REORGANIZATION AGREEMENT
between
ALBION AVIATION, INC.
and
ARADYME DEVELOPMENT CORPORATION
February 7, 2003
iii
TABLE OF CONTENTS
ARTICLE I--THE MERGER 2
Section 1.01 The Merger.......................................2
Section 1.02 Restrictions on New Albion Stock and New Albion Options......2
Section 1.03 Closing; Closing Date; Effective Time...............2
Section 1.04 Effect of the Merger...................................3
ARTICLE II--CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES.................3
Section 2.01 Merger Consideration; Conversion and Cancellation of
Securities........3
Section 2.02 Exchange and Surrender of Certificates..................4
ARTICLE III--REPRESENTATIONS, COVENANTS, AND WARRANTIES OF ARADYME.............5
Section 3.01 Organization and Qualifications............6
Section 3.02 Articles and Bylaws...................................6
Section 3.03 Capitalization..........................................6
Section 3.04 Authority...........................................7
Section 3.05 No Conflict: Required Filings and Consents..............7
Section 3.06 Permits; Compliance......................................8
Section 3.07 Financial Statements...........................8
Section 3.08 Absence of Certain Changes or Events....................9
Section 3.09 Absence of Litigation............................9
Section 3.10 Tax Matters.......................................9
Section 3.11 Taxes. 9
Section 3.12 Vote Required...............................11
Section 3.13 Brokers.............................................11
Section 3.14 Information Supplied.........................11
Section 3.15 Employee Benefit Plans; Labor Matters.........11
Section 3.16 Employee Relations...........................12
Section 3.17 Certain Business Practices......................13
Section 3.18 Environmental Matters.............................13
Section 3.19 Insurance..............................................13
Section 3.20 Certain Contracts and Restrictions....................13
Section 3.21 Properties........................................14
Section 3.22 Easements...........................................14
Section 3.23 Futures Trading and Fixed Price Exposure............14
Section 3.24 Intellectual Property........................14
Section 3.25 Transactions with Affiliates................15
Section 3.26 Compliance with Securities Laws...................15
Section 3.27 Minute Book..................................16
Section 3.28 Aradyme Schedules.............................15
ARTICLE IV--REPRESENTATIONS, COVENANTS, AND WARRANTIES OF ALBION..................................................16
Section 4.01 Organization and Qualifications................................................................16
Section 4.02 Certificate and Bylaws.........................................................................16
Section 4.03 Capitalization.................................................................................17
Section 4.04 Authority......................................................................................18
Section 4.05 No Conflict: Required Filings and Consents.....................................................18
Section 4.06 Permits; Compliance............................................................................19
Section 4.07 Books and Records..............................................................................18
Section 4.08 Reports; Financial Statements..................................................................19
Section 4.09 Absence of Certain Changes or Events...........................................................20
Section 4.10 Absence of Litigation..........................................................................20
Section 4.11 Tax Matters....................................................................................21
Section 4.12 Taxes. 21
Section 4.13 No Vote Required...............................................................................22
Section 4.14 Brokers........................................................................................22
Section 4.15 Information Supplied...........................................................................22
Section 4.16 Employee Benefit Plans; Labor Matters..........................................................23
Section 4.17 Employee Relations.............................................................................24
Section 4.18 Certain Business Practices.....................................................................24
Section 4.19 Environmental Matters..........................................................................24
Section 4.20 Insurance......................................................................................24
Section 4.21 Certain Contracts and Restrictions.............................................................24
Section 4.22 Properties.....................................................................................25
Section 4.23 Easements......................................................................................25
Section 4.24 Futures Trading and Fixed Price Exposure.......................................................25
Section 4.25 Intellectual Property..........................................................................25
Section 4.26 Transactions with Affiliates...................................................................26
Section 4.27 Minute Book....................................................................................26
Section 4.28 Stockholders' List.............................................................................26
Section 4.29 Compliance with Securities Laws................................................................27
Section 4.30 EBB Listing....................................................................................27
Section 4.31 Public Trading Activity........................................................................27
Section 4.32 Worldwide Web Communications...................................................................27
Section 4.33 Tradability of Outstanding Stock; Manual Exemption.............................................27
Section 4.34 Equity Vehicle.................................................................................27
Section 4.35 Albion Schedules...............................................................................28
ARTICLE V--ADDITIONAL AGREEMENTS..................................................................................29
Section 5.01 Affirmative Covenants of Each Party............................................................28
Section 5.02 Negative Covenants of Each Party...............................................................29
Section 5.03 Meetings of Stockholders.......................................................................32
Section 5.04 Access and Information.........................................................................32
Section 5.05 State Securities Laws..........................................................................33
Section 5.06 Appropriate Action; Consents; Filings..........................................................34
Section 5.07 Acquisition of New Albion Stock and New Albion Options.........................................35
Section 5.08 No Representation Regarding Tax Treatment......................................................38
Section 5.09 Public Announcements...........................................................................38
Section 5.10 Reorganization of the Board of Directors; Appointment of Officers..............................37
Section 5.11 Restriction on Resale of Albion Stock by Incumbent Albion Officers and Directors...............37
Section 5.12 Corporate Organization, Status and Authorized Shares...........................................37
Section 5.13 Possible Additional Company Reports or Amendments or Comments Thereon..........................37
ARTICLE VI--CLOSING CONDITIONS....................................................................................39
Section 6.01 Conditions Precedent to Obligation To Close....................................................38
Section 6.02 Third-Party Conditions to Obligations of the Parties under this Agreement......................39
Section 6.03 Additional Conditions to Obligations of the Parties............................................40
ARTICLE VII--REGISTRATION OF TRANSACTIONS IN NEW ALBION STOCK.....................................................41
Section 7.01 Registrable Shares.............................................................................40
Section 7.02 Demand Registration............................................................................40
Section 7.03 Participatory Registration.....................................................................41
Section 7.04 Required Registration..........................................................................42
Section 7.05 Effectiveness; Suspension Right................................................................42
Section 7.06 Expenses.......................................................................................43
Section 7.07 Indemnification................................................................................43
Section 7.08 Procedures for Sale of Shares under Registration Statement.....................................44
Section 7.09 Transferability of Registration Rights.........................................................45
ARTICLE VIII--TERMINATION, AMENDMENT AND WAIVER..................................................................45
Section 8.01 Termination....................................................................................47
Section 8.02 Effect of Termination..........................................................................48
Section 8.03 Amendment......................................................................................48
Section 8.04 Waiver.........................................................................................48
Section 8.05 Fees, Expenses and other Payments..............................................................48
ARTICLE IX--GENERAL PROVISIONS....................................................................................50
Section 9.01 Effectiveness of Representations, Warranties and Agreements; Survival..........................50
Section 9.02 Notices........................................................................................50
Section 9.03 Certain Definitions............................................................................51
Section 9.04 Headings.......................................................................................52
Section 9.05 Severability...................................................................................52
Section 9.06 Entire Agreement...............................................................................52
Section 9.07 Assignment.....................................................................................52
Section 9.08 Parties in Interest............................................................................52
Section 9.09 Failure or Indulgence Not Waiver; Remedies Cumulative..........................................52
Section 9.10 Governing Law..................................................................................53
Section 9.11 Counterparts...................................................................................53
REORGANIZATION AGREEMENT
THIS REORGANIZATION AGREEMENT, dated as of February 7, 2003 (this
"Agreement"), is entered into by and between ALBION AVIATION, INC., a Delaware
corporation ("Albion"), and ARADYME DEVELOPMENT CORPORATION, a Nevada
corporation ("Aradyme"). Albion and Aradyme are sometimes hereinafter together
referred to as the "Parties."
RECITALS
A. Aradyme has designed and developed a database management system
based upon new proprietary technology that can be used to manage database needs
and as an application development tool for software applications.
B. Albion was organized to implement a business plan to offer aircraft
charter services based at the Xxxx Xxxxx Airport in Orange County, California,
but has determined to shift its focus to the activities currently conducted by
Aradyme by acquiring it in the merger contemplated hereby.
C. In the acquisition of Aradyme by Albion, Aradyme shall, upon the
terms and subject to the conditions of this Agreement and in accordance with the
laws governing private corporations of the state of Nevada ("Nevada Law") and
the Utah Revised Business Corporations Act ("Utah Law"), merge (the "Merger")
with and into a new, wholly-owned subsidiary to be organized by Albion under the
laws of the state of Utah ("Albion Merger Corp."), which shall survive the
Merger as a wholly-owned subsidiary of Albion (the "Surviving Corporation"), all
as more particularly set forth in the plan of merger to be executed and
delivered by the Parties and Albion Merger corp. at the Closing (the "Plan of
Merger"). Pursuant to the terms of the Merger, the shares of common stock
("Aradyme Common Stock") and preferred stock ("Aradyme Preferred Stock") of
Aradyme (collectively, the "Aradyme Stock") and options to purchase Aradyme
Stock ("Aradyme Options") issued and outstanding or existing immediately prior
to the Effective Time (as defined herein) of the Merger, and not owned directly
or indirectly by Aradyme or Albion or their respective subsidiaries, will be
converted at the Effective Time into the right to receive newly-issued shares of
common stock of Albion, par value $0.001 per share ("New Albion Common Stock")
and newly-issued shares of preferred stock of Albion, par value $0.001 per share
("New Albion Preferred Stock") and newly-issued options to purchase New Albion
Stock ("New Albion Options"), respectively, subject to certain restrictions on
transfer as hereinafter provided and subject to the rights of the holders of
certain of such shares of Aradyme Stock (each, a "Dissenting Aradyme
Stockholder") to seek an appraisal of the fair value thereof as provided under
Nevada Law. The shares of common stock of Albion, par value $0.001 per share
("Albion Stock"), issued and outstanding immediately prior to the Effective Time
will remain issued and outstanding. The shares of New Albion Common Stock and
New Albion Preferred Stock (together, the "New Albion Stock") and the New Albion
Options are sometimes referred to collectively herein as the "Merger
Consideration."
D. The board of directors of each of the Parties has determined that
the Merger is consistent with and in furtherance of the long-term business
strategies of each of them and is fair to and in the best interests of each of
them and each of their respective stockholders, and has approved and adopted
this Agreement and the other transactions contemplated hereby, and in the case
of Albion, has approved the issuance of the New Albion Stock and recommended
approval of this Agreement and such transactions by Albion's stockholders.
E. For federal income tax purposes, the Parties intend the Merger to
qualify as a reorganization under the provisions of Sections 368(a)(1)(A) and
368(a)(2)(D) of the United States Internal Revenue Code of 1986, as amended (the
"Code"), and to take all actions reasonably necessary to so qualify the Merger,
although neither Party has obtained nor will be required to obtain or provide an
opinion of counsel or a private ruling from the Internal Revenue Service to the
foregoing effect.
F. Certain terms used in this Agreement are defined in Section
9.03 hereof.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, and agreements set forth in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and confirmed, the Parties hereto
agree as follows:
ARTICLE I
THE MERGER
Section 1.01 The Merger
Upon the terms and subject to the conditions set forth in this
Agreement, and in accordance with Nevada Law and Utah Law, at the Effective
Time, Aradyme shall be merged with and into Albion Merger Corp., the separate
corporate existence of Aradyme and Albion Merger Corp. shall cease, Albion
Merger Corp. shall continue as the Surviving Corporation of the Merger, and the
Aradyme Stock and Aradyme Options issued and outstanding immediately prior to
such Merger shall be converted at the Effective Time into the right to receive
shares of New Albion Stock and New Albion Options as herein provided.
Section 1.02 Restrictions on New Albion Stock and New Albion
Options
Transfer of the shares of New Albion Stock and the New Albion Options
issuable in the Merger in accordance with this Agreement will be subject to
certain restrictions: (a) under the Securities Act of 1933, as amended (the
"Securities Act"), and Regulation D promulgated by the Securities and Exchange
Commission (the "SEC") thereunder as more particularly set forth in Section
5.07; (b) under certain applicable state securities laws.
Section 1.03 Closing; Closing Date; Effective Time
Unless this Agreement shall have been terminated pursuant to Section
8.01, and subject to the satisfaction or, if permissible, waiver of the
conditions set forth in Article VI, the consummation of the Merger and the
closing of the transactions contemplated by this Agreement (the "Closing") shall
take place at the offices of Albion, 00000 Xxxxx Xxxx, #X, Xxxx Xxxxx,
Xxxxxxxxxx 00000, as soon as practicable (but in any event within two business
days) after the satisfaction or, if permissible, waiver of the conditions set
forth in Article VI, or at such other date, time, and place as Albion and
Aradyme may agree. The date on which the Closing takes place is referred to
herein as the "Closing Date." As promptly as practicable following the Closing
Date, the Parties hereto shall cause the Merger to be consummated by filing
articles of merger, in such form as may be mutually acceptable to the Parties
and their respective counsel, with the Secretary of State of Nevada and the
Division of Corporations and Commercial Code of the State of Utah (the date and
time of such filing, or such later date or time agreed upon by Albion and
Aradyme and set forth therein, being the "Effective Time").
Section 1.04 Effect of the Merger
At the Effective Time, to the full extent provided under Nevada Law,
Albion Merger Corp., as the Surviving Corporation, shall possess all the rights,
privileges, powers, and franchises of a public as well as of a private nature,
and be subject to all the restrictions, disabilities, and duties of each of such
merged entities. Any and all rights, privileges, powers, and franchises of each
of such merged entities, and all property, real, personal, and mixed, and all
debts due to either of such merged entities on whatever account, as well as
stock subscriptions and all other things in action belonging to each of such
merged entities, shall be vested in Albion Merger Corp. as the Surviving
Corporation. All property, rights, privileges, powers, and franchises, and all
and every other interest shall be thereafter as effectively the property of the
Surviving Corporation as they were of the constituent entities, and the title to
any real estate vested by deed or otherwise, in either constituent entity, shall
not revert or be in any way impaired; but all rights of creditors and all liens
upon any property of either constituent entity shall be preserved unimpaired,
and all debts, liabilities, and duties of the constituent entities shall
thenceforth attach to Surviving Corporation and may be enforced against it to
the same extent as if said debts, liabilities, and duties had been incurred or
contracted by it.
Section 1.05 Directors and Officers of the Surviving
Corporation
The directors and officers of Aradyme immediately prior to the
Effective Time shall become the directors and officers of the Surviving
Corporation on the Effective Time.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 2.01 Merger Consideration; Conversion and Cancellation
of Securities
At the Effective Time, by virtue of the Merger and without any action
on the part of Albion, Albion Merger Corp., Aradyme, or their respective
stockholders:
(a) Subject to the other provisions of this Article II, each
share of Aradyme Common Stock issued and outstanding immediately prior
to the Effective Time (excluding shares held by Dissenting Aradyme
Stockholders) shall be converted into the right to receive one share of
New Albion Common Stock.
(b) Subject to the other provisions of this Article II, each
share of Aradyme Preferred Stock issued and outstanding immediately
prior to the Effective Time (excluding shares held by Dissenting
Aradyme Stockholders) shall be converted into the right to receive one
share of New Albion Preferred Stock.
(c) Subject to the other provisions of this Article II,
persons holding Aradyme Options, as identified in Schedule 3.03(b) of
the Aradyme Schedules (as hereinafter defined), shall, at the Effective
Time, be granted New Albion Options in lieu of their existing options
to purchase an equal number of shares of New Albion Stock for the same
period and at the same price set forth in the Aradyme Options as set
forth opposite their respective names on Schedule 3.03(b) of the
Aradyme Schedules. Such new options containing substantially identical
terms as the existing options, in order to comply with Section 424 of
the Code, shall be delivered to the holders of existing options as
quickly as practicable after the Effective Time against delivery to
Albion of the existing options for cancellation. Pending the issuance
of such new options, the existing options outstanding at the Effective
Time shall thereafter represent the right to purchase that whole number
of shares of New Albion Stock at an exercise price determined in order
to properly reflect the exchange ratios set forth in Section 2.01(a)
and (b) hereof.
(d) Subject to the provisions of this Article II, each
certificate evidencing Aradyme Stock at the Effective Time (other than
shares held by a Dissenting Aradyme Stockholder) (the "Converted
Shares" or "Converted Share Certificates") shall thereafter represent
the right to receive that whole number of shares of New Albion Stock
determined pursuant to Section 2.01(a) and (b) hereof or, if
applicable, cash pursuant to Section 2.02(d) of this Agreement. The
holders of Converted Share Certificates shall cease to have any rights
with respect to such Converted Shares except as otherwise provided
herein or by law. Such Converted Share Certificates shall be exchanged
for certificates evidencing whole shares of New Albion Stock upon the
surrender of such Converted Share Certificates in accordance with the
provisions of Section 2.02 of this Agreement, without interest. No
fractional shares of New Albion Stock shall be issued in connection
with the Merger and, in lieu thereof, a cash payment shall be made
pursuant to Section 2.02(d) of this Agreement.
(e) Notwithstanding anything in this Agreement to the
contrary, any issued and outstanding shares of Aradyme Stock held by a
Dissenting Aradyme Stockholder who has not voted in favor of nor
consented to the Merger and who complies with all the provisions of
Nevada Law concerning the right of holders of such stock to dissent
from the Merger and require appraisal of their shares, shall not be
converted as described in this Section 2.01, but shall become, at the
Effective Time, by virtue of the Merger and without any further action,
the right to receive such consideration as may be determined by Aradyme
to be due to such Dissenting Aradyme Stockholder in accordance with
Nevada Law; provided, however, that shares of Aradyme Stock outstanding
immediately prior to the Effective Time and held by a Dissenting
Aradyme Stockholder who shall, after the Effective Time, withdraw his
or her demand for appraisal or lose his or her right of appraisal, in
either case pursuant to Nevada Law, shall be deemed to be converted as
of the Effective Time into the right to receive New Albion Stock.
Section 2.02 Exchange and Surrender of Certificates
(a) As soon as reasonably practicable after the Effective
Time, Albion's transfer agent and registrar, Colonial Stock Transfer
Corporation, 000 Xxxx 000 Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx (the
"Exchange Agent"), shall mail to each holder of record of shares of
Aradyme Stock a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Converted
Share Certificates shall pass, only upon delivery of the Converted
Share Certificates to the Exchange Agent, and which shall be in such
form and have such other provisions as Albion and Aradyme may
reasonably specify) and instructions for use in effecting the surrender
of the Converted Share Certificates in exchange for certificates
representing shares of New Albion Stock issuable pursuant to Section
2.01. Upon surrender of a Converted Share Certificate to the Exchange
Agent, together with such letter of transmittal, duly executed, the
holder of such Converted Share Certificate shall be entitled to receive
in exchange therefor a certificate representing that number of whole
shares of New Albion Stock that such holder has the right to receive
pursuant to the provisions of this Article II (after taking into
account all Converted Shares then held by such holder). In the event of
a transfer of ownership of Aradyme Stock that is not registered in the
transfer records of Aradyme, a certificate representing the proper
number of shares of New Albion Stock may be issued to a transferee if
the Converted Share Certificate representing such Aradyme Stock is
presented to the Exchange Agent, accompanied by all documents required
to evidence and effect such transfer and by evidence that any
applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 2.02, each Converted Share Certificate
shall be deemed at any time after the Effective Time to represent only
the New Albion Stock into which the Converted Shares represented by
such Converted Share Certificate would be converted, as provided in
this Article II, and cash in lieu of any fractional shares of New
Albion Stock as contemplated by Section 2.02(d).
(b) After the Effective Time, there shall be no further
registration of transfers of Aradyme Stock. If, after the Effective
Time, certificates representing shares of Aradyme Stock are presented
to Albion or the Exchange Agent, they shall be exchanged for the merger
consideration provided for in this Agreement in accordance with the
procedures set forth herein.
(c) No dividends, interest, or other distributions with
respect to shares of New Albion Stock shall be paid to the holder of
any unsurrendered Converted Share Certificates unless and until such
Converted Share Certificates are surrendered as provided in this
Section 2.02. Upon such surrender, Albion shall pay or cause the
Exchange Agent to pay, without interest, all dividends and other
distributions payable in respect of such shares of New Albion Stock on
a date subsequent to, and in respect of a record date after, the
Effective Time.
