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EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
BY
ORION TECHNOLOGIES, INC.,
XXXXXXX HOLDINGS, INC.,
AND
TRANSACTION VERIFICATION SYSTEMS, INCORPORATED,
DATED AS OF JUNE 8, 2000
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TABLE OF CONTENTS
SECTION 1 THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Effective Time of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Effect of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Certificate of Incorporation; Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Taking of Necessary Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2 PAYMENT OF MERGER CONSIDERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Merger Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Certificate Conversion Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3 No Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.4 Appraisal Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.5 No Further Ownership Rights in TVS Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.6 Distributions with Respect to Unsurrendered TVS Stock . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.7 No Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3 REPRESENTATIONS AND WARRANTIES OF TVS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 Organization and Good Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Capitalization of TVS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.4 Title to TVS Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5 Noncontravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.6 Actions and Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.7 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.8 Filings, Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.9 Financial Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.10 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.11 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.12 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.13 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.14 Absence of Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.15 Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.16 Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.17 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.18 Employees and Consultants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.19 ERISA Compliance; Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.20 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.21 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.22 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.23 Material Contracts and Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.24 Products and Services Warranties; Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.25 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.26 No Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.27 Completeness of Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4 REPRESENTATIONS AND WARRANTIES OF ORION AND XXXXXXX . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.1 Organization and Good Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.2 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.3 Capitalization of Xxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.4 Capitalization of Xxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.5 Validity of Orion Stock Issuable Upon the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.6 No Assets or Liabilities of Xxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.7 Actions and Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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4.8 Orion Reports and Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.9 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.10 Filings, Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.11 No Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.12 Completeness of Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 5 CLOSING CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.1 Conditions Precedent to Closing by Xxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.2 Conditions Precedent to Closing by TVS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 6 ADDITIONAL COVENANTS OF THE PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.1 Access and Investigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.2 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.3 No Negotiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.4 Conduct of TVS Business Prior to Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.5 Certain Acts Prohibited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.6 Certain Acts Prohibited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.7 [Intentionally Deleted.] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.8 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.9 Delivery of Securities Disclosure Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 7 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 8 MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.1 Effectiveness of Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.2 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.3 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.4 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.5 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.6 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.8 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.9 Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.10 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.12 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.14 Fax Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.15 Schedules and Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is entered into on
June 8, 2000 by and between ORION TECHNOLOGIES, INC., a Nevada corporation
("Orion"), XXXXXXX HOLDINGS, INC., a Delaware corporation ("Xxxxxxx"), and
TRANSACTIONS VERIFICATION SYSTEMS, INCORPORATED, a Delaware corporation
("TVS").
PRELIMINARY STATEMENTS
The Boards of Directors of Xxxxxxx and TVS deem it desirable and in the
best interests of their respective shareholders that TVS be merged with and
into Xxxxxxx (the "Merger") on the terms and conditions of this Agreement.
The Boards of Directors of Xxxxxxx and TVS, by resolutions duly adopted,
have approved and adopted this Agreement, and this Agreement will be submitted
to the shareholders of each of Xxxxxxx and TVS entitled to vote thereon for
approval and adoption, which approval and adoption is a condition to the
effectiveness of the Merger. Xxxxxxx is a wholly-owned subsidiary of Orion.
In consideration of the mutual benefits to be derived from the Merger and
the respective representations, warranties, covenants and agreements contained
in this Agreement, the parties agree as follows:
STATEMENT OF TERMS
SECTION 1
THE MERGER
1.1 The Merger. At the Effective Time (as defined in Section 1.3
below), TVS will be merged with and into Xxxxxxx in accordance with this
Agreement, the Certificate of Merger substantially in the form of Exhibit A
attached to this Agreement (the "Certificate of Merger"), and the applicable
provisions of the Delaware General Corporation Law (the, "DGCL"). Following
the Merger, Xxxxxxx will continue as the surviving corporation ("Surviving
Corporation"), with the corporate existence of Surviving Corporation to be
continued under the name "Transaction Verification Systems, Incorporated", and
the separate existence of TVS will cease, except insofar as it may be continued
by the DGCL.
1.2 Closing. As soon as practicable following the satisfaction or
waiver of the conditions set forth in Section 5 of this Agreement, and provided
that this Agreement has not been terminated pursuant to Section 7, the parties
to this Agreement will hold a closing (the "Closing") for the purpose of
confirming the consummation of the Merger at a time and date mutually agreed
upon by the parties. Unless otherwise agreed by the parties, the Closing will
be held at the offices of Powell, Goldstein, Xxxxxx & Xxxxxx LLP, 0000
Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxx Xxxxx, Xxxxxxxxxx, X.X. 00000. The date on
which the Closing actually occurs is referred to as the "Closing Date." At the
Closing, the parties will execute and exchange all
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documents, certificates and instruments contemplated by this Agreement. The
parties agree to use commercially reasonable efforts and all due diligence to
cause the Closing to be consummated on or before June 30, 2000 unless such date
is extended by the mutual agreement of the parties.
1.3 Effective Time of the Merger. The Merger will be effective at the
time (the "Effective Time") of the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware, which is to be filed as soon as
practicable on or after the Closing Date.
1.4 Effect of the Merger. The Merger will have the effects set forth in
Section 351 of the DGCL. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time all the property, rights, privileges,
powers and franchises of Xxxxxxx and TVS will vest in Surviving Corporation
without further act or deed, and all debts, liabilities and duties of Xxxxxxx
and TVS will become the debts, liabilities and duties of Surviving Corporation.
1.5 Certificate of Incorporation; Bylaws.
(a) Except as modified by the Certificate of Merger, the
certificate of incorporation of Xxxxxxx as in effect immediately prior to the
Effective Time will continue unchanged and will be the certificate of
incorporation of Surviving Corporation until thereafter amended in accordance
with the terms thereof and in accordance with applicable law.
(b) At the Effective Time, the by-laws of Xxxxxxx, as in effect
immediately prior to the Effective Time, will be the by-laws of Surviving
Corporation until thereafter amended in accordance with the terms thereof and
in accordance with applicable law.
1.6 Directors and Officers. The directors and officers of TVS
immediately prior to the Effective Time will be the directors and officers,
respectively, of Surviving Corporation after the Effective Time, until their
successors are duly elected, appointed or qualified or until their earlier
death, resignation or removal in accordance with certificate of incorporation
and bylaws of Surviving Corporation.
1.7 Taking of Necessary Action. If after the Effective Time any further
action is necessary to carry out the purposes of this Agreement or to vest
Surviving Corporation with full title to all assets, rights, approvals,
immunities and franchises of either Xxxxxxx or TVS, the officers and directors,
or the former officers and directors, as the case may be, of Xxxxxxx and TVS
and Surviving Corporation will take all such necessary action.
SECTION 2
PAYMENT OF MERGER CONSIDERATION
2.1 Merger Consideration. At the Effective Time, by virtue of the
Merger, each share of TVS common stock, par value $0.05 ("TVS Common Stock")
and TVS preferred stock, par value $10.00 ("TVS Preferred Stock") will be
convertible as follows:
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(a) Conversion of TVS Common Stock. Each share of TVS Common Stock
issued and outstanding immediately prior to the Effective Time (other than
Dissenting Shares, as defined in Section 2.4) will, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into 0.3661
shares of Orion Common Stock (as defined in Section 4.3), subject to adjustment
as described in Section 2.1(e).
(b) Conversion of TVS Preferred Stock. Unless an Election Notice
is received by TVS in accordance with Section 2.1(c) below, the TVS Preferred
Stock issued and outstanding immediately prior to the Effective Time (other
than Dissenting Shares, as defined in Section 2.4) will, by virtue of the
Merger, be converted into a promissory note from the Surviving Corporation in
substantially the form of Exhibit C attached to this Agreement, with a
principal amount equal to Ten Dollars ($10.00) multiplied by the number of
shares of TVS Preferred Stock being converted, and bearing simple interest at a
rate of 8% per annum, with principal and interest due and payable on December
31, 2000, which note will be guaranteed by Orion (the "Promissory Note").
(c) Election Notice of TVS Preferred Stock. Each holder of TVS
Preferred Stock ("TVS Preferred Shareholder")(other than Dissenting
Stockholders, as defined in Section 2.4) will, by virtue of the Merger, be
entitled to convert his, her, or its TVS Preferred Stock into 2.5 shares of
Orion Common Stock for each share of TVS Preferred Stock owned immediately
prior to the Effective Time, by delivering to TVS the notification form to be
provided by TVS and agreeable to the parties hereto ("Election Notice") before
the Effective Time, expressing their intent to convert their TVS Preferred
Stock to Orion Common Stock, subject to adjustment as described in Section
2.1(e).
(d) Xxxxxxx Stock. Each share of Xxxxxxx Stock (as defined in
Section 4.4) issued and outstanding immediately prior to the Effective Time
will remain outstanding and will thereafter represent one issued share of
Surviving Corporation Common Stock.
(e) Share Adjustment. If sixty days after the Effective Time
("Adjustment Date"), the Total Consideration Value (defined below) is less than
$1,000,000, Orion will promptly issue additional shares ("Additional Shares")
to those TVS Stockholders who converted their TVS Stock for Orion Common Stock,
on a proportionate basis, such that the Total Consideration Value will equal
$1,000,000. As used in this section, the term "Total Consideration Value"
will mean the sum of: (x) (i) number of shares of Orion Common Stock issued to
the holders of the TVS Stock as a result of the Merger at the Effective Time,
times (ii) the average closing price of the Orion Common Stock on the OTC
Bulletin Board or other relevant exchange for the 10 days immediately preceding
the Adjustment Date; plus (y) the aggregate principal value of the Promissory
Notes issued pursuant to Section 2.1(b) hereof.
