of the fixed assets of e resources
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viewed as a whole and not on an asset by asset basis are in good condition and
working order, ordinary wear and tear excepted, and are suitable for the uses
for which they are intended, free from any known defects except such minor
defects as do not substantially interfere with the continued use thereof.
3.6 Taxes. All tax reports and returns relating to e resources' assets
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and operations (including sales, use, income, property, franchise and employment
taxes) due on or before the date of this Agreement have been filed with the
appropriate federal, state and local governmental agencies, and e resources have
paid all taxes, penalties, interest, deficiencies, assessments or other charges
due as reflected on the filed returns or claimed to be due by such federal,
state or local taxing authorities (other than taxes, deficiencies, assessments
or claims which are being contested in good faith and which in the aggregate are
not material).
3.7 Litigation. There is no order of any court, governmental agency or
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authority and no action, suit, proceeding or investigation, judicial,
administrative or otherwise, of which such Stockholder has actual knowledge that
is pending or threatened against or affecting e resources which, if adversely
determined, might materially and adversely affect the business, operations,
properties, assets or conditions (financial or otherwise) of e resources or
which challenges the validity or propriety of any of the transactions
contemplated by this Agreement.
3.8 Capitalization. All of the issued and outstanding shares of the
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capital stock of e resources have been duly authorized and validly issued and
are fully paid and nonassessable, and (as of the date hereof and the Closing)
will be owned of record and beneficially by the Stockholders. There are no
shares of capital stock of e resources held in their treasury. There is no
outstanding subscription, contract, option, warrant, call or other right
obligating either of e resources to issue, sell, exchange or otherwise dispose
of, or to purchase, redeem or otherwise acquire, shares of, or securities
convertible into or exchangeable for, capital stock of e resources. The
Stockholders are the lawful, sole and beneficial owner of the Shares as
reflected on the Sellers' Disclosure Schedule, free and clear of all liens,
claims and encumbrances of every kind, and, at the Closing by virtue of the
Merger, the Stockholder will convey to Purchaser good and indefeasible title to
his Shares.
3.9 Financial Statements and Records of e resources.
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(a) e resources has delivered to Purchaser true, correct and complete
copies of the following financial statements (the "Financial Statements"):
(i) the balance sheet (the
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"Balance Sheet") of e resources as of February 29, 2000, and (ii) the
related statements of income and changes in shareholder's equity for the
two month period then ended.
(b) The Financial Statements present fairly the assets, liabilities
and financial position of e resources as of the dates thereof and the
results of operations thereof for the periods then ended and have been
prepared in conformity with accepted accounting principles applied on a
consistent basis with prior periods, except year-end adjustments consisting
of normal accruals (the net effect of which adjustments are not material)
with respect to the interim financial statements. The books and records of
e resources have been and are being maintained in accordance with good
business practice, reflect only valid transactions, are complete and
correct in all material respects and present fairly in all material
respects the basis for the financial position and results of operations of
e resources set forth in the Financial Statements.
3.1 Completeness of Disclosure. No representation or warranty by e
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resources or the Stockholder in this Agreement nor any certificate, schedule,
statement, document or instrument furnished or to be furnished to Purchaser
pursuant hereto, or in connection with the negotiation, execution or performance
of this Agreement, contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact required to be stated herein
or therein or necessary to make any statement herein or therein not misleading.
3.1 Finders and Brokers. No person has as a result of any agreement or
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action of e resources or the Stockholder any valid claim against any of the
parties hereto for a brokerage commission, finder's fee or other like payment.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER
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Purchaser represents and warrants to the Sellers as follows:
4.1 Organization and Good Standing. Each of Purchaser and Merger Corp. is
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a corporation duly organized, validly existing and in good standing under the
laws of the state of its incorporation and has all requisite corporate power and
authority to own and lease its properties and carry on its business as currently
conducted.
4.2 Due Authorization. Each of Purchaser and Merger Corp. has full
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corporate power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of Purchaser and Merger
Corp. This Agreement has been duly executed and delivered by Purchaser and
Merger Corp. and constitutes the legal, valid and binding obligation of each of
them, enforceable against them in accordance with their respective terms, except
as may be limited by the availability of equitable remedies or by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally.
