AGREEMENT AND PLAN OF MERGER
BY AND AMONG
JAGUAR INVESTMENTS, INC., A NEVADA CORPORATION,
AND
FREIGHT RATE, INC., A DELAWARE CORPORATION
MARCH 10, 2003
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER ("Agreement"), dated as of March 10, 2003, by
and among JAGUAR INVESTMENTS, INC., a Nevada corporation ("JGUR") and FREIGHT
RATE, INC. d/b/a Power2Ship, a Delaware corporation ("P2S"). The corporate
parties hereto are sometimes hereinafter referred to collectively as the
"Companies," or individually as a "Company".
WHEREAS, the respective Boards of Directors of the Companies deem it
advisable and in the best interests of their respective stockholders that P2S be
acquired by and become a wholly owned subsidiary of JGUR and, in furtherance
thereof, the Boards of Directors of the Companies have approved, as applicable,
the merger of a Delaware corporation, to be formed and to be a wholly owned
subsidiary of JGUR ("Acquisition Sub"), with and into P2S upon the terms and
subject to the conditions set forth herein; and
WHEREAS, for federal income tax purposes, it is intended that the merger
shall qualify as a reorganization within the meaning of Section 368 of the
Internal Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Subject to the terms and conditions of this Agreement,
at the Effective Time (as defined in Section 1.2 hereof), Acquisition Sub shall
-----------
be merged (the "Merger") with and into P2S, with P2S being the surviving
corporation in the Merger (the "Surviving Corporation") and the separate
existence of Acquisition Sub shall thereupon cease. The Merger shall have the
effects set forth in Section 252 of the Delaware General Law (the "DGL").
1.2 Effective Time of the Merger . The Merger shall become effective (the
"Effective Time") upon the completion of the filing of properly executed
Articles of Merger with the Secretary of State of the State of Delaware, which
filing shall be made upon satisfaction of the conditions set forth in Article
-------
VIII hereof.
------------
ARTICLE II
JGUR AND THE SURVIVING CORPORATION
2.1 Articles of Incorporation of the Surviving Corporation. The
Articles of Incorporation of P2S shall become the Articles of Incorporation of
the Surviving Corporation, except that such Articles of Incorporation shall be
amended and restated at the Effective Time to read in their entirety
substantially the same as the Articles of Incorporation of Acquisition Sub (with
the name of P2S being substituted for that of Acquisition Sub).
2.2 Bylaws of the Surviving Corporation. The Bylaws of P2S as in effect at
the Effective Time shall become the Bylaws of the Surviving Corporation until
thereafter amended in accordance with applicable law.
2.3 Directors and Officers of the Surviving Corporation. At the Effective
Time, all members of the JGUR and the Acquisition Sub Boards of Directors shall
resign. Prior to the resignations of the members of the JGUR and the Acquisition
Sub Boards of Directors, the respective Boards of Directors shall nominate the
individuals set forth on Exhibit 2.3 ("New Boards of Directors") to serve on the
JGUR and the Surviving Corporation's Boards of Directors in accordance with
JGUR's and Surviving Corporation's Articles of Incorporation and Bylaws or as
otherwise provided by law. The nominations of the New Boards of Directors shall
be effective upon the Effective Time. In addition, simultaneously upon the
Effective Time the officers of JGUR shall resign their office positions. A new
slate of officers shall be appointed by the New Boards of Directors.
ARTICLE III
CONVERSION OF SHARES
3.1 Conversion of P2S Equity and Derivative Securities. At the
Effective Time, the present holders of P2S equity and derivative securities, by
virtue of the Merger and without any action on the part of the holders thereof,
shall have the right to convert these securities into 30,100,000 JGUR equity and
derivative securities as follows:
(a) Exchange Ratios.
(1) Each P2S common and preferred share, option and warrant will
be exchanged for that number of JGUR common and preferred
shares, options and warrants equal to: [30,000,000 divided
by the sum of all issued and outstanding P2S common and
preferred shares, options and warrants as of the Effective
Time as set forth in Exhibit 3.1] (the "Exchange Ratio") as
shown in total in Exhibit 3.1.1. For example, if the sum of
all issued and outstanding P2S common and preferred shares,
options and warrants as of the Effective Time is 12.0
million then the Exchange Ratio would equal 2.50 (i.e., a
shareholder owning 10,000 P2S common shares would receive
25,000 JGUR common shares).
(2) In addition, each P2S common share and P2S Series C
preferred share will be exchanged for that number of JGUR
Series X Preferred Stock, $0.001 par value per share ("JGUR
Series X Preferred") equal to: [100,000 divided by the sum
of all P2S common shares and P2S Series C preferred shares
as of the Effective Time as set forth in Exhibit 3.1] (the
"Preferred Exchange Ratio") as shown in total in Exhibit
3.1.1. For example, if the sum of all issued and outstanding
P2S common and Series C preferred shares as of the Effective
Time is 4.0 million, then the Preferred Exchange Ratio would
equal 0.025 (i.e., a shareholder with 10,000 P2S common
shares would receive 250 shares of JGUR
Series X Preferred.
(3) Further, each share of P2S Series C preferred stock
converted at the Effective Time into the right to receive
approximately 2.7 JGUR Series Y preferred shares ("JGUR
Series Y Preferred") as shown in total in Exhibit 3.1. Each
share of JGUR Series Y Preferred will be entitled to 203
votes per share and will be convertible on a one for basis
into Common Shares.
3.2 Conversion of JGUR Series X Preferred Shares The JGUR Series X
Preferred Shares shall be convertible on a mandatory basis on the one year
anniversary of the Effective Time of the Merger (the "Conversion Date") into
that number of shares of JGUR Shares to be determined based on the amount of
equity securities sold prior to the Conversion Date except as described in
Exhibit 3.2(a). The amount of additional securities to be received is set forth
on Exhibit 3.2(b).
3.3 At the Effective Time, all P2S Shares, Preferred Shares, Options and
Warrants shall no longer be outstanding and shall automatically be cancelled and
retired and shall cease to exist. Each certificate or agreement previously
representing any such P2S Shares, Preferred Shares, Options or Warrants shall
thereafter represent JGUR Shares, Preferred Shares, Options or Warrants into
which such securities have been converted into or exchanged for.
3.4 If, prior to the Effective Time, JGUR should split or combine the JGUR
Shares, or pay a stock dividend or other stock distribution in, JGUR Shares,
then the P2S Exchange Ratio shall be appropriately adjusted to reflect such
split, combination, dividend, or other distribution.
3.5 Each P2S Share held in treasury and each such Share held by JGUR or any
subsidiary of JGUR immediately prior to the Effective Time shall be canceled and
retired and cease to exist, and no JGUR Shares shall be issued in exchange
therefor.
3.6 Exchange of Shares
(a) No later than the Effective Time, JGUR shall make available and
deliver, and each holder of P2S Shares shall be entitled to
receive, upon surrender to JGUR or such entity as it shall
designate of one or more certificates representing such P2S
Shares or Preferred Shares for cancellation, certificates
representing the number of JGUR Shares or Preferred Shares into
which such P2S securities are converted or exchanged in the
Merger. The JGUR Shares and Preferred Shares into which the P2S
securities shall be converted or exchanged in the Merger shall be
deemed to have been issued at the Effective Time.
(b) As soon as reasonably practicable after the Effective Time, JGUR
or such entity as it shall designate shall mail to each holder of
record of a certificate or certificates which immediately prior
to the Effective Time represented outstanding P2S Shares and P2S
Series C Preferred Shares (the "Certificates") whose P2S Shares
and Preferred Shares were converted into JGUR Shares and
Preferred Shares pursuant to Section 3.1, (i) a letter of
------------
transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only
upon delivery of the Certificates to JGUR or such entity as it
shall designate and shall be in such form and have such other
provisions as JGUR may reasonably specify) and (ii) instructions
for use in effecting the surrender of the Certificates in
exchange for certificates representing JGUR Shares and Preferred
Shares. Upon surrender of a Certificate for cancellation to JGUR
or such entity as it shall designate together with such letter of
transmittal, duly executed, the holder of such Certificate shall
be entitled to receive in exchange therefor a certificate
representing that number of whole JGUR Shares and Preferred
Shares which such holder has the right to receive in respect of
the Certificates surrendered pursuant to the provisions of this
Article III.