2.2 Certificate Conversion Procedure. After the Effective Time, each
holder of the TVS Common Stock and the TVS Preferred Stock (collectively, "TVS
Stock") will be entitled to exchange his, her, or its certificate representing
the TVS Stock ("TVS Stock Certificate") for (i) a certificate representing the
number of shares of Orion Common Stock into which the number of shares of TVS
Stock previously represented by such certificate surrendered have been
converted pursuant to Section 2.1(a) or 2.1(c) of this Agreement, or (ii) a
Promissory Note pursuant to
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Section 2.1(b) of this Agreement. Each holder of TVS Stock may exchange his,
her or its TVS Stock Certificate by delivering the TVS Stock Certificate to
Orion duly endorsed in blank (or accompanied by duly executed stock powers duly
endorsed in blank), in each case in proper form for transfer, with signatures
guaranteed, and, if applicable, with all stock transfer and any other required
documentary stamps affixed thereto, and for those converting their TVS Stock to
Orion Common Stock in accordance with Section 2.1(a) and 2.1(c), with
appropriate instructions to allow the transfer agent to issue certificates for
the Orion Common Stock to the holder thereof. Until surrendered as
contemplated by this Section 2.2, each TVS Stock Certificate will be deemed at
any time after the Effective Time to represent only the right to receive Orion
Common Stock certificates representing the number of whole shares of Orion
Common Stock into which the shares of TVS Stock formerly represented by such
certificate have been converted, or the right to receive a Promissory Note, as
applicable. Before issuing any certificate representing Orion Common Stock or
any Promissory Note to any of the TVS Stockholders (as defined in Section 3.4
below), Orion and the Surviving Corporation will require each TVS Stockholders
to execute and return an investment representation certificate ("Investment
Certificate") containing certain representations and warranties of the
investment purposes of the TVS Stockholders in order to establish Orion's and
the Surviving Corporation's compliance with exemptions from the registration
requirements of applicable federal and state securities law with respect to the
issuance of such Orion Common Stock and Promissory Note to the TVS
Stockholders.
Upon receipt of such duly endorsed TVS Stock Certificates and Investment
Certificates, Orion will cause the issuance of the number of shares of Orion
Common Stock as converted pursuant to Section 2.1(a) or 2.1(c) of this
Agreement. For the TVS Preferred Shareholders entitled to receive a Promissory
Note pursuant to Section 2.1(b), the Surviving Corporation will cause a
Promissory Note to be delivered upon the receipt of such duly endorsed TVS
Stock Certificates and Investment Certificates. The Orion Common Stock issued
to the holders of the TVS Stock as a result of the Merger will be restricted
stock and each certificate representing Orion Common Stock will bear a legend
required under the Securities and Exchange Act of 1933.
2.3 No Fractional Shares. No fractional shares of Orion Common Stock
will be issued as a result of the Merger. In lieu of any such fractional
shares, each holder of TVS Stock who would otherwise have been entitled to
receive a fraction of a share of Orion Common Stock in the Merger will be
rounded up to the next nearest whole number of shares of Orion Common Stock.
2.4 Appraisal Rights. Notwithstanding any provision of this Agreement
to the contrary, shares of TVS Stock ("Dissenting Shares") that are issued and
outstanding immediately prior to the Effective Time and which are held by
stockholders who did not vote in favor of the Merger and who comply with all of
the relevant provisions of Section 262 of the DGCL (the "Dissenting
Stockholders") will not be converted into or be exchangeable for the right to
receive Orion Common Stock, unless and until such holders will have failed to
perfect or will have effectively withdrawn or lost their rights to appraisal
under the DGCL. TVS will give Xxxxxxx (i) immediate oral notice followed by
prompt written notice of any written demands for appraisal of any shares of TVS
Stock, attempted withdrawals of any such demands and any other instruments
served pursuant to the DGCL and received by TVS relating to stockholders'
rights of
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appraisal, and (ii) the opportunity to direct all negotiations and proceedings
with respect to demands for appraisal under the DGCL. If any Dissenting
Stockholder fails to perfect or will have effectively withdrawn or lost the
right to appraisal, the shares of TVS Stock held by such Dissenting Stockholder
will thereupon be treated as though such shares had been converted into the
right to receive a Promissory Note pursuant to Section 2.2 of this Agreement.
2.5 No Further Ownership Rights in TVS Stock. The promise to exchange
the TVS Stock for shares of Orion Common Stock in accordance with the terms of
this Section 2 will be deemed to have been given in full satisfaction of all
rights pertaining to the TVS Stock, and there will be no further registration
of transfers on the stock transfer books of TVS of the shares of TVS Stock that
were outstanding immediately prior to the Effective Time. From and after the
Effective Time, the holders of TVS Stock, outstanding immediately prior to the
Effective Time will cease to have any rights with respect to such TVS Stock,
except as otherwise provided in this Agreement or by law.
2.6 Distributions with Respect to Unsurrendered TVS Stock. No dividends
or other distributions declared by Orion with a record date after the Effective
Time will be paid to the holder of any unsurrendered TVS Stock Certificate
until the surrender of such TVS Stock Certificate in accordance with Section
2.2 of this Agreement. Following surrender of any such TVS Stock Certificate,
Orion will pay to the holder of the Orion Common Stock certificate issued in
exchange the TVS Stock Certificate, without interest, (i) at the time of such
surrender, the amount of dividends or other distributions with a record date
after the Effective Time previously paid with respect to such Orion Common
Stock which such holder is entitled pursuant to Section 2.1 of this Agreement,
and (ii) at the appropriate payment date, the amount of dividends or other
distributions with a record date after the Effective Time but prior to such
surrender and with a payment date subsequent to such surrender payable with
respect to such Orion Common Stock. Any TVS Preferred Stock certificates to be
exchanged for a Promissory Note which have not been surrendered on or before
December 31, 2000 will receive only the payment which would have been made on
such Promissory Note at maturity, with no additional interest accruing
thereafter.
2.7 No Liability. Neither Orion, Xxxxxxx, nor Surviving Corporation
will be liable to any person in respect of shares of TVS Stock, or dividends or
distributions with respect thereto, pursuant to any applicable abandoned
property, escheat or similar law. If any TVS Stock Certificate has not been
surrendered prior to seven years after the Effective Time (or immediately prior
to such earlier date on which any TVS Stock Certificate, or any dividends or
distributions payable to the holder of such TVS Stock Certificate would
otherwise escheat to or become the property of any governmental body or
authority), any such Promissory Note, Orion Common Stock, dividends or
distributions in respect of such TVS Stock Certificate will, to the extent
permitted by applicable law, become the property of Surviving Corporation, free
and clear of all claims or interest of any person previously entitled to such
certificate.
2.8 Lost, Stolen or Destroyed Certificates. If any certificate
representing TVS Stock has been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming such certificate to be lost,
stolen or destroyed and, if required by Orion or TVS, the posting by such
person of a bond in such reasonable amount as Orion or TVS may direct as
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indemnity against any claim that may be made against it with respect to such
certificate, Orion or TVS will cause to be issued in exchange for such lost,
stolen or destroyed certificate, the applicable Orion Common Stock or
Promissory Note as the case may be, deliverable in respect thereof, pursuant to
Section 2.1 or 2.2 of this Agreement.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF TVS
TVS represents and warrants to Xxxxxxx and Orion and acknowledges that
Xxxxxxx and Orion are relying upon such representations and warranties, in
connection with the execution, delivery and performance of this Agreement,
notwithstanding any investigation made by or on behalf of Xxxxxxx or Orion:
3.1 Organization and Good Standing. TVS is an entity duly organized,
validly existing and in good standing under the laws of Delaware and has all
requisite corporate power and authority to own, lease and to carry on its
business as now being conducted. TVS is duly qualified to do business and is
in good standing as a foreign corporation in each of the jurisdictions in which
it owns property, leases property, does business, or is otherwise required to
do so, where the failure to be so qualified would have a material adverse
effect on the business of TVS taken as a whole.
3.2 Authority. TVS has all requisite corporate power and authority to
execute and deliver this Agreement, the Certificate of Merger, and any other
document contemplated by this Agreement or the Merger (collectively, the
"Merger Documents") and to perform its obligations thereunder and to consummate
the transactions contemplated thereby. The execution and delivery of each of
the Merger Documents by TVS and the consummation by TVS of the transactions
contemplated thereby have been duly authorized by its Board of Directors, and
the Board of Directors will in turn recommend that the Merger be adopted and
approved by the TVS Stockholders. Subject to the TVS Stockholder approval, no
other corporate or shareholder proceedings on the part of TVS are necessary to
authorize the Merger Documents or to consummate the transactions contemplated
thereby. This Agreement has been, and the other Merger Documents when executed
and delivered by TVS as contemplated by this Agreement will be, duly executed
and delivered by TVS and this Agreement is, and the other Merger Documents when
executed and delivered by TVS as contemplated hereby will be, the valid and
binding obligation of TVS enforceable in accordance with their respective
terms, except (1) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally, and (2) as limited by laws relating
to the availability of specific performance, injunctive relief, or other
equitable remedies.
3.3 Capitalization of TVS. The entire authorized capital stock and
other equity securities of TVS consists of 1,000,000 shares of TVS Common Stock
and 22,000 shares of TVS Preferred Stock, of which 546,380 shares of TVS Common
Stock, and 20,000 shares of TVS Preferred Stock, are issued and outstanding.
All of the issued and outstanding shares of TVS Stock have been duly
authorized, are validly issued, were not issued in violation of any preemptive
rights and are fully paid and nonassessable, are not subject to preemptive
rights and
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were issued in full compliance with all federal, state, and local laws, rules
and regulations. Except as set forth on Disclosure Schedule 3.3, there are no
outstanding options, warrants, subscriptions, phantom shares, conversion
rights, or other rights, agreements, or commitments obligating TVS to issue any
additional shares of TVS Stock, or any other securities convertible into,
exchangeable for, or evidencing the right to subscribe for or acquire from TVS
any shares of TVS Stock. Except as set forth on Disclosure Schedule 3.3, there
are no agreements purporting to restrict the transfer of the TVS Stock, no
voting agreements, voting trusts, or other arrangements restricting or
affecting the voting of the TVS Stock. All dividends accrued, accumulated or
otherwise owing on the the TVS Preferred Stock have been paid in full and TVS
is not in breach or default of any covenant or agreement with respect to the
TVS Preferred Stock.
