Exhibit 2.1
ACQUISITION AGREEMENT AND PLAN OF MERGER
DATED AS OF MARCH 19, 2004
BETWEEN
NEIGHBORHOOD CONNECTIONS, INC.
AND
JCG, INC.
TABLE OF CONTENTS
ARTICLE 1. The Merger
Section 1.1. The Merger
Section 1.2. The Acquisition
Section 1.3. Effective Time
Section 1.4. Closing of the Merger
Section 1.5. Effects of the Merger
Section 1.6. Board of Directors and Officers of NBHC
Section 1.7. Taking of Necessary Action; Further Action
ARTICLE 2. Representations and Warranties of NBHC
Section 2.1. Organization and Qualification
Section 2.2. Capitalization of NBHC
Section 2.3. Authority Relative to this Agreement; Recommendation
Section 2.4. SEC Reports; Financial Statements
Section 2.5. Information Supplied
Section 2.6. Consents and Approvals; No Violations
Section 2.7. No Default
Section 2.8. No Undisclosed Liabilities; Absence of Changes
Section 2.9. Litigation
Section 2.10. Compliance with Applicable Law
Section 2.11. Employee Benefit Plans; Labor Matters
Section 2.12. Environmental Laws and Regulations
Section 2.13. Tax Matters
Section 2.14. Title To Property
Section 2.15. Intellectual Property
Section 2.16. Insurance
Section 2.17. Vote Required
Section 2.18. Tax Treatment
Section 2.19. Affiliates
Section 2.20. Certain Business Practices
Section 2.21. Insider Interests
Section 2.22. Opinion of Financial Adviser
Section 2.23. Brokers
Section 2.24. Disclosure
Section 2.25. No Existing Discussion
ARTICLE 3. Representations and Warranties of JCG.
Section 3.1. Organization and Qualification
Section 3.2. Capitalization of JCG
Section 3.3. Authority Relative to this Agreement; Recommendation
Section 3.4. SEC Reports; Financial Statements
Section 3.5. Information Supplied
Section 3.6. Consents and Approvals; No Violations
Section 3.7. No Default
Section 3.8 No Undisclosed Liabilities; Absence of Changes
Section 3.9. Litigation
Section 3.10. Compliance with Applicable Law
Section 3.11. Employee Benefit Plans; Labor Matters
Section 3.12. Environmental Laws and Regulations
Section 3.13. Tax Matters
Section 3.14. Title to Property
Section 3.15. Intellectual Property
Section 3.16. Insurance
Section 3.17. Vote Required
Section 3.18. Tax Treatment
Section 3.19. Affiliates
Section 3.20. Certain Business Practices
Section 3.21. Insider Interests
Section 3.22. Opinion of Financial Adviser
Section 3.23. Brokers
Section 3.24. Disclosure
Section 3.25. No Existing Discussions
ARTICLE 4. Covenants
Section 4.1. Conduct of Business of NBHC
Section 4.2. Conduct of Business of JCG
Section 4.3. Preparation of 8-K
Section 4.4. Other Potential Acquirers
Section 4.5. NASD OTC:BB Listing
Section 4.6. Access to Information
Section 4.7. Additional events; Reasonable Efforts
Section 4.8. Indemnification
Section 4.9. Notification of Certain Matters
ARTICLE 5. Conditions to Consummation of the Merger
Section 5.1. Conditions to each Party's Obligation
Section 5.2. Conditions to the Obligations of NBHC
Section 5.3. Conditions to the Obligations of JCG
ARTICLE 6. Termination; Amendment; Waiver
Section 6.1. Termination
Section 6.2. Effect of Termination
Section 6.3. Fees and Expenses
Section 6.4. Amendment
Section 6.5. Extension; Waiver
ARTICLE 7. Miscellaneous
Section 7.1. Nonsurvival of Representations and Warranties
Section 7.2. Entire Agreement; Assignment
Section 7.3. Validity
Section 7.4. Notices
Section 7.5. Governing Law
Section 7.6. Descriptive Headings
Section 7.7. Parties in Interest
Section 7.8. Certain Definitions
Section 7.9. Personal Liability
Section 7.10. Specific Performance
Section 7.11. Counterparts
ACQUISITION AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement"), dated as of March
19, 2004, is between NEIGHBORHOOD CONNECTIONS, INC., a Nevada corporation
("NBHC"), and JCG, INC., a Nevada corporation ("JCG").
Whereas, the Boards of Directors of NBHC and JCG each have, in light of
and subject to the terms and conditions set forth herein, (i) determined that
the Merger (as defined below) is fair to their respective stockholders and in
the best interests of such stockholders and (ii) approved the Acquisition
Agreement and Plan of Merger in accordance with this Agreement;
Whereas, for Federal income tax purposes, it is intended that the Merger
qualify as a reorganization under the provisions of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"); and
Whereas, NBHC and JCG desire to make certain representations, warranties,
covenants and agreements in connection with the Merger and also to prescribe
various conditions to the Merger.
Now, therefore, in consideration of the promises and the representations,
warranties, covenants and agreements herein contained, and intending to be
legally bound hereby, NBHC and JCG hereby agree as follows:
ARTICLE I
The Merger
Section 1.1. The Merger. At the Effective Time (as defined below) and
upon the terms and subject to the conditions of this Agreement and in
accordance with the General Corporation Law of the State of Nevada (the
"NGCL"), JCG shall be merged with and into NBHC (as defined below) (the
"Merger"). Following the Merger, NBHC shall continue as the surviving
corporation (the "Successor Corporation"), shall continue to be governed by
the laws of the jurisdiction of its incorporation or organization and the
separate corporate existence of JCG shall cease to exist. The Successor
Corporation shall continue to adapt the original Articles and By-laws of NBHC.
Initially the Successor Corporation shall be named NEIGHBORHOOD CONNECTIONS,
INC., a Nevada corporation. The Merger is intended to qualify as a tax-free
reorganization under Section 368 of the Code as relates to the non-cash
exchange of stock referenced herein.
Section 1.2. The Acquisition. NBHC shall purchase for cash all of the
issued and outstanding shares of JCG. JCG has 360,000 common shares issued and
outstanding to one shareholder. This shareholder has agreed to sell and NBHC
has agreed to purchase all 360,000 shares for cash at par value $0.001 for a
total of $3,600. Once NBHC purchases all of the common shares of JCG, NBHC
will have complete ownership of JCG.
Section 1.3. Effective Time. Subject to the terms and conditions set
forth in this Agreement, a Certificate of Merger (the "Merger Certificate")
shall be duly executed and acknowledged by each of JCG and NBHC, and
thereafter the Merger Certificate reflecting the Merger shall be delivered to
the Secretary of State of the State of Nevada for filing pursuant to the NGCL
on the Closing Date (as defined in Section 1.3). The Merger shall become
effective at such time as a properly executed and certified copy of the
Merger Certificate is duly filed by the Secretary of State of the State
of Nevada in accordance with the NGCL or such later time as the parties
may agree upon and set forth in the Merger Certificate (the time at which
the Merger becomes effective shall be referred t herein a the "Effective
Time").
Section 1.4. Closing of the Merger. The closing of the Merger (the
"Closing") will take place at a time and on a date to be specified by the
parties, which shall be no later than the second business day after
satisfaction of the latest to occur of the conditions set forth in Article 5
(the "Closing Date"), at the law offices of Xxxxxx X. Xxxx, 0000 X. Xxxxxx
Xxx, Xxxxx 000, Xxx Xxxxx, XX 00000, unless another time, date or place is
agreed to in writing by the parties hereto.
Section 1.5. Effects of the Merger. The Merger shall have the effects
set forth in the NGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the properties,
rights, privileges, powers of JCG shall vest in the Successor Corporation,
and all debts, liabilities and duties of JCG shall become the debts,
liabilities and duties of the Successor Corporation.
Section 1.6. Board of Directors and Officers of NBHC. At or prior to the
Effective Time, each of JCG and NBHC agrees to take such action as is
necessary (i) to cause the number of directors comprising the full Board of
Directors of NBHC to remain the same.
Section 1.7. Taking of Necessary Action; Further Action. If, at any time
after the Effective Time, JCG or NBHC reasonably determines that any deeds,
assignments, or instruments or confirmations of transfer are necessary or
desirable to carry out the purposes of this Agreement and to vest NBHC with
full right, title and possession to all assets, property, rights, privileges,
powers and franchises of JCG, the officers and directors of NBHC and JCG are
fully authorized in the name of their respective corporations or otherwise to
take, and will take, all such lawful and necessary or desirable action.
ARTICLE 2
Representations and Warranties of NBHC
Except as set forth on the Disclosure Schedule delivered by NBHC to JCG
(the "NBHC Disclosure Schedule"), NBHC hereby represents and warrants to JCG
as follows:
Section 2.1. Organization and Qualification.
(a) NBHC is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization, has
approximately 40 or more round lot (100 or more shares) stockholders and has
all requisite power and authority to own, lease and operate its properties
and to carry on its businesses as now being conducted, except where the
failure to be so organized, existing and in good standing or to have such
power and authority would not have a Material Adverse Effect (as defined
below) on NBHC. When used in connection with NBHC, the term "Material
Adverse Effect" means any change or effect (i) that is or is reasonably likely
to be materially adverse to the business, results of operations, condition
(financial or otherwise) or prospects of NBHC, other than any change or
effect arising out of general economic conditions unrelated to any business
in which NBHC is engaged, or (ii) that may impair the ability of NBHC to
perform its obligations hereunder or to consummate the transactions
contemplated hereby.
(b) NBHC has heretofore delivered to JCG accurate and complete copies of
the Articles of Incorporation and Bylaws (or similar governing documents), as
currently in effect, of NBHC. Except as set forth on Schedule 2.1 of the NBHC
Disclosure Schedule, NBHC is duly qualified or licensed and in good standing
to do business in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except in such jurisdictions where the
failure to be so duly qualified or licensed and in good standing would not
have a Material Adverse Effect on NBHC.
Section 2.2. Capitalization of NBHC.
