AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of September 20, 1999, by and among
Infinite Technology Information Services, Inc., a New York Corporation (the
"COMPANY"), Mercury Internet Services, Inc., a New York corporation and wholly
owned subsidiary of Parent (the "PURCHASER"), and Infinite Technology Group
Ltd., a New York corporation (the "PARENT").
WHEREAS, the Board of Directors of the Company, Purchaser and Parent have
each determined that it is in the best interests of their respective
stockholders for the Purchaser to acquire the Company upon the terms and subject
to the conditions set forth herein;
WHEREAS, in furtherance of such acquisition, the Board of Directors of the
Company, Purchaser and Parent have each approved the merger of the Company with
and into the Purchaser (the "MERGER"), in accordance with the New York Business
Corporation Law (the "NYBCL") and upon the terms and subject to the conditions
set forth herein;
WHEREAS, all of the issued and outstanding shares of stock of any class of
the Company consists of One Hundred and Fifty (150) shares of Common Stock, no
par value, (the "ISSUED COMPANY SHARES") which are owned and of record by the
persons named on Schedule A hereto (the "COMPANY SHAREHOLDERS");
WHEREAS, it is the intent of this Agreement that the Merger of the Company
with and into the Purchaser constitute a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended; and
WHEREAS, the Company Shareholders have voted a majority of the Issued
Company Shares in favor of the approval of this Agreement and the transactions
contemplated hereby, including the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby, the
Purchaser, the Company and the Parent hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01 THE MERGER. Upon the terms and subject to the conditions
hereof, and in accordance with the NYBCL, the Company shall be merged with and
into the Purchaser simultaneously with the Parent's consummation of its initial
public offering of its securities (the "IPO"). Following the Merger, the
Purchaser shall continue as the surviving corporation and the separate corporate
existence of the Company shall cease.
SECTION 1.02 EFFECTIVE TIME. Subject to Section 1.01, the Merger shall
become effective upon filing with the New York Secretary of State of a
Certificate of Merger executed in accordance with the relevant provisions of the
NYBCL (the time the Merger becomes effective is referred to herein as the
"EFFECTIVE TIME").
SECTION 1.03 EFFECTS OF THE MERGER. The Merger shall have the effects set
forth in the NYBCL. Without limitation, upon the effectiveness of the Merger:
(a) the separate existence of the Company shall cease; (b) the Purchaser as the
surviving corporation shall possess all of the rights, privileges, powers,
immunities, purposes and franchises, both public and private, of each of the
Company and the Purchaser; (c) all real and personal property, tangible and
intangible, of every kind and description belonging to the Company and the
Purchaser shall be vested in the Purchaser as the surviving corporation without
further act or deed, and the title to any real estate or any interest therein
vested in either the Company or the Purchaser shall not revert or in any way be
impaired by reason of the Merger; (d) the Purchaser as the surviving corporation
shall be liable for all the obligations and liabilities of each of the Company
and the Purchaser, and any claim existing or action or proceeding pending by or
against either the Company or the Purchaser may be enforced against the
Purchaser as if the Merger had not taken place; and (e) neither the rights of
creditors nor any liens upon or security interests in the property of either the
Company or the Purchaser shall be impaired by the Merger.
SECTION 1.04 CERTIFICATE OF INCORPORATION AND BY-LAWS. Without further
action by the Company or the Purchaser, the Certificate of Incorporation and
By-laws of the Purchaser as in effect at the Effective Time shall continue to be
the Certificate of Incorporation and By-Laws of the Purchaser as the surviving
corporation.
SECTION 1.05 DIRECTORS. The directors of the Purchaser at the Effective
Time shall be the initial directors of the Purchaser as the surviving
corporation, until their successors shall have been duly elected or appointed
and qualified.
SECTION 1.06 OFFICERS. The officers of the Purchaser at the Effective Time
shall be the initial officers of the Purchaser as the surviving corporation,
until their successors have been duly appointed.
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SECTION 1.07 EXCHANGE OF IPO PROCEEDS AND SHARES; LOAN AND PLEDGED SHARES;
ASSUMPTION OF OBLIGATION. Upon consummation of the Merger, the Parent shall:
(a) Exchange Three Million Five Hundred Thousand Dollars ($3,500,000) of
the proceeds received by the Parent from the IPO and One Hundred Thousand
(100,000) shares of Common Stock of the Parent (collectively be referred to as
the "MERGER CONDSIDERATION") for all of the Issued Company Shares. The Merger
Consideration shall be delivered by the Parent as instructed by the Company. The
100,000 shares exchanged by the Parent, as set forth herein, shall be
"restricted stock", shall not be registered under the Securities Act of 1933, as
amended (the "ACT") and the Parent shall have no obligation to effect any
registration thereof;
(b) Make a loan to Xxxx Xxxxxxxx ("WOLOTSKY"), the President and Sole
Member of Wolotsky Enterprise, L.L.C., one of the Company Shareholders, in the
amount of Five Hundred Thousand Dollars ($500,000) (the "LOAN") from the IPO
proceeds. The Loan shall be secured by a pledge by Wolotsky Enterprise, L.L.C.
of the shares delivered by the Parent (the "PLEDGED SHARES"), as set forth in
Section 1.07(a), and the Parent's sole recourse upon an event of default shall
be to foreclose on such Pledged Shares. Wolotsky shall execute a Promissory
Note, dated as of the date of the Loan (the "PROMISSORY NOTE"), and shall cause
Wolotsky Enterprise, L.L.C. to execute a Pledge Agreement, dated as of the date
of the Loan (the "PLEDGE AGREEMENT"), and any additional documentation
reasonably required by the Parent, for and on behalf of the Parent, evidencing
Wolotsky's obligations with respect to repayment of the Loan and securing such
Loan with the Pledged Shares. The Pledged Shares shall be held in escrow in
accordance with the terms and conditions of the Pledge Agreement.
(c) Assume the obligation of the Company set forth in Section 7 of the
Master Internet Services Agreement between the Company and MCSP, Inc., dated
July 1, 1999. The merger discussed therein, if any, shall be a merger of MCSP,
Inc. with and into the Purchaser and the number of shares of Common Stock of the
Parent which shall be exchanged for all of the shares of common stock of MCSP,
Inc., shall be Two Hundred Fifty Thousand (250,000).
