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EXHIBIT 2.1
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
DATED AS OF MAY 5, 2000
AMONG
ENVISION DEVELOPMENT CORPORATION
LiQ ACQUISITION SUB, INC.,
LiQ, INC.
AND
XXXX XXXXX XXX XXXX
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AGREEMENT AND PLAN OF MERGER, dated as of May 5, 2000 (this
"AGREEMENT"), among ENVISION DEVELOPMENT CORPORATION, a Florida corporation
("ENVISION"), LiQ ACQUISITION SUB, INC., a Delaware corporation and a direct
wholly-owned subsidiary of Envision ("MERGER SUB"), LiQ, INC., a Delaware
corporation ("LIQ") and Xxxx Xxxxx Xxx Xxxx (the "PRINCIPAL STOCKHOLDER").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of LiQ, Envision and Merger
Sub deem it advisable and in the best interests of each corporation and its
respective stockholders that LiQ and Envision engage in a business combination
in order to advance the long-term strategic business interests of LiQ and
Envision;
WHEREAS, the combination of LiQ and Envision shall be effected
by the terms of this Agreement through a merger as outlined below (the
"MERGER");
WHEREAS, in furtherance thereof, the respective Boards of
Directors of LiQ, Envision and Merger Sub have adopted resolutions approving the
Merger, upon the terms and subject to the conditions set forth in this
Agreement, pursuant to which each share of (i) common stock, $.0001 par value,
of LiQ ("LIQ COMMON STOCK") issued and outstanding immediately prior to the
Effective Time (as defined in Section 1.3), other than shares owned or held
directly or indirectly by Envision or directly or indirectly by LiQ, and (ii)
Committed Stock (as defined in Section 1.8), will be converted into (x) the
right to receive shares of common stock, par value $0.01 per share, of Envision
("ENVISION COMMON STOCK") as set forth in Section 1.8, and (y) such shares of
Envision Common Stock upon compliance with the provisions set forth in this
Agreement;
WHEREAS, in furtherance of the Merger, the holder of the
majority of common stock of LiQ has adopted the Agreement in accordance with
Section 251 of the Delaware General Corporation Law (the "DGCL"); and
WHEREAS, for Federal income tax purposes, it is intended that
the Merger shall qualify as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations promulgated thereunder;
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth in
this Agreement, and intending to be legally bound hereby, the parties hereto
agree as follows:
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ARTICLE I
THE MERGER
I.1 THE MERGER. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the DGCL, Merger Sub shall
be merged with and into LiQ at the Effective Time. Following the Merger, the
separate corporate existence of Merger Sub shall cease and LiQ shall continue as
the surviving corporation (the "SURVIVING CORPORATION") under the name LiQ.
I.2 CLOSING. Subject to the terms and conditions hereof, the
closing of the Merger and the transactions contemplated by this Agreement (the
"CLOSING") will take place on the second Business Day after the satisfaction or
waiver (subject to applicable law) of the conditions set forth in Article V
(other than any such conditions which by their terms cannot be satisfied until
the Closing Date, which shall be required to be so satisfied or waived on the
Closing Date), unless another time or date is agreed to in writing by the
parties hereto (the actual time and date of the Closing being referred to herein
as the "CLOSING DATE"). The Closing shall be held at the offices of Xxxxxxx
Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, unless
another place is agreed to in writing by the parties hereto.
I.3 EFFECTIVE TIME. At the Closing the parties shall (i) file
a certificate of merger (the "CERTIFICATE OF MERGER") in such form as is
required by and executed in accordance with the relevant provisions of the DGCL
and (ii) make all other filings or recordings required under the DGCL. The
Merger shall become effective at such time as the Certificate of Merger is duly
filed with the Delaware Secretary of State or at such subsequent time as
Envision and LiQ shall agree and as shall be specified in the Certificate of
Merger (the date and time the Merger becomes effective being the "EFFECTIVE
TIME").
I.4 EFFECTS OF THE MERGER. At and after the Effective Time,
the Merger will have the effects set forth in the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time all the
property, rights, privileges, powers and franchises of LiQ and Merger Sub shall
be vested in the Surviving Corporation, and all debts, liabilities and duties of
LiQ and Merger Sub shall become the debts, liabilities and duties of the
Surviving Corporation.
I.5 CERTIFICATE OF INCORPORATION. The certificate of
incorporation of LiQ, as in effect immediately prior to the Effective Time,
shall be amended and restated as of the Effective Time so as to read in its
entirety in the form set forth as Exhibit 1.5 and, as so amended and restated,
shall be the certificate of incorporation of the Surviving Corporation, until
thereafter changed or amended as provided therein or by applicable law.
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I.6 BY-LAWS. At the Effective Time and without any further
action on the part of LiQ and Merger Sub, the By-Laws of Merger Sub shall be the
By-Laws of the Surviving Corporation and thereafter may be amended or repealed
in accordance with their terms or the certificate of incorporation of the
Surviving Corporation and as provided by law.
I.7 OFFICERS AND DIRECTORS OF SURVIVING CORPORATION. The
officers of LiQ as of the Effective Time shall be the officers of the Surviving
Corporation, until the earlier of their resignation or removal or otherwise
ceasing to be an officer or until their respective successors are duly elected
and qualified, as the case may be. The directors of the Surviving Corporation as
of the Effective Time shall be as provided in Schedule 1.7, which individuals
will serve as directors of the Surviving Corporation until the earlier of their
resignation or removal or otherwise ceasing to be a director or until their
respective successors are duly elected and qualified.
I.8 EFFECT OF MERGER ON CAPITAL STOCK.
(a) At the Effective Time by virtue of the Merger and without
any action on the part of the holder thereof, each share of LiQ Common Stock
issued and outstanding immediately prior to the Effective Time (other than
shares of LiQ Common Stock held by LiQ, all of which shall be canceled as
provided in Section 1.8(d)) shall be converted into the right to receive the
number of shares (the "EXCHANGE SHARES") of Envision Common Stock equal to (x)
640,000 divided by (y) the sum of (i) the total number of shares of LiQ Common
Stock outstanding immediately prior to the Effective Time plus (ii) the total
number of shares of Committed Stock (as defined in paragraph (b) of this Section
1.8) issuable immediately prior to the Effective Time (the Exchange Shares,
together with any cash in lieu of fractional shares of Envision Common Stock to
be paid pursuant to Section 2.5, the "MERGER CONSIDERATION")
(b) At the Effective Time by virtue of the Merger and without
any action on the part of the holder thereof, each share of LiQ Common Stock
committed for issuance (the "COMMITTED STOCK") pursuant to the several
Employment Agreements and Stock Restriction Agreements between LiQ and certain
employees of LiQ (collectively, the "STOCK COMMITMENT AGREEMENTS") shall
automatically vest according to their terms and shall be converted into the
right to receive the Merger Consideration. As a result of the Merger and without
any action on the part of the parties to the Stock Commitment Agreements, the
Stock Commitment Agreements will terminate and the parties to the Stock
Commitment Agreements shall thereafter cease to have any rights thereunder or
with respect to the Committed Stock. As soon as reasonably practicable after the
Effective Time, the Surviving Corporation shall, or shall cause the Exchange
Agent (as defined in Section 2.1) to, deliver to each holder of Committed Stock
(A) one or more shares of Envision Common Stock (which shall be in
uncertificated book-entry form unless a physical certificate is requested)
representing, in the aggregate, the whole number of shares that such holder has
the right to receive pursuant to this Section 1.8 (after taking into account all
shares of LiQ Common Stock then held by such holder) and (B) a check in the
amount equal to the cash that such holder has the right to receive pursuant to
Section 2.5. No interest will be paid or will accrue on any cash payable
pursuant to Section 2.5.
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(c) As a result of the Merger and without any action on the
part of the holders thereof, at the Effective Time, all shares of LiQ Common
Stock shall cease to be outstanding and shall be canceled and retired and shall
cease to exist, and each holder of a certificate which immediately prior to the
Effective Time represented any such shares of LiQ Common Stock (a "CERTIFICATE")
shall thereafter cease to have any rights with respect to such shares of LiQ
Common Stock, except the right to receive the Merger Consideration as provided
herein or by law.
(d) Each share of LiQ Common Stock issued and owned or held by
LiQ at the Effective Time shall, by virtue of the Merger, cease to be
outstanding and shall be canceled and retired and no stock of Envision or other
consideration shall be delivered in exchange therefor.
(e) Each share of common stock, par value $0.01 per share, of
Merger Sub issued and outstanding immediately prior to the Effective Time, shall
be converted into one validly issued, fully paid and nonassessable share of
common stock, par value $0.01 per share, of the Surviving Corporation as of the
Effective Time.
I.9 CERTAIN ADJUSTMENTS. The number of Exchange Shares shall
be adjusted to reflect appropriately the effect of any reclassification,
recapitalization, stock split, split-up, combination or exchange of shares of
Envision Common Stock or LiQ Common Stock from the date of this Agreement to the
Effective Time or a stock dividend or dividend payable in any other securities
shall be declared with a record date within such period, or any similar event
shall have occurred, such that the adjusted number of Exchange Shares issuable
pursuant to this Agreement provide the same economic effect as initially
contemplated by this Agreement.
ARTICLE II
EXCHANGE OF CERTIFICATES
II.1 EXCHANGE FUND. Prior to the Effective Time, Envision
shall authorize one or more persons to act as exchange agent hereunder or may
itself act as exchange agent for the purpose of exchanging Certificates for the
Merger Consideration (the "EXCHANGE AGENT"). At or prior to the Effective Time,
Envision shall deposit with the Exchange Agent, in trust for the benefit of
holders of shares of LiQ Common Stock and Committed Stock, certificates
representing the Envision Common Stock issuable pursuant to Section 1.8 in
exchange for outstanding shares of LiQ Common Stock and Committed Stock.
Envision agrees to make available to the Exchange Agent from time to time as
needed, cash sufficient to pay cash in lieu of fractional shares pursuant to
Section 2.5 and any dividends and other distributions pursuant to Section 2.3.
Any cash and certificates of Envision Common Stock deposited with the Exchange
Agent shall hereinafter be referred to as the "EXCHANGE FUND".
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II.2 EXCHANGE PROCEDURES. As soon as reasonably practicable
after the Effective Time, the Surviving Corporation shall cause the Exchange
Agent to mail to each holder of a Certificate (i) a letter of transmittal which
shall specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Exchange
Agent, and which letter shall be in customary form and have such other
provisions as Envision may reasonably specify and (ii) instructions for
effecting the surrender of such Certificates in exchange for the applicable
Merger Consideration. Upon surrender of a Certificate to the Exchange Agent
together with such letter of transmittal, duly executed and completed in
accordance with the instructions thereto, and such other documents as may
reasonably be required by the Exchange Agent, the holder of such Certificate
shall be entitled to receive in exchange therefor (A) one or more shares of
Envision Common Stock (which shall be in uncertificated book-entry form unless a
physical certificate is requested) representing, in the aggregate, the whole
number of shares that such holder has the right to receive pursuant to Section
1.8 (after taking into account all shares of LiQ Common Stock then held by such
holder) and (B) a check in the amount equal to the cash that such holder has the
right to receive pursuant to the provisions of this Article II, including cash
in lieu of any fractional shares of Envision Common Stock pursuant to Section
2.5 and dividends and other distributions pursuant to Section 2.3. No interest
will be paid or will accrue on any cash payable pursuant to Section 2.3 or
Section 2.5. In the event of a transfer of ownership of LiQ Common Stock which
is not registered in the transfer records of LiQ, one or more shares of Envision
Common Stock evidencing, in the aggregate, the proper number of shares of
Envision Common Stock, a check in the proper amount of cash in lieu of any
fractional shares of Envision Common Stock pursuant to Section 2.5 and any
dividends or other distributions to which such holder is entitled pursuant to
Section 2.3, may be issued with respect to such LiQ Common Stock to such a
transferee if the Certificate representing such shares of LiQ Common Stock is
presented to the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer and to evidence that any applicable stock
transfer taxes have been paid.
II.3 DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No
dividends or other distributions declared or made with respect to shares of
Envision Common Stock with a record date after the Effective Time shall be paid
to the holder of any unsurrendered Certificate with respect to the shares of
Envision Common Stock that such holder would be entitled to receive upon
surrender of such Certificate and no cash payment in lieu of fractional shares
of Envision Common Stock shall be paid to any such holder pursuant to Section
2.5 until such holder shall surrender such Certificate in accordance with
Section 2.2. Subject to the effect of applicable laws, following surrender of
any such Certificate, there shall be paid to such holder of shares of Envision
Common Stock issuable in exchange therefor, without interest, (a) promptly after
the time of such surrender, the amount of any cash payable in lieu of fractional
shares of Envision Common Stock to which such holder is entitled pursuant to
Section 2.5, and (b) at the appropriate payment date, the amount of dividends or
other distributions with a record date after the Effective Time but prior to
such surrender and a payment date subsequent to such surrender payable with
respect to such shares of Envision Common Stock.
