AGREEMENT AND PLAN OF MERGER
Exhibit 10.3: Merger Agreement
AGREEMENT
AND PLAN OF MERGER
by
and among
SARS
Corporation,
Environmental
Insulation, Inc.
EI
Acquisition Corp.,
ESDD,
LLC,
ESDD
Acquisition Corp.,
Alternatech,
Inc.,
Alternatech
Acquisition Corp.,
Swank
Enterprises, Inc. d/b/a Art and Print, Inc.,
A&P
Acquisition Corp.,
Associated
Mechanical, Inc.,
AMI
Acquisition Corp.,
X.X.
Power Plumbing & Heating Company,
and
RJP
Acquisition Corp.
Dated
as of May 22, 2009
AGREEMENT
AND PLAN OF MERGER
This Agreement and Plan of Merger (the “Merger Agreement”) dated as of May
21, 2009, by and among SARS Corporation (“SARS”), a corporation formed
under the laws of the State of Nevada, and/or its assignees, Environmental
Insulation, LLC (“EI”),
a limited liability company formed under the laws of Nevada, EI Acquisition
Corp. (the “EI Merger
Sub”), a corporation to be formed under the laws of the State of Nevada
and a wholly owned subsidiary of SARS, ESDD, LLC (“ESDD”), a limited liability
company formed under the laws of the State of Tennessee, ESDD Acquisition Corp.,
a corporation to be formed under the laws of the State of Nevada and a wholly
owned subsidiary of SARS (the “ESDD Merger Sub”),
Alternatech, Inc. (“Alternatech”), a corporation
formed under the laws of the State of Illinois, Alternatech Acquisition Corp.
(the “Alternatech Merger
Sub”), a corporation to be formed under the laws of the State of Nevada
and a wholly owned subsidiary of SARS, Associated Mechanical, Inc. (“AMI”), a corporation formed
under the laws of the State of Illinois, AMI Acquisition Corp. (the “AMI Merger Sub”), a
corporation to be formed under the laws of the State of Nevada and a wholly
owned subsidiary of SARS, Swank Enterprises, Inc. (“SEI”) d/b/a Art and Print,
Inc. (“A&P”), a
corporation formed under the laws of the State of Illinois, A&P Acquisition
Corp. (the “A&P Merger
Sub”), a corporation to be formed under the laws of the State of Nevada
and a wholly owned subsidiary of SARS and X.X. Power Plumbing &
Heating Company (“RJP”),
a corporation formed under the laws of the State of Illinois, RJP Acquisition
Corp. (the “RJP Merger Sub”), a corporation to
be formed under the laws of the State of Nevada and a wholly owned subsidiary of
SARS. Hereinafter, SARS, EI, EI the Merger Sub, ESDD, the ESDD Merger
Sub, Alternatech, the Alternatech Merger Sub, AMI, the AMI Merger Sub, A&P,
the A&P Merger Sub, RJP and the RJP Merger Sub, are individually referred to
herein as a “Party” and
collectively as the “Parties.”
PREAMBLE
WHEREAS, SARS proposes to
acquire EI, ESDD, Alternatech, AMI, A&P, and RJP, pursuant to a merger
transaction whereby, pursuant to the terms and subject to the conditions of this
Merger Agreement, EI, ESDD, Alternatech, AMI, A&P, RJP, shall
become wholly owned subsidiaries of SARS through the merger of the EI Merger Sub
with and into EI, through the merger of the ESDD Merger Sub with and into ESDD,
through the merger of the Alternatech Merger Sub with and into Alternatech,
through the merger of the AMI Merger Sub with and into AMI, through the merger
of the A&P Merger Sub with and into A&P and through the merger of the
RJP Merger Sub with and into RJP (the “Merger”). Hereinafter,
EI, ESDD, Alternatech, AMI, A&P and RJP shall collectively be referred to in
this Merger Agreement as the “Acquisition Entities,” as if
they were the same entity, and for purposes this Merger Agreement, be deemed to
be the same entity; and the EI Merger Sub, the ESDD Merger Sub, the Alternatech
Merger Sub, the AMI Merger Sub, the A&P Merger Sub and the RJP Merger Sub
shall be collectively referred to in this Merger Agreement as the “Merger Subs,” as if they were
the same entity, and for purposes of this Merger Agreement, be deemed to be the
same entity;
WHEREAS, the Board of
Directors of SARS has (i) determined that the Merger with the Acquisition
Entities is advisable and in the best interests of SARS and of SARS’
stockholders and presents an opportunity to achieve long-term strategic and
financial benefits; (ii) approved the Merger and this Merger Agreement; and
(iii) determined to recommend that SARS approve the Merger and approve and adopt
this Merger Agreement;
WHEREAS, the respective Boards
of Directors of the Acquisition Entities have (i) determined that a Merger with
SARS is advisable and in the best interests of the Acquisition Entities and
their stockholders and presents an opportunity to achieve long-term strategic
and financial benefits; (ii) approved the Merger and this Merger Agreement; and
(iii) determined to recommend that the stockholders of the Acquisition Entities
to approve the Merger and approve and adopt this Merger Agreement;
and
WHEREAS, in the Merger, one
hundred percent (100%) of all issued and outstanding shares of capital stock and
member units of the Acquisition entities shall be exchanged (the “Share Exchange”) for Two
Million Five Hundred U.S. Dollars ($2,500,000) and thirty million (30,000,000)
shares of restricted common stock of SARS (the “Merger Shares”), which Merger
Shares, when issued pursuant to the Share Exchange, shall represent
approximately, but no less than, seventy five percent (75%) of the
voting power of SARS after the Closing.
NOW, THEREFORE, in
consideration of the premises and the mutual covenants, representations and
warranties contained herein, the Parties, intending to be legally bound, hereby
agree as follows:
CERTAIN
DEFINITIONS
As used in this Merger Agreement, the
following terms shall have the meanings set forth below:
“Applicable Law” means any
domestic or foreign law, statute, regulation, rule, policy, guideline or
ordinance applicable to the businesses of the Parties or the
Merger.
“Knowledge” means, in the case
of SARS and the Acquisition Entities, a particular fact or other matter of which
its Chief Executive Officer or the Chief Financial Officer or Managers is
actually aware or which a prudent individual serving in such capacity could be
expected to discover or otherwise become aware of in the course of conducting a
diligent review or investigation of the
corporation and its business and affairs.
“Lien” means, with respect to
any property or asset, any mortgage, lien, pledge, charge, security interest,
claim, encumbrance, royalty interest, any other adverse claim of any kind in
respect of such property or asset, or any other restrictions or limitations of
any nature whatsoever.
“Material Adverse Effect” with
respect to any entity or group of entities means any event, change or effect
that has or would have a materially adverse effect on the assets, liabilities,
business, prospects, condition (financial, or otherwise), or results of
operations of such entity or group of entities, taken as a whole.
“Person” means any individual,
corporation, partnership, trust or unincorporated organization or a government
or any agency or political subdivision thereof.
“Surviving Entity” or “Surviving Entities” shall mean
the Acquisition Entities as the surviving entity or surviving entities in the
Merger as provided in Section 1.05.
“Tax” (and, with correlative
meaning, “Taxes” and
“Taxable”)
means:
(i) any income, alternative or add-on
minimum tax, gross receipts tax, sales tax, use tax, ad valorem tax, transfer
tax, franchise tax, profits tax, license tax, withholding tax, payroll tax,
employment tax, excise tax, severance tax, stamp tax, occupation tax, property
tax, environmental or windfall profit tax, custom, duty or other tax, impost,
levy, governmental fee or other like assessment or charge of any kind whatsoever
together with any interest or any penalty, addition to tax or additional amount
imposed with respect thereto by any governmental or Tax authority responsible
for the imposition of any such tax (domestic or foreign);
(ii) any liability for the payment of
any amounts of the type described in clause (i) above as a result of being a
member of an affiliated, consolidated, combined or unitary group for any Taxable
period; and
(iii) any liability for the payment of
any amounts of the type described in clauses (i) or (ii) above as a result of
any express or implied obligation to indemnify any other person.
“Tax Return” means any return,
declaration, form, and claim for refund or information return or statement
relating to Taxes, including any schedule or attachment thereto, and including
any amendment thereof.
ARTICLE
I
THE
TRANSACTIONS
SECTION
1.01 THE
SHARE EXCHANGE
Consideration. On
the Closing Date, (as hereinafter defined), the Share Exchange shall be
consummated, in which the Acquisition Entities shall exchange one hundred
percent (100%) of all issued and outstanding shares of the capital stock and
member units of the Acquisition Entities, collectively referred to as the “Exchange Shares,” and all of
the assets of the Acquisition Entities, in exchange for the following
consideration, according to the following terms:
(a) SARS
shall raise, and upon receipt, shall tender up to Two Million Five Hundred
Thousand U.S. Dollars ($2,500,000), which shall be secured in connection with
the Execution (defined herein, below) and the Closing (defined herein, below) in
order to satisfy certain identified liabilities, provide working capital and
facilitate the restructuring of the balance sheets for the Surviving Entities
resulting from the Merger (the “Financing”). The
Financing shall be a condition subsequent to the Closing;
(b) The
Acquisition Entities shall receive thirty million (30,000,000) shares of SARS’
restricted common stock shares, on a pro rata basis, otherwise known herein as
the “Merger
Shares”;
(c) Following
the Closing Date, the Parties will undertake, to the best of their abilities, to
release Xxxx and Xxxxx Xxxxx from their personal guarantees for lines of credit
for and/or loans to the Acquisition Entities. However, the Parties
acknowledge that the release of Xxxx and Xxxxx Xxxxx from their personal
guarantees for lines of credit for and/or loans to the Acquisition Entities
shall be subject to the final approval and acceptance by the bank(s) associated
with the lines of credit for and/or loans to the Acquisition
Entities;
(d) The
Parties agree to enter into an “earn-out” arrangement, such that upon the
Acquisition Entities’ achievement of mutually agreed upon gross revenue and
earnings before interest, taxes, depreciation and amortization (“EBITDA”) dollar figures, the
Acquisition Entities shall allocate a fixed dollar amount to retire
certain lines of credit for and/or loans to the Acquisition
Entities;
(e) Post
Closing, in the event the Financing does not occur, any of the Exchange Shares
have been delivered to SARS shall be immediately returned to the Acquisition
Entities;
(f) Subject
to the Financing, SARS shall assume the liabilities of the Acquisition Entities,
as disclosed on Schedule 1.01 (e)
attached hereto, which are estimated to equal approximately Eight Million Seven
Hundred Seventy Five Thousand U.S. Dollars ($8,775,000), which estimate is
subject to confirmation resulting from the completion the due diligence process
as conducted by the Parties, prior to the Closing Date. Schedule 1.01 shall
be amended and revised, subject to customary due diligence, and a final copy
shall be provided to SARS prior to the Closing; and
(g) Subject
to the Financing, SARS shall secure a credit facility to effectuate the
assumption of certain liabilities as agreed between the Parties, in order to
consolidate such liabilities into one (1) central credit facility.
