AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
SHOPPING SHERLOCK, INC., (Florida)
SHOPPING SHERLOCK, INC., (Delaware)
AND
SHOPPING ACQUISITION CORP.
Dated as of May 17, 1999
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is dated for
reference as of May 17, 1999 by and among Shopping Sherlock, Inc., a Delaware
corporation ("DelawareCo"), Shopping Sherlock, Inc., a Florida corporation
("FloridaCo"), and Shopping Acquisition Corp., a Delaware corporation ("Sub").
The parties agree as follows:
1. THE MERGER.
1.1 The Merger. At the Effective Time (as defined in Section 1.2) and
subject to and upon the terms and conditions of this Agreement, Sub shall be
merged into DelawareCo (the "Merger), the separate corporate existence of Sub
shall cease and DelawareCo shall continue as the surviving corporation and as a
wholly-owned subsidiary of FloridaCo. The surviving corporation after the Merger
is hereinafter sometimes referred to as the "Surviving Corporation."
1.2 Effective Time. Unless this Agreement is earlier terminated
pursuant to Section 8.1, the closing of the Merger (the "Closing") will take
place as promptly as practicable, but no later than five (5) business days
following satisfaction or waiver of the conditions set forth in Section 6, at
the offices of 618 - 688 West Hastings Street, Vancouver, British Columbia,
unless another place or time is agreed to in writing by FloridaCo and
DelawareCo. The date upon which the Closing actually occurs is herein referred
to as the "Closing Date." On the Closing Date, the parties hereto shall cause
the Merger to be consummated by filing Articles of Merger (or like instrument)
in the form attached hereto as Exhibit A with the Secretary of State of the
State Delaware (the "Merger Articles"), in accordance with the applicable
provisions of Delaware law (the time of acceptance by the Secretary of State of
the State of Delaware of such filing being referred to herein as the "Effective
Time").
1.3 Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in the applicable provisions of Delaware law.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, all the property, rights, privileges, powers and franchises of
Sub and DelawareCo shall vest in the Surviving Corporation, and all debts,
liabilities and duties of Sub and DelawareCo shall become the debts, liabilities
and duties of the Surviving Corporation.
1.4 Articles of Incorporation, Bylaws. As of the Effective Time, the
Certificate of Incorporation and Bylaws of DelawareCo shall be the Certificate
of Incorporation and Bylaws of the Surviving Corporation.
1.5 Directors and Officers. Directors of the Surviving Corporation
immediately after the Effective Time shall be the directors of FloridaCo
immediately prior to the Effective Time, each to hold the office in accordance
with the provisions of applicable laws and the Bylaws of the Surviving
Corporation, until their successors are duly qualified and elected. The officers
of Surviving Corporation immediately after the Effective Time shall be the
officers of FloridaCo immediately prior to the Effective Time, each to hold
office in accordance with the provisions of the Bylaws of the Surviving
Corporation.
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1.6 Conversion of DelawareCo Common Stock.
(a) At the Effective Time, each share of DelawareCo Common Stock,
par value $0.01 per share ("DelawareCo Common Stock"), upon the terms and
subject to the conditions set forth below shall be converted automatically into
20,000 shares (the "Exchange Ratio") of FloridaCo Common Stock par value $0.001
per share ("FloridaCo Common Stock"). Each share of FloridaCo Common Stock to be
delivered under this Agreement shall be valued at US$ 1.00 per share.
(b) The Exchange Ratio shall be adjusted to reflect fully the
effect of any stock split, reverse split, stock dividend (including any dividend
or distribution of securities convertible into FloridaCo Common Stock or
DelawareCo Common Stock), reorganization, recapitalization or other like charge
with respect to FloridaCo Common Stock or DelawareCo Common Stock occurring
after the date hereof.
(c) No fractional share of FloridaCo Common Stock shall be issued
in the Merger. In lieu thereof, any fractional share shall be rounded up to the
nearest whole share of FloridaCo Common Stock.
(d) Each share of Common Stock of Sub issued and outstanding
immediately prior to the Effective Time shall be converted into and exchanged
for one validly issued, fully paid and nonassessable share of Common Stock of
the Surviving Corporation. Each stock certificate of Sub evidencing ownership of
any such shares shall continue to evidence ownership of such shares of capital
stock of the Surviving Corporation.
1.7 Surrender of Certificates.
(a) Exchange Agent. The Corporate Secretary of FloridaCo shall
serve as exchange agent (the "Exchange Agent") in the Merger.
(b) FloridaCo to Provide Cash and Common Stock. Promptly after
the Effective Time, FloridaCo shall make available to the Exchange Agent for
exchange in accordance with this Section, the shares of FloridaCo Common Stock
issuable pursuant to Section 1.6(b) in exchange for all of the outstanding
shares of DelawareCo Common Stock.
(c) Exchange Procedures. On or after the Closing Date, the
holders of DelawareCo Common Stock will surrender the certificates representing
their DelawareCo Common Stock (the "DelawareCo Stock Certificate") to FloridaCo
for cancellation together with a letter of transmittal in such form and having
such provisions that FloridaCo reasonably requests. Promptly following the
Effective Time, FloridaCo will issue to the such stockholders certificates for
the number of shares of FloridaCo Common Stock to which such stockholders are
entitled pursuant to Section 1.6.
(d) Transfers of Ownership. If any certificate for shares of
FloridaCo Common Stock is to be issued in a name other than that in which the
certificate surrendered in exchange therefor is registered or if any cash is to
be delivered to a person other than the person whose name is on the certificate
surrendered, it will be a condition to the issuance and/or delivery thereof that
the certificate so surrendered will be properly endorsed and otherwise in proper
form for transfer and that the person requesting such exchange will have paid to
FloridaCo or any agent designated by it any transfer or other taxes required by
reason or the issuance of a certificate for shares of FloridaCo Common Stock or
the delivery of any cash in any name other than that of the registered holder of
the certificate surrendered, or established to the satisfaction of FloridaCo or
any agent designated by it that such tax has been paid or is not payable.
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(e) No Liability. Notwithstanding anything to the contrary in
this Section 1.7, none of the Exchange Agent, the Surviving Corporation or any
party hereto shall be liable to a holder of shares of FloridaCo Common Stock or
DelawareCo Common Stock for any amount properly paid to a public official
pursuant to any applicable abandoned property, escheat or similar law.
1.8 No Further Ownership Rights in DelawareCo Common Stock. All shares
of FloridaCo Common Stock issued upon the surrender for exchange of shares of
DelawareCo Common Stock in accordance with the terms hereof, and any cash paid
in respect thereof, shall be deemed to be full satisfaction of all rights
pertaining to such shares of DelawareCo Common Stock, and there shall be no
further registration of transfers on the records of the Surviving Corporation of
shares of DelawareCo Common Stock which were outstanding immediately prior to
the Effective Time. If, after the Effective Time, DelawareCo Stock Certificates
are presented to the Surviving Corporation for any reason, they shall be
canceled and exchanged as provided in this Section 1.