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II.4 NO FURTHER OWNERSHIP RIGHTS IN LIQ COMMON STOCK. All
shares of Envision Common Stock issued and cash paid upon conversion of shares
of LiQ Common Stock and Committed Stock in accordance with the terms of Article
I and this Article II (including any cash paid pursuant to Section 2.3 or 2.5)
shall be deemed to have been issued or paid in full satisfaction of all rights
pertaining to the shares of LiQ Common Stock and Committed Stock. Until
surrendered as contemplated by this Article II, each Certificate shall be deemed
at any time after the Effective Time to represent only the right to receive upon
such surrender the Merger Consideration.
II.5 NO FRACTIONAL SHARES OF ENVISION COMMON STOCK.
(a) No certificates or scrip or shares of Envision Common
Stock representing fractional shares of Envision Common Stock or book-entry
credit of the same shall be issued upon the surrender for exchange of
Certificates or the conversion of Committed Stock and such fractional share
interests will not entitle the owner thereof to vote or to have any rights of a
shareholder of Envision or a holder of shares of Envision Common Stock.
(b) Notwithstanding any other provision of this Agreement,
each holder of shares of LiQ Common Stock or Committed Stock exchanged pursuant
to the Merger who would otherwise have been entitled to receive a fraction of a
share of Envision Common Stock (after taking into account all Certificates
delivered by such holder) shall receive, in lieu thereof, cash (without
interest) in an amount equal to the product of (i) such fractional part of a
share of Envision Common Stock multiplied by (ii) the average closing price for
a share of Envision Common Stock as reported on the American Stock Exchange
("AMEX") for the 20 consecutive trading days ending on the trading day
immediately prior to the Closing Date (the "CLOSING PRICE"). As promptly as
practicable after the determination of the amount of cash, if any, to be paid to
holders of fractional interests, the Exchange Agent shall so notify Envision,
and Envision shall cause the Surviving Corporation to deposit such amount with
the Exchange Agent and shall cause the Exchange Agent to forward payments to
such holders of fractional interests subject to and in accordance with the terms
hereof.
II.6 TERMINATION OF EXCHANGE FUND. Any portion of the Exchange
Fund which remains undistributed to the holders of Certificates for twelve
months after the Effective Time shall be delivered to Envision or otherwise on
the instruction of Envision and any holders of the Certificates who have not
theretofore complied with this Article II shall thereafter look only to the
Surviving Corporation and Envision for the Merger Consideration with respect to
the shares of LiQ Common Stock formerly represented thereby to which such
holders are entitled pursuant to Section 1.8 and Section 2.2, any cash in lieu
of fractional shares of Envision Common Stock to which such holders are entitled
pursuant to Section 2.5 and any dividends or distributions with respect to
shares of Envision Common Stock to which such holders are entitled pursuant to
Section 2.3. Any such portion of the Exchange Fund remaining unclaimed by
holders of shares of LiQ Common Stock five years after the Effective Time (or
such earlier date immediately prior to such time as such amounts would otherwise
escheat to or become property of any Governmental Entity (as defined in Section
3.1(c)(iii)) shall, to the extent permitted by law, become the property of
Envision free and clear of any claims or interest of any Person previously
entitled thereto.
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II.7 NO LIABILITY. None of Envision, Merger Sub, LiQ, the
Surviving Corporation or the Exchange Agent shall be liable to any Person in
respect of any Merger Consideration from the Exchange Fund delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
II.8 INVESTMENT OF THE EXCHANGE FUND. The Exchange Agent shall
invest any cash included in the Exchange Fund as directed by Envision on a daily
basis. Any interest and other income resulting from such investments shall
promptly be paid to Envision.
II.9 LOST CERTIFICATES. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such Person of a bond in
such reasonable amount as the Surviving Corporation may direct as indemnity
against any claim that may be made against it with respect to such Certificate,
the Exchange Agent will deliver in exchange for such lost, stolen or destroyed
Certificate the applicable Merger Consideration with respect to the shares of
LiQ Common Stock formerly represented thereby, any cash in lieu of fractional
shares of Envision Common Stock, and unpaid dividends and distributions on
shares of Envision Common Stock deliverable in respect thereof, pursuant to this
Agreement.
II.10 WITHHOLDING RIGHTS. Each of the Surviving Corporation
and Envision shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of shares of LiQ
Common Stock or Committed Stock such amounts as it is required to deduct and
withhold with respect to the making of such payment under the Code and the rules
and regulations promulgated thereunder, or any provision of state, local or
foreign tax law. To the extent that amounts are so withheld by the Surviving
Corporation or Envision, as the case may be, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the holder of
the shares of LiQ Common Stock or Committed Stock in respect of which such
deduction and withholding was made by the Surviving Corporation or Envision, as
the case may be.
II.11 FURTHER ASSURANCES. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of LiQ or Merger Sub, any deeds,
bills of sale, assignments or assurances and to take and do, in the name and on
behalf of LiQ or Merger Sub, any other actions and things to vest, perfect or
confirm of record or otherwise in the Surviving Corporation any and all right,
title and interest in, to and under any of the rights, properties or assets
acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger.
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II.12 STOCK TRANSFER BOOKS. The stock transfer books of LiQ
shall be closed immediately upon the Effective Time and there shall be no
further registration of transfers of shares of LiQ Common Stock thereafter on
the records of LiQ. On or after the Effective Time, any Certificates presented
to the Exchange Agent or Envision for any reason shall represent the Merger
Consideration with respect to the shares of LiQ Common Stock formerly
represented thereby, any cash in lieu of fractional shares of Envision Common
Stock to which the holders thereof are entitled pursuant to Section 2.5 and any
dividends or other distributions to which the holders thereof are entitled
pursuant to Section 2.3.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
III.1 REPRESENTATIONS AND WARRANTIES OF ENVISION. Except as
set forth in the Envision Disclosure Schedule delivered by Envision to LiQ prior
to the execution of this Agreement (the "ENVISION DISCLOSURE SCHEDULE") (each
section of which qualifies the correspondingly numbered representation and
warranty or covenant to the extent specified therein) Envision represents and
warrants to LiQ and the Principal Stockholder as follows:
(a) ORGANIZATION, STANDING AND POWER. Each of Envision and
each of its Subsidiaries (as defined in Section 8.10) is a corporation
duly organized, validly existing and in good standing under the laws of
its jurisdiction of incorporation or organization, has the requisite
power and authority to own, lease and operate its properties and to
carry on its business as now being conducted, except where the failure
to be so organized, existing and in good standing or to have such power
and authority would not reasonably be expected to have a Material
Adverse Effect on Envision, and is duly qualified and in good standing
to do business in each jurisdiction in which the nature of its business
or the ownership or leasing of its properties makes such qualification
necessary other than in such jurisdictions where the failure so to
qualify or to be in good standing would not reasonably be expected to
have a Material Adverse Effect on Envision. The copies of the
certificate of incorporation and by-laws of Envision which were
previously furnished or made available to LiQ are true, complete and
correct copies of such documents as in effect on the date of this
Agreement.
(b) CAPITAL STRUCTURE.
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(i) As of March 31, 2000, the authorized capital stock of
Envision consisted of (A) 20,000,000 shares of Envision Common Stock of
which 7,500,000 shares were outstanding and (B) 5,000,000 shares of
Preferred Stock, par value $0.01, no shares of which were outstanding.
Since March 31, 2000 to the date of this Agreement, there have been no
issuances of shares of the capital stock of Envision or any other
securities of Envision other than in connection with the acquisitions
set forth in Section 3.1(b) of the Envision Disclosure Schedule. All
issued and outstanding shares of the capital stock of Envision are duly
authorized, validly issued, fully paid and nonassessable, and no class
of capital stock is entitled to preemptive rights. Except as set forth
in Section 3.1(b) of the Envision Disclosure Schedule, there were
outstanding as of March 31, 2000 no options, warrants or other rights
to acquire capital stock from Envision other than options representing
in the aggregate the right to purchase 1,496,574 shares of Envision
Common Stock (collectively, the "ENVISION STOCK OPTIONS") under the
1999 Xxxxxxxxxx.xxx Incentive Stock Option Plan (the "ENVISION STOCK
OPTION PLAN"). Section 3.1(b) of the Envision Disclosure Schedule sets
forth a complete and correct list, as of March 31, 2000 of the number
of shares of Envision Common Stock subject to Envision Stock Options or
other rights to purchase or receive Envision Common Stock.
(ii) No bonds, debentures, notes or other indebtedness of
Envision having the right to vote on any matters on which holders of
capital stock of Envision may vote ("ENVISION VOTING DEBT") are issued
or outstanding.
(iii) Except as otherwise set forth in this Section 3.1(b)
and as contemplated by Section 1.8, as of the date of this Agreement,
there are no securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which Envision
is a party or by which any of them is bound obligating Envision to
issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock or other voting securities of
Envision or obligating to issue, grant, extend or enter into any such
security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking. As of the date of this Agreement, there are
no outstanding obligations of Envision to repurchase, redeem or
otherwise acquire any shares of capital stock of Envision.
(c) AUTHORITY; NO CONFLICTS.
(i) Envision has all requisite corporate power and authority
to enter into this Agreement and to consummate the transactions
contemplated hereby, including, without limitation, the issuance of the
shares of Envision Common Stock to be issued in the Merger (the "SHARE
ISSUANCE"), except for the filing of the additional listing application
and the receipt of approval therefor ("AMEX APPROVAL"). The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of Envision except for obtaining AMEX
Approval. This Agreement has been duly executed and delivered by
Envision and constitutes a valid and binding agreement of Envision,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or affecting
creditors generally or by general equity principles (regardless of
whether such enforceability is considered in a proceeding in equity or
at law).
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(ii) The execution and delivery of this Agreement by Envision
does not, and the consummation by Envision of the Merger and the other
transactions contemplated hereby will not, conflict with, or result in
any violation of, or constitute a default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination,
amendment, cancellation or acceleration of any obligation or the loss
of a material benefit under, or the creation of a lien, pledge,
security interest, charge or other encumbrance on any assets (any such
conflict, violation, default, right of termination, amendment,
cancellation or acceleration, loss or creation, a "VIOLATION") pursuant
to: (A) any provision of the certificate of incorporation or by-laws of
Envision or (B) subject to obtaining or making the consents, approvals,
orders, authorizations, registrations, declarations and filings
referred to in paragraph (iii) below, any loan or credit agreement,
note, mortgage, bond, indenture, lease, benefit plan or other
agreement, obligation, instrument, permit, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to
Envision or its properties or assets, other than the absence of AMEX
Approval.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any supranational, national,
state, municipal, local or foreign government, any instrumentality,
subdivision, court, administrative agency or commission or other
authority thereof, or any quasi-governmental or private body exercising
any regulatory, taxing, importing or other governmental or
quasi-governmental authority (a "GOVERNMENTAL ENTITY") or any other
third party, is required by or with respect to Envision in connection
with the execution and delivery of this Agreement by Envision or the
consummation of the Merger and the other transactions contemplated
hereby, except for those required under or in relation to (A) state
securities or "blue sky" laws (the "BLUE SKY LAWS"), (B) the DGCL with
respect to the filing of the Certificate of Merger, (C) rules and
regulations of the AMEX, (D) antitrust or other competition laws of
other jurisdictions and, (E) such consents, approvals, orders,
authorizations, registrations, declarations and filings the failure of
which to make or obtain would not reasonably be expected to have a
material adverse effect on, or materially delay, the ability of
Envision to consummate the transactions contemplated by this Agreement.
Consents, approvals, orders, authorizations, registrations,
declarations and filings required under or in relation to any of the
foregoing clauses (A) through (E) are hereinafter referred to as
"NECESSARY CONSENTS".
(d) REPORTS AND FINANCIAL STATEMENTS. Envision has filed all
required registration statements, prospectuses, reports, schedules,
forms, statements and other documents required to be filed by it with
the U.S. Securities and Exchange Commission (the "SEC") since June 4,
1999, including Envision's Annual Report on Form 10-K for the fiscal
year ended January 31, 2000 (collectively, including all exhibits
thereto, the "ENVISION SEC REPORTS"). No Subsidiary of Envision is
required to file any form, report, registration statement, prospectus
or other document with the SEC. None of the Envision SEC Reports, as of
their respective dates (and, if amended or superseded by a filing prior
to the date of this Agreement or the Closing Date, then on the date of
such filing), contained or will contain any untrue statement of a
material fact or omitted or will omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
Except as set forth in Section 3.1(d) of the Envision Disclosure
Schedule, all of such Envision SEC Reports, as of their respective
dates (and as of the date of any amendment to the respective Envision
SEC Report), complied as to form in all material respects with the
applicable requirements of the Securities Act of 1933, as amended (the
"SECURITIES ACT") and the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT") and the rules and regulations promulgated
thereunder.
