Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
dated as of July 2, 2001
by and among
Cardiac Control Systems, Inc.,
Nineteenth Acquisition Sub, Inc.,
Kersey, Scillia, Xxxxxxx and Xxxxxx, Inc.
and
Remodelers Holdings, Inc.
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made as of July
2, 2001, by and among Remodelers Holdings, Inc. ("Acquiror"), a Delaware
corporation, Cardiac Control Systems, Inc., a Delaware corporation (the
"Company"), Nineteenth Acquisition Sub, Inc., a Delaware corporation and
wholly-owned subsidiary of the Company ("Acquisition Sub") and Kersey, Scillia,
Xxxxxxx and Xxxxxx, Inc., as agent for the Company (the "Agent").
R E C I T A L S
This Agreement contemplates a transaction in which Acquiror will
acquire ninety-five percent (95%) of the outstanding stock of the Company for
cash and stock through a reverse merger (the "Merger") of Acquisition Sub with
and into Acquiror.
As a result of the Merger, Acquiror will become a wholly-owned
subsidiary of the Company and the stockholders of Acquiror will become
stockholders of ninety-five percent of the outstanding shares of the Company.
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, intending to be legally bound hereby, and in consideration
of the representations, warranties, and covenants herein contained, the Parties
agree as follows.
AGREEMENT
1. Transactions on or Prior to the Closing Date.
1.1 The Merger.
(a) Subject to the terms and provisions of this Agreement, and in
accordance with the Delaware General Corporation Law (the "DGCL"), at the
Effective Time (as defined in Section 1.1(d)), Acquisition Sub shall be merged
with and into Acquiror. Acquiror shall be the surviving corporation of the
Merger (sometimes hereinafter called the "Surviving Corporation") and shall
continue its corporate existence under the laws of the State of Delaware. At the
Effective Time, the separate corporate existence of the Acquisition Sub shall
cease. For federal income tax purposes, the parties intend that the Merger shall
qualify as a tax-free reorganization under Section 351 and Section 368 of the
Internal Revenue Code of 1986, as amended.
(b) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Jenkens &
Xxxxxxxxx, a Professional Corporation, 0000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxx 00000, commencing at 10:00 a.m. local time the later to occur of (a) the
day after the day on which the Confirmation Order becomes a Final Order under
the Plan; or (b) the day following the date on which all the conditions set
forth in Section 4 and Section 6 have been satisfied or waived (other than
conditions with respect to actions the respective Parties will take at the
Closing itself); or (c) such other date as the Parties may mutually determine
(the "Closing Date").
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(c) Actions at the Closing. At the Closing, (i) the Company and the
Agent will deliver to Acquiror the various certificates, instruments, and
documents referred to in Section 4 below, (ii) Acquiror will deliver to the
Company the various certificates, instruments, and documents referred to in
Section 6 below, and (iii) Acquisition Sub and Acquiror shall file with the
Secretary of State of the State of Delaware a properly executed Certificate of
Merger.
(d) Effect of Merger.
(i) General. The Merger shall become effective at the time
(the "Effective Time") the parties to this Agreement shall file the
Certificate of Merger with the Secretary of State of the State of
Delaware. The Merger shall have the effect set forth in the DGCL. The
Surviving Corporation may, at any time after the Effective Time, take
any action (including executing and delivering any document) in the
name and on behalf of either the Company, Acquisition Sub or Acquiror
in order to carry out and effectuate the transactions contemplated by
this Agreement.
(ii) Certificate of Incorporation. The Certificate of
Incorporation of the Surviving Corporation shall be and remain the
Certificate of Incorporation of the Surviving Corporation until such
Certificate of Incorporation is amended, altered or repealed as
provided by law.
(iii) Bylaws. The Bylaws of the Surviving Corporation shall be
and remain the Bylaws of the Surviving Corporation until such Bylaws
are amended, altered or repealed as provided by law.
(iv) Directors and Officers. The directors and officers of
Acquiror shall remain the directors and officers of the Surviving
Corporation at and as of the Effective Time (retaining their respective
positions and terms of office).
(v) Conversion of Capital Stock of Acquisition Sub. At and as
of the Effective Time, each issued and outstanding share of capital
stock of Acquisition Sub shall be canceled and neither shares of
capital stock of the Surviving Corporation nor any cash, property,
rights, other securities or obligations of the Surviving Corporation
shall be issued therefor, except as provided in Section 1.2 below.
(e) If, at any time after the Effective Time, the Surviving Corporation
shall consider or be advised that any further assignments or assurances in law
or any other acts are necessary or desirable (i) to vest, perfect or confirm of
record or otherwise, in the Surviving Corporation, title to and possession of
any property or right to Acquiror or Acquisition Sub, as the case may be,
acquired or to be acquired by reason of, or as a result of, the Merger, or (ii)
otherwise to carry out the purposes of this Agreement, the Company, the Agent
and each of Acquiror and Acquisition Sub and their respective proper officers
and directors shall be deemed to have granted hereby to the Surviving
Corporation an irrevocable power of attorney to execute and deliver all such
proper deeds, assignments and assurances in law and to do all acts necessary or
proper to vest, perfect or confirm title to, and the possession of such property
or rights in, the Surviving Corporation and otherwise to carry out the purposes
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of this Agreement, and the proper officers and directors of the Surviving
Corporation are hereby fully authorized in the name of Acquiror or Acquisition
Sub or otherwise to take any and all such action.
1.2 Merger Consideration.
(a) Purchase Price. Ten calendar days prior to the confirmation of the
Plan, Acquiror shall pay an aggregate of $145,000 to the Liquidating Trust (as
defined in the Debtor's Second Amended Chapter 11 Plan of Reorganization (the
"Plan"), relating to In re: Cardiac Control Systems, Inc., Case No.