1.9 Lost, Stolen or Destroyed Certificates. In the event any
certificates evidencing shares of DelawareCo Common Stock shall have been lost,
stolen or destroyed, the Exchange Agent shall issue in exchange for such lost,
stolen or destroyed certificates, upon the making of an affidavit of that fact
by the holder thereof, such amount, if any, as may be required pursuant to
Section 1.6; provided, however, that FloridaCo may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed certificates to deliver a bond or indemnity in such sum as
it may reasonably direct against any claim that may be made against FloridaCo or
the Exchange Agent with respect to the certificates alleged to have been lost,
stolen or destroyed.
1.10 Tax Consequences. It is intended by the parties hereto that the
Merger will constitute a reorganization within the meaning of Section 368 of the
Internal Revenue Code of 1986, as amended. Each party has consulted with its own
tax advisors with respect to the tax consequences of the Merger.
1.11 Taking of Necessary Action; Further Action. If, at any time after
the Effective Time, any such further action is necessary or desirable to carry
out the purposes of this Agreement and to vest the Surviving Corporation with
full right, title and possession to all assets, property, rights, privileges,
powers and franchises of DelawareCo, the officers and directors of DelawareCo
and FloridaCo are fully authorized in the name of their respective corporations
or otherwise to take, and will take, all such lawful and necessary action.
2. REPRESENTATIONS AND WARRANTIES OF FLORIDACO
FloridaCo hereby represents and warrants to DelawareCo, subject to such
exceptions as are specifically disclosed in the FloridaCo Disclosure Schedule
(referencing the appropriate Section and paragraph numbers) supplied by
FloridaCo to DelawareCo (the "FloridaCo Disclosure Schedule") and dated as of
the date hereof, as follows:
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2.1 Organization of FloridaCo. Each of FloridaCo and Sub is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Florida and Delaware, respectively. Each has the corporate power
to own its properties and to carry on its business as proposed to be conducted
following the Effective Date. FloridaCo is duly qualified to do business and in
good standing as a foreign corporation in each jurisdiction in which the failure
to be so qualified could have a material adverse effect on the business, assets
(including intangible assets), condition (financial or otherwise), results of
operations or prospects of FloridaCo (hereinafter referred to as a "Material
Adverse Effect"). DelawareCo has delivered a true and correct copy of its
Articles of Incorporation and Bylaws and the Certificate of Incorporation and
Bylaws of Sub, each as amended to date, to DelawareCo. Messrs. Xxxx Xxxxx,
Xxxxxx Xxxxxxxx, and Xxxxxxx Xxxxxxx are all of the directors of FloridaCo.
FloridaCo has two officers. Mr. Xxxx Xxxxx holds the office of President of
FloridaCo. Mr. Xxxxxxx XxXxxxx holds the offices of Corporate Secretary and
Chief Financial Officer of FloridaCo. Mr. Xxxx Xxxxx is the sole director and
officer of Sub. Neither FloridaCo nor Sub has ever has never conducted any
operations.
FloridaCo Capital Structure.
(a) The authorized capital stock of FloridaCo consists of
50,000,000 shares of authorized Common Stock, par value $0.001 per share, of
which 7,000,000 shares are issued. All outstanding shares of FloridaCo Common
Stock are duly authorized, validly issued, fully paid and non-assessable and not
subject to preemptive rights created by statute, the Articles of Incorporation
or Bylaws of FloridaCo or any agreement to which FloridaCo is a party or by
which it is bound and have been issued in compliance with federal and state
securities laws. FloridaCo has no other capital stock authorized, issued or
outstanding.
(b) There are no options, warrants, calls, rights, commitments or
agreements of any character, written or oral, to which FloridaCo or any of its
shareholders is a party or by which FloridaCo or any of its shareholders is
bound obligating FloridaCo or any of its shareholders to issue, deliver, sell,
repurchase or redeem, or cause to be issued, delivered, sold, repurchased or
redeemed, any shares of the capital stock of FloridaCo or obligating FloridaCo
to grant, extend, accelerate the vesting of, change the price of, otherwise
amend or enter into any such option warrant, call, right, commitment or
agreement. There are no outstanding or authorized stock appreciation, phantom
stock, profit participation, or other similar rights with respect to FloridaCo.
There are no voting trusts, proxies, or other agreements or understandings with
respect to the voting stock of FloridaCo.
(c) The shares of FloridaCo Common Stock to be issued pursuant to
the Merger will be duly authorized, validly issued, fully paid, non-assessable.
(d) The FloridaCo Common Stock has been duly approved for
quotation on the OTC Bulletin Board maintained by the National Association of
Securities Dealers.
2.2 Subsidiaries. FloridaCo does not have, and has never had, any
subsidiaries or affiliated companies other than Sub and does not otherwise own,
and has not otherwise owned, any shares in the capital of or any interest in, or
control, directly or indirectly, any other corporation, partnership,
association, joint venture or other business entity. FloridaCo owns all of the
outstanding securities of Sub.
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2.3 Authority. FloridaCo, and Sub have all requisite power and
authority to enter into this Agreement and any Related Agreements (as
hereinafter defined) to which they are a party and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and any Related Agreements to which they are a party and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of FloridaCo and Sub,
and no further action is required on the part of FloridaCo or Sub to authorize
the Agreement, any Related Agreements to which it they are a party and the
transactions contemplated hereby and thereby. This Agreement and any Related
Agreements to which FloridaCo and Sub are a party have been duly executed and
delivered by FloridaCo or Sub, as the case may be, and, assuming the due
authorization, execution and delivery by the other parties hereto and thereto,
constitute the valid and binding obligation of FloridaCo or Sub, as the case may
be, enforceable in accordance with their respective terms, subject to the laws
of general application relating to bankruptcy, insolvency and the relief of
debtors, and to rules of law governing specific performance, injunctive relief
or other equitable remedies. The "Related Agreements" shall mean all such
ancillary agreements required in this Agreement to be executed and delivered in
connection with the transactions contemplated hereby.
2.4 Conflict. The execution and delivery of this Agreement and any
Related Agreements to which they are a party by FloridaCo and Sub do not, and,
the consummation of the transactions contemplated hereby and thereby will not,
conflict with, or result in any violation of, or default under (with or without
notice or lapse of time, or both), or give rise to a right of termination,
cancellation, modification or acceleration of any obligation or loss of any
benefit under (any such event, a "Conflict") (i) any provision of the Articles
of Incorporation and Bylaws of FloridaCo or Sub, (ii) any mortgage, indenture,
lease, contract or other agreement or instrument, permit, concession, franchise
or license to which FloridaCo or Sub or any of their respective properties or
assets are subject, or (iii) any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to FloridaCo or Sub or their respective
properties or assets.
