Exhibit 2.1
ACQUISITION AGREEMENT AND PLAN OF MERGER
This ACQUISITION AND PLAN OF MERGER AGREEMENT ("Agreement") made July 8, 2005,
by and among ABSOLUTE GLASS PROTECTION, INC., a Nevada corporation ("Parent"),
ABSOLUTE GLASS PROTECTION ACQUISITION CORPORATION, a Nevada corporation
("Sub"), and JAGGED PEAK, INC. (the "Company"), a Florida corporation.
RECITALS:
A. The respective Boards of Directors of Parent and the Company, as well as
all of the shareholders of the Company have determined that a merger of
Sub with and into the Company (the "Merger"), upon the terms and subject to
the conditions set forth in this Agreement, would be fair and in the best
interests of their respective shareholders, and such Boards of Directors have
approved such Merger, pursuant to which shares of Common Stock of the Company
("Company Common Stock") issued and outstanding immediately prior to the
Effective Time of the Merger (as defined in Section 1.03) will be converted
into the right to receive Common Stock of Parent ("Parent Common Stock")
other than Dissenting Shares (as defined in Section 2.01(d)). This Merger is
subject to the terms and conditions set forth in this Agreement in accordance
with Section 4(2) of the Securities Act of 1933, as amended (the "Securities
Act"). Further, this Merger is contingent upon the provision by Jagged Peak of
required financial statements for the periods specified in Rule 3-05(b) of
Regulation S-X.
B. Parent, Sub and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also to
prescribe various conditions to the Merger.
C. For federal income tax purposes, the parties intend that the Merger shall
qualify as a reorganization under the provisions of Section 368 of the Internal
Revenue Code of 1986, as amended (the "Code").
D. Upon completion of the Acquisition Agreement and Plan of Merger, the Parent
agrees to change its corporate name to Jagged Peak, Inc.
NOW, THEREFORE, in consideration of the representations, warranties, covenants
and agreements contained in this Agreement, the parties agree as follows:
ARTICLE I
THE MERGER
1.01 The Merger. Upon the terms and subject to the conditions set forth in this
Agreement, and in accordance with Nevada Corporations Code (the "Nevada
Statutes") and the Florida Business Corporation Act (the "Florida Statutes"),
Sub shall be merged with and into the Company at the Effective Time of the
Merger. At the Effective Time of the Merger, the separate existence of Sub
shall cease, and the Company shall continue as the surviving corporation (the
"Surviving Corporation") and shall change its name to "Jagged Peak, Inc." by
filing Amended Articles with the Nevada Secretary of State.
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1.02 Closing. Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant to Section
7.01 and subject to the satisfaction or waiver of the conditions set forth in
Article VI, the closing of the Merger (the "Closing") will take place at 10:00
a.m. on the business day after satisfaction of the conditions set forth in
Article VI (or as soon as practicable thereafter following satisfaction or
waiver of the conditions set forth in Article VI) (the "Closing Date"), at the
law offices of Xxxxxx X. Xxxx, unless another date, time or place is
agreed to in writing by the parties hereto.
1.03 Effective Time of Merger. As soon as practicable following the
satisfaction or waiver of the conditions set forth in Article VI, the parties
shall file articles of merger (the "Articles of Merger") executed in accordance
with the relevant provisions of the Nevada Statutes and the Florida Statutes
and shall make all other filings or recordings required under Nevada Statutes
and Florida Statutes. The Merger shall become effective at such time as the
Articles of Merger are duly filed with the Secretary of State of Nevada, or at
such other time as is permissible in accordance with the Nevada Statutes and
the Florida Statutes and as Parent and the Company shall agree should be
specified in the Articles of Merger (the time the Merger becomes effective
being the "Effective Time of the Merger"). Parent shall use reasonable efforts
to have the Closing Date and the Effective Time of the Merger to be the same
day.
1.04 Effects of the Merger. The Merger shall have the effects set forth in the
applicable provisions of Nevada Statutes and Florida Statutes.
1.05 Articles of Incorporation; Bylaws; Purposes.
(a) The Articles of Incorporation of the Company in effect
immediately prior to the Effective Time of the Merger shall be the Certificate
of Incorporation of the Surviving Corporation until thereafter changed or
amended as provided therein or by applicable law. The Parent agrees at
the Effective Time to amend its articles to change its corporate name to
Jagged Peak.
(b) The Bylaws of the Company in effect at the Effective Time of the
Merger shall be the Bylaws of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
(c) The purposes of the Surviving Corporation and the total number of
its authorized capital stock shall be as set forth in the Articles of
Incorporation of the Company in effect immediately prior to the Effective Time
of the Merger until such time as such purposes and such number may be amended
as provided in the Articles of Incorporation of the Surviving Corporation and
by applicable law.
1.06 Directors. The directors of the Company at the Effective Time of the
Merger shall be the directors of the Surviving Corporation, until the earlier
of their resignation or removal or until their respective successors are duly
elected and qualified, as the case may be.
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1.07 Officers. The officers of the Company at the Effective Time of the Merger
shall be the officers of the Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors are duly elected
and qualified, as the case may be.
ARTICLE II
EFFECT OF THE MERGER
ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS
2.01 Effect on Capital Stock. As of the Effective Time of the Merger, by virtue
of the Merger and without any action on the part of the holders of shares of
Company Common Stock or any shares of capital stock of Sub:
(a) Common Stock of Sub. Each share of common stock of Sub issued and
outstanding immediately prior to the Effective Time of the Merger shall be
converted into one share of Common Stock of the Surviving Corporation and shall
be the issued and outstanding capital stock of the Surviving Corporation.
(b) Cancellation of Parent-Owned Company Common Stock. Each share of
Company Common Stock that is owned by Parent, Sub or any other subsidiary of
Parent shall automatically be cancelled and retired and shall cease to exist,
and no Parent Common Stock or other consideration shall be delivered or
deliverable in exchange therefor.
(c) Conversion of Company Common Stock. Except as otherwise provided
herein, each issued and outstanding share of Company Common Stock shall be
converted into fully paid and nonassessable shares of Parent Common Stock in
accordance with the Exchange Ratio described in Section 2.02 (the "Merger
Consideration"). Eleven Million Four Hundred Sixty-six Thousand, Six Hundred
Sixty-six (11,466,666) common shares of said Merger Consideration shall
be the "Initial Deposit" and deposited by the Parent with the Exchange Agent
(as described below) further to Section 2.04(a) herein,
(d) Dissenting Shares. Notwithstanding anything in this Agreement to
the contrary, shares of Company Common Stock issued and outstanding immediately
prior to the Effective Time of the Merger held by a holder (if any) who has the
right to demand payment for and an appraisal of such shares in accordance with
the Florida Statutes ("Dissenting Shares") shall not be converted into a
right to receive Merger Consideration unless such holder fails to perfect or
otherwise loses such holder's right to such payment or appraisal, if any. If,
after the Effective Time of the Merger, such holder fails to perfect or loses
any such right to appraisal, each such share of such holder shall be treated as
a share that had been converted as of the Effective Time of the Merger into the
right to receive Merger Consideration in accordance with this Section 2.01.
The Company shall give prompt notice to Parent of any demands received by the
Company for appraisal of shares of Company Common Stock, and Parent shall have
the right to participate in all negotiations and proceedings with respect to
such demands. The Company shall not, except with the prior written consent of
Parent, make any payment with respect to, or settle or offer to settle, any
such demands.
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(e) Cancellation and Retirement of Company Common Stock. As of the
Effective Time of the Merger, as set forth in subsection (c) and subject to
subsection (d) hereof, all shares of Company Common Stock issued and
outstanding immediately prior to the Effective Time of the Merger, shall no
longer be outstanding and shall automatically be cancelled and retired and
shall cease to exist, and each holder of a certificate representing any such
shares of Company Common Stock shall cease to have any rights with respect
thereto, except the right to receive the applicable Merger Consideration to be
issued in consideration therefor upon surrender of such certificate in
accordance with Section 2.04.