------------
3.7 Dividends; Transfer Taxes. No dividends that are declared on JGUR
Shares shall be paid to persons entitled to receive certificates representing
JGUR Shares until such persons surrender their certificates representing P2S
Shares. Upon such surrender, there shall be paid to the person in whose name
the certificates representing such JGUR Shares shall be issued any dividends
which shall have become payable with respect to such JGUR Shares between the
Effective Time and the time of such surrender. In no event shall the person
entitled to receive such dividends be entitled to receive interest on such
dividends. If any certificates for any JGUR Shares are to be issued in a name
other than that in which the certificate representing P2S Shares surrendered in
exchange therefor is registered, it shall be a condition of such exchange that
the person requesting such exchange shall pay to the Exchange Agent any transfer
or other taxes required by reason of the issuance of certificates for such JGUR
Shares in a name other than that of the registered holder of the certificate
surrendered, or shall establish to the satisfaction of the Exchange Agent that
such tax has been paid or is not applicable. Notwithstanding the foregoing,
neither the Exchange Agent nor any party hereto shall be liable to a holder of
Shares for any JGUR Shares or dividends thereon or, in accordance with Section
-------
3.4 hereof, the cash payment for fractional interests, delivered to a public
---
official pursuant to applicable escheat laws.
3.8 No Fractional Securities. No certificates or scrip representing
fractional JGUR Shares shall be issued upon the surrender for exchange of
certificates representing Shares pursuant to this Article III, except fractional
------------
shares of Series X Preferred Stock shall be issued, and no dividend,
stock split-up, or other change in the capital structure of JGUR shall relate to
any fractional security, and such fractional interests shall not entitle the
owner thereof to vote or to any rights of a security holder. In lieu of any such
fractional securities, each holder of Shares who would otherwise have been
entitled to a fraction of a JGUR Share upon surrender of stock certificates for
exchange pursuant to this Article III shall have his JGUR Shares rounded up to
-----------
the next highest share.
3.9 Closing of Transfer Books. At the Effective Time, the stock
transfer books of P2S shall be closed and no transfer of P2S Shares shall
thereafter be made. If, after the Effective Time, certificates representing P2S
Shares are presented to the Surviving Corporation, they shall be canceled and
exchanged for certificates representing JGUR Shares in accordance with the terms
hereof. At and after the Effective Time, the holders of P2S Shares to be
exchanged for JGUR Shares pursuant to this Agreement shall cease to have any
rights as shareholders of P2S except for the right to surrender such stock
certificates in exchange for JGUR Shares as provided hereunder.
3.10 Dissenting Shares. If holders of P2S Shares are entitled to dissent
from the Merger and demand appraisal of any such P2S Shares in accordance with
the provisions of the DGL concerning the right of such holders to dissent from
the Merger and demand appraisal of their shares ("Dissenting Holders"), any P2S
Shares held by a Dissenting Holder as to which appraisal has been so demanded
("Excluded P2S Shares") shall not be converted as described in Section 3.1, but
-----------
shall from and after the Effective Time represent only the right to receive such
consideration as may be determined to be due to such Dissenting Holder pursuant
to the DGL; provided, however, that each P2S Share held by a Dissenting Holder
-------- -------
who shall, after the Effective Time, withdraw his demand for appraisal or lose
his right of appraisal with respect to such P2S Shares, in either case pursuant
to the DGL, shall not be deemed Excluded P2S Shares but shall be deemed to be
converted, as of the Effective Time, into the right to receive JGUR Shares in
accordance with the P2S Exchange Ratio, as applicable.
3.11 Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Xxxxxx & Xxxx,
P.A., 000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx 0000, Xxxx Xxxxxxxxxx, Xxxxxxx 00000,
at 9 a.m., local time, on the first business day (the "Closing Date") after the
later of (a) the day on which the meeting of the stockholders of P2S approving
the Merger is held or the Required Stockholders' Consent is executed and
delivered to P2S in compliance with applicable law, or (b) the day on which all
of the conditions set forth in Article VIII hereof are satisfied or waived
------------
(other than those conditions which are to be satisfied at
Closing), or at such other date, time and place as the Companies shall agree.
3.12 Supplementary Action. If at any time after the Effective Time, any
further assignments or assurances in law or any other things are necessary or
desirable to vest or to perfect or confirm of record in the Surviving
Corporation the title to any property or rights of either JGUR or P2S, or
otherwise to carry out the provisions of this Agreement, the officers and
directors of the Surviving Corporation are hereby authorized and empowered on
behalf of each, in the name of and on behalf of them as appropriate, to execute
and deliver any and all things necessary or proper to vest or to perfect or
confirm title to such property or rights in the Surviving Corporation, and
otherwise to carry out the purposes and provisions of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF P2S
As used in this Agreement, (i) the term "Material Adverse Effect" means,
with respect to JGUR or P2S, as the case may be, a material adverse effect on
the business, assets, results of operations, or financial condition of such
party and its subsidiaries taken as a whole or in the ability of such party to
perform its obligations hereunder, and (ii) the word "subsidiary" when used with
respect to any party means any corporation or other organization, whether
incorporated or unincorporated, of which such party or any other subsidiary of
such party is a general partner (excluding partnerships the general partnership
interests of which held by such party or any subsidiary of such party do not
have a majority of the voting interests in such partnership) or of which at
least a majority of the securities or other interests having by their terms
ordinary voting power to elect a majority of the Board of Directors or others
performing similar functions with respect to such corporations or other
organizations is directly or indirectly owned or controlled by such party and/or
by any one or more of the subsidiaries.
P2S represents and warrants, with respect to P2S and its subsidiaries,
except as disclosed to JGUR in the P2S Schedule of Exceptions (the "P2S
Schedule"), attached hereto and incorporated herein by this reference, as
follows:
4.1 Organization. Each of P2S and its subsidiaries is a corporation or
limited liability company duly organized, validly existing, and in good standing
under the laws of its jurisdiction of incorporation and has the corporate or
other power to carry on its business as it is now being conducted or presently
proposed to be conducted. Each of P2S and its subsidiaries is duly qualified as
a foreign corporation or entity to do business, and is in good standing (to the
extent the concept of good standing exists), in each jurisdiction where the
character of its properties owned or held under lease or the nature of its
activities makes such qualification necessary, except where the failure to be so
qualified shall not have a Material Adverse Effect.
4.2 Capitalization. The authorized capital stock of P2S and each of its
subsidiaries is as set forth in Section 4.2 of the P2S Schedule. As of the date
hereof and as of the Effective Time, the number of Shares of P2S which are
issued and outstanding is as set forth in Section 4.2 of the P2S Schedule. All
of the issued and outstanding Shares of P2S are validly issued, fully paid, and
non-assessable and free of preemptive rights or similar rights created by
statute, the Articles of Incorporation or Bylaws of P2S or any agreement by
which P2S or any of its subsidiaries is a party or by which it is bound. Except
(a) as set forth above or, (b) as disclosed in Section 4.2 of the P2S Schedule,
there are not as of the date of this Agreement any shares of capital stock of
P2S issued or outstanding or any options, warrants, subscriptions, calls,
rights, convertible securities, or other agreements or commitments obligating
P2S to issue, transfer, or sell any shares of its capital stock. As of the date
hereof, no bonds, debentures, notes, or other indebtedness having the right to
vote (or convertible into or exercisable for securities having the right to
vote) on any matters on which shareholders of P2S may vote ("Voting Debt") were
issued and outstanding.
4.3 Authority Relative to this Agreement. P2S has the corporate power to
enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement by P2S and the consummation by P2S of
the transactions contemplated hereby have been duly authorized by its Board of
Directors, and, except for approval by the requisite votes cast by P2S's
shareholders at the meeting provided for herein or the Required Stockholders'
Consent, no other corporate proceedings on the part of P2S are necessary to
approve this Agreement or the transactions contemplated hereby.
4.4 Consents and Approvals; No Violations. Except for filing and
recordation of Articles of Merger under the DGL, no filing with, and no permit,
authorization, consent, or approval of, any public body or authority is
necessary for the consummation by P2S of the transactions contemplated by this
Agreement. Except as set forth in Section 4.4 of the P2S Schedule, neither the
execution and delivery of this Agreement by P2S, nor the consummation by it of
the transactions contemplated hereby, nor compliance by P2S with any of the
provisions hereof, shall (a) result in any breach of the Articles of
Incorporation or Bylaws of P2S, (b) 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, cancellation, or acceleration) under, any
of the terms, conditions, or provisions of any note, bond, mortgage, indenture,
license, contract, agreement, or other instrument or obligation to which P2S or
any of its subsidiaries is a party or by which any of them or any of their
properties or assets may be bound or (c) violate any order, writ, injunction,
decree, statute, rule, or regulation applicable to P2S, any of its subsidiaries
or any of their properties or assets, except in the case of clauses (b) and (c)
for violations, breaches, or defaults that would not have a Material Adverse
Effect.