2.5 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 ("Governmental Entity") or any
third party, including a party to any agreement with FloridaCo or Sub (so as not
to trigger any Conflict), is required by or with respect to FloridaCo or Sub in
connection with the execution and delivery of this Agreement and any Related
Agreements to which FloridaCo or Sub are a party or the consummation of the
transactions contemplated hereby and thereby, except for (i) such consents,
waivers, approvals, orders, authorizations, registrations, declarations and
filings as may be required under applicable securities laws thereby, and (ii)
the filing of the Merger Articles with the Secretary of State of the Delaware.
2.6 FloridaCo Financial Statements. FloridaCo has provided DelawareCo
with a copy of it's audited balance sheets as of July 22, 1998, December 31,
1997 and December 31, 1996 and the related audited statements of operations,
stockholders' equity and cash flow for the periods then ended (the "Audited
Financials"). The Audited Financials are correct in all material respects and
have been prepared in accordance with GAAP applied on a basis consistent
throughout the periods indicated. The Audited Financials present fairly the
financial condition, operating results and cash flows of FloridaCo as of the
dates and during the periods indicated therein.
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2.7 No Undisclosed Liabilities. FloridaCo and Sub do not have any
liability, indebtedness, obligation, expense, claim, deficiency, guaranty or
endorsement of any type, whether accrued, absolute, contingent, matured,
unmatured or other (whether or not required to be reflected in financial
statements in accordance with GAAP).
2.8 No Changes. Since inception of FloridaCo, there has not been,
occurred or arisen any:
(a) transaction, commitment or obligation by FloridaCo of any
kind other than the stock issuances described in paragraph (b) hereof;
(b) issuance or sale, or contract to issue or sell, by FloridaCo
of any shares of FloridaCo Common Stock, or securities exchangeable, convertible
or exercisable therefor, or any securities, warrants, options or rights to
purchase any of the foregoing, except for the issuance of 7,000,000 shares of
FloridaCo Common Stock;
(c) negotiation or agreement by FloridaCo or any officer or
employees thereof to do any of the things described in the preceding clauses (a)
or (b) (other than negotiations with DelawareCo and its representatives
regarding the transactions contemplated by this Agreement).
2.9 Restrictions on Business Activities. There is no agreement
(noncompete or otherwise), commitment, judgment, injunction, order or decree to
which FloridaCo is a party or otherwise binding upon FloridaCo which has or may
have the effect of prohibiting or impairing any business practice of FloridaCo
or the Surviving Corporation, any acquisition of property (tangible or
intangible) by FloridaCo or the Surviving Corporation or the conduct of business
by FloridaCo or the Surviving Corporation.
2.10 Agreements, Contracts and Commitments. FloridaCo is not a party
to nor is it bound by any contracts, obligations or agreements or any kind.
FloridaCo is in compliance with and has not breached, violated or defaulted
under, or received notice that it has breached, violated or defaulted under, any
of the terms or conditions of any agreement, contract, covenant, instrument,
lease, license or commitment to which FloridaCo is a party or by which it is
bound (collectively a "Contract"), nor is FloridaCo aware of any event that
would constitute such a breach, violation or default with the lapse of time,
giving of notice or both. FloridaCo has obtained, or will obtain prior to the
Closing Date, all necessary consents, waivers and approvals as are required in
connection with the Merger.
2.11 Litigation. There is no action, suit or proceeding of any nature
pending, or, to FloridaCo's knowledge, threatened, against FloridaCo, its
properties or any of its officers or directors, nor, to the knowledge of
FloridaCo, is there any reasonable basis therefor. There is no investigation
pending or, to FloridaCo's knowledge threatened, against FloridaCo, its
properties or any of its officers or directors (nor, to the best knowledge of
FloridaCo, is there any reasonable basis therefor) by or before any Governmental
Entity. No Governmental Entity has at any time challenged or questioned the
legal right of FloridaCo or any subsidiary to conduct its operations as
presently or previously conducted.
2.12 Minute Books. The minutes of FloridaCo made available to counsel
for DelawareCo are the only minutes of FloridaCo and contain a reasonably
accurate summary of all meetings of the Board of Directors (or committees
thereof) of FloridaCo and its shareholders or actions by written consent since
the time of incorporation of FloridaCo.
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2.13 Brokers' and Finders' Fees: Third Party Expenses. FloridaCo has
not incurred, nor will it incur, directly or indirectly, any liability for
brokerage or finders' fees or agents' commissions or any similar charges in
connection with the Agreement or any transaction contemplated hereby.
2.14 Compliance with Laws. FloridaCo has complied with, is not in
violation of, and has not received any notices of violation with respect to, any
foreign, federal, state or local statute, law or regulation.
2.15 Complete Copies of Materials. FloridaCo has delivered or made
available true and complete copies of each document (or summaries of same) that
has been requested by DelawareCo or its counsel.
2.16 Representations Complete. None of the representations or
warranties made by FloridaCo or Sub (as modified by the FloridaCo Disclosure
Schedule), nor any statement made in any Schedule or certificate furnished by
FloridaCo or Sub pursuant to this Agreement or finished in or in connection with
documents mailed or delivered to the shareholders of FloridaCo for use in
soliciting their consent to this Agreement and the Merger contains or will
contain at the Effective Time, any untrue statement of a material fact, or omits
or will omit at the Effective Time to state any material fact necessary in order
to make the statements contained herein or therein, in the light of the
circumstances under which made, not misleading.
3. REPRESENTATIONS AND WARRANTIES OF DELAWARECO.
DelawareCo represents and warrants to FloridaCo as follows:
3.1 Organization Standing and Power. DelawareCo is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. DelawareCo has the corporate power to own its properties and to carry
on its business as now being conducted and is duly qualified to do business and
is in good standing in each jurisdiction in which the failure to be so qualified
would have a material adverse effect on the ability of DelawareCo to consummate
the transactions contemplated hereby.
3.2 Authority. DelawareCo has all requisite corporate power and
authority to enter into this Agreement and the Related Agreements and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Related Agreements and the consummation of
the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on the part of DelawareCo except that the Merger
must be approved by the stockholders of DelawareCo. This Agreement has been duly
executed and delivered by DelawareCo and constitutes, and the Related
Agreements, when duly executed and delivered by DelawareCo, will constitute the
valid and binding obligations of DelawareCo, enforceable in accordance with
their terms, except as such enforceability may be limited by principles of
public policy and subject to the laws of general application relating to
bankruptcy, insolvency and the relief of debtors and rules of law governing
specific performance, injunctive relief or other equitable remedies.