2.02 Exchange Ratio. The "Exchange Ratio" is as follows:
Each share of Company Common Stock shall be converted into 2.353 shares of
Parent Common Stock in the Merger, an Exchange Ratio of 1:2.353. The Company
has Four Million Eight Hundred Seventy Three Thousand Three Hundred Fifty-Seven
(4,873,357) common shares owned by the Company's shareholders. The Initial
Deposit shall be distributable by the Exchange Agent effective as of the
Effective Time of the Merger in accordance with the provisions of Section
2.04(a) herein and Exhibit 2.02 to this Agreement and the Escrow Deposit shall
be distributable pursuant to the provisions of Section 2.04(b)(iv) herein. No
fractional Parent Common Stock shall be issued in the Merger. If the product
of the number of shares a Company shareholder holds immediately prior to the
Closing multiplied by the Exchange Ratio would result in the issuance of a
fractional share of Parent Common Stock, that product will be rounded down to
the nearest whole number of shares of Parent Common Stock if it is equal to or
less than the fraction of one-half (.5) of one Parent Common Stock or rounded
up to the nearest whole number of shares of Parent Common Stock if the said
product is greater than the fraction of one-half (.5) of one Parent Common
Stock.
2.03 Stock Options; Warrants.
(a) Assumption. At the Effective Time of the Merger, all options to
purchase Company Common Stock then outstanding under the Company's Stock Option
Plan (the "Company Option Plan"), and all options to purchase Company Common
Stock then outstanding which are not under the Company Option Plan, and all
outstanding warrants to purchase Company Common Stock then outstanding in each
case whether vested or unvested, and the Company Option Plan itself, shall be
assumed by Parent in accordance with Section 2.03(b) hereof.
(b) Stock Options and Warrants. At the Effective Time of the Merger,
each outstanding option to purchase Company Common Stock (each, a "Company
Stock Option"), whether or not granted under the Company Option Plan, and all
outstanding warrants to purchase Company Common Stock the outstanding whether
or not vested, shall by virtue of the Merger be assumed by Parent. Each Company
Stock Option and Warrant so assumed by Parent under this Agreement will
continue to have, and be subject to, the same terms and conditions of such
options immediately prior to the Effective Time of the Merger (including,
without limitation, any repurchase rights or vesting provisions and provisions
regarding the acceleration of vesting on certain transactions), except that (i)
each Company Stock Option and Warrant will be exercisable (or will become
exercisable in accordance with its terms) for that number of whole shares of
Parent Common Stock equal to the product of the number of Company Shares that
were issuable
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upon exercise of such Company Stock Option or Warrant immediately prior to the
Effective Time of the Merger multiplied by the Exchange Ratio, rounded down to
the nearest whole number of shares of Parent Common Stock if the said product
is equal to or less than the fraction of one-half (.5) of one Parent Common
Stock or rounded up to the nearest whole number of shares of Parent Common
Stock if the said product is greater than the fraction of one-half (.5) of one
Parent Common Stock, and (ii) the per share exercise price for the shares of
Parent Common Stock issuable upon exercise of such assumed Company Stock Option
and Warrant will be equal to the quotient determined by dividing the exercise
price per Company Share at which such Company Stock Option and Warrant was
exercisable immediately prior to the Effective Time of the Merger by the
Exchange Ratio, rounded up to the nearest whole cent. Parent shall comply with
the terms of all such Company Stock Options and Warrants and use its best
efforts to ensure, to the extent required by, and subject to the provisions of,
the Company Option Plan and permitted under the Code or other relevant laws and
regulations that any Company Stock Option that qualified for tax treatment
under Section 424(b) of the Code prior to the Effective Time of the Merger
continue to so qualify after the Effective Time of the Merger. Parent shall
take all corporate actions necessary to reserve for issuance a sufficient
number of shares of Parent Common Stock for delivery upon exercise of all
Company Stock Options and Warrants on the terms set forth in this Section
2.03(b).
2.04 Exchange of Certificates
(a) Exchange Agent. No later than the Effective Time of the Merger,
Parent shall deposit the Initial Deposit with its transfer agent (the "Exchange
Agent"), for the benefit of the holders of shares of Company Common Stock, for
exchange in accordance with this Article II.
(b) Escrow Deposit. At the Effective Time of the Merger, Parent
will cause to be delivered to the Law Offices of Xxxxxx X. Xxxx, as escrow
agent (the "Escrow Agent") the Merger Consideration Initial Deposit to be held
pursuant to the Escrow Agreement attached thereto as Exhibit A (The "Escrow
Agreement") and the Parent Escrow Deposit (as defined in Section 8.04 hereof.
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(c) Exchange Procedures. As soon as practicable after the Effective
Time of the Merger, each holder of an outstanding certificate or certificates
which prior thereto represented shares of Company Common Stock shall, upon
surrender to the Exchange Agent of such certificate or certificates and
acceptance thereof by the Exchange Agent, be entitled to a certificate or
certificates representing the number of shares of Parent Common Stock into
which the aggregate number of shares of Company Common Stock previously
represented by such certificate or certificates surrendered shall have been
converted pursuant to this Agreement. The Exchange Agent shall accept such
certificates upon compliance with such reasonable terms and conditions as the
Exchange Agent may impose to effect an orderly exchange thereof in accordance
with normal exchange practices. After the Effective Time of the Merger, there
shall be no further transfer on the records of the Company or its transfer
agent of certificates representing shares of Company Common Stock and if such
certificates are presented to the Company for transfer, they shall be cancelled
against delivery of certificates for Parent Common Stock as hereinabove
provided. If any certificate for such Parent Common Stock is to be issued in a
name other than that in which the certificate for Company Common Stock
surrendered for exchange is registered, it shall be a condition of such
exchange that the certificate so surrendered shall be properly endorsed, with
signature guaranteed, or otherwise in proper form for transfer and that the
person requesting such exchange shall pay to Parent or its transfer agent any
transfer or other taxes or other costs required by reason of the issuance of
certificates for such Parent Common Stock in a name other than that of the
registered holder of the certificate surrendered, or establish to the
satisfaction of Parent or its transfer agent that all taxes have been paid.
Until surrendered as contemplated by this Section 2.04(b), each certificate for
shares of Company Common Stock shall be deemed at any time after the Effective
Time of the Merger to represent only the right to receive upon such surrender
the Merger Consideration as contemplated by Section 2.01.
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(d) Distributions with Respect to Unexchanged Shares. No dividends or
other distributions with respect to Parent Common Stock with a record date
after the Effective Time of the Merger shall be paid to the holder of any
unsurrendered certificate for shares of Company Common Stock with respect to
the shares of Parent Common Stock represented thereby until the surrender of
such certificate in accordance with this Article II.
(e) No Further Ownership Rights in Company Common Stock. All shares
of Parent Common Stock issued upon the surrender for exchange of certificates
representing shares of Company Common Stock in accordance with the terms of
this Article II shall be deemed to have been issued (and paid) in full
satisfaction of all rights pertaining to the shares of Company Common Stock
theretofore represented by such certificates.
(f) No Liability. None of Parent, Sub, the Company or the Exchange
Agent shall be liable to any person in respect of any shares of Parent Common
Stock (or dividends or distributions with respect thereto) delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar law. If any certificates representing shares of Company Common Stock
shall not have been surrendered prior to July 15, 2005 any such shares,
dividends or distributions in respect of such certificate shall, to the extent
permitted by applicable law, become the property of the Surviving Corporation,
free and clear of all claims or interests of any person previously entitled
thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Representations and Warranties of the Company. Except as set forth in the
company disclosure schedule delivered by the Company to Parent at the time of
execution of this agreement (the "company disclosure schedule"), the Company
represents and warrants to Parent and Sub as follows:
(a) Organization, Standing and Corporate Power. The Company is duly
organized, validly existing and in good standing under the laws of the State of
Florida and has the requisite corporate power and authority to carry on its
business as now being conducted. The Company is duly qualified or licensed to
do business and is in good standing in each jurisdiction in which the nature of
its business or the ownership or leasing of its properties makes such
qualification or licensing necessary, other than in such jurisdictions where
the failure to be so qualified or licensed (individually or in the aggregate)
would not have a material adverse effect (as defined in Section 9.02) with
respect to the Company.
