Exhibit 2.1
SECURITIES EXCHANGE AGREEMENT
SECURITIES EXCHANGE AGREEMENT ("this Agreement") dated as of December
14, 2001 by and between BE SAFE SERVICES, INC., a Delaware corporation ("Be
Safe"), and the individuals whose names appear on the signature page hereof,
each being a shareholder (the "Shareholders") of FIRST NATIONAL DATA BANK, INC.,
a Florida corporation ("FNDB").
W I T N E S S E T H:
WHEREAS, as of December 14, 2001 there are 5,975,500 shares of common
stock outstanding of FNDB (the "FNDB Stock") all of which are owned beneficially
and of record, by the Shareholders who together own 100% of the issued and
outstanding shares of FNDB Stock, each owning the number of shares set forth
opposite their respective names on the signature page hereof.
WHEREAS, Be Safe proposes to exchange all of the outstanding shares of
FNDB in exchange for the issuance of an aggregate of 5,975,500 shares of Be
Safe's common stock ("Be Safe Stock"), representing 56.85% of the post-closing,
outstanding Be Safe Stock at a closing provided for in Section 2 of this
Agreement.
WHEREAS, the Board of Directors of Be Safe and FNDB have determined
that it is desirable to effect a plan of reorganization meeting the requirement
of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended and the
parties intend that the issuance of the Be Safe Stock and exchange for the FNDB
Stock shall qualify as a "tax free" reorganization as contemplated by the
provisions of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants, agreements, representations and warranties contained herein,
the parties hereto agree as follows:
ARTICLE 1
ISSUANCE AND EXCHANGE OF SHARES
1.1 Issuance and Exchange. At Closing to be held in accordance with the
provisions of Article 2 below and subject to the terms and agreements set forth
herein, Be Safe agrees to issue each of the Shareholders who agree to, severally
and jointly, to exchange the number of authorized and newly issued shares of Be
Safe Stock determined as provided in Section 1.2 below for each share of FNDB
Stock owned by them. In consideration for the shares of Be Safe Stock to be
exchanged, the Shareholders each shall deliver to Be Safe stock certificates
evidencing their ownership of FNDB, together with duly executed stock powers to
effectuate the transfer.
1.2 Exchange Ratio.
(a) At Closing, Be Safe shall exchange 5,975,500 shares of Be Safe
Stock for each share of FNDB Stock in accordance with the
distribution shown on the signature page hereof and as full
consideration for the FNDB Stock.
(b) No fractional shares of Be Safe Stock will be issued to any
Shareholder. Accordingly, Shareholders who would otherwise be
entitled to receive fractional shares of Be Safe Stock will,
upon surrender of their certificate representing the
fractional shares of FNDB Stock, receive a full share if the
fractional share exceeds fifty percent (50%) and if the
fractional share is less than fifty percent (50%) the
fractional share shall be canceled.
(c) An aggregate of 5,975,500 shares of Be Safe Stock shall be
exchanged by and issued to all of the FNDB Shareholders.
ARTICLE 2
CLOSING
2. Closing.
The consummation of the exchange by the Shareholders (the Closing")
shall occur at the offices of Xxxxxx & Xxxxxxxxx LLP, 000 Xxxxxxx Xxxxxx, Xxxxx
000, Xxxxxx Xxxx, Xxx Xxxx 00000 on the 30th day of November, 2001, or at such
other place and/or on such other time and date as the parties may agree upon
(the "Closing Date"). If the Closing fails to occur by December 15, 2001, or by
such later date to which the Closing may be extended as provided hereinabove,
this Agreement shall automatically terminate, all parties shall pay their own
expenses incurred in connection herewith, and no party hereto shall have any
further obligations hereunder; provided, however, that no such termination shall
constitute a waiver by any party or parties which is/are not in default of any
of its or their respective representations, warranties or covenants if any other
party or parties is in default of any of its or their respective
representations, warranties or covenants under this Agreement. At the Closing,
as conditions thereto:
2.1 Deliveries by Be Safe.
Be Safe shall deliver, or cause to be delivered to the Shareholders:
(a) As soon after the Closing as is feasibly possible and no later
than three days after Closing, certificates for the shares of
Be Safe Stock being exchanged for their respective accounts,
in form and substance reasonably satisfactory to the
Shareholdersand FNDB;
(b) The certificates, resolutions, opinions and resignations
specified in Article 6 below;
(c) All of the books and records of Be Safe.
2.2 Shareholders' Deliveries.
The Shareholders shall deliver to Be Safe:
(a) A stock certificate or certificates evidencing the ownership
of each Shareholder, of all shares of FNDB Stock currently
owned by them, respectively, duly endorsed for transfer to Be
Safe; and
(b) The certificates, resolutions and opinions specified in
Article 5 below.
ARTICLE 3
REPRESENTATIONS OF ALL SHAREHOLDERS
All of the Shareholders hereby represent and warrant to Be Safe as
follows (it being acknowledged that Be Safe is entering into this Agreement in
material reliance upon each of the following representations and warranties, and
that the truth and accuracy of each, as evidenced by their signature set forth
on the signature page, constitutes a condition precedent to the obligations of
Be Safe hereunder):
3.1 Ownership of Stock. The Shareholders are the lawful owners of the
shares of FNDB Stock to be transferred to Be Safe free and clear of all
preemptive or similar rights, liens, encumbrances, restrictions and claims of
every kind, except those listed on Schedule 3.1 hereto and the delivery to Be
Safe of the FNDB Stock pursuant to the provisions of this Agreement will
transfer to Be Safe valid title thereto, free and clear of all liens,
encumbrances, restrictions and claims of every kind. All of the shares of FNDB
Stock to be exchanged herein have been duly authorized and validly issued and
are fully paid and nonassessable.
3.2 Authority to Execute and Perform Agreement; No Breach. Each
Shareholder has the full legal right and power and all authority and approval
required to enter into, execute and deliver this Agreement, and to sell, assign,
transfer and convey the FNDB Stock and to perform fully their respective
obligations hereunder. This Agreement has been duly executed and delivered by
each Shareholder and, assuming due execution and delivery by, and enforceability
against, Be Safe, constitutes the valid and binding obligation of each
Shareholder enforceable in accordance with its terms, subject to the
qualifications that enforcement of the rights and remedies created hereby is
subject to (i) bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting the rights and remedies of creditors, and (ii)
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law). No approval or consent of, or
filing with, any governmental or regulatory body, and no approval or consent of,
or filing with, any other person is required to be obtained by the Shareholders
or in connection with the execution and delivery by the Shareholders of this
Agreement and consummation and performance by them of the transactions
contemplated hereby, other than as set forth on Schedule 3.2.
The execution, delivery and performance of this Agreement by each
Shareholder and the consummation of the transactions contemplated hereby in
accordance with the terms and conditions hereof by each Shareholder will not:
(a) violate, conflict with or result in the breach of any of the
terms of, or constitute (or with notice or lapse of time or
both would constitute) a default under, any contract, lease,
agreement or other instrument or obligation to which a
Shareholder is a party or by or to which any of the properties
and assets of any of the Shareholders may be bound or subject;
(b) violate any order, judgment, injunction, award or decree of
any court, arbitrator, governmental or regulatory body, by
which a Shareholder or the securities, assets, properties or
business of any of them is bound; or
(c) violate any statute, law or regulation.
3.3 Securities Matters.
(a) The Shareholders have been advised that the Be Safe Shares
have not been registered under the Securities Act of 1933, as
amended (the "Securities Act"), or any state securities act in
reliance on exemptions therefrom.
(b) The Be Safe Shares are being acquired solely for each
Shareholder's own account, for investment and are not being
acquired with a view to or for the resale, distribution,
subdivision or fractionalization thereof, the Shareholders
have no present plans to enter into any such contract,
undertaking, agreement or arrangement and each Shareholder
further understands that the Be Safe Shares, may only be
resold pursuant to a registration statement under the
Securities Act, or pursuant to some other available exemption;
(c) The Shareholders acknowledge, in connection with the exchange
of the Be Safe Shares, that no representation has been made by
representatives of Be Safe regarding its business, assets or
prospects other than that set forth herein and that each is
relying upon the information set forth in the filings made by
Be Safe pursuant to Section 13 of the Securities Exchange Act
of 1934, as amended and such other representations and
warranties as set forth in this Agreement.
(d) The Shareholders acknowledge that they are either an
"accredited investor" within the meaning of Regulation D under
the Securities Act or they have sufficient knowledge and
experience in financial matters to be capable of evaluating
the merits and risks of exchanging their FNDB Shares for Be
Safe Shares and they are able to bear the economic risk of the
transactions contemplated hereby.
(e) The Shareholders agree that the certificate or certificates
representing the Be Safe Shares will be inscribed with
substantially the following legend:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933. The securities have been acquired
for investment and may not be sold, transferred or assigned in the absence of an
effective registration statement for these securities under the Securities Act
of 1933 or an opinion satisfactory to Be Safe'S counsel that registration is not
required under said Act."
ARTICLE 4
REPRESENTATIONS OF PRINCIPAL SHAREHOLDERS
The Principal Shareholders (as indicated on the signature page hereof)
hereby represent and warrant to Be Safe as follows:
4.1 Existence and Good Standing. FNDB is a corporation duly organized,
validly existing and in good standing under the laws of the State of Florida.
FNDB has the power to own or lease its properties and assets and to carry on its
business as now being conducted. FNDB is duly qualified to do business and is in
good standing in the jurisdiction set forth on Schedule 4.1.
4.2 Capital Stock. FNDB has an authorized capitalization consisting of
50,000,000 shares of Common Stock, of which 5,975,500 shares are issued and
outstanding. All such outstanding shares have been duly authorized and validly
issued and are fully paid and nonassessable. Except as set forth as Schedule 4.2
attached hereto, there are no outstanding options, warrants, rights, calls,
commitments, conversion rights, rights of exchange, plans or other agreements,
commitments or arrangements of any character providing for the purchase,
subscription, issuance or sale of any shares of the capital stock of FNDB, other
than the exchange of the FNDB Shares as contemplated by this Agreement.
4.3 Financial Statements and No Material Changes. Annexed hereto as
Schedule 4.3 are the audited balance sheets of FNDB; (the "Financial
Statements").
The Financial Statements were carefully prepared from the books and
records of FNDB, and contain the footnotes which would be required in audited
financial statements, present fairly the financial position, assets and
liabilities of FNDB and the results of its operations, for the respective
periods indicated and reflect all necessary accruals, all in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent basis.
The Financial Statements contain all adjustments (consisting of only normal
recurring accruals) required to be made by GAAP, subject to normal year-end
adjustments.
Since September 30, 2001 there has been (a) no material adverse change
in the assets or liabilities, or in the business or condition, financial or
otherwise, or in the results of operations or prospects, of FNDB whether as a
result of any legislative or regulatory change, revocation of any license or
rights to do business, fire, explosion, accident, casualty, labor trouble,
flood, drought, riot, storm, condemnation or act of God or other public force or
otherwise and (b) no material adverse change in the assets or liabilities, or in
the business or condition, financial or otherwise, or in the results of
operations or prospects, of FNDB and to the best knowledge, information and
belief of FNDB, no fact or condition exists or is contemplated or threatened
which might cause such a change in the future.
4.4 Books and Records. The minute books of FNDB, all the contents of
which have been previously made available to Be Safe and their representatives,
contain accurate records of all meetings of, and corporate action taken by
(including action taken by written consent) the shareholders and Board of
Directors of FNDB. Except as set forth on Schedule 4.4 attached hereto, FNDB
does not have any of its respective records, systems, controls, data or
information recorded, stored, maintained, operated or otherwise wholly or partly
dependent upon or held by any means (including any electronic, mechanical or
photographic process, whether computerized or not) which (including all means of
access thereto and therefrom) are not under the exclusive ownership and direct
control of FNDB.