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(e) FINANCIAL STATEMENTS. The audited consolidated balance
sheets and related audited statements of consolidated income, cash flow
and stockholders' equity of Envision and its Subsidiaries as at and for
the fiscal year of Envision ended January 31, 2000, together with the
notes thereto, present fairly in all material respects the consolidated
financial position of Envision and its Subsidiaries at such dates and
the consolidated results of their operations and their consolidated
cash flows for the periods then ended, and (ii) the consolidated
balance sheet (the "BALANCE SHEET") of Envision and its Subsidiaries at
January 31, 2000 ("the BALANCE SHEET DATE") reflected all material
liabilities and obligations of Envision and its consolidated
Subsidiaries, whether accrued, contingent or otherwise, as of the date
thereof, in each case, to the extent required by United States
generally accepted accounting principles, consistently applied
("GAAP"). Except as disclosed in Section 3.1(e) of the Envision
Disclosure Schedule, Envision does not have any liabilities, whether or
not of a kind required by GAAP to be set forth on a financial
statement, other than (a) liabilities incurred since January 31, 2000
in the ordinary course of business (none of which is a liability for
breach of warranty, tort or infringement) and fully reflected as
liabilities on the books and records of Envision, (b) liabilities
disclosed and reflected as liabilities on the financial statements or
(c) liabilities which would not reasonably be likely to have a Material
Adverse Effect on Envision.
(i) Since the Balance Sheet Date there has not been any event
or development resulting in a Material Adverse Effect or any event or
development which would reasonably be expected to result in a Material
Adverse Effect on Envision and its Subsidiaries, taken as a whole.
(ii) Since the Balance Sheet Date there has been no
declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of capital stock of Envision.
(f) LITIGATION. There is no suit, action, investigation or
proceeding pending or, to the Knowledge of Envision, threatened,
against or affecting Envision having, or which would reasonably be
expected to have, a Material Adverse Effect on Envision, nor is there
any judgment, decree, injunction, rule or order of any Governmental
Entity or arbitrator outstanding against Envision of Envision having,
or which reasonably would be expected to have, a Material Adverse
Effect on Envision.
(g) BROKERS OR FINDERS. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any
broker's or finder's fee or any other similar commission or fee in
connection with any of the transactions contemplated by this Agreement,
based upon arrangements made by or on behalf of Envision.
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(h) EXEMPT TRANSACTION. Assuming the accuracy and truth of the
representations of LiQ, the Principal Stockholder in Section 3.4 and of
each of the other stockholders of LiQ (together with the Principal
Stockholder, the "STOCKHOLDERS") in the Stockholder Letters (as defined
in Section 5.2(f)) and compliance by the Stockholders of all covenants
contained herein or in the Stockholder Letters applicable to the
Stockholders, the issuance of the shares of Envision Common Stock to
the Stockholders at the Closing will constitute a transaction exempt
from (a) the registration requirements of Section 5 of the Securities
Act, in reliance upon Section 4(2) of the Securities Act and the rules
and regulations promulgated thereunder and (b) the qualification
requirements of the applicable state securities laws.
(i) TAXES. Envision (i) has prepared in good faith and duly
and timely filed (taking into account any extension of time within
which to file) all material Tax Returns (as defined below) required to
be filed by it and all such filed Tax Returns are complete and accurate
in all material respects; (ii) has paid all Taxes that are shown as due
and payable on such filed Tax Returns or that Envision is obligated to
pay without the filing of a Tax Return; and (iii) has paid all other
charges, claims and assessments received to date in respect of material
Taxes other than those being contested in good faith for which
provision has been made in accordance with GAAP on the balance sheet
included in the Financial Statements. As of the date hereof, there are
no material pending audits, examinations, investigations, litigation,
or other proceedings in respect of Taxes of Envision.
As used in this Agreement, (i) the term "Tax" (including, with
correlative meaning, the terms "Taxes" and "Taxable") includes all
federal, state, local and foreign income, profits, premium, franchise,
gross receipts, environmental, customs duty, capital stock, severance,
stamp, payroll, sales, employment, unemployment, disability, use,
property, withholding, excise, production, value added, occupancy and
other taxes, duties or governmental levies of any nature whatsoever,
together with all interest, penalties and additions imposed with
respect to such amounts and any interest in respect of such penalties
and additions, and (ii) the term "Tax Return" includes all returns and
reports (including elections, declarations, disclosures, schedules,
estimates, information returns, claim for refund, and amended returns)
required to be supplied to a Tax authority relating to Taxes.
(j) EXCHANGE SHARES. As of the Effective Time, the Exchange
Shares will be duly authorized, validly issued, fully paid and
nonassessable.
III.2 REPRESENTATIONS AND WARRANTIES OF LIQ. Except as set
forth in the LiQ Disclosure Schedule delivered by LiQ to Envision prior to the
execution of this Agreement (the "LIQ DISCLOSURE SCHEDULE") (each section of
which qualifies the correspondingly numbered representation and warranty or
covenant to the extent specified therein), LiQ and the Principal Shareholder
jointly and severally represent and warrant to Envision and Merger Sub as
follows:
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(a) ORGANIZATION, STANDING AND POWER; SUBSIDIARIES. (i) LiQ is
a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or organization,
has the requisite power and authority to own, lease and operate its
properties and to carry on its business as now being conducted, except
where the failure to be so organized, existing and in good standing or
to have such power and authority would not reasonably be expected to
have a Material Adverse Effect on LiQ and is duly qualified and in good
standing to do business in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes such
qualification necessary other than in such jurisdictions where the
failure so to qualify or to be in good standing would not reasonably be
expected to have a Material Adverse Effect on LiQ. The copies of the
certificate of incorporation and by-laws of LiQ which were previously
furnished or made available to Envision are true, complete and correct
copies of such documents as in effect on the date of this Agreement.
LiQ has no Subsidiaries.
(b) CAPITAL STRUCTURE. (i) As of the date hereof, the
authorized capital stock of LiQ consisted of 10,000,000 shares of LiQ
Common Stock, of which 3,348,550 shares were outstanding. The number of
shares of LiQ Common Stock owned by each Stockholder is correctly
represented in Section 3.2(b) of the LiQ Disclosure Schedule, and each
Stockholder is the beneficial owner of the number of shares set forth
opposite his name in Section 3.2(b) of the LiQ Disclosure Schedule. All
issued and outstanding shares of the capital stock of LiQ are duly
authorized, validly issued, fully paid and nonassessable, and no class
of capital stock is entitled to preemptive rights. There were
outstanding as of the date hereof no options, warrants or other rights
to acquire capital stock from LiQ other than rights to receive in the
aggregate 27,500 shares of LiQ Common Stock pursuant to the Stock
Commitment Agreements. Section 3.2(b) of the LiQ Disclosure Schedule
sets forth a complete and correct list as of the date hereof, of the
number of shares of Committed Stock and the holders thereof.
(ii) No bonds, debentures, notes or other indebtedness of LiQ
having the right to vote on any matters on which stockholders may vote
("LIQ VOTING DEBT") are issued or outstanding.
(iii) As of the date of this Agreement, there are no
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which LiQ is a party or by
which it is bound obligating LiQ to issue, deliver or sell, or cause to
be issued, delivered or sold, additional shares of capital stock or
other voting securities of LiQ or obligating LiQ to issue, grant,
extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. As of the date of
this Agreement, there are no outstanding obligations of LiQ to
repurchase, redeem or otherwise acquire any shares of capital stock of
LiQ.
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(c) AUTHORITY; NO CONFLICTS. (i) LiQ has all requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of LiQ. This Agreement has been duly
executed and delivered by LiQ and constitutes a valid and binding
agreement of LiQ, enforceable against it in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or affecting
creditors generally or by general equity principles (regardless of
whether such enforceability is considered in a proceeding in equity or
at law).
(ii) The execution and delivery of this Agreement by LiQ does
not, and the consummation by LiQ of the Merger and the other
transactions contemplated hereby will not, conflict with, or result in
a Violation pursuant to: (A) any provision of the certificate of
incorporation or by-laws of LiQ or (B) subject to obtaining or making
the consents, approvals, orders, authorizations, registrations,
declarations and filings referred to in paragraph (iii) below, any loan
or credit agreement, note, mortgage, bond, indenture, lease, benefit
plan or other agreement, obligation, instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to LiQ or its properties or assets.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity or
any other third party is required by or with respect to LiQ in
connection with the execution and delivery of this Agreement by LiQ or
the consummation of the Merger and the other transactions contemplated
hereby, except the Necessary Consents and such consents, approvals,
orders, authorizations, registrations, declarations and filings the
failure of which to make or obtain would not reasonably be expected to
have a material adverse effect on, or materially delay, the ability of
LiQ to consummate the transactions contemplated by this Agreement.
(d) FINANCIAL STATEMENTS; UNDISCLOSED LIABILITIES. (i) The
audited consolidated balance sheets and related audited statements of
consolidated income, cash flow and stockholders' equity of LiQ as at
and for the fiscal year of LiQ ended January 31, 2000, (ii) the
unaudited consolidated balance sheet and related unaudited consolidated
statements of income, cash flow and stockholders' equity of LiQ, as at
and for the three months ended April 30, 2000, together with the notes
thereto, present fairly in all material respects the financial position
of LiQ at such dates and the results of its operations and its cash
flows for the periods then ended, and (iii) the consolidated balance
sheet (the "BALANCE SHEET") of LiQ at January 31, 2000 ("the BALANCE
SHEET DATE") reflected all material liabilities and obligations of LiQ,
whether accrued, contingent or otherwise, as of the date thereof, in
each case, to the extent required by United States generally accepted
accounting principles, consistently applied ("GAAP"). Except as
disclosed in Section 3.2(d) of the LiQ Disclosure Schedule, LiQ does
not have any liabilities, whether or not of a kind required by GAAP to
be set forth on a financial statement, other than (a) liabilities
incurred since January 31, 2000 in the ordinary course of business
(none of which is a liability for breach of contract, breach of
warranty, tort, infringement, claim or lawsuit) and fully reflected as
liabilities on the books and records of LiQ, (b) liabilities disclosed
and reflected as liabilities on the financial statements or (c)
liabilities which would not reasonably be likely to have a Material
Adverse Effect on LiQ.
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(ii) Since the Balance Sheet Date there has not been any event
or development resulting in a Material Adverse Effect or any event or
development which would reasonably be expected to result in a Material
Adverse Effect on LiQ.
(iii) Since the Balance Sheet Date there has been no
declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of capital stock of LiQ.
(e) BOARD APPROVAL. The Board of Directors of LiQ, by
resolutions duly adopted by unanimous vote of those voting at a meeting
duly called and held and not subsequently rescinded or modified in any
way (the "LIQ BOARD APPROVAL"), has duly (i) determined that this
Agreement and the Merger are fair to and in the best interests of LiQ
and its stockholders, (ii) approved this Agreement and the Merger and
(iii) (x) recommended that the stockholders of LiQ adopt this Agreement
and approve the Merger and (y) directed that this Agreement and the
transactions contemplated hereby be submitted for consideration by the
Stockholders.
(f) VOTE OR CONSENT REQUIRED AND OBTAINED. The affirmative
vote or written consent of the holders of a majority of the outstanding
shares of LiQ Common Stock to approve the Merger is the only action of
the holders of any class or series of LiQ capital stock necessary to
adopt this Agreement and approve the Merger and the other transactions
contemplated hereby, and such affirmative vote or written consent has
been obtained.
(g) LITIGATION; COMPLIANCE WITH LAWS. (i) There is no suit,
action, investigation or proceeding pending or, to the Knowledge of
LiQ, threatened, against or affecting LiQ having, or which would
reasonably be expected to have, a Material Adverse Effect on LiQ, nor
is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against LiQ having, or
which reasonably would be expected to have, a Material Adverse Effect
on LiQ.
(ii) Except as would not reasonably be expected to have a
Material Adverse Effect on LiQ, LiQ holds all permits, licenses,
variances, exemptions, orders and approvals of all Governmental
Entities necessary for the operation of the business of LiQ, taken as a
whole (the "LIQ PERMITS"). LiQ is in compliance with the terms of the
LiQ Permits, except where the failure so to comply would not reasonably
be expected to have a Material Adverse Effect on LiQ. The business of
LiQ is not being conducted in violation of, and LiQ has not received
any notices of violations with respect to, any law, ordinance or
regulation of any Governmental Entity, except for possible violations
which would not reasonably be expected to have a Material Adverse
Effect on LiQ.