(b) Subsidiaries. The Company does not own, directly or indirectly,
any capital stock or other ownership interest in any corporation, partnership,
business association, joint venture or other entity.
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(c) Capital Structure. The authorized capital stock of the Company
consists of Twenty Million (20,000,000) shares of Company Common Stock. There
are Eleven Million Four Hundred Sixty-six Thousand, Six Hundred Sixty-six
(11,466,666) common shares of Common Stock outstanding. Except as set forth
above, no shares of capital stock or other equity securities of the Company
are issued, reserved for issuance or outstanding. All outstanding shares of
capital stock of the Company are duly authorized, validly issued, fully paid
and nonassessable and not subject to preemptive rights. There are no
outstanding bonds, debentures, notes or other indebtedness or other securities
of the Company having the right to vote (or convertible into, or exchangeable
for, securities having the right to vote) on any matters on which shareholders
of the Company may vote. The Company Disclosure Schedule sets forth the
outstanding Capitalization of the Company. Except as set forth in the company
disclosure schedule, there are no outstanding securities, options, warrants,
calls, rights, commitments, agreements, arrangements or undertakings of any
kind to which the Company is a party or by which it is bound obligating the
Company to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock or other equity or voting securities of the
Company or obligating the Company to issue, grant, extend or enter into any
such security, option, warrant, call, right, commitment, agreement, arrangement
or undertaking. Other than the Company Stock Options and Company Warrants,
there are no outstanding contractual obligations, commitments, understandings
or arrangements of the Company to repurchase, redeem or otherwise acquire or
make any payment in respect of any shares of capital stock of the Company.
There are no agreements or arrangements pursuant to which the Company is or
could be required to register shares of Company Common Stock or other
securities under the Securities Act of 1933, as amended (the "Securities Act")
or other agreements or arrangements with or among any security holders of the
Company with respect to securities of the Company.
(d) Authority; Noncontravention. The Company has the requisite
corporate and other power and authority to enter into this Agreement and to
consummate the Merger. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of the Company. This Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms. The execution and
delivery of this Agreement do not, and the consummation of the transactions
contemplated by this Agreement and compliance with the provisions hereof will
not, conflict with, or result in any breach or violation of, or default (with
or without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of or "put" right with respect to any
obligation or to loss of a material benefit under, or result in the creation of
any lien upon any of the properties or assets of the Company under, (i) the
Articles of Incorporation or Bylaws of the Company, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to the Company,
its properties or assets, or (iii) subject to the governmental filings and
other matters referred to in the following sentence, any judgment, order,
decree, statute, law, ordinance, rule, regulation or arbitration award
applicable to the Company, its properties or assets. No consent, approval,
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order or authorization of, or registration, declaration or filing with, or
notice to, any federal, state or local government or any court, administrative
agency or commission or other governmental authority, agency, domestic or
foreign (a "Governmental Entity"), is required by or with respect to the
Company in connection with the execution and delivery of this Agreement by the
Company or the consummation by the Company of the transactions contemplated
hereby, except, with respect to this Agreement, for the filing of the Articles
of Merger with the Secretary of State of the states of Florida and Nevada.
(e) Absence of Certain Changes or Events. Since April 30, 2005, the
Company has conducted its business only in the ordinary course consistent with
past practice, and there is not and has not been: (i) any material adverse
change with respect to the Company; (ii) any condition, event or occurrence
which individually or in the aggregate could reasonably be expected to have a
material adverse effect or give rise to a material adverse change with respect
to the Company; (iii) any event which, if it had taken place following the
execution of this Agreement, would not have been permitted by Section 4.01
without prior consent of Parent; or (iv) any condition, event or occurrence
which could reasonably be expected to prevent, hinder or materially delay the
ability of the Company to consummate the transactions contemplated by this
Agreement.
(f) Litigation; Labor Matters; Compliance with Laws.
(i) There is no suit, action or proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting
the Company or any basis for any such suit, action, proceeding or investigation
that, individually or in the aggregate, could reasonably be expected to have a
material adverse effect with respect to the Company or prevent, hinder or
materially delay the ability of the Company to consummate the transactions
contemplated by this Agreement, nor is there any judgment, decree, injunction,
rule or order of any Governmental Entity or arbitrator outstanding against the
Company having, or which, insofar as reasonably could be foreseen by the
Company, in the future could have, any such effect.
(ii) The Company is not a party to, or bound by, any
collective bargaining agreement, contract or other agreement or understanding
with a labor union or labor organization, nor is it the subject of any
proceeding asserting that it has committed an unfair labor practice or seeking
to compel it to bargain with any labor organization as to wages or conditions
of employment nor is there any strike, work stoppage or other labor dispute
involving it pending or, to its knowledge, threatened, any of which could have
a material adverse effect with respect to the Company.
(iii) The conduct of the business of the Company complies in
all material respects, with all statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees or arbitration awards applicable thereto.
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(g) Benefit Plans. The Company is not a party to any collective
bargaining agreement or any bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase, phantom
stock, retirement, vacation, severance, disability, death benefit,
hospitalization, medical or other plan, arrangement or understanding (whether
or not legally binding) under which the Company currently has an obligation to
provide benefits to any current or former employee, officer or director of the
Company (collectively, "Benefit Plans").
(h) Certain Employee Payments. The Company is not a party to any
employment agreement which could result in the payment to any current, former
or future director or employee of the Company of any money or other property or
rights or accelerate or provide any other rights or benefits to any such
employee or director as a result of the transactions contemplated by this
Agreement, whether or not (i) such payment, acceleration or provision would
constitute a "parachute payment" (within the meaning of Section 280G of the
Code), or (ii) some other subsequent action or event would be required to cause
such payment, acceleration or provision to be triggered.
(i) Tax Returns and Tax Payments. The Company has timely filed all
Tax Returns required to be filed by it, has paid all Taxes shown thereon to be
due and has provided adequate reserves in its financial statements for any
Taxes that have not been paid, whether or not shown as being due on any
returns. No material claim for unpaid Taxes has been made or become a lien
against the property of the Company or is being asserted against the Company,
no audit of any Tax Return of the Company is being conducted by a tax
authority, and no extension of the statute of limitations on the assessment of
any Taxes has been granted by the Company and is currently in effect. As used
herein, "taxes" shall mean all taxes of any kind, including, without
limitation, those on or measured by or referred to as income, gross receipts,
sales, use, ad valorem, franchise, profits, license, withholding, payroll,
employment, excise, severance, stamp, occupation, premium value added, property
or windfall profits taxes, customs, duties or similar fees,, assessments or
charges of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts imposed by any governmental authority,
domestic or foreign. As used herein, "Tax Return" shall mean any return, report
or statement required to be filed with any governmental authority with respect
to Taxes.
(j) Environmental Matters. The Company is in compliance with all
applicable Environmental Laws. "Environmental Laws" means all applicable
federal, state and local statutes, rules, regulations, ordinances, orders,
decrees and common law relating in any manner to contamination, pollution or
protection of human health or the environment, and similar state laws.
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(k) Material Contract Defaults. The Company is not, or has not,
received any notice or has any knowledge that any other party is, in default in
any respect under any Material Contract; and there has not occurred any event
that with the lapse of time or the giving of notice or both would constitute
such a material default. For purposes of this Agreement, a Material Contract
means any contract, agreement or commitment that is effective as of the Closing
Date to which the Company is a party (i) with expected receipts or expenditures
in excess of $100,000, (ii) requiring the Company to indemnify any person,
(iii) granting exclusive rights to any party, (iv) evidencing indebtedness for
borrowed or loaned money in excess of $100,000 or more, including guarantees of
such indebtedness, or (v) which, if breached by the Company in such a manner
would (A) permit any other party to cancel or terminate the same (with or
without notice of passage of time) or (B) provide a basis for any other party
to claim money damages (either individually or in the aggregate with all other
such claims under that contract) from the Company or (C) give rise to a right
of acceleration of any material obligation or loss of any material benefit
under any such contract, agreement or commitment.
(l) Properties. The Company has good, clear and marketable title to
all the tangible properties and tangible assets reflected in the latest balance
sheet as being owned by the Company or acquired after the date thereof which
are, individually or in the aggregate, material to the Company's business
(except properties sold or otherwise disposed of since the date thereof in the
ordinary course of business), free and clear of all material liens.
