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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is entered into as
of the 9th day of March, 2000, by and among HouseHold Xxxxxx.xxx, Inc., a
Delaware corporation ("HHD") and Cross Check Corp., a Colorado corporation
("Cross")
WHEREAS, HHD is authorized to issue up to 50,000,000 shares of common
stock, $.001 par value ("HHD Common Stock"); and
WHEREAS Cross is authorized to issue up to 50,000,000 shares of common
stock, $.001 par value ("Cross Stock"); of which 3,360 shares are issued and
outstanding; and
WHEREAS the respective Boards of Directors of HHD and Cross believe it
to be in the best interests of their respective corporations and shareholders
for Cross to merge with and into HHD (Cross and HHD sometimes referred to as the
"Constituent Corporations") upon the terms and conditions herein contained; and
in connection therewith have each adopted, approved and authorized the execution
and delivery of this Agreement and Plan of Merger (the "Agreement"); and
WHEREAS, the Board of Directors of Cross has submitted this Agreement
and the subject merger to its shareholders for approval as required by the
corporate law of the State of Colorado.
NOW THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements herein contained, the
parties hereto do hereby agree as follows:
I. MERGER
1.01 EFFECTIVE TIME. The merger contemplated by this Agreement shall be
effective on the date and time that the Certificate of Merger is filed with the
Secretary of State of the State of Delaware (the "Effective Time").
1.02 MERGER. Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with the General Corporation Law of the State
of Delaware (the "GCL"), Cross shall be merged with and into HHD at the
Effective Time (the "Merger").
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As of the Effective Time, the separate corporate existence of Cross shall cease
and HHD shall continue as the surviving corporation (the "Surviving
Corporation") and shall succeed to and assume all the rights and obligations of
Cross in accordance with the GCL. Without limiting the generality of the
foregoing:
(a) HHD, as the surviving corporation shall continue its corporate
existence under the laws of the State of Delaware and shall possess all of the
rights, privileges, immunities, powers, franchises and authority (both public
and private) of, and be subject to all of the restrictions, disabilities and
duties of, HHD and Cross;
(b) all of the assets and property of Cross of every kind, nature and
description (real, personal and mixed and both tangible and intangible) and
every interest therein, wheresoever located, including without limitation all
debts or other obligations belonging or due to Cross, all stock subscriptions,
claims and chooses in action shall be and be deemed to be vested, absolutely and
unconditionally in HHD (to the same extent, degree and manner as previously
vested in Cross);
(c) all debts and obligations of Cross, all rights of creditors of
Cross and all liens encumbering any of the property of Cross vested in HHD
shall remain in full force and effect without modification or impairment and
shall be and be deemed to be enforceable against HHD and its assets and
properties with the same full force and effect as if such debts, obligations or
liens had been originally incurred or created by HHD in its own name and for
its own behalf.
1.03 CLOSING. Subject to the satisfaction or waiver of the last of the
conditions set forth in Article VI hereof, the closing of the Merger will take
place at 10:00 am on March ____, 1999, at the offices of HHD at 000 Xxxx Xxxxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxxxxx or at such other time and place as the parties to
this Agreement shall agree (the "Closing Date"). Subject to the terms and
conditions of this Agreement, on the Closing Date: (a) the parties hereto shall
each deliver to the other the documents, agreements, payments and consideration
required to be delivered by each to the other party hereto as herein expressly
provided and (b) the Constituent Corporations shall execute two originals of a
Certificate of Merger in the forms required for filing with the Secretary's of
State of Delaware and Colorado, which Certificates of Merger shall be filed by
the parties with the Secretary's of State of Delaware and Colorado immediately
after execution on the Closing Date. Subsequent to the Closing the parties
hereto shall thereafter execute, acknowledge, deliver and/or record such other
and further instruments, documents or certificates and/or take an perform such
other and further actions as may be required to effect and/or implement the
merger.
1.04 NAME. The name of the Surviving Corporation shall be "HouseHold
Xxxxxx.xxx, Inc."
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1.05 CONSTITUTIONAL DOCUMENTS, DIRECTORS AND OFFICERS. On and as of the
Effective Time:
(a) The Certificate of Incorporation of HHD on such date in
full force and effect shall be the Certificate of Incorporation of HHD, as the
surviving corporation, until the same shall be altered, amended, modified,
terminated or rescinded in the manner provided by the GCL; which rights of
alteration, amendment, modification, termination and/or rescission are hereby
expressly reserved by HHD;
(b) The By-Laws of HHD on such date in full force and effect,
shall be the By-Laws of HHD, as the surviving corporation, until the same shall
be altered, amended, modified, terminated or rescinded in the manner provided in
the Certificate of Incorporation and/or the GCL; which rights of alteration,
amendment, modification, termination and/or rescission are hereby expressly
reserved by HHD;
(c) The members of the Board of Directors, and the officers of
HHD, the Surviving Corporation, shall consist of the directors and officers of
HHD immediately prior to the Effective Time; each to serve in such capacity
until the earlier of their resignation or removal or until their successors are
duly elected and qualified.