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4.3 Execution and Delivery. The execution and delivery by Purchaser and
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Merger Corp. of this Agreement, and the consummation of the transactions
contemplated hereby and thereby will not: (i) conflict with or result in a
breach of the certificate or articles of incorporation or bylaws of Purchaser or
Merger Corp., (ii) violate any law, statute, rule or regulation or any order,
writ, injunction or decree of any court or governmental authority, or (iii)
violate or conflict with or constitute a default under (or give rise to any
right of termination, cancellation or acceleration under) any indenture,
mortgage, lease, contract or other instrument to which any of Purchaser, Merger
Corp. is a party or by which it is bound or affected.
4.4 Capitalization. On the Closing Date, all of the Xxxxxx Shares shall
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be duly authorized and validly issued and fully paid and nonassessable, and all
required regulatory approvals pertaining to the Stock Split shall have been
obtained. The Xxxxxx Shares shall be transferred to the Stockholders free and
clear of any lien, privilege, pledge, option or other encumbrance, other than
the restrictions on the transfer of such shares imposed by federal and state
securities laws.
4.5 Brokers. All negotiations relative to this Agreement and the
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transactions contemplated hereby have been carried on by Purchaser directly with
the Stockholders and e resources. No person has as a result of any agreement or
action of the Purchaser any valid claim against any of the parties hereto for a
brokerage commission, finder's fee or other like payment.
5. CERTAIN COVENANTS AND AGREEMENTS
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The Stockholders covenant and agree that, from and after the execution and
delivery of this Agreement to and including the Closing Date (and thereafter as
reflected below), they shall cause e resources to comply with the covenants set
forth below, and Purchaser covenants and agrees that it shall similarly comply
with said covenants to the extent applicable to it.
5.1 Access. Upon reasonable notice, the Sellers will give to Purchaser
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and its counsel, accountants and other authorized representatives, full access
during reasonable business hours to all of e resources' properties, books,
contracts, documents and records and shall furnish Purchaser with all such
information concerning their affairs, including financial statements, as the
other may reasonably request in order that Purchaser may have full opportunity
to make such reasonable investigations as it shall desire for the purpose of
verifying the performance of and compliance with the representations,
warranties, covenants and the conditions contained herein or for other purposes
reasonably related to the transactions contemplated hereby. The Sellers will
take all action necessary to enable Purchaser, its counsel, accountants and
other representatives to discuss the affairs, properties, business, operations
and records of e resources at such times and as often as the Purchaser may
reasonably request with executives, independent accountants and counsel of e
resources and the Stockholders. In the event that the Closing does not occur
and this Agreement is terminated, the Sellers, on the one hand, and Purchaser,
on the other, shall (i) maintain the confidentiality of all information obtained
from the other party in connection herewith, except for such information as is
in the public domain, (ii) not use any such information so obtained to the
detriment or competitive disadvantage of the other party, and (iii) promptly
return copies of all books, records, contracts and
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any other documentation of the other delivered to such party pursuant to the
transactions contemplated hereby. Each of the Sellers and Purchaser hereby agree
that if the Closing does not occur, then the terms and provisions of this
Section 5.1 shall, to the extent they are inconsistent with the Confidentiality
Agreement, be superseded by the terms and provisions of the Confidentiality
Agreement.
5.2 Best Efforts. Each of the Sellers and Purchaser shall take all
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reasonable action necessary to consummate the transactions contemplated by this
Agreement and will use all necessary and reasonable means at their disposal to
obtain all necessary consents and approvals of other persons and governmental
authorities required to enable it to consummate the transactions contemplated by
this Agreement. Each party shall make all filings, applications, statements and
reports to all governmental agencies or entities which are required to be made
prior to the Closing Date by or on its behalf pursuant to any statute, rule or
regulation in order to consummate the transactions contemplated by this
Agreement, and copies of all such filings, applications, statements and reports
shall be provided to the other.
5.3 Public Announcements. Prior to the Closing Date, all notices to third
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parties and other publicity relating to the transaction contemplated by this
Agreement shall be jointly planned and agreed to by e resources and Purchaser.
5.4 Ordinary Course of Business. Except as contemplated by this
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Agreement, during the period from the execution and delivery of this Agreement
through the Closing Date, e resources shall (i) conduct their operations in the
ordinary course of business consistent with past and current practices, (ii) use
reasonable best efforts to maintain and preserve intact their goodwill and
business relationships, (iii) not enter into any agreement which involves the
payment by e resources of an aggregate amount exceeding $10,000, or which has a
term exceeding one year or (iv) take any action which would cause any
representation contained in Article 3 to be untrue as of the Closing Date.
