AGREEMENT AND PLAN OF MERGER
BETWEEN
MIRACLE MARKETING INC.
MA ACQUISITION SUB INC.
AND
MARKET AMERICA, INC.
DATED March 27, 2002
TABLE OF CONTENTS
PAGE
ARTICLE 1 The Merger...........................................................2
1.1 The Merger............................................................2
1.2 Effective Time........................................................2
1.3 Effects of the Merger.................................................2
1.4 Articles of Incorporation and Bylaws; Directors and Officers..........2
1.5 The Closing...........................................................2
ARTICLE 2 Effect of the Merger on Securities of the Company....................3
2.1 Conversion of Acquisition Sub Stock...................................3
2.2 Conversion of Company Stock...........................................3
2.3 Exchange of Certificates..............................................4
2.4 Closing of Transfer Books.............................................5
2.5 No Further Ownership Rights in Company Stock..........................5
ARTICLE 3 Representations and Warranties of the Company........................5
3.1 Organization, Standing and Power......................................5
3.2 Capital Structure.....................................................5
3.3 Authority; Non-Contravention..........................................6
3.4 SEC Documents.........................................................7
3.5 Absence of Certain Events.............................................8
ARTICLE 4 Representations and Warranties of The Purchasers.....................8
4.1 Organization, Standing and Power......................................8
4.2 Authority; Non-Contravention..........................................8
4.3 Brokers...............................................................9
4.4 Litigation............................................................9
4.5 Capital Structure and Shareholders....................................9
ARTICLE 5 Covenants...........................................................10
5.1 Interim Operations of the Company....................................10
5.2 Meeting of the Company's Shareholders................................10
5.3 Filings, Other Action................................................10
5.4 Inspection of Records................................................11
5.5 Publicity............................................................11
5.6 Proxy Statement and Other SEC Filings................................11
5.7 Further Action.......................................................12
5.8 Expenses.............................................................13
5.9 Indemnification......................................................13
5.10 Takeover Statute...................................................13
5.11 Conduct of Business by the Purchasers Pending the Merger...........14
5.12 Transfer of Offering Group Shares..................................14
5.13 Conveyance Taxes...................................................14
ARTICLE 6 Conditions to Merger................................................14
6.1 Conditions to Each Party's Obligation to Effect the Merger...........14
6.2 Conditions to Obligation of Company to Effect the Merger.............15
6.3 Conditions to Obligation of the Purchasers to Effect the Merger......15
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ARTICLE 7 Termination.........................................................16
7.1 Termination by Mutual Consent........................................16
7.2 Termination by any Party.............................................16
7.3 Extension, Waiver....................................................16
ARTICLE 8 General Provisions..................................................18
8.1 Nonsurvival of Representations, Warranties and Agreements............18
8.2 Assignment; Binding Effect...........................................18
8.3 Entire Agreement.....................................................18
8.4 Amendment............................................................18
8.5 Governing Law........................................................18
8.6 Counterparts.........................................................18
8.7 Headings.............................................................18
8.8 Interpretation.......................................................19
8.9 Waivers..............................................................19
8.10 Incorporation of Schedules.........................................19
8.11 Severability.......................................................19
8.12 Enforcement of Agreement...........................................19
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DEFINITIONS
Agreement......................................................................1
Alternative Proposal..........................................................12
Articles of Merger.............................................................1
Certificates...................................................................3
Closing........................................................................2
Closing Date...................................................................2
Code..........................................................................10
Company Stock..................................................................1
Company........................................................................1
Company Options................................................................6
Company Permits................................................................9
Company SEC Documents..........................................................8
Department of State............................................................1
Dissenting Shares..............................................................3
Effective Time.................................................................1
Evaluation Material...........................................................27
Exchange Act...................................................................8
Company Stock..................................................................1
Governmental Entity............................................................7
Indemnified Parties...........................................................17
Instrument.....................................................................7
Material Adverse Change........................................................6
Material Adverse Effect........................................................6
Meeting of Shareholders.......................................................15
Merger.........................................................................1
Merger Consideration...........................................................3
NCBCA..........................................................................1
Paying Agent...................................................................4
Preferred Stock................................................................6
Proponents....................................................................20
Proxy Statement...............................................................16
Acquisition Sub................................................................1
Acquisition Sub Stock..........................................................1
Redemption Price...............................................................4
Continuing Shares..............................................................1
Schedules......................................................................5
SEC............................................................................8
Securities Act.................................................................8
Stock Plan.....................................................................6
Surviving Corporation..........................................................1
Tax...........................................................................10
Tax Return....................................................................10
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated March , 2002,
between MA ACQUISITION SUB INC., a North Carolina corporation (the "Acquisition
Sub"), MIRACLE MARKETING INC., a Delaware corporation (the "Marketing" and,
together with Acquisition Sub, the "Purchasers") and MARKET AMERICA, INC., a
North Carolina corporation (and together with its subsidiaries, the "Company").
RECITALS
A. Xxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxxx, Xxxxxx X. Xxxxxxxx,
Xxxxxx Xxxxxxxx, Xxxx Xxxxxx, Xxxxxx Xxxxxx and Xxxxxx Xxxxxxx (collectively,
the "Offering Group"") beneficially own, collectively, 15,943,650 shares of the
common stock, par value .00001 per share, of the Company (the "Company Stock" ),
representing approximately 82% of the issued and outstanding shares of Company
Stock as of the date hereof (such shares being referred to herein collectively
as the "Offering Group Shares" ).
B. Acquisition Sub is the wholly-owned subsidiary of Marketing,
which has been formed by Marketing for the purpose of consummating the
transactions described herein.
C. In connection with the transactions contemplated hereby, the
Offering Group have agreed to transfer Offering Group Shares (such shares so
transferred being referred to hereinafter as the "Continuing Shares") to
Marketing in exchange for shares of the common stock, par value $.00001 per
share, of Marketing (the "Marketing Stock" ), thereof, so that, as of such time,
Marketing will own approximately 82% of the issued and outstanding shares of
Company Stock.