3.3 Capital Structure.
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(a) The authorized stock of DelawareCo consists of 1,000 shares
of Common Stock, $0.01 par value, of which 100 shares are issued and
outstanding. All outstanding shares of DelawareCo Common Stock are duly
authorized, validly issued, fully paid and non-assessable and not subject to
preemptive rights created by statute, the Articles of Incorporation or Bylaws of
DelawareCo or any agreement to which DelawareCo is a party or by which it is
bound and have been issued in compliance with federal and state securities laws.
DelawareCo has no other capital stock authorized, issued or outstanding.
(b) There are no options, warrants, calls, rights, commitments or
agreements of any character, written or oral, to which DelawareCo or any of its
shareholders is a party or by which FloridaCo or any of its shareholders is
bound obligating DelawareCo or any of its shareholders to issue, deliver, sell,
repurchase or redeem, or cause to be issued, delivered, sold, repurchased or
redeemed, any shares of the capital stock of DelawareCo or obligating DelawareCo
to grant, extend, accelerate the vesting of, change the price of, otherwise
amend or enter into any such option warrant, call, right, commitment or
agreement. There are no outstanding or authorized stock appreciation, phantom
stock, profit participation, or other similar rights with respect to DelawareCo.
There are no voting trusts, proxies, or other agreements or understandings with
respect to the voting stock of DelawareCo. .
3.4 Conflict. The execution and delivery of this Agreement and any
Related Agreements to which it is a party by DelawareCo do not, and, the
consummation of the transactions contemplated hereby and thereby will not,
conflict with, or result in any violation of, or default under (with or without
notice or lapse of time, or both), or give rise to a right of termination,
cancellation, modification or acceleration of any obligation or loss of any
benefit under (any such event, a "Conflict") (i) any provision of the Articles
of Incorporation and Bylaws of DelawareCo, (ii) any mortgage, indenture, lease,
contract or other agreement or instrument, permit, concession, franchise or
license to which DelawareCo or any of its properties or assets are subject, or
(iii) any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to DelawareCo or its properties or assets.
3.5 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 ("Governmental Entity") or any
third party, including a party to any agreement with DelawareCo (so as not to
trigger any Conflict), is required by or with respect to DelawareCo in
connection with the execution and delivery of this Agreement and any Related
Agreements to which DelawareCo is a party or the consummation of the
transactions contemplated hereby and thereby, except for (i) such consents,
waivers, approvals, orders, authorizations, registrations, declarations and
filings as may be required under applicable securities laws thereby, and (ii)
the filing of the Merger Articles with the Secretary of State of the Delaware.
3.6 DelawareCo Financial Statements. DelawareCo has furnished
FloridaCo with a true and complete copy of its unaudited balance sheet as of
April 30, 1999, (the "DelawareCo Financials"). The DelawareCo Financials present
fairly the financial condition of DelawareCo as of the date indicated therein,
subject, to year-end adjustments.
3.7 Restrictions on Business Activities. Other than license and other
restrictions included in agreements entered into in the ordinary course of
business, there is no agreement (noncompete or otherwise), commitment, judgment,
injunction, order or decree to which DelawareCo is a party or otherwise binding
upon DelawareCo which has or may have the effect of prohibiting or impairing any
business practice of DelawareCo or the Surviving Corporation, any acquisition of
property (tangible or intangible) by DelawareCo or the Surviving Corporation or
the conduct of business by DelawareCo or the Surviving Corporation.
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3.8 Agreements, Contracts and Commitments. DelawareCo is in compliance
with and has not breached, violated or defaulted under, or received notice that
it has breached, violated or defaulted under, any of the terms or conditions of
any agreement, contract, covenant, instrument, lease, license or commitment to
which DelawareCo is a party or by which it is bound (collectively a "Contract"),
nor is DelawareCo aware of any event that would constitute such a breach,
violation or default with the lapse of time, giving of notice or both.
DelawareCo has obtained, or will obtain prior to the Closing Date, all necessary
consents, waivers and approvals as are required in connection with the Merger.
3.9 Litigation. There is no action, suit or proceeding of any nature
pending, or, to DelawareCo's knowledge, threatened, against DelawareCo, its
properties or any of its officers or directors, nor, to the knowledge of
DelawareCo, is there any reasonable basis therefor. There is no investigation
pending or, to DelawareCo's knowledge threatened, against DelawareCo, its
properties or any of its officers or directors (nor, to the best knowledge of
DelawareCo, is there any reasonable basis therefor) by or before any
Governmental Entity. No Governmental Entity has at any time challenged or
questioned the legal right of DelawareCo to conduct its operations as presently
or previously conducted.
3.10 Minute Books. The minutes of DelawareCo made available to counsel
for FloridaCo are the only minutes of DelawareCo and contain a reasonably
accurate summary of all meetings of the Board of Directors (or committees
thereof) of DelawareCo and its shareholders or actions by written consent since
the time of incorporation of DelawareCo.
3.11 Brokers' and Finders' Fees: Third Party Expenses. DelawareCo has
not incurred, nor will it incur, directly or indirectly, any liability for
brokerage or finders' fees or agents' commissions or any similar charges in
connection with the Agreement or any transaction contemplated hereby.
3.12 Compliance with Laws. DelawareCo has complied with in all
material respects, is not in violation of, and has not received any notices of
violation with respect to, any foreign, federal, state or local statute, law or
regulation.
3.13 Complete Copies of Materials. DelawareCo has delivered or made
available true and complete copies of each document (or summaries of same) that
has been requested by FloridaCo or its counsel.
3.14 Representations Complete. None of the representations or
warranties made by DelawareCo (as modified by the DelawareCo Disclosure
Schedule), nor any statement made in any Schedule or certificate furnished by
DelawareCo pursuant to this Agreement or finished in or in connection with
documents mailed or delivered to the shareholders of DelawareCo for use in
soliciting their consent to this Agreement and the Merger contains or will
contain at the Effective Time, any untrue statement of a material fact, or omits
or will omit at the Effective Time to state any material fact necessary in order
to make the statements contained herein or therein, in the light of the
circumstances under which made, not misleading.
4. CONDUCT PRIOR TO THE EFFECTIVE TIME.
4.1 Conduct of Business of DelawareCo. During the period from the date
of this Agreement and continuing until the earlier of the termination of this
Agreement or the Effective Time, DelawareCo agrees that it shall not:
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(a) issue, grant, deliver or sell or authorize or propose the
issuance, grant, delivery or sale of, or purchase or propose the purchase of,
any shares of its capital stock or securities convertible into, or
subscriptions, rights, warrants or options to acquire, or other agreements or
commitments of any character obligating it to issue any such shares or other
convertible securities except if in connection therewith, it negotiates a
proportionate adjustment in the Exchange Ratio.
(b) cause or permit any amendments to its Articles of
Incorporation or Bylaws; or
(c) Take, or agree in writing or otherwise to take, any of the
actions described in Sections 4.1 above, or any other action that would prevent
DelawareCo from performing or cause DelawareCo not to perform its covenants
hereunder.
