EXHIBIT 2.5
MERGER AGREEMENT
MERGER AGREEMENT (the "Agreement"), dated as of November 30, 1999, by
and among Approve,Net, Inc., a California corporation, (the "Company"), Xxx
Xxxxxx, Xxx Xxxxxxx and Xxxxx Xxxxxxxxx, being the sole holders of all of the
outstanding shares of capital stock of the Company (the "Stockholders"), and
XxxxxxxxXxxxxx.xxx, Inc., a Florida corporation ("Merchant").
RECITALS:
WHEREAS, the Company is engaged in the business of processing on-line
credit card purchases; and
WHEREAS, Merchant is also engaged in the business of processing on-line
credit card purchases and desires to acquire all of the capital stock of the
Company (the "Company Stock"); and
WHEREAS, the parties hereto desire that the transaction be treated as a
tax-free reorganization under Section 368 of the Internal Revenue Code.
NOW THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements herein contained, the
parties hereto do hereby agree as follows:
THE MERGER
THE MERGER. Subject to the terms and conditions of this Agreement, on
the Closing Date (as defined in Section 1.2), the Company and Merchant
shall consummate a merger (the "Merger") pursuant to which the Company
shall be merged with and into Merchant in accordance with the relevant
provisions of the California Corporations Code ("CCC") and the Florida
Business Corporation Act ("FBCA"), the separate corporate existence of
the Company (except as may be continued by operation of law) shall
cease, and Merchant shall continue as the surviving corporation in the
Merger (Merchant is sometimes referred to as the "Surviving
Corporation").
CLOSING AND EFFECTIVE TIME. The closing of the Merger (the "Closing")
shall take place (i) at 10:00 a.m., local time, on a date to be
specified by the parties, which shall be no later than the second
business day after satisfaction or, if permissible, waiver of all of
the conditions set forth in Article VI hereof, and in any case no later
than January 15, 2000, at the offices of Broad and Xxxxxx, 0000 Xxxxxx
Xxxx, Xxxx Xxxxx, Xxxxxxx 00000, or (ii) at such other time and place
as Merchant and the Company shall agree (the "Closing Date").
Immediately after completion of the Closing, the parties shall cause
the Merger to be consummated by filing a certificate of merger or other
appropriate documents (in any such case, the "Certificate of Merger")
executed in accordance with the relevant provisions of the CCC and the
FBCA and shall make all other filings or recordings required under the
CCC and the FBCA. The Merger shall become effective at the time when
the Certificate of Merger has been duly filed with the Florida
Secretary of State and by the California Secretary of State, or such
time as is agreed upon by the parties and specified in the Certificate
of Merger, which shall be no later than two business days following the
Closing Date, and such time is hereinafter referred to as the
"Effective Time."
1.
DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. The directors and
officers of Merchant at the Effective Time shall be the directors and
officers, respectively, of the Surviving Corporation, provided that the
Stockholders shall have the right to nominate one director, which shall
be endorsed by management to the shareholders of the Company, and Xxx
Xxxxxxx shall be elected a vice president of the Surviving Corporation.
Xxxxx Xxxxxxxx, President of Merchant, in his individual capacity
agrees to vote in favor of such nominee for a period of three years.
CERTIFICATE OF INCORPORATION. On and after the Effective Time, the
Certificate of Incorporation of Merchant in effect immediately prior to
the Effective Time shall be the Certificate of Incorporation of the
Surviving Corporation until amended in accordance with applicable law.
BYLAWS. On and after the Effective Time, the bylaws of Merchant in
effect immediately prior to the Effective Time shall be the bylaws of
the Surviving Corporation until amended in accordance with applicable
law.
EFFECT OF THE MERGER. At the Effective Time, the effect of the Merger
shall be as provided in the applicable provisions of the CCC and the
FBCA. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all the property, rights, privileges,
powers and franchises of the Company shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company shall
become the debts, liabilities and duties of the Surviving Corporation.
MERGER CONSIDERATION; CONVERSION AND CANCELLATION OF SECURITIES. At the
Effective Time, by virtue of the Merger and without any action on the
part of Merchant, the Company or the holders of any of the Company's
securities, each issued and outstanding share of common stock, par
value $.001 per share, of the Company ("Company Stock") shall by virtue
of the Merger and without any action on the part of the holder thereof,
be automatically converted into the right to receive, upon surrender of
the certificate formerly representing such share of Company Common
Stock, 2,000,000 shares of Merchant Common Stock in the following
amounts:
NAME SHARES
Xxx Xxxxxx 770,000
Xxx Xxxxxxx 770,000
Xxxxx Xxxxxxxxx 460,000
All such shares of Company Common Stock when so converted, shall no
longer be outstanding and shall automatically be canceled and retired and shall
cease to exist, and each holder of a Company Stock representing any such shares
of Company Stock shall cease to have any rights with respect thereto, except the
right to receive the shares of Merchant Common Stock therefor upon the surrender
of such certificate.
2.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND STOCKHOLDER
The Company (including its predecessor Charge Solutions LLC) and the
Stockholders, jointly and severally, make the following representations and
warranties to Merchant, each of which shall be deemed material (and Merchant, in
executing, delivering, and consummating this Agreement, has relied and will rely
upon the correctness and completeness of each of such representations and
warranties notwithstanding any independent investigation):
2.1 ORGANIZATION; GOOD STANDING. The Company is a corporation duly
organized, validly existing and in good standing under the
laws of the State of California and has full corporate power
and authority to carry on its business as it is now being
conducted and to own the properties and assets it now owns.
The Company is duly qualified to transact business as a
foreign corporation in good standing in each state or other
jurisdiction in which its ownership or leasing of property or
conduct of business requires such qualification. The copies of
the charter documents of the Company attached hereto as
Schedule 2.1 are complete and correct copies of such
instruments as presently in effect.
2.2 CAPITALIZATION OF THE COMPANY. The authorized capital stock of
the Company consists of 100,000 shares of common stock, of
which 1,000 shares are issued and outstanding. All issued and
outstanding shares of capital stock of the Company are validly
issued, fully paid and nonassessable. The Stockholders own
100% of the Company's capital stock, and such ownership by the
Stockholders is free and clear of all liens, security
interests and encumbrances. Upon delivery of the Company Stock
in accordance with this Agreement, Merchant will receive good
and marketable title to the Company Stock, free and clear of
all security interests, liens and encumbrances. There are no
outstanding (a) securities convertible into or exchangeable
for the Company's capital stock; (b) options, warrants or
other rights to purchase or subscribe to capital stock of the
Company or securities convertible into or exchangeable for
capital stock of the Company; or (c) contracts, commitments,
agreements, understandings or arrangements of any kind
relating to the issuance of any capital stock of the Company,
any such convertible or exchangeable securities or any such
options, warrants or rights.
