AGREEMENT AND PLAN OF MERGER
Among
Altrimega Health Corporation,
Altrimega Merger Sub, Inc.
and
XxxxxxXxxxxx.xxx
Dated as of July 19, 2001
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.....................................................1
1.1 Certain Definitions.............................................1
1.2 Other Definitions...............................................5
ARTICLE II THE MERGER......................................................5
2.1 Merger; Surviving Corporation...................................5
2.2 Articles of Incorporation.......................................5
2.3 By-Laws.........................................................5
2.4 Directors and Officers..........................................6
2.5 Effective Time..................................................6
2.6 Merger Shares; Conversion and Cancellation of Securities........6
2.7 Surrender of Company Certificates...............................7
2.8 Stock Transfer Books........................................... 8
2.9 Dissenting Shares. .............................................8
2.10 Treatment of Certain Outstanding Derivative Securities..........8
2.11 Restriction on Transfer Notwithstanding the foregoing, the
Merger Shares may be transfer as a bona fide gift or gifts.....9
2.12 Restrictive Legend..............................................9
2.13 Closing.........................................................9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................9
3.1 Organization and Qualification..................................9
3.2 Capitalization.................................................10
3.3 Authority and Validity.........................................10
3.4 No Breach or Violation.........................................10
3.5 Consents and Approvals.........................................11
3.6 Intellectual Property .........................................11
3.7 Compliance with Legal Requirements.............................11
3.8 Financial Statements ..........................................11
3.9 Ordinary Course................................................11
3.10 Litigation.....................................................12
3.11 Taxes..........................................................12
3.12 Books and Records..............................................12
3.13 Brokers or Finders.............................................12
3.14 Proxies........................................................12
3.15 Disclosure.....................................................12
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE ALTRIMEGA PARTIES........12
4.1 Organization and Qualification.................................12
4.2 Capitalization.................................................13
4.3 Authority and Validity.........................................13
4.4 No Breach or Violation.........................................13
4.5 Consents and Approvals.........................................14
4.6 Compliance with Legal Requirements.............................14
4.7 Litigation.....................................................14
4.8 Ordinary Course................................................14
4.9 Assets and Liabilities.........................................14
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4.10 Taxes..........................................................14
4.11 Books and Records..............................................14
4.12 Environmental Matters..........................................15
4.13 Financial and Other Information................................15
4.14 Trading........................................................15
4.15 Brokers or Finders.............................................15
4.16 Disclosure.....................................................15
4.17 Filings........................................................15
4.18 Tax Consequences...............................................15
ARTICLE V COVENANTS OF THE COMPANY.......................................15
5.1 Additional Information.........................................16
5.2 Continuity and Maintenance of Operations.......................16
5.3 Consents and Approvals.........................................16
5.4 Fairness Hearing...............................................16
5.5 Meeting of the Company Shareholders............................16
5.6 Notification of Certain Matters................................17
5.7 Company Schedules..............................................17
5.8 State Statutes.................................................17
ARTICLE VI COVENANTS OF THE ALTRIMEGA PARTIES.............................17
6.1 Additional Information.........................................17
6.2 No Solicitations...............................................18
6.3 Continuity and Maintenance of Operations.......................18
6.4 Consents and Approvals.........................................18
6.5 Fairness Hearing ..............................................18
6.6 Financial and Other Information................................18
6.7 Notification of Certain Matters................................18
6.8 Altrimega Schedules............................................18
6.9 Securities Filings.............................................19
6.10 Election to Altrimega's Board of Directors.....................19
ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ALTRIMEGA PARTIES...19
7.1 Accuracy of Representations....................................19
7.2 Covenants......................................................19
7.3 Consents and Approvals.........................................19
7.4 Delivery of Documents..........................................19
7.5 No Material Adverse Change.....................................20
7.6 Lock-Up Agreements............................................ 20
ARTICLE VIII CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY ..........20
8.1 Accuracy of Representations....................................20
8.2 Covenants......................................................20
8.3 Consents and Approvals.........................................20
8.4 Delivery of Documents..........................................20
8.5 No Material Adverse Change.....................................21
8.6 No Litigation..................................................21
8.7 No Assets & Liabilities........................................21
8.8 Increase of Authorized Shares..................................21
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8.9 Instructions Regarding Cancellation of Shares..................21
ARTICLE IX INDEMNIFICATION................................................21
9.1 Indemnification by the Company ................................21
9.2 Indemnification by the Altrimega Parties.......................21
9.3 Notice to Indemnifying Party...................................22
9.4 Defense by Indemnifying Party..................................22
ARTICLE X TERMINATION................................................... 22
10.1 Termination....................................................22
10.2 Termination....................................................23
10.3 Effect of Termination......................................... 23
ARTICLE XI MISCELLANEOUS..................................................23
11.1 Parties Obligated and Benefited................................23
11.2 Publicity......................................................23
11.3 Notices........................................................24
11.4 Attorneys' Fees................................................24
11.5 Headings.......................................................25
11.6 Choice of Law..................................................25
11.7 Rights Cumulative..............................................25
11.8 Further Actions................................................25
11.9 Time of the Essence............................................25
11.10 Counterparts...................................................25
11.11 Entire Agreement...............................................25
11.12 Expenses.......................................................25
11.13 Survival of Representations and Covenants......................25
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AGREEMENT AND PLAN OF MERGER, dated as of July 19, 2001 (the
"Agreement"), among ALTRIMEGA HEALTH CORPORATION, a Nevada corporation,
("Altrimega"), ALTRIMEGA MERGER SUB, INC., a California corporation ("Merger
Sub"), Xxxxxx X. Xxxxxx ("Xx. Xxxxxx") and XXXXXXXXXXXX.XXX, a California
corporation (the "Company"). Altrimega, Xx. Xxxxxx, Merger Sub and the
Company are collectively referred to herein as the "Parties." Altrimega, Xx.
Xxxxxx, and Merger Sub are sometimes referred to herein collectively as the
"Altrimega Parties."
RECITALS:
WHEREAS, the respective boards of directors of each of Altrimega, Merger
Sub and the Company have approved the merger of Merger Sub with and into the
Company (the "Merger") and approved the Merger upon the terms and subject to
the conditions set forth in this Agreement;
WHEREAS, Xx. Xxxxxx is the principal shareholder of Altrimega and will
benefit from the transaction contemplated herein;
WHEREAS, it is intended that, for federal income tax purposes, the Merger
shall qualify as a reorganization under the provisions of Section 368(a) of
the Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder (the "Code"); and
WHEREAS, the Company, Altrimega and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with this
Agreement.
NOW, THEREFORE, in consideration of the premises and mutual promises
herein made, and in consideration of the representations, warranties,
covenants and agreements herein contained, and intending to be legally bound
hereby, the Parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Definitions. The following terms shall, when used in
this Agreement, have the following meanings:
"Acquisition" means the acquisition by a Person of any businesses, assets or
property other than in the ordinary course, whether by way of the purchase of
assets or stock, by merger, consolidation or otherwise.
"Affiliate" means, with respect to any Person: (i) any Person directly or
indirectly owning, controlling, or holding with power to vote 10% or more of
the outstanding voting securities of such other Person (other than passive or
institutional investors); (ii) any Person 10% or more of whose outstanding
voting securities are directly or indirectly owned, controlled, or held with
power to vote, by such other Person; (iii) any Person directly or indirectly
controlling, controlled by, or under common control with such other Person;
and (iv) any officer, director or partner of such other Person. "Control" for
the foregoing purposes shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities or voting
interests, by contract or otherwise.
"Altrimega Assets" mean all properties, assets, privileges, powers,
rights, interests and claims of every type and description that are owned,
leased, held, used or useful in the Altrimega Business and in which Altrimega
or any of
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its Subsidiaries has any right, title or interest or in which Altrimega or any
of its Subsidiaries acquires any right, title or interest on or before the
Closing Date, wherever located, whether known or unknown, and whether or not
now or on the Closing Date on the books and records of Altrimega or any of its
Subsidiaries.
"Altrimega Business" means the business conducted by Altrimega and its
Subsidiaries.
"Altrimega Common Stock" means the Class A common shares of Altrimega.
"Altrimega Securities Filings" means Altrimega's annual report on Form
10-KSB for the year ended December 31, 2000, its quarterly reports on Form
10-QSB, and all other reports filed and to be filed with the Commission prior
to the Effective Time.
"Business Day" means any day other than Saturday, Sunday or a day on
which banking institutions in Los Angeles, California, are required or
authorized to be closed.
"Code" means the United States Internal Revenue Code of 1986, as
amended.
"Collateral Documents" mean the Exhibits, Schedules and any other
documents, instruments and certificates to be executed and delivered by the
Parties hereunder or thereunder.
"Commission" means the Securities and Exchange Commission or any
Regulatory Authority that succeeds to its functions.
"Commissioner" means the Commissioner of Corporations of the State of
California.
"Company Assets" mean all properties, assets, privileges, powers,
rights, interests and claims of every type and description that are owned,
leased, held, used or useful in the Company Business and in which the Company
has any right, title or interest or in which the Company acquires any right,
title or interest on or before the Closing Date, wherever located, whether
known or unknown, and whether or not now or on the Closing Date on the books
and records of the Company, but excluding any of the foregoing, if any,
transferred prior to the Closing pursuant to this Agreement or any Collateral
Documents.
"Company Business" means the sale of developing, marketing and
implementing an internet-based yellow pages directory that has the look, feel
and functionality of traditional printed yellow pages books conducted by the
Company.
"Company Common Stock" means the common shares of the Company.
"Company Shareholders" means, as of any particular date, the holders of
Company Common Stock on that date.
"Encumbrance" means any material mortgage, pledge, lien, encumbrance,
charge, security interest, security agreement, conditional sale or other title
retention agreement, limitation, option, assessment, restrictive agreement,
restriction, adverse interest, restriction on transfer or exception to or
material defect in title or other ownership interest (including restrictive
covenants, leases and licenses).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.
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"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"Legal Requirement" means any statute, ordinance, law, rule, regulation,
code, injunction, judgment, order, decree, ruling, or other requirement
enacted, adopted or applied by any Regulatory Authority, including judicial
decisions applying common law or interpreting any other Legal Requirement.