99-06852-3P1) by wire transfer in immediately available funds to Xxxxxxxx &
Thames, P.A., counsel for the Company.
(b) Cancellation of Company Shares. Except as provided in Section
1.2(c) below, at and as of the Effective Time, each outstanding share of capital
stock the Company, conversion rights, warrants and options to purchase any share
of capital stock of the Company, and other equity interest issued and
outstanding or held in the Company's treasury shall automatically be canceled
and extinguished without conversion hereof and no payment shall be made in
respect thereof according to the provisions of the Plan. No share of capital
stock of the Company shall be deemed to be outstanding or to have any rights
after the Effective Time. After the Effective Time, there shall be no further
registration of transfers on the stock transfer books of the Company of the
shares of capital stock of the Company that were outstanding immediately prior
to the Effective Time and that are to be converted into the right to receive the
any shares of Common Stock, as provided in this Section 1.2.
(c) Distribution of Shares. At Closing, the Company shall issue: (A) an
aggregate of 250,000 shares of common stock of the Company (the "Common Stock")
to the Agent, the Company's creditors and certain of the Company's stockholders,
to be issued to such persons and in such amounts as provided in the Plan; (B) an
aggregate of 20,000 shares of Common Stock to the Liquidating Trust to be sold
and applied to the payment of certain of Acquiror's administrative costs and
fees associated with the Merger, as provided in the Plan; (C) an aggregate of
4,730,000 shares of Common Stock to holders of common stock of Acquiror on a pro
rata basis according to their ownership of common stock of Acquiror; and (D)
shares of preferred stock in such amounts and with such designations,
preferences and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions comparable to any class of preferred
stock of Acquiror outstanding immediately prior to the Effective Time.
(d) Payment in Full. The Merger Consideration for which the capital
stock of the Company shall have been issued pursuant to this Section 1 shall be
deemed to have been paid in full satisfaction of all rights pertaining to such
capital stock upon the notation on the stock transfer books of the Company on
receipt of such capital stock by a recipient thereof.
(e) Exchange of Certificates. At the Closing, the Company shall tender
or cause to be tendered to Acquiror the certificates representing the capital
stock of the Company issued and outstanding prior to the Effective Time, each of
which certificates shall be duly endorsed in blank for transfer to and in the
name of Acquiror. Until such exchange has occurred, each certificate which prior
to the Merger represented any shares of capital stock of the Company shall be
canceled or shall be deemed, as appropriate, for all purposes and without any
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further act or deed on the part of the holder thereof, to evidence ownership of
such portion of the amount of Common Stock, if any, described in Section 1.2(c)
above.
(f) Certificate of Incorporation. The Certificate of Incorporation of
the Company shall be amended and restated at and as of the Closing substantially
in the form attached hereto as Exhibit A.
(g) Bylaws. The Bylaws of the Company shall be amended and restated at
and as of the Closing substantially in the form attached hereto as Exhibit B.
(h) Directors and Officers. The officers and directors of the Company
shall submit their resignations effective as of the Closing.
2. Representations and Warranties of the Company. The Company and the
Agent, as applicable, represent and warrant to Acquiror that the statements
contained in this Section are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Section), except as set forth in the Schedules
attached hereto. The Parties acknowledge that all of the assets and liabilities
of the Company shall be transferred to the Liquidating Trust and the transfer of
all such assets to the Liquidating Trust will not be deemed to be a breach of
any of the following representations. Nothing in the Schedules shall be deemed
adequate to disclose an exception to a representation or warranty made herein,
however, unless the Schedule identifies the exception with particularity and
describes the relevant facts in detail. The Schedules shall be arranged to
correspond to the lettered and numbered paragraphs contained in this Section.
2.1 Organization and Qualification; Subsidiaries.
(a) The Company is duly organized and validly existing as a corporation
in good standing under the laws of the State of Delaware. Contingent upon the
approval of the Plan by the Bankruptcy Court, the Company will have the power to
own, lease and operate its properties and assets and to carry on its business in
the manner contemplated by its organizational documents. The minute books
(containing the records of meetings of the stockholders, the board of directors,
and any committees of the board of directors), the stock certificate books, the
stock record books, true and complete copies of the Certificate of
Incorporation, or other charter documents, and Bylaws of the Company in effect
on the date hereof have been delivered to Acquiror.
(b) Other than Acquisition Sub, the Company has no subsidiaries and
does not own an equity interest in any corporation, partnership, joint venture,
limited liability company or other business entity which will not be transferred
to the Liquidating Trust pursuant to the Plan.
2.2 Capitalization.
(a) The authorized capitalization of the Company consists of 30,000,000
shares of common stock, par value $0.10 per share (the "Company Common Stock"),
of which 5,979,579.49 shares are issued and outstanding and 24,020,420.51 are
held in treasury. At the Closing, all of the outstanding Company Common Stock
will be owned by the holders thereof as listed on the stock record books of the
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Company previously delivered to Acquiror. All of the Company Common Stock was
and will be validly issued and outstanding and is fully paid and non-assessable.
The Company Common Stock was issued in conformity with applicable law and
neither any party to whom such Company Common Stock was issued nor any person
claiming through any such party has any claim against the Company in respect of
any such issuance. There are no voting trusts or other agreements or
understandings to which the Company is a party with respect to the voting of the
Company Common Stock. The Company is not party to nor bound by any agreement
relating to or restricting the transfer of the Company Common Stock, except for
this Agreement.
