AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of April 23, 1998, by and among THERMOVIEW INDUSTRIES, INC.
("Parent"), a Nevada corporation having its principal office located in
Louisville, Kentucky; THERMOVIEW MERGER CORP. ("Sub"), a California
corporation having its principal office located in Louisville, Kentucky;
American Home Developers Co., Inc. ("Company"), a California corporation
having its principal office located in Woodland Hills, California; and the
shareholders of Company identified on SCHEDULE 6.1 hereto (each a
"Shareholder" and collectively the "Shareholders").
PREAMBLE
The Boards of Directors of Company, Sub and Parent are of the opinion
that the transactions described herein are in the best interests of the
parties to this Agreement and their respective shareholders. This Agreement
provides for the acquisition of Company by Parent pursuant to the merger of
Company with and into Sub. At the effective time of the Merger, the
outstanding shares of the capital stock of Company shall be converted into
the right to receive shares of the common stock of Parent (except as provided
herein). As a result, shareholders of Company shall become shareholders of
Parent. Also at the Effective Time of the Merger, Company shall cease to
exist by operation of law and the business formerly conducted by Company
shall thereafter be conducted by and in the name of Sub. The transactions
described in this Agreement are subject to receipt of required regulatory
consents and approvals and the satisfaction of certain other conditions
described in this Agreement. It is the intention of the parties to this
Agreement that the Merger shall qualify as a "reorganization" within the
meaning of Section 368(a), including Section 368(a)(1)(A) and (a)(2)(D), of
the Internal Revenue Code of 1986, as amended (the "Code") for federal income
tax purposes.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
parties agree as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 MERGER. Subject to the terms and conditions of this Agreement
and the provisions of the Agreement of Merger attached as EXHIBIT A, at the
Effective Time, Company shall be merged with and into Sub in accordance with
the applicable provisions of the California General Corporation Law ("CGCL")
and with the effect provided in the CGCL (the "Merger"). Sub shall be the
surviving corporation resulting from the Merger and shall be a wholly-owned
subsidiary of Parent and shall continue to be governed by
the laws of the State of California. The Merger shall be consummated pursuant
to the terms of this Agreement and the Plan of Merger, which have been
approved and adopted by the respective Boards of Directors of Company, Sub
and Parent, by the Shareholders as the only shareholders of Company, and by
Parent, as the sole shareholder of Sub.
1.2 TIME AND PLACE OF CLOSING. The closing of the transactions
contemplated hereby (the "Closing") will take place at 9:00 A.M. on the date
hereof. The Closing shall be held at such location as may be mutually agreed
upon by the parties.
1.3 EFFECTIVE TIME. The Merger and other transactions contemplated
by this Agreement shall become effective at 11:59 p.m., P.D.T. (the
"Effective Time") on April 25, 1998 (the "Effective Date").
ARTICLE 2
TERMS OF MERGER
2.1 CHARTER.
The Articles of Incorporation of Sub in effect immediately
prior to the Effective Time shall be the Articles of Incorporation of the
surviving corporation resulting from the Merger until otherwise amended or
repealed.
2.2 BYLAWS.
The Bylaws of Sub in effect immediately prior to the Effective
Time shall be the Bylaws of the surviving corporation resulting from the
Merger until otherwise amended or repealed.
2.3 DIRECTORS AND OFFICERS.
The directors of Sub in office immediately prior to the
Effective Time, together with such additional persons as may thereafter be
elected, shall serve as the directors of the surviving corporation resulting
from the Merger from and after the Effective Time in accordance with the
Bylaws of such corporation. The officers of Sub in office immediately prior
to the Effective Time, together with such additional persons as may
thereafter be elected, shall serve as the officers of the surviving
corporation resulting from the Merger from and after the Effective Time in
accordance with the Bylaws of such corporation.
2.4 CERTAIN CLOSING DELIVERIES. In connection with the Closing,
each of Parent, Company and the Shareholders agrees to execute and deliver to
each other party the following:
(a) Company and Xxxx Xxxxxxx shall have executed and delivered
to the other an Employment Agreement, which shall be in the form of
EXHIBIT B.
(b) Parent and each of the Shareholders shall have executed and
delivered to the other a Noncompetition Agreement, which shall be in the
form of EXHIBIT C.
(c) Parent and each of the Shareholders shall have executed and
delivered to the other a Registration Rights Agreement, which shall be in
the form of EXHIBIT D.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 CONVERSION OF SHARES. Subject to the provisions of this
Article 3, at the Effective Time, by virtue of the Merger and without any
action on the part of Parent, Company, Sub or the shareholders of any of the
foregoing, the shares of the constituent corporations shall be converted as
follows:
(a) Each share of $.001 par value common stock of Parent
("Parent Common Stock"), and any other class or series of capital stock of
Parent (collectively, "Parent Capital Stock") issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding
from and after the Effective Time.
(b) Each share of the no par value common stock of Sub ("Sub
Common Stock") issued and outstanding immediately prior to the Effective Time
shall remain issued and outstanding from and after the Effective Time.
(c) Each share of Company Common Stock, defined in Section
5.4 below, (excluding shares held by Company or Parent or any of its
subsidiaries) issued and outstanding immediately prior to the Effective Time
shall cease to be outstanding and shall be converted into and exchanged for
(i) 750 shares of Parent Common Stock (the "Stock Exchange Ratio"), and (ii)
$1,125 (the "Cash Exchange Ratio").
3.2 ANTI-DILUTION PROVISIONS. In the event Parent changes the
number of shares of Parent Common Stock issued and outstanding prior to the
Effective Time as a result of a stock split, stock dividend, or similar
recapitalization with respect to such stock and the record date therefor (in
the case of a stock dividend) or the effective date thereof (in the case of a
stock split or similar recapitalization for which a record date is not
established) shall be prior to the Effective Time, the Stock Exchange Ratio
shall be proportionately adjusted.
3.3 SHARES HELD BY COMPANY OR PARENT. Each of the shares of
Company Common Stock held by Company or Parent or any of its subsidiaries
shall be canceled and retired at the Effective Time and no consideration
shall be issued in exchange therefor.
3.4 DISSENTING SHAREHOLDERS.
Each of the Shareholders agrees that he will not seek to assert
dissenters' rights to which such Shareholder otherwise would be entitled
under the applicable provisions of the CGCL.
3.5 FRACTIONAL SHARES. Notwithstanding any other provision of this
Agreement, each holder of shares of Company Common Stock exchanged pursuant
to the Merger who would otherwise have been entitled to receive a fraction of
a share of Parent Common Stock (after taking into account all certificates
delivered by such holder) shall receive, in lieu thereof, cash (without
interest) in an amount equal to such fractional part of a share of Parent
Common Stock multiplied by the market value of one share of Parent Common
Stock at the Effective Time. The market value of one share of Parent Common
Stock at the Effective Time shall be the highest bid price of such common
stock as quoted by the National Association of Securities Dealers (as
reported by The Wall Street Journal or, if not reported thereby, any other
authoritative source selected by Parent) on the last trading day preceding
the Effective Time. No such holder will be entitled to dividends, voting
rights, or any other rights as a shareholder in respect of any fractional
shares.
3.6 POST-CLOSING EARN-OUT. The Shareholders shall be entitled to
receive post-closing earn-outs as set forth on SCHEDULE 3.6.
ARTICLE 4
EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES. At the Closing (or as soon as reasonably
practicable thereafter), each holder of shares of Company Common Stock (other
than shares to be canceled pursuant to Section 3.3) issued and outstanding at
the Effective Time shall surrender the certificate or certificates
representing such shares to Parent and shall promptly upon surrender thereof
receive in exchange therefor the consideration provided in Section 3.1,
together with all undelivered dividends or distributions in respect of such
shares (without interest thereon) pursuant to Section 4.2. To the extent
required by Section 3.5, each holder of shares of Company Common Stock issued
and outstanding at the Effective Time also shall receive, upon surrender of
the certificate or certificates representing such shares, cash in lieu of any
fractional share of Parent Common Stock to which such holder may be otherwise
entitled (without interest). Parent shall not be obligated to deliver the
consideration to which any former holder of Company Common Stock is entitled
as a result of the Merger until such holder surrenders such holder's
certificate or certificates representing the shares of Company Common Stock
for exchange as provided in this Section 4.1. The certificate or
certificates of Company Common Stock so surrendered shall be duly endorsed as
Parent may reasonably require.
4.2 RIGHTS OF FORMER SHAREHOLDERS. At the Effective Time, the
stock transfer books of Company shall be closed as to holders of Company
Common Stock
immediately prior to the Effective Time and no transfer of Company Common
Stock by any such holder shall thereafter be made or recognized. Until
surrendered for exchange in accordance with the provisions of Section 4.1,
each certificate theretofore representing shares of Company Common Stock
(other than shares to be canceled pursuant to Section 3.3) shall from and
after the Effective Time represent for all purposes only the right to receive
the consideration provided in Sections 3.1 and 3.5 in exchange therefor,
subject, however, to Company's obligation to pay any dividends or make any
other distributions with a record date prior to the Effective Time which have
been declared or made by Company in respect of such shares of Company Common
Stock in accordance with the terms of this Agreement and which remain unpaid
at the Effective Time. Whenever a dividend or other distribution is declared
by Parent on the Parent Common Stock, the record date for which is at or
after the Effective Time, the declaration shall include dividends or other
distributions on all shares of Parent Common Stock issuable pursuant to this
Agreement, but no dividend or other distribution payable to the holders of
record of Parent Common Stock as of any time subsequent to the Effective Time
shall be delivered to the holder of any certificate representing shares of
Company Common Stock issued and outstanding at the Effective Time until such
holder surrenders such certificate for exchange as provided in Section 4.1.