2.3 CORPORATE RECORD BOOKS. The corporate minute books of the
Company have been made available to Merchant, are complete and
correct and contain all of the proceedings of the Stockholders
and directors of the Company.
2.4 AUTHORIZATION, ETC. The Company has full corporate power and
authority, and Stockholders have full power and authority, to
enter into this Agreement and to carry out the transactions
contemplated hereby. The Company has taken all action required
by law, its charter documents, or otherwise to be taken by it
to authorize the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby, and
this Agreement is a valid and binding agreement of the Company
and Stockholders enforceable in accordance with its terms.
2.5 NO VIOLATION. Neither the execution and delivery of this
Agreement nor the consummation of the transactions
contemplated hereby will violate any provision of the charter
documents of the Company, or be in conflict with, or
constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result
in the termination of, or accelerate the performance required
by, or cause the acceleration of the maturity of any debt or
obligation pursuant to, or result in the creation or
imposition of any security interest, lien or other encumbrance
upon any property or assets of the Company or Stockholders
under, any agreement or commitment to which the Company or
Stockholders are a party or by which the Company or the
Stockholders are bound, or to which the property of the
Company or Stockholders are subject, or violate any statute or
law of any judgment, decree, order, regulation or rule of any
court or governmental authority.
2.6 FINANCIAL STATEMENTS. The Company has heretofore delivered to
Merchant unaudited financial statements as of and for the year
ended December 31, 1998 and the months ended September 30,
1999 for itself and its predecessor, Charge Solutions LLC (the
"Financial Statements"). Such Financial Statements and the
notes thereto are true, complete and accurate and fairly
present the assets, liabilities, financial condition and
results of operations of the Company as at the respective
dates thereof, all in accordance with generally accepted
accounting principles consistently applied throughout the
periods involved.
2.7 NO UNDISCLOSED LIABILITIES; ETC. To the best of the Company's
and Stockholders' knowledge, the Company has no liabilities or
obligations of any nature (absolute, accrued, contingent or
otherwise) which were not fully reflected or reserved against
in the Financial Statements, except for liabilities and
obligations incurred in the ordinary course of business and
consistent with past practice since the date thereof, and the
reserves reflected in the Financial Statements are adequate,
appropriate and reasonable.
2.8 ACCOUNTS RECEIVABLE. All accounts receivable of the Company,
whether reflected in the Financial Statements or otherwise,
represent revenues actually made in the ordinary course of
business, and are current and collectible net of any reserves
shown on the Financial Statements (which reserves are adequate
and were calculated consistent with part practice). Subject to
such reserve, each of the accounts receivable either has been
collected in full or will be collected in full, without any
set-off, within 90 days after the day on which it became due
and payable.
2.9 ABSENCE OF CERTAIN CHANGES. Except that all cash or bank
accounts will be transferred to Stockholders prior to the
Merger, and to the extent set forth in Schedule 2.8, since the
date of the Financial Statements, the Company has not:
3.
2.9.1.1 Suffered any material adverse change in its
working capital, financial condition,
assets, liabilities (absolute, accrued,
contingent or otherwise), reserves,
business, operations or prospects;
2.9.1.2 Incurred any liabilities or obligations
(absolute, accrued, contingent or otherwise)
except non-material items incurred in the
ordinary course of business and consistent
with past practice, none of which exceeds
$10,000 (counting obligations or liabilities
arising from one transaction or a series of
similar transactions, and all periodic
installments or payments under any lease or
other agreement providing for periodic
installments or payments, as a single
obligation or liability), or increased, or
experienced any change in any assumptions
underlying or methods of calculating, any
bad debt, contingency or other reserves;
2.9.1.3 Paid, discharged or satisfied any claim,
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 or liabilities
and obligations reflected or reserved
against in the Financial Statements or
incurred in the ordinary course of business
and consistent with past practice since the
date of the balance sheet included in the
Financial Statements;
2.9.1.4 Permitted or allowed any of its property or
assets (real, personal or mixed, tangible or
intangible) to be subjected to any mortgage,
pledge, lien, security interest,
encumbrance, restriction or charge of any
kind, except for liens for current taxes not
yet due;
2.9.1.5 Become aware of any fact or event which
materially adversely affects or may in the
future materially adversely affect the
financial condition, results of operations,
business, properties, assets, liabilities,
or future prospects of the Company;
2.9.1.6 Cancelled any debts, waived any claims or
rights or substantial value or accepted a
purchase order, quotation, arrangement or
understanding for future sale of services of
the Company which will not result in a
profit to the Company;
2.9.1.7 Sold, transferred, or otherwise disposed of
any of its properties or assets (real,
personal or mixed, tangible or intangible),
except in the ordinary course of business
and consistent with past practice; and
2.9.1.8 Agreed, whether in writing or otherwise, to
take any action described in this Section.
2.10 LITIGATION. There is no pending or threatened action, suit,
inquiry, proceeding or investigation by or before any court or
governmental or other regulatory or administrative agency or
commission pending or threatened against or involving the
Company or Stockholders, or which questions or challenges the
validity of this Agreement or any action taken or to be taken
by the Company or Stockholders pursuant to this Agreement or
in connection with the transactions contemplated hereby; nor
is there any valid basis for any such action, proceeding or
investigation. To the best knowledge of the Company and
Stockholders, the Company is not in default under or in
violation of, nor is there any valid basis for any claim of
default under or violation of, any contract, commitment or
restriction to which it is a party or by which it is bound.
the Company is not in violation of, or in default with respect
to, any law, rule, regulations, order, judgment, or decree;
nor is the Company required to take any action in order to
avoid such violation or default. the Company is not subject to
any judgment, order or decree entered in any lawsuit or
proceeding which may have an adverse effect on its business
practices or on its ability to acquire any property or conduct
its business in any area.
2.11 TITLE TO PROPERTIES; ENCUMBRANCES. The Company has good, valid
and marketable title to all the properties and assets which it
purports to own (real, personal and mixed, tangible and
intangible), free and clear of all liens, mortgages, security
interests, pledges, charges and encumbrances (the "Assets").
All Assets are free from defects (patent and latent), have
been maintained in accordance with nominal industry practice,
are in good operating condition and repair (subject to normal
wear and tear), and are suitable for the purposes for which
they presently are used.