SECTION 1.08 SHAREHOLDERS' APPROVAL. The Purchaser, acting through its
Board of Directors, shall in accordance with applicable law duly call, give
notice of, convene and hold a special meeting of its shareholders (or obtain
consent) for the purpose of considering and taking action upon this Agreement
and the transactions contemplated hereby. The Company represents to the
Purchaser that all required shareholder action has been taken by it upon the
execution of this Agreement and the Company has provided the Purchaser with
copies of all consents of Company Shareholders.
SECTION 1.09 FILING OF CERTIFICATE OF MERGER. Upon the terms and subject to
the conditions hereof, as soon as practicable following the satisfaction or
waiver of the conditions set forth in Article VI hereof, the Company and the
Purchaser shall execute and file a Certificate of Merger in the manner required
by the NYBCL and the parties hereto shall take all such other and further
actions as may be required by law to make the Merger effective. Prior to
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the filings referred to in this Section, a closing (the "CLOSING DATE") will be
held at the offices of Xxxxxx Xxxxxx Xxxxxx & Xxxx, P.C., 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 (or such other place as the parties may agree) for the
purpose of confirming all of the foregoing. At the closing, Purchaser shall
deliver a check, or checks, in the aggregate amount of the Purchase Price,
payable to the Company Shareholders, as set forth on Schedule A, to the
Company's Attorney for delivery to the Company Shareholders and the Company
Shareholders shall deliver certificates representing the Company Shares to the
Purchaser's attorney for delivery to the Purchaser, subject only to confirmation
that the Effective Time has occurred. From and after the Effective Time, the
Company Shares shall cease to exist.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to each of the Purchaser and the Parent
that, except as set forth in the Disclosure Schedule annexed hereto (the
"COMPANY DISCLOSURE SCHEDULE"):
SECTION 2.01 ORGANIZATION. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of New York
and has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being conducted, except where
the failure to be so existing and in good standing or to have such power and
authority would not in the aggregate have a material adverse effect on the
financial condition, results of operations or business of the Company taken as a
whole. The Company is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the property owned, leased or operated by
it or the nature of the business conducted by it makes such qualification or
licensing necessary, except in such jurisdictions where the failure to be so
duly qualified or licensed and in good standing would not in the aggregate have
a material adverse effect on the financial condition, results of operations or
business of the Company taken as a whole. Schedule 2.01 sets forth each
jurisdiction where the Company is qualified to do business as a foreign
corporation. The Company has heretofore made available to the Purchaser accurate
and complete copies of the Certificate of Incorporation and By-laws, as
currently in effect, of the Company. The Company has no subsidiaries and is not
a party to any partnership, agency or joint venture agreement.
For purposes of this Agreement, the term "subsidiary" shall mean each
corporation or other entity in which a corporation owns or controls, directly
through one or more subsidiaries, 50% or more of the stock or other interests
having general voting power in the election of directors or persons performing
similar functions.
SECTION 2.02 CAPITALIZATION. The authorized capital stock of the Company
consists of 200 shares of Common Stock, no par value, of which 150 shares of
Common Stock
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(the "COMPANY SHARES"), were issued and outstanding as of the date hereof. All
of the issued and outstanding Company Shares are validly issued, fully paid and
non-assessable and free of preemptive rights. Except for the Company Shares,
there are no shares of capital stock of the Company issued or outstanding or any
subscriptions, options, warrants, calls, rights, convertible securities or other
agreements or commitments of any character obligating the Company to issue,
transfer, sell or pay any amount with respect to any of its securities.
SECTION 2.03 AUTHORITY RELATIVE TO THIS AGREEMENT. The Company has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by the Board of Directors of the Company and
the Company Shareholders and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly and validly executed
and delivered by the Company and constitutes a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms,
subject to the provisions of any bankruptcy, insolvency, moratorium or similar
law applicable to the rights of creditors generally.
SECTION 2.04 NO VIOLATIONS. Except for the filing and recordation of a
Certificate of Merger as required by the NYBCL, no filing with, and no permit,
authorization, consent or approval of, any public body or authority is necessary
for the consummation by the Company of the transactions contemplated by this
Agreement, except for filings, permits, authorizations, consents or approvals,
the failure to obtain which would not in the aggregate have a material adverse
effect on the financial condition, results of operations or business of the
Company taken as a whole or which would not prevent or delay in any material
respect the consummation of the transactions contemplated hereby. Neither the
execution and delivery of this Agreement by the Company nor the consummation by
the Company of the transactions contemplated hereby nor compliance by the
Company with any provisions hereof will: (i) conflict with or result in any
breach of any provision of the Certificate of Incorporation or By-laws of the
Company, (ii) result in a violation or breach of, or constitute (with or without
due notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, license, lease, contract,
agreement or other instrument or obligation to which the Company is a party or
by which it or its properties or assets may be bound or (iii) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to the Company,
or any of its properties or assets.
SECTION 2.05 FINANCIAL STATEMENTS. The Company Disclosure Schedule sets
forth a balance sheet of the Company as at June 30, 1999 (the "COMPANY BALANCE
SHEET") together with statements of operations for the period April 5, 1995
(inception) through December 31, 1998, the six month period ended June 30, 1999,
and for the period April 5, 1995 (inception) through June 30, 1999 (June 30,
1999 is hereinafter referred to as the "BALANCE SHEET DATE"). The Company
Balance Sheet included in the Company Disclosure Schedule fairly presents the
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financial position of the Company as at the respective dates thereof, and the
other related statements included therein fairly present the results of
operations of the Company for the respective fiscal periods covered thereby.
Each of the Company's financial statements included in the Company Disclosure
Schedule has been prepared in accordance with generally accepted accounting
principles consistently applied during the periods covered by such statements,
except as otherwise noted therein.
SECTION 2.06 PROPERTIES.
(a) The Company has good and marketable title to, or in the case of leased
property has valid leasehold interests in (which leases are in full force and
effect and with respect to which no event of default has occurred and is
continuing), all properties and assets (whether real or personal, and whether
tangible or intangible) reflected on the Company Balance Sheet or acquired after
the Balance Sheet Date in the ordinary course of business consistent with past
practices.
(b) There is no violation of any law, regulation or ordinance relating to
the properties and assets of the Company or the operation of its business,
except such violations as would not, in the aggregate, have a material adverse
effect on the financial condition, results of operations or business of the
Company.
