AGREEMENT AND PLAN OF MERGER
BY AND AMONG
EBONY & GOLD VENTURES, INC.,
EG ACQUISITIONS CORPORATION
AND
xxxxxxxx.xxx, inc.
TABLE OF CONTENTS
I. THE MERGER.................................................................................................2
ss.1.01 The Merger......................................................................................2
ss.1.02 Effective Time..................................................................................2
ss.1.03 Closing.........................................................................................3
ss.1.04 Articles of Organization and By-Laws............................................................3
ss.1.05 Conversion of Securities........................................................................3
ss.1.06 Closing Deliveries..............................................................................4
ss.1.07 Surrender of Shares.............................................................................4
II. OTHER AGREEMENTS...........................................................................................5
ss.2.01 Tax Free Exchange...............................................................................5
ss.2.02 Stock Option Plan...............................................................................5
ss.2.03 Financing.......................................................................................6
ss.2.04 Conversion of Advances..........................................................................6
ss.2.05 Cash On Hand of Parent..........................................................................7
ss.2.06 Capital Structure...............................................................................7
(a) Authorized Shares........................................................................7
(b) Issued and Outstanding Shares............................................................7
(c) Issued and Outstanding Options and Warrants..............................................8
ss.2.07 Registration Rights.............................................................................9
ss.2.08 Consulting Agreement...........................................................................11
ss.2.09 Board of Directors.............................................................................11
ss.2.10 Hershey Loan...................................................................................11
ss.2.11 Xxxxxxx Debt...................................................................................11
ss.2.12 Change of Name.................................................................................12
ss.2.13 Employment Agreements..........................................................................12
ss.2.13 Use of Proceeds................................................................................12
III. REPRESENTATIONS AND WARRANTIES............................................................................12
ss.3.01 Representations and Warranties of Parent and Merger-Sub........................................12
(a) Organization and Qualification..........................................................13
(b) Organizational Documents; Capital Stock.................................................13
(c) Authority Relative to this Agreement....................................................14
(d) Non-Contravention; Approvals and Consents...............................................15
(e) Financial Statements....................................................................17
(f) NASD Report.............................................................................18
(g) Absence of Certain Changes or Events....................................................19
(h) Absence of Undisclosed Liabilities.....................................................19
(i) Legal Proceedings.......................................................................20
(j) Information Supplied....................................................................20
(k) Compliance with Laws and Orders.........................................................21
(l) Compliance with Agreements; Certain Agreements..........................................21
(m) Employee Benefit Plans..................................................................22
(n) Patents, Trademarks, Et Cetera..........................................................22
i
(o) Insurance...............................................................................22
(p) Labor Matters...........................................................................22
(q) Tangible Property, Business, Assets, etc................................................23
(r) Tax Matters.............................................................................23
(s) Brokers.................................................................................25
(t) Consents Without Any Condition..........................................................25
(u) Present Intention Not to Sell...........................................................25
(v) Subsidiaries............................................................................25
(w) No Material Adverse Change..............................................................26
(x) Leases..................................................................................26
(y) Contracts...............................................................................26
(z) Powers of Attorney......................................................................26
(aa) Insurance and Risk Management...........................................................27
(bb) Environment, Health, and Safety.........................................................28
(cc) Affiliated Transaction..................................................................35
(dd) Government Contracts....................................................................35
(ee) No Illegal Payments, Etc................................................................35
(ff) Books and Records.......................................................................36
(gg) Consents................................................................................36
(hh) Disclosure..............................................................................36
(ii) Accuracy of Information.................................................................36
(jj) Tax Free Transaction....................................................................37
ss.3.02 Representations and Warranties of booktech.....................................................37
(a) Organization and Qualification..........................................................37
(b) Organizational Documents; Capital Stock.................................................38
(c) Authority Relative to this Agreement....................................................39
(d) Non-Contravention; Approvals and Consents...............................................40
(e) Patents, Trademarks, Intangibles........................................................41
(f) Financial Statements....................................................................42
(g) Absence of Certain Changes or Events....................................................42
(h) Absence of Undisclosed Liabilities......................................................43
(i) Legal Proceedings.......................................................................43
(j) Information Supplied....................................................................43
(k) Compliance with Laws and Orders.........................................................44
(l) Compliance with Agreements..............................................................44
(m) Brokers.................................................................................45
(n) Consents Without Any Condition..........................................................45
(o) Tax Matters.............................................................................45
(p) Employee Benefit Plans..................................................................46
(q) Intangibles.............................................................................47
(r) Insurance...............................................................................47
(s) Labor Matters...........................................................................47
(t) Tangible Property, Business, Assets, etc................................................48
(x) Present Intention Not to Sell...........................................................48
(y) Subsidiaries............................................................................48
ii
(z) No Material Adverse Change..............................................................49
(aa) Leases..................................................................................49
(bb) Contracts...............................................................................49
(cc) Powers of Attorney......................................................................49
(dd) Insurance and Risk Management...........................................................49
(ee) Environment, Health, and Safety.........................................................50
(ff) Affiliated Transaction..................................................................57
(gg) Government Contracts....................................................................57
(hh) No Illegal Payments, Etc................................................................57
(ii) Books and Records.......................................................................58
(jj) Consents................................................................................58
IV. COVENANTS.................................................................................................58
ss.4.01 Covenants of Parent and Merger-Sub.............................................................58
(a) Articles of Incorporation and By-Laws...................................................58
(b) Shares, Options and Warrants............................................................58
(c) Dividends and Purchases of Stock........................................................59
(d) Borrowing of Money; Working Capital.....................................................59
(e) Access..................................................................................59
(f) Conduct of Business.....................................................................60
(g) Advice of Changes.......................................................................60
(h) Public Statements.......................................................................61
(i) Other Proposals.........................................................................61
(j) Consents Without Any Condition..........................................................62
(k) Transfer Taxes..........................................................................62
(l) Issuance of Stock.......................................................................63
(m) Directors' and Officers' Insurance......................................................63
(n) OTCBB Listing...........................................................................64
(o) Approval of Board of Directors..........................................................64
(p) SEC Filings.............................................................................64
(q) Reputable Investor......................................................................64
(r) AMEX Listing............................................................................65
(s) Notices and Consents....................................................................65
(t) Written Consent of Sole Stockholder.....................................................65
(u) Confidentiality.........................................................................65
(v) General.................................................................................66
ss.4.02 Covenants of booktech..........................................................................66
(a) Articles of Organization and By-Laws....................................................66
(b) Shares, Options and Warrants............................................................67
(c) Borrowing of Money; Working Capital.....................................................67
(d) Access..................................................................................67
(e) Conduct of Business.....................................................................68
(f) Advice of Changes.......................................................................68
(g) Public Statements.......................................................................68
(h) Securities Law Exemption................................................................69
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(i) Approval of Board of Directors..........................................................69
(j) Break-Up Fee............................................................................69
(k) Stockholders Meeting....................................................................69
(l) Confidentiality.........................................................................70
(m) General.................................................................................70
V. CONDITIONS................................................................................................71
ss.5.01 Conditions to Each Party's Obligation to Effect the Merger.....................................71
(a) Stockholder Approval....................................................................71
(b) State Securities Laws...................................................................71
(c) No Injunctions or Restraints............................................................71
(d) Consents and Approvals..................................................................71
(e) Customary Documents.....................................................................72
ss.5.02 Conditions to Obligation of Parent and Merger-Sub to Effect the Merger.........................72
(a) Representations and Warranties..........................................................72
(b) Performance of Obligations..............................................................73
(c) Other Closing Documents.................................................................73
(d) Review of Proceedings...................................................................73
(e) Legal Action............................................................................73
(f) Certificates............................................................................74
(g) Opinion.................................................................................74
ss.5.03 Conditions to Obligation of booktech to Effect the Merger......................................74
(a) Representations and Warranties..........................................................74
(b) Performance of Obligations..............................................................74
(c) Other Closing Documents.................................................................75
(d) Review of Proceedings...................................................................75
(e) Legal Action............................................................................75
(f) NASD Bulletin Board Listing.............................................................75
(g) Tax-Free Exchanges......................................................................76
(h) Capital.................................................................................76
(i) Consents................................................................................76
(j) Certificates............................................................................76
(k) Opinion.................................................................................76
(l) Due Diligence...........................................................................76
(m) No Material Adverse Change..............................................................77
VI. TERMINATION...............................................................................................77
ss.6.01 Termination....................................................................................77
ss.6.02 Effect of Termination..........................................................................78
VII. INDEMNIFICATION...........................................................................................79
ss.7.01 Indemnification by Parent......................................................................79
ss.7.02 Indemnification by booktech....................................................................79
ss.7.03 Third Party Claims.............................................................................80
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VIII. MISCELLANEOUS.............................................................................................82
ss.8.01 Further Actions................................................................................82
ss.8.02 Availability of Equitable Remedies.............................................................82
ss.8.03 Survival.......................................................................................82
ss.8.04 Modification...................................................................................83
ss.8.05 Notices........................................................................................83
ss.8.06 Waiver ........................................................................................84
ss.8.07 Binding Effect.................................................................................84
ss.8.08 No Third-Party Beneficiaries...................................................................85
ss.8.09 Severability...................................................................................85
ss.8.10 Merger; Assignability..........................................................................85
ss.8.11 Headings.......................................................................................85
ss.8.12 Counterparts; Governing Law; Jurisdiction......................................................85
ss.8.13 Waiver of Jury Trial...........................................................................87
ss.8.14 Expenses ......................................................................................87
ss.8.15 Incorporation of Exhibits and Schedules........................................................87
ss.8.16 Specific Performance...........................................................................87
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
EBONY & GOLD VENTURES, INC.,
EG ACQUISITIONS CORPORATION
AND
xxxxxxxx.xxx, inc.
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), is dated
as of March 31st, 2000, by and among Ebony & Gold Ventures, Inc., a Nevada
corporation, whose address is c/o Verus International Ltd., Hanger 5, 0000 Xxxx
Xxxxx, Xxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0 ("Parent"), EG Acquisitions
Corporation, a Nevada corporation, whose address is c/o Verus International
Ltd., Hanger 5, 0000 Xxxx Xxxxx, Xxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
("Merger-Sub") and xxxxxxxx.xxx, inc., a Massachusetts corporation, whose
address is 00 Xxxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 ("booktech").
Merger-Sub is a wholly owned subsidiary of Parent. booktech shall be the
surviving entity of the proposed merger between Merger-Sub and booktech and, in
such capacity, booktech shall sometimes be referred to herein as the "Surviving
Corporation." Merger-Sub and booktech are collectively referred to herein as the
"Constituent Entities."
W I T N E S S E T H:
WHEREAS, the Board of Directors of booktech and the Boards of
Directors of Parent and Merger-Sub have determined that it is advisable and in
the best interests of their respective stockholders to consummate the business
combination transaction provided for herein, in which Merger-Sub would merge
with and into booktech (the "Merger"); and
WHEREAS, Parent, Merger-Sub and booktech intend that the
Merger constitute a reorganization under the provisions of Section 368 of the
Internal Revenue Code of 1986, as amended (the "Code"), as well as a series of
transactions qualifying under Section 351 of the Code, and that this agreement
shall constitute a plan for purposes of Sections 351 and 368 of the Code.
WHEREAS, Parent, Merger-Sub and booktech desire to make
certain agreements in connection with the Merger;
NOW, THEREFORE, in consideration of the mutual premises,
covenants and agreements set forth in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
I. THE MERGER.
ss.1.01 The Merger
At the Effective Time (as defined in Section 1.02), upon the
terms and subject to the conditions set forth in this Agreement, and in
accordance with the provisions of the Massachusetts Business Corporation Law
(the "MBCL"), and the Nevada Mergers & Acquisitions Law (the "NMAL"), Merger-Sub
shall be merged with and into booktech. booktech shall be the surviving entity
in the Merger, and shall succeed to and assume all the rights and obligations of
Merger-Sub in accordance with the MBCL and the NMAL. The name of the Surviving
Corporation shall be xxxxxxxx.xxx, inc. (Massachusetts).
ss.1.02 Effective Time.
On or after the Closing (as defined in Section 1.03), the
parties shall file two (2) certificates of merger (the "Certificates of Merger")
one each with the Secretaries of State of Massachusetts and Nevada as provided
in the MBCL and NMAL, respectively. The Merger
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shall become effective as soon as the Certificates of Merger have been filed
(the time when the Merger becomes effective being hereinafter referred to as the
"Effective Time").
ss.1.03 Closing.
(a) Subject to the provisions of Section 2.03 hereof, the
closing of the Merger (the "Closing") shall take place at the offices of Camhy
Karlinsky & Xxxxx LLP, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 at 5.00
p.m.. on or before March 31, 2000 (the "Closing Date").
(b) The Closing will be effective as of the Effective Time.
ss.1.04 Articles of Organization and By-Laws.
The Amended and Restated Articles of Organization and Amended
By-Laws attached hereto as Exhibit 1.04(a) and 1.04(b), respectively (the
"Articles of Organization" and "By-Laws") shall become the Articles of
Organization and By-Laws of the Surviving Corporation, in each case until
thereafter changed or amended as provided therein or by applicable law.
ss.1.05 Conversion of Securities.
(a) At the Effective Time, each share of Merger-Sub
outstanding immediately prior to the Closing date shall, by virtue of the Merger
and without any further action on the part of the holders thereof, be converted
into one (1) share of common stock of booktech.
(b) At the Effective Time, 21,810 shares of common stock of
booktech outstanding immediately prior to the Closing Date shall, by virtue of
the Merger and without any further action on the part of the holders thereof, be
canceled and converted into 7,520,690 shares of common stock, par value $.00042
per share, of Parent (the "Common Stock") and 3,190 shares of common stock of
booktech shall be converted into 1,100,000 shares of Series B
3
Preferred Stock par value $.00042 per share of Parent (the "Series B Preferred
Stock"), for an aggregate of 7,520,690 shares of Common Stock and 1,100,000
shares of Series B Preferred Stock, (the "Merger Consideration").
(c) At the Effective Time, the separate existence of
Merger-Sub shall cease. The Surviving Corporation shall continue its corporate
existence under the laws of the Commonwealth of Massachusetts, and Parent shall
be the holder of all the issued and outstanding shares of the Surviving
Corporation capital stock.
(d) At the Effective Time, each outstanding option to purchase
shares of common stock of booktech held by Xxx Xxxxxxxxx ("Xx. Xxxxxxxxx"),
whether or not then exercisable, shall be canceled and converted into an option
to purchase 344.8275862 shares of Common Stock (the "Option"), for an aggregate
of 344,828 shares of Parent Common Stock at an exercise price of $0.29 per
share.
ss.1.06 Closing Deliveries.
At the Closing, there shall be delivered to booktech, Parent
and Merger-Sub the certificates and other documents and instruments required to
be delivered under Article V.
ss.1.07 Surrender of Shares.
(a) Promptly after the Effective Time, Parent shall cause to
be mailed to each individual, partnership, corporation, association, joint stock
company, trust, joint venture, unincorporated organization, or governmental
entity (a "Person") who was, at the Effective Time, a holder of record of shares
entitled to receive the Merger Consideration pursuant to Section 1.05, a form of
letter of transmittal which shall specify (i) that delivery shall be effected,
and risk of loss and title to the certificates evidencing such shares (the
"Certificates") shall pass, only upon proper delivery of the Certificates to
Parent and (ii) shall include instructions for use
4
in effecting the surrender of the Certificates. Upon surrender of a Certificate
to Parent, together with such letter of transmittal, duly completed and validly
executed in accordance with the instructions thereto, and such other documents
as may be required pursuant to such instructions, the holder of such Certificate
shall be entitled to receive in exchange therefor the Merger Consideration for
each share formerly evidenced by such Certificate, payable to such holder in
accordance with the provisions of Sections 1.05 hereof and such Certificate
shall then be canceled. If payment of the Merger Consideration is to be made to
a Person other than the Person in whose name the surrendered Certificate is
registered on the stock transfer books of booktech, it shall be a condition of
payment that the Certificate so surrendered shall be endorsed properly or
otherwise be in proper form for transfer.