(b) Upon Confirmation of the Plan, all subscriptions, options, rights,
warrants, convertible securities and other agreements or commitments obligating
the Company to issue or to transfer any additional capital stock and any
securities convertible into, or exchangeable or exercisable for, or otherwise
evidencing a right to acquire, any capital stock of the Company shall be
canceled or terminated. There are no preemptive rights relating to the Company's
capital stock. There are no outstanding contractual obligations of the Company
to repurchase, redeem or otherwise acquire any outstanding capital stock or
other ownership interest in the Company.
2.3 Undisclosed Liabilities. The Company does not have any liability
and there is no basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand against it giving
rise to any liability which will not be discharged upon Confirmation of the
Plan.
2.4 Tax Matters. Except as set forth in Schedule 2.4, within the times
and in the manner prescribed by law, the Company has filed all federal, state,
local and foreign returns for Taxes (as defined below) ("Returns") required to
be filed in any jurisdiction (including, without limitation, informational
returns) and such Returns are complete, true and correct in all material
respects; all Returns filed by the Company complied in all material respects
with the tax laws, rules and regulations, as presently interpreted, applicable
to such Returns; the Company has not waived or extended any statute of
limitations relating to the assessment of any federal, state, county, local or
foreign income, franchise or other taxes ("Taxes"); and no audit or examination
of any of the Returns of the Company or any Subsidiary is currently in progress
or threatened or has occurred in the past. All Taxes required to be paid
pursuant to such Returns have been paid on or before their respective due dates.
2.5 Litigation and Claims.
(a) Litigation Pending or Threatened. Except as described in the Plan,
there is no action, suit, arbitration proceeding, including any grievance
proceeding, or investigation pending or, to the knowledge of the Company,
threatened, before any court, tribunal, panel, master or governmental agency,
authority or body, arbitrator or by any third party in which the Company is a
party or to which its business or properties are subject that may result in cost
or liability to the Company. None of the directors and officers of the Company
has any reason to believe that any such action, suit, proceeding, hearing, or
investigation may be brought or threatened against the Company.
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(b) Violation of Law. Except as set forth in Schedule 2.5(b), the
Company is not in violation of any provision of any law, decree, order or
regulation applicable to the Company or its business or properties. The Company
is not a party to any consent decree issued by any governmental agency,
authority or body.
2.6 Properties and Assets.
(a) The Company does not own, lease or sublease any real property.
(b) Environmental, Health, and Safety Matters.
(i) The Company has complied and is in compliance with all
Environmental, Health, and Safety Requirements. "Environmental, Health,
and Safety Laws" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), the Resource
Conservation and Recovery Act of 1976, and the Occupational Safety and
Health Act of 1970, each as amended, together with all other laws
(including rules, regulations, codes, plans, injunctions, judgments,
orders, decrees, rulings, and charges thereunder) of federal, state,
local, and foreign governments (and all agencies thereof) concerning
pollution or protection of the environment, public health and safety,
or employee health and safety, including laws relating to emissions,
discharges, releases, or threatened releases of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or
wastes into ambient air, surface water, ground water, or lands or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or
wastes.
(ii) Without limiting the generality of the foregoing, the
Company has obtained and complied with, and is in compliance with, all
permits, licenses, certificates and other authorizations that are
required pursuant to Environmental, Health, and Safety Requirements for
the occupation of its facilities and the operation of its business; a
list of all such permits, licenses, certificates and other
authorizations will have been provided to the Acquiror prior to the
Closing.
(iii) The Company has not received any written or oral notice,
report or other information regarding any actual or alleged violation
of Environmental, Health, and Safety Requirements, or any liabilities
or potential liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise), including any investigatory, remedial or
corrective obligations, relating to any of them or its facilities
arising under Environmental, Health, and Safety Requirements.
(iv) Except as described in Schedule 2.6(b)(iv), none of the
following exists at any property or facility previously owned or
operated by the Company or any Subsidiary: (1) underground storage
tanks, (2) asbestos-containing material in any form or condition, (3)
materials or equipment containing polychlorinated biphenyls, or (4)
landfills, surface impoundments, or disposal areas. All documentation
regarding any matter described in Schedule 2.6(b)(iv) has been
delivered to Acquiror. "Subsidiary" means, with the sole exception of
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Acquisition Sub, any corporation, a majority of the outstanding voting
securities of which are owned directly or indirectly by the Company, or
any partnership, joint venture or other enterprise in which the Company
has, directly or indirectly, any equity interest.
(v) The Company has not treated, stored, disposed of, arranged
for or permitted the disposal of, transported, handled, or released any
substance, including without limitation any hazardous substance, or
owned or operated any property or facility (and no such property or
facility is contaminated by any such substance) in a manner that has
given or would give rise to liabilities, including any liability for
response costs, corrective action costs, personal injury, property
damage, natural resources damages or attorney fees, pursuant to CERCLA,
the Solid Waste Disposal Act, as amended, or any other Environmental,
Health, and Safety Requirements.
(vi) Neither this Agreement nor the consummation of the
transaction that is the subject of this Agreement will result in any
obligations for site investigation or cleanup, or notification to or
consent of government agencies or third parties, pursuant to any of the
so-called "transaction-triggered" or "responsible property transfer"
Environmental, Health, and Safety Requirements.
(vii) The Company has not, either expressly or by operation of
law, assumed or undertaken any liability, including without limitation
any obligation for corrective or remedial action, of any other person
or entity relating to Environmental, Health, and Safety Requirements.
(viii) No facts, events or conditions relating to any past or
present facilities, properties or operations of the Company, or any of
its respective predecessors or Affiliates (as defined under the
Securities Act of 1933, as amended) will prevent, hinder or limit
continued compliance with Environmental, Health, and Safety
Requirements, give rise to any investigatory, remedial or corrective
obligations pursuant to Environmental, Health, and Safety Requirements,
or give rise to any other liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise) pursuant to Environmental,
Health, and Safety Requirements, including without limitation any
relating to onsite or offsite releases or threatened releases of
hazardous materials, substances or wastes, personal injury, property
damage or natural resources damage.