SECTION 2.07 NO UNDISCLOSED LIABILITIES.
(a) There are no liabilities of the Company of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, and there
is no existing condition situation or set of circumstances which could
reasonably result in such a liability, other than:
(i) liabilities disclosed or provided for in the Company Balance
Sheet;
(ii) liabilities arising under this Agreement; and
(iii) liabilities incurred in the normal course of business which
would not, in the aggregate, have a material adverse effect on the financial
condition, results of operations or business of the Company
SECTION 2.08 LITIGATION. There are no actions, suits, or proceedings
pending against, or to the knowledge of the Company, threatened against the
Company before any court or arbitrator or any governmental body, agency or
official.
SECTION 2.09 TAXES. Except as disclosed in the financial statements
referred to in Section 2.05, the Company has: (i) duly filed with the
appropriate federal, state and local governments or governmental agencies, all
federal, state and local income tax returns and
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declarations of estimated tax and all other material tax returns and reports
required to be filed and has paid in full when due all taxes, licenses and fees,
including interest and penalties, shown to be due thereon, and (ii) has
established reserves in the Company Balance Sheet that, in the aggregate, are
adequate for the payment of taxes not yet due with respect to the Company's
operations through the Balance Sheet Date. All material claims for federal,
state and local taxes asserted against the Company have either been paid or
adequately provided for on the Company Balance Sheet. The federal income tax
returns required to be filed by the Company have either been examined by the
Internal Revenue Service or the period during which any assessments may be made
by the Internal Revenue Service has expired without waiver or extension and any
deficiencies or assessments asserted in writing by the Internal Revenue Service
have either been paid, settled or adequately provided for in the Company Balance
Sheet. The Company has withheld from employees and paid over to the proper
governmental authorities all amounts required to be so withheld and paid over.
SECTION 2.10 ABSENCE OF CERTAIN CHANGES. Except for: (i) transactions,
changes, events, obligations and liabilities contemplated by this Agreement;
(ii) transactions, changes, events, obligations and liabilities disclosed in the
financial statements referred to in Section 2.05; and (iii) transactions,
changes, events, obligations and liabilities which individually or in the
aggregate, have not had a material adverse effect on the financial condition,
results of operations or business of the Company, since the Balance Sheet Date:
(a) there have been no changes in the business, condition (financial or
otherwise), assets or liabilities of the Company;
(b) no liability or obligation of the Company has been paid, discharged or
incurred;
(c) there has been no damage, destruction, or loss, whether or not covered
by insurance, materially adversely affecting the business or property of the
Company; and
(d) the Company has not sold, mortgaged, pledged or subjected to any lien
or other encumbrance or otherwise transferred any material assets or properties
used in the conduct of its business.
SECTION 2.11 EMPLOYEE BENEFIT PLANS; ERISA. The Company does not maintain
or contribute to any employee benefit plans, programs, arrangements and
practices (such plans, programs, arrangements and practices of the Company being
referred to as the "COMPANY PLANS"), including employee benefit plans within the
meaning set forth in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended, and all regulations promulgated thereunder, as in effect
from time to time ("ERISA"), or any written employment contracts providing for
an annual base salary in excess of $100,000 and having a term in excess of one
year, which contracts are not immediately terminable without penalty or further
ability, or other similar arrangements for the provision of benefits (excluding
any "Multiemployer Plan" within the
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meaning of Section 3(37) of ERISA or a "Multiple Employer Plan" within the
meaning of Section 413(c) of the Code, and all regulations promulgated
thereunder, as in effect from time to time). Schedule 2.12(a) hereto lists all
Multiemployer Plans and Multiple Employer Plans which the Company maintains or
to which it makes contributions. The Company does not have any obligation to
create any additional such plan or to amend any such plan so as to increase
benefits thereunder, except as required under the terms of the Company Plans,
under existing collective bargaining agreements or to comply with applicable
law.
SECTION 2.12 LABOR CONTROVERSIES. The Company is not a party to any
collective bargaining agreements. There are no controversies pending or, to the
knowledge of the Company, threatened between the Company and any representatives
of any of its employees. To the knowledge of the Company, there are no
organizational efforts presently being made involving any of the presently
unorganized employees of the Company. The Company has complied in all material
respects with all laws relating to the employment of labor, including, without
limitation, any provisions thereof relating to wages, hours, collective
bargaining, and the payment of social security and similar taxes. No person has,
to the knowledge of the Company, asserted that the Company is liable for any
arrears of wages or any taxes or penalties for failure to comply with any of the
foregoing.
SECTION 2.13 MATERIAL CONTRACTS. Schedule 2.14 hereto consists of a true
and complete list of all contracts, agreements, commitments and other
instruments (whether oral or written) to which the Company is a party that (i)
involve an expenditure by the Company or require the performance of services or
delivery of goods to, by, through, on behalf of or for the benefit of the
Company, which in each case, relates to a contract, agreement, commitment or
instrument that requires payments in excess of $25,000 per year or (ii) involve
an obligation for the performance of services or delivery of goods by the
Company that cannot, or in reasonable probability will not, be performed within
thirty days from the dates as of which these representations are made.
SECTION 2.14 INTELLECTUAL PROPERTY; PROPRIETARY INFORMATION.
(a) Schedule 2.14 contains a complete and correct list of all: (i) patented
or registered intellectual property and pending patent applications or other
applications for registrations of intellectual property owned or filed by or on
behalf of the Company; (ii) all trade names, trademarks and service marks,
whether registered or unregistered, owned or used by the Company; (iii) a
summary description of all copyrightable works (including, but not limited to,
computer software) and mask works, registered or unregistered, owned or used by
the Company and material to the Company Business (the foregoing collectively
referred to as the "INTELLECTUAL PROPERTY"); and (iv) a list of all licenses or
similar agreements or arrangements for any Intellectual Property to which the
Company is a party, either as licensee or licensor (other than any end user
licenses with the customers of the Company).