(b) If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and subject to such other
conditions as the Board of Directors of Parent may impose, Parent shall issue in
exchange for such lost, stolen or destroyed Certificate the Merger Consideration
deliverable in respect thereof as determined in accordance herewith.
II. OTHER AGREEMENTS.
ss.2.01 Tax Free Exchange.
The parties will seek to accomplish the Merger and the related
transactions as tax-free exchanges by the holders of the shares of booktech.
ss.2.02 Stock Option Plan.
As of the Closing Date, the 2000 Stock Option Plan attached
hereto as Exhibit 2.02 (the "Stock Option Plan") shall have been adopted by
Parent, pursuant to which options to purchase an aggregate of 5,000,000 shares
of Common Stock shall be reserved for issuance.
5
ss.2.03 Financing.
On or before the Closing Date, and as a condition to the
Closing, Parent, pursuant to Regulation S or Rule 506 of Regulation D of the
Securities Act of 1933, as amended (the "Securities Act"), shall have issued and
sold 4,666,667 shares of Common Stock for a total aggregate sale price of
$7,000,000 (the "Financing"), provided that, in lieu of cash, a portion of such
amount may be evidenced by the assignment by Verus International Ltd., a
Barbados corporation ("Verus") or its assignees, to Parent, of its right to
repayment of advances (the "Advances") made to booktech, in the aggregate amount
of $2,000,000. In connection with the Financing the purchasers shall receive
warrants to purchase in the aggregate 833,333 shares of Common Stock (the
"Warrants"), at an exercise price of $1.50 per share. The Warrants shall be
exercisable beginning 180 days following the Closing and shall terminate on the
second anniversary of the Closing.
ss.2.04 Conversion of Advances.
If the Closing does not occur on or before March 31, 2000, all
Advances outstanding on March 31, 2000, or on the earlier date of termination of
this Agreement pursuant to Sections 2.03 and Article VI (other than termination
by booktech pursuant to Section 6.01(d)) shall automatically be converted into
equity of booktech based on a pre-money valuation of $7,500,000 of booktech, and
this agreement shall be terminated. In the event booktech terminates the
Agreement pursuant to Section 6.01(d) hereof, the Advances then outstanding
shall at booktech's option, either be converted into equity of booktech as set
forth in this Section 2.04 or shall be paid in full in immediately available
funds, together with all accrued and unpaid interest thereon.
6
ss.2.05 Cash On Hand of Parent.
As of the Closing Date, and as of the Effective Time, Parent
shall have cash on hand of not less than $7,000,000 less (i) the amount of any
portion of the Advances contributed to Parent in exchange for the issuance of
Common Stock and Warrants; (ii) the reasonable fees and expenses incurred by
Verus and/or Parent and in connection with the transactions contemplated hereby,
which shall not exceed $100,000, (iii) the reasonable fees and expenses paid to
Camhy Xxxxxxxxx & Xxxxx LLP in connection with the Merger and the related
transactions and (iv) the reasonable fees and expenses incurred by booktech in
connection with transactions contemplated hereby.
ss.2.06 Capital Structure.
As of the Closing Date, and as of the Effective Time, Parent
shall have the following capital structure:
(a) Authorized Shares.
59,523,810 shares of capital stock, consisting of (i)
54,523,810 shares of Common Stock and (ii) 5,000,000 shares of blank check
convertible preferred stock; and
(b) Issued and Outstanding Shares.
(i) 4,666,667 shares of Common Stock, issued to the
purchasers of the Common Stock pursuant to the Financing with
the names of such purchasers and the amount of Common Stock
owned as set forth on Schedule 2.06(b)(i) (the "Purchasers");
7
(ii) 5,000,000 shares of authorized issued and
outstanding shares of Common Stock owned of record and
beneficially by the existing shareholders of Parent listed on
Schedule 2.06(b)(ii) attached hereto;
(iii) 1,379,310 shares of Common Stock, issued to the
holders of membership interests of Virtuosity, in exchange for
property of Virtuosity contributed to Parent pursuant to the
Contribution Agreement by and among Virtuosity and Parent in
the form attached hereto as Exhibit 2.06(b)(iii) (the
"Contribution Agreement");
(iv) 7,520,690 shares of Common Stock, and 1,100,000
shares of Series B Preferred Stock issued to the former
holders of common stock of booktech, in exchange for all their
capital stock in booktech; and
(v) 2,135,301 shares of Series A Preferred Stock of
the Parent (the "Series A Preferred Stock"), issued to the
former holders of $2,815,000 principal amount of notes of
booktech (the "Hershey Notes"), in exchange for all such
Hershey Notes and accrued interest thereon. Parent shall
reserve the aggregate number of shares of Common Stock
underlying the Series A Preferred Stock for fulfillment
thereof in the event such Series A Preferred Stock is
converted.
(c) Issued and Outstanding Options and Warrants.
(i) Warrants in the form attached hereto as Exhibit
2.06(c) to purchase 833,333 shares of Common Stock at an
exercise price of $1.50 per share, issued to the Purchasers of
Common Stock pursuant to the Financing. Parent shall reserve
the aggregate number of shares of Common Stock underlying the
Warrants for issuance upon exercise of such Warrants; and
8
(ii) the Option to purchase 344,828 shares of Common
Stock at an exercise price of $0.29 per share, issued to Xxx
Xxxxxxxxx.
ss.2.07 Registration Rights.
(a) Subject to the completion of an audit and the preparation
and delivery to Parent of all required audited financial statements by the
Surviving Corporation's Auditors, Parent shall use its best efforts to file and
effect a registration statement (including, without limitation, the execution of
an undertaking to file post-effective amendments, appropriate qualification
under applicable blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Exchange Act
of 1934, as amended, (the "Exchange Act") and any other governmental
requirements or regulations), within ninety (90) days from the date of the
Closing, but in no event later than one hundred twenty (120) days from the date
of the Closing, with the Securities and Exchange Commission (the "SEC") relating
to (i) 4,666,667 shares of Common Stock issued pursuant to the Financing; (ii)
an aggregate of 327,586 shares of Common Stock, representing five percent (5%)
of Common Stock and the Common Stock underlying the Series B Preferred Stock
held by the former holders of equity of booktech and Virtuosity, excluding the
shares of Common Stock held by the officers of Parent and their immediate family
members, (the "Affiliates"), on a pro rata basis; and (iii) an aggregate of
21,353 shares of Common Stock representing five percent (5%) of the Common Stock
underlying the Series A Preferred Stock.
(b) Parent shall use its best efforts to file and effect a
registration statement with the SEC (including, without limitation, the
execution of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws and
appropriate compliance with applicable regulations issued under the Exchange Act
and any
9
other governmental requirements or regulations), within thirty (30) days after
the exercise of the Warrants in part or in whole (but not for less than 333,333
shares of common stock) or within six (6) months of the effective date of the
registration statement filed pursuant to Section 2.07(a) above, whichever is
sooner, relating to (i) the shares of Common Stock underlying the Warrants; (ii)
an aggregate of 655,172 shares of Common Stock, representing ten percent (10%)
of Common Stock and the Common Stock underlying the Series B Preferred Stock
held by the former holders of equity of booktech and Virtuosity, excluding the
shares of Common Stock held by the Affiliates, on a pro rata basis; (iii) an
aggregate of 344,827 shares of Common Stock, representing ten percent (10%) of
the shares of Common Stock held by the Affiliates, on a pro rata basis; provided
that as a condition to inclusion of any Affiliates shares in such registration,
each Affiliate shall agree to execute a lock-up agreement substantially in the
form of Exhibit 2.07(b) hereto (the "Lock-Up Agreement"), pursuant to which each
such Affiliate shall agree not to sell or otherwise dispose of the shares of
Common Stock or any direct or indirect interest therein for a period of one (1)
year following the Closing; (iv) an aggregate of 42,706 shares of Common Stock
representing ten percent (10%) of the Common Stock underlying the Series A
Preferred Stock; and (v) an aggregate of 34,482 shares of Common Stock,
representing ten percent (10%) of Common Stock underlying Xx. Xxxxxxxxx'x
Options; provided that as a condition to inclusion of his shares in such
registration, Xx. Xxxxxxxxx agrees to execute a Lock-Up Agreement, pursuant to
which he shall agree not to sell or otherwise dispose of Common Stock or any
direct or indirect interest therein for a period of one year following the
Closing. Parent shall use its best efforts to have each such registration
statement declared effective within seventy-five (75) days after filing with the
SEC.
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ss.2.08 Consulting Agreement.
At the Closing, Parent and Verus shall enter into a consulting
agreement (the "Consulting Agreement"), for a term of two (2) years, which shall
provide that, for services rendered in connection with such agreement, Verus
shall be paid $15,000 per month. The form of Consulting Agreement is attached
hereto as Exhibit 2.08.
ss.2.09 Board of Directors.
The Board of Directors of Parent and the Surviving Corporation
shall consist of seven (7) persons, three (3) of whom shall be selected by
Verus, four (4) of whom shall be selected by the former equity holders of
booktech. Directors nominated at the 2000 Annual Meeting of Parent shall consist
of seven (7) persons, three (3) of whom shall be nominated by Verus, four (4) of
whom shall be nominated by the former equity holders of booktech.
ss.2.10 Hershey Loan.
Xxxxx Xxxxxxxx, Xxxxxx Xxxxxxx, Xxxxxx Xxxxxxx, Xxxxx X.
Xxxxxxx Trust, Xxxx X. Xxxxxxx Trust, Xxxxx X. Xxxxxxx Trust, Xxxxxx X. Xxxxxxx
and Xxxx Xxxx Xxxxxxx (together, the "Hershey Investors") have loaned an
aggregate of $2,815,000 to booktech (the "Hershey Loan"). At the Closing, the
Hershey Loan, including all accrued but unpaid interest, which together with the
Hershey Loan equals approximately $3,216,171, will be contributed to Parent in
exchange for an aggregate of 2,135,301 shares of Series A Preferred Stock.
ss.2.11 Xxxxxxx Debt.
All outstanding obligations of Xxxxxx X. Xxxxxxx incurred on
behalf of booktech, not to exceed $325,000, shall be paid by Surviving
Corporation upon the Closing.
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ss.2.12 Change of Name.
Contemporaneously with the Merger the name of Parent shall be
changed to xxxxxxxx.xxx, inc. and the name of booktech shall be changed to
xxxxxxxx.xxx, inc. (Massachusetts).
ss.2.13 Employment Agreement.
At the Closing, Parent shall enter into an employment
agreement with Xxxxxx X. Xxxxxxx, Ph.D. ("Xx. Xxxxxxx"), attached hereto as
Exhibit 2.13(a) pursuant to which Xx. Xxxxxxx shall serve as President and Chief
Executive Officer of Parent and Surviving Corporation, and on such other terms
and conditions as shall be reasonably acceptable to Parent and Xx. Xxxxxxx (the
"Xxxxxxx Employment Agreement").
ss.2.14 Use of Proceeds.
Attached hereto as Exhibit 2.14 is a description of the
projected use of proceeds of the Financing (the "Use of Proceeds") by booktech
for its 2000 fiscal year. Following the Closing, Parent and booktech shall not
make any expenditure or incur any liability not expressly contemplated by the
Use of Proceeds without the prior approval of the Board of Directors. The Use of
Proceeds may be amended from time to time upon the unanimous vote of the Board
of Directors.
III. REPRESENTATIONS AND WARRANTIES.
ss.3.01 Representations and Warranties of Parent and
Merger-Sub.
Parent and Merger-Sub represent and warrant to booktech as
follows:
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(a) Organization and Qualification.
Parent and Merger-Sub are corporations duly organized, validly
existing and in good standing under the laws of the State of Nevada and have
full corporate power and authority to conduct their businesses as and to the
extent now conducted and to own, use and lease their assets and properties. As
of the Closing date, Parent and Merger-Sub will be duly qualified, licensed or
admitted to do business and are in good standing in each jurisdiction where the
nature of the activities conducted by it or the character of the property owned,
leased or operated by it make such qualification necessary or appropriate.
Except for Parent's ownership of Merger-Sub, Parent and Merger-Sub do not
directly or indirectly own any equity or similar interest in, or any interest
convertible into or exchangeable or exercisable for, any equity or similar
interest in, any corporation, partnership, joint venture or other business
association or entity. Other than Parent's ownership of Merger-Sub, Parent and
Merger-Sub have no subsidiaries and own no interest either directly or
indirectly in any subsidiaries.
(b) Organizational Documents; Capital Stock.
(i) Attached hereto as Exhibits 3.01(b)(i)(A) and
3.01(b)(i)(B) are true and complete copies of the articles of
incorporation and by-laws of Parent and of Merger-Sub,
respectively, as in effect on the date hereof.
(ii) Attached as Schedule 3.01(b)(ii) are true and
complete tables of all stockholders of Parent and of
Merger-Sub as of the date hereof.
(iii) As of the Closing Date, the authorized capital
stock of Parent will consist solely of 54,523,810 shares of
Common Stock and 5,000,000 shares of Preferred Stock.
Immediately prior to the Closing, 5,000,000 shares of Common
13
Stock will be issued and outstanding, free and clear of any
Liens (as defined in Section 3.01(d)). No shares are held as
treasury stock. There are no outstanding options warrants,
calls, subscriptions, rights, agreements or other commitments
of any character obligating Parent to issue or sell any shares
of capital stock of Parent, or to grant, extend or enter into
any option with respect thereto. The shares of Common Stock
and Preferred Stock issuable to the holders of booktech shares
and the Hershey Investors, respectively, pursuant to Article I
hereof, will be, when issued in accordance with this
Agreement, duly authorized, validly issued, fully paid and
non-assessable. The outstanding shares of Common Stock are
eligible for quotation on the Over-the-Counter Bulletin Board
(the "OTCBB") of the National Association of Securities
Dealers, Inc. (the "NASD").
(iv) There are no outstanding contractual obligations
of Parent or Merger-Sub to repurchase, redeem or otherwise
acquire any shares of Common Stock or Merger-Sub common stock
respectively.
(v) There are no debt obligations of Parent or
Merger-Sub of any nature whatsoever, and as of the Closing
Date, neither Parent nor Merger-Sub will have any debt,
liabilities, obligations, or contingent obligations of any
nature whatsoever, except as set forth on Schedule 3.01(b)(v).
Neither Parent nor Merger-Sub are guarantors or otherwise
liable for any liability or obligation of any other person.
(c) Authority Relative to this Agreement.
Parent and Merger-Sub have full corporate power and authority
to enter into this Agreement and to perform their respective obligations
hereunder and to consummate the
14
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by Parent and Merger-Sub and the consummation by Parent and
Merger-Sub of the Merger and the transactions contemplated hereby have been duly
and validly approved by the respective Boards of Directors of Parent and
Merger-Sub and, prior to the Closing, will have been duly and validly approved
by the sole stockholder of Merger-Sub, and no other corporate proceedings on the
part of Parent or Merger-Sub are necessary to authorize the execution, delivery
and performance of this Agreement by Parent and Merger-Sub and the consummation
by Parent and Merger-Sub of the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by Parent and Merger-Sub, and
constitutes a legal, valid and binding obligation of Parent and Merger-Sub
enforceable against Parent and Merger-Sub in accordance with its terms except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance or transfer or similar laws affecting the enforcement of
creditors rights generally and general principles of equity (whether considered
in a proceeding at law or in equity.
