AGREEMENT AND PLAN OF MERGER
BY AND AMONG
XXXXXX INDUSTRIES, INC.,
XXXXXX ACQUISITION CORPORATION,
XXXXX XXXXXX
AND
SMART CHOICE HOLDINGS, INC.,
XXXXXX X. XXXXXX,
XXXXXX X. XXXXXX
TABLE OF CONTENTS
RECITALS
1. THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 EFFECTIVENESS OF THE MERGER. . . . . . . . . . . . . . . . . . . . . 2
1.3 EFFECT OF THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 SURVIVING CORPORATION. . . . . . . . . . . . . . . . . . . . . . . . 3
1.5 STATUS AND CONVERSION OF THE COMPANY'S SHARES AND
THE POTENTIAL SECURITIES. . . . . . . . . . . . . . . . . . . . . . 3
1.6 BOOKS AND RECORDS. . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.7 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2. COMPANY SHAREHOLDERS' AGREEMENTS. . . . . . . . . . . . . . . . . . . . 5
2.1 INVESTMENT INTENT AND DISCLOSURE . . . . . . . . . . . . . . . . . . 5
3. XXXXX XXXXXX'X CONSIDERATION AND OBLIGATIONS. . . . . . . . . . . . . . 5
3.1 SURRENDER OF WARRANT AND OPTION RIGHTS . . . . . . . . . . . . . . . 5
3.2 NEW EMPLOYMENT AGREEMENT FOR SHAREHOLDERS. . . . . . . . . . . . . . 5
3.3 XXXXX XXXXXX'X REGISTRATION RIGHTS . . . . . . . . . . . . . . . . . 5
3.4 XXXXX XXXXXX GUARANTIES AND INDEMNIFICATION. . . . . . . . . . . . . 6
4. FURTHER ASSURANCES. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . 6
5.1 TITLE TO THE STOCK . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.2 VALID AND BINDING AGREEMENT. . . . . . . . . . . . . . . . . . . . . 7
5.3 ORGANIZATION, GOOD STANDING AND QUALIFICATION. . . . . . . . . . . . 7
5.4 CAPITAL STRUCTURE; STOCK OWNERSHIP . . . . . . . . . . . . . . . . . 8
5.5 SUBSIDIARIES AND INVESTMENTS . . . . . . . . . . . . . . . . . . . . 8
5.6 FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . 8
5.7 NO MATERIAL CHANGES. . . . . . . . . . . . . . . . . . . . . . . . . 9
5.8 TAX MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.9 PERSONAL PROPERTY; LIENS . . . . . . . . . . . . . . . . . . . . . .10
5.10 REAL PROPERTY. . . . . . . . . . . . . . . . . . . . . . . . . . .11
5.11 ACCOUNTS RECEIVABLE. . . . . . . . . . . . . . . . . . . . . . . .11
5.12 INVENTORIES. . . . . . . . . . . . . . . . . . . . . . . . . . . .12
5.13 INSURANCE POLICIES . . . . . . . . . . . . . . . . . . . . . . . .12
5.14 PERMITS AND LICENSES . . . . . . . . . . . . . . . . . . . . . . .12
5.15 CONTRACTS AND COMMITMENTS. . . . . . . . . . . . . . . . . . . . .13
5.16 CUSTOMERS AND SUPPLIERS. . . . . . . . . . . . . . . . . . . . . .13
5.17 LABOR, BENEFIT AND EMPLOYMENT AGREEMENT. . . . . . . . . . . . . .14
5.18 NO BREACH OF STATUTE, DECREE OR OTHER INSTRUMENT . . . . . . . . .15
5.19 COMPLIANCE WITH LAWS . . . . . . . . . . . . . . . . . . . . . . .16
5.20 LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
5.21 PATENTS, LICENSES AND TRADEMARKS . . . . . . . . . . . . . . . . .17
5.22 TRANSACTIONS WITH AFFILIATES . . . . . . . . . . . . . . . . . . .17
5.23 BANK ACCOUNTS. . . . . . . . . . . . . . . . . . . . . . . . . . .17
5.24 SCHEDULES INCORPORATED BY REFERENCE. . . . . . . . . . . . . . . .17
5.25 NO CONSENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . .17
5.26 CONDITION OF ASSETS. . . . . . . . . . . . . . . . . . . . . . . .18
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5.27 OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . .18
6. REPRESENTATIONS AND WARRANTIES OF XXXXXX AND MERGER SUBSIDIARY. . . . .18
6.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. . . . . . . . . . . .18
6.2 AUTHORIZATION OF AGREEMENT . . . . . . . . . . . . . . . . . . . . .19
6.3 VALID AND BINDING AGREEMENT. . . . . . . . . . . . . . . . . . . . .19
6.4 NO BREACH OF STATUTE OR CONTRACT . . . . . . . . . . . . . . . . . .19
6.5 BUSINESS AND FINANCIAL INFORMATION . . . . . . . . . . . . . . . . .19
6.6 XXXXXX SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . .20
6.7 INVESTMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
6.8 TAX MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
6.9 OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . .21
7. THE COMPANY'S OBLIGATIONS BEFORE THE CLOSING DATE . . . . . . . . . . .21
7.1 ACCESS TO INFORMATION. . . . . . . . . . . . . . . . . . . . . . . .21
7.2 CONDUCT OF BUSINESS IN NORMAL COURSE . . . . . . . . . . . . . . . .22
7.3 PRESERVATION OF BUSINESS AND RELATIONSHIPS . . . . . . . . . . . . .22
7.4 MAINTENANCE OF INSURANCE; ASSETS AND RECORDS . . . . . . . . . . . .22
7.5 CORPORATE MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . .22
7.6 OTHER TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . .23
8. ADDITIONAL AGREEMENTS OF THE PARTIES. . . . . . . . . . . . . . . . . .24
8.1 CONFIDENTIALITY. . . . . . . . . . . . . . . . . . . . . . . . . . .24
8.2 DUE DILIGENCE INVESTIGATION. . . . . . . . . . . . . . . . . . . . .24
8.3 ADDITIONAL AGREEMENTS AND INSTRUMENTS. . . . . . . . . . . . . . . .24
8.4 NON-INTERFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . .25
8.5 MANAGEMENT OF THE SURVIVING CORPORATION AND XXXXXX
FOLLOWING THE CLOSING DATE. . . . . . . . . . . . . . . . . . . . .25
9. CONDITIONS PRECEDENT TO XXXXXX'X PERFORMANCE. . . . . . . . . . . . . .26
9.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . .26
9.2 PERFORMANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
9.3 CERTIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . .26
9.4 RESOLUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
9.5 GOOD STANDING CERTIFICATES . . . . . . . . . . . . . . . . . . . . .26
9.6 ABSENCE OF LITIGATION. . . . . . . . . . . . . . . . . . . . . . . .26
9.7 CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
9.8 CONDITION OF PROPERTY. . . . . . . . . . . . . . . . . . . . . . . .27
9.9 NO MATERIAL ADVERSE CHANGE . . . . . . . . . . . . . . . . . . . . .27
9.10 SATISFACTORY DUE DILIGENCE INVESTIGATION. . . . . . . . . . . . . .27
9.11 EXECUTION AND DELIVERY OF EXHIBITS. . . . . . . . . . . . . . . . .27
9.12 PROCEEDINGS AND INSTRUMENTS SATISFACTORY. . . . . . . . . . . . . .27
9.13 CONSUMMATION OF ACQUISITIONS. . . . . . . . . . . . . . . . . . . .27
9.14 INVESTMENT BANKING FAIRNESS OPINION . . . . . . . . . . . . . . . .28
9.15 XXXXXXX BANK OF CENTRAL FLORIDA, N.A.'S CONSENT TO THE MERGER . . .28
9.16 EXECUTIVE EMPLOYMENT AGREEMENTS . . . . . . . . . . . . . . . . . .28
10. CONDITIONS PRECEDENT TO THE COMPANY'S PERFORMANCE. . . . . . . . . . .28
10.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . .28
10.2 PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
10.3 CERTIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . .28
10.4 RESOLUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
10.5 EXECUTION AND DELIVERY OF EXHIBITS. . . . . . . . . . . . . . . . .29
10.6 PROCEEDINGS AND INSTRUMENTS SATISFACTORY. . . . . . . . . . . . . .29
10.7 PERFORMANCE BY XXXXX XXXXXX . . . . . . . . . . . . . . . . . . . .29
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10.8 NO MATERIAL ADVERSE CHANGE . . . . . . . . . . . . . . . . . . . .29
10.9 APPROVAL OF EMPLOYMENT AGREEMENTS . . . . . . . . . . . . . . . .29
11. CONDITIONS PRECEDENT TO XXXXX XXXXXX'X PERFORMANCE . . . . . . . . . .29
11.1 DELIVERY OF AGREEMENTS . . . . . . . . . . . . . . . . . . . . . .29
12. CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
12.1 PLACE AND DATE OF CLOSING. . . . . . . . . . . . . . . . . . . . .29
12.2 ACTIONS AT CLOSING . . . . . . . . . . . . . . . . . . . . . . . .30
13. TERMINATION OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . .30
13.1 GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
13.2 EFFECT OF TERMINATION. . . . . . . . . . . . . . . . . . . . . . .30
14. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . .31
14.1 GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
14.2 LIMITATIONS ON CERTAIN INDEMNITY . . . . . . . . . . . . . . . . .31
14.3 CLAIMS FOR INDEMNITY . . . . . . . . . . . . . . . . . . . . . . .32
14.4 RIGHT TO DEFEND. . . . . . . . . . . . . . . . . . . . . . . . . .32
15. POST-CLOSING EVENTS. . . . . . . . . . . . . . . . . . . . . . . . . .33
15.1 ACCOUNTING COOPERATION . . . . . . . . . . . . . . . . . . . . . .33
16. COSTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
16.1 FINDER'S OR BROKER'S FEES. . . . . . . . . . . . . . . . . . . . .33
16.2 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
17. PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
17.1 PARTIES IN INTEREST. . . . . . . . . . . . . . . . . . . . . . . .33
17.2 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
18. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
18.1 AMENDMENTS AND MODIFICATIONS . . . . . . . . . . . . . . . . . . .35
18.2 NON-ASSIGNABILITY; BINDING EFFECT. . . . . . . . . . . . . . . . .35
18.3 SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . .35
18.4 ATTORNEYS' FEES . . . . . . . . . . . . . . . . . . . . . . . . .35
18.5 GOVERNING LAW; JURISDICTION . . . . . . . . . . . . . . . . . . .35
18.6 EFFECT OF HEADINGS. . . . . . . . . . . . . . . . . . . . . . . .35
18.7 ENTIRE AGREEMENT; WAIVERS. . . . . . . . . . . . . . . . . . . . .36
18.8 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . .36
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), entered into as of this
30TH day of DECEMBER, 1996, by and among XXXXXX INDUSTRIES, INC., a Florida
corporation having offices at 0000 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxx
00000 ("Xxxxxx"); XXXXXX ACQUISITION CORPORATION, a Delaware corporation having
offices at c/o National Corporate Research, Ltd., 0 Xxxx Xxxxxxxxxx Xxxxxx,
Xxxxx, Xxxxxxxx 00000 (the "Merger Subsidiary"); XXXXX XXXXXX, an individual
residing in Brevard County at c/o 0000 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxx 00000 ("Xxxxx Xxxxxx"); SMART CHOICE HOLDINGS, INC., a Delaware
corporation, having offices at 000 Xxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx Xxxxxx,
Xxxxxxx 00000 (the "Company"); XXXXXX X. XXXXXX, an individual residing in
Orange County at 000 Xxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx Xxxxxx, Xxxxxxx 00000
("Xxxxxx Xxxxxx"); and XXXXXX X. XXXXXX, an individual residing in Pinellas
County at c/o 000 Xxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx Xxxxxx, Xxxxxxx 00000
("Xxxxxx Xxxxxx").
