EXHIBIT 2.1
MERGER AGREEMENT
This Merger Agreement (this "Agreement"), dated as of May 12, 2004, is
by and among New Jersey Acquisition, Inc., a Delaware corporation ("New
Jersey"), New Jersey Merger Sub, Inc., a Delaware corporation and wholly-owned
subsidiary of New Jersey ("Merger Sub" and, together with New Jersey, the
"Constituent Corporations"), EMC Packaging, Inc., a Delaware corporation
("EMC"), Xxxxx Xxxxxx, Xxxxxxxx Xxxxxxxxx, Xxx 3 Corp., a Delaware corporation
and Xxxxx Xxxxxxxxx (collectively the "Principal EMC Shareholders") and the
other holders of common stock of EMC listed on Exhibit A to this Agreement
(together with the Principal EMC Shareholders, the "EMC Shareholders").
RECITALS:
A. Merger Sub and EMC desire to merge on the terms and subject to
the conditions set forth in this Agreement;
B. The sole Director of each of the Constituent Corporations and
the Board of Directors of EMC, respectively, believe it is in the long-term
strategic interests of the Constituent Corporations and EMC that the Constituent
Corporations and EMC effect the transactions contemplated hereby.
C. EMC and Merger Sub desire to adopt a plan of reorganization
pursuant to the provisions of Section 368(a)(1)(A) of the Internal Revenue Code
of 1986, as amended (the "Code"), providing for the merger of Merger Sub with
and into EMC (the "Merger") pursuant to which all of the issued and outstanding
shares, par value $.01 per share, of Merger Sub (the "Merger Sub Common Stock")
will be converted into and exchanged for shares of common stock, par value $.001
per share, of EMC ("EMC Common Stock"), all pursuant to the plan of
reorganization set forth herein.
D. It is the intention of the parties that all of the issued and
outstanding shares of EMC Common Stock shall be transferred to New Jersey,
pursuant to the terms of this Agreement and the Plan of Merger (as defined
hereinafter).
E. It is the further intention of the parties hereto that the
Merger shall qualify as a transaction in securities exempt from registration or
qualification under the Securities Act of 1933, as amended (the "Securities
Act"), and under the applicable securities laws of each state or jurisdiction
where the EMC Shareholders reside.
F. The Constituent Corporations and EMC desire to effect the
Merger and the other transactions contemplated hereby.
G. The parties hereto desire to set forth certain
representations, warranties, covenants and agreements as an inducement to the
consummation of the Merger and the other transactions contemplated hereby.
NOW, THEREFORE, in consideration of the premises and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
SECTION 1. MERGER AND CERTAIN RELATED TRANSACTIONS
1.1 Merger. At the Effective Time of the Merger, as defined in the
Agreement and Plan of Merger ("Plan of Merger") between EMC and the Constituent
Corporations, Merger Sub shall be merged with and into EMC pursuant to the Plan
of Merger, a form of which is attached hereto as Exhibit B and incorporated
herein by reference, and the separate corporate existence of Merger Sub shall
thereupon cease. EMC shall be the surviving corporation in the Merger
(hereinafter sometimes referred to as the "Surviving Corporation") and will be a
wholly-owned subsidiary of New Jersey.
1.2 The Closing. The closing of the Merger (the "Closing") shall
take place at the offices of Margulies & Xxxxxxxx LLP, at 10:00 a.m., Eastern
Standard time, on May 14, 2004 at such other time and place or on such other
date as the Constituent Corporations and EMC shall mutually agree (the "Closing
Date"). At the Closing, subject to and in accordance with the terms and
conditions herein, Merger Sub and EMC shall effect the Merger by executing and
filing a Certificate of Merger in the manner provided in the Delaware General
Corporation Law. At the Closing, upon confirmation of the filing of the
Certificate of Merger in Delaware as described above, there shall be delivered
to (i) the EMC Shareholders by New Jersey, certificates representing 8,000,000
shares, or eighty percent (80%) of the common stock of New Jersey, par value
$.0001 per share (the "New Jersey Common Stock"), issued and outstanding as of
the Closing Date (the eighty percent (80%) of the shares of New Jersey Common
Stock to be issued to the EMC Shareholders will be referred to hereinafter as
the "Consideration Shares"), and (ii) New Jersey by the EMC Shareholders,
certificates representing 234 shares of EMC Common Stock, which shall be all of
the issued and outstanding EMC Common Stock as of the Closing Date.
1.3 Further Action. Each of EMC and the Constituent Corporations
shall take all such reasonable and lawful action as may be necessary or
appropriate in order to effectuate the Merger as promptly as possible. If, at
any time after the Effective Time, any further action is necessary or desirable
to carry out the purposes of this Agreement and to vest the Surviving
Corporation with full right, title and possession to all assets, property,
rights, privileges, powers and franchises of Merger Sub, the directors and
officers of each of the Constituent Corporations and EMC are fully authorized
and empowered in the name and on behalf of their respective corporation or
otherwise to take, and shall take, all such further action.
1.4 Restricted Securities; Registration. The New Jersey Common
Stock, including the Consideration Shares (collectively, the "New Jersey
Shares"), will be restricted against resale pursuant to the provisions of
federal and state securities laws. The New Jersey Shares have not been
registered under the Securities Act, and may not be resold unless the resale
thereof is registered under the Securities Act or an exemption from
such registration is available. Each certificate representing the New Jersey
Shares will have a legend thereon in substantially the form set forth in Section
2.7 hereof. As soon as practicable following the Closing Date, each of New
Jersey and the Surviving Corporation agrees to use its best efforts to register
the New Jersey Shares on a Registration Statement on Form SB-2 under the
Securities Act.
1.5 Name Change. At the Closing, subject to and in accordance with
the terms and conditions herein, New Jersey shall change its name to MC
Industrial Group, Inc., by executing and filing a Certificate of Amendment to
its Certificate of Incorporation, in the manner provided in the Delaware General
Corporation Law.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF EMC AND THE EMC SHAREHOLDERS
EMC represents and warrants to the Constituent Corporations as set
forth in Sections 2.1, 2.2, and 2.10 through 2.25 hereof. Each EMC Shareholder,
severally and not jointly, represents and warrants (as to himself only) to the
Constituent Corporations as set forth in Sections 2.3 through 2.9 hereof.
2.1 Organization and Good Standing. EMC is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. EMC has the corporate power and authority to carry on its business as
presently conducted. EMC is qualified to do business in all jurisdictions where
the failure to be so qualified would have a material adverse effect on its
business.
2.2 Corporate Authority. EMC has the corporate power to enter into
this Agreement and to perform its obligations hereunder. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by the EMC Shareholders and by the directors of
EMC.
2.3 Ownership of Shares. Each EMC Shareholder represents with
respect to himself only, that he is the owner of record of the issued and
outstanding EMC Common Stock set forth with respect to him on Exhibit A. Such
EMC Shareholder represents and warrants that he or she owns such shares free and
clear of all rights, claims, liens and encumbrances, and the shares have not
been sold, pledged, assigned or otherwise transferred except pursuant to this
Agreement.
2.4 Independent Investigation. Each EMC Shareholder acknowledges
that in making his or her decision to execute and deliver this Agreement and
approve the Merger, he or she will rely, in part, upon independent
investigations made by such EMC Shareholder or his or her representatives, if
any.
2.5 Risks. Each EMC Shareholder acknowledges and understands that
his acquisition of the Consideration Shares involves a high degree of risk and
is suitable only for persons of adequate financial means who have no need for
liquidity in this investment in that: (i) the EMC Shareholder may not be able to
liquidate the investment in the event of
an emergency; (ii) transferability is extremely limited; and (iii) in the event
of a disposition, the EMC Shareholder could sustain a complete loss of his
entire investment. The EMC Shareholder is sufficiently experienced in financial
and business matters to be capable of evaluating the merits and risks of an
investment in New Jersey, has evaluated such merits and risks, including risks
particular to the EMC Shareholder's situation, and has determined that this
investment is suitable for the EMC Shareholder. The EMC Shareholder has adequate
financial resources and can bear a complete loss of the EMC Shareholder's
investment.
2.6 Investment Intent. Each EMC Shareholder hereby represents that
the Consideration Shares he or she is acquiring are being acquired for his or
her own account with no intention of distributing such securities to others. The
EMC Shareholder has no contract, undertaking, agreement or arrangement with any
person to sell, transfer or otherwise distribute to any person or to have any
person sell, transfer or otherwise distribute the Consideration Shares for the
EMC Shareholder. The EMC Shareholder is presently not engaged, nor does he or
she plan to engage within the presently foreseeable future, in any discussion
with any person regarding such a sale, transfer or other distribution of the
Consideration Shares or any interest therein.