3.4 Title to TVS Stock. On or before the Closing Date, all of the
issued and outstanding TVS Stock will be lawfully owned by the holders of the
TVS Stock in the respective amounts set forth opposite his, her or its name on
Disclosure Schedule 3.4 (the "TVS Stockholders"), free of preemptive rights
and, to the knowledge of TVS, clear of all claims, liens, charges, security
interest, encumbrances and other restrictions or limitations of any kind.
3.5 Noncontravention. Neither the execution, delivery and performance
of the Merger Documents, nor the consummation of the Merger, will:
(1) Conflict with, result in a violation of, cause a default under
(with or without notice, lapse of time or both) or give rise to a right of
termination, amendment, cancellation or acceleration of any obligation
contained in or the loss of any material benefit under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of
the material properties or assets of TVS under any term, condition or
provision of any loan or credit agreement, note, debenture, bond,
mortgage, indenture, lease or other agreement, instrument, permit,
license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to TVS, or any of its property or assets;
(2) Violate any provision of the certificate of incorporation or
by-laws of TVS; or
(3) Violate any order, writ, injunction, decree, statute, rule, or
regulation of any court or governmental or regulatory authority applicable
to TVS or any of its property or assets.
3.6 Actions and Proceedings. Except as set forth on Disclosure Schedule
3.6, there is no claim, charge, arbitration, grievance, action, suit,
investigation or proceeding by or before any court, arbiter, administrative
agency or other governmental authority now pending or, to TVS's knowledge,
threatened against TVS or which involves any of the business, or the properties
or assets of TVS that, if adversely resolved or determined, would have a
material adverse effect on the business, operations, assets, properties,
prospects, or conditions of TVS taken as a whole ("TVS Material Adverse
Effect"). To TVS's knowledge, there is no reasonable basis for any claim or
action that, based upon the likelihood of its being asserted and its success if
asserted, would have such a TVS Material Adverse Effect. Disclosure Schedule
3.6 lists all pending legal
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claims or proceedings, whether or not such claim or proceeding would result in
a TVS Material Adverse Effect.
3.7 Compliance.
(a) TVS is in compliance with, is not in default or violation in
any material respect under, and have not been charged with or received any
notice at any time of any material violation by it of, any statute, law,
ordinance, regulation, rule, decree or other applicable regulation to the
business or operations of TVS;
(b) TVS is not subject to any judgment, order or decree entered in
any lawsuit or proceeding applicable to its business and operations that would
constitute a TVS Material Adverse Effect;
(c) TVS has, to the best of its knowledge, duly filed all reports
and returns required to be filed by it with governmental authorities and has
obtained all governmental permits and other governmental consents, except as
may be required after the execution of this Agreement. All of such permits and
consents are in full force and effect, and no proceedings for the suspension or
cancellation of any of them, and no investigation relating to any of them, is
pending or to the best knowledge of TVS, threatened, and none of them will be
adversely affected by the consummation of the transactions contemplated hereby;
(d) TVS has, to the best of its knowledge, operated in material
compliance with all laws, rules, statutes, ordinances, orders and regulations
applicable to its business, including without limitation. those applicable to
TVS under the Occupational Safety and Health Act of 1970, as amended, or any
equivalent state law. TVS has not received any notice of any violation
thereof, nor is TVS aware of any valid basis therefore.
3.8 Filings, Consents and Approvals. Except for any filings required by
applicable securities laws and the filing of the Certificate of Merger pursuant
to the DGCL, and the approval of the TVS Stockholders, no filing or
registration with, no notice to and no permit, authorization, consent, or
approval of any public or governmental body or authority or other person or
entity is necessary for the consummation by TVS of the transactions
contemplated by this Agreement or to enable TVS to continue to conduct its
business after the Closing Date in a manner which is consistent with that in
which it is presently conducted.
3.9 Financial Representations. Attached to this Agreement as Disclosure
Schedule 3.9 are true, correct, and complete copies of (i) an unaudited balance
sheet and income statement for TVS dated as of June 30, 1999, (ii) an unaudited
balance sheet and income statement of TVS dated as of March 31, 2000
(collectively, the "Financial Statements"). The Financial Statements (a) are
in accordance with the books and records of TVS and (b) except as noted on
Disclosure Schedule 3.9, present fairly the financial condition of TVS as of
the respective dates indicated and the results of operations for such periods.
TVS has not received any advice or notification from its independent certified
public accountants that TVS has used any improper accounting practice that
would have the effect of not reflecting or incorrectly reflecting in the
Financial Statements or the books and records of TVS, any properties, assets,
liabilities, revenues, or
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expenses. The books, records, and accounts of TVS accurately and fairly
reflect, in reasonable detail, the transactions, assets, and liabilities of
TVS. TVS has not engaged in any transaction, maintained any bank account, or
used any funds of TVS, except for transactions, bank accounts, and funds which
have been and are reflected in the normally maintained books and records of
TVS.
3.10 Absence of Undisclosed Liabilities. Except as set forth in
Disclosure Schedule 3.10, TVS has no liabilities or obligations either direct
or indirect., matured or unmatured, absolute, contingent or otherwise, which:
(a) are not set forth in the Financial Statements or have not
heretofore been paid or discharged;
(b) did not arise in the regular and ordinary course of business
under any agreement, contract, commitment, lease or plan (other than the
modification of TVS's Letter of Credit with F&M Bank as described in Section
5.2(g) below) specifically disclosed (or are not required to be disclosed in
accordance with GAAP); or
(c) have not been incurred in amounts and pursuant to practices
consistent with past business practice, in or as a result of the regular and
ordinary course of its business since the date of the last Financial
Statements.
For purposes of this Agreement, the term "liabilities" includes, any
direct or indirect indebtedness, guaranty, endorsement, claim, loss, damage,
deficiency, cost, expense, obligation or responsibility, fixed or unfixed,
known or unknown, asserted xxxxxx or inchoate, liquidated or unliquidated,
secured or unsecured.
3.11 Inventory. Except as set forth in Disclosure Schedule 3.11, all
inventory of TVS, whether or not reflected in the Financial Statements (as
defined in Section 3.9 of this Agreement), consists of a quality and quantity
usable and salable in the ordinary course of TVS's business, except for
obsolete items and items of below standard quality, all of which have been
written off or written down to net realizable value in the balance sheet and
interim balance sheet of the Financial Statements as of the Closing Date; all
inventories not written off have been priced at the lower of cost or market on
a last in, first out basis; and the quantities of each item of inventory
(whether raw materials, work-in-process, or finished goods) are not excessive,
but are reasonable in the present circumstances of TVS.
3.12 Accounts Receivable. All accounts receivable of TVS that are
reflected on the Financial Statements or other financial records of TVS as of
the Closing Date (collectively, the "Accounts Receivable") represent or will
represent valid obligations arising from sales actually made or services
actually performed in the ordinary course of TVS's business. Unless paid prior
to the Closing Date, the Accounts Receivable are or will be as of the Closing
Date current and collectible, subject to the reserve for uncollectible accounts
set forth on Disclosure Schedule 3.12. Subject to the aforesaid reserve, each
of the Accounts Receivable either has been or will be collected in full,
without any set-off, within one hundred twenty days after the day on which it
first was due and payable. There is no contest, claim, or right of set-off,
other than in the
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ordinary course of TVS's business, under any contract with any obligor of an
Accounts Receivable relating to the amount or validity of such Accounts
Receivable. Disclosure Schedule 3.12 contains a complete and accurate list of
all Accounts Receivable as of March 31, 2000 which list sets forth the aging of
such Accounts Receivable.
3.13 Tax Matters. "Tax" or "Taxes" means any and all taxes, charges,
fees, levies, duties or other assessments whether federal, state, local or
foreign, based upon or measured by income, capital, net worth or gain and any
other tax including, recapture, gross receipts, profits. sales, use,
occupation, use and occupancy, value added, ad valorem, customers, transfer,
franchise, shares, withholding, payroll, employment, excise, or property taxes
with respect to TVS, together with any interest, fines, penalties and additions
to tax imposed with respect thereto.
(a) As of the date hereof: (i) TVS has timely filed all Tax returns
which are required to be filed on or prior to the date hereof, taking into
account any extensions of the filing deadlines which have been validly granted
to them; and (ii) all such returns are true and correct in all material
respects.
(b) TVS has paid all Taxes that have become or are due with respect
to any period ended on or prior to the date hereof, and has established an
adequate reserve therefore on its balance sheet for those Taxes not yet due and
payable, except for any Taxes the nonpayment of which will not have a TVS
Material Adverse Effect.
(c) TVS is not presently under, nor has it received notice of, any
contemplated investigation or audit by the Internal Revenue Service or any
foreign or state taxing authority concerning any fiscal year or period ended
prior to the date hereof.
(d) All Taxes required to be withheld on or prior to the date
hereof from employees for income Taxes, social security Taxes, unemployment
Taxes and other similar withholding Taxes have been properly withheld and, if
required on or prior to the date hereof, have been deposited with the
appropriate governmental agency.
(e) TVS is not a party to any tax-sharing agreements or similar
contracts or arrangements.