4.5 Financial Statements. Except as set forth in Section 4.5 of the P2S
Schedule, the audited balance sheet dated May 31, 2001 and unaudited balance
sheets dated May 31, 2002 and November 30, 2002 (including in the case of the
audited balance sheet, the related notes) fairly presents in all material
respects the consolidated financial position of P2S and its subsidiaries as of
the respective dates thereof, and the other related statements (including in the
case of the audited balance sheet, the related notes) included therein fairly
present in all material respects the results of operations, changes in
stockholders' equity and cash flows of P2S and its subsidiaries for the
respective periods or as of the respective dates set forth therein, all in
conformity with generally accepted accounting principles consistently applied
during the periods involved, except as otherwise noted therein and subject, in
the case of the unaudited interim financial statements, to normal year-end
adjustments and any other adjustments described therein and the absence of any
notes thereto.
4.6 Absence of Certain Changes or Events; Undisclosed Liabilities.
(a) Since November 30, 2002, except as set forth in Section 4.6 of
the P2S Schedule, neither P2S nor any of its subsidiaries has:
(i) taken any of the actions set forth in Sections 6.1 hereof;
------------
(ii) incurred any liability material to P2S and its subsidiaries
on a consolidated basis, except in the ordinary course of its
business, consistent with past practices; (iii) suffered a
change, or any event involving a prospective change, in the
business, assets, financial condition, or results of operations
of P2S or any of its subsidiaries which has had, or is reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect, (other than as a result of changes or proposed
changes in federal or state regulations of general applicability
or interpretations thereof, changes in generally accepted
accounting principles, and changes that could, under the
circumstances, reasonably have been anticipated in light of
disclosures made in writing by P2S to JGUR pursuant hereto); or
(iv) subsequent to the date hereof, except as permitted by Section
-------
6.1 than in the ordinary course of business and consistent with
---
past practices.
(b) Neither P2S nor any of its subsidiaries has any liability (and
there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or
demand against any of them giving rising to any liability) except
for (i) liabilities set forth on the face of the November 30,
2002 balance sheet and (ii) liabilities which have risen after
the November 30, 2002 balance sheet in the ordinary course of
business (none of which is material or results from, arises out
of, relates to, is in the nature of, or was caused by any breach
of contract, tort, infringement, or violation of law).
4.7 Litigation. Except as set forth in Section 4.7 of the P2S Schedule,
as of the date of this Agreement, (i) there is no action, suit, judicial, or
administrative proceeding, arbitration or investigation pending or, to the best
knowledge of P2S, threatened against or involving P2S or any of its
subsidiaries, or any of their properties or rights, before any court,
arbitrator, or administrative or governmental body; (ii) there is no judgment,
decree, injunction, rule, or order of any court, governmental department,
commission, agency, instrumentality, or arbitrator outstanding against P2S or
any of its subsidiaries; and (iii) P2S and its subsidiaries are not in violation
of any term of any judgments, decrees, injunctions, or orders outstanding
against them. P2S has furnished to JGUR in writing, a copy of which is set
forth in Section 4.7 of the P2S Schedule, a description of all litigation,
actions, suits, proceedings, arbitrations, investigations known to it,
judgments, decrees, injunctions or orders pending; or to its best knowledge,
threatened against or involving P2S or any of its subsidiaries, or any of their
properties or rights as of the date hereof.
4.8 Contracts.
(a) Each of the material contracts, instruments, mortgages, notes,
security agreements, leases, agreements, or understandings,
whether written or oral, to which P2S or any of its subsidiaries
is a party that relates to or affects the assets or operations of
P2S or any of its subsidiaries or to which P2S or any of its
subsidiaries or their respective assets or operations may be
bound or subject is a valid and binding obligation of P2S and in
full force and effect (with respect to P2S or such subsidiary),
except for where the failure to be in full force and effect would
not, individually or in the aggregate, have a Material Adverse
Effect. Section 4.8(a) of the P2S Schedule sets forth a complete
list of all material contracts. For purposes of this Agreement a
material contract shall be any contract or agreement, which
involves consideration in excess of $25,000. Except to the extent
that the consummation of the transactions contemplated by this
Agreement may require the consent of third parties, as disclosed
in the P2S Schedule, there are no existing defaults by P2S or any
of its subsidiaries thereunder or, to the knowledge of P2S, by
any other party thereto, which defaults, individually or in the
aggregate, would have a Material Adverse Effect; and no event of
default has occurred, and no event, condition, or occurrence
exists, that (whether with or without notice, lapse of time, or
the happening or occurrence of any other event) would constitute
a default by P2S or any of its subsidiaries thereunder which
default would, individually or in the aggregate, have a Material
Adverse Effect.
(b) Except for this Agreement and those set forth on Section 4.8(b)
of the P2S Schedule, neither P2S nor any of its subsidiaries is a
party to any oral or written (i) consulting agreement not
terminable on 60 days' or less notice requiring the payment of
more than $25,000 per annum, in the case of any such agreement
with an individual; (ii) joint venture agreement; (iii)
noncompetition or similar agreements that restricts P2S or its
subsidiaries from engaging in a line of business; (iv) agreement
with any executive officer or other employee of P2S or any
subsidiary the benefits of which are contingent, or the terms of
which are materially altered, upon the occurrence of a
transaction involving P2S of the nature contemplated by this
Agreement and which provides for the payment of in excess of
$10,000; (v) agreement with respect to any executive officer of
P2S or any subsidiary providing any term of employment or
compensation guaranty in excess of $15,000 per annum; or (vi)
agreement or plan, including any stock option plan, stock
appreciation rights plan, restricted stock plan, or stock
purchase plan, any of the benefits of which shall be increased,
or the vesting of the benefits of which shall be accelerated, by
the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which shall be
calculated on the basis of any of the transactions contemplated
by this Agreement.
(c) Except as set forth in Section 4.8(c) of the P2S Schedule, all
employment, consulting, stock option or other similar agreements
of P2S and subsidiaries will be terminated at the Effective Time
and no obligations or liabilities of P2S or its subsidiaries will
exist thereunder or as the result of such termination or
otherwise.
4.9 Employee Benefit Plans.
(a) Disclosed in Section 4.9 of the P2S Schedule is a true and
complete list of each written employee benefit plan (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")) policy or agreement that is
maintained (all of the foregoing, the "Benefit Plans"), or is or
was contributed to by P2S or any trade or business, whether or
not incorporated (an "ERISA Affiliate"), which together with P2S
would be deemed a "single employer" within the meaning of Section
4001 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). A copy of each Benefit Plan as currently in
effect and, if applicable, the most recent Annual Report (Form
5500 Series), Actuarial Report or Valuation, Summary Plan
Description, Trust Agreement, and a Determination Letter issued
by the IRS for each Benefit Plan have heretofore been delivered
to JGUR. No Benefit Plan was or is subject to Title IV of ERISA
or Section 412 of the Code (including any "multiemployer plan,"
as defined in Section 3(37) of ERISA).
(b) Each of the Benefit Plans that are subject to ERISA is in
substantial compliance with ERISA; each of the Benefit Plans
intended to be "qualified" within the meaning of Section 401 (a)
of the Internal Revenue Code of 1986, as amended (the "Code") is
so qualified; and no event has occurred, and to P2S's knowledge,
there exists no condition or set of circumstances, in connection
with which P2S or any ERISA Affiliate is or could be subject to
liability (except liability for benefit claims and funding
obligations payable in the ordinary course) under ERISA, the
Code, or any other applicable law with respect to any Benefit
Plan.