SECTION
1.02 THE
MERGER
Upon the terms and subject to the
conditions set forth in this Merger Agreement and in accordance with the Nevada
Revised Statutes, Tennessee Limited Liability Company Act and the Illinois
Business Corporation Act of 1983, at the Effective Time (defined herein, below),
all the Exchange Shares shall be cancelled and converted into the right to
receive the Merger Shares. In connection therewith, the following
terms shall apply:
(a) Exchange
Agent. Legal counsel for SARS (The Xxxx Law Group, PLLC)
shall act as the exchange agent (the “Exchange Agent”) for the
purpose of exchanging the Exchange Shares for the Merger
Shares. At or prior to the Closing, SARS shall deliver to the
Exchange Agent the Merger Shares.
(b) Conversion of
Securities.
(i) Conversion of Acquisition
Entities’ Securities. At the Effective Time (defined herein,
below), by virtue of the Merger and without any action on the part of SARS, the
Acquisition Entities and the Merger Subs or the holders of any of their
respective securities agree to the following:
(1) Each
of the issued and outstanding shares the Exchange Shares, immediately prior to
the Effective Time (defined herein, below), shall be converted into and
represent the right to receive, and shall be exchangeable for a pro rata
allocation the Merger Shares.
(2) All
of the Exchange Shares shall no longer be outstanding and shall automatically be
canceled, retired and shall cease to exist, and each holder of a certificate
representing any such shares shall cease to have any rights with respect
thereto, except the right to receive the Merger Shares to be issued pursuant to
this Section 1.02 upon the surrender of such certificate in accordance with
Section 1.08, without interest. No fractional shares may be issued;
but each fractional share that would result from the Merger will be rounded to
the nearest number of whole shares.
(3) The
Merger Shares acquired in the Share Exchange shall represent, when issued, the
equivalent of approximately, but no less than, seventy five percent (75%) of
SARS’ issued and outstanding common stock at the Effective Time (defined, herein
below).
(ii) Conversion of Merger Sub
Stock. At the Effective Time (defined, herein below), by
virtue of the Merger and without any action on the part of the Acquisition
Entities and Merger Subs and SARS, or the holders of any of their respective
securities, each share of capital stock of the Merger Subs outstanding,
immediately prior to the Effective Time (defined herein, below), shall be
converted into one (1) unit of EI membership units, one (1) unit of
ESDD membership units, one (1) share of capital stock of Alternatech, one (1)
share of the capital stock of AMI, one (1) share of capital stock of A&P and
one (1) share of the capital stock of RJP, each respectively a “Surviving Entity,”
(collectively referred to as the “Surviving Entities”) and the
shares of capital stock of the Surviving Entities so issued in such conversion
shall constitute the only outstanding shares of capital stock of the Surviving
Entities and the Surviving Entities shall be wholly owned subsidiaries of
SARS.
(c) Exemption from
Registration. The Parties intend that the issuance of the
Merger Shares to the Acquisition Entities shall be exempt from the registration
requirements of the Securities Act of 1933, as amended, (the “Securities Act”) pursuant to
Section 4(2) of the Securities Act and the rules and regulations promulgated
thereunder.
SECTION
1.03 EXECUTION
The execution of this Merger
Agreement (the “Execution” otherwise known as
the “Execution Date”)
will take place at the offices of The Xxxx Law Group, PLLC, no later than June
25, 2009, unless otherwise extended by a signed written Merger Agreement of the
Parties.
SECTION
1.04 CLOSING
The closing of the Share Exchange and
the Merger (the “Closing” or the “Closing Date”) will take place
no later than June 25, 2009, at the offices of The Xxxx Law Group, PLLC, within
one (1) business day following the satisfaction or waiver of the covenants set
forth in Article IV, and the conditions precedent set forth in Article V, or at
such other date as SARS and the Acquisition Entities shall agree, but in any
event no later than June 30, 2009 unless otherwise extended by a signed written
Merger Agreement of the Parties. The Parties reserve the right to
mutually agree to the extension of the Closing Date for two (2) thirty (30) day
periods, for an aggregate of sixty (60) days (the “Extension”).
SECTION
1.05 MERGER
EFFECTIVE TIME.
The
Effective Time (the “Effective
Time”) shall occur upon the date of filing the Certificates of Merger
with the requisite Secretary of State’s office, with respect to the individual
entities involved, as described below. The date on which the
Effective Time occurs is referred to as the “Effective
Date.” Provided that this Merger Agreement has not been
terminated pursuant to Article VI, the Parties will cause the Certificate of
Merger to be filed with the respective Secretary of State’s office as soon as
practicable after the Closing.
(a) EI Merger
Sub. At
the Effective Time and subject to and upon the terms and conditions of this
Merger Agreement, the EI Merger Sub shall, and SARS shall cause the EI Merger
Sub, to merge with and into EI in accordance with the provisions of the Nevada
Revised Statutes the separate corporate existence of the EI Merger Sub shall
cease and EI shall continue as the Surviving Entity. The Effective
Time shall occur upon the filing with the Nevada Secretary of State, executed in
accordance with the applicable provisions of the Nevada Secretary of
State.
(b) ESDD Merger
Sub. At
the Effective Time and subject to and upon the terms and conditions of this
Merger Agreement, the ESDD Merger Sub shall, and SARS shall cause the ESDD
Merger Sub, to merge with and into ESDD in accordance with the provisions of the
Nevada Revised Statutes and the Tennessee Limited Liability Company Act, the
separate corporate existence of the ESDD Merger Sub shall cease and ESDD shall
continue as the Surviving Entity. The Effective Time shall occur upon
the filing with the Nevada Secretary of State and the Tennessee Department of
State a Certificate of Merger, executed in accordance with the applicable
provisions of the Tennessee Department of State.
(c) Alternatech Merger
Sub. At
the Effective Time and subject to and upon the terms and conditions of this
Merger Agreement, the Alternatech Merger Sub shall, and SARS shall cause the
Alternatech Merger Sub, to merge with and into Alternatech in accordance with
the provisions of the Nevada Revised Statutes and the Illinois Business
Corporation Act of 1983 the separate corporate existence of the Alternatech
Merger Sub shall cease and Alternatech shall continue as the Surviving
Entity. The Effective Time shall occur upon the filing with the
Nevada Secretary of State and the Illinois Secretary of State a Certificate of
Merger, executed in accordance with the applicable provisions of the Illinois
Secretary of State.
(d) AMI Merger
Sub. At
the Effective Time and subject to and upon the terms and conditions of this
Merger Agreement, the AMI Merger Sub shall, and SARS shall cause the AMI Merger
Sub, to merge with and into AMI in accordance with the provisions of the Nevada
Revised Statutes and the Illinois Business Corporation Act of 1983 the separate
corporate existence of the AMI Merger Sub shall cease and AMI shall continue as
the Surviving Entity. The Effective Time shall occur upon the filing
with the Nevada Secretary of State and the Illinois Secretary of State a
Certificate of Merger, executed in accordance with the applicable provisions of
the Nevada Secretary of State and the Illinois Secretary of State.
(e) A&P Merger
Sub. At
the Effective Time and subject to and upon the terms and conditions of this
Merger Agreement, the A&P Merger Sub shall, and SARS shall cause the A&P
Merger Sub, to merge with and into A&P in accordance with the provisions of
the Nevada Revised Statutes and the Illinois Business Corporation Act of 1983
the separate corporate existence of the A&P Merger Sub shall cease and
A&P shall continue as the Surviving Entity. The Effective Time
shall occur upon the filing with the Nevada Secretary of State and the Illinois
Secretary of State a Certificate of Merger, executed in accordance with the
applicable provisions of the Nevada Secretary of State and the Illinois
Secretary of State.
(f) RJP Merger
Sub. At
the Effective Time and subject to and upon the terms and conditions of this
Merger Agreement, the RJP Merger Sub shall, and SARS shall cause the RJP Merger
Sub, to merge with and into RJP in accordance with the provisions of the Nevada
Revised Statutes and the Illinois Business Corporation Act of 1983 the separate
corporate existence of the RJP Merger Sub shall cease and RJP shall continue as
the Surviving Entity. The Effective Time shall occur upon the filing
with the Nevada Secretary of State and the Illinois Secretary of State a
Certificate of Merger, executed in accordance with the applicable provisions of
the Illinois Secretary of State.
SECTION
1.06 EFFECT
OF THE MERGER.
The Merger shall have the effect set
forth in and by the Nevada Revised Statute §92A, the Tennessee Department of
State and Illinois Compiled Xxxxxxx §000 ILCS 5/11.25. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, all the properties, rights, privileges, powers and franchises of the
Acquisition Entities and Merger Subs shall vest in each company’s respective
Surviving Entity, and all debts, liabilities and duties of the Acquisition
Entities and Merger Subs shall become the debts, liabilities and duties of each
company’s respective Surviving Entity.
|
SECTION
1.07
|
CERTIFICATE
OF INCORPORATION AND BYLAWS; DIRECTORS
|
AND
OFFICERS
|
Pursuant
to the Merger:
(a) The
Certificate of Incorporation and Bylaws of the Acquisition Entities, as in
effect immediately prior to the Effective Time, shall be the Certificate of
Incorporation and Bylaws of the Surviving Entities immediately following the
Merger.
(b) The
members, directors and officers of the Acquisition Entities immediately prior to
the Merger shall be the directors and officers of the Surviving Entities
following the Merger.
|
SECTION
1.08
|
RESTRICTIONS
ON RESALE
|
(a) The
Exchange Shares issued pursuant to the Share Exchange and the Merger Shares will
not be registered under the Securities Act, or the securities laws of any state,
and cannot be transferred, hypothecated, sold or otherwise disposed of
until: (i) a registration statement with respect to such securities
is declared effective under the Securities Act; or (ii) SARS receives an opinion
of counsel for the Shareholders, reasonably satisfactory to counsel for SARS,
stating that an exemption from the registration requirements of the Securities
Act is available.
The certificates representing the
Merger Shares which are being issued to the shareholders shall contain a legend
substantially as follows:
“THE
SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH
RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR SARS CORPORATION
RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY TO COUNSEL
FOR SARS CORPORATION THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
SUCH ACT IS AVAILABLE.”