3.14 Absence of Changes. Except as set forth in Disclosure Schedule
3.14, since March 31, 2000, TVS has not:
(a) incurred any liabilities, other than liabilities incurred in
the ordinary course of business consistent with past practice, or discharged or
satisfied any lien or encumbrance, or paid any liabilities, other than in the
ordinary course of business consistent with past practice, or failed to pay or
discharge when due any liabilities of which the failure to pay or discharge has
caused or will cause any material damage or risk of material loss to it or any
of its assets or properties;
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(b) sold, encumbered, assigned or transferred any fixed assets or
properties which would have been included in the assets of TVS if the closing
had been held on March 31, 2000 or on any date since then, except for ordinary
course of business transactions consistent with past practice;
(c) created, incurred, assumed or guaranteed any indebtedness for
money borrowed, or mortgaged, pledged or subjected any of the assets or
properties of TVS to any mortgage, lien, pledge, security interest, conditional
sales contract or other encumbrance of any nature whatsoever;
(d) made or suffered any amendment or termination of any material
agreement, contract, commitment, lease or plan to which it is a party or by
which it is bound, or cancelled, modified or waived any substantial debts or
claims held by it or waived any rights of substantial value, whether or not in
the ordinary course of business;
(e) declared, set aside or paid any dividend or made or agreed to
make any other distribution or payment in respect of its capital shares or
redeemed, purchased or otherwise acquired or agreed to redeem, purchase or
acquire any of its capital shares or equity securities;
(f) suffered any damage, destruction or loss, whether or not
covered by insurance, which would materially and adversely affect its business,
operations, assets, properties or prospects;
(g) suffered any material adverse change in its business,
operations, assets, properties, prospects or condition (financial or
otherwise);
(h) received notice or had knowledge of any actual or threatened
labor trouble, termination, resignation, strike or other occurrence, event or
condition of any similar character which has had or might have an adverse
effect on its business, operations, assets, properties or prospects;
(i) made commitments or agreements for capital expenditures or
capital additions or betterments exceeding in the aggregate $5,000.00, except
such as may be involved in ordinary repair, maintenance or replacement of its
assets;
(j) other than in the ordinary course of business, increased the
salaries or other compensation of, or made any advance (excluding advances for
ordinary and necessary business expenses) or loan to, any of its employees or
made any increase in, or any addition to, other benefits to which any of its
employees may be entitled;
(k) changed any of the accounting principles followed or the
methods of applying such principles;
(1) entered into any transaction other than in the ordinary course
of business consistent with past practice; or
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(m) agreed, whether in writing or orally, to do any of the
foregoing.
3.15 Personal Property. Disclosure Schedule 3.15 contains a list of all
material equipment, furniture, fixtures and other tangible personal property
and assets owned or leased by TVS. Except as disclosed on Disclosure Schedule
3.15, TVS possesses all property and items necessary for the continued
operation of the business of TVS as presently conducted. All of such items are
in good operating condition (normal wear and tear excepted), and are reasonably
fit for the purposes for which such item is presently used.
3.16 Accounts. Disclosure Schedule 3.16 sets forth and describes (a) all
bank-accounts owned or maintained by TVS and all authorized signatories with
respect thereto, and (b) all safety deposit boxes maintained by TVS and all
persons who have access with respect thereto.
3.17 Insurance. The assets, properties and operations of TVS are insured
under various policies of general liability and other forms of insurance
consistent with prudent business practices. All such policies are in full
force and effect in accordance with their terms, no notice of cancellation has
been received, and there is no existing default by TVS or any event which, with
the giving of notice, the lapse of time or both, would constitute a default
thereunder. All premiums to date have been paid in full. Disclosure Schedule
3.17 contains a list of all insurance policies, outstanding bonds and other
surety arrangements issued or entered into in connection with the business,
assets and liabilities of TVS.
3.18 Employees and Consultants. Disclosure Schedule 3.18 lists the name,
address. date of hire, title or position, compensation and benefits of each
employee or consultant of TVS. All employees have been paid all salaries,
wages, income and any other sum due and owing to them by TVS as at the end of
the most recent completed pay period. TVS is not aware of any labor conflict
with any of TVS employees that might reasonably be expected to have a TVS
Material Adverse Effect. TVS has not entered into any written contracts of
employment or consulting agreements other than as listed on Disclosure Schedule
3.18. All amounts required to be withheld by TVS from their employees salaries
or wages and paid to any governmental or taxing authority have been so withheld
and paid.
3.19 ERISA Compliance; Benefit Plans.
(a) Disclosure Schedule 3.19 contains a true and complete list of
each deferred compensation and each bonus or other incentive compensation,
stock purchase, stock option ("TVS Stock Option") and other equity compensation
plan program, agreement or arrangement, each severance or termination pay,
medical, surgical, hospitalization, life insurance and other "welfare" plan,
fund or program (within the meaning of Section 3(1) of the Employee Retirement
Income Security Act of 1974, as amended, and the rules and regulations
promulgated thereunder ("ERISA")); each profit-sharing, stock bonus or other
"pension" plan, fund or program (within the meaning of Section 3(2) of ERISA),
each employment, termination or severance agreement, and each other employee
benefit plan, fund, program, agreement or arrangement, in each case, that is
sponsored, maintained or contributed to or required to be contributed to by TVS
or by any trade or business, whether or not incorporated (an "ERISA
Affiliate"), that together with TVS
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would be deemed a "single employer" within the meaning of Section 4001(b) of
ERISA, or to which TVS or an ERISA Affiliate is party, whether written or oral,
for the benefit of any director, employee or former employee of TVS (the
"Plans"). Neither TVS nor any ERISA Affiliate has any commitment or formal
plan, whether legally binding or not, to create any additional Plan or modify
or change any existing Plan.
(b) With respect to each Plan, TVS has heretofore delivered or made
available to Xxxxxxx true and complete copies of each of the following
documents:
(i) a copy of such Plan and any amendment thereto (or if
such Plan is not a written Plan, a description thereof);
(ii) a copy of the two most recent annual reports and
actuarial reports, if required under ERISA, and the most recent
report prepared with respect thereto in accordance with Statement of
Financial Accounting Standards No. 87;
(iii) a copy of the most recent Summary Plan Description
required under ERISA with respect thereto;
(iv) if such Plan is funded through a trust or any third
party funding vehicle, a copy of the trust or other funding
agreement and the latest financial statements thereof; and
(v) the most recent determination letter received from the
Internal Revenue Service with respect to each Plan intended to
qualify under Section 401 of the Code.
(c) No Plan is subject to Section 302 or Title IV of ERISA or
Section 412 of the Code. No Plan is a "multiemployer pension plan," as defined
in Section 3(37) of ERISA. No liability under Title IV or Section 302 of ERISA
has been incurred by TVS or any ERISA Affiliate that has not been satisfied in
full.
(d) All contributions required to be made with respect to any Plan
on or prior to the Closing Date have been timely made or are reflected on the
balance sheet.
(e) Neither TVS, any Plan, any trust created thereunder, or any
trustee or administrator thereof has engaged in a transaction in connection
with which TVS or any of its subsidiaries, any Plan, any such trust or any
trustee or administrator thereof, or any party dealing with any Plan or any
such trust could be subject to either a civil penalty assessed pursuant to
Section 409 or 502(i) of ERISA or a tax imposed pursuant to Section 4975 or
4976 of the Code.
(f) Each Plan has been operated and administered in all material
respects in accordance with its terms and applicable law, including but not
limited to ERISA and the Code.
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(g) Each Plan intended to be "qualified" within the meaning of
Section 401(a) of the Code is so qualified and the trusts maintained thereunder
are exempt from taxation under Section 501(a) of the Code.
(h) No Plan provides medical, surgical, hospitalization, death or
similar benefits (whether or not insured) for employees or former employees of
TVS for periods extending beyond their retirement or other termination of
service, other than (A) coverage mandated by applicable law, (B) death benefits
under any "pension plan" or (C) benefits the full cost of which is borne by the
current or former employee (or his beneficiary). No condition exists that
would prevent TVS from amending or terminating any Plan providing health or
medical benefits in respect of any active employee of TVS.
(i) The consummation of the transactions contemplated by this
Agreement will not, either alone or in combination with another event, (A)
entitle any current or former employee or officer of' TVS or any ERISA
Affiliate to severance pay, unemployment compensation or any other payment,
except as expressly provided in this Agreement, or (B) accelerate the time of
payment or vesting or increase se the amount of compensation due any employee
or officer of TVS or any ERISA Affiliate.
(j) There has been no material failure of a Plan that is a group
health plan (as defined in Section 5000(b)(1) of the Code) to meet the
requirements of Section 4980B(f) of the Code with respect to a qualified
beneficiary (as defined in Section 4980B(g) of the Code).
(k) There are no pending, threatened or anticipated claims by or on
behalf of any Plan by any employee or beneficiary covered under any such Plan,
or otherwise involving any such Plan (other than routine claims for benefits.
(l) No amounts payable under the Plans will fail to be deductible
for federal income tax purposes by virtue of section 280G of the Code.
3.20 Intellectual Property.
(a) Intellectual Property Assets. The Intellectual Property
Assets are all those necessary for the operation of TVS's business as it is
currently conducted. The term "Intellectual Property Assets" includes:
(1) the name Transaction Verification Systems,
Incorporated, all functional business names, trading names,
registered and unregistered trademarks, service marks, and
applications collectively, "Marks");
(2) all patents, patent applications, and inventions and
discoveries that may be patentable (collectively, "Patents");
(3) all copyrights in both published works and
unpublished works (collectively, "Copyrights");
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(4) all know-how, trade secrets, confidential information,
customer lists, software, technical information, data, process
technology, plans, drawings, and blue prints owned, used, or
licensed by TVS as licensee or licensor (collectively, "Trade
Secrets").
(b) Agreements. Disclosure Schedule 3.20 contains a complete and
accurate list and summary description, including any royalties paid or received
by TVS, of all contracts and agreements relating to the Intellectual Property
Assets to which TVS is a party or by which TVS is bound, except for any license
implied by the sale of a product and perpetual, paid-up licenses for commonly
available software programs with a value of less than $2,500 under which TVS is
the licensee. There are no outstanding or threatened disputes or disagreements
with respect to any such agreement.
(c) Intellectual Property and Know-How Necessary for the Business.
Except as set forth in Disclosure Schedule 3.20, TVS is the owner of all right,
title, and interest in and to each of the Intellectual Property Assets, free
and clear of all liens, security interests, charges, encumbrances, and other
adverse claims, and has the right to use without payment to a third party of
all the Intellectual Property Assets. Except as set forth in Disclosure
Schedule 3.20, all former and current employees and contractors of TVS have
executed written contracts, agreements or other undertakings with TVS that
assign all rights to any inventions, improvements, discoveries, or information
relating to the business of TVS. No employee, director, officer or shareholder
of any of TVS owns directly or indirectly in whole or in part, any Intellectual
Property Asset which TVS is presently using or which is necessary for the
conduct of its business. To the best of TVS's knowledge, no employee or
contractor of TVS has entered into any contract or a agreement that restricts
or limits in any way the scope or type of work in which the employee may be
engaged or requires the employee to transfer, assign, or disclose information
concerning his work to anyone other than TVS.