(d) Non-Contravention; Approvals and Consents.
(i) The execution and delivery of this Agreement by
Parent and Merger-Sub does not, and the performance by Parent
and Merger-Sub of their obligations hereunder and the
consummation of the transactions contemplated hereby will not,
conflict with, result in a violation or breach of, constitute
(with or without notice or lapse of time or both) a default
under, result in, or give to any person any right of payment
or reimbursement, termination, cancellation, modification or
acceleration of, or result in the creation or imposition of
any lien, claim, mortgage, encumbrance, pledge, security
interest equity or change of any
15
kind (any of the foregoing, a "Lien") on any of the assets or
properties of Parent or Merger-Sub under any of the terms,
conditions or provisions of (x) the articles of incorporation
or by-laws of Parent or Merger-Sub; (y) any statute, law,
rule, regulation or ordinance (collectively, "Laws"), or any
judgement, decree, order, writ, permit or license
(collectively, "Orders"), of any court, tribunal, arbitrator,
authority, agency, commission, official or other
instrumentality of the United States, any foreign country, or
any domestic or foreign state, country, city or other
political subdivision (a "Governmental or Regulatory
Authority"), applicable to Parent or Merger-Sub or any of
their respective assets or properties; or (z) any note, bond,
mortgage, security agreement, indenture, license, franchise,
permit, concession, contract, lease (capital or operating) or
other instrument, obligation or agreement of any kind
(collectively, "Contracts") to which either Parent or
Merger-Sub is a party or by which Parent or Merger-Sub or any
of its assets or properties are bound, excluding from the
foregoing clauses (y) and (z) conflicts, violations, breaches,
defaults, terminations, modifications, accelerations and
creations and impositions of Liens, which individually or in
the aggregate, could not be reasonably expected to have a
Material Adverse Effect (as defined in Section 3.02(a)) on
Parent or Merger-Sub or on their ability to consummate the
transactions contemplated by this Agreement.
(ii) Except for (x) filings with various state
authorities that are required in connection with the
transactions contemplated under this Agreement, (y) the filing
of the Certificates of Merger and other appropriate merger
documents as required by the MBCL with the Secretary of State
of Massachusetts and as
16
required by the NMAL with the Secretary of State of Nevada,
and appropriate documents with the relevant authorities of
other states in which the Constituent Entities are qualified
to do business, and (z) matters disclosed in Schedule
3.01(d)(ii), no consent, approval, or action of, filing with
or notice to any Governmental or Regulatory Authority or other
public or private third party is necessary or required under
any of the terms, conditions or provisions of any Law or Order
of any Governmental or Regulatory Authority or any Contract to
which Parent or Merger-Sub is a party or by which Parent or
Merger-Sub or any of their respective assets or properties is
bound for the execution and delivery of this Agreement by
Parent or Merger-Sub, the performance by Parent or Merger-Sub
of their respective obligations hereunder or the consummation
of the transactions contemplated hereby, except for such
consents, approvals or actions of, filing with or notices to
any Governmental or Regulatory Authority or other public or
private third party, the failure of which to make or obtain
could not reasonably be expected to have a Material Adverse
Effect on Parent or Merger-Sub or on Parent's and Merger-Sub's
ability to consummate the transactions contemplated by this
Agreement.
(e) Financial Statements.
Parent has delivered to booktech true, correct and complete
copies of the following: the audited balance sheet of Parent as of December 31,
1998 and December 31, 1999 (the "Parent Balance Sheets"); the audited statement
of operations of Parent for the fiscal years ended December 31, 1998 December
31, 1999; the
17
audited statement of stockholders' equity of Parent for the fiscal years ended
January 1, 1998 to December 31, 1998 and the unaudited statements of
stockholders' equity of Parent for the period January 1, 1999 to January 31,
2000; and the audited statement of cash flows of Parent for the period January
1, 1998 to December 31, 1998 and the unaudited statement of cash flows of Parent
for the period January 1, 1999 to January 31, 2000 (together the "Parent
Financial Statements"). The Parent Financial Statements were prepared in
accordance with generally accepted accounting principles ("GAAP") applied on a
consistent basis during the periods involved (except as may be indicated therein
or in the notes thereto), and are correct, complete and fairly present in all
material respects the financial condition, assets, liabilities, stockholders
equity and results of operations of Parent for the periods indicated and are
consistent with the books and records of Parent, subject to normal and recurring
year end adjustments.
(f) NASD Report.
(i) Parent has delivered to booktech a true, correct
and complete copy of Parent's information report filed with
the OTCBB pursuant to Rule 6740 (the "Rule"), as promulgated
by the NASD, together with all amendments thereof and
supplements thereto (as such document has since the time of
its filing been amended or supplemented), the ("NASD Report"),
which is the only document (other than preliminary material)
that Parent was required to file with the NASD since such
date. As of its date, the NASD Report (i) complied as to form
in all material respects with the requirements of the Rule,
and (ii) did not contain any untrue statement of a material
fact or omit to state a material fact required to be
18
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
(ii) As of the date hereof, Common Stock is eligible
for quotation on the OTCBB and Parent is current in all of its
reporting requirements under the Securities Exchange Act of
1934.
(iii) No quotation is being submitted or published,
directly or indirectly, on behalf of Parent or any director or
officer, or any person, directly or indirectly, who is the
beneficial owner of more than ten percent (10%) of the
outstanding shares of any equity security of Parent.
(g) Absence of Certain Changes or Events.
Except as set forth in Schedule 3.01(g) hereto, (i) since
December 31, 1999, no change, event or development or combination of changes or
developments (including any worsening of any condition currently existing) has
occurred or is reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect on Parent and Merger-Sub, and (ii) between such date and
the date hereof Parent and Merger-Sub have not conducted any material operating
business.
(h) Absence of Undisclosed Liabilities.
Except for matters reflected or reserved against in the Parent
Balance Sheets included in the Parent Financial Statements or as otherwise set
forth on Schedule 3.01(h), neither Parent nor Merger-Sub had at such date and
have not incurred since that date, any material liabilities or obligations
(whether absolute, accrued, contingent, fixed or otherwise, or whether due or to
become due) of any nature, except liabilities or obligations which were incurred
in
19
connection with this Agreement or in the ordinary course of business consistent
with past practice.
(i) Legal Proceedings.
Except as set forth on Schedule 3.01(i), there are no actions,
suits, arbitrations or proceedings pending or, to the knowledge of Parent or
Merger-Sub, threatened against, relating to or affecting, nor to the knowledge
of Parent or Merger-Sub, are there any Governmental or Regulatory Authority
investigations or audits pending or threatened against, relating to or
affecting, Parent or Merger-Sub, any of their officers, directors, assets or
properties which, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect on Parent or Merger-Sub or on the ability of
Parent or Merger-Sub to consummate the transactions contemplated by this
Agreement. Neither Parent nor Merger-Sub is subject to any judgment, decree,
court order or writ of any Governmental or Regulatory Authority.
(j) Information Supplied.
Nothing in this Agreement or any schedule, annex, certificate,
document or statement in writing which has been supplied by or on behalf of
Parent or Merger-Sub, in connection with the transactions contemplated hereby,
contains any untrue statement of a material fact, or omits any statement of a
material fact required to be stated or necessary in order to make the statements
contained herein or therein not misleading. There is no fact known to Parent or
Merger-Sub which materially and adversely affects Parent or Merger-Sub, which
has not been set forth in this Agreement or in the schedules, exhibits, annexes,
certificates, documents or statements in writing furnished by Parent or
Merger-Sub in connection with the transactions contemplated by this Agreement.
20
(k) Compliance with Laws and Orders.
Parent and Merger-Sub hold all permits, licenses, variances,
exemptions, orders and approvals of all Governmental and Regulatory Authorities
necessary for the lawful conduct of their businesses (the "Permits"), except for
failures to hold such permits, licenses, variances, exemptions, orders and
approvals which, individually or in the aggregate, do not and are not reasonably
expected to have a Material Adverse Effect on Parent or Merger-Sub. Parent and
Merger-Sub are in compliance with the terms of the Permits, except failures so
to comply which, individually or in the aggregate, do not have and are not
reasonably expected to have a Material Adverse Effect on Parent or Merger-Sub.
Parent and Merger-Sub are not in violation of, or in default under, any Law or
Order of any Governmental or Regulatory Authority except for violations which,
individually or in the aggregate, do not and are not reasonably expected to have
a Material Adverse Effect on Parent or Merger-Sub.
(l) Compliance with Agreements; Certain Agreements.
Neither Parent nor Merger-Sub, nor to the knowledge of Parent
or Merger-Sub, any other party thereto, is in breach or violation of, or in
default in the performance or observance of any term or provision of and no
event has occurred which, with notice or lapse of time or both, is reasonably
expected to result in a default under, (x) the articles of incorporation or
by-laws of Parent or Merger-Sub; or (y) any material Contract to which Parent or
Merger-Sub is a party or by which Parent or Merger-Sub or any of their assets or
properties are bound, except in the case of clause (y) for breaches, violations
and defaults which, individually or in the aggregate, do not and are not
reasonably expected to have a Material Adverse Effect on Parent or Merger-Sub.
21
(m) Employee Benefit Plans.
Neither Parent nor Merger-Sub has or contributes to any
pension, profit-sharing, option, other incentive plan, or any other type of
employee benefit plan, or has any obligation to or customary arrangement with
employees for bonuses, incentive compensation, vacations, severance pay, sick
pay, sick leave, insurance, service award, relocation, disability, tuition
refund or other benefits, whether oral or written.
(n) Patents, Trademarks, Et Cetera.
Neither Parent nor Merger-Sub has any Intangibles (as defined
in ss.3.02(e) hereof).
(o) Insurance.
Neither Parent nor Merger-Sub has key-person life insurance or
any directors' and officers' liability or other insurance policies that insure
the business, operations, properties, or assets of Parent or Merger-Sub, except
as otherwise disclosed herein.
(p) Labor Matters.
Parent has no employees. Merger-Sub has no employees. The
positions and salaries of all employees of Parent and Merger-Sub are set forth
on Schedule 3.01(p)(i). To the knowledge of Parent and Merger-Sub, no executive,
key employee, or group of employees has any plans to terminate employment with
either Parent or Merger-Sub. Parent and Merger-Sub have not experienced any
labor disputes or work stoppage due to labor disagreements. Parent and
Merger-Sub are in compliance with all applicable laws respecting employment and
employment practices, terms and conditions of employment and wages and hours and
have not been and are not engaged in any unfair labor practice as defined in the
National Labor Relations
22
Act, as amended, the violation of which could have a Material Adverse Effect.
There is no unfair labor practice charge or complaint against either Parent or
Merger-Sub pending or threatened before the National Labor Relations Board. No
grievance which might have a Material Adverse Effect nor any arbitration
proceeding arising out of or under any collective bargaining agreement is
pending and no pending claims therefore have been made. Except as disclosed in
Schedule 3.01(p)(ii), no collective bargaining agreement of Parent and
Merger-Sub restricts Parent or Merger-Sub from relocating, closing or
subcontracting any of its operations.
(q) Tangible Property, Business, Assets, etc.
Except as set forth in Schedule 3.01(q) and except as
contemplated by this Agreement, neither Parent nor Merger-Sub has, from the date
of its respective inception, ever owned any material property (both real and
personal), conducted any material business, owned any material assets, conducted
any operations, or incurred any material liabilities.
(r) Tax Matters.
(i) Except as set forth in Schedule 3.01(r), Parent
and Merger-Sub have filed all tax returns to be filed by
applicable law prior to the Closing. All tax returns were
(and, as to tax returns not filed as of the date hereof, will
be) true, complete and correct and filed on a timely basis.
Parent and Merger-Sub (x) have paid all taxes due, or claimed
or asserted in writing by any taxing authority to be due, for
the periods covered by such tax returns or (y) have duly and
fully provided reserves (in accordance with GAAP, adequate to
reflect all such taxes.
(ii) Parent and Merger-Sub have established (and
until the Closing will maintain) on their books and records
reserves in accordance with GAAP adequate
23
to reflect all material taxes not yet due and payable. Parent
has made available to booktech complete and accurate copies of
all work papers associated with the calculation of Parent's
and the Merger Sub's tax reserves.
(iii) There are no tax liens upon the assets of
Parent and Merger-Sub.
(iv) Parent and Merger-Sub have not requested (and no
request has been made on their behalf) any extension of time
within which to file any material tax return.
(v) (A) No income tax returns have been examined by
any taxing authorities for any periods; and (B) no deficiency
for any material taxes has been suggested, proposed, asserted,
or assessed against Parent or Merger-Sub that has not been
resolved and paid in full.
(vi) No audits or other administrative proceedings or
court proceedings are presently pending with regard to any
taxes or tax returns of Parent or Merger-Sub.
(vii) To the extent requested by booktech, Parent has
made available to booktech (or, in the case of tax returns to
be filed on or before the Closing, will make available)
complete and accurate copies of all tax returns and associated
work papers filed by or on behalf of Parent or Merger-Sub for
all taxable years ending on or prior to the Closing.
(viii) No agreements relating to allocating or
sharing of any taxes have been entered into by Parent or
Merger-Sub.
24
(ix) Parent or Merger-Sub have not entered into any
transactions that could give rise to an understatement of any
tax.
(s) Brokers.
All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by Parent and Merger-Sub
and their affiliates directly with booktech, without the intervention of any
person on behalf of Parent or Merger-Sub and their affiliates in such manner as
not to give rise to any valid claim by any person against Parent, Merger-Sub,
booktech or the Surviving Corporation for a finder's fee, brokerage commission
or similar payment, except as specifically set forth in Schedule 3.01(s).
(t) Consents Without Any Condition.
Parent and Merger-Sub have not made any agreement or reached
any understanding not approved by booktech as a condition for obtaining any
consent, authorization, approval, order, license, certificate or permit required
for the consummation of the transactions contemplated by this Agreement.
(u) Present Intention Not to Sell.
To the best of Parent's knowledge, none of the Purchasers of
Common Stock and Warrants has a present intention to sell their Common Stock or
Warrants, as the case may be.
(v) Subsidiaries.
Except for Merger-Sub, Parent does not have any Subsidiaries.
Merger-Sub does not have any Subsidiaries. For purposes of this Section 3.01(v),
"Subsidiary" shall mean: (i) any corporation at least a majority of whose
outstanding voting stock is owned, directly or indirectly, by such Person or by
one or more of its Subsidiaries, or by such Person and one or
25
more of its Subsidiaries, (ii) any general partnership, joint venture or similar
entity, at least a majority of whose outstanding partnership or similar
interests shall at the time be owned by such Person, or by one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries and (iii)
any limited partnership of which such Person or any of its Subsidiaries is a
general partner. For the purposes of this definition, "voting stock" means
shares, interests, participations or other equivalents in the equity interest
(however designated) in such Person having ordinary voting power for the
election of a majority of the directors (or the equivalent) of such Person,
other than shares, interests, participations or other equivalents having such
power only by reason of contingency.
(w) Reserved
(x) Leases.
Neither Parent nor Merger-Sub leases or subleases any real
property.
(y) Contracts.
Neither Parent or Merger-Sub is a party to any material
contract or agreement with any third party except as contemplated by this
Agreement.
(z) Powers of Attorney.
There are no outstanding powers of attorney executed on behalf
of either Parent or Merger-Sub in respect of Parent or Merger-Sub, their assets,
liabilities or business or their shares of capital stock.
26
(aa) Insurance and Risk Management.