(m) Trademarks and Related Contracts. To the knowledge of the Company:
(i) As used in this Agreement, the term "Trademarks" means
trademarks, service marks, trade names, Internet domain names, designs,
slogans, and general intangibles of like nature; the term "Trade Secrets" means
technology; trade secrets and other confidential information, know-how,
proprietary processes, formulae, algorithms, models, and methodologies; the
term "Intellectual Property" means patents, copyrights, Trademarks,
applications for any of the foregoing, and Trade Secrets; the term "Company
License Agreements" means any license agreements granting any right to use or
practice any rights under any Intellectual Property (except for such agreements
for shrink-wrap or click wrap software or other off-the-shelf products that are
generally available for less than $25,000), and any written settlements
relating to any Intellectual Property, to which the Company is a party or
otherwise bound; and the term "Software" means any and all computer programs,
including any and all software implementations of algorithms, models and
methodologies, whether in source code or object code.
(ii) To the knowledge of the Company, none of the Company's
Intellectual Property, Software or Company License Agreements infringe upon the
rights of any third party that may give rise to a cause of action or claim
against the Company or its successors.
(n) Board Recommendation. The Board of Directors of the Company has
unanimously determined that the terms of the Merger are fair to and in the best
interests of the shareholders of the Company and recommended that the holders
of the shares of Company Common Stock approve the Merger.
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(o) Required Company Vote. The affirmative vote of a majority of the
shares of each of the Company Common Stock is the only vote of the holders of
any class or series of the Company's securities necessary to approve the Merger
(the "Company Shareholder Approval").
3.02 Representations and Warranties of Parent and Sub. Except as set forth in
the disclosure schedule delivered by Parent to the Company at the time of
execution of this Agreement (the "Parent Disclosure Schedule"), Xxxxxxxxx
Xxxxxxx Barrza, the Parent's sole director and officer, Parent and Sub
represent and warrant to the Company as follows:
(a) Organization, Standing and Corporate Power. Each of Parent, Sub
and the other Parent Subsidiaries (as defined in Section 3.02(b)) is (and at
Closing will be) duly organized, validly existing and in good standing under
the laws of the State of Nevada, and has the requisite corporate power and
authority to carry on its business as now being conducted. Each of Parent, Sub
and the other Parent Subsidiaries is duly qualified or licensed to do business
and is in good standing in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes such qualification
or licensing necessary, as set forth in the Parent Disclosure Schedule.
(b) Subsidiaries. The only direct or indirect subsidiaries of Parent
are listed in the Parent Disclosure Schedule (together with Sub, the "Parent
Subsidiaries"). All the outstanding shares of capital stock of each such
Parent Subsidiary which is a corporation have been validly issued and are fully
paid and nonassessable and, except as set forth in the Parent Disclosure
Schedule, are owned (of record and beneficially) by Parent, free and clear of
all Liens. Except for the capital stock of its subsidiaries, which are
corporations, Parent does not own, directly or indirectly, any capital stock or
other ownership interest in any corporation, partnership, business association,
joint venture or other entity.
(c) Capital Structure. The authorized capital stock of Parent
consists of 70,000,000 shares of Parent Common Stock, $0.001 par value, of
which 164,318 shares of Parent Common Stock are issued and outstanding and
another 1,000,000 shares of Parent Common Stock are issuable upon the
conversion of 49,250 preferred shares. There are no convertible notes,
options, warrants or other securities of Parent outstanding. Also authorized
are 5,000,000 shares of convertible
12
preferred shares, $0.001 par value, 49,250 preferred shares of which are issued
and outstanding, prior to the Merger. Except as set forth above, no shares of
capital stock or other equity securities of Parent are issued, reserved for
issuance or outstanding. All outstanding shares of capital stock of Parent
are, and all shares which may be issued pursuant to this Agreement will be,
when issued, duly authorized, validly issued, fully paid and nonassessable and,
not subject to preemptive rights, and issued in compliance with all applicable
state and federal laws concerning the issuance of securities. There are no
outstanding bonds, debentures, notes or other indebtedness or other securities
of Parent having the right to vote (or convertible into, or exchangeable for,
securities having the right to vote) on any matters on which shareholders of
Parent may vote. Except as set forth above, there are no outstanding
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which Parent or any of its
subsidiaries is a party or by which any of them is bound obligating Parent or
any its subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other equity
securities of Parent or any of its subsidiaries or obligating Parent or any of
its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of capital stock or other equity securities of Parent
or any of its subsidiaries or obligating Parent or any of its subsidiaries to
issue, grant, extend or enter into any such security, option, warrant, call,
right, commitment, agreement, arrangement or undertaking. There are no
outstanding contractual obligations, commitments, understandings or
arrangements of Parent or any of its subsidiaries to repurchase, redeem or
otherwise acquire or make any payment in respect of any shares of capital stock
of Parent or any of its subsidiaries. There are no agreements or arrangements
pursuant to which the Company is or could be required to register shares of
Company Common Stock or other securities under the Securities Act of 1933, as
amended (the "Securities Act") or other agreements or arrangements with or
among any security holders of the Company with respect to securities of the
Company. The capital stock of Sub consists of 75,000,000 shares of common
stock, $0.001 par value per share, 1,000 shares of which have been validly
issued, are fully paid and nonassessable, were issued in compliance with all
applicable state and federal laws concerning the issuance of securities, and
are owned by Parent, free and clear of any lien.
(d) Authority; Noncontravention. Parent and Sub have all requisite
corporate authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by Parent and Sub and the consummation by Parent and Sub of the
transactions contemplated by this Agreement have been approved by the board of
directors of Parent and Sub and at Closing, will have been duly authorized by
all necessary shareholder and other corporate action on the part of Parent and
Sub. This Agreement has been duly executed and delivered by and constitutes a
valid and binding obligation of each of Parent and Sub, enforceable against
each such party in accordance with its terms. The execution and delivery of
this Agreement do not, and the consummation of the transactions contemplated by
this Agreement and compliance with the provisions of this Agreement will not,
conflict with, or result in any breach or violation of, or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of or "put" right with respect to any
obligation or to loss of a material benefit under, or result in the creation of
any lien upon any of the properties or assets of Parent or any of its
subsidiaries under, (i) the articles of incorporation or bylaws of Parent or
Sub or the comparable charter or organizational documents of any other
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subsidiary of Parent, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise
or license applicable to Parent, Sub or any other subsidiary of Parent or their
respective properties or assets, or (iii) subject to the governmental filings
and other matters referred to in the following sentence, any judgment, order,
decree, statute, law, ordinance, rule, regulation or arbitration award
applicable to Parent, Sub or any other subsidiary of Parent or their respective
properties or assets. No consent, approval, order or authorization of, or
registration, declaration or filing with, or notice to, any Governmental Entity
is required by or with respect to Parent, Sub or any other subsidiary of Parent
in connection with the execution and delivery of this Agreement by Parent or
Sub or the consummation by Parent or Sub, as the case may be, of any of the
transactions contemplated by this Agreement, except for the filing of the
Articles of Merger with the Secretary of State of the states of Florida and
Nevada, and such other consents, approvals, orders, authorizations,
registrations, declarations, filings or notices as may be required under the
"blue sky" laws of various states.
(e) S.E.C. Documents; Undisclosed Liabilities. Parent has filed all
reports, schedules, forms, statements and other documents as required by the
Securities and Exchange Commission (the "S.E.C.") and Parent has delivered or
made available to the Company all reports, schedules, forms, statements and
other documents filed with the S.E.C. (collectively, and in each case including
all exhibits and schedules thereto and documents incorporated by reference
therein, the "Parent S.E.C. Documents"). As of their respective dates, the
Parent S.E.C. Documents complied in all material respects with the requirements
of the Securities Act or the Securities Exchange Act of 1934, as the case may
be, and the rules and regulations of the S.E.C. promulgated thereunder
applicable to such Parent S.E.C. documents, and none of the Parent S.E.C.