(d) Patents. Disclosure Schedule 3.20 contains a complete and
accurate list and Summary description of all Patents necessary for TVS's
business. Except as set forth in Disclosure Schedule 3.20, TVS is the owner
of all right, title, and interest in and to each of the Patents, free and clear
of all liens, security interests, charges, encumbrances, and other adverse
claims. All of such issued Patents are currently in compliance with formal
legal requirements (including payment of filing, examination, and maintenance
fees and proofs of working or use), are valid and enforceable, and are not
subject to any maintenance fees or taxes or actions falling, due within ninety
days after the Effective Time. No Patent has been or is now involved in any
interference, reissue, reexamination, or opposition proceeding. There is no
potentially interfering patent or patent application of any third party. No
Patent is infringed or has been challenged or threatened in any way. To the
best of TVS's knowledge, none of the products manufactured and sold, nor any
process or know-how used, by TVS infringe or is alleged to infringe any patent
or other proprietary night of any other person or entity. All products made,
used, or sold under such Patents have been marked with the proper patent
notice.
(e) Trademarks. Disclosure Schedule 3.20 contains a complete and
accurate list and summary description of all Marks necessary for TVS's business
and the jurisdiction where the Xxxx is registered, if applicable. To the best
of TVS's knowledge: TVS is the owner
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of all right, title, and interest in and to each of the Marks, free and clear
of all liens, security interests, charges. encumbrances, and other adverse
claims; all Marks that have been registered with the United States Patent and
Trademark Office or any other country's trademark registration office are
currently in compliance with all formal legal requirements (including the
timely post-registration filing of affidavits of use and incontestability and
renewal applications), are valid and enforceable, and are not subject to any
maintenance fees or taxes or actions falling due within ninety days after the
Effective Time; no Xxxx has been or is now involved in any opposition,
invalidation, or cancellation and no such action is threatened with the respect
to any of the Marks; there is no potentially interfering trademark or trademark
application of any third party; no Xxxx is infringed or has been challenged or
threatened in any way; and none of the Marks used by TVS infringes or is
alleged to infringe any trade name, trademark, or service xxxx of any third
party.
(f) Copyrights. Disclosure Schedule 3.20 contains a complete and
accurate list and summary description of all Copyrights necessary for TVS's
business. TVS is the owner of all right, title, and interest in and to each of
such Copyrights, free and clear of all liens, security interests, charges,
encumbrances, and other adverse claims. All such Copyrights have been
registered and are currently in compliance with formal legal requirements, are
valid and enforceable, and are not subject to any maintenance fees or taxes or
actions falling due within ninety days after the Effective Time. No such
Copyright is infringed or has been challenged or threatened in any way. None
of the subject matter of any of such Copyrights infringes or is alleged to
infringe in any copyright of any third party or is a derivative work based on
the work of a third party. All works encompassed by such Copyrights have been
marked with the proper copyright notice.
(g) Trade Secrets. Disclosure Schedule 3.20 sets forth all
material Trade Secrets necessary for TVS's business. TVS has taken all
reasonable precautions to protect the secrecy, confidentiality, and value of
such Trade Secrets. TVS has good title and an absolute (but not necessarily
exclusive) right to use such Trade Secrets. Such Trade Secrets are not part of
the public knowledge or literature, and have not been used, divulged, or
appropriated either for the benefit of any person or entity or to the detriment
of TVS. None of such Trade Secret is subject to any adverse claim or has been
challenged or threatened in any way.
3.21 Real Property. TVS does not own any real property. Disclosure
Schedule 3.21 lists all leases, subleases or other real property interests
(collectively, "Leases") to which TVS is a party or bound. Each of the Leases
are legal, valid, binding, enforceable and in full force and effect in all
material respects. All rental and other payments required to be paid by TVS
pursuant to any such Leases have been duly paid and no event has occurred
which, upon the passing of time, the giving of notice, or both, would
constitute a breach or default by any party under any of the Leases. The
Leases will continue to be legal, valid, binding, enforceable and in full force
and effect on identical terms following the Closing Date. TVS has not
assigned, transferred, conveyed, mortgaged, deeded in trust, or encumbered any
interest in the Leases or the leasehold property pursuant thereto. TVS has
delivered a true and complete copy of each of the Leases to Xxxxxxx or its
counsel.
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3.22 Environmental Matters. TVS is in compliance with all applicable
environmental laws, which compliance includes, but is not limited to, the
possession by TVS of all permits and other governmental authorizations required
under applicable federal, state, local and foreign laws and regulations
relating, to pollution, protection of human health or the environment,
including, without limitation, those relating to releases or threatened
releases of Hazardous Materials (as defined Contaminants in the National Oil
and Hazardous Substances Pollution Contingency Plan, 40 C.F.R. Sec. 300.5) or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, transport or handling of Hazardous Materials. As of the
date of this Agreement, TVS has not received any written communication, whether
from a governmental entity, citizens' group, employee or otherwise, alleging,
that TVS is not in such compliance.
3.23 Material Contracts and Transactions. Disclosure Schedule 3.23
contains a list of all material contracts, agreements, licenses, permits,
arrangements, commitments, instruments, understandings or contracts, whether
written or oral, express or implied, contingent, fixed or otherwise, to which
TVS is a party (collectively, the "Contracts").
(a) Except as listed on Disclosure Schedule 3.23, TVS is not a party to
any written or oral Contract as follows:
(1) agreement for the purchase, sale or lease of any capital
assets, or continuing contracts for the purchase or lease of any
materials, supplies, equipment, real property or services;
(2) agreement regarding, sales agency, distributorship, or the
payment of commissions;
(3) agreement for the employment or consultancy of any person
or entity;
(4) note, debenture, bond, trust agreement, letter of credit
agreement loan agreement, or other contract or commitment for the
borrowing or lending of money, or agreement or arrangement for a line of
credit or guarantee, pledge, or undertaking of the indebtedness of any
other person;
(5) agreement, contract, or commitment for any charitable or
political contribution;
(6) agreement, contract, or commitment limiting or restraining
TVS, their business or any successor thereto from engaging or competing in
any manner or in any business or from hiring any employees, nor to TVS's
knowledge is any employee of TVS subject to any such agreement, contract,
or commitment;
(7) material agreement, contract, or commitment not made in
the ordinary course of business;
(8) agreement establishing or providing for any joint venture,
partnership, or similar arrangement with any other person or entity;
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(9) agreement, contract or understanding containing a "change
in control" provision; or
(10) power of attorney or similar authority to act.
(b) Each Contract is in full force and effect, and there exists no
material breach or violation of or default by TVS under any Contract nor, to
the best of TVS's knowledge, by any other party to a Contract, or any event
that with notice or the lapse of time, or both, will create a material breach
or violation thereof or default under any Contract by TVS or, to the best of
TVS's knowledge, by any other party to a Contract. The continuation, validity,
and effectiveness of each Contract will in no way be affected by the
consummation of the transactions contemplated by this Agreement. Except as
listed on Disclosure Schedule 3.23, there exists no actual or threatened
termination, cancellation, or limitation of, or any amendment, modification, or
change to any Contract. A true, correct and complete copy (and if oral, a
description of material terms) of each Contract, as amended to date, has been
furnished to Xxxxxxx.
3.24 Products and Services Warranties; Liabilities. Each product sold,
leased or delivered and each service performed by TVS has been in substantial
conformity with all applicable contractual commitments and all express and
implied warranties, and TVS has no material liability, and there is no basis
for any present or future action, suit or proceeding, for the replacement or
repair of any product, the substandard performance of any service, or other
damages in connection with the products sold or the services provided by TVS.
TVS enjoys good commercial relations with each of its customers and suppliers.
Since March 31, 2000, TVS has received no communication from any of its
customers or suppliers expressing significant dissatisfaction.
3.25 Transactions with Affiliates. TVS has not entered into any
contract, loan, commitment, transaction or in any other situation with any its
officers, directors, affiliates, employees or stockholders which may generally
be characterized as a "conflict of interest," including, without limitation,
any direct or indirect interest in the business of competitors, suppliers or
customers of TVS.
3.26 No Brokers. TVS has not incurred any obligation or liability
to any party for any brokerage fees, agent's commissions, or finder's fees in
connection with the transactions contemplated by this Agreement for which
Xxxxxxx would be responsible.
3.27 Completeness of Disclosure. No representation or warranty by TVS in
this Agreement nor any certificate, schedule, statement, document or instrument
furnished or to be furnished to Xxxxxxx or Orion pursuant hereto contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact required to be stated herein or therein or necessary to
make any statement herein or therein not materially misleading.
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SECTION 4
REPRESENTATIONS AND WARRANTIES OF
ORION AND XXXXXXX
Orion and Xxxxxxx represent and warrant to TVS and acknowledge that TVS is
relying upon such representations and warranties in connection with the
execution, delivery and performance of this Agreement, notwithstanding any
investigation made by or on behalf of TVS.
4.1 Organization and Good Standing. Orion and Xxxxxxx are duly
organized, validly existing and in good standing under the laws of Nevada and
Delaware, respectively, and have all requisite corporate power and authority to
own, lease and to carry on their respective businesses as now being conducted.
Orion and Xxxxxxx are duly qualified to do business and is in good standing as
foreign corporations in each of the jurisdictions in which each owns property,
leases property, does business, or is otherwise required to do so, where the
failure to be so qualified would have a material adverse effect on the
businesses, operations, or financial condition of Orion or Xxxxxxx.