4.10 Taxes. For the purposes of this section, the term "tax" shall
include all taxes, charges, withholdings, fees, levies, penalties, additions,
interest, or other assessments imposed by any United States federal, state, or
local authority or any other taxing authority on P2S or any of its Tax
Affiliates (as hereinafter defined) as to their respective income, profit,
franchise, gross receipts, payroll, sales, employment, worker's compensation,
use, property, withholding, excise, occupancy, environmental, and other taxes,
duties, or assessments of any nature, whatsoever. Except as set forth in
Section 4.10 of the P2S Schedule, P2S has filed or caused to be filed timely all
material federal, state, local, and foreign tax returns required to be filed by
each of its and any member of its consolidated, combined, unitary, or similar
group (each such member a "Tax Affiliate"). Such returns, reports, and other
information are accurate and complete in all material respects. P2S has paid or
caused to be paid or has made adequate provision or set up an adequate accrual
or reserve for the payment of, all taxes shown to be due in respect of the
periods for which returns are due, and has established (or shall establish at
least quarterly) an adequate accrual or reserve for the payment of all taxes
payable in respect of the period subsequent to the last of said periods required
to be so accrued or reserved. Neither P2S nor any of its Tax Affiliates has any
material liability for taxes in excess of the amount so paid or accruals or
reserves so established. Except as set forth in Section 4.10 of the P2S
Schedule, neither P2S nor any of its Tax Affiliates is delinquent in the payment
of any tax in excess of the amount reserved or provided therefor, and no
deficiencies for any tax, assessment, or governmental charge in excess of the
amount reserved or provided therefor have been threatened, claimed, proposed, or
assessed. No waiver or extension of time to assess any taxes has been given or
requested. The Internal Revenue Service or comparable state agencies have never
audited P2S's federal and state income tax returns.
4.11 Compliance With Applicable Law. P2S and each of its subsidiaries holds
all material licenses, franchises, permits, variances, exemptions, orders,
approvals, and authorizations necessary for the lawful conduct of its business
under and pursuant to, and the business of each of P2S and its subsidiaries is
not being conducted in violation of, any provision of any material federal,
state, local, or foreign statute, law, ordinance, rule, regulation, judgment,
decree, order, concession, grant, franchise, permit or license, or other
governmental authorization or approval applicable to P2S or any of its
subsidiaries.
4.12 Subsidiaries. Section 4.12 of the P2S Schedule lists all the
subsidiaries of P2S as of the date of this Agreement and indicates for each such
corporate or limited liability company subsidiary as of such date the
jurisdiction of incorporation or organization. All of the outstanding shares of
capital stock or other equity interests of each of the subsidiaries are (i) held
by P2S or one of such wholly-owned subsidiaries; (ii) fully paid and
non-assessable; and (iii) owned by P2S or one of such wholly owned subsidiaries
free and clear of any claim, lien, or encumbrance.
4.13 Intellectual Property.
(a) Except to the extent that the inaccuracy of any of the following
(or the circumstances giving rise to such inaccuracy) does not
have or could not reasonably be expected to have a Material
Adverse Effect:
(i) P2S and each of its subsidiaries owns, or is licensed or
otherwise has the legally enforceable right to use (in each
case, clear of any liens or encumbrances of any kind), all
Intellectual Property (as hereinafter defined) used in or
necessary for the conduct of its business as currently
conducted;
(ii) no claims are pending or, to the best knowledge of P2S,
threatened that P2S or any of its subsidiaries is infringing
on or otherwise violating the rights of any person with
regard to any Intellectual Property used by, owned by,
and/or licensed to P2S or any of its subsidiaries and, to
the best knowledge of P2S, there are no valid grounds for
any such claims;
(iii) except as set forth on Schedule 4.13(a)(iii) of the P2S
Schedule, to the best knowledge of P2S, no person is
infringing on or otherwise violating any right of P2S or any
of its subsidiaries with respect to any Intellectual
Property owned by and/or licensed to P2S or any of its
subsidiaries;
(iv) to the best knowledge of P2S, there are no valid grounds for
any claim challenging the ownership or validity of any
Intellectual Property owned by P2S or any of its
subsidiaries or challenging P2S's or any of its
subsidiaries' license or legally enforceable right to use
any Intellectual Property licensed by it; and
(v) to the best knowledge of P2S, all patents, registered
trademarks, service marks, and copyrights held by P2S and
each of its subsidiaries are valid and subsisting.
(b) For purposes of this Agreement, "Intellectual Property" means
trademarks (registered or unregistered), service marks, brand
names, certification marks, trade dress, assumed names, trade
names, and other indications of origin, the goodwill associated
with the foregoing and registrations in any jurisdiction of, and
applications in any jurisdiction to register, the foregoing,
including any extension, modification or renewal of any such
registration or application; inventions, discoveries and ideas,
whether patented, patentable, or not in any jurisdiction; trade
secrets and confidential information and rights in any
jurisdiction to limit the use or disclosure thereof by any
person; writings and other works of authorship, whether
copyrighted, copyrightable, or not in any jurisdiction;
registration or applications for registration of copyrights in
any jurisdiction, and any renewals or extensions thereof; any
similar intellectual property or proprietary rights and computer
programs and software (including source code, object code, and
data); licenses, immunities, covenants not to xxx, and the like
relating to the foregoing; and any claims or causes of action
arising out of or related to any infringement or misappropriation
of any of the foregoing.
Section 4.13(c) of the P2S Schedule sets forth a list of all domain names,
tradenames, copyrights and trademarks owned by P2S. P2S has full and complete
ownership of all domain names.
4.14 Disclosure of the Representations and Warranties. The
representations and warranties in this Section 4 do not knowingly contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements and information contained in this Section 4 in
light of the circumstances when made not misleading.
4.15 P2S Shareholders. Shareholders of P2S are either accredited investors
as such term is defined in the Securities Act of 1933 as amended or have such
knowledge and experience in financial and business matters that are capable of
evaluating the merits and risk of investment in JGUR. The number of accredited
investors and non-accredited, sophisticated investors are as set forth in
Section 4.15 of the P2S Schedule. To its knowledge the shares are being issued
to all P2S shareholders pursuant to an exemption under Section 4(2) and Rule 506
of the Securities Act of 1933.
4.16 Shareholder Approval. P2S has obtained the consent to this Agreement
and the transactions reflected hereby of a majority of the P2S Shareholders, who
are "accredited investors," and as listed on Schedule 4.16 has agreed to vote
their Shares in favor of the Merger, all as reflected in the agreement among P2S
and the P2S Shareholders included in the P2S Schedule.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF JGUR
JGUR represents and warrants, with respect to JGUR and its subsidiaries,
which as of the Effective Time shall include Acquisition Sub, except as
disclosed to P2S in the JGUR Schedule of Exceptions (the "JGUR Schedule"),
attached hereto and incorporated herein by this reference, as follows:
5.1 Organization. Each of JGUR and its subsidiaries is a corporation
duly organized, validly existing, and in good standing under the laws of its
jurisdiction of incorporation and has the corporate power to carry on its
business as it is now being conducted or presently proposed to be conducted.
Each of JGUR and its subsidiaries is duly qualified as a foreign corporation to
do business, and is in good standing (to the extent the concept of good standing
exists), in each jurisdiction where the character of its properties owned or
held under lease or the nature of its activities makes such qualification
necessary, except where the failure to be so qualified shall not have a Material
Adverse Effect.
5.2 Capitalization.
(a) As of the date hereof, the authorized capital stock of JGUR
consists of 100,000,000 shares of common stock and 1,000,000
shares of preferred stock. As of the date hereof, the number of
shares of JGUR common stock outstanding are 15,510,000. There are
no shares of preferred stock outstanding or designated.
Immediately prior to the Effective Time, there will be 12,860,000
shares of capital stock issued and outstanding. All of the issued
and outstanding shares of the capital stock of JGUR are validly
issued, fully paid, and non-assessable and free of preemptive
rights or similar rights created by statute, the Articles of
Incorporation or Bylaws of JGUR or any agreement by which JGUR or
any of its subsidiaries is a party or by which it is bound. There
are not, as of the date of this Agreement, any issued or
outstanding options, warrants, subscriptions, calls, rights,
convertible securities, or other agreements or commitments
obligating JGUR to issue, transfer, or sell any shares of its
capital stock.
(b) As of the date hereof, JGUR has no assets nor liabilities and all
previously outstanding promissory notes and other forms of
indebtedness issued by JGUR have been waived and forgiven by
their holders except for its equity interest in First Responder.
(c) As of the date hereof, JGUR has no cash or cash equivalents on
deposit with its banks or in accounts maintained with its
brokers.