1.06 PRINCIPAL OFFICE. The principal office of the Surviving
Corporation shall be the principal office of HHD as of the Effective Time,
which is 000 Xxxx Xxxxxx Xxxxx, Xxxxxxxxx, Xx.
II. EFFECT OF MERGER ON CAPITAL STOCK OF CONSTITUENT CORPORATIONS
- EXCHANGE OF CERTIFICATES
2.01 CONVERSION OF CAPITAL STOCK OF CROSS. As of the Effective Time,
the shares of Cross Stock shall be converted and exchanged into shares of HHD
Common Stock and cash consideration in the following manner:
(a) Each issued and outstanding share of Cross Stock shall, by
virtue of the merger and without any action on the part of the holder thereof,
be converted and exchanged into 30.30 fully paid and nonassessable share of HHD
Common Stock;
(b) After the Effective Time, each holder, other than a
Dissenting Shareholder, of an outstanding certificate which prior to the
Effective Time represented shares of Cross Stock shall surrender such
certificate ("Old Certificate") to HHD, and such holder shall be entitled upon
such surrender to receive in exchange therefor a certificate for that number of
shares of HHD Common Stock which such holder is entitled to receive under
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Section 2.01(a)(i) of this Agreement. Until surrendered as contemplated by
this sub-section, each Old Certificate for shares of Cross Stock shall be deemed
at all times after the Effective Time to represent and evidence (for all
corporate purposes) that number of shares of HHD Common Stock into which the
shares of Cross Stock theretofore represented by such Old Certificate shall have
been converted pursuant to Section 2.01(a)(i) hereof. From and after the
Effective Time the sole rights of the holders of Old Certificates representing
shares of Cross Stock shall be those to which they are entitled as owners of
HHD Common Stock into which the shares of Cross Stock evidenced by such Old
Certificates have been converted as herein provided;
(c) Upon the issuance of the HHD Common Stock to the
shareholders of Cross as herein provided in exchange for their shares of Cross
Stock, there shall be credited to the capital accounts of HHD an amount equal
to the fair market value of the shares of HHD Common Stock so issued; and
of the amount so credited, the portion thereof in excess of the aggregate par
value thereof shall be credited to the capital surplus account.
(d) Notwithstanding anything in this Agreement to the
contrary, any issued and outstanding shares of Cross Stock held by a person who
complies with all of the provisions of Colorado law concerning the rights of
holders of Cross Stock to object to the Merger and require appraisal of their
shares ("Dissenting Shares" and "Dissenting Shareholders", as the case may be)
shall not be converted as described in Section 2.01(a) but shall, instead
entitle the holder thereof to receive such consideration as may be determined to
be due to such Dissenting Shareholder pursuant to Colorado law. If, after the
Effective Time, such Dissenting Shareholder withdraws his demand for appraisal
or fails to perfect or otherwise loses his right of appraisal pursuant to
Colorado law, each of his shares shall be deemed to be converted as of the
Effective time into the HHD Common Stock specified in Section 2.01(a).
III. REPRESENTATIONS AND WARRANTIES OF HHD
In order to induce Cross to execute and perform this Agreement, HHD
does hereby represent, warrant, covenant and agree (which representations,
warranties, covenants and agreements shall be and be deemed to be continuing and
survive the execution and delivery of this Agreement, the Closing and the
Effective Time) as follows:
3.01 ORGANIZATION AND QUALIFICATION
(a) HHD is a corporation duly organized, validly existing, and
in good standing under the laws of Delaware, with all requisite power and
authority to own, lease, license, and use its properties and assets and to carry
on the business in which it is now
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engaged. HHD is duly qualified to transact the business in which it is engaged
and is in good standing as a foreign corporation in every jurisdiction in which
its ownership, leasing, licensing, or use of property or assets or the conduct
of its business makes such qualification necessary.
(b) HHD has furnished to Cross its Certificate of
Incorporation and By-Laws, as presently in effect, certified by the Secretary of
the corporation. HHD is not in material violation or breach of, or in default
with respect to, any term of its Certificate of Incorporation or By-Laws.
3.02 CAPITALIZATION The authorized capital stock of HHD consists of
50,000,000 shares of HHD Common Stock of which 21,774,303 shares were issued
and outstanding as of January 11, 2000.
3.03 AUTHORITY HHD has all requisite power and authority to execute,
deliver, and perform this Agreement. All necessary corporate proceedings of
HHD have been or as of the Effective Time will have been duly taken to
authorize the execution, delivery, and performance of this Agreement by HHD.
This Agreement has been duly authorized, executed, and delivered by HHD,
constitutes the legal, valid, and binding obligation of, HHD, and is
enforceable as to HHD in accordance with its terms subject, as to
enforcement of remedies, to applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the rights of creditors generally and the
discretion of courts in granting equitable remedies. Except for the provisions
of the GCL governing the filing of the Certificate of Merger, no consent,
authorization, approval, order, license, certificate, or permit of or from, or
declaration or filing with, any federal, stare, local, or other governmental
authority or any court or other tribunal is required by HHD for the execution,
delivery, or performance of this Agreement by HHD.
