AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT
AND PLAN OF REORGANIZATION (“Agreement”)
dated as of September 9, 2008, by and between Old
Berliner, Inc.,
a
Delaware corporation (“OBI”), and Berliner
Communications,
Inc.,
a
Delaware corporation (“BCI”).
WHEREAS,
OBI
wishes to transfer its business and substantially all of its assets to BCI
solely in exchange for voting shares of BCI in a transaction intended to qualify
as a “reorganization” within the meaning of Section 368(a)(l)(C) of the Internal
Revenue Code of 1954, as amended (the “Code”), it being contemplated by BCI and
OBI that OBI will thereafter, as an integral part of the transaction, distribute
the shares of BCI received in the transaction to OBI’s shareholders in complete
liquidation of OBI and dissolve; and BCI wishes to acquire the business and
substantially all of the assets of OBI on the terms and conditions set out
herein; and
WHEREAS,
BCI
desires to complete the transaction in order to facilitate OBI’s distribution of
shares of common stock of BCI, par value $.01 per share (“BCI Common Stock”) to
OBI’s shareholders so that the outstanding shares of BCI Common Stock will be
held by a significantly larger number of record shareholders, which will
increase the “public float” of BCI Common Stock.
NOW,
THEREFORE,
BCI and
OBI, agree as follows:
1. Exchange
of Assets.
1.01 Exchange
of Assets.
On the
terms and subject to the conditions set forth herein, at the Closing (as defined
in Section 4.01), effective as of the Closing Date (as defined in Section 4.01),
BCI shall acquire from OBI, and OBI shall assign, transfer, convey and deliver
to BCI, all of OBI’s right, title and interest in and to all of the assets and
properties of OBI including, without limitation, 13,104,644 shares of the Common
Stock of BCI registered in the name of OBI (the “OBI Transferred Shares”) as the
same shall exist on the Closing Date, except for the Excluded Assets as
described in Section 1.02, all of such assets and properties being hereinafter
collectively referred to as the “Transferred Assets,” which Transferred Assets
constitute (and on the Closing Date will constitute) substantially all of the
assets of OBI.
1.02. Excluded
Assets.
Notwithstanding anything to the contrary which may be contained herein, the
Transferred Assets shall not include:
(a) cash
in
an amount equal to $400,000 less the amount of cash expended by OBI from and
after the date hereof to and including the Closing Date for the expenses and
costs incurred by OBI in connection with this Agreement and the transactions
contemplated herein, including its liquidation and dissolution.
(b) OBI’s
minutes of meetings of its board of directors and shareholders, tax records,
shareholder records and share ledgers; and
(c) OBI’s
rights under or pursuant to this Agreement.
1.03 Instruments
of Transfer.
On the
Closing Date, OBI shall deliver, or cause to be delivered, to BCI (a) duly
executed instruments of transfer and assignment, including, without limitation,
bills of sale and assignments and the certificate(s) representing the OBI
Transferred Shares endorsed in blank, in form and substance reasonably
satisfactory to BCI and its counsel, sufficient to vest in BCI valid title
to
all of OBI's right, title and interest in and to the Transferred Assets, free
and clear of all mortgages, claims, liens, charges or encumbrances of any kind
or nature whatsoever, and (b) a check in the amount of all cash and cash
equivalents included in the Transferred Assets.
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1.04 Assumption
of Liabilities.
BCI
does not and shall not assume any liabilities or obligations of
OBI.
1.05. Tax-Free
Reorganization.
The
transactions contemplated by this Agreement are intended to qualify as a
“reorganization” within the meaning of Section 368(a)(1)(C) of the Code, all of
the Issued Shares (as defined below) are intended to constitute consideration
issued in connection with the reorganization, and this Agreement is intended
to
constitute a “plan of reorganization” within the meaning of the regulations
promulgated under Section 368 of the Code. The parties hereto agree to prepare
and file tax returns that are consistent with the intention of having the
transactions contemplated by this Agreement constitute a reorganization within
the meaning of Section 368 of the Code.