4.2 Conduct of Business of FloridaCo. During the period from the date
of this Agreement and continuing until the earlier of the termination of this
Agreement or the Effective Time, FloridaCo agrees that it shall not:
(a) issue, grant, deliver or sell or authorize or propose the
issuance, grant, delivery or sale of, or purchase or propose the purchase of,
any shares of its capital stock or securities convertible into, or
subscriptions, rights, warrants or options to acquire, or other agreements or
commitments of any character obligating it to issue any such shares or other
convertible securities except if in connection therewith, it negotiates a
proportionate adjustment in the Exchange Ratio;
(b) enter into any contract, arrangement or obligation of any
kind;
(c) cause or permit any amendments to its Articles of
Incorporation or Bylaws; or
(d) Take, or agree in writing or otherwise to take, any of the
actions described in Sections 4.2 above, or any other action that would prevent
FloridaCo from performing or cause FloridaCo not to perform its covenants
hereunder.
5. ADDITIONAL AGREEMENTS.
5.1 Sale of Shares. The parties hereto acknowledge and agree that the
shares of FloridaCo Common Stock issuable to the stockholders of DelawareCo
pursuant to Section 1.6 (the "Merger Shares") shall constitute "restricted
securities" within the meaning of the Securities Act. The certificates for the
Merger Shares shall bear appropriate legends to identify such privately placed
shares as being restricted under the Securities Act, to comply with applicable
state securities laws and, if applicable, to notice the restrictions on transfer
of such shares.
5.2 Stockholder Approval. DelawareCo and FloridaCo shall promptly
submit this Agreement and the transactions contemplated hereby to their
stockholders for approval and adoption as required by law.
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5.3 Access to Information. Each party shall afford the other and its
accountants, counsel and other representatives, reasonable access during normal
business hours during the period prior to the Effective Time to (a) all of such
party's properties, books, contracts, commitments and records and (b) all other
information concerning the business, properties and personnel (subject to
restrictions imposed by applicable law) of such party as the other may
reasonably request. No information or knowledge obtained in any investigation
pursuant to this Section shall affect or be deemed to modify any representation
or warranty contained herein or the conditions to the obligations of the parties
to consummate the Merger.
5.4 Confidentiality. Each party acknowledges that in the course of the
performance of this Agreement, it may obtain the Confidential Information of the
other party. The Receiving Party shall, at all times, both during the term of
this Agreement and thereafter, keep in confidence and trust all of the
Disclosing Party's Confidential Information received by it. The Receiving Party
shall not use the Confidential Information of the Disclosing Party other than as
expressly permitted under the terms of this Agreement or by a separate written
agreement. The Receiving Party shall take all reasonable steps to prevent
unauthorized disclosure or use of the Disclosing Party's Confidential
Information and to prevent it from falling into the public domain or into the
possession of unauthorized persons. The Receiving Party shall not disclose
Confidential Information of the Disclosing Party to any person or entity other
than its officers or employees (or outside legal, financial or accounting
advisors) who need access to such Confidential Information in order to effect
the intent of this Agreement and who have entered into confidentiality
agreements with such person's employer or who are subject to ethical
restrictions on disclosure which protects the Confidential Information of the
Disclosing Party. The Receiving Party shall immediately give notice to the
Disclosing Party of any unauthorized use or disclosure of Disclosing Party's
Confidential Information. The Receiving Party agrees to assist the Disclosing
Party to remedy such unauthorized use or disclosure of its Confidential
Information. These obligations shall not apply to the extent that Confidential
Information includes information which:
(a) is already known to the Receiving Party at the time of
disclosure, which knowledge the Receiving Party shall have the burden of
proving;
(b) is, or through no act or failure to act of the Receiving
Party becomes, publicly known;
(c) is received by the Receiving Party from a third party without
restriction on disclosure (although this exception shall not apply if such third
party is itself violating a confidentiality obligation by making such
disclosure);
(d) is independently developed by the Receiving Party without
reference to the Confidential Information of the Disclosing Party, which
independent development the Receiving Party will have the burden of proving;
(e) is approved for release by written authorization of the
Disclosing Party; or
(f) is required to be disclosed by a Government Body to further
the objectives of this Agreement or by a proper order of a court of competent
jurisdiction; provided, however that the Receiving Party will use its best
efforts to minimize such disclosure and will consult with and assist the
Disclosing Party in obtaining a protective order prior to such disclosure.
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5.5 Expenses. Whether or not the Merger is consummated, all fees and
expenses incurred in connection with the Merger including, without limitation,
all legal, accounting, financial advisory, consulting and all other fees and
expenses of third parties ("Third Party Expenses") incurred by a party in
connection with the negotiation and effectuation of the terms and conditions of
this Agreement and the transactions contemplated hereby, shall be the obligation
of the respective party incurring such fees and expenses.
5.6 Public Disclosure. Unless otherwise required by law, prior to the
Effective Time, no disclosure (whether or not in response to an inquiry) of the
subject matter of this Agreement shall be made by any party hereto unless
approved by FloridaCo and DelawareCo prior to release, provided that such
approval shall not be unreasonably withheld.
5.7 Consents. Each party shall use its best efforts to obtain the
consents, waivers and approvals as may be required in connection with the Merger
so as to preserve all rights of, and benefits to, such party following the
Merger.
5.8 Reasonable Effort. Subject to the terms and conditions provided in
this Agreement, each of the parties hereto shall use commercially reasonable
efforts to take promptly, or cause to be taken, all actions, and to do promptly,
or cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to complete and make effective the transactions
contemplated hereby, to obtain all necessary waivers, consents and approvals and
to effect all necessary registrations and filings and to remove any injunctions
or other impediments or delays, legal or otherwise, in order to consummate and
make effective the transactions contemplated by this Agreement for the purpose
of securing to the parties hereto the benefits contemplated by this Agreement.
5.9 Notification of Certain Matters. Each party shall give prompt
notice to the other of (i) the occurrence or non-occurrence of any event, the
occurrence or non-occurrence of which is likely to cause any representation or
warranty of such party contained in this Agreement to be untrue or inaccurate at
or prior to the Effective Time and (ii) any failure of such party to comply with
or satisfy any covenant, condition or agreement to be complied with or satisfied
by it hereunder; provided, however, that the delivery of any notice pursuant to
this Section shall not limit or otherwise affect any remedies available to the
party receiving such notice.
5.10 Additional Documents and Further Assurances. Each party hereto,
at the request of another party hereto, shall execute and deliver such other
instruments and do and perform such other acts and things as may be necessary or
desirable for effecting completely the consummation of this Agreement and the
transactions contemplated hereby.