W I T N E S S E T H:
WHEREAS, Xxxxxx, one of the largest aftermarket suppliers of Corvette
automobile parts and accessories in the United States, seeks to expand and
diversify its business; and
WHEREAS, the Company has been formed to engage primarily in the business of
the financed sales of new and used motor vehicles in the Southeastern United
States; and
WHEREAS, Xxxxxx, desiring to acquire the Company, has formed the Merger
Subsidiary, a wholly-owned subsidiary of Xxxxxx, which Merger Subsidiary will
statutorily merge with and into the Company (such merger being referred to
herein as the "Merger") and thereby vest title in all of the outstanding shares
of the Company in the name of Xxxxxx, making the Company a wholly-owned
subsidiary of Xxxxxx at Closing (as hereinafter defined), pursuant to and in
accordance with the terms and conditions of this Agreement; and
WHEREAS, Xxxxxx'x capital structure is as set forth in SCHEDULE 6.1,
attached hereto and incorporated herein ; and
WHEREAS, the Company's capital structure is as set forth in SCHEDULE 5.1
and SCHEDULE 5.4, attached hereto and incorporated herein; and
WHEREAS, the Merger shall constitute an "A" Reorganization structured as a
"reverse subsidiary merger" pursuant to Section 368(a)(2)(E) of the Internal
Revenue Code, as amended; and
WHEREAS, the Board of Directors and the stockholders of the Company, the
Board of Directors of Xxxxxx and the Board of Directors of the Merger Subsidiary
and Xxxxxx, as sole shareholder of the Merger Subsidiary, have all authorized
and approved the Merger and the consummation of the other transactions
contemplated by this Agreement, all on the terms and subject to the conditions
set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein set forth, the parties hereby covenant and agree
as follows:
1. THE MERGER
1.1 THE MERGER. At the time of the Closing on the Closing Date (as
hereinafter defined) and in accordance with the provisions of this Agreement and
the applicable provisions of the corporation laws of the jurisdiction in which
the Merger is to take place (in such instance, "Applicable Law"), the Merger
Subsidiary shall be merged with and into the Company, in accordance with the
terms and conditions of this Agreement and a certificate of merger in
substantially the form of EXHIBIT A annexed hereto, subject to such changes as
to form (but not substance) as may be required by Applicable Law, hereinafter
referred to as the "Certificate of Merger". The Company shall be the surviving
corporation of the Merger (the Company, in such capacity, being hereinafter
sometimes referred to as the "Surviving Corporation"). Thereupon, the separate
existence of the Merger Subsidiary shall cease, and the Company, as the
Surviving Corporation, shall continue its corporate existence under Applicable
Law under its current name, as a wholly-owned subsidiary of Xxxxxx.
1.2 EFFECTIVENESS OF THE MERGER. As soon as practicable upon or
after the satisfaction or waiver of the conditions precedent set forth in
Sections 9, 10 and 11 of this Agreement, the Merger Subsidiary and the Company
will execute an appropriate Certificate of Merger, and shall file or cause to be
filed such Certificate of Merger with the Secretary of State of the jurisdiction
in which the Merger Subsidiary and Company are incorporated; and the subject
Merger shall become effective as of the date set forth in the Certificate of
Merger, and the Closing shall be deemed to occur as of the date set forth in
Section 12 of this Agreement.
1.3 EFFECT OF THE MERGER. Upon the effectiveness of the Merger, (a)
the Surviving Corporation shall own and possess all assets and property of every
kind and description, and every interest therein, wherever located, and all
rights, privileges, immunities, powers, franchises and authority of a public as
well as of a private nature, of the Merger Subsidiary and Company (the
"Constituent Corporations"), and all obligations owed to, belonging to or due to
each of the Constituent Corporations, all of which shall be vested in the
Surviving Corporation pursuant to
2
Applicable Law without further act or deed, and (b) the Surviving Corporation
shall be liable for all claims, liabilities and obligations of the Constituent
Corporations, all of which shall become and remain the obligations of the
Surviving Corporation pursuant to Applicable Law without further act or deed.
1.4 SURVIVING CORPORATION. Upon the effectiveness of the Merger, the
Certificate of Incorporation and By-Laws of the Surviving Corporation shall be
identical to those of the Company as in effect immediately prior to the
effectiveness of such Merger. The directors and officers of both the Surviving
Corporation and Xxxxxx shall be modified on or after the Closing Date in
accordance with Section 8.5 hereafter.
1.5 STATUS AND CONVERSION OF THE COMPANY'S SHARES AND THE POTENTIAL
SECURITIES. Upon the effectiveness of the Merger:
(a) Each share of capital stock held by the Company as treasury
stock immediately prior to the effectiveness of the Merger shall be canceled and
extinguished, and no payment or issuance of any consideration shall be payable
or shall be made in respect thereof;
(b) Each share of common stock of the Merger Subsidiary
outstanding immediately prior to the effectiveness of the Merger shall be
converted into and shall become one (1) share of common stock of the Surviving
Corporation; and
(c) Each share of $.001 par value common stock of the Company
(the "Company Stock") issued and outstanding immediately prior to the
effectiveness of the Merger (excluding any shares as to which dissenters'
appraisal rights have been validly exercised and perfected and for which cash is
payable in accordance with applicable law) shall be canceled and extinguished
and converted into the right to receive one (1) share of Xxxxxx Class A Common
Stock, $.01 par value ("Xxxxxx Class A Common"); PROVIDED, HOWEVER that with
respect to the shares of Company Stock held by Xxxxxx Xxxxxx and the shares of
Company Stock held by Xxxxxx Xxxxxx (in lieu of the aforesaid one for one stock
exchange) there shall be delivered one-half of one (1) share of Xxxxxx Class B
Common Stock, $.01 par value ("Xxxxxx Class B Common") for each such share of
Company Stock. Notwithstanding any other provision in this Agreement Xxxxxx
shall issue nor more than 6,500,000 shares of Xxxxxx Class A Common or its
equivalent, taking into account the outstanding shares of Company Stock and
options, warrants, subscription rights, Convertible Securities, Exercisable
Securities and all other agreements by which the Company has agreed to issue
shares of Company capital stock; PROVIDED, HOWEVER, that no options, warrants or
rights to acquire shares of the Company Stock that vest or are exercisable
subsequent to a secondary offering of the Company's or Xxxxxx'x securities shall
be taken into account. Xxxxxx Class A Common and Xxxxxx Class B Common are
hereinafter collectively sometimes called "Xxxxxx Stock". Such consideration
3
shall be paid and delivered to the holders of all of the outstanding Company
Stock, upon surrender to the Surviving Corporation of the certificates
representing such shares of outstanding Company Stock at the time and place of
the Closing as provided in Section 12 of this Agreement.
(d) Each share of Company Stock that may be acquired upon the
conversion of the Convertible Securities (as hereinafter defined), or upon
exercise of the Exercisable Securities (as hereinafter defined) (the Convertible
Securities and the Exercisable Securities hereinafter sometimes referred to
collectively as the "Potential Securities"), whether or not such Potential
Securities are contingent, vested, or issued and outstanding immediately prior
to the effectiveness of the Merger, shall be modified and converted into a right
to receive the same amount of Xxxxxx Class A Common as the holders of the number
of shares of Company Stock deliverable upon such conversion or exercise would
have been entitled to receive if such conversion were to have occurred prior to
the Merger in lieu of the Company Stock, on the same terms and conditions as
originally agreed to between the Company and the holders of such Potential
Securities, pursuant to this Agreement. Such consideration payable upon
conversion or exercise of the Potential Securities shall be reserved by Xxxxxx
for issuance to the holders of such Potential Securities in accordance with the
terms of such Potential Securities, provided, however that for each one (1)
share of Company Stock issuable upon conversion or exercise of such Potential
Security the holder thereof shall receive instead and in lieu thereof one (1)
share of Xxxxxx Class A Common Stock. The term "Convertible Securities" shall
mean the Company's Series A Convertible Preferred Stock, Series B Convertible
Preferred Stock and the 12% Convertible Debentures identified in EXHIBIT B
attached hereto (said EXHIBIT B identifying the holders of the Convertible
Securities and the amount of Company Stock exercisable therefor). The term
"Exercisable Securities" shall mean the Company's stock options or any
warrants, as further identified in EXHIBIT C (said EXHIBIT C identifying the
option and/or warrant holders and the amount of Company Stock exercisable
therefor), attached hereto.
1.6 BOOKS AND RECORDS. On the Closing Date, the board of directors
of the Company shall direct its officers to deliver to Xxxxxx all of the stock
books, records and minute books of the Company, all financial and accounting
books and records of the Company, all tax returns and records of the Company,
and all supplier, client, customer, sales and other business records of the
Company.
1.7 DEFINITIONS.
(a) Wherever used in this Agreement, the term "Affiliate" means,
as respects any person or entity, any other person or entity that directly, or
indirectly through one or more
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intermediaries, controls, is controlled by, or is under common control with the
first person or entity.
2. COMPANY STOCKHOLDERS' AGREEMENTS.
2.1 INVESTMENT INTENT AND DISCLOSURE. Each shareholder entitled to
receive Xxxxxx Class A Common or Xxxxxx Class B Common shall be bound by the
terms of the Merger to execute and deliver to Xxxxxx an Agreement that concerns,
among other things, stockholders' investment intent and acknowledgment of (i)
disclosure made by Xxxxxx and (ii) transfer restrictions on the Xxxxxx Stock.
Such agreement shall be in a form mutually agreeable to the parties and the form
shall be attached hereto as EXHIBIT D at Closing.
3. XXXXX XXXXXX'X CONSIDERATION AND OBLIGATIONS.
3.1 ASSIGNMENT OF WARRANT AND OPTION RIGHTS. At the Closing and
except as set forth below, Xxxxx Xxxxxx shall assign any and all warrants or
options of Xxxxxx that he holds, as identified in EXHIBIT E attached hereto, and
relinquish any and all contracts rights related thereto. In exchange for the
assignment of the aforementioned warrants and options, Xxxxx Xxxxxx shall accept
the issuance of 5-year options to acquire 100,000 shares of Xxxxxx Class A
Common at $8.75 per share and 5-year options to acquire 50,000 shares of Xxxxxx
Class A Common at $10.00 per share (the "Xxxxx Xxxxxx Options") in the form
attached hereto as EXHIBIT F. Notwithstanding the foregoing, Xxxxx Xxxxxx shall
be entitled to retain the options and warrants specifically identified in
EXHIBIT G, attached hereto.
3.2 NEW EMPLOYMENT AGREEMENTS FOR XXXXX XXXXXX. Upon Closing, Xxxxx
Xxxxxx'x employment agreement with Xxxxxx shall be, by mutual consent of Xxxxxx
and Xxxxx Xxxxxx (as evidenced by this Agreement), terminated and deemed to be
of no further force and effect. A new employment agreement between Xxxxxx and
Xxxxx Xxxxxx (the "Employment Agreement") shall be executed, in substantially
the same form as EXHIBIT H attached hereto, employing Xxxxx Xxxxxx as the
chairman of the business unit that shall conduct the operations customarily
conducted by Xxxxxx prior to the Merger. Upon execution of this Agreement by
Xxxxx Xxxxxx, he shall be deemed to have made a knowing and voluntary waiver of
his right to convert any and all of his Class B Stock to Class A Stock, until
such time as there is sufficient Class A Stock available to permit such a
conversion.
3.3 XXXXX XXXXXX'X REGISTRATION RIGHTS. Subject to a registration
rights agreement dated even herewith (the "Xxxxx Xxxxxx Registration
Agreement"), a true and accurate copy of which is attached hereto as EXHIBIT I,
Xxxxx Xxxxxx shall be permitted to sell, in accordance with all applicable laws
or regulations governing the sale of such securities, up to 100,000 shares of
Xxxxxx Stock in any public offering of Xxxxxx Stock following the Merger.