5.3 Authority Relative to this Agreement. JGUR has the corporate power
to enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement by JGUR and the consummation by JGUR of
the transactions contemplated hereby have been duly authorized by its Board of
Directors, no other corporate proceedings on the part of JGUR are necessary to
approve this Agreement or the transactions contemplated hereby.
5.4 Consents and Approvals; No Violations. Except for applicable
requirements, the Securities Act of 1933 and the Securities Exchange Act of
1934, state law relating to takeovers, if applicable, state securities or blue
sky laws, and, as applicable, filing and recordation of Articles of Merger under
the DGL, no filing with, and no permit, authorization, consent, or approval of,
any public body or authority is necessary for the consummation by JGUR of the
transactions contemplated by this Agreement. Neither the execution and delivery
of this Agreement by JGUR, nor the consummation by it of the transactions
contemplated hereby, nor compliance by JGUR with any of the provisions hereof,
shall (a) result in any breach of the Articles of Incorporation or Bylaws of
JGUR, (b) 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, cancellation, or acceleration) under, any of the terms, conditions,
or provisions of any note, bond, mortgage, indenture, license, contract,
agreement, or other instrument or obligation to which JGUR or any of its
subsidiaries is a party or by which any of them or any of their properties or
assets may be bound or (c) violate any order, writ, injunction, decree, statute,
rule, or regulation applicable to JGUR, any of its subsidiaries or any of their
properties or assets, except in the case of clauses (b) and (c) for violations,
breaches, or defaults that would not have a Material Adverse Effect.
5.5 Financial Statements. The audited balance sheet dated December 31, 2001
and the unaudited balance sheet dated September 30, 2002 (including in the case
of the audited balance sheet, the related notes) fairly present in all material
respects the consolidated financial position of JGUR and its subsidiaries as of
the respective dates thereof, and the other related statements (including in the
case of the audited balance sheet, the related notes) included therein fairly
present in all material respects the results of operations, changes in
stockholders' equity and cash flows of JGUR and its subsidiaries for the
respective periods or as of the respective dates set forth therein, all in
conformity with generally accepted accounting principles consistently applied
during the periods involved, except as otherwise noted therein and subject, in
the case of the unaudited interim financial statements, to normal year-end
adjustments and any other adjustments described therein and the absence of any
notes thereto.
5.6 Absence of Certain Changes or Events; Undisclosed Liabilities.
(a) Except as set forth in Section 5.6 of the JGUR Schedule, since
September 30, 2002, neither JGUR nor any of its subsidiaries has:
(i) taken any of the actions set forth in Sections 6.2 hereof;
-------------
(ii) incurred any liability material to JGUR and its subsidiaries
on a consolidated basis, except in the ordinary course of its
business, consistent with past practices; (iii) suffered a
change, or any event involving a prospective change, in the
business, assets, financial condition, or results of operations
of JGUR or any of its subsidiaries which has had, or is
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect, (other than as a result of changes or
proposed changes in federal or state regulations of general
applicability or interpretations thereof, changes in generally
accepted accounting principles, and changes that could, under the
circumstances, reasonably have been anticipated in light of
disclosures made in writing by JGUR to JGUR pursuant hereto); or
(iv) subsequent to the date hereof, except as permitted by
Section 6.1 hereof, conducted its business and operations other
------------
than in the ordinary course of business and consistent with past
practices.
(b) Neither JGUR nor any of its subsidiaries has any liability (and
there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or
demand against any of them giving rising to any liability) except
for (i) liability set forth on the face of the September 30, 2002
balance sheet and (ii) at the Effective Time will have no
tangible or intangible liabilities or assets, except as mutually
agreed to by JGUR and P2S as set forth on Schedule 5.6(b).
5.7 Litigation. As of the date of this Agreement, (i) there is no
action, suit, judicial, or administrative proceeding, arbitration or
investigation pending or, to the best knowledge of JGUR, threatened against or
involving JGUR or any of its subsidiaries, or any of their properties or rights,
before any court, arbitrator, or administrative or governmental body; (ii) there
is no judgment, decree, injunction, rule, or order of any court, governmental
department, commission, agency, instrumentality, or arbitrator outstanding
against JGUR or any of its subsidiaries; and (iii) JGUR and its subsidiaries are
not in violation of any term of any judgments, decrees, injunctions, or orders
outstanding against them.
5.8 Taxes. For the purposes of this section, the term "tax" shall
include all taxes, charges, withholdings, fees, levies, penalties, additions,
interest, or other assessments imposed by any United States federal, state, or
local authority or any other taxing authority on JGUR or any of its Tax
Affiliates (as hereinafter defined) as to their respective income, profit,
franchise, gross receipts, payroll, sales, employment, worker's compensation,
use, property, withholding, excise, occupancy, environmental, and other taxes,
duties, or assessments of any nature, whatsoever. JGUR has filed or caused to
be filed timely all material federal, state, local, and foreign tax returns
required to be filed by each of its and any member of its consolidated,
combined, unitary, or similar group (each such member a "Tax Affiliate"). Such
returns, reports, and other information are accurate and complete in all
material respects. JGUR has paid or caused to be paid or has made adequate
provision or set up an adequate accrual or reserve for the payment of, all taxes
shown to be due in respect of the periods for which returns are due, and has
established (or shall establish at least quarterly) an adequate accrual or
reserve for the payment of all taxes payable in respect of the period subsequent
to the last of said periods required to be so accrued or reserved. Neither JGUR
nor any of its Tax Affiliates has any material liability for taxes in excess of
the amount so paid or accruals or reserves so established. Neither JGUR nor any
of its Tax Affiliates is delinquent in the payment of any tax in excess of the
amount reserved or provided therefor, and no deficiencies for any tax,
assessment, or governmental charge in excess of the amount reserved or provided
therefor have been threatened, claimed, proposed, or assessed. No waiver or
extension of time to assess any taxes has been given or requested. The Internal
Revenue Service or comparable state agencies have never audited JGUR's federal
and state income tax returns.
5.9 Compliance With Applicable Law. JGUR and each of its subsidiaries
holds all licenses, franchises, permits, variances, exemptions, orders,
approvals, and authorizations necessary for the lawful conduct of its business
under and pursuant to, and the business of each of JGUR and its subsidiaries is
not being conducted in violation of, any provision of any federal, state, local,
or foreign statute, law, ordinance, rule, regulation, judgment, decree, order,
concession, grant, franchise, permit or license, or other governmental
authorization or approval applicable to JGUR or any of its subsidiaries.
5.10 Reports and Financial Statements. JGUR has filed all reports
required to be filed by it with the SEC pursuant to the Exchange Act for the
past three years (collectively, the "JGUR SEC Reports"), and has previously
furnished or made available to P2S true and complete copies of all such JGUR SEC
Reports. None of such JGUR SEC Reports, as of their respective dates (as
amended or supplemented through the date hereof), contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each of the balance
sheets (including the related notes) included in the JGUR SEC Reports fairly
presents in all material respects the consolidated financial position of JGUR
and its subsidiaries as of the respective dates thereof, and the other related
statements (including the related notes) included therein fairly present in all
material respects the results of operations and cash flows of JGUR and its
subsidiaries for the respective periods or as of the respective dates set forth
therein, all in conformity with generally accepted accounting principles
consistently applied during the periods involved, except as otherwise noted
therein.
5.11 Absence of Certain Changes or Events. Except as disclosed in the JGUR
SEC Reports filed prior to the date of this Agreement, since September 30, 2002,
neither JGUR nor any of its subsidiaries has: (a) incurred any liability
material to JGUR and its subsidiaries on a consolidated basis, except in the
ordinary course of its business, consistent with past practices; (b) suffered a
change, or any event involving a prospective change, in the business, assets,
financial condition, or results of operations of JGUR or any of its subsidiaries
which has had, or is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect, (other than as a result of changes or
proposed changes in federal or state regulations of general applicability or
interpretations thereof, changes in generally accepted accounting principles,
and changes that could, under the circumstances, reasonably have been
anticipated in light of disclosures made in writing by JGUR to P2S pursuant
hereto).
5.12 OTCBB Listing. JGUR currently meets and as of the Effective Time, will
meet the requirements for continued listing of its shares of common stock on the
Over the Counter Bulletin Board.