(d) No certificates or scrip evidencing fractional shares of
New Albion Stock shall be issued upon the surrender for exchange of
Converted Share Certificates, and such fractional share interests shall
not entitle the owner thereof to any rights as a stockholder of Albion.
In lieu of any such fractional interests, each holder of a Converted
Share Certificate shall, upon surrender of such certificate for
exchange pursuant to this Article II, be paid an amount in cash
(without interest), rounded to the nearest cent, determined by
multiplying the last reported sales price of the Albion Common Stock on
the Nasdaq OTC Electronic Bulletin Board maintained by the National
Association of Securities Dealers, Inc. by the fractional share of New
Albion Stock to which such holder would otherwise be entitled (after
taking into account all Converted Shares held of record by such holder
at the Effective Time).
(e) Albion shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any
former holder of Aradyme Stock such amounts as Albion (or any affiliate
thereof) is required to deduct and withhold with respect to the making
of such payment under the Code or any provision of state, local, or
foreign tax law. To the extent that amounts are so withheld by Albion,
such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the former holder of the Aradyme Stock
in respect of which such deduction and withholding was made. In the
event the amount withheld is insufficient so to satisfy the withholding
obligations of Albion (or any affiliate thereof), such former
stockholder shall reimburse Albion (or such affiliate), at its request,
the amount of any such insufficiency.
ARTICLE III
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF ARADYME
Aradyme hereby represents, covenants, and warrants to Albion, such
representations, covenants, and warranties to be made as of the date hereof and
at and as of the Closing Date [and to survive the Closing and continue in
accordance with the terms hereof (except as otherwise expressly set forth in
Article IX hereof)], as set forth in this Article III and as limited or
qualified by the related disclosure schedules (the "Aradyme Schedules")
supplementally provided by Aradyme to Albion.
Section 3.01 Organization and Qualifications
Aradyme is a corporation duly organized, validly existing, and in good
standing under the laws of its state of incorporation, has all requisite
corporate power and authority to own, lease, and operate its properties and
assets and to carry on its business as it is now being conducted, and is duly
qualified and in good standing to do business in each jurisdiction in which the
nature of the business conducted by it or the ownership or leasing of its
properties makes such qualification necessary, other than when the failure to be
so duly qualified and in good standing would not have an Aradyme Material
Adverse Effect. The term "Aradyme Material Adverse Effect," as used in this
Agreement, shall mean any change or effect that, individually or when taken
together with all such other changes or effects, would be reasonably likely to
be materially adverse to the assets, liabilities, financial condition, results
of operations, or current or future business of Aradyme. Aradyme does not own,
directly or indirectly, any subsidiaries and, except as set forth in Schedule
3.01 of the Aradyme Schedules, Aradyme does not own an equity interest in any
other corporation, partnership, joint venture arrangement, or other business
entity that is material to the assets, liabilities, financial condition, results
of operations, or current or future business of Aradyme. Except as set forth in
Schedule 3.01 of the Aradyme Schedules, Aradyme does not have any predecessor,
as that term is defined under generally accepted accounting principles.
Section 3.02 Articles and Bylaws
Included in Schedule 3.02 of the Aradyme Schedules are complete and
correct copies of Aradyme's Articles of Incorporation and Bylaws, as presently
in effect. Aradyme is not in violation of any of the provisions of its Articles
of Incorporation or any provision of its Bylaws.
Section 3.03 Capitalization
(a) The authorized capital stock of Aradyme consists of (i)
1,000,000 shares of Aradyme Preferred Stock, par value $0.001 per
share, of which 12,000 shares are issued and outstanding; and (ii)
24,000,000 shares of Aradyme Common Stock, par value $0.001 per share,
of which 13,113,574 shares are issued and outstanding and 120,000
shares are reserved for issuance on the conversion of outstanding
Preferred Stock, 1,325,000 shares are reserved for issuance on the
exercise of outstanding stock options, and 0 shares are reserved for
issuance on the exercise of outstanding warrants, and 66,000 shares
reserved for issuance on completion of a subscription agreement for a
total of 14,504,574 shares issued and outstanding and reserved for
issuance on a fully diluted basis. No other shares of Aradyme Preferred
Stock or Aradyme Common Stock are reserved for issuance on the exercise
of any other call, commitment, right, or other contractual arrangements
to which Aradyme is a party or by which it is bound. Except as
described in this Section 3.03 or Schedule 3.03(a) of the Aradyme
Schedules, no shares of capital stock of Aradyme are reserved for any
purpose. Each of the outstanding shares of capital stock of Aradyme is
duly authorized, validly issued, fully paid and nonassessable, and has
not been issued in violation of (nor are any of the authorized shares
of capital stock of Aradyme subject to) any preemptive or similar
rights created by statute, the Articles of Incorporation or Bylaws of
Aradyme, or any agreement to which Aradyme is a party or by which it is
bound.
(b) Except as set forth in Schedule 3.03(b)(i) of the Aradyme
Schedules, there are no options, warrants, or other rights (including
registration rights), agreements, arrangements, or commitments of any
character to which Aradyme is a party relating to the issued or
unissued capital stock of Aradyme or obligating Aradyme to grant,
issue, or sell any shares of the capital stock of Aradyme. Except as
set forth in Schedule 3.03(b)(ii) of the Aradyme Schedules, there are
no obligations, contingent or otherwise, of Aradyme to repurchase,
redeem, or otherwise acquire any shares of Aradyme Stock or other
capital stock of Aradyme, or provide material funds to, make any
material investment in (in the form of a loan, capital contribution, or
otherwise), or provide any guarantee with respect to the obligations of
any other person. Except as described in Schedule 3.03(b)(iii) of the
Aradyme Schedules, Aradyme does not directly or indirectly own, has not
agreed to purchase or otherwise acquire, or does not hold any interest
convertible into or exchangeable or exercisable for, 5% or more of the
capital stock of any corporation, partnership, joint venture, or other
business association or entity. Except as set forth in Schedule
3.03(b)(iv) of the Aradyme Schedules, there are no agreements,
arrangements, or commitments of any character (contingent or otherwise)
pursuant to which any person is or may be entitled to receive any
payment based on the revenues or earnings, or calculated in accordance
therewith, of Aradyme. Except as set forth in Schedule 3.03(b)(v) of
the Aradyme Schedules, there are no voting trusts, proxies, or other
agreements or understanding to which Aradyme is a party or by which
Aradyme is bound with respect to the voting of any shares of capital
stock of Aradyme.
(c) Aradyme has made available to Albion complete and correct
copies of (i) each stock option, stock award, or other benefit plans
(collectively, the "Aradyme Option Plans") and the forms of options
issued pursuant to any Aradyme Option Plan, including all amendments
thereto, and (ii) all options and warrants that are not in the form
specified under clause (i) above. Schedule 3.03(c) of the Aradyme
Schedules sets forth a complete and correct list of all outstanding
warrants and options, restricted stock, or any other stock awards (the
"Aradyme Stock Awards") granted under the Aradyme Option Plans or
otherwise, setting forth as of the date hereof the number and type of
Aradyme Stock Awards, the exercise price of each outstanding stock
option or warrant, and the number of stock options and warrants
presently exercisable.
Section 3.04 Authority
Aradyme has all requisite corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder, and to consummate
the transactions contemplated hereby (subject to, with respect to the Merger,
the adoption of this Agreement by the stockholders of Aradyme as described in
Section 3.12 hereof). The execution and delivery of this Agreement by Aradyme
and the consummation by Aradyme of the transactions contemplated hereby have
been duly authorized by all necessary corporate action, and no other corporate
proceedings on the part of Aradyme are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby (subject to, with respect to
the Merger, the approval thereof by the stockholders of Aradyme as described in
Section 3.12). This Agreement has been duly executed and delivered by Aradyme
and, assuming the due authorization, execution, and delivery thereof by Albion,
constitutes the legal, valid, and binding obligation of Aradyme enforceable
against Aradyme in accordance with its terms, except that (a) such enforcement
may be subject to applicable bankruptcy, insolvency, or other similar laws, now
or hereafter in effect, affecting creditors' rights generally, and (b) the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
Section 3.05 No Conflict: Required Filings and Consents
(a) Except as set forth in Schedule 3.05(a) of the Aradyme
Schedules, the execution and delivery of this Agreement by Aradyme does
not, and the consummation of the transaction contemplated hereby will
not, (i) conflict with or violate the Articles of Incorporation or
Bylaws, in each case as amended or restated, of Aradyme, (ii) conflict
with or violate any federal, state, foreign or local law, statute,
ordinance, rule, regulation, order, judgment, or decree (collectively,
"laws") applicable to Aradyme or by which any of its properties is
bound or subject, or (iii) result in any breach of or constitute a
default (or an event that with notice or lapse of time, or both, would
become a default) under, or give to others any rights of termination,
amendment, acceleration, or cancellation of, or result in the creation
of a lien or encumbrance on any of the properties or assets of Aradyme
pursuant to, any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise, or other instrument or obligation to
which Aradyme is a party or by or to which Aradyme or any of its
respective properties is bound or subject, except for any such
conflicts or violations described in clause (ii) or breaches, defaults,
events, rights of termination, amendment, acceleration or cancellation,
payment obligations, or liens or encumbrances described in clause (iii)
that would not have an Aradyme Material Adverse Effect.
(b) The execution and delivery of this Agreement by Aradyme
does not, and consummation of the transactions contemplated hereby will
not, require Aradyme to obtain any consent, license, permit, approval,
waiver, authorization or order of, or to make any filing with or
notification to, any governmental or regulatory authority, domestic or
foreign (collectively, "governmental entities"), except for filing
appropriate merger documents as required by applicable state laws and
when the failure to obtain such consents, licenses, permits, approvals,
waivers, authorizations or orders, or to make such filings or
notifications, would not, either individually or in the aggregate,
materially interfere with Aradyme's performance of its obligations
under this Agreement and would not have an Aradyme Material Adverse
Effect.
Section 3.06 Permits; Compliance
Aradyme and, to Aradyme's knowledge, each third-party operator of any
of Aradyme's properties, are in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances, exemptions, consents,
certificates, approvals, and orders necessary to own, lease, and operate its
properties and to carry on its business in all material respects as it is now
being conducted or as presently foreseeable (collectively, the "Aradyme
Permits"), and there is no action, proceeding, or investigation pending or, to
the knowledge of Aradyme, threatened regarding suspension or cancellation of any
of the Aradyme Permits, except when the failure to possess, or the suspension or
cancellation of, such Aradyme Permits would not have an Aradyme Material Adverse
Effect. Except as set forth in Schedule 3.06 of the Aradyme Schedules, Aradyme
has not received from any governmental entity any written notification with
respect to possible conflicts, defaults, or violations of laws, except for
written notices relating to possible conflicts, defaults, or violations that
would not have an Aradyme Material Adverse Effect.
Section 3.07 Financial Statements
Included in Schedule 3.07 of the Aradyme Schedules are the audited
balance sheet of Aradyme as of September 30, 2002, and the related statements of
operations and other comprehensive loss, stockholders' equity (deficit), and
cash flows for the year ended September 30, 2002, and from inception on February
13, 2001, through September 30, 2001, including the notes thereto and the report
of HJ & Associates, L.L.C., certified public accountants, thereon, and the
unaudited balance sheet of Aradyme as of December 31, 2002, and the related
statements of operations and other comprehensive loss, stockholders' equity
(deficit), and cash flows for the three months ended December 30, 2002, and for
the period from inception on February 13, 2001, through December 30, 2002
("Aradyme Most Recent Financial Statements"), including representations by a
duly authorized officer of Aradyme to the effect that such financial statements
contain all adjustments (all of which are normal recurring adjustments)
necessary to present fairly the results of operations and financial position of
Aradyme for the periods and as of the dates indicated. All such financial
statements have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods involved (except
(a) to the extent required by changes in generally accepted accounting
principles and (b) as may be indicated in the notes thereto) and fairly present
the financial position of Aradyme as of the respective dates thereof and the
result of operations and cash flows for the periods indicated.
Section 3.08 Absence of Certain Changes or Events
Except as contemplated by this Agreement or as set forth in Schedule
3.08 of the Aradyme Schedules, since the date of the Aradyme Most Recent
Financial Statements, Aradyme has conducted its business in the ordinary course
of business consistent with past practice. Since the date of the Aradyme Most
Recent Financial Statements, there has not been (a) any event, change, or effect
(including the occurrence of any liabilities of any nature, whether or not
accrued, contingent, or otherwise) having or that would be reasonably likely to
have, individually or in the aggregate, an Aradyme Material Adverse Effect; (b)
any declaration, setting aside, or payment of any dividend or other distribution
(whether in cash, stock, or property) with respect to the equity interests of
Aradyme or any redemption, purchase, or other acquisition by Aradyme of any of
Aradyme's capital stock; (c) any revaluation by Aradyme of its assets, including
the writing down of the value of inventory or the writing down or off of notes
or accounts receivable, other than in the ordinary course of business and
consistent with past practices; (d) any change by Aradyme in accounting
principles or methods, except insofar as may be required by a change in
generally accepted accounting principles; (e) a fundamental change in the nature
of Aradyme's business; (f) any arrangement for the disposition of any material
property or assets of Aradyme; (g) any accrual or arrangement for or payment of
bonuses or special compensation of any kind or any severance or termination pay
to any present or former officer, employee, or stockholder; (h) any increase in
any profit sharing, bonus, deferred compensation, insurance, pension,
retirement, or other employee benefit plan, payment or arrangement made to, for,
or with its officers, directors, or employees, or (i) an Aradyme Material
Adverse Effect.
Section 3.09 Absence of Litigation
Except as set forth in Schedule 3.09 of the Aradyme Schedules, there is
no claim, suit, litigation, proceeding, arbitration, or, to the knowledge of
Aradyme, investigation of any kind, at law or in equity (including actions or
proceedings seeking injunctive relief), pending, or threatened against Aradyme
or any of its properties (except for claims, actions, suits, litigation,
proceedings, arbitrations, or investigations that would not have an Aradyme
Material Adverse Effect), and Aradyme is not subject to any continuing order of,
consent decree, settlement agreement, or other similar written agreement with,
or, to the knowledge of Aradyme, continuing investigation by, any governmental
entity, or any judgment, order, writ, injunction, decree, or award of any
government entity or arbitrator, including, without limitation, cease-and-desist
or other orders, except for matters that would not have an Aradyme Material
Adverse Effect.
Section 3.10 Tax Matters
Neither Aradyme nor, to the knowledge of Aradyme, any of its affiliates
has taken or agreed to take any action that would prevent the Merger from
constituting a reorganization qualifying under the provisions of Section
368(a)(1)(A) and (a)(2)(D) of the Code, all as more particularly set forth in a
separate letter of representation in form and substance reasonably acceptable to
Albion to be delivered by Aradyme to Albion at the Closing and which is
incorporated herein by reference.
Section 3.11 Taxes
(a) For purposes of this Section 3.11, the term "taxes" shall
mean all taxes, however denominated, including any interest, penalties,
or other additions to tax that may become payable in respect thereof,
imposed by any federal, territorial, state, local, or foreign
government, or any agency or political subdivision of any such
government, which taxes shall include, without limiting the generality
of the foregoing, all income or profit taxes, payroll and employee
withholding taxes, unemployment insurance, social security taxes, sales
and use taxes, ad valorem taxes, excise taxes, franchise taxes, gross
receipts taxes, business license taxes, occupation taxes, real and
personal property taxes, stamp taxes, environmental taxes, transfer
taxes, workers' compensation, Pension Benefit Guaranty Corporation
premiums and other governmental charges, and other obligations of the
same or of a similar nature to any of the foregoing, required to be
paid, withheld, or collected.
(b) Except as disclosed on Schedule 3.11(b) of the Aradyme
Schedules, Aradyme has made available to Albion complete copies of (i)
all returns and information statements respecting any taxes ("Returns")
of Aradyme for all periods since the formation of Aradyme and for all
periods open under the statute of limitations for assessments, and (ii)
examination reports and statements of deficiencies assessed by Aradyme.
Aradyme does not do business or derive income from any state, local,
territorial, or foreign taxing jurisdiction, so as to be subject to
taxes or Return filing requirements other than those Returns described
in the preceding sentence. Except as disclosed on Schedule 3.11(b) of
the Aradyme Schedules or to the extent that the applicable statute of
limitations has expired, all Returns required to be filed by or on
behalf of Aradyme have been duly filed on a timely basis with the
appropriate governmental authorities and are true, correct, and
complete, and all taxes for all periods covered by such Returns or with
respect to any period prior to the Effective Time, have been duly paid
in full or a provision for the payment thereof has been made in
accordance with generally accepted accounting principles and is
reflected on the Aradyme Most Recent Financial Statements. All such
Returns are accurate and correct in all material respects. Aradyme has
no liabilities with respect to the payment of any taxes (including any
deficiencies, interest, or penalties) accrued for or applicable to the
period ended on the date of the Aradyme Most Recent Financial
Statements, except as reflected therein, and all such dates and years
and periods prior thereto and for which Aradyme may at said date have
been liable in its own right or as transferee of the assets of, or as
successor to, any other corporation or other entity, except for taxes
accrued but not yet due and payable. Aradyme has not elected at any
time pursuant to the Code to be treated as an S corporation pursuant to
Section 1362(a) of the Code or a collapsed corporation pursuant to
Section 341(f) of the Code, nor has Aradyme made any other elections
pursuant to the Code (other than elections that relate solely to
methods of accounting, depreciation, or amortization) that would have
an Aradyme Material Adverse Effect on Aradyme, its financial condition,
its business as presently conducted or proposed to be conducted, or any
of its properties or material assets. There are no outstanding
agreements or waivers extending the statutory period of limitation
applicable to any Return of Aradyme.
(c) Aradyme has complied in all respect with all applicable
laws, rules, and regulations relating to the payment and withholding of
taxes (including any estimated taxes and the withholding of taxes
pursuant to Sections 1441 and 1442 of the Code or similar provisions
under any foreign laws) and has, within the time and the manner
prescribed by law, withheld from employee wages and paid over all
amounts withheld under applicable laws. There are no liens on any of
the assets of Aradyme with respect to taxes other than for taxes not
yet due and payable. There is no material dispute or claim concerning
any liabilities for taxes of Aradyme either raised or reasonably
expected to be raised by any taxing authority.
(d) Except as disclosed in Schedule 3.11(d) of the Aradyme
Schedules, (i) there is no audit of any Returns of Aradyme by a
governmental or taxing authority in process, pending, or threatened
(formally or informally), and Aradyme has no knowledge of any such
potential audit; (ii) except to the extent that the applicable statute
of limitations has expired and except as to matters that have been
resolved, no deficiencies exist or have been asserted (either formally
or informally) or are expected to be asserted with respect to taxes of
Aradyme, and no notice (either formally or informally) has been
received by Aradyme that it has not filed a Return or paid taxes
required to be filed or paid by it; (iii) Aradyme is not a party to any
pending action or proceeding for assessment or collection of taxes, nor
has such an action or proceeding been asserted or threatened (either
formally or informally) against it or any of its assets, except to the
extent that the applicable statute of limitations has expired and
except as to matters that have been resolved; (iv) no waiver or
extension of any statute of limitations is in effect with respect to
taxes or Returns of Aradyme; (v) no action has been taken that would
have the effect of deferring any liability for taxes for Aradyme from
any period prior to the Effective Time to any period after the
Effective Time; (vi) there are no requests for rulings, subpoenas, or
requests for information pending with respect to the taxes of Aradyme;
(vii) no power of attorney has been granted by Aradyme with respect to
any matter relating to taxes; (viii) Aradyme has never been included in
an affiliated group of corporations, within the meaning of Section 1504
of the Code; (ix) Aradyme is not (nor has it ever been) a party to any
tax-sharing agreement between affiliated corporations; and (x) the
amount of liability for unpaid taxes of Aradyme for all periods ending
on or before the Effective Time will not, in the aggregate, materially
exceed the amount of the liability accruals for taxes reflected on the
Aradyme Most Recent Financial Statements.