2. Exchange
Consideration.
2.01 Exchange
Consideration.
In
exchange for, and in consideration of, the assignment, conveyance and transfer
of the Transferred Assets as provided herein, BCI shall convey and deliver
to
OBI at the Closing a certificate or certificates for 13,104,644 shares (as
may
be hereafter be adjusted as provided in Section 2.02 hereof) of the common
stock, par value $.01 per share, of BCI (the “Issued Shares”).
2.02 Adjustment
of Number of Issued Shares.
If
after the date of this Agreement and prior to the Closing Date, BCI shall (a)
declare any dividend payable in shares of BCI Common Stock to its common
stockholders of record prior to the Closing Date; or (b) split, combine,
reclassify or make a similar change in the outstanding shares of BCI Common
Stock, an equitable adjustment shall be made in the number of Issued Shares
deliverable to OBI hereunder on the Closing Date under Section
2.01.
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3. Closing.
3.01 Closing.
The
closing of the transactions to be effected hereunder (the “Closing”) shall be
held at the offices of Morse, Zelnick, Rose & Lander, LLP, 000 Xxxx Xxxxxx,
Xxx Xxxx, XX 00000 at 10:00 A.M. on the third business day after all of the
conditions to Closing as set forth in Articles 7 and 8, shall have been
satisfied, or at such other place or at such other time as BCI and OBI may
mutually agree (the “Closing Date”).
4. Representations
and Warranties of OBI.
OBI
represents and warrants to and agrees with BCI as follows:
4.01 Organization
and Good Standing.
OBI
is a
corporation duly organized, validly existing and in good standing under the
laws
of the State of Delaware. OBI has full corporate power and authority to conduct
its business as now conducted and to own or lease and operate the assets and
properties now owned or leased and operated by it. OBI is duly qualified to
do
business and is in good standing in each jurisdiction in which the nature of
its
business or the character of its properties requires such
qualification.
4.02 Capitalization
of OBI.
All of
the outstanding shares of capital stock of OBI are owned beneficially and of
record as set forth on Schedule 4.02 hereof.
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4.03 Authority
and Compliance.
OBI has
full corporate power and authority to execute and deliver this Agreement. The
consummation and performance by OBI of the transactions contemplated by this
Agreement have been duly and validly authorized by all necessary corporate
actions (except for the approval of the shareholders of OBI). This Agreement
has
been duly and validly executed and delivered on behalf of OBI and constitutes
a
valid obligation of OBI, enforceable in accordance with its terms, except to
the
extent that such enforceability may be limited by applicable insolvency,
bankruptcy, reorganization or similar laws affecting the enforcement of
creditors' rights generally and by general equity principles. No consent,
authorization or approval of, exemption by, or filing with, any domestic
governmental or administrative authority, or any court, is required by OBI
or
any of its shareholders to be obtained or made in connection with the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby.
4.04 No
Conflict.
The
performance of this Agreement and the consummation of the transactions
contemplated hereby will not result in a breach or violation of any of the
terms
or provisions of, or constitute a default under the articles of incorporation
or
by-laws of the OBI.
4.05 Title.
OBI has
good and valid title to the Transferred Assets free and clear of all liens,
security interest and other encumbrances of any kind or nature
whatsoever.
5. Representations
and Warranties of BCI.
BCI
hereby represents and warrants to OBI as follows:
5.01 Organization
and Good Standing.
BCI is a
corporation duly organized, validly existing and in good standing under the
laws
of the State of Delaware, with full corporate power and authority to conduct
its
business as now conducted and to own or lease and operate the assets and
properties now owned or leased and operated by it.
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5.02 Authority
and Compliance.