2.7 Compliance with Federal and State Securities Laws. Each EMC
Shareholder understands that the Consideration Shares have not been registered
under the Securities Act. Such EMC Shareholder understands that the
Consideration Shares must be held indefinitely unless the sale or other transfer
thereof is subsequently registered under the Securities Act or an exemption from
such registration is available. Moreover, such EMC Shareholder understands that
his right to transfer the Consideration Shares will be subject to certain
restrictions, which include restrictions against transfer under the Securities
Act and applicable state securities laws. In addition to such restrictions, such
EMC Shareholder realizes that he or she may not be able to sell or dispose of
the Consideration Shares as there may be no public or other market for them.
Such EMC Shareholder understands that certificates evidencing the Consideration
Shares shall bear a legend substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
APPLICABLE STATE LAW. THEY MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR PLEDGED UNLESS REGISTERED UNDER THE ACT AND ANY
APPLICABLE STATE LAW OR PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS.
2.8 No General Solicitation. Such EMC Shareholder is not acquiring
the Consideration Shares because of or following any advertisement, article,
notice or other communication published in any newspaper, magazine or similar
media or broadcast over television or radio, or presented at any seminar or
meeting, or any solicitation or subscription by a person other than a
representative of New Jersey.
2.9 Approvals with Respect to EMC Shareholder. No approval,
authorization, consent, order or other action of, or filing with, any person,
firm or corporation or any court, administrative agency or other governmental
authority is required in connection with the execution and delivery of this
Agreement by such EMC Shareholder or for the consummation by such EMC
Shareholder of the transactions described herein.
2.10 Approvals with Respect to EMC. Except as set forth on Schedule
2.10, no approval, authorization, consent, order or other action of, or filing
with, any person, firm or corporation or any court, administrative agency or
other governmental authority is required in connection with the execution and
delivery of this Agreement by EMC or for the consummation by EMC of the
transactions described herein.
2.11 Financial Statements; Books and Records. Attached as Schedule
2.11 are the audited financial statements of EMC, as of and for the year ended
June 30, 2003 and unaudited financial statements of EMC as of and for each of
the three months ended September 30, 2003 and December 31, 2003 (the "EMC
Financial Statements"). The books of account and other financial records of EMC
are complete and correct in all material respects and are maintained in
accordance with good business and accounting practices. The EMC Shareholders
acknowledge that a minimum of two (2) years of audited financial information (or
such shorter period that EMC was in existence) will be required to be filed with
the U.S. Securities and Exchange Commission (the "SEC") within seventy-five (75)
days of the Closing Date.
2.12 No Material Adverse Changes. Except as set forth on Schedule
2.12, since December 31, 2003 there has not been:
(i) any material adverse change in the financial position
of EMC;
(ii) any damage, destruction or loss materially and
adversely affecting the assets, properties, operations or condition
(financial or otherwise) of EMC, whether or not covered by insurance;
(iii) any declaration, setting aside or payment of any
dividend or distribution with respect to, or any redemption or
repurchase of, EMC capital stock;
(iv) any sale of an asset (other than in the ordinary
course of business) or any mortgage or pledge by EMC of any properties
or assets;
(v) any adoption by EMC of any pension, profit sharing,
retirement, stock bonus, stock option or similar plan or arrangement;
(vi) any indebtedness of EMC incurred for borrowed money;
(vii) any loan or advance by EMC to any shareholder,
officer, director, consultant, agent or other representative of EMC;
(viii) any material increase in the annual level of
compensation of any executive employee of EMC;
(ix) any entry into or modification by EMC of any
contract, agreement or transaction except in the ordinary course of
business; or
(x) any issuance by EMC of any equity security.
2.13 Taxes. EMC has filed all tax forms and reports (or extensions
thereof) due or required to be filed and has paid or made adequate provisions
for all taxes or assessments which have become due as of the date hereof, and
there are no deficiency notices outstanding. No extensions of time for the
assessment of deficiencies for any year is in effect. No deficiency notice is
proposed or, to the knowledge of the EMC Shareholders after reasonable inquiry,
threatened against EMC. The tax returns of EMC have never been audited.
2.14 Compliance with Laws. EMC has complied with all federal,
state, county and local laws, ordinances, regulations, inspections, orders,
judgments, injunctions, awards or decrees applicable to it or its business
which, if not complied with, would materially and adversely affect the business
of EMC.
2.15 No Breach. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will not:
(i) violate any provision of the Certificate of
Incorporation or the Bylaws of EMC;
(ii) violate, conflict with or result in the material
breach of any of the terms of, result in a material modification of,
otherwise give any other contracting party the right to terminate, or
constitute (or with notice or lapse of time, or both constitute) a
default under, any material contract or other agreement to which EMC is
a party or by or to which it or any of its assets or properties is
bound or subject;
(iii) violate any order, judgment, injunction, award or
decree of any court, arbitrator or governmental or regulatory body
against EMC; or
(iv) violate any statute, rule or regulation applicable to
and that would have a material adverse effect on EMC, its properties or
assets.
2.16 Actions and Proceedings. EMC is not a party to any material
pending litigation or, to the knowledge of the EMC Shareholders, after
reasonable inquiry, any governmental investigation or proceeding not reflected
in the EMC Financial Statements and, to their best knowledge, no material
litigation, claims, assessments or non-governmental proceedings are threatened
against EMC.
2.17 Capitalization. The authorized capital of EMC consists of
10,000,000 shares of EMC Common Stock, par value $.001 per share, of which 234
shares are issued and outstanding as of the date hereof. EMC is current with
respect to all dividend obligations. EMC has not granted, issued or agreed to
grant, issue or make any warrants, options, subscription rights or any other
commitments of any character relating to the issued or unissued shares of
capital stock of EMC, except for the Merger and as set forth on Schedule 2.17
attached hereto and made a part hereof.
2.18 Agreements. Schedule 2.18 sets forth a list of any material
contracts or arrangements to which EMC is a party or by or to which it or its
assets, properties or business are bound or subject, whether written or oral.
2.19 Brokers or Finders. No broker's or finder's fee will be
payable by EMC in connection with the transactions contemplated by this
Agreement, nor will any such fee be incurred as a result of any actions by EMC
or any of the EMC Shareholders.
2.20 Real Estate. Except as set forth on Schedule 2.20, EMC owns no
real property nor is a party to any leasehold agreement. All uses of the real
property leased by EMC conform in all material respects to all applicable
building and zoning ordinances, laws and regulations.
2.21 OSHA and Environmental Compliance. To the best knowledge of
the EMC Shareholders, after reasonable inquiry, EMC has duly complied with, and
its offices, real property, business, assets, leaseholds and equipment are in
compliance in all material respects with, the provisions of the Federal
Occupational Safety and Health Act ("OSHA"), the Environmental Protection Act,
and all other environmental laws. There have been no outstanding citations,
notices or orders of non-compliance issued to EMC or relating to its business,
assets, property, leaseholders or equipment under such environmental laws, rules
or regulations. EMC has been issued all required federal, state and local
licenses, certificates or permits relating to all applicable environmental laws.
To the best of the EMC Shareholders' knowledge, after reasonable inquiry, no
hazardous substances are present on any premises leased by EMC excepting such
quantities as are handled in accordance with all applicable manufacturer's
instructions and governmental regulations and in the proper storage containers
and as are necessary for the operation of the commercial business of EMC.
2.22 Assets. EMC holds good and valid title to the assets shown on
its balance sheet dated December 31, 2003 (the "Balance Sheet"), free and clear
of all liens, pledges, mortgages, security interests, conditional sales
contracts or any other encumbrances (each, a "Lien") (other than Permitted
Liens, as defined below). All of EMC's material assets are in good operating
condition and repair and are usable in the ordinary course of business of EMC
and conform in all material respects to all applicable laws, ordinances and
government orders, rules and regulations relating to their construction and
operation. To the best knowledge of EMC, after reasonable inquiry, EMC has clear
title to all of its business names, trading names, registered trademarks,
service marks and applications. "Permitted Liens" means any Lien that: (a)
secures indebtedness reflected on the Balance
Sheet; (b) are Liens filed of record; (c) are Liens for taxes accrued but not
yet payable; (d) are Liens arising as a matter of law in the ordinary course of
business with respect to obligations incurred after the date of the Balance
Sheet, provided that the obligations secured by such Liens are not delinquent or
are being contested in good faith; or (e) involve only such imperfections of
title and encumbrances, if any, which do not materially detract from the value
or materially interfere with the use, as currently used, of the properties
subject thereto or affected thereby or otherwise materially impair the business
operations being conducted thereon.