2.12 CONTRACTS AND COMMITMENTS. Schedule 2.12 contains a true,
complete and accurate list of all contracts, agreements
instruments, leases, licenses, arrangements, or understandings
(whether written or oral) to which the Company is a party or
by which any of its assets or properties are bound. All
contracts, agreements, plans, leases, policies and licenses
referred to in Schedule 2.12 are valid and in full force and
effect, and true copies thereof have been heretofore made
available to Merchant. Except as set forth in such Schedule
2.12 or in any other schedule to this Agreement or disclosed
in the Financial Statements, the Company does not:
2.12.1.1 have any agreements, contracts, commitments
or restrictions which are material to its
business, operations or prospects or which
require the making of any charitable
contribution;
2.12.1.2 have any purchase contracts or commitments
that continue for a period of more than 12
months and are in excess of the normal,
ordinary and usual requirements of business
or at any excessive price;
2.12.1.3 have any outstanding contracts with
officers, employees, agents, consultants,
advisors, salesmen, sales representatives,
distributors or dealers that are not
cancelable by it on notice of not longer
than 30 days and without liability, penalty
or premium or any agreement or arrangement
providing for the payment of any bonus or
commission based on sales or earnings;
4.
2.12.1.4 have any employment agreement, or any other
agreement that contains any severance or
termination pay liabilities or obligations;
2.12.1.5 have any agreement or contract in default,
nor is there any basis for any valid claim
of default under any contract made or
obligation owed by it;
2.12.1.6 have any debt obligation for borrowed money,
including guarantees of or agreements to
acquire any such debt obligation of others;
and
2.12.1.7 have any outstanding loan to any person.
2.13 CONSENTS. Schedule 2.13 hereto sets forth a true and complete
list of all consents of governmental and other regulatory
agencies, foreign or domestic, and of other third parties
required to be received by or on the part of the Company to
enable it to enter into and carry out this Agreement. All such
requisite consents have been, or prior to the Closing will
have been, obtained.
2.14 TAXES. The Company has duly filed all tax reports and returns
required to be filed by it and has duly paid all taxes and
other charges due or claimed to be due from it by federal,
state, local or foreign taxing authorities (including, without
limitation, those due in respect of the properties, income,
franchises, licenses, sales or payrolls of any of them); and
there are no tax liens upon any property or assets of the
Company except liens for current taxes not yet due. No state
of facts exists or has existed which would constitute ground
for the assessment of any tax liability by the Internal
Revenue Service. All tax returns filed by the Company are
true, correct and complete. All taxes that the Company is or
was required by law to withhold or collect have been duly
withheld or collected and, to the extent required, have been
paid to the proper governmental body or other person. There is
no claim, audit, action, suit, proceeding or investigation
with respect to taxes due or claimed to be due from the
Company or any tax return filed or required to be filed by the
Company pending or threatened against or with respect to the
Company.
2.15 EMPLOYEE BENEFIT PLANS. Except as set forth in Schedule 2.15,
the Company does not have and none of its current or former
employees are covered by, any bonus, deferred compensation,
pension, profit-sharing, retirement, insurance, stock
purchase, stock option or any other fringe benefit plan,
arrangement or practice, other than standard medical
insurance, or any other employee benefit plan, as defined in
section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), whether formal or informal.
2.16 INSURANCE. Schedule 2.16 sets forth a true and complete list
and brief description of all policies of fire, liability and
other forms of insurance held by the Company. Except as set
forth in Schedule 2.16, such policies are valid, outstanding
and enforceable policies, as to which premiums have been paid
currently, are with reputable insurers believed by the Company
to be financially sound and are consistent with the practices
of similar concerns engaged in substantially similar
operations as those currently conducted by the Company. Except
as set forth in Schedule 2.16, neither the Company nor the
Shareholder is aware of any state of facts or of the
occurrence of any event that might reasonably (a) form the
basis for any material claim against the Company not fully
covered by insurance for liability on account of any express
or implied warranty or tortious omission or commission, or (b)
result in a material increase in insurance premiums.
2.17 SALARY INFORMATION. Schedule 2.17 is a true and complete list
of the names and current salary rates of and bonus commitments
to all present employees of the Company.
2.18 BROKERS. Except as set forth in Schedule 2.18, neither the
Company nor any Stockholders has engaged, consented to or
authorized any broker, finder, investment banker or other
third party to act on its behalf, directly or indirectly, as a
broker or finder in connection with the transactions
contemplated by this Agreement, and the Company and the
Stockholders, jointly and severally, agree to indemnify
Merchant against, and to hold it harmless from, any claim for
brokerage or similar commissions or other compensation that
may be made against Merchant by any third party in connection
with the transactions contemplated hereby.
2.19 ENVIRONMENTAL PROTECTION. The Company has obtained all
permits, licenses and other authorizations which are required
under federal, state and local laws relating to pollution or
protection of the environment, including laws relating to
emissions, discharges, releases or threatened releases of
pollutants, contaminants, or hazardous or toxic materials or
wastes into ambient air, surface water, ground water, or land,
or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants or hazardous or toxic
materials or wastes. To the best of Stockholder's and the
Company's knowledge, the Company is in full compliance with
all terms and conditions of the required permits, licenses and
authorizations, and is also in full compliance with all other
limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and
timetables contained in those laws or contained in any
regulation, code, plan, order, decree, judgment, notice or
demand letter issued, entered, promulgated or approved
thereunder. The Company and the Stockholders are not aware of,
nor has the Company received notice of, any past, present or
future events, conditions, circumstances, activities,
practices, incidents, actions or plans which may interfere
with or prevent continued compliance, or which may give rise
to any common law or legal liability, or otherwise form the
basis of any claim, action, suit, proceeding, hearing or
investigation, based on or related to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport, or handling, or the emission, discharge, release or
threatened release into the environment, of any pollutant,
contaminant, or hazardous or toxic material or waste.
5.
REPRESENTATIONS AND WARRANTIES OF MERCHANT
Merchant represents and warrants to the Company and Stockholders as
follows:
3.1 CORPORATE ORGANIZATION; ETC. Merchant is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Florida and has the power and authority
to carry on its business as now being conducted and to own the
properties and assets it now owns. Merchant is duly qualified
to transact business as a foreign corporation in good standing
in each state or other jurisdiction in which its ownership or
leasing of property or conduct of business requires such
qualification. The copies of Merchant's charter documents
included in its SEC filings are complete and correct copies of
such instruments as presently in effect.
3.2 AUTHORIZATION, ETC. Merchant has full corporate power and
authority to enter into this Agreement and to carry out the
transactions contemplated hereby. Merchant has taken all
action required by law, its Certificate of Incorporation and
Bylaws or otherwise to authorize the execution and delivery of
this Agreement and the transactions contemplated hereby, and
this Agreement is a valid and binding agreement of Merchant
enforceable in accordance with its terms.