6. CONDITIONS TO THE MERGER.
6.1 Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) No Injunctions or Restraints; Illegality. 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, nor shall any
proceeding brought by an administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, seeking any of
the foregoing be pending; nor shall there be any action taken, or any statute,
rule, regulation or order enacted, entered, enforced or deemed applicable to the
Merger, which makes the consummation of the Merger illegal.
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(b) Governmental Approval. Approvals from Governmental Entities
(if any) deemed appropriate or necessary by any party to this Agreement shall
have been timely obtained.
(c) Litigation. There shall be no bona fide action, suit, claim
or proceeding of any nature pending, or overtly threatened, against the
FloridaCo or DelawareCo, their respective properties or any of their officers or
directors, arising out of, or in any way connected with, the Merger or the other
transactions contemplated by the terms of this Agreement.
(d) Strategic Alliance Agreement: Ecommerce, Marketing and
Operations. The Strategic Alliance Agreement: Ecommerce, Marketing and
Operations between DelawareCo and PLIC, Inc. dated February 4, 1999, will be in
good standing and will not be canceled or compromised as a result of the
proposed change of control of DelwareCo as a result of this Agreement.
6.2 Additional Conditions to Obligations of DelawareCo. The
obligations of DelawareCo to consummate and effect this Agreement and the
transactions contemplated hereby shall be subject to the satisfaction at or
prior to the Effective Time of each of the following conditions, any of which
may be waived, in writing, exclusively by DelawareCo:
(a) Representations, Warranties and Covenants. The
representations and warranties of FloridaCo and Sub in this Agreement shall be
true and correct in all material respects on and as of the Effective Time as
though such representations and warranties were made on and as of such time and
each of FloridaCo and Sub shall have performed and complied in all material
respects with all covenants and obligations of this Agreement required to be
performed and complied with by it as of the Effective Time.
(b) Claims. There shall not have occurred any claims (whether or
not asserted in litigation) of any kind which may adversely affect the
consummation of the transactions contemplated hereby or the business, assets
(including intangible assets), financial condition or results of operations of
FloridaCo or DelawareCo.
(c) Certificate of President. DelawareCo shall have been provided
with a certificate executed on behalf of FloridaCo by its President to the
effect that, as of the Effective Time:
(i) all representations and warranties made by the FloridaCo
and Sub in this Agreement are true and correct in all material respects;
(ii) all covenants and obligations of this Agreement to be
performed by the FloridaCo and Sub on or before such date have been so performed
in all material respects.
(iii) the conditions set forth in Section 6.1 and 6.2 have
been satisfied.
6.3 Additional Conditions to the Obligations of FloridaCo. The
obligations of FloridaCo to consummate and effect this Agreement and the
transactions contemplated hereby shall be subject to the satisfaction at or
prior to the Effective Time of each of the following conditions, any of which
may be waived, in writing, exclusively by FloridaCo:
13
(a) Representations, Warranties and Covenants. The
representations and warranties of DelawareCo in this Agreement shall be true and
correct in all material respects on and as of the Effective Time as though such
representations and warranties were made on and as of the Effective Time and
DelawareCo shall have performed and complied in all material respects with all
covenants and obligations of this Agreement required to be performed and
complied with by it as of the Effective Time.
(b) Claims. There shall not have occurred any claims (whether or
not asserted in litigation) which may materially and adversely affect the
consummation of the transactions contemplated hereby or may have a material
adverse effect on DelawareCo.
(c) Third Party Consents. Any and all consents, waivers, and
approvals required by DelawareCo shall have been obtained.
(d) No Material Adverse Changes. There shall not have occurred
any material adverse change in the business, assets (including intangible
assets), results of operations, liabilities (contingent or accrued), financial
condition or prospects of DelawareCo since the date of this Agreement.
(e) Certificate of DelawareCo. FloridaCo shall have been provided
with a certificate executed on behalf of DelawareCo by its President to the
effect that, as of the Effective Time:
(i) all representations and warranties made by DelawareCo in
this Agreement are true and correct in all material respects; and
(ii) all covenants and obligations of this Agreement to be
performed by DelawareCo on or before such date have been so performed in all
material respects.
(iii) the provisions set forth in Section 6.3 have been
satisfied.
(f) Officers and Directors. The officers and directors of
DelawareCo, other than Mr. Xxxxxxx Xxxxxxx, shall have submitted written
resignations effective as of the Closing and the officers and directors of
FloridaCo shall have been appointed as the officers and directors of the
Surviving Corporation effective as of the Closing.
7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
7.1 Survival of Representations and Warranties. FloridaCo's and Sub's
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall terminate on the sixth (6) month anniversary of
the Effective Time; provided, however, that the representations and warranties
relating or pertaining to any Tax or Returns related to such Tax set forth in
Section 2 hereof, shall survive until the expiration of all applicable statutes
of limitations, or extensions thereof, governing each Tax or Returns related to
such Tax.
14
7.2 Indemnity. FloridaCo agrees to indemnify and hold DelawareCo and
its stockholders prior to the Effective Time (the "DelawareCo Stockholders"),
and the officers, directors and affiliates of DelawareCo harmless against all
claims, losses, liabilities, damages, deficiencies, costs and expenses,
including reasonable attorneys' fees and expenses of investigation and defense
(hereinafter individually a "Loss" and collectively "Losses") incurred by
FloridaCo, DelawareCo, the DelawareCo stockholders or the Surviving Corporation,
or its officers, directors, or affiliates, directly or indirectly as a result of
(i) any inaccuracy or breach of a representation or warranty of FloridaCo or Sub
contained in this Agreement, or (ii) any failure by FloridaCo or Sub to perform
or comply with any covenant contained in this Agreement. The shareholders of
FloridaCo shall not have any right of contribution from FloridaCo with respect
to any Loss claimed after the Effective Time. Nothing herein shall limit the
liability of FloridaCo or Sub for any breach of any representation, warranty or
covenant if the Merger does not close.
7.315 Indemnity Claims. In the event of any Loss, FloridaCo or the
DelawareCo Representative, as hereinafter defined, shall deliver to the
Shareholder Representative a certificate signed by any officer of FloridaCo or
the DelawareCo Representative (an "Officer's Certificate"): (A) stating that
FloridaCo has paid or properly accrued or reasonably anticipates that it will
have to pay or accrue Losses, and (B) specifying in reasonable detail the
individual items of Losses included in the amount so stated, the date each such
item was paid or properly accrued, or the basis for such anticipated liability,
and the nature of the misrepresentation, breach of warranty or covenant to which
such item is related. In the event such claim is not contested by the
Shareholder Representative, FloridaCo shall promptly issue to the DelawareCo
Stockholders, in proportion to the number of shares of DelawareCo Common Stock
held by each immediately prior to the Effective Time, new shares of FloridaCo
Common Stock with an aggregate value equal to such Losses. For the purposes of
determining the number of shares of FloridaCo Common Stock to be delivered as
indemnity pursuant to this Section 7, the shares of FloridaCo Common Stock shall
be valued at US$ 1.00 per share.