Additionally, Xxxxx Xxxxxx, subject to
5
Xxxxx Xxxxxx'x Registration Agreement, shall be permitted to sell an additional
200,000 shares, pursuant to securities laws and regulations applicable to such
securities, in installments of up to 50,000 shares of the Xxxxxx Stock during
each three (3) month period thereafter, for a period not to exceed twelve (12)
months.
3.4 XXXXX XXXXXX GUARANTIES AND INDEMNIFICATION. Xxxxx Xxxxxx
currently guarantees, on behalf of Xxxxxx, certain loans as more particularly
identified in EXHIBIT J attached hereto (the "Loans"). In consideration for
Xxxxx Xxxxxx'x guaranties, Xxxxxx pays to Xxxxx Xxxxxx a quarterly fee in an
amount equal to two percent (2%) of the outstanding balance of the Loans in
accordance with Section 4 of the employment agreement between Xxxxx Xxxxxx and
Xxxxxx dated May 23, 1995, and as subsequently amended (the "Guaranty &
Employment Agreement"), a copy of the Guaranty & Employment Agreement is
attached hereto as EXHIBIT K. Following the Merger, Xxxxxx and the Surviving
Corporation shall use their best efforts to cause Xxxxx Xxxxxx to be released
from the liability associated with his guaranty of the Loans on or before May
30, 1997.
(a) Until such time as Xxxxx Xxxxxx is no longer a guarantor of
or is no longer contractually bound to guarantee any of the indebtedness due
pursuant to the Loans, Xxxxxx and the Surviving Corporation shall jointly and
severally indemnify and hold harmless Xxxxx Xxxxxx, his successors, and assigns
against any losses, claims, damages or liabilities (the "Claims") to which Xxxxx
Xxxxxx may become subject, insofar as such Claims (or actions in respect
thereof) arise out of or are based upon Xxxxx Xxxxxx'x guaranties of the Loans.
4. FURTHER ASSURANCES.
From time to time from and after the Closing, the parties shall
execute and deliver, or cause to be executed and delivered, any and all such
further agreements, certificates and other instruments, and shall take or cause
to be taken any and all such further action, as any of the parties may
reasonably deem necessary or desirable in order to carry out the intent and
purposes of this Agreement.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company, Xxxxxx Xxxxxx and Xxxxxx Xxxxxx, jointly and severally,
hereby represent and warrant to the best of their knowledge to Xxxxxx as follows
(and with respect to the representations and warranties contained in Sections
5.3, 5.6 through 5.25, such representations and warranties respecting the
Company shall be deemed to be representations and warranties as to the Company
and its subsidiaries and each of the companies described in SCHEDULE 5.5
(collectively, the "Target Companies"); PROVIDED, HOWEVER, that as to the Target
Companies, any and all representations and warranties are based solely on and
expressly limited to those representations, warranties, schedules and
6
exhibits attached to or contained in the respective purchase agreements between
the Company and each of the Target Companies):
5.1 TITLE TO THE STOCK. The stockholders of the Company have good,
valid and marketable title to the Company Stock issued and outstanding, and all
of such Company Stock has been duly authorized and validly issued and is fully
paid and non-assessable, and is (and on the Closing Date will be) free and clear
of all pledges, liens, claims, charges, options, calls, encumbrances,
restrictions and assessments whatsoever (except any restrictions which may be
created by operation of state or federal securities laws). All issued and
outstanding shares of capital stock of the Company are owned of record and
beneficially as set forth on SCHEDULE 5.1 annexed hereto.
5.2 VALID AND BINDING AGREEMENT.
(a) The execution, delivery and performance of this Agreement
and the consummation of the Merger and the other transactions contemplated
hereby by the Company have been duly and validly authorized by the Board of
Directors and the stockholders of the Company, and the Company has the full
legal right, power and authority to execute and deliver this Agreement, to
perform its obligations hereunder, and to consummate the transactions
contemplated hereby. This Agreement constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except to the extent limited by bankruptcy, insolvency,
reorganization and other laws affecting creditors' rights generally, and except
that the remedy of specific performance or similar equitable relief is available
only at the discretion of the court before which enforcement is sought.
(b) The execution and delivery by the Company of this Agreement
and the performance by the Company of its obligations hereunder will not violate
any provision of law, any order of any Court or other agency of government, the
Certificate of Incorporation, Bylaws or other governing document of the Company,
or any judgment, award, decree, indenture, agreement, permit or other instrument
to which the Company is a party, or by which the Company or its assets or
properties are bound or affected, or conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under, any such
indenture, agreement, permit or other instrument, or result in a creation or
imposition of any lien, charge, security interest or encumbrance of any nature
whatsoever upon the Company or its assets.
5.3 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company: (a)
is a corporation duly organized, validly existing and in good standing under the
laws of its state of incorporation; (b) has all necessary corporate power and
authority to carry on its business and to own, lease and operate its properties;
and (c) except as and to the extent set forth in
7
SCHEDULE 5.3 annexed hereto, is qualified to do business as a foreign
corporation in each foreign jurisdiction where such qualification is required by
law. True and complete copies of the Certificate of Incorporation and By-Laws
of the Company (including all amendments thereto), and a correct and complete
list of the officers and directors of the Company, are annexed hereto as part of
SCHEDULE 5.3.
5.4 CAPITAL STRUCTURE; STOCK OWNERSHIP.
(a) The authorized capital stock of the Company is as set forth
in its Certificate of Incorporation (as amended) contained in SCHEDULE 5.3. The
record and beneficial owners of the Company Stock are as set forth in SCHEDULE
5.1 and no other shares of capital stock of the Company are issued or
outstanding.
(b) There are no outstanding subscriptions, options, rights,
warrants, convertible securities or other agreements or calls, demands or
commitments, except as set forth in SCHEDULE 5.4, obligating the Company to
issue, transfer or purchase any shares of its capital stock, or obligating any
stockholder to transfer any shares of Company Stock owned by such stockholder.
No shares of capital stock of the Company are reserved for issuance pursuant to
stock options, warrants, agreements or other rights to purchase capital stock,
except as set forth in SCHEDULE 5.4.
5.5 SUBSIDIARIES AND INVESTMENTS. The Company does not own, directly
or indirectly, any stock or other equity securities of any corporation or
entity, or has any direct or indirect equity or ownership interest in any
person, firm, partnership, corporation, venture or business other than the
business conducted by the Company, except as contained in SCHEDULE 5.5.
5.6 FINANCIAL INFORMATION. SCHEDULE 5.6 annexed hereto contains:
(i) certain financial information pertaining to the Company and, each of the
Target Companies and the Company subsidiaries; (ii) a list of the outstanding
principal balance of and approximate accrued interest on all indebtedness
including without limitation accounts payable and loans and/or notes payable of
the Company as of November 30, 1996; (iii) a list of all obligations of the
Company to any of the stockholders of the Company and/or any of their respective
Affiliates on the date hereof; (iv) a list of all obligations of the Company
guaranteed by any of the stockholders of the Company on the date hereof, and the
terms of such guaranties; and (v) a list reflecting the nature and amount of all
obligations owed to the Company on the date hereof by any of the stockholders of
the Company and/or any of their respective Affiliates. The information and
material set forth in SCHEDULE 5.6 is true, correct and complete and when taken
as an entirety fairly presents, in all material respects the financial condition
and results of operation therein set forth.
8
5.7 NO MATERIAL CHANGES. Except as and to the extent depicted in
SCHEDULE 5.7 annexed hereto (which Schedule may make reference to any other
Schedule hereto), since November 30, 1996, the business of the Company has
continued to be operated only in the ordinary course, and there has not been:
(a) Any material change in the financial condition, operations
or business of the Company from that depicted in SCHEDULE 5.6, or any material
transaction or commitment effected or entered into outside of the normal course
of the Company's business nor inconsistent with the Company's past practice ;
(b) Any damage, destruction or loss, whether covered by
insurance or not, materially and adversely affecting the business, operations,
assets, properties, financial condition or prospects of the Company;
(c) Any declaration, setting aside or payment of any dividend or
other distribution with respect to the Company Stock, any other payment of any
kind by the Company to any of the stockholders of the Company or any of their
respective Affiliates outside of the ordinary course of business nor
inconsistent with the Company's past practice, any forgiveness of any debt or
obligation owed to the Company by any of the stockholders of the Company or any
of their respective Affiliates, or any direct or indirect redemption, purchase
or other acquisition by the Company of any capital stock of the Company; or
(d) Any other event or condition arising from or out of the
operation of the Company which has or may materially and adversely affect the
business, financial condition, results of operations or prospects of the
Company.
5.8 TAX MATTERS.
(a) TAX RETURNS AND AUDITS.
(i) Except as and to the extent disclosed in SCHEDULE 5.8
annexed hereto: (i)on the date hereof and on the Closing Date, all federal,
state and local tax returns and tax reports required to be filed by the Company
on or before the date of this Agreement or the Closing Date, as the case may be,
have been and will have been timely filed with the appropriate governmental
agencies in all jurisdictions in which such returns and reports are required to
be filed; (ii) all federal, state and local income, franchise, sales, use,
property, excise and other taxes (including interest and penalties and including
estimated tax installments where required to be filed and paid) due from or with
respect to the Company as of the date hereof and as of the Closing Date have
been and will have been fully paid, and appropriate accruals shall have been
made on the Company's books for taxes not yet due and payable; (iii) as of the
Closing Date,
9
all taxes and other assessments and levies which the Company is required by law
to withhold or to collect on or before the Closing Date will have been duly
withheld and collected, and will have been paid over to the proper governmental
authorities to the extent due and payable on or before the Closing Date; and
(iv) there are no outstanding or pending claims, deficiencies or assessments for
taxes, interest or penalties with respect to any taxable period of the Company.
At and after the Closing Date, the Company will not have any liability for any
federal, state or local income tax with respect to any taxable period ending on
or before the Closing Date, except as and to the extent disclosed in SCHEDULE
5.8. Discretionary decisions made by Xxxxxx and its management with respect to
filing or amending any tax returns of the Company concerning periods ended on or
prior to the Closing Date, which decisions are not required under applicable law
and which decisions result in additional liability to the Company other than as
disclosed in this Agreement or the Schedules annexed hereto, shall not result in
any breach of representations and warranties contained in this Section 5.8(a).
(ii) There are no audits deficiencies, claims, actions,
suits, proceedings or investigations pending with respect to any federal, state
or local tax returns of the Company, and no waivers of statutes of limitations
have been given or requested with respect to any tax years or tax filings of the
Company.
(iii) The Company has not executed or entered into (and,
prior to the Closing, will not execute or enter into) with the Internal Revenue
Service or any other taxing authority (A) any agreement or other document
extending or having the effect of extending the period for assessments or
collection of any taxes for which the Company would be liable or (B) a closing
agreement pursuant to Section 7121 of the Internal Revenue Code of 1986, as
amended (the "Code"), or any predecessor provision thereof or any similar
provision of foreign, state or local tax law that relates to the assets or
operations of the Company.
(iv) The Company is not a party to any agreement, contract
or arrangement that would result, by reason of the consummation of any of the
transactions contemplated herein, separately or in the aggregate, in the payment
of any "excess parachute payment" within the meaning of Section 280G of the
Code.
(b) SUBCHAPTER S STATUS. Neither the Company nor any of its
stockholders, with respect to the Company, have applied for qualification as an
"S Corporation" as such term is defined in the Code and regulations promulgated
thereunder.
5.9 PERSONAL PROPERTY; LIENS. The Company has and owns good and
marketable title to all of its personal property, free and clear of all liens,
pledges, claims, security interests and encumbrances whatsoever, except for the
following (all of which are sometimes referred to as "Permitted Liens"): (a)
liens
10
securing the Company's indebtedness for money borrowed as reflected in SCHEDULE
5.6, or pursuant to the security agreements listed in SCHEDULE 5.9 annexed
hereto; (b) liens securing the deferred purchase price of machinery, equipment,
vehicles and/or other fixed assets, as indicated on SCHEDULE 5.9; (c) liens for
current taxes not yet due and payable or which are being contested in good faith
by appropriate proceedings, each of which is listed in SCHEDULE 5.9; and (d)
liens, pledges, claims, security interests, encumbrances, mortgages, conditions
or restrictions which are not, individually or in the aggregate, material in
character or amount and do not interfere with the use made or presently proposed
to be made of any such property. All leases of personal property of the Company
are valid and binding in accordance with their respective terms and there is not
under any of such leases any existing default, or any condition, event or act
which with notice or lapse of time or both would constitute such a default, nor
would consummation of the transactions contemplated hereby result in a default
or any such condition, event or act.