(ix) Schedule 2.6(b)(ix) (a) lists the location, by mailing
address, of all real property owned or leased at any time by the
Company or the respective predecessors or Affiliates of the Company or
its Subsidiaries and (b) describes briefly, for each location, all
operations ever undertaken there by the Company, its Subsidiaries, or
the respective predecessors or Affiliates of the Company or its
Subsidiaries, and indicates the duration of each such operation.
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(c) Personal Property.
(i) The Company does not own any buildings, machinery,
equipment, or other tangible personal property, whether owned or
subject to any (i) lease or sublease, (ii) license, (iii) rental
agreement, (iv) contract of sale or (v) other agreement to which the
Company is a party which will not be disposed of or discharged upon
Confirmation of the Plan.
(ii) The Company does not own or have any right to use any
patent, trademark, trade name or copyright, nor is the Company party to
any license, agreement or other permission granted to or from any third
party with respect to any of the foregoing which will not be disposed
of or discharged upon Confirmation of the Plan.
2.7 Contracts. Except as described in Schedule 2.7, the Company is not
party to any contract, agreement, commitment, note, evidence of indebtedness,
mortgage, security agreement or other agreement or instrument, whether or not
entered into in the ordinary course of business, that will not be discharged
pursuant to the Plan. The Company has delivered to Acquiror a complete and
correct copy of each written agreement listed in Schedule 2.7 (as amended to
date) and a written summary setting forth the terms and conditions of each oral
agreement referred to in Schedule 2.7.
2.8 Powers of Attorney. There are no outstanding powers of attorney
executed on behalf of the Company.
2.9 Insurance. Neither the Company nor any Subsidiary has any liability
or obligation of any nature, whether direct, indirect, absolute, accrued,
contingent or otherwise, and whether due or to become due, including, without
limitation, any liability for taxes and interest, penalties and other charges
payable with respect to any such liability or obligation (a "Liability"), and
there is no basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against any of them giving
rise to any Liability arising out of any obligation of the Company or any
Subsidiary for contribution, reimbursement or subrogation relating to any
insurance policy (including policies providing property, casualty, liability and
workers' compensation coverage and bond and surety arrangements) to which the
Company has been a party, named insured, or otherwise the beneficiary of
coverage.
2.10 Product Liability. The Company has no Liability, and there is no
basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against any of them giving
rise to any Liability arising out of any injury to individuals or property as a
result of the ownership, possession, or use of any product manufactured, sold,
leased, or delivered by the Company or any Subsidiary.
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2.11 Employees.
(a) There are no accrued obligations of the Company (whether arising by
operation of law, by contract or past custom) for payments by the Company, to
trusts or other funds or to any governmental agency with respect to unemployment
compensation benefits, social security benefits or any other benefits for
present or former employees of the Company which will not be discharged upon
Confirmation of the Plan.
(b) All employment contracts and other obligations of the Company
(whether arising by operation of law by contract, by past custom or otherwise)
for salaries, vacation and holiday pay, sick pay, bonuses and other forms of
compensation payable to the officers, directors or other employees of the
Company or any Subsidiary in respect of the services rendered by any of them
have been paid or discharged pursuant to the Plan.
2.12 Employee Benefit Plans. The Company does not maintain or
contribute to (nor does it have any obligation or liability which will not have
been paid or discharged pursuant to the Plan under) any plan, program, policy or
arrangement relating to any employee, director or officer of the Company (or any
individual who has performed services for or on behalf of the Company),
including, but not limited to, any "Employee Benefit Plan" nor does the Company
maintain or contribute to any retirement, termination, severance, benefit or
other similar plans or agreements for employees and former employees of the
Company. "Employee Benefit Plan" means: (i) any "employee pension benefit plan"
(as defined in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")), including, but not limited to, a "multiemployer
plan" as defined in Sections 3(37) and 4001(a)(3) of ERISA; (ii) any "employee
welfare benefit plan" (as defined in Section 3(1) of ERISA); (iii) any other
written or oral plan, agreement or arrangement involving direct or indirect
compensation, including without limitation, insurance coverage, severance
benefits, disability benefits, deferred compensation, bonuses, stock options,
stock purchase, phantom stock, stock appreciation, or other forms of incentive
compensation or post-retirement compensation by the Company (or any entity
treated as a single employer with the Company under sections 414(b), (c), (m)
and (o) of the Code (collectively these entities are "ERISA Affiliates"); (iv)
each agreement with any employee or director of any Company or ERISA Affiliate
(A) the benefits of which are contingent, or the terms of which are altered,
upon the occurrence of a transaction involving any such Company or ERISA
Affiliate, (B) providing any term of employment or compensation guarantee or (C)
providing severance benefits or other benefits after the termination of
employment of such employee or director; (v) each agreement, plan or arrangement
under which any person may receive payments from any Company or ERISA Affiliate
that may be subject to a Liability under Section 4999 of the Code or included in
the determination of such person's parachute payment under Section 280G of the
Code; and (vi) each other agreement, plan or arrangement, including without
limitation any stock option plan, stock appreciation right plan, restricted
stock plan, stock purchase plan and severance benefit plan.
2.13 Indebtedness to and from Officers, Directors, Stockholders and
Employees. The Company does not have any financial obligation, and is not
otherwise indebted, to any person who is an officer, director, stockholder or
employee of the Company, or to any spouse, child or relative of any such person
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or to any entity controlled directly or indirectly by such person, in any amount
whatsoever which will not be paid or discharged upon Confirmation of the Plan.