Section 3.12 Vote Required
The only vote of the holders of any class or series of Aradyme capital
stock necessary to approve the Merger is the affirmative vote of the holders of
a majority of the Aradyme Common Stock and majority of the Aradyme Preferred
Stock outstanding, voting as separated classes.
Section 3.13 Brokers
Except as set forth in Schedule 3.13 of the Aradyme Schedules, no
broker, finder, or investment banker is entitled to any brokerage, finder's, or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Aradyme. Prior to the
date of this Agreement, Aradyme has made available to Albion a complete and
correct copy of all agreements referenced in Schedule 3.13 of the Aradyme
Schedules pursuant to which any such firm will be entitled to any payment
related to the transactions contemplated by this Agreement.
Section 3.14 Information Supplied
Without limiting any of the representations and warranties contained
herein, no representation or warranty of Aradyme and no statement by Aradyme or
other information contained in or documents referred to in the Aradyme
Schedules, as of the date of such representation, warranty, statement, or
document, contains or contained any untrue statement of material fact, or, at
the date thereof, omits or omitted to state a material fact necessary in order
to make the statements contained therein, in light of the circumstances under
which such statements are or were made, not misleading.
Section 3.15 Employee Benefit Plans; Labor Matters
(a) Aradyme is not bound by or subject to (and none of its
operations is bound by or subject to) any written or oral, express or
implied, contract, commitment, or arrangement with any labor union, and
no labor union has requested or, to the knowledge of Aradyme, has
sought to represent any of the employees, representatives, or agents of
Aradyme. There is no strike or other labor dispute involving Aradyme
pending or, to the knowledge of Aradyme, threatened that could have a
material adverse effect on the assets, properties, financial condition,
operating results, or business of Aradyme (as such business is
presently conducted and as it is proposed to be conducted), nor is
Aradyme aware of any labor organization activity involving its
employees. Aradyme is not aware that any officer or key employee, or
that any group of key employees, intends to terminate their employment
with Aradyme, nor does Aradyme have a present intention to terminate
the employment of any of the foregoing. The employment of each officer
and employee of Aradyme, to the best of Aradyme's knowledge, is
terminable at the will of Aradyme.
(b) Except as set forth in Schedule 3.15(b) of the Aradyme
Schedules, Aradyme does not maintain nor has it contributed since
inception to any employee benefit plan (as such term is defined in
ERISA Section 3(s) or with respect to which Aradyme or any member of
its ERISA Group would incur liability under Sections 4065, 4069,
4212(c) or 4204 of ERISA, and any other retirement, pension, stock
option, stock application rights, profit sharing, incentive
compensation, deferred compensation, savings, thrift, vacation pay,
severance pay, or other employee compensation or benefit plan,
agreement, practice, or arrangement, whether written or unwritten,
whether or not legally binding (collectively, the "Aradyme Benefit
Plans"). As of the date of this Agreement, except as would not have an
Aradyme Material Adverse Effect, the material Aradyme Benefit Plans
maintained by Aradyme, or any member of its ERISA Group, or with
respect to which Aradyme has or may have a liability are in substantial
compliance with applicable laws, including ERISA and the Code. Schedule
3.15(b) of the Aradyme Schedules sets forth a list of all Aradyme
Benefit Plans, true and complete copies of which have been furnished to
Albion. With respect to the Aradyme Benefit Plans, no event has
occurred and, to the knowledge of Aradyme, there exists no condition or
set of circumstances in connection with which Aradyme or any member of
its ERISA Group could be subject to any liability under the terms of
such Aradyme Benefit Plans, ERISA, the Code, or any other applicable
law that would have an Aradyme Material Adverse Effect.
(c) Except as otherwise set forth on Schedule 3.15(c) of the
Aradyme Schedules, neither Aradyme nor any member of its ERISA Group
(i) contributes to or has an obligation to contribute to, (ii) has not
since inception contributed to or had an obligation to contribute to,
or (iii) has any secondary liability under ERISA Section 4204 to, a
multiemployer plan within the meaning of Section 3(37) of ERISA.
(d) Neither Aradyme nor any member of its ERISA Group is or
has ever been a party to any collective bargaining or other labor union
contracts. No collective bargaining agreement is being negotiated by
Aradyme. There is no pending or threatened labor dispute, strike, or
work stoppage against Aradyme or any of its subsidiaries that may
interfere with the business activities of Aradyme. None of Aradyme or
any of its representatives or employees has committed any unfair labor
practices in connection with the operation of the business of Aradyme,
and there is no pending or threatened charge or complaint against
Aradyme by the National Labor Relations Board or any comparable state
agency.
(e) With respect to each Aradyme Benefit Plan that is a "group
health plan" within the meaning of Section 5000(b) of the Code, each
such Aradyme Benefit Plan complies and has complied with the
requirements of Part 6 of Title I of ERISA and Sections 4980B and 5000
of the Code, except when the failure to so comply would not have an
Aradyme Material Adverse Effect.
Section 3.16 Employee Relations
Aradyme has complied in all material respects with all applicable laws,
rules, and regulations that relate to prices, wages, hours, harassment, disabled
access, and discrimination employment and collective bargaining and to the
operation of its business and is not liable for any arrears of wages or any
taxes or penalties for failure to comply with any of the foregoing. Aradyme
believes that its relations with its employees are satisfactory.
Section 3.17 Certain Business Practices
None of Aradyme or any directors, officers, agents, or employees of
Aradyme, on behalf of Aradyme, has used any funds for unlawful contributions,
gifts, entertainment, or other unlawful expenses relating to political activity,
made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns, or violated
any provision of the Foreign Corrupt Practices Act of 1977, as amended, or made
any other unlawful payment.
Section 3.18 Environmental Matters
The terms "hazardous waste," "hazardous substance," "disposal,"
"release," and "threatened release," as used in this Agreement, shall have the
same meanings as set forth in the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et
seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub.
L. no. 99-499 ("XXXX"), the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, et seq., the Resource Conservation and Recovery Act, 49 U.S.C.
Section 6901, et seq., or other applicable state or federal laws, rules, or
regulations adopted pursuant to any of the foregoing. Except as set forth in
Schedule 3.18 of the Aradyme Schedules, (a) during the period of Aradyme's
ownership, use, or other occupancy of the properties of Aradyme, Aradyme has not
used, generated, manufactured, stored, treated, disposed of, or released any
hazardous waste or substance on, under, or about any of the properties, except
in compliance with environmental laws; and (b) Aradyme has no knowledge of, or
reason to believe that there has been (i) any use, generation, manufacture,
storage, treatment, disposal, release, or threatened release of any hazardous
waste or substance by any prior owners or occupants of any of the properties,
except in compliance with environmental laws, or (ii) any actual or threatened
litigation or claims of any kind against Aradyme or any other person for whose
conduct it is or may be liable by any person relating to such matters.
Section 3.19 Insurance
Aradyme is currently insured, and at all times since inception has been
insured, for reasonable amounts against such risks as companies similarly
situated would, in accordance with good business practice, customarily be
insured.
Section 3.20 Certain Contracts and Restrictions
Other than agreements, contracts, or commitments listed elsewhere in
the Aradyme Schedules, Schedule 3.20 of the Aradyme Schedules lists, as of the
date hereof, each agreement, contract, or commitment (including any amendments
thereto) to which Aradyme is a party or by which Aradyme is bound involving
consideration during the next 12 months in excess of $10,000 or which is
otherwise material to the assets, liabilities, financial condition, results of
operations, or current or future business of Aradyme taken as a whole. As of the
date of this Agreement and except as indicated on the Aradyme Schedules, Aradyme
has fully complied with all material terms and conditions of all agreements,
contracts, and commitments that will be listed in the Aradyme Schedules and all
such agreements, contracts, and commitments are in full force and effect,
Aradyme has no knowledge of any defaults thereunder or any cancellations or
modifications thereof, and such agreements, contracts, and commitments are not
subject to any memorandum or other written document or understanding permitting
cancellation.
Section 3.21 Properties
Except for liens arising in the ordinary course of business after the
date hereof and properties and assets disposed of in the ordinary course of
business after the date of the Aradyme Most Recent Financial Statements, Aradyme
has good and marketable title, free and clear of all liens the existence of
which would have an Aradyme Material Adverse Effect, to all material properties
and assets, whether tangible or intangible, real, personal, or mixed, reflected
in the Aradyme Most Recent Financial Statements as being owned by Aradyme as of
the date thereof or purported to be owned on the date hereof. All buildings and
all fixtures, equipment, and other property and assets that are material to its
business held under leases by Aradyme are held under valid instruments
enforceable by Aradyme in accordance with their respective terms. Substantially
all of Aradyme's equipment in regular use has been well maintained and is in
good and serviceable condition, reasonable wear and tear excepted.
Section 3.22 Easements
The business of Aradyme has been operated in a manner that does not
violate the material terms of any easements, rights-of-way, permits, servitude,
licenses, and similar rights relating to real property used by Aradyme in its
business (collectively, "Aradyme easements"), except for violations that have
not resulted and will not result in an Aradyme Material Adverse Effect. All
material Aradyme easements are valid and enforceable and grant the rights
purported to be granted thereby and all rights necessary thereunder for the
current operation of such business.
Section 3.23 Futures Trading and Fixed Price Exposure
Aradyme is not presently engaged in any futures or options trading nor
is it a party to any price, interest rate or currency swaps, xxxxxx, futures, or
other derivative instruments.
Section 3.24 Intellectual Property
(a) Schedule 3.24(a) of the Aradyme Schedules lists all the
registered patents, trademarks, service marks, copyrights, trade names,
and applications for any of the foregoing owned by Aradyme as of the
date of this Agreement (the "Aradyme Registered Intellectual
Property"). Aradyme has good and marketable title to the Aradyme
Registered Intellectual Property and has good and marketable title to,
or valid licenses or rights to use, all patents, copyrights,
trademarks, trade names, brand names, proprietary and other technical
information, technology and software (collectively, "Aradyme
Intellectual Property") that are used in the operation of its business
as presently conducted, free from any liens and free from any
requirement of any past, present, or future royalty payments, license
fees, charges, or other payments or conditions or restrictions,
whatsoever, except as set forth on Schedule 3.24(a) of the Aradyme
Schedules. Immediately after the Effective Time, the Surviving
Corporation of the Merger will own or will have the right to use all
Aradyme Intellectual Property free from liens and on the same terms and
conditions as in effect prior to the Effective Time.
(b) To the best of its knowledge, Aradyme has not infringed
upon and is not infringing upon, and has not engaged in and is not
engaging in, any unauthorized use or misappropriation of any patents,
copyrights, trademarks, trade names, brand names, proprietary and other
technical information, technology, and software owned by or belonging
to any other person. Except as set forth in Schedule 3.24(b) of the
Aradyme Schedules, there are no claims or proceedings pending or, to
Aradyme's knowledge, threatened against Aradyme asserting that Aradyme
is infringing or engaging in the unauthorized use or misappropriation
of any intellectual property of any other person or entity.
(c) Aradyme is not aware of prior art with respect to any of
the patents owned or licensed by it that was not disclosed to the U.S.
Patent and Trademark Office (or to any comparable foreign authority, if
necessary) in connection with applications for such patents. Aradyme is
not aware of any fact or event making any one or more claims of any of
such patents invalid or unenforceable, and Aradyme has not engaged in
any conduct, or omitted to perform any necessary act, the result of
which would be to invalidate any of such patents or adversely affect
any of their enforceability.
(d) Schedule 3.24(d) of the Aradyme Schedules sets forth all
agreements and arrangements (i) pursuant to which Aradyme has licensed
Aradyme Intellectual Property to, or permitted (through nonassertion,
settlement, or similar agreements or otherwise) the use of Aradyme
Intellectual Property in other areas by, any other person and (ii)
pursuant to which Aradyme has had Aradyme Intellectual Property
licensed to it or has otherwise been permitted to use Aradyme
Intellectual Property (through nonassertion, settlement, or similar
agreements or otherwise). All of the agreements or arrangements to the
extent set forth on Schedule 3.24(d) of the Aradyme Schedules (x) are
in full force and effect in accordance with their terms, and Aradyme is
not aware that any default exists thereunder by Aradyme or by any other
party thereto; (y) are free and clear of liens; (z) do not contain any
change of control or other terms or conditions that will become
applicable or inapplicable as a result of the consummation of the
Merger and the transactions contemplated by this Agreement. Aradyme has
delivered to Albion true and complete copies of all agreements and
arrangements set forth on Schedule 3.24(d) of the Aradyme Schedules.
There are no royalties, license fees, charges, or other amounts payable
by, or on behalf of, Aradyme in respect of any Aradyme Intellectual
Property, other than as set forth on Schedule 3.24(d) of the Aradyme
Schedules.
Section 3.25 Transactions with Affiliates
Schedule 3.25 of the Aradyme Schedules hereto sets forth a description
of every material contract, agreement, or arrangement between Aradyme and any
person who is or has ever been an officer or director of Aradyme or person
owning of record, or known by Aradyme to own beneficially, 10% or more of the
issued and outstanding common stock of Aradyme, and which is to be performed in
whole or in part after the date hereof or was entered into within three years
before the date hereof. In all of such circumstances, the contract, agreement,
or arrangement was for a bona fide business purpose of Aradyme, and the amount
paid or received, whether in cash, services, or kind, is, has been during the
full term thereof, and is required to be during the unexpired portion of the
term thereof, no less favorable to Aradyme than terms available from otherwise
unrelated parties in arm's-length transactions. Except as disclosed in Schedule
3.25 of the Aradyme Schedules hereto or otherwise disclosed herein, no officer
or director of Aradyme or 10% stockholder of Aradyme has or has had since
inception, any interest, directly or indirectly, in any material transaction
with Aradyme. Schedule 3.25 of the Aradyme Schedules hereto also includes a
description of any commitment by Aradyme, whether written or oral, to lend any
funds to, borrow any money from, or enter into any other material transaction
with any such affiliated person.
Section 3.26 Compliance with Securities Laws
All of the securities offered and sold by Aradyme within three years
prior to the date of this Agreement were issued in transactions exempt from
registration under the Securities Act and applicable state securities laws.
Section 3.27 Minute Book
The minute book of Aradyme contains, and will contain at the Closing
Date, a complete record of all meetings, consents, or other actions of its board
of directors and stockholders for the period from inception through the date
hereof and accurately reflects the substance of all transactions referred to in
such minutes in all material respects.
Section 3.28 Aradyme Schedules
Aradyme has delivered to Albion the Aradyme Schedules, which consist of
separate schedules dated as of the date of execution of this Agreement and
instruments and data as of such date, all certified by the chief executive
officer of Aradyme as true and correct, containing the information and documents
required to be set forth pursuant to this Agreement. Aradyme shall cause the
Aradyme Schedules, instruments, and data delivered to Albion hereunder to be
updated after the date hereof and prior to the Closing Date.
ARTICLE IV
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF ALBION
Albion hereby represents, covenants, and warrants to Aradyme, such
representations, covenants, and warranties to be made as of the date hereof and
at and as of the Closing Date and to survive the Closing and continue in
accordance with the terms hereof (except as otherwise expressly set forth in
Article IX hereof), as set forth in this Article IV and as limited or qualified
by the related disclosure schedules (the "Albion Schedules") supplementally
provided by Albion to Aradyme.
Section 4.01 Organization and Qualifications
Each of Albion and its subsidiary is a corporation duly organized,
validly existing, and in good standing under the laws of its state of
incorporation and has all requisite corporate power and authority to own, lease,
and operate its properties and assets and to carry on its business as it is now
being conducted and is duly qualified and in good standing to do business in
each jurisdiction in which the nature of the business conducted by it or the
ownership or leasing of its properties makes such qualification necessary, other
than where the failure to be so duly qualified and in good standing would not
have an Albion Material Adverse Effect. The term "Albion Material Adverse
Effect," as used in this Agreement, shall mean any change or effect that,
individually or when taken together with all such other changes or effects,
would be reasonably likely to be materially adverse to the assets, liabilities,
financial condition, results of operations, or current or future business of
Albion and its subsidiary, taken as a whole. Except as set forth in Schedule
4.01 of the Albion Schedules: (a) Albion does not own, directly or indirectly,
any subsidiaries; (b) Albion and its subsidiary do not own an equity interest in
any other corporation, partnership, joint venture arrangement, or other business
entity that is material to the assets, liabilities, financial condition, results
of operations, or current or future business of Albion and its subsidiary; and
(c) Albion and its subsidiary do not have any predecessor, as that term is
defined under generally accepted accounting principles.
Section 4.02 Certificate and Bylaws
Included in Schedule 4.02 of the Albion Schedules are complete and
correct copies of the Articles or Certificates of Incorporation and Bylaws (or
equivalent organizational documents) as presently in effect of Albion and its
subsidiary. Neither Albion nor its subsidiary is in violation of any of the
provisions of its Articles or Certificate of Incorporation or any provision of
its Bylaws (or equivalent organizational documents).
Section 4.03 Capitalization
(a) The authorized capital stock of Albion consists of (i)
1,000,000 shares of preferred stock, par value $0.001 per share, none
of which is issued and outstanding; and (ii) 20,000,000 shares of
Albion Common Stock, par value $0.001 per share, of which 1,527,000
shares are issued and outstanding with 1,000,000 reserved to be issued
for cash before the closing. Except as described in this Section 4.03
or Schedule 4.03(a) of the Albion Schedules, no shares of capital stock
of Albion are reserved for any purpose. Each of the outstanding shares
of capital stock of Albion and its subsidiary is duly authorized,
validly issued, fully paid, and nonassessable, and has not been issued
in violation of (nor are any of the authorized shares of capital stock
of Albion and its subsidiary subject to) any preemptive or similar
rights created by statute, the Certificate of Incorporation or Bylaws
of Albion, the Articles of Incorporation or Bylaws of Albion's
subsidiary, or any agreement to which either of Albion or its
subsidiary is a party or by which either is bound, and such outstanding
shares owned by Albion and its subsidiary are owned free and clear of
all security interests, liens, claims, pledges, agreements, limitations
on Albion's and its subsidiary's voting rights, charges, or other
encumbrances of any nature whatsoever.
(b) Except as set forth in Schedule 4.03(b)(i) of the Albion
Schedules, there are no options, warrants, or other rights (including
registration rights), agreements, arrangements, or commitments of any
character to which either of Albion and its subsidiary is a party
relating to the issued or unissued capital stock of Albion or
obligating either of Albion and its subsidiary to grant, issue, or sell
any shares of the capital stock of Albion and its subsidiary. Except as
set forth in Schedule 4.03(b)(ii) of the Albion Schedules, there are no
obligations, contingent or otherwise, of either Albion or its
subsidiary to repurchase, redeem, or otherwise acquire any shares of
Albion Common Stock or other capital stock of Albion, or provide
material funds to, or make any material investment in (in the form of a
loan, capital contribution or otherwise), or provide any guarantee with
respect to the obligations of any other person. Except as described in
Schedule 4.03(b)(iii) of the Albion Schedules, Albion and its
subsidiary do not directly or indirectly own, have not agreed to
purchase or otherwise acquire, or do not hold any interest convertible
into or exchangeable or exercisable for, 5% or more of the capital
stock of any corporation, partnership, joint venture, or other business
association or entity. Except as set forth in Schedule 4.03(b)(iv) of
the Albion Schedules, there are no agreements, arrangements, or
commitments of any character (contingent or otherwise) pursuant to
which any person is or may be entitled to receive any payment based on
the revenues or earnings, or calculated in accordance therewith, of
Albion and its subsidiary. Except as set forth in Schedule 4.03(b)(v)
of the Albion Schedules, there are no voting trusts, proxies, or other
agreements or understanding to which either of Albion or its subsidiary
is a party or by which either of Albion or its subsidiary is bound with
respect to the voting of any shares of capital stock of Albion and its
subsidiary.