5.13 Shareholder Approval. Acquisition Sub has obtained the consent to
this Agreement and the transactions reflected hereby of a majority of its
Shareholders.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
6.1 Conduct of P2S's Business Pending the Merger. P2S agrees on its own
behalf and on behalf of its subsidiaries that, during the period from the date
of this Agreement and continuing until the Effective Time:
(a) except as set forth in Schedule 6.1, the respective businesses of
P2S and its subsidiaries shall be conducted only in the ordinary
and usual course of business and consistent with past practices;
(b) P2S and its subsidiaries shall not (i) sell or pledge or agree to
sell or pledge any stock owned by it in any of its subsidiaries;
(ii) amend its Articles of Incorporation or Bylaws; or (iii)
split, combine, or reclassify any shares of its outstanding
capital stock or declare, set aside, or pay any dividend or other
distribution payable in cash, stock, or property in respect of
its capital stock, or directly or indirectly redeem, purchase, or
otherwise acquire any shares of its capital stock or other
securities or shares of the capital stock or other securities of
any of its subsidiaries;
(c) P2S and its subsidiaries shall not (i) authorize for issuance,
issue, sell, pledge, dispose of, encumber, deliver, or agree or
commit to issue, sell, pledge, or deliver any additional shares
(including any shares issuable upon exercise of warrants, stock
options or other contractual obligations) of, or rights of any
kind to acquire any shares of, its capital stock of any class or
exchangeable into shares of stock of any class or any Voting Debt
(whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase, or otherwise);
(ii) acquire, dispose of, transfer, lease, license, mortgage,
pledge, or encumber any fixed or other substantial assets other
than in the ordinary course of business and consistent with past
practices; (iii) incur, assume, or prepay any material
indebtedness, liability, or obligation or any other material
liabilities or issue any debt securities other than in the
ordinary course of business and consistent with past practices;
(iv) assume, guarantee, endorse, or otherwise become liable or
responsible (whether directly, contingently, or otherwise) for
the obligations any other person (other than a subsidiary) in a
material amount other than in the ordinary course of business and
consistent with past practices; (v) make any material loans,
advances, or capital contributions to, or investments in, any
other person, other than to subsidiaries, other than in the
ordinary course of business and consistent with past practices;
(vi) fail to maintain adequate insurance consistent with past
practices for their businesses and properties; or (vii) enter
into any contract, agreement, commitment, or arrangement with
respect to any of the foregoing;
(d) P2S shall preserve intact the business organization of P2S and
its subsidiaries, to keep available the services of its and their
present officers and key employees, and to preserve the goodwill
of those having business relationships with it and their
respective subsidiaries; provided, however, that no breach of
-------- --------
this covenant shall be deemed to have occurred if a failure to
comply with this Section 6.1(d) occurs as a result of any matter
-------------
arising out of the transactions contemplated by this Agreement;
(e) P2S and its subsidiaries shall not knowingly take or allow to be
taken or fail to take any action which act or omission would
jeopardize qualification of the Merger as a "reorganization"
within the meaning of Section 368 of the Code; and
(f) P2S and its subsidiaries shall use all reasonable efforts to
prevent any representation or warranty of P2S herein from
becoming untrue or incorrect in any material respect.
6.2 Conduct of JGUR's Business Pending the Merger. JGUR agrees on its
own behalf and on behalf of its subsidiaries that, during the period from the
date of this Agreement and continuing until the Effective Time:
(a) the respective businesses of JGUR and its subsidiaries shall be
conducted only in the ordinary and usual course of business and
consistent with past practices;
(b) JGUR and its subsidiaries shall not except as set forth on
Schedule 6.2(a), (i) sell or pledge or agree to sell or pledge
any stock owned by it in any of its subsidiaries; (ii) amend its
Articles of Incorporation or Bylaws; or (iii) split, combine, or
reclassify any shares of its outstanding capital stock or
declare, set aside, or pay any dividend or other distribution
payable in cash, stock, or property in respect of its capital
stock, or directly or indirectly redeem, purchase, or otherwise
acquire any shares of its capital stock or other securities or
shares of the capital stock or other securities of any of its
subsidiaries;
(c) JGUR and its subsidiaries shall not except as set forth on
Schedule 6.2(c), (i) authorize for issuance, issue, sell, pledge,
dispose of, encumber, deliver, or agree or commit to issue, sell,
pledge, or deliver any additional shares of, or rights of any
kind to acquire any shares of, its capital stock of any class or
exchangeable into shares of stock of any class or any Voting Debt
(whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase, or otherwise),
except that JGUR may issue Shares required to be issued upon
exercise of existing stock options, warrants, or similar plans,
or under other contractual commitments previously made, which
options, warrants, plans, or commitments have been disclosed in
writing to JGUR in the JGUR Schedule; (ii) acquire, dispose of,
transfer, lease, license, mortgage, pledge, or encumber any fixed
or other substantial assets other than in the ordinary course of
business and consistent with past practices; (iii) incur, assume,
or prepay any material indebtedness, liability, or obligation or
any other material liabilities or issue any debt securities other
than in the ordinary course of business and consistent with past
practices; (iv) assume, guarantee, endorse, or otherwise become
liable or responsible (whether directly, contingently, or
otherwise) for the obligations any other person (other than a
subsidiary) in a material amount other than in the ordinary
course of business and consistent with past practices; (v) make
any material loans, advances, or capital contributions to, or
investments in, any other person, other than to subsidiaries,
other than in the ordinary course of business and consistent with
past practices; (vi) fail to maintain adequate insurance
consistent with past practices for their businesses and
properties; or (vii) enter into any contract, agreement,
commitment, or arrangement with respect to any of the foregoing;
(d) JGUR shall preserve intact the business organization of JGUR and
its subsidiaries, to keep available the services of its and their
present officers and key employees, and to preserve the goodwill
of those having business relationships with it and their
respective subsidiaries; provided, however, that no breach of
-------- -------
this covenant shall be deemed to have occurred if a failure to
comply with this Section 6.2(d) occurs as a result of any matter
--------------
arising out of the transactions contemplated by this Agreement;
(e) JGUR and its subsidiaries shall not knowingly take or allow to be
taken or fail to take any action which act or omission would
jeopardize qualification of the Merger as a "reorganization"
within the meaning of Section 368 of the Code; and
(f) JGUR and its subsidiaries shall use all reasonable efforts to
prevent any representation or warranty of JGUR herein from
becoming untrue or incorrect in any material respect.
6.3 Current Information. From the date of this Agreement to the
Effective Time, P2S shall cause one or more of its designated representatives to
confer on a regular and frequent basis with representatives of JGUR and to
report the general status of its ongoing operations and to deliver to JGUR
monthly unaudited consolidated balance sheets and related consolidated
statements of income for the period since the last such report. P2S shall
promptly notify the others of any material change in the normal course of
business or in its or its subsidiaries' properties.
6.4 Legal Conditions to Merger. Each of JGUR and P2S shall, and shall cause
their subsidiaries to, use all reasonable efforts (a) to take, or cause to be
taken, all actions necessary to comply promptly with all legal requirements
which may be imposed on such party or its subsidiaries with respect to the
Merger and to consummate the transactions contemplated by this Agreement,
subject to the appropriate vote or consent of shareholders, and (b) to obtain
(and to cooperate with the other party to obtain) any consent, authorization,
order or approval of, or any exemption by, any governmental entity and/or any
other public or private third party which is required to be obtained or made by
such party or any of its subsidiaries in connection with the Merger and the
transactions contemplated by this Agreement; provided, however, that a party
-------- -------
shall not be obligated to take any action pursuant to the
foregoing if the taking of such action or such compliance or the obtaining of
such consent, authorization, order, approval, or exemption would, in such
party's reasonable opinion, (i) be materially burdensome to such party and its
subsidiaries taken as a whole or impact in such a materially adverse manner the
economic or business benefit of the transactions contemplated by this Agreement
as to render inadvisable the consummation of the Merger, or (ii) result in the
imposition of a condition or restriction on such party or on the Surviving
Corporation of the type referred to in Section 8.1(c). Each of JGUR and P2S
-------------
shall promptly cooperate with and furnish information to the
other in connection with any such burden suffered by, or requirement imposed
upon, any of them or any of their subsidiaries in connection with the foregoing.
6.5 Advice of Changes; Government Filings. Each party shall confer on a
regular and frequent basis with the other, report on operational matters and
promptly advise the other orally and in writing of any change or event having,
or which, insofar as can reasonably be foreseen, could have, a Material Adverse
Effect on such party or which would cause or constitute a material breach of any
of the representations, warranties, or covenants of such party contained herein.