4.5 Title to Properties; Encumbrances.
(a) Except as set forth on Schedule 4.5 attached hereto, FNDB has
good, valid and marketable title to (a) all of its properties
and assets (real and personal, tangible and intangible),
including, without limitation, all of the properties and
assets reflected in the balance sheet included as part of the
Financial Statements, except as indicated in the Schedules
hereto; and (b) all of the properties and assets purchased by
FNDB since the date of the Financial Statements all of which
purchases as of a date not more than two days prior to the
date of this Agreement, have been set forth on Schedule 4.5
attached hereto; in each case subject to no encumbrance, lien,
charge or other restriction of any kind or character, except
for (i) liens reflected in the balance sheet, included as part
of the Financial Statements; (ii) liens consisting of zoning
or planning restrictions, easements, permits and other
restrictions or limitations on the use of real property or
irregularities in title thereto which do not materially
detract from the value of, or impair the use of, such property
by FNDB in the operation of its business; (iii) liens for
current taxes, assessments or governmental charges or levies
on property not yet due and delinquent; and (iv) liens
described on Schedule 4.5 attached hereto (liens of the type
described in clause (i), (ii) and (iii) above are hereinafter
sometimes referred to as "Permitted Liens").
(b) The rights, properties and other assets presently owned,
leased or licensed, by FNDB reflected on the balance sheet
included in the Financial Statements or acquired since the
date of the Financial Statement include all rights, properties
and other assets necessary to permit FNDB to conduct its
business in the same manner as its business has heretofore
been conducted. All such properties and assets owned or leased
by FNDB are in satisfactory condition and repair, other than
ordinary wear and tear.
No structure or improvement on the real property leased by
FNDB, whether now existing or intended to be constructed
pursuant to existing plans and specifications, violates, or if
completed would violate, any applicable zoning or building
regulations or ordinances or similar federal, state or
municipal law.
4.6 Leases. Schedule 4.6 attached hereto, contains an accurate and
complete list and description of the terms of all leases to which either FNDB or
any of its subsidiaries is a party (as lessee or lessor). Each lease set forth
on Schedule 4.6 (or required to be set forth on Schedule 4.6) is in full force
and effect; all rents and additional rents due to date on each such lease have
been paid; in each case, the lessee has been in peaceable possession since the
commencement of the original term of such lease and is not in default thereunder
and no waiver, indulgence or postponement of the lessee's obligations thereunder
has been granted by the lessor; and there exists no event of default or event,
occurrence, condition or act (including the consummation of the transactions
contemplated hereby) which, with the giving of notice, the lapse of time or the
happening of any further event or condition, would become a default under such
lease. Neither FNDB nor any of its subsidiaries has violated any of the terms or
conditions under any such lease in any material respect, and, to the best
knowledge, information and belief of FNDB, all of the covenants to be performed
by any other party under any such lease have been fully performed. The property
leased by FNDB or any of its subsidiaries is in a state of good maintenance and
repair and is adequate and suitable for the purposes for which it is presently
being used.
4.7 Material Contracts. Except as set forth on Schedule 4.7 attached
hereto, neither FNDB or its subsidiaries has nor is bound by:
(a) any agreement, contract or commitment relating to the
employment of any person by FNDB or its subsidiaries, or any
bonus, deferred compensation, pension, profit sharing, stock
option, employee stock purchase, retirement or other employee
benefit plan;
(b) any agreement, indenture or other instrument which contains
restrictions with respect to payment of dividends or any other
distribution in respect of its capital stock;
(c) any loan or advance to, or investment in, any individual,
partnership, joint venture, corporation, trust, unincorporated
organization, government or other entity (each a "Person") or
any agreement, contract or commitment relating to the making
of any such loan, advance or investment;
(d) any guarantee or other contingent liability in respect of any
indebtedness or obligation of any Person (other than the
endorsement of negotiable instruments for collection in the
ordinary course of business);
(e) any management service, consulting or any other similar type
contract;
(f) any agreement, contract or commitment limiting the freedom of
FNDB or any subsidiary to engage in any line of business or to
compete with any Person;
(g) any agreement, contract or commitment not entered into in the
ordinary course of business which involves $100,000 or more
and is not cancelable without penalty or premium within 30
days; or
(h) any agreement, contract or commitment which might reasonably
be expected to have a potential adverse impact on the business
or operations of FNDB or any subsidiary; or
(i) any agreement, contract or commitment not reflected in the
Financial Statement under which FNDB or any subsidiary is
obligated to make cash payments of, or deliver products or
render services with a value greater than $100,000
individually or $300,000 in the aggregate, or receive cash
payments of, or receive products or services with a value
greater than $100,000 individually or $300,000 in the
aggregate, and any other agreement, contract or commitment
which is material to the conduct of the business of FNDB.
Each contract or agreement set forth on Schedule 4.7 (or not required
to be set forth on Schedule 4.7) is in full force and effect and there exists no
default or event of default or event, occurrence, condition or act (including
the consummation of the transactions contemplated hereby) which, with the giving
of notice, the lapse of time or the happening of any other event or condition,
would become a default or event of default thereunder. Neither FNDB or any
subsidiary has violated any of the terms or conditions of any contract or
agreement set forth on Schedule 4.7 (or not required to be set forth on Schedule
4.7) in any material respect, and, to the best knowledge, information and belief
of FNDB, all of the covenants to be performed by any other party thereto have
been fully performed. Except as set forth on Schedule 4.7, the consummation of
the transactions contemplated hereby does not constitute an event of default (or
an event, which with notice or the lapse of time or both would constitute a
default) under any such contract or agreement.
4.8 Restrictive Documents. Other than as set forth on Schedule 4.8
attached hereto, neither FNDB or any subsidiary, nor Shareholder is subject to,
or a party to, any charter, by-law, mortgage, lien, lease, license, permit,
agreement, contract, instrument, law, rule, ordinance, regulation, order,
judgment or decree, or any other restriction of any kind or character, which
could materially adversely affect the business practices, operations or
condition of FNDB or any of its assets or property ("FNDB's Property", which for
the purposes of this Agreement includes the assets and property of all of FNDB's
subsidiaries), or which would prevent consummation of the transactions
contemplated by this Agreement, compliance by the Shareholders with the terms,
conditions and provisions hereof or the continued operation of "FNDB's Business"
after the date hereof or the Closing Date (as hereinafter defined) on
substantially the same basis as heretofore operated or which would restrict the
ability of FNDB to conduct business in any area.
4.9 Litigation. Except as set forth on Schedule 4.9 attached hereto,
there is no action, suit, proceeding at law or in equity, arbitration or
administrative or other proceeding by or before (or to the best knowledge,
information and belief of the Principal Shareholders any investigation by) any
governmental or other instrumentality or agency, pending, or, to the best
knowledge, information and belief of FNDB or any subsidiary, threatened, against
or affecting FNDB or any subsidiary, or any of their respective properties or
rights, or against the Principal Shareholders, or any officer, director or
employee of a Principal Shareholder other than such items which are
insignificant and immaterial and which do not adversely affect (i) the right or
ability of FNDB's Business to carry on business as now conducted; (ii) the
condition, whether financial or otherwise, or properties of FNDB; or (iii) the
consummation of the transactions contemplated hereby and the Shareholders do not
know of any valid basis for any such action, proceeding or investigation. There
are no outstanding orders, judgments, injunctions, awards or decrees of any
court, governmental or regulatory body or arbitration tribunal by which either
the Principal Shareholders or FNDB, or any officer, director or employee of
FNDB, or the securities, assets, properties or business of any of them is bound,
other than any such items which are insignificant and immaterial and which do
not and will not adversely affect (i) the right of FNDB to carry on its business
as now conducted and as proposed to be conducted by Be Safe after the
consummation of the transactions contemplated by this Agreement; (ii) the
condition, whether financial or otherwise, or properties of FNDB; or (iii) the
consummation of the transactions contemplated hereby.
4.10 Taxes. Except as set forth on Schedule 4.10, FNDB and each of its
subsidiaries has filed or caused to be filed, within the times and within the
manner prescribed by law, all federal, state, local and foreign tax returns and
tax reports which are required to be filed by, or with respect to, FNDB. Such
returns and reports reflect accurately all liability for taxes of FNDB for the
periods covered thereby. Except as set forth on Schedule 4.10, all federal,
state, local and foreign income, profits, franchise, employment, sales, use,
occupancy, excise and other taxes and assessments, stock and transfer taxes
(including interest and penalties) payable by, or due from, FNDB and each of its
subsidiaries, have been fully paid and fully provided for in the books and
financial statements of FNDB. No examination of any tax return of FNDB or of its
subsidiaries, is currently in progress. There are no outstanding agreements or
waivers extending the statutory period of limitation applicable to any tax
return of FNDB. Schedule 4.10 attached hereto lists all tax sharing contracts,
agreements or arrangements to which FNDB is a party and all such contracts,
agreements and arrangements have been terminated prior to the Closing Date with
no liability or obligation to FNDB.
4.11 Liabilities. Except as set forth on Schedule 4.11, FNDB has no
outstanding claims, liabilities or indebtedness, contingent or otherwise, which
are not properly reflected in the Financial Statements in a manner consistently
with past practice, other than liabilities incurred subsequent to the Financial
Statement date in the ordinary course of business not exceeding $100,000
individually or $300,000 in the aggregate; the reserves reflected in the
Financial Statements are adequate, appropriate and reasonable. FNDB is not in
default in respect of the terms or conditions of any indebtedness.
4.12 Insurance. Set forth on Schedule 4.12, attached hereto, is a brief
description of insurance policies (specifying the insurer, the policy number or
coverage note number with respect to binders and the amount of any deductible,
describing the pending claims if such claims exceed the applicable policy
limits, setting forth the aggregate amount paid out by the insurer under each
policy from December 31, 2000, through the date hereof and the aggregate limit,
if any, of the insurer's liability thereunder) which FNDB and any of its
subsidiaries maintain with respect to its business, properties or employees.
Such policies are valid, binding and enforceable in accordance with their terms
and are in full force and effect and are free from any right of termination on
the part of the insurance carriers. Such policies, with respect to their amounts
and types of coverage, are adequate to insure fully against risks to which FNDB
and any of its subsidiaries and their respective property and assets are
normally exposed in the operation of their businesses. Neither FNDB nor any of
its subsidiaries is in default with respect to any material provision in any
such policy or binder and has not failed to give any notice or present any claim
under any such policy or binder in due and timely fashion, and neither FNDB nor
any of its subsidiaries has received any notice of cancellation or non-renewal
with respect to any such policy or binder. Except for claims set forth on
Schedule 4.12, there are no outstanding unpaid claims under any such policy or
binder which have gone unpaid for more than 45 days or as to which the carrier
has disclaimed liability.
4.13 Intellectual Properties. The operation of the business of FNDB or
any of its subsidiaries requires no rights under Intellectual Property (as
hereinafter defined) other than rights under Intellectual Property listed on
Schedule 4.13 attached hereto, and rights granted to FNDB or any of its
subsidiaries pursuant to agreements listed on Schedule 4.13. Within the three
year period immediately prior to the date of this Agreement, neither the
business of FNDB or any of its subsidiaries made use of Intellectual Property
rights other than rights under Intellectual Property listed on Schedule 4.13 and
rights granted to FNDB or any of its subsidiaries pursuant to agreements listed
on Schedule 4.13. Except as otherwise set forth on Schedule 4.13, either FNDB or
any of its subsidiaries owns all right, title and interest in the Intellectual
Property listed on Schedule 4.13 including, without limitation, exclusive rights
to use and license the same. Each item of Intellectual Property listed on
Schedule 4.13 has been duly registered with, filed in, or issued by the
appropriate domestic or foreign governmental agency, to the extent required, and
each such registration, filing and issuance remains in full force and effect.