Schedule 3.01(aa) sets forth the following information with
respect to each insurance policy (including policies providing property,
casualty, liability, and workers' compensation coverage and bond and surety
arrangements) to which the business operations of Parent or Merger-Sub have been
a party, a named insured, or otherwise the beneficiary of coverage from the
period from December 31, 1998 to the date hereof:
(i) the name , address, and telephone number of the
agent;
(ii) the name of the insurer, the name of the
policyholder, and the name of each covered insured;
(iii) the policy number, the period of coverage and
premium; and
(iv) a description of any retrospective premium
adjustments or other loss-sensitive premium arrangements.
With respect to each such insurance policy: (i) the policy is legal, valid,
binding, enforceable, and in full force and effect; (ii) the transactions
contemplated hereby will not result in the cancellation or modification of such
policies; (iii) neither Parent nor Merger-Sub nor any other party to the policy
is in breach or default (including with respect to the payment of premiums or
the giving of notices), and no event has occurred which, with notice or the
lapse of time, would constitute such a breach or default, or permit termination,
modification, or acceleration, under the policy; (iv) Parent has delivered true
and complete copies of all policies and related indemnity or premium payment
agreements to booktech; (v) the policy has not been amended or modified and no
riders have been issued in respect of such policies referred to in (iv) above
without the consent of booktech; and (vi) no party to the policy has repudiated
any provision
27
thereof. Schedule 3.01(aa) describes any self-insurance arrangements affecting
either Parent or Merger-Sub.
(bb) Environment, Health, and Safety.
(i) Except as disclosed in Schedule 3.01(bb):
1. Parent and Merger-Sub are and have been
in compliance with all applicable Environmental Laws
and Safety Laws;
2. Parent and Merger-Sub have obtained, and
are and have been in material compliance with the
conditions of, all Environmental Permits required for
the continued conduct of the business of Parent and
Merger-Sub in the manner now conducted and presently
proposed to be conducted;
3. Parent and Merger-Sub have filed all
required applications, notices and other documents
necessary to effect the timely renewal or issuance of
all Environmental Permits for the continued conduct
of the business of Parent and Merger-Sub in the
manner now conducted and presently proposed to be
conducted;
4. there are no past or present events,
conditions or circumstances, including, without
limitation, to the knowledge of Parent and
Merger-Sub, pending changes in any Environmental Law
or Permit or Safety Laws, that are likely to
interfere with or otherwise affect the business of
Parent and Merger-Sub's business in the manner now
28
conducted or which would interfere with compliance
with any Environmental Law or Permit or Safety Law;
5. there are no circumstances or conditions
present at or arising out of the present or former
assets, properties, leaseholds, businesses or
operations of Parent or Merger-Sub in respect of
off-site storage, transportation or disposal of, or
any off-site Release of, a Chemical Substance which
reasonably may be expected to give rise to any
Environmental Liabilities and costs;
6. there are no circumstances or conditions
present at or arising out of the present or former
assets, properties, leaseholds, businesses or
operations of Parent and Merger-Sub, including but
not limited to any on-site Storage, use, disposal or
Release of a Chemical Substance, which reasonably may
be expected to give rise to any Environmental
Liabilities and Costs or Safety Liability and Costs;
7. none of Parent or Merger-Sub or the
present or past assets, properties, businesses,
leaseholds or operations of Parent or Merger-Sub has
received or is subject to, or within the past three
years has been subject to, any outstanding order,
decree, judgment, complaint, agreement, claim,
citation, or notice or is subject to any ongoing
judicial or administrative proceeding indicating that
Parent and Merger-Sub, or the past and present assets
of Parent or Merger-Sub are or may be: (A) in
violation of any Environmental Law; (B) in violation
of any Safety Laws; (C) responsible for the on-site
or off-site storage or Release of any Chemical
Substance;
29
or, (D) liable for any Environmental Liabilities and
Costs or Safety Liabilities and Costs;
8. none of Parent or Merger-Sub have any
reason to believe that Parent or Merger-Sub will
become subject to a matter identified in subsection
(7); and, no investigation or review with respect to
such matters is pending or, to the knowledge of
Parent or Merger-Sub, is threatened, nor has any
authority or other third-party indicated an intention
to conduct the same;
9. neither the business of Parent nor
Merger-Sub nor any of their properties or assets is
subject to, or as a result of the transactions
contemplated by this Agreement will be subject to,
the requirements of any Environmental Laws which
require notice, disclosure, cleanup or approval prior
to transfer of the shares pursuant to the Merger or
the business of Parent or Merger-Sub or which will
impose Liens on any such asset or property or
otherwise interfere with or affect the business of
Parent and Merger-Sub;
10. Schedule 3.01(bb)(10) lists all property
presently or previously leased, owned or operated by
Parent and Merger-Sub and identifies all such
property (and the area within that property) that has
been used by Parent or Merger-Sub or by any other
Person (including a prior owner or operator) for the
storage or disposal of Chemical Substances;
30
11. Schedule 3.01(bb)(11) lists all off-site
locations, including, without limitation, commercial
waste disposal facilities or municipal landfills, to
which or at which Chemical Substances originating
from Parent or Merger-Sub, or their assets,
properties or business have been sent (or otherwise
have come to be located) in amounts that would
require a waste manifest under the Resource
Conservation and Recovery Act of 1976 as now in
effect for treatment, storage, disposal, reuse or
recycling;
12. Schedule 3.01(bb)(12) sets forth a list
of all underground storage tanks owned or operated at
any time by Parent or Merger-Sub and, except as
disclosed in Schedule 3.01(bb)(12), no such tank is
leaking or has leaked at any time in the past, and
there is no pollution or contamination of the
Environment caused by or contributed to or threatened
by a Release of a Chemical Substance from any such
tank; and
13. Schedule 3.01(bb)(13) lists all
environmental audits, inspections, assessments,
investigations or similar reports in Parent's or
Merger Sub's possession or of which Parent and
Merger-Sub are aware relating to Parent or
Merger-Sub's assets, properties or business or the
compliance of the same with applicable Environmental
Laws and Safety Laws.
(ii) For purposes of this Section only, all
references to the "Parent" or the "Merger-Sub" are intended to
include any and all other entities to which Parent or
Merger-Sub may be considered a successor under applicable
Environmental Laws. The representations and warranties in this
section are the
31
only representations and warranties with respect to
Environmental Laws or Environmental Liabilities and Costs, or
Safety Laws or Safety Liabilities and Costs notwithstanding
any other language in this Agreement of general applicability.
(iii) For purposes of this Section 3.01(bb):
1. "Chemical Substance" means any chemical
substance, including but not limited to any: (i)
pollutant, contaminant, irritant, chemical, raw
material, intermediate, product, by-product, slag,
construction debris; (ii) industrial, solid, liquid
or gaseous toxic or hazardous substance, material or
waste; (iii) petroleum or any fraction thereof; (iv)
asbestos or asbestos-containing material; (v)
polychlorinated biphenyl; (vi) chlorofluorocarbons;
and, (vii) any other substance, material or waste,
which is identified or regulated under any
Environmental Law or Safety Law, as now and
hereinafter in effect, or other comparable laws.
2. "Environment" means soil, land surface or
subsurface strata, real property, surface waters
(including navigable waters, ocean waters, streams,
ponds, drainage basins and wetlands), groundwater,
water body sediments, drinking water supply, stream
sediments, ambient air (including indoor air), plant
and animal life and any other environmental medium or
natural resource.
3. "Environmental Laws" mean the
Comprehensive Environmental Response, Compensation
and Liability Act, the Resource Conservation and
Recovery Act, and the Clean Air Act, the Clean Water
32
Act, each, as amended or hereinafter in effect, and
any other law or legal requirement, as now or
hereinafter in effect, relating to: (a) the Release,
containment, removal, remediation, response, cleanup
or abatement of any sort of any Chemical Substance;
(b) the manufacture, generation, formulation,
processing, labeling, distribution, introduction into
commerce, use, treatment, handling, storage,
recycling, disposal or transportation of any Chemical
Substance; (c) exposure of persons, including
employees, to any Chemical Substance; (d) the
physical structure, use or condition of a building,
facility, fixture or other structure, including,
without limitation, those relating to the management,
use, storage, disposal, cleanup or removal of
asbestos, asbestos-containing materials,
polychlorinated biphenyls or any other Chemical
Substance; (e) the pollution, protection or clean up
of the Environment; or (f) noise.
4. "Environmental Liabilities and Costs"
means all Losses incurred: (i) to comply with any
Environmental Law; (ii) as a result of a Release of
any Chemical Substance; or (iii) as a result of any
environmental conditions present at, created by or
arising out of the past or present operations of
Parent or Merger-Sub through the Closing Date or of
any prior owner or operator of a facility or site at
which Parent or Merger-Sub now operate or have
previously operated.
5. "Environmental Permit" means any permit
or authorization from any governmental authority
required under, issued pursuant to, or authorized by
any Environmental Law.
33
6. "Release" means any actual, threatened or
alleged spilling, leaking, pumping, pouring,
emitting, dispersing, emptying, discharging,
injecting, escaping, leaching, dumping, or disposing
of any Chemical Substance into the Environment that
may cause an Environmental Liability and Cost
(including the disposal or abandonment of barrels,
containers, tanks or other receptacles containing or
previously containing any Chemical Substance).
7. "Safety Laws" means the Occupational
Safety and Health Act and any other federal, state,
local and foreign law, regulation or legal
requirement relating to health or safety, each as now
or hereinafter in effect, including any such law,
regulation or legal requirement relating to the (a)
exposure of employees to any Chemical Substance, air
quality or working conditions or noise or (b) the
physical structure, use or condition of a building,
facility, fixture or other structure, including,
without limitation, those relating to equipment or
manufacturing processes, or the management, use,
storage, disposal, cleanup or removal of any Chemical
Substances, air quality or working conditions.
8. "Safety Liabilities and Costs" means all
Losses incurred to comply with any Safety Law or as a
result of any health or safety conditions present at,
created by or arising out of the past or present
operations of the Company through the Closing Date.
34
(cc) Affiliated Transaction.
Except as contemplated by this Agreement, neither Parent nor
Merger-Sub is a party to or bound by any contract, commitment or understanding
with any of the stockholders, directors or officers of Parent or Merger-Sub or
any of their affiliates or any member of their family and none of the
stockholders, directors or officers of Parent or Merger-Sub or affiliates or any
member of their family owns or otherwise has any rights to or interests in any
asset, tangible or intangible, which is used in the business of Parent or
Merger-Sub.
(dd) Government Contracts.
Neither Parent nor Merger-Sub has been nor are they a party to
any contract or arrangement with any federal, state or local government agency.
(ee) No Illegal Payments, Etc.
Neither Parent nor Merger-Sub, nor any of the directors,
officers, employees or agents of Parent or Merger-Sub, has (a) directly or
indirectly given or agreed to give any illegal gift, contribution, payment or
similar benefit to any supplier, customer, governmental official or employee or
other person who was, is or may be in a position to help or hinder Parent or
Merger-Sub (or assist in connection with any actual or proposed transaction) or
made or agreed to make any illegal contribution, or reimbursed any illegal
political gift or contribution made by any other person, to any candidate for
federal, state, local or foreign public office (i) which might subject Parent or
Merger-Sub to any damage or penalty in any civil, criminal or governmental
litigation or proceeding or (ii) the non-continuation of which has had or might
have, individually or in the aggregate, a Material Adverse Effect or (b)
established or maintained any unrecorded fund or asset or made any false entries
on any books or records for any purpose.
35
(ff) Books and Records.
The books and all corporate (including minute books and stock
record books) and financial records of Parent and Merger-Sub are complete and
correct in all material respects and have been maintained in accordance with
applicable sound business practices, laws and other requirements.
(gg) Consents.
Schedule 3.01(gg) sets forth a true, correct and complete list
of any Person whose consent or approval is required and the matter, agreement or
contract to which such consent relates in connection with the transactions
contemplated by this Agreement.
(hh) Disclosure.
The representations and warranties contained in this Section 3
(including the schedules and exhibits required to be delivered by Parent and
Merger-Sub pursuant to this Agreement) and any certificate furnished or to be
furnished by Parent and Merger-Sub to booktech do not contain and will not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements and information contained in this
Section 3 not misleading. To the knowledge of Parent and Merger-Sub, there is no
material fact relating to Parent and Merger-Sub or their assets, properties or
business which may materially adversely affect the same which has not been
disclosed in writing in this Agreement to booktech.
(ii) Accuracy of Information.
Parent has made with the SEC all filings required by the
Exchange Act (all such filings and any future filings made thereunder are
collectively, the "Exchange Act Filings").
36
None of the Exchange Act Filings contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Parent has not been required to make any filings under the
Securities Act of 1933.
(jj) Tax Free Transaction
Parent represents and warrants that as regards booktech and
its shareholders the Merger qualifies as a tax free transaction. The Parent does
not represent or warrant that the accrued interest on the Hershey Loan being
converted into equity is or is not subject to tax liability.
ss.3.02 Representations and Warranties of booktech.
booktech represents and warrants to Parent and Merger-Sub as
follows:
(a) Organization and Qualification.
booktech is a corporation duly organized, validly existing and
in good standing under the laws of the State of Massachusetts and has full power
and authority to conduct its business as and to the extent now conducted and to
own, use and lease its assets and properties, except for such failures to have
such power and authority which, individually or in the aggregate, do not and are
not reasonably expected to have a Material Adverse Effect on booktech. booktech
is duly qualified, licensed or admitted to do business and is in good standing
in each jurisdiction in which the ownership, use or leasing of its assets and
properties, or the conduct or nature of its business makes such qualification,
licensing or admission necessary, except for such failures to be so qualified,
licensed or admitted and in good standing which, individually or in the
37
aggregate, do not and are not reasonably expected to have a Material Adverse
Effect on booktech. As used in this Agreement, a "Material Adverse Effect" shall
mean a material adverse effect on the businesses, properties, assets,
liabilities, condition (financial or otherwise) or results of operations of an
entity (or group of entities taken as a whole). Notwithstanding the foregoing, a
Material Adverse Effect shall not include any change in political or economic
matters of general applicability. booktech does not directly or indirectly own
any equity or similar interest in, or any interest convertible into or
exchangeable or exercisable for, any equity or similar interest in, any
corporation, partnership, joint venture or other business association or entity.
(b) Organizational Documents; Capital Stock.
Attached hereto as Exhibit 3.02(b) are true and complete
copies of the Articles of Organization and By-Laws of booktech as in effect on
the date hereof.
Attached as Schedule 3.02(b)(i) is a true and complete table
of all stockholders of booktech as of the date hereof.
As of the Closing Date, the authorized capital stock of
booktech will consist solely of 200,000 shares of common stock. Immediately
prior to the Closing, 25,000 shares of common stock will be issued and
outstanding, free and clear of any Liens (as defined in Section 3.01(d)). No
shares are held as treasury stock except 3,000 shares at $62.50 a share and
except as contemplated by this Agreement, there are no outstanding options,
warrants, calls, subscriptions, rights, agreements or other commitments of any
character obligating booktech to issue or sell any shares of its capital stock
or to grant, extend or enter into any option with respect thereto.
38
There are no outstanding contractual obligations of booktech
to repurchase, redeem or otherwise acquire any shares of booktech.
There are no debt obligations of booktech of any nature
whatsoever, and as of the Closing Date, booktech will not have any debt,
liabilities, obligations, or contingent obligations of any nature whatsoever,
except as set forth on Schedule 3.02(b)(ii). booktech is not a guarantor nor is
it otherwise liable for any liability or obligation of any other person.