D. The Boards of Directors of each of Marketing, Acquisition Sub
and the Company have approved, and deem it advisable and in the best interests
of their respective companies and shareholders to consummate a merger (the
"Merger") of Acquisition Sub, with and into the Company, wherein each issued and
outstanding share of Company Stock, except shares of Company Stock held by
persons who comply with the provisions of North Carolina law regarding the right
of shareholders to dissent from the Merger and require appraisal of their shares
of Company Stock and Continuing Shares, will be converted into the right to
receive $8.00 per share, in cash, without interest, and each issued and
outstanding share of common stock, par value $.00001 per share, of Acquisition
Sub (the "Acquisition Sub Stock") shall be converted into a share of common
stock in the Surviving Corporation (as hereinafter defined).
E. Marketing, Acquisition Sub and the Company desire to make
certain representations, warranties, covenants and agreements in connection with
the transactions contemplated hereby.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE 1
THE MERGER
1.1 The Merger. Upon the terms and subject to the conditions hereof,
and in accordance with the North Carolina Business Corporation Act ("NCBCA"),
Acquisition Sub shall be merged with and into the Company at the Effective Time
(as hereinafter defined). Following the Merger, the separate corporate existence
of Acquisition Sub shall cease and the Company shall continue as the surviving
corporation (the "Surviving Corporation") and shall succeed to and assume all
the rights and obligations of Acquisition Sub in accordance with the NCBCA.
1.2 Effective Time. Subject to the provisions of this Agreement, the
Merger shall become effective when the Articles of Merger (the "Articles of
Merger"), executed in accordance with the relevant provisions of the NCBCA, is
filed with the Secretary of State of the State of North Carolina (the "Secretary
of State"). When used in this Agreement, the term "Effective Time" shall mean
the date and time at which the Articles of Merger is filed with the Secretary of
State. The filing of the Articles of Merger shall be made as soon as reasonably
practicable (but not later than the first business day) after the satisfaction
or waiver of the conditions to the Merger set forth herein.
1.3 Effects of the Merger. The Merger shall have the effects set
forth in the NCBCA.
1.4 Articles of Incorporation and Bylaws; Directors and Officers.
(a) The Articles of Incorporation and the Bylaws of the
Company, as in effect immediately prior to the Effective Time, shall be amended
by the Articles of Merger to make such changes regarding the capitalization of
the Surviving Corporation as the Purchasers may request and, as so amended, the
Articles of Incorporation and the Bylaws of the Company shall be the Articles of
Incorporation and the Bylaws of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
(b) The directors of the Company at the Effective Time shall,
from and after the Effective Time, be the initial directors of the Surviving
Corporation until their successors have been duly elected or appointed and
qualified or until their earlier death, resignation or removal, in accordance
with the Surviving Corporation's Articles of Incorporation and Bylaws.
(c) The officers of the Company at the Effective Time and such
other persons as designated by Marketing shall, from and after the Effective
Time, be the initial officers of the Surviving Corporation until their
successors have been duly elected or appointed and qualified or until their
earlier death, resignation or removal, in accordance with the Surviving
Corporation's Articles of Incorporation and Bylaws.
1.5 The Closing. Subject to the terms and conditions of this
Agreement, the closing of the transactions contemplated by this Agreement (the
"Closing") shall take place (a) at such time and place as the parties shall
agree on the first business day following the day on which the last to be
fulfilled or waived of the conditions set forth in Article 6 shall be fulfilled
or waived in accordance herewith or (b) at such other time, date or place as the
parties may agree. The date on which the Closing occurs is hereinafter referred
to as the "Closing Date."
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ARTICLE 2
EFFECT OF THE MERGER ON SECURITIES
OF THE COMPANY
2.1 Conversion of Acquisition Sub Stock. At the Effective Time, each
share of Acquisition Sub Stock outstanding immediately prior to the Effective
Time shall cease to be outstanding, shall be cancelled and retired and shall
cease to exist and each holder of a certificate or certificates representing any
such shares of Acquisition Sub Stock shall thereafter cease to have any rights
with respect thereto.
2.2 Conversion of Company Stock.
(a) Subject to Section 2.2(b), at the Effective Time each
issued and outstanding share of Company Stock (other than Continuing Shares and
Dissenting Shares as hereinafter defined) shall be converted into the right to
receive $8.00, in cash, without interest (the "Merger Consideration"). All such
shares of Company Stock, when so converted, shall cease to be outstanding, shall
be canceled and retired and shall cease to exist, and each holder of a
certificate or certificates (the "Certificates") representing any such shares of
Company Stock shall thereafter cease to have any rights with respect thereto,
except the right to receive the Merger Consideration. At the Effective Time,
each Certificate representing any Continuing Shares shall thereafter without any
action on the part of the holder thereof, be deemed to represent the same number
of shares of the Surviving Corporation.
(b) Notwithstanding any provision of this Agreement to the contrary,
if required by the NCBCA but only to the extent required thereby, shares of
Company Stock which are issued and outstanding immediately prior to the
Effective Time and which are held by holders of such shares of Company Stock who
have properly exercised appraisal rights with respect thereto in accordance with
the NCBCA (the "Dissenting Shares") will not be exchangeable for the right to
receive the Merger Consideration, and holders of such shares of Company Stock
will be entitled to receive payment of the appraised value of such shares of
Company Stock in accordance with the provisions of the NCBCA unless and until
such holders shall fail to perfect or shall effectively withdraw or shall have
lost their rights to appraisal and payment under the NCBCA. If, after the
Effective Time, any such holder fails to perfect or effectively withdraws or
loses such right, such shares of Company Stock will thereupon be treated as if
they had been converted into and have become exchangeable for, at the Effective
Time, the right to receive the Merger Consideration, without any interest
thereon. The Company will give the Purchasers prompt notice of any demands
received by the Company for appraisals of shares of Company Stock. The Company
shall not, except with the prior written consent of the Purchasers, make any
payment with respect to any demands for appraisal or offer to settle or settle
any such demands.
(c) At or prior to the Effective Time, the Company shall have made
arrangements, the effect of which shall be that no shares of Company Stock or
other capital stock of the Company or the Surviving Corporation shall be
issuable pursuant to options or warrants to purchase shares, or securities
convertible into shares, of Company Stock.