Except as set forth on Schedule 4.13, no claim adverse to the interests of FNDB
or any of its subsidiaries in the Intellectual Property or agreements listed on
Schedule 4.13 has been made in litigation. To the best knowledge, information
and belief of the Principal Shareholders, no such claim has been threatened or
asserted, no basis exists for any such claim, and no Person has infringed or
otherwise violated the rights of FNDB or any of its subsidiaries in any of the
Intellectual Property or agreements listed on Schedule 4.13. Except as set forth
on Schedule 4.13, no litigation is pending wherein FNDB or any of its
subsidiaries is accused of infringing or otherwise violating the Intellectual
Property right of another, or of breaching a contract conveying rights under
Intellectual Property. To the best knowledge, information and belief of the
Principal Shareholders, no such claim has been asserted or threatened against
FNDB or any of its subsidiaries, nor are there any facts that would give rise to
such a claim. For purposes of this Section 4.13, "Intellectual Property" means
domestic and foreign patents, patent applications, registered and unregistered
trade marks and service marks, trade names, registered and unregistered
copyrights, computer programs, data bases, trade secrets and proprietary
information. The Principal Shareholders will transfer any Intellectual Property
owned by them and used in FNDB or any of its subsidiaries' business to Be Safe.
4.14 Compliance with Laws. Neither FNDB nor any of its subsidiaries,
nor to the knowledge of FNDB, the Principal Shareholders, any officer, director
or employee of FNDB or any of its subsidiaries is in violation of any applicable
order, judgment, injunction, award or decree, related to, arising out of or
affecting the business or operations of FNDB or any of its subsidiaries or their
respective properties or assets. Neither the Principal Shareholders, FNDB nor
any of its subsidiaries, nor to the knowledge of FNDB, any officer, director or
employee of either FNDB or any of its subsidiaries is in violation of any
federal, state, local or foreign law, ordinance, regulation or any other
requirement of any governmental or regulatory body, court or arbitrator
(including, without limitation, laws relating to the environment and OSHA and
the Americans with Disabilities Act) other than insignificant or immaterial
violations which do not and will not adversely affect (i) FNDB's Business or
Property; (ii) the business proposed to be conducted by Be Safe after the
consummation of the transactions contemplated by this Agreement; or (iii) the
consummation of the transactions contemplated by this Agreement. Each permit,
license, order or approval of any governmental or regulatory body or other
applicable authority ("Permits") that is material to the conduct of FNDB's
Business is in full force and effect, no violations are or have been recorded in
respect of any permit and no proceeding is pending or, to the knowledge of the
Principal Shareholders or FNDB, threatened, to revoke or limit any Permit, which
revocation or limitation could have an adverse effect on FNDB's Business or
Property or the business to be conducted by Be Safe after the consummation of
the transactions contemplated by this Agreement. Schedule 4.14 contains a list
of all Permits. Except as set forth on Schedule 4.14, no approval or consent of
any person is needed in order that the Permits continue in full force and effect
following the consummation of the transactions contemplated by this Agreement.
4.15 Employment Relations.
(a) FNDB and each of its subsidiaries is in compliance with all
Federal, state or other applicable laws, domestic or foreign,
respecting employment and employment practices, terms and
conditions of employment and wages and hours, and has not and
is not engaged in any unfair labor practice;
(b) no unfair labor practice complaint against FNDB or any of its
subsidiaries is currently pending before the National Labor
Relations Board nor has such a complaint been pending in the
last two years;
(c) there is no labor strike, dispute, slowdown or stoppage
actually pending or threatened against or involving FNDB or
any of its subsidiaries nor has one existed during the last
two years;
(d) no representation question exists respecting the employees of
FNDB or any of its subsidiaries;
(e) no grievance which might have an adverse effect upon FNDB or
any of its subsidiaries or the conduct of FNDB's Business
exists, no arbitration proceeding arising out of or under any
collective bargaining agreement is pending and no claim
therefor has been asserted;
(f) Neither FNDB nor any of its subsidiaries is a party to, nor
does there otherwise exist, any union, collective bargaining
agreement or similar agreement with respect to the employees
of FNDB or any of its subsidiaries and no collective
bargaining agreement or similar agreement is currently being
negotiated by FNDB or any of its subsidiaries; and
(g) Neither FNDB nor any of its subsidiaries has experienced any
labor difficulty during the last two years. There has not
been, and to the best knowledge, information and belief of the
Principal Shareholders there will not be, any adverse change
in relations with employees of FNDB or any of its subsidiaries
as a result of any announcement of the transactions
contemplated by this Agreement.
4.16 Employee Benefit Plans.
(a) Schedule 4.16 contains a true and complete list and accurate
description of each employee welfare benefit plan (an
"Employee Welfare Plan"), as defined in Section 3(1) of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA"), maintained currently or at any time by FNDB or any
other organization which as of the Closing Date is a member of
a controlled group of organizations within the meaning of
Section 414(b), (c), (m) or (o) of the Internal Revenue Code
of 1986, as amended, (the "Code"), of which FNDB is a member
(an "ERISA Affiliate"), or to which FNDB or any ERISA
Affiliate contributes or is required to contribute or
contributed or was required to contribute at any time.
Schedule 4.16 contains a true and complete list and accurate
description of each employee pension benefit plan, as defined
in Section 3(2) of ERISA (an "Employee Pension Plan"),
maintained currently or at any time by FNDB or any ERISA
affiliate or to which FNDB or any ERISA Affiliate contributes
or is required to contribute or contributed or was required to
contribute at any time. The Employee Welfare Plans, the
Employee Pension Plans and the other plans listed on Schedule
4.16 are collectively referred to herein as the "Plans."
Neither FNDB nor any ERISA Affiliate has maintained at any
time, nor does it contribute to or has it contributed to or is
or was required to contribute to: (i) any multi-employer plan
(as defined in Section 3(37) of ERISA); or (ii) any funded or
unfunded medical, health or life insurance plans or
arrangements for current or future retirees or terminated
employees.
(b) With respect to each current Plan, Be Safe has been provided
heretofore with true and complete copies of: (i) all Plan
documents and all documents or instruments establishing or
constituting any related trust, annuity contract or other
funding instrument, and any amendments thereto; (ii) the most
recent determination letter received from the IRS; (iii) the
most recent financial statement; (iv) the most recent IRS Form
5500; and (v) written descriptions of all non-written
agreements relating to the Plans. All current Plans, all Plan
documents and all documents or instruments establishing or
constituting any related trust, annuity contract or other
funding instrument, and any amendments thereto, comply in all
material respects with the provisions of ERISA and the Code
and applicable laws, rules and regulations. All necessary
governmental approvals for all current Plans have been
obtained and favorable determinations as to the qualification
under the Code of each of the current Plans, and for any Code
Section 501(c)(9) trust maintained in connection with any
current Employee Welfare Plan, and each amendment thereto,
have been made by the IRS, or have been applied for and no
event has occurred and no facts or circumstances exist that
may cause the loss of any such qualification or may cause any
such application to be denied.
(c) Except as set forth on Schedule 4.16, the administration of
all Plans has been consistent with, and in compliance in all
material respects with, applicable requirements of the Code
and ERISA, including, without limitation, compliance on a
timely basis with all requirements for reporting, disclosure
and requirements for the continuation of group health
insurance. Neither FNDB, any ERISA Affiliate nor any Plan
fiduciary (as defined in Section 3(21) of ERISA), with respect
to any Plan, has engaged in any transaction or acted or failed
to act in any manner that violates Section 404 or 406 of ERISA
or engaged in any prohibited transaction (as defined in
Section 4975(c)(1) of the Code) for which there exists neither
a statutory nor regulatory exemption or for which an exemption
has not been obtained. All obligations required to be
performed by FNDB or any ERISA Affiliate under each Plan have
been performed, and FNDB is not in violation of the terms of
any Plan, nor does FNDB or the Shareholders have any knowledge
of any existing violation by any other party of any term or
requirement of or applicable to any current Plan. All
contributions required by law to have been made under any
Plan, or to any trusts or funds established thereunder or in
connection therewith, have been made by the due dates thereof
(including any valid extensions).
(d) No claims, suits or other proceedings are pending or
threatened, and no facts or circumstances exist that could
provide a basis for any such claim, suit or other proceeding,
by any of FNDB's or any ERISA Affiliate's current or former
employees, any participant (as defined in Section 3(7) of
ERISA) to any Plan maintained at any time by FNDB or any ERISA
Affiliate to which FNDB contributes or has contributed or is
or was required to contribute, any fiduciary of any Plan, any
beneficiary (as defined in Section 3(8) of ERISA) of any such
person or by any governmental body, agency or instrumentality
thereof relating to or affecting any Plan, other than usual
and ordinary claims for benefits by eligible persons. Neither
the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will
constitute: (i) a termination of employment or other event
entitling any person to any additional or other benefits, or
that would otherwise modify any benefits or the vesting of any
benefits, under any Plan maintained at any time by FNDB or any
ERISA affiliate, or to which FNDB or any ERISA Affiliate
contributes or has contributed or is or was required to
contribute; or (ii) a violation of Section 404 or 406 of ERISA
or a prohibited transaction (as defined in Section 4975(c)(1)
of the Code) for which there exists neither a statutory nor
regulatory exemption or for which an exemption has not been
obtained.
(e) Neither FNDB nor any ERISA Affiliate maintains any Plans that
are subject to the requirements of Section 412 of the Code.
4.17 Environmental Laws and Regulations.
(a) Neither FNDB nor any of its subsidiaries has generated,
transported or disposed of any hazardous material (defined
below) during the past three years.
(b) Neither FNDB nor any of its subsidiaries has Hazardous
Materials at any site or facility owned or operated presently
or at any previous time by FNDB or any of its subsidiaries.
FNDB and its subsidiaries are in compliance in all material respects
with all applicable federal, state and local laws and regulations relating to
product registration, pollution control and environmental contamination
including, but not limited to, all laws and regulations governing the
generation, use, collection, discharge, or disposal of Hazardous Materials and
all laws and regulations with regard to record keeping, notification and
reporting requirements respecting Hazardous Materials. Neither FNDB nor any of
its subsidiaries has been alleged to be in violation of, and has not been
subject to any administrative or judicial proceeding pursuant to, such laws or
regulations either now or any time during the past three years. There are no
facts or circumstances which FNDB or the Principal Shareholders reasonably
expects could form the basis for the assertion of any Environmental Claim (as
defined below) against FNDB or any of its subsidiaries relating to environmental
matters including, but not limited to, any Environmental Claim arising from past
or present environmental practices asserted under CERCLA (as defined below) and
RCRA (as defined below), or any other federal, state or local environmental
statute, which FNDB or the Principal Shareholders believes might have an adverse
effect on the business, results of operations, financial condition or prospects
of FNDB and its subsidiaries taken as a whole.
For purposes of this Section 4.17, the following terms shall have the
following meanings: (A) "Hazardous Materials" shall mean materials defined as
"hazardous substances", "hazardous wastes" or "solid wastes" in (i) the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. xx.xx. 9601--5657, and any amendments thereto ("CERCLA"); (ii) the
Resource Conservation and Recovery Act, 42 U.S.C. ss.ss.6901-6987 and any
amendments thereto ("RCRA"); and (iii) any similar federal, state or local
environmental statute; and (B) "Environmental Claim" shall mean any and all
claims, demands, causes of actions, suits, proceedings, administrative
proceedings, losses, judgments, decrees, debts, damages, liabilities, court
costs, attorneys' fees and any other expenses incurred, assessed or sustained by
or against FNDB.
4.18 Interests in Clients, Suppliers, Etc. At closing and in accordance
with the respective employment agreement, except as set forth on Schedule 4.18
attached hereto, as of the date of closing no officer or director of FNDB or any
of its subsidiaries possesses, directly or indirectly, any financial interest
in, or is a director, officer or employee of, any corporation, firm, association
or business organization which is a client, supplier, customer, lessor, lessee,
or competitor or potential competitor of FNDB. Ownership of securities of a
company whose securities are registered under the Securities Exchange Act of
1934, as amended, not in excess of 1% of any class of such securities shall not
be deemed to be a financial interest for purposes of this Section 4.18.
4.19 Powers of Attorney and Compensation of Employees. Set forth on
Schedule 4.19 attached hereto is an accurate and complete list showing (a) the
names of all persons, if any, holding powers of attorney from FNDB or any of its
subsidiaries and a summary statement of the terms thereof; and (b) the names and
current salaries, including bonus and fringe benefits (other than those
described on Schedule 4.16 hereto) of all officers and of all persons whose
compensation from FNDB or any of its subsidiaries for the calendar year to date
ended on the Financial Statement date exceeded an annualized rate of $100,000,
together with a statement of the full amount paid or payable to each such person
for services rendered during such fiscal year.