2.23 Liabilities. Except as disclosed elsewhere in this Agreement
or the Schedules hereto, EMC does not have any material indebtedness, liability,
claim, loss, damage, deficiency, obligation or responsibility, secured or
unsecured, accrued or absolute, contingent or otherwise (all of the foregoing
are collectively defined as "Liabilities"), which were not fully, fairly and
adequately reflected on the EMC Financial Statements, as of the date thereof. As
of the Closing Date, EMC will not have any Liabilities, other than Liabilities
fully and adequately reflected on the EMC Financial Statements, Liabilities
incurred after December 31, 2003 and Liabilities that in the aggregate are not
material to EMC's business or financial condition. To the best knowledge of the
EMC Shareholders, there is no circumstance, condition, event or arrangement
which would hereafter give rise to any material Liabilities of EMC not in the
ordinary course of business.
2.24 Access to Records. The corporate financial records, minute
books and other documents and records of EMC have been made available to the
Constituent Corporations prior to the Closing. EMC has provided the Constituent
Corporations with the opportunity to ask questions of and receive answers from
EMC concerning the terms and conditions of this Agreement and to obtain any
additional information that EMC possesses or can acquire without unreasonable
effort or expense necessary to verify the accuracy of the information provided.
2.25 Full Disclosure. No representation or warranty by EMC or the
EMC Shareholders in this Agreement or in any document or schedule to be
delivered by them pursuant hereto, and no written statement, certificate or
instrument furnished or to be furnished by EMC pursuant hereto or in connection
with the negotiation, execution or performance of this Agreement contains or
will contain any untrue statement of a material fact or omits or will omit to
state any fact necessary to make any statement herein or therein not materially
misleading.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF MERGER SUB
Merger Sub hereby represents and warrants to EMC and the EMC
Shareholders as follows:
3.1 Organization and Good Standing. Merger Sub is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. It has the corporate power and authority to own its own
property and to carry on its
business as now being conducted and is duly qualified to do business in any
jurisdiction where so required except where the failure to so qualify would have
no material adverse effect on its business.
3.2 Corporate Authority. Merger Sub has the corporate power to
enter into this Agreement and to perform its obligations hereunder. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by the sole Director
of Merger Sub and, if required, by the sole stockholder of Merger Sub.
3.3 Approvals. No approval, authorization, consent, order or other
action of, or filing with, any person, firm or corporation or any court,
administrative agency or other governmental authority is required in connection
with the execution and delivery of this Agreement by Merger Sub or for the
consummation of the transactions described herein.
3.4 INTENTIONALLY OMITTED.
3.5 No Material Adverse Changes. Except as described on Schedule
3.5, since March 2, 2004, the date of incorporation of Merger Sub, there has not
been:
(i) any material adverse changes in the financial
position of Merger Sub;
(ii) any damage, destruction or loss materially affecting
the assets, properties, prospective business, operations or condition
(financial or otherwise) of Merger Sub, whether or not covered by
insurance;
(iii) any declaration, setting aside or payment of any
dividend or distribution with respect to, or any redemption or
repurchase of, Merger Sub capital stock;
(iv) any sale of an asset (other than in the ordinary
course of business) or any mortgage or pledge by Merger Sub of any
properties or assets;
(v) any adoption or modification by Merger Sub of any
pension, profit sharing, retirement, stock bonus, stock option or
similar plan or arrangement;
(vi) any incurred or assumed indebtedness or liability of
Merger Sub, whether or not currently due and payable, except in the
ordinary course of business;
(vii) any loan or advance by Merger Sub to any stockholder,
officer, director, employee, consultant, agent or other representative,
or any other loan or advance by Merger Sub otherwise than in the
ordinary course of business;
(viii) any material increase in the annual level of
compensation of any executive employee of Merger Sub;
(ix) any entry into or modification by Merger Sub of any
contract, agreement or transaction except in the ordinary course of
business; or
(x) any issuance by Merger Sub of any equity securities
or rights to acquire equity securities, other than as set forth in
Schedule 3.5.
3.6 Taxes. Merger Sub has filed all tax, governmental and/or
related forms and reports (or extensions thereof) due or required to be filed by
it, and has paid all taxes due for all periods prior to the date hereof. There
are no deficiency notices outstanding with respect to any taxes or assessments
nor are there any extensions of time for the assessment of deficiencies for any
year in effect. No deficiency notice is proposed or, to the knowledge of Merger
Sub, after reasonable inquiry, threatened against Merger Sub. No tax return of
Merger Sub has ever been audited.
3.7 Compliance with Laws. Merger Sub has complied with all
federal, state, county and local laws, ordinances, regulations, inspections,
orders, judgments, injunctions, awards or decrees applicable to it or its
business, which, if not complied with, would materially and adversely affect the
business of Merger Sub.
3.8 No Breach. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will not:
(i) violate any provision of the Certificate of
Incorporation or By-Laws of Merger Sub;
(ii) violate, conflict with or result in the breach of any
of the material terms of, result in a material modification of,
otherwise give any other contracting party the right to terminate, or
constitute (or with notice or lapse of time or both constitute) a
default under, any contract or other agreement to which Merger Sub is a
party or by or to which it or any of its assets or properties may be
bound or subject;
(iii) violate any order, judgment, injunction, award or
decree of any court, arbitrator or governmental or regulatory body
against, or binding upon, Merger Sub or upon the securities, properties
or business of Merger Sub; or
(iv) violate any statute, rule or regulation applicable to
and that would have a material adverse effect on Merger Sub, its
business, operations, properties or assets.
3.9 Actions and Proceedings. Merger Sub is not a party to any
material pending litigation or governmental investigation or proceeding or other
claim, assessment or non-governmental proceeding, nor to its knowledge is any
such litigation or governmental investigation or proceeding or other claim,
assessment or non-governmental proceeding threatened against Merger Sub.
3.10 Capitalization. Attached as Schedule 3.10 is a true and
correct copy of the stockholder list of Merger Sub as of the date hereof. An
updated list of Merger Sub stockholders will be provided by Merger Sub to EMC at
the Closing. Merger Sub has 1,500 shares of Merger Sub Common Stock authorized,
of which 100 shares are issued and outstanding. Merger Sub has not granted,
issued or agreed to grant, issue or make any warrants, options, subscription
rights or any other commitments of any character relating to the issued or
unissued shares of Merger Stock capital stock, except as set forth on Schedule
3.10.
3.11 Agreements. Merger Sub is not a party to any material contract
or arrangement pursuant to which it or its assets, properties or business are
bound or subject, whether written or oral.
3.12 Brokers or Finders. No broker's or finder's fee will be
payable by Merger Sub in connection with the transactions contemplated by this
Agreement, nor will any such fee be incurred as a result of any actions of
Merger Sub.
3.13 INTENTIONALLY OMITTED.
3.14 INTENTIONALLY OMITTED.
3.15 INTENTIONALLY OMITTED.
3.16 INTENTIONALLY OMITTED.
3.17 Access to Records. Merger Sub has provided EMC and the EMC
Shareholders with the records, minute books, and other documents listed on
Schedule 3.17 hereto. Merger Sub has provided EMC with the opportunity to ask
questions of and receive answers from the Constituent Corporations concerning
the terms and conditions of this Agreement and to obtain any additional
information that the Constituent Corporations possess or can acquire without
unreasonable effort or expense necessary to verify the accuracy of the
information provided.
3.18 No Claims Outstanding. Merger Sub represents that it is not
subject to any claims, litigation, or other charges against its assets, has no
real estate or real estate holdings, has no employees, and has one officer and
one director, serving without pay. Therefore there can be no OSHA or other
personnel claims outstanding or potentially assertable against Merger Sub.
Furthermore, there have been no material changes in Merger Sub's position, and
Merger Sub has conducted no other business, since March 2, 2004.
3.19 INTENTIONALLY OMITTED.
3.20 Full Disclosure. No representation or warranty by Merger Sub
in this Agreement or in any document or schedule to be delivered by it pursuant
hereto, and no
written statement, certificate or instrument furnished or to be furnished by
Merger Sub pursuant hereto or in connection with the negotiation, execution or
performance of this Agreement contains or will contain any untrue statement of a
material fact or omits or will omit to state any fact necessary to make any
statement herein or therein not materially misleading or necessary to complete
and correct presentation of all material aspects of the business of Merger Sub.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF NEW JERSEY
New Jersey hereby represents and warrants to EMC and the EMC
Shareholders as follows:
4.1 Organization and Good Standing. New Jersey is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. It has the corporate power and authority to own its own
property and to carry on its business as now being conducted and is duly
qualified to do business in any jurisdiction where so required except where the
failure to so qualify would have no material adverse effect on its business.