3.3 NO VIOLATION. Neither the execution and delivery of this
Agreement nor the consummation of the transactions
contemplated hereby will violate any provisions of the
Certificate of Incorporation or Bylaws of Merchant, or
violate, or be in conflict with, or constitute a default
under, or cause the acceleration of the maturity of any debt
or obligation pursuant to, any agreement or commitment to
which Merchant is a party or by which Merchant is bound, or
violate any statute or law or any judgment, decree, order,
regulation or rule of any court or governmental authority.
3.4 CAPITALIZATION. The authorized capital stock of Merchant
consists of 100,000,000 shares of Merchant Common Stock, of
which 18,025,000 shares are outstanding and 25,000,000 shares
of Merchant Preferred Stock, none of which are outstanding.
All issued and outstanding shares of capital stock of Merchant
are validly issued, fully paid and nonassessable. There are no
outstanding (a) securities convertible into or exchangeable
for Merchant's capital stock; (b) options, warrants or other
rights to purchase or subscribe to capital stock of Merchant
or securities convertible into or exchangeable for capital
stock of Merchant; or (c) contracts, commitments, agreements,
understandings or arrangements of any kind relating to the
issuance of any capital stock of Merchant, any such
convertible or exchangeable securities or any such options,
warrants or rights.
3.5 CORPORATE RECORD BOOKS. The corporate minute books of the
Company have been made available to Merchant, are complete and
correct and contain all of the proceedings of Merchant's
stockholders and directors.
3.6 FINANCIAL STATEMENTS. Merchant has heretofore delivered to
Stockholders audited financial statements as of and for the
year ended October 31, 1998 and unaudited financial statements
for the nine months ended July 31, 1999 (the "Financial
Statements"). Such Financial Statements and the notes thereto
are true, complete and accurate and fairly present the assets,
liabilities, financial condition and results of operations of
Merchant as at the respective dates thereof, all in accordance
with generally accepted accounting principles consistently
applied throughout the periods involved.
3.7 NO UNDISCLOSED LIABILITIES; ETC. To the best of its knowledge,
Merchant has no liabilities or obligations of any nature
(absolute, accrued, contingent or otherwise) which were not
fully reflected or reserved against in the Financial
Statements, except for liabilities and obligations incurred in
the ordinary course of business and consistent with past
practice since the date thereof; and the reserves reflected in
the Financial Statements are adequate, appropriate and
reasonable.
3.8 LITIGATION. There is no pending or threatened action, suit,
inquiry, proceeding or investigation by or before any court or
governmental or other regulatory or administrative agency or
commission pending or threatened against or involving
Merchant, or which questions or challenges the validity of
this Agreement or any action taken or to be taken by Merchant
pursuant to this Agreement or in connection with the
transactions contemplated hereby; nor is there any valid basis
for any such action, proceeding or investigation. To the best
of its knowledge, Merchant is not in default under or in
violation of, nor is there any valid basis for any claim of
default under or violation of, any contract, commitment or
restriction to which it is a party or by which it is bound.
Merchant is not in violation of, or in default with respect
to, any law, rule, regulations, order, judgment, or decree;
nor is Merchant required to take any action in order to avoid
such violation or default. Merchant is not subject to any
judgment, order or decree entered in any lawsuit or proceeding
which may have an adverse effect on its business practices or
on its ability to acquire any property or conduct its business
in any area.
3.9 ABSENCE OF CERTAIN CHANGES. Except as and to the extent set
forth in Schedule 3.9, since the date of the Financial
Statements, Merchant has not:
3.9.1.1 Suffered any material adverse change in its
working capital, financial condition,
assets, liabilities (absolute, accrued,
contingent or otherwise), reserves,
business, operations or prospects;
3.9.1.2 Incurred any liabilities or obligations
(absolute, accrued, contingent or otherwise)
except non-material items incurred in the
ordinary course of business and consistent
with past practice, none of which exceeds
$10,000 (counting obligations or liabilities
arising from one transaction or a series of
similar transactions, and all periodic
installments or payments under any lease or
other agreement providing for periodic
installments or payments, as a single
obligation or liability), or increased, or
experienced any change in any assumptions
underlying or methods of calculating, any
bad debt, contingency or other reserves;
6.
3.9.1.3 Paid, discharged or satisfied any claim,
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 or liabilities
and obligations reflected or reserved
against in the Financial Statements or
incurred in the ordinary course of business
and consistent with past practice since the
date of the balance sheet included in the
Financial Statements;
3.9.1.4 Permitted or allowed any of its property or
assets (real, personal or mixed, tangible or
intangible) to be subjected to any mortgage,
pledge, lien, security interest,
encumbrance, restriction or charge of any
kind, except for liens for current taxes not
yet due;
3.9.1.5 Become aware of any fact or event which
materially adversely affects or may in the
future materially adversely affect its
financial condition, results of operations,
business, properties, assets, liabilities,
or future prospects;
3.9.1.6 Cancelled any debts, waived any claims or
rights or substantial value or accepted a
purchase order, quotation, arrangement or
understanding for future sale of services of
Merchant which will not result in a profit
to Merchant;
3.9.1.7 Sold, transferred, or otherwise disposed of
any of its properties or assets (real,
personal or mixed, tangible or intangible),
except in the ordinary course of business
and consistent with past practice; and
3.9.1.8 Agreed, whether in writing or otherwise, to
take any action described in this Section.
3.10 TITLE TO PROPERTIES; ENCUMBRANCES. Merchant has good, valid
and marketable title to all the properties and assets which it
purports to own (real, personal and mixed, tangible and
intangible), free and clear of all liens, mortgages, security
interests, pledges, charges and encumbrances (the "Assets").
All Assets are free from defects (patent and latent), have
been maintained in accordance with nominal industry practice,
are in good operating condition and repair (subject to normal
wear and tear), and are suitable for the purposes for which
they presently are used.
3.11 CONSENTS. Schedule 3.11 hereto sets forth a true and complete
list of all consents of governmental and other regulatory
agencies, foreign or domestic, and of other third parties
required to be received by or on the part of Merchant to
enable it to enter into and carry out this Agreement. All such
requisite consents have been, or prior to the Closing will
have been, obtained.
3.12 TAXES. Merchant has duly filed all tax reports and returns
required to be filed by it and has duly paid all taxes and
other charges due or claimed to be due from it by federal,
state, local or foreign taxing authorities (including, without
limitation, those due in respect of the properties, income,
franchises, licenses, sales or payrolls of any of them); and
there are no tax liens upon any property or assets of Merchant
except liens for current taxes not yet due. No state of facts
exists or has existed which would constitute ground for the
assessment of any tax liability by the Internal Revenue
Service. All tax returns filed by Merchant are true, correct
and complete. All taxes that Merchant is or was required by
law to withhold or collect have been duly withheld or
collected and, to the extent required, have been paid to the
proper governmental body or other person. There is no claim,
audit, action, suit, proceeding or investigation with respect
to taxes due or claimed to be due from Merchant or any tax
return filed or required to be filed by Merchant pending or
threatened against or with respect to Merchant.