4.20 No Changes Since Financial Statement Date. Since the Financial
Statement date, FNDB has not:
(a) incurred any liability or obligation of any nature (whether
accrued, absolute, contingent or otherwise), except
liabilities and obligations in the ordinary course of business
and consistent with past practice, resulting in an increase
for the liabilities shown on the Financial Statement of more
than $100,000 in the aggregate;
(b) permitted any of its assets to be subjected to any mortgage,
pledge, lien, security interest, encumbrance, restriction or
charge of any kind (other than Permitted Liens);
(c) sold, transferred or otherwise disposed of any assets except
inventory sold in the ordinary course of business and
consistent with past practice;
(d) made any single capital expenditure or commitment therefor, in
excess of $50,000 or made aggregate capital expenditures and
commitments therefor in excess of $100,000;
(e) except as set forth on Schedule 4.20(e), declared or paid any
dividend or made any distribution on any shares of its capital
stock, or redeemed, purchased or otherwise acquired any shares
of its capital stock or any option, warrant or other right to
purchase or acquire any such shares;
(f) except as set forth on Schedule 4.20(f), made any bonus or
profit sharing distribution or payment of any kind;
(g) increased its indebtedness for borrowed money, or made any
loan to any Person;
(h) written off as uncollectible any notes or accounts receivable,
except immaterial write-downs or write-offs in the ordinary
course of business and consistent with past practice which do
not exceed $25,000 in the aggregate charged to applicable
reserves, and none of which individually or in the aggregate
is material to FNDB on a consolidated basis;
(i) granted any increase in the rate of wages, salaries, bonuses
or other remuneration or benefits of any executive employee or
other employees or consultants, and no such increase is
customary on a periodic basis or required by agreement or
understanding except as set forth on Schedules 4.16 and 4.20;
(j) canceled or waived any claims or rights of substantial value;
(k) made any change in any method of accounting or auditing
practice;
(l) otherwise conducted its business or entered into any
transaction, except in the usual and ordinary manner and in
the ordinary course of business and consistent with past
practices;
(m) paid, discharged or satisfied any claims, liabilities or
obligations (absolute, accrued, contingent or otherwise) other
than the payment, discharge or satisfaction in the ordinary
course of business and consistent with past practice of
liabilities and obligations reflected and reserved against in
FNDB's Financial Statements or incurred in the ordinary course
of business and consistent with past practice since the
Financial Statement date;
(n) paid, loaned or advanced any amount to, or sold, transferred
or leased any properties or assets (real, personal or mixed,
tangible or intangible to, or entered into any agreement or
arrangement of any kind with, any of its officers, directors
or shareholders or any affiliate or associate of its officers,
directors or shareholders, except compensation to officers at
rates not exceeding the rate of compensation in effect as of
the Financial Statement date;
(o) suffered any material adverse changes in its working capital,
financial condition, assets, liabilities (absolute, accrued,
contingent or otherwise), reserves, business operations or
prospects; or
(p) agreed, whether or not in writing, to do any of the foregoing.
4.21 Certain Business Practices. No officer, director, shareholder,
employee, agent or other representative of FNDB or any of its subsidiaries, or
any person acting on behalf of FNDB, has directly or indirectly, within the past
two years, given or agreed to give any illegal, unethical or improper gift or
similar benefit to any customer, supplier, governmental employee or other person
who is or may be in a position to help or hinder FNDB or any of its subsidiaries
in connection with an actual or proposed transaction.
4.22 Subsidiaries. Except as set forth on Schedule 4.22, FNDB has no
subsidiaries or interest in any corporation, partnership, joint venture or other
entity.
4.23 Disclosure. To the best of Principal Shareholder's knowledge and
belief, neither this Agreement, nor the Financial Statements referred to in
Section 4.3 hereof, any Schedule, Exhibit or certificate attached hereto or
delivered in accordance with the terms hereof or any document or statement in
writing which has been supplied by or on behalf of the Principal Shareholders or
by or on behalf of any of FNDB's directors or officers in connection with the
transactions contemplated by this Agreement contains any untrue statement of a
material fact, or omits any statement of a material fact necessary in order to
make the statements contained herein or therein not misleading. There is no fact
known to the Principal Shareholders or FNDB which could materially and adversely
affect the business, prospects or financial condition of FNDB or any of its
subsidiaries or their respective properties or assets, which has not been set
forth in this Agreement, the Financial Statements referred to in Section 4.3
hereof (including the footnotes thereto), any Schedule, Exhibit or certificate
attached hereto or delivered in accordance with the terms hereof or any document
or statement in writing which has been supplied by or on behalf of the
Shareholder or by or on behalf of any of FNDB's directors or officers in
connection with the transactions contemplated by this Agreement.
4.24 Broker's or Finder's Fees. Except for the persons/entities listed
on Schedule 4.24, no agent, broker, person or firm acting on behalf of the
Principal Shareholders or FNDB is, or will be, entitled to any commission or
broker's or finder's fees from any of the parties hereto, or from any Person
controlling, controlled by or under common control with any of the parties
hereto, in connection with any of the transactions contemplated by this
Agreement.
4.25 Copies of Documents. The Principal Shareholders have caused to be
made available for inspection and copying by Be Safe and its advisers, true,
complete and correct copies of all documents referred to in this Article 4 or in
any Schedule attached hereto.
ARTICLE 5
REPRESENTATIONS OF BE SAFE
Be Safe represents, warrants and agrees as follows:
5.1 Organization and Corporate Power. Be Safe is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and is duly qualified and in good standing to do business as a foreign
corporation in each jurisdiction in which such qualification is required and
where the failure to be so qualified would have a materially adverse effect upon
Be Safe. Be Safe has all requisite corporate power and authority to conduct its
business as now being conducted and to own and lease the properties which it now
owns and leases. Be Safe's Articles of Incorporation as amended to date,
certified by the Delaware Secretary of State, and the By-laws of Be Safe,
certified by the President and the Secretary of Be Safe, which have been
delivered to the Shareholders prior to the execution hereof, are true and
complete copies thereof as in effect as of the date hereof.
5.2 Authorization. Be Safe has full power, legal capacity and authority
to enter into this Agreement, to execute all attendant documents and instruments
necessary to consummate the transaction herein contemplated, and to exchange the
Be Safe Shares with the Shareholders, and to perform all of its obligations
hereunder. This Agreement and all other agreements, documents and instruments to
be executed in connection herewith have been effectively authorized by all
necessary action, corporate or otherwise, on the part of Be Safe, which
authorizations remain in full force and effect, have been duly executed and
delivered by Be Safe, and no other corporate proceedings on the part of Be Safe
are required to authorize this Agreement and the transactions contemplated
hereby, except as specifically set forth herein. This Agreement constitutes the
legal, valid and binding obligation of Be Safe and is enforceable with respect
to Be Safe in accordance with its terms, except as enforcement hereof may be
limited by bankruptcy, insolvency, reorganization, priority or other laws or
court decisions relating to or affecting generally the enforcement of creditors'
rights or affecting generally the availability of equitable remedies. Neither
the execution and delivery of this Agreement, nor the consummation by Be Safe of
any of the transactions contemplated hereby, or compliance with any of the
provisions hereof, will (i) conflict with or result in a breach or, violation
of, or default under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, lease, credit agreement or other agreement,
document, instrument or obligation (including, without limitation, any of its
charter documents) to which Be Safe is a party or by which Be Safe or any of its
assets or properties may be bound, or (ii) violate any judgment, order,
injunction, decree, statute, rule or properties of Be Safe. No authorization,
consent or approval of any public body of authority or any third party is
necessary for the consummation by Be Safe of the transactions contemplated by
this Agreement.
5.3 Capitalization. The authorized capital stock of Be Safe consists of
20,000,000 shares of Common Stock, $.0001 par value. As of the date of this
Agreement there are 4,535,000 shares of Be Safe's Common Stock issued and
outstanding. All of the outstanding shares of Be Safe's Common Stock have been,
and all of Be Safe's Common Stock to be issued and sold to each Shareholder
pursuant to this Agreement, when issued and delivered as provided herein will be
duly authorized, validly issued, fully paid and non-assessable and free of
preemptive or similar rights. Except as set forth on Schedule 5.3 there are no
options, warrants, rights, agreements or commitments of any character obligating
Be Safe contingently or otherwise to issue any shares or to register any shares
of its capital stock under any applicable federal or state securities laws.
5.4 Financial Statements.
(a) Be Safe's financial statements contained in its Form 10-KSB
filing for the fiscal year ended December 31, 2000, its Form
10-QSB filings for the periods ended March 31, 2001, June 30,
2001 and September 30, 2001, (collectively "Be Safe's
Financial Statements") are complete in material respects and
have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout
the periods indicated. Be Safe's Financial Statements
accurately set out and describe the financial condition and
operating results of Be Safe as of the dates, and for the
periods indicated therein, subject to normal year-end audit
adjustments. Except as set forth in Be Safe's Financial
Statements, Be Safe has no liabilities, contingent or
otherwise, other than (i) liabilities incurred in the ordinary
course of business subsequent to September 30, 2000 and (ii)
obligations under contracts and commitments incurred in the
ordinary course of business and not required under generally
accepted accounting principles to be reflected in Be Safe's
Financial Statements. Be Safe maintains and will continue to
maintain a standard system of accounting established and
administered in accordance with generally accepted accounting
principles.
(b) The unaudited balance sheet of Be Safe as of September 30,
2001 and related income statement for the nine months ended
September, 2001 (the "Be Safe's Interim Financial Statements")
are annexed hereto as Schedule 5.4. Be Safe's Interim
Financial Statements were carefully prepared from the books
and records of Be Safe, and although Be Safe's Interim
Financial Statements are not audited and do not contain the
footnotes which would be required in audited financial
statements, present fairly the financial position, assets and
liabilities of Be Safe and the results of its operations, for
the respective periods indicated and reflect all necessary
accruals, all in conformity with GAAP applied on a consistent
basis. The Financial Statements contain all adjustments
(consisting of only normal recurring accruals) required to be
made by GAAP, subject to normal year-end adjustments.
(c) Except as set forth in Schedule 5.4, since September 30, 2001
there has been (i) no material adverse change in the assets or
liabilities, or in the business or condition, financial or
otherwise, or in the results of operations or prospects, of Be
Safe whether as a result of any legislative or regulatory
change, revocation of any license or rights to do business,
fire, explosion, accident, casualty, labor trouble, flood,
drought, riot, storm, condemnation or act of God or other
public force or otherwise and (ii) no material adverse change
in the assets or liabilities, or in the business or condition,
financial or otherwise, or in the results of operations or
prospects, of Be Safe and to the best knowledge, information
and belief of Be Safe, no fact or condition exists or is
contemplated or threatened which might cause such a change in
the future.
5.5 Subsidiaries. Be Safe has no subsidiaries and no investments,
directly or indirectly, or other financial interest in any other corporation or
business organization, joint venture or partnership of any kind whatsoever
except set forth in Schedule 5.5.
5.6. Absence of Undisclosed Liabilities. Except as and to the extent
reflected or reserved against in the most recent balance sheet included in the
Be Safe's Financial Statements, Be Safe has no liability(s) or obligation(s)
(whether accrued, to become due, contingent or otherwise) which individually or
in the aggregate could have a materially adverse effect on the business, assets,
properties, condition (financial or otherwise) or prospects of Be Safe. Except
as disclosed on Schedule 5.6 hereto, there are no material changes in the
business of Be Safe. At Closing, after giving effect to the Split-Off Agreement,
Be Safe shall have no assets and no liabilities.