BCI has
full corporate power and authority to execute and deliver this Agreement. The
consummation and performance by BCI of the transactions contemplated by this
Agreement have been duly and validly authorized by all necessary corporate
and
other proceedings. This Agreement has been duly and validly executed and
delivered on behalf of BCI and constitutes a valid obligation of BCI,
enforceable in accordance with its terms, except to the extent that such
enforceability may be limited by applicable insolvency, bankruptcy,
reorganization or similar laws affecting the enforcement of creditors' rights
generally and by general equity principles. Except for filings and approvals
under applicable federal and states securities laws, no consent, authorization
or approval of, exemption by, or filing with, any domestic governmental or
administrative authority, or any court, is required to be obtained or made
by
BCI in connection with the execution, delivery and performance of this Agreement
or the consummation of the transactions contemplated hereby.
5.03 No
Conflict.
The
performance of this Agreement and the consummation of the transactions herein
contemplated will not result in a breach or violation of any of the terms or
provisions of, or constitute a default under (i) any contract or other agreement
or instrument to which BCI is a party or by which BCI or any of its properties
or assets is bound; (ii) the certificate of incorporation or by-laws of BCI;
or
(iii) any law, order, rule, regulation, writ, injunction or decree applicable
to
BCI.
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5.04 SEC
Filings.
BCI has
delivered to OBI (i) its annual report on Form 10-K with respect to the fiscal
year ended June 30, 2007 and (ii) its quarterly report on Form 10-Q with respect
to the quarter ended March 31, 2008 (the “SEC Filings’”). The SEC Filings are
true, complete and correct in all material respects. The financial statements
contained in the SEC Filings are true, complete and correct and fairly present
in all material respects the financial position of the BCI as of the respective
dates thereof and the results of operations for the periods then ended and
have
been prepared in conformity with GAAP applied on a basis consistent with prior
periods. None of the SEC Filings, when filed, contained any untrue statement
of
a material fact or omitted to state a material fact required to be stated
therein in order to make the statements therein in light of the circumstances
under which they were made not misleading
5.05 Issuance
of Shares.
The
Issued Shares will be validly issued, fully paid and non-assessable, and free
from all taxes, liens, claims and encumbrances with respect to the issue thereof
and shall not be subject to preemptive rights or other similar rights of
stockholders of BCI and will not impose personal liability upon the holder
thereof.
6. Covenants.
6.01. Registration
Statement.
(a) BCI
will
prepare a Registration Statement on Form S-4 and file the same with the
Securities and Exchange Commission (“SEC”) to register the issuance of the
Issued Shares to OBI and the subsequent distribution of the Issued Shares by
OBI
to its shareholders in connection with the subsequent liquidation of OBI (the
“Registration Statement”). BCI will file the Registration Statement with the SEC
as soon as reasonably practicable after the filing by BCI of its Form 10-K
for
the year ended June 30, 2008. BCI will use its reasonable efforts to have the
Registration Statement declared effective as soon as practicable after the
filing thereof.
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(b) OBI
hereby agrees that the taking of the action by BCI set forth in Section 6.01(a)
will be in full satisfaction of BCI’s obligations to OBI pursuant to Section
8.1(d) of the Asset Purchase Agreement dated as of February 18, 2005 by and
among Novo Networks, Inc. (now known as BCI), Berliner Communications, Inc.
(now
known as OBI) and certain other parties.
6.02 Proxy
Materials.
As
soon
as is reasonably practicable after the Registration Statement has been declared
effective, OBI will call a meeting of its shareholders to approve the
transactions contemplated by this Agreement. The notice of the meeting sent
to
such shareholders will include the Prospectus which is a part of the
Registration Statement.
6.03 Liquidation.
From and
after the Closing Date, OBI will not engage in any business, and will promptly
liquidate and dissolve as a corporation and will distribute the Issued Shares
received pursuant to Section 2 hereof to its shareholders in complete
cancellation of their shares of OBI capital stock, except that OBI shall not
distribute any fractional interests in shares of BCI common stock but shall
arrange for the sale for the account of its shareholders of a sufficient number
of shares of BCI common stock to enable it to distribute cash in lieu of any
fractional interests to which its shareholders would otherwise be
entitled.