(c) Authority Relative to this Agreement.
booktech has full power and authority to enter into this
Agreement and to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by booktech and the consummation by booktech of the Merger and
the transactions contemplated hereby have been duly and validly approved by the
Board of Directors of booktech and its stockholders, and no other proceedings on
the part of booktech are necessary to authorize the execution, delivery and
performance of this Agreement by booktech and the consummation by booktech of
the transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by booktech, constitutes the legal, valid and binding
obligation of booktech enforceable against booktech in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer or similar laws affecting the
enforcement of creditors rights generally and general principles of equity
(whether considered in a proceeding at law or in equity.
39
(d) Non-Contravention; Approvals and Consents.
(i) The execution and delivery of this Agreement by
booktech does not, and the performance by booktech of its
obligations hereunder and the consummation of the transactions
contemplated hereby will not, conflict with, result in a
violation or breach of, constitute (with or without notice or
lapse of time or both) a default under, result in or give to
any person any right of payment or reimbursement, termination,
cancellation, modification or acceleration of, or result in
the creation or imposition of any Lien upon any of the assets
or properties of booktech under any of the terms, conditions
or provisions of (x) the Articles of Organization or By-Laws
of booktech, (y) any Laws or Orders of any Governmental or
Regulatory Authority, applicable to booktech or any of its
assets or properties, or (z) any Contracts to which booktech
is a party or by which booktech or any of its assets or
properties is bound, excluding from the foregoing clauses (y)
and (z) conflicts, violations, breaches, defaults,
terminations, modifications, accelerations and creations and
impositions of Liens which, individually or in the aggregate,
could not be reasonably expected to have a Material Adverse
Effect on booktech or on its ability to consummate the
transactions contemplated by this Agreement.
(ii) Except (x) for the filing of the Certificate of
Merger and other appropriate merger documents required by the
MBCL with the Secretary of State of Massachusetts, and by the
NMAL with the Secretary of the State of Nevada, no consent,
approval, or action of, filing with, or notice to any
Governmental or Regulatory Authority or other public or
private third party is necessary or required
40
under any of the terms, conditions or provisions of any Law or
Order of any Governmental or Regulatory Authority or any
Contract to which booktech is a party or by which booktech or
any of its assets or properties is bound for the execution and
delivery of this Agreement by booktech, the performance by
booktech of its obligations hereunder or the consummation of
the transactions contemplated hereby, except for such
consents, approvals, or actions of, filings with or notices to
any Governmental or Regulatory Authority or other public or
private third party the failure of which to make or obtain
could not reasonably be expected to have a Material Adverse
Effect on Parent, booktech, the Surviving Corporation, or on
booktech's ability to consummate the transactions contemplated
by this Agreement.
(e) Patents, Trademarks, Intangibles.
booktech has all right, title and interest in, or a valid and
binding license to use all patents, patent applications, trademarks, trademark
applications, trade names, service marks, copyrights, copyright applications,
franchises, trade secrets, computer programs (in object or source code form), or
other intangible property or asset (collectively, "Intangibles") which are
individually or in the aggregate material to the conduct of its business.
Attached as Exhibit 3.02(e) is a true and complete list of all Intangibles of
booktech. booktech is not in default (or with the giving of notice or lapse of
time or both, would be in default) in any material respect under any license to
use such Intangibles. To booktech's knowledge, no such Intangibles are being
infringed by any third party, and booktech is not infringing any Intangible of
any third party, except for such defaults and infringements which, individually
or in the aggregate, do not
41
and are not reasonably expected to have a Material Adverse Effect on Parent,
booktech or the Surviving Corporation.
(f) Financial Statements.
booktech has delivered to Parent true, correct and complete
copies of the following: the audited balance sheets of booktech as of July 31,
1998 as of July 31, 1999 and December 31, 1999, (the "booktech Balance Sheets");
an unaudited balance sheet of booktech as of February 28, 2000; the audited
statements of operations of booktech as of July 31, 1998 and July 31, 1999 and
December 31, 1999; the audited statements of stockholders' equity of booktech
for the period January 1, 1998 to December 31, 1999; and the audited statement
of cash flows of booktech for the period January 1, 1998 to December 31, 1999
(together the "booktech Financial Statements"). The booktech Financial
Statements were prepared in accordance with GAAP applied on a consistent basis
during the periods involved (except as may be indicated therein or in the notes
thereto and except with respect to unaudited statements), and are correct,
complete and fairly present in all material respects the financial condition,
assets, liabilities, stockholders equity and results of operations of booktech
for the periods indicated and are consistent with the books and records of
booktech, subject to normal and recurring year end adjustments and in the case
of the unaudited financial statements, the absence of notes.
(g) Absence of Certain Changes or Events.
Since February 28, 2000, no change, event or development or
combination of changes or developments (including any worsening of any condition
currently existing) has
42
occurred or is reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect on booktech.
(h) Absence of Undisclosed Liabilities.
Except for matters reflected or reserved against in the
booktech Balance Sheets, booktech did not have at such date and has not incurred
since that date, any liabilities or obligations (whether absolute, accrued,
contingent, fixed or otherwise, or whether due or to become due) of any nature,
except liabilities or obligations which were incurred in connection with this
Agreement and the transactions contemplated hereby in the ordinary course of
business consistent with past practice.
(i) Legal Proceedings.
There are no actions, suits, arbitrations, investigations,
audits or proceedings pending or to the knowledge of booktech, threatened
against, relating to or affecting, nor to the knowledge of booktech, are there
any Governmental or Regulatory Authority investigations or audits pending or
threatened against, relating to or affecting, booktech or any of its assets and
properties which, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect on booktech or on the ability of booktech to
consummate the transactions contemplated by this Agreement. booktech is not
subject to any judgment, decree, court order or writ of any Governmental or
Regulatory Authority.
(j) Information Supplied.
Nothing in this Agreement or any schedule, exhibits,
certificate, document or statement in writing which has been supplied by or on
behalf of booktech, in connection with the transactions contemplated hereby,
contains any untrue statement of a material fact, or omits any
43
statement of a material fact required to be stated or necessary in order to make
the statements contained herein or therein not misleading. There is no fact
known to booktech which materially and adversely affects booktech, which has not
been set forth in this Agreement or in the schedules, exhibits, certificates,
documents or statements in writing furnished by booktech in connection with the
transactions contemplated by this Agreement.
(k) Compliance with Laws and Orders.
booktech holds all permits, licenses, variances, exemptions,
orders and approvals of all Governmental and Regulatory Authorities necessary
for the lawful conduct of its business (the "booktech Permits"), except for
failures to hold such permits, licenses, variances, exemptions, orders and
approvals which, individually or in the aggregate, do not and are not reasonably
expected to have a Material Adverse Effect on booktech. booktech is in
compliance with the terms of the booktech Permits, except failures so to comply
which, individually or in the aggregate, do not have and are not reasonably
expected to have a Material Adverse Effect on booktech. booktech is not in
violation of, or in default under, any Law or Order of any Governmental or
Regulatory Authority, except for violations which, individually or in the
aggregate, do not and are not reasonably expected to have a Material Adverse
Effect on booktech.
(l) Compliance with Agreements.
Neither booktech, nor to the knowledge of booktech, any other
party thereto, is in breach or violation of, or in default in the performance or
observance of any term or provision of, and no event has occurred which, with
notice or lapse of time or both, is reasonably expected to result in a default
under, (x) the Articles of Organization or By-Laws of booktech or (y) any
material Contract to which booktech is a party or by which booktech or any of
its assets or
44
properties is bound, except in the case of clause (y) for breaches, violations
and defaults which, individually or in the aggregate, do not and are not
reasonably expected to have a Material Adverse Effect on booktech.
(m) Brokers.
All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by booktech and its
affiliates directly with Parent and Merger-Sub, without the intervention of any
person on behalf of booktech and its affiliates in such manner as to not give
rise to any valid claim by any person against booktech, Parent, Merger-Sub or
the Surviving Corporation for a finder's fee, brokerage commission or similar
payment, except as specifically set forth on Schedule 3.02(m).
(n) Consents Without Any Condition.
booktech has not made any agreement or reached any
understanding not approved by Parent and Merger-Sub as a condition for obtaining
any consent, authorization, approval, order, license, certificate or permit
required for the consummation of the transactions contemplated by this
Agreement.
(o) Tax Matters.
Except as set forth in Schedule 3.02(o) hereto:
(i) booktech has filed all tax returns required to be
filed by applicable law prior to the Closing. All tax returns
were (and, as to tax returns not yet required to be filed as
of the date hereof, will be) true complete and correct and
filed on a timely basis. booktech has withheld and paid over
to the appropriate
45
taxing authority all taxes required to be so withheld and paid
over, except where the failure to pay tax would not have a
Material Adverse Effect on booktech.
(ii) There are no tax liens upon the assets of
booktech.
(iii) booktech has not requested (and no request has
been made on its behalf) any extension of time within which to
file any material tax return since January 1, 1997.
(iv) No income tax returns have been examined by any
taxing authorities since January 1, 1997.
(v) No audits or other administrative proceedings or
court proceedings are presently pending with regard to any
taxes or tax returns of booktech.
(vi) To the extent requested by Parent and Merger-Sub
booktech has made available to Parent and Merger-Sub (or, in
the case of tax returns to be filed on or after the Closing,
will make available) complete and accurate copies of all tax
returns and associated work papers filed by or on behalf of
booktech for all taxable years ending on or prior to the
Closing.
(vii) booktech has always been taxed as a corporation
for United States federal tax purposes, and will remain so
through the Closing.
(p) Employee Benefit Plans.
booktech does not contribute to any pension, profit-sharing,
option, other incentive plan, or any other type of employee benefit plan, other
than health and disability plans nor has it any obligation to, or customary
arrangement with, employees for bonuses, incentive
46
compensation, vacations, severance pay, service award, relocation, tuition
refund or other benefits, whether oral or written.
(q) Intangibles.
(See Section 3.02 (e)).
(r) Insurance.
booktech has neither key-person life insurance nor any
directors' and officers' liability or other insurance policies that insure the
business, operations, properties, or assets of booktech, except as otherwise
disclosed herein.
(s) Labor Matters.
booktech has fifty (50) employees. The positions and salaries
of all employees of booktech are set forth on Schedule 3.02(s)(i). To the
knowledge of booktech, no executive, key employee, or group of employees has any
plans to terminate employment with booktech. booktech has not experienced any
labor disputes or work stoppage due to labor disagreements. booktech is in
compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours and have not
been and are not engaged in any unfair labor practice as defined in the National
Labor Relations Act, as amended, the violation of which could have a Material
Adverse Effect. There is no unfair labor practice charge or complaint against
pending or threatened before the National Labor Relations Board. No grievance
which might have a Material Adverse Effect nor any arbitration proceeding
arising out of or under any collective bargaining agreement is pending and no
pending claims therefore have been made. Except as disclosed in Schedule
3.02(s)(ii), no collective bargaining
47
agreement of booktech restricts booktech from relocating, closing or
subcontracting any of its operations.
(t) Tangible Property, Business, Assets, etc.
Except as set forth in Schedule 3.02(t) and except as
contemplated by this Agreement, booktech has, from the date of its respective
inception, never owned any material property (both real and personal), conducted
any material business, owned any material assets, conducted any operations, or
incurred any material liabilities.
(x) Present Intention Not to Sell.
To the best of booktech's knowledge, none of shareholders has
a present intention to sell their capital stock.
(y) Subsidiaries.
booktech does not have any Subsidiaries. For purposes of this
Section 3.02(y), "Subsidiary" shall mean: (i) any corporation at least a
majority of whose outstanding voting stock is owned, directly or indirectly, by
such Person or by one or more of its Subsidiaries, or by such Person and one or
more of its Subsidiaries, (ii) any general partnership, joint venture or similar
entity, at least a majority of whose outstanding partnership or similar
interests shall at the time be owned by such Person, or by one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries and (iii)
any limited partnership of which such Person or any of its Subsidiaries is a
general partner. For the purposes of this definition, "voting stock" means
shares, interests, participations or other equivalents in the equity interest
(however designated) in such Person having ordinary voting power for the
election of a majority of the directors (or the
48
equivalent) of such Person, other than shares, interests, participations or
other equivalents having such power only by reason of contingency.
(z) No Material Adverse Change.
Since December 31, 1999, there has not been any change which
has resulted in a Material Adverse Effect to booktech and no event has occurred
or circumstance exists that may result in such a Material Adverse Effect to
booktech.
(aa) Leases.
Except as set forth on Schedule 3.02(aa) booktech does not
lease or subleases any real property.
(bb) Contracts.
Except as set forth on Schedule 3.02(bb) booktech is not a
party to any material contract or agreement with any third party except as
contemplated by this Agreement.
(cc) Powers of Attorney.
There are no outstanding powers of attorney executed on behalf
of booktech in respect of booktech, its assets, liabilities or business or its
shares of capital stock.
(dd) Insurance and Risk Management.
Schedule 3.02(dd) sets forth the following information with
respect to each insurance policy (including policies providing property,
casualty, liability, and workers' compensation coverage and bond and surety
arrangements) to which the business operations of booktech have been a party, a
named insured, or otherwise the beneficiary of coverage from the period from
December 31, 1998 to the date hereof:
49
(i) the name , address, and telephone number of the
agent;
(ii) the name of the insurer, the name of the
policyholder, and the name of each covered insured;
(iii) the policy number, the period of coverage and
premium; and
(iv) a description of any retrospective premium
adjustments or other loss-sensitive premium arrangements.
With respect to each such insurance policy: (i) the policy is legal, valid,
binding, enforceable, and in full force and effect; (ii) the transactions
contemplated hereby will not result in the cancellation or modification of such
policies; (iii) neither booktech nor any other party to the policy is in breach
or default (including with respect to the payment of premiums or the giving of
notices), and no event has occurred which, with notice or the lapse of time,
would constitute such a breach or default, or permit termination, modification,
or acceleration, under the policy; (iv) booktech has delivered true and complete
copies of all policies and related indemnity or premium payment agreements to
Parent; (v) the policy has not been amended or modified and no riders have been
issued in respect of such policies referred to in (iv) above without the consent
of booktech; and (vi) no party to the policy has repudiated any provision
thereof. Schedule 3.02(dd) describes any self-insurance arrangements affecting
either Parent or Merger-Sub.
(ee) Environment, Health, and Safety.