SECTION
1.09 EXCHANGE
OF CERTIFICATES.
(a) Surrender of
Shares. Upon the Effective Time, the Acquisition Entities
shall be required to surrender all the Exchange Shares to the Exchange Agent,
and each shall be entitled upon such surrender to receive, respectively, in
exchange therefore certificates representing the pro rata number of Merger
Shares, which shall be disclosed on Schedule 1.09 prior
to the Closing and attached hereto, into which the Exchange Shares theretofore
represented by the stock transfer forms so surrendered shall have been exchanged
pursuant to this Merger Agreement. Until so surrendered, each
outstanding certificate which, prior to the Effective Time, representing the
Exchange Shares shall be deemed for all corporate purposes, subject to the
further provisions of this Article I, to evidence the ownership of the number of
whole Merger Shares for which such Exchange Shares have been so
exchanged. No dividend payable to holders of the Merger Shares of
record as of any date subsequent to the Effective Time shall be paid to the
owner of any certificate which, prior to the Effective Time, representing the
Exchange Shares, until such certificate or certificates representing the
Exchange Shares together with a stock transfer form, are surrendered as provided
in this Article I or pursuant to letters of transmittal or other instructions
with respect to lost certificates provided by the Exchange Agent.
(b) Full Satisfaction of
Rights. All Merger Shares for which the Exchange Shares shall
have been exchanged pursuant to this Article I shall be deemed to have been
issued in full satisfaction of all rights pertaining to the Exchange
Shares.
(c) Exchange of
Certificates. All certificates representing the Exchange
Shares converted into the right to receive Merger Shares pursuant to this
Article I shall be furnished to SARS subsequent to delivery thereof to the
Exchange Agent pursuant to this Merger Agreement.
(d) Closing of Transfer
Books. On the Effective Date, the stock transfer book of the
Acquisition Entities shall be deemed to be closed and no transfer of the
Exchange Shares shall thereafter be recorded thereon.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF SARS
SARS and where applicable,
the Merger Subs hereby jointly and severally represent and warrant to
the Acquisition Entities, as of the date of this Merger Agreement, as of the
Closing Date and as of the Effective Time, as follows:
SECTION
2.01 ORGANIZATION,
STANDING AND POWER
SARS is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Nevada, and has corporate power and authority to (i) conduct its business as
presently conducted by it, (ii) to enter into and perform this Merger Agreement;
and (iii) to carry out the transactions contemplated by this Merger
Agreement. The EI Merger Sub is a corporation to be formed under the
laws of the State of Nevada, and will have the corporate power and authority to
enter into and perform this Merger Agreement and to carry out the transactions
contemplated by this Merger Agreement. The ESDD Merger Sub is a
corporation to be formed under the laws of the State of Nevada, and will have
the corporate power and authority to enter into and perform this Merger
Agreement and to carry out the transactions contemplated by this Merger
Agreement. The Alternatech Merger Sub is a corporation to be formed
under the laws of the State of Nevada, and will have the corporate power and
authority to enter into and perform this Merger Agreement and to carry out the
transactions contemplated by this Merger Agreement. The AMI Merger Sub is a
corporation to be formed under the laws of the State of Nevada, and will have
the corporate power and authority to enter into and perform this Merger
Agreement and to carry out the transactions contemplated by this Merger
Agreement. In addition, the A&P Merger Sub is a corporation to be
formed under the laws of the State of Nevada, and will have the corporate power
and authority to enter into and perform this Merger Agreement and to carry out
the transactions contemplated by this Merger Agreement. Finally, the RJP Merger
Sub is a corporation to be formed under the laws of the State of Nevada, and
will have the corporate power and authority to enter into and perform this
Merger Agreement and to carry out the transactions contemplated by this Merger
Agreement.
SECTION
2.02 RELEVANT
SUBSIDIARIES
(a) EI Merger
Sub. SARS will own all of the outstanding capital stock of the
EI Merger Sub, a corporation to be formed under the laws of the State of Nevada
and prior to the date hereof and through the Effective Date; the EI Merger Sub
shall not conduct any operating business, become a party to any agreements, or
incur any liabilities or obligations.
(b) ESDD Merger
Sub. SARS will own all of the outstanding capital stock of the
ESDD Merger Sub, a corporation to be formed under the laws of the State of
Nevada and prior to the date hereof and through the Effective Date; the ESDD
Merger Sub shall not conduct any operating business, become a party to any
agreements, or incur any liabilities or obligations.
(c) Alternatech Merger
Sub. SARS will own all of the outstanding capital stock of the
Alternatech Merger Sub, a corporation to be formed under the laws of the State
of Nevada and prior to the date hereof and through the Effective Date; the
Alternatech Merger Sub shall not conduct any operating business, become a party
to any agreements, or incur any liabilities or obligations.
(d) AMI Merger
Sub. SARS will own all of the outstanding capital stock of the
AMI Merger Sub, a corporation to be formed under the laws of the State of Nevada
and prior to the date hereof and through the Effective Date; the AMI Merger Sub
shall not conduct any operating business, become a party to any agreements, or
incur any liabilities or obligations.
(e) A&P Merger
Sub. SARS will own all of the outstanding capital stock of the
A&P Merger Sub, a corporation to be formed under the laws of the State of
Nevada and prior to the date hereof and through the Effective Date; the A&P
Merger Sub shall not conduct any operating business, become a party to any
agreements, or incur any liabilities or obligations.
(f) RJP Merger
Sub. SARS will own all of the outstanding capital stock of the
RJP Merger Sub, a corporation to be formed under the laws of the State of Nevada
and prior to the date hereof and through the Effective Date; the RJP Merger Sub
shall not conduct any operating business, become a party to any agreements, or
incur any liabilities or obligations.
SECTION
2.03
CAPITALIZATION
(a) There
are five hundred fifty million (550,000,000) shares of capital stock of SARS
authorized, consisting of five hundred million (500,000,000) shares of common
stock, $0.001 par value per share (the “SARS Common Shares”) and fifty
million (50,000,000) shares of preferred stock, $0.001 per share (“SARS Preferred
Shares”). Prior to the Closing of this Merger Agreement, there
will be ten million (10,000,000) SARS Common Shares issued and outstanding, and
five million (5,000,000)
SARS Preferred Shares issued and outstanding. It is acknowledged,
that following the Closing Date, there will be approximately forty million
(40,000,000) shares of Common Stock issued and outstanding, and five million
(5,000,000) shares of Preferred Stock issued and outstanding.
(b) It
is acknowledged that as of the Closing Date, the individuals named, which shall
be disclosed on Schedule 2.03 and
attached hereto prior to the Closing, collectively, will own of record and
beneficially up to approximately thirty million (30,000,000) of the issued and
outstanding SARS Common Shares, constituting seventy five percent (75%) of such
shares. Five Million (5,000,000) SARS Common Shares shall be reserved
for issuance to as part of the employee stock option plan for SARS. There exist
no other outstanding rights, warrants, options or agreements for the exchange of
SARS Common or Preferred Shares except as provided in this Merger
Agreement.
(c) All
outstanding SARS Common Shares are validly issued, fully paid, non-assessable,
not subject to pre-emptive rights and have been issued in compliance with all
state and federal securities laws or other Applicable Law. The Merger
Shares issuable to the Acquisition Entities, on a pro rata basis, pursuant to
the Merger and the Share Exchange will, when issued pursuant to this Merger
Agreement, be duly and validly authorized and issued, fully paid and
non-assessable.
SECTION
2.04 AUTHORITY
FOR MERGER AGREEMENT
The execution, delivery, and
performance of this Merger Agreement by each of SARS, the Merger Subs have been
duly authorized by all necessary corporate and shareholder action, and this
Merger Agreement, upon its execution by the Parties, will constitute the valid
and binding obligation of each of SARS and the Merger Subs, enforceable against
each of them in accordance with and subject to its terms, except as
enforceability may be affected by bankruptcy, insolvency or other laws of
general application affecting the enforcement of creditors'
rights. The execution and consummation of the transactions
contemplated by this Merger Agreement and compliance with its provisions by
SARS, the Merger Subs will not violate any provision of Applicable Law and will
not conflict with or result in any breach of any of the terms, conditions, or
provisions of, or constitute a default under, SARS's Articles of Incorporation,
the EI Merger Sub’s Certificate of Incorporation, the ESDD Merger Sub’s
Certificate of Incorporation, the Alternatech Merger Sub’s Certificate of
Incorporation, the AMI Merger Sub’s Certificate of Incorporation, the A&P
Merger Sub’s Certificate of Incorporation, the RJP Merger Sub’s Certificate of
Incorporation or any of their respective Bylaws, in each case as amended, or, in
any material respect, any indenture, lease, loan agreement or other agreement or
instrument to which SARS is a party or by which it or any of its properties is
bound, or any decree, judgment, order, statute, rule or regulation applicable to
SARS and the Merger Subs.
SECTION
2.05 FINANCIAL
CONDITION
(a) The
financial statements were prepared in accordance with generally accepted
accounting principles and to the best of its Knowledge fairly reflect the
financial condition of SARS as of the dates stated and the results of its
operations for the periods presented.
(b) Without
in any manner reducing or otherwise mitigating the representations contained
herein, Acquisition Entities, its legal counsel and accountants shall have the
opportunity to meet with the accountants and attorneys of the SARS to discuss
the financial condition of SARS during reasonable business hours and in a manner
that does not interfere with the normal operation of business of
SARS. SARS shall make available to Acquisition Entities all books and
records of SARS, with particular specificity, those items listed in schedule
3.04(a).
SECTION
2.06 CERTAIN CHANGES OR
EVENTS
Since March 13, 2009, as reported in
SARS’ 8-K filed by SARS with the Securities and Exchange Commission (“SEC”) and except as
contemplated by this Merger Agreement:
|
(a)
|
there
have been no Material Adverse Changes in the business, operations,
properties, assets, or condition of
SARS;
|
(b) SARS
has not (i) amended its Articles of Incorporation, other than to changes its
name from “SARS Corporation” to “FAST Technologies, Inc.”; (ii)
declared or made, or agreed to declare or make, any payment of dividends or
distributions of any assets of any kind whatsoever to stockholders or purchased
or redeemed, or agreed to purchase or redeem, any outstanding capital stock;
(iii) made any material change in its method of management, operation, or
accounting; (iv) entered into any material transaction, not otherwise disclosed
on Schedule
2.06 and attached hereto prior to the Closing; or (v) made any accrual or
arrangement for payment of bonuses or special compensation of any kind or any
severance or termination pay to any present or former officer or
employee;
(c) SARS
has not (i) borrowed or agreed to borrow any funds or incurred, or become
subject to, any material obligation or liability (absolute or contingent),
except as otherwise disclosed on Schedule 2.06 to be
attached hereto prior to the Closing and except liabilities incurred in the
ordinary course of business; (ii) paid any material obligation or liability
(absolute or contingent) other than current liabilities reflected in or shown on
the most recent SARS balance sheet, and current liabilities incurred since that
date in the ordinary course of business; (iii) sold or transferred, or agreed to
sell or transfer, any material assets, properties, or rights, or canceled, or
agreed to cancel, any material debts or claims; (iv) made or permitted any
material amendment or termination of any contract, agreement, or license to
which it is a party; (v) entered into any outstanding rights, warrants, options
or agreements for the capital stock of SARS.