(c) Albion has made available to Aradyme complete and correct
copies of (i) each stock option, stock award, or other benefit plans
(collectively, the "Albion Option Plans") and the forms of options
issued pursuant to any Albion Option Plan, including all amendments
thereto, and (ii) all options and warrants that are not in the form
specified under clause (i) above. Schedule 4.03(c) of the Albion
Schedules sets forth a complete and correct list of all outstanding
warrants and options, restricted stock, or any other stock awards (the
"Albion Stock awards") granted under the Albion Option Plans or
otherwise, setting forth as of the date hereof the number and type of
Albion Stock awards, the exercise price of each outstanding stock
option or warrant, and the number of stock options and warrants
presently exercisable.
(d) The shares of New Albion Stock to be issued pursuant to
this Agreement have been duly authorized and, upon issuance in
accordance with the terms of this Agreement, will be validly issued,
fully paid, and nonassessable, and not issued in violation of any
preemptive or similar rights created by statute, the Certificate of
Incorporation or Bylaws of Albion, or any agreement to which Albion is
a party or by which it is bound.
Section 4.04 Authority
Albion has all requisite corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder, and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement by Albion and the consummation by Albion of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
and no other corporate proceedings on the part of Albion are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly executed and delivered by Albion and, assuming the
due authorization, execution, and delivery thereof by Aradyme, constitutes the
legal, valid, and binding obligation of Albion enforceable against Albion in
accordance with its terms, except that (a) such enforcement may be subject to
applicable bankruptcy, insolvency, or other similar laws, now or hereafter in
effect, affecting creditors' rights generally, and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
Section 4.05 No Conflict: Required Filings and Consents
(a) Except as set forth in Schedule 4.05(a) of the Albion
Schedules, the execution and delivery of this Agreement by Albion does
not, and the consummation of the transaction contemplated hereby will
not, (i) conflict with or violate the Certificate or Articles of
Incorporation or Bylaws, in each case as amended or restated, of Albion
and its subsidiary, (ii) conflict with or violate any laws applicable
to Albion and its subsidiary or by which any of their respective
properties are bound or subject, or (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time, or
both, would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or encumbrance on any of the properties or
assets of Albion or its subsidiary pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit,
franchise, or other instrument or obligation to which either of Albion
or its subsidiary is a party or by or to which Albion and its
subsidiary or any of their respective properties are bound or subject,
except for any such conflicts or violations described in clause (ii) or
breaches, defaults, events, rights of termination, amendment,
acceleration or cancellation, payment obligations, or liens or
encumbrances described in clause (iii) that would not have an Albion
Material Adverse Effect.
(b) The execution and delivery of this Agreement by Albion
does not, and consummation of the transactions contemplated hereby will
not, require Albion to obtain any consent, license, permit, approval,
waiver, authorization or order of, or to make any filing with or
notification to, any governmental entities, except for (i) complying
with certain federal and state securities laws as provided in Article V
hereof and (ii) filing appropriate merger documents as required by
applicable state laws and when the failure to obtain such consents,
licenses, permits, approvals, waivers, authorizations or orders, or to
make such filings or notifications, would not, either individually or
in the aggregate, materially interfere with Albion's performance of its
obligations under this Agreement and would not have an Albion Material
Adverse Effect.
Section 4.06 Permits; Compliance
Each of Albion and its subsidiary and, to Albion's knowledge, each
third-party operator of any of Albion's and its subsidiary's properties, are in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exemptions, consents, certificates, approvals, and orders
necessary to own, lease, and operate its properties and to carry on its business
in all material respects as it is now being conducted or as presently
foreseeable (collectively, the "Albion permits"), and there is no action,
proceeding, or investigation pending or, to the knowledge of Albion, threatened
regarding suspension or cancellation of any of the Albion permits, except when
the failure to possess, or the suspension or cancellation of, such Albion
permits would not have an Albion Material Adverse Effect. Except as set forth in
Schedule 4.06 of the Albion Schedules, Albion and its subsidiary have not
received from any governmental entity any written notification with respect to
possible conflicts, defaults, or violations of laws, except for written notices
relating to possible conflicts, defaults, or violations that would not have an
Albion Material Adverse Effect.
Section 4.07 Books and Records
The books and records, financial and otherwise, of Albion and its
subsidiary are in all material respects complete and correct and have been made
and maintained in accordance with sound business and bookkeeping practices and,
in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of Albion and its subsidiary. Each of Albion and its
subsidiary has maintained a system of internal accounting controls sufficient to
provide reasonable assurances that (a) transactions have been and are executed
in accordance with management's general or specific authorization; (b)
transactions are recorded as necessary to permit the preparation of financial
statements in conformity with generally accepted accounting principles or any
other criteria applicable to such statements and to maintain accountability for
assets; (c) access to assets is permitted only in accordance with management's
general or specific authorization; and (d) the recorded accountability for
assets is compared with the existing assets at reasonable intervals, and
appropriate action is taken with respect to any differences.
Section 4.08 Reports; Financial Statements
(a) Since February 13, 2001, Albion has filed all forms,
reports, statements, and other documents required to be filed with the
SEC, including all registration statements filed under the Exchange
Act, all annual reports on Form 10-KSB, all quarterly reports on Form
10-QSB, all proxy statements relating to meetings of stockholders
(whether annual or special), all current reports on Form 8-K, and all
other reports, schedules, registration statements, or other documents
and all forms, reports, statements, and other documents required to be
filed with any other applicable federal or state regulatory
authorities, except where the failure to file any such forms, reports,
statements, or other documents would not have an Albion Material
Adverse Effect (all such forms, reports, statements, and other
documents referred to above in this Section 4.08(a) being referred to
herein, collectively, as the "Albion SEC Reports"). The Albion SEC
Reports, including all Albion SEC Reports filed after the date of this
Agreement and prior to the Effective Time, were or will be prepared in
accordance with the requirements of applicable law (including, with
respect to Albion SEC Reports, the Securities Act and the Exchange Act,
as the case may be, and the rules and regulations of the SEC thereunder
applicable to such Albion SEC Reports) and did not at the time they
were filed, or will not at the time they are filed, contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they are made,
not misleading. Such Albion SEC Reports include an unaudited
consolidated balance sheet of Albion and its subsidiary as of September
30, 2002, and related consolidated statements of operations and cash
flows for the three and nine months then ended, including the notes
thereto (the "Albion Most Recent Financial Statements").
(b) Each of the consolidated financial statements (including,
in each case, any related notes thereto) contained in Albion SEC
Reports filed prior to the Effective Time have been or will be prepared
in accordance with the published rules and regulations of the SEC and
generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except to the extent required by
changes in generally accepted accounting principles; with respect to
Albion SEC Reports filed prior to the date of this Agreement, as may be
indicated in the notes thereto; and with respect to interim financial
statements as may be permitted by Article 10 of Regulation S-X) and
fairly present or will fairly present the consolidated financial
position of Albion and its subsidiary as of the respective dates
thereof and the consolidated results of operations and cash flows for
the periods indicated (including reasonable estimates of normal and
recurring year-end adjustments), except that any unaudited interim
financial statements were or will be subject to normal and recurring
year-end adjustments and any pro forma financial statements contained
in such consolidated financial statements are not necessarily
indicative of the consolidated financial position of Albion and its
subsidiary as of the respective dates thereof and the consolidated
results of operations and cash flows for the periods indicated.
Section 4.09 Absence of Certain Changes or Events
Except as contemplated by this Agreement or as set forth in Schedule
4.09 of the Albion Schedules, since the date of the Albion Most Recent Financial
Statements, each of Albion and its subsidiary has conducted its business in the
ordinary course of business consistent with past practice. Since the date of the
Albion Most Recent Financial Statements, there has not been (a) any event,
change, or effect (including the occurrence of any liabilities of any nature,
whether or not accrued, contingent, or otherwise) having or, which would be
reasonably likely to have, individually or in the aggregate, an Albion Material
Adverse Effect; (b) any declaration, setting aside, or payment of any dividend
or other distribution (whether in cash, stock, or property) with respect to the
equity interests of Albion or its subsidiary or any redemption, purchase, or
other acquisition by Albion or its subsidiary of any of Albion's capital stock;
(c) any revaluation by either of Albion or its subsidiary of its assets,
including the writing down of the value of inventory or the writing down or off
of notes or accounts receivable, other than in the ordinary course of business
and consistent with past practices; (d) any change by either of Albion or its
subsidiary in accounting principles or methods, except insofar as may be
required by a change in generally accepted accounting principles; (e) a
fundamental change in the nature of Albion's or its subsidiary's business; (f)
any arrangement for the disposition of any material property or assets of Albion
or its subsidiary; (g) any accrual or arrangement for or payment of bonuses or
special compensation of any kind or any severance or termination pay to any
present or former officer, employee, or stockholder; (h) any increase in any
profit sharing, bonus, deferred compensation, insurance, pension, retirement, or
other employee benefit plan, payment or arrangement made to, for, or with its
officers, directors, or employees, or (i) an Albion Material Adverse Effect.
Section 4.10 Absence of Litigation
Except as set forth in Schedule 4.10 of the Albion Schedules, there is
no claim, suit, litigation, proceeding, arbitration, or, to the knowledge of
Albion, investigation of any kind, at law or in equity (including actions or
proceedings seeking injunctive relief), pending or threatened against Albion,
its subsidiary, or any of their properties (except for claims, actions, suits,
litigation, proceedings, arbitrations, or investigations that would not have an
Albion Material Adverse Effect), and each of Albion and its subsidiary is not
subject to any continuing order of, consent decree, settlement agreement, or
other similar written agreement with, or, to the knowledge of Albion, continuing
investigation by, any governmental entity, or any judgment, order, writ,
injunction, decree, or award of any Government Entity or arbitrator, including,
without limitation, cease-and-desist or other orders, except for matters that
would not have an Albion Material Adverse Effect.
Section 4.11 Tax Matters
Neither Albion and its subsidiary nor, to the knowledge of Albion, any
of its affiliates have taken or agreed to take any action that would prevent the
Merger from constituting a reorganization qualifying under the provisions of
Section 368(a)(1)(A) and (a)(2)(D) of the Code, all as more particularly set
forth in a separate letter of representation in form and substance reasonably
satisfactory to Aradyme to be delivered by Albion to Aradyme at the Closing and
which is incorporated herein by reference.
Section 4.12 Taxes
(a) Except as disclosed on Schedule 4.12(a), Albion has made
available to Aradyme complete copies of (i) all tax returns of Albion
and its subsidiary for all periods since the formation of each of
Albion and its subsidiary open under the statute of limitations for
assessments and (ii) examination reports and statements of deficiencies
assessed by each of Albion and its subsidiary. Albion and its
subsidiary do not do business or derive income from any state, local,
territorial, or foreign taxing jurisdiction, so as to be subject to
taxes or Return filing requirements, other than those Returns described
in the preceding sentence. Except as disclosed on Schedule 4.12(b) or
to the extent that the applicable statute of limitations has expired,
all Returns required to be filed by or on behalf of Albion and its
subsidiary have been duly filed on a timely basis with the appropriate
governmental entities and are true, correct, and complete, and all
taxes for all periods covered by such Returns or with respect to any
period prior to the Effective Time, have been duly paid in full or a
provision for the payment thereof has been made in accordance with
generally accepted accounting principles and is reflected on the Albion
Most Recent Financial Statements. All such Returns are accurate and
correct in all material respects. Albion and its subsidiary have no
liabilities with respect to the payment of any taxes (including any
deficiencies, interest, or penalties) accrued for or applicable to the
period ended on the date of the Albion Most Recent Financial
Statements, except as reflected therein, and all such dates and years
and periods prior thereto and for which Albion and its subsidiary may
at said date have been liable in their own right or as transferee of
the assets of, or as successor to, any other corporation or other
entity, except for taxes accrued but not yet due and payable. Neither
Albion nor its subsidiary has elected at any time pursuant to the Code
to be treated as an S corporation pursuant to Section 1362(a) of the
Code or a collapsed corporation pursuant to Section 341(f) of the Code,
nor has Albion or its subsidiary made any other elections pursuant to
the Code (other than elections that relate solely to methods of
accounting, depreciation, or amortization) that would have an Albion
Material Adverse Effect on Albion, its financial condition, its
business as presently conducted or proposed to be conducted, or any of
its properties or material assets. There are no outstanding agreements
or waivers extending the statutory period of limitation applicable to
any tax return of Albion and its subsidiary.
(c) Each of Albion and its subsidiary has complied in all
respect with all applicable laws, rules and regulations relating to the
payment and withholding of taxes (including any estimated taxes and the
withholding of taxes pursuant to Sections 1441 and 1442 of the Code or
similar provisions under any foreign laws) and has, within the time and
the manner prescribed by law, withheld from employee wages and paid
over all amounts withheld under applicable laws. There are no liens on
any of the assets of Albion and its subsidiary with respect to taxes
other than for taxes not yet due and payable. There is no material
dispute or claim concerning any liabilities for taxes of Albion and its
subsidiary either raised or reasonably expected to be raised by any
taxing authority.
(d) Except as disclosed in Schedule 4.12(d) of the Albion
Schedules, (i) there is no audit of any tax return of Albion and its
subsidiary by a governmental or taxing authority in process, pending,
or threatened (formally or informally), and Albion has no knowledge of
any such potential audit; (ii) except to the extent that the applicable
statute of limitations has expired and except as to matters that have
been resolved, no deficiencies exist or have been asserted (either
formally or informally) or are expected to be asserted with respect to
taxes of Albion and its subsidiary, and no notice (either formally or
informally) has been received by either of Albion or its subsidiary
that it has not filed a tax return or paid taxes required to be filed
or paid by it; (iii) neither Albion nor its subsidiary is a party to
any pending action or proceeding for assessment or collection of taxes,
nor has such an action or proceeding been asserted or threatened
(either formally or informally) against it or any of its assets, except
to the extent that the applicable statute of limitations has expired
and except as to matters that have been resolved; (iv) no waiver or
extension of any statute of limitations is in effect with respect to
taxes or tax returns of Albion and its subsidiary; (v) no action has
been taken that would have the effect of deferring any liability for
taxes for Albion and its subsidiary from any period prior to the
Effective Time to any period after the Effective Time; (vi) there are
no requests for rulings, subpoenas, or requests for information pending
with respect to the taxes of Albion or its subsidiary; (vii) no power
of attorney has been granted by either Albion or its subsidiary with
respect to any matter relating to taxes; (viii) Albion and its
subsidiary have never been included in an affiliated group of
corporations, within the meaning of Section 1504 of the Code; (ix)
Albion and its subsidiary are not (nor have they ever been) a party to
any tax-sharing agreement between affiliated corporations; and (x) the
amount of liability for unpaid taxes of Albion and its subsidiary for
all periods ending on or before the Effective Time will not, in the
aggregate, materially exceed the amount of the liability accruals for
taxes reflected on the Albion Most Recent Financial Statements.
Section 4.13 No Vote Required
No vote of the holders of any class or series of Albion capital stock
is required by Delaware Law or otherwise necessary to approve the Merger.
Section 4.14 Brokers
Except as set forth in Schedule 4.14 of the Albion Schedules, no
broker, finder, or investment banker is entitled to any brokerage, finder's, or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Albion. Prior to the
date of this Agreement, Albion has made available to Aradyme a complete and
correct copy of all agreements referenced in Schedule 4.14 pursuant to which any
such firm will be entitled to any payment related to the transactions
contemplated by this Agreement.
Section 4.15 Information Supplied
Without limiting any of the representations and warranties contained
herein, no representation or warranty of Albion and its subsidiary and no
statement by Albion and its subsidiary or other information contained in or
documents referred to in the Albion Schedules, as of the date of such
representation, warranty, statement, or document, contains or contained any
untrue statement of material fact, or, at the date thereof, omits or omitted to
state a material fact necessary in order to make the statements contained
therein, in light of the circumstances under which such statements are or were
made, not misleading.
Section 4.16 Employee Benefit Plans; Labor Matters
(a) Neither Albion nor its subsidiary is not bound by or
subject to (and none of its operations is bound by or subject to) any
written or oral, express or implied, contract, commitment, or
arrangement with any labor union, and no labor union has requested or,
to the knowledge of Albion, has sought to represent any of the
employees, representatives, or agents of Albion or its subsidiary.
There is no strike or other labor dispute involving Albion or its
subsidiary pending or, to the knowledge of Albion, threatened that
could have a Albion Material Adverse Effect (as the business or Albion
is presently conducted and as it is proposed to be conducted), nor is
Albion aware of any labor organization activity involving its or its
subsidiary's employees. Albion is not aware that any officer or key
employee, or that any group of key employees, intends to terminate
employment with either of Albion or its subsidiary, and neither Albion
nor its subsidiary has a present intention to terminate the employment
of any of the foregoing. The employment of each officer and employee of
each of Albion and its subsidiary, to the best of Albion's knowledge,
is terminable at the will of Albion.
(b) Except as set forth in Schedule 4.16(b) of the Albion
Schedules, Albion and its subsidiary do not maintain, nor has either
contributed since its inception, to any employee benefit plan (as such
term is defined in ERISA Section 3(s) or with respect to which Albion,
its subsidiary, or any member of their respective ERISA Group would
incur liability under Sections 4065, 4069, 4212 (c) or 4204 of ERISA,
and any other retirement, pension, stock option, stock application
rights, profit sharing, incentive compensation, deferred compensation,
savings, thrift, vacation pay, severance pay, or other employee
compensation or benefit plan, agreement, practice, or arrangement,
whether written or unwritten, whether or not legally binding
(collectively, the "Albion Benefit Plans"). As of the date of this
Agreement, except as would not have an Albion Material Adverse Effect,
the material Albion Benefit Plans maintained by Albion, its subsidiary,
or any member of its ERISA Group, or with respect to which Albion and
its subsidiary have or may have a liability are in substantial
compliance with applicable laws, including ERISA and the Code. Schedule
4.16(b) sets forth a list of all Albion Benefit Plans, true and
complete copies of which have been furnished to Aradyme. With respect
to the Albion Benefit Plans, no event has occurred and, to the
knowledge of Albion, there exists no condition or set of circumstances
in connection with which Albion, its subsidiary, or any member of their
ERISA Group could be subject to any liability under the terms of such
Albion Benefit Plans, ERISA, the Code, or any other applicable law that
would have an Albion Material Adverse Effect.
(c) Except as otherwise set forth on Schedule 4.16(c) of the
Albion Schedules, neither Albion and its subsidiary nor any member of
their ERISA Group (i) contributes to or has an obligation to contribute
to, (ii) has not since inception contributed to or had an obligation to
contribute to, or (ii) has any secondary liability under ERISA Section
4204 to, a multiemployer plan within the meaning of Section 3(37) of
ERISA.
(d) Neither Albion and its subsidiary nor any member of their
ERISA Group is or has ever been a party to any collective bargaining or
other labor union contracts. No collective bargaining agreement is
being negotiated by either of Albion or its subsidiary. There is no
pending or threatened labor dispute, strike, or work stoppage against
Albion or its subsidiary that may interfere with the business
activities of Albion or its subsidiary. None of Albion, its subsidiary
or any of their representatives or employees has committed any unfair
labor practices in connection with the operation of the business of
Albion and its subsidiary, and there is no pending or threatened charge
or complaint against either of Albion or its subsidiary by the National
Labor Relations Board or any comparable state agency.
(e) With respect to each Albion Benefit Plan that is a "group
health plan" within the meaning of Section 5000(b) of the Code, each
such Albion Benefit Plan complies and has complied with the
requirements of Part 6 of Title I of ERISA and Sections 4980B and 5000
of the Code, except when the failure to so comply would not have an
Albion Material Adverse Effect.
Section 4.17 Employee Relations
Each of Albion and its subsidiary has complied in all material respects
with all applicable laws, rules, and regulations that relate to prices, wages,
hours, harassment, disabled access, and discrimination employment and collective
bargaining and to the operation of its business and is not liable for any
arrears of wages or any taxes or penalties for failure to comply with any of the
foregoing. Albion believes that its relations with its employees are
satisfactory.
Section 4.18 Certain Business Practices
None of Albion, its subsidiary, or any directors, officers, agents, or
employees of Albion or its subsidiary on behalf of Albion or its subsidiary has
used any funds for unlawful contributions, gifts, entertainment, or other
unlawful expenses relating to political activity, made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns or violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended, or made any other unlawful payment.