3.04 HHD COMMON STOCK All of the shares of HHD Common Stock to be
issued by HHD pursuant to this Agreement shall be and be deemed to be duly and
validly authorized and, when issued to the shareholders of Cross in exchange for
their Cross Stock, duly and validly issued, fully paid and nonassessable and
free and clear of all federal and state issuance, stock and/or company taxes,
liens, claims, encumbrances and charges.
3.05 CERTIFICATE The representations, warranties, covenants and
agreements of HHD contained in this Agreement, including, without
limitation, those contained in this Article III, are true, accurate and correct
in all respects as of the date hereof and shall be true, accurate and correct
and complete, in all respects, as of the Closing; and at the Closing HHD shall
deliver to Cross a certificate, executed by the chief executive officer of
HHD remaking, on behalf of HHD, each of the representations, warranties,
covenants and agreements of HHD set forth in this Agreement, including without
limitation, those set forth in this Article III hereof.
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IV. REPRESENTATIONS AND WARRANTIES OF CROSS
In order to induce HHD to execute and perform this Agreement, Cross does
hereby represent, warrant, covenant and agree (which representations,
warranties, covenants and agreements shall be and be deemed to be continuing and
survive the execution and delivery of this Agreement, the Closing and the
Effective Time) as follows:
4.01 ORGANIZATION AND GOOD STANDING Cross is a corporation duly organized,
validly existing and in good standing under the laws of the State of Colorado
with full power and authority to own or lease its properties and to carry on its
business as presently being conducted and enter into and perform each of the
transactions, covenants and agreements provided for in this Agreement.
4.02 EXECUTION AND PERFORMANCE AUTHORIZED The execution, delivery and
performance of this Agreement and all other documents and related agreements
contemplated hereunder, have been duly approved by Cross's board of directors
and shareholders; such execution and delivery and the consummation by Cross of
the transactions, covenants and agreements contemplated hereunder have been duly
authorized by the taking of all necessary corporate action; and no further
action is required to be taken by law and/or pursuant to the certificate of
incorporation, by-laws or otherwise of Cross to authorize the execution,
delivery and/or performance of this Agreement, and/or the taking of all action
required to be taken by Cross with respect to this Agreement and the
consummation of the transactions and performance of this Agreement and the other
agreements contemplated hereunder. The Agreement and the other documents
contemplated hereunder, are valid and binding and fully enforceable against
Cross in accordance with their respective terms, subject, as to enforcement of
remedies, to applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the rights of creditors generally and the discretion of
courts in granting equitable remedies. No consent, authorization, approval,
order, license, certificate, or permit of or from, or declaration or filing
with, any federal, state, local, or other governmental authority or any court or
other tribunal is required by Cross for the execution, delivery, or performance
of this Agreement and the other agreements referred to herein.
4.03 ABSENCE OF LITIGATION There is no action, lawsuit, proceeding or
investigation of any kind or nature pending or, to its knowledge, threatened
against Cross before any court, tribunal or administrative agency or board which
it reasonably expects, individually or in the aggregate, to materially and
adversely: (a) affect the solvency of Cross, (b) affect its ability to perform
hereunder, or (c) render any one or more of this Agreement and/or any of the
agreements referred to herein and/or the transactions contemplated hereunder
void or voidable.
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4.04 NO OTHER DEFAULT The execution and delivery of this Agreement and the
other agreements referred to herein, and the consummation of the transactions
contemplated hereunder will not conflict with or violate or require any consent
under and will not result in any breach or termination of certificate of
incorporation or by-laws of Cross, or any other agreement to which Cross is a
party or by which its properties are subject or by which it is bound. Cross is
not in violation of, or in default under, (i) any term or provision of its
constitutional documents; (ii) any material term or provision or any financial
covenant of any indenture, mortgage, contract, commitment or other agreement or
instrument to which it is a party or by which it or any or its properties or
business is or may be bound or affected; or (iii) any existing applicable law,
rule, regulation, judgment, order or decree of any governmental agency or court,
domestic or foreign, having jurisdiction over it or any of its properties or
business. Cross owns, possesses or has obtained all governmental and other
licenses, permits, certifications, registrations, approvals or consents and
other authorizations necessary to own or lease, as the case may be, and to
operate its properties and to conduct its business or operations as presently
conducted and all such governmental and other licenses, permits, certifications,
registrations, approvals, consents and other authorizations are outstanding and
in good standing, and there are no proceedings pending or, to the best of its
knowledge, threatened, or any basis therefor existing, seeking to cancel,
terminate or limit such licenses, permits, certifications, registrations,
approvals or consents or authorizations, or related to the breach or failure to
comply of Cross with any law, rule, regulation, judgment, order or decree;
4.05 PERMITS AND FILINGS Except for the filing of the Certificate of
Merger, there is no requirement applicable to Cross to make any further filing
with, or to obtain any permit, authorization, consent or approval of, any
governmental or other regulatory authority as a condition of the lawful
consummation of the transactions contemplated under this Agreement.