SECTION
2.07 GOVERNMENTAL
AND THIRD PARTY CONSENTS
No consent, waiver, approval, order or
authorization of, or registration, declaration or filing with, any court,
administrative agency or commission or other federal, state, county, local or
other foreign governmental authority, instrumentality, agency or commission or
any third party, including a party to any agreement with SARS and the Merger
Subs is required by or with respect to SARS, SARS’ operating subsidiaries (the
“Operating Subs”), the
Merger Subs in connection with the execution and delivery of this Merger
Agreement or the consummation of the transactions contemplated hereby, except
for such consents, waivers, approvals, orders, authorizations, registrations,
declarations and filings as may be required under (i) applicable securities
laws; or (ii) the Nevada General Corporation Laws, the Tennessee Limited
Liability Company Act and the Illinois Business Corporation Act of
1983.
|
SECTION
2.08
|
LITIGATION
|
There is no action, suit,
investigation, audit or proceeding pending against, or to the Knowledge of SARS,
threatened against or affecting, SARS, the Merger Subs or any of their
respective assets or properties before any court or arbitrator or any
governmental body, agency or official.
|
SECTION
2.09
|
INTERESTED
PARTY TRANSACTIONS
|
Except as otherwise disclosed on Schedule 2.09, which
shall be attached hereto prior to the Closing, SARS is not indebted to any
officer or director of SARS, and no such person is indebted to
SARS.
SECTION
2.10 COMPLIANCE
WITH APPLICABLE LAWS
To the Knowledge of SARS, the business
of SARS, the Operating Subsidiaries nor the Merger Subs have not been, and are
not conducting business in violation of any Applicable Laws.
|
SECTION
2.11
|
TAX
RETURNS AND PAYMENT
|
To the Knowledge of SARS, there is no
material claim for Taxes that is a Lien against the property of SARS other than
Liens for Taxes not yet due and payable, none of which is
material. SARS has not received written notification of any audit of
any Tax Return of SARS being conducted or pending by a Tax authority, no
extension or waiver of the statute of limitations on the assessment of any Taxes
has been granted by SARS which is currently in effect, and SARS is not a party
to any agreement, contract or arrangement with any Tax authority or
otherwise,.
SECTION
2.12 SECURITY
LISTING
It is the intent of SARS to become a
fully compliant reporting company under the Securities Exchange Act of 1934, as
amended (the “Exchange
Act”), and all SARS public filings required under the Exchange Act shall
be made.
SECTION
2.13 FINDERS’
FEES
SARS has not incurred, nor will it
incur, directly or indirectly, any liability for brokers’ or finders’ fees or
agents’ commissions or investment bankers’ fees or any similar charges in
connection with this Merger Agreement or any transaction contemplated
hereby.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE ACQUISITION ENTITIES
The Acquisition Entities hereby
represent and warrant to SARS and the Merger Subs as of the date of this Merger
Agreement and as of the Effective Time (except as otherwise indicated), as
follows:
SECTION
3.01 ORGANIZATION,
STANDING AND POWER
(a) EI. EI
is a limited liability company duly incorporated, validly existing and in good
standing under the laws of the State of Nevada and has full corporate power and
authority to conduct its business as presently conducted by it and to enter into
and perform this Merger Agreement and to carry out the transactions contemplated
by this Merger Agreement. EI is duly qualified to do business as a
foreign corporation in each state in which the nature of the business conducted
by it or the character or location of the properties and assets owned or leased
by it make such qualification necessary.
(b) ESDD. ESDD
is a limited liability company duly incorporated, validly existing and in good
standing under the laws of the State of Tennessee and has full corporate power
and authority to conduct its business as presently conducted by it and to enter
into and perform this Merger Agreement and to carry out the transactions
contemplated by this Merger Agreement. ESDD is duly qualified to do
business as a foreign corporation in each state in which the nature of the
business conducted by it or the character or location of the properties and
assets owned or leased by it make such qualification necessary.
(c) Alternatech. Alternatech
is a privately held corporation duly incorporated, validly existing and in good
standing under the laws of the State of Illinois and has full corporate power
and authority to conduct its business as presently conducted by it and to enter
into and perform this Merger Agreement and to carry out the transactions
contemplated by this Merger Agreement. Alternatech is duly qualified
to do business as a foreign corporation in each state in which the nature of the
business conducted by it or the character or location of the properties and
assets owned or leased by it make such qualification necessary.
(d) AMI. AMI
is a privately held corporation duly incorporated, validly existing and in good
standing under the laws of the State of Illinois and has full corporate power
and authority to conduct its business as presently conducted by it and to enter
into and perform this Merger Agreement and to carry out the transactions
contemplated by this Merger Agreement. AMI is duly qualified to do
business as a foreign corporation in each state in which the nature of the
business conducted by it or the character or location of the properties and
assets owned or leased by it make such qualification necessary.
(e) A&P. A&P
is a privately held corporation duly incorporated, validly existing and in good
standing under the laws of the State of Illinois, and has full corporate power
and authority to conduct its business as presently conducted by it and to enter
into and perform this Merger Agreement and to carry out the transactions
contemplated by this Merger Agreement. A&P is duly qualified to
do business as a foreign corporation in each state in which the nature of the
business conducted by it or the character or location of the properties and
assets owned or leased by it make such qualification necessary.
(f) RJP. RJP
is a privately held corporation duly incorporated, validly existing and in good
standing under the laws of the State of Illinois, and has full corporate power
and authority to conduct its business as presently conducted by it and to enter
into and perform this Merger Agreement and to carry out the transactions
contemplated by this Merger Agreement. RJP is duly qualified to do
business as a foreign corporation in each state in which the nature of the
business conducted by it or the character or location of the properties and
assets owned or leased by it make such qualification necessary.
SECTION
3.02 CAPITALIZATION
(a) EI. There
are one thousand (1,000) member units of EI, (the “EI Units”). As of
the date of this Merger Agreement, there were one hundred (100) issued and
outstanding EI Units. It is acknowledged that as of the Closing Date,
the individuals named, which shall be disclosed on Schedule 3.02 and
attached hereto prior to the Closing, collectively, will own of record and
beneficially up to approximately One Hundred (100) of the issued and outstanding
EI Units, constituting one hundred percent (100%) of such EI Units. No EI Units
have been reserved for issuance to any Person, and there are no outstanding
rights, warrants, options or agreements for the exchange of EI
Units. No Person is entitled to any rights with respect to the
conversion, exchange or delivery of the EI Units. The EI Units have
been issued in compliance with Applicable Law.
(b) ESDD. There
are one thousand (1,000) member units of ESDD (the “ESDD Units”). As of
the date of this Merger Agreement, there were one hundred (100) issued and
outstanding ESDD Units. It is acknowledged that as of the Closing
Date, the individuals named, which shall be disclosed on Schedule 3.02 and
attached hereto prior to the Closing, collectively, will own of record and
beneficially up to approximately one hundred (100) of the issued and outstanding
ESDD Units, constituting one hundred percent 100% of such ESDD Units. No
Alternatech ESDD Units have been reserved for issuance to any Person, and there
are no outstanding rights, warrants, options or agreements for the exchange of
ESDD Units. No Person is entitled to any rights with respect to
the conversion, exchange or delivery of the ESDD Units. The ESDD
Units have been issued in compliance with Applicable Law.
(c) Alternatech. There
are one hundred thousand (100,000) shares of Alternatech capital stock
authorized, consisting entirely of common stock with no par value (the “Alternatech Common
Shares”). As of the date of this Merger Agreement, there were
one hundred seventy eight (178) issued and outstanding Alternatech Common
Shares. It is acknowledged that as of the Closing Date, the
entity/individuals named, which shall be disclosed on Schedule 3.02 and
attached hereto prior to the Closing, collectively, will own of record and
beneficially one hundred percent (100%) of the issued and outstanding Associated
Common Shares, constituting one hundred percent (100%) of such shares. No
Alternatech Common Shares have been reserved for issuance to any Person, and
there are no outstanding rights, warrants, options or agreements for the
exchange of Alternatech Common Shares. No Person is entitled to
any rights with respect to the conversion, exchange or delivery of the
Alternatech Common Shares. The Alternatech Common Shares have been
issued in compliance with Applicable Law.
(d) AMI. There
are ten thousand (10,000) shares of Associate Mechanical capital stock
authorized, consisting entirely of common stock with no par value (the “AMI Common
Shares”). As of the date of this Merger Agreement, there were
seventy (70) issued and outstanding AMI Common Shares. It is
acknowledged that as of the Closing Date, the entity/individuals named, which
shall be disclosed on Schedule 3.02 and
attached hereto prior to the Closing, collectively, will own of record and
beneficially one hundred percent (100%) of the issued and outstanding Associated
Common Shares, constituting one hundred percent (100%) of such shares. No AMI
Common Shares have been reserved for issuance to any Person, and there are no
outstanding rights, warrants, options or agreements for the exchange of AMI
Common Shares. No Person is entitled to any rights with respect
to the conversion, exchange or delivery of the AMI Common Shares. The
AMI Common Shares have been issued in compliance with Applicable
Law.
(e) SEI d/b/a
A&P. There
are one hundred thousand (100,000) shares of SEI capital stock authorized,
consisting entirely of common stock with no par value (the “SEI Common
Shares”). As of the date of this Merger Agreement, there were
one hundred thousand (100,000) issued and outstanding SEI Common
Shares. It is acknowledged that as of the Closing Date, the
entity/individuals named, which shall be disclosed on Schedule 3.02 and
attached hereto prior to the Closing, collectively, will own of record and
beneficially one hundred percent (100%) of the issued and outstanding SEI Common
Shares, constituting one hundred percent (100%) of such shares. No SEI Common
Shares have been reserved for issuance to any Person, and there are no
outstanding rights, warrants, options or agreements for the purchase of SEI
Common Shares. No Person is entitled to any rights with respect
to the conversion, exchange or delivery of the A&P Common
Shares. The SEI Common Shares have been issued in compliance with
Applicable Law.