Documents (including any and all consolidated financial statements included
therein) as of such date contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. Except to the extent revised or superseded by
a subsequent filing with the S.E.C. (a copy of which has been provided to the
Company prior to the date of this Agreement), none of the Parent S.E.C.
Documents contains any untrue statement of a material fact or omits to state
any material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of Parent included in such Parent S.E.C. Documents comply
as to form in all material respects with applicable accounting requirements and
the published rules and regulations of the S.E.C. with respect thereto, have
been prepared in accordance with generally accepted accounting principles
(except, in the case of unaudited consolidated quarterly statements, as
permitted by Form 10-QSB of the S.E.C.) applied on a consistent basis during
14
the periods involved (except as may be indicated in the notes thereto) and
fairly present the consolidated financial position of Parent and its
consolidated subsidiaries as of the dates thereof and the consolidated results
of operations and changes in cash flows for the periods then ended (subject, in
the case of unaudited quarterly statements, to normal year-end audit
adjustments as determined by Parent's independent accountants). Except as set
forth in the Parent S.E.C. Documents, at the date of the most recent audited
financial statements of Parent included in the Parent S.E.C. Documents, neither
Parent nor any of its subsidiaries had, and since such date neither Parent nor
any of such subsidiaries has incurred, any liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise) which, individually
or in the aggregate, could reasonably be expected to have a material adverse
effect with respect to Parent.
(f) Absence of Certain Changes or Events. Except as disclosed in the
Parent S.E.C. Documents, since the date of the most recent financial statements
included in the Parent S.E.C. Documents, Parent has conducted its business only
in the ordinary course consistent with past practice in light of its current
business circumstances, and there is not and has not been: (i) any material
adverse change with respect to Parent; (ii) any condition, event or occurrence
which, individually or in the aggregate, could reasonably be expected to have a
material adverse effect or give rise to a material adverse change with respect
to Parent; (iii) any event which, if it had taken place following the execution
of this Agreement, would not have been permitted by Section 4.02 without the
prior consent of the Company; or (iv) any condition, event or occurrence which
could reasonably be expected to prevent, hinder or materially delay the ability
of Parent to consummate the transactions contemplated by this Agreement.
(g) Interim Operations of Sub. Sub was formed in March 2004 solely
for the purpose of engaging in the transactions contemplated hereby, has (and,
at closing will have) engaged in no other business activities and has (or will
have) conducted its operations only as contemplated hereby.
(h) Litigation; Labor Matters; Compliance with Laws.
There is no suit, action or proceeding or investigation
pending or, to the knowledge of Parent, threatened against or affecting Parent
or any basis for any such suit, action, proceeding or investigation that,
individually or in the aggregate, could reasonably be expected to have a
material adverse effect with respect to Parent or prevent, hinder or materially
delay the ability of Parent to consummate the transactions contemplated by this
Agreement, nor is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against Parent having, or which,
insofar as reasonably could be foreseen by Parent, in the future could have,
any such effect.
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(ii) Parent is not a party to, or bound by, any collective
bargaining agreement, contract or other agreement or understanding with a labor
union or labor organization, nor is it the subject of any proceeding asserting
that it has committed an unfair labor practice or seeking to compel it to
bargain with any labor organization as to wages or conditions of employment nor
is there any strike, work stoppage or other labor dispute involving it pending
or, to its knowledge, threatened, any of which could have a material adverse
effect with respect to Parent.
(iii) The conduct of the business of Parent complies with all
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees or
arbitration awards applicable thereto.
(i) Benefit Plans. Parent is not a party to any Benefit Plan under
which Parent currently has an obligation to provide benefits to any current or
former employee, officer or director of Parent.
(j) Certain Employee Payments. Parent is not a party to any employment
agreement which could result in the payment to any current, former or future
director or employee of Parent of any money or other property or rights or
accelerate or provide any other rights or benefits to any such employee or
director as a result of the transactions contemplated by this Agreement,
whether or not (i) such payment, acceleration or provision would constitute a
"parachute payment" (within the meaning of Section 280G of the Code), or (ii)
some other subsequent action or event would be required to cause such payment,
acceleration or provision to be triggered.
(k) Tax Returns and Tax Payments. Parent has timely filed all Tax
Returns required to be filed by it, has paid all Taxes shown thereon to be due
and has provided adequate reserves in its financial statements for any Taxes
that have not been paid, whether or not shown as being due on any returns. No
claim for unpaid Taxes has been made or become a lien against the property of
Parent or is being asserted against Parent, no audit of any Tax Return of
Parent is being conducted by a tax authority, and no extension of the statute
of limitations on the assessment of any Taxes has been granted by Parent and is
currently in effect.
(l) Environmental Matters. Parent is in compliance with all applicable
Environmental Laws.
(m) Material Contract Defaults. Parent is not, or has not, received
any notice or has any knowledge that any other party is, in default in any
respect under any Material Contract; and there has not occurred any event that
with the lapse of time or the giving of notice or both would constitute such a
material default. For purposes of this Agreement, a Material Contract means any
contract, agreement or commitment that is effective as of the Closing Date to
which Parent is a party (i) with expected receipts or expenditures in excess of
$10,000, (ii) requiring Parent to indemnify any person, (iii) granting
exclusive rights to any party, (iv) evidencing indebtedness for borrowed or
loaned money in excess of $10,000 or more, including guarantees of such
indebtedness, or (v) which, if breached by Parent in such a manner would (A)
permit any other party to cancel or terminate the same (with or without notice
16
of passage of time) or (B) provide a basis for any other party to claim money
damages (either individually or in the aggregate with all other such claims
under that contract) from Parent or (C) give rise to a right of acceleration of
any material obligation or loss of any material benefit under any such
contract, agreement or commitment.
(n) Properties. Parent has good, clear and marketable title to all the
tangible properties and tangible assets reflected in the latest balance sheet
as being owned by Parent or acquired after the date thereof which are,
individually or in the aggregate, material to Parent's business (except
properties sold or otherwise disposed of since the date thereof in the ordinary
course of business), free and clear of all material liens. The Parent is
currently leasing space at 0000 Xxxxxxx Xxxxx, Xxx Xxxxx, XX 00000. Upon
completion of this merger, Jagged Peak, Inc. will not be liable or responsible
for this lease as a condition of this Acquisition Agreement and Plan of Merger.
(o) Trademarks and Related Contracts.
(i) As used in this Agreement, the term "Parent License
Agreements" means any license agreements granting any right to use or practice
any rights under any Intellectual Property (except for such agreements for
shrink-wrap or click wrap software or other off-the-shelf products that are
generally available for less than $25,000), and any written settlements
relating to any Intellectual Property, to which Parent is a party or otherwise
bound.
(ii) To the knowledge of Xxxxxxxxx Xxxxxxx Barrza, the
Parent's sole director and officer, none of Parent's Intellectual Property,
Software or Parent License Agreements infringe upon the rights of any third
party that may give rise to a cause of action or claim against Parent or its
successors.
(p) Board Recommendation. The Board of Directors of Parent has
unanimously determined that the terms of the Merger are fair to and in the best
interests of the shareholders of Parent.
ARTICLE IV
COVENANTS RELATING TO
CONDUCT OF BUSINESS PRIOR TO MERGER
4.01 Conduct of Company and Parent. From the date of this Agreement and until
the Effective Time, or until the prior termination of this Agreement, Company
and Parent shall not, unless mutually agreed to in writing:
(a) engage in any transaction, except in the normal and ordinary
course of business, or create or suffer to exist any Lien or other encumbrance
upon any of their respective assets or which will not be discharged in full
prior to the Effective Time;
(b) sell, assign or otherwise transfer any of their assets, or cancel
or compromise any debts or claims relating to their assets, other than for fair
value, in the ordinary course of business, and consistent with past practice;
(c) fail to use reasonable efforts to preserve intact their present
business organizations, keep available the services of their employees and
preserve its material relationships with customers, suppliers, licensors,
licensees, distributors and others, to the end that its good will and on-going
business not be impaired prior to the Effective Time;
17
(d) except for matters related to complaints by former employees
related to wages, suffer or permit any material adverse change to occur with
respect to Company and Parent or their business or assets; or
(e) make any material change with respect to their business in
accounting or bookkeeping methods, principles or practices, except as required
by GAAP.