5.10 REAL PROPERTY.
(a) The Company does not own or have any interest of any kind
(whether ownership, lease or otherwise) in any real property except to the
extent of the Company's leasehold interest under the lease for its business
premises, and true and complete copies of all real property leases (including
all amendments thereto) to which the Company is a party in any capacity are
annexed hereto as SCHEDULE 5.10 (the "Leases").
(b) The Company (and, to the best of the Company's knowledge,
the landlord thereunder) is presently in compliance with all of its obligations
under the Leases, and the premises leased thereunder are in good condition
(reasonable wear and tear excepted), are adequate for the operation of the
Company's business as presently conducted, and a default, termination, or
modification of currently effective payment or other terms thereunder will not
be effected as a result of consummation of the Merger and the transactions
contemplated by this Agreement. The Company has not received any notice of any
violation of any applicable zoning or building regulation, ordinance or other
law, order, regulation or requirement with respect to the property subject to
the Leases. All buildings used in the operations of the Company substantially
conform with all applicable ordinances, codes, regulations and requirements, and
no law presently in effect or condition precludes or restricts continuation of
the present use of such properties.
5.11 ACCOUNTS RECEIVABLE. All accounts receivable shown in SCHEDULE
5.6, and all accounts receivable thereafter created or acquired by the Company
prior to the Closing Date (the "Accounts"), have arisen or will arise in the
ordinary course of the Company's business. To the best knowledge of the Company,
there is not any dispute as to the validity or collectibility of such accounts
receivable, except to the extent adequately reserved
11
for and set forth in SCHEDULE 5.6 hereto and none of such accounts receivables
have been assigned or pledged, except to the extent set forth in SCHEDULE 5.11,
to any other person, firm or corporation or is subject to any right of set-off
in respect of any obligations of the Company.
5.12 INVENTORIES. All inventories shown on the financial statements
set forth in SCHEDULE 5.6, and all inventories thereafter created or acquired by
the Company prior to the Closing Date, consist of items which are of a quality
and quantity which are useable in the ordinary course of the Company's business.
5.13 INSURANCE POLICIES. SCHEDULE 5.13 annexed hereto contains a
true and correct schedule of all insurance coverage held by the Company
concerning its business and properties; and except as set forth on SCHEDULE 5.13
such coverage insures all of the Company's assets for the full replacement cost
thereof (net of reasonable deductibles), and are adequate for the normal
operation of the Company's businesses. All premiums with respect to such
policies covering all periods up to and including the date of this Agreement
have been paid, and will be paid on and as of the Closing Date, and no notice of
cancellation or termination has been received with respect to any such policy.
All such policies are in full force and effect.
5.14 PERMITS AND LICENSES. Except as set forth in SCHEDULE 5.14
annexed hereto, the Company possesses all required permits, licenses and/or
franchises, from whatever governmental authorities or agencies (domestic and/or
foreign) requiring the same and having jurisdiction over the Company, necessary
in order to operate its business in the manner presently conducted, all of which
permits, licenses and/or franchises are valid, current and in full force and
effect; No proceeding is pending or, to the knowledge of the Company, threatened
to revoke or limit any of such permits, licenses or franchises; and none of such
permits, licenses or franchises will be voided, revoked or terminated, or
voidable, revocable or terminable, upon and by reason of the Merger and
consummation of the transaction contemplated by this Agreement.
12
5.15 CONTRACTS AND COMMITMENTS.
(a) SCHEDULE 5.15 annexed hereto lists all material contracts,
leases, commitments, indentures and other agreements to which any Company is a
party (collectively, "Material Contracts"), except that SCHEDULE 5.15 need not
list any such agreement that is listed on any other Schedule hereto, or was
entered into in the ordinary course of the business of the Company and that, in
any case: (i) is for the purchase of supplies or other inventory items in the
ordinary course of business; (ii) is related to the purchase or lease of any
capital asset involving aggregate payments of less than $25,000.00 per annum; or
(iii) may be terminated without penalty, premium or liability by the subject
Company on not more than thirty (30) days' prior written notice.
(b) To the best of the Company's knowledge, except as set forth
in SCHEDULE 5.15: (i) all Material Contracts are in full force and effect; (ii)
the Company has not received any written notice that any Material Contract is in
material breach or default or is now subject to any condition or event which has
occurred and which, after notice or lapse of time or both, would constitute a
material default by any party under any such Material Contract; and (iii) none
of the Material Contracts will be voided, revoked or terminated, or voidable,
revocable or terminable, upon and by reason of the Merger and the consummation
of the transactions contemplated by this Agreement.
(c) To the best of the Company's knowledge, no purchase
commitment by the Company is in excess of the normal, ordinary and usual
requirements of the business of the Company.
(d) Except for the Leases and otherwise as set forth in SCHEDULE
5.15, the Company does not have any outstanding contracts or commitments that
are not cancelable by the Company without penalty, premium or liability (for
severance or otherwise) on less than thirty (30) days' prior written notice.
(e) There is no outstanding power of attorney granted by the
Company to any person, firm or corporation for any purpose whatsoever.
5.16 CUSTOMERS AND SUPPLIERS. The Company has not received any
written notice of any existing, announced or anticipated changes in the policies
of any material suppliers or referral sources which will materially, adversely
affect the business presently being conducted by the Company. The Company has
not lost or been notified that it will lose, and no customer has notified the
Company that it would, in the event of the consummation of the transactions
contemplated by this Agreement, lose, any customer (or any group of related
customers) that accounted for more than $25,000 of the aggregate revenues of the
13
Company for its last full fiscal year or the interim period from the date of its
last full fiscal year through November 30, 1996.
5.17 LABOR, BENEFIT AND EMPLOYMENT AGREEMENT.
(a) Except as set forth in SCHEDULE 5.17 annexed hereto, the
Company is not a party to (i) any collective bargaining agreement or other labor
agreement, or (ii) any agreement with respect to the employment or compensation
of any non-hourly and/or non-union employee(s) which is not terminable without
penalty by the Company on not more than thirty (30) days' prior written notice.
(b) No union is now certified or, to the best of the Company's
knowledge, claims to be certified as a collective bargaining agent to represent
any employees of the Company, and there are no labor disputes existing or, to
the best of the Company's knowledge, threatened, involving strikes, slowdowns,
work stoppages, job actions or lockouts of any employees of the Company. No
labor organization or group of employees of the Company has made a pending
demand for recognition, and there are no representation proceedings or petitions
seeking a representation proceeding presently pending or, to the knowledge of
the Company, threatened to be brought or filed with the National Labor Relations
Board or any other labor relations tribunal.
(c) There are no unfair labor practice charges or petitions for
election pending or being litigated before the National Labor Relations Board or
any other federal or state labor commission relating to any employees of any
Company. The Company has not received any written notice of any actual or
alleged violation of any law, regulation, order or contract term affecting the
collective bargaining rights of employees, equal opportunity in employment, or
employee health, safety, welfare, or wages and hours, nor is the Company aware
that any such violation is threatened to be brought or filed.
(d) With respect to any "multi-employer plan" (as defined in
Section 3(37) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) to which the Company has at any time been required to make
contributions, the Company has not, at any time on or after April 29, 1980,
suffered or caused any "complete withdrawal" or "partial withdrawal" (as such
terms are respectively defined in Sections 4203 and 4205 of ERISA) therefrom on
its part.
(e) Except as disclosed in SCHEDULE 5.17, the Company does not
maintain, or have any liabilities or obligations of any kind with respect to,
any bonus, deferred compensation, pension, profit sharing, retirement or other
such benefit plan, and does not have any potential or contingent liability in
respect of any actions or transactions relating to any such plan other than to
make contributions thereto if, as and when due in respect of periods subsequent
to the date hereof. Without
14
limitation of the foregoing, (i) the Company has made all required contributions
to or in respect of any and all such benefit plans, (ii) no "accumulated funding
deficiency" (as defined in Section 412 of the Internal Revenue Code of 1986, as
amended (the "Code")) has been incurred in respect of any of such benefit plans,
and the present value of all vested accrued benefits thereunder does not, on the
date hereof, exceed the assets of any such plan allocable to the vested accrued
benefits thereunder, (iii) there has been no "prohibited transaction" (as
defined in Section 4975 of the Code) with respect to any such plan, and no
transaction which could give rise to any tax or penalty under Section 4975 of
the Code or Section 502 of ERISA, and (iv) there has been no "reportable event"
(within the meaning of Section 4043(b) of ERISA) with respect to any such plan.
All of such plans which constitute, are intended to constitute, or have been
treated by the Company as "employee pension benefit plans" or other plans within
Section 3 of ERISA have been determined by the Internal Revenue Service to be
"qualified" under Section 401(a) of the Code, and have been administered and are
in compliance with ERISA and the Code; and, except such as might arise by reason
of the occurrence of the Merger, the Company has no knowledge of any state of
facts, conditions or occurrences such as would impair the "qualified" status of
any of such plans.
(f) Except for the group insurance programs and any other
insurance listed in SCHEDULE 5.17, the Company does not maintain any medical,
health, life or other employee benefit insurance programs or any welfare plans
(within the meaning of Section 3(1) of ERISA) for the benefit of any current or
former employees, and, except as required by statute or governmental regulation,
the Company does not have any liability, fixed or contingent, for health or
medical benefits to any former employee.
5.18 NO BREACH OF STATUTE, DECREE OR OTHER INSTRUMENT. Except as set
forth in SCHEDULE 5.18 annexed hereto: (i) neither the execution and delivery
of this Agreement by the Company, nor the performance of or compliance with the
terms and provisions of this Agreement on the part of the Company, will violate
or conflict with any term of the Certificate of Incorporation or By-Laws of the
Company or any statute, law, rule or regulation of any governmental authority
affecting the existing business of the Company, or will at the Closing Date
conflict with, result in a breach of, or constitute a default under, any of the
terms, conditions or provisions of any judgment, order, award, injunction,
decree, contract, lease, agreement, indenture or other instrument to which the
Company is a party or by which the Company is bound; (ii) no consent,
authorization or approval of or filing with any governmental authority or
agency, or any third party, will be required on the part of the Company in
connection with the consummation of the transactions contemplated hereby; and
(iii) the Company will not be required, whether by law, regulation or
administrative
15
practice, to reapply for or refile to obtain any of the licenses, permits or
other authorizations presently held by the Company and required for the
operation of its business as conducted on the date hereof.
5.19 COMPLIANCE WITH LAWS.
(a) The Company is, and has been at all times subsequent to its
incorporation, in compliance with all domestic, foreign, federal, state, local
and municipal laws and ordinances and governmental rules and regulations, and
all requirements of insurance carriers, applicable to its business, affairs,
properties or assets.
(b) Neither the Company, nor to the best of the Company's
knowledge, any of the Company's directors, officers or employees, has received
any written notice of default or violation, nor is the Company, or to the best
of the Company's knowledge, any of the Company's directors, officers or
employees, in default or violation, with respect to any judgment, order, writ,
injunction, decree, demand or assessment issued by any court or any federal,
state, local, municipal or other governmental agency, board, commission, bureau,
instrumentality or department, domestic or foreign, relating to any aspect of
the Company's business, affairs, properties or assets. Neither the Company, nor
to the best of the Company's knowledge, any of the Company's directors, officers
or employees, has received written notice of, been charged with, or is under
investigation with respect to, any violation of any provision of any federal,
state, local, municipal or other law or administrative rule or regulation,
domestic or foreign, relating to any aspect of the Company's business, affairs,
properties or assets, which violation would have a material adverse effect on
the business, financial condition, results of operations or prospects of the
Company.