6.04 Conduct
of OBI Until Closing Date.
From
and after the date hereof until the Closing Date OBI shall:
(a) operate
its business only in the usual, regular and ordinary manner.
(b) not
sell,
transfer or otherwise dispose of any of the OBI Transferred Shares;
and
(c) maintain
its books and records in the usual, regular and ordinary manner on a basis
consistent with prior periods.
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6.05 Access.
OBI
shall afford BCI and its representatives free and full access during regular
business hours to all of the books and record of OBI.
7. Conditions
Precedent to the Obligations of BCI.
The
obligations of BCI pursuant to this Agreement are subject to the satisfaction
at
the Closing of each of the following conditions; provided, however, that BCI
may, in its sole discretion, waive any of such conditions and proceed with
the
transactions contemplated hereby.
7.01 Accuracy
of Representations and Warranties.
The
representations and warranties of OBI contained in this Agreement or any other
document delivered to BCI at the Closing in connection with this Agreement
shall
be true in all material respects on and as of the Closing Date, as if made
on
and as of the Closing Date.
7.02 Performance
of Agreements.
OBI
shall have performed and complied with all covenants, obligations and agreements
to be performed or complied with by it on or before the Closing Date pursuant
to
this Agreement.
7.03 Litigation.
Etc.
No
claim, action, suit, proceeding, arbitration, hearing or notice of hearing
shall
be pending (and no action or investigation by any governmental authority shall
be threatened) which seeks to enjoin or prevent the consummation of the
transactions contemplated by this Agreement.
7.04 Officer's
Certificate.
BCI
shall have received a certificate of an officer of OBI, dated the Closing Date,
certifying as to the fulfillment of the conditions set forth in Sections 7.01,
7.02 and 7.03 hereof.
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7.05 Actions,
Proceedings, Etc.
All
actions, proceedings, instruments and documents required to carry out the
transactions contemplated by this Agreement and all other related legal matters
shall have been taken, prepared and completed in a manner reasonably
satisfactory to BCI and its counsel; and BCI shall have been furnished with
such
other instruments and documents as it shall have reasonably
requested.
7.06 Shareholder
Approval.
The
shareholders of OBI shall have approved the transactions contemplated by the
Agreement in accordance with the provisions of the Delaware General Corporation
Law.
8. Conditions
Precedent to the Obligations of the OBI.
The
obligations of OBI under this Agreement are subject to the satisfaction at
the
Closing of the following conditions; provided, however, that OBI may, in its
sole discretion, waive any of such conditions and proceed with the transactions
contemplated hereby.
8.01 Accuracy
of Representations and Warranties.
The
representations and warranties of BCI contained in this Agreement or any other
document delivered by BCI to OBI at the Closing in connection with this
Agreement shall be true in all material respects on and as of the Closing Date,
as if made on and as of the Closing Date.
8.02 Performance
of Agreements.
BCI
shall have performed and complied with all covenants, obligations and agreements
to be performed or complied with by it on or before the Closing Date pursuant
to
this Agreement.
8.03 Litigation.
Etc.
No
claim, action, suit, proceeding, arbitration, hearing or notice of hearing
shall
be pending (and no action or investigation by any governmental authority shall
be threatened) which seeks to enjoin or prevent the consummation of the
transactions contemplated by this Agreement.
8.04 Officer’s
Certificate.
OBI
shall have received a certificate of an officer of BCI, dated the Closing Date,
certifying as to the fulfillment of the conditions set forth in Sections 8.01,
8.02 and 8.03 hereof.
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8.05 Actions,
Proceedings, Etc.