(a) The authorized capital stock of NBHC consists of: (i) Sixty Million
(60,000,000) Authorized Shares of Common Stock, $0.001 par value, 6,420,000
Common shares are issued and outstanding as of March 17, 2004, and held by
approximately 40 or more round lot (100 or more shares) stockholders; (ii)
Fifteen Million (15,000,000) Authorized Shares of Preferred Stock, $0.001
par value, no Preferred Shares have been issued. Pursuant to the Merger
Agreement NBHC will not issue any shares to JCG, and purchase the 360,000
issued and outstanding of JCG for cash at par value of $0.001 per share. All of
the outstanding NBHC Shares have been duly authorized and validly issued,
and are fully paid, nonassessable and free of preemptive rights. Except as
set forth herein, as of the date hereof, there are no outstanding (i) shares
of capital stock or other voting securities of NBHC, (ii) securities of
NBHC convertible into or exchangeable for shares of capital stock or voting
securities of NBHC, (iii) options or other rights to acquire from NBHC, except
as set forth in 2.2(a) of the Disclosure Schedule, and, no obligations of
NBHC to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of
NBHC, and (iv) equity equivalents, interests in the ownership or earnings
of NBHC or other similar rights (collectively, "NBHC Securities"). As
of the date hereof, except as set forth on Schedule 2.2(a) of the NBHC
Disclosure Schedule there are no outstanding obligations of NBHC or its
subsidiaries to repurchase, redeem or otherwise acquire any NBHC
Securities or stockholder agreements, voting trusts or other agreements or
understandings to which NBHC is a party or by which it is bound relating to
the voting or registration of any shares of capital stock of NBHC. For
purposes of this Agreement, "Lien" means, with respect to any asset
(including, without limitation, any security) any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
asset.
(b) The NBHC Shares constitute the only class of equity securities of
NBHC registered or required to be registered under the Exchange Act.
(c) NBHC does not own directly or indirectly more than fifty percent
(50%) of the outstanding voting securities or interests (including membership
interests) of any entity, other than as specifically disclosed in the
disclosure documents.
Section 2.3. Authority Relative to this Agreement; Recommendation. NBHC
has all necessary corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of NBHC (the "NBHC Board") and no other corporate
proceedings on the part of NBHC are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by NBHC and constitutes a valid,
legal and binding agreement of NBHC, enforceable against NBHC in accordance
with its terms.
Section 2.4. SEC Reports; Financial Statements. SEC Reports; Financial
Statements.
(a) NBHC has not filed any reports with the U. S. Securities and
Exchange Commission.
Section 2.5. Information Supplied. None of the information supplied or
to be supplied by NBHC for inclusion or incorporation by reference in
connection with the Merger will at the date presented to the stockholder of
JCG and at the times of the meeting or meetings of stockholders of NBHC to be
held in connection with the Merger, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.
Section 2.6. Consents and Approvals; No Violations. Except for filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Securities Act, the Exchange Act, state
securities or blue sky laws, the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1916, as amended (the "HSR Act"), the rules of the National Association
of Securities Dealers, Inc. ("NASD"), the filing and recordation of the
Merger Certificate as required by the NGCL, and as set forth on Schedule 2.6
of the NBHC Disclosure Schedule no filing with or notice to, and no permit,
authorization, consent or approval of, any court or tribunal or
administrative, governmental or regulatory body, agency or authority (a
"Governmental Entity") is necessary for the execution and delivery by NBHC of
this Agreement or the consummation by NBHC of the transactions contemplated
hereby, except where the failure to obtain such permits, authorizations,
consents or approvals or to make such filings or give such notice would not
have a Material Adverse Effect on NBHC.
Except as set forth in Section 2.6 of the NBHC Disclosure Schedule,
neither the execution, delivery and performance of this Agreement by NBHC nor
the consummation by NBHC of the transactions contemplated hereby will (i)
conflict with or result in any breach of any provision of the respective
Articles of Incorporation or Bylaws (or similar governing documents) of NBHC,
(ii) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration or Lien) under, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, license, contract, agreement or other instrument or obligation to
which NBHC is a party or by which any of its properties or assets may be
bound, or (iii) violate any order, writ, injunction, decree, law, statute,
rule or regulation applicable to NBHC or any of its properties or assets,
except in the case of (ii) or (iii) for violations, breaches or defaults
which would not have a Material Adverse Effect on NBHC.
Section 2.7. No Default. Except as set forth in Section 2.7 of the NBHC
Disclosure Schedule, NBHC is not in breach, default or violation (and no
event has occurred which with notice or the lapse of time or both would
constitute a breach default or violation) of any term, condition or provision
of (i) its Articles of Incorporation or Bylaws (or similar governing
documents), (ii) any note, bond, mortgage, indenture, lease, license,
contract, agreement or other instrument or obligation to which NBHC is now a
party or by which any of its respective properties or assets may be bound or
(iii) any order, writ injunction, decree, law, statute, rule or regulation
applicable to NBHC or any of its respective properties or assets, except in
the case of (ii) or (iii) for violations, breaches or defaults that would not
have a Material Adverse Effect on NBHC. Except as set forth in Section 2.7 of
the NBHC Disclosure Schedule, each note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or obligation to which NBHC
is now a party or by which its respective properties or assets may be bound
that is material to NBHC and that has not expired is in full force and effect
and is not subject to any material default thereunder of which NBHC is aware
by any party obligated to NBHC thereunder.
Section 2.8. No Undisclosed Liabilities; Absence of Changes. Except as
and to the extent disclosed in the December 31, 1999 audited financial
statements, none of NBHC or its subsidiaries had any liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise,
that would be required by generally accepted accounting principles to be
reflected on a consolidated balance sheet of NBHC and its consolidated
subsidiaries (including the notes thereto) or which would have a Material
Adverse Effect on NBHC. Except as disclosed by NBHC, none of NBHC or its
subsidiaries has incurred any liabilities of any nature, whether or not
accrued, contingent or otherwise, which could reasonably be expected to have,
and there have been no events, changes or effects with respect to NBHC or its
subsidiaries having or which could reasonably be expected to have, a Material
Adverse Effect on NBHC. Except as and to the extent disclosed by NBHC there
has not been (i) any material change by NBHC in its accounting methods,
principles or practices (other than as required after the date hereof by
concurrent changes in generally accepted accounting principles), (ii) any
revaluation by NBHC of any of its assets having a Material Adverse Effect on
NBHC, including, without limitation, any write-down of the value of any
assets other than in the ordinary course of business or (iii) any other
action or event that would have required the consent of any other party
hereto pursuant to Section 4.2 of this Agreement had such action or event
occurred after the date of this Agreement.
Section 2.9. Litigation. Except as set forth in Schedule 2.9 of the NBHC
Disclosure Schedule there is no suit, claim, action, proceeding or
investigation pending or, to the knowledge of NBHC, threatened against NBHC
or any of its subsidiaries or any of their respective properties or assets
before any Governmental Entity which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on NBHC or could
reasonably be expected to prevent or delay the consummation of the
transactions contemplated by this Agreement. Except as disclosed by NBHC,
none of NBHC or its subsidiaries is subject to any outstanding order, writ,
injunction or decree which, insofar as can be reasonably foreseen in the
future, could reasonably be expected to have a Material Adverse Effect on
NBHC or could reasonably be expected to prevent or delay the consummation of
the transactions contemplated hereby.
Section 2.10. Compliance with Applicable Law. Except as disclosed by
NBHC, NBHC and its subsidiaries hold all permits, licenses, variances,
exemptions, orders and approvals of all Governmental Entities necessary for
the lawful conduct of their respective businesses (the "NBHC Permits"),
except for failures to hold such permits, licenses, variances, exemptions,
orders and approvals which would not have a Material Adverse Effect on NBHC.
Except as disclosed by NBHC, NBHC and its subsidiaries are in compliance with
the terms of the NBHC Permits, except where the failure so to comply would
not have a Material Adverse Effect on NBHC. Except as disclosed by NBHC, the
businesses of NBHC and its subsidiaries are not being conducted in violation
of any law, ordinance or regulation of any Governmental Entity except that no
representation or warranty is made in this Section 2.10 with respect to
Environmental Laws and except for violations or possible violations which do
not, and, insofar as reasonably can be foreseen, in the future will not, have
a Material Adverse Effect on NBHC. Except as disclosed by NBHC no
investigation or review by any Governmental Entity with respect to NBHC or
its subsidiaries is pending or, to the knowledge of NBHC, threatened, nor, to
the knowledge of NBHC, has any Governmental Entity indicated an intention to
conduct the same, other than, in each case, those which NBHC reasonably
believes will not have a Material Adverse Effect on NBHC.
Section 2.11. Employee Benefit Plans; Labor Matters.
(a) Except as set forth in Section 2.11(a) of the NBHC Disclosure
Schedule with respect to each employee benefit plan, program, policy,
arrangement and contract (including, without limitation, any "employee
benefit plan," as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), maintained or contributed to at
any time by NBHC or any entity required to be aggregated with NBHC pursuant
to Section 414 of the Code (each, a "NBHC Employee Plan"), no event has
occurred and to the knowledge of NBHC, no condition or set of circumstances
exists in connection with which NBHC could reasonably be expected to be
subject to any liability which would have a Material Adverse Effect on NBHC.
(b) (i) No NBHC Employee Plan is or has been subject to Title IV of
ERISA or Section 412 of the Code; and (ii) each NBHC Employee Plan intended
to qualify under Section 401(a) of the Code and each trust intended to
qualify under Section 501(a) of the Code is the subject of a favorable
Internal Revenue Service determination letter, and nothing has occurred which
could reasonably be expected to adversely affect such determination.
(c) Section 2.11(c) of the NBHC Disclosure Schedule sets forth a true
and complete list, as of the date of this Agreement, of each person who holds
any NBHC Stock Options, together with the number of NBHC Shares which are
subject to such option, the date of grant of such option, the extent to which
such option is vested (or will become vested as a result of the Merger), the
option price of such option (to the extent determined as of the date hereof),
whether such option is a nonqualified stock option or is intended to qualify
as an incentive stock option within the meaning of Section 422(b) of the
Code, and the expiration date of such option. Section 2.11(c) of the NBHC
Disclosure Schedule also sets forth the total number of such incentive stock
options and such nonqualified options. NBHC has furnished JCG with complete
copies of the plans pursuant to which the NBHC Stock Options were issued.
Other than the automatic vesting of NBHC Stock Options that may occur without
any action on the part of NBHC or its officers or directors, NBHC has not
taken any action that would result in any NBHC Stock Options that are
unvested becoming vested in connection with or as a result of the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(d) There shall be no payment, accrual of additional benefits,
acceleration of payments, or vesting in any benefit under any NBHC Employee
Plan or any agreement or arrangement disclosed under this Section 2.11 solely
by reason of entering into or in connection with the transactions
contemplated by this Agreement.
(e) There are no controversies pending or, to the knowledge of NBHC,
threatened, between NBHC and any of their employees, which controversies have
or could reasonably be expected to have a Material Adverse Effect on NBHC.