3.13 BROKERS. Merchant has not engaged, consented to or authorized
any broker, finder, investment banker or other third party to
act on its behalf, directly or indirectly, as a broker or
finder in connection with the transactions contemplated by
this Agreement, and Merchant agrees to indemnify Stockholders
against, and to hold it harmless from, any claim for brokerage
or similar commissions or other compensation that may be made
against Stockholders by any third party in connection with the
transactions contemplated hereby.
3.14 ENVIRONMENTAL PROTECTION. Merchant has obtained all permits,
licenses and other authorizations which are required under
federal, state and local laws relating to pollution or
protection of the environment, including laws relating to
emissions, discharges, releases or threatened releases of
pollutants, contaminants, or hazardous or toxic materials or
wastes into ambient air, surface water, ground water, or land,
or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants or hazardous or toxic
materials or wastes. To the best of its knowledge, Merchant is
in full compliance with all terms and conditions of the
required permits, licenses and authorizations, and is also in
full compliance with all other limitations, restrictions,
conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in those laws
or contained in any regulation, code, plan, order, decree,
judgment, notice or demand letter issued, entered, promulgated
or approved thereunder. Merchant is not aware of, nor has
Merchant received notice of, any past, present or future
events, conditions, circumstances, activities, practices,
incidents, actions or plans which may interfere with or
prevent continued compliance, or which may give rise to any
common law or legal liability, or otherwise form the basis of
any claim, action, suit, proceeding, hearing or investigation,
based on or related to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or
handling, or the emission, discharge, release or threatened
release into the environment, of any pollutant, contaminant,
or hazardous or toxic material or waste.
7.
COVENANTS OF THE COMPANY AND STOCKHOLDERS
The Company and Stockholders hereby covenant and agree with Merchant:
4.1 CONSENTS. The Company will obtain, prior to the Closing, all
consents necessary, in the reasonable opinion of Merchant's
counsel, to the consummation of the transactions contemplated
hereby, including, without limitation, (i) the consent of each
person holding a mortgage or lien on real property or personal
property, owned or leased by the Company, to the Merger; (ii)
the consent of each lessor of real or personal property leased
by the Company to the assignment of the lessee's interest
under the lease of such property to Merchant; (iii) the
waivers of any outstanding right of first refusal; and (iv)
use its best efforts to assist Merchant in obtaining all
necessary approvals from any governmental agencies or
departments as may be necessary or desirable in connection
with the Merger. All such consents will be in writing and
executed counterparts thereof will be delivered to Merchant
prior to the Closing.
4.2 SUPPLEMENTS TO SCHEDULES. From time to time prior to the
Closing, the Stockholders and the Company will promptly
supplement or amend any Schedule hereto with respect to any
matter hereafter arising which, if existing or occurring at
the date of this Agreement, would have been required to be set
forth or described in any such Schedule. No supplement or
amendment of any such Schedule made pursuant to this Section
shall be deemed to cure any breach of any representation of or
warranty made in this Agreement unless Merchant specifically
agrees thereto in writing.
4.3 OTHER TRANSACTIONS. Neither the Company nor the Stockholders
shall enter into any discussions concerning, or approve or
recommend any merger, consolidation, disposition of all or
substantially all of its business, properties or assets (other
than pursuant to this Agreement), acquisition or other
business combination, or proposal therefor, or furnish or
cause to be furnished any information concerning the business,
properties or assets of the Company to any party in connection
with any the Company transaction involving the acquisition of
the Company or all or any substantial part of its assets by
any person other than Merchant.
CONDITIONS TO OBLIGATIONS OF THE COMPANY AND THE STOCKHOLDERS
Each and every obligation of the Company and Stockholders under this
Agreement to be performed on or before the Closing shall be subject to the
satisfaction, on or before the Closing, of each of the following conditions,
unless waived in writing by the Company and Stockholder:
5.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of Merchant contained in Article 3 hereof, the
Schedules and in all certificates and other documents
delivered and to be delivered by Merchant or its
representatives pursuant hereto or in connection with the
transactions contemplated hereby shall be in all material
respects true and accurate as of the date when made and at and
as of the Closing as though such representations and
warranties were made at and as of such date, except for
changes expressly permitted or contemplated by the terms of
this Agreement.
5.2 PERFORMANCE. Merchant shall have performed and complied with
all agreements, obligations and conditions required by this
Agreement to be performed or complied with by it on or prior
to the Closing.
5.3 INVESTIGATIONS; ETC. No investigation of Merchant by the
Company and Stockholder, nor the Schedules or any supplement
thereto nor any other document delivered to the Company as
contemplated by this Agreement, shall have revealed any facts
or circumstances which, in the sole and exclusive judgment of
the Stockholders, reflect in a material adverse way on the
financial condition, assets, liabilities (absolute, accrued,
contingent or otherwise), reserves, business, operations or
prospects of Merchant.
5.4 NO GOVERNMENTAL PROCEEDING OR LITIGATION. No suit, action,
investigation, inquiry or other proceeding by any governmental
body or other person or legal or administrative proceeding
shall have been instituted or threatened which questions the
validity or legality of the transactions contemplated hereby.
5.5 CONSENTS. The consents from third parties and government
agencies required to consummate the transactions contemplated
hereby shall have been obtained.
5.6 NO INJUNCTION. On the Closing Date there shall be no
injunction, writ, preliminary restraining order or any order
of any nature issued by a court of competent jurisdiction
directing that the transactions provided for herein or any of
them not be consummated as so provided or imposing any
conditions on the consummation of the transactions
contemplated hereby which Merchant deems unacceptable in its
sole discretion.
5.7 MATERIAL CHANGE. From the date of the Financial Statements to
the Closing Date, Merchant shall not have suffered any
unanticipated material adverse change (whether or not such
change is referred to or described in any supplement to the
Schedules) in its business, prospects, financial condition,
working capital, assets, liabilities (absolute, accrued,
contingent or otherwise), reserves or operations.
5.8 EMPLOYMENT AGREEMENT. On or before the Closing Date, Merchant
shall enter into a five-year Employment Agreement with Xxx
Xxxxxx, Xxx Xxxxxxx and Xxxxxxx Xxxxxxxxx in the form of
Schedule 5.8 hereto (the "Employment Agreements").
5.9 FUNDING. Prior to the Closing Date, Merchant shall provide
written evidence of third-party funding of at least $1.5
million in cash, which funds are specifically reserved for
expanding and funding the combined business of Merchant and
the Company.