(c) SCHEDULE 5.19 sets forth the date(s) of the last known
audits or inspections (if any) of the Company conducted by or on behalf of the
Environmental Protection Agency, the Occupational Safety and Health
Administration, and any other governmental and/or quasi-governmental agency
(federal, state and/or local).
5.20 LITIGATION. Except as disclosed in SCHEDULE 5.20 annexed
hereto, there is no suit, action, arbitration, or legal, administrative or other
proceeding, or governmental investigation pending, or to the best knowledge of
the Company, threatened, by or against the Company or any of its assets or
properties. The Company is not aware of any state of facts, events, conditions
or occurrences which might properly constitute grounds for or the basis of any
suit, action, arbitration, proceeding or investigation against or with respect
to the Company.
16
5.21 PATENTS, LICENSES AND TRADEMARKS. SCHEDULE 5.21 annexed hereto
correctly sets forth a list and brief description of the nature and ownership
of: (a) all patents, patent applications, copyright registrations and
applications, registered trade names, and trademark registrations and
applications, both domestic and foreign, which are presently owned, filed or
held by the Company or any of the Company's directors, officers, stockholders or
employees and which in any way relate to or are used in the business of the
Company; (b) all licenses, both domestic and foreign, which are owned or
controlled by the Company and/or any of the Company's directors, officers,
stockholders or employees and which in any way relate to or are used in the
business of the Company; and (c) all franchises, licenses and/or similar
arrangements granted to the Company by others and/or to others by the Company.
None of the patents, patent applications, copyright registrations or
applications, registered trade names, trademark registrations or applications,
franchises, licenses or other arrangements set forth or required to be set forth
in SCHEDULE 5.21 is subject to any pending challenge known to the Company.
5.22 TRANSACTIONS WITH AFFILIATES. Except as set forth on SCHEDULE
5.22, no material asset employed in the business of the Company is owned by,
leased from or leased to any of the stockholders of the Company, any of their
respective Affiliates, members of their families or any partnership, corporation
or trust for their benefit, or any other officer, director or employee of the
Company or any Affiliate of the Company. Except as set forth on SCHEDULE 5.22,
no director, officer or shareholder of the Company, or any of their respective
Affiliates, owns, directly or indirectly, or has an ownership interest in (i)
any business (corporate or otherwise) which is a party to any business
arrangements or relationships of any kind with the Company, or (ii) any business
(corporate or otherwise) which conducts the same business as, or business
similar to, the business conducted by the Company.
5.23 BANK ACCOUNTS. Annexed hereto as SCHEDULE 5.23 is a correct and
complete list of all bank accounts and safe deposit boxes maintained by or on
behalf of the Company, with indication of all persons having signatory, access
or other authority with respect thereto.
5.24 SCHEDULES INCORPORATED BY REFERENCE. The making of any
recitation in any Schedule hereto shall be deemed to constitute a representation
and warranty that such recitation is an accurate statement and disclosure of the
information required by the corresponding Section(s) of this Agreement, as, to
the extent, and subject to the qualifications and limitations, set forth in such
corresponding Section(s).
5.25 NO CONSENTS. No consents to the transaction contemplated in
this Agreement are required other than as set forth in SCHEDULE 5.25, which, in
the absence of such consents,
17
will result in a default under any leases or contracts (including without
limitation loan agreements or other debt instruments) to which the Company is a
party, or will result in an acceleration of any obligations of the Company.
5.26 CONDITION OF ASSETS. All tangible personal property, fixtures,
machinery and equipment comprising the assets of the Company are (i) in a
reasonable state of repair (ordinary wear and tear excepted) and operating
condition and are suitable for the purposes for which they are being used and
(ii) substantially conform with all applicable ordinances, codes, regulations
and requirements, including without limitation, all applicable ordinances,
codes, regulations and requirements relating to the environment or occupational
safety, and no law presently in effect or condition precludes or materially
restricts continuation of the present use of such properties.
5.27 OTHER INFORMATION. None of the information furnished by the
Company in this Agreement, the Exhibits hereto, the Schedules identified herein,
or in any certificate or other document to be executed or delivered pursuant
hereto by the Company at or prior to the Closing Date, is, or on the Closing
Date will be, false or misleading or contains, or on the Closing Date will
contain, any misstatement of material fact, or omits, or on the Closing Date
will omit, to state any material fact required to be stated in order to make the
statements therein not misleading in light of the circumstances under which they
were made.
6. REPRESENTATIONS AND WARRANTIES OF XXXXXX AND MERGER SUBSIDIARY.
Xxxxxx and Merger Subsidiary hereby represent and warrant to the
Company and each of its stockholders, as intended third party beneficiaries
hereunder, as follows:
6.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION.
(a) Xxxxxx is a corporation duly organized, validly existing and
in good standing under the laws of the State of Florida, with all necessary
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder, and to consummate the transactions contemplated hereby.
Xxxxxx'x capital structure, including all issued and outstanding shares of
Xxxxxx Stock, any options, warrants, subscriptions, rights, convertible
securities or other agreements or call, demands or commitments is as set forth
in SCHEDULE 6.1. There are no other securities or rights to acquire securities
of Xxxxxx except as set forth on SCHEDULE 6.1.
(b) The Merger Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of the state of Delaware,
with all necessary power and authority to consummate the Merger with the Company
as contemplated hereby.
18
The Merger Subsidiary is a wholly-owned subsidiary of Xxxxxx, and will have no
material assets or liabilities at the time of the Closing.
6.2 AUTHORIZATION OF AGREEMENT. The execution, delivery and
performance of this Agreement and the consummation of the Merger and the other
transactions contemplated hereby by Xxxxxx have been duly and validly authorized
by the Board of Directors of Xxxxxx; and Xxxxxx has (and, at the time of the
Closing, the Merger Subsidiary will have) the full legal right, power and
authority to execute and deliver this Agreement, to perform their respective
obligations hereunder, and to consummate the transactions contemplated hereby.
No further corporate authorization is necessary on the part of Xxxxxx or Merger
Subsidiary to consummate the transactions contemplated hereby.
6.3 VALID AND BINDING AGREEMENT. This Agreement, when executed and
delivered by Xxxxxx, constitutes and will constitute the legal, valid and
binding obligations of Xxxxxx, enforceable against Xxxxxx in accordance with its
respective terms, except to the extent limited by bankruptcy, insolvency,
reorganization and other laws affecting creditors' rights generally, and except
that the remedy of specific performance or similar equitable relief is available
only at the discretion of the court before which enforcement is sought.
6.4 NO BREACH OF STATUTE OR CONTRACT. Neither the execution and
delivery of this Agreement by Xxxxxx and Merger Subsidiary, nor compliance with
the terms and provisions of this Agreement on the part of Xxxxxx or Merger
Subsidiary, will: (a) violate any statute or regulation of any governmental
authority, domestic or foreign, affecting Xxxxxx or Merger Subsidiary; (b)
require the issuance of any authorization, license, consent or approval of any
federal or state governmental agency; or (c) conflict with or result in a breach
of any of the terms, conditions or provisions of any judgment, order,
injunction, decree, note, indenture, loan agreement or other agreement or
instrument to which Xxxxxx or Merger Subsidiary is a party, or by which Xxxxxx
or Merger Subsidiary is bound, or constitute a default thereunder.
6.5 BUSINESS AND FINANCIAL INFORMATION. The financial statements and
other information contained in the most recent prospectus, annual report,
quarterly report and current report on Form 8-K of Xxxxxx as filed with the
Securities and Exchange Commission (the "SEC") are correct and complete in all
material respects, as of their respective dates and as amended through the date
hereof and the financial statements included therein present fairly the
consolidated financial position of Xxxxxx, as of their respective dates and as
amended through the date hereof, in conformity with generally accepted
accounting principles consistently applied (subject, in the case of unaudited
statements, to the absence of footnote disclosures and to customary fiscal year-
end audit adjustments which will not,
19
individually or in the aggregate, be material to the consolidated financial
condition of Xxxxxx and its subsidiaries). Since the date of the last of such
reports, there has been no material adverse change in the financial condition or
operations of Xxxxxx from that reflected in the financial statements included in
such reports, except as set forth on SCHEDULE 6.5 hereto.
6.6 XXXXXX SHARES. When transferred or issued to the stockholders of
the Company or the holders of the Potential Securities pursuant to Section 2
above, all the Xxxxxx Shares delivered to the stockholders shall be duly
authorized, validly issued and fully paid and non-assessable, and free and clear
of all pledges, liens, claims, charges, options, calls, encumbrances,
restrictions and assessments whatsoever (except any restrictions which may be
created by operation of state or federal securities laws).
6.7 INVESTMENT. Xxxxxx will be acquiring ownership of the outstanding
capital stock of the Surviving Corporation for its own account, for investment
purposes only, and not with a view to the resale or distribution thereof.
6.8 TAX MATTERS.
(a) TAX RETURNS AND AUDITS.
(i) Except as and to the extent disclosed in SCHEDULE 6.8
annexed hereto: (i)on the date hereof and on the Closing Date, all federal,
state and local tax returns and tax reports required to be filed by Xxxxxx on or
before the date of this Agreement or the Closing Date, as the case may be, have
been and will have been timely filed with the appropriate governmental agencies
in all jurisdictions in which such returns and reports are required to be filed;
(ii) all federal, state and local income, franchise, sales, use, property,
excise and other taxes (including interest and penalties and including estimated
tax installments where required to be filed and paid) due from or with respect
to the Xxxxxx as of the date hereof and as of the Closing Date have been and
will have been fully paid, and appropriate accruals shall have been made on the
Xxxxxx'x books for taxes not yet due and payable; (iii) as of the Closing Date,
all taxes and other assessments and levies which the Xxxxxx is required by law
to withhold or to collect on or before the Closing Date will have been duly
withheld and collected, and will have been paid over to the proper governmental
authorities to the extent due and payable on or before the Closing Date; and
(iv) there are no outstanding or pending claims, deficiencies or assessments for
taxes, interest or penalties with respect to any taxable period of Xxxxxx. At
and after the Closing Date, Xxxxxx will not have any liability for any federal,
state or local income tax with respect to any taxable period ending on or before
the Closing Date, except as and to the extent disclosed in SCHEDULE 6.8.
20
(ii) There are no audits deficiencies, claims, actions,
suits, proceedings or investigations pending with respect to any federal, state
or local tax returns of Xxxxxx, and no waivers of statutes of limitations have
been given or requested with respect to any tax years or tax filings of Xxxxxx.
(iii)Xxxxxx has not executed or entered into (and, prior to
the Closing, will not execute or enter into) with the Internal Revenue Service
or any other taxing authority (A) any agreement or other document extending or
having the effect of extending the period for assessments or collection of any
taxes for which Xxxxxx would be liable or (B) a closing agreement pursuant to
Section 7121 of the Internal Revenue Code of 1986, as amended (the "Code"), or
any predecessor provision thereof or any similar provision of foreign, state or
local tax law that relates to the assets or operations of Xxxxxx.
(iv) Xxxxxx is not a party to any agreement, contract or
arrangement that would result, by reason of the consummation of any of the
transactions contemplated herein, separately or in the aggregate, in the payment
of any "excess parachute payment" within the meaning of Section 280G of the
Code.
(b) SUBCHAPTER S STATUS. Neither Xxxxxx nor any of its
shareholders, with respect to Xxxxxx, have applied for qualification as an "S
Corporation" as such term is defined in the Code and regulations promulgated
thereunder.
6.9 OTHER INFORMATION. None of the information furnished by
Xxxxxx in this Agreement, the Exhibits hereto, the Schedules identified herein,
or in any certificate or other document to be executed or delivered pursuant
hereto by Xxxxxx at or prior to the Closing Date, is, or on the Closing Date
will be, false or misleading or contains, or on the Closing Date will contain,
any misstatement of material fact, or omits, or on the Closing Date will omit,
to state any material fact required to be stated in order to make the statements
therein not misleading in light of the circumstances under which they were made.