5.7 No Pending Material Litigation or Proceedings. Except as set forth
on Schedule 5.7, there are no actions, suits or proceedings pending or, to the
best of Be Safe's knowledge, threatened against or affecting Be Safe (including
actions, suits or proceedings where liabilities may be adequately covered by
insurance) at law or in equity or before or by any federal, state, municipal or
other governmental department, commission, court, board, bureau, agency or
instrumentality, domestic or foreign, or affecting any of the officers or
directors of Be Safe in connection with the business, operations or affairs of
Be Safe, which might result in any adverse change in the business, properties or
assets, or in the condition (financial or otherwise) of Be Safe, or which might
prevent the sale of the transactions contemplated by this Agreement. Be Safe is
not subject to any voluntary or involuntary proceeding under the United States
Bankruptcy Code and has not made an assignment for the benefit of creditors.
5.8 Disclosure. Neither this Agreement, nor any certificate, exhibit,
or other written document or statement, furnished to the Shareholders by Be Safe
in connection with the transactions contemplated by this Agreement contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary to be stated in order to make the statements
contained herein or therein not misleading.
5.9 Tax Returns and Payments. All tax returns and reports, including,
without limitation, all foreign returns and reports, of Be Safe required by law
to be filed have been duly filed, and all taxes, assessments, fees and other
governmental charges heretofore levied upon any properties, assets, income or
franchises of Be Safe which are due and payable have been paid, except as
otherwise reflected in the Financial Statements. No extension of time for the
assessment of deficiencies in any federal or state tax has been requested of or
granted by Be Safe.
5.10 Compliance with Law and Government Regulations. Be Safe is in
compliance with all applicable statutes, regulations, decrees, orders,
restrictions, guidelines and standards, whether mandatory or voluntary, imposed
by the United States of America, any state, county, municipality or agency of
any thereof, and any foreign country or government to which Be Safe is subject.
Without limiting the generality of the foregoing, Be Safe has filed all reports
and statements required to be filed pursuant to the Securities Act of 1933 (the
"1933 Act") and Securities Exchange Act of 1934 (the "1934 Act") including all
periodic reports required under the Section 13 or 15 of the Exchange Act. Each
of such reports was complete, did not contain any material misstatement of or
omit to state any material fact.
5.11 Books and Records. The minute books of Be Safe, all the contents
of which have been previously made available to FNDB and their representatives,
contain accurate records of all meetings of, and corporate action taken by
(including action taken by written consent) the shareholders and Board of
Directors of Be Safe. Except as set forth on Schedule 5.11 attached hereto, Be
Safe does not have any of its respective records, systems, controls, data or
information recorded, stored, maintained, operated or otherwise wholly or partly
dependent upon or held by any means (including any electronic, mechanical or
photographic process, whether computerized or not) which (including all means of
access thereto and therefrom) are not under the exclusive ownership and direct
control of Be Safe.
5.12 Title to Properties; Encumbrances.
(a) Except as set forth on Schedule 5.12 attached hereto, Be Safe
has good, valid and marketable title to (a) all of its
properties and assets (real and personal, tangible and
intangible), including, without limitation, all of the
properties and assets reflected in the balance sheet included
as part of the Financial Statements, except as indicated in
the Schedules hereto; and (b) all of the properties and assets
purchased by Be Safe since the date of the Financial
Statements all of which purchases as of a date not more than
two days prior to the date of this Agreement, have been set
forth on Schedule 5.12 attached hereto; in each case subject
to no encumbrance, lien, charge or other restriction of any
kind or character, except for (i) liens reflected in the
balance sheet, included as part of the Financial Statements;
(ii) liens consisting of zoning or planning restrictions,
easements, permits and other restrictions or limitations on
the use of real property or irregularities in title thereto
which do not materially detract from the value of, or impair
the use of, such property by Be Safe in the operation of its
business; (iii) liens for current taxes, assessments or
governmental charges or levies on property not yet due and
delinquent; and (iv) liens described on Schedule 5.12 attached
hereto (liens of the type described in clause (i), (ii) and
(iii) above are hereinafter sometimes referred to as
"Permitted Liens").
(b) The rights, properties and other assets presently owned,
leased or licensed, by Be Safe reflected on the balance sheet
included in the Financial Statements or acquired since the
date of the Financial Statement include all rights, properties
and other assets necessary to permit Be Safe to conduct its
business in the same manner as its business has heretofore
been conducted. All such properties and assets owned or leased
by Be Safe are in satisfactory condition and repair, other
than ordinary wear and tear.
No structure or improvement on the real property leased by Be
Safe, whether now existing or intended to be constructed
pursuant to existing plans and specifications, violates, or if
completed would violate, any applicable zoning or building
regulations or ordinances or similar federal, state or
municipal law.
5.13 Leases. Schedule 5.13 attached hereto, contains an accurate and
complete list and description of the terms of all leases to which either Be Safe
or any of its subsidiaries is a party (as lessee or lessor). Each lease set
forth on Schedule 5.13 (or required to be set forth on Schedule 5.13) is in full
force and effect; all rents and additional rents due to date on each such lease
have been paid; in each case, the lessee has been in peaceable possession since
the commencement of the original term of such lease and is not in default
thereunder and no waiver, indulgence or postponement of the lessee's obligations
thereunder has been granted by the lessor; and there exists no event of default
or event, occurrence, condition or act (including the consummation of the
transactions contemplated hereby) which, with the giving of notice, the lapse of
time or the happening of any further event or condition, would become a default
under such lease. Neither Be Safe nor any of its subsidiaries has violated any
of the terms or conditions under any such lease in any material respect, and, to
the best knowledge, information and belief of Be Safe, all of the covenants to
be performed by any other party under any such lease have been fully performed.
The property leased by Be Safe or any of its subsidiaries is in a state of good
maintenance and repair and is adequate and suitable for the purposes for which
it is presently being used.
5.14 Material Contracts. Except as set forth on Schedule 5.14 attached
hereto, neither Be Safe or its subsidiaries has nor is bound by:
(a) any agreement, contract or commitment relating to the
employment of any person by Be Safe or its subsidiaries, or
any bonus, deferred compensation, pension, profit sharing,
stock option, employee stock purchase, retirement or other
employee benefit plan;
(b) any agreement, indenture or other instrument which contains
restrictions with respect to payment of dividends or any other
distribution in respect of its capital stock;
(c) any loan or advance to, or investment in, any individual,
partnership, joint venture, corporation, trust, unincorporated
organization, government or other entity (each a "Person") or
any agreement, contract or commitment relating to the making
of any such loan, advance or investment;
(d) any guarantee or other contingent liability in respect of any
indebtedness or obligation of any Person (other than the
endorsement of negotiable instruments for collection in the
ordinary course of business);
(e) any management service, consulting or any other similar type
contract;
(f) any agreement, contract or commitment limiting the freedom of
Be Safe or any subsidiary to engage in any line of business or
to compete with any Person;
(g) any agreement, contract or commitment not entered into in the
ordinary course of business which involves $100,000 or more
and is not cancelable without penalty or premium within 30
days; or
(h) any agreement, contract or commitment which might reasonably
be expected to have a potential adverse impact on the business
or operations of Be Safe or any subsidiary; or
(i) any agreement, contract or commitment not reflected in the
Financial Statement under which Be Safe or any subsidiary is
obligated to make cash payments of, or deliver products or
render services with a value greater than $50,000 individually
or $100,000 in the aggregate, or receive cash payments of, or
receive products or services with a value greater than $50,000
individually or $100,000 in the aggregate, and any other
agreement, contract or commitment which is material to the
conduct of the business of Be Safe.
Each contract or agreement set forth on Schedule 5.14 (or not required
to be set forth on Schedule 5.14) is in full force and effect and there exists
no default or event of default or event, occurrence, condition or act (including
the consummation of the transactions contemplated hereby) which, with the giving
of notice, the lapse of time or the happening of any other event or condition,
would become a default or event of default thereunder. Neither Be Safe or any
subsidiary has violated any of the terms or conditions of any contract or
agreement set forth on Schedule 5.14 (or not required to be set forth on
Schedule 5.14) in any material respect, and, to the best knowledge, information
and belief of Be Safe, all of the covenants to be performed by any other party
thereto have been fully performed. Except as set forth on Schedule 5.14, the
consummation of the transactions contemplated hereby does not constitute an
event of default (or an event, which with notice or the lapse of time or both
would constitute a default) under any such contract or agreement.
5.15 Restrictive Documents. Other than as set forth on Schedule 5.15
attached hereto, neither Be Safe or any subsidiary, nor Shareholder is subject
to, or a party to, any charter, by-law, mortgage, lien, lease, license, permit,
agreement, contract, instrument, law, rule, ordinance, regulation, order,
judgment or decree, or any other restriction of any kind or character, which
could materially adversely affect the business practices, operations or
condition of Be Safe or any of its assets or property ("Be Safe's Property",
which for the purposes of this Agreement includes the assets and property of all
of Be Safe's subsidiaries), or which would prevent consummation of the
transactions contemplated by this Agreement, or the continued operation of "Be
Safe's Business" after the date hereof or the Closing Date (as hereinafter
defined) on substantially the same basis as heretofore operated or which would
restrict the ability of Be Safe to conduct business in any area.
5.16 Taxes. Except as set forth on Schedule 5.16, Be Safe and each of
its subsidiaries has filed or caused to be filed, within the times and within
the manner prescribed by law, all federal, state, local and foreign tax returns
and tax reports which are required to be filed by, or with respect to, Be Safe.
Such returns and reports reflect accurately all liability for taxes of Be Safe
for the periods covered thereby. Except as set forth on Schedule 5.16, all
federal, state, local and foreign income, profits, franchise, employment, sales,
use, occupancy, excise and other taxes and assessments, stock and transfer taxes
(including interest and penalties) payable by, or due from, Be Safe and each of
its subsidiaries, have been fully paid and fully provided for in the books and
financial statements of Be Safe. No examination of any tax return of Be Safe or
of its subsidiaries, is currently in progress. There are no outstanding
agreements or waivers extending the statutory period of limitation applicable to
any tax return of Be Safe. Schedule 5.16 attached hereto lists all tax sharing
contracts, agreements or arrangements to which Be Safe is a party and all such
contracts, agreements and arrangements have been terminated prior to the Closing
Date with no liability or obligation to Be Safe.
5.17 Liabilities. Except as set forth on Schedule 5.17, Be Safe on a
consolidated basis has no outstanding claims, liabilities or indebtedness,
contingent or otherwise, which are not properly reflected in the Financial
Statements in a manner consistently with past practice, other than liabilities
incurred subsequent to the Financial Statement date in the ordinary course of
business not exceeding $50,000 individually or $100,000 in the aggregate; the
reserves reflected in the Financial Statements are adequate, appropriate and
reasonable. Be Safe is not in default in respect of the terms or conditions of
any indebtedness.
5.18 Compliance with Laws. Neither Be Safe nor any of its subsidiaries,
nor to the knowledge of Be Safe, any officer, director or employee of Be Safe or
any of its subsidiaries is in violation of any applicable order, judgment,
injunction, award or decree, related to, arising out of or affecting the
business or operations of Be Safe or any of its subsidiaries or their respective
properties or assets. Neither Be Safe nor any of its subsidiaries, nor to the
knowledge of Be Safe, any officer, director or employee of either Be Safe or any
of its subsidiaries is in violation of any federal, state, local or foreign law,
ordinance, regulation or any other requirement of any governmental or regulatory
body, court or arbitrator (including, without limitation, laws relating to the
environment and OSHA and the Americans with Disabilities Act) other than
insignificant or immaterial violations which do not and will not adversely
affect (i) Be Safe's Business or Property; (ii) the business proposed to be
conducted by FNDB after the consummation of the transactions contemplated by
this Agreement; or (iii) the consummation of the transactions contemplated by
this Agreement. Each permit, license, order or approval of any governmental or
regulatory body or other applicable authority ("Permits") that is material to
the conduct of Be Safe's Business is in full force and effect, no violations are
or have been recorded in respect of any permit and no proceeding is pending or,
to the knowledge of Be Safe, threatened, to revoke or limit any Permit, which
revocation or limitation could have an adverse effect on Be Safe's Business or
Property or the business to be conducted by Be Safe after the consummation of
the transactions contemplated by this Agreement. Schedule 5.18 contains a list
of all Permits. Except as set forth on Schedule 5.18, no approval or consent of
any person is needed in order that the Permits continue in full force and effect
following the consummation of the transactions contemplated by this Agreement.