4.2 Corporate Authority. New Jersey has the corporate power to
enter into this Agreement and to perform its obligations hereunder. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by the sole Director
of New Jersey and, if required, by the sole stockholder of New Jersey.
4.3 Consideration Shares. At the Closing, the Consideration Shares
to be issued and delivered to the EMC Shareholders hereunder will, when so
issued and delivered, constitute valid and legally issued shares of New Jersey
Common Stock, fully paid and nonassessable.
4.4 Approvals. No approval, authorization, consent, order or other
action of, or filing with, any person, firm or corporation or any court,
administrative agency or other governmental authority is required in connection
with the execution and delivery of this Agreement by New Jersey or for the
consummation of the transactions described herein.
4.5 Financial Statements; Books and Records. Attached as Schedule
4.5 are the audited financial statements of New Jersey as of and for the year
ended December 31, 2003 (the "New Jersey Financial Statements"), which are on
file with the SEC. The New Jersey Financial Statements fairly represent the
financial position of New Jersey as at such dates and the results of its
operations for the periods then ended. The New Jersey Financial Statements were
prepared in accordance with generally accepted accounting principles applied on
a consistent basis, except as otherwise stated therein. The books of account and
other financial records of New Jersey are complete and correct in all material
respects and are maintained in accordance with good business and accounting
practices.
4.6 No Material Adverse Changes. Except as described on Schedule
4.6, since December 31, 2003, there has not been:
(i) any material adverse changes in the financial
position of New Jersey;
(ii) any damage, destruction or loss materially affecting
the assets, properties, prospective business, operations or condition
(financial or otherwise) of New Jersey, whether or not covered by
insurance;
(iii) any declaration, setting aside or payment of any
dividend or distribution with respect to, or any redemption or
repurchase of, New Jersey capital stock;
(iv) any sale of an asset (other than in the ordinary
course of business) or any mortgage or pledge by New Jersey of any
properties or assets;
(v) any adoption or modification by New Jersey of any
pension, profit sharing, retirement, stock bonus, stock option or
similar plan or arrangement;
(vi) any incurred or assumed indebtedness or liability of
New Jersey, whether or not currently due and payable, except in the
ordinary course of business;
(vii) any loan or advance by New Jersey to any stockholder,
officer, director, employee, consultant, agent or other representative,
or any other loan or advance by New Jersey otherwise than in the
ordinary course of business;
(viii) any material increase in the annual level of
compensation of any executive employee of New Jersey;
(ix) any entry into or modification by New Jersey of any
contract, agreement or transaction except in the ordinary course of
business; or
(x) any issuance by New Jersey of any equity securities
or rights to acquire equity securities, other than as set forth in
Schedule 4.6.
4.7 Taxes. New Jersey has filed all tax, governmental and/or
related forms and reports (or extensions thereof) due or required to be filed by
it, and has paid all taxes due for all periods prior to the date hereof. There
are no deficiency notices outstanding with respect to any taxes or assessments
nor are there any extensions of time for the assessment of deficiencies for any
year in effect. No deficiency notice is proposed or, to the knowledge of New
Jersey, after reasonable inquiry, threatened against New Jersey. No tax return
of New Jersey has ever been audited.
4.8 Compliance with Laws. New Jersey has complied with all
federal, state, county and local laws, ordinances, regulations, inspections,
orders, judgments, injunctions,
awards or decrees applicable to it or its business, which, if not complied with,
would materially and adversely affect the business of New Jersey.
4.9 No Breach. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will not:
(i) violate any provision of the Certificate of
Incorporation or By-Laws of New Jersey;
(ii) violate, conflict with or result in the breach of any
of the material terms of, result in a material modification of,
otherwise give any other contracting party the right to terminate, or
constitute (or with notice or lapse of time or both constitute) a
default under, any contract or other agreement to which New Jersey is a
party or by or to which it or any of its assets or properties may be
bound or subject;
(iii) violate any order, judgment, injunction, award or
decree of any court, arbitrator or governmental or regulatory body
against, or binding upon, New Jersey or upon the securities, properties
or business of New Jersey; or
(iv) violate any statute, rule or regulation applicable to
and that would have a material adverse effect on New Jersey, its
business, operations, properties or assets.
4.10 Actions and Proceedings. New Jersey is not a party to any
material pending litigation or governmental investigation or proceeding or other
claim, assessment or non-governmental proceeding, nor to its knowledge is any
such litigation or governmental investigation or proceeding or other claim,
assessment or non-governmental proceeding threatened against New Jersey.
4.11 Periodic Reports. New Jersey is a Section 12(g) reporting
company and therefore must file periodic reports pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"). Except as set forth on
Schedule 4.11 hereto, each report or filing (the "1934 Act Filings") required to
be made by New Jersey pursuant to the 1934 Act was timely made. Each such 1934
Act Filing complied as to form with the requirements under the 1934 Act and the
regulations promulgated thereunder. Each such 1934 Act Filing did not misstate
any material fact or omit to state a material fact required to be stated in
order to make the information contained in such filing not misleading.
4.12 Capitalization. Attached as Schedule 4.12 is a true and
correct copy of the stockholder list of New Jersey as of the date hereof. An
updated list of New Jersey stockholders will be provided by New Jersey to the
EMC Shareholders at the Closing. New Jersey has 100,000,000 shares of New Jersey
Common Stock authorized, of which 1,240,000 shares are issued and outstanding,
and 20,000,000 shares of preferred stock, par value $.0001 per share,
authorized, none of which have been issued. New Jersey has not granted, issued
or agreed to grant, issue or make any warrants, options, subscription rights
or any other commitments of any character relating to the issued or unissued
shares of New Jersey capital stock, except as set forth on Schedule 4.12.
4.13 Agreements. Schedule 4.13 sets forth a list of any material
contract or arrangement to which New Jersey is a party or by or to which it or
its assets, properties or business are bound or subject, whether written or
oral.
4.14 Brokers or Finders. No broker's or finder's fee will be
payable by New Jersey in connection with the transactions contemplated by this
Agreement, nor will any such fee be incurred as a result of any actions of New
Jersey.
4.15 Real Estate. New Jersey owns no real property nor is a party
to any leasehold agreement.
4.16 INTENTIONALLY OMITTED.
4.17 INTENTIONALLY OMITTED.
4.18 INTENTIONALLY OMITTED.
4.19 Access to Records. New Jersey has provided EMC and the EMC
Shareholders with each of the 1934 Act Filings, and with the records, minute
books, and other documents listed on Schedule 4.19 hereto. New Jersey has
provided EMC with the opportunity to ask questions of and receive answers from
New Jersey concerning the terms and conditions of this Agreement and to obtain
any additional information that New Jersey possesses or can acquire without
unreasonable effort or expense necessary to verify the accuracy of the
information provided.
4.20 No Claims Outstanding. New Jersey represents that it is not
subject to any claims, litigation, or other charges against its assets, has no
real estate or real estate holdings, has no employees, and has one officer and
one directors, serving without pay. Therefore there can be no OSHA or other
personnel claims outstanding or potentially assertable against New Jersey.
Furthermore, there have been no material changes in New Jersey's position, and
New Jersey has conducted no other business, since December 31, 2003, other than
as set forth in the 1934 Act Filings.
4.21 Securities Issuances. New Jersey represents that all its
issued and outstanding shares are fully paid and non-assessable, not subject to
preemptive rights, and were duly and validly issued in compliance with all laws,
including the Securities Act, and are fully described in the New Jersey
Financial Statements.
4.22 Risks. New Jersey acknowledges and understands that its
acquisition of EMC Common Stock pursuant to the Merger involves a high degree of
risk and is suitable only for persons of adequate financial means who have no
need for liquidity in this investment in that: (i) New Jersey may not be able to
liquidate the investment in the event of an emergency; (ii) transferability is
extremely limited; and (iii) in the event of a
disposition, New Jersey could sustain a complete loss of its entire investment.
The management of New Jersey is sufficiently experienced in financial and
business matters to be capable of evaluating the merits and risks of an
investment in EMC, has evaluated such merits and risks, including risks
particular to New Jersey, and has determined that this investment is suitable
for New Jersey. New Jersey has adequate financial resources and can bear a
complete loss of its investment.
