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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
among
BIRCH TELECOM, INC.,
VALU-LINE COMPANIES, INC.,
XXXXXXX X. XXXXXX,
XXXXX X. XXXXXX,
XXXXXXX X. XXXXXXX,
XXXXX X. XXXXXXX,
XXXXXX XXXXXXX,
and
XXXXX X. XXXXXXX
January 15, 1998
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement") is entered into as of
January 15, 1998, by and among BIRCH TELECOM, INC., a Delaware corporation
("Birch"), VALU-LINE COMPANIES, INC., a Kansas corporation ("Valu-Line"),
XXXXXXX X. XXXXXX, the principal stockholder of Valu-Line, and XXXXX X. XXXXXX,
his spouse (collectively, "Xxxxxx"), XXXXXXX X. XXXXXXX, a stockholder of
Valu-Line, and XXXXX X. XXXXXXX, his spouse (collectively, "Xxxxxxx"), and
XXXXXX XXXXXXX, a stockholder of Valu-Line, and XXXXX X. XXXXXXX, his spouse
(collectively, "Supiran"). Sauder, Tidwell, and Supiran are individually
referred to as a "Stockholder" and collectively referred to as the
"Stockholders."
The parties desire to adopt a plan of reorganization pursuant to
Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the
"Code"), pursuant to which Valu-Line will be merged with and into Birch in
accordance with the applicable provisions the Delaware General Corporation Law,
the Kansas General Corporation Law, and the terms of this Agreement.
Now, therefore, the parties agree as follows:
1. THE MERGER.
1.1 THE MERGER. On and subject to the terms and conditions of this
Agreement, and in accordance with the Delaware General Corporation Law (the
"DGCL") and the Kansas General Corporation Law (the "KGCL"), as applicable,
Valu-Line shall merge with and into Birch (the "Merger") at the Effective Time
(as defined below). At the Effective Time, the separate existence of Valu-Line
shall cease, and Birch shall continue as the surviving corporation (the
"Surviving Corporation").
1.2 THE CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Xxxxxxx Xxxx Xxxxx
& Xxxxxx, LLP, 0000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx Xxxx, Xxxxxxxx 00000,
commencing at 10:00 a.m. local time on the second business day following the
satisfaction or waiver of all conditions to the obligations of the parties to
consummate the transactions contemplated by this Agreement (other than
conditions with respect to actions the respective parties will take at the
Closing itself) or such other date as the parties may mutually determine (the
"Closing Date").
1.3 ACTIONS AT THE CLOSING. At the Closing, (i) Valu-Line and the
Stockholders will deliver to Birch the various certificates, instruments, and
documents referred to in Section 4.6, (ii) Birch will deliver to Valu-Line or
the Stockholders the various certificates, instruments, and documents referred
to in Section 5.4, (iii) Birch and Valu-Line will file with the Secretary of
State of the States of Delaware and Kansas a Certificate of Merger in the form
attached hereto as EXHIBIT 1.3 (the "Certificate of Merger"), and (iv) Birch
will deliver to the stockholders of
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Valu-Line the consideration for the outstanding shares of Valu-Line capital
stock as set forth in Section 1.9.
1.4 EFFECTIVE TIME. The Merger shall become effective at the time (the
"Effective Time") Birch and Valu-Line file the Certificate of Merger with the
Secretary of State of the States of Delaware and Kansas. The Merger shall have
the effect set forth in the DGCL and KGCL. The Surviving Corporation may, at any
time after the Effective Time, take any action (including executing and
delivering any document) in the name and on behalf of either Birch or Valu-Line
in order to carry out and effectuate the transactions contemplated by this
Agreement.
1.5 CERTIFICATE OF INCORPORATION. The Amended and Restated Certificate
of Incorporation of Birch, in the form attached as EXHIBIT 1.5, shall be the
Certificate of Incorporation of the Surviving Corporation.
1.6 BYLAWS. The Bylaws of Birch in effect at and as of the Effective
Time will remain the Bylaws of the Surviving Corporation without any
modification or amendment in the Merger.
1.7 DIRECTORS. The directors of the Surviving Corporation from and
after the Effective Time will be the directors of Birch immediately prior to the
Effective Time and Xxxxxxx X. Xxxxxx. They shall serve until the earlier of
their resignation or removal or until their respective successors are duly
elected and qualified, as the case may be.
1.8 OFFICERS. The officers of the Surviving Corporation from and after
the Effective Time will be the officers of Birch immediately prior to the
Effective Time, and Xxxxxxx X. Xxxxxx, who shall become the Vice Chairman of the
Surviving Corporation. They shall serve until the earlier of their resignation
or removal or until their respective successors are duly elected and qualified,
as the case may be.
1.9 CONVERSION OF SHARES OF COMMON STOCK OF VALU-LINE. At the Effective
Time, each share of Valu-Line's common stock issued and outstanding immediately
prior to the Effective Time (the "Valu-Line Stock") shall, by virtue of the
Merger and without any action on the part of Valu-Line, Birch or any holder
thereof, be canceled and converted into the right to receive from the Surviving
Corporation a share of the Purchase Price, as set forth on SCHEDULE 1.9.
"Purchase Price" means (i) 2,968,750 shares of the Series A Preferred Stock of
Birch (the "Series A Preferred"); (ii) 6,250,000 shares of the Series C
Preferred Stock of Birch (the "Series C Preferred"), and (iii) $4,750,000,
payable in immediately available funds at the Closing.
2. REPRESENTATIONS AND WARRANTIES OF VALU-LINE AND THE STOCKHOLDERS. Valu-Line
and the Stockholders jointly and severally represent and warrant to Birch as
follows:
2.1. ORGANIZATION, QUALIFICATION, CORPORATE POWER AND AUTHORITY; EFFECT
OF
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AGREEMENT.
(a) Each of Valu-Line and its Subsidiaries (as defined below)
is a corporation duly organized, validly existing and in good standing
under the laws of the state of Kansas and each has all requisite
corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted. Each is duly
qualified or licensed as a foreign corporation to do business, and is
in good standing, in each jurisdiction in which the character of its
properties owned or leased or the nature of its activities makes such
qualification necessary. Copies of the Articles of Incorporation and
Bylaws of Valu-Line and its Subsidiaries are set forth in SCHEDULE 2.1,
and such copies are accurate and complete as of the date hereof. Also
set forth on SCHEDULE 2.1 is a list of each Subsidiary of Valu-Line,
together with the state of incorporation or organization of each
Subsidiary and the states where each of Valu-Line and the Subsidiaries
are qualified to do business. For purposes of this Agreement,
"Subsidiary" means, with respect to any corporation or entity
("Person"), any other corporation or other business entity in which
such Person owns, directly or indirectly, through one or more
subsidiaries, 50% or more of the voting or equity interests, or has the
power or authority to control such corporation or other business
entity; provided, however, that for the purposes of Valu-Line's
representations, warranties and covenants in this Agreement, the term
"Subsidiary" shall not include Valu-Broadcasting, Inc., a Kansas
corporation ("Valu-Broadcasting") or SS Property Management
Corporation, a Kansas corporation ("SS Property Management").
(b) Valu-Line has the requisite corporate power and authority
to enter into this Agreement and to consummate the transactions
contemplated by this Agreement. The execution, delivery and performance
by Valu-Line of this Agreement and the consummation by Valu-Line of the
transactions contemplated hereby have been duly authorized by all
necessary corporation action on the part of Valu-Line. This Agreement
has been duly and validly executed and delivered by Valu-Line and the
Stockholders and, assuming due execution and delivery by the other
parties thereto, constitutes the legal, valid and binding obligation of
Valu-Line and Stockholders, enforceable against them in accordance with
its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws relating
to creditors' rights generally and subject to general principles of
equity (regardless of whether enforcement is sought in a proceeding at
law or in equity). The execution, delivery and performance by Valu-Line
of this Agreement and the consummation by Valu-Line of the transactions
contemplated hereby will not, with or without the giving of notice or
the lapse of time, or both, (i) violate in any material respect any
provision of law, rule or regulation to which Valu-Line or any of its
Subsidiaries is subject, (ii) conflict with or violate in any material
respect (A) an order, judgment, injunction, award or decree applicable
to Valu-Line or any of its Subsidiaries, or (B) the Articles of
Incorporation, Bylaws or other similar governing documents of Valu-Line
or any of its Subsidiaries, (iii) except as set forth in Section 2.11,
conflict with, result in a breach or termination of, or constitute a
default (or constitute an event which with notice, lapse of time, or
both, would constitute a default,
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or give rise to any right of termination, cancellation or acceleration)
under, any written or oral contract, agreement, arrangement, permit,
license, qualification, franchise or commitment of any kind to which
Valu-Line or any of its Subsidiaries is a party, by which any of them
may be bound or under which any of them are entitled to any rights or
benefits, or (iv) result in the creation of any lien, charge or
encumbrance upon any of the assets or properties of any of Valu-Line or
any of its Subsidiaries.
2.2. CAPITALIZATION OF VALU-LINE AND SUBSIDIARIES. The authorized and
issued capital stock of Valu-Line and each of its Subsidiaries is set forth in
SCHEDULE 2.2. The Stockholders own, of record and beneficially all of the issued
shares of capital stock of Valu-Line in the amounts set forth on SCHEDULE 2.2.
Each of the outstanding shares of Valu-Line and each of its Subsidiaries is
validly issued, fully paid and non-assessable, and has not been issued and is
not owned or held in violation of any preemptive right of stockholders. All of
the capital stock of each Subsidiary of Valu-Line is owned by Valu-Line. All of
the shares of the Subsidiaries owned by Valu-Line are held free and clear of all
liens, pledges, encumbrances, charges, assessments or claims of any kind
whatsoever. No bonds, debentures, notes or other indebtedness of Valu-Line or
any of its Subsidiaries are issued or outstanding which are convertible into, or
exchangeable for, securities having the right to vote on any matters on which
the Stockholders of Valu-Line are entitled to vote. There are no commitments,
plans or arrangements to issue, and no options, warrants or other rights calling
for the issuance of, shares of capital stock of Valu-Line or any of its
Subsidiaries or for the sale or disposition by Valu-Line or any of its
Subsidiaries of any shares of capital stock of Valu-Line or any of its
Subsidiaries.
2.3. ABSENCE OF CERTAIN EVENTS. Except as set forth in SCHEDULE 2.3,
since November 30, 1997, up to and including the date of this Agreement,
Valu-Line has caused its business and the businesses of its Subsidiaries to be
operated in the ordinary course of business. Neither Valu-Line nor any of its
Subsidiaries has, except in the ordinary course of business, sold, transferred,
mortgaged, pledged or subjected to any lien, charge or encumbrance or any of the
Valu-Line Stock or any other material assets or properties of Valu-Line or its
Subsidiaries. In addition, except as set forth in SCHEDULE 2.3 or as reflected
in the Valu-Line Financial Statements (as defined in Section 2.4), there has not
been:
(a) any change or any development which is likely to result in
a material adverse change in the business, properties, assets,
financial condition, prospects or results of operations of Valu-Line
and its Subsidiaries;
(b) any change in accounting methods, principles or practices
by Valu-Line or its Subsidiaries affecting its or their assets,
liabilities or business;
(c) any writing off or determination to write off as
uncollectible any material amounts of notes or accounts receivable;
(d) any damage, destruction or loss by Valu-Line or its
Subsidiaries, whether
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covered by insurance or not, the replacement cost of which would
materially adversely affect the properties, business or financial
condition of Valu-Line or its Subsidiaries;
(e) any declaration, setting aside or payment of dividends or
distributions in respect of the Valu-Line Stock;
(f) any redemption of any of the capital stock of Valu-Line;
(g) any cancellation or waiver of a right materially related
to the operation of the business of Valu-Line or its Subsidiaries or
any modification or amendment of any commitment or the incurrence of
any material debt or obligation other than in the ordinary course of
business;
(h) any split, combination or reclassification of outstanding
Valu-Line Stock or any issuance or the authorization of any issuance of
any other securities in respect of, in lieu of or in substitution for
shares of outstanding Valu-Line Stock;
(i) any issuance by Valu-Line or any of its Subsidiaries of or
commitment of Valu- Line or any of its Subsidiaries to issue, any
shares of its capital stock or securities convertible into or
exchangeable for shares of its capital stock;
(j) any increase in salaries, bonuses or other benefits
payable, including the increase of, or an entry into, severance or
termination arrangements by Valu-Line or any of its Subsidiaries, other
than in the ordinary course of business consistent with past practice;
(k) any guarantee of any material debt or obligation of others
by Valu-Line or any of its Subsidiaries;
(l) any transaction, commitment, dispute or other event or
condition of any character (whether or not in the ordinary course of
business) individually or in the aggregate having or which in the
future is likely to have a material adverse effect on Valu-Line; or
(m) any agreement (other than the transactions contemplated by
this Agreement) to do any of the foregoing.
2.4. FINANCIAL STATEMENTS. SCHEDULE 2.4 contains copies of the
unaudited balance sheets of Valu-Line and its Subsidiaries for the fiscal years
ended December 31, 1996, 1995, and 1994 and related statements of income and
retained earnings and cash flows for each of the years in the three-year period
ended December 31, 1996, prepared by Valu-Line's independent public accountants.
Also included in SCHEDULE 2.4 are copies of the unaudited balance sheets of
Valu-Line and its Subsidiaries as of November 30, 1997 and the related
statements of income for the eleven-month period then ended (such financial
statements, and those as agreed to be
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delivered to Birch pursuant to Section 4.4, being collectively referred to as
the "Valu-Line Financial Statements"). The Valu-Line Financial Statements have
been prepared on the income tax basis of accounting applied in a consistent
manner with Valu-Line's past practices, except as otherwise stated therein, and
present fairly the financial position of Valu-Line and its Subsidiaries as of
their dates and the results of its operations as of and for the periods
then-ended. The Valu-Line Financial Statements do not contain any extraordinary
or nonrecurring items other than as specifically noted thereon.
2.5. TAX MATTERS.
(a) For purposes of this Agreement, the following terms shall
have the meanings set forth below:
(i) "Tax" means any federal, state, local, or foreign
income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Code Section 59A),
customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on
minimum, estimated or other tax of any kind whatsoever, in
effect on or at any time prior to the date hereof, including
any interest, penalty, or addition thereto, whether disputed
or not, other than taxes arising or imposed as a result of or
in respect of the transactions contemplated by this Agreement;
provided, however, that the term Tax shall not include any
required contributions by telecommunications companies to the
Kansas Universal Service Fund.
(ii) "Tax Returns" means any return, declaration,
report, claim for refund, information return or other
statement or filing related to or required in connection with
Taxes, including any schedule or attachment thereto and any
amendment thereof.
(b) Valu-Line and each of its Subsidiaries have timely filed
all Tax Returns required to be filed by them. All such Tax Returns are
true, correct and complete and present fairly and accurately the
information required to be shown therein. Valu-Line and each of its
Subsidiaries have timely paid all taxes payable by them (whether or not
shown on any Tax Return). There are no liens, claims, or encumbrances
on or against any of the assets or property of Valu-Line or any of its
Subsidiaries that arose in connection with or by reason of any failure
or alleged failure of Valu-Line or any of its Subsidiaries to pay any
Tax.
(c) Valu-Line and each of its Subsidiaries have withheld and
paid all Taxes required to have been withheld and paid in connection
with amounts paid or owing to any employee, independent contractor,
creditor, stockholder, or other third party.
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(d) No officer (or employee responsible for Tax matters) of
Valu-Line or any of its Subsidiaries expects any authority to assess or
assert any additional Taxes for any period for which Tax Returns have
been filed by Valu-Line or its Subsidiaries. There is no dispute or
claim concerning any Taxes of Valu-Line or any of its Subsidiaries
either (i) claimed or raised by any taxing or other authority or (ii)
as to which any of the officers (or employees responsible for Tax
matters) of Valu-Line or any of its Subsidiaries has knowledge.
(e) Neither Valu-Line nor any of its Subsidiaries has waived
any statute of limitations in respect of Taxes or Tax Returns or agreed
to any extension of time with respect to an assessment or deficiency of
Taxes.
(f) The consummation of the transactions contemplated by this
Agreement shall not cause Valu-Line or any of its Subsidiaries to
recognize income by reason of any deferred gains or excess loss
accounts within the control group consisting of Valu-Line and its
Subsidiaries.
(g) Attached as SCHEDULE 2.5 are true and correct copies of
the 1996 federal and Kansas corporate income tax returns for Valu-Line
and its Subsidiaries, as amended as of the date of this Agreement.
2.6. CONSENTS AND APPROVALS. To Valu-Line's knowledge, the execution,
delivery and performance by Valu-Line of this Agreement and the consummation of
the Merger and the resulting change in control of Valu-Line require no action by
or in respect of, or filing with, any governmental body, agency or official
other than (a) any required filings under the DGCL and the KGCL, and (b) filing
notice of the pending Merger with (but not requiring the approval of) the Kansas
Corporation Commission ("KCC") and Missouri Public Service Commission ("MPSC").
2.7. LITIGATION. Except as set forth on SCHEDULE 2.7, there are no
claims, actions, suits, proceedings or governmental investigations
(collectively, "Actions") pending or, to Valu-Line's knowledge, threatened
against Valu-Line or any of its Subsidiaries, nor is there to Valu-Line's
knowledge any basis for such an Action. Neither Valu-Line and its Subsidiaries
nor any of their properties or assets is subject to any order, judgment, writ,
injunction or decree.
2.8. COMPLIANCE WITH LAW. For purposes of this Agreement, the term
"Law" shall mean any federal, state or local law, statute, ordinance, legal
requirement, rule, regulation, order, writ, injunction or decree. To Valu-Line's
knowledge, the businesses of Valu-Line and its Subsidiaries are operated in
compliance with all applicable Laws, except for such breaches or violations of
Laws which individually or in the aggregate would not have a material adverse
effect on the business, operations, or financial condition of Valu-Line or any
of its Subsidiaries. All material licenses, approvals, authorizations,
certificates and permits necessary for the legal
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conduct of the business of Valu-Line or any of its Subsidiaries have been
secured, are valid and in full force and effect, and no suspension or
cancellation of any of them is threatened. All reports, documents or notices
required to be filed, maintained or furnished with or to all governmental and
regulatory authorities by Valu- Line or any of its Subsidiaries has received any
written notice from any governmental or regulatory authority as to any
infringement of, or non-compliance with, any Laws. As of the date of this
Agreement, to the knowledge of Valu-Line, no investigations by any governmental
entity with respect to Valu-Line or any of its Subsidiaries is pending or
threatened.
2.9. EMPLOYEE BENEFIT PLANS. SCHEDULE 2.9 contains a true and complete
list of each employee benefit plan, program, arrangement or contract, including
pension, profit sharing, stock bonus, deferred compensation, incentive
compensation, stock option, stock purchase, supplemental retirement, severance
or termination pay, salary continuation, supplemental unemployment benefits,
hospitalization, medical, dental, disability, life insurance, vacation and other
plans, programs, arrangements, or contracts, maintained, contributed to, or
required to be contributed to, by Valu-Line or it Subsidiaries ("Valu-Line
Benefit Plans"). None of the Valu-Line Benefit Plans is a "multi-employer plan"
within the meaning of Section 3(37) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"). Neither Valu-Line nor any of its Subsidiaries
(i) has contributed to a multi-employer pension plan; and (ii) has incurred any
liability under Title IV of ERISA to the Pension Benefit Guaranty Corporation or
to a multi-employer pension plan. All Valu-Line Benefit Plans have been operated
substantially in compliance with ERISA and all other applicable laws, and all
material reports have been filed with respect to the Valu-Line Benefit Plans in
accordance with ERISA, the Code, and other applicable laws.
2.10. DEBTS AND LIABILITIES. Except as set forth in SCHEDULE 2.10,
neither Valu-Line nor any of its Subsidiaries has any material liability,
whether absolute, contingent, by guarantee or otherwise, and whether due or to
become due, nor does there exist any situation or facts which could involve
potential material liability of Valu-Line or its Subsidiaries, except as
reflected or reserved against in the Valu-Line Financial Statements or incurred
in the ordinary course of business since November 30, 1997.
2.11. CONTRACTS.
(a) SCHEDULE 2.11 contains a listing of every (i) contract,
agreement or other legally binding oral or written commitment of
Valu-Line and its Subsidiaries in existence on the date hereof that
requires aggregate payments to or from Valu-Line or any of its
Subsidiaries of $50,000 or more, (ii) employment contract, contract for
personal services provided to Value-Line or its Subsidiaries, or
contract with an independent contractor; and (iii) promissory note,
loan or credit contract, or instrument or document related to security
for debt, including any security agreement, mortgage or pledge.
(b) All items listed on SCHEDULE 2.11 are in full force with
no material default
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thereunder by Valu-Line or any of its Subsidiaries, and no facts or conditions
exist which, if continued, would result in a material default thereunder by
either Valu-Line or its Subsidiaries or, to Valu-Line's knowledge, the other
party or parties. Except as otherwise described on SCHEDULE 2.11, no item listed
on that Schedule terminates, is terminable or may be accelerated upon the
Merger, the Merger will not make Valu-Line or any of its Subsidiaries liable for
any payments to another person, and the contracts and other items listed on
SCHEDULE 2.11 continue in effect after the Closing Date without the consent,
approval or act of any third party.
2.12. COMPUTER PROGRAMS, DATABASES AND SOFTWARE. Valu-Line or its
Subsidiaries have computer programs, databases and software that in the
aggregate are sufficient and adequate to operate the business of Valu-Line and
its Subsidiaries in the manner presently conducted.
2.13. TRADEMARKS. SCHEDULE 2.13 contains a list of (i) all material
trademarks, trade names and service marks (and registrations and applications
for such trademarks, trade names and service marks), owned, licensed or used by
Valu-Line or any of its Subsidiaries (the "Valu-Line Trademarks"). Valu-Line and
each of its Subsidiaries owns or holds adequate licenses or other express or
implied rights to use all Valu-Line Trademarks and, to the best knowledge of
Valu-Line, such use does not conflict with, infringe on, or otherwise violate
any rights of others. Neither Valu- Line nor any of its Subsidiaries has
received written notice of any conflict, infringement or violation relating to
any Valu-Line Trademarks.
2.14. REAL ESTATE.
(a) All parcels of real property owned directly or indirectly
by Valu-Line or any of its Subsidiaries, including all buildings,
improvements and structures located thereon and all appurtenances
belonging thereto are referred to herein as the "Valu-Line Fee
Properties," and all leaseholds of real property of Valu-Line or any of
its Subsidiaries, including any prepaid rent, security deposits and
options to renew or purchase in connection therewith shall hereinafter
be referred to as the "Valu-Line Leases." Collectively the Valu-Line
Leases and the Valu-Line Fee Properties are referred to herein as the
"Valu-Line Real Estate."
(b) SCHEDULE 2.14 sets forth a list of all Valu-Line Fee
Properties and all Valu- Line Leases, in each case specifying the
interest of Valu-Line or any of its Subsidiaries therein, whether fee,
leasehold or otherwise.
(c) Neither Valu-Line nor any of its Subsidiaries has received
any written notice of any (i) intended or proposed federal, state or
local statute, ordinance, order, requirement, law or regulation
(including zoning changes), or (ii) existing, proposed or contemplated
public improvement plan to modify or realign any street or highway or
initiate an eminent domain proceeding or a taking in lieu of
condemnation, which would impose a lien upon, result in the taking of
all or any material part of, or adversely affect the current use of,
any of the Valu- Line Real Estate.
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(d) Except set forth on SCHEDULE 2.14, none of the Valu-Line
Real Estate is subject to any leases or subleases.
(e) There are no claims, suits or judgments relating to
Valu-Line or any of its Subsidiaries that will, with the passage of
time, result in the imposition of a material mechanic's, serviceman's
or materialman's lien against any of the Valu-Line Real Estate.
(f) Each of the Valu-Line Leases is in full force and effect,
and is valid, binding and enforceable in accordance with its terms.
There is no existing breach, default, event of default or event under
any Valu-Line Lease which, with or without notice or lapse of time or
both, would constitute a breach, default or an event of default by
Valu-Line or any of its Subsidiaries, or by any other party to such
lease. All Valu-Line Leases will continue in effect after the Closing
Date and the consummation of the Merger without the consent, approval
or act of any other party.
(g) Neither Valu-Line or any of its Subsidiaries owns or
holds, or is obligated under or a party to, any option, right of first
refusal or other contractual right to purchase, acquire, sell, assign
or dispose of the Valu-Line Real Estate or any portion thereof or any
interest therein.
2.15. TITLE TO ASSETS. Valu-Line or its Subsidiaries have good and
marketable title to all assets or interests in assets which are owned by
Valu-Line or its Subsidiaries, free and clear of mortgages, security interests
and other encumbrances, except for those disclosed in the Valu-Line Financial
Statements and any liens for current Taxes not yet due and payable. Valu-Line or
its Subsidiaries own or lease all assets necessary to conduct their businesses
as now conducted. All such assets are in good operating condition and repair.
2.16. LABOR MATTERS.
(a) Neither Valu-Line nor any of its Subsidiaries is a party
to any collective bargaining agreement and there are no collective
bargaining agreements which pertain to employees of the Valu-Line or
any of its Subsidiaries.
(b) To the best knowledge of Valu-Line: (i) no employees of
Valu-Line or any of its Subsidiaries are represented by any labor
organization, and (ii) no labor organizations or group of employees of
Valu-Line or any of its Subsidiaries has made a pending demand for
recognition. There are no representation proceedings or petitions
seeking a representation proceeding presently pending or, to the best
knowledge of Valu-Line, threatened to be brought or filed, with the
National Labor Relations Board or other labor relations tribunal. There
has never been any organizing activity involving Valu-Line or any of
its Subsidiaries pending or threatened by any labor organization or
group of employees of Valu-Line or any of its Subsidiaries.
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(c) There have never been any strikes, work stoppages,
slowdowns, lockouts, arbitrations, grievances or other labor disputes
pending or threatened against or involving Valu-Line or any of its
Subsidiaries.
(d) Except as set forth on SCHEDULE 2.16, neither Valu-Line
nor any of its Subsidiaries is a contractor or subcontractor with the
government of the United States or any state such that it has an
obligation to maintain any affirmative action plans.
2.17. ENVIRONMENTAL MATTERS. Except as set forth on SCHEDULE 2.17,
neither Valu-Line nor any of its Subsidiaries has handled or disposed of any
hazardous or toxic substances, materials, or wastes as defined by any Law
("Hazardous Materials"). To Valu-Line's knowledge, none of the Valu-Line Real
Estate, and none of any properties formerly owned, leased or used by Valu-Line
or any of its Subsidiaries (including soils and surface, ground waters, and
buildings) is contaminated with any Hazardous Materials. There are no past,
pending or, to Valu-Line's knowledge, threatened environmental claims or
circumstances that could reasonably be anticipated to form the basis thereof
against Valu-Line or any of its Subsidiaries. Valu-Line has delivered to Birch
true and correct copies and results of any reports, studies, analyses, tests, or
monitoring possessed or initiated by Valu-Line or any of its Subsidiaries
pertaining to any environmental Laws or Hazardous Materials in, on, or under any
of the Valu-Line Real Estate and any properties formerly owned, leased or used
by Valu- Line or any of its Subsidiaries. To Valu-Line's knowledge, there are
not now and never have been any underground storage tanks located on the
Valu-Line Real Estate or any properties formerly owned or leased by Valu-Line or
any of its Subsidiaries.
2.18. INTEREST IN SUPPLIERS AND COMPETITORS. Except as set forth in
SCHEDULE 2.18, none of Valu-Line, any of its Subsidiaries, or any officer or
director of Valu-Line or any of its Subsidiaries, or any spouse or child of any
of them, has any direct or indirect material interest in any competitor of
Valu-Line or its Subsidiaries or in any person from whom or to whom Valu-Line or
its Subsidiaries leases any real or personal property, or in any person with
whom Valu-Line and its Subsidiaries is currently doing any material amount of
business.
2.19. INSURANCE. Each of the material insurance policies of Valu-Line
and its Subsidiaries is listed in SCHEDULE 2.19, is in full force and effect and
is in a commercially reasonable amount, and will continue in effect after the
consummation of the Merger without the consent, approval or act of any third
party. Except as set forth in the SCHEDULE 2.19, neither Valu-Line nor any of
its subsidiaries has received written notice since November 30, 1997 of any
increase in premiums or reduction in coverage from any insurer.
2.20. RESTRICTIVE COVENANTS. Neither Valu-Line nor any of its
Subsidiaries is a party to any contract containing non-competition provisions
that would limit the Surviving Corporation's ability after the Closing to engage
in business in any area or to compete against any person or entity.
13
2.21. BROKER'S FEES. None of Valu-Line and its Subsidiaries has any
liability or obligation to pay any fees or commissions to any broker, finder, or
agent with respect to the transactions contemplated by this Agreement.
2.22. DISCLOSURE. None of: (a) the representations or warranties made
by Valu-Line contained in this Agreement, (b) Valu-Line's Schedules to this
Agreement, (c) the Valu-Line Financial Statements, or (d) any other certificate,
affidavit, document or instrument required to be furnished by Valu-Line, its
Subsidiaries, or any of their respective directors, officers or employees in
connection with this Agreement, contains or will contain, as of the respective
dates thereof, any untrue statement of a material fact or omits or will omit to
state any material fact required to be stated herein or therein in order to make
the statements made herein or therein, in light of the circumstances under which
they were made, not misleading.
3. REPRESENTATIONS AND WARRANTIES OF BIRCH. Birch represents and warrants to
Valu-Line and the Stockholders as follows:
3.1. ORGANIZATION, QUALIFICATION, CORPORATE POWER AND AUTHORITY; EFFECT
OF AGREEMENT.
(a) Each of Birch and its Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of organization and each has all requisite corporate power
and authority to own, lease and operate its properties and to carry on
its business as now being conducted. Each is duly qualified or licensed
as a foreign corporation to do business, and is in good standing, in
each jurisdiction in which the character of its properties owned or
leased or the nature of its activities makes such qualification
necessary. Copies of the Articles of Incorporation and Bylaws of Birch
are set forth in SCHEDULE 3.1 and such copies are accurate and complete
as of the date hereof. Also set forth on SCHEDULE 3.1 is a list of the
Subsidiaries of Birch, together with the state of incorporation or
organization of each such entity. SCHEDULE 3.1 also lists the states
where each of Birch and its Subsidiaries are qualified to do business.
(b) Birch has the requisite corporate power and authority to
enter into this Agreement and to consummate the transactions
contemplated by this Agreement. The execution, delivery and performance
by Birch of this Agreement and the consummation by Birch of the
transactions contemplated hereby have been duly authorized by all
necessary corporation action on the part of Birch. This Agreement has
been duly and validly executed and delivered by Birch and, assuming due
execution and delivery by the other parties thereto, constitutes the
legal, valid and binding obligation of Birch, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other
similar laws relating to creditors' rights generally and subject to
general principles of equity
14
(regardless of whether enforcement is sought in a proceeding at law
or in equity). The execution, delivery and performance by Birch
of this Agreement and the consummation by Birch of the transactions
contemplated hereby will not, with or without the giving of notice or
the lapse of time, or both, (i) violate in any material respect any
provision of law, rule or regulation to which Birch or any of its
Subsidiaries is subject, (ii) conflict with or violate in any material
respect (A) any order, judgment, injunction, award or decree applicable
to Birch or any of its Subsidiaries or (B) the Articles of
Incorporation, Bylaws or other similar governing documents of Birch or
any of its Subsidiaries, (iii) conflict with, result in a breach or
termination of, or constitute a default (or constitute an event which
with notice, lapse of time, or both, would constitute a default, or
give rise to any right of termination, cancellation or acceleration)
under, any written or oral contract, agreement, arrangement, permit,
license, qualification, franchise or commitment of any kind to which
Birch or any of its Subsidiaries is a party, by which any of them may
be bound or under which any of them are entitled to any rights or
benefits, or (iv) result in the creation of any lien, charge or
encumbrance upon any of the assets or properties of any of Birch or any
of its Subsidiaries.
3.2. CAPITALIZATION OF BIRCH AND ITS SUBSIDIARIES. The authorized and
issued capital stock of Birch is set forth in SCHEDULE 3.2. Each of the
outstanding shares of Birch and each of its Subsidiaries is validly issued,
fully paid and non-assessable, and has not been issued and is not owned or held
in violation of any preemptive right of stockholders. All of the capital stock
of each Subsidiary is owned either by Birch or one of its Subsidiaries. All of
the shares of the Subsidiaries owned by Birch or by any of its Subsidiaries are
held free and clear of all liens, pledges, encumbrances, charges, assessments or
claims of any kind whatsoever. No bonds, debentures, notes or other indebtedness
of Birch or any of its Subsidiaries are issued or outstanding. Except as set
forth on SCHEDULE 3.2, there are no commitments, plans or arrangements to issue,
and no options, warrants or other rights calling for the issuance of, shares of
capital stock of Birch or any of its Subsidiaries or for the sale or disposition
by Birch or any of its Subsidiaries of any shares of capital stock of Birch or
any of its Subsidiaries.
3.3. BUSINESS OF BIRCH. Birch is a holding company that was formed on
December 23, 1996, and conducts no business activities except through its
Subsidiaries.
3.4. FINANCIAL STATEMENTS. SCHEDULE 3.4 contains copies of the
unaudited consolidated balance sheet of Birch as of December 31, 1997, and the
related statement of income for the year then ended (such financial statements
being collectively referred to as the "Birch Financial Statements"). Except as
noted thereon, such unaudited consolidated financial statements have been
prepared from the corporate books and records of Birch in accordance with
generally accepted accounting principles and fairly present the financial
position of Birch and the results of its operations as of December 31, 1997, and
for the year then ended (subject to the absence of notes and recurring annual
audit adjustments that are normal in nature and amount).
3.5. TAX MATTERS OF BIRCH.
15
(a) Birch and each of its Subsidiaries have timely filed all
Tax Returns required to be filed by them. All such Tax Returns are
true, correct and complete and present fairly and accurately the
information required to be shown therein. Birch and each of its
Subsidiaries has timely paid all taxes payable by it (whether or not
shown on any Tax Return). Since Birch's inception no claim has been
made by any taxing or other authority in any jurisdiction where Birch
or any of its Subsidiaries do not file Tax Returns that Birch or any of
its Subsidiaries is, or has been, or may be, subject to taxation by
that jurisdiction. There are no liens, claims, or encumbrances on or
against any of the assets or property of Birch or any of its
Subsidiaries that arose in connection with or by reason of any failure
or alleged failure to Birch or any of its Subsidiaries to pay any Tax.
(b) Birch and each of its Subsidiaries have withheld and paid
all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor,
creditor, stockholder, or other third party.
(c) No officer (or employee responsible for Tax matters) of
Birch or any of its Subsidiaries expects any authority to assess or
assert any additional Taxes for any period for which Tax Returns have
been filed by Birch or its Subsidiaries. There is no dispute or claim
concerning any Taxes of Birch or any of its Subsidiaries either (i)
claimed or raised by any taxing or other authority or (ii) as to which
any of the officers (or employees responsible for Tax matters) of Birch
or any of its Subsidiaries has knowledge.
(d) Neither Birch nor any of its Subsidiaries has waived any
statute of limitations in respect of Taxes or Tax Returns or agreed to
any extension of time with respect to an assessment or deficiency of
Taxes.
3.6. CONSENTS AND APPROVALS. The execution, delivery and performance by
Birch of this Agreement and the consummation of the Merger require no action by
or in respect of, or filing with, any governmental body, agency or official
other than (a) any required filings under the DGCL and the KGCL, and (b) filing
notice of the pending Merger with (but not requiring the approval of) the KCC
and MPSC.
3.7. LITIGATION. Except as set forth on SCHEDULE 3.7, there are no
Actions pending or threatened against Birch or its Subsidiaries, nor is there,
to Birch's knowledge, any basis for such an action. Neither Birch and its
Subsidiaries nor any of their properties or assets is subject to any order,
judgment, writ, injunction or decree.
3.8. COMPLIANCE WITH LAW. The businesses of Birch and its Subsidiaries
are operated in compliance with all applicable Laws, except for such breaches or
violations of Laws which individually or in the aggregate would not have a
material adverse effect on the business, operations, or financial condition of
Birch or any of its Subsidiaries. All material licenses, approvals,
authorizations, certificates and permits necessary for the legal conduct of the
business
16
of Birch or any of its Subsidiaries have been secured, are valid and in
full force and effect, and no suspension or cancellation of any of them is
threatened. All reports, documents or notices required to be filed, maintained
or furnished with or to all governmental and regulatory authorities by Birch or
any of its Subsidiaries has received any written notice from any governmental or
regulatory authority as to any infringement of, or non-compliance with, any
Laws. As of the date of this Agreement, to the knowledge of Birch, no
investigations by any governmental entity with respect to Birch or any of its
Subsidiaries is pending or threatened.
3.9. EMPLOYEE BENEFIT PLANS. SCHEDULE 3.9 contains a true and complete
list of each employee benefit plan, program, arrangement or contract, including
pension, profit sharing, stock bonus, deferred compensation, incentive
compensation, stock option, stock purchase, supplemental retirement, severance
or termination pay, salary continuation, supplemental unemployment benefits,
hospitalization, medical, dental, disability, life insurance, vacation and other
plans, programs, arrangements, or contracts, maintained, contributed to, or
required to be contributed to, by Birch or it Subsidiaries ("Birch Benefit
Plans"). None of the Birch Benefit Plans is a "multi-employer plan" within the
meaning of Section 3(37) of ERISA. Neither Birch nor any of its Subsidiaries (i)
has contributed to a multi-employer pension plan; and (ii) has incurred any
liability under Title IV of ERISA to the Pension Benefit Guaranty Corporation or
to a multi-employer pension plan. All Birch Benefit Plans have been operated
substantially in compliance with ERISA and all other applicable laws, and all
material reports have been filed with respect to the Birch Benefit Plans in
accordance with ERISA, the Code, and other applicable laws.
3.10. DEBTS AND LIABILITIES. Except as set forth in SCHEDULE 3.10,
neither Birch nor any of its Subsidiaries has any material liability, whether
absolute, contingent, by guarantee or otherwise, and whether due or to become
due, nor does there exist any situation or facts which could involve potential
material liability of Birch or its Subsidiaries, except as reflected or reserved
against in the Birch Financial Statements or incurred in the ordinary course of
business.
3.11. REAL ESTATE.
(a) Neither Birch nor any of its Subsidiaries owns any real
property directly or indirectly.
(b) All leaseholds of real property of Birch or any of its
Subsidiaries, including any prepaid rent, security deposits and options
to renew or purchase in connection therewith shall hereinafter be
referred to as the "Birch Leases." SCHEDULE 3.11 sets forth a list of
all Birch Leases.
(c) Each of the Birch Leases is in full force and effect, and
is valid, binding and enforceable in accordance with its terms. There
is not under any such Birch Lease any existing breach, default, event
or default or event which, with or without notice or lapse of time or
both, would constitute a breach, default or an event of default by
Birch or
17
any of its Subsidiaries, or by any other party to such lease. All Birch
Leases will continue in effect after the Closing Date and the
consummation of the Merger without the consent, approval or act of any
other party.
3.12. BROKER'S FEES. Birch does not have any liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
3.13. DISCLOSURE. No representation or warranty made by Birch contained
in this Agreement, and none of the Schedules to this Agreement, the Birch
Financial Statements, or any other certificate, affidavit, document or
instrument required to be furnished by Birch or its Subsidiaries, or any of
their respective directors, officers, or employees in connection with this
Agreement, contains or will contain, as of the respective dates thereof, any
untrue statement of material fact or omits or will omit to state any material
fact required to be stated herein or therein in order to make the statements
made herein or therein, in light of the circumstances under which they were
made, not misleading.
4. COVENANTS OF VALU-LINE AND THE STOCKHOLDERS. Valu-Line and the
Stockholders covenant and agree as follows (for purposes of this Section 4, all
references to Valu- Line shall be deemed to include its Subsidiaries and any
provision that requires Valu-Line to take action, or prohibits Valu-Line from
taking action, shall be deemed to require Valu-Line to cause its Subsidiaries to
comply with such provisions):
4.1. CONDUCT OF THE BUSINESS OF VALU-LINE; VALU-LINE STOCK. During the
period from the date of this Agreement to the Effective Time:
(a) Valu-Line and its Subsidiaries shall conduct their
businesses in the ordinary course consistent with past practices;
(b) Valu-Line and its Subsidiaries will not take any actions
that could at the time taken reasonably be expected to have a material
adverse effect on Valu-Line or any of its Subsidiaries;
(c) Valu-Line and its Subsidiaries shall use their best
efforts to preserve intact their corporate structures and business
organizations, to keep available the services of their key managerial
employees, to maintain satisfactory relationships with those having
business relationships with them, and to preserve their goodwill;
(d) Valu-Line and its Subsidiaries shall use their best
efforts to continue in effect all existing insurance arrangements or
shall use their best efforts to obtain comparable insurance;
(e) Value-Line and its Subsidiaries shall comply in all
material respects with
18
all applicable Laws;
(f) the Stockholders shall not sell, pledge, dispose of or
encumber (or authorize or allow any of the foregoing with respect to)
their Valu-Line Stock.
Without limiting the generality of the foregoing, and except as otherwise
expressly provided in this Agreement prior to the Effective Time, neither
Valu-Line nor any of its Subsidiaries (as the case may be) will without the
prior written consent of Birch: (i) issue, sell, pledge, dispose of or encumber
(or authorize or allow any of the foregoing with respect to) (A) additional
shares of capital stock of any class, or securities convertible into or
exchangeable for capital stock, or any rights, warrants or options to acquire
capital stock or other convertible securities, or (B) any bonds or other
securities or debt instruments in respect of, in lieu of or in substitution for
capital stock outstanding on the date hereof, (ii) purchase or otherwise
acquire, or propose to purchase or otherwise to acquire, any
outstanding shares of Valu-Line Stock, (iii) split, combine or reclassify the
outstanding Valu-Line Stock, (iv) declare, set aside or pay any dividend or
distribution on the outstanding Valu-Line Stock, (v) sell, pledge, dispose of or
encumber any of its assets, (vi) terminate any existing agreements or waive any
material right or incur any indebtedness or obligation (other than indebtedness
and obligations in the ordinary course of business and consistent with past
practices), or issue or sell any debt securities, or assume, guarantee, endorse,
or otherwise as an accommodation become responsible for the obligations of any
other individual or entity, or make any loans or advances, (vii) except as
otherwise required by law or by any existing Benefit Plan, adopt or amend any
plan for the benefit of employees, enter into or amend any consulting or other
employment agreement, increase salaries or declare bonuses (other than increases
or bonuses in the ordinary course of business consistent with past practices),
(viii) adopt any amendments to Articles of Incorporation or Bylaws, (ix) make
any contract or commitment or incur any material obligations for capital
expenditures, (x) lend or agree to lend any funds, or (xi) discharge or satisfy
any lien or encumbrance or pay any obligation or liability (absolute or
contingent), other than current liabilities or those incurred in the ordinary
course of business consistent with past practice. None of the Stockholders shall
object to the Merger or otherwise take any action to require the Surviving
Corporation to pay any of the Stockholders the value of the Stockholder's stock
pursuant to the provisions of the KGCL. Notwithstanding the foregoing, nothing
in this Agreement shall be construed to prohibit Valu-Line from distributing the
stock of Valu-Broadcasting or SS Property Management to the Valu-Line
Stockholders.
4.2. ACCESS TO INFORMATION; CONFIDENTIAL TREATMENT OF INFORMATION. From
the date hereof to the Effective Time, Birch and its representatives shall have,
during all reasonable hours, access to Valu-Line's premises, and to all
facilities, properties, books, accounts, records, contracts and documents of or
relating to Valu-Line and any of its Subsidiaries (collectively, the "Valu-Line
Records"). Valu-Line shall furnish to Birch and its representatives such
financial and operating data, regulatory filings, and tax returns, and permit
Birch and its representatives to have access to data processing systems, related
documentation, and such other information with respect to the business and
properties of Valu-Line and its Subsidiaries as Birch shall, from time to time,
reasonably request. Valu-Line shall cause its agents to provide the officers,
employees
19
and agents of Birch with such information concerning Valu-Line as may be
necessary for Birch to verify the performance of and compliance with Valu-Line's
representations, warranties, covenants and conditions in this Agreement.
4.3. CONFIDENTIAL TREATMENT OF INFORMATION. Subject to the requirements
of law, Valu- Line shall hold in confidence, and shall use its best efforts to
cause its officers, directors, employees affiliates, and agents to hold in
confidence, all confidential, proprietary, and other non-public information
received from Birch until such time as such information is otherwise publicly
available, and Valu-Line and its affiliates shall reveal such information only
to those officers, employees and agents who are informed by Valu-Line of the
confidential nature of such information and who agree to be bound by and to act
only in accordance with the terms of this Section 4.3. If this Agreement is
terminated, Valu-Line will, and will use its best efforts to cause its officers,
directors, employees and agents to, deliver to Birch all documents, work papers
and other material (including copies, extracts and summaries thereof) obtained
by or on behalf of any of them, directly or indirectly from
Birch, as a result of this Agreement or in connection herewith, whether so
obtained before or after the execution hereof. If Valu-Line or any of its
officers, employees, affiliates, or agents is requested or required in a legal
proceeding or pursuant to legal process to disclose any non-public information
supplied in the course of their dealings with Birch, Valu-Line promptly will
notify Birch so that it may seek any appropriate protective order and/or take
any mutually agreed action. If in the absence of a protective order or the
receipt of a waiver hereunder, such person is nonetheless, in the judgment of
its counsel, compelled to disclose such information, Valu-Line shall use all
reasonable efforts to inform Birch of such fact prior to such disclosure, shall
furnish only that portion of such information that Valu-Line is advised by
counsel is legally required and shall exercise its best efforts to obtain
reasonable assurance that confidential treatment will be accorded such
information.
4.4 SUPPLEMENTAL DISCLOSURE.
(a) Between the date of this Agreement and the Closing Date,
Valu-Line and the Stockholders will promptly notify Birch in writing if
it or he becomes aware of (i) any fact or condition that causes or
constitutes a breach of any of the representations and warranties of
Valu-Line or the Stockholders as of the date of this Agreement, or (ii)
the occurrence after the date of this Agreement of any fact or
condition that would cause or constitute a breach of any such
representation or warranty had such representation or warranty been
made as of the time of occurrence or discovery of such fact or
condition. Should any such fact or condition require any change in the
schedules to this Agreement or the representations or warranties of
Valu-Line or the Stockholders if this Agreement were dated the date of
the occurrence or discovery of any such fact or condition, Valu-Line or
the Stockholders will promptly deliver to Birch a supplement to this
Agreement specifying such change. During the same period, Valu-Line and
the Stockholders will promptly notify Birch of the occurrence of any
breach of any covenant of Valu-Line or the Stockholders or of the
occurrence of any event that may make the satisfaction of the
conditions in Section 7 impossible or unlikely.
20
(b) At least two business days prior to Closing, Valu-Line
shall deliver to Birch unaudited financial statements for Valu-Line and
its Subsidiaries for the period from December 31, 1996, through the
most recent practicable month ended prior to Closing; provided,
however, in no event shall the end of such period be a date more than
45 days prior to the Closing Date.
4.5 NO SOLICITATION. Neither Valu-Line nor any of its Subsidiaries will
permit any of their respective officers, directors, employees, affiliates,
representatives or agents (including any investment banker, stockbroking firm,
attorney or accountant retained by Valu-Line or any of its Subsidiaries) to,
directly or indirectly, (a) solicit, initiate, facilitate, encourage, propose or
any way seek proposals or offers with respect to a merger, acquisition, tender
offer, consolidation, business combination, transfer or disposition of all or
any part of the assets or any or all of the stock of Valu- Line or any of its
Subsidiaries or similar transactions involving Valu-Line or any of its
Subsidiaries (collectively, an "Acquisition Transaction"), (b) provide any
information to any corporation, partnership, person or other entity or group
(other than Birch and it representatives), with respect to
Valu-Line or any of its Subsidiaries in contemplation of an Acquisition
Transaction, or (c) engage in discussions or negotiations with respect to an
Acquisition Transaction.
4.6 DELIVERIES OF VALU-LINE AND THE STOCKHOLDERS. At the Closing,
Valu-Line and/or the Stockholders will deliver to Birch:
(a) certificates representing the Valu-Line Stock, duly
endorsed (or accompanied by duly executed stock powers), for transfer
to Buyer;
(b) releases in the form of EXHIBIT 4.6(b), executed by each
of the Stockholders (collectively, the "Stockholders' Releases");
(c) employment agreements substantially in the form of EXHIBIT
4.6(c), executed by each of the persons set forth on SCHEDULE 4.6(c)
(collectively, the "Employment Agreements");
(d) stock option agreements, executed by each of the persons
and with respect to the number of shares of Birch's common stock and
with the vesting schedule and other terms set forth on SCHEDULE 4.6(d)
(the "Option Agreements");
(e) a stockholders agreement, executed by each of the
Stockholders containing, among other terms, the provisions set forth on
SCHEDULE 4.6(e) (the "Stockholders Agreement");
(f) a certificate executed by a duly authorized officer of
Valu-Line and each of the Stockholders representing and warranting to
Birch that each of the representations and warranties of Valu-Line and
the Stockholders in this Agreement was accurate in all
21
respects as of the date of this Agreement and is accurate in all
respects as of the Closing Date as if made on the Closing Date (giving
full effect to any supplements delivered by Valu-Line or the
Stockholders to Birch prior to the Closing Date in accordance with
Section 4.4(a); and
(g) certified copies of resolutions, duly adopted by the Board
of Directors and stockholders of Valu-Line, which shall be in full
force and effect at the time of closing, authorizing the execution,
delivery, and performance by Valu-Line of this Agreement and the
consummation o the transactions contemplated hereby.
5. COVENANTS OF BIRCH. Birch covenants and agrees as follows:
5.1 ACCESS TO INFORMATION; CONFIDENTIAL TREATMENT OF INFORMATION. From
the date hereof to the Effective Time, Valu-Line and its representatives shall
have, during all reasonable hours, access to Birch's premises, and to all
facilities, properties, books, accounts, records, contracts and documents of or
relating to Birch (collectively, the "Birch Records"). Birch shall furnish to
Valu-Line and its representatives such financial and operating data, regulatory
filings and tax returns, and permit Valu-Line such other information with
respect to the business and properties of Birch, as Valu-Line shall, from time
to time, reasonably request. Birch shall cause its agents to provide the
officers, employees and agents of Valu-Line with such information concerning
Birch as may be necessary for Valu-Line to verify the performance of and
compliance with their representations, warranties, covenants and conditions
contained in this Agreement.
5.2 CONFIDENTIAL TREATMENT OF INFORMATION. Subject to the requirements
of law, Birch shall hold in confidence, and shall use its best efforts to cause
its officers, directors, employees affiliates, and agents to hold in confidence,
all confidential, proprietary, and other non-public information received from
Valu-Line until such time as such information is otherwise publicly available,
and Birch and its affiliates shall reveal such information only to those
officers, employees and agents who are informed by Birch of the confidential
nature of such information and who agree to be bound by and to act only in
accordance with the terms of this Section 5.2. If this Agreement is terminated,
Birch will, and will use its best efforts to cause its officers, directors,
employees and agents to, deliver to Valu-Line all documents, work papers and
other material (including copies, extracts and summaries thereof) obtained by or
on behalf of any of them, directly or indirectly from Birch , as a result of
this Agreement or in connection herewith, whether so obtained before or after
the execution hereof. If Birch or any of its officers, employees, affiliates, or
agents is requested or required in a legal proceeding or pursuant to legal
process to disclose any non-public information supplied in the course of their
dealings with Valu-Line, Birch promptly will notify Valu-Line so that it may
seek any appropriate protective order and/or take any mutually agreed action. If
in the absence of a protective order or the receipt of a waiver hereunder, such
person is nonetheless, in the judgment of its counsel, compelled to disclose
such information, Birch shall use all reasonable efforts to inform Valu-Line of
such fact prior to such disclosure, shall furnish only that portion of such
22
information that Birch is advised by counsel is legally required and shall
exercise its best efforts to obtain reasonable assurance that confidential
treatment will be accorded such information.
5.3 SUPPLEMENTAL DISCLOSURE. Between the date of this Agreement and the
Closing Date, Birch will promptly notify Valu-Line in writing if it becomes
aware of (i) any fact or condition that causes or constitutes a breach of any of
Birch's representations and warranties as of the date of this Agreement, or (ii)
the occurrence after the date of this Agreement of any fact or condition that
would cause or constitute a breach of any such representation or warranty had
such representation or warranty been made as of the time of occurrence or
discovery of such fact or condition. Should any such fact or condition require
any change in the schedules to this Agreement or the representation or
warranties of Birch if this Agreement were dated the date of the occurrence or
discovery of any such fact or condition, Birch will promptly deliver to
Valu-Line a supplement to this Agreement specifying such change. During the same
period, Valu-Line and the Stockholders will promptly notify Birch of the
occurrence of any breach of any covenant of Valu-Line or the Stockholders or of
the occurrence of any event that may make the satisfaction of the conditions in
Section 8 impossible or unlikely.
5.4 DELIVERIES OF BIRCH. At the Closing, Birch will deliver to
Valu-Line and/or the Stockholders:
(a) the Purchase Price as set forth in Section 1.9;
(b) the Employment Agreements, executed by Birch;
(c) the Option Agreements, executed by Birch;
(d) the Stockholders Agreement, executed by Birch;
(e) a certificate executed by a duly authorized officer of
Birch representing and warranting to the Stockholders that each of
Birch's representations and warranties in this Agreement was accurate
in all respects as of the date of this Agreement and is accurate in all
respects as of the Closing Date as if made on the Closing Date (giving
full effect to any supplements delivered by Birch to Valu-Line prior to
the Closing Date in accordance with Section 5.3); and
(f) certified copies of resolutions, duly adopted by the Board
of Directors and stockholders of Birch, which shall be in full force
and effect a the time of Closing, authorizing the execution, delivery,
and performance by Birch of this Agreement and the consummation of the
transactions contemplated hereby.
6. ADDITIONAL COVENANTS. The parties covenant and agree as follows:
6.1 FEES AND EXPENSES. All costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby by Birch shall be
paid by Birch, and all
23
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby by Valu-Line shall be paid by Valu-Line prior
to the Closing Date.
6.2 ADDITIONAL AGREEMENTS. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use all reasonable efforts to
take, or cause to be taken, all actions to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement and to cooperate
with each other in connection with the foregoing, including using all reasonable
efforts (a) to obtain any necessary waivers, consents and approvals from other
parties to material loan agreements, leases and other contracts, (b) to obtain
all necessary consents, approvals and authorizations as are required to be
obtained under any federal, state or foreign law or regulation, (c) to lift or
rescind any injunction or restraining order or other order adversely affecting
the ability of the parties to consummate the transactions contemplated hereby,
(d) to effect all necessary registrations and filings, including filings and
submissions of information required by governmental authorities, and (e) to
fulfill all conditions to this Agreement.
7. CONDITIONS TO BIRCH'S OBLIGATION TO CLOSE. Birch's obligation to effect the
Merger and to perform its obligations under this Agreement shall be subject to
the satisfaction (or waiver by Birch) on or prior to the Closing Date of all of
the following conditions:
7.1 NO PROHIBITION. No statute, rule, regulation, order, decree or
preliminary or permanent injunction of any court or administrative agency shall
be enacted, promulgated, entered or otherwise in effect which would prohibit
consummation of the Merger.
7.2 REPRESENTATIONS AND WARRANTIES. All representations and warranties
made by Valu- Line or the Stockholders in this Agreement shall be true in all
material respects (without giving effect to any supplement delivered pursuant to
Section 4.4(a)) on the Closing Date as if made on such date.
7.3 PERFORMANCE OF OBLIGATIONS. All covenants, agreements, obligations
and conditions required by this Agreement to be performed by Valu-Line and the
Stockholders shall have been performed.
7.4 NO MATERIAL CHANGE. There shall have occurred no material adverse
change in the business, properties, assets, financial condition, prospects or
results of operations of Valu-Line.
7.5 FINANCING. Birch shall have arranged financing in an amount not
less than $7,000,000 substantially on the terms and conditions set forth on
SCHEDULE 7.5.
7.6 DELIVERIES. Valu-Line and the Stockholders shall have complied with
each and every one of its or their obligations set forth in Section 4.6.
24
7.7 PHASE X. Xxxxx shall have received a Phase I Environmental Survey
in form and content reasonably acceptable to Birch (the "Environmental Survey")
with respect to the Valu-Line Real Property.
7.8 OPINION OF COUNSEL. There shall have been delivered to Birch an
opinion of counsel for Valu-Line and the Stockholders, dated as of the Closing
Date, in substantially the form set forth in EXHIBIT 7.8 attached hereto.
8. CONDITIONS TO VALU-LINE'S AND STOCKHOLDERS' OBLIGATION TO CLOSE.
Valu-Line's and its Stockholders obligations to effect the Merger and to perform
its obligations under this Agreement shall be subject to satisfaction (or waiver
by Valu-Line) on or prior to the Closing Date of all of the following
conditions:
8.1 NO PROHIBITION. No statute, rule, regulation, order, decree or
preliminary or permanent injunction of any court or administrative agency shall
be enacted, promulgated, entered or otherwise in effect which would prohibit
consummation of the Merger.
8.2 REPRESENTATIONS AND WARRANTIES. All representations and warranties
of Birch shall be true in all material respects (without giving effect to any
supplement delivered pursuant to Section 5.3) on the Closing Date as if made on
such date.
8.3 PERFORMANCE OF OBLIGATIONS. All covenants, agreements, obligations
and conditions required by this Agreement to be performed by Birch shall have
been performed.
8.4 DELIVERIES. Birch shall have complied with each and every one of
its obligations set forth in Section 5.4.
8.5 OPINION OF COUNSEL. There shall have been delivered to Valu-Line an
opinion of counsel for Birch, dated as of the Closing Date, in substantially the
form set forth in EXHIBIT 8.5 attached hereto.
8.6 STOCKHOLDERS AGREEMENT. The holders of at least 90% of the
outstanding common stock of Birch and of at least 90% of the shares of capital
stock of Birch issued in connection with the financing described in Section 7.5
shall have executed the Stockholders Agreement.
9. TERMINATION.
9.1 TERMINATION OF AGREEMENT. Either of Birch of Valu-Line may
terminate this Agreement with the prior authorization of its board of directors
(whether before or after stockholder approval) as provided below:
25
(a) Birch and Valu-Line may terminate this Agreement by mutual
written consent at any time prior to the Effective Time;
(b) Birch may terminate this Agreement by giving written
notice to Valu-Line at any time prior to the Effective Time if the
Closing shall not have occurred on or before May 1, 1998, by reason of
the failure of any condition precedent under Section 7 (unless the
failure results primarily from Birch breaching any representation,
warranty, or covenant contained in this Agreement); and
(c) Valu-Line may terminate this Agreement by giving written
notice to Birch at any time prior to the Effective Time if the Closing
shall not have occurred on or before May 1, 1998, by reason of the
failure of any condition precedent under Section 8 (unless the failure
results primarily from Valu-Line or the Stockholders breaching any
representation, warranty, or covenant contained in this Agreement).
9.2 EFFECT OF TERMINATION. If Birch or Valu-Line terminates this
Agreement pursuant to Section 9.1, all rights and obligations of the parties
hereunder shall terminate without any liability of any party to any other party
(except for any liability of any party then in breach); provided, however, that
the confidentiality provisions contained in Sections 4.3 and 5.2 shall survive
any such termination.
10. INDEMNIFICATION; REMEDIES.
10.1 SURVIVAL. All representations, warranties, covenants, and
obligations in this Agreement and any certificate or document delivered pursuant
to this Agreement will survive the Closing.
10.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY THE STOCKHOLDERS. The
Stockholders, jointly and severally, will indemnify and hold harmless Birch, its
Subsidiaries, and their respective directors, officers, employees, agents,
consultants, advisors, and other representatives, including legal counsel,
accountants, and financial advisors, stockholders, controlling persons, and
affiliates (collectively, the "Indemnified Persons") for, and will pay to the
Indemnified Persons the amount of, any loss, liability, claim, damage (including
incidental and consequential damages), expense (including costs of investigation
and defense and reasonable attorneys' fees), whether or not involving a
third-party claim (collectively, "Damages"), arising, directly or indirectly,
from or in connection with:
(a) any breach of any representation or warranty made by
Valu-Line or the Stockholders in this Agreement or in any certificate
or document delivered by Valu-Line or the Stockholders pursuant to this
Agreement as if such representation or warranty were made on and as of
the Closing Date, other than any such breach that (i) is disclosed in a
supplement delivered pursuant to Section 4.4(a), and (ii) is expressly
identified in the certificate delivered pursuant to Section 4.6(d) as
having caused the condition specified in
26
Section 7.2 or 7.3 not to be satisfied; or
(b) any breach by Valu-Line or the Stockholders of any
covenant or obligation of Valu-Line or a Stockholder in this Agreement.
The remedies provided in this Section 10.2 will not be exclusive of or limit any
other remedies that may be available to Birch or the other Indemnified Persons.
10.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BIRCH. Birch will
indemnify and hold harmless the Stockholders, and will pay to the Stockholders
the amount of Damages arising, directly or indirectly, from or in connection
with:
(a) any breach of any representation or warranty made by Birch
in this Agreement or in any certificate or document delivered by Birch
pursuant to this Agreement as if such representation or warranty were
made on and as of the Closing Date, other than any such breach that (i)
is disclosed in a supplement delivered pursuant to Section 5.3, and
(ii) is expressly identified in the certificate delivered pursuant to
Section 5.4(d) as having caused the condition specified in Section 8.2
or 8.3 not to be satisfied; or
(b) any breach by Birch of any covenant or obligation of Birch
in this Agreement.
The remedies provided in this Section 10.3 will not be exclusive of or limit any
other remedies that may be available to Birch or the other Indemnified Persons.
10.4 TIME LIMITATIONS. If the Closing occurs, the Stockholders will
have no liability (for indemnification or otherwise) with respect to (a) any
representation or warranty, or covenant or obligation to be performed and
complied with prior to the Closing Date, other than those in Sections 2.2, 2.5,
2.9, and 2.17, unless on or before the second anniversary of the Closing Date,
Birch notifies the Stockholders of a claim specifying the factual
27
basis of that claim in reasonable detail to the extent then known by Birch; (b)
any representation or warranty in Section 2.5, unless on or before the
expiration of the statute of limitation applicable to the Tax or Tax Return in
question, Birch notifies the Stockholders of a claim specifying the factual
basis of that claim in reasonable detail to the extent then known by Birch; and
(c) any representation or warranty in Sections 2.9 and 2.17, unless on or before
the sixth anniversary of the Closing Date, Birch notifies the Stockholders of a
claim specifying the factual basis of that claim in reasonable detail to the
extent then known by Birch. A claim with respect to Section 2.2 or a claim for
indemnification or reimbursement not based upon any representation or warranty
or any covenant or obligation to be performed and complied with prior to the
Closing Date, may be made at any time. If the Closing occurs, Birch will have no
liability (for indemnification or otherwise) with respect to any representation
or warranty, or covenant or obligation to be performed and complied with prior
to the Closing Date, unless on or before the second anniversary of the Closing
Date, the Stockholders notify Birch of a claim specifying the factual basis of
that claim in reasonable detail to the extent then known by the Stockholders.
10.5 LIMITATIONS ON AMOUNT--THE STOCKHOLDERS. The Stockholders will
have no liability (for indemnification or otherwise) with respect to the matters
described Section 10.2 until the total of all Damages with respect to such
matters exceeds $100,000, and then only for the amount by which such Damages
exceed $100,000. The Stockholders aggregate liability with respect to matters
described in Section 10.2 shall be as follows: (a) Xxxxxx'x aggregate liability
shall not exceed $18,822,394; (b) Xxxxxxx'x aggregate liability shall not exceed
$338,803; and (c) Supiran's aggregate liability shall not exceed $338,803.
However, this Section 10.5 will not apply to any Stockholder having actual
knowledge, at any time prior to the date on which a representation and warranty
of Valu-Line or any Stockholder is made, of a breach of such representation and
warranty or to any Stockholder causing an intentional breach of any covenant or
obligation, and that Stockholder will be liable for all Damages with respect to
such breaches. A Stockholder may satisfy an indemnification obligation (i)
entirely in cash or (ii) in a combination of cash, Series A Preferred, and
Series C Preferred in a proportion equal to the proportion of cash, Series A
Preferred and Series C Preferred received by that Stockholder in the Merger. For
purposes of this Section 10.5, each share of Series A Preferred and Series C
Preferred shall be valued at $1.60.
10.6 LIMITATIONS ON AMOUNT--BIRCH. Birch will have no liability (for
indemnification or otherwise) with respect to the matters described in Section
10.3 until the total of all Damages with respect to such matters exceeds
$100,000, and then only for the amount by which such Damages exceed $ 100,000.
Birch's aggregate liability with respect to matters described in Section 10.3
shall not exceed $19,500,000. However, this Section 10.6 will not apply to any
breach of any of Birch's representations and warranties of which the President
or any Vice President of Birch had actual knowledge at any time prior to the
date on which such representation and warranty is made or any intentional breach
by Birch of any covenant or obligation, and Birch will be liable for all Damages
with respect to such breaches.
10.7 RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE. The right to
indemnification, payment of Damages, or other remedy based on such
representations, warranties, covenants, and obligations will not be affected by
any investigation conducted with respect to, or any knowledge acquired (or
capable of being acquired) at any time, whether before or after the execution
and delivery of this Agreement or the Closing Date, with respect to the accuracy
or inaccuracy of or compliance with, any such representation, warranty,
covenant, or obligation, except as set forth in Sections 10.2(a) and 10.3(a).
The waiver of any condition based on the accuracy of any representation or
warranty, or on the performance of or compliance with any covenant or
obligation, will not affect the right to indemnification, payment of Damages, or
other remedy based on such representations, warranties, covenants, and
obligations.
11. MISCELLANEOUS.
11.1 EXPENSES. Except as otherwise expressly provided in this
Agreement, each party
28
to this Agreement will bear its respective expenses incurred in connection with
the preparation, execution, and performance of this Agreement and the Merger,
including all fees and expenses of agents, representatives, counsel, and
accountants; provided, however, that Birch shall bear the cost of the
Environmental Survey. The Stockholders will cause Valu-Line and its Subsidiaries
not to incur any out-of-pocket expenses in connection with this Agreement,
except for professional fees not in excess of $25,000. In the event of
termination of this Agreement, the obligation of each party to pay its own
expenses will be subject to any rights of such party arising from a breach of
this Agreement by another party.
11.2 PUBLIC ANNOUNCEMENTS. Any public announcement or similar publicity
with respect to this Agreement or the Merger will be issued, if at all, at such
time and in such manner as Birch and Valu-Line determine. Unless consented to by
the other party in advance or required by law, prior to the Closing, neither
Valu-Line nor Birch may make any disclosure about this Agreement to any person.
Valu-Line and Birch will consult with each other concerning the means by which
Valu-Line's employees, customers, and suppliers and others having dealings with
it will be informed of the Merger.
11.3 NOTICES. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when delivered by hand (with written confirmation of receipt), sent by
telecopier (with written confirmation of receipt), provided that a copy is
mailed by registered mail, return receipt requested, or when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
Valu-Line or the Stockholders: Birch:
Valu-Line Companies, Inc. Birch Telecom, Inc.
0000 X xx X Xxxxx Xxxxx 0000, 0000 Xxxxxx Xxxxxx
Xxxxxxx, XX Xxxxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx Attention: President
Fax: 000-000-0000 Fax: 000-000-0000
with a copy to: with a copy to:
Xxxxxxx, Blaylock, Hernandez, Xxxx & Day Xxxxxxx Xxxx Xxxxx & Xxxxxx, LLP
Riverfront Place Suite 1400, 0000 Xxxxxx Xxxxxx
000 Xxxxx Xxxx Xxxxxx Xxxx, XX 00000
Xxxxxxx, XX 00000 Attention: Xxxxxxx X. XxXxxx, Esq.
Attention: Xxxxx X. Xxxx, Esq. Fax: 000-000-0000
Fax: 000-000-0000
29
11.4 FURTHER ASSURANCES. The parties agree to furnish upon request to
each other such further information, to execute and deliver to each other such
other documents, and to do such other acts and things, all as the other party
may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
11.5 WAIVER. The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor any delay by any
party in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; no waiver that may be given
by a party will be applicable except in the specific instance for which it is
given; and no notice to or demand on one party will be deemed to be a waiver of
any obligation of such party or of the right of the party giving such notice or
demand to take further action without notice or demand as provided in this
Agreement or the documents referred to in this Agreement.
11.6 ENTIRE AGREEMENT AND MODIFICATION. This Agreement supersedes all
prior agreements between the parties with respect to its subject matter and
constitutes (along with the schedules to this Agreement and documents referred
to in this Agreement) a complete and exclusive statement of the terms of the
agreement between the parties with respect to its subject matter. This Agreement
may not be amended except by a written agreement executed by the party to be
charged with the amendment.
11.7 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS. Neither party
may assign any of its rights under this Agreement without the prior consent of
the other parties. Subject to the preceding sentence, this Agreement will apply
to, be binding in all respects upon, and inure to the benefit of the successors
and permitted assigns of the parties. Nothing expressed or referred to in this
Agreement will be construed to give any person other than the parties to this
Agreement any legal or equitable right, remedy, or claim under or with respect
to this Agreement or any provision of this Agreement. This Agreement and all of
its provisions and conditions are for the sole and exclusive benefit of the
parties to this Agreement and their successors and assigns.
11.8 SEVERABILITY. If any provision of this Agreement is held invalid
or unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
11.9 SECTION HEADINGS, CONSTRUCTION. The headings of sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation. All references
30
to "Section" or "Sections" refer to the corresponding Section or Sections of
this Agreement. All words used in this Agreement will be construed to be of such
gender or number as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding words or terms.
11.10 GOVERNING LAW. This Agreement will be governed by the laws of the
State of Missouri without regard to conflicts of laws principles.
11.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
*****
31
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
BIRCH TELECOM, INC.
/s/ Xxxxx X. Xxxxx
By: __________________________
Xxxxx X. Xxxxx, President
VALU-LINE COMPANIES, INC.
/s/ Xxxxxxx X. Xxxxxx
By: __________________________
Xxxxxxx X. Xxxxxx, President
/s/ Xxxxxxx X. Xxxxxx
_____________________________
Xxxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxx
_____________________________
Xxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxxxx
_____________________________
Xxxxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxxx
_____________________________
Xxxxx X. Xxxxxxx
/s/ Xxxxxx Xxxxxxx
_____________________________
Xxxxxx Xxxxxxx
/s/ Xxxxx X. Xxxxxxx
_____________________________
Xxxxx X. Xxxxxxx
32
INDEX OF DEFINED TERMS
Acquisition Transaction................................................... 18
Actions ........................................................ 7
Agreement ........................................................ 1
Birch ........................................................ 1
Birch Benefit Plans....................................................... 15
Birch Financial Statements................................................ 13
Birch Leases ........................................................ 15
Birch Records ........................................................ 19
Certificate of Merger..................................................... 1
Closing ........................................................ 1
Closing Date ........................................................ 1
Code ........................................................ 1
Damages ........................................................ 24
DGCL ........................................................ 1
Effective Time ........................................................ 2
Employment Agreements..................................................... 19
Environmental Survey...................................................... 22
Hazardous Materials....................................................... 11
Indemnified Persons....................................................... 24
KCC ........................................................ 7
KGCL ........................................................ 1
Law ........................................................ 7
Merger ........................................................ 1
MPSC ........................................................ 7
Option Agreements ........................................................ 19
Person ........................................................ 3
Purchase Price ........................................................ 2
Xxxxxx ........................................................ 1
Section ........................................................ 28
Series A Preferred........................................................ 2
Series C Preferred........................................................ 2
Stockholder ........................................................ 1
Stockholders Agreement.................................................... 19
Stockholders' Releases.................................................... 19
Subsidiaries ........................................................ 3
Supiran ........................................................ 1
Tax ........................................................ 6
Tax Returns ........................................................ 6
Xxxxxxx ........................................................ 1
Valu-Broadcasting ........................................................ 3
Valu-Line ........................................................ 1
33
Valu-Line Benefit Plans.................................................. 8
Valu-Line Fee Properties................................................. 9
Valu-Line Financial Statements........................................... 5
Valu-Line Leases ....................................................... 9
Valu-Line Real Estate.................................................... 9
Valu-Line Records ....................................................... 17
Valu-Line Stock ....................................................... 2
Valu-Line Trademarks..................................................... 9
34
SCHEDULES AND EXHIBITS
Schedule 1.9 Purchase Price
Schedule 2.1 Articles of Incorporation and Bylaws of Valu-Line and
Subsidiaries; Subsidiaries
Schedule 2.2 Capitalization
Schedule 2.3 Absence of Certain Events
Schedule 2.4 Financial Statements
Schedule 2.5 Tax Returns
Schedule 2.7 Litigation
Schedule 2.9 Employee Benefit Plans
Schedule 2.10 Debts and Liabilities
Schedule 2.11 Contracts
Schedule 2.13 Trademarks
Schedule 2.14 Real Estate
Schedule 2.16 Labor Matters
Schedule 2.17 Environmental Matters
Schedule 2.18 Interest in Suppliers and Competitors
Schedule 2.19 Insurance
Schedule 3.1 Articles of Incorporation and Bylaws of Birch and
Subsidiaries; Subsidiaries
Schedule 3.2 Capitalization
Schedule 3.4 Financial Statements
Schedule 3.7 Litigation
Schedule 3.9 Employee Benefit Plans
Schedule 3.10 Debts and Liabilities
Schedule 3.11 Real Estate
Schedule 4.6(c) Persons Executing Employment Agreements
Schedule 4.6(d) Stock Options
Schedule 4.6(e) Stockholders Agreement
Schedule 7.5 Financing
Exhibit 1.3 Certificate of Merger
Exhibit 1.5 Amended and Restated Certificate of Incorporation
Exhibit 4.6(b) Stockholders' Releases
Exhibit 4.6(c) Employment Agreements
Exhibit 7.8 Valu-Line Legal Opinion
Exhibit 8.5 Birch Legal Opinion