(f) RJP. There
are one hundred (100) shares of RJP capital stock authorized, consisting of
_______ shares of common stock with no par value (the “RJP Common
Shares”). As of the date of this Merger Agreement, there were
fifty one (51) issued and outstanding RJP Common Shares. It is
acknowledged that as of the Closing Date, the entity/individuals named, which
shall be disclosed on Schedule 3.02 and
attached hereto prior to the Closing, collectively, will own of record and
beneficially one hundred percent (100%) of the issued and outstanding RJP Common
Shares, constituting one hundred percent (100%) of such shares. No
RJP Common Shares have been reserved for issuance to any Person, and there are
no outstanding rights, warrants, options or agreements for the exchange of RJP
Common Shares. No Person is entitled to any rights with respect
to the conversion, exchange or delivery of the RJP Common Shares. The
RJP Common Shares have been issued in compliance with Applicable
Law.
SECTION
3.03 AUTHORITY
FOR MERGER AGREEMENT
The execution, delivery and performance
of this Merger Agreement by the Acquisition Entities has been duly authorized by
all necessary corporate action, and this Merger Agreement constitutes the valid
and binding obligation of the Acquisition Entities, enforceable against the
Acquisition Entities, in accordance with its terms, except as enforceability may
be affected by bankruptcy, insolvency or other laws of general application
affecting the enforcement of creditors' rights. The execution and
consummation of the Merger contemplated by this Merger Agreement and compliance
with its provisions by the Acquisition Entities will not violate any provision
of Applicable Law and will not conflict with or result in any breach of any of
the terms, conditions, or provisions of, or constitute a default under, the
Acquisition Entities’ Certificates of Incorporation or Bylaws, in each case as
amended, or, to the Knowledge of the Acquisition Entities, in any material
respect, any indenture, lease, loan agreement or other agreement instrument to
which the Acquisition Entities are a party to or by which it or any of them or
any of its or their properties are bound, or any decree, judgment, order,
statute, rule or regulation applicable to the Acquisition Entities.
SECTION
3.04 INVESTIGATION
OF FINANCIAL CONDITION
Without in any manner reducing or
otherwise mitigating the representations contained herein, SARS, its legal
counsel and accountants shall have the opportunity to meet with the accountants
and attorneys of the Acquisition Entities to discuss the financial condition of
the Acquisition Entities during reasonable business hours and in a manner that
does not interfere with the normal operation of business of the Acquisition
Entities. The Acquisition Entities shall make available to SARS all
books and records of the Acquisition Entities, with particular specificity,
those items listed in schedule 3.04(b).
SECTION
3.05 ASSETS
The
assets of the Acquisition Entities are fully included in Schedule 3.05 or, if Schedule
3.05 is not
available at the Closing, as are included in Schedule 3.04 attached hereto,
and such assets are not subject to any claims or encumbrances except as
indicated in Schedules 3.04 or 3.05,
respectively.
SECTION
3.06 MATERIAL
CONTRACTS
A list of the material contracts of the
Acquisition Entities, in addition to those provided for in Schedule 3.04, are attached
hereto as Schedule 3.06, and such
contracts shall be made available for inspection within five (5) days prior to
the Closing.
SECTION
3.07 GOVERNMENTAL
OR THIRD PARTY CONSENT
No consent, waiver, approval, order or
authorization of, or registration, declaration or filing with, any court,
administrative agency or commission or other federal, state, county, local or
other foreign governmental authority, instrumentality, agency or commission or
any third party, including a party to any agreement with the Acquisition
Entities, is required by or with respect to the Acquisition Entities in
connection with the execution and delivery of this Merger Agreement or the
consummation of the Merger contemplated hereby, except for such consents,
waivers, approvals, orders, authorizations, registrations, declarations and
filings as may be required under (i) applicable securities laws, , (ii)
the Nevada General Corporation Law, the Illinois Business Corporation Act of
1983 or the Tennessee Business Corporation Act; (iii) existing lending
institutions currently having the extension of credit to the Acquisition
Entities; (vi) Soy Capital Bank; and (v) the Internal Revenue
Service..
|
SECTION
3.08
|
LITIGATION
|
There is no action, suit,
investigation, audit or proceeding pending against or, to the Knowledge of the
Acquisition Entities, threatened, against or affecting the Acquisition Entities
or any of its material assets or properties before any court or arbitrator or
any governmental body, agency or official except as disclosed in writing to
SARS.
SECTION
3.09 COMPLIANCE
WITH APPLICABLE LAWS
To the Knowledge of the Acquisition
Entities, the business of the Acquisition Entities has not been, and is not
being, conducted in violation of any Applicable Law, except for possible
violations which individually or in the aggregate have not had and are not
reasonably likely to have a Material Adverse Effect on the Acquisition
Entities.
SECTION
3.10 TAX
RETURNS AND PAYMENT
The Acquisition Entities have not filed
their Tax Returns, but have filed extensions for filing in their
place. Other than as listed on Schedule 1.01, to the
Knowledge of the Acquisition Entities, there is no material claim for Taxes that
is a Lien against the property of the Acquisition Entities other than Liens for
Taxes not yet due and payable, none of which is material. The
Acquisition Entities have not received written notification of any audit of any
Tax Return of the Acquisition Entities being conducted or pending by a Tax
authority where an adverse determination could have a Material Adverse Effect on
the Acquisition Entities, no extension or waiver of the statute of limitations
on the assessment of any Taxes has been granted by the Acquisition Entities
which is currently in effect, and the Acquisition Entities a party to any
agreement, contract or arrangement with any Tax authority or otherwise, which
may result in the payment of any material amount in excess of the amount
reflected on the above referenced the Acquisition Entities’ financial
statements.
SECTION
3.11 FINDERS’
FEES
The Acquisition Entities have not
incurred, nor will it incur, directly or indirectly, any liability for brokers’
or finders’ fees or agents’ commissions or investment bankers’ fees or any
similar charges in connection with this Merger Agreement or any transaction
contemplated hereby.
ARTICLE
IV
CERTAIN
COVENANTS AND AGREEMENTS
|
SECTION
4.01
|
COVENANTS
OF THE ACQUISITION ENTITIES
|
The Acquisition Entities covenant and
agree that, during the period from the date of this Merger Agreement until the
Closing Date, the Acquisition Entities shall, except as otherwise disclosed in
this Merger Agreement and other than as contemplated by this Merger Agreement or
for the purposes of effecting the Closing pursuant to this Merger Agreement,
conduct its business as presently operated and solely in the ordinary course,
and consistent with such operation, and, in connection therewith, without the
written consent of SARS, which shall be disclosed on Schedule 4.01 prior to the
Closing:
|
(a)
|
Shall
continue to operate in the ordinary course of
business;
|
|
(b)
|
shall
not amend their Certificate of Incorporation or
Bylaws;
|
|
(c)
|
shall
not pay or agree to pay to any employee, officer or director compensation
that is in excess of the current compensation level of such employee,
officer or director other than salary increases or payments made in the
ordinary course of business or as otherwise provided in any contracts or
agreements with any such employees;
|
|
(d)
|
shall
not grant any severance or termination pay to any director, officer or any
other employees;
|
|
(e)
|
shall
not incur any material indebtedness to any employee, officer or
director;
|
|
(f)
|
shall
not merge or consolidate with any other entity or acquire or agree to
acquire any other entity;
|
|
(g)
|
shall
not sell, transfer, or otherwise dispose of any material assets required
for the operations of the Acquisition Entities’ business, except in the
ordinary course of business consistent with past
practices;
|
|
(h)
|
shall
not issue any additional shares of capital stock or take any action
affecting the capitalization the
company;
|
|
(i)
|
shall
not declare or pay any dividends on or make any distribution of any kind
;
|
|
(j)
|
shall
use commercially reasonable efforts to comply with and not be in default
or violation under any known law, regulation, decree or order applicable
to the Acquisition Entities’ business, operations or assets where such
violation would have a Material Adverse Effect on the Acquisition
Entities; and
|
|
(k)
|
shall
use its best efforts to comply with the covenants set forth herein and
shall use its best efforts to comply with the conditions precedent as set
forth in Section V.
|
|
SECTION
4.02
|
COVENANTS
OF SARS
|
SARS covenants and agrees that, during
the period from the date of this Merger Agreement until the Closing Date, SARS
shall not, other than as contemplated by this Merger Agreement or for the
purposes of effecting the Closing pursuant to this Merger Agreement, conduct its
business as presently operated and solely in the ordinary course, and consistent
with such operation, and, in connection therewith, without the prior written
consent of the Acquisition Entities’, which shall be disclosed on Schedule 4.02 prior
to the Closing:
|
(a)
|
shall
continue to operate in the ordinary course of
business;
|
|
(b)
|
shall
not amend its Articles of Incorporation or Bylaws other than to change its
name to “FAST Technologies, Inc.”;
|
|
(c)
|
shall
not merge or consolidate with any other entity or acquire or agree to
acquire any other entity; and
|
|
(d)
|
shall
not issue any additional shares of SARS’ capital stock or take any action
affecting the capitalization of SARS or the SARS Common or Preferred
Shares.
|
SECTION
4.03 COVENANTS
OF THE PARTIES
(a) Announcement. Neither
of the Acquisition Entities, on the one hand, nor SARS on the other hand, shall
issue any press release or otherwise make any public statement with respect to
this Merger Agreement or the transactions contemplated hereby without the prior
consent of the other Party (which consent shall not be unreasonably withheld),
except as may be required by applicable law or securities
regulation. Upon execution of this Merger Agreement, SARS shall issue
a press release, which shall be approved promptly by the Acquisition
Entities.
(b) Notification of Certain
Matters. The Acquisition Entities shall give prompt written
notice to SARS, and SARS shall give prompt written notice to the Acquisition
Entities, of:
(i) The
occurrence or nonoccurrence of any event the occurrence or nonoccurrence of
which would be likely to cause any representation or warranty contained in this
Merger Agreement to be untrue or inaccurate in any material respect at or prior
to the Effective Time; and
(ii) Any
material failure of the Acquisition Entities on the one hand, or SARS, on the
other hand, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder.