Each Company shall file all reports required by regulation to be filed by it
with the SEC between the date of this Agreement and the Effective Time and shall
deliver to the other party copies of all such reports promptly after the same
are filed. Except where prohibited by applicable statutes and regulations, each
party shall promptly provide the other (or its counsel) with copies of all other
filings made by such party with any state or federal government entity in
connection with this Agreement or the transactions contemplated hereby.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 Access and Information.
(a) P2S and JGUR shall afford to the other party and its financial
advisors, legal counsel, accountants, consultants, and other
representatives access during normal business hours throughout
the period from the date hereof to thirty days subsequent to the
date hereof to all of its books, records, properties, facilities,
personnel commitments, and records (including but not limited to
Tax Returns) and, during such period, each shall furnish promptly
all information concerning its business, properties, and
personnel as such other party may reasonably request in order for
such other party to fully investigate the business and affairs of
P2S or JGUR, as applicable prior to the Effective Time (the
"Inspection").
(b) All information furnished by a party pursuant hereto shall be
treated as the sole property of the furnishing party until
consummation of the Merger contemplated hereby.
7.2 Public Announcements. So long as this Agreement is in effect, each
Company agrees that it shall obtain the approval of the other party prior to
issuing any press release and shall use its best efforts to consult with the
others before otherwise making any public statement or responding to any press
inquiry with respect to this Agreement or the transactions contemplated hereby,
except as may be required by law or any governmental agency if required by such
agency or the rules of the Nasdaq Stock Market.
7.3 Expenses. Subject to Section 9.2 hereof, whether or not the Merger is
-----------
consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby and thereby shall be paid by
the party incurring such expenses.
7.4 Additional Covenants .
(a) Subject to the terms and conditions herein provided, including
without limitation those set forth in the proviso to Section 6.4
-----------
hereof, 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 necessary, proper, or advisable
under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement,
including using all reasonable efforts to obtain all necessary
waivers, consents, and approvals, and to effect all necessary
registrations and filings. In case at any time after the
Effective Time any further action is necessary or desirable to
carry out the purposes of this Agreement, the proper officers
and/or directors of the Companies shall take all such necessary
action.
(b) Subject to the terms and conditions herein provided, including
without limitation those set forth in the proviso to Section 6.4
-----------
hereof, each Company shall cooperate with the others and use all
reasonable efforts to prepare all necessary documentation to
effect promptly all necessary filings and to obtain all necessary
permits, consents, approvals, orders, and authorizations of or
any exemptions by, all third parties and governmental bodies
necessary to consummate the transactions contemplated by this
Agreement.
7.5 Registration Requirement. After the Effective Time, JGUR shall file
with the Securities and Exchange Commission, a registration statement on Form
SB-2 (the "Form SB-2") when it has capital which places JGUR at least 3 months
ahead of the Funding Timetable. The Form SB-2 shall seek to register 5,000,000
shares of JGUR Common Stock listed on Schedule 7.5, one-half of which are held
by shareholders of JGUR prior to the Effective Time and one-half of which are
held by JGUR shareholders who were P2S shareholders prior to the Effective Time.
If at any time prior to the Form SB-2 being declared effective, JGUR's capital
declines to the point that it has less than $300,000 in funds, including
available lines of credit, then JGUR may seek to raise additional capital in a
form that does not require the Form SB-2 to be amended or integrate with the
existing Form SB-2. If JGUR's capital declines to less than $200,000 in funds,
including available lines of credit, then it may engage in any funding
transaction, irrespective of whether the Form SB-2 needs to be withdrawn or
amended.
7.6 Survival of Representations and Warranties. The respective
representations and warranties of JGUR and P2S contained in this Agreement shall
survive the Closing Date for a period of two years (the "Survival Period"), at
the end of which Survival Period no claim may be made with respect to any such
representation or warranty unless such claim shall have been asserted in writing
to the Indemnifying Party during such period.
7.7 Issuance of Securities. Following the Effective Time and for a period
of twelve months thereafter, JGUR shall not register any shares or options under
Form S-8 without the consent of Xxxx Xxxx or the member of the Board of
Directors designated by him.
7.8 No Reverse Stock Split. Following the Effective Time JGUR shall not
undertake a reverse split of its common stock for a period of twenty-four months
provided the Funding Timetable has been satisfied by the Conversion Date. This
provision may be waived in writing by Xxxx Xxxx or the member of the Board of
Directors designated by him.
7.9 Board Representation. At the Effective Time, JGUR shall appoint an
individual to its Board of Directors designated by Xxxx Xxxx who shall serve for
a period of one year or until such latter time as his successor is qualified and
elected.
ARTICLE VIII
CONDITIONS TO CONSUMMATION OF THE MERGER
8.1 Conditions to the Companies' Obligation to Effect the Merger. The
respective obligations of all Companies to effect the transactions contemplated
herein shall be subject to the satisfaction at or prior to the Effective Time of
the following conditions, any one of which may be waived by a writing signed by
JGUR and P2S:
(a) This Agreement and the transactions contemplated hereby shall
have been approved and adopted by the requisite vote of the
shareholders of P2S in accordance with applicable law or by a
written consent of stockholders of P2S holding a majority of the
shares of capital stock of P2S entitled to vote on the Merger
(the "Required Stockholders' Consent").
(b) No preliminary or permanent injunction or other order by any
federal, state, or foreign court of competent jurisdiction which
prohibits the consummation of any Merger shall have been issued
and remain in effect. No statute, rule, regulation, executive
order, stay, decree, or judgment shall have been enacted,
entered, issued, promulgated, or enforced by any court or
governmental authority which prohibits or restricts the
consummation of the Merger. Other than the filing of Articles of
Merger with the Department of State for the State of Florida, all
authorizations, consents, orders or approvals of, or declarations
or filings with, and all expirations of waiting periods imposed
by, any governmental entity (all of the foregoing, "Consents")
which are necessary for the consummation of the Merger, other
than Consents the failure to obtain which would have no material
adverse effect on the consummation of the Merger or on the
Surviving Corporation and its subsidiaries, taken as a whole,
shall have been filed, occurred, or been obtained (all such
permits, approvals, filings, and consents and the lapse of all
such waiting periods being referred to as the "Requisite
Regulatory Approvals") and all such Requisite Regulatory
Approvals shall be in full force and effect. All state securities
or blue sky permits and other authorizations necessary to issue
the JGUR Shares in exchange for the Shares of P2S and to
consummate the Merger shall have been received.
(c) There shall not be any action taken, or any statute, rule,
regulation, or order enacted, entered, enforced, or deemed
applicable to any Merger, by any federal or state governmental
entity which, in connection with the grant of a Requisite
Regulatory Approval, imposes any condition or restriction upon
any Surviving Corporation or its subsidiaries (or, in the ease of
any disposition of assets required in connection with such
Requisite Regulatory Approval, upon any Company or its
subsidiaries), including, without limitation, requirements
relating to the disposition of assets, which in any such case
would so materially adversely impact the economic or business
benefits of the transactions contemplated by this Agreement as to
render inadvisable the consummation of the Merger.
(d) The other Company shall have performed in all material respects
its obligations under this Agreement required to be performed by
it at or prior to the Effective Time and the representations and
warranties of the other Company contained in this Agreement shall
be true and correct in all material respects at and as of the
Effective Time as if made at and as of such time, except as
contemplated by this Agreement, and each Company shall have
received a certificate of the Chairman of the Board, the
President, or an Executive Vice President of the other Company as
to the satisfaction of this condition.
(e) Each Company shall have obtained the consent or approval of each
person whose consent or approval shall be required in connection
with the transactions contemplated hereby, under any loan or
credit agreement, note, mortgage, indenture, lease, license, or
other agreement or instrument, except those for which failure to
obtain such consents and approvals would not, individually or in
the aggregate, have a material adverse effect on the Surviving
Corporation and its subsidiaries taken as a whole or upon the
consummation of the transactions contemplated hereby.
8.2 Conditions to Obligations of JGUR. The obligations of JGUR to
carry out the transactions contemplated by this Agreement are subject, at the
option of JGUR, to the satisfaction, or waiver by JGUR, of the following
conditions:
(a) No proceeding which P2S shall be a debtor, defendant, or party
seeking an order for its own relief or reorganization shall have
been brought or be pending by or against such person under any
United States or state bankruptcy or insolvency law.