(f) Parent shall timely comply with all filing and other requirements
of the S.E.C. applicable to it as a result of its registration under the
Securities Act (and all Pink Sheets/OTCBB requirements).
ARTICLE V
ADDITIONAL AGREEMENTS
5.01 Shareholders Meetings. The Company will, as promptly as practicable
following the execution of this Agreement, call, give notice of, convene and
hold a meeting of its shareholders (the "Shareholders Meeting") for the purpose
of approving this Agreement and the transactions contemplated by this Agreement
or obtain the unanimous written consent of its shareholders for the same
aforementioned purpose.
5.02 Access to Information; Confidentiality.
(a) The Company shall, and shall cause its officers, employees,
counsel, financial advisors and other representatives to, afford to Parent and
its representatives reasonable access during normal business hours during the
period prior to the Effective Time of the Merger to its properties, books,
contracts, commitments, personnel and records and, during such period, the
Company shall, and shall cause its officers, employees and representatives to,
furnish promptly to Parent all information concerning its business, properties,
financial condition, operations and personnel as such other party may from time
to time reasonably request. For the purposes of determining the accuracy of the
representations and warranties of the Company set forth herein and compliance
by the Company of its obligations hereunder, during the period prior to the
Effective Time of the Merger, Parent shall provide the Company and its
representatives with reasonable access during normal business hours to its
properties, books, contracts, commitments, personnel and records as may be
necessary to enable the Company to confirm the accuracy of the representations
and warranties of Parent set forth herein and compliance by Parent and Sub of
their obligations hereunder, and, during such period, Parent shall, and shall
cause its subsidiaries, officers, employees and representatives to, furnish
promptly to the Company upon its request (i) a copy of each report, schedule,
registration statement and other document filed by it during such period
pursuant to the requirements of federal or state securities laws and (ii) all
other information concerning its business, properties, financial condition,
operations and personnel as such other party may from time to time reasonably
request. Except as required by law, each of the Company, Sub, and Parent will
hold, and will cause its respective directors, officers, employees,
accountants, counsel, financial advisors and other representatives and
affiliates to hold, any nonpublic information in confidence.
18
(b) No investigation pursuant to this Section 5.02 shall affect any
representations or warranties of the parties herein or the conditions to the
obligations of the parties hereto.
5.03 Best Efforts. Upon the terms and subject to the conditions set forth in
this Agreement, each of the parties agrees to use its best efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to assist
and cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger and the other transactions contemplated by this
Agreement. Parent, Sub and the Company will use their best efforts and
cooperate with one another (i) in promptly determining whether any filings are
required to be made or consents, approvals, waivers, permits or authorizations
are required to be obtained (or, which if not obtained, would result in an
event of default, termination or acceleration of any agreement or any put right
under any agreement) under any applicable law or regulation or from any
governmental authorities or third parties, including parties to loan agreements
or other debt instruments and including such consents, approvals, waivers,
permits or authorizations as may be required to transfer the assets and related
liabilities of the Company to the Surviving Corporation in the Merger, in
connection with the transactions contemplated by this Agreement, and (ii) in
promptly making any such filings, in furnishing information required in
connection therewith and in timely seeking to obtain any such consents,
approvals, permits or authorizations. Parent and the Company shall mutually
cooperate in order to facilitate the achievement of the benefits reasonably
anticipated from the Merger.
5.04 Public Announcements. Parent and Sub, on the one hand, and the Company,
on the other hand, will consult with each other before issuing, and provide
each other the opportunity to review and comment upon, any press release or
other public statements with respect to the transactions contemplated by this
Agreement and shall not issue any such press release or make any such public
statement prior to such consultation, except as may be required by applicable
law or court process. The parties agree that the initial press release or
releases to be issued with respect to the transactions contemplated by this
Agreement shall be mutually agreed upon prior to the issuance thereof.
Notwithstanding the foregoing, Company may disclose the contemplated Merger in
letters to the Company's optionees for purposes of fulfilling the Company's
obligations under the Company Option Plan to the said optionees.
5.05 Expenses. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expenses.
5.06 Directorships. Upon the Effective Time of the Merger, all officers and
directors of Parent shall have resigned and Parent shall have taken all action
to cause Xxxx X. Xxxxxxxxxx, Xxxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxxxx and
Primrose X. Xxxxxxxxxx to be elected to its Board of Directors and its officers
to consist of the following: Xxxx X. Xxxxxxxxxx, Xxxxxx X. Xxxxxxx,
Xxxxxxx X. Xxxxxxxx and Primrose X. Xxxxxxxxxx.
19
5.07 No Solicitation. Except as previously agreed to in writing by the other
party, neither Company or Parent shall authorize or permit any of its officers,
directors, agents, representatives, or advisors to (a) solicit, initiate or
encourage or take any action to facilitate the submission of inquiries,
proposals or offers from any person relating to any matter concerning any
merger, consolidation, business combination, recapitalization or similar
transaction involving Company or Parent, respectively, other than the
transaction contemplated by this Agreement or any other transaction the
consummation of which would or could reasonably be expected to impede,
interfere with, prevent or delay the Merger or which would or could be expected
to dilute the benefits to the Company of the transactions contemplated hereby.
Company or Parent will immediately cease and cause to be terminated any
existing activities, discussions and negotiations with any parties conducted
heretofore with respect to any of the foregoing.
5.08 Business Matters. Upon the Effective Time of the Merger, the Parent
agrees to divest of all of Absolute Glass' existing business, this includes
exchanging its outstanding debts for the assets of the Company. Management has
obtained agreements from all of its debt holders to exchange their debt for the
remaining assets in the Parent. This exchange will take place at the Effective
Time of the Merger.
ARTICLE VI
CONDITIONS PRECEDENT
6.01 Conditions to Each Party's Obligation to Effect the Merger. The respective
obligation of each party to effect the Merger is subject to the satisfaction or
waiver on or prior to the Closing Date of the following conditions:
(a) Shareholder Approval. The Company, Board and Shareholder Approval
shall have been obtained.
(b) OTCBB Clearance. The shares of Parent Common Stock shall have been
cleared for quotation on the Over-the-Counter Bulletin Board.
(c) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect.
(d) No Dissent. Holders of no more than five percent (5%) of the
Company's Common Stock shall have dissented to the Merger.
6.02 Conditions to Obligations of Parent and Sub. The obligations of Parent and
Sub to effect the Merger are further subject to the following conditions:
(a) Representations and Warranties. The representations and warranties
of the Company set forth in this Agreement shall be true and correct in all
material respects, in each case as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date. Parent shall have
received a certificate signed on behalf of the Company by the president of the
Company to such effect.
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(b) Performance of Obligations of the Company. The Company shall have
performed the obligations required to be performed by it under this Agreement
at or prior to the Closing Date (except for such failures to perform as have
not had or could not reasonably be expected, either individually or in the
aggregate, to have a material adverse effect with respect to the Company or
adversely affect the ability of the Company to consummate the transactions
herein contemplated or perform its obligations hereunder), and Parent shall
have received a certificate signed on behalf of the Company by the president of
the Company to such effect.
(c) Consents, etc. Parent shall have received evidence, in form and
substance reasonably satisfactory to it, that such licenses, permits, consents,
approvals, authorizations, qualifications and orders of governmental
authorities and other third parties as necessary in connection with the
transactions contemplated hereby have been obtained.
(d) No Litigation. There shall not be pending or threatened by any
Governmental Entity any suit, action or proceeding (or by any other person any
suit, action or proceeding which has a reasonable likelihood of success), (i)
challenging or seeking to restrain or prohibit the consummation of the Merger
or any of the other transactions contemplated by this Agreement or seeking to
obtain from Parent or any of its subsidiaries any damages that are material in
relation to Parent and its subsidiaries taken as a whole, (ii) seeking to
prohibit or limit the ownership or operation by the Company, Parent or any of
its subsidiaries of any material portion of the business or assets of the
Company, Parent or any of its subsidiaries, or to dispose of or hold separate
any material portion of the business or assets of the Company, Parent or any of
its subsidiaries, as a result of the Merger or any of the other transactions
contemplated by this Agreement, (iii) seeking to impose limitations on the
ability of Parent or Sub to acquire or hold, or exercise full rights of
ownership of, any shares of Company Common Stock or Common Stock of the
Surviving Corporation, including, without limitation, the right to vote the
Company Common Stock or Common Stock of the Surviving Corporation on all
matters properly presented to the shareholders of the Company or the Surviving
Corporation, respectively, or (iv) seeking to prohibit Parent or any of its
subsidiaries from effectively controlling in any material respect the business
or operations of the Company.