7. THE COMPANY'S OBLIGATIONS BEFORE THE CLOSING DATE.
The Company covenants and agrees that, from the date hereof until the
Closing Date:
7.1 ACCESS TO INFORMATION. The Company shall permit Xxxxxx and its
counsel, accountants and other representatives, to have reasonable access during
normal business hours to all properties, books, accounts, records, contracts,
documents and information relating to the Company, and, to the extent the
Company is legally able, to each of the Target Companies. Xxxxxx and its
representatives shall also be permitted to freely consult with the Company's
counsel concerning the business of the Company.
21
7.2 CONDUCT OF BUSINESS IN NORMAL COURSE. The Company shall carry on
its business activities in substantially the same manner as heretofore
conducted, and shall not make or institute any unusual or novel methods of
service, sale, purchase, lease, management, accounting or operation that will
vary materially from those methods used by the Company as of the date hereof,
without in each instance obtaining the prior written consent of Xxxxxx.
7.3 PRESERVATION OF BUSINESS AND RELATIONSHIPS. The Company shall:
(i) without making or incurring any unusual commitments or expenditures, use its
best efforts to preserve its business organization intact and to preserve its
present relationships with referral sources, clients, customers, suppliers and
others having business relationships with it.
7.4 MAINTENANCE OF INSURANCE; ASSETS AND RECORDS. The Company shall:
(i) continue to carry its existing insurance, to the extent obtainable upon
reasonable terms, (ii) maintain all its assets and properties in good repair,
order and condition, reasonable wear and tear excepted, and (iii) maintain its
books of account and records in the usual, regular and ordinary manner, on a
basis consistent with past practice, and use its best efforts to comply with all
laws applicable to it and perform all its material obligations without default.
7.5 CORPORATE MATTERS. The Company shall not, without the prior
written consent of Xxxxxx:
(a) amend its Certificate of Incorporation or By-Laws;
(b) issue any shares of its capital stock;
(c) except as otherwise set forth in SCHEDULE 7.5(c) issue or
create any warrants, obligations, subscriptions, options, convertible securities
or other commitments under which any additional shares of its capital stock
might be directly or indirectly issued;
(d) amend, cancel or modify any Material Contract or enter into
any material new agreement, commitment or transaction except, in each instance,
in the ordinary course of business;
(e) except as otherwise set forth in SCHEDULE 7.5(e) pay, grant
or authorize any salary increases or bonuses except in the ordinary course of
business and consistent with past practice, or enter into any employment,
consulting or management agreements;
(f) modify in any material respect any material agreement to
which it is a party or by which it may be bound, except in the ordinary course
of business;
22
(g) make any material change in its management personnel;
(h) except pursuant to commitments in effect on the date hereof
(to the extent disclosed in this Agreement or in any Schedule hereto), make any
capital expenditure(s) or commitment(s), whether by means of purchase, lease or
otherwise, or any operating lease commitment(s), in excess of $25,000.00 in the
aggregate;
(i) sell, assign or dispose of any capital asset(s) with a net
book value in excess of $25,000.00 as to any one item;
(j) materially change its method of collection of accounts or
notes receivable, accelerate or slow its payment of accounts payable, or prepay
any of its obligations or liabilities, other than prepayments to take advantage
of trade discounts not otherwise inconsistent with or in excess of historical
prepayment practices;
(k) declare, pay, set aside or make any dividend(s) or other
distribution(s) of cash or other property, redeem any outstanding shares of its
capital stock, or purchase any outstanding shares of capital stock of or equity
interest in any other corporation or entity;
(l) incur any liability or indebtedness except, in each
instance, in the ordinary course of business;
(m) subject any of its assets or properties to any further liens
or encumbrances, other than Permitted Liens;
(n) forgive any liability or indebtedness owed to it by any of
the stockholders of the Company or any of their respective Affiliates; or
(o) agree to do, or take any action in furtherance of, any of
the foregoing.
7.6 OTHER TRANSACTIONS. The Company shall not enter into any
transaction or make any agreement or commitment, or permit any event to occur,
which would result in any of the representations, warranties or covenants of the
Company contained in this Agreement not being true and correct at and as of the
time immediately after the occurrence of such transaction or event.
23
8. ADDITIONAL AGREEMENTS OF THE PARTIES.
8.1 CONFIDENTIALITY. Notwithstanding anything to the contrary
contained in this Agreement, and subject only to any disclosure requirements
which may be imposed upon Xxxxxx under applicable state or federal securities or
antitrust laws, it is expressly understood and agreed by Xxxxxx, the Company,
Xxxxx Xxxxxx, Xxxxxx Xxxxxx and Xxxxxx Xxxxxx that (a) this Agreement, the
Schedules and Exhibits hereto, and the conversations, negotiations and
transactions relating hereto and/or contemplated hereby, and (b) all financial
information, business records and other non-public information concerning the
Company or Xxxxxx which any of the parties or their respective representatives
has received or may hereafter receive, shall be maintained in the strictest
confidence by the parties and their respective representatives, and shall not be
disclosed to any person that is not associated or affiliated with any of the
parties and involved in the transactions contemplated hereby, without the prior
written approval of the Company or Xxxxxx, as applicable. The parties hereto
shall use their best efforts to avoid disclosure of any of the foregoing or
undue disruption of any of the business operations or personnel of the Company
or Xxxxxx. In the event that the transactions contemplated hereby shall not be
consummated for any reason, each of the parties covenants and agrees that
neither it nor its representatives shall retain any documents, lists or other
writings which they may have received or obtained in connection herewith or any
documents incorporating any of the information contained in any of the same (all
of which, and all copies thereof in the possession or control of themselves or
their representatives, shall be returned to the original source of the material
at issue). The parties hereto shall be responsible for any damages sustained by
reason of their respective breaches of this Section 8.1, and this Section 8.1
may be enforced by injunctive relief.
8.2 DUE DILIGENCE INVESTIGATION. At all times prior to the Closing
Date, Xxxxxx and its representatives shall be permitted to conduct during normal
business hours a full and complete due diligence investigation of the assets,
business, properties, financial condition and prospects of the Company, and, to
the extent legally permitted, of the Target Companies, the results of which due
diligence investigation shall be satisfactory to Xxxxxx. The Company shall, and
shall cause the principal executive officers, legal and financial
representatives, agents and employees of the Company, and, to the extent legally
permitted, of the Target Companies to, fully cooperate to enable Xxxxxx and its
representatives to conduct a full due diligence investigation of the Company,
including interviews with personnel and/or contacts with suppliers or customers.
8.3 ADDITIONAL AGREEMENTS AND INSTRUMENTS. On or before the Closing
Date, the Company, Xxxxxx and the Merger
24
Subsidiary (as appropriate) shall execute, deliver and file the Certificate of
Merger and all exhibits, agreements, certificates, instruments and other
documents, not inconsistent with the provisions of this Agreement, which, in the
opinion of counsel to Xxxxxx, shall reasonably be required to be executed,
delivered and filed in order to consummate the Merger and the other transactions
contemplated by this Agreement.
8.4 NON-INTERFERENCE. None of the parties shall cause to occur any
act, event or condition which would cause any of their respective
representations and warranties made in this Agreement to be or become untrue or
incorrect in any material respect as of the Closing Date, or would interfere
with, frustrate or render unreasonably expensive the satisfaction by the other
party or parties of any of the conditions precedent set forth in Sections 9,10
and 11 below.
8.5 MANAGEMENT OF THE SURVIVING CORPORATION AND XXXXXX FOLLOWING THE
CLOSING DATE.
(a) At the Closing, the Company shall deliver to Xxxxxx a
written statement from the Company designating three (3) individuals to serve as
directors of Xxxxxx subsequent to the Closing (the "Designated Directors") and
identifying those individuals who shall serve as officers of Xxxxxx subsequent
to the Closing (the "Designated Officers"). Simultaneously therewith, Xxxxxx
shall deliver to the Company (i) resignations of the officers and directors of
Xxxxxx set forth on EXHIBIT L, attached hereto, and (ii) a resolution electing
as directors of Xxxxxx the Designated Directors and appointing as officers of
Xxxxxx the Designated Officers. The parties acknowledge and agree that the
board of directors of Xxxxxx immediately following the Closing Date shall
consist of not more than six (6) individuals, each with a term that shall expire
upon the next annual meeting of Xxxxxx. Three of such directors shall be the
Designated Directors. Within thirty (30) days following the Closing, the six
(6) Xxxxxx directors shall meet and elect a seventh (7th) director. In the
event a Designated Director cannot complete their term, then the remaining
Designated Directors may appoint a successor to finish such term. At the first
annual meeting of the shareholders of Xxxxxx following the Closing, Xxxxxx
Xxxxxx and Xxxxxx Xxxxxx shall vote their shares in favor of the election of the
three Xxxxxx directors that served as directors of Xxxxxx immediately prior to
the election of the Designated Directors.
(b) Xxxxxx shall cause those executive officers of Xxxxxx
identified and set forth in the attached EXHIBIT L to resign from their
positions with Xxxxxx effective upon the Closing Date. Such resignations and
separations shall be on terms and conditions mutually agreeable to both the
Company and Xxxxxx.
25
9. CONDITIONS PRECEDENT TO XXXXXX'X PERFORMANCE.
The obligations of Xxxxxx to consummate the transactions contemplated
by this Agreement are further subject to the satisfaction, at or before the
Closing Date, of all the following conditions, any one or more of which may be
waived in writing by Xxxxxx:
9.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made by the Company, Xxxxxx Xxxxxx and Xxxxxx Xxxxxx in this
Agreement, in any Schedule(s) or Exhibits hereto, and/or in any written
statement delivered to Xxxxxx under this Agreement shall be true and correct in
all material respects, to the best of their knowledge, on and as of the Closing
Date as though such representations and warranties were made on and as of that
date.
9.2 PERFORMANCE. The Company shall have performed, satisfied and
complied with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by them on or before the
Closing Date.
9.3 CERTIFICATION. Xxxxxx shall have received a certificate, dated
the Closing Date, signed by an officer of the Company, and Xxxxxx Xxxxxx and
Xxxxxx Xxxxxx certifying, in such detail as Xxxxxx and its counsel may
reasonably request, that the conditions specified in Sections 9.1 and 9.2 above
have been fulfilled.
9.4 RESOLUTIONS. Xxxxxx shall have received certified resolutions of
the Board of Directors and the stockholders of the Company, in form reasonably
satisfactory to counsel for Xxxxxx, authorizing the Company's execution,
delivery and performance of this Agreement and the Merger, and all actions to be
taken by the Company hereunder (including resolutions which elect such persons
as officers and directors of the Company).
9.5 GOOD STANDING CERTIFICATES. The Company shall have delivered to
Xxxxxx a certificate or telegram issued by the Secretary of State of the
jurisdiction of incorporation of the Company, evidencing the good standing of
the Company in its jurisdiction of incorporation as of a date not more than ten
(10) calendar days prior to the Closing Date.
9.6 ABSENCE OF LITIGATION. No action, suit or proceeding by or
before any court or any governmental body or authority, against the Company, the
Target Companies, Xxxxxx Xxxxxx or Xxxxxx Xxxxxx or pertaining to the
transactions contemplated by this Agreement or their consummation, shall have
been instituted on or before the Closing Date, which action, suit or proceeding
would, if determined adversely, have a material adverse effect on the business,
financial condition, operations or prospects of the Company, or impair the
ability of any of the
26
stockholders of the Company to deliver in the Merger all of their common stock
of the Company free and clear of all pledges, liens, claims, charges, options,
calls, encumbrances, restrictions and assessments whatsoever.