4.2 Authority. Xxxxxxx and Orion each has all requisite corporate power
and authority to execute and deliver this Agreement, the Certificate of Merger,
and any other document contemplated by this Agreement or the Merger
(collectively, the "Merger Documents") and to perform its respective
obligations thereunder and to consummate the transactions contemplated thereby.
The execution and delivery of each of the Merger Documents by Xxxxxxx and Orion
and the consummation by Xxxxxxx and Orion of the transactions contemplated
thereby have been duly authorized by its Board of Directors and, by the Closing
Date will have been adopted and approved by the stockholders of Xxxxxxx and
Orion, and, subject to such stockholder approval, no other corporate or
shareholder proceedings on the part of Xxxxxxx or Orion are necessary to
authorize such documents or to consummate the transactions contemplated
thereby. This Agreement has been, and the other Merger Documents when executed
and delivered by Xxxxxxx and Orion as contemplated by this Agreement will be,
duly executed and delivered by Xxxxxxx and Orion and this Agreement is, and the
other Merger Documents when executed and delivered by Xxxxxxx and Orion as
contemplated hereby will be, the valid and binding obligation of Xxxxxxx and
Orion enforceable in accordance with their respective terms, except (1) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application affecting enforcement of creditors' rights
generally, and (2) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies.
4.3 Capitalization of Orion. The entire authorized capital stock and
other equity securities of Orion ("Orion Stock") consists of 25,000,000 shares
of common stock, par value $0.001 ("Orion Common Stock") and 2,500,000 shares
of Series A Preferred Stock, no par value ("Orion Preferred Stock"). On the
Closing Date there will be not more than 4,506,935 shares of Orion Common
Stock, and 65,000 shares of Orion Preferred Stock, which are issued and
outstanding or which are issuable on the exercise of any convertible
debentures, options, or warrants. To the knowledge of Orion and Xxxxxxx with
respect to all shares of Orion Stock issued prior to August 1997, all of the
issued and outstanding shares of Orion Stock have been duly authorized, are
validly issued, were not issued in violation of any preemptive rights and are
fully
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paid and nonassessable, are not subject to preemptive rights and were issued in
full compliance with all federal, state, and local laws, rules and regulations.
There are no outstanding options, warrants, subscriptions, phantom shares,
conversion rights, or other rights, agreements, or commitments obligating Orion
to issue more than 450,000 shares of Orion Common Stock, or any other
securities convertible into, exchangeable for, or evidencing the right to
subscribe for or acquire from Orion more than 450,000 shares of Orion Common
Stock.
4.4 Capitalization of Xxxxxxx. The entire authorized capital stock and
other equity securities of Xxxxxxx ("Xxxxxxx Stock") consists of 120,000,000
shares of common stock, par value $0.001 ("Xxxxxxx Common Stock"), of which
5,000,000 shares are issued and outstanding in the name of Orion. There are no
authorized or issued preferred shares of Xxxxxxx Common Stock. To the
knowledge of Orion and Xxxxxxx, all of the issued and outstanding shares of
Xxxxxxx Common Stock have been duly authorized, are validly issued, were not
issued in violation of any preemptive rights and are fully paid and
nonassessable, are not subject to preemptive rights and were issued in full
compliance with all federal, state, and local laws, rules and regulations.
4.5 Validity of Orion Common Stock Issuable Upon the Merger. The shares
of Orion Common Stock to be issued to the TVS Stockholders upon consummation of
the Merger in accordance with Section 2.1 of this Agreement have been duly and
validly authorized and, when so issued in accordance with the terms of this
Agreement, will be duly and validly issued, fully paid and nonassessable.
4.6 No Assets or Liabilities of Xxxxxxx. Xxxxxxx does not have any
material assets or liabilities as of the date of this Agreement and will not
have any material assets or liabilities as of the Effective Date. As of the
date of this Agreement, Xxxxxxx is not conducting any business.
4.7 Actions and Proceedings. There is no claim, charge, arbitration,
grievance, action, suit, investigation or proceeding by or before any court,
arbiter, administrative agency or other governmental authority now pending or,
to Xxxxxxx'x and Orion's knowledge, threatened against either Xxxxxxx or Orion
which involves any of the business, or the properties or assets of Xxxxxxx
that, if adversely resolved or determined, would have a material adverse effect
on the business, operations, assets, properties, prospects, or conditions of
Xxxxxxx taken as a whole ("Xxxxxxx Material Adverse Effect"). There is no
reasonable basis for any claim or action that, based upon the likelihood of its
being asserted and its success if asserted, would have such a Xxxxxxx Material
Adverse Effect.
4.8 Orion Reports and Financial Statements.
(a) Since February 22, 2000, Orion has timely filed all forms,
reports, statements and other documents required to be filed with the SEC
(collectively, the "Orion SEC Reports"). The Orion SEC Reports, including all
Orion SEC Reports filed after the date of this Agreement and prior to the
Effective Time, were or will be prepared in all material respects in accordance
with the requirements of applicable law (including, the Securities Act and the
Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such Orion SEC Reports). As of their respective
dates, the Orion SEC Reports did not contain any untrue statement of a material
fact or omit to state a material fact required to be
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stated therein or necessary to make the statements made therein, in the light
of the circumstances under which they were made, not misleading.
(b) Each of the financial statements (including, in each case, any
related notes thereto) contained in the Orion SEC Reports, if any, filed prior
to, on or after the date of this Agreement (i) have been or will be prepared in
accordance with, and complied or will comply as to form with, the published
rules and regulations of the SEC and GAAP applied on a consistent basis
throughout the periods involved (except as otherwise noted therein) and (ii)
fairly present or will fairly present the financial position of Orion as of the
respective dates thereof and the results of its operations and cash flows for
the periods indicated, except that any unaudited interim financial statements
were or will be subject to normal and recurring year-end adjustments.
4.9 Absence of Certain Changes or Events. Except as and to the extent
disclosed in the Orion SEC Reports filed prior to the date of this Agreement or
as contemplated in this Agreement or as otherwise disclosed in writing by Orion
to TVS prior to the Effective Time, since February 22, 2000, there has not been
(a) a material adverse effect to the business, operations, or financial
conditions of Orion, or (b) any significant change by Orion in its accounting
methods, principles or practices.
4.10 Filings, Consents and Approvals. Except for any filings required by
applicable securities laws and the filing of the Certificate of Merger pursuant
to the DGCL, the approval of Orion as the sole Xxxxxxx stockholder, no filing
or registration with, no notice to and no permit, authorization, consent, or
approval of any public or governmental body or authority or other person or
entity is necessary for the consummation by Xxxxxxx of the transactions
contemplated by this Agreement or to enable Xxxxxxx to continue to conduct its
business after the Closing Date in a manner which is consistent with that in
which it is presently conducted.
4.11 No Brokers. Neither Orion nor Xxxxxxx has incurred any obligation
or liability to any party for any brokerage fees, agent's commissions, or
finder's fees in connection with the transactions contemplated by this
Agreement for which TVS would be responsible.
4.12 Completeness of Disclosure. No representation or warranty by
Xxxxxxx or Orion in this Agreement nor any certificate, schedule, statement,
document or instrument furnished or to be furnished to TVS pursuant hereto
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact required to be stated herein or therein or
necessary to make any statement herein or therein not materially misleading.
SECTION 5
CLOSING CONDITIONS
5.1 Conditions Precedent to Closing by Xxxxxxx. Xxxxxxx'x obligation to
consummate the Merger is subject to the satisfaction of the conditions set
forth below, unless any such condition is waived by Xxxxxxx at the Closing.
The Closing of the transactions contemplated by this Agreement will be deemed
to mean a waiver of all conditions to Closing.
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(a) Representations and Warranties. The representations and
warranties of TVS set forth in this Agreement will be true, correct and
complete in all respects as of the Closing Date, as though made on and as of
the Closing Date and TVS will have delivered to Xxxxxxx a certificate dated as
of the Closing Date, to the effect that the representations and warranties made
by TVS in this Agreement are true and correct.
(b) Performance. All of the covenants and obligations that TVS is
required to perform or to comply with pursuant to this Agreement at or prior to
the Closing must have been performed and complied with in all material
respects.
(c) Approval by TVS Stockholders. The TVS Stockholders will have
approved and adopted this Agreement and the Merger as required by the DGCL.
(d) Merger Documents. This Agreement and all other Merger
Documents necessary or reasonably required to consummate the Merger, all in
form and substance reasonably satisfactory to Xxxxxxx, will have been executed
and delivered to Xxxxxxx.
(e) Secretary's Certificate - TVS. Xxxxxxx will have received a
certificate of the Secretary of TVS attaching (a) a copy of TVS's certificate
of incorporation, as amended through the Closing Date certified by the
Secretary of State of the State of Delaware; (b) a true and correct copy of
TVS's bylaws, as amended; (c) certified copies of resolutions duly adopted by
the Board of Directors of TVS and the TVS Stockholders approving the execution
and delivery of this Agreement and the other Merger Documents and the
consummation of the Merger and the other transactions contemplated hereby and
thereby; and (d) a certificate as to the incumbency and signatures of the
officers of TVS executing this Agreement and the Merger Documents executed on
the Closing Date as contemplated by this Agreement.
(f) Opinion of TVS's Counsel. TVS will furnish Xxxxxxx with an
opinion, dated as of the Closing Date, of Xxxxxxx X. Xxxxxxx, Esq., counsel
for TVS, and such other local or special counsel as is appropriate, all of
which. opinions will be in form and substance reasonably satisfactory to
Xxxxxxx and its counsel.
(g) Employment Agreements. Orion will have entered into an
employment agreement with Xx. Xxxxxx X. Xxxxxxx, and TVS will have entered into
employment agreements with such other key executives as Xxxxxxx deems
appropriate and otherwise on terms agreeable to Orion, Xxxxxxx, TVS, and the
applicable key executives.
(h) Stock Escrow Agreement. Orion will have received a stock
escrow agreement in substantially the form of Exhibit B attached to this
Agreement (the "Escrow Agreement"), executed by the Majority Stockholders (as
defined in the Escrow Agreement).