2.14 Agreement Not in Breach of Certain Instruments. Neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will violate or conflict with any provision of
the Certificate of Incorporation or Bylaws of the Company or result in a breach
of any of the terms and provisions of, or constitute a violation or default (or
an event that with notice or lapse of time, or both, would constitute a default)
under, or conflict with, (a) any contract, agreement, instrument or permit to
which the Company is or may be bound, (b) any judgment, decree, order or award
of any court, governmental body or arbitrator to which the Company is a party,
or (c) any law, rule or regulation applicable to the Company.
2.15 Regulatory Approvals. Except as set forth in Schedule 2.15, and
other than the filing of any confirmation of the Plan, and except as have been
obtained, no consent, declaration, filing or approval or authorization of, or
registration with, any federal, state, municipal or local governmental or
regulatory authority or any other person is required in connection with the
execution and delivery of this Agreement by the Company or the consummation of
the transactions contemplated hereby by the Company.
2.16 No Undisclosed Liabilities. Except as and to the extent disclosed
in the schedules to the Plan, the Company does not have any Liability.
2.17 Disclosure. Except as contemplated by or disclosed in this
Agreement and in the Schedules hereto, there is no fact or circumstance within
the knowledge of the Company that would reasonably result in any material
adverse effect on the Company's or the Surviving Corporation's business,
operations, properties, assets, condition or results of operations, financial or
otherwise, taken as a whole. None of the statements or information contained in
any of the representations, warranties or covenants of the Company set forth in
this Agreement (including the Schedules and other certificates, agreements or
other documents to be furnished hereunder) or in any other document or written
statement furnished to the Acquiror by the Company contains or will contain any
misstatement of a material fact or omission to state a material fact necessary
to make the statements contained herein or therein not misleading.
2.18 Brokerage. Except as set forth in Schedule 2.18, the Company has
not dealt with any finder, broker, investment banker or financial advisor in
connection with any of the transactions contemplated by this Agreement or the
negotiations looking toward the consummation of such transactions. The Company
is not indebted to any party listed in Schedule 2.18.
2.19 Authorization of Agreement.
(a) The Company and the Agent each have full power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized by the board of directors of each of the Company and the
Agent, and no other proceedings on the part of either of the Company or the
Agent are necessary.
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(b) This Agreement and all other agreements herein contemplated to be
executed in connection herewith by the Company have been duly executed and
delivered by or for the benefit of the Company, and constitute binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms. The Company is not, and immediately prior to the Closing
Date, the Company will not be, a party to, subject to or bound by any provision
of the Certificate of Incorporation or Bylaws of the Company, or any agreement
or judgment, order, writ, prohibition, injunction or decree of any court or
other governmental body that would prevent the execution and delivery of, or the
consummation of the transactions contemplated by, this Agreement.
2.20 SEC Reports. The Company Common Stock is registered under Section
12(b) or (g) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and, except as described in Schedule 2.20, the Company is in compliance
with its reporting and filing obligations under the Exchange Act. The Company
has made available to the Acquiror (a) its annual reports to stockholders and
its Annual Reports on Form 10-K for the last two fiscal years such documents are
available and (b) all of its Quarterly Reports on Form 10-Q and each other
report, registration statement or definitive proxy statement filed with the
Securities and Exchange Commission (the "SEC") for the last two fiscal years
such documents were filed with the SEC (collectively, the "SEC Reports"). The
SEC Reports do not (as of their respective dates) contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
3. Representations and Warranties of Acquiror. Acquiror represents and
warrants to the Company as follows:
3.1 Organization; Liability. Acquiror is duly organized and validly
existing as a corporation in good standing under the laws of the State of
Delaware, with the corporate power to own, lease and operate its properties and
assets and to carry on its businesses in the manner in which such businesses are
now being conducted.
3.2 Authority. Acquiror has the requisite corporate power, and prior to
the Closing Date will have taken all corporate action necessary, to execute,
deliver and perform this Agreement. This Agreement and all other agreements
herein contemplated to be executed by Acquiror have been duly executed and
delivered by Acquiror and have been authorized by all necessary corporate action
on the part of Acquiror and constitute (or upon execution will constitute)
legal, valid and binding obligations of Acquiror enforceable against Acquiror in
accordance with their respective terms.
3.3 Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(a) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Acquiror is subject or any provision of
its partnership agreement or, (b) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which Acquiror is a party or by which it is bound or to which any of its
assets is subject.
11
3.4 Financial Ability. Acquiror has the financial ability to perform
its obligations under this Agreement.
4. Conditions to Obligations of the Company. The obligations of the
Company to consummate the transactions contemplated hereby and to make the
deliveries contemplated at the Closing shall, in addition to the conditions set
forth elsewhere herein, be subject to satisfactory completion on or prior to the
Closing Date of each of the following conditions, any of which may be waived by
the Company.
4.1 Correctness of Representations and Warranties. Each of the
representations and warranties of Acquiror contained in this Agreement shall
have been true and correct on the date hereof and shall be true and correct on
the Closing Date with the same effect as if made on the Closing Date.
4.2 Performance of Covenants and Agreements. All of the covenants and
agreements of Acquiror contained in this Agreement and required to be performed
by Acquiror before the Closing Date shall have been performed in all respects,
and Acquiror shall each have executed and delivered to the Company at Closing a
certificate to that effect.
5. Pre-Closing Covenants. The Parties agree as follows with respect to
the period between the execution of this Agreement and the Closing.
5.1 General. Each of the Parties will use its commercially reasonable
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 in Section 4 and Section 6).
5.2 Full Access. The Company and the Agent shall permit representatives
of Acquiror to have full access to all premises, properties, personnel, books,
records (including Tax records), contracts, and documents of or pertaining to
the Company.