(i) Except as disclosed in Schedule 3.02(ee):
1. booktech is and has been in compliance
with all applicable Environmental Laws and Safety
Laws;
50
2. booktech has obtained, and is and has
been in material compliance with the conditions of,
all Environmental Permits required for the continued
conduct of the business of booktech in the manner now
conducted and presently proposed to be conducted;
3. booktech has filed all required
applications, notices and other documents necessary
to effect the timely renewal or issuance of all
Environmental Permits for the continued conduct of
the business of booktech in the manner now conducted
and presently proposed to be conducted;
4. there are no past or present events,
conditions or circumstances, including, without
limitation, to the knowledge of booktech, pending
changes in any Environmental Law or Permit or Safety
Laws, that are likely to interfere with or otherwise
affect the business of booktech in the manner now
conducted or which would interfere with compliance
with any Environmental Law or Permit or Safety Law;
5. there are no circumstances or conditions
present at or arising out of the present or former
assets, properties, leaseholds, businesses or
operations of booktech in respect of off-site
storage, transportation or disposal of, or any
off-site Release of, a Chemical Substance which
reasonably may be expected to give rise to any
Environmental Liabilities and costs;
6. there are no circumstances or conditions
present at or arising out of the present or former
assets, properties, leaseholds,
51
businesses or operations of booktech, including but
not limited to any on-site Storage, use, disposal or
Release of a Chemical Substance, which reasonably may
be expected to give rise to any Environmental
Liabilities and Costs or Safety Liability and Costs;
7. booktech has not and its present or past
assets, properties, businesses, leaseholds or
operations have not received or been subject to, or
within the past three years been subject to, any
outstanding order, decree, judgment, complaint,
agreement, claim, citation, or notice or is subject
to any ongoing judicial or administrative proceeding
indicating that booktech, or the past and present
assets of booktech are or may be: (A) in violation of
any Environmental Law; (B) in violation of any Safety
Laws; (C) responsible for the on-site or off-site
storage or Release of any Chemical Substance; or, (D)
liable for any Environmental Liabilities and Costs or
Safety Liabilities and Costs;
8. booktech has no reason to believe that
booktech will become subject to a matter identified
in subsection (7); and, no investigation or review
with respect to such matters is pending or, to the
knowledge of booktech, is threatened, nor has any
authority or other third-party indicated an intention
to conduct the same;
9. neither the business of booktech nor any
of its properties or assets is subject to, or as a
result of the transactions contemplated by this
Agreement will be subject to, the requirements of any
Environmental Laws which require notice, disclosure,
cleanup or approval prior to
52
transfer of the shares pursuant to the Merger or the
business of booktech or which will impose Liens on
any such asset or property or otherwise interfere
with or affect the business of booktech;
10. Schedule 3.02(ee)(i)(10) lists all
property presently or previously leased, owned or
operated by booktech and identifies all such property
(and the area within that property) that has been
used by booktech or by any other Person (including a
prior owner or operator) for the storage or disposal
of Chemical Substances;
11. Schedule 3.02(ee)(i)(11) lists all
off-site locations, including, without limitation,
commercial waste disposal facilities or municipal
landfills, to which or at which Chemical Substances
originating from booktech, or its assets, properties
or business have been sent (or otherwise have come to
be located) in amounts that would require a waste
manifest under the Resource Conservation and Recovery
Act of 1976 as now in effect for treatment, storage,
disposal, reuse or recycling;
12. Schedule 3.02(ee)(i)(12) sets forth a
list of all underground storage tanks owned or
operated at any time by booktech and, except as
disclosed in Schedule 3.02(ee)(i)(12), no such tank
is leaking or has leaked at any time in the past, and
there is no pollution or contamination of the
Environment caused by or contributed to or threatened
by a Release of a Chemical Substance from any such
tank; and
13. Schedule 3.02(ee)(i)(13) lists all
environmental audits, inspections, assessments,
investigations or similar reports in booktech's
53
possession or of which booktech is aware relating to
booktech's assets, properties or business or the
compliance of the same with applicable Environmental
Laws and Safety Laws.
(ii) For purposes of this Section only, all
references to the "booktech" are intended to include any and
all other entities to which booktech may be considered a
successor under applicable Environmental Laws. The
representations and warranties in this section are the only
representations and warranties with respect to Environmental
Laws or Environmental Liabilities and Costs, or Safety Laws or
Safety Liabilities and Costs notwithstanding any other
language in this Agreement of general applicability.
(iii) For purposes of this Section 3.02(ee)(iii):
1. "Chemical Substance" means any chemical
substance, including but not limited to any: (i)
pollutant, contaminant, irritant, chemical, raw
material, intermediate, product, by-product, slag,
construction debris; (ii) industrial, solid, liquid
or gaseous toxic or hazardous substance, material or
waste; (iii) petroleum or any fraction thereof; (iv)
asbestos or asbestos-containing material; (v)
polychlorinated biphenyl; (vi) chlorofluorocarbons;
and, (vii) any other substance, material or waste,
which is identified or regulated under any
Environmental Law or Safety Law, as now and
hereinafter in effect, or other comparable laws.
2. "Environment" means soil, land surface or
subsurface strata, real property, surface waters
(including navigable waters, ocean waters, streams,
ponds, drainage basins and wetlands), groundwater,
water
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body sediments, drinking water supply, stream
sediments, ambient air (including indoor air), plant
and animal life and any other environmental medium or
natural resource.
3. "Environmental Laws" mean the
Comprehensive Environmental Response, Compensation
and Liability Act, the Resource Conservation and
Recovery Act, and the Clean Air Act, the Clean Water
Act, each, as amended or hereinafter in effect, and
any other law or legal requirement, as now or
hereinafter in effect, relating to: (a) the Release,
containment, removal, remediation, response, cleanup
or abatement of any sort of any Chemical Substance;
(b) the manufacture, generation, formulation,
processing, labeling, distribution, introduction into
commerce, use, treatment, handling, storage,
recycling, disposal or transportation of any Chemical
Substance; (c) exposure of persons, including
employees, to any Chemical Substance; (d) the
physical structure, use or condition of a building,
facility, fixture or other structure, including,
without limitation, those relating to the management,
use, storage, disposal, cleanup or removal of
asbestos, asbestos-containing materials,
polychlorinated biphenyls or any other Chemical
Substance; (e) the pollution, protection or clean up
of the Environment; or (f) noise.
4. "Environmental Liabilities and Costs"
means all Losses incurred: (i) to comply with any
Environmental Law; (ii) as a result of a Release of
any Chemical Substance; or (iii) as a result of any
environmental conditions present at, created by or
arising out of the past
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or present operations of booktech through the Closing
Date or of any prior owner or operator of a facility
or site at which booktech now operates or has
previously operated.
5. "Environmental Permit" means any permit
or authorization from any governmental authority
required under, issued pursuant to, or authorized by
any Environmental Law.
6. "Release" means any actual, threatened or
alleged spilling, leaking, pumping, pouring,
emitting, dispersing, emptying, discharging,
injecting, escaping, leaching, dumping, or disposing
of any Chemical Substance into the Environment that
may cause an Environmental Liability and Cost
(including the disposal or abandonment of barrels,
containers, tanks or other receptacles containing or
previously containing any Chemical Substance).
7. "Safety Laws" means the Occupational
Safety and Health Act and any other federal, state,
local and foreign law, regulation or legal
requirement relating to health or safety, each as now
or hereinafter in effect, including any such law,
regulation or legal requirement relating to the (a)
exposure of employees to any Chemical Substance, air
quality or working conditions or noise or (b) the
physical structure, use or condition of a building,
facility, fixture or other structure, including,
without limitation, those relating to equipment or
manufacturing processes, or the management, use,
storage, disposal, cleanup or removal of any Chemical
Substances, air quality or working conditions.
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8. "Safety Liabilities and Costs" means all
Losses incurred to comply with any Safety Law or as a
result of any health or safety conditions present at,
created by or arising out of the past or present
operations of the Company through the Closing Date.
(ff) Affiliated Transaction.
Except as contemplated by this Agreement, booktech is not a
party to or bound by any contract, commitment or understanding with any of the
stockholders, directors or officers of booktech or any of their affiliates or
any member of their family and none of the stockholders, directors or officers
of booktech or affiliates or any member of their family owns or otherwise has
any rights to or interests in any asset, tangible or intangible, which is used
in the business of booktech.
(gg) Government Contracts.
booktech has not been nor are they a party to any contract or
arrangement with any federal, state or local government agency.
(hh) No Illegal Payments, Etc.
Neither booktech, nor any of the directors, officers,
employees or agents of booktech, has (a) directly or indirectly given or agreed
to give any illegal gift, contribution, payment or similar benefit to any
supplier, customer, governmental official or employee or other person who was,
is or may be in a position to help or hinder booktech (or assist in connection
with any actual or proposed transaction) or made or agreed to make any illegal
contribution, or reimbursed any illegal political gift or contribution made by
any other person, to any candidate for federal, state, local or foreign public
office (i) which might subject booktech to any damage
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or penalty in any civil, criminal or governmental litigation or proceeding or
(ii) the non-continuation of which has had or might have, individually or in the
aggregate, a Material Adverse Effect or (b) established or maintained any
unrecorded fund or asset or made any false entries on any books or records for
any purpose.
(ii) Books and Records.
The books and all corporate (including minute books and stock
record books) and financial records of booktech are complete and correct in all
material respects and have been maintained in accordance with applicable sound
business practices, laws and other requirements.
(jj) Consents.
Schedule 3.02(jj) sets forth a true, correct and complete list
of any Person whose consent or approval is required and the matter, agreement or
contract to which such consent relates in connection with the transactions
contemplated by this Agreement.
IV. COVENANTS.
ss.4.01 Covenants of Parent and Merger-Sub.
Parent and Merger-Sub covenant and agree as follows:
(a) Articles of Incorporation and By-Laws.
As of the Closing Date, the articles of incorporation and
by-laws of Merger-Sub shall be in the form of Exhibit 4.01(a)(i) and the
articles of incorporation and by-laws of Parent shall be in the form of Exhibit
4.01(a)(ii).
(b) Shares, Options and Warrants.
Except as contemplated hereby, until the earlier of the
Effective Time or the Termination of this Agreement pursuant to Article VI (the
"Release Time") without the prior
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written consent of booktech, no share of capital stock of Parent or Merger-Sub
or any option or warrant for any such share, right to subscribe to or purchase
any such share, or security convertible into or exchangeable for any such share,
shall be issued or sold by Parent or Merger-Sub, nor shall Parent or Merger-Sub
enter into any agreement or commitment to effect any such issuance or sale,
except as set forth in Schedule 4.01(b) hereto.
(c) Dividends and Purchases of Stock.
Until the Release Time, without the prior written consent of
booktech, no cash or non-cash dividend or liquidating or other distribution or
stock split shall be authorized, declared, paid or effected by Parent or
Merger-Sub in connection with their respective outstanding capital stock.
(d) Borrowing of Money; Working Capital.
Until the Release Time, neither Parent nor Merger-Sub shall
incur indebtedness for borrowed money. Until the Release Time, neither Parent
nor Merger-Sub shall guarantee the borrowing of money by any third party, enter
into or modify any capital or operating lease or enter into any material
agreement, which in any case would by its terms require the payment by Parent or
Merger-Sub of more than $5,000 by Parent or Merger-Sub in any twelve (12) month
period.
(e) Access.
Until the Release Time, Parent and Merger-Sub will afford the
Directors, officers, employees, counsel, agents, investment bankers,
accountants, and other representatives of booktech reasonable access to the
plants, properties, books, and records of Parent and Merger-Sub, will permit
them to make extracts from and copies of such books and records, and will from
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time to time furnish booktech with such additional financial and operating data
and other information as to the financial condition, results of operations,
businesses, properties, assets, liabilities, or future prospects of Parent and
Merger-Sub as booktech from time to time may reasonably request.
(f) Conduct of Business.
Except as otherwise contemplated or permitted hereby, until
the Release Time, neither Parent nor Merger-Sub shall take any action that would
or is reasonably likely to result in any of the representations or warranties of
Parent or Merger-Sub set forth in this Agreement being untrue at the Closing
Date, or in any of the conditions to the Merger set forth in Article V not being
satisfied. Except as otherwise contemplated or permitted hereby, until the
Release Time, Parent and Merger-Sub will conduct their affairs in all respects
only in the ordinary course.
(g) Advice of Changes.
Until the Release Time, Parent and Merger-Sub will promptly
advise booktech in a reasonably detailed written notice of any fact or
occurrence or any pending threatened occurrence of which either of them obtains
knowledge and which (if existing and known at the date of the execution of this
Agreement) would have been required to be set forth or disclosed in or pursuant
to this Agreement, which (if existing or known at any time prior to or at the
Effective Time) would make the performance by any party of a covenant contained
in this Agreement impossible or make such performance materially more difficult
in the absence of such fact or occurrence, or which (if existing or known at the
time of the Effective Time) would cause a condition to any party's obligations
under this Agreement not to be fully satisfied.
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(h) Public Statements.
Before Parent or Merger-Sub releases any information
concerning this Agreement, the Merger, or any other transactions contemplated by
this Agreement which is intended for or is reasonably expected to result in
public dissemination thereof, Parent and Merger-Sub shall cooperate with
booktech, shall furnish drafts of all documents or proposed oral statements to
booktech for comments, and shall not release any such information without the
prior consent of booktech; provided, however, that the foregoing shall not be
deemed to prevent Parent or Merger-Sub from releasing any information or making
any disclosure to the extent that Parent or Merger-Sub reasonably determines
that it is required to do so by law.
(i) Other Proposals.
Until the Release Time, Parent and Merger-Sub shall not, and
shall not authorize or permit any officer, director, employee, counsel, agent,
investment banker, accountant, or other representative of Parent and Merger-Sub,
directly or indirectly, to: (i) initiate contact with any person or entity in an
effort to solicit any Takeover Proposal (as such term is defined in this Section
4.01(i); (ii) cooperate with, or furnish or cause to be furnished any non-public
information concerning the financial condition, results of operations,
businesses, properties, assets, liabilities, or future prospects of Parent or
Merger-Sub to, any person or entity in connection with any Takeover Proposal;
(iii) negotiate with any person or entity with respect to any Takeover Proposal;
or (iv) enter into any agreement or understanding with the intent to effect a
Takeover Proposal; provided, however, that Parent or Merger-Sub shall be
entitled to take any action described in the foregoing clauses (ii)-(iv) if and
to the extent that the Board of Directors of Parent or Merger-Sub determines in
good faith, based on the advice of its counsel, that the failure to take any
such action would violate its fiduciary duties to Parent's or Merger-
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Sub's stockholders. Parent and Merger-Sub will immediately give written notice
to booktech of the details of any Takeover Proposal of which Parent or
Merger-Sub becomes aware. As used in this Section 4.01(i), "Takeover Proposal"
shall mean any proposal, other than as contemplated by this Agreement, for a
merger, consolidation, reorganization, other business combination, or
recapitalization involving Parent or Merger-Sub, for the acquisition of a ten
percent (10%) or greater interest in the equity or in any class or series of
capital stock of Parent or Merger-Sub, for the acquisition of the right to cast
ten percent (10%) or more of the votes on any matter with respect to Parent or
Merger-Sub or any subsidiary of Parent or Merger-Sub, or for the acquisition of
one of their divisions or of a substantial portion of any of their respective
assets, the effect of which may be to prohibit, restrict, or delay the
consummation of the Merger or any of the other transactions contemplated by this
Agreement, or impair the contemplated benefits to booktech of the Merger or any
of the other transactions contemplated by this Agreement.
(j) Consents Without Any Condition.
Neither Parent nor Merger-Sub shall make any agreement or
reach any understanding, not approved in writing by booktech, as a condition for
obtaining any consent, authorization, approval, order, license, certificate, or
permit required for the consummation of the transactions contemplated by this
Agreement.
(k) Transfer Taxes.
Parent and Merger-Sub shall timely prepare and file any
declaration or filing necessary to comply with any transfer tax statutes that
require any such filing before the Effective Time.
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(l) Issuance of Stock.
The issuance of stock by Parent in connection with the Merger
will be effected on a private placement basis pursuant to Regulation S and/or
rule 506 under Regulation D of the Securities Act.
(m) Directors' and Officers' Insurance.
(i) Parent shall at its expense, until the third
(3rd) anniversary of the Effective Time, cause to be
maintained in effect, to the extent available, policies of
directors' and officers' liability insurance in a face amount
of not less than $10,000,000.
(ii) The provisions of this Section 4.01(m) are
intended to be for the benefit of, and shall be enforceable
by, each party entitled to insurance coverage under Section
4.01(m)(i) above, and his or her heirs and legal
representatives, and shall be in addition to any other rights
a Director or Officer may have under the articles of
incorporation or by-laws of Parent or under the NMAL, or
otherwise.
(iii) In the event Parent or any of its successors or
assigns (a) consolidates with or merges into any other person
and shall not be the continuing or surviving corporation or
entity of such consolidation or merger or (b) transfers all or
substantially all of its properties and assets to any person,
then, in each such case, proper provision shall be made so
that the successors and assigns of Parent, as the case may be,
shall assume the obligations set forth in this Section
4.01(m).