(i) Exercise of TVS Stock Options. Xxxxxxx will have received
evidence from TVS that all of the warrants, options, or other rights to acquire
TVS Stock ("TVS Stock Options") have been exercised by the holders of the TVS
Stock Options for the issuance of TVS Common Stock and TVS Stock Certificates
therefore.
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(j) Exercise of Appraisal Rights. The holders of no more than two
percent (2%) of the shares of TVS Stock will have exercised appraisal rights
under the DGCL as Dissenting Shareholders. TVS will have resolved all matters
of appraisal and payment under the DGCL for each Dissenting Shareholder to
Xxxxxxx'x satisfaction.
(k) Investment Certifiates. Orion will have received Investment
Certificates (as defined in Section 2.2) from each TVS Stockholder entitled to
receive Orion Common Stock in the Merger.
(l) Supplement to Disclosure Schedules. Any additional disclosures
made in the supplemental Disclosure Schedules of TVS made pursuant to Section
6.2 of this Agreement will be acceptable to Xxxxxxx in its sole discretion.
(m) Third Party Consents. TVS will have received duly executed
copies of all third-party consents and approvals contemplated by the Merger
Documents, in form and substance reasonably satisfactory to Xxxxxxx.
(n) No Material Adverse Change. No TVS Material Adverse Effect
will have occurred since the date of this Agreement.
(o) No Action. No suit, action, or proceeding will be pending or
threatened before any governmental or regulatory authority wherein an
unfavorable judgment, order, decree, stipulation, injunction or charge would
(i) prevent the consummation of any of the transactions contemplated by this
Agreement, or (ii) cause the transactions to be rescinded following
consummation.
(p) Accounts Receivable Report. Orion will have received a true
and accurate list of TVS Accounts Receivable as of the Closing Date (or other
date acceptable to Orion), including an aging report for such Accounts
Receivable.
(q) Due Diligence Review. Xxxxxxx and Orion will be reasonably
satisfied in all respects with their due diligence investigation and review of
TVS.
5.2 Conditions Precedent to Closing by TVS. TVS's obligation to
consummate the Merger is subject to the satisfaction of the conditions set
forth below, unless such condition is waived by TVS at the Closing. The
Closing of the Merger will be deemed to mean a waiver of all conditions to
Closing.
(a) Representations and Warranties. The representations and
warranties of Xxxxxxx and Orion set forth in this Agreement will be true,
correct and complete in all respects as of the Closing Date, as though made on
and as of the Closing Date and Xxxxxxx and Orion will have delivered to TVS a
certificate dated the Closing Date, to the effect that the representations and
warranties made by Xxxxxxx or Orion in this Agreement are true and correct.
(b) Performance. All of the covenants and obligations that Xxxxxxx
or Orion is required to perform or to comply with pursuant to this Agreement at
or prior to the Closing
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must have been performed and complied with in all material respects. Xxxxxxx
must have delivered each of the documents required to be delivered by it
pursuant to this Agreement.
(c) Approval by Xxxxxxx Stockholder. Orion, as Xxxxxxx'x sole
stockholder, will have approved and adopted this Agreement and the Merger as
required by the DGCL.
(d) Merger Documents. This Agreement and all other Merger
Documents necessary or reasonably required to consummate the transaction
contemplated by this Agreement, all in form and substance reasonably
satisfactory to TVS, will have been executed and delivered by Xxxxxxx.
(e) Secretary's Certificate - Xxxxxxx. TVS will have received a
certificate of the Secretary of Xxxxxxx attaching (a) a copy of Xxxxxxx'x
certificate of incorporation, as amended through the Closing Date certified by
the Secretary of State of the State of Delaware; (b) a true and correct copy of
Xxxxxxx'x bylaws, as amended; (c) certified copies of resolutions duly adopted
by the Board of Directors of Xxxxxxx and the sole stockholder of Xxxxxxx,
approving the execution and delivery of this Agreement and the other Merger
Documents and the consummation of the Merger and the other transactions
contemplated hereby and thereby; and (d) a certificate as to the incumbency and
signatures of the officers of Xxxxxxx executing this Agreement and the Merger
Documents executed by Xxxxxxx on the Closing Date as contemplated by this
Agreement.
(f) Opinion of Xxxxxxx'x Counsel. Xxxxxxx will furnish TVS with an
opinion, dated as of the Closing Date, of Powell, Goldstein, Xxxxxx & Xxxxxx
LLP, as Counsel for Xxxxxxx, and such other local or special counsel as is
appropriate, all of which opinions will be in form and substance reasonably
satisfactory to TVS and its counsel.
(g) Financing. (i) TVS will have received written confirmation
from Orion that it will contribute the sum of Three Hundred Thousand Dollars
($300,000) to Surviving Corporation in accordance with a budget and on a
schedule mutually agreeable to Orion and TVS, to be used as working capital by
Surviving Corporation; and (ii) F&M Bank will have released all of the personal
guarantors from TVS's Line of Credit with F&M Bank, whether by virtue of a
guaranty of such Line of Credit or otherwise.
(h) Supplement to Disclosure Schedules. Any additional disclosures
made in the supplemental Disclosure Schedules of Xxxxxxx made pursuant to
Section 6.2 of this Agreement will be acceptable to TVS in its sole discretion.
(i) Employment Agreement. Orion will have entered into an
employment agreement with Xx. Xxxxxx Xxxxxxx on terms mutually agreeable to
Orion and Xx. Xxxxxxx.
(j) Third Party Consents. Xxxxxxx will have received duly executed
copies of all third-party consents and approvals contemplated by the Merger
Documents, in form and substance reasonably satisfactory to TVS.
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(k) No Material Adverse. No Xxxxxxx Material Adverse Effect will
have occurred since the date of this Agreement.
(l) No Action. No suit, action, or proceeding will be pending or
threatened before any governmental or regulatory authority wherein an
unfavorable judgment, order, decree, stipulation, injunction or charge would
(i) prevent consummation of any of the transactions contemplated by this
Agreement; or (ii) cause the transactions to be rescinded following
consummation.
SECTION 6
ADDITIONAL COVENANTS OF THE PARTIES
6.1 Access and Investigation. Between the date of this Agreement and
the Closing Date, each of TVS and Xxxxxxx will, and will cause each of their
respective representatives to, (a) afford the other and its representatives
full and free access to its personnel, properties, contracts, books and
records, and other documents and data, (b) furnish the other and its
representatives with copies of all such contracts, books and records, and other
existing documents and data as required by this Agreement and as the other may
otherwise reasonably request, and (c) furnish the other and its representatives
with such additional financial, operating, and other data and information as
the other may reasonably request. All of such access, investigation and
communication by a party and its representatives will be conducted in a manner
designed not to interfere unduly with the normal business operations of the
other party.
6.2 Notification. Between the date of this Agreement and the Effective
Time, each of the parties to this Agreement will promptly notify the other
parties in writing if it becomes aware of any fact or condition that causes or
constitutes a material breach of any of its representations and warranties as
of the date of this Agreement, if it becomes aware of the occurrence after the
date of this Agreement of any fact or condition that would cause or constitute
a material breach of any such representation or warranty had such
representation or warranty been made as of the time of occurrence or discovery
of such fact or condition. Should any such fact or condition require any
chance in the Disclosure Schedules relating to such party, such party will
promptly deliver to the other parties a supplement to the Disclosure Schedules
specifying such change. During the same period, each party will promptly
notify the other parties of the occurrence of any material breach of any of its
covenant in this Agreement or of the Occurrence of any event that may make the
satisfaction of such conditions impossible or unlikely.
6.3 No Negotiation. Until such time, if any, as this Agreement is
terminated pursuant to Section 7, TVS will not, directly or indirectly solicit,
initiate, or accept any inquiries or proposals from, discuss or negotiate with,
provide any nonpublic information to, or consider the merits of any unsolicited
inquiries or proposals from, any person or entity (other than Xxxxxxx or Orion)
relating to any transaction involving the sale of the business or assets (other
than in the ordinary course of business), or any of the capital stock of TVS,
or any merger, consolidation, business combination, or similar transaction.
6.4 Conduct of TVS Business Prior to Closing. From the date of this
Agreement to the Closing Date, and except to the extent that Xxxxxxx otherwise
consents in writing, TVS will
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operate its business substantially as presently operated and only in the
ordinary course and in compliance with all applicable laws, and use its best
efforts to preserve intact its good reputation and present business
organization and to preserve its relationships with persons having business
dealings with it.
6.5 Certain Acts Prohibited. Between the date of this Agreement and the
Closing Date, TVS will not, without the prior written consent of Xxxxxxx:
(a) amend its certificate of incorporation, by-laws or other
organizational documents;
(b) incur any liability or obligation other than in the
ordinary course of business or encumber or permit the encumbrance of any
properties or assets of TVS, except as disclosed in a Disclosure Schedule to
this Agreement;
(c) dispose of or contract to dispose of any TVS property or
assets except in the ordinary course of business consistent with past practice;
(d) issue, deliver, sell, pledge or otherwise encumber or
subject to any lien any shares of the TVS Stock, or any rights, warrants or
options to acquire, any such shares, voting securities or convertible
securities (other than the issuance of TVS Stock in exchange for the TVS Stock
Options);
(e) (i) declare, set aside or pay any dividends on, or make
any other distributions in respect of the TVS Stock, or (ii) split, combine or
reclassify any TVS Stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of TVS
Stock, except upon exercise of rights or options issued pursuant to any
existing TVS Stock Option plan or agreement; or
(f) not materially increase benefits or compensation expenses
of TVS, other than as contemplated by the terms of any employment agreement in
existence on the date of this Agreement, increase the cash compensation of any
director, executive officer or other key employee or pay any benefit or amount
not required by a Plan or arrangement as in effect on the date of this
Agreement to any such person
6.6 Certain Acts Prohibited. Between the date of this Agreement and the
Closing Date, Xxxxxxx will not, without the prior written consent of TVS:
(a) amend its certificate of incorporation, by-laws or other
organizational documents;
(b) incur any liability or obligation other than in the
ordinary course of business or encumber or permit the encumbrance of any
properties or assets of Xxxxxxx, except as disclosed in a Disclosure Schedule
to this Agreement;
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(c) dispose of or contract to dispose of any Xxxxxxx property or
assets except in the ordinary course of business consistent with past practice;
(d) issue, deliver, sell, pledge or otherwise encumber or subject
to any lien any shares of the TVS Stock, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities; or
(e) not (i) declare, set aside or pay any dividends on, or make
any other distributions in respect of the Xxxxxxx Stock, or (ii) split,
combine or reclassify any Xxxxxxx Stock or issue or authorize the issuance of
any other securities in respect of, in lieu of or in substitution for shares of
Xxxxxxx Stock.