However, upon surrender of such Company Common Stock certificate, both the
Parent Common Stock certificate (together with all such undelivered dividends
or other distributions without interest) and any undelivered dividends and
cash payments payable hereunder (without interest) shall be delivered and
paid with respect to each share represented by such certificate.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF COMPANY
Company hereby represents and warrants to Parent as follows:
5.1 ORGANIZATION AND QUALIFICATION. Company is a corporation duly
organized, validly existing and in good standing under the laws of the State
of California. The nature of the business of Company does not require
Company to be licensed or qualified in any other jurisdiction. Company has
made available to Parent complete and correct copies of the Articles of
Incorporation and By-laws of Company as currently in effect.
5.2 CORPORATE POWER AND AUTHORITY. Company has the corporate power
and authority to own and hold its properties and to carry on its business as
now conducted. Company (a) has the corporate power and authority to execute,
deliver and perform this Agreement and the Exhibits and to deliver the
Schedules hereto and the other documents and instruments contemplated hereby
(collectively this Agreement, the Exhibits and Schedules hereto, and the
other documents and instruments contemplated hereby shall constitute the
"Documents") and to consummate the transactions contemplated hereby and
thereby and (b) has taken all necessary corporate and shareholder action to
authorize and approve the execution, delivery and performance of this
Agreement and the other Documents and the consummation of the transactions
contemplated hereby and thereby.
This Agreement has been duly and validly executed and delivered by Company
and the other Documents have been delivered by Company and constitute valid
and binding obligations of Company, enforceable against Company in accordance
with their terms.
5.3 FOREIGN PERSON. Company is not a foreign person as that term
is defined in Section 1445(f)(3) of the Code and applicable regulations.
5.4 CAPITALIZATION. Company has authorized capital consisting of
2,500 shares of common stock, without par value, of which 1,000 shares are
issued and outstanding and no shares are held as treasury stock (the "Company
Common Stock"). All of the outstanding shares of Company have been duly
authorized and validly issued and are fully paid and nonassessable. None of
the outstanding shares of Company has been issued in violation of any
preemptive right. There are no outstanding options, warrants, rights, calls,
commitments, conversion rights, rights of exchange, plans or other agreements
of any character providing for the purchase, issuance or sale of any shares
of capital stock of Company, other than as contemplated by this Agreement.
5.5 SUBSIDIARIES AND INVESTMENTS. Company has no subsidiaries and
does not own, directly or indirectly, any capital stock or other equity or
ownership or proprietary interest in any other corporation, partnership,
association, trust, joint venture or other entity.
5.6 BOOKS AND RECORDS. The minute books of Company, which have
been and will be made available to Parent and its representatives, contain
accurate records of all meetings of and corporate actions or written consents
by the shareholders and Board of Directors of Company set forth in such
minute books. Company does not have any of its records, systems, controls,
data or information recorded, stored, maintained, operated or otherwise
wholly or partly dependent upon or held by any means (including any
electronic, mechanical or photographic process, whether computerized or not)
which (including all means of access thereto and therefrom) are not under the
exclusive ownership and direct control of Company.
5.7 FINANCIAL STATEMENTS. Company has previously furnished to
Parent, and attached hereto as SCHEDULE 5.7 are, the compiled statements of
assets, liabilities, and equity - cash basis of Company as of June 30, 1997,
1996 and 1995 and the related statements of revenues and expenses - cash
basis for the years then ended, and the compiled statement of assets,
liabilities, and equity - cash basis (the "Balance Sheet") of Company as of
January 31, 1998 (the "Balance Sheet Date") and the related statement of
revenues and expenses - cash basis for the seven months then ended. All such
financial statements (the "Financial Statements") were prepared from the
books and records of Company. Such books and records are complete and correct
in all material respects, accurately reflect all cash transactions of the
business of Company, and have been made available to Parent for examination.
The Financial Statements present the financial position of Company as of the
dates thereof on the cash basis and the revenues and expenses for the periods
ended on the dates thereof on the cash basis. Since the Balance Sheet Date
and except as set forth on Schedule 5.7, (i) there has been no change in the
assets, liabilities or financial condition of Company on the cash basis from
that reflected in the Balance Sheet except for changes in the ordinary course
of business and which have not been materially adverse, and (ii) none of the
business, prospects, financial condition, operations, property or affairs of
Company has been materially adversely affected by any occurrence or
development, individually or in the aggregate, whether or not insured
against. Company has disclosed to Parent all material facts relating to the
preparation of the Financial Statements.
5.8 EMPLOYMENT AND LABOR MATTERS.
(a) SCHEDULE 5.8 lists and designates all employees,
independent contractors and officers of Company on the date hereof, along
with the amount of the current annual salaries and total compensation paid or
due for services to each employee, independent contractor or officer for the
most recent fiscal year end and the year to date, and a full and complete
description of any commitments to such employees, independent contractors and
officers with respect to compensation payable thereafter. To the best
knowledge of Company, no key employee or independent contractor or group of
employees or independent contractors has any plans to terminate employment or
service with Company.
(b) Company is not a party to or bound by any collective
bargaining agreement with any labor organization, group or association
covering any of its employees, and Company has no knowledge of any attempt to
organize Company's employees by any Person, unit or group seeking to act as
their bargaining agent. There are no pending or threatened charges (by
employees, their representatives or governmental authorities) of unfair labor
practices or of employment discrimination or of any other wrongful action
with respect to any aspect of employment of any person employed or formerly
employed by Company. No union representation election relating to employees
of Company has been scheduled by any governmental agency or authority, no
organizational effort is being made with respect to any of such employees,
and there is no investigation of Company's employment policies or practices
by any governmental agency or authority pending or threatened. Company is
not currently, nor has it been, involved in labor negotiations with any unit
or group seeking to become the bargaining unit for any employees of Company.
Company has not experienced any material work stoppages, and to the best
knowledge of Company, no work stoppage is planned.
5.9 REAL PROPERTY. Company owns no real property.
5.10 POWERS OF ATTORNEY; ABSENCE OF LIMITATIONS ON COMPETITION;
GUARANTEES.
Except as set forth in SCHEDULE 5.10, (i) no power of attorney or
similar authorization given by Company presently is in effect or outstanding;
(ii) no contract or agreement to which Company is a party or is bound or to
which Company's properties or assets are subject limits the freedom of
Company to compete in any line of business or
with any Person; and (iii) Company is not a party to or bound by any
guarantee of any debt or obligation of any other Person.
5.11 SIGNIFICANT SUPPLIERS. Set forth on SCHEDULE 5.11 is a true
and correct list of Company's ten largest suppliers for the most recent
twelve (12) month period ending December 31, 1997 and for the period
beginning January 1, 1998 and ending March 15, 1998, together with the amount
attributable to such suppliers expressed in dollars and as a percentage of
total supplies purchased. None of the suppliers identified on SCHEDULE 5.11
has terminated, materially reduced or threatened to terminate or materially
reduce its supplies to Company during the period covered by such schedule.
5.12 GOVERNMENTAL APPROVALS. Except as set forth on SCHEDULE 5.12,
no registration or filing with, or consent or approval of or other action by,
any Federal, state or other governmental agency or instrumentality is or will
be necessary for the valid execution, delivery and performance by Company of
this Agreement.
5.13 VALIDITY, ETC. Except as set forth on SCHEDULE 5.13, neither
the execution and delivery of this Agreement or the other Documents, the
consummation of the transactions contemplated hereby or thereby, nor the
performance of this Agreement or the other Documents in compliance with the
terms and conditions hereof and thereof by Company will (i) violate, conflict
with or result in any breach of any trust agreement, Articles of
Incorporation, bylaw, judgment, decree, order, statute or regulation
applicable to Company, (ii) violate, conflict with or result in a breach,
default or termination or give rise to any right of termination, cancellation
or acceleration of the maturity of any payment date of any of the obligations
of Company or increase or otherwise affect the obligations of Company under
any law, rule, regulation or any judgment, decree, order, governmental
permit, license or order or any of the terms, conditions or provisions of any
mortgage, indenture, note, license, agreement or other instrument or
obligation related to Company or to Company's ability to consummate the
transactions contemplated hereby or thereby, except for such defaults (or
rights of termination, cancellation or acceleration) as to which requisite
waivers or consents have been obtained in writing and provided to Parent, or
(iii) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Company.
5.14 ABSENCE OF ADVERSE CHANGE; CONDUCT OF BUSINESS.
During the period from the Balance Sheet Date to and including the
date of this Agreement, except as set forth on SCHEDULE 5.14, Company has not
(i) borrowed or agreed to borrow, other than in the ordinary course of
business, any material amount of funds or incurred any liability or
obligation of any nature (whether accrued, absolute, contingent or
otherwise), or guaranteed or agreed to guarantee any obligations of others,
(ii) canceled any indebtedness owing to it or any claims that it might have
possessed, waived any material rights of substantial value or sold, leased,
encumbered, transferred or otherwise disposed of, or agreed to sell, lease,
encumber, or otherwise dispose of its assets or permitted any of its assets
to be subjected to any mortgage, pledge, lien, security interest,
encumbrance, restriction or charge of any kind, (iii) made any capital
expenditure or commitment therefor, (iv) declared or paid any dividend or
made any distribution on any shares of its capital stock, or redeemed,
purchased or otherwise acquired any shares of its capital stock or any
option, warrant or other right to purchase or acquire any such shares, (v)
increased its indebtedness for borrowed money, or made any loan to any
Person, (vi) written off as uncollectible any notes or accounts receivable,
except write-offs in the ordinary course of business, (vii) made any material
change in any method of accounting, (viii) otherwise conducted its business
or entered into any transaction, except in the usual and ordinary manner, or
(ix) agreed, whether or not in writing, to do any of the foregoing.
5.15 CERTAIN PRACTICES. None of Company, any of Company's directors
or officers, or to the best knowledge of Company, Company's employees has,
directly or indirectly, used any corporate 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 from corporate funds; violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended; established or maintained any unlawful or
unrecorded fund of corporate monies or other assets; made any false or
fictitious entry on the books or records of Company or any subsidiary; made
any bribe, rebate, payoff, influence payment, kickback, or other unlawful
payment; given any favor or gift which is not deductible for federal income
tax purposes; or made any bribe, kickback, or other payment of a similar or
comparable nature, whether lawful or not, to any person or entity, private or
public, regardless of form, whether in money, business or to obtain special
concessions, or to pay for favorable treatment for business secured or for
special concessions already obtained.
5.16 COMPLIANCE WITH LAW; LICENSES AND PERMITS.
Except as set forth on SCHEDULE 5.16, Company has complied in all
material respects with all laws, ordinances, legal requirements, rules,
regulations and orders applicable to it, its operations, properties, assets,
products and services. Except as set forth on SCHEDULE 5.16, there is no
existing law, rule, regulation or order, and Company is not aware of any
proposed law, rule, regulation or order, whether federal, state or local,
which would prohibit or materially restrict Sub from, or otherwise materially
adversely affect Sub in, conducting the business of Company in the manner
heretofore conducted by Company in any jurisdiction in which such business is
now conducted. Company possesses all franchises, permits, licenses,
certificates and consents required from any governmental or regulatory
authority in order for Company to carry on its business as currently
conducted and to own and operate its properties and assets as now owned and
operated and all of such licenses and permits are set forth on SCHEDULE 5.16.
5.17 EMPLOYEE BENEFITS.
(a) Set forth on SCHEDULE 5.17 is a list of all pension, profit
sharing, retirement, deferred compensation, stock purchase, stock option,
incentive, bonus, vacation, severance, disability, hospitalization, medical
insurance, life insurance, fringe
benefit, welfare and other employee benefit plans, programs or arrangements
pursuant to which Company or its ERISA Affiliates provides (directly or
indirectly, individually or jointly through others) benefits or compensation
to or on behalf of employees or independent contractors or former employees
or former independent contractors of Company or its ERISA Affiliates, whether
formal or informal, whether or not written ("Employee Plan"). On request by
Parent, Company shall furnish a copy of each Employee Plan and a copy of any
related materials. Company will maintain the benefits listed on SCHEDULE
5.17 in full force and effect through the Effective Date. Except as set
forth on SCHEDULE 5.17, Parent shall not have any obligation or liability of
any kind or nature for any compensation or benefits of any kind or nature to
the employees or consultants of Company for services rendered prior to the
Effective Date.
(b) Each Employee Plan covering any present or former
employee of Company which is subject to the continuation health coverage
requirements of Section 4980B of the Code or Section 601 of ERISA or any
applicable state law has complied with all such requirements for continuation
coverage.
(c) There are no actions, suits or claims pending (other
than routine claims for benefits) or threatened against or with respect to
any Employee Plan or the assets of any Employee Plan.
(d) Each Employee Plan (and the related trust or funding
vehicle, if any) has been administered and maintained in accordance with its
terms and with applicable law. Except as set forth on SCHEDULE 5.17(d), each
Employee Plan which is intended to be qualified under Section 401 of the Code
and each amendment to such plan is subject to a favorable determination
letter from the Internal Revenue Service ("IRS") and each such plan has at
all times been maintained, by its terms and in operation, in accordance with
Section 401 of the Code. The assets of each Employee Plan which is not
funded through the general assets of Company are at least equal to the
liabilities under such Employee Plan, and all assets of each Employee Plan
are shown on the books and records of such Employee Plan at fair market
value. No Employee Plan has unfunded liabilities that as of the Effective
Time are not accurately and fully reflected on Company's Balance Sheet.
(e) Neither Company nor any of its ERISA Affiliates is or
has been a participant in, or is or has been obligated to maintain or to make
contributions to, a multi-employer plan (within the meaning of ERISA Section
3(37) and ERISA Section 4001(a)(3)) or an Employee Plan which is subject to
Title IV of ERISA. Neither Company nor any ERISA Affiliate has sponsored,
contributed to or been obligated under Title I or IV of ERISA to contribute
to a "defined benefit plan" (as defined in ERISA Section 3(35)). Company is
not obligated to provide post-retirement medical benefits or any other
unfunded post-retirement welfare benefits to or on behalf of any persons
whatsoever (except the benefits pursuant to the continuation health coverage
requirements under Section 4980B of the Code, ERISA Section 601, or
applicable state law).
(f) Neither Company nor its ERISA Affiliates is subject to
and, to the best knowledge of Company, no facts exist which could subject
Company or any of its ERISA Affiliates to, any liability whatsoever which is
directly or indirectly related to any Employee Plan, including, but not
limited to, liability for benefit payments or related claims, any liability
for any tax or related penalty under the Code, or liability for any damages
or penalties arising under Title I or Title IV of ERISA. No reportable event
under Section 4043 of ERISA has occurred or, to the best knowledge of
Company, will occur with respect to such Employee Plan.
(g) Termination of or withdrawal from any Employee Plan
immediately after the Effective Time would not subject Parent to any
liability, tax or penalty whatsoever.
(h) The execution or performance of the transactions
contemplated by this Agreement will not create, accelerate or increase any
obligations under the Employee Plans, including any obligation to make any
payment which would not be deductible as an excess golden parachute payment
under Section 280G of the Code.
(i) All contributions to or under each Employee Plan and all
expenses of each Employee Plan are fully deductible for income tax purposes
for the taxable year for which such contributions are made or such expenses
are paid. All contributions to or under each Employee Plan have been made
when due under the terms of such Employee Plan in accordance with applicable
law.
(j) For purposes of this Section 5.17, the term "ERISA"
shall mean the Employee Retirement Income Security Act of 1974, as amended,
and the term "ERISA Affiliate" shall mean each trade or business (whether or
not incorporated) which together with Company is treated as a single employer
under Section 414(b), (c), (m), (o) or (t) of the Code.
5.18 FIXED ASSETS. SCHEDULE 5.18 contains a true and complete
depreciation list of Company's fixed assets, whether owned or leased. Except
as shown on SCHEDULE 5.18, Company has good and marketable title to all of
its fixed assets, free and clear of all claims, liens, mortgages, charges and
encumbrances except as disclosed in the Balance Sheet. All of Company's
fixed assets, whether owned or leased, are adequate and usable for the
purposes for which they are currently used, are in good operating condition
and repair and have been properly maintained.
5.19 INSURANCE. Company is, and will be through the Closing,
insured with insurers in respect of its properties, assets and businesses as
set forth on the attached SCHEDULE 5.19. SCHEDULE 5.19 lists the insurance
coverage carried by Company, which insurance will remain in full force and
effect with respect to all events occurring prior to the Effective Date.
Except as set forth on SCHEDULE 5.19, Company (i) has not failed to give any
notice or present any claim under any such policy or binder in due and timely
fashion, (ii) has not received notice of cancellation or non-renewal of any
such policy or binder, (iii) is not aware of any threatened or proposed
cancellation or non-renewal of
any such policy or binder, (iv) has not received notice of any insurance
premium which will be materially increased in the future, and (v) is not
aware of any insurance premium which will be materially increased in the
future. There are no outstanding claims under any such policy which have
gone unpaid for more than 45 days, or as to which the insurer has disclaimed
liability.
5.20 ACCOUNTS RECEIVABLE; SHAREHOLDER NOTES. The accounts
receivable and other debts due or recorded in the respective records and
books of account of Company as being due to Company as of the Effective Date,
set forth on SCHEDULE 5.20, arose in the ordinary course of business of
Company, are not subject to any counterclaim or set-off and are fully
collectible within 120 days after the Effective Date without resort to
litigation and without offset or counterclaim. As of the Closing Date, all
notes payable to Shareholders by Company have been paid in full.
5.21 OUTSTANDING CONTRACTS. SCHEDULE 5.21 sets forth a description
of all existing contracts, agreements, leases, commitments, licenses and
franchises, which involve obligations or commitments by Company of $10,000 or
more and are not cancelable by Company without penalty within 30 days
(collectively "Contracts"), whether written or oral, relating to Company.
Company has delivered or made available to Parent true, correct and complete
copies of all of the Contracts specified on SCHEDULE 5.21 which are in
writing, and such schedule sets forth a complete description of all Contracts
which are not in writing. All of the Contracts are in full force and effect
and enforceable in accordance with their terms, except to the extent that the
enforceability thereof may be subject to or affected by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, or
other laws relating to or affecting the rights of creditors generally.
Except as set forth on SCHEDULE 5.21, Company and, to the best knowledge of
Company, each other party thereto has materially performed all the
obligations required to be performed by it, has received no notice of default
and is not in default (with due notice or lapse of time or both) under any of
the Contracts. Company has no present expectation or intention of not fully
performing all its obligations under each of the Contracts, and Company has
no knowledge of any breach or anticipated breach by the other party to any of
the Contracts to which Company is a party. Except as set forth on SCHEDULE
5.21, none of the Contracts has been terminated; no notice has been given by
any party thereto of any alleged default by any party thereunder; and Company
is not aware of any intention or right of any party to declare another party
to any of the Contracts to be in default. Except as set forth on SCHEDULE
5.21, there exists no actual or, to the best knowledge of Company, threatened
termination, cancellation or limitation of the business relationship of
Company by any party to any of the Contracts.
5.22 OUTSTANDING LEASES. SCHEDULE 5.22 sets forth a description of
each agreement by which Company leases each parcel of real property (the
"Leased Parcels") used in connection with the business (collectively, the
"Leases"). Company has delivered or made available to Parent true, correct
and complete copies of all of the Leases specified on SCHEDULE 5.22. All
rents due under the Leases have been paid. All of the Leases are in full
force and effect and enforceable in accordance with their terms, except to
the extent that the enforceability thereof may be subject to or affected by
applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, or
other laws relating to or affecting the rights of creditors generally.
Except as set forth on SCHEDULE 5.22, Company and, to the best knowledge of
Company, each other party thereto has performed all the obligations required
to be performed by it, has received no notice of default and, to the best
knowledge of Company, is not in default (with due notice or lapse of time or
both) under any of the Leases. Company has no present expectation or
intention of not fully performing all its obligations under each of the
Leases, and Company has no knowledge of any breach or anticipated breach by
the other party to any of the Leases. Except as set forth on SCHEDULE 5.22,
none of the Leases has been terminated; no notice has been given by any party
thereto of any alleged default by any party thereunder; and Company is not
aware of any intention or right of any party to declare another party to any
of the Leases to be in default. There exists no actual or, to the best
knowledge of Company, threatened termination, cancellation or limitation of
the business relationship of Company with any party to any of the Leases.
5.23 INTELLECTUAL PROPERTIES. SCHEDULE 5.23 contains an accurate
and complete list of all domestic and foreign letters patent, patents, patent
applications, patent licenses, software licenses and know-how licenses, trade
names, trademarks, copyrights, unpatented inventions, service marks,
trademark registrations and applications, service xxxx registrations and
applications and copyright registrations and applications, trade secrets or
other confidential proprietary information owned or used by Company in the
operation of the business (collectively the "Intellectual Property"). Except
as set forth on SCHEDULE 5.23 and except for commercial software licensed for
use on personal computers, Company owns the entire right, title and interest
in and to the Intellectual Property, trade secrets and technology used in the
operation of its business and each item constituting part of the Intellectual
Property and trade secrets and technology which is owned by Company has been,
to the extent indicated in SCHEDULE 5.23, duly registered with, filed in or
issued by, as the case may be, the United States Patent and Trademark office
or such other government entities, domestic or foreign, as are indicated in
SCHEDULE 5.23 and such registrations, filings and issuances remain in full
force and effect. There have been and are no pending or, to the best
knowledge of Company, threatened proceedings or litigation or other adverse
claims affecting or with respect to the Intellectual Property. There is, to
the best knowledge of Company, no reasonable basis upon which a claim may be
asserted against Company for infringement of any domestic or foreign letters
patent, patents, patent applications, patent licenses and know-how licenses,
trade names, trademark registrations and applications, common law trademarks,
service marks, service xxxx registrations or applications, copyrights,
copyright registrations or applications, trade secrets or other confidential
proprietary information. To the best knowledge of Company, no Person is
infringing the Intellectual Property.
5.24 PROPRIETARY INFORMATION OF THIRD PARTIES.
Except as disclosed on SCHEDULE 5.24, no third party has claimed or,
to the best knowledge of Company, has reason to claim that any Person
employed by or consulting with Company ("Related Person") has (i) violated or
may be violating any of the terms or conditions of such person's employment,
non-competition or non-disclosure agreement
with such third party, (ii) disclosed or may be disclosing or utilized or may
be utilizing any trade secret or proprietary information or documentation of
such third party, or (iii) interfered or may be interfering in the employment
relationship between such third party and any of its present or former
employees. No third party has requested information from Company which
suggests that such a claim might be contemplated. Except as disclosed on
SCHEDULE 5.24, to the best knowledge of Company, no Related Person has
employed or proposes to employ any trade secret or any information or
documentation proprietary to any former employer and no Related Person has
violated any confidential relationship which such person may have had with
any third party, in connection with the development or sale of any service of
Company, and Company has no reason to believe there will be any such
employment or violation.
5.25 TRANSACTIONS WITH AFFILIATES. Except as set forth on SCHEDULE
5.25, to the best knowledge of Company, no director, officer or shareholder
of Company, or member of the family of any such person, or any corporation,
partnership, trust or other entity in which any such person, or any member of
the family of any such person, has a beneficial interest greater than 5% or
is an officer, director, trustee, partner or holder of any equity interest
greater than 5% (an "Affiliate"), is a party to any transaction with Company,
including any contract, agreement or other arrangement providing for the
employment of, furnishing of services by, rental of real or personal property
from or otherwise requiring payments or involving other obligations to any
such person or firm.
5.26 ABSENCE OF UNDISCLOSED LIABILITIES.
(a) Except as and to the extent of the amounts specifically
reflected or reserved against in the Balance Sheet, or except as set forth on
SCHEDULE 5.26, Company has no liabilities or obligations of any nature
whatsoever due or to become due, accrued, absolute, contingent or otherwise,
except for liabilities and obligations incurred since the date thereof in the
ordinary course of business and consistent with past practice. Company does
not know of, and has no reason to know of, any basis for the assertion
against Company of any liability or obligation not fully reflected or
reserved against in the Balance Sheet or set forth on SCHEDULE 5.26.
(b) Company is not bound by any agreement, or subject to
any charter or other corporate restriction or any legal requirement, which
has, or, to the best knowledge of Company, in the future can reasonably be
expected to have, a material adverse effect on the business or prospects of
Company.
5.27 TAXES. SCHEDULE 5.27 lists all the states and localities with
respect to which Company is required to file any corporate, income and/or
franchise tax returns. Except as set forth on SCHEDULE 5.27, all federal,
state, local and foreign tax returns and tax reports required to be filed by
Company on or before the date hereof have been timely filed with the
appropriate governmental agencies in all jurisdictions in which such returns
and reports are required to be filed and all amounts shown as owing thereon
have been paid. All taxes (including, without limitation, income,
accumulated earnings, property, sales, use, franchise, excise, license, value
added, fuel, employees' income withholding
and social security taxes) which have become due or payable or are required
to be collected by Company or are otherwise attributable to any periods
ending on or before the Effective Date and all interest and penalties
thereon, whether disputed or not, have been paid or will be paid in full or
adequately reflected on SCHEDULE 5.27. Except as set forth on SCHEDULE 5.27,
all deposits required by law to be made by Company with respect to employees'
withholding taxes have been duly made, and as of the Effective Time all such
deposits due will have been made. Company has delivered to Parent true and
complete copies of all of Company's federal and state income tax returns for
the fiscal periods ended June 30, 1997, 1996 and 1995 and all reports and
results of income tax audits, if any, related thereto. Except as set forth
on SCHEDULE 5.27, no examination of any tax return of Company is currently in
progress. There are no outstanding agreements or waivers extending the
statutory period of limitations applicable to any such tax return.
5.28 LITIGATION. Except as set forth on SCHEDULE 5.28, there is no
(i) action, suit, claim, proceeding or investigation pending or, to the best
knowledge of Company, threatened against or affecting Company (whether or not
such Company is a party or prospective party thereto), at law or in equity,
or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, (ii) arbitration proceeding pending relating to Company or (iii)
governmental inquiry pending or threatened against or involving Company, and
there is no basis for any of the foregoing. Company has not received any
opinion or memorandum or legal advice from legal counsel to the effect that
it is exposed, from a legal standpoint, to any liability or disadvantage
which may be material to the business, prospects, financial condition,
operations, property or affairs of Company. There are no outstanding orders,
writs, judgments, injunctions or decrees served upon Company by any court,
governmental agency or arbitration tribunal against Company. There are no
facts or circumstances which may result in institution of any action, suit,
claim or legal, administrative or arbitration proceeding or investigation
against, involving or affecting Company or the transactions contemplated
hereby. Company is not in default with respect to any order, writ,
injunction or decree known to or served upon it from any court or of any
federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign. Except as
disclosed on SCHEDULE 5.28, there is no action or suit by Company pending or
threatened against others.
5.29 ENVIRONMENTAL MATTERS.
(a) COMPLIANCE. Company and all Leased Parcels are in
compliance with all applicable laws, rules, regulations, orders, ordinances,
judgments and decrees of all governmental authorities with respect to all
environmental statutes, rules and regulations. Except as set forth on
SCHEDULE 5.29, Company has not received notice of, nor does Company have
knowledge of, any past, present or future events, conditions, circumstances,
activities, practices, incidents, actions or plans of Company or Company's
predecessors, either collectively, individually or severally, which may
interfere with or prevent continued compliance with, or which may give rise
to any common law or legal liability or otherwise form the basis of any
claim, action, suit, proceeding, hearing, or
investigation, based on or related to the disposal, storage, handling,
manufacture, processing, distribution, use, treatment or transport, or the
emission, discharge, release or threatened release into the environment, of
any Substance. As used in this Section 5.29, the term "Substance" or
"Substances" shall mean any pollutant, contaminant, hazardous substance,
hazardous material, hazardous waste or toxic waste, as defined in any
presently enacted federal, state or local statute or any regulation that has
been promulgated pursuant thereto. No part of any of the Leased Parcels has
been listed or proposed for listing on the National Priorities List
established by the United States Environmental Protection Agency, or any
corresponding list by any state or local authorities.
(b) ENVIRONMENTAL SUBSTANCE LIABILITY. No event has
occurred or condition exists or operating practice is being employed that
could give rise to liability on the part of Company, either at the present
time or in the future, for any losses, liabilities, damages (whether
consequential or otherwise), settlements, penalties, interest, expenses and
costs of responses, including any such liability on account of the right of
any governmental or private entity or person, and including closure expenses,
costs of assessment, containment, removal, or response (other than monitoring
or transportation or disposal of materials required to be transported or
disposed of in the ordinary course of business consistent with past practice)
arising under any rule or federal, state, or local statute, or any regulation
that has been promulgated pursuant thereto, or common law, as a result of or
in connection with, or alleged to be as a result of or in connection with,
the following (collectively the "Hazardous Activities"):
i) the handling, storage, use, transportation or
disposal of any Substances in or near or from the
Leased Parcels;
ii) the handling, storage, use, transportation or
disposal of any Substances by Company or its
predecessors which Substances were a product,
by-product or otherwise resulted from the operations
conducted by or on behalf of Company or its
predecessors;
iii) any intentional or unintentional emission, discharge
or release of any Substances in or near or from
facilities into or upon the air, surface water,
ground water or land or any disposal, handling,
manufacturing, processing, distribution, use,
treatment, or transport of such Substances in or
near or from facilities by or on behalf of Company
or its predecessors; or
iv) the presence of any toxic or hazardous building
materials (including but not limited to friable
asbestos or similar substances) in any facilities of
Company, including but not limited to the inclusion
of such materials in the exterior and
interior walls, floors, ceilings, tile, insulation
or any other portion of building structures.
(c) ENVIRONMENTAL PERMITS. Company has obtained and holds
all registrations, permits, licenses, and approvals issued by or on behalf of
any federal, state or local governmental body or agency if any
("Environmental Permits") that are required in connection with the operation
by Company of the Leased Parcels, the discharge or emission of Substances by
Company from the Leased Parcels or the generation, treatment, storage,
transportation, or disposal of any such Substances by Company. Such
Environmental Permits, which are described on SCHEDULE 5.29, are currently
effective and sufficient for the operation of the Leased Parcels and the
business of Company as currently conducted and intended to be conducted.
Company is in compliance with all terms and conditions of the Environmental
Permits, and is also in compliance with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules,
and timetables contained in those laws or provisions or contained in any
regulation, code, plan, order, decree, judgment, notice or demand letter
issued, entered, promulgated or approved thereunder and applicable to Company.
(d) DELIVERIES. Company has delivered to Parent true and
complete copies and results of any reports, studies, analyses, tests, or
monitoring possessed or initiated by Company pertaining to Substances or
Hazardous Activities in, on, or under the Leased Parcels or concerning
compliance by Company or any other Person for whose conduct they are or may
be held responsible, with environmental statutes, rules and regulations.
5.30 INVENTORY. Company has no inventory (whether raw materials,
work-in-process, or finished goods) other than those purchased or incurred
for jobs in process.
5.31 YEAR-2000 COMPLIANCE.
(a) SCHEDULE 5.31 contains a true and complete list of all Systems (as
hereinafter defined), and each System is Year-2000 Compliant (as hereinafter
defined) to the extent indicated on SCHEDULE 5.31.
(b) As used throughout this Agreement, the following definitions
shall have the following meanings:
(1) "External Systems" shall mean all services which are
provided to Company by third parties and which are
dependent on information technology, including, but not
limited to, any external payroll, accounting, or tax filing
services or any checking, savings, or other financial
services.
(2) "Internal Systems" shall mean all technology products and
systems generally operated or controlled in-house by
Company, or its employees, agents, or independent
contractors including, but not
limited to, computers, computer networks, telephone
systems, voicemail systems, intercom systems, pager
systems, and software applications.
(3) "Licensed Systems" shall mean all products and systems
developed by or for Company which are licensed, sold,
distributed, or otherwise transferred by Company to third
parties.
(4) "System" or "Systems" shall mean any, all, or any
combination of any Internal System, External System, or
Licensed System.
(5) "Year-2000 Compliant" shall mean, with respect to each
System, that such System is designed to be used before,
during, and after the calendar year 2000 A.D. and will
accurately accept date input and process, store, and output
date data and date-related data, including, without
limitation, calculating, comparing, sorting, and sequencing
such data and calculating leap years before, during, and
after the calendar year 2000 A.D. without any manual
intervention.
5.32 DISCLOSURE. All Documents delivered or to be delivered by or
on behalf of Company in connection with this Agreement and the transactions
contemplated hereby are true, complete and correct. Neither this Agreement,
nor any of the other Documents contains any untrue statement of a material
fact or omits a material fact necessary to make the statements made by
Company herein or therein, in light of the circumstances in which made, not
misleading. There is no fact known to Company which materially and adversely
affects the business, prospects or financial condition of Company or its
properties or assets, which has not been set forth in the Documents.
5.33 TAX AND REGULATORY MATTERS. Neither Company nor any Affiliate
thereof has any knowledge of any fact or circumstance that is reasonably
likely to (i) prevent the Merger from qualifying as a reorganization within
the meaning of Section 368(a) of the Code, or (ii) materially impede or delay
receipt of any consents of any federal, state, county, local or other
governmental or regulatory agencies having jurisdiction over the parties or
result in the imposition of a condition or restriction of the type referred
to in the last sentence of Section 9.1(a).
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
Each of the Shareholders represents and warrants to Parent as follows:
6.1 OWNERSHIP OF SHARES. Each Shareholder individually represents and
warrants as to herself, himself or itself (a) that such Shareholder owns the
shares of Company Common Stock listed opposite such Shareholder's name on
SCHEDULE 6.1
hereto, free and clear of all pledges, security interests, liens, charges,
encumbrances, equities, claims, options or limitations of every kind
("Claims"), and (b) that the delivery to Parent of the Common Stock pursuant
to the provisions of this Agreement will transfer to Parent valid title
thereto, free and clear of all Claims.
6.2 AUTHORITY AND APPROVAL; NO BREACH BY AGREEMENT. Each
Shareholder individually represents and warrants as to herself, himself or
itself (a) that such Shareholder has full legal power, capacity and authority
to execute, deliver and perform this Agreement and the other Documents and to
consummate the transactions contemplated hereby and thereby. This Agreement
and the other Documents have been duly and validly executed and delivered by
such Shareholder and constitute valid and binding obligations of such
Shareholder, enforceable against such Shareholder in accordance with their
terms. To the best knowledge of the Shareholders, no notice to, filing with,
or consent of, any public body or authority or other Person is necessary for
the consummation by such Shareholder of the transactions contemplated in this
Agreement. Execution of this Agreement by such Shareholder shall constitute
such Shareholder's written consent to approval of this Agreement and Plan of
Merger in such Shareholder's capacity as a holder of shares of Company Common
Stock, and such Shareholder hereby waives receipt of any further notice of
the Merger, including notice of the availability of dissenters' rights.
6.3 PURCHASE FOR INVESTMENT; RESTRICTED SECURITIES. Each
Shareholder individually represents and warrants as to himself (a) that such
Shareholder is acquiring shares of Parent Common Stock for investment and not
with a present view toward, or for sale in connection with, any distribution
thereof, nor with any present intention of distributing or selling the shares
of Parent Common Stock so acquired; (b) that such Shareholder has no present
plan or intention to sell, exchange or otherwise dispose of any of the shares
of Parent Common Stock received in the Merger; and (c) such Shareholder
acknowledges that (i) the shares of Parent Common Stock are not and will not
be registered under the Securities Act of 1933, as amended (the "1933 Act"),
and (ii) that Parent does not file periodic reports with the Securities and
Exchange Commission ("Commission") pursuant to the requirements of Section 12
or 15(d) of the Securities Exchange Act of 1934, as amended ("Exchange Act").
6.4 BROKER'S OR FINDER'S FEES. Except as set forth on SCHEDULE
6.4, no agent, broker, person or firm acting on behalf of the Shareholders or
Company is, or will be, entitled to any commission or broker's or finder's
fees from the Shareholders or Company, or from any person controlling,
controlled by or under common control with the Shareholders or Company, in
connection with any of the transactions contemplated herein.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent hereby represents and warrants to Company and the Shareholders
as follows:
7.1 ORGANIZATION. Parent is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada, duly
qualified to transact business as a foreign corporation in each jurisdiction
in which the failure to so qualify would have a material adverse impact on
Parent's ability to perform its obligations under this Agreement.
7.2 CORPORATE POWER AND AUTHORITY. Parent has the corporate power
and authority to execute, deliver and perform this Agreement and the other
Documents. The execution, delivery and performance of the Documents
contemplated hereby and the consummation of the transactions contemplated
hereby and thereby have been duly authorized and approved by all necessary
corporate action of Parent. The Documents to be executed and delivered by
Parent have been duly executed and delivered by, and constitute the legal,
valid and binding obligations of Parent enforceable against Parent in
accordance with their terms.
7.3 VALIDITY, ETC. Neither the execution and delivery by Parent of
this Agreement and the other Documents, the consummation by Parent of the
transactions contemplated hereby or thereby, nor the performance by Parent of
this Agreement and such other agreements in compliance with the terms and
conditions hereof and thereof will (i) violate, conflict with or result in
any breach of any trust agreement, articles of incorporation, bylaw,
judgment, decree, order, statute or regulation applicable to Parent, (ii)
violate, conflict with or result in a breach of or default (or give rise to
any right of termination, cancellation or acceleration) under any law, rule
or regulation or any judgment, decree, order, governmental permit, license or
order or any of the terms, conditions or provisions of any mortgage,
indenture, note, license, agreement or other instrument to which Parent is a
party, or (iii) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Parent.
7.4 DISCLOSURE. All Documents delivered or to be delivered by or
on behalf of Parent in connection with this Agreement and the transactions
contemplated hereby are true, complete and correct. Neither this Agreement,
nor any of the other Documents contains any untrue statement of a material
fact or omits a material fact necessary to make the statements made by Parent
herein or therein, in light of the circumstances in which made, not
misleading. There is no fact known to Parent which may have a material
adverse effect on Parent's ability to pay its obligations under this
Agreement, which has not been set forth in the Documents.
7.5 CAPITAL STOCK. The authorized capital stock of Parent consists
of 50,000,000 shares of Parent Common Stock, of which 10,400,000 shares were
issued and outstanding as of April 15, 1998. All of the issued and
outstanding shares of Parent Capital Stock are, and all of the shares of
Parent Common Stock to be issued in exchange for shares of Company Common
Stock upon consummation of the Merger, when issued in accordance with the
terms of this Agreement, will be, duly and validly issued and
outstanding and fully paid and nonassessable. None of the outstanding shares
of Parent Capital Stock has been, and none of the shares of Parent Common
Stock to be issued in exchange for shares of Company Common Stock upon
consummation of the Merger will be, issued in violation of any preemptive
rights of the current or past shareholders of Parent.
7.6 AUTHORITY OF SUB. Sub is a corporation duly organized, validly
existing and in good standing under the laws of the State of California as a
wholly owned subsidiary of Parent. The authorized capital stock of Sub
consists of 1,000 shares of Sub Common Stock, all of which is validly issued
and outstanding, fully paid and nonassessable and is owned by Parent free and
clear of any Claims. Sub (a) has the corporate power and authority to
execute, deliver and perform this Agreement and the other Documents and to
consummate the transactions contemplated hereby and thereby and (b) has taken
all necessary corporate and shareholder action to authorize and approve the
execution, delivery and performance of this Agreement and the other Documents
and the consummation of the transactions contemplated hereby and thereby.
This Agreement and the other Documents have been duly and validly executed
and delivered by Sub and constitute valid and binding obligations of Sub,
enforceable against Sub in accordance with their terms.
7.7 DISCLOSURE STATEMENT. Parent's Disclosure Statement, dated
April 17, 1998 and as supplemented on April 21, 1998, which has been
previously delivered to the Shareholders is true, complete and correct in all
material respects.
7.8 TAX AND REGULATORY MATTERS. Neither Parent nor any Affiliate
thereof has any knowledge of any fact or circumstance that is reasonably
likely to (i) prevent the Merger from qualifying as a reorganization within
the meaning of Section 368(a) of the Code, or (ii) materially impede or delay
receipt of any consents of any federal, state, county, local or other
governmental or regulatory agencies having jurisdiction over the parties or
result in the imposition of a condition or restriction of the type referred
to in the last sentence of Section 9.1(a).
7.9 BROKER'S OR FINDER'S FEES. Except as set forth on SCHEDULE
7.9, no agent, broker, person or firm acting on behalf of Parent is, or will
be, entitled to any commission or broker's or finder's fees from Parent, or
from any person controlling, controlled by or under common control with
Parent, in connection with any of the transactions contemplated herein.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 FILINGS WITH STATE OFFICES. Upon the terms and subject to the
conditions of this Agreement, Company shall and Parent shall cause Sub to
execute and file the Agreement of Merger with the California Secretary of
State in connection with the Closing.
8.2 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms
and conditions of this Agreement, each party hereto agrees to use its
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, all things reasonably necessary, proper, or advisable under
applicable laws to consummate and make effective, as soon as reasonably
practicable after the date of this Agreement, the transactions contemplated
by this Agreement, including using its reasonable efforts to lift or rescind
any order adversely affecting its ability to consummate the transactions
contemplated herein and to cause to be satisfied the conditions referred to
in Article 9; provided, that nothing herein shall preclude either party
hereto from exercising its rights under this Agreement. Each party hereto
shall use its reasonable efforts to obtain all consents necessary or
desirable for the consummation of the transactions contemplated by this
Agreement.
8.3 INVESTIGATION AND CONFIDENTIALITY.
(a) Prior to the Effective Time, each party hereto shall
keep the other party advised of all material developments relevant to its
business and to consummation of the Merger and shall permit the other party
to make or cause to be made such investigation of the business and properties
of it and of its financial and legal conditions as the other party reasonably
requests, provided that such investigation shall be reasonably related to the
transactions contemplated hereby and shall not interfere unnecessarily with
normal operations. No investigation by a party shall affect the
representations and warranties of the other party.
(b) Each party hereto shall, and shall cause its advisers
and agents to, maintain the confidentiality of all confidential information
furnished to it by the other party concerning its and its subsidiaries'
businesses, operations, and financial positions and shall not use such
information for any purpose except in furtherance of the transactions
contemplated by this Agreement. For purposes hereof, the term "confidential
information" does not include any information which at the time of disclosure
to the receiving party was or thereafter became publicly available or a
matter of public knowledge, without a breach of this Agreement by the
receiving party, or was disclosed by the receiving party pursuant to a
requirement of law, or in response to a court order, subpoena or governmental
authority.
8.4 PRESS RELEASES. Prior to the Effective Time, Company and
Parent shall consult with each other as to the form and substance of any
press release or other public disclosure materially related to this Agreement
or any other transaction contemplated hereby; provided, that nothing in this
Section 8.4 shall be deemed to prohibit any party from making any disclosure
which its counsel deems necessary or advisable in order to satisfy such
party's disclosure obligations imposed by law.
8.5 NO SOLICITATION. Except with respect to this Agreement and the
transactions contemplated hereby, neither Company, nor any Shareholder, shall
solicit or enter into discussions with any third party, until the Effective
Date, (a) to purchase any
shares of capital stock of Company or an option or warrant to purchase shares
of such capital stock or any securities convertible into such capital stock,
(b) to make an offer of any kind for any shares of such capital stock, (c)
purchase all or a substantial portion of the assets of Company or (d) to
merge, consolidate, engage in a share exchange or otherwise combine with
Company.
8.6 SHAREHOLDER RELEASES. Each Shareholder hereby releases and
forever discharges Company and its officers, directors, employees and
insurers, and their respective successors and assigns, and each of them
(hereinafter individually and collectively, the "Releasees") of and from any
and all claims, demands, debts, accounts, covenants, agreements, obligations,
costs, expenses, actions or causes of action of every nature, character or
description, now accrued or which may hereafter accrue, without limitation of
law, equity or otherwise, based in whole or in part on any facts, conduct,
activities, transactions, events or occurrences known or unknown, which have
or allegedly have existed, occurred, happened, arisen or transpired from the
beginning of time to the Effective Time; excluding, however, (i) claims
arising under this Agreement and the transactions contemplated hereby, and
(ii) compensation and other employee benefits accrued but not yet payable as
reflected on the books and records of Company (the "Released Claims"). Each
Shareholder represents and warrants that no Released Claim released herein
has been assigned, expressly, impliedly, or by operation of law, and that all
Released Claims of such Shareholder released herein are owned by such
Shareholder, who has the sole authority to release them. Each Shareholder
agrees that such holder shall forever refrain and forebear from commencing,
instituting or prosecuting any lawsuit action or proceeding, judicial,
administrative, or otherwise, or otherwise attempting to collect or enforce
any Released Claims which are released and discharged herein.
8.7 ACCOUNTING AND TAX TREATMENT. Each party undertakes and agrees
to use its reasonable efforts to cause the Merger to qualify for treatment as
a "reorganization" within the meaning of Section 368(a), including Section
368(a)(1)(A) and (a)(2)(D), of the Code for federal income tax purposes, and
each party covenants and agrees that each representation made by such party
in the certificates executed by or on behalf of such party and attached to
the tax opinion of Xxxxxx & Xxxxxxxx referred to in Section 9.1(c) is true
and correct. Notwithstanding the foregoing, no party shall have any liability
to any other party in the event the Merger ultimately is determined not to
qualify as a "reorganization" within the meaning of Section 368(a) of the
Code as a result of a breach of any covenant or representation in such
certificates by the Shareholders.
8.8 CHARTER PROVISIONS. Company shall take all necessary action to
ensure that the entering into of this Agreement and the consummation of the
Merger and the other transactions contemplated hereby do not and will not
result in the grant of any rights to any Person under the Articles of
Incorporation, Bylaws or other governing instruments of Company or restrict
or impair the ability of Parent or any of its subsidiaries to vote, or
otherwise to exercise the rights of a shareholder with respect to, shares of
Company that may be directly or indirectly acquired or controlled by them.
8.9 CERTAIN TAX RETURNS OF COMPANY. The Shareholders shall cause
to be prepared and filed all income tax returns and the payment of all income
taxes, calculated on a cash basis, of Company for the tax year ending on the
Effective Date . Parent and Company (and not the Shareholders) shall be
responsible for the preparation and filing of all income tax returns and the
payment of all income taxes of Company for its tax year beginning on the day
after the Effective Date and all subsequent periods.
8.10 LANDLORD CONSENTS. The Shareholders shall, on or before the
expiration of thirty (30) days after the Effective Date, use their best
efforts to cause the Company to obtain from its landlords (to the extent
required under the pertinent premises lease) written consent to the
assignment of said leases to the Buyer which assignment is deemed to have
resulted from the transactions contemplated by this Agreement.
8.11 SECURITIES ACT COMPLIANCE.
(a) As long as Parent is not subject to the reporting requirements
of the Exchange Act, Parent will comply with the "Current Public Information"
provisions of Rule 144(c)(2) and such other provisions as may be reasonably
necessary and appropriate to permit Shareholders to sell Parent Common Stock
under Rule 144 and other applicable rules and regulations promulgated by the
Commission.
(b) Parent covenants that, if it becomes subject to the periodic
reporting requirements of Section 13 or 15(d) of the Exchange Act, it will
file on a timely basis the reports required to be filed by Parent under the
1933 Act and the Exchange Act, and the rules and regulations adopted by the
Commission thereunder; and it will take such further action as any
Shareholder or any Shareholder's successors or assigns (each a "Holder") may
reasonably request, all to the extent required from time to time to enable
such Holder to sell the Parent Common Stock without registration under the
1933 Act within the limitation of the exemptions provided by (i) Rule 144
under the 1933 Act, as such Rule may be amended from time to time, or (ii)
any similar rule or regulation hereafter adopted by the Commission. Upon the
reasonable request of any Holder, Parent will deliver to such Holder a
written statement as to the status of the filings made by Parent with the
Commission with copies of such filings.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective
obligations of each party to perform this Agreement and consummate the Merger
and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by both parties:
(a) CONSENTS AND APPROVALS. Each party shall have obtained any
and all consents required for consummation of the Merger or for the
preventing of any default under any contract or permit of such party
which, if not obtained or made, is reasonably likely to have,
individually or in the aggregate, a material adverse
effect on such party. No consent so obtained which is necessary to
consummate the transactions contemplated hereby shall be conditioned or
restricted in a manner which in the reasonable judgment of the Board of
Directors of Parent or of the Shareholders would so materially adversely
impact the economic or business benefits of the transactions contemplated
by this Agreement that, had such condition or requirement been known,
such party would not, in its reasonable judgment, have entered into this
Agreement.
(b) LEGAL PROCEEDINGS. No court or governmental or regulatory
authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any law or order (whether temporary,
preliminary or permanent) or taken any other action which prohibits,
restricts or makes illegal consummation of the transactions contemplated
by this Agreement.
(c) TAX MATTERS. Each party shall have received a written
opinion of counsel from Xxxxxx & Xxxxxxxx, in form reasonably
satisfactory to such parties (the "Tax Opinion"), to the effect that (i)
the Merger will constitute a reorganization within the meaning of Section
368(a) of the Code, (ii) the exchange in the Merger of Company Common
Stock for Parent Common Stock will not give rise to gain or loss to the
shareholders of Company with respect to such exchange (except with
respect to any cash received), and (iii) none of Company, Sub or Parent
will recognize gain or loss as a consequence of the Merger (except for
amounts resulting from any required change in accounting methods). In
rendering such Tax Opinion, such counsel shall be entitled to rely upon
representations of officers of Company, the Shareholders and Parent
reasonably satisfactory in form and substance to such counsel.
9.2 CONDITIONS TO OBLIGATIONS OF PARENT. The obligations of Parent
to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by Parent:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Company and the Shareholders herein contained shall be true
in all respects as stated herein, both when made and with the same effect
as though made again as of the Effective Time except to the extent of
changes permitted by the terms of this Agreement. Company and the
Shareholders shall have performed all obligations and complied with all
covenants required by this Agreement to be performed or complied with by
Company and the Shareholders prior to the Effective Time.
(b) CERTIFICATES. Company and the Shareholders shall have
delivered to Parent (i) a certificate, dated as of the Effective Time and
signed on Company's behalf by its President/Secretary/Chief Financial
Officer and Vice President and signed by each Shareholder, to the effect
that the conditions set forth in Section 9.1 as relates to Company and
the Shareholders and in Section 9.2(a) have been
satisfied, and (ii) certified copies of resolutions duly adopted by
Company's Board of Directors and shareholders evidencing the taking of
all corporate action necessary to authorize the execution, delivery and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, all in such reasonable detail as Parent and its
counsel shall request.
(c) TAX CLEARANCE. Company shall have delivered to Parent a
certificate of satisfaction from the California Franchise Tax Board
stating that all taxes imposed by the California Bank and Corporation Tax
Law have been paid or secured in a form acceptable to Parent and the
California Secretary of State in accordance with Section 1103 of the
CGCL.
9.3 CONDITIONS TO OBLIGATIONS OF COMPANY AND SHAREHOLDERS. The
obligations of Company and the Shareholders to perform this Agreement and
consummate the Merger and the other transactions contemplated hereby are
subject to the satisfaction of the following conditions, unless waived by
Company:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Parent herein contained shall be true in all respects as
stated herein, both when made and with the same effect as though made
again as of the Effective Time except to the extent of changes permitted
by the terms of this Agreement. Parent shall have performed all
obligations and complied with all covenants required by this Agreement to
be performed or complied with by Parent prior to the Effective Time.
(b) CERTIFICATES. Parent shall have delivered to Company and
the Shareholders (i) a certificate, dated as of the Effective Time and
signed on its behalf by its President and Secretary, to the effect that
the conditions set forth in Section 9.1 as relates to Parent and in
Section 9.3(a) have been satisfied, and (ii) certified copies of
resolutions duly adopted by Parent's Board of Directors and Sub's Board
of Directors and sole shareholder evidencing the taking of all corporate
action necessary to authorize the execution, delivery and performance of
this Agreement, and the consummation of the transactions contemplated
hereby, all in such reasonable detail as Company, Shareholders and their
counsel shall request.
ARTICLE 10
INDEMNIFICATION
10.1 SURVIVAL. Except as set forth on SCHEDULE 3.6 hereto, all
representations and warranties in this Agreement and the other Documents
shall survive the Merger and any investigation at any time made by or on
behalf of any party for a period of three years and all such representations
and warranties shall expire on the third anniversary of the Effective Date,
except that (a) claims, if any, asserted in writing prior to such third
anniversary identified as a claim for indemnification pursuant to this
Article 10 shall
survive until finally resolved and satisfied in full; and (b) tax or
environmental claims arising from a breach of Section 5.27 or Section 5.29,
respectively, shall survive for the full period of the applicable statute of
limitations, and until finally resolved and satisfied in full if asserted on
or prior to the expiration of any such period. The representations and
warranties shall not be affected or otherwise diminished by any investigation
at any time by or on behalf of the party for whose benefit such
representations and warranties were made.
10.2 INDEMNIFICATION BY COMPANY AND SHAREHOLDERS. Subject to the
terms herein, Company and the Shareholders shall jointly and severally
indemnify, defend, and hold Parent and the respective officers, directors,
and employees of Parent, and their successors and assigns (the "Shareholders'
Indemnitees") harmless from, against and with respect to any claim,
liability, obligation, loss, damage, assessment, judgment, cost or expense of
any kind or character, including reasonable attorneys' fees (the "Damages"),
arising out of or in any manner incident, relating or attributable to:
(a) Any inaccuracy in any representation or breach of any
warranty of Company or the Shareholders contained in this
Agreement;
(b) Any failure by Company or the Shareholders to perform or
observe, or to have performed or observed, in full, any
covenant, agreement or condition to be performed or
observed by it under this Agreement;
(c) Reliance by Parent on any books or records of Company or
written information furnished to Parent pursuant to this
Agreement by or on behalf of Company or the Shareholders in
the event that such books and records or written
information are false or otherwise materially inaccurate;
or
(d) Liabilities or obligations of, or claims against, Company
or Parent (whether absolute, accrued, contingent or
otherwise) relating to, or arising out of, the operation of
the business prior to the Effective Time or facts and
circumstances relating specifically to the business, the
Leased Parcels, or Company existing at or prior to the
Effective Time, including but not limited to matters set
forth on SCHEDULE 5.26 and SCHEDULE 5.28, whether or not
such liabilities, obligations or claims were known on such
date, excluding only liabilities set forth in the Balance
Sheet and liabilities and obligations incurred since the
date thereof in the ordinary course of business and
consistent with past practice.
Provided, however, the Shareholders' Indemnitees shall not be entitled
to indemnification or offset hereunder until Damages in total exceed $25,000
and then only to the extent of aggregate Damages in excess of $25,000;
PROVIDED FURTHER, HOWEVER, such deductible shall not apply to any Damages
arising from a breach of Sections 5.27, 5.28,
5.29, 6.1, or 6.2, respectively. The Shareholders' maximum liability under
this Section 10.2 is set forth on SCHEDULE 3.6 hereto.
10.3 NOTICE TO SHAREHOLDERS, ETC. If any of the matters as to which
the Shareholders' Indemnitees are entitled to receive indemnification under
Section 10.2 should entail litigation with or claims asserted by parties
other than Company, Shareholders shall be given prompt notice thereof and
shall have the right, at the Shareholders' expense, to control such claim or
litigation upon prompt notice to Parent of his election to do so. To the
extent requested by Shareholders, Parent, at its expense, shall cooperate
with and assist Shareholders, in connection with such claim or litigation.
Parent shall have the right to appoint, at its expense, single counsel to
consult with and remain advised by the Shareholders in connection with such
claim or litigation. Shareholders shall have final authority to determine all
matters in connection with such claim or litigation; PROVIDED, HOWEVER, that
Shareholders shall not settle any third party claim without the consent of
Parent, which shall not be unreasonably denied or delayed.
10.4 INDEMNIFICATION BY PARENT. Parent shall indemnify, defend, and
hold the Shareholders and their heirs, executors and legal representatives
("Parent's Indemnitees") harmless from, against and with respect to any
Damages, arising out of or in any manner incident, relating or attributable
to:
(a) Any inaccuracy in any representation or breach of warranty
of Parent contained in this Agreement;
(b) Any failure by Parent to perform or observe, or to have
performed or observed, in full, any covenant, agreement or
condition to be performed or observed by it under any of
the Documents;
(c) Reliance by the Shareholders on any books or records of
Parent or reliance by the Shareholders on any written
information furnished to the Shareholders or Company
pursuant to this Agreement by or on behalf of Parent in the
event that such books and records or written information
are false or otherwise materially inaccurate; and
(d) The operation of Company subsequent to the Effective Time.
Provided, however, Parent's Indemnitees shall not be entitled to
indemnification hereunder until Damages in total exceed $25,000 and then only
to the extent of aggregate damages in excess of $25,000. Parent's maximum
liability under this Section 10.4 is set forth on SCHEDULE 3.6 hereto.
10.5 NOTICE TO PARENT, ETC. If any of the matters as to which
Parent's Indemnitees are entitled to receive indemnification under Section
10.4 should entail litigation with or claims asserted by parties other than
Parent, Parent shall be given prompt notice thereof and shall have the right,
at its expense, to control such claim or
litigation upon prompt notice to the Shareholders of its election to do so.
To the extent requested by Parent, Shareholders, at the expense of the
Shareholders, shall cooperate with and assist Parent, in connection with such
claim or litigation. Shareholders shall have the right to appoint, at their
expense, single counsel to consult with and remain advised by Parent in
connection with such claim or litigation. Parent shall have final authority
to determine all matters in connection with such claim or litigation;
PROVIDED, HOWEVER, that Parent shall not settle any third party claim without
the consent of Shareholders, which shall not be unreasonably denied or
delayed.
10.6 SURVIVAL OF INDEMNIFICATION. Except as set forth on Schedule
3.6 hereto, the obligations to indemnify and hold harmless pursuant to this
Article 10 shall survive the Effective Time of the Merger, for a period of
three years, notwithstanding any investigation at any time made by or on
behalf of any party, except that (a) claims, if any, asserted in writing
prior to such third anniversary identified as a claim for indemnification
pursuant to this Article 10 shall survive until finally resolved and
satisfied in full; and (b) tax or environmental claims arising from a breach
of Section 5.27 or Section 5.29, respectively, shall survive for the full
period of the applicable statute of limitations, and until finally resolved
and satisfied in full if asserted on or prior to the expiration of any such
period.
10.7 OFFSET. The Shareholders acknowledge and agree that Parent
shall be entitled to offset any indemnity claim under Section 10.2 against
any payment due to Shareholders under Section 3.6 hereunder. Neither the
exercise of nor the failure to give a notice of a Claim shall constitute an
election of remedies nor limit an Indemnitee in any manner in the enforcement
of any other remedies that may be available to it.
ARTICLE 11
MISCELLANEOUS
11.1 KNOWLEDGE OF COMPANY. Where any representation or warranty
contained in this Agreement is expressly qualified by reference to the best
knowledge of Company, Company confirms that it has made due and diligent
inquiry of its President and Vice President as to the matters that are the
subject of such representation and warranty.
11.2 KNOWLEDGE OF PARENT. Where any representation or warranty
contained in this Agreement is expressly qualified by reference to the best
of knowledge of Parent, Parent confirms that it has made due and diligent
inquiry of its President and other officers as to the matters that are the
subject of such representations and warranties.
11.3 "PERSON" DEFINED. "Person" shall mean and include an
individual, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or other department or agency
thereof.
11.4 NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing, shall be addressed to the
receiving party's address set forth below or to such other address as a party
may designate by notice hereunder, and shall be either (i) delivered by hand,
(ii) sent by recognized overnight courier, (iii) made by telecopy or
facsimile transmission, or (iv) sent by registered or certified mail, return
receipt requested, postage prepaid.
If to Parent:
ThermoView Industries, Inc.
0000 Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, President
Fax No: (000) 000-0000
With a copy to:
Xxxxxx & Xxxxxxxx
000 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
Fax No: (000) 000-0000
If to Company:
American Home Developers Co., Inc.
00000 Xxxxxxx Xxxx., Xxxxx 000
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: President
Fax No: (000) 000-0000
If to Shareholders:
Sim Xxxxx and Xxxxx Xxxxx 1989 Trust
c/o Sim Xxxxx
00000 Xxxxxxx Xxxx., Xxxxx 000
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Fax No: (000) 000-0000
and
Xxxx X. Xxxxxxx
00000 Xxxxxxx Xxxx., # 000
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Fax No: (000) 000-0000
With a copy to:
Xxxxx Xxxxxxx Xxxxxx & Xxxxxx LLP
00000 Xxxxx Xxxxxx Xxxx., Xxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxx, Esq.
Fax No: (000) 000-0000
All notices, requests, consents and other communications hereunder shall be
deemed to have been given (i) if by hand, at the time of the delivery thereof
to the receiving party at the address of such party set forth above, (ii) if
sent by overnight courier, on the next business day following the day such
notice is delivered to the courier service, (iii) if made by telecopy or
facsimile transmission, at the time that receipt thereof has been
acknowledged by electronic confirmation or otherwise, or (iv) if sent by
registered or certified mail, on the fifth business day following the day
such mailing is sent. The address of any party herein may be changed at any
time by written notice to the parties.
11.5 ENTIRE AGREEMENT. This Agreement and the other Documents
embody the entire agreement and understanding between the parties hereto with
respect to the subject matter hereof and supersede all prior oral or written
agreements and understandings relating to the subject matter hereof. No
statement, representation, warranty, covenant or agreement of any kind not
expressly set forth in the other Documents shall affect, or be used to
interpret, change or restrict, the express terms and provisions of this
Agreement.
11.6 MODIFICATIONS AND AMENDMENTS. The terms and provisions of this
Agreement may be modified or amended only by written agreement executed by
all parties hereto.
11.7 ASSIGNMENT/BINDING EFFECT. Neither this Agreement, nor any
right hereunder, may be assigned by any of the parties hereto without the
prior written consent of the other parties. This Agreement shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
heirs, personal representatives, successors and permitted assigns.
11.8 PARTIES IN INTEREST. Nothing in this Agreement, express or
implied, is intended to confer upon any other person any rights or remedies
of any nature whatsoever under or by reason of this Agreement. Nothing in
this Agreement shall be construed to create any rights or obligations except
among the parties hereto, and no person or entity shall be regarded as a
third-party beneficiary of this Agreement.
11.9 GOVERNING LAW. This Agreement and the rights and obligations
of the parties hereunder shall be construed in accordance with and governed
by the internal laws of the State of California without giving effect to the
conflict of law principles thereof.
11.10 ARBITRATION. The parties hereto agree that any and all
disputes, claims or controversies arising out of or relating to this
Agreement that are not resolved by mutual agreement shall be submitted to
final and binding arbitration before JAMS/ENDISPUTE, or its successor,
pursuant to the United States Arbitration Act, 9 U.S.C. Sec. 1 et seq.
Either party may commence the arbitration process called for in this
Agreement by filing a written demand for arbitration with JAMS/ENDISPUTE,
with a copy to the other party. The arbitration will be conducted in
accordance with the provisions of JAMS/ENDISPUTE's COMPREHENSIVE ARBITRATION
RULES AND PROCEDURES in effect at the time of filing of the demand for
arbitration. The parties will cooperate with JAMS/ENDISPUTE and with one
another in selecting an arbitrator from JAMS/ENDISPUTE's panel of neutrals,
and in scheduling the arbitration proceedings. The parties covenant that
they shall participate in the arbitration in good faith, and that they shall
share equally in its costs. The provisions of this Section may be enforced
by any Court of competent jurisdiction, and the party seeking enforcement
shall be entitled to an award of all costs, fees and expenses, including
attorneys fees, to be paid by the party against whom enforcement is ordered.
All arbitration proceedings shall be held in Los Angeles, California.
11.11 SEVERABILITY. In the event that any arbitral tribunal of
competent jurisdiction shall finally determine that any provision, or any
portion thereof, contained in this Agreement shall be void or unenforceable
in any respect, then such provision shall be deemed limited to the extent
that such arbitral tribunal determines it enforceable, and as so limited
shall remain in full force and effect. In the event that such arbitral
tribunal shall determine any such provision, or portion thereof, wholly
unenforceable, the remaining provisions of this Agreement shall nevertheless
remain in full force and effect.
11.12 INTERPRETATION. The parties hereto acknowledge and agree that:
(i) the rule of construction to the effect that any ambiguities are resolved
against the drafting party shall not be employed in the interpretation of
this Agreement, and (ii) the terms and provisions of this Agreement shall be
construed fairly as to all parties hereto and not in favor of or against any
party, regardless of which party was generally responsible for the
preparation of this Agreement.
11.13 HEADINGS AND CAPTIONS. The headings and captions of the
various subdivisions of this Agreement are for convenience of reference only
and shall in no way modify, or affect, or be considered in construing or
interpreting the meaning or construction of any of the terms or provisions
hereof.
11.14 RELIANCE. The parties hereto agree that, notwithstanding any
right of any party to this Agreement to investigate the affairs of any other
party to this Agreement, the party having such right to investigate shall
have the right to rely fully upon the representations and warranties of the
other party expressly contained herein.
11.15 EXPENSES. Each party shall pay its own fees and expenses
(including the fees of any attorneys, accountants, appraisers or others
engaged by such party) incurred
in connection with this Agreement and the transactions contemplated hereby
whether or not the transactions contemplated hereby are consummated.
11.16 GENDER. All pronouns and any variation thereof shall be deemed
to refer to the masculine, feminine, neuter, singular, or plural as the
identity of the person or entity or the context may require.
11.17 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by different parties hereto on separate counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed on its behalf as of the day and year first above written.
THERMOVIEW INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------
Xxxxxxx X. Xxxxxxxx, President
THERMOVIEW MERGER CORP.
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------
Xxxxxxx X. Xxxxxxxx, President
AMERICAN HOME DEVELOPERS CO., INC.
By: /s/ Sim Xxxxx
---------------------------------------
Sim Xxxxx, President
SHAREHOLDERS:
/s/ Sim Xxxxx
-------------------------------------------
Sim Xxxxx, as co-trustee of the Sim Xxxxx
and Xxxxx Xxxxx 1989 Trust
/s/ Xxxxx Xxxxx
-------------------------------------------
Xxxxx Xxxxx, as co-trustee of the Sim Xxxxx
and Xxxxx Xxxxx 1989 Trust
/s/ Xxxx Xxxxxxx
-------------------------------------------
Xxxx Xxxxxxx