5.10 ITEMS TO BE DELIVERED AT CLOSING BY MERCHANT. At the Closing,
Merchant shall deliver to Stockholders
5.10.1.1 Certificates representing Merchant Common
Stock and Merchant Preferred Stock; and
5.10.1.2 Certificate that the representations and
warranties contained in Article 3 of this
Agreement are true and correct in all
material respects at and as of the Closing
Date, except for representations and
warranties specifically relating to a time
or times other than the Closing Date, which
shall be true and correct in all material
respects at such time or times.
5.11 BUDGET. The Company and Merchant shall have agreed to the
budget and structure for the California Operations Center for
2000.
8.
CONDITIONS TO OBLIGATIONS OF MERCHANT
Each and every obligation of Merchant under this Agreement to be
performed on or before the Closing shall be subject to the satisfaction, on or
before the Closing, of each of the following conditions, unless waived in
writing by Merchant:
6.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties contained in Article 2 hereof, the Schedules and in
all certificates and other documents delivered and to be
delivered by the Company and Stockholders or its
representatives pursuant hereto or in connection with the
transactions contemplated hereby shall be true, complete and
accurate as of the date when made and at and as of the Closing
Date as though such representations and warranties were made
at and as of such date, except for changes expressly permitted
or contemplated by the terms of this Agreement or changes
which are not material in the aggregate.
6.2 PERFORMANCE. The Company and Stockholders shall have performed
and complied with all agreements, obligations and conditions
required by this Agreement to be performed or complied with by
them on or prior to the Closing.
6.3 INVESTIGATIONS; ETC. No investigation of the Company and
Stockholders by Merchant, nor the Schedules or any supplement
thereto nor any other document delivered to Merchant as
contemplated by this Agreement, shall have revealed any facts
or circumstances which, in the sole and exclusive judgment of
Merchant, reflect in a material adverse way on the financial
condition, assets, liabilities (absolute, accrued, contingent
or otherwise), reserves, business, operations or prospects of
the Company.
6.4 CONSENTS. The consents from third parties and government
agencies required to consummate the transactions contemplated
hereby shall have been obtained.
6.5 NO GOVERNMENT PROCEEDING OR LITIGATION. No suit, action,
investigation, inquiry or other proceeding by any governmental
body or other person or legal or administrative proceeding
shall have been instituted or threatened which questions the
validity or legality of the transactions contemplated hereby.
6.6 NO INJUNCTION. On the Closing Date there shall be no
injunction, writ, preliminary restraining order or any order
of any nature issued by a court of competent jurisdiction
directing that the transactions provided for herein or any of
them not be consummated as so provided or imposing any
conditions on the consummation of the transactions
contemplated hereby which Merchant deems unacceptable in its
sole discretion.
6.7 MATERIAL CHANGE. From the date of the Financial Statements to
the Closing Date, the Company shall not have suffered any
unanticipated material adverse change (whether or not such
change is referred to or described in any supplement to the
Schedules) in its business, prospects, financial condition,
working capital, assets, liabilities (absolute, accrued,
contingent or otherwise), reserves or operations.
6.8 EMPLOYMENT AGREEMENTS. On or before the Closing Date, Merchant
shall enter into the Employment Agreements. On or before the
Closing Date, the Company shall have made timely payment to
all employees pursuant to their existing employment
arrangements.
6.9 MISCELLANEOUS CLOSING DOCUMENTS. At the Closing, the Company
and Stockholders shall deliver to Merchant:
6.9.1.1 Certificates representing the Company Stock
with a duly endorsed stock power; and
6.9.1.2 Certificate of the Company and Stockholders
that the representations and warranties
contained in Article 2 of this Agreement are
true and correct in all material respects at
and as of the Closing Date, except for
representations and warranties specifically
relating to a time or times other than the
Closing Date, which shall be true and
correct in all material respects at such
time or times.
9.
CONDUCT OF THE COMPANY'S BUSINESS PENDING THE CLOSING
Pending the Closing and except as otherwise expressly consented to or
approved by Merchant in writing:
7.1 CONDUCT OF BUSINESS. The Company will carry on its business
diligently and substantially in the same manner as heretofore
conducted, so that at the Closing no representation or
warranty of the Company will be inaccurate, and no covenant or
agreement of the Company will be breached. Except as otherwise
required by Merchant in writing, until the Closing, the
Company will use its best efforts to preserve its business, to
keep available the services of its present personnel, to
preserve in full force and effect the contracts, agreements,
instruments, leases, licenses, arrangements, and
understandings of the Company, and to preserve the good will
of their suppliers, customers, and others having business
relations with any of them. The Company's business structure
and accounting systems shall not be modified in any material
respect prior to the Closing Date.
7.2 AMENDMENTS. No change or amendment shall be made in the
charter documents of the Company.
7.3 CAPITAL CHANGES; DIVIDENDS REDEMPTIONS. The Company will not
issue or sell any additional shares of its capital stock or
other securities, acquire directly or indirectly, by
redemption or otherwise, any such shares or split-up any such
capital stock, declare or pay any dividends thereon in cash,
securities or other property or make any other distribution
with respect thereto, or grant or enter into any options,
warrants, calls or commitments of any kind with respect
thereto.
7.4 SUBSIDIARIES. The Company will not organize any new
subsidiary, acquire any capital stock or other equity
securities of any corporation, partnership, or other entity or
acquire any equity or ownership interest in any business.
7.5 ACCESS TO INFORMATION. The Company shall give to Merchant's
officers, employees, counsel, accountants and other
representatives free and full access to and the right to
inspect, during normal business hours, all of the premises,
properties, assets, records, contracts and other documents
relating to its business and shall permit them to consult with
the officers, employees, accountants, counsel and agents of
the Company for the purpose of making such investigation of
the Company as Merchant shall desire to make, provided that
such investigation shall not unreasonably interfere with the
Company's business operations. Furthermore, the Company shall
furnish to Merchant all such documents and copies of documents
and records and information with respect to the affairs of the
Business and copies of any working papers relating thereto as
Merchant shall from time to time reasonably request and shall
permit Merchant and its agents to make such physical
inventories and inspections of the Company as Merchant may
request from time to time.