4.06 CORPORATE DOCUMENTS Cross has furnished to HHD true, correct and
complete copies of its certificate of incorporation, by-laws and minute book,
and a certificate of good standing from the State of Colorado dated within
thirty (30) days of the Closing Date. The minute book contains a record, which
is complete and accurate in all material respects, of all meetings and all
corporate actions of the shareholders and Board of Directors of Cross. Cross is
not in material violation or breach of; or in default with respect to, (a) any
term of its constitutional documents or any agreement to which it is a party or
by which its assets are bound, or (b) any law, rule, regulation, judgment, order
or decree of any governmental agency or court having jurisdiction over it or its
assets.
4.07 CAPITALIZATION The authorized capital stock of Cross consists of 5,000
shares of common stock ("Cross Stock") of which 3,360 shares are issued and
outstanding ("Outstanding Cross Stock"). The shares of Outstanding Cross Stock
are duly authorized, validly issued, fully paid, and nonassessable. There are no
commitments, plans, arrangements to issue, options, warrants, security, or
other rights calling for the issuance of, any shares of
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capital stock or other ownership interest in Cross or any security or other
instrument convertible into, exercisable for, or exchangeable for capital stock
of or ownership in Cross.
4.8 FINANCIAL STATEMENTS AND CONDITION
(a) Cross has delivered to HHD a true, correct and complete
copy of its Form 10-SB dated December 15, 1999 ("Registration Statement") filed
pursuant to the Securities Exchange Act of 1934, as amended (the "34 Act") which
contains therein the audited balance sheet, statement of income, statement of
retained earnings, and statement of cash flows of Cross for the fiscal year
ended August 31, 1999 (the "Audited Financial Statements").
(b) At or prior to the Closing, Cross shall have filed its Form
10Q for the period ended November 30, 1999 including unaudited financial
statements ("Interim Statements", the Audited Financial Statements and Interim
Statements collectively the "Financial Statements").
(c) The Financial Statements were prepared in accordance with
generally accepted accounting principles ("GAAP") consistently applied
throughout the period involved, are true, correct and complete in all material
respects, are in accordance with the books and records of Cross and fairly
present (and will fairly present) together with the notes thereto, the financial
position and results of operations of Cross for the periods therein indicated.
(d) Since the dates of the Financial Statements, there have not
been, nor prior to the Closing will there be, any material adverse changes in
the business or condition, financial or otherwise, of Cross.
4.09 TAX AND OTHER LIABILITIES Cross has no liability of any nature,
accrued, absolute or contingent, secured or unsecured including without
limitation liabilities for payroll and other employee taxes, federal, state,
local, or foreign taxes or liabilities to customers or suppliers, other than
liabilities which are reflected on the Financial Statement. Except for the
liabilities included on the Financial Statement, as of the date of such
Financial Statement, Cross had no liabilities, either fixed or contingent, which
would have been required to be recorded under GAAP as of such date, and to the
knowledge of Cross no such liabilities, other than liabilities arising in the
ordinary course of business and/or pursuant to this Agreement have accrued
and/or will accrue between such date and the Effective Time. Cross has filed all
federal, state, municipal and local tax returns (whether relating to income,
sales, franchise, withholding, real or personal property or otherwise) required
to be filed under the laws of the United States and all applicable states, and
has paid in full all taxes which are due pursuant to such returns or claimed to
be due by any taxing authority or otherwise due and owing. No penalties or other
charges are or will become due with respect to the late filing of any such
return. To the best of the knowledge of Cross, after due investigation, each
such tax return
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heretofore filed by Cross correctly and accurately reflects the amount of its
tax liability thereunder. Cross has withheld, collected and paid all other
levies, assessments, license fees and taxes to the extent required and, with
respect to payments, to the extent that the same have become due and payable;
4.10 LITIGATION AND CLAIMS There is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or investigation pending
or, or to the knowledge of Cross threatened, with respect to Cross or any of its
business, properties, or assets.
4.11 PROPERTIES As of the Effective Time, Cross will have good title to all
properties and assets used in its business or owned by it free and clear of all
liens, claims, mortgages, security interests, pledges, charges, and
encumbrances.
4.12 CONTRACTS AND OTHER INSTRUMENTS Cross is not a party to nor it or its
assets bound by any agreement of any kind, nature or description except as set
forth in the Registration Statement. Cross is not in breach or violation of or
default under any contract or instrument to which Cross is a party and/or by
which its assets are bound; and no event has occurred which with the lapse of
time or action by a third party could result in a breach or violation of or
default by Cross under any contract or other instrument to which Cross is a
party of by which it or any of its assets are bound or affected, nor is there
any court or regulatory order pending against or affecting Cross and/or any of
its assets. Cross is not a party to any agreement performable in the future
4.13 EMPLOYEES Cross has no employees and no welfare benefit plans (as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974
("ERISA") or otherwise of any kind, nature or description.
4.14 PRE CLOSING ACTIVITY Cross shall not enter into or consummate any
transactions prior to the Closing other than in the ordinary course of business
and will pay no dividend, or increase the compensation of any officer, director
or employee and will not enter into any transaction or agreement which would
adversely affects its financial condition. Cross shall deliver to HHD at or
prior to the Closing copies of any and all reports relating to the financial
and/or business condition of Cross which are created or published subsequent to
the date hereof together with any reports or communications sent to the
stockholders of Cross subsequent to the date hereof.