7.4 Objections to Claims. For a period of thirty (30) days after
delivery of an Officer's Certificate to the Shareholder Representative,
FloridaCo shall make no delivery to the DelawareCo Stockholders of any new
FloridaCo Common Stock unless FloridaCo shall have received written
authorization from the Shareholder Representative to make such delivery. After
the expiration of such thirty (30) day period, FloridaCo shall make delivery of
shares of FloridaCo Common Stock in accordance with Section 7.3 hereof,
provided, however, that no such delivery may be made if the Shareholder
Representative shall object in a detailed written statement to the claim made in
the Officer's Certificate, and such statement shall have been delivered to
FloridaCo prior to the expiration of such thirty (30) day period.
7.5 Resolution of Conflicts; Arbitration.
(a) In case the Shareholder Representative shall object in
writing to any claim or claims made in any Officer's Certificate within thirty
(30) days after delivery of such Officer's Certificate, the Shareholder
Representative and the DelawareCo Representative shall attempt in good faith to
agree upon the rights of the respective parties with respect to each of such
claims. If the Shareholder Representative and the DelawareCo Representative
should so agree, a memorandum setting forth such agreement shall be prepared and
signed by both parties.
15
(b) If no such agreement can be reached after good faith
negotiation, either the Shareholder Representative or the DelawareCo
Representative may demand arbitration of the matter unless the amount of the
damage or Loss is at issue in pending litigation with a third party, in which
event arbitration shall not be commenced until such amount is ascertained or
both parties agree to arbitration; and in either such event the matter shall be
settled by arbitration conducted by one arbitrator mutually agreeable to the
DelawareCo Representative and the Shareholder Representative. In the event that
within forty-five (45) days after submission of any dispute to arbitration, the
DelawareCo Representative and the Shareholder Representative cannot mutually
agree on one arbitrator the DelawareCo Representative and the Shareholder
Representative shall each select one arbitrator, and the two arbitrators so
selected shall select a third arbitrator. The arbitrator or arbitrators, as the
case may be, shall set a limited time period and establish procedures designed
to reduce the cost and time for discovery while allowing the parties an
opportunity, adequate in the sole judgment of the arbitrator or majority of the
three arbitrators, as the case may be, to discover relevant information from the
opposing parties about the subject matter of the dispute. The arbitrator or a
majority of the three arbitrators, as the case may be, shall rule upon motions
to compel or limit discovery and shall have the authority to impose sanctions,
including attorneys' fees and costs, to the extent as a competent court of law
or equity, should the arbitrators or a majority of the three arbitrators, as the
case may be, determine that discovery was sought without substantial
justification or that discovery was refused or objected to without substantial
justification. The decision of the arbitrator or a majority of the three
arbitrators, as the case may be, as to the validity and amount of any claim in
such Officer's Certificate shall be binding and conclusive upon the parties to
this Agreement. Such decision shall be written and shall be supported by written
findings of fact and conclusions which shall set forth the award, judgment,
decree or order awarded by the arbitrator(s).
(c) Judgment upon any award rendered by the arbitrator(s) may be
entered in any court having jurisdiction. Any such arbitration shall be held in
Bellevue, Washington, under the rules then in effect of the American Arbitration
Association. The arbitrator(s) shall determine how all expenses relating to the
arbitration shall be paid, including without limitation, the respective expenses
of each party, the fees of each arbitrator and the administrative fee of the
American Arbitration Association.
7.6 Third-Party Claims. In the event the DelawareCo Representative
becomes aware of a third-party claim which FloridaCo believes may result in a
Claim, the DelawareCo Representative shall notify the Shareholder Representative
of such claim, and the Shareholder Representative shall be entitled, at its
expense, to participate in, but not to determine or conduct, the defense of such
claim. FloridaCo shall have the right in its sole discretion to conduct the
defense of and settle any such claim; provided, however, that except with the
consent of the Shareholder Representative, no settlement of any such claim with
third-party claimants shall be determinative of the number of shares issuable
pursuant to Section 7.3. In the event that the Shareholder Representative has
consented to any such settlement, the shareholders of FloridaCo shall have no
power or authority to object to the amount of any claim by the DelawareCo
Stockholders with respect to such settlement.
16
7.7 Shareholder Representative.
(a) In the event that the Merger is approved, effective upon such
vote, and without further act of any shareholder of FloridaCo, Xxxx Xxxxx shall
be appointed as agent and attorney-in-fact (the "Shareholder Representative")
for each such shareholder, for and on behalf of shareholders, to give and
receive notices and communications, to authorize delivery to the DelawareCo
Stockholders of shares of FloridaCo Common Stock in satisfaction of Claims, to
object to such deliveries, to agree to, negotiate, enter into settlements and
compromises of, and demand arbitration and comply with orders of courts and
awards of arbitrators with respect to such claims, and to take all actions
necessary or appropriate in the judgment of the Shareholder Representative for
the accomplishment of the foregoing. Such agency may be changed by the
shareholders of FloridaCo prior to the Effective Time (the "FloridaCo
Shareholders") from time to time upon not less than thirty (30) days prior
written notice to FloridaCo; provided, however, that the Shareholder
Representative may not be removed unless holders of a two-thirds interest of the
FloridaCo Shareholders agree to such removal and to the identity of the
substituted agent. Any vacancy in the position of Shareholder Representative may
be filled by approval of the holders of a majority in interest of the FloridaCo
Shareholders. No bond shall be required of the Shareholder Representative, and
the Shareholder Representative shall not receive compensation for his or her
services. Notices or communications to or from the Shareholder Representative
shall constitute notice to or from each of the FloridaCo Shareholders.
(b) A decision, act, consent or instruction of the Shareholder
Representative shall be final, binding and conclusive upon each of the FloridaCo
Shareholders, and FloridaCo may rely upon any such decision, act, consent or
instruction of the Shareholder Representative.
7.8 DelawareCo Representative.
(a) In the event that the Merger is approved, effective upon such
vote, and without further act of any shareholder of DelawareCo, Xxxx Xxxxxx
shall be designated as the representative of the holders of DelawareCo Common
Stock outstanding prior to the Effective Time (the "DelawareCo Representative").