(c) Reasonable Best
Efforts. Before the Closing, upon the terms and subject to the
conditions of this Merger Agreement, the Parties agree to use their respective
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, all things necessary, proper or advisable (subject to
Applicable Law) to consummate and make effective the Merger and other
transactions contemplated by this Merger Agreement as promptly as practicable
including, but not limited to:
(i) The
preparation and filing of all forms, registrations and notices required to be
filed to consummate the Share Exchange and the Merger, including without
limitation, any approvals, consents, orders, exemptions or waivers by any third
party or governmental entity; and
(ii) The
satisfaction of the Party's conditions precedent to the Closing.
(d) Access to
Information
(i) Inspection by the
Acquisition Entities. SARS will make available for inspection
by the Acquisition Entities, during normal business hours and in a manner so as
not to interfere with normal business operations, all of SARS’ records
(including tax records), books of account, premises, contracts and all other
documents in SARS’ possession or control that are reasonably requested by the
Acquisition Entities to inspect and examine the business and affairs of
SARS. SARS will cause its managerial employees and regular
independent accountants to be available upon reasonable advance notice to answer
questions of the Acquisition Entities concerning the business and affairs of
SARS. The Acquisition Entities will treat and hold as confidential
any information it receives from SARS in the course of the reviews contemplated
by this Section 4.03(d). No examination by the Acquisition Entities
will, however, constitute a waiver or relinquishment by the Acquisition Entities
of its rights to rely on SARS’ or the SARS Shareholders’ covenants,
representations and warranties made herein or pursuant hereto.
(ii) Inspection by
SARS. the Acquisition Entities will, if requested, make
available for inspection by SARS, during normal business hours and in a manner
so as not to interfere with normal business operations, all of the records of
the Acquisition Entities (including tax records), books of account, premises,
contracts and all other documents in their possession or control that are
reasonably requested by SARS to inspect and examine the business and affairs of
the Acquisition Entities. The Acquisition Entities will cause its
managerial employees and regular independent accountants to be available upon
reasonable advance notice to answer questions of SARS concerning the business
and affairs of the Acquisition Entities. SARS will treat and hold as
confidential any information it receives from the Acquisition Entities in the
course of the reviews contemplated by this Section 4.03(e). No
examination by SARS will, however, constitute a waiver or relinquishment by SARS
of its rights to rely on the Acquisition Entities’ covenants, representations
and warranties made herein or pursuant hereto.
ARTICLE
V
CONDITIONS
PRECEDENT
SECTION
5.01 CONDITIONS
PRECEDENT TO THE PARTIES' OBLIGATIONS
The obligations of the Parties as
provided herein shall be subject to each of the following conditions precedent,
unless mutually waived in writing by SARS and the Acquisition
Entities:
(a) Consents,
Approvals. The Parties shall have obtained all necessary
consents and approvals of their respective boards of directors, and all
consents, approvals and authorizations required under their respective charter
documents, and all material consents, including any material consents and
waivers by the Parties’ respective lenders and other third parties, if
necessary, to the consummation of the transactions contemplated by this Merger
Agreement.
(b) Shareholder
Approval. This Merger Agreement and the transactions
contemplated hereby shall have been approved by the shareholders of the
Acquisition Entities in accordance with the applicable provisions of the Nevada
Revised Statutes, Illinois Business Corporation Act of 1983 and their respective
corporate bylaws.
(c) Absence of Certain
Litigation. No action or proceeding shall be threatened or
pending before any governmental entity or authority which, in the reasonable
opinion of counsel for the Parties, is likely to result in a restraint,
prohibition or the obtaining of damages or other relief in connection with this
Merger Agreement or the consummation of the transactions contemplated
hereby.
(e) Merger Subsidiary
Formation. SARS shall have formed the Merger Subs as its
wholly owned subsidiaries prior to the Closing Date.
|
SECTION
5.02
|
CONDITIONS
PRECEDENT TO THE OBLIGATIONS OF
|
|
|
SARS
|
The obligations of SARS on the Closing
Date as provided herein shall be subject to the satisfaction, on or prior to the
Closing Date, of the following conditions precedent, unless waived in writing by
SARS:
(a) The Xxxxxxxx Group,
LLC. SARS shall have resolved all outstanding issues related
to the Xxxxxxxx Group, LLC and Xxxxxxx X. Xxxxx; specifically, the outstanding
issues related to the promissory note issued from SARS to The Xxxxxxxx Group,
LLC dated July 1, 2008 (the “Xxxxxxxx
Issues”). In the event SARS has not resolved the Xxxxxxxx
Issues, this Merger Agreement shall be unwound in accordance with Section
6.01(d).
(b) Consents and
Approvals. The Acquisition Entities shall have obtained all
material consents, including any material consents and waivers by the
Acquisition Entities’ lenders and other third parties, if necessary, to the
consummation of the transactions contemplated by this Merger
Agreement.
(c) Representations and
Warranties. The representations and warranties by the
Acquisition Entities in Article III herein shall be true and accurate in all
material respects on and as of the Closing Date with the same force and effect
as though such representations and warranties had been made at and as of the
Closing Date, except to the extent that any changes therein are specifically
contemplated by this Merger Agreement.
(d) Performance. The
Acquisition Entities shall have performed and complied in all material respects
with all agreements to be performed or complied with by it pursuant to this
Agreement at or prior to the Closing.
(e) Proceedings and
Documents. All corporate, company and other proceedings in
connection with the transactions contemplated by this Merger Agreement and all
documents and instruments incident to such transactions shall be satisfactory in
substance and form to SARS and its counsel, and SARS and its counsel shall have
received all such counterpart originals (or certified or other copies) of such
documents as they may request.
(f) Certificate of Good
Standing. The Acquisition Entities shall have delivered to
SARS their respective and individual certificates as to their good standing
certified by the Secretary of State of Illinois or the Tennessee Department of
State on or within fourteen (14) days prior to the Closing Date.
(g) Material
Changes. Except as contemplated by this Merger Agreement,
since the date hereof, the Acquisition Entities shall not have suffered a
Material Adverse Effect, and, without limiting the generality of the foregoing,
there shall be no pending litigation to which the Acquisition Entities is a
party which is reasonably likely to have a Material Adverse Effect on the
Acquisition Entities.
(h) Due
Diligence. SARS shall have completed to its own satisfaction
due diligence in relation to the Acquisition Entities, except that this shall
cease to be a condition precedent unless on or prior to the Closing Date (unless
in the event the Extension is triggered, and therefore, up to sixty (60) days
following the Closing Date), SARS shall have delivered a written notice stating
that it is not satisfied with the results of its due diligence. The Acquisition
Entities shall use their best efforts to provide complete and accurate
information requested by SARS in conducting the due diligence.
(i) Employment
Agreement. Prior to the Closing Date of the Merger Agreement,
SARS, Xxxxx Xxxxxxx and Xxxx Xxxxx shall mutually agree to and execute terms of
employment by SARS.
(j) Financial
Statements. No less than one (1) week prior to the Closing,
the Acquisition Entities shall have delivered to SARS the financial statements
and report of the Acquisition Entities’ independent registered public
accountant.
|
SECTION
5.03
|
CONDITIONS
PRECEDENT TO THE OBLIGATIONS OF
|
|
|
THE
ACQUISITION ENTITIES
|
The obligations of the Acquisition
Entities on the Closing Date as provided herein shall be subject to the
satisfaction, on or prior to the Closing Date, of the following conditions
precedent, unless waived in writing by the Acquisition Entities:
(a) Consents and
Approvals. SARS and the Merger Subs shall have obtained all
material consents, including any material consents and waivers of its respective
lenders and other third parties, if necessary, to the consummation of the
transactions contemplated by this Merger Agreement.
(b) Representations and
Warranties. The representations and warranties by SARS and the
Merger Subs in Article II herein shall be true and accurate in all material
respects on and as of the Closing Date with the same force and effect as though
such representations and warranties had been made at and as of the Closing Date,
except to the extent that any changes therein are specifically contemplated by
this Merger Agreement.
(c) Performance. SARS
and the Merger Subs shall have performed and complied in all material respects
with all agreements to be performed or complied with by it pursuant to this
Merger Agreement prior to or at the Closing.
(d) Proceedings and
Documents. All corporate, company and other proceedings in
connection with the transactions contemplated by this Merger Agreement and all
documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to the Acquisition Entities and its counsel,
and the Acquisition Entities and their counsel shall have received all such
counterpart originals (or certified or other copies) of such documents as they
may reasonably request.
(e) Certificates of Good
Standing. SARS shall have delivered to the Acquisition
Entities a certificate as to its good standing in the State of Nevada, and the
Merger Subs shall have delivered to SARS the Acquisition Entities a certificate
as to their good standing in the State of Nevada, in each case certified by the
Secretary of State not more than fourteen (14) business days prior to the
Closing Date.
(f) Material
Changes. Except as contemplated by this Merger Agreement,
since the date hereof, neither SARS and the Merger Subs shall have suffered a
Material Adverse Effect and, without limiting the generality of the foregoing,
there shall be no pending litigation to which SARS and/or the Merger Subs are a
party which is reasonably likely to have a Material Adverse Effect on the
Parties.
(g) Financing. SARS shall
have secured the Financing to its own satisfaction prior to
Closing.
(h) Due
Diligence. the
Acquisition Entities shall have completed to its own satisfaction due diligence
in relation to SARS, except that this shall cease to be a condition precedent
unless on or prior to the Closing Date (unless in the event the Extension is
triggered, and therefore, up to sixty (60) days following the Closing Date), the
Acquisition Entities shall have delivered a written notice stating that it is
not satisfied with the results of its due diligence;
(i) Status of
SARS. SARS intends make the proper filings in order to be a
fully compliant reporting public company under the Exchange Act, as proscribed
by the Securities Exchange Commission, following the Closing of this Merger
Agreement.
(j) SARS Principal Shareholders’
Holdings. On the date of the Closing, the individuals listed,
which shall be disclosed on Schedule 2.03 prior
to the Closing, shall own up to approximately ten million (10,000,000) of SARS
Common Shares.
(k) SARS Board of
Directors. At the Effective Time of the Merger the officers
and members of the board of directors of SARS shall consist of the persons
designated, which shall be disclosed on Schedule 5.03(j)
prior to the Closing.
(l) Employment
Agreement. Prior to the Closing Date of the Merger Agreement,
SARS, Xxxxx Xxxxxxx and Xxxx Xxxxx shall mutually agree voluntarily terminate
their existing employment agreements with Acquisition Entities and to and
execute terms of employment by SARS..
(l) Financial
Records. SARS shall use their best efforts to provide true and
accurate information relating to its assets, liabilities, condition (financial,
or otherwise) for investigation by the Acquisition Entities.