6.7 [Intentionally Deleted.]
6.8 Public Announcements. The parties agree that they will not make any
public announcements relating to this Agreement or the transactions
contemplated herein without the prior written consent of the other parties,
except as may be required upon written advice of counsel to comply with
applicable laws or regulatory requirements after consulting with the other
party hereto and seeking their consent to such announcement.
6.9 Delivery of Securities Disclosure Information. TVS will mail or
otherwise deliver to its shareholders along with the notice of a shareholders
meeting called to approve the Merger, such disclosure documents (providing
information about Orion required for compliance with applicable securities
laws) as Orion timely provides to TVS; and TVS will certify to Orion as to such
delivery. TVS will cooperate with Orion to facilitate the return of the
Investment Certificates from the TVS Stockholders.
SECTION 7
TERMINATION
7.1 Termination. This Agreement may be terminated at any time prior to
the Effective Time of the transactions contemplated hereby by:
(a) Mutual agreement of Xxxxxxx and TVS;
(b) Xxxxxxx, if there has been a breach by TVS of any material
representation, warranty, covenant or agreement set forth in this Agreement on
the part of TVS that is not cured, to the reasonable satisfaction of Xxxxxxx,
within ten business days after notice of such breach is given by Xxxxxxx
(except that no cure period will be provided for a breach by TVS that by its
nature cannot be cured);
(c) TVS, if there has been a breach by Xxxxxxx or Orion of any
material representation, warranty, covenant or agreement set forth in this
Agreement on the part of Xxxxxxx or Orion that is not cured by the breaching
party, to the reasonable satisfaction of TVS, within ten business days after
notice of such breach is given by TVS (except that no cure period will be
provided for a breach by Xxxxxxx that by its nature cannot be cured);
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(d) Xxxxxxx or TVS, if the transactions contemplated by this
Agreement have not been consummated prior to June 30, 2000, unless the parties
agree to extend such date; or
(e) Xxxxxxx or TVS if any permanent injunction or other order of a
governmental entity of competent authority preventing the consummation of the
transactions contemplated by this Agreement has become final and nonappealable.
7.2 Effect of Termination. In the event of the termination of this
Agreement as provided in Section 7. 1, this Agreement will be of no further
force or effect, provided, however, that no termination of this Agreement will
relieve any party of liability for any breaches of this Agreement that are
based on a wrongful refusal or failure to perform any obligations
SECTION 8
MISCELLANEOUS PROVISIONS
8.1 Effectiveness of Representations; Survival. Each party is entitled
to rely on the representations, warranties and agreements of each of the other
parties and all such representation, warranties and agreement will be effective
regardless of any investigation that any party has undertaken or failed to
undertake. The representation, warranties and agreements will survive the
Closing Date and continue in full force and effect until the third anniversary
of the Closing Date; provided that the representations and warranties set forth
in Sections 3.13 regarding Taxes will survive until the expiration of any
applicable statute of limitations
8.2 Further Assurances. Each of the parties hereto will cooperate with
the others and execute and deliver to the other parties hereto such other
instruments and documents and take such other actions as may be reasonably
requested from time to time by any other party hereto as necessary to carry
out, evidence, and confirm the intended purposes of this Agreement.
8.3 Amendment. This Agreement may not be amended except by an
instrument in writing signed by each of the parties. This Agreement may be so
amended by the mutual agreement of the parties at any time prior to the time
that the Certificate of Merger is filed with the Secretary of State of
Delaware, provided that any amendment made subsequent to the adoption of this
Agreement by the respective shareholders of Xxxxxxx or TVS will not (1) alter
or change the amount or kind of consideration to be received in exchange for or
on conversion of shares of any class or series thereof of such constituent
corporation, (2) alter or change any term of the certificate of incorporation
of the Surviving Corporation to be effected by the Merger, or (3) alter or
change any of the terms and conditions of this Agreement if such alteration or
change would adversely affect the holders of any class or series thereof of
such constituent corporation.
8.4 Expenses. Each party to this Agreement will bear its respective
expenses incurred in connection with the preparation, execution, and
performance of this Agreement and the transactions contemplated hereby,
including all fees and expenses of agents, representatives, counsel, and
accountants.
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8.5 Entire Agreement. This Agreement, the exhibits, schedules attached
hereto and the other Merger Documents contain the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior
arrangements and understandings, both written and oral, expressed or implied,
with respect thereto. Any preceding correspondence or offers are expressly
superseded and terminated by this Agreement.
8.6 Severability. It is the desire and intent of the parties that the
provisions of the Merger Documents be enforced to the fullest extent
permissible under the law and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, if any provision of the Merger
Documents will for any reason be held or adjudged to be invalid, illegal, or
unenforceable by any court of competent jurisdiction, such paragraph or part
thereof so adjudicated invalid, illegal, or unenforceable will be deemed
separate, distinct, and independent, and the remainder of the Merger Documents
will remain in full force and effect and will not be affected by such holding
or adjudication.
8.7 Notices. All notices and other communications required or permitted
under to this Agreement must be in writing and will be deemed given if sent by
personal delivery, faxed with electronic confirmation of delivery,
nationally-recognized overnight courier or registered or certified mail (return
receipt requested), postage prepaid, to the parties at the following addresses
(or at such other address for a party as will be specified by like notice):
If to TVS: Xx. Xxxxxx X. Xxxxxxx, President
Transaction Verification Systems, Inc.
000 X. Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
With a copy (which will not constitute notice) to:
Xxxxxxx X. Xxxxxxx, Esquire
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to Xxxxxxx or Orion: Xxxxxxx Holdings, Inc.
c/o Orion Technologies, Inc.
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: A. Xxxxx Xxxxxxxx
Phone: (000) 000-0000
Fax: (000 000-0000
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With a copy (which will not constitute notice) to:
Powell, Goldstein, Xxxxxx & Xxxxxx, LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Sixth Floor South
Washington, D.C. 20004
Attention: Xxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
All such notices and other communications will be deemed to have been received
(a) in the case of personal delivery, on the date of such delivery, (b) in the
case of a fax, when the party sending such fax has received electronic
confirmation of its delivery, (c) in the case of delivery by
nationally-recognized overnight courier, on the business day following dispatch
and (d) in the case of mailing, on the third business day following mailing.
8.8 Headings. The headings contained in this Agreement are for
convenience purposes only and will not affect in any way the meaning or
interpretation of this Agreement.
8.9 Benefits. This Agreement is and will only be construed as for the
benefit of or enforceable by those persons party to this Agreement.
8.10 Assignment. This Agreement may not be assigned (except by operation
of law) by any party without the consent of the other parties.
8.11 Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the Commonwealth of Virginia applicable to
contracts made and to be performed therein. The parties hereby (i) submit to
personal jurisdiction in the Commonwealth of Virginia for the enforcement of
this Agreement, and (ii) waive any and all rights under the laws of any state
to object to jurisdiction within the Commonwealth of Virginia for the purposes
of litigation to enforce this Agreement
8.12 Construction. The language used in this Agreement will be deemed to
be the language chosen by the parties to express their mutual intent, and no
rule of strict construction will be applied against any party.
8.13 Counterparts. This Agreement may be executed in one or more
counterparts, all of which will be considered one and the same agreement and
will become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
8.14 Fax Execution. This Agreement may be executed by delivery of
executed signature pages by fax and such fax execution will be effective for
all purposes.
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8.15 Schedules and Exhibits. The following schedules and exhibits are
attached to this Agreement and incorporated herein.
Disclosure Schedule 3.3 TVS Capitalization
Disclosure Schedule 3.4 Title to TVS Stock
Disclosure Schedule 3.6 Actions and Proceedings
Disclosure Schedule 3.9 TVS Financial Statements
Disclosure Schedule 3.10 Undisclosed Liabilities
Disclosure Schedule 3.11 Inventory
Disclosure Schedule 3.12 Accounts Receivable
Disclosure Schedule 3.14 Absence of Changes and Events
Disclosure Schedule 3.15 Personal Property
Disclosure Schedule 3.16 Bank Accounts
Disclosure Schedule 3.17 Insurance
Disclosure Schedule 3.18 Employees and Consultants
Disclosure Schedule 3.19 ERISA Compliance; Benefit Plans
Disclosure Schedule 3.20 Intellectual Property
Disclosure Schedule 3.21 Real Property
Disclosure Schedule 3.23 Material Contracts and Transactions
Disclosure Schedule 3.25 Affiliate Transactions
EXHIBITS
Exhibit A Certificate of Merger
Exhibit B Stock Escrow Agreement
Exhibit C Promissory Note
[Signature page follows.]
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EXECUTED on June 8, 2000.
Orion:
ORION TECHNOLOGIES, INC.,
A Nevada Corporation
By: /s/ A. XXXXX XXXXXXXXX
------------------------------------
A. Xxxxx Xxxxxxxx
President
Xxxxxxx:
XXXXXXX HOLDINGS, INC.,
A Delaware Corporation
By: /s/ A. XXXXX XXXXXXXXX
------------------------------------
A. Xxxxx Xxxxxxxx
President
TVS:
TRANSACTION VERIFICATION SYSTEMS,
INCORPORATED,
A Delaware Corporation
By: /s/ XXXXXX X. XXXXXXX
------------------------------------
Xxxxxx X. Xxxxxxx
President
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