Exhibit 2.02
MERGER AGREEMENT
THIS MERGER AGREEMENT (the "Agreement"), dated as of ________, 2002, among
UNITED COMPANIES CORPORATION, a Nevada corporation ("Parent"), MERGER CO., a
Nevada corporation and a wholly owned subsidiary of Parent ("Sub"), and AVID
SPORTSWEAR & GOLF CORP., a Nevada corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Sub and the Company
have approved the merger of the Company with and into the Sub (the "Merger"),
upon the terms and subject to the conditions set forth in this Agreement,
whereby each issued and outstanding share of common stock of the Company
("Company Common Stock") will be converted into common stock of Parent ("Parent
Common Stock");
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger;
WHEREAS, for Federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties hereto agree
as follows:
ARTICLE I.
THE MERGER
SECTION 1.1. THE MERGER. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Nevada Revised Statutes (the
"NRS"), the Company shall be merged with and into the Sub at the Effective Time
(as defined in Section 1.3). Following the Merger, the separate corporate
existence of the Company shall cease and the Sub shall continue as the surviving
corporation (the "Surviving Corporation") and shall succeed to and assume all
the rights and obligations of the Company in accordance with the NRS.
SECTION 1.2. CLOSING. The closing of the Merger (the "Closing") will take
place at 10:00 a.m. on a date to be specified by the parties, which shall be no
later than the second business day after satisfaction or waiver of the
conditions set forth in Article VI (as such date may be extended (the "Closing
Date"), at the offices of Xxxxxxxxxxx & Xxxxxxxx LLP, 000 Xxxxx Xxxxxxxx
Xxxxxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 00000, unless another date or place is
agreed to in writing by the parties hereto.
SECTION 1.3. EFFECTIVE TIME. Subject to the provisions of this Agreement,
as soon as practicable on or after the Closing Date, the parties shall file with
the Nevada Secretary of State Articles of Merger (the "Articles of Merger")
executed in accordance with the relevant provisions of the NRS. The Merger shall
become effective at such time as the Articles of Merger are duly filed with the
Nevada Secretary of State, or at such other time Parent and the Company shall
agree should be specified in the Articles of Merger (the time the Merger becomes
effective being the "Effective Time").
SECTION 1.4. ARTICLES OF INCORPORATION AND BYLAWS.
(a) The Articles of Incorporation of Sub, as in effect
immediately prior to the Effective Time, shall be the Articles of Incorporation
of the Surviving Corporation until thereafter changed or amended as provided
therein or by applicable law.
(b) The Bylaws of Sub, as in effect immediately prior to the
Effective Time, shall be the Bylaws of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law.
SECTION 1.5. DIRECTORS. The director of Sub immediately prior to the
Effective Time shall be the director of the Surviving Corporation, until the
earlier of his resignation or removal or until his respective successor is duly
elected and qualified, as the case may be.
SECTION 1.6. OFFICERS. The officer of the Parent shall be the officer of
the Surviving Corporation, until the earlier of his resignation or removal or
until his respective successor is duly elected and qualified, as the case may
be.
ARTICLE II.
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATION
EXCHANGE OF CERTIFICATES
SECTION 2.1. EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue
of the Merger and without any action on the part of the holder of any shares of
Company Common Stock:
(a) CONVERSION OF COMPANY COMMON STOCK. Subject to Section
2.2(e), each issued and outstanding share of Company Common Stock shall be
converted into two hundredths (0.02) (such fraction, as it may be adjusted
pursuant to the final sentence of this Section 2.1, being referred to as the
"Exchange Ratio") of a fully paid and nonassessable share of Parent Common
Stock. As of the Effective Time, all such shares of Company Common Stock shall
no longer be outstanding and shall automatically be canceled and retired and
shall cease to exist, and each holder of a certificate which immediately prior
to the Effective Time represented any such shares of Company Common Stock shall
cease to have any rights with respect thereto, except the right to receive
certificates representing the number of fully paid and nonassessable shares of
Parent Common Stock into which such shares of Company Common Stock were
converted at the Effective Time. Fractional shares of Parent Common Stock to be
issued shall be rounded up to one (1) share of Parent Common Stock and no cash
shall be paid in lieu of fractional shares of Parent Common Stock to be issued
nor paid in consideration therefor upon surrender of certificates of Company
Common Stock.