(m) Loans. Xxxx
Xxxxx and Xxxxx Xxxxx shall have the right to accept or reject the assumption of
any existing loan or extension of any new loan to the extent such assumption or
extension of any such loan includes their personal guaranty.
ARTICLE
VI
TERMINATION
SECTION
6.01 TERMINATION,
UNWINDING
This
Merger Agreement may be terminated and the Merger may be abandoned at any time
prior to the Effective Time by:
(a) The
mutual written consent of the Boards of Directors of SARS and the Acquisition
Entities;
(b) Either
SARS, on the one hand, or the Acquisition Entities, on the other hand, if any
governmental entity or court of competent jurisdiction shall have issued an
order, decree or ruling or taken any other action (which order, decree, ruling
or other action the Parties shall use their commercially reasonable best efforts
to lift), which restrains, enjoins or otherwise prohibits the Share Exchange or
the Merger or the issuance of the Merger Shares as contemplated herein and such
order, decree, ruling or other action shall have become final and
non-appealable;
(c) Either
SARS, on the one hand, or the Acquisition Entities, on the other hand, in the
event of the rejection of due diligence, and that rejection may not be cured
within thirty (30) calendar days after the giving of written notice by one Party
to the other Party.
(d) SARS, if
the Acquisition Entities shall have breached any of its or his representations,
warranties, covenants or other agreements contained in this Merger Agreement,
and the breach cannot be or has not been cured within thirty (30) calendar days
after the giving of written notice by SARS to the Acquisition Entities, or by
SARS, if it is not satisfied with the results of its due diligence investigation
and it so notifies the Acquisition Entities on or before Closing Date (unless in
the event the Extension is triggered, and therefore, up to sixty (60) days
following the Closing Date);
(e) The
Acquisition Entities, if SARS shall have breached in any material respect any of
its representations, warranties, covenants or other agreements contained in this
Merger Agreement, and the breach cannot be or has not been cured within thirty
(30) calendar days after the giving of written notice by the Acquisition
Entities to SARS, or by the Acquisition Entities if it is not satisfied with the
results of its due diligence investigation and it so notifies SARS on or before
Closing Date (unless in the event the Extension is triggered, and therefore, up
to sixty (60) days following the Closing Date);
(f) Without
any action on the part of the Parties if required by Applicable Law or if the
Closing shall not be consummated by the Closing Date (unless in the event the
Extension is triggered, and therefore, up to sixty (60) days following the
Closing Date), unless extended by written agreement of SARS and the Acquisition
Entities; or
(g) At any
time whatsoever during the seven (7) years following the Closing of this Merger
Agreement, this Merger Agreement may be cancelled and unwound by either of the
Parties should any third party creditors of SARS present any act or action which
would jeopardize the ownership of the Acquisition Entities’ assets by
SARS. In the event of cancellation and unwinding of this Merger
Agreement by either of the Parties, as provided herein, this Merger Agreement
shall forthwith become void and have no effect, without any liability or
obligation on the part of the Parties, and such cancellation and unwinding shall
not relieve any party hereto for any intentional breach prior to such
cancellation and unwinding by a party hereto of any of its representations or
warranties or any of its covenants or agreements set forth in this Merger
Agreement. In the event of cancellation and unwinding of this Merger
Agreement, (i) the Acquisition Entities agree to make a good faith effort to
return all consideration tendered and delivered by SARS, as detailed in Section
1.01 of this Merger Agreement; and (ii) SARS agrees to return the Merger Shares
and the assets of the Acquisition Entities.
SECTION
6.02 EFFECT
OF TERMINATION
If this Merger Agreement is terminated
as provided in Section 6.01, written notice of such termination shall be given
by the terminating Party to the other Party specifying the provision of this
Merger Agreement pursuant to which such termination is made, this Merger
Agreement shall become null and void and there shall be no liability on the part
of SARS, the Acquisition Entities, provided, however,
that (a) the provisions of Article VII hereof shall survive the
termination of this Merger Agreement, (b) nothing in this Merger
Agreement shall relieve any Party from any liability or obligation with respect
to any willful breach of this Merger Agreement and (c) termination shall not
affect accrued rights or liabilities of any party at the time of such
termination.
ARTICLE
VII
CONFIDENTIALITY
SECTION
7.01 CONFIDENTIALITY
SARS, on the one hand, and the
Acquisition Entities, on the other hand, will keep confidential all information
and documents obtained from the other, including but not limited to any
information or documents provided pursuant to Section 4.03(e) hereof (except for
any information disclosed to the public pursuant to a press release authorized
by the Parties); and in the event the Closing does not occur or this Merger
Agreement is terminated for any reason, will promptly return such documents and
all copies of such documents and all notes and other evidence thereof, including
material stored on a computer, and will not use such information for its own
advantage, except to the extent that (i) the information must be disclosed by
law, (ii) the information becomes publicly available by reason other than
disclosure by the Party subject to the confidentiality obligation, (iii) the
information is independently developed without use of or reference to the other
Party’s confidential information, (iv) the information is obtained from another
source not obligated to keep such information confidential, or (v) the
information is already publicly known or known to the receiving Party when
disclosed as demonstrated by written documentation in the possession of such
Party at such time.
ARTICLE
VIII
INDEMNIFICATION
SECTION
8.01 INDEMNIFICATION
BY SARS
SARS shall indemnify, defend and hold
harmless each of the Acquisition Entities, any subsidiary or affiliate thereof
and each person who is now, or has been at any time prior to the date hereof or
who becomes prior to the Closing, a shareholder, officer, director or partner of
the Acquisition Entities, any subsidiary or affiliate thereof or an employee of
SARS, any subsidiary or affiliate thereof and their respective heirs, legal
representatives, successors and assigns (the “Acquisition Entities Indemnified
Parties”) against all losses, claims, damages, costs, expenses (including
reasonable attorneys’ fees), liabilities or judgments or amounts that are paid
in settlement of or in connection with any threatened or actual third party
claim, action, suit, proceeding or investigation based in whole or in part on or
arising in whole or in part out of (i) any material breach of this Merger
Agreement by SARS or any subsidiary or affiliate thereof, including but not
limited to failure of any representation or warranty to be true and correct at
or before the Closing, or (ii) omission or conduct of any officer,
director or agent of SARS or any subsidiary or affiliate thereof prior to the
Closing, whether asserted or claimed prior to, at or after, the
Closing. Any SARS Indemnified Party wishing to claim indemnification
under this Section 8.01, upon learning of any such claim, action, suit,
proceeding or investigation, shall notify SARS in writing, but the failure to so
notify shall not relieve SARS from any liability that it may have under this
Section 8.01, except to the extent that such failure would materially prejudice
SARS.
|
SECTION
8.02
|
INDEMNIFICATION
BY THE ACQUISITION COMPANIES
|
The Acquisition Entities shall
indemnify, defend and hold harmless each of SARS, any subsidiary or affiliate
thereof and each person who is now, or has been at any time prior to the date
hereof or who becomes prior to the Closing, a shareholder, officer, director or
partner of SARS, any subsidiary or affiliate thereof or an employee of SARS, any
subsidiary or affiliate thereof and their respective heirs, legal
representatives, successors and assigns (the “SARS Indemnified Party”
collectively, the “SARS
Indemnified Parties”) against all losses, claims, damages, costs,
expenses (including reasonable attorneys’ fees), liabilities or judgments or
amounts that are paid in settlement of or in connection with any threatened or
actual third party claim, action, suit, proceeding or investigation based in
whole or in part on or arising in whole or in part out of (i) any material
breach of this Merger Agreement by the Acquisition Entities, or any subsidiary
or affiliate thereof, including but not limited to failure of any representation
or warranty to be true and correct at or before the Closing, or (ii) omission or
conduct of any officer, director or agent of the Acquisition Entities or any
subsidiary or affiliate thereof prior to the Closing, whether asserted or
claimed prior to, at or after, the Closing. Any SARS Indemnified
Party wishing to claim indemnification under this Section 8.02, upon learning of
any such claim, action, suit, proceeding or investigation, shall notify the
Acquisition Entities in writing, but the failure to so notify shall not relieve
the Acquisition Entities s from any liability that it may have under this
Section 8.02, except to the extent that such failure would materially prejudice
the Acquisition Entities.
SECTION
8.03 INDEMNIFICATION
OF EXCHANGE AGENT
The Parties (for the purposes of this
Section 8.03, the “Indemnitors”) agree to
indemnify the Exchange Agent and his employees and agents (collectively, the
“Indemnitees”) against,
and hold them harmless of and from, any and all loss, liability, cost, damage
and expense, including without limitation, reasonable counsel fees, which the
Indemnitees, or any of them, may suffer or incur by reason of any action, claim
or proceeding brought against the Indemnitees, or any one of them, arising out
of or relating in any way to the Exchange Agent’s service in such capacity,
unless such action, claim or proceeding is the result of the willful misconduct
or gross negligence of any of the Indemnitees.
ARTICLE
IX
MISCELLANEOUS
SECTION
9.01 EXPENSES
Except as contemplated by this Merger
Agreement, all costs and expenses incurred in connection with this Merger
Agreement and the consummation of the Merger contemplated by this Merger
Agreement shall be paid by the Party incurring such expenses.
SECTION
9.02 GOVERNING
LAW
Except to the extent that the laws of
the State of Nevada, the State of Illinois and Tennessee are mandatorily
applicable to the Merger and/or this Merger Agreement, the governing law shall
be the laws of the State of Washington, without giving effect to the principles
of conflicts of laws thereof, as applied to agreements entered into and to be
performed in such state.
SECTION
9.03 VENUE
The Parties agree that any action on
this Agreement shall be brought in a court of competent jurisdiction located in
the State of Washington.
SECTION
9.04 NOTICES
All notices and other communications
under this Merger Agreement shall be in writing and shall be deemed to have been
duly given or made as follows:
(a) If
sent by reputable overnight air courier (such as Federal Express), two (2)
business days after being sent;
(b) If
sent by facsimile transmission, with a copy mailed on the same day in the manner
provided in clause (a) above, when transmitted and receipt is confirmed by the
fax machine; or
|
|
(c)
|
If
otherwise actually personally delivered, when
delivered.
|
All notices and other communications
under this Merger Agreement shall be sent or delivered as follows:
If to the Acquisition Entities,
to:
Environmental
Insulation, Inc.
ESDD,
LLC,
Alternatech,
Inc.,
Swank
Enterprises, Inc. d/b/a Art and Print, Inc.,
Associated
Mechanical, Inc.,
X.X.