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2.3 Exchange of Certificates.
(a) Prior to the Effective Time, the Company shall appoint a
bank or trust company to act as paying agent hereunder, (the "Paying Agent") for
the payment of the Merger Consideration upon surrender of Certificates. All of
the fees and expenses of the Paying Agent shall be borne by the Surviving
Corporation.
(b) Marketing shall take all steps necessary to enable and
cause the Surviving Corporation to provide the Paying Agent with cash in amounts
necessary to pay the Merger Consideration, when and as such amounts are needed
by the Paying Agent.
(c) As soon as reasonably practicable after the Effective Time
but no later than 20 days of such time, the Paying Agent shall mail to each
holder of record of Company Stock immediately prior to the Effective Time
(excluding any Dissenting Shares) (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of such Certificates to the Paying
Agent and shall be in such form and have such other provisions as the Surviving
Corporation shall reasonably specify) and (ii) instructions for the use thereof
in effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of a Certificate for cancellation to the Paying
Agent or to such other agent or agents as may be appointed by the Surviving
Corporation, together with such letter of transmittal, duly executed, and such
other documents as may reasonably be required by the Paying Agent, the holder of
such Certificate shall be entitled to receive in exchange therefor a bank check
in the amount of cash into which the shares of Company Stock theretofore
represented by such Certificate shall have been converted pursuant to Section
2.2, and the Certificates so surrendered shall forthwith be canceled. No
interest will be paid or will accrue on the cash payable upon the surrender of
any Certificate. If payment is to be made to a person other than the person in
whose name the Certificate so surrendered is registered, it shall be a condition
of payment that such Certificate shall be properly endorsed or otherwise in
proper form for transfer and that the person requesting such payment shall pay
any transfer or other taxes required by reason of the transfer of such
Certificate or establish to the satisfaction of the Surviving Corporation that
such tax has been paid or is not applicable.
Until surrendered as contemplated by this Section 2.3, each
Certificate (other than Certificates representing Dissenting Shares) shall be
deemed at any time after the Effective Time to represent only the right to
receive upon such surrender the amount of cash, without interest, into which the
shares of Company Stock theretofore represented by such Certificate shall have
been converted pursuant to Section 2.2.
(d) None of Marketing, Acquisition Sub, the Company, the
Surviving Corporation, the Paying Agent or any other person shall be liable to
any former holder of shares of Company Stock for any amount properly delivered
to a public official pursuant to applicable abandoned property, escheat or
similar laws.
(e) In the event that any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such person of a bond in such
reasonable amount as the Surviving Corporation may direct as indemnity against
any claim that may be made against it with respect to such Certificate, the
Paying Agent will issue in exchange for such lost, stolen or destroyed
4
Certificate the Merger Consideration, deliverable in respect thereof pursuant to
this Agreement.
2.4 Closing of Transfer Books. At or after the Effective Time, there
shall be no transfers on the stock transfer books of the Company of the shares
of Company Stock which were outstanding immediately prior to the Effective Time.
If, after the Effective Time, Certificates are presented to the Surviving
Corporation, they shall be canceled and exchanged for the consideration
deliverable in respect thereof pursuant to this Agreement in accordance with the
procedures set forth in this Article 2.
2.5 No Further Ownership Rights in Company Stock. From and after the
Effective Time, the holders of shares of Company Stock which were outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such shares of Company Stock except as otherwise provided in this
Agreement or by applicable law. All cash paid upon the surrender of Certificates
in accordance with the terms hereof shall be deemed to have been paid in full
satisfaction of all rights pertaining to the shares of Company Stock.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchasers that, except as
set forth in schedules hereto specifically referring to the Sections hereof
intended to be so qualified (the "Schedules"):
3.1 Organization, Standing and Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated and has the requisite corporate power
and authority to carry on its business as now being conducted. The Company is
duly qualified to do business, and is in good standing, in each jurisdiction
where the character of its properties owned or held under lease or the nature of
its activities makes such qualification necessary, except where the failure to
be so qualified and in good standing would not, individually or in the
aggregate, have a Material Adverse Effect on the Company. For purposes of this
Agreement, "Material Adverse Change" or "Material Adverse Effect" means, when
used with respect to Marketing, Acquisition Sub or the Company, as the case may
be, any change or effect, either individually or in the aggregate, that is
materially adverse to the business, assets, financial condition or results of
operations of Marketing, Acquisition Sub, or the Company, as the case may be.
3.2 Capital Structure. The authorized capital stock of the Company
consists of 800,000,000 shares, of which all shares are designated as Company
Stock.
At the date hereof (i) 19,420,000 shares of Company Stock were issued
and outstanding. All outstanding shares of Company Stock are validly issued,
fully paid and nonassessable and not subject to preemptive rights.
As of the date hereof, there are no options, warrants, rights,
commitments, agreements, arrangements or undertakings of any kind to which the
Company is a party or by which it is bound obligating the Company to issue,
5
deliver or sell, or cause to be issued, delivered or sold, additional shares of
capital stock or other voting securities of the Company.
3.3 Authority; Non-Contravention.
(a) The Board of Directors of the Company has approved this
Agreement and determined that the Merger is fair and in the best interests of
the Company and its shareholders, and the Company has all requisite corporate
power and authority to enter into this Agreement and, subject to approval of the
Merger by the shareholders of the Company as set forth in Section 6.1(a), to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, subject to such approval of the
Merger by the shareholders of the Company as set forth in Section 6.1(a). This
Agreement has been duly executed and delivered by the Company and constitutes a
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms. The execution and delivery of this Agreement do not,
and the consummation of the transactions contemplated hereby and compliance with
the provisions hereof will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation,
contractually require any offer to purchase or any prepayment of any debt,
contractually require the payment of (or result in the vesting of) any
severance, golden parachute, change of control or similar type of payment, or
give rise to the loss of a material benefit under, or result in the creation of
any lien, security interest, charge or encumbrance upon any of the properties or
assets of the Company under, any provision of:
(i) the Articles of Incorporation or Bylaws of the
Company,
(ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, concession, franchise or
license (any of the foregoing, an "Instrument") applicable to the Company (other
than Instruments involving aggregate payments by or to the Company of $100,000
or less), or
(iii) any judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to, or Company Permit (as defined in Section 3.7)
of or relating to, the Company or any of its properties or assets, other than,
in the case of clauses (ii) or (iii), any such conflicts, violations, defaults,
rights, offers, prepayments, payments, losses or liens, that, individually or in
the aggregate, would not have a Material Adverse Effect on the Company,
materially impair the ability of the Company to perform its obligations
hereunder or prevent the consummation of any of the transactions contemplated
hereby.