4.15 ACCURACY No statement, representation or warranty contained herein, in
any certificate delivered pursuant to this Agreement, the Registration Statement
and/or in any report filed with the Securities Exchange Commission (the
"Commission") contains or will contain any untrue statement of a material fact
or omits to state any material fact necessary to make such statement,
representation or warranty not misleading.
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4.16 FILINGS Cross has delivered (or will deliver, prior to the Closing) to
HHD true, correct and complete copies of the Registration Statement (including
exhibits) together with each of its other reports to shareholders and filings
with the Commission for the year ended December 31,1999 and through the date of
the Closing. Cross has duly and timely filed (and will, prior to the Closing
duly and timely file) all reports required to be filed by it under the
Securities Act of 1933, as amended ("33Act") and the 34 Act (collectively the
"Federal Securities Laws"). None of the foregoing reports nor any reports sent
to the shareholders of Cross contained any untrue statement of material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements in such reports, in light of the circumstances under which
they were made, not misleading.
4.17 BOARD ACTION During the period from the date hereof until the Closing
there shall not be taken an action by the Board of Directors of Cross without
the prior written consent of HHD in each instance.
4.18 PURCHASE FOR INVESTMENT PURPOSES ONLY The shareholders of Cross are
acquiring the HHD Common Stock as a result of the Merger for investment
purposes only and not with the view to the resale or distribution thereof. Each
of the shareholders of Cross is an "accredited investor" under the regulations
promulgated under the 33Act or otherwise meets one of the definitions for
persons entitled to acquire unregistered securities pursuant to an exemption
from registration under the 33Act. Neither Cross nor its shareholders have
received and/or relied upon any representations or warranties from HHD other
than those contained in this Agreement and the attached schedules or exhibits
hereto. Cross represents and warrants that it and its shareholders have such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of its investment in HHD Common Stock. Cross
and its shareholders understand and acknowledge that the HHD Common Stock has
not been registered under the Act or under any state securities act and are
being issued to the shareholders of Cross pursuant to an exemption from
registration under the Act. The reliance by HHD upon such exemption is
predicated upon the representations and warranties of Cross contained herein. In
this regard, Cross and its shareholders understand and agrees that there may be
affixed to the certificates representing the shares of HHD Common Stock
acquired by the shareholders of Cross hereunder a legend advising of the
unregistered, restricted nature of the shares.
4.19 CERTIFICATE The representations, warranties, covenants and agreements
of Cross contained in this Agreement, including, without limitation, those
contained in this Article IV, are true, accurate and correct in all respects as
of the date hereof and shall be true, accurate and correct and complete, in all
respects, as of the Closing; and at the Closing Cross shall deliver to HHD a
certificate, executed by the chief executive officer of Cross remaking, on
behalf of Cross each of the representations, warranties, covenants and
agreements set forth in this Agreement, including without limitation, those set
forth in this Article IV hereof.
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V. COVENANTS AND OTHER AGREEMENTS
5.01 CONDUCT OF BUSINESS OF CROSS Except as herein expressly
provided to the contrary or as otherwise agreed to in writing by
HHD, during the period from the execution of this Agreement until
the earlier to occur of the Effective Time or the termination of this
Agreement as herein provided, Cross will conduct its operations
according to its ordinary and usual course of business and consistent
with past practice. In this regard, except as expressly provided in
this Agreement to the contrary or otherwise agreed to by HHD in
writing or as required by law or agreement, Cross will not, between
the date of this Agreement and the earlier to occur of the Effective
Time or the termination of this Agreement as herein provided:
(a) Make or become obligated to make, any payment to any
director, officer, employee, or agent;
(b) Declare any dividend or make any other distribution
to shareholders;
(c) Incur any indebtedness for borrowed money except in
the ordinary course of business;
(d) Sell, lease, license, encumber or dispose of any
material portion of its properties or assets except in the ordinary
course of business;
(e) Expend funds for any individual capital expenditure
in excess of $5,000 or aggregate capital expenditures in excess of
$30,000;
(f) Issue any shares of capital stock, modify or
reorganize its equity capitalization or grant any option or other
right to acquire any shares of its capital stock;
(g) Amend its certificate of incorporation or by-laws.
(h) Change its business, operations or financial
condition, or the manner of managing or conducting its business and
operations if such changes, if any, have a material adverse effect on
such business, operations or financial condition, taken as a whole;
(i) Change its accounting methods or practices
(including, without limitation, any change in depreciation,
amortization and/or good will policies or rates;
(j) Incur any damage, destruction or loss (whether or
not covered by insurance) which materially and adversely affects its
assets, business, operations or financial condition;
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(k) Make any loan to any person or entity and/or issue
any guaranty for or with respect to its own or another's obligations;
or
(l) Waive or release any right or claim;
5.02 TRANSACTION COSTS AND EXPENSES Each of the parties
hereto shall pay its own respective costs incurred in connection with
this transaction including, without limitation, all legal,
accounting, auditing and appraisal fees in negotiating and preparing
this Agreement and in consummating, closing and implementing the
transactions contemplated hereby.