5.3 Notice of Developments. The Company and the Agent will give prompt
written notice to Acquiror of any material adverse development causing a breach
of any of the representations and warranties of the Company herein. Acquiror
will give prompt written notice to Company and the Agent of any material adverse
development causing a breach of any of its own representations and warranties.
No disclosure by any Party pursuant to this Section, however, shall be deemed to
amend or supplement any Schedule or to prevent or cure any misrepresentation,
breach of warranty, or breach of covenant.
5.4 Notice to Creditors. The Company shall have provided notice of the
bankruptcy proceedings and Plan to all known creditors, including, without
limitation, all taxing authorities and all Parties with contingent claims
against or interests in the Company and shall have provided Acquiror with
evidence of such notice.
5.5 Notice of Taxes. The Company shall immediately give Acquiror
written notice if an audit is commenced by any taxing authority, a Tax or
adjustment is asserted by any taxing authority, or an error is discovered
12
relating to any Return that was or should have been filed by the Company or any
of its Subsidiaries for which the statute of limitations is not closed or if the
representations and warranties contained in Section 2 are no longer true and
correct.
5.6 No Legal Bar.
(a) There shall not have been instituted or threatened any legal
proceeding seeking to prohibit the consummation of the transactions contemplated
by this Agreement or to obtain substantial damages with respect thereto.
(b) None of the parties hereto shall be prohibited by any law, order,
writ, injunction or decree of any governmental body of competent jurisdiction
from consummating the transactions contemplated by this Agreement, and no action
or proceeding shall then be pending that questions the validity of this
Agreement, any of the transactions contemplated hereby or any action that has
been taken by any of the parties or any corporate entity, in connection
herewith, or in connection with any of the transactions contemplated hereby.
(c) The Confirmation Order shall have become a Final Order.
6. Conditions to Obligations of Acquiror. The obligations of Acquiror
to consummate the transactions contemplated hereby and to make the deliveries
contemplated at the Closing shall, in addition to conditions set forth elsewhere
herein, be subject to the satisfactory completion on or prior to the Closing
Date of each of the following conditions, any of which may be waived by the
Acquiror:
6.1 Correctness of Representations and Warranties. Each of the
representations and warranties of the Company contained in this Agreement shall
have been true and correct on the date hereof and shall be true and correct in
all respects on the Closing Date with the same effect as if made on the Closing
Date, and the Company and the Agent shall have executed and delivered to the
Acquiror at Closing a certificate of an officer of the Company and a certificate
signed by the Agent to that effect.
6.2 Performance of Covenants and Agreements. All of the covenants and
agreements of the Company contained in this Agreement and required to be
performed on or before the Closing Date shall have been performed in all
respects, and the Company and the Agent shall have delivered to Acquiror at
Closing a certificate of the Company and the Agent, as the case may be, to that
effect.
6.3 Opinion of Counsel for the Company. Acquiror shall have received an
opinion of counsel from Xxxxxxxx & Thames, P.A., counsel for the Company in form
and substance reasonably satisfactory to Acquiror and dated the Closing Date. In
rendering such opinion, counsel may rely upon certificates of public officials
and upon certificates of officers of the Company as to factual matters.
6.4 Additional Closing Documents. The Company and the Agent shall have
delivered to Acquiror at or prior to the Closing Date such additional documents
as the Acquiror and its counsel may reasonably request in order to enable
Acquiror to determine whether the conditions to its obligations under this
Agreement have been met and otherwise to carry out the provisions of this
Agreement.
13
6.5 No Legal Bar.
(a) There shall not have been instituted or threatened any legal
proceeding seeking to prohibit the consummation of the transactions contemplated
by this Agreement or to obtain substantial damages with respect thereto.
(b) None of the parties hereto shall be prohibited by any law, order,
writ, injunction or decree of any governmental body of competent jurisdiction
from consummating the transactions contemplated by this Agreement and no action
or proceeding shall then be pending that questions the validity of this
Agreement, any of the transactions contemplated hereby or any action that has
been taken by any of the parties in connection herewith or in connection with
any of the transactions contemplated hereby.
(c) The Confirmation Order shall have become a Final Order.
6.6 Liabilities. All liabilities and indebtedness of the Company shall
have been discharged by the Bankruptcy Court as against the Company or any
Subsidiaries including, but not limited to, any penalties, fines, claims, or
liabilities of any kind assertable or asserted against the Company as a direct
or indirect result of either:
(a) any operations by or business conducted by the Company or any
Subsidiaries, or any interest of the Company or any Subsidiaries, directly or
indirectly, in any real property previously owned or operated by the Company or
any Subsidiaries; or
(b) any failure of the Company or any Subsidiaries, before the date of
this Agreement, to obtain or maintain any permit or license necessary under any
environmental law, to make any governmental filing required by any environmental
law (including, without limitation, any filing required by any law concerning
emergency planning), or to comply with any environmental law.
6.7 Assets and Liabilities. Except for Acquisition Sub, all assets and
liabilities of the Company shall have been transferred and assigned to the
Liquidating Trust.
6.8 Contracts. All contracts not specifically disclosed pursuant to
this Agreement and all contracts the Company elects to reject shall be rejected
pursuant to the Plan.
6.9 Stockholders. All claims of stockholders of the Company, including
but not limited to, federal and state securities law violations, if any, will be
discharged.
7. Indemnification.
7.1 Indemnification by the Company. The Company shall indemnify and
hold harmless Acquiror, its officers, directors, employees, attorneys and agents
and controlling persons from any liability, damage, deficiency, loss, penalty,
cost or expense, including attorneys fees and costs of investigating and
defending against lawsuits, complaints, actions or other pending or threatened
litigation (being hereafter referred to in this Section 7 as "Costs"), arising
14
from or attributable to any breach of any representation, warranty or agreement
made by the Company herein or in any certificate delivered in connection with
the transaction contemplated herein.