(b) No filing or registration with, or authorization, consent or
approval of, any domestic (federal and state), foreign or supranational court,
commission, governmental body, regulatory or administrative agency, authority or
tribunal (a "Governmental Entity") is required by or with respect to the Company
in connection with the execution and delivery of this Agreement by the Company
or the consummation by the Company of the transactions contemplated hereby,
except for (i) in connection or in compliance with the provisions of the
Securities Exchange Act of 1934, as amended (including the rules and regulations
6
promulgated thereunder, the "Exchange Act"), (ii) the filing of the Articles of
Merger with the Secretary of State and appropriate documents with the relevant
authorities of other states in which the Company is qualified to do business,
(iii) such filings and approvals as may be required by any applicable state
securities or "blue sky" laws or state takeover laws, and (iv) such other
consents, orders, authorizations, registrations, approvals, declarations and
filings the failure of which to be obtained or made would not, individually or
in the aggregate, have a Material Adverse Effect on the Company, materially
impair the ability of the Company to perform its obligations hereunder or
prevent the consummation of any of the transactions contemplated hereby.
3.4 SEC Documents.
(a) Since May 1, 2000, the Company has filed all documents with
the Securities and Exchange Commission ("SEC") required to be filed under the
Securities Act of 1933, as amended (including the rules and regulations
promulgated thereunder) (the "Securities Act"), or the Exchange Act (such
documents filed with the SEC on or before the date of this Agreement being the
"Company SEC Documents"). As of their respective dates, (i) the Company SEC
Documents complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and (ii) none of the
Company SEC Documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company included
in the Company SEC Documents comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles (except, in the case of unaudited statements
contained in Quarterly Reports on Form 10-Q of the Company, as permitted by the
Exchange Act) applied on a consistent basis during the periods involved (except
as may be indicated therein or in the notes thereto) and fairly present in all
material respects the financial position of the Company as at the dates thereof
and the results of its operations and changes in shareholders' equity and cash
flow for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments and to any other adjustments described
therein).
(b) Except as set forth in the Company SEC Documents, the
Company has no liability or obligation of any nature (whether accrued, absolute,
contingent or otherwise) which would be required to be reflected on a balance
sheet, or in the notes thereto, prepared in accordance with generally accepted
accounting principles, except for liabilities and obligations incurred in the
ordinary course of business consistent with past practice since October 31, 2001
which would not, individually or in the aggregate, have a Material Adverse
Effect on the Company.
(c) To the extent there are such and to the extent permitted by
applicable law, the Company has heretofore made available to Purchasers a
complete and correct copy of any amendments or modifications which have not yet
been filed with the SEC to agreements, documents or other instruments which
previously have been filed with the SEC pursuant to the Exchange Act.
7
3.5 Absence of Certain Events. Since October 31, 2001, the Company
has operated its business only in the ordinary course consistent with past
practice and, except as contemplated by this Agreement or disclosed in the
Company SEC Documents, there has not occurred any Material Adverse Change in the
Company;
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each of the Purchasers represents and warrants to the Company as
follows:
4.1 Organization, Standing and Power. Each of the Purchasers is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction in which it is incorporated and has the requisite corporate
power and authority to carry on its business as now being conducted.
4.2 Authority; Non-Contravention.
(a) Each of the Purchasers has all requisite corporate power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by each of the
Purchasers and the consummation by it of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on its part. This
Agreement has been duly executed and delivered by each of the Purchasers and
constitutes its valid and binding obligation, enforceable against it in
accordance with its terms. The execution and delivery of this Agreement do not,
and the consummation of the transactions contemplated hereby and compliance with
the provisions hereof will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or
give rise to the loss of a material benefit under, or result in the creation of
any lien upon any of the properties or assets of Marketing or Acquisition Sub
under, any provision of:
(i) Its Articles or Certificate of Incorporation or
Bylaws,
(ii) any Instrument applicable to it, or
(iii) subject to the governmental filings and other
matters referred to in Section 4.2(b), any judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to it or any of its properties or
assets, other than, in the case of clauses (ii) or (iii), any such conflicts,
violations, defaults, rights, offers, prepayments, payments, losses or liens,
that, individually or in the aggregate, would not have a Material Adverse Effect
on it, materially impair its ability to perform its obligations hereunder or
prevent the consummation of any of the transactions contemplated hereby.
(b) No filing or registration with, or authorization, consent
or approval of, any Governmental Entity is required by or with respect to it in
connection with its execution and delivery of this Agreement or its consummation
of the transactions contemplated hereby, except for (i) in connection with or in
compliance with the provisions of the Exchange Act, (ii) the filing of the
8
Articles of Merger with the Secretary of State and appropriate documents with
the relevant authorities of other states in which Acquisition Sub is qualified
to do business, (iii) such filings and approvals as may be required by any
applicable state securities or "blue sky" laws or state takeover laws, and (iv)
such other consents, orders, authorizations, registrations, approvals,
declarations and filings the failure of which to be obtained or made would not,
individually or in the aggregate, have a Material Adverse Effect on it,
materially impair its ability to perform its obligations hereunder or prevent
the consummation of any of the transactions contemplated hereby.
4.3 Brokers. No broker, investment banker or other person is entitled
to any broker's, finder's or other similar fee or commission in connection with
the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of Marketing or Acquisition Sub.