Section 4.19 Environmental Matters
The terms "hazardous waste," "hazardous substance," "disposal,"
"release," and "threatened release," as used in this Agreement, shall have the
same meanings as set forth in CERCLA, XXXX, the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation
and Recovery Act, 49 U.S.C. Section 6901, et seq., or other applicable state or
federal laws, rules, or regulations adopted pursuant to any of the foregoing.
Except as set forth in Schedule 4.19, (a) during the period of its ownership,
use, or other occupancy of the properties, neither Albion nor its subsidiary has
used, generated, manufactured, stored, treated, disposed of, or released any
hazardous waste or substance on, under, or about any of the properties, except
in compliance with environmental laws; and (b) Albion has no knowledge of, or
reason to believe that there has been (i) any use, generation, manufacture,
storage, treatment, disposal, release, or threatened release of any hazardous
waste or substance by any prior owners or occupants of any of the properties,
except in compliance with environmental laws, or (ii) any actual or threatened
litigation or claims of any kind against Albion, its subsidiary, or any other
person for whose conduct it is or may be liable by any person relating to such
matters.
Section 4.20 Insurance
Each of Albion and its subsidiary is currently insured, and at all
times since inception has been insured, for reasonable amounts against such
risks as companies similarly situated would, in accordance with good business
practice, customarily be insured.
Section 4.21 Certain Contracts and Restrictions
Other than agreements, contracts, or commitments listed elsewhere in
the Albion Schedules, Schedule 4.21 of the Albion Schedules lists, as of the
date hereof, each agreement, contract, or commitment (including any amendments
thereto) to which Albion or its subsidiary is a party or by which Albion or its
subsidiary is bound involving consideration during the next 12 months in excess
of $10,000 or which is otherwise material to the assets, liabilities, financial
condition, results of operations, or current or future business of Albion and
its subsidiary, taken as a whole. As of the date of this Agreement and except as
indicated on the Albion Schedules, (a) Albion and its subsidiary have fully
complied with all material terms and conditions of all agreements, contracts,
and commitments that will be listed in the Albion Schedules and all such
agreements, contracts, and commitments are in full force and effect, (b) Albion
and its subsidiary have no knowledge of any defaults thereunder or any
cancellations or modifications thereof, and (c) such agreements, contracts, and
commitments are not subject to any memorandum or other written document or
understanding permitting cancellation.
Section 4.22 Properties
Except for liens arising in the ordinary course of business after the
date hereof and properties and assets disposed of in the ordinary course of
business after the date of the Albion Most Recent Financial Statements, each of
Albion and its subsidiary has good and marketable title, free and clear of all
liens the existence of which would have an Albion Material Adverse Effect, to
all material properties and assets, whether tangible or intangible, real,
personal, or mixed, reflected in the Albion Most Recent Financial Statements as
being owned by each of Albion and its subsidiary as of the date thereof or
purported to be owned on the date hereof. All buildings, fixtures, equipment,
and other property and assets that are material to its business held under
leases by each of Albion and its subsidiary are held under valid instruments
enforceable by each of Albion and its subsidiary in accordance with their
respective terms. Substantially all of Albion's and its subsidiary's equipment
in regular use has been well maintained and is in good and serviceable
condition, reasonable wear and tear excepted.
Section 4.23 Easements
The business of each of Albion and its subsidiary has been operated in
a manner that does not violate the material terms of any easements,
rights-of-way, permits, servitude, licenses, and similar rights relating to real
property used by Albion or its subsidiary in its business (collectively, "Albion
easements") except for violations that have not resulted and will not result in
an Albion Material Adverse Effect. All material Albion easements are valid and
enforceable and grant the rights purported to be granted thereby and all rights
necessary thereunder for the current operation of such business.
Section 4.24 Futures Trading and Fixed Price Exposure
Neither Albion nor its subsidiary is presently engaged in any futures
or options trading or is a party to any price, interest rate or currency swaps,
xxxxxx, futures, or other derivative instruments.
Section 4.25 Intellectual Property
(a) Schedule 4.25(a) lists all the registered patents,
trademarks, service marks, copyrights, trade names, and applications
for any of the foregoing owned by each of Albion and its subsidiary as
of the date of this Agreement (the "Albion Registered Intellectual
Property"). Albion has good and marketable title to the Albion
Registered Intellectual Property and has good and marketable title to,
or valid licenses or rights to use, all patents, copyrights,
trademarks, trade names, brand names, proprietary and other technical
information, technology and software (collectively, "Albion
Intellectual Property") that are used in the operation of its business
as presently conducted, free from any liens and free from any
requirement of any past, present, or future royalty payments, license
fees, charges, or other payments or conditions or restrictions,
whatsoever, except as set forth on Schedule 4.25. Immediately after the
Effective Time, the Surviving Corporation of the Merger will own or
will have the right to use all Albion Intellectual Property free from
liens and on the same terms and conditions as in effect prior to the
Effective Time.
(b) To the best of Albion's knowledge, Albion and its
subsidiary have not infringed upon and are not infringing upon, and
have not engaged in and are not engaging in, any unauthorized use or
misappropriation of any patents, copyrights, trademarks, trade names,
brand names, proprietary and other technical information, technology,
and software owned by or belonging to any other person. Except as set
forth in Schedule 4.25(b), there are no claims or proceedings pending
or, to Albion's knowledge, threatened against Albion and its subsidiary
asserting that either of Albion or its subsidiary is infringing or
engaging in the unauthorized use or misappropriation of any
intellectual property of any other person or entity.
(c) Albion is not aware of prior art with respect to any of
the patents owned or licensed by it that was not disclosed to the U.S.
Patent and Trademark Office (or to any comparable foreign authority, if
necessary) in connection with applications for such patents. Albion is
not aware of any fact or event making any one or more claims of any of
such patents invalid or unenforceable, and Albion and its subsidiary
have not engaged in any conduct, or omitted to perform any necessary
act, the result of which would be to invalidate any of such patents or
adversely affect any of their enforceability.
(d) Schedule 4.25(d) sets forth all agreements and
arrangements (i) pursuant to which each of Albion and its subsidiary
has licensed Albion Intellectual Property to, or permitted (through
nonassertion, settlement or similar agreements or otherwise) the use of
Albion Intellectual Property in other areas by, any other person and
(ii) pursuant to which Albion and its subsidiary have had Albion
Intellectual Property licensed to them, or have otherwise been
permitted (through nonassertion, settlement, or similar agreements or
otherwise) to use Albion Intellectual Property. All of the agreements
or arrangements to the extent set forth on Schedule 4.25(d) of the
Albion Schedules (x) are in full force and effect in accordance with
their terms, and Albion is not aware that any default exists thereunder
by Albion, its subsidiary or by any other party thereto; (y) are free
and clear of liens; (z) do not contain any change of control or other
terms or conditions that will become applicable or inapplicable as a
result of the consummation of the Merger and the transactions
contemplated by this Agreement. Albion has delivered to Aradyme true
and complete copies of all agreements and arrangements set forth on
Schedule 4.25(d). There are no royalties, license fees, charges, or
other amounts payable by, or on behalf of, Albion and its subsidiary in
respect of any Albion Intellectual Property other than as set forth on
Schedule 4.25(d).
Section 4.26 Transactions with Affiliates
The Albion SEC Reports set forth a description of every material
contract, agreement, or arrangement between Albion or its subsidiary and any
person who is or has ever been an officer, director, or promoter (as defined in
Rule 405 under the Securities Act) of Albion or its subsidiary, or person owning
of record, or known by Albion to own beneficially, 5% or more of the issued and
outstanding common stock of Albion or its subsidiary, and which is to be
performed in whole or in part after the date hereof or was entered into within
three years before the date hereof. In all of such circumstances, the contract,
agreement, or arrangement was for a bona fide business purpose of either Albion
or its subsidiary, and the amount paid or received, whether in cash, services,
or kind, is, has been during the full term thereof, and is required to be during
the unexpired portion of the term thereof, no less favorable to Albion and its
subsidiary than terms available from otherwise unrelated parties in arm's-length
transactions. Except as disclosed in Schedule 4.26 hereto or otherwise disclosed
herein, no officer, director, or 5% stockholder of either Albion or its
subsidiary has, or has had since inception, any interest, directly or
indirectly, in any material transaction with either Albion or its subsidiary.
Schedule 4.26 hereto also includes a description of any commitment by Albion and
its subsidiary, whether written or oral, to lend any funds to, borrow any money
from, or enter into any other material transaction with, any such affiliated
person.
Section 4.27 Minute Books
(a) The minute book of Albion contains, and will contain at
the Closing Date, evidence of the due election and incumbency of the
board of directors and officers of Albion executing this Agreement or
any document, certificate, or other instrument executed in order to
consummate the transactions herein contemplated, together with an
accurate and complete record of the proceeds of all meeting of
directors, committees thereof, or stockholders and all written consents
in lieu thereof.
(b) The minute book of Albion Merger Corp. will contain at the
Closing Date, evidence of the due election and incumbency of the board
of directors and officers of Albion Merger Corp. executing this
Agreement or any document, certificate, or other instrument executed in
order to consummate the transactions herein contemplated, together with
an accurate and complete record of the proceeds of all meeting of
directors, committees thereof, or stockholders and all written consents
in lieu thereof.
Section 4.28 Stockholders' List
The stockholders' list of Albion included in Schedule 4.28 of the
Albion Disclosure Schedules is a true and accurate copy of the stockholders of
record of Albion as of the date indicated thereon, arranged in alphabetical
order, with each's last known address. Albion's transfer agent retains in
safekeeping all certificates that have been or should be canceled on the
registration of transfer thereof. All of such canceled certificates have on
their face in conspicuous permanent ink or perforations the word "canceled." All
stock certificates issued to date and all unissued blank certificates are
sequentially numbered 1 through 1111. All of such certificates are accounted for
as either canceled and in the possession of the transfer agent, outstanding, or
unissued. To the best of Albion's knowledge, except for securities
broker-dealers, clearing agencies, securities depositories, banks, or other
securities industry entities registered with the SEC whose regular business
consists of holding securities beneficially owned by others, each stockholder
listed on such stockholders' list is the beneficial owner thereof, and such
stockholder is not a party to, and such stockholder's stock is not subject to,
any agreement, understanding, power-of-attorney, or other arrangement of any
kind with any person who is an affiliate of Albion or acting in concert with
such affiliate under which such affiliate or person acting in concert with such
affiliate has or shares investment, voting or dispositive power over such
securities.
Section 4.29 Issuances of Securities in Compliance with
Securities Laws
All securities of Albion issued since its inception, consisting solely
of common voting stock, have been issued pursuant to and in compliance with
applicable federal and state laws, rules, and regulations. All offers and sales
of shares of Albion Common Stock were either effected in compliance with an
effective registration statement under the Securities Act or an available
exemption from registration under Section 5 of the Securities Act and under an
available exemption from or preemption of applicable state securities laws.
Further, Albion has filed all required notices, reports or other documents with
any federal or state regulatory agency regarding the offer and sale of all
issued and outstanding shares of Albion Common Stock.
Section 4.30 EBB Listing
The Albion Common Stock is now and will be, on the Closing Date, traded
in the over-the-counter market on the Nasdaq OTC Electronic Bulletin Board, and
Albion will not have received any notice from Nasdaq or the National Association
of Securities Dealers Inc. that it intends to delist, suspend, or remove the
Albion Common Stock from the Nasdaq OTC Electronic Bulletin Board. Effective
January 22, 2003, the trading symbol for Albion was changed to "ADYE."
Section 4.31 Public Trading Activity
Neither Albion nor, to the best knowledge of Albion, any other person,
has at any time during the past year or currently has any agreement, plan, or
arrangement to at any time in the future (a) submit or publish or cause to be
submitted or published, directly or indirectly, any quotation for the common
stock of Albion on behalf of Albion or any of its affiliates; or (b) provide to
any securities broker-dealer any incentive or inducement, financial or
otherwise, to publish quotations for the common stock of Albion at any specific
or minimum prices or amounts or to execute any specific transactions in such
common stock, other than usual and customary commissions, markdowns and markups.
Section 4.32 Worldwide Web Communications
Neither Albion and its subsidiary nor, to the best knowledge of Albion,
any other person associated with or acting on behalf of Albion and its
subsidiary has at any time during the preceding year posted, either in his, her,
or its name or under any pseudonym, whether or not accompanied by personally
identifiable information, any statement, comment, or other communication on any
worldwide web or Internet chat room, bulletin board, or other forum, whether or
not access is or purports to be restricted, respecting Albion, its subsidiary,
its business or financial condition, prospects, management or opportunities, or
its securities or effecting transactions therein, except public releases by
Albion duly authorized by its officers or directors. Neither Albion nor its
subsidiary has at any time during the preceding year maintained an Internet web
site.
Section 4.33 Tradability of Outstanding Stock; Manual
Exemption
To the extent applicable, Albion has complied with the registration
requirements of the securities laws of each and every jurisdiction in which a
stockholder resided as of the date such stockholder purchased securities from
Albion, and such shares purchased from Albion can be resold without restriction
(except for any applicable control restrictions) by such stockholder in said
jurisdiction immediately after the Closing as herein contemplated. Albion has
caused to be published in one or more securities manuals recognized by state
securities regulatory authorities as set forth on Schedule 4.33 of the Albion
Schedules: (a) the names of Albion's officers and directors, (b) Albion's
balance sheet as of a recent practicable date, and (c) a profits and loss
statement for either the fiscal year preceding the balance sheet or for the most
recent fiscal year of operations.
Section 4.34 Equity Vehicle
Albion acknowledges that Aradyme's purpose in entering into this
Agreement is to obtain an investment vehicle to enhance Aradyme's opportunities
to raise equity capital to assist in the growth of its operations and represents
and warrants that Albion knows of no reason, other than requirements of federal,
state, and provincial securities law, that would inhibit or impair the ability
of Albion to raise equity capital by way of additional stock sales or for a
liquid market to develop in Albion Common Stock by trading in the
over-the-counter securities market, free from illegal influence or manipulation.
Albion knows of no reason why immediately after the transaction herein
contemplated, Albion would be restricted by any contract, understanding,
commitment, obligation, course of dealing, representation, or other arrangement
by Albion or by which Albion is bound, in Albion's choice of:
(a) broker-dealer to market or underwrite its securities;
(b) attorney to assist in Albion's compliance with
all securities laws and other legal
affairs;
(c) accountant to audit, review, or compile the financial
statements of Albion;
(d) director, officer, employee or agent; or
(e) the price at which it may offer its securities for sale to
the open market, to any existing stockholder, or to any person, or
which would restrict the number, type, or value of any securities to be
sold by Albion after the Closing as herein contemplated.
Section 4.35 Albion Schedules
Albion has delivered to Aradyme the Albion Schedules referred to in
this Article IV, which consist of separate schedules dated as of the date of
execution of this Agreement and instruments and data as of such date, all
certified by the chief executive officer of Albion as true and correct,
containing the information and documents required to be set forth pursuant to
this Agreement. Albion shall cause the Albion Schedules, instruments, and data
delivered to Aradyme hereunder to be updated after the date hereof and prior to
the Closing Date.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.01 Affirmative Covenants of Each Party
Each Party hereby covenants and agrees that, at or prior to the Closing
Date, unless otherwise expressly contemplated by this Agreement or consented to
in writing by all other Parties, each Party will:
(a) continue to operate its business in the ordinary
course consistent with past practices;
(b) use all reasonable efforts to preserve substantially
intact its business organization, maintain its material rights and
franchises, retain the services of its respective officers and
employees, and maintain its relationships with its material customers
and suppliers;
(c) maintain and keep its material properties and assets in as
good repair and condition as at present, ordinary wear and tear
excepted, and maintain supplies and inventories of products based on
its customary business practice;
(d) use all reasonable efforts to keep in full force
and effect insurance and bonds
comparable in amount and scope of coverage to that currently
maintained; and
(e) take all such steps as are commercially reasonable in
order to consummate the Merger and all other transactions contemplated
hereby, including, without limitation, securing all requisite consents
thereto.
Section 5.02 Negative Covenants of Each Party
Except as consented to in writing by the other party, from the date of
this Agreement until the Closing Date, neither Aradyme nor any Albion will:
(a) declare or pay any dividend on, or make any
other distribution in respect of,
outstanding shares of capital stock;
(b) (i) redeem, purchase, or otherwise acquire any shares of
its capital stock or any securities or obligations convertible into or
exchangeable for any shares of its capital stock (other than any such
acquisitions directly from such party in exchange for capital
contributions or loans), or any options, warrants, or conversion or
other rights to acquire any shares of its capital stock or any such
securities or obligations (except in connection with the exercise of
outstanding stock options in accordance with their terms); (ii) effect
any reorganization or recapitalization; (iii) split, combine or
reclassify its capital stock; or (iv) issue or authorize or propose the
issuance of any other securities in respect of, in lieu of, or in
substitution for shares of its capital stock;
(c) (i) issue, deliver, award, grant or sell, or authorize or
propose the issuance, delivery, award, grant or sale (including the
grant of any security interests, liens, claims, pledges, limitations in
voting rights, charges, or other encumbrances) of, any shares of any
class of its capital stock (including shares held in treasury), any
securities convertible into or exercisable or exchangeable for any such
shares, or any rights, warrants, or options to acquire any such shares;
(ii) amend or otherwise modify the terms of any such rights, warrants,
or options the effect of which shall be to make such terms more
favorable to the holders thereof; or (iii) take any action to
accelerate the exercisability of stock options;
(d) acquire or agree to acquire, by merging or consolidating
with, by purchasing any equity interest in or a portion of the assets
of, or by any other manner, any business or any corporation, limited
liability company, partnership, association, or other business
organization or division thereof, or otherwise acquire or agree to
acquire any assets of any other person (other than the purchase of
assets from suppliers or vendors in the ordinary course of business and
consistent with past practice);
(e) sell, lease, exchange, mortgage, pledge, transfer, or
otherwise dispose of, or agree to sell, lease, exchange, mortgage,
pledge, transfer, or otherwise dispose of, any of its material assets,
except for the sale of inventory or other dispositions in the ordinary
course;
(f) initiate, solicit or encourage (including by way of
furnishing information or assistance), or take any other action to
facilitate, any inquiries or the making of any proposal relating to, or
that may reasonably be expected to lead to, any Competing Transaction
(as defined below), or enter into discussions or negotiate with any
person or entity in furtherance of such inquiries or to obtain a
Competing Transaction, or agree to or endorse any Competing
Transaction, or authorize or permit any of its officers, directors or
employees, or any investment banker, financial advisor, attorney,
accountant or other representative retained by such Party, to take any
such action, and such Party shall promptly notify the other Party of
all relevant terms of any such inquiries and proposals received by it
or by any such officer, director, investment banker, financial advisor,
attorney, accountant, or other representative relating to any of such
matters, and if such inquiry or proposal is in writing, such Party
shall promptly deliver or cause to be delivered to the other Party a
copy of such inquiry or proposal. For purposes of this Agreement,
"Competing Transaction" shall mean any of the following (other than the
transactions contemplated by this Agreement) involving a Party hereto:
(i) any merger, consolidation, share exchange, business combination, or
similar transaction; (ii) any sale, lease, exchange, mortgage, pledge,
transfer, or other disposition of 20% or more of the assets of a Party
hereto, (iii) any tender offer or exchange offer for 20% or more of the
outstanding shares of capital stock of a Party hereto or the filing of
a registration statement under the Securities Act in connection
therewith; (iv) any person having acquired beneficial ownership of, or
any group (as such term is defined under Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder) having been
formed that beneficially owns, or has the right to acquire beneficial
ownership of, 20% or more of the outstanding shares of capital stock of
a Party hereto; or (v) any public announcement of a proposal, plan, or
intention to do any of the foregoing or any agreement to engage in any
of the foregoing;
(g) release any third party from its obligations, or grant any
consent under any existing standstill provision relating to a Competing
Transaction or otherwise under any confidentiality or other agreement,
or fail to fully enforce any such agreement;
(h) adopt or propose to adopt any amendments to its articles
or certificate of incorporation or bylaws, which would alter the terms
of its capital stock or would have an adverse impact on the
consummation of the transactions contemplated by this Agreement;
(i) (i) change any of its methods of accounting in effect at
the date of such Party's Most Recent Financial Statements, or (ii) make
or rescind any express or deemed election relating to taxes, settle or
compromise any claim, action, suit, litigation, audit, or controversy
relating to taxes (except where the amount of such settlements or
controversies, individually or in the aggregate, does not exceed
$10,000), or change any of its methods of reporting income or
deductions for federal income tax purposes from those employed in the
preparation of the federal income tax returns, if any, for the most
recent taxable year, except in each case, as may be required by law or
generally accepted accounting principles;
(j) incur any obligations for borrowed money or purchase money
indebtedness or guarantee, whether or not evidenced by a note, bond,
debenture, or similar instrument, except in the ordinary course of
business consistent with past practice;
(k) enter into any material arrangement, agreement, or
contract with any third party that provides for an exclusive
arrangement with that third party or is substantially more restrictive
on such Party or substantially less advantageous to such Party than
arrangements, agreements, or contracts existing on the date hereof;
(l) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation,
restructuring, recapitalization, or other material reorganization;
(m) pay, discharge, or satisfy any claims, liabilities, or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge, or satisfaction of any
such claims, liabilities, or obligations that are (i) not payable to
any affiliate of such Party, (ii) reflected on, or reserved against in,
or contemplated by, the financial statements (or the notes thereto) of
such Party, (iii) incurred in the ordinary course of business
consistent with past practice, and (iv) legally required to be paid,
discharged, or satisfied;
(n) knowingly take or agree to commit to take any action that
would make any representation or warranty of such Party contained
herein or in such Party's disclosure schedules inaccurate in any
respect at, or as of any time prior to, the Closing Date;
(o) engage in any transaction with, enter into any agreement,
arrangement, or understanding with, or pay any amount to, directly or
indirectly, any of such Party's affiliates, including any transactions,
agreements, arrangements, or understanding with any affiliate or other
person covered under Item 404 of Regulation S-K promulgated under the
Securities Act;
(p) agree to or approve any commitment, including any
authorization for expenditure or agreement to acquire property, other
than in the ordinary course of business, obligating such Party for an
amount in excess of $10,000;
(q) engage in any futures or options trading or be a
party to any price or currency swaps,
xxxxxx, futures or derivative instruments; or
(r) agree in writing or otherwise to do any of the
foregoing.