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(iii) To the Knowledge of LiQ, LiQ is, and at all times since
the date of its incorporation has been, in compliance with all
applicable foreign, federal, state, local or municipal laws, rules,
orders, regulations, statutes, ordinances, codes, decrees, requirements
of any Governmental Entity properly promulgated and having the force or
effect of law or other requirements of law (including common law)
regulating, relating to or imposing liability or standards of conduct
concerning protection of human health or the environment
("ENVIRONMENTAL LAWS"), except to the extent that the failure to comply
therewith has not had and would not, individually or in the aggregate,
be reasonably expected to have a Material Adverse Effect on LiQ.
(h) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except (i) for
liabilities incurred in connection with this Agreement or the
transactions contemplated hereby and (ii) as permitted by Section 4.1,
since January 31, 2000, LiQ has conducted its business only in the
ordinary course and there has not been (i) any change, circumstance or
event which has had, or would reasonably be expected to have, a
Material Adverse Effect on LiQ or (ii) any action taken by LiQ during
the period from January 31, 2000 through the date of this Agreement
that, if taken during the period from the date of this Agreement
through the Effective Time, would constitute a breach of Section 4.1.
(i) INTELLECTUAL PROPERTY. Except as would not reasonably be
expected to have a Material Adverse Effect on LiQ, (a) LiQ owns, or is
licensed to use (in each case, free and clear of any pledges, claims,
liens, charges, encumbrances and security interests of any kind or
nature whatsoever (collectively "LIENS")), all Intellectual Property
used in or necessary for the conduct of its business as currently
conducted; (b) the use of any Intellectual Property by LiQ does not
knowingly infringe on or otherwise violate the rights of any Person and
is in accordance with any applicable license pursuant to which LiQ
acquired the right to use any Intellectual Property; (c) to the
Knowledge of LiQ, no Person is challenging, infringing on or otherwise
violating any right of LiQ with respect to any Intellectual Property
owned by and/or licensed to LiQ; and (d) LiQ has not received any
written notice of any pending claim with respect to any Intellectual
Property used by LiQ and to its Knowledge no Intellectual Property
owned and/or licensed by LiQ is being used or enforced in a manner that
would result in the abandonment, cancellation or unenforceability of
such Intellectual Property.
For purposes of this Agreement, "INTELLECTUAL PROPERTY" shall
mean trademarks, service marks, brand names, certification marks, trade
dress and other indications of origin, the goodwill associated with the
foregoing and registrations in any jurisdiction of, and applications in
any jurisdiction to register, the foregoing, including any extension,
modification or renewal of any such registration or application;
inventions, discoveries and ideas, whether patentable or not, in any
jurisdiction; patents, applications for patents (including, without
limitation, divisions, continuations, continuations in part and renewal
applications), and any renewals, extensions or reissues thereof, in any
jurisdiction; nonpublic information, trade secrets and confidential
information and rights in any jurisdiction to limit the use or
disclosure thereof by any person; writings and other works, whether
copyrightable or not, in any jurisdiction; registrations or
applications for registration of copyrights in any jurisdiction, and
any renewals or extensions thereof; any similar intellectual property
or proprietary rights; and any claims or causes of action arising out
of or relating to any infringement or misappropriation of any of the
foregoing.
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(j) BROKERS OR FINDERS. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any
broker's or finder's fee or any other similar commission or fee in
connection with any of the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of LiQ, except for fees
payable to Bruckerman & Xxxxxxx.
(k) TAXES. LiQ (i) has prepared in good faith and duly and
timely filed (taking into account any extension of time within which to
file) all material Tax Returns (as defined below) required to be filed
by it and all such filed Tax Returns are complete and accurate in all
material respects; (ii) has paid all Taxes that are shown as due and
payable on such filed Tax Returns or that LiQ is obligated to pay
without the filing of a Tax Return; (iii) has paid all other charges,
claims and assessments received to date in respect of Taxes other than
those being contested in good faith for which provision has been made
in accordance with GAAP on the balance sheet included in the Financial
Statements; (iv) has properly accrued on the balance sheet, in
accordance with GAAP, all material contingent or deferred Taxes that
have not become due; (v) has withheld from amounts owing to any
employee, creditor or other Person all material Taxes required by law
to be withheld and has paid over to the proper governmental authority
in a timely manner all such withheld amounts to the extent due and
payable; (vi) as of the date hereof, has neither extended nor waived
any applicable statute of limitations with respect to United States
federal or state income or franchise Taxes and has not otherwise agreed
to any extension of time with respect to a United States federal or
state income or franchise Tax assessment or deficiency; (vii) has never
been a member of any consolidated group for income tax purposes; and
(viii) is not a party to any tax sharing agreement or arrangement. As
of the date hereof, there are not pending or threatened in writing any
audits, examinations, investigations, litigation, or other proceedings
in respect of Taxes of LiQ. There are not any unresolved questions or
claims concerning LiQ's Tax liability that are reasonably likely to
have a Material Adverse Effect on LiQ. No liens for Taxes exist with
respect to any of the assets or properties of LiQ, except for statutory
liens for Taxes not yet due or payable or that are being contested in
good faith. There is no contract or agreement, plan or arrangement by
LiQ covering any person that, individually or collectively, could give
rise to the payment of any amount that would not be deductible by LiQ
by reason of Section 280G of the Code or would constitute compensation
in excess of the limitation set forth in Section 162(m) of the Code.
LiQ has net operating loss carryforwards ("NOLs") in the amount of
$1,125,314. None of the NOLs are subject to limitation on use.
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(l) CERTAIN CONTRACTS. As of the date hereof, except for
commitments under the Stock Commitment Agreements, LiQ is not a party
to or bound by (i) any "material contract" (as such term is defined in
Item 601(b)(10) of Regulation S-K of the SEC), (ii) any non-competition
agreement or any other agreement or arrangement that limits or
otherwise restricts LiQ or any of its affiliates or any successor
thereto (including the Surviving Corporation) from engaging or
competing in any line of business or in any geographic area after
giving effect to the Merger, (iii) any employment, consulting or
severance arrangement or (iv) any contract where payments or rights are
accelerated upon a "change in control".
(m) EMPLOYEE BENEFIT PLANS. The LiQ 2000 Stock Option Plan
(the "STOCK OPTION PLAN") is the only "employee benefit plan" (within
the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), (including without limitation
multiemployer plans within the meaning of ERISA Section 3(37)), stock
purchase, stock option, severance, change-in-control, fringe benefit,
collective bargaining, bonus, incentive, deferred compensation or other
employee benefit plan, agreement, program, policy or other arrangement,
whether or not subject to ERISA, whether formal or informal, oral or
written, legally binding or not under which any employee or former
employee of LiQ has any present or future right to benefits or under
which LiQ has any present or future liability. No options have been
granted under the Stock Option Plan.
(n) LABOR MATTERS. (i) LiQ is not a party to, or bound by, any
collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization; (ii) LiQ is not
the subject of any proceeding asserting that it has committed an unfair
labor practice or sex, age, race or other discrimination or seeking to
compel it to bargain with any labor organization as to wages or
conditions of employment; (iii) there is no strike, work stoppage or
other similar labor dispute involving it pending or, to its Knowledge,
threatened; (iv) no grievance, complaint or investigation is pending
or, to the Knowledge of LiQ, threatened, against LiQ which,
individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect with respect to LiQ; (v) LiQ is in compliance
with all applicable laws (domestic and foreign), agreements, contracts,
and policies relating to employment, employment practices, wages,
hours, and terms and conditions of employment except for failures so to
comply, if any, that individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect with respect
to LiQ; (vi) LiQ has complied in all material respects with its payment
obligations to all employees of LiQ in respect of all wages, salaries,
commissions, bonuses, benefits and other compensation due and payable
to such employees under any LiQ policy, practice, agreement, plan,
program or any statute or other law; (vii) LiQ is not liable for any
severance pay or other payments to any employee or former employee
arising from the termination of employment under any benefit or
severance policy, practice, agreement, plan, or program of LiQ, nor to
the Knowledge of LiQ will LiQ have any liability which exists or
arises, or may be deemed to exist or arise, under any applicable law or
otherwise, as a result of or in connection with the transactions
contemplated hereunder or as a result of the termination by LiQ of any
persons employed by LiQ on or prior to the Effective Time of the
Merger; and (viii) LiQ is in compliance with its obligations pursuant
to the Worker Adjustment and Retraining Notification Act of 1988
("WARN") and part 6 and 7 of Title I of ERISA, to the extent
applicable, and all other employee notification and bargaining
obligations arising under any collective bargaining agreement or
statute.
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(o) AFFILIATE TRANSACTIONS. There are no material contracts,
commitments, agreements, arrangements or other transactions between
LiQ, on the one hand, and any (i) officer or director of LiQ, (ii)
record or beneficial owner of five percent or more of the voting
securities of LiQ or (iii) affiliate (as such term is defined in
Regulation 12b-2 promulgated under the Exchange Act) of any such
officer, director or beneficial owner, on the other hand.
(p) MATERIAL CONTRACT DEFAULTS. (i) LiQ has provided or made
available to Envision copies, and has provided a true and correct list
to Envision, of all material contracts, agreements, commitments,
arrangements, leases, policies or other instruments to which it is a
party or by which it is bound ("MATERIAL CONTRACTS"). LiQ is not, and
has not received any notice or has any Knowledge that any other party
is, and to its knowledge no other party is, in default in any respect
under any such Material Contract, except for those defaults which could
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on LiQ (including but not limited to the
disputed default set forth on Section 3.2(p) of the LiQ Disclosure
Schedule); and there has not occurred any event that with the lapse of
time or the giving of notice or both would constitute such a material
default.
(ii) LiQ has made available to Envision (x) true and correct
copies of all loan or credit agreements, notes, bonds, mortgages,
indentures and other agreements and instruments pursuant to which any
indebtedness of LiQ is outstanding or may be incurred and (y) accurate
information regarding the respective principal amounts currently
outstanding thereunder.
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(q) TITLE TO PROPERTY; ENCUMBRANCES. LiQ (i) has good, valid
and marketable title to all the properties and assets (A) reflected in
the balance sheet included in the Financial Statements as being owned
by LiQ (other than any such properties or assets sold or disposed of
since such date in the ordinary course of business consistent with past
practice) or (B) acquired after the date of the balance sheet included
in the Financial Statements which are material to LiQ's business on a
consolidated basis, free and clear of all Liens, except statutory Liens
securing payments not yet due and such Liens as do not materially
affect the use of the properties or assets subject thereto or affected
thereby or otherwise materially impair business operations at such
properties and (ii) is the lessee of all leasehold estates (x)
reflected in the Financial Statements or (y) acquired after the date of
the balance sheet included in the Financial Statements which are
material to its business on a consolidated basis (except for leases
that have expired by their terms since the date thereof) and is in
possession of the properties purported to be leased thereunder, and
each such lease is in full force and effect and constitutes a legal,
valid and binding obligation of, and is legally enforceable against,
the respective parties thereto (except as affected by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair
dealing), and there is no default thereunder by the lessee or, to LiQ's
Knowledge, as of the date hereof, the lessor that, individually or in
the aggregate, could reasonably be expected to have a Material Adverse
Effect on LiQ. LiQ has not received written notice and does not
otherwise have Knowledge of any pending, threatened or contemplated
condemnation proceeding affecting any premises owned or leased by LiQ
or any part thereof or of any sale or other disposition of any such
owned or leased premises or any part thereof in lieu of condemnation.
(r) INSURANCE. LiQ has provided Envision with true, correct
and complete copies of all policies of insurance to which LiQ is a
party or is a beneficiary or named insured. A list of such policies is
attached as Section 3.2(r) of the LiQ Disclosure Schedule. LiQ has in
full force and effect, with all premiums due thereon paid, such
policies of insurance. LiQ has received no notices of cancellation,
termination or non-renewal with respect to such policies and has not
been refused any insurances, nor has its coverage been limited, by any
insurance carrier. All the insurable properties of LiQ are insured in
amounts and coverages and against risks and losses as disclosed in
Section 3.2(r) of the LiQ Disclosure Schedule. There have been no
claims asserted under any of the insurance policies of LiQ for the
period from LiQ's inception to the date of this Agreement.
III.3 REPRESENTATIONS AND WARRANTIES OF ENVISION AND MERGER
SUB. Envision and Merger Sub represent and warrant to LiQ and the Principal
Stockholder as follows:
(a) ORGANIZATION. Merger Sub is a corporation duly
incorporated, validly existing and in good standing under the laws of
Delaware and Merger Sub is a direct wholly-owned subsidiary of
Envision.
(b) CORPORATE AUTHORIZATION. Merger Sub has all requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution,
delivery and performance by Merger Sub of this Agreement and the
consummation by Merger Sub of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of
Merger Sub. This Agreement has been duly executed and delivered by
Merger Sub and constitutes a valid and binding agreement of Merger Sub,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or
affecting creditors generally or by general equity principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law) or by an implied covenant of good faith
and fair dealing.