All
actions, proceedings, instruments and documents required to carry out the
transactions contemplated by this Agreement and all other related legal matters
shall have been taken, prepared and completed in a manner reasonably
satisfactory to OBI and its counsel; and OBI shall have been furnished with
such
other instruments and documents as they shall have reasonably
requested.
8.06 Shareholder
Approval.
The
shareholders of OBI shall have approved the transactions contemplated by the
Agreement in accordance with the provisions of the Delaware General Corporation
Law.
9. Indemnification.
9.01 Indemnification
by BCI.
BCI
hereby covenants and agrees with OBI that it shall reimburse and indemnify
OBI
and their successors and assigns (individually an “Indemnified Party”) and hold
them harmless from, against and in respect of any and all costs, losses, claims,
liabilities, fines, penalties, damages and expenses (including interest which
may be imposed in connection therewith and court costs and reasonable fees
and
disbursements of counsel) incurred by any of them due to, arising out of, or
in
connection with a breach of any of the representations, warranties, covenants
or
agreements made by BCI in this Agreement (a “Claim”).
9.02 Indemnification
by OBI.
OBI
hereby covenants and agrees with BCI that it shall reimburse and indemnify
BCI
and its successors and assigns (also individually an “Indemnified Party”) and
hold them harmless from, against and in respect of any and all costs, losses,
claims, liabilities, fines, penalties, damages and expenses (including interest
which may be imposed in connection therewith and court costs and reasonable
fees
and disbursements of counsel) incurred by any of them due to, arising out of,
or
in connection with a breach of any of the representations, warranties, covenants
or agreements made by OBI in this Agreement (also a “Claim”).
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9.03 Right
to Defend. etc.
If the
facts giving rise to any such indemnification shall involve any actual Claim
or
demand by any third party against an Indemnified Party, the indemnifying party
shall be entitled to notice of and entitled to defend or prosecute such Claim
at
its expense and through counsel of its own choosing if it advises the
Indemnified Party in writing of its intention to do so within thirty (30) days
after notice of such Claim has been given to the indemnifying party (without
prejudice to the right of any Indemnified Party to participate at its expense
through counsel of its own choosing). Such Indemnified Party shall cooperate
in
the defense and/or settlement of such Claim, but shall be entitled to be
reimbursed for all costs and expenses incurred by it in connection therewith.
No
settlement of any Claim may be made without the consent of the indemnifying
party, which consent may not be unreasonably withheld; provided, however, that
if such indemnifying party has been offered the opportunity to defend such
Claim
and has elected not to do so then settlement may be made without the consent
of
the indemnifying party.
10. General
Provisions.
10.01 Survival
of Representations, Warranties, Covenants, and
Agreements.
The
representations, warranties, covenants and agreements contained in this
Agreement shall survive the execution of this Agreement and the closing of
the
transactions contemplated hereby.
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10.02 Expenses.
Whether
or not the transactions contemplated by this Agreement are consummated, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expense.
10.03 Notices.
All
notices, requests, demands and other communications which are required to be
or
may be given under this Agreement to any party to any of the other parties
shall
be in writing and shall be deemed to have been duly given when (a) delivered
in
person, the day following dispatch by an overnight courier service (such as
Federal Express or UPS, etc.) or (c) five (5) days after dispatch by certified
or registered first class mail, postage prepaid, return receipt requested,
to
the party to whom the same is so given or made
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If
to OBI addressed to:
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Old
Berliner, Inc.
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c/o
Xxxxxxx Xxxxxxxx, Chief Executive Officer
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00
Xxxxxx Xxxxxx
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Xxxxxxx
Xxxx, XX 00000
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with
a copy to:
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Morse,
Zelnick, Rose & Lander, LLP
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000
Xxxx Xxxxxx
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Xxx
Xxxx, XX 00000
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Attn:
Xxxxxx Xxxxxx, Esq.
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If
to BCI addressed to:
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Berliner
Communications, Inc.