5.19 Employment Relations.
(a) Be Safe and each of its subsidiaries is in compliance with all
Federal, state or other applicable laws, domestic or foreign,
respecting employment and employment practices, terms and
conditions of employment and wages and hours, and has not and
is not engaged in any unfair labor practice;
(b) no unfair labor practice complaint against Be Safe or any of
its subsidiaries is currently pending before the National
Labor Relations Board nor has such a complaint been pending in
the last two years;
(c) there is no labor strike, dispute, slowdown or stoppage
actually pending or threatened against or involving Be Safe or
any of its subsidiaries nor has one existed during the last
two years;
(d) no representation question exists respecting the employees of
Be Safe or any of its subsidiaries;
(e) no grievance which might have an adverse effect upon Be Safe
or any of its subsidiaries or the conduct of Be Safe's
Business exists, no arbitration proceeding arising out of or
under any collective bargaining agreement is pending and no
claim therefor has been asserted;
(f) Neither Be Safe nor any of its subsidiaries is a party to, nor
does there otherwise exist, any union, collective bargaining
agreement or similar agreement with respect to the employees
of Be Safe or any of its subsidiaries and no collective
bargaining agreement or similar agreement is currently being
negotiated by Be Safe or any of its subsidiaries; and
(g) Neither Be Safe nor any of its subsidiaries has experienced
any labor difficulty during the last two years. There has not
been any adverse change in relations with employees of Be Safe
or any of its subsidiaries as a result of any announcement of
the transactions contemplated by this Agreement.
5.20 Employee Benefit Plans.
(a) Schedule 5.20 contains a true and complete list and accurate
description of each employee welfare benefit plan (an
"Employee Welfare Plan"), as defined in Section 3(1) of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA"), maintained currently or at any time by Be Safe or
any other organization which as of the Closing Date is a
member of a controlled group of organizations within the
meaning of Section 414(b), (c), (m) or (o) of the Internal
Revenue Code of 1986, as amended, (the "Code"), of which Be
Safe is a member (an "ERISA Affiliate"), or to which Be Safe
or any ERISA Affiliate contributes or is required to
contribute or contributed or was required to contribute at any
time. Schedule 5.20 contains a true and complete list and
accurate description of each employee pension benefit plan, as
defined in Section 3(2) of ERISA (an "Employee Pension Plan"),
maintained currently or at any time by FNDB or any ERISA
affiliate or to which Be Safe or any ERISA Affiliate
contributes or is required to contribute or contributed or was
required to contribute at any time. The Employee Welfare
Plans, the Employee Pension Plans and the other plans listed
on Schedule 5.20 are collectively referred to herein as the
"Plans." Neither Be Safe nor any ERISA Affiliate has
maintained at any time, nor does it contribute to or has it
contributed to or is or was required to contribute to: (i) any
multi-employer plan (as defined in Section 3(37) of ERISA); or
(ii) any funded or unfunded medical, health or life insurance
plans or arrangements for current or future retirees or
terminated employees.
(b) With respect to each current Plan, FNDB has been provided
heretofore with true and complete copies of: (i) all Plan
documents and all documents or instruments establishing or
constituting any related trust, annuity contract or other
funding instrument, and any amendments thereto; (ii) the most
recent determination letter received from the IRS; (iii) the
most recent financial statement; (iv) the most recent IRS Form
5500; and (v) written descriptions of all non-written
agreements relating to the Plans. All current Plans, all Plan
documents and all documents or instruments establishing or
constituting any related trust, annuity contract or other
funding instrument, and any amendments thereto, comply in all
material respects with the provisions of ERISA and the Code
and applicable laws, rules and regulations. All necessary
governmental approvals for all current Plans have been
obtained and favorable determinations as to the qualification
under the Code of each of the current Plans, and for any Code
Section 501(c)(9) trust maintained in connection with any
current Employee Welfare Plan, and each amendment thereto,
have been made by the IRS, or have been applied for and no
event has occurred and no facts or circumstances exist that
may cause the loss of any such qualification or may cause any
such application to be denied.
(c) Except as set forth on Schedule 5.20, the administration of
all Plans has been consistent with, and in compliance in all
material respects with, applicable requirements of the Code
and ERISA, including, without limitation, compliance on a
timely basis with all requirements for reporting, disclosure
and requirements for the continuation of group health
insurance. Neither Be Safe, any ERISA Affiliate nor any Plan
fiduciary (as defined in Section 3(21) of ERISA), with respect
to any Plan, has engaged in any transaction or acted or failed
to act in any manner that violates Section 404 or 406 of ERISA
or engaged in any prohibited transaction (as defined in
Section 4975(c)(1) of the Code) for which there exists neither
a statutory nor regulatory exemption or for which an exemption
has not been obtained. All obligations required to be
performed by Be Safe or any ERISA Affiliate under each Plan
have been performed, and Be Safe is not in violation of the
terms of any Plan, nor does Be Safe have any knowledge of any
existing violation by any other party of any term or
requirement of or applicable to any current Plan. All
contributions required by law to have been made under any
Plan, or to any trusts or funds established thereunder or in
connection therewith, have been made by the due dates thereof
(including any valid extensions).
(d) No claims, suits or other proceedings are pending or
threatened, and no facts or circumstances exist that could
provide a basis for any such claim, suit or other proceeding,
by Be Safe's or any ERISA Affiliate's current or former
employees, any participant (as defined in Section 3(7) of
ERISA) to any Plan maintained at any time by Be Safe or any
ERISA Affiliate to which Be Safe contributes or has
contributed or is or was required to contribute, any fiduciary
of any Plan, any beneficiary (as defined in Section 3(8) of
ERISA) of any such person or by any governmental body, agency
or instrumentality thereof relating to or affecting any Plan,
other than usual and ordinary claims for benefits by eligible
persons. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby
will constitute: (i) a termination of employment or other
event entitling any person to any additional or other
benefits, or that would otherwise modify any benefits or the
vesting of any benefits, under any Plan maintained at any time
by Be Safe or any ERISA affiliate, or to which Be Safe or any
ERISA Affiliate contributes or has contributed or is or was
required to contribute; or (ii) a violation of Section 404 or
406 of ERISA or a prohibited transaction (as defined in
Section 4975(c)(1) of the Code) for which there exists neither
a statutory nor regulatory exemption or for which an exemption
has not been obtained.
(e) Neither Be Safe nor any ERISA Affiliate maintains any Plans
that are subject to the requirements of Section 412 of the
Code.
5.21 Environmental Laws and Regulations.
(a) Neither Be Safe nor any of its subsidiaries has generated,
transported or disposed of any hazardous material (defined
below) during the past three years.
(b) Neither Be Safe nor any of its subsidiaries has Hazardous
Materials at any site or facility owned or operated presently
or at any previous time by Be Safe or any of its subsidiaries.
Be Safe and its subsidiaries are in compliance in all material respects
with all applicable federal, state and local laws and regulations relating to
product registration, pollution control and environmental contamination
including, but not limited to, all laws and regulations governing the
generation, use, collection, discharge, or disposal of Hazardous Materials and
all laws and regulations with regard to record keeping, notification and
reporting requirements respecting Hazardous Materials. Neither Be Safe nor any
of its subsidiaries has been alleged to be in violation of, and has not been
subject to any administrative or judicial proceeding pursuant to, such laws or
regulations either now or any time during the past three years. There are no
facts or circumstances which Be Safe reasonably expects could form the basis for
the assertion of any Environmental Claim (as defined below) against Be Safe or
any of its subsidiaries relating to environmental matters including, but not
limited to, any Environmental Claim arising from past or present environmental
practices asserted under CERCLA (as defined below) and RCRA (as defined below),
or any other federal, state or local environmental statute, which Be Safe
believes might have an adverse effect on the business, results of operations,
financial condition or prospects of Be Safe and its subsidiaries taken as a
whole.
For purposes of this Section 5.21, the following terms shall have the
following meanings: (A) "Hazardous Materials" shall mean materials defined as
"hazardous substances", "hazardous wastes" or "solid wastes" in (i) the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. xx.xx. 9601--5657, and any amendments thereto ("CERCLA"); (ii) the
Resource Conservation and Recovery Act, 42 U.S.C. ss.ss.6901-6987 and any
amendments thereto ("RCRA"); and (iii) any similar federal, state or local
environmental statute; and (B) "Environmental Claim" shall mean any and all
claims, demands, causes of actions, suits, proceedings, administrative
proceedings, losses, judgments, decrees, debts, damages, liabilities, court
costs, attorneys' fees and any other expenses incurred, assessed or sustained by
or against Be Safe.
5.22 Interests in Clients, Suppliers, Etc. At closing and in accordance
with the respective employment agreement, except as set forth on Schedule 5.22
attached hereto, as of the date of closing no officer or director of Be Safe or
any of its subsidiaries possesses, directly or indirectly, any financial
interest in, or is a director, officer or employee of, any corporation, firm,
association or business organization which is a client, supplier, customer,
lessor, lessee, or competitor or potential competitor of Be Safe. Ownership of
securities of a company whose securities are registered under the Securities
Exchange Act of 1934, as amended, not in excess of 1% of any class of such
securities shall not be deemed to be a financial interest for purposes of this
Section 4.22.
5.23 Broker's or Finder's Fees. No agent, broker, person or firm acting
on behalf of Be Safe is, or will be, entitled to any commission or broker's or
finder's fees from FNDB or from any Person controlling, controlled by or under
common control with any of the parties hereto, in connection with any of the
transactions contemplated herein.
ARTICLE 6
CONDITIONS TO BE SAFE'S OBLIGATIONS
The exchange of the FNDB Shares by Be Safe on the Closing Date is
conditioned upon satisfaction, on or prior to such date, of the following
conditions:
6.1 Good Standing and Other Certificates. FNDB shall have delivered to
Be Safe:
(a) copies of certificates of incorporation, all amendments
thereto, in each case certified by the Secretary of State or
other appropriate official of its jurisdiction of
incorporation;
(b) a certificate from the Secretary of State or other appropriate
official of their respective jurisdictions of incorporation to
the effect that FNDB is in good standing or subsisting in such
jurisdiction and listing all charter documents including all
amendments thereto, on file;
(c) a copy of the bylaws each of FNDB, certified by the Secretary
as being true and correct and in effect on the Closing Date.
(d) a resolution of FNDB's Board of Directors certified by their
respective Secretary approving the transactions contemplated
hereby and authorizing the President and Secretary of each
entity to execute this Agreement and all documents necessary
to consummate the sale of the Shares.
6.2 Officer Certificate. FNDB shall deliver to Be Safe a certificate of
its President stating the following:
(a) Certain Agreements. Except as listed on Schedule 4.7 hereto
there are no management or consulting agreements with any
third parties to provide these services to FNDB or any of its
subsidiaries.
(b) No Material Adverse Change. Prior to the Closing Date, there
shall be no material adverse change in the assets or
liabilities, the business or condition, financial or
otherwise, the results of operations, or prospects of FNDB or
any of its subsidiaries, whether as a result of any
legislative or regulatory change, revocation of any license or
rights to do business, fire, explosion, accident, casualty,
labor trouble, flood, drought, riot, storm, condemnation or
act of God or other public force or otherwise.
(c) Truth of Representations and Warranties. The representations
and warranties of FNDB contained in this Agreement or in any
Schedule attached hereto shall be true and correct on and as
of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such
date.
(d) Performance of Agreements. All of the agreements of each of
FNDB or any of its subsidiaries to be performed on or before
the Closing Date pursuant to the terms hereof shall have been
duly performed.
(e) No Litigation Threatened. No action or proceedings shall have
been instituted or threatened before a court or other
government body or by any public authority to restrain or
prohibit any of the transactions contemplated hereby.
6.3 Chief Financial Officer's Letter. Be Safe shall have received a
letter, dated the Closing Date, from FNDB's Chief Financial Officer, in form and
substance satisfactory to them, to the effect set forth in Exhibit 2 attached
hereto.