7.2 Indemnification by the Agent. The Agent shall indemnify and hold
harmless Acquiror, its officers, directors, employees, attorneys and agents and
controlling persons from Costs arising from or attributable to any breach of any
representation, warranty or agreement made by the Agent herein or in any
certificate delivered in connection with the transaction contemplated herein.
7.3 Indemnification by Acquiror. Acquiror shall indemnify and hold
harmless the Company and its officers, directors, employees, agents and
controlling persons from Costs arising from or attributable to any breach of any
representation, warranty or agreement made by Acquiror herein or in any
certificate delivered in connection with the transaction contemplated herein.
7.4 Procedures for Resolution and Payment of Claims for
Indemnification.
(a) If a party entitled to be indemnified under this Section 7 (the
"Indemnitee") shall incur any Costs or determine that it is likely to incur any
Costs, including without limitation claims by third parties, and believes that
it is entitled to be indemnified against such Costs by another party hereunder
(the "Indemnitor"), such Indemnitee shall deliver to the Indemnitor a
certificate (an "Indemnity Certificate") signed by the Indemnitee which
Indemnitee Certificate shall:
(i) state that the Indemnitee has paid or properly accrued
Costs, or anticipates that it will incur liability for Costs for which
such Indemnitee is entitled to indemnification pursuant to this
Agreement; and
(ii) specify in reasonable detail each individual item of Cost
included in the amount so stated, the date such item was paid or
properly accrued, the basis for any anticipated liability and the
nature of the misrepresentation, breach of warranty or breach of
covenant to which each such item is related and the computation of the
amount to which such Indemnitee claims to be entitled hereunder.
(b) In case the Indemnitor shall object to the indemnification of an
Indemnitee in respect of any claim or claims specified in any Indemnity
Certificate, the Indemnitor shall within 30 days after receipt by the Indemnitor
of such Indemnity Certificate deliver to the Indemnitee a written notice to such
effect and the Indemnitor and the Indemnitee shall, within the 30-day period
beginning on the date of receipt by the Indemnitee of such written objection,
attempt in good faith to agree upon the rights of the respective parties with
respect to each of such claims to which the Indemnitor shall have so objected.
If the Indemnitee and the Indemnitor shall succeed in reaching agreement on
their respective rights with respect to any of such claims, the Indemnitee and
the Indemnitor shall promptly prepare and sign a writing setting forth such
agreement.
(c) Claims for Costs specified in any Indemnity Certificate to which an
Indemnitor shall not object in writing, claims for Costs covered by a written
15
agreement of the nature described in Section 7.4(b), claims for Costs the
validity and amount of which have been the subject of arbitration as described
in Section 7.4(b) and claims for Costs the validity and amount of which shall
have been the subject of a final judicial determination are hereinafter referred
to, collectively, as "Agreed Claims."
(d) Promptly after the assertion by any third party of any claim
against any Indemnitee that, in the judgment of such Indemnitee, may result in
the incurrence by such Indemnitee of Costs for which such Indemnitee would be
entitled to indemnification pursuant to this Agreement, such Indemnitee shall
deliver to the Indemnitor a written notice describing in reasonable detail such
claim and such Indemnitor may, at its option, assume the defense of the
Indemnitee against such claim (including the employment of counsel, who shall be
satisfactory to such Indemnitee, and the payment of expenses), which assumption
shall not be deemed an admission of liability for indemnification. Any
Indemnitee shall have the right to employ separate counsel in any such action or
claim and to participate in the defense thereto, but the fees and expenses of
such counsel shall not be at the expense of the Indemnitor unless (i) the
Indemnitor shall have failed, within a reasonable time after having been
notified by the Indemnitee of the existence of such claim as provided in the
preceding sentence, to assume the defense of such claim, (ii) the employment of
such counsel has been specifically authorized by the Indemnitor, or (iii) the
named parties to any such action (including any impleaded parties) include both
such Indemnitee and the Indemnitor and such Indemnitee shall have been advised
in writing by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to
Indemnitor. No Indemnitor shall be liable to indemnify any Indemnitee for any
settlement of any such action or claim effected without the consent of the
Indemnitor but if settled with the written consent of the Indemnitor, or if
there be a final judgment for the plaintiff in any such action, the Indemnitor
shall jointly and severally indemnify and hold harmless each Indemnitee from and
against any loss or liability by reason of such settlement or judgment. If an
Indemnitor assumes the defense of an Indemnitee against a claim asserted
hereunder, the Indemnitee shall give the Indemnitor access to the Company's
books and records as necessary to conduct such defense and cooperate in such
defense.
8. Termination.
8.1 This Agreement shall terminate at any time prior to the
Closing as follows:
(a) By the mutual written consent of the Company and
Acquiror; or
(b) By Acquiror, upon written notice to the Company
or the Agent that any of the conditions to the obligations of
Acquiror in Section 6 have not been fulfilled or waived on or
prior to the Closing or the Company or the Agent shall have
failed to comply with any term or condition of this Agreement.
8.2 If this Agreement is terminated by Acquiror pursuant to
Section 8.1, the Company and the Agent, but only to the extent the
Agent is able, shall cause the reimbursement to Acquiror, and Acquiror
shall be entitled to receive, any funds paid by Acquiror pursuant to
Section 1.2(a).