5.5 Additional Information and Financial Statements.
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(a) To the extent required, Purchaser and the Sellers shall utilize
their commercially reasonable efforts and cooperate to provide the
financial information necessary to present the pro forma consolidated
financial statements, including a pro forma consolidated balance sheet and
pro forma consolidated income statements, for all periods required to be
presented, including the notes thereto, and in the form and manner required
for use in the Form 8-K [Item 2. Acquisition or Disposition of Assets and
Item 7. Financial Statements and Exhibits] and/or any other document
required to be filed with the Securities Exchange Commission ("SEC"),
requiring the presentation of Purchaser's financial statements under
generally accepted accounting principles.
(b) No fewer than ten (10) days prior to Closing, the Purchaser shall
have delivered to the Sellers a copy of its audited financial statements
for the period ending
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December 31, 1999, and a copy of its unaudited financial statements for the
period ending March 31, 2000.
6. CONDITIONS TO PURCHASER'S CLOSING
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All obligations of Purchaser under this Agreement shall be subject to the
fulfillment at or prior to the Closing of the following conditions, it being
understood that Purchaser may, in its sole discretion, waive any or all of such
conditions in whole or in part:
6.1 Representations. e resources and the Stockholders shall have
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performed in all material respects the covenants and agreements contained in
this Agreement that are to be performed by each of them at or prior to the
Closing, and the representations and warranties of e resources and the
Stockholders contained in this Agreement shall be true and correct as of the
Closing Date with the same effect as though made at such time (except as
contemplated or permitted by this Agreement).
6.2 Consents. All consents and approvals of governmental agencies, and
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from any other third parties required to consummate the transactions
contemplated by this Agreement, shall have been obtained and shall be in full
force and effect.
6.3 No Adverse Litigation. No order or preliminary or permanent
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injunction shall have been entered and no action, suit or other legal or
administrative proceeding by any court or governmental authority, agency or
other person shall be pending or threatened on the Closing Date which may have
the effect of (i) making any of the transactions contemplated hereby illegal, or
(ii) making Purchaser or e resources liable for the payment of a material amount
of damages to any person.
6.4 Material Adverse Changes. There shall have occurred no material
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adverse change in the business, properties, assets, liabilities, results of
operations or condition, financial or otherwise, of either of e resources or
Caremart.
6.5 Closing Deliveries. Purchaser shall have received each of the
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documents or items required to be delivered to it pursuant to Section 8.1.
6.6 Acquisition of Caremart. e resources shall have acquired Xxxxxxxxxx &
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Xxxxxxxxxx Health Concerns, Inc., a Texas corporation ("Caremart").
7. CONDITIONS TO SELLERS' CLOSING
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All obligations of the Sellers under this Agreement shall be subject to the
fulfillment at or prior to the Closing of the following conditions, it being
understood that the Sellers may, in their sole discretion, waive any or all of
such conditions in whole or in part:
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7.1 Representations, Etc. Purchaser shall have performed in all material
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respects the covenants and agreements contained in this Agreement that are to be
performed by Purchaser at or prior to the Closing, and the representations and
warranties of Purchaser contained in this Agreement shall be true and correct as
of the Closing Date with the same effect as though made at such time (except as
contemplated or permitted by this Agreement).
7.2 Consents. All consents and approvals of governmental agencies, and
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from any other third parties required to consummate the transactions
contemplated by this Agreement, shall have been obtained and shall be in full
force and effect.
7.3 No Adverse Litigation. No order or preliminary or permanent
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injunction shall have been entered and no action, suit or other legal or
administrative proceeding by any court or governmental authority, agency or
other person shall be pending or threatened on the Closing Date which may have
the effect of (i) making any of the transactions contemplated hereby illegal or
(ii) making the Sellers liable for the payment of a material amount of damages
to any person.
7.4 Material Adverse Changes. There shall have occurred no material
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adverse change in the business, properties, assets, liabilities, results of
operations or condition, financial or otherwise, of Purchaser.
7.5 Closing Deliveries. The Sellers shall have received each of the
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documents or items required to be delivered to them pursuant to Section 8.2.