(c) NON-CONTRAVENTION. The execution, delivery and
performance by Merger Sub of this Agreement and the consummation by
Merger Sub of the transactions contemplated hereby do not and will not
contravene or conflict with the certificate of incorporation or by-laws
of Merger Sub.
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(d) NO BUSINESS ACTIVITIES. Merger Sub has not conducted any
activities other than in connection with the organization of Merger
Sub, the negotiation and execution of this Agreement and the
consummation of the transactions contemplated hereby. Merger Sub has no
Subsidiaries.
III.4 REPRESENTATIONS AND WARRANTIES OF THE PRINCIPAL
STOCKHOLDER. The Principal Stockholder represents and warrants to Envision as
follows:
(a) OWNERSHIP OF SHARES. The number of shares of LiQ Common
Stock owned by the Principal Stockholder is correctly represented in
Section 3.2(b) of the LiQ Disclosure Schedule, and the Principal
Stockholder is the beneficial owner of the number of shares set forth
opposite his name in Section 3.2(b) of the LiQ Disclosure Schedule.
(b) ENVISION SEC REPORTS. The Principal Stockholder has
received and read or reviewed and is familiar with the Envision SEC
Reports.
(c) INQUIRY. The Principal Stockholder has had an opportunity
to ask questions of and receive answers from Envision, or a person or
persons acting on Envision's behalf, concerning the terms and
conditions of the Envision Common Stock.
(d) UNREGISTERED SHARES. The Principal Stockholder understands
that (i) none of the shares of Envision Common Stock to be issued
pursuant to the Merger have been registered under the Securities Act or
under the securities laws of any state or other jurisdiction in
reliance upon exemptions for private offerings and (ii) except as set
forth herein, Envision has no obligation to register the shares of
Envision Common Stock to be issued pursuant to the Merger.
(e) NO DISTRIBUTION. The shares of Envision Common Stock to be
acquired by the Principal Stockholder pursuant to the Merger are being
acquired solely for the Principal Stockholder's own account, for
investment and not with a view to or for the resale, distribution,
subdivision, or fractionalization thereof; the Principal Stockholder
has no current plans to enter into any contract, undertaking, agreement
or arrangement relating thereto.
(f) LIMITED OPPORTUNITY FOR RESALE. The Principal Stockholder
acknowledges and is aware that there are substantial restrictions on
the transferability of the shares of Envision Common Stock to be issued
pursuant to the Merger; that the shares of Envision Common Stock to be
issued pursuant to the Merger cannot be resold unless such shares are
registered under the Securities Act and any applicable securities law
of any state or other jurisdiction, or an exemption from registration
is available; except as set forth herein, the Principal Stockholder has
no rights to require that such shares be registered under the
Securities Act; and unless such shares are so registered or an
exemption therefrom is available to the Stockholders, there will be no
public market for the shares of Envision Common Stock to be issued
pursuant to this Agreement.
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(g) INVESTMENT EXPERIENCE. The Principal Stockholder has such
knowledge and experience in financial and business matters that he is
capable of evaluating the relative risks and merits of the shares of
Envision Common Stock to be issued pursuant to the Merger.
(h) STATE OF RESIDENCE. The Principal Stockholder is a
resident of the State of New York.
(i) AFFILIATES. The Principal Stockholder has been advised
that, in addition to other restrictions on the transfers of the shares
of Envision Common Stock to be issued pursuant to the Merger, since he
may be an "affiliate" of Envision at the Closing and the distribution
of such shares by the Stockholders has not been registered under the
Securities Act, Rules 144 and 145 under the Securities Act will
restrict the Principal Stockholder's sales of shares of Envision Common
Stock received in the transaction. The Principal Stockholder
acknowledges that the shares of Envision Common Stock to be received by
him pursuant to the Merger shall be subject to stop transfer
instructions and may be legended to reflect the restrictions on
transfer imposed by the Securities Act.
(j) POTENTIAL FOR LOSS OF ENTIRE INVESTMENT. The Principal
Stockholder understands that he could lose the entire value of his
investment in Envision Common Stock and he can bear the risk of loss of
that investment.
(k) CONSENT TO MERGER. The Principal Stockholder has executed
a written consent approving this Agreement and the transactions
contemplated hereby, which consent is attached as Exhibit 3.4(k)
hereto.
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ARTICLE IV
COVENANTS AND AGREEMENTS
IV.1 CONDUCT OF BUSINESS OF LIQ PENDING THE MERGER. LiQ
covenants and agrees that, during the period from the date hereof to the
Effective Time, unless Envision shall otherwise agree in writing in advance, the
business of LiQ shall be conducted only in, and LiQ shall not take any action
except in, the ordinary course of business and in a manner consistent with past
practice and in compliance with applicable laws; and LiQ shall each use its
reasonable best efforts to preserve substantially intact the business
organization of LiQ, to keep available the services of the present officers,
employees and consultants of LiQ and to preserve the present relationships of
LiQ with customers, suppliers, licensors, licensees, advertisers, distributors
and other persons with which LiQ has significant business relations, PROVIDED
that the hiring by LiQ of up to 15 additional employees, on terms consistent
with past practice (except that no such new employee shall be granted any rights
to Committed Stock or other rights to receive any shares of capital stock of any
class, or any options, warrants, convertible securities or other rights of any
kind to acquire any shares of capital stock, or any other ownership interest
(including but not limited to stock appreciation rights or phantom stock), of
LiQ) shall be considered to be within the ordinary course of business. By way of
amplification and not limitation, LiQ shall not, between the date of this
Agreement and the Effective Time, directly or indirectly do, or propose or
commit to do, any of the following without the prior written consent of
Envision:
(a) Amend its Certificate of Incorporation or By-Laws or
equivalent organizational documents;
(b) Issue, deliver, sell, pledge, dispose of or encumber, or
authorize or commit to the issuance, sale, pledge, disposition or
encumbrance of, (A) any shares of capital stock of any class, or any
options, warrants, convertible securities or other rights of any kind
to acquire any shares of capital stock, or any other ownership interest
(including but not limited to stock appreciation rights or phantom
stock), of LiQ or (B) any assets of LiQ;
(c) Declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock;
(d) Reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock;
(e) (i) Acquire (by merger, consolidation or acquisition of
stock or assets) any corporation, partnership or other business
organization or division thereof or (except for the purchase of
inventory in the ordinary course of business) any assets; (ii) sell,
transfer, license, lease, mortgage, pledge, encumber or otherwise
dispose of or subject to any Lien any of its assets, except for the
sale of goods in the ordinary course of business; (iii incur any
indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse, or otherwise as an accommodation become
responsible for, the obligations of any person, or make any loans,
advances or capital contributions to, or investments in, any other
person; (iv) enter into any material contract or agreement other than
in the ordinary course of business consistent with past practice or
enter into, or amend or terminate any joint venture arrangements; (v)
enter into any agreement as licensee or licensor, (vi) enter into any
commitments or transactions material, individually or in the aggregate,
to LiQ; (vii) authorize any single capital expenditure for LiQ other
than expenditures for hardware/software reflected in the six month
operating cost projection through September 30, 2000, a copy of which
has been delivered to Envision; or (viii) enter into or amend any
contract, agreement, commitment or arrangement with respect to any of
the matters set forth in this Section 4.1(e);
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(f) Except to the extent required under existing employee and
director benefit plans, agreements or arrangements as in effect on the
date of this Agreement, increase the compensation or fringe benefits of
any of its directors, officers or employees, except for increases in
salary or wages of employees of LiQ in the ordinary course of business
in accordance with past practice or grant any severance or termination
pay not currently required to be paid under existing severance plans or
enter into, or amend, any employment, consulting or severance agreement
or arrangement with any present or former director, officer or other
employee of LiQ, or establish, adopt, enter into or amend or terminate
any collective bargaining, bonus, profit sharing, thrift, compensation,
stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, welfare, severance or other
plan, agreement, trust, fund, policy or arrangement for the benefit of
any directors, officers or employees;
(g) Except as may be required as a result of a change in law
or in generally accepted accounting principles, change any of the
accounting practices or principles used by it;
(h) Take any action that (without regard to any action taken
or agreed to be taken by Envision or any of its affiliates) would
prevent the Merger from qualifying as a reorganization within the
meaning of Section 368(a) of the Code;
(i) Make any Tax election or settle or compromise any material
federal, state, local or foreign Tax liability, change any annual tax
accounting period, change any method of Tax accounting, enter into any
closing agreement relating to any Tax, surrender any right to claim a
Tax refund, or consent to any extension or waiver of the limitations
period applicable to any Tax claim or assessment;
(j) Settle or compromise any pending or threatened suit,
action or claim which is material or which relates to the transactions
contemplated hereby;
(k) Adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or
other reorganization of LiQ (other than the Merger);
(l) Pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the
ordinary course of business and consistent with past practice of
liabilities reflected or reserved against in the financial statements
of LiQ or incurred in the ordinary course of business and consistent
with past practice;
(m) Effectuate a "plant closing" or "mass layoff", as those
terms are defined in WARN, affecting in whole or in part any site of
employment, facility, operating unit or employee of LiQ;
(n) Fail to maintain in full force and effect the existing
insurance policies covering LiQ and its properties, assets and
businesses;
(o) Waive any rights under any confidentiality agreements
entered into with third parties; or
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(p) Take, or offer or propose to take, or agree to take in
writing or otherwise, any of the actions described in Sections 4.1(a)
through 4.1(o) or any action which would make any of the
representations or warranties of LiQ contained in this Agreement untrue
and incorrect as of the date when made if such action had then been
taken or would result in any of the conditions set forth in Article V
not being satisfied.
IV.2 ACCESS TO INFORMATION. Upon reasonable notice, each party
shall (and shall cause its Subsidiaries to) afford to the officers, employees,
attorneys, agents, investment bankers, actuaries, accountants and other
representatives of the other party free and full access, during the period prior
to the Effective Time, to all its offices, properties, books, records, officers
and employees, will permit such persons to make extracts from and copies of such
books and records, and will from time to time furnish the other party with such
additional financial and operating data and other information as to its
financial condition, results of operations, businesses, properties, assets,
liabilities or future prospects as such other party may from time to time
request; provided that access to LiQ's proprietary information, including
programming information, technical planning, system architecture and other
related information shall be granted only on the premises of LiQ and shall be
limited to Xxxx Xxxxxxxxxxx and Xxxxxx Xxxxxxx, as representatives of Envision.
Each of LiQ and Envision shall cause its accountants to make available to the
other party or its attorneys or accountants the work papers relating to any
audit of the financial statements of LiQ or Envision, as applicable, during the
most recent five fiscal years. The parties will hold any such information which
is non-public in confidence to the extent required by, and in accordance with,
paragraph 5 of the letter agreement, dated March 29, 2000, between LiQ and
Envision (such provisions, the "CONFIDENTIALITY PROVISIONS"). Any investigation
by Envision or LiQ shall not affect the representations and warranties of LiQ or
Envision, as the case may be.
IV.3 REASONABLE BEST EFFORTS. (a) Subject to the terms and
conditions of this Agreement, each party will use its reasonable best efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate the Merger and the other transactions contemplated by this Agreement
as soon as practicable after the date hereof, including (i) preparing and filing
as promptly as practicable all documentation to effect all necessary
applications, notices, petitions, filings, tax ruling requests and other
documents and to obtain as promptly as practicable all consents, waivers,
licenses, orders, registrations, approvals, permits, tax rulings and
authorizations necessary or advisable to be obtained from any third party and/or
any Governmental Entity in order to consummate the Merger or any of the other
transactions contemplated by this Agreement and (ii) taking all reasonable steps
as may be necessary to obtain all such Necessary Consents.
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IV.4 EMPLOYMENT OFFERS; EMPLOYEE BENEFITS. Envision shall make
offers of employment to each employee of LiQ (the "LIQ EMPLOYEES") or shall
retain each LiQ Employee as an employee of the Surviving Corporation. Unless
otherwise stated, employment of LiQ Employees by Envision following the Closing
shall be on an at-will basis in positions comparable with those at LiQ, and, for
at least six months following the Closing Date, shall be at a salary and benefit
level equal to or greater than the salary and benefit level provided by LiQ to
each such LiQ Employee. Nothing herein shall prohibit any changes to the Benefit
Plans (as defined in Section 8.10) of Envision that may be (i) required by law
(including, without limitation, any applicable qualification requirements of
Section 401(a) of the Code), (ii) necessary as a technical matter to reflect the
transactions contemplated hereby or (iii) required for LiQ to provide or permit
investment in its securities. Furthermore, nothing herein shall require the
Surviving Corporation to continue any particular Benefit Plan or prevent the
amendment or termination thereof (subject to the maintenance, in the aggregate,
of the benefits as provided in the preceding sentence).