7.6 CERTAIN CHANGES. The Company will not:
7.6.1.1 Borrow or agree to borrow any funds or
incur, or assume or become subject to,
whether directly or by way of guarantee or
otherwise, any obligation or liability
(absolute or contingent), except obligations
and liabilities incurred in the ordinary
course of business and consistent with past
practice;
7.6.1.2 Pay, discharge or satisfy any claim,
liability or obligation (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 or
obligations reflected or reserved against in
the Financial Statements or incurred in the
ordinary course of business and consistent
with past practice since the date of the
Financial Statements;
7.6.1.3 Prepay any obligation having a fixed
maturity of more than 90 days from the date
such obligation was issued or incurred;
7.6.1.4 Permit or allow any of its property or
assets (real, personal or mixed, tangible or
intangible) to be subjected to any mortgage,
pledge, lien or encumbrance;
7.6.1.5 Write off as uncollectible any notes or
accounts receivable except in the ordinary
course of business;
7.6.1.6 Cancel any debts or waive any claims or
rights of substantial value or sell,
transfer, or otherwise dispose of any of its
properties or assets, except in the ordinary
course of business and consistent with past
practice;
7.6.1.7 Grant any general increase in the
compensation of its officers or employees
(including any such increase pursuant to any
bonus, pension, profit sharing or other plan
or commitment) or any increase in the
compensation payable or to become payable to
any officer or employees;
7.6.1.8 Pay, loan or advance any amount to, or sell,
transfer or lease any properties or assets
to, or enter into any agreement or
arrangement with, the Stockholder, officers
or any affiliates;
7.6.1.9 Agree, whether in writing or otherwise, to
do any of the foregoing.
10.
7.7 CONTRACTS. No contract or commitment will be entered into, and
no purchase of raw material or supplies and no sale of assets
will be made, by or on behalf of the Company, except (a)
normal contracts or commitments for the purchase of, and
nominal purchases of, inventory or supplies, made in the
ordinary course of business an consistent with past practice,
and (b) other contracts, commitments, purchases or sales in
the ordinary course of business and consistent with past
practice not in excess of $10,000 in the aggregate.
7.8 INSURANCE; PROPERTY. The Company shall adequately insure all
property, real, personal and mixed, owned or leased by the
Company, against all ordinary and insurable risks; and all
such property shall be used, operated, maintained and repaired
in a careful and reasonably efficient manner.
7.9 NO DEFAULT. The Company shall not do any act or omit to do any
act, or permit any action or omission to act, which will cause
a breach of any material contract or commitment of the Company
or which would cause the breach of any warranty made
hereunder.
7.10 COMPLIANCE WITH LAWS. The Company shall duly comply with all
laws applicable to it and its properties, operations, business
and employees.
7.11 MATERIAL DEVELOPMENTS. The Company shall promptly notify
Merchant of the occurrence of any and all events which have,
or may have, a material effect upon the business or financial
condition of the Company.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; TERMINATION
8.1 INVESTIGATIONS; SURVIVAL OF WARRANTIES. The representations,
warranties and agreements of the Company, Stockholders and
Merchant contained herein or in any certificates or other
documents delivered prior to or at the Closing shall survive
the Closing and not be deemed waived or otherwise affected by
any investigation made by any party hereto.
8.2 METHODS OF TERMINATION. The transactions contemplated herein
may be terminated and/or abandoned at any time but not later
than the Closing Date:
8.2.1.1 By mutual and joint consent of Merchant and
the Stockholder; or
8.2.1.2 By Merchant, (i) at any time if the
representations and warranties of the
Company or the Stockholders contained in
Article 2 hereof were incorrect in any
material respect when made or at any time
thereafter, or (ii) upon written notice to
the Company and the Stockholders given on
the Closing Date if all of the conditions
precedent to the obligations of Merchant set
forth in this Agreement are not fulfilled;
or
8.2.1.3 By Stockholders, (i) at any time if the
representations and warranties of Merchant
contained in Article 3 hereof were incorrect
in any material respect when made or at any
time thereafter, or (ii) upon written notice
to Merchant given on the Closing Date if all
of the conditions precedent to the
obligations of the Company and the
Stockholders set forth in this Agreement are
not fulfilled.
8.2.1.4 By either party if the Closing does not
occur by January 15, 2000.
8.3 PROCEDURE UPON TERMINATION. In the event of termination and
abandonment by Merchant pursuant to Section 8.2 hereof, notice
thereof shall forthwith be given to the other party and the
transactions contemplated by this Agreement shall be
terminated and/or abandoned, without further action by
Merchant or Stockholders. If the transactions contemplated by
this Agreement are terminated and/or abandoned as provided
herein:
8.3.1.1 Each party will redeliver all documents,
work papers and other material of any other
party relating to the transactions
contemplated hereby, whether so obtained
before or after the execution hereof, to the
party furnishing the same;
8.3.1.2 All confidential information received by any
party hereto with respect to the business of
any other party shall be treated in
accordance with Section 12.9 hereof;
8.3.1.3 No party hereto shall have any liability or
further obligation to any other party to
this Agreement except as stated in
subparagraphs (a) and (b) and (c) of this
Section 8.3 other than liability for damages
resulting from representations and
warranties being inaccurate when made.
11.
INDEMNIFICATION
9.1 INDEMNIFICATION BY STOCKHOLDERS. Merchant and its officers,
directors, employees, shareholders, representatives and agents
shall be indemnified and held harmless by the Company and the
Stockholder,s jointly and severally, at all times after the
date of this Agreement, against and in respect of any and all
damage, loss, deficiency, liability, obligation, commitment,
cost or expense (including the fees and expenses of counsel)
resulting from, or in respect of, any of the following:
9.1.1.1 Any misrepresentation, breach of warranty,
or non-fulfillment of any obligation on the
part of the Company or the Stockholders
under this Agreement, any document relating
thereto or contained in any schedule or
exhibit to this Agreement or from any
misrepresentation in or omission from any
certificate, schedule, other agreement or
instrument by the Company or the
Stockholders hereunder;
9.1.1.2 Any and all liabilities of the Company or
Stockholders of any nature whether accrued,
absolute, contingent or otherwise, and
whether known or unknown, existing at the
date of this Agreement, including, without
limitation all liabilities for Taxes of the
Company or the Stockholders attributable to
the operations of the Company or the
Stockholders for any period prior to the
date of this Agreement, together with any
interest or penalties thereon or related
thereto. Any Taxes, penalties or interest
attributable to the operations of the
Company or the Stockholders payable as a
result of an audit of any tax return shall
be deemed to have accrued in the period to
which such Taxes, penalties or interest are
attributable;
9.1.1.3 All demands, assessments, judgments, costs
and reasonable legal and other expenses
arising from, or in connection with any of
the foregoing.