4.23 Investment Intent. New Jersey hereby represents that the
shares of EMC Common Stock it is acquiring are being acquired for its own
account with no intention of distributing such securities to others. New Jersey
has no contract, undertaking, agreement or arrangement with any person to sell,
transfer or otherwise distribute to any person or to have any person sell,
transfer or otherwise distribute the shares of EMC Common Stock for New Jersey.
New Jersey is presently not engaged, nor does it plan to engage within the
presently foreseeable future, in any discussion with any person regarding such a
sale, transfer or other distribution of the shares of EMC Common Stock or any
interest therein.
4.24 Compliance with Federal and State Securities Laws. New Jersey
understands that the shares of EMC Common Stock have not been registered under
the Securities Act. New Jersey also understands that such shares must be held
indefinitely unless the sale or other transfer thereof is subsequently
registered under the Securities Act or an exemption from such registration is
available. Moreover, New Jersey understands that its right to transfer the
shares of EMC Common Stock will be subject to certain restrictions, which
include restrictions against transfer under the Securities Act and applicable
state securities laws. In addition to such restrictions, New Jersey acknowledges
that it may not be able to sell or dispose of the shares of EMC Common Stock as
there may be no public or other market for them. New Jersey understands that
certificates evidencing such shares shall bear a legend substantially as
follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
APPLICABLE STATE LAW. THEY MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR PLEDGED UNLESS REGISTERED UNDER THE ACT AND ANY
APPLICABLE STATE LAW OR PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS.
4.25 No General Solicitation. New Jersey is not acquiring the
shares of EMC Common Stock because of or following any advertisement, article,
notice or other communication published in any newspaper, magazine or similar
media or broadcast over television or radio, or presented at any seminar or
meeting, or any solicitation or subscription by a person other than a
representative of EMC.
4.26 Full Disclosure. No representation or warranty by New Jersey
in this Agreement or in any document or schedule to be delivered by them
pursuant hereto, and no written statement, certificate or instrument furnished
or to be furnished by New Jersey pursuant hereto or in connection with the
negotiation, execution or performance of this
Agreement contains or will contain any untrue statement of a material fact or
omits or will omit to state any fact necessary to make any statement herein or
therein not materially misleading or necessary to complete and correct
presentation of all material aspects of the business of New Jersey.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions Precedent to the Obligations of EMC and the EMC
Shareholders. All obligations of EMC and the EMC Shareholders under this
Agreement are subject to the fulfillment, prior to or as of the Closing Date, of
each of the following conditions (any one or more of which may be waived by EMC
and the EMC Shareholders):
(a) The representations and warranties of each of the Constituent
Corporations contained in this Agreement or in any certificate or document
delivered pursuant to the provisions hereof shall be true in all material
respects at and as of the Closing Date as though such representations and
warranties were made at and as of such time.
(b) Each of the Constituent Corporations shall have performed and
complied in all material respects with all covenants, agreements, and conditions
set forth in this Agreement to be performed or complied with by it prior to or
at the Closing.
(c) Prior to the Closing, the sole Director and, if required, the
sole stockholder of each of the Constituent Corporations shall have approved, in
accordance with Delaware law, the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby, and
authorized all necessary and proper action to enable each of the Constituent
Corporations to comply with the terms of this Agreement.
(d) Each of the Constituent Corporations shall have executed and
delivered each instrument and document to be delivered by it pursuant to this
Agreement including, without limitation, the items set forth in Sections 9.3 and
9.4 hereof, as applicable.
(e) All instruments and documents to be delivered to EMC and the
EMC Shareholders pursuant to the provisions hereof shall be reasonably
satisfactory to legal counsel for EMC.
(f) There shall be no order, decree, or ruling by any court or
governmental agency or threat thereof, or any other fact or circumstance that
would prohibit or render illegal the transactions provided for in this
Agreement.
(g) No litigation or proceeding shall be pending that will have
the probable effect of enjoining or preventing the consummation of any of the
transactions provided for in this Agreement. No litigation or proceeding shall
be pending which could reasonably be expected to have a material adverse effect
on the financial condition or results of operations of either of the Constituent
Corporations.
(h) Each of the Constituent Corporations shall have obtained and
shall have delivered to EMC copies of (i) all governmental approvals required to
be obtained by each of the Constituent Corporations in connection with the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, if any, and (ii) all consents necessary to be
obtained by each of the Constituent Corporations in order to consummate the
Merger pursuant to this Agreement.
(i) New Jersey shall have provided EMC a copy of its financial
statements.
5.2 Conditions Precedent to the Obligations of the Constituent
Corporations. All obligations of each of the Constituent Corporations under this
Agreement are subject to the fulfillment, prior to or as of the Closing Date, of
each of the following conditions (any one or more of which may be waived by the
Constituent Corporations):
(a) The representations and warranties by EMC and the EMC
Shareholders contained in this Agreement or in any certificate or document
delivered pursuant to the provisions hereof shall be true in all material
respects at and as of the Closing Date as though such representations and
warranties were made at and as of such time.
(b) EMC and the EMC Shareholders shall have performed and complied
in all material respects with all covenants, agreements, and conditions set
forth in this Agreement to be performed or complied with by them prior to or at
the Closing.
(c) EMC and the EMC Shareholders shall have executed and delivered
each instrument and document to be delivered by them pursuant to this Agreement
including, without limitation, the items set forth in Sections 9.1 and 9.2
hereof.
(d) All instruments and documents to be delivered by EMC and the
EMC Shareholders pursuant to the provisions hereof shall be reasonably
satisfactory to legal counsel for the Constituent Corporations.
(e) There shall be no order, decree, or ruling by any court or
governmental agency or threat thereof, or any other fact or circumstance that
would prohibit or render illegal the transactions provided for in this
Agreement.
(f) No litigation or proceeding shall be pending that will have
the probable effect of enjoining or preventing the consummation of any of the
transactions provided for in this Agreement.
SECTION 6. COVENANTS
6.1 Conduct of Business. On and after the date hereof and until
the Closing Date, except as expressly permitted or required by this Agreement or
as otherwise expressly consented to by EMC in writing, each of the Constituent
Corporations will:
(a) carry on its business in, and only in, the ordinary course, in
substantially the same manner as heretofore conducted, and use all commercially
reasonable efforts to preserve intact its present business organization, and
maintain its properties in good operating condition and repair;
(b) maintain its books of account and records in the usual,
regular and ordinary manner consistent with past policies and practices and not
change such policies and practices;
(c) comply in all material respects with all laws applicable to it
and its business;
(d) use all reasonable efforts to maintain its good standing in
its jurisdiction of incorporation and in the jurisdictions in which it is
qualified to do business as a foreign corporation and to maintain all
governmental approvals and consents necessary for, or otherwise material to, it
and its business;
(e) not merge or consolidate with, or agree to merge or
consolidate with, or purchase substantially all of the assets of, or otherwise
acquire, any business, business organization or division thereof, of any other
person;
(f) not issue or sell any shares of any class of its capital
stock, or any securities convertible into or exchangeable for any such shares,
or issue, sell, grant or enter into any subscriptions, options, warrants,
conversion or other rights, agreements, commitments, arrangements or
understandings of any kind, contingently or otherwise, to purchase or otherwise
acquire any such shares or any securities convertible into or exchangeable for
any such shares;
(g) not incur any indebtedness for borrowed money, issue or sell
any debt securities or prepay any debt (including, without limitation, any
borrowings from or prepayments to any stockholder or other affiliate);
(h) not mortgage, pledge or otherwise subject to any Lien, any of
its properties or assets, tangible or intangible;
(i) not pay or commit to pay any bonus, other incentive
compensation, change in control or similar compensation to any officer,
director, employee, stockholder or affiliate or grant or commit to grant to any
officer, director, employee, stockholder or affiliate any other increase in, or
additional, compensation in any form;
(j) not amend either its Certificate of Incorporation or By-laws;
(k) not incur, assume, guarantee or otherwise become directly or
indirectly liable with respect to any Liability or obligation in excess of
$1,000 in each case or $5,000 in the aggregate at any one time outstanding
(whether absolute, accrued, contingent or
otherwise and whether direct or indirect, or as guarantor or otherwise with
respect to any liability or obligation of any other person); and
(l) not liquidate, dissolve or wind-up its affairs.