"Losses" shall mean all damages, awards, judgments, assessments, fines,
sanctions, penalties, charges, costs, expenses, payments, diminutions in value
and other losses, however suffered or characterized, all interest thereon, all
costs and expenses of investigating any claim, lawsuit or arbitration and any
appeal therefrom, all actual attorneys', accountants' investment bankers' and
expert witness' fees incurred in connection therewith, whether or not such
claim, lawsuit or arbitration is ultimately defeated and, subject to Section
9.4, all amounts paid incident to any compromise or settlement of any such
claim, lawsuit or arbitration.
"Liability" means any liability or obligation (whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated, and whether due or
to become due), including any liability for Taxes.
"Material Adverse Effect" means a material adverse effect on (i) the assets,
Liabilities, properties or business of the Parties, (ii) the validity, binding
effect or enforceability of this Agreement or the Collateral Documents or
(iii) the ability of any Party to perform its obligations under this Agreement
and the Collateral Documents; provided, however, that none of the following
shall constitute a Material Adverse Effect on the Company: (i) the filing,
initiation and subsequent prosecution, by or on behalf of shareholders of any
Party, of litigation that challenges or otherwise seeks damages with respect
to the Merger, this Agreement and/or transactions contemplated thereby or
hereby, (ii) occurrences due to a disruption of a Party's business as a result
of the announcement of the execution of this Agreement or changes caused by
the taking of action required by this Agreement, (iii) general economic
conditions, or (iv) any changes generally affecting the industries in which a
Party operates.
"Merger Shares" means the shares of Altrimega Common Stock deliverable
by Altrimega in exchange for Company Common Stock pursuant to Section 2.6.
"Permit" means any license, permit, consent, approval, registration,
authorization, qualification or similar right granted by a Regulatory
Authority.
"Permitted Liens" means (i) liens for Taxes not yet due and payable or
being contested in good faith by appropriate proceedings; (ii) rights reserved
to any Regulatory Authority to regulate the affected property; (iii) statutory
liens of banks and rights of set-off; (iv) as to leased assets, interests of
the lessors and sublessors thereof and liens affecting the interests of the
lessors and sublessors thereof; (v) inchoate materialmen's, mechanics',
workmen's, repairmen's or other like liens arising in the ordinary course of
business; (vi) liens incurred or deposits made in the ordinary course in
connection with workers' compensation and other types of social security;
(vii) licenses of trademarks or other intellectual property rights granted by
the Company or Altrimega, as the case may be, in the ordinary course and not
interfering in any material respect with the ordinary course of the business
of the Company or Altrimega, as the case may be; and (viii) as to real
property, any encumbrance, adverse interest, constructive or other trust,
claim, attachment, exception to or defect in title or other ownership interest
(including, but not limited to, reservations, rights of entry, rights of first
refusal, possibilities of reverter, encroachments, easement, rights-of-way,
restrictive covenants, leases, and licenses) of any kind, which otherwise
constitutes an interest in or claim against property, whether arising pursuant
to any Legal Requirement,
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under any contract or otherwise, that do not, individually or in the
aggregate, materially and adversely affect or impair the value or use thereof
as it is currently being used in the ordinary course.
"Person" means any natural person, corporation, partnership, trust,
unincorporated organization, association, limited liability company,
Regulatory Authority or other entity.
"Proposed Acquisition" means any of the following transactions (other
than the transactions contemplated by this Agreement): (i) a merger,
consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving the Company pursuant to which the
shareholders of the Company immediately preceding such transaction hold less
than 50% of the aggregate equity interests in the surviving or resulting
entity of such transaction, (ii) a sale or other disposition by the Company of
assets representing in excess of 50% of the aggregate fair market value of the
Company Business immediately prior to such sale or (iii) the acquisition by
any person or group (including by way of a tender offer or an exchange offer
or issuance by the Company), directly or indirectly, of beneficial ownership
or a right to acquire beneficial ownership of shares representing in excess of
50% of the voting power of the then outstanding shares of capital stock of the
Company.
"Regulatory Authority" means: (i) the United States of America; (ii) any
state, commonwealth, territory or possession of the United States of America
and any political subdivision thereof (including counties, municipalities and
the like); (iii) Canada and any other foreign (as to the United States of
America) sovereign entity and any political subdivision thereof; or (iv) any
agency, authority or instrumentality of any of the foregoing, including any
court, tribunal, department, bureau, commission or board.
"Representative" means any director, officer, employee, agent,
consultant, advisor or other representative of a Person, including legal
counsel, accountants and financial advisors.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"Subsidiary" of a specified Person means (a) any Person if securities
having ordinary voting power (at the time in question and without regard to
the happening of any contingency) to elect a majority of the directors,
trustees, managers or other governing body of such Person are held or
controlled by the specified Person or a Subsidiary of the specified Person;
(b) any Person in which the specified Person and its subsidiaries collectively
hold a 50% or greater equity interest; (c) any partnership or similar
organization in which the specified Person or subsidiary of the specified
Person is a general partner; or (d) any Person the management of which is
directly or indirectly controlled by the specified Person and its Subsidiaries
through the exercise of voting power, by contract or otherwise.
"Tax" means any U.S. or non U.S. federal, state, provincial, local or
foreign income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits, environmental,
customs duties, capital, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property,
intangible property, recording, occupancy, sales, use, transfer, registration,
value added minimum, estimated or other tax of any kind whatsoever, including
any interest, additions to tax, penalties, fees, deficiencies, assessments,
additions or other charges of any nature with respect thereto, whether
disputed or not.
"Tax Return" means any return, declaration, report, claim for refund or
credit or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
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"Treasury Regulations" means regulations promulgated by the U.S.
Treasury Department under the Code.
1.2 Other Definitions. The following terms shall, when used in this
Agreement, have the meanings assigned to such terms in the Sections indicated.
Term Schedule
----- --------
"Agreement" ....................................................... Preamble
"Altrimega Parties" ............................................... Preamble
"Certificate of Merger" ........................................... 2.5
"CCC".............................................................. 2.1
"Closing".......................................................... 2.11
"Closing Date"..................................................... 2.11
"Company Common Stock"............................................. 2.7(a)
"Company Certificates" ............................................ 2.7(a)
"Company Financial Statements"..................................... 3.8
"Company Intellectual Property Rights"............................. 3.6
"Current Market Price"............................................. 2.7(a)
"Dissenting Shares"................................................ 2.9
"Effective Time" .................................................. 2.5
"Excluded Shares" ................................................. 2.6(a)
"Material Company Contract" ....................................... 3.4
"Material Altrimega Contract" ..................................... 4.4
"Merger" .......................................................... 2.1
"Options" ......................................................... 3.2(b)
"Parties" ......................................................... Preamble
"Preferred Stock" ................................................. 3.2(a)
"Shareholders' Meeting"............................................ 5.5
"Surviving Corporation" ........................................... 2.1
ARTICLE II
THE MERGER
2.1 Merger; Surviving Corporation. In accordance with and subject
to the provisions of this Agreement and the California Corporations Code
("CCC"), at the Effective Time, the Merger Sub shall be merged with and into
the Company (the "Merger"), and the Company shall be the surviving corporation
in the Merger (hereinafter sometimes called the "Surviving Corporation") and
shall continue its corporate existence under the laws of the State of
California. At the Effective Time, the separate existence of the Merger Sub
shall cease. All properties, franchises and rights belonging to the Company
and Merger Sub, by virtue of the Merger and without further act or deed, shall
be vested in the Surviving Corporation, which shall thenceforth be responsible
for all the liabilities and obligations of each of Merger Sub and the Company.
2.2 Articles of Incorporation. The Company's articles of
incorporation, as in effect at the Effective Time, shall be amended and
restated effective at the Effective Time to be as set forth in Exhibit A
attached hereto, and, as so amended and restated shall thereafter continue in
full force and effect as the articles of incorporation of the Surviving
Corporation until altered or amended as provided therein or by law.
2.3 By-Laws. The Company's by-laws, as in effect at the Effective
Time, shall be the by-laws of the Surviving Corporation until altered, amended
or repealed as provided therein or by law.
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2.4 Directors and Officers. The directors of the Company prior to
the Effective Time shall be the directors of the Surviving Corporation. The
members of the board of directors of the Surviving Corporation shall serve
thereafter in accordance with the articles of incorporation and by-laws of the
Surviving Corporation and the CCC. The officers of the Company prior to the
Effective Time shall continue to serve as officers of the Surviving
Corporation in accordance with the articles of incorporation and by-laws of
the Surviving Corporation and the CCC.
2.5 Effective Time. The Merger shall become effective at the time
and date that the agreement of merger with an officers' certificate of each of
the Merger Sub and the Company (the "Certificate of Merger"), in form and
substance acceptable to the Parties, is accepted for filing by the Secretary
of State of the State of California in accordance with the provisions of
Section 1103 of the CCC. The Merger Documents shall be executed by the Merger
Sub and the Company and delivered to the Secretary of State of the State of
California for filing on the Closing Date. The date and time when the Merger
becomes effective are referred to herein as the "Effective Time."
2.6 Merger Shares; Conversion and Cancellation of Securities.
(a) Conversion of Company Common Stock. At the Effective
Time, all shares of Company Common Stock outstanding immediately before the
Effective Time, other than shares described in Section 2.6(b) and other than
Dissenting Shares, collectively, the "Excluded Shares", shall be converted, by
virtue of the Merger, into such number of shares of Altrimega Common Stock
(the "Merger Shares") equal to 84% of Altrimega's issued and outstanding
capital stock on a fully diluted basis, subject to the following:
(i) the conversion or cancellation prior to the
Closing of all outstanding shares of Preferred Stock and the extension
of the Secured Convertible Notes due October 31, 2001, it being
understood that the number of Merger Shares shall not be increased as a
result of any such conversion;
(ii) the cancellation by Altrimega immediately after
the Closing of 14,020,000 shares of common stock pursuant to the terms
of Section 8.9;
(iii) the allocation of the Merger Shares among the
Company Shareholders, excluding the holders of Dissenting Shares, shall
be as set forth on Exhibit B to be delivered to Altrimega at least one
business day prior to the Closing; and
(iv) If between the date of this Agreement and the
Closing Date, Altrimega shall declare a stock split or declare a
dividend on Altrimega Common Stock payable in Altrimega Common Stock (or
set a record date with respect thereto), the number of Merger Shares
determined above shall be adjusted to reflect fully the appropriate
effect of any such subdivision, combination or dividend.