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SECTION 2.2. EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. As of the Effective Time, Parent shall
deposit with Transfer Online (the "Exchange Agent"), for the benefit of the
holders of shares of Company Common Stock, for exchange in accordance with this
Article II, through the Exchange Agent, certificates representing the shares of
Parent Common Stock issuable pursuant to Section 2.1.
(b) EXCHANGE PROCEDURES. As soon as reasonably practicable
after the Effective Time, Parent shall cause the Exchange Agent to mail to each
holder of record of a certificate or certificates which immediately prior to the
Effective Time represented outstanding shares of Company Common Stock (the
"Certificates") whose shares were converted into Parent Common Stock pursuant to
Section 2.1, (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Exchange Agent and shall be in
customary form and have such other provisions as Parent may reasonably specify)
and (ii) instructions for use in effecting the surrender of the Certificates in
exchange for certificates representing shares of Parent Common Stock. Upon
surrender of a Certificate for cancellation to the Exchange Agent, together with
such letter of transmittal, duly executed, and such other documents as may
reasonably be required by the Exchange Agent, the holder of such Certificate
shall be entitled to receive in exchange therefor a certificate representing
that number of whole shares of Parent Common Stock which such holder has the
right to receive pursuant to the provisions of this Article II after taking into
account all the shares of Company Common Stock then held by such holder under
all such Certificates so surrendered, and the Certificate so surrendered shall
forthwith be canceled. In the event of a transfer of ownership of Company Common
Stock which is not registered in the transfer records of the Company, a
certificate representing the proper number of shares of Parent Common Stock may
be issued to a person other than the person in whose name the Certificate so
surrendered is registered, if, upon presentation to the Exchange Agent, such
Certificate shall be properly endorsed or otherwise be in proper form for
transfer and the person requesting such issuance shall pay any transfer or other
taxes required by reason of the issuance of shares of Parent Common Stock to a
person other than the registered holder of such Certificate or establish to the
satisfaction of Parent that such tax has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.2(b), each Certificate shall be
deemed at any time after the Effective Time to represent only the shares of
Parent Common Stock into which the shares of Company Common Stock represented
thereby were converted at the Effective Time.
(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No
dividends or other distributions with respect to Parent Common Stock with a
record date after the Effective Time shall be paid to the holder of any
unsurrendered Certificate with respect to the shares of Parent Common Stock
represented thereby until the holder of record of such Certificate shall
surrender such Certificate. Following surrender of any such Certificate, there
shall be paid to the record holder of the certificate representing whole shares
of Parent Common Stock issued in exchange therefor, without interest, at the
appropriate payment date, the amount of dividends or other distributions with a
record date after the Effective Time but prior to such surrender and a payment
date subsequent to such surrender payable with respect to such whole shares of
Parent Common Stock.
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(d) NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. All
shares of Parent Common Stock issued pursuant to this Article II shall be deemed
to have been issued and paid in full satisfaction of all rights pertaining to
such shares of Company Common Stock, subject, however, to the Surviving
Corporation's obligation to pay any dividends or make any other distributions
with a record date prior to the Effective Time which may have been declared or
made by the Company on such shares of Company Common Stock in accordance with
the terms of this Agreement or prior to the date of this Agreement and which
remain unpaid at the Effective Time, and there shall be no further registration
of transfers on the stock transfer books of the Surviving Corporation of the
shares of Company Common Stock which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to the
Surviving Corporation or the Exchange Agent for any reason, they shall be
canceled and exchanged as provided in this Article II.
(e) FRACTIONAL SHARES.
(i) FRACTIONAL SHARES. Fractional shares of Parent Common
Stock to be issued pursuant to the Merger shall be rounded up to one (1) share
of Parent Common Stock. No cash shall be paid in lieu of fractional shares.