5.03 SUBSEQUENT EVENTS Each of the parties hereto shall
promptly advise the other parties hereto, in writing of (a) the
occurrence of any event which renders any of the representations or
warranties of such party set forth herein inaccurate in any material
respect, and (b) the failure of such party to comply with or
accomplish, in any material respect, any of the covenants or
agreements of such party set forth herein.
5.04 INDEMNITY
(a) Cross does hereby agree to indemnify and hold
harmless HHD and its employees, officers, directors and successors
against and in respect of any and all claims, suits, actions,
proceedings (formal or informal), governmental investigations,
judgments, deficiencies, set-offs, damages, settlements, liabilities,
and reasonable legal and other expenses (including reasonable
attorneys' fees and defense costs) as and when incurred arising out
of or based upon any breach by Cross of any representation, warranty,
covenant, or agreement of Cross contained in this Agreement;
(b) HHD does hereby agree to indemnify and hold
harmless Cross and its employees, officers, directors and successors
against and in respect of any and all claims, suits, actions,
proceedings (formal or informal), governmental investigations,
judgments, deficiencies, set-offs, damages, settlements, liabilities,
and reasonable legal and other expenses (including reasonable
attorneys' fees and costs of defense) as and when incurred arising
out of or based upon any breach of any representation, warranty,
covenant, or agreement of HHD contained in this Agreement.
(c) The parties' respective indemnity obligations
hereunder shall be subject to the following terms, limitations and
conditions:
(i) A person claiming the right to indemnity
coverage under this Section 5.04 ("indemnitee") shall give
the party from whom he or it seeks indemnity coverage
("indemnitor") prompt notice of the assertion of any
indemnified claim on the basis of which an indemnitee
intends to seek indemnification from an indemnitor as
provided herein; provided, however, that the obligation of an
indemnitor shall be
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reduced for the failure to give timely notice at any
particular time only to the extent that the indemnitor has
been actually prejudiced thereby;
(ii) The indemnitor shall have the duty to
zealously and competently defend, with counsel selected by
indemnitor after consultation with the primary indemnitee,
any matter subject to indemnity coverage under subparagraphs
(a) or (b) of this section and to pay all costs of such
defense. In any case where indemnitor's obligation to provide
a zealous defense is compromised by conflict of interest
between itself and an indemnitee or between indemnitees, the
indemnitor shall, upon the request of an indemnitee, provide
separate legal representation to obviate the conflict of
interest. When indemnitor has assumed the defense obligations
of this section, indemnitor shall have the right to settle
the matter without the indemnitees' consent, provided
indemnitor in fact commits sufficient funds to satisfy the
settlement in full. In the event that an indemnitor fails to
defend as provided in this section, any indemnitee shall have
the right (but not the obligation) to select and be
represented by counsel of its choice, to manage its own legal
representation or defense and to settle any claim, debt or
other indemnified matter hereunder, and the indemnitor shall
be liable to such indemnitee for all costs, expenses, damages
and settlements incurred by such indemnitee;
(iii) With respect to any claim for which an
indemnitor shall indemnify any indemnitee, the indemnitor
shall be subrogated to all rights of any indemnitee against
any and all third parties up to the amount paid by indemnitor
to indemnitees or set off by such indemnity against an
indemnitor;
(iv) No indemnitor shall be liable for that
portion of any claim for which an indemnitee actually
receives from any insurance, the defense, cost of defense or
insurance proceeds covering such claim (the deductible
pertaining to any such insurance shall not be considered to
be insurance proceeds or cost of defense).
5.05 RELATED AGREEMENTS Each of the parties shall execute and
deliver at Closing the related agreements, instruments and documents
specified for delivery at Closing or the Effective Time in Sections
6.02 and 6.03 and elsewhere in this agreement or in a related
agreement to which each, respectively, is a party.
5.6 CROSS LIABILITIES Prior to the Closing Cross shall have
paid in full any and all liabilities of Cross of every kind, nature
and description.
5.7 INSPECTION At all times prior to the Closing, during
normal business hours an upon reasonable notice, each party will
permit the other to examine its books and records and the books and
records of its subsidiaries, to discuss the same with such party's
authorized representative and to make copies thereof and abstracts
therefrom. It is recognized that each
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party may provide the other with information (including, without
limitation, information contained in its books and records and/or
pursuant to the inspection described in the preceding sentence)
which is confidential or proprietary information. During the period
from the date hereof until the fourth annual anniversary of the
Closing (or the termination of this Agreement if the Merger is
abandoned) the recipient of any such information shall protect such
information from disclosure to persons, other than members of its
own organization and its professional advisers, in the same manner
as it protects its own confidential or proprietary information from
unauthorized disclosure, and not use such information to the
competitive detriment of the disclosing party. In addition if this
Agreement is terminated for any reason, each party shall promptly
return or cause to be returned all documents or other written
records of such confidential or proprietary information, together
with all copies of such writings and, in addition, shall either
furnish or cause to be furnished, or shall destroy, or shall
maintain with such standard of care as is exercised with respect to
its own confidential or proprietary information, all copies of all
documents or other written records developed or prepared by such
party on the basis of such confidential or proprietary information.