At the Effective Time, each share of Altrimega Merger Sub issued and
outstanding immediately prior to the Effective Time shall be converted into
one share of common stock of the Surviving Corporation. Each Excluded Share
shall, by virtue of the Merger and without any action on the part of the
holder thereof, cease to be outstanding, shall be cancelled and retired
without payment of any consideration therefor and shall cease to exist and
each certificate of such shares shall thereafter represent only the right to
the Merger Shares and any distribution or dividend pursuant to Section 2.7(b).
(b) Treasury Shares, Etc. Each share of Company Common
Stock held in the treasury of the Company and each share of Company Common
Stock, if any, held by Altrimega or any
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Subsidiary of Altrimega or of the Company immediately before the Effective
Time shall be cancelled and extinguished, and nothing shall be issued or paid
in respect thereof.
(c) Fractional Shares. No certificates or scrip evidencing
fractional shares of Altrimega Common Stock shall be issued in exchange for
Company Common Stock. All fractional shares amounts shall be rounding up to
the nearest whole share.
2.7 Surrender of Company Certificates.
(a) Exchange Procedures. Promptly after the Effective Time,
Altrimega or its appointed designee shall mail to each holder of a certificate
or certificates of Company Common Stock ("Company Certificates") whose shares
are converted into the right to receive the Merger Shares, (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Company Certificates shall pass to Altrimega, only upon
delivery of the Company Certificates to Altrimega and which shall be in such
form and have such other provisions as Altrimega may reasonably specify) and
(ii) instructions for use in effecting the surrender of the Company
Certificates in exchange for the Merger Shares and any dividends or other
distributions pursuant to Section 2.7(b). Upon surrender of Company
Certificates for cancellation to Altrimega, together with such letter of
transmittal, duly completed and validly executed in accordance with the
instructions thereto, the holders of such Company Certificates shall be
entitled to receive the Merger Shares in exchange therefor and any dividends
or distributions payable pursuant to Section 2.7(b), and the Company
Certificates so surrendered shall forthwith be canceled. Until so
surrendered, outstanding Company Certificates will be deemed from and after
the Effective Time, for all corporate purposes, subject to Section 2.9, to
evidence the ownership of the number of full shares of Altrimega Common Stock
into which such shares of the Company Common Stock shall have been so
converted and any dividends or distributions payable pursuant to Section
2.7(b). Notwithstanding the foregoing, if any Company Certificate is lost,
stolen, destroyed or mutilated, such holder shall provide evidence reasonably
satisfactory to Altrimega as to such loss, theft, destruction or mutilation
and an affidavit in form and substance satisfactory to Altrimega, and,
thereupon, such holder shall be entitled to receive the Merger Shares in
exchange therefor and any dividends or distributions payable pursuant to
Section 2.7(b), and the Company Certificates so surrendered shall forthwith be
canceled.
(b) Distributions With Respect to Unexchanged Shares. No
dividends or other distributions declared or made after the date of this
Agreement with respect to Altrimega Common Stock with a record date after the
Effective Time, will be paid to the holders of any unsurrendered Company
Certificates with respect to the shares of Altrimega Common Stock represented
thereby until the holders of record of such Company Certificates shall
surrender such Company Certificates or, in the case of any Company Certificate
which is lost, stolen, destroyed or mutilated, an affidavit in form and
substance satisfactory to Altrimega. Subject to applicable law, following
surrender of any such Company Certificates or delivery of such affidavit,
Altrimega shall deliver to the record holders thereof, without interest, the
Merger Shares hereof and the amount of any such dividends or other
distributions with a record date after the Effective Time payable with respect
to such whole shares of Altrimega Common Stock.
(c) Transfers of Ownership. If certificates for shares of
Altrimega Common Stock are to be issued in a name other than that in which the
Company Certificates surrendered in exchange therefor are registered, it will
be a condition of the issuance thereof that the Company Certificates so
surrendered will be properly endorsed and otherwise in proper form for
transfer and that the persons requesting such exchange will have paid to
Altrimega or any agent designated by it any transfer or other taxes required
by reason of the issuance of certificates for shares of Altrimega Common Stock
in any
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name other than that of the registered holder of the Company Certificates
surrendered, or established to the satisfaction of Altrimega or any agent
designated by it that such tax has been paid or is not payable.
(d) Required Withholding. In connection with any payment to
any holder or former holder of the Company Common Stock, each of Altrimega and
the Surviving Corporation shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable pursuant to this Agreement to
any holder or former holder of the Company Common Stock such amounts as may be
required to be deducted or withheld therefrom under the Code or under any
provision of state, local or foreign tax law or under any other applicable
laws. To the extent such amounts are so deducted or withheld, such amounts
shall be treated for all purposes under this Agreement as having been paid to
the person to whom such amounts would otherwise have been paid.
(e) No Liability. Notwithstanding anything to the contrary
in this Schedule 2.7, neither Altrimega, the Surviving Corporation nor any
party hereto shall be liable to any Person for any amount properly paid to a
public official pursuant to any applicable abandoned property, escheat or
similar law. If any Company Certificate shall not have been surrendered prior
to the date immediately prior to the date on which such property would
otherwise escheat to or become the property of any Governmental or Regulatory
Authority, any such property, to the extent permitted by applicable law, shall
become the property of the Surviving Corporation, free and clear of all claims
or interest of any person previously entitled thereto.
(f) Termination. Any holders of the Company Certificates
who have not complied with this ARTICLE II shall look only to Altrimega or the
Surviving Corporation for, and Altrimega and the Surviving Corporation shall
remain liable for, payment of their claim for Merger Shares and any dividends
or distributions with respect to Altrimega Common Stock, without interest
thereon.
2.8 Stock Transfer Books. At the Effective Time, the stock transfer
books of the Company shall be closed, and there shall be no further
registration of transfers of shares of Company Common Stock thereafter on the
records of the Company.
2.9 Dissenting Shares. Shares of Company Common Stock which are
issued and outstanding immediately prior to the Effective Time and which are
held by persons who have properly exercised, and not withdrawn or waived,
appraisal rights with respect thereto in accordance with Chapter 1300 of the
California General Corporation Laws, (the "Dissenting Shares"), will not be
converted into the right to receive the Merger Shares, and holders of such
shares of Company Common Stock will be entitled, in lieu thereof, to receive
payment of the appraised value of such shares of Company Common Stock in
accordance with the provisions of such Chapter 1300 unless and until such
holders fail to perfect or effectively withdraw or lose their rights to
appraisal and payment under the California General Corporation Laws. If,
after the Effective Time, any such holder fails to perfect or effectively
withdraws or loses such right, such shares of Company Common Stock will
thereupon be treated as if they had been converted at the Effective Time into
the right to receive the Merger Shares, without any interest thereon. The
Company will give Altrimega prompt notice of any demands received by the
Company for appraisal of shares of Company Common Stock. Prior to the
Effective Time, the Company will not, except with the prior written consent of
Altrimega make any payment with respect to, or settle or offer to settle, any
such demands.
2.10 Treatment of Certain Outstanding Derivative Securities. At the
Effective Time, Altrimega will (a) issue new stock options to the optionees
with respect to the stock options of the Company; and (b) issue new warrants
to the holders with respect to warrants of the Company, on the same terms and
conditions as such derivative securities were originally issued, upon such
issuance, the Company shall cause all such options and warrants to terminate,
without liability to Altrimega or the
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Surviving Corporation. Subject to Section 2.9, all other rights to acquire
any shares of the Company Common Stock including all shares of Preferred Stock
shall be either converted into shares of the Company Common Stock or exercised
prior to the Closing Date. Any such derivative securities not so converted or
exercised shall be terminated without liability to Altrimega or the Surviving
Corporation.
2.11 Restriction on Transfer. For a period of 180 days which period
shall begin on the Closing Date, the holders of Merger Shares shall not,
directly or indirectly offer for sale, sell, or enter into any contract,
option or other arrangement or understanding with respect to or consent to the
offer for sale, sale transfer, tender, pledge, encumbrance, assignment or
other disposition of, any or all of such holder's Merger Shares or any
interest therein. Notwithstanding the foregoing, the Merger Shares may be
transfer as a bona fide gift or gifts.
2.12 Restrictive Legend. All certificates representing the Merger
Shares shall contain the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE,
INCLUDING CERTAIN VOTING AND TRANSFER RIGHTS WITH
RESPECT THERETO, ARE SUBJECT TO THE TERMS OF AN
AGREEMENT AND PLAN OF MERGER, DATED JULY 19, 2001,
AMONG ALTRIMEGA HEALTH CORPORATION, ALTRIMEGA
MERGER SUB, INC., XXXXXXXXXXXX.XXX AND XXXXXX X.
XXXXXX, A COPY OF WHICH IS ON FILE IN THE PRINCIPAL
OFFICE OF THE ISSUER."
2.13 Closing. The closing of the transactions contemplated by this
Agreement and the Collateral Documents ("Closing") shall take place at the
offices of Loeb & Loeb LLP, 00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx
Xxxxxxx, Xxxxxxxxxx 00000, or at such other location as the parties may agree,
at 11:00 a.m., Pacific Time, on a Business Day specified by Altrimega on at
least two business days notice to the Company that may be on, but shall not be
more than five Business Days after, all conditions precedent to the Closing
set forth in ARTICLE VII and ARTICLE VIII have been satisfied or waived, or on
such other date and at such other time as the Parties may agree, provided that
all such conditions precedent have been satisfied or waived. The date on
which the Closing actually occurs is referred to herein as the "Closing Date."
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Altrimega that the statements
contained in this ARTICLE III are correct and complete as of the date of this
Agreement and, except as provided in Section 7.1, will be correct and complete
as of the Closing Date (as though made then and as though the Closing Date
were substituted for the date of this Agreement throughout this ARTICLE III,
except in the case of representations and warranties stated to be made as of
the date of this Agreement or as of another date and except for changes
contemplated or permitted by this Agreement).