9.7. CONSENTS. All necessary disclosures to and agreements and
consents of (a) any parties to any Material Contracts and/or any licensing
authorities which are material to the Company's business, (including all
outstanding indebtedness and leases) and (b) any governmental authorities or
agencies to the extent required in connection with the transactions contemplated
by this Agreement, shall have been obtained, shall be in such form as shall be
satisfactory to Xxxxxx and true and complete copies thereof shall be delivered
to Xxxxxx on or before the Closing Date.
9.8 CONDITION OF PROPERTY. Between the date of this Agreement and
the Closing Date, assets of the Company having an aggregate fair market value of
$25,000.00 or more shall not have been lost, destroyed or irreparably damaged by
fire, flood, explosion, theft or any other cause, unless covered by insurance.
9.9 NO MATERIAL ADVERSE CHANGE. On the Closing Date, there shall not
have occurred any event or condition materially and adversely affecting the
financial condition, results of operations or business prospects of the Company
from those reflected in the financial statements set forth in SCHEDULE 5.6.
9.10 SATISFACTORY DUE DILIGENCE INVESTIGATION. Xxxxxx, in its sole
and absolute discretion, shall be satisfied with the results of its due
diligence investigation of, without limitation, the Company, the Target
Companies, and the business and financial condition of the Company and the
Target Companies.
9.11 EXECUTION AND DELIVERY OF EXHIBITS. On or before the Closing
Date, the Company shall have executed and delivered to the Merger Subsidiary the
appropriate Certificate of Merger and the executed Employment Agreement. All
Exhibits and Schedules shall have been completed and delivered to Xxxxxx.
9.12 PROCEEDINGS AND INSTRUMENTS SATISFACTORY. All proceedings,
corporate or other, to be taken in connection with the transactions contemplated
by this Agreement, and all documents incidental thereto, shall be reasonably
satisfactory in form and substance to Xxxxxx and its counsel. The Company shall
have submitted to Xxxxxx or its representatives for examination the originals or
true and correct copies of all records and documents relating to the business
and affairs of the Company which Xxxxxx may have requested in connection with
said transactions.
9.13 CONSUMMATION OF ACQUISITIONS. Xxxxxx shall be satisfied, in its
reasonable discretion, that the Company shall have the ability to close upon and
consummate all of the
27
acquisitions identified in SCHEDULE 9.13, attached hereto, PROVIDED, THAT, the
Company may substitute and close one or more new transactions of substantially
equivalent economic value and content for any acquisition identified on SCHEDULE
9.13. In the event of such a substitution, Xxxxxx may seek a supplement to the
fairness opinion to be provided by its investment banker pursuant to Section
9.14 hereinafter, opining that, taking into consideration such substitution, the
transaction from a financial point-of-view is still fair to its shareholders.
The Company shall reimburse Xxxxxx for any reasonable expenses incurred by
Xxxxxx in securing the services of an investment banker to render the supplement
to the fairness opinion.
9.14 INVESTMENT BANKING FAIRNESS OPINION. Xxxxxx shall solicit from
its investment bankers and shall have received from such investment bankers an
opinion satisfactory to Xxxxxx as to the fairness of the transaction from a
financial point-of-view to its shareholders. The Company shall reimburse Xxxxxx
for any reasonable expenses incurred by Xxxxxx in securing the services of an
investment banker to render the fairness opinion.
9.15 XXXXXXX BANK OF CENTRAL FLORIDA, N.A.'S CONSENT TO THE MERGER.
Xxxxxx shall solicit and shall have received the consent of Xxxxxxx Bank of
Central Florida, N.A. as to the consummation of the Merger set forth herein.
9.16 EXECUTIVE EMPLOYMENT AGREEMENTS. The Company shall have entered
into employment agreements satisfactory to Xxxxxx and the Company with the
executives identified on SCHEDULE 9.16.
10. CONDITIONS PRECEDENT TO THE COMPANY'S PERFORMANCE.
The obligations of the Company to consummate the Merger and the
transactions contemplated by this Agreement are further subject to the
satisfaction, at or before the Closing Date, of all of the following conditions,
any one or more of which may be waived in writing by the Company:
10.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made by Xxxxxx in this Agreement and/or in any written statement
delivered by Xxxxxx under this Agreement shall be true and correct in all
material respects on and as of the Closing Date as though such representations
and warranties were made on and as of that date.
10.2 PERFORMANCE. Xxxxxx shall have performed, satisfied and complied
with all covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by Xxxxxx on or before the Closing Date.
10.3 CERTIFICATION. The Company shall have received a certificate,
dated the Closing Date, signed by an officer of Xxxxxx certifying, in such
detail as the Company and its counsel
28
may reasonably request, that the conditions specified in Sections 10.1 and 10.2
above have been fulfilled.
10.4 RESOLUTIONS. The Company shall have received certified
resolutions of the Board of Directors of Xxxxxx and the Merger Subsidiary and
certified resolutions of Xxxxxx as shareholder of Merger Subsidiary, in form
reasonably satisfactory to counsel for the Company, authorizing the Merger and
Xxxxxx'x execution, delivery and performance of this Agreement and all actions
to be taken by Xxxxxx and the Merger Subsidiary hereunder.
10.5 EXECUTION AND DELIVERY OF EXHIBITS. The Merger Subsidiary shall
have executed and delivered to the Company the Certificate of Merger. All
Exhibits and Schedules shall have been completed and delivered to the Company.
10.6 PROCEEDINGS AND INSTRUMENTS SATISFACTORY. All proceedings to be
taken in connection with the transactions contemplated by this Agreement, and
all documents incidental thereto, shall be reasonably satisfactory in form and
substance to the Company and its counsel.
10.7 PERFORMANCE BY XXXXX XXXXXX. Xxxxx Xxxxxx shall have executed
and delivered to the Company an original Employment Agreement as set forth
hereinabove.
10.8 NO MATERIAL ADVERSE CHANGE. On the Closing Date, there shall not
have occurred any event or condition materially and adversely affecting the
financial condition, results of operations or business prospects of Xxxxxx from
those reflected in Xxxxxx'x most recent Post Effective Amendment No. 2 to
Xxxxxx'x Registration Statement on Form SB-2, quarterly report and other current
reports filed with the SEC.
10.9 APPROVAL OF EMPLOYMENT AGREEMENTS. The Company shall have
approved, in writing, on or before the Closing Date, any employment agreements
executed by Xxxxxx from the date of execution of the letter of intent (October
28, 1996).
11. CONDITIONS PRECEDENT TO XXXXX XXXXXX'X PERFORMANCE.
11.1 DELIVERY OF AGREEMENTS. The Company shall have executed and
delivered to Xxxxx Xxxxxx an original Employment Agreement and Xxxxx Xxxxxx
Option Agreement.
12. CLOSING.
12.1 PLACE AND DATE OF CLOSING. Unless this Agreement shall be
terminated pursuant to Section 13 below, the consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Xxxxxxxxx Xxxxxxx, 000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx
00000, or such other location as is agreed to between the
29
parties, at a time mutually agreeable to the parties, or on such date as may be
reasonably required to accommodate a satisfaction of the conditions precedent to
Closing hereunder (the date of the Closing being referred to in this Agreement
as the "Closing Date").
12.2 ACTIONS AT CLOSING. On the Closing Date, simultaneous with the
Closing, the parties shall file or cause to be filed Certificate of Merger with
the Secretary of State of the applicable jurisdiction. At the Closing, the
parties shall make all payments and deliveries stated in this Agreement to be
made at the Closing and/or on or prior to the Closing Date.
13. TERMINATION OF AGREEMENT.
13.1 GENERAL. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing: (a) by
Xxxxxx if it is not satisfied, in its sole and absolute discretion, with the
results of its due diligence investigation; (b) by the mutual written consent of
Xxxxxx, the Company, Xxxxx Xxxxxx, Xxxxxx Xxxxxx and Xxxxxx Xxxxxx; (c) by
Xxxxxx, or by the Company, if: (i) a material breach shall exist with respect
to the written representations and warranties made by the other party or
parties, as the case may be, (ii) the other party or parties, as the case may
be, shall take any action prohibited by this Agreement, if such actions shall or
may have a material adverse effect on the Company or on Xxxxxx, and/or the
transactions contemplated hereby, (iii) the other party or parties, as the case
may be, shall not have furnished, upon reasonable notice therefor, such
certificates and documents required in connection with the transactions
contemplated hereby and matters incidental thereto as it or they shall have
agreed to furnish, and it is reasonably unlikely that the other party or parties
will be able to furnish such item(s) prior to the Outside Closing Date specified
below, or (iv) any consent of any third party to the transactions contemplated
hereby (whether or not the necessity of which is disclosed herein or in any
Schedule hereto) is reasonably necessary to prevent a default under any
outstanding material obligation of any party hereto and such consent is not
obtainable without material cost or penalty (unless the party or parties not
seeking to terminate this Agreement agrees or agree to pay such cost or
penalty); or (d) by Xxxxxx or by the Company, at any time on or after December
30, 1996 (the "Outside Closing Date"), if the transactions contemplated hereby
shall not have been consummated prior thereto, and the party directing
termination shall not then be in breach or default of any obligations imposed
upon such party by this Agreement.
13.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement pursuant to this Section 13, prompt written notice shall be given by
the terminating party to the other party, and no party to this Agreement shall
have any further liability to the other (i) except as provided in Section
30
8.1 above or Section 16, below, or (ii) except arising out of a breach by such
party of this Agreement prior to the termination thereof.
14. INDEMNIFICATION.
14.1 GENERAL.
(a) The Company shall defend, indemnify and hold harmless the
Surviving Corporation and Xxxxxx from, against and in respect of any and all
claims, losses, costs, expenses, obligations, liabilities, damages, recoveries
and deficiencies, including interest, penalties, fines and reasonable attorneys'
fees, that the Surviving Corporation and/or Xxxxxx may incur, sustain or suffer
including without limitation any audit costs incurred by an Internal Revenue
Service audit of the Company and/or any of the Target Companies which results in
a tax deficiency for the tax year(s) audited ("Losses") as a result of any
breach of, or failure by the Company, Xxxxxx Xxxxxx or Xxxxxx Xxxxxx to perform,
any of the representations, warranties, covenants or agreements of the Company,
Xxxxxx Xxxxxx or Xxxxxx Xxxxxx contained in this Agreement or in any Schedule(s)
furnished by or on behalf of the Company under this Agreement.
(b) The Surviving Corporation and Xxxxxx shall jointly and
severally defend, indemnify and hold harmless the stockholders of the Company
and the holders of the Potential Securities (collectively the "Holders") from,
against and in respect of any and all claims, losses, costs, expenses,
obligations, liabilities, damages, recoveries and deficiencies, including
interest, penalties and reasonable attorneys' fees, that such Holders may incur,
sustain or suffer as a result of any breach of, or failure by Xxxxxx to perform,
any of the representations, warranties, covenants or agreements of Xxxxxx
contained in this Agreement.
14.2 LIMITATIONS ON CERTAIN INDEMNITY.
(a) As used in this Section 14.2, "Losses" shall mean and refer
to, collectively, Losses as defined in Section 14.1(a) above.
(b) The Surviving Corporation and Xxxxxx shall be entitled to
indemnification by the Company, Xxxxxx Xxxxxx and Xxxxxx Xxxxxx, jointly and
severally, for Losses referenced under Section 14.1(a), and the Company and the
Holders shall be entitled to indemnification by the Surviving Corporation and
Xxxxxx, jointly and severally, for losses referenced under Section 14.1(b), only
in respect of claims for which notice of claim shall have been given on or
before the third anniversary of the Closing Date, or, with respect to Losses
relating to a breach of any warranties under Section 5.8 above, the expiration
of the final statute of limitations for those tax returns covered by the
warranties under Section 5.8 above; PROVIDED, HOWEVER, that no
31
party shall be entitled to indemnification in the event that the subject claim
for indemnification relates to a third-party claim and the prospective
indemnified party (as the case may be) delayed giving notice thereof to such an
extent as to cause material prejudice to the defense of such third-party claim.