Neither NBHC nor any of its subsidiaries is a party to any collective
bargaining agreement or other labor union contract applicable to persons
employed by NBHC or any of its subsidiaries (and neither NBHC nor any of its
subsidiaries has any outstanding material liability with respect to any
terminated collective bargaining agreement or labor union contract), nor does
NBHC know of any activities or proceedings of any labor union to organize any
of its or employees. NBHC has no knowledge of any strike, slowdown, work
stoppage, lockout or threat thereof, by or with respect to any of its
employees.
Section 2.12. Environmental Laws and Regulations.
(a) Except as publicly disclosed by NBHC in the NBHC SEC Reports, (i)
NBHC is in material compliance with all applicable federal, state, local and
foreign laws and regulations relating to pollution or protection of human
health or the environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata)
(collectively, "Environmental Laws"), except for non-compliance that would
not have a Material Adverse Effect on NBHC, which compliance includes, but is
not limited to, the possession by NBHC of all material permits and other
governmental authorizations required under applicable Environmental Laws, and
compliance with the terms and conditions thereof; (ii) NBHC has not received
written notice of, or, to the knowledge of NBHC, is the subject of, any
action, cause of action, claim, investigation, demand or notice by any person
or entity alleging liability under or non-compliance with any Environmental
Law (an ``Environmental Claim") that could reasonably be expected to have a
Material Adverse Effect on NBHC; and (iii) to the knowledge of NBHC, there
are no circumstances that are reasonably likely to prevent or interfere with
such material compliance in the future.
(b) Except as publicly disclosed by NBHC, there are no Environmental
Claims which could reasonably be expected to have a Material Adverse Effect
on NBHC that are pending or, to the knowledge of NBHC, threatened against
NBHC or, to the knowledge of NBHC, against any person or entity whose
liability for any Environmental Claim NBHC has or may have retained or
assumed either contractually or by operation of law.
Section 2.13. Tax Matters.
(a) Except as set forth in Section 2.13 of the NBHC Disclosure Schedule:
(i) NBHC has filed or has had filed on its behalf in a timely manner (within
any applicable extension periods) with the appropriate Governmental Entity
all income and other material Tax Returns (as defined herein) with respect to
Taxes (as defined herein) of NBHC and all Tax Returns were in all material
respects true, complete and correct; (ii) all material Taxes with respect to
NBHC have been paid in full or have been provided for in accordance with GAAP
on NBHC's most recent balance sheet which is part of the NBHC SEC Documents.
(iii) there are no outstanding agreements or waivers extending the statutory
period of limitations applicable to any federal, state, local or foreign
income or other material Tax Returns required to be filed by or with respect
to NBHC; (iv) to the knowledge of NBHC none of the Tax Returns of or with
respect to NBHC is currently being audited or examined by any Governmental
Entity; and (v) no deficiency for any income or other material Taxes has been
assessed with respect to NBHC which has not been abated or paid in full.
(b) For purposes of this Agreement, (i) "Taxes" shall mean all taxes,
charges, fees, levies or other assessments, including, without limitation,
income, gross receipts, sales, use, ad valorem, goods and services, capital,
transfer, franchise, profits, license, withholding, payroll, employment,
employer health, excise, estimated, severance, stamp, occupation, property or
other taxes, customs duties, fees, assessments or charges of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts imposed by any taxing authority and (ii) "Tax Return"
shall mean any report, return, documents declaration or other information or
filing required to be supplied to any taxing authority or jurisdiction with
respect to Taxes.
Section 2.14. Title to Property. NBHC has good and defensible title to
all of its properties and assets, free and clear of all liens, charges and
encumbrances except liens for taxes not yet due and payable and such liens or
other imperfections of title, if any, as do not materially detract from the
value of or interfere with the present use of the property affected thereby
or which, individually or in the aggregate, would not have a Material Adverse
Effect on NBHC; and, to NBHC's knowledge, all leases pursuant to which NBHC
leases from others real or personal property are in good standing, valid and
effective in accordance with their respective terms, and there is not, to the
knowledge of NBHC, under any of such leases, any existing material default or
event of default (or event which with notice of lapse of time, or both, would
constitute a default and in respect of which NBHC has not taken adequate
steps to prevent such a default from occurring) except where the lack of such
good standing, validity and effectiveness, or the existence of such default
or event, would not have a Material Adverse Effect on NBHC.
Section 2.15. Intellectual Property.
(a) NBHC owns, or possesses adequate licenses or other valid rights to
use, all existing United States and foreign patents, trademarks, trade names,
service marks, copyrights, trade secrets and applications therefore that are
material to its business as currently conducted (the "NBHC Intellectual
Property Rights").
(b) The validity of the NBHC Intellectual Property Rights and the title
thereto of NBHC is not being questioned in any litigation to which NBHC is a
party.
(c) Except as set forth in Section 2.15(c) of the NBHC Disclosure
Schedule, the conduct of the business of NBHC as now conducted does not, to
NBHC's knowledge, infringe any valid patents, trademarks, trade names,
service marks or copyrights of others. The consummation of the transactions
completed hereby will not result in the loss or impairment of any NBHC
Intellectual Property Rights.
(d) NBHC has taken steps it believes appropriate to protect and maintain
its trade secrets as such, except in cases where NBHC has elected to rely on
patent or copyright protection in lieu of trade secret protection.
Section 2.16. Insurance. NBHC currently maintains general liability and
other business insurance.
Section 2.17. Vote Required. Approval of this Acquisition Agreement
and Plan of Merger by the Stockholders of NBHC is not required pursuant to
current Nevada law.
Section 2.18. Tax Treatment. Neither NBHC nor, to the knowledge of NBHC,
any of its affiliates has taken or agreed to take action that would prevent
the Merger from constituting a reorganization qualifying under the provisions
of Section 368(a) of the Code.
Section 2.19. Affiliates. Except for the directors and executive
officers of NBHC, each of whom is listed in Section 2.19 of the NBHC
Disclosure Schedule, there are no persons who, to the knowledge of NBHC, may
be deemed to be affiliates of NBHC under Rule 1-02(b) of Regulation S-X of
the SEC (the "NBHC Affiliates").
Section 2.20. Certain Business Practices. None of NBHC or any directors,
officers, agents or employees of NBHC has (i) used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties
or campaigns or violated any provision of the Foreign Corrupt Practices Act
of 1977, as amended (the "FCPA"), or (iii) made any other unlawful payment.
Section 2.21. Insider Interests. Except as set forth in Section 2.21 of
the NBHC Disclosure Schedule, neither any officer or director of NBHC has any
interest in any material property, real or personal, including without
limitation, any computer software or NBHC Intellectual Property Rights, used
in or pertaining to the business of NBHC, expect for the ordinary rights of a
stockholder or employee stock option holder.
Section 2.22. Opinion of Financial Adviser. No advisers, as of the date
hereof, have delivered to the NBHC Board a written opinion to the effect
that, as of such date, the exchange ratio contemplated by the Merger is fair
to the holders of NBHC Shares.
Section 2.23. Brokers. No broker, finder or investment banker (other
than the NBHC Financial Adviser, a true and correct copy of whose engagement
agreement has been provided to JCG) is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of NBHC.
Section 2.24. Disclosure. No representation or warranty of NBHC in this
Agreement or any certificate, schedule, document or other instrument
furnished or to be furnished to JCG pursuant hereto or in connection herewith
contains, as of the date of such representation, warranty or instrument, or
will contain any untrue statement of a material fact or, at the date thereof,
omits or will omit to state a material fact necessary to make any statement
herein or therein, in light of the circumstances under which such statement
is or will be made, not misleading.
Section 2.25. No Existing Discussions. As of the date hereof, NBHC is
not engaged, directly or indirectly, in any discussions or negotiations with
any other party with respect to any Third Party Acquisition (as defined in
Section 4.4).
ARTICLE 3
Representations and Warranties of JCG
Except as set forth on the Disclosure Schedule delivered by JCG to NBHC
(the "JCG Disclosure Schedule"), JCG hereby represents and warrants to NBHC
as follows:
Section 3.1. Organization and Qualification.
(a) Each of JCG and its subsidiaries is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation
or organization and has all requisite power and authority to own, lease and
operate its properties and to carry on its businesses as now being conducted,
except where the failure to be so organized, existing and in good standing or
to have such power and authority would not have a Material Adverse Effect (as
defined below) on JCG. When used in connection with JCG, the term "Material
Adverse Effect" means any change or effect (i) that is or is reasonably
likely to be materially adverse to the business, results of operations,
condition (financial or otherwise) or prospects of JCG and its subsidiaries,
taken as a whole, other than any change or effect arising out of general
economic conditions unrelated to any businesses in which JCG and its
subsidiaries are engaged, or (ii) that may impair the ability of JCG to
consummate the transactions contemplated hereby.
(b) JCG has heretofore delivered to NBHC accurate and complete copies of
the Articles of Incorporation and Bylaws (or similar governing documents), as
currently in effect, of JCG. Each of JCG and its subsidiaries is duly
qualified or licensed and in good standing to do business in each
jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification or licensing
necessary except in such jurisdictions where the failure to be so duly
qualified or licensed and in good standing would not have a Material Adverse
Effect on JCG.
Section 3.2. Capitalization of JCG.
(a) As of March 19, 2004, the authorized capital stock of JCG consists
of Sixty Million (60,000,000) JCG common Shares, $0.001 par value, of which
360,000 common Shares are issued and outstanding. All of the outstanding JCG
Shares have been duly authorized and validly issued, and are fully paid,
nonassessable and free of preemptive rights.
(b) Except as set forth in Section 3.2(b) of the JCG Disclosure
Schedule, J. Xxxx Xxxxxx is the record and beneficial owner of all of the
issued and outstanding shares of capital stock of its subsidiaries.
(c) Except as set forth in Section 3.2(c) of the JCG Disclosure
Schedule, between December 31, 2003 and the date hereof, no shares of JCG's
capital stock have been issued and no JCG Stock options have been granted.
Except as set forth in Section 3.2(a) above, as of the date hereof, there are
no outstanding (i) shares of capital stock or other voting securities of JCG,
(ii) securities of JCG or its subsidiaries convertible into or exchangeable
for shares of capital stock or voting securities of JCG, (iii) options or
other rights to acquire from JCG or its subsidiaries, or obligations of JCG
or its subsidiaries to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of JCG, or (iv) equity equivalents, interests in the ownership or
earnings of JCG or its subsidiaries or other similar rights (collectively,
"JCG Securities"). As of the date hereof, there are no outstanding
obligations of JCG or any of its subsidiaries to repurchase, redeem or
otherwise acquire any JCG Securities. There are no stockholder agreements,
voting trusts or other agreements or understandings to which JCG is a party
or by which it is bound relating to the voting or registration of any shares
of capital stock of JCG.