Section 5.03 Meetings of Stockholders
(a) As soon as practicable following the execution and
delivery of this Agreement, but in any event within 20 days following
such date, Aradyme shall, at a meeting of its stockholders duly called
by its board of directors, present for the authorization and approval
of its stockholders, in accordance with the applicable provisions of
Nevada Law and all applicable federal and state securities laws, this
Agreement and the transactions contemplated hereby.
(b) As soon as practicable following the execution and
delivery of this Agreement, but in any event within 20 days following
such date, Albion shall organize Albion Merger Corp. under Utah Law,
cause it to issue one share of common stock to Albion, and as the sole
stockholder of Albion Merger Corp., cause it to take all action as may
be required to authorize Albion Merger Corp. to join in and become a
party to a plan of merger setting forth the provisions of this
agreement required to be included therein under Nevada Law and Utah
Law, in such form as may be mutually acceptable to the Parties and
their respective counsel, and to consummate the transactions therein
contemplated, including the approval of the Merger by Albion as the
sole stockholder of Albion Merger corp. in the manner required by Utah
Law.
Section 5.04 Access and Information
(a) Albion shall (i) afford Aradyme and its officers,
directors, employees, accountants, consultants, legal counsel, agents,
and other representatives (collectively, the "Aradyme Representatives")
reasonable access at reasonable times, upon reasonable prior notice, to
the officers, directors, employees, agents, properties, offices, and
other facilities of Albion and to the books and records thereof; and
(ii) furnish promptly to Aradyme and Aradyme Representatives such
information concerning the business, properties, contracts, records,
and personnel of Albion (including, without limitation, financial,
operating, and other data and information) as may be reasonably
requested, from time to time, by Aradyme or the Aradyme
Representatives.
(b) Aradyme shall (i) afford to Albion and its officers,
directors, employees, accountants, consultants, legal counsel, agents,
and other representatives (collectively, the "Albion Representatives"),
reasonable access at reasonable times, upon reasonable prior notice, to
the officers, directors, employees, accountants, agents, properties,
offices, and other facilities of Aradyme (including any subsidiary) and
to the books and records thereof; and (ii) furnish promptly to Albion
and the Albion Representatives such information concerning the
business, properties, contracts, records, and personnel of Aradyme
(including any subsidiary) (including, without limitation, financial,
operating, and other data and information) as may be reasonably
requested, from time to time, by Albion or the Albion Representatives.
(c) Notwithstanding the foregoing provisions of this section,
no Party shall be required to grant access or furnish information to
the other Party to the extent that such access to, or the furnishing of
such information, is prohibited by law. No investigation by the Parties
hereto made heretofore or hereafter shall affect the representations
and warranties of the Parties that are herein contained, and each such
representation and warranty shall survive such investigation.
(d) The information received pursuant to this Section shall be
deemed to be "Confidential Information." Each Party hereto agrees that
it will treat in confidence all documents, materials, and other
Confidential Information that it shall have obtained regarding the
other Party during the course of the negotiations leading to the
consummation of the transactions contemplated hereby (whether obtained
before or after the date of this Agreement), the investigation provided
for herein, and the preparation of this Agreement and other related
documents. Such documents, materials, and other Confidential
Information shall not be communicated to any third person (other than
to a Party's respective counsel, accountants, financial advisors, or
lenders) and shall not be used for any purpose to the detriment of the
other Party. No Party shall use any Confidential Information in any
manner whatsoever except solely for the purpose of evaluating a
possible business relationship with the other Party. No Party, Aradyme
Representative, or Albion Representative will, during the term of this
Agreement or at any time during the two years thereafter, irrespective
of the time, manner, or cause of termination of this Agreement, use,
disclose, copy, or assist any other person or firm in the use,
disclosure, or copying of any documents, materials, or other
Confidential Information of the other Party hereto.
Section 5.05 State Securities Laws
(a) Albion shall prepare and file with the SEC a notice on
Form D and such other notices or applications as Albion may deem
appropriate under applicable state securities laws in connection with
the transactions contemplated by this Agreement. Aradyme and Albion
shall take any action required to be taken under any applicable federal
or state securities laws in connection with the issuance of shares of
New Albion Stock in the Merger. Aradyme shall furnish to Albion all
information concerning Aradyme and the holders of its capital stock as
Albion may reasonably request in connection with such actions. All
documents that Albion is responsible for filing with the SEC or any
state authority in connection with the transactions contemplated herein
shall comply as to form in all material respects with the applicable
requirements of the Securities Act and the rules and regulations
thereunder, the Exchange Act and the rules and regulations thereunder,
state securities laws, and applicable state laws.
(b) The information supplied by Albion for inclusion in the
notices or other filings in accordance with Section 5.04(a) shall not,
at the time filed, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading. If at
any time prior to the Effective Time any event or circumstance relating
to Albion or any of its affiliates, or its or their respective officers
or directors, is discovered by Albion that should be set forth in a
supplement or amendment to any notices or other filings in accordance
with Section 5.05(a), Albion shall promptly inform Aradyme thereof in
writing.
(c) The information supplied by Aradyme for inclusion in the
notices or other filings in accordance with Section 5.04(b) shall not,
at the time filed, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading. If at
any time prior to the Effective Time any event or circumstance relating
to Aradyme or any of its affiliates, or to its respective officers,
directors, partners, or managers, is discovered by Aradyme that should
be set forth in a supplement or amendment to the notices or other
filings in accordance with Section 5.05(a), Aradyme shall promptly
inform Albion thereof in writing.
Section 5.06 Appropriate Action; Consents; Filings
(a) Aradyme and Albion shall use and shall cause each of their
respective subsidiaries, if any, to use, all reasonable efforts to (i)
take, or cause to be taken, all appropriate action, and do, or cause to
be done, all things necessary, proper, or advisable under applicable
laws or otherwise to consummate and make effective the transactions
contemplated by this Agreement, (ii) obtain from any governmental
entities any consents, licenses, permits, waivers, approvals,
authorizations, or orders required to be obtained or made by Aradyme or
Albion or any subsidiary in connection with the authorization,
execution, and delivery of this Agreement and the consummation of the
transactions contemplated hereby, including, without limitation, the
Merger, (iii) make all necessary filings, and thereafter make any other
required submissions, with respect to this Agreement and the Merger
required under (1) the Securities Act and the Exchange Act and the
rules and regulations thereunder, and any other applicable federal or
state securities laws, and (2) any other applicable law; provided that,
Aradyme and Albion shall cooperate with each other in connection with
the making of all such filings, including providing copies of all such
documents to each other Party and its advisors prior to such filings
and, if requested, shall accept all reasonable additions, deletions, or
changes suggested in connection therewith. Aradyme and Albion shall
furnish all information required for any application or other filing to
be made pursuant to the rules and regulations of any applicable law in
connection with the transactions contemplated by this Agreement.
(b) Aradyme and Albion agree to cooperate with respect to, and
shall cause each of their respective subsidiaries, if any, to cooperate
with respect to, and agree to use all reasonable efforts vigorously to
contest and resist, any action, including legislative, administrative,
or judicial action, and to have vacated, lifted, reversed, or
overturned any decree, judgment, injunction, or other order (whether
temporary, preliminary, or permanent) (an "Order") of any governmental
entity that is in effect and that restricts, prevents, or prohibits the
consummation of the Merger or any other transactions contemplated by
this Agreement, including, without limitation, by vigorously pursuing
all available avenues of administrative and judicial appeal and all
available legislative action. Aradyme and Albion also agree to take any
and all actions, including, without limitation, the disposition of
assets or the withdrawal from doing business in particular
jurisdictions, required by regulatory authorities as a condition to the
granting of any approvals required in order to permit the consummation
of the Merger or as may be required to avoid, lift, vacate, or reverse
any legislative or judicial action that would otherwise cause any
condition to Closing not to be satisfied; provided, however, that in no
event shall Aradyme be required to take any action that would or could
reasonably be expected to have a material adverse effect on its
business and operations, and Albion shall not be required to take any
action that would or could reasonably be expected to have a material
adverse effect on its business and operations.
(c)
(i) Aradyme and Albion shall give any notices to
third parties, and use, and cause their respective
subsidiaries, if any, to use, all reasonable efforts to obtain
any third-party consents (1) necessary, proper, or advisable
to consummate the transactions contemplated by this Agreement,
(2) otherwise required under any contracts, licenses, leases,
or other agreements in connection with the consummation of the
transactions contemplated hereby, or (3) required to prevent a
material adverse effect from affecting either of their
respective business and operations from occurring prior to the
Effective Time or a material adverse effect on Albion's
business and operations from occurring after the Effective
Time.
(ii) Aradyme and Albion shall use, and cause their
respective subsidiaries, if any, to use, all reasonable
efforts to obtain release of any guarantees by any owner of
Aradyme of any third-party indebtedness or obligation that
will not be paid, discharged, or otherwise satisfied at the
Effective Time.
(iii) In the event that any Party shall fail to
obtain any third-party consent described in subsection (c)(i)
above, such Party shall use all reasonable efforts, and shall
take any such actions reasonably requested by any other Party,
to limit the adverse effect upon Aradyme and Albion, their
respective subsidiaries, and their respective businesses,
resulting, or that could reasonably be expected to result
after the Effective Time, from the failure to obtain such
consent.
(d) Aradyme and Albion shall promptly notify each other of (i)
any material change in its current or future business, assets,
liabilities, financial condition, or results of operations, (ii) any
complaints, investigations, or hearings (or communications indicating
that the same may be contemplated) of any governmental entities with
respect to its business or the transactions contemplated hereby, (iii)
the institution or the threat of material litigation involving it or
any of its subsidiaries, or (iv) any event or condition that might
reasonably be expected to cause any of its representations, warranties,
covenants, or agreements set forth herein not to be true and correct at
the Effective Time. As used in the preceding sentence, "material
litigation" means any case, arbitration or adversary proceeding, or
other matter that is material to the business and operations of the
subject entity, if in existence on the date hereof, or in respect of
which the legal fees and other costs to the subject entity might
reasonably be expected to exceed $10,000 over the life of the matter.
(e) In furtherance of the covenants set forth in this Section
5.06, the Parties acknowledge that Albion filed a registration
statement on Form 10-SB under the Exchange Act on October 16, 2002, as
amended on Form 10-SB/A on January 24, 2003. Such registration became
effective by operation of law on or about December 15, 2002. Albion has
not been advised whether its amendment satisfactorily addresses all
disclosure issues that have been or may be raised by the staff of the
SEC. The Parties will cooperate and proceed with diligence and dispatch
to respond to any such staff comments with such additional registration
statement amendments, additional reports, supplemental information, or
other measures as the Parties, on advice of counsel, may deem prudent
by the board of directors of Albion, as the same shall be constituted
from time to time.
Section 5.07 Acquisition of New Albion Stock and New Albion
Options
The consummation of this Agreement and the transactions contemplated
herein, including the issuance of the New Albion Stock and New Albion Options to
the stockholders of Aradyme as contemplated hereby, constitutes the offer and
sale of securities under the Securities Act and applicable state securities
laws. Such transactions shall be consummated in reliance on exemptions from the
registration and prospectus delivery requirements of such statutes that depend,
among other items, on the circumstances under which the stockholders of Aradyme
acquire such securities.
(a) In order to provide documentation for reliance upon
exemptions from the registration and prospectus delivery requirements
for such transactions, the approval of the Merger and this Agreement by
the respective stockholders of Aradyme and/or the delivery of
appropriate separate representations indicating their acceptance of,
and concurrence in, the following representations and warranties will
be required:
(i) Each acknowledges that neither the SEC nor the
securities commission of any state or other federal agency has
made any determination as to the merits of acquiring the New
Albion Stock, and that the transactions contemplated herein
involve certain risks.
(ii) Each has received and read this Agreement and
understands the risk related to the consummation of the
transactions herein contemplated.
(iii) Each has such knowledge and experience in
business and financial matters that such party is capable of
evaluating the Merger and Albion and its proposed business
operations.
(iv) Each has been provided with a copy of the
Agreement plus all materials and information requested by each
or his or her representative, including any information
requested to verify any information furnished (to the extent
such information is available or can be obtained without
unreasonable effort or expense), and each has been provided
the opportunity for direct communication with Albion and its
representatives regarding the transactions contemplated
hereby.
(v) All information that each has provided to Albion
or its agents or representatives concerning each of their
suitability to hold shares in Albion following the
transactions contemplated hereby is complete, accurate, and
correct.
(vi) Each has not offered or sold any interest in
this Agreement and has no present intention of dividing the
New Albion Stock to be received or the rights under this
Agreement with others or of reselling or otherwise disposing
of any portion of such stock or rights, either currently or
after the passage of a fixed or determinable period of time or
on the occurrence or nonoccurrence of any predetermined event
or circumstance.
(vii) Each was at no time solicited by any leaflet,
public promotional meeting, circular, newspaper or magazine
article, radio or television advertisement, or any other form
of general advertising or solicitation in connection with the
offer, sale, or purchase of the New Albion Stock through this
Agreement.
(viii) Each anticipates no need in the foreseeable
future to sell the New Albion Stock to be acquired pursuant
hereto. Each is able to bear the economic risks of this
investment, and consequently, without limiting the generality
of the foregoing, is able to hold the New Albion Stock to be
received for an indefinite period.
(ix) Each understands that the New Albion Stock has
not been registered, but is being acquired by reason of a
specific exemption under the Securities Act as well as under
certain state securities laws for transactions by an issuer
not involving any public offering, and that any disposition of
the New Albion Stock may, under certain circumstances, be
inconsistent with this exemption and may make the holder who
disposes of such stock an "underwriter" within the meaning of
the Securities Act. It is understood that the definition of
"underwriter" focuses upon the concept of "distribution," and
that any subsequent disposition of the subject New Albion
Stock can only be effected in transactions that are not
considered distributions.
(x) Each acknowledges that the shares of New Albion
Stock must be held and may not be sold, transferred, or
otherwise disposed of for value unless they are subsequently
registered under the Securities Act or an exemption from such
registration is available. Albion is under no obligation to
register the New Albion Stock under the Securities Act. If
Rule 144 is available (and no assurance is given that it will
be except as expressly set forth in this Agreement), after one
year and prior to two years following the Effective Date, only
routine sales of such New Albion Stock in limited amounts can
be made in reliance upon Rule 144 in accordance with the terms
and conditions of that rule. Albion is under no obligation to
the stockholders of Aradyme to make Rule 144 available, except
as may be expressly agreed to by it in writing in this
Agreement, and in the event Rule 144 is not available,
compliance with Regulation A or some other disclosure
exemption may be required before such persons can sell,
transfer, or otherwise dispose of such New Albion Stock
without registration under the Securities Act. Albion's
registrar and transfer agent will maintain a stop-transfer
order against the registration of transfer of the New Albion
Stock, and the certificate representing the New Albion Stock
will bear a legend in substantially the following form so
restricting the sale of such securities:
The securities represented by this certificate have
not been registered under the Securities Act of 1933,
as amended (the "Securities Act"), and are
"restricted securities" within the meaning of Rule
144 promulgated under the Securities Act. The
securities have been acquired for investment and may
not be sold or transferred without complying with
Rule 144 in the absence of an effective registration
or other compliance under the Securities Act.
(xi) Each acknowledges that Albion may refuse to
register transfer shares of the New Albion Stock in the
absence of compliance with Rule 144 unless the holder
furnishes the issuer with a "no-action" or interpretive letter
from the SEC or an opinion of counsel reasonably acceptable to
Albion stating that the transfer is proper. Further, unless
such letter or opinion states that the shares of New Albion
Stock are free of any restrictions under the Securities Act,
the issuer may refuse to transfer the New Albion Stock to any
transferee who does not furnish in writing to the issuer the
same representations and agree to the same conditions with
respect to such New Albion Stock as set forth herein. The
issuer may also refuse to transfer the New Albion Stock if any
circumstances are present reasonably indicating that the
transferee's representations are not accurate.
(b) In order to more fully document reliance on the exemptions
as provided herein, Aradyme shall cause each of its stockholders to
execute and deliver to Albion, at or prior to the Closing, such further
letters of representation, acknowledgment, suitability, or the like, as
Albion and its counsel may reasonably request in connection with
reliance on exemptions from registration under such securities laws.
(c) Each Party acknowledges that the basis for relying on
exemptions from registration or qualifications are factual, depending
on the conduct of the various parties, and that no legal opinion or
other assurance will be required or given to the effect that the
transactions contemplated hereby are in fact exempt from registration
or qualification.
Section 5.08 No Representation Regarding Tax Treatment
Except for the representations and warranties set forth in Sections
3.10 and 4.11, no representation or warranty is being made or legal opinion
given by any Party to any other regarding the treatment of this transaction for
federal or state income taxation. Although this transaction has been structured
in an effort to qualify for treatment under Section 368(a)(1)(A) and Section
368(a)(2)(D) of the Code, there is no assurance that any part of this
transaction in fact meets the requirements for such qualification. Each Party
has relied exclusively on its own legal, accounting, and other tax advisors
regarding the treatment of this transaction for federal and state income taxes
and on no representation, warranty, or assurance from any other Party or such
other Party's legal, accounting, or other advisor.
Section 5.09 Public Announcements
Neither Party shall issue any press release or otherwise make any
public statements with respect to the Merger without the approval of the other
Party. The public announcement of the execution and delivery of this Agreement
shall be a joint press release of Aradyme and Albion and shall be accompanied by
Albion's filing on the same day of a current report on Form 8-K containing such
release or the substance thereof.