The DelawareCo Representative shall be appointed as agent and attorney-in-fact
for each such stockholder, for and on behalf of stockholders, to give and
receive notices and communications, to approve any resolution of any matter with
respect to any Losses, to agree to, negotiate, enter into settlements and
compromises of, and demand arbitration and comply with orders of courts and
awards of arbitrators with respect to such claims, and to take all actions
necessary or appropriate in the judgment of the DelawareCo Representative for
the accomplishment of the foregoing. Such agency may be changed by the
DelawareCo Stockholders from time to time upon not less than thirty (30) days
prior written notice to the Shareholder Representative and FloridaCo; provided,
however, that the DelawareCo Representative may not be removed unless holders of
a two-thirds interest of the DelawareCo Stockholders agree to such removal and
to the identity of the substituted agent. Any vacancy in the position of
Stockholder Representative may be filled by approval of the holders of a
majority in interest of the DelawareCo Stockholders. No bond shall be required
of the DelawareCo Representative, and the DelawareCo Representative shall not
receive compensation for his or her services. Notices or communications to or
from the DelawareCo Representative shall constitute notice to or from each of
the DelawareCo Stockholders.
17
(b) A decision, act, consent or instruction of the DelawareCo
Representative shall be final, binding and conclusive upon each of the
DelawareCo Stockholders, and FloridaCo and may rely upon any such decision, act,
consent or instruction of the DelawareCo Representative.
(c) Without limiting the authority of the DelawareCo
Representative as granted above, the holders of a majority of the shares held by
the DelawareCo Stockholders shall have the right, on behalf of all of the
DelawareCo Stockholders, to amend or waive any rights of the DelawareCo
Stockholders under this Section 7.
8. TERMINATION, AMENDMENT AND WAIVER.
8.1 Termination. Except as provided in Section 8.2, this Agreement may
be terminated and the Merger abandoned at any time prior to the Effective Time:
(a) by mutual consent of DelawareCo and FloridaCo;
(b) by FloridaCo or DelawareCo if (i) the Effective Time has not
occurred by May 20, 1999; (ii) there shall be a final non-appealable order of a
federal or state court in effect preventing consummation of the Merger; or (iii)
there shall be any statute, rule, regulation or order enacted, promulgated or
issued or deemed applicable to the Merger by any Governmental Entity that would
make consummation of the Merger illegal;
(c) by either party if there shall be any action taken, or any
statute, rule, regulation or order enacted, promulgated or issued or deemed
applicable to the Merger by any Governmental Entity, which would: (i) prohibit
FloridaCo' ownership or operation of any portion of the business of DelawareCo
or (ii) compel FloridaCo or DelawareCo to dispose of or hold separate all or a
portion of the business or assets of DelawareCo or FloridaCo as a result of the
Merger;
(d) by DelawareCo if it is not in material breach of its
obligations under this Agreement and there has been a material breach of any
representation, warranty, covenant or agreement contained in this Agreement on
the part of FloridaCo or Sub and such breach has not been cured within ten (10)
calendar days after written notice to FloridaCo; provided, however, that, no
cure period shall be required for a breach which by its nature cannot be cured;
(e) by FloridaCo if neither it nor Sub is in material breach of
their respective obligations under this Agreement and there has been a material
breach of any representation, warranty, covenant or agreement contained in this
Agreement on the part of DelawareCo and such breach has not been cured within
ten (10) calendar days after written notice to DelawareCo; provided, however,
that no cure period shall be required for a breach which by its nature cannot be
cured.
Where action is taken to terminate this Agreement pursuant to this Section
8.1, it shall be sufficient for such action to be authorized by the Board of
Directors (as applicable) of the party taking such action.
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8.2 Effect of Termination. In the event of termination of this
Agreement as provided in Section 8.1, this Agreement shall forthwith become void
and there shall be no liability or obligation on the part of FloridaCo or
DelawareCo, or their respective officers, directors or shareholders, provided
that each party shall remain liable for any breaches of this Agreement prior to
its termination; provided further that, the provisions of Sections 5.4, 5.5 and
5.6, Section 9 and this Section 8.2 shall remain in full force and effect and
survive any termination of this Agreement.
8.3 Amendment. This Agreement may be amended by the parties hereto at
any time by execution of an instrument in writing signed on behalf of each of
the parties hereto.
8.4 Extension; Waiver. At any time prior to the Effective Time,
FloridaCo and DelawareCo may, to the extent legally allowed, (i) extend the time
for the performance of any of the obligations of the other party hereto, (ii)
waive any inaccuracies in the representations and warranties made to such party
contained herein or in any document delivered pursuant hereto, and (iii) waive
compliance with any of the agreements or conditions for the benefit of such
party contained herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party.
9. GENERAL PROVISIONS.
9.1 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally or by commercial
messenger or courier service, or mailed by registered or certified mail (return
receipt requested) or sent via facsimile (with acknowledgment of complete
transmission) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice), provided, however,
that notices sent by mail will not be deemed given until received:
(a) if to FloridaCo to:
Venture Law Corporation
000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX, X0X 0X0
Attention: Xxxxx X. Xxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(b) if to DelawareCo or the DelawareCo Representative, to:
Shopping Sherlock, Inc.
(A Delaware Corporation)
0000 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Telephone No.:(000) 000-0000
Facsimile No.: (000) 000-0000
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with a copy to:
The Law Offices of Xxxx Xxxxxxxx, Esquire
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxx, Esq.
Telephone No: (000) 000-0000
Facsimile No.: (000) 000-0000
9.2 Interpretation. The words "include," "includes" and "including"
when used herein shall be deemed in each case to be followed by the words
"without limitation." 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.
9.3 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
9.4 Entire Agreement; Assignment. This Agreement, the Exhibits hereto
and the documents and instruments and other agreements among the parties hereto
referenced herein: (a) constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings both written and oral among the parties with respect to the
subject matter hereof, (b) are not intended to confer upon any other person any
rights or remedies hereunder; and (c) shall not be assigned by operation of law
or otherwise.
9.5 Severability. In the event that any provision of this Agreement or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
9.6 Other Remedies. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.
9.7 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California, regardless of the laws
that might otherwise govern under applicable principles of conflicts of laws
thereof. Each of the parties hereto irrevocably consents to the exclusive
jurisdiction and venue of any court within Santa Xxxxx County, State of
California, in connection with any matter based upon or arising out of this
Agreement or the matters contemplated herein, agrees that process may be served
upon them in any manner authorized by the laws of the State of California for
such persons and waives and covenants not to assert or plead any objection which
they might otherwise have to such jurisdiction, venue and such process.
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9.8 Rules of Construction. The parties hereto agree that they have
been represented by counsel during the negotiation and execution of this
Agreement and, therefor, 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.
IN WITNESS WHEREOF, the Parties are deemed to have executed this Agreement
as of the Effective Date.
SHOPPING SHERLOCK, INC. SHOPPING SHERLOCK, INC.
(a Delaware corporation) (a Florida corporation)
"Xxxx Xxxxxx" "Xxxx Xxxxx"
-------------------------------- ---------------------------------------
By: Xxxx Xxxxxx By: Xxxx Xxxxx
SHOPPING ACQUISITION CORP.
(a Delaware corporation)
"Xxxx Xxxxx"
---------------------------------------
By: Xxxx Xxxxx