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(b) Except to the extent disclosed in Schedule 2.14: (i) the Company owns
and possesses all right, title and interest in and to, or has a valid and
enforceable license to use, the Intellectual Property and other proprietary
know-how, designs, processes and other unpatented proprietary rights
("KNOW-HOW") necessary for the operation of its business as currently conducted,
in each case free and clear of any Lien, (ii) all of the Company's licenses of
the Intellectual Property are in full force and effect in accordance with their
respective terms, and there does not exist thereunder any material default by
the Company, or to the Company's knowledge, any other party thereto, or any
events or conditions which, after notice or lapse of time or both, would
constitute, individually or in the aggregate, a material default thereunder on
the part of the Company or, to the Company's' knowledge, any other party
thereto; (iii) no claim by any third party contesting the validity,
enforceability, use or ownership of any of the Intellectual Property or Know-how
has been made, is currently outstanding, or, to the Company's knowledge, is
threatened, and the Company does not know of any valid basis for any such claim;
(iv) none of the Intellectual Property is subject to any outstanding order,
ruling, decree, judgment or stipulation by or with any governmental agency; (v)
the Company has not received any notice of any infringement on or
misappropriation of the Intellectual Property or Know-how by any third party;
(vi) the transactions contemplated by this Agreement will have no material
adverse effect on the Company's right, title and interest in and to, or the use
of, any of the Intellectual Property or Know-how; and (vii) the Company has not
infringed, misappropriated or otherwise conflicted with any intellectual
property rights of any third parties, or received any notice of any alleged
infringement, misappropriation or conflict, and the Company is not aware of any
infringement, misappropriation or conflict which will occur as a result of the
continued operation of the Company's business as currently conducted.
SECTION 2.15 CUSTOMERS. Schedule 2.15 attached hereto sets forth a true and
correct list of each customer of the Company that, within the preceding twelve
months, accounted for an aggregate amount of the Company's gross revenue equal
to 10% or more of the Company's revenues. Except as set forth in Schedule 2.15,
the Company has not received any notice that any such customer of the Company
has taken or contemplates taking any steps which could disrupt the business
relationship of the Company with such customer and would result in the material
diminution in the value of the business of the Company as a going concern.
SECTION 2.16 INSURANCE. Schedule 2.16 attached hereto sets forth a true and
correct list of all insurance policies held by the Company (indicating the
insurer, type, amount and term of coverage, deductible, description of vehicles,
latest property insurable values by location, workers' compensation payroll
(separately for clerical, sales and technical employees), and additional named
insureds with respect to each such policy and identifies all claims, then
pending under any of such insurance policies. All of these policies are in full
force and effect and all premiums due thereon have been paid or accrued and
there are no retroactive experience-based premium adjustment features in any
policy. The insurance policies described on Schedule 2.19 adequately insure the
Company against loss and the amount and terms of coverage of such policies are
reasonable and customary for companies similar in size to that of the Company.
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SECTION 2.17 ACCOUNTING MATTERS. Neither the Company nor, to its best
knowledge, any of its affiliates has, through the date of this Agreement and as
of the Effective Time, taken or agreed to take any action that would prevent
Parent from accounting for the business combination to be effected by the Merger
as a pooling of interests.
SECTION 2.18 FULL DISCLOSURE. No statement contained herein or in any
certificate, schedule, list, exhibit or other instrument furnished to Purchaser
and Parent pursuant to the provisions hereof contains or will contain any untrue
statement of any material fact or omits or will omit to state a material fact
necessary in order to make the statements contained herein or therein not
misleading. Matters disclosed on each Schedule hereto shall be deemed disclosed
only for purposes of the matters to be disclosed on such Schedule and shall not
be deemed to be disclosed for any other purpose unless expressly provided
therein.
SECTION 2.19 INVESTMENT MATTERS. The Company has obtained the
acknowledgment of the Company Shareholders that they are (i) acquiring the
Pledged Shares for investment purposes only and not with a view to distribution,
(ii) either "accredited investors" as that term is defined in Regulation D
promulgated under the Act, or sophisticated investors and have had access to
sufficient information concerning the transactions contemplated by this
Agreement, including, without limitation, information concerning the Parent and
its business, (iii) aware that the Pledged Shares to be issued to them are
restricted securities and as such have not been registered under the Act and
cannot be offered for sale or sold without registration under the Securities Act
and all applicable state securities laws or pursuant to an applicable exemption
from registration, and (iv) that there is no guarantee that a trading market for
the Pledged Shares will develop, or if developed will be maintained.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER
The Purchaser represents and warrants to the Company, except as set forth
in the Disclosure Schedule annexed hereto (the "PURCHASER DISCLOSURE SCHEDULE")
as follows:
SECTION 3.01 ORGANIZATION. The Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of New York
and has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being conducted, except where
the failure to be so existing and in good standing or to have such power and
authority would not in the aggregate have a material adverse effect on the
financial condition, results of operations or business of the Purchaser taken as
a whole. The Purchaser is duly qualified or licensed to do business and is in
good standing in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except in such jurisdictions where the
failure to be so duly qualified or licensed and in good standing would not in
the aggregate
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have a material adverse effect on the financial condition, results of operations
or business of the Purchaser. Schedule 3.01 sets forth each jurisdiction where
the Purchaser is qualified to do business as a foreign corporation. The
Purchaser has heretofore made available to the Company accurate and complete
copies of the Certificate of Incorporation and By-laws, as currently in effect,
of the Purchaser. The Purchaser has no subsidiaries and is not a party to any
partnership, agency or joint venture agreement.
SECTION 3.02 CAPITALIZATION. The authorized capital stock of the Purchaser
consists of 1,000 shares of common stock, par value $.01 per share (the
"PURCHASER SHARES"), all of which were issued and outstanding as of the date
hereof and held of record and beneficially by the Parent. All of the issued and
outstanding Purchaser Shares are validly issued, fully paid and non-assessable
and free of preemptive rights. Except for the Purchaser Shares, there are no
shares of capital stock of the Purchaser issued or outstanding or any
subscriptions, options, warrants, calls, rights, convertible securities or other
agreements or commitments of any character obligating the Purchaser to issue,
transfer, sell or pay any amount with respect to any of its securities.
SECTION 3.03 AUTHORITY RELATIVE TO THIS AGREEMENT. The Purchaser has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by the Board of Directors of the Purchaser and,
except for the approval by Purchaser's shareholder, no other corporate
proceedings on the part of the Purchaser are necessary to authorize this
Agreement or to consummate the transactions so contemplated. Subject to the
approval of the Purchaser's shareholder, this Agreement has been duly and
validly executed and delivered by the Purchaser and constitutes a valid and
binding agreement of the Purchaser, enforceable against the Purchaser in
accordance with its terms, subject to the provisions of any bankruptcy,
insolvency, moratorium or similar law applicable to the rights of creditors
generally.