(ii) LOST CERTIFICATES. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such person of a bond in
such reasonable amount as the Surviving Corporation may direct as indemnity
against any claim that may be made against it with respect to such Certificate,
the Exchange Agent will issue in exchange for such lost, stolen or destroyed
Certificate a certificate representing the shares of Parent Common Stock into
which the shares of Company Common Stock represented by such Certificate were
converted pursuant to Section 2.1, and (ii) any unpaid dividends and
distributions on such shares of Parent Common Stock, pursuant to this Agreement.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to Parent and Sub as follows:
(a) ORGANIZATION, STANDING AND CORPORATE POWER. The Company and
each of its subsidiaries is a corporation or other legal entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization and has all requisite corporate power and
authority to carry on its business as now being conducted. The Company and each
of its subsidiaries is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the nature of its business or the
ownership, leasing or operation of its properties makes such qualification or
licensing necessary, other than in such jurisdictions where the failure to be so
qualified or licensed individually or in the aggregate would not have a Material
Adverse Effect (as defined below) on the Company. The Company has delivered to
Parent complete and correct copies of its Articles of Incorporation and Bylaws,
in each case as amended to the date hereof. "Material Adverse Effect" means any
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change or effect that is materially adverse to the business, financial condition
or results of operations of either the Company and its subsidiaries or Parent
and its subsidiaries, taken as a whole, as the case may be.
(b) CAPITAL STRUCTURE. The authorized capital stock of the
Company consists 150,000,000 shares of Company Common Stock and 10,000,000
shares of preferred stock, par value $0.001 per share ("Company Preferred
Stock"). At the close of business on June 1, 2002, 147,933,309 shares of Company
Common Stock were issued and outstanding, (ii) no shares of Company Common Stock
were held by the Company in its treasury, and (iii) 5,000 shares of Company
Preferred Stock were issued and outstanding. All outstanding shares of capital
stock of the Company are issued in accordance with the terms thereof, duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights. As of the date of this Agreement, and except as contemplated
by this Agreement, there are no stockholder agreements, voting trusts or other
agreements or understandings to which the Company is a party or by which it is
bound relating to the voting of any shares of capital stock of the Company. All
of the outstanding capital stock of the Company's subsidiaries is owned by the
Company, directly or indirectly, free and clear of any lien or any other
limitation or restriction (including any restriction on the right to vote or
sell the same, except as may be provided as a matter of law). As of the date of
this Agreement, there are no outstanding contractual obligations of the Company
or its subsidiaries to repurchase, redeem or otherwise acquire any outstanding
shares of capital stock or other ownership interests in any subsidiary of the
Company.
(c) AUTHORITY; NONCONTRAVENTION. The Company has the requisite
corporate power and authority to enter into this Agreement and, subject to the
adoption and approval of this Agreement and the approval of the Merger by the
holders of a majority of the shares of Company Common Stock outstanding on the
record date for the Stockholders Meeting (as defined in Section 4.1), to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement by the Company and the consummation by the Company of
the transactions contemplated by this Agreement have been duly authorized by all
necessary corporate action on the part of the Company, subject, in the case of
this Agreement and the Merger, to approval and adoption of this Agreement and
approval of the Merger by the holders of a majority of the shares of Company
Common Stock outstanding on the record date for the Stockholders Meeting. This
Agreement has been duly executed and delivered by the Company and, assuming the
due authorization, execution, and delivery of this Agreement by Parent and
Merger Sub, constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium and similar laws, both state and federal, affecting
the enforcement of creditors' rights or remedies in general as from time to time
in effect or (ii) the exercise by courts of equity powers.
(d) SEC DOCUMENTS. The Company has filed all required reports,
schedules, forms, statements and other documents with the Securities and
Exchange Commission (the "SEC") between January 1, 2002 and the date of this
Agreement. All reports, schedules, forms, statements and other documents -filed
by the Company with the SEC between January 1, 2000 and the date of this
Agreement (other than any exhibits to such reports, schedules, forms, statements
and documents) are collectively referred to in this Agreement as the "Company
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SEC Documents." As of the time each of the Company SEC Documents was filed with
the SEC (or, if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing), (i) the Company SEC Documents
complied in all material respects with the requirements of the Securities Act of
1933 (the "Securities Act"), or the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as the case may be, and the rules and regulations of the
SEC promulgated thereunder applicable to such Company SEC Documents, and (ii)
except to the extent that information contained in any Company SEC Document has
been revised or superseded by a later-filed Company SEC Document, none of the
Company SEC Documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(e) INFORMATION SUPPLIED. None of the information supplied or
to be supplied by the Company specifically for inclusion or incorporation by
reference in (i) the registration statement on Form S-4 to be filed with the SEC
by Parent in connection with the issuance of Parent Common Stock in connection
with the Merger (the "Form S-4") will, at the time the Form S-4 is filed with
the SEC, at any time it is amended or supplemented and at the time it becomes
effective under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading and (ii) the proxy statement relating to the
adoption and approval by the Company's stockholders of this Agreement and
approval by the Company's stockholders of the Merger, as amended or supplemented
form time to time (the "Proxy Statement"), will, at the date it is first mailed
to the Company's stockholders and at the time of the Stockholders Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Proxy Statement will comply as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations
thereunder, except that no representation is made by the Company with respect to
statements made or incorporated by reference therein based on information
supplied by Parent or Sub specifically for inclusion or incorporation by
reference in the Proxy Statement.