4.4 Litigation. There are no actions, suits, proceedings,
investigations or reviews pending against Marketing or Acquisition Sub or, to
its knowledge, threatened against it, at law or in equity, or before or by any
federal or state commission, board, bureau, agency, regulatory or administrative
instrumentality or other Governmental Entity or any arbitrator or arbitration
tribunal.
4.5 Capital Structure and Shareholders.
(a) Pursuant to the agreement by and among the members of the
Offering Group and Marketing, each of the members of the Offering Group (i) has
agreed to transfer to the Offering Group the number of Offering Group Shares
designated opposite his or her name on Schedule 4.5 hereto as "Continuing
Shares" immediately prior to the Effective Time; and (ii) has granted to Xxxxx
X. Xxxxxxxx, as sole director of Marketing, an irrevocable proxy to vote all
Offering Group Shares set forth opposite his name on Schedule 4.5 in favor of
the Merger and on all matters relating to the Merger and special power of
attorney to transfer ownership of such Offering Group Shares to Marketing in the
event of the failure of such Offering Group member to do so in accordance with
clause (i) hereof.
(b) The authorized capital stock of Acquisition Sub consists of
1000 shares, of which all shares are designated as Acquisition Sub Stock. At the
date hereof (i) 1000 shares of Acquisition Sub Stock were issued and outstanding
and held by Marketing, and (ii) no shares of Acquisition Sub Stock are held by
Acquisition Sub in its treasury. All outstanding shares of Acquisition Sub are
validly issued, fully paid and nonassessable and not subject to preemptive
rights.
9
ARTICLE 5
COVENANTS
5.1 Interim Operations of the Company.
(a) From and after the date of this Agreement until the
Effective Time, except as contemplated by any other provision of this Agreement,
unless Acquisition Sub has consented in writing thereto, the Company:
(i) shall conduct its operations according to its usual,
regular and ordinary course in substantially the same manner as heretofore
conducted;
(ii) shall use its reasonable efforts to preserve intact
its business organization and goodwill, keep available the services of its
officers and employees and maintain satisfactory relationships with those
persons having business relationships with it;
(iii) shall not amend its Articles of Incorporation or
Bylaws or comparable governing instruments;
(iv) shall not make any tax election except consistent
with past practice or settle or compromise any material income tax liability;
(v) shall not settle or compromise any pending or
threatened suit, action or claim relating to the transactions contemplated
hereby; or
(vi) shall not agree or otherwise commit to take any of
the foregoing actions or take, or agree to take, any action which would result
in a failure of the condition to Closing set forth in Section 6.3(a).
5.2 Meeting of the Company's Shareholders. The Company will take all
action necessary in accordance with applicable law and its Articles of
Incorporation and Bylaws to convene a meeting of its shareholders (the "Meeting
of Shareholders") as promptly as practicable to consider and vote upon the
approval of this Agreement and the Merger. The Board of Directors of the Company
shall refrain from recommending such approval, but each of Acquisition Sub and
the Company shall take all appropriate and lawful action to solicit such
approval, including, without limitation, timely mailing the Proxy Statement (as
defined in Section 5.6); provided, however, that such solicitation is subject to
any action (including any withdrawal) taken by, or upon authority of, the Board
of Directors of the Company in the exercise of its good faith judgment based
upon the advice of outside counsel as to its fiduciary duties imposed by law.
5.3 Filings, Other Action. Subject to the terms and conditions herein
provided, the Company and the Purchasers shall:
(a) use all reasonable efforts to cooperate with one another in
(i) determining which filings are required to be made prior to the Effective
Time with, and which consents, approvals, permits or authorizations are required
to be obtained prior to the Effective Time from, any Governmental Entity in
connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and (ii) timely making all
such filings and timely seeking all such consents, approvals, permits or
authorizations; and
(b) use all reasonable efforts to take, or cause to be taken,
all other action and do, or cause to be done, all other things necessary, proper
or appropriate to consummate and make effective the transactions contemplated by
10
this Agreement. If, at any time after the Effective Time, any further action is
necessary or desirable to carry out the purpose of this Agreement, the proper
officers and directors of each of Marketing, Acquisition Sub and the Company, as
appropriate, shall take all such necessary action.
5.4 Inspection of Records. From the date hereof to the Effective
Time, the Company shall (i) allow all designated officers, attorneys,
accountants and other representatives of the Purchasers reasonable access at all
reasonable times upon reasonable notice to the offices, records and files,
correspondence, audits and properties, as well as to all information relating to
commitments, contracts, titles and financial position, or otherwise pertaining
to the business and affairs, of the Company, (ii) furnish to the Purchasers'
counsel, financial advisors, auditors and other authorized representatives such
financial and operating data and other information as such persons may
reasonably request, (iii) instruct its employees, counsel and financial advisors
to cooperate with Acquisition Sub and Marketing in their investigation of the
business of the Company, and (iv) make its management personnel available for
discussions with representatives of the Purchasers at mutually convenient times.
5.5 Publicity. The initial press release relating to this Agreement
shall be a joint press release and thereafter the Company, the Purchasers shall,
subject to their respective legal obligations (including requirements of stock
exchanges and other similar regulatory bodies), consult with each other, and use
all reasonable efforts to agree upon the text of any press release, before
issuing any such press release or otherwise making public statements with
respect to the transactions contemplated hereby and in making any filings with
any Governmental Entity or with any national securities exchange (or other
similar regulatory body) with respect thereto.
5.6 Proxy Statement and Other SEC Filings.
(a) The Company shall prepare and file with the SEC as soon as
practicable a preliminary form of the proxy statement (the "Proxy Statement") to
be mailed to the holders of Company Stock in connection with the Meeting of
Shareholders. The Company will cause the Proxy Statement to comply as to form in
all material respects with the applicable provisions of the Exchange Act. The
Company will use its reasonable best efforts to respond to any comments of the
SEC or its staff and to cause the Proxy Statement to be cleared by the SEC. The
Company will notify the Purchasers of the receipt of any comments from the SEC
or its staff and of any request by the SEC or its staff for amendments or
supplements to the Proxy Statement or for additional information and will supply
the Purchasers with copies of all correspondence between the Company or any of
its representatives, on the one hand, and the SEC or its staff, on the other
hand, with respect to the Proxy Statement prior to its being filed with the SEC
and shall give Marketing the opportunity to review all amendments and
supplements to the Proxy Statement and all responses to requests for additional
information and replies to comments prior to their being filed with, or sent to,
the SEC. Each of the Company and Marketing agrees to use its reasonable best
efforts, after consultation with the other parties hereto, to respond promptly
to all such comments of and requests by the SEC. As promptly as practicable
after the Proxy Statement has been cleared by the SEC, the Company shall mail
the Proxy Statement to the shareholders of the Company. If at any time prior to
the approval of this Agreement by the Company's shareholders there shall occur
any event that should be set forth in an amendment or supplement to the Proxy
11
Statement, the Company will prepare and mail to its shareholders such an
amendment or supplement.
(b) The Company agrees that the Proxy Statement and each
amendment or supplement thereto at the time of mailing thereof and at the time
of the Meeting of Shareholders will not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the foregoing
shall not apply to the extent that any such untrue statement of a material fact
or omission to state a material fact was made by the Company in reliance upon
and in conformity with written information concerning the Purchasers furnished
to the Company by the Purchasers specifically for use in the Proxy Statement.
Each of the Purchasers agrees that the information concerning such Purchaser
provided by it in writing for inclusion in the Proxy Statement and each
amendment or supplement thereto, at the time of mailing thereof and at the time
of the Meeting of Shareholders will not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(c) The parties hereto, together with the Offering Group (each,
for purposes of this paragraph c and the following paragraph d, a "Filing
Person" and collectively "Filing Persons") shall prepare and file with the SEC
as soon as practicable a Rule 13e-3 Transaction Statement on Schedule 13E-3 (the
"Schedule 13E-3") in connection with the Merger. The parties hereto will cause
the Schedule 13E-3 to comply as to form in all material respects with the
applicable provisions of the Exchange Act. Each of the parties hereto will use
its reasonable best efforts to respond to any comments of the SEC or its staff
and to cause the Schedule 13E-3 to be cleared by the SEC. Each party will notify
each other Filing Person of the receipt of any comments from the SEC or its
staff and of any request by the SEC or its staff for amendments or supplements
to the Schedule 13E-3 or for additional information and will supply the other
Filing Persons with copies of all correspondence between it or any of its
representatives, on the one hand, and the SEC or its staff, on the other hand,
with respect to the Schedule 13E-3 prior to its being filed with the SEC and
shall give the other Filing Persons and their respective counsel the opportunity
to review all amendments and supplements to the Schedule 13E-3 and all responses
to requests for additional information and replies to comments prior to their
being filed with, or sent to, the SEC. Each of the parties hereto agrees to use
its reasonable best efforts, after consultation with the other Filing Persons,
to respond promptly to all such comments of and requests by the SEC. Marketing
agrees to cause the filing in cooperation with the Surviving Corporation and the
Offering Group of a final Schedule 13E-3 promptly after the consummation of the
Merger.
(d) Each party hereto agrees that the Schedule 13E-3 and each
amendment or supplement thereto at the time of the final filing will not
include, as to such party, an untrue statement of a material fact or omit to
state, with respect to such party, a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
5.7 Further Action. Each party hereto shall, subject to the fulfill-
ment at or before the Effective Time of each of the conditions of performance
set forth herein or the waiver thereof, perform such further acts and execute
such documents as may be reasonably required to effect the Merger.
12
5.8 Expenses. Whether or not the Merger is consummated, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses except as
expressly provided herein.
5.9 Indemnification.
(a) From and after the Effective Time, Marketing agrees to, and
to cause the Surviving Corporation to, indemnify and hold harmless all past and
present officers and directors of the Company, including directors acting as
members of a committee of the Board of Directors (the "Indemnified Parties") to
the full extent such persons may be indemnified by the Company pursuant to the
Company's Articles of Incorporation and Bylaws as in effect as of the date
hereof and the NCBCA for acts and omissions occurring at or prior to the
Effective Time and shall advance reasonable litigation expenses incurred by such
persons in connection with defending any action arising out of such acts or
omissions, provided that such persons provide the requisite affirmations and
undertakings, as required by applicable law or set forth in the Company's
Articles of Incorporation or Bylaws as in effect prior to the Effective Time.
(b) Any Indemnified Party will promptly notify Marketing and
the Surviving Corporation of any claim, action, suit, proceeding or
investigation for which such party may seek indemnification under this Section;
provided, however, that the failure to furnish any such notice shall not relieve
Marketing or the Surviving Corporation from any indemnification obligation under
this Section except to the extent Marketing or the Surviving Corporation is
prejudiced thereby. In the event of any such claim, action, suit, proceeding, or
investigation, (x) the Surviving Corporation will have the right to assume the
defense thereof by counsel reasonably acceptable to the Indemnified Parties, and
the Surviving Corporation will not be liable to such Indemnified Parties for any
legal expenses of other counsel or any other expenses subsequently incurred
thereafter by such Indemnified Parties in connection with the defense thereof,
except that all Indemnified Parties (as a group) will have the right to retain
one separate counsel, reasonably acceptable to such Indemnified Parties and
Marketing, at the expense of the indemnifying party if the named parties to any
such proceeding include both the Indemnified Parties and the Surviving
Corporation and the representation of such parties by the same counsel would be
inappropriate due to a conflict of interest between them, (y) the Indemnified
Parties will cooperate in the defense of any such matter, and (z) the Surviving
Corporation will not be liable for any settlement effected without its prior
written consent.
(c) This Section 5.9 is intended to benefit the Indemnified
Parties and shall be binding on all successors and assigns of Marketing, the
Company and the Surviving Corporation. Marketing hereby guarantees the
performance by the Surviving Corporation of the indemnified obligations pursuant
to this Section 5.9.
5.10 Takeover Statute. If any "fair price", "moratorium", "control
share acquisition" or other form of anti-takeover statute or regulation shall
become applicable to the transactions contemplated hereby, the Company and the
members of the Board of Directors of the Company shall grant such approvals and
take such actions as are reasonably necessary so that the transactions
13
contemplated hereby may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise act to eliminate or minimize the effects of
such statute or regulation on the transactions contemplated hereby.
5.11 Conduct of Business by the Purchasers Pending the Merger. Prior
to the Effective Time and subject to any applicable regulatory approvals, each
of the Purchasers shall perform its obligations under this Agreement in
accordance with the terms hereof and thereof and take all other actions
necessary or appropriate for the consummation of the transactions contemplated
hereby.
5.12 Transfer of Offering Group Shares. Prior to the Effective Time,
Marketing shall use its reasonable efforts to cause the consummation of the
transfer by the members of the Offering Group to it of the number of Offering
Group Shares set forth in Schedule 4.5 as described in Section 4.5(a).
5.13 Conveyance Taxes. The Company and the Purchasers shall cooperate
in the preparation, execution and filing of all returns, questionnaires,
applications or other documents regarding any real property transfer or gains,
sales, use, transfer, value added, stock transfer and stamp taxes, any transfer,
recording, registration and other fees, and any similar taxes which become
payable in connection with the transactions contemplated by this Agreement that
are required or permitted to be filed on or before the Effective Time.
ARTICLE 6
CONDITIONS TO MERGER
6.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger shall be subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) This Agreement and the transactions contemplated hereby
shall have been approved, in the manner required by applicable law or by the
applicable regulations of any stock exchange or other regulatory body, as the
case may be, by the holders of the majority of the issued and outstanding shares
of the Company Stock entitled to be voted thereon excluding any Offering Group
Shares or Continuing Shares.
(b) None of the parties hereto shall be subject to any order or
injunction of a court of competent jurisdiction which prohibits the consummation
of the transactions contemplated by this Agreement. In the event any such order
or injunction shall have been issued, each party agrees to use its reasonable
efforts to have any such injunction lifted.
(c) All consents, authorizations, orders and approvals of (or
filings or registrations with) any Governmental Entity required in connection
with the execution, delivery and performance of this Agreement shall have been
obtained or made, except for filings in connection with the Merger and any other
documents required to be filed after the Effective Time and except where the
failure to have obtained or made any such consent, authorization, order,
approval, filing or registration would not have a Material Adverse Effect on
Marketing, Acquisition Sub or the Company following the Effective Time.
14
6.2 Conditions to Obligation of Company to Effect the Merger. The
obligation of the Company to effect the Merger shall be subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) Each of the Purchasers shall have performed in all material
respects its agreements contained in this Agreement required to be performed on
or prior to the Closing Date, and the respective representations and warranties
of the Purchasers contained in this Agreement and in any document delivered in
connection herewith shall be true and correct as of the Closing Date, except (i)
for changes specifically permitted by this Agreement or otherwise accepted in
writing by the Company, (ii) for non-performance or breaches which, separately
or in the aggregate, would not have a Material Adverse Effect on Marketing or
Acquisition Sub or on the ability of the parties to consummate the transactions
contemplated by this Agreement and (iii) that those representations and
warranties which address matters only as of a particular date shall remain true
and correct, in all material respects, as of such date.
(b) There shall not have been any action taken, or any statute,
rule, regulation, order, judgment or decree proposed, enacted, promulgated,
entered, issued, or enforced by any Governmental Entity, and there shall be no
action, suit or proceeding pending (with a reasonable likelihood of success),
which (i) makes this Agreement, the Merger, or any of the other transactions
contemplated by this Agreement illegal or imposes or may impose material damages
or penalties in connection therewith, or (ii) otherwise prohibits, restricts, or
delays consummation of the Merger or any of the other transactions contemplated
by this Agreement in any material respect.
6.3 Conditions to Obligation of the Purchasers to Effect the Merger.
The obligations of the Purchasers to effect the Merger shall be subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) The Company shall have performed in all material respects
its agreements contained in this Agreement required to be performed on or prior
to the Closing Date, and the representations and warranties of the Company
contained in this Agreement and in any document delivered in connection herewith
shall be true and correct as of the Closing Date, except (i) for changes
specifically permitted by this Agreement or otherwise accepted in writing by the
Purchasers, (ii) for non-performance or breaches which, separately or in the
aggregate, would not have a Material Adverse Effect on the Company, the
Purchasers or on the ability of the parties to consummate the transactions
contemplated by this Agreement and (iii) that those representations and
warranties which address matters only as of a particular date shall remain true
and correct, in all material respects, as of such date.
(b) From the date of this Agreement through the Effective Time,
there shall not have occurred any Material Adverse Change with respect to the
Company.
(c) There shall not have been any action taken, or any statute,
rule, regulation, order, judgment or decree proposed, enacted, promulgated,
entered, issued, or enforced by any Governmental Entity, and there shall be no
action, suit or proceeding pending (with a reasonable likelihood of success),
which (i) makes this Agreement, the Merger, or any of the other transactions
15
contemplated by this Agreement illegal or imposes or may impose material damages
or penalties in connection therewith, (ii) requires the divestiture of a
material portion of the business of Marketing, or of the Company or of the
Surviving Corporation taken as a whole, (iii) imposes material limitations on
the ability of Marketing effectively to exercise full rights of ownership of
shares of capital stock of the Surviving Corporation (including the right to
vote such shares on all matters properly presented to the shareholders of the
Surviving Corporation) or makes the holding by Marketing of any such shares
illegal or subject to any materially burdensome requirement or condition, (iv)
requires Marketing, the Company, the Surviving Corporation or any of their
respective material affiliates to cease or refrain from engaging in any material
business, or (v) otherwise prohibits, restricts, or delays consummation of the
Merger or any of the other transactions contemplated by this Agreement in any
material respect or increases or may increase in any material respect the
liabilities or obligations of Marketing or the Surviving Corporation arising out
of this Agreement, the Merger, or any of the other transactions contemplated by
this Agreement.
(d) Not more than 5% of the outstanding shares of the Company
entitled to vote at the Meeting of Shareholders shall have perfected appraisal
rights in respect of the Merger.