Section 5.10 Reorganization of the Board of Directors;
Appointment of Officers
The board of directors of Albion shall be reorganized to consist of
Xxxxx Xxxxxxx, Xxxx Xxxxxx, Xxxxxx Xxxxxxxxx, and Xxx Xxxxx, to become effective
on the Effective Time subject to compliance with Section 14(f) of the Exchange
Act. In order to effectuate such reorganization, at the request of Aradyme
Albion shall either (a) cause its current directors to tender their resignations
as directors, effective upon acceptance by the board of directors, so the other
directors can accept each such resignation and appoint one of the above
designees to fill the resulting vacancy in a series, so that the entire board of
directors can be changed without the necessity of holding a stockholder meeting,
or (b) elect new directors by majority written consent of the stockholders,
subject to compliance with Section 14(c) of the Exchange Act and Schedule 14C
promulgated thereunder. Albion shall be responsible for preparing and filing
such reports and notices of the foregoing as may be required under Section 14(f)
of the Exchange Act. If the above newly-appointed directors do not take office
at the Effective Time, after the Effective Time and until the time the
newly-appointed directors take office as directors in accordance with the
provisions of Section 14(f) of the Exchange Act, Albion shall continue to comply
with the covenants set forth in Sections 5.01 and 5.02, unless such failure of
compliance is waived in writing by the board of directors of the Surviving
Corporation. The reorganized board of directors shall appoint Xxxxx Xxxxxxx as
chief executive officer and Xxxxxx Xxxxxxxxx as chief financial officer and
secretary.
Section 5.11 Restriction on Resale of Albion Stock by
Incumbent Albion Officers and Directors
Albion shall obtain the written undertakings and assurances, in form
reasonably satisfactory to Aradyme, of each person who has served since December
31, 2001, or who will serve at any time prior to the Effective Time, as an
officer or director of Albion that they will not sell publicly any Albion Stock
owned, of record or beneficially, by them for a period of 20 days following the
Effective Time. The delivery of such written undertakings and assurances at or
prior to the Closing shall be a condition precedent to the obligation of Aradyme
to Close the transactions contemplated by this Agreement.
Section 5.12 Corporate Organization, Status and Authorized
Shares
Immediately following the Closing, the Parties shall take such actions
as may be necessary to change the name of Albion to "Aradyme Corporation," or
such similar name as may be determined by the board of directors, to change the
corporate domicile from Delaware to Utah, and to recommend to the stockholders
that the number of authorized common shares be increased to 24,000,000 or such
other number as the board of directors may deem appropriate. Pending
effectiveness of a change of domicile, the Parties shall take such actions as
may be necessary to permit Albion to do business under the name of "Aradyme" or
such similar name as may be approved by the board of directors.
Section 5.13 Possible Additional Company Reports or Amendments
or Comments Thereon
Albion shall obtain the written undertakings and assurances, in form
reasonably satisfactory to Aradyme, of each person who has served as an officer
and directors of Albion since December 31, 2001, to participate, assist, and
cooperate, without compensation, in responding to inquiries, comments,
requirements, or questions from any governmental authority or self-regulatory
authority respecting previous filings, or to file additional periodic reports
under Sections 13, 14, or 15(d) of the Exchange Act, including any reports for
any period prior to the Effective Time. The delivery of such written
undertakings and assurances at or prior to the Closing shall be a condition
precedent to the obligation of Aradyme to Close the transactions contemplated by
this Agreement.
ARTICLE VI
CLOSING CONDITIONS
Section 6.01 Conditions Precedent to Aradyme's Obligation to
Close
(a) Each director and officer and each of the stockholders
holding beneficially or of record more than 5% of the issued and
outstanding common stock of Albion shall have delivered to Aradyme an
instrument, in form and substance satisfactory to Aradyme, dated the
Closing Date, releasing Albion and Aradyme from any and all claims of
such director, officer, or stockholder against Albion, and any and all
obligations of Albion to such director, officer, or stockholder.
(b) Aradyme shall have received satisfactory evidence that all
existing agreements between Albion and any stockholder, any relative of
any director, officer, broker, underwriter, employee, agent, or any
stockholder, and any affiliates of the stockholder shall have been
canceled effective prior to the Closing.
(c) Albion shall have maintained its listing on the
Nasdaq OTC Electronic Bulletin Board.
(d) There shall not be any action taken, or any statute, rule,
regulation, or order enacted, entered, enforced, or deemed applicable
to the transaction contemplated hereby, by any governmental entity in
connection with the grant of a regulatory approval necessary, in the
reasonable business judgment of Albion, to the continuing operation of
the current or future business of the combined enterprises, which
imposes any condition or restriction upon Albion or its proposed future
business or operations that, in the reasonable business judgment of
Aradyme, would be materially burdensome in the context of the
transactions contemplated by this Agreement.
(e) Albion shall not have received notice of or otherwise have
knowledge of any pending inquiry, matter under investigation, formal
order of investigation, or other possible enforcement action from the
SEC or any provincial or state securities or other regulatory authority
involving or possibly involving, whether or not actually threatened,
any violation of any law administered by such agency or authority by
either Albion or any of its present or former affiliates or persons
acting in concert with any of them.
(f) Aradyme shall have received the undertakings and
assurances required to be furnished pursuant to the provisions of
Sections 5.11 and 5.13.
(g) The provisions of any applicable law under the
jurisdiction under which Albion is incorporated relating to the
acquisition of a controlling interest in a corporation incorporated in
that state are inapplicable to Albion or the transaction contemplated
by this Agreement.
Section 6.02 Third-Party Conditions to Obligations of the
Parties under this Agreement
The respective obligations of the Parties to effect the Merger and the
other transactions contemplated hereby shall be subject to the satisfaction at
or prior to the Closing Date of the following conditions, any or all of which
may be waived in writing by the Parties hereto, in whole or in part, to the
extent permitted by applicable law:
(a) The Notice on Form D shall have been filed with the SEC
and such agencies under applicable state laws that require notice
filing.
(b) As required under Nevada Law, this Agreement and the
Merger shall have been approved and adopted by the requisite vote of
the stockholders of Aradyme.
(c) No governmental entity or federal or state court of
competent jurisdiction shall have enacted, issued, promulgated,
enforced, or entered any statute, rule, regulation, executive order,
decree, injunction, or other order (whether temporary, preliminary, or
permanent) that is in effect and that has the effect of making the
Merger illegal or otherwise prohibiting consummation of the Merger.
Section 6.03 Additional Conditions to Obligations of the
Parties
The obligations of each Party to effect the Merger and the other
transactions contemplated hereby are also subject to the satisfaction at or
prior to the Closing Date of the following conditions, any or all of which may
be waived in writing by the other Party, in whole or in part, to the extent
permitted by applicable law:
(a) Each of the representations and warranties of the other
Party contained in this Agreement shall be true and correct as of the
Closing Date as though made on and as of the Closing Date (except to
the extent such representations and warranties specifically relate to
an earlier date, in which case such representations and warranties
shall be true and correct as of such earlier date). Each Party shall
have received a certificate of the president and the chief financial
officer, or substantially equivalent authority of the other Party,
dated the Closing Date, to such effect.
(b) Each Party shall have performed or complied with all
agreements and covenants required by this Agreement to be performed or
complied with by it on or prior to the Closing Date. Each Party shall
have received a certificate of the president and the chief financial
officer, or substantially equivalent authority of the other Party,
dated the Closing Date, to such effect.
(c) Since the date of this Agreement, there shall have been no
change, occurrence, or circumstance in the current or future business,
assets, liabilities, financial condition, or results of operations of
the other Party having or reasonably likely to have, individually or in
the aggregate, an Albion Material Adverse Effect or Aradyme Adverse
Effect, as the case may be. Each Party shall have received a
certificate of the president and the chief financial officer, or
substantially equivalent authority of the other Party, dated the
Closing Date, to such effect.
(d) There shall not have been any action taken, or any
statute, rule, regulation, or order enacted, entered, enforced, or
deemed applicable to the Merger, by any governmental entity in
connection with the grant of a regulatory approval necessary, in the
reasonable business judgment of either Party, to the continuing
operation of the current or future business of Albion or which imposes
any condition or restriction upon the other Party, its business, or
operations that, in the reasonable business judgment of such Party,
would be materially burdensome in the context of the transactions
contemplated by this Agreement.
(e) The number of shares of Aradyme Stock, for which valid
notices of intention to demand payment pursuant to the applicable
provisions of Nevada Law have been provided and remain outstanding
immediately prior to the effectiveness of the Merger, does not exceed
that number of shares that, if converted in accordance with the terms
of this Agreement, would constitute more than 5% of the total number of
shares of New Albion Stock issuable at the Effective Time.
ARTICLE VII
REGISTRATION OF TRANSACTIONS IN NEW ALBION STOCK
Section 7.01 Registrable Shares
For purposes of this Agreement, "Registrable Shares" shall mean the
shares of Albion Common Stock issued in connection with the Merger and any
shares of Albion Common Stock issued upon the conversion of New Albion Preferred
Stock or exercise of New Albion Options that are converted or exercised prior to
the filing of the Registration Statement (as defined below) until such time as:
(a) such shares have been effectively registered
under the Securities Act and sold in
accordance with the registration statement covering the transaction;
(b) counsel to the Company renders an opinion to the Holders
of such shares to the effect that such securities can be sold without
restriction in the absence of registration under the Securities Act
(subject to such counsel and opinion being reasonably satisfactory to
Holder and its counsel); or
(c) counsel to the Holders of such shares renders an opinion
to the Company to the effect that such securities can be sold without
restriction in the absence of registration under the Securities Act
(subject to such counsel and opinion being reasonably satisfactory to
the Company and its counsel).
Section 7.02. Demand Registration
(a) One or more owners of Registrable Shares (a "Holder" or
"Holders") of not less than 20% of the Registrable Shares ("Initiating
Holders") then outstanding may request at any time after the Effective
Time registration by Albion under the Securities Act of resale of all
or a part of such Holder's Registrable Shares (a "Demand
Registration").
(b) Notwithstanding subsection (a) above or anything else
herein to the contrary, Albion shall not be obligated to effect more
than one registration pursuant to this Article VII; provided, however,
that any registration requested pursuant to this Article VII will not
be deemed to have been effected (i) unless it has become effective and
remained effective for the lesser of (1) the period necessary to
complete the sale or disposition of the Registrable Shares covered by
such Registration Statement, or (2) 180 days after the effective date
of such Registration Statement, except with respect to any Registration
Statement filed pursuant to Rule 415 under the Securities Act, in which
case Albion shall use its best efforts to keep such Registration
Statement effective until such time as all of the Registrable Shares
cease to be Registrable Shares; (ii) if, after it has become effective,
such registration is interfered with by any stop order, injunction, or
other order or requirement of the SEC or other governmental agency or
court for any reason not attributable to the selling Holders and has
not thereafter become effective, or (iii) if the conditions to closing
specified in the underwriting agreement, if any, entered into in
connection with such registration are not satisfied or waived, other
than solely by reason of a failure on the part of the selling Holders;
provided, further, that any such registration that does not become
effective after Albion has filed a Registration Statement in accordance
with the provisions of this Section 7.02 solely by reason of the
refusal to proceed of the Holder or Holders who have requested the
Demand Registration pursuant to subsection (a) above, including failure
to comply with the provisions of this Agreement (other than any refusal
to proceed based upon the advice of counsel to such Holder or Holders
that the Registration Statement, or the prospectus contained therein,
contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances
then existing, or that such Registration Statement or such prospectus,
or the distribution contemplated thereby, otherwise violates or would,
if such distribution using such prospectus took place, violate any
applicable state or federal securities law) shall be deemed to have
been effected by Albion at the request of such Holder or Holders.
(c) Notwithstanding subsection (a) above or anything else
herein to the contrary, it is hereby agreed that a Demand Registration
must cover no less than 50% of the Registrable Shares then outstanding.
In the event a Holder requests that Albion effect a Demand Registration
pursuant to this Section 7.02, Albion will (i) promptly give notice of
the proposed registration to all other Holders, and (ii) use its
reasonable best efforts to effect the registration of the Registrable
Shares specified in the request, together with the Registrable Shares
of any other Holder joining in such request as are specified in a
written request received by Albion within 20 days after receipt of the
notice referred to in clause (i) above.
(d) If the managing underwriter in any registration effected
under this Section 7.02 advises Albion that, in its reasonable opinion,
the number of securities requested to be included in such registration
exceeds the number that can be sold in such offering within a price
range acceptable to the Holders of 66-2/3% of the Registrable Shares
requested to be included in such registration, Albion, except as
provided in the following sentence, will include in such registration,
to the extent of the number and type that Albion is so advised can be
sold in such offering, Registrable Shares requested to be included in
such registration, pro rata among the Holders requesting such
registration on the basis of the estimated gross proceeds from the sale
thereof. If the total number of Registrable Shares requested to be
included in such registration cannot be included as provided in the
preceding sentence, holders of Registrable Shares requesting
registration thereof pursuant to this Section 7.02, representing not
less than 33-1/3% of the Registrable Shares with respect to which
registration has been requested and constituting not less than 66-2/3%
of the Initiating Holders, shall have the right to withdraw the request
for registration by giving written notice to Albion within 20 days
after receipt of such notice by Albion and, in the event of such
withdrawal, such request shall not be counted for purposes of the
requests for registration to which holders of Registrable Shares are
entitled pursuant to this Section 7.02.
Section 7.03 Participatory Registration
If Albion proposes to register any of its securities under the
Securities Act other than (a) under employee compensation or benefit programs on
Form S-8, (b) an exchange offer or an offering of securities solely to the
existing stockholders or employees of Albion, or (c) securities to be issued in
a transaction described in Rule 145(a) promulgated under the Securities Act,
whether or not for sale for its own account, and the registration form to be
used may be used for the registration of Registrable Shares, Albion will give
prompt written notice to Holders of Registrable Shares of its intention to
effect such a registration and will include in such registration all Registrable
Shares with respect to which Albion has received written requests for inclusion
therein within 15 days after the receipt of Albion's notice (a "Participatory
Registration"). Albion shall use its reasonable best efforts to cause the
managing underwriters of a proposed underwritten offering to permit the
Registrable Shares requested to be included in the Registration Statement (or
Registration Statements) for such offering to be included therein on the same
terms and conditions as any similar securities of Albion included therein.
Notwithstanding the foregoing, if Albion gives notice of such a proposed
registration, the total number of Registrable Shares that shall be included in
such registration shall be reduced pro rata (on the basis of the estimated
proceeds from the sale thereof) to such number, if any, as in the reasonable
opinion of the managing underwriters of such offering would not adversely affect
the marketability or offering price of all of the securities proposed to be
offered by Albion in such offering; provided however, that (i) if such
Participatory Registration is incident to a primary registration on behalf of
Albion, the securities to be included in the Registration Statement (or
Registration Statements) for any person other than the Holders and Albion shall
be first reduced prior to any such pro rata reduction, and (ii) if such
Participatory Registration is incident to a secondary registration on behalf of
Holders of securities of Albion, the securities to be included in the
Registration Statement (or Registration Statements) for any person not
exercising Demand Registration rights other than the Holders shall be first
reduced prior to any such pro rata reduction; provided, further, that if the
Holders have made a request under this Section 7.03 and all of the Registrable
Shares of the Holders cannot be included in the Registration Statement(s) under
the terms of such section, the total number of Registrable Shares of the Holders
that shall be included in such registration shall be reduced pro rata to such
number, if any, as in the reasonable opinion of the managing underwriters of
such offering would not adversely affect the marketability or offering price of
all of the securities proposed to be offered by Albion in such offering. Subject
to any applicable underwriting agreement, any Holder of Registrable Shares may
withdraw at any time any Registrable Shares registered under this Section 7.03.
No registration effected under this Section 7.03 shall relieve Albion of its
obligation to effect any registration upon request under Section 7.02.
Section 7.04 Required Registration
Whenever Albion has an obligation under this Article VII to register
shares of Albion Common Stock, Albion shall prepare and file with the SEC as
soon as practicable and use its commercially reasonable best efforts to effect
all such registrations, qualifications, and compliances (including obtaining
appropriate qualifications under applicable state securities laws and compliance
with any other applicable governmental requirements or regulations) as any
selling Holder may reasonably request and that would permit or facilitate the
sale of Registrable Shares, provided, however, that Albion shall not be required
in connection therewith to qualify to do business or to file a general consent
to service of process in any such state or jurisdiction.
Section 7.05 Effectiveness; Suspension Right
Albion will use its use its commercially reasonable best efforts to
cause each Registration Statement to become effective under the Securities Act
(including the filing of any amendments or other documents necessary for such
effectiveness) and to maintain the effectiveness of Registration Statement and
other applicable registrations, qualifications, and compliances and from time
to time will amend or supplement each Registration Statement and the prospectus
contained therein as and to the extent necessary to comply with the Securities
Act, the Exchange Act, and any applicable state securities statute or
regulation, subject to the following limitations and qualifications:
(a) Following such date as each Registration Statement is
first declared effective, the Holders will be permitted to offer and
sell the Registrable Shares registered therein during the registration
effective period in the manner described in the Registration Statement,
provided that the Registration Statement remain effective and have not
been suspended.
(b) Notwithstanding any other provision of this Article VII,
Albion shall have the right at any time to require that all Holders
suspend further open market offers and sales of Registrable Shares
pursuant to the Registration Statement whenever, and for so long as, in
the reasonable judgment of Albion, upon written advice of counsel,
there is in existence material undisclosed information or events with
respect to Albion (the "Suspension Right"). In the event Albion
exercises the Suspension Right, such suspension will continue for the
period of time reasonably necessary for disclosure to occur at the
earliest time that such disclosure would not have a material adverse
effect on Albion, as determined in good faith by Albion after
consultation with counsel, provided that the holders of Registrable
Shares will be afforded the right to effect open market offers and
sales of Registrable Shares for a minimum of 15 trading days during
each calendar quarter; provided, further, that any such suspension
shall apply only for so long as "affiliates" (as defined in Rule 501
under the Securities Act) of Albion are restricted from selling shares
of Albion Common Stock; provided further that the one-year registration
period will be extended by a period of time equal to the aggregate of
all such periods of suspension by Albion under this Section 7.05.
Albion will promptly give the Holders written notice of any such
suspension and will use its best efforts to minimize the length of the
suspension.
Section 7.06 Expenses
The costs and expenses to be borne by Albion for purposes of this
Article VII shall include printing expenses (including a reasonable number of
prospectuses for circulation by the selling Holders), legal fees and
disbursements of counsel for Albion, legal and other expenses associated with
compliance with state securities laws, accounting fees and filing fees, but
shall not include underwriting commissions or similar charges, legal fees (if
any) and disbursements of counsel for the selling Holders.
Section 7.07 Indemnification
(a) To the extent permitted by law, Albion will indemnify and
hold harmless each Holder, any underwriter (as defined in the
Securities Act) for such Holder, its officers, directors, stockholders
or partners, and each person, if any, who controls such Holder or
underwriter within the meaning of the Securities Act or the Exchange
Act, against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Securities Act, the
Exchange Act, or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any of the following statements, omissions, or
violations (collectively a "Violation"): (i) any untrue statement or
alleged untrue statement of a material fact contained or incorporated
by reference in the Registration Statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, (ii) the omission or alleged omission to state or
incorporate by reference therein a material fact required to be stated
or incorporated by reference therein, or necessary to make the
statements included or incorporated by reference therein not
misleading, or (iii) any violation or alleged violation by Albion of
the Securities Act, the Exchange Act, any state securities law or any
rule or regulation promulgated under the Securities Act, the Exchange
Act or any state securities law; and Albion will pay to each such
Holder (and its officers, directors, stockholders or partners),
underwriter, or controlling person any legal or other expenses
reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided,
however, that the indemnity agreement contained in this Section 7.07(a)
shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability, or action if such settlement is effected without the
consent of Albion (which consent may not be unreasonably withheld); nor
shall Albion be liable in any such case for any such loss, claim,
damage, liability, or action to the extent that it arises out of or is
based upon a Violation that occurs in reliance upon and in conformity
with written information furnished by any such Holder expressly for use
in the Registration Statement, or a Violation that would not have
occurred if such Holder had delivered to the purchaser the version of
the prospectus most recently provided by Albion to the Holder as of a
date prior to such sale.