SECTION 3.04 NO VIOLATIONS. Except for the filing and recordation of a
Certificate of Merger as required by the NYBCL, no filing with, and no permit,
authorization, consent or approval of, any public body or authority is necessary
for the consummation by the Purchaser of the transactions contemplated by this
Agreement, except for filings, permits, authorizations, consents or approvals,
the failure to obtain which would not in the aggregate have a material adverse
effect on the financial condition, results of operations or business of the
Purchaser taken as a whole or which would not prevent or delay in any material
respect the consummation of the transactions contemplated hereby. Neither the
execution and delivery of this Agreement by the Purchaser nor the consummation
by the Purchaser of the transactions contemplated hereby nor compliance by the
Purchaser with any provisions hereof will: (i) conflict with or result in any
breach of any provision of the Certificate of Incorporation or By-laws of the
Purchaser, (ii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
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lease, contract, agreement or other instrument or obligation to which the
Purchaser is a party or by which it or its properties or assets may be bound or
(iii) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to the Purchaser, or any of its properties or assets.
SECTION 3.05 FINANCIAL REPRESENTATION. The Purchaser was organized in
September, 1999, has had no operations and has performed no other acts other
than those incident to its organization. Purchaser's only asset is the $10 which
the Parent paid for the 1,000 issued and outstanding shares of the Purchaser's
common stock, par value $.01 per share and the Purchaser has no liabilities.
SECTION 3.06 FULL DISCLOSURE. No representation, warranty or covenant made
by the Purchaser in this Agreement contains any untrue statement of a material
fact, or omits to state a material fact necessary to make the statements
contained in this Agreement not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE PARENT
The Parent represents and warrants to the Company, except as set forth in
the Disclosure Schedule annexed hereto (the "Parent Disclosure Schedule") as
follows:
SECTION 4.01 ORGANIZATION. The Parent is a corporation duly organized,
validly existing and in good standing under the laws of the State of New York
and has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being conducted, except where
the failure to be so existing and in good standing or to have such power and
authority would not in the aggregate have a material adverse effect on the
financial condition, results of operations or business of the Parent taken as a
whole. The Parent is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the property owned, leased or operated by
it or the nature of the business conducted by it makes such qualification or
licensing necessary, except in such jurisdictions where the failure to be so
duly qualified or licensed and in good standing would not in the aggregate have
a material adverse effect on the financial condition, results of operations or
business of the Parent and its subsidiary taken as a whole. Schedule 4.01 sets
forth each jurisdiction where the Parent is qualified to do business as a
foreign corporation. The Parent has heretofore made available to the Purchaser
accurate and complete copies of the Certificate of Incorporation and By-laws, as
currently in effect, of the Parent. Except for Purchaser, the Parent has no
subsidiaries and is not a party to any partnership, agency or joint venture
agreement.
SECTION 4.02 CAPITALIZATION. The authorized capital stock of the Parent
consists of 10,000,000 shares of Common Stock, par value $.01 per share and
2,000,000 shares of Preferred Stock, par value $.01 per share, of which
5,900,000 shares of Common Stock and no
12
shares of Preferred Stock, are issued and outstanding as of the date hereof. All
of the issued and outstanding securities of Parent have been validly issued,
fully paid and non-assessable and are free of preemptive rights. Except for the
foregoing shares of Common Stock and Preferred Stock, and except as disclosed in
the Registration Statement, there are no shares of capital stock of the Parent
issued or outstanding or any subscriptions, options, warrants, calls, rights,
convertible securities or other agreements or commitments of any character
obligating the Parent to issue, transfer, sell or pay any amount with respect to
any of its securities. The Common Stock when issued and delivered in accordance
with this Agreement, will be duly and validly issued and such Common Stock will
be fully paid and non-assessable.
SECTION 4.03 AUTHORITY RELATIVE TO THIS AGREEMENT. The Parent has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by the Board of Directors of the Parent and the
Parent Shareholders and no other corporate proceedings on the part of the Parent
are necessary to authorize this Agreement or to consummate the transactions so
contemplated. This Agreement has been duly and validly executed and delivered by
the Parent and constitutes a valid and binding agreement of the Parent,
enforceable against the Parent in accordance with its terms, subject to the
provisions of any bankruptcy, insolvency, moratorium or similar law applicable
to the rights of creditors generally.
SECTION 4.04 NO VIOLATIONS. Except for the filing and recordation of a
Certificate of Merger as required by the NYBCL, no filing with, and no permit,
authorization, consent or approval of, any public body or authority is necessary
for the consummation by the Parent of the transactions contemplated by this
Agreement, except for filings, permits, authorizations, consents or approvals,
the failure to obtain which would not in the aggregate have a material adverse
effect on the financial condition, results of operations or business of the
Parent taken as a whole or which would not prevent or delay in any material
respect the consummation of the transactions contemplated hereby. Neither the
execution and delivery of this Agreement by the Parent nor the consummation by
the Parent of the transactions contemplated hereby nor compliance by the Parent
with any provisions hereof will: (i) conflict with or result in any breach of
any provision of the Certificate of Incorporation or By-laws of the Parent, (ii)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, license, lease, contract, agreement or
other instrument or obligation to which the Parent is a party or by which it or
its properties or assets may be bound or (iii) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Parent, or any
of its properties or assets.
SECTION 4.05 FINANCIAL STATEMENTS. The Parent Disclosure Schedule sets
forth balance sheets of the Parent as at December 31, 1997 and December 31, 1998
(the "PARENT BALANCE SHEET"), together with statements of results of operations
and cash flows for the two fiscal years ended December 31, 1997 and December 31,
1998, and the report of Ernst &
13
Young LLP, certified public accountants, on the financial statements for the
years ended December 31, 1997 and December 31, 1998. Except as set forth in the
Parent Disclosure Schedule (which is deemed to include the Registration
Statement and each subsequent Amendment to the Registration Statement which the
Parent shall deliver to the Company), each of the balance sheets (including the
related notes) included in the Parent Disclosure Schedule fairly presents the
consolidated financial position of the Parent as of the respective dates
thereof, and the other related statements (including the related notes) included
therein fairly present the consolidated results of operations and the cash flows
of the Parent for the respective fiscal periods covered thereby. Each of such
financial statements has been prepared in accordance with generally accepted
accounting principles consistently applied during the periods covered, except as
otherwise noted therein.