9.2 INDEMNIFICATION BY MERCHANT. The Stockholders and their
representatives and agents shall be indemnified and held
harmless by Merchant at all times after the date of this
Agreement, against and in respect of any and all damage, loss,
deficiency, liability, obligation, commitment, cost or expense
(including the fees and expenses of counsel) resulting from,
or in respect of, any of the following:
9.2.1.1 Any misrepresentation, breach of warranty,
or non-fulfillment of any obligation on the
part of Merchant under this Agreement, any
document relating thereto or contained in
any schedule or exhibit to this Agreement or
from any misrepresentation in or omission
from any certificate, schedule, other
agreement or instrument by Merchant
hereunder;
9.2.1.2 Any and all liabilities of the Merchant of
any nature whether accrued, absolute,
contingent or otherwise, and whether known
or unknown, existing at the date of this
Agreement, including, without limitation all
liabilities for Taxes of Merchant
attributable to the operations of the
Surviving Corporation for any period after
the Effective Time, together with any
interest or penalties thereon or related
thereto. Any Taxes, penalties or interest
attributable to Merchant's operations
payable as a result of an audit of any tax
return shall be deemed to have accrued in
the period to which such Taxes, penalties or
interest are attributable;
9.2.1.3 All demands, assessments, judgments, costs
and reasonable legal and other expenses
arising from, or in connection with any of
the foregoing.
POST-CLOSING OBLIGATIONS
10.1 FURTHER ASSURANCES The Company and the Stockholders covenant
and agree with Merchant, its successors and assigns, that the
Company and the Stockholders will do, execute, acknowledge and
deliver, or cause to be done, executed, acknowledged and
delivered, any and all such further acts, instruments, papers
and documents as may be necessary to carry out and effectuate
the intent and purposes of this Agreement.
10.2 PAYMENT OF LIABILITIES; DISCHARGE OF LIENS. All liabilities,
obligations debts and commitments of the Company or the
Stockholders arising outside the ordinary course of business
of the Company for any period prior to the date of this
Agreement shall be satisfied and discharged by the
Stockholders as the same shall become due, including but not
limited to all liabilities for taxes of the Company and the
Stockholders.
10.3 SEPARATE DIVISION. Merchant agrees that for a period of up to
90 days after the Effective Time, that it will keep the
Company's business in a separate division or subsidiary, until
such time as proper funding is received. If such funding is
not received by the end of such 90-day period, the
Stockholders shall have the right to rescind the Merger and
receive back the business formerly conducted by the Company by
providing prompt written notice to Merchant and returning to
Merchant the 2,000,000 shares of Merchant Common Stock issued
as the Merger Consideration.
12.
MISCELLANEOUS PROVISIONS
11.1 WAIVER OF COMPLIANCE. Any failure of the Company and
Stockholders, on the one hand, or Merchant, on the other, to
comply with any obligation, covenant, agreement or condition
herein may be expressly waived in writing by the President of
Merchant or the Stockholders, but such waiver or failure to
insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure.
11.2 NOTICES. All notices, requests, demands and other
communications required or permitted hereunder shall be in
writing and shall be deemed to have been duly given if
delivered by hand or if mailed, certified or registered mail,
return receipt requested, with postage prepaid or if delivered
to an overnight courier that guarantees next-day delivery:
(a) If to the Company or Stockholders, to:
Xxx Xxxxxx
Xxxxxxx.xxx, Inc.
0000 Xxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
with a copy to: Xxxxxx X. Xxx
Xxxxxxx & Xxxxxxxx, A.P.C.
00000 Xx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
or to such other person or address as the Company shall furnish to
Merchant in writing.
(b) If to Merchant, to: Xxxxx Xxxxxxxx
XxxxxxxxXxxxxx.xxx, Inc.
0000 Xxxxx Xxxxx Xxxxxxx - Xxxxx 000
Xxxx Xxxxx, XX 00000
with a copy to: Xxxxxxx X. Xxxxxx, Esq.
Broad and Xxxxxx
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
or to such other person or address as Merchant shall furnish to the
Company in writing.
11.3 ASSIGNMENT. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns,
but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by the Company without
the prior written consent of Merchant.
11.4 GOVERNING LAW. This Agreement and the legal relations among
the parties hereto shall be governed by and construed in
accordance with the laws of the State of Florida, without
regard to its conflicts of law doctrine.
13.
11.5 COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and
the same instrument.
11.6 HEADINGS. The headings of the Sections and Articles of this
Agreement are inserted for convenience only and shall not
constitute a part hereof or affect in any way the meaning or
interpretation of this Agreement.
11.7 ENTIRE AGREEMENT. This Agreement, including the Exhibits and
Schedules hereto; and the other documents and certificates
delivered pursuant to the terms hereof, set forth the entire
agreement and understanding of the parties hereto in respect
of the subject matter contained herein, and supersede all
prior agreements, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto.
11.8 THIRD PARTIES. Except as specifically set forth or referred to
herein, nothing herein expressed or implied is intended or
shall be construed to confer upon or give to any person or
corporation other than the parties hereto and their successors
or assigns, any rights or remedies under or by reason of this
Agreement.
11.9 CONFIDENTIALITY. Merchant and Stockholders will hold and will
cause its consultants and advisors to hold in strict
confidence, unless compelled to disclose by judicial or
administrative process or, in the opinion of its counsel, by
other requirements of law, all documents and information
concerning the other party furnished it by such other party or
its representatives in connection with the transactions
contemplated by this Agreement, including, without limitation,
all letters of intent negotiated among and/or executed by the
parties hereto and/or their affiliates, principals or related
entities and any standstill agreements with respect thereto
(except to the extent that such information can be shown to
have been (i) previously known by the party to which it was
furnished, or (ii) later lawfully acquired from other sources
by the party to which it was furnished), and each party will
not release or disclose such information to any other person,
except its auditors, attorneys, financial advisors, bankers
and other consultants and advisors in connection with this
Agreement. If the transactions contemplated by this Agreement
are not consummated, such confidence shall be maintained
except to the extent such information comes into the public
domain through no fault of the party required to hold it in
confidence, and such information shall not be used to the
detriment of, or in relation to any investment in, the other
party and all such documents (including copies thereof) shall
be returned to the other party immediately upon the written
request of such other party. Each party shall be deemed to
have satisfied its obligation to hold confidential information
concerning or supplied by the other party if it exercises the
same care as it takes to preserve confidentiality for its own
similar information.
11.10 EXPENSES. If the Merger is consummated, Merchant shall pay the
reasonable legal and accounting fees and expenses relating to
the Merger.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed all as of the day and year first above written.
XXXXXXX.XXX, INC.
By: /s/ XXX XXXXXXX
--------------------------------------
Xxx Xxxxxxx
XXXXXXXXXXXXXX.XXX, INC.
By: /s/ XXXXX XXXXXXXX
--------------------------------------
Xxxxx Xxxxxxxx, President
STOCKHOLDERS
/s/ XXX XXXXXX
------------------------------------------
Xxx Xxxxxx
/s/ XXX XXXXXXX
------------------------------------------
Xxx Xxxxxxx
/s/ XXXXX XXXXXXXXX
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Xxxxx Xxxxxxxxx
14.