6.4 Governmental Approvals. Except with respect to telecommunications
licenses, all governmental and other consents and approvals, if any, necessary
to permit the consummation of the transactions contemplated by this Agreement
shall have been received.
6.5 Proceedings. All proceedings to be taken in connection with the
transactions contemplated by this Agreement and all documents incident thereto
shall be satisfactory in form and substance to Be Safe and their counsel, and Be
Safe shall have received copies of all such documents and other evidences as
they or their counsel may reasonably request in order to establish the
consummation of such transactions and the taking of all proceedings in
connection therewith.
6.6 Audited Financial Statements. The completion and delivery of FNDB's
financial statements together with an unqualified auditors report (except as to
going concern).
6.7 Closing. The transactions contemplated by this Agreement shall have
been consummated by November 30, 2001 or as soon thereafter as is reasonably
possible, but no later than December 15, 2001.
ARTICLE 7
CONDITIONS TO THE OBLIGATIONS OF
THE SHAREHOLDERS AND FNDB
The obligations of the Shareholders and FNDB on the Closing Date are
conditioned upon satisfaction, on or prior to such date, of the following
conditions:
7.1 Opinion of Be Safe's Counsel. Be Safe shall have furnished the
Shareholders and FNDB with an opinion, dated the Closing Date, of Xxxxxx &
Xxxxxxxxx LLP; to the effect set forth in Exhibit 4 attached hereto.
7.2 Good Standing Certificates. Be Safe shall have delivered to the
Shareholders:
(a) copies of the Articles of Incorporation of Be Safe, including
all amendments thereto, certified by the Secretary of State of
the State of Delaware;
(b) certificates from the Secretary of State of the State of
Delaware to the effect that Be Safe is in good standing in
such State and listing all charter documents, including all
amendments thereto, of Be Safe on file; and
(c) a resolution of Be Safe's Board of Directors certified by its
Secretary, approving the transactions contemplated hereby and
authorizing the President and Secretary of each entity to
execute this Agreement and all documents necessary to
consummate the sale of the Shares.
7.3 Truth of Representations and Warranties. The representations and
warranties of Be Safe contained in this Agreement shall be true and correct on
and as of the Closing Date with the same effect as though such representations
and warranties had been made on and as of such date, and Be Safe shall have
delivered to FNDB an officer's certificate, dated the Closing Date, stating the
following:
(a) Certain Agreements. Except as listed on schedules hereto there
are no management or consulting agreements with any third
parties to provide these services to Be Safe or any of its
subsidiaries.
(b) No Material Adverse Change. Prior to the Closing Date, there
shall be no material adverse change in the assets or
liabilities, the business or condition, financial or
otherwise, the results of operations, or prospects of Be Safe
or any of its subsidiaries, whether as a result of any
legislative or regulatory change, revocation of any license or
rights to do business, fire, explosion, accident, casualty,
labor trouble, flood, drought, riot, storm, condemnation or
act of God or other public force or otherwise.
(c) Truth of Representations and Warranties. The representations
and warranties of Be Safe contained in this Agreement or in
any Schedule attached hereto shall be true and correct on and
as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such
date.
(d) Performance of Agreements. All of the agreements of each of Be
Safe or any of its subsidiaries to be performed on or before
the Closing Date pursuant to the terms hereof shall have been
duly performed.
(e) No Litigation Threatened. No action or proceedings shall have
been instituted or threatened before a court or other
government body or by any public authority to restrain or
prohibit any of the transactions contemplated hereby.
7.4 Governmental Approvals. All governmental consents and approvals, if
any, necessary to permit the consummation of the transactions contemplated by
this Agreement shall have been received.
7.5 Performance of Agreements. All of the agreements of Be Safe to be
performed on or before the Closing Date pursuant to the terms hereof shall have
been duly performed, and Be Safe shall have delivered to FNDB a certificate,
dated the Closing Date, to such effect.
7.6 Proceedings. All proceedings to be taken in connection with the
transactions contemplated by this Agreement and all documents incident thereto
shall be reasonably satisfactory in form and substance to FNDB and its counsel,
and FNDB shall have received copies of all such documents and other evidences as
they or their counsel may reasonably request in order to establish the
consummation of such transactions and the taking of all proceedings in
connection therewith.
7.7 Board Representation. At Closing, or as soon thereafter as is
reasonably practicable, Xxxxxx Xxxxx, Xxxxxxxx XxXxxxxx and Xxxxxx Xxxxxx shall
resign from the Board of Directors of Be Safe, after nominating Xxxxx X. Xxxxxx
as a director.
7.8 Closing. The transactions contemplated by this Agreement shall have
been consummated by November 30, 2001 or as soon thereafter as is reasonably
possible, but no later than December 15, 2001.
ARTICLE 8
SURVIVAL OF REPRESENTATIONS
The respective representations, warranties, covenants and agreements of
the Shareholders, FNDB and Be Safe contained in this Agreement, or any Schedule
attached hereto or any agreement or document delivered pursuant to this
Agreement shall survive for a period of one year from the consummation of the
transactions contemplated hereby; provided, however, that the representations,
warranties and agreements made with regard to taxes and ERISA matters shall
survive until the applicable statutes of limitations have expired; and provided
further, however, that with respect to any covenant, term or provision to be
performed hereunder or in any of the Schedules hereto or any documents or
agreements delivered hereunder, the right of indemnification under this Article
8 shall survive until such covenant, term or provision has been fully paid,
performed or discharged.
ARTICLE 9
MISCELLANEOUS
9.1 Knowledge of the Shareholders, FNDB or Be Safe. Where any
representation or warranty contained in this Agreement is expressly qualified by
reference to the knowledge, information and belief of the Shareholders, FNDB or
Be Safe and the Shareholders and Be Safe, as the case may be, confirm that they
have made due and diligent inquiry as to the matters that are the subject of
such representations and warranties.
9.2 Expenses. The parties hereto shall pay all of their own expenses
relating to the transactions contemplated by this Agreement, including, without
limitation, the fees and expenses of their respective counsel and financial
advisers.
9.3 Governing Law. The interpretation and construction of this
Agreement, and all matters relating hereto, shall be governed by the laws of the
State of Florida applicable to agreements executed and to be performed solely
within such State without regard to conflicts of laws.
9.4 Jurisdiction. Any judicial proceeding brought against any of the
parties to this Agreement on any dispute arising out of this Agreement or any
matter related hereto may be brought in the courts of the State of Florida, or
in the United States District Court for the Tampa, Florida area, and, by
execution and delivery of this Agreement, each of the parties to this Agreement
accepts the exclusive jurisdiction of such courts, and irrevocably agrees to be
bound by any judgment rendered thereby in connection with this Agreement. The
prevailing party or parties in any such litigation shall be entitled to receive
from the losing party or parties all costs and expenses, including reasonable
counsel fees, incurred by the prevailing party or parties.
9.5 Captions. The Article and Section captions used herein for
reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement.
9.6 Publicity. Except as otherwise required by law, none of the parties
hereto shall issue any press release or make any other public statement, in each
case relating to, connected with or arising out of this Agreement or the matters
contained herein, without obtaining the prior approval of Be Safe and FNDB to
the contents and the manner of presentation and publication thereof. The parties
hereto agree that the execution of this Agreement requires the release of
information to the financial press concerning this acquisition and accordingly
agree to promptly issue a press release mutually acceptable to FNDB and Be Safe
and to file a Form 8-K report and a 14(f)1 with the Securities and Exchange
Commission containing this agreement and all exhibits and schedules hereto.
9.7 Notices. Any notice or other communication required or permitted
hereunder shall be deemed sufficiently given when delivered in person, one
business day after delivery to a reputable overnight carrier, four business days
if delivered by registered or certified mail, postage prepaid or when sent by
telecopy with a copy following by hand or overnight carrier or mailed, certified
or registered mail, postage prepaid, addressed as follows:
If to Be Safe:
Be Safe Services, Inc. Telephone: (000) 000-0000
Attn: Xxxxxx Xxxxx Facsimile: (000) 000-0000
00-00 Xxxxxxxxx Xxxxxxxxx
Xxxx Xxxx, XX 00000
with a required copy to:
Xxxx X. Xxxxxxxxx, Esq. Telephone: (000) 000-0000
Xxxxxx & Xxxxxxxxx LLP Facsimile: (516) 228-8211
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
If to FNDB:
First National Data Bank, Inc. Telephone: (000) 000-0000
Attn: Xxxxx Xxxxxxx, COO Facsimile: (727) 258-0040
000 Xxxxxxx Xxxxxx
Xxxx Xxxxxx, XX 00000
9.8 Parties in Interest. This Agreement may not be transferred,
assigned, pledged or hypothecated by any party hereto, other than by operation
of law. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs, executors, administrators,
successors and assigns.
9.9 Counterparts. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.
9.10 Entire Agreement. This Agreement, including the Schedules hereto
and the other documents referred to herein which form a part hereof, contain the
entire understanding of the parties hereto with respect to the subject matter
contained herein and therein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
9.11 Amendments. This Agreement may not be changed orally, but only by
an agreement in writing signed by Be Safe, the Shareholders and FNDB.
9.12 Severability. In case any provision in this Agreement shall be
held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby.
9.13 Third Party Beneficiaries. Each party hereto intends that this
Agreement shall not benefit or create any right or cause of action in or on
behalf of any Person other than the parties hereof.
9.14 Cooperation After Closing.From and after the Closing Date, each of
the parties hereto shall execute such documents and other papers and take such
further actions as may be reasonably required or desirable to carry out the
provisions hereof and the transactions contemplated hereby.
ARTICLE 10
COVENANTS
10.1 Access to Information. Each of FNDB and Be Safe agrees that, prior
to the Closing Date, the other party hereto shall be entitled, through its
officers, employees and representatives (including, without limitation, its
legal and financial advisors and accountants), to make such investigation of the
properties, businesses and operations of FNDB or Be Safe and their respective
subsidiaries, as applicable, and such examination of the books, records and
financial condition of FNDB or Be Safe (and their respective subsidiaries), as
applicable, as such other party reasonably requests and to make copies of such
books and records. Any such investigation and examination shall be conducted
during regular business hours and under reasonable circumstances, and each of
FNDB and Be Safe shall cooperate, and shall cause their respective subsidiaries
to cooperate, fully therein. No investigation by FNDB or Be Safe prior to or
after the date of this Agreement shall diminish or obviate any of the
representations, warranties, covenants or agreements of the other party thereto
contained in this Agreement or any other agreements or certificates in
connection with the transactions contemplated by this Agreement. In order that
each of Be Safe and FNDB may have full opportunity to make such physical,
business, accounting and legal review, examination or investigation as it may
reasonably request of the affairs of FNDB or Be Safe (and their respective
subsidiaries), as applicable, FNDB and Be Safe shall cause the officers,
employees, consultants, agents, accountants, attorneys and other representatives
of FNDB or Be Safe, as applicable, to cooperate fully with such representatives
in connection with such review and examination.
10.2 Conduct of Be Safe's and FNDB's Respective Businesses Pending the
Closing.
(a) Prior to the Closing Date, except as otherwise expressly
contemplated by this Agreement, FNDB and each of its
subsidiaries shall and Be Safe shall, and shall cause its
subsidiaries to:
(i) conduct its business only in the ordinary course
consistent with past practice;
(ii) use its best efforts to (A) preserve its present
business operations, organization (including, without
limitation, management and the sales force) and
goodwill, (B) preserve its present relationship with
Persons having business dealings with it ;
(iii) maintain (A) all its assets and properties in their
current condition, ordinary wear and tear excepted,
and (B) insurance upon all of its properties and
assets in such amounts and of such kinds comparable
to that in effect on the date of this Agreement;
(iv) (A) maintain its books, accounts and records in the
ordinary course of business consistent with past
practices, (B) continue to collect accounts
receivable and pay accounts payable utilizing normal
procedures and without discounting or accelerating
payment of such accounts (other than in the ordinary
course of business), and (C) comply with all
contractual and other obligations applicable to its
operations; and
(v) comply in all material respects with applicable Laws.