(d) Except as set forth in Section 3.2(d) of the JCG Disclosure
Schedule, there are no securities of JCG convertible into or exchangeable
for, no options or other rights to acquire from JCG, and no other contract,
understanding, arrangement or obligation (whether or not contingent)
providing for the issuance or sale, directly or indirectly, of any capital
stock or other ownership interests in, or any other securities of, any
subsidiary of JCG.
(e) The JCG Shares constitute the only class of equity securities of JCG
or its subsidiaries.
(f) Except as set forth in Section 3.2(f) of the JCG Disclosure
Schedule, JCG does not own directly or indirectly any outstanding voting
securities or interests (including membership interests) of any entity.
Section 3.3. Authority Relative to this Agreement; Recommendation.
(a) JCG has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
the Board of Directors of JCG (the "JCG Board"), and no other corporate
proceedings on the part of JCG are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby, except, as referred to in
Section 3.17, the approval and adoption of this Agreement by the holders of
at least a majority of the then outstanding JCG Shares. This Agreement has
been duly and validly executed and delivered by JCG and constitutes a valid,
legal and binding agreement of JCG, enforceable against JCG in accordance
with its terms.
(b) The JCG Board has resolved to recommend that the sole stockholder of
JCG approved and adopted this Agreement.
Section 3.4. SEC Reports; Financial Statements.
(a) JCG has filed all required forms, reports and documents with the
Securities and Exchange Commission (the "SEC") since July 16, 2003, each
of which has complied in all material respects with all applicable
requirements of the Securities Act of 1933, as amended (the "Securities
Act"), and the Exchange Act (and the rules and regulations promulgated
thereunder, respectively), each as in effect on the dates such forms, reports
and documents were filed. JCG has heretofore delivered or promptly will
deliver prior to the Effective Date to JCG, in the form filed with the SEC
(including any amendments thereto but excluding any exhibits), (i) its
initial Registration Statement on Form 10SB12G filed July 16, 2003, (ii)
its Form 10-KSB filed on Xxxxx 00, 0000, (xxx) all other reports or
registration statements filed by JCG with the SEC since July 16, 2003 (all of
the foregoing, collectively, the "JCG SEC Reports"). None of such JCG SEC
Reports, including, without limitation, any financial statements or schedules
included or incorporated by reference therein, contained, when filed, any
untrue statement of a material fact or omitted to state a material fact
required to be stated or incorporated by reference therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The audited financial statements of JCG
included in the JCG SEC Reports fairly present, in conformity with generally
accepted accounting principles applied on a consistent basis (except as may
be indicated in the notes thereto), the financial position of JCG as of the
dates thereof and its results of operations and changes in financial position
for the periods then ended. All material agreements, contracts and other
documents required to be filed as exhibits to any of the JCG SEC Reports have
been so filed.
(b) JCG has heretofore made available or promptly will make available to
NBHC a complete and correct copy of any amendments or modifications which are
required to be filed with the SEC but have not yet been filed with the SEC,
to agreements, documents or other instruments which previously had been filed
by JCG with the SEC pursuant to the Exchange Act.
Section 3.5. Information Supplied. None of the information supplied or
to be supplied by JCG for inclusion or incorporation by reference to the 8-K
will, at the time the 8-K is filed with the SEC and at the time it becomes
effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
Section 3.6. Consents and Approvals; No Violations. Except as set forth
in Section 3.6 of the JCG Disclosure Schedule, and for filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of, the Securities Act, the Exchange Act, state
securities or blue sky laws, the HSR Act, the rules of the NASD, and the
filing and recordation of the Merger Certificate as required by the NGCL, no
filing with or notice to, and no permit, authorization, consent or approval
of, any Governmental Entity is necessary for the execution and delivery by
JCG of this Agreement or the consummation by JCG of the transactions
contemplated hereby, except where the failure to obtain such permits,
authorizations consents or approvals or to make such filings or give such
notice would not have a Material Adverse Effect on JCG.
Neither the execution, delivery and performance of this Agreement by JCG
nor the consummation by JCG of the transactions contemplated hereby will (i)
conflict with or result in any breach of any provision of the respective
Articles of Incorporation or Bylaws (or similar governing documents) of JCG
or any of JCG's subsidiaries, (ii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, amendment, cancellation or
acceleration or Lien) under, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, lease, license, contract, agreement or
other instrument or obligation to which JCG or any of JCG's subsidiaries is a
party or by which any of them or any of their respective properties or assets
may be bound or (iii) violate any order, writ, injunction, decree, law,
statute, rule or regulation applicable to JCG or any of JCG's subsidiaries or
any of their respective properties or assets, except in the case of (ii) or
(iii) for violations, breaches or defaults which would not have a Material
Adverse Effect on JCG.
Section 3.7. No Default. JCG is not in breach, default or violation (and
no event has occurred which with notice or the lapse of time or both would
constitute a breach, default or violation) of any term, condition or
provision of (i) its Articles of Incorporation or Bylaws (or similar governing
documents), (ii) any note, bond, mortgage, indenture, lease, license,
contract, agreement or other instrument or obligation to which JCG or any of
its subsidiaries is now a party or by which any of them or any of their
respective properties or assets may be bound or (iii) any order, writ,
injunction, decree, law, statute, rule or regulation applicable to JCG, its
subsidiaries or any of their respective properties or assets, except in the
case of (ii) or (iii) for violations, breaches or
defaults that would not have a Material Adverse Effect on JCG. Each note,
bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which JCG or any of its subsidiaries is now a
party or by which any of them or any of their respective properties or assets
may be bound that is material to JCG and its subsidiaries taken as a whole
and that has not expired is in full force and effect and is not subject to
any material default thereunder of which JCG is aware by any party obligated
to JCG or any subsidiary thereunder.
Section 3.8. No Undisclosed Liabilities; Absence of Changes. Except as
set forth in Section 2.8 of the JCG Disclosure Schedule and except as and to
the extent publicly disclosed by JCG in the JCG SEC Reports, as of December
31, 2003, JCG does not have any liabilities or obligations of any nature,
whether or not accrued, contingent or otherwise, that would be required by
generally accepted accounting principles to be reflected on a balance sheet
of JCG (including the notes thereto) or which would have a Material Adverse
Effect on JCG. Except as publicly disclosed by JCG, since December 31, 2003,
JCG has not incurred any liabilities of any nature, whether or not accrued,
contingent or otherwise, which could reasonably be expected to have, and
there have been no events, changes or effects with respect to JCG having or
which reasonably could be expected to have, a Material Adverse Effect on JCG.
Except as and to the extent publicly disclosed by JCG in the JCG SEC Reports
and except as set forth in Section 2.8 of the JCG Disclosure Schedule, since
December 31, 1999, there has not been (i) any material change by JCG in its
accounting methods, principles or practices (other than as required after the
date hereof by concurrent changes in generally accepted accounting
principles), (ii) any revaluation by JCG of any of its assets having a
Material Adverse Effect on JCG, including, without limitation, any write-down
of the value of any assets other than in the ordinary course of business or
(iii) any other action or event that would have required the consent of any
other party hereto pursuant to Section 4.1 of this Agreement had such action
or event occurred after the date of this Agreement.
Section 3.9. Litigation. Except as publicly disclosed by JCG in the JCG
SEC Reports, there is no suit, claim, action, proceeding or investigation
pending or, to the knowledge of JCG, threatened against JCG or any of its
subsidiaries or any of their respective properties or assets before any
Governmental Entity which, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect on JCG or could reasonably be
expected to prevent or delay the consummation of the transactions
contemplated by this Agreement. Except as publicly disclosed by JCG in the
JCG SEC Reports, JCG is not subject to any outstanding order, writ,
injunction or decree which, insofar as can be reasonably foreseen in the
future, could reasonably be expected to have a Material Adverse Effect on JCG
or could reasonably be expected to prevent or delay the consummation of the
transactions contemplated hereby.
Section 3.10. Compliance with Applicable Law. Except as publicly
disclosed by JCG in the JCG SEC Reports, JCG holds all permits, licenses,
variances, exemptions, orders and approvals of all Governmental Entities
necessary for the lawful conduct of their respective businesses (the `'JCG
Permits"), except for failures to hold such permits, licenses, variances,
exemptions, orders and approvals which would not have a Material Adverse
Effect on JCG. Except as publicly disclosed by JCG in the JCG SEC Reports,
JCG is in compliance with the terms of the JCG Permits, except where the
failure so to comply would not have a Material Adverse Effect on JCG. Except
as publicly disclosed by JCG in the JCG SEC Reports, the business of JCG is
not being conducted in violation of any law, ordinance or regulation of any
Governmental Entity except that no representation or warranty is made in this
Section 2.10 with respect to Environmental Laws (as defined in Section 2.12
below) and except for violations or possible violations which do not, and,
insofar as reasonably can be foreseen, in the future will not, have a
Material Adverse Effect on JCG. Except as publicly disclosed by JCG in the
JCG SEC Reports, no investigation or review by any Governmental Entity with
respect to JCG is pending or, to the knowledge of JCG, threatened, nor, to
the knowledge of JCG, has any Governmental Entity indicated an intention to
conduct the same, ther than, in each case, those which JCG reasonably
believes will not have a Material Adverse Effect on JCG.
Section 3.11. Employee Benefit Plans; Labor Matters.
(a) With respect to each employee benefit plan, program, policy,
arrangement and contract (including, without limitation, any "employee
benefit plan," as defined in Section 3(3) of ERISA), maintained or
contributed to at any time by JCG, any of its subsidiaries or any entity
required to be aggregated with JCG or any of its subsidiaries pursuant to
Section 414 of the Code (each, a "JCG Employee Plan"), no event has occurred
and, to the knowledge of JCG, no condition or set of circumstances exists in
connection with which JCG or any of its subsidiaries could reasonably be
expected to be subject to any liability which would have a Material Adverse
Effect on JCG.
(b) (i) No JCG Employee Plan is or has been subject to Title IV of ERISA
or Section 412 of the Code; and (ii) each JCG Employee Plan intended to
qualify under Section 401(a) of the Code and each trust intended to qualify
under Section 501(a) of the Code is the subject of a favorable Internal
Revenue Service determination letter, and nothing has occurred which could
reasonably be expected to adversely affect such determination.