IV.5 NOTIFICATION OF CERTAIN MATTERS. (a) LiQ shall give
prompt notice to Envision, and Envision shall give prompt notice to LiQ, of (i)
the occurrence or non-occurrence of any event the occurrence or non-occurrence
of which would be likely to cause any representation or warranty contained in
this Agreement to be untrue or inaccurate and (ii) any failure of LiQ, Envision
or Merger Sub, as the case may be, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that the delivery of any notice pursuant to this Section 4.5
shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
IV.6 PUBLIC ANNOUNCEMENTS. Except as required by applicable
law, neither Envision nor LiQ shall, or shall permit any affiliate to, make any
public announcement in respect of the terms or existence of this Agreement, any
other document required to be executed in order to consummate the transactions
contemplated hereby, any termination of negotiations relating to the
transactions contemplated hereby, or the transactions contemplated hereby,
without the prior written consent of the other party. LiQ and Envision agree
that the initial press release or releases to be issued with respect to the
transactions contemplated by this Agreement shall be in compliance with
applicable law and mutually agreed upon prior to the issuance thereof.
IV.7 LISTING OF SHARES OF ENVISION COMMON STOCK. Envision
shall use its reasonable best efforts to cause the shares of Envision Common
Stock to be issued in the Merger to be approved for listing on the AMEX, subject
to official notice of issuance, as soon as reasonably practicable following the
Closing Date.
IV.8 STOCKHOLDER BOARD NOMINEES. Envision shall use its
reasonable best efforts to cause the election of Xxxxx Xxxx to its Board of
Directors prior to or contemporaneously with the Closing, effective at the
Effective Time, and to nominate Xxxxx Xxxx for election to serve as a director
of Envision at the Annual Meeting of Stockholders (or at any special meetings of
stockholders held in lieu thereof) to be held in 2000 for a term expiring not
sooner than the 2003 Annual Meeting of Stockholders. Envision covenants and
agrees to elect Xxxxx Xxxx to the Board of Directors of the Surviving
Corporation prior to or contemporaneously with the Closing, effective at the
Effective Time.
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IV.9 TRANSFERS BY STOCKHOLDERS. Each Stockholder covenants and
agrees that such Stockholder: (a) from the date of this Agreement until the
earlier to occur of (i) the Closing and (ii) the termination of this Agreement
pursuant to Article VII, shall not, and shall not enter into any agreement to,
transfer, sell, assign, pledge, hypothecate or otherwise dispose, whether
directly or indirectly pursuant to the creation of a derivative security, the
grant of an option or other right, the imposition of a restriction on
disposition or voting with the exception of any transfer which occurs by
operation of law ("TRANSFER"), any shares of LiQ Common Stock or any security
exercisable or convertible into such LiQ Common Stock or any interest in any of
the foregoing held by such Stockholder; (b) until the date which is one year
from the Closing Date, shall not, and shall not enter into any agreement to,
Transfer any shares of Envision Common Stock or any security exercisable or
convertible into such Envision Common Stock or any interest in any of the
foregoing held by such Stockholder; and (c) shall not Transfer any shares, or
any interest therein, of Envision Common Stock received pursuant to the Merger,
unless (i) such Transfer is made pursuant to an effective registration statement
under the Securities Act and has been registered under all applicable state
securities or "blue sky" laws or (ii) such Stockholder shall have furnished
Envision with a written legal opinion in form and substance reasonably
satisfactory to Envision and its counsel to the effect that no such registration
is required because of the availability of an exemption from registration under
the Securities Act and all applicable state securities or "blue sky" laws.
IV.10 RIGHT OF STOCKHOLDERS TO PURCHASE ADDITIONAL SHARES. If,
at any time from the date of this Agreement until the Closing Date, Envision
issues (i) additional shares of Envision Common Stock, other than the issuance
of up to 320,500 shares of Envision Common Stock to Sundog Technologies, Inc.
and Rockmountain Ventures Fund, LP, pursuant to a prior agreement of Envision to
issue such shares, or (ii) additional options, warrants or other rights, other
than those issued in the ordinary course, to acquire shares of Envision Common
Stock (each such issuance, a "NEW ISSUANCE"), Envision shall promptly give
written notice to LiQ, and LiQ shall deliver such notice to the Stockholders.
Such notice shall state the number of shares issued pursuant to such New
Issuance and the price per share. With ten days of the receipt of such notice by
LiQ, each Stockholder shall have the right to subscribe for, upon the same terms
as set forth in the applicable notice, the number of shares of Envision Common
Stock sufficient for each Stockholder to maintain his or her Adjusted Envision
Percentage (such shares, the "SUBSCRIBED SHARES"). With respect to any
Stockholder, the "ADJUSTED ENVISION PERCENTAGE" shall mean the lower of such
Stockholder's Envision Percentage as set forth opposite his or her name on
Exhibit 1 or such Stockholder's actual percentage ownership of Envision Common
Stock (assuming closing of the transactions contemplated by this Agreement), on
a fully diluted basis, as of the time of such New Issuance. Any Stockholder
electing to subscribe for shares shall deposit the purchase price for such
Subscribed Shares with an escrow agent to be appointed by Envision (the "ESCROW
AGENT"), and Envision shall deposit the certificates representing such
Subscribed Shares with the Escrow Agent. At the Closing, the Escrow Agent shall
deliver: (i) to Envision, the aggregate funds deposited with the Escrow Agent
pursuant to this Section 4.10 and (ii) to each Stockholder, the certificates
representing such Stockholder's Subscribed Shares. In the event that this
Agreement is terminated prior to Closing, the Stockholders shall have no rights
under this Section 4.10 other than the prompt return of all funds deposited with
the Escrow Agent.
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IV.11 REGISTRATION RIGHTS. (a) "PIGGYBACK" REGISTRATION. (i)
If Envision proposes to register shares of Envision Common Stock for sale
pursuant to a Public Offering (as defined below), Envision shall give the
Stockholders written notice (at least 7 business days prior to the proposed
filing date of the registration statement relating to such Public Offering) of
its intention to make such Public Offering, provided that no such notice need be
given, and the Stockholders shall have no rights under this Section 4.11(a),
with respect to the first Public Offering made by Envision after the date of
this Agreement. Each Stockholder may send a written request (within 15 calendar
days of the receipt of such notice) to Envision that some or all of the shares
of Registrable Securities (as defined below) owned by such Stockholder be
registered and sold as part of such Public Offering. Thereafter, Envision shall
use its reasonable best efforts to effect the registration under the Securities
Act of the offering of the Registrable Securities that the Stockholders have
requested to be registered, subject to the terms of this Section 4.11 and
PROVIDED that Envision shall have the right to terminate or withdraw any
registration initiated by it under this Section 4.11(a) prior to the
effectiveness of such registration whether or not any Stockholder has elected to
include Registrable Securities in such registration.
"PUBLIC OFFERING" means the sale of securities to the public
pursuant to an effective registration statement (other than a registration
statement on Form S-4 or S-8 or any similar or successor form) filed under the
Securities Act.
"REGISTRABLE SECURITIES" means all shares of Envision Common
Stock owned by any Stockholder, not previously sold to the public, including
Envision Common Stock issued pursuant to stock splits, stock dividends and
similar distributions, PROVIDED, HOWEVER, that any shares of Envision Common
Stock shall no longer be treated as Registrable Securities if all such shares of
Envision Common Stock may be sold under Rule 144 of the Securities Act within a
three month period.
(b) DEMAND REGISTRATION. (i) If, as of January 29, 2001, all
of the Registrable Securities of the Stockholders shall not have been registered
pursuant to Section 4.11(a), Envision shall, upon the written request, received
within 15 business days of such date, of the holders of at least 50% of the
Registrable Securities which remain unregistered, file one registration
statement to register the Registrable Securities which remain unregistered,
PROVIDED that Envision shall not be required to make such filing:
(A) Prior to the date that is 181 days after a Public Offering
occurring after the date hereof; or
(B) If Envision shall deliver to the Stockholders a
certificate signed by the President or Chief Executive Officer of
Envision stating that in the good faith judgment of Envision it would
be detrimental to Envision or its stockholders for a registration
statement to be filed in the near future, then Envision's obligation to
take any action under this Section 4.11(b) shall be deferred for a
period not to exceed 90 days from the date of receipt of the written
request specified in this Section 4.11(b); PROVIDED, HOWEVER, that
Envision shall not exercise such right more than once in any 12-month
period.
(ii) Envision's obligations pursuant to this Section 4.11(b)
shall be fulfilled upon the effectiveness of a registration requested
pursuant to this Section 4.11(b).
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(c) UNDERWRITING. (i) GENERAL. If any Public Offering involves
an underwriting of the shares of Envision Common Stock to be sold pursuant to
such Public Offering, the right of any Stockholder to register any Registrable
Securities shall be conditioned upon such underwriting and such Stockholder's
entering into of an underwriting agreement with the underwriters for such
offering including customary provisions indemnifying the underwriters, Envision
and the other selling stockholders. If any registration under this Section 4.11
does not involve a standard underwriting agreement entered into by all
Stockholders registering Registrable Securities pursuant to such registration,
(A) the right of any Stockholder to register any Registrable Securities shall be
conditioned on such Stockholder's agreeing to indemnify Envision and the other
participating Stockholders for any material misstatements or omissions relating
to such Stockholder and (B) Envision will agree to indemnify the Stockholders
participating in such registration for any material misstatements or omissions,
other than any material misstatement or omission which occurs in reliance upon
and in conformity with written information furnished for use in connection with
such registration by any participating Stockholder.
(ii) PIGGYBACK REGISTRATION. The Stockholders shall have no
right to participate in the selection of the underwriters, if any, for
a Public Offering in which Stockholders participate pursuant to Section
4.11(a) (an "ENVISION OFFERING"). If the underwriters for an Envision
Offering advise the Stockholders seeking registration of Registrable
Securities pursuant to such offering in writing that market factors
(including, without limitation, the aggregate number of shares of
Envision Common Stock requested to be registered, the general condition
of the market, and the status of the persons proposing to sell
securities in such Envision Offering) require a limitation of the
number of shares to be underwritten, the underwriters (subject to the
allocation priority set forth in the following sentence) may exclude
some or all Registrable Securities from such registration and
underwriting. If the underwriters for an Envision Offering so limit the
number of shares to be included in a registration, the number of shares
to be included in such registration shall be allocated in the following
manner: (i) first, to Envision, and (ii) second, pro rata to the
Stockholders seeking to register Registrable Securities and other
holders of shares with "piggyback" registration rights in proportion,
as nearly as practicable, to the respective amounts of shares entitled
to inclusion in such registration held by such holders at the time of
filing the registration statement. No Registrable Securities or other
securities excluded from the underwriting by reason of this Section
4.11(c)(ii) shall be included in the registration statement for such
Envision Offering.
(iii) DEMAND OFFERING. Envision shall select the underwriters,
if any, for a Public Offering in which Stockholders participate
pursuant to Section 4.11(b), PROVIDED that such underwriters shall be
reasonably satisfactory to the participating Stockholders.
(d) EXPENSES. Envision shall bear the costs and expenses of
registrations pursuant to this Section 4.11, including the fees and expenses of
Envision's counsel, other than underwriting discounts, selling commissions and
stock transfer taxes, which shall be paid by the holders of the Registrable
Securities registered pro rata on the basis of the number of shares registered.
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(e) TERMINATION OF REGISTRATION RIGHTS. The registration
rights granted pursuant to this Section 4.11 will terminated as to any
Stockholder at such time as such Stockholder is eligible to sell all of such
Stockholder's Registrable Securities under Rule 144 of the Securities Act within
any three-month period without volume limitations, or under Rule 144(k)
thereunder.
(f) TRANSFER RESTRICTIONS REMAIN EFFECTIVE. The rights of the
Stockholders pursuant to this Section 4.11 do not affect the transfer
restrictions set forth in Section 4.9 and in the Stockholders' Letters (as
defined in Section 5.2(f)).