6.03 Conditions to Obligation of the Company. The obligation of the Company to
effect the Merger is further subject to the following conditions:
(a) Representations and Warranties. The representations and
warranties of Parent and Sub set forth in this Agreement shall be true and
correct in all material respects, in each case as of the date of this Agreement
and as of the Closing Date as though made on and as of the Closing Date. The
Company shall have received a certificate signed on behalf of Parent by the
president of Parent to such effect.
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(b) Performance of Obligations of Parent and Sub. Parent and Sub
shall have performed the obligations required to be performed by them under
this Agreement at or prior to the Closing Date (except for such failures to
perform as have not had or could not reasonably be expected, either
individually or in the aggregate, to have a material adverse effect with
respect to Parent or adversely affect the ability of Parent to consummate the
transactions herein contemplated or perform its obligations hereunder), and the
Company shall have received a certificate signed on behalf of Parent by the
president of Parent to such effect.
(c) No Litigation. There shall not be pending or threatened any suit,
action or proceeding before any court, Governmental Entity or authority (i)
pertaining to the transactions contemplated by this Agreement or (ii) seeking
to prohibit or limit the ownership or operation by the Company, Parent or any
of its subsidiaries, or to dispose of or hold separate any material portion of
the business or assets of the Company, Parent or of its any subsidiaries.
(d) Consents, etc. Company shall have received evidence, in form and
substance reasonably satisfactory to it, that such licenses, permits, consents,
approvals, authorizations, qualifications and orders of governmental
authorities and other third parties as necessary in connection with the
transactions contemplated hereby have been obtained.
(e) Filing of Merger Agreement. Parent shall have filed or will
promptly file after the Closing Date in the office of the Secretary of State or
other office of each jurisdiction in which such filings are required for the
Merger to become effective.
(f) Registrations. Parent shall deliver to the Company written
resignations of all of the officers of the Parent and evidence of election of
those new directors and officers as further described in Section 5.06 herein.
(g) Cancellation Agreement. Parent shall deliver to the Company the
executed share Cancellation Agreement attached hereto as Exhibit D.
(h) Legal Opinion. The Company shall have received a legal opinion
from counsel to Parent and Sub in form and substance satisfactory to the
Company and its counsel.
(i) Schedule 14F. Parent shall file a Schedule 14F with the SEC on the
closing date.
(j) Preferred Stock Conversion. All preferred stock, if any, of Parent
shall have been converted into common stock of Parent and/or cancelled;
(k) Option Exercise. All options, warrants and other rights to acquire
common stock of Parent shall have been exercised and/or cancelled;
(l) Dissenters Notices. Company shall not have received dissenters
notices from its shareholders holding in the aggregate more than 2% of its
outstanding common stock indicating their intent to dissent from the Merger;
(m) Consent of Lender. Company shall have received the consent of JP
Lending, Inc. and any other lender to Company to the Merger; and
(n) Disposition of Existing Business. The Parent and Sub shall have
fully disposed of its existing business, including all liabilities related
thereto, pursuant to the terms hereof.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.01 Termination. This Agreement may be terminated and abandoned at any time
prior to the Effective Time of the Merger:
(a) by mutual written consent of Parent and the Company;
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(b) by either Parent or the Company if any Governmental Entity shall
have issued an order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the Merger and such order,
decree, ruling or other action shall have become final and nonappealable;
(c) by either Parent or the Company if the Merger shall not have been
consummated on or before July 10, 2005 (other than as a result of the
failure of the party seeking to terminate this Agreement to perform its
obligations under this Agreement required to be performed at or prior to the
Effective Time of the Merger);
(d) by Parent, if a material adverse change shall have occurred
relative to the Company;
(e) by Parent, if the Company willfully fails to perform in any
material respect any of its material obligations under this Agreement;
(f) by the Company, if a material adverse change shall have occurred
relative to Parent; or
(g) by the Company, if Parent or Sub willfully fails to perform in any
material respect any of their respective obligations under this Agreement.
7.02 Effect of Termination. In the event of termination of this Agreement by
either the Company or Parent as provided in Section 7.01, this Agreement shall
forthwith become void and have no effect, without any liability or obligation
on the part of Parent, Sub or the Company, other than the provisions of the
last sentence of Section 5.02(a) and this Section 7.02. Nothing contained in
this Section shall relieve any party for any breach of the representations,
warranties, covenants or agreements set forth in this Agreement.
7.03 Amendment. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties.
7.04 Extension; Waiver. Subject to Section 7.01(c), at any time prior to the
Effective Time of the Merger, the parties may (a) extend the time for the
performance of any of the obligations or other acts of the other parties, (b)
waive any inaccuracies in the representations and warranties contained in this
Agreement or in any document delivered pursuant to this Agreement, or (c) waive
compliance with any of the agreements or conditions contained in this
Agreement. Any agreement on the part of a party to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. The failure of any party to this Agreement to assert any
of its rights under this Agreement or otherwise shall not constitute a waiver
of such rights.
7.05 Procedure for Termination, Amendment, Extension or Waiver. A termination
of this Agreement pursuant to Section 7.01, an amendment of this Agreement
pursuant to Section 7.03 or an extension or waiver of this Agreement pursuant
to Section 7.04 shall, in order to be effective, require in the case of Parent,
Sub or the Company, action by its Board of Directors.
23
7.06 Return of Documents. In the event of termination of this Agreement for
any reason, Parent and Company will return to the other party all of the other
party's documents, work papers, and other materials (including copies) relating
to the transactions contemplated in this Agreement, whether obtained before or
after execution of this Agreement. Parent and Company will not use any
information so obtained from the other party for any purpose and will take all
reasonable steps to have such other party's information kept confidential.
ARTICLE VIII
INDEMNIFICATION AND RELATED MATTERS
8.01 Survival of Representations and Warranties. The representations and
warranties of the Company in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time of the Merger for
a period of 30 days. The representations and warranties of Parent and Sub
in this Agreement or in any instrument delivered pursuant to this Agreement
shall survive the Effective Time of the Merger for a period of one year.
8.02 Indemnification.
(a) Irrespective of any due diligence investigation conducted by
Company with regard the transactions contemplated hereby, the Parent shall
indemnify and hold the Company and each of its officers and directors (the
"Company Representatives") harmless from and against any and all liabilities,
obligations, damages, losses, deficiencies, costs, penalties, interest and
expenses (collectively, "Losses") arising out of, based upon, attributable to
or resulting from any breach of a representation, warranty or covenant made by
Parent as set forth herein.
(b) Notwithstanding anything to the contrary contained in this
Agreement, in the absence of any fraud or intentional misconduct on the part of
the Parent or Sub, the sole remedy of the Company or the Company
Representatives pursuant to this Section 8.02 shall be the offset of such
Losses against shares held in the Parent Escrow Deposit as further described in
the Escrow Agreement and in Section 8.04 herein.
(c) The Company shall indemnify and hold the Parent and each of its
officers and directors (the "Parent Representatives") harmless from and against
any and all Losses arising out of, based upon, attributable to or resulting
from any breach of a representation, warranty or covenant made by the Company
as set forth herein.