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(n) OTCBB Listing.
Parent shall cause the shares of Common Stock to remain
eligible for quotation on the OTCBB of the NASD.
(o) Approval of Board of Directors.
Prior to the date of this Agreement, the Boards of Directors
of Parent and Merger-Sub by written consent approved the terms of this
Agreement.
(p) SEC Filings.
Parent shall use reasonable efforts to prepare and file in a
timely manner any Exchange Act Filings required to be made prior to or after the
Closing Date. If at any time prior to the Closing Date Parent finds that any
Exchange Act Filing contained an untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, Parent shall, upon becoming aware of any such untrue
statement or omission, promptly notify booktech.
(q) Reputable Investor.
Parent shall retain a reputable investor relations firm that
is reasonably acceptable to Parent and booktech pursuant to an agreement
substantially in the form of Exhibit 4.01(q) hereto.
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(r) AMEX Listing.
Parent shall use its best efforts to cause its shares of
Common Stock to be admitted for trading on the American Stock Exchange ("AMEX"),
subject to official notice of issuance, as soon as possible.
(s) Notices and Consents.
Parent and Merger-Sub have given any notices to third parties,
and will each use their best efforts to obtain any third party consents, that
are required in connection with the transactions contemplated by this Agreement,
as set forth in Schedule 4.01(s).
(t) Written Consent of Sole Stockholder.
Merger-Sub shall obtain the written consent of Parent, its
sole stockholder, approving all matters necessary for the consummation of the
transactions contemplated by this Agreement.
(u) Confidentiality.
Both Parent and Merger-Sub shall insure that all information
and documentation of a confidential or proprietary nature which is obtained
pursuant to this Agreement or the transactions contemplated hereby and which has
been marked or otherwise expressly identified as confidential shall be treated
as strictly confidential and that all such information and documentation which
such party or any of their respective officers, directors, employees, attorneys,
agents, investment bankers or accountants may now possess or may hereafter
create or obtain relating to the financial condition, results of operations,
businesses, properties, assets, liabilities or future prospects of the other
parties hereto, any affiliate of such other parties, or any customer or supplier
of such other parties or any such affiliate shall not be published, disclosed
65
or made accessible by any of them to any other person or entity at any time or
used by any of them, in each case without the prior written consent of the other
parties hereto; provided, however, that the restrictions of this Section 4.01(u)
shall not apply (i) as may otherwise be required by law, (ii) as may be
necessary or appropriate in connection with the enforcement of this Agreement;
or (iii) to the extent such information was in the public domain when received
or thereafter enters the public domain other than because of disclosure by the
other parties hereto. Both Parent and Merger-Sub shall, and shall cause all of
such other persons and entities who receive or received such confidential or
proprietary information and materials from time to time to return to the party
who provided such information or materials all of such information and materials
at such time as negotiations with respect to the Mergers are terminated.
(v) General.
Parent and Merger-Sub will use their best efforts to take all
action and to do all things necessary, proper, or advisable in order to
consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing conditions set forth is
Sections 5.01 and 5.02 below).
ss.4.02 Covenants of booktech.
booktech covenants and agrees as follows:
(a) Articles of Organization and By-Laws.
As of the Closing Date, the articles of Organization and
by-laws of booktech shall be in the form of Exhibit 4.02(a).
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(b) Shares, Options and Warrants.
Except as contemplated hereby, until the earlier of the
Effective Time or the Release Time without the prior written consent of Parent,
no share of capital stock of booktech or any option or warrant for any such
share, right to subscribe to or purchase any such share, or security convertible
into or exchangeable for any such share, shall be issued or sold by booktech,
nor shall booktech enter into any agreement or commitment to effect any such
issuance or sale, except as set forth in Schedule 4.02(b) hereto.
(c) Borrowing of Money; Working Capital.
Until the Release Time, booktech shall not incur indebtedness
for borrowed money. Until the Release Time, booktech shall not guarantee the
borrowing of money by any third party, enter into or modify any capital or
operating lease or enter into any material agreement, which in any case would by
its terms require the payment by booktech of more than $5,000 by booktech in any
twelve (12) month period.
(d) Access.
Until the Release Time, booktech will afford the Directors,
officers, employees, counsel, agents, investment bankers, accountants, and other
representatives of Parent and Merger-Sub reasonable access to the plants,
properties, books, and records of booktech, will permit them to make extracts
from and copies of such books and records, and will from time to time furnish
Parent and Merger-Sub with such additional financial and operating data and
other information as to the financial condition, results of operations,
businesses, properties, assets, liabilities, or future prospects of booktech as
Parent and Merger-Sub from time to time may reasonably request.
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(e) Conduct of Business.
Until the Release Time, booktech shall not take any action
that would or is reasonably likely to result in any of the representations or
warranties of booktech set forth in this Agreement being untrue at the Closing
Date or to any of the conditions to the Merger set forth in Article V not being
satisfied. Until the Release Time, booktech will use all reasonable efforts to
preserve the business operations of booktech intact, to keep available the
services of its present personnel, and to preserve the good will of its
suppliers, customers, and others having business relations with any of them.
(f) Advice of Changes.
Until the Release Time, booktech will promptly advise Parent
and Merger-Sub in a reasonably detailed written notice of any fact or occurrence
or any pending or threatened occurrence of which it obtains knowledge and which
(if existing or known at the date of the execution of this Agreement) would have
been required to be set forth or disclosed in or pursuant to this Agreement,
which (if existing and known at any time prior to or at the Effective Time)
would make the performance by any party of a covenant contained in this
Agreement impossible or make such performance materially more difficult than in
the absence of such fact or occurrence, or which (if existing and known at the
time of the Effective Time) would cause a condition to any party's obligations
under this Agreement not to be fully satisfied.
(g) Public Statements.
Before booktech releases any information concerning this
Agreement, the Merger, or any of the other transactions contemplated by this
Agreement which is intended for or is reasonably expected to result in public
dissemination thereof, booktech shall cooperate with
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Parent and Merger-Sub, shall furnish drafts of all documents or proposed oral
statements to Parent and Merger-Sub for comments, and shall not release any such
information without the prior consent of Parent; provided, however, that the
foregoing shall not be deemed to prevent booktech from releasing any information
or making any disclosure to the extent booktech reasonably determines that it is
required to do so by law.
(h) Securities Law Exemption.
booktech, at its expense, will take all necessary steps to
insure that there are less than an aggregate of 35 non-accredited holders of its
securities and the securities of Virtuosity (on a consolidated basis) at the
Effective Time.
(i) Approval of Board of Directors.
Prior to the date of this Agreement, the Board of Directors of
booktech by written consent approved the terms of this Agreement.
(j) Break-Up Fee.
If booktech terminates this Agreement other than for Parent's
failure to perform its obligations hereunder, then booktech shall pay to Verus a
break-up fee not to exceed $85,000.
(k) Stockholders Meeting.
booktech shall call a special meeting of its stockholders to
consider and vote upon the matters necessary for the consummation of the
transactions contemplated by this Agreement (or, alternatively, shall solicit
written consents in lieu of holding such a special meeting).
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(l) Confidentiality.
booktech shall insure that all information and documentation
of a confidential or proprietary nature which is obtained pursuant to this
Agreement or the transactions contemplated hereby shall be treated as strictly
confidential and that all such information and documentation which such party or
any of its respective officers, directors, employees, attorneys, agents,
investment bankers or accountants may now possess or may hereafter create or
obtain relating to the financial condition, results of operations, businesses,
properties, assets, liabilities or future prospects of the other parties hereto,
any affiliate of such other parties, or any customer or supplier of such other
parties or any such affiliate shall not be published, disclosed or made
accessible by any of them to any other person or entity at any time or used by
any of them, in each case without the prior written consent of the other parties
hereto; provided, however, that the restrictions of this Section 4.02(h) shall
not apply (i) as may otherwise be required by law, (ii) as may be necessary or
appropriate in connection with the enforcement of this Agreement; or (iii) to
the extent such information was in the public domain when received or thereafter
enters the public domain other than because of disclosure by the other parties
hereto. booktech shall, and shall cause all of such other persons and entities
who receive or received such confidential or proprietary information and
materials from time to time to return to the party who provided such information
or materials all of such information and materials at such time as negotiations
with respect to the Mergers are terminated.
(m) General.
booktech will use its best efforts to take all action and to
do all things necessary, proper, or advisable in order to consummate and make
effective the transactions contemplated by
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this Agreement (including satisfaction, but not waiver, of the closing
conditions set forth in Section 5.03 below).
V. CONDITIONS.
ss.5.01 Conditions to Each Party's Obligation to Effect the
Merger.
The respective obligation of each party to effect the Merger
is subject to the fulfillment, at or prior to the Closing, of each of the
following conditions:
(a) Stockholder Approval.
This Agreement and the Merger shall have been adopted by the
requisite vote of (i) the stockholders of Merger-Sub and (ii) the stockholders
of booktech.
(b) State Securities Laws.
Parent shall have received all state securities or "Blue Sky"
permits and other authorizations necessary to issue Common Stock pursuant to the
Merger.
(c) No Injunctions or Restraints.
No court of competent jurisdiction or other competent
Governmental or Regulatory Authority shall have enacted, issued, promulgated,
enforced or entered any Law or Order (whether temporary, preliminary or
permanent) which is then in effect and has the effect of making illegal or
otherwise restricting, preventing or prohibiting consummation of the Merger or
the other transactions contemplated by this Agreement.
(d) Consents and Approvals.
Other than the filings provided for by Section 1.02, all
consents, approvals and actions of, filings with and notices to any Governmental
or Regulatory Authority or any other public or private third parties required of
Parent, Merger-Sub or booktech to consummate the
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Merger shall have been obtained, all in form and substance reasonably
satisfactory to each of Parent, Merger-Sub and booktech, and no such consent,
approval or action shall contain any term or condition which could be reasonably
expected to result in a material diminution of the benefits of the Merger to the
stockholders of Parent and booktech.
(e) Customary Documents.
All customary certificates, documents, instruments and
opinions of counsel, which each of the parties agrees to negotiate in good faith
shall be executed and delivered on or before the Closing Date.
ss.5.02 Conditions to Obligation of Parent and Merger-Sub to
Effect the Merger.
The obligation of Parent and Merger-Sub to effect the Merger
is further subject to the fulfillment, at or prior to the Closing, of each of
the following additional conditions (all or any of which may be waived in whole
or in part by Parent and Merger-Sub and in their sole discretion):
(a) Representations and Warranties.
The representations and warranties made by booktech in this
Agreement shall be true and correct in all material respects as of the Closing
Date as though made on and as of the Closing Date or, in the case of
representations and warranties made as of a specified date earlier than the
Closing Date, on and as of such earlier date, and booktech shall have delivered
to Parent a certificate, dated the Closing Date and executed on behalf of
booktech by a duly authorized officer, to such effect.
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(b) Performance of Obligations.
booktech shall have performed and complied with, in all
material respects, each agreement, covenant and obligation required by this
Agreement to be so performed or complied with by booktech at or prior to the
Closing, and booktech shall have delivered to Parent a certificate dated the
Closing Date and executed on behalf of booktech by a duly authorized officer, to
such effect.
(c) Other Closing Documents.
booktech shall have delivered to Parent and Merger-Sub at or
prior to the Closing Date such other documents as Parent or Merger-Sub may
reasonably request in order to enable Parent or Merger-Sub to determine whether
the conditions to its obligations under this Agreement have been met and
otherwise to carry out the provisions of this Agreement.
(d) Review of Proceedings.
All actions, proceedings, instruments and documents required
by Parent and Merger-Sub to carry out this Agreement or incidental thereto and
all other related legal matters shall be subject to the reasonable approval of
Xxxxxxx Xxxxx & Xxxxx LLP, counsel to Parent and Merger-Sub, and booktech shall
have furnished such documents as such counsel may have reasonably requested for
the purpose of enabling it to pass upon such matters.
(e) Legal Action.
There shall not have been instituted or threatened any legal
proceeding relating to, or seeking to prohibit or otherwise challenge the
consummation of, the transactions contemplated by this Agreement, or to obtain
substantial damages with respect thereto.
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(f) Certificates.
booktech shall have delivered to each of Parent and Merger-Sub
a certificate to the effect that each of the conditions specified in Section
5.03 are satisfied in all respects.
(g) Opinion.
Each of Parent and Merger-Sub shall have received an opinion
from counsel to booktech, in form and substance as set forth in Exhibit 5.02(g)
attached hereto, addressed to both Parent and Merger-Sub, and dated as of the
Closing Date.
ss.5.03 Conditions to Obligation of booktech to Effect the
Merger.
The obligation of booktech to effect the Merger is further
subject to the fulfillment, at or prior to the Closing, of each of the following
additional conditions (all or any of which may be waived in whole or in part by
booktech in its sole discretion):
(a) Representations and Warranties
The representations and warranties made by Parent and
Merger-Sub in this Agreement shall be true and correct in all material respects
as of the Closing Date as though made on and as of the Closing Date or, in the
case of representations and warranties made as of a specified date earlier than
the Closing Date, on and as of such earlier date, and Parent and Merger-Sub
shall have delivered to booktech a certificate, dated the Closing Date and
executed on behalf of Parent and Merger-Sub by a duly authorized officer, to
such effect.
(b) Performance of Obligations.
Parent and Merger-Sub shall have performed and complied with
in all material respects, each agreement, covenant and obligation required by
this Agreement to be so performed or complied with by Parent and Merger-Sub at
or prior to the Closing, and Parent and
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Merger-Sub shall have delivered to booktech a certificate, dated the Closing
Date and executed on behalf of Parent and Merger-Sub by a duly authorized
officer, to such effect.
(c) Other Closing Documents.
Parent and Merger-Sub shall have delivered to booktech at or
prior to the Effective Time such other documents as booktech may reasonably
request in order to enable booktech to determine whether the conditions to their
obligations under this Agreement have been met and otherwise to carry out the
provisions of this Agreement.
(d) Review of Proceedings.
All actions, proceedings, instruments and documents required
by booktech to carry out this Agreement or incidental thereto and all other
related legal matters shall be subject to the reasonable approval of Camhy
Xxxxxxxxx & Xxxxx LLP, counsel to booktech, and Parent and Merger-Sub shall have
furnished such documents as such counsel may have reasonably requested for the
purpose of enabling it to pass upon such matters.
(e) Legal Action.
There shall not have been instituted or threatened any legal
proceeding relating to, or seeking to prohibit or otherwise challenge the
consummation of, the transactions contemplated by this Agreement, or to obtain
substantial damages with respect thereto or to cause any of the transactions
contemplated by this Agreement to be rescinded following consummation.
(f) OTCBB.
The shares of the Common Stock issued shall remain eligible
for quotation on the OTCBB of the NASD.
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(g) Tax-Free Exchanges.
booktech and its advisors shall be reasonably satisfied that
the Merger will qualify as a tax-free exchange.
(h) Capital.
Parent and Merger-Sub shall be in strict compliance with
Section 2.05.
(i) Consents.
Parent and Merger-Sub shall have procured all of the consents,
approvals or authorizations and third party consents specified in Schedule
4.01(s).
(j) Certificates.
Parent and Merger-Sub shall each have delivered to booktech a
certificate to the effect that the representations and warranties set forth in
Section 4.01 are true and correct as of the Closing, and each of the conditions
specified in Section 5.02 are satisfied in all respects.
(k) Opinion.
booktech shall have received an opinion from counsel to each
of Parent and Merger-Sub, in form and substance as set forth in Exhibit 5.03(k)
attached hereto, addressed to booktech, and dated as of the Closing Date.