ARTICLE 7
TERMINATION
7.1 Termination by Mutual Consent. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time, before
or after the approval of this Agreement by the shareholders of the Company, by
the mutual consent of Marketing, Acquisition Sub and the Company.
7.2 Termination by any Party. This Agreement may be terminated and
the Merger may be abandoned by action of the Board of Directors of any party
hereto if (a) the Merger shall not have been consummated by July 31, 2002, (b)
the approval of the Company's shareholders required by Section 6.1(a) shall not
have been obtained at a meeting duly convened therefor or at any adjournment
thereof or (c) a United States federal or state court of competent jurisdiction
or United States federal or state governmental, regulatory or administrative
agency or commission shall have issued an order, decree or ruling or taken any
other action permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement and such order, decree, ruling or
other action shall have become final and non-appealable; provided, that the
party seeking to terminate this Agreement pursuant to this clause (c) shall have
used all reasonable efforts to remove such injunction, order or decree; and
provided, in the case of a termination pursuant to clause (a) above, that the
terminating party shall not have breached in any material respect its
obligations under this Agreement in any manner that shall have proximately
contributed to the failure to consummate the Merger by July 31, 2001.
7.3 Extension, Waiver.
At any time prior to the Effective Time, any party hereto, by action
taken by its Board of Directors, may, to the extent legally allowed, (i) extend
the time for the performance of any of the obligations or other acts of the
16
other parties hereto, (ii) waive any inaccuracies in the representations and
warranties made to such party contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any of the agreements or
conditions for the benefit of such party contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party.
17
ARTICLE 8
GENERAL PROVISIONS
8.1 Nonsurvival of Representations, Warranties and Agreements. All
representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall be deemed to the extent
expressly provided herein to be conditions to the Merger and shall not survive
the Merger, provided, however, that the agreements contained in Article 2 shall
survive the Merger.
8.2 Assignment; Binding Effect. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns. Notwithstanding anything
contained in this Agreement to the contrary, except for the provisions of
Section 5.9, nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto or their respective heirs,
successors, executors, administrators and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
8.3 Entire Agreement. This Agreement, the Schedules, and any
documents delivered by the parties in connection herewith constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings among the parties with respect
thereto. No addition to or modification of any provision of this Agreement shall
be binding upon any party hereto unless made in writing and signed by all
parties hereto.
8.4 Amendment. This Agreement may be amended by the parties hereto,
by action taken by their respective Boards of Directors, at any time before or
after approval of matters presented in connection with the Merger by the
shareholders of the Company, but after any such shareholder approval, no
amendment shall be made which by law requires the further approval of
shareholders without obtaining such further approval. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
8.5 Governing Law. This Agreement shall be governed by, and construed
in accordance with the laws of North Carolina applicable to contracts executed
and to be performed entirely within that State without regard to the conflicts
of laws principles thereof.
8.6 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies
hereof each signed by less than all, but together signed by all of the parties
hereto.
8.7 Headings. Headings of the Articles and Sections of this Agreement
are for the convenience of the parties only, and shall be given no substantive
or interpretive effect whatsoever.
18
8.8 Interpretation. In this Agreement, unless the context otherwise
requires, words describing the singular number shall include the plural and vice
versa, and words denoting any gender shall include all genders and words
denoting natural persons shall include corporations and partnerships and vice
versa.
8.9 Waivers. Except as provided in this Agreement, no action taken
pursuant to this Agreement, including, without limitation, any investigation by
or on behalf of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representations, warranties, covenants
or agreements contained in this Agreement. The waiver by any party hereto of a
breach of any provision hereunder shall not operate or be construed as a waiver
of any prior or subsequent breach of the same or any other provision hereunder.
8.10 Incorporation of Schedules. The Schedules attached hereto and
referred to herein are hereby incorporated herein and made a part hereof for all
purposes as if fully set forth herein.
8.11 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
8.12 Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with its specific terms or was otherwise breached.
It is accordingly agreed that the parties shall be entitled to obtain an
injunction or injunctions to prevent breaches of this Agreement, this being in
addition to any other remedy to which they are entitled at law or in equity. By
each party's execution and delivery hereof, such party hereby irrevocably
submits to the jurisdiction of any such court in connection with any such suit
or proceeding, irrevocably waives any objection, including any objection to the
laying of venue or based on the grounds of forum non conveniens, which it may
now or hereafter have to the bringing of any action or proceeding in such
jurisdiction in respect of this Agreement or any document related hereto and
each waives personal service of any summons, complaint or other process which
may be made by any other means permitted by North Carolina law. EACH PARTY
HERETO IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY SUIT OR PROCEEDING
BROUGHT TO ENFORCE OR INTERPRET THIS AGREEMENT.
19
IN WITNESS WHEREOF, the parties have executed this Agreement and caused
the same to be duly delivered on their behalf on the day and year first written
above.
MARKET AMERICA, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Xxxxx X. Xxxxxxxx
President
MIRACLE MARKETING INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Xxxxx X. Xxxxxxxx
President
MA ACQUISITION SUB INC.
By: Miracle Marketing Inc.,
Its Sole Shareholder
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Xxxxx X. Xxxxxxxx
President
20
SCHEDULE 4.5
OFFERING CONTINUING
OFFERING GROUP MEMBERS GROUP SHARES SHARES
---------------------- ------------ ------
Xxxxx X. Xxxxxxxx 15,040,200 15,040,200
Xxxxx X. Xxxxxxxx 101,450 101,450
Xxxxxx X. Xxxxxxxx 532,000(1) 300,000
Xxxxxx Xxxxxxxx 150,000 150,000
Xxxx Xxxxxx 50,000 50,000
Xxxxxx X. Xxxxxx 20,000 20,000
Xxxxxx X. Xxxxxxx 50,000 50,000
---------- ----------
TOTAL 15,943,650 15,711,650
========== ==========
--------
(1) Includes 232,000 shares of Market America Stock beneficially owned
by Xxxxxx X. Xxxxxxxx XXX, T.D. Xxxxxxxxxx Custodian.