16
9. Miscellaneous Provisions.
9.1 Construction.
(a) THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
(b) EXCEPT AS EXPRESSLY PROVIDED IN THE PLAN, THIS AGREEMENT
SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN DALLAS
COUNTY, TEXAS. EXCEPT AS EXPRESSLY PROVIDED IN THE PLAN, ANY ACTION OR
PROCEEDING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER INSTRUMENT OR
AGREEMENT EVIDENCING OR RELATING TO THE RIGHTS OR OBLIGATIONS OR ANY
PARTY THEREOF MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT IN DALLAS
COUNTY, TEXAS. THE PARTIES AGREE THAT SERVICE OF PROCESS UPON THEM MAY
BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT
THEIR ADDRESSES SPECIFIED OR DETERMINED IN ACCORDANCE WITH THE
PROVISIONS OF THIS AGREEMENT. NOTHING IN THIS AGREEMENT OR ANY OTHER
INSTRUMENT OR AGREEMENT EVIDENCING OR RELATING TO THE OBLIGATIONS OR
ANY PARTY THEREOF SHALL AFFECT THE RIGHT OF ACQUIROR TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF
ACQUIROR TO BRING ANY ACTION OR PROCEEDING IN COURTS IN OTHER
JURISDICTIONS. ANY ACTION OR PROCEEDING BY THE COMPANY OR THE AGENT
AGAINST ACQUIROR SHALL BE BROUGHT ONLY IN A COURT LOCATED IN DALLAS,
TEXAS.
9.2 Notices. All notices and other communications called for
or contemplated hereunder shall be in writing and shall be deemed to
have been duly given when delivered to the party to whom addressed or
when sent by telecopy, telegram, telex or wire (if promptly confirmed
by registered or certified mail, return receipt requested, prepaid and
addressed) to the parties, their successors in interest, or their
assignees at the following addresses, or at such other addresses as the
parties may designate by written notice in the manner aforesaid:
If to Acquiror: Xxxx Xxxxx
Nineteenth Investment Corporation
0000 Xxxxx Xxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
With a copy to: Xxxxxx X. Xxxxxxxx, Esq.
Jenkens & Xxxxxxxxx, a
Professional Corporation
0000 Xxxx Xxxxxx Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
17
If to the Company: Cardiac Control Systems, Inc.
c/o W. Xxxx Xxxxxx
Cardiac Control Systems, Inc.
00 Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
With a copies to: Xx. Xxxxxxx X. Xxxxxxx
Xxxxxxx Xxxxxxx & Associates, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
[Facsimile:____________]
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxxxx & Thames, P.A.
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
If to the Agent: Xxxxxx X. Xxxxxx, President
Kersey, Scillia, Xxxxxxx & Xxxxxx, Inc.
000 X. Xxx Xxxxx Xx. Xxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
9.3 Assignment. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof nor any of the
documents executed in connection herewith may be assigned by any party without
the consent of the other parties. Nothing contained herein, express or implied,
is intended to confer upon any person or entity other than the parties hereto
and their successors in interest and permitted assignees any rights or remedies
under or by reason of this Agreement unless so stated herein to the contrary.
9.4 Amendments and Waivers. No breach of any covenant, agreement,
warranty or representation shall be deemed waived unless expressly waived in
writing by the party who is entitled to assert such breach. No waiver of any
right hereunder shall operate as a waiver of any other right or of the same or a
similar right on another occasion. This Agreement and the Schedules hereto may
be modified only by a written instrument duly executed by the parties hereto.
9.5 Attorneys' Fees. In the event that any action or proceeding,
including arbitration, is commenced by any party hereto for the purpose of
enforcing any provision of this Agreement, the parties to such action,
proceeding or arbitration may receive as part of any award, judgment, decision
or other resolution of such action, proceeding or arbitration their costs and
reasonable attorneys' fees as determined by the person or body making such
award, judgment, decision or resolution. Should any claim hereunder be settled
short of the commencement of any such action or proceeding, including
arbitration, the parties in such settlement shall be entitled to include as part
of the damages alleged to have been incurred reasonable costs of attorneys or
other professionals in investigation or counseling on such claim.
18
9.6 Binding Nature of Agreement. The Agreement includes each of the
Schedules and Exhibits that are referred to herein or attached hereto, all of
which are incorporated by reference herein. All the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective executors, heirs, legal representatives, successors and
assigns.
9.7 Expenses. The costs and expenses and the professional fees and
disbursements incurred by the Company in connection herewith shall be borne by
the Company. The costs and expenses of Acquiror, shall be borne by Acquiror.
9.8 Entire Agreement. This Agreement contains the entire understanding
of the parties with respect to the subject matter hereof, and supersedes all
prior agreements and understandings relating to the subject matter hereof.
9.9 Severability. Any provision of this Agreement that is invalid,
illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions hereof in such
jurisdiction or rendering that or any other provision of this Agreement invalid,
illegal or unenforceable in any other jurisdiction.
9.10 Counterparts; Section Headings. This Agreement may be executed by
the parties in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument. The headings of each section,
subsection or other subdivision of this Agreement are for reference only and
shall not limit or control the meaning thereof.
9.11 Public Announcements. Acquiror and the Company will consult with
each other before the issuance of any press release or otherwise making any
public statements with respect to this Agreement and no press release or public
statement shall be made by any party hereto prior to an agreement among the
Company and Acquiror as to the content of any such release, except as may be
required by law.
9.12 No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person or entity other than the Parties and their
respective successors and permitted assigns.
[Signature page follows.]
19
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the date first written above.
REMODELERS HOLDINGS, INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
CARDIAC CONTROL SYSTEMS, INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
NINETEENTH ACQUISITION SUB, INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
KERSEY, SCILLIA, XXXXXXX & XXXXXX, INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
20
EXHIBIT A
EXHIBIT B