6.2 No Solicitation. From the date hereof until the earlier of the
Closing or the termination of this Agreement in accordance with the terms
hereof, each of the Constituent Corporations agrees:
(a) that it shall not, and shall direct and use its best efforts
to cause its officers, sole Director, employees, agents and representatives
(including, without limitation, any investment banker, attorney or accountant
retained by it) not to, initiate, solicit or encourage, directly or indirectly,
any inquiries or the making or implementation of any proposal or offer
(including, without limitation, any proposal or offer to its sole stockholder)
with respect to a merger, acquisition, consolidation or similar transaction
involving, or any purchase of all or any significant portion of the assets or
equity securities of, such Constituent Corporation (any such proposal or offer
being hereinafter referred to as a "Proposal") or engage in any negotiations
concerning, or provide any confidential information or data to, or have any
discussions with, any person relating to a Proposal, or otherwise facilitate any
effort or attempt to make or implement a Proposal;
(b) that it will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing and will take the necessary
steps to inform the individuals or entities referred to above of the obligations
undertaken in this Section 6.2; and
(c) that it will notify EMC immediately of the identity of the
potential acquiror and the terms of such person's or entity's proposal if any
such inquiries or proposals are received by, any such information is requested
from, or any such negotiations or discussions are sought to be initiated or
continued with, it; provided, however, that nothing contained in this Section
6.2 shall prohibit the sole Director of either of the Constituent Corporations
from (i) furnishing information to or entering into discussions or negotiations
with any person or entity that makes an unsolicited written proposal to acquire
such company pursuant to a merger, consolidation, share exchange, purchase of a
substantial portion of the assets, business combination or other similar
transaction, if, and only to the extent that, (A) the Board of Directors of such
company determines in good faith that such action is required for the Board of
Directors to comply with its fiduciary duties to stockholders, (B) prior to
furnishing such information to, or entering into discussions or negotiations
with, such person or entity, such Constituent Corporation provides written
notice to EMC to the effect that it is furnishing information to, or entering
into discussions or negotiations with, such person or entity, and (C) subject to
any confidentiality agreement with such person or entity (which such Constituent
Corporation determined in good faith was required to be executed in order for
the sole Director to comply with his fiduciary duties to stockholders), such
Constituent Corporation keeps EMC informed of the status of any such discussions
or negotiations and (ii) to the extent applicable, complying with Rule 14e-2
promulgated under the 1934 Act with regard to a Proposal.
6.3 Corporate Examinations and Investigations. From the date
hereof until the earlier of the Closing or the termination of this Agreement in
accordance with the terms hereof, each of the parties hereto will give the other
parties hereto and such other parties' accountants, counsel, consultants,
employees and agents, access at all reasonable times to, and furnish them with
all documents, records, work papers and information with respect to, all of the
assets, properties, books, contracts, commitments, reports and records of such
party, as any of the other parties hereto shall from time to time reasonably
request. No investigations by a party hereto shall, however, diminish or waive
any of the representations, warranties, covenants or agreements of the party
under this Agreement.
6.4 Further Assurances. Each of the parties hereto agrees to use
and to cause all persons acting on its behalf to use all reasonable good faith
efforts to take all actions and to do all things necessary, proper or advisable
to consummate the transactions contemplated hereby by the Closing Date. Each of
the parties hereto will, and will cause all persons acting on its or their
behalf to, coordinate and cooperate with the other parties hereto in exchanging
such information and supplying such assistance as may be reasonably requested by
the other parties hereto in connection with the filings and other actions
contemplated hereby. Following the Closing, each of the parties hereto shall,
and shall cause all persons acting on its or their behalf to, from time to time,
execute and deliver such additional instruments, documents, conveyances or
assurances and take such other actions as shall be necessary, or otherwise
reasonably requested by any of the other parties hereto, to confirm and assure
the rights and obligations provided for in this Agreement and render effective
the consummation of the transactions contemplated hereby.
6.5 Confidentiality. In the event the transactions contemplated by
this Agreement are not consummated, each of the parties agrees to keep
confidential any information disclosed to each other in connection therewith for
a period of one (1) year from the date hereof; provided, however, such
obligation shall not apply to information which:
(i) at the time of the disclosure was generally known to
the public;
(ii) after the time of disclosure becomes generally known
to the public (except due to the action of the receiving party);
(iii) the receiving party had within its possession at the
time of disclosure; or
(iv) is required by law to be disclosed pursuant to
governmental or judicial process, provided that notice of such process
is promptly provided to the disclosing party so that it may have every
opportunity to intercede in such process to contest such disclosure.
SECTION 7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties contained in this Agreement shall
survive the execution and delivery hereof and the Closing hereunder for one (1)
year following the Closing.
SECTION 8. INDEMNIFICATION
8.1 For a period of one (1) year from the Closing, EMC
agrees to indemnify and hold harmless each of the Constituent Corporations, its
officers, directors and principal stockholders, and each of the Constituent
Corporations agrees to indemnify and hold harmless EMC, the EMC Shareholders and
EMC's officers and directors, at all times up to one (1) year after the date of
this Agreement against and in respect of any liability, damage, or deficiency,
all actions, suits, proceedings, demands, assessments, judgments, costs and
expenses, including attorneys' fees incident to any of the foregoing
(collectively referred to herein as "Damages"), resulting from (i) any material
misrepresentation made herein by any indemnifying party to an indemnified party,
(ii) an indemnifying party's breach of a covenant or warranty or an indemnifying
party's nonfulfillment of any agreement hereunder, or (iii) any material
misrepresentation or omission from any report, certificate, financial statement
or tax return furnished or to be furnished by any party hereto for any period up
to and including 120 days after execution of this Agreement. THIS PROVISION
SHALL NOT BE CONSTRUED TO BE A WAIVER OF ANY LAWFUL INDEMNIFICATION PROVISION
CONTAINED IN A PARTY'S CERTIFICATE OF INCORPORATION OR BY-LAWS, AS PERMITTED BY
FEDERAL OR STATE LAW.
8.2 If the indemnified party receives written notice of
the commencement of any legal action, suit or proceeding with respect to which
the indemnifying party is or may be obligated to provide indemnification
pursuant to this Section, the indemnified party shall, within thirty (30) days
of the receipt of such written notice, give the indemnifying party written
notice thereof (a "Claim Notice"). Failure to give such Claim Notice within such
thirty (30) day period shall not constitute a waiver by the indemnified party or
its rights to indemnity hereunder with respect to such action, suit or
proceeding unless the defense thereof is prejudiced thereby. Upon receipt by the
indemnifying party of a Claim Notice from the indemnified party with respect to
any claim for indemnification which is based upon a claim made by a third party
(the "Third Party Claim"), the indemnifying party may assume the defense of the
Third Party Claim with counsel of its own choosing, as described below. The
indemnified party shall cooperate in the defense of the Third Party Claim and
shall furnish such records, information and testimony and attend all such
conferences, discovery proceedings, hearings, trials and appeals as may be
reasonably required in connection therewith. The indemnified party shall have
the right to employ its own counsel in any such action, but the fees and
expenses of such counsel shall be at the expense of the indemnified party unless
the indemnifying party shall not have with reasonable promptness employed
counsel to assume the defense of the Third Party Claim,
in which event such fees and expenses shall be borne solely by the indemnifying
party. The indemnifying party shall not satisfy or settle any Third Party Claim
for which indemnification has been sought and is available hereunder, without
the prior written consent of the indemnified party, which consent shall not be
delayed or which shall not be required if the indemnified party is granted a
release in connection therewith. If the indemnifying party shall fail with
reasonable promptness to defend such Third Party Claim, the indemnified party
may defend, satisfy or settle the Third Party Claim at the expense of the
indemnifying party and the indemnifying party shall pay to the indemnified party
the amount of such loss within ten (10) days after written demand thereof. The
indemnification provisions hereof shall survive the termination of this
Agreement. The provisions of this Section 8 shall be the sole remedy against a
party for breach of Sections 2, 3 and 4 hereof.