(g) FILINGS; INFORMATION. In connection with any registration
pursuant to this Section 4.11 in which Stockholders are registering Registrable
Securities, Envision shall:
(i) furnish to participating Stockholders such number of
copies of each registration statement filed pursuant to such
registration, each amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by reference
therein) and the prospectus included in such registration statement
(including any preliminary prospectus) as such Stockholders may
reasonably request in order to facilitate the sale of the Registrable
Securities owned by them that are included in such registration, which
sale shall be in accordance with the terms of this Agreement and the
Stockholders' Letters;
(ii) after the filing of a registration statement, (A)
promptly notify participating Stockholders of any stop order issued or
threatened to be issued by the Securities and Exchange Commission and
(B) take all reasonable actions required to prevent the entry of such
stop order or remove it if entered;
(iii) use reasonable efforts to qualify the Registrable
Securities included in such registration for offer and sale under such
other securities or "blue sky" laws of such jurisdictions in the United
States as shall be reasonably requested by the participating
Stockholders; PROVIDED, HOWEVER, that Envision shall not be required to
(i) qualify generally to do business in any jurisdiction where it would
not otherwise be required to qualify but for this Section 4.11(g), (ii)
subject itself to taxation in any such jurisdiction or (iii) consent to
general service of process in any such jurisdiction;
(iv) promptly notify participating Stockholders, at any time
when a prospectus relating to the sale of Registrable Securities is
required to be delivered under the Securities Act, of the occurrence of
any event as a result of which such prospectus includes an untrue
statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, and, as
promptly as reasonably practicable following such occurrence, prepare
and file any amendment or supplement to the applicable registration
statement as may be necessary to comply with the provisions of the
Securities Act;
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(v) enter into customary agreements (including, if such
registration involves an underwriting, an underwriting agreement in
customary form) and take such other actions as are reasonably required
in order to expedite or facilitate the sale of such Registrable
Securities, which sale shall be in accordance with the terms of this
Agreement and the Stockholders' Letters;
(vi) furnish to the Principal Stockholder a signed
counterpart, addressed to the Principal Stockholder, of (A) an opinion
or opinions of counsel to Envision and (B) a comfort letter or letters
from Envision's independent public accountants, each in customary form
and covering such matters of the type customarily covered by opinions
or comfort letters, as the case may be, as the Principal Stockholder
may reasonably request; and
(vii) make available for inspection by the Principal
Stockholder and any attorney, accountant or other agent retained by the
Principal Stockholder, all financial and other records and other
information, pertinent corporate documents and properties of Envision,
its Subsidiaries and Affiliates, as is reasonably necessary to enable
the Principal Stockholder and such agents to exercise their due
diligence responsibilities, PROVIDED, HOWEVER, that Envision may
require the Principal Stockholder or any such agent to sign a
confidentiality agreement reasonably satisfactory to Envision prior to
any such inspection.
(h) INFORMATION FROM PARTICIPATING STOCKHOLDERS. The right of
any Stockholder to register any Registrable Securities shall be conditioned upon
such Stockholder's providing information regarding such Stockholder, the plan of
distribution of the Registrable Securities and other information as Envision may
from time to time reasonably request or as may be legally required in connection
with such registration.
(i) RULE 144. Envision shall file any reports required to be
filed by it under the Securities Act and the Exchange Act and take such further
action as the participating Stockholders may request, to the extent required
from time to time, to enable the participating Stockholders to sell Registrable
Securities, otherwise permitted to be transferred pursuant to this Agreement and
the Stockholders' Letters, without registration under the Securities Act and
within the limitation of the exemptions provided by Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or any successor
rule adopted by the SEC. Upon the written request of any Stockholder who holds
Registrable Securities, Envision shall deliver to such Stockholder a written
statement as to its compliance with such requirements.
IV.12 AGREEMENT TO VOTE FOR APPROVAL OF ISSUANCE OF SHARES.
The Principal Stockholder agrees to vote the shares of Envision Common Stock
received by him in the Merger in favor of the issuance of up to 320,500 shares
of Envision Common Stock to Sundog Technologies, Inc. and Rockmountain Ventures
Fund, LP, pursuant to a prior agreement of Envision to issue such shares.
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ARTICLE V
CONDITIONS PRECEDENT
V.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligations of LiQ, Envision and Merger Sub to effect the
Merger are subject to the satisfaction or waiver on or prior to the Closing Date
of the following conditions:
(a) NO INJUNCTIONS OR RESTRAINTS, ILLEGALITY. No Laws shall
have been adopted or promulgated, and no temporary restraining order,
preliminary or permanent injunction or other order issued by a court or
other Governmental Entity of competent jurisdiction shall be in effect,
(i) having the effect of making the Merger illegal or otherwise
prohibiting consummation of the Merger or (ii) which otherwise would
reasonably be expected to have a Material Adverse Effect on Envision
after giving effect to the Merger; PROVIDED, HOWEVER, that the
provisions of this Section 5.1(b) shall not be available to any party
whose failure to fulfill its obligations pursuant to Section 4.3 shall
have been the cause of, or shall have resulted in, such order or
injunction.
(b) GOVERNMENTAL AND REGULATORY APPROVALS. Other than the
filing provided for under Section 1.3 and AMEX Approval, all consents,
approvals and actions of, filings with and notices to any Governmental
Entity required of Envision, any of its Subsidiaries or LiQ to
consummate the Merger, the Share Issuance and the other transactions
contemplated hereby, the failure of which to be obtained or taken would
reasonably be expected to have a Material Adverse Effect on Envision
and its Subsidiaries (including the Surviving Corporation), taken
together after giving effect to the Merger, shall have been obtained;
PROVIDED HOWEVER, that the provisions of this Section 5.1(c) shall not
be available to any party whose failure to fulfill its obligations
pursuant to Section 4.3 shall have been the cause of, or shall have
resulted in, the failure to obtain such consent or approval.
V.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF ENVISION AND
MERGER SUB. The obligations of Envision and Merger Sub to effect the Merger are
subject to the satisfaction of, or waiver by Envision, on or prior to the
Closing Date of the following conditions:
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(a) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties of LiQ and the Principal Stockholder set
forth in this Agreement that is qualified as to Material Adverse Effect
or otherwise qualified as to materiality shall be true and correct, and
each of the representations and warranties of LiQ and the Principal
Stockholder set forth in this Agreement that is not so qualified shall
be true and correct in all material respects, in each case as of the
date of this Agreement and as of the Closing Date as though made on and
as of the Closing Date (except to the extent in either case that such
representations and warranties speak as of another date), and Envision
shall have received: (i) as to the representations and warranties of
LiQ, a certificate of the chief executive officer and the chief
financial officer of LiQ to such effect, and (ii) as to the
representations and warranties of the Principal Stockholder, a
certificate of the Principal Stockholder to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF LIQ AND THE STOCKHOLDERS.
Each of LiQ and the Principal Stockholder shall have performed or
complied with all agreements and covenants required to be performed by
such party under this Agreement at or prior to the Closing Date that
are qualified as to Material Adverse Effect and shall have performed or
complied in all material respects with all other agreements and
covenants required to be performed by it under this Agreement at or
prior to the Closing Date that are not so qualified, and Envision shall
have received: (i) as to such performance or compliance by LiQ, a
certificate of the chief executive officer and the chief financial
officer of LiQ to such effect; and (ii) as to such performance or
compliance by the Principal Stockholder, a certificate of the Principal
Stockholder to such effect.
(c) NO MATERIAL ADVERSE CHANGE. At any time on or after the
date of this Agreement there shall not have occurred any material
adverse change in the business, properties, assets, condition
(financial or otherwise), prospects, or results of operations of LiQ.
(d) RELEASES. Envision shall have received (a) written
resignations of all directors of LiQ, effective as of Closing, (b)
evidence reasonably satisfactory to Envision that all agreements
between LiQ on the one hand, and the Stockholders and the directors,
officers and other affiliates of LiQ on the other hand, have been
terminated without premium or penalty to LiQ or Envision and (c)
written evidence reasonably satisfactory to Envision that all holders
of any indebtedness for borrowed money of LiQ (or beneficiary of any
guarantee made by LiQ of the indebtedness of any other person) shall
have been released and discharged, including any Lien or other
encumbrance, without premium or penalty to LiQ or Envision other than
loans to LiQ from the Principal Stockholder in the amount of $409,411
and from Xxxxxx Xxxxxx in the amount of $175,800.
(e) BOARD RESOLUTIONS. LiQ shall have delivered to Envision a
certificate of the Secretary of LiQ, dated as of the Closing Date,
certifying as to the resolutions of the Board of Directors of LiQ
authorizing and approving the execution, delivery and performance by
LiQ of this Agreement and the transactions contemplated hereby.
(f) STOCKHOLDERS' LETTERS. Each of the Stockholders shall have
executed a letter (the "STOCKHOLDERS' LETTERS") in the form attached as
Exhibit 5.2(f), which letter shall include such Stockholder's consent
to this Agreement and the transactions contemplated hereby.
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(g) TAX OPINION. Envision shall have received the written
opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel to Envision, dated the
Closing Date, to the effect that (i) the Merger will be treated for
federal income tax purposes as a reorganization within the meaning of
Section 368(a) of the Code and (ii) LiQ, Envision and Merger Sub will
each be a party to the reorganization within the meaning of Section
368(b) of the Code, a copy of which shall be provided to LiQ.
(h) XXXXXXXX CHANCE XXXXXX & XXXXX LLP OPINION. Envision shall
have received the written opinion of Xxxxxxxx Chance Xxxxxx & Xxxxx
LLP, counsel to LiQ, dated the Closing Date, substantially in the form
attached as Exhibit 5.2(h).
V.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF LIQ. The
obligations of LiQ to effect the Merger are subject to the satisfaction of, or
waiver by LiQ, on or prior to the Closing Date of the following additional
conditions:
(a) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties of Envision set forth in this Agreement
that is qualified as to Material Adverse Effect or otherwise qualified
as to materiality shall be true and correct, and each of the
representations and warranties of Envision set forth in this Agreement
that is not so qualified shall be true and correct in all material
respects, in each case as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date (except to
the extent in either case that such representations and warranties
speak as of another date), and LiQ shall have received a certificate of
the chief executive officer and the chief financial officer of Envision
to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF ENVISION. Each of Envision
and Merger Sub shall have performed or complied with all agreements and
covenants required to be performed by it under this Agreement at or
prior to the Closing Date that are qualified as to Material Adverse
Effect and shall have performed or complied in all material respects
with all other agreements and covenants required to be performed by it
under this Agreement at or prior to the Closing Date that are not so
qualified, and LiQ shall have received (i) as to such performance or
compliance by Envision, a certificate of the chief executive officer
and the chief financial officer of Envision to such effect and (ii) as
to such performance or compliance by Merger Sub, a certificate of a
director or officer of Merger Sub to such effect.
(c) NO MATERIAL ADVERSE CHANGE. At any time on or after the
date of this Agreement there shall not have occurred any material
adverse change in the business, properties, assets, condition
(financial or otherwise), prospects, or results of operations of
Envision.
(d) TAX OPINION. LiQ shall have received the written opinion
of Xxxxxxxx Chance Xxxxxx & Xxxxx LLP, counsel to LiQ, dated the
Closing Date, to the effect that (i) the Merger will be treated for
federal income tax purposes as a reorganization within the meaning of
Section 368(a) of the Code and (ii) LiQ, Envision and Merger Sub will
each be a party to the reorganization within the meaning of Section
368(b) of the Code, a copy of which shall be delivered to Envision.
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(e) BOARD RESOLUTIONS. Each of Envision and Merger Sub shall
have delivered to LiQ a certificate of an appropriate officer, dated as
of the Closing Date, certifying as to the resolutions of the Board of
Directors of Envision and Merger Sub authorizing and approving the
execution, delivery and performance by Envision and Merger Sub of this
Agreement and the transactions contemplated hereby.
(f) XXXXXXX XXXXXXX & XXXXXXXX OPINION. LiQ shall have
received the written opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, dated the
Closing Date, substantially in the form attached as Exhibit 5.3(f).
ARTICLE VI
SURVIVAL OF REPRESENTATIONS AND INDEMNIFICATION
VI.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of LiQ and the Principal Stockholder contained in
this Agreement or in any instrument delivered pursuant hereto will survive the
Closing Date and will remain in full force and effect thereafter until the first
anniversary of the Closing Date, PROVIDED that (i) the representations and
warranties set forth in Sections 3.1(c)(i), 3.1(g), 3.2(c)(i) and 3.2(j) will
survive the Closing Date and will remain in full force and effect until the
expiration of the applicable statute of limitations (after giving effect to
waiver, mitigation or extension thereof), and (ii) the representations and
warranties set forth in Section 3.2(k) (Taxes) will survive the Closing and will
remain in full force and effect until the date that is sixty (60) days following
the expiration of the applicable statute of limitations after giving effect to
waiver, mitigation or extension thereof; PROVIDED, FURTHER, that such
representations or warranties shall survive (if at all) beyond such period with
respect to any inaccuracy therein or breach thereof, written notice of which
shall have been duly given within such applicable period in accordance with
Section 7.1(e) hereof. No person shall have a right to recovery against any
party (or any officer, director, employee or agent of a party) other than
through the exercise of the indemnification rights set forth in Section 6.2,
which, to the extent permitted by law, shall constitute the sole and exclusive
remedy after the Closing Date for any breach by a party of any representation,
warranty or covenant contained herein or in any certificate or other instrument
delivered pursuant hereto, other than a fraudulent or intentional breach.