No information shall be considered confidential or proprietary if it
is (a) information already in the possession of the party to whom
disclosure is made, (b) information acquired by the party to whom
disclosure is made from other sources, or (c) information in the
public domain or generally available to interested persons or which
at a later date passes into the public domain or becomes available
to the party to whom disclosure is made without any wrongdoing by
the party to whom the disclosure is made.
VI. CONDITIONS
6.01 CONDITIONS TO OBLIGATION TO EFFECT THE MERGER The
respective obligations of each party to consummate the Merger
shall be subject to and conditioned upon the satisfaction at or
prior to the Closing Date of the following conditions:
(a) To the extent required by the GCL and/or Colorado
law or the party's certificate of incorporation or by-laws,
shareholder approval shall have been obtained;
(b) No statute, rule, regulation executive order,
decree, temporary restraining order, preliminary or permanent
injunction or other order issued by any court or competent
jurisdiction or other governmental entity preventing the
consummation of the Merger shall be in effect; provided that each of
the parties shall have used reasonable efforts to prevent the entry
of any such injunction or other order and to appeal as promptly as
possible any injunction or other order that may be entered;
(c) There shall not have occurred or been discovered any
material breach or inaccuracy of any representation or warranty made
by any other party in this Agreement, and
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there shall not have occurred any material breach of any covenant or
obligation required by this Agreement or by law to have been
performed by any other party prior to the Effective Time; and
(d) Each party shall have received all documents and
agreements required to be delivered to it at or before the Closing.
6.02 HHD'S OBLIGATIONS AT CLOSING
(a) At the Closing, HHD shall deliver or cause to be
delivered to Cross, in form satisfactory to Cross, the following;
(i) A true copy of the minutes of the meeting of
HHD's Board of Directors approving the Plan of Merger and the
Merger and authorizing the execution, delivery and performance of
this Agreement;
(ii) A certificate of good standing for HHD issued
within thirty (30) days prior to the Closing Date by the Secretary
of State of Delaware; and
(iii) All other schedules, certificates and other
documents required by this Agreement or by law to be delivered by
HHD) on or before Closing or the Effective Time.
(b) At the Closing, HHD shall deliver or cause to be
delivered to the Exchange Agent (as defined) the consideration (set
forth in Section 2.01(a) hereof) to be received by each holder of
Cross Stock (other than Dissenting Shareholders) who shall have
surrendered to HHD, at or before the Closing his, her or its
certificate representing all shares of Cross Stock owned and/or held
by such shareholders; and the Exchange Agent (as defined) shall,
immediately following the recordation of the Certificates of Merger
in the States of Delaware and Colorado, distribute such
consideration to, or in accordance with the written directions of,
such holders of Cross Stock as their respective interests may
appear. Xxxxxxx X. Xxxxxxx, Esq. is hereby designated by the parties
hereto as the Exchange Agent; and by his execution of this
Agreement, Xx. Xxxxxxx accepts such engagement and agrees to perform
the duties of Exchange Agent as herein set forth.
6.03 CROSS'S OBLIGATIONS AT CLOSING
At or prior to the Closing, Cross shall deliver or cause to
be delivered to HHD, in form satisfactory to HHD, the following:
(a) A true copy of the minutes of the meeting of the
Board of Directors of Cross adopting the Agreement and Plan of
Merger and Merger, recommending the Agreement
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and Plan of Merger and Merger to the shareholders of Cross and
authorizing Cross's execution, delivery and performance of this
Agreement;
(b) A true copy of the notice of shareholders meeting
and proof of service thereof upon all Cross shareholders of record
in accordance with the Colorado law together with the minutes of
the shareholder's meeting evidencing shareholder approval of the
Plan of Merger and the execution, delivery and performance of this
Agreement; or, alternatively, a unanimous written consent executed
by all of the shareholders of Cross containing the foregoing
approvals;
(c) An opinion of counsel to Cross reasonably acceptable
to HHD with respect to such matters and in such form as shall be
reasonably requested by and acceptable to HHD;
(d) Documentary proof reasonably acceptable to HHD that
all of the liabilities of Cross of every kind, nature and
description have been paid in fall as at and through the date of the
Closing;
(e) All of the books and records of Cross;
(f) A certificate of good standing for Cross issued
within thirty (30) days prior to the Closing Date by the Secretary
of State of Colorado; and
(g) All other schedules, certificates and other
documents required by this Agreement to be delivered by Cross on or
before Closing or the Effective Time;
VII. ABANDONMENT
7.01 ABANDONMENT OF MERGER The rights and obligations of
the Constituent Corporations under this Agreement may be terminated
and the Merger abandoned prior to the Effective Time as provided in
the GCL by the mutual agreement of the Board of Directors of both of
the Constituent Corporations.
VIII. MISCELLANEOUS
8.01 BROKERAGE FEES No party to this Agreement has consented
to or authorized any broker or agent to act on its behalf, directly
or indirectly, as a broker or finder in connection with the
transaction contemplated by this Agreement. In the event any claim
is made for a broker's or finder's fee in connection with the
transactions contemplated hereunder, the party
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responsible for retaining or securing said broker or finder shall be
solely responsible for the payment of any broker's or finder's fees
incurred as a result thereof. Further, the responsible party or
parties shall indemnify the other parties against any loss or
liabilities by reason of such broker's or finder's fees.