(c) Section 3.11(c) of the JCG Disclosure Schedule sets forth a true and
complete list, as of the date of this Agreement, of each person who holds any
JCG Stock Options, together with the number of JCG Shares which are subject
to such option, the date of grant of such option, the extent to which such
option is vested (or will become vested as a result of the Merger), the
option price of such option (to the extent determined as of the date hereof),
whether such option is a nonqualified stock option or is intended to qualify
as an incentive stock option within the meaning of Section 422(b) of the
Code, and the expiration date of such option. Section 3.11(c) of the JCG
Disclosure Schedule also sets forth the total number of such incentive stock
options and such nonqualified options. JCG has furnished NBHC with complete
copies of the plans pursuant to which the JCG Stock Options were issued.
Other than the automatic vesting of JCG Stock Options that may occur without
any action on the part of JCG or its officers or directors, JCG has not taken
any action that would result in any JCG Stock Options that are unvested
becoming vested in connection with or as a result of the execution and
delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(d) Except as disclosed in Section 3.11(e) of the JCG Disclosure
Schedule there shall be no payment, accrual of additional benefits,
acceleration of payments, or vesting in any benefit under any JCG Employee
Plan or any agreement or arrangement disclosed under this Section 3.11 solely
by reason of entering into or in connection with the transactions
contemplated by this Agreement.
(e) There are no controversies pending or, to the knowledge of JCG
threatened, between JCG or any of its subsidiaries and any of their
respective employees, which controversies have or could reasonably be
expected to have a Material Adverse Effect on JCG. Neither JCG nor any of its
subsidiaries is a party to any collective bargaining agreement or other labor
union contract applicable to persons employed by JCG or any of its
subsidiaries (and neither JCG nor any of its subsidiaries has any outstanding
material liability with respect to any terminated collective bargaining
agreement or labor union contract), nor does JCG know of any activities or
proceedings of any labor union to organize any of its or any of its
subsidiaries' employees. JCG has no knowledge of any strike, slowdown, work
stoppage, lockout or threat thereof by or with respect to any of its or any
of its subsidiaries' employees.
Section 3.12. Environmental Laws and Regulations.
(a) Except as disclosed by JCG, (i) each of JCG and its subsidiaries is
in material compliance with all Environmental Laws, except for non-compliance
that would not have a Material Adverse Effect on JCG, which compliance
includes, but is not limited to, the possession by JCG and its subsidiaries
of all material permits and other governmental authorizations required under
applicable Environmental Laws, and compliance with the terms and conditions
thereof;(ii) none of JCG or its subsidiaries has received written notice of,
or, to the knowledge of JCG, is the subject of, any Environmental Claim that
could reasonably be expected to have a Material Adverse Effect on JCG; and
(iii) to the knowledge of JCG, there are no circumstances that are reasonably
likely to prevent or interfere with such material compliance in the future.
(b) Except as disclosed by JCG, there are no Environmental Claims which
could reasonably be expected to have a Material Adverse Effect on JCG that
are pending or, to the knowledge of JCG, threatened against JCG or any of its
subsidiaries or, to the knowledge of JCG, against any person or entity whose
liability for any Environmental Claim JCG or its subsidiaries has or may have
retained or assumed either contractually or by operation of law.
Section 3.13. Tax Matters. Except as set forth in Section 3.13 of the
JCG Disclosure Schedule: (i) JCG and each of its subsidiaries has filed or
has had filed on its behalf in a timely manner (within any applicable
extension periods) with the appropriate Governmental Entity all income and
other material Tax Returns with respect to Taxes of JCG and each of its
subsidiaries and all Tax Returns were in all material respects true, complete
and correct; (ii) all material Taxes with respect to JCG and each of its
subsidiaries have been paid in full or have been provided for in accordance
with GAAP on JCG's most recent balance sheet which is part of the JCG SEC
Documents; (iii) there are no outstanding agreements or waivers extending the
statutory period of limitations applicable to any federal, state, local or
foreign income or other material Tax Returns required to be filed by or with
respect to JCG or its subsidiaries; (iv) to the knowledge of JCG none of the
Tax Returns of or with respect to JCG or any of its subsidiaries is currently
being audited or examined by any Governmental Entity; and (v) no deficiency
for any income or other material Taxes has been assessed with respect to JCG
or any of its subsidiaries which has not been abated or paid in full.
Section 3.14. Title to Property. JCG and each of its subsidiaries have
good and defensible title to all of their properties and assets, free and
clear of all liens, charges and encumbrances except liens for taxes not yet
due and payable and such liens or other imperfections of title, if any, as do
not materially detract from the value of or interfere with the present use of
the property affected thereby or which, individually or in the aggregate,
would not have a Material Adverse Effect on JCG; and, to JCG's knowledge, all
leases pursuant to which JCG or any of its subsidiaries lease from others
real or personal property are in good standing, valid and effective in
accordance with their respective terms, and there is not, to the knowledge of
JCG, under any of such leases, any existing material default or event of
default (or event which with notice or lapse of time, or both, would
constitute a material default and in respect of which JCG or such subsidiary
has not taken adequate steps to prevent such a default from occurring) except
where the lack of such good standing, validity and effectiveness, or the
existence of such default or event of default would not have a Material
Adverse Effect on JCG.
Section 3.15. Intellectual Property.
(a) Each of JCG and its subsidiaries owns, or possesses adequate
licenses or other valid rights to use, all existing United States and foreign
patents, trademarks, trade names, services marks, copyrights, trade secrets,
and applications therefore that are material to its business as currently
conducted (the "JCG Intellectual Property Rights").
(b) Except as set forth in Section 3.15(b) of the JCG Disclosure
Schedule the validity of the JCG Intellectual Property Rights and the title
thereto of JCG or any subsidiary, as the case may be, is not being questioned
in any litigation to which JCG or any subsidiary is a party.
(c) The conduct of the business of JCG as now conducted does not, to
JCG's knowledge, infringe any valid patents, trademarks, tradenames, service
marks or copyrights of others. The consummation of the transactions
contemplated hereby will not result in the loss or impairment of any JCG
Intellectual Property Rights.
(d) JCG has taken steps it believes appropriate to protect and maintain
its trade secrets as such, except in cases where JCG has elected to rely on
patent or copyright protection in lieu of trade secret protection.
Section 3.16. Insurance. JCG currently does not maintain general
liability and other business insurance.
Section 3.17. Vote Required. The affirmative vote of the holders of at
least a majority of the outstanding JCG Shares is the only vote of the
holders of any class or series of JCG's capital stock necessary to approve
and adopt this Agreement and the Merger.
Section 3.18. Tax Treatment. Neither JCG nor, to the knowledge of JCG,
any of its affiliates has taken or agreed to take any action that would
prevent the Merger from constituting a reorganization qualifying under the
provisions of Section 368(a) of the Code.
Section 3.19. Affiliates. Except for the directors and executive
officers of JCG, each of whom is listed in Section 3.19 of the JCG Disclosure
Schedule, there are no persons who, to the knowledge of JCG, may be deemed to
be affiliates of JCG under Rule 1-02(b) of Regulation S-X of the SEC (the
"JCG Affiliates").
Section 3.20. Certain Business Practices. None of JCG, any of its
subsidiaries or any directors, officers, agents or employees of JCG or any of
its subsidiaries has (i) used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity, (ii)
made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns or
violated any provision of the FCPA, or (iii) made any other unlawful payment.
Section 3.21. Insider Interests. Except as set forth in Section 3.21 of
the JCG Disclosure Schedule, no officer or director of JCG has any interest
in any material property, real or personal, including without limitation, any
computer software or JCG Intellectual Property Rights, used in or pertaining
to the business of JCG or any subsidiary, except for the ordinary rights of a
stockholder or employee stock optionholder.
Section 3.22. Opinion of Financial Adviser. No advisers, as of the date
hereof, have delivered to the JCG Board a written opinion to the effect that,
as of such date, the exchange ratio contemplated by the Merger is fair to the
holders of JCG Shares.
Section 3.23. Brokers. No broker, finder or investment banker (other
than the JCG Financial Adviser, a true and correct copy of whose engagement
agreement has been provided to NBHC) is entitled to any brokerage, finders or
other fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of JCG.
Section 3.24. Disclosure. No representation or warranty of JCG in this
Agreement or any certificate, schedule, document or other instrument
furnished or to be furnished to NBHC pursuant hereto or in connection
herewith contains, as of the date of such representation, warranty or
instrument, or will contain any untrue statement of a material fact or, at
the date thereof, omits or will omit to state a material fact necessary to
make any statement herein or therein, in light of the circumstances under
which such statement is or will be made, not misleading.
Section 3.25. No Existing Discussions. As of the date hereof, JCG is not
engaged, directly or indirectly, in any discussions or negotiations with any
other party with respect to any Third Party Acquisition (as defined in
Section 5.4).
ARTICLE 4
Covenants
Section 4.1. Conduct of Business of NBHC. Except as contemplated by this
Agreement or as described in Section 4.1 of the NBHC Disclosure Schedule,
during the period from the date hereof to the Effective Time, NBHC will
conduct its operations in the ordinary course of business consistent with
past practice and, to the extent consistent therewith, with no less diligence
and effort than would be applied in the absence of this Agreement, seek to
preserve intact its current business organization, keep available the service
of its current officers and employees and preserve its relationships with
customers, suppliers and others having business dealings with it to the end
that goodwill and ongoing businesses shall be unimpaired at the Effective
Time. Without limiting the generality of the foregoing, except as otherwise
expressly provided in this Agreement or as described in Section 4.1 of the
NBHC Disclosure Schedule, prior to the Effective Time, NBHC will not, without
the prior written consent of JCG:
(a) amend its Articles of Incorporation or Bylaws (or other similar
governing instrument);
(b) amend the terms of any stock of any class or any other securities
(except bank loans) or equity equivalents.
(c) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its capital
stock, make any other actual, constructive or deemed distribution in respect
of its capital stock or otherwise make any payments to stockholders in their
capacity as such, or redeem or otherwise acquire any of its securities;
(d) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of NBHC (other than the Merger);
(e) (i) incur or assume any long-term or short-term debt or issue any
debt securities except for borrowings or issuances of letters of credit under
existing lines of credit in the ordinary course of business; (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other person.