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VI.2 OBLIGATION OF THE PRINCIPAL STOCKHOLDER TO INDEMNIFY.
Subsequent to the Effective Time the Principal Stockholder shall indemnify and
hold harmless Envision (and its directors, officers, employees, agent,
affiliates and assigns) from and against all losses, liabilities, damages,
deficiencies, costs or expenses, including interest and penalties imposed or
assessed by any judicial or administrative body and reasonable attorneys' fees,
whether or not arising out of third-party claims and including all amounts paid
in investigation, defense or settlement of the foregoing pursuant to this
Article VI ("LOSSES") based upon, arising out of or otherwise in respect of any
inaccuracy in or breach of any representation, warranty or covenant of LiQ or
the Principal Stockholder contained in Article III or Article IV or in any
certificate delivered pursuant hereto. The obligation of the Principal
Stockholder pursuant to this Section 6.2 shall arise only from a knowing
omission or misrepresentation by the Principal Stockholder.
VI.3 LIMITATIONS ON INDEMNIFICATION. Notwithstanding the
foregoing, the right to indemnification under this Article VI shall be subject
to the following terms:
(a) No indemnification shall be payable pursuant to Section
6.2 after the first anniversary of the Effective Time (the "EXPIRATION
DATE"), except with respect to claims made prior to the Expiration Date
but not then resolved.
(b) No indemnification shall be payable pursuant to Section
6.2 unless and until the aggregate Losses incurred or suffered by
Envision equal or exceed $500,000.00 whereupon indemnification pursuant
to Section 6.2 shall be payable only to the extent all such claims
exceed $500,000.00.
(c) The aggregate liability of the Principal Stockholder
pursuant to Section 6.2 shall not exceed $1,000,000.00.
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VI.4 NOTICE AND DEFENSE OF CLAIMS. Promptly after receipt of
notice of any claim, liability or expense for which a party seeks
indemnification hereunder, such party shall give written notice thereof to the
indemnifying party, but such notification shall not be a condition to
indemnification hereunder except to the extent of actual prejudice to the
indemnifying party. The notice shall state the information then available
regarding the amount and nature of such claim, liability or expense and shall
specify the provision or provisions of this Agreement under which the liability
or obligation is asserted. If within 30 days after receiving such notice the
indemnifying party gives written notice to the indemnified party stating that it
intends to defend against such claim, liability or expense at its own cost and
expense, then defense of such matter, including selection of counsel (subject to
the consent of the indemnified party, which consent shall not be unreasonably
withheld), shall be by the indemnifying party and the indemnified party shall
make no payment on such claim, liability or expense as long as the indemnified
party is conducting a good faith and diligent defense. Notwithstanding the
foregoing, the indemnified party shall at all times have the right to fully
participate in such defense at its own expense directly or through counsel;
PROVIDED, HOWEVER, if the named parties to the action or proceeding include both
the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate under applicable standards of
professional conduct, the expense of separate counsel for the indemnified party
shall be paid by the indemnifying party. If no such notice of intent to dispute
and defend is given by the indemnifying party, or if such diligent good faith
defense is not being or ceases to be conducted, the indemnified party shall, at
the expense of the indemnifying party, undertake the defense of such claim,
liability or expense with counsel selected by the indemnified party, undertake
the defense of such claim, liability or expense with counsel selected by the
indemnified party, and shall have the right to compromise or settle the same
exercising reasonable business judgment. The indemnified party shall make
available all information and assistance that the indemnifying party may
reasonably request and shall cooperate with the indemnifying party in such
defense. The indemnifying party shall not settle any claim without the consent
of the indemnified party unless such settlement shall solely involve the payment
of money.
VI.5 CONTRIBUTION. To the extent the indemnification
provisions herein are unavailable to an indemnified party, the parties agree to
contribute to the indemnified party the amount payable by the indemnified party
based on the relative benefits and fault of the indemnified party, on the one
hand, and the indemnifying party, on the other.
ARTICLE VII
TERMINATION AND AMENDMENT
VII.1 TERMINATION. This Agreement may be terminated and the
Merger contemplated hereby may be abandoned at any time prior to the Closing
Date, whether before or after approval of matters presented in connection with
the Merger by the stockholders of LiQ (except as otherwise stated herein):
(a) By mutual written consent of Envision and LiQ;
(b) By either Envision or LiQ, if the Merger shall not have
been consummated on or before July 30, 2000 (other than due to the
failure of the party seeking to terminate this Agreement to perform its
obligations under this Agreement required to be performed at or prior
to the Effective Time); or
(c) By Envision or LiQ if any court or other governmental body
of competent jurisdiction shall have issued a final order, decree or
ruling or taken any other final action restraining, enjoining or
otherwise prohibiting the Merger and such order, decree, ruling or
other action is or shall have become final and nonappealable;
VII.2 EFFECT OF TERMINATION. In the event of the termination
of this Agreement pursuant to Section 7.1, this Agreement shall forthwith become
void and there shall be no liability on the part of any party hereto except as
set forth in Section 4.6 and Article VI and the parties' obligations under the
Confidentiality Provisions; PROVIDED, however, that nothing herein shall relieve
any party from liability for any willful breach hereof.
VII.3 FEES AND EXPENSES. Except as otherwise provided in this
Agreement, each party hereto shall bear its own expenses and the expenses of
their respective affiliates in connection with the preparation and negotiation
of this Agreement and the consummation of the transactions contemplated by this
Agreement.
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VII.4 AMENDMENT. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors,
at any time before or after approval of the matters presented in connection with
the Merger by the stockholders of LiQ, but, after any such approval, no
amendment shall be made which by law or in accordance with the rules of any
relevant stock exchange requires further approval by such stockholders without
such further approval. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties hereto.
VII.5 EXTENSION; WAIVER. At any time prior to the Effective
Time, the parties hereto, by action taken or authorized by their respective
Boards of Directors, may, to the extent legally allowed, (i) extend the time for
the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in a written instrument signed on behalf of such party.
The failure of any party to this Agreement to assert any of its rights under
this Agreement or otherwise shall not constitute a waiver of those rights.
ARTICLE VIII
GENERAL PROVISIONS
VIII.1 NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed duly given (a) on the date of delivery
if delivered personally, or by telecopy upon confirmation of receipt, (b) on the
first Business Day following the date of dispatch if delivered by a recognized
next-day courier service, or (c) on the third Business Day following the date of
mailing if delivered by registered or certified mail, return receipt requested,
postage prepaid. All notices hereunder shall be delivered as set forth below, or
pursuant to such other instructions as may be designated in writing by the party
to receive such notice:
(a) if to Envision or Merger Sub, to:
Envision Development Corporation
00000 XX 000xx Xxxx
Xxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
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(b) if to LiQ to:
LiQ, Inc.
One Silicon Alley Plaza
00 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx Xxxx
with a copy to:
Xxxxxxxx Chance Xxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx Xxxxx
VIII.2 INTERPRETATION. When a reference is made in this
Agreement to Sections, Exhibits or Schedules, such reference shall be to a
Section of or Exhibit or Schedule to this Agreement unless otherwise indicated.
The table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation".
VIII.3 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other party, it being understood that
both parties need not sign the same counterpart.
VIII.4 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. (a)
This Agreement and the Confidentiality Provisions constitute the entire
agreement and supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof.
(b) This Agreement shall be binding upon and inure solely to
the benefit of each party hereto, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
VIII.5 GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of the State of New York (except for
provisions regarding the operation of the Merger, which shall be governed by the
laws of the State of Delaware) regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws.
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VIII.6 SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
VIII.7 ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto, in whole or in part (whether by operation of law or otherwise),
without the prior written consent of the other party, and any attempt to make
any such assignment without such consent shall be null and void, except that
Merger Sub may assign, in its sole discretion, any or all of its rights,
interests and obligations under this Agreement to any direct wholly owned
Subsidiary of Envision without the consent of LiQ, but no such assignment shall
relieve Merger Sub of any of its obligations under this Agreement. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns.
VIII.8 SUBMISSION TO JURISDICTION; WAIVERS. Each of Envision
and LiQ irrevocably agrees that any legal action or proceeding with respect to
this Agreement or for recognition and enforcement of any judgment in respect
hereof brought by the other party hereto or its successors or assigns may be
brought and determined in the Courts of the State of New York and each of
Envision and LiQ hereby irrevocably submits with regard to any such action or
proceeding for itself and in respect to its property, generally and
unconditionally, to the nonexclusive jurisdiction of the aforesaid courts. Each
of Envision and LiQ hereby irrevocably waives, and agrees not to assert, by way
of motion, as a defense, counterclaim or otherwise, in any action or proceeding
with respect to this Agreement, (a) any claim that it is not personally subject
to the jurisdiction of the above-named courts for any reason other than the
failure to lawfully serve process, (b) that it or its property is exempt or
immune from jurisdiction of any such court or from any legal process commenced
in such courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or otherwise),
and (c) to the fullest extent permitted by applicable law, that (i) the suit,
action or proceeding in any such court is brought in an inconvenient forum, (ii)
the venue of such suit, action or proceeding is improper and (iii) this
Agreement, or the subject matter hereof, may not be enforced in or by such
courts.
VIII.9 ENFORCEMENT. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is accordingly agreed that
the parties shall be entitled to specific performance of the terms hereof, this
being in addition to any other remedy to which they are entitled at law or in
equity.
VIII.10 DEFINITIONS. As used in this Agreement:
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(a) "BENEFICIAL OWNERSHIP" or "BENEFICIALLY OWN" shall have
the meaning under Section 13(d) of the Exchange Act and the rules and
regulations thereunder.
(b) "BENEFIT PLANS" means, with respect to any Person, each
employee benefit plan, program, arrangement and contract (including,
without limitation, any "employee benefit plan," as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and any bonus, deferred compensation, stock bonus, stock
purchase, restricted stock, stock option, employment, termination, stay
agreement or bonus, change in control and severance plan, program,
arrangement and contract) in effect on the date of this Agreement or
disclosed on the LiQ Disclosure Schedule or the Envision Disclosure
Schedule, as the case may be, to which such Person or its Subsidiary is
a party, which is maintained or contributed to by such Person, or with
respect to which such Person could incur material liability under
Section 4069, 4201 or 4212(c) of ERISA.
(c) "BOARD OF DIRECTORS" means the Board of Directors of any
specified Person and any committees thereof.
(d) "BUSINESS DAY" means any day on which banks are not
required or authorized to close in the City of New York.
(e) "KNOWN" OR "KNOWLEDGE" means, with respect to any party,
the knowledge of such party's executive officers after reasonable
inquiry, including reasonable inquiry of such party's counsel.
(f) "MATERIAL ADVERSE EFFECT" means, with respect to any
entity, any change, circumstance or effect that, individually or in the
aggregate with all other changes, circumstances and effects, is or is
reasonably likely to be materially adverse to (i) the business,
financial condition, prospects or results of operations of such entity
and its Subsidiaries (including in the case of Envision, following the
Merger, the Surviving Corporation) taken as a whole or (ii) the ability
of such party to consummate the transactions contemplated by this
Agreement.
(g) "THE OTHER PARTY" means, with respect to LiQ, Envision and
means, with respect to Envision, LiQ.
(h) "PERSON" means an individual, corporation, limited
liability company, partnership, association, trust, unincorporated
organization, other entity or group (as defined in the Exchange Act).
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(i) "SUBSIDIARY" when used with respect to any party means any
corporation or other organization, whether incorporated or
unincorporated, (i) of which such party or any other Subsidiary of such
party is a general partner (excluding partnerships, the general
partnership interests of which held by such party or any Subsidiary of
such party do not have a majority of the voting interests in such
partnership) or (ii) at least a majority of the securities or other
interests of which having by their terms ordinary voting power to elect
a majority of the Board of Directors or others performing similar
functions with respect to such corporation or other organization is
directly or indirectly owned or controlled by such party or by any one
or more of its Subsidiaries, or by such party and one or more of its
Subsidiaries.
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IN WITNESS WHEREOF, Envision, Merger Sub, LiQ and the
Principal Stockholder have executed this Agreement, all as of the date first
written above.
ENVISION DEVELOPMENT CORPORATION
By: /s/ XXXXXXX X. PATCH
-----------------------------------
Name: Xxxxxxx X. Patch
Title: Chief Executive Officer
LiQ ACQUISITION SUB, INC.
By: /s/ XXXXXXX X. PATCH
-----------------------------------
Name: Xxxxxxx X. Patch
Title: President and Chief Executive Officer
LiQ, INC.
By: /s/ XXXX XXXXX XXX XXXX
-----------------------------------
Name: Xxxx Xxxxx Xxx Xxxx
Title: Chairman of the Board
XXXX XXXXX XXX XXXX
--------------------------------------
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