8.02 FURTHER ACTIONS At any time and from time to time, each
party agrees, at its expense, to take such actions and to execute
and deliver such documents as may be reasonably necessary to
effectuate the purposes of this Agreement.
8.03 SURVIVAL Except as otherwise provided herein, the
covenants, agreements, representations, and warranties contained in
or made pursuant to this Agreement shall survive the Effective Time
and any delivery of consideration at Closing or the Effective Time
irrespective of any investigation made by or on behalf of any
party.
8.04 MODIFICATION This Agreement and the related instruments
and agreements hereto set forth the entire understanding of the
parties with respect to the subject matter hereof, supersede all
existing agreements among them concerning such subject matter, and
may be modified only by a written instrument duly executed by all of
the parties hereto.
8.05 NOTICES All notices, elections, reports or other
correspondence required or permitted hereunder shall be in writing
and deemed to have been properly given or delivered when mailed by
certified mail, return receipt requested, postage prepaid, delivered
by overnight express courier, delivery fees prepaid, or transmitted
by fax with receipt confirmed, to the party to whom directed at the
below specified addresses:
If to HHD: 000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxx, Xx.
With a copy to:
Xxxxxx X. Xxxxxxx, Esq.
00 Xxxxx Xxxx Xxxx
Xxxxxxx, Xx. 00000
If to Cross: 0000 Xxxxxxx Xxxxx Xxxxx
Xxxxxxx, Xx. 00000
With a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
00000 X. 00xx Xxxxxx, No. 400
Wheat Ridge, Co. 80033
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Any such notice shall be deemed given thee days after deposit with
the mail, one day following delivery thereof to an overnight express
courier or upon confirmation of receipt when sent by fax. The
address of a party may be changed in accordance with the notice
provisions of this section.
8.06 WAIVER Any waiver by any party of a breach of any
provision of this Agreement shall not operate as or be construed to
be a waiver of any other breach of that provision or of any breach
of any other provision 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.
8.07 BINDING EFFECT The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns, and in addition shall inure
to the benefit of the indemnitees and their respective successors,
assigns, heirs, and personal representatives.
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 (except as
provided in Section 8.07).
8.09 SEVERABILITY AND REFORMATION If any provision of this
Agreement is invalid, illegal, or unenforceable, the balance of
this Agreement shall remain in effect, and if any provision is
inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances, in either
case unless the result thereof would preclude the consummation in
all material respects of the Merger contemplated by this Agreement
and the associated transactions or result in an unjust modification
of the balance of rights and obligations hereunder. To the extent
provided in this section, a court having jurisdiction of a matter
involving the interpretation of this Agreement shall be authorized
to reform this Agreement to the minimum extent necessary to
accomplish the objectives of this section
8.10 HEADINGS The heading of this Agreement are solely for
convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement.
8.11 GOVERNING LAW To the extent permitted by law, this
Agreement shall be governed by and construed in accordance with the
laws of the state of Delaware, without giving effect to conflict of
laws. To the maximum extent permitted by law and subject to the
provisions of Section 8-14 hereof, any action or proceeding
initiated by any party to this Agreement, any indemnitee or any
other person claiming rights under this Agreement shall be brought
in an appropriate state or federal court in Fairfield County,
Connecticut, and any
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person claiming rights under this agreement consents to the
jurisdiction and proper venue of such forum.
8.12 SEPARATE COUNTERPARTS This Agreement may be executed in
several identical counterparts, each one of which shall be
considered an original and all of which when taken together shall
constitute but one instrument.
8.13 INCORPORATION OF RECITALS, EXHIBITS AND SCHEDULES All
related instruments and agreements executed in connection herewith
are incorporated herein by this reference and expressly made a part
of this Agreement.
8.14 ARBITRATION Except in cases where the remedy of
preliminary injunction is reasonably sought by a party because of
the irreparability and immediacy of the harm alleged to be caused or
threatened, in the event there shall arise any dispute or claim in
law or equity arising out of this Agreement or any breach thereof or
any resulting transaction between the parties under this Agreement
and if such dispute cannot be resolved through negotiation, the
parties agree that such dispute shall be submitted to arbitration
under the rules and regulations of the American Arbitration
Association then obtaining. The arbitration shall be held in
Stamford Connecticut, before a single arbitrator.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date of the day and year first above written.
HouseHold Xxxxxx.xxx, Inc.
By /s/ XXXX XXXXXX
-----------------------------------
Xxxx Xxxxxx, President
Cross Check Corp.
By /s/ XXXXX XXXX
-----------------------------------
Xxxxx Xxxx, President
The undersigned, Xxxxxxx X. Xxxxxxx agrees to serve as Exchange
Agent in accordance with the terms and conditions of this
Agreement.
/S/ XXXXXXX X. XXXXXXX
-----------------------------------
Xxxxxxx X. Xxxxxxx
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