(b) To the extent permitted by law, each selling Holder,
severally and not jointly, will indemnify and hold harmless Albion,
each of its directors, each of its officers who has signed the
Registration Statement, each person, if any, who controls Albion within
the meaning of the Securities Act, any underwriter, any other Holder
selling securities pursuant to the Registration Statement, and any
controlling person of any such underwriter or other Holder, against any
losses, claims, damages, or liabilities (joint or several) to which any
of the foregoing persons may become subject under the Securities Act,
the Exchange Act, or other federal or state law, insofar as, and only
to the extent that, such losses, claims, damages, or liabilities (or
actions in respect thereto) arise out of or are based upon any
Violation (which includes without limitation the failure of the Holder
to comply with the prospectus delivery requirements under the
Securities Act and the failure of the Holder to deliver the most
current prospectus provided by Albion prior to the date of such sale),
in each case to the extent (and only to the extent) that such Violation
occurs in reliance upon and in conformity with written information
furnished by such Holder expressly for use in the Registration
Statement or such Violation is caused by the Holder's failure to
deliver to the purchaser of the Holder's Registrable Shares a
prospectus (or amendment or supplement thereto) that had been made
available to the Holder by Albion prior to the date of the sale; and
each such Holder will pay any legal or other expenses reasonably
incurred by any person intended to be indemnified pursuant to this
Section 7.07(b) in connection with investigating or defending any such
loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this Section 7.07(b) shall not apply
to amounts paid in settlement of any such loss, claim, damage,
liability, or action if such settlement is effected without the consent
of the Holder, which consent shall not be unreasonably withheld. The
aggregate indemnification and contribution liability of each Holder
under this Section 7.07(b) shall not exceed the net proceeds received
by such Holder in connection with sale of shares pursuant to the
Registration Statement.
(c) Each person entitled to indemnification under this Section
7.07 (the "Indemnified Party") shall give notice to the Party required
to provide indemnification (the "Indemnifying Party") promptly after
such Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought and shall permit the Indemnifying Party to
assume the defense of any such claim and any litigation resulting
therefrom, provided that counsel for the Indemnifying Party who
conducts the defense of such claim or any litigation resulting
therefrom shall be approved by the Indemnified Party (whose approval
shall not unreasonably be withheld), and the Indemnified Party may
participate in such defense at such Party's expense, and provided
further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 7.07 unless the Indemnifying Party is
materially prejudiced thereby. No Indemnifying Party, in the defense of
any such claim or litigation, shall (except with the consent of each
Indemnified Party) consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such information regarding itself or
the claim in question as an Indemnifying Party may reasonably request
in writing and as shall be reasonably required in connection with the
defense of such claim and litigation resulting therefrom.
(d) To the extent that the indemnification provided for in
this Section 7.07 is held by a court of competent jurisdiction to be
unavailable to an Indemnified Party with respect to any loss,
liability, claim, damage, or expense referred to herein, then the
Indemnifying Party, in lieu of indemnifying such Indemnified Party
hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage,
or expense in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party on the one hand and of the Indemnified
Party on the other in connection with the statements or omissions that
resulted in such loss, liability, claim, damage or expense, as well as
any other relevant equitable considerations. The relative fault of the
Indemnifying Party and of the Indemnified Party shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the Parties'
relative intent, knowledge, access to information, and opportunity to
correct or prevent such statement or omission.
Section 7.08 Procedures for Sale of Shares under Registration
Statement
(a) If any Holder shall propose to sell (which may include an
intent to sell over a specific period) Registrable Shares pursuant to
the Registration Statement, it shall notify Albion of its intent to do
so (including the proposed manner and timing of all sales) at least one
full trading day prior to such sale, and the provision of such notice
to Albion shall conclusively be deemed to reestablish and reconfirm an
agreement by such Holder to comply with the registration provisions set
forth in this Agreement. Unless otherwise specified in such notice,
such notice shall be deemed to constitute a representation that any
information previously supplied by such Holder expressly for inclusion
in the Registration Statement (as the same may have been superseded by
subsequent such information) is accurate as of the date of such notice.
At any time within such one trading-day period, Albion may refuse to
permit the Holder to resell any Registrable Shares pursuant to the
Registration Statement; provided, however, that in order to exercise
this right, Albion must deliver a certificate in writing to the Holder
to the effect that a delay in such sale is necessary because a sale
pursuant to the Registration Statement in its then-current form without
the addition of material, nonpublic information about Albion, could
constitute a Violation of the federal securities laws. Notwithstanding
the foregoing, Albion will ensure that in any event the Holders shall
have at least 15 trading days (prorated for partial quarters) available
to sell Registrable Shares during each calendar quarter (or portion
thereof) until the expiration of the Registration Statement effective
period.
(b) For any offer or sale of any of the Registrable Shares by
a Holder in a transaction that is not exempt under the Securities Act,
the Holder, in addition to complying with any other federal securities
laws, shall deliver a copy of the final prospectus (including any
amendment of or supplement to such prospectus) of Albion covering the
Registrable Shares in the form furnished to the Holder by Albion to the
purchaser of any of the Registrable Shares on or before the settlement
date for the purchase of such Registrable Shares.
(c) Subject to the provisions of this Section 7.08, when a
Holder is entitled to sell and gives notice of its intent to sell
Registrable Shares pursuant to the Registration Statement, Albion
shall, within two trading days following the request, furnish to such
Holder a reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter delivered
to the purchasers of such Registrable Shares, such prospectus shall not
as of the date of delivery to the Holder include an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statement therein not misleading or
incomplete in the light of the circumstances then existing.
Section 7.09 Transferability of Registration Rights
The rights under this Article VII are not transferable except (a) a
transfer by will or intestacy, (b) estate planning transfers consisting of gifts
to the spouse or issue of the transferee and transfers to trusts for the benefit
of the spouse or issue of the transferee, (c) a transfer to the constituent
partners of a Holder that is a partnership as part of a pro rata distribution of
the shares of Albion Common Stock held by such partnership so long as all such
transferees appoint a single representative as their attorney-in-fact for the
purpose of receiving any notices and exercising their rights under this Article
VII, or (d) with the written consent of Albion.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.01 Termination
This Agreement may be terminated at any time prior to the Effective
Time, whether before or after approval of this Agreement and the Merger by the
stockholders of Aradyme in such case when approval is required:
(a) by mutual consent of Aradyme and Albion;
(b) by either Party, upon a material breach of any
representation, warranty, covenant, or agreement on the part of the
other Party set forth in this Agreement such that the conditions set
forth in Section 6.03(a) or Section 6.03(b) of this Agreement, as the
case may be, would be incapable of being satisfied by February 28, 2003
(or as otherwise extended as described in section (d) of this Section
8.01); provided that, in any case, a willful breach shall be deemed to
cause such condition as to be incapable of being satisfied for purposes
of this Section 8.01(b);
(c) by either Party, if there shall be any Order, which is
final and nonappealable, preventing the consummation of the Merger,
except if the Party relying on such Order to terminate this Agreement
has not complied with its obligations under Section 5.06(b) of this
Agreement;
(d) by either Party, if the Merger shall not have been
consummated before February 28, 2003; provided, however, that this
Agreement may be extended by written notice of the other Party to a
date not later than March 31, 2003, if the Merger shall not have been
consummated as a direct result of either Party having failed by March
31, 2003, to receive all required regulatory approvals or consents with
respect to the Merger; or
(e) by Albion or Aradyme if this Agreement shall fail to
receive the requisite vote for approval and adoption by the
stockholders of Aradyme that would be entitled to receive an aggregate
of 5% of the aggregate Closing shares.
The right of the Parties hereto to terminate this Agreement pursuant to this
Section 8.01 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of either Party hereto, any person
controlling such Party, or any of its officers, directors, managers, partners,
representatives, or agents, whether prior to or after the execution of this
Agreement.
Section 8.02 Effect of Termination
Except as provided in Section 8.05 or Section 9.01 of this Agreement,
in the event of the termination of this Agreement pursuant to Section 8.01, this
Agreement shall forthwith become void, there shall be no liability on the part
of one Party to the other Party to consummate the transaction contemplated by
this Agreement, and all rights and obligations of either Party hereto shall
cease, except that nothing herein shall relieve the other Party of any liability
for any breach of such Party's covenants or agreements contained in this
Agreement or any willful breach of such Party's representations or warranties
contained in this Agreement.
Section 8.03 Amendment
This Agreement may be amended by the Parties hereto by action taken by
or on behalf of their respective boards of directors, general partner(s),
manager(s), or other governing body at any time prior to the Effective Time;
provided, however, that, after approval of the Merger by the stockholders of a
Party, no amendment, which under applicable law may not be made without the
approval of the stockholders of such Party, may be made without such approval.
This Agreement may not be amended except by an instrument in writing signed by
both Parties hereto.
Section 8.04 Waiver
At any time prior to the Effective Time, either Party hereto may extend
the time for the performance of any of the obligations or other acts of the
other Party, waive any inaccuracies in the representations and warranties of the
other Party contained herein or in any document delivered pursuant hereto, and
waive compliance by the other Party with any of the agreements or conditions
contained herein. Any such extension or waiver shall be valid only if set forth
in an instrument in writing signed by Parties.
Section 8.05 Fees, Expenses and Other Payments
(a) Except as provided in Section 8.05(c) of this Agreement,
in the event the Merger is not consummated, all "expenses" (as defined
in subsection (b) of this Section 8.05) incurred by the Parties hereto
shall be borne solely and entirely by the Party that has incurred such
expenses.
(b) "Expenses" as used in this Agreement shall include all
out-of-pocket expenses (including, without limitation, all fees and
expenses of counsel, accountants, investment bankers, experts and
consultants to a Party hereto and its affiliates) incurred by a Party
or on its behalf in connection with or related to the authorization,
preparation, negotiation, execution, and performance of this Agreement,
the preparation, printing, filing, and mailing of communications to
stockholders, the solicitation of approvals of stockholders, and all
other matters related to the consummation of the transactions
contemplated hereby.
(c) Albion agrees that, if this Agreement is terminated
pursuant to Section 8.01(b) and (i) such termination is the result of a
willful breach of any representation, warranty, covenant, or agreement
of Albion contained herein, (ii) Albion shall have had contacts or
entered into negotiations relating to a Competing Transaction (as
defined in Section 8.05(f)) prior to or on the date of termination of
this Agreement, and (iii) within 12 months after the date of
termination of this Agreement, and with respect to any person or group
with whom the contacts or negotiations referred to in clause (ii) have
occurred, a Business Combination (as defined in Section 8.05(f)) shall
have occurred or Albion shall have entered into a definitive agreement
providing for a Business Combination, then Albion shall pay $30,000 to
Aradyme, which amount is inclusive of all of Aradyme's expenses.
(d) Aradyme agrees that if this Agreement is terminated
pursuant to Section 8.01(b) and (i) such termination is the result of a
willful breach of any representation, warranty, covenant, or agreement
of Aradyme contained herein, (ii) Aradyme shall have had contacts or
entered into negotiations relating to a Competing Transaction (as
defined in Section 8.05(f)) prior to or on the date of termination of
this Agreement, and (iii) within 12 months after the date of
termination of this Agreement, and with respect to any person or group
with whom the contacts or negotiations referred to in clause (ii) have
occurred, a Business Combination (as defined in Section 8.05(f)) shall
have occurred or Aradyme shall have entered into a definitive agreement
providing for a Business Combination, then Aradyme shall pay to Albion
$30,000, which amount is inclusive of all of Albion's expenses.
(e) Any payment required to be made pursuant to Section
8.05(c) or Section 8.05(d) of this Agreement shall be made as promptly
as practicable, but not later than three business days after
termination of this Agreement, and shall be made by wire transfer of
immediately available funds to an account designated by Albion or
Aradyme, as the case may be, except that any payment to be made as the
result of an event described in Section 8.05(c)(iii) or Section
8.05(d)(iii) shall be made as promptly as practicable, but not later
than three business days after the occurrence of the Business
Combination or the execution of the definitive agreement providing for
a Business Combination.
(f) For purposes of this Section 8.05:
(i) The term "Business Combination" means a merger
(other than pursuant to this Agreement), share exchange,
business combination, or similar transaction involving Albion
or Aradyme, a sale, lease, exchange, transfer, or other
disposition of 20% or more of the assets of Albion or Aradyme,
taken as a whole, in a single transaction or a series of
transactions, or the acquisition, by a person (other than
Aradyme or any affiliate thereof) or group (as such term is
defined under Section 13(d) of the Exchange Act and the rules
and regulations thereunder) of beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act) of 20% or more
of the Albion or Aradyme Stock, as the case may be, whether by
tender or exchange offer or otherwise.
(ii) The term "Competing Transaction" shall mean any
of the following (other than the transactions contemplated by
this Agreement) involving a Party hereto: (1) any
consolidation, merger, share exchange, business combination,
or similar transaction; (2) any sale, lease, exchange,
mortgage, pledge, transfer, or other disposition of 20% or
more of the assets of a Party hereto and its subsidiaries, if
any, taken as a whole, (3) any tender offer or exchange offer
for 20% or more of the outstanding shares of capital stock of
a Party hereto or the filing of a registration statement under
the Securities Act in connection therewith; (4) any person
(other than stockholders of Aradyme or Albion as of the date
of this Agreement) having acquired beneficial ownership of, or
any group (as such term is defined under Section 13(d) of the
Exchange Act and the rules and regulations promulgated
thereunder) having been formed that beneficially owns, or has
the right to acquire beneficial ownership of, 20% or more of
the outstanding shares of capital stock of a Party hereto; or
(5) any public announcement of a proposal, plan, or intention
to do any of the foregoing or any agreement to engage in any
of the foregoing.
ARTICLE IX
GENERAL PROVISIONS
Section 9.01 Effectiveness of Representations, Warranties and
Agreements; Survival
(a) Prior to the execution of this Agreement, both of the
Parties have made available to each other the opportunity to review any
disclosures made pursuant to this Agreement and other information
available in accordance with the provisions of Section 5.04. Each Party
has been afforded the opportunity to engage its own attorneys,
accountants, and other advisors to assist in the review of such
schedules and other information and has made its own decision
respecting the extent to which such party has engaged such attorneys,
accountants, and other advisors. Except as set forth in Section 9.01(b)
of this Agreement, the representations, warranties, and agreements of
each Party hereto shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the other Party
hereto, any person controlling such Party, or any of its officers,
directors, managers, partners, representatives, attorneys, accountants,
or agents, whether prior to or after the execution of this Agreement.
(b) The representations, warranties, and agreements in
Sections 3.10 and 4.11 of this Agreement shall survive the Closing for
a period of six years. The covenants set forth in Section 5.04(d) shall
survive the termination of this Agreement.
Section 9.02 Notices
All notices and other communications given or made pursuant hereto
shall be in writing and shall be deemed to have been duly given upon receipt, if
delivered personally or by air courier, or mailed by registered or certified
mail (postage prepaid, return receipt requested), to the Parties at the
following addresses (or at such other address for a Party as shall be specified
by like changes of address) or sent by electronic transmission to the telecopier
number specified below (to be followed promptly by personal or air courier
delivery or mailing as hereinafter provided):
(a) If to Aradyme, to: Aradyme Development Corporation
Attention: Xxxxx Xxxxxxx
000 Xxxx 000 Xxxxx, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Facsimile (000) 000-0000
with copy to: Kruse, Landa, Xxxxxxx & Xxxxx, L.L.C.
Attn: Xxxxx X. Xxxxx
Xxxxxx Xxxxx, Xxxx Xxx Xxxxx
00 Xxxx Xxxxxxxx (300 Xxxxx)
Xxxx Xxxx Xxxx, XX 00000-0000
Facsimile (000) 000-0000
(b) If to Albion, to: Albion Aviation, Inc.
Attention: Jehu Hand
00000 Xxxxx Xxxx, Xxxxx X
Xxxx Xxxxx, XX 00000
Facsimile (000) 000-0000
Section 9.03 Certain Definitions
For the purposes of this Agreement:
(a) The term "affiliate" means a person that directly or
indirectly, through one or more intermediaries, controls, is controlled
by, or is under common control with, the first mentioned person.
(b) A person shall be deemed a "beneficial owner" of or to
have "beneficial ownership" of Albion Stock or Aradyme Stock, as the
case may be, in accordance with the interpretation of the term
"beneficial ownership" as defined in Rule 13d-3 under the Exchange Act,
as in effect on the date hereof; provided that, a person shall be
deemed to be the beneficial owner of, and to have beneficial ownership
of, Albion Stock or Aradyme Stock, as the case may be, that such person
or any affiliate of such person has the right to acquire (whether such
right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement, or understanding or upon the
exercise of conversion rights, exchange rights, warrants or options, or
otherwise.
(c) The term "business day" means any day other than a day on
which banks in the state of Delaware are authorized or obligated to be
closed.
(d) The term "control" (including the terms "controlled,"
"controlled by," and "under common control with") means the possession,
directly or indirectly or as trustee or executor, of the power to
direct or cause the direction of the management or policies of a
person, whether through the ownership of stock or as trustee or
executor, by contract, credit arrangement, or otherwise.
(e) The terms "knowledge" or "known" shall mean, with respect
to any matter in question, if an executive officer or equivalent person
of Albion or Aradyme, as the case may be, has actual knowledge of such
matter.
(f) The term "person" means an individual, corporation,
partnership, limited liability company, association, trust,
unincorporated organization, other entity, or group (as defined in
Section 13(d) of the Exchange Act),
(g) The terms "subsidiary" or "subsidiaries" of Albion or
Aradyme, means any corporation, partnership, limited liability company,
joint venture, or other legal entity of which Albion or Aradyme, as the
case may be (either alone or through or together with any other
subsidiary), owns, directly or indirectly, currently or in the past,
50% or more of the stock or other equity interests the holders of which
are generally entitled to vote for the election of the board of
directors or other governing body of such corporation or other legal
entity.
Section 9.04 Headings
The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Section references herein are, unless the context otherwise requires,
references to sections of this Agreement.
Section 9.05 Severability
If any term or other provision of this Agreement is invalid, illegal,
or incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to either
Party. Upon such determination that any term or other provision is invalid,
illegal, or incapable of being enforced, the Parties hereto shall negotiate in
good faith to modify this Agreement, so as to effect the original intent of the
Parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
Section 9.06 Entire Agreement
This Agreement (together with any Exhibits) constitutes the entire
agreement of the Parties, and supersedes all prior negotiations, courses of
dealing, agreements, undertakings, and understandings, both written and oral,
between the Parties with respect to the subject matter hereof.
Section 9.07 Assignment
This Agreement shall not be assigned by operation of law or otherwise.
Section 9.08 Parties in Interest
This Agreement shall be binding upon and inure solely to the benefit of
the Parties hereto, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person any right, benefit, or remedy
of any nature whatsoever under or by reason of this Agreement.
Section 9.09 Failure or Indulgence Not Waiver; Remedies
Cumulative
No failure or delay on the part of any Party hereto in the exercise of
any right hereunder shall impair such right or be construed to be a waiver of,
or acquiescence in, any breach of any representation, warranty, or agreement
herein, nor shall any single or partial exercise of any such right preclude
other or further exercise thereof or of any other right. All rights and remedies
existing under this Agreement are cumulative to, and not exclusive of, any
rights or remedies otherwise available.
Section 9.10 Governing Law
This Agreement shall be governed by, enforced, and construed under and
in accordance with the laws of the United States of America and, with respect to
matters of state law, with the laws of:
(a) the state of Delaware as applicable to Albion
respecting matters governing
corporations organized under the laws of such state;
(b) the state of Nevada as applicable to Aradyme
respecting matters governing corporations
organized under the laws of such state; and
(c) the state of Utah as applicable to Albion Merger
Corp. respecting matters governing
corporations organized under the laws of such state; and
(d) otherwise, the laws of the state of Utah.
Section 9.11 Counterparts
This Agreement may be executed in multiple counterparts, and by the
Parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original, but all of which taken together shall constitute one
and the same agreement.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed as of the date first written above by their respective officers,
thereunto duly authorized.
ALBION AVIATION, INC.
By
Jehu Hand, President
ARADYME DEVELOPMENT CORPORATION
By
Xxxxx Xxxxxxx, CEO