7.6 Stock Split. Purchaser shall have consummated the Stock Split no
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fewer than seven (7) days prior to the Closing Date.
7.7 Tax Free Nature of Transaction. The Merger will be, to the Sellers'
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satisfaction, a tax free merger pursuant to Section 368(A) of the Code.
7.8 SEC Filings. Purchaser shall have completed to the satisfaction of
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the Sellers, and filed with the Securities and Exchange Commission, and any
applicable state, all quarterly, annual and special reports required to have
been filed on or before the Closing.
7.9 Election of Board Member. On or prior to the Closing Date, the
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designees of the Sellers shall have been elected to the Board of Directors of
the Purchaser.
8. DOCUMENTS TO BE DELIVERED AT CLOSING
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8.1 To Purchaser. At the Closing, there shall be delivered to Purchaser:
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(a) the Shares, together with duly executed stock powers, in form
satisfactory to Purchaser and its counsel;
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(b) a certificate, signed by the chief executive officer of e
resources, as to the fulfillment of the conditions set forth in Sections
6.1 through 6.6 and certifying the Bylaws and resolutions;
(c) a copy of all consents and approvals referred to in Section 6.2;
(d) the corporate minute books and stock books of e resources; and
(e) all other items reasonably requested by Purchaser.
8.2 To the Stockholders. At the Closing, there shall be delivered to the
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Stockholders:
(a) the Xxxxxx Shares as contemplated by Section 2.1;
(b) a certificate, signed by the President of Purchaser, as to the
fulfillment of the conditions set forth in Sections 7.1 through 7.8; and
(c) all other items reasonably requested by the Sellers.
9. SURVIVAL
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All representations, warranties, covenants and agreements made by any party
to this Agreement or pursuant hereto shall be deemed to be material and to have
been relied upon by the parties hereto and shall survive the Closing for a
period of twelve months. The representations and warranties hereunder shall not
be affected or diminished by any investigation at any time by or on behalf of
the party for whose benefit such representations and warranties were made. All
statements contained herein or in any certificate, exhibit, list or other
document delivered pursuant hereto or in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties.
10. INDEMNIFICATION OF THE STOCKHOLDERS
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Purchaser shall indemnify and hold the Stockholders harmless from, against,
for and in respect of any expenses, losses, damages, settlement payments,
obligations, claims, actions or causes of action, encumbrances, or liabilities
("Losses") suffered, sustained, incurred or required to be paid by the
Stockholders, or either of them, or otherwise resulting from:
(a) the breach of any written representation, warranty, agreement or
covenant of Purchaser contained in or made in connection with this
Agreement;
(b) the ownership and operation of e resources on and after the
Closing Date, except to the extent the same arises from a breach of any
written representation,
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warranty, agreement or covenant of e resources or the Stockholders
contained in or made in connection with this Agreement;
(c) any action, suit, proceeding, demand, assessment or judgment
incident to any of the matters indemnified against in this Section 10; and
(d) any actions, omissions, conduct or performance by or on behalf of
the Company, at any time prior to the Closing with respect to any actual or
proposed offering, sale, issuance or transfer of any shares of Xxxxxx
Common Stock to any persons other than the Stockholders, whether in a
private or public offering, as to written or oral statements or
disclosures, and any suit, proceeding, investigation or other action on
behalf of one or more individuals or the SEC or any state securities
commission.
11. INDEMNIFICATION OF PURCHASER
----------------------------
The Stockholders shall indemnify and hold Purchaser harmless from, against,
for and in respect of any Losses suffered, sustained, incurred or required to be
paid by Purchaser or otherwise resulting from:
(a) the breach of any written representation, warranty, agreement or
covenant of e resources or the Stockholder (as applicable) contained in or
made in connection with this Agreement; and
(b) any action, suit, proceeding, demand, assessment or judgment
incident to any of the matters indemnified against in this Section 11.
12. GENERAL RULES REGARDING INDEMNIFICATION
---------------------------------------
(a) The obligations and liabilities of each indemnifying party
hereunder with respect to claims resulting from the assertion of liability
by the other party or indemnified third parties shall be subject to the
following terms and conditions:
(i) The indemnified party shall give prompt written notice
(which in no event shall exceed 20 days from the date on which the
indemnified party first became aware of such claim or assertion) to the
indemnifying party of any claim which might give rise to a claim by the
indemnified party against the indemnifying party based on the indemnity
agreements contained in Section 10 or 11, stating the nature and basis of
said claims and the amounts thereof, to the extent known.