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00
Xxxxxx Xxxxxx
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Xxxxxxx
Xxxx, XX 00000
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Attn:
Xxxxxxxx Xxx, General Counsel
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with
a copy to:
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Xxxxxxx
& Xxxxx LLP
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0000
Xxxx Xxxxxx
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Xxxxxx,
Xxxxx 00000
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Attn:
Xxxxxxx Xxxxx, Esq.
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10.04 Assignability
and Amendments.
This
Agreement shall not be assignable by any of the parties hereto. This Agreement
cannot be altered or otherwise amended except pursuant to an instrument in
writing signed by each of the parties. This Agreement shall be binding upon
and
inure to the benefit of the parties hereto and their respective successors,
legal representatives and assigns.
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10.05 Entire
Agreement.
This
Agreement and the other writings and agreements specifically identified herein
contain the entire agreement between the parties with respect to the
transactions contemplated herein and supersede all previous written or oral
negotiations, commitments and understandings.
10.06 Waivers,
Remedies.
Any
condition to the performance of any party hereto which legally may be waived
on
or prior to the Closing Date may be waived by the party entitled to the benefit
thereof. Any waiver must be in writing and signed by the party to be bound
thereby. A waiver of any of the terms or conditions of this Agreement shall
not
in any way affect, limit or waive a party's rights under any other term or
condition of this Agreement. All remedies under this Agreement shall be
cumulative and not alternative.
10.07 Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original and all of which together shall constitute one and the same
instrument.
10.08 Headings.
All
headings (including, without limitation, Article headings and Section titles)
are inserted for convenience of reference only and shall not affect the meaning
or interpretation of any such provisions or of this Agreement, taken as an
entirety.
10.09 Severability.
If and
to the extent that any court of competent jurisdiction holds any provision
(or
any part thereof) of this Agreement to be invalid or unenforceable, such holding
shall in no way affect the validity of the remainder of this
Agreement.
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10.10 No
Third Party Beneficiaries.
Nothing
contained in this Agreement shall be deemed to confer rights on any Person
or to
indicate that this Agreement has been entered into for the benefit of any
Person, other than the parties hereto.
10.11 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Delaware without regard to conflicts of laws provisions.
10.12 Construction.
The
parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties
and no presumption of burden of proof shall arise favoring or disfavoring any
party by virtue of the authorship of any of the provisions of this
Agreement.
10.12 Further
Assurances.
At any
time after the Closing Date, each party shall upon request of another party,
execute, acknowledge and deliver all such further and other assurances and
documents, and will take such action consistent with the terms of this
Agreement, as may be reasonably requested to carry out the transactions
contemplated herein and to permit each party to enjoy its rights and benefits
hereunder.
11. Termination.
11.01 Termination. This
Agreement may be terminated (notwithstanding approval of the shareholders of
OBI:
(a) by
the
mutual consent in writing of the Boards of Directors of OBI and BCI;
or
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(b) if
the
Closing Date has not occurred by June 30, 2009, at any time thereafter by either
BCI or OBI, upon ten days prior written notice to the non-terminating
party.
11.02 Effect
of Termination.
In the
event of a termination of this Agreement pursuant to Section 11.01 hereof,
each
party shall pay the costs and expenses incurred by it in connection with this
Agreement and no party (or any of its officers, directors and shareholders)
shall be liable to any other party on account of such termination.
IN
WITNESS WHEREOF,
the
parties hereto have duly executed this Agreement as of the day and year first
above written.
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Attest:
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OLD
BERLINER, INC.
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/s/Xxxxxxxx
Xxx
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By:
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/s/
Xxxx Xxxxxxxx
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Xxxxxxxx
Xxx, Secretary
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Xxxx
Xxxxxxxx, CEO & President
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BERLINER
COMMUNICATIONS, INC.
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/s/
Xxxxxxx X. Xxxxxxxx, Xx.
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By:
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/s/
Xxxx Xxxxxxxx
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Xxxx
Xxxxxxxx, CEO & President
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Treasurer
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