SECTION 4.06 PROPERTIES.
(a) The Parent has good and marketable title to, or in the case of leased
property has valid leasehold interests in (which leases are in full force and
effect and with respect to which no event of default has occurred and is
continuing), all properties and assets (whether real or personal, and whether
tangible or intangible) reflected on the Parent Balance Sheet or acquired after
the Balance Sheet Date in the ordinary course of business consistent with past
practices.
(b) There is no violation of any law, regulation or ordinance relating to
the properties and assets of the Parent except such violations as would not, in
the aggregate, have a material adverse effect on the financial condition,
results of operations or business of the Parent.
SECTION 4.07 NO UNDISCLOSED LIABILITIES. There are no liabilities of the
Parent of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, and there is no existing condition or set
of circumstances which could reasonably result in such a liability, other than:
(a) liabilities disclosed or provided for in the Parent Balance Sheet or in
the notes thereto or in the Parent Disclosure Schedule;
(b) liabilities incurred in the ordinary course of business consistent with
past practices since the Balance Sheet Date;
(c) liabilities arising under this Agreement; and
(d) liabilities which would not, in the aggregate, have a material adverse
effect on the Parent.
SECTION 4.08 LITIGATION. Except as set forth in the Parent Disclosure
Schedule, there are no actions, suits, or proceedings pending against, or to the
knowledge of the
14
Parent, threatened against the Parent before any court or arbitrator or any
governmental body, agency or official.
SECTION 4.09 TAXES. Except as disclosed in the financial statements
referred to in Section 4.05, the Parent has (i) duly filed (or appropriate
extensions have been filed) with the appropriate federal, state and local
governments or governmental agencies, all federal, state and local income tax
returns and declarations of estimated tax and all other material tax returns and
reports required to be filed and have paid in full when due all taxes, licenses
and fees, including interest and penalties, shown to be due thereon, and (ii)
has established reserves in the Parent Balance Sheet that, in the aggregate, are
adequate for the payment of taxes not yet due with respect to the Parent's
operations through the Balance Sheet Date. All material claims for federal,
state and local taxes asserted against the Parent have either been paid or
adequately provided for on the Parent Balance Sheet. The federal income tax
returns required to be filed by the Parent have either been examined by the
Internal Revenue Service or the period during which any assessments may be made
by the Internal Revenue Service has expired without waiver or extension and any
deficiencies or assessments asserted in writing by the Internal Revenue Service
have either been paid, settled or adequately provided for in the Parent Balance
Sheet. The Parent has withheld from employees and paid over to the proper
governmental authorities all amounts required to be so withheld and paid over.
SECTION 4.10 ABSENCE OF CERTAIN CHANGES. Except for: (i) transactions,
changes, events, obligations and liabilities contemplated by this Agreement;
(ii) transactions, changes, events, obligations and liabilities disclosed in the
financial statements referred to in Section 4.05 or in the Parent Disclosure
Schedule; (iii) transactions, changes, events, obligations and liabilities which
individually or in the aggregate, have not had a material adverse effect on the
Parent, since the Balance Sheet Date:
(a) there have been no changes in the business, condition (financial or
otherwise), operations, manner of conduct of business or operations, assets or
liabilities of the Parent, other than changes in the ordinary course of
business;
(b) no liability or obligation of the Parent has been paid, discharged or
incurred other than in the ordinary course of business;
(c) there has been no damage, destruction, or loss, whether or not covered
by insurance, materially adversely affecting the business or property of the
Parent;
(d) the Parent has not sold, mortgaged, pledged or subjected to any lien or
other encumbrance or otherwise transferred any material assets or properties
used in the conduct of its business; and
(e) the Parent has not entered into any transaction other than in the
ordinary course of business.
15
ARTICLE V
COVENANTS
SECTION 5.01 CONDUCT OF THE BUSINESS OF THE COMPANY AND PURCHASER. Except
as contemplated by this Agreement, during the period from the date of this
Agreement to the Effective Time, each of the Company and Purchaser will conduct
its respective operations according to its ordinary course of business and
consistent with past practice, and will each use its reasonable efforts to
preserve intact its business organization. Without limiting the generality of
the foregoing, and except as otherwise expressly provided in this Agreement,
prior to the Effective Time, the Company will not, without the prior written
consent of the Purchaser and Parent:
(a) amend its Certificate of Incorporation or By-laws;
(b) authorize for issuance, issue, sell, deliver or agree or commit to
issue, sell or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any
shares of stock of any class or any other securities, except as may be required
by option agreements in effect on the date hereof;
(c) split, combine or reclassify any shares of its capital stock, declare,
set aside or pay any dividend or other distribution (whether in cash, stock or
property or any combination thereof) in respect of its capital stock, or redeem
or otherwise acquire any of its securities;
(d) except in the ordinary course of business consistent with past
practices: (i) incur or assume any long-term or short-term debt; (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other person; or (iii)
make any loans, advances or capital contributions to, or investments in, any
other person;
(e) except pursuant to written agreements in effect on the date hereof,
acquire, sell, lease, create liens with respect to or dispose of any material
assets outside the ordinary course of business or enter into any material
commitment or transaction outside the ordinary course of business;
(f) except as may be required by law, take any action to initiate,
terminate or amend any of its employee benefit plans; and
(g) take, or agree in writing or otherwise to take, any of the foregoing
actions or any action which would make any representation or warranty of the
Company contained in this Agreement untrue or incorrect in any material respect
as of the date when made or as of a future date.
16
SECTION 5.02 ACCESS TO INFORMATION.
(a) Between the date of this Agreement and the Effective Time, the Company
will give the Purchaser, the Parent and its authorized representatives, access
to its respective facilities, books and records as the other may reasonably
request, will permit the other to make such inspections as it may reasonably
require and will cause its officers to furnish the other with such financial
data and other information with respect to its business and properties as the
other may from time to time reasonably request.