SECTION 9. ITEMS TO BE DELIVERED AT CLOSING
At the Closing, in addition to any other documents to be delivered
under other provisions of this Agreement, the following items shall be
delivered, all of such deliveries being deemed to occur simultaneously:
9.1 Items to be Delivered by EMC. EMC will deliver, or will cause
to be delivered, to the Constituent Corporations the following, the form and
substance of which shall be reasonably acceptable to each of the Constituent
Corporations and its legal counsel:
(i) A certificate executed by the President and Secretary
of EMC to the effect that the representations and warranties made by
EMC in this Agreement are true and correct in all material respects as
of the Closing Date, with the same effect as though made on and as of
such date;
(ii) Certified copies of the Certificate of Incorporation
and By-laws of EMC, as in effect on the Closing Date;
(iii) Certified copy of resolutions of the Directors of EMC
authorizing this Agreement and the transactions contemplated hereby;
(iv) Certified copies of resolutions of the EMC
Shareholders approving the Merger;
(v) A certificate from the Secretary of State of
Delaware, dated within fifteen (15) days of the Closing Date to the
effect that EMC is a corporation in good standing under the laws of
said State; and
(vi) An opinion of its legal counsel, limited as to any
portion of the opinion as to an aspect of this Agreement governed by
the application of Delaware law, to the Constituent Corporations to the
effect that:
(1) EMC is a corporation validly existing and in
good standing under the laws of the State of Delaware;
(2) EMC has the corporate power to carry on its
business as presently conducted;
(3) This Agreement and the other documents and
instruments delivered by EMC hereunder have been duly
authorized, executed and delivered by EMC and each is a valid
and binding obligation of EMC, enforceable in accordance with
its terms;
(4) The execution, performance and delivery of
this Agreement by EMC, and the consummation of the
transactions contemplated thereby, will not violate, conflict
with or result in the material breach of any of the terms of,
result in a material modification of, otherwise give any other
contracting party the right to terminate, or constitute (or
with notice or lapse of time, or both constitute) a default
under, any material contract or other agreement to which EMC
is a party or by or to which it or any of its assets or
properties is bound or subject;
(5) EMC has taken all corporate action necessary
for performance under this Agreement; and
(6) The shares of EMC Common Stock to be
transferred to New Jersey pursuant to this Agreement have been
duly authorized and are validly issued, fully paid and
non-assessable.
Such opinion shall also cover such additional matters as each of the
Constituent Corporations and its counsel may reasonably request.
9.2 Items to be Delivered by the EMC Shareholders. Each EMC
Shareholder will deliver to New Jersey certificates representing the EMC Common
Stock of such EMC Shareholder to be transferred to New Jersey hereunder.
9.3 Items to be Delivered by Merger Sub. Merger Sub will deliver,
or cause to be delivered, to EMC and/or the EMC Shareholders the following, the
form and substance of which shall be reasonably acceptable to EMC and its legal
counsel:
(i) A certificate executed by the President and Secretary
of Merger Sub, to the effect that the representations and warranties of
Merger Sub made in this Agreement are true and correct in all material
respects as of the Closing Date, with the same effect as though made on
and as of such date;
(ii) Certified copies of the Certificate of Incorporation
and By-laws of Merger Sub, as in effect on the Closing Date;
(iii) Certified copy of resolutions of the sole Director of
Merger Sub authorizing this Agreement and the transactions contemplated
hereby;
(iv) Certified copies of resolutions of the sole
stockholder of Merger Sub approving the Merger;
(v) A certificate from the Secretary of State of Delaware
dated within fifteen (15) days of the Closing Date to the effect that
Merger Sub is a corporation in good standing under the laws of said
State;
(vi) An opinion of its legal counsel, limited as to any
portion of the opinion as to an aspect of this Agreement governed by
the application of Delaware law, to EMC to the effect that:
(1) Merger Sub is a corporation validly existing
and in good standing under the laws of the State of Delaware;
(2) Merger Sub has the corporate power to carry
on its business as presently conducted;
(3) This Agreement and the other documents and
instruments delivered by Merger Sub hereunder have been duly
authorized, executed and delivered by Merger Sub and each is a
valid and binding obligation of Merger Sub, enforceable in
accordance with its terms; and
(4) Merger Sub has taken all corporate action
necessary for performance under this Agreement.
Such opinion shall also cover such additional matters as EMC and its
counsel may reasonably request.
(vii) A list of the stockholders of Merger Sub pursuant to
Section 3.11 hereof.
9.4 Items to be Delivered by New Jersey. New Jersey will deliver,
or cause to be delivered, to EMC and/or the EMC Shareholders the following, the
form and substance of which shall be reasonably acceptable to EMC and its legal
counsel:
(i) A certificate executed by the President and Secretary
of New Jersey, to the effect that the representations and warranties of
New Jersey made in this Agreement are true and correct in all material
respects as of the Closing Date, with the same effect as though made on
and as of such date;
(ii) Certified copies of the Certificate of Incorporation
and By-laws of New Jersey, as in effect on the Closing Date;
(iii) Certified copy of resolutions of the sole Director of
New Jersey authorizing this Agreement and the transactions contemplated
hereby;
(iv) Certified copies of resolutions of the sole
stockholder of New Jersey approving the Merger;
(v) A certificate from the Secretary of State of Delaware
dated within fifteen (15) days of the Closing Date to the effect that
New Jersey is a corporation in good standing under the laws of said
State;
(vi) An opinion of its legal counsel, limited as to any
portion of the opinion as to an aspect of this Agreement governed by
the application of Delaware law, to EMC to the effect that:
(1) New Jersey is a corporation validly existing
and in good standing under the laws of the State of Delaware;
(2) New Jersey has the corporate power to carry
on its business as presently conducted;
(3) This Agreement and the other documents and
instruments delivered by New Jersey hereunder have been duly
authorized, executed and delivered by New Jersey and each is a
valid and binding obligation of New Jersey, enforceable in
accordance with its terms;
(4) New Jersey has taken all corporate action
necessary for performance under this Agreement; and
(5) The Consideration Shares issued to the EMC
Shareholders pursuant to this Agreement have been duly
authorized and are validly issued, fully paid and
non-assessable.
Such opinion shall also cover such additional matters as EMC and its
counsel may reasonably request.
(vii) Certificates representing the Consideration Shares
pursuant to the Plan of Merger;
(viii) Evidence satisfactory to EMC of the filing of all
1934 Act Filings due by New Jersey for periods prior to the Closing
Date; and
(ix) A list of the stockholders of New Jersey pursuant to
Section 4.12 hereof.
SECTION 10. TERMINATION
10.1 Termination Generally. This Agreement may be terminated at any
time prior to the Closing:
(a) by the written agreement of each of the parties;
(b) by either of the Constituent Corporations or EMC, by written
notice to the other party on or after June 30, 2004 if the Closing shall not
have occurred by such date (unless the failure of the Closing to occur shall be
due to any breach of this Agreement by the party seeking to terminate), unless
such date shall be extended by the mutual written consent of each of the
Constituent Corporations and EMC;
(c) by either of the Constituent Corporations, if there has been a
material breach on the part of EMC in the representations, warranties or
covenants of EMC or the EMC Shareholders set forth herein, or a failure on the
part of EMC or the EMC Shareholders to perform their respective obligations
hereunder; provided, that each of the Constituent Corporations shall have
performed and complied with, in all material respects, all agreements and
covenants required by this Agreement to have been performed and complied with by
it prior to such time, or any other events or circumstances shall have occurred
such that, in any such case, any of the conditions to the Closing set forth in
Section 5.2 could not be satisfied on or prior to the termination date
contemplated by Section 10.1(b) hereof; or
(d) by EMC, if there has been a material breach on the part of
either of the Constituent Corporations in the representations, warranties or
covenants of such Constituent Corporation set forth herein or any failure on the
part of either of the Constituent Corporations to perform its obligations
hereunder; provided that EMC shall have performed and complied with, in all
material respects, all agreements and covenants required by this Agreement to
have been performed or complied with by it prior to such time, or any other
events or circumstances shall have occurred such that, in any case, any of the
conditions to the Closing set forth in Section 5.1 could not be satisfied on or
prior to the termination date contemplated by Section 10.1(b) hereof.
10.2 Effect of Termination.
(a) In the event of the termination of this Agreement pursuant to
the provisions of Section 10.1, this Agreement shall become void and have no
effect and all obligations of the parties hereto shall terminate, except the
obligations of the parties pursuant to Section 6.5 hereof and this Section 10.2.
(b) In the event of termination of this Agreement pursuant to
Sections 10.1(c) or 10.1(d), nothing herein shall prejudice the ability of the
non-breaching party from seeking damages from any other party for any breach of
this Agreement including, without limitation, attorneys' fees and the right to
pursue any remedy at law or in equity.
(c) At any time prior to the Closing, any party hereto, by action
taken by its Board of Directors, may, to the extent legally allowed, (i) extend
the time for the performance of any of the obligations or other acts of the
other parties hereto, (ii) waive any inaccuracies in the representations and
warranties made to such party contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any of the agreements or
conditions for the benefit of such party contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party.
SECTION 11. MISCELLANEOUS
11.1 Waivers. The waiver of a breach of this Agreement or the
failure of any party hereto to exercise any right under this Agreement shall in
no way constitute waiver as to any future breach, whether similar or dissimilar
in nature, or as to the exercise of any further right under this Agreement.