(iii) make any loans, advances or capital contributions to, or investments
in, any other person; (iv) pledge or otherwise encumber shares of capital
stock of NBHC; or (v) mortgage or pledge any of its material assets, or
create or suffer to exist any material Lien thereupon (other than tax Liens
for taxes not yet due);
(f) except as may be required by law, enter into, adopt or amend or
terminate any bonus, profit sharing, compensation, severance, termination,
stock option, stock appreciation right, restricted stock, performance unit,
stock equivalent, stock purchase agreement, pension, retirement, deferred
compensation, employment, severance or other employee benefit agreement,
trust, plan, fund or other arrangement for the benefit or welfare of any
director, officer or employee in any manner, or increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay
any benefit not required by any plan and arrangement as in effect as of the
date hereof (including, without limitation, the granting of stock
appreciation rights or performance units); provided, however, that this
paragraph (f) shall not prevent NBHC from (i) entering into employment
agreements or severance agreements with employees in the ordinary course of
business and consistent with past practice or (ii) increasing annual
compensation and/or providing for or amending bonus arrangements for
employees or fiscal 2000 in the ordinary course of year-end compensation
reviews consistent with past practice and paying bonuses to employees for
fiscal 2000 in amounts previously disclosed to JCG (to the extent that such
compensation increases and new or amended bonus arrangements do not result in
a material increase in benefits or compensation expense to NBHC);
(g) acquire, sell, lease or dispose of any assets in any single
transaction or series of related transactions (other than in the ordinary
course of business);
(h) except as may be required as a result of a change in law or in
generally accepted accounting principles, change any of the accounting
principles or practices used by it;
(i) revalue in any material respect any of its assets including, without
limitation, writing down the value of inventory or writing-off notes or
accounts receivable other than in the ordinary course of business;
(j) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization or
division thereof or any equity interest therein; (ii) enter into any contract
or greement other than in the ordinary course of business consistent with
past practice which would be material to NBHC; (iii) authorize any new
capital expenditure or expenditures which, individually is in excess of
$1,000 or, in the aggregate, are in excess of $5,000; provided, however that
none of the foregoing shall limit any capital expenditure required pursuant
to existing contracts;
(k) make any tax election or settle or compromise any income tax
liability material to NBHC;
(l) settle or compromise any pending or threatened suit, action or claim
which (i) relates to the transactions contemplated hereby or (ii) the
settlement or compromise of which could have a Material Adverse Effect on
NBHC;
(m) commence any material research and development project or terminate
any material research and development project that is currently ongoing, in
either case, except pursuant to the terms of existing contracts or in the
ordinary course of business; or
(n) take, or agree in writing or otherwise to take, any of the actions
described in Sections 4.1(a) through 4.1(m) or any action which would make
any of the representations or warranties of contained in this Agreement
untrue or incorrect.
Section 4.2. Conduct of Business of JCG. Except as contemplated by this
Agreement or as described in Section 4.2 of the JCG Disclosure Schedule
during the period from the date hereof to the Effective Time, JCG will
conduct its operations in the ordinary course of business consistent with
past practice and, to the extent consistent therewith, with no less diligence
and effort than would be applied in the absence of this Agreement, seek to
preserve intact its current business organization, keep available the service
of its current officers and employees and preserve its relationships with
customers, suppliers and others having business dealings with it to the end
that goodwill and ongoing businesses shall be unimpaired at the Effective
Time. Without limiting the generality of the foregoing, except as otherwise
expressly provided in this Agreement or as described in Section 4.2 of the
JCG Disclosure Schedule, prior to the Effective Time, JCG will not, without
the prior written consent of:
(a) amend its Articles of Incorporation or Bylaws (or other similar
governing instrument);
(b) authorize for issuance, issue, sell, deliver or agree or commit to
issue, sell or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any
stock of any class or any other securities (except bank loans) or equity
equivalents (including, without limitation, any stock options or stock
appreciation rights;
(c) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its capital
stock, make any other actual, constructive or deemed distribution in respect
of its capital stock or otherwise make any payments to stockholders in their
capacity as such, or redeem or otherwise acquire any of its securities;
(d) adopt a plan of complete or partial liquidation, dissolution, merger
consolidation, restructuring, recapitalization or other reorganization of JCG
(other than the Merger);
(e) (i) incur or assume any long-term or short-term debt or issue any
debt securities except for borrowings or issuances of letters of credit under
existing lines of credit in the ordinary course of business. (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other person;
(iii) make any loans, advances or capital contributions to or investments in,
any other person; (iv) pledge or otherwise encumber shares of capital stock
of JCG or its subsidiaries; or (v) mortgage or pledge any of its material
assets, or create or suffer to exist any material Lien thereupon (other than
tax Liens for taxes not yet due);
(f) except as may be required by law, enter into, adopt or amend or
terminate any bonus, profit sharing, compensation, severance, termination,
stock option, stock appreciation right, restricted stock, performance unit
stock equivalent, stock purchase agreement, pension, retirement, deferred
compensation, employment, severance or other employee benefit agreement,
trust, plan, fund or other arrangement for the benefit or welfare of any
director, officer or employee in any manner, or increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay
any benefit not required by any plan and arrangement as in effect as of the
date hereof (including, without limitation, the granting of stock
appreciation rights or performance units); provided, however, that this
paragraph (f) shall not prevent JCG or its subsidiaries from (i) entering
into employment agreements or severance agreements with employees in the
ordinary course of business and consistent with past practice or (ii)
increasing annual compensation and/or providing for or amending bonus
arrangements for employees for fiscal 2003 in the ordinary course of yearend
compensation reviews consistent with past practice and paying bonuses to
employees for fiscal 2003 in amounts previously disclosed to (to the extent
that such compensation increases and new or amended bonus arrangements do not
result in a material increase in benefits or compensation expense to JCG);
(g) acquire, sell, lease or dispose of any assets in any single
transaction or series of related transactions other than in the ordinary
course of business;
(h) except as may be required as a result of a change in law or in
generally accepted accounting principles, change any of the accounting
principles or practices used by it;
(i) revalue in any material respect any of its assets, including,
without limitation, writing down the value of inventory of writing-off notes
or accounts receivable other than in the ordinary course of business;
(j) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership, or other business organization or
division thereof or any equity interest therein; (ii) enter into any contract
or agreement other than in the ordinary course of business consistent with
past practice which would be material to JCG; (iii) authorize any new capital
expenditure or expenditures which, individually, is in excess of $1,000 or,
in the aggregate, are in excess of $5,000: provided, however that none of the
foregoing shall limit any capital expenditure required pursuant to existing
contracts;
(k) make any tax election or settle or compromise any income tax
liability material to JCG and its subsidiaries taken as a whole;
(l) settle or compromise any pending or threatened suit, action or claim
which (i) relates to the transactions contemplated hereby or (ii) the
settlement or compromise of which could have a Material Adverse Effect on
JCG;
(m) commence any material research and development project or terminate
any material research and development project that is currently ongoing, in
either case, except pursuant to the terms of existing contracts or except in
the ordinary course of business; or
(n) take, or agree in writing or otherwise to take, any of the actions
described in Sections 4.2(a) through 4.2(m) or any action which would make
any of the representations or warranties of the JCG contained in this
Agreement untrue or incorrect.
Section 4.3. Preparation of 8-K. JCG and NBHC shall promptly prepare
and file with the SEC an 8-K disclosing this merger with audited financials
of NBHC along with pro forma combined statements.
Section 4.4. Other Potential Acquirers.
(a) JCG, its affiliates and their respective officers, directors,
employees, representatives and agents shall immediately cease any existing
discussions or negotiations, if any, with any parties conducted heretofore
with respect to any Third Party Acquisition.
Section 4.5. NASD OTC:BB Listing. The parties shall use all reasonable
efforts to cause the NBHC Shares, subject to Rule 144, to be traded on the
Over-The-Counter Bulletin Board (OTC:BB).
Section 4.6. Access to Information.
(a) Between the date hereof and the Effective Time, NBHC will give JCG
and its authorized representatives, and JCG will give NBHC and its authorized
representatives, reasonable access to all employees, plants, offices,
warehouses and other facilities and to all books and records of itself and
its subsidiaries, will permit the other party to make such inspections as
such party may reasonably require and will cause its officers and those of
its subsidiaries to furnish the other party with such financial and operating
data and other information with respect to the business and properties of
itself and its subsidiaries as the other party may from time to time
reasonably request.
(b) Between the date hereof and the Effective Time, NBHC shall furnish
to JCG, and JCG will furnish to NBHC, within 25 business days after the end
of each quarter, quarterly statements prepared by such party in conformity
with its past practices) as of the last day of the period then ended.
(c) Each of the parties hereto will hold and will cause its consultants
and advisers to hold in confidence all documents and information furnished to
it in connection with the transactions contemplated by this Agreement.
Section 4.7. Additional Agreements, Reasonable Efforts. Subject to the
terms and conditions herein provided, each of the parties hereto agrees to
use all reasonable efforts to take, or cause to be taken, all action, and to
do, or cause to be done, all things reasonably necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including, without limitation,
(i) cooperating in the preparation and filing of the 8-K, any filings that
may be required under the HSR Act, and any amendments to any thereof; (ii)
obtaining consents of all third parties and Governmental Entities necessary,
proper or advisable for the consummation of the transactions contemplated by
this Agreement; (iii) contesting any legal proceeding relating to the Merger
and (iv) the execution of any additional instruments necessary to consummate
the transactions contemplated hereby. Subject to the terms and conditions of
this Agreement, JCG and NBHC agree to use all reasonable efforts to cause the
Effective Time to occur as soon as practicable after the stockholder votes
with respect to the Merger. In case at any time after the Effective Time any
further action is necessary to carry out the purposes of this Agreement, the
proper officers and directors of each party hereto shall take all such
necessary action.
Section 4.8. Indemnification.