(f) LITIGATION. Except as disclosed in the SEC Documents, there
is no suit, action or proceeding pending against or affecting the Company or any
of its subsidiaries that would, individually or in the aggregate, have a
material adverse effect on the Company, nor is there any judgment, decree,
injunction, or order of any Governmental Entity or arbitrator outstanding
against, or, to the knowledge of the Company, pending investigation by any
federal, state or local government or any court, administrative agency or
commission or other governmental authority or agency, domestic or foreign (a
"Governmental Entity") involving, the Company or any of its subsidiaries that
individually or in the aggregate would have a material adverse effect on the
Company.
(g) VOTING REQUIREMENTS. The affirmative vote of the holders of
a majority of the shares of Company capital stock outstanding as of the record
date for the Stockholders Meeting is the only vote necessary to approve this
Agreement and the transactions contemplated by this Agreement.
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SECTION 3.2. REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB. Except as
set forth on the disclosure schedule delivered by Parent to the Company prior to
the execution of this Agreement (the "Parent Disclosure Schedule"), Parent
represents and warrants to the Company as follows:
(a) ORGANIZATION, STANDING AND CORPORATE POWER. Each of Parent
and Sub is a corporation duly organized, validly existing and in good standing
under the laws of Nevada and has all requisite corporate power and authority to
carry on its business as now being conducted. Each of Parent and Sub is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership, leasing or
operation of its properties makes such qualification or licensing necessary,
other than in such jurisdictions where the failure to be so qualified or
licensed individually or in the aggregate would not have a material adverse
effect on Parent. Parent has delivered to the Company complete and correct
copies of its Articles of Incorporation and Bylaws and the Certificate of
Incorporation and Bylaws of Sub, in each case as amended to the date hereof.
(b) CAPITAL STRUCTURE. The authorized capital stock of Parent
consists of 250,000,000 shares of Common Stock, par value per share. At the
close of business on June 1, 2002, 495,867 shares of Parent Common Stock were
issued and outstanding. Except as set forth above, at the close of business on
June 1, 2002, no shares of capital stock or other voting securities of Parent
were issued, reserved for issuance or outstanding. All outstanding shares of
capital stock of Parent are duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights. As of the date of this
Agreement, there are not any outstanding contractual obligations of Parent to
repurchase, redeem or otherwise acquire any shares of capital stock or other
securities of Parent. As of the date of this Agreement, there are no stockholder
agreements, voting trusts or other agreements or understandings to which Parent
is a party or by which it is bound relating to the voting of any shares of
capital stock of Parent. All of the outstanding capital stock of Parent's
subsidiaries is owned by Parent, directly or indirectly, free and clear of any
lien or any other limitation or restriction (including any restriction on the
right to vote or sell the same, except as may be provided as a matter of law).
As of the date of this Agreement, there are no outstanding contractual
obligations of Parent or its subsidiaries to repurchase, redeem or otherwise
acquire any outstanding shares of capital stock or other ownership interests in
any subsidiary of Parent.
(c) AUTHORITY; NONCONTRAVENTION. Parent and Sub have the
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement by Parent and Sub and the consummation by Parent and
Sub of the transactions contemplated by this Agreement have been duly authorized
by all necessary corporate action on the part of Parent and Sub. This Agreement
has been duly executed and delivered by Parent and Sub, and, assuming the due
authorization, execution, and delivery of this Agreement by the Company,
constitutes a valid and binding obligation of Parent and Sub, enforceable
against Parent and Sub in accordance with its terms, except as enforcement
thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium
and similar laws, both state and federal, affecting the enforcement of
creditors' rights or remedies in general as from time to time in effect or (ii)
the exercise by courts of equity powers.