Power Plumbing & Heating Company
Attn:
Xxxx Xxxxx
0000
Xxxxxxxxxx Xxxx
Xxxxxxxxxx,
XX 00000
with a
copy to (which shall not constitute notice):
|
|
Xxxxxxx
X. Xxxxxx
|
|
|
The
Law Office of Xxxxxxx X. Xxxxxx
|
|
|
000
Xxxx Xxxx Xxxxxx
|
|
|
Xxxxxx,
Xxxxxxxx 00000
|
|
|
Telephone:
000-000-0000
|
|
|
Facsimile:
000-000-0000
|
If to SARS and/or the Shareholders,
to:
|
|
SARS
Corporation
|
Attn: Xxxxx Xxxxxxx, CEO,
Chairman
000
000xx Xxx XX,
Xxxxx 0000
|
|
Xxxxxxxx,
XX 00000
|
|
|
with
a copy to (which shall not constitute
notice):
|
|
|
Xxxxx
X. Xxxx
|
|
|
The
Xxxx Law Group, PLLC
|
|
|
000
Xxxxx Xx., Xxxxx 0000
|
|
|
Xxxxxxx,
XX 00000
|
|
|
Telephone: 000-000-0000
|
|
|
Facsimile: 000-000-0000
|
Each Party may change its address by
written notice in accordance with this Section.
SECTION
9.045
ENTIRE AGREEMENT
This Merger Agreement (including the
documents and instruments referred to in this Merger Agreement) contains the
entire understanding of the Parties with respect to the subject matter contained
in this Merger Agreement, and supersedes and cancels all prior agreements,
negotiations, correspondence, undertakings and communications of the Parties,
oral or written, respecting such subject matter.
SECTION
9.06 ASSIGNMENT
Neither this Merger Agreement nor any
of the rights, interests or obligations under this Merger Agreement shall be
assigned by any of the Parties (whether by operation of law or otherwise)
without the prior written consent of the other Parties; provided that in no event may
the right to indemnification provided by Article VIII hereto be assigned by any
of the Parties, with or without consent, except by operation of
law. Subject to the immediately foregoing sentence of this Section
9.06, this Merger Agreement will be binding upon, inure to the benefit of and be
enforceable by, the Parties and their respective successors, assigns, heirs and
representatives.
SECTION
9.07 COUNTERPARTS
This Merger Agreement may be executed
in one or more counterparts, each of which shall be deemed to be an original but
all of which shall be considered one and the same agreement.
SECTION
9.08 NO
THIRD PARTY BENEFICIARIES
Except as expressly provided by this
Merger Agreement, nothing herein is intended to confer upon any person or entity
not a Party to this Merger Agreement any rights or remedies under or by reason
of this Merger Agreement.
SECTION
9.09 RULES OF
CONSTRUCTION
The Parties agree that they have been
represented by counsel during the negotiation and execution of this Merger
Agreement and, therefore, waive the application of any law, regulation, holding
or rule of construction providing that ambiguities in an agreement or other
document will be construed against the party drafting such agreement or
document.
[Remainder of page
left intentionally blank; Signature Page to
Follow]
IN WITNESS WHEREOF, the
Parties have duly executed this Merger Agreement as of the date first above
written.
SARS
CORPORATION
|
By:
|
/s/Xxxxx
Xxxxxxx
|
|
Name:
|
Xxxxx
Xxxxxxx
|
|
Title:
|
Chief
Executive Officer, Chairman
|
ENVIRONMENTAL
INSULATION, LLC
|
By:
|
/s/Xxxx
Xxxxx
|
|
Name:
|
Xxxx
Xxxxx
|
Title: Manager
ESDD,
LLC
|
By:
|
/s/Xxxxx
Xxxxxxx
|
|
Name:
|
Xxxxx
Xxxxxxx
|
Title: Manager
ALTERNATECH,
INC.
|
By:
|
/s/Xxxxx
Xxxxxxx
|
|
Name:
|
Xxxxx
Xxxxxxx
|
|
Title:
|
President
|
ASSOCIATED
MECHANICAL, INC.
|
By:
|
/s/Xxxxx
Xxxxxxx
|
|
Name:
|
Xxxxx
Xxxxxxx
|
|
Title:
|
President
|
SWANK
ENTERPRISES, INC. d/b/a ART & PRINT, INC.
|
By:
|
/s/Xxxxx
Xxxxxxx
|
|
Name:
|
Xxxxx
Xxxxxxx
|
|
Title:
|
President
|
X.X.
POWER PLUMBING & HEATING COMPANY
|
By:
|
/s/Xxxxx
Xxxxxxx
|
|
Name:
|
Xxxxx
Xxxxxxx
|
Title: President
EI
ACQUISITION CORP.
|
By:
|
/s/Xxxxx
Xxxxxxx
|
|
Name:
|
Xxxxx
Xxxxxxx
|
Title: President
ESDD
ACQUISITION CORP.
|
By:
|
/s/Xxxxx
Xxxxxxx
|
|
Name:
|
Xxxxx
Xxxxxxx
|
Title: Manager
ALTERNATECH
ACQUISITION CORP.
|
By:
|
|
By:
|
/s/Xxxxx
Xxxxxxx
|
|
Name:
|
Xxxxx
Xxxxxxx
|
|
Title:
|
President
|
AMI
ACQUISITION CORP.
|
By:
|
/s/Xxxxx
Xxxxxxx
|
|
Name:
|
Xxxxx
Xxxxxxx
|
|
Title:
|
President
|
RJP
ACQUISITION CORP.
|
By:
|
|
By:
|
/s/Xxxxx
Xxxxxxx
|
|
Name:
|
Xxxxx
Xxxxxxx
|
|
Title:
|
President
|
Schedule
1.01(e)
Liabilities
of the Acquisition Entities
|
Lines of Credit
|
|
|
Balance
|
|
|
X.
X. Xxxxxxxxxxx & Sons, Inc.
|
|
|
Soy
Capital Bank - Line of Credit
|
886,787.02
|
|
Soy
Capital Bank - Mortgage
|
354,622.75
|
|
Soy
Capital Bank - Line of Credit
|
1,600,000.00
|
|
RJ
Power Plumbing & Heating Company
|
|
|
Associated
Bank
|
|
|
9001
|
1,888,178.37
|
|
9002
|
1,000,000.00
|
|
Associated
Mechanical, Inc.
|
|
|
Associated
Bank
|
|
|
9009
|
919,500.00
|
|
9010
|
558,417.46
|
|
9011
|
495,000.00
|
|
Art
& Print, Inc.
|
|
|
Southside
Bank Business
|
478,908.00
|
|
Total
LOC
|
8,181,413.60
|
|
Loans
|
|
|
Balance
|
|
|
X.
X. Xxxxxxxxxxx & Sons, Inc.
|
|
|
Soy
Capital Bank - 06 Chevy C1500 P/U
|
3,416.23
|
|
Soy
Capital Bank - 06 Chevy C1500 P/U
|
3,898.51
|
|
Soy
Capital Bank - 06 Chevy G30 Van
|
5,911.76
|
|
Soy
Capital Bank - 07 Chevy C1500 P/U
|
2,178.66
|
|
Soy
Capital Bank - 07 Chevy C1500 P/U
|
17,119.76
|
|
GMAC
- 08 Chevy Impala
|
21,854.43
|
|
GMAC
- 05 Chevy Impala
|
10,500.15
|
|
GMAC
- 08 Chevy Malibu
|
18,958.64
|
|
GMAC
- 08 Chevy Silverado
|
29,232.18
|
|
RJ
Power Plumbing & Heating Company
|
|
|
Associated
Mechanical, Inc.
|
|
|
GMAC
(3 vehicles)
|
|
|
Cat
Financial ( 5 Scissor Lifts)
|
|
|
Art
& Print, Inc.
|
|
|
Southside
Bank
|
478,908.89
|
|
Alternatech,
Inc.
|
|
|
None
|
|
|
Total
Loans
|
591,979.21
|
|
Aggregate
LOC & Loans
|
8,773,392.81
|
Schedule
1.09
Certificates
Representing the Merger Shares
Schedule
2.03
Beneficial
Owners of SARS Corporation
Schedule
2.06
Material
Transactions, Obligations, Liabilities of SARS Corporation
(listed
below if applicable, otherwise, N/A)
Schedule
2.09
Indebtedness
to the Officers and Directors of SARS Corporation
(listed
below if applicable, otherwise, N/A)
Schedule
3.02
Beneficial
Owners of the Acquisition Entities
|
1.
|
Environmental
Insulation, LLC
|
|
2.
|
Environmental
Systems Distribution & Design,
LLC
|
|
3.
|
Alternatech,
Inc.
|
|
4.
|
Swank
Enterprises, Inc.(“SEI) d/b/a Art & Print,
Inc.
|
|
5.
|
Associated
Mechanical, Inc. (“AMI”)
|
|
6.
|
X.X.
Power Plumbing & Heating
Company
|
Schedule
3.04
Financial
Statements
|
1.
|
3
year financial statements (detailed schedule re all debt, receivables,
furniture fixtures and equipment and
collateral)
|
|
2.
|
Current
year plus “stub” period
|
|
3.
|
3
year revenue projections (SARS and Acquisition Entities built
in)
|
Schedule
3.05
Assets
of the Acquisition Entities
Schedule
3.06
Material
Contracts of the Acquisition Entities
Schedule
4.01
Changes
to Ordinary Course of Business by the Acquisition Entities
(listed
below if applicable, otherwise, N/A)
Schedule
4.02
Changes
to Ordinary Course of Business by SARS Corporation
(listed
below if applicable, otherwise, N/A)
Schedule
5.03(j)
Officers
and Directors of SARS Corporation
Directors and Officers of
SARS prior to the Closing
|
1.
|
Xxxxx
Xxxxxxx: Chief Executive Officer, President,
Chairman
|
|
2.
|
Xxxxx
X. Xxxx: Secretary, Treasurer,
Director
|
|
3.
|
Xxxxxxx
Xxxxxxx: Chief Technology Officer,
Director
|
Directors and Officers of
SARS following the Closing
|
1.
|
Xxxx
Xxxxx: Chairman, Director
|
|
2.
|
Xxxxx
Xxxxxxx: President, Director, Chief Executive
Officer
|
|
3.
|
Xxxxxxx
Xxxxx: Chief Financial Officer
|
|
4.
|
Xxxxxxx
Xxxxxxx: Chief Technology Officer,
Director
|
|
5.
|
Xxxxx
Xxxxxxx: Director
|
|
6.
|
Xxxxx
X. Xxxx: Director
|