(a) To the extent, if any, not provided by an existing right under one
of the parties' directors and officers liability insurance policies, from and
after the Effective Time, NBHC shall, to the fullest extent permitted by
applicable law, indemnify, defend and hold harmless each person who is now,
or has been at any time prior to the date hereof, or who becomes prior to the
Effective Time, a director, officer or employee of the parties hereto or any
subsidiary thereof (each an "Indemnified Party" and, collectively, the
"Indemnified Parties") against all losses, expenses (including reasonable
attorneys' fees and expenses), claims, damages or liabilities or, subject to
the proviso of the next succeeding sentence, amounts paid in settlement
arising out of actions or omissions occurring at or prior to the Effective
Time and whether asserted or claimed prior to, at or after the Effective
Time) that are in whole or in part (i) based on, or arising out of the fact
that such person is or was a director, officer or employee of such party or a
subsidiary of such party or (ii) based on, arising out of or pertaining to
the transactions contemplated by this Agreement. In the event of any such
loss expense, claim, damage or liability (whether or not arising before the
Effective Time), (i) NBHC shall pay the reasonable fees and expenses of
counsel selected by the Indemnified Parties, which counsel shall be
reasonably satisfactory to NBHC, promptly after statements therefore are
received and otherwise advance to such Indemnified Party upon request
reimbursement of documented expenses reasonably incurred, in either case to
the extent not prohibited by the NGCL or its Articles of Incorporation or
bylaws, (ii) NBHC will cooperate in the defense of any such matter and (iii)
any determination required to be made with respect to whether an Indemnified
Party's conduct complies with the standards set forth under the NGCL and
NBHC's Articles of Incorporation and bylaws shall be made by independent
counsel mutually acceptable to NBHC and the Indemnified Party; provided,
however, that NBHC shall not be liable for any settlement effected without
its written consent (which consent shall not be unreasonably withheld). The
Indemnified Parties as a group may retain only one law firm with respect to
each related matter except to the extent there is, in the opinion of counsel
to an Indemnified Party, under applicable standards of professional conduct,
conflict on any significant issue between positions of any two or more
Indemnified Parties.
(b) In the event NBHC or any of its successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity or such consolidation or merger
or (ii) transfers all or substantially all of its properties and assets to
any person, then and in either such case, proper provision shall be made so
that the successors and assigns of NBHC shall assume the obligations set
forth in this Section 4.9.
(c) To the fullest extent permitted by law, from and after the Effective
Time, all rights to indemnification now existing in favor of the employees,
agents, directors or officers of NBHC and JCG and their subsidiaries with
respect to their activities as such prior to the Effective Time, as provided
in NBHC's and JCG's Articles of Incorporation or bylaws, in effect on the
date thereof or otherwise in effect on the date hereof, shall survive the
Merger and shall continue in full force and effect for a period of not less
than two years from the Effective Time.
(d) The provisions of this Section 4.9 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party, his or her
heirs and his or her representatives.
Section 4.9. Notification of Certain Matters. The parties hereto shall
give prompt notice to the other parties, of (i) the occurrence or
nonoccurrence of any event the occurrence or nonoccurrence of which would be
likely to cause any representation or warranty contained in this Agreement to
be untrue or inaccurate in any material respect at or prior to the Effective
Time, (ii) any material failure of such party to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder, (iii) any notice of, or other communication relating to, a default
or event which, with notice or lapse of time or both, would become a default,
received by such party or any of its subsidiaries subsequent to the date of
this Agreement and prior to the Effective Time, under any contract or
agreement material to the financial condition, properties, businesses or
results of operations of such party and its subsidiaries taken as a whole to
which such party or any of its subsidiaries is a party or is subject, (iv)
any notice or other communication from any third party alleging that the
consent of such third party is or may be required in connection with the
transactions contemplated by this Agreement, or (v) any material adverse
change in their respective financial condition, properties, businesses,
results of operations or prospects taken as a whole, other than changes
resulting from general economic conditions; provided, however, that the
delivery of any notice pursuant to this Section 4.10 shall not cure such
breach or non-compliance or limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
ARTICLE 5
Conditions to Consummation of the Merger
Section 5.1. Conditions to Each Party's Obligations to Effect the
Merger. The respective obligations of each party hereto to effect the Merger
are subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) this Agreement shall have been approved and adopted by the requisite
vote of the stockholders of JCG;
(b) this Agreement shall have been approved and adopted by the Board of
Directors of NBHC and JCG;
(c) no statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or enforced by any
United States court or United States governmental authority which prohibits,
restrains, enjoins or restricts the consummation of the Merger;
(d) any waiting period applicable to the Merger under the HSR Act shall
have terminated or expired, and any other governmental or regulatory notices
or approvals required with respect to the transactions contemplated hereby
shall have been either filed or received; and
Section 5.2. Conditions to the Obligations of NBHC. The obligation of
NBHC to effect the Merger is subject to the satisfaction at or prior to the
Effective Time of the following conditions:
(a) the representations of JCG contained in this Agreement or in any
other document delivered pursuant hereto shall be true and correct (except to
the extent that the breach thereof would not have a Material Adverse Effect
on JCG) at and as of the Effective Time with the same effect as if made at
and as of the Effective Time (except to the extent such representations
specifically related to an earlier date, in which case such representations
shall be true and correct as of such earlier date), and at the Closing JCG
shall have delivered to NBHC a certificate to that effect;
(b) each of the covenants and obligations of JCG to be performed at or
before the Effective Time pursuant to the terms of this Agreement shall have
been duly performed in all material respects at or before the Effective Time
and at the Closing JCG shall have delivered to NBHC a certificate to that
effect;
(d) JCG shall have obtained the consent or approval of each person whose
consent or approval shall be required in order to permit the Merger as
relates to any obligation, right or interest of JCG under any loan or credit
agreement, note, mortgage, indenture, lease or other agreement or instrument,
except those for which failure to obtain such consents and approvals would
not, in the reasonable opinion of NBHC, individually or in the aggregate,
have a Material Adverse Effect on JCG;
(e) there shall have been no events, changes or effects with respect to
JCG or its subsidiaries having or which could reasonably be expected to have
a Material Adverse Effect on JCG; and
Section 5.3. Conditions to the Obligations of JCG. The respective
obligations of JCG to effect the Merger are subject to the satisfaction at or
prior to the Effective Time of the following conditions:
(a) the representations of NBHC contained in this Agreement or in any
other document delivered pursuant hereto shall be true and correct (except to
the extent that the breach thereof would not have a Material Adverse Effect
on NBHC) at and as of the Effective Time with the same effect as if made at
and as of the Effective Time (except to the extent such representations
specifically related to an earlier date, in which case such representations
shall be true and correct as of such earlier date), and at the Closing NBHC
shall have delivered to JCG a certificate to that effect;
(b) each of the covenants and obligations of NBHC to be performed at or
before the Effective Time pursuant to the terms of this Agreement shall have
been duly performed in all material respects at or before the Effective Time
and at the Closing NBHC shall have delivered to JCG a certificate to that
effect;
(c) there shall have been no events, changes or effects with respect to
NBHC having or which could reasonably be expected to have a Material Adverse
Effect on NBHC.
ARTICLE 6
Termination; Amendment; Waiver
Section 6.1. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, whether
before or after approval and adoption of this Agreement by NBHC's or JCG's
stockholders:
(a) by mutual written consent of NBHC and JCG;
(b) by JCG or NBHC if (i) any court of competent jurisdiction in the
United States or other United States Governmental Entity shall have issued a
final order, decree or ruling or taken any other final action restraining,
enjoining or otherwise prohibiting the Merger and such order, decree, ruling
or other action is or shall have become nonappealable or (ii) the Merger has
not been consummated by March 31, 2004; provided, however, that no party may
terminate this Agreement pursuant to this clause (ii) if such party's failure
to fulfill any of its obligations under this Agreement shall have been the
reason that the Effective Time shall not have occurred on or before said
date;
(c) by NBHC if (i) there shall have been a breach of any representation
or warranty on the part of JCG set forth in this Agreement, or if any
representation or warranty of JCG shall have become untrue, in either case
such that the conditions set forth in Section 5.2(a) would be incapable of
being satisfied by March 31, 2004 (or as otherwise extended), (ii) there shall
have been a breach by JCG of any of their respective covenants or agreements
hereunder having a Material Adverse Effect on JCG or materially adversely
affecting (or materially delaying) the consummation of the Merger, and JCG,
as the case may be, has not cured such breach within 20 business days after
notice by NBHC thereof, provided that NBHC has not breached any of its
obligations hereunder, (iii) NBHC shall have convened a meeting of its
stockholders to vote upon the Merger and shall have failed to obtain the
requisite vote of its stockholders; or (iv) NBHC shall have convened a
meeting of its Board of Directors to vote upon the Merger and shall have
failed to obtain the requisite vote;
(d) by JCG if (i) there shall have been a breach of any representation
or warranty on the part of NBHC set forth in this Agreement, or if any
representation or warranty of NBHC shall have become untrue, in either case
such that the conditions set forth in Section 5.3(a) would be incapable of
being satisfied by Mar. 31, 2004 (or as otherwise extended), (ii) there shall
have been a breach by NBHC of its covenants or agreements hereunder having a
Material Adverse Effect on NBHC or materially adversely affecting (or
materially delaying) the consummation of the Merger, and NBHC, as he case
may be, has not cured such breach within twenty business days after notice by
JCG thereof, provided that JCG has not breached any of its obligations
hereunder, (iii) the NBHC Board shall have recommended to NBHC's stockholders
a Superior Proposal, (iv) the NBHC Board shall have withdrawn, modified or
changed its approval or recommendation of this Agreement or the Merger, or
hold a stockholders' meeting to vote upon the Merger, or shall have adopted
any resolution to effect any of the foregoing, (v) JCG shall have convened a
meeting of its stockholders to vote upon the Merger and shall have failed to
obtain the requisite vote of its stockholders.
Section 6.2. Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 6.1, this Agreement shall
forthwith become void and have no effect, without any liability on the part
of any party hereto or its affiliates, directors, officers or stockholders,
other than the provisions of this Section 6.2 and Sections 4.7(c) and 6.3
hereof. Nothing contained in this Section 6.2 shall relieve any party from
liability for any breach of this Agreement.
Section 6.3. Fees and Expenses. Except as specifically provided in this
Section 6.3, each party shall bear its own expenses in connection with this
Agreement and the transactions contemplated hereby.
Section 6.4. Amendment. This Agreement may be amended by action taken by
NBHC and JCG at any time before or after approval of the Merger by the
stockholders of NBHC and JCG (if required by applicable law) but, after any
such approval, no amendment shall be made which requires the approval of such
stockholders under applicable law without such approval. This Agreement may
not be amended except by an instrument in writing signed on behalf of the
parties hereto.
Section 6.5. Extension; Waiver. At any time prior to the Effective Time,
each party hereto may (i) extend the time for the performance of any of the
obligations or other acts of any other party, (ii) waive any inaccuracies in
the representations and warranties of any other party contained herein or in
any document, certificate or writing delivered pursuant hereto or (iii) waive
compliance by any other party with any of the agreements or conditions
contained herein. Any agreement on the part of any 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. The failure of any party hereto to
assert any of its rights hereunder shall not constitute a waiver of such
rights.