(b) Each of Purchaser and the Parent will hold and will cause its
representatives to hold in strict confidence all documents and information
concerning the Company furnished in connection with the transactions
contemplated by this Agreement (except to the extent that such information can
be shown to have been: (i) in the public domain through no fault of the
disclosing party, or (ii) required to be disclosed by Parent in its Registration
Statement relating to its IPO or (iii) later lawfully acquired by the disclosing
party (or its affiliates) from other sources) and will not release or disclose
such information to any other person, except in connection with this Agreement
to (i) its representatives and (ii) to the Underwriter (including its counsel)
of the Parent's IPO (it being understood that such persons shall be informed by
Purchaser of the confidential nature of such information and shall be directed
by Purchaser to treat such information confidentially); provided that each party
and its representatives may provide such documents or information in response to
judicial or administrative process or applicable governmental laws, rules,
regulations, orders or ordinances, but only that portion of the documents or
information which, on the advice of counsel, is legally required to be
furnished. If the transactions contemplated by this Agreement are not
consummated, such confidence shall continue to be maintained in accordance with
the terms and conditions above set forth.
SECTION 5.03 BEST EFFORTS. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use its best efforts to take, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement. In case at any time after the Effective Time any
further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of each party to this Agreement
shall take all such necessary action.
SECTION 5.04 CONSENTS. The Purchaser, Company and Parent each will use its
best efforts to obtain consents of all third parties and governmental
authorities necessary to the consummation of the transactions contemplated by
this Agreement, unless the failure to obtain such consents will not, in the
aggregate, have a material adverse effect on the financial condition, results of
operations or business in respect of either the Purchaser, Company or Parent.
SECTION 5.05 NOTIFICATION OF CERTAIN MATTERS. The Company, Purchaser and
Parent agree to give prompt notice to each other of (i) the occurrence, or
failure to occur, of any event which occurrence or failure to occur would be
likely to cause any
17
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Effective Time (including any such occurrence or failure of which either party
is or becomes aware with respect to the other) and (ii) any material failure on
its part to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided, however, that the delivery
of any notice pursuant to this Section 5.05 shall not limit or otherwise affect
the remedies available hereunder to the party receiving such notice.
ARTICLE VI
CONDITIONS TO CONSUMMATION
OF THE MERGER
SECTION 6.01 CONDITIONS TO CONSUMMATION OF THE MERGER. The obligations of
the Purchaser and the Parent are, at Purchaser's and the Parent's option,
subject to the fulfillment of the conditions hereinafter set forth:
(a) The Company shall have performed and complied with all of the
conditions and agreements required by this Agreement to be performed or complied
with by it prior to the Effective Time in all material respects.
(b) The Purchaser's shareholder shall have approved the Merger in
accordance with New York law. The approval of the Merger by the Company's
shareholders in accordance with New York law shall be in full force and effect.
(c) There shall have been no material change in the business, properties or
financial condition of the Company from such condition on the date hereof.
(d) On the Closing Date (i) there shall be no injunction, restraining
order, or order of any nature issued by a court of competent jurisdiction which
directs that any transaction contemplated by this Agreement shall not be
consummated and (ii) there shall be no suit, action, investigation or other
proceeding pending or threatened by any governmental agency or private party
seeking to restrain or prohibit the consummation of any material transaction
contemplated hereby or the obtaining of any material amount of damages from any
party hereto or any officer or director of any such party, in connection with
the consummation of the transactions contemplated hereby.
(e) The Parent shall have consummated the IPO upon the terms and provisions
set forth in the Registration Statement.
SECTION 6.02 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The obligations
of the Company are, at the Company's option, subject to the fulfillment of the
conditions hereinafter set forth.
18
(a) Purchaser and Parent shall have performed and complied with all of the
conditions and agreements required by this Agreement to be performed or complied
with by it prior to the Effective Time in all material respects.
(b) The Purchaser's shareholder shall have approved the Merger in
accordance with Delaware law.
(c) The Parent shall have consummated the IPO.
(d) There shall have been no material adverse change in the business,
properties or financial condition of the Parent from such condition on the date
hereof.
(e) On the Closing Date (i) there shall be no injunction, restraining
order, or order of any nature issued by a court of competent jurisdiction which
directs that any transaction contemplated by this Agreement shall not be
consummated and (ii) there shall be no suit, action, investigation or other
proceeding pending or threatened by any governmental agency or private party
seeking to restrain or prohibit the consummation of any material transaction
contemplated hereby or the obtaining of any material amount of damages from any
party hereto or any officer or director of any such party, in connection with
the consummation of the transaction contemplated hereby.
ARTICLE VII
TERMINATION; AMENDMENT; WAIVER
SECTION 7.01 TERMINATION. This Agreement may be terminated and the Merger
contemplated hereby may be abandoned at any time notwithstanding approval
thereof by the shareholders of the Purchaser and the Company, but prior to the
Effective Time:
(a) by mutual written consent of the Purchaser, the Company and the Parent;
(b) by the Purchaser, the Company or the Parent if the Effective Time shall
not have occurred on or before January 31, 2001; provided, however, that the
right to terminate this Agreement under this Section 7.01(b) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Effective
Time to occur on or before such date;
(c) by the Purchaser, the Company or the Parent if any United States or
state governmental authority or other agency or commission or United States or
state court of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, injunction or other order
which is in effect and is permanent and non-appealable and has the effect of
prohibiting consummation of the Merger or the provision of the financing
necessary for such transactions; or
19
(d) by the Purchaser: (i) if, prior to the Closing Date, the Board of
Directors of the Purchaser determines that it will not recommend approval of the
Merger by the stockholder of Purchaser (or if such recommendation is withdrawn)
or (ii) in the event of a breach by Company of any material term or condition
hereof.
Any unilateral termination of this Agreement permitted by this Section 7.01
shall be effective upon the giving of the written notice by the terminating
party in the manner provided herein.
SECTION 7.02 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 7.01 hereof, this Agreement
shall forthwith become void and have no effect, without any liability on the
part of any party or its directors, officers or shareholders. Nothing contained
in this Section 7.02 shall relieve any party from liability for any breach of
this Agreement; that with respect to breaches of this Agreement the Purchaser
shall not be responsible for, or have any liability in respect of, any action or
intended failure to act by the Company or the Company Shareholders.