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8.03 Notice of Indemnification. In the event any proceeding shall be
threatened or instituted or any claim or demand shall be asserted in respect of
which payment may be sought by the Parent or any Parent Representative or by
the Company or any Company Representative, against the other, as the case may
be (each an "Indemnitee"), under the provisions of this Article VIII (an
"Indemnity Claim"), the Indemnitee shall promptly cause written notice of the
assertion of any such Claim of which it has knowledge which is covered by this
indemnity to be forwarded to the Parent Representative, who shall be Xxxxxxxxx
Xxxxxxx Barrza, or the Company Representative, who shall be Xxxx Xxxxxxxxxx, as
the case may be, and the Escrow Agent. Any notice of an Indemnity Claim by
reason of any of the representations, warranties or covenants contained in this
Agreement shall state specifically the representation, warranty or covenant
with respect to which the Indemnity Claim is made, the facts giving rise to an
alleged basis for the Claim, and the amount of the liability asserted against
the Indemnitor by reason of the Indemnity Claim. Within ten (10) days of the
receipt of such written notice, the Parent Representative or the Company, as
the case may be, shall notify the Indemnitee in writing of its intent to
contest the indemnification obligation (a "Contest") or to accept liability
hereunder.
If the Parent Representative accepts liability, the Parent Representative will
deliver a Notice to Escrow Agent that there is a determination of liability
under Section 8.03 and the Escrow Agent shall be instructed to adjust the
Parent Escrow Deposit as provided in Section 8.04. If the Parent Representative
does not respond to the Indemnity Claim within ten (10) days, the Parent
Representative will be deemed to accept liability to the extent the amount of
the Indemnity Claim is covered by the Parent Escrow Deposit. In such event, the
Indemnitee will deliver a Notice to the Escrow Agent that there is a
determination of liability under this Section 8.03 and the Escrow Agent shall
be instructed to adjust the Parent Escrow Deposit as set forth in Section 8.04.
In the event of a Contest, or if the amount of the Company's Indemnity Claim
exceeds the Parent Escrow Deposit, within ten (10) days of the receipt of the
written notice thereof, the parties will select arbitrators and submit the
dispute to binding arbitration in Florida. The arbitrators shall be selected
by the mutual agreement of the parties. If the parties can not agree on the
arbitrator, each may select one arbitrator and the two designated arbitrators
shall select the third arbitrator. If the third arbitrator can not be agreed
upon, the Federal District Court for the Middle District of Florida shall
select the third arbitrator. A decision by the individual arbitrator or a
majority decision by the three arbitrators shall be final and binding upon
the parties. Such arbitration shall follow the rules of the American
Arbitration
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Association and must be resolved by the arbitrators within thirty (30) days
after the matter is submitted to arbitration. If the arbitration is ruled
favorably for the Company so that there is a determination of a Loss, the
Indemnitee will deliver a Notice to Escrow Agent that there is a determination
of liability pursuant to this Section 8.03 and the Escrow Agent shall be
instructed to adjust the Parent Escrow Deposit as provided in Section 8.04.
8.04 Parent Escrow Deposit. Parent shall deposit 200,000 shares of Parent
Common Stock with the Escrow Agent (the "Parent Escrow Deposit"). Indemnity
Claims of the Company shall be satisfied from the Parent Escrow Deposit on the
basis of one share of Parent Common Stock for each $0.20 of Losses. Once the
Parent Escrow Deposit is depleted, in the absence of fraud or intentional
misconduct, Parent and Sub shall have no further liability to the Company. If,
on the first anniversary of the Closing, there are no outstanding Indemnity
Claims against the Parent or Sub, any shares of Parent Common Stock remaining
in escrow shall be delivered to the Company's transfer agent for cancellation.
If, on the first anniversary of the Closing, there remain unresolved or
unsatisfied Indemnity Claims against the Parent or Sub, the Escrow Agent shall
continue to hold the remaining shares in escrow until the earlier of the
resolution of such Indemnity Claims or the second anniversary of the Closing.
If any Indemnity Claims remain unresolved as of the second anniversary of the
Closing, the Escrow Agent may deliver any remaining shares held in escrow into
the registry of the District Court for the Middle District of Florida or other
court of competent jurisdiction.
ARTICLE IX
GENERAL PROVISIONS
9.01 Notices. All notices, requests, claims, demands and other communications
under this Agreement shall be in writing and shall be deemed given if delivered
personally or sent by facsimile, electronic mail, or overnight courier
(providing proof of delivery) to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice):
(a) if to Parent or Parent Representative, to:
Absolute Glass Protection, Inc.
0000 Xxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
with a copy to:
Law Offices of Xxxxxx X. Xxxx, LTD.
000 Xxxxx Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Fax: (000) 000-0000
(b) if to the Company, to:
Jagged Peak, Inc.
0000 X. Xxxxx Xxxxx Xx. Xxxxx 0000
Xxxxx, XX 00000
Attention: Xxxx Xxxxxxxxxx
with a copy to:
Xxxxxxxx, Loop & Xxxxxxxx, LLP
000 Xxxx Xxxxxxx Xxxx., Xxxxx 0000
Xxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx
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9.02 Definitions. For purposes of this Agreement:
(a) an "affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person;
(b) "material adverse change" or "material adverse effect" means, when
used in connection with the Company or Parent, any change or effect that either
individually or in the aggregate with all other such changes or effects is
materially adverse to the business, assets, properties, condition (financial or
otherwise) or results of operations of such party and its subsidiaries taken as
a whole (after giving effect in the case of Parent to the consummation of the
Merger);
(c) "person" means an individual, corporation, partnership, joint
venture, association, trust, unincorporated organization or other entity; and
(d) a "subsidiary" of any person means another person, an amount of
the voting securities, other voting ownership or voting partnership interests
of which is sufficient to elect at least a majority of its board of Directors
or other governing body (or, if there are no such voting interests, fifty
percent (50%) or more of the equity interests of which) is owned directly or
indirectly by such first person.
9.03 Interpretation. When a reference is made in this Agreement to a Section,
Exhibit or Schedule, such reference shall be to a Section of, or an Exhibit or
Schedule to, this Agreement unless otherwise indicated. 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. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation".
9.04 Entire Agreement; No Third-Party Beneficiaries. This Agreement and the
other agreements referred to herein constitute the entire agreement, and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter of this Agreement. This
Agreement is not intended to confer upon any person other than the parties any
rights or remedies.
9.05 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Florida, regardless of the laws
that might otherwise govern under applicable principles of conflicts of laws
thereof.
9.06 Assignment. Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned, in whole or in part, by
operation of law or otherwise by any of the parties without the prior written
consent of the other parties. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of, and be enforceable by, the
parties and their respective successors and assigns.
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9.07 Enforcement. The parties agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed In
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Florida, this being in addition to any other remedy
to which they are entitled at law or in equity. In addition, each of the
parties hereto (a) consents to submit itself to the personal jurisdiction of
the Thirteenth Judicial Circuit Court, County of Hillsborough, State of Florida
in the event any dispute arises out of this Agreement or any of the
transactions contemplated by this Agreement to the extent such courts would
have subject matter jurisdiction with respect to such dispute, (b) agrees that
it will not attempt to deny or defeat such personal jurisdiction or venue by
motion or other request for leave from any such court, and (c) agrees that it
will not bring any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any state court other than such court.
9.08 Severability. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
9.09 Counterparts. This Agreement may be executed in one or more identical
counterparts, all of which shall be considered one and the same instrument and
shall become effective when one or more such counterparts shall have been
executed by each of the parties and delivered to the other parties.
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IN WITNESS WHEREOF, the undersigned have caused their duly authorized
officers (or representatives in the case of Sub) to execute this Agreement as
of the date first above written.
ABSOLUTE GLASS PROTECTION, INC.
By: /s/ Xxxxxxxxx Xxxxxxx Barrza
-----------------------------------
Name: Xxxxxxxxx Xxxxxxx Barrza
Title: President
Attest:
By: /s/ Xxxxxxxxx Xxxxxxx Barrza
-----------------------------------
Name: Xxxxxxxxx Xxxxxxx Barrza
Title: Secretary
ABSOLUTE GLASS PROTECTION
ACQUISITION CORPORATION
By: /s/ Xxxxxxxxx Xxxxxxx Barrza
-----------------------------------
Name: Xxxxxxxxx Xxxxxxx Barrza
Title: President
Attest:
By: /s/ Xxxxxxxxx Xxxxxxx Barrza
-----------------------------------
Name: Xxxxxxxxx Xxxxxxx Barrza
Title: Secretary
JAGGED PEAK, INC.
By: /s/ Xxxx Xxxxxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxxxxx
Title: Chief Executive Officer
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