11.2 Amendment. Any term or provision of this Agreement may be
amended, and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only by a writing signed by each of the parties to be bound
thereby.
11.3 Assignment. This Agreement is not assignable except by
operation of law.
11.4 Notice. Until otherwise specified in writing, the mailing
addresses and fax numbers of the parties of this Agreement shall be as follows:
To New Jersey Acquisition, Inc. and Merger Sub:
00000 Xxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx, Xxxx 00000
(000) 000-0000
With a copy to:
Xxxxx X. Xxxxxxxxx, Esq.
Margulies & Xxxxxxxx LLP
00000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxx 00000
(000) 000-0000
To EMC, Inc.:
00 Xxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
With a copy to:
W. Xxxxxxx Xxxxxx, Esq.
Greenbaum, Rowe, Xxxxx, Xxxxx, Xxxxx & Xxxxxx, LLP
00 Xxxx Xxxxxx Xxxxx
X.X. Xxx 0000 Xxxxxxxxxx, Xxx Xxxxxx 00000
(000) 000-0000
To Any of the EMC Shareholders:
To the address of such person set forth on Exhibit A.
Any notice or other communication required or permitted to be given
under this Agreement will be in writing, will be delivered personally or by
facsimile, mail or express delivery, postage prepaid, and will be deemed given
upon actual delivery or, if mailed by registered or certified mail, on the third
business day following deposit in the mails, addressed as indicated above or at
such other address which shall have been furnished in writing to the addressor.
11.5 Governing Law. This Agreement shall be construed, and the
legal relations between the parties determined, in accordance with the laws of
the State of Delaware, thereby precluding any choice of law rules which may
direct the application of the laws of any other jurisdiction.
11.6 Publicity. No publicity release or announcement concerning
this Agreement or the transactions contemplated hereby shall be issued by any
party hereto at any time from the signing hereof through the Closing Date,
without advance approval in writing of the form and substance by the other
party.
11.7 Entire Agreement. This Agreement (including the Exhibits and
Schedules to be attached hereto) and the collateral agreements executed in
connection with the consummation of the transactions contemplated herein contain
the entire agreement among the parties with respect to the Merger and related
transactions, and supersede all prior agreements, written or oral, with respect
thereto.
11.8 Headings. The headings in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
11.9 Severability of Provisions. The invalidity or unenforceability
of any term, phrase, clause, paragraph, restriction, covenant, agreement or
provision of this Agreement shall in no way affect the validity or enforcement
of any other provision or any part thereof.
11.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall constitute an original copy
hereof, but all of which together shall be considered but one and the same
document.
11.11 Binding Effect. This Agreement shall be binding upon the
parties hereto and inure to the benefit of the parties, their respective heirs,
administrators, executors, successors and assigns.
11.12 Tax Treatment. Each of the Constituent Corporations, EMC and
the EMC Shareholders acknowledge that they each have been represented by their
own tax advisors in connection with this transaction, that none of them has made
a representation or warranty to any of the other parties with respect to the tax
treatment accorded this transaction, or the effect individually or corporately
on any party under the applicable tax laws, regulations, or interpretations, and
that no opinion of counsel or private revenue ruling has been obtained with
respect to the effects of this transaction under the Code.
11.13 Press Releases. The parties will mutually agree as to the
wording and timing of any informational releases concerning this transaction
prior to and through the first such release to follow the Closing.
11.14 Mediation.
(a) The parties shall make a good faith attempt to settle any
dispute hereunder ("Dispute") by mediation pursuant to the provisions of this
Section 11.14 before resorting to litigation or any other dispute resolution
procedure.
(b) Unless the parties agree otherwise, the mediation shall be
conducted in accordance with the Commercial Mediation Rules of the American
Arbitration Association then in effect by a mediator who (i) has the
qualifications and experience set forth in paragraph (c) of this Section 11.14
and (ii) is selected as provided in paragraph (d) of this Section 11.14.
(c) Unless the parties agree otherwise, the mediator shall be a
neutral and impartial lawyer with excellent academic and professional
credentials (i) who is or has been practicing law for at least fifteen (15)
years, specializing in either general commercial litigation or general corporate
and commercial matters, and (ii) who has had both training and experience as a
mediator and who has successfully mediated at least ten (10) cases.
(d) Any party (the "Initiating Party") may initiate mediation of
the Dispute by giving each of the other parties (the "Recipient Parties")
written notice (a "Mediation Notice") setting forth a list of the names and
resumes of qualifications and experience of three (3) impartial persons who the
Initiating Party believes would be qualified as a mediator pursuant to the
provisions of paragraph (c) hereof. Within fifteen (15) days after the delivery
of the Mediation Notice, the Recipient Parties shall give a counter-notice (the
"Counter-Notice") to the Initiating Party in which the Recipient Parties may
designate a
person to serve as the mediator from among the three (3) persons listed by the
Initiating Party in the Mediation Notice (in which event such designated person
shall be the mediator). If none of the persons listed in the Mediation Notice is
designated by the Recipient Parties to serve as the mediator, the Counter-Notice
should set forth a list of the names and resumes of three (3) impartial persons
who the Recipient Parties believe would be qualified as a mediator pursuant to
the provisions of paragraph (c) hereof. Within ten (10) days after the delivery
of the Counter-Notice, the Initiating Party may designate a person to serve as
the mediator from among the three (3) persons listed by the Recipient Parties in
the Counter-Notice (in which event such designated person shall be the
mediator). If the parties cannot agree on a mediator from the three (3)
impartial nominees submitted by each party, each party shall strike two (2)
names from the other party's list and the two (2) remaining persons on both
lists will jointly select as the mediator any person who has the qualifications
and experience set forth in paragraph (c) hereof. If they are unable to agree,
then the President of the Delaware Bar Association shall select as the mediator
any person who, in his or her opinion, has such qualifications and experience.
(e) Within thirty (30) days after the mediator has been selected
as provided above, both parties and their respective attorneys shall meet with
the mediator for one mediation session of at least four (4) hours, it being
agreed that each party representative attending such mediation session shall
have authority to settle the Dispute. If the Dispute cannot be settled at such
mediation session or at any mutually agreed continuation thereof, either party
may give the other and the mediator a written notice declaring the mediation
process at an end, in which event then the Dispute shall be resolved by
arbitration as hereinafter provided.
(f) All conferences and discussions which occur in connection with
the mediation conducted pursuant to this Agreement shall be deemed settlement
discussions, and nothing said or disclosed, nor any document produced, which is
not otherwise independently discoverable shall be offered or received as
evidence or used for impeachment or for any other purpose in any current or
future arbitration or litigation.
(g) The costs of the mediation shall be shared equally between the
parties.
11.15 Attorney-in-Fact. Each of the EMC Shareholders, by the execution
of this Agreement, hereby irrevocably appoints each of W. Xxxxxxx Xxxxxx and
Xxxx Xxxxxxx as the agent, proxy and attorney-in-fact of such EMC Shareholder
for all purposes of this Agreement including, without limitation full power and
authority to receive the Consideration Shares on behalf of such EMC Shareholder,
to execute on behalf of such EMC Shareholder any amendment hereto (provided that
such amendment does not enlarge the scope of such EMC Shareholder's liability
beyond that provided herein), to execute and deliver all certificates, to take
all other actions to be taken by or on behalf of the EMC Shareholders on or
before the Closing, and to do each and every act and exercise any and all rights
which the EMC Shareholders are permitted or required to do or exercise under
this Agreement. Each of the EMC Shareholders agrees that such agency and proxy
are coupled with an interest.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
EMC PACKAGING, INC.
By: /s/ Xxxx Xxxxxxx
---------------------------
Name: Xxxx Xxxxxxx
Title: Chairman and Chief Executive Officer
NEW JERSEY MERGER SUB, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
NEW JERSEY ACQUISITION, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
EMC SHAREHOLDERS:
/s/ Xxxxxx Xxxxxx /s/ Xxxxx Xxxxxx
-------------------------------- -----------------------------
Xxxxxx Xxxxxx Xxxxx Xxxxxx
/s/ Xxxxxx Xxxx Xxxxxxxx /s/ Xxxxxxxx Xxxxxxxxx
-------------------------------- -----------------------------
Xxxxxx Xxxx Xxxxxxxx Xxxxxxxx Xxxxxxxxx
/s/ Xxxxx Xxxxxxxxx
--------------------------------
Xxxxx Xxxxxxxxx
Xxx 3 Corp.:
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
Xxxxxx Can Company, Inc.:
By: /s/ Xxxx Xxxxxx
---------------------------------------
Name: Xxxx Xxxxxx
Title: President