SECTION 7.03 EFFECT OF TERMINATION ON THE PLEDGED SHARES. Termination of
this Agreement, for any reason, shall be deemed an Event of Default (as defined
in the Pledge Agreement) and none of the Pledged Shares shall be transferred by
the Pledgeholder (as defined in the Pledge Agreement) to Wolotsky. In such case,
the Pledgeholder shall immediately transfer all of the Pledged Shares to the
Parent.
SECTION 7.03 AMENDMENT. This Agreement may be amended by action taken by
all of the parties at any time before or after adoption of this Agreement by the
shareholders of the Purchaser and the Company, but, after any such approval, no
amendment shall be made which changes the amount or form of consideration to be
paid in the Merger or adversely affects the rights of the shareholders of
Purchaser and the Company hereunder without the approval of such shareholders.
It is acknowledged and agreed that an amendment which extends the time by which
the Effective Time must occur in order to obtain any required third party or
governmental consent or to comply with any judicial or administrative ruling or
order shall not be deemed to adversely affect such rights. This Agreement may
not be amended except by an instrument in writing signed on behalf of the
parties.
SECTION 7.04 EXTENSION; WAIVER. At any time prior to the Effective Time,
the parties may (i) extend the time for the performance of any of the
obligations or other acts of the other party hereto, (ii) waive any inaccuracies
in the representations and warranties contained herein or in any document,
certificate or writing delivered pursuant hereto or (iii) waive compliance with
any of the agreements or conditions contained herein. Any agreements on the part
of any party to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such party.
20
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01 INDEMNIFICATION.
(a) The Company, agrees to indemnify and defend Parent and Purchaser,
including their officers, directors, employees, agents and representatives, and
to hold such parties harmless from and against any and all damages, claims,
losses and expenses (including reasonable attorneys' fees) arising from or
relating to (i) any misrepresentation or breach of any representation and
warranty hereunder by Company; or (ii) any breach of any of the Company's
covenants under this Agreement.
(b) Purchaser and Parent agree to indemnify and defend the Company
Shareholders and to hold the Company Shareholders harmless from and against any
and all damages, claims, losses and expenses (including reasonable attorneys'
fees) arising from or relating to (i) any misrepresentation or breach of any
representation and warranty hereunder by Parent or Purchaser; or (ii) any breach
of any of Parent's or Purchaser's covenants under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 SURVIVAL. The representations, warranties, covenants and
agreements made herein or in any certificate or document executed in connection
herewith shall survive the execution and delivery of this Agreement.
SECTION 9.02 BROKERAGE FEES AND COMMISSIONS. The Purchaser and Parent
hereby represent and warrant to the Company with respect to the Purchaser and
Parent, and the Company hereby represents and warrants to the Purchaser and
Parent with respect to the Company, that no person or entity is entitled to
receive from the Purchaser or Parent or the Company, respectively, any
investment banking, brokerage or finder's fee or fees for financial consulting
or advisory services in connection with this Agreement or the transactions
contemplated hereby.
SECTION 9.03 EXPENSES. Each party hereto shall pay its own expenses
incidental to the preparing for, entering into and carrying out of this
Agreement and to the consummation of the Merger, whether or not the Merger shall
be consummated.
SECTION 9.04 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement (including any
other agreements referred to herein) (a) constitutes the entire agreement among
the parties with respect to the subject matter hereof and supersedes all other
prior agreements and
21
understandings, both written and oral, between the parties with respect to the
subject matter hereof, and (b) shall not be assigned by operation of law or
otherwise, provided that the Purchaser may assign its rights and obligations to
Parent or any subsidiary of the Purchaser, but no such assignment shall relieve
the Purchaser of its obligations hereunder if such assignee does not perform
such obligations.
SECTION 9.05 VALIDITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
SECTION 9.06 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by cable,
telegram or telex, or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties as follows:
If to the Company: Infinite Technology Information Services, Inc.
00 Xxxxxxx Xxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
If to the Purchaser: Mercury Internet Services, Inc.
00 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
If to the Parent: Infinite Technology Group Ltd.
00 Xxxxxxx Xxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
SECTION 9.07 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York as they are
applied to contracts to be performed entirely within such state, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws.
SECTION 9.08 DESCRIPTIVE HEADINGS. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
SECTION 9.09 PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
rights, benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
22
SECTION 9.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which shall
constitute one and the same agreement.
SECTION 9.11 SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event any of the provisions of this
Agreement were not to be performed in accordance with the terms hereto and that
the parties shall be entitled to specific performance of the terms hereof, in
addition to any other remedy at law or equity.
IN WITNESS WHEREOF, the undersigned have executed this Agreement and Plan
of Merger as of the date first set forth above.
INFINITE TECHNOLOGY GROUP LTD.
By: /s/ Xxxxx XxXxxxx
-----------------------------------
Name: Xxxxx XxXxxxx
Title: President and Chief Executive Officer
MERCURY INTERNET SERVICES, INC.
By: /s/ Xxxxx XxXxxxx
-----------------------------------
Name: Xxxxx XxXxxxx
Title: President
INFINITE TECHNOLOGY INFORMATION
SERVICES, INC.
By: /s/ Xxxx Xxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxx
Title: President and Chief Executive Officer
AS TO SECTION 1.07 AND SCHEDULE A:
/s/ Xxxx Xxxxxxx
----------------------------------
Xxxx Xxxxxxx
/s/ Xxxxx XxXxxxx
----------------------------------
Xxxxx XxXxxxx
WOLOTSKY ENTERPRISE, L.L.C.
By: /s/ Xxxx Xxxxxxxx
-------------------------------
Name: Xxxx Xxxxxxxx
Title: President and Sole Member
23
SCHEDULE A
INFINITE TECHNOLOGY INFORMATION SERVICES, INC. SHAREHOLDERS
NUMBER OF INFINITE
TECHNOLOGY
INFORMATION SERVICES,
NAME INC. SHARES HELD
------------------------------------- ----------------------------
Xxxx Xxxxxxx 50
Xxxxx XxXxxxx 50
Wolotsky Enterprise, L.L.C. 50
24
COMPANY DISCLOSURE STATEMENT
[SEE ATTACHED FINANCIAL STATEMENTS]
25
PURCHASER DISCLOSURE STATEMENT
[NOT APPLICABLE]
26
PARENT DISCLOSURE STATEMENT
[SEE ATTACHED FINANCIAL STATEMENTS]
27