(b) Prior to the Closing Date, except as otherwise expressly
contemplated by this Agreement, FNDB and each of its
subsidiaries shall not and Be Safe shall not, and shall cause
its subsidiaries not to:
(i) declare, set aside, make or pay any dividend or other
distribution in respect of its capital stock;
(ii) (a) in the case of Be Safe, transfer, issue
(except issuances of shares upon the
exercise of outstanding warrants, options
and convertible debentures), sell or dispose
of any shares of its capital stock or other
securities of itself or its subsidiaries or
grant options, warrants, calls or other
rights to purchase or otherwise acquire
shares of the capital stock or other
securities of itself or any of its
subsidiaries;
(b) in the case of FNDB, issue, sell or dispose
of any shares of its capital stock or other
securities of itself or its subsidiaries, or
grant options, warrants, calls or other
rights to purchase any capital stock of
itself or any of its subsidiaries.
(iii) effect any recapitalization, reclassification, stock
split or like change in its capitalization except, in
the case of Be Safe, as is required pursuant to this
Agreement or authorize the issuance of the Shares
(including securities convertible into shares of Be
Safe Stock);
(iv) amend its certificate of incorporation, by-laws,
memorandum or articles of association or similar
organizational documents;
(v) (A) materially increase the annual level of
compensation of any employee, (B) increase the annual
level of compensation payable or to become payable by
it or any of its subsidiaries to any of their
respective executive officers, (C) grant any bonus,
benefit or other direct or indirect compensation to
any employee, director or consultant, other than in
the ordinary course consistent with past practice,
(D) increase the coverage or benefits available under
any (or create any new) severance pay, termination
pay, vacation pay, company awards, salary
continuation for disability, sick leave, deferred
compensation, bonus or other incentive compensation,
insurance, pension or other employee benefit plan or
arrangement made to, for, or with any of its or its
subsidiaries' directors, officers, employees, agents
or representatives or otherwise modify or amend or
terminate any such plan or arrangement;
(vi) except (A) for trade payables and (B) for pledges of
assets and indebtedness for borrowed money which do
not exceed, individually or in the aggregate,
$100,000 (it being understood that(1) such amount
shall not include indebtedness existing or assets
pledged prior to the date of this Agreement and (2)
the transaction value of any asset pledges shall be
deemed to be equal to the fair market value of the
assets pledged in such transaction), borrow monies of
any reason or draw down on any line of credit or debt
obligation, or become the guarantor, surety, endorser
or otherwise liable for any debt, obligation or
liability (contingent or otherwise) of any other
Person;
(vii) except as may be permitted pursuant to clause (vi)
above, subject to any lien (except for leases that do
not materially impair the use of the property subject
thereto in their respective businesses as presently
conducted and in the ordinary course of business),
any of its properties or assets (whether tangible or
intangible);
(viii) acquire any material properties or assets or sell,
assign, transfer, convey, lease or otherwise dispose
of any material properties or assets, or its rights
to any of the foregoing (except for fair
consideration in the ordinary course of business
consistent with past practice);
(ix) cancel or compromise any debt or claim or waive or
release any material right except in the ordinary
course of business consistent with past practice;
(x) enter into any commitment for capital expenditures in
excess of $50,000 for any individual commitment and
$100,000 for all commitments in the aggregate;
(xi) enter into, modify or terminate any labor or
collective bargaining agreement or, through
negotiation or otherwise, make any commitment or
incur any liability to any labor organization;
(xii) enter into any transaction or make or enter into any
Contract which by reason of its size or otherwise is
not in the ordinary course of business consistent
with past practice.
(xiii) transfer any funds or assets to any of its officers
and directors, which funds and assets are, in the
aggregate, worth in excess of $25,000, except for the
purchase of goods and services from any such officer
or director in the ordinary course of business at the
fair market value for such goods and services;
(xiv) agree to do anything prohibited by this Section 10.2
or anything which would make any of the
representations and warranties of Be Safe or the FNDB
in this Agreement or Be Safe Documents or FNDB
Documents untrue or incorrect in any material respect
as of any time through and including the Closing
Date.
10.3 Consents and Approvals.
(a) FNDB and Be Safe shall use their respective best efforts, and
shall cooperate with each other, to obtain at the earliest
practicable date all consents and approvals required to
consummate the transactions contemplated by this Agreement;
provided, however, that neither FNDB nor Be Safe shall be
obligated to pay any consideration (except for filing fees)
therefor to any third party from whom consent or approval is
requested.
(b) Promptly following the date of this Agreement, Be Safe shall
prepare and file with the Securities and Exchange Commission
an information statement pursuant to Regulation 14f-1 under
the Securities Exchange Act of 1934 (such information
statement, as amended or supplemented from time to time, being
hereinafter referred to as the "Information Statement"), and
shall use its best efforts to cause the Information Statement
to be mailed to its stockholders at such time and in such
manner as permits the notification to be sent as promptly as
practicable. FNDB shall furnish all information as may be
reasonably requested by Be Safe and, in any case, as required
with respect to Be Safe by Regulation 14f-1 under the
Securities Exchange Act of 1934, as amended, for inclusion in
the Information Statement. The information provided by Be Safe
and FNDB, respectively, for use in the Information Statement
shall, on the date when the Information Statement is first
mailed to Be Safe's stockholders, be true and correct in all
material respects and shall not omit to state any material
fact required to be stated therein or necessary in order to
make the statements contained therein not misleading, and Be
Safe and FNDB each agree to promptly correct any information
provided by it for use in the Information Statement which
shall have become false or misleading.
(c) Be Safe shall notify its shareholders that the Board of
Directors have approved the change of control. The Information
Statement shall comply as to form in all material respects
with all applicable requirements of the Securities Exchange
Act of 1934, as amended, and no amendment or supplement to the
Information Statement shall be made by Be Safe without the
prior written approval of FNDB unless Be Safe determines such
amendment or supplement is required by law.
10.4 Other Actions. Each of FNDB and Be Safe shall use its best efforts
to (i) take all actions necessary or appropriate to consummate the transactions
contemplated by this Agreement and (ii) cause the fulfillment at the earliest
practicable date of all of the conditions to their respective obligations to
consummate the transactions contemplated by this Agreement.
10.5 Publicity. Neither FNDB nor Be Safe shall issue any press release
or public announcement concerning this Agreement or the transactions
contemplated hereby without obtaining the prior written approval of the other
party hereto, which approval will not be unreasonably withheld or delayed,
unless, in the sole judgment of Be Safe or FNDB, disclosure is otherwise
required by applicable Law or by the applicable rules of any stock exchange on
which Be Safe or FNDB (or any Affiliates thereof) lists securities; provided
that, to the extent required by applicable Law, the party intending to make such
release shall use commercially reasonable efforts consistent with such
applicable Law to consult wit the other party with respect to the text thereof.
10.6 Tax and Accounting Matters. Within 10 days following the date
hereof, FNDB will deliver to Be Safe (i) the Interim Statements, together with
an qualified audit report thereon by FNDB's independent public accountants and
(ii) an audited pro forma balance sheet of FNDB as of September 30, 2001 after
giving effect to the transactions contemplated by this Agreement.
[SIGNATURE PAGES TO FOLLOW]
IN WITNESS WHEREOF, each of Be Safe, the Shareholders and FNDB have
executed this Agreement, all as of the day and year first above written.
BE SAFE SERVICES, INC.
By: /s/ Xxxxxx Xxxxx
---------------------------
Xxxxxx Xxxxx
President and Director
FIRST NATIONAL DATA BANK, INC.
By: /s/ Xxxxx X. Xxxxxx
---------------------------
Xxxxx X. Xxxxxx
President and Director
THE PRINCIPAL SHAREHOLDERS: No. of Shares of FNDB
-------------------------- ---------------------
/s/ Xxxxx X. Xxxxxx 1,350,000
-----------------------------------------
Xxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxxx 1,071,500
-----------------------------------------
Xxxxx X. Xxxxxxx
TBC Investments, Inc.
By: /s/ Xxxxxx Xxxxxxx 750,000
------------------------------------
Xxxxxx Xxxxxxx
Its President
/s/ Xxxxx Xxxxxx 450,000
-----------------------------------------
Xxxxx Xxxxxx
THE PRINCIPAL SHAREHOLDERS: No. of Shares of FNDB
-------------------------- ---------------------
Premier Ventures, Inc.
By: /s/ D. Xxxxx Xxxxxxx 300,000
------------------------------------
D. Xxxxx Xxxxxxx
Its President
BKR Investments, Inc.
By: /s/ Xxxxxxx Xxxxxxx 100,000
------------------------------------
Xxxxxxx Xxxxxxx
Its President
Daedalus Consulting, Inc.
By: /s/ Xxxx X. Xxxxx 100,000
------------------------------------
Xxxx X. Xxxxx
Its President
Deer in the Headlights Graphics, Inc.
By: /s/ Deecembra Xxxxxxx 300,000
-------------------------------------
Deecembra Xxxxxxx
Its President
Soho Transportation, Inc.
By: /s/ Xxxxxxx Xxxxxxx 250,000
-------------------------------------
Xxxxxxx Xxxxxxx
Its President
/s/ Xxxxx Xxxxxx 554,200
-----------------------------------------
Xxxxx Xxxxxx
THE SHAREHOLDERS: No. of Shares of FNDB
---------------- ---------------------
/s/ Xxxxxxx Xxxxxxxx 55,000
-----------------------------------------
Xxxxxxx Xxxxxxxx
/s/ Xxxxxx Rule 255,000
-----------------------------------------
Xxxxxx Rule
/s/ Xxxxxx Xxxxx 20,000
-----------------------------------------
Xxxxxx Xxxxx
/s/ Xxxxxx X. Xxxxxxxx 16,000
-----------------------------------------
Xxxxxx X. Xxxxxxxx
Vision Technologies, Inc.
By: /s/ Xxxxxx Rule 2,800
------------------------------------
Xxxxxx Rule
Its President
/s/ Xxxxxx Xxxxx 250,000
-----------------------------------------
Xxxxxx Xxxxx
L2 Technologies, Inc.
By: /s/ Xxxxx Xxxxxxx 20,000
-------------------------------------
Xxxxx Xxxxxxx
Its President
Vision Multimedia Solutions, Inc.
By: /s/ Xxxxxx Rule 10,000
------------------------------------
Xxxxxx Rule
Its President
/s/ Xxxxx X. Xxxxx 10,000
-----------------------------------------
Xxxxx X. Xxxxx
THE SHAREHOLDERS: No. of Shares of FNDB
---------------- ---------------------
/s/ Xxxxxx X. Xxxx 32,000
-----------------------------------------
Xxxxxx X. Xxxx
/s/ Xxxxxxx Xxxx 10,000
-----------------------------------------
Xxxxxxx Xxxx
/s/ Xxxxx X. Xxxxxx 10,000
-----------------------------------------
Xxxxx X. Xxxxxx
/s/ Xxxx X. Xxxxxx 20,000
-----------------------------------------
Xxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxxxx 10,000
-----------------------------------------
Xxxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxxx 18,000
-----------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxx Xxxxxxxxxx 2,000
-----------------------------------------
Xxxx Xxxxxxxxxx
/s/ A Xxxxx Xxxxx 1,000
-----------------------------------------
A. Xxxxx Xxxxx
/s/ Xxxxx X. Xxxxx 1,000
-----------------------------------------
Xxxxx X. Xxxxx
/s/ Xxxx X. Xxxxxxx 1,000
-----------------------------------------
Xxxx X. Xxxxxxx
THE SHAREHOLDERS: No. of Shares of FNDB
---------------- ---------------------
/s/ Xxxxx X. Xxxxxx 1,000
-----------------------------------------
Xxxxx X. Xxxxxx
/s/ Xxxxxx X. Rule and Xxxxxx X. Rule 1,000
-----------------------------------------
Xxxxxx X. Rule and Xxxxxx X. Rule
/s/ Xxxxxxx Xxxxxx 2,000
-----------------------------------------
Xxxxxxx Xxxxxx
/s/ Xxxxx XxXxxxx 2,000
-----------------------------------------
Xxxxx XxXxxxx