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(d) INFORMATION SUPPLIED. None of the information supplied or
to be supplied by Parent or Sub specifically for inclusion or incorporation by
reference in (i) the Form S-4 will, at the time the Form S-4 is filed with the
SEC, at any time it is amended or supplemented or at the time it becomes
effective under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading, and (ii) the Proxy. Statement will, at the
date it is first mailed to the Company's stockholders or at the time of the
Stockholders Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. The Form S-4 will comply as to form in all material
respects with the requirements of the Securities Act and the rules and
regulations thereunder, except that no representation is made by Parent or Sub
with respect to statements made or incorporated by reference therein based on
information supplied by the Company specifically for inclusion or incorporation
by reference in the Form S-4.
(e) LITIGATION. There is no suit, action or proceeding pending,
and no person has overtly-threatened in a writing delivered to Parent to
commence any suit, action or proceeding, against or affecting Parent or any of
its subsidiaries that would, individually or in the aggregate, have a material
adverse effect on Parent, nor is there any judgment, decree, injunction, or
order of any Governmental Entity or arbitrator outstanding against, or, to the
knowledge of Parent, pending investigation by any Governmental Entity involving,
Parent or any of its subsidiaries that individually or in the aggregate would
have a material adverse effect on Parent.
(f) INTERIM OPERATIONS OF SUB. Sub was formed solely for the
purpose of engaging in the transactions contemplated hereby, has engaged in no
other business activities and has conducted its operations only as contemplated
hereby.
(g) PARENT COMMON STOCK. The Parent Common Stock to be issued
in connection with the Merger has been duly authorized by all necessary
corporate action, and when issued in accordance with this Agreement, will be
validly issued, fully paid and nonassessable and not subject to preemptive
rights, and will be freely tradable except for restrictions on transfer
(applicable to affiliates of the Company) required in order to preserve the
reorganization accounting treatment of the Merger. Without limiting the
generality of the foregoing and subject to the provisions of Rule 145 under the
Securities Act, none of the shares of Parent Common Stock to be issued in
connection with the Merger will constitute "restricted securities" within the
meaning of Rule 144 under the Securities Act.
ARTICLE IV.
ADDITIONAL AGREEMENTS
SECTION 4.1. PREPARATION OF FORM S-4 AND PROXY STATEMENT; STOCKHOLDERS
MEETING.
(a) As soon as practicable following the date of this
Agreement, the Company and Parent shall prepare and the Company shall file with
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the SEC the Proxy Statement and Parent shall prepare and file with the SEC the
Form S-4, in which the Proxy Statement will be included as a prospectus. Each of
the Company and Parent shall use all reasonable efforts to have the Form S-4
declared effective under the Securities Act as promptly as practicable after
such filing. To the extent that presenting this Agreement and the Merger to the
Company's stockholders would not violate or otherwise be inconsistent with
applicable law, the Company will use its reasonable efforts to cause the Proxy
Statement to be mailed to the Company's stockholders as promptly as practicable
after the Form S-4 is declared effective under the Securities Act. Parent shall
also take any action required to be taken under any applicable state securities
laws or other applicable laws, rules or regulations in connection with the
issuance of Parent Common Stock pursuant to the terms of this Agreement. Each of
Parent and the Company shall furnish all information concerning itself to the
other as may be reasonably requested in connection with any such action and the
preparation, filing and distribution of the Proxy Statement.
(b) The Company will, as soon as reasonably practicable
following the date of this Agreement, establish a record date (which will be as
soon as practicable following the date of this Agreement) for, and, to the
extent that convening and holding a meeting would not violate or otherwise be
inconsistent with applicable law, duly call, give notice of, convene and hold a
meeting of its stockholders (the "Stockholders Meeting") for the purpose of
approving and adopting this Agreement. Except to the extent the Board of
Directors of the Company determines in good faith, after consultation with
outside counsel, that to do so would create a substantial risk of liability for
breach of its fiduciary duties to the Company's stockholders under applicable
law, the Company will, through its Board of Directors, recommend to its
stockholders approval and adoption of this Agreement.