14.3 CLAIMS FOR INDEMNITY. Whenever a claim shall arise for which any
party shall be entitled to indemnification hereunder, the indemnified party
shall notify the indemnifying party in writing within thirty (30) days of the
indemnified party's first receipt of notice of, or the indemnified party's
obtaining actual knowledge of, such claim, and in any event within such shorter
period as may be necessary for the indemnifying party or parties to take
appropriate action to resist such claim. Such notice shall specify all facts
known to the indemnified party giving rise to such indemnity rights and shall
estimate (to the extent reasonably possible) the amount of potential liability
arising therefrom. If the indemnifying party shall be duly notified of such
dispute, the parties shall attempt to settle and compromise the same or may
agree to submit the same to American Arbitration Association arbitration in
Orlando, Florida or, if unable or unwilling to do any of the foregoing, such
dispute shall be settled by appropriate litigation, and any rights of
indemnification established by reason of such settlement, compromise,
arbitration or litigation shall promptly thereafter be satisfied by those
indemnifying parties obligated to make indemnification hereunder in such amount
as shall be necessary to satisfy all applicable Losses determined in accordance
with such settlement and compromise, or by final nonappealable order or judgment
of the applicable judicial or arbitration panel. Losses which take the form of
litigation or arbitration costs and expenses (including reasonable attorneys'
fees) which are not incurred in connection with an action or demand by a third
party against the indemnified party or any of its Affiliates, shall not be paid
on an ongoing basis as incurred, but rather all such costs and expenses incurred
by the prevailing party in any such action shall be paid by the other party
thereto.
14.4 RIGHT TO DEFEND. If the facts giving rise to any claim for
indemnification shall involve any actual or threatened action or demand by any
third party against the indemnified party or any of its Affiliates, the
indemnifying party or parties shall be entitled (without prejudice to the
indemnified party's right to participate at its own expense through counsel of
its own choosing), at their expense and through a single counsel of their own
choosing, to defend or prosecute such claim in the name of the indemnifying
party or parties, or any of them, or if necessary, in the name of the
indemnified party. All Losses which take the form of claims for litigation
costs and expenses (including reasonable attorneys' fees) shall be paid to the
indemnified party in cash on an ongoing basis as incurred. In any event, the
indemnified party shall give the indemnifying party advance written notice of
any proposed compromise or settlement
32
of any such claim. If the remedy sought in any such action or demand is solely
money damages, the indemnifying party shall have thirty (30) days after receipt
of such notice of settlement to object to the proposed compromise or settlement,
and if it does so object, the indemnifying party shall be required to undertake,
conduct and control, through counsel of its own choosing and at its sole
expense, the settlement or defense thereof, and the indemnified party shall
cooperate with the indemnifying party in connection therewith.
15. POST-CLOSING EVENTS.
In addition to the post-Closing covenants set forth in Section 4 above, the
parties hereby further agree that, from and after the Closing:
15.1 ACCOUNTING COOPERATION. The Company shall cause the accountants
heretofore retained by the Company to cooperate with Xxxxxx'x accountants in
connection with ongoing audit work relating to periods prior to the Closing
Date, as required by applicable federal and state securities laws, and other
reasonable requirements. Such cooperation shall include, without limitation,
providing such assurances, comfort letters and access to work papers as may
reasonably be requested by Xxxxxx and its accountants.
16. COSTS.
16.1 FINDER'S OR BROKER'S FEES. Xxxxxx (on the one hand) and the
Company (on the other hand) represents and warrants that neither they nor any of
their respective Affiliates have dealt with any broker or finder in connection
with any of the transactions contemplated by this Agreement, and no broker or
other person is entitled to any commission or finder's fee in connection with
any of these transactions. The Company shall reimburse Xxxxxx for any
reasonable expenses incurred by Xxxxxx in securing the services of an investment
banker to render a fairness opinion.
16.2 EXPENSES. Each party to this Agreement shall be responsible for
its own costs and fees incurred in connection with the negotiation and
preparation of this Agreement and exhibits referenced herein, and the
consummation of the transactions contemplated hereby. Except as otherwise
provided herein, Xxxxxx, shall pay all closing expenses; PROVIDED, that all
professional fees and costs for the negotiation and review of this Agreement and
for preparation of closing schedules and financial statements, that are incurred
by and on behalf of the Company shall be borne by the Company.
17. PARTIES.
17.1 PARTIES IN INTEREST. Nothing in this Agreement, whether
expressed or implied, is intended to confer any rights or
33
remedies under or by reason of this Agreement on any persons other than the
parties to it and their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns, nor is anything in this
Agreement intended to relieve or discharge the obligations or liability of any
third persons to any party to this Agreement, nor shall any provision give any
third persons any right of subrogation or action over or against any party to
this Agreement.
17.2 NOTICES. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given (i) on the date of service if served personally on the party to whom
notice is to be given, or on the day after the date sent by recognized overnight
courier service with all charges prepaid, or (ii) three (3) days after being
deposited in the United States mail if sent by first class mail, registered or
certified, postage prepaid, and properly addressed as follows:
(a) If to Xxxxxx the Merger Subsidiary or
Xxxxx Xxxxxx:
XXXXXX INDUSTRIES, INC.
0000 XXXXX XXXXXXXXXX XXXXXX
XXXXXXXXXX, XXXXXXX 00000
ATTENTION: XXX XXXX, VICE PRESIDENT FINANCE
WITH A COPY TO:
SMITH, MACKINNON, GREELEY,
BOWDOIN & XXXXXXX, P.A.
CITRUS CENTER
000 XXXXX XXXXXX XXXXXX, XXXXX 000
XXXXXXX, XXXXXXX 00000
ATTENTION: XXXX X. XXXXXXX, ESQ.
(b) If to the Company:
SMART CHOICE HOLDINGS, INC.
000 XXXXXXXXX XXXXXXX, XXXXX 000
XXXXXX XXXXXX, XXXXXXX 00000
ATTENTION: XXXXXX X. XXXXXX
34
WITH A COPY TO:
XXXXXXXXX TRAURIG
000 XXXXX XXXXXX XXXXXX, XXXXX 0000
XXXXXXX, XXXXXXX 00000
ATTENTION: XXXXXXXX X. XXXXXX, ESQ.
or to such other address as either party shall have specified by notice in
writing given to the other party.
18. MISCELLANEOUS.
18.1 AMENDMENTS AND MODIFICATIONS. No amendment or modification of
this Agreement or any Exhibit or Schedule hereto shall be valid unless made in
writing and signed by the party to be charged therewith.
18.2 NON-ASSIGNABILITY; BINDING EFFECT. Other than the assignment of
rights by Xxxxxx to the Merger Subsidiary as and to the extent contemplated by
Section 1 above, neither this Agreement, nor any of the rights or obligations of
the parties hereunder, shall be assignable by any party hereto without the prior
written consent of all other parties hereto. Otherwise, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, personal representatives,
successors and permitted assigns.
18.3 SEVERABILITY. In the event that any provision or any portion of
any provision of this Agreement shall be held invalid, illegal or unenforceable
under applicable law, the remainder of this Agreement shall remain valid and
enforceable, unless such invalidity, illegality or unenforceability
substantially diminishes the rights and obligations, taken as a whole, of any
party hereunder.
18.4 ATTORNEYS' FEES. In the event of suit to enforce the terms of
this Agreement, the prevailing party shall be entitled to collect from the
non-prevailing party reasonable attorneys' fees, costs and expenses (including
those incurred through all trial, appellate and post-judgment collection
proceedings).
18.5 GOVERNING LAW; JURISDICTION. Except to the extent that
Applicable Law shall govern with respect to the Merger, this Agreement shall be
construed and interpreted and the rights granted herein governed in accordance
with the laws of the State of Delaware applicable to contracts made and to be
performed wholly within such State.
18.6 EFFECT OF HEADINGS. The Section headings used in this Agreement
and the titles of the Schedules hereto are
35
included for purposes of convenience only, and shall not affect the construction
or interpretation of any of the provisions hereof or of the information set
forth in such Schedules.
18.7 ENTIRE AGREEMENT; WAIVERS. This Agreement constitutes the entire
agreement between the parties pertaining to the subject matter hereof, and
supersedes all prior agreements or understandings as to such subject matter. No
party hereto has made any representation or warranty or given any covenant to
the other except as set forth in this Agreement and the Schedules and Exhibits
hereto. No waiver of any of the provisions of this Agreement shall be deemed,
or shall constitute, a waiver of any other provisions, whether or not similar,
nor shall any waiver constitute a continuing waiver. No waiver shall be binding
unless executed in writing by the party making the waiver.
18.8 COUNTERPARTS. This Agreement may be executed simultaneously in
any number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
36
IN WITNESS WHEREOF, the parties have executed this Agreement on and as of
the date first set forth above.
XXXXXX INDUSTRIES, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Name: Xxxxx X. Xxxxxx
--------------------------
Its: President
XXXXXX ACQUISITION CORPORATION
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Name: Xxxxx X. Xxxxxx
--------------------------
Its: President
SMART CHOICE HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
Its: Executive Vice President
XXXXX XXXXXX:
/s/ Xxxxx Xxxxxx
-------------------------------
Xxxxx Xxxxxx, Individually
XXXXXX X. XXXXXX:
/s/ Xxxxxx X. Xxxxxx
-------------------------------
Xxxxxx X. Xxxxxx, Individually
XXXXXX X. XXXXXX:
/s/ Xxxxxx X. Xxxxxx
-------------------------------
Xxxxxx X. Xxxxxx, Individually
37
E X H I B I T S
A - Certificate of Merger
B - Holders of Convertible Securities
C - Holders of Exercisable Securities
X - Xxxxxx Subscription Agreement
E - Original Xxxxxx Options & Warrants held by Xxxxx Xxxxxx
F - Xxxxx Xxxxxx Options Granted in Consideration of
Surrender of Original Xxxxxx Options
G - Xxxxx Xxxxxx'x Retained Xxxxxx Options
H - Xxxxx Xxxxxx Employment Agreement
I - Xxxxx Xxxxxx Registration Rights Agreement
J - Xxxxxx Loans
K - Xxxxxx Guaranty Agreement
L - Resignation of Xxxxxx officers.
38
S C H E D U L E S
SCHEDULE 5.1 - Title to the Company's Stock
SCHEDULE 5.3 - Qualification to do Business, Certificate of Incorporation,
By-Laws, List of Officers and Directors for the Company
SCHEDULE 5.4 - Warrants, Options, Debentures, Preferred Stock
SCHEDULE 5.5 - Subsidiaries of Company
SCHEDULE 5.6 - Obligations to and from Company
SCHEDULE 5.7 - Material Changes
SCHEDULE 5.8 - Company Tax Matters
SCHEDULE 5.9 - Security Agreements and Encumbrances
SCHEDULE 5.10 - Real Property Owned by the Company
SCHEDULE 5.11 - Accounts Receivable Pledged or Assigned
SCHEDULE 5.13 - Insurance held by the Company
SCHEDULE 5.14 - Permits and Licenses
SCHEDULE 5.15 - Material Contacts
SCHEDULE 5.17 - Labor & Employment
SCHEDULE 5.18 - Breaches of Statutes, Decrees or Instruments
SCHEDULE 5.19 - Governmental Audits of the Company
SCHEDULE 5.20 - Litigation
SCHEDULE 5.21 - Licensing Agreements & Intellectual Property
SCHEDULE 5.22 - Transactions with Affiliates
SCHEDULE 5.23 - Bank Accounts
SCHEDULE 5.25 - Consents
SCHEDULE 6.5 - Xxxxxx Prospectus, Annual Report, Quarterly Report and other
current reports.
SCHEDULE 6.8 - Xxxxxx Tax Matters
SCHEDULE 7.5(c)- Company's Obligation to create new securities
SCHEDULE 7.5(e)- Salary and Bonus of Company Employees
SCHEDULE 9.13 - List of Company Acquisitions
SCHEDULE 9.16 - Xxxxxx Employees to be Hired by the Company
39