(ii) If any action, suit or proceeding is brought against the
indemnified party with respect to which the indemnifying party may have
12
liability under the indemnity agreements contained in Section 10 or 11, the
action, suit or proceeding shall, upon the written acknowledgment by the
indemnifying party that is obligated to indemnify under such indemnity
agreement, be defended (including all proceedings on appeal or for review
which counsel for the indemnified party shall deem appropriate) by the
indemnifying party. The indemnified party shall have the right to employ
its own counsel in any such case, but the fees and expenses of such counsel
shall be at the indemnified party's own expense unless the employment of
such counsel and the payment of such fees and expenses both shall have been
specifically authorized in writing by the indemnifying party in connection
with the defense of such action, suit or proceeding, in which event the
indemnifying party shall not have the right to direct the defense of such
action, suit or proceeding on behalf of the indemnified party. The
indemnified party shall be kept fully informed of such action, suit or
proceeding at all stages thereof whether or not it is represented by
separate counsel.
(iii) The indemnified party shall make available to the
indemnifying party and its attorneys and accountants all books and records
of the indemnified party relating to such proceedings or litigation and the
parties hereto agree to render to each other such assistance as they may
reasonably require of each other in order to ensure the proper and adequate
defense of any such action, suit or proceeding.
(iv) The indemnified party shall not make any settlement of any
claims without the written consent of the indemnifying party, which consent
shall not be unreasonably withheld or delayed.
(v) If any claims are made by third parties against an
indemnified party for which an indemnifying party would be liable, and it
appears likely that such claims might also be covered by the indemnified
party's insurance policies, the indemnified party shall make a timely claim
under such policies and to the extent that such party obtains any recovery
from such insurance, such recovery shall be offset against any sums due
from an indemnifying party (or shall be repaid by the indemnified party to
the extent that an indemnifying party has already paid any such amounts).
The parties acknowledge, however, that if an indemnified party is self-
insured as to any matters, either directly or through an insurer which
assesses retroactive premiums based on loss experience, then to the extent
that the indemnified party bears the economic burden of any claims through
self-insurance or retroactive premiums or insurance ratings, the
indemnifying party's obligation shall only be reduced by any insurance
recovery in excess of the amount paid or to be paid by the indemnified
party in insurance premiums.
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(vi) The Purchaser, on the one hand, and the Stockholders, on
the other, shall not be obligated to indemnify the other as provided in
Sections 10 through 12 until the aggregate amount of the Losses incurred by
the party seeking indemnification exceeds $5,000 in the aggregate.
(b) Except as herein expressly provided, the remedies provided in
Sections 10 through 12 shall be cumulative and shall not preclude assertion
by any party of any other rights or the seeking of any other rights or
remedies against any other party hereto.
13. FAILURE TO CLOSE BECAUSE OF DEFAULT
-----------------------------------
If Closing is not consummated by virtue of a material default made by a
party in the observance or in the due and timely performance of any of its
covenants or agreements herein contained ("Default"), the parties shall have and
retain all of the rights afforded them at law or in equity by reason of that
Default. In addition, the Sellers and Purchaser acknowledge that the Shares and
the transactions contemplated hereby are unique, that a failure by the Sellers
or Purchaser to complete such transactions will cause irreparable injury to the
other, and that actual damages for any such failure may be difficult to
ascertain and may be inadequate. Consequently, Purchaser and the Sellers agree
that each shall be entitled, in the event of a Default by the other, to specific
performance of any of the provisions of this Agreement in addition to any other
legal or equitable remedies to which the non-defaulting party may otherwise be
entitled. If any action is brought, the prevailing party shall be entitled to
recover court costs, arbitration expenses and reasonable attorneys' fees.
14. TERMINATION RIGHTS
------------------
This Agreement may be terminated by either Purchaser or the Sellers, if
either such party is not then in Default, upon written notice to the other upon
the occurrence of any of the following:
(a) if the Closing has not occurred on or before sixty (60) days
following the effective date of this Agreement;
(b) if either party Defaults and such Default has not been cured
within 30 days of written notice of such Default by the other party;
(c) subject to the provisions of Sections 7 and 8, by the Sellers or
Purchaser if on the Closing Date any of the conditions precedent to the
obligations of Stockholder or Purchaser, respectively, set forth in this
Agreement have not been satisfied or waived by such party; or
(d) by mutual consent of the Stockholder and Xxxxxxxxx.
00
00. MISCELLANEOUS PROVISIONS
------------------------
15.1 Expenses. The Purchaser shall pay the fees and expenses incurred by
--------
it in connection with the transactions contemplated by this Agreement and the
Stockholder shall pay the fees and expenses incurred by him and e resources in
connection with the transactions contemplated by this Agreement.
Notwithstanding the foregoing, the Purchaser shall pay all fees, costs and
expenses of Xxxxx, Xxxxxx & Company LLP, Salt Lake City, Utah, in preparing
their audit report requested by Purchaser with respect to the Financial
Statements. If any action is brought for breach of this Agreement or to enforce
any provision of this Agreement, the prevailing party shall be entitled to
recover court costs, arbitration expenses and reasonable attorneys' fees.
15.2 Amendment. This Agreement may be amended at any time but only by an
---------
instrument in writing signed by the parties hereto.
15.3 Notices. All notices and other communications delivered hereunder
-------
shall be in writing and shall be deemed given if delivered personally or upon
actual receipt if mailed by certified mail, return receipt requested or
delivered by nationally recognized "next-day" delivery service, to the parties
at the addresses set forth below:
If to e resources or the Stockholder before the Closing:
e resources inc
X.X. Xxx 00000
Xx. Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxxx, P.C.
000 X. Xxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxx X. X'Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
15
If to Purchaser:
Xxxxxx Industries, Inc.
00 X. Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Attention: R. Xxx Xxxxxx
Telephone: ______________
Telecopy: (000) 000-0000
with a copy to:
Xxxxxx & Associates
0000 Xxxx 0000 Xxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or such other address or addresses as any party shall have designated by notice
to each other party in accordance with this Section 15.3.
15.4 Assignment. This Agreement shall be binding upon and inure to the
----------
benefit of the parties hereto and their respective successors, heirs and
permitted assigns. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto without the
prior written consent of the others; provided, however, that Purchaser may
assign its rights under this Agreement to any of its wholly owned subsidiaries.
15.5 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15.6 Headings. The headings of the Sections of this Agreement are
--------
inserted for convenience only and shall not constitute a part hereof.
15.7 Entire Agreement. This Agreement and the documents referred to
----------------
herein contain the entire understanding of the parties hereto in respect of the
subject matter contained herein. There are no restrictions, promises,
warranties, conveyances or undertaking other than those expressly set forth
herein. This Agreement supersedes any prior agreements and understandings
between the parties with respect to the subject matter.
15.8 Waiver. No attempted waiver of compliance with any provision or
------
condition
16
hereof, or consent pursuant to this Agreement, will be effective unless
evidenced by an instrument in writing by the party against whom the enforcement
of any such waiver or consent is sought.
15.9 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Delaware.
15.10 Severability. The event that any of the provisions contained in this
------------
Agreement is held to be invalid, illegal or unenforceable shall not affect any
other provision hereof, and this Agreement shall be construed as if such
invalid, illegal or unenforceable provisions had not been contained herein.
15.11 Intended Beneficiaries. The rights and obligations contained in this
----------------------
Agreement are hereby declared by the parties hereto to have been provided
expressly for the exclusive benefit of such entities as set forth herein and
shall not benefit, and do not benefit, any unrelated third parties.
15.12 Mutual Contribution. The parties to this Agreement and their counsel
-------------------
have mutually contributed to its drafting. Consequently, no provision of this
Agreement shall be construed against any party on the ground that such party
drafted the provision or caused it to be drafted or the provision contains a
covenant of such party.
17
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
XXXXXX INDUSTRIES, INC.
By:____________________________________
R. Xxx Xxxxxx
Its: President
XXXXXX ACQUISITION CORP.
By:____________________________________
Name:_____________________________
Its:______________________________
E RESOURCES INC.
By:____________________________________
Xxxxxxx X. Xxxxxxxxxx
Its:______________________________
STOCKHOLDERS:
_______________________________________
Xxxxxxx X. Xxxxxxxxxx
_______________________________________
Xxxxxxxxxxx X. Xxxxxx
INDEX TO EXHIBITS
Schedule 1
Sellers' Disclosure Schedule