SECTION 4.2. REASONABLE EFFORTS. Upon the terms and subject to the
conditions set forth in this Agreement, each of the parties agrees to use all
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the other parties in doing,
all things necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement. In connection with and without limiting the
foregoing, the Company and its Board of Directors shall, if any state takeover
statute or similar statute or regulation is or becomes applicable to the Merger
or this Agreement, use all reasonable efforts to ensure that the Merger may be
consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise to minimize the effect of such statute or regulation on
the Merger and this Agreement.
SECTION 4.3. FEES AND EXPENSES. All fees and expenses incurred in
connection with the Merger, this Agreement and the transactions contemplated by
this Agreement shall be paid by the party incurring such fees or expenses,
whether or not the Merger is consummated, except that expenses incurred in
connection with printing and mailing the Proxy Statement and the Form S-4 shall
be shared equally by Parent and the Company.
SECTION 4.4. REORGANIZATION. Each of the Company and Parent will use
reasonable efforts to Cause the Merger to be accounted for as a reorganization
under the Accounting Principles Board and applicable SEC rules and regulations,
and such accounting treatment to be accepted by each of the Company's and
Parent's independent public accountants, and by the SEC, respectively, and each
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of the Company and Parent agrees that it will voluntarily take no action that
would cause such accounting treatment not to be obtained.
SECTION 4.5. TAX TREATMENT. Each of Parent and the Company shall not
(before or after the Effective Time) take any action and shall not (before or
after the Effective Time) fail to take any action which action or failure to act
would prevent, or would be reasonably likely to prevent, the Merger from
qualifying as a reorganization within the meaning of Section 368(a) of the Code.
ARTICLE V.
CONDITIONS PRECEDENT
SECTION 5.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) STOCKHOLDER APPROVAL. This Agreement shall have been
approved and adopted by the affirmative vote of the holders of a majority of the
shares of Company Common Stock outstanding as of the record date for the
Stockholders Meeting.
(b) NO INJUNCTIONS OR RESTRAINTS. No temporary restraining
order, preliminary or permanent injunction or other order issued or sought by
any U.S. federal or state court of competent jurisdiction or other material
legal restraint or prohibition issued or promulgated by a federal or state
Governmental Entity preventing the consummation of the Merger shall be in
effect.
(c) FORM S-4. The Form S-4 shall have become effective under
the Securities Act and shall not be the subject of any stop order or proceedings
seeking a stop order.
SECTION 5.2. CONDITIONS TO OBLIGATIONS OF PARENT AND SUB. The
obligations of Parent and Sub to effect the Merger are further subject to the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company set forth in this Agreement (excluding any
representation or warranty that refers specifically to "the date of this
Agreement," "the date hereof' or any other date other than the Closing Date)
shall be accurate in all material respects as of the Closing Date as if made on
and as of the Closing Date (it being understood that, for purposes of
determining the accuracy of such representations and warranties as of the
Closing Date, (i) any inaccuracy that does not have a material adverse effect on
the Company shall be disregarded, (ii) any inaccuracy that results from or
relates to general business, economic or industry conditions shall be
disregarded, and (ii:) any inaccuracy that results from or relates to the taking
of any action contemplated or permitted by this Agreement or the announcement or
pendency of the Merger shall be disregarded).
(b) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company
shall have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date.
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Section 5.3. CONDITIONS TO OBLIGATION OF THE COMPANY. The obligation of
the Company to effect the Merger is further subject to the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Parent and Sub set forth in this Agreement (excluding any
representation or warranty that refers specifically to "the date of this
Agreement," "the date hereof' or any other date other than the Closing Date)
shall be accurate in all material respects as of the Closing Date as if made on
and as of the Closing Date (it being understood that, for purposes of
determining the accuracy of such representations and warranties as of the
Closing Date, (i) any inaccuracy that does not have a material adverse effect on
Parent or Sub shall be disregarded, (ii) any inaccuracy that results from or
relates to general business, economic or industry conditions shall be
disregarded, and (iii) any inaccuracy that results from or relates to the taking
of any action contemplated or permitted or the announcement or pendency of the
Merger by this Agreement shall be disregarded).
(b) PERFORMANCE OF OBLIGATIONS OF PARENT AND SUB. Parent and
Sub shall have performed in all material respects all obligations required to be
performed by them under this Agreement at or prior to the Closing Date.
ARTICLE VI.
TERMINATION, AMENDMENT AND WAIVER
SECTION 6.1 TERMINATION. This Agreement may be terminated, and the
Merger contemplated hereby may be abandoned, at any time prior to the Effective
Time, whether before or after approval of matters presented in connection with
the Merger by the stockholders of the Company:
(a) by mutual written consent of Parent, Sub and the Company;
(b) by either Parent or the Company:
(i) if any temporary restraining order, preliminary or
permanent injunction or other order issued or sought by any U.S. federal or
state court of competent jurisdiction or other material legal, restraint or
prohibition issued or promulgated by a U.S. federal or state Governmental Entity
having any of the effects set forth in Section 5.1(b) shall be in effect and
shall have become final and nonappealable;
(ii) if (A) the Stockholders Meeting (including any
adjournments thereof) shall have been held and completed and the Company's
stockholders shall have taken a final vote on a proposal to approve and adopt
this Agreement and to approve the Merger, and (B) the adoption and approval of
this Agreement and the approval of the Merger by the holders of a majority of
the shares of Company Common Stock outstanding on the record date for the
Stockholders Meeting shall not have been obtained;
(c) by the Company, upon a breach of any representation,
warranty, covenant or agreement on the part of Parent set forth in this
Agreement, or if any such representation or warranty of Parent shall have become
inaccurate, in either case such that the conditions set forth in Section 5.2(a)
or Section 5.2(b), as the case may be, would not be satisfied as of the time of
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such breach or as of the time such representation or warranty shall have become
inaccurate; or
(d) by Parent, upon a breach of any representation, warranty,
covenant or agreement on the part of the Company set forth in this Agreement, or
if any such representation or warranty of the Company shall have become
inaccurate, in either case such that the conditions set forth in Section 5.3(a)
or Section 5.3(b), as the case may be, would not be satisfied as of the time of
such breach or as of the time such representation or warranty shall have become
inaccurate.
SECTION 6.2. EFFECT OF TERMINATION. In the event of termination of this
Agreement by either the Company or Parent as provided in Section 6.1, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Parent, Sub or the Company, except to the extent
that such termination results from the willful and material breach by a party of
any of its representations, warranties, covenants or agreements set forth in
this Agreement.
SECTION 6.3. AMENDMENT. This Agreement may be amended by the parties
hereto at any time before or after any required approval of matters presented in
connection with the Merger by the stockholders of the Company; provided,
however, that after any such approval, there shall be made no amendment that by
law requires further approval by such stockholders without the further approval
of such stockholders. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties hereto.
ARTICLE VII.
GENERAL PROVISIONS
SECTION 7.1. NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations or warranties contained in this Agreement or in any certificate
or instrument delivered pursuant hereto shall survive the Effective Time. This
Section 7.1 shall not limit any covenant or agreement of the parties which by
its terms contemplates performance after the Effective Time.
SECTION 7.2. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
SECTION 7.3. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement, and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter of this
Agreement.
SECTION 7.4. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Nevada, regardless of the
laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
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SECTION 7.5. ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned, in whole or in part, by
operation of law or otherwise by any of the parties without the prior written
consent of the other parties, except that Sub may assign, in its sole
discretion, any of or all its rights, interests and obligations under this
Agreement to Parent or to any direct or indirect wholly owned subsidiary of
Parent, but no such assignment shall relieve Sub of any of its obligations
hereunder. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of, and be enforceable by, the parties and their
respective successors and assigns.
SECTION 7.6. SEVERABILITY. If any term or other provision of this
Agreement is invalid. illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible to the fullest
extent permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
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IN WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement
to be signed by their respective officers thereunto duly authorized, all as of
the date first written above.
UNITED COMPANIES CORPORATION
By:_________________________________
Name: Xxxxx Xxxxxxx
Title: President
MERGER CO.
By:_________________________________
Name: Xxxxx Xxxxxxx
Title: President
AVID SPORTSWEAR & GOLF CORP.
By:_________________________________
Name: Xxxxx Xxxxxxx
Title: President
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