ARTICLE 7
Miscellaneous
Section 7.1. Nonsurvival of Representations and Warranties. The
representations and warranties made herein shall not survive beyond the
Effective Time or a termination of this Agreement. This Section 7.1 shall not
limit any covenant or agreement of the parties hereto which by its terms
requires performance after the Effective Time.
Section 7.2. Entire Agreement; Assignment. This Agreement (a)
constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all other prior agreements and
understandings both written and oral, between the parties with respect to the
subject matter hereof and (b) shall not be assigned by operation of law or
otherwise.
Section 7.3. Validity. If any provision of this Agreement, or the
application thereof to any person or circumstance, is held invalid or
unenforceable, the remainder of this Agreement, and the application of such
provision to other persons or circumstances, shall not be affected thereby,
and to such end, the provisions of this Agreement are agreed to be severable.
Section 7.4. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by
facsimile or by registered or certified mail (postage prepaid, return receipt
requested), to each other party as follows:
If to JCG:
JCG, INC.
Attn: Xxxxxxx Xxxx Xxxxxx
0000 Xxx Xxxxx Xx.
Xxx Xxxxx, Xxxxxx 00000
Phone: (000) 000-0000
if to NBHC:
Neighborhood Connections, Inc.
Attn: Xxxx Xxxxxx
6802 San Remo
Xxxxxxx, Xxxxx 00000
Phone: (000) 000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
Section 7.5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada, without regard
to the principles of conflicts of law thereof.
Section 7.6. Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of
or to affect the meaning or interpretation of this Agreement.
Section 7.7. Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and its successors and
permitted assigns, and except as provided in Sections 4.9 and 4.11, nothing
in this Agreement, express or implied, is intended to or shall confer upon
any other person any rights, benefits or remedies of any nature whatsoever
under or by reason of this Agreement.
Section 7.8. Certain Definitions. For the purposes of this Agreement,
the term:
(a) "affiliate" means (except as otherwise provided in Sections 2.19 and
3.19 a person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with,
the first mentioned person;
(b) "business day" means any day other than a day on which Nasdaq is
closed;
(c) "capital stock" means common stock, preferred stock, partnership
interests, limited liability company interests or other ownership interests
entitling the holder thereof to vote with respect to matters involving the
issuer thereof;
(d) "knowledge" or "known" means, with respect to any matter in
question, if an executive officer of NBHC or JCG or its subsidiaries, as the
case may be, has actual knowledge of such matter;
(e) "person" means an individual, corporation, partnership, limited
liability company, association, trust, unincorporated organization or other
legal entity; and
(f) "subsidiary" or "subsidiaries" of NBHC, JCG or any other person,
means any corporation, partnership, limited liability company, association,
trust, unincorporated association or other legal entity of which NBHC, JCG or
any such other person, as the case may be (either alone or through or
together with any other subsidiary), owns, directly or indirectly, 50% or
more of the capital stock, the holders of which are generally entitled to
vote for the election of the board of directors or other governing body of
such corporation or other legal entity.
Section 7.9. Personal Liability. This Agreement shall not create or be
deemed to create or permit any personal liability or obligation on the part
of any direct or indirect stockholder of NBHC, JCG or any officer, director,
employee, agent, representative or investor of any party hereto.
Section 7.10. Specific Performance. The parties hereby acknowledge and
agree that the failure of any party to perform its agreements and covenants
hereunder, including its failure to take all actions as are necessary on its
part to the consummation of the Merger, will cause irreparable injury to the
other parties for which damages, even if available, will not be an adequate
remedy. Accordingly, each party hereby consents to the issuance of injunctive
relief by any court of competent jurisdiction to compel performance of such
party's obligations and to the granting by any court of the remedy of
specific performance of its obligations hereunder; provided, however, that,
if a party hereto is entitled to receive any payment or reimbursement of
expenses pursuant to Sections 6.3(a), (b) or (c), it shall not be entitled to
specific performance to compel the consummation of the Merger.
Section 7.11. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same agreement.
In Witness Whereof, each of the parties has caused this Agreement to be
duly executed on its behalf as of the day and year first above written.
NEIGHBORHOOD CONNECTIONS, INC.
By: /s/ Xxxx Xxxxxx
----------------------
Name: Xxxx Xxxxxx
Title: President
JCG, INC.
By: /s/ Xxxxxxx Xxxx Xxxxxx
---------------------------
Name: Xxxxxxx Xxxx Xxxxxx
Title: President
NBHC DISCLOSURE SCHEDULE
Schedule 2.1 Organization See Articles/Bylaws
Schedule 2.2(a) Options, Stock Preference Rights Not Applicable
Schedule 2.6 Consents & Approvals None Provided
Schedule 2.7 No Default Not Applicable
Schedule 2.8 No Undisclosed Liability None Exist
Schedule 2.9 Litigation Not Applicable
Schedule 2.10 Compliance with Applicable Law None
Schedule 2.11 Employee Benefit Plans None
Schedule 2.12 Environmental Laws and Regs Not Applicable
Schedule 2.13 Tax Matters None Exist
Schedule 2.14 Title to Property None Exist
Schedule 2.15 Intellectual Property None Exist
Schedule 2.16 Insurance None Exist
Schedule 2.17 Vote Required None Required
Schedule 2.18 Tax Treatment Not Applicable
Schedule 2.19 Affiliates Xxxx Xxxxxx
Schedule 2.20 Certain Business Practices None Exist
Schedule 2.21 Insider Interest Not Applicable
Schedule 2.22 Opinion of Financial Adviser Waived - None Exist
Schedule 2.23 Broker None Exist
Schedule 4.1 Conduct of Business None Provided
JCG DISCLOSURE SCHEDULE
Schedule 3.2(b) Subsidiary Stock None Exist
Schedule 3.2(c) Capital Stock Rights None Exist other than as
in Articles
Schedule 3.2(d) Securities conversions None Exist
Schedule 3.2 (f) Subsidiaries None Exist
Schedule 3.6 Consents & Approvals Provided
Schedule 3.7 No Default Not Applicable
Schedule 3.8 No Undisclosed Liability None Exist
Schedule 3.9 Litigation None Exist
Schedule 3.10 Compliance with Applicable Law Not Applicable - full
disclosed in 10-KSB
Schedule 3.11 Employee Benefit Plans Section 3.11( c)No Options
Exist
Section 3.11(e) No Agreements Exist
Schedule 3.12 Environmental Laws and Regs Not Applicable
Schedule 3.13 Tax Matters None Exist
Schedule 3.14 Title to Property None Exist
Schedule 3.15(b) Intellectual Property None Exist
Schedule 3.16 Insurance None Exist
Schedule 3.17 Vote Required See Shareholder Meeting
Certificate
Schedule 3.18 Tax Treatment Not Applicable
Schedule 3.19 Affiliates Xxxxxxx Xxxx Xxxxxx
Schedule 3.20 Certain Business Practices None Exist
Schedule 3.21 Insider Interest None Exist
Schedule 3.22 Opinion of Financial Adviser Waived - None Exist
Schedule 3.23 Broker None Exist
Schedule 4.2 Conduct of Business See Amended Articles
Exhibit A
CERTIFICATE OF MERGER
OF
NEIGHBORHOOD CONNECTIONS, INC.
a Nevada corporation
and
JCG, Inc.
a Nevada corporation
The undersigned corporations, NEIGHBORHOOD CONNECTIONS, INC., a Nevada
corporation ("NBHC"), and JCG, Inc. a Nevada corporation ("JCG"),
do hereby certify:
1. NBHC is a corporation duly organized and validly existing under the
laws of the State of Nevada. Articles of Incorporation were originally
filed on September 18, 2002.
2. JCG is a corporation duly organized and validly existing
under the laws of the State of Nevada. Articles of Incorporation were
originally filed on February 26, 2003.
3. NBHC and JCG are parties to a Merger Agreement, pursuant to which
JCG will be merged with and into NBHC. Upon completion of the merger NBHC
will be the surviving corporation in the merger and JCG will be dissolved.
Pursuant to the Merger Agreement the stockholders of JCG will receive stock
in NBHC. For purposes of service, the address for NBHC is Corporation
Service Company, 0000 Xxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxx 00000.
4. The Articles of Incorporation and Bylaws of NBHC as existing prior
to the effective date of the merger shall continue in full force as the
Articles of Incorporation and Bylaws of the surviving corporation.
5. The complete executed Agreement and Plan of Merger dated as of
March 19, 2004, which sets forth the plan of merger providing for the merger
of JCG with and into NBHC is on file at the corporate offices of NBHC.
6. A copy of the Merger Agreement will be furnished by NBHC on request
and without cost to any stockholder of any corporation which is a party to
the merger.
7. The plan of merger as set forth in the Agreement and Plan of
Merger, has been approved by a majority of the Board of Directors of JCG at a
meeting held March 18, 2004.
8. JCG has 360,000 shares of common stock issued, outstanding
and entitled to vote on the merger. At a meeting of the Shareholders of JCG
held March 18, 2004, all 360,000 shares voted in favor of the merger.
9. The plan of merger as set forth in the Agreement and Plan of
Merger, was approved by a majority of the Board of Directors of NBHC at a
meeting held March 18, 2004.
10. The manner in which the exchange of issued shares of NBHC shall be
affected is set forth in the Agreement and Plan of Merger.
IN WITNESS WHEREOF, the undersigned have executed these Certificate of
Merger this 19th day of March, 2004.
NEIGHBORHOOD CONNECTIONS, INC.
By: /s/ Xxxx Xxxxxx
----------------------
Name: Xxxx Xxxxxx
Title: President
JCG, INC.
By: /s/ Xxxxxxx Xxxx Xxxxxx
---------------------------
Name: Xxxxxxx Xxxx Xxxxxx
Title: President
Exhibit B
RESOLUTION IN LIEU OF STOCKHOLDERS MEETING
THE UNDERSIGNED, being the Stockholders of JCG, Inc., a Nevada Corporation,
in lieu of a Stockholders meeting, hereby consent to the following resolutions:
RESOLVED, that the Corporation enter into an Acquisition Agreement
and Plan of Merger with NEIGHBORHOOD CONNECTIONS, INC. (A copy of which
is attached) with NEIGHBORHOOD CONNECTIONS, INC. remaining as the
surviving corporation, and be it
FURTHER RESOLVED, that the Corporation officers are hereby
authorized to execute any and all documents necessary to accomplish
the merger.
DATED: March 19, 2004
/s/ Xxxxxxx Xxxx Xxxxxx
-----------------------
Xxxxxxx Xxxx Xxxxxx