(l) Due Diligence.
booktech shall have completed its due diligence investigation
of Parent and Merger-Sub and shall have been satisfied, in its sole discretion,
with the results of such investigation.
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(m) No Material Adverse Change.
There shall not have been any change which has resulted in a
Material Adverse Effect and no event has occurred or circumstances exists that
may result in such a Material Adverse Effect.
VI. TERMINATION.
ss.6.01 Termination.
This Agreement may be terminated, and the transactions
contemplated hereby may be abandoned at any time prior to the Effective Time,
whether prior to or after Merger-Sub's stockholders' approval or the booktech's
stockholders' approval:
(a) By mutual written agreement of the parties hereto duly
authorized by action taken by or on behalf of their respective Boards of
Directors.
(b) By either booktech, Parent or Merger-Sub upon written
notification to the other party, if:
(i) Merger-Sub's stockholders' approval or booktech's
stockholders' approval shall not be obtained by reason of the
failure to obtain the requisite vote upon a vote held at a
meeting of such stockholders; or
(ii) facts exist which render impossible the
satisfaction of one or more of the conditions set forth in
Section 5.01 and such are not waived by Parent, Merger-Sub and
booktech.
(c) By Parent and Merger-Sub upon written notification to
booktech, if:
(i) there has been a material breach of any
representation, warranty, covenant or agreement on the part of
booktech set forth in this Agreement which
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breach has not been cured within ten (10) business days
following receipt by booktech of notice of such breach from
Parent or Merger-Sub or assurance of such cure reasonably
satisfactory to Parent and Merger-Sub have not been given by
or on behalf of booktech within such ten (10) business day
period; or
(ii) facts exist which render impossible the
satisfaction of one or more of the conditions set forth in
Section 5.02 and such are not waived by booktech; or
(d) By booktech upon written notification to Parent and
Merger-Sub, if:
(i) at any time after March 31, 2000 if the Merger
shall not have been consummated on or prior to such date and
such failure to consummate the Merger is not caused by a
breach of this Agreement by booktech; or
(ii) there has been a material breach of any
representation, warranty, covenant or agreement on the part of
Parent or Merger-Sub set forth in this Agreement which breach
has not been cured within ten (10) business days following
receipt by Parent or Merger-Sub of notice of such breach from
booktech or assurance of such cure reasonably satisfactory to
booktech shall not have been given by or on behalf of Parent
or Merger-Sub within such ten (10) business day period; or
(iii) facts exist which render impossible the
satisfaction of one or more of the conditions set forth in
Section 5.03 and such are not waived by booktech.
ss.6.02 Effect of Termination.
If this Agreement is validly terminated by Parent and
Merger-Sub or booktech pursuant to Section 6.01, this Agreement shall forthwith
become null and void and there shall be
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no liability or obligation on the part of either Parent and Merger-Sub or
booktech (or any of their respective officers, directors, representatives, or
affiliates), except that (i) the provisions of this Section 6.02, and the
Break-Up Fee referred to in Section 4.02(f) will continue to apply following any
such termination, and (ii) nothing contained herein shall relieve Parent and
Merger-Sub, or booktech from liability for willful or intentional breach of
their respective obligations contained in this Agreement or for fraud.
VII. INDEMNIFICATION.
ss.7.01 Indemnification by Parent.
Parent agrees to indemnify and hold harmless booktech and its
officers, directors, employees, counsel and agents (the "booktech Indemnitees")
against and in respect of any and all liabilities, obligations, judgments,
Liens, injunctions, charges, orders, decrees, rulings, damages, dues,
assessments, taxes, losses, fines, penalties, expenses, fees, costs, amounts
paid in settlement (including reasonable attorneys' and expert witness fees and
disbursements in connection with investigating, defending or settling any action
or threatened action), arising out of claims, damages, complaints, demands,
causes of action, audit, investigations, hearing, action, suit or other
proceeding asserted or initiated or otherwise existing in respect of any matter
(collectively the "Losses") (within one (1) year of the Closing Date) arising
out of or based upon any breach or inaccuracy of any representation, warranty,
covenant or agreement of Parent or Merger-Sub contained in this Agreement
(including the Exhibits and Schedules attached hereto) or any certificates
delivered pursuant to this Agreement, or arising out of any litigation pending
against Parent or Merger-Sub, their officers or directors, on the date of this
Agreement.
ss.7.02 Indemnification by booktech.
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booktech agrees to indemnify and hold harmless Parent and
Merger-Sub and their officers, directors, employees, counsel and agents (the
"E&G Indemnitees") against and in respect of any and all Losses within one (1)
year of the Closing Date, arising out of or based upon any breach or inaccuracy
of any representation, warranty, covenant or agreement of booktech contained in
this Agreement (including the Exhibits and Schedules attached hereto) or any
certificates delivered pursuant to this Agreement, or arising out of any
litigation pending against booktech, its officers or directors on the date of
this Agreement.
ss.7.03 Third Party Claims.
If any third party shall notify any party to this Agreement
(the "Indemnified Party") with respect to any matter (a "Third Party Claim")
which may give rise to a claim for indemnification against any other party to
this Agreement (the "Indemnifying Party") under this Section 7, then the
Indemnified Party shall promptly notify each Indemnifying Party thereof in
writing; provided, however, that no delay on the part of the Indemnified Party
in notifying any Indemnifying Party shall relieve the Indemnifying Party from
any obligation hereunder unless (and then solely to the extent) the Indemnifying
Party thereby is prejudiced.
(a) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party so long as (i) the Indemnifying
Party notifies the Indemnified Party in writing within 15 days after the
Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party from and against the
entirety of any Losses the Indemnified Party may suffer resulting from, arising
out of, relating to, in the nature of, or caused by the Third Party Claim, (ii)
the Indemnifying Party provides the Indemnified Party with evidence acceptable
to the Indemnified Party that the Indemnifying Party will have
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the financial resources to defend against the Third Party Claim and fulfill its
indemnification obligations hereunder, (iii) the Third Party Claim involves only
money damages and does not seek an injunction or other equitable relief, (iv)
settlement of, or an adverse judgment with respect to, the Third Party Claim is
not, in the good faith judgment of the Indemnified Party, likely to establish a
precedential custom or practice adverse to the continuing business interests of
the Indemnified Party, and (v) the Indemnifying Party conducts the defense of
the Third Party Claim actively and diligently.
(b) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with Section 7.03(b) above, (i)
the Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Third Party Claim, (ii) the
Indemnified Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the prior written
consent of the Indemnifying Party (which consent shall not unreasonably be
withheld), and (iii) the Indemnifying Party will not consent to the entry of any
judgment or enter into any settlement with respect to the Third Party Claim
unless written agreement is obtained releasing the Indemnified Party from all
liability thereunder.
(c) In the event any of the conditions in Section 7.05(b)
above is or becomes unsatisfied, however, (i) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any settlement
with respect to, the Third Party Claim in any manner it may deem appropriate
(and the Indemnified Party need not consult with, or obtain any consent from,
any Indemnifying Party in connection therewith), (ii) the Indemnifying Parties
will reimburse the Indemnified Party promptly and periodically for the costs of
defending against the Third Party Claim (including attorneys' fees and
expenses), and (iii) the Indemnifying Parties
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will remain responsible for any Losses the Indemnified Party may suffer
resulting from, arising out of, relating to, in the nature of, or caused by the
Third Party Claim to the fullest extent provided in this Section 7.
VIII. MISCELLANEOUS.
ss.8.01 Further Actions.
Each party hereto will execute such further documents and
instruments and take such further actions as may reasonably be requested by the
other party to consummate the Merger, to vest the booktech with full title to
all assets, properties, rights, approvals, immunities and franchises of either
of the Constituent Entities or to effect the other purposes of this Agreement.
ss.8.02 Availability of Equitable Remedies.
Since a breach of the provisions of this Agreement could not
adequately be compensated by money damages, any party shall be entitled, either
before or after the Effective Time, in addition to any other right or remedy
available to it, to an injunction restraining such breach or threatened breach
and to specific performance of any such provision of this Agreement, and, in
either case, no bond or other security shall be required in connection
therewith, and the parties hereby consent to the issuance of such an injunction
and to the ordering of specific performance.
ss.8.03 Survival.
The representations and warranties contained in this Agreement
or in any instrument delivered pursuant to this Agreement shall not survive the
Merger. The termination of any such representations and warranties, however,
shall not effect any claim for breaches of
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representations or warranties if written notice thereof is given to the
breaching party or parties prior to such termination date.
ss.8.04 Modification.
This Agreement may be amended, supplemented or modified by
action taken by or on behalf of the respective Boards of Directors of the
parties hereto at any time prior to the Effective Time. No such amendment,
supplement or modification shall be effective unless set forth in a written
instrument duly executed by or on behalf of each party hereto.
ss.8.05 Notices.
Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be mailed by certified mail,
return receipt requested or by Federal Express, express mail, e-mail or similar
overnight delivery or courier service or delivered (in person or by telecopy,
telex or similar telecommunications equipment) against receipt to the party to
which it is to be given at the address of such party set forth in the preamble
to this Agreement (or to such other address as the party shall have furnished in
writing in accordance with the provisions of this Section 8.05) with copies
(which copies shall not constitute notice) as follows:
If to Parent
and Merger-Sub: Ebony & Gold Ventures, Inc.
c/o Verus International Ltd.
Hanger 5, 0000 Xxxx Xxxxx
Xxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
With a copy to: Xxxxxxx Xxxxx & Xxxxx LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxx
If to booktech: xxxxxxxx.xxx, inc.
00 Xxxxxxxx Xxxx
00
Xxxxxx, Xxxxxxxxxxxxx 00000
With a copy to: Camhy Xxxxxxxxx & Xxxxx LLP
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
Any notice shall be addressed to the attention of the Chief
Executive Officer. Any notice or other communication given by certified mail
shall be deemed given three (3) business days after certification thereof,
except for a notice changing a party's address which will be deemed given at the
time of receipt thereof. Any notice given by other means permitted by this
Section 8.05 shall be deemed given at the time of receipt thereof.
ss.8.06 Waiver.
Any waiver by any party of a breach of any term of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of that term or of any breach of any other term of this Agreement. The
failure of a party to insist upon strict adherence to any term of this Agreement
on one or more occasions will not be considered a waiver or deprive that party
of the right thereafter to insist upon strict adherence to that term or any
other term of this Agreement. Any waiver must be in writing and be authorized by
a resolution of the Board of Directors, of the waiving party, or by an officer
of the waiving party.
ss.8.07 Binding Effect.
The provisions of this Agreement shall be binding upon and
inure to the benefit of Parent, Merger-Sub, booktech, and their respective
successors and assigns.
ss.8.08 No Third-Party Beneficiaries.
This Agreement does not create, and shall not be construed as
creating, any rights enforceable by any person not a party to this Agreement
(other than the respective successors
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and permitted assigns of a party), except as referred to in Sections 4.01(m),
4.02(f), 7.01 and 7.02.
ss.8.09 Severability.
If any provision of this Agreement is hereafter held to be
invalid, illegal or unenforceable for any reason, such provision shall be
reformed to the maximum extent permitted so as to preserve the parties' original
intent, failing which, it shall be severed from this Agreement, with the balance
of this Agreement continuing in full force and effect. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable. If any provision is inapplicable to any
person or circumstance, it shall nevertheless remain applicable to all other
persons and circumstances.
ss.8.10 Merger; Assignability.
This Agreement, the other agreements to be delivered pursuant
to this Agreement, and Exhibits and Schedules attached hereto set forth the
entire understanding of the parties with respect to the subject matter hereof
and supersede all existing agreements concerning such subject matter, including
the letter of intent, as amended, between booktech and Parent. This Agreement
may not be assigned by any party without the prior written consent of each other
party to this Agreement.
ss.8.11 Headings.
The headings in this Agreement are solely for convenience of
reference and shall be given no effect in the construction or interpretation of
this Agreement.
ss.8.12 Counterparts; Governing Law; Jurisdiction.
This Agreement may be executed in any number of counterparts
(and by facsimile), each of which shall be deemed an original, but all of which
together shall constitute
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one and the same instrument. This Agent shall be governed by the Laws of the
State of Massachusetts. Each party to this Agreement, by its execution hereof,
hereby irrevocably submits to the exclusive jurisdiction of the United States
District Court located in the State of Massachusetts for the purposes of any
action arising out of or based upon this Agreement, or any related agreements or
relating to the subject matter hereof or thereof, in each case whether now
existing or hereafter arising, (ii) hereby waives to the extent not prohibited
by applicable law, agrees not to assert by way of motion, as a defense or
otherwise, in any such action, any claim that it is not subject personally to
the jurisdiction of the above-named court, that its property is exempt or immune
from attachment or execution, that any such action brought in the above-named
court should be dismissed on the grounds of forum non conveniens, should be
transferred to any court other than the above-named court, or should be stayed
by reason of the pendency of some other proceeding in any other court other than
the above-named court, or that this Agreement, any related agreements or the
subject matter hereof or thereof, in each case whether now existing or hereafter
arising, may not be enforced in or by such court, or that this Agreement, any
related agreements or relating or the subject matter hereof or thereof may not
be enforced in or by such court and (iii) hereby agrees not to commence any
action arising out of or based upon this Agreement, any related agreements or
relating to the subject matter hereof or thereof, in each case whether now
existing or hereafter arising, other than before the above-named court nor to
make any motion or take any other action seeking or intending to cause the
transfer or removal of any such action to any other court other than the
above-named court whether on the grounds of inconvenient forum or otherwise.
Each party hereby (x) consents to service of process in any such action in any
manner permitted by Massachusetts law; (y) agrees that service of process made
in accordance with clause (x) or by registered or certified mail, return receipt
requested, at its address specified pursuant to Section 8.05, is reasonably
calculated
86
to give actual notice of any such action; and (z) waives and agrees not to
assert (by way of motion, as a defense, or otherwise) in any such action any
claim that services of process made in accordance with clause (x) or (y) does
not constitute good and sufficient service of process.
ss.8.13 Waiver of Jury Trial.
TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE
WAIVED, THE PARTIES HEREBY WAIVE, AND COVENANT THAT THEY WILL NOT ASSERT
(WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN
ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
ARISING OUT OF OR PASSED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF,
WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN TORT OR
CONTRACT OR OTHERWISE.
ss.8.14 Expenses.
All of the costs and expenses (including legal and accounting
fees and expenses and including the legal fees of Camhy Xxxxxxxxx & Xxxxx LLP)
of booktech incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the Surviving Corporation at the Closing.
ss.8.15 Incorporation of Exhibits and Schedules.
The Exhibits and Schedules identified in this Agreement are
incorporated herein by reference and made a part hereof.
ss.8.16 Specific Performance.
Each of the parties acknowledges and agrees that the other
parties would be damaged irreparably in the event any of the provisions of this
Agreement are not performed in
87
accordance with their specific terms or otherwise are breached. Accordingly,
each of the parties agrees that the other parties shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any action instituted in any court of the United States or
any state thereof having jurisdiction over the parties and the matter in
addition to any other remedy to which it may be entitled, at law or in equity.
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IN WITNESS WHEREOF, this Merger Agreement has been executed by
duly authorized officers of each of the parties hereto as of the date first
above written.
EBONY & GOLD VENTURES, INC.
By:
-------------------------------------
Name: Xxxx Xxxxxxxx
Title: President
EG ACQUISITIONS CORPORATION
By:
-------------------------------------
Name: Xxxx Xxxxxxxx
Title: President
xxxxxxxx.xxx, inc.
By:
-------------------------------------
Name: Xxxxxx X. Xxxxxxx, Ph.D.
Title: President & Chief Executive Officer
By:
-------------------------------------
Name: Xxx Xxxxxxxx
Title: Chief Financial Officer
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