3.1 Organization and Qualification. The Company and each of its
Subsidiaries, collectively referred to herein as the Company, is a corporation
duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of organization. The Company has all requisite power
and authority to own, lease and use its assets as they are currently owned,
leased and used and to conduct its business as it is currently conducted. The
Company is duly qualified or licensed to do business in and is in good
standing in each jurisdiction in which the character of the properties owned,
leased or used by it or the nature of the activities conducted by it make such
qualification necessary, except any such
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jurisdiction where the failure to be so qualified or licensed would not have a
Material Adverse Effect on the Company or a material adverse effect on the
validity, binding effect or enforceability of this Agreement or the Collateral
Documents or the ability of the Company to perform its obligations under this
Agreement or any of the Collateral Documents.
3.2 Capitalization.
(a) As of the date hereof, the authorized, issued and
outstanding capital stock and other ownership interests of the Company
consists of 250,000,000 shares of common stock, no par value of which
179,407,800 shares are outstanding and 20,000,000 shares of Preferred Stock,
no par value per share (the "Preferred Stock"), of which 377,958 shares are
outstanding. All of the outstanding Company Common Stock and Preferred Stock
have been duly authorized and are validly issued, fully paid and
nonassessable, other than 25,938,920 shares reserved for issuance upon
exercise of the warrants and options, which are fully described on Schedule
3.2(a).
(b) Schedule 3.2(b)(i) lists all outstanding or authorized
options, warrants, purchase rights, preemptive rights or other contracts or
commitments that could require the Company to issue, sell, or otherwise cause
to become outstanding any of its capital stock or other ownership interests
(collectively "Options").
(c) All of the issued and outstanding capital stock of
Company has been duly authorized and are validly issued and outstanding, fully
paid and nonassessable and have been issued in compliance with applicable
securities laws and other applicable Legal Requirements or transfer
restrictions under applicable securities laws.
3.3 Authority and Validity. The Company has all requisite corporate
power to execute and deliver, to perform its obligations under, and to
consummate the transactions contemplated by, this Agreement (subject to the
approval of the Company Shareholders as contemplated by Section 6.6 and to
receipt of any consents, approvals, authorizations or other matters referred
to in Sections 6.4 and 6.5). The execution and delivery by the Company of,
the performance by the Company of its obligations under, and the consummation
by the Company of the transactions contemplated by, this Agreement have been
duly authorized by all requisite action of the Company (subject to the
approval of the Company Shareholders as contemplated by Section 6.6). This
Agreement has been duly executed and delivered by the Company and (assuming
due execution and delivery by the Altrimega Parties and approval by the
Company Shareholders) is the legal, valid, and binding obligation of the
Company, enforceable against it in accordance with its terms, except that such
enforcement may be subject to (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting or relating to enforcement of
creditors' rights generally and (ii) general equitable principles. Upon the
execution and delivery of the Collateral Documents by each Person (other than
the Altrimega Parties) that is required by this Agreement to execute, or that
does execute, this Agreement or any of the Collateral Documents, and assuming
due execution and delivery thereof by the Altrimega Parties, the Collateral
Documents will be the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except that such enforcement may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting or relating to
enforcement of creditors' rights generally and (ii) general equitable
principles.
3.4 No Breach or Violation. Subject to obtaining the consents,
approvals, authorizations, and orders of and making the registrations or
filings with or giving notices to Regulatory Authorities and Persons
identified herein, the execution, delivery and performance by the Company of
this Agreement and the Collateral Documents to which it is a party, and the
consummation of the transactions contemplated hereby and thereby in accordance
with the terms and conditions hereof and thereof, do not
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and will not conflict with, constitute a violation or breach of, constitute a
default or give rise to any right of termination or acceleration of any right
or obligation of the Company under, or result in the creation or imposition of
any Encumbrance upon the Company, the Company Assets, the Company Business or
the Company Common Stock by reason of the terms of (i) the articles of
incorporation, by-laws or other charter or organizational document of the
Company or any Subsidiary of the Company, (ii) any material contract,
agreement, lease, indenture or other instrument to which the Company is a
party or by or to which the Company, or the Assets may be bound or subject and
a violation of which would result in a Material Adverse Effect on the Company,
(iii) any order, judgment, injunction, award or decree of any arbitrator or
Regulatory Authority or any statute, law, rule or regulation applicable to the
Company or (iv) any Permit of the Company, which in the case of (ii), (iii) or
(iv) above would have a Material Adverse Effect on the Company or a material
adverse effect on the validity, binding effect or enforceability of this
Agreement or the Collateral Documents or the ability of the Company to perform
its obligations under this Agreement or any of the Collateral Documents.
3.5 Consents and Approvals. Except for requirements described in
Sections 6.4 and 6.5, no consent, approval, authorization or order of,
registration or filing with, or notice to, any Regulatory Authority or any
other Person is necessary to be obtained, made or given by the Company in
connection with the execution, delivery and performance by the Company of this
Agreement or any Collateral Document or for the consummation by the Company of
the transactions contemplated hereby or thereby, except to the extent the
failure to obtain any such consent, approval, authorization or order or to
make any such registration or filing would not have a Material Adverse Effect
on the Company or a material adverse effect on the validity, binding effect or
enforceability of this Agreement or the Collateral Documents or the ability of
the Company to perform its obligations under this Agreement or any of the
Collateral Documents.
3.6 Intellectual Property. To the knowledge of the Company, the
Company has good title to or the right to use all material company
intellectual property rights and all material inventions, processes, designs,
formulae, trade secrets and know-how necessary for the operation of the
Company Business without the payment of any royalty or similar payment.
3.7 Compliance with Legal Requirements. The Company has operated
the Company Business in compliance with all Legal Requirements applicable to
the Company except to the extent the failure to operate in compliance with all
material Legal Requirements would not have a Material Adverse Effect on the
Company or Material Adverse Effect on the validity, binding effect or
enforceability of this Agreement or the Collateral Documents.
3.8 Financial Statements. The Company has provided Altrimega with
(a) an unaudited balance sheet of the Company as of September 30, 2000 and a
statement of operations and cash flow for the year then ended; (b) unaudited
balance sheet of the Company as of June 30, 2001 and the related statements of
operations and cash flows for the periods then ended. Except as set forth on
Schedule 3.8, all such financial statements (including the notes thereto)
("Company Financial Statements") have been prepared in accordance with GAAP
applied on a consistent basis throughout the periods covered thereby (except
as may be indicated in the notes thereto) and present fairly in all material
respects the financial condition of the Company and its results of operations
as of the dates and for the periods indicated (except as may be indicated in
the notes thereto), subject in the case of the interim unaudited financial
statements only to normal year-end adjustments (none of which will be material
in amount) and the omission of footnotes.
3.9 Ordinary Course. The Company conducted its business, marketed
its real property and equipment and kept its books of accounts, records and
files, substantially in the same manner as
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previously conducted.
3.10 Litigation. Except as set forth on Schedule 3.10, as of the
date of this Agreement (i) there are no outstanding judgments or orders
against or otherwise affecting or related to the Company, the Company Business
or the Company Assets; (ii) there is no action, suit, complaint, proceeding or
investigation, judicial, administrative or otherwise, that is pending or, to
the Company's knowledge, threatened that, if adversely determined, would have
a Material Adverse Effect on the Company or a material adverse effect on the
validity, binding effect or enforceability of this Agreement or the Collateral
Documents.
3.11 Taxes. The Company has duly and timely filed in proper form
all Tax Returns for all Taxes required to be filed with the appropriate
Regulatory Authority, except where such failure would not have a Material
Adverse Effect on the Company.
3.12 Books and Records. The books and records of the Company
accurately and fairly represent the Company Business and its results of
operations in all material respects. All accounts receivable and inventory of
the Company Business are reflected properly on such books and records in all
material respects.
3.13 Brokers or Finders. No broker or finder has acted directly or
indirectly for the Company, the Company or any of its Affiliates in connection
with the transactions contemplated by this Agreement, and neither the Company,
nor any of its Affiliates has incurred any obligation to pay any brokerage or
finder's fee or other commission in connection with the transaction
contemplated by this Agreement.
3.14 Proxies. Company management holds, or prior to the Closing
will hold, irrevocable proxies from the Company Shareholders adequate to
ensure Company Shareholder approval of the Merger as required by applicable
law.
3.15 Disclosure. No representation or warranty of the Company in
this Agreement or in the Collateral Documents and no statement in any
certificate furnished or to be furnished by the Company pursuant to this
Agreement contained, contains or will contain on the date such agreement or
certificate was or is delivered, or on the Closing Date, any untrue statement
of a material fact, or omitted, omits or will omit on such date to state any
material fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE ALTRIMEGA PARTIES
Each of the Altrimega Parties, jointly and severally, represent and
warrant to the Company that the statements contained in this ARTICLE IV are
correct and complete as of the date of this Agreement and, except as provided
in Section 8.1, will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this ARTICLE IV, except in the case of representations
and warranties stated to be made as of the date of this Agreement or as of
another date and except for changes contemplated or permitted by the
Agreement).
4.1 Organization and Qualification. Each of Altrimega and Merger
Sub is a corporation duly organized, validly existing and in good standing
under the laws of Nevada and California, respectively, and each Subsidiary of
Altrimega is duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation or formation. Altrimega has, and
each Subsidiary of Altrimega (including Merger Sub) has all requisite power
and authority to own, lease and use its assets as they are currently owned,
leased and used and to conduct its business as it is currently conducted.
Altrimega is, and each of its Subsidiaries (including Merger Sub) is, duly
qualified or licensed to do business in and is in good standing in each
jurisdiction in which the character of the properties owned, leased or used by
it
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or the nature of the activities conducted by it makes such qualification
necessary, except any such jurisdiction where the failure to be so qualified
or licensed and in good standing would not have a Material Adverse Effect on
Altrimega or a Material Adverse Effect on the validity, binding effect or
enforceability of this Agreement or the Collateral Documents or the ability of
the Company or any of the Altrimega Parties to perform their obligations under
this Agreement or any of the Collateral Documents.
4.2 Capitalization.
(a) As of the date hereof, Altrimega's authorized capital
stock of 50,000,000 shares of common stock, $0.001 par value of which there
are 22,020,000 shares outstanding and 10,000,000 shares of Preferred Stock,
$0.001 par value, of which there are no shares outstanding. The shares of
Altrimega Common Stock included in the Merger Shares, when issued in
accordance with this Agreement, will have been duly authorized, validly issued
and outstanding and will be fully paid and nonassessable.
(b) Schedule 4.2(b) lists all outstanding or authorized
options, warrants, purchase rights, preemptive rights or other contracts or
commitments that could require Altrimega or any of its Subsidiaries to issue,
sell, or otherwise cause to become outstanding any of its capital stock or
other ownership interests.
(c) All of the issued and outstanding shares of Altrimega
Capital Stock, and all outstanding ownership interests of each of Altrimega's
Subsidiaries have been duly authorized and are validly issued and outstanding,
fully paid and nonassessable (with respect to Subsidiaries that are
corporations) and have been issued in compliance with applicable securities
laws and other applicable Legal Requirements.
4.3 Authority and Validity. Each Altrimega Party has all requisite
power to execute and deliver, to perform its obligations under, and to
consummate the transactions contemplated by, this Agreement and the Collateral
Documents. The execution and delivery by each Altrimega Party of, the
performance by each Altrimega Party of its respective obligations under, and
the consummation by the Altrimega Parties of the transactions contemplated by,
this Agreement and the Collateral Documents have been duly authorized by all
requisite action of each Altrimega Party. This Agreement has been duly
executed and delivered by each of the Altrimega Parties and (assuming due
execution and delivery by the Company) is the legal, valid and binding
obligation of each Altrimega Party, enforceable against each of them in
accordance with its terms. Upon the execution and delivery by each of the
Altrimega Parties of the Collateral Documents to which each of them is a
party, and assuming due execution and delivery thereof by the other parties
thereto, the Collateral Documents will be the legal, valid and binding
obligations of each such Person, as the case may be, enforceable against each
of them in accordance with their respective terms.
4.4 No Breach or Violation. Subject to obtaining the consents,
approvals, authorizations, and orders of and making the registrations or
filings with or giving notices to Regulatory Authorities and Persons
identified herein, the execution, delivery and performance by the Altrimega
Parties of this Agreement and the Collateral Documents to which each is a
party and the consummation of the transactions contemplated hereby and thereby
in accordance with the terms and conditions hereof and thereof, do not and
will not conflict with, constitute a violation or breach of, constitute a
default or give rise to any right of termination or acceleration of any right
or obligation of any Altrimega Party under, or result in the creation or
imposition of any Encumbrance upon the property of Altrimega or Merger Sub by
reason of the terms of (i) the articles of incorporation, by-laws or other
charter or organizational document of any Altrimega Party, (ii) any contract,
agreement, lease, indenture or other instrument to which any Altrimega Party
is a party or by or to which any Altrimega Party or their property may be
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bound or subject and a violation of which would result in a Material Adverse
Effect on the Company taken as a whole, (iii) any order, judgment, injunction,
award or decree of any arbitrator or Regulatory Authority or any statute, law,
rule or regulation applicable to any Altrimega Party or (iv) any Permit of
Altrimega or Merger Sub, which in the case of (ii), (iii) or (iv) above would
have a Material Adverse Effect on Altrimega or a material adverse effect on
the validity, binding effect or enforceability of this Agreement or the
Collateral Documents or the ability of any Altrimega Party to perform its
obligations hereunder or thereunder.
4.5 Consents and Approvals. Except for requirements under
applicable United States or state securities laws, no consent, approval,
authorization or order of, registration or filing with, or notice to, any
Regulatory Authority or any other Person is necessary to be obtained, made or
given by any Altrimega Party in connection with the execution, delivery and
performance by them of this Agreement or any Collateral Documents or for the
consummation by them of the transactions contemplated hereby or thereby,
except to the extent the failure to obtain such consent, approval,
authorization or order or to make such registration or filings or to give such
notice would not have a Material Adverse Effect on Altrimega or a material
adverse effect on the validity, binding effect or enforceability of this
Agreement or the Collateral Documents or the ability of the Company or any of
the Altrimega Parties to perform its obligations under this Agreement or any
of the Collateral Documents.
4.6 Compliance with Legal Requirements. Altrimega and its
Subsidiaries have operated Altrimega Business in compliance with all material
Legal Requirements applicable to Altrimega and its Subsidiaries, except to the
extent the failure to operate in compliance with all material Legal
Requirements would not have a Material Adverse Effect on Altrimega or a
Material Adverse Effect on the validity, binding effect or enforceability of
this Agreement or the Collateral Documents.
4.7 Litigation. Except as set forth on Schedule 4.7 or in the
Altrimega Securities Filings filed through the date hereof, (i) there are no
outstanding judgments or orders against or otherwise affecting or related to
Altrimega, any of its Subsidiaries, or their business or assets; and (ii)
there is no action, suit, complaint, proceeding or investigation, judicial,
administrative or otherwise, that is pending or, to the best knowledge of any
Altrimega Party, threatened that, if adversely determined, would have a
Material Adverse Effect on Altrimega or a material adverse effect on the
validity, binding effect or enforceability of this Agreement or the Collateral
Documents.
4.8 Ordinary Course. Since the date of the balance sheet included
in the most recent Altrimega Securities Filings filed through the date hereof,
there has not been any occurrence, event, incident, action, failure to act or
transaction involving Altrimega or any of its Subsidiaries which is reasonably
likely, individually or in the aggregate, to have a Material Adverse Effect on
Altrimega.
4.9 Assets and Liabilities. As of the date of this Agreement,
neither Altrimega nor any of its Subsidiaries has any Assets or Liability,
except for the (i) Assets and Liabilities disclosed on Schedule 4.9 and (ii)
Liabilities incurred in connection with the consummation of the transaction
contemplated by this Agreement.
4.10 Taxes. Altrimega has, and each of its Subsidiaries has, duly
and timely filed in proper form all Tax Returns for all Taxes required to be
filed with the appropriate Governmental Authority, except where such failure
to file would not have a Material Adverse Effect on Altrimega.
4.11 Books and Records. The books and records of Altrimega and its
Subsidiaries accurately and fairly represent the Altrimega Business and its
results of operations in all material respects. All accounts receivable and
inventory of the Altrimega Business are reflected properly on such books and
records in all material respects.
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4.12 Environmental Matters. Neither Altrimega nor any of the
Altrimega Subsidiaries has violated any Environmental Laws, lacks any permits,
licenses or other approvals required of them under applicable Environmental
Laws or is violating any term or condition of any such permit, license or
approval, except in each case as would not, individually or in the aggregate,
result in a Material Adverse Effect on Altrimega.
4.13 Financial and Other Information.
(a) The historical financial statements (including the notes
thereto) contained (or incorporated by reference) in the Altrimega Securities
Filings have been prepared in accordance with GAAP applied on a consistent
basis throughout the periods covered thereby (except as may be indicated in
the notes thereto), and present fairly the financial condition of Altrimega
and its results of operations as of the dates and for the periods indicated,
subject in the case of the unaudited financial statements only to normal
year-end adjustments (none of which will be material in amount) and the
omission of footnotes.
(b) Altrimega Securities Filings did not, as of their filing
dates, contain (directly or by incorporation by reference) any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein (or incorporated
therein by reference), in light of the circumstances under which they were or
will be made, not misleading.
4.14 Trading. No order suspending the sale or ceasing the trading
or quotation of the Altrimega Common Stock on the Over-The-Counter Bulletin
Board has been issued by any court, securities commission or regulatory
authority in the United States, and no proceedings for such purpose are
pending or, to the knowledge of Altrimega, after reasonable inquiry,
threatened.
4.15 Brokers or Finders. No broker or finder has acted directly or
indirectly for Altrimega, any Altrimega Party or any of their Affiliates in
connection with the transactions contemplated by this Agreement, and neither
Altrimega, any Altrimega Party nor any of their Affiliates has incurred any
obligation to pay any brokerage or finder's fee or other commission in
connection with the transaction contemplated by this Agreement.
4.16 Disclosure. No representation or warranty of Altrimega in this
Agreement or in the Collateral Documents and no statement in any certificate
furnished or to be furnished by Altrimega pursuant to this Agreement
contained, contains or will contain on the date such agreement or certificate
was or is delivered, or on the Closing Date, any untrue statement of a
material fact, or omitted, omits or will omit on such date to state any
material fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.
4.17 Filings. Altrimega has made all of the filings required by the
Securities Act of 1933, as amended, and the Exchange Act of 1934, as amended,
required to be made and no such filing contains any untrue statement of a
material fact or omits to state a material fact necessary to make the
statements made, not misleading.
4.18 Tax Consequences. The Altrimega Parties make no representation
or warranty with respect to the tax consequences of the transactions
contemplated by this Agreement.
ARTICLE V
COVENANTS OF THE COMPANY
Between the date of this Agreement and the Closing Date:
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5.1 Additional Information. The Company shall provide to Altrimega
and its Representatives such financial, operating and other documents, data
and information relating to the Company, the Company Business and the Company
Assets and Liabilities of the Company, as Altrimega or its Representatives may
reasonably request. In addition, the Company shall take all action necessary
to enable Altrimega and its Representatives to review, inspect and audit the
Company Assets, the Company Business and Liabilities of the Company and
discuss them with the Company's officers, employees, independent accountants,
customers, licensees, and counsel. Notwithstanding any investigation that
Altrimega may conduct of the Company, the Company Business, the Company Assets
and the Liabilities of the Company, the Altrimega Parties may fully rely on
the Company's warranties, covenants and indemnities set forth in this
Agreement.
5.2 Continuity and Maintenance of Operations. The Company shall,
and shall cause each of its Subsidiaries to use its commercially reasonable
efforts to promote the financial success of the Company Business and promptly
notify Altrimega of any material adverse change in the condition (financial or
otherwise) of the Company Business and use its commercially reasonable efforts
to promote, develop and preserve its relationships with its present employees
as well as the goodwill of its customers and promptly notify Altrimega of any
material adverse change in such relationships.
5.3 Consents and Approvals. As soon as practicable after execution
of this Agreement, the Company shall use commercially reasonable efforts to
obtain any necessary consent, approval, authorization or order of, make any
registration or filing with or give any notice to, any Regulatory Authority or
Person as is required to be obtained, made or given by the Company to
consummate the transactions contemplated by this Agreement and the Collateral
Documents.
5.4 Fairness Hearing. The Company shall, promptly after the
execution of this Agreement and from time to time thereafter, provide such
information, documents and other assistance to Altrimega as may be required or
appropriate for inclusion in the application for a permit to issue securities
pursuant to Section 25142 of the California Corporate Securities Law of 1968.
5.5 Meeting of the Company Shareholders.
(a) Promptly after the execution of this Agreement, the
Company will take all action necessary in accordance its Articles of
Incorporation and by-laws to convene a meeting of the Company's shareholders
to consider adoption and approval of this Agreement and approval of the Merger
(the "Shareholders' Meeting") to be held as promptly as practicable. The
Company will use its reasonable efforts to solicit from its shareholders
proxies in favor of the adoption and approval of this Agreement and the
approval of the Merger and will take all other action necessary or advisable
to secure the vote or consent of its shareholders required by the CCC to
obtain such approvals. The Company shall ensure that the Shareholder Meeting
is called, noticed, convened, held and conducted, and that all proxies
solicited by the Company in connection with the Shareholder Meeting are
solicited, in compliance with the CCC, the Company's Articles of Incorporation
and by-laws, and all other applicable laws.
(b) (i) The Board of Directors of the Company shall
recommend that the Company's shareholders vote in favor of and adopt and
approve this Agreement and approve the Merger at the Shareholders' Meeting;
(ii) the Company's proxy statement shall include a statement to the effect
that the Board of Directors of the Company has recommended that the Company's
shareholders vote in favor of and adopt and approve this Agreement and the
Merger at the Company Shareholders' Meeting; and (iii) neither the Board of
Directors of the Company nor any committee thereof shall withdraw, amend or
modify, or propose or resolve to withdraw, amend or modify in a manner adverse
to Altrimega, the recommendation of the Board of Directors of the Company that
the Company Shareholders vote in favor of and adopt and approve this Agreement
and the Merger.
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5.6 Notification of Certain Matters. The Company shall promptly
notify Altrimega of any fact, event, circumstance or action known to it that
is reasonably likely to cause the Company to be unable to perform any of its
covenants contained herein or any condition precedent in ARTICLE VII not to be
satisfied, or that, if known on the date of this Agreement, would have been
required to be disclosed to Altrimega pursuant to this Agreement or the
existence or occurrence of which would cause any of the Company's
representations or warranties under this Agreement not to be correct and/or
complete. The Company shall give prompt written notice to Altrimega of any
adverse development causing a breach of any of the representations and
warranties in ARTICLE III as of the date made.
5.7 Company Schedules. The Company shall, from time to time prior
to Closing, supplement its Schedules with additional information that, if
existing or known to it on the date of delivery to the Altrimega Parties,
would have been required to be included therein. For purposes of determining
the satisfaction of any of the conditions to the obligations of the Altrimega
Parties in ARTICLE VII, the Schedules shall be deemed to include only (a) the
information contained therein on the date of this Agreement and (b)
information added to the Schedules by written supplements delivered prior to
Closing by the Company that (i) are accepted in writing by Altrimega, or (ii)
reflect actions taken or events occurring after the date hereof prior to
Closing.
5.8 State Statutes. The Company and its Board of Directors shall,
if any state takeover statute or similar law is or becomes applicable to the
Merger, this Agreement or any of the transactions contemplated by this
Agreement, use all reasonable efforts to ensure that the Merger and the other
transactions contemplated by this Agreement may be consummated as promptly as
practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on the Merger, this
Agreement and the transactions contemplated hereby.
ARTICLE VI
COVENANTS OF THE ALTRIMEGA PARTIES
Between the date of this Agreement and the Closing Date,
6.1 Additional Information. Altrimega shall provide to the Company
and its Representatives such financial, operating and other documents, data
and information relating to Altrimega and its Subsidiaries, the Altrimega
Business and the Altrimega Assets and the Liabilities of Altrimega and its
Subsidiaries, as the Company or its Representatives may reasonably request.
In addition, the Company shall take all action necessary to enable the Company
and its Representatives to review and inspect the Altrimega Assets, the
Altrimega Business and the Liabilities of Altrimega and its Subsidiaries and
discuss them with the Company's officers, employees, independent accountants
and counsel. Notwithstanding any investigation that the Company may conduct
of Altrimega and its Subsidiaries, the Altrimega Business, the Altrimega
Assets and the Liabilities of Altrimega and its Subsidiaries, the Company may
fully rely on the Altrimega Parties' warranties, covenants and indemnities set
forth in this Agreement.
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6.2 No Solicitations. From and after the date of this Agreement
until the Effective Time or termination of this Agreement pursuant to ARTICLE
X, the Company will not nor will it authorize or permit any of its officers,
directors, affiliates or employees or any investment banker, attorney or other
advisor or representative retained by it, directly or indirectly, (i) solicit
or initiate the making, submission or announcement of any other acquisition
proposal, (ii) participate in any discussions or negotiations regarding, or
furnish to any person any non-public information with respect to any other
acquisition proposal, (iii) engage in discussions with any Person with respect
to any other acquisition proposal, except as to the existence of these
provisions, (iv) approve, endorse or recommend any other acquisition proposal
or (v) enter into any letter of intent or similar document or any contract
agreement or commitment contemplating or otherwise relating to any other
acquisition proposal.
6.3 Continuity and Maintenance of Operations. Altrimega shall, and
shall cause each of its Subsidiaries to operate the Altrimega Business in a
commercially reasonable manner and promptly notify the Company of any material
adverse change in the condition (financial or otherwise) of the Altrimega
Business.
6.4 Consents and Approvals. As soon as practicable after execution
of this Agreement, the Altrimega Parties shall use their commercially
reasonable efforts to obtain any necessary consent, approval, authorization or
order of, make any registration or filing with or give notice to, any
Regulatory Authority or Person as is required to be obtained, made or given by
any of the Altrimega Parties to consummate the transactions contemplated by
this Agreement and the Collateral Documents.
6.5 Fairness Hearing. Promptly upon execution of this Agreement,
Altrimega shall prepare and file with the California Department of
Corporations an application for a permit to issue securities pursuant to
Section 25142 of the California Corporate Securities Law of 1968 with respect
to the Merger Shares and shall use its best efforts to cause a permit to be
issued.
6.6 Financial and Other Information. Altrimega shall, promptly
after execution of this Agreement and from time to time thereafter, provide
such information and documents to the Company and its Affiliates concerning
Altrimega, its Subsidiaries and shareholders as may be required or appropriate
for inclusion in the Company's proxy statement prepared in conjunction with
this offering.
6.7 Notification of Certain Matters. Altrimega shall promptly
notify the Company of any fact, event, circumstance or action known to it that
is reasonably likely to cause any Altrimega Party to be unable to perform any
of its covenants contained herein or any condition precedent in ARTICLE VIII
not to be satisfied, or that, if known on the date of this Agreement, would
have been required to be disclosed to the Company pursuant to this Agreement
or the existence or occurrence of which would cause any of the Altrimega
Parties' representations or warranties under this Agreement not to be correct
and/or complete. The Altrimega Parties shall give prompt written notice to
the Company of any adverse development causing a breach of any of the
representations and warranties in ARTICLE IV.
6.8 Altrimega Schedules. The Altrimega Parties shall, from time to
time prior to Closing, supplement the Altrimega Schedules with additional
information that, if existing or known to it on the date of this Agreement,
would have been required to be included therein. For purposes of determining
the satisfaction of any of the conditions to the obligations of the Company in
ARTICLE VIII, the Altrimega Schedules shall be deemed to include only (a) the
information contained therein on the date of delivery to the Company and (b)
information added to the Altrimega Schedules by written supplements delivered
prior to Closing by the Altrimega Parties that (i) are accepted in writing by
the Company or (ii) reflect actions taken or events occurring after the date
hereof and prior to Closing.
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6.9 Securities Filings. Altrimega will timely file all reports and
other documents required to be filed with the Securities and Exchange
Commission, which reports and other documents do not and will not contain any
misstatement of a material fact, and do not and will not omit any material
fact necessary to make the statements therein not misleading.
6.10 Election to Altrimega's Board of Directors. At the Effective
Time of the Merger, Altrimega shall promptly secure the resignation of present
directors in order to cause the nominees of the Company to be appointed to
Altrimega's board of directors and, subject to fiduciary obligations under
applicable law.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ALTRIMEGA PARTIES
All obligations of the Altrimega Parties under this Agreement shall be
subject to the fulfillment at or prior to Closing of each of the following
conditions, it being understood that the Altrimega Parties may, in their sole
discretion, to the extent permitted by applicable Legal Requirements, waive
any or all of such conditions in whole or in part.
7.1 Accuracy of Representations. All representations and warranties
of the Company contained in this Agreement, the Collateral Documents and any
certificate delivered by any of the Company at or prior to Closing shall be,
if specifically qualified by materiality, true in all respects and, if not so
qualified, shall be true in all material respects, in each case on and as of
the Closing Date with the same effect as if made on and as of the Closing
Date, except for representations and warranties expressly stated to be made as
of the date of this Agreement or as of another date other than the Closing
Date and except for changes contemplated or permitted by this Agreement. The
Company shall have delivered to Altrimega and Merger Sub a certificate dated
as of the Closing Date to the foregoing effect.
7.2 Covenants. The Company shall, in all material respects, have
performed and complied with each of the covenants, obligations and agreements
contained in this Agreement and the Collateral Documents that are to be
performed or complied with by them at or prior to Closing. The Company shall
have delivered to Altrimega and Merger Sub a certificate dated the Closing
Date to the foregoing effect.
7.3 Consents and Approvals. All consents, approvals, permits,
authorizations and orders required to be obtained from, and all registrations,
filings and notices required to be made with or given to, any Regulatory
Authority or Person as provided herein shall have been obtained.
7.4 Delivery of Documents. The Company shall have delivered, or
caused to be delivered, to Altrimega and Merger Sub the following documents:
(i) Certified copies of the Company's articles of
incorporation and by-laws and certified resolutions of the board of
directors and Shareholders of the Company authorizing the execution of
this Agreement and the Collateral Documents to which it is a party and
the consummation of the transactions contemplated hereby and thereby.
(ii) Such other documents and instruments as Altrimega may
reasonably request: (A) to evidence the accuracy of the Company's
representations and warranties under this Agreement, the Collateral
Documents and any documents, instruments or certificates required to be
delivered thereunder; (B) to evidence the performance by the Company of,
or the compliance by the Company with, any covenant, obligation,
condition and agreement to be performed or complied with by the Company
under this Agreement and the Collateral Documents; or (C) to
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otherwise facilitate the consummation or performance of any of the
transactions contemplated by this Agreement and the Collateral
Documents.
7.5 No Material Adverse Change. Since the date hereof, there shall
have been no material adverse change in the Company Assets, the Company
Business or the financial condition or operations of the Company, taken as a
whole.
7.6 Lock-Up Agreements. The Company will have obtained signed
Lock-Up Agreements, a form of which is attached hereto as Exhibit A, from the
Company's shareholders set forth on Schedule 7.6.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY
All obligations of the Company under this Agreement shall be subject to
the fulfillment at or prior to Closing of the following conditions, it being
understood that the Company may, in its sole discretion, to the extent
permitted by applicable Legal Requirements, waive any or all of such
conditions in whole or in part.
8.1 Accuracy of Representations. All representations and warranties
of the Altrimega Parties contained in this Agreement and the Collateral
Documents and any other document, instrument or certificate delivered by any
of the Altrimega Parties at or prior to the Closing shall be, if specifically
qualified by materiality, true and correct in all respects and, if not so
qualified, shall be true and correct in all material respects, in each case on
and as of the Closing Date with the same effect as if made on and as of the
Closing Date, except for representations and warranties expressly stated to be
made as of the date of this Agreement or as of another date other than the
Closing Date and except for changes contemplated or permitted by this
Agreement. The Altrimega Parties shall have delivered to the Company a
certificate dated as of the Closing Date to the foregoing effect.
8.2 Covenants. The Altrimega Parties shall, in all material
respects, have performed and complied with each obligation, agreement,
covenant and condition contained in this Agreement and the Collateral
Documents and required by this Agreement and the Collateral Documents to be
performed or complied with by the Altrimega Parties at or prior to Closing.
The Altrimega Parties shall have delivered to the Company a certificate dated
the Closing Date to the foregoing effect.
8.3 Consents and Approvals. All consents; approvals, authorizations
and orders required to be obtained from, and all registrations, filings and
notices required to be made with or given to, any Regulatory Authority or
Person as provided herein shall have been obtained.
8.4 Delivery of Documents. The Altrimega Parties, as applicable,
shall have executed and delivered, or caused to be executed and delivered, to
the Company the following documents:
(i) Certified copies of the articles of incorporation and
by-laws of Altrimega and certified resolutions by the board of directors
authorizing the execution of this Agreement and the Collateral Documents
and the consummation of the transactions contemplated hereby.
(ii) Such other documents and instruments as the Company may
reasonably request: (A) to evidence the accuracy of the representations
and warranties of the Altrimega Parties under this Agreement and the
Collateral Documents and any documents, instruments or certificates
required to be delivered thereunder; (B) to evidence the performance by
the Altrimega Parties of, or the compliance by the Altrimega Parties
with, any covenant, obligation, condition
20
and agreement to be performed or complied with by the Altrimega Parties
under this Agreement and the Collateral Documents; or (C) to otherwise
facilitate the consummation or performance of any of the transactions
contemplated by this Agreement and the Collateral Documents.
(iii) Letters of resignation from Altrimega's current
officers and directors to be effective upon the Closing.
(iv) Board resolutions from Altrimega's current directors
appointing designees of the Company to Altrimega's board of directors.
8.5 No Material Adverse Change. There shall have been no material
adverse change in the business, financial condition or operations of Altrimega
and its Subsidiaries taken as a whole.
8.6 No Litigation. No action, suit or proceeding shall be pending
or threatened by or before any Regulatory Authority and no Legal Requirement
shall have been enacted, promulgated or issued or deemed applicable to any of
the transactions contemplated by this Agreement and the Collateral Documents
that would: (i) prevent consummation of any of the transactions contemplated
by this Agreement and the Collateral Documents; (ii) cause any of the
transactions contemplated by this Agreement and the Collateral Documents to be
rescinded following consummation; or (iii) have a Material Adverse Effect on
Altrimega.
8.7 No Assets & Liabilities. Altrimega and its Subsidiaries shall
have no assets or liabilities.
8.8 Authorized Shares. Altrimega shall have increased its authorized
common stock to 100,000,000 shares.
8.9 Instructions Regarding Cancellation of Shares. Xx. Xxxxxx shall
have delivered to the Company an irrevocable letter of instruction for the
cancellation of 14,020,000, in form and substance reasonably satisfactory to
the Company.
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification by the Company. The Company shall, prior to
(but not after) the Closing, indemnify, defend and hold harmless (i)
Altrimega, (ii) each of Altrimega's assigns and successors in interest to the
Company Shares, and (iii) each of their respective shareholders, members,
partners, directors, officers, managers, employees, agents, attorneys and
representatives, from and against any and all Losses which may be incurred or
suffered by any such party and which may arise out of or result from any
breach of any representation, warranty, covenant or agreement of the Company
contained in this Agreement.
9.2 Indemnification by the Altrimega Parties. The Altrimega Parties
shall indemnify, defend and hold harmless the Company and each of the Company
Shareholders from and against any and all Losses which may be incurred or
suffered by any such party hereto and which may arise out of or result from
any breach of any representation, warranty, covenant or agreement of the
Altrimega Parties contained in this Agreement made as of the Closing.
Notwithstanding the foregoing, no claim under this Section 9.2 may be made
unless notice is given pursuant to Section 9.3 within one year from the
Closing Date.
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9.3 Notice to Indemnifying Party. If any party (the "Indemnified
Party") receives notice of any claim or other commencement of any action or
proceeding with respect to which any other party (or parties) (the
"Indemnifying Party") is obligated to provide indemnification pursuant to
Sections 9.1 or 9.2, the Indemnified Party shall promptly give the
Indemnifying Party written notice thereof, which notice shall specify in
reasonable detail, if known, the amount or an estimate of the amount of the
liability arising therefrom and the basis of the claim. Such notice shall be
a condition precedent to any liability of the Indemnifying Party for
indemnification hereunder, but the failure of the Indemnified Party to give
prompt notice of a claim shall not adversely affect the Indemnified Party's
right to indemnification hereunder unless the defense of that claim is
materially prejudiced by such failure. The Indemnified Party shall not settle
or compromise any claim by a third party for which it is entitled to
indemnification hereunder without the prior written consent of the
Indemnifying Party (which shall not be unreasonably withheld or delayed)
unless suit shall have been instituted against it and the Indemnifying Party
shall not have taken control of such suit after notification thereof as
provided in Section 9.4.
9.4 Defense by Indemnifying Party. In connection with any claim
giving rise to indemnity hereunder resulting from or arising out of any claim
or legal proceeding by a Person who is not a party to this Agreement, the
Indemnifying Party at its sole cost and expense may, upon written notice to
the Indemnified Party, assume the defense of any such claim or legal
proceeding (i) if it acknowledges to the Indemnified Party in writing its
obligations to indemnify the Indemnified Party with respect to all elements of
such claim (subject to any limitations on such liability contained in this
Agreement) and (ii) if it provides assurances, reasonably satisfactory to the
Indemnified Party, that it will be financially able to satisfy such claims in
full if the same are decided adversely. If the Indemnifying Party assumes the
defense of any such claim or legal proceeding, it may use counsel of its
choice to prosecute such defense, subject to the approval of such counsel by
the Indemnified Party, which approval shall not be unreasonably withheld or
delayed. In this regard, Loeb & Loeb LLP is hereby approved by Altrimega as
counsel to the Company (in its capacity as the Indemnifying Party). The
Indemnified Party shall be entitled to participate in (but not control) the
defense of any such action, with its counsel and at its own expense; provided,
however, that if the Indemnified Party, in its sole discretion, determines
that there exists a conflict of interest between the Indemnifying Party (or
any constituent party thereof) and the Indemnified Party, the Indemnified
Party (or any constituent party thereof) shall have the right to engage
separate counsel, the reasonable costs and expenses of which shall be paid by
the Indemnified Party. If the Indemnifying Party assumes the defense of any
such claim or legal proceeding, the Indemnifying Party shall take all steps
necessary to pursue the resolution thereof in a prompt and diligent manner.
The Indemnifying Party shall be entitled to consent to a settlement of, or the
stipulation of any judgment arising from, any such claim or legal proceeding,
with the consent of the Indemnified Party, which consent shall not be
unreasonably withheld or delayed; provided, however, that no such consent
shall be required from the Indemnified Party if (i) the Indemnifying Party
pays or causes to be paid all Losses arising out of such settlement or
judgment concurrently with the effectiveness thereof (as well as all other
Losses theretofore incurred by the Indemnified Party which then remain unpaid
or unreimbursed), (ii) in the case of a settlement, the settlement is
conditioned upon a complete release by the claimant of the Indemnified Party
and (iii) such settlement or judgment does not require the encumbrance of any
asset of the Indemnified Party or impose any restriction upon its conduct of
business.
ARTICLE X
TERMINATION
10.1 Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned, at any time prior to the
Effective Time.
(a) by mutual written agreement of Altrimega and the
Company hereto duly authorized by action taken by or on behalf of their
respective Boards of Directors; or
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10.2 Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned, at any time prior to the
Effective Time.
(a) by mutual written agreement of Altrimega and the
Company hereto duly authorized by action taken by or on behalf of their
respective Boards of Directors; or
(b) by either the Company or Altrimega upon notification to
the non-terminating party by the terminating party:
(i) at any time after November 1, 2001 if the
Merger shall not have been consummated on or prior to such date and such
failure to consummate the Merger is not caused by a material breach of
this Agreement by the terminating party;
(ii) if the terminating party is not in material
breach of its obligations under this Agreement and there has been a
material breach of any representation, warranty, covenant or agreement
on the part of the non-terminating party set forth in this Agreement
such that the conditions in Sections 7.1, 7.2, 8.1 or 8.2 will not be
satisfied; provided, however, that if such breach is curable by the
non-terminating party and such cure is reasonably likely to be
completed prior to the date specified in Section 10.2(b)(i), then, for
so long as the non-terminating party continues to use commercially
reasonable efforts to effect and cure, the terminating party may not
terminate pursuant to this Section 10.1(b)(ii);
(iii) if any court of competent jurisdiction or
other competent Governmental or Regulatory Authority shall have issued
an order making illegal or otherwise permanently restricting,
preventing or otherwise prohibiting the Merger and such order shall
have become final and nonappealable.
10.3 Effect of Termination. If this Agreement is validly terminated
by either the Company or Altrimega pursuant to Section 10.1, this Agreement
will forthwith become null and void and there will be no liability or
obligation on the part of the parties hereto, except that nothing contained
herein shall relieve any party hereto from liability for willful breach of its
representations, warranties, covenants or agreements contained in this
Agreement.
ARTICLE XI
MISCELLANEOUS
11.1 Parties Obligated and Benefited. This Agreement shall be
binding upon the Parties and their respective successors by operation of law
and shall inure solely to the benefit of the Parties and their respective
successors by operation of law, and no other Person shall be entitled to any
of the benefits conferred by this Agreement, except that the Company
Shareholders shall be third party beneficiaries of this Agreement. Without
the prior written consent of the other Party, no Party may assign this
Agreement or the Collateral Documents or any of its rights or interests or
delegate any of its duties under this Agreement or the Collateral Documents.
11.2 Publicity. The initial press release shall be a joint press
release and thereafter the Company and Altrimega each shall consult with each
other prior to issuing any press releases or otherwise making public
announcements with respect to the Merger and the other transactions
contemplated by this Agreement and prior to making any filings with any third
party and/or any Regulatory Authorities (including any national securities
interdealer quotation service) with respect
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thereto, except as may be required by law or by obligations pursuant to any
listing agreement with or rules of any national securities interdealer
quotation service.
11.3 Notices. Any notices and other communications required or
permitted hereunder shall be in writing and shall be effective upon delivery
by hand or upon receipt if sent by certified or registered mail (postage
prepaid and return receipt requested) or by a nationally recognized overnight
courier service (appropriately marked for overnight delivery) or upon
transmission if sent by telex or facsimile (with request for immediate
confirmation of receipt in a manner customary for communications of such
respective type and with physical delivery of the communication being made by
one or the other means specified in this Section as promptly as practicable
thereafter). Notices shall be addressed as follows:
(a) If to the Altrimega Parties or the Surviving
Corporation, to:
Altrimega Health Corporation
0000 Xxxx Xxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile No. (000) 000-0000
With a copy to:
Mabey & Xxxxxx, X.X.
0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000-0000
Attention: J. Xxxxxxx Xxxxxx, Esq.
Facsimile No. (000) 000-0000
If to the Company to:
0000 Xxxxxxxx Xxxx., Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Facsimile No. (000) 000-0000
With a copy to:
Loeb & Loeb LLP
00000 Xxxxx Xxxxxx Xxxx.
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Facsimile No. (000) 000-0000
Any Party may change the address to which notices are required to be sent by
giving notice of such change in the manner provided in this Section.
11.4 Attorneys' Fees. In the event of any action or suit based upon
or arising out of any alleged breach by any Party of any representation,
warranty, covenant or agreement contained in this Agreement or the Collateral
Documents, the prevailing Party shall be entitled to recover reasonable
attorneys' fees and other costs of such action or suit from the other Party.
Notwithstanding the foregoing,
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the prevailing Party shall only be entitled to recover reasonable attorneys'
fees from Xx. Xxxxxx in connection with an enforcement of his indemnity
obligations set forth in Section 9.2 hereof.
11.5 Headings. The Article and Section headings of this Agreement
are for convenience only and shall not constitute a part of this Agreement or
in any way affect the meaning or interpretation thereof.
11.6 Choice of Law. This Agreement and the rights of the Parties
under it shall be governed by and construed in all respects in accordance with
the laws of the State of California, without giving effect to any choice of
law provision or rule (whether of the State of California or any other
jurisdiction that would cause the application of the laws of any jurisdiction
other than the State of California).
11.7 Rights Cumulative. All rights and remedies of each of the
Parties under this Agreement shall be cumulative, and the exercise of one or
more rights or remedies shall not preclude the exercise of any other right or
remedy available under this Agreement or applicable law.
11.8 Further Actions. The Parties shall execute and deliver to each
other, from time to time at or after Closing, for no additional consideration
and at no additional cost to the requesting party, such further assignments,
certificates, instruments, records, or other documents, assurances or things
as may be reasonably necessary to give full effect to this Agreement and to
allow each party fully to enjoy and exercise the rights accorded and acquired
by it under this Agreement.
11.9 Time of the Essence. Time is of the essence under this
Agreement. If the last day permitted for the giving of any notice or the
performance of any act required or permitted under this Agreement falls on a
day which is not a Business Day, the time for the giving of such notice or the
performance of such act shall be extended to the next succeeding Business Day.
11.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.11 Entire Agreement. This Agreement (including the Exhibits, the
Company Schedules, the Altrimega Schedules and any other documents,
instruments and certificates referred to herein, which are incorporated in and
constitute a part of this Agreement) contains the entire agreement of the
Parties. Without limiting the generality of the foregoing, this Agreement is
intended to supercede the Letter of Intent dated June 21, 2001.
11.12 Expenses. Each party will be responsible for payment of its
expenses in connection with the transactions contemplated by this Agreement.
11.13 Survival of Representations and Covenants. Notwithstanding
any right of the Altrimega Parties fully to investigate the affairs of the
Company and notwithstanding any knowledge of facts determined or determinable
by the Altrimega Parties pursuant to such investigation or right of
investigation, the Altrimega Parties shall have the right to rely fully upon
the representations, warranties, covenants and agreements of the Company
contained in this Agreement. Each representation, warranty, covenant and
agreement of the Company contained herein shall survive the execution and
delivery of this Agreement and the Closing and shall thereafter terminate and
expire on the first anniversary of the Closing Date unless, prior to such
date, Altrimega has delivered to the Company Shareholders a written notice of
a claim with respect to such representation, warranty, covenant or agreement.
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IN WITNESS WHEREOF, the Parties hereto have duly executed this
Agreement as of the day and year first above written.
ALTRIMEGA HEALTH CORPORATION, a Nevada corporation
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman
ALTRIMEGA MERGER SUB, INC., a California corporation
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Sole Director
/s/ Xxxxxx X. Xxxxxx
----------------------------------------------------
Xxxxxx X. Xxxxxx
XXXXXXXXXXXX.XXX, a California corporation
By: /s/ Xxxxxx Xxxxxx
-------------------------------------------------
Name: Xxxxxx Xxxxxx
Title: Chairman
26
[Form of Lock-Up]
_____________, 2001
Altrimega Health Corporation
0000 Xxxx Xxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Re: Lock-Up Agreement
Dear Sir or Madam:
Reference is made to that certain Agreement and Plan of Merger (the
"Merger Agreement"), dated as of July 19, 2001, among Altrimega Health
Corporation, a Nevada corporation, (the "Company") Altrimega Merger Sub, Inc.
("Merger Sub"), a California corporation, Xxxxxx X. Xxxxxx and
XxxxxxXxxxxx.xxx, a California corporation, pursuant to which Merger Sub will
merger with and into the Company (the "Merger").
The Company has determined that the prospect of sales of the Company's
common stock, no par value ("Common Stock"), held by the undersigned within
one year after the Merger could be detrimental to the Company. The Company
has requested that the undersigned agree not to sell any shares of Common
Stock until the expiration of a period ending one year after the date hereof.
The undersigned recognizes that it is in the best financial interests of the
undersigned, as a holder of stock, options, warrants or other securities of
the Company, that the Company complete the Merger.
The undersigned further recognizes that the undersigned's Common Stock
is, or may be, subject to certain restrictions on its transferability,
including those imposed by the federal securities laws. Notwithstanding these
restrictions, the undersigned has agreed to enter into this letter agreement
to further assure the Company's Common Stock, now held by the undersigned,
will not enter the public market.
The undersigned, therefore, hereby acknowledges and agrees that the
undersigned will not, directly or indirectly, without the prior written
consent of the Company, sell, offer, contract to sell, pledge, grant any
option to purchase or otherwise dispose (collectively, a "Disposition") of any
shares of Common Stock or any securities convertible into or exchangeable for,
or any rights to purchase or acquire, Common Stock held by the undersigned,
acquired by the undersigned after the date hereof or which may be deemed to be
beneficially owned by the undersigned pursuant to the Rules and Regulations
promulgated under the Securities Exchange Act of 1934, as amended (the
"Lock-Up Shares"), for a period of one year from the date hereof (the "Lock-Up
Period"). The foregoing restriction is expressly agreed to preclude, among
other Dispositions, the holder of Lock-Up Shares from engaging in any hedging
or other transaction which is designed to or reasonably expected to lead to or
result in a Disposition of Lock-Up Shares during the Lock-Up Period, even if
such Lock-Up Shares would be disposed of by someone other than such holder.
Such prohibited hedging or other transactions would include, without
limitation, any short sale (whether or not against the box) or any purchase,
sale or grant of any right (including, without limitation, any put or call
option) with respect to any Lock-Up Shares or with respect to any security
(other than a broad-based market basket or index) that includes, relates to or
derives any significant part of its value from Lock-Up Shares.
Notwithstanding the foregoing, the undersigned may transfer any or all
of the Lock-Up Shares (i) as a bona fide gift or gifts or (ii) as a
distribution to limited partners or shareholders of such person; provided,
however, that in any such case it shall be a condition to the transfer that
the transferee execute an agreement stating that the transferee is receiving
and holding the Lock-Up Shares subject to the provisions of this letter
agreement. The transferor shall notify the Company in writing prior to the
transfer and there shall be no further transfer of such Lock-Up Shares except
in accordance with this letter agreement. Moreover, notwithstanding any
other provision of this letter agreement, the undersigned may exercise any
option to purchase shares of Common Stock, provided, however, that any shares
so acquired shall constitute Lock-Up Shares for the purposes of this letter
agreement.
The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent against the transfer of any
Lock-Up Shares.
Executed as an instrument under seal this ___ day of __________, 2001.
Very truly yours,
Securityholder
By:_________________________
Signature of Securityholder
Name of Co-Securityholder, if applicable
(please print)
By:____________________________________________
Signature of Co-Securityholder, if applicable