(b) P2S shall have delivered a certificate of an officer of P2S that
it shall have performed in all material respects its obligations
under this Agreement required to be performed by it at or prior
to the Effective Time and the representations and warranties of
P2S contained in this Agreement shall be true and correct in all
material respects at and as of the Effective Time as if made at
and as of such time, except as contemplated by this Agreement.
(c) JGUR shall have received evidence, satisfactory to it that
transactions contemplated by this Agreement, can be consummated
in accordance with an exemption from applicable state and federal
securities laws.
(d) P2S shall have provided JGUR written confirmation from its
long-term noteholders who own no less than ninety percent (90%)
of the value of P2S' total long-term promissory notes and accrued
interest thereon, indicating their commitment to convert their
notes upon consummation of the Merger into (i) common stock at a
conversion price of not less than $1.00 per share or (ii) new
notes having a specified minimum conversion price of not less
than $1.00 per share.
8.3 Conditions to Obligations of P2S. The obligations of P2S to carry
out the transactions contemplated by this Agreement are subject, at the option
of P2S, to the satisfaction, or waiver by P2S, of the following conditions:
(a) No proceeding which JGUR shall be a debtor, defendant, or party
seeking an order for its own relief or reorganization shall have
been brought or be pending by or against such person under any
United States or state bankruptcy or insolvency law.
(b) JGUR shall deliver (i) a certificate of good standing issued by
the Secretary of the State of Nevada and (ii) a corporate
resolution executed by the JGUR Board of Directors approving this
Agreement and the transactions herein.
(c) JGUR shall have arranged for certain individuals to pay all
expenses, including, but not limited to, accounting, legal and
SEC fees, incurred in preparing and filing JGUR's Form 10-KSB for
the fiscal year ended December 31, 2002.
(d) JGUR shall have delivered a certificate of an officer of JGUR
that (i) it shall have performed in all material respects its
obligations under this Agreement required to be performed by it
at or prior to the Effective Time and (ii) the representations
and warranties of JGUR contained in this Agreement shall be true
and correct in all material respects at and as of the Effective
Time as if made at and as of such time, except as contemplated by
this Agreement.
(e) P2S shall have received evidence, satisfactory to it that
transactions contemplated by this Agreement, can be consummated
in accordance with an exemption from applicable state and federal
securities laws.
(f) JGUR shall have delivered the resignations of the members of the
JGUR and the Acquisition Sub Boards of Directors, in a form
satisfactory to P2S.
(g) JGUR shall have delivered, satisfactory to P2S, evidence of
JGUR's rights to receive, for no financial or other
consideration, somewhere between 5.5% and 10.0% of First
Responder's common stock, subject to finalization of negotiations
between an officer of DAR Group, Inc. and First Responder.
(h) JGUR shall have received $125,000 in U.S. funds in exchange for a
convertible promissory note ("Note") which shall bear interest at
5% per annum. The Note shall have a term of thirteen (13) months
and accrue interest until the end of its term. The face amount of
the Note and all accrued interest thereon shall be convertible at
any time, at the holder's option, into restricted shares of JGUR
common stock at a conversion price of $.40 per share. The Note
shall be due in full at the end of its term but may be prepaid,
in part or in full, without penalty, at any time.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1 Termination. This Agreement may be terminated and the Merger
contemplated hereby abandoned at any time prior to the Effective Time, whether
before or after approval by the shareholders of P2S:
(a) By mutual written consent of all of the Companies.
(b) By either JGUR or P2S if the Merger shall not have been
consummated on or before _______, 2003, through no fault of the
terminating party.
(c) By JGUR or P2S if there shall have been any material breach of a
material obligation of the other hereunder and, if such breach is
curable, such default shall have not been remedied within 10
business days after receipt by the other Company, as the case may
be, of notice in writing from such Company specifying such breach
and requesting that it be remedied; provided that, at the sole
discretion of the non-breaching Company, such 10 business-day
period may be extended for so long as the other Company shall be
making diligent attempts to cure such default.
(d) By either JGUR or P2S if any court of competent jurisdiction in
the United States or other United States governmental body shall
have issued an order, decree, or ruling or taken any other action
restraining, enjoining, or otherwise prohibiting the Merger and
such order, decree, ruling, or any other action shall have become
final and non-appealable.
9.2 Effect of Termination. In the event of termination of this
Agreement as provided above, this Agreement shall forthwith become of no further
effect and, except for a termination resulting from a breach by a party to this
Agreement, there shall be no liability or obligation on the part of any Company
or their respective officers or directors. Nothing contained in this Section
-------
9.2 shall relieve any party from liability for willful breach of this Agreement
---
that results in termination of this Agreement. Upon request therefor, each
party shall redeliver all documents, work papers, and other material of any
other party relating to the transactions contemplated hereby, whether obtained
before or after the execution hereof, to the party furnishing same.
9.3 Amendment. This Agreement may be amended by action taken at any time
before or after approval hereof by the shareholders of P2S, but, after any such
approval, no amendment shall be made which alters the Exchange Ratio or which in
any way materially adversely affects the rights of such shareholders, without
the further approval of such shareholders. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
9.4 Waiver. At any time prior to the Effective Time, the parties hereto may
(a) extend the time for the performance of any of the obligations or other acts
of the other parties hereto, (b) waive any inaccuracies in the representations
and warranties contained herein or in any document delivered pursuant hereto,
and (c) waive compliance with any of the agreements or conditions contained
herein. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. Such extensions or waivers shall be in writing, executed
by each of JGUR and P2S. Such waiver shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure.
ARTICLE X
GENERAL PROVISIONS
10.1 Brokers. Each Company represents and warrants to the others that
no broker, finder, or financial advisor is entitled to any brokerage, finder's,
or other fee or commission in connection with the Merger or the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
any party hereto, except as reflected in Section 10.1 of the P2S Schedule or the
JGUR Schedule.
10.2 Notices. All notices, claims, demands and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or by telex or telecopy or mailed by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) If to JGUR, to:
JAGUAR INVESTMENTS, INC.
------------------------
------------------------
Attention: President
(b) If to P2S, to:
FREIGHT RATE, INC.
00000 Xxxxxxx Xxxx, #000
Xxxx Xxxxxxxxxx, XX 00000
Attention: Xx. Xxxxxxx Xxxxx
with a copy to:
Xxxxxx & Xxxx, P.A.
Suite 1700
000 Xxxx Xxx Xxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
10.3 Descriptive Headings. The headings contained in this Agreement are
for reference Purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
10.4 Entire Agreement: Assignment. This Agreement (including the Exhibits,
Schedules, and other documents and instruments referred to herein) (a)
constitute the entire agreement and supersede all other prior agreements and
understandings, both written and oral, among the parties or any of them, with
respect to the subject matter hereof; and (b) shall not be assigned by operation
of law or otherwise.
10.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida without giving effect to the
provisions thereof relating to conflicts of law.
10.6 Parties in Interest. Nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person any rights, benefit, or
remedies of any nature whatsoever or by reason of this Agreement.
10.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement.
10.8 Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
10.9 Jurisdiction and Venue. Each Party hereto hereby agrees that any
proceeding relating to this Agreement and the Merger shall be brought in the
United States District Court for the Southern District of Florida. Each party
hereto hereby consents to personal jurisdiction in any such action brought in
such court, consents to service of process by registered mail made upon such
party and such party's agent and waives any objection to venue in any such court
or to any claim that such court is an inconvenient form.
10.10 Investigation. The respective representations and warranties of each
Company contained herein or in the certificates or other documents delivered
prior to the Closing shall not be deemed waived or otherwise affected by any
investigation made by any party hereto.
10.11 Consents. For purposes of any provision of this Agreement requiring,
permitting, or providing for the consent of any or Company, the written consent
of the Chief Executive Officer or President of a Company shall be sufficient to
constitute such consent.
IN WITNESS WHEREOF, each Company has caused this Agreement to be executed on its
behalf by its officers thereunto duly authorized, all as of the date first above
written.
JAGUAR INVESTMENTS, INC., a Nevada
corporation
By: /s/ Xxxxxxx Xxxx
-----------------------------------
Name: Xxxxxxx Xxxx
Its: President
FREIGHT RATE, INC., a Delaware
corporation
By: /s/ Xxxxxxx Xxxxx
-----------------------------
Name: Xxxxxxx Xxxxx